Directors’ Report
Annual Report
FOR THE YEAR ENDED
31 DECEMBER 2023
CORPORATE DIRECTORY
DIRECTORS
Mr Brett Fraser
Executive Chairman (Appointed 31 August 2023)
Non-Executive Chairman (Appointed 10 July 2022-31 August 2023)
Mr Mark Hepburn
Non-Executive Director
Mr Bradley Gordon
Non-Executive Director
Mr Scott Lowe
Managing Director (Resigned 31 August 2023)
COMPANY SECRETARY
Mr Stuart Usher
REGISTERED ADDRESS AND PRINCIPAL PLACE OF BUSINESS
Level 1, 247 Oxford Street, Leederville WA 6007
SHARE REGISTRY
Computershare Investor Services Pty Limited Level 17, 221 St Georges Terrace, Perth WA 6000
Telephone: 1300 850 505 (investors within Australia)
Telephone: +61 (0)3 9415 4000
Email: web.queries@computershare.com.au
Website: www.investorcentre.com
AUDITORS
PricewaterhouseCoopers, Brookfield Place, Level 15, 125 St Georges Terrace, Perth WA 6000
CONTENTS
Firefinch Limited Annual Report | 31 December 2023
1
Review of Operations
2
Directors report
3
Corporate governance statement
19
Auditor's independence declaration
20
Consolidated statement of profit or loss and other comprehensive income
21
Consolidated statement of financial position
22
Consolidated statement of changes in equity
23
Consolidated statement of cash flows
24
Notes to the consolidated financial statements
25
Directors' declaration
49
Independent auditor's report
50
REVIEW OF OPERATIONS
Firefinch Limited Annual Report | 31 December 2023
2
MORILA GOLD PROJECT
Since 3 November 2022, Firefinch Limited (Firefinch or the Company) has not had active operational engagement over the
Morila Gold Mine.
The Company has ceased to receive reliable information regarding production and operations at the Morila Gold Mine.
The Company was officially informed that production at the Morila Gold Mine had ceased in December 2023 with loss of
control deemed to be effected as at 30 November 2022 for the purposes of AASB 10 Consolidated Financial Statements. As
a result Firefinch deconsolidated the accounts of Morila SA as of that date.
On 3 August 2023, Firefinch received a letter from the Minister of Mines, Mali (Letter) advising that the Government of Mali
(Government) would not approve any deed of sale of Firefinch interest in Société des Mines de Morila SA (Morila SA) unless
the Company resolved issues relating to the Morila Gold Mine.
On 8 May 2024, the Company announced that it has entered into a memorandum of understanding (MOU) with the
Government of Mali (Government), which settles all disputed matters and will facilitate the Government acquiring the
Morila Gold Mine for USD$1, with the transfer of all shares in Société des Mines de Morila SA (Morila SA) and all mining
titles held by subsidiaries in Mali for USD$1 to a government company (SOREM Mali SA).
Firefinch is currently finalising the share transfer and loan assignment agreement with SOREM Mali SA. In the course of
operating the Morila Mine, Morila SA had received financial support from Firefinch in the form of a loan of US$102,668,563,
and from Morila Limited in the form of a loan of US$22,691,081 (Assigned Loans). The Morila SA Sale involves Firefinch
assigning the Assigned Loans to SOREM Mali SA and in doing so removes the right of Firefinch and Morila Limited to receive
the benefit of those Assigned Loans.
On 7 May 2024, Leo Lithium, Ganfeng and Firefinch entered into a deed of Covenant and Release whereby Firefinch has
agreed to make a $11,500,000 contribution to Leo Lithium. The deed includes an unconditional release by Firefinch in
favour of Leo Lithium and its associates from all claims in relation to the Demerger Deed signed 29 April 2022.
Firefinch holds its investment in the Morila Gold Project at $nil (2022:$nil).
CORPORATE
In 2022 the Board of Firefinch commenced a process to find a new owner for Morila SA, as well as undertaking a separate
strategic process inviting suitable bidders to submit proposals to the Company that deliver compelling value and liquidity to
Firefinch shareholders. Firefinch Limited had engaged Treadstone Resource Partners to assist with the process.
The board advised the market on 21 March 2023 that the Company was in advanced negotiations relating to a potential
transaction for the sale of its 80% interest in Morila SA, and separately that multiple non-binding indicative proposals had
been received via the Treadstone strategic process that were sufficiently robust to warrant continued negotiation and
discussion with the bidding parties.
Given the Letter received on 3 August 2023 and position of the Government, the Company ceased negotiations with
participants in the process, and the Treadstone engagement has been terminated.
The Company has now stopped all expenditure other than that required to maintain the corporate entity, its operation and
dealings with the Government.
FORWARD LOOKING STRATEGY
The Company continues with the process of obtaining a class ruling from the Australian Taxation Office as to the tax
treatment on the return of assets to Firefinch shareholders. Subject to the outcome of the class ruling, shareholder
approval, the Company may then be in a position to distribute remaining assets.
BUSINESS RISKS
Exposure to economic, environmental and social sustainability risks
Firefinch Limited and its subsidiaries (The Group) has potentially material exposure to economic, environmental, social and
governance risks, including changes in community expectations, and environmental, social and governance legislation
(including, for example, those matters related to climate change). The Group contracts suitable personnel where required to
assist with the management of its exposure to these risks. The Group’s approach to risk management is discussed in more
detail in the Group’s Corporate Governance Statement and Risk Management Policy which can be found on the Group’s
website.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
3
The Directors present their report together with the financial statements for Firefinch Limited (ABN: 11 113 931 105)
(Firefinch or the Company) and its subsidiaries (the Group) for the year ended 31 December 2023.
DIRECTORS
The following persons were directors of the Company during the financial year and up to the date of this report, unless
otherwise stated.
Brett Fraser
Executive Chairman (Appointed 31 August 2023)
Non-Executive Chairman (10 July 2022-31 August 2023)
Non-Executive Director
Mark Hepburn
Non-Executive Director
Bradley Gordon
Non-Executive Director
Scott Lowe
Managing Director (Resigned 31 August 2023)
PRINCIPAL ACTIVITIES
During the year the principal activities of the Group consisted of Corporate operations to progress resolution of the Morila
SA divestment and maintain the value of Shareholder interests.
FINANCIAL RESULT
The Group made a Loss for the year of $1,682,352 (2022: $51,078,010 Loss) from continuing operations. During the year, the
Group recognised a net profit from discontinued operations of $Nil (2022: Profit of $359,959,588). At the end of the year, the
Group had cash and cash equivalents of $33,456,049 (2022: $37,946,133) and a working capital surplus of $31,924,200 (2022:
$37,038,221). The net assets of the Group have decreased by $2,644,288 to $109,226,231 at 31 December 2023 (2022:
$111,870,519). The Group had a net cash outflow from operating activities of $4,384,798 (2022: $51,303,375).
The following table represents the Group’s performance over the past five years.
(1) The share price is as of the last day of trading, 24 June 2022. The Company remained suspended from quotation until
being removed from the Australian Securities Exchange (ASX) on 1 July 2024.
NON GOING-CONCERN BASIS OF PREPARATION
During the year ended 31 December 2023, the board continued to seek a new owner for the Morila Gold Mine in Mali, as
well as undertaking a strategic review process by inviting and reviewing bids form suitable parties to deliver compelling value
and liquidity to shareholders.
In May 2024 Firefinch entered into a memorandum of understanding with the Malian Government, which settles all disputed
matters and will facilitate the Government of Mali acquiring the Morila Gold Mine for USD$1, with the transfer of all shares
in Morila SA and all mining titles held by subsidiaries in Mali for USD$1 to a government company (SOREM Mali SA). Firefinch
is currently finalising the share transfer and loan assignment agreement with Sorem Mali SA. In the course of operating the
Morila Mine, Morila SA had received financial support from Firefinch in the form of a loan of US$102,668,563, and from
Morila Limited in the form of a loan of US$$22,691,081. The Morila SA Sale involves Firefinch assigning the Assigned Loans to
SOREM Mali SA and in doing so removes the right of Firefinch and Morila Limited to receive the benefit of those Assigned
Loans.
The settlement agreement with the Government of Mali has been critical in allowing the Company to progress its plan to
return value to shareholders through the distribution of the remaining available assets. The process to distribute assets
requires the completion of multiple steps. While it is difficult to put specific timeframes around the various steps, the Board
is committed to completing the process as quickly as reasonably practicable.
Year ended
31 December
2023
Year ended
31 December
2022
Year ended
31 December
2021
Year ended
31 December
2020
Year ended
31 December
2019
Profit/ (loss) for the period, $
(1,682,352)
308,881,578
(43,952,826)
1,043,816
(3,504,280)
Dividends paid, $
nil
nil
nil
nil
nil
Net assets, $
109,226,231
111,870,519
251,932,804
99,393,236
27,166,106
Share price, $
0.20(1)
0.20(1)
0.865
0.175
0.097
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
4
The Company continues with the process of obtaining a class ruling from the Australian Taxation Office as to the tax treatment
on the return of assets to Firefinch shareholders. Subject to the outcome of the class ruling and shareholder approval, the
Company may then be in a position to distribute remaining assets to shareholders. This is likely to be by way of an in-specie
distribution of the Leo Lithium shares held by Firefinch to Shareholders.
The availability of remaining cash to distribute to shareholders will be determined following a payment of the Firefinch
contribution (A$11,500,000) pursuant to the Tripartite Deed, satisfaction of any tax liabilities and the cost of dealing with and
arguing any claims against Firefinch, (See Note 26.) including the Notice of Arbitration, and, accounting for remaining
corporate operating costs.
As soon as practicable, and following approval and completion of relevant processes, which includes obtaining relevant
Australian Taxation Office rulings, it is Firefinch’s current intention to convene a general shareholder meeting to seek approval
for an in-specie distribution of the Leo Lithium shares to Firefinch shareholders, and the distribution to Firefinch shareholders
of the remaining cash reserves. The Board is committed to its endeavours to return assets to shareholders, and this is the
most realistic outcome for the Group at the time of this report.
On this basis, the Directors have determined that it is more appropriate that the consolidated financial statements be
prepared on the basis that the Group is not a going concern for financial reporting purposes. Non-financial assets have been
written down to the lower of their carrying amounts and their net realisable values. Net realisable value is the estimated
selling price the entity expects to obtain under the circumstances less the estimated costs necessary to make the sale. Non-
current assets and non-current liabilities have been reclassified to current where they are expected to be realised or settled
within the next twelve months from the reporting date. No additional liabilities have been recognised as a result of the
decision made by the Company. The comparative year is presented on a going concern basis.
For further information, refer to Note 1 to the financial statements, together with the auditor’s report.
CORPORATE
Dividends
There were no dividends paid or recommended during the year ended 31 December 2023 (2022: No dividends were paid or
recommended).
Issue of securities
During the year, the Company issued 1,103,356 new performance rights and 1,603,356 fully paid ordinary shares in relation
to the conversion of Performance Rights.
A further 4,588,600 Performance Rights expired.
There were no Options issued during the year.
Change of Directors and Officers
On 31 August 2023, Mr Scott Lowe ended in his role as Managing Director by mutual agreement. From this date Mr Brett
Fraser performed the role of executive chairman.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Group during the year not otherwise disclosed in the
Review of Operations above, or the Consolidated Financial Statements.
MATTERS SUBSEQUENT TO BALANCE DATE
Deed of Covenant and Release with Leo Lithium
On 7 May 2024, Leo Lithium, Ganfeng and Firefinch entered into a deed of Covenant and Release whereby the Company has
agreed to make a $11,500,000 contribution to Leo Lithium. The deed includes an unconditional release by Firefinch Limited
in favour of Leo Lithium and its associates from all claims in relation to the Demerger Deed signed 29 April 2022.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
5
Memorandum of Understanding (MOU) signed with the Mali Government
On 8 May 2024, the Company announced that Firefinch, Leo Lithium Limited and Ganfeng and the Government of Mali had
signed an MoU to settle all disputed matters. The MoU provides for the settlement of the Government’s claims against
Firefinch Limited and Leo Lithium whereby:
● Ganfeng on behalf of Leo Lithium has made payment to the Government of US$60 million in the name of and on
behalf of Leo Lithium and Firefinch to, among other things, settle all disputes with the Government concerning
Morila SA;
● Firefinch has agreed to transfer its shares together with the assigned loans in Morila SA for USD$1 and all mining
titles held by its subsidiaries in Mali for USD$1 to SOREM Mali SA.
Arbitration Notice
On 27 May 2024, the Company announced that it had received a Notice of Arbitration under the Arbitration Rules of the
United Nations Commission on International Trade Law (Arbitration Notice) from Entreprise Générale Traoré et Frères SARL
(EGTF). The Arbitration Notice is in connection with Morila SA’s purported failure to pay amounts under certain outstanding
invoices to EGTF further to a mining services contract between EGTF and Morila SA dated 2021. EGTF claims an amount of no
less than XAF 12,838,591,019 ($31,853,880).
Leo Lithium Limited Suspension
On 17 July 2023, Leo Lithium entered a trading halt. Upon reinstatement to quotation on 9 September 2023 the company
share price fell sharply, closing at $0.505c prior to again entering a trading halt on 15 September 2023. Leo Lithium remains
suspended on the ASX and is continuing to resolve outstanding matters with the ASX with the objective of returning to
quotation on the ASX . Refer to Note 12 for details of Firefinch shareholding.
Removal from ASX
On 1 July 2024 the Company was removed from the Official List of the ASX.
LIKELY DEVELOPMENTS
The Company hopes to obtain a class ruling from the Australian Tax Office as to the tax treatment on the return of assets to
Firefinch shareholders. Subject to the outcome of the class ruling and shareholder approval, the Company may then be in a
position to distribute the Leo Lithium shares. This is likely to be by way of an in-specie distribution of the Leo Lithium shares
held by Firefinch to Shareholders.
There are no other likely developments of which the Directors are aware which could be expected to significantly affect the
results of the Group’s operations in subsequent financial years not otherwise disclosed in the Review of Operations or the
Matters Subsequent to Balance Date sections of the Directors’ Report.
ENVIRONMENTAL REGULATIONS
The Group holds various permits issued by the relevant mining and environmental protection authorities that regulate its
exploration and mining activities in Mali. These permits include requirements, limitations and prohibitions on exploration
and mining activities in the interest of environmental protection. The holder of such permits must therefore adhere to the
various conditions which regulate environmental rehabilitation of areas disturbed during the course of the Group’s
exploration and exploitation activities.
Since 3 November 2022, the Company has not had active operational engagement over the Morila Gold Mine, with
production ceasing in December 2023. As a result of this, Firefinch has ceased to receive reliable information regarding
production and operations at the Morila Gold Mine and therefore Firefinch is unable to ascertain whether there is continued
compliance with environmental laws from Morila during the period.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
6
INFORMATION ON DIRECTORS
The names, qualifications, experience and special responsibilities of the directors in office during or since the end of the
financial year are as follows. Directors were in office for the entire financial year unless otherwise stated.
Mr Brett Fraser – Non-Executive Chairman
Executive Chairman (Appointed 31 August 2023)
Non-Executive Chairman (Appointed 10 July 2022 - 31 August 2023)
Non-Executive Director (Appointed 11 November 2020 – 10 July 2022)
Mr Fraser is an experienced ASX director, currently holding a position as Director of central-west African iron ore
company, Sundance Resources Limited. Mr Fraser’s deep knowledge (acquired over 35 years’ corporate finance
experience) is a great asset to the Company, particularly regarding business acquisitions, business strategy and
restructuring, and corporate governance. Mr Fraser is a Fellow of CPA Australia, a Fellow of Financial Services Institute of
Australasia, and a Fellow of the Governance Institute of Australia. He holds a Bachelor of Business (Accounting) and a
Graduate Diploma in Finance (SIA).
Other current directorships:
Sundance Resources Limited
Former directorships in the last three years:
None
10 March 2018 - present
Mr Mark Hepburn – Non-Executive Director
(Appointed 14 November 2018)
Mr Hepburn is a Corporate and Financial Markets Executive with over 28 years' experience in a range of management
and board positions for Institutional Stockbroking and Derivatives Trading desks for major Financial Institutions.
His career has included roles in Sydney with Deutsche Bank and Macquarie Bank, managing global derivatives distribution
sales teams. Mr Hepburn has worked as an Executive Director of a leading Perth stockbroking firm during which time he
was involved in numerous fund-raising transactions for ASX listed industrial and resource companies. Mr Hepburn was
also Managing Director of his own Corporate Advisory firm which specialised in executing corporate and equity
transactions for ASX listed resources companies.
His experience also includes working as a corporate executive within mining companies and he has been a member of
the Australian Institute of Company Directors since 2008.
Mr Hepburn has a degree in Economics and Finance (B.Econ. & Fin 1992 UWA).
Other current directorships:
Castile Resources Limited
Former directorships in the last three years:
Leo Lithium Limited
29 November 2019 - present
21 April 2022 – 15 November 2022
Mr Bradley Gordon – Non-Executive Director
(Appointed 6 April 2021)
Mr Gordon is a seasoned resource industry executive with 30 years’ experience in the gold, copper and mineral sands
industries. Mr Gordon has deep operational and gold industry experience, both in large scale open pit mining and
underground operations.
Mr Gordon has significant African experience, particularly as CEO of Acacia Mining. Mr Gordon was CEO of Intrepid Mines
for five years during which its market capitalisation increased to A$1.4 billion through a series of corporate deals with the
value primarily driven by the discovery and development of the world-class Tujuh Bukit gold-copper-silver project in
Indonesia. He was CEO of Emperor Mines in Fiji and Managing Director of Placer Dome Asia Pacific. He has supervised
operations at mines such as Porgera in PNG, Kanowna Belle, Paddington and Kundana all in Western Australia.
Mr Gordon holds a Mining Engineering degree from the Western Australia School of Mines (Curtin University) and an
Executive MBA from INSEAD, France.
Other current directorships:
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
7
Savannah Goldfields Limited
Clara Resources Australia Ltd
Former directorships in the last three years:
Aus Tin Mining Limited
Laneway Resources Limited
13 December 2020 - present
17 May 2021 - present
17 May 2021 – 31 October 2023
11 December 2020 – 31 October 2023
Mr Scott Lowe – Managing Director
(Appointed 17 October 2022, Resigned 31 August 2023)
Mr Lowe is a Senior Mining Executive with extensive experience in the industry spanning more than 35 years in a wide range
of commodities and countries. His most recent roles have been with South32 in Australia and as CEO of ArcelorMittal’s
West African mining business in Liberia. Previous roles have included CEO of publicly listed mining exploration and
development companies and senior management positions in BHP and Peabody Pacific.
During the course of his career, Mr Lowe has worked in a number of African jurisdictions and delivered outstanding results
in challenging environments including; achieving record production and low costs in an open cut operation in West Africa
during the pandemic, managing the start-up of new open cut and underground mines in South Africa and West Africa, as
well as negotiating successful Joint Ventures with BHP and Glencore.
Mr Lowe holds a post-graduate qualification in Business Management (MBA) along with tertiary qualifications in Mining
Engineering, a Mine Manager’s Certificate of Competency (Australia), and a Diploma in Marine Terminal Operations from
King’s Point Merchant Marine Academy NY USA.
Other current directorships:
Former directorships in the last three years:
None
None
DIRECTORS’ MEETINGS
The number of meetings of the directors and the number of meetings attended by each director during the year ended 31
December 2023.
Directors
Directors’ Meetings
Remuneration and
Nomination
Committee
Corporate Social
Responsibility
Committee
Audit Committee
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
B. Fraser
10
10
-
-
-
-
-
-
M. Hepburn
10
9
-
-
-
-
-
-
B. Gordon
10
10
-
-
-
-
-
-
Former Directors
S.Lowe(1)
7
7
-
-
-
-
-
-
(1) S. Lowe resigned 31 August 2023.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
8
DIRECTORS’ INTERESTS
The following relevant interests in shares and performance rights of the Company were held directly and beneficially by the
directors as at the date of this report:
Fully paid
ordinary shares
Listed Options
Unlisted
performance/share
rights
Unlisted Options
Non-Executive Directors
B. Fraser
536,206
-
-
-
M. Hepburn
1,500,000
-
-
-
B Gordon
78,947
-
-
-
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for the Company’s Non-Executive Directors and Executive
Directors for the year ended 31 December 2023 in accordance with the Corporations Act 2001 (the Act) and its regulations.
There were no other Key Management Personnel (KMP) during the year 31 December 2023. For the purpose of this report,
KMP are defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Company and the Group, directly or indirectly, including any director (whether exclusive or otherwise) of the
Parent entity. This information has been audited as required by section 308(3C) of the Act.
KMPs of the Company during the financial year ended 31 December 2023:
Position
Commenced/ Resigned
Brett Fraser
Executive Chairman
Non-Executive Chairman
Appointed 10 July 2022
Appointed 10 July 2022 - 31 August 2023
Mark Hepburn
Non-Executive Director
Appointed 14 November 2018
Bradley Gordon
Non-Executive Director
Appointed 6 April 2021
Scott Lowe
Managing Director
Appointed 17 October 2022
Terminated 31 August 2023
The Remuneration Report has been set out under the following main headings:
1.
Remuneration Governance
2.
Executive Remuneration Framework
3.
2023 Non-Executive Director Remuneration Framework
4.
2023 Non-Executive Director Equity Plan Terms
5.
Statutory Performance Indicators
6.
Details of Remuneration
7.
Service Agreements
8.
Share Based Compensation
9.
Additional Information
1. Remuneration Governance
a) Remuneration and Nomination Committee
The Board Dissolved all board subcommittees in 2022 and considers all Nomination and Remuneration matters as a full board.
The Board has worked with KMP and management to apply a robust governance framework and to ensure the Company’s
remuneration strategy supports the creation of sustainable shareholder value.
In relation to remuneration, the responsibilities of the RNC include:
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
9
I.
reviewing the Company's Remuneration Policy and making appropriate recommendations to the Board. In
considering the Company’s Remuneration Policy, the Committee refers to the guidelines for non-executive director
remuneration and executive remuneration set out in the commentary to recommendation 8.2 in the ASX Principles
and Recommendations;
II.
reviewing senior executives' remuneration and incentives, and making appropriate recommendations to the Board;
III.
reviewing the remuneration framework for non-executive directors, including the process by which the pool of
directors’ fees approved by shareholders is allocated to directors, and making appropriate recommendations to the
Board;
IV.
reviewing and making recommendations to the Board on short and long-term incentive compensation plans,
including equity based plans;
V.
reviewing superannuation arrangements for directors, senior executives and other employees;
VI.
reviewing termination payments;
VII.
reviewing remuneration related reporting requirements, including disclosing a summary of the Company’s policies
and practices (if any) regarding the deferral of performance-based remuneration and the reduction, cancellation,
or clawback of performance-based remuneration in the event of serious misconduct or a material misstatement in
the Company’s financial statements;
VIII.
reviewing whether there is any gender or other inappropriate bias in remuneration for directors, senior executives,
or other employees;
IX.
monitoring compliance with applicable legal and regulatory requirements relevant to remuneration-related
matters and any changes in the legal and regulatory framework in relation to remuneration; and
X.
performing such other functions as required by law or the Company’s Constitution.
b) Use of Remuneration Advisors
The Committee’s Charter allows the RNC access to specialist, external remuneration advice about remuneration structure
and levels.
No Advice was required in 2023
c) Remuneration Policy
The Company adopted a Remuneration Policy in 2021 which remained unchanged in 2023.
The Remuneration Policy serves to guide the RNCs recommendations on remuneration and the Board’s adoption of those
recommendations and covers all employees of the Group, including KMP, executives and employees of Firefinch subsidiaries.
The RNC administers the Remuneration Policy.
The Policy seeks to provide the foundation for competitive remuneration to attract, motivate and retain high quality
individuals in order to deliver Firefinch’s strategy. Remuneration and incentive programs are structured to reward employees
for their individual and collective contribution to the Company’s success and business objectives, for appropriate risk-taking,
for outperformance and for creating and enhancing value for shareholders.
The Policy informs the RNC on matters including:
i.
Remuneration market positioning (taking into consideration industry benchmarks, market forces and talent
availability);
ii.
Remuneration mix including fixed and variable remuneration strategies;
iii. Setting remuneration; and
iv. Reviewing remuneration levels annually
2.
Executive Remuneration Framework
a)
Executive Remuneration Framework
The following remuneration framework was adopted in 2022 and remained unchanged in 2023. The Board sought to ensure
that the framework is best fit for purpose and aligns with shareholder value creation.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
10
The framework covers executives of the Company. NED remuneration is dealt with separately below.
Remuneration Category
Purpose of Category
Fixed remuneration
Fixed remuneration consists of base salary, superannuation, and other non-
monetary benefits such as employee leave.
Fixed remuneration is linked to the market rate of the role and is intended to
compensate for fulfilling the scope of the employees’ roles and responsibilities
and the employees’ skills, experience, and qualifications.
At-risk remuneration – Short Term
Incentive (STI)
The primary purpose of the STI is to incentivise executives to achieve the annual
STI performance targets set by the Board at the beginning of the period. The STI
performance targets clearly set out the annual performance targets the Board
requires from executives and achievement of the targets is determined by the
Board at the end of the annual period.
The STI comprises an annual award which is measured over a 12 month
performance period and is payable in cash.
The performance targets are contained in a balanced scorecard with financial and
non-financial measures, as well as a mixture between corporate and personal
measures.
At the Boards’ absolute discretion, in the event of a fatality, no payout will be
made.
At-risk remuneration – Long Term
Incentive (LTI)
The LTI is designed to incentivise executives in the creation of long-term
shareholder value as evidenced by market and non-market measures, by
rewarding executives for the achievement of long-term performance targets set
by the Board at the beginning of the long-term performance period. The long-term
targets are set out by the Board to provide clear and measurable direction as to
what the Board and shareholders require from executives by the end of the long-
term performance period.
b) Remuneration Mix and Incentive Opportunity
The remuneration mix and incentive opportunity includes a fixed remuneration component, a Short Term Incentive Scheme
(STI) and a Long Term Incentive Scheme (LTI).
The table below outlines the incentive opportunity as a percentage of fixed remuneration.
Incentive Opportunity
STI Target
STI Stretch
LTI
Maximum Incentive Opportunity
Managing Director1
30%
50%
100%
150%
Key Management Personnel
-
-
-
-
1 Managing Director Scott Lowe, resigned 31 August 2023
3. 2023 Non-Executive Director Remuneration Framework
a) Non-Executive Director remuneration
Non-Executive Directors (NEDs) are paid in cash. The Board may determine that fees may be paid by securities or a
combination of cash and securities (the issue of securities subject to shareholder approval as required), whether pursuant to
the terms of an equity plan or otherwise. Such determination is given regard to market practice and applicable corporate
governance principles.
Fees paid to NEDs cover all activities associated with their role on the Board. The Board may from time to time determine
that additional fees are payable to NED’s who chair or are members of Board subcommittees or who perform special duties
or extra services on behalf of the Company.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
11
Consistent with the Company’s Constitution, the aggregate quantum of all fees (including superannuation) paid to NEDs in
each financial year must not exceed the aggregate NED fee pool amount set by shareholders from time to time in General
Meetings.
NEDs are not provided with retirement benefits.
The RNC will review NED fees annually and report its findings to the Board, together with any recommendations (if considered
appropriate) for revised fees.
The Board retains discretion to adopt the RNC recommendations with or without amendments. In setting NED fees, the Board
will have regard to market rates and the circumstances of the Company and the resulting expected workloads of the Directors.
b) Directors’ fee limits
The aggregate amount of fees payable to Non-Executive Directors is subject to approval by shareholders. The maximum
aggregate amount of fees that is approved for payment to Non-Executive Directors is $800,000 per annum, excluding the
value of approved share-based payments. This limit was approved by shareholders at the General Meeting on 31 May 2022.
Table 1 – Annual board and committee fees payable to Directors
Position
$
For the period 1 January 2022 - 31 December
2023
Chairman
176,000
Non- Executive Directors
104,500
Committee chairman
22,000
Committee member
5,500
(1) The fees are inclusive of superannuation guarantee.
(2) On 28 November 2022 the Board agreed to cease all committee fees effective from 1 December 2022 and approved to reduce Director fees
from $95,000 to $60,000 and Chairman fees from $160,000 to $80,000 effective from 1 January 2023.
4. 2023 Non-Executive Director Equity Plan Terms
Historical awards were made on the following basis.
a)
The following table details the award and conditions of a long-term incentive award made separately to Mr Fraser
and Mr Gordon during 2023
How is the award delivered?
The award is delivered through the issue of Performance Rights (Rights) under the
Firefinch Limited Awards Plan (previously adopted as the Mali Lithium Limited Awards
Plan) approved by shareholders on 27 May 2019.
Date of award?
An award was made on 27 May 2021.
What is the quantum of the
award?
1,500,000 Rights (750,000 Rights each) with an expiry date of 1 October 2023.
What are the performance
conditions?
The Rights will vest subject to at least two of the following four vesting conditions being
met:
Test 1
The 10-day VWAP of the Company’s shares is at a 15 cent premium to the 10-day VWAP
of the Company’s shares prior to the grant date;
Test 2
Definition of a JORC Code compliant Ore Reserve of at least 1,500,000 ounces of gold on
the Morila Exploitation Permit and the Company’s Malian subsidiary’s tenements
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
12
adjoining the Morila Exploitation Permit at a minimum average grade of 1.0 grams per
tonne of gold;
Test 3
The Company commencing production from the Morila Super Pit;
Test 4
The Company successfully completing the demerger of the Goulamina Lithium Project,
with “LithiumCo” successfully listing on the ASX (or other recognised exchange) and
achieving a market capitalisation of at least $200 million;
The vesting conditions attached to the Rights will be continuously tested from 28 May
2022 until 1 July 2023. However, the Rights will only be able to vest after 12 months
from the date of issue and if the NED has provided continual service to the Board for at
least 18 months and remains a NED at the time of vesting.
Why were the performance
conditions selected?
The performance conditions were selected to align the behaviours of working directors
with long term value creation for shareholders.
What is the performance period? 28 May 2021 to 1 July 2023.
All Rights have expired without vesting on 1 July 2023
b)
The following table details the additional award and conditions of a long-term incentive award made in line with
6(a) above to Mr Fraser and Mr Gordon during 2022 as a compensation for the fall in share price of the Company
after the demerger of Leo Lithium.
How is the award delivered?
The award is delivered through the issue of Performance Rights (Rights) under the
Firefinch Limited Awards Plan (previously adopted as the Mali Lithium Limited Awards
Plan) approved by shareholders on 27 May 2019.
Date of award?
An award was made on 31 May 2022.
What is the quantum of the
award?
900,000 Rights (450,000 Rights each) with an expiry date of 1 October 2023.
What are the performance
conditions?
The Rights will vest subject to at least two of the following three vesting conditions
being met:
Test 1
The 10-day VWAP of the Company’s shares is at a 15 cent premium to the 10-day VWAP
of the Company’s shares prior to the grant date;
Test 2
Definition of a JORC Code compliant Ore Reserve of at least 1,500,000 ounces of gold on
the Morila Exploitation Permit and the Company’s Malian subsidiary’s tenements
adjoining the Morila Exploitation Permit at a minimum average grade of 1.0 grams per
tonne of gold;
Test 3
The Company commencing production from the Morila Super Pit;
The vesting conditions attached to the Rights will be continuously tested from 31 May
2022 until 1 July 2023. However, the Rights will only be able to vest if the NED has
provided continual service to the Board for at least 18 months and remains a NED at the
time of vesting.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
13
Why were the performance
conditions selected?
The performance conditions were selected to align the behaviours of working directors
with long term value creation for shareholders.
What is the performance period? 31 May 2022 to 1 October 2023.
All Rights have expired without vesting on 1 October 2023
5. Statutory performance indicators
The Group aims to align executive remuneration to our strategic and business objectives and the creation of shareholder
wealth. The table below shows measures of the Group’s financial performance over the last five years as required by the
Corporations Act 2001. However, these are not necessarily consistent with the measures used in determining the variable
amounts of remuneration to be awarded to KMPs. As a consequence, there may not always be a direct correlation between
the statutory key performance measures and the variable remuneration awarded.
Statutory disclosure key performance indicators of the Group over the last five years.
2023
2022
2021
2020
2019
Profit/(Loss) for the
year, $
(1,682,352)
308,881,578
(43,952,826)
1,043,816
(3,504,280)
Dividends paid, $
Nil
Nil
nil
nil
nil
Net assets, $
109,226,231
111,870,519
251,932,804
99,393,236
27,166,106
Share price, $
0.20(1)
0.20
0.865
0.175
0.097
(1)
The share price is as of the last day of trading, 29 June 2022. The Company remains suspended from quotation from this date until the
Company was removed from ASX on 1 July 2024.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
14
6. Details of Remuneration
Details of the remuneration of the Directors and KMP of the Group (as defined in AASB 124 Related Party Disclosures) are set out in the following table.
Table 2 – Directors and Executive KMP’s remuneration for the year ended 31 December 2023
(1) Vesting expense for the year of performance rights issues to the directors under the terms of the Company’s long-term incentive plans approved by shareholders on 23 October 2020 and 31 May 2022. The fair
value of the performance rights is calculated at the grant date.
(2) Mr Lowe resigned effective 31 August 2023. In accordance with his amended ESA agreement, should the Company complete a sale to a third party of 100% of the shares in the Company’s wholly owned
subsidiary, Morila SA, then an amount of $130,000 cash (less any applicable tax and deductions) will be payable to Mr Lowe.
(3) Mr Fraser was appointed as Non - Executive Chairman on 10 July 2022.
(4) Contractor fees paid for services provided.
2023 – Group
Performance
Short-term
Post-
employment
Short-term
Termination
benefits
Total monetary
remuneration
Equity-settled share-
based payments
Total
remuneration
Salary &
Fees
Cash bonus
Other
Superannuation
Annual leave
movement
Performance /
share rights
Options
$
$
$
$
$
$
$
$
$
$
%
Directors
B Fraser (1) (3)
100,805
-
20,0004
10,584
-
-
131,389
206,642
338,031
61%
M Hepburn
72,292
-
-
7,591
-
-
79,883
-
-
79,883
-
B Gordon (1)
72,292
-
-
7,591
79,883
206,642
286,525
72%
Former Directors
S Lowe (2)
284,169
-
-
34,743
28,981
373,103
720,996
-
-
720,996
-
Directors Total
529,558
-
20,000
60,509
28,981
373,103
1,012,151
413,284
-
1,425,435
-
TOTAL REMUNERATION
529,558
-
20,000
60,509
28,981
373,103
1,012,151
413,284
-
1,425,435
-
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
15
Table 2 (continued) – Directors and Executive KMP’s remuneration for the year ended 31 December 2022
(1)
The superannuation payment covers the payroll years 2021/2022 and 2022/2023.
(2)
Vesting expense for the year of performance rights issues to the directors under the terms of the Company’s long-term incentive plans approved by shareholders on 23 October 2020 and 31 May 2022. The fair value of the performance rights is calculated at the grant date.
(3)
Mr Lowe was appointed as Managing Director on 17 October 2022.
(4)
Mr Cowden resigned on 10 July 2022.
(5)
Mr Borg resigned on 31 May 2022.
(6)
Dr Anderson resigned on 30 June 2022.
(7)
Ms Wall and Ms Scott resigned on 27 June 2022.
(8)
Mr Fraser was appointed as Executive Chairman on 10 July 2022.
(9)
Mr Plant was made redundant on 15 November 2022.
(10)
Mr Taplin was made redundant on 31 December 2022.
2022 – Group
Performance
Short-term
Post-
employment
Short-term
Termination
benefits
Total monetary
remuneration
Equity-settled share-
based payments
Total
remuneration
Salary &
Fees
Cash bonus
Other
Superannuation(1)
Annual leave
movement
Performance /
share rights
Options
$
$
$
$
$
$
$
$
$
$
%
Directors
B Fraser (2) (8)
129,914
-
-
13,341
-
-
143,255
410,409
-
553,664
74%
M Hepburn
91,875
-
-
9,384
-
-
101,259
-
-
101,259
-
B Gordon (2)
91,875
-
-
9,384
-
-
101,259
410,409
-
511,668
80%
S Lowe (3)
115,041
-
-
6,323
8,581
-
129,945
-
-
129,945
-
Former Directors
A Cowden (4)
119,463
-
-
10,796
-
-
130,259
-
-
130,259
-
B Borg (5)
45,833
-
-
4,583
-
-
50,416
-
-
50,416
-
M Anderson (6)
312,500
125,000
-
29,227
16,833
312,500
796,060
-
-
796,060
16%
E Wall (7)
6,887
-
-
689
-
-
7,576
-
-
7,576
-
N Scott (7)
6,887
-
-
689
-
-
7,576
-
-
7,576
-
Directors Total
920,275
125,000
-
84,416
25,414
312,500
1,467,605
820,818
-
2,288,423
Former Executive KMP
T Plant (9)
305,126
-
60,000
30,816
22,441
114,423
532,806
-
-
532,806
-
A Taplin (10)
428,698
-
-
34,758
27,245
143,756
634,457
28,256
-
662,713
4%
Executive KMP Total
733,824
-
60,000
65,574
49,686
258,179
1,167,263
28,256
-
1,195,519
TOTAL REMUNERATION
1,654,099
125,000
60,000
149,990
75,100
570,679
2,634,868
849,074
-
3,483,942
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
16
7. Service Agreements
Remuneration and other terms of employment of the Managing Director and Non-Executive Chairman are formalised in
employment agreements. Major provisions of the agreements relating to the remuneration of these positions are set out
below.
Remuneration of Non-Executive Chairman, Mr Brett Fraser
Mr Fraser moved to a position of Non-Executive Chairman from 10 July 2022 after holding a position of Non-Executive
Director. Mr Fraser’s contract terms with the Company are outlined below.
Fixed remuneration
On 10 July 2022 Mr Fraser was appointed as Non-Executive Chairman and was entitled to annual fees of $176,800 including
statutory entitlements. This number was reduced by the 25% deferral in fees agreed by the board on 7 July 2022 to $132,600
inclusive of statutory entitlements. This number was voluntarily reduced on 1 January 2023 to $80,000 inclusive of statutory
entitlements.
Consulting Fees for executive duties are to be charged at a rate of $2000 per day + GST
Remuneration of former Managing Director, Mr Scott Lowe
On 17 October 2022 the Company appointed Mr Lowe as Managing Director, and he resigned on 31 August 2023. His
employment contract with the Company contained the following terms:
Fixed remuneration
Mr Lowes’ annual salary is $550,000 per annum plus statutory superannuation. This was reduced on a voluntary basis to
$440,000 per annum effective 1 December 2022.
Variable remuneration
Mr Lowe is eligible to earn a performance related short-term incentive calculated with respect to each financial year during
his employment. He is eligible to participate in the Company’s Long Term Incentive scheme.
Retention Bonus
Mr Lowe is allocated a deferred bonus of $150,000 cash (less applicable tax) on commencement of the Employment which
will become payable on the first anniversary of the Commencement Date. Mr Lowe will forfeit the deferred bonus if his
employment terminates prior to the first anniversary date due to a Bad Leaver Event. If Mr Lowe’s employment terminates
prior to the first anniversary date due to a Good Leaver Event, the deferred bonus will be paid within 7 days following the
Termination Date or, if this is not permitted by law, it will be paid on the first anniversary of the Commencement Date.
Termination of contract
Mr Lowe and the Company may terminate the contract by giving 3 months’ notice.
On 5 May 2023, the Company and Mr Lowe agreed that in lieu of the short term incentive and long term incentives for which
Mr Lowe was eligible under his employment agreement, that Mr Lowe is eligible for the following performance related cash
bonuses:
(a)
$130,000 cash (less any applicable tax and deductions) upon completion of the sale to a third party of 100% of the
shares in the Company’s wholly owned subsidiary, Morila Limited; and
(b)
$200,000 cash (less any applicable tax and deductions) upon completion of the acquisition by a third party of 100%
of the shares in the Company by way of a takeover of scheme of arrangement under the Corporations Act.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
17
8. Share Based Compensation
KMP are eligible to participate in the Firefinch LTI scheme. The terms and conditions of the performance rights included in
remuneration of Directors and KMP in the current or a future reporting period are set out below. The Black Scholes pricing
model was used to determine a fair value of performance rights at a grant date with non-market vesting conditions and a
barrier-up trinomial pricing model was used for performance rights with market vesting conditions. Performance rights
granted carry no dividend or voting rights. When exercisable, the performance rights are convertible into one ordinary share
per right. There is no share based compensation held by Directors and KMP as at 31 December 2023
Further information relating to the portion of Directors and KMP’s remuneration as an equity compensation are set out in
the following table.
Table 3 – Value of share-based compensation
Total fair value of:
Performance /share
rights, $
Value recognised, exercised or lapsed in the year ended December 2023
Grant date
Value
recognised
$
Exercised
$
Lapsed
$
Amount paid
per share on
exercise
Name
Performance /
share rights
Performance
/share rights
Performance / share rights
Directors
B Fraser
788,250
27-May-21/
31-May-22
-
206,642
-
-
(288,750)
(499,750)
-
-
B Gordon
788,250
27-May-21/
31-May-22
-
206,642
-
-
(288,750)
(499,500)
-
-
The movement in performance /share right holdings for KMP and Directors during the year are set out in the following table:
Table 4 – Movement of performance / share rights granted to Directors and KMPs during the year
Name
Equity instrument Balance at start
of the year
Granted during
the year as
remuneration
Exercised during the
year
Forfeited /
lapsed
Balance at end
of the year
Vested
during the year
Vested and
exercisable at the
end of the year
Directors
B Fraser
Performance
right
1,200,000
-
- (1,200,000)
-
450,000
-
B Gordon
Performance
right
1,200,000
-
- (1,200,000)
-
450,000
-
Details of remuneration: share-based compensation benefits
The following table details the percentage of the available grant that vested in the financial year and the percentage forfeited
because specified performance criteria was not satisfied. The maximum value of the performance/ share rights yet to vest
has been determined as the fair value amount of the performance / share rights at a grant date.
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
18
Table 5 – Performance/share rights granted/vested/unvested as at 31 December 2023
Name
Equity
instrument
Number of rights
granted
Financial year
granted
Vested in
current
financial year
Vested in prior
financial year
Forfeited in the
current
financial year
Financial
year in
which vested
or may vest
Total value yet
to recognise
before vesting
No
Yr
%
%
%
Yr
$
Directors
B Fraser
Performance
rights
750,000
2021
-
-
100%
-
-
Performance
rights
450,000
2022
100%
-
100%
-
-
B Gordon
Performance
rights
750,000
2021
-
-
100%
-
-
Performance
rights
450,000
2022
100%
-
100%
-
-
9.
Additional Information
Loans to directors and executives
There were no loans outstanding at the reporting date to directors or executives.
Other transactions with KMP and or their related parties
There were $20,000 other related party transactions for the year ended 31 December 2023 (2022: $301,778).
●
Consultancy fee of $20,000 was paid to Wolfstar Corporate Management Pty Ltd, a related party of Brett Fraser.
Table 6 – Shareholdings
The number of shares in the Company held by each Director and KMP and their related parties during the year ended 31
December 2023 is set out below:
2023 – Group
Group KMP
Balance at 31
December 2022 Rights entitlement Granted during the
year on vesting
Other changes
during the year (1)
Balance at date of
resignation
Balance at 31
December 2023
Directors
B Fraser
536,206
-
-
-
-
536,206
B Gordon
78,947
-
-
-
-
78,947
M Hepburn
1,500,000
-
-
-
-
1,500,000
Former Directors
S Lowe
-
-
-
-
-
-
Table 7 – Options, performance rights and performance shares
The numbers of options, performance rights and share rights outstanding in the Company held by each Director, KMP and
their related parties during the year ended 31 December 2023 is set out below:
2023 – Group
Group KMP
Balance at 31
December 2022
Granted as
remuneration Exercised Forfeited /
lapsed
Balance at date
of resignation
Balance at 31
December 2023
Vested and
Exercisable
Unvested
Directors
B Fraser
1,200,000
-
-
(1,200,000) -
-
-
-
M Hepburn
-
-
-
-
-
-
-
-
B Gordon
1,200,000
-
-
(1,200,000) -
-
-
-
Former Directors
S Lowe
-
-
-
-
-
-
-
-
End of Remuneration Report
DIRECTOR’S REPORT
Firefinch Limited Annual Report | 31 December 2023
19
Indemnification and Insurance of Directors, Officers and Auditors
The Company has executed agreements with the Directors and Officers of the Company indemnifying them against all losses
or liabilities incurred by each Director or Officer in their capacity as Directors or Officer of a Group Company to the extent
permitted by the Corporation Act 2001. The indemnification specifically excludes wilful acts of negligence.
The Company has paid insurance premiums in respect of Directors’ and Officers’ Liability Insurance contracts for the current
officers of the Company, including officers of the Company’s controlled entities. The liabilities insured are damages and legal
costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity
as officers of entities in the Group. The total amount of insurance premiums paid has not been disclosed for confidentiality
reasons.
Proceedings on Behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of Firefinch, or to intervene in any proceedings to which Firefinch is a party, for the purpose of taking responsibility on behalf
of Firefinch for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of Firefinch with leave of the Court under section 237 of the
Corporations Act 2001.
Non-Audit Services
The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the
auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
● all non-audit services have been reviewed by the Board to ensure they do not impact the impartiality and objectivity of
the auditor; and
● none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants.
During the year, PricewaterhouseCoopers, the Company’s auditor, provided consultancy services in addition to their statutory
audits. Non-audit fees amounted to $20,400 (2022: $59,160 ). Details of remuneration paid to the auditor can be found within
the financial statements at note 23.
Corporate Governance Statement
The ASX Corporate Governance Council (CGC) has developed corporate governance principles and recommendations for
listed entities. ASX listing rule 4.10.3 requires that listed entities disclose the extent to which they have followed the CGC’s
recommendations and, where a recommendation has not been followed, the reasons why.
Firefinch’s corporate governance statement can be found on the Company’s website at the following link:
https://firefinchltd.com/corporate-governance/
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor's independence declaration under section 307C of the Corporations Act 2001 for the year ended 31
December 2023 has been received and can be found on page 20 of the annual report.
MR BRETT FRASER
Executive Chairman
Dated 29 October 2024
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, Level 15, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Firefinch Limited for the year ended 31 December 2023, 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.
This declaration is in respect of Firefinch Limited and the entities it controlled during the period.
Helen Bathurst
Perth
Partner
PricewaterhouseCoopers
29 October 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
21
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
Note
2023
$
2022
$
Continuing operations
Revenue
-
-
Cost of sales
-
-
Gross Profit
-
-
Interest income
5
1,506,405
476,265
Corporate and other expenses
6
(5,633,424)
(12,451,944)
Depreciation
(64,172)
(168,930)
Director fees
(528,816)
(1,476,965)
Employee salaries and other employment related costs
(508,652)
(4,298,698)
Impairment Losses – Financial Assets
7
-
(773,660)
Impairment Losses – Non-Financial Assets
7
-
(16,303,323)
Share-based payments
1,021,822
(622,864)
Loss on disposal of investment
(167,387)
(19,507,355)
Fair value gain on investment
12
4,218,831
2,109,415
Foreign exchange gain
(170,313)
2,174,852
Share of net loss of associates - accounted for using the equity method
-
(234,803)
Loss before Tax
(325,705)
(51,078,010)
Income tax expense
8
(1,356,647)
-
Net Loss for the year from continuing operation
(1,682,352)
(51,078,010)
Discontinued operations
Profit/(Loss) after tax from discontinued operations
19
-
359,959,588
Net profit/(loss) for the year is attributable to:
(1,682,352)
308,881,578
Owners of Firefinch Limited
(1,682,352)
319,345,202
Non-controlling interest
-
(10,463,624)
Other Comprehensive Loss
Items that may be reclassified subsequently to profit or loss
Exchange difference on translation of foreign operations
59,886
(1,229,104)
Total Comprehensive income/(loss) for the Year is attributable to:
(1,622,466)
307,652,474
Owners of Firefinch Limited
(1,622,466)
318,116,098
Non-controlling interest
-
(10,463,624)
Earnings per share from continuing operations:
Basic loss per share (cents per share)
9
(0.14)
(4.33)
Diluted loss per share (cents per share)
9
(0.14)
(4.33)
Earnings per share from discontinued operations:
Basic profit/(loss) per share (cents per share)
9
-
30.49
Diluted profit/(loss) per share (cents per share)
9
-
30.49
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
22
Note
2023
$
2022
$
Current Assets
Cash and cash equivalents
10
33,456,049
37,946,133
Trade and other receivables
11
1,060,561
2,628,903
Total Current Assets
34,516,610
40,575,036
Non-Current Assets
Property, plant, and equipment
2,530
255,948
Right of use asset
-
372,357
Financial assets at fair value through profit or loss
12
106,525,479
102,306,648
Other receivables
11
41,341
40,000
Total Non-Current Assets
106,569,350
102,974,953
Total Assets
141,085,959
143,549,989
Current Liabilities
Trade and other payables
13
2,592,410
3,337,765
Lease liabilities
-
161,203
Provisions
-
37,847
Total Current Liabilities
2,592,410
3,536,815
Non- Current Liabilities
Lease liabilities
-
231,984
Deferred tax liability
8
29,267,318
27,910,671
Total Non-Current Liabilities
29,267,318
28,142,655
Total Liabilities
31,859,728
31,679,470
Net Assets
109,226,231
111,870,519
Equity
Issued capital
15
303,823,417
303,823,417
Reserves
16
5,511,800
6,473,736
Accumulated losses
17
(200,108,986)
(198,426,634)
Non-controlling interest
18
-
-
Total Equity
109,226,231
111,870,519
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
23
Note
Issued
Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserve
Share-based
Payment
Reserve
Non-
Controlling
Interest
Total
$
$
$
$
$
$
Balance at 1 January 2022
323,402,393
(78,791,825)
47,741
7,032,235
242,260
251,932,804
Profit/(Loss) for the year
-
319,345,202
-
- (10,463,624)
308,881,578
Other comprehensive loss for the year
-
-
(1,229,104)
-
-
(1,229,104)
Total comprehensive income for the year
-
319,345,202
(1,229,104)
- (10,463,624)
307,652,474
Transaction with owners, directly in
equity:
Shares issued during the year (net of
costs)
15
2,991,207
-
-
-
-
2,991,207
Share based payments
-
-
-
622,864
-
622,864
Return of capital
18
(22,570,183)
-
-
-
-
(22,570,183)
Dividend distribution on demerger
19
-
(428,758,647)
-
-
- (428,758,647)
Disposal of NCI
18
-
(10,221,364)
-
-
10,221,364
-
Balance at 31 December 2022
303,823,417
(198,426,634) (1,181,363)
7,655,099
-
111,870,519
Balance at 1 January 2023
303,823,417
(198,426,634) (1,181,363)
7,655,099
-
111,870,519
Profit/(Loss) for the year
-
(1,682,352)
-
-
-
(1,682,352)
Other comprehensive loss for the year
-
-
59,886
-
-
59,886
Total comprehensive income for the
year
-
(1,682,352)
59,886
-
-
(1,622,466)
Transaction with owners, directly in
equity:
Share based payments
-
-
- (1,021,822)
-
(1,021,822)
Return of capital
-
-
-
-
-
-
Dividend distribution on demerger
-
-
-
-
-
-
Balance at 31 December 2023
303,823,417
(200,108,986) (1,121,477)
6,633,277
-
109,226,231
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
24
Note
2023
2022
$
$
Cash Flows from Operating Activities
Proceeds in the course of operations
-
-
Payments to suppliers and employees
(5,724,777)
(17,535,649)
Income taxes paid
-
-
Interest received
1,345,431
476,265
Interest paid
-
-
Net cash outflow from operating activities of discontinued operations
19
-
(34,243,991)
Net Cash used in Operating Activities
24
(4,384,798)
(51,303,375)
Cash Flows from Investing Activities
Payments for exploration and evaluation expenditure
-
(8,643,777)
Payments for mine development expenditure
-
-
Payments made for plant and equipment
-
(136,954)
Payment for investment in Associate
-
(20,000,000)
Proceeds from sale of investment
12
-
12,892,750
Net cash outflow from Investing activities of discontinued operations
19
-
(49,862,405)
Net Cash Used in Investing Activities
-
(65,750,386)
Cash Flows from Financing Activities
Proceeds from issue of shares
-
-
Payments for capital raising
-
-
Lease payments
(84,768)
(167,890)
Proceeds from loan repayments
-
10,295,000
Net Cash (Outflows)/inflows from Financing Activities
(84,768)
10,127,110
Net (decrease)/Increase in Cash Held
(4,469,566)
(106,926,651)
Cash and cash equivalents at the beginning of the year
37,946,133
144,888,661
Change in foreign currency held
(20,518)
(15,877)
Cash and Cash Equivalents at the End of the Year
10
33,456,049
37,946,133
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
25
1. BASIS OF PREPARATION
These are the consolidated financial statements and notes of Firefinch Limited (Firefinch or the Company) and controlled
entities (collectively the Group). Firefinch is a company limited by shares, domiciled and incorporated in Australia.
The financial statements were authorised for issue on 29 October 2024 by the Directors of the Company.
The nature of the operations and principal activities of the Group are described in the Director’s Report.
The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the
consolidated financial statements, the Company is a for-profit entity. Material accounting policies adopted in the preparation
of these financial statements are presented below. They have been consistently applied unless otherwise stated. Where
necessary, comparative information is reclassified and restated for consistency with current period disclosures.
Statement of compliance
These financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations
Act 2001 on a non-going concern basis. 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
The financial statements have been prepared under the historical cost convention, except for investments, financial
instruments and share based payments, which have been measured at fair value.
Non-going concern basis of preparation
During the year ended 31 December 2023, the board continued to seek a new owner for the Morila Gold Mine in Mali, as
well as undertaking a strategic review process by inviting and reviewing bids from suitable parties to deliver compelling value
and liquidity to shareholders.
In May 2024 Firefinch entered into a memorandum of understanding with the Mali Government, which settles all disputed
matters and will facilitate the Government of Mali acquiring the Morila Gold Mine for USD$1, with the transfer of all shares
in Morila SA and all mining titles held by subsidiaries in Mali for USD$1 to a government company (SOREM Mali SA). Firefinch
is currently finalising the share transfer and loan assignment agreement with SOREM Mali SA. In the course of operating the
Morila Mine, Morila SA had received financial support from Firefinch in the form of a loan of US$102,668,563, and from
Morila Limited in the form of a loan of US$$22,691,081. The Morila SA Sale involves Firefinch assigning the Assigned Loans to
SOREM Mali SA and in doing so removes the right of Firefinch and Morila Limited to receive the benefit of those Assigned
Loans.
The settlement agreement with the Government of Mali has been critical in allowing the Company to progress its plan to
return value to shareholders through the distribution of the remaining available assets. The process to distribute assets
requires the completion of multiple steps. While it is difficult to put specific timeframes around the various steps, the Board
is committed to completing the process as quickly as reasonably practicable.
The Company continues with the process of obtaining a class ruling from the Australian Taxation Office as to the tax treatment
on the return of assets to Firefinch shareholders. Subject to the outcome of the class ruling and shareholder approval, the
Company may then be in a position to distribute remaining assets to shareholders. This is likely to be by way of an in-specie
distribution of the Leo Lithium shares held by Firefinch to Shareholders.
The availability of remaining cash to distribute to shareholders will be determined following a payment of the Firefinch
contribution (A$11,500,000) pursuant to the Tripartite Deed, satisfaction of any tax liabilities and the cost of dealing with and
arguing any claims against Firefinch, including the Notice of Arbitration, and, accounting for remaining corporate operating
costs.
As soon as practicable, and following approval and completion of relevant processes, which includes obtaining relevant
Australian Taxation Office rulings, it is Firefinch’s current intention to convene a general shareholder meeting to seek approval
for an in-specie distribution of the Leo Lithium shares to Firefinch shareholders, and the distribution to Firefinch shareholders
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
26
of the remaining cash reserves. The Board is committed to its endeavours to return assets to shareholders, and this is the
most realistic outcome for the Group at the time of this report.
On this basis, the Directors have determined that it is more appropriate that the consolidated financial statements be
prepared on the basis that the Group is not a going concern for financial reporting purposes. Non-financial assets have been
written down to the lower of their carrying amounts and their net realisable values. Net realisable value is the estimated
selling price the entity expects to obtain under the circumstances less the estimated costs necessary to make the sale. Non-
current assets and non-current liabilities have been reclassified to current where they are expected to be realised or settled
within the next twelve months from the reporting date. No additional liabilities have been recognised as a result of the
decision made by the Company. The comparative year is presented on a going concern basis.
Significant accounting estimates and judgments
The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates
and associated assumptions are based on historical experience and various factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities
that are not readily apparent from other sources.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future periods affected.
These estimates and judgements are disclosed within each relevant note.
2. PRINCIPLES OF CONSOLIDATION
Subsidiaries
The Group financial statements consolidate those of the Company and all its subsidiaries. The Company controls a subsidiary
if it is exposed or has rights to variable returns from its involvement with the subsidiary and has the ability to affect those
returns through its power over the activities of the subsidiary.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and
losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on
consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial
statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted
by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the period are recognised from
the effective date of acquisition, or up to the effective date of disposal, as applicable.
Functional and presentation currency
Items included in the financial statements of each entity within the Group are measured using the currency of the primary
economic environment in which the entity operates (the “functional currency”). The functional currency of Firefinch Limited
is Australian dollars.
The financial report is presented in Australian dollars.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
the profit or loss.
Group companies and foreign operations
The results and financial position of all the Group entities (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
reporting date;
● 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 rates prevailing on the transaction dates, in
which case income and expenses are translated at the dates of the transactions); and
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
27
● all resulting exchange differences are recognised in other comprehensive income.
On consolidation, foreign 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 recorded in a reserve in equity. When a foreign operation is sold or any borrowings
forming part of the net investment are repaid, a proportionate share of such exchange differences
are recognised in the consolidated statement of profit or loss and other comprehensive income, as
part of the gain or loss on sale where applicable.
3.
NEW ACCOUNTING STANDARDS
New and revised accounting standards affecting amounts reported and/or disclosures in the financial
statements
The Group has consistently applied the accounting policies to all periods presented in the financial statements. The Group
has considered the implications of new and amended Accounting Standards applicable for annual reporting periods beginning
after 1 January 2023 but determined that their application to the financial statements is either not relevant or not material.
New Accounting Standards and Interpretations not yet adopted
New accounting standards and interpretations have been published that are not mandatory for 31 December 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 that they would not have a material impact on the entity in the current or future reporting periods and on
foreseeable future transactions.
4. SEGMENT INFORMATION
Description of segments
The operating segments are based on the reports reviewed by the chief operating decision makers and Board of Directors
that are used to make strategic decisions. The Group reports on a business segment basis as its risks and rates of return are
different for each of the various business segments in which it operates, and this is the format of the information provided
to the executive management team and Board of Directors.
The Group operated in one segment in 2023 being Corporate. The segment information is prepared in conformity with the
Group’s accounting policies. The Group comprises the following main segments:
Corporate
Investing activities and Corporate Management.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
makers. The chief operating decision makers, who are responsible for allocating resources and assessing performance of the
operating segments, have been identified as the executive management team and Board of Directors of the parent entity.
Segment information
In 2023, the Group had only 1 segment, being Corporate operations.
Segment information
2022
Morila
Mali Exploration(1)
Corporate
Total
Consolidated
$
$
$
$
Revenue and other income
Revenue
-
-
-
-
Interest income
-
-
476,265
476,265
Total segment
-
-
476,265
476,265
Results
Operating loss before tax
-
(16,105,602)
(34,972,408)
(51,078,010)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
28
2022
Morila
Mali Exploration(1)
Corporate
Total
Consolidated
$
$
$
$
Income tax
-
-
-
-
Net loss
-
(16,105,602)
(34,972,408)
(51,078,006)
Included within segment results:
Depreciation and amortisation
-
-
168,930
168,930
Share-based payments
-
-
622,864
622,864
Foreign exchange gain
-
-
(2,174,852)
(2,174,852)
Segment assets
Current assets
-
285,301
40,289,735
40,575,036
Non-current assets
-
-
102,974,953
102,974,953
Total segment assets
-
285,301
143,264,688
143,549,989
Segment liabilities
Current liabilities
-
2,047,495
1,489,320
3,536,815
Non-current liabilities
-
-
28,142,655
28,142,655
Total liabilities
-
2,047,495
29,631,975
31,679,470
(1)
At the end of 2022, the segment Mali Exploration did not carry any assets and liabilities relating to the Goulamina Lithium Project.
5. INTEREST INCOME
Consolidated
2023
$
2022
$
Interest Income
1,506,405
476,265
1,506,405
476,265
RECOGNITION & MEASUREMENT
Interest revenue is recognised on accrual basis using actual interest received and the accrual of unpaid interest using Term
Deposit interest rates applicable at the balance date
6. CORPORATE AND OTHER EXPENSES
Consolidated
2023
$
2022
$
Consultancy services
(1,248,782)
(2,783,437)
Insurances
(659,424)
(491,412)
Travel
(79,202)
(562,709)
Employee related costs
(14,690)
(508,426)
Administrative expenses
(3,631,326)
(1,398,901)
Business development expenses
-
(6,707,059)
(5,633,424)
(12,451,944)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
29
7. IMPAIRMENTS OF ASSETS
Consolidated
2023
$
2022
$
Impairments – Financial Assets
-
(773,660)
Impairments – Non-Financial Assets
-
(16,303,323)
-
(17,076,983)
RECOGNITION & MEASUREMENT
Assets are reviewed for impairment whenever events for changes in circumstances indicate that the carrying value may not
be recoverable. An Impairment charge is recognised for the amount which the assets carrying value exceeds the recoverable
amount. For the purposes of assessing impairment, operating assets are grouped at the lowest levels for which there are
separately identifiable cashflows (Cash Generating Units – CGU’s). Where indicators of impairment exist, the recoverable
amount was determined by calculating the higher of fair value less cost of disposal (FVLCD) and value in use (VIU).
Indicators of impairment can exist at an individual asset level due to factors such as technical obsolescence, declining market
value, physical condition or saleability within a reasonable time frame. Other indicators of impairment can exist where there
is a deterioration of financial performance of cash-generating units (CGUs) against their respective budgets and forecasts.
Impairment by Cash Generating Unit (2022)
Valuation Method
Impairment
Financial Assets
$
Impairment
Non-Financial Assets
$
Total Impairments
by CGU
$
Firefinch Limited
FVLCD
773,660
200,364
974,024
Birimian Gold Mali
FVLCD
-
16,102,959
16,102,959
773,660
16,303,323
17,076,983
Impairment By Asset Type
Note
2023
$
2022
$
Other Receivables
-
773,660
Property, Plant and Equipment
12
-
1,171,122
Exploration & Evaluation Expenditure
13
-
15,132,201
-
17,076,983
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
30
8. INCOME TAX
Consolidated
2023
2022
$
$
Reconciliation of income tax expense to prima facie tax payable
The prima facie tax payable/ (benefit) on loss from ordinary activities before
income tax is reconciled to the income tax expense as follows:
Accounting loss before tax
(325,705)
(51,078,005)
Prima facie tax on operating loss at 30.0% (2022 30.0%)
(97,711)
(15,323,402)
Add / (less) tax effect of:
Permanent expenses
2,396,631
5,905,487
Movement in temporary tax expenses/(benefits) - Australia
(112,161)
10,839,183
Tax losses not recognised
-
Tax losses utilised and not previously recognised
(830,112)
(1,420,268)
Income tax expenses
1,356,647
-
Current tax liabilities
Provision for income tax
-
-
Deferred tax assets/(liabilities)
Investments
(31,399,494)
(30,042,847)
Australian capital losses
2,132,176
2,132,176
Net deferred tax assets/(liabilities)
(29,267,318)
(27,910,671)
Tax losses and deductible temporary differences
Deferred tax assets unrecognised as at 31 December 2022 amount to $62,730,155 with the majority of the temporary
differences relating to Intercompany Loans and Australian tax / capital losses carried forward.
Total carried forward Australian tax losses of $18,718,968 at 31 December 2023 (31 December 2022: $21,486,006) are
available for offset against future assessable income, provided the relevant loss recoupment rules are satisfied. The
deductible temporary differences and tax losses do not expire under current tax legislation.
In respect of all deferred tax assets (apart from Loans and capital losses made during the 31 December 2022 year), the
amounts have not been recognised because it is not probable that future taxable profit will be available against which the
Company can utilise the benefits thereof.
Regarding the Loans deferred tax asset: the assets value exceeds the deferred tax liability from Investments; however, the
asset has not been recognised to offset the deferred tax liability on the basis that it is yet to be determined whether the
actual realisation of the Loans in the future would give rise to a capital loss.
RECOGNITION & MEASUREMENT
The income tax expense or benefit for the year is the tax payable on the current year’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 a basis of the tax laws enacted or substantively enacted at the end of the year in
the countries where the Company’s subsidiaries and associated 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 provisions where appropriate, on the basis of amounts expected to be paid to the tax authorities.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
31
SIGNIFICANT JUDGEMENTS AND ESTIMATES
Judgement is required in determining whether deferred tax assets are recognised in the statement of financial position.
Deferred tax assets, including those arising from unutilised tax losses, require management to assess the likelihood that the
Group will generate taxable earnings in future years allowing to utilise the recognised deferred tax assets. Estimates of future
taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction.
To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise
the net deferred tax assets recorded at the reporting date could be impacted. Additionally, future changes in tax laws in
jurisdictions in which the Group operates could limit the ability of the Group to obtain tax deductions in future years.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted by the balance date in the countries where the Group’s subsidiaries operate and generate taxable
income.
Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets and liabilities
and their carrying amounts for financial reporting purposes. No deferred income tax will be recognised from the initial
recognition of goodwill or of an asset or liability, excluding a business combination, where there is no effect on accounting
or taxable profit or loss. No deferred income tax will be recognised in respect of temporary differences associated with
investments in subsidiaries if the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary differences will not reverse in the near future.
9. EARNINGS PER SHARE
Consolidated
2023
2022
$
$
(a) Reconciliation of earnings to profit or loss
(Profit)/Loss used in the calculation of basic and diluted EPS for continued
operation
(1,682,352)
(51,078,010)
Profit used in the calculation of basic and diluted EPS for discontinued operation
-
359,959,588
No. of shares
(b) Weighted average number of ordinary shares outstanding during the year
used in calculation of basic EPS
(c)
1,182,648,903
1,180,468,593
Weighted average number of dilutive equity instruments outstanding
-
N/A
(d) Weighted average number of ordinary shares outstanding during the year
used in calculation of basic EPS
1,182,648,903
1,180,468,593
(e) Earnings per share from continuing operations
$
$
Basic loss per share (cents per share)
(0.14)
(4.33)
Diluted loss per share (cents per share)
(0.14)
(4.33)
(f) Earnings per share from discontinued operations
Basic profit/(loss) per share (cents per share)
-
30.49
Diluted profit/(loss) per share (cents per share)
-
30.49
As at 31 December 2023, the Group has Nil unissued shares under options (2022: nil) and Nil under performance/share rights
on issue (2022: 5,088,600).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
32
RECOGNITION & MEASUREMENT
Basic earnings per share
Basic earnings per share is calculated by dividing the net result attributable to owners of the parent, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial
year, adjusted for any bonus element.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of ordinary shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
10.
CASH AND CASH EQUIVALENTS
Consolidated
2023
$
2022
$
Cash at bank and in hand (1)
1,456,049
2,759,647
Deposits at call (2)
32,000,000
35,000,000
Short-term security deposits (3)
-
186,486
33,456,049
37,946,133
(1) Cash at bank earns interest at floating rates based on daily bank deposit rates.
(2) Deposits are at floating interest rates between 5.06% and 5.11% p.a (2022: 3.60% and 3.75%) on Australian currency.
(3) Security deposit required as per the Company’s office lease agreement.
RECOGNITION & MEASUREMENT
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions with an original maturity not exceeding three months, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. If
greater than three months, principal amounts can be redeemed in full, with interest payable at the same cash rate from inception
as per the agreement with each bank.
11.
TRADE AND OTHER RECEIVABLES
Consolidated
2023
2022
$
$
Current
Trade debtors
-
87,639
Prepayments (1)
277,950
298,988
GST receivable
48,853
206,862
Receivables from Leo Lithium
574,124
1,908,633
Other receivables
159,634
126,781
1,060,561
2,628,903
Non-current
Security deposits
41,341
40,000
41,341
40,000
(1) Prepayments relate to insurances and services prepaid throughout the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
33
RECOGNITION & MEASUREMENT
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less expected credit losses
Trade receivables are generally due for settlement within 30 days. They are presented as current assets unless collection is not
expected for more than 12 months after the reporting date.
Due to the short-term nature of the current receivables, their carrying amount is assumed to approximate their fair value. The
carrying amount of the long-term receivable deposits is assumed to approximate fair value as the security deposits have a market-
based interest rate.
The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets.
Trade receivables and contract assets are written off where there is no reasonable expectation of recovery. Indicators that there
is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the
group, and a failure to make contractual payments for a period of greater than 120 days past due.
Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit.
Subsequent recoveries of amounts previously written off are credited against the same line item.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for those with maturities greater than 12 months after the year-end which
are classified as non-current assets. Loans and receivables are included in receivables in the statement of financial position. Loans
and receivables are subsequently carried at amortised cost using the effective interest method.
12.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
The group classifies its equity investment in Leo Lithium as financial assets at fair value through profit or loss (FVPL).
The fair value of equity investments traded in active markets is based on quoted market prices at the end of the reporting
period. The quoted market price incorporates the market's assumptions with respect to changes in economic climate such
as rising interest rates and inflation, as well as changes due to ESG risk. These represent level one inputs in the fair value
hierarchy prescribed under the accounting standards.
Leo Lithium entered a trading halt on 15 September 2023, a voluntary suspension on 19 September 2023 and has been
suspended from trading by the ASX since 3 October 2023. Leo Lithium remains suspended at the date of this report. The
last traded market price of Leo Lithium was $0.505 on 14 September 2023.
Given the lack of observable market data relevant to the value of shares in Leo Lithium, the Company’s valuation of
financial assets at fair value through profit or loss is considered to be a level three measurement in the fair value hierarchy
at 31 December 2023 (31 December 2022: level one).
2023
2022
Reconciliation of fair value of Investment
$
$
Carrying value of the investment at the date of disposal
-
132,597,338
Proceeds from disposal of investment
-
(12,892,750)
Loss on disposal of investment
-
(19,507,355)
Fair value of retained investment after disposal
-
100,197,233
Balance at beginning of the year
102,306,648
-
Marked to Market gain at the end of the year
4,218,831
2,109,415
Fair value of the Investment
106,525,479
102,306,648
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
34
RECOGNITION & MEASUREMENT
The group’s other financial assets are presented at fair value through profit or loss (FVPL). Fair value gains and losses are
recognised in the profit or loss.
Fair value measurements
The Company engaged an independent consulting firm to perform a valuation of its 17.61% equity interest in Leo Lithium
required for financial reporting purposes. Discussions of valuation processes and results are held by the Board of Directors at
least once every six months, in line with the group’s half-yearly reporting periods.
The Mineral Resource multiple method under the market approach has been used to value Leo Lithium’s investment in its
main asset, the Goulamina Lithium Project, translated to a value per share of Leo Lithium. The resulting fair value is estimated
to range between $93.6 million and $132.8 million, or between $0.4437 and $0.6296 per share in Leo Lithium. The Company
has utilised the last traded market price of Leo Lithium of $0.505 to value its investment as it falls within the valuation range
13.
TRADE AND OTHER PAYABLES
Consolidated
2023
$
2022
$
Current
Trade payables and accruals (1)
2,383,696
2,905,698
Other liabilities (2)
208,714
432,067
2,592,410
3,337,765
(1) Trade and other creditors are non-interest bearing and are normally settled on 30-day terms.
(2) Other liabilities include withholding taxes, payroll related taxes and contributions payable to the government agencies.
RECOGNITION & MEASUREMENT
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year that are
outstanding. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially
at their fair value and subsequently measured at amortised cost using the effective interest method.
14.
FINANCIAL RISK MANAGEMENT
Set out below is an overview of financial instruments held by the Group as at 31 December 2023 and 31 December 2022.
Interest
bearing
Non-
interest
bearing
Total
Interest
bearing
Non-
interest
bearing
Total
$
$
$
$
$
$
2023
2022
Financial Assets
Cash and cash equivalents
33,456,049
-
33,456,049
37,946,133
-
37,946,133
Trade and other
receivables
-
1,060,561
1,060,561
-
2,628,903
2,628,903
Non-current receivables
41,341
-
41,341
40,000
-
40,000
Total Financial Assets
33,497,390
1,060,561
34,557,951
37,986,133
2,628,903
40,615,036
Financial Liabilities
Trade and other payables
-
2,592,410
2,592,410
-
3,337,765
3,337,765
Total Financial Liabilities
-
2,592,410
2,592,410
-
3,337,765
3,337,765
Net Financial
(Liabilities)/ Assets
33,497,390
(1,531,849)
31,965,541
37,986,133
(708,862)
37,277,271
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
35
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price
risk), credit risk, liquidity risk and equity price risk. The Group therefore has an overall risk management program that focuses
on the unpredictability of financial and precious metal commodity markets and seeks to minimise potential adverse effects
on the financial performance of the Group.
The Group uses different methods to measure different types of risk to which it is exposed including sensitivity analysis in the
case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. Risk management is carried out
by the board of directors with assistance from suitably qualified external and internal advisors as required. The Board provides
written principles for overall risk management and further policies will evolve commensurate with the evolution and growth
of the Group.
Market Risk
(a) Foreign currency exchange risk
The Group during the previous comparable period ended 31 December 2022, operated internationally and was exposed to
foreign exchange risk arising from various currency exposures, primarily with respect to the West African Franc (CFA), US
dollar (USD) and Euro (EUR). Foreign exchange risk arises from commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency and net investments in foreign operations. The risk is
measured using sensitivity analysis and cash flow forecasting. In addition, the parent entity has intercompany receivables
from its subsidiaries denominated in USD which are eliminated on consolidation. The gains or losses on re-measurement of
these intercompany receivables from USD to AUD are not eliminated on consolidation as those loans are not considered to
be part of the net investment in the subsidiaries.
The Group’s exposure to foreign currency risk at the end of the year, expressed in Australian dollars, was as follows.
USD
CFA
EUR
USD
CFA
EUR
2023
2022
inancial Assets
Cash and cash equivalents
13,197
-
154,721
771,229
176,973
642,217
Total Financial Assets
13,197
-
154,721
771,229
176,973
642,217
inancial Liabilities
Trade and other payables
-
795,701,801
-
-
-
-
Total Financial Liabilities
-
795,701,801
-
-
-
-
Sensitivity
The following table summarises the sensitivity of financial instruments held at balance date to movement in the exchange
rate of AUD to USD with all other variables held constant and AUD to CFA with all other variables held constant. The sensitivity
is based on management’s estimate of reasonably possible changes over a financial year.
Change in USD rate
Impact on profit or loss
before tax and equity, $
2023
+10%
(1,763)
-10%
2,155
2022
+10%
(70,079)
-10%
85,732
Change in CFA rate
Impact on profit or loss
before tax and equity, $
2023
+10%
(178,836)
-10%
218,577
2022
+10%
(20,316)
-10%
14,497
Change in EUR rate
Impact on profit or loss
before tax and equity, $
2023
+10%
(22,810)
-10%
27,879
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
36
2022
+10%
(58,425)
-10%
71,307
The Group’s exposure to other foreign currency movements is not material.
(b) Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value of
financial instruments. The Group’s exposure to market risk for changes to interest rates relates primarily to its earnings on
cash and term deposits and borrowings.
Based on the financial assets and liabilities held at reporting date, with all other variables assumed to be held constant, the
table below sets out the notional effect on consolidated profit or loss after tax for the year and on equity at 31 December
2023 under varying hypothetical changes in prevailing interest rates.
2023
$
2022
$
100 basis points increase in interest rate
320,000
128,625
100 basis points decrease in interest rate
(320,000)
(128,625)
Credit Risk
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted under a financial
instrument resulting in a financial loss to the Group and arises from deposits with banks and financial institutions, favourable
derivative financial instruments as well as credit exposures to customers including outstanding receivables and committed
transactions. The Group measures credit risk on a fair value basis. The Group does not have any significant credit risk exposure
to a single counterparty or any Group of counterparties having similar characteristics.
The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the
Group’s maximum exposure to credit risk without taking account of the fair value of any collateral or other security obtained.
2023
2022
$
$
inancial Assets
Cash and cash equivalents
33,456,049
37,946,133
Trade and other receivables
1,060,561
2,629,003
Non-current receivables
41,341
40,000
Total Financial Assets
34,557,951
40,615,036
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings as follows:
2023
2022
$
$
Financial assets
Westpac Bank - AA-/A+ (1)
33,456,049
37,769,160
Banks in Mali - BB rated (2)
-
176,973
Unrated
-
2,668,903
33,456,049
40,615,036
(1) Represents the long-term credit rating of Westpac Banking Corporation as at 17 April 2024 by Standard and Poor’s and Fitch Ratings
respectively.
(21) Represents the long-term credit rating of Bank of Africa as at 17 April 2024 by Fitch Ratings.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
37
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, that as far as possible, 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.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages
liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profile of financial assets
and liabilities. As at 31 December 2023 the Group had sufficient cash reserves to meet its requirements. The financial liabilities
of the Group at reporting date were trade and other payables incurred in the normal course of the business. The trade and
other payable were non-interest bearing and were due within the normal 30-60 days terms of creditor payments.
Maturities of financial liabilities
The following table analyses the Group’s financial liabilities based on their contractual maturities.
1-3 months
3-12 months
12+ months
Total
2023
$
$
$
$
Financial liabilities due for payment:
Trade and other payables
624,478
1,967,932
-
2,592,410
Total
624,478
1,967,932
-
2,592,410
1-3 months
3-12 months
12+ months
Total
2022
$
$
$
$
Financial liabilities due for payment:
Trade and other payables
3,337,765
-
-
3,337,765
Lease liabilities
38,905
122,298
231,984
393,187
Total
3,380,149
122,298
231,984
3,730,952
Fair value estimation
The fair value of financial assets and financial liabilities held by the Group must be estimated for recognition and
measurement or for disclosure purposes. All financial assets and financial liabilities of the Group at the balance date are
recorded at amounts approximating their fair value.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values
due to their short-term nature.
Financial instruments whose carrying values is equivalent to fair value due to their nature include:
●
Cash and cash equivalents;
●
Trade and other receivables; and
●
Trade and other payables
15.
ISSUED CAPITAL
(a) Issued and paid-up share capital
Consolidated
2023
$
2022
$
1,182,846,577 (2022: 1,181,243,221 ) ordinary shares fully paid
303,823,417
303,823,417
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
38
Movement in ordinary shares
Note
2023
2022
2023
2022
No
No
$
$
Balance at the beginning of the year
1,181,243,221
1,178,136,200
303,823,417
323,402,393
Shares issued during the period:
Share allotment - placements (1)
-
3,107,021
-
2,991,207
Conversion of performance rights (2)
1,603,356
-
-
-
Transaction costs relating to share issues
-
-
-
-
Return of capital
-
-
-
(22,570,183)
Balance at the end of the year
1,182,846,577
1,181,243,221
303,823,417
303,823,417
(1)
During the 2022 year, the Company issued 3,107,021 fully paid ordinary shares at an issue price of $0.9627 as consideration for
services provided to the Company. 117,187,206 ordinary fully paid shares were issued at $0.40 per share through a placement in
June 2021 and 149,253,732 ordinary fully paid shares were issued at $0.67 per share through a placement in December 2021.
(2)
Conversion of 1,603,356 Performance rights to 1,603,356 fully paid ordinary shares announced in February 2023.
(b) Movements in performance / share rights
2023
No.
2022
No.
At beginning of the year
5,088,600
11,212,800
Forfeited during the year (1)
(4,588,600)
(7,024,200)
Issued during the year (2)
1,103,356
900,000
Converted to shares during the year(2)
(1,603,356)
-
Balance at the end of the year
-
5,088,600
(1) During the year 4,588,600 performance rights expired without vesting
(2) 1,103,356 share rights were issued to employees on 14 February 2023 under the Awards Plan. They vested and were exercised on the
day of issue along with 500,000 pre-existing rights
(c) Movements in options
2023
No.
2022
No.
At beginning of the year
-
-
Balance at the end of the year
-
-
RECOGNITION & MEASUREMENT
Ordinary shares are classified as equity and incremental costs directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds. If the Company reacquires its own equity instruments for the purpose
of reducing its issued capital, for example as the result of a share buy-back, those instruments are deducted from equity and
the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any
directly attributable incremental costs (net of tax) is recognised directly in equity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
39
(d) Capital Management
The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the
parent, comprising issued capital, reserves and accumulated losses. Operating cash flows are used to maintain and expand
operations, as well as to make routine expenditures and general administrative outgoings. Group’s strategy is to ensure
appropriate liquidity is maintained to meet anticipated operating requirements.
The working capital position of the Group at 31 December 2023 was:
Consolidated
2023
$
2022
$
Cash and cash equivalents
33,456,049
37,946,133
Trade and other receivables
1,060,561
2,628,903
Trade and other payables
(2,592,410)
(3,337,765)
Lease liability
-
(161,203)
Current provisions
-
(37,847)
Working capital position
31,924,200
37,038,221
16.
RESERVES
Consolidated
2023
$
2022
$
Foreign currency translation reserve
(1,121,477)
(1,181,363)
Share-based payment reserve
6,633,277
7,655,099
5,511,800
6,473,736
Movement in share-based payment reserve
Consolidated
2023
$
2022
$
Balance at beginning of the year
7,655,099
7,032,235
Vesting expense of performance/share rights issued during the year
104,488
585,714
Vesting expense of prior years’ performance/ share rights
837,810
1,141,460
Forfeited performance /share rights during the year
(1,964,120)
(1,104,310)
Movement for the year
(1,021,822)
622,864
Balance at the end of the year
6,633,277
7,655,099
RECOGNITION & MEASUREMENT
Share-based payments
The share-based payments reserve is used to record the fair value of options, performance rights and share rights issued to
employees and consultants but not exercised. 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 were granted. The fair value of equity instruments granted is
determined using Black-Scholes method or Monte Carlo simulation model and recognised over the vesting period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
40
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the presentation currency of the reporting entity
along with the Company’s movement in its associate’s foreign currency translation reserve.
Non-controlling interest’s reserve
The non-controlling interest’s reserve records the difference between the fair value of the amount by which the non-controlling
interests were adjusted to record their initial relative interest and the consideration paid.
17. ACCUMULATED LOSSES
Movements in accumulated losses were as follows.
Consolidated
2023
$
2022
$
Balance at beginning of the year
(198,426,634)
(78,791,825)
Net profit/(loss) for the year attributable to owners of the parent
(1,682,352)
319,345,202
Dividend distribution on demerger
22
-
(428,758,647)
Disposal of Non-Controlling Interest
21
-
(10,221,364)
Balance at the end of the year
(200,108,986)
(198,426,634)
18.
NON-CONTROLLING INTEREST
Non-controlling interest
A non-controlling interest of 20% in Morila SA was accounted for as an equity transaction resulting in the following:
Note
Movement in non-controlling interest during the period
Balance at the start of the year
-
242,260
Allocated (loss)/profit for the period
-
(10,463,624)
De-recognition on deconsolidation
19
-
10,221,364
Balance at the end of the year
-
-
RECOGNITION & MEASUREMENT
The Group recognises non-controlling interests in an acquired entity either at fair value or at the non-controlling interest’s
proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis.
For the non-controlling interests in Morila SA, the Group elected to recognise the non-controlling interests at its proportionate
share of the acquired net identifiable assets.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or
loss, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
Non-controlling interest was de-consolidated on 3 November 2022 as a result of the Company losing control of Morila SA. Refer
Note 19.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
41
19.
DISCONTINUED OPERATIONS
JOINT VENTURE FORMATION – GOULAMINA LITHIUM PROJECT
The Group established a 50:50 incorporated joint venture with Ganfeng, through MLBV, a Netherlands incorporated
company, to develop and operate the Goulamina Lithium Project through LMSA, its 100% owned Malian subsidiary. The State
of Mali will be free carried by the Joint Venture on its initial 10% interest in LMSA and has an option to subscribe for an
additional 10% interest in LMSA at fair market value.
The Group performed an internal restructure to ensure that the Goulamina Lithium asset was in a separable legal structure
from its gold assets. As part of this restructure, the capitalised exploration expenditure associated with the Goulamina Lithium
Project was transferred to its wholly owned subsidiary, LMSA.
All agreements with Ganfeng to form the Joint Venture were executed in August 2021 with all precedent conditions satisfied
on 28 March 2022. Ganfeng invested USD 130 million in the Joint Venture which was received in full on 30 March 2022.
Therefore, Ganfeng acquired its 50% interest in the Joint Venture.
The Group considers the substance of the arrangement to be the contribution of a non-monetary asset into the Joint Venture,
being the Goulamina Lithium Project, in exchange for the 50% equity interest in the Joint Venture. Where an owner or seller
contributes an asset to a joint venture, AASB 128 Investments in Associates and Joint Ventures requires that a gain can only
be recognised to the extent of external ownership in the entity. Accordingly, the Group can only recognise 50% of the gain
generated from the contribution of the asset to the Joint Venture. The Group considers the purchase price paid by Ganfeng
to be the best indicator of fair value of the assets and of a 50% interest in the Joint Venture. The gain on formation of the
Joint Venture reflects the value of the Group’s 50% interest in the entity implied by the transaction with Ganfeng, less the
total cost base of the Joint Venture. The gain is recognised by the Group only to the extent of its 50% ownership.
Leo Lithium Investment in Joint Venture
2022
$
Balance at beginning of the period (1 fully paid share)
1
Issue of shares on incorporation of MLBV
-
Receipt of 359 shares in MLBV for loan payable to Firefinch
13,816,260
Transfer Goulamina Definitive Feasibility Study (DFS) expenditure in exchange for
140 shares in MLBV
5,399,819
Gain on formation of the joint venture (extent of 50% ownership)
76,747,785
Foreign currency movement
4,113,399
Balance on demerger date
100,077,264
Subsequent to the formation of the Joint Venture, Firefinch demerged Leo Lithium, its wholly owned subsidiary holding
Firefinch’s interest in the Joint Venture.
DEMERGER OF LEO LITHIUM
The demerger of Leo Lithium from the Firefinch Group resulted in the formation of an independent ASX listed company, Leo
Lithium Limited, which holds a 50% interest in the Goulamina Lithium Project in Mali through the Joint Venture formed with
Ganfeng.
Under the demerger, Firefinch transferred Leo Lithium shares to eligible Firefinch shareholders by way of a pro-rata in-
specie distribution, on the basis of 1 Leo Lithium share for every 1.4 Firefinch shares. Post demerger, the Group retained a
20% equity interest in Leo Lithium Limited, which is equity accounted. On 4 July 2022, the Company sold 28.6M shares in
Leo Lithium Limited. Equity accounting ceased on this date.
The Group implemented the demerger on 9 June 2022 in accordance with the Demerger Notice of Meeting and Prospectus
and ASX announcement released on 23 June 2022. After formation of the Joint Venture, to affect the demerger the Group
firstly transferred the carrying value of the Goulamina Lithium Project to Leo Lithium (a wholly owned subsidiary of the Group
before the demerger). Then, the Group distributed 80% of its shares in Leo Lithium to its eligible shareholders, which is
reflected in the statement of changes in equity. The distribution resulted in a capital redemption of $22.6 million, with the
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
42
balance of $428.8 million distributed as a demerger dividend. The Group recognised the difference between 80% of the
carrying value of the assets derecognised and their fair value in profit and loss. These gains are shown separately in the
statement of comprehensive income.
Fair value gain on shares
2022
Total
Profit after tax from demerger
80% Distributed
20% Retained
$
$
$
Carrying value of net assets of Leo Lithium
80,061,749
20,015,437
100,077,186
Fair value of Leo Lithium (1)
451,328,566
112,832,141
564,160,707
Gross fair value gain
371,266,817
92,816,704
464,083,521
Less: transaction costs
(5,128,904)
-
(5,128,904)
Net fair value gain
366,137,913
92,816,704
458,954,617
Tax expense attributable to discontinued operations
-
(33,046,591)
(33,046,591)
Profit after tax from demerger
366,137,913
59,770,113
425,908,026
(1) The fair value of Leo Lithium was calculated using the 5-day VWAP share price of $0.5349 as traded on the ASX after the
demerger multiplied by 1,054,681,447 Leo Lithium shares issued on demerger. The fair value gain on the 20% interest
represents the gain on the remeasurement of the retained interest in Leo Lithium after the demerger.
2022
Reconciliation of Profit from Leo Demerger
Total
$
Profit after tax from Demerger
425,908,026
Gain on JV formation, including foreign currency impact
81,002,102
Recognition of intercompany balances (i)
14,933,171
Profit From Leo Demerger
521,843,299
(i)
Certain steps of the company restructure, JV formation and demerger transaction resulted in intercompany balances recognised, given they relate to the demerger these do
not relate to Firefinch's continuing operations.
KEY ESTIMATE: DETERMINING THE FAIR VALUE OF LEO LITHIUM ON DEMERGER
The fair value of Leo Lithium on demerger, being $564.1 million, was calculated using the volume weighted average price (VWAP)
of Leo Lithium shares as traded on the ASX over the first five trading days after demerger ($0.5349 per share) multiplied by the
number of Leo Lithium shares (1,054,681,447 shares). Determining the fair value of Leo Lithium on this basis was deemed as the
most appropriate and practical way of reliably estimating the fair value of Leo Lithium since it maximises the use of observable,
externally available information. The fair value of the 20% investment retained by the Group of $112.8 million was determined
by applying the same methodology.
DECONSOLIDATION OF MORILA SA
On 3 November 2022, the Company announced recapitalisation efforts would not proceed and that Firefinch Ltd would no
longer provide funding to Morila SA.
As a direct result of the withdrawal of funding support, Firefinch Limited lost the ability to instruct the General Manager of
Morila SA under Malian Law. The subsequent actions of Morila SA management on the ground reflected this.
While no longer directly involved with the mining operations, the Company continues to work with Morila SA and the local
authorities to investigate options to mitigate the impact on the mine workers and the local community. To this end, Firefinch
Limited is currently undertaking a process to find a new owner for the Morila Gold Mine who is able to provide the necessary
funding to maintain operations and see the project reach its full potential.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
43
A formal sale process was announced to the market on 14 December 2022 and remains in process.
The Board of Firefinch Limited reviewed the facts of the situation and its effect on the application of AASB 10 Consolidated
Financial Statements. It is the conclusion that Firefinch Limited lost control of Morila SA on 3 November 2022 for the purposes
of AASB 10. As a result, the Company has deconsolidated the accounts of Morila SA as at 3 November 2022.
The Financial Information relating to Morila SA at the date of loss of control is set out below:
(i) Financial Performance
2022
$
Revenues
125,876,219
Impairment losses
(222,011,948)
Expenses
(175,678,088)
Loss before Income Tax
(271,813,817)
Income Tax
(1,116,096)
Loss after Income Tax
(272,929,913)
Cashflows from De-consolidated Operations
Cashflows from Operating Activities
(34,243,991)
Cashflows from Investing Activities
(49,862,405)
Cashflows From Financing Activities
-
Net decrease in cash – Morila SA
(84,106,396)
(ii) Carrying amounts of assets and liabilities at the date of derecognition
Note
$
Current Assets
63,190,691
Non-Current Assets
15,775,200
Total Assets
78,965,891
Current Liabilities
(163,467,018)
Non-Current Liabilities
(26,545,076)
Total Liabilities
(190,012,094)
Details of the de-consolidation of the subsidiary
Net liabilities
111,046,203
Loss after tax for the period
(272,929,914)
Loss on deconsolidation of net assets of Morila SA
19 (161,883,711)
KEY JUDGEMENT
The financial information above relating to Morila SA at the date of loss of control on 3 November 2022 was prepared using
the best available financial information and data at this date, however as a result of the loss of control the Company has been
unable to access financial records that evidence the transactions and financial position of Morila SA from this date.
PROFIT FROM DISCONTINUED OPERATIONS
Reconciliation of Profit from discontinued operations
2023
2022
$
$
Profit from Leo Demerger
-
521,843,299
Loss on deconsolidation of Morila SA
-
(161,883,711)
Profit From Discontinued Operations
-
359,959,588
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
44
20.
SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
Name of Subsidiary
Place of
Incorporation
Consolidated Entity Interest, %
2023
2022
Birimian Gold (Mali) Pty Limited
Australia
100
100
Birimian Gold Mali SARL
Mali
100
100
Birimian Gold Liberia Inc
Liberia
100
100
Sudquest SARL
Mali
100
100
Timbuktu Resources SARL
Mali
100
100
Leo Lithium Limited (1)
Australia
-
-
Lithium du Mali SA (1)
Mali
-
-
Firefinch Services Pty Ltd
Australia
100
100
Morila Limited
Jersey
100
100
Société des Mines de Morila SA (2)
Mali
80
80
Mali Lithium BV (1)
Netherlands
-
-
(1) Leo Lithium Limited, Lithium du Mali SA and Mali Lithium BV were demerged at 9 June 2022. Refer to Note 19
(2) Société des Mines de Morila SA was deconsolidated at 3 November 2022. Refer to Note 19.
21.
PARENT ENTITY DISCLOSURE
Parent
2023
$
2022
$
Assets
Current assets
34,516,609
40,662,091
Non-current assets
83,250,975
83,388,764
Total assets
117,767,584
124,050,855
Liabilities
Current liabilities
624,478
1,489,320
Non-current liabilities
-
231,984
Total liabilities
624,478
1,721,304
Equity
Issued capital
303,823,417
303,823,417
Reserve
7,918,137
8,939,959
Accumulated losses
(194,598,448)
(190,433,824)
Total equity
117,143,106
122,329,552
(Loss) for the year
(4,164,624)
(86,817,927)
Other comprehensive income
-
Total comprehensive (loss) / income
(4,164,624)
(86,817,927)
Contingent liabilities of the parent entity. Refer to Note 26 .
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
45
RECOGNITION & MEASUREMENT
The financial information for the parent entity, Firefinch Limited has been prepared on the same basis as the consolidated
financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of Firefinch
Limited. Dividends from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the
carrying amount of these investments. No dividends were received in 2023 (2022: nil).
22.
RELATED PARTY DISCLOSURES
(a) Identity of related parties
The consolidated entity has a related party relationship with its subsidiaries (see note 20) and with its key management
personnel (refer below).
(b) Transaction with other related parties
The transactions with other related parties are as follows.
Consolidated
2023
$
2022
$
Transactions with other related parties
20,000
301,778
Total transactions with other related parties
20,000
301,778
(1)
Consultancy fee of $20,000 was paid to Wolfstar Corporate Management Pty Ltd, a related party of Brett Fraser.
(c) Key management personnel compensation
The key management personnel compensation included in ‘Employee benefits expenses’ and ‘Share based payments’ is as
follows.
Consolidated
2023
$
2022
$
Short-term employee benefits
578,269
1,914,200
Post-employment benefits
60,779
149,990
Termination benefits
373,103
570,679
Share-based payments
413,284
849,073
Total compensation
1,425,435
3,483,942
Details of remuneration disclosures are provided in the remuneration report on pages 8-18
23.
REMUNERATION OF AUDITORS
Consolidated
2023
$
2022
$
Amounts paid or payable to PwC Australia for:
Audit services
275,400
142,095
Consultancy services
20,400
59,160
Tax advisory services
-
-
295,800
201,255
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
46
Amounts paid or payable to auditors in Mali:
Audit services by Sec Diarra SARL to Société des Mines de Morila SA
-
-
Audit services by Sylla et Associes SARL to Birimian Gold Mali SARL, Timbuktu Resources
SARL and Sudquest SARL
-
24,717
-
24,717
-
225,972
24.
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated
Note
2023
$
2022
$
Reconciliation of cash flow from operating activities to loss after income tax
Profit after income tax
(1,682,352)
(51,078,010)
Non-cash flows in (loss)/profit from ordinary activities:
Depreciation and amortisation
64,172
168,930
Net share-based payments expensed
(1,021,822)
622,864
Foreign exchange (gain)/loss
170,313
(2,174,852)
Impairment loss
7
-
17,076,982
Fair value gain on investment
14
(4,218,831)
(2,109,415)
Loss on Disposal of Assets
167,387
-
Loss on disposal of investment
14
-
19,507,355
Discontinued operations
23
-
(34,243,991)
Changes in operating assets and liabilities:
(Increase)/decrease in inventory
-
-
(Increase)/decrease in trade and other receivables
1,562,890
1,447,814
(Increase)/decrease in prepayments
-
-
(Increase)/decrease in other assets
-
-
Increase/(decrease) in trade and other payables
(745,355)
(677,567)
Increase/(decrease) in provisions
(37,847)
156,515
Increase/(decrease) in deferred tax liability
1,356,647
-
Cash flow from operating activities
(4,384,798)
(53,303,375)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
47
25.
COMMITMENTS
Exploration commitments
With respect to the Group’s exploration tenements in Mali, the Group is subject to minim expenditure requirements. In
assessing subsequent renewal applications, the mining authorities review actual expenditure against previous expenditure.
These amounts do not become legal obligations of the Group and actual expenditure does vary depending on the outcome
of the actual activities.
2023
$
2022
$
Within one year
433,456
433,456
After one year but not more than five years
-
-
433,456
433,456
This value represents the Group’s Exploration commitment under the current Mining Act. The proposed new mining act
would require annual expenditure commitments of $2,126,402 should it become Law by Presidential Decree.
26.
CONTINGENCIES
Capital Gains Tax
Under the Malian Mining Code, the Government has the right to collect tax on a direct or indirect change in control of
tenements in Mali. The in-specie distribution of shares by Firefinch may give rise to a change in control by a foreign entity
that could result in a capital gain for Firefinch. Under the Demerger Deed, Leo Lithium has indemnified Firefinch for any loss
or damage (including tax liabilities) incurred in connection with the Demerger and the reorganisation of assets and liabilities
required to implement the Goulamina Joint Venture, and any other loss or damage incurred by Firefinch (including tax
liabilities) relating to the Leo Lithium business. As a result of this indemnification, Leo Lithium would be obligated to reimburse
any capital gains tax liability incurred by Firefinch. However, on 7 May 2024, Firefinch, Leo Lithium and Ganfeng entered into
a Deed of Covenant and release whereby Firefinch has agreed to unconditionally release Leo Lithium and its associates from
all claims in relation to the Demerger Deed.
Legal Contingencies
On 3 November 2022 the Board of Firefinch advised the Board of Morila SA that Firefinch Limited would no longer be able to
provide funding support to the Morila Gold Project. As disclosed in note 19, Firefinch lost control of Morila SA at this date
and as at 3 November 2022 Morila SA had net liabilities of $111,046,203.
On 3 August 2023, the Company advised the market it had received a letter from the Minister of Mines, Mali advising that
the Government will not approve any deed of sale of Firefinch’s interest in Morila SA unless Firefinch resolves issues relating
to the Morila Gold Mine.
On 8 May 2024, the Company announced that Firefinch, Leo Lithium Limited (“Leo Lithium”), Ganfeng and the Government
of Mali had signed a Memorandum of Understanding (“MoU”) to settle all disputed matters. Firefinch has agreed to
transfer its shares together with the “intercompany loans” in Morila SA for USD$1 and shares together with the
“intercompany loans” held in its subsidiaries in Mali for USD$1 to a government company (SOREM Mali SA), such
agreement within the MoU is not subject to Firefinch obtaining shareholder approval.
In the course of operating the Morila Mine, Morila SA has received financial support from Firefinch in the form of a loan of
US$102,668,563, and from Morila Limited in the form of a loan of US$22,691,081. The Morila SA Sale involves Firefinch
assigning these Intercompany Loans to SOREM Mali SA and in doing so removes the right of Firefinch and Morila Limited to
receive the benefit of those Intercompany Loans.
In the course of operating the Subsidiaries, the Subsidiaries have received financial support from Firefinch Limited in the
form of loans in aggregate of AU$21,410,091. The Sale of the Subsidiaries involves Firefinch assigning the Intercompany
Loans to SOREM Mali SA and in doing so removes the right of Firefinch to receive the benefit of those Intercompany Loans.
The directors have considered the possibility that Morila SA or its creditors might take legal action to attempt to compel the
Company to meet Morila SA’s liability. It is the position of the Directors that Firefinch is not a signatory to any of the operating
agreements of Morila SA and there exists no formal funding agreement or Deed of Guarantee between Firefinch Limited as
a majority shareholder, and Morila SA, that would require Firefinch to either continue to fund Morila SA, nor meet its debts.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
Firefinch Limited Annual Report | 31 December 2023
48
As included in note 13 below, the Company announced on 27 May 2024 that it had received a Notice of Arbitration under the
Arbitration Rules of the United Nations Commission on International Trade Law (Arbitration Notice) from Entreprise Générale
Traoré et Frères SARL (EGTF). The Arbitration Notice is in connection with Morila SA’s purported failure to pay amounts under
certain outstanding invoices to EGTF further to a mining services contract between EGTF and Morila SA dated 2021. EGTF
claims an amount of no less than XAF 12,838,591,019 ($31,853,880) which the Company intends to vigorously defend.
The Group believes it is highly improbable that a court will place such a liability on Firefinch. On this basis no provisions have
been recorded in respect of these matters.
27.
EVENTS OCCURRING AFTER THE END OF YEAR DATE
Leo Lithium Limited Suspension
On 23 June 2024, Firefinch’s shareholding in Leo Lithium came out of escrow with the shares now quoted on ASX. Agreement
has now been reached and has received shareholder approval for the sale of its remaining 40% shareholding in Mali Lithium
B.V. for US$342.7million to Ganfeng, this was after an initial sale of 5% interest being transacted on 19 January 2024 for
US$65million. Additional funds are planned to be returned to shareholders as part of the first distribution in January 2025
and second distribution planned for July 2025. Ganfeng has agreed to pay Leo Lithium a trailing product sales fee as
consideration for the assignment of the offtake rights, this trailing fee is valued at 1.5% of gross revenue received from the
sale of up to 500,000 tonnes from the project per year for a term of 20 years. It ceased being the manager of the project and
transferred all responsibilities to Ganfeng on 1 July 2024. The Company remains suspended on the ASX and is continuing to
resolve outstanding matters with the ASX with the objective of being reinstated on ASX .
Deed of Covenant and Release with Leo Lithium
On 7 May 2024, Leo Lithium, Ganfeng and Firefinch entered into a deed of Covenant and Release whereby the Company has
agreed to make a $11,500,000 contribution to Leo Lithium. The deed includes an unconditional release by Firefinch in favour
of Leo Lithium and its associates from all claims in relation to the Demerger Deed signed 29 April 2022
Memorandum of Understanding (MOU) signed with the Mali Government
On 8 May 2024, the Company announced that Firefinch, Leo Lithium Limited and Ganfeng and the Government of Mali had
signed an MoU to settle all disputed matters. The MoU provides for the settlement of the Government’s claims against
Firefinch Limited and Leo Lithium whereby:
● Ganfeng on behalf of Leo Lithium will make payment to the Government of US$60 million in the name of and on
behalf of Leo Lithium and Firefinch to, among other things, settle all disputes with the Government concerning
Morila SA;
● Firefinch Limited has agreed to transfer its shares together with the assigned loans in Morila SA for USD$1 and all
mining titles held by its subsidiaries in Mali for USD$1 to SOREM Mali SA.
Arbitration Notice
On 27 May 2024, the Company announced that it had received a Notice of Arbitration under the Arbitration Rules of the
United Nations Commission on International Trade Law (Arbitration Notice) from Entreprise Générale Traoré et Frères SARL
(EGTF). The Arbitration Notice is in connection with Morila SA’s purported failure to pay amounts under certain outstanding
invoices to EGTF further to a mining services contract between EGTF and Morila SA dated 2021. EGTF claims an amount of no
less than XAF 12,838,591,019 ($31,853,880).
Removal from ASX
On 1 July 2024 the Company was removed from the Official List of the ASX.
DIRECTORS’ DECLARATION
Firefinch Limited Annual Report | 31 December 2023
49
MR BRETT FRASER
Executive Chairman
Dated 29 OCTOBER 2024
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages 21-48 are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements, and
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 31 December 2023 and of its
performance for the financial year ended on that date,
(b)
as disclosed in note 1 to the financial statements, the company is no longer a going concern. However, the assets exceed
the liabilities and there are reasonable grounds to believe that the company will be able to pay its debts as and when
they become due and payable, and
Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director and Chief Financial Officer required by section 295A
of the Corporations Act 2001.
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:
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, Level 15, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Firefinch Limited
Our qualified opinion
In our opinion, except for the possible effects of the matters described in the Basis for qualified opinion
section of our report, the accompanying financial report of Firefinch Limited (the Company) and its
controlled entities (together 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 31 December 2023 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
●
the consolidated statement of financial position as at 31 December 2023
●
the consolidated statement of changes in equity for the year then ended
●
the consolidated statement of cash flows for the year then ended
●
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
●
the notes to the consolidated financial statements, including material accounting policy
information and other explanatory information
●
the directors’ declaration.
Basis for qualified opinion
During the year ended 31 December 2022, the Group lost control of and deconsolidated its subsidiary,
Société des Mines de Morila SA. The Company was unable to access financial records that evidence
the transactions and financial position of Société des Mines de Morila SA from 3 November 2022. As a
result, we were unable to obtain sufficient appropriate audit evidence regarding the classification of
items within the disclosure of financial performance in Note 19 for the period ended 3 November 2022
and carrying amounts of assets and liabilities at the date of derecognition in Note 19 in relation to the
deconsolidated subsidiary and were therefore unable to determine whether any adjustments to these
disclosures were necessary. Our audit opinion on the financial report for the year ended 31 December
2022 was modified accordingly.
The audit opinion on the current year’s financial report is also modified because of the possible effects
of this matter on the comparability of the current year’s figures and the corresponding figures.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our qualified opinion.
Independence
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 & 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.
Emphasis of matter - going concern no longer appropriate
We draw attention to Note 1 in the financial report, which comments on the directors' intention to
transfer shares in its subsidiary, Société des Mines de Morila SA, to SOREM Mali SA and to return
remaining assets to shareholders when practicable. As a result, the financial report has been prepared
on a liquidation basis and not on a going concern basis. Our opinion is not modified in respect of this
matter.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 31 December 2023, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon through our opinion on the financial report. We
have issued a separate opinion on the remuneration report.
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 on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance
with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or 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 the 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/ar3.pdf.
This description forms part of our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 31
December 2023.
In our opinion, the remuneration report of Firefinch Limited for the year ended 31 December 2023
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Helen Bathurst
Perth
Partner
29 October 2024