LEPIDICO LTD
ACN 008 894 442
ANNUAL REPORT 2023
Annual Financial Report
Table Of Contents
Corporate Directory ....................................................................................................... 3
Directors’ Report ........................................................................................................... 4
Auditors Independence Declaration........................................................................... 30
Consolidated Statement of Profit and Loss and Other Comprehensive Income ... 31
Consolidated Statement of Financial Position .......................................................... 32
Consolidated Statement of Changes in Equity ......................................................... 33
Consolidated Statement of Cash Flow ....................................................................... 34
Notes to the Financial Statements ............................................................................. 35
Directors’ Declaration .................................................................................................. 67
Independent Auditor’s Report .................................................................................... 68
Additional ASX Information ........................................................................................ 72
2
Corporate Directory
Directors
Gary Johnson (Non-Executive Chair)
Julian (Joe) Walsh (Managing Director)
Mark Rodda (Non-Executive Director)
Cynthia Thomas (Non-Executive Director)
Joint Company Secretaries
Alex Neuling
Shontel Norgate
Registered Office
Suite 2, 680 Murray Street
West Perth, WA, Australia, 6005
Telephone: (08) 9363 7800
Facsimile: (08) 9363 7801
Email:
info@lepidico.com
Principal Place of Business
23 Belmont Avenue
Belmont, WA, Australia, 6104
PO Box 536 West Perth WA 6872
Website: www.lepidico.com
Country of Incorporation
Australia
Annual Financial Report
Auditors
Moore Australia Audit (WA)
Level 15, Exchange Tower
2 The Esplanade
PERTH WA 6000
Telephone: (08) 9225 5355
(08) 9225 6181
Facsimile:
Share Registry
Automic Pty Ltd
Level 2, 267 St Georges Terrace
Perth WA 6000
GPO Box 5193 Sydney NSW 2001
Telephone: 1300 288 664
Email:
hello@automicgroup.com.au
Home Exchange
Australian Securities Exchange Limited
Central Park,
152-158 St Georges Terrace,
PERTH WA 6000
ASX Code: LPD, LPDO
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Annual Financial Report
Directors’ Report
The Directors of Lepidico Ltd (Directors) present their report on the Consolidated Entity consisting of
Lepidico Ltd (the Company or Lepidico) and the entities it controlled at the end of, or during, the year
ended 30 June 2023 (Consolidated Entity or Group).
DIRECTORS
The names of the Directors in office and at any time during, or since the end of, the year are:
Non-executive Chair
Mr Gary Johnson
Managing Director
Mr Joe Walsh
Mr Mark Rodda
Non-executive Director
Ms Cynthia Thomas Non-executive Director
Directors have been in office since the start of the financial year to the date of this report.
CURRENT DIRECTORS
Mr Gary Johnson - Chair (Non-executive)
Qualifications - MAusIMM, MTMS, MAICD
Mr Johnson has over 40 years ’experience in the mining industry as a metallurgist, manager, owner,
director and managing director possessing broad technical and practical experience of the workings and
strategies required by successful mining companies. Gary is a principal and part owner of Strategic
Metallurgy Pty Ltd, which specialises in high-level metallurgical strategic consulting and the creation of
new technology businesses. He has been a Director of the Company since 9 June 2016.
Special responsibilities:
Member of Audit Committee
Member of the Remuneration and Nomination Committee
Member of Sustainability and Risk Committee
Other Current Directorships of listed public companies:
Director of Antipa Minerals Ltd (ASX listed)
Former Directorships of listed public companies in the last 3 years:
Director of St-Georges Platinum and Base Metals Ltd (CSE listed Company)
Mr Julian “Joe” Walsh - Managing Director (Executive)
Qualifications - BEng, MSc
Mr Walsh is a resources industry executive, mining engineer and geophysicist with over 35 years’
experience working for mining and exploration companies, and investment banks in mining related roles.
Joe joined Lepidico as Managing Director in 2016. Prior to this he was the General Manager Corporate
Development with PanAust Ltd and was instrumental in the evolution of the company from an explorer in
2004 to a US$2+billion, ASX 100 multi-mine copper and gold company. Joe has extensive equity capital
market experience and has been involved with the technical and economic evaluation of many mining
assets and companies around the world.
Special responsibilities:
Member of the Diversity Committee
Other Current Directorships of listed public companies:
None
Former Directorships of listed public companies in the last 3 years:
None
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Annual Financial Report
Mr Mark Rodda - Non-Executive Director
Qualifications - BA, LLB
Mr Rodda is a lawyer, consultant and public company director with over 25 years’ private practice, in-
house legal, company secretarial and corporate experience. Mr Rodda has considerable practical
experience in the management of local and international mergers and acquisitions, divestments,
exploration and project joint ventures, strategic alliances, corporate and project financing transactions
and corporate restructuring initiatives. Prior to its 2007 takeover by Norilsk Nickel for in excess of US$6
billion, Mark held the position of General Counsel and Corporate Secretary for LionOre Mining
International Ltd, a company with operations in Australia and Africa and listings on the TSX, LSE and
ASX.
Special responsibilities:
Chair of the Remuneration and Nomination Committee
Chair of the Sustainability and Risk Committee
Member of Audit Committee
Member of the Diversity Committee
Other Current Directorships of listed public companies:
Director of Antipa Minerals Ltd
Former Directorships of listed public companies in the last 3 years:
None
Ms Cynthia Thomas – Non-Executive Director
Qualifications – B.Com, MBA
Ms Thomas has over 30 years’ of banking and mine finance experience, and is currently the Principal of
Conseil Advisory Services Inc. (Conseil), an independent financial advisory firm specialising in the natural
resource industry which she founded in 2000. Prior to founding Conseil, Cynthia worked with the Bank
investment banking
of Montreal, Scotiabank and ScotiaMcLeod
divisions. Cynthia holds a Bachelor of Commerce degree from the University of Toronto and a Masters
in Business Administration from the University of Western Ontario.
the corporate and
in
Special responsibilities:
Chair of Audit Committee
Chair of the Diversity Committee
Member of the Remuneration and Nomination Committee
Member of the Sustainability and Risk Committee
Other Current Directorships of listed public companies:
None
Former Directorships of listed public companies in the last 3 years:
Executive Chair of Victory Nickel Inc. (CSE listed) – resigned 26 July 2022
COMPANY SECRETARIES
Mr Alex Neuling
Qualifications: BSc, FCA (ICAEW), FCIS
Mr Neuling has extensive corporate and financial experience including as director, chief financial officer
and/or company secretary of various ASX-listed companies in the mineral exploration, mining, oil and
gas and other sectors. Alex is principal of Erasmus Consulting, which provides company secretarial and
financial management consultancy services to ASX-listed companies. In addition to his professional
qualifications, Alex also holds a degree in Chemistry from the University of Leeds in the United Kingdom.
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Annual Financial Report
Ms Shontel Norgate
Qualifications: CA, AGIA ACIS
Ms Norgate is a Chartered Accountant with over 25 years’ experience in the resources industry including
debt and equity finance, financial reporting, project management, corporate governance, commercial
negotiations and business analysis experience in finance and administration. Prior to joining Lepidico
Shontel was CFO for ten years with TSX-listed resources company, Nautilus Minerals Inc. Prior to her
appointment at Nautilus Minerals, Ms Norgate was Financial Controller with Macarthur Coal Ltd and
Southern Pacific Petroleum NL, both listed on the ASX and commenced her career as an auditor with
Price Waterhouse (now PricewaterhouseCoopers)
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors held during the year
ended 30 June 2023, and the number of meetings attended by each director.
Full Board Meetings
Audit & Risk
Committee
Meetings
Nomination &
Remuneration
Committee
Meetings
Diversity
Committee
Meetings
No.
eligible
to attend
5
5
5
5
No.
attended
5
5
5
5
No.
eligible
to attend
2
0
2
2
No.
attended
2
0
2
2
No.
eligible
to attend
2
0
2
2
No.
attended
2
0
2
2
No.
eligible
to attend
0
2
2
2
No.
attended
0
2
2
2
Mr Gary Johnson
Mr Joe Walsh
Mr Mark Rodda
Ms Cynthia Thomas
INFORMATION ON DIRECTORS’ INTERESTS IN SECURITIES OF LEPIDICO
As at the date of this report, the notifiable interests held directly and through related bodies corporate or
associates of the Directors in shares and options of Lepidico are:
Mr Gary Johnson
Mr Joe Walsh
Mr Mark Rodda
Ms Cynthia Thomas
Number of fully
paid ordinary
shares
340,789,197
37,215,430
-
-
Number of
options
25,165,436
45,873,429
22,500,000
22,500,000
378,004,627
116,038,865
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
All statements other than statements of historical fact included in this report including, without limitation,
statements regarding future plans and objectives of Lepidico, are forward-looking statements. Forward-
looking statements can be identified by words such as "anticipate", "believe", "could", "estimate", "expect",
"future", "intend", "may", "opportunity", "plan", "potential", "project", "seek", "will" and other similar words
that involve risks and uncertainties. These statements are based on an assessment of present economic
and operating conditions, and on a number of assumptions regarding future events and actions that are
expected to take place. Such forward-looking statements are not guarantees of future performance and
involve known and unknown risks, uncertainties, assumptions and other important factors, many of which
are beyond the control of the Company, its directors and management of Lepidico that could cause
Lepidico’s actual results to differ materially from the results expressed or anticipated in these statements.
6
The Company cannot and does not give any assurance that neither the results, performance nor
achievements expressed or implied by the forward-looking statements contained in this release will
actually occur and investors are cautioned not to place any reliance on these forward-looking statements.
Lepidico does not undertake to update or revise forward-looking statements, or to publish prospective
financial information in the future, regardless of whether new information, future events or any other
factors affect the information contained in this release, except where required by applicable law and stock
exchange listing requirements.
Annual Financial Report
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the financial year were mineral exploration and
development, and development of proprietary technologies, that include: L-Max®, LOH-Max® and
caesium-rubidium extraction.
OBJECTIVE
The Group’s strategic objective is to fast track the business to free cash flow generation, demonstrate the
commercial viability of L-Max®/LOH-Max® and become a sustainable, globally significant alkali metals
chemical producer with industry leading ESG credentials and technologies.
To meet this objective, the following targets have been set for the 2024 financial years and beyond.
1. Sustainability: industry leading sustainability practices and performance with defined targets (climate
change focus); transparent mature reporter benchmarked against industry peers.
2. Production: transition the Phase 1 Project to full construction with installed capacity of 5,700tpa
(4,500tpa nominal) lithium hydroxide production.
3. Mineral Resources: expand Ore Reserves to support a Phase 1 Project life of 20 years. Secure
additional resources to support a Phase 2 chemical plant through exploration and/or third-party
concentrate feed.
4. Business Development: complete the Phase 2 chemical plant scoping study; develop third-party
lithium mica concentrate sources; process technology improvements; and develop markets for new
products of Rb, Cs, silica and gypsum.
5. Systems: fit for purpose systems, standard/procedure development ahead of growth requirements and
governance compliance with ASX
6. Stakeholders: establish a stakeholder group to deliver on strategy and maintain relationships.
7. Shareholders: transparent communication, institutional base development, with a total shareholder
return in the top quartile of the S&P/ASX 300 Metals and Mining Index.
8. People: employees and contractors are appropriately skilled, diverse, motivated and aligned with
Group Vision & Values so as to be empowered to be creative, add value, deliver on the corporate
strategy and thereby excel.
SUMMARY REVIEW OF OPERATIONS
For the financial year ending 30 June 2023 the Group recorded a net loss after tax of $3,604,123 (2022:
net loss after tax $7,941,340 ) and a net cash out flow from operations of $6,761,229 (2022: net cash out
flow $5,482,547).
The net assets of the Group increased to $92,458,261 at 30 June 2023 (2022: $76,441,558 ).
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Annual Financial Report
PHASE 1 PROJECT DEVELOPMENT
Updated and Improved Phase 1 Project Economics
Control estimates and schedules for both the Abu Dhabi chemical plant and the Karibib concentrator were
announced in November 2022 on completion of Front End Engineering and Design (FEED) works for
both plants.
Phase 1 is based on an integrated mine, concentrator and chemical plant development that collectively
has compelling investment fundamentals. The updated capital cost estimate including contingency for
the chemical plant is US$203M (million) and for the concentrator US$63M for a combined US$266M,
which reflects the considerable cost inflation since the previous estimates for the Definitive Feasibility
Study (DFS) of May 2020. Importantly, overall Project economics have improved with substantially higher
long-term lithium price forecasts of US$22,840/t real (Benchmark Mineral Intelligence September 2022)
more than offsetting the effects of inflation, and scope changes that reduce operating risk and improve
maintainability.
The Base Case unlevered NPV8% for the Project has increased from US$221M in the DFS to US$530M
(A$791M), a rise of 140%. The Internal Rate of Return (IRR) has also increased from 31% in the DFS to
42%1.
Chemical Conversion Plant (100%), Abu Dhabi
The Phase 1 chemical conversion plant is largely permitted with the key environmental approval to
construct granted. The Musataha land lease agreement was signed in October 2021 with Abu Dhabi
Ports (ADP). The Musataha secures the 57,000m2 site for the chemical plant for an initial term of 25
years.
The plant site is located within the Khalifa Economic Industrial Zone Abu Dhabi (KEZAD), a major
industrial free zone, which allows full foreign business ownership as well as tax exemptions on imports
and exports. Under the Musataha Agreement the off-site infrastructure is being delivered by ADP (the
parent company of KEZAD) to the site boundary, which includes natural gas, 11kV power, potable water,
sewer services, access roads and drainage. Khalifa Port, the deep-water container terminal where
concentrate from Walvis Bay, Namibia will be imported is just 15km by road from the plant site.
Chemical plant capacity remains unchanged at 56,700tpa (dry basis) of lithium mica/amblygonite
concentrate for production capacity of 5,600tpa of lithium hydroxide. Concentrate feed grade is predicted
to range from 2.5% to 3.9% Li2O over the project life for average annual lithium hydroxide output of 4,350t.
The significant excess process capacity in the impurity removal and lithium recovery circuits, in particular
provides opportunity for optimisation and higher output once in production. The relatively modest size of
Phase 1 for a lithium chemical converter along with its high level of installed capacity are important risk
mitigants, as development and operating risks tend to increase exponentially with scale.
On 31 January 2023 the Company entered into a binding agreement with Interacid Trading S.A.
(“Interacid”) for the supply of sulphuric acid for the Phase 1 chemical plant. Interacid is a 100% subsidiary
of Sumitomo Corporation and has provided marketing, logistics and terminal services for sulphuric acid
for nearly 50 years. Under the agreement Interacid will supply the Company’s high specification sulphuric
acid for an initial period of three years.
Stage 2 EPCM works, which commenced in December 2022 following the completion of FEED were
advanced, by the end of April 2023, to the point where significant financial commitments were required
for the major mechanical equipment. As a result, chemical plant EPCM activities were suspended in May
2023 and are planned to resume once full development funding is secured.
Detailed Planning Approval has been granted to Lepidico Chemicals Manufacturing Ltd (Lepidico Ltd’s
UAE entity) by ADP for the Phase 1 lithium chemical plant in the UAE. This approval now allows building
Lepidico ASX announcement dated 22 November 2022: Phase 1 Economics Updated and Improved
1
8
Annual Financial Report
permit applications to be made. Detailed design for non-process infrastructure has been completed and
is ready for inclusion in the first building permit application. Process plant detailed design will be staged
as major mechanical equipment vendors complete their respective workstreams once finance is in place,
allowing the remaining building permit applications to be made.
Detailed Planning Approval also allows an application to be made to Abu Dhabi Civil Defence Authority
for chemical plant safety and security systems, most notably fire protection, firefighting equipment,
devices and materials.
A collaboration started in June 2023 with the preferred crystalliser supplier to evaluate the manufacture
in Abu Dhabi of the five units required for Phase 1. Crystalliser fabrication is currently highly concentrated
in China. However, the UAE is seen as an attractive alternate location for affordable manufacture with
shorter delivery times and lower logistics costs, including for delivery into Europe.
Karibib Project (80%), Namibia
As previously advised, Karibib is fully permitted for the re-development of two open pit mines at Rubicon
and Helikon 1, which will feed lithium mica ore to a central mineral concentrator that employs conventional
flotation technology. Awarded Project permits include the Mining Licence (ML204), water extraction
permit, Environmental Compliance Certificate (ECC), Accessory Works Permit and a separate ECC
awarded for the overhead power transmission line.
The open pit mines at Rubicon and Helikon 1 along with associated haul road and water infrastructure
are already established, with minimal works required to resume mining.
The mineral concentrator, to be built adjacent to Rubicon will use conventional crushing, grinding,
desliming and froth flotation processes followed by dewatering of both concentrate and rejects streams.
The lithium principally occurs in lepidolite, amblygonite and lithian muscovite, although any zinnwaldite
will also be recovered through the process.
The concentrator has been designed to process 333,000tpa (dry basis) of ore for the first four years
(“Stage 1”) and 541,000tpa (dry basis) from Year 5 of production (“Stage 2”). Stage 2 requires the addition
of a second smaller ball mill, some reconfiguration of the flotation circuit and the installation of a second
filter. The plant will be debottlenecked in Year 7 to cater for a declining head grade.
Upgraded Mineral Resources have been completed for Helikon 4 and Rubicon stockpile material with
inaugural Ore Reserve estimates completed, that can extend the Phase 1 operating life to over 19 years
(see Exploration & Resource Development below). A revised mining schedule was developed that reflects
a reduction in the life of mine strip ratio. Geotechnical assessment of the Helikon 4 open pit north wall
has commenced, with the objective of maximising the wall angle due to its proximity to the Mining Licence
boundary and reducing the strip ratio. This work is planned to complete by September 2023. A final pit
design will be undertaken once all Mineral Resource development work is completed at Helikon 2-5,
allowing a revised Phase 1 mine schedule to be developed.
The concentrator FEED was finalised in June 2022. Subsequently detailed design and engineering were
advanced to the stage where placing orders for long-lead mechanical equipment came onto the
development critical path. EPCM activities will resume once project finance is secured.
Proposals received (that include life cycle cost estimates) for supply of mining equipment for both the
pre-production pioneering and production mining fleet. At this stage electric vehicle options are not
supported but are planned to be evaluated when available in this location.
Increased understanding of the Rubicon stockpiles from the Ore Reserve estimation process has led to
a review of the previously beneficiated higher grade dumps as an export product. Analysis based on
market prices for lithium mica mineral concentrate over the past 12-month support this.
9
Annual Financial Report
A commodity trading company was appointed early in the quarter to arrange the sale and export of the
previously processed and beneficiated stockpiles at Rubicon. A shipment of this material was exported
in 2018. These stockpiles were brought into Probable Ore Reserves in February 2023, which provided
an improved understanding of their tonnage, grade and associated economics. A logistics study has been
completed for the transfer of stockpile material to the port at Walvis Bay.
Sustainability
During the year the Company completed the development of new Group Standards which adhere to
the International Finance Corporation (IFC), World Bank, DFC and IRMA standards/requirements.
These Standards are required to secure lending from DFC for the Phase 1 development at Karibib,
Lepidico has continued to work closely with the DFC environment and social team to meet its
requirements, which include the Environment and Social Action Plan.
The Company is developing a Sustainability and Climate Change Strategy that will include publicly
stated targets and a screening of the UN Guiding Principles on Business and Human Rights, which
are expected to be finalised during the second half of 2023. IBIS Consulting, a leading sustainability
consultancy, was appointed to support this Strategy work. IBIS has completed numerous
Sustainability/ESG-related projects around the world including in Africa and the Middle East.
In addition to the Company’s existing commitments to people and planet, project stakeholders –
which include finance providers – increasingly want to see an established climate strategy and
roadmap, as well as compliance with human rights guiding principles. Lepidico aims to showcase its
Climate Strategy, along with its industry-leading sustainability credentials at the UN Climate Change
Conference, COP28, being hosted year in Dubai in November/December 2023. Lepidico’s Abu
Dhabi commercial-scale lithium chemical plant will be the first of its kind in the Middle East and
represents an enabler for further development initiatives in the electric vehicle supply chain within
the UAE. Lepidico continues to work closely with its advisors and Abu Dhabi state-owned
organisations for a strategic collaboration to develop its L-Max® lithium conversion plant.
During the year, the Board established a Sustainability & Risk Committee comprising three non-
executive Directors, with a minimum of two independent Directors. The formation of the
Sustainability & Risk Committee demonstrates Lepidico’s commitment to responsible business
conduct and represents an important step in building the Company’s Sustainability governance
framework.
In addition, the Company implemented Speeki software, which can be accessed on the Company’s
website, to support Lepidico’s Whistleblower Policy.
Corporate Social Responsibility activities centred on an emergency maternity room for the
community of Otjimbingwe, which was completed in June 2023 and handed over to the town in a
ceremony in early July. The ceremony was attended by the Governor of the Erongo Region, the
Executive Director for the Ministry of Health & Social Services, the Mayor of Karibib and the Chief of
the Tsoaxudaman Traditional Authority as well as other dignitaries. Discussions have commenced
with the Ministry of Health & Social Services to increase the utilisation of this new facility by offering
it for pre and post-natal care.
The fire and water trailers acquired for the Karibib Operations continued to provide a valuable service
to local farmers to contain seasonal scrub fires.
Product Marketing
Lepidico signed a binding offtake agreement in December 2021 with Traxys Europe S.A. (“Traxys”),
where Traxys provides sales-marketing, logistics and trade finance for 100% of lithium hydroxide
manufactured during the first 7 years of operation or 35,000t in total. In addition, Traxys is acting as
agent for 100% of the production of caesium sulphate solution from the KEZAD chemical plant.
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Annual Financial Report
Competition is intensifying for battery-grade lithium chemicals with industry-leading ESG credentials,
evidenced by direct discussions with mid-stream and downstream participants in the EV supply
chain. Further confidentiality agreements were entered into for lithium chemical supply during the
year. The Company continues to work closely with Traxys to place the lithium hydroxide produced
from Phase 1 on mutually beneficial terms that are sustainable, and effectively manage price risk for
supplier and consumer throughout the lithium price cycle.
All forecast annual production of caesium from Phase 1 is now under either a letter of intent or has
key terms agreed and/or a supply agreement being drafted. Caesium demand has grown to the point
where upper volume limits have needed to be reduced in some instances. It is also encouraging that
demand is starting to be seen for the supply of rubidium chemicals in commercial quantities. As
previously advised, markets for the “Critical Minerals” caesium and rubidium are tightly controlled
and opaque, with little data available on supply/demand and pricing. Lepidico is also limited by
confidentiality agreements with third parties as to the information it can disclose pertaining to these
markets. However, it is evident that caesium prices have appreciated significantly over the past two
years as supply has tightened and the market will benefit from Lepidico providing a new source of
supply.
All annual production of the Phase 1 chemical plant gypsum-rich residue is covered by letters of
intent for commercial use in the construction industry. However, as noted by the Food and Agriculture
Organization (FAO), soil amendments [such as gypsum] can contribute to carbon sequestration,
thereby mitigating climate change. Additionally, a paper published in the journal Nature suggested
that better land management, including the use of amendments like gypsum, could contribute 30%
of the total global mitigation needed by 2050.
The International Center for Biosaline Agriculture (ICBA), a Dubai-based not-for-profit applied
agricultural research centre, recently completed a phase of agricultural growth trials using L-
Max/LOH-Max synthetic gypsum from the 2022 pilot plant trials. ICBA advised, “The gypsum
byproduct project has shown significant promise as a soil amendment for production across a variety
of crops including pearl millet, wheat, and squash. According to the study, the use of low-grade
gypsum as a soil amendment had a positive impact on plant growth, above-ground biomass, and
grain yield. These outcomes were observed in both fresh and saline water conditions, suggesting
that gypsum is a versatile amendment that can enhance crop productivity in diverse environments.
The successful implementation of this gypsum byproduct will require further research, quality control
measures, and strategic collaborations, potentially making a substantial contribution to the
agriculture industry and environmental sustainability.” Further work is now being considered.
Phase 2 Plant Scoping Study
A 25-hectare site has been identified in Walvis Bay, Namibia for a Phase 2 L-Max/LOH-Max chemical
plant that can accommodate a capacity of up to 20,000tpa lithium carbonate equivalent coupled with
an associated sulphuric acid plant. Work continues to secure cost estimates for key services and
utilities to this site.
Site selection for a Phase 2 chemical plant in the United States continued with the 66 submissions
received across 6 States reduced to a short list of 7. A more detailed assessment is now being
undertaken by an external consultant with the selection of a preferred site, as well as a contingency
site planned by the end of September 2023. Along with the Feasibility design for the Phase 1
chemical plant, the selection of a preferred site could support a domestic debt funding application
via the Department of Energy Loans Programme.
Unsolicited enquiries continue to be received regards Lepidico’s process technologies, as new
lithium mica occurrences are identified by third-parties, which could lead to other jurisdictions being
considered for future L Max plants.
11
Two throughput scenarios are envisaged, a sister plant to Phase 1 with a nominal output capacity of
5,700tpa lithium hydroxide and a larger nominal 20,000tpa facility. The former is being evaluated
based on concentrate feed solely from Karibib, while the larger facility will rely on lithium mica
concentrate feed from third-party concentrators as well. To this end, additional sources of
concentrate from third-party lithium mica mines continue to be evaluated, which could support the
development of a global market for lithium mica concentrates, Lepidico’s ultimate objective.
Annual Financial Report
EXPLORATION2
Karibib Project (80%)
Lepidico is pursuing a strategy of maximising the value of its exploration properties by implementing
programs targeted at a range of metals that the Namibian properties are prospective for, including
lithium, caesium, rubidium, tantalum, gold, copper and tungsten. Work programs span a range of
activities, from regional exploration assessing conceptual targets to Mineral Resource development.
The near-term objectives of this work are to extend the operating life of the Phase 1 Project to over
The information in this report that relates to the Helikon 4 and Rubicon Stockpiles Mineral Resource estimates is extracted from an ASX
Announcement dated 30 January 2023 (“Helikon 4 & Rubicon Stockpiles Upgrade to Mineral Resources”). The Mineral Resource
2
estimates were completed by Matt Bampton of Cube Consulting Pty Ltd in accordance with the guidelines of the JORC Code (2012). The
Company confirms that it is not aware of any new information or data that materially affects the information included in the original market
announcement and that all material assumptions and technical parameters underpinning the Mineral Resource estimates in the relevant
market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the
Competent Person’s findings are represented have not been materially modified from the original market announcement.
The information in this report that relates to the Helikon 2, Helikon 3 and Helikon 5 Mineral Resource estimates is extracted from an ASX
Announcement dated 16 July 2019 (“Drilling starts at the Karibib Lithium Project”). The Mineral Resource estimates were completed by
Jeremy Whitley of the MSA Group (Pty) Ltd in accordance with the guidelines of the JORC Code (2012). The Company confirms that it is
not aware of any new information or data that materially affects the information included in the original market announcement and that all
material assumptions and technical parameters underpinning the Mineral Resource estimates in the relevant market announcement
continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s
findings are represented have not been materially modified from the original market announcement.
The information in this report that relates to the Rubicon and Helikon 1 Mineral Resource estimates is extracted from an ASX
Announcement dated 30 January 2020 (“Updated Mineral Resource Estimates for Helikon 1 and Rubicon”). The Mineral Resource
estimates were completed by Vanessa O’Toole of Snowden Mining Consultants Pty Ltd in accordance with the guidelines of the JORC
Code (2012). The Company confirms that it is not aware of any new information or data that materially affects the information included in
the original market announcement and that all material assumptions and technical parameters underpinning the Mineral Resource
estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form
and context in which the Competent Person’s findings are represented have not been materially modified from the original market
announcement.
The information in this report that relates to the Mineral Resource estimates for the Rubicon Tailings and the surface stockpiles at Helikon
1, Helikon 2 and Helikon 3 is extracted from an ASX Announcement dated 12 March 2021 (“Karibib Mineral Resource Expanded”). The
Mineral Resource estimates were completed by Stephen Godfrey of Resource Evaluation Services in accordance with the guidelines of
the JORC Code (2012). The Company confirms that it is not aware of any new information or data that materially affects the information
included in the original market announcement and that all material assumptions and technical parameters underpinning the Mineral
Resource estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms
that the form and context in which the Competent Person’s findings are represented have not been materially modified from the original
market announcement.
The information in this report that relates to the Rubicon, Helikon 1 Helikon 4, Rubicon Tailings and Rubicon Stockpiles Ore Reserves
estimates is based on information compiled by John Wyche of Australian Mine Design and Development Pty Ltd, who is a Fellow of the
Australian Institute of Mining and Metallurgy, and has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Wyche consents to the inclusion in
the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Exploration Results is based on information compiled by Mr Tom Dukovcic, who is an employee
of the Company and a member of the Australian Institute of Geoscientists and who has sufficient experience relevant to the styles of
mineralisation and the types of deposit under consideration, and to the activity that has been undertaken, to qualify as a Competent Person
as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.” Mr
Dukovcic consents to the inclusion in this report of information compiled by him in the form and context in which it appears.
Previously Reported Results
Reference in this report is made to the Company’s ASX announcements dated 22 November 2022 (“Phase 1 Economics Updated &
Improved”), 30 January 2023 (“Helikon 4 & Rubicon Stockpiles Upgrade to Mineral Resources”) and 7 March 2023 (“Replacement
Announcement – Helikon 4 Ore Reserve”). Other than as disclosed in those announcements, the Company confirms it is not aware of any
new information or data that materially affect the information in those announcements.
12
Annual Financial Report
20 years, expand the Resource base to support the Phase 2 Scoping Study and evaluate the Karibib
licences for their gold potential.
Mineral Resource development
Over the course of the year Lepidico completed a series of work programs at the Helikon 4 pegmatite
and over the surface stockpiles at the historical Rubicon mine, to enable the reclassification of
Inferred Resources as Indicated Resources, as reported on 30 January 2023 (“Helikon 4 & Rubicon
Stockpiles Upgrade to Mineral Resources”).
Lepidico engaged Cube Consulting Pty Ltd (“Cube”) to update the Mineral Resource estimates
(“MRE”) based on this work at Helikon 4 and at Rubicon. The estimations are reported in accordance
with the requirements of the JORC Code (2012) and were completed between October 2022 and
December 2022 (Tables 1 & 2). The Mineral Resource Estimate Report prepared by Cube is dated
31 December 2022 (reported to ASX on 30 January 2023) and is an update to previous MRE work
conducted in 2018 by the MSA Group of South Africa (Helikon 4) and in 2021 by Resource Evaluation
Services (Rubicon stockpiles).
Table 1. Mineral Resource Estimate for Helikon 4 (0.15% Li2O cut-off); effective date 31 December 2022
Category
Domain
INDICATED
Main Pegmatite
Lepidolite Zones
HW Pegmatite
SUBTOTAL INDICATED
INFERRED
Main Pegmatite
Lepidolite Zones
SUBTOTAL - INFERRED
TOTAL
Tonnes
(Mt)
1.06
0.20
0.04
1.31
0.20
0.08
0.28
1.59
Li2O
(%)
0.35
1.06
0.24
0.46
0.37
0.96
0.54
0.47
Cs
(ppm)
145
426
85
187
128
285
174
184
K
(%)
1.31
2.33
1.13
1.47
1.51
2.16
1.70
1.51
Rb
(ppm)
1,469
4,356
926
1,898
1,570
3,362
2,087
1,932
Ta
(ppm)
42
114
27
53
35
79
48
52
Table 2. Rubicon Stockpiles Mineral Resource Estimate (0% Li2O cut-off); effective date 31 December 2022
Tonnes
(Mt)
Rb
(ppm)
Cs
(ppm)
Ta
(ppm)
Li2O
(%)
K (%)
Stockpile
Dump A (sorted reject; >60 mm)
Dump B (screened undersize)
Dumps C-T (screened undersize)
Dumps 1-36 (sorted product; >60 mm)
Category
IND
IND
IND
IND
Total
0.10
0.07
0.08
0.02
0.27
0.62
0.90
0.96
1.38
0.86
388
491
371
464
415
2.05
2.19
2.18
3.93
2.29
2,592
2,484
2,548
6,164
2,863
52
61
66
107
63
Of the 1.31Mt grading 0.46% Li2O in Indicated Mineral Resource at Helikon 4 just over 62% of the
tonnes fall within the current pit design and thereby convert into Probable Ore Reserves.
Ore Reserves at Karibib were updated during the quarter, with 1.16Mt @ 0.62% Li2O into Probable
Reserves (Table 3) notionally added to the Phase 1 Project from Helikon 4 and the Rubicon
stockpiles, for a total Proved and Probable inventory of 9.43Mt @ 0.43% Li2O, which supports an
operating life of 19 years. The estimate was prepared by Australian Mine Design and Development
Pty Ltd (AMDAD), as reported on 7 March 2023. The estimation work was reported in accordance
with the requirements of the JORC Code (2012).
13
Table 3. Karibib Project Ore Reserve Estimate
Annual Financial Report
Pit
Rubicon Pit
Proved
Probable
Pit Total
Waste
Waste:Ore Ratio
Helikon 1 Pit
Proved
Probable
Pit Total
Waste
Waste:Ore Ratio
Helikon 4 Pit
Proved
Probable
Pit Total
Waste
Waste:Ore Ratio
Rubicon Stockpiles
Proved
Probable
Pit Total
Waste
Waste:Ore Ratio
Rubicon Tailings
Proved
Probable
Pit Total
Waste
Waste:Ore Ratio
Total Project
Proved
Probable
Total Ore
Waste
Waste:Ore Ratio
Mt
LiO2 %
Rb ppm
Cs ppm
Ta ppm
K %
0.50
0.33
0.37
0.58
0.46
0.51
0.00
0.51
0.51
0.00
0.86
0.86
0.00
0.99
0.99
0.52
0.40
0.43
2576
1866
2038
2234
2028
2113
0
2155
2155
0
2863
2863
0
4155
4155
2472
1982
2101
312
204
230
458
478
470
0
200
200
0
415
415
0
538
538
356
253
278
44
31
34
54
68
62
0
54
54
0
63
63
0
60
60
47
40
42
2.15
2.13
2.14
1.73
1.68
1.70
0.00
1.54
1.54
0.00
2.29
2.29
0.00
0.00
0.00
2.02
1.99
2.00
1.60
4.99
6.59
21.57
3.3
0.69
0.99
1.68
2.22
1.3
0.00
0.82
0.82
3.06
3.7
0.00
0.27
0.27
0.00
0.0
0.00
0.07
0.07
0.00
0.0
2.29
7.14
9.43
23.79
2.5
Notes:
1. The tonnes and grades shown in the Total’s rows are stated to a number of significant figures reflecting the confidence of
the estimate. The table may nevertheless show apparent inconsistencies between the sum of components and the
corresponding rounded totals.
2. The deposit has been assessed based on lithium grades in parts per million. For consistency of reporting with other projects
the Ore Reserve grades are presented in terms of Li2O %. 1% Li2O is equal to 4645 ppm Li.
During the year 13 diamond core holes were drilled at Helikon 3 for just over 520 m along with a
further diamond core program at Helikon 4 with 4 diamond twin holes and 4 large diameter
geotechnical core holes at Helikon 4, and 5 infill holes between Helikon 3 and 4. Assays were
received from 13 core holes drilled at Helikon 3.
14
Annual Financial Report
The mineralised pegmatite becomes thinner and fragmented with attenuated lithium grades at
Helikon 3, which lies to the east of Helikon 4. Similarly, the previously undrilled zone between
Helikon 3 and 4 confirmed this transition.
Results from the diamond twin holes at Helikon 4 demonstrate a good correlation of both width and
grade of intercepts with previous RC drilling.
Drilling will continue to test down-dip extensions of the Helikon 4 system and at Helikon 2, to the
east of Helikon 3.
Regional Exploration and Scout Drilling
Further exploration work in the area of former petalite mine workings discovered within EPL5439
identified a series of Lithium-Caesium-Tantalum (LCT) pegmatites ranging from 1m to 10m in
thickness. Land access has been granted from 1 September 2023 to drill these priority LCT
pegmatite targets, where lepidolite has been identified in the outcrop and in old lepidolite-petalite
workings. Similar to the Helikon 2-5 trend, these old workings are not continuous but extend over
approximately 1.5km of strike.
Another land access agreement has been entered into which allowed reconnaissance work to be
undertaken at another LCT target within EPL5439. Pegmatites were identified with evidence of
strong fractionation (K/Rb ratio < 50) but, to date, with low lithium and rubidium values. Follow up
work is planned.
Assays from a gold target within EPL5439 returned anomalous values for both gold and associated
tracer elements. Multi-element soil geochemistry (69 samples) suggests a weak anomaly associated
with the contact of calc-silicate rocks and country rock marble, which is a potential dilation zone for
the influx of hydrothermal fluids. Further geostatistical analysis is planned.
CORPORATE
Cash and Facilities
At 30 June 2023, the Company held $10.8 million in cash and cash equivalents.
During the year the Company entered into a Revolving Vehicle Financing Facility for N$2M
(approximately A$169,000) to acquire three vehicles for use by the Namibian based team.
COVID-19
The health, safety and wellbeing of our people, staff and contractors remain of paramount
importance. All active staff in Australia, Canada, Namibia and the UK are fully immunised against
COVID-19. Flexibility to work from home and adherence to local safety protocols remain in place in
the jurisdictions in which we operate.
Entitlement Offer
The Renounceable Entitlements Offer announced on 10 October 2022 (the “Offer”) was well
supported by the Company’s eligible directors, shareholders and new investors and closed
significantly oversubscribed.
The Offer raised $11.7 million (before costs) and the Company issued 650,719,123 new shares and
325,359,562 new options on 4 November 2022. The new options are listed under the ASX code
LPDO.
High demand, particularly from new institutional and professional investors resulted in subscriptions
being substantially scaled back and the Company placing a further 404,835,867 fully paid ordinary
shares at $0.018 with 202,418,533 attaching options to raise an additional $7,287,046 (“Placement”)
15
Annual Financial Report
for a total amount raised of $19.0 million. The Company issued the additional shares and options
under its existing Listing Rule 7.1 and 7.1A capacity.
Proceeds from the Offer were deployed to complete both Phase 1 chemical plant FEED and lender
due diligence, and to start critical path Stage 2 EPCM works for both the concentrator and chemical
plant. Funds from the Placement are intended to be used to fast-track detailed design and
engineering and other critical path works for the Phase 1 chemical plant in Abu Dhabi with the
objective of tightening up the implementation schedule. Placement funds will also be used for growth
initiatives including expanding the Mineral Resource base at Karibib to support the Phase 2 Project
scoping study.
Mahe Capital acted as Lead Manager and Underwriter.
Utilisation of Controlled Placement Agreement
On 10 October 2022, the Company successfully raised A$600,000 (after costs) through the set-off
of 23,100,000 collateral shares (Set-off Shares) previously issued to Acuity Capital under the
Controlled Placement Agreement (CPA) – see announcements on 23 December 2019, 19 April 2021
and 27 January 2022. The Set-Off Shares reduces the total collateral shares to 72,900,000 which
Acuity Capital is otherwise required to return to the Company upon termination of the CPA. The Set-
Off Shares have a deemed price of $0.026.
Options
On 11 October 2022, 75,000,0000 unlisted options were exercised with a strike price of $0.016
raising $1,200,000 in additional capital.
On 28 November 2022, 109,500,000 unlisted options with an exercise price of $0.026 expiring on
28 November 2025 were issued under the Company’s employee incentive scheme.
On 26 February 2023, 5,967,000 unlisted options with an exercise price of $0.35 expired out-of-the-
money.
On 19 June 2023, 478,038,825 listed options with an exercise price of $0.026 expired out-of-the-
money.
Project Finance
During the year the Independent Expert (IE) appointed by the US Government’s Development
Finance Corporation (DFC) provided an updated technical due diligence summary report, which
takes into account the pilot plant trials undertaken in 2022, completion of Phase 1 control estimates
and schedules, and the associated revised project economics. This report concludes the IEs due
diligence scope of work.
DFC’s legal counsel has completed its initial due diligence of the integrated Phase 1 Project and
now awaits details for the stakeholders that will provide funding for the Abu Dhabi chemical plant in
order to progress further.
In parallel, advisor Cygnum Capital (formerly Lion’s Head Global Partners) is advising Lepidico for a
strategic collaboration on the KEZAD chemical plant with an Abu Dhabi state owned organisation.
There continues to be strong support from KEZAD and its parent ADP for the Phase 1 lithium
conversion plant, which represents an enabler for further direct foreign investments in EV supply
chain developments within Abu Dhabi.
Cygnum Capital is also advancing discussions with other Development Finance Institutions,
commercial lenders and export credit agencies for debt finance for the Abu Dhabi chemical plant
16
Annual Financial Report
development, with credit approvals expected to be sought by lenders following completion of due
diligence.
Other strategic equity options are also being pursued under the advisory agreement with Jefferies,
which along with debt are intended to provide alternatives for a full Phase 1 funding package.
Patents & Trademarks
At 30 June 2023, the Company held granted patents for its L-Max® technology in the United States,
Europe, Japan and Australia, along with an Innovation Patent in Australia. National phase patent
applications are well advanced in the other key jurisdictions, with these processes expected to be
granted in 2023. The Company also has patents granted for its process technology for lithium
recovery from phosphate minerals (amblygonite) from the United States, Canada, Japan, Australia
and Europe.
The national and regional phase of the patent application process is progressing for LOH-Max® under
PCT/AU2020/050090. The S-Max® Australian patent applications are progressing under
2019262080 and 2019262079.
On 1 April 2022, the Company progressed with an international application under the Patent
Cooperation Treaty (PCT) and was allotted the number PCT/AU2022/050297 for the lithium
carbonate recovery process from a raw lithium hydroxide material.
On 27 September 2022, the International PCT application was filed for the preparation of Cs-Rb-K
alkali salt solutions from lithium mica mineral source material and allotted the number
PCT/AU2022/051154. The refining process has application in tailoring ternary materials for industrial
catalyst applications and the patent process is expected to continue into 2024.
During the year, the Company ceased its patent application process for the production of alkali metal
brines and other formates from an alum-intermediate.
Legal Dispute
On 31 May 2023, the Company learned that Jiangxi Jinhui Lithium Co., Ltd (Jinhui), a private Chinese
corporation filed a Notice of Arbitration under the Arbitration Rules of the Singapore International
Arbitration Centre (Notice).
The Notice is in connection with the offtake agreement between Desert Lion Energy (Pty) Ltd
(subsequently renamed Lepidico Chemicals Namibia (Pty) Ltd) and Jinhui dated 6 November 2017
and later amended on 13 February 2018, which provided for the sale of material located in the
stockpile at the Karibib project in Namibia and expired on 16 November 2022 (the Offtake
Agreement).
The Notice includes a claim in the sum of US$4.6 million, being the amount received from Jinhui in
accordance with the Offtake Agreement.
The Company has retained Singaporean, Canadian and Namibian litigation counsel and on 27 June
2023 submitted its Response to Notice of Arbitration in accordance with the Arbitration Rules of the
Singapore International Arbitration Centre (SIAC). The next steps in the matter include formal
appointment of each parties’ nominated arbitrators and the two appointed arbitrators agreeing a joint
nomination as the third arbitrator.
The Company believes that the arbitration is without merit and intends to vigorously defend itself.
17
Annual Financial Report
EXTERNAL FACTORS AND MATERIAL BUSINESS RISKS AFFECTING COMPANY RESULTS
The Company operates in an uncertain economic environment when trying to deliver results in
accordance with its strategic objectives. Its financial results are subject to various risks and uncertainties,
some which are outside the reasonable control of the Company.
The Company’s Board and management identify, monitor and manage risks through its Risk Management
Framework, and where possible, attempt to mitigate the risk of adverse outcomes through the adoption
of controls and mitigation strategies.
The following factors are all capable of having a material adverse effect on the Company’s business,
affecting the Company results and impacting the Company’s prospects for future financial years.
Additional requirements for capital
The Company’s capital requirements depend on numerous factors. The development of the Phase 1
Project is dependent on the Company’s ability to secure further financing. Any additional equity financing
will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and
operating activities. If the Company is unable to obtain additional financing as needed, it may be required
to reduce the scope of its operations and scale back its exploration programmes as the case may be.
There is however no guarantee that the Company will be able to secure any additional funding or be able
to secure funding on terms favourable to the Company.
The Company will need to raise additional capital to fund the development of the integrated Phase 1
Chemical Plant. The decision on how and when the Company may raise future capital will largely depend
on the market conditions existing at that time.
Increases in capital and operating costs
The actual capital and operating costs could be significantly higher than the estimates, particularly if there
are material changes in project scope or delays to the construction of the Phase 1 Chemical Plant or
significant movements in inflationary factors.
Commodity price fluctuations
The Company is seeking to develop projects which will be reliant on the prices of various commodities
including lithium chemicals and various by-products. Lithium chemicals are considered to be specialty
industrial chemicals and the sales prices for the different lithium compounds are not public. Lithium
chemicals are not traded commodities like base and precious metals. Therefore, it is possible that the
sales prices used in the Definitive Feasibility Study will be different than the actual prices at which the
Company is able to sell its lithium compounds. Commodity and product prices fluctuate and are affected
by numerous factors beyond the control of the Company. These factors include foreign currency
fluctuation, worldwide and regional supply and demand for commodities and chemicals, industrial
disruption, forward selling by producers and production cost levels, general world economic conditions
and the outlook for interest rates, inflation and other economic factors on both a regional and global basis.
These factors may have a positive or negative effect on the Company’s exploration, project development
and production plans and activities, together with the ability to fund those plans and activities.
Technology Risk
L-Max® and LOH-Max® are new process technologies that have only been tested at pilot scale. The
technologies have not been scaled up and tested and may not be technically feasible, may not perform
the process as it was designed, may prove uneconomic, unreliable and may not be developed on a timely
basis.
Competition in retaining and sustaining protection of intellectual property and the complex nature of
intellectual property can lead to expensive and lengthy patent disputes for which there can be no
guaranteed outcome.
18
Annual Financial Report
Although the Company is not aware of any third party interests in relation to its technologies, there is
always a risk of third parties claiming involvement in technological discoveries, and if any disputes arise,
they could adversely affect the Company.
Although the Company will implement all reasonable endeavours to protect its technologies, there can
be no assurance that these measures have been or will be sufficient.
Operational and technical risks
The operations of the Company may be affected by various factors, including but not limited to:
a) Failure to locate or identify mineral deposits;
b) Failure to achieve predicted grades and tonnes in exploration and mining;
c) Operational and technical difficulties encountered in mining;
d) Insufficient or unreliable infrastructure, such as power, water and transport;
e) Difficulties in commissioning and operating plant and equipment;
f) Mechanical failure or plant breakdown;
g) Unanticipated metallurgical problems which may affect extraction costs;
h) Adverse weather conditions;
i)
j)
k) Unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.
Industrial and environmental accidents;
Industrial disputes and labour shortages; and
Government licences and approvals
Lepidico through its direct and indirect participation in corporations, partnerships or joint ventures has
interests in properties in Namibia. Operations may be affected in varying degrees by government
regulations with respect to, but not limited to, restrictions on production, price controls, export controls,
foreign currency remittance, income taxes, expropriation of property, foreign investment, maintenance of
claims, environmental legislation, land use, land claims of local people, water use and mine safety.
Failure to comply strictly with applicable laws, regulations and local practices relating to mineral rights
applications and tenure, could result in loss, reduction or expropriation of entitlements. Outcome in courts
in other jurisdictions may be less predictable than in Australia, which could affect the enforceability of
contracts entered into.
The occurrence of these various factors and uncertainties cannot be accurately predicted and could have
an adverse effect on the operations of Lepidico. Lepidico has made its investment and strategic decisions
based on the information currently available to the Directors, however, should there be any material
change in the political, economic, legal and social environments in UAE, and Namibia the Directors may
reassess investment decisions and commitments to assets in these jurisdictions.
International Operations
Any potential future operations of Lepidico in overseas jurisdictions are subject to a number of risks,
including:
a) geo-politics associated with competition for critical minerals that could impact financing and product
supply arrangements;
b) potential difficulties in enforcing agreements and collecting receivables through foreign local systems;
c) potential difficulties in protecting rights and interests in assets; and
d) restrictive governmental actions, such as imposition of trade quotas, tariffs and other taxes.
any of these factors could materially and adversely affect Lepidico’s business, results of operations and
financial condition.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than as mentioned in the Review of Operations, no significant changes in the state of affairs of the
Consolidated Entity occurred during the financial year.
19
SUBSEQUENT EVENTS
Other than the matters discussed above there are no other matters or circumstances which have arisen
since 30 June 2023 that have significantly affected or may significantly affect:
Annual Financial Report
(a) the Consolidated Entity’s operations in future years, or
(b) the results of those operations in future financial years, or
(c) the Consolidated Entity’s state of affairs in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS ON OPERATIONS
The Company plans to continue to implement its strategy to become a vertically integrated alkali metals
chemical company through the commercialisation of its proprietary technologies including L-Max® and
LOH-Max® and the ongoing growth, exploration and development of its portfolio of lithium interests.
The nature of the Company’s business remains speculative and the Board considers that comments on
expected results or success of this strategy are not considered appropriate or in the best interests of the
Company.
INSURANCE AND INDEMNITY OF OFFICERS AND AUDITORS
During the year, the Company paid a premium in respect of a contract insuring the directors of the
Company (named above) and the Company Secretaries against liabilities incurred as such a director,
secretary or executive officer to the extent permitted by the Corporations Act 2001 (Cth). The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company
has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or
auditor of the Company or of any related body corporate against a liability incurred as such an officer or
auditor.
DIVIDENDS PAID OR RECOMMENDED
The Directors recommend that no dividend be paid for the year ended 30 June 2023, nor have any
amounts been paid or declared by way of dividend since the end of the previous financial year.
OPTIONS
At the date of this report, the Company has the following options on issue:
Number
67,500,000
18,090,000
527,777,631
67,500,000
109,500,000
790,367,631
Exercise Price
$0.012
$0.020
$0.030
$0.072
$0.026
Grant
19 November 2020
11 July 2019
4 November 2022
18 November 2021
28 November 2022
Expiry
19 November 2023
14 January 2024
4 November 2024
18 November 2024
28 November 2025
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration as required under section 307C of the Corporations Act
2001(Cth) for the year ended 30 June 2023 is included on page 30 of the Directors’ Report.
The Auditor did not provide any non-audit services for the year ended 30 June 2023 (2022: $Nil).
20
Annual Financial Report
REMUNERATION REPORT (AUDITED)
This remuneration report is set out under the following main headings:
A. Principles used to determine the nature and amount of remuneration
B. Details of remuneration
C. Service Agreements
D. Share Based Compensation
This remuneration report outlines the Director and Executive remuneration arrangements for the
Company and Group in accordance with the requirements of the Corporations Act 2001 (Cth) and its
Regulations. For this report, key management personnel (KMP) of the Group are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities of
the Company and Group, directly or indirectly, including any director (whether executive or otherwise) of
the Parent Company, and includes the highest paid executives of the Company and Group.
The information provided in this remuneration report has been audited as required by section 308(3c) of
the Corporations Act 2001.
A. Principles Used To Determine The Nature And Amount Of Remuneration
The Company’s remuneration policy is designed to align director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component and offering
incentives based on the Group’s financial results. The Nomination & Remuneration Committee makes
recommendations to the Board which aims to attract and retain appropriate executives and directors to
run and manage the Group, as well as create goal congruence between directors, executives and
shareholders.
The Nomination & Remuneration Committee considers remuneration of Directors and the Executive and
makes recommendations to the Board. Remuneration is considered annually or otherwise as required.
The nature and amount of remuneration for an executive and non-executive director depends on the
nature of the role and market rates for the position, which are determined with the assistance of external
advisors (where necessary), surveys and reports, taking into account the experience and qualifications
of each individual. The Board ensures that the remuneration paid to KMP is competitive and reasonable.
During the financial year, the Nomination & Remuneration Committee reviewed elements of KMP
remuneration for the year commencing 1 July 2023 including the provision of comparative information
relating to the KMP remuneration for the Company’s peers and provided recommendations to the Board.
The recommendations from the Nomination & Remuneration Committee were approved by the Board.
The following were KMP of the Group during the financial year and unless otherwise indicated were KMP
for the entire financial year:
Non-Executive Directors
Non-executive Chair
Mr Gary Johnson
Mr Mark Rodda
Non-executive Director
Ms Cynthia Thomas Non-executive Director
Executive Director
Mr Joe Walsh
Managing Director
Executives
Ms Shontel Norgate Chief Financial Officer & Joint Company Secretary
Mr Peter Walker
Ms Benedicta Uris
GM – Project Development (ceased being KMP on 31 August 2022)
GM – Sustainability
21
Annual Financial Report
GM – Operations UAE (appointed 11 July 2022)
Mr Hans Daniels
Mr Timo Ipangelwa GM – Operations Namibia (appointed 1 August 2022)
Mr Roland Wells(1)
Mr Tom Dukovcic
Mr Alex Neuling(2)
Project Director (appointed 1 September 2022)
GM – Geology
Joint Company Secretary
(1) Mr Roland Wells provides services as the Project Director through a services agreement with Project Creations Pty
Ltd (Project Creations)
(2) Mr Neuling provides services as a Joint Company Secretary through a services agreement with Erasmus Consulting
Pty Ltd (Erasmus).
In accordance with best practice corporate governance, the structure of non-executive director and
executive remuneration is separate and distinct.
Non-Executive Director Remuneration
Fees and payments to the Non-Executive Directors reflect the demands made, and the responsibilities
placed on the Non-Executive Directors. The maximum annual aggregate directors’ fee pool limit is
$600,000 and was approved by shareholders at the annual general meeting on 22 November 2018.
The Company’s policy is to remunerate Non-Executive Directors at market rates (for comparable
companies) and reflect the demands made and the responsibilities placed on the Non-Executive
Directors.
Non-Executive Director fees approved by the Board since 1 December 2018 are:
Base fees (annual) Non-Executive Chair
Other Non-Executive Directors
Chair of Audit/Nomination & Remuneration Committee
Member of Audit/Nomination & Remuneration Committee
$ 87,600
$ 54,750
$ 10,000
$ 10,000
On formation of the Diversity Committee, it was resolved by the Committee members that the Committee
would forgo any Fees and the decision would be reviewed once a final investment decision was reached
by the Board.
Fees for Non-Executive Directors are not linked to the performance of the Company. However, to align
Directors’ interests with shareholders’ interests, Directors are encouraged to hold equity securities in the
Company. Non-executive Directors are also entitled to participate in the Company long term incentive
plan (refer Long Term Incentives (LTIs) below).
In addition to Directors’ fees, Non-Executive Directors are entitled to additional remuneration as
compensation for additional specialised services performed at the request of the Board and reimbursed
for reasonable expenses incurred by directors on Company business. Non-Executive Directors’ fees and
payments are reviewed annually by the Board.
Retirement benefits
No retirement benefits or allowances are paid or payable to Non-Executive Directors of the Company
other than superannuation benefits.
Other benefits
No motor vehicle, health insurance or other similar allowances are made available to Non-Executive
Directors.
22
Executive Director and Executive Remuneration
The objective of the Company’s remuneration framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The remuneration framework aligns executive
reward with the achievement of strategic and operational objectives and the creation of wealth for
shareholders. The Board ensures that the executive reward framework satisfies the following key criteria
in line with appropriate governance practices:
Annual Financial Report
• attract, retain, motivate and reward executives;
•
for Company and
reward executives
targets/benchmarks;
link rewards with the strategic goals and performance of the Company;
•
• provide competitive remuneration arrangements by market standards (for comparable companies);
• align executive interests with those of the Company’s shareholders; and
• comply with applicable legal requirements and appropriate standards of governance.
individual performance against pre-determined
The Company has structured an executive remuneration framework that is market competitive and
complementary to the reward strategy of the organisation. Executive remuneration packages may
comprise a mix of the following:
Fixed remuneration
Fixed remuneration comprises base salary and employer superannuation contributions. Salaries are
reviewed on an annual basis to ensure competitive remuneration is paid to executives with reference to
their role, responsibility, experience and performance. Salaries are reviewed on an annual basis. There
are no guaranteed base pay increases included in any executive contracts.
Short-term incentives (STIs)
STIs comprise cash bonuses. The STIs are structured to provide remuneration for the achievement of
individual and Company performance targets linked to the Company’s strategic objectives across four
areas of focus: Development, Exploration, Financing/Shareholder Value and Governance. At the
beginning of each year, performance targets are set by the Board. Where possible, the performance
targets are specific and measurable. At the end of each year the Company’s performance against the
KPIs are assessed by the CEO and presented to the Nomination & Remuneration Committee and
approved by the Board. STIs may be adjusted up or down in line with under or over achievement relative
to target performance levels at the discretion of the Remuneration Committee.
During the year the Company achieved the key milestones relating to the development of the integrated
Phase 1 Project with the completion of the Chemical Plant FEED and the grant of the detailed planning
approval. In addition, the power supply for the Karibib Project in Namibia was secured. The mine life
was extended to 19 years. The Company completed a successful Entitlements Offer securing $19 million
in funding with significant progress made with DFC due diligence. The Company continued to ensure the
health and safety of its employees.
For the year ended 30 June 2023, STIs of $842,562 (including superannuation) were awarded to KMP of
the Company or Group with payment deferred until the Company satisfies certain KPIs (2022: $401,146).
The number of KMP eligible for an STI for the year ended 30 June 2023 were 7 (2022:4).
Long term incentives (LTIs)
LTIs comprise options granted at the recommendation of the Remuneration Committee in order to align
the objective of Directors and Executives with shareholders and the Company (refer section D for further
information). The issue of options to Directors (Non-Executive and Executive) requires shareholder
approval.
The grant of share options has not been directly linked to previously determined performance milestones
or hurdles as the current pre-operations stage of the Group’s activities makes it difficult to determine
effective and appropriate key performance indicators and milestones.
23
Annual Financial Report
Persons granted options are not permitted to enter into transactions (whether through the use of
derivatives or otherwise) that limit his or her exposure to the economic risk in relation to the securities.
Consequences of Performance on Shareholder Wealth
Executive remuneration is aimed at aligning the strategic and business objectives with the creation of
shareholder wealth. The table below shows measures of the Group’s financial performance over the last
5 years as required by the Corporations Act 2001. However, given the pre-development stage of the
business these are not necessarily consistent with the measures used in determining the variable
amounts of remuneration to be awarded to KMP. Consequently, there may not be a direct correlation
between the statutory key performance measures and the variable remuneration awarded.
Net Profit/(Loss)
EPS
Share price at 30 June
2019
$
(5,105,014)
(0.002)
0.026
2020
$
(10,118,237)
(0.002)
0.007
2021
$
$282,556
0.00006
0.01
2022
$
(7,941,340)
(0.00127)
0.026
2023
$
(3,604,123)
(0.0005)
0.011
24
B. Details Of Remuneration
Amounts of remuneration
Details of the remuneration paid or payable to the directors and Key Management Personnel of the Group
are set out in the following tables.
Annual Financial Report
Short-term Benefits
Cash
Salary
and Fees
$
Other
(STI)
$
Post-
employment
Benefits
Retirement
Benefits
Share-based
Payments
Equity
Options
Vested
Total
$
$
$
Non-Executive Directors
Mr Gary Johnson
Mr Mark Rodda
Ms Cynthia Thomas
Executive Director
Mr Joe Walsh(1)
Executives
Mr Tom Dukovcic
Mr David Hall(2)
Ms Shontel Norgate(3)
Ms Benedicta Uris(4)
Mr Hans Daniels(5)
Mr Timo Ipangelwa(6)
Mr Roland Wells(7)
Mr Peter Walker(8)
Mr Alex Neuling(9)
Total Directors’ and
KMP Remuneration
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
100,000
100,000
80,000
80,000
88,400
88,000
521,448
408,317
248,869
218,182
257,164
-
400,468
321,209
239,897
49,101
421,406
-
206,892
-
320,101
-
106,738
405,407
54,100
45,425
3,045,483
1,715,641
-
-
-
-
-
-
267,116
161,157
83,325
55,776
85,695
-
123,086
79,236
73,154
14,482
129,116
-
62,791
-
-
-
-
90,495
-
-
824,283
401,146
10,500
10,000
8,400
8,000
-
-
-
-
26,131
21,818
27,002
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
72,033
39,818
52,500
202,500
52,500
202,500
52,500
202,500
105,000
405,000
70,000
270,000
70,000
-
70,000
270,000
70,000
-
70,000
-
70,000
-
-
-
-
270,000
28,000
-
710,500
1,822,500
163,000
312,500
140,900
290,500
140,900
290,500
893,564
974,474
428,325
565,776
439,861
-
593,554
670,445
383,051
63,583
620,522
-
339,683
-
320,101
-
106,738
765,902
82,100
45,425
4,652,299
3,979,105
(1) Mr Walsh is remunerated in Canadian dollars and his total salary paid was C$465,500 (2022: C$375,000). The Company uses the
average annual rate to translate remuneration into the reporting currency and has been translated at the rate of C$1.00 for every A$1.1202
(2022: C$1.00 for every A$1.0888).
(2) Mr Hall joined the Company as GM-Marketing & Investor Relations on 1 August 2022.
(3) Ms Norgate is remunerated in Canadian dollars and her total salary paid was C$357,500 (2022: C$295,000). The Company uses the
average annual rate to translate remuneration into the reporting currency and has been translated at the rate of C$1.00 for every A$1.1202
(2022: C$1.00 for every A$1.0888).
(4) Ms Uris joined the Company as GM-Sustainability on 20 April 2022. Ms Uris is remunerated in Namibian dollars and her total salary paid
was N$3,022,224 (2022:N$542,040). The Company uses the average annual rate to translate remuneration into the reporting currency
and has been translated at the rate of N$1.00 for every A$0.0794 (2022: N$1.00 for every A$0.0906).
(5) Mr Daniels joined the Company as GM-Operations UAE on 11 July 2022. Mr Daniels is remunerated in UAE Dirham and his total salary
paid was AED1,044,339 (2022: Nil). The company uses the average annual rate to translate remuneration into the reporting currency
and has been translated at the rate of AED1.00 for every A$0.4053 (2022: Nil)
25
Annual Financial Report
(6) Mr Ipangelwa joined the Company as GM-Operations Namibia on 1 August 2022. Mr Ipangelwa is remuneration in Namiiban dollars ad
his total salary paid was N$2,606,428 (2022: Nil). The Company uses the average annual rate to translate remuneration into the reporting
currency and has been translated at the rate of N$1.00 for every A$0.0794 (2022: Nil).
(7) Mr Wells commenced providing services as the Project Director through a services agreement with Project Creations Pty Ltd (Project
Creations) on 1 September 2022. During the year Project Creations was paid or is payable fees of $320,101 (2022: Nil) for the provision
of project management services for the Phase 1 Project.
(8) Mr Walker ceased being a KMP on 31 August 2022. Mr Walker is remunerated in Great British pounds and his total salary paid was
GBP£56,760 (2022: GBP£221,020). The Company uses the average annual rate to translate remuneration into the reporting currency
and has been translated at the rate of GBP£1.00 for every A$1.8805 (2022: GBP£1.00 for every A$1.88343)
(9) Mr Neuling provides services as the Joint Company Secretary through a services agreement with Erasmus Consulting Pty Ltd (Erasmus).
During the year Erasmus was paid or is payable fees of $54,100 (2022: $45,425) for the provision of company secretarial services to the
Group.
Loans to Key Management Personnel
There were no loans made to Directors or other KMP of the Group (or their personally related entities)
during the current financial period.
Other Transactions with Key Management Personnel
Payments to director-related entities(1)
2023
$
766,749
2022
$
2,609,905
(1) Payments were made to Strategic Metallurgy Pty Ltd, a company of which Mr Gary Johnson is a director and beneficial
shareholder. The payments were for development of L-Max® technology on an arm’s length basis. As at 30 June
2023 invoices totalling $2,866 (2022: $141,777) were payable.
C. Service Agreements
The remuneration and other terms of agreement for the Company’s Managing Director and other KMP
are formalised in employment contracts, as set out below.
Mr Joe Walsh, Managing Director (MD) has an employment agreement with the Group. The agreement
specifies duties and obligations to be fulfilled as MD and provides for an annual review of base
remuneration taking into account performance. Mr Walsh’s remuneration includes a salary of C$465,500
per annum. Mr Walsh did not receive an increase to base salary during the reporting period. A monetary
bonus of C$235,078 has been awarded for the financial year ended 30 June 2023 (2022: C$139,500).
Payment of the bonus will be deferred until satisfaction of certain KPIs.
Termination of the employment agreement requires 6 months written notice. Upon termination, the MD is
entitled to receive from the Group all payments owed to him under the employment agreement up to and
including the date of termination and any payments due to him pursuant to any relevant legislation by
way of accrued annual leave and long service leave. If the Company terminates the agreement for any
reason other than for cause the MD will receive 1 month’s salary at the time of termination for every year
of employment with the Company to a maximum of 6 months’ payment (extendable up to 12 months
under certain prescribed events).
Mr Tom Dukovcic, GM - Geology (GMG) has an employment agreement with the Group. The agreement
specifies duties and obligations to be fulfilled as GMG and provides for an annual review of base
remuneration taking into account performance. Mr Dukovcic’s remuneration includes a salary of
$275,000 per annum inclusive of superannuation. Mr Dukovcic did not receive an increase to base salary
during the reporting period. A monetary bonus of $83,325 (inclusive of superannuation) has been
awarded for the financial year ended 30 June 2023 (2022: $55,776). Payment of the bonus will be
deferred until satisfaction of certain KPIs.
Termination of the employment agreement requires 6 months written notice. Upon termination, the GMG
is entitled to receive from the Company all payments owed to him under the employment agreement up
to and including the date of termination and any payments due to him pursuant to any relevant legislation
by way of accrued annual leave and long service leave. If the Company terminates the agreement for
26
Annual Financial Report
any reason other than for cause the GMG will receive 1 month’s salary at the time of termination for every
year of employment with the Company to a maximum of 6 months’ payment (extendable up to 12 months
under certain prescribed events).
Mr David Hall, General Manager – Marketing & Investor Relations (MIR) has an employment agreement
with the Group commencing 1 August 2022. The agreement specifies duties and obligations to be fulfilled
as MIR and provides for an annual review of base remuneration taking into account performance. Mr
Hall’s remuneration includes a salary of A$310,000 per annum, inclusive of superannuation. Mr Hall did
not receive an increase to base salary during the reporting period. A monetary bonus of A$85,695
(inclusive of superannuation) has been awarded for the financial year ended 30 June 2023 (2022: Nil).
Payment of the bonus will be deferred until satisfaction of certain KPIs.
Termination of the employment agreement requires 3 months written notice. Upon termination, the MIR
is entitled to receive from the Company all payments owed to him under the employment agreement up
to and including the date of termination and any payments due to him pursuant to any relevant legislation
by way of accrued annual leave and long service leave. If the Company terminates the agreement for
any reason other than for cause the CFO will receive 1 month’s salary at the time of termination for every
year of employment with the Company to a maximum of 6 months’ payment (extendable up to 12 months
under certain prescribed events).
Ms Shontel Norgate, Chief Financial Officer (CFO) has an employment agreement with the Group. The
agreement specifies duties and obligations to be fulfilled as CFO and provides for an annual review of
base remuneration taking into account performance. Ms Norgate’s remuneration includes a salary of
C$357,500 per annum. Ms Norgate did not receive an increase to base salary during the reporting period.
A monetary bonus of C$108,323 has been awarded for the financial year ended 30 June 2023 (2022:
C$68,587). Payment of the bonus will be deferred until satisfaction of certain KPIs.
Termination of the employment agreement requires 3 months written notice. Upon termination, the CFO
is entitled to receive from the Company all payments owed to her under the employment agreement up
to and including the date of termination and any payments due to her pursuant to any relevant legislation
by way of accrued annual leave and long service leave. If the Company terminates the agreement for
any reason other than for cause the CFO will receive 1 month’s salary at the time of termination for every
year of employment with the Company to a maximum of 6 months’ payment (extendable up to 12 months
under certain prescribed events).
Ms Benedicta Uris, General Manager – Sustainability (GMS) has an employment agreement with the
Group. The agreement specifies duties and obligations to be fulfilled as GMS and provides for an annual
review of base remuneration taking into account performance. Ms Uris’ remuneration includes a salary
of N$3,022,224 per annum. Ms Uris did not receive an increase to base salary during the reporting
period. A monetary bonus of N$915,734 has been awarded for the financial year ended 30 June 2023
(2022: N$162,680). Payment of the bonus will be deferred until satisfaction of certain KPIs.
Termination of the employment agreement requires 3 months written notice. Upon termination, the GMS
is entitled to receive from the Company all payments owed to her under the employment agreement up
to and including the date of termination and any payments due to her pursuant to any relevant legislation
by way of accrued annual leave and long service leave.
Mr Timo Ipangelwa, General Manager – Operations Namibia (ON) has an employment agreement with
the Group commencing 1 August 2022. The agreement specifies duties and obligations to be fulfilled as
ON and provides for an annual review of base remuneration taking into account performance. Mr
Ipangelwa’s remuneration includes a salary of N$2,606,428 per annum. Mr Ipangelwa did not receive an
increase to base salary during the reporting period. A monetary bonus of N$786,010 has been awarded
for the financial year ended 30 June 2023 (2022: Nil). Payment of the bonus will be deferred until
satisfaction of certain KPIs.
Termination of the employment agreement requires 3 months written notice. Upon termination, the ON is
entitled to receive from the Company all payments owed to him under the employment agreement up to
27
Annual Financial Report
and including the date of termination and any payments due to him pursuant to any relevant legislation
by way of accrued annual leave and long service leave.
Mr Hans Daniels, General Manager – Operations UAE (OU) has an employment agreement with the
Group commencing 11 July 2022. The agreement specifies duties and obligations to be fulfilled as OU
and provides for an annual review of base remuneration taking into account performance. Mr Daniel’s
remuneration includes a salary of AED1,071,996 per annum. Mr Daniels did not receive an increase to
base salary during the reporting period. A monetary bonus of AED315,026 has been awarded for the
financial year ended 30 June 2023 (2022: Nil). Payment of the bonus will be deferred until satisfaction
of certain KPIs.
Termination of the employment agreement requires 3 months written notice. Upon termination, the OU is
entitled to receive from the Company all payments owed to him under the employment agreement up to
and including the date of termination and any payments due to him pursuant to any relevant legislation
by way of accrued annual leave and end of service benefit.
Effective from 1 September 2022, Mr Peter Walker’s role transitioned to Technical Advisor the Board.
Mr Walker is employed on a casual basis based on the number of days worked and earned a salary of
GBP56,700 for the financial year (2022: GBP221,020). Mr Walker did not receive an increase to base
rate during the reporting period.
D. Share Based Compensation
Share Holdings
The number of shares and options over ordinary shares in the Group held during the financial year by
each director of Lepidico Ltd and other KMP of the Group, including their personally related parties, are
set out below:
2023
Balance at
start of year
Purchased
Exercised
Options
Sold
Other Net
Change
Balance at
end of year
Non-Executive Directors
Mr Gary Johnson
Mr Mark Rodda
Ms Cynthia Thomas
335,358,326
-
-
5,430,871
-
-
Executive Director
Mr Joe Walsh
Key Management
Mr Tom Dukovcic
Ms Shontel Norgate
Ms Benedicta Uris
Mr Timo Ipangelwa
Mr Hans Daniels
Mr David Hall
Mr Roland Wells
Mr Peter Walker(1)
Mr Alex Neuling
35,468,572
1,746,858
6,608,446
14,314,022
-
-
-
-
-
-
3,898,495
-
-
-
-
-
-
379,500
-
-
Total
395,647,861
7,557,229
(1) Mr Walker ceased being a KMP on 31 August 2022
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
340,789,197
-
-
37,215,430
6,608,446
14,314,022
-
-
-
-
379,500
-
3,898,495
403,205,090
28
Option Holdings
2023
Balance at
start of year
Granted
during the
year as
remuneration
Purchased
during year
Expired
during year
Net Other
Change
Balance at
end of year
* Vested and
exercisable at
end of year
Annual Financial Report
Non-Executive Directors
Mr Gary Johnson
Mr Mark Rodda
Ms Cynthia Thomas
23,927,955
22,500,000
22,500,000
7,500,000
7,500,000
7,500,000
2,665,436
-
-
(8,927,955)
(7,500,000)
(7,500,000)
45,944,286
15,000,000
873,429
(15,944,286)
-
-
-
-
25,165,436
22,500,000
22,500,000
25,165,436
22,500,000
22,500,000
45,873,429
45,873,429
Executive Directors
Mr Joe Walsh
Key Management
Mr Tom Dukovcic
Ms Shontel Norgate
Ms Benedicta Uris
Mr Timo Ipangelwa
Mr Hans Daniels
Mr David Hall
Mr Roland Wells
Mr Peter Walker(1)
Mr Alex Neuling
30,000,000
30,000,000
-
-
-
-
-
20,000,000
4,171,757
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
-
-
4,000,000
-
-
-
-
-
-
17,250
-
-
(10,000,000)
(10,000,000)
-
-
-
-
-
-
(4,171,757)
-
-
-
-
-
-
-
(20,000,000)
-
30,000,000
30,000,000
10,000,000
10,000,000
10,000,000
10,000,000
17,250
-
4,000,000
30,000,000
30,000,000
10,000,000
10,000,000
10,000,000
10,000,000
17,250
-
4,000,000
Total
199,043,998
101,500,000
3,556,115
(64,043,998)
(20,000,000)
220,056,115
220,056,115
(1) Mr Walker ceased being a KMP on 31 August 2022
Details of the share options granted during the year as remuneration are disclosed in Note 18(b) as
approved by shareholders at the Company’s Annual General Meeting in November 2022.
This report is made in accordance with a resolution of the directors made pursuant to section 298(2) of
the Corporations Act 2001.
________________________
Joe Walsh
Managing Director
Dated this 22nd day of September 2023
29
Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.com.au
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION
307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS
OF LEPIDICO LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2023, there have
been:
a) no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit, and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
NEIL PACE
PARTNER
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
Signed at Perth this 22nd day of September 2023
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
30
Consolidated Statement of Profit and Loss
and Other Comprehensive Income
as at 30 June 2023
Continuing Operations
Other income
Business development expenses
Administrative expenses
Employment benefits
Depreciation
Share based payments
Finance costs
Exploration and evaluation expenditure expensed
R&D expenditure expensed
Loss before income tax
Income tax expense
Annual Financial Report
Note
2023
$
2022
$
3
4
7,023,495
49,603
(951,606)
(2,788,500)
(4,170,551)
(571,325)
(766,500)
(632,296)
(46,162)
(56,901)
(680,048)
(2,032,681)
(2,121,351)
(411,213)
(1,822,500)
(393,003)
(452,275)
-
(2,960,346)
(7,863,468)
5
(643,777)
(77,872)
Loss from continuing operations after tax
(3,604,123)
(7,941,340)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
(667,754)
159,065
Total comprehensive loss for the year
(4,271,877)
(7,782,275)
Comprehensive loss for the year attributable to:
Owners of the parent
Non-controlling interest
(4,311,630)
707,507
(7,550,699)
(231,576)
(3,604,123)
(7,782,275)
Loss per share for the year attributable to the members
of Lepidico Ltd
Basic and diluted loss per share
7
(0.0005)
(0.00127)
The accompanying notes form part of these financial statements.
31
Consolidated Statement of Financial Position
as at 30 June 2023
Note
2023
$
2022
$
Annual Financial Report
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Exploration and evaluation expenditure
Intangible asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions
Borrowings and lease liabilities
Deferred Revenue
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Borrowings and lease liabilities
Deferred Tax Liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Equity component of convertible note
Accumulated losses
Equity attributable to owners of the Parent
Non-controlling interests
8
9
9
10
11
12
13
14
15
16
14
15
5
17
18
10,828,962
703,453
8,042,822
2,204,232
11,532,415
10,247,054
728,135
17,061,890
48,356,862
28,773,120
632,379
8,590,777
46,763,770
29,065,361
94,920,007
85,052,287
106,452,422
95,299,341
2,130,854
268,115
595,277
-
1,986,170
157,698
279,751
6,613,159
2,994,246
9,036,778
808,068
7,136,646
3,055,201
691,969
6,744,318
2,384,718
10,999,915
9,821,005
13,994,161
18,857,783
92,458,261
76,441,558
122,261,186
8,060,081
990,000
(45,964,902)
102,655,726
8,044,715
990,000
(41,653,272)
85,346,365
7,111,896
70,037,169
6,404,389
TOTAL SHAREHOLDERS EQUITY
92,458,261
76,441,558
The accompanying notes form part of these financial statements.
32
Annual Financial Report
Consolidated Statement of Changes in Equity
for the Year ended 30 June 2023
Attributable to the owners of the Company
Issued
Capital
Reserves
Options Warrants
$
94,656,278
$
5,345,140
$
415,135
Equity
component
of
convertible
note
$
990,000
Foreign
Currency
$
850,669
Accumulated
Losses
Total
Non
Controlling
Interest
Total
Equity
$
(33,943,508)
$
68,313,714
$
6,635,965
$
74,949,679
-
-
-
7,451,655
547,793
-
-
1,822,500
-
(547,793)
-
-
-
-
-
-
159,064
-
-
-
-
-
-
-
-
(7,709,764)
-
-
-
-
(7,709,764)
159,064
1,822,500
7,451,655
-
(231,576)
-
-
-
-
(7,941,340)
159,064
1,822,500
7,451,655
-
Balance at 1 July 2021
Loss for the year
Other comprehensive loss
Options issued
Options exercised
Fair value of options exercised
Shares issued
Balance at 30 June 2022
102,655,726
6,619,847
415,135 1,009,733
990,000
(41,653,272)
70,037,169
6,404,389
76,441,558
Loss for the year
Other comprehensive loss
Shares issued (net of costs)
Options issued
Options exercised
Fair value of options exercised
-
-
18,307,021
-
1,215,059
83,380
-
-
-
766,500
-
(83,380)
-
-
-
-
-
-
-
(667,754)
-
-
-
-
-
-
-
-
-
-
(4,311,630)
-
-
-
-
-
(4,311,630)
(667,754)
18,307,021
766,500
1,215,059
-
707,507
-
-
-
-
-
(3,604,123)
(667,754)
18,307,021
766,500
1,215,059
-
Balance at 30 June 2023
122,261,186
7,302,967
415,135
341,979
990,000
(45,964,902)
85,346,365
7,111,896
92,458,261
The accompanying notes form part of these financial statements.
33
Annual Financial Report
Consolidated Statement of Cash Flow
For the Year ended 30 June 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Payment of land lease deposit
Interest received
Interest paid
Payments made in relation to legal dispute
Note
2023
$
2022
$
(6,777,822)
-
274,374
(6,649)
(251,132)
(4,969,220)
(514,769)
1,442
-
-
Net cash provided by/(used in) operating activities
22
(6,761,229)
(5,482,547)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation activities
Payments for research and development activities
Proceeds from research and development tax credit
Payments for property, plant and equipment
Proceeds from property, plant and equipment
(3,386,010)
(385,420)
2,181,799
(8,232,247)
-
(3,063,640)
(5,478,367)
-
(98,586)
9,562
Net cash used in investing activities
(9,821,878)
(8,631,031)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares (net of costs)
Proceeds from exercise of options (net of costs)
Proceeds from borrowings
Repayment of borrowings
18,307,021
1,215,059
169,114
(6,980)
-
7,432,350
-
-
Net cash provided by financing activities
19,684,214
7,432,350
Net increase/(decrease) in cash held
Cash at beginning of financial year
3,101,107
(6,681,228)
8,042,822
14,738,020
Effect of foreign exchange rate changes
(314,967)
(13,970)
Cash at end of financial year
8
10,828,962
8,042,822
The accompanying notes form part of these financial statements.
34
Annual Financial Report
Notes to the Financial Statements
for the Year ended 30 June 2023
Note 1: Statement of Significant Accounting Policies
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
financial
report covers Lepidico Ltd and
(the Group
The
or Consolidated Entity or Economic Entity). Lepidico Ltd is a listed public company, incorporated and
domiciled in Australia. The financial report of the Group complies with all Australian equivalents to
International Financial Reporting Standards (AIFRS) in their entirety.
its controlled entities
The following is a summary of the material accounting policies adopted by the Consolidated Entity in
the preparation of the financial report. The accounting policies have been consistently applied, unless
otherwise stated.
Basis of Preparation
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified
by the revaluation of selected non-current assets, and financial assets and financial liabilities for which
the fair value basis of accounting has been applied.
The financial statements were authorised for issue on 22nd September 2023 by the Directors of the
Company. The Directors have the power to amend and re-issue the financial report. The Group is a
for-profit entity for financial reporting purposes under Australian Accounting Standards.
Accounting Policies
(a) Going Concern
The financial statements have been prepared on the going concern basis, which contemplates the
continuity of normal business activity and the realisation of assets and the settlement of liabilities
in the normal course of business. The ability of the Group to continue as a going concern is
dependent on the Company being able to continue to raise additional funds as required to meet
ongoing exploration and development programs and working capital. Further, the consequences
of the COVID-19 pandemic have negatively impacted the global economy and created volatile
market dynamics.
For the year ended 30 June 2023, the Group incurred a net loss after tax of $3,604,123 and a net
cash outflow from operations of $6,761,229. On 30 June 2023, the Company had net current
assets of $8,538,169.
The financial report has been prepared on a going concern basis which the Directors consider to
be appropriate as they believe that the Group will be able to raise additional capital as required
based on existing standby equity raising facilities in place and the successful outcome of previous
Entitlement Offers. The Company is well advanced in its discussions with financial institutions in
relation to securing debt financing for the Phase 1 Project. There remains ongoing interest in the
Company and the long term outlook for the lithium industry remains robust.
While the Company has been successful in securing financing in the past, there can be no
assurance that it will be able to do so in the future. The Company’s opinion concerning its ability to
secure future financing options is based on currently available information. To the extent that this
information proves to be inaccurate future availability of finance may be adversely affected.
35
(b) Principles of Consolidation
The consolidated financial statements incorporate all the assets, liabilities and results of the parent
(Lepidico Ltd) and all of the subsidiaries (including any structured entities). Subsidiaries are
entities the parent controls. The parent controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. A list of the subsidiaries is provided in Note 2.
Annual Financial Report
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial
statements of the Group from the date on which control is obtained by the Group. The
consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany
transactions, balances and unrealised gains or losses on transactions between group entities are
fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and
adjustments made where necessary to ensure uniformity of the accounting policies adopted by
the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented
as “non-controlling interests”. The Group initially recognises non-controlling interests that are
present ownership interests in subsidiaries and are entitled to a proportionate share of the
subsidiary’s net assets on liquidation at either fair value or at the non-controlling interests’
proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-
controlling interests are attributed their share of profit or loss and each component of other
comprehensive income. Non-controlling interests are shown separately within the equity section
of the statement of financial position and statement of comprehensive income.
(c) Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a
combination involving entities or businesses under common control. The business combination
will be accounted for from the date that control is attained, whereby the fair value of the identifiable
assets and liabilities acquired (including contingent liabilities) assumed is recognised (subject to
certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability
resulting from a contingent consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not remeasured and its subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or liability
is remeasured in each reporting period to fair value, recognising any change to fair value in profit
or loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated
with the issue of a financial instrument, are recognised as expenses in profit or loss when incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain
purchase.
36
Annual Financial Report
(d) Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the
excess of the sum of:
i)
the consideration transferred;
ii) any non-controlling interest (determined under either the full goodwill or proportionate
interest method); and
iii) the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of net identifiable assets acquired
The acquisition date fair value of the consideration transferred for a business combination plus
the acquisition date fair value of any previously held equity interest shall form the cost of the
investment in the separate financial statements.
Fair value re-measurements in any pre-existing equity holdings are recognised in profit or loss in
the period in which they arise. Where changes in the value of such equity holdings had previously
been recognised in other comprehensive income, such amounts are recycled to profit or loss. The
amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less
than a 100% interest will depend on the method adopted in measuring the non-controlling interest.
The Group can elect in most circumstances to measure the non-controlling interest in the acquiree
either at fair value (full goodwill method) or at the non-controlling interest's proportionate share of
the subsidiary's identifiable net assets (proportionate interest method).
In such circumstances, the Group determines which method to adopt for each acquisition and this
is stated in the respective notes to these financial statements disclosing the business combination.
Under the full goodwill method, the fair value of the non-controlling interests is determined using
valuation techniques which make the maximum use of market information where available. Under
this method, goodwill attributable to the non-controlling interests is recognised in the consolidated
financial statements.
Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of
associates is included in investments in associates. Goodwill is tested for impairment annually
and is allocated to the Group's cash-generating units or groups of cash-generating units,
representing the lowest level at which goodwill is monitored being not larger than an operating
segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill
related to the entity disposed of. Changes in the ownership interests in a subsidiary that do not
result in a loss of control are accounted for as equity transactions and do not affect the carrying
amounts of goodwill.
(e) Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any
non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are
substantively 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 statement of comprehensive income
except where it relates to items that may be credited directly to equity, in which case the deferred
tax is adjusted directly against equity.
37
Annual Financial Report
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.
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 taxation legislation and the anticipation
that the Consolidated Entity will derive sufficient future assessable income to enable the benefit
to be realised and comply with the conditions of deductibility imposed by the law.
(f) Property, Plant and Equipment
Each class of plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation and impairment losses.
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
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 which will be received from the assets’ employment and
subsequent disposal. The expected net cash flows have been discounted to their present values
in determining recoverable amounts.
The cost of fixed assets constructed within the Consolidated Entity includes the cost of materials,
direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item will
flow to the group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the statement of comprehensive income during the financial period
in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including capitalised lease assets is depreciated on a
straight-line basis over their useful lives to the Consolidated Entity commencing from the time the
asset is held ready for use. Leasehold improvements are depreciated over the shorter of either
the unexpired period of the lease or the estimated useful lives of the improvements.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each
balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount.
These gains or losses are included in the statement of comprehensive income. When re-valued
assets are sold, amounts included in the revaluation reserve relating to that asset are transferred
to retained earnings.
(g) Leases (the Group as lessee)
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a
lease present, a right-of-use asset and a corresponding lease liability is recognised by the Group
where the Group is a lessee. However, all contracts that are classified as short-term leases (lease
with remaining lease term of 12 months or less) and leases of low value assets are recognised as
an operating expense on a straight-line basis over the term of the lease.
Initially the lease liability is measured at the present value of the lease payments still to be paid at
commencement date. The lease payments are discounted at the interest rate implicit in the lease.
If this rate cannot be readily determined, the Group uses the incremental borrowing rate.
38
Annual Financial Report
Lease payments included in the measurement of the lease liability are as follows:
•
• variable lease payments that depend on an index or rate, initially measured using the index or
fixed lease payments less any lease incentives;
•
•
•
rate at the commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the
options;
lease payments under extension options if lessee is reasonably certain to exercise the options;
and
• payments of penalties for terminating the lease if the lease term reflects the exercise of an
option to terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, as
mentioned above, any lease payments made at or before the commencement date as well as any
initial direct costs. The subsequent measurement of the right-of-use assets is at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset
whichever is the shortest.
The present value of the lease liability is increased by the interest cost and decreased by the lease
payment each period over the life of the lease. The Group includes right of use leased assets
separately in Property, Plant, Equipment disclosures. All new contracts of the Group are assessed
on an ongoing basis to determine if a right of use asset exists and if they require recognition under
the requirements of the lease standard.
Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset
reflects that the Group anticipates exercising a purchase option, the specific asset is depreciated
over the useful life of the underlying asset.
(h) Exploration and Development Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are
expected to be recouped through the successful development of the area or where activities in
the area have not yet reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year
in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are
amortised over the life of the area according to the rate of depletion of the economically
recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration commences
and are included in the costs of that stage. Site restoration costs include the dismantling and
removal of mining plant, equipment and building structures, waste removal, and rehabilitation of
the site in accordance with clauses of the mining permits. Such costs have been determined using
estimates of future costs, current legal requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs of site restoration are accounted on a prospective
basis. In determining the costs of site restoration, there is uncertainty regarding the nature and
39
Annual Financial Report
extent of the restoration due to community expectations and future legislation. Accordingly, the
costs have been determined on the basis that the restoration will be completed within one year of
abandoning the site.
(i) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-
recurring basis, depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a
liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing
market participants at the measurement date.
To the extent possible, market information is extracted from either the principal market for the
asset or liability (i.e. the market with the greatest volume and level of activity for the asset or
liability) or, in the absence of such a market, the most advantageous market available to the entity
at the end of the reporting period (i.e. the market that maximises the receipts from the sale of the
asset or minimises the payments made to transfer the liability, after taking into account transaction
costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s
ability to use the asset in its highest and best use or to sell it to another market participant that
would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to
share-based payment arrangements) may be valued, where there is no observable market price
in relation to the transfer of such financial instrument, by reference to observable market
information where such instruments are held as assets. Where this information is not available,
other valuation techniques are adopted and, where significant, are detailed in the respective note
to the financial statements.
(j) Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions to the instrument. For financial assets, this is the date that the Group
commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus
transaction costs, except where the instrument is classified "at fair value through profit or loss", in
which case transaction costs are expensed to profit or loss immediately. Where available, quoted
prices in an active market are used to determine fair value. In other circumstances, valuation
techniques are adopted.
Trade receivables are initially measured at the transaction price if the trade receivables do not
contain a significant financing component or if the practical expedient was applied as specified in
AASB 15.63.
Classification and subsequent measurement
Financial liabilities
Financial instruments are subsequently measured at:
• amortised cost; or
•
fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
• a contingent consideration of an acquirer in a business combination to which AASB 3: Business
Combinations applies;
• held for trading; or
40
Annual Financial Report
•
initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest
method.
The effective interest method is a method of calculating the amortised cost of a debt instrument
and of allocating interest expense in profit or loss over the relevant period. The effective interest
rate is the internal rate of return of the financial asset or liability. That is, it is the rate that exactly
discounts the estimated future cash flows through the expected life of the instrument to the net
carrying amount at initial recognition.
A financial liability is held for trading if:
•
it is incurred for the purpose of repurchasing or repaying in the near term;
• part of a portfolio where there is an actual pattern of short-term profit taking; or
• a derivative financial instrument (except for a derivative that is in a financial guarantee contract
or a derivative that is in effective hedging relationships).
Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent
that they are not part of a designated hedging relationship are recognised in profit or loss.
The change in fair value of the financial liability attributable to changes in the issuer's credit risk is
taken to other comprehensive income and are not subsequently reclassified to profit or loss.
Instead, they are transferred to retained earnings upon derecognition of the financial liability. If
taking the change in credit risk in other comprehensive income enlarges or creates an accounting
mismatch, then these gains or losses should be taken to profit or loss rather than other
comprehensive income.
A financial liability cannot be reclassified.
Financial assets
Financial assets are subsequently measured at:
• amortised cost;
•
•
fair value through other comprehensive income; or
fair value through profit or loss.
Measurement is on the basis of two primary criteria:
•
•
the contractual cash flow characteristics of the financial asset; and
the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
•
•
the financial asset is managed solely to collect contractual cash flows; and
the contractual terms within the financial asset give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through
other comprehensive income:
•
the contractual terms within the financial asset give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding on specified dates; and
the business model for managing the financial assets comprises both contractual cash flows
collection and the selling of the financial asset.
•
By default, all other financial assets that do not meet the measurement conditions of amortised cost
and fair value through other comprehensive income are subsequently measured at fair value
through profit or loss.
41
Annual Financial Report
The Group initially designates a financial instrument as measured at fair value through profit or loss
if:
•
it eliminates or significantly reduces a measurement or recognition inconsistency (often referred
to as “accounting mismatch”) that would otherwise arise from measuring assets or liabilities or
recognising the gains and losses on them on different bases;
it is in accordance with the documented risk management or investment strategy, and
information about the groupings was documented appropriately, so that the performance of the
financial liability that was part of a group of financial liabilities or financial assets can be
managed and evaluated consistently on a fair value basis; and
it is a hybrid contract that contains an embedded derivative that significantly modifies the cash
flows otherwise required by the contract.
•
•
The initial designation of the financial instruments to measure at fair value through profit or loss is
a one-time option on initial classification and is irrevocable until the financial asset is derecognised.
Equity instruments
At initial recognition, as long as the equity instrument is not held for trading and not a contingent
consideration recognised by an acquirer in a business combination to which AASB 3:Business
Combinations applies, the Group made an irrevocable election to measure any subsequent
changes in fair value of the equity instruments in other comprehensive income, while the dividend
revenue received on underlying equity instruments investment will still be recognised in profit or
loss.
Regular way purchases and sales of financial assets are recognised and derecognised at
settlement date in accordance with the Group's accounting policy.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability
from the statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (ie when the obligation in the contract is
discharged, cancelled or expires). An exchange of an existing financial liability for a new one with
substantially modified terms, or a substantial modification to the terms of a financial liability is
treated as an extinguishment of the existing liability and recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the
consideration paid and payable, including any non-cash assets transferred or liabilities assumed,
is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or
the asset is transferred in such a way that all the risks and rewards of ownership are substantially
transferred.
All of the following criteria need to be satisfied for derecognition of financial asset:
•
the right to receive cash flows from the asset has expired or been transferred;
• all risk and rewards of ownership of the asset have been substantially transferred; and
•
the Group no longer controls the asset (ie the Group has no practical ability to make a unilateral
decision to sell the asset to a third party).
On derecognition of a financial asset measured at amortised cost, the difference between the
asset's carrying amount and the sum of the consideration received and receivable is recognised in
profit or loss.
42
Annual Financial Report
On derecognition of a debt instrument classified as at fair value through other comprehensive
income, the cumulative gain or loss previously accumulated in the investment revaluation reserve
is reclassified to profit or loss.
On derecognition of an investment in equity which was elected to be classified under fair value
through other comprehensive income, the cumulative gain or loss previously accumulated in the
investment revaluation reserve is not reclassified to profit or loss but is transferred to retained
earnings.
Impairment
The Group recognises a loss allowance for expected credit losses on:
•
financial assets that are measured at amortised cost or fair value through other comprehensive
income;
lease receivables;
•
• contract assets (eg amounts due from customers under construction contracts);
•
loan commitments that are not measured at fair value through profit or loss; and
•
financial guarantee contracts that are not measured at fair value through profit or loss.
Loss allowance is not recognised for:
•
• equity instruments measured at fair value through other comprehensive income.
financial assets measured at fair value through profit or loss; or
Expected credit losses are the probability-weighted estimate of credit losses over the expected life
of a financial instrument. A credit loss is the difference between all contractual cash flows that are
due and all cash flows expected to be received, all discounted at the original effective interest rate
of the financial instrument.
The Group uses the general approach to impairment, as applicable under AASB 9: Financial
Instruments.
Under the general approach, at each reporting period, the Group assesses whether the financial
instruments are credit-impaired, and if:
•
the credit risk of the financial instrument has increased significantly since initial recognition, the
Group measures the loss allowance of the financial instruments at an amount equal to the
lifetime expected credit losses; or
there is no significant increase in credit risk since initial recognition, the Group measures the
loss allowance for that financial instrument at an amount equal to 12-month expected credit
losses.
•
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognises the movement in the loss allowance as an impairment
gain or loss in the statement of profit or loss and other comprehensive income.
The carrying amount of financial assets measured at amortised cost includes the loss allowance
relating to that asset.
Assets measured at fair value through other comprehensive income are recognised at fair value,
with changes in fair value recognised in other comprehensive income. Amounts in relation to
change in credit risk are transferred from other comprehensive income to profit or loss at every
reporting period.
For financial assets that are unrecognised (eg loan commitments yet to be drawn, financial
guarantees), a provision for loss allowance is created in the statement of financial position to
recognise the loss allowance.
43
Annual Financial Report
(k) Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets
to determine whether there is any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value
less costs to sell and value in use, is compared to the assets carrying value. Any excess of the
assets carrying value over its recoverable amount is expensed to the consolidated statement of
comprehensive income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
(l) 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. 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 statement
of comprehensive income, 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 statement of comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from
the group’s presentation currency are translated as follows:
(i) assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
(ii) income and expenses are translated at average exchange rates for the period; and
(iii) retained profits are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the
group’s foreign currency translation reserve in the statement of financial position. These
differences are recognised in the statement of comprehensive income in the period in which the
operation is disposed.
(m) Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered
by employees to balance date. Employee benefits that are expected to be settled within one year
have been measured at the amounts expected to be paid when the liability is settled, plus related
on-costs. Employee benefits payable later than one year have been measured at the present value
of the estimated future cash outflows to be made for those benefits.
(n) Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow can
be reliably measured.
44
Annual Financial Report
(o) Cash and Cash Equivalents
Cash and cash equivalents includes 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-term borrowings in current liabilities on the statement of
financial position.
(p) Revenue
Revenue from the sale of goods is recognised upon delivery of goods to customers.
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
Dividend revenue is recognised when the right to receive a dividend has been established.
Dividends received from associates are accounted for in accordance with the equity method of
accounting.
Revenue from the rendering of a service is recognised upon the delivery of the service to the
customers.
All revenue is stated net of the amount of goods and services tax (GST).
(q) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances
the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the
expense. Receivables and payables in the statement of financial position are shown inclusive of
GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST
component of investing and financing activities, which are disclosed as operating cash flows.
(r) Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements 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.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting are recognised in the period in which the estimate is revised if the revision affects only
that period, or in the period of the revision and future periods if the revision affects both current and
future periods.
Key Sources of Estimation Uncertainty
The following key assumptions concerning the future, and other key sources of estimation
uncertainty at the reporting date that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year:
(i) Recoverability of Exploration and Evaluation Expenditure
The recoverability of the exploration and evaluation expenditure recognised as a non-current
asset is dependent upon the successful development, or alternatively sale, of the respective
tenements which comprise the assets.
(ii) Recoverability of Intangible Assets (Research & Development Expenditure)
The recoverability of capitalised research & development expenditure recognised as a non-
current asset is dependent upon the successful development, or alternatively sale, of the
45
Annual Financial Report
respective intellectual property which comprise the assets. Refer to Note 12 for details of how
the research and development expenditure has been valued.
(iii) Share based payment transactions
The fair value of any options issued as remuneration is measured using the Black-Scholes
model. Measurement inputs include share price on measurement date, exercise price of the
instrument, expected volatility (based on weighted average historic volatility adjusted for
changes expected due to publicly available information (if any)), weighted average expected
life of the instruments (based on historical experience and general option holder behaviour),
expected dividends, and the risk-free interest rate (based on government bonds).
(s) Intangibles Assets – Intellectual Property Development Expenditure
Such assets are recognised at cost of acquisition. Expenditure during the research phase of a
project is recognised as an expense when incurred. Development costs are capitalised only when
technical feasibility studies identify that the project is expected to deliver future economic benefits
and these benefits can be measured reliably. Development costs have a finite life and are
amortised on a systematic basis based on the future economic benefits over the useful life of the
project.
An intangible asset arising from development (or from the development phase of an internal
project) is recognised if, and only if, all the following are demonstrated:
•
the technical feasibility of completing the intangible asset so that it will be available for use or
sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
•
•
• how the intangible asset will generate probable future economic benefits;
•
the availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset; and
the ability to measure reliably the expenditure attributed to the intangible asset during its
development.
•
Capitalised development costs will be amortised over their expected useful life of the intangible
asset once full commercialisation or production commences.
(t) New and Amended Accounting Policies Adopted by the Group
None noted.
(u) New Accounting Standards for Application in Future Periods
None noted.
(v) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation in the current financial year.
46
Annual Financial Report
Note 2: Interests in other entities
(a) Controlled entities
The Group’s principal subsidiaries at 30 June 2023 are set out below. Unless otherwise stated, they
have share capital consisting solely of ordinary shares that are held directly by the group, and the
proportion of ownership interests held equals the voting rights held by the group. The country of
incorporation or registration is also their principal place of business.
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Netherlands
Netherlands
United Kingdom
Canada
Canada
Mauritius
Namibia
Namibia
UAE
Parent Entity:
Lepidico Ltd
Subsidiaries of Lepidico Ltd:
Lepidico Holdings Pty Ltd
Li Technology Pty Ltd
Silica Technology Pty Ltd
Bright Minz Pty Ltd
Mica Exploration Pty Ltd
Lepidico (Netherlands) Coöperatief U.A.
Lepidico (Netherlands) B.V.
Lepidico (UK) Ltd
Lepidico Holdings (Canada) Inc
Lepidico (Canada) Inc
Lepidico (Mauritius) Ltd
Lepidico Chemicals Namibia (Pty) Ltd
Lepidico Infrastructure Namibia (Pty) Ltd
Lepidico Chemicals Manufacturing Ltd
(b) Non-controlling interests (NCI)
Interest as at
30 June
(%)
2023
2022
Principal Activity
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100 Lithium Exploration and Investment
100 Holder of L-Max® Technology
100 Holder of S-Max® Technology
100 Holder of LOH-Max® Technology
100 Lithium Exploration
100
100 Global Marketing Company
100 Management Company
100 Holding Company
100 Management Company
100 Holding Company
International Holding Company
80 Exploration and Development Company
100 Dormant
100 Developer of Phase 1 Chemical Plant
Set out below is summarised financial information for Lepidico Chemicals Namibia (Pty) Ltd (LCN), the
subsidiary that has a non-controlling interest and is material to the group. The amounts disclosed for
the subsidiary are in Australian dollars (A$) before inter-company eliminations.
Summarised Balance Sheet
Current assets
Current liabilities
2023
$
2022
$
317,194
(418,903)
727,828
(7,124,841)
Current net assets/(liabilities)
(101,709)
(6,397,013)
Non-current assets
Non-current liabilities
Non-current net assets
Net assets
Accumulated NCI
22,492,194
(9,985,017)
20,479,630
(5,876,033)
12,507,177
14,603,597
12,405,468
8,206,584
7,111,896
6,404,389
47
Summarised statement of comprehensive income
Revenue
Annual Financial Report
2023
$
6,448,227
2022
$
8,157
Profit/(Loss) for the period
4,084,240
(1,157,879)
Other comprehensive income
114,644
(542,372)
Total comprehensive income
4,198,884
(1,700,251)
Profit/(Loss) allocated to NCI
707,507
(231,576)
Summarised cashflows
Cash flows from operating activities
Cash flows used in investing activities
Cash flows from financing activities
2023
$
2022
$
(1,259,874)
(2,433,272)
3,214,403
(608,101)
(2,765,633)
2,507,007
Net increase/(decrease) in cash and cash equivalents
(478,743)
(866,727)
Under the Shareholders’ Agreement Term Sheet, Lepidico Ltd, has the discretion to either finance all
expenditures of LCN and/or arrange for third party financing. LCN is currently funded via an interest
bearing intercompany loan facility between the Company and LCN.
Note 3: Revenue
Other Income
Deferred revenue recognised on termination
Interest
Profit on Sale of Fixed Assets
Realised FX gain
Other
Other Income
Total Revenue
2023
$
2022
$
6,447,728
274,374
-
301,393
-
7,023,495
7,023,495
-
1,442
8,157
37,742
2,262
49,603
49,603
48
Note 4: Administrative Expenses
Office & general
Professional services
Compliance related
Travel
Annual Financial Report
2023
$
758,837
859,757
588,172
370,528
2022
$
452,434
682,737
666,536
230,974
Total Administrative Expenses
2,577,294
2,032,681
Other Significant Administrative Expenses
The following significant expenses were incurred during the year
and impacted the financial performance:
Legal Dispute
211,206
-
Total Administrative Expenses
2,788,500
2,032,681
Note 5: Income Tax Expense
(a) The components of tax expense comprise:
Current tax
Deferred tax
Losses recouped not previously recognised
2023
$
-
643,777
-
2022
$
-
77,872
-
Income tax expense reported in statement of comprehensive
income
643,777
77,872
(b) The prima facie tax benefit on loss from ordinary activities
before income tax is reconciled to the income tax as follows:
Prima facie tax benefit on loss from ordinary activities before
income tax at 30% (2022:30%)
2023
$
2022
$
(888,104)
(2,359,040)
Add tax effect of:
- Share based payments
- Foreign expenditure
- Deferred tax balances not recognised
- Foreign tax rate differential
- Adjustments to income tax of previous years
- Permanent impact of R&D Claims
- Other non-allowable items
Less tax effect of:
- Deferred tax balances not recognised
- Losses recouped not previously recognised
229,950
168,923
441,008
76,497
11,545
436,816
167,142
546,750
-
2,215,209
(51,423)
(120,468)
-
(153,156)
-
-
-
-
Income tax expense reported in statement of comprehensive
income
643,777
77,872
49
(c) Deferred tax recognised:
Deferred Tax Liabilities:
Karibib assets
Exploration expenditure
L-Max® Technology
L-Max® Pilot Plant
Other
Deferred Tax Assets:
Carry forward revenue losses
Net deferred tax
(d) Unrecognised deferred tax assets:
Carry forward revenue losses
Capital raising and other costs
L-Max Licence
Borrowing costs
Bright Minz acquisition
Provision and accruals
Annual Financial Report
(3,055,201)
(4,245)
(718,190)
(727,762)
(22,082)
(2,384,718)
(4,245)
(298,445)
(726,432)
(17,416)
1,472,279
1,046,538
(3,055,201)
(2,384,718)
12,407,009
103,877
21,826
38,624
2,520
94,218
12,668,074
11,346,995
136,339
21,826
-
-
32,272
11,537,432
(e) Tax consolidation
Lepidico and its wholly owned Australian resident subsidiaries formed a tax consolidated group
effective from 1 July 2014. Lepidico Ltd is the head entity of the tax consolidated group.
The tax benefits of the above Deferred Tax Assets will only be obtained if:
a) The Company derives future assessable income of a nature and amount sufficient to enable
the benefits to be utilised;
b) The Company continues to comply with the conditions of deductibility imposed by law; and
c) No changes in income tax legislation adversely affect the Company in utilising the benefits
Note 6: Auditor’s Remuneration
Audit remuneration paid to the auditor of the parent entity
Audit remuneration paid to a subsidiary auditor (CRVW and Co)
2023
$
53,080
40,892
93,973
2022
$
50,354
38,544
88,898
50
Note 7: Earnings per Share
The calculation of basic profit or loss per share for each year was based on the profit or loss
attributable to ordinary shareholders and using a weighted average number of ordinary shares
outstanding during the year. The Company’s potential ordinary shares were not considered dilutive
as the Company is in a loss position.
Annual Financial Report
Profit/(Loss) attributable to the ordinary equity holders of the
Company
2023
$
2022
$
(0.0005)
(0.00127)
$
$
Profit/(Loss) from continuing operations
(3,604,123)
(7,941,340)
Weighted average number of ordinary shares
7,251,386,048
6,247,028,694
No.
No.
Note 8: Cash and Cash Equivalents
2023
$
2022
$
Cash at bank and in hand
10,828,962
8,042,822
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities
are disclosed in Note 24.
Note 9: Trade and Other Receivables
Current
Prepaid expenses
R&D tax rebate receivable
Goods and services tax receivable
2023
$
201,537
220,000
281,916
2022
$
120,108
1,503,314
580,810
Total Current Trade and Other Receivables
703,453
2,204,232
Non-Current
Cash backed guarantees and deposits
728,135
632,379
Total Non-Current Trade and Other Receivables
728,135
632,379
Total Trade and Other Receivables
1,431,588
2,836,611
51
Note 10: Property, Plant and Equipment
Buildings &
Infrastructure
Furniture,
Fittings &
Equipment
$
Motor
Vehicles
Assets under
Development
Right of
Use Asset
$
$
$
$
1,741,511
19,586
-
-
1,761,097
7,631
-
(19,585)
1,749,143
289,830
147,503
-
(20,400)
416,933
207,002
-
(53,262)
570,673
333,986
75,293
(84,048)
(17,844)
307,387
43,896
(20,066)
(9,123)
322,094
189,917
41,869
(43,688)
(6,606)
181,492
46,697
(20,066)
(13,087)
195,036
215,359
3,707
(25,536)
(12,176)
181,354
192,318
-
(380)
373,292
142,028
23,301
(25,537)
(6,626)
133,166
19,504
-
(14,550)
138,120
Cost
Balance at 1 July 2021
Additions
Disposals
Impact of foreign exchange
Balance at 30 June 2022
Additions
Disposals
Impact of foreign exchange
Balance at 30 June 2023
Accumulated Depreciation
Balance at 1 July 2021
Depreciation
Disposals
Impact of foreign exchange
Balance at 30 June 2022
Depreciation
Disposals
Impact of foreign exchange
Balance at 30 June 2023
Net Book Value
At 30 June 2022
Annual Financial Report
Total
$
4,683,663
6,934,049
(2,502,391)
415,980
9,531,301
8,727,165
(20,066)
246,231
18,484,631
2,392,807
-
(2,392,807)
-
-
8,483,320
-
-
8,483,320
-
6,835,463
-
446,000
7,281,463
-
-
275,319
7,556,782
2,392,807
-
(2,392,807)
-
-
-
-
-
-
-
198,540
-
10,393
208,933
298,122
-
11,857
518,912
3,014,582
411,213
(2,462,032)
(23,239)
940,524
571,325
(20,066)
(69,042)
1,422,741
1,344,164
125,895
48,188
-
7,072,530
8,590,777
At 30 June 2023
1,178,470
127,058
235,172
8,483,320
7,037,870
17,061,890
Note 11: Exploration and Evaluation Expenditure
2023
$
2022
$
Exploration expenditure
48,356,862
46,763,770
The recoverability of the carrying amount of exploration assets is dependent on the successful
development and commercial exploitation or sale of the respective mining permits. Amortisation of the
costs carried forward for the development phase is not being charged pending the commencement of
production. The impairment of exploration expenditure represents projects that the company is no
longer pursuing.
52
Reconciliation of movements during the year:
Balance at the beginning of year
Exploration and evaluation costs capitalised
Exploration and evaluation costs written off
Impact of foreign exchange
Annual Financial Report
2023
$
2022
$
46,763,770
2,214,751
(46,162)
(575,497)
43,986,682
3,359,636
(452,275)
(130,273)
Balance at the end of the year
48,356,862
46,763,770
Note 12: Intangible assets
L-Max® Technology
S-Max® Technology
LOH-Max® Technology
Lepidico Trademark
Intangible assets
2023
$
2022
$
27,970,788
152,328
628,130
21,874
28,413,680
149,017
502,664
-
28,773,120
29,065,361
The recoverability of the carrying amount of the L-Max®, S-Max® and LOH-Max® Technologies is
dependent of the successful development and commercial exploitation or sale of the asset.
Capitalised development costs will be amortised over their expected useful life of the intangible assets
once full commercialisation of production commences.
2023
$
2022
$
Reconciliation of movements during the year:
Balance at the beginning of year
Intangible costs capitalised
Intangible costs written off
Research and Development Tax Credit received/receivable
29,065,361
659,064
(56,901)
(894,404)
24,631,056
5,937,619
-
(1,503,314)
Balance at the end of the year
28,773,120
29,065,361
Note 13: Trade and Other Payables
Current
Trade payables
Sundry payables and accrued expenses
2023
$
2022
$
676,172
1,454,682
1,352,457
633,713
Total Current Trade and Other Payables
2,130,854
1,986,170
53
Note 14: Provisions
Current
Employee provisions
Total Current Provisions
Non-Current
Employee provisions
Make good provision (KEZAD)
Total Non-Current Provisions
Annual Financial Report
2023
$
2022
$
268,115
157,698
268,115
157,698
56,020
752,048
20,999
670,970
808,068
691,969
Total Provisions
1,076,183
849,667
Reconciliation of movements during the period:
Make Good
$
Employee
$
Balance at 1 July 2021
Additional provisions
Provisions used
Unwinding of discount
Impact of foreign exchange
Balance at 30 June 2022
Additional provisions
Provisions used
Unwinding of discount
Impact of foreign exchange
-
596,030
-
34,268
40,672
670,970
-
-
54,978
26,100
140,105
125,217
(90,878)
-
4,253
178,697
311,702
(165,103)
-
(1,161)
Balance at the end of the period
752,048
324,135
Note 15: Borrowings and Lease Liabilities
Current
Lease liabilities
Other borrowings
2023
$
565,588
29,689
2022
$
279,751
-
Total Current Borrowings and Lease Liabilities
595,277
279,751
Non-Current
Lease liabilities
Other borrowings
7,011,887
124,759
6,744,318
-
Total Non-Current Borrowings and Lease Liabilities
7,136,646
6,744,318
Total Borrowings and Lease Liabilities
7,731,923
7,024,069
54
(a) Lease liabilities
Annual Financial Report
(i) Land Lease
In October 2021 the Group entered into the Musataha lease agreement with Abu Dhabi Ports
securing the 57,000m2 site for the Phase 1 chemical plant for an initial term of 25 years.
Reconciliation of movements during the year:
Balance at the beginning of period
Additions
Lease repayments paid/payable
Interest expense
Impact of foreign exchange
2023
$
7,024,069
-
(286,619)
570,669
269,356
2022
$
-
6,239,562
-
358,735
425,772
Balance at the end of the year
7,577,475
7,024,069
(ii) Short-term and low value leases
The group has entered into short-term contractual arrangements for the leases of offices.
Typically, the duration of these contracts is for periods of one and two years.
Payments for short-term and low value leases
(b) Borrowings
2023
$
63,122
2022
$
-
During the year the Company entered into a Revolving Vehicle Financing Facility for N$2M
(approximately A$169,000) to acquire three vehicles for use by the Namibian based team.
Reconciliation of movements during the year:
Balance at the beginning of period
Additions
Repayments paid/payable
Interest expense
Impact of foreign exchange
Balance at the end of the year
2023
$
-
169,114
(13,352)
6,372
(7,686)
154,448
2022
$
-
-
-
-
-
-
Note 16: Deferred Revenue
Deferred revenue of $6,447,729 (US$4,558,272) represented a payment from Jiangxi Jinhui Lithium
Co Ltd (“Jinhui”) – a private Chinese corporation – under an offtake agreement dated 6 November 2017
and subsequently amended on 13 February 2018 (the Jinhui Lithium Offtake Agreement) which
provided for the purchase by Jinhui of beneficiated surface stockpile material from the Karibib project
in Namibia.
The payment was classified as deferred revenue and was expected to amortise against any future
shipments of the stockpile material. The Agreement does not contain any specific provisions regarding
repayment of any unamortised amounts.
55
On 16 November 2022, the Jinhui Lithium Offtake Agreement expired, and the Company recognised
the outstanding balance as revenue in the current period.
Annual Financial Report
Deferred revenue
Reconciliation of movements during the year:
Balance at the beginning of the year
Impact of foreign exchange
Revenue recognised on termination of Agreement
2023
$
2022
$
-
6,613,159
2023
$
6,613,159
(165,430)
(6,447,729)
2022
$
6,071,577
541,582
-
Balance at the end of the year
-
6,613,159
Refer Note 19 Contingent Liabilities.
Note 17: Contributed Equity
a) Share capital
2023
2022
Number
$
Number
$
Fully paid ordinary shares
Share Issue Costs
7,638,305,721
129,355,002 6,507,171,533
(7,093,816)
108,456,563
(5,800,837)
122,261,186
102,655,726
Ordinary shares have the right to receive dividends and, in the event of winding-up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and
amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the
Company.
Movements in ordinary share capital
Description
Date
Number of
shares
Issue
Price
$
Opening Balance
30 June 2022
6,507,171,533
102,655,726
Exercise under ATM Facility
Issue of Shares
Exercise of listed LPDOD options
Exercise of listed LPDO options
Exercise of unlisted options
Fair value of options exercised
Less: Share Issue Costs
10 October 2022
4 November 2022
Various
20 January 2023
11 October 2022
11 October 2022
-
1,055,554,990
578,698
500
75,000,000
-
0.026
0.018
0.026
0.030
0.016
-
600,000
19,000,000
15,046
13
1,200,000
83,380
(1,292,979)
Closing Balance
7,638,305,721
122,261,186
56
Annual Financial Report
b) Share options
As at reporting date, Lepidico has the following options on issue:
Number
527,777,631
67,500,000
18,090,000
67,500,000
109,500,000
790,367,631
Exercise Price
$0.030
$0.012
$0.020
$0.072
$0.026
Grant
4 November 2022
19 November 2020
11 July 2019
18 November 2021
28 November 2022
Expiry
4 November 2024
19 November 2023
14 January 2024
18 November 2024
28 November 2025
Options carry no dividend or voting rights. Upon exercise, each option is convertible into one ordinary
share to rank pari passu in all respects with the Group’s existing fully paid ordinary shares.
Movements in Options
Balance at 1 July 2021
Granted
Exercised
Expired
Balance at 30 June 2022
Granted
Exercised
Expired
Balance at 30 June 2023
c) Share based payments
Weighted
Average
Exercise
Price
$
0.029
0.072
0.021
0.049
0.030
0.029
0.016
0.029
0.031
Number
1,291,439,021
67,500,000
(355,089,087)
(218,175,411)
785,674,523
637,278,131
(75,579,198)
(557,005,825)
790,367,631
During the year the Company made the following share based payments:
(i) Related Party Options
On 28 November 2022, the Company issued a total of 109,500,000 options to directors,
employees and consultants under the Company’s Share Option Plan and were valued using
Black Scholes with the following assumptions:
Number of options in series
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Interest Rate
Value per option
Unlisted Options
109,500,000
$0.016
$0.072
79.9%
3 years
0.00%
2.98%
$0.007
57
Annual Financial Report
d) Warrants
As at reporting date, all warrants associated with the Desert Lion Energy Inc business combination
had expired.
e) Controlled Placement Agreement
The Company has a Controlled Placement Agreement (CPA) with Acuity Capital in place to provide
Lepidico with up to $7.5 million of standby equity capital to fund future product research and
development work, new process technology development and working capital. As collateral for the
CPA, Lepidico issued an initial 230,000,000 ordinary shares at nil consideration to Acuity Capital
(Collateral Shares) but may, at any time, cancel the CPA and buy back the Collateral Shares for
no consideration (subject to shareholder approval).
The facility expires on 31 January 2024.
During the year Lepidico raised A$600,000 (after costs) through the set-off of 23,100,000 Collateral
Shares (Set-off Shares) previously issued to Acuity Capital under the CPA. The Set-off Shares
had a deemed price of $0.026.
At 30 June 2023 there were 72,900,000 Collateral Shares held by Acuity Capital which, if unused
on the expiry date, are otherwise required to be returned to the Company upon expiration of the
CPA.
Note 18: Reserves
Option Reserve
Warrant Reserve
Foreign Currency Translation Reserve
Total Reserves
a) Option Reserve
2023
$
7,302,967
415,135
341,979
2022
$
6,619,847
415,135
1,009,733
8,060,081
8,044,715
The options reserve is used to recognise the fair value of all options on issue but not yet exercised.
Opening Balance
Share based payments for the year
Transfer of fair value on exercise of options
Closing Balance
2023
$
6,619,847
766,500
(83,380)
2022
$
5,345,140
1,822,500
(547,793)
7,302,967
6,619,847
58
Annual Financial Report
b) Warrant Reserve
The warrants reserve recognised the fair value of warrants contractually recognised under the
Desert Lion acquisition but not exercised.
2023
$
415,135
2022
$
415,135
c) Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of
foreign controlled subsidiaries.
Opening Balance
Movement during the year
Closing Balance
Note 19: Contingent Liabilities and Contingent Assets
a) Legal Dispute
2023
$
1,009,733
(667,754)
2022
$
850,669
159,064
341,979
1,009,733
Deferred revenue of $6,447,729 (US$4,558,272) represented a payment from Jiangxi Jinhui
Lithium Co Ltd (“Jinhui”) – a private Chinese corporation – under an offtake agreement dated 6
November 2017 and subsequently amended on 13 February 2018 (the Jinhui Lithium Offtake
Agreement) which provided for the purchase by Jinhui of beneficiated surface stockpile material
from the Karibib project in Namibia.
The payment was classified as deferred revenue and was expected to amortise against any future
shipments of the stockpile material. The Agreement does not contain any specific provisions
regarding repayment of any unamortised amounts.
On 16 November 2022, the Jinhui Lithium Offtake Agreement expired, and the Company
recognised the outstanding balance as revenue in the current period.
On 31 May 2023, the Company was advised that Jinhui filed a Notice of Arbitration under the
Arbitration Rules of the Singapore International Arbitration Centre (Notice).
The Notice includes a claim in the sum of US$4.6 million, being the amount received from
Jinhui in accordance with the Offtake Agreement.
The Company has retained Singaporean, Canadian, and Namibian litigation counsel and on
27 June 2023 submitted its Response to Notice of Arbitration in accordance with the
Arbitration Rules of the Singapore International Arbitration Centre (SIAC). Next steps in the
matter include formal appointment of each parties’ nominated arbitrators and the two
appointed arbitrators agreeing a joint nomination as the third arbitrator.
The Company believes that the arbitration is without merit and intends to vigorously defend
itself.
59
Note 20: Segment reporting
Reportable Segments
The Group operates two reportable segments, being mineral exploration and development of its
technologies including L-Max®, LOH-Max® and S-Max®, which reflects the structure used by the
Group’s management to assess the performance of the Group.
Annual Financial Report
Mineral
Exploration
$
Phase 1
Chemical
Plant
$
Intangibles Corporate &
Unallocated
items
$
$
Total
$
(i) Segment performance
Year ended 30 June 2023
Revenue
6,749,119
-
-
274,376
7,023,495
Profit/(Loss) before tax
5,311,837
(2,070,170)
(56,901)
(6,145,112)
(2,960,346)
Year ended 30 June 2022
Revenue
10,420
-
Profit/(Loss) before tax
(724,935)
(1,142,255)
-
-
1,441
11,861
(5,996,278)
(7,863,468)
(ii) Segment assets
At 30 June 2023
Mineral
Exploration
$
Phase 1
Chemical
Plant
$
Intangibles Corporate &
Unallocated
items
$
$
Total
$
49,979,128
16,247,735
28,993,120
11,232,439
106,452,422
At 30 June 2022
48,566,532
7,632,404
30,568,675
8,531,730
95,299,341
Geographical Information
(i) Segment performance
for the year ended:
30 June 2023
Revenue
Australia
$
Canada
$
Africa
$
UAE
$
Europe
$
Total
$
273,774
499
6,749,222
-
-
7,023,495
Profit/(Loss) before tax
(3,990,826)
(1,669,283)
5,128,653
(2,039,971)
(388,919)
(2,960,346)
30 June 2022
Revenue
1,334
107
10,420
-
-
11,861
Profit/(Loss) before tax
(4,119,291)
(1,071,111)
(927,774)
(874,536)
(870,756)
(7,863,468)
(ii) Segment assets
At 30 June 2023
40,415,845
179,038
51,109,226 14,726,799
21,514
106,452,422
At 30 June 2022
38,386,375
240,306
48,999,256
7,660,452
12,952
95,299,341
60
Annual Financial Report
Note 21: Commitments
Exploration lease commitments
The Group has committed to the following tenement expenditures to maintain them in good standing
until they are farmed out, sold, reduced, relinquished, exemptions from expenditure are applied or are
otherwise disposed of.
These commitments, net of farm outs, are not provided for in the financial statements and are:
Not later than one year
After one year but less than five years
Note 22: Cash Flow Information
Reconciliation of Cash Flow from Operations
with Loss after Income Tax
2023
$
2022
$
1,093,436
2,706,090
931,718
3,468,744
3,799,526
4,400,462
2023
$
2022
$
Loss after income tax
(3,604,123)
(7,941,340)
Adjustments items not impacting cash flow used in operations:
Depreciation and amortisation
Exploration expenditure written-off
R&D expenditure written-off
Fair value of options issued
Profit on sale of property, plant and equipment
Finance costs
Deferred Revenue recognised
Realised FX Gain
Income tax expense
Changes in assets and liabilities:
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
571,325
46,162
56,901
766,500
-
625,647
(6,447,728)
(301,393)
643,777
117,303
618,962
145,438
411,213
452,275
-
1,822,500
(9,562)
393,003
-
(37,742)
77,872
(980,588)
291,230
38,592
Cash flow from/(used) in operations
(6,761,229)
(5,482,547)
Note 23: Related Party Transactions
Key Management Personnel Remuneration
Cash salaries, fees and other short-term benefits
Post employment benefits
Share based payments
2023
$
3,869,766
72,033
710,500
2022
$
1,715,641
39,818
1,822,500
4,652,299
3,577,959
Detailed remuneration disclosures are provided in the remuneration report on pages 21 to 29.
61
Payments to director-related parties
Annual Financial Report
2023
$
2022
$
Payments to director-related entities(1)
766,749
2,609,905
(1) Payments were made to Strategic Metallurgy Pty Ltd, a company of which Mr Gary Johnson is a director and
beneficial shareholder. The payments were in relation to the development of L-Max® technology on an arm’s
length basis. As at 30 June 2023 invoices totalling $2,866 are payable (2022: $141,777).
Note 24: Financial Risk Management
The Group has exposure to the following risks:
(a) Credit Risk
(b) Liquidity Risk
(c) Market Risk
This note presents information on the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring risk, and management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework. Management is responsible for establishing procedures which provide
assurance that major business risks are identified, consistently assessed and appropriately mitigated.
The Group’s Audit & Risk Management Committee oversees how management monitors compliance
with the Group’s risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
(a) Credit Risk
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in
financial loss to the consolidated entity. The consolidated entity has adopted the policy of only dealing
with creditworthy counter-parties and obtaining sufficient collateral or other security where
appropriate, as a means of mitigating the risk of financial loss from defaults. The consolidated entity
measures credit risk on a fair value basis. The consolidated entity does not have any significant credit
risk exposure to any single counter-party.
The Group’s cash and cash equivalents are held with HSBC Bank and First National Bank Namibia,
and management consider the Group’s exposure to credit risk is low.
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The
Group’s maximum exposure to credit risk at the reporting date was:
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Note
8
9
2023
$
2022
$
10,828,962
1,431,588
8,042,822
2,836,611
12,260,550
10,879,433
62
Annual Financial Report
(b) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves from funds raised in the
market and by continuously monitoring forecast and actual cash flows. Typically, the Group ensures
it has sufficient cash on demand to meet expected expenditures, including servicing financial
obligations; this excludes the potential impact of extreme circumstances that cannot be reasonably
predicted, such as the COVID-19 pandemic.
The Company will need to raise additional capital to fund the development of the integrated Phase 1
L-Max® Plant. The decision on how and when the Company may raise future capital will largely depend
on the market conditions existing at that time.
The following table analyses the Group’s financial liabilities into relevant maturity periods based on
the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in
the table are the contractual undiscounted cash flows and hence will not necessarily reconcile with
the amounts disclosed in the statement of financial position.
2-5 years
$
-
2-5 years
$
-
30 June 2023
Note
Carrying
amount
$
Contractual
cash outflows
$
Within 1
year
$
1-2
years
$
Trade & other payables
Borrowings & Lease
Liabilities
13
15
2,130,854
2,130,854
2,130,854
-
7,731,923
18,243,534
922,144
631,817
1,875,048
Total
9,862,777
20,374,388
3,052,998 631,817
1,875,048
30 June 2022
Note
Carrying
amount
$
Contractual
cash outflows
$
Within 1
year
$
1-2
years
$
Trade & other payables
Borrowings & Lease
Liabilities
Deferred Revenue
13
15
16
1,986,170
1,986,170
1,986,170
-
7,024,069
6,613,159
17,394,023
-
279,751
-
559,502
-
1,678,506
-
Total
15,623,398
19,380,193
2,265,921 559,502
1,678,506
Assets pledged as security
The Company has provided a cash deposit of AED1,416,730 ($583,537) as a security deposit under
the Musataha Agreement.
The Revolving Vehicle Financing Facility for N$2M (approximately A$169,000) is secured by the three
acquired vehicles.
63
Annual Financial Report
(c) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates
and equity prices will affect the Group’s income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market risk exposure within
acceptable parameters, while optimising the return.
(i) Interest Rate Risk
As at and during the year ended on reporting date the Group had no significant interest-bearing assets
or liabilities other than liquid funds on deposit. As such, the Group’s income and operating cash flows
(other than interest income from funds on deposit) are substantially independent of changes in market
interest rates. The Group’s exposure to interest rate risk and the effective weighted average interest
rate for each class of financial assets and liabilities is set out below:
Financial assets
Cash assets
Floating rate
2.23%
10,828,962
0.02%
8,042,822
%
2023
$
%
2022
$
The Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash
equivalents in higher interest-bearing cash management account.
The Group has performed a sensitivity analysis relating to its exposure to interest rate risk over the
reporting period. The sensitivity analysis demonstrates the effect on the current year’s results and
equity values reported at the end of the reporting period which would result from a 1% change in
interest rates.
Change in Loss
Increase by 1%
Decrease by 1%
Change in Equity
Increase by 1%
Decrease by 1%
(ii) Currency Risk
2023
$
111,121
(108,983)
2022
$
102,159
(1,442)
111,121
(108,983)
102,159
(1,442)
The Group operates internationally and is exposed to foreign exchange risk on its financial assets and
liabilities. Fluctuations in exchange rates may have a significant effect on the cash flows of the
Company. Future changes in exchange rates could materially affect the Company’s results in either
a positive or negative direction. The Group’s currency risk arises primarily with respect to the
Namibian dollar (NAD) and South African Rand (ZAR), which are equivalent, Canadian dollars (CAD)
and United States dollars (USD). In addition, the Company has transactions in British pounds (GBP)
and Euro (EUR). The Group has not entered into any derivative financial instruments to hedge such
transactions. The Group reviews its foreign currency exposure, including commitments on an ongoing
basis.
64
Annual Financial Report
The Group’s exposure to currency risk arising on financial assets and financial liabilities denominated
in various currencies was :
30 June 2023
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Borrowing & lease liabilities
NAD
$
2,572,113
1,510,857
(3,280,229)
(1,933,379)
CAD
$
107,809
41,454
(438,249)
-
AED
د. إ
357,771
1651198
(708,365)
(18,482,091)
USD
$
305,053
84,087
(218,568)
-
GBP
£
68,696
1,575
-
-
EUR
€
-
8,543
-
-
Net currency exposure
(1,130,638)
(288,986)
(17,181,487)
170,572
70,271
8,543
30 June 2022
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Lease liabilities
Deferred Revenue
NAD
$
4,799,355
3,376,371
(5,731,570)
-
-
CAD
$
185,110
24,712
(16,180)
-
-
AED
د. إ
13,431
1,416,730
-
(17,780,400)
-
USD
$
7,436
5,550
(4,084)
-
(4,558,272)
GBP
£
20,867
-
(2,992)
-
-
EUR
€
-
8,543
-
-
-
Net currency exposure
2,444,156
193,642
(16,350,239)
(4,549,370)
17,875
8,543
The following significant exchange rates applied during the year:
1 USD:AUD
1 NAD:AUD
1 CAD:AUD
1 AED:AUD
Average rate
Reporting date spot rate
2023
2022
2023
2022
1.48594
0.08367
1.10925
0.40450
1.37864
0.09059
1.08885
0.38737
1.50566
0.07989
1.13629
0.40986
1.45080
0.08902
1.12525
0.39493
Sensitivity Analysis
The following table details the Group’s sensitivity arising in respect of translation of its financial assets
and financial liabilities to a 10% movement (2022: 10%) in the Australian dollar against the currencies
where it has significant currency risk at the reporting date, with all other variables held constant.
NAD
If the NAD had strengthened against the AUD
If the NAD had weakened against the AUD
CAD
If the CAD had strengthened against the AUD
If the CAD had weakened against the AUD
USD
If the USD had strengthened against the AUD
If the USD had weakened against the AUD
AED
If the AED had strengthened against the AUD
If the AED had weakened against the AUD
2023
A$
(9,032)
9,032
2022
A$
21,759
(21,759)
(32,837)
32,837
21,790
(21,790)
25,682
(25,682)
(660,024)
660,024
(704,195)
704,195
(645,712)
645,712
65
Annual Financial Report
(iii) Commodity Price Risk
The Group is operating primarily in the pr-development phase and accordingly the Group’s
financial assets and liabilities are not yet subject to commodity price risk.
(iv) Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue
as a going concern and to maintain a strong capital base sufficient to maintain future
exploration and development of its projects. In order to maintain or adjust the capital structure,
the Group may return capital to shareholders, issue new shares or sell assets.
There were no changes in the Group’s approach to capital management during the year. Risk
management policies and procedures are established with regular monitoring and reporting.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital
requirements.
Note 25: Parent Entity Financial Information
The following information relates to the legal parent only.
(a) Summary of Financial Information
Assets
Current assets
Non current assets
Total assets
Liabilities
Current liabilities
Non current liabilities
Total liabilities
Shareholders’ Equity
Issued capital
Reserves
Accumulated Losses
Total Shareholders’ Equity
Result of the parent entity
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
2023
$
2022
$
10,046,180
84,450,461
7,765,120
69,991,938
94,496,641
77,757,058
750,053
29,143
1,092,625
-
779,196
1,092,625
154,703,219
8,273,426
(69,259,200)
135,097,760
7,723,092
(66,156,419)
93,717,445
76,664,433
(3,102,781)
-
(3,782,671)
(75,555)
(3,102,781)
(3,858,226)
(b) Contractual commitments for the acquisition of property, plant and equipment
At 30 June 2023 the parent entity has no contractual commitments for the acquisition of property,
plant or equipment.
(c) Guarantees and contingent liabilities
At 30 June 2023 the parent entity has no guarantees or contingent liabilities other than as disclosed
in Note 19.
66
Directors’ Declaration
Annual Financial Report
In the opinion of the Directors of Lepidico Ltd (the Company):
1. The financial statements and notes and the remuneration disclosures that are contained in the
Directors’ Report, are in accordance with the Corporations Act 2001, including:
a. complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
b. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2023
and of its performance for the year ended on that date.
2. There are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
3. The Directors have been given the declarations required by Section 295A of the Corporations
Act 2001 from the chief executive officer and chief financial officer for the financial year ended
30 June 2023.
4. Note 1 confirms that the financial statements also comply with the International Financial
Reporting Standards as issued by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the Board of Directors.
__________________
Joe Walsh
Managing Director
Dated this 22nd day of September 2023
67
Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LEPIDICO LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Lepidico 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 comprehensive income, the consolidated statement of changes in equity and
the consolidated cash flow statement 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:
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
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the “Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the time
of this auditor’s report.
Key Audit Matters
We have determined the matters described below to be the key audit matters to be communicated in
our report.
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 year. 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.
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
68
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LEPIDICO LIMITED (CONTINUED)
Key Audit Matters (continued)
Carrying value of Property, Plant & Equipment, Exploration & Evaluation Expenditure and Intangible
Assets
Refer to Notes 1(h) and (s), Notes 10 Property, Plant & Equipment, 11 Exploration & Evaluation
Expenditure & 12 Intangible Assets
As at 30 June 2023 the Group had property,
plant & equipment of $17,061,890, capitalised
exploration and evaluation expenditure of
$48,356,862 and intangible assets with a
carrying value of $28,773,120 All three asset
categories form part of the Phase 1 Project
being developed in Namibia and Abu Dhabi.
The ability to recognise and to continue to defer
exploration-evaluation assets under AASB 6 is
impacted by the Group’s ability, and intention, to
continue to explore and evaluate the tenements
or its ability to realise this value through
development or sale.
The intangible asset includes the Group’s
investment in the L-Max® Technology, S-Max®
Technology and LOH-Max® Technology,
including the cost of acquisition of the
technology, subsequent development costs and
patent fees capitalised. As part of their annual
impairment review, management prepared an
analysis of the recoverable amount of the
technology which was, in part, based on a “fair
value less costs to sell” analysis. Note that given
the early stages of development of the
technology, there are inherent risks in relying on
forecast cash flows as a reliable estimate of
value-in-use.
The directors have also considered the results
of the vertically integrated Phase 1 Project
Definitive Feasibility Study (incorporating the
Karibib and Abu Dhabi assets), which was
completed in May 2020 (with the latest revision
being August 2023), in their impairment review
of the property, plant & equipment, exploration
and evaluation and intangible assets.
The carrying values of the property, plant &
equipment, capitalised exploration and
evaluation and technology assets were key
audit matters given the significance of the
technology exploration and development
activities to the Group’s balance sheet, and the
judgement involved in the assessment of their
values.
Our procedures included, amongst others the following:
• Assessing the methodologies used by management to
estimate recoverable amounts of the property, plant &
equipment, exploration and evaluation and technology
assets, including challenging the methodologies used,
testing the integrity of the information provided, and
assessing the appropriateness of the key assumptions
adopted based on our knowledge of the technology
and industry.
• Reviewing minutes of Board meetings, ASX
announcements, the latest professional technological
and other reports for evidence of any impairment
indicators or material adverse changes in relation to the
technology asset since completion of the Pre-
Feasibility Report. There were no such indicators
during the year.
• Testing expenditures and other additions to the
property, plant & equipment, technology and
exploration-evaluation assets during the year on a
sample basis against supporting documentation such
as supplier invoices and cost agreements and ensuring
such expenditures and additions are appropriately
recorded in accordance with applicable accounting
standards.
• Reviewing the Group’s rights to tenure to its areas of
interest and commitment to continue exploration and
evaluation activities in these interests and ensuring
capitalised expenditures relating to areas of interest
which are being discontinued or no longer being
budgeted for are appropriately impaired.
• Review of the latest updated JORC code (2012)
compliant mineral resource estimates, as completed by
external Consultants, in respect of ore reserves at
Karibib, Namibia.
• Review of the vertically integrated Phase 1 Project
Definitive Feasibility Study completed in May 2020 and
subsequent updates, which is based on a commercial
scale L-Max Plant, comprising an integrated mine,
concentrator and chemical conversion plant
development
• Compared the Group’s market capitalisation as at 30
June 2023 to its net asset position, noting that the
market capitalisation at balance date was less than net
assets. Market capitalisation below net assets is an
indicator of possible impairment, thereby requiring
further consideration.
• Assessing the appropriateness of the relevant
disclosures in the financial statements.
69
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LEPIDICO LIMITED (CONTINUED)
Key Audit Matters (continued)
Related Party Transactions & Share Based Payments to Key Management Personnel
Refer to Remuneration Report, Note 17 b) Share Based Payments, Note 23 Related Party Transactions
During the year ended 30 June 2023, the Group
transacted with Key Management Personnel
and their related entities including:
• Awarded share-based payments amounting
to $766,500 in the form of share options, to
Key Management Personnel
• Paid $766,749 in development and
consulting costs related to the L-Max
Technology
As these transactions are made with related
parties, there are additional inherent risks
associated with these transactions, including the
potential for these transactions to be made on
terms and conditions more favourable than if
they had been with an independent third party.
The value of the share-based payments is a key
audit matter due to it being a key material
transaction with members of key management
personnel, the valuation of which involves
significant judgement and accounting
estimation.
Our procedures included, amongst others the following:
• Enquiring and obtaining confirmations from Key
Management Personnel regarding related party
transactions occurring during the period.
• Reviewing minutes of meetings, ASX announcements
and agreements, and considered other transactions
undertaken during the financial year.
• Reviewing payments, receipts and general journals
throughout the year, and examining transactions with
known related parties, or those that appear large or
unusual for the Group.
• Evaluating, based on supporting documentation,
whether related party transactions were on an arms-
length basis.
• Assessing the valuation methodology used by
management to estimate fair value of share options
issued, including testing the integrity of the information
provided, assessing the appropriateness of the key
assumptions input into the valuation model and
recalculating the valuation using the Black Scholes
Model.
• Assessing whether the share-based payments have
been appropriately classified and accounted for in the
financial statements.
• Assessing the appropriateness of the relevant
disclosures in the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2023 but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
70
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LEPIDICO LIMITED (CONTINUED)
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located on the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf This description forms part of our
auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report as included in the directors’ report for the year ended
30 June 2023.
In our opinion, the Remuneration Report of Lepidico 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.
NEIL PACE
PARTNER
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
Signed at Perth this 22nd day of September 2023.
71
Annual Financial Report
Additional ASX Information
The Information set out below was applicable at 22nd September 2023.
1. Corporate Governance Statement
The Company’s Corporate Governance Statement can be found at
https://lepidico.com/resources#ASX%20announcements
2. Substantial shareholders
The Company does not have any shareholders holding a substantial interest, being 5.0% or
greater, in the issued capital of the Company.
3. Issued capital
The issued capital of the company consists of:
Quoted/
Unquoted
Quoted
Quoted
Unquoted
Unquoted
Unquoted
Unquoted
Class Number of units
Fully paid ordinary shares (LPD)
$0.03 Options (LPDO)
$0.012 Options
$0.02 Options
$0.072 Options
$0.026 Options
7,638,307,948
527,775,404
67,500,000
18,090,000
67,500,000
109,500,000
Number of
holders
14,251
2,463
7
9
7
13
4. Voting rights
Lepidico Ltd ordinary shares carry voting rights of one vote per share. There are no voting rights
attaching to any other class of security.
5. Holders holding less than a marketable parcel
The number of holders holding less than a marketable parcel of the entity’s main class of
securities are as follows:
Minimum $500.00 parcel at $0.01 per share
Minimum Parcel Size Holders
50,000
5,767
Shares
112,952,111
72
Annual Financial Report
6. Distribution of shareholders
The distribution of holders in each class of quoted securities are as follows:
Distribution of equity
securities
1-1,000
1,001–5,000
5,001–10,000
10,001-100,000
101,000 and above
Totals
Fully Paid Shares
LPD
Quoted Options
LPDO
Number of
holders
% of total
issued
Number of
holders
% of total
issued
970
276
340
6,808
5,857
14,251
0.00
0.01
0.04
3.97
95.98
100.00
197
561
291
862
552
2,463
0.02
0.29
0.41
6.83
92.44
100.00
The distribution of holders in each class of unquoted securities are as follows:
Distribution of equity
securities
1-1,000
1,001–5,000
5,001–10,000
10,001-100,000
101,000 and above
Totals
# Number of holders
% Percentage of total issued
Unquoted Options
$0.012
#
-
-
-
-
7
7
%
-
-
-
-
100
100
$0.02
#
-
-
-
-
9
9
%
-
-
-
-
100
100
$0.072
#
-
-
-
-
7
7
%
-
-
-
-
100
100
$0.026
#
-
-
-
-
13
13
%
-
-
-
-
100
100
73
7. 20 Largest shareholders
The names of the 20 largest holders of ordinary shares are as follows:
Shareholder
BNP Paribas Noms Pty Ltd
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Strategic Metallurgy Holdings Pty Ltd
BNP Paribas Nominees Pty Ltd ACF Clearstream
Perth Capital Pty Ltd
Acuity Capital Investment Management Pty Ltd
Mr Johannes Hendrik Thorburn
BNP Paribas Nominees Pty Ltd
Strategic Metallurgy Pty Ltd
1
2
3
4
5
6
7
8
9
10
11 Mr Ivars Vadzis
12
13
14
15 Mr Gavin Sidney Milroy Becker & Mrs Wendy Mary Becker
16 Mr Anthony Charles Kenworthy
T&G Corporation Pty Ltd
17
Neofractal Pty Ltd
18
Rennie Jackson SMSF Pty Limited
19
20 Ms Kelley Marie Attias
Superhero Securities Limited
Netwealth Investments Limited
Clickable Publishing Pty Ltd
Total
Annual Financial Report
No.
484,583,114
327,021,138
299,397,282
266,271,201
219,305,077
131,111,111
72,900,000
56,788,306
52,757,715
50,000,134
48,621,454
45,598,892
44,550,951
41,471,634
41,000,000
37,119,572
35,577,700
35,524,695
34,777,777
33,888,888
2,358,266,641
%
6.34%
4.28%
3.92%
3.49%
2.87%
1.72%
0.95%
0.74%
0.69%
0.65%
0.64%
0.60%
0.58%
0.54%
0.54%
0.49%
0.47%
0.47%
0.46%
0.44%
30.87%
74
The names of the 20 largest holders of quoted options are as follows:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Option Holder
Mrs Lynette Irene Brooks
Mr Antony Edward Anderson
Rookharp Capital Pty Limited
Mr Steven Parsons & Miss Chia Lu
The Subramaniam Family Pty Ltd
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Hunter Capital Advisors P/L
Ms Chunyan Niu
BNP Paribas Noms Pty Ltd
Mrs Doreen Joan Ellison
Wayne Dunlop Superannuation Pty Ltd
North Western Power Pty Ltd
Mr Dzung Quoc Can & Mrs Cam My Trinh
3M Holdings Pty Limited
Mishtalem Pty Ltd
Perth Capital Pty Ltd
Mr Shlomi Almoslinos
Spreadborough Family Super Pty Ltd
Mr Kin Wing Chan & Mrs Wai Shan Yap
Total
Annual Financial Report
No.
30,000,000
14,750,523
14,625,000
13,077,556
12,000,000
11,089,107
10,586,494
10,400,000
8,000,000
7,886,178
7,300,000
6,400,000
6,000,000
6,000,000
5,850,000
5,600,000
5,555,556
5,500,000
5,111,659
5,091,012
190,823,085
%
5.68%
2.79%
2.77%
2.48%
2.27%
2.10%
2.01%
1.97%
1.52%
1.49%
1.38%
1.21%
1.14%
1.14%
1.11%
1.06%
1.05%
1.04%
0.97%
0.96%
36.16%
8. Company secretary
The Joint Company Secretary is Ms Shontel Norgate and Mr Alex Neuling.
9. Registered office and principle administrative office
Suite 2, 680 Murray Street, West Perth, WA 6005. Telephone Number: +61 8 9363 7800
10. Register of securities
The register of securities is kept at Automic Pty Ltd, Level 2, 267 St Georges Terrace, Perth, WA
6000. Telephone number: 1300 288 664
11. Other stock exchanges
The Company’s securities are quoted on the Frankfurt Stock Exchange under the code
AUB:FRA
75
12. Restricted securities or securities subject to voluntary escrow
There are currently no restricted or escrowed securities.
13. Unquoted securities
Annual Financial Report
In accordance with Listing Rule 4.10.16, the following persons hold 20% or more of the equity
securities in an unquoted class:
Class
Holder
$0.02 Options
$0.012 Options
$0.072 Options
Tim Johnston
Julian (Joe) Walsh
Julian (Joe) Walsh
Number
of units
5,130,000
15,000,000
15,000,000
% Held
28.36%
22.22%
22.22%
14. Review of Operations
A review of operations and activities for the reporting period that complies with Section 299 and
299A of the Corporations Act 2001 are outlined in the Directors’ Report.
15. On market buy backs
There is no current on-market buy-back of Lepidico Ltd shares.
16. Schedule of mineral tenements
The Company currently holds interests in tenements as set out below.
NAMIBIAN OPERATIONS, Karibib Project
Tenement ID
Registered Holder
ML 204
EPL 5439
Lepidico Chemicals Namibia (Pty) Ltd
Lepidico Chemicals Namibia (Pty) Ltd
Lepidico
Interest
80%
80%
Expiry Date
Area
18/06/2028
09/06/2024
69 km2
165 km2
76