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2023 ReportMagnes um
2023 Annual Report
Latrobe Magnesium Limited and its Controlled Entities
ABN 52 009 173 611
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
INDEX
Page
Company Directory ................................................................................................................. 3
Review of Operations ............................................................................................................ 4
Directors’ Report .................................................................................................................. 13
Auditor’s Independence Declaration .................................................................................... 23
Directors’ Declaration ........................................................................................................... 24
Statement of Profit or Loss and Other Comprehensive Income ............................................ 25
Statement of Financial Position ............................................................................................ 26
Statement of Changes in Equity ........................................................................................... 27
Statement of Cash Flows ..................................................................................................... 28
Notes to the Financial Statements ........................................................................................ 29
Independent Auditor’s Report ............................................................................................... 54
Additional Information ........................................................................................................... 58
2
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
COMPANY DIRECTORY
Directors
Jock Murray, Chairman
David Paterson, CEO
Philip Bruce
John Lee
Michael Wandmaker
Michelle Blackburn
Peter Church
Registered Office and
Principal Place of Business
Suite 504
80 Clarence Street
Sydney NSW 2000
Telephone: (02) 9279 2033
Auditors
Nexia Sydney Audit Pty Limited
Level 22
2 Market Street
Sydney NSW 2000
Chief Executive Officer
David Paterson
Secretary
John Lee
Bankers
National Australia Bank Limited
333 George Street
Sydney NSW 2000
Solicitors
Allens
Level 37
101 Collins Street
Melbourne VIC 3000
Share Registry
Computershare Investor Services Pty Limited
Level 3
60 Carrington Street
Sydney NSW 2000
Stock Exchange
Australian Securities Exchange
20 Bridge Street
Sydney NSW 2000
Telephone: 1 300 850 505
ASX CODE: LMG
www.latrobemagnesium.com
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
LATROBE MAGNESIUM PROJECT
1. Overview
During the year, the Company has made significant progress with its Latrobe Magnesium Project in the following
areas:
• Construction of the administration building, security gatehouse and carpark were completed in December
2022 to allow mobilisation for major construction contractors.
• Project activities remain on Budget ($41.75m) and all equipment packages were fully awarded before 30
June 2023 with all equipment fully tested and dry commissioned.
• Continued test work undertaken with CSIRO for the detailed design and modelling of the reduction furnaces,
briquette loading and product unloading and production of supplementary cementitious material (SCM) and
other products. Testing of vertical retort, metal melting, refining and casting were also conducted.
• Updating the process flowsheet and the mass and energy balance to incorporate new test work and vendor
data.
• Upgrading the 2019 distribution agreement with Metal Exchange Corporation in USA to incorporate the
Company’s expansion plans of its 10,000+ tpa plant.
• Reviewing GHD proposal for work required on the Yallourn landfill. The work undertaken by GHD will
determine the amount of ash that can be economically extracted, to determine the optimum size and mine
life for the project, potentially beyond 10,000 tpa.
• A pre-feasibility study Stage A for the 100,000 tpa magnesium plant using ferro-nickel slag as feed stock
was prepared by Bechtel comparing three locations, two in the Middle East and Malaysia.
• A binding memorandum of understanding was executed with Société Le Nickel for the supply of ferro-nickel
slag for 20 years.
•
•
•
In March 2023, Sarawak in Malaysia was selected as a preferred location due to the local production of
ferrosilicon, a modern port, workforce capacity and supporting services. A wholly owned subsidiary, Latrobe
Magnesium Sarawak Sdn Bhd was established in May 2023 for the development of this 100,000 tpa plant.
In April 2023, the construction loan of $23 million secured in May 2022 was increased by $3 million to $26
million. As at 30 June 2023, a total of $20 million was drawn and $1,464,163 was repaid in December 2022.
The balance of $6 million will be drawn as required in FY2024.
In May 2023, a placement of 70 million shares at $0.06 was completed raising $4.2 million to provide working
capital for operating the 1,000 tpa magnesium demonstration plant.
• Regional Development Grant Agreement with the State of Victoria was signed for the provision of funding
to support the demonstration plant. The first $250,000 instalment of the grant of $1 million was received in
August 2023.
2. Magnesium Markets
In the calendar year ended 31 December 2022, the primary world production of magnesium continued at 1.085
million tonnes. China’s estimated primary production for the calendar year 2022 was approximately 90% of the
world’s production. Some 50% of China’s production is used locally. World growth in demand is expected to
continue at an annual rate between 6% and 7% until 2027 when it is projected the market will require some 2
million tonnes.
Australian and New Zealand consumption of magnesium has been recorded in the order of 7,000 tonnes per
annum. All this magnesium is imported.
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
During the year, the magnesium price traded in the range between US$3,000 to US$ 3,500. The spot prices
as at 30 June 2023 were, as follows:
FOB China
US$ per tonne
30-Jun-23
3,000
30-Jun-22
3,500
Owing to United States anti-dumping duties, the USA delivered price is greater than double the FOB China price
per tonne. During the year, magnesium prices in the USA decreased from US$8.50 to US$4.00 per lb.
With the adoption of light-weighting of motor vehicles and the legislated emission standards in many countries
in the World, there is a growing demand by car companies to use more magnesium and aluminium sheet in
cars. The car business has adopted aluminium sheet in outside panels and with this sheet there is up to 6
percent of magnesium. With the development of new magnesium alloys and new production techniques, the
use of magnesium car parts and sheet provides many exciting opportunities.
3.
Stage 1 - Demonstration Plant 1,000 tpa
Construction
The main civil and concrete works are ending, with the following areas having been completed:
• Motor Control Centre (MCC)
• SCM Silo & Dust Collector
• Magnesite Silo Mixing and Holding Tanks
• Reverse Osmosis (RO) Plant
• Scrubber
• Quicklime Iso Tankers
Figure: SCM Silo (left) and Magnesite Silo Mixing Tank (right)
The remaining large scale civil works, only include the filtration area which has commenced with rebar and
formwork complete ready for concrete pouring. Remaining work involves small miscellaneous concrete
foundations and pedestals.
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
Figure: Filtration Area Formwork (left) and Filtration Area Excavation (right)
The EPCM contractor’s construction team has been fully mobilised to site to support early and upcoming major
construction works with recruitment completed for two Structural, Mechanical & Piping supervisors, an Electrical
& Instrumentation supervisor, a Commissioning Manager and Field Engineer, complimenting the Construction
Manager, Health Safety and Environment (HSE) Manager and Logistics Manager positions already established.
Focus has been on hiring local personnel for roles and will continue to be a theme of the project and the eventual
Operations phase.
The original construction strategy of fixed price Structural, Mechanical, Piping, Electrical and Instrumentation
(SMPEI) packages has been replaced by a self-perform labour hire strategy. This will have the benefit of
removing construction contractor overhead costs and profit margins, reducing construction costs. This will
require additional resources from the EPCM contractors’ construction team to lead the works but overall will result
in construction cost savings and help reduce upward pressure on the project cost. The labour hire solutions
identified have split the construction works into two main areas, Structural, Mechanical and Piping (SMP) and
Electrical & Instrumentation (E&I).
The work to develop an alternative construction strategy and find labour solutions has not surprisingly taken
time and impacted the schedule. The project team has elected to focus on reducing costs at the expense of the
overall program and the impact of this is further explained below. This strategy was critical to ensure the project
continued to meet its budget.
Schedule
The project schedule has undergone an extensive review over the last few weeks to identify the impact of the
change in construction strategy. Additionally with the change to self-perform construction, the EPCM contractor
has had to develop a detailed Level 5 schedule to be able to manage the works, when typically, this work would
have been undertaken by the construction contractors. Some 2,000 activities were added to the schedule,
necessitating time to complete.
The construction completion date is now the end of December 2023 with Stage 3 commissioning targeted to
commence in January 2024. First magnesium is targeted for March 2024.
Commissioning
LMG has a five-stage commissioning process that commences upon Mechanical Completion of a system and
sub system. The stages in the commissioning process and the typical activities undertaken are:
1. Pre-Commissioning – Low Voltage cable testing, Megger test motors, point to point checks, pressure tests
etc.
2. Dry-Commissioning – energisation of equipment, motor direction testing, functional testing of equipment
starts etc.
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
3. Wet-Commissioning – water runs, loop testing, run tests of dry equipment, reagent loading, spares in
place etc.
4. Ore-Commissioning – introduce ash, equipment integrity checks, interlock and loop confirmation,
continuous running of the plant etc.
5. Ramp Up – production ramp up
Systems and sub systems are sections of the physical scope that are broken down into blocks to allow the
commissioning team to commence commissioning even whilst construction is still occurring in other sections. This
allows for a faster startup and the operations team to start to gain familiarity with plant systems prior to Stage 4
when they take control.
The project schedule is continuously under review and optimisation, taking into account vendor, supplier, and
contractor timelines. Recent changes in construction strategy and contractor negotiations have introduced risk
to achieving the target of commencement of commissioning the process plant by the end of September. Given
the 5-stage commissioning process, the commissioning team are working diligently on commissioning as many
areas of the plant in advance as possible to mitigate any schedule impacts. The project team are confident that
the plant will still be commissioned in Q1 2024.
Engineering
The engineering and design phase is rapidly approaching completion, with efforts directed towards supporting
the construction team, remaining suppliers during fabrication activities and closeout of equipment vendor
documentation. The engineering team will demobilise by the end of September with only supporting works from
the EPCM contractor’s head office. The preparation of handover and commissioning documentation from the
EPCM contractor has commenced.
Process engineering is closing out the piping and instrumentation diagrams for design and the process control
philosophy is completed. Mechanical engineering is finalising the remaining suppliers during vendor engineering
with documentation reviews, final fabrication of individual equipment parts, and close-out. Civil and Structural
engineering is now largely focused on miscellaneous pedestals and supporting the site construction team with
any technical queries. Electrical and Instrumentation engineering is supporting vendors and miscellaneous non-
process infrastructure (NPI) such as the control room.
Even though the engineering team is beginning to demobilise, the remainder of the team are focused on
delivering the project on budget and continuing to identify cost reduction opportunities during construction and
commissioning.
Procurement
All procurement packages tendered have been awarded. A total of $17.5M has been committed to over 35
suppliers around the world with a total approximate value of up to $600,000 saving achieved by sourcing
equipment from low-cost countries, where value add was found with equipment packaged together and
modularised off-site.
The procurement team has ensured the timely delivery of the equipment packages to site, managing the
completion of QA/QC third party inspections and timely invoicing to avoid any delays with releasing freight.
The site team with the help from our logistics and freight forwarding partner, Customs Agency Services (CAS),
a division of Mondiale VGL, have received over 103 TEU (Twenty-foot Equivalent Units) and 138 tonnes of
freight moved to site in the last quarter including Vacuum Pumps, Reduction Furnace, Cooling Tower, Retort
Tubes, Steam Boiler, SCM Handling System, Material Handling Equipment, Dust Collectors, Screw Conveyor,
Scrubber, Reverse Osmosis Plant, MCC & PCS Hardware, Main Switch Board, MCC Switch Rooms & Cable
Trays etc.
Over 40 truck deliveries alone have been received for fabricated and purchased supplier sub-components
related to critical long lead equipment, including the Spray Roaster, which were receipted before the end of the
financial year.
The Structural, Mechanical, Piping (SMP) and Electrical & Instrumentation (E&I) construction packages have
been awarded.
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
Spray Roaster Structural Steel Erection and Level 1 Erection
Equipment received on-site has been promptly installed in position and commissioned, by the Commissioning
Manager, as per LMG’s commissioning procedure. This equipment includes Vacuum Pumps, Process Pumps,
Reduction Furnace, MCC Switch rooms, Spray Roaster sub-component equipment, Hydromet FRP Tanks,
Steam Boilers, Cooling Tower, Acid Area Scrubber, RO Plant & SCM Screw Conveyor.
Workshop Fabrication of Spray Roaster Reactor Shell and Oxide Bin
Ash Handling Hopper
Reduction Furnace Module
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
Process Control Software (PCS) Panel Delivery
Motor Control Centre (MCC) & Cable Trays
4.
Stage 2 - Australian Commercial Plant 10,000+tpa
LMG is reviewing the proposal received from GHD for work required on the Yallourn landfill. The scope of work
involves several crucial aspects, including:
• Calculating a JORC resource for the Yallourn landfill after drilling.
• Assessing geotechnical stability of the landfill to determine the amount of ash that can be extracted in a
safe and stable manner.
• Preparing a mine plan; and
• Developing a new mine rehabilitation plan.
This comprehensive work is expected to take approximately 6 months to complete and will commence once
terms and conditions and pricing has been agreed between the parties. On completion, LMG will determine the
size of its Stage 2 commercial plant. The current plant size is set at 10,000tpa, based on the ash supply
generated from Yallourn until its closure in 2028. This supply of ash feedstock alone can operate a 10,000tpa
plant for 20 years. There is substantially more ash supply available than what will be generated, and the work
undertaken will determine the amount of ash that can be economically extracted, to determine the optimum size
and mine life for the project, potentially beyond 10,000 tpa.
Following the assessment of the expanded plant's size, LMG will conduct a feasibility study using real data from
the demonstration plant. This bankable feasibility study is planned to be complete by the middle of 2024. The
projected timeline for operating the 10,000tpa plant is currently set for December 2025, contingent on timely
approval processes from the Victorian Government.
LMG's offtake agreement with Metal Exchange Corporation for the USA market allows for funding of the
+10,000tpa plant by government institutions. The floor price in this agreement is expected to ensure the
repayment of funding over a 15-year period, given the critical nature of magnesium as a mineral in both Australia
and the USA. During the year this agreement was upgraded to include floor prices and minimum quantities.
5.
Stage 3 – Magnesium Plant Project 100,000tpa: PFS – A Study
LMG's proposed 100,000tpa plant in Samalaju, in the Sarawak state of Malaysia, is strategically located near
the Samalaju Port, facilitating logistics as well as being close to ferro-silicon providers and essential resources.
LMG is actively engaged in discussions with various international investors regarding potential joint venture
participation in the Stage 3 project. LMG anticipates signing non-binding Memorandum of Understanding
(MoU’s) with potential equity partners within the next quarter. These MoU’s will outline clauses requiring
partners' commitment to contribute development funding proportionate to their equity holdings in the project.
Preliminary discussions with government sponsored banks indicate that the desired level of debt funding for the
project is feasible in both size and tenure.
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
Stage 3, 100,000tpa Plant Project Proposed Samalaju Site
As a prelude to commencing the PFS-B activity, LMG has now registered a Malaysian company, Latrobe
Magnesium Sarawak Sdn Bhd. This new entity enables the submission of the respective land and project
applications with local authorities by the end of 2023. Now that the selected site has been chosen, the
opportunity to include the site location into the PFS-B, further enhancing the accuracy of the PFS-B deliverables,
necessitated a delay to the commencement of the PFS-B, but was seen as a strategic value adding exercise to
the quality of the cost estimate at the end of PFS-B, as opposed to waiting until the Feasibility Study.
The PFS-B study is projected to commence in the second quarter of 2024, following the execution of the MoU’s
noted above. The completion of PFS-B is expected to take approximately 6 months.
A Feasibility Study will follow on the completion of the PFS and upon the completion of the Feasibility Study in
2024, a financial investment decision for the project will be made in the middle of 2025. The design, engineering,
and construction phase is estimated to span up to 3 years, with operations for the Stage 3, 100,000tpa plant
scheduled to commence at the end of 2028.
6. Ash Supply Agreement
On 10 March 2021, EnergyAustralia announced that they would be closing their Yallourn Power Station in mid
2028. LMG believes there is sufficient fly ash that can be mined from their current ash repository and the fly
ash produced over the next seven years to provide sufficient feedstock to supply a 10,000 tpa magnesium plant
for a period of 25 years. New agreements will need to be entered into between LMG and EnergyAustralia before
the expansion of LMG’s plant can take place.
LMG has announced that, once it has successfully operated its demonstration plant, it will be expanding the
plant to a 10,000tpa capacity.
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
7. Community Briefings
During the year, LMG updated its website so that it is more interactive with all stakeholders. It also has Linkedin
and Twitter sites for the provision of information.
On 9 November 2022, LMG held a community briefing about the development of the project and report on the
emissions and other matters. It is currently planning another briefing on completion of construction of the
demonstration plant. LMG believes in having a social licence with the Community in which it operates.
8.
Latrobe Council Planning Permit
On 5 June 2020, LMG’s application to the Latrobe City Council for planning approval to use and develop the
site for a 3,000 tpa magnesium plant at 320 Tramway Road Hazelwood North was approved and a certificate
issued. It has since reduced the size of the demonstration plant to 1,000tpa of magnesium.
LMG will need to get an additional approval for the construction of a 10,000 tpa plant. LMG remains committed
to progressing this project to safely re-process mining waste, generating jobs and developing a new clean
magnesium industry in the Latrobe Valley.
9.
EPA Planning Approval
On 16 September 2020, LMG’s application to the Environmental Protection Authority (EPA) for its research,
development and demonstration application for its initial 3,000 tpa magnesium plant at 320 Tramway Road
Hazelwood North was approved and a certificate issued. The approval allows LMG to operate the plant for a
period of 12 months post the commissioning stage.
The EPA’s approval comes with mainly standard conditions which need to be fulfilled before construction and/or
commissioning of the plant. An additional approval will be required for the 10,000 tpa plant.
10. Warrant Issue
Under the October 2019 funding agreement with RnD Funding Pty Ltd, LMG issued 35,889,199 unlisted
warrants. The warrants have an exercise price of $0.03 and are exercisable for a period up to 3 years post the
drawdown date. All warrants were exercised by RnD Funding as follows:
Warrant Amount
12,666,000
8,373,199
14,850,000
35,889,199
Exercise Price
$0.03
$0.03
$0.03
Exercise Date
18/11/21
15/11/22
27/06/23
Under the 16 May 2022 funding agreement with RnD Funding Pty Ltd, LMG has issued 80,000,001 warrants at
different strike prices and dates, as follows:
Warrant Amount
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,899
Exercise Price
$0.18
$0.18
$0.18
$0.24
$0.24
$0.24
$0.30
$0.30
$0.30
Expiry Date
31/03/25
30/06/25
30/09/25
31/12/25
31/03/26
30/06/26
30/09/26
31/12/26
30/06/27
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
11. Capital Raisings
On 24 May 2023, the Company issued 70,000,000 fully paid ordinary shares at $0.06 per share to sophisticated
and professional investors pursuant to a private placement, raising gross proceeds of $4.2 million to provide
working capital for operating the Demonstration Plant.
On 24 May 2023, the Company issued 15 million unlisted options at an exercise price of 10 cents for a term of
2 years payable on or before 23 May 2025 for payment of promotors fees associated with the capital raising.
12. Project Funding
On 13 December 2021, LMG signed a binding term sheet with RnD Funding Pty Ltd (“RnD Funding”) for the
provision of $23 million of loan funding and the facility agreement was signed on 16 May 2022. On 26 April
2023, the facility was increased by $3 million to $26 million. A total of $20 million has been drawn as below and
the balance of $6 million will be drawn as required.
Total Facility
Drawdown
Balance undrawn
$
$
26,000,000
24-Jun-22
24-Apr-23
26-Apr-23
23-Jun-23
(10,000,000)
(2,500,000)
(4,500,000)
(3,000,000)
(20,000,000)
6,000,000
Mandate fee - 1.25% and establishment fee is 1% which were paid in LMG shares on 30 June 2022.
Facility fee
- 15 million LMG shares issued on 26 April 2023 for the increased facility without increase in
interest on loan.
Interest rate remains at 12% per annum up to 31 October 2023 and conditionally 14% per annum for the rest of
the term.
The term of the loan is five years from the date of the first drawdown and the interest rate chargeable is 12%
per annum to 31 October 2023. It is LMG’s intention to repay the loan before 31 October 2024 from R&D
refundable tax offsets and refinancing of the residual amount of the facility.
The 2021-22 R&D tax rebate of $1,464,198 was used to repay part of this facility on 19 December 2022.
The facility is secured by a mortgage deed on the 320 Tramway Road, Hazelwood North property which has
been valued at $8.3 million owned by Latrobe Magnesium Limited as the mortgagor, and the lender, RnD
Funding Pty Ltd as the mortgagee.
13.
Regional Development Grant
Regional Development Grant Agreement with the State of Victoria was signed for the provision of funding to
support the demonstration plant. The grant of $1 million payable in 3 instalments has been approved, the first
instalment of $250,000 was paid on 30 August 2023.
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ REPORT
The Directors present their report together with the financial report of Latrobe Magnesium Limited (“Company”)
and of the Group, being the Company and its subsidiaries for the financial year ended 30 June 2023 and the
auditor’s report thereon.
DIRECTORS
The following persons were Directors of Latrobe Magnesium Limited during the financial year and up to the date
of this report unless otherwise stated.
Chairman
Jock Murray
CEO & Executive Director
David Paterson
Non Executive Director
P F Bruce
J R Lee
Non Executive Director
M F Wandmaker Non Executive Director
M L Blackburn
P C Church
Non Executive Director (appointed on 1 September 2022)
Non Executive Director (appointed on 24 April 2023)
PRINCIPAL ACTIVITIES
During the year the principal continuing activities of the Group consisted of completing the test work so that the
design and engineering of the demonstration plant could be completed, the equipment ordered, delivered to
site, tested and dry commissioned before 30 June 2023.
OPERATING RESULTS
The consolidated net loss of the Group after providing for income tax amounted to $2,438,497 compared to a
loss of $3,205,891 for the previous corresponding period. The loss was mainly due to the costs incurred in
expanding the team management, ongoing test work on Yallourn fly-ash and a pre-feasibility study of 100,000
tpa magnesium plant.
Further information on review of operations of the Group is shown separately in the Directors’ Review of
Operations on Page 4 to 12 of this report.
Dividends
The Directors have not recommended the payment of a final dividend.
Significant Changes in the State of Affairs
The significant change in the state of affairs of the Group during the financial year is an increase in the
contributed equity of $5,621,686 from $48,527,484 to $54,149,170 as a result of issuing the following fully paid
ordinary shares:
Date
Purpose
Shares Issues $/Share Amount $
Exercise of listed options
Exercise of unlisted warrants
Exercise of listed options
Exercise of listed options
Exercise of listed options
Payment of financial costs pursuant to lending agreement
26-Sep-22
16-Nov-22
21-Nov-22
11-Jan-23
02-Feb-23
26-Apr-23
3-23 May-23 Exercise of listed options
31-May-23
Private placement
Placement fees at 3.39%
Promotors fees 15M options at $0.10, valued by Black-Scholes
Exercise of listed options
Exercise of unlisted warrants
27-Jun-23
30-Jun-23
1,141,855
8,373,199
1,351,000
539,000
1,271,575
15,000,000
1,491,250
70,000,000
70,000
14,850,000
114,087,879
0.04
0.03
0.04
0.04
0.04
0.07
0.04
0.06
0.04
0.03
45,674
251,196
54,040
21,560
50,863
1,050,000
59,650
4,200,000
(142,500)
(417,097)
2,800
445,500
5,621,686
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ REPORT
MATTERS SUBSEQUENT TO BALANCE DATE
There is no matter or circumstance that has arisen since 30 June 2023 that has significantly affected or may
significantly affect:
(a)
(b)
(c)
the operations, in financial years subsequent to 30 June 2023, of the Group;
the results of those operations; or
the state of affairs, in financial years subsequent to 30 June 2023, of the Group.
On 27 September 2023, the financial report was authorised to be signed by a resolution of Directors.
LIKELY DEVELOPMENTS
Key external and business risks which could impact the Group’s ability to deliver its strategy are:
Availability of Finance - The Group has no material operating revenue and is unlikely to generate any material
operating revenue unless and until the demonstration plant is successfully commissioned and production
commences. The Group intends to raise additional capital by completing a sale and lease back of its Tramway
Road property to meet its obligations and implement its strategy. Magnesium being a critical mineral allows the
Group to raise additional funding from a variety of both Federal and State Government sources.
Commodity prices – The global magnesium market is subject to demand and supply fluctuations. These
fluctuations, along with fluctuations in the A$:US$ exchange rate, will affect the project economics of the Group’s
projects. Climate change risk creates additional demand for magnesium as a means to reduce emissions as
part of global ‘decarbonisation’ strategies. Such additional demand may create upside pressure on magnesium
prices in the future.
Management retention – The Group relies on its employees and consultants. There is a risk that the Group
may not be able to retain those key personnel or be able to find effective replacements for those key personnel
in a timely manner. The loss of such personnel or any delay in their replacement, could have a negative impact
on the Group’s ability to achieve its strategy. To address this risk, the Group continues to refine its remuneration
framework to provide competitive remuneration to retain key personnel.
Government approvals/environmental standards – Advancing the Group’s stage 2 commercial plant is
dependent on obtaining approvals from government agencies. To date the Group owing to its new low
emissions technology and it’s no waste policy has been able to meet increasing government and public
sensitivity to environmental sustainability, environmental regulation is becoming more stringent.
Except for information disclosed on certain developments and the expected results of those developments
included in this report under review of operations, further information on likely developments in the operations
of the Group and the expected results of those operations have not been disclosed in this report because the
Directors believe these matters to be commercial in confidence.
ENVIRONMENTAL REGULATIONS
The Group’s operations will be subject to normal State and Federal Environmental Regulations. There were no
breaches of these regulations during the year or to the date of this report.
INFORMATION ON DIRECTORS
John Stephen Murray AO – Non-Executive Chairman
Mr Murray studied economics and history with the Royal Military College at Duntroon before studying
engineering management at the Royal Military College of Science in the UK. He also holds qualifications in
international politics from Deakin University. Prior to his foray into business, Mr Murray had a distinguished
military career over almost 30 years before retiring as a Colonel in 1994. He brings a wealth of senior
management and directorship experience with a particular focus on infrastructure, project management and
freight logistics.
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LATROBE MAGNESIUM LIMITED and its Controlled Entities
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DIRECTORS’ REPORT
He managed numerous projects in his role with NSW Department for Transport including the production of a
ten-year development plan for the State's transport infrastructure and services and chairing the $2 billion
Parramatta Rail Link Company project. He acted as an adviser for operational planning and infrastructure for
the Sydney, Beijing, and London Olympic Games. In addition to these roles, he held numerous directorships
including non-executive chairman of Omni Tanker Holding Pty Ltd, The Hills Motorway (M2) Limited and Country
Pipelines Pty Ltd. He was on the board of Terminals Australia for five years. Roles currently held by Mr Murray
include strategic adviser for law firm, King & Wood Mallesons in the government infrastructure sector.
1 May 2015
Date of appointment as Director
None
Other current public company directorships
Former public company directorships in last 3 years None
Special responsibilities
Interests in securities
Chairman of the Board of Directors
17,715,559 ordinary shares in Latrobe Magnesium
Limited, registered in the name of MurraySetter Pty
Limited as trustee for the MurraySetter Trust.
David Oliver Paterson – Chief Executive Officer
Mr Paterson is a qualified Chartered Accountant and a graduate from the University of Queensland. Prior to
forming Europacific in 1990, he was a group manager of the Corporate Services Division of Tricontinental
Corporation Limited responsible for NSW and Queensland. He also worked for Coopers & Lybrand in Brisbane
and Sydney in their Corporate Services Division.
He has been involved in a wide range of corporate advisory assignments and underwritings for both debt and
equity for a number of public and private companies. Mr Paterson has experience in the property and mining
industries in relation to project financing, financial analysis, valuations; and the raising of debt and equity.
23 August 2002
Date of appointment as Director
Other current public company directorships
None
Former public company directorships in last 3 years None
Special responsibilities
Interests in securities
Chief Executive Officer
132,538,284 ordinary shares in Latrobe Magnesium
Limited, 22,553,969 held as a direct interest and
109,984,315 registered in the name of Rimotran Pty
Limited as trustee for the David Paterson Super Fund.
Philip Francis Bruce – Non-Executive Director
Mr Bruce is a director of P F Bruce & Associates, which provides corporate and project management services.
He is a mining engineer with over thirty years resource industry experience in Australia, South Africa, West
Africa, South America and Indonesia in project development and corporate management. He was the CEO of
PT BHP Indonesia and managing director of Triako Resources Limited and Pure Alumina Limited.
He also held Board positions with Ausmelt Limited, Buka Minerals Limited, Bassari Resources Limited and
Archean Star Resources Inc. He was general manager of development for Plutonic Resources Limited and was
technically responsible for acquisition and development of resource projects in its growth from $35 million to
over $1 billion market capitalisation.
Date of appointment as Director
Other current public company directorships
Former public company directorships in last 3 years Director of Ora Gold Limited
Special responsibilities
Interests in securities
4 September 2003
None
Chairman of Nomination & Remuneration Committee
13,665,986 ordinary shares in Latrobe Magnesium
Limited, registered in the name of Diazill Pty Limited
as trustee for the PB Superannuation Fund.
15
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ REPORT
John Robert Lee – Non-Executive Director
Mr Lee has a broad range of commercial skills and experiences in both the public and private sectors. He has
held senior management roles in the Federal Department of Employment and Industrial Relations. He was also
senior private secretary and principal adviser to Tony Street, a senior federal cabinet minister. In the private
sector, Mr Lee has held a number of senior management positions with a number of major corporations including
Henry Jones IXL, Elders Building Supplies and Woolworths Limited. He is the founder of Stockholder Relations
Pty Ltd, a management consultancy specialising in corporate advisory, investor relations and corporate
governance.
10 December 2010
Date of appointment as Director
Other current public company directorships
None
Former public company directorships in last 3 Years None
Special responsibilities
Interests in securities
Chairman of Audit & Risk Committee
500,000 ordinary shares in Latrobe Magnesium
Limited held as direct interest and 7,274,297 ordinary
shares registered in the name of Stockholder
Relations Pty Limited of which Mr Lee is a Director.
Michael Frederick Wandmaker – Non-Executive Director
Mr Wandmaker has recently been the Managing Director of Melbourne Water for more than 7 years. Prior to
that he was the COO and Acting CEO of publicly listed UGL. He has also held leadership positions as CEO of
Silcar, Vice President of Siemens Canada and President of FT Services as well as senior roles within other
Utilities and Engineering/construction companies. He is an experienced senior executive with a strong track
record of success in building and implementing corporate strategies to deliver operational excellence and
profitable growth in large, complex asset intensive organisations.
Mr Wandmaker brings a breadth and depth of leadership and operational experience at chief executive level
covering a wide range of public and private industry sectors. He has had significant M&A experience, and
successfully integrating large complex (unionised) construction, engineering, infrastructure, defence and utility
businesses. Graduated from Monash University with a Bachelor of Engineering, Mechanical and Computing,
he has worked both internationally and in Australia managing large scale engineering projects. He is a Fellow
of the Institute of Engineers and has qualified as a GAICD, providing a depth of engineering expertise to
complement LMG’s skill-based Board.
1 April 2022
Date of appointment as Director
None
Other current public company directorships
Former public company directorships in last 3 years None
Special responsibilities
Member of Audit & Risk Committee and Safety,
Health & Environment Committee
None
Interests in securities
Michelle Leanne Blackburn – Non-Executive Director
Michelle brings a breadth and depth of corporate advice experience, covering a wide range of public and private
industry sectors. She has had extensive experience in complex environmental law and has represented
Australian States and Federal governments and local and international legal entities over more than 20 years.
Her early experience was in legal roles in the Victorian Government; before practicing for many years as a
solicitor, including as a Senior Associate at Minter Ellison Lawyers; principal of her own legal practice in
Gippsland and as a Partner at Corrs Chambers Westgarth, managing Victoria and Western Australian
environment and planning teams.
Graduating from Melbourne University with a Bachelor of Laws (hons), with a Masters in Social Science
(Planning and Environment) from RMIT University and having been an Honorary Senior Fellow at the University
of Melbourne designing and delivering a Juris Doctor subject, Michelle has significant academic credentials.
Michelle has been a Director of South Gippsland Water, Chairman of Lifeline Gippsland and a Director of
Interchange Gippsland. She has also served as a Member of the Victorian Civil and Administrative Tribunal
sitting in its planning and environment list. With significant environmental law experience and as an Accredited
Mediator and a Graduate of the AICD, Michelle broadens the skills and experiences of LMG’s skill-based Board.
16
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ REPORT
1 September 2022
Date of appointment as Director
None
Other current public company directorships
Former public company directorships in last 3 Years None
Special responsibilities
Interests in securities
Chair of the Safety Health & Environment Committee
& member of Nomination / Remuneration Committee
254,870 ordinary shares in Latrobe Magnesium
Limited held as direct interest.
Peter Campbell Church – Non-Executive Director
Peter is the Executive Chairman of AFG Venture Group, an Australian and Asian corporate advisory firm with
activities throughout Australia, South East Asia and India. He is a senior adviser to Stephenson Harwood, an
English law firm with operations in multiple jurisdictions including, London, Hong Kong, Myanmar, and
Singapore. Previously, Peter also served as the Asian Managing Partner of Freehills, Non Executive Director
of Northern Iron Limited, Non Executive Director of The George Institute of Global Health, President of Australia
Indonesia Business Council, and a member of several Federal Government Boards such as the Trade Policy
advisory Committee.
Peter served as a Director of OM Holdings Limited (OMH) for a period of 10 years which included the
development and then operation of its Sarawak smelter operations. He retired from that role in 2021. His
experience gained from developing OMH’s activities in Sarawak will be of great advantage to LMG.
Peter was awarded the Medal of the Order of Australia in 1994 by the Australian Government for promotion of
business between Australia and South East Asia. He is a Fellow of the Australian Institute of Directors. He
graduated from NSW University with a Bachelor of Commerce, Sydney University with a Bachelor of Commerce
and Master of Law from University of London.
Peter brings a breadth and depth of leadership, corporate advisory, legal and directorship experience in ten
South East Asian countries, in particular Malaysia and the State of Sarawak. He provides a depth of operating
expertise to complement LMG’s skill-based Board for its proposed 100,000tpa magnesium plant in Malaysia.
24 April 2023
Date of appointment as Director
Other current public company directorships
None
Former public company directorships in last 3 Years None
None
Special responsibilities
Interests in securities
None
Company Secretary
Mr John Lee who has been a Director to the Company since 10 December 2010 became Company Secretary
on 1 July 2013.
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the
year ended 30 June 2023 and the number of meetings attended by each Director was:
Director
J S Murray
D O Paterson
J R Lee
P F Bruce
M F Wandmaker
M L Blackburn
P C Church
Directors’ Meetings
Audit Committee Meetings
Attended
9
9
9
9
9
7
2
Held Whilst in Office
9
9
9
9
9
7
2
Attended
-
2
2
-
-
-
-
Held Whilst in Office
-
2
2
-
-
-
-
17
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ REPORT
Retirement, Election and Continuation in Office of Directors
Mr P F Bruce is the Director retiring by rotation at the next Annual General Meeting of the Company. Mr Bruce
being eligible in accordance with Article 12.2 of the Company’s constitution offers himself for re-election. His
background, experience and qualifications are detailed on Page15.
Mr P C Church, appointed during the year, and being eligible, offers himself for election. His background,
experience and qualification are detailed on Page 17.
REMUNERATION REPORT - AUDITED
This report outlines the Remuneration Arrangements in place for each key management person of Latrobe
Magnesium Limited. Principles used to determine the nature and amount of remuneration are:
Competitiveness and reasonableness
Acceptability to shareholders
Performance linkage / alignment of executive compensation
Transparency
Appropriateness for level of operations
Remuneration Committee
In July 2023, a Nomination and Remuneration Committee was formed to advise and make recommendations
to the Board on recruitment policies and level of remuneration.
Key Management Personnel
The Nomination and Remuneration Committee formed in July 2023 advises and recommends to the Board of
Directors on remuneration policies and practices generally and makes specific recommendations on
remuneration packages and other terms of employment for Executive Directors, other Senior Executives and
Non-Executive Directors.
Executive remuneration and other terms of employment are reviewed annually having regard to performance
against goals set at the start of the year, relevant comparative information and independent expert advice. As
well as basic salary, remuneration packages include superannuation.
Directors and executives are also able to participate in an Employee Share Acquisition Plan. Remuneration
packages are set at levels that are intended to attract and retain executives capable of managing the Group’s
operations.
Remuneration of Non-Executive Directors is determined by the Board within the maximum amount approved by
shareholders from time to time. The Board undertakes an annual review of its performance and the performance
of the Board Committees against goals set at the start of the year.
Details of the nature and amount of each element of the emoluments of each Director of Latrobe Magnesium
Limited and each specified officer of the Company and the Group receiving the highest emoluments are set out
in the following tables.
The information which follows through to the section titled “Share Options Granted to Key Management
Personnel” is subject to audit by the external auditors.
2023
Directors
J S Murray
D O Paterson
J R Lee
P F Bruce
M F Wandmaker
M L Blackburn
P C Church
Base
Emoluments
$
80,000
400,000
70,000
50,000
50,000
41,667
-
691,667
Equity Options
Bonuses
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
Total
$
80,000
400,000
70,000
50,000
50,000
41,667
-
691,667
Performance
Related
%
-
-
-
-
-
-
-
-
18
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ REPORT
2022
Directors
J S Murray
D O Paterson
K A Torpey
P F Bruce
J R Lee
M F Wandmaker
Base
Emoluments
$
62,500
355,802
21,737
38,404
48,404
12,500
539,347
Equity Options
Bonuses
Total
Performance
Related
$
-
-
-
-
-
-
-
$
-
150,000
-
-
20,000
-
170,000
$
62,500
505,802
21,737
38,404
68,404
12,500
709,347
%
-
30%
-
-
29%
-
24%
There are no additional management executives employed by Latrobe Magnesium Limited who are identified
as Key Management Personnel other than those already disclosed.
Service Agreements
There are currently no service agreements in place formalising the terms of remuneration of Directors or the
CEO of the Company and the Group. The Board reviewed all Directors’ emoluments in 2021, the
recommendations were approved by shareholders in the 2021 Annual General Meeting.
Shareholdings
Number of shares held by Directors and Other Key Management Personnel of Parent Entity
Directors & Other Key
Management
Personnel
J S Murray
D O Paterson
P F Bruce
J R Lee
M F Wandmaker
M L Blackburn
P C Church
Balance at
1 July 2022
17,715,559
132,538,284
13,665,986
7,274,297
-
-
-
Acquired under
Share Purchase Plan
for Shareholders
-
-
-
-
-
-
-
Acquired Under
Debt Conversion
to Equity
-
-
-
-
-
-
-
Net Change
- Other
Balance at
30 June 2023
-
-
-
-
254,870
-
17,715,559
132,538,284
13,665,986
7,274,297
-
254,870
-
Share Options Granted to Key Management Personnel
Granted - No options were granted to key management personnel over unissued shares during the financial
year.
Exercised - No options were exercised by key management personnel during or in the period since the end of
the financial year and up to the date of this report.
No options expired during or since the end of the financial year.
Expiry -
Balance - No options outstanding as at 30 June 2023.
END OF AUDITED REMUNERATION REPORT
UNLISTED WARRANTS
Under the October 2019 funding agreement with RnD Funding Pty Ltd, LMG issued 35,889,199 unlisted
warrants. The exercise price of the warrants is $0.03 and exercisable for a period up to 3 years post the
drawdown date. All warrants were exercised by RnD Funding as follows:
19
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ REPORT
Warrant Amount
12,666,000
8,373,199
14,850,000
35,889,199
Exercise Price
$0.03
$0.03
$0.03
Exercise Date
18/11/21
15/11/22
27/06/23
Under the June 2022 funding agreement with RnD Funding Pty Ltd, LMG has issued 80,000,001 warrants at
different strike prices and dates, as follows:
Warrant Amount
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
Exercise Price
$0.18
$0.18
$0.18
$0.24
$0.24
$0.24
$0.30
$0.30
$0.30
Expiry Date
31/03/25
30/06/25
30/09/25
31/12/25
31/03/26
30/06/26
30/09/26
31/12/26
30/06/27
Unlisted Warrants
Total warrants outstanding at beginning of the period
Granted in the period
Exercised in the period
Lapsed in the period
Outstanding at the end of the period
103,223,200
-
(23,223,199)
-
80,000,001
LISTED OPTIONS
On 19 October 2021, the Company issued 120,000,001 fully paid ordinary shares at $0.025 per share to
sophisticated and professional investors pursuant to a private placement. In addition, the company issued
60,000,000 options, on a one for two free basis for each ordinary share issued under the placement. The
options were issued at an exercise price of 4 cents expiring on 26 October 2023.
On 19 November 2021, the Company issued 115,000,000 fully paid ordinary shares at $0.10 per share to
sophisticated and professional investors pursuant to a private placement. In addition, the company issued
28,750,000 options, on a one for four free basis for each ordinary share issued under the placement. The
options were issued at an exercise price of 4 cents expiring 26 October 2023.
On 19 November 2021, the Company issued 4,500,000 listed options to Peak Assets Management Pty Ltd
being part of the capital raising fees in lieu of cash payment. The balance of 25,500,000 listed options were
issued in January 2022 after the AGM. The options were issued at an exercise price of 4 cents expiring 26
October 2023. The value of 30,000,000 options is $3,255,634 calculated by Black-Scholes method.
As at 30 June 2023, twelve shareholders had exercised a total of 5,864,680 options at $0.04.
Listed Options
Total options outstanding at beginning of the period
Granted in the period
Exercised in the period
Lapsed in the period
Outstanding at the end of the period
116,866,817
-
(5,864,680)
-
111,002,137
20
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ REPORT
UNLISTED OPTIONS
On 24 May 2023, the Company issued 15,000,000 unlisted options at the exercise price of $0.10 expiring 23
May 2025 to the promoters of the 24 May 2023 private placement being part of the capital raising costs. The
value calculated by Black-Scholes method is $417,097.
Unlisted Options
Total options outstanding at beginning of the period
Granted in the period
Exercised in the period
Lapsed in the period
Outstanding at the end of the period
-
15,000,000
-
-
15,000,000
INDEMNIFICATION
During or since the end of financial year, the Company has not been indemnified or made a relevant agreement
to indemnify an officer or auditor of the Company or any related body corporate against liability incurred as such
an officer or auditor. The Company maintains a Directors and Officers Liability Insurance, including company
securities cover.
PROCEEDINGS ON BEHALF OF THE 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 any such proceedings during the year.
ENVIRONMENTAL REGULATIONS
The consolidated entity is subject to and is compliant with all aspects of environmental regulations of its
exploration and mining activities. The directors are not aware of any environmental law that is not being
complied with.
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 amounts paid or payable to Nexia Sydney Audit Pty Ltd and related entities for services provided
during the year are set out below:
Audit and Review of Financial Reports
Taxation and Other Services
$
68,000
10,000
78,000
The Board of Directors ensure that the provision of the non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001.
21
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ REPORT
AUDITORS’ INDEPENDENT DECLARATION
A copy of the auditors’ independence declaration as required under Section 307C of the Corporations Act 2001
is set out on Page 23 and forms part of this report.
This report is made in accordance with a resolution of the Directors.
J S Murray
Chairman
Sydney
27 September 2023
D O Paterson
Chief Executive Officer
22
To the Board of Directors of Latrobe Magnesium Limited
Auditor’s Independence Declaration under section 307C of the Corporations Act 2001
As lead audit director for the audit of the financial statements of Latrobe Magnesium Limited for
the financial year ended 30 June 2023, I declare that to the best of my knowledge and belief,
there have been no contraventions of:
(a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(b) any applicable code of professional conduct in relation to the audit.
Yours sincerely
Nexia Sydney Audit Pty Ltd
Stephen Fisher
Director
Dated: 27 September 2023
Sydney
23
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
DIRECTORS’ DECLARATION
In the directors' opinion:
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in Note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial
position as at 30 June 2023 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the directors
J S Murray
Chairman
Sydney
27 September 2023
D O Paterson
Chief Executive Officer
24
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2023
Revenue
Finance income
Other income
Expenses
Administration expenses
Employee benefit expenses
Finance cost
Research and evaluation expenses
Total expenses
Loss before Income Tax
Income tax expense
Loss/(profit) attributable to members of the parent
entity
Other Comprehensive Income
Other Comprehensive Income for the year
Note
GROUP
2023
$
2022
$
26,336
16,412
1,909,510
1,329,952
3
1,935,846
1,346,364
3
4
(2,575,737)
(2,992,678)
(783,720)
-
(1,014,886)
(672,866)
(31,976)
(854,735)
(4,374,343)
(4,552,255)
(2,438,497)
(3,205,891)
-
-
(2,438,497)
(3,205,891)
-
-
Total Comprehensive Income
(2,438,497)
(3,205,891)
Basic and diluted loss per share (cents per share)
20
Note
GROUP
2023
(0.15)
2022
(0.22)
The above statement should be read in conjunction with the accompanying notes.
25
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Total Current Assets
NON-CURRENT ASSETS
Trade and other receivables
Plant and equipment
Demonstration plant
Right-of-use asset
Intangible assets
Land and Property
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liabilities
Income Tax Payable
Total Current Liabilities
NON CURRENT LIABILITIES
Borrowings
Lease liabilities
Deferred income
Total Non Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
GROUP
2023
$
2022
$
5
6
6
7
8
9
10
11
12
13
9
13
9
8
6,891,733
13,893,983
20,785,716
94,977
28,149
31,439,516
34,945
6,951,093
3,132,240
15,246,819
3,499,352
18,746,171
85,973
13,753
6,262,575
80,333
6,916,460
5,282,390
41,680,920
18,641,484
62,466,636
37,387,655
4,232,561
12,627,502
26,090
-
16,886,153
2,703,450
11,414
16,558,312
19,273,176
1,962,297
-
9,731
1,647,756
3,619,784
5,507,314
72,190
5,481,346
11,060,850
36,159,329
14,680,634
26,307,307
22,707,021
14
15,16,17
54,149,170
7,586,088
48,527,484
7,383,847
(35,427,951)
(33,204,310)
26,307,307
22,707,021
The above statement should be read in conjunction with the accompanying notes.
26
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
GROUP
Note
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total
$
Balance at 1 July 2021
33,943,635
382,240
(30,165,804)
4,160,071
Exercise of warrants
Reserves recognised
15, 16
Total comprehensive income
-
-
-
Shares issued during the period
14
14,583,849
(167,385)
167,385
-
7,168,992
-
7,168,992
-
-
(3,205,891)
(3,205,891)
-
14,583,849
Balance at 1 July 2022
48,527,484
7,383,847
(33,204,310)
22,707,021
Exercise of warrants
-
(214,856)
214,856
Reserves recognised
17
(417,097)
417,097
-
-
-
Total comprehensive income
-
Shares issued during the period
14
6,038,783
-
-
(2,438,497)
(2,438,497)
-
6,038,783
Balance at 30 June 2023
54,149,170
7,586,088
(35,427,951)
26,307,307
The above statement should be read in conjunction with the accompanying notes.
27
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
STATEMENT OF CASHFLOWS
For the year ended 30 June 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from operations
Payments to suppliers and employees
Interest and other financial costs paid
Interest received
Income tax paid
GROUP
2023
$
2022
$
Note
3,152,582
814,413
(5,794,025)
(4,569,889)
(46,052)
26,336
(1,647,756)
-
16,412
-
Net cash used in operating activities
18b
(4,308,915)
(3,739,064)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of office equipment and FFF
Payment to acquire Demonstration Plant
Payment to acquire property
Payment of International Patent expenditure
Rent and deposit bonds
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Transaction costs related to issue of shares
Proceeds from exercise of warrants and options
Repayment of Borrowing
Proceeds from Borrowing
Transaction costs related to borrowings
Repayment of lease liabilities
Short term lending
Net cash from financing activities
(24,292)
-
(17,225,190)
(3,363,636)
(730,850)
(2,302,238)
(20,420)
(39,003)
(10,609)
(15,973)
(18,039,755)
(5,692,456)
4,200,000
14,788,100
(142,500)
(870,000)
931,283
621,908
(1,464,198)
-
10,517,500
9,500,000
-
(100,000)
(48,501)
(198,418)
-
(17,500)
13,993,584
23,724,090
Net (decrease) / increase in cash and cash equivalents held
(8,355,086)
14,292,570
Cash and cash equivalents at beginning of the financial year
15,246,819
954,249
Cash and cash equivalents at end of financial year
18a
6,891,733
15,246,819
The above statement should be read in conjunction with the accompanying notes.
28
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all the new or amended Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity. These
new Standards have not had a material financial impact on its financial statements:
AASB 2020-3: Annual Improvements to IFRS Standards 2018–2020 and Other Amendments
Application Date: 1 January 2022, applies to financial year ended 30 June 2023`
This Standard amends:
a.
the application of AASB 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the
measurement of cumulative translation differences;
b. AASB 3 to update references to the Conceptual Framework for Financial Reporting;
c. AASB 9 to clarify when the terms of a new or modified financial liability are substantially different from the
terms of the original financial liability;
d. AASB 116 to require an entity to recognise the sales proceeds from selling items produced while preparing
property, plant and equipment for its intended use and the related cost in profit or loss, instead of deducting
the amounts received from the cost of the asset;
e. AASB 137 to specify the costs that an entity includes when assessing whether a contract will be loss-
making; and
f.
the fair value measurement requirements in AASB 141 with those in other Australian Accounting Standards.
Basis of Preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the
Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable,
the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value
through other comprehensive income, investment properties, certain classes of property, plant and equipment
and derivative financial instruments.
Critical accounting estimates and judgements
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the consolidated entity's accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed in note 1(w).
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in note 27.
29
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
a.
Principles of Consolidation
The consolidated financial statements comprise the financial statements of Latrobe Magnesium Limited
and its subsidiaries at 30 June each year ("the Group"). Subsidiaries are entities over which the Group
has exposure to variable returns from its involvement with the subsidiaries and has the ability to affect
those returns through its power over the subsidiaries. Consolidated financial statements include all
subsidiaries from the date that control commences until the date that control ceases. The financial
statements of subsidiaries are prepared for the same reporting period as the parent, using consistent
accounting policies.
All inter-Company balances and transactions between entities in the Group, including any unrealised
profits or losses, have been eliminated on consolidation.
Minority interests in the results and equity of subsidiaries are shown separately in the consolidated
income statement and balance sheet respectively.
Subsidiaries are accounted for in the parent entity financial statements at cost. A list of controlled entities
is contained in Note 20 to the financial statements.
b.
Income Tax
The Group adopts the liability method of tax-effect accounting whereby the income tax expense is based
on the profit from ordinary activities adjusted for any non-assessable or disallowed items. It is calculated
using the tax rates that have been enacted or are substantially enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. No deferred income tax will be recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled. Deferred tax is credited in the income statement except where it relates to
items that may be credited directly to equity, in which case the deferred tax is adjusted directly against
equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be
available against which deductible temporary differences can be utilised. Deferred tax assets in relation
to tax losses are not brought to account unless there is convincing evidence of realisation of the benefit.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income tax legislation and the anticipation that the Group
will derive sufficient future assessable income to enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
Latrobe Magnesium Limited and its wholly-owned Australian subsidiaries have formed an income tax
group under the Tax Consolidation Regime. Each entity in the Group recognises its own current and
deferred tax liabilities, except for any deferred tax liabilities resulting from unused tax losses and tax
credits, which are immediately assumed by the parent entity. The current tax liability of each Group entity
is then subsequently assumed by the parent entity. The Group notified the ATO on 2 January 2003 that
it had formed an income tax group to apply from 1 July 2002. The tax group has entered a tax sharing
agreement whereby each Company in the Group contributes to the income tax payable in proportion to
their contribution to the net profit before tax of the tax group.
c.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented
in Australian dollars which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing
at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange
rate.
30
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date
of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the
date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the income
statement, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity
to the extent that the gain or loss is directly recognised in equity otherwise the exchange difference is
recognised in the income statement.
d.
Plant and Equipment
Plant and equipment are stated at historical cost, including costs directly attributable to bringing the asset
to the location and condition necessary for it to be capable of operating in the manner intended by
management, less depreciation and any impairment.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess
of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the
expected net cash flows that will be received from the assets’ employment and subsequent disposal. The
expected net cash flows have been discounted to their present value in determining recoverable amounts.
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over their useful
lives to the Group commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment - diminishing value
Depreciation Rate
35%
The asset’s residual values and useful lives are reviewed and adjusted if appropriate, at each balance
sheet date.
Gains and losses on disposals are calculated as the difference between the net disposal proceeds and
the asset's carrying amount and are included in the income statement in the year that the item is
derecognised.
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.
e.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured
at their fair value at the date of the acquisition. Intangible assets acquired separately are initially
recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at
cost less any impairment. Finite life intangible assets are subsequently measured at cost less
amortisation and any impairment. The gains or losses recognised in profit or loss arising from the
derecognition of intangible assets are measured as the difference between net disposal proceeds and
the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are
reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.
Research and development
Research costs are expensed in the period in which they are incurred. Development costs are capitalised
when it is probable that the project will be a success considering its commercial and technical feasibility;
the consolidated entity is able to use or sell the asset; the consolidated entity has sufficient resources;
and intent to complete the development and its costs can be measured reliably. Capitalised development
costs are amortised on a straight-line basis over the period of their expected benefit, once the project is
complete and ready to use, being their finite life of 20 years.
Patents
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line
basis over the period of their expected benefit, being their finite life of 20 years.
31
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
f.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any
lease payments made at or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to
obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated
useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease
liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability
for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments
on these assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially
recognised at the present value of the lease payments to be made over the term of the lease, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated
entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to
be paid under residual value guarantees, exercise price of a purchase option when the exercise of the
option is reasonably certain to occur, and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are remeasured if there is a change in the following: future lease payments arising from a change
in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use
asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
g.
Government grants
Government grants relating to assets are deferred and recognised in profit or loss over the period
necessary to match them with the assets that they are intended to compensate. Grants relating to
expense items are recognised as income immediately.
h.
Impairment of Non-Financial Assets
At each reporting date the Group assesses whether there is any indication that individual assets are
impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses
are recognised in the income statement where the asset's carrying value exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the
purpose of assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. Where it is not possible to estimate recoverable amount for an individual
asset, recoverable amount is determined for the cash-generating unit to which the asset belongs.
i.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial assets at fair value through profit or loss. Such
assets are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and the
contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being
avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred all the risks and rewards of ownership. When there
is no reasonable expectation of recovering part or all a financial asset, its carrying value is written off.
32
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income
are classified as financial assets at fair value through profit or loss. Typically, such financial assets will
be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them
as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which
are either measured at amortised cost or fair value through other comprehensive income. The
measurement of the loss allowance depends upon the consolidated entity's assessment at the end of
each reporting period as to whether the financial instrument's credit risk has increased significantly since
initial recognition, based on reasonable and supportable information that is available, without undue cost
or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has
increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The
amount of expected credit loss recognised is measured based on the probability weighted present value
of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest
rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in
profit or loss.
j.
Finance Costs
Finance costs directly attributable to the acquisition, construction or production of assets that necessarily
take a substantial period of time to prepare for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for their intended use or sale.
All other finance costs are recognised in income in the period in which they are incurred.
k.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts
are shown within short-borrowings in current liabilities on the balance sheet.
l.
Revenue
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Research and development tax rebate
Research and development tax rebate is recognised when it is received or when the right to receive
payment is established.
m.
Trade and Other Payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the
year end and which are unpaid. These amounts are unsecured and have up to 60-day payment terms.
33
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
n.
Interest bearing liabilities
All loans and borrowings are initially recognised at fair value, net of transaction costs incurred.
Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in the income statement over the period of
the loans and borrowings using the effective interest method.
All borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the balance sheet date.
o.
Other liabilities
Other liabilities comprise non-current amounts due to related parties that do not bear interest and are
repayable in more than 366 days from balance sheet date. As these are non-interest bearing, fair value
at initial recognition requires an adjustment to discount these loans using a market-rate of interest for a
similar instrument with a similar credit rating (Group's incremental borrowing rate). The discount is
credited to the income statement immediately and amortised using the effective interest method.
The component parts of compound instruments (convertible securities) issued by the Group are classified
separately as financial liabilities and equity in accordance with the substance of the contractual
arrangements and the definitions of a financial liability and an equity instrument. A conversion option that
will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of
the Company’s own equity instruments is an equity instrument.
At the date of issue, the fair value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible instruments. This amount is recognised as a liability on an
amortised cost basis using the effective interest method until extinguished upon conversion or at the
instrument’s maturity date.
The conversion option classified as equity is determined by deducting the amount of the liability
component from the fair value of the compound instrument as a whole. This is recognised and included
in equity, net of income tax effects, and is not subsequently remeasured.
p.
Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when the Group
has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of
economic resources will be required to settle the obligation and the amount can be reliably estimated.
For service warranties, the likelihood that an outflow will be required to settle the obligation is determined
by considering the class of obligations as a whole. Provisions are not recognised for future operating
losses.
Where the effect of the time value of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability.
q.
Share-based payments
For equity-settled share-based payment transactions, the Company measures the goods or services
received, and the corresponding increase in equity, directly, at the fair value of the goods or services
received.
r.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
s.
Contributed equity
Ordinary shares are classified as equity (refer Note 14).
Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity
proceeds. Costs directly attributable to the issue of new shares or options associated with the acquisition
of a business are included as part of the purchase consideration.
t.
Dividends
Provision is made for dividends declared and no longer at the discretion of the Group, on or before the
end of the financial year but not distributed at balance date.
34
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
u.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to members of Latrobe
Magnesium Limited, adjusted for the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares during the year.
The weighted average number of issued shares outstanding during the financial year does not include
shares issued as part of the Employee Share Loan Plan that are treated as in-substance options.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings by
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares. The
weighted average number of shares used is adjusted for the weighted average number of ordinary shares
that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
v.
Goods and Services Tax (GST)
Revenues, expenses are recognised net of GST except where 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.
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 balance sheet.
Cash flows are included in the cash flow statement 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.
w.
Critical Accounting Estimates and Judgments
The Directors evaluate, estimate and make judgements which are incorporated into the financial report
based on historical knowledge and best available current information.
Estimates assume a reasonable expectation of future events and are based on current trends and
economic data, obtained both externally and within the Group.
Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group
that may lead to an impairment of assets. Where an impairment trigger exists, the recoverable amount
of the asset is determined. Value in use calculations performed in recoverable amounts incorporate a
number of key estimates. No impairment has been recognised in respect of the intangible assets and
the demonstration plant under construction for the year ended 30 June 2023. Refer to Note 10 for details
of assumptions used in the value in use impairment model."
x.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period
ended 30 June 2023. The consolidated entity's assessment of the impact of these new or amended
Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below.
The Group is still assessing but does not currently expect these new Standards to have a material
financial impact on its financial statements:
AASB 2021:2
and Definition of Accounting Estimates
Amendments to Australian Accounting Standards – Disclosure of Accounting Policies
Application Date: 1 January 2023, applies to financial year ended 30 June 2024
35
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
This Standard amends:
a) AASB 7, to clarify that information about measurement bases for financial instruments is expected to
be material to an entity’s financial statements;
b) AASB 101, to require entities to disclose their material accounting policy information rather than their
significant accounting policies;
c) AASB 108, to clarify how entities should distinguish changes in accounting policies and changes in
accounting estimates;
d) AASB 134, to identify material accounting policy information as a component of a complete set of
financial statements; and
e) AASB Practice Statement 2, to provide guidance on how to apply the concept of materiality to
accounting policy disclosures.
Additional conforming amendments to AASB 1049, AASB 1054, and AASB 1060 were made by AASB
2021-6.
AASB 2021-5
Liabilities arising from a Single Transaction
Amendments to Australian Accounting Standards - Deferred Tax related to Assets and
Application Date: 1 January 2023, applies to financial year ended 30 June 2024
The amendment narrowed the scope of the recognition exemption in paragraphs 15 and 24 of AASB 112
(recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to
equal taxable and deductible temporary differences. The amendment applies to transactions that occur
on or after the beginning of the earliest comparative period presented.
AASB 2020-1 and AASB 2022-6
Liabilities with Covenants
Amendments to Australian Accounting Standards - Non-current
Application Date: 1 January 2024, applies to financial year ended 30 June 2025
The amendments to AASB 101 specify that conditions (covenants) to be complied with after the
reporting date do not affect the classification of debt as current or non-current at the reporting date.
Instead, an entity discloses information about these conditions in the notes to the financial statements.
Where AASB 2022-6 is adopted before its mandatory application date, AASB 2020-1 must also be applied
at the same date.
AASB 2022-5
Leaseback
Amendments to Australian Accounting Standards – Lease Liability in a Sale and
Application Date: 1 January 2024, applies to financial year ended 30 June 2025
The Standard amends AASB 16 Leases to add subsequent measurement requirements for sale and
leaseback transactions that satisfy the requirements in AASB 15 Revenue from Contracts with Customers
to be accounted for as a sale.
AASB 16 already requires a seller-lessee to recognise only the amount of any gain or loss that relates to
the rights transferred to the buyer-lessor. The amendments ensure that a similar approach is applied by
also requiring a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way
that does not recognise any amount of the gain or loss related to the right of use it retains.
AASB 2014-10
(Amendments to AASB 10 and AASB 128)
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Application Date: 1 January 2025, applies to financial year ended 30 June 2026
Amends AASB 10 and AASB 128 to remove the inconsistency in dealing with the sale or contribution of
assets between an investor and its associate or joint venture. A full gain or loss is recognised when a
transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is
recognised when a transaction involves assets that do not constitute a business, even if these assets are
housed in a subsidiary.
The mandatory application date of AASB 2014-10 has been amended and deferred to annual reporting
periods beginning on or after 1 January 2025 by AASB 2021-7.
36
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
NOTE 2: FINANCIAL RISK MANAGEMENT OBJECTIVES
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency
risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk
management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the consolidated entity. The consolidated entity uses derivative
financial instruments such as forward foreign exchange contracts to hedge certain risk exposures. Derivatives
are exclusively used for hedging purposes, i.e., not as trading or other speculative instruments. The
consolidated entity uses different methods to measure different types of risk to which it is exposed. These
methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing
analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is conducted by senior finance executives ('finance') under policies approved by the Board
of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the
consolidated entity and appropriate procedures, controls, and risk limits. Finance identifies, evaluates and
hedges financial risks within the consolidated entity's operating units. Finance reports to the Board monthly.
(i)
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash or access to funds to allow it to meet its
liabilities when they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities)
to meet expected requirements for a period of at least 90 days.
The Group’s exposure to liquidity risk has been assessed as minimal. There are no past due payables at
balance date.
The Board receives cash flow projections on a monthly basis as well as information regarding cash balances.
At the balance sheet date, these projections indicated that the Group expected to have sufficient liquid resources
to meet its obligations under all reasonably expected circumstances.
(ii)
Interest Rate Risk
The Group’s exposure to interest risk arises when the value of financial instruments fluctuates as a result of
changes in market interest rates and the effective weighted average interest rates on classes of financial assets
and financial liabilities.
The Group’s exposure to interest rate risk only extends to cash and cash equivalents and borrowings at balance
date. The Group’s exposure to interest rate risk at 30 June 2023 and 30 June 2022 is set out in the following
tables:
CONSOLIDATED
Year ended
30 June 2023
Weighted
Average
Interest
Rate
Floating
Interest
Rate
Fixed Interest maturing in
1 year
or less
Over 1 to 5
years
%
$
$
Financial assets
Cash & cash equivalents
0.3
2,604,460
Trade & other receivables
Total Financial Assets
Financial liabilities
-
2,604,460
Borrowings
12.0
Trade and other payables
-
-
Net financial assets
2,604,460
-
-
-
-
-
-
More
than 5
years
$
Non-
interest
bearing
$
Total
$
-
4,287,273
6,891,733
- 13,988,959
13,988,959
- 18,276,232
20,880,692
$
-
-
-
(15,498,665)
-
-
-
-
(15,498,665)
(4,169,371)
(4,169,371)
(15,498,665)
- 14,106,861
1,212,656
37
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Fixed Interest maturing in
Floating
Interest
Rate
1 year
or less
Over 1 to
5 years
Year ended
30 June 2022
Financial assets
Cash & cash equivalents
Trade & other receivables
Total Financial Assets
Financial liabilities
Borrowings
Trade and other payables
Net financial assets
Weighted
Average
Interest
Rate
%
0.3
12.0
(iii) Foreign exchange currency risk
$
$
1,130,412
-
1,130,412
-
-
1,130,412
-
-
-
-
-
-
More
than 5
years
$
Non-
interest
bearing
$
Total
$
-
-
3,585,325
- 17,701,732
14,116,407 15,246,819
3,585,325
18,832,144
$
-
-
-
(5,507,314)
-
(5,507,314)
-
-
-
(5,507,314)
-
(1,962,297)
(1,962,297)
15,739,435 11,362,533
The Group is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and
services in currencies other than the Group’s measurement currency.
There was no exposure to foreign currency risk at balance date because the Group had purchased some Euro
and USD currencies.
(iv) Share market risk
The Company relies greatly on equity markets to raise capital for its magnesium project development activities,
and is thus exposed to equity market volatility.
When market conditions require prudent capital management, in consultation with its professional advisers, the
Group looks to alternative sources of funding, including debt financing and joint venture participation.
(v) Credit risk
Credit risk arises principally when the other party to a financial instrument fails to discharge its obligations in
respect of that instrument. The Group’s exposure to credit risk arises from potential default of the counter party,
with the maximum exposure equal to the carrying amount of these instruments.
Trade and receivable balances are monitored on an ongoing basis with the Group’s exposure to bad debts
minimal. There was no exposure to trade receivable credit risk at balance date. The Group does not have any
material credit risk exposure to any single receivable or Group of receivables under financial instruments
entered into by the Group.
Other receivables comprise GST. Credit worthiness of debtors is undertaken when appropriate.
(vi) Commodity risk
Commodity price risk arises when the fair value of future cash flows of a financial instrument will fluctuate
because of changes in commodity market prices.
The Group had no exposure to commodity price risk at balance date. The Group’s potential exposure to
commodity price risk will materialise in the event that development of the Group’s Latrobe Magnesium Project
proceeds.
(vii) Market risk
Market risk does not arise as the Group does not use interest bearing, tradeable or foreign currency financial
instruments.
As the financial assets held by the company as at 30 June 2023 were cash and cash equivalents and trade and
other receivables, and the value of these financial assets are not affected by the short-term movement in interest
rates, a market risk sensitivity has not been performed.
(viii) Equity price risk
Equity price risk arises from investments in equity securities and Latrobe Magnesium Limited’s issued capital.
The Group had no exposure to investments in equity securities at balance date. The capacity of the Company
to raise capital from time to time may be influenced by either or both market conditions and the price of the
Company’s listed securities at that time.
38
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Fair value of financial assets and liabilities
The fair value of all monetary financial assets and financial liabilities of Latrobe Magnesium approximate their
carrying value.
There are no off-balance sheet financial asset and liabilities at year-end. All financial assets and liabilities are
denominated in Australian dollars.
NOTE 3: LOSS FROM ORDINARY ACTIVITIES
The following revenue and expense items are relevant in explaining the
financial performance for the period.
(i)
(ii)
Revenue
Finance Income
Other Income
Research and development tax rebate 2021-22
Research and development tax rebate 2022-23
Gain on foreign exchange
Expenses
Depreciation – Office equipment & FFF
Depreciation – Lease
Research and evaluation expenses
Directors and CEO fees
NOTE 4: INCOME TAX EXPENSE
The prima facie tax on loss from ordinary activities before income tax is
reconciled to the income tax benefit as follows:
Loss from ordinary activities before income tax
Prima facie tax benefit/(expense) on loss from ordinary activities before
income tax at 30% (2022: 30%)
Permanent differences relating to R&D claim
Decrease / Increase in income tax benefit due to timing differences
GROUP
2023
$
2022
$
26,336
16,412
325,009
1,550,536
33,965
1,935,846
9,896
45,389
1,014,886
691,666
1,329,952
-
-
1,346,364
7,406
191,647
854,735
709,347
GROUP
2023
$
2022
$
(2,438,497)
(3,205,891)
731,549
961,768
(959,094)
620,870
(917,208)
449,481
Tax losses not brought to account as deferred tax asset
(393,325)
(494,041)
Recognition of tax losses as deferred tax asset
Income tax (expense) / benefit attributable to loss from ordinary
activities before income tax
Net deferred tax asset not taken to account
-
-
-
-
The potential future income tax benefit arising from tax losses has not been taken to account because of the
absence of convincing evidence of the realisation of the benefit.
39
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Benefit of unrecognised tax losses carried forward:
Revenue losses
Capital losses
GROUP
2023
$
2022
$
1,242,975
818,514
849,651
818,514
2,061,489
1,668,165
The deferred tax asset will only be recognised if:
i.
the Group derives future assessable income of a nature and an amount sufficient to enable the benefit to
be realised;
the Group continues to comply with the conditions for deductibility imposed by the law; and
ii.
iii. no changes in tax legislation adversely affect the Group in realising the benefit.
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 6: TRADE AND OTHER RECEIVABLES
CURRENT
R&D tax concession rebate
GST recoverable
RND Funding loan receivable
Rent bond
Refundable prepayment
NON-CURRENT
Rent and deposit bonds
GROUP
2023
2022
$
$
6,891,733
15,246,819
GROUP
2023
2022
$
12,627,502
1,187,670
-
30,000
48,810
13,893,982
$
2,827,574
59,617
517,500
46,123
48,538
3,499,352
94,977
158,037
There are no balances within trade and other receivables that are impaired and are past due. It is expected
these balances will be received when due. Impaired assets are provided for in full.
NOTE 7: OFFICE EQUIPMENT AND FURNITURE FIXTURES & FITTINGS
Office equipment & FFF at cost
Accumulated depreciation
Total Office Equipment & FFF
GROUP
2023
$
47,470
(19,321)
28,149
2022
$
23,178
(9,425)
13,753
40
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Movements in Carrying Amounts
Between the beginning and the end of the current financial year, movements in the carrying amounts of plant,
equipment and furniture fixtures & fittings are:
Balance at 1 July
Additions
Disposal
Depreciation expense
Carrying amount at 30 June
NOTE 8: DEMONSTRATION PLANT
Capitalised costs of the Demonstration Plant (i)
Crane equipment (ii)
Capitalised borrowing costs (iii)
GROUP
2023
$
13,753
24,292
-
(9,896)
28,149
2022
$
22,054
-
(896)
(7,405)
13,753
GROUP
2023
$
26,182,508
2,881,000
2,376,008
31,439,516
2022
$
6,224,403
-
38,172
6,262,575
(i) Engineering studies and design work has been completed, construction contracts awarded and all
equipment was on site as at 30 June 2023, tested and dry commissioned. Construction work of the initial
1,000 tpa magnesium plant will be completed by December 2023. These costs have been capitalised as
demonstration plant asset of $26,182,508.
(ii) Ten cranes were purchased from the Tramway Road vendor as part of the total purchase price valued at
$2,881,000 (refer Note 11.) They were reconditioned and are now operational to assist in construction of
the equipment and in the plant’s operations specifically to automate the loading and unloading of the
smelters and plant maintenance.
(iii) The construction loan facility of $23 million (refer to Note 13) was finalised on 16 May 2022 with an
approximately five year loan term. The facility was increased by $3 million to $26 million on 21 April 2023.
As at 30 June 2023, a total of $20 million has been drawn. The first loan repayment instalment is not due
until 12 July 2024 with repayment permitted without penalty from 31 October 2023. The Company will
repay the lender $12,627,502 after 31 October 2023 on receipt of the R&D Tax Incentive rebate.
The loan finance costs comprised of mandate fee and establishment fee of $517,500 were paid by issue
of LMG shares and other transaction costs of $100,000 was paid in cash. Under the facility agreement,
80,000,001 unlisted warrants were issued with the value of $3,913,358 calculated by the Black-Scholes
method. The loan finance cost on the increased facility of $3 million with no increase on loan interest was
structured by issuing 15 million LMG shares at $0.07 per share.
The finance costs and warrants fair value issued under the terms of the facility agreement are initially set-
off against the loan facility proceeds as loan transaction costs but are eligible borrowing costs for
capitalisation progressively to the demonstration plant asset (until its completion) as they are unwound to
the loan carrying value over the loan term. The interest on the loan is also an eligible borrowing cost.
Capital Commitments
The Company has committed to $9.4 million of future capital expenditure on the Demonstration Plant at 30 June
2023 to Mincore and other suppliers.
41
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Deferred Income Liability
As the plant is expected to be completed by 31 December 2023, the deferred income from R&D incentive
received for the demonstration plant design and construction continues to be classified as a non-current liability.
Once the plant is constructed the deferred income will be reclassified as an offset against the non-current plant
asset.
R&D Tax Concession Refund
Plus R&D claim in 2023
NOTE 9: LEASING COMMITMENTS
Right of Use Assets - the Company is committed on following leases:
Right of Use Asset
Accumulated Depreciation
Lease Liability
Interest Expense for the year
Lease Payments during the year
Lease Liability at end of year
Current Lease Liability
Non Current Lease Liability
Total Lease Liability
2023
$
5,481,346
11,076,966
16,558,312
GROUP
2022
$
3,983,724
1,497,622
5,481,346
2023
$
74,000
(39,055)
34,945
74,000
4,062
(40,599)
37,503
26,090
11,413
37,503
GROUP
2022
$
462,726
(382,393)
80,333
462,726
16,537
(397,342)
81,921
9,731
72,190
81,921
Lease Commitments
Clarence St Sydney
Traralgon
Total
Right of use of assets
Dec-21 to Nov-24
May-22 to May-23
Value of Lease
Accumulated Depreciation
Lease Liability
Interest Expense
Lease Payment
Current Liability
Non Current Liability
74,000
(39,055)
34,945
74,000
4,062
(40,559)
37,503
26,090
11,413
37,503
-
-
-
-
-
-
-
-
-
-
74,000
(39,055)
34,945
74,000
4,062
(40,559)
37,503
26,090
11,413
37,503
42
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
• Sydney Lease – Administration Office
Term:
Monthly rent
Rental increase 4% per annum
Interest rate
1 December 2021 to 30 November 2024.
$3,077 as at 1 December 2022.
Incremental borrowing rate 4.52% at 1 December 2021 to measure lease liability
• Traralgon Lease – Operation Unit
Term:
Monthly rent
Rental increase N/A
Interest rate
21 May 2022 to 20 May 2023
$2,123 as at 21 May 2022.
Incremental borrowing rate 4.52% at 1 May 2022 to measure lease liability
NOTE 10: INTANGIBLE ASSETS
Acquired in-process research and development, at cost
Acquired in 2017 with the Ecoengineers Pty Ltd acquisition
Closing balance
International Patent for the Hydromet Process
New patent applications
Total Intangible Assets
GROUP
2023
$
5,684,000
1,080,000
2022
$
5,684,000
1,080,000
6,764,000
6,764,000
166,673
20,420
152,460
-
6,951,093
6,916,460
Since June 2023, the Company is in the process of applying Australian provisional patents for the processes of
improved ferro-nickel slag leaching and pro-hydrolysis of calcium chloride.
Latrobe Magnesium Project is based in the Latrobe Valley in Victoria. As the project is not held ready for use,
the Company is required to perform an annual impairment test. This impairment test involves the comparison
of the recoverable amount calculated from a discounted cash flow value in use impairment model with the
carrying value of the cash generating unit (CGU) at 30 June 2023. The CGU has been determined to comprise
the demonstration plant under construction of $31,439,516 set out in Note 8, the intangible assets of $6,951,093
set out above and the land and property of $3,132,239 set out in Note 11.
The key assumptions underlying this impairment test have been based on data provided in the Company’s
feasibility study and subsequent reports. The key assumptions are adjusted to incorporate risks with a particular
segment, and are summarised as follows:
budgeted cash flow period of 20 years, which approximates the project’s life, based on current inputs;
initial production of 1,000 tonnes per annum increasing to 10,000 tonnes;
•
•
• magnesium metal price of US$3,500 per tonne is used which represents the price FOB China. The United
States market is currently approximately double this price;
• market information for forward exchange rates;
•
•
•
operating costs based upon third party consultant’s estimates;
capital costs based upon the detailed feasibility study; and
pre-tax discount rate of 10% used in both 1,000tpa and 10,000tpa models.
43
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
NOTE 11 LAND AND PROPERTY
The purchase price together with capitalised costs are summarised below:
320 Tramway Road, Hazelwood North, VIC 3840
Land and property
Crane equipment
Stamp duty
Administration building improvement
Total
GROUP
2023
$
2,119,000
-
150,875
862,364
3,132,239
2022
$
2,119,000
2,881,000
150,875
131,515
5,282,390
On 16 December 2021, the Company exercised its option to purchase the site, where its magnesium production
facility is situated, from the landlord for its fixed price of $5 million, which included the cost of the cranes. The
settlement of the purchase was completed on 8 February 2022 and the final price of the property including its
crane equipment was $5,000,000 paid as follows:
Cash payment
Issue of 22.5 million LMG shares @ $0.10
Issue of 8.3 million LMG shares @ $0.095
Total Purchase Price
$
1,961,900
2,250,000
788,100
5,000,000
Land and Property
Crane Equipment
$
2,119,000
2,881,000
Total Purchase Price
5,000,000
The cranes will be used to automate the loading and unloading of the smelters during the production process.
It is now classified as crane equipment in the demonstration plant in Note 8.
NOTE 12: TRADE AND OTHER PAYABLES
Trade creditors and accrued expenses
Employee annual leave entitlements
Total
NOTE 13: BORROWINGS - SECURED
Loan balance at 1 July
Loan Drawdown
Interest accrued
Loan repayment
Loan balance at 30 June
Less transaction costs
Plus transaction costs amortisation
Carrying value as at 30 June 2023
GROUP
2023
$
4,169,370
63,190
4,232,560
2022
$
1,927,561
34,736
1,962,297
GROUP
2023
$
10,023,333
10,000,000
1,331,130
(1,464,198)
19,890,265
(5,580,858)
1,021,545
15,330,952
2022
$
-
10,000,000
23,333
-
10,023,333
(4,530,866)
14,847
5,507,314
44
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Borrowings
Current
Non-Current
Total
$
12,627,502
2,703,450
15,330,952
$
-
5,507,314
5,507,314
The construction loan facility of $23 million secured on 16 June 2022 was increased by $3 million to $26 million
on 21 April 2023. The terms and conditions are as follows:
Lender
RnD Funding Pty Ltd
Loan Term
Four years and nine months expiring 31 March 2027
Interest Rate
12% per annum up to 31 October 2023, 1.4% per annum thereafter
Loan Drawdown
Financing Costs
$20 million has been drawn, the balance of $6 million will be drawn as required
Mandate fee 1.25% and establishment fee 1% totaling $517,500 paid by issue of LMG
shares. Transaction costs $100,000 paid by cash.
80 million warrants issued to the lender at a fair value of $3,913,358. The financing
costs are subtracted from the loan proceeds and unwound over the loan term of 4
years and 9 months to 31 March 2027.
15 million LMG shares at $0.07 were issued as financing costs of the $3 million
increase in the facility. Interest rate remains unchanged.
Loan Repayments: Loan principal and interest repayments are scheduled to start from 12 July 2024. All
R&D grant refunds received subsequent to the loan commencement are required to be
utilised as additional loan repayments.
The facility is secured by a mortgage deed on the 320 Tramway Road, Hazelwood North property which has
been valued at $8.3 million owned by Latrobe Magnesium Limited as the mortgagor, and the lender, RnD
Funding Pty Ltd as the mortgagee.
NOTE 14: ISSUED CAPITAL
(a) Ordinary Shares Issued and Fully Paid
Balance at beginning of reporting period
14 Oct 2021 1,155,306 shares issued at $0.0277 to pay finance costs pursuant a
lending agreement in 2019
28 Oct 2021 120,000,001 shares issued at $0.025 pursuant to a private
placement, minus placement fees at 6%
18 Nov 2021 12,666,000 shares issued at $0.03 - exercise of unlisted warrants
19 Nov 2021 115,000,000 shares issued at $0.10 pursuant to a private
placement, minus placement fees at 6%
19 Nov 2021 30,000,000 options @ $0.04 expiring 26 Oct 2023, valued by Black-
Scholes method, for capital raising costs
15 Dec 2021 4,165,000 shares issued at $0.02 - exercise of unlisted warrants
23 Dec 2021 969,434 shares issued @ $0.04 - exercise of listed options
08 Feb 2022 22,500,000 shares issued at $0.10 being payment for 50% of the
purchase price of 320 Tramway Road
08 Feb 2022 8,319,809 shares issued at $0.095 being payment of crane
equipment
14 Feb 2022 913,750 shares issued @ $0.04 - exercise of listed options
29 Mar 2022 4,165,000 shares issued at $0.02 - exercise of unlisted warrants
30 Jun 2022 6,917,191 shares issued at $0.0784 being financing costs pursuant
to lending agreement
GROUP
2023
$
2022
$
48,527,484
33,943,635
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31,976
3,000,000
(180,000)
379,980
11,500,000
(690,000)
(3,255,634)
83,300
38,777
2,250,000
788,100
36,550
83,300
517,500
45
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
26-Sep-2022 1,141,855 shares issued at $0.04 - exercise of listed options
16-Nov-2022 8,373,199 shares issued at $0.03 - exercise of unlisted warrants
21-Nov-2022 1,351,000 shares issued at $0.04 - exercise of listed options
11-Jan-2023 539,000 shares issued at $0.04 - exercise of listed options
02-Feb-2023 1,271,575 shares issued at $0.04 - exercise of listed options
45,674
251,196
54,040
21,560
50,863
26-Apr-2023 15,000,000 shares issued at $0.07 for finance cost pursuant to
1,050,000
amended lending agreement of 21 April 2023
3-23 May-23 1,491,250 shares issued at $0.04 - exercise of listed options
31-May-2023 70,000,000 shares issued at $0.06 pursuant to a private placement
Placement fees at 3.39%
15,000,000 options at $0.10 expiring 23 May 2025, valued by Black-
Scholes, for capital raising costs
27-Jun-2023 70,000 shares issued at $0.04 - exercise of listed options
30-Jun-2023 14,850,000 shares issued at $0.03 - exercise of unlisted warrants
59,650
4,200,000
(142,500)
(417,097)
2,800
445,500
(b) Shares on Issue
Balance at beginning of reporting period
Share on Issues:
•
•
•
•
•
•
•
•
•
•
•
14 October 2021
28 October 2021
18 November 2021
19 November 2021
15 December 2021
23 December 2021
08 February 2022
08 February 2022
14 February 2022
29 March 2022
30 June 2022
26-September-2022
16-November-2022
21-November-2022
11 January 2023
2 February 2023
26 April 2023
3-23 May-23
31 May 2023
27-Jun-23
30-Jun-23
•
•
•
•
•
•
•
•
•
•
Balance at end of reporting period
Fully paid ordinary shares
54,149,170
48,527,484
No.
No.
1,610,608,742
1,313,837,251
-
-
-
-
-
-
-
-
-
-
-
1,155,306
120,000,001
12,666,000
115,000,000
4,165,000
969,434
22,500,000
8,319,809
913,750
4,165,000
6,917,191
1,141,855
8,373,199
1,351,000
539,000
1,271,575
15,000,000
1,491,250
70,000,000
70,000
14,850,000
-
-
-
-
-
-
-
-
-
-
1,724,696,621
1,610,608,742
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the
number of shares held.
At shareholder meetings each ordinary share is entitled to one vote when a poll is called.
Options
There were no unissued shares under option.
Employee Share Plan Scheme
For information relating to the Latrobe Magnesium Limited Share Plan Acquisition Plan, refer to Note 24:
Employee Benefits. No shares were issued during the financial year.
46
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Capital Management
The Group considers its capital to comprise its ordinary share capital and reserves.
In managing its capital, the Group’s primary objective is to maintain a sufficient funding base to enable the
Group to meet its working capital and the development of its Latrobe magnesium project.
In making decisions to adjust its capital structure to achieve these aims, either through altering its dividend
policy, new share issues, or consideration of debt, the Group considers not only its short-term position but also
its long-term operational and strategic objectives. During FY2023, the Group:
• Completed a capital raising by placements in May 2023 raising $4.2 million to fund the magnesium project.
• Negotiated an increase in a $23 million loan facility secured in May 2022 by $3 million to $26 million.
• Completed the first milestone of a Regional Development Grant agreement with the State of Victoria for a
grant of up to $1 million entered in June 2022, approved to be paid in 3 instalments commencing August
2023.
NOTE 15: UNLISTED WARRANTS
Under the October 2019 funding agreement with RnD Funding Pty Ltd, LMG has issued 35,889,199 unlisted
warrants. The warrants have an exercise price of $0.03 and are exercisable for a period up to 3 years post the
drawdown date. All warrants have been exercised by RnD Funding as follows:
Warrant Amount
12,666,000
8,373,199
14,850,000
35,889,199
Exercise Price
$0.03
$0.03
$0.03
Exercise Date
18/11/21
15/11/22
27/06/23
Under the 16 May 2022 funding agreement with RnD Funding Pty Ltd, LMG has issued 80,000,001 warrants at
different strike prices and dates, as follows:
Warrant Amount
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
8,888,889
Exercise Price
$0.18
$0.18
$0.18
$0.24
$0.24
$0.24
$0.30
$0.30
$0.30
Expiry Date
31/03/25
30/06/25
30/09/25
31/12/25
31/03/26
30/06/26
30/09/26
31/12/26
30/06/27
Unlisted Warrants
Total warrants outstanding at beginning of the period
Granted in the period
Exercised in the period
Lapsed in the period
Outstanding at the end of the period
103,223,200
-
(23,223,199)
-
80,000,001
Warrant Reserves
The value of 80,000,001 unlisted warrants issued to RnD Funding Pty Ltd under the funding agreement of 16
May 2022 is $3,913,358 calculated by Black-Scholes method.
47
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
NOTE 16: LISTED OPTIONS
On 19 October 2021, the Company issued 120,000,001 fully paid ordinary shares at $0.025 per share to
sophisticated and professional investors pursuant to a private placement. In addition, the company issued
60,000,000 options, on a one for two free basis for each ordinary share issued under the placement. The
options were issued at an exercise price of 4 cents expiring on 26 October 2023.
On 19 November 2021, the Company issued 115,000,000 fully paid ordinary shares at $0.10 per share to
sophisticated and professional investors pursuant to a private placement. In addition, the company issued
28,750,000 options, on a one for four free basis for each ordinary share issued under the placement. The
options were issued at an exercise price of 4 cents expiring 26 October 2023.
On 19 November 2021, the Company issued 4,500,000 listed options to Peak Assets Management Pty Ltd
being part of the capital raising fees in lieu of cash payment. A further 25,500,000 listed options for the balance
of fees owing were issued in January 2022 after the AGM. The options were issued at an exercise price of 4
cents expiring 26 October 2023. The value of 30,000,000 options is $3,255,634 calculated by Black-Scholes
method.
As at 30 June 2023, twelve shareholders had exercised a total of 5,864,680 options at $0.04.
Listed Options
Total options outstanding at beginning of the period
Granted in the period
Exercised in the period
Lapsed in the period
Outstanding at the end of the period
116,866,817
-
(5,864,680)
-
111,002,137
Option Reserve
The value of 30,000,000 listed options issued on 19 November 2021 and in January 2022 to Peak Assets
Management is $3,255,634 calculated by Black-Scholes method.
NOTE 17. UNLISTED OPTIONS
On 24 May 2023, the Company issued 15,000,000 unlisted options at the exercise price of $0.10 expiring 23
May 2025 to the promoters of the 24 May 2023 private placement being part of the capital raising costs.
Unlisted Options
Total options outstanding at beginning of the period
Granted in the period
Exercised in the period
Lapsed in the period
Outstanding at the end of the period
-
15,000,000
-
-
15,000,000
Option Reserve
The value of 15,000,000 unlisted options to the promoters calculated by Black-Scholes method is $417,097.
48
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
NOTE 18: CASH FLOW INFORMATION
a. Reconciliation of Cash
Cash at the end of the financial year as shown in the statement of cash
flow is reconciled to items in the statement of financial position as follows:
Cash at Bank
b. Reconciliation of cash flow from operating activities to operating
loss after income tax:
Net loss
Profit / Loss Adjustment of non-cash items:
Depreciation of equipment & FFF
Depreciation of leases
Loss on disposal of assets
Interest expense to measure lease liabilities
Changes in Assets and Liabilities:
(Increase) in receivables and other assets
Increase in trade and other payables
Decrease in tax payable
Net Cash used in Operating Activities
c. Acquisition and Disposal of Entities
GROUP
2023
$
2022
$
6,891,733
15,246,819
(2,438,497)
(3,205,891)
9,896
45,389
-
2,682
7,406
191,647
895
(623)
(1,342,910)
1,062,281
(1,647,756)
(2,111,488)
1,378,990
-
(4,308,915)
(3,739,064)
There was no disposal of controlled entities during the 2023 or 2022 financial years. On 19 May 2023,
Latrobe Magnesium Sarawak Sdn Bhd, a 100% owned company, was registered in Malaysia.
d. Non-cash Financing and Investing Activities
2022-23
26-Apr-23
Fully Paid Ordinary Shares
15,000,000 shares issued at $0.07 to pay for financing costs
Increase in issued capital
Decrease in trade and other payables
$
1,050,000
1,050,000
1,050,000
24-May-23 Options
15,000,000 unlisted options issued at exercise price of $0.10 to pay
for capital raising costs, fair valued at $417,097, refer to Note 17
417,097
2021-22
14-Oct-21
8-Feb-22
30-Jun-22
Fully Paid Ordinary Shares
1,155,306 shares issued at $0.0277 to pay for transaction costs
22,500,000 shares issued at $0.10 to pay for 50% of the property
purchase price
6,917,191 shares issued at $0.0784 to pay for transaction costs
Oct-Nov 21
19-Nov-21
16-May-22
Increase in issued capital
Decrease in trade and other payables
Options and Warrants
88,750,000 listed options issued at $0.04 expiring 26-Oct-23 issued
under share placement
30,000,000 listed options issued at $0.04 expiring 23-Oct-23 to pay
capital raising costs, fair valued at $3,255,634. Refer to Note 16
80,000,001 unlisted warrants issued at various exercise prices
expiring at various dates to pay for financing costs, fair valued at
$3,913,358. Refer to Note 15.
31,976
2,250,000
517,500
2,799,476
2,799,476
3,255,634
3,913,358
49
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
NOTE 19: LOSS PER SHARE
GROUP
2023
2022
Reconciliation of loss to net loss:
(a) Basic and diluted loss per share
cents per share
(0.15)
(0.22)
(b) Loss used in the calculation of LPS
(c) Weighted average number of ordinary shares
outstanding during the year used in calculation of
basic and diluted LPS
$
(2,438,497)
(3,205,891)
share
1,627,382,205
1,490,473,832
There were 80,000,001 unissued shares under warrants at 30 June 2023 (2022: 103,223,200) and 126,002,137
unissued shares under options at 30 June 2023 (2022: 116,866,817). The warrants and options issued have
not been considered for the diluted LPS calculation as their effect would be anti-dilutive.
NOTE 20: CONTROLLED ENTITIES
Country of
Incorporation
Percentage Owned
2022
2023
Parent Entity:
Latrobe Magnesium Limited
Subsidiaries of Latrobe Magnesium Limited
Money Management WA Pty Ltd
Gold Mines of WA Pty Ltd
Magnesium Investments Pty Ltd
Ecoengineers Pty Ltd
Latrobe Magnesium Sarawak SDN BHD
Australia
Australia
Australia
Australia
Australia
Malaysia
%
-
100
100
100
100
100
%
-
100
100
100
100
-
NOTE 21: SEGMENT REPORTING
AASB 8: Operating Segments requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate
resources to the segments and to assess their performance. As a result, following the adoption of AASB 8, the
Board of Directors believes there is only one operating segment and this is reflected in management’s reporting
processes.
AASB 8 requires a management approach under which segment information is presented on the same bases
as that used for internal reporting purposes. The Group consists of one business segment being the
development of its Latrobe magnesium project.
NOTE 22: RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions, no more favourable than
those available to other parties unless otherwise stated. Transactions with and amounts receivable from and
payable to Directors of related parties or their director related entities which:
(i)
occur within a normal employee, customer or supplier relationship on terms and conditions no more
favourable than those which it is reasonable to expect the entity would have adopted if dealing with the
director or director related entities at arms length in the same circumstances;
50
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
(ii)
do not have the potential to adversely affect decisions about the allocations of scarce resources made
by users of the financial report, or the discharge of accountability by the directors if disclosed in the
financial report only by general description; and
(iii)
are not trivial or domestic in nature;
must be excluded from the detailed disclosures required. Such transactions and amounts receivable or payable
shall be disclosed in the financial report by general description.
Other related entities
(i)
Director’s fees were paid to J S Murray Pty Ltd of which J S Murray
is a principal.
(iii) Director’s fees were paid to Stockholders Relation Pty Ltd of which
J R Lee is a principal.
(iv) Director’s fees were paid to Wandmaker Consultants Pty Ltd of
which M F Wandmaker is a principal
GROUP
2023
$
2022
$
80,000
62,500
70,000
68,404
50,000
12,500
Key Management Personnel compensation
Disclosure details relating to key management personnel including remuneration are provided in the
Remuneration Report contained within the Directors’ Report. Remuneration is entirely comprised of short-term
benefits (salaries and fees) totaling $691,667 (2022: $709,347).
NOTE 23: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There are no contingent liabilities or contingent assets for the year ended 30 June 2023 (2022: Nil).
NOTE 24: EMPLOYEE BENEFITS
Employees Share Acquisition Plan
The Shareholders approved at the 2021 AGM changes to the Group’s Share Acquisition Plan. The Plan
provides for eligible participants to purchase shares in the Company tax effectively through salary sacrifice and
for the Board to issue shares to its employees as long term incentive bonuses.
NOTE 25: EVENTS SUBSEQUENT TO REPORTING DATE
There are no significant events subsequent to reporting date which will affect the operations and state of affairs
of the Group.
NOTE 26: GOING CONCERN
For the year ended 30 June 2023, the Group reported a loss after tax of $2,438,497 (2022: $3,205,891) and
net cash outflows from operating activities of $4,308,915 (2022: outflows $3,739,064).
The Company secured a construction loan facility of $26 million with an approximately four year loan term
remaining. Part of the loan facility will be repaid from the 2023 R&D tax rebate of approximately $12.6 million.
The Group is able to pay its development plant costs and trade creditors from its cash on hand, further drawings
from its undrawn loans, Regional Development Grant and GST refunds.
51
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Once the demonstration plant is operating successfully the Group will consider either an equity raise, a sale
and leaseback of its property at 320 Tramway Road or other alternative sources of funding. The Group has a
number of funding options from both the State and Federal Governments as magnesium has critical minerals
status and in relation to assisting with the development of its Stage 2 and Stage 3 projects.
NOTE 27: PARENT ENTITY INFORMATION
As at, and throughout, the financial year ended 30 June 2023 the parent entity of the Group was Latrobe
Magnesium Limited.
Result of parent entity
Loss for the period
Other comprehensive income
Total comprehensive income for the period
Financial position of the financial entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Total equity of the parent entity comprising of
Issued capital
Reserves
Accumulated Losses
Total equity
Parent entity contingencies
The parent entity has no material contingent liabilities.
2023
$
2022
$
(2,438,497)
-
(2,438,497)
(3,205,891)
-
(3,205,891)
20,785,716
41,680,920
18,746,171
18,702,823
62,466,636
37,448,994
16,886,153
3,619,785
19,273,176
11,060,850
36,159,329
14,680,635
26,307,307
22,768,359
54,149,170
7,586,088
(35,427,951)
48,527,484
7,383,847
(33,142,972)
26,307,307
22,768,359
Parent entity capital commitments for the acquisition of property, plant or equipment.
The parent entity has has committed to $12.9 million of future capital expenditure on the Demonstration Plant
at 30 June 2023 to Mincore and other suppliers.
Parent entity guarantees in respect of the debts of the subsidiaries
The parent entity has entered into deed of guarantee with the effect that its subsidiaries guarantee the secured
loan detailed in Note 13, to Latrobe Magnesium Limited.
52
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
NOTE 28: AUDITOR’S REMUNERATION
Details of the amounts paid or payable to Nexia Sydney Audit Pty Limited or related entities for services provided
during the year are set out below.
Audit and Review of Financial Reports
Taxation and other services
GROUP
2023
$
68,000
10,000
78,000
2022
$
65,000
11,000
76,000
The Board of Directors ensure that the provision of the non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001.
53
Independent Auditor’s Report to the Members of Latrobe Magnesium Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Latrobe Magnesium 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, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
i) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the ‘auditor’s responsibilities for the audit of the financial report’ section
of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the
ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit
of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
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.
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.
54
Key audit matter
How our audit addressed the key audit matter
Our audit procedures included, amongst others:
▪ We assessed the acquired in-process research and
development costs against the requirements for
capitalisation contained in AASB 138 Intangible Assets;
▪ We assessed the capitalised demonstration plant costs
against the recognition requirements of AASB 116 Property,
Plant and Equipment and assessed the capitalised borrowing
costs component therein against the recognition
requirements of AASB 123 Borrowing Costs;
▪ We verified a sample of the capitalised demonstration plant
costs to supporting supplier invoices and checked the
calculations of eligible borrowing costs allocated to the
demonstration plant asset;
▪ We reviewed the company’s management prepared
development asset “value in use” impairment model and
tested the capital investment and chemical components
amounts included in the model for consistency with the
internal and external data sources for these amounts;
▪ We assessed and challenged management's key assumptions
and estimates used to determine the recoverable amount of
the assets, including those relating to output pricing, input
costs, growth assumptions and discount rates;
▪ We performed sensitivity analysis in relation to all the
significant inputs to assess whether the carrying value of the
Latrobe Valley Magnesium production project CGU exceeded
its recoverable amount;
▪ We compared the net assets of the Group to the Group’s
market capitalisation;
▪ We tested the mathematical accuracy of the underlying
‘value in-use’ calculations; and
▪ We assessed whether appropriate disclosure regarding
significant areas of uncertainty has been made in the
financial report.
Latrobe Valley Magnesium
Production Project
• Capitalised Development
Costs $6,951,093 - Note 10
• Capitalised Demonstration
Plant Costs $31,439,516 -
Note 8
• Land and Property
$3,132,240 - Note 11
Refer to notes 8, 10 and 11 to the
financial statements.
Included in the Group’s total assets
are capitalised development costs of
$6,951,093 in respect of the acquired
in-process research and development
cost in relation to extracting
magnesium from fly ash, capitalised
demonstration plant costs of
$31,439,516 and land and property
of $3,132,240. Together, these
assets comprise the cash generating
unit (CGU) of the Group’s Latrobe
Valley Magnesium production project
as identified in Note 10. The Group’s
accounting policy in respect of
capitalised development costs is
outlined in note 1(e), in respect of
property, plant and equipment is
outlined in note 1(d) and in respect
of borrowing costs is outlined in note
1(j).
This is a key audit matter because:
▪ The carrying value of the above
assets is highly material to the
financial statements,
representing approximately 66%
of the total assets of the Group;
and
▪
the determination of whether the
costs can be capitalised
respectively in accordance with
AASB 138 - Intangible Assets and
AASB 16 – Property, Plant and
Equipment and/or if an
55
Key audit matter
How our audit addressed the key audit matter
impairment charge is necessary
involves significant estimates and
judgments made by
management, including
estimating future cash flows.
Other information
The directors are responsible for the other information. The other information comprises the information
in Latrobe Magnesium Limited’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 the other
information we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibility 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 Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibility 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 Australian
Auditing and Assurance Standards Board website at:
www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This description forms part of our auditor’s
report.
56
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 19 of the directors’ Report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of Latrobe Magnesium 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.
Nexia Sydney Audit Pty Ltd
Stephen Fisher
Director
Dated: 27 September 2023
Sydney
57
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
ADDITIONAL INFORMATION
The following additional information is required by the Australian Securities Exchange Ltd in respect of listed
public companies only.
SHAREHOLDING
a.
Distribution of Shareholders as at 20 September 2023.
Range
Total holders
Units
% Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Total
248
615
1,256
3,615
1,569
7,303
95,006
2,262,417
10,271,497
149,547,934
1,565,253,767
1,727,430,621
0.01
0.13
0.59
8.66
90.61
100.00
b.
Unmarketable Parcels as at 20 September 2023.
Minimum Parcel Size
Holders
Units
Minimum $500.00 parcel at
$0.047 per unit
10,639
2,187
13,333,388
c.
Substantial Shareholders as at 20 September 2023.
No.
Shareholder Name
1 Rimotran Pty Ltd
13,665,986
0.79
HSBC Custody Nominees (Australia) Limited
13,547,252
0.78
RnD Funding Pty Limited
Mrs Carmela Adele Murray
Mrs Robyn Ann Lys
Mr John Charles Catterson + Mrs Margaret Catterson
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