COVER PAGE TO BE INSERTED
FENIX RESOURCES LIMITED
- 2 -
CORPORATE DIRECTORY
Directors
Registered and Principal Office
John Welborn Executive Chairman
Level 33, 1 Spring Street
Craig Mitchell Executive Director
Perth WA 6000
Garry Plowright Independent Non-Executive Director
Telephone: +61 8 6285 0456
Shannon Coates Independent Non-Executive Director
Email: info@fenixresources.com.au
Web: www.fenixresources.com.au
Company Secretary
Natalie Teo
Auditor
Grant Thornton Audit Pty Ltd
Share Registry
Central Park
Automic Registry Services
Level 43, 152-158 St Georges Terrace
Level 5, 191 St Georges Terrace
Perth WA 6000
Perth WA 6000
Telephone: +61 8 6285 0456
Bankers
Facsimile: +61 2 9698 5414
National Australia Bank Limited
50 St Georges Terrace
Stock Exchange Listing
Perth WA 6000
Australian Securities Exchange
ASX Code – FEX
CONTENTS
Corporate Directory
2
Directors’ Report
3
Auditor’s Independence Declaration
29
Consolidated Statement of Profit or Loss and Other Comprehensive Income
30
Consolidated Statement of Financial Position
31
Consolidated Statement of Changes in Equity
32
Consolidated Statement of Cash Flows
33
Notes to the Consolidated Financial Statements
34
Consolidated Entity Disclosure Statement
79
Directors’ Declaration
80
Independent Auditor’s Report
81
Additional Information
85
DIRECTORS’ REPORT
FENIX RESOURCES LIMITED
- 3 -
The Directors present the financial report for the consolidated entity consisting of Fenix Resources Limited (Fenix or
Company) and the entities it controls (Consolidated Entity or Group) at the end of, or during, the year ended
30 June 2024.
PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS
During the year ended 30 June 2024, Fenix completed a number of transformational transactions and activities. As a
result, Fenix now operates across three business units:
• Mining: Exploration, development and mining of mineral tenements across Western Australia’s Mid-West,
currently comprising:
o
Fenix’s 100% owned, flagship Iron Ridge iron ore mine (Iron Ridge), a premium high grade, high margin,
1.3Mtpa direct shipping iron ore (DSO) operation located 360km north-east of Geraldton that hosts
some of the highest-grade iron ore in Western Australia;
o
Fenix’s 100% owned Shine iron ore mine (Shine), an open pit DSO operation located 295km east of
Geraldton, with production expected to commence in the December 2024 quarter and operate at
100kt per month during FY25 and FY26;
o
Fenix’s exclusive right to mine up to 10Mt of Sinosteel Mining Corporation’s (SMC) high-grade Beebyn-
W11 iron ore deposit, located 20km from Iron Ridge and planned to produce 1.5Mtpa over
approximately 7 years from early calendar 2025 as a DSO operation (see ASX Announcement dated 25
July 2024);
o
Fenix’s ore purchase agreement for up to 500kt of high-grade iron ore from 10M Pty Ltd’s Twin Peaks
iron ore mine (Twin Peaks), a high-grade DSO operation located 200km north-east of Geraldton; and
o
Various mining opportunities using Fenix’s infrastructure advantages in the Mid-West.
• Logistics: Provision of high-quality bulk commodity road and rail haulage logistics solutions to service both Fenix
operations as well as third-party customers, currently comprising:
o
Newhaul Road Logistics, providing bulk road haulage of minerals via an industry-leading fleet of 200-
tonne quad road trains;
o
The Ruvidini Inland Port, providing an assembly location for road haulage, product storage, blending
and potential future access to rail transportation; and
o
The Ruvidini and Perenjori Rail Sidings, providing access to the Mid-West rail network and direct
connection to the Geraldton Port.
• Port Services: Provision of in-loading access via truck or rail for secure storage at Fenix’s +400,000 tonnes on-
wharf storage facilities (comprising 3 sheds) at Geraldton Port and offering direct ship loading access and services.
During the year, Fenix demonstrated its unique ability to operate as a highly profitable, fully integrated mining, logistics
and port services business, delivering strong performance across each of its business units as outlined below.
MINING
IRON RIDGE IRON ORE MINE
Health & Safety Performance
Fenix remains committed to maintaining a safe work environment and operating in a responsible manner that protects
the health, safety and wellbeing of our people, contractors and communities. To achieve our commitment, the Company
recognises the importance of maintaining a robust safety culture and continually improving its safety performance.
During the year ended 30 June 2024, the Company recorded no Lost Time Injuries (LTI) across its mining operations.
Mining and Production Performance
During the year ended 30 June 2024, Fenix increased its production rate to 1.4 million dry metric tonnes (dmt). Pleasingly,
the lump to fines production ratio increased, resulting in the production and sale of additional high value lump product
during the period.
C1 cash costs for the year averaged A$77.9 per wet metric tonne (wmt) (equivalent to ~US$51/wmt), representing a
4.4% decrease when compared with the prior year. Fenix is proud of this cost reduction achievement achieved despite
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 4 -
continued inflationary pressure and the impact of higher mining costs due to additional stripping required during the
year. The reduction of C1 cash costs was driven by economies of scale achieved via the expansion of the Newhaul Port
Logistics operations as well as further efficiencies at the Company’s 100%-owned Newhaul Road Logistics Operations.
Fenix is committed to targeting further C1 cash cost reductions, notably via further economies of scale once additional
mining operations are brought into production.
Iron Ridge Production Summary
Production Summary (kwmt)
June Q FY24
Mar Q FY24
Dec Q FY24
Sep Q FY24
Total FY24
Ore Mined
347.1
444.8
355.0
367.9
1,514.9
Lump Ore Produced
173.8
150.3
147.0
222.2
693.2
Fine Ore Produced
204.1
181.2
152.1
212.1
749.6
Lump Ore Hauled
171.1
152.0
214.9
174.4
712.3
Fine Ore Hauled
192.1
188.1
139.8
211.2
731.1
Lump Ore Shipped
181.7
168.5
207.1
166.4
723.7
Fine Ore Shipped
219.0
188.1
146.3
186.0
739.4
C1 Cash Cost (A$/wmt Shipped FOB)
79.7
77.6
78.2
75.9
77.9
Sales Performance
During the year ended 30 June 2024, Fenix loaded a total of twenty-five (25) ships with a total of 1.46 million wmt of
iron ore from the Iron Ridge Mine (723,657 wmt of lump and 739,384 wmt of fines).
As at 30 June 2024, Fenix had shipped a total of approximately 4,662,643 wmt (4,402,993 dmt) of product from the Iron
Ridge Mine since the commencement of mining.
Average grade shipped for the year was 64.3% Fe for lump product (FY23: 64.4%) and 63.2% Fe for fines (FY23: 62.7%),
further displaying the unique high-grade, high-quality nature of the Iron Ridge Mine ore body.
The project-to-date lump to fines ratio of 46%:54% continues to be significantly higher than the life-of-mine assumed
average of 25:75. Fenix continues to actively manage the value chain from pit to port to ensure the quality of the lump
product is maximised, as this product attracts a premium price.
Revenue increased year on year primarily as a result of an increase in the prevailing iron ore price. The average index
price for the period was US$119/dmt (FY23: US$110/dmt). Fenix’s Cost and Freight (CFR) iron ore price received (not
including hedging and quotation period adjustments from any prior year shipments) increased by 11% vs the prior year
to US$125/dmt (prior period: US$113/dmt).
Sea freight costs decreased 14% vs year on year to US$18.3/dmt (FY23: US$21.2/dmt), equivalent to A$28/dmt.
Iron Ridge’s C1 operating margin for the year increased to c. A$79/dmt (FY23: A$49/dmt), not including hedging and
quotation period adjustments.
Iron Ridge Sales Performance
Item
Unit
June Q FY24
Mar Q FY24
Dec Q FY24
Sep Q FY24
Total FY24
Lump Product Sales
Fines Product Sales
k wmt
k wmt
182
219
168
188
207
146
166
186
724
739
Total Ore Sales
k wmt
401
357
353
352
1,463
Platts 62% Fe CFR Price, Average
US$/dmt
111.8
123.6
128.3
114.0
119.5
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 5 -
Iron Ridge Sales Performance (continued)
Item
Unit
June Q FY24
Mar Q FY24
Dec Q FY24
Sep Q FY24
Total FY24
Average Realised CFR price
US$/dmt
A$/dmt
118.5
179.7
135.8
206.4
137.8
212.0
116.4
177.7
124.9
190.6
Average Freight Cost
US$/dmt
A$/dmt
(19.1)
(29.0)
(18.8)
(28.6)
(17.5)
(27.0)
(17.2)
(26.2)
(18.3)
(27.8)
Average Realised FOB Price (pre-
QP Adjustments & hedging)
US$/dmt
A$/dmt
99.4
150.8
117.0
177.8
120.3
185.0
99.2
151.5
106.7
162.7
SHINE IRON ORE MINE
In July 2023, Fenix acquired Shine from Mount Gibson Iron Limited (MGX or Mount Gibson). Shine has a Mineral
Resource Estimate of 15 million tonnes at a grade of 58% Fe.
In July 2024, Fenix announced the recommencement of mining operations at Shine, with site works commencing in the
September 2024 quarter and targeting first iron ore production for the December 2024 quarter. The approval to proceed
with the Stage 1 mine plan for Shine followed a comprehensive review of all aspects of the project which included the
completion of an in-pit drilling program, product sampling, a tender process for mining and processing operations, and
updated resource modelling. Estimated pre-production capital expenditure of A$7.4m is relatively minimal given the
availability of all required critical infrastructure as well as having all required approvals and permits in place. The
approved capital expenditure budget includes the upgrade of existing camp infrastructure, contractor mobilisation and
the upgrade of the Shine access road.
Fenix will use the Company’s 100% owned Newhaul logistics and port services functions to realise significant cost savings,
with the planned haulage distance from Shine to Geraldton being less than 300km compared to the approximate 500km
from Geraldton to Iron Ridge. Haulage is expected to average 100,000 tonnes per month from commencement of
production during FY25 and FY26, with total expected C1 Cash Costs FOB Geraldton of A$67.50/wmt (US$45.40/wmt).
Refer to the Fenix ASX announcement dated 4 July 2024 for further information.
BEEBYN-W11 IRON ORE DEPOSIT
In October 2023, Fenix secured the exclusive Right to Mine and export up to 10 million dmt of iron ore from SMC’s high-
grade Beebyn-W11 iron ore deposit. The Beebyn-W11 iron ore deposit has a JORC 2012 compliant total Measured and
Indicated Mineral Resource Estimate of 20.5 million tonnes at a grade of 61.3% Fe.
In July 2024, Fenix completed and released a feasibility study for the planned mine development at the Beebyn-W11
deposit. Key investment highlights include:
• Forecast production rate of 1.5 million dmt per annum for 6.7 years at an average strip ratio of 2.2;
• JORC Ore Reserve of 10 million tonnes at an average grade of 62.2% Fe;
• Pre-production capital cost of A$22.9m, with c.A$3m in post-production capital;
• LOM average C1 cash operating costs of A$77.5 per wet metric tonne;
• Average LOM annual EBITDA of A$47.9m;
• Pre-tax NPV10 of A$150.9m and estimated pre-tax Internal Rate of Return of 189%, offering further significant
upside at higher iron ore prices; and
• Regulatory and Environmental Approvals are well progressed and expected in Q3 2024, with first production
targeted for Q1 2025.
Refer to the Fenix ASX announcement dated 25 July 2024 for further information.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 6 -
TWIN PEAKS IRON ORE MINE
In November 2023, Fenix secured the exclusive right to purchase and export up to 500,000 tonnes of DSO product from
the high-grade Twin Peaks iron ore mine within a 24-month period. Under the agreement, Fenix is responsible for
haulage, storage, port services, ship loading, marketing and ore sales. In early CY2024, Fenix exported 1 ship containing
59,275 wmt of iron ore sourced from Twin Peaks consisting entirely of lump material with an average grade of 61.9% Fe.
During the June 2024 quarter 10M Pty Ltd, the owner of Twin Peaks, was placed into voluntary administration. With
consent from Fenix, 10M Pty Ltd subsequently executed a Deed of Company Arrangement (DOCA) to enable a new
proponent to acquire 10M Pty Ltd and recommence mining at Twin Peaks. Under the DOCA, Fenix’s Ore Purchase
Agreement was amended such that, following repayment of Fenix’s existing $5 million loan, Fenix will be entitled to
retain 50% of the notional profit from ore sold (previously 30%). As part of the DOCA, Fenix retained all proceeds from
the completed Twin Peaks shipment as well as any ore stored by Fenix, and additionally received a further 10,000 tonnes
of high-quality iron ore stockpiled at the mine. Fenix has also been granted the option to acquire Twin Peaks for $1 if
less than 100kt is shipped within 18 months of the effectuation of the DOCA. Fenix considers the DOCA a positive
outcome for the Company.
Refer to the Fenix ASX announcement dated 20 November 2023, and the June 2024 quarterly activities report for further
information.
ACQUISITION AND DISPOSAL OF THE EXTENSION HILL MINING ASSETS AND LIABILITIES
In July 2023, Fenix acquired the residual assets, liabilities, rights and obligations relating to the decommissioned
Extension Hill haematite operation from MGX. The assets Fenix acquired at the completed Extension Hill Iron Ore Mine
consisted of a large-scale crushing and screening plant, associated equipment, and interests in an operational 138 bed
mining camp, which were all on long-term care and maintenance following the completion of mining activities by MGX
at Extension Hill in early 2021. As part of the transaction, Fenix also assumed rehabilitation obligations at Extension Hill
which had been provisioned in MGX’s accounts for approximately A$5 million.
In November 2023, Fenix successfully completed the sale of residual Extension Hill assets, liabilities, rights and
obligations to Terra Mining and Extension Hill Pty Ltd for consideration of up to A$2 million and the assumption by the
purchasers of historic rehabilitation obligations valued at approximately A$5 million. The consideration of A$2 million
will be received by Fenix as A$250,000 on first shipment of ore (received in March 2024) and a royalty of A$0.50 per
tonne sold.
For further information regarding the sale transaction, refer to the ASX Announcements dated 29 September 2023 and
6 November 2023.
OTHER MINING TENEMENTS
Fenix holds a number of mining tenements available for further exploration as well as to facilitate activities across its
existing operations. Refer to the tenements section in this report for further information regarding tenements held.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 7 -
LOGISTICS
NEWHAUL ROAD LOGISTICS
Health & Safety Performance
During the year ended 30 June 2024, Newhaul Road Logistics recorded 3 LTIs across its operations. Compliance and
safety are always front and centre for Newhaul Road Logistics, with chain of responsibility and heavy vehicle national
law compliance a core competency. Newhaul Road Logistics goes above and beyond to ensure that its policies,
procedures and systems are forever compliant.
Haulage Performance
During the year ended 30 June 2024, Newhaul Road Logistics hauled 1,443,411 wmt of iron ore from Fenix’s Iron Ridge
operations to the Company’s on-wharf storage facilities at Geraldton Port. In addition, Newhaul Road Logistics hauled
third-party product from a third-party shed located in close proximity to the Geraldton Port, to facilitate a third-party
port services contract.
Newhaul Road Logistics expanded its fleet during the year to support the planned developments at the Shine Iron Ore
Mine, the Beebyn-W11 Iron Ore Mine, Ruvidini inland port and in anticipation of securing additional third-party haulage
contracts.
A$70m Haulage and Logistics Contract with Gold Valley
In March 2024, the Company announced that Newhaul had secured a A$70m haulage and logistics contract with Gold
Valley, an iron ore producer with existing operations in the Mid-West, whereby Newhaul was appointed as haulage and
logistics services provider for the transport of 3Mt of iron ore extracted from Gold Valley’s Mid-West operations,
delivered by Gold Valley to the Ruvidini inland port and then:
• Hauled by Newhaul Road Logistics to Newhaul Port Logistics’ facilities at Geraldton Port; and
• With Newhaul Port Logistics being responsible for the handling and storage of Gold Valley’s ore from delivery at
the Geraldton Port up to the point the product has been loaded onto ocean-going vessels for export.
The contract covers up to a three-year period which is due to commence from the date the Ruvidini inland port has been
recommissioned for use, ending at the earlier of 3 years after the date of commencement of services and when the total
number of tonnes handled under the agreement reaches 3Mt. The parties may agree to extend the term by mutual
agreement.
The applicable fees payable to Fenix by Gold Valley are comprised of a combination of fixed period-based rates, fixed
and variable rates based on tonnage, capacity reservation charges, and the standard schedule of rates and tariffs
imposed by the Mid West Ports Authority (MWPA) at Geraldton Port. Based on the haulage and export of 3Mt of product
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 8 -
over a three-year term, the combination of the fixed and variable fees and charges for haulage and port logistics services
will generate more than A$70 million in revenue for the Group.
Prior to commencement of services, Gold Valley is to provide Newhaul with upfront cash consideration of approximately
A$1.4m, to be used to fund the required capital expenditure at the Ruvidini inland port which may be offset against the
fixed fees payable under the agreement. Fenix will be entitled to retain possession of security by way of unconditional
bank guarantee, intended to cover three-months’ expected service fees and subject to escalation per standard rise and
fall measures. Gold Valley will be subject to customary take-or-pay provisions enforced by the MWPA for minimum
throughput tonnages shipped through Geraldton Port.
Refer to the ASX announcement dated 14 March 2024 for further information.
RUVIDINI INLAND PORT
Fenix commenced construction of the Ruvidini inland port terminal to support the increased logistics and port services
volumes. Fenix’s landholding at Ruvidini, located approximately 100 kilometres to the east of the Geraldton Port, covers
significant acreage which was originally developed and used for storage and staging of various bulk materials prior to rail
haulage to Geraldton Port. The land is accessible by road or by rail, with the siding connection providing access to the
Geraldton Rail network.
The inland port will provide Fenix the ability to moderate the timing surrounding tonnages shipped through Fenix’s
Geraldton Port facilities, improving efficiency by reducing bottlenecks and providing storage of iron ore materials for
minimal cost.
RUVIDINI AND PERENJORI RAIL SIDINGS
In July 2023, Fenix acquired MGX’s Mid-West rail assets located at Ruvidini and Perenjori. The rail assets include the
respective rail sidings, associated land and infrastructure, which provide an opportunity for higher volumes, and
flexibility for increased accessibility and efficiency of haulage to the Geraldton Port. Both sites have historically been
utilised as a cost-effective location for product assembly, including blending. Since acquisition, Newhaul commenced a
detailed evaluation of the potential use of the rail sidings, with ongoing work planned in conjunction with the Ruvidini
inland port development aimed at extending Newhaul’s logistics offering to include rail haulage solutions as a means to
bolster future revenue opportunities for both Fenix-owned product as well as third-party producers seeking to export
through Geraldton Port.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 9 -
PORT SERVICES
NEWHAUL PORT LOGISTICS
Health & Safety Performance
During the year ended 30 June 2024, Newhaul Port Logistics recorded no LTIs across its operations.
Operational Performance
During the year ended 30 June 2024, Newhaul Port Logistics shipped a total of 3,276,460 wmt of iron ore via the
Company’s on-wharf storage facilities at Geraldton Port. This consisted of 1,463,041 wmt of product from the Iron Ridge
mine, 59,275 wmt from the Twin Peaks mine and 1,754,144 wmt of product on behalf of third-party customers.
The Company expects to continue to boost export volumes during the upcoming financial year as a result of the Gold
Valley contract noted above, as well as through shipment volumes from the Shine Iron Ore Mine and Beebyn-W11
deposit that are planned to commence sales during the upcoming financial year.
GROUP FINANCIAL PERFORMANCE
The Group made a net profit after tax of A$33,637,018 for the financial year ended 30 June 2024 (30 June 2023:
A$29,253,182).
At 30 June 2024, the Group had net assets of A$166,340,303 (30 June 2023: A$124,837,216) and cash assets of
A$77,118,325 (30 June 2023: A$76,328,189).
Net operating cash flows for the year were A$70.2m (FY23: A$16.4m) and included:
•
Corporate tax payments of A$10.2m made during the year, net of a $6.7m corporate tax refund associated with
the FY23 tax year;
•
Royalty payments of A$18.9m made during the year, inclusive of State and third-party royalties;
•
A cash outflow of US$0.9 million (~A$1.4 million) in Q3 2023 related to prior year quotation period adjustments;
and
•
Net cash outflows of A$8.4m in relation to hedging activities.
Net operating cash flows for the year did not include sales receipts of ~A$14.4m for the last two shipments of the year
as the funds for these shipments were received in early July 2024.
DIVIDEND POLICY
Fenix’s dividend policy states: "Fenix will consider the declaration of a dividend on an annual basis based on the full
financial year profitability of the Company and with regard to the future funding requirements of the business and the
availability of franking credits."
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 10 -
Based on the budgeted future funding requirements of the current expansion of the Company’s production base, and
the potential for additional funding requirements of further growth opportunities, the Board has chosen not to declare
a final dividend for FY24.
The Board is committed to maintaining a robust balance sheet that supports the future funding requirements of the
Company. The dividend policy remains in place without amendment and the Company remains committed to rewarding
shareholders by the payment of an annual dividend when it is appropriate to do so.
CORPORATE ACTIVITIES
Hedging
Fenix has an active hedging program which is designed to manage iron ore price risk and protect the Company’s strong
operating margins. These hedging arrangements are structured as forward sales contracts facilitated by Macquarie Bank
Limited and are based on the Monthly Average Platts TSI 62 Index converted to AUD for the relevant month. Cash
settlement under the hedge contracts occurs 5 business days after the end of each month. During the year, Fenix took
advantage of a short-term iron ore price increases to expand the Company’s hedge book. Hedges in place during the
year included:
• 50,000 dmt of iron ore per month from July 2023 through to August 2023 at a fixed price of A$170.10/dmt;
• 60,000 dmt of iron ore per month from September 2023 through to December 2023 at a fixed price of
A$170.10/dmt; and
• 50,000 dmt of iron ore per month from January 2024 through to June 2024 at a fixed price of A$170.25/dmt.
As at 30 June 2024, the Company had the following hedges in place:
• 50,000 dmt of iron ore per month from July 2024 through to September 2024 at a fixed price of A$170.80/dmt;
and
• 20,000 dmt of iron ore per month from October 2024 through to December 2024 at a fixed price of A$168.75/dmt.
The sale of iron ore under such hedge instruments is accounted for using the ‘own use exemption’ under AASB 9 Financial
Instruments and as such all hedge revenue is recognised in the Statement of Profit or Loss and no fair value adjustments
are subsequently made to sales yet to be delivered under the hedging program.
Quotation Period Adjustments
Market iron ore prices declined slightly during July/August 2023, before improving markedly to peak at around US$144/t
in early January 2024. As a result, quotation period price adjustments arising from the prior year’s last quarter shipments
(i.e. shipments during April to June 2023) resulted in a total cash outflow of US$0.9 million (~A$1.4 million) during July-
September 2023.
Market iron ore prices declined sharply during January – April 2024, reaching a low of around US$98/t in early April 2024
before recovering to around US$107/t at 30 June 2024. In accordance with Fenix’s accounting policy, a A$3.2m payable
was recognised as at 30 June 2024, in relation to estimated quotation period price adjustments on outstanding
shipments.
Capital Structure
During the year ended 30 June 2024, the Company issued a total of ~60 million fully paid ordinary shares in the capital
of the Company, as well as Performance Rights and options, as follows:
• In July 2023, Fenix issued 60 million new shares and 25 million options to MGX as part of the MGX acquisition.
Refer to the ASX announcement dated 24 July 2023 for full details.
• In July 2023 and January 2024, Fenix issued a total of 7 million options to its professional advisers as payment for
services. Refer to the ASX announcements dated 24 July 2023 and 5 January 2024 for further details.
• In January 2024, Fenix issued a total of 31,933,487 Performance Rights to Executive Directors and key
management under the Company’s Long Term Incentive Plan. Refer to the ASX announcement dated 5 January
2024 for further details.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 11 -
• In January 2024, Fenix issued 456,000 bonus shares to 114 staff and contractors to reward them for their
commitment and loyalty and recognising the Company’s excellent performance during 2023. Refer to the ASX
announcement dated 12 January 2024 for further details.
Fenix inclusion in the ASX All Ordinaries Index
On 1 March 2024, S&P Dow Jones Indices announced its quarterly rebalances of relevant S&P/ASX indices. Fenix was
included in the ASX All Ordinaries Index which comprises a weighted basket of the 500 largest eligible companies listed
on the ASX. Inclusion in such major indices typically yields the benefit of greater investor interest and can result in greater
liquidity and higher volume of shares traded.
Funding support to Athena Resources Limited (Athena)
On 1 March 2024, Fenix announced that it had reached an agreement to provide funding support of up to A$1m to
Athena by way of a subscription for convertible notes in two tranches. Fenix provided funding of A$320k in March 2024
in respect of the first tranche, which enabled Athena to release a scoping study on 20 May 2024 (refer to Athena ASX
announcement dated 20 May 2024).
The issue of the second tranche of A$680k in convertible notes was approved by Athena shareholders on 23 May 2024.
Subsequent to 30 June 2024, Fenix subscribed for the second tranche of convertible notes and Mr John Welborn and Mr
Garry Plowright joined the Board of Athena as Non-Executive Chairman and Non-Executive Director respectively (refer
to Athena ASX announcement dated 25 July 2024). Athena is investigating the opportunity to leverage Fenix’s capabilities
and has commenced a comprehensive review of operations, strategy and funding arrangements. It is expected that the
review will result in a restructure and the appointment of a new Chief Executive Officer who will be tasked with advancing
a focused strategy for the exploration and development of the Byro Magnetite Project, with potential collaboration with
Fenix to be investigated.
Fenix Community Contribution
Fenix continued to invest in innovative youth training programs such as the Newhaul Kickstart Training Academy and
other local business partnerships and community activities. The Company retained its naming rights of the Fenix
Geraldton Buccaneers – a successful franchise in the National Basketball League NBL1 West conference. During the
period, Fenix was selected as a Finalist for AMEC’s 2023 Community Contribution Award for our Fenix Connections
program.
Leadership Team
During the financial year, Fenix further bolstered its management team via a number of key appointments:
• Iron Ridge: As part of succession planning to facilitate the planned retirement of Mr Chris Tuckwell, Mr Scott
Pileggi assumed the position of GM Mining at Iron Ridge during the year. Scott is a qualified Mining Engineer,
having joined Fenix from MACA where he worked for more than ten years, most recently as a Project / Mine
Manager.
• Shine: Mr Reece Olney was appointed as General Manager at the Shine iron ore mine. Reece previously operated
as the General Manager of both the Extension Hill and Shine mines whilst they were owned and operated by
MGX.
• Newhaul Port Logistics: Mr Jamie Jones was appointed as Port Services Manager. Jamie is a licenced electrician,
having successfully operated Champion Bay Electrical, Fenix’s outsourced port services management partner.
• Projects: Mr Goran Seat was appointed as General Manager – Projects. Goran has a Bachelor of Engineering (civil)
and a Diploma or Engineering (structural), having significant project delivery and study experience including roles
with Superior Gold, Calibre Group, Advisian and Rio Tinto. Goran will be responsible for Fenix studies and project
execution plans, notably the Beebyn-W11 project.
The Board is committed to ensure Fenix maintains an excellent senior executive leadership team and continues to
evaluate the Company’s requirements based on current activities and future growth ambitions.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 12 -
Business Development
Fenix continues to evaluate potential mining, logistics and port services opportunities aimed at increasing the Group’s
footprint in the Mid-West. Fenix is seeking to further expand the Company’s resource base so as to extend the mine-life
of existing mining, haulage and port operations and/or expand existing production volumes, either in collaboration with
third-parties and/or via the acquisition of quality mineral projects and mining infrastructure assets in the Mid-West.
Growth opportunities being considered also include existing mineral assets currently held by Fenix, including the
potential for mining of additional resources identified at both Iron Ridge Mine and Shine, with a drilling program
currently underway at Iron Ridge. Fenix is in the process of reviewing all tenements held in order to focus on optimal
capital allocation across all growth opportunities.
TENEMENTS
As at 30 June 2024, the Company’s interests in tenements are set out below:
Location
Project
Tenement
Interest
Western
Australia
Iron Ridge
M20/118-I, E20/936, L20/83, L20/84,L20/85, G20/28
100%
Western
Australia
Beebyn-W11
M51/869-I
Right to Mine 10Mt
of iron ore
Western
Australia
Shine
M59/406, M59/731, M59/421, L59/54, L59/143, L59/122,
M59/458, M59/420, M59/497, M59/380, M59/379
100% of Iron Ore
rights
Western
Australia
Pharos
E20/948, E20/953
100% of Iron Ore
rights
Western
Australia
Ruvidini
L 70/74, G 70/201, G 70/202, G 70/203,G 70/204,
G 70/205, L70/73
100%
Western
Australia
Perenjori
G 70/232, G 70/238, L70/133
100%
ANNUAL MINERAL RESOURCE AND ORE RESERVES STATEMENT
The Company carries out an annual review of its iron ore Mineral Resources and Ore Reserves as required by the ASX
Listing Rules. The review was carried out as at 30 June 2024.
IRON RIDGE
As at 30 June 2024, Iron Ridge Mineral Resources totalled 5.2 Mt at 65.3% Fe, inclusive of Ore Reserves. This represents
a 21% decrease in Mineral Resources when compared to the Mineral Resources as at 30 June 2023. Depletion in the
Mineral Resource occurred due to iron ore production, which commenced in December 2020.
Iron Ridge Mineral Resources as at 30 June 2024 – 58% Fe cut-off applied
JORC Classification
Tonnes (millions)
Fe %
Al2O3 %
LOI %
P %
SiO2 %
TiO2%
Indicated
5.0
65.5
1.93
1.60
0.04
2.55
0.09
Inferred
0.2
59.9
2.95
6.09
0.06
5.27
0.09
Total
5.2
65.3
1.97
1.76
0.04
2.65
0.09
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 13 -
Iron Ridge Mineral Resources as at 30 June 2023 – 58% Fe cut-off applied
JORC Classification
Tonnes (millions)
Fe %
Al2O3 %
LOI %
P %
SiO2 %
TiO2%
Indicated
6.3
65.3
2.04
1.66
0.04
2.68
0.09
Inferred
0.3
61.4
2.82
4.43
0.05
4.75
0.10
Total
6.6
65.1
2.07
1.78
0.04
2.77
0.09
Ore Reserves totalled 2.94 Mt at 64.8% Fe as at 30 June 2024. This represents a 29% decrease in Ore Reserves when
compared to the Ore Reserves as at 30 June 2023. Depletion in the Ore Reserve occurred due to iron ore production,
which commenced in December 2020.
Iron Ridge Ore Reserves as at 30 June 2024 – 58% Fe cut-off applied
JORC Classification
Tonnes (millions)
Fe %
Al2O3 %
LOI %
P %
SiO2 %
TiO2%
Probable
2.94
64.8
2.06
1.65
0.04
2.72
0.09
Total
2.94
64.8
2.06
1.65
0.04
2.72
0.09
Iron Ridge Ore Reserves as at 30 June 2023 – 58% Fe cut-off applied
JORC Classification
Tonnes (millions)
Fe %
Al2O3 %
LOI %
P %
SiO2 %
TiO2%
Probable
4.14
64.8
2.17
1.71
0.04
2.84
0.09
Total
4.14
64.8
2.17
1.71
0.04
2.84
0.09
Note: Tonnage figures in the above tables have been rounded and as a result may not add up to the totals quoted. The Iron Ridge Mineral Resources
were previously disclosed to ASX on 29 June 2023 and Ore Reserves on 4 November 2019.
SHINE
As at 30 June 2024, the Shine Mineral Resources totalled 15.1Mt at 58.2% Fe as outlined below and split between
Haematite and Magnetite. There was no change in the Shine Mineral Resource from the date of acquisition, announced
on 24 July 2023, to 30 June 2024.
Shine Mineral Resources as at 30 June 2024 – 50% Fe cut-off applied
JORC Classification
Tonnes (millions)
Fe %
SiO2 %
Al2O3 %
P %
Measured
5.1
59.2
8.98
1.60
0.078
Indicated
6.3
58.1
9.97
1.27
0.070
Inferred
3.6
26.9
9.58
1.18
0.063
Total
15.1
58.2
9.54
1.36
0.071
Shine Hematite – 50% Fe cut-off applied
JORC Classification
Tonnes (millions)
Fe %
SiO2 %
Al2O3 %
P %
Measured
4.3
59.3
9.06
1.73
0.083
Indicated
5.1
58.0
10.51
1.35
0.072
Inferred
0.5
56.4
12.60
1.61
0.085
Total
9.9
58.5
9.98
1.53
0.077
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 14 -
Shine Magnetite – 50% Fe cut-off applied
JORC Classification
Tonnes (millions)
Fe %
SiO2 %
Al2O3 %
P %
Measured
0.8
58.6
8.55
0.89
0.05
Indicated
1.2
58.8
7.71
0.91
0.061
Inferred
3.1
56.9
9.10
1.11
0.06
Total
5.1
57.6
8.68
1.03
0.058
BEEBYN-W11
As at 30 June 2024, the Beebyn-W11 Mineral Resources totalled 20.5Mt at 61.3% Fe as set out below. As announced on
3 October 2023, Fenix has secured a right to mine up to 10Mt from Beebyn-W11. There was no change in the Beebyn-
W11 Mineral Resources from the date of acquisition of the right to mine, announced on 3 October 2023, to 30 June
2024.
Beebyn-W11 Mineral Resources as at 30 June 2024 – 50% Fe cut-off applied
JORC Classification
Tonnes (millions)
Density (t/m3)
Fe
%
SiO2
%
Al2O3
%
LOI
%
P
%
S
%
Measured (Meas.)
13.22
3.45
61.78
3.66
2.66
2.86
0.07
0.03
Indicated (Ind.)
7.25
3.43
60.34
4.70
2.63
3.71
0.08
0.07
Meas. & Ind.
20.47
3.45
61.27
4.03
2.65
3.16
0.07
0.04
Inferred
0.90
3.02
56.38
7.75
5.62
4.54
0.11
0.01
Note: Rounding of the figures has occurred. Geological discount of 10% applied. Reported Inclusive of Ore Reserves.
ESTIMATION GOVERNANCE STATEMENT
The Company ensures that all Mineral Resources and Ore Reserves estimations are subject to appropriate levels of
governance and internal controls.
Exploration results are collected and managed by an independent competent qualified geologist. All data collection
activities are conducted to industry standards based on a framework of quality assurance and quality control protocols
covering all aspects of sample collection, topographical and geophysical surveys, drilling, sample preparation, physical
and chemical analysis and data and sample management.
Mineral Resources and Ore Reserves estimates are prepared by appropriately qualified, independent Competent
Persons. If there is a material change in the estimation of a Mineral Resources or Ore Reserves, the estimation and
supporting documentation in question is reviewed by a suitable qualified independent Competent Persons and
announced to the ASX in accordance with the Listing Rules. The Competent Persons consent to the inclusion in the report
of the matters based on their information in the form and context in which it appears.
The Company reports its Mineral Resources and Ore Reserves on an annual basis in accordance with the 2012 edition of
the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code).
COMPETENT PERSON’S STATEMENTS
The information in this report that relates to Iron Ridge Mineral Resources is based on information compiled by Mr Alex
Whishaw, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy and is a former
employee of CSA Global Pty Ltd. Mr Whishaw 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 JORC Code.
The information in this report that relates to the Processing and Metallurgy for Iron Ridge is based on and fairly
represents, information and supporting documentation compiled by Mr Damian Connelly who is a Fellow of the
Australasian Institute of Mining and Metallurgy and a full-time employee of METS Engineering Group. Mr Connelly has
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 15 -
sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the JORC Code.
The information in this report that relates to Iron Ridge Ore Reserves is based on information compiled by Mr John
Battista, a Competent Person who is a Fellow and Chartered Professional (Mining) of the Australasian Institute of Mining
and Metallurgy and is currently employed by Mining Plus (UK) Ltd. Mr Battista 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 JORC Code.
The Iron Ridge Mineral Resources and Ore Reserves Statement is approved as a whole by Mr Steve O’Grady, a Competent
Person who is a Fellow of Australasian Institute of Mining and Metallurgy and is currently employed by Intermine
Engineering Consultants. Mr O’Grady has sufficient experience relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the JORC
Code.
The information in this report that relates to the Shine Mineral Resources is based on information compiled by Ms
Elizabeth Haren, a Competent Person who is a Fellow and Chartered Professional of the Australasian Institute of Mining
and Metallurgy and member of the Australian Institute of Geoscientists. Ms Haren is employed by Haren Consulting and
is a consultant to Fenix Resources Limited. Ms Haren has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent
Person as defined in the JORC Code.
The information in this announcement relating to the Beebyn-W11 Mineral Resources is based on information compiled
by Dr Heather King, a Competent Person who is a member of the South African Council for Natural Scientific Professions
(SACNASP) and a Fellow of the Geological Society of South Africa (GSSA). Dr King is an employee of A&B Global Mining
(Pty) Ltd; a sub-consultant of ResourcesWA Pty Ltd. Dr King has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent
Person as defined in the JORC Code.
The Company confirms in relation to the above Mineral Resources and Ore Reserves that it is not aware of any new
information or data that materially affects the information included in the relevant market announcement and all
material assumptions and technical parameters underpinning the estimates in the relevant market announcements
continue to apply and have not materially changed. In relation to the Iron Ridge production target and forecast financial
information, the Company confirms that all material assumptions underpinning the production target, and the forecast
financial information derived from the production target continue to apply and have not materially changed since the
original announcement.
The Annual Mineral Resources and Ore Reserves Statement is based on and fairly represents the information and
supporting documentation prepared by the above-mentioned Competent Persons, and the Company has obtained
written consent to the issue of the information in the form and context in which it appears in this report.
Risk Management
This section does not attempt to provide an exhaustive list of risks faced by the Group or by investors in the Group, nor
are they in order of significance. Actual events may be different to those described.
The Group’s activities have inherent risk that may impact on the Group’s operating and financial performance and its
ability to successfully deliver on its strategy. The Board aims to manage its key business risks through appropriate risk
management techniques and internal controls. Some of the risks are however highly unpredictable and the extent to
which the Board can effectively manage them is limited. The Group’s key business risks are outlined below.
• Iron ore prices and foreign exchange rates: The majority of the Group’s revenue involves the sale of iron ore,
which is directly linked to market indices for iron ore and the US Dollar exchange rate. Iron ore market indices
fluctuate and are affected by many factors beyond the control of the Group, including the supply and demand
fluctuations for seaborne iron ore, technological advancements, forward selling activities and other macro-
economic factors. Similarly, the Group is exposed to fluctuations and volatility of the rate of exchange between
the US Dollar and the Australian Dollar, as determined by international markets. The Group’s hedging strategy is
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 16 -
designed to manage iron ore price risk and protect the Company’s strong operating margins. In addition, the
Group actively manages its liquidity position to limit the impact of foreign currency holdings on its results.
• Operational risks: The Group’s mining operations are subject to risks inherent in the mining industry, including
exploration / development activities, environmental hazards, industrial accidents, geotechnical risks, inclement /
hazardous weather conditions, etc. These risks could result in damage / loss of mineral properties, production
facilities or other properties, personal injury or death, environmental damage, delays in mining, increased
production costs, monetary losses, possible legal liability, inconsistent / unreliable ore grades, etc. The Group has
well-established operational planning procedures in place and actively manages contractors and staff to address
key risks and plan for adverse events. The Group has a culture of continuous improvement and cost management
in place, with regular employee training and evaluation procedures used to identify opportunities for
improvement and reward performance.
• Safety, health and wellbeing: The nature of the Group’s operations expose staff and contractors to potential
hazards including injury, death, disability and poor health. The Group adopts best practice safety management
systems across its businesses, adopting technology where possible to reduce the likelihood and impact of
potential events. Visible senior leadership promotes a strong culture of safety, health and wellbeing, with pro-
active measures in place to protect and care for staff.
• Social risks: Fenix’s continued ability to operate is directly reliant on maintaining its social licence to operate,
remaining compliant with key agreements / legislation and uplifting the communities in which it operates. Failure
to address these risks may result in production stoppages, loss of community support for existing operations /
new projects and failure to attract sufficient staff. Fenix has long-established relationships of trust with the
communities in which it operates. Fenix regularly engages with Wajarri Yamaji leadership to ensure that Fenix
understands and respects the cultural heritage in the Mid-West and supports a number of businesses and
initiatives in the region in recognition of its responsibility to its stakeholders.
• Liquidity: The Group’s ability to execute on its strategy is reliant on its ability to maintain sufficient working capital
available to deploy towards existing and new projects, without which could potentially cause the Group to
unnecessarily delay / forego new projects as well as the closure of existing operations. Fenix has access to
appropriate facilities and cash reserves to ensure that it can continue to fund both its existing operations as well
as its portfolio of growth projects, with all new investments subject to the Group’s capital allocation processes.
Fenix has firm offtake agreements in place with blue-chip customers, adhering to strict payment terms to ensure
that current operations generate cash in line with business expectations.
• New project developments: Fenix is currently undertaking a number of growth projects aimed at transforming
the nature of the Group. Should the Group fail to properly plan and execute these projects, this could result in
significant cost overruns and losses. Fenix utilizes a mix of internal staff and reputable consultants / contractors
to ensure that new projects are adequately evaluated up front and executed in accordance with approved plans.
• Environmental risks: Fenix recognizes the potential impact of climate change across its operations, including
catastrophic changes to its operating environment, financial penalties and loss of investor support. Fenix has
active programs in place to reduce its environmental footprint, including measures aimed at reducing its usage
of fossil fuels, environmental emissions, vibration management and compliance monitoring across its operations.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 17 -
DIRECTORS
The Directors who held office during the year and up to the date of signing this report, unless otherwise stated, are:
• John Welborn: Executive Chairman
(appointed as Non-Executive Director 16 November 2021, transitioned to Executive Chairman on 22 October
2022)
• Craig Mitchell: Executive Director
(appointed as Non-Executive Director 1 September 2022, transitioned to Executive Director 25 October 2023)
• Garry Plowright: Independent Non-Executive Director
(appointed as Executive Director 21 November 2018, transitioned to Non-Executive Director 1 January 2021)
• Shannon Coates: Independent Non-Executive Director
(appointed 1 July 2024)
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
The significant changes in the state of affairs of the Consolidated Entity during the financial period and to the date of
this report are set out in the review of operations above.
MATTERS SUBSEQUENT TO THE END OF THE REPORTING PERIOD
No material matters have occurred subsequent to the end of the year which requires reporting on, other than those
which have been noted above or reported to the ASX.
INFORMATION ON DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL
The following information is current as at the date of this report.
Mr John Welborn
Executive Chairman
Appointed 16 November 2021
Experience
Mr Welborn is a dynamic industry leader with extensive experience in the resources
sector who was appointed Chairman of the Company in November 2021. Mr Welborn’s
experience includes the successful exploration, development and operation of
numerous mining projects in Africa and Australia and more than twenty years as a
senior executive in corporate management, finance and investment banking.
Mr Welborn holds a Bachelor of Commerce degree from the University of Western
Australia and is a Fellow of the Institute of Chartered Accountants in Australia, a Fellow
of the Australian Institute of Management and is a member of the Australian Institute
of Mining and Metallurgy and the Australian Institute of Company Directors.
Committee Memberships
Not applicable
Equity Interests
20,500,000 ordinary shares
15,000,000 performance rights
Directorships held in other
listed entities
Current directorships:
-
Non-Executive Director – Equatorial Resources from November 2020
-
Non-Executive Chairman – Orbital Corporation from March 2015
-
Non-Executive Chairman – Athena Resources Limited from July 2024
Former directorships in the previous three years:
-
Non-Executive Director – Apollo Minerals from May 2022 to October 2023
-
Managing Director and CEO – Resolute Mining – February 2015 to October 2020
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 18 -
Mr Craig Mitchell
Executive Director
Appointed 1 September 2022
Experience
Mr Mitchell founded Mitchell Corp in 1997 which became one of Australia’s largest bulk
haulage businesses before its sale to Toll Group in 2011. Mr Mitchell was awarded the
Ernst and Young Western Australian Young Entrepreneur of the Year 2006.
In 2019, Mr Mitchell founded trucking and logistics company Newhaul, which formed a
joint venture with Fenix (Newhaul Road Logistics, formerly Fenix-Newhaul), the
remaining 50% of which was acquired in July 2022. In January 2024, Fenix acquired
Newhaul.
Committee Memberships
N/A
Equity Interests
55,260,000 ordinary shares
5,000,000 performance rights
Directorships held in other
listed entities
Mr Mitchell has held no listed company directorships in the previous three years.
Mr Garry Plowright
Non-Executive Director
Appointed 21 November 2018 as Executive Director, and transitioned to Non-Executive
Director 1 January 2021
Experience
Mr Plowright is an experienced Executive with over 25 years’ experience in finance,
commercial and technical development within the mining and exploration industry,
working for some of Australia’s leading resource companies. He has been involved in
gold, base metals and iron ore exploration and mining development projects in
Australia and worldwide.
Previous experience includes the supply and logistics of services to the mining and
exploration industry including capital raising, corporate governance and compliance,
project management, mining and environmental approvals and regulations, contract
negotiations, tenure management, land access, stakeholder and community
engagement.
Mr Plowright has extensive experience in mining law and has provided services to the
industry in property acquisitions, project generation and joint venture negotiations. Mr
Plowright has held global operational and corporate roles with Gindalbie Metals Ltd,
Mt Edon Gold Ltd, Pacmin Mining, Atlas Iron Ltd, Tigris Gold (South Korea) and
Westland Titanium (New Zealand).
Committee Memberships
Member of Remuneration and Nomination Committee
Equity Interests
24,960,000 ordinary shares
Directorships held in other
listed entities
Current directorships:
-
Non-Executive Director – Hexagon Energy Materials Ltd from June 2015
-
Non-Executive Director – Athena Resources Limited from July 2024
Mr Plowright has held no other listed company directorships in the previous three
years.
Ms Shannon Coates
Non-Executive Director Appointed 1 July 2024
Experience
Ms Coates has over 30 years’ experience in corporate law and compliance. She was
most recently Managing Director of Source Governance, a national governance service
provider, and has provided governance and corporate advisory services to boards and
various committees across a variety of industries, including oil & gas, resources,
manufacturing, and technology.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 19 -
Ms Coates is a qualified lawyer, Chartered Secretary, and graduate of the AICD’s
Company Directors course. She is also currently non-executive director to Bellevue Gold
Limited, a West Australian ASX 200 gold producer, and Chairs Bellevue’s Nomination
and Remuneration Committee.
Committee Memberships
Chair of Remuneration and Nomination Committee
Equity Interests
108,000 ordinary shares
Directorships held in other
listed entities
Current directorships:
-
Non-Executive Director – Bellevue Gold Limited from May 2020
Former directorships in the previous three years:
-
Non-Executive Director – Vmoto Limited from May 2014 to May 2024
Mr Stuart Ausmeier
Chief Financial Officer
Commenced 15 August 2022 and was appointed CFO 1 September 2022
Experience
Mr Ausmeier is a Chartered Accountant and Chartered Financial Analyst with over 20
years’ finance experience. Mr Ausmeier’s most recent role prior to joining Fenix was at
an ASX-listed global engineering company, where he held multiple senior finance roles
and was employed as Group Treasurer. Prior to this, Mr Ausmeier worked at global
investment bank NM Rothschild & Sons, where he focused on strategic advisory
mandates as well as debt and equity capital market transactions across the mining
industry.
Committee Memberships
Not applicable
Equity Interests
381,358 ordinary shares
2,279,773 performance rights
Directorships held in other
listed entities
Mr Ausmeier has held no listed company directorships in the previous three years.
Company Secretary
Ms Natalie Teo
BComm, MAcc, GradDipACG
Ms Teo is an experienced company secretary and has provided corporate advisory, company secretarial, and financial
reporting services to ASX-listed, unlisted public, and private companies. A Chartered Secretary, Natalie was previously a
Senior Associate at a boutique corporate advisory firm, where she delivered company secretarial and accounting services
to both listed and unlisted entities.
Meetings of Directors
During the financial year there have been thirteen (13) meetings of Directors.
Directors’
Meetings
Number eligible to attend
Number attended
John Welborn
13
13
Craig Mitchell
13
13
Garry Plowright
13
13
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 20 -
REMUNERATION REPORT (AUDITED)
The remuneration report is set out under the following main headings:
A.
Introduction
B.
Remuneration governance
C.
Key management personnel
D.
Remuneration and performance
E.
Remuneration structure
• Directors
• Executives
F.
Executive service agreements
G.
Details of remuneration
H.
Share-based compensation
I.
Other information
This report details the nature and amount of remuneration for each Director and key management personnel of Fenix
Resources Limited.
A.
INTRODUCTION
The remuneration policies have been designed to align Director and Management objectives with shareholder and
business objectives by providing a fixed remuneration component, and offering specific short-term and long-term
incentives, based on key performance areas affecting the Group’s financial results. Key performance areas include
financial and operational performance, growth in share price and advancement of the Group’s strategic objectives. The
Company believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best
Management and Directors to run and manage the Group, as well as create goal congruence between Directors,
Executives and Shareholders.
B.
REMUNERATION GOVERNANCE
The Board retains overall responsibility for remuneration policies and practices of the Company.
The Board opted to disband the Remuneration and Nomination Committee during FY22, when the Board reduced in size
to three members. During the reporting period, the full Board undertook remuneration and nomination responsibilities,
in accordance with a Remuneration and Nomination Committee Charter. Post the end of the reporting period, following
the appointment of Ms Coates as an Independent Non-Executive Director, the Board re-established the Remuneration
and Nomination Committee.
At the 2023 annual general meeting, the Company’s remuneration report was passed by a majority of Shareholders
(97.51% by way of poll).
C.
KEY MANAGEMENT PERSONNEL
The key management personnel in this report are as follows:
Directors – Current
• John Welborn, appointed 16 November 2021
• Craig Mitchell, appointed 1 September 2022
• Garry Plowright, appointed 1 January 2021
• Shannon Coates, appointed 1 July 2024
Executive Key Management Personnel – Current
• Stuart Ausmeier, commenced 15 August 2022 and was appointed CFO 1 September 2022
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 21 -
REMUNERATION REPORT (AUDITED) (continued)
D.
REMUNERATION AND PERFORMANCE
The following table shows the gross revenue, net profits/(losses) attributable to members of the Company and share
price of the Company at the end of the current and previous four financial years. See Remuneration Structure for short-
term incentives subject to key performance indicators.
30 June 2024
$
30 June 2023
$
30 June 2022
$
30 June 2021
$
30 June 2020
$
Revenue from continuing
operations
259,203,239
196,849,504
249,168,360
114,377,844
71,730
Net profit/(loss) attributable to
members of the Company
33,637,018
29,253,182
50,694,460
49,040,926
(1,274,638)
Dividend declared
13,733,238
28,413,722
24,791,223
-
-
Share price
0.315
0.285
0.315
0.345
0.076
E.
REMUNERATION STRUCTURE
Director remuneration structure
The objective of the Group’s remuneration strategy is to ensure reward for performance is competitive and appropriate
for the results delivered. This aligns reward with the achievement of objectives and the creation of value for
shareholders, and it is considered to conform to the market best practice for the delivery of reward.
Fees and payment to Directors reflects the demands that are made on them and the responsibilities of the Directors
from time to time. The aggregate amount of fees as approved by shareholders that may be paid to Non-Executive
Directors as a whole, for the years from and including the year commencing 1 July 2021 is $500,000 per annum. Directors’
fees cover all normal Board activities. A Director may also be paid fees or other amounts as the Directors determine, if a
Director performs special duties or otherwise performs duties outside the scope of the normal duties of a Director. A
Director may also be reimbursed for out-of-pocket expenses incurred as a result of their directorship or any special
duties. Directors are able to participate, subject to any required shareholder approval, in the Company’s security
incentive plans. In order to align their interests with those of shareholders, the Directors are encouraged to hold shares
in the Company.
Security incentive plans
The Company has established a Share Loan Plan and an Employee Securities Incentive Plan (Plans) to attract Directors
and key employees with suitable qualifications, skills and experience to plan, carry out and evaluate the Company’s
Strategy and to motivate and retain those Directors and key employees. Participants in the Plans may be Directors,
employees and consultants of the Company or any of its subsidiaries or any other related body corporate of the
Company. The aim of the Plans is to allow participation in, and benefit from, the growth of the Company as a result of
the efforts of participants and to assist in motivating and retaining those key employees over the long term through the
ownership of shares in the Company.
Executive KMP remuneration structure
The Board’s policy for determining the nature and amount of remuneration for Senior Executives of the Group is set out
in the remuneration policy, which comprises the terms and conditions for Executive Directors and other Senior
Executives, as developed and approved by the Board.
All Executives receive a base salary (which is based on factors such as length of service and experience), superannuation,
fringe benefits and a combination of short-term and long-term performance incentives. The Board reviews Executive
packages annually by reference to the Group’s performance, Executive performance and comparable benchmarking
information from industry sectors and other listed companies in similar industries.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 22 -
REMUNERATION REPORT (AUDITED) (continued)
The employees of the Group receive a superannuation guarantee contribution required by the Government, which for
the 2024 financial year was 11% and from 1 July 2024 is 11.5%, and do not receive any other retirement benefits.
F.
EXECUTIVE SERVICE AGREEMENTS
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
The service agreements specify the components of remuneration, benefits and notice periods. Participation in the share
and performance rights plans are subject to the Board’s discretion. Other major provisions of the agreements relating
to remuneration are set out below. Termination benefits are within the limits set by the Corporations Act 2001 such that
they do not require shareholder approval.
Contractual arrangements with key management personnel
Executives – Current
Name
Effective date
Term of
agreement
Notice period
(individual/
company)
Salary per
annum (1)
$
Termination
payment
John Welborn, Executive Chairman
20-Oct-23
No fixed term
6 months/
12 months
650,000
12 months
Criag Mitchell, Executive Director
20-Oct-23
No fixed term
6 months/
12 months
500,000
12 months
Stuart Ausmeier, CFO
15-Aug-22
No fixed term
2 months/
2 months
360,000
2 months
1
Salary amount includes superannuation guarantee contribution.
G.
DETAILS OF REMUNERATION
Details of remuneration of the key management personnel (KMP) (as defined in AASB 124 Related Party Disclosures) of
the Company is set out below.
Remuneration of KMPs for the 2024 financial year is set out below:
Short-term benefits
Post-employment
benefits
Share- based
payments
Total
Cash salary
Non-cash
benefits
(1)
Leave
entitlement
(2)
Bonus
(3)
Superannuation
Rights /
Options (4)
$
$
$
$
$
$
$
Executive Directors and KMP
J Welborn (5)
526,771
-
32,632
-
30,050
829,184
1,418,637
C Mitchell (6)
339,044
-
37,082
-
22,625
314,631
713,382
S Ausmeier
331,875
600
24,679
90,000
28,125
73,755
549,034
Non-Executive Director
G Plowright
50,000
-
-
-
5,500
-
55,500
Total
1,247,690
600
94,393
90,000
86,300
1,217,570
2,736,553
1
Other benefits include the provision of a mobile phone allowance.
2 Amounts disclosed represent the movement in leave provisions.
3
During the year the Board proposed a short-term incentive for eligible staff and contractors.
4
Instruments granted, AASB 2 – Share-Based Payments requires the fair value at grant date of the instruments granted to be
expensed over the vesting period.
5
Mr Welborn transitioned to Executive Chairman on 22 October 2022.
6
Mr Mitchell transitioned to Executive Director on 25 October 2023.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 23 -
REMUNERATION REPORT (AUDITED) (continued)
The following table sets out each KMP’s relevant interest in fully paid ordinary shares, options and performance rights
to acquire shares in the Company, as at 30 June 2024:
Name
Fully paid ordinary shares
Performance rights
J Welborn
15,000,000
20,000,000
C Mitchell
49,990,000
10,000,000
G Plowright
26,644,972
-
S Ausmeier
381,358
1,696,056
Remuneration of KMPs for the 2023 financial year is set out below:
Short-term benefits
Post-
employment
benefits
Share- based
payments
Total
Cash salary
Non-cash
benefits (1)
Bonus (2)
Super-
annuation
Options (3)
$
$
$
$
$
Executive Directors and KMP
S Ausmeier (4)
246,522
528
1,000
25,885
26,148
300,083
J Welborn
245,714
-
-
25,800
183,064
454,578
Non-Executive Director
G Plowright
50,000
-
-
5,250
-
55,250
C Mitchell (5)
41,667
-
-
4,375
-
46,042
R Brierley (6)
259,489
186
-
15,275
-
274,950
Total
843,392
714
1,000
76,585
209,212
1,130,903
1
Other benefits include the provision of a mobile phone allowance.
2
During the year the Board proposed a short-term incentive for eligible staff and contractors.
3
Instruments granted, AASB 2 – Share-Based Payments requires the fair value at grant date of the instruments granted to be expensed over
the vesting period.
4
Mr Ausmeier commenced 15 August 2022 and was appointed CFO on 1 September 2022.
5
Mr Mitchell was appointed 1 September 2022.
6
Mr Brierley resigned 21 October 2022.
H.
SHARE-BASED COMPENSATION
Share Loan Plan
On 2 February 2022, shareholders approved the Company’s Share Loan Plan, including approval to issue up to 20,000,000
Plan Shares and the issue of up to 10,000,000 Plan Shares to Mr John Welborn.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 24 -
REMUNERATION REPORT (AUDITED) (continued)
During the year ended 30 June 2024, the following shares were on issue, issued, vested and/or lapsed to KMPs:
Grant date
Grant
value (1)
Number
granted as
remuneration
Number
vested
prior
periods
Number
vested
during
the year
Number
vested but
not yet
exercisable
Number
lapsed
during the
year
Expense
recognised
during the
year
Maximum
value yet
to expense
John Welborn – Executive Chairman
4-Mar-22 (2)
$1,833,649
10,000,000
-
-
-
-
$183,566
$1,407,838
1
The fair value of instruments is calculated as the fair value of the rights at grant date and allocated to remuneration equally over the
period from grant date over the vesting period.
2
The securities were approved on 4 March 2022 at the Company’s General Meeting.
Under AASB 2, shares issued under the Share Loan Plan are treated as options issued. The options are fair valued and
recognised as an expense over the vesting period.
Grant
date (1)
Grant
value (2)
$
Number
issued
Value per
option (3)
$
Expiry
date
Vesting
date
Number
exercised
Vested %
John Welborn – Chairman
4-Mar-22
1,833,649
10,000,000
0.1834
7-Mar-32
-
-
100%
1
The securities were approved on the 4 March 2022 at the Company’s General Meeting.
2
Value of options has been calculated in accordance with AASB 2: Share-Based Payments.
The fair value of services received in return for shares issued to Directors and employees is measured by reference to
the fair value as options granted. The estimate of the fair value of the services is measured based on a Black-Scholes
option valuation methodology. The life of the options including early exercise options are built into the option model.
The fair value of the options are expensed over the expected vesting period.
The model inputs for options granted during the year include:
Series
Exercise
price
Expiry (years)
Share price at
grant date (1)
Expected
volatility (2)
Dividend
yield
Risk free
interest
rate (3)
Option
value
(i)
$0.230
10.00
$0.235
73%
0%
2.14%
$0.1834
1
The share price has been based upon the closing shares price on grant date being 4 March 2022.
2
The expected price volatility is based on historical volatility (based on the remaining life of the option), adjusted for any expected
changes to future volatility due to publicly available information.
3
Risk free rate of securities with comparable terms to maturity.
Performance rights
The Company’s Employee Securities Incentive Plan was approved and adopted by Shareholders on 15 November 2022.
Each performance right will vest as an entitlement to one fully paid ordinary share upon achievement of certain
performance milestones. If the performance milestones are not met, the performance rights will lapse, and the eligible
participant will have no entitlement to any shares.
Performance rights are not listed and carry no dividend or voting rights. Upon exercise each performance right is
convertible into one fully paid ordinary share to rank pari passu in all respects with existing fully paid ordinary shares.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 25 -
REMUNERATION REPORT (AUDITED) (continued)
During the year ended 30 June 2024, the following rights were on issue, issued, vested and/or lapsed to KMPs:
Grant
date
Grant value (1)
$
Number
granted as
remuneration
Number
vested
during prior
periods
Number
vested
during
the year
Number
vested but
not yet
exercisable
Number
lapsed
during
the year
Expense
recognised
during the
year
Maximum
value yet
to expense
John Welborn – Executive Chairman
24-Nov-23
2,186,500
20,000,000
-
-
-
-
$645,618
$1,540,882
Craig Mitchell - Executive Director
24-Nov-23
867,000
10,000,000
-
-
-
-
$314,631
$552,369
Stuart Ausmeier – CFO
1-Dec-22
115,800
1,000,000
-
-
-
-
$44,826
$44,826
11-Oct-23
109,124
696,056
-
-
-
-
$28,929
$80,194
1
The fair value of instruments is calculated as the fair value of the rights at grant date and allocated to remuneration equally over the
period from grant date over the vesting period.
The fair value of services received in return for shares issued to Directors and employees is measured by reference to
the fair value of rights granted. The estimate of the fair value of the rights is measured based on a combination of Monte
Carlo simulation model, Parisian Barrier Model and Black-Scholes option valuation methodology. A share-based payment
expense has been recognised over the respective vesting periods.
Key inputs used in the fair value calculation of the performance rights which were on issue during the period ended 30
June 2024 were as follows:
Number
Granted
Exercise
price
Expected
vesting dates
Expiry
date
Share price
at valuation
date
Risk fee
rate
Dividend
yield
Fair value per
performance
right
Total fair
value
Grant date: 1 Dec 2022 (1)
1,000,000
$ -
1-Dec-22 to
30-Jun-25
30-Jun-27
$0.24
3.027%
20.16%
$0.1158
$115,800
Grant date: 11 Oct 2023 (2)
522,042
$ -
30-Jun-26
5-Jan-29
$0.22
3.88%
9.09%
$0.1357
$70,841
174,014
$ -
30-Jun-26
5-Jan-29
$0.22
3.88%
9.09%
$0.2200
$38,283
Grant date: 24 Nov 2023 (3)
5,000,000
$ -
30-Jun-26
5-Jan-29
$0.265
4.13%
7.69%
$0.1747
$873,500
10,000,000
$ -
30-Jun-25
5-Jan-29
$0.265
4.27%
7.69%
$0.0967
$967,000
10,000,000
$ -
30-Jun-26
5-Jan-29
$0.265
4.13%
7.69%
$0.0767
$767,000
5,000,000
$ -
30-Jun-27
5-Jan-29
$0.265
4.12%
7.69%
$0.0892
$446,000
1
Performance rights will vest on:
-
continued employment to 30 June 2025, and
-
relative total shareholder return (‘TSR’) for a three-year period relative to the TSR of each company in a peer group.
2
Performance rights will vest on:
-
522,042 Rights - 3-year vesting period to 30 June 2026 on TSR metrics against peer group
-
174,014 Rights - remaining employed or otherwise engaged by the Company (or any one of its subsidiaries) at all times for
a continuous period up to and including 30 June 2026 from the date of issue of the Performance Rights.
3
Performance rights will vest on:
-
5,000,000 vest on total shareholder return metrics against peer group over a 3-year vesting period to 30 June 2026
-
10,000,000 vest on the Company having a 20-day VWAP of $0.40 or greater prior to 30 June 2025
-
10,000,000 vest on the Company having a 20-day VWAP of $0.60 or greater prior to 30 June 2026
-
5,000,000 vest on the Company having a 20-day VWAP of $0.80 or greater prior to 30 June 2027
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 26 -
REMUNERATION REPORT (AUDITED) (continued)
Relative proportions of fixed vs variable remuneration expense
The following table shows the relative proportions of remuneration that are linked to performance and those that are
fixed, based on the amounts disclosed as statutory remuneration expense for the 2024 and 2023 financial years:
Fixed
remuneration
At risk
STI
At risk
LTI
Fixed
remuneration
At risk
STI
At risk
LTI
2024
2023
Executive Directors and KMPs
J Welborn (1)
42%
-
58%
60%
-
40%
C Mitchell (2)
56%
-
44%
100%
-
-
S Ausmeier
71%
16%
13%
91%
-
9%
R Brierley (3)
100%
-
-
Non-Executive Director
G Plowright
100%
-
-
100%
-
-
1
Mr Welborn transitioned to Executive Chairman on 22 October 2022.
2
Mr Mitchell transitioned to Executive Director on 25 October 2023.
3
Mr Brierley resigned 21 October 2022.
Reconciliation of equity instruments held by KMP
The following table sets out a reconciliation of each KMP’s relevant interest in ordinary shares and options and
performance rights to acquire shares in the Company for the 2024 financial year:
Balance at
start of year
Granted
Acquired (1)
Exercised/
Vested
Lapsed
Other
changes
Balance at
year end
Executives
J Welborn
Fully paid ordinary shares
2,200,000
-
2,800,000
-
-
-
5,000,000
Fully paid ordinary shares – Share Loan Plan
10,000,000
-
-
-
-
-
10,000,000
Performance rights
-
20,000,000
-
-
-
-
20,000,000
C Mitchell
Fully paid ordinary shares
49,990,000
-
-
-
-
-
49,990,000
Performance rights
-
10,000,000
-
-
-
-
10,000,000
S Ausmeier
Fully paid ordinary shares
4,000
-
377,358
-
-
-
381,358
Performance rights
1,000,000
696,056
-
-
-
-
1,696,056
Non-Executive Directors
G Plowright
Fully paid ordinary shares
26,644,972
-
-
-
-
-
26,644,972
1
Share acquired on market in November 2023 and December 2023.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 27 -
REMUNERATION REPORT (AUDITED) (continued)
None of the fully paid ordinary shares above are held nominally by the Directors or any other KMP.
I.
OTHER INFORMATION
Transactions with other related parties
Management services
Prior to 1 January 2024, Mr Mitchell was a director and shareholder of Newhaul Pty Ltd. Between 1 July 2023 to 31
December 2023, Newhaul Pty Ltd provided management services to Newhaul Road Logistics that resulted in an amount
of $1,521,300 (inc. GST) (30 June 2023: $2,127,903 (inc. GST)) being invoiced from Newhaul Pty Ltd and recorded in other
expenses. Refer to Note 31 for further information regarding the management services arrangement in place between
Newhaul Road Logistics and Newhaul Pty Ltd. Newhaul Pty Ltd was acquired by the Company on 1 January 2024 – refer
to Note 5 for further information.
Transactions with related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated. Other than the items noted above there have been no changes to
related party transactions since the last annual reporting date, 30 June 2023.
This concludes the Remuneration Report which has been audited.
UNISSUED ORDINARY SHARES
Unissued ordinary shares under option/right at the date of this report are 93,924,504 and broken-down as follows:
Performance rights
Issued to KMP 22,279,773
Issued to employees 6,144,731
Performance rights may be converted subject to various performance milestones.
Options
Consideration options 12,500,000
Issued to vendors 13,000,000
Options may be converted subject to various performance milestones.
Milestone consideration shares
To potentially be issued to vendors 40,000,000
Milestone consideration shares may be issued subject to various performance milestones.
ENVIRONMENTAL REGULATIONS
The Company’s policy is to comply with, or exceed, its environmental obligations in each jurisdiction in which it operates.
No known environmental breaches have occurred.
INDEMNIFYING OFFICERS
During the financial year, the Company paid a premium in respect of a policy insuring the Company’s Directors,
Secretaries, Executive Officers and any related body corporate against a liability incurred by such a Director, Secretary
or Officer to the extent permitted by the Corporations Act 2001. The Company has entered into Deeds of Indemnity,
Insurance and Access with the Company’s Directors, Secretary and Executive Officers.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or any of the related body corporates against
a liability incurred as such an officer or auditor.
DIRECTORS’ REPORT (continued)
FENIX RESOURCES LIMITED
- 28 -
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of Fenix Resources Limited, or to intervene in any proceedings to which the Company is a party, for the purpose
of taking responsibility on behalf of Fenix Resources Limited for all or part of these proceedings.
No proceedings have been brought or intervened in on behalf of Fenix Resources Limited with leave of the Court under
section 237 of the Corporations Act 2001.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration, as required under section 307C of the Corporations Act 2001 for the year ended
30 June 2024 has been received and can be found on page 29.
AUDITOR’S REMUNERATION
During the financial year, the following fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd
and its related entities.
2024
$
2023
$
Grant Thornton Audit Pty Ltd
Audit and assurance services
Audit and review of financial statements
222,679
190,605
Grant Thornton Australia Limited
Other services
Due diligence services
-
62,887
Total remuneration
222,679
253,492
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the Group are important. The Board considers the non-
audit services the auditor independence requirements of the Corporations Act 2001 (Cth) and whether the non-audit
services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants which prevents an auditor reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing
risks and rewards. The Company did not engage or approve such non-audit services during the year ended 30 June 2024.
This report is signed in accordance with a resolution of the Board of Directors made pursuant to section 295(5) of the
Corporations Act 2001.
Signed in accordance with a resolution of the directors
John Welborn
Chairman
Perth
28 August 2024
Grant Thornton Audit Pty Ltd
Level 43 Central Park
152-158 St Georges Terrace
Perth WA 6000
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
Auditor’s Independence Declaration
To the Directors of Fenix Resources Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Fenix Resources Limited for the year ended 30 June 2024, I declare that, to the best of my knowledge and
belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B P Steedman
Partner – Audit & Assurance
Perth, 28 August 2024
- 29 -
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 30 -
Notes
2024
$
2023
$
Revenue
1
259,203,239
196,849,504
Cost of sales
2
(199,372,407)
(158,366,932)
Gross profit
59,830,832
38,482,572
Other income
3
5,837,856
876,523
Other expenses
6
(16,829,146)
(8,440,553)
Profit on joint ventures
2,925
7,721,335
Operating profit
48,842,467
38,639,877
Finance income
2,017,661
1,260,870
Finance costs
7
(2,270,014)
(1,358,728)
Profit before income tax expense
48,590,114
38,542,019
Income tax expense
10
(14,953,096)
(9,288,837)
Profit after income tax expense for the year attributable
to the owners of the Group
33,637,018
29,253,182
Other comprehensive income
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for year attributable to
owners of Fenix Resources Limited
33,637,018
29,253,182
Basic earnings per share (cents per share)
26
4.87
5.11
Diluted earnings per share (cents per share)
26
4.28
4.77
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
FENIX RESOURCES LIMITED
- 31 -
Notes
2024
$
2023
$
Current Assets
Cash and cash equivalents
12
77,118,325
76,328,189
Inventories
9
7,493,685
8,293,921
Other current assets – term deposit
13
232,166
40,000
Trade and other receivables
13
22,406,888
13,644,578
Current tax receivable
-
2,735,404
Financial asset
14
328,136
10,761
107,579,200
101,052,853
Non-Current Assets
Mine properties, property, plant and equipment
15
115,867,498
57,924,158
Capitalised exploration and evaluation expenditure
16
12,118,975
1,157,474
Intangible assets
17
26,165,349
26,874,368
Loan receivable
14
5,000,000
-
Interest in joint venture
44,280
11,977
159,196,102
85,967,977
Total Assets
266,775,302
187,020,830
Current Liabilities
Trade and other payables
18
30,520,903
21,267,508
Provisions
19
1,738,131
887,818
Provision for income tax
7,649,391
-
Borrowings and lease liabilities
20
13,330,191
8,795,003
53,238,616
30,950,329
Non-Current Liabilities
Trade and other payables
18
500,000
500,000
Provisions
19
6,801,451
2,134,225
Borrowings and lease liabilities
20
28,589,444
12,572,652
Deferred tax liability
11
11,305,488
16,026,408
47,196,383
31,233,285
Total Liabilities
100,434,999
62,183,614
Net Assets
166,340,303
124,837,216
Equity
Issued capital
22a
86,348,756
68,018,010
Other equity
22b
1,911,225
1,911,225
Reserves
22c
4,041,430
772,869
Retained earnings
22d
74,038,892
54,135,112
Total Equity
166,340,303
124,837,216
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 32 -
Issued
Capital
$
Other
Equity
$
Reserves
$
Retained
Earnings
$
Total
$
Balance at 1 July 2022
52,166,431
-
2,759,182
53,295,652
108,221,265
Profit for the year
-
-
-
29,253,182
29,253,182
Other comprehensive
income
-
-
-
-
-
Total comprehensive income
for the year
-
-
-
29,253,182
29,253,182
Transactions with owners in their capacity as owners
Dividend payable
-
-
-
(28,413,722)
(28,413,722)
Share issue costs
(33,183)
-
-
-
(33,183)
Acquisition of Newhaul
Road Logistics (formerly
Fenix-Newhaul)
8,550,000
6,433,987
-
-
14,983,987
Share-based payments
-
-
825,687
-
825,687
Transfer of reserves
2,812,000
-
(2,812,000)
-
-
Transfer of other equity
4,522,762
(4,522,762)
-
-
-
Balance at 30 June 2023
68,018,010
1,911,225
772,869
54,135,112
124,837,216
Profit for the year
-
-
-
33,637,018
33,637,018
Other comprehensive
income
-
-
-
-
-
Total comprehensive income
for the year
-
-
-
33,637,018
33,637,018
Transactions with owners in their capacity as owners
Dividend payable
-
-
-
(13,733,238)
(13,733,238)
Share issue costs
(53,254)
-
-
-
(53,254)
Acquisition of Mount
Gibson assets (Note 4)
18,270,000
-
1,225,000
-
19,495,000
Share-based payments
-
2,157,561
-
2,157,561
Transfer of reserves
114,000
-
(114,000)
-
-
Balance at 30 June 2024
86,348,756
1,911,225
4,041,430
74,038,892
166,340,303
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 33 -
Notes
2024
$
2023
$
Cash flows from operating activities
Receipts from customers
259,310,020
192,576,084
Payments to suppliers and employees
(181,533,488)
(147,546,410)
Insurance payout
262,396
-
Interest received
2,291,835
984,941
Interest paid
-
(9,387)
Income taxes paid
(10,168,353)
(29,576,547)
Net cash provided by operating activities
33
70,162,410
16,428,681
Cash flows from investing activities
Payments for plant and equipment
(20,186,753)
(4,090,603)
Payments for exploration and evaluation
(6,059,066)
(18,000)
Proceeds from sale of plant and equipment
1,866,553
1,999,483
Government grants received
25,000
225,000
Net (payment)/proceeds in term deposits
(192,166)
250,000
Loans from/(to) other entities
(5,308,004)
15,935
Net cash outflow from acquisitions
(10,280,976)
(2,821,300)
Net cash used in investing activities
(40,135,412)
(4,439,485)
Cash flows from financing activities
Asset finance interest paid
(1,674,681)
-
Repayment of loans and borrowings
(12,495,296)
(9,312,952)
Payments for lease liabilities
(726,487)
(144,473)
Dividends paid
(13,728,168)
(28,237,409)
Net cash used in financing activities
(28,624,632)
(37,694,834)
Net increase/(decrease) in cash held
1,402,366
(25,705,638)
Cash and cash equivalents at the beginning of the year
76,328,189
101,675,767
Effect of exchange rates on cash holdings in foreign currencies
(612,230)
358,060
Cash and cash equivalents at the end of the year
12
77,118,325
76,328,189
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 34 -
1
REVENUE
2024
$
2023
$
Sale of iron ore
240,140,404
196,849,504
Port services
19,062,835
-
Total revenue
259,203,239
196,849,504
Sale of Iron Ore
The Group primarily generates revenue from the sale of iron ore. Revenue is recognised at a point in time when control
of the promised goods or services passes to the customer. In most instances, control passes when the goods are delivered
to a destination specified by the customer, typically on board the customer's appointed vessel. The amount of revenue
recognised reflects the consideration to which the Group expects to be entitled in exchange for the goods.
Fenix has an active hedging program which is designed to manage iron ore price risk and protect the Company’s operating
margins. These hedging arrangements are structured as swap contracts facilitated by Macquarie Bank Limited and are
based on the Monthly Average Platts TSI 62 Index converted to AUD for the relevant month. Cash settlement under the
hedge contracts occurs 5 business days after the end of each month. Hedges in place during the year included:
-
50,000 dmt of iron ore per month from July 2023 through to August 2023 at a fixed price of A$170.10/dmt;
-
60,000 dmt of iron ore per month from September 2023 through to December 2023 at a fixed price of
A$170.10/dmt; and
-
50,000 dmt of iron ore per month from January 2024 through to June 2024 at a fixed price of A$170.25/dmt.
As at 30 June 2024, the Company had the following hedges in place:
-
50,000 dmt of iron ore per month from July 2024 through to September 2024 at a fixed price of A$170.80/dmt; and
-
20,000 dmt of iron ore per month from October 2024 through to December 2024 at a fixed price of A$168.75/dmt.
The Group uses derivative financial instruments such as iron ore forward contracts to manage the risk associated with
commodity price. The sale of iron ore under such hedge instruments is accounted for using the ‘own use exemption’
under AASB 9 Financial Instruments and as such all hedge revenue is recognised in the Statement of Profit or Loss and no
fair value adjustments are subsequently made to sales yet to be delivered under the hedging program.
The Group’s sales contracts include an underlying embedded derivative, whereby the value of the trade receivables under
the contracts, post initial recognition, is linked to market-based pricing indices. Refer to Note 36(d) for further details.
Port Services
Newhaul Port Logistics provides in-loading access via truck or rail for secure storage at Fenix’s +400,000 tonnes on-wharf
storage facilities (comprising 3 sheds) at the Geraldton Port and offering direct ship loading access and services. Revenue
is recognised over time when the services are performed on behalf of the customer.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 35 -
2
COST OF SALES
2024
$
2023
$
Cash costs of production
173,604,133
140,639,486
Inventory product movement
1,364,183
2,418,121
Depreciation and amortisation (1)
24,404,091
15,309,325
Total cost of sales
199,372,407
158,366,932
1
Refer to Note 36 (l) and 36 (m) for details on the Group's accounting policies for depreciation and amortisation.
Costs of production
Costs of production includes ore and waste mining costs, processing costs, logistics costs, shipping costs and site
administration and support costs.
Inventory product movement
Inventory product movement represents the movement in inventory ore stockpiles.
3
OTHER INCOME
4
ASSET ACQUISITION
Fenix entered into an agreement with Mount Gibson Iron Limited (MGX) to acquire the assets of its Mid-West operations
as follows:
-
Exploration and mining assets and rehabilitation liabilities of Shine Iron Ore Project (Shine assets);
-
Mining assets and other property, plant and equipment and rehabilitation liabilities of Extension Hill Project
(Extension Hill assets);
-
Freehold land, rail sidings and relevant infrastructure of Ruvidini and Perenjori (Ruvidini assets and Perenjori
assets respectively); and
-
Sheds, port assets, including commercial agreements, vehicles and other plant and equipment (Port assets).
The transaction was deemed completed after the close of business on 21 July 2023.
An analysis of the transaction indicated that it was not a business combination within the scope of AASB 3 Business
Combinations. As the assets acquired consist of both tangible and intangible assets, and each accounting standard defines
different approaches in recognising the assets acquired, Fenix's management has determined that it would account for
the transaction by applying the acquisition method, the accounting and reporting requirements for the acquirer, as
established by AASB 6 Exploration for and Evaluation of Mineral Resource, AASB 116 Property, Plant and Equipment and
AASB 138 Intangible Assets.
2024
$
2023
$
Gain on extinguishment of creditors
14
3,398,471
-
Other income
2,439,385
876,523
Total other income
5,837,856
876,523
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 36 -
4
ASSET ACQUISITION (continued)
Consideration for the Transaction ('Purchase Price') was as follows:
-
$10,000,000 cash consideration;
-
60,000,000 ordinary shares issued after business close on 21 July 2023;
-
12,500,000 5-year options exercisable at $0.25 per share; and
-
12,500,000 5-year options exercisable at $0.30 per share.
Option consideration
The fair value of consideration was calculated by reference to the fair value of the options issued in connection with the
acquisition in accordance with AASB 2, see Note 24. Details of the purchase consideration are shown below.
Notes
21 July 2023
$
Cash consideration
10,000,000
Share consideration
22
18,270,000
Options
-
Tranche 1
24
675,000
-
Tranche 2
24
550,000
Total consideration
29,495,000
Fair value of identifiable assets and liabilities acquired
Group of assets
Asset type
Note
21 July 2023
$
Shine assets
Exploration and evaluation
16
4,307,819
Plant and equipment
15
958,417
Rehabilitation provision
19
(4,266,236)
Extension Hill assets
Mine properties, property, plant and equipment
15
5,169,408
Rehabilitation provision
19
(4,669,408)
Ruvidini assets
Rail infrastructure
15
1,489,080
Land
15
410,920
Perenjori assets
Rail infrastructure
15
196,934
Land
15
453,066
Port assets
Plant and equipment
15
22,568,539
Intangible assets
17
2,876,461
Assets acquired
29,495,000
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 37 -
5
BUSINESS ACQUISITION
On 1 January 2024, Fenix acquired the ordinary share capital and voting rights of Newhaul Pty Ltd. Mr Mitchell (Executive
Director) was a director and shareholder of Newhaul Pty Ltd prior to acquisition.
The acquisition of Newhaul has been treated as a business combination and has been accounted for in accordance with
AASB 3 Business Combinations.
Details of the purchase consideration, the net assets acquired, and goodwill are shown in the following tables. In
consideration for the equity in Newhaul, Fenix paid $800,000 cash consideration.
Fair value of identifiable assets and liabilities acquired
Fair value of identifiable assets and liabilities acquired are as follows:
1 January 2024
$
Cash and cash equivalents
519,024
Other current assets
22,658
Property, plant and equipment
110,040
Other non-current assets
29,378
Trade and other payables
(242,217)
Provisions – current
(198,588)
Provisions – non-current
(52,067)
Net assets acquired
188,228
Goodwill on acquisition
611,772
Consideration paid
800,000
Accounting policies - Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
-
fair values of the assets transferred;
-
liabilities incurred to the former owners of the acquired business;
-
equity interests issued by the Group;
-
fair value of any asset or liability resulting from a contingent consideration arrangement; and
-
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The group recognises any non-controlling
interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest's
proportionate share of the acquired entity's net identifiable assets.
Acquisition-related costs are expensed as incurred.
Goodwill is recorded as the excess of the:
-
consideration transferred;
-
amount of any non-controlling interest in the acquired entity; and
-
acquisition-date fair value of any previous equity interest in the acquired entity,
over the fair value of the net identifiable assets acquired. If those amounts are less than the fair value of the net
identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 38 -
5
BUSINESS ACQUISITION (continued)
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to
their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being
the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and
conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirers previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such
remeasurement are recognised in profit or loss.
6
OTHER EXPENSES
Notes
2024
$
2023
$
Administrative expense
Advertising and marketing costs
413,444
375,845
Advisory costs
3,497,356
1,317,929
Compliance costs
405,028
428,886
Consultancy costs
283,732
160,987
Office costs and management fees
3,894,887
2,645,678
Employee benefits expense
2,746,195
1,521,286
Foreign exchange loss/(gain)
609,577
(343,340)
Other administrative expenses
928,219
745,147
Share-based payments expense
24
1,898,870
825,687
Depreciation
15
3,117
-
Corporate advisory costs
2,148,721
762,448
Total other expenses
16,829,146
8,440,553
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 39 -
6
OTHER EXPENSES (continued)
A reconciliation of employee benefits expense is as follows:
2024
$
2023
$
Employee benefits expense
Wages and salaries
4,273,928
3,140,933
Superannuation
336,122
308,879
Provision for annual leave
179,644
25,149
Other costs
447,771
269,033
Total employee benefits expense
5,237,465
3,743,994
Employee benefits included in
Costs of production
2,491,270
2,222,708
Administrative expenses
2,746,195
1,521,286
Total employee benefits expense
5,237,465
3,743,994
7
FINANCE COSTS
2024
$
2023
$
Finance costs
Interest on Right-of-use assets
418,927
26,309
Unwinding of provisions
81,091
95,598
Loss on lease disposal
10,307
-
Interest expense
1,716,600
1,177,053
Other borrowing costs
43,089
59,768
Total finance costs
2,270,014
1,358,728
8
OPERATING SEGMENTS
At the end of the year, the Group had three reportable segments, being the Mining, Logistics and Port Services businesses.
During the prior year, the Group has three reportable segments, being the Iron Ridge Project, Newhaul Road Logistics
and the Trucking Joint Venture. The change in segments was made to more accurately reflect how the business is
managed and has taken into consideration all recent business combinations and asset acquisitions.
This internal reporting framework is the most relevant to assist the Board with making decisions regarding the Group and
its production activities.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 40 -
8
OPERATING SEGMENTS (continued)
For the year ended 30 June 2024:
Mining
$
Logistics
$
Port services
$
Intersegment
amounts
$
Other
$
Total
$
Revenue from
external sources
240,175,306
-
19,027,933
-
-
259,203,239
Intersegment
revenue
-
72,484,102
15,045,241
(87,529,343)
-
-
Cash costs of
production
(198,295,893)
(40,837,018)
(22,000,565)
87,529,343
-
(173,604,133)
Inventory product
movement
(1,364,183)
-
-
-
-
(1,364,183)
Depreciation and
amortisation
(7,005,863)
(14,376,983)
(3,021,245)
-
-
(24,404,091)
Gross profit
33,509,367
17,270,101
9,051,364
-
-
59,830,832
Reportable segment
profit/(loss)
38,462,328
7,674,098
5,688,869
-
(18,188,277)
33,637,018
Reportable segment
assets (1)
53,291,339
91,854,307
42,073,557
(70,499,220)
150,055,319
266,775,302
Reportable segment
liabilities
(35,897,755)
(56,011,927)
(36,384,687)
48,179,630
(20,320,260)
(100,434,999)
For the year ended 30 June 2023:
Iron Ridge Mine
$
Newhaul Road
Logistics
$
Trucking Joint
Venture
$
Intersegment
amounts
$
Other
$
Total
$
Revenue from
external sources
196,849,504
-
-
-
-
196,849,504
Segment revenue
-
58,839,420
-
(58,839,420)
-
-
Cash costs of
production
(165,361,675)
(34,117,231)
-
58,839,420
-
(140,639,486)
Inventory product
movement
(2,418,121)
-
-
-
-
(2,418,121)
Depreciation and
amortisation
(5,552,766)
(9,756,559)
-
-
-
(15,309,325)
Gross profit
23,516,942
14,965,630
-
-
-
38,482,572
Reportable segment
profit/(loss)
23,516,953
6,638,934
7,721,335
-
(8,624,039)
29,253,183
Reportable segment
assets (1)
39,621,770
83,688,504
-
-
63,710,556
187,020,830
Reportable segment
liabilities
(16,156,205)
(41,072,880)
-
-
(4,954,529)
(62,183,614)
1
Unallocated activities include cash held of $54,253,934 for the year ended 30 June 2024 and $62,441,179 for the year ended 30
June 2023.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 41 -
9
INVENTORIES
2024
$
2023
$
Ore stockpiles
5,504,680
6,868,863
Fuel, oil & additive on hand
277,143
231,371
Parts on hand
1,711,862
1,193,687
7,493,685
8,293,921
Ore stockpiles represent Iron Ore Lump and Fines extracted, that are expected to be sold at a profit. Other inventory
represents purchase costs measured on a first‐in/first‐out basis. Inventories are valued at the lower of cost and net
realisable value. At the reporting date, all inventory on hand is valued at cost.
No provision was required to write down inventories to their recoverable value at 30 June 2024 (30 June 2023: Nil).
Accounting estimates and judgements
Inventory valuation
Accounting for inventory involves the use of judgements and estimates, particularly related to the measurement and
valuation of inventory on hand within the production process. Certain estimates, including expected metal recoveries
and work in progress volumes, are calculated by engineers using available industry, engineering and scientific data.
Estimates used are periodically reassessed by the Group after considering technical analysis and historical performance.
Changes in estimates are adjusted for on a prospective basis.
Net realisable value and classification of inventory
The assessment of the net realisable value and classification of inventory involves significant judgements and estimates
in relation to timing and cost of processing, commodity prices, recoveries and the likely timing of sale of the ore produced.
A change in any of these assumptions will alter the estimated net realisable value and may therefore impact the carrying
amount of inventory.
10
TAXATION
Major components of income tax expense for the years ended 30 June 2024 and 30 June 2023 are:
2024
$
2023
$
Statement or profit or loss and other comprehensive income
Current income
Current income tax expense
20,732,983
9,907,191
Adjustments in respect of previous current income tax
(155,852)
14,116
Deferred income tax
Relating to origination and reversal of temporary differences
(5,659,051)
(568,123)
Adjustment in respect of prior year tax losses / deferred tax assets
35,016
(64,347)
Income tax expense reported in income statement
14,953,096
9,288,837
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 42 -
10
TAXATION (continued)
2024
$
2023
$
Statement of changes in equity
Deferred income tax
Capital raising costs
40,178
33,183
Income tax benefit reported in equity
40,178
33,183
Reconciliation of income tax to prima facie tax payable
Profit before income tax
48,590,114
38,542,019
Income tax expense/(benefit) at 30% (30 June 2023: 30%)
14,577,034
11,562,606
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Non-deductible expenses (non-assessable income)
564,150
(2,056,803)
Gain on formation of tax consolidated group
(37,849)
Under / over in respect of prior years
(120,836)
(50,231)
Formation of a tax consolidated group
(29,403)
(166,735)
Total income tax expense
14,953,096
9,288,837
As at 30 June 2024 the franking account balance is $21,629,277 (30 June 2023: $17,369,671).
Significant accounting judgments and estimates
Income tax classification
Judgements: The Group’s accounting policy for taxation, including royalty-related taxation, requires judgement as to the
types of arrangements considered to be a tax on income in contrast to an operating cost.
Uncertain tax matters
Judgements: Judgements apply about the application of income tax legislation and its interaction with income tax
accounting principles. These judgements are subject to risk and uncertainty, hence there is a possibility that changes in
circumstances will alter expectations, which may impact the amount of tax assets and tax liabilities, including deferred
tax, recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised.
Where the final tax outcomes are different from the amounts that were initially recorded, these differences impact the
current and deferred tax provisions in the period in which the determination is made.
Measurement of uncertain tax and royalty matters considers a range of possible outcomes, including assessments
received from tax authorities. Where management is of the view that potential liabilities have a low probability of
crystallising, or it is not possible to quantify them reliably, they are disclosed as contingent liabilities.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 43 -
11
DEFERRED TAX ASSETS AND LIABILITIES
For recognition and measurement refer to Note 10 and Note 36(f).
The composition of the Group’s net deferred tax assets and liabilities recognised in the statement of financial position
and the deferred tax expense (credited)/charged to the statement of profit or loss statement is as follows:
2024
$
2023
$
Deferred tax liabilities
Trade and other receivables
(351,053)
(221,357)
Inventory
(83,143)
-
Property, plant and equipment
(7,532,139)
(8,790,758)
Capitalised exploration and evaluation expenditure
(1,638,204)
(347,242)
Mine properties
(6,897,812)
(8,182,713)
Investments and loans
(1,817)
-
Deferred tax assets
Trade and other payables
294,136
441,956
Provisions – current
581,443
266,345
Right of use assets
2,149,261
92,193
Provisions – non-current
2,040,435
640,267
Business related costs – statement of profit or loss
23,003
29,000
Unrealised foreign exchange losses
-
(104,680)
Business related costs – equity
110,402
150,581
Net deferred tax assets/(liabilities)
(11,305,488)
(16,026,408)
The composition of the Group’s unrecognised deferred tax assets and liabilities is as follows:
2024
$
2023
$
Deferred tax assets and liabilities not recognised relate to the following:
Mine properties
(1,167,750)
(1,140,978)
Capital losses
7,415
7,415
Net deferred tax assets unrecognised
(1,160,335)
(1,133,563)
Significant accounting judgments and estimates
Deferred tax
Judgements: Judgement is required to determine the amount of deferred tax assets that are recognised based on the
likely timing and the level of future taxable profits. Judgement is applied in recognising deferred tax liabilities arising from
temporary differences in investments.
Estimates: The Group assesses the recoverability of recognised and unrecognised deferred taxes, including losses on a
consistent basis, using estimates and assumptions relating to projected earnings and cash flows as applied in the Group
impairment process for associated operations.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 44 -
12
CASH AND CASH EQUIVALENTS
(a) Risk exposure
Refer to Note 25(b) for details of the risk exposure and
management of the Group’s cash and cash equivalents.
(b) Restricted cash
The cash and cash equivalents disclosed and in the
statement of cash flows includes $832,108 which is held in
trust by the Company’s share registry for the payment of
the 2021 to 2023 financial year dividends.
(c)
Deposits at call
Deposits at call are presented as cash equivalents if they
have a maturity of three months or less. Refer Note 36(i)
for the Group’s other accounting policies on cash and cash
equivalents.
2024
$
2023
$
Cash at bank
46,868,325
46,078,189
Deposits at call
30,250,000
30,250,000
77,118,325
76,328,189
13
TRADE AND OTHER RECEIVABLES AND OTHER CURRENT ASSETS
Due to the short-term nature of the current
receivables,
their
carrying
amount
is
determined to be the same as their fair value.
Other receivables are generally due for
settlement within 30 days and are therefore
classified as current.
Refer to Note 25(b) for details of the risk
exposure and management of the Group’s
trade and other receivables.
The term deposit has a maturity of more than
three months.
2024
$
2023
$
Trade and other receivables
Trade receivables
18,112,144
9,253,341
Quotation Period Adjustments
(3,178,647)
(1,367,024)
Other receivables
6,168,150
4,553,053
Prepayments
1,206,986
773,023
Accrued interest
98,255
432,185
22,406,888
13,644,578
Other Current Assets
Term deposit
232,166
40,000
232,166
40,000
14
FINANCIAL ASSETS AND LOAN RECEIVABLE
2024
$
2023
$
Financial assets
328,136
10,761
Non-current loan receivable
5,000,000
-
5,328,136
10,761
Current financial assets outstanding at the end of the year are with Athena Resources Limited. The financial asset is
recognised at fair value through profit or loss.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 45 -
14
FINANCIAL ASSETS AND LOAN RECEIVABLE (continued)
Non-current loans are with 10M Pty Ltd.
The Company loaned 10M Pty Ltd $5 million in November 2023, In May 2024, 10M Pty Ltd was placed into voluntary
administration. With consent from the Company, 10M Pty Ltd subsequently executed a Deed of Company Arrangement
(DOCA) to enable a new proponent to acquire 10M Pty Ltd to enable recommencement of mining at Twin Peaks. The
effective date of the transactions effectuated by the DOCA has been determined as 21 June 2024, being the date all 10M
Pty Ltd creditors approved the transactions and under law the DOCA became binding on all parties.
Under the DOCA, the Company’s Ore Purchase Agreement (OPA) was varied to entitle the Company to retain 100% of
the notional profit from ore sold until the loan was repaid and then revert to 50% thereafter.
In consideration for forgoing any potential action relating to breaches of the original OPA by 10M Pty Ltd, under the terms
of the DOCA and the varied OPA:
-
the Company retained all proceeds from the completed Twin Peaks shipment;
-
the Company retained control of any iron ore stored by the Company prior to administration and obtained control
of a further 10,000 tonnes of iron ore stockpiled at the mine; and
-
any payments due by the Company to 10M Pty Ltd at the time of the DOCA were extinguished.
The impact of the above events is that the fair value of Company’s loan receivable from 10M Pty Ltd was confirmed at $5
million as at the effective date of the DOCA and a gain on extinguishment of credits and other associated items of $3.6
million has been recognised (Note 3).
During the prior year, the Group has lent money to Fenix’s joint venture partner, Schwarze Brothers Pty Ltd.
Amounts are shown as current if amounts are due for repayment within 12 months from the reporting date.
Accounting estimates and judgements
Impairment of financial assets
AASB 9 requires that credit losses on financial assets are measured and recognised using the expected credit loss (ECL)
approach. AASB 9’s impairment requirements use forward-looking information to recognise expected credit losses.
Instruments within the scope of the requirements included loans and other debt-type financial assets measured at
amortised cost and FVOCI, trade receivables, contract assets recognised and measured under AASB 15 and loan
commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit
or loss.
The Group considers a broader range of information when assessing credit risk and measuring expected credit losses,
including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of
the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
-
financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have
low credit risk (‘Stage 1’); and
-
financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit
risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date. ‘12-month
expected credit losses’ are recognised for the first category (i.e. Stage 1) while ‘lifetime expected credit losses’ are
recognised for the second category (i.e. Stage 2).
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the
expected life of the financial instrument.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 46 -
15
MINE PROPERTIES, PROPERTY, PLANT AND EQUIPMENT
Right of
Use Assets
$
Mine
Properties
$
Trucks and
Trailers
$
Land
$
Rail
Infrastructure
$
Plant and
Equipment
$
Cost
At 1 July 2023
488,658
34,329,256
34,698,010
6,478,811
-
5,848,164
Acquisitions
-
5,169,408
-
863,986
1,686,014
23,664,552
Additions
7,518,486
3,938,278
18,615,320
6,911,163
75,000
16,592,689
Disposals
(488,658)
(5,169,408)
(2,696,864)
19,801
-
(341,497)
Movement in provisions
-
(9,717)
-
-
-
-
At 30 June 2024
7,518,486
38,257,817
50,616,466
14,273,761
1,761,014
45,763,908
Accumulated depreciation, amortisation and impairment
At 1 July 2023
(207,465)
(12,657,957)
(8,862,867)
(140,723)
-
(2,049,729)
Acquisitions
-
-
-
-
-
(27,557)
Depreciation and
amortisation
(554,769)
(6,942,714)
(8,693,777)
(125,304)
-
(3,893,392)
Disposals
212,111
-
1,464,346
(19,801)
-
175,644
At 30 June 2024
(550,123)
(19,600,671)
(16,092,298)
(285,828)
-
(5,795,034)
Net book value
6,968,363
18,657,146
34,524,168
13,987,933
1,761,014
39,968,874
Total net book value
115,867,498
Mine properties include $6.75 million relating to rehabilitation provision.
Right of Use
Assets
$
Mine
Properties
$
Trucks and
Trailers
$
Land
$
Plant and
Equipment
$
Cost
At 1 July 2022
480,071
32,398,152
-
-
-
Acquisitions
-
-
29,976,706
4,899,863
3,696,101
Additions
8,587
1,778,448
8,756,519
1,578,948
2,184,289
Disposals
-
(2,004)
(4,035,215)
-
(32,226)
Movement in provisions
-
154,660
-
-
-
At 30 June 2023
488,658
34,329,256
34,698,010
6,478,811
5,848,164
Accumulated depreciation, amortisation and impairment
At 1 July 2022
(126,052)
(7,188,608)
-
-
-
Acquisitions
-
-
(5,313,053)
(45,129)
(1,124,720)
Depreciation and amortisation
(81,413)
(5,471,353)
(5,131,135)
(95,594)
(932,396)
Disposals
-
2,004
1,581,321
-
7,387
At 30 June 2023
(207,465)
(12,657,957)
(8,862,867)
(140,723)
(2,049,729)
Net book value
281,193
21,671,299
25,835,143
6,338,088
3,798,435
Total net book value
57,924,158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 47 -
15
MINE PROPERTIES, PROPERTY, PLANT AND EQUIPMENT (continued)
Significant accounting estimates and assumptions
Mine properties, property, plant and equipment
Units of production method
Where the useful life of an asset is directly linked to the extraction of ore from a mine, the asset is depreciated using the
units of production method. The units of production method results in depreciation and amortisation charges
proportional to the depletion of the estimated ore reserve of the mine. The unit of account used in the calculation is
tonnes of ore.
Other assets
Depreciation commences once the asset become available for its intended use.
All property, plant and equipment is recognised at historical cost less depreciation. Depreciation is calculated using the
either the straight‐line method to allocate their cost or revalued amounts, net of their residual values, over their
estimated useful life as follows:
Asset Category
-
Trucks and Trailers 5‐10 years
-
Motor Vehicles 10 years
-
Plant and Equipment 2‐10 years
-
Buildings and Leasehold Improvements 40 years
-
Other fixed assets 4 years
There are occasional deviances from those listed above in the event that a used asset is purchased, and its estimated
useful life is shorter than those purchased new. The assets’ residual values and useful lives are reviewed and adjusted
prospectively, if appropriate, at the end of each reporting period.
A reconciliation of depreciation is as follows.
Notes
2024
$
2023
$
Depreciation
Costs of production
24,404,091
15,309,325
Administrative expenses
6
3,117
-
24,407,208
15,309,325
16
EXPLORATION AND EVALUATION ASSETS
2024
$
2023
$
Iron Ridge Mine
Opening balance
1,157,474
1,139,474
Acquisition of Mount Gibson assets
4
4,307,819
-
Acquisition of Right to Mine at Beebyn-W11
5,000,000
-
Exploration expenditure incurred
1,653,682
18,000
Closing balance
12,118,975
1,157,474
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 48 -
16
EXPLORATION AND EVALUATION ASSETS (continued)
Significant accounting estimates and assumptions
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the
related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological
changes, costs of drilling and production, production rates, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
The carrying values of exploration and evaluation expenditure items are reviewed for impairment indicators when
reclassified from to mine properties under development or at each reporting date and are subject to impairment testing
when events or changes in circumstances indicate that the carrying values may not be recoverable. There was no
impairment recognised during the year ended 30 June 2024 (30 June 2023: nil).
Significant accounting judgement
Capitalisation of exploration and evaluation expenditure
The Group has capitalised significant exploration and evaluation expenditure on the basis that this is expected to be
recouped through future successful development (or alternatively sale) of the areas of interest concerned or on the basis
that it is not yet possible to assess whether it will be recouped.
17
INTANGIBLE ASSETS
The intangible assets held by the Group increased as a result of the acquisition of the Mount Gibson assets (see Note 4)
and Newhaul Pty Ltd (see Note 5).
Note
Customer
Contracts
$
Other
intangibles
$
Goodwill
$
Total
$
Cost
At 1 July 2023
18,519,643
1,102,724
10,849,435
30,471,802
Acquisitions
4/5
2,876,461
-
611,772
3,488,233
Additions
-
-
-
-
At 30 June 2024
21,396,104
1,102,724
11,461,207
33,960,035
Accumulated amortisation and
impairment
At 1 July 2023
(3,395,268)
(202,166)
-
(3,597,434)
Depreciation and amortisation
(3,976,707)
(220,545)
-
(4,197,252)
At 30 June 2024
(7,371,975)
(422,711)
-
(7,794,686)
Net book value
14,024,129
680,013
11,461,207
26,165,349
Amortisation methods and useful lives
The Group amortises intangible assets with a limited useful life using the straight-line method over the following periods:
-
Customer contracts 5 years
-
Other intangibles 5-10 years
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 49 -
17
INTANGIBLE ASSETS (continued)
Customer contracts
The customer contracts were acquired as part of a business combination. They are recognised at their fair value at the
date of acquisition and are subsequently amortised over the life of the remaining contract, with no terminal values
assumed.
Impairment tests for goodwill
Goodwill is allocated to the Logistics cash generating unit , which is the same as the Segment (see Note 8) and is consistent
with how the business is managed.
The Group tests whether goodwill has suffered any impairment on an annual basis.
Accounting policies – Intangible assets
Goodwill
Goodwill on acquisitions has been allocated to the Logistics cash-generating unit. Goodwill is not amortised, but it is
tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be
impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include
the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in
which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored
for internal management purposes.
Customer contracts and other intangibles
Customer contracts and other intangibles workforce acquired in a business combination are recognised at fair value at
the acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated amortisation and
impairment losses.
18
TRADE AND OTHER PAYABLES
Trade and other payables are normally settled
within 30 days from receipt of notice. All
amounts recognised as trade and other payables,
but not yet invoiced, are expected to settle within
12 months.
The carrying value of trade and other payables
are assumed to be the same as their fair value,
due to their short-term nature.
Refer to Note 25 for details of the risk exposure
and management of the Group’s trade and other
payables.
2024
$
2023
$
Current
Trade payables and accruals
29,071,023
19,324,855
Sundry payables
667,772
1,165,614
Dividend payable
782,108
777,039
30,520,903
21,267,508
Non-current
Other payables
500,000
500,000
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 50 -
19
PROVISIONS
2024
$
2023
$
Current
Employee benefits
1,738,131
887,818
Non-current
Rehabilitation and mine closure
6,754,444
2,134,225
Employee benefits
47,007
-
6,801,451
2,134,225
Note
2024
$
2023
$
Current – Employee benefits
Opening balance
887,818
225,779
Balance on acquisition of Newhaul
97,455
-
Movement in provisions
1,844,213
1,780,126
Amount utilised
(1,091,355)
(1,118,087)
Closing balance
1,738,131
887,818
Non-current – Employee benefits
Opening balance
-
-
Balance on acquisition of Newhaul
33,644
-
Movement in provisions
13,363
-
Amount utilised
-
-
Closing balance
47,007
-
Non-current – Rehabilitation and mine closure
Opening balance
2,134,225
1,914,125
Acquisition of Shine and Extension Hill assets
4
8,935,644
-
Additional provisions
272,892
154,660
Unwinding of provision
81,091
65,440
Disposal of Extension Hill assets
(4,669,408)
-
Closing balance
6,754,444
2,134,225
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 51 -
19
PROVISIONS (continued)
Accounting estimates and judgements
Rehabilitation and mine closure
The provisions recognised for rehabilitation and mine closure costs relating to the Iron Ridge Mine and Shine Iron Ore
Mine represent the discounted value of the present obligation to restore, dismantle and rehabilitate certain items of
mine properties, property, plant and equipment and to rehabilitate the site.
As the discounted value reflects a combination of an assessment of the nature and extent of the work required, the future
cost of performing the work required, the timing of cash flows and the discount rate, then changes to one or more of
these assumptions is likely to result in changes to the carrying amount of the provision and the related rehabilitation
asset and costs and may result in future actual expenditure differing from the amounts currently provided.
20
BORROWINGS AND LEASE LIABILITIES
2024
$
2023
$
Current
Lease liabilities
522,001
81,971
Chattel mortgages
12,808,190
8,713,032
13,330,191
8,795,003
Non-current
Lease liabilities
6,642,204
225,339
Chattel mortgages
21,947,240
12,347,313
28,589,444
12,572,652
Borrowings
This note provides information about the contractual terms of the Company’s interest-bearing loans and 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 profit or loss over the period of the borrowings using the effective interest method.
Borrowings are removed from the balance sheet 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 profit or loss as other income or finance costs.
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 period.
Borrowing costs are recognised as an asset in the balance sheet and expensed in the statement of profit or loss over the
term of the loan.
Borrowings are secured in the form of chattel mortgages through several financiers, including NAB, Westpac, Volvo
Finance and Toyota Finance. The chattel mortgages are over Trucks, Trailers, Commercial property and other plant and
equipment and are repayable monthly until maturity.
As at 30 June 2024 the Group has 73 mortgages, with remaining terms of the mortgages varying between 2 and 48
months. Current interest rates are a combination of variable and fixed and range between 2.36% to 8.45%. As at 30 June
2023 the Group has 60 mortgages, with remaining terms of the mortgages varying between 7 and 43 months. Current
interest rates are a combination of variable and fixed and range between 2.16% to 8.45%.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 52 -
21
FAIR VALUES OF FINANCIAL INSTRUMENTS
This note provides an update on the judgements and estimates made by the Group in determining the fair values of the
financial instruments since the last annual financial report.
Fair value hierarchy
To provide an indication about the reliability of the inputs used in determining fair value, the Group classifies its financial
instruments into the three levels prescribed under the accounting standards. At 30 June 2024 and 2023, no such assets
or liabilities were recorded at fair value.
There were no transfers between levels during the year. The Group’s policy is to recognise transfers into and transfers
out of fair value hierarchy levels as at the end of the reporting period.
The fair value of financial assets and liabilities held by the Group must be estimated for recognition, measurement and/or
disclosure purposes.
The Group measures fair values by level, per the following fair value measurement hierarchy:
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 (as prices) or indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period.
Valuation techniques used to determine fair values
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale. The carrying amounts of cash
and short-term trade and other receivables, trade payables and other current liabilities approximate their fair values
largely due to the short-term maturities of these payments.
22
SHAREHOLDER EQUITY
(a) Issued Capital
2024
Shares
2023
Shares
2024
$
2023
$
Fully paid at year end
694,617,920
634,161,920
86,348,756
68,018,010
Movements in ordinary share capital during the prior financial year is as follows:
Details
Date
Number of shares
Issue price
$
Balance at 1 July 2022
516,213,920
52,166,431
Issue of shares - Acquisition of Newhaul Road Logistics
(now called Fenix-Newhaul)
21-Jul-22
30,000,000
$0.285
8,550,000
Issue of shares - Conversion performance shares
6-Oct-22
37,500,000
$0.04
1,500,000
Issue of shares - Bonus issue
20-Jan-23
448,000
$0.25
112,000
Issue of shares - Conversion performance shares
29-Jun-23
30,000,000
$0.04
1,200,000
Issue of shares - Issue of milestone consideration
shares
29-Jun-23
20,000,000
$0.226
4,522,762
Less: Share issue costs
-
-
(33,183)
Balance at 30 June 2023
634,161,920
68,018,010
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 53 -
22
ISSUED CAPITAL (continued)
Movements in ordinary share capital during the current financial year is as follows:
Details
Date
Number of shares
Issue price
$
Balance at 1 July 2023
634,161,920
68,018,010
Issue of shares - Purchase of MGX assets (Note 24)
21-Jul-23
60,000,000
$0.3045
18,270,000
Issue of shares - Bonus issue
12-Jan-24
456,000
$0.25
114,000
Less: Share issue costs
-
-
(53,254)
Balance at 30 June 2024
694,617,920
86,348,756
(b) Other equity
The following table shows a breakdown of other equity and the movements during the year. A description of the nature
and purpose of each reserve is provided.
2024
$
2023
$
Other equity
Opening balance
1,911,225
-
Milestone consideration shares – acquisition of Newhaul Road Logistics
(now called Fenix-Newhaul)
-
6,433,987
Transfer of reserve on achievement of milestones
-
(4,522,762)
Balance at 30 June
1,911,225
1,911,225
(c) Reserves
The following table shows a breakdown of the reserves and the movements in these reserves during the year. A
description of the nature and purpose of each reserve is provided.
Notes
2024
$
2023
$
Share-based payments reserve
Balance at 1 July
772,869
2,759,182
Option consideration – purchase of MGX assets
24(a)
1,225,000
-
Options issued – employee share plan
24(b)
183,566
183,064
Dividend retained – employee share plan
24(b)
100,000
262,500
Performance rights expense – employees
24(c)
1,176,142
78,445
Retention rights expense - employees
24(d)
325,161
189,678
Bonus shares issue
24(e)
114,000
112,000
Transfer of reserve on achievement of milestones
(114,000)
(2,812,000)
Options issued to consultants
24(f)
258,692
-
Balance at 30 June
4,041,430
772,869
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 54 -
22
ISSUED CAPITAL (continued)
Share-based payments reserve
The share-based payments reserve is used to recognise: (a) the grant date fair value of options issued but not exercised;
(b) the grant date fair value of market-based performance rights granted to Directors, Employees, Consultants and
Vendors but not yet vested; and (c) the fair value non-market based performance rights granted to Directors, Employees,
Consultants and Vendors but not yet vested.
(d) Retained earnings
2024
$
2023
$
Balance at 1 July
54,135,112
53,295,652
Net profit attributable to owners of the Company
33,637,018
29,253,182
Dividend declared
(13,733,238)
(28,413,722)
Balance at 30 June
74,038,892
54,135,112
23
DIVIDENDS
Based on the budgeted future funding requirements of the current expansion of the Group’s production base, and the
potential for additional funding requirements of further growth opportunities, the Board has chosen not to declare a final
dividend for FY24 (30 June 2023: 2.0c, equating to a total dividend payment of approximately $13.9m).
Dividends are determined after period-end and announced with the results for the period. Dividends determined are not
recorded as a liability at the end of the period to which they relate. Dividends are recognised upon declaration.
24
SHARE-BASED PAYMENTS
Share-based payment transactions are recognised at fair value in accordance with AASB 2 Share-Based Payments.
The total movement arising from share-based payment transactions recognised during the year were as follows:
Notes
2024
$
2023
$
As part of share-based payment expense
Options issued – director & employee share plan
24(b)
183,566
183,064
Dividend retained – employee share plan
24(b)
100,000
262,500
Performance rights issued
24(c)
1,176,143
78,445
Retention rights issued
24(d)
325,161
189,678
Shares issued under the long-term incentive plan
24(e)
114,000
112,000
1,898,870
825,687
As part of administrative expense - options issued
24(f)
258,692
-
As part of acquisition of Mount Gibson assets
24(a)
1,225,000
-
Total share-based payments
3,382,562
825,687
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 55 -
24
SHARE-BASED PAYMENTS (continued)
During the year the Group had the following share-based payments:
a) Share capital issues for acquisition of Mount Gibson assets
Consideration for the Transaction ('Purchase Price') is as follows:
-
$10,000,000 cash consideration;
-
60,000,000 ordinary shares issued on 21 July 2023 (the Acquisition Date);
-
12,500,000 5-year options exercisable at $0.25 per share; and
-
12,500,000 5-year options exercisable at $0.30 per share.
Option consideration
The fair value of consideration was calculated by reference to the fair value of the options issued in accordance with
AASB 2. The options are not listed and carry no dividend or voting right. Upon exercise, each option is convertible into
one ordinary share to rank pari passu in all respects with the Company’s existing fully paid ordinary shares.
b) Share Loan Plan
The Company’s Share Loan Plan was approved and adopted by Shareholders on 2 February 2022. The Fenix Resources
Limited Share Loan Plan is used to reward Directors and employees for their performance and to align their remuneration
with the creation of long-term shareholder wealth through increase in share price. Loans are granted at the discretion of
the Board of Directors and no individual has a contractual right to participate in the plan or to receive any guaranteed
benefits. Any Director participation is approved by shareholders prior to issue.
Under the Share Loan Plan, provision for the issuance of loan shares is as follows:
-
Loan shares are shares in the Company, each carrying the same dividend rights and otherwise ranking pari passu in
all respects with the ordinary issued shares of the Company, where the subscription price is funded by way of a loan
from the Company;
-
Offers under the plan are the absolute discretion of the board;
-
Financial assistance is provided to participants by way of a limited recourse interest-free loan to acquire the shares;
-
The Company retains security over the loan shares whilst ever there is an amount outstanding under the loan; and
-
Loan shares that have not vested and/or are subject to loan repayment will be restricted from trading.
Under the applicable Accounting Standards, the loan shares and related limited recourse loan are accounted for as
options, which gives rise to a share-based payment expense. The treatment of the loan shares under the applicable
Accounting Standards as options requires that the value of the loans and issue price of the shares are not recorded as
receivables or share capital of the Company until repayment or part repayment of the loans occurs. The loan shares are
entitled to dividends. Half of any dividends paid in respect of the loan shares will be applied to reduce the loans and
increase share capital in accordance with both the plan rules and applicable Accounting Standards.
The options are fair valued and recognised as an expense over the vesting period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 56 -
24 SHARE-BASED PAYMENTS (continued)
Set out below is a summary of the outstanding loan balance under the Share Loan Plan:
2024
2023
$
Number of
shares
$
Number of
shares
Opening balance
2,037,500
10,000,000
2,300,000
10,000,000
Granted during the year
-
-
-
-
Repaid during the year – dividends withheld
(100,000)
-
(262,500)
-
Closing balance
1,937,500
10,000,000
2,037,500
10,000,000
Series
Grant date
Expiry date
Exercise price
2024
Number of shares
2023
Number of shares
(i)
4-Mar-22 (1)
7-Mar-32
$0.23
10,000,000
10,000,000
Weighted average remaining contractual life of shares outstanding at the
end of the year:
7.69 years
8.69 years
1
The securities were approved on 4 March 2022 at the Company’s General Meeting.
The fair value of services received in return for shares issued to Directors and employees is measured by reference to the
fair value as options granted. The estimate of the fair value of the services is measured based on a Black-Scholes option
valuation methodology. The life of the options including early exercise options are built into the option model. The fair
value of the options are expensed over the expected vesting period.
The model inputs for options granted during the year include:
Series
Exercise
price
Expiry (years)
Share price at
grant date (1)
Expected
volatility (2)
Dividend
yield
Risk free
interest
rate (3)
Option
value
(i)
$0.230
10.00
$0.235
73%
0%
2.14%
$0.1834
1
The share price has been based upon the closing shares price on grant date being 4 March 2022.
2
The expected price volatility is based on historical volatility (based on the remaining life of the option), adjusted for any expected
changes to future volatility due to publicly available information.
3
Risk free rate of securities with comparable terms to maturity.
The total expense arising from shares issued during the reporting period as part of share-based payments expense was:
Series
2024
$
2023
$
(i)
Director shares
183,566
183,064
Dividend retained by the Director
100,000
262,500
283,566
445,564
c) Performance rights
The Company’s Employee Securities Incentive Plan was approved and adopted by Shareholders on 15 November 2022.
Each performance right will vest as an entitlement to one fully paid ordinary share upon achievement of certain
performance milestones. If the performance milestones are not met, the performance rights will lapse, and the eligible
participant will have no entitlement to any shares.
Performance rights are not listed and carry no dividend or voting rights. Upon exercise each performance right is
convertible into one fully paid ordinary share to rank pari passu in all respects with existing fully paid ordinary shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 57 -
24
SHARE-BASED PAYMENTS (continued)
Movement in the performance rights for the current year is shown below:
Grant
date
Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Converted
during the
year
Forfeited
during the
year
Balance at
year end
Vested at
year end
1-Dec-22
30-Jun-27
-
3,000,000
-
-
-
3,000,000
-
11-Oct-23
5-Jan-29
-
-
1,682,134
-
-
1,682,134
-
24-Nov-23
5-Jan-29
-
-
30,000,000
-
-
30,000,000
-
1-Dec-23
5-Jan-29
-
-
251,353
-
-
251,353
-
3,000,000
31,933,487
-
-
34,933,487
-
The fair value of services received in return for shares issued to Directors and employees is measured by reference to the
fair value of rights granted. The estimate of the fair value of the rights is measured based on a combination of Monte
Carlo simulation model, Parisian Barrier Model and Black-Scholes option valuation methodology. A share-based payment
expense has been recognised over the respective vesting periods.
Key inputs used in the fair value calculation of the performance rights which have been granted during the year ended
30 June 2024 were as follows:
Number
Granted
Exercise
price
Expected
vesting dates
Expiry
date
Share price
at grant
date
Risk fee
rate
Dividend
yield
Fair value per
performance
right
Total fair
value
Grant date: 11 Oct 2023 (1)
1,261,600
$ -
30-Jun-26
5-Jan-29
$0.22
3.88%
9.09%
$0.1357
$70,841
420,534
$ -
30-Jun-26
5-Jan-29
$0.22
3.88%
9.09%
$0.2200
$38,283
Grant date: 24 Nov 2023 (2)
5,000,000
$ -
30-Jun-26
5-Jan-29
$0.260
4.13%
7.69%
$0.1747
$873,500
10,000,000
$ -
30-Jun-25
5-Jan-29
$0.260
4.27%
7.69%
$0.0967
$967,000
10,000,000
$ -
30-Jun-26
5-Jan-29
$0.260
4.13%
7.69%
$0.0767
$767,000
5,000,000
$ -
30-Jun-27
5-Jan-29
$0.260
4.12%
7.69%
$0.0892
$446,000
Grant date: 1 Dec 2023 (3)
188,515
$ -
30-Jun-26
5-Jan-29
$0.265
4.02%
7.55%
$0.1823
$34,366
62,838
$ -
30-Jun-27
5-Jan-29
$0.265
4.02%
7.55%
$0.2650
$16,652
1
Performance rights will vest on:
-
1,261,600 Rights - 3-year vesting period to 30 June 2026 on total shareholder return metrics against peer group
-
420,534 Rights - remaining employed or otherwise engaged by the Company (or any one of its subsidiaries) at all times for a
continuous period up to and including 30 June 2026 from the date of issue of the Performance Rights.
2
Performance rights will vest on:
-
5,000,000 vest on total shareholder return metrics against peer group over a 3-year vesting period to 30 June 2026
-
10,000,000 vest on the Company having a 20-day VWAP of $0.40 or greater prior to 30 June 2025
-
10,000,000 vest on the Company having a 20-day VWAP of $0.60 or greater prior to 30 June 2026
-
5,000,000 vest on the Company having a 20-day VWAP of $0.80 or greater prior to 30 June 2027
3
Performance rights will vest on:
-
188,515 Rights - 3-year vesting period to 30 June 2026 on total shareholder return metrics against peer group
-
62,838 Rights - remaining employed or otherwise engaged by the Company (or any one of its subsidiaries) at all times for a
continuous period up to and including 30 June 2026 from the date of issue of the Performance Rights.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 58 -
24
SHARE-BASED PAYMENTS (continued)
The total performance rights expense arising from performance rights recognised during the reporting year as part of
share-based payment expense were as follows:
2024
$
2023
$
Performance rights granted
1,176,142
78,445
d) Retention rights
The Company’s Retention Rights were granted to employees on 1 December 2022. Each retention right will vest as an
entitlement to one fully paid ordinary share upon continued employment. If the continued employment is not met, the
retention rights will lapse and the eligible participant will have no entitlement to any shares.
Retention rights are not listed and carry no dividend or voting rights. Upon exercise each retention right is convertible
into one fully paid ordinary share to rank pari passu in all respects with existing fully paid ordinary shares.
Movement in the retention rights for the current year is shown below:
Grant
date
Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Converted
during the
year
Forfeited
during the
year
Balance at
year end
Vested at
year end
1-Dec-22
30-Jun-27
-
3,500,000
-
-
-
3,500,000
-
Key inputs used in the fair value calculation of the retention rights which have been granted during the year ended 30
June 2023 were as follows:
Number
Granted
Exercise price
Expected
vesting dates
Expiry date
Share price at
grant date
Fair value per
retention right
Total fair
value
Grant date: 1 Dec 2022
3,500,000
-
1-Dec-22 to 30-
Jun-25
30-Jun-27
$0.24
$0.24
$840,000
A share-based payment expense has been recognised over the respective vesting periods.
The total retention rights expense arising from retention rights recognised during the reporting period as part of share-
based payment expense were as follows:
2024
$
2023
$
Retention rights granted
325,161
189,678
e) Share issue under the long-term incentive plan
In accordance with the Employee Securities Incentive Plan (Plan) approved by shareholders on 15 November 2022, Fenix
offered eligible participants an opportunity to be issued up to 4,000 fully paid ordinary shares in Fenix.
Fenix is committed to rewarding and incentivising its people fairly and to ensuring the interests and motivations of key
staff and contractors are aligned with the interests and motivations of shareholders. The Fenix Board has the ambition
that all Fenix team members act and feel like owners of the business and to facilitate this ambition, based on the positive
performance of the Company during 2023, elected to offer shares to eligible participants.
Each eligible participants who took up the Offer were issued with Fenix shares valued at approximately $1,000 (4,000
Plan Shares valued at $0.25 per share) and these shares were issued to them at no cost. The intention of the Fenix Board
is that recipients of Plan Shares will hold the Plan Shares as a long-term investment and participate in the future success
of the Company. A total of 456,000 shares were issued during the year (448,000 shares were issued during the prior year).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 59 -
24
SHARE-BASED PAYMENTS (continued)
The total expense arising from shares issued under the long-term incentive plan recognised during the reporting period
as part of share-based payment expense were as follows:
2024
$
2023
$
Shares issued under the long-term incentive plan
114,000
112,000
f)
Options issue to consultants
Set out below is a summary of the options issued to consultants in consideration for corporate advisory services.
Series
Issue date
Expiry date
Exercise price
Number of options
(i)
21-Jul-23
21-Jul-26
$0.30
5,000,000
(ii)
5-Jan-24
21-Jul-26
$0.30
2,000,000
Weighted average remaining contractual life of shares outstanding at the end of the year:
2.06 years
The fair value of services received in return for options issued to the consultants is measured by reference to the fair
value as options granted. The estimate of the fair value of the services is measured based on a Black-Scholes option
valuation methodology. The life of the options including early exercise options are built into the option model. The fair
value of the options are expensed over the expected vesting period.The total expense arising from shares issued during
the reporting period as part of share-based payments expense was:
2024
$
2023
$
Options issued to consultants
258,692
-
Significant accounting estimates, assumptions and judgements
Estimation of fair value of share-based payments
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at
the date at which they are granted. The fair value is determined using the Black-Scholes or Monte-Carlo model taking
into account the assumptions detailed within this note.
Probability of vesting conditions being achieved
Inputs to pricing models may require an estimation of reasonable expectations about achievement of future vesting
conditions. Vesting conditions must be satisfied for the counterparty to become entitled to receive cash, other assets or
equity instruments of the entity, under a share-based payment arrangement.
Non-market vesting conditions include service conditions, which require the other party to complete a specified period
of service, and performance conditions, which require specified performance targets to be met (such as a specified
increase in the entity's profit over a specified period of time) or completion of performance hurdles.
The Group recognises an amount for the goods or services received during the vesting period based on the best available
estimate of the number of equity instruments expected to vest and shall revise that estimate, if necessary, if subsequent
information indicates that the number of equity instruments expected to vest differs from previous estimates. On vesting
date, the entity shall revise the estimate to equal the number of equity instruments that ultimately vested.
The achievement of future vesting conditions are reassessed at the end of each reporting period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 60 -
25
FINANCIAL AND CAPITAL RISK MANAGEMENT
Overview
The financial risks that arise during the normal course of the Group’s operations comprise market risk, credit risk and
liquidity risk. In managing financial risk, it is policy to seek a balance between the potential adverse effects of financial
risks on financial performance and position, and the "upside" potential made possible by exposure to these risks and by
taking into account the costs and expected benefits of the various risk management methods available to manage them.
General objectives, policies and processes
The Board is responsible for approving policies on risk oversight and management and ensuring management has
developed and implemented effective risk management and internal control. The Board receives reports as required from
the Senior Executives in which they review the effectiveness of the processes implemented and the appropriateness of
the objectives and policies it sets. The Board oversees how management monitors compliance with the Group's risk
management policies and procedures and reviews the adequacy of the risk management framework in relation to the
risks faced.
These disclosures are not, nor are they intended to be an exhaustive list of risks to which the Group is exposed.
Financial Instruments
The Group has the following financial instruments:
2024
$
2023
$
Financial assets
Current
Cash and cash equivalents
77,118,325
76,328,189
Trade and other receivables
18,112,144
9,252,034
Financial assets
328,136
10,761
Other current assets
232,166
40,000
Non-Current
Loan receivable
5,000,000
-
100,790,771
85,630,984
Financial liabilities
Current
Trade and other payables
30,520,903
21,267,508
Borrowings and lease liabilities
13,330,191
8,795,003
Non-Current
Trade and other payables
500,000
500,000
Borrowings and lease liabilities
28,589,444
12,572,652
72,940,538
43,135,163
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 61 -
25
FINANCIAL AND CAPITAL RISK MANAGEMENT (continued)
(a) Market Risk
Market risk can arise from the Group’s use of interest-bearing financial instruments and exposure to commodity prices.
It is a risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in interest
rates (interest rate risk), foreign exchange rate (foreign exchange risk) and fluctuations in commodity prices (commodity
price risk).
(i)
Interest rate risk
The Board manages the Group's exposure to interest rate risk by regularly assessing exposure, taking into account funding
requirements and selecting appropriate instruments to manage its exposure. As at the 30 June 2024, the Group has
interest-bearing liabilities (borrowings) and interest-bearing assets, being deposits and cash at bank. As at 30 June 2023
the Group had interest-bearing assets, being convertible notes, deposits and cash at bank.
Sensitivity analysis
The Group's policy is to minimise interest rate cash flow risk exposures. Longer-term borrowings are therefore usually at
fixed rates. At 30 June 2024, the Group is exposed to variable changes to cash invested on deposit with financial
institutions.
A change in interest rate of weakening of +/- 1%, with all other variables held constant, would decrease the Group's
equity and profit after taxation by $42,733. These changes are considered to be reasonably possible based on observation
of current market conditions. The calculations are based on a change in the average market interest rate for each period,
and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables
are held constant.
In the prior year the Group did not consider this to be a material risk/exposure to the Group and have therefore not
undertaken any further analysis.
The weighted average effective interest rate of funds on deposit is 4.78% (30 June 2023: 4.59%).
(ii) Foreign exchange risk
The Group is exposed to foreign exchange risk arising from fluctuations in the US dollar.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the Company’s functional currency. The Group manages risk by matching receipts and payments in
the same currency and monitoring movements in exchange rates. The exposure to risks is measured using sensitivity
analysis and cash flow forecasting.
The Group’s exposure to US dollars foreign currency risk at the end of the reporting period, expressed in Australian
dollars, was as follows:
2024
$
2023
$
Financial assets
Cash
4,640,207
10,498,111
Trade and other receivables
11,355,693
7,554,459
Financial liabilities
Trade and other payables
5,477,831
3,072,458
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 62 -
25
FINANCIAL AND CAPITAL RISK MANAGEMENT (continued)
Sensitivity analysis
A hypothetical change of 10% in the US dollar exchange rate was used to calculate the Group's sensitivity to foreign
exchange rate movements as the Company’s estimate of possible rate movements over the coming year taking into
account current market conditions and past volatility.
A weakening of the US dollar by 10%, with all other variables held constant, would decrease the Group's equity and profit
after taxation by $701,450 (2023: $995,758). These sensitivities should not be used to forecast the future effect of
movement in the Australian dollar exchange rate on future cash flows.
(iii) Commodity price risk
The risk associated with commodity prices is managed as part of the portfolio risk management strategy.
The Group uses derivative financial instruments such as iron ore forward contracts to manage the risk associated with
commodity price. All other production is on market-based index pricing terms.
The relationship between commodity prices and foreign currencies is complex and movements in foreign exchange rates
can impact commodity prices.
(b) Credit risk
Credit risk arises from cash and cash equivalents and deposits with financial institutions, as well as trade receivables.
Credit risk is managed on a Group basis. For cash balances held with bank or financial institutions, only Tier 1 Australian
banks are accepted.
The Board are of the opinion that the credit risk arising as a result of the concentration of the Group's assets is more than
offset by the potential benefits gained.
The maximum exposure to credit risk at the reporting date is the carrying amount of the assets as summarised, none of
which are impaired or past due.
Exposure to credit risk
The carrying amount of the Group’s
financial assets represents the maximum
credit exposure. The Group’s maximum
exposure to credit risk at the reporting
date was:
2024
$
2023
$
Cash and cash equivalents
77,118,325
76,328,189
Trade and other receivables
18,112,144
9,252,034
Other current assets
328,136
10,761
Financial asset
232,166
40,000
Loan receivable
5,000,000
-
100,790,771
85,630,984
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 63 -
25
FINANCIAL AND CAPITAL RISK MANAGEMENT (continued)
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external
credit ratings (if available) or to historical information about counterparty default rates.
2024
$
2023
$
Other receivables and loans
Counterparties with external credit ratings
-
-
Counterparties without external credit ratings (1)
Group 1
-
-
Group 2
18,112,144
9,252,034
Group 3
5,000,000
-
Total
23,112,144
9,252,034
Other current assets – term deposits held with Tier 1 Australian banks and
financial institutions
232,166
40,000
Total
232,166
40,000
1
Group 1 — new customers (less than 6 months)
Group 2 — existing customers (more than 6 months) with no defaults in the past
Group 3 — existing customers (more than 6 months) with some defaults in the past. All defaults were fully recovered.
2024
$
2023
$
Cash at bank and short-term deposits
Held with Tier 1 Australian banks and financial institutions
77,118,325
76,328,189
Total
77,118,325
76,328,189
(c)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation. Through continuous monitoring of forecast and actual cash flows the Group manages liquidity
risk by maintaining adequate reserves to meet future cash needs. The decision on how the Group will raise future capital
will depend on market conditions existing at that time.
Maturities of financial liabilities
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 64 -
25
FINANCIAL AND CAPITAL RISK MANAGEMENT (continued)
Less than 6
months
$
6 - 12
months
$
1 – 5
years
$
Over 5
years
$
Total
contractual
cash flows
$
Carrying
amount of
liabilities
$
At 30 June 2024
Trade and other payables
30,020,903
500,000
500,000
-
31,020,903
31,020,903
Borrowings and lease liabilities
9,024,940
6,700,949
26,792,712
4,680,754
47,199,355
41,919,635
At 30 June 2023
Trade and other payables
20,767,508
500,000
500,000
-
21,767,508
21,767,508
Borrowings and lease liabilities
5,397,592
5,802,686
23,071,185
-
34,271,463
21,367,655
(d) Capital risk management
The Group’s objective when managing capital is to safeguard the ability to continue as a going concern. This is to provide
returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost
of capital. The Board monitors capital on an ad-hoc basis. No formal targets are in place for return on capital or gearing
ratios.
26
EARNINGS PER SHARE
Options
Options granted to employees and Directors under the Incentive Option Scheme are considered to be potential ordinary
shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive.
The options have not been included in the determination of basic earnings per share. Details are set out in Note 24.
Retention rights
Retention rights granted to employees under the employee incentive scheme are considered to be potential ordinary
shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive.
The rights have not been included in the determination of basic earnings per share. Details are set out in Note 24.
Performance rights
Performance rights granted to employees under the employee incentive scheme are considered to be potential ordinary
shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive.
The rights have not been included in the determination of basic earnings per share. Details are set out in Note 24.
Milestone Consideration shares
Consideration shares granted to Exxten Pty Ltd in part consideration for the acquisition of 50% of Newhaul Road Logistics
Pty Ltd are considered to be potential ordinary shares and have been included in the determination of diluted earnings
per share to the extent to which they are dilutive. The performance shares have not been included in the determination
of basic earnings per share.
Consideration options
Options granted as consideration are considered to be potential ordinary shares and have been included in the
determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included
in the determination of basic earnings per share. Details are set out in Note 4.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 65 -
26
EARNINGS PER SHARE (continued)
2024
2023
Basic earnings per share
Net profit after tax attributable to the members of the Company
$ 33,637,018
$ 29,253,182
Weighted average number of ordinary shares
690,931,100
572,253,997
Basic earnings per share (cents)
4.87
5.11
Net profit after tax attributable to the members of the Company
$ 33,637,018
$ 29,253,182
Weighted average number of ordinary shares
690,931,100
572,253,997
Adjustments for calculation of diluted earnings per share
Options
29,715,847
-
Performance rights
22,305,159
3,000,000
Retention rights
3,500,000
3,500,000
Milestone consideration shares
40,000,000
40,000,000
Weighted average number of ordinary shares and potential ordinary shares
786,452,106
613,600,572
Diluted earnings per share (cents)
4.28
4.77
27
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the financial statements requires the use of accounting estimates which, by definition, will seldom
equal the actual results. Management also needs to exercise judgement in applying the Group's accounting policies.
This Note provides an overview of the areas that involved a higher degree of judgement or complexity and items which
are more likely to be materially adjusted. Detailed information about each of these estimates and judgements is included
in the Notes together with information about the basis of calculation for each affected line item in the financial
statements.
Material accounting estimates and judgements
The areas involving material estimates or judgements are:
-
Fair value of identifiable assets and liabilities acquired – Note 4 and Note 5;
-
Inventory valuation – Note 9;
-
Income tax classification – Note 10;
-
Uncertain tax matters – Note 10;
-
Units of production amortisation method – Note 15;
-
Impairment of assets – Note 17;
-
Rehabilitation and mine closure – Note 19; and
-
Fair value of derivatives – Note 21.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances.
There have been no actual adjustments this year as a result of an error and of changes to previous estimates.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 66 -
28
CONTINGENCIES
(a) Contingent liabilities
There were no material contingent liabilities not provided for in the financial statements of the Group as at 30 June 2024
or 30 June 2023.
(b) Contingent assets
There were no material contingent assets as at 30 June 2024 or 30 June 2023.
29
COMMITMENTS
Significant capital expenditure contracted for at the end of the reporting period but not recognised as a liability is as
follows:
2024
$
2023
$
Within one year
64,536
42,668
Later than one year but no later than five years
164,518
90,672
Later than five years
180,312
144,416
409,366
277,756
30
INTEREST IN OTHER ENTITIES
(a) Investments in controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in Note 36(a):
Name of entity
Country of
incorporation
2024
Equity holding
2023
Equity holding
Prometheus Mining Pty Ltd (1)
Australia
100%
100%
Fenix Beebyn Pty Ltd (2)
Australia
100%
-
Fenix Shine Pty Ltd (3)
Australia
100%
100%
Fenix Extension Hill Pty Ltd (3)
Australia
100%
100%
Newhaul Pty Ltd (4)
Australia
100%
-
Newhaul Road Logistics Pty Ltd (5)
(formerly Fenix-Newhaul Pty Ltd)
Australia
100%
100%
Newhaul Commercial Pty Ltd (6)
Australia
100%
-
Newhaul Residential Pty Ltd (6)
Australia
100%
-
Newhaul Perenjori Pty Ltd (3)
(formerly Fenix Perenjori Pty Ltd)
Australia
100%
100%
Newhaul Ruvidini Pty Ltd (3)
(formerly Fenix Ruvidini Pty Ltd)
Australia
100%
100%
Newhaul Port Logistics Pty Ltd (3)
(formerly Fenix Port Services Pty Ltd)
Australia
100%
100%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 67 -
30
INTEREST IN OTHER ENTITIES (continued)
1
Subsidiary acquired on 22 November 2018.
2
Subsidiary incorporated on 12 September 2023.
3
Subsidiary incorporated on 19 June 2023.
4
Subsidiary acquired on 1 January 2024.
5
On 22 July 2022, the Company acquired the remaining 50% of the ordinary share capital and voting rights of Newhaul Road
Logistics Pty Ltd. As a result, Newhaul Road Logistics became a wholly owned subsidiary of the Company from its previously equity
held interest.
6
Subsidiary incorporated on 10 November 2023.
31
RELATED PARTY TRANSACTIONS
Transactions with related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
Key management personnel compensation
2024
$
2023
$
Short-term employee benefits
1,432,683
845,106
Post-employment benefits
86,300
76,585
Share-based payments
1,217,570
209,212
2,736,553
1,130,903
Detailed remuneration disclosures are provided within the remuneration report.
Parent entity
The ultimate parent entity and ultimate controlling party is Fenix Resources Limited (incorporated in Australia).
Subsidiaries
Interests in subsidiaries are set out in Note 30.
Transactions with related parties
Director positions
On 25 October 2023, Mr Craig Mitchell transitioned to an Executive Director role.
Purchases from entities associated with key management personnel
Management services
Prior to 1 January 2024, Mr Mitchell was a director and shareholder of Newhaul Pty Ltd. Between 1 July 2023 to 31
December 2023, Newhaul Pty Ltd provided management services to Newhaul Road Logistics that resulted in an amount
of $1,521,300 (inc. GST) (30 June 2023: $2,127,903 (inc. GST)) being invoiced from Newhaul Pty Ltd and recorded in other
expenses. Newhaul Pty Ltd was acquired by the Company on 1 January 2024 – refer to Note 5 for further information.
Transactions with related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated. Other than the items noted above there have been no changes to
related party transactions since the last annual reporting date, 30 June 2023.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 68 -
32
EVENTS SUBSEQUENT TO REPORTING DATE
There has not arisen in the interval between the end of the period and the date of this report any item, transaction or
event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the
operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial
years.
33
RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Notes
2024
$
2023
$
Profit for the year
33,637,018
29,253,182
Add/(less) non-cash items:
Depreciation and amortisation
24,095,362
15,309,325
Share based payments
24
2,157,561
825,687
Inventory movement
9
800,236
2,090,659
Foreign exchange
612,230
(358,060)
Interest on loans
1,665,310
1,167,228
Add/(less) items classified as invested/financing activities:
Finance costs
2,543
(140,614)
Interest income
-
138,645
(Loss)/Gain on sale of asset
(593,431)
(255,624)
Capitalised refurbishment works
(1,531,072)
-
Share issue costs claimed as a deduction
(53,254)
(33,183)
Movement in assets in account payable & GST on assets
financed
2,361,027
1,257,853
Insurance funding
262,396
(549,270)
Profit from joint venture
(2,925)
(7,721,335)
Leasing payments
167,673
144,473
Changes in assets and liabilities during the financial year:
Increase in receivables
(11,975,662)
(2,317,072)
Increase/(Decrease) in payables
11,749,392
(2,024,333)
Increase/(Decrease) in employee provision
1,562,115
(104,171)
Increase/(Decrease) in taxation provision
5,245,891
(20,254,709)
Net cash inflow used in operating activities
70,162,410
16,428,681
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 69 -
34
REMUNERATION OF AUDITORS
During the year, the following fees were paid or payable for services provided by the auditor of the parent entity, its
related parties and non-related audit firms:
2024
$
2023
$
Audit and assurance services
Grant Thornton Audit Pty Ltd
Audit and review of financial statements
222,679
190,605
Other services
Grant Thornton Australia Limited
Due diligence services
-
62,887
Total remuneration
222,679
253,492
From time to time the Consolidated Entity may decide to employ an external auditor on assignments additional to their
statutory audit duties where the auditor’s expertise and experience with the Consolidated Entity are important. These
assignments are principally tax advice and due diligence on acquisitions, which are awarded on a competitive basis. It is
the Group’s policy to seek competitive tenders for all major consulting projects.
35
PARENT ENTITY INFORMATION
The following information relates to the parent entity,
Fenix Resources Limited as at 30 June 2024. The
information presented here has been prepared using
consistent accounting policies as presented in Note 36.
(a) Summary of financial information
The individual aggregate financial information for the
parent entity is shown in the table.
(b) Guarantees entered into by the parent entity
The parent entity did not have any guarantees as at
30 June 2024 or 30 June 2023.
(c)
Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as
at 30 June 2024 or 30 June 2023.
(d) Contractual commitments for the acquisition of
property, plant and equipment
The parent entity did not have any contractual
commitments for the acquisition of property, plant and
equipment as at 30 June 2024 or 30 June 2023.
Company
2024
$
2023
$
Financial position
Current assets
76,982,094
87,281,742
Total assets
186,769,254
147,347,078
Current liabilities
38,202,000
24,349,509
Total liabilities
42,634,103
29,778,609
Equity
Issued capital
86,348,755
68,018,010
Reserves
5,952,656
2,684,094
Retained Earnings
51,833,740
46,866,365
Total equity
144,135,151
117,568,469
Financial performance
Profit for the year
18,700,613
22,519,996
Total comprehensive
income
18,700,613
22,519,996
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 70 -
36
STATEMENT OF MATERIAL ACCOUNTING POLICES
Fenix Resources Limited (Company or Fenix) is a company
incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange. Fenix Resources Limited is the
ultimate parent entity of the Group.
The consolidated financial statements of Fenix Resources Limited
for the year ended 30 June 2024 comprise the Company and its
controlled subsidiaries (together referred to as the Group and
individually as Group entities).
Statement of compliance
These general-purpose financial statements have been prepared
in accordance with Australian Accounting Standards, other
authoritative pronouncements of the Australian Accounting
Standards Board, Australian Accounting Group Interpretations
and the Corporations Act 2001. Fenix Resources Limited is a for-
profit entity for the purpose of preparing the financial
statements.
The consolidated financial statements of the Group also comply
with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB).
Historical cost convention
These financial statements have been prepared on an accruals
basis and are based on historical costs and do not take into
account changing money values or, except where stated, current
valuations of non-current assets. Cost is based on the fair values
of the consideration given in exchange for assets.
Critical accounting estimates and significant judgements
The preparation of financial statements requires the use of
certain
critical
accounting
estimates.
It
also
requires
Management to exercise its judgment in the process of applying
the Group's accounting policies. The areas involving a higher
degree of judgment or complexity, or areas where assumptions
and estimates are significant to the financial statements are
disclosed within Note 27.
New and amended standards adopted by the Group
The Group has adopted all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to their
operations and effective for the current annual reporting period.
The adoption of all the new and revised Standards and
Interpretations has not resulted in any changes to the Group’s
accounting policies and has no effect on the amounts reported
for the current or prior years.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been
published that are not mandatory for 30 June 2023 reporting
periods and have not been early adopted by the group. The
group's assessment of the impact of these new standards and
interpretations is set out below. These standards are not
expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future
transactions.
There are no other standards that are not yet effective and that
are expected to have a material impact on the Group in the
current or future reporting period and in the foreseeable future.
Accounting Policies
In order to assist in the understanding of the financial statements,
the following summary explains the principal accounting policies
that have been adopted in the preparation of the financial report.
These policies have been applied consistently to all of the periods
presented, unless otherwise stated.
(a)
Principles of Consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and
liabilities of subsidiaries of the Company at the end of the
reporting period. Subsidiaries are all those entities (including
special purpose entities) over which the Group has the power to
govern
the
financial
and
operating
policies,
generally
accompanying a shareholding of more than one-half of the voting
rights. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when
assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are de-consolidated from the
date that control ceases. Where a subsidiary has entered or left
the Group during the year, the financial performance of those
entities is included only for the period of the year that they were
controlled. A list of subsidiaries is contained in Note 30 to the
financial statements.
Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated in full on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of the impairment of the asset
transferred.
Non-controlling interests in the results and equity of subsidiaries
are shown separately in the consolidated statement of profit or
loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of financial
position.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
Group.
Equity method
Under the equity method of accounting, the investments are
initially recognised at cost and adjusted thereafter to recognise
the Group’s share of the post-acquisition profits or losses of the
investee in profit or loss, and the Group’s share of movements in
other comprehensive income of the investee in other
comprehensive income. Dividends received or receivable from
associates and joint ventures are recognised as a reduction in the
carrying amount of the investment.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 71 -
When the Group’s share of losses in an equity-accounted
investment equals or exceeds its interest in the entity, including
any other unsecured long-term receivables, the Group does not
recognise further losses, unless it has incurred obligations or
made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its
associates and joint ventures are eliminated to the extent of the
Group’s interest in these entities. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of equity
accounted investees have been changed where necessary to
ensure consistency with the policies adopted by the Group.
The carrying amount of equity-accounted investments is tested
for impairment in accordance with the policy described in Note
36(h).
(b)
Segment Reporting
Operating segments are reported in a manner that is consistent
with the internal reporting to the chief operating decision maker,
which has been identified by the Company as the Board.
(c)
Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of the Group are
measured using the currency of the primary economic
environment in which the Group operates (‘the functional
currency). The consolidated financial statements are presented in
Australian dollars, which is Fenix Resources Limited’s functional
and presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign currency monetary assets and liabilities at
the reporting date are translated at the exchange rate existing at
reporting date. Exchange differences are recognised in profit or
loss in the period in which they arise.
Group companies
The results and financial position of foreign operations (none of
which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency
are translated into the presentation currency as follows:
assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that
balance sheet;
income and expenses for each statement of profit or loss and
other comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated at the dates of
the transactions); and
all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the
translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges
of such investments, are recognised in other comprehensive
income. When a foreign operation is sold or any borrowings
forming part of the net investment are repaid, a proportionate
share of such exchange difference is reclassified to profit or loss,
as part of the gain or loss on sale where applicable.
Goodwill and fair value adjustments arising on the acquisition of
a foreign operation are treated as assets and liabilities of the
foreign operation and translated at the closing rate.
(d)
Revenue Recognition
Revenue is measured as the fair value of the consideration
received or receivable. The Group recognises revenue when the
amount of revenue can be reliably measured it is probable that
future economic benefits will flow to the entity.
Revenue for other business activities is recognised on the
following basis:
Iron Ore Sales
The Group generates revenue from the sale of iron ore. Revenue
is recognised at a point in time when control of the promised
goods or services passes to the customer. In most instances,
control passes when the goods are delivered to a destination
specified by the customer, typically on board the customer's
appointed vessel. The amount of revenue recognised reflects the
consideration to which the Group expects to be entitled in
exchange for the goods.
The Group sells ore to customers under two types of long-term
offtake contracts:
-
Cost and Freight (CFR) Incoterms, where the Group is
responsible for providing shipping/freight services and the
associated costs; and
-
Free on Board (FOB) Incoterms, where the customer is
responsible for all shipping/freight services and the
associated costs.
The Group’s sales under both of these contract types are
provisionally priced, with the final price only determined at a
later date with reference to the average market-based price
indices over an agreed time period (typically 30 calendar days
from the first month post shipment), referred to as a quotational
period. Adjustments to the sales price therefore occur based on
movements in the market-based price indices up to the end of
the quotational period. Any increase/decrease from the
provisional price to the final price is typically referred to as a QP
Adjustment. QP Adjustments are therefore only confirmed after
the end of the quotational period and any increase / decrease to
revenue then recorded accordingly.
Any changes to the final price that occur over the quotational
period are embedded within the associated trade receivable as
part of the contract. Given the exposure to the commodity price,
these provisionally priced trade receivables are measured at fair
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 72 -
value through profit or loss in revenue. Subsequent changes in
the fair value of provisionally priced trade receivables are
calculated based on either:
-
where QP Adjustments are confirmed by the balance sheet
date: As per the final invoice / credit note issued; or
-
where QP Adjustments are not yet confirmed by the
balance sheet date but where the quotational period has
expired on or before the balance sheet date: By calculating
an estimated final price using the observed average
market-based price indices over the quotational period; or
-
where QP Adjustments are not yet confirmed by the
balance sheet date but where the quotational period will
only commence after the balance sheet date: By calculating
an estimated final price using the spot prices of the market-
based price indices as at the balance sheet date.
The final invoice is typically issued once the vessel has arrived at
its destination and details have been confirmed by the customer
and may include adjustments that arise as a consequence of
changes in moisture or ore quality. Any changes in the value of
the trade receivables arising from the final invoice are also
measured at fair value through profit or loss, included under
revenue from contracts with customers.
Port Services
Revenue is recognised at a point in time when the services are
performed on behalf of the customer.
Interest income
Interest revenue is recognised on a time proportionate basis that
takes into account the effective yield on the financial asset.
(e)
Inventories
Ore stockpiles are physically measured or estimated and valued
at the lower of cost and net realisable value. Cost is determined
on a weighted average basis and comprises mining costs, direct
materials, direct labour, haulage, depreciation and an
appropriate proportion of project overhead expenditure, the
latter being allocated on the basis of normal operating capacity.
Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and
estimated costs necessary to make the sale.
(f)
Income Tax and Other Taxes
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the company’s
subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is
subject to interpretation. It establishes provision where
appropriate on the basis of amounts expected to be paid to the
tax authorities.
Deferred income tax is provided in full, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated
financial statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for if it arises from
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is
settled.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and tax
bases of investments in foreign operations where the company is
able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse
in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle
the liability simultaneously.
Fenix Resources Limited and its wholly owned Australian
controlled entities have implemented the tax consolidation
legislation. As a consequence, these entities are taxed as a single
entity and the deferred tax assets and liabilities of these entities
are set off in the consolidated financial statements.
Current and deferred tax is recognised in profit or loss, except to
the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax
is also recognised in other comprehensive income or directly in
equity, respectively.
(g)
Exploration and Evaluation Expenditure
The Group’s policy with respect to exploration and evaluation
expenditure is to use the area of interest method.
This method allows the costs associated with the acquisition,
exploration, and evaluation of a prospect to be aggregated on the
consolidated statement of financial position and matched against
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 73 -
the benefits derived from commercial production once this
commences.
Costs
Exploration lease acquisition costs relating to exploration
provinces are initially capitalised and then amortised over the
shorter term of the lease or the expected life of the project.
All other exploration and evaluation costs, including general
permit activity, geological and geophysical costs and new venture
activity costs are charged as expenses as incurred except where:
-
such evaluation costs are expected to be recouped through
successful development and exploitation of the area of
interest or alternatively, by its sale; or
-
exploration and/or evaluation activities in the area of
interest have not yet reached a stage which permits a
reasonable assessment of the existence or otherwise of
economically recoverable reserves and active and
significant operations in relation to the area are continuing.
Areas of interest are recognised at permit level. Subsequent to
the recognition of an area of interest, all further costs relating to
the Area of Interest are initially capitalised. Each area of interest
is reviewed at least bi-annually to determine whether economic
quantities of reserves exist or whether further exploration and
evaluation work is required to support the continued carry
forward of capitalised costs. To the extent it is considered that
the relevant expenditure will not be recovered, it is written off.
In the statement of cash flows, those cash flows associated with
the capitalised exploration and evaluation expenditure are
classified as cash flows used in investing activities exploration and
evaluation expenditure expensed is classified as cash flows used
in operating activities.
Future restoration costs
The Group’s aim is to avoid or minimise environmental impacts
resulting from its operations and reviews work scope and cost
estimates for restoration annually.
Provision is made in the consolidated statement of financial
position for the estimated costs of legal and constructive
obligations to restore operating locations in the period in which
the obligation arises. The estimated costs are capitalised as part
of the cost of the related project where recognition occurs in the
operating locations. The costs are then recognised as an expense
on a units of production basis during the production phase of the
project.
(h) Impairment of Assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is
required, the Group makes an estimate of the asset’s recoverable
amount. An asset’s recoverable amount is the higher of its fair
value less costs to sell and its value in use and is determined for
an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets
or groups of assets and the asset’s values in use cannot be
estimated to be close to its fair value. In such cases the asset is
tested for impairment as part of the cash-generating unit to
which it belongs.
When the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or cash-generating
unit is considered impaired and is written down to its recoverable
amount. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value
of money and the risks specific to the asset. Impairment losses
relating to continuing operations are recognised in those expense
categories consistent with the function of the impaired asset
unless the asset is carried at re-valued amount (in which case the
impairment loss is treated as a revaluation decrease).
As assessment is also made at each reporting date as to whether
there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. A
previously recognised impairment loss is reversed only if there
has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is
increased to its recoverable amount. That increased amount
cannot exceed the carrying amount that would have been
determined, net of depreciation, had the impairment loss been
recognised for the asset in prior years. Such reversal is recognised
in profit or loss unless the asset is carried at the re-valued
amount, in which case the reversal is treated as a revaluation
increase. After such a reversal the depreciation charge is adjusted
in future periods to allocate the asset’s revised carrying amount,
less any residual value, on a systematic basis over its remaining
useful life.
(i)
Cash and Cash Equivalents
For the purposes of the statement of cash flows, cash and cash
equivalents includes cash on hand, cash in bank accounts, money
market investments readily convertible to cash within two
working days, and bank bills but net of outstanding bank
overdrafts.
(j)
Trade and Other Receivables
Receivables are initially recognised at the transaction price, less
allowances for expected credit loss.
(k)
Investments and Other Financial Assets
Investments and other financial assets
Classification
The Group classifies its financial assets in the following
measurement categories:
-
those to be measured subsequently at fair value (either
through OCI, or through profit or loss), and
-
those to be measured at amortised cost.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 74 -
The classification depends on the entity's business model for
managing the financial assets and the contractual terms of the
cash flows.
For assets measured at fair value, gains and losses will either be
recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on
whether the group has made an irrevocable election at the time
of initial recognition to account for the equity investment at fair
value through other comprehensive income (FVOCI). The group
reclassifies debt investments when and only when its business
model for managing those assets changes.
Measurement
At initial recognition, the group measures a financial asset at its
fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or
loss.
Impairment
The Group assesses on a forward-looking basis the expected
credit losses associated with its debt instruments carried at
amortised cost and FVOCI. The impairment methodology applied
depends on whether there has been a significant increase in
credit risk.
For trade receivables, the Group applies the simplified approach
permitted by AASB 9, which requires expected lifetime losses to
be recognised from initial recognition of the receivables.
(l)
Mine Properties, Property Plant and Equipment
Recognition and measurement
Mine properties, property, plant and equipment is stated at cost
less
accumulated
depreciation
and
amortisation
and
accumulated impairment losses.
Items of mine properties, property, plant and equipment are
initially recognised at cost at the date of acquisition when it is
probable that future economic benefits associated with the asset
will flow to the Group and the cost of the item can be reliably
measured. Cost includes expenditure that is directly attributable
to the acquisition of the items. Subsequent costs are included in
the asset's carrying amount or recognised as a separate asset, as
appropriate, only where it is probable that future economic
benefits will flow to the Group and the cost of the item can be
measured reliably.
The assets' residual value and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period. An
asset's carrying amount is immediately written down to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing
proceeds with the carrying amount and are recognised in profit
or loss.
Mine properties under development
Mine properties under development represents the costs
incurred in preparing mines for production and includes plant and
equipment under construction and operating costs incurred
before production commences.
Once production commences, these costs are transferred to
property, plant and equipment and mine properties as
appropriate, and are depreciated and amortised using the units
of production method based on the estimated economically
recoverable resource contained in the mine plan to be extracted
to which they relate or are written off if the mine property is
abandoned.
Mine properties
Mine properties represent the accumulation of all pre-
production expenditure incurred in relation to areas of interest
for which the technical feasibility and commercial viability of the
extraction of mineral resources are demonstrable.
Production is deemed to commence when the mine assets are
installed and ready for use in the location and condition
necessary for them to be capable of operating in the manner
intended by management. These costs are capitalised to the
extent they are expected to be recouped through the successful
exploitation of the related mining leases.
Mine properties include:
-
Capitalised expenditure in relation to exploration,
evaluation, feasibility, and acquisition costs incurred on
projects for which the technical feasibility and commercial
viability of extracting a mineral resource are demonstrable.
-
The cost of rehabilitation and mine closure relating to
assets reflected in mine properties.
-
Capitalised development and production stripping costs.
-
Pre-production operating costs, net of pre-production
revenue, previously accumulated and carried forward in
mine properties under development, transferred to mine
properties in relation to areas of interest in which mining
has now commenced.
-
Associated mine infrastructure including access roads,
evaporation ponds, tailings facility and the airstrip.
-
Mining contractor mobilisation costs.
Mine properties are amortised on a units of production basis over
the economically recoverable ore reserve contained in the
relevant mine plan.
When further development expenditure is incurred in respect of
a mine property after the commencement of production, such
expenditure is carried forward as part of the mine property only
when it is probable that the additional future economic benefits
associated with the expenditure will flow to the Group.
Otherwise, such expenditure is classified as part of the cost of
production.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 75 -
Right-of-use assets
Right-of-use (ROU) assets, representing the Group's right to use
an underlying leased asset for the lease term, are measured at
cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liabilities.
Depreciation and amortisation
Depreciation commences when an asset is in the location and
condition necessary for it to be capable of operating in the
manner intended by management. Depreciation of assets is
calculated using either the straight-line method or units of
production method to allocate the assets' cost, net of residual
values, over the estimated useful lives of the assets.
Mine-related plant and equipment is depreciated on a units of
production basis, except for assets with a useful life less than the
life of mine, for which the straight-line method is applied. Non-
mine-related plant and equipment is depreciated on a straight-
line basis. The depreciation rates used when applying the
straight-line method vary between 5% to 50% per annum.
Mine properties are amortised on a units of production basis over
the life of the estimated ore reserve of the mine.
Units of production method
Where the useful life of an asset is directly linked to the
extraction of ore from a mine, the asset is depreciated using the
units of production method. The units of production method
results in depreciation and amortisation charges proportional to
the depletion of the estimated ore reserve of the mine. The unit
of account used in the calculation is tonnes of ore.
(m) Plant and Equipment
Plant and equipment is stated at historical cost less accumulated
depreciation and any impairment in value. Historical cost includes
expenditure that is directly attributable to the acquisition of the
items.
Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of any component accounted for as
a separate asset is derecognised when replaced.
Depreciation is calculated using both the diminishing value and
straight-line methods to allocate their cost or revalued amounts,
net of their residual values, over their estimated useful lives:
-
Trucks and Trailers 5‐10 years
-
Motor Vehicles 10 years
-
Plant and Equipment 2‐10 years
-
Buildings and Leasehold Improvements 40 years
-
Other fixed assets 4 years
The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in profit or
loss.
(n)
Leases
Lease assessment
Applying the definition of a lease
At inception of a contract, the Group assesses whether a contract
is, or contains, a lease, by determining whether the contract
conveys the right to control the use of an identified asset for a
period of time in exchange for consideration.
Control is considered to exist if the Group has the right to obtain
substantially all of the economic benefits from the use of an
explicitly or implicitly identified asset over which the supplier
does not have a substantive substitution right, and the right to
direct the use of that asset throughout the period of use.
Lease term
The lease term is the non-cancellable term of the lease, and any
periods covered by:
-
an extension option, if that option is reasonably certain to
be exercised, and;
-
a termination option, if that option is reasonably certain
not to be exercised.
Non-lease components
At inception or on reassessment of a contract that contains a
lease component, the consideration in the contract is allocated
to each lease component on the basis of their relative stand-
alone prices, unless an election is made to account for the lease
and non-lease components as a single lease component.
Non-lease components are excluded from future lease payments
and recognised separately as incurred as operating expenses on
a straight-line basis in profit or loss.
Initial recognition
Leases are recognised as an ROU asset and a corresponding lease
liability at the commencement date, which is the date the leased
asset is available for use by the Group.
Short-term leases and leases of low-value assets
All leases are accounted for by recognising an ROU asset and a
lease liability except for:
-
short-term leases (defined as leases with a lease term of 12
months or less and which do not contain a purchase option)
and;
-
leases of low-value assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 76 -
Lease payments on short-term leases and leases of low-value
assets are recognised as incurred as operating expenses on a
straight-line basis over the lease term in profit or loss.
Lease liabilities
Initial measurement
Lease liabilities are initially measured at the present value of
lease payments to be paid after the commencement date over
the lease term, discounted using the lessee’s incremental
borrowing rate, if the interest rate implicit in the lease cannot be
readily determined.
The lessee’s incremental borrowing rate (IBR) is the rate the
Group would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with
similar terms and conditions. To determine the IBR, the Group
obtains external interest rate advice and adjusts the interest
rates to reflect the lease conditions and the underlying asset.
Lease payments included in the measurement of the lease
liabilities comprise:
-
fixed payments, including in-substance fixed payments, less
any lease incentives receivable;
-
variable lease payments that depend on an index or rate,
initially measured using the index or rate at the
commencement date;
-
amounts payable under residual value guarantees; and
-
payments arising from purchase, extension, or termination
options reasonably certain to be exercised by the Group.
Variable lease payments not dependent on an index or a rate, for
example, variable lease payments linked to the use of an
underlying asset, are not included in the measurement of lease
liabilities, and are recognised as operating expenses in profit or
loss as incurred.
Subsequent measurement
The lease liability is subsequently measured on an amortised cost
basis using the effective interest method, where the lease liability
is increased to reflect the accretion of interest and reduced by
the lease payments made, over the lease term.
Interest expense is recognised as interest expense on lease
liabilities in profit or loss over the lease term, on the remaining
lease liability balance for each period.
Remeasurement
Lease liabilities are remeasured if:
-
there is a lease modification that is not accounted for as a
separate lease; or
-
there are changes in: the lease term; the assessment to
exercise a purchase option; amounts payable under a
residual guarantee; in-substance fixed payments; or future
lease payments arising from a change in an index or rate.
A revised discount rate is applied when there is a change in the
assessment to exercise a purchase option, the lease term or
floating interest rates. A corresponding adjustment is recognised
in the ROU asset, or in profit or loss if the carrying amount of the
ROU asset has been reduced to nil.
ROU assets
ROU assets, representing the Group’s right to use the underlying
leased asset for the lease term, are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities.
Initial measurement
The initial cost of ROU assets includes:
-
the initial measurement of the related lease liabilities
recognised;
-
any lease payments made on or before the commencement
date, less any lease incentives received;
-
initial direct costs incurred; and
-
restoration cost estimates, recognised and measured
applying AASB 137 Provisions, Contingent Liabilities and
Contingent Assets.
Subsequent measurement
ROU assets are subsequently depreciated, in accordance with the
Group's existing depreciation accounting policy, over the shorter
of the estimated useful life of the underlying asset and the lease
term. If it is reasonably certain that the Group will either obtain
ownership of the underlying asset by the end of the lease term or
exercise a purchase option, the ROU asset is depreciated over its
estimated useful life.
ROU assets are assessed for any impairment in accordance with
the Group's existing impairment accounting policy.
(o)
Acquisition of Assets
Where an entity or operation is acquired, the identifiable assets
acquired (and, where applicable, identifiable liabilities assumed)
are to be measured at the acquisition date at their relative fair
values of the purchase consideration.
Where the acquisition is a group of assets or net assets, the cost
of acquisition will be apportioned to the individual assets
acquired (and, where applicable, liabilities assumed). Where a
group of assets acquired does not form an entity or operation,
the cost of acquisition is apportioned to each asset in proportion
to the fair values of the assets as at the acquisition date.
(p) Share-Based Payment Transactions
Benefits to Employees and consultants (including Directors)
The Group provides benefits to employees and consultants
(including Directors) of the Group in the form of share-based
payment transactions, whereby employees render services in
exchange for shares or rights over shares or options (“equity-
settled transactions”).
The costs of these equity settled transactions are measured by
reference to the fair value of the equity instruments at the date
on which they are granted. The fair value of performance rights
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 77 -
granted is determined using the single barrier share option
pricing model. The fair value of options granted is determined by
using the Black-Scholes option pricing technique. Further details
of options and performance rights granted are disclosed in Note
24.
The cost of these equity-settled transactions is recognised,
together with a corresponding increase in equity, over the period
in which the performance and/or service conditions are fulfilled
(the vesting period).
At each subsequent reporting date until vesting, the cumulative
charge to the profit or loss is the product of: (i) the fair value at
grant date of the award; (ii) the current best estimate of the
number of equity instruments that will vest, taking into account
such factors as the likelihood of employee turnover during the
vesting period and the likelihood of non-market performance
conditions being met; and (iii) the expired portion of the vesting
period.
The charge to the profit or loss for the period is the cumulative
amount as calculated above less the amounts already charged in
previous periods. There is a corresponding credit to equity.
Until an equity instrument has vested, any amounts recorded are
contingent and will be adjusted if more or fewer equity
instruments vest than were originally anticipated to do so. Any
equity instrument subject to a market condition is valued as if it
will vest irrespective of whether or not that market condition is
fulfilled, provided that all other conditions are satisfied.
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 recipient
of the award, as measured at the date of modification.
If an equity-settled transaction is cancelled (other than a grant
cancelled by forfeiture when the vesting conditions are not
satisfied), 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 equity instrument is
substituted for the cancelled award and designated as a
replacement award on the date that it is granted, the cancelled
and new equity instrument are treated as if they were a
modification of the original award, as described in the preceding
paragraph.
Benefits to Vendors
The Group provides benefits to vendors of the Group in the form
of share-based payment transactions, whereby the vendor has
render services in exchange for shares or rights over shares or
options (“equity-settled transactions”).
The fair value is measured by reference to the value of the goods
or services received. If these cannot be reliably measured, then
by reference to the fair value of the equity instruments granted.
The cost of these equity-settled transactions is recognised over
the period in which the service was received.
(q) Fair Value Estimation
The fair value of financial assets and financial liabilities must be
estimated for recognition and measurement or for disclosure
purposes.
The carrying value less impairment provision of trade receivables
and payables are assumed to approximately their fair value due
to their short-term nature. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the future
contractual cash flows at the current market interest rate that is
available to the Group for similar financial instruments.
(r)
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation, it is probable that an outflow of
resources will be required to settle the obligation, and the
amount can be reliably estimated.
Provisions are measured at the present value and the best
estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate
used to determine the present value is a pre-tax rate that reflects
current market assessments of the time value of money and the
risks specific to the liability. The increase in the provision due to
the passage of time is recognised as a finance cost in profit or loss.
Rehabilitation and mine closure
The Group has obligations to dismantle and remove certain items
of mine properties, property, plant and equipment and to restore
and rehabilitate the land on which they sit.
A provision is recognised for the estimated cost of settling the
rehabilitation and restoration obligations existing at the
reporting date, discounted to present value using high quality
corporate bond market yields at the reporting date, that match
the timing of the estimated future cash outflows as closely as
possible.
Where the obligation is related to an item of mine properties,
property, plant and equipment, its cost includes the present
value of the estimated costs of dismantling and removing the
asset and restoring the site on which it is located. The related
rehabilitation asset for the Iron Ridge Mine is included in mine
properties.
The discounted value reflects a combination of an assessment of
the nature and extent of the work required, the future cost of
performing the work required, the timing of cash flows and the
discount rate. Over time, the discounted value is increased for the
change in present value based on the discount rates that reflect
current market assessments and the risks specific to the liability.
This increase in the provision, being the periodic unwinding of the
discount due to the passage of time, is recognised as a finance
cost in profit or loss.
The provision is reassessed at least annually. A change in any of
the assumptions used to determine the provisions could have a
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
FENIX RESOURCES LIMITED
- 78 -
material impact on the carrying amount of the provision. Any
change in the provision is reflected as an addition to, or
deduction from, the related rehabilitation asset in mine
properties and amortised as appropriate.
(s)
Employee Entitlements
The Group’s liability for employee entitlements arising from
services rendered by employees to reporting date is recognised
in other payables. Employee entitlements expected to be settled
within one year together with entitlements arising from wages
and salaries, and annual leave which will be settled within one
year, have been measured at their nominal amount and include
related on-costs.
(t)
Profit/loss Per Share
Basic profit/loss per share
Basic earnings per share is determined by dividing the operating
loss attributable to the equity holder of the Group after income
tax by the weighted average number of ordinary shares
outstanding during the financial year.
Diluted earnings/loss per share
Diluted earnings per share adjusts the figures used in
determination of basic earnings per share by taking into account
amounts unpaid on ordinary shares and any reduction in earnings
per share that will arise from the exercise of options outstanding
during the year.
(u)
Contributed Equity
Issued and paid-up capital is recognised at the fair value of the
consideration received by the Group. Any transaction costs
arising on the issue of ordinary shares are recognised directly in
equity as a reduction of the share proceeds received.
(v)
Dividends
The Group amended its dividend policy in July 2023 such that the
Company will consider the declaration of a dividend on an annual
basis based on the full financial year profitability of the Company
and with regard to the future funding requirements of the
business and the availability of franking credits.
(w) Comparatives
Comparative figures have been restated to conform with the
current year’s presentation. This has had no impact on the
financial statements.
(x)
Parent Entity Financial Information
The financial information for the parent entity, Fenix Resources
Limited, disclosed in Note 35 has been prepared on the same
basis as the consolidated financial statements except as set out
below:
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost and subject
to an annual impairment review.
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
FENIX RESOURCES LIMITED
- 79 -
Name of entity
Type of entity
Trustee
partner or
participant
in JV
Share
capital
Place of
incorporation
Australian
resident or
foreign
resident
Foreign
jurisdiction
of foreign
residents
Fenix Resources Limited
Body Corporate
-
100%
Australia
Australian
-
Prometheus Mining Pty
Ltd
Body Corporate
-
100%
Australia
Australian
-
Fenix Beebyn Pty Ltd
Body Corporate
-
100%
Australia
Australian
-
Fenix Shine Pty Ltd
Body Corporate
-
100%
Australia
Australian
-
Fenix Extension Hill Pty
Ltd
Body Corporate
-
100%
Australia
Australian
-
Newhaul Pty Ltd
Body Corporate
-
100%
Australia
Australian
-
Newhaul Road Logistics
Pty Ltd
Body Corporate
-
100%
Australia
Australian
-
Newhaul Commercial Pty
Ltd
Body Corporate
-
100%
Australia
Australian
-
Newhaul Residential Pty
Ltd
Body Corporate
-
100%
Australia
Australian
-
Newhaul Perenjori Pty Ltd
Body Corporate
-
100%
Australia
Australian
-
Newhaul Ruvidini Pty Ltd
Body Corporate
-
100%
Australia
Australian
-
Newhaul Port Logistics Pty
Ltd
Body Corporate
-
100%
Australia
Australian
-
Basis of preparation
This consolidated entity disclosure statement has been prepared in accordance with the Corporations Act 2001 and
includes information for each entity that was part of the consolidated entity as at the end of the financial year in
accordance with AASB 10 Consolidated Financial Statements.
Determination of tax residency
Section 295 (3A)(vi) of the Corporation Act 2001 defines tax residency as having the meaning in the Income Tax
Assessment Act 1997. The determination of tax residency involves judgement as there are different interpretations that
could be adopted, and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
- Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax
Commissioner's public guidance in Tax Ruling TR 2018/5
- Foreign tax residency
Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its
determination of tax residency to ensure applicable foreign tax legislation has been complied with (see section
295(3A)(vii) of the Corporations Act 2001).
DIRECTORS’ DECLARATION
FENIX RESOURCES LIMITED
- 80 -
The Directors of the Group declare that:
1.
The financial statements, comprising the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of financial position, consolidated statement of cash flows, consolidated
statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001 and:
(a)
comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(b)
give a true and fair view of the financial position as at 30 June 2024 and of the performance for the year
ended on that date of the consolidated entity.
2.
In the Directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as
and when they become due and payable.
3.
The Group has included in the notes to the financial statements and explicit an unreserved statement of
compliance with International Financial Reporting Standards.
4.
The consolidated entity disclosure statement in the financial statements is true and correct.
5.
The Directors have been given the declarations by the chief executive officer and chief financial officer required
by section 295A.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
Directors by:
John Welborn
Chairman
Perth
28 August 2024
Grant Thornton Audit Pty Ltd
Level 43 Central Park
152-158 St Georges Terrace
Perth WA 6000
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
Independent Auditor’s Report
To the Members of Fenix Resources Limited
Report on the audit of the financial report
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.
Opinion
We have audited the financial report of Fenix Resources 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, consolidated statement of
changes in equity and 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:
a giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance
for the year ended on that date; and
b 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
- 81 -
Grant Thornton Audit Pty Ltd
Key audit matter
How our audit addressed the key audit matter
Asset Acquisition – Note 4
The Group acquired assets from Mount Gibson Iron
Limited’s Mid-West Operations during the year. The
Group determined the acquisition was not a business
combination within the scope of AASB 3 Business
Combinations. In performing the purchase price
allocation for the acquisition, the Group identified and
estimated the fair value of all assets acquired.
The consideration paid was $29,495,000 which was
allocated the assets acquired based on relative fair
values.
This area is a key audit matter due to the
management judgements applied in determining that
the transaction is not in scope of AASB 3, and
estimates in determining the relative fair value of the
acquired assets.
Our procedures included, amongst others:
•
Obtaining and reviewing the terms and conditions
contained in the Sales and Purchase agreement,
including assessing management’s analysis of the
key terms of the contract;
•
Evaluating management’s conclusion that the
transaction did not qualify as a business combination
and whether management has properly identified,
classified, and measured all of the consideration
transferred;
•
Evaluating and challenging management’s
assessment and valuation of the separately
identifiable intangible asset;
•
Evaluating the work and conclusions of the
independent expert engaged by management;
•
Sighting material assets acquired to confirm their
existence;
•
Ensuring management’s allocation of the
consideration transferred to the acquired assets on a
relative fair value basis is appropriate and in line with
the accounting standards; and
•
Assessing the appropriateness of the related financial
statement disclosures.
Intangible Assets – Note 17
The Group recognised goodwill totalling $11,461,207
as at 30 June 2024 relating to the logistics cash-
generating unit (CGU). Goodwill is required to be
assessed for impairment annually by management as
prescribed in AASB 136 Impairment of Assets.
Management performs annual impairment testing per
AASB 136 to ensure the CGU’s recoverable amount is
greater than the carrying value, utilising either the
greater of fair value less costs of sale or its value-in-
use.
The Group uses a discounted cash flow model for the
value-in-use approach to determine the recoverable
amount. In doing so, management considers the
following key inputs:
•
Forecasted budgeted financial performance;
•
Estimated gross future cash flows;
•
Working capital adjustments;
•
Estimated capital expenditure; and
•
Discount rate applied.
This area is a key audit matter due to management
estimates and judgements applied evaluating whether
goodwill is impaired.
Our procedures included, amongst others:
•
Considering the appropriateness of management’s
CGU assessment in accordance with AASB 136;
•
Challenging the appropriateness of management’s
revenue and cost forecasts by comparing the
forecasted cash flows to actual cash flows historically
achieved;
•
Reviewing management’s value-in-use calculations
by:
−
Evaluating the forecast cash inflows and outflows
to be derived by the CGU’s assets for
reasonableness;
−
Testing the mathematical accuracy of the
calculations;
−
Assessing the discount rates applied to forecast
future cash flows for reasonableness;
−
Performing sensitivity analysis on the significant
inputs and assumptions made by management in
preparing its calculation; and
•
Assessing the appropriateness of the related financial
statement disclosures.
- 82 -
Grant Thornton Audit Pty Ltd
Information other than the financial report and auditor’s report thereon
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 we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The directors of the Company are responsible for the preparation of:
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 in accordance with the Corporations
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 Group’s ability 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 have 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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 20 to 27 of the Directors’ report for the
year ended 30 June 2024.
In our opinion, the Remuneration Report of Fenix Resources Limited, for the year ended 30 June 2024
complies with section 300A of the Corporations Act 2001.
- 83 -
Grant Thornton Audit Pty Ltd
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.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B P Steedman
Partner - Audit and Assurance
Perth, 28 August 2024
- 84 -
ADDITIONAL INFORMATION
FENIX RESOURCES LIMITED
- 85 -
Additional information required by the Australian Securities Exchange and shown elsewhere in this report is set out
below. The information is current as at 19 August 2024.
(a)
20 Largest Shareholders — Ordinary Shares as at 19 August 2024
Position
Holder Name
Holding
% IC
1
MOUNT GIBSON MINING LIMITED
72,500,000
10.06%
2
CITICORP NOMINEES PTY LIMITED
44,383,422
6.16%
3
EXXTEN PTY LTD
40,990,000
5.69%
4
MR GARRY WILLIAM PLOWRIGHT & MRS DONELLA MAY PLOWRIGHT
22,960,000
3.19%
5
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
20,831,154
2.89%
6
JOHN WELBORN
20,500,000
2.84%
7
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
15,716,412
2.18%
8
AGNI INTERNATIONAL PTE LTD
13,919,379
1.93%
9
CYCLIS GROUP PTY LTD
13,354,752
1.85%
10
VULCAN DEVELOPMENT LTD
11,882,395
1.65%
11
KEONG LIM PTY LIMITED
9,924,300
1.38%
12
BNP PARIBAS NOMINEES PTY LTD
9,752,759
1.35%
13
TITAN ASSETS PTY LTD
8,085,000
1.12%
14
MR KENNETH JOSEPH HALL
7,100,000
0.99%
15
BNP PARIBAS NOMS PTY LTD
6,636,705
0.92%
16
PRE-OWNED ROAD TANKERS PTY LTD
6,000,000
0.83%
17
JETOSEA PTY LTD
5,743,858
0.80%
18
WARBONT NOMINEES PTY LTD
5,394,348
0.75%
19
ALET INVESTMENTS PTY LTD
4,475,250
0.62%
20
VIBODA SENANAYAKE
4,312,870
0.60%
Total
344,462,604
47.80%
(b)
Substantial Shareholders
The names of substantial shareholders and the number of shares to which each substantial shareholder and their
associates have a relevant interest, as disclosed in substantial shareholding notices given to the Company, are as
set out below:
Substantial Shareholder
Number of Shares
Mount Gibson Iron Limited (1)
72,500,000
Craig Douglas Mitchell (2)
49,990,000
1
As lodged with ASX on 19 August 2024
2
As lodged with ASX on 4 July 2023
ADDITIONAL INFORMATION
FENIX RESOURCES LIMITED
- 86 -
(c)
Unquoted Securities – as at 19 August 2024
Set out below are the classes of unquoted securities currently on issue:
Number
Holders
Class
7,000,000
2
Options exercisable at $0.30 and expiring on 21 July 2026
6,000,000
5
Options exercisable at $0.50 and expiring on 21 July 2026
12,500,000
1
Options exercisable at $0.30 and expiring on 21 July 2028
28,424,504
16
Performance Rights
(d)
Distribution of holders
Ordinary Shares
Category (size of holding)
Holders
Total Units
% Issued Share Capital
1 – 1,000
198
64,304
0.01%
1,001 – 5,000
1,821
5,608,235
0.77%
5,001 – 10,000
1,178
9,659,228
1.34%
10,001 – 100,000
3,000
113,838,120
15.80%
100,001 – and over
693
591,448,033
82.08%
Total
6,890
720,617,920
100.00%
Options exercisable at $0.30 and expiring on 21 July 2026
Category (size of holding)
Holders
Total Units
% Issued Share Capital
1 – 1,000
-
-
-
1,001 – 5,000
-
-
-
5,001 – 10,000
-
-
-
10,001 – 100,000
-
-
-
100,001 – and over
2
7,000,000
100.00%
Total
2
7,000,000
100.00%
Options exercisable at $0.50 and expiring on 21 July 2026
Category (size of holding)
Holders
Total Units
% Issued Share Capital
1 – 1,000
-
-
-
1,001 – 5,000
-
-
-
5,001 – 10,000
-
-
-
10,001 – 100,000
-
-
-
100,001 – and over
5
6,000,000
100.00%
Total
5
6,000,000
100.00%
Options exercisable at $0.30 and expiring on 21 July 2028
Category (size of holding)
Holders
Total Units
% Issued Share Capital
1 – 1,000
-
-
-
1,001 – 5,000
-
-
-
5,001 – 10,000
-
-
-
10,001 – 100,000
-
-
-
100,001 – and over
1
12,500,000
100.00%
Total
1
12,500,000
100.00%
ADDITIONAL INFORMATION
FENIX RESOURCES LIMITED
- 87 -
Performance Rights
Category (size of holding)
Holders
Total Units
% Issued Share Capital
1 – 1,000
-
-
-
1,001 – 5,000
-
-
-
5,001 – 10,000
-
-
-
10,001 – 100,000
2
195,253
0.69%
100,001 – and over
14
28,229,251
99.31%
Total
16
28,424,504
100.00%
(e)
Unquoted Equity Security Holders with Greater than 20% of an Individual Class
As at 19 August 2024, the following classes of unquoted securities had holders with greater than 20% of that class
on issue:
% Interest
Options exercisable at $0.30 and expiring on 21 July 2028
MOUNT GIBSON IRON LTD
100.00%
Options exercisable at $0.30 and expiring on 21 July 2026
DBAA PTY LTD
50.00%
MULLOWAY PTY LTD
50.00%
Options exercisable at $0.50 and expiring on 21 July 2026
DBAA PTY LTD
25.00%
MULLOWAY PTY LTD
25.00%
Performance Rights
JOHN WELBORN
52.77%
(f)
Securities Subject to Escrow
As at 19 August 2024, there are no securities currently subject to escrow.
(g)
Unmarketable Parcels
The number of shareholders holding less than a marketable parcel is 407 as at 19 August 2024 (being 1,724 shares
based on a share price of $0.29 at 19 August 2024).
(h)
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary Shares
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or
by proxy has one vote on a show of hands.
Options
There are no voting rights attached to any class of options that are on issue.
Performance Rights
There are no voting rights attached to any class of performance rights that are on issue.
(i)
On-market Buy-Back
Currently there is no on-market buy-back of the Company’s securities.
ADDITIONAL INFORMATION
FENIX RESOURCES LIMITED
- 88 -
(j)
Corporate Governance
Pursuant to the ASX Listing Rules, the Company’s Corporate Governance Statement will be released in conjunction
with this report. The Company’s Corporate Governance Statement is available on the Company’s website at:
http://fenixresources.com.au/about/corporate-governance/