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2023 ReportPeers and competitors of Ionic Rare Earths Limited:
Ionic Rare Earths LimitedAnnual
Report
30 June 2023
ABN 84 083 646 477
Corporate Directory
This annual report covers the consolidated entity of Ionic Rare Earths Limited (“Ionic Rare Earths”)
and its subsidiaries. The consolidated entity’s functional and presentation currency is AUD ($).
A description of the consolidated entity’s operations and of its principal activities is included in the
review of operations and activities in the directors’ report.
Directors
Bank
T J Harrison - Managing Director
National Australia Bank
M E McGarvie - Non-Executive Director
Level 1, Gateway Building
S Ahmad - Non-Executive Director
N Tyagi - Non-Executive Director
177-179 Davy Street
Booragoon WA 6154
Company Secretary
B D Dickson
Registered Office and
Principal Place of Business
Level 5 South
459 Colins Street
Melbourne VIC 3000
Telephone: 03 9776 3434
Share Registry
Solicitors
K & L Gates
Level 32
44 St. George’s Terrace
Perth WA 6000
Stock Exchange
Australian Securities Exchange
Code: IXR
Website
Computershare Investor Services Pty Ltd
www.ionicre.com.au
Level 11
172 St. George’s Terrace
Perth WA 6000
Telephone: 1300 787 272
Auditors
BDO Audit (WA) Pty Ltd
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
Contents
Directors’ Report
Directors’ Declaration
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Independent Auditor’s Report
Corporate Governance Statement
ASX Additional Information
3
38
39
40
41
42
43
44
82
86
96
Competent Person Statement:
Information in this report that relates to previously reported Exploration Targets and Exploration Results has been cross-
referenced in this report to the date that it was originally reported to ASX. Ionic Rare Earths Limited confirms that it is not
aware of any new information or data that materially affects information included in the relevant market announcements.
The information in this report that relates to Mineral Resources for the Makuutu Rare Earths deposit was first released to the
ASX on 20 March 2022 and is available to view on www.asx.com.au. Ionic Rare Earths Limited confirms that it is not aware
of any new information or data that materially affects information included in the relevant market announcement, and that all
material assumptions and technical parameters underpinning the estimates in the announcement continue to apply and have
not materially changed.
The information in this report that relates to Ore Reserves for the Makuutu Rare Earths deposit was first released to the ASX
on 20 March 2023 and is available to view on www.asx.com.au. Ionic Rare Earths Limited confirms that it is not aware of any
new information or data that materially affects information included in the relevant market announcement, and that all material
assumptions and technical parameters underpinning the estimates in the announcement continue to apply and have not
materially changed.
The information in this report that relates to Production Targets or forecast financial information derived from production the
production target for the Makuutu Rare Earths deposit was first released to the ASX on 20 March 2023 and is available to view
on www.asx.com.au. Ionic Rare Earths Limited confirms that all material assumptions and technical parameters underpinning
the Production Targets or forecast financial estimates in the announcement continue to apply and have not materially changed.
Ionic Rare Earths
Securing critical
elements for the
new economy
2
Directors' Report
Directors
The names and details of the directors of Ionic Rare Earths Limited in office during the financial year
and until the date of this report are as follows. Directors were in office for the whole of the financial
year, unless otherwise stated.
T Harrison Managing Director
B.Eng (Chem), Fellow AusIMM
M McGarvie Non-Executive Director
MBT, MAICD, FAIM
Appointed 21 December 2020
Appointed 16 July 2021
Mr. Harrison holds a Bachelor of Chemical Engineering
Mr. McGarvie is a senior mining executive with
degree from Adelaide University and has over 20
an extensive portfolio of technical/managerial
years of experience and an extensive and successful
appointments in a career exceeding 45 years in mine
track record in the fields of both mineral processing
development, mineral processing, operational and
and hydrometallurgy across multiple commodities,
management roles across Australia, Africa and the
including significant battery and technology metals
Middle East. He has had a long and distinguished
experience.
This has involved roles in project development, from
process development, through studies and engineering,
and commissioning and operations. Mr. Harrison is
a Fellow of the Australian Institute for Mining and
Metallurgy (AusIMM).
Mr. Harrison has been instrumental in driving the
development of Makuutu and identifying opportunities
for enhanced value creation through downstream
refining.
Other Public Company Directorships
in the past 3 years
Viridis Mining and Minerals Limited (appointed 17
February 2022)
career in the mining industry, a significant portion of
this with Iluka Resources Limited and prior entities,
including development roles within its mineral
sands operation at Eneabba, Western Australia and
a major role in returning the Sierra Rutile mineral
sands operation in Sierra Leone (operated by Iluka)
to profitable operations following the civil war in that
country.
Other Public Company Directorships
in the past 3 years
Nil
3
Ionic Rare Earths Limited Annual Report 2023
S Ahmad Non-Executive Director
Appointed 10 May 2023
N Tyagi Non-Executive Director
MSc (Material Science),
B.Tech (Metallurgical & Materials)
Mr Ahmad holds a Master of Business Administration, a
Post-Graduate Diploma in Commercial and Resources
Appointed 1 July 2023
Law, a Bachelor of Law (Hons) and a Diploma in
Financial Planning and brings strong legal, business
and marketing expertise to the board with over 10
years’ experience in the resource sector in the provision
of corporate advisory services.
Mr Ahmad is also the founder of Sixty Two Capital, an
advisory firm specialising in the growth and funding of
emerging ASX companies.
Other Public Company Directorships
in the past 3 years
Pathfinder Resources Limited
Mr Tyagi is currently VP of supply chain at Our Next
Energy (ONE), a battery company based in Novi,
Michigan. Prior to ONE, Mr Tyagi was the Director of
Battery Supply Chain at Rivian Automotive managing
all nodes of the battery supply chain from mines to
battery packs to recycling. He scaled-up and ramped
four electric vehicle programs (R1T, R1S, EDV NCA, EDV
LFP) from pre-production to launch. Mr Tyagi drove the
iron-phosphate chemistry adoption on Amazon Electric
Delivery Vans resulting in significant cost savings.
Previously, Mr Tyagi was part of Apple’s operations
and supply chain team and helped launch over 20
Apple products, including every iPhone from iPhone
6 to iPhone 12. Before Apple, Mr Tyagi was in various
engineering roles at Cree and Sun Catalytix (acquired
by Lockheed Martin in 2014).
Other Public Company Directorships
in the past 3 years
Nil
4
T Benson Chairman
B.Sc
Appointed 31 August 2020, resigned 30 June 2023
Mr Benson has extensive experience as an investment
banker and has served on a number of ASX listed
company boards as both Chairman and Director. He
has specialised in cross border transactions within
the natural resources sector across China, Africa and
SE Asia, and has been an adviser to Chinese State-
Owned Enterprises (SOE’s). His specialist activities
include corporate funding solutions within the natural
resources domain. Trevor holds a Bachelor of Science
Degree from the University of Western Australia.
Other Public Company Directorships
in the past 3 years
J Kelley Executive Director
Appointed 7 July 2021, resigned 3 March 2023
Ms. Kelley has previously held roles at the highest
levels of international leadership and has played a
crucial role in supporting U.S. military operations
spanning over 60 countries, collectively known as
the U.S. Coalition Allies. Ms. Kelley's networks in, and
knowledge of, Europe, the Middle East, Asia, and South
and Central America have helped advance American
interests during the most critical points in current
history. A former honorary ambassador to U.S. Central
Command General Mattis and CIA Director David
Petraeus. Ms. Kelley received the Pentagon’s esteemed
Joint Chiefs of Staff Award for her leadership, along
with the Multi-National Military Forces Award, an
honour only bestowed upon a few individuals.
• Walkabout Resources Ltd (resigned 19 October
2020)
Other Public Company Directorships
• Cannon Resources Limited (resigned 27 June 2022)
in the past 3 years
•
Evolution Energy Minerals Limited (resigned 15
Nil
February 2023)
B Dickson Company Secretary
B.Bus, FCPA, FGIA, MAICD
Appointed a director on 21 November 2014 (resigned
as a director on 21 December 2020).
Mr. Dickson has over 20 years’ experience in the
financial management of companies, principally
companies in early stage development of its resource
or production and offers broad financial management
skills. He has been Company Secretary and Chief
Financial Officer (CFO) for a number of successful
resource companies listed on the ASX.
Other Public Company Directorships
in the past 3 years
Rox Resources Limited (resigned 30 June 2021)
5
Ionic Rare Earths Limited Annual Report 2023 Makuutu’s basket is
39% Magnet Rare
Earths, enabling
net zero carbon and
deployment into key
applications
6
Interests in the Shares and Options of the Company
As at the date of this report the interests of the directors in the securities of the company were:
Variable
T Benson (resigned 30 June 23)*
T Harrison
J Kelley (resigned 3 March 2023)*
M McGarvie
S Ahmad (appointed 10 May 2023)
121,396,203
N Tyagi (appointed 1 July 23)
-
* Holding at time of resignation
Shares
Options over
Ordinary Shares
Performance Rights
4,362,500
20,000,000
3,500,000
-
15,000,000
30,000,000
-
3,000,000
12,500,000
-
-
6,700,000
3,500,000
-
-
-
Interests in Contracts or Proposed Contracts
with the Company
During or since the end of the financial year, no director has had any interest in a contract or proposed contract
with the company being an interest the nature of which has been declared by the director in accordance with
Section 300(11)(d) of the Corporations Act 2001.
Directors’ Meetings
During the year seven directors’ meetings were held. The number of meetings attended by each
director was as follows:
Variable
T Benson
T Harrison
J Kelley
M McGarvie
S Ahmad
No. of meetings held while in office
Meetings attended
7
7
4
7
2
7
7
3
7
2
As at the date of this report, the company did not have audit, remuneration or nomination committees, as the
directors believe the size of the company does not warrant their existence.
7
Ionic Rare Earths Limited Annual Report 2023 Dividends Paid or Proposed
The company has not paid any dividends since the commencement of the financial year, and no dividends are
proposed to be paid.
Corporate Information
The Financial Statements of Ionic Rare Earths Limited for the year ended 30 June 2023 were authorised for issue
in accordance with a resolution of the directors on 22 September 2023. The group’s functional and presentation
currency is AUD ($).
Ionic Rare Earths Limited is a company limited by shares incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange.
Principal Activities
The principal activity during the year of the group was the completion of feasibility studies in preparation for the
construction of a demonstration plant at the 60% owned Makuutu rare earths project in Uganda and construction
of a demonstration plant at the Groups magnet recycling facility in Norther Ireland.
The group’s business is conducted from operations located in Australia, Uganda through its 60% owned affiliate
Rwenzori Rare Metals Limited, and the UK through its 100% owned subsidiary Ionic Technologies International
Limited.
Employees
Other than the Directors the group had 34 employees at 30 June 2023 (2022: 3).
Operating and Financial Review
Ionic Rare Earths – securing critical elements for the new economy
Over the financial year ending 30 June 2023, Ionic Rare Earth build internal capability to harness technology
innovations, grow strategic partnerships and accelerate the Company’s vision to mine, refine and recycle magnet
and heavy rare earths critical for the energy transition, advanced manufacturing, and defence.
Ionic Rare Earths’ three-pillar strategy continues to demonstrate alignment with global policies outlined throughout
the financial year. Significantly, the final quarter of the financial year 2023 culminated in the achievement of several
pivotal milestones across its activities. These achievements continue to create significant inroads to working
with all the actors of the western supply chain for critical elements, such as global policy makers, governments,
downstream partners and other collaborators who ultimately make up the new economy.
8
Makuutu’s Strategic Importance
will increase long term
9
Ionic Rare Earths Limited Annual Report 2023 The Makuutu Rare Earths Project
Uganda (60% Ionic Rare Earths Ltd)
The Makuutu Rare Earths Project (“Makuutu” or “the Project”) currently ranks amongst the world’s largest and most
advanced ionic adsorption clay (IAC) deposits, and as such, a globally strategic resource for near term, low capital
development and long-term security of magnet and heavy rare earth oxide (REO) supply.
Makuutu, comprising six licences (see Table 1) covering approximately 300 km², is located 120 km east of Kampala
in Uganda (Figure 1). The deposit stretching 37km end to end, is situated near high quality tier one infrastructure
(Figure 2) and has the potential to provide the new economy with a strategic alternative supply of heavy REO to
support the growth of advanced manufacturing and industries critical to achieve net-zero carbon initiatives for 50
years and beyond.
Table 1: Makutu Rare Earths Project Tenement Status and Details
Licence ID
Licence Type
Application
Date
Granted Date
Expiry /
Renewal Date
Area (km²)
RL00007
Retention
12/12/2022
20/12/2022
26/11/2024
RL1693 / TN03834
Retention
01/09/2022
Pending
Pending
RL00234
EL00257
EL00147
EL00148
Retention
Exploration
Exploration
Exploration
26/06/2021
06/07/2021
05/07/2024
15/07/2021
21/10/2021
20/10/2024
19/10/2020
28/12/2020
27/12/2023
21/10/2020
28/12/2020
27/12/2023
43.38
43.78
47.03
55.51
60.30
48.15
Highlighted row showing tenement supporting Stage 1 development for RL 1693 only,
supporting the MLA application.
10
Figure 1: Makuutu Project location within Uganda and proximity
11
Ionic Rare Earths Limited Annual Report 2023 Figure 2: Makuutu proximity to local infrastructure to support the Project.
Figure 3: Makuutu Project resource map showing the Stage 1 Mining Licence Application TN03834 (red border)
and exploration target areas.
12
Makuutu is being developed by Rwenzori Rare Metals Limited (“RRM”), a Ugandan private company which owns
100% of the Makuutu Project. During the year, Ionic Rare Earths increased its ownership in RRM to become a 60%
owner of RRM and is awaiting approval of the Mining Licence at Makuutu. Ionic Rare Earths has the first right over
the remaining 40% stake in RRM, and Makuutu and is progressing discussions with partners on a transaction to
increase ownership, paving the way towards an investment decision.
Makuutu has a large and growing Mineral Resource Estimate (MRE) defined at Makuutu (Table 2 and ASX: 3 May
2022). RRM initiated the Mining Licence Application (MLA) process for Makuutu in September 2022. The MLA
was applied over the Makuutu Central Zone (MCZ), located within Retention Licence (RL) 1693, and will provide
the basis for initial mining at Makuutu. This area contains an Indicated Resource of 259 million tonnes at 740 ppm
TREO-CeO2 (Table 3 and ASX: 3 May 2022).
Table 2: Makuutu Resource above 200ppm TREO-CeO2 Cut-off Grade (ASX : 3 May 2022)
Resource Classification
(millions)
(ppm)
(ppm
(ppm)
Tonnes
TREO
TREO-CeO2
LREO
HREO
(ppm)
CREO
(ppm)
Sc2O3
(ppm)
Indicated Resource
Inferred Resource
Total Resource
404
127
532
670
540
640
450
360
430
500
400
480
170
140
160
230
180
220
30
30
30
Rounding has been applied to 1Mt and 10ppm which may influence averaging calculation.
All REO are tabulated in announcement 3 May 2022 with formulas defining composition of (Light Rare Earth Oxides
(“LREO”), HREO and Critical Rare Earth Oxides (“CREO”).
Table 3: Mineral Resources by Area (ASX: 3 May 2022)
Classification
Indicated Resource
Inferred Resource
Total Resource
Area
A
B
C
D
E
Central Zone
Central Zone East
F
G
H
I
Total Resource
Tonnes
(millions)
TREO
(ppm)
TREO-
CeO2
(ppm (millions)
Tonnes
TREO
(ppm)
TREO-
CeO2
(ppm (millions)
Tonnes
TREO
(ppm)
TREO-
CeO2
(ppm
–
–
31
–
–
151
59
18
9
6
129
404
–
–
–
–
580
400
–
–
780
750
630
750
800
540
670
–
–
540
490
420
500
550
350
450
13
26
3
6
18
12
12
7
5
7
19
127
580
410
490
560
430
670
650
590
710
680
530
540
390
290
350
400
280
460
430
400
450
480
350
360
13
26
35
6
18
163
72
25
14
13
148
532
580
410
570
560
430
770
730
620
730
740
540
640
390
290
400
400
280
530
480
410
480
510
350
430
Rounding has been applied to 1Mt and 10ppm which may influence averaging calculations.
Highlighted rows providing Indicted Resource Estimate for MLA over RL 1693.
13
Ionic Rare Earths Limited Annual Report 2023 In October 2022, the Company advised that Uganda’s National Environmental Management Authority (NEMA) had
approved the Environmental and Social Impact Assessment (ESIA) for the Makuutu. In recognition of the flagship
nature of the Project and its significance to the country’s development outlook as enshrined in Uganda’s National
Development Plan NDP-III, the certificate was awarded at a ceremony held in Kampala at NEMA’s headquarters.
Figure 4: NEMA Executive presenting the Certificate of Approval for the Makuutu Rare Earth Project ESIA to the
Rwenzori team in Uganda.
In January 2023 the Company advised that Retention Licence (RL) 00007 was renewed for a further two years.
In March 2023, a maiden Ore Reserve Estimate was announced over RL 1693 at Makuutu, of 172.9 Mt at 848 ppm
TREO, or 584 ppm TREO – CeO2, and 30 ppm Sc2O3.
In March 2023, the Company announced a Definitive Feasibility Study (DFS) for the first stage of development
at Makuutu over RL1693 A summary of the Makuutu Stage 1 DFS results are provided in Table 4. The financial
modelling of the DFS was carried out on a 100% ownership basis to determine Project value.
14
Table 4: Makuutu Stage 1 DFS Financial and Technical Summary.(ASX: 19 March 2023)
Parameter
Stage 1 Duration
Stage 1 Feed, dry
Stage 1 Waste, dry
Stage 1 Strip Ratio
Stage 1 TREO Head Grade
Stage 1 TREO-CeO2 Head Grade
Total REO Feed
Total REO Production
Average REO Production
Stage 1 Sc2O3 Head Grade
Total Sc2O3 Feed
Total Sc2O3 Production
Annual Average Sc2O3 Production
Recoveries – TREE-Ce
Yield – TREO-CeO2
MREC Payability
Total Stage 1 Revenue
REO Revenue, Stage 1
Sc2O3 Revenue, Stage 1
REO Revenue (excl Sc2O3), per t Ore
REO Revenue (excl Sc2O3), per kg REO
Total Stage 1 OPEX
Mining OPEX
Processing OPEX
G&A OPEX
OPEX, annual average
OPEX, per t Ore (dry)
OPEX, per kg REO
OPEX, per kg REO (less Sc2O3 credit)
Govt Royalties
Social Fund Package – CSR
CAPEX, upfront
CAPEX, sustaining
Tax
Total Free Cash Flow
EBITDA
Pre-Tax NPV8 (01-Jul-23)
Post-Tax NPV8 (01-Jul-23)
IRR
Payback from First Production
Unit
Years
Mt
Mt
Mt
Ppm
Ppm
Kt
Kt
t/a
Ppm
T
T
t/a
%
Ppm
%
USD, M
USD, M
USD, M
USD/t
USD/kg
USD, M
USD, M
USD, M
USD, M
USD, M
USD/t
USD/kg
USD/kg
USD, M
USD, M
USD, M
USD, M
USD, M
USD, M
USD, M
USD, M
USD, M
%
Years
DFS Results
35
172.9
98.8
0.57
848
584
146.7
40.1
1,156
30
5,112
511
15
35%
208
70%
3,984
3,707
277
21.44
91.64
2,143
757
1,309
260
61.24
12.40
52.99
46.13
199
40
120.81
19.28
438
1,023
1,602
406
278
32.7%
3
15
Ionic Rare Earths Limited Annual Report 2023 In May 2023 the Company received approval and commenced the Phase 5 drill program from NEMA, the focus of
activities including:
•
Increased classification of Inferred Resources to Indicated Resources at RL00007 to support the next MLA with
the commencement of rotary air blast (RAB) drilling and diamond infill drilling; and
• RAB drilling at Makuutu exploration targets on EL00147 and EL00257 to evaluate areas with known rare earth
mineralisation and untested geophysical anomaly target areas.
In April 2023 the Company received approval from the Ugandan Ministry of Energy and Mineral Development
(MEMD) to commence activity for the Demonstration Plant at Makuutu. The construction of a technical facility
at the Makuutu Mine Site is required to validate and optimise metallurgical test work and provide a foundation for
grade control, mine design, material handling, metallurgical reconciliation and scale up construction activity to
support the commercial Project financing process. As this represents a significant capital expenditure, prudent
engineering management requires a suitable demonstration be conducted for a representative period of time
in order to de-risk the entire process chain of mixed rare earth carbonate (MREC) production from mining to
transportation to potential customer facilities.
MLA advances with gazetting of updated mining regulations
In 2022, Uganda implemented a new mining act. To enable RRM to finalise the MLA, the update of the mining
regulations in Uganda to reflect the new mining act was a pre-requisite. The Company has been working closely
with the DGSM and the MEMD to monitor the revision, approval and gazetting process. The time and diligence to
legislate Uganda’s new mining regulations demonstrates the Government’s intent on securing the right balance
between growing the economy and ensuring sustainable mining practices and balancing stakeholder interest.
Post end of the reporting period, the new regulations were approved (August 2023) and publicly gazetted
(September 2023), announcing the updated Mining and Minerals (Licencing) Regulations 2023 had been passed
into law. Uganda’s mining industry is developing, as such, due care was undertaken by the authorities to consult
widely on the new regulations. The longer than expected time taken to update the mining regulations has extended
timelines for the approval of Makuutu’s MLA for RL 1693 (TN03834). All documents have been submitted,
application fees paid and the Company expects award shortly.
16
Figure 5: Makuutu Demonstration Plant ground-breaking performed by RRM Country Manager, Patience Singo (left), and Ben
Vietnieks (ADT Africa, Right) along with Bugweri District officials at the Makuutu Demonstration Plant site in the Makandwa Village,
Makuutu Sub-County.
Figure 6: Tool box talks for the Makuutu Demonstration Plant construction team.
17
Ionic Rare Earths Limited Annual Report 2023 Ionic Technologies – UK
(100% Ionic Rare Earths Limited)
Ionic Technologies International Limited (“Ionic Technologies”), previously Seren Technologies Limited, is a 100%
owned subsidiary of Ionic Rare Earths Ltd. Based in Belfast, UK, Ionic Technologies represents a significant part
of the Company’s supply chain integration strategy by providing supply of secondary sourced magnet REOs to
help the establishment of sovereign capability for western governments, and seed new development of alternative
supply chains.
Since its founding in 2015, as a spinout from Queens University Belfast (QUB), Ionic Technologies has developed
processes for the separation and recovery of rare earths from mining ore concentrates and waste permanent
magnets.
The technology developed is a step up in efficient, non-hazardous, and economically viable processing with
minimal environmental footprint.
Ionic Technologies has demonstrated capability to achieve near complete extraction of rare earths from spent
magnets and waste (swarf) to a recovery of high value magnet REO product quality exceeding 99.9% REO.
Ionic Technologies now has “first mover” advantage in the industrial elemental extraction of separated REOs from
spent magnets and waste, enabling near term magnet REO production capability to satisfy growing demand from
the energy transition, advanced manufacturing, and defence.
Ionic Technologies proprietary technology provides a universal method for the recovery of high purity REOs from
lower quality and variable grade magnets, to be used in the manufacture of modern high-performance and high
specification permanent magnets required to support substantial growth in both EV and wind turbine deployment.
In September 2022, the Company received a grant of £1.72 million (approximately A$2.9 million) from the UK
Government Advanced Propulsion Centre (APC). The APC is a non-profit organisation that facilitates funding to UK
based research and development projects developing low-carbon emission powertrain technologies, funded by UK
Department for Business and Trade (DBT) and managed by Innovate UK.
Ionic Technologies applied for the grant under the Innovate UK Automotive Transformation Fund Scale up
Readiness Validation (SuRV) program to develop a demonstration scale magnet recycling plant, a significant step
towards securing the UK supply of critical rare earth metals for Electric Vehicle (EV) manufacture. The magnet REO
products are also crucial for facilitating offshore wind farm development.
This significant step indicates the UK Government’s resolve to secure sovereignty of critical rare earth sourcing to
advance the EV manufacture industry locally.
Post award of the grant, Ionic Technologies established a new technical centre in Belfast (see Figure 7) and
continued to add capability to the team, building out capacity.
18
Figure 7: Ionic Technologies new facility located at the Titanic Quarter, Belfast, UK.
The demonstration plant, supported by successful pilot plant campaigns, has progressed through late 2022 and
the first half of 2023, culminating in the maiden production of high-grade magnet REOs announced in June 2023.
The high purity production, achieved through the process commissioning run was made up of:
•
•
4.2 kg of Nd2O3 grading 99.7%, and ~0.3% Dy2O3 (total REO content of 99.99%); and
0.6 kg of Dy2O3 grading 99.8 % (total REO content of 99.9%).
Following on from the conclusion of the financial year to 30 June 2023, production was approximately 40 kg of
Nd2O3 and 6 kg of Dy2O3.
Plans continue to progress rapidly the commercial the modular scale up potential of the technology and processes.
19
Ionic Rare Earths Limited Annual Report 2023 Our Path to Commercialisation
Rapid acceleration of our technology ready to scale globally
Lab scale
Pilot scale
Demo scale
Commercial scale
2016 – 2021
2021 – June 2023
June 2023 – June 2024
Studies underway
30 tonnes NdFeB
magnets > 10 tonnes
separated magnet
REOs
600mt NdFeB magnet
recycling plant > 200mt
of REE oxides
Modular scale up
potential
Figure 8: Ionic Technologies path to production.
About Ionic Technologies
Ionic Technologies has developed separation
and refining technology that can be applied to
the recycling and refining of individual magnet
rare earths from used permanent (NdFeB) magnets.
Our hydrometallurgical process is able to deliver
high purity separated magnet rare earth oxides
no matter the quality and variability in
composition of magnet feedstock.
Ionic Technologies is 100% owned by Australian
rare earth resources company Ionic Rare Earths
Limited (ASX: IXR).
Intake flexibility
Unlike other recycling processes, our technology
can recycle any form of mixed waste magnets
and production swarf regardless of type, age or
coatings. We are not reliant on a single
feedstock stream.
Figure 9: Ionic Technologies technology overview.
20
Magnet crushing / grinding
Digestion
Separate base metals
(Fe, Mn, Al, Ni, Cu, B)
Nd, Pr, Dy, Tb
Solvent separation
(15 stages)
Individual oxides
precipitation
This leading-edge technology will enable countries all around the world to establish new domestic supplies via
recycling end-of-life magnet and rare earth products, developing secure, sustainable, and traceable supply chains,
providing them the confidence to set even more ambitious climate targets, creating a better world for everyone.
ESG & Social License to Operate
Ethical business practices and a bold corporate vision to create technologies, advancements in innovation and
strategic collaborations to accelerate electrification to reduce the impacts of climate on the planet require Ionic
Rare Earths to focus on understanding material and non-material financial risks, opportunities and the impact of
climate change will have on business practices and activities.
The initial steps to establish an ESG reporting pathway began with the completion of Company’s first Digbee ESG™
submission on Makuutu announced October 2022. The overall ESG award of BB is averaged with a range of C to
AA. This means on average BB scores are achieved, however, Ionic Rare Earths acknowledges that there is the
potential to reflect C or AA depending on action or inaction taken to manage ESG risks and opportunities.
Figure 10: Makuutu maiden ESG rating provide by Digbee ESG™.
In October 2022, Ionic Rare Earths was accepted as a participant of the United Nations Global Compact. The
UN Global Compact is the world's largest corporate sustainability initiative with a mission to mobilise a global
movement of sustainable companies to create a better world.
Driven by the realisation that all companies play a crucial part in enforcing human rights, using innovation to
solve complex challenges whilst building a more sustainable world. Ionic Rare Earths’ decision to consolidate
Environmental, Social and Governance transparency, and to act on the United Nations “Agenda 2030”, Ionic Rare
Earths will now begin to report on progress of the United Nations Sustainable Development Goals (SDGs).
The Communication of Progress (CoP) is a voluntary action plan used by UN Global Compact participants
to address an organisations impact on the prosperity of all people and our planet. This is one of the many
programs of reporting and assurance that the Company is undertaking with respect to climate and environmental
responsibility, social license to operate, business innovation and ethical governance practices.
In the new financial year Ionic Rare Earth plans to report on all ESG pillars, demonstrating a high commitment
to reporting and assurance processes. This is in line with the Company’s focus – to become a global circular
economy participant in magnet and heavy metal rare earths.
As the Company’s projects mature in Uganda and in the UK, along with developments with refining partners,
the focus is to articulate the ESG strategy and reporting pathway based on newly announced Commonwealth
legislation, and international climate and nature taxonomies such as Sustainability Accounting Standards Board
(SASB) and Task Force on Climate-related Financial Disclosures (TCFD).
21
Ionic Rare Earths Limited Annual Report 2023 Building corporate capability to meet company strategy and global market needs.
Building an outstanding team with the right expertise across Ionic Rare Earths’ businesses to deliver on strategic
outcomes was a key focus as major milestones were met in the year to 30 June 2023.
Ionic Rare Earths commitment to deliver one of the most strategically impactful magnet and heavy rare earths
projects outside of China with the Makuutu product focused on suppling critical supply chains to European, north
Asia and US partners. With both subsidiaries, RRM and Ionic Technologies, advancing production capabilities, so
too was the need for strong leadership to drive future success.
Specific to the Makuutu Rare Earths Project, advanced African mining experience was recognised as a key driver
of future success. In June 2023, the Company appointed experienced African mining executive, Dr Tommie van der
Walt, to the position of Chief Operating Officer to accelerate growth at Makuutu. Dr van der Walt’s proven track-
record and deep understanding in African project development and impeccable leadership skills developed over 20
years on the continent. At EMR Capital, he lead the Lubambe Copper Project in Zambia and prior to that was the
Newmont Regional Project Director of Africa where he delivered the US$2 billion Ahafo mega-project in Ghana.
With a significant increase in the inbound enquiry from European supply chain and government stakeholders
through the later stages of 2022, the Company appointed Mr Lee Constable to the role of Vice President – EU &
UK in December 2022. With over 25 years’ experience across a wide range of manufacturing and process related
industries, including site operations in value addition of rare earths containing compounds, Mr Constable has been
tasked to drive supply chain stakeholder engagement and interface with government bodies across this region
those key markets.
Throughout the last financial year, Ionic Technologies’ workforce has grown significantly in Belfast and the
Company progressed towards demonstration production of its leading magnet recycling technology and
through sustainable values and product stewardship in Northern Ireland. Careers spanning business strategy,
management, administration, engineering, and chemistry have been added to Ionic Technologies head count
increase. In January 2023, Mr Thomas Kelly was appointed as General Manager – Operations, with the key task
of driving the development of the magnet recycling demonstration plant and technical centre established in
Belfast, UK. Mr Kelly has 15 years’ experience in industry, a proven track in process engineering and operations
management roles across Europe, including the role of Operations Manager of the two largest potable water
production facilities in Northern Ireland. In November 2022, Ms Neruja Srikantharajah was appointed as
Engineering Manager with over 10 years’ experience in process engineering design and systems across the
nuclear and defence industries with Rolls Royce Civil Nuclear and Sellafield in the UK.
As strategic partnerships and collaborations progress, both RRM and Ionic Technologies accelerate in growth
towards their production potential, so too the need to increase capability at the highest level.
In Q2 2023, Ionic Rare Earths moved to strengthen the Board across both capital markets and supply chain
engagement. In May 2023, Mr Sufian Ahmad was appointed to the Board in the role of Non-Executive Director.
Mr Ahmad also is the founder of Sixty Two Capital, an advisory firm specialising in the growth and funding of
emerging ASX companies. Mr Ahmad brings strong legal, business and marketing expertise to the board with over
10 years’ experience in the resource sector in the provision of corporate advisory services.
In June 2023 Mr Nitin Tyagi was appointed to the role of Non-Executive Director. Mr Tyagi is currently VP of supply
chain at One Next Energy (ONE). ONE is a battery company based in Novi, Michigan, where Mr Tyagi has firsthand
experience of off-taker objectives and demand growth in the EU, North Asia and the US. As Non-Executive Director
22
for Ionic Rare Earths, Mr Tyagi’s focus will be to optimise supply chain engagement, specifically focusing on
relationships in the United States and European Union, with an initial key area being the electric vehicle market.
Ionic Rare Earths’ strategic vision will provide future consumers with supply chain security – ensuring
potential access to traceable magnet and heavy rare earths to support advanced manufacturing of
components for the energy transition thematic, communications technologies and military and defence
requirements for sovereign capability sourced from environmentally friendly and sustainably mined, refined,
and recycled technological innovations.
This is how Ionic Rare Earths is working to create value, reduce the impacts of climate change and empower
the energy transition and advanced manufacturing across the new economy.
Good Governance – Caring for the environment, people and prosperity of the planet!
The mining sector can demonstrate through affirmative action that the challenges that are posed with climate
change can be addressed with science-based data collection through of Environment, Social and Governance
(ESG) reporting.
In the new financial year Ionic Rare Earths will report on all ESG pillars which will demonstrate setting high
standards in reporting and assurance processes. Our focus is to become a global circular economy participant
in magnet and heavy metal rare earths. This requires strong pillars in ESG reporting and operations. As our
project at Makuutu matures along with our refining and recycling technologies, Ionic Rare Earths will prepare
science based Environmental, Social Governance reports which follow globally accepted frameworks.
Operating Results
The Groups loss for the year was $6,776,668 (2022: $4,644,087). Government grants and R&D tax rebates
were significant at $2,761,222 (2022: $220,432). Salaries, wages and consulting fee-based payments of
$4,093,744 (2022: $1,403,526) were incurred reflecting the significant increased activity across the Group.
Share based payments of $340,673 (2022: $1,506,993) were also incurred.
Operating income
Operating loss
Year in Review
Review of Financial Position
2023
$
2022
$
3,028,300
224,450
(8,538,562)
(4,644,087)
During the year, the Group raised $1,260,000 through the exercise of 70,000,000 share options. Cash at bank at
30 June stood at $11,116,649 (2022: $26,759,731).
Given the strong cash position the directors believe that at the date of this report the Group has a sound capital
structure and is in a position to progress the planned exploration on the Company’s mineral properties.
23
Ionic Rare Earths Limited Annual Report 2023 Likely Developments and Expected Results of Operations
Ionic Rare Earths will continue to advance the Makuutu Rare Earth Project with the aim of completing
construction of a demonstration plant that will assist in providing further information to enable the Company to
move to a decision to mine.
In addition, it will progress its downstream operations through the magnet recycling path to commercialisation
through the demonstration plant, feasibility studies and supply chain collaboration being undertaken by Ionic
Technologies International Limited.
Indemnification and Insurance of Directors and Officers
During or since the financial year, the company has paid premiums in respect of a contract insuring all the
directors of Ionic Rare Earths Limited against legal costs incurred in defending proceedings for conduct involving:
a. a wilful breach of duty; or
b. a contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of the
Corporations Act 2001.
The total amount of insurance contract premiums paid was $49,950 (2022: $36,925).
Environmental Regulation and Performance
The company is subject to significant environmental regulation in respect of its exploration activities.
It aims to ensure the appropriate standard of environmental care is achieved and in so doing, is aware
of all relevant environmental legislation. The directors of the company are not aware of any breach of
environmental legislation for the year under review. The directors have considered compliance with the
National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse
gas emissions and energy use. The directors have assessed that the Company has no current reporting
requirements but may be required to report in the future.
Proceedings on Behalf of Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings. The Company was not a party to or intervened in any
proceedings during the year.
24
Producing all the
magnet REOs to
drive a net zero
carbon future
25
Ionic Rare Earths Limited Annual Report 2023 Remuneration Report (Audited)
This remuneration report outlines the director and executive remuneration arrangements of the Company and the
Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes
of this report, key management personnel (KMP) of the Group 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 executive or otherwise) of the parent company.
For the purposes of this report, the term ‘executive’ encompasses the chief executive and secretaries of the Parent
and the Group.
Details of key management personnel during the whole or part of the financial year
T B Benson
T J Harrison
J Kelley
Non-Executive Chairman (appointed 31 August 2020, resigned 30 June 2023)
Managing Director (appointed 21 December 2020)
Executive Director (appointed 7 July 2021, resigned 3 March 2023)
M McGarvie
Non-Executive Director (appointed 16 July 2021)
S Ahmad
Non-Executive Director (appointed 10 May 2023)
B D Dickson
Company Secretary – (resigned as a director 21 December 2020)
Remuneration philosophy
The Board of Directors is responsible for determining and reviewing compensation arrangements for the directors.
The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic
basis by reference to relevant employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high-quality board and executive team. Such officers are given the
opportunity to receive their base emolument in a variety of forms including cash and other non-cash payments. It
is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the
company.
To assist in achieving these objectives, the Board links the nature and amount of executive directors’ and officers’
emoluments on an annual basis based on individual performance and market conditions.
In the event of serious misconduct or a material misstatement in the Group’s financial statements, the Board
can reduce, cancel or defer performance-based remuneration and may also claw back performance-based
remuneration paid in previous financial years.
Remuneration consultants were not engaged during the year.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive director and executive
remuneration is separate and distinct.
26
Compensation of Directors and Executive Officer
i. Compensation Policy
The Board of Directors of Ionic Rare Earths Limited is responsible for determining and reviewing compensation
arrangements for the directors and the Chief Executive Officer.
ii. Non-Executive Director Compensation
Objective
The Board seeks to set aggregate compensation at a level that provides the company with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive directors
shall be determined from time to time by a general meeting. An amount not exceeding the amount determined
is then divided between the directors as agreed and reviewed annually. The latest determination was in 2011
when shareholders approved an aggregate remuneration of $400,000 per year. The Board may consider advice
from external consultants as well as the fees paid to non-executive directors of comparable companies when
undertaking the annual review process. No consultants were used during the year.
Non-executive directors have long been encouraged by the Board to hold shares in the company (purchased by the
director on market). It is considered good governance for directors to have an equity interest in the company on
which board they sit.
iii. Executive Compensation
Objective
The entity aims to reward executives with a level and mix of compensation commensurate with their position and
responsibilities within the entity so as to:
•
•
align the interests of executives with those of shareholders; and
ensure total compensation is competitive by market standards.
Structure
The Board periodically assesses the appropriateness of the nature and amount of emoluments of such officers
on a periodic basis by reference to relevant employment market conditions with overall objective of ensuring
maximum stakeholder benefit from the retention of a high quality board and executive team. Such officers are
given the opportunity to receive their base emolument in a variety of forms including cash and other non-cash
benefits. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue
cost for the company.
27
Ionic Rare Earths Limited Annual Report 2023 iv. Fixed Compensation
Objective
Fixed compensation is reviewed annually by the Board. The process consists of a review of individual
performance, relevant comparative compensation in the market and internally and, where appropriate,
external advice on policies and practices.
Structure
Executives are given the opportunity to receive their fixed remuneration in a variety of forms including
cash and other non-cash benefits.
v. Variable Compensation
Objective
The objective is to link the achievement of the company’s targets with the compensation received by the
executives charged with meeting those targets.
Currently, the company does not restrict executives from entering into arrangements to protect the value
of unvested Long-Term Incentives. However, under the Securities Dealing Policy, members of the Board
are required to advise the Company Secretary of any shareholdings including any hedging arrangements.
Share-based compensation
Options or shares may be issued to directors and executives as part of their remuneration. The options
or shares are not issued based on performance criteria but are issued to the directors and executives of
Ionic Rare Earths Limited to increase goal congruence between executives, directors and shareholders.
During the year no options (2022: 23,000,000) were issued to key management personnel, details of the
options are set out elsewhere in this report. No shares were issued during 2023 (2022: nil) in lieu of cash
directors’ fee, however 3,500,000 shares were issued as a termination payment (2022: 3,500,000 issued
as a sign on incentive) and No shares were issued as a result of performance shares meeting its vesting
conditions (2022: 3,300,000), details of the shares and options issued are set out elsewhere in this report.
Structure
Actual payments granted to each KMP are determined by the Board who meet periodically to assess the
achievements of the company’s targets. There are currently no targets established.
28
Employment contracts
Remuneration and other terms of employment for the following KMP are formalised in service
agreements, the terms of which are set out below:
Mr T J Harrison, Managing Director:
•
•
•
Term of agreement – to 31 December 2024.
Fixed consulting fee of $35,000 per month
Termination by either party with six months’ notice.
Mr B D Dickson, Company Secretary:
•
•
Term of agreement – to 31 December 2024.
Fixed consulting fee of $16,500 per month from 1 January 2023 (previously $12,500 per months)
• Payment of termination benefit on early termination by the employer, other than for gross
misconduct, includes an amount equal to the amounts due for the balance of the term of the contract
from the date of termination or the equivalent of 6 months remuneration whichever is the greater.
29
Ionic Rare Earths Limited Annual Report 2023 Compensation of Key Management Personnel (Consolidated and Parent)
Compensation of each director and the executive officer of the parent and group are as follows:
Short term
Post-
employment
Share based
payments4
Total
Total
options
related
Salaries and
fees
Non-
Monetary
Benefit1
Super-
annuation
30 June 2023
$
$
$
$
$
$
Directors
T Benson5
T Harrison
J Kelley4
M McGarvie
S Ahmad6
B Dickson
Total
248,000
390,000
680,4632
50,000
–
174,000
11,684
11,684
7,843
11,684
1,633
–
26,040
–
–
5,249
–
–
–
–
55,1083
–
–
–
285,724
401,684
743,414
66,933
1,633
174,000
–
–
55,108
–
–
–
1,542,463
44,528
31,289
55,108
1,673,388
55,108
Short term
Post-
employment
Share based
payments
Total
Total
options
related
Salaries and
fees
Non-
Monetary
Benefit1
Super-
annuation
30 June 2022
$
$
$
$
$
$
Directors
T Benson
T Harrison
J Kelley
M McGarvie
B Dickson
Total
248,000
360,000
201,771
59,000
150,000
9,366
9,366
9,212
8,981
–
24,800
–
–
142,350
348,764
190,2497
5,000
85,410
424,516
718,130
401,232
158,391
–
142,350
292,350
1,018,771
36,925
29,800
909,123
1,994,619
142,350
284,700
–
85,410
142,350
654,810
1. The Non-Monetary Benefit relates to the Directors’ Indemnity Insurance.
2.
Includes $500,000 termination payment.
3. Relates to the issue of 3,500,000 shares as a termination payment.
4. Resigned 3 March 2023.
5. Resigned 30 June 2023.
6. Appointed 10 May 2023.
7. Relates to the issue of 3,500,000 shares as a sign on incentive.
30
Compensation Options: Granted and Vested during the year.
No compensation options were granted during the year (2022: 23,000,000).
There were no alterations to the terms and conditions of options granted as remuneration since their grant date.
During the financial year 35,000,000 Compensation options were exercised (2022: 10,000,000); No Compensation
Options were forfeited (2022: Nil).
Performance Rights: Granted and Vested during the year.
No Performance Rights were issued or vested during the year
The Company’s remuneration policy prohibits directors and executives from entering into transactions or
arrangements which limit the economic risk of participating in unvested entitlements.
Apart from the issue of options and performance rights the company currently has no other performance-based
remuneration component built into director and executive remuneration (2022: Nil).
Performance Rights held by Key Management Personnel
2023
Specified Directors
T Benson
T Harrison
J Kelley
M McGarvie
B Dickson
Total
Balance
1 July 2022
Granted
Lapsed
Vested
Sold
–
6,700,000
3,500,000
–
–
–
–
–
–
– (3,500,000)
–
–
–
–
10,200,000
– (3,500,000)
–
–
–
–
–
–
Balance
30 June 2023
–
–
–
–
–
–
–
6,700,000
–
–
–
6,700,000
Shareholdings of Key Management Personnel
2023
Specified Directors
T Benson
T Harrison
J Kelley
M McGarvie
S Ahmad
B Dickson
Total
Balance
1 July 20221
Purchased
On
Exercise of
Options
Share-
based
payment
Sold
Balance
30 June 20232
–
8,050,000
3,500,000
–
–
–
120,396,203
2,585,403
–
–
5,000,000
– 10,000,000
– 20,000,000
–
–
(5,637,500)
4,362,500
(8,050,000)
20,000,000
–
–
–
3,500,0003
–
–
–
–
–
–
–
7,000,000
–
122,981,606
5,000,000
131,946,203
2,585,403 35,000,000
3,500,000 (13,687,500)
159,344,106
31
Ionic Rare Earths Limited Annual Report 2023 Option Holdings of Key Management Personnel
2023
Specified Directors
T B Benson
T J Harrison
J Kelley
M McGarvie
S Ahmad
B D Dickson
Total
Balance at
beginning of
year
1 July 20221
25,000,000
50,000,000
–
3,000,000
12,500,000
20,000,000
110,500,000
Granted
Options
Exercised
Options
Lapsed
Balance at
end of year
30 June
20222
Vested at 30 June 2023
Vested &
Exercisable Unvested
–
–
–
–
–
–
–
(10,000,000)
(20,000,000)
–
–
–
(5,000,000)
(35,000,000)
–
–
–
–
–
–
–
15,000,000
15,000,000
30,000,000
30,000,000
–
–
3,000,000
3,000,000
12,500,000
12,500,000
15,000,000
15,000,000
75,500,000
75,500,000
–
–
–
–
–
–
–
1. Holdings as at 1 July 2022 or if appointed during the year, date of appointment
2. Holdings as at date of retirement or resignation as a director
3.
Issued as a termination payment
Other Transactions
The Company has entered into a sub-lease agreement on normal commercial terms with Azure Minerals
Limited, a company of which Mr Dickson is Company Secretary. During the year, the Company paid sub-
lease fees totalling $9,000 (2022: $12,721). The sub-lease agreement was terminated on 31 March 2023.
Amounts due and unpaid at 30 June 2023 to Key Management Personnel include consulting fees of
$16,500 (2022:$65,866).
32
Company’s Performance
Company’s share price performance
The Company’s share price performance shown in the below graph for the year ended 30 June 2023 and is a
reflection of the Company’s performance during the year.
The variable component of the executives’ remuneration, which at this stage only includes share options, is
indirectly linked to the Company’s share price performance.
IXR's Share Price
$
D
U
A
e
c
i
r
P
e
r
a
h
S
0.06
0.04
0.02
0.00
Loss per share
1.07.22 1.08.22 1.09.22 1.10.22
1.11.22
1.12.22
1.01.23 1.02.23 1.03.23 1.04.23 1.05.23 1.06.23
Below is information on the Company’s loss per share for the previous four financial years and for the current
year ended 30 June 2023.
Basic loss per share (cents)
2023
(0.22)
2022
(0.13)
2021
(0.08)
2020
(0.07)
2019
(0.06)
Voting and comments made at the company’s 2022 Annual General Meeting
Ionic Rare Earths received a 95.75% “yes” vote on its remuneration report for the 2022 financial year. The
company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
End of Remuneration Report (Audited)
33
Ionic Rare Earths Limited Annual Report 2023
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the directors of
the company support and have adhered to the principles of corporate governance. The company’s corporate
governance statement is contained in the additional Australian Securities Exchange information section of
this annual report.
Risks
Ionic Rare Earths operates in an industry with unique challenges and risks that can impact its operations,
financial health, and long-term sustainability as set out below.
A significant risk for the Group is the volatility of rare earth metal prices. The prices of rare earth elements
are subject to global supply and demand dynamics, geopolitical factors, and macroeconomic conditions.
A change in rare earth prices can significantly impact the company's prospects. In addition, rare earths are
geopolitically sensitive due to their strategic importance in various high-tech industries, including defence
and renewable energy. Any changes in export restrictions, tariffs, or trade disputes between countries can
disrupt the supply chain and affect Ionic Rare Earths Limited's ability to access critical markets.
The company's success depends on its ability to develop Makuutu as an economically viable rare earth mine.
Geological uncertainties can pose risks. Mining and processing rare earths involve complex operations. The
Group will require robust risk mitigation strategies in place to address operational challenges.
The Group will require capital for exploration and development activities. Relying on debt or equity financing
can expose it to risks related to interest rates, market sentiment, and credit availability.
Ionic Technology success is closely tied to the development and commercialisation of its patented rare earth
separation and processing technologies. Staying at the forefront of technological advancements is essential.
Rare earth processing techniques are highly specialised and constantly evolving. Staying up-to-date with the
latest technologies is crucial to remain competitive.
34
Non Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit
duties where the auditor’s expertise and experience with the company and/or the Group are important.
Details of the amount paid or payable to the auditor (BDO Audit (WA) Pty Ltd) for audit during the year
are set out below. There were no non-audit services during this or the previous year.
During the year the following fees were paid or payable for services provided by the auditor of the
parent entity and its related practices.
1. Audit Services
BDO Audit (WA) Pty Ltd
Consolidated
2023
$
2023
$
Audit and review of financial reports
71,628
52,557
Auditor’s Independence Declaration
We have obtained an independence declaration from our auditors, BDO Audit (WA) Pty Ltd, as presented
on page 39 of this Annual Report.
Share Options
At the date of this report, there were 150,000,000 (2022: 199,000,000) share options outstanding.
Balance at the beginning of the year
Share option movements during the year
Issued
Lapsed/
Exercised
Total
number of
Options
199,000,000
Exercisable at 6.4 cents, on or before 30 Nov ’24
33,000,000
(2,000,000)
31,000,000
Exercisable at 1.8 cents, on or before 30 Nov ‘22
Exercisable at 0.75 cents, on or before 31 July ‘21
– (80,000,000)
(80,000,000)
–
–
–
Total options issued and exercised in the year to 30 June 2023
33,000,000
(82,000,000)
(49,000,000)
Total
150,000,000
35
Ionic Rare Earths Limited Annual Report 2023 The balance is comprised the following:
Date Granted
Expiry Date
Exercise Price (cents)
Number of Options
3 December 2020
30 November 2023
24 February 2021
28 February 2024
1 February 2021
28 February 2024
9 December 2021
30 November 2024
17 December 2021
30 November 2024
3 February 2023
30 November 2024
2.15
6.0
6.0
6.4
6.4
6.4
Total number of options outstanding at the date of this report
40,000,000
25,000,000
10,000,000
6,000,000
36,000,000
33,000,000
150,000,000
No person entitled to exercise any option referred to above has or had, by virtue of the option, a right to
participate in any share issue of any other body corporate.
During the financial year 70,000,000 options exercisable at $0.018 were exercised. Since the end of the
financial year 10,000,000 options exercisable at $0.0215 have been exercised.
Events After Reporting Date
No matter or circumstance has arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the group, the results of those operations, or the state of affairs of the
group in future financial years.
Signed in accordance with a resolution of the directors,
T Harrison
Managing Director
Melbourne, 29 September 2023
36
Makuutu Rare
Earths Project
Indpendently
Assessed by
37
Ionic Rare Earths Limited Annual Report 2023 Directors’ Declaration
In accordance with a resolution of the directors of Ionic Rare Earths Limited, I state that:
1.
In the opinion of the directors:
a.
the financial statements, notes and additional disclosures included in the directors’ report designated as
audited, of the consolidated entity are in accordance with the Corporations Act 2001, including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2023 and of their
performance for the year ended on that date; and
ii. complying with Australian Accounting Standards which, as stated in accounting policy Note 2 to the
Financial Statements, constitutes explicit and unreserved compliance with International Financial
Reporting Standards (IFRS), the Corporations Regulations 2001 and other mandatory professional
reporting requirements.
b. subject to achievement of the matters as set out in Note 2(a), there are reasonable grounds to believe that
the company will be able to pay its debts as and when they become due and payable.
2. This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ending 30 June 2023.
On behalf of the Board
T Harrison
Managing Director
Melbourne, 29 September 2023
38
Auditors Declaration
of Independence
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF IONIC RARE EARTHS
LIMITED
As lead auditor of Ionic Rare Earths Limited for the year ended 30 June 2023, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Ionic Rare Earths Limited and the entities it controlled during the
period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth
29 September 2023
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liabil ity
limited by a scheme approved under Professional Standards Legislation.
39
Ionic Rare Earths Limited Annual Report 2023
Consolidated Statement of Profit
or Loss and Other Comprehensive
Income For Year Ended 30 June 2023
Other income
Interest received
Government grants
Other income
Expenses
Depreciation
Amortisation
Interest expense
Consultants
Directors’ fees (excluding executives)
Executives’ salaries, wages and consulting fees
Legal fees
Travel and accommodation
Administration expenses
Insurance
Promotion
Exploration expense
Share based payments
Foreign exchange loss
Research & development
Loss from continuing operations before income tax
Income tax credit/(expense)
Loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences
Other comprehensive income net of tax
Total comprehensive loss for the year, net of tax
Consolidated
2023
$
2022
$
Notes
267,078
3(a)
1,922,348
4,018
-
838,874
220,432
(286,657)
(289,153)
(1,804)
(31,956)
(28,699)
(2,733)
(643,866)
(63,852)
3(b)
3(b)
(1,093,963)
(358,771)
(2,355,915)
(980,903)
(338,950)
(358,434)
(680,401)
(218,856)
3(c)
(1,999,751)
(740,282)
(127,132)
(60,113)
(685,519)
(439,403)
(1,947,533)
–
21
(340,673)
(1,506,993)
(1,261)
–
(774,184)
(77,542)
(8,538,462)
(4,644,087)
4
–
–
(8,538,462)
(4,644,087)
2,230,902
2,230,902
(4,600)
(4,600)
(6,307,560)
(4,648,687)
Total Loss per share for loss attributable to the ordinary equity holders
Basic loss per share (cents)
Diluted loss per share (cents)
15
15
(0.22)
(0.22)
(0.13)
(0.13)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
40
Consolidated Statement
of Financial Position As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
13
11,116,649
26,759,731
Consolidated
2023
$
2022
$
Notes
Receivables
Inventory
Other
Total current assets
Non-current assets
Right to use assets
Investments
Plant & equipment
Intangibles - Patents
Exploration & evaluation expenditure
Total non-current assets
Total assets
Liabilities
Current liabilities
Payables
Lease Liability
Total current liabilities
Non-Current liabilities
Deferred tax liability
Lease liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
1,102,795
531,096
793,810
224,471
-
65,351
13,237,725
27,356,178
6
7
8
9
8,970
35,886
21,926,992
3,932,173
2,295,746
253,872
5,429,587
5,077,796
1,624,481
12,314,681
31,285,776
21,614,408
44,523,501
48,970,586
817,541
7,319
613,705
27,645
824,860
641,350
–
–
–
31,890
7,318
39,208
824,860
680,558
43,698,641
48,290,028
11
12
78,332,559
76,957,059
11,482,080
8,910,505
(46,115,998)
(37,577,536)
43,698,641
48,290,028
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
41
Ionic Rare Earths Limited Annual Report 2023 Consolidated Statement of
Changes in Cash Flows For Year Ended 30 June 2023
Cash flows from operating activities
Payments to suppliers and employees
Payments for Inventory
Payment for exploration
Interest received
Interest expense
Consolidated
2023
$
2022
$
Notes
(9,181,935)
(3,476,618)
(793,810)
(1,947,533)
267,078
(1,804)
-
4,018
-
Net cash flows used in operating activities
13
(11,658,004)
(3,472,600)
Cash flows from investing activities
Receipt of government R&D rebate
Receipt of grants
Cash acquired on acquisition of subsidiary
Loss on foreign exchange
Payments for plant and equipment
Payment for investments
Payment for acquisition of subsidiary
Payments for patents
Payment for exploration capitalised
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of ordinary shares (net of transaction costs)
Repayment of office lease liability
Net cash flows from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rate changes on cash and cash equivalents
1,003,308
1,922,348
-
(1,261)
1,908
54,089
82,695
-
(2,328,476)
(79,412)
(5,855,318)
-
-
(1,592,572)
(251,510)
(104,658)
-
(8,963,221)
(5,510,909)
(10,601,171)
1,375,500
29,894,053
(27,644)
(109,534)
1,347,856
29,784,519
(15,821,057)
15,710,748
26,759,731
11,055,530
177,975
(6,547)
Cash and cash equivalents at the end of the financial year
13
11,116,649
26,759,731
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
42
Consolidated Statement
of Changes In Equity For Year Ended 30 June 2023
At 30 June 2023
78,332,559
136,403
9,313,061
2,032,616
(46,115,998) 43,698,641
Issued
Capital
Convertible
Notes
Reserve
Share
Option
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
76,957,059
136,403
8,972,388
(198,286)
(37,577,536)
48,290,028
-
-
-
-
-
-
-
-
-
340,673
-
(8,538,462)
(8,538,462)
2,230,902
-
2,230,902
2,230,902
(8,538,462)
(6,307,560)
-
-
-
-
1,375,500
340,673
43,393,406
136,403
7,678,995
(589,590)
(32,933,449)
17,685,765
-
(4,644,087)
(4,644,087)
(4,600)
-
(4,600)
(4,600)
(4,644,087)
(4,648,687)
-
-
-
-
-
-
(1,896)
1,295,289
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
395,904
-
-
-
-
-
-
31,968,600
(1,860,947)
3,456,000
(1,896)
1,295,289
395,904
At 1 July 2022
Loss for the year
Other comprehensive loss
Total comprehensive loss for
the year
-
-
-
Shares issued during the year
1,375,500
Share based payments
-
At 1 July 2021
Loss for the year
Other comprehensive loss
Total comprehensive loss for
the year
-
-
-
Shares issued during the year
31,968,600
Transaction costs
(1,860,947)
Share based transaction
costs
3,456,000
Vesting of performance rights
Share based payments
Foreign currency translation
-
-
-
At 30 June 2022
76,957,059
136,403
8,972,388
(198,286)
(37,577,536) 48,290,028
Changes in Equity should be read in conjunction with the accompanying notes.
43
Ionic Rare Earths Limited Annual Report 2023 Notes to the Consolidated
Financial Statements
For Year Ended 30 June 2023
1. Corporate Information
The Consolidated Financial report of Ionic Rare Earths Limited for the year ended 30 June 2023 was
authorised for issue in accordance with a resolution of the directors on 29 September 2023. The
consolidated financial statements and notes represent those of Ionic Rare Earths Limited and its
controlled entities (the “Group”). The consolidated entity’s functional and presentation currency is AUD
($). The separate financial statements of the parent entity, Ionic Rare Earths Limited, have not been
presented within this financial report as permitted by the Corporations Act 2001.
Ionic Rare Earths Limited is a company limited by shares incorporated in Australia whose shares are
publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’ Report.
2. Summary of Significant Accounting Policies
a. Basis of Preparation
The Financial report is a general-purpose Financial report, which has been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards, Australian Accounting
Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board. The
Financial report has also been prepared on an accruals basis. The Group is a for-profit entity for the purpose
of preparing the financial statements.
Australian Accounting Standards set out accounting policies that the AASB has concluded that would result
in a financial report containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial reports and notes also comply
with International Financial Reporting Standards.
Going Concern
This report has been prepared on the going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and settlement of liabilities in the normal course of business.
The Company incurred a loss after tax of $8,538,462 (2022: $4,644,087) for the year ended 30 June 2023 and
experienced net cash outflows from operating activities of $11,658,004 (2022: $3,472,600).
The ability of the group to continue as a going concern is dependent on the Group being able to raise
additional funds as required to meet ongoing and budgeted exploration commitments and for working capital.
These conditions indicate a material uncertainty that may cast significant doubt about the Group’s ability to
continue as a going concern and, therefore, it may be unable to realise its assets and discharge its liabilities
in the normal course of business. The Directors believe that they will be able to raise additional capital as
required and are in the process of evaluating the Group’s cash requirements. The Directors believe that the
Group will continue as a going concern.
44
As a result, the financial report has been prepared on a going concern basis. However, should the Group be
unsuccessful in undertaking additional raisings, the Group may not be able to continue as a going concern.
No adjustments have been made relating to the recoverability and classification of liabilities that might be
necessary should the Group not continue as a going concern.
Should the going concern basis not be appropriate, the entity may have to realise its assets and extinguish
its liabilities other than in the ordinary course of business and at amounts different from those stated in the
financial report. No allowance for such circumstances has been made in the financial report.
b. Adoption of new and amended accounting standards
The Company has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting
year. There has been no material impact on the financial statements by their adoption.
A number of other standards, amendments to standards and interpretations issued by the AASB which are not
materially applicable to the Group have not been applied in preparing these consolidated financial statements.
c. Basis of consolidation
The parent entity and its subsidiaries are collectively referred to as the "Group". The parent of this Group is
Ionic Rare Earths Limited. Entities (including structured entities) over which the parent (or the Group) directly
or indirectly exercises control are called “subsidiaries". The consolidated financial statements incorporate the
assets, liabilities and results of all subsidiaries. The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. A list of the Group's subsidiaries is provided in Note 10.
The assets, liabilities and results of subsidiaries are fully consolidated into the financial statements of
the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or
losses on transactions between group companies are fully eliminated on consolidation. Accounting policies
of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are referred to as 'non-
controlling interests'. The Group recognises any non-controlling interests in subsidiaries on a case-by-case
basis either at fair value or at the non-controlling interests' proportionate share of the subsidiary’s net assets.
Non-controlling interests are shown separately within the equity section of the statement of financial position
and statement of profit or loss and other comprehensive income.
45
Ionic Rare Earths Limited Annual Report 2023 d. Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions
of future events. The key estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting year are:
Fair value of assets acquired
Fair value of the intangible assets acquired has been determined using the market approach based on the
purchase price of the acquisition of Seren Technologies. Management deem the purchase price to be the most
accurate representation of the fair value of the assets purchased on acquisition date.
Milestone 1 and 2 payments were deemed to have nil value as management have determined these payments to
be contingent liabilities as it is not probable at this stage that the performance obligations will be met.
Treatment of expenditure on the Makuutu project
Management have applied judgement in the treatment of expenditure incurred on the Makuutu Project in
Uganda. (see further details on the acquisition in Note 6).
Expenditure incurred in order to acquire the project has been capitalised as an initial cost of an investment in
associate (being Rwenzori Rare Metals Limited (‘RMM”)) which represents the group’s 60% interest in RML
which the group has significant influence over. In addition, exploration expenditure incurred during the year to
increase the group’s interest to 60% has been capitalised as a further investment in RMM and to exploration and
evaluation expenditure. Management have determined that they have significant influence as they do not have
control over the management direction and control over the activities and operations of the Makuutu project.
The group assesses whether there is objective evidence that the investment in associate is impaired by reference
to the underlying project held by RMM which is in exploration stage. Management have in accordance with AASB
6: Exploration and Evaluation of Mineral Assets, performed a review of impairment indicators on the investment
in associate which included the review of the rights to tenure and future planned expenditure.
During the earn in period contributed expenditure incurred is deemed to be capitalised exploration and evaluation
expenditure, as opposed to contributions towards the associate. Once an earn in milestone has been met,
expenditure is transferred from capitalised exploration and evaluation expenditure to Investment in Associate.
Share based payments
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value is determined using the binominal or
implied barrier formula. For options issued in this financial year, the assumptions detailed as per Note 21 were
used.
46
Exploration and evaluation costs
Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs
(including costs such as the earn-in payments relating to the Makuutu project) which are carried forward where
right of tenure of the area of interest is current and are expected to be recouped through sale or successful
development and exploitation of the area of interest or, where exploration and evaluation activities in the area
of interest have not reached a stage that permits reasonable assessment of the existence of economically
recoverable reserves. The future recoverability of exploration and evaluation expenditure is dependent on a
number of factors, including whether the Group decides to exploit the related lease itself, or, if not, whether it
successfully recovers the related exploration and evaluation assets through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future
technological changes, which could impact the cost of mining, future legal changes (including changes to
environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, profits and net assets will be reduced in the year in which this determination is made.
e. Investments in Associates
Associates
Associates are all entities over which the Group has significant influence but not control or joint control. This
is generally the case where the Group holds between 20% and 50% of the voting rights or in other cases with
greater than 50% where control has still not been obtained due to the lack of control over the relevant activities.
Investments in associates are accounted for by using the equity method of accounting after being initially
recognised at cost.
Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter
to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the
Group’s share of movements in other comprehensive income of the investee in other comprehensive income.
Dividends received or receivable from associates and joint ventures are recognised as a reduction in the
carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity,
including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the
47
Ionic Rare Earths Limited Annual Report 2023 extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted
investees have been changed where necessary to ensure consistency with the policies adopted by the Group.
The carrying amount of equity-accounted investments is tested for impairment each reporting period.
f. Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at the bank and short-term
deposits with an original maturity of three months or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value.
g. Other receivables
Other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less an allowance for impairment.
h. Foreign currency translation
Both the functional and presentation currency of Ionic Rare Earths Limited and its Australian subsidiaries is
Australian dollars (A$).
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated
at the rate of exchange ruling at the end of the reporting period. Non-monetary items measured at historical
cost continue to be carried at the exchange rate at the date of the transaction.
All resulting exchange differences in the consolidated financial statements are taken to the statement of profit
or loss and other comprehensive income.
Group companies
The financial results and position of foreign operations, whose functional currency is different from the Group’s
presentation currency, are translated as follows:
• Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
•
Income and expenses are translated at average exchange rates for the year; and
• Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than
Australian dollars are recognised in other comprehensive income and included in the foreign currency
translation reserve in the statement of financial position. These differences are recognised in profit or loss in
the year in which the operation is disposed.
48
i. Income tax
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be
recovered from or paid to the taxation authorities based on the current year's taxable income. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted by the end of the reporting
year.
Deferred income tax is provided on all temporary differences at the end of the reporting year between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable
that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable
that the temporary difference will reverse in the foreseeable future and taxable profit will be available against
which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each end of the reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each end of the reporting period and are recognised to
the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the end of the reporting period.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
49
Ionic Rare Earths Limited Annual Report 2023 Tax consolidation legislation
Ionic Rare Earths Limited and its wholly owned Australian controlled entities have implemented the tax
consolidation legislation as of 1 July 2003.
The head entity, Ionic Rare Earths Limited and the controlled entities in the tax consolidated group continue to
account for their own current and deferred tax amounts. The Group has applied the group allocation approach
in determining the appropriate amount of current taxes and deferred taxes to allocate to members of the tax
consolidated group.
j. Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
•
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation
authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
k. Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services.
l. Share-based payment transactions
The Group provides benefits to directors, employees and consultants of the Group (with shareholders’
approval) in the form of share-based payment transactions, whereby directors, employees and consultants
render services in exchange for options over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the
date at which they are granted. The fair value is determined by an external valuer using a binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of Ionic Rare Earths Limited (‘market conditions’).
50
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the year in which the performance conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each end of the reporting period until
vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in
the opinion of the directors of the Group, will ultimately vest. This opinion is formed based on the best available
information at reporting date. No adjustment is made for the likelihood of market performance conditions being
met as the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional
upon a market condition. Where the terms of an equity-settled award are modified, as a minimum an expense is
recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the
value of the transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted
for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled
and new award are treated as if they were a modification of the original award, as described in the previous
paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
m. Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Effective 1 July 1998, the corporations legislation abolished the concepts of authorised capital and par value
shares. Accordingly, the company does not have authorised capital nor par value in respect of its issued capital.
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude
any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted
average number of ordinary shares, adjusted for any bonus element.
n. Earnings per share
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
•
other non-discretionary changes in revenues or expenses during the year that would result from the dilution
of potential ordinary shares:
•
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted
for any bonus element.
51
Ionic Rare Earths Limited Annual Report 2023 o. Comparative figures
When required by accounting standards comparative figures have been adjusted to conform to changes in the
presentation for the current financial year.
p. Exploration and development expenditure
Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs,
including costs such as the earn-in payments relating to the Makuutu project, which are carried forward
where right of tenure of the area of interest is current and they are expected to be recouped through sale or
successful development and exploitation of the area of interest or, where exploration and evaluation activities
in the area of interest have not reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves.
Where an area of interest is abandoned or the directors decide that it is not commercial, any accumulated
acquisition costs in respect of that area are written off in the financial year the decision is made. Each area of
interest is also reviewed at the end of each accounting year and accumulated costs written off to the extent
that they will not be recoverable in the future.
Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase
until production commences.
q. Intangible assets
Accounting policy
Patents, trademarks and licences
Trademarks, licences and patents acquired as part of an asset acquisition are recognised at the fair value
at acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated
amortisation and impairment losses.
Amortisation methods and useful lives
The group amortises intangible assets with a limited useful life using the straight-line method over the
following periods:
• Patents, trademarks and licences 20 years
52
r. Property, plant and equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment and Motor Vehicles
Plant and equipment and Motor vehicles are measured on the cost basis. The carrying amount is reviewed
annually by directors to ensure it is not in excess of the recoverable amount from these assets.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the
income statement during the financial year in which they are incurred.
Depreciation
Depreciation of plant and equipment is calculated on a reducing balance basis so as to write off the net costs of
each asset over the expected useful life. The rates vary between 20% and 50% per annum.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the income statement. When revalued assets are sold, it is group policy to transfer the amounts
included in other reserves in respect of those assets to retained earnings.
s. Inventory
Inventory is recognised at the lower of cost and net realisable value. Cost includes all costs directly attributable
to bringing the inventory to its present location and condition, including purchase costs, direct labour, and
applicable overheads. Net realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion, and costs necessary to make the sale.
The cost of inventory is determined using the First-In, First-Out (FIFO) method.
Inventory is assessed for impairment on a periodic basis. If the carrying amount of inventory exceeds its net
realisable value, the inventory is written down to its net realisable value.
53
Ionic Rare Earths Limited Annual Report 2023 t. Trade and Other Receivables
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest rate method.
Receivables are assessed for impairment at each reporting date. A provision for impairment is established
when there is objective evidence of impairment. The amount of the provision is the difference between the
asset's carrying amount and the present value of estimated future cash flows, discounted at the original
effective interest rate.
Receivables are derecognised when the rights to receive cash flows have expired or have been transferred,
and the entity has transferred substantially all the risks and rewards of ownership.
u. Financial Instruments
Financial instruments are classified into one of the following categories: financial assets at fair value through
profit or loss, loans and receivables, held-to-maturity investments, and financial liabilities at amortised cost.
Financial assets are initially recognised at fair value, and financial liabilities are recognised at the amount
received, net of transaction costs. Subsequent measurement depends on the category.
Financial assets are assessed for impairment at each reporting date. A provision for impairment is
recognised when there is a significant increase in credit risk since initial recognition.
v. Grant Income:
Grant income is recognised when there is reasonable assurance that the entity will comply with the
conditions attached to the grant and the grant income will be received.
Grant income is initially recognised at the fair value of the grant received or receivable. If the grant is
conditional, recognition is deferred until the conditions are met.
Grant income is presented as other income in the statement of comprehensive income.
Government grants are recognised in accordance with the specific requirements of accounting standards
applicable to government grants.
54
3. Income And Expenses
a. Government Grants
In September 2022 the Company’s 100% owned, Belfast based, subsidiary, Ionic Technologies International
Limited (IonicTech)) was awarded a grant of £1.72 million (approximately A$2.9 million) from the UK Government
Advanced Propulsion Centre (“APC”). The APC is a non-profit organisation that facilitates funding to UK based
research and development projects developing low-carbon emission powertrain technologies, funded by UK
Department for Business, Energy and Industrial Strategy (“BEIS”) and managed by Innovate UK. IonicTech applied
for the grant under the Innovate UK Automotive Transformation Fund Scale up Readiness Validation (“SuRV”)
program to develop a demonstration scale magnet recycling plant.
During the year $1,922,348 (£1,075,938) was received from the grant.
b. Profit/(loss) from continuing operations before income tax includes the following
specific expenses
2023
$
2022
$
Salaries & wages expenses
Operating lease rentals
Directors’ benefit expense (excluding executive directors)
c. Administration expenses
Office operating lease rentals
Office operating and maintenance
Accounting and tax services
ESG expenses
Conferences
Publications
Other
2,355,915
980,903
423,943
36,776
1,093,693
358,771
2023
$
2022
$
423,943
336,045
322,523
199,601
244,542
183,917
289,180
1,999,751
36,776
73,136
103,699
-
127,141
76,397
359,909
740,282
55
Ionic Rare Earths Limited Annual Report 2023
4. Income Tax
The major components of income tax expense are:
Statement of profit or loss and other comprehensive income
Current income tax benefit/(expense)
Deferred income tax benefit/(expense)
Income tax benefit/(expense) reported in the statement of profit or loss and
other comprehensive income
2023
$
2022
$
-
-
-
-
-
-
A reconciliation between tax expense and the product of accounting profit/(loss) before income tax multiplied by
the Group’s applicable income tax rate is as follows:
Accounting loss before income tax
At the Group’s statutory income tax rate of 25% (2022: 26%)
Less: Share options expenses during the year
Exploration expenditure
Government grants exempt from tax
Other expenditure not allowable for income tax purposes
Current year tax losses not brought to account
Income tax (benefit)/expense reported in the consolidated statement of profit or
loss and other comprehensive income
Deferred Income Tax
Deferred income tax at 30 June relates to the following:
Deferred tax liabilities
Prepayments
Total deferred tax liabilities
Deferred tax assets
Accrued expenses
Capital raising costs
Tax assets/losses recognised /(not brought to account)
Total deferred tax assets
(8,538,462)
(4,644,087)
(2,134,616)
(1,207,463)
85,168
391,818
486,883
-
(690,306)
(43,249)
95,529
77,581
(2,157,342)
(781,313)
2,157,342
781,313
-
-
(56,118)
(56,118)
(16,991)
(16,991)
5,000
43,042
8,076
56,118
5,200
45,304
(33,513)
16,991
Net deferred tax liabilities/(asset)
-
-
56
Other than to offset deferred tax liabilities the Group has not recognised tax losses arising in Australia of
$16,979,519 (2022: $15,299,605) that may be available for offset against future taxable profits of the companies in
which the losses arose. The potential benefit of carried forward losses will only be obtained if assessable income
is derived of a nature and, of an amount sufficient to enable the benefit from the deductions to be realised or the
benefit can be utilised by the Company provided that :
i.
the provisions of deductibility imposed by law are complied with;
ii.
the group satisfies the continuity of ownership test from the period the losses were incurred to the time they
are to be utilised; and
iii. no change in tax legislation adversely affect the realisation or the benefit from the deductions.
Tax Consolidation
Ionic Rare Earths Limited and its 100% owned Australian subsidiaries have formed a tax consolidated group.
Members of the group entered into a tax sharing arrangement in order to allocate the income tax expense to the
wholly owned subsidiaries on a pro-rata basis. The agreement provides for the allocation of income tax liabilities
should the head entity default on its tax payment obligations. At the reporting date, the possibility of default is
remote.
Tax effect accounting by members of the tax consolidated group
The allocation of taxes under the tax sharing and funding agreement is recognised as an increase/decrease in the
subsidiaries’ inter-company accounts with the tax consolidated group head company, Ionic Rare Earths Limited.
The group has applied the group allocation approach in determining the appropriate amount of current taxes to
allocate to members of the tax consolidated group.
57
Ionic Rare Earths Limited Annual Report 2023 5. Operating Segment
The Group has based its operating segment on the internal reports that are reviewed and used by the Board
of Directors (“Board”) (the chief operating decision makers) in assessing performance and in determining the
allocation of resources.
The Group does not have production and is only currently involved in exploration activities. As a consequence,
activities in the operating segment are identified by the Board based on the manner in which resources are
allocated and the nature of the resources provided.
Based on this criterion, the Board has determined that the Group has one operating segment, being exploration,
and the segment operations and results are the same as the Group’s results.
During the year the Company conducted its activities across three geographic locations, being Australia, Uganda
and United Kingdom (2022: Australia, Uganda and United Kingdom).
2023
Other income
Loss
Non-current assets
Total assets
Total liabilities
2022
Revenues
Loss
Non-current assets
Total assets
Total liabilities
Australia
$
U.K.
$
Uganda
$
Total
$
1,038,092
1,990,208
-
3,028,300
(4,388,402)
(2,202,527)
(1,947,533)
(8,538,462)
214,963
11,360,089
(225,175)
7,519,339
9,611,938
(599,685)
(4,482,931)
87,304
27,137,060
(627,325)
(161,156)
5,280,251
5,586,673
(53,223)
23,551,474
31,285,776
23,551,474
44,523,501
-
-
(824,860)
(4,644,087)
16,246,853
21,614,408
16,246,853
48,970,586
-
(680,548)
58
6. Investments
An amount of $21,926,992 has been presented in the financial statements as an Investment in Associates.
This represents amounts incurred to acquire an interest in Rwenzori Rare Metals Limited which holds 100%
of the Makuutu Rare Earth Elements project. Refer to note 20 for further information. This includes the
amounts set out below.
Subscription for initial 20% interest in Rwenzori Rare Metals Limited
US$100,000 paid to Rare Earth Elements Africa Pty Ltd
29,179,517 fully paid shares issued to Rare Earth Elements Africa Pty Ltd
100,000,000 fully paid shares issued to Southern Cross Mining Pty Ltd (SCM)
50,000,000 options (exercise price) of $0.005 issued to SCM
Expenditure on exploration and evaluation for additional 11% interest
2023
$
2022
$
148
148,035
233,436
800,000
325,000
954,689
148
148,035
233,436
800,000
325,000
954,689
Expenditure on exploration and evaluation for additional 15% interest
1,166,337
1,166,337
Expenditure on exploration and evaluation for additional 5% interest
498,210
498,210
Expenditure on exploration and evaluation for additional 9% interest
16,384,749
-
Movement in foreign exchange
1,416,388
(193,682)
21,926,992
3,932,173
59
Ionic Rare Earths Limited Annual Report 2023 Summarised financial information for associate – Rwenzori Rare Metals Limited (RRM)
The table below summarises the financial information for the associate that is relevant to Ionic Rare Earths Limited.
The information disclosed reflects the amounts presented in the financial statements of RRM and not Ionic Rare
Earths Limited share of those amounts. They have been amended to reflect adjustments, if any, made by Ionic Rare
Earths Limited when using the equity method, including fair value adjustments and modifications for differences in
accounting policy.
Current assets
Cash
Non-current assets
Plant and equipment
Other
Current Liabilities
Payables
Net assets
Groups share in %
Groups share in $
Fair value uplift
Contributions/Foreign exchange movement
Carrying amount
2023
$
2022
$
501,342
318,867
281,077
691,209
89,179
70,783
(170,220)
(33,318)
1,303,408
445,511
60%
51%
782,045
227,211
3,704,962
3,704,962
17,439,985
–
21,926,992
3,932,173
The fair value uplift is attributable to Ionic Rare Earths’ contribution towards exploration in excess of their
share of the net assets of RRM.
During the year the Company increased its interest in RRM from 51% to 60% by the completion of a bankable
feasibility study.
60
7. Plant and Equipment
Year ended 30 June 2022
Opening net book value
Additions
Additions on acquisition (a)
Depreciation on acquisition (a)
Depreciation charge
Foreign exchange translation adjustment
Closing net book value
At 30 June 2022
Cost (a)
Accumulated depreciation
Net book amount
Year ended 30 June 2023
Opening net book value
Additions
Depreciation charge
Foreign exchange translation adjustment
Furniture,
fittings and
equipment
$
Motor
Vehicles
$
Plant and
Equipment
$
Total
$
–
79,412
–
–
(27,312)
–
52,100
79,412
(27,312)
52,100
52,100
375,542
(65,411)
(1,651)
–
–
–
–
–
–
–
–
–
–
–
–
–
297,190
(90,769)
(4,706)
57
–
79,412
297,190
(90,769)
(32,018)
57
201,772
253,872
297,189
376,601
(95,417)
(122,729)
201,772
253,872
201,772
253,872
25,234
(1,262)
1,927,700
2,328,476
(219,984)
(286,657)
–
1,706
55
Closing net book value
360,580
23,972
1,911,194
2,295,746
At 30 June 2023
Cost
Accumulated depreciation
Net book amount
455,013
(94,433)
360,580
25,234
(1,262)
2,248,821
2,729,068
(337,627)
(433,322)
23,972
1,911,194
2,295,746
a. On 8 December 2021, the Group announced that it had reached agreement to acquire 100% of the shares in
Seren Technologies Limited; the acquisition was completed on 21 April 2022. As a result of the asset acquisition,
furniture, fittings and equipment, together with plant and equipment were acquired at the fair value of $206,421.
61
Ionic Rare Earths Limited Annual Report 2023 8. Intagibles – Patents
At Cost (a)
Accumulated amortisation
Carrying amount at the end of the financial year
Opening carrying value
Additions (net of amortisation) – acquisition of patents (a)
Amortisation charge
Effects of movement in foreign exchange
Carrying amount at the end of the financial year
2023
$
2022
$
5,877,572
5,244,733
(447,985)
(166,937)
5,429,587
5,077,796
5,077,796
–
251,510
5,088,550
(289,153)
(10,754)
389,434
–
5,429,587
5,077,796
a. On 8 December 2021, the Group announced that it had reached agreement to acquire 100% of the shares in
Seren Technologies Limited; the acquisition was completed on 21 April 2022. As a result of the asset acquisition,
intangibles were acquired at the fair value of $5,088,550 which included $3,456,000 through the issue of
48,000,000 shares at a price on issue date of $0.072, with the remaining paid in cash. Refer to note 20 (c) for
disclosure relating to future milestone payments which have been recognised as contingent liabilities.
9. Exploration and Evaluation Expenditure
At Cost (a)
Impairment of exploration & evaluation expenditure
Carrying amount at the end of the financial year
Carrying amount at the beginning of the financial year
Additions (a)
Effects of movement in foreign exchange
Transferred to Investment in Associate
2023
$
2022
$
1,624,481
12,314,681
–
–
1,624,481
12,314,681
12,314,681
3,409,530
5,651,228
8,905,151
43,321
(16,384,749)
–
–
Carrying amount at the end of the financial year
1,624,481
12,314,681
a. This amount represents contribution to expenditure incurred to move form a 51% interest to a 60% interest in
Rwenzori Rare Metals Limited which holds the Makuutu exploration licence.
Recovery of the capitalised amount is dependent upon:
iv. the continuance of the Group’s right to tenure of the area of interest;
v.
the results of future exploration; and
vi. the successful development and commercial exploitation, or alternatively sale.
62
10. Interest in Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares.
Each country of incorporation is also its principal place of business.
Name of Subsidiary
Country of
Incorporation
% equity held by
consolidated entity
$
$
Ionic Technologies International Limited (a)
England
100
100
a. previously called Seren Technologies Limited
There are no significant restrictions over the Group’s ability to access or use assets and settle liabilities
of the group.
11. Issued Capital
a. Issued and paid up capital
Fully paid ordinary shares
Less: capital raising costs
2023
$
2022
$
84,158,354
82,782,854
(5,825,795)
(5,825,795)
78,332,559
76,957,059
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company
in proportion to the number and amounts paid on the shares held. On a show of hands every holder of
ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll each share
is entitled to one vote.
63
Ionic Rare Earths Limited Annual Report 2023 b. Movements in ordinary share capital
Beginning of the financial year
3,872,604,920
76,957,059 3,206,399,514
43,393,406
2023
2022
Number of
shares
$
Number of
shares
$
Issued during the year
Issue at $0.074
Issue at $0.0075
Issue at $0.018
Issue at $0.017
Issue at $0.045
Issue at $0.072
Issue at $0.033
Cost of share issues
(i)
(ii)
(ii)
(iii)
(iv)
(v)
(vi)
–
–
–
–
405,405,406
30,000,000
186,000,000
1,395,000
70,000,000
1,260,000
20,000,000
–
–
–
–
–
–
3,300,000
3,500,000
48,000,000
3,456,000
360,000
56,100
157,500
3,500,000
115,500
–
–
–
–
–
(1,860,947)
End of the financial year
3,946,104,920
78,332,559 3,872,604,920
76,957,059
i. Funds raised from the exercise of options during the 2023 year and the exercise of options and share
placements during the 2022 year were used to progress the Group’s exploration activities and for general
working capital.
ii. Exercise of options
iii. Issued on vesting of performance rights
iv. Sign on incentive shares
v.
Issued as part payment to acquire Seren Technologies Limited (refer note 8)
vi. Termination payment to Jill Kelley.
c. Movements in unlisted options on issue
At balance date, there were 150,000000 (2022: 199,000,000) share options outstanding.
Balance at the beginning of the year
Share option movements during the year
Total options issued and lapsed in the year to
30 June 2023
Balance at the end of the year
Issued
Exercised
Lapsed
Total number
of Options
199,000,000
33,000,000
(70,000,000)
(12,000,000)
(49,000,000)
150,000,000
64
The balance of options on issue is comprised of the following:
Date Granted
Expiry Date
Exercise Price (cents)
Number of Options
3 December 2020
30 November 2023
24 February 2021
28 February 2024
1 February 2021
28 February 2024
9 December 2021
30 November 2024
17 December 2021
30 November 2024
3 February 2023
30 November 2024
2.15
6.0
6.0
6.4
6.4
6.4
Total number of options outstanding at the date of this report
d. Movements in unlisted performance rights
At balance date, there were 6,700,000 (2022: 10,200,000) performance rights outstanding.
Issued
Vested
Lapsed
40,000,000
25,000,000
10,000,000
6,000,000
36,000,000
33,000,000
150,000,000
Total number
of Rights
10,200,000
Balance at the beginning of the year
Performance rights movements during the year
Total performance rights issued and vested in the
year to 30 June 2023
Balance at the end of the year
e. Capital Management
-
-
(3,500,000)
(3,500,000)
6,700,000
When managing capital, management’s objective is to ensure the Group continues as a going concern as well
as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to
maintain a capital structure that ensures the lowest cost of capital available to the Group.
The Group is not exposed to any externally imposed capital requirements.
65
Ionic Rare Earths Limited Annual Report 2023 12. Reserves
Share Option Reserve
Balance at beginning of year
Vesting of performance rights
Movement during the year
Balance at the end of year
Convertible Note Equity Reserve
Balance at beginning of year
Movement during the year
Balance at the end of year
Foreign Currency Translation Reserve
Balance at beginning of year
Movement during the year
Balance at the end of year
Nature and purpose of reserves
Share option reserve
2023
$
2022
$
8,972,388
7,678,995
-
(1,896)
340,673
1,295,289
9,313,061
8,972,388
136,403
136,403
-
-
136,403
136,403
(198,286)
(589,590)
2,230,902
391,304
2,032,616
(198,286)
This reserve records the value of options issued to directors, employees and associates as part of their
remuneration.
Convertible note equity reserve
This reserve records the equity portion attributable to the convertible notes at the time of issue.
Foreign currency translation reserve
This reserve is used to record exchange differences arising from the translation of foreign controlled subsidiaries.
66
13. Statement of Cash Flows
Reconciliation of the net profit/(loss) after tax to the net cash flows from operations
Net loss
Depreciation
Amortisation
Share based payments
R&D income classified as Investing Activity
Grants classified as Investing Activity
Foreign exchange loss
Changes in assets and liabilities
Inventory
Trade receivables
Prepayments
Provisions
Trade and other creditors
2023
$
2022
$
(8,538,462)
(4,644,087)
286,657
289,153
31,956
10,754
340,673
1,506,993
(838,874)
(218,523)
(1,922,348)
(1,908)
1,261
(793,810)
–
–
(511,094)
(467,437)
(146,813)
(44,513)
(32,321)
207,974
–
244,631
Net cash flows used in operating activities
(11,658,004)
(3,582,134)
a. Reconciliation of cash
Cash balance comprises:
Cash at bank
Short term deposit
Closing cash balance
2023
$
2022
$
10,935,290
26,726,230
181,359
33,501
11,116,649
26,759,731
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short term deposits are made at various periods on call, depending on the immediate cash requirements of the
Group and earn interest at the respective short term deposit rates. At 30 June 2023, the Group had borrowing
facilities of $30,000 (2022: $30,000) which is secured by a short term deposit of $33,504 (2022: $33,501). This
facility is unutilised at 30 June 2023. In addition, the Company has a term deposit of $146,359 (2022: Nil) to secure
a bank guarantee.
The fair value of cash and cash equivalents is $11,116,649 (2022: $26,759,731).
The effective interest rate on cash at bank was 0.1% (2022: 0.1%).
Refer to Note 19 for risk exposure.
67
Ionic Rare Earths Limited Annual Report 2023 b. Non-cash investing and financing activities
During the financial year the Group undertook the following non-cash investing and financing activities.
3,500,000 fully paid shares issued to Ms. Jill Kelley as a termination payment
(2022: incentive payment)
48,000,000 fully paid shares issued to Seren AG as part consideration for the
acquisition of Seren Technologies Limited
2023
$
2022
$
115,500
157,500
–
3,456,000
115,500
3,613,500
14. Events Occurring after the Reporting Period
No matter or circumstance has arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the group, the results of those operations, or the state of affairs of the group
in future financial years.
15. Loss Per Share
Basic loss per share amounts are calculated by dividing net loss for the year attributable to ordinary Owners
of the parent, adjusted to exclude any costs of servicing equity, divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
Diluted loss per share amounts are calculated by dividing the net loss attributable to ordinary Owners of
the parent by the weighted average number of ordinary shares during the year plus the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary
shares into ordinary shares.
The following reflects the income / (loss) and share data used in the calculations of basic and diluted loss
per share:
a. Basic and diluted loss per share
From continuing operations attributable to the ordinary Owners of the company
(0.22)
(0.13)
2023
Cents
2022
Cents
68
b. Reconciliations of losses used in calculating losses per share
2023
$
2022
$
Loss attributable to the ordinary Owners of the company used in calculating
basic and diluted earnings per share
From continuing operations
(8,358,462)
(4,644,087)
Weighted average number of ordinary shares on issue used in the
calculation of continuing and discontinued basic and diluted earnings per
share
3,914,662,454
3,480,509,348
c. Effect of dilutive securities
Options on issue at reporting date could potentially dilute basic loss per share in the future. The effect in the
current year is to decrease the loss per share hence they are considered anti-dilutive. Accordingly, diluted loss
per share has not been disclosed.
16. Auditor’s Remuneration
Amounts received or due and receivable by BDO Audit (WA) Pty Ltd or associated entities for:
An audit or review of the financial report of the entity
17. Key Management Personnel
Compensation of key management personnel by compensation
Short-term
Post-employment
Share-based payment
2023
$
2022
$
71,628
71,628
52,557
52,557
2023
$
2022
$
1,586,991
1,055,696
31,289
55,108
29,800
909,123
1,673,388
1,994,619
69
Ionic Rare Earths Limited Annual Report 2023 18. Related Party Disclosure
a. Subsidiaries
The consolidated financial statements include the financial statement of Ionic Rare Earths Limited and the
subsidiaries listed in the following table.
Name
Country of incorporation
Equity interest
2023
$
2022
$
Ionic Technologies International Limited
England
100
100
b. Ultimate parent
Ionic Rare Earths Limited is the ultimate parent entity.
c. Other
The Company has entered into a sub-lease agreement on normal commercial terms with Azure Minerals Limited,
a company of which Mr Dickson is Company Secretary. During the year the Company paid sub-lease fees totalling
$9,000 (2022: $12,721).
d. Loans to/from Key Management Personnel
There were no loans outstanding to or from key management personnel as at 30 June 2023 (2022: Nil).
(e) Other transactions and balances with Key Management Personnel
Amounts due and unpaid at 30 June 2023 to Key Management Personnel includes consulting fees of $18,150
(2022: $27,500) to Coolform Investments Pty Ltd, a related party of B D Dickson and consulting fees of $Nil (2022:
$38,366) to Horizon Metallurgy Pty Ltd, a related party of TJ Harrison.
19. FINANCIAL INSTRUMENTS
a. Financial Risk Management
The Group’s financial instruments comprise receivables, payables and cash.
The Group’s main risks arising from the financial instruments are:
i.
interest rate risk,
ii.
liquidity risk,
iii. credit risk
iv. foreign currency risk.
70
Risk Exposures and Responses
i. Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will affect the Group’s income. The objective of interest
rate risk management is to manage and control risk exposures within acceptable parameters, while optimising
any return. As the Group has interest bearing assets, the Group’s income and operating cash flows are exposed
to changes in market interest rates. The assets are short term interest bearing deposits. The Group does not
have any policy in place and no financial instruments are employed to mitigate interest rate risks.
At reporting date, the Group had the following financial assets exposed to Australian and English variable
interest rate risk:
Financial Assets – Cash at Bank
Australia
England
2023
$
2022
$
11,004,864
26,547,615
111,785
212,116
11,116,649
26,759,731
The Group has no interest bearing liabilities and is therefore not exposed to interest rate risks.
The following sensitivity analysis is based on the interest rate risk exposures in existence at the end of the
reporting period. The 1% sensitivity is based on reasonable possible change over the financial year using the
observed range for the historic 2 years.
At 30 June, if interest rates had moved, as illustrated in the table below, with all variables held constant, post tax
profit and equity would have been affected as follows:
Consolidated
+1% (100 basis points)
-1% (100 basis points)
Post tax profit
Higher/(Lower)
2023
$
2022
$
Equity
Higher/(Lower)
2023
$
2022
$
111,166
(111,166)
267,597
(267,597)
111,166
(111,166)
267,597
(267,597)
The movements in profit and equity are due to higher/lower interest costs from variable rate cash balances.
71
Ionic Rare Earths Limited Annual Report 2023 ii. Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The table below reflects all contractually fixed pay-offs and receivables for settlement, repayments and
interest resulting from recognised financial assets and liabilities. Undiscounted cash flows of financial
liabilities are presented.
The Group has no derivative financial instruments.
The remaining contractual maturities of the Group’s financial liabilities are:
6 months or less
6 – 12 months
1 – 5 years
2023
$
2022
$
817,541
7,319
-
627,144
14,206
7,318
824,860
648,668
Maturity analysis of financial assets and liability based on management’s expectation
The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and (outflows).
Leasing obligations, trade payables and other financial liabilities mainly originate from the financing of assets
used in our ongoing operations such as property, plant and equipment and investments in working capital e.g.
inventories and trade receivables. These assets are considered in the Group’s overall liquidity risk.
72
<6 months
$
6 – 12
months
$
1 – 5 years
> 5 years
Total
$
$
$
11,116,649
1,102,795
12,119,444
–
–
–
817,541
11,301,903
7,319
(7,319)
26,759,731
531,096
27,290,827
–
–
–
–
–
–
–
–
–
–
–
627,144
14,206
26,663,683
(14,206)
7,318
(7,318)
–
–
–
–
–
–
–
–
–
–
11,116,649
1,102,795
12,119,444
824,860
11,294,584
26,759,731
531,096
27,290,827
648,668
26,642,159
Consolidated
Year ended 30 June 2023
Financial assets
Cash & cash equivalents
Trade & other receivables
Financial liabilities
Trade & other payables
Net Maturity
Year ended 30 June 2022
Financial assets
Cash & cash equivalents
Trade & other receivables
Financial liabilities
Trade & other payables
Net Maturity
iii. Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations and arises principally from transactions with customers and investments.
The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure
equal to the carrying amount of the financial assets of the Group, which comprises of cash and cash equivalents,
trade and other receivables and available for sale financial assets.
The Group does not hold any credit derivatives to offset its exposure.
The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it
the Group’s policy to securitise its trade and other receivables.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. Receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to
bad debts is not significant.
The Group places its cash deposits with institutions with a credit rating of AA or better and only with major banks.
73
Ionic Rare Earths Limited Annual Report 2023 Fair value
The fair values of financial assets and liabilities approximate their carrying amounts shown in the statement
of financial position due to their short-term nature. The carrying amounts of financial assets and liabilities as
described in the statement of financial position are as follows:
Financial Asset
Cash
Receivables
Carrying Amount
Aggregate Net Fair Value
2023
$
2022
$
2023
$
2022
$
11,116,649
26,759,731
11,116,649
26,759,731
1,102,795
531,096
1,102,795
531,096
Total financial assets
12,219,444
27,290,827
12,219,444
27,290,827
Financial Liabilities
Trade creditors and accruals and other creditors
824,860
648,668
824,860
648,668
The following methods and assumptions are used to determine the net fair values of financial assets and liabilities:
Cash and cash equivalent: The carrying amount approximates fair value because of their short-term to maturity.
Receivables and payables: The carrying amount approximates fair value.
iv. Foreign Currency Risk
Foreign currency risk is the risk that changes in foreign exchange rates will affect the Group’s income or the value of
its holdings of financial instruments. The Group is exposed to currency risk on purchases that are denominated in
a currency other than the respective functional currencies of Group entities, primarily the United Sates Dollar (USD)
and English pound (GBP). The currencies in which the transactions primarily are denominated are USD and GBP.
The Group has not entered into any derivative financial instruments to hedge such transactions and anticipated
future receipts or payments that are denominated in a foreign currency. Group’s investments in its subsidiaries are
not hedged as those currency positions are considered to be long term in nature.
74
Exposure to currency risk
The Group’s exposure to foreign currency risk at reporting date, expressed in Australian dollars (AUD), was:
Cash
Trade Receivables
Trade Payables
Gross Statement of Financial Position Exposure
Forward exchange contracts
Net Exposure
The following significant exchange rates applied during the year:
2023
$
2022
$
111,785
996,437
599,685
1,707,907
–
212,116
–
142,916
355,032
–
1,707,907
355,032
AUD/US$
AUD/GBP
Sensitivity analysis
Average rate
Reporting date spot rate
2023
2022
2023
2022
0.6734
0.5597
0.7256
0.5455
0.6630
0.5250
0.6892
0.5674
Over the year there have been significant movements in the Australian dollar when compared to other currencies,
it is therefore considered reasonable to review sensitivities base on a 10% movement in the Australian dollar. A 10
percent movement of the Australian dollar against the British Pound at 30 June would have had no effect on equity
and loss. A 10 percent movement of the Australian dollar against the British Pound at 30 June would have affected
equity and loss by the amounts shown below. This analysis assumes that all other variables, in particular interest
rates, remain constant. The analysis was performed on the same basis for 2022.
30 June 2023
British Pound
30 June 2022
British Pound
Equity
Profit or loss
$
$
+/-202,152
+/- 16,115
–
–
75
Ionic Rare Earths Limited Annual Report 2023 20. Parent Entity Finacial Information
a. Summary Financial Information
The following information has been extracted from the books and records of the parent and has been prepared in
accordance with Accounting Standards:
Statement of Financial Position
Assets
Current assets
Non-Current assets
Total assets
Liabilities
Current liabilities
Non-Current liabilities
Total liabilities
Equity
Issued capital
Reserves
Share-option
Convertible note equity
Foreign Currency Reserve
Accumulated loses
Total Equity
Statement of Profit or Loss and Other Comprehensive Income
Total loss
Total comprehensive loss
2023
$
2022
$
18,354,245
27,700,381
27,360,344
21,216,972
45,714,589
48,917,353
217,855
620,007
7,319
7,319
225,174
627,326
78,332,559
76,957,059
9,313,061
8,972,388
136,403
136,403
1,459,705
(193,686)
(43,752,313)
(37,582,136)
45,489,415
48,290,028
(6,335,934)
(4,482,930)
(4,837,946)
(4,648,687)
76
b. Guarantees
Ionic Rare Earths Limited has not entered into any guarantees, in the current or previous financial year, in relation to
the debts of its subsidiaries.
c. Contingent liabilities
On 19 August 2019, the Group received shareholder approval to acquire up to a 60% interest in the Makuutu rare
earths project (Makuutu). Makuutu is owned 100% by Ugandan registered Rwenzori Rare Metals Limited (RRM)
which at the time was owned 85% by South African registered Rare Earth Elements Africa Proprietary Limited
(REEA). Ionic Rare Earths has acquired to a 60% direct interest in RRM, and thereby up to a 60% indirect interest in
Makuutu. There remains a milestone payment of US$375,000, payable in cash or Ionic Rare Earths shares at the
election of the Vendor, on conversion of existing licences to mining licences.
On 8 December 2021, the Group announced that it had reached agreement to acquire 100% of the shares in Seren
Technologies Limited; the acquisition was completed on 21 April 2022. In addition to the acquisition payments,
which have been made, the agreement provided for the payment of certain milestone payments, being;
a. pay the Sellers 25% of any licence fee received by Ionic Rare Earths from a third party to use the technology for
magnet recycling or rare earth separation technology (Milestone 1 Payment), to a maximum of US$1,500,000.
b. Upon reaching commercial production for a magnet recycling plant or rare earth separation and refining plant
developed using the technology and designed for a scale exceeding 100 tonne per annum Rare Earth Oxide
equivalent production capacity or greater (Milestone 2) pay the Sellers US$1,500,000 less the total Milestone 1
Payments paid to the Sellers (Milestone 2 Payment).
77
Ionic Rare Earths Limited Annual Report 2023 21. SHARE BASED PAYMENTS
Details of each class of option issues are set out below.
a. Employee and consultants’ option plan
The establishment of the Ionic Rare Earths Limited Employee Share Option Plan (“Plan”) was approved by
shareholders at the Annual General Meeting held on 24 November 2021. The plan is designed to provide long-
term incentives for employees and certain contractors to deliver long term shareholder returns. Participation in
the plan is at the Board’s discretion and no individual has a contractual right to participate in the plan or to receive
guaranteed benefits. In addition, under the Plan, the Board determines the terms of the options including exercise
price, expiry date and vesting conditions, if any.
Options granted under the plan carry no dividend or voting rights. When exercised, each option is convertible into
an ordinary share of the company with full dividend and voting rights. During the year 33,000,000 options were
issued pursuant to the plan (2022: 44,000,000).
Value per
option
at grant
date
Exercise
Price
Balance at
the start
of the year
Granted
during the
year
Exercised
during the
year
Lapsed
during the
year
Balance at
end of the
year
Vested and
Exercisable
at end of
the year
(cents)
(cents)
Number
Number
Number
Number
Number
Number
6.4
6.4
2.85
44,000,000
–
– (2,000,000)
42,000,000
42,000,000
0.71
– 33,000,000
–
– 33,000,000
33,000,000
44,000,000 33,000,000
– (2,000,000) 75,000,000
75,000,000
Expiry
Date
30 Nov
‘24
30 Nov
‘24
Grant
Date
2023
30 Nov
‘21
3 Feb ‘23
Total
Weighted average exercise price
6.4 cents
6.4 cents
–
6.4 cents
6.4 cents
6.4 cents
2022
30 Nov
‘21
30 Nov
‘24
Total
Weighted average exercise price
6.4
2.85
– 44,000,000
– 44,000,000
6.4 cents
–
–
–
– 44,000,000
44,000,000
– 44,000,000
44,000,000
–
6.4 cents
6.4 cents
The weighted average remaining contractual life of share options outstanding at the end of the year
was 1.42 years (2022: 2.42 year).
78
Fair value of options granted.
During the 2023 financial year the weighted average fair value of the options granted was 0.714 cents (2022: 2.85).
The price was calculated by Black Scholes Option valuation methodology applying the following inputs
Number of options issued
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility (%)
Risk free interest rate (%)
Fair value per option (cents)
2023
2022
33,000,000
44,000,000
6.4
1.8
3.5
70%
3.03
0.714
6.4
3.0
4.4
120%
0.87
2.847
Total expenses arising from the issue of Employee Share Options recognised during the year were
$360,090 (2022: $697,500).
b. Directors and executive options
During the year no options were issued to directors and senior executives other than through the Ionic
Rare Earths Limited Employee Share Option Plan (2022: Nil). Set out below are summaries of options
issued to senior executives.
Exercise
Price
Value per
option at
grant date
Balance at
the start of
the year
Granted
during the
year
Exercised
during the
year
Lapsed
during the
year
Balance at
end of the
year
Vested and
Exercisable
at end of the
year
(cents)
(cents)
Number
Number
Number
Number
Number
Number
Grant
Date
2023
Expiry
Date
23 Dec ‘19 30 Nov ‘22
24 Mar ‘20 30 Nov ‘22
3 Dec ‘20 30 Nov ‘22
1.8
1.8
1.8
3 Dec ‘20 30 Nov ‘23
2.15
0.58
0.27
0.99
1.12
20,000,000
20,000,000
10,000,000
40,000,000
– (10,000,000) (10,000,000)
– (20,000,000)
– (10,000,000)
–
–
–
–
–
–
–
–
–
–
– 40,000,000
40,000,000
Total
90,000,000
– (40,000,000) (10,000,000) 40,000,000
40,000,000
Weighted average exercise price
1.9 cents
1.8 cents
1.8 cents
2.15 cents
2.15 cents
2022
23 Dec ‘19 30 Nov ‘22
24 Mar ‘20 30 Nov ‘22
3 Dec ‘20 30 Nov ‘22
1.8
1.8
1.8
3 Dec ‘20 30 Nov ‘23
2.15
0.58
0.27
0.99
1.12
30,000,000
20,000,000
10,000,000
40,000,000
– (10,000,000)
– 20,000,000
20,000,000
–
–
–
–
–
–
– 20,000,000
20,000,000
– 10,000,000
10,000,000
– 40,000,000
40,000,000
TOTAL
100,000,000
– (10,000,000)
– 90,000,000
90,000,000
Weighted average exercise price
1.9 cents
–
1.8 cents
–
1.9 cents
1.9 cents
79
Ionic Rare Earths Limited Annual Report 2023 The weighted average remaining contractual life of share options outstanding at the end of the year was 0.50 years
(2022: 0.86 years).
Total expenses arising from the issue of director and executive options recognised during the year were Nil (2022:
$697,500).
c. Performance Share Rights
No performance Rights were issued during the year. During the year ended 30 June 2022 10,000,000 Performance
Rights were granted to Mr Tim Harrison and 3,500,000 Performance Rights to Ms Jill Kelley. The vesting conditions
of the Performance Rights are:
a.
issued to Mr Harrison:
i. 3,3000,000 Performance Rights will vest when the Company’s VWAP share price is above 6 cents for a
period of 30 consecutive days (Tranche A);
ii. 3,300,000 million Performance Rights will vest when the Company’s VWAP share price is above 8 cents for
a period of 30 consecutive days (Tranche B); and
iii. 3,400,000 Performance Rights will vest when the Company’s VWAP share price is above 10 cents for a
period of 30 consecutive days (Tranche C).
b. Those issued to Ms Jill Kelley will vest when the Company signs its first offtake agreement as a result of Ms
Kelley’s introduction.
The Company has valued the Performance Rights issued to Mr. Tim Harrison using the Monte Carlo Valuation
approach. The valuation of an option using the Monte Carlo Approach incorporates the probability of meeting the
relevant performance conditions using a function of a number of variables and was calculated using the following
assumptions:
Variable
Share price (cents)
Share price target (cents)
Risk free interest rate
Volatility
Effective life
Fair Value (cents per Right)
Tranche A
Input
Tranche B
Input
4.7
6.0
0.99%
120%
3 years
1.7
4.7
8.0
0.99%
120%
3 years
0.8
Tranche C
Input
4.7
10.0
0.99%
120%
3 years
0.4
80
The Company considered the probability of the Performance Rights issued to Ms Jill Kelley vesting to be more
than likely and valued them based on the share price at the date of issue using the Black-Scholes Model using the
following assumptions:
Variable
Share price (cents)
Risk free interest rate
Volatility
Effective Life
Fair Value (cents per Right)
Input
4.7
0.99%
120%
3.0 years
4.7
Total expenses arising from the issue of Performance Rights recognised during the year were a credit of $19,417
(2022: $96,813).
d. Share Issue
During the year 3,500,000 fully paid ordinary shares were issued to Ms Jill Kelley as a termination payment. These
shares were valued at the closing price of the shares as trading on the ASX of the day of issue being 3.3 cents per
share.
During the previous year 3,500,000 fully paid ordinary shares were issued to Ms Jill Kelley as a sign on incentive.
These shares were valued at the closing price of the shares as trading on the ASX being 4.5 cents per share.
Total expenses arising from the issue of Termination and Incentive Shares recognised during the year was
$115,500 (2022: $157,500).
Consolidated
2023
$
2022
$
Options issued under Ionic Rare Earths Employee Share Option Plan (a)
360,090
1,252,680
Options issued to executives (b)
Performance share rights issued (c)
Termination/Incentive share Issue (d)
Total
–
(19,417)
115,000
455,673
–
96,813
157,500
1,506,993
81
Ionic Rare Earths Limited Annual Report 2023 Auditor’s Independence
Declaration
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Ionic Rare Earths Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Ionic Rare Earths Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation.
82
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Carrying value of Investment in Associate
Key audit matter
How the matter was addressed in our audit
At 30 June 2023, the carrying value of the
equity accounted investment in associate
Rwenzori Rare Metals Limited (“RRM”) who
holds 100% interest in the Makuutu Rate Earth
Elements Project in Uganda is disclosed in
Note 6.
At each reporting period, the value of the
equity accounted investment in RRM needs to
be assessed for indicators of impairment. If
indicators
the
recoverable amount needs to be estimated.
impairment
exist,
of
The assessment of the carrying value of the
equity accounted investment in RRM was a
key audit matter due to the judgement
involved in determining the appropriate
accounting treatment and determining
whether there are any indicators to suggest
that the investment in associate could be
impaired.
Our procedures included, but were not limited to:
• Considering the appropriateness of management’s
assessment of significant influence over RRM and
accounting for the interest as an investment in
associate.
• Considering management’s assessment of
indicators that the investment in associate could
be impaired.
•
•
•
•
Verifying the Group’s contribution to RRM’s
exploration and evaluation expenditure to earn its
equity interest in RMM during the year and
confirming the Group’s percentage ownership of
RRM.
Reviewing the calculation for the carrying value of
the investment including the Group’s share in
RRM’s loss.
Reviewing ASX announcements, Board of Directors
meetings minutes to assess for potential indicators
of impairment; and
Assessing the adequacy of the related disclosures
in Note 6 financial report.
83
Ionic Rare Earths Limited Annual Report 2023
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2023, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report, or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
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Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 22 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Ionic Rare Earths Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth
29 September 2023
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Ionic Rare Earths Limited Annual Report 2023
Corporate Governance
Statement 30 June 2023
Approach to Corporate Governance
Ionic Rare Earths Limited ACN 083 646 477 (Company) has established a corporate governance framework,
the key features of which are set out in this statement. In establishing its corporate governance framework, the
Company has referred to the recommendations set out in the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations 4th edition. The Company has followed each recommendation
where the Board has considered the recommendation to be an appropriate benchmark for its corporate
governance practices. Where the Company’s corporate governance practices follow a recommendation, the
Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with
the “if not, why not” reporting regime where, after due consideration, the Company’s corporate governance
practices do not follow a recommendation, the Board has explained the reasons for not following the
recommendation and disclosed what, if any, alternative practices the Company has adopted instead of those in
the recommendation.
The following governance-related documents can be found on the Company’s website at:
www.ionicre.com.au/governance
Charters
• Board
• Audit and Risk Committee
• Nomination Committee
Remuneration Committee
• Policies and procedures
• Policy and Procedure for the Selection and (Re)Appointment of Directors
• Process for Performance Evaluations
•
Securities Trading Policy
• Code of Conduct (summary)
• Diversity Policy (summary)
• Continuous Disclosure Policy (summary)
• Continuous Disclosure Compliance Procedures (summary)
•
Shareholder Communication and Investor Relations Policy
• Whistle Blower Policy
• Anti-Bribery and Corruption Policy
The Company reports below on whether it has followed each of the recommendations during the Reporting
Period. This statement was approved by a resolution of the Board on, and the information in this statement is
current as at 23 September 2022.
86
Principle 1: Lay solid foundations
for management and oversight
Recommendation 1.1
The Company has established the respective roles and responsibilities of its Board and management, and those
matters expressly reserved to the Board and those delegated to management and has documented this in its
Board Charter, which is disclosed on the Company’s website.
Recommendation 1.2
The Company undertakes appropriate checks before appointing a person or putting forward to shareholders
a candidate for election as a director and provides shareholders with all material information in its possession
relevant to a decision on whether or not to elect or re-elect a director. The checks which are undertaken, and the
information provided to shareholders are set out in the Company’s Policy and Procedure for the Selection and
(Re)Appointment of Directors, which is disclosed on the Company’s website.
The Company appointed Mr Sufian Ahmad on 10 May 2023 and Mr Nitin Tyagi 1 July 2023; the checks referred to
in the Company’s policies and Procedures for the selection and (Re)Appointment of Directors were undertaken.
The Company provided shareholders with all material information in relation to the re-election of Mr Trevor
Benson at its 2022 Annual General Meeting.
Recommendation 1.3
The Company has a written agreement with each director and senior executive setting out the terms of their
appointment.
The material terms of any employment, service or consultancy agreement the Company, or any of its child
entities, has entered into with its Chief Executive Officer, any of its directors, and any other person or entity who
is related party of the Chief Executive Officer or any of its directors has been disclosed in accordance with ASX
Listing Rule 3.16.4 (taking into consideration the exclusions from disclosure outlined in that rule).
Recommendation 1.4
The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the
proper functioning of the Board.
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Ionic Rare Earths Limited Annual Report 2023 Recommendation 1.5
The Company has a Diversity Policy, a summary of which is disclosed on the Company’s website. However, the
Diversity Policy does not include requirements for the Board to set measurable objectives for achieving gender
diversity and to assess annually both the objectives and the Company’s progress in achieving them. Nor has
the Board set measurable objectives for achieving gender diversity. Given the Company’s stage of development
as an exploration company, the number of employees in Australia and the nature of the labour market in
Uganda, the Board considers that it is not practical to set measurable objectives for achieving gender diversity.
The respective proportions of men and women on the Board, in senior executive positions and across the
whole organisation are set out in the following table. “Senior executive” for these purposes means a person
who makes, or participates in the making of, decisions that affect the whole or a substantial part of the
business or has the capacity to affect significantly the Company’s financial standing. During the Reporting
Period, this included the Finance Director & Company Secretary:
Whole organisation (including the Board)
10 out of 34 (29%)
Proportion of women
Senior executive positions
Board
Recommendation 1.6
2 out of 6 (33%)
0 out of 4 (0%)
The Chair is responsible for evaluation of the Board and, when deemed appropriate, Board committees
and individual directors in accordance with the process disclosed in the Company’s Process for
Performance Evaluations.
During the Reporting Period, an evaluation of the Board, its committees and individual directors took
place in accordance with the process disclosed in the Company’s Process for Performance Evaluations.
The Chairperson’s performance is evaluated by the other members of the Board in accordance with the
process disclosed in the Company’s Process for Performance Evaluations.
During the Reporting Period, an evaluation of the Chairperson took place in accordance with the
process disclosed in the Company’s Process for Performance Evaluations.
Recommendation 1.7
The Chief Executive Officer is responsible for evaluating the performance of senior executives in
accordance with the process disclosed in the Company’s Process for Performance Evaluations.
The Chairman is responsible for evaluating the Chief Executive Officer in accordance with the process
disclosed in the Company’s Process for Performance Evaluations.
During the Reporting Period, an evaluation of the Company’s senior executives took place in accordance
with the process disclosed in the Company’s Process for Performance Evaluations.
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Principle 2: Structure the board to
be effective and add value
Recommendation 2.1
The Board has not established a separate Nomination Committee. The Board believes that there would be no
efficiencies or other benefits gained by establishing a separate Nomination Committee. Accordingly, the Board
performs the role of the Nomination Committee. Although the Board has not established a separate Nomination
Committee, it has adopted a Nomination Committee Charter which describes the role, composition, functions
and responsibilities of the full Board in its capacity as the Nomination Committee. The Company’s Nomination
Committee Charter is disclosed on the Company’s website.
The Board carries out those functions which are delegated to it in the Company’s Nomination Committee
Charter. When matters that are within the responsibility of the full Board in its capacity as the Nomination
Committee are considered, they are marked as separate agenda items at Board meetings. The Board deals with
any conflicts of interest that may occur when nomination related matters are considered by ensuring that the
director with conflicting interests is not party to the relevant discussions.
Recommendation 2.2
The mix of skills and diversity for which the Board is looking to achieve in membership of the Board
is represented by the Board’s current composition, which includes extensive business experience and
qualifications, experience in mineral processing, experience in operating in locations outside of Australia,
accounting qualifications and financial management skills, leadership, governance and strategy.
While the Company is at exploration and feasibility stage, it does not wish to increase the size of the Board and
considers that the Board weighted towards technical experience is appropriate at this stage of the Company’s
development. External consultants may be brought in with specialist knowledge to address areas where this is
an attribute deficiency in the Board.
Recommendation 2.3
The Board considers the independence of directors having regard to the relationships listed in Box 2.3 of the
Principles & Recommendations.
Details of the Board of directors, their appointment date, length of service and independence status is as follows:
Director’s
Name
Appointment
Date
Length of Service
at 30/06/2023
Independence
Status
T Harrison – Managing Director
12 December 2020
30 months
Not Independent
S Ahmad – Non-executive Director
10 May 2023
2 months
Independent
M McGarvie – Non-executive director
16 July 2021
24 months
Independent
N Tyagi – Non-executive director
1 July 2023
-
Independent
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Ionic Rare Earths Limited Annual Report 2023 Recommendation 2.4
The Board has a majority of directors who are independent. The Board does not wish to increase its size at
present and considers that the current composition of the Board is adequate for the Company’s current size and
operations, and includes an appropriate mix of skills and expertise relevant to the Company’s business.
Recommendation 2.5
The Company has not appointed a Chair.
Recommendation 2.6
The Company has an induction program that it uses when new directors join the Board and when new senior
executives are appointed. The goal of the program is to assist new directors to participate fully and actively in
Board decision-making at the earliest opportunity and to assist senior executives to participate fully and actively
in management decision-making at the earliest opportunity.
The full Board in its capacity as the Nomination Committee regularly reviews whether the directors as a group
have the skills, knowledge and familiarity with the Company and its operating environment required to fulfil their
role on the Board and the Board committees effectively using a Board skills matrix. Where any gaps are identified,
the full Board in its capacity as the Nomination Committee considers what training or development should be
undertaken to fill those gaps. In particular, the full Board in its capacity as the Nomination Committee ensures
that any director who does not have specialist accounting skills or knowledge has a sufficient understanding of
accounting matters to fulfil his or her responsibilities in relation to the Company’s financial statements.
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Principle 3: Instil a culture of acting
lawfully, ethically and responsibly
Recommendation 3.1
The Company expects that its board and senior executives will conduct themselves with integrity and honesty
in accordance with the Code of Conduct. Directors, executives and employees shall deal with the Company’s
customers, suppliers, competitors, shareholders and each other with honesty, fairness and integrity and
observe the rule and spirit of the legal and regulatory environment in which the Company operates.
The Company aims to increase shareholder value within an appropriate framework which safeguards the rights
and interests of the Company’s shareholders and the financial community and to comply with systems of
control and accountability which the Company has in place as part of its corporate governance with openness
and integrity.
The Company is to comply with all legislative and common law requirements which affect its business
wherever it operates. Where the Company has operations overseas, it shall comply with the relevant local laws
as well as any applicable Australian laws. Any transgression from the applicable legal rules is to be reported to
the Managing Director as soon as a person becomes aware of such a transgression.
Recommendation 3.2
The Company has established a Code of Conduct for its directors, senior executives and employees, a
summary of which is disclosed on the Company’s website. Any breach of that code is reported to the board at
the next meeting of directors.
Recommendation 3.3
The Company has adopted a Whistleblower Policy to encourage the raising of any concerns or reporting of
instances of any violations (or suspected violations) of the Code of Conduct (or any potential breach of law or
any other legal or ethical concern) without the fear of intimidation or reprisal.
Recommendation 3.4
The Company has established an anti-bribery and corruption policy which is disclosed on the Company’s
website. Any breach of that policy is immediately reported to the Chief Executive Officer and Chairman of the
board of directors.
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Ionic Rare Earths Limited Annual Report 2023 Principle 4: Safeguard the integrity of corporate reports
Recommendation 4.1
The Board has not established a separate Audit and Risk Committee. The Board believes that there would be
no efficiencies or other benefits gained by establishing a separate Audit and Risk Committee. Accordingly, the
Board performs the role of the Audit and Risk Committee. Although the Board has not established a separate
Audit and Risk Committee, it has adopted an Audit and Risk Committee Charter which describes the role,
composition, functions and responsibilities of the full Board in its capacity as the Audit and Risk Committee. The
Company’s Audit and Risk Committee Charter is disclosed on the Company’s website.
The Board carries out those functions which are delegated to it in the Company’s Audit and Risk Committee
Charter. When matters that are within the responsibility of the full Board in its capacity as the Audit and Risk
Committee are considered, they are marked as separate agenda items at Board meetings. The Board deals with
any conflicts of interest that may occur when audit or risk related matters are considered by ensuring that the
director with conflicting interests is not party to the relevant discussions.
The Company has also established a Procedure for the Selection, Appointment and Rotation of its External
Auditor, which is an appendix to its Audit and Risk Committee Charter disclosed on the Company’s website.
The Board is responsible for the initial appointment of the external auditor and the appointment of a new
external auditor when any vacancy arises, as recommended by the Audit and Risk Committee (or its equivalent).
Candidates for the position of external auditor must demonstrate complete independence from the Company
through the engagement period. The Board may otherwise select an external auditor based on criteria relevant to
the Company’s business and circumstances. The performance of the external auditor is reviewed on an annual
basis by the Audit and Risk Committee (or its equivalent) and any recommendations are made to the Board.
Recommendation 4.2
Before the Board approved the Company financial statements for the half year ended 31 December 2022 and
the full-year ended 30 June 2023, it received from the Managing Director and the Chief Financial Officer a
declaration that, in their opinion, the financial records of the Company for the relevant financial period have
been properly maintained and that the financial statements for the relevant financial period comply with the
appropriate accounting standards and give a true and fair view of the financial position and performance of the
Company and the consolidated entity and that the opinion has been formed on the basis of a sound system of
risk management and internal control which is operating effectively (Declaration).
Recommendation 4.3
Processes are in place to verify the integrity of the Company’s periodic corporate reports released to the
market and not audited or reviewed by the external auditor. Examples of periodic corporate reports released
by the company include quarterly cash flow reports. Ionic Rare Earths has adopted a Continuous Disclosure
Policy which sets out how market announcements are prepared and released and has appointed the Company
Secretary as the Continuous Disclosure officer who oversees the drafting of and approves the final release
of announcements. The Company Secretary is responsible for satisfying him/herself that the content of any
announcement is accurate and not misleading and is supported by appropriate verification.
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Principle 5: Make timely and balanced disclosure
Recommendation 5.1
The Company has established written policies and procedures for complying with its continuous
disclosure obligations under the ASX Listing Rules. A summary of the Company’s Continuous Disclosure
Policy and Continuous Disclosure Compliance Procedures are disclosed on the Company’s website.
Recommendation 5.2
The Company secretary circulates all material market announcements to the board prior to release to ASX.
Recommendation 5.3
All new presentations are released to ASX Markets Platform ahead of any presentation to investors.
Principle 6: Respect the rights of security holders
Recommendation 6.1
The Company provides information about itself and its governance to investors on its website at
www.ionicre.com.au.
Recommendation 6.2
The Company has designed and implemented an investor relations program to facilitate effective two-way
communication with investors. The program is set out in the Company’s Shareholder Communication and
Investor Relations Policy, which is disclosed on the Company’s website.
Recommendation 6.3
The Company has in place a Shareholder Communication and Investor Relations Policy (disclosed on
the Company’s website) which outlines the policies and processes that it has in place to facilitate and
encourage participation at meetings of shareholders.
Recommendation 6.4
All resolutions put to meetings of shareholders are decided by way of a poll.
Recommendation 6.5
The Company engages its share registry to manage the majority of communications with shareholders.
Shareholders are encouraged to receive correspondence from the company electronically, thereby
facilitating a more effective, efficient and environmentally friendly communication mechanism with
shareholders. Shareholders not already receiving information electronically can elect to do so through the
share registry, Computershare Investor Services Pty Ltd at www.computershare.com.au.
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Ionic Rare Earths Limited Annual Report 2023 Principle 7: Recognise and manage risk
Recommendation 7.1
The Board has not established a separate Audit and Risk Committee. The Board performs the role of the Audit
and Risk Committee. Please refer to the disclosure above in relation to Recommendation 4.1.
Recommendation 7.2
The full Board in its capacity as the Audit and Risk Committee reviews the Company’s risk management
framework annually to satisfy itself that it continues to be sound, to determine whether there have been any
changes in the material business risks the Company faces and to ensure that the Company is operating within
the risk appetite set by the Board. The Board carried out these reviews during the Reporting Period.
Recommendation 7.3
The Company does not have an internal audit function. To evaluate and continually improve the effectiveness
of the Company’s risk management and internal control processes, the Board relies on ongoing reporting and
discussion of the management of material business risks as outlined in the Company’s Risk Management Policy.
Recommendation 7.4
As the Company is not in production, the Company has not identified any material exposure to any
environmental and/or social sustainability risks. However, the Company does have a material exposure to the
following economic risks:
i. Market risk – movements in commodity prices. The Company manages its exposure to market risk by
monitoring market conditions and making decisions based on industry experience.
ii. Future capital risk – cost and availability of funds to meet the Company’s business requirements. The
Company manages this risk by maintaining adequate reserves by continuously monitoring forecast and
actual cash flows.
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Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The Board has not established a separate Remuneration Committee. The Board believes that there would be
no efficiencies or other benefits gained by establishing a separate Remuneration Committee. Accordingly, the
Board performs the role of the Remuneration Committee. Although the Board has not established a separate
Remuneration Committee, it has adopted a Remuneration Committee Charter which describes the role,
composition, functions and responsibilities of the full Board in its capacity as the Remuneration Committee. The
Company’s Remuneration Committee Charter is disclosed on the Company’s website.
The Board carries out those functions which are delegated to it in the Company’s Remuneration Committee
Charter. When matters that are within the responsibility of the full Board in its capacity as the Remuneration
Committee are considered, they are marked as separate agenda items at Board meetings. The Board deals with
any conflicts of interest that may occur when remuneration related matters are considered by ensuring that the
director with conflicting interests is not party to the relevant discussions.
Recommendation 8.2
Details of remuneration, including the Company’s policy on remuneration, are contained in the “Remuneration
Report” which forms of part of the Directors’ Report and commences at page 26. The Company has not adopted
a policy regarding the deferral of performance-based remuneration and the reduction, cancellation or clawback
of the performance-based remuneration in the event of serious misconduct or a material misstatement in the
Company’s financial statements as other punitive measures, including dismissal, are available to be utilised by
the Company.
Recommendation 8.3
The Company’s Securities Trading Policy includes a statement of the Company’s policy on prohibiting
executives and directors from entering into transactions which limit the economic risk of participating in any
equity-based remuneration scheme.
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Ionic Rare Earths Limited Annual Report 2023 ASX Additional Information
Additional information required by the Australian Securities Exchange Ltd and not disclosed elsewhere in
this report is as follows. The information is current as at 18 September 2023.
Statement of shareholdings
Range
Names of 20 largest shareholders
100,001 or more
BNP Paribas Pty Ltd
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