CuFe Ltd
ABN 31 112 731 638
AND CONTROLLED ENTITIES
ANNUAL REPORT 2024
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
Link Market Services
Level 12, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone:
Email:
Website:
1300 554 474 (within Australia)
+61 (8) 9211 6670 (overseas)
info@linkmarketservices.com.au
www.linkmarketservices.com.au
Auditors
Stantons
Level 2, 40 Kings Park Road
West Perth, WA 6005
ASX
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 13 June 2027 with an
exercise price of $0.025 (ASX Code: CUFO).
Contents
Annual Report 2024
1
CONTENTS
DIRECTORS’ REPORT
2
AUDITOR’S INDEPENDENCE DECLARATION TO DIRECTORS
23
CORPORATE GOVERNANCE STATEMENT
24
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
25
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
26
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
27
CONSOLIDATED STATEMENT OF CASH FLOWS
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
65
DIRECTORS’ DECLARATION
66
INDEPENDENT AUDITOR’S REPORT
67
SCHEDULE OF TENEMENTS
73
ADDITIONAL SHAREHOLDER INFORMATION
76
Directors’ Report
Annual Report 2024
2
DIRECTORS’ REPORT
The directors of CuFe Ltd (CUF, CuFe 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 2024.
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, Austria, Peru, Romania, Russia, Sierra Leone, Guinea, Cote d’Ivoire, Congo, South
Africa, Indonesia, China and Australia. Mr Antony Sage is currently a director of Cyclone Metals Ltd (ASX: CLE),
European Lithium Limited (ASX: EUR), and Critical Metals Corp. (Nasdaq: CRML). 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);
▪
European Lithium Limited (September 2016 to Present); and
▪
Critical Metals Corp. (February 2024 to Present).
Interest in shares & options at
date of this report:
30,173,010 fully paid ordinary shares
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); and
▪
Strandline Resources Ltd (August 2020 to Present).
Interest in shares & options at
date of this report:
5,000,000 fully paid ordinary shares
15,000,000 unlisted options at $0.019 expiring 29 November 2025
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
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
Directors’ Report
Annual Report 2024
3
General Counsel of the Gold Valley Group, the Company’s major shareholder and therefore is not considered by
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, CuFe or the Company) is an Australian based mineral producer and explorer with
holdings, or rights or interests in, various tenements prospective for iron ore, copper, lithium, gold, and rare
earths located in Western Australia and the Northern Territory.
During the year ended 30 June 2024, the Company’s main focus was 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). The Company also has a portfolio of prospective of exploration tenure across
Western Australia which it is advancing. These projects are discussed in further detail in the Review of
Operations below.
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. After the year end the Company has entered an agreement to
dispose of its iron ore rights at JWD, with the agreement being subject to a number of conditions precedent
including approval by shareholders of the Company. Refer to the subsequent events note for details of the
proposed Sale of JWD Iron Ore Mining Rights (announced 26 August 2024).
DIVIDENDS AND DISTRIBUTIONS
No dividends or distributions were paid to members during the year and none were recommended or declared
for payment (30 June 2023: nil).
REVIEW OF OPERATIONS
CORPORATE
Completion of JWD Iron Ore Project Restructure Transaction
On 22 February 2023, the Company announced that it had 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:
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Annual Report 2024
4
▪
CUF to increase its interest in the iron rights over the JWD iron ore mine from 60% to 100% via the
issue of 150,000,000 CUF shares and refunding the historical GVG cash contributions (being $1.71m at
completion) (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 $2,225,000 to be settled via transfer of 5% of its joint venture interest in the Tennant
Creek Copper Project; and
▪
Yarram milestone payment of $1,500,000 re-structured such that:
o
the Company has agreed to carry the next $500,000 of GVG’s joint venture costs contribution
under the Yarram Joint Venture; and
o
the $1,000,000 payable to GVG in cash or shares at the Company’s election is deferred until a
decision to mine is made rather than on announcement of indicated resource.
Refer to ASX Announcements dated 22 February 2023, 11 May 2023 and 4 September 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, the Company holds:
▪
100% interest in the JWD iron ore mine;
▪
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.
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Annual Report 2024
5
Agreement to acquire MLN 15/1841 (part of ‘North Dam Project’)
On 20 December 2023, the Company announced it had reached an agreement to purchase MLN15/1841. The
MLN sits in a highly prospective trend and within a drill target area that CuFe intends to drill and explore. It has
been mined through shallow surface workings for precious gems including tourmaline and beryl. The transaction
involves a purchase price of $50,000 and a 1% sales royalty on material sourced from the lease. Completion
occurred in March 2024.
Placement
On 20 May 2024, the Company announced that it had received commitments to raise $3,000,000 through a
placement of 187,500,000 ordinary shares (Placement Shares) to professional and sophisticated investors at
an issue price of $0.016 per share (Placement). For every two (2) Placement Shares subscribed for, investors
were entitled to receive one (1) free-attaching option at an exercise price of $0.025 expiring 3 years from date
of issue (Placement Options).
The Placement Shares were issued on 24 May 2024, and accordingly the funds received by the Company
pursuant to the Placement are reflected in the Company’s cash inflows from financing activities. The Placement
Options were issued on 13 June 2024 and were quoted on 17 June 2024 (ASX: CUFO).
Copeak Pty Ltd (Peak) and Evolution Capital Pty Ltd (Evolution) were engaged as corporate advisors and joint
lead manager (JLM) to provide services in connection with the Placement. The JLM was also entitled to receive
50,000,000 options on same terms as the Placement Options (Lead Manager Options), subject to receipt of
shareholder approval. Shareholder approval was received at the general meeting held 23 July 2024 (subsequent
to year end).
Operating Results
The consolidated loss after income tax for the year ended 30 June 2024 amounted to $13,622,430 (30 June
2023: $11,154,755 loss after income tax). This gross loss from operations of $3,644,271 is offset by the net
realised and unrealised hedging gain for the year of $1,807,562 and gain on disposal of Tennant Creek project
interest (interest reduced from 60% to 55%) of $1,486,096. The remainder of the net loss relates to non cash
amortisation and depreciation of $9,494,726 (30 June 2023: $4,231,981), exploration and evaluation costs
expensed, including the Yarram JV of $1,213,505 and other corporate expenses.
Annual General Meeting
The Company’s Annual General Meeting was held on 29 November 2023 (AGM). All resolutions put to the
meeting were passed via a poll.
Shares issued
During the year the Company issued the following shares:
▪
30,000,000 shares were issued 7 August 2023 for the acquisition of West Arunta (E80/5925) and
Tambourah (P45/3061) exploration tenure;
▪
150,000,000 shares were issued on 1 September 2023 pursuant to the Restructure Transaction.
▪
187,500,000 shares issued on 24 May 2024 (being the Placement Shares); and
▪
1,500,000 shares issued on 24 May 2024 to a supplier for provision of services.
Options issued
During the year the Company issued the following options:
▪
13,000,000 unlisted options at $0.02 expiring 7 August 2025 were issued under the Company’s
Employee Securities Incentive Plan (ESIP);
▪
15,000,000 unlisted options exercisable at $0.019 and expiring 29 November 2025 were issued to a
director following receipt of shareholder approval at the AGM;
▪
93,750,000 listed options (ASX:CUFO) exercisable at $0.025 expiring 13 June 2027 were issued (being
the Placement Options).
Directors’ Report
Annual Report 2024
6
Options exercised
There were no options exercised during the year.
Options lapsed or expired
The following options lapsed or expired during the year:
▪
3,000,000 unlisted options exercisable at $0.04 expired on 31 August 2023;
▪
5,000,000 unlisted options exercisable at $0.035 expired on 12 October 2023;
▪
70,000,000 listed options (ASX:CUFO) exercisable at $0.06 expired on 24 November 2023;
▪
4,000,000 unlisted options exercisable at $0.02 with an expiring 7 August 2025 lapsed; and
▪
5,000,000 unlisted options exercisable at $0.045 expired on 12 April 2024.
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 which will draw on working capital.
▪
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 physical material to match its hedge volumes
this could create additional liability for the Company.
▪
Operational Risk – there are a number of factors such as geological, geotechnical mining, approval,
environmental, heritage, weather, safety and 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. This
risk is escalated for parts of the Company’s tenure which is located on Aboriginal Reserve where specific
consents to access and conduct activities are required.
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
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7
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 – CUF (100%) (Western Australia)1
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. The key challenge for the project is its 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.
The mine has operated for the full financial year, albeit with significant weather interruption during the March
2024 quarter, whereas the prior financial year had a period where operations were suspended. This resulted in
shipped volumes increasing to 663,285 WMT from 418,706 WMT in the previous financial year. Costs per tonne
shipped reduced slightly at A$140.57 / WMT from A$142.70 / WMT.
Iron ore prices have continued to be volatile over the year with realised prices from physical sales increasing to
A$152.28 / WMT from A$136.12 / WMT but hedge gains decreasing to A$0.20 / WMT from A$24.62 / WMT
meant that overall revenue reduced.
The iron ore price has dropped significantly post year end which leads to negative future adjustments to revenue
on provisionally price cargos and to as suspension in operations to reduce operating losses and preserve the
value of the ore in the ground.
Operations Summary
Production metrics
(100%)
Measure
Q1
Q2
Q3
Q4
FY24
Total material moved
BCM
247,706
360,306
308,596
207,034
1,123,642
Ore mined
wmt
239,047
165,530
227,869
215,310
847,756
Ore processed
wmt
228,550
151,985
193,346
275,689
849,570
Ore hauled to port
wmt
160,640
170,286
141,382
173,520
645,828
Ore shipped
wmt
160,402
181,784
151,550
169,549
663,285
Lump
wmt
141,912
94,312
82,442
154,686
473,352
Fines
wmt
18,489
87,472
69,108
14,863
189,932
Inventory
ROM
wmt
105,182
118,727
156,758
99,071
99,071
Site Finished Product
wmt
17,759
4,128
67,591
77,966
77,966
Port
wmt
27,556
16,497
2,642
2,487
2,487
Revenue (FOB)
US$/wmt
$107.31
$109.62
$92.25
$95.87
$102.81
Revenue (FOB) Lump
US$/wmt
$109.91
$124.45
$95.77
$98.46
$106.60
Revenue (FOB) Fines
US$/wmt
$87.32
$93.63
$88.06
$68.90
$90.55
Revenue (FOB)
A$/wmt
$162.40
$162.72
$138.13
$144.73
$152.28
Realised Hedging Gains/
(losses)
A$/wmt
($3.54)
($19.16)
$4.85
$20.34
$0.20
Total Revenue
A$/wmt
$158.86
$143.56
$142.98
$164.78
$152.49
C1 Costs ($/wmt by Activity)
A$/wmt
$118.75
$143.49
$136.28
$127.83
$129.52
C1 Costs ($/wmt Shipped)
A$/wmt
$130.80
$130.64
$155.62
$151.26
$140.57
1 Amounts referred to in this section of the Directors’ Report are stated at 100% of the amounts of the JWD
Project (previously JWD JV). In accordance with its accounting policy in respect of the joint operation, up until
completion of the Restructure Transaction on 1 September 2023, CUF has taken up its 60% share of assets,
liabilities and results of the JWD JV in the Group’s consolidated financial statements. Following completion of the
Restructure Transaction on 1 September 2023, CUF consolidates its 100% interest.
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8
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.
The project has a JORC 2012 Inferred Resource of 12.7 MT at 55.4% Fe including a high grade component of
5.6MT at 60.4% (refer CUF ASX release dated 28 February 2023 for details).
A key work stream over the year was undertaking a 6 hole, 361m PQ drilling campaign to source core to enable
completion of geotechnical and metallurgical testwork campaign. The resulting information will assist in mine
design and product characterisation.
Other workstreams included completion of a flora baseline study over the project area and a review of approval
requirements to develop a roadmap to progress the project to being construction ready.
Tennant Creek Mining Rights (Northern Territory)
The Company owns a 55% interest2 in copper / gold assets which have been the subject of historical mining at
Tennant Creek in the Northern Territory.
The project has an indicated and inferred JORC resource of 7.3MT at 1.7% Cu and 0.6g/t gold (refer CUF ASX
release dated 3 April 2023 for details).
The Company conducted mine planning activities to facilitate the potential cutback of the Orlando pit while
commencing a review of the exploration potential of the landholding, which was completed and released to the
market post year end and confirmed a number of drill ready targets which will be progressed during the coming
financial year.
Figure: Existing Orlando Copper / Gold pit
North Dam Project – (Western Australia)
2 Reduced from 60% to 55% interest as part of the Restructure Transaction which completed on 1 September
2023.
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9
Following the acquisition of E15/1459 on 6 June 2023 CuFe commenced exploration across the tenement
comprising field reconnaissance, mapping, rock chip sampling and a soil geochemical program. CuFe announced
significant initial Rare Earth Elements, Niobium and Lithium results from the North Dam Project (refer to ASX
announcements of 22 August 2023, 8 April 2024 and 18 June 2024). 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 47.1% 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.
In addition to the on-ground exploration and target identification work the Company completed environmental
and heritage surveys to facilitate approvals to conduct its maiden drill campaign at North Dam. These approvals
were successfully achieved and drilling commenced post year end, with results expected in October 2024.
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 in the highly prospective Bryah Basin proximal to the former 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 prospective mineral field with potential for further discovery of gold and base metals.
Morck Well Project - AUR/CUF - E51/1033 and E52/1672
The Morck Well project is located in the eastern part of the Bryah Basin and contains approximately 20km strike
length of the 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 and E52/1672) within AUR’s Morck Well JV project.
Peak Hill Project Base Metals Rights – ALY/ CUF - E52/1668, E52/1678 and E52/1730
The Peak Hill project covers approximately 20km strike of the prospective Narracoota Volcanic Formation
sequence in the Bryah Basin and is proximal to SFR’s former Monty mine.
CUF holds its 20% free carried interests in all minerals to decision to mine, via wholly owned subsidiary Jackson
Minerals Pty Limited (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). CUF retains its 20% free carried interests in all minerals to
decision to mine, via wholly owned subsidiary Jackson Minerals.
Robertson Range Project – E52/1613
CUF, via its wholly owned subsidiary Jackson Minerals has a 100% interest in the Robertson Range tenement
E52/1613. This tenement was previously part of the Morck Well project in JV with Auris, who withdrew from the
JV during the year leaving Jackson Minerals with 100%. Jackson intends to focus on the iron ore potential of the
area and post end has announced the presence of high grade iron ore rock chips on the tenement (refer CUF
ASX announcement dated 17 July 2024)
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10
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.
Crossroads Gold Royalty (2% NSR)
On 31 May 2024, the Company provided an update on a royalty interest it holds via its wholly owned subsidiary
Jackson Minerals Pty Ltd (Jackson) over the Crossroads Gold Project in Kalgoorlie owned and operated by
Northern Star Resources Ltd (Northern Star).
This royalty interest comprises a 2% Net Smelter Royalty over M24/462 and was acquired via the acquisition of
Jackson in 2009.
Northern Star has recently received approval from the regulator DEMIRS of a mining proposal to extract up to
2.67MT of ore over a 36 month period, which is proposed to commence production in the second half of 2024.
The majority of ore extraction is forecast to occur in years 2 and 3 of the 36 month period once pre-stripping
has occurred. The pit design included in the mining proposal extends slightly outside M24/462 so it is possible
not all of the ore proposed to be extracted is subject to the royalty.
No gold grades are stated in the mining proposal and as the Crossroads project forms part of Northern Star’s
wider operations in the region (to CuFe’s knowledge) no stand-alone Crossroads JORC resource or reserve has
been published by Northern Star to assist in determining the total ounces expected to be produced and the
resulting revenue that may be expected.
Refer ASX Announcement 31 May 2024 for further details.
Annual Resource Statements
JWD Iron Ore Mineral Resources
JWD Iron Ore Mineral Resources at 30 June 2024
Model
Cut-Off
Grade
Classification
Tonnes
(Mt)
Fe
(%)
SiO2
(%)
Al2O3
(%)
P %
LOI %
Mineral
Resources
30 June
2020
(prior to
mining)
> 55%
Fe
Measured
6.4
64.06
2.64
1.52
0.034
3.07
Indicated
0.9
63.6
2.77
1.33
0.030
3.57
Inferred
3.4
63.13
3.23
1.58
0.029
3.38
Total
10.7
63.73
2.83
1.52
0.032
3.21
Total
Mining
Depletion
to 30 June
2024
> 55%
Fe
Measured
2.01
63.75
3.24
1.91
0.026
2.81
Indicated
0.01
61.23
6.96
2.04
0.022
2.61
Inferred
0.04
60.55
5.34
2.81
0.034
2.89
Total
2.06
63.67
3.30
1.93
0.027
2.81
Mineral
Resources
as of 30
June 2024
> 55%
Fe
Measured
4.39
63.47
2.37
1.34
0.04
3.16
Indicated
0.89
63.63
2.72
1.32
0.03
3.61
Inferred
3.36
63.16
3.20
1.56
0.03
3.39
Total
8.64
63.37
2.73
1.43
0.033
3.29
Directors’ Report
Annual Report 2024
11
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.
Directors’ Report
Annual Report 2024
12
Yarram Iron Ore Mineral Resources
Yarram Iron Ore Mineral Resources at 30 June 2024
Deposit
Cut-Off
Grade
Classification Tonnes
(Mt)
Fe (%)
SiO2
(%)
Al2O3
(%)
P %
LOI %
Captain
Morgan
> 48%
Fe
Measured
-
-
-
-
-
-
Indicated
-
-
-
-
-
-
Inferred
3.1
51.18
8.04
4.94
0.230
8.84
Total
3.1
51.18
8.04
4.94
0.230
8.84
Kraken
> 48%
Fe
Measured
-
-
-
-
-
-
Indicated
-
-
-
-
-
-
Inferred
9.7
56.75
7.02
5.23
0.190
4.09
Total
9.7
56.75
7.02
5.23
0.190
4.09
Total
Mineral
Resources
> 48%
Fe
Measured
-
-
-
-
-
-
Indicated
-
-
-
-
-
-
Inferred
12.7
55.41
7.27
5.16
0.200
5.24
Total
12.7
55.41
7.27
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.
Tennant Creek Copper Mineral Resources
Tennant Creek Copper Mineral Resources at 30 June 2024
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
Measured
-
-
-
-
-
-
-
Indicated
1.4
2.54
35,416
-
-
-
-
Inferred
0.08
1.54
1,228
-
-
-
-
Total
1.48
2.48
36,644
-
-
-
-
Goanna
>1%
Cu
Measured
-
-
-
-
-
-
-
Indicated
-
-
-
-
-
-
-
Inferred
2.92
1.84
53,766
0.16
14,700
-
-
Total
2.92
1.84
53,766
0.16
14,700
-
-
Orlando
>1%
Au eq
Measured
-
-
-
-
-
-
Indicated
2.13
1.36
29,077
1.44
98,462
3.25
222,799
Inferred
0.75
0.98
7,302
1.31
31,396
2.61
62,620
Total
2.88
1.26
36,380
1.4
129,858
3.08
285,419
Total Group
Copper
Mineral
Resources
at 30 June
2024
>1%
Au eq
Measured
-
-
-
-
-
-
Indicated
3.53
1.83
64,494
1.44
98,462
3.25
222,799
Inferred
3.74
1.66
62,296
0.38
46,096
2.61
62,620
Total
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).
Directors’ Report
Annual Report 2024
13
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).
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.
Directors’ Report
Annual Report 2024
14
SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE
Sale of JWD Iron Ore Mining Rights
On 26 August 2024 the Company announced that it had entered a binding term sheet for the disposal of:
a) 100% of its rights, title and interest in the Iron Ore Rights;
b) the rights and obligations under all associated contracts, authorisations and permits required to operate
the JWD mine;
c)
the benefit of all contributions made by CuFe and/or WFE to the rehabilitation fund established for the
purpose of satisfying the rehabilitation obligations pertaining to mining at the JWD mine; and
d) all of its rights, title and interest in certain stockpiles of iron ore, overburden and waste material located
at the JWD mine,
(together, the Assets).
Wiluna Fe Pty Ltd (WFE), a 100% owned subsidiary of CuFe Ltd owns 100% rights, title and interest in the
Assets, including the rights to extract iron ore from the JWD deposit located near Wiluna in WA, and has agreed
to sell those rights to Newcam Minerals Pty Ltd (Newcam) for $12 million cash. WFE remains responsible for the
JWD trade creditors outstanding at the date of execution of the agreement (which approximate $8m outstanding
on normal 30 day terms and approximately $4m payable to Newcam for iron ore sales proceeds from sale of
material from the Mt Gould mine made on their behalf under a shared shipment arrangement). WFE is also
responsible for creditors incurred until the time of completion unless mining or processing of material owned by
Newcam, in which case CuFe will be reimbursed at completion. WFE retains ownership of certain stockpiles on
hand at date of signing (approximately 50,000t of final product and 50,000t of RoM product) which it can realise
moving forward, its hedge positions and trade debtors.
The final reconciliation of the proceeds received from these will be determined once provisionally priced
shipments are finalised, hedges settled and costs compared to sales proceeds over the period to completion are
known with a current estimated range of $1.5-3m net inflow to CuFe.
CuFe and Newcam have agreed the JWD mine will move to suspend operations while the ownership transition
occurs given the current challenging conditions in the iron ore market, to preserve the value of ore in the
ground.
Key conditions precedent to the transaction, which are to be satisfied not later than 31 October 2024 include:
▪
CuFe shareholder approval for the purposes of ASX Listing Rule 11.2;
▪
Assignment of existing or entry into new offtake arrangements between Glencore and Newcam; and
▪
Necessary regulatory approvals and third-party consents including that of the tenement owner.
Approval from shareholders will be sought at the upcoming general meeting scheduled to be held 10 October
2024.
For further details, refer ASX Announcement dated 26 August 2024.
Issue of Shares
The following shares were issued subsequent to year end:
▪
1,562,500 shares were issued as part of consideration for the acquisition of West Arunta tenement
E80/6052.
Movements in Options
The following movements in options occurred subsequent to year end:
▪
50,000,000 listed options (ASX:CUFO) exercisable at $0.025 expiring 13 June 2027 were issued (being
the Lead Manager Options), following receipt of shareholder approval at the 23 July 2024 general
meeting; and
▪
27,750,000 unlisted options exercisable at $0.027 expired 7 September 2024.
Directors’ Report
Annual Report 2024
15
There have been no other events subsequent to 30 June 2024 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
With the exception of its intended divestment of its iron ore mining rights at JWD, 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.
As detailed in the subsequent events note, the Company announced on 26 August 2024 that it had entered into
a binding agreement to sell the iron ore rights pertaining to the JWD iron ore mine, completion of which remains
subject to certain conditions precedent including receipt of shareholder approval. Subject to completion of the
transaction occurring, the Company intends to:
▪
continue to pursue exploration activities at its exploration assets in the future-facing minerals sector;
and
▪
to investigate and pursue further opportunities that may enhance shareholder value.
DIRECTORS’ MEETINGS
There were no formal directors’ meetings held during the year, with all matters resolved via written circular
resolutions following informal discussions.
Directors’ Report
Annual Report 2024
16
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
Executive Chairman
M Hancock
Executive Director
N Sage
Non-Executive Director
S Meacock
Non-Executive Director
Remuneration Philosophy
The performance of the Group depends on the quality of its directors, executives and employees. Consequently,
the Group must attract, motivate and retain appropriately qualified industry personnel.
The following principles are embodied in the remuneration framework:
•
provide competitive rewards to attract and retain high calibre executives, directors and employees; and
•
link executive rewards to shareholder value.
Remuneration Policy
During the year, the Company did not have a separately established remuneration committee. The Board is
responsible for determining and reviewing remuneration arrangements for the executive and non-executive
directors and the Chairman. The Board assesses the appropriateness of the nature and amount of remuneration
of such officers on a yearly basis by reference to relevant employment market conditions with the overall
objective of ensuring maximum stakeholder benefit from retention of a high-quality board. The directors receive
their base emolument in the form of cash.
Remuneration in the form of share-based payments to Directors are issued to align directors’ interests with that
of shareholders, including options issued to Executive Directors that vest on satisfaction of specific performance
conditions.
The Group has a policy which restricts executives and directors entering into contracts to hedge their exposure
to options granted as part of their remuneration package.
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 2023 AGM
The 2023 remuneration report received positive shareholder support at the 2023 AGM whereby of the proxies
received 99.82% voted in favour of the adoption of the remuneration report.
Directors’ Report
Annual Report 2024
17
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
Loss per share
(Cents)
Share Price
(Cents)
30 June 2020
5,908
1.22
1.30
30 June 2021
(2,511)
(0.44)
5.10
30 June 2022
(165)
(0.02)
1.80
30 June 2023
(11,155)
(1.15)
1.40
30 June 2024
(13,622)
(1.20)
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 is entitled
to receive remuneration of $210,000 per annum (based on 3.5 days per week service at a full-time equivalent
fee of $300,000 per annum).
Non-Executive Director Remuneration – Mr Nicholas Sage
The Company has entered into a consulting agreement with Pembury Nominees Pty Ltd (Pembury), a company
controlled by Mr Nicholas Sage, for the provision of non-executive director services. Mr Nicholas Sage is entitled
to receive remuneration of $36,000 per annum.
Non-Executive Director Remuneration – Mr Scott Meacock
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.
Directors’ Report
Annual Report 2024
18
Compensation of Key Management Personnel
Consolidated
Short-Term
Short-Term
Post-
Employment
Share-based
Payment
Total
Performance
Based
Comprising
Options
Year ended 30 June 2024
Salary & Fees
Performance
Incentive
Superannuation
Share Options (i)
$
$
$
$
$
%
%
Directors
A Sage
180,000
-
-
10,602
190,602
-
6%
M Hancock
210,000
-
-
98,314
308,314
-
32%
N Sage
36,000
-
-
-
36,000
-
-
S Meacock
32,432
-
3,568
-
36,000
-
-
Total
458,432
-
3,568
108,916
570,916
-
19%
(i) This amount refers to the share-based payment expense recorded in the statement of comprehensive income in the period in respect of options issued. The
recorded values of options will only be realised by the KMPs in the event the Company’s share price exceeds the option exercise price.
Consolidated
Short-Term
Short-Term
Post-
Employment
Share-based
Payment
Total
Performance
Based
Comprising
Options
Year ended 30 June 2023
Salary & Fees
Performance
Incentive
Superannuation
Share Options (i)
$
$
$
$
$
%
%
Directors
A Sage
180,000
-
-
32,576
212,576
-
15%
M Hancock
210,000
-
-
32,576
242,576
-
13%
N Sage
46,000
-
-
-
46,000
-
-
S Meacock (ii)
18,758
-
1,970
-
20,728
-
-
Other KMP
J Sinclair (iii)
134,564
50,000
-
-
184,564
27%
-
Total
589,322
50,000
1,970
65,152
706,444
7%
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.
Directors’ Report
Annual Report 2024
19
Shareholdings of Key Management Personnel
30 June 2024
Balance at
1 July 2023
Granted as
remuneration
Exercise of
options
Shares sold
Net change
other
Balance at
30 June 2024
Directors
A Sage(i)
30,173,010
-
-
-
-
30,173,010
M Hancock
5,000,000
-
-
-
-
5,000,000
N Sage
-
-
-
-
-
-
S Meacock (ii)
4,000,000
-
-
-
-
4,000,000
39,173,010
-
-
-
-
39,173,010
(i)
Indirectly held.
(ii)
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). These shares
are included in the opening balance shown.
30 June 2023
Balance at
1 July 2022
Granted as
remuneration
Exercise of
options
Shares sold
Net change
other
Balance at
30 June 2023
Directors
A Sage(i)
21,673,010
-
7,500,000
-
1,000,000
30,173,010
M Hancock
2,500,000
-
-
-
2,500,000
5,000,000
N Sage
-
-
-
-
-
-
S Meacock (ii)
-
-
-
-
4,000,000
4,000,000
Other KMP
J Sinclair
1,100,000
-
-
(100,000)
(1,000,000)
-
25,273,010
-
7,500,000
(100,000)
6,500,000
39,173,010
(i)
Indirectly held.
(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.
Directors’ Report
Annual Report 2024
20
Option and right holdings of Key Management Personnel
30 June 2024
Balance at 1 July
2023
Acquired
/granted
during year
Exercised
Expired/lapsed
during year
Net change
other
Balance at
30 June 2024
Exercisable
Not
Exercisable
Directors
A Sage
10,000,000
-
-
-
-
10,000,000
10,000,000
-
M Hancock
10,000,000
15,000,000(i)
-
-
-
25,000,000
25,000,000
-
N Sage
-
-
-
-
-
-
-
-
S Meacock
-
-
-
-
-
-
-
-
20,000,000
15,000,000
-
-
-
35,000,000
35,000,000
-
(i)
Unlisted options at an exercise price of $0.019 expiring 29 November 2025 (no vesting conditions) were issued following receipt of shareholder approval at
the Company’s AGM held 29 November 2023. 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.
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
Directors
A Sage
15,000,000
10,000,000 (i)
(7,500,000)
(7,500,000)
-
10,000,000
-
10,000,000
M Hancock
15,000,000
10,000,000 (i)
-
(15,000,000)
-
10,000,000
-
10,000,000
N Sage
-
-
-
-
-
-
-
-
S Meacock
-
-
-
-
-
-
-
Other KMP
J Sinclair
13,250,000
5,000,000 (ii)
-
(15,250,000)
(3,000,000)(iii)
-
-
-
43,250,000
25,000,000
(7,500,000)
(37,750,000)
(3,000,000)
20,000,000
-
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.
Directors’ Report
Annual Report 2024
21
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 2024, shareholder approval was received for the issue of 15,000,000 unlisted at
an exercise price of $0.019 each and an expiry date of 29 November 2025 (no vesting conditions) to Director Mr
Mark Hancock (or his nominee) (Director Options).
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
M Hancock
15,000,000
$0.019
29 November 2025
$0.0058
No unlisted options awarded to Director or other KMPs lapsed or expired during the year ended 30 June 2024.
Transactions with directors, director related entities and other related parties
During the year ended 30 June 2024, an aggregate amount of $29,562 (30 June 2023: $80,989) was paid or
payable to Cyclone Metals Ltd (Cyclone) for warehouse rental and IT costs. At 30 June 2024, $7,316 (plus
GST) was payable to Cyclone (30 June 2023: $36,731). Mr Antony Sage is a director of Cyclone.
During the year ended 30 June 2024, an aggregate amount of nil (30 June 2023: $1,000) was paid or payable to
European Lithium Ltd (European Lithium). At 30 June 2023, nil was payable to European Lithium (30 June
2023: nil). Mr Antony Sage is a director of European Lithium.
During the year ended 30 June 2024, an aggregate amount of $58,650 (30 June 2023: $107,275) was paid or
payable to Okewood Pty Ltd (Okewood) for office rent. At 30 June 2024, $4,750 (plus GST) was payable to
Okewood (30 June 2023: nil). Mr Antony Sage is a director of Okewood.
During the year ended 30 June 2024, an amount of $1,652,115 (30 June 2023: $654,578) was paid or payable
to Gold Valley Iron Ore Pty Ltd (a substantial shareholder of the Company) (GVIO) for royalty payments
($1,152,115) (reflecting the Group’s 60% share of the total royalty expenses up to date of completion of the
Restructure Transaction and 100% post completion) and payment of Cash Consideration pursuant to the
Restructure Transaction ($500,000). At 30 June 2024, $355,682 was payable to GVIO in respect of royalties,
and $1,210,000 was payable to GVIO in respect of the Cash Consideration payable under the Restructure
Transaction (30 June 2023: nil). Additionally, at 30 June 2024, $2,826,943 was payable to GVIO, offset by an
amount receivable of $2,475,650 from GVIO (net payable of $351,293) in respect of third party supplier cost
reimbursements arising in respect of shared shipment arrangements.
End of Remuneration Report
Directors’ Report
Annual Report 2024
22
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
27 September 2024
Liability limited by a scheme approved under Professional Standards Legislation
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
Stantons Is a member of the Russell
Bedford International network of firms
27 September 2024
Board of Directors
CuFe Limited
Unit 3, 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
2024, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
23
Corporate Governance Statement
Annual Report 2024
24
CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement for the year ended 30 June 2024 (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.
Consolidated Statement of Comprehensive Income
Annual Report 2024
25
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
Notes
Consolidated
Year ended
30 June 2024
Year ended
30 June 2023
$
$
Revenue from continuing operations
Revenue
3(a)
96,133,892
35,021,811
Cost of sales
3(d)
(99,778,163)
(40,221,450)
Gross profit/(loss)
(3,644,271)
(5,199,639)
Interest income
3(b)
71,509
47,585
Other income
3(c)
3,782,749
3,211,614
Employee benefits expense and director remuneration
3(e)
(1,030,487)
(834,818)
Exploration and evaluation expenditure
(909,051)
(1,013,699)
Finance costs
(502,715)
(406,377)
Legal costs
(135,185)
(77,544)
Share-based payment expense
22(a)
(171,623)
(114,428)
Amortisation and depreciation expense
(9,494,726)
(4,231,981)
Accounting and audit fees
(329,122)
(371,410)
Consultancy fees
(110,740)
(94,062)
Compliance costs
(134,993)
(178,606)
Share of net losses of joint venture accounted for
using the equity method
15
(304,454)
(589,625)
Other expenses
3(f)
(709,321)
(1,301,765)
(Loss) before income tax
(13,622,430)
(11,154,755)
Income tax expense
4
-
-
(Loss) after income tax
(13,622,430)
(11,154,755)
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss:
-
-
-
Other comprehensive income/(loss) for the year
-
Total comprehensive (loss) for the year
(13,622,430)
(11,154,755)
(Loss) per share attributable to ordinary equity
holders of the parent
-
basic (loss) for the year (cents per share)
5
(1.20)
(1.15)
-
diluted (loss) for the year (cents per share)
5
(1.20)
(1.15)
The accompanying notes form part of these financial statements.
Consolidated Statement of Financial Position
Annual Report 2024
26
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
Notes
Consolidated
30 June
2024
30 June
2023
$
$
ASSETS
Current Assets
Cash and cash equivalents
6
7,546,861
3,896,360
Restricted cash
7
360,000
360,000
Inventory
8
5,613,374
3,711,719
Trade and other receivables
9
6,655,486
3,040,933
Other assets
10
166,674
147,141
Financial asset
11
1,951,960
318,818
Total Current Assets
22,294,355
11,474,971
Non-Current Assets
Exploration and evaluation expenditure
12
9,038,292
9,184,992
Mine properties and development costs
13
-
1,793,658
Plant and equipment
14
15,087
22,628
Investments accounted for using the equity method
15
3,138,916
2,409,727
Total Non-Current Assets
12,192,295
13,411,005
TOTAL ASSETS
34,486,650
24,885,976
LIABILITIES
Current Liabilities
Trade and other payables
16
27,551,118
8,586,775
Interest-bearing borrowings
17
-
1,797,624
Provisions
18
1,424,558
131,208
Total Current Liabilities
28,975,676
10,515,607
Non-Current Liabilities
Provisions
18
-
566,189
Total Non-Current Liabilities
-
566,189
TOTAL LIABILITIES
28,975,676
11,081,796
NET ASSETS
5,510,974
13,804,180
EQUITY
Contributed equity
19
64,004,653
58,847,052
Accumulated losses
20
(63,025,996)
(49,403,566)
Reserves
21
4,532,317
4,360,694
TOTAL EQUITY
5,510,974
13,804,180
The accompanying notes form part of these financial statements.
Consolidated Statement of Changes in Equity
Annual Report 2024
27
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Consolidated
Contributed
equity
Accumulated
losses
Share-based
payments reserve
Other Reserve
Total
$
$
$
$
$
Balance at 1 July 2023
58,847,052
(49,403,566)
4,477,125
(116,431)
13,804,180
Loss for the year ended
30 June 2023
-
(13,622,430)
-
-
(13,622,430)
Other comprehensive income/(loss)
-
-
-
-
-
-
(13,622,430)
-
-
(13,622,430)
Transactions with owners in their capacity as owners:
Shares issued (Restructure Transaction)
2,100,000
-
-
-
2,100,000
Shares issued (Tenement acquisition)
510,000
-
-
-
510,000
Shares issued (Placement)
3,000,000
-
-
-
3,000,000
Shares issued (Other)
24,000
-
-
-
24,000
Costs of capital raising
(476,399)
-
-
-
(476,399)
Share-based payments (through profit or loss)
-
-
171,623
-
171,623
Balance at 30 June 2024
64,004,653
(63,025,996)
4,648,748
(116,431)
5,510,974
Consolidated
Contributed
equity
Accumulated
losses
Share-based
payments reserve
Other Reserve
Total
$
$
$
$
$
Balance at 1 July 2022
58,622,052
(38,248,811)
4,362,697
(116,431)
24,619,507
Loss for the year ended
30 June 2023
-
(11,154,755)
-
-
(11,154,755)
Other comprehensive income/(loss)
-
-
-
-
-
-
(11,154,755)
-
-
(11,154,755)
Transactions with owners in their capacity as owners:
Shares issued (Exercise of Options)
225,000
-
-
-
225,000
Share-based payments
-
-
114,428
-
114,428
Balance at 30 June 2023
58,847,052
(49,403,566)
4,477,125
(116,431)
13,804,180
The accompanying notes form part of these financial statements.
Consolidated Statement of Cash Flows
Annual Report 2024
28
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
Notes
Consolidated
Year ended
30 June 2024
Year ended
30 June 2023
$
$
Cash flows from operating activities
Receipts from customers
103,000,405
34,706,698
Payments to suppliers and employees
(96,774,186)
(40,865,823)
Interest received
54,807
47,585
Payments for exploration and evaluation costs
(796,334)
(1,422,556)
Payments of interest and other finance costs
(164,960)
(378,487)
Net cash flows from/(used in) operating activities
6(a)
5,319,732
(7,912,583)
Cash flows from investing activities
Receipts/(payments) from commodity collar/swaps
transactions closed
(1,164,467)
5,993,663
Purchase of exploration assets
(82,204)
(308,165)
Purchase of plant and equipment
-
(8,993)
Payments for capitalised mine development
(443,040)
(51,570)
Cash acquired on acquisition of control (Restructure
Transaction)
25(d)
214,046
-
Payment of Cash Consideration
16(c)
(500,000)
-
Payment of stamp duty (Restructure Transaction)
25(d)
(314,248)
-
Investment in joint venture
(638,654)
(1,107,470)
Transfer of funds from to security deposit
90,000
109,242
Transfer of funds to security deposit
(8,000)
-
Net cash flows (used in)/from investing activities
(2,846,567)
4,626,707
Cash flows from financing activities
Proceeds from shares issued (net of costs)
19
2,810,000
-
Proceeds from exercise of options
-
225,000
Proceeds from borrowings
21,176,689
17,244,660
Repayment of borrowings
(22,809,353)
(17,188,975)
Principal payments on lease liabilities
-
(292,359)
Net cash flows from/(used in) financing activities
1,177,336
(11,674)
Net increase/(decrease) in cash and cash equivalents
3,650,501
(3,297,550)
Cash and cash equivalents at beginning of year
3,896,360
7,193,910
Cash and cash equivalents at end of year
6
7,546,861
3,896,360
The accompanying notes form part of these financial statements.
Notes to the Consolidated Financial Statements
Annual Report 2024
29
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 2024 was authorised for
issue in accordance with a resolution of the directors on 27 September 2024.
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 MATERIAL 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 $13,622,430 for year ended 30 June 2024 (30:
June 2023: $11,154,755). At balance date, the Group had cash and cash equivalents of $7,546,861
(30 June 2023: $3,896,360) and a net working capital deficit of $7,041,321 (excluding restricted
cash) (30 June 2023: $599,364 surplus). During the year, the Group recorded net cash inflows from
operations of $5,319,732 (30 June 2023: net cash outflows $7,912,583), net cash outflows from
investing activities of $2,846,567 (30 June 2023: net cash inflows $4,626,707) and net cash inflows
from financing activities of $1,177,336 (30 June 2023: net cash outflows $11,674), resulting in net
increase in cash and cash equivalents of $3,650,501.
Additional funding may be necessary for the Group to continue its planned 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, West
Arunta 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 realisation of value in
relation to the JWD Project via the proposed sale of its mining rights (as announced 26 August 2024)
(refer subsequent events note for further details).
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.
Notes to the Consolidated Financial Statements
Annual Report 2024
30
(d)
New standards, interpretations and amendments adopted by the Group
Standards and Interpretations applicable to 30 June 2024
In the year ended 30 June 2024, 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
reporting periods beginning on or after 1 July 2023. As a result of this review, the Directors have
applied all new and amended Standards and Interpretations that were effective as at 1 July 2023
including:
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting
Policies and Definition of Accounting Estimates / AASB 2021-6 Amendments to Australian
Accounting Standards – Disclosure of Accounting Policies: Tier 2 and Other Australian
Accounting Standards
The Group has adopted AASB 2021-2 Amendments to Australian Accounting Standards with the date
of initial application being 1 January 2023.
The amendment is in relation to AASB 101 Presentation of Financial Statements and requires entities
to disclose their material accounting policy information rather than their significant accounting
policies and provides the following factors to assist an entity in determining if the accounting policy
information is material.
At 1 January 2023 it was determined that the adoption of AASB 2021-2 Amendments to Australian
Accounting Standards impacted the Company such that the Company only disclosed material
accounting policies, rather than significant accounting policies.
AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to
Assets and Liabilities arising from a Single Transaction
The Group has adopted AASB 2021-5 with the date of initial application being 1 January 2023.
This standard amends AASB 112 Income Taxes to clarify the accounting for deferred tax on
transactions that, at the time of the transaction, give rise to equal taxable and deductible temporary
differences. In specified circumstances, entities are exempt from recognising deferred tax when they
recognise assets or liabilities for the first time. The amendments clarify that the exemption does not
apply to transactions for which entities recognise both an asset and a liability and that give rise to
equal taxable and deductible temporary differences.
At 1 January 2023 it was determined that the adoption of AASB 2021-5 has no impact on the Group.
New accounting Standards and Interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory
for 30 June 2024 reporting periods and have not been early adopted by the Group. The Group’s
assessment of the impact of these new standards and interpretations has not identified any impact.
(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 2024. 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.
Notes to the Consolidated Financial Statements
Annual Report 2024
31
(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 2024.
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.
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:
Notes to the Consolidated Financial Statements
Annual Report 2024
32
•
Material and production costs directly attributable to the extraction, processing and
transportation of iron ore;
•
Production and transportation overheads; and
•
Depreciation of 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
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 plant and
equipment as described below.
Notes to the Consolidated Financial Statements
Annual Report 2024
33
(l)
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.
(m)
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).
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.
Notes to the Consolidated Financial Statements
Annual Report 2024
34
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.
(n)
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.
(o)
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.
Notes to the Consolidated Financial Statements
Annual Report 2024
35
(p)
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.
(q)
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.
(r)
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
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).
(s)
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
Notes to the Consolidated Financial Statements
Annual Report 2024
36
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.
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.
(t)
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.
(u)
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.
Notes to the Consolidated Financial Statements
Annual Report 2024
37
(v)
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.
(w)
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 up until the Group assuming 100% ownership) and a joint venture (with respect to the Yarram
Iron JV).
(i)
Joint operation
A joint operation is a type of joint arrangement in which the parties with joint control of the
arrangement have rights to the assets and obligations for the liabilities in relation to the
arrangement.
The Group recognises in relation to its joint operations:
▪
Assets, including its share of any assets held jointly
▪
Liabilities, including its share of any liabilities held jointly
▪
Revenue from the sale of its share of the output arising from the joint operation
▪
Share of the revenue from the sale of the output by the joint operation
▪
Expenses, including its share of any expenses incurred jointly
These amounts have been incorporated in the financial statements under the appropriate
classifications.
Up until up until completion of the Restructure Transaction on 1 September 2023, CUF has accounted
for the Wiluna Iron JV as a joint operation, and has taken up its 60% share of assets, liabilities and
results of the Wiluna Iron JV in the Group’s consolidated financial statements.
(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.
Notes to the Consolidated Financial Statements
Annual Report 2024
38
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.
(x)
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.
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.
(y)
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.
(z)
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.
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
Notes to the Consolidated Financial Statements
Annual Report 2024
39
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 22.
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, up until 1 September 2023 (completion of the Restructure
Transaction), CUF’s wholly owned subsidiary Wiluna Fe Pty Ltd (then 60% interest) and Gold Valley
Iron Ore Pty Ltd (then 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.
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
Notes to the Consolidated Financial Statements
Annual Report 2024
40
reserve or resource estimates may impact upon the carrying value of exploration and evaluation
assets, mine properties, 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.
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
2024
2023
$
$
(a)
Revenue from continuing operations
Iron ore sales
96,133,892
35,021,811
(b)
Interest income
Bank Interest
71,509
47,585
(c)
Other income
Marketing fee income
540,446
-
Gain on disposal of Tennant Creek project interest (refer
note 25(d)(iii))
1,486,096
-
Realised gain on commodity collar/swap contracts
71,249
6,184,540
Unrealised (loss)/gain on financial asset – commodity
collar/swap contracts (FVPL)
1,807,562
(3,237,062)
Unrealised gain on financial asset – foreign currency
contracts (FVPL)
(82,201)
82,201
Management fee income (JV)
8,000
48,000
Rental recharges income
18,718
22,648
Recoverable of receivable
-
42,674
Fair value gain/(loss) on financial asset through profit and
loss (refer note 11)
(67,121)
68,613
3,782,749
3,211,614
(d)
Cost of sales
Royalty expense
(9,740,639)
(3,604,386)
Mining and processing
(29,618,333)
(11,020,493)
Haulage
(46,126,372)
(18,399,076)
Sales commission
(1,979,579)
(827,169)
Port and demurrage
(7,454,661)
(3,343,896)
Salaries, wages and other employee benefits
(886,041)
(499,705)
Inventory movement
(669,730)
(1,441,390)
Inventory impairment (write down to NRV)
(722,851)
-
Other operating costs
(2,579,957)
(1,085,335)
(99,778,163)
(40,221,450)
(e)
Employment benefits and director remuneration
Directors’ fees
(462,000)
(456,727)
Salaries, wages and other employee benefits
(504,672)
(341,351)
Payroll Tax
(63,815)
(36,740)
(1,030,487)
(834,818)
Notes to the Consolidated Financial Statements
Annual Report 2024
41
2024
2023
$
$
(f)
Other expenses
Promotional and investor relations
(80,800)
(63,250)
Occupancy costs
(58,650)
(73,325)
Insurance costs
(103,755)
(113,655)
Stamp Duty
(950)
-
Doubtful debts expense
-
(43,534)
Other
(465,166)
(1,008,001)
(709,321)
(1,301,765)
4
INCOME TAX
2024
2023
$
$
(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
-
-
2024
2023
$
$
(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
(13,622,430)
(11,154,755)
Tax at the statutory income tax rate of 25% (2023: 25%)
(3,405,608)
(2,788,688)
Tax effect on impairment losses
-
10,883
Tax effect on non-temporary differences
43,180
34,837
Unrecognised tax losses and temporary differences
3,362,428
2,742,968
Utilised tax losses
-
-
Income tax expense reported in statement of comprehensive income
-
-
(c) Deferred tax liabilities
Accrued interest income
(4,176)
-
Employee leave provision
(124)
(39)
Accrued interest expense
(918)
(525)
Gain/loss on financial assets
-
(15,402)
(5,218)
(15,966)
Less: offset by deferred tax asset
5,218
15,966
Deferred tax liabilities
-
-
2024
2023
$
$
(d) Deferred tax assets
Accrued expenditure
1,875
4,375
Provision for rehabilitation
235,438
103,899
Provision for demobilisation
120,702
70,450
Gain/loss on financial assets
1,378
-
Tax losses
9,089,146
5,723,375
9,448,539
5,902,099
Less: offset against deferred tax liabilities
(5,218)
(15,966)
Deferred tax assets not recognised
9,443,321
5,886,133
The Group has formed a tax consolidated group.
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
Notes to the Consolidated Financial Statements
Annual Report 2024
42
taxes levied by the same tax authority. The Group has tax losses which arose in Australia of $9,089,146
(tax effected) (2023: $5,723,375 (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) (2023: $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
2024
2023
Cents
Cents
Basic loss per share
Continuing operations
(1.20)
(1.15)
(1.20)
(1.15)
Diluted loss per share
Continuing operations
(1.20)
(1.15)
(1.20)
(1.15)
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 2024 and 30 June 2023 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:
2024
2023
$
$
Loss used in calculation of basic and diluted loss per share
Continuing operations
(13,622,430)
(11,154,755)
(13,622,430)
(11,154,755)
2024
2023
No.
No.
Weighted average number of ordinary shares for basic
earnings/(loss) per share
1,135,846,612
965,968,134
Effect of dilution:
Unlisted options
-
-
Adjusted weighted average number of ordinary shares for diluted
earnings/(loss) per share
1,135,846,612
965,968,134
The unlisted options outstanding at 30 June 2024 and 30 June 2023 were found to have an anti-dilutive
effect on the calculation. At 30 June 2024 and 30 June 2023, the basic earnings/(loss) per share is equal to
the diluted earnings/(loss) per share.
Notes to the Consolidated Financial Statements
Annual Report 2024
43
6
CASH AND CASH EQUIVALENTS
2024
2023
$
$
Cash and cash equivalents
Cash at bank and on hand
7,546,861
3,896,360
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
2024
2023
$
$
Net loss for the year
(13,622,430)
(11,154,755)
Adjustments for:
Depreciation
7,541
9,265
Amortisation
9,487,185
4,222,716
Inventory NRV adjustment
722,851
-
Share-based payment expense
171,623
114,428
Share of net losses of joint venture accounted for using equity method
304,454
589,625
Realised gain on financial asset – commodity collar/swap contracts
(FVPL)
-
(5,993,663)
Unrealised gain/loss on financial asset – commodity collar/swap
contracts (FVPL)
(1,807,562)
3,237,062
Unrealised gain on financial asset – foreign currency contracts (FVPL)
82,201
(82,201)
Recovery of receivable
-
(42,674)
Doubtful debts expense
-
43,534
Accrued interest income
(16,702)
-
Expenses (settled via share issue)
24,000
-
Gain on disposal of Tennant Creek project interest (refer note 25(d)(iii))
(1,486,096)
-
Fair value gain/loss on financial asset through profit and loss
67,121
(68,613)
7,556,616
2,029,479
Changes in assets and liabilities
(Increase) / decrease in trade and other receivables
(2,610,579)
2,168,991
(Increase) / decrease in prepayments
(4,519)
30,344
(Increase) / decrease in inventory
(949,896)
856,449
Increase / (decrease) in trade and other payables
15,167,216
(1,599,577)
Increase / (decrease) in employee provisions
(216,676)
(243,514)
Increase / (decrease) in tax payable
-
-
11,385,546
1,212,693
Net cash flow from / (used in) operating activities
5,319,732
(7,912,583)
(b) Non-cash investing and financing activities
Year ended 30 June 2024
CUF issued 30,000,000 shares as consideration to acquire of West Arunta (E80/5925) and Tambourah
(P45/3061) exploration tenure, representing a non-cash investing activity payment of $510,000. Refer
note 12(b) for further details.
CUF issued 150,000,000 shares pursuant to the Restructure Transaction, representing a non-cash
investing activity payment of $2,100,000. Refer note 25(d)(i) for further details.
CUF has proposed to issue 50,000,000 options to the joint lead managers in connection with the $3m
placement completed during the year, representing a non-cash financing cost of $286,399 (this expense
recognised as a cost of capital raising).
Year ended 30 June 2023
There were no non-cash investing and financing activities during the year ended 30 June 2023.
Notes to the Consolidated Financial Statements
Annual Report 2024
44
7
RESTRICTED CASH
2024
2023
$
$
Restricted cash
360,000
360,000
8
INVENTORY
2024
2023
$
$
Diesel fuel
133,155
70,843
Work in Progress Run of Mine
2,818,692
1,596,696
Finished Goods Site
2,264,995
176,696
Finished Goods Port
396,532
1,867,484
5,613,374
3,711,719
9
TRADE AND OTHER RECEIVABLES
2024
2023
$
$
Current
Trade receivables
5,502,453
373,129
Net GST receivable
912,169
956,879
Deposits
37,657
29,657
Other advance – Wiluna Iron Joint Operation (a)
-
1,097,513
Other advance – Yarram Joint Venture (b)
-
431,591
Other receivables (c)
203,207
152,164
6,655,486
3,040,933
(a) At 30 June 2023, there was an amount receivable in respect of the Wiluna Iron Joint Operation,
being an advance of $1,097,513. Until 1 September 2023, the Wiluna Iron JV was 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 year.
(b) As previously disclosed in the FY23 annual report, the Company’s 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 25, 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.
The ’other advance’ amount has been applied to the Next Carry obligation during the year ended 30
June 2024.
(c) 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.
(d) None of the receivables are past due and/or impaired.
Notes to the Consolidated Financial Statements
Annual Report 2024
45
10 OTHER ASSETS
2024
2023
$
$
Prepaid expenses
166,674
147,141
11 FINANCIAL ASSET
2024
2023
$
$
Fair value through profit or loss (FVTPL) – equity investment (a)
82,037
149,158
Fair value through profit or loss (FVTPL) – commodity collars/swaps
1,869,923
87,459
Fair value through profit or loss (FVTPL) – foreign currency contracts
-
82,201
1,951,960
318,818
(a) Movements
Balance at beginning of year
149,158
80,545
Purchase of equity investment
-
-
FVTPL
(67,121)
68,613
Balance at end of the year
82,037
149,158
12 EXPLORATION ASSETS
2024
2023
$
$
Acquisition Cost –Tennant Creek
8,127,948
8,866,852
Acquisition Cost – North Dam
383,530
318,140
Acquisition Cost – West Arunta
395,110
-
Acquisition Cost – Tambourah
131,704
-
9,038,292
9,184,992
Movements in exploration assets
Carrying value at beginning of period
9,184,992
8,866,852
Consideration in cash (North Dam Project) (a)
50,000
300,000
Other acquisition costs (North Dam Project) (a)
15,390
18,140
Consideration in shares (West Arunta) (b)
382,500
-
Other acquisition costs (West Arunta) (b)
12,610
-
Consideration in shares (Tambourah) (b)
127,500
-
Other acquisition costs (Tambourah) (b)
4,204
-
Adjustment upon transfer of 5% of interest in project (Restructure
Transaction) (c)
(738,904)
-
Balance at end of period
9,038,292
9,184,992
(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.
On 20 December 2023, the Company announced it had reached an agreement to purchase
MLN15/1841, thus expanding its North Dam Project area. The MLN sits in a highly prospective
trend and within a drill target area that CuFe intends to drill and explore. It has been mined
through shallow surface workings for precious gems including tourmaline and beryl. The
transaction involves a purchase price of $50,000 and a 1% sales royalty on material sourced from
the lease. Completion occurred in March 2024.
Notes to the Consolidated Financial Statements
Annual Report 2024
46
(b) 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, with a fair value of $510,000 (of
which $382,500 has been allocated to E80/5925 and $127,500 to P45/3061). The tenement
acquisition was completed on 7 August 2023.
(c) Restructure Transaction (Tennant Creek impact)
As part of the Restructure Transaction detailed at note 25, CUF’s interest in the Tennant Creek
Project has decreased from 60% to 55% on 1 September 2023.
13 MINE PROPERTIES AND DEVELOPMENT COSTS
2024
2023
$
$
Mine properties and development - Wiluna Iron Project (a)
-
1,793,658
Movements
Carrying value at beginning of year
1,793,658
5,331,936
Consideration shares (Restructure Transaction) (b)
2,100,000
-
Costs associated with acquiring controlling interest (b)
202,781
-
Arising on acquisition of controlling interest (allocated) (b)
1,414,736
-
Balance brought to account upon change of control (b)
634,584
-
Exercise of right to mine additional 900,000mt (c)
2,225,000
-
Stamp duty cost arising on exercise of right to mine additional
900,000mt (c)
111,467
-
Expenditure incurred
1,004,959
355,483
Amortisation
(9,487,185)
(3,893,761)
Closing value at end of year
-
1,793,658
(a)
As part of the Restructure Transaction detailed at note 25, CUF increased its interest in the iron ore
rights over the JWD iron ore mine from 60% to 100% on 1 September 2023.
(b)
Refer note 25(d)(i).
(c)
Refer note 25(d)(ii).
(d)
Costs incurred in respect of the development of the JWD Iron Ore Project have been capitalised.
14 PLANT AND EQUIPMENT
2024
2023
$
$
Gross carrying value at cost
46,536
46,536
Accumulated depreciation
(31,449)
(23,908)
15,087
22,628
Movements in plant and equipment
Carrying value at beginning of year
22,628
26,242
Additions
-
5,651
Depreciation charge for the period
(7,541)
(9,265)
Carrying value at end of year
15,087
22,628
Notes to the Consolidated Financial Statements
Annual Report 2024
47
15 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
(a) Reconciliation of carrying amount of investments accounted for using the equity method
2024
2023
$
$
Investments accounted for using the equity method –
Yarram Iron JV
3,138,916
2,409,727
Movement in Investment
Balance at beginning of period
2,409,727
2,999,352
Cost of investment (Next Carry amount - refer 25(d)(iv))
500,000
-
Cost of investment
533,643
-
Share of profit/(loss) of joint venture
(304,454)
(589,625)
Balance at end of period
3,138,916
2,409,727
The Company holds a 50% interest in the Yarram iron ore project (Yarram Iron JV) located in
the Northern Territory. CUF (via its wholly owned subsidiary Yarram FE Pty Ltd (Yarram FE))
holds a 50% share in Gold Valley Iron and Manganese Pty Ltd (GVIM), being the entity which
owns the Yarram Iron Ore Rights.
(b) 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:
2024
2023
$
$
ASSETS
Current Assets
Trade and other receivables
-
455
Other assets
56,464
36,070
Total Current Assets
56,464
36,525
TOTAL ASSETS
56,464
36,525
LIABILITIES
Current Liabilities
Trade and other payables
697
439,137
Total Current Liabilities
697
439,137
TOTAL LIABILITIES
697
439,137
NET ASSETS/(LIABILITIES)
55,767
(402,612)
16 TRADE AND OTHER PAYABLES
2024
2023
$
$
Trade payables (a)
20,293,920
5,935,523
Unissued options (b)
286,399
-
Employee related liabilities
153,521
158,874
JWD Cash Contribution refundable to Gold Valley Group (c)
1,210,000
-
Other payables and accruals (d)
5,607,278
2,492,378
27,551,118
8,586,775
(a) Trade payables are non-interest bearing and are normally settled on 30-day terms. At 30 June
2024, $12,469,426 of trade payables were due and payable, of which $9,469,127 was settled in
July 2024 upon receipt of sale proceeds. Trade payables of Wiluna Fe Pty Ltd at 30 June 2024
amounted to $19,932,185, representing the majority of the total trade payables.
(b) Copeak Pty Ltd (Peak) and Evolution Capital Pty Ltd (Evolution) were engaged as corporate
advisors and joint lead manager (JLM) to provide services in connection with the Placement.
Notes to the Consolidated Financial Statements
Annual Report 2024
48
Pursuant to the terms of their engagement, the JLM were entitled to receive 50,000,000 options on
same terms as the Placement Options (Lead Manager Options), subject to receipt of shareholder
approval. As at 30 June 2024, shareholder approval had not been received, and accordingly the
value of the proposed options (determined using a Black & Scholes valuation as detailed at note
22(i)) has been reflected as a liability at balance date. Shareholder approval was received at the
general meeting held 23 July 2024 (subsequent to year end), upon which date the liability amount
has been transferred to the share-based payment reserve.
(c) Upon completion of the Restructure Transaction, the amount payable to GVG was $1,710,000 (refer
note 25(d)(i)). The cash contribution is payable via monthly instalments following Completion of
the Restructure Transaction. 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 $1,710,000. An amount
of $500,000 has been settled during the year ended 30 June 2024.
(d) Other payables are non-interest bearing and have varying terms.
17 INTEREST-BEARING BORROWINGS
2024
2023
$
$
USD Loan – Principal (a)
-
1,793,950
USD Loan – Interest (a)
-
3,674
-
1,797,624
Movements in borrowings
Balance at beginning of year
1,797,624
1,304,510
Receipt of loan funds
21,176,689
17,292,509
Interest accrued
161,286
346,647
Repayment of principal loan
(22,809,354)
(17,188,975)
Payment of interest
(161,286)
(346,647)
FX revaluation
(164,959)
389,580
Balance at end of year
-
1,797,624
(a) Stock Finance Facility
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 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).
The Stock Finance Facility has been utilised during the year ended 30 June 2024, with all drawn
amounts repaid at 30 June 2024.
Loan Facility
As announced 20 January 2023, to assist in funding the working capital associated with the JWD
operation, 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 remained
USD$600,000 (A$903,787 equivalent) plus interest (A$3,674) owing under the Loan Facility. The
Loan Facility was repaid in full during the year ended 30 June 2024.
Notes to the Consolidated Financial Statements
Annual Report 2024
49
18 PROVISIONS
2024
2023
$
$
Current
Provision for rehabilitation – JWD Project (a)
941,750
-
Provision for demobilisation – JWD Project
482,808
131,208
1,424,558
131,208
Non-current
Provision for rehabilitation – JWD Project (a)
-
415,596
Provision for demobilisation – JWD Project
-
150,593
-
566,189
Total
1,424,558
697,397
(a) 30 June 2024
The provision for rehabilitation at 30 June 2024 of $941,750 relates to the Wiluna Iron Project and
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
$1,741,750), less $800,000 (project to date) which has been prepaid pursuant to an agreement.
30 June 2023
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 Ore Project (then accounted for as a joint operation in accordance with the Group’s
accounting policy). The provision for rehabilitation of $692,660 of Wiluna Iron Ore Project 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.
19 CONTRIBUTED EQUITY
2024
2023
$
$
Ordinary shares
Issued and fully paid
64,004,653
58,847,052
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
2024
2024
2023
2023
No. of shares
$
No. of shares
$
Movements in ordinary shares on issue
Balance at beginning of year
966,112,365
58,847,052
958,612,365
58,622,052
Shares issued – consideration (West
Arunta and Tambourah) (refer note 12(b))
30,000,000
510,000
-
-
Shares issued - consideration (Restructure
Transaction) (refer note 25(d)(i))
150,000,000
2,100,000
-
-
Shares issued – Placement (a)
187,500,000
3,000,000
-
-
Shares issued – settlement of supplier
invoice
1,500,000
24,000
-
-
Shares issued – exercise of options
-
-
7,500,000
225,000
Share issue costs – unissued options
proposed to be issued to Lead Manager to
Placement (b)
-
(286,399)
-
-
Share issue costs – cash
-
(190,000)
-
-
Balance at end of year
1,335,112,365
64,004,653
966,112,365
58,847,052
(a) On 20 May 2024, the Company announced that it had received commitments to raise $3,000,000
through a placement of 187,500,000 ordinary shares (Placement Shares) to professional and
sophisticated investors at an issue price of $0.016 per share (Placement). For every two (2)
Notes to the Consolidated Financial Statements
Annual Report 2024
50
Placement Shares subscribed for, investors were entitled to receive one (1) free-attaching option at
an exercise price of $0.025 expiring 13 June 2027 (Placement Options).
The Placement Shares were issued on 24 May 2024. The 93,750,000 Placement Options were
issued on 13 June 2024 and were quoted on 17 June 2024 (ASX: CUFO).
(b) Refer note 16(b).
Other Securities on Issue
2024
2023
No.
No.
Options over ordinary shares
Unlisted options
131,750,000
120,750,000
Listed options (ASX:CUFO)
93,750,000
70,000,000
225,500,000
190,750,000
Movements in options on issue
Balance at
1 July 2023
Granted
Exercised
Expired/
lapsed
Balance at
30 June
2024
No.
No.
No.
No.
No.
Share-based payments (refer note
22):
Unlisted options at $0.040 expiring
31/08/2023
3,000,000
-
-
(3,000,000)
-
Unlisted options at $0.035 expiring
12/10/2023
5,000,000
-
-
(5,000,000)
-
Unlisted options at $0.045 expiring
12/04/2024
5,000,000
-
-
(5,000,000)
-
Unlisted options at $0.060 expiring
12/10/2024
5,000,000
-
-
-
5,000,000
Unlisted options at $0.10 expiring
09/12/2024
75,000,000
-
-
-
75,000,000
Unlisted options at $0.027 expiring
07/09/2024
27,750,000
-
-
-
27,750,000
Unlisted options at $0.020 expiring
07/08/2025
-
13,000,000
-
(4,000,000)
9,000,000
Unlisted options at $0.019 expiring
29/11/2025
-
15,000,000
-
-
15,000,000
Listed options at $0.06 expiring
24/11/2023
20,000,000
-
-
(20,000,000)
-
140,750,000
28,000,000
-
(37,000,000)
131,750,000
Free-attaching options:
Listed options at $0.06 expiring
24/11/2023
50,000,000
-
-
(50,000,000)
-
Listed options at $0.025 expiring
13/06/2027
-
93,750,000
-
-
93,750,000
50,000,000
93,750,000
-
(50,000,000)
93,750,000
TOTAL
190,750,000
121,750,000
-
(87,000,000)
225,500,000
Notes to the Consolidated Financial Statements
Annual Report 2024
51
20 ACCUMULATED LOSSES
2024
2023
$
$
Accumulated losses
(63,025,996)
(49,403,566)
Movements in accumulated losses
Balance at beginning of year
(49,403,566)
(38,248,811)
Loss for the year
(13,622,430)
(11,154,755)
Balance at end of year
(63,025,996)
(49,403,566)
21 RESERVES
2024
2023
$
$
Share-based payments reserve (a)
4,648,748
4,477,125
Other equity reserve
(116,431)
(116,431)
4,532,317
4,360,694
(a) Movements in Share-based payments reserve
Balance at beginning of year
4,477,125
4,362,697
Share-based payments made during the year (refer note 22)
171,623
114,428
Balance at end of year
4,648,748
4,477,125
Nature and purpose of reserve
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).
22 SHARE-BASED PAYMENTS
Share-based payment transactions recognised during the year were as follows:
2024
2023
$
$
(a) Share-based payments expensed through profit and loss:
Options(i)
171,623
114,428
(b) Share-based payments included in statement of financial position:
Share based payments - shares (capitalised mine development) (ii)
2,100,000
-
Share-based payments - shares (exploration assets) (iii)
510,000
-
2,610,000
-
Sub-total share-based payments – Options
171,623
114,428
Sub-total share-based payments – Shares
2,610,000
-
Total share-based payments
2,781,623
114,428
(i) During the year, the Company issued the following options:
▪ 13,000,000 unlisted options exercisable at $0.02 expiring 7 August 2025 with vesting
conditions issued pursuant to the Company’s Employee Securities Incentive Plan (ESIP)
(ESIP Options); and
▪ 15,000,000 unlisted options exercisable at $0.019 and expiring 29 November 2025 were
issued to Director Mr Mark Hancock (or his nominee) following receipt of shareholder
approval at the AGM (Director Options).
(ii) The Company issued 150,000,000 Shares valued at $2,100,000 pursuant to the Restructure
Transaction (being the Consideration Shares). Refer note 25(a).
(iii) The Company issued 30,000,000 Shares valued at $510,000 as consideration for the acquisition of
West Arunta and Tambourah tenure. Refer note 12.
Notes to the Consolidated Financial Statements
Annual Report 2024
52
(d) Fair value of options issued or granted
The fair value of unlisted options issued or granted during the period has been determined using a
Black-Scholes option pricing model. The following table lists the inputs to the model:
ESIP Options
Director Options
Expiry date
7 August 2025
29 November 2025
Valuation date
7 August 2023
29 November 2023
Dividend yield (%)
Nil
Nil
Expected volatility (%)
100%
100%
Risk free interest rate (%)
3.90%
4.25%
Exercise price ($)
$0.020
$0.019
Discount (%)
Nil
Nil
Expected life of options (years)
2.0
2.0
Share price at grant date ($)
$0.014
$0.013
Value per option ($)
$0.0064
$0.0058
(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:
2024
No.
2024
WAEP
2023
No.
2023
WAEP
Outstanding at the beginning of the year
140,750,000
$0.073
168,500,000
$0.071
Options granted
28,000,000
$0.019
34,250,000
$0.027
Options exercised
-
-
(7,500,000)
$0.030
Options expired
(37,000,000)
$0.049
(54,500,000)
$0.042
Outstanding at the end of the year
131,750,000
$0.068
140,750,000
$0.073
Exercisable at the end of the year
122,750,000
$0.072
110,000,000
$0.085
Not exercisable at the end of the year
9,000,000
$0.020
30,750,000
$0.028
(f) Weighted average remaining contractual life
The weighted average remaining contractual life for the options outstanding as at 30 June 2024 is 0.54
years (2023: 1.15 years).
(g) Fair value
The fair value of options granted during the year ended 30 June 2024 was $0.0061 (30 June 2023:
$0.0058).
(h) Options expired or lapsed
The following options (relating to share based payments) lapsed or expired during the year:
▪
3,000,000 unlisted options exercisable at $0.04 expired on 31 August 2023;
▪
5,000,000 unlisted options exercisable at $0.035 expired on 12 October 2023;
▪
20,000,000 listed options (ASX:CUFO) exercisable at $0.06 expired on 24 November 2023;
▪
4,000,000 unlisted options exercisable at $0.02 with an expiring 7 August 2025 lapsed; and
▪
5,000,000 unlisted options exercisable at $0.045 expired on 12 April 2024.
Notes to the Consolidated Financial Statements
Annual Report 2024
53
(i) Unissued options
During the year, the Company agreed to issue 50,000,000 unlisted options exercisable at $0.025 and
expiring 13 June 2027 to the Joint Lead Managers (JLM) in connection with the Placement (JLM Options),
subject to receipt of shareholder approval. The JLM Options were issued on 23 July 2024 following receipt
of shareholder approval. As the options remained subject to shareholder approval at balance date, the
Company has recognised a liability (refer note 16(b)) in respect of the value of unissued options
(determined using a Black-Scholes option pricing model). The following table lists the inputs to the model:
JLM Options
Valuation date
30 June 2024
Expiry date
13 June 2027
Dividend yield (%)
Nil
Expected volatility (%)
100%
Risk free interest rate (%)
3.94%
Exercise price ($)
$0.025
Discount (%)
Nil
Expected life of options (years)
3.0
Share price at grant date ($)
$0.012
Value per option ($)
$0.0057
23 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.
24 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 $4,977,330 at 30 June 2024
(30 June 2023: $13,804,180). 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 and borrowings.
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.
Notes to the Consolidated Financial Statements
Annual Report 2024
54
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 2024, 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:
2024
2023
$
$
Financial assets
Cash and cash equivalents
1,599
515,029
Trade and other receivables
1,385,466
205,577
Financial liabilities
Trade and other payables
(2,769,661)
-
Interest-bearing loans and borrowings
-
(1,797,624)
Net asset / (liability)
(1,382,596)
(1,077,018)
The net liability exposure in USD at balance date is USD$922,128 (30 June 2023: net liability exposure
USD$715,003).
During the year, the Group entered into foreign currency forward contracts to manage its exposure to
fluctuations in USD. At balance date, there were no open contracts.
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 a net realised gain of
$71,249 being recognised in the year ended 30 June 2024 (closed positions).
At balance date, a series of contracts remained open (settlement dates between July to December 2024)
with a fair value of $1,869,923. 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 2024.
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.
Notes to the Consolidated Financial Statements
Annual Report 2024
55
At balance date, the Group’s maximum exposure to interest rate risks on financial assets and financial
liabilities was as follows:
30 June 2024
Range of
effective
interest
rates
Carrying
amount
Variable
interest
rate
Fixed
interest
rate
Total
%
$
$
$
$
Financial assets
Cash and cash equivalents
0 – 1.5%
7,546,861
7,546,861
-
7,546,861
Restricted cash (term deposits)
4.75%
360,000
-
360,000
360,000
Financial liabilities
Loans and borrowings
12%
-
-
-
-
7,906,861
7,546,861
360,000
7,906,861
30 June 2023
Financial assets
Cash and cash equivalents
0 – 0.16%
3,896,360
3,896,360
-
3,896,360
Restricted cash (term deposits)
0.25%
360,000
-
360,000
360,000
Financial liabilities
Loans and borrowings
12%
(1,793,950)
-
(1,793,950)
(1,793,950)
2,462,410
3,896,360
(1,433,950)
2,462,410
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:
Profit/(loss)
(Higher)/Lower
Equity
Higher/(Lower)
2024
$
2023
$
2024
$
2023
$
+0.25% (25 basis points)
18,867
9,741
-
-
-0.25% (25 basis points)
(18,867)
(9,741)
-
-
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.
Notes to the Consolidated Financial Statements
Annual Report 2024
56
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will
encounter difficulty in meeting its financial obligations as they fall due. The Group’s objective is to ensure
that it will always have sufficient liquidity to meet its liabilities through ensuring it has sufficient cash
reserves to meet its ongoing working capital and long-term operational and strategic objectives. The Group
manages liquidity risk by maintaining adequate borrowing facilities and monitoring forecast and actual cash
flows on an ongoing basis.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the
remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows:
Less than
6 months
6-12
months
1-5
years
Over 5
years
Total
contractual
cash flows
Carrying
amount of
liabilities
$
$
$
$
$
$
30 June 2024
Trade and other payables
20,293,920
-
-
-
20,293,920
20,293,920
Cash Consideration payable
to Gold Valley Group
1,210,000
-
-
-
1,210,000
1,210,000
21,503,920
-
-
-
21,503,920
21,503,920
30 June 2023
Trade and other payables
5,935,522
-
-
-
5,935,522
5,935,522
Loans and borrowings
1,797,624
-
-
-
1,797,624
1,797,624
7,733,146
-
-
-
7,733,146
7,733,146
Fair value estimation
All financial instruments for which fair value is recognised or disclosed are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that is not based on observable market data (unobservable inputs).
Carrying
Fair Value
Amount
Level 1
Level 2
Level 3
$
$
$
$
30 June 2024
Equity investment
82,037
82,037
-
-
Commodity collars/swaps
1,869,923
-
1,869,923
-
Foreign currency forward contracts
-
-
-
-
1,951,960
82,037
1,869,923
-
30 June 2023
Equity investment
149,158
149,158
-
-
Commodity collars/swaps
87,459
-
87,459
-
Foreign currency forward contracts
82,201
-
82,201
-
318,818
149,158
169,660
-
Notes to the Consolidated Financial Statements
Annual Report 2024
57
25 RESTRUCTURE TRANSACTION
(a) Summary of Restructure Transaction
On 22 February 2023, the Company announced that it had 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 150,000,000 CUF shares (Consideration Shares) and refunding the historical
GVG cash contributions (being $1.71m (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 $2,225,000 to be settled via transfer of 5% of its joint venture
interest in the Tennant Creek Copper Project; and
▪
Yarram milestone payment of $1,500,000 re-structured such that:
o
the Company has agreed to carry the next $500,000 of GVG’s joint venture costs
contribution under the Yarram Joint Venture (Next Carry); and
o
the $1,000,000 payable to GVG in cash or shares at the Company’s election is deferred
until a decision to mine is made rather than on announcement of indicated resource
(Yarram Contingent Liability).
Refer to ASX Announcements dated 22 February 2023, 11 May 2023 and 4 September 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.
(b) Completion date
Completion of the Restructure Transaction settled on 1 September 2023 (Completion).
(c) Project interests following Completion
Upon completion, the Company now holds:
▪
100% interest in the JWD iron ore mine;
▪
55% interest in the Tennant Creek project; and
▪
50% interest in the Yarram Iron Ore Project.
Notes to the Consolidated Financial Statements
Annual Report 2024
58
(d) Accounting for various components of the Restructure Transaction
(i) JWD Project (interest increases from 60% to 100%)
Prior to Completion, the Company’s 60% interest in the JWD iron ore mine was accounted for as a Joint
Operation (being the Wiluna Iron Joint Venture). Upon Completion, the Company’s interest moved to
100% and forms part of the consolidated Group.
Consideration paid for the additional 40% interest is as follows:
1 September
2023
$
Shares1
2,100,000
Costs (stamp duty)
202,781
Repayment of Cash Consideration (refer note 16(c))
1,710,000
Total
4,012,781
1Being 150,000,000 shares valued at $2,100,000 based on a share price of $0.014 per shares (being
the share price on 24 July 2023; the date shareholder approval was received to proceed with the share
issue; the substantive condition to Completion).
Assets and liabilities acquired at Completion:
1 September
2023
1 September
2023
1 September
2023
$
$
$
100%
60%
40%^
Cash and cash equivalents
535,116
321,070
214,046
Trade and other receivables
765,017
459,010
306,007
Inventory
4,186,525
2,511,915
1,674,610
Other assets
37,537
22,522
15,015
Mine properties & development costs
1,586,461
951,877
634,584
Trade and other payables
(5,210,167)
(3,126,100)
(2,084,067)
Provision for rehabilitation
(692,660)
(415,596)
(277,064)
Provision for demobilisation
(469,668)
(281,801)
(187,867)
Net Assets
738,161
442,897
295,264
Acquisition of control (allocated to mine
properties & development costs) (refer note
13):
- Shares
2,100,000
- Costs (stamp duty)
202,781
- Arising on acquisition of controlling interest
1,414,736
Total
3,717,517
^ Balance brought to account upon change of control.
(ii) JWD Project (Exercise of right to mine additional 900,000mt)
Upon Completion, CUF as the 100% interest owner exercised the option to access a further 900,000mt
of iron ore at the JWD resource, with the original exercise price of $2,225,000 to be settled via transfer
of 5% of its joint venture interest in the Tennant Creek Copper Project (refer note 25(d)(iii)).
The cost of $2,225,000 to access the right to mine an additional 900,000mt, together with stamp duty
arising on the exercise of $111,467, has been capitalised within mine properties and development costs
(refer note 13). The total sum of stamp duty paid amounts to $314,248 (made up of $202,781 and
$111,467).
(iii) Tennant Creek Project (interest decreased from 60% to 55%)
As detailed above at note 25(d)(ii), CUF settled payment of the option exercise amount (being
$2,225,000) via transfer of 5% of its joint venture interest in the Tennant Creek Copper Project.
Directly prior to Completion, the carrying value of the Tennant Creek exploration assets was
$8,866,852 (60% interest), translating to an implied value of $738,904 (5% interest). Upon
Completion, the Group has derecognised $738,904 from exploration assets (refer note 12) and
recorded a gain on disposal of 5% of its interest in exploration asset of $1,486,096 in its statement of
comprehensive income (refer note 3(c)).
Notes to the Consolidated Financial Statements
Annual Report 2024
59
(iv) Yarram Iron Project
In respect of the re-structured Yarram milestone payments, the following is noted:
▪
At 30 June 2024, the $500,000 Next Carry amount commitment has been met. This amount is
reflected as a cost of investment accounted for using the equity method (refer note 15(a));
and
▪
At 30 June 2024, the $1,000,000 payable to GVG in cash or shares at the Company’s election
deferred until a decision to mine is made is disclosed as a contingent liability (refer note 26).
26 COMMITMENTS AND CONTINGENCIES
Commitments
The following disclosures reflect the commitments applicable to the Group as at 30 June 2024 and its
interest in the various projects at that date.
Office Rental Commitments
The Group previously entered into a 12-month lease with Okewood for office premises for a lease term
expiring 30 April 2024. At balance date, the office premises were being leased on a rolling monthly basis.
The expenditure commitments with respect to rent payable under lease arrangement at year end:
2024
2023
$
$
Within one year
4,750
53,000
After one year but less than five years
-
-
More than five years
-
-
4,750
53,000
Commitments of CUF in relation to the Tennant Creek Project (in which CUF has a 55% interest)
Pursuant to the terms of the original 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. Gecko Mining Company Pty Ltd (a member of the Gold Valley Group) 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 $2,310,477 has been spent to 30 June 2024,
the remaining commitment at 30 June 2024 is $7,689,523).
Commitments in relation to Wiluna Iron Project (100%)
Various operating agreements have been entered into in relation to the Wiluna Iron Project. 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 September 2024 and can be extended for
a further on year period 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 2024.
▪
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 MGM Haulage Pty Ltd. The current term of the
contract expires 4 July 2024, unless terminated. The contract includes a 14 day termination clause
for financial hardship.
▪
Mining Services Agreement has been entered into with Big Yellow Mining Pty Ltd. The contract
includes a 14 day termination clause for financial hardship.
Contractual commitments at 30 June 2024 are as follows (amounts shown as 100% of the commitment):
2024
2023
$
$
Up to 1 year
1,449,861
629,912
Between 1 and 5 years
-
-
Later than 5 years
-
-
1,449,861
629,912
Notes to the Consolidated Financial Statements
Annual Report 2024
60
Parent entity guarantee
Cufe Ltd has provided guarantees over certain of the obligations of its subsidiary company Wiluna Fe Pty Ltd
to GWR Group (now assigned to Gold Valley Group) relating to the JWD Mineral Rights Agreement.
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:
2024
2023
$
$
Within one year
366,921
136,859
After one year but less than five years
1,666,702
-
More than five years
913,884
-
2,947,507
136,859
Contingencies
The following disclosures reflect the contingent liabilities and contingent assets applicable to the Group as at
30 June 2024 and its interest in the various projects at that date.
Contingent Liabilities of Wiluna Iron Project (100%)
Mining Rights Agreement
The 2023 Annual Report disclosed that the Company (via its subsidiary Wiluna FE Pty Ltd as Operator and
60% equity interest holder in the JV at that time) had entered into a variation with GWR Group Ltd on the
JWD Mining Rights Agreement (MRA Variation), pursuant to which the JV can export additional tonnes of
iron ore on the following terms:
▪
900,000T upon payment of $2,225,000 by not later than 30 June 2024, with tonnes to be exported
by 30 June 2026 (First Option); 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 (Second Option).
As part of the Restructure Transaction which completed on 1 September 2023, the First Option has been
exercised by the Company with payment settled via transfer of 5% of its joint venture interest in the
Tennant Creek Copper Project (refer note 25).
Contingent Liabilities of CUF in respect to the Yarram Transaction
The 2023 Annual Report disclosed that a milestone payment will be payable by CUF to Gold Valley Brown
Stone Pty Ltd (GVBS) 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).
As part of the Restructure Transaction which completed on 1 September 2023, the Yarram milestone
payment of $1.5m has been re-structured. This obligation has been restructured such that CuFe has agreed
to carry the next $500,000 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. At 30 June 2024, the Next Carry commitment has been met (refer note note 25).
At 30 June 2024 there were no other contingent liabilities or contingent assets.
Notes to the Consolidated Financial Statements
Annual Report 2024
61
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.
Equity interest
%
2024
2023
Subsidiaries:
Wiluna FE Pty Ltd
100
100
Yarram FE Pty Ltd
100
100
CuFe Tennant Creek Pty Ltd
100
100
Jackson Minerals Pty Ltd
100
100
Mooloogool Pty Ltd
100
100
Bulk Ventures Ltd
100
100
Associates:
Gold Valley Iron and Manganese Pty Ltd
50
50
Yarram Iron Pty Ltd
50
50
28 PARENT ENTITY FINANCIAL INFORMATION
2024
2023
$
$
Current assets
8,680,831
4,762,278
Non-current assets
-
16,541,914
Total assets
8,680,831
21,304,192
Current liabilities
(1,297,641)
(7,500,012)
Non-current liabilities
-
-
Total liabilities
(1,297,641)
(7,500,012)
Net assets
7,383,190
13,804,180
Issued capital
64,004,653
58,847,052
Accumulated losses
(61,270,211)
(49,519,997)
Share-based payment reserve
4,648,748
4,477,125
Total shareholders’ equity
7,383,190
13,804,180
Loss for the period
(11,750,214)
(11,154,755)
Total comprehensive loss for the period
(11,750,214)
(11,154,755)
Commitments, contingent liabilities and contingent assets of the parent entity are the same as those of the
Group as detailed at note 26.
29 AUDITORS’ REMUNERATION
2024
2023
$
$
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
118,821
116,239
Notes to the Consolidated Financial Statements
Annual Report 2024
62
30 RELATED PARTY DISCLOSURES
Note 27 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 2024, an aggregate amount of $29,562 (30 June 2023: $80,989) was paid
or payable to Cyclone Metals Ltd (Cyclone) for warehouse rental and IT costs. At 30 June 2024, $7,316
(plus GST) was payable to Cyclone (30 June 2023: $36,731). Mr Antony Sage is a director of Cyclone.
During the year ended 30 June 2024, an aggregate amount of nil (30 June 2023: $1,000) was paid or
payable to European Lithium Ltd (European Lithium). At 30 June 2023, nil was payable to European
Lithium (30 June 2023: nil). Mr Antony Sage is a director of European Lithium.
During the year ended 30 June 2024, an aggregate amount of $58,650 (30 June 2023: $107,275) was paid
or payable to Okewood Pty Ltd (Okewood) for office rent. At 30 June 2024, $4,750 (plus GST) was
payable to Okewood (30 June 2023: nil). Mr Antony Sage is a director of Okewood.
During the year ended 30 June 2024, an amount of $1,652,115 (30 June 2023: $654,578) was paid or
payable to Gold Valley Iron Ore Pty Ltd (a substantial shareholder of the Company) (GVIO) for royalty
payments ($1,152,115) (reflecting the Group’s 60% share of the total royalty expenses up to date of
completion of the Restructure Transaction and 100% post completion) and payment of Cash Consideration
pursuant to the Restructure Transaction ($500,000). At 30 June 2024, $355,682 was payable to GVIO in
respect of royalties, and $1,210,000 was payable to GVIO in respect of the Cash Consideration payable
under the Restructure Transaction (30 June 2023: nil). Additionally, at 30 June 2024, $2,826,943 was
payable to GVIO, offset by an amount receivable of $2,475,650 from GVIO (net payable of $351,293) in
respect of third party supplier cost reimbursements arising in respect of shared shipment arrangements.
Options issued to directors or director related entities
Following receipt of shareholder approval at the Company’s Annual General Meeting, a total of 15,000,000
unlisted options were issued to a director (or his nominee) (being the Director Options). Refer note 22
for further details.
Shares issued to substantial shareholder
Following receipt of shareholder approval at the Company’s General Meeting, a total of 150,000,000 shares
were issued to Gold Valley Group (GVG), being the consideration shares in respect of the Restructure
Transaction.
Significant shareholders
At 30 June 2024, GVIO and its associates (Gold Valley Group)3 held a significant interest of 25.21% of
CUF. Director Mr Scott Meacock currently serves as Chief Executive Officer and General Counsel of the
Gold Valley Group.
At 30 June 2024, Cyclone Metals held a significant interest of 9.94% of CUF (30 June 2023: 15.09%). 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
2024
2023
$
$
Short-term employee benefits
458,432
639,322
Post-employment benefits
3,568
1,970
Share-based payments
108,916
65,152
570,916
706,444
3 Gold Valley Group refers to Gold Valley Iron Ore Pty Ltd, Gecko Mining Company Pty Ltd, Goldvalley Brown Stone Pty Ltd, Mr
Yugheng Xie, and LSG Resource Pty Ltd.
Notes to the Consolidated Financial Statements
Annual Report 2024
63
Interests held by Key Management Personnel
Movements in shares held by key management personnel is as follows:
30 June 2024
Balance at
1 July 2023
Granted as
remuneration
Exercise of
options
Shares sold
Net change
other
Balance at
30 June 2024
Directors
A Sage(i)
30,173,010
-
-
-
-
30,173,010
M Hancock
5,000,000
-
-
-
-
5,000,000
N Sage
-
-
-
-
-
-
S Meacock (ii)
4,000,000
-
-
-
-
4,000,000
39,173,010
-
-
-
-
39,173,010
(i)
Indirectly held.
(ii)
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). These shares
are included in the opening balance shown.
Movements in unlisted options held by key management personnel is summarised as follows:
30 June 2024
Balance at 1 July
2023
Acquired
/granted
during year
Exercised
Expired/lapsed
during year
Net change
other
Balance at
30 June 2024
Exercisable
Not
Exercisable
Directors
A Sage
10,000,000
-
-
-
-
10,000,000
10,000,000
-
M Hancock
10,000,000
15,000,000(i)
-
-
-
25,000,000
25,000,000
-
N Sage
-
-
-
-
-
-
-
-
S Meacock
-
-
-
-
-
-
-
-
20,000,000
15,000,000
-
-
-
35,000,000
35,000,000
-
(i)
Unlisted options at an exercise price of $0.019 expiring 29 November 2025 (no vesting conditions) were issued following receipt of shareholder approval at
the Company’s AGM held 29 November 2023. 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.
Notes to the Consolidated Financial Statements
Annual Report 2024
64
31 EVENTS AFTER THE REPORTING DATE
Sale of JWD Iron Ore Mining Rights
On 26 August 2024 the Company announced that it had entered a binding term sheet for the disposal of:
e) 100% of its rights, title and interest in the Iron Ore Rights;
f)
the rights and obligations under all associated contracts, authorisations and permits required to
operate the JWD mine;
g) the benefit of all contributions made by CuFe and/or WFE to the rehabilitation fund established for
the purpose of satisfying the rehabilitation obligations pertaining to mining at the JWD mine; and
h) all of its rights, title and interest in certain stockpiles of iron ore, overburden and waste material
located at the JWD mine,
(together, the Assets).
Wiluna Fe Pty Ltd (WFE), a 100% owned subsidiary of CuFe Ltd owns 100% rights, title and interest in the
Assets, including the rights to extract iron ore from the JWD deposit located near Wiluna in WA, and has
agreed to sell those rights to Newcam Minerals Pty Ltd (Newcam) for $12 million cash. WFE remains
responsible for the JWD trade creditors outstanding at the date of execution of the agreement (which
approximate $8m outstanding on normal 30 day terms and approximately $4m payable to Newcam for iron
ore sales proceeds from sale of material from the Mt Gould mine made on their behalf under a shared
shipment arrangement). WFE is also responsible for creditors incurred until the time of completion unless
mining or processing of material owned by Newcam, in which case CuFe will be reimbursed at completion.
WFE retains ownership of certain stockpiles on hand at date of signing (approximately 50,000t of final
product and 50,000t of RoM product) which it can realise moving forward, its hedge positions and trade
debtors.
The final reconciliation of the proceeds received from these will be determined once provisionally priced
shipments are finalised, hedges settled and costs compared to sales proceeds over the period to completion
are known with a current estimated range of $1.5-3m net inflow to CuFe.
CuFe and Newcam have agreed the JWD mine will move to suspend operations while the ownership
transition occurs given the current challenging conditions in the iron ore market, to preserve the value of
ore in the ground.
Key conditions precedent to the transaction, which are to be satisfied not later than 31 October 2024
include:
▪
CuFe shareholder approval for the purposes of ASX Listing Rule 11.2;
▪
Assignment of existing or entry into new offtake arrangements between Glencore and Newcam; and
▪
Necessary regulatory approvals and third-party consents including that of the tenement owner.
Approval from shareholders will be sought at the upcoming general meeting scheduled to be held 10
October 2024. For further details, refer ASX Announcement dated 26 August 2024.
Issue of Shares
The following shares were issued subsequent to year end:
▪
1,562,500 shares were issued as part of consideration for the acquisition of West Arunta tenement
E80/6052.
Movements in Options
The following movements in options occurred subsequent to year end:
▪
50,000,000 listed options (ASX:CUFO) exercisable at $0.025 expiring 13 June 2027 were issued
(being the Lead Manager Options), following receipt of shareholder approval at the 23 July 2024
general meeting;
▪
27,750,000 unlisted options exercisable at $0.027 expired 7 September 2024.
There have been no other events subsequent to 30 June 2024 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.
Consolidated Entity Disclosure Statement
Annual Report 2024
65
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
Type of
Entity
Trustee,
partner or
participant
in JV
Place of
Business
/
Country
of
Incorp-
oration
Australian
resident
or foreign
resident
Foreign
juris-
diction of
foreign
residents
Equity
interest
%
2024
2023
Parent:
Cufe Ltd
Body
corporate
-
Australia
Australian
n/a
100
100
Subsidiaries:
Wiluna FE Pty Ltd
Body
corporate
-
Australia
Australian
n/a
100
100
Yarram FE Pty Ltd
Body
corporate
JV
participant
Australia
Australian
n/a
100
100
CuFe Tennant Creek Pty Ltd
Body
corporate
-
Australia
Australian
n/a
100
100
Jackson Minerals Pty Ltd
Body
corporate
-
Australia
Australian
n/a
100
100
Mooloogool Pty Ltd
Body
corporate
-
Australia
Australian
n/a
100
100
Bulk Ventures Ltd
Body
corporate
-
Australia
Australian
n/a
100
100
Associates:
Gold Valley Iron and Manganese
Pty Ltd
Body
corporate
-
Australia
Australian
n/a
50
50
Yarram Iron Pty Ltd
Body
corporate
-
Australia
Australian
n/a
50
50
CuFe Ltd (the ‘head entity’) and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under
the tax consolidation regime.
Directors’ Declaration
Annual Report 2024
66
DIRECTORS’ DECLARATION
In the opinion of the Directors of CuFe Ltd:
1.
the financial statements and notes of the Group are in accordance with the Corporations Act 2001,
including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2024 and its
performance for the year ended on that date; and
b) complying with Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001;
2.
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in note 2(b);
3.
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;
4.
the information disclosed in the Consolidated Entity Disclosure Statement is true and correct.
5.
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 2024.
This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to s.303(5) of
the Corporations Act 2001.
Mr Antony Sage
Executive Chairman
27 September 2024
Liability limited by a scheme approved under Professional Standards Legislation
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
Stantons Is a member of the Russell
Bedford International network of firms
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 2024, 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 consolidated financial
statements, including material accounting policy information, the consolidated entity disclosure statement 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 2024 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 Group 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 (including Independence Standards) (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 Group, would be in the same terms if given to the directors as at the time of this auditor’s
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
We draw attention to Note 2(c) to the financial statements, which indicates that the Group incurred loss
after tax from continuing operations of $13,622,430, had a net working capital deficit of $7,041,321
(excluding restricted cash at as 30 June 2024. As stated in Note 2(c), these events or conditions, along
67
with other matters, as set forth in Note 2(c), indicate that a material uncertainty exists that may cast
significant doubt on the Group’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. In addition to the matter described in the Material Uncertainty Related to Going
Concern section, we have determined the matters described below to be Key Audit Matters to be
communicated in our report.
Key Audit Matters
How the matter was addressed in the audit
Revenue Recognition
The Group’s revenue totalled $96,133,892 during
the financial year ended 30 June 2024 (refer to
Note 3(a) of the financial statements).
Note 2(r) of 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.
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 (AASB 15), such
as:
✓
identifying the performance obligations
under its contracts with customers;
✓
determining
the
transaction
price,
applying the expected value approach
based on the initial assay and weight
result and subsequent adjustment based
on the final sampling and analysis
results;
✓
the method of allocating the transaction
price in the contract to the performance
obligations; and
✓
identifying the timing of recognition of the
revenue
based
on
performance
obligations satisfaction.
Inter alia, our audit procedures included the
following:
▪
Assessing the revenue transactions to ensure
compliance with the Group’s accounting
policy and AASB 15;
▪
Performing substantive testing on 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;
▪
Performing cut-off testing to ensure that
revenue transactions around the year-end
have been recorded in the correct period; and
▪
Assessing the adequacy of the related
disclosures in the notes to the financial
statements.
68
Key Audit Matters
How the matter was addressed in the audit
Inventory valuation and existence
As at 30 June 2024, the Group held an inventory
of $5,613,374 (refer to the Note 8 of the financial
statements)
As described in Note 2(i) of the financial
statements, the inventory is carried at a lower of
cost and net realisable value on a weighted
average basis in accordance with AASB 102
Inventories (AASB 102).
Inventory valuation and existence was considered
a key audit matter due to the estimates and
judgment involved in the valuation.
Inter alia, our audit procedures included the
following:
▪
Confirming the quantities through internal and
third-party surveys;
▪
Visting the site close to end of the year to
substantiate the existence of operation and
inventory;
▪
Assessing the Group’s inventory valuation
methodology with the requirements of AASB
102;
▪
Assessing
the
reasonableness
of
the
assumptions used in the inventory valuation
model;
▪
Testing the mathematical accuracy of the
inventory valuation model;
▪
Recalculating the cost and the net realisable
value of the inventory; and
▪
Assessing the adequacy of the related
disclosures in the notes to the financial
statements.
Financial Assets – Commodity collar/swap
contracts
The Group unrealised gain of $1,807,562 and
realised gain of $71,249 for the financial year
ended
30
June
2024
through
commodity
collar/swap contracts (refer to Note 3(c) of the
financial statements) and as at 30 June 2024, the
Group held Commodity collar/swap contracts for a
total of $1,869,923 (refer to Note 11 of the financial
statements)
As described in Note 2(m) of the financial
statements, these financial assets have been
classified as financial assets at fair value through
profit and loss in accordance with AASB 9
Financial Instruments (AASB 9).
Commodity collar/swap contracts were considered
a key audit matter due to the judgment applied in
the valuation.
Inter alia, our audit procedures included the
following:
▪
Testing gains from commodity collar/swap
contracts
obtaining
relevant
trading
confirmations, reperforming the calculation
and agreeing realised gains to the bank
statements and general ledger;
▪
Obtaining the fair value calculation of the
Commodity collar/swap contracts open as at
30 June 2024;
▪
Obtaining the trading confirmations signed by
the two parties at the commencement of the
contracts;
▪
Obtaining independent confirmation of the
forward prices used in the fair value valuation
of the contracts;
▪
Testing the mathematical accuracy of the
transactions; and
▪
Assessing the adequacy of the related
disclosures in the notes to the financial
statements.
69
Key Audit Matters
How the matter was addressed in the audit
Carrying
Value
of
Exploration
and
Evaluation Expenditure
As at 30 June 2024, exploration and evaluation
expenditure totalled $9,038,292.
As per Note 12 of the financial statements, during
the year the Group acquired tenures in West
Arunta (Niobium) and Tambourah (Lithium) and
also expanded its North Dam Project. As part of
the completion of Restructure Transaction detailed
in Note 25, the Group’s interest in the Tennant
Creek Project has decreased from 60% to 55% on
1 September 2023.
The carrying value of capitalised exploration and
evaluation expenditure is a key audit matter due
to:
•
The significance of the total balance (26% of
total assets;
•
The necessity to assess management’s
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;
•
The assessment of significant judgements
made by management in relation to the
capitalised
exploration
and
evaluation
expenditure; and
•
The assessment of impairment of capitalised
exploration and evaluation expenditures
involved judgement.
Inter alia, our audit procedures included the
following:
•
Assessing the management's determination of
its areas of interest to ensure consistency with
the definition in AASB 6;
•
Where the right of tenure expired or the
management intends not to renew the right of
tenure, ensured that the exploration costs are
written off;
•
Evaluating costs capitalised during the year
and testing on sample basis;
•
Evaluation
of
Group
documents
for
consistency with the intentions for the
continuing of exploration and evaluation
activities in certain areas of interest and
corroborated with enquiries of management.
Inter alia, the documents we evaluated
included:
▪
Minutes of meetings of the board and
management;
▪
Announcements made by the Group to the
Australian Securities Exchange; and
▪
Cash flow forecasts; and
▪
Assessing the adequacy of the related
disclosures in the notes to the financial
statements.
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 2024 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.
70
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report that gives a true and fair view in accordance with Australian Accounting Standards
and the Corporations Act 2001 (other than the consolidated entity disclosure statement); and
b)
the consolidated entity disclosure statement that is true and correct with the Corporation Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i)
the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error, and
ii)
the consolidated entity disclosure statement that is true and correct and is free of
misstatement whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional 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.
71
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in Internal control that we identify during our
audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements.
We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore key audit matters. We describe these
matters in our auditor's report unless law or regulation precludes public disclosure 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 from pages 16 to 21 for the year
ended 30 June 2024.
In our opinion, the Remuneration Report of CuFe Limited for the year ended 30 June 2024 complies with section
300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
27 September 2024
72
Schedule of Tenements
Annual Report 2024
73
SCHEDULE OF TENEMENTS
As at 6 September 2024:
Schedule of tenement interests of the Company and its subsidiary entities:
Tenement
reference
Project & Location
Interest
Note
M53/971-I
Wiluna West – Western Australia
100%
1
M53/972-I
Wiluna West – Western Australia
100%
1
M53/1018-I
Wiluna West – Western Australia
100%
1
M53/1078-I
Wiluna West – Western Australia
100%
1
L53/115
Wiluna West – Western Australia
100%
1
L53/146
Wiluna West – Western Australia
100%
1
MLN1163
Yarram – Northern Territory
50%
2
ELR125
Yarram – Northern Territory
50%
2
ELR146
Yarram – Northern Territory
50%
2
EL 26595
Tennant Creek – Northern Territory
55%
3
EL 28777
Tennant Creek – Northern Territory
55%
3
EL 28913
Tennant Creek – Northern Territory
55%
3
EL 29012
Tennant Creek – Northern Territory
55%
3
EL 29488
Tennant Creek – Northern Territory
55%
3
EL 30488
Tennant Creek – Northern Territory
55%
3
EL 30614
Tennant Creek – Northern Territory
55%
3
EL 31249
Tennant Creek – Northern Territory
55%
3
EL 32001
Tennant Creek – Northern Territory
55%
3
ML 23969
Tennant Creek – Northern Territory
55%
3
ML 29917
Tennant Creek – Northern Territory
55%
3
ML 29919
Tennant Creek – Northern Territory
55%
3
ML 30714
Tennant Creek – Northern Territory
55%
3
ML 30745
Tennant Creek – Northern Territory
55%
3
ML 30783
Tennant Creek – Northern Territory
55%
3
ML 30873
Tennant Creek – Northern Territory
55%
3
ML 31021
Tennant Creek – Northern Territory
55%
3
ML 31023
Tennant Creek – Northern Territory
55%
3
ML 33869**
Tennant Creek – Northern Territory
55%
3
ML 33872**
Tennant Creek – Northern Territory
55%
3
MLC 21**
Tennant Creek – Northern Territory
0%
3
MLC 323**
Tennant Creek – Northern Territory
0%
3
MLC 324**
Tennant Creek – Northern Territory
0%
3
MLC 325**
Tennant Creek – Northern Territory
0%
3
MLC 326**
Tennant Creek – Northern Territory
0%
3
MLC 327**
Tennant Creek – Northern Territory
0%
3
Schedule of Tenements
Annual Report 2024
74
Tenement
reference
Project & Location
Interest
Note
MLC 506**
Tennant Creek – Northern Territory
0%
3
MLC 69**
Tennant Creek – Northern Territory
0%
3
MLC 70**
Tennant Creek – Northern Territory
0%
3
MLC 78**
Tennant Creek – Northern Territory
0%
3
MLC 85**
Tennant Creek – Northern Territory
0%
3
MLC 86**
Tennant Creek – Northern Territory
0%
3
MLC 87**
Tennant Creek – Northern Territory
0%
3
MLC 88**
Tennant Creek – Northern Territory
0%
3
MLC 89**
Tennant Creek – Northern Territory
0%
3
MLC 90**
Tennant Creek – Northern Territory
0%
3
MLC 96**
Tennant Creek – Northern Territory
0%
3
MLC 97**
Tennant Creek – Northern Territory
0%
3
E52/1668
Peak Hill - Western Australia
20%
4
E52/1678
Peak Hill - Western Australia
20%
4
E52/1730
Peak Hill - Western Australia
20%
4
P52/1538
Peak Hill - Western Australia
20%
4
P52/1539
Peak Hill - Western Australia
20%
4
E51/1033-I
Morck Well – Western Australia
20%
5
E52/1613-I
Morck Well – Western Australia
100%
10
E52/1672-I
Morck Well – Western Australia
20%
5
E29/640
Mt Ida – Western Australia
100%
6
M29/2
Mt Ida – Western Australia
100%
6
M29/165
Mt Ida – Western Australia
100%
6
M29/422
Mt Ida – Western Australia
100%
6
E15/1495
East Yilgarn – Western Australia
100%
7
M15/1841
East Yilgarn – Western Australia
100%
8
M15/1893
East Yilgarn – Western Australia
100%
9
P45/3061
Pilbara – Western Australia
100%
10
E80/5925
Kimberley – Western Australia
100%
10
E80/5950
Kimberley – Western Australia
100%
10
E80/5990
Kimberley – Western Australia
100%
10
E80/6052*
Kimberley – Western Australia
100%
10
EL 33835*
Camp Creek – Northern Territory
100%
10
* Pending Application ** Amalgamated into new Licences ML 33869 and ML 33872
NOTES:
1
CUF (via Wiluna FE Pty Ltd) holds a 100% interest in the Mining Rights Agreement over the Wiluna West
JWD deposit (iron ore rights).
Schedule of Tenements
Annual Report 2024
75
NOTES:
2
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.
3
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.
4
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.
5
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.
6
CUF holds 100% interest in iron ore rights over the Mt Ida tenements via the Mt Ida Iron Ore Rights Sale
Agreement.
7
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.
8
CUF hold a 100% interest in the tenement and Anthony Stehn holds a 1% gross sales royalty and retains
rights to gemstones.
9
CUF holds 100% interest in lithium and rare earth related mineral rights.
10
CUF holds 100% interest in the tenements.
Additional Shareholder Information
Annual Report 2024
76
ADDITIONAL SHAREHOLDER INFORMATION
Shares
The total number of Shares on issue as at 6 September 2024 was 1,336,674,865, held by 1,857 registered
Shareholders. 918 shareholders hold less than a marketable parcel, based on the market price of a share as at 6
September 2024. Each Share carries one vote per Share without restriction.
Escrowed Shares
The Company does not have any Escrowed Shares on issue.
Twenty Largest Holders – Shares (ASX:CUF)
As at 6 September 2024, the twenty largest Shareholders (ASX:CUF) were as shown in the following table:
Legal Holder
Holding
%
1
GOLD VALLEY IRON ORE PTY LTD
203,667,341
15.24
2
DEMPSEY RESOURCES PTY LTD
107,381,968
8.03
3
GECKO MINING COMPANY PTY LTD
91,425,000
6.84
4
LSG RESOURCES PTY LTD
35,947,260
2.69
5
BNP PARIBAS NOMINEES PTY LTD
32,027,677
2.40
6
DEMPSEY RESOURCES PTY LTD
25,300,000
1.89
7
ANTONY WILLIAM PAUL SAGE & LUCY FERNANDES SAGE
24,923,010
1.86
8
10 BOLIVIANOS PTY LTD
23,305,637
1.74
9
CELTIC CAPITAL PTY LTD
18,750,000
1.40
10
CAULDRON ENERGY LIMITED
17,913,868
1.34
11
EUROPEAN LITHIUM LIMITED
15,000,000
1.12
12
WHITEY TIGER PTY LTD
14,915,554
1.12
13
GOLDVALLEY BROWN STONE PTY LTD
14,603,535
1.09
14
CITICORP NOMINEES PTY LIMITED
13,605,868
1.02
15
MISS KRISTEN LOUISE NEWELL
13,405,955
1.00
16
GECKO MINING COMPANY PTY LTD
13,000,000
0.97
17
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
12,541,011
0.94
18
MRS SAMANTHA HELEN LOUISE YOUNG
12,500,000
0.94
19
COLLEGE SEARCH PTY LTD
12,305,607
0.92
20
BNP PARIBAS NOMINEES PTY LTD
11,146,963
0.83
Total Top 20
713,666,254
53.39
Balance of register
623,008,611
46.61
TOTAL
1,336,674,865
100.00
Additional Shareholder Information
Annual Report 2024
77
Twenty Largest Holders – Listed Options (ASX:CUFO)
As at 6 September 2024, the twenty largest Optionholders (ASX:CUFO) were as shown in the following table:
Legal Holder
Holding
%
1
EVOLUTION CAPITAL PTY LTD
25,000,000
17.39
2
LEHAV PTY LTD
10,738,625
7.47
3
123 HOME LOANS PTY LTD
10,398,000
7.23
4
COLLEGE SEARCH PTY LTD
9,380,303
6.53
5
PROFESSIONAL PAYMENT SERVICES PTY LTD
9,375,000
6.52
6
K-SUM CAPITAL PTY LTD
7,000,000
4.87
7
MS SIN CHOON LIAW
6,000,000
4.17
8
MR ANTHONY ROBERT RAMAGE
4,000,000
2.78
9
RIMOYNE PTY LTD
3,125,000
2.17
10
HERVEY BAY VENTURES PTY LTD
2,593,750
1.80
11
NETWEALTH INVESTMENTS LIMITED
2,343,750
1.63
12
GOFFACAN PTY LTD
2,093,750
1.46
13
MR WAYNE JEFFERY MARCH & MRS JANET ANN MARCH
2,000,000
1.39
13
RIYA INVESTMENTS PTY LTD
2,000,000
1.39
14
MR PETER JOHN AITKEN
1,600,000
1.11
15
MR CONSTANTINE DIFFERDING
1,562,500
1.09
15
T C DRAINAGE (WA) PTY LTD
1,562,500
1.09
15
MR CONSTANTINE DIFFERDING & MRS TONIE MAREE DIFFERDING
1,562,500
1.09
16
YUCAJA PTY LTD
1,559,932
1.09
17
MR WAYNE JEFFREY MARCH
1,500,000
1.04
18
MR JOHN EDWARD NIESSL
1,460,367
1.02
19
RIMOYNE PTY LTD
1,401,953
0.98
20
MR ALI MOHAMMED PARVEZ UKANI
1,250,000
0.87
Total Top 20
109,507,930
76.18
Balance of register
34,242,070
23.82
TOTAL
143,750,000
100.00
Distribution Schedule
A distribution schedule of the number of Shareholders, by size of holding, as at 6 September 2024 is below:
Size of holdings
Number of
Shares
%
Number of
Shareholders
1 – 1000
0.00%
91
1,001 – 5,000
0.04
155
5,001 – 10,000
0.11%
179
10,001 – 100,000
2.49%
721
100,001 and over
97.36%
711
Total
27,235
470,648
1,451,494
33,331,384
1,301,394,104
1,336,674,865
100.00%
1,857
Substantial Holders
Set out below are all substantial holders who have given notice of a holding of more than 5% of the Company’s
voting rights:
Substantial Holder
Holding
%
DEMPSEY RESOURCES PTY LTD / CYCLONE METALS LTD
132,681,968
9.93
GOLD VALLEY IRON ORE PTY LTD / GOLDVALLEY BROWN STONE PTY LTD /
GECKO MINING COMPANY PTY LTD / LSG RESOURCES PTY LTD / YUZHENG XIE
358,643,136
26.83
Additional Shareholder Information
Annual Report 2024
78
Unquoted Options
At 6 September 2024 the Company has on issue a total of 131,750,000 Unquoted Options on issue (including 16,750,000 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
Unlisted
Options
$0.06
12/10/2024
Unlisted
Options
$0.027
07/09/2024
Unlisted
Options
$0.10
09/12/2024
Unlisted
Options
$0.019
29/11/2025
Bell Potter Nominees
5,000,000
-
-
-
Gecko Mining Company Pty Ltd
-
-
75,000,000
-
Mark Hancock & Julie Hancock
-
10,000,000
-
15,000,000
Okewood Pty Ltd
-
10,000,000
-
-
Holders individually less than 20%
-
-
-
-
Total
5,000,000
20,000,000
75,000,000
15,000,000