LEPIDICO LTD
ACN 008 894 442
FINANCIAL REPORT 2024
Annual Financial Report
2
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
Consolidated Entity Disclosure Statement ................................................................ 66
Directors’ Declaration .................................................................................................. 67
Independent Auditor’s Report .................................................................................... 68
Additional ASX Information ........................................................................................ 72
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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
Suite 2, 680 Murray Street
West Perth, WA, Australia, 6005
PO Box 536 West Perth WA 6872
Website: www.lepidico.com
Country of Incorporation
Australia
Auditors
Moore Australia Audit (WA)
Level 15, Exchange Tower
2 The Esplanade
PERTH WA 6000
Telephone: (08) 9225 5355
Facsimile: (08) 9225 6181
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, LPDOE
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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 2024 (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:
Mr Gary Johnson
Non-executive Chair
Mr Joe Walsh
Managing Director
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 45 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, Risk & Sustainability Committee
Member of the People Committee: Remuneration, Nomination & Diversity
Other Current Directorships of listed public companies:
Director of Antipa Minerals Ltd (ASX listed)
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:
None
Other Current Directorships of listed public companies:
None
Former Directorships of listed public companies in the last 3 years:
None
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Mr Mark Rodda - Non-Executive Director
Qualifications - BA, LLB
Mr Rodda is a lawyer, consultant and public company director with around 30 years of 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, Mark held the position
of General Counsel and Corporate Secretary for LionOre Mining International Ltd, a Top 10 nickel
producer globally with operations in Australia and Africa and listings on the TSX, LSE and ASX.
Special responsibilities:
Chair of the People Committee: Remuneration, Nomination & Diversity
Member of Audit, Risk & Sustainability Committee
Other Current Directorships of listed public companies:
Director of Antipa Minerals Ltd 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 of Montreal, Scotiabank and ScotiaMcLeod in the corporate and
investment banking 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.
Former Directorships of listed public companies in the last 3 years:
None
Ms Cynthia Thomas – Non-Executive Director
Qualifications – B.Com, MBA
Special responsibilities:
Chair of Audit, Risk & Sustainability Committee
Member of the People Committee: Remuneration, Nomination & Diversity
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 the 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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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 2024, and the number of meetings attended by each director.
Full Board Meetings
Audit, Risk &
Sustainability
Committee
Meetings(1)
People Committee:
Nomination,
Remuneration & Diversity
Committee
Meetings(2)
No. eligible
to attend
No.
attended
No. eligible
to attend
No.
attended
No. eligible
to attend
No.
attended
Mr Gary Johnson
5
5
3
3
2
2
Mr Joe Walsh
5
5
0
0
1
1
Mr Mark Rodda
5
5
3
3
3
3
Ms Cynthia Thomas
5
5
3
3
3
3
(1)
During the year the Audit Committee and Sustainability & Risk Committee were combined to form the Audit, Risk & Sustainability
Committee
(2)
During the year the Nomination & Remuneration Committee and Diversity Committee were combined to form the People
Committee: Nomination, Remuneration & Diversity
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:
Number of fully
paid ordinary
shares
Number of
options
Mr Gary Johnson
350,127,030
30,717,686
Mr Joe Walsh
46,519,286
49,811,071
Mr Mark Rodda
-
23,333,333
Ms Cynthia Thomas
-
23,333,333
396,646,316
127,195,423
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
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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.
The Company cannot and does not give any assurance that neither the results, performance or
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.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the financial year were mineral exploration and
development, and the development of proprietary technologies, that include: L-Max®, LOH-Max® and
caesium-rubidium extraction.
OBJECTIVE
The Group’s strategic objectives are to: 1) fast track the business to free cash flow generation; 2)
demonstrate the commercial viability of L-Max®/LOH-Max®; and 3) 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 year 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 as either an integrated project with an
installed capacity of 5,700tpa (4,500tpa nominal) lithium hydroxide production or sequentially, initially
producing a lithium mica concentrate for export ahead of the development of downstream chemical
conversion capacity that employs the Company’s proprietary technologies.
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.
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SUMMARY REVIEW OF OPERATIONS
For the financial year ending 30 June 2024, the Group recorded a net loss after tax of $7,068,212 (2023:
net loss after tax $3,604,123) and a net cash outflow from operations of $5,714,405 (2023: net cash
outflow $6,761,229).
The net assets of the Group decreased to $88,470,518 at 30 June 2024 (2023: $92,458,261).
DEVELOPMENT & FINANCE
Finance
Lepidico’s strategic imperative remains to advance the business to free cash flow generation. A
secondary imperative is to demonstrate the commercial viability of its proprietary process technologies.
The financing strategy for the vertically integrated Phase 1 Project has centred on core funding from the
public sector for both the Karibib mine-concentrator and the downstream Abu Dhabi chemical plant,
alongside private sector equity. Most recently Karibib is considered as a starter project producing
concentrate for supply to third-party converters, ahead of a development of Lepidico’s chemical plant.
Namibia Mine & Concentrator
Securing finance for the now sub-US$50 million mine and mineral concentrator in Namibia is the main
priority, with the U.S. Government’s DFC continuing to be the lender of choice, as per the formal mandate
letter of October 2020. Subsequently, extensive technical, environmental and social independent due
diligence has been successfully undertaken by DFC. Positive feedback from DFC towards the Phase 1
Project continued to be received during the year, which in part is understood to be associated with its
unique attributes as a supplier of all three critical minerals, lithium, caesium and rubidium.
The alternative, sequential (versus parallel) development strategy, where the mine and concentrator are
prioritised – selling lithium mica concentrate to third parties – ahead of committing to the downstream
chemical plant continues to be considered by select prospective partners. Marketing of lepidolite
concentrate from Karibib by a U.S. trading company is being undertaken with interest from Chinese
lithium mica converters demonstrated through entering into confidentiality arrangements and the
provision of technical data and ore samples for review.
A binding concentrate offtake agreement is under negotiation (see Product Marketing below) and
represents a priority to provide strategic equity partners – that have undertaken considerable due
diligence – with the necessary confidence to make a commitment.
Staged development, with Karibib supplying concentrate to a third party (or parties) with a subsequent
commitment to the downstream chemical plant, is far less onerous than securing the multiple finance
facilities necessary for the vertically integrated project. This staged development strategy can now be
advanced with greater confidence, following the U.S. Government providing the “FINAL Interpretive
Guidance on Foreign Entities of Concern”, effective 6 May 2024.
Identification of a strategic partner that is not a Foreign Entity of Concern (FEOC) is required for DFC to
restart and complete legal due diligence. Lepidico will also ensure that key development contracts are
not with an FEOC.
Abu Dhabi Chemical Plant & Australia-UAE CEPA
Securing a partner and/or cornerstone public sector financier for the Abu Dhabi chemical plant has proved
to be more challenging than initially envisaged, given the enthusiasm voiced for the project and which led
Lepidico to the selection of KEZAD as the industrial park for development. Potential remains for UAE
public sector involvement, with support provided by Australian Government departments in parallel with
the ongoing negotiation of a bilateral free trade agreement, the Comprehensive Economic Partnership
Agreement (CEPA), between the two countries, which was announced in December 2023 and is targeted
for finalisation later in 2024.
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One of the key Australia-UAE CEPA negotiating objectives is to “facilitate two-way investment between
Australia and the UAE, including in those sectors that underpin the energy transition”.
Lepidico is proposing bilateral support via the CEPA for the Phase 1 chemical plant. Development of a
production capability of lithium and other critical minerals in Abu Dhabi by an Australian company using
Australian-developed technology that is far more sustainable than incumbent process techniques for the
conversion of hard rock lithium mineral concentrates represents a compelling opportunity. However, more
time is required for public sector discussions to advance sufficiently, which underpins Lepidico’s approach
to prioritising the development of Karibib as a starter project.
Government Support
Government financial support is proving to be an essential component of blended finance packages for
critical minerals project developments, evidenced by Department of Energy funding under the Inflation
Reduction Act for some of the more advanced lithium projects in the U.S. and the U.K. Government’s
investment in Cornish Lithium Plc, which is using Lepidico’s process technologies under licence for the
local processing of concentrate from its Trelavour lithium mica project.
Most recently, Lepidico has made a preliminary submission for grant funding for the sustainable
production of critical minerals under the (US) Industrial Base Analysis and Sustainment (IBAS) Program,
for the development of production capability in the U.S., Canada or the UK. This initiative is to optimise
the manufacture of caesium (Cs) and rubidium (Rb) chemicals for key industrial applications in these
markets. Both caesium and rubidium are defined as critical minerals by the USA with current supply
available only from FEOC countries.
Phase 1 Development
Lepidico remains determined to pursue the development of a chemical conversion plant in Abu Dhabi
given the associated strategic advantages: established infrastructure; availability of affordable energy,
sulphur and other reagents; local markets for bulk products including silica and the gypsum residue; and
availability of skilled/semi-skilled labour.
Continued engagement with several leading equipment manufacturers for the chemical plant has led to
material cost savings being identified and shorter lead times for equipment supply. Lepidico has been
working with a leading crystalliser supplier to assess the economics of developing a manufacturing
capability in the UAE. Fabrication of structural and plate steel components has been revealed to be cost-
competitive with existing Chinese facilities. As a result, delivery costs and times will be dramatically
reduced, while local just-in-time delivery should provide additional flexibility during construction. Lepidico
is also working with equipment manufacturers with an established local presence in the UAE to bundle
equipment into larger packages. Other activities during the year included a review of operating
expenditure to optimise local economic benefit and supply chain support, and thereby assess potential
industrial incentives for power, energy and land use, which should further improve project economics.
Alternative implementation options were identified and evaluated for the Karibib mine and concentrator,
during the year. These include 1) Engineering, Procurement and Construction (EPC) under a Lump-Sum
Turn-Key (LSTK) contract model; 2) mobile crusher; 3) prefabricated non-process buildings; and 4)
contract mining. An option for a third-party renewables-based power supply to Rubicon for 30% of the
power need, bundled with the 29km grid connection power line and financed off-balance sheet remains
a work in progress.
Total capital expenditure under the Karibib options study has fallen to less than US$50 million (2024 real)
with an increased contingency of 20% on owner’s costs, versus US$63 million before sunk costs in the
2022 control estimate. A revised estimate for unit operating costs shows a modest 4% increase. Average
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unit operating costs for the first 5 years of operation are estimated at US$319/t FOB1 and US$392/t CIF2,
for production of a 3.0% Li2O concentrate on average. This operating cost convention is similar to that
used by Western Australian spodumene miners to allow comparison.
Feedback from commercial lenders is that an EPC implementation for smaller-scale developments such
as Karibib is desirable under an LSTK model.
A mobile crusher will provide considerable flexibility with multiple open pits as well as remote stockpiles
being introduced into the ore mining schedule and allow conventional road trucks to be used for ore
haulage from sources remote to Rubicon.
Contract mining will provide future flexibility, including the adoption of more cost-effective and sustainable
(electric) mobile fleet options as they become available at the necessary scale and competitive price
point.
Stage 2 implementation works, conducted under the Engineering Procurement & Construction
Management (EPCM) contracts for both the Abu Dhabi chemical conversion plant and the Karibib
concentrator will resume once project funding is secured.
By way of background, Lepidico’s technologies provide a far more sustainable alternative to roasting for
converting lithium mica minerals.
•
L-Max® and LOH-Max® are hydrometallurgical processes that convert lepidolite concentrates to
lithium hydroxide with no solid process waste generated, no effluent and no sodium sulphate. By-
product revenues can be realised from caesium, rubidium, SOP, amorphous silica and a gypsum-
rich residue. Energy intensity and greenhouse gas emissions are both relatively low.
•
Phase 1 in Abu Dhabi has been de-risked by 4 pilot trials – each plant being progressively larger
scale than the prior facility – and an exhaustive risk-based process design review during FEED that
was completed in November 2022. Phase 1 is ready to transition to construction on securing finance.
Life of mine All In Sustaining Costs (AISC)3 for the integrated project are estimated to average US$8,730/t
Lithium Carbonate Equivalent (LCE) (US$7,680/t lithium hydroxide) while C1 costs are estimated at
US$5,890/t LCE (US$5,185/t lithium hydroxide), after by-product credits (ASX Announcement, Phase 1
Project Economics Updated, 30 October 2023). Chemical plant by-products include caesium, rubidium,
amorphous silica, sulphate of potash (SOP) and a gypsum-rich residue, with no solid process waste.
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.
Product Marketing
New interest continues to be received from lithium mica converters in the relatively high-quality
concentrate that can be produced from the Rubicon and Helikon deposits. The concentrate is estimated
to grade between 2.5-3.5% Li2O over the life of mine and over 3.0% Li2O for at least the first 5 years of
1 Unit operating cost (FOB Walvis Bay excluding freight and royalties) includes mining, processing, transport, port
charges, and site based general and administration costs and is net of any by-product credits. It is calculated on an
incurred basis and excludes depreciation of fixed assets and right of use leases, and amortisation of deferred stripping.
2 Unit operating cost (CIF China) includes the unit operating costs (FOB Walvis Bay excluding freight and royalties) plus
freight and royalty costs. Royalty costs include a 2% government royalty on the FOB selling price.
3 C1 cash costs: Brook Hunt convention for the reporting of direct cash costs comprising mine site, product
transportation and freight, treatment and refining charges and marketing costs.
AISC or C3: C1 cash cost plus royalties; corporate support and shared services costs; sustaining capital; lease principal
and interest charges; and deferred mining and inventory adjustments capitalised.
Net of by-product credits LCE basis: costs for lithium and other products after deduction of credits for by-product
revenues, per tonne of recovered lithium chemical.
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operation, significantly above what most operations in China can achieve and with relatively low levels of
deleterious elements.
Lepidico is working on a binding concentrate offtake agreement with the U.S. trading company that has
been marketing Karibib material since April 2023 and conducted the tender process in September 2023.
Unsolicited interest in Karibib concentrate along with finance has also been received from other trading
companies.
Lepidico Chemicals Manufacturing 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.
The Company continues to work with Traxys to place the lithium hydroxide produced from the Phase 1
KEZAD plant on mutually beneficial terms that are sustainable, and effectively manage price risk for
supplier and consumer throughout a cycle. Offtake negotiations have slowed due to the prevailing lithium
price weakness that has caused many consumers to continue to delay making new commitments for
lithium chemicals.
Initiatives for further refining and development of caesium chemicals continue in collaboration with a
leading chemical company.
A body of work has also started with a world-leading research university for the evaluation of rubidium,
with the objective of supporting its use as a substitute for caesium in certain applications.
Letters of Intent (LOIs) are in hand from customers in the UAE for volumes exceeding the expected
production of amorphous silica, SOP and gypsum-rich residue.
Sustainability
During the year, the Company finalised its Sustainability and Climate Strategies. The Sustainability
Strategy is built on four pillars: Planet, People, Partnerships & Processes, and Prosperity. These
Strategies were developed with IBIS Consulting in collaboration with Lepidico’s management and are
aligned with the UN Sustainable Development Goals; the International Council on Mining and Metals
principals; the Taskforce on Climate-related Financial Disclosures; and the Intergovernmental Panel on
Climate Change’s latest assessment report.
Embedded within the Climate Change and Energy Strategy is a commitment to follow a Paris agreement
aligned decarbonization pathway, which is compatible with a 1.5oC temperature scenario in our own
operations. The Strategy supports decarbonization via Lepidico’s innovative proprietary low-carbon
lithium manufacturing solutions, as well as by progressive electrification, implementation of new
adaptation solutions across operations and support of host communities to adapt to the physical impacts
of climate change.
The goal is net zero by 2050 with specific targets set for years 2035, 2040 and 2050. The KPIs are
focused on scope 1, 2 and 3 GHG emissions targets and efficient non-carbon generating energy usage.
IBIS Consulting also conducted a revised GHG assessment that shows the Phase 1 Project’s Scope 1,2
& 3 emissions estimates are more than 43% below the hard rock lithium industry average.
Modern sustainability and climate strategies are designed to be bankable, and Lepidico’s Sustainability
Strategies are designed to meet the most stringent lender requirements at the company’s current stage
of development.
The structure for sustainability reporting in accordance with the Global Reporting Initiative (GRI) has been
finalised and data collation has started for Lepidico’s first Sustainability Report against GRI standards.
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A Human Rights gap analysis of Lepidico’s systems was also completed, which generated an action plan
that will be progressively implemented through the project development phase and into operations.
Lepidico is committed to the safety and well-being of its employees, contractors and the community,
diversity, equity, inclusion and respect for human rights.
Business Development & Licencing
SPV – Lepidico Strategic Chemicals Manufacturing LLC-OPC
Lepidico continues to receive recognition for the unique opportunity that the L-Max® and LOH-Max®
technologies provide for a low-energy intensity lithium chemical conversion solution with exceptional
green credentials, including no solid process waste and no process effluent.
A Special Purpose Vehicle (SPV) has been established, Lepidico Strategic Chemicals Manufacturing
LLC-OPC, for collaboration in the UAE on lithium opportunities aside from the existing Phase 1 Project.
Associated with the establishment of Lepidico Strategic Chemicals Manufacturing LLC-OPC, samples of
three different styles of mineralisation were dispatched in May to Strategic Metallurgy for L-Max®
amenability testing. Due to the size of the samples they had to be diverted to Brisbane for routine gamma
irradiation for bio-security purposes. Test work will start as soon as the samples are received.
Cornish Lithium and Strategic Metallurgy
A representative from Strategic Metallurgy (SM) was contracted to Cornish Lithium Plc (Cornish Lithium)
during the advanced stages of construction of its £9 million (A$17.7 million) facility to process lithium mica
mineralisation from its Trelavour Project in Cornwall. This complex comprises a flotation plant to produce
a predominantly zinnwaldite and polylithionite concentrate, a hydrometallurgical facility that will produce
battery-grade lithium hydroxide using, under licence, Lepidico’s L Max® and LOH Max® technologies and
a visitors’ centre. Cornish Lithium selected the technology based on its exceptionally low carbon
emissions, environmental benefits and its ability to deliver superior product quality from lithium-bearing
mica concentrates, which includes valuable by-products. Whilst still a lithium mica deposit, the Trelavour
project is predominantly zinnwaldite and polylithionite mineralisation, whereas Lepidico’s Karibib deposits
are lepidolite/lithian muscovite dominant, which demonstrates the flexibility of the Company’s processing
technologies across the breadth of lithium mica mineral species.
Bulk samples have been mined, with concentration scheduled for August 2024. Commissioning of the
hydrometallurgical plant is now expected to start in September 2024, with three SM staff contracted to
provide support. Production is planned for throughout the latter part of the year and into 2025, operating
for 3,600 hours across 15 separate continuous campaigns at a design rate of 15kg/hr of mica concentrate
feed. The facility includes an onsite 'state of the art' laboratory to confirm the efficacy and efficiency of
the plant.
By way of background, Lepidico granted Cornish Lithium an exclusive technology licence in 2020 for an
upfront payment of £2.3 million to process feedstock sourced from the St Austell granite region, an area
of approximately 93 km2. The technologies include the proprietary L-Max®, LOH-Max® and caesium-
rubidium manufacturing processes.
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EXPLORATION4
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 for which the Namibian tenements are prospective, 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 20 years,
expand the Resource base to support the Phase 2 Scoping Study and evaluate the Karibib licences for
their gold potential.
Mineral Resource & Ore Reserve development
A short reverse circulation drilling program was completed at Helikon 4 during the reporting period to test
mineralisation extension down dip. A total of 8 holes for 707 metres were completed, with six of the holes
intercepting pegmatite, confirming a 20m - 30m down-dip extension over a 40m – 60m strike. The results
also indicate the presence of a fault at depth potentially truncating the mineralised system down-dip.
Regional Exploration and Scout Drilling
Three scout holes were drilled into a new target A1, located within regional target RT001. Regional targets
are worked up using an in-house algorithm based on regional geophysics and structural interpretation,
followed by gridded soil sampling and analysis by portable XRF for K, Rb and Cs and then ground
magnetics over selected zones. The aim of this work is to seek out new areas of LCT-type pegmatite
mineralisation that do not outcrop. RT001 is one of 17 such targets delineated within the Karibib project
tenements.
Target A1 is defined by an outcrop of pegmatitic granite coincident with a structural feature that was
defined by ground magnetics. The orientation of this feature is parallel to the trend of the Rubicon
pegmatite 2 km southeast. All the holes intercepted pegmatitic granite, with one hole intersecting a 17m
interval of perthite-quartz-muscovite pegmatite.
Recent exploration activities have been largely limited to regional and reconnaissance work within
ML204 and EPL5349, due to road access being blocked to a priority drill target. In the March 2024
quarter, Lepidico Chemicals Namibia filed a motion with the High Court in Namibia against a local
property owner for a locked gate that denies access to a public road. Hearing of the case has proved
to be an iterative process that has resulted in multiple delays. Exploration can resume once ground
access is secured and subject to funding.
The Karibib Camp remains on care and maintenance with a downsized staff complement largely
working from home.
4 Compliance Statement
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”), 7 March 2023 (“Replacement
Announcement – Helikon 4 Ore Reserve”) and 30 October 2023 (“Phase 1 Project Economics Updated Operating Costs & Long-Term
Margins Improved”). 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.
Annual Financial Report
14
CORPORATE
Cash and Facilities
At 30 June 2024, the Company held $4.7 million in cash and cash equivalents.
Following the Entitlement Offer, the Company implemented further cash-saving measures including
termination of consultants and encouraging employees to take Annual Leave to reduce the Company’s
liabilities. The Karibib camp remains on “care and maintenance”. In July 2024, Mr Hans Daniels, GM
Operations – UAE resigned effective from 30 August 2024. Mr Daniels’ responsibilities will be re-
distributed to other key members of the Lepidico group while the Company focuses on securing additional
funding.
At-the-Market Facility Extension
On 26 January 2024, the Company agreed with Acuity Capital to extend the expiry date of its At-the-
Market Subscription Agreement (“ATM”) (previously referred to as a Controlled Placement
Agreement) from 31 January 2024 to 31 January 2027.
As previously announced, the ATM was initially established with an expiry date of 31 January 2021
and provided Lepidico with up to $7.5 million of standby equity capital (see announcements on
23 December 2019 and 30 January 2022). In January 2022 the ATM expiry date was extended to
31 January 2024 (see announcements above). There were no fees or costs associated with the
extension of the ATM. No additional security has been provided or is required in relation to the ATM
extension.
Lepidico has utilised the ATM to raise a total of $3.525m and the remaining standby equity capital
available under the ATM is $3.975m. There is no requirement on Lepidico to utilise the ATM and the
Company may terminate the ATM at any time without cost or penalty.
Acuity Capital holds 72,900,000 fully paid ordinary LPD shares as security against the ATM. At 30
June 2024, the Company’s share price closed at $0.003 which could raise $218,700, before fees,
based on the number of shares held as security.
Entitlement Offer
The Renounceable Entitlements Offer announced on 4 April 2024 (the “Offer”) closed raising
$2,852,438 (before costs).
The Company issued 950,812,527 new fully paid ordinary shares (“Shares”) and 475,406,263 new
options exercisable at $0.009, with an expiry date of 7 November 2026 (“Options”). The Options are
quoted under the ASX code LPDOE.
The net proceeds, along with the Company’s existing cash reserves, will be allocated to finalising
Phase 1 Project financing, including strategic partner and lender due diligence, and advance
business development opportunities for collaborations on previously unidentified, potentially large-
scale lithium mica deposit evaluations, and working capital.
Mahe Capital Pty Ltd acted as Lead Manager and Underwriter to the rights issue.
Jefferies Engagement
On 2 September 2024, the Company announced it had engaged Jefferies International Limited
(“Jefferies”) to act as the Company’s exclusive financial advisor in connection with maximising the
value of the Karibib Lithium Project, with potential to expand scope as strategically attractive. A wide
breadth of deal structures may be considered, from securing a minority equity partner to an asset
sale.
Annual Financial Report
15
Outreach to potential partners includes entities where the Company has previously had engagement,
as well as to new prospective partners that have been identified as having interest in direct
involvement in upstream hard rock lithium assets, with most transaction types to be considered.
Organisations that have specific interest in Lepidico’s novel and sustainable proprietary lithium mica
process technologies may also be considered. The outreach is global and spans organisation types
that include, but is not limited to, private corporations, state owned enterprises, investment funds
and private equity.
All transaction proposals will be assessed based on certainty, sustainability and for their ability to
maximise value for shareholders. Binding proposals are requested for October 2024.
The Company continues to progress discussions with various government entities in relation to
funding support for the integrated Phase 1 Project.
The Company remains committed to securing a transaction or transactions for the Phase 1 Project
in the near term and will provide updates on progress once material milestones are reached
Options
On 22 November 2023, 72,999,999 unlisted options with an exercise price of $0.013 and 33,142,856
unlisted options with an exercise price of $0.01 expiring on 22 November 2026 were issued under
the Company’s employee incentive scheme to directors, executives and consultants.
Legal
Arbitration with Jinhui Lithium Co., Ltd
On 31 May 2023, 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).
In accordance with the Arbitration Rules of the Singapore International Arbitration Centre (SIAC), the
panel of three arbitrators, being each party’s nominated arbitrator and the third independent arbitrator
has been completed and the arbitration timetable set.
LCN received Jinhui’s Statement of Claim (SOC) on 4 December 2023. The SOC includes a claim for
US$5.0 million which comprises the unamortised deposit paid under the Offtake Agreement, plus
expenses related to the dispute.
LCN filed its Statement of Defence and Counterclaim (SODCC) on 15 January 2024 and has submitted
a counterclaim, which is well in excess of the claim included in Jinhui’s SOC.
LCN received the Statement of Reply and Defence to Counterclaim on 8 February 2024 and on 18 March
2024, LCN filed its Statement of Rejoinder and Report to Defence to Counterclaim.
On 8 July 2024, the parties exchanged documents as per the arbitrators’ instructions.
Witness statements were exchanged on 19 August 2024, in accordance with the arbitration timetable.
Lepidico’s witness statements provide a coherent and compelling narrative that is consistent with Ontario
law. Responses to witness statements are due to be exchanged by 23 September 2024.
The arbitration hearing has been provisionally set for early November 2024.
Annual Financial Report
16
The Company believes that the arbitration brought against it is without merit. The Company has retained
Canadian and Namibian litigation counsel to vigorously defend itself.
Public Road Access (Namibia)
Lepidico Chemicals Namibia (Pty) Ltd (LCN) has filed a motion with the High Court in Namibia against
Ombujomenge Close Corporation for hindering and/or restricting the access of the LCN to Public Road
FR1965.
LCN needs to access the Public Road to be able to reach its exploration tenement and in order to
undertake exploration work on a neighbouring property.
On 18 September 2024, the Company received notification that the High Court of Namibia ruled in favour
of LCN, granting access to Public Road FR 1965 and ordering the respondants to pay LCN’s costs.
Patents and Trademarks
The Company holds granted patents for its L-Max® technology in the United States, Canada, Europe,
Japan and Australia. The Company also has patents granted for its process technology for lithium
recovery from phosphate minerals (amblygonite) from the United States, Canada, Europe, Japan
and Australia.
The Company holds granted patents for the Company’s LOH-Max® process in Japan, Canada and
ARIPO (African Regional Intellectual Property Organization). The national and regional phase of the
patent application for LOH-Max® is progressing in the remaining jurisdictions under
PCT/AU2020/050090.
During the year, the Company was granted Australian patents for the Company’s S-Max® process
for Improved Mica Processing under 2019262080 and Processing of Silicate Minerals under
2019262079.
The national and regional phase of the patent application for the lithium carbonate recovery process
from a raw lithium hydroxide material is progressing under the Patent Cooperation Treaty (PCT) and
was allotted the number PCT/AU2022/050297. The patent process is expected to continue during
2024.
The International PCT application for the preparation of Cs-Rb-K alkali salt solutions from lithium
mica mineral source material under the PCT number PCT/AU2022/051154 is progressing through
the national and regional phases. The refining process has application in tailoring ternary materials
for industrial catalyst applications and the patent process is expected to continue during 2024.
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 of 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's 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 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.
Annual Financial Report
17
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 exposure to assets or the scope of its operations and/or 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. In the event the Company is unable to secure
additional capital as required there is significant uncertainty as to whether the Company can continue as
a going concern which is likely to have a material adverse effect on the Company’s activities
Increases in capital and operating costs
On 20 October 2023, the Company announced updated Phase 1 Project Economics including revised
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. There can be no assurance that
actual capital and operating costs will be as estimated in that announcement.
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 contracted 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 Phase 1 Project economic assessments and other Company updates 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 or unreliable and may not be developed on a
timely basis.
Competition in retaining and sustaining the 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.
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;
Annual Financial Report
18
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)
Industrial and environmental accidents;
j)
Industrial disputes and labour shortages; and
k) Unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.
Government licences and approvals
Lepidico through its direct and indirect participation in corporations 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. The 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) geopolitics 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.
Climate Risk
There are a number of climate-related factors that may affect the operations and proposed activities of
the Company. The climate change risks particularly attributable to the Company include:
a) the emergence of new or expanded regulations associated with the transition to a lower-carbon
economy and market changes related to climate change mitigation. The Company may be
impacted by changes to local or international compliance regulations related to climate change
mitigation efforts, or by specific taxation or penalties for carbon emissions or environmental
damage. These examples sit amongst an array of possible restraints on industry that may further
impact the Company and its profitability. While the Company will endeavour to manage these
risks and limit any consequential impacts, there can be no guarantee that the Company will not
be impacted by these occurrences; and
b) climate change may cause certain physical and environmental risks that cannot be predicted by
the Company, including events such as increased severity of weather patterns and incidence of
extreme weather events and longer-term physical risks such as shifting climate patterns. All these
risks associated with climate change may significantly change the industry in which the Company
operates.
Annual Financial Report
19
Litigation Risks
The Company is exposed to possible litigation risks including intellectual property claims, contractual
disputes, occupational health and safety claims and employee claims. Further, the Company may be
involved in disputes with other parties in the future which may result in litigation. Any such claim or dispute
if proven, may impact adversely on the Company’s operations, financial performance, and financial
position.
Refer Review of Operations above and Note 18: Contingent Liabilities for details of the dispute that the
Company is currently engaged in with Jiangxi Jinhui Lithium Co., Ltd (Jinhui), a Company incorporated
in China and in respect to the Offtake Agreement between Desert Lion Energy Pty Ltd (subsequently
renamed Lepidico Chemicals Namibia Pty Ltd) and Jinhui dated 6 November 2017 (as amended from
time to time).
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.
SUBSEQUENT EVENTS
Other than the matters discussed above there are no other matters or circumstances which have arisen
since 30 June 2024 that have significantly affected or may significantly affect:
(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 2024, nor have any
amounts been paid or declared by way of dividend since the end of the previous financial year.
Annual Financial Report
20
ENVIRONMENTAL REGULATIONS
The Group’s operations are subject to environmental laws and regulations under the relevant
governments’ regulations. Full compliance with these laws and regulations is regarded as a minimum
standard for all operations to achieve.
Instances of environmental non-compliance by an operation are identified either by external compliance
audits or inspections by relevant governmental authorities. There have been no significant known
breaches in any of the jurisdictions which the Group operates in during the financial year.
OPTIONS
At the date of this report, the Company has the following options on issue:
Number
Exercise Price
Grant
Expiry
527,775,404
$0.030
4 November 2022
4 November 2024
67,500,000
$0.072
18 November 2021
18 November 2024
109,500,000
$0.026
28 November 2022
28 November 2025
475,405,920
$0.009
10 May 2024
10 November 2026
72,999,999
$0.013
22 November 2023
22 November 2026
33,142,856
$0.010
22 November 2023
22 November 2026
1,286,324,179
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 2024 is included on page 29 of the Directors’ Report.
The Auditor did not provide any non-audit services for the year ended 30 June 2024 (2023: $Nil).
Annual Financial Report
21
REMUNERATION REPORT (AUDITED)
Letter from the Chairs of the Board and People Committee
Dear Shareholders,
This year we have taken significant steps to respond to shareholder concerns about remuneration
outcomes last year, with changes to our framework and communications.
Our response to shareholder concerns in relation to the 2023 remuneration report
At our 2023 Annual General Meeting, we incurred a “first strike” with 27.94% of votes cast against the
adoption of the 2023 remuneration report. The Board takes this outcome very seriously and recognises
that the decisions we made last year about how we reward our executives were not well communicated
and were not in line with the expectations of all of our shareholders.
We have taken significant action during the 2024 financial year, which has focused on three key aspects:
•
working closely with shareholders to ensure that their concerns are well understood;
•
reviewing the executive reward framework to ensure it remains “fit for purpose” in the current
environment; and
•
ensuring 2024 remuneration decisions appropriately reflect performance and are communicated
clearly.
Primarily, shareholders were disappointed that we awarded a deferred short-term incentive (STI) in a
year where Lepidico did not secure financing for the integrated Phase 1 Project. Shareholders also told
us that there was insufficient transparency around the deferment of the payment of the STI. Another
concern included the value of our long-term incentives (LTIs).
2024 reward outcomes
Shareholder concerns have been front of mind in making reward decisions during the 2024 financial year.
Key reward decisions for 2024 include:
•
no increase to Total Fixed Remuneration (TFR) in 2024 for any Executives; the last increase in TFR
was 1 July 2022;
•
no STI was awarded for 2024; the 2023 STI remains deferred until the satisfaction of specific KPIs
related to securing finance for the Phase 1 Project
•
LTIs rewards were reviewed for FY2024 to ensure tax efficiency in all the jurisdictions in which the
Company operates; LTIs are now linked to a total value, rather than a specific number of shares, with
Executives able to select the most tax-efficient option based on their jurisdiction. This approach saw
a reduction in the value of LTIs awarded in FY2024 compared to FY2023
We will take advantage of opportunities to reduce remuneration costs. Following the resignation of Mr
Hans Daniels in August 2024, the decision was made not to replace the GM Operations – UAE until there
is more certainty around the timing of financing for the Phase 1 Project.
A more transparent reward framework
We have reflected on concerns raised by shareholders in relation to our approach with STIs last year.
The Board exercised its discretion and did not award any STIs for FY2024. In addition, the disclosures
regarding the FY2023 STI have been expanded below, to provide shareholders with further clarity
regarding the KPIs to be satisfied before the STIs are paid.
Looking forward
Continuing to engage with you, as our shareholders, will be a key priority for FY2025 and beyond.
Yours sincerely
Gary Johnson
Mark Rodda
Board Chair
People Committee Chair
Annual Financial Report
22
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 People 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 People Committee considers the 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 People 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 People Committee were approved by the Board.
The following were the KMP of the Group during the financial year and unless otherwise indicated were
KMP for the entire financial year:
Non-Executive Directors
Mr Gary Johnson
Non-executive Chair
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
Ms Benedicta Dreyer GM – Sustainability
Mr Hans Daniels(1)
GM – Operations UAE
Mr Timo Ipangelwa
GM – Operations Namibia
Mr David Hall
GM – Marketing & Investor Relations
Mr Roland Wells(2)
Project Director (ceased being KMP on 1 June 2024)
Mr Tom Dukovcic
GM – Geology
Mr Alex Neuling(3)
Joint Company Secretary
Annual Financial Report
23
(1) Mr Hans Daniels resigned on 30 August 2024.
(2) Mr Roland Wells provides services as the Project Director through a services agreement with Project Creations Pty Ltd
(Project Creations). Mr Wells contract was placed on suspension on 1 June 2024 pending securing funding for the integrated
Phase 1 Project.
(3) 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
$ 87,600
Other Non-Executive Directors
$ 54,750
Chair of Audit, Risk & Sustainability/People Committee
$ 10,000
Member of Audit, Risk & Sustainability/People Committee
$ 10,000
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's 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.
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:
•
attract, retain, motivate and reward executives;
•
reward
executives
for
Company
and
individual
performance
against
pre-determined
targets/benchmarks;
•
link rewards with the strategic goals and performance of the Company;
•
provide competitive remuneration arrangements by market standards (for comparable companies);
Annual Financial Report
24
•
align executive interests with those of the Company’s shareholders; and
•
comply with applicable legal requirements and appropriate standards of governance.
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 is assessed by the CEO, presented to the People 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 People Committee.
During the year the Company achieved the key milestones relating to identification of capital savings for
the development and construction of the integrated Phase 1 Project. In addition, a successful drill program
was completed on Helikon 4. The Company finalised its Sustainability and Climate Strategy and issued
its first full Sustainability Report. The Company continued to ensure the health and safety of its
employees.
For the year ended 30 June 2024, no STIs were awarded to the KMP of the Company or Group (2023:
$842,562 with payment deferred until the Company satisfies certain KPIs related to securing finance for
the Phase 1 Project). The number of KMP eligible for an STI for the year ended 30 June 2024 was 7
(2023:7).
Long term incentives (LTIs)
LTIs comprise options granted at the recommendation of the People Committee in order to align the
objective of Directors and Executives with shareholders and the Company (refer to 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.
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.
Annual Financial Report
25
2020
2021
2022
2023
2024
$
$
$
$
$
Net Profit/(Loss)
(10,118,237)
$282,556
(7,941,340)
(3,604,123)
(7,068,212)
EPS
(0.002)
0.00006
(0.00127)
(0.0005)
(0.00091)
Share price at 30 June
0.007
0.01
0.026
0.011
0.003
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.
Short-term Benefits
Post-
employment
Benefits
Share-
based
Payments
Total
including
Deferred
STI
Total
Performance
Based
Remuneration
Equity
Options
Cash
Salary
and Fees
Other
(Deferred
STI Not
Paid)
Retirement
Benefits
Vested
$
$
$
$
$
%
Non-Executive Directors
Mr Gary Johnson
2024
100,000
-
11,000
41,667
152,667
27%
2023
100,000
-
10,500
52,500
163,000
32%
Mr Mark Rodda
2024
80,000
-
8,800
41,667
130,467
32%
2023
80,000
-
8,400
52,500
140,900
37%
Ms Cynthia
Thomas
2024
88,800
-
-
41,667
130,467
32%
2023
88,400
-
-
52,500
140,900
37%
Executive Director
Mr Joe Walsh(1)
2024
524,063
-
-
85,714
609,777
14%
2023
521,448
267,116*
-
105,000
893,564
42%
Executives
Mr Tom Dukovcic
2024
247,748
-
27,252
56,571
331,571
17%
2023
248,869
83,325*
26,131
70,000
428,325
36%
Mr David Hall(2)
2024
279,279
-
30,721
55,000
365,000
15%
2023
257,164
85,695*
27,002
70,000
439,861
35%
Ms
Shontel
Norgate(3)
2024
402,476
-
-
56,571
459,047
12%
2023
400,468
123,086*
-
70,000
593,554
33%
Ms
Benedicta
Dreyer(4)
2024
246,292
-
-
55,000
301,292
18%
2023
239,897
73,154*
-
70,000
383,051
37%
Mr Hans Daniels(5)
2024
445,070
-
-
55,000
500,070
11%
2023
421,406
129,116*
-
70,000
620,522
32%
Mr Timo
Ipangelwa(6)
2024
231,717
-
-
55,000
286,717
19%
2023
206,892
62,791*
-
70,000
339,683
39%
Mr Roland Wells(7)
2024
176,614
-
-
-
176,614
0%
2023
320,101
-
-
-
320,101
0%
Mr Peter Walker(8)
2024
-
-
-
-
-
2023
106,738
-
-
-
106,738
0%
Mr Alex Neuling(9)
2024
47,520
-
47,520
0%
2023
54,100
-
-
28,000
82,100
34%
Total Directors’
and KMP
Remuneration
2024
2,869,579
-
77,773
543,857
3,491,209
16%
2023
3,045,483
824,283*
72,033
710,500
4,652,299
33%
* Deferred and not paid
Annual Financial Report
26
(1) Mr Walsh is remunerated in Canadian dollars and his total salary paid was C$465,500 (2023: C$465,000). 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$1.1258
(2023: C$1.00 for every A$1.1202).
(2) Mr Hall commenced being a KMP on 1 August 2023.
(3) Ms Norgate is remunerated in Canadian dollars and her total salary paid was C$357,500 (2023: C$357,500). 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$1.1258
(2023: C$1.00 for every A$1.1202).
(4) Ms Dreyer is remunerated in Namibian dollars and her total salary paid was N$3,022,224 (2023:N$3,022,224). 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$0.08149 (2023: N$1.00 for every A$0.0794).
(5) Mr Daniels is remunerated in UAE Dirham and his total salary paid was AED1,071,996 (2023: AED1,044,339). 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$0.4152 (2023: AED1.00 for every A$0.4053). Mr Daniels resigned on 30 August 2024.
(6) Mr Ipangelwa is remuneration in Namibian dollars and his total salary paid was N$2,606,428 (2023: 2,606,428). 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$0.08149(2023: N$1.00 for every A$0.0794).
(7) Mr Wells provided services as the Project Director through a services agreement with Project Creations Pty Ltd (Project Creations). Mr
Wells ceased being a KMP on 1 June 2024. During the year Project Creations was paid or is payable fees of $176,614 (2023: $320,101)
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 in 2023
was GBP£56,760. The Company uses the average annual rate to translate remuneration into the reporting currency and was translated
in 2023 at the rate of GBP£1.00 for every A$1.8805.
(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 $47,520 (2023: $54,100) 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
2024
2023
$
$
Payments to director-related entities(1)
22,554
766,749
(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 the development of L-Max® technology on an arm’s length basis. As at 30 June
2024, no invoices (2023: $2,866) 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 in base salary during the reporting period. No monetary
bonus has been awarded for the financial year ended 30 June 2024 (2023: C$235,078; payment of the
bonus has been deferred until the satisfaction of specific KPIs related to securing finance for the Phase
1 Project).
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
Annual Financial Report
27
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 in base salary during
the reporting period. No monetary bonus has been awarded for the financial year ended 30 June 2024
(2022: $83,325; payment of the bonus has been deferred until the satisfaction of specific KPIs related to
securing finance for the Phase 1 Project).
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
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. 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 in base
salary during the reporting period. No monetary bonus has been awarded for the financial year ended 30
June 2024 (2023: A$85,695; payment of the bonus has been deferred until the satisfaction of specific
KPIs related to securing finance for the Phase 1 Project).
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 MIR 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 in base salary during the reporting period.
No monetary bonus has been awarded for the financial year ended 30 June 2024 (2023: C$108,323;
payment of the bonus has been deferred until the satisfaction of specific KPIs related to securing finance
for the Phase 1 Project).
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 Dreyer, 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 Dreyer’s remuneration includes a
salary of N$3,022,224 per annum. Ms Dreyer did not receive an increase in base salary during the
reporting period. No monetary bonus has been awarded for the financial year ended 30 June 2024 (2023:
N$915,734; payment of the bonus has been deferred until the satisfaction of specific KPIs related to
securing finance for the Phase 1 Project).
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
Annual Financial Report
28
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. 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 in base salary during the
reporting period. No monetary bonus has been awarded for the financial year ended 30 June 2024 (2023:
N$786,010; payment of the bonus will be deferred until the satisfaction of specific KPIs related to securing
finance for the Phase 1 Project).
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 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. 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 in base salary during the reporting
period. No monetary bonus has been awarded for the financial year ended 30 June 2024 (2023:
AED315,026; payment of the bonus will be deferred until the satisfaction of specific KPIs related to
securing finance for the Phase 1 Project).
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. Mr Daniels resigned on 30 August 2024.
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:
2024
Balance at
start of year
Purchased
Exercised
Options
Sold
Other Net
Change
Balance at
end of year
Non-Executive Directors
Mr Gary Johnson
340,789,197
9,437,833
-
-
(100,000)
350,127,030
Mr Mark Rodda
-
-
-
-
-
-
Ms Cynthia Thomas
-
-
-
-
-
-
Executive Director
Mr Joe Walsh
37,215,430
9,303,856
-
-
-
46,519,286
Key Management
Mr Tom Dukovcic
6,608,446
5,008,480
-
-
-
11,616,926
Ms Shontel Norgate
14,314,022
3,687,499
-
-
-
18,001,521
Ms Benedicta Dreyer
-
-
-
-
-
-
Mr Timo Ipangelwa
-
-
-
-
-
-
Mr Hans Daniels
-
-
-
-
-
-
Mr David Hall
-
-
-
-
-
-
Mr Roland Wells(1)
379,500
94,875
-
-
(474,375)
-
Mr Alex Neuling
3,898,495
-
-
-
-
3,898,495
Total
403,205,090
27,532,543
-
-
(574,375)
430,163,258
(1) Mr Wells ceased being a KMP on 1 June 2024
Annual Financial Report
29
Option Holdings
2024
Balance at
start of year
Granted
during the
year as
remuneration
Purchased
during year
Expired
during year
Sold during
the year
Net
Other
Change
Balance at
end of year
* Vested and
exercisable at
end of year
Non-Executive Directors
Mr Gary Johnson
25,165,436
8,333,333
4,718,917
(7,500,000)
-
-
30,717,686
30,717,686
Mr Mark Rodda
22,500,000
8,333,333
-
(7,500,000)
23,333,333
23,333,333
Ms Cynthia Thomas
22,500,000
8,333,333
-
(7,500,000)
-
-
23,333,333
23,333,333
Executive Directors
Mr Joe Walsh
45,873,429
14,285,714
4,651,928
(15,000,000)
-
-
49,811,071
49,811,071
Key Management
Mr Tom Dukovcic
30,000,000
9,428,571
2,504,240
(10,000,000)
(2,504,240)
-
29,428,571
29,428,571
Ms Shontel Norgate
30,000,000
9,428,571
1,843,750
(10,000,000)
-
-
31,272,321
31,272,321
Ms Benedicta Dreyer
10,000,000
11,000,000
-
-
-
-
21,000,000
21,000,000
Mr Timo Ipangelwa
10,000,000
11,000,000
-
-
-
-
21,000,000
21,000,000
Mr Hans Daniels
10,000,000
11,000,000
-
-
-
-
21,000,000
21,000,000
Mr David Hall
10,000,000
11,000,000
-
-
-
-
21,000,000
21,000,000
Mr Roland Wells(1)
17,250
-
47,437
-
-
(64,687)
-
-
Mr Alex Neuling
4,000,000
-
-
-
-
-
4,000,000
4,000,000
Total
220,056,115
102,142,855
13,766,272
(57,500,000)
(2,504,240)
(64,687)
275,896,315
275,896,315
(1)
Mr Wells ceased being a KMP on 1 June 2024
Details of the share options granted during the year as remuneration are disclosed in Note 16(b) as
approved by shareholders at the Company’s Annual General Meeting in November 2023.
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 20th day of September 2024
30
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.
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 2024, there have
been:
a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit, and
b)
no contraventions of any applicable code of professional conduct in relation to the audit.
Moore Australia Audit (WA)
Chartered Accountants
SL Tan
Partner – Audit and Assurance
Moore Australia Audit (WA)
Perth
20th day of September 2024
Annual Financial Report
31
Consolidated Statement of Profit and Loss
and Other Comprehensive Income
as at 30 June 2024
Note
2024
$
2023
$
Continuing Operations
Other income
3
195,171
7,023,495
Business development expenses
(287,621)
(951,606)
Administrative expenses
4
(3,087,525)
(2,788,500)
Employment benefits
(3,001,109)
(4,170,551)
Depreciation
(610,384)
(571,325)
Share based payments
(563,857)
(766,500)
Finance costs
(676,356)
(632,296)
Exploration and evaluation expenditure expensed
(144,008)
(46,162)
R&D expenditure expensed
-
(56,901)
Loss before income tax
(8,175,689)
(2,960,346)
Income tax benefit/(expense)
5
1,107,477
(643,777)
Loss from continuing operations after tax
(7,068,212)
(3,604,123)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
92,000
(667,754)
Total comprehensive loss for the year
(6,976,212)
(4,271,877)
Comprehensive loss for the year attributable to:
Owners of the parent
(6,440,468)
(4,311,630)
Non-controlling interest
(627,744)
707,507
(7,068,212)
(3,604,123)
Loss per share for the year attributable to the members
of Lepidico Ltd
Basic and diluted loss per share
7
(0.00091)
(0.0005)
The accompanying notes form part of these financial statements.
Annual Financial Report
32
Consolidated Statement of Financial Position
as at 30 June 2024
The accompanying notes form part of these financial statements.
Note
2024
$
2023
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
8
4,673,677
10,828,962
Trade and other receivables
9
343,546
703,453
TOTAL CURRENT ASSETS
5,017,223
11,532,415
NON-CURRENT ASSETS
Trade and other receivables
9
716,755
728,135
Property, plant and equipment
10
16,806,534
17,061,890
Exploration and evaluation expenditure
11
50,502,334
48,356,862
Intangible asset
12
28,981,052
28,773,120
TOTAL NON-CURRENT ASSETS
97,006,675
94,920,007
TOTAL ASSETS
102,023,898
106,452,422
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
13
1,906,978
2,130,854
Provisions
14
284,076
268,115
Borrowings and lease liabilities
15
49,231
595,277
TOTAL CURRENT LIABILITIES
2,240,285
2,994,246
NON-CURRENT LIABILITIES
Trade and other payables
13
510,479
-
Provisions
14
1,089,251
808,068
Borrowings and lease liabilities
15
7,671,329
7,136,646
Deferred Tax Liability
5
2,042,036
3,055,201
TOTAL NON-CURRENT LIABILITIES
11,313,095
10,999,915
TOTAL LIABILITIES
13,553,380
13,994,161
NET ASSETS
88,470,518
92,458,261
EQUITY
Issued capital
16
124,685,798
122,261,186
Reserves
17
8,715,938
8,060,081
Equity component of convertible note
990,000
990,000
Accumulated losses
(52,405,370)
(45,964,902)
Equity attributable to owners of the Parent
81,986,366
85,346,365
Non-controlling interests
6,484,152
7,111,896
TOTAL SHAREHOLDERS EQUITY
88,470,518
92,458,261
Annual Financial Report
33
Consolidated Statement of Changes in Equity
for the Year ended 30 June 2024
Attributable to the owners of the Company
Issued
Capital
Reserves
Equity
component
of
convertible
note
Accumulated
Losses
Total
Non
Controlling
Interest
Total
Equity
Options
Warrants
Foreign
Currency
$
$
$
$
$
$
$
$
$
Balance at 1 July 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
-
-
-
-
-
(4,311,630)
(4,311,630)
707,507
(3,604,123)
Other comprehensive loss
-
-
-
(667,754)
-
-
(667,754)
-
(667,754)
Shares issued (net of costs)
18,307,021
-
-
-
-
-
18,307,021
-
18,307,021
Options issued
-
766,500
-
-
-
-
766,500
-
766,500
Options exercised
1,215,059
-
-
-
-
-
1,215,059
-
1,215,059
Fair value of options exercised
83,380
(83,380)
-
-
-
-
-
-
-
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
Loss for the year
-
-
-
-
-
(6,440,468)
(6440,468)
(627,744)
(7,068,212)
Other comprehensive loss
-
-
-
92,000
-
-
92,000
-
92,000
Shares issued (net of costs)
2,424,545
-
-
-
-
-
2,424,545
-
2,424,545
Options issued
-
563,857
-
-
-
-
563,857
-
563,857
Options exercised
67
-
-
-
-
-
67
-
67
Fair value of options exercised
-
-
-
-
-
-
-
-
-
Balance at 30 June 2024
124,685,798
7,866,824
415,135
433,979
990,000
(52,405,370)
81,986,366
6,484,152
88,470,518
The accompanying notes form part of these financial statements.
Annual Financial Report
34
Consolidated Statement of Cash Flow
For the Year ended 30 June 2024
Note
2024
$
2023
$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
(5,222,255)
(6,777,822)
Interest received
182,945
274,374
Interest paid
(21,111)
(6,649)
Payments made in relation to legal dispute
(653,984)
(251,132)
Net cash provided by/(used in) operating activities
21
(5,714,405)
(6,761,229)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation activities
(2,121,768)
(3,386,010)
Payments for research and development activities
(155,078)
(385,420)
Proceeds from research and development tax credit
135,653
2,181,799
Payments for property, plant and equipment
(750,197)
(8,232,247)
Proceeds from property, plant and equipment
23,637
-
Net cash used in investing activities
(2,867,753)
(9,821,878)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares (net of costs)
2,424,545
18,307,021
Proceeds from exercise of options (net of costs)
67
1,215,059
Proceeds from borrowings
53,389
169,114
Repayment of borrowings
(42,276)
(6,980)
Net cash provided by financing activities
2,435,725
19,684,214
Net increase/(decrease) in cash held
(6,146,433)
3,101,107
Cash at beginning of financial year
10,828,962
8,042,822
Effect of foreign exchange rate changes
(8,852)
(314,967)
Cash at end of financial year
8
4,673,677
10,828,962
The accompanying notes form part of these financial statements.
Annual Financial Report
35
Notes to the Financial Statements
for the Year ended 30 June 2024
Note 1: Statement of Material 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.
The
financial
report
covers
Lepidico
Ltd
and
its
controlled
entities
(the
Group
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 (A-IFRS) in their entirety.
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 20th September 2024 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 current high
inflationary environment has negatively impacted the global economy and created volatile market
dynamics.
For the year ended 30 June 2024, the Group incurred a net loss after tax of $7,068,212 and a net
cash outflow from operations of $5,714,405. On 30 June 2024, the Company had net current
assets of $ 2,776,938.
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 current financing initiatives, existing standby equity raising facilities in place and the
successful outcomes of previous Entitlement Offers. There remains ongoing strategic partner
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, or the current high inflationary environment continues for
a prolonged period of time and/or impacts capital markets further the future availability of financing
may be adversely affected.
Annual Financial Report
36
(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.
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) 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.
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.
(d) 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.
Annual Financial Report
37
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.
Item
Depreciation Method
Average Useful Life
Buildings & Infrastructure
Straight line
10 years/Life of Mine
Furniture, Fittings & Equipment
Straight line
3-5 years
Motor Vehicles
Straight line
4 years
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.
(e) 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.
Lease payments included in the measurement of the lease liability are as follows:
•
fixed lease payments less any lease incentives;
•
variable lease payments that depend on an index or rate, initially measured using the index or
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;
Annual Financial Report
38
•
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.
(f) 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
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.
(g) 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.
Annual Financial Report
39
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.
(h) Financial Instruments
The Group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these
financial assets is included in finance income using the effective interest rate method. Any gain or
loss arising on derecognition is recognised directly in profit or loss and presented in other
gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented
as separate line item in the statement of profit or loss.
The Group subsequently measures all equity investments at fair value. The Group has not elected
to present fair value gains and losses on equity investments in OCI, where there is no subsequent
reclassification of fair value gains and losses to profit or loss following the derecognition of the
investment. Dividends from such investments continue to be recognised in profit or loss as other
income when the group’s right to receive payments is established.
As per AASB 9, an expected credit loss model is applied, not an incurred credit loss model as per
AASB 139. To reflect changes in credit risk, this expected credit loss model requires the Group to
account for expected credit loss since initial recognition.
For trade receivables, the Group applies the simplified approach permitted by AASB 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables. In
measuring the expected credit loss, a provision matrix for trade receivables was used taking into
consideration various data to get to an expected credit loss (i.e. diversity of customer base,
appropriate groupings of historical loss experience, etc).
(i) 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
Annual Financial Report
40
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.
(j) 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.
(k) 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.
(l) 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.
(m) 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.
Annual Financial Report
41
Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of
financial position.
(n) 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).
(o) 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.
(p) 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 Company’s accounting policy for exploration and evaluation expenditure results in
expenditure being capitalised for an area of interest where it is considered likely to be
recoverable by future exploitation or sale or where the activities have not reached a stage which
permits a reasonable assessment of the existence of reserves. This policy requires
management to make certain estimates as to future events and circumstances, in particular
whether an economically viable extraction operation can be established. Any such estimates
and assumptions may change as new information becomes available. If, after having
capitalised the expenditure under the policy, a judgement is made that recovery of the
expenditure is unlikely, the relevant capitalised amount will be written off to the income
statement.
Annual Financial Report
42
(ii) Recoverability of Intangible Assets (Research & Development Expenditure)
The recoverability of capitalised research and development expenditures recognised as a non-
current asset is dependent upon the successful development, or alternatively sale, of the
respective intellectual property which comprise the assets. Refer to Note 12 for details of how
the research and development expenditure has been valued. Judgement is applied by
management in determining when these assets are commercially viable and technically
feasible. In exercising this judgement, management is required to make certain estimates and
assumptions as to future events. If a judgement is made that the intellectual property is
impaired, the relevant capitalised amount will be written off to the income statement.
(iii) Property, Plant and Equipment / Phase 1 Project – recoverable amount
The Company is embarking on its Phase 1 Project which is expected to fully integrate the
Company’s major non-current assets such as its proprietary intellectual property, mineral
reserves (in the form of capitalised exploration and evaluation expenditures) and infrastructure
as part of any future development activities. The determination of the Project’s Fair Value Less
Cost of Disposal (FVLCD) and value in use (or NPV) projection requires management to make
estimates about future capital expenditure, expected production and sales volumes, commodity
prices, reserves, operating / financing costs, and rehabilitation costs. Management also
considers the impact of material climate-related risks, both transitional and physical, on
estimates of future costs and useful lives of assets. Changes in circumstances may alter these
projections, which may impact the recoverable amount of the assets. In such circumstances,
some or all of the carrying value of the assets may be impaired and the impairment would be
charged to the income statement.
(q) 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.
(r) Adoption of New and Revised Accounting Standards
Standards and Interpretations applicable to 30 June 2024
In the year ended 30 June 2024, the Directors have reviewed all of the new and revised Standards
and Interpretations issued by the AASB that are relevant to the consolidated entity and effective
for the current reporting period beginning on or after 1 July 2023. The changes that impact the
Company are as follows:
Annual Financial Report
43
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting
Policies and Definition of Accounting Estimates / AASB 2021-6 Amendments to Australian
Accounting Standards – Disclosure of Accounting Policies: Tier 2 and Other Australian Accounting
Standards
AASB 2021-2 amends a number of accounting standards to improve accounting policy disclosures
and clarify the distinction between changes in accounting policies and accounting estimates.
In particular, it amends AASB 101 Presentation of Financial Statements, to require entities to
disclose their material accounting policy information rather than their significant accounting
policies and provides the following factors to assist an entity in determining if the accounting policy
information is material:
a) Changes in accounting policy
b) Documentation of choice in the accounting standards
c) An accounting policy developed in the absence of an explicit accounting standard requirement
d) Significant judgement or estimation
e) Complex transaction and accounting policy need to explain treatment.
AASB 2021-6 makes consequential amendments to a number of Australian-specific standards.
AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform –
Pillar Two Model Rules / AASB 2023-4 Amendments to Australian Accounting Standards –
International Tax Reform – Pillar Two Model Rules: Tier 2 Disclosures
Amendments have been made to AASB 112 Income Taxes by introducing a mandatory exception
from accounting for deferred taxes arising from the OECD’s Pillar Two Model Rules and adding
new disclosure requirements for both full and simplified disclosure financial statements.
(s) New Accounting Standards Issued but not yet Effective
Australian Accounting Standards and Interpretations that have recently been issued or amended
but are not yet mandatory, have not been early adopted by the Group for the annual reporting
period ended 30 June 2024. Management is currently assessing the impact of these standards
on the Group’s financial statements in the year of initial application.
(t) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation in the current financial year.
Annual Financial Report
44
Note 2: Interests in other entities
(a) Controlled Entities
The Group’s principal subsidiaries at 30 June 2024 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
Interest as at
30 June
(%)
Principal Activity
2024
2023
Parent Entity:
Lepidico Ltd
Australia
Subsidiaries of Lepidico Ltd:
Lepidico Holdings Pty Ltd
Australia
100
100
Lithium Exploration and Investment
Li Technology Pty Ltd
Australia
100
100
Holder of L-Max® Technology
Silica Technology Pty Ltd
Australia
100
100
Holder of S-Max® Technology
Bright Minz Pty Ltd
Australia
100
100
Holder of LOH-Max® Technology
Mica Exploration Pty Ltd
Australia
100
100
Lithium Exploration
Lepidico (Netherlands) Coöperatief U.A.
Netherlands
100
100
International Holding Company
Lepidico (Netherlands) B.V.
Netherlands
100
100
Global Marketing Company
Lepidico (UK) Ltd
United Kingdom
100
100
Management Company
Lepidico Holdings (Canada) Inc
Canada
100
100
Holding Company
Lepidico (Canada) Inc
Canada
100
100
Management Company
Lepidico (Mauritius) Ltd
Mauritius
100
100
Holding Company
Lepidico Chemicals Namibia (Pty) Ltd
Namibia
80
80
Exploration and Development Company
Lepidico Infrastructure Namibia (Pty) Ltd
Namibia
100
100
Dormant
Lepidico Chemicals Manufacturing Ltd
UAE
100
100
Developer of Phase 1 Chemical Plant
Lepidico Strategic Chemicals
Manufacturing LLC-OPC
UAE
100
-
Collaboration in the UAE for lithium
opportunities
(b) Non-controlling interests (NCI)
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
2024
$
2023
$
Current assets
236,708
317,194
Current liabilities
(595,079)
(418,903)
Current net assets/(liabilities)
(358,371)
(101,709)
Non-current assets
24,119,759
22,492,194
Non-current liabilities
(14,597,048)
(9,985,017)
Non-current net assets
9,522,711
12,507,177
Net assets
9,164,340
12,405,468
Accumulated NCI
6,484,152
7,111,896
Annual Financial Report
45
Summarised statement of comprehensive income
2024
$
2023
$
Revenue
18,604
6,448,227
Profit/(Loss) for the period
(3,126,204)
4,084,240
Other comprehensive income
(114,924)
114,644
Total comprehensive income/(loss)
(3,241,128)
4,198,884
Profit/(Loss) allocated to NCI
(627,744)
707,507
Summarised cashflows
2024
$
2023
$
Cash flows from operating activities
(934,792)
(1,259,874)
Cash flows used in investing activities
(2,051,923)
(2,433,272)
Cash flows from financing activities
3,103,597
3,214,403
Net increase/(decrease) in cash and cash equivalents
116,882
(478,743)
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
2024
$
2023
$
Other Income
Deferred revenue recognised on termination
-
6,447,728
Interest
182,945
274,374
Profit on Sale of Fixed Assets
12,226
-
Realised FX gain
-
301,393
Other Income
195,171
7,023,495
Total Revenue
195,171
7,023,495
Annual Financial Report
46
Note 4: Administrative Expenses
2024
$
2023
$
Office & general
525,396
758,837
Professional services
733,412
859,757
Compliance related
551,886
588,172
Travel
155,871
370,528
Total Administrative Expenses
1,966,565
2,577,294
Other Significant Administrative Expenses
The following significant expenses were incurred during the year
and impacted the financial performance:
Legal Dispute
1,120,960
211,206
Total Administrative Expenses
3,087,525
2,788,500
Note 5: Income Tax Expense
2024
$
2023
$
(a)
The components of tax expense comprise:
Current tax
-
-
Deferred tax
(1,101,088)
643,777
Losses recouped not previously recognised
(6,389)
-
Income tax expense/(benefit) reported in statement of
comprehensive income
(1,107,477)
643,777
(b)
The prima facie tax expense/(benefit) on loss from ordinary
activities before income tax is reconciled to the income tax
as follows:
2024
$
2023
$
Prima facie tax benefit on loss from ordinary activities before
income tax at 30% (2023:30%)
(2,452,707)
(888,104)
Add tax effect of:
- Share based payments
169,157
229,950
- Foreign expenditure
1,143
168,923
- Deferred tax balances not recognised
1,536,253
441,008
- Foreign tax rate differential
(226,607)
76,497
- Adjustments to income tax of previous years
(72,993)
11,545
- Permanent impact of R&D Claims
(21,789)
436,816
- Other non-allowable items
(39,934)
167,142
Less tax effect of:
- Deferred tax balances not recognised
-
-
- Losses recouped not previously recognised
-
-
Income tax expense/(benefit) reported in statement of
comprehensive income
(1,107,477)
643,777
Annual Financial Report
47
(c)
Deferred tax recognised:
Deferred Tax Liabilities:
Karibib assets
(2,042,036)
(3,055,201)
Exploration expenditure
(4,245)
(4,245)
L-Max® Technology
(718,190)
(718,190)
L-Max® Pilot Plant
(729,091)
(727,762)
Other
(56,865)
(22,082)
Deferred Tax Assets:
Carry forward revenue losses
1,508,391
1,472,279
Net deferred tax
(2,042,036)
(3,055,201)
(d)
Unrecognised deferred tax assets:
Carry forward revenue losses
13,879,047
12,407,009
Capital raising and other costs
38,598
103,877
L-Max Licence
21,826
21,826
Borrowing costs
38,624
38,624
Bright Minz acquisition
2,520
2,520
Provision and accruals
99,587
94,218
14,080,202
12,668,074
(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
2024
$
2023
$
Audit remuneration paid to the auditor of the parent entity
55,882
53,080
Audit remuneration paid to a subsidiary auditor (CRVW and Co)
42,385
40,892
98,267
93,973
Annual Financial Report
48
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.
2024
$
2023
$
Profit/(Loss) attributable to the ordinary equity holders of the
Company
(0.00091)
(0.0005)
$
$
Profit/(Loss) from continuing operations
(7,068,212)
(3,604,123)
No.
No.
Weighted average number of ordinary shares
7,771,160,772
7,251,386,048
Note 8: Cash and Cash Equivalents
2024
$
2023
$
Cash at bank and in hand
4,673,677
10,828,962
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities
are disclosed in Note 23.
Note 9: Trade and Other Receivables
2024
$
2023
$
Current
Prepaid expenses
240,893
201,537
R&D tax rebate receivable
-
220,000
Goods and services tax receivable
102,653
281,916
Total Current Trade and Other Receivables
343,546
703,453
Non-Current
Cash backed guarantees and deposits
716,755
728,135
Total Non-Current Trade and Other Receivables
716,755
728,135
Total Trade and Other Receivables
1,060,301
1,431,588
Annual Financial Report
49
Note 10: Property, Plant and Equipment
a) Movements during the year
Buildings &
Infrastructure
Furniture,
Fittings &
Equipment
Motor
Vehicles
Assets under
Development
Right of
Use Asset
Total
$
$
$
$
$
$
Cost
Balance at 1 July 2022
1,761,097
307,387
181,354
-
7,281,463
9,531,301
Additions
7,631
43,896
192,318
8,483,320
-
8,727,165
Disposals
-
(20,066)
-
-
-
(20,066)
Impact of foreign exchange
(19,585)
(9,123)
(380)
-
275,319
246,231
Balance at 30 June 2023
1,749,143
322,094
373,292
8,483,320
7,556,782
18,484,631
Additions
-
14,745
61,143
334,795
-
410,683
Disposals
-
(7,067)
(68,591)
-
-
(75,658)
Impact of foreign exchange
236
2,748
31,768
1,389
(33,777)
2,364
Balance at 30 June 2024
1,749,379
332,520
397,612
8,819,504
7,523,005
18,822,020
Accumulated Depreciation
Balance at 1 July 2022
416,933
181,492
133,166
-
208,933
940,524
Depreciation
207,002
46,697
19,504
-
298,122
571,325
Disposals
-
(20,066)
-
-
-
(20,066)
Impact of foreign exchange
(53,262)
(13,087)
(14,550)
-
11,857
(69,042)
Balance at 30 June 2023
570,673
195,036
138,120
-
518,912
1,422,741
Depreciation
202,120
43,965
57,423
-
306,875
610,383
Disposals
-
(2,515)
(61,732)
-
-
(64,247)
Impact of foreign exchange
19,743
4,472
30,038
-
(7,644)
46,609
Balance at 30 June 2024
792,536
240,958
163,849
-
818,143
2,015,486
Net Book Value
At 30 June 2023
1,178,470
127,058
235,172
8,483,320
7,037,870
17,061,890
At 30 June 2024
956,843
91,562
233,763
8,819,504
6,704,862
16,806,534
b) Impairment Testing of Non-Current Assets
The Group reviews its non-current assets at each reporting period and performs a formal estimate of the
recoverable amount when circumstances dictate that the carrying value may be impaired.
At 30 June 2024, upon identification of an impairment indicator relating to the Group’s market capitalisation
relative to the Group’s net assets, management performed an impairment assessment on the Phase 1
Project’s anticipated CGU. The Phase 1 Project comprises the assets listed in Note 10(a) Assets Under
Development, Right of Use Asset, associated plant and equipment, Note 11 - Capitalised exploration and
evaluation expenditure and Note 12 - Intangible assets.
Management’s impairment assessment includes applying the value in use (VIU) methodology which
incorporate several key project parameters that underpin the Phase 1 Project NPV outlined in the
Company’s ASX announcement on 30 October 2023. Amongst others, the key parameters include:
•
Current long term forecast price of lithium hydroxide and spodumene 6% (US$/tonne) sourced
from Benchmark Minerals Intelligence
•
Average grade of ore processed
•
Production life
•
Tonnes of ore mined and processed
•
Phase 1 pre-production capital
•
Phase 1 AISC (US$/tonne LCE)
•
8% discount rate
Annual Financial Report
50
The assessment of the recoverable amount of the Phase 1 Project CGU has determined that no impairment
is required at 30 June 2024.
Under the current valuation methodology, a change in the underlying parameters could impact the Project’s
estimated recoverable value in future financial periods. This change could arise from fluctuations in
commodity pricing, operating costs, interest rates, ore grades, technological changes and other contributing
factors that could impact on the Project economics. In addition, any changes in the mineral resources of
the Phase 1 Project (namely the Helikon and Rubicon ore reserves) could similarly affect its recoverable
value.
Note 11: Exploration and Evaluation Expenditure
2024
$
2023
$
Exploration expenditure
50,502,334
48,356,862
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.
Reconciliation of movements during the year:
2024
$
2023
$
Balance at the beginning of year
48,356,862
46,763,770
Exploration and evaluation costs capitalised
2,082,760
2,214,751
Exploration and evaluation costs written off
(144,008)
(46,162)
Impact of foreign exchange
206,720
(575,497)
Balance at the end of the year
50,502,334
48,356,862
Note 12: Intangible assets
2024
$
2023
$
L-Max® Technology
28,119,498
27,970,788
S-Max® Technology
158,689
152,328
LOH-Max® Technology
674,399
628,130
Lepidico Trademark
28,466
21,874
Intangible assets
28,981,052
28,773,120
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.
Annual Financial Report
51
Reconciliation of movements during the year:
2024
$
2023
$
Balance at the beginning of year
28,773,120
29,065,361
Intangible costs capitalised
207,932
659,064
Intangible costs written off
-
(56,901)
Research and Development Tax Credit received/receivable
-
(894,404)
Balance at the end of the year
28,981,052
28,773,120
Note 13: Trade and Other Payables
2024
$
2023
$
Current
Trade payables
44,835
676,172
Sundry payables and accrued expenses
1,862,143
1,454,682
Total Current Trade and Other Payables
1,906,978
2,130,854
Non-Current
Sundry payables and accrued expenses
510,479
-
Total Non-Current Trade and Other Payables
510,479
-
Total Trade and Other Payables
2,417,457
2,130,854
Note 14: Provisions
2024
$
2023
$
Current
Employee provisions
284,076
268,115
Total Current Provisions
284,076
268,115
Non-Current
Employee provisions
280,498
56,020
Make good provision (KEZAD)
808,753
752,048
Total Non-Current Provisions
1,089,251
808,068
Total Provisions
1,373,327
1,076,183
Annual Financial Report
52
Reconciliation of movements during the period:
Make Good
$
Employee
$
Balance at 1 July 2022
670,970
178,697
Additional provisions
-
311,702
Provisions used
-
(165,103)
Unwinding of discount
54,978
-
Impact of foreign exchange
26,100
(1,161)
Balance at 30 June 2023
752,048
324,135
Additional provisions
-
544,385
Provisions used
-
(294,766)
Unwinding of discount
61,127
-
Impact of foreign exchange
(4,422)
(9,181)
Balance at the end of the period
808,753
564,574
Note 15: Borrowings and Lease Liabilities
2024
$
2023
$
Current
Lease liabilities
-
565,588
Other borrowings
49,231
29,689
Total Current Borrowings and Lease Liabilities
49,231
595,277
Non-Current
Lease liabilities
7,549,168
7,011,887
Other borrowings
122,161
124,759
Total Non-Current Borrowings and Lease Liabilities
7,671,329
7,136,646
Total Borrowings and Lease Liabilities
7,720,560
7,731,923
(a) Lease liabilities
(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:
2024
$
2023
$
Balance at the beginning of period
7,577,475
7,024,069
Lease repayments paid/payable
(588,457)
(286,619)
Interest expense
594,118
570,669
Impact of foreign exchange
(33,968)
269,356
Balance at the end of the year
7,549,168
7,577,475
Annual Financial Report
53
(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.
2024
$
2023
$
Payments for short-term and low value leases
101,312
63,122
(b) Borrowings
The Company has a Revolving Vehicle Financing Facility for N$2M (approximately A$175,000) for
vehicles for use by the Namibian based team.
Reconciliation of movements during the year:
2024
$
2023
$
Balance at the beginning of period
154,448
-
Additions
54,903
169,114
Repayments paid/payable
(63,387)
(13,352)
Interest expense
21,111
6,372
Impact of foreign exchange
4,317
(7,686)
Balance at the end of the year
171,392
154,448
Note 16: Contributed Equity
a) Share capital
2024
2023
Number
$
Number
$
Fully paid ordinary shares
8,589,119,384
132,207,507 7,638,305,721
129,355,002
Share Issue Costs
(7,521,709)
(7,093,816)
124,685,798
122,261,186
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.
Annual Financial Report
54
Movements in ordinary share capital
Description
Date
Number of
shares
Issue
Price
$
Opening Balance
30 June 2023
7,638,305,721
122,261,186
Exercise of listed LPDO options
16 August 2023
2,227
0.030
67
Issue of Shares
10 May 2024
950,811,436
0.003
2,852,434
Less: Share Issue Costs
(427,889)
Closing Balance
30 June 2024
8,589,119,384
124,685,798
b) Share options
As at reporting date, Lepidico has the following options on issue:
Number
Exercise Price
Grant
Expiry
527,777,631
$0.030
4 November 2022
4 November 2024
67,500,000
$0.072
18 November 2021
18 November 2024
109,500,000
$0.026
28 November 2022
28 November 2025
475,405,920
$0.009
10 May 2024
10 November 2026
72,999,999
$0.013
22 November 2023
22 November 2026
33,142,856
$0.010
22 November 2023
22 November 2026
1,286,326,406
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
Number
Weighted
Average
Exercise
Price
$
Balance at 1 July 2022
785,674,523
0.030
Granted
637,278,131
0.029
Exercised
(75,579,198)
0.016
Expired
(557,005,825)
0.029
Balance at 30 June 2023
790,367,631
0.031
Granted
581,548,775
0.01
Exercised
(2,227)
0.03
Expired
(85,590,000)
0.014
Balance at 30 June 2024
1,286,324,179
0.023
Annual Financial Report
55
c) Share based payments
During the year the Company made the following share based payments:
(i) Related Party Options
On 22 November 2023, the Company issued a total of 106,142,855 options to directors, employees
and consultants under the Company’s Share Option Plan and were valued using Black Scholes
with the following assumptions:
Unlisted
Options
Unlisted
Options
Number of options in series
72,999,999
33,142,856
Grant date share price
$0.009
$0.009
Exercise price
$0.013
$0.010
Expected volatility
106.8%
106.8%
Option life
3 years
3 years
Dividend yield
0.00%
0.00%
Interest Rate
3.97%
3.97%
Value per option
$0.005
$0.006
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 an At-the-Market Subscription Agreement (ATM) (previously referred to as a
Controlled Placement Agreement) 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 ATM, 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).
To date, Lepidico has utilised the ATM to raise a total of $3.525m and the remaining standby equity
capital available under the ATM is $3.975m. There is no requirement on Lepidico to utilise the ATM
and the Company may terminate the ATM at any time without cost or penalty.
On 26 January 2024, the Company agreed with Acuity Capital to extend the expiry date of its ATM
from 31 January 2024 to 31 January 2027.
At 30 June 2024 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
ATM.
At 30 June 2024, the Company’s share price closed at $0.003 which could raise $218,700, before
fees, based on the number of shares held as security.
Annual Financial Report
56
Note 17: Reserves
2024
$
2023
$
Option Reserve
7,866,824
7,302,967
Warrant Reserve
415,135
415,135
Foreign Currency Translation Reserve
433,979
341,979
Total Reserves
8,715,938
8,060,081
a) Option Reserve
The options reserve is used to recognise the fair value of all options on issue but not yet exercised.
2024
$
2023
$
Opening Balance
7,302,967
6,619,847
Share based payments for the year
563,857
766,500
Transfer of fair value on exercise of options
-
(83,380)
Closing Balance
7,866,824
7,302,967
b) Warrant Reserve
The warrants reserve recognised the fair value of warrants contractually recognised under the
Desert Lion acquisition but not exercised.
2024
$
2023
$
415,135
415,135
c) Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of
foreign controlled subsidiaries.
2024
$
2023
$
Opening Balance
341,979
1,009,733
Movement during the year
92,000
(667,754)
Closing Balance
433,979
341,979
Note 18: Contingent Liabilities and Contingent Assets
a) Legal Dispute - Jinhui
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.
Annual Financial Report
57
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 previous period.
On 31 May 2023, Jinhui, a private Chinese corporation filed a Notice of Arbitration under the
Arbitration Rules of the Singapore International Arbitration Centre (Notice). The Notice was in
connection with the Jinhui Lithium Offtake Agreement.
In accordance with the Arbitration Rules of the Singapore International Arbitration Centre (SIAC),
the panel of three arbitrators, being each party’s nominated arbitrator and the third independent
arbitrator has been completed and the arbitration timetable set.
LCN received Jinhui’s Statement of Claim (SOC) on 4 December 2023. The SOC includes a claim
for US$5.0 million (plus interest and costs) which comprises the unamortised deposit paid under
the Offtake Agreement, plus expenses related to the dispute.
LCN filed its Statement of Defence and Counterclaim (SODCC) on 15 January 2024 and has
submitted a counterclaim, which is well in excess of the claim included in Jinhui’s SOC.
LCN received the Statement of Reply and Defence to Counterclaim on 8 February 2024 and on
18 March 2024, LCN filed its Statement of Rejoinder and Report to Defence to Counterclaim.
On 15 April 2024, parties exchanged requests for production of documents.
On 8 July 2024, parties exchanged documents in accordance with the Tribunal’s directions.
Witness statements were exchanged on 19 August 2024, in accordance with the arbitration
timetable. Lepidico’s witness statements provide a coherent and compelling narrative that is
consistent with Ontario law. Responses to witness statements are due to be exchanged by 23
September 2024.
The arbitration hearing has been provisionally set for early November 2024.
The Company believes that the arbitration brought against it is without merit. The Company
continues to work with Canadian and Namibian litigation counsel to vigorously defend itself.
Annual Financial Report
58
Note 19: 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.
Mineral
Exploration
Phase 1
Chemical
Plant
Intangibles
Corporate &
Unallocated
items
Total
$
$
$
$
$
(i) Segment performance
Year ended 30 June 2024
Revenue
16,903
-
-
178,268
195,171
Profit/(Loss) before tax
(1,790,667)
(1,702,278)
-
(4,682,744)
(8,175,689)
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)
Mineral
Exploration
Phase 1
Chemical
Plant
Intangibles
Corporate &
Unallocated
items
Total
$
$
$
$
$
(ii) Segment assets
At 30 June 2024
52,616,732
15,286,013
28,981,052
5,140,103
102,023,898
At 30 June 2023
49,979,128
16,247,735
28,993,120
11,232,439
106,452,422
Geographical Information
Australia
Canada
Africa
UAE
Europe
Total
$
$
$
$
$
$
(i) Segment performance
for the year ended:
30 June 2024
Revenue
177,266
-
17,905
-
-
195,171
Profit/(Loss) before tax
(2,771,595)
(1,714,819)
(1,631,647)
(1,624,636)
(432,992)
(8,175,689)
30 June 2023
Revenue
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)
(ii) Segment assets
At 30 June 2024
34,783,659
148,805
52,854,878
14,122,862
113,695
102,023,898
At 30 June 2023
40,415,845
179,038
51,109,226
14,726,799
21,514
106,452,422
Annual Financial Report
59
Note 20: 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:
2024
$
2023
$
Not later than one year
833,436
1,093,436
After one year but less than five years
2,316,872
2,706,090
3,150,308
3,799,526
Note 21: Cash Flow Information
2024
$
2023
$
Reconciliation of Cash Flow from Operations
with Loss after Income Tax
Loss after income tax
(7,068,212)
(3,604,123)
Adjustments items not impacting cash flow used in operations:
Depreciation and amortisation
610,384
571,325
Exploration expenditure written-off
144,008
46,162
R&D expenditure written-off
-
56,901
Fair value of options issued
563,857
766,500
Profit on sale of property, plant and equipment
(12,226)
-
Finance costs
655,245
625,647
Deferred Revenue recognised
-
(6,447,728)
Realised FX Gain
-
(301,393)
Income tax expense/(benefit)
(1,107,477)
643,777
Changes in assets and liabilities:
(Increase)/decrease in trade and other receivables
151,717
117,303
Increase/(decrease) in trade and other payables
107,859
618,962
Increase/(decrease) in provisions
240,439
145,438
Cash flow from/(used) in operations
(5,714,405)
(6,761,229)
Note 22: Related Party Transactions
Key Management Personnel Remuneration
2024
$
2023
$
Cash salaries, fees and other short-term benefits
2,869,579
3,869,766
Post employment benefits
77,773
72,033
Share based payments
543,857
710,500
3,491,209
4,652,299
Detailed remuneration disclosures are provided in the remuneration report on pages 21 to 29.
Annual Financial Report
60
Payments to director-related parties
2024
$
2023
$
Payments to director-related entities(1)
22,554
766,749
(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 2024 no invoices are payable (2023: $2,866).
Note 23: 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 counterparties 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 counterparty.
The Group’s cash and cash equivalents are held with HSBC Bank, Royal Bank of Canada, Alpha
Bank, Mauritius Commercial 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:
Note
2024
$
2023
$
Financial assets
Cash and cash equivalents
8
4,673,677
10,828,962
Trade and other receivables
9
1,060,301
1,431,588
Total financial assets
5,733,978
12,260,550
Annual Financial Report
61
(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.
30 June 2024
Note
Carrying
amount
Contractual
cash outflows
Within 1
year
1-2 years
2-5 years
$
$
$
$
$
Trade & other payables
13
2,417,457
2,417,457
1,906,978
510,479
-
Borrowings & Lease
Liabilities
15
7,720,560
17,312,869
645,812
645,812
1,936,879
Total
10,138,017
19,730,326
2,552,790
1,156,292
1,936,879
30 June 2023
Note
Carrying
amount
Contractual
cash outflows
Within 1
year
1-2
years
2-5 years
$
$
$
$
$
Trade & other payables
13
2,130,854
2,130,854
2,130,854
-
-
Borrowings & Lease
Liabilities
15
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
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$2.0M (approximately A$175,000) is secured by the
four acquired vehicles.
Annual Financial Report
62
(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:
2024
2023
%
$
%
$
Financial assets
Cash assets
Floating rate
2.83%
4,673,677
2.23%
10,828,962
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.
2024
$
2023
$
Change in Loss
Increase by 1%
63,218
111,121
Decrease by 1%
(63,218)
(108,983)
Change in Equity
Increase by 1%
63,218
111,121
Decrease by 1%
(63,218)
(108,983)
(ii) Currency Risk
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.
Annual Financial Report
63
The Group’s exposure to currency risk arising on financial assets and financial liabilities denominated
in various currencies was:
30 June 2024
NAD
CAD
AED
USD
GBP
EUR
$
$ د. إ
$
£
€
Cash and cash equivalents
2,570,769
87,140
458,499
69,994
16,213
31,290
Trade and other receivables
339,595
21,019
437,530
-
1,575
39,494
Trade and other payables
(5,728,807)
(584,509)
(674,458)
-
-
-
Borrowing & lease liabilities
(2,081,233)
-
(18,495,722)
-
-
-
Net currency exposure
(4,899,676)
(476,350)
(18,274,151)
69,994
17,788
70,784
30 June 2023
NAD
CAD
AED
USD
GBP
EUR
$
$ د. إ
$
£
€
Cash and cash equivalents
2,572,113
107,809
357,771
305,053
68,696
-
Trade and other receivables
1,510,857
41,454
1651198
84,087
1,575
8,543
Trade and other payables
(3,280,229)
(438,249)
(708,365)
(218,568)
-
-
Lease liabilities
(1,933,379)
-
(18,482,091)
-
-
-
Net currency exposure
(1,130,638)
(288,986)
(17,181,487)
170,572
70,271
8,543
The following significant exchange rates applied during the year:
Average rate
Reporting date spot rate
2024
2023
2024
2023
1 USD:AUD
1.52539
1.48594
1.49893
1.50566
1 NAD:AUD
0.08149
0.08367
0.08235
0.07989
1 CAD:AUD
1.12581
1.10925
1.09572
1.13629
1 AED:AUD
0.41518
0.40450
0.40805
0.40986
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 (2023: 10%) in the Australian dollar against the currencies
where it has significant currency risk at the reporting date, with all other variables held constant.
2024
A$
2023
A$
NAD
If the NAD had strengthened against the AUD
(40,349)
(9,032)
If the NAD had weakened against the AUD
40,349
9,032
CAD
If the CAD had strengthened against the AUD
(52,195)
(32,837)
If the CAD had weakened against the AUD
52,195
32,837
USD
If the USD had strengthened against the AUD
10,492
25,682
If the USD had weakened against the AUD
(10,492)
(25,682)
AED
If the AED had strengthened against the AUD
(745,675)
(704,195)
If the AED had weakened against the AUD
745,675
704,195
Annual Financial Report
64
(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 24: Parent Entity Financial Information
The following information relates to the legal parent only.
(a) Summary of Financial Information
2024
$
2023
$
Assets
Current assets
4,223,504
10,046,180
Non current assets
96,573,297
84,450,461
Total assets
100,796,801
94,496,641
Liabilities
Current liabilities
338,460
750,053
Non current liabilities
2,631,444
29,143
Total liabilities
2,969,904
779,196
Shareholders’ Equity
Issued capital
157,127,831
154,703,219
Reserves
10,697,159
8,273,426
Accumulated Losses
(69,998,093)
(69,259,200)
Total Shareholders’ Equity
97,826,897
93,717,445
Result of the parent entity
Loss for the year
738,893
(3,102,781)
Other comprehensive loss
-
-
Total comprehensive loss for the year
738,893
(3,102,781)
(b) Contractual commitments for the acquisition of property, plant and equipment
At 30 June 2024 the parent entity has no contractual commitments for the acquisition of property,
plant or equipment.
(c) Guarantees and contingent liabilities
At 30 June 2024 the parent entity has no guarantees or contingent liabilities other than as disclosed
in Note 18.
Annual Financial Report
65
Note 25: Subsequent Events
a) Jefferies Engagement
On 1 September 2024, the Company engaged Jefferies International Limited (“Jefferies”) to act as the
Company’s exclusive financial advisor in connection with maximising the value of the Karibib Lithium
Project, with potential to expand scope as strategically attractive. A wide breadth of deal structures
may be considered, from securing a minority equity partner to an asset sale.
Outreach to potential partners includes entities where the Company has previously had engagement,
as well as to new prospective partners that have been identified as having interest in direct
involvement in upstream hard rock lithium assets, with most transaction types to be considered.
Organisations that have specific interest in Lepidico’s novel and sustainable proprietary lithium mica
process technologies may also be considered. The outreach is global and spans organisation types
that include, but is not limited to, private corporations, state owned enterprises, investment funds and
private equity.
All transaction proposals will be assessed based on certainty, sustainability and for their ability to
maximise value for shareholders. Binding proposals are requested for October 2024.
The Company continues to progress discussions with various government entities in relation to
funding support for the integrated Phase 1 Project.
The Company remains committed to securing a transaction or transactions for the Phase 1 Project in
the near term and will provide updates on progress once material milestones are reached.
b) Public Road Access (Namibia)
During the year Lepidico Chemicals Namibia (Pty) Ltd (LCN) filed a motion with the High Court in
Namibia against Ombujomenge Close Corporation for hindering and/or restricting the access of the
LCN to Public Road FR1965.
LCN needs to access the Public Road to be able to reach its exploration tenement and in order to
undertake exploration work on a neighbouring property.
On 18 September 2024, the Company received notification that the High Court of Namibia ruled in
favour of LCN, granting access to Public Road FR 1965 and ordering the respondants to pay LCN’s
costs.
Annual Financial Report
66
Consolidated Entity Disclosure Statement
at 30 June 2024
Body
Corporate % of
ownership
interest
Entity Name
Entity Type
Body
Corporate
country of
Incorporation
Country of
Tax
Residency
2024
%
2023
%
Lepidico Ltd
Body corporate
Australia
Australia
N/A
N/A
Lepidico Holdings Pty Ltd
Body corporate
Australia
Australia
100
100
Lepidico (UK) Limited
Body corporate
England
UK
100
100
Bright Minz Pty Ltd
Body corporate
Australia
Australia
100
100
Li-Technology Pty Ltd
Body corporate
Australia
Australia
100
100
Mica Exploration Areas Pty Ltd
Body corporate
Australia
Australia
100
100
Silica Technology Pty Ltd
Body corporate
Australia
Australia
100
100
Lepidico (Netherlands) Coöperatief U.A.
Body corporate
Netherlands
Netherlands
100
100
Lepidico (Netherlands) B.V.
Body corporate
Netherlands
Netherlands
100
100
Lepidico Holdings (Canada) Inc
Body corporate
Canada
Canada
100
100
Lepidico (Canada) Inc
Body corporate
Canada
Canada
100
100
Lepidico (Mauritius) Limited
Body corporate
Mauritius
Mauritius
100
100
Lepidico Chemicals Namibia (Pty) Ltd
Body corporate
Namibia
Namibia
80
80
Lepidico Infrastructure Namibia (Pty) Ltd
Body corporate
Namibia
Namibia
100
100
Lepidico Chemicals Manufacturing Ltd
Body corporate
UAE
UAE
100
100
Lepidico Strategic Chemicals Manufacturing LLC-OPC
Body corporate
UAE
UAE
100
-
Annual Financial Report
67
Directors’ Declaration
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 2024
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 financial statements comply with international reporting standards as disclosed in Note 1.
4. The consolidated entity disclosure statement for Lepidico Ltd and its controlled entities as at 30
June 2024 is true and correct.
5. 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 2024.
This declaration is made in accordance with a resolution of the Board of Directors.
__________________
Joe Walsh
Managing Director
Dated this 20th day of September 2024
68
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.
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 2024, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including material accounting policy information, the consolidated entity disclosure statement
and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial
performance for the year then ended; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including
Independence Standards) (the “Code”) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Emphasis of Matter – Material Uncertainty related to carrying value of assets under
development, right of use asset, exploration and evaluation expenditure and intangible
assets
We draw attention to Notes 1(p)(i) to (iii), 10 to 12 in the financial report, which indicates that a material
uncertainty exists in relation to the Group’s ability to realise the carrying value of its significant non-current
assets in the ordinary course of business. The recoverability of these assets is wholly dependent on the
successful development and commercial exploitation of the Company’s proposed Phase 1 Project or
alternatively, sale of these assets. Our opinion is not modified in respect of this matter.
Emphasis of Matter – Material Uncertainty related to going concern
We draw attention to Note 1(a) of the financial report, which describes the principal conditions that may cast
doubts about the Group’s ability to continue as a going concern. These conditions as explained in Note 1(a)
indicate the existence of a material uncertainty about the Group’s ability to continue as a going concern for
at least the next 12 months. If the Group is unable to continue as a going concern, it may be unable to
realise its assets and discharge its liabilities in the normal course of business and at amounts other than as
stated in the financial report. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
69
Key audit matter
How the matter was addressed in our audit
Carrying value of Property, Plant & Equipment, Exploration & Evaluation Expenditure and
Intangible Assets
Refer to Notes 1(p)(i)-(iii), Notes 10 Property, Plant & Equipment, 11 Exploration & Evaluation
Expenditure & 12 Intangible Assets
As at 30 June 2024 the Group had
non-current assets with an aggregate
value of $96,289,920 comprising
property, plant & equipment of
$16,806,534 capitalised exploration
and evaluation expenditure of
$50,502,334 and intangible assets with
a carrying value of $28,981,052. 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. These assets
have been subject to an impairment
assessment by management.
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 (and updated
during the year), in their impairment
review of the property, plant &
equipment, exploration and evaluation
and intangible assets. The Project
NPV remains significantly higher than
the Group’s non-current 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
Our procedures included, amongst others the following:
•
Review of the vertically integrated Phase 1 Project
Definitive Feasibility Study (“DFS”) completed in May
2020 and subsequently updated during the year, which is
based on a commercial scale L-Max Plant, comprising an
integrated mine, concentrator and chemical conversion
plant development
•
In conjunction with our internal valuation experts, we
evaluated the updated DFS model and challenged the
methodologies and assumptions used by management to
estimate recoverable amounts of the property, plant &
equipment, exploration and evaluation and technology
assets. With commodity forecast pricing being the
predominant driver behind the DFS financial model, we
assessed the source, integrity and reliability of
management’s forecast pricing data in light of current
economic conditions. We obtained an understanding of
the various independent providers or sources of forecast
pricing data available and considered the basis for
management’s reliance on one provider (namely
Benchmark Mineral Intelligence) to be appropriate and
reasonable. We also performed a stress test (sensitivity
analysis) to see how the NPV of Phase 1 Project would
vary when high risk items (commodity pricing) are
changed.
•
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 DFS.
•
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 (via a tenement search) 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.
70
Key audit matter
How the matter was addressed in our audit
development activities to the Group’s
balance sheet.
Significant judgement is required to
assess whether there are any
indicators of impairment in light of
current economic conditions.
•
Reviewed the Group’s patent listing and verified
ownership and status of a sample against Australian and
overseas intellectual property government agencies.
•
Compared the Group’s market capitalisation at balance
date to its net asset position, noting that the market
capitalisation was at a significant discount relative to net
assets. Market capitalisation below net assets is an
indicator of possible impairment, thereby requiring further
consideration.
•
Assessing the appropriateness of the relevant
disclosures included in the relevant notes to the financial
statements
•
We included an emphasis of matter paragraph above in
relation to the material uncertainty that exists over the
recoverability of these assets. This is due to the material
uncertainty concerning the ability of the Group at this
time to advance and commercially exploit its major
assets as part of the Phase 1 Project.
Contingent Liabilities – Legal Dispute
Refer to Note 18(a) Contingent Liabilities: Legal Dispute - Jinhui
At 30 June 2024, the Company is a
party to a legal dispute regarding a
payment from Jiangxi Jinhui Lithium
Co Ltd (“Jinhui”) under a previous
offtake agreement as disclosed in note
18(a) whereby management has
exercised significant judgement in
respect to the classification of the
dispute as a contingent liability.
.
Our procedures included, amongst others the following:
•
Holding discussions with the Board, management and
obtaining letters from the Company’s external legal
advisors regarding the likely outcome and exposure to
the relevant litigation and claims.
•
Reviewing the latest correspondence with the claimant.
•
Assessing whether the status of the claim meets the
definition of a liability or a contingent liability in
accordance with Australian Accounting Standards.
•
We also assessed the appropriateness of the related
disclosures in note 18(a) to 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 2024 but does not include the financial
report and our auditor’s report thereon. Our opinion on the financial report does not cover the other
information and 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.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and will request that it is corrected. If it is not corrected,
we will seek to have the matter appropriately brought to the attention of users for whom our report is
prepared.
71
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b)
the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
c)
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a
true and fair view and is free from material misstatement, whether due to fraud or error; &
ii.
the consolidated entity disclosure statement that is true and correct and is free of
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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/ar1_2020.pdf. This description forms part of our
auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report as included in the Directors’ Report for the year ended 30
June 2024.
In our opinion, the Remuneration Report of Lepidico Limited, for the year ended 30 June 2024 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.
Moore Australia Audit (WA)
Chartered Accountants
SL Tan
Partner – Audit and Assurance
Moore Australia Audit (WA)
Perth
20th day of September 2024
Annual Financial Report
72
Additional ASX Information
The Information set out below was applicable at 20th September 2024.
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
Class
Number of units
Number of
holders
Quoted
Fully paid ordinary shares (LPD)
8,589,124,884
13,177
Quoted
$0.03 Options (LPDO)
527,769,904
2,411
Quoted
$0.009 (LPDOE)
475,405,920
1,048
Unquoted
$0.072 Options
67,500,000
7
Unquoted
$0.026 Options
109,500,000
13
Unquoted
$0.013 Options
72,999,999
8
Unquoted
$0.01 Options
33,142,856
3
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 Parcel
Size
Holders
Shares
Minimum $500.00 parcel at $0.003 per share
166,666
8,772
429,826,263
Annual Financial Report
73
6. Distribution of shareholders
The distribution of holders in each class of quoted securities are as follows:
Distribution of
equity securities
Fully Paid Shares
Quoted Options
Quoted Options
LPD
LPDO
LPDOE
Number of
holders
% of total
issued
Number of
holders
% of total
issued
Number of
holders
% of total
issued
1-1,000
939
0.00
194
0.02
24
0.00
1,001–5,000
268
0.01
557
0.29
166
0.10
5,001–10,000
325
0.03
287
0.41
100
0.15
10,001-100,000
6,007
3.07
843
6.68
398
3.30
101,000 and above
5,638
96.88
530
92.60
360
96.45
Totals
13,177
100.00
2,411
100.00
1,048
100.00
The distribution of holders in each class of unquoted securities are as follows:
Distribution of equity
securities
Unquoted Options
$0.072
$0.026
$0.013
$0.010
#
%
#
%
#
%
#
%
1-1,000
-
-
-
-
-
-
-
-
1,001–5,000
-
-
-
-
-
-
-
-
5,001–10,000
-
-
-
-
-
-
-
-
10,001-100,000
-
-
-
-
-
-
-
-
101,000 and above
7
100
13
100
8
100
3
100
Totals
7
100
13
100
8
100
3
100
# Number of holders
% Percentage of total issued
Annual Financial Report
74
7. 20 Largest shareholders
The names of the 20 largest holders of ordinary shares are as follows:
Shareholder
Number
%
1
BNP Paribas Noms Pty Ltd
457,651,723
5.33%
2
Citicorp Nominees Pty Limited
336,715,285
3.92%
3
BNP Paribas Nominees Pty Ltd
283,315,627
3.30%
4
HSBC Custody Nominees (Australia) Limited
279,520,482
3.25%
5
Strategic Metallurgy Holdings Pty Ltd
269,604,534
3.14%
6
Perth Capital Pty Ltd
109,998,607
1.28%
7
Acuity Capital Investment Management Pty Ltd
72,900,000
0.85%
8
Finclear Services Pty Ltd
64,265,618
0.75%
9
BNP Paribas Nominees Pty Ltd
58,740,081
0.68%
10
Mr Johannes Hendrik Thorburn
56,788,306
0.66%
11
Spreadys Adventures
51,260,473
0.60%
12
Mr Gavin Sidney Milroy Becker & Mrs Wendy Mary Becker
51,250,000
0.60%
13
Mr Ivars Vadzis
50,841,567
0.59%
14
Strategic Metallurgy Pty Ltd
50,000,134
0.58%
15
Mr Ryan Gowrie James Spreadborough
50,000,000
0.58%
16
Ms Kelley Marie Attias
43,761,110
0.51%
17
Mr Carl Holst
43,749,220
0.51%
18
Dr Mohammadreza Niazi
41,800,000
0.49%
19
Rennie Jackson SMSF Pty Limited
41,444,443
0.48%
20
Mr Radoslav Lovis
40,055,000
0.47%
Total
2,453,662,210
28.57%
Annual Financial Report
75
The names of the 20 largest holders of quoted LPDO options are as follows:
Option Name
Number
%
1
Mrs Lynette Irene Brooks
32,000,000
6.06%
2
Mr Steven Parsons & Miss Chia Lu
15,557,556
2.95%
3
Rookharp Capital Pty Limited
14,625,000
2.77%
4
Mr Antony Edward Anderson
12,380,523
2.35%
5
Citicorp Nominees Pty Limited
12,157,107
2.30%
6
The Subramaniam Family Pty Ltd
12,000,000
2.27%
7
HSBC Custody Nominees (Australia) Limited
10,586,494
2.01%
8
Evolution Capital Advisors Pty Ltd
10,400,000
1.97%
9
Mrs Doreen Joan Ellison
8,000,000
1.52%
10
BNP Paribas Noms Pty Ltd
7,878,678
1.49%
11
Mr Mitchell James Gill
6,978,469
1.32%
12
Wayne Dunlop Superannuation Pty Ltd
6,161,861
1.17%
13
Mr Dzung Quoc Can & Mrs Cam My Trinh
6,000,000
1.14%
14
3M Holdings Pty Limited
5,850,000
1.11%
15
Perth Capital Pty Ltd
5,555,556
1.05%
16
Mr Shlomi Almoslinos
5,500,000
1.04%
17
Mr David Gazzola
5,270,771
1.00%
18
Spreadborough Family Super Pty Ltd
5,111,659
0.97%
19
Buffalo One Pty Ltd
5,000,000
0.95%
19
Mrs Harshini Lanka Wijetunga
5,000,000
0.95%
19
Invia Custodian Pty Limited
5,000,000
0.95%
19
M T & G K Investments Pty Ltd
5,000,000
0.95%
19
Mr Graham Woodward & Mrs Sheryl Woodward
5,000,000
0.95%
19
North Western Power Pty Ltd
5,000,000
0.95%
20
NKF Health Pty Ltd
4,336,840
0.82%
Total
216,350,514
40.99%
Annual Financial Report
76
The names of the 20 largest holders of quoted LPDOE options are as follows:
Option Holder
Number
%
1
Mr Ryan James Rowe
50,000,000
10.52%
2
Rookharp Capital Pty Limited
33,332,170
7.01%
3
3M Holdings Pty Limited
11,462,500
2.41%
4
Mrs Lynette Irene Brooks
10,993,262
2.31%
5
Mr Mitchell James Gill
10,935,232
2.30%
6
Mr Gavin Sidney Milroy Becker & Mrs Wendy Mary Becker
10,125,000
2.13%
7
HP Super Fund Pty Ltd
7,750,000
1.63%
8
Gist Holdings Pty Ltd
7,000,000
1.47%
9
BNP Paribas Noms Pty Ltd
6,739,160
1.42%
10
BNP Paribas Nominees Pty Ltd
6,546,169
1.38%
11
Mr Anthony John Gregory
5,000,000
1.05%
11
Perth Capital Pty Ltd
5,000,000
1.05%
11
Mrs Jillian Margaret Catto
5,000,000
1.05%
11
Chaleyer Holdings Pty Ltd
5,000,000
1.05%
11
Mr Radoslav Lovis
5,000,000
1.05%
11
Mr Christopher Ku
5,000,000
1.05%
12
Mr Steven Parsons & Miss Chia Lu
4,999,999
1.05%
13
Mr Stuart Fenwick
4,778,786
1.01%
14
Ms Kelley Marie Attias
4,376,111
0.92%
15
Mr Carl Holst
4,297,222
0.90%
16
Mr Benjamin James Opie
4,166,500
0.88%
17
Ms Kelley Marie Attias & Ms Claire Miriam Attias
3,927,286
0.83%
18
Nalmor Pty Ltd John Chappell Super Fund A/C
3,677,778
0.77%
19
Mr Graham Woodward & Mrs Sheryl Woodward
3,500,000
0.74%
20
ML Education Pty Ltd
3,373,120
0.71%
Total
221,980,295
46.69%
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
Annual Financial Report
77
12. Restricted securities or securities subject to voluntary escrow
There are currently no restricted or escrowed securities.
13. Unquoted securities
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
Number
of units
% Held
$0.072 Options
Julian (Joe) Walsh
15,000,000
22.22%
$0.010 Options
Tom Dukovcic
9,428,571
28.45%
$0.010 Options
Shontel Norgate
9,428,571
28.45%
$0.010 Options
Julian (Joe) Walsh
14,285,714
43.10%
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
Lepidico
Interest
Expiry Date
Area
ML 204
Lepidico Chemicals Namibia (Pty) Ltd
80%
18/06/2028
69 km2
EPL 5439
Lepidico Chemicals Namibia (Pty) Ltd
80%
09/06/20241
165 km2
1 Application for renewal lodged on 8 March 2024