Annual Report 2023
ABN 38 119 992 175
Lotus Resources Annual Report 2023 1
Corporate Directory
Directors
Mr Michael Bowen - Non-Executive Chairman
Mr Keith Bowes - Managing Director/CEO
Mr Grant Davey - Non-Executive Director
Mr Mark Hanlon - Non-Executive Director
Ms Dixie Marshall - Non-Executive Director
Share Registry
Computershare Investor Services Pty Ltd
Level 17, 221 St George’s Terrace
Perth, Western Australia, 6000
Telephone: + 61 8 9323 2000
Facsimile: + 61 8 9323 2033
Company Secretary
Ms Catherine Anderson
Principal Place of Business and Registered Office
Level 20, 140 St Georges Terrace
Perth, Western Australia, 6000
Telephone: +61 8 9200 3427
Website Address
www.lotusresources.com.au
Auditor
RSM Australia Partners
Level 32, Exchange Tower,
2 The Esplanade,
Perth WA 6000
Solicitor
Thomson Geer
Level 27, Exchange Tower
2 The Esplanade
Perth, Western Australia, 6000
Securities Exchange
ASX Limited
Level 40
Central Park, 152-159
St Georges Terrace
Perth, Western Australia, 6000
ASX Code: LOT
OTCQB
Level 12, 300 Vesey Street
New York, NY 10282
OTC Code: LTSRF
2 Lotus Resources Annual Report 2023
Contents
Letter from the Chairman and CEO
Directors’ Report
Review of Activities
Sustainability and ESG
Risk Management
Directors’ Profiles
Annual Statement of Ore
Reserves and Mineral Resources
Audited Remuneration Report
Auditor’s Independence Declaration
Corporate Governance Statement
Financial Statements
Notes to the financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
4
6
6
13
17
23
30
34
43
44
45
51
82
83
87
Lotus Resources Annual Report 2023 3
Letter from
the Chairman
and CEO
resource on the ASX. The Company also
recognises Botswana as a premier mining
jurisdiction in the world having recently
being ranked #2 in the world by the Fraser
Institute on the policy perception index.
This past year has also seen further improved
sentiment
in the nuclear and uranium
industries, as the world continues its transition
away from fossil fuels to a zero-carbon
emission future. This positive sentiment has
been reflected in the reported uranium
spot price which over the past 24-months
has increased from US$43/lb (30 September
2021) to approximately US$67/lb currently
(20 September 2023). Further price increases
are still likely to occur based on the existing
annual supply gap of almost 40Mlbs of U3O8
equivalent. Higher pricing will be essential
to incentivise new production entering the
market to match the forecasted demand
from existing and new large-scale reactors,
as well as the forecast for the new small
modular reactors.
The Company has also continued to develop
its Environment, Social and Governance
(ESG) profile with our second Sustainability
Report issued back in November 2022 and
our third report expected to be released
later in November this year. The reports
clearly show our commitment to becoming
a leader in the industry regarding ESG and
to leave a lasting positive legacy in Malawi.
Our reporting methodology is also beginning
to mature with a more quantitative analysis
of our ESG position being undertaken,
including working towards reporting against
the Taskforce for Climate-related Financial
Disclosure (TCFD) framework, an important
global framework for understanding and
mitigating financial implications of climate
change. This approach is becoming more
critical as discussions with global utilities
for future offtake have indicated our ESG
credentials, especially with European
utilities, is a key consideration for signing
offtake contracts.
Dear Shareholders
On behalf of the Board of Directors
for Lotus Resources Limited, we are
delighted to present the Annual
Report for the financial year ended
30 June 2023.
The Company has had a very productive
year with our activities focusing around two
key areas; continuing the advancement of
the Kayelekera Project in Malawi with the
completion of our Definitive Feasibility Study
(DFS) which was announced to the market
in August 2022 and a resource growth
strategy with the recently announced deal
to acquire the ASX listed company A-Cap
Energy through a Scheme of Arrangements
(announced in July 2023).
The Kayelekera DFS confirmed the Project
as one of the lowest capital cost uranium
projects globally (US$88 million), which
can also recommence production quickly
(15 months development for construction/
refurbishment) once a Final
Investment
Decision (FID) is made. The study highlighted
an annual production of 2.4Mlbs U3O8 per
annum (first seven years), with a 10-year
life-of-mine producing a total of 19.3Mlbs
U3O8. Cash Operating Costs of US$29.10/lb
(All in Sustaining Cost of US$36.20/lb) were
also determined for the first seven years of
operation prior to the commencement of
production from the lower grade stockpiles.
The A-Cap Energy merger, announced post
reporting date, gives the company the
ability to become a long-term supplier in the
uranium market through the development
of A-Cap’s Letlhakane Project located in
Botswana. The project has one of the largest
mineral resources globally (190Mlbs of U3O8
equivalent) which when combined with
the Kayelekera mineral resource will make
the merged entity the third largest uranium
4 Lotus Resources Annual Report 2023
Letter from
the Chairman
and CEO
The Company made the last payment (cash and
a deferred share consideration) to Paladin Energy
Limited during the March Quarter to close out the
acquisition of the Kayelekera asset1. Even with
this expenditure the Company has maintained
tight fiscal responsibility and is in a sound financial
position with funding through to end 2024 under
the current expected expenditure profile.
On behalf of the Lotus Board and management
team, we would also like to thank the Malawi
government, most notably the Minister of Mines,
The Honourable Ms Monica Chang’anamuno,
the Minister of Finance, the Honourable Mr
Sosten Gwengue, and the Attorney General, the
Honourable Mr Thabo Chakaka-Nyirenda, for
their continued support and the faith they have
shown in the Kayelekera Project. We look forward
to continuing working closely together in the years
ahead.
Finally, we would like to thank all shareholders for
their continued support. This is an exciting time for
your Company, and we look forward to keeping
you updated as we continue our progress at
Kayelekera in the future.
Mr Michel Bowen
Non-Executive Chairman
Mr Keith Bowes
Managing Director/CEO
1 A A$5 million capped royalty
remains which will be incurred
when production restarts
Lotus Resources Annual Report 2023 5
Lotus Resources Annual Report 2023 5
Directors’
Report
The Directors present their report, including the remuneration report, together with
the Corporate Governance Statement and financial report of Lotus Resources
Limited (the Company
consolidated
Lotus Resources) and its subsidiaries (the consolidated
entity or GroupGroup) for the year ended 30 June 2023 and the auditor’s report thereon.
entity
Company or Lotus Resources
REVIEW OF ACTIVITIES
Kayelekera Project Overview
The Kayelekera Uranium Project (Kayelekera or the Project) is located in northern Malawi, southern Africa,
52 kilometres (km) west by road from the town of Karonga. The Project hosts a current Mineral Resource
Estimate of 51.1 million pounds (Mlbs) U3O8 including the inaugural resource at Livingstonia, and historically
produced approximately 11Mlbs U3O8 equivalent over a five-year period from 2009-2014, before ceasing
production in 2014 and entering into care and maintenance due to low uranium prices.
KAYELEKERA
MINESITE
Karonga
Chilumba
ZAMBIA
Rumphi
Mzimba
Mzuzu
LAKE
MALAWI
TANZANIA
MALAWI
MALAWI
Kasungu
MOZAMBIQUE
Lilongwe
Zomba
Blantyre
N
100km
Minesite
Airport
Roads
Towns
Figure 1: Location of the Kayelekera Uranium Mine
and Livingstonia Uranium Tenements
ZIMBABWE
6 Lotus Resources Annual Report 2023
6 Lotus Resources Annual Report 2023
Directors’ Report
During the 2023 financial year Lotus Resources continued to advance Kayelekera to be able to quickly
recommence production once the uranium price recovers to levels supportive of new production
required to meet the future impending shortfall in uranium supply. The significant achievements during
the year and up to the date of this report included the following:
Completion and release
of the Restart Definitive
Feasibility Study in August
2022 which confirmed
Kayelekera as a low cost,
quick restart uranium
operation.
Participated in a number
of Request for Proposals
(RFPs) from utilities in
connection with their future
uranium demand.
Further progress towards
alignment of the Company’s
Environmental, Social and
Governance (ESG) reporting
against the Taskforce for
Climate-related Financial
Disclosure (TCFD) framework,
an important global
framework for understanding
and mitigating financial
implications of climate
change. This framework will
be used in conjunction with
UN Sustainable Development
Goals (SDGs) and Global
Reporting Initiative (GRI)
Standards when we release
our third Sustainability Report
in November 2023.
Advanced discussions
with the Malawi national
electricity supplier (ESCOM)
using an expert consultant
regarding the connection of
the Project Site to the Malawi
national grid.
Multiple discussions and
visits to Malawi to meet
with Government Ministers
and representatives
to progress the Mine
Development Agreement
with the Government of
Malawi (GoM). This has
included a benchmarking
exercise undertaken with an
independent expert to advise
the GoM on comparable
fiscal regimes in other African
countries with established
mining industries and /or
uranium production.
Completion of a $25
million placement
to provide funding in
accordance with the
stated uses.
Continued and advanced
discussions with major
global utilities and uranium
traders to re-introduce the
Project and discuss potential
offtake agreements.
Continued to review
potential new exploration
areas in Malawi as well as
other uranium opportunities
in other jurisdictions as the
Company looks to grow its
pipeline of development
assets.
Ongoing care and
maintenance activities at
Kayelekera to ensure site
plant and infrastructure is
in a good state for restart
of production, including
preparations for water
treatment following the
wet season in Malawi.
Lotus Resources Annual Report 2023 7
Lotus Resources Annual Report 2023 7
Directors’ Report
Merger with A-Cap Resources to Create
Leading Southern African Focused
Uranium Player
Lotus Resources and ASX
listed A-Cap
Energy Limited (A-Cap) announced on 13
July 2023 their intention to merge by way
of Scheme of Arrangement (the Share
Scheme). Under the Share Scheme, A-Cap
shareholders will receive 1 new Lotus share
for every 3.54 A-Cap shares held on the Share
Scheme record date. If the Share Scheme
is approved and
implemented, Lotus
shareholders will hold approximately 79% of
the merger group with A-Cap shareholders
holding the remaining approximately 21%.
A-Cap owns the Letlhakane Uranium Project
(the Letlhakane Project) in Botswana and
holds a 55% interest in the WIlconi Nickel
Cobalt Project (the WIlconi Project)
in
Western Australia.
The Letlhakane Project consists of a
significant JORC 2012 Mineral Resource of
190.4Mlbs of U3O8 equivalent (268.9Mt at
321ppm U3O8)2. The mining licence has been
in place since 2016 and provisional surface
rights have been granted as well as water
abstraction rights and rights to install water
bores. The asset is located close to high
quality infrastructure with a sealed highway,
rail line and power line running past the
mining
is
located within 50 kilometres of Francistown,
a major population centre.
licence boundary. The asset
Botswana is a mining friendly jurisdiction,
consistently ranking highly in the Fraser Institute
Perceptions Index (for the latest report for
2022 it was rated the top mining jurisdiction in
African and the second worldwide).
The merger will create a leading African
focused uranium player with significant scale
and resources by combining production
ready asset, Kayelekera, with a future large
scale growth asset Letlhakane. The merger
combines
two highly complementary
and synergistic projects, both located in
southern Africa and both with significant
leverage to the global uranium thematic.
Two geographic project locations provide
diversification benefits to mitigate single
asset risk whilst offering the potential to
capture regional synergies.
Restart Definitive Feasibility Study
The Company released its Restart Definitive
Feasibility Study (the Restart DFS or the
Study) on 11 August 2022. Refer to the ASX
announcements released for full details. The
Table 1 sets out the key project outputs from
the Study.
The key highlights of the Restart DFS are as
follows:
1. Quick restart to production following a
final investment decision
Development
to
estimated at 15 months in the Study.
first production
2. Proven processing facility reduces start-
up risks
Debottlenecked flowsheet consisting of
traditional milling, acid leach and resin-
in-pulp circuits with high metallurgical
recoveries of 86.7%.
3. Simple mining
technique
lowers
operating costs
Shallow open pit mining with low strip
ratio of 1.8:1 (waste to ore ratio)
4. High degree of confidence in orebody
96% of the uranium produced from the
mine plan being sourced from ore reserves.
5. Low initial capital cost
US$88 million ranks the Project as one of
the lowest capital cost uranium projects
globally with an initial capital intensity of
US$37 per pound (lb)3.
Includes US$35.8 million for new plant
and infrastructure to improve the project
economics and plant reliability including a
new acid plant and steam turbine (US$15.3
million), a connection to the national grid
(US$13.0 million) and upgrade to the front-
end processing circuit to incorporate ore
sorting (US$6.0 million).
6.
Improved margins due to low operating
cost
Cash costs are US$29.1/lb3 and AISC
of US$36.2/lb4 during the first 7 years of
production (after ramp-up).
2 Refer to Lotus ASX announcement dated 13 July 2023.
3 Initial Capital Intensity = Initial Capital Cost (US$88 million) / Steady State Average Production (2.4Mlbs U3O8)
4 The key outputs are presented for the Project on a 100% ownership basis. Lotus Resources owns 85% of the Project with the remaining 15%
held by the Government of Malawi.
8 Lotus Resources Annual Report 2023
Directors’ Report
Table 1: Key Project Outputs4
Production
Mine Life (Years)
Total Material Mined (Mt)
Strip Ratio (waste to ore ratio)
Ore Tonnes (Mt)
Average Mined Grades (ppm U3O8)
Total U3O8 Mined (Mlbs)
Existing Stockpiles
Tonnes (Mt)
Grade (ppm U3O8)
Plant
Crusher Feed (Mt)
Crusher Feed Grade (ppm U3O8)
Average Feed Upgrade factor (ore sorting)
Average Ore Sorting Recovery (%)
Mill Feed (Mt)
Average Mill Feed Grade (ppm U3O8)
Process Plant Recovery (%)
Average Annual Production (Mlbs)
Steady State Annual Production (Mlbs)
LOM Production (Mlbs)
Operating Costs
Mining Costs (US$ / t mined)
Processing Costs5 (US$ / t ore)
G&A Costs (US$M pa)
Cash costs6 (US$ / lb)
AISC7 (US$ / lb)
Initial Capital Costs
Initial Capital (US$M)
Contingency (US$M)
Pre-Production (US$M)
LOM total / Average
9.5
40.5
1.8
14.3
648
20.5
4.1
470
18.4
609
1.30
77.8
12.8
792
86.7
2.03
2.42
19.3
3.04
27.60
11.10
30.10
37.70
78.3
9.5
11.5
4 The key outputs are presented for the Project on a 100% ownership basis. Lotus Resources owns 85% of the Project with the remaining 15%
held by the Government of Malawi.
5 Includes maintenance costs and power costs.
6 Cash Costs include all mining and stockpile rehandling, processing, maintenance, and general and administrative costs.
7 AISC refers to All in Sustaining Costs which include Cash Costs plus product transport, insurance and conversion costs, Government and
third-party royalties and sustaining capital (including TSF costs).
Lotus Resources Annual Report 2023 9
Directors’ Report
Restart Definitive Feasibility Study
(continued)
7. Robust mine life with exploration upside
(LOM), with
10-year Life of Mine
production of
19.3Mlbs of U3O8
equivalent at an average annual
production rate of 2.0Mlbs (2.4Mlbs
per annum for the first 7 years before
production is sourced from stockpiles).
Exploration success at Livingstonia and
potential further opportunities at Chilumba
and around
the current Kayelekera
resource, demonstrate potential to extend
the LOM past the 10 years.
8. Significantly improved ESG results
Power related carbon dioxide (CO2)
emissions reduced by over 72% (or
approximately 21,000 tonnes per annum)
in the new proposed hybrid power system
compared to the historical operation.
It is estimated that over 600 jobs will be
created for the local community.
Community Development Agreement
in progress to support development of
our qualified communities.
the various consultants
The Company has also received proposals
from
identified
to undertake one of the final stages of
technical work prior to the restart, Front End
Engineering and Design (FEED).
Connection to Malawi National Grid
The Company is working towards a Power
Implementation Agreement and Power
Supply Agreement with the Energy Supply
Company of Malawi (ESCOM) which will
facilitate the connection of Kayelekera
to the Malawi national grid and allow the
company to access cheaper power, a
critical component of lower operating costs
reported in the Restart DFS.
As the Restart DFS highlighted, connection
to the Malawi national grid which is sourced
predominantly from hydro is a critical part
of Lotus low carbon strategy. During the
financial year, Lotus assisted by its technical
consultants, worked with ESCOM to define
the optimal grid connection
solutions
and the associated power reliability and
upgrade costs. The preferred options will
be taken forward to the next stage which
will involve a commercial working group
to consider the business case for upgrades
and new installations required, including
negotiating the electricity tariffs that will be
applicable to Kayelekera.
Lotus has also initiated an assessment of
what will be required for the installation of the
new transmission line from an environmental
impact assessment perspective depending
on the selected route, and this will form part
of the selection process.
10 Lotus Resources Annual Report 2023
10 Lotus Resources Annual Report 2023
Directors’ Report
Discussions with Offtake Partners
Uranium Market
from
Approximately 11Mlbs U3O8 equivalent
was successfully produced, marketed and
delivered
the Kayelekera Project
during the period from 2009 to 2014 to
conversion facilities located in the United
States, Canada and France operated
by Honeywell, Cameco, and Orano,
respectively.
long-term nature of supply
Given the
contracts with nuclear utilities, it is typical
to engage in supply contracting discussions
with utilities and other nuclear fuel market
participants long before production at a
uranium mine commences.
During the financial year, the Company
continued to engage with potential offtake
partners and was invited to participate in a
number of requests for proposal (RFP’s) for
supply contracts. Discussions have been led
by Dr Robert Rich, the Company’s Uranium
Marketing and Sales Executive based in
the USA.
spot uranium price
The uranium market has seen a steadily
from
increasing
between US$45/lb and US$50/lb in June
2022 increasing to US$56/lb to US$58/lb in
June 2023, with the price lifting further post
balance date to US$67/lb (20 September
2023). Term contract prices have also risen
in a similar manner to the spot price. Positive
sentiment continues within the uranium
market as Governments seek to execute
plans to meet carbon reduction and zero-
carbon emissions targets and high energy
prices and increases in energy demands
with the electrification of transport.
reactor design all
New nuclear reactors builds, life extensions
to existing reactors as well as advancements
in small modular
reactors (SMRs) and
indicate
advanced
growing demand for uranium supply moving
forward. Companies such as Lotus which
have assets that have previously produced
and can come back on-line relatively
quickly are the ones most likely to benefit
in the near-term for the new demand
anticipated.
Lotus Resources Annual Report 2023 11
Lotus Resources Annual Report 2023 11
Directors’ Report
Care and Maintenance Activities at
Kayelekera
Health & Safety
The Kayelekera mine has achieved 3,282
Lost Time Injury (LTI) free days with a total
3,571,351 person hours worked as at 30
June 2023 (224,364 for the financial year
ended 30 June 2023). During the financial
year, there were no reportable health and
safety incidents. The 12-month rolling Total
Recordable Injury Frequency Rate (TRIFR)
has remained steady at 0.89, while the Lost
Time Injury Frequency Rate (LTIFR) remains
at zero.
The Kayelekera mine continued to take a
pro-active approach in relation to incident/
accident prevention through implementation
of work permit system, Take-5 risk assessments
and daily safety toolbox talks.
Care and Maintenance Activities
The Company continues to critically review
activities and associated costs at the Project
site to ensure the site care and maintenance
programs and costs are optimised.
The primary focus for the ongoing activities
are the core requirements of:
1. Ensuring compliance with all regulatory
requirements;
2. Maintaining the equipment on site so as
to minimise restart costs;
3. Ensuring security of the assets at site; and
4. Management of water on site
to
control the discharge of water to the
environment, during the wet season,
in accordance with licence conditions
and world standards.
Government and Community Relations
Mine Development and Community
Development Agreements
is
securing a Mine
The Company
Development Agreement (MDA) that will
set the fiscal regime in which the Project will
operate and will include other provisions for
contractual protections as are customary
for such concession agreements. The key
items being finalised under the agreement
are critical to support the investment to
restart operations and the financial returns
for the Project.
12 Lotus Resources Annual Report 2023
Lotus continues to advance negotiations
with
the Government of Malawi with
various meetings in person and over video
conference.
A site visit to Kayelekera of Government
officials was hosted at the end of May who
expressed their support for the Kayelekera
in
Project. Further meetings were held
Lilongwe with
sub-
committee on Natural Resources and
Climate Change, the Mining and Finance
Ministers and the Attorney General.
the Parliamentary
During this trip the Lotus management team
was also able to meet with HRH Paramount
Chief Kyungu, the traditional authority in the
Karonga District of northern Malawi where
Kayelekera is located. Paramount Chief
Kyungu has been a strong advocate for the
restart of the mine and was able to update
the Government officials during their visit to
site on the community’s desire to see the
mine restart as soon as possible.
A benchmarking report was finalised by
the Government’s advisors to inform the
Government on the share of economic
benefits seen in other mining jurisdictions.
in person
Further meetings were held
between Lotus management and
the
Government in August to discuss the report
and the process to finalise the agreement.
As part of the updated Malawian Mines and
Minerals Act (2019), a company that has
a large-scale mining licence, such as the
Company holds for Kayelekera, is required
to enter into a Community Development
Agreement (CDA) with the local “qualified
communities” as defined in the Act. This
agreement provides for a minimum 0.45%
of the gross revenues generated from the
mine to be spent on projects or activities
selected by the qualified communities.
The objective of the CDA aligns with Lotus
Resources’ aim to achieve a balance
between economic, environmental and
social needs. The qualified communities and
Company have agreed terms with the CDA
awaiting ratification by the Government of
Malawi in accordance with the Mines and
Minerals Act (2019).
SUSTAINABILITY AND ESG
Lotus Vision
To be a responsible uranium producer, building strong local communities, a safe and
healthy work environment and making a positive contribution to a carbon free future.
Directors’ Report
Sustainability and ESG
At Lotus, we recognise that we are part
of a global community. As part of this
community, we are committed to operating
our business in a sustainable manner that
ensures our people are safe and well-
supported, local communities prosper and
the environment is well cared for so that it
future generations. Companies
benefits
can be courageous and innovative in their
approach to sustainability, and Lotus has
both the opportunity and the capacity to
be a key participant in this approach. We
are committed to continuously improving
the way we do business.
he mining sector remains a significant local
and international industry as global demand
for resources continues to improve living
standards and assist economic growth.
The industry is facing complex challenges,
such as volatile commodity prices, climate
change impacts, community acceptance,
environmental concerns and the need
for companies to show leadership and
stewardship of natural resources. However,
these challenges can also be opportunities,
and the industry is in a unique position to
respond. Nuclear energy in particular, has
a large role to play in the transition to a
low carbon future as the only sustainable
baseload power option with zero-carbon
emissions.
In November 2022, Lotus was very pleased
to release its second annual Sustainability
Report which
the
Company’s website. The 2023 Sustainability
Report
in
November 2023.
is expected to be released
is available
from
Lotus Resources Annual Report 2023 13
Directors’ Report
Sustainability Governance
Human rights and labour rights
Human rights recognise the inherent value
of each person and are based on principles
of dignity, equality and mutual respect,
which are shared across cultures, religions
and philosophies. Human rights are about
being treated fairly, treating others fairly and
having the ability to make genuine choices
in our daily lives.
for
the 2023
financial year, we
During
continued to update and improve our
governance systems by preparing and
updating management plans
the
recommencement of mining. This process
has involved evaluating the International
(ILO)
Labour Organisation Conventions
that have been ratified by the Malawi
Government and developing a roadmap to
align our management system with the ILO
requirements. This work will be continued in
the 2024 financial year.
Climate change
in
the Taskforce
It is widely anticipated that the Australian
Accounting Standards Board (AASB) will
use
for Climate-Related
Financial Disclosure (TCFD) framework as
the basis for upcoming mandatory climate
risk disclosures for Australian corporates. To
meet these requirements, the Company
initiated a process in 2022 to align with
TCFD by fulfilling the Governance disclosure
requirements
the 2022 Sustainability
Report and reporting on its Scope 1 & 2
Greenhouse Gas (GHG) emissions. During this
reporting period, the Company has further
advanced its TCFD work by undertaking a
climate risk assessment workshop with its
Kayelekera mine site employees and senior
management. The next stage of the TCFD
journey is to develop various scenarios and
undertake a detailed risk assessment against
these scenarios with the results incorporated
into the company wide risk management
systems.
Lotus
focuses on
Sustainability at
is governed
directly through the Board and the ESG
Sub-committee and
the
Company’s performance in the areas of
risk management, health, safety, radiation,
responsibilities and
environment,
sustainable development.
further
To
strengthen Lotus’ ESG performance and
to support the ESG Sub-committee, Lotus
engaged an ESG Manager in November
2022, who has the responsibility to lead the
Company’s Sustainability Strategy.
social
Sustainability Strategy
One of Lotus’ focus areas for this year has
been
improving our performance and
management systems for diversity, human
rights and labour rights, and climate change.
Diversity
the benefits arising
Lotus’ Diversity and
Inclusion Policy
from
recognises
employee and board diversity and highlights
our commitment to inclusion at all levels
of the organisation, regardless of gender,
marital or family status, sexual orientation,
gender identity, age, disabilities, ethnicity,
religious beliefs, cultural background, socio-
economic background, perspective and
experience.
In line with our Diversity and Inclusion Policy,
we have been focusing on gender equality
at all levels:
• Our
Board
has
18%
female
representation,
• Our management team is now 20%
female increasing from 0% in the 2022
financial year, and
• Our
full-time Kayelekera mine
site
employees now comprise 12% female.
We also are focused on prioritising the
employment of women for casual and
contractor roles at the Kayelekera mine site,
with the percentage of women contractors
employed during the 2023 financial year
increasing to 10%, and we will be continuing
to implement processes that support and
encourage women to join our workforce in
the 2024 financial year.
14 Lotus Resources Annual Report 2023
Directors’ Report
Community Engagement
to
The Company continues
support
local community and
the Kayelekera
surrounding towns by sponsoring teachers
at the local schools, providing power and
water to the Kayelekera Village Health
Centre, undertaking a mosquito spraying
programs at the local village to reduce
malaria in the community and providing
support to locals who were diagnosed with
cholera as well as providing seedlings to the
local villages to restore vegetation cover.
Lotus also supports local Malawian suppliers
and labour wherever possible.
Kayelekera Mine Site Performance
The main safety, health, environment and
radiation (SHER) activities undertaken during
the period were:
•
The Atomic Energy Regulatory Authority
(AERA) inspected Kayelekera during the
reporting period. Lotus also submitted an
application for the renewal to possess
and use radioactive sources to AERA.
• Firefighting
reviews of
training and
Emergency Response Plan and Safety
Management Plans with updates
to comply with current care and
maintenance activities.
• Regular review of the site risk register
and risk mitigation controls.
• Monthly inspections on camp hygiene,
process plant and tailings / water dams.
• Vector
control
programs were
conducted for rodent, termite and fly
control.
The following monitoring programs were also
undertaken during the reporting period:
• Radiation monitoring for positional dust
was conducted in multiple locations.
Radiometric and gravimetric analysis
was performed on
samples
the
the High-Volume Air
collected by
Samplers (HVAS) during the reporting
period. The radiometric and gravimetric
concentration on the samples analyzed
recommended
are well below
Occupational Exposure Limits (OELs).
the
• Radon
Decay
Products
(RDP)
four
sampling was conducted on
monitoring stations. Trends of the RDP
concentrations in all four locations were
dependent on the external weather
conditions with higher values see at the
onset of the dry season. However, all
mean concentrations for RDP sampling
remain very low compared to the DLI
(7.00µJm3).
• Scheduled inspections and prism survey
on the tailings storage facility (TSF)
embankments
including the Decant
Pond were completed for the reporting
period. No deviations were noted on the
TSF North Wall. The largest movements
were recorded on the southern edge of
the TSF and on the southern wail of the
Decant Pond. Movements were within
the norms expected for the areas.
• Prism ground movements monitoring
at the processing plant site depend on
the season with reductions in ground
movement intensity as the dry season
moves in and conversely increases in
the wet season. The largest ground
movements were mapped on slopes
to the west of the plant and at acid
plant stack. A comprehensive program
of work was detailed as part of the DFS
providing a strategy to manage this
issue prior to start-up.
Lotus Resources Annual Report 2023 15
Directors’ Report
Site water management continues with the water treatment
program being conducted over a period of twenty five days
discharging 286,806m³ treated water into the Sere River in
accordance with license conditions.
Water pond monitoring surveys were undertaken weekly
during the rainy season and monthly during the dry season.
Pond levels and volumes obtained at the end of June 2023
are given provided in the next table.
Water Storage Facility
June 2023
June 2022
Return Water Pond (RWP1)
Return Water Pond (RWP2)
Decant Pond
Seepage Pond
23.4%
67.8%
65.5%
65.1%
26.9%
60.7%
67.9%
19.5%
Tailings Storage Facility (mRSL)
798.116
798.425
The current number of persons employed by the Company
are shown in the table below. Permanent Staff turnover is
one, with one separation and no new appointments made
during the reporting period.
Employees
June 2023
June 2022
Permanent staff (Expat)
Permanent staff (National)
Contractors – FTE
Contractor Security
Third Party Contractors
2
16
15
20
3
2
17
18
20
3
Stakeholder consultation
is an ongoing activity with
communications focused on current activities onsite (e.g.
water treatment), temporary contract job opportunities,
future plans for the mine and discussions around community
development ideas as Lotus progresses the Community
Development Agreement.
16 Lotus Resources Annual Report 2023
16 Lotus Resources Annual Report 2023
Directors’ Report
RISK MANAGEMENT
Lotus is committed to the active management of the risks to its activities. Risk management plays a key role
in ensuring the Company achieves its goals. The Board is responsible for setting the “risk appetite” for the
Company and is responsible for establishing, overseeing and approving the Company’s risk management
framework, strategy and policies, internal compliance and internal control. The Board established an
Audit and Risk Sub-committee on 1 July 2022 to which it has delegated responsibility for implementing and
overseeing the risk management system. This Sub-Committee reports to the Board on its activities and the
Board reviews risk information each meeting in accordance with the risk management framework.
The Lotus Resources Risk Management Policy is the overarching document that provides the
foundation which supports the framework and processes for the integration of risk management into
the Company’s business activities. During the financial year Lotus implemented an organisational
framework for the management of risks which ensures that a formal and consistent process of risk
management is carried out. The objective of risk management is to explicitly and clearly manage risks
through sound management and continual review.
Key Business Risks
This section describes the key business risks
of Lotus Resources.
Uranium Prices and Market
The uranium market is sensitive to a range
of external economic and political factors
beyond the Company’s control which have
the potential to impact uranium demand
and pricing. These factors include global
uranium supply and demand trends, nuclear
and other
technology development,
political developments in uranium producing
and nuclear power generating countries,
unanticipated destabilising global events or
industry related events, general economic
conditions, currency exchange rates and
other factors.
Nuclear energy
in competition with
other sources of energy and is the subject
some
of negative public opinion by
is
parties due to political, technological and
environmental
the
potential to impact future uranium prices.
factors which have
The uranium mining industry is competitive
and there is no guarantee that a profitable
market may exist for the sale of uranium
produced from the Company’s assets.
Security of Tenure
All tenements in which the Group has
interests are subject to maintenance and
renewal conditions which may be subject
to discretion from the relevant regulatory
authority. There is a risk that the Group may
lose title to, or interests in, its tenements, or
that such tenements may be subjected to
additional conditions or obligations which
may require increased funding or that the
Group may not be able to comply with.
Lotus Resources Annual Report 2023 17
Directors’ Report
Mine Development Agreement
Lotus is in the process of negotiating a
Mine Development Agreement with the
Government of Malawi which will set out
the fiscal regime and certain other matters
for its operations in Malawi. The Agreement
is an important pre-curser to the restart
of operations at Kayelekera. There is no
guarantee that Lotus will be able to secure
an agreement in a reasonable time frame or
on terms that are supportive of the restart of
operations or that the agreement secured
may be on terms less favorable to Lotus
than modelled, impacting the value of the
Kayelekera Project and Lotus Shares.
Mineral Resources and Ore Reserves
level will be
The Mineral Resources and Ore Reserves
reported by Lotus are estimates only and no
assurance can be given that any particular
recovery
realised. Lotus’
estimates are prepared in accordance
with the JORC 2012 reporting standard but
represent expressions of judgment from
qualified professionals based on knowledge,
experience, industry practice and resource
modelling. Therefore, such estimates are
necessarily imprecise and depend to some
extent on interpretations, which may prove
to be inaccurate or require adjustment
or revision. Should the Group encounter
mineralisation of formations different to
those predicted by past drilling, sampling
and similar examinations, resource estimates
may have to be adjusted or
revised.
Adjustments or revisions could impact the
Group’s development and mining plans
and resultant production levels and unit
costs.
Due to the uncertainty which may attach
to inferred mineral resources there is no
assurance that inferred mineral resources will
be upgraded to measured and indicated
mineral resources or proven and probable
ore reserves.
Ore reserves rely on interpretations from
the mineral resource in addition to other
operating assumptions
including mining
and processing efficiencies, mining and
processing
recoveries and operating
costs. The basis of these assumptions may
change which may require revision to these
estimates and actual results may differ from
these assumptions.
18 Lotus Resources Annual Report 2023
Speculative Nature of Mineral Exploration
and Development
is
resources
The nature of exploration and development
of mineral
speculative
and by nature contained elements of
significant risk which even a combination
of experience, knowledge and careful
evaluation may not be able to adequately
mitigated. As such there is no guarantee
of
successful commercialisation which
depends upon factors such as the global
uranium market including demand and
price, the discovery and/or acquisition of
economically recoverable reserves, access
to experienced and skilled exploration and
operations personal, access to adequate
capital for project development, securing
and maintaining title to interests, obtaining
approvals
regulatory
and
necessary
for the conduct of mineral
exploration, development and production
and securing plant and equipment given
the high competition for such resources in
the current period of global exploration and
mining activity.
consents
There is no assurance that any exploration
of the current or future interest held by
the Group will result in the discovery of
economic uranium deposit. The Group is
performing future activities such as front-
end engineering and design which may
have different results to previous studies
including the 2022 Restart DFS.
Political Risks, Government Actions and
Foreign Jurisdictions
The Group’s foreign operations are exposed
to various levels of political, economic and
other risks and uncertainties associated with
operating in a foreign jurisdiction. These
risks and uncertainties vary from country
to country and include, but are not limited
to, currency exchange rates, high rates of
inflation, labour unrest, renegotiation or
nullification of existing concessions, licences,
permits and contracts, changes in taxation
policies, changes in local or Government
ownership
restrictions on
foreign exchange, changing political
conditions, currency controls, export controls
and governmental regulations that favour
or require the awarding of contracts to local
contractors or require foreign contractors
to employ citizens of, or purchase supplies
from, a particular jurisdiction.
requirements,
Directors’ Report
Political Risks, Government Actions and
Foreign Jurisdictions (continued)
foreign
remittance,
Changes, if any, in mining or investment
policies or shifts in political attitude may
adversely affect the Group’s operations or
profitability. Operations may be affected in
varying degrees by government regulations
with respect to, but not limited to, restrictions
on production, price controls, export
controls, currency
income
investment, maintenance
taxes,
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 right
applications and tenure could result in loss,
reduction or expropriation of entitlements.
The occurrence of these various factors adds
uncertainties which cannot be accurately
predicted and could have an adverse
effect on the operations of the Group.
Funding Risk
the
Exploration and development of
various properties
in which Lotus holds
interests depends on the Company’s ability
to obtain funding through joint ventures,
debt funding, equity financing or other
means. In addition, Lotus is required in the
ordinary course of business to provide
financial assurances (including insurances,
performance bond and bank guarantee
instruments)
statutory and
secure
environmental performance undertakings
and commercial arrangements. Lotus ability
to provide such assurances is subject to the
willingness of financial institutions and other
third-party providers of such assurances to
issue such assurances for the Companies
account.
to
Volatility in uranium markets, or the factors
affecting financial institutions and other third
parties assessments of the Company and its
prospects may make it difficult or impossible
for the Company to obtain facilities for the
issuance of such financial assurances or of
other debt financing or equity financing on
favorable terms or at all. Failure to obtain
such facilities or financing on a timely basis
may cause the Company to postpone its
development plans, forfeit rights in some or
all of its properties or reduce or terminate
some or all of its operations which may have
a material adverse effect on the Company’s
financial position and performance.
Offtake Risk
The future operations and revenues of Lotus
are dependent on the counterparties to
future offtake agreements performing their
obligations. If counterparties do not take
their obligated quantities of product or
seek to renegotiate the price or quantity of
product, Lotus revenues could be adversely
affected. The risk of non-performance or
attended re negotiation of terms by offtake
customers is enhanced by the prevailing
demand and pricing sensitivities currently
impacting the global market for uranium
products.
Reliance on Key Personnel
The Group’s prospects depend in part on
the ability of its executive officers, senior
to
management and key consultants
operate effectively, both
independently
and as a group. The loss of any of the
Group’s key personnel, the inability to recruit
necessary staff as needed or the increased
cost to recruit or retain the necessary staff,
may cause a disruption to the Group and
adversely impact the Group’s operations,
financial
financial performance and
position.
injuries,
Any disputes with employees (through
personal
industrial matters or
otherwise), changes in labour regulations
or other developments in the area may
cause labour disputes, work stoppages or
other disruptions in operations that could
adversely affect the Group.
Environmental Liabilities
Uranium exploration and mine development
is an environmentally hazardous activity
which may give rise to substantial costs
for environmental rehabilitation, damage
control and
The Company’s
operations may use hazardous materials
and produce hazardous waste, which may
have an adverse impact on the environment
or cause exposure to hazardous materials.
losses.
Lotus Resources Annual Report 2023 19
Directors’ Report
Environmental Liabilities (continued)
Health and Safety
production.
risk
Despite efforts to conduct its activities in
responsible manner
an environmentally
and in accordance with applicable laws,
the Group may be subject to potential
risks and
liabilities associated with the
potential pollution of the environment and
the necessary disposal of mining waste
products resulting from mineral exploration
Insurance
and
against
(including potential
environmental
liability for pollution or other hazards as a
result of the disposal of waste products
occurring from exploration and production)
is not generally available to the Group (or to
other companies in the minerals industry). To
the extent that the Group becomes subject
to environmental liabilities, the satisfaction
of any such liabilities would reduce funds
otherwise available to the Group and could
have a material adverse effect on the
Group. Laws and regulations intended to
ensure the protection of the environment
are constantly changing and are generally
becoming more restrictive.
Climate Change
Increased regulation of greenhouse gas
emissions could adversely affect
the
Group’s costs of operations. Mining and
processing of mineral resources is relatively
energy dependent and depends on fossil
fuels. Whilst Lotus has a strategy to minimise
the use of fossil fuels where practicable
(as explained in the Restart DFS) there is
no assurance that Lotus will be able to
implement this strategy or that it will provide
the expected benefits.
including the
Regulatory change by governments may
represent an increased cost to the Group.
Increasing regulation of greenhouse gas
emissions,
introduction of
carbon emissions trading or abatement
mechanisms, and tighter emission reduction
targets or the introduction of a carbon tax in
any jurisdiction the Group operates is likely to
raise energy costs and costs of production.
Further to this, the Group’s activities may be
impacted in the future by the effects of climate
change, including factors such as increased
or decreased rainfall, increased severity of
weather events, impacts on ground stability
and movement and impacts to planned
sources of water for operations. The effects of
these risks could materially adversely affect
the Group’s activities and performance.
20 Lotus Resources Annual Report 2023
restart operations
Lotus aspires to conduct its activities to
high standards of occupational health
and safety. Lotus has systems in place for
the management of risks appropriate for
its current level of activity which will be
updated as appropriate when the decision
to
is made. Despite
this, uranium exploration and mining
is inherently a high risk environment. In
addition, Lotus has interests in a developing
country, embedding systems for managing
occupational health and safety risks, and
maintaining and ensuring compliance with
these systems may present challenges for
the Group.
Operating in developing countries where
HIV/AIDS, ebola, malaria, cholera, COVID 19
and other diseases may represent a threat
to maintaining a skilled workforce. There
can be no assurances that such infections
will not affect project staff, and there is the
risk that operations could be affected in the
event of such a safety threat. Any failure to
comply with the necessary occupational
health and safety
requirements, could
result in a safety claim, fines, penalties and
compensation for damages against the
Group as well as reputational damage.
Community Acceptance and Reputation
jurisdictions
including
in which
in Malawi.
All industries, including the mining industry,
are subject to community actions in the
they are
various
recent
In
present
years, communities and non-governmental
organisations (NGOs) have become more
vocal and active with respect to mining
activities at, or near, their communities.
These parties may take actions, such as
road blockades, applications for injunctions
seeking work stoppage and lawsuits for
damages.
Additionally, the Group’s relationship with
the communities in which it operates is
important to ensure the future success of
existing operations and the construction
and development of its projects. While
Lotus believes the relationships it has with
the communities in which it will operate is
strong, there is an increasing level of public
concern relating to the perceived effect of
mining activities on the environment and on
communities impacted by such activities.
Directors’ Report
Community Acceptance and Reputation
(continued)
Reference to Previous ASX
Announcements
Certain NGOs, some of which oppose
globalisation and resource development,
are also often vocal critics of the mining
industry and its practices. Adverse publicity
generated by such NGOs or others related
to extractive
its
operations specifically, could have an
adverse effect on the Group’s reputation or
financial condition.
industries generally, or
General Economic Conditions
General economic conditions, movements
in interest and inflation rates and currency
exchange rates may have an adverse effect
on the Group’s exploration, development
and production activities, as well as on its
ability to fund those activities.
Further, share market conditions may affect
the value of the Lotus’ quoted securities
the Group’s operating
regardless of
performance. Share market conditions are
affected by many factors such as general
economic outlook, interest rates, inflation
rates, currency fluctuations, changes in
investor sentiment toward particular market
sectors, the demand for, and supply of,
capital and terrorism or other hostilities.
future
the
The Group’s
Group’s share price may be affected by
these factors, which are beyond the Group’s
control.
revenues and
Environmental Regulation
The Group’s exploration and mining activities
are governed by a range of environmental
legislation and regulations. As the Group is
still in the evaluation phase of its interests in
exploration projects, Lotus is not yet subject
to the public reporting requirements of
environmental legislation and regulations.
To the best of the directors’ knowledge, the
Group has adequate systems in place to
ensure compliance with the requirements
of the applicable environmental legislation
and is not aware of any breach of those
requirements during the financial year and
up to the date of the Directors’ Report.
The information in this announcement that
relates to the Mineral Resource Estimate
at Kayelekera was announced on 9 June
2022 and 15 February 2022. The Company
confirms that it is not aware of any new
information or data that materially affects the
information included in the announcements
of 9 June 2022 and 15 February 2022 and
that all material assumptions and technical
parameters underpinning
the Mineral
Resource Estimate in that announcement
continue to apply and have not materially
changed.
in
information
The
this announcement
that relates to the Ore Reserve Estimate at
Kayelekera was announced on 11 August
2022. The Company confirms that it is not
aware of any new information or data that
materially affects the information included
in the announcement dated 11 August
2022 and that all material assumptions and
technical parameters underpinning the Ore
Reserve Estimate in that announcement
continue to apply and have not materially
changed.
In relation to the exploration results included
in this announcement, the dates of which
are referenced, the Company confirms that
it is not aware of any new information or
data that materially affects the information
included in those announcements.
Lotus Resources Annual Report 2023 21
if
the Company’s property
interests;
to
industrial disputes,
uninsured hazards;
shortages, political and other
labour
factors; the inability to obtain additional
financing,
required, on commercially
suitable terms; reliance on key personnel
and the retention of key employees; the
impact of the Covid-19 pandemic on the
Company’s business and operations; and
global and regional economic conditions.
Readers are cautioned not to place undue
reliance on forward-looking statements. The
information concerning possible production
in this announcement is not intended to be
a forecast. They are internally generated
goals set by the board of directors of
Lotus Resource Limited. The ability of the
Company to achieve any targets will be
largely determined by the Company’s
funding,
ability
implement mining plans, resolve logistical
issues associated with mining and enter
into any necessary offtake arrangements
third parties. Although
with
Lotus Resource Limited believes that its
expectations reflected in these forward-
looking statements are reasonable, such
statements involve risks and uncertainties
and no assurance can be given that actual
results will be consistent with these forward-
looking statements.
secure adequate
reputable
to
Directors’ Report
Forward Looking Statements
This Directors Report
includes “forward-
looking statements” within the meaning of
securities laws of applicable jurisdictions.
Forward-looking statements involve known
and unknown risks, uncertainties and other
factors that are in some cases beyond
Lotus Resource Limited’s control. These
forward-looking statements
include, but
are not limited to, all statements other than
statements of historical facts contained
in this announcement, including, without
limitation, those regarding Lotus Resource
Limited’s future expectations. Readers can
statements by
identify
terminology such as “aim,” “anticipate,”
“assume,” “believe,” “continue,” “could,”
“estimate,” “expect,” “forecast,” “intend,”
“predict,”
“may,”
“project,” “risk,” “should,” “will” or “would”
and other
similar expressions. Risks,
uncertainties and other factors may cause
results,
Lotus Resource Limited’s actual
performance, production or achievements
to differ materially from those expressed or
implied by the forward-looking statements
(and from past results, performance or
achievements).
forward-looking
“potential,”
“plan,”
These factors include, but are not limited
to, the failure to complete and commission
the mine facilities, processing plant and
related infrastructure in the timeframe and
within estimated costs currently planned;
variations in global demand and price for
uranium; fluctuations in exchange rates
between the U.S. Dollar and the Australian
Dollar; uncertainty
in the estimation of
mineral resources and mineral reserves;
the failure of Lotus Resource Limited’s
suppliers, service providers and partners to
fulfil their obligations under construction,
supply and other agreements; the inherent
risks and dangers of mining exploration
and operations in general; environmental
risks; unforeseen geological, physical or
meteorological conditions, natural disasters
in government
or cyclones; changes
the
legislation;
regulations, policies or
inability to enter into a mine development
agreement with the Government of Malawi
on acceptable terms; foreign investment
in Malawi; breach of any of the
risks
contracts through which the Company holds
property rights; defects in or challenges
22 Lotus Resources Annual Report 2023
DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:
Mr Michael Bowen
Non-Executive Chairman – Since appointment 22 February 2021
Experience and expertise
Mr Bowen is a partner of the national law firm, Thomson
Geer Lawyers. He practices primarily corporate,
commercial and securities law with over 40 years of
experience and emphasis on mergers, acquisitions,
capital raisings and resources.
He was a Non-Executive Director of ASX listed company
Omni Bridgeway Limited (ASX: OBL), where he chaired
the remuneration committee and a member of the
audit and risk, corporate governance and nomination
committees. He is also a Non-Executive Director of ASX
listed companies Genesis Minerals Limited (ASX: GMD)
and Emerald Resources NL (ASX: EMR).
Mr Bowen holds a Bachelor of Laws, Jurisprudence and
Commerce from the University of Western Australia. He
has been admitted as a barrister and solicitor of the
Supreme Court of Western Australia since 1979 and is
also admitted as a solicitor of the High Court of Australia.
He is a Certified Public Accountant and member of the
Australian Society of Accountants.
Other current directorships
Genesis Minerals Limited (Non-Executive Director)
Emerald Resources NL (Non-Executive Director)
Former directorships in the last 3 years
Omni Bridgeway Limited (Non-Executive Director)
Special responsibilities
Board Chairman
Interests in shares and options
Ordinary shares
Unlisted Options
5,250,000
Nil
Lotus Resources Annual Report 2023 23
Directors’ Report
Mr Grant Davey
Non-Executive Director - Since appointment 22 June 2020
Experience and expertise
Mr Davey is an entrepreneur with 30 years of senior
management and operational experience
in the
development, construction and operation of precious
metals, base metals, uranium and bulk commodities
throughout the world.
More recently, he has been involved in venture
capital investments in several exploration and mining
projects and has been instrumental in the acquisition
and development of the Panda Hill niobium project in
Tanzania, the Cape Ray gold project in Newfoundland
and recently the acquisition of the Kayelekera Uranium
mine in Malawi from Paladin Energy Limited. He is
a member of the Australian Institute of Company
Directors (AICD).
Other current directorships
Cradle Resources Limited (Executive Director)
Frontier Energy Limited (Executive Chairman)
Former directorships in the last 3 years Waroona Energy Inc. (Non-Executive Director)
(TSXV: WHE)
Special responsibilities
Nil
Interests in shares and options
Ordinary shares
Unlisted Options
179,459,0311
Nil
1 Following shareholder approval on 20 July 2021, 226,463,927 shares were issued to Kayelekera Resources Pty Ltd, an entity related to non-
executive director Mr Grant Davey, in consideration for the Project interest acquired. The shares were subject to a 12-month escrow period
which expired on 16 August 2022. As advised to the ASX on 26 July 2021, the Company was made aware of a claim by a third party to a 22.5%
interest in the aforementioned shares issued. On 23 August 2023 50,954,438 were transferred to that third party with an appeal pending.
Mr Mark Hanlon
Non-Executive Director – Since appointment 22 February 2021
Experience and expertise
Other current directorships
Mr Hanlon has over 25 years of experience in the
resources and resource services sector, as well as in
commercial and merchant banking.
He has a broad background of senior executive
experience across a wide range of industries including
mining and mining services.
Red River Resources Limited (Non-Executive Director)
Waroona Energy Inc (Non-Executive Director; TSXV:
WHE)
Former directorships in the last 3 years
Copper Strike Limited (Non- Executive Chairman)
Special responsibilities
Chair of Audit and Risk Committee (from 1 July 2022)
Chair of Remuneration and Nomination Committee
(from 1 July 2022)
Interests in shares and options
Ordinary shares
Unlisted Options
6,500,000
Nil
24 Lotus Resources Annual Report 2023
Directors’ Report
Ms Dixie Marshall
Non-Executive Director – Since appointment 1 April 2022
Experience and expertise
Other current directorships
Ms Marshall has over 38 years’ experience in media,
advertising, government relations and communications.
She has worked across a range of platforms, including
television, radio, newspapers, and digital. Ms Marshall
has an advanced knowledge of data and digital
innovation as applied to communications, marketing
and policy development. She has won awards for
journalism, and more recently advertising.
Ms Marshall is currently the Chief Growth Officer
of Marketforce, WA’s oldest advertising agency,
and previously worked from the Western Australian
Government Premier’s Office for six years as the Director
of Strategic Communications giving a unique insight
into government policy.
Ms Marshall is the Deputy Chair of the WA Football
Commissioner, member of
the Australian Sports
Commission and a former Commissioner of Tourism.
Frontier Energy Limited (Non-Executive Director)
Marketforce (Chief Growth Officer)
WA Football Commission (Deputy Chair)
Member Australian Sports Commission
Former directorships in the last 3 years
Nil
Special responsibilities
Chair of Environment, Social and Governance
Committee (from 1 July 2022)
Interests in shares and options
Ordinary shares
Unlisted Options
Nil
2,000,000
Lotus Resources Annual Report 2023 25
Directors’ Report
Mr Keith Bowes
Managing Director – Since appointment 15 February 2021
Experience and expertise
Mr Bowes is a highly regarded mining executive
with over 20 years of experience working on project
development and operations in Africa, South America
and Australia across a range of commodities and
processes. He was previously the project manager for
the Panda Hill niobium project in Tanzania and the
Sovereign Metals graphite project in Malawi.
Mr Bowes project managed the Boss Resources’
redevelopment program for the Honeymoon Uranium
Mine including all study phases and commercial trials
of the new processing technology. As part of the study,
he led the development in the application of two new
technologies that have redefined the Honeymoon
opportunity (leach chemistry and IX resins).
Other current directorships
Copper Strike Limited (Non-Executive Director)
Former directorships in the last 3 years
Matador Mining Limited (Executive Director)
Special responsibilities
Managing Director
Interests in shares and options
Ordinary shares
Unlisted Options
4,000,0002
10,478,475
2 Mr Keith Bowes has a beneficial interest in 226,463,927 shares (in addition to the number reported above) by virtue of him holding an interest in
Kayelekera Resources Pty Ltd, an entity related to non-executive director Mr Grant Davey, and from which the Project interest was acquired.
26 Lotus Resources Annual Report 2023
Directors’ Report
COMPANY SECRETARY
Ms Catherine Anderson
Company Secretary – Appointed 12 January 2023
Experience and expertise
Ms Anderson is a legal practitioner admitted in Western
Australia and Victoria with over 30 years’ experience
in both high-level private practice and in-house roles,
particularly in the area of capital raisings, corporate
acquisitions, structuring and regulatory compliance. Ms
Anderson has advised on all aspects of corporate and
commercial law and brings extensive experience over
a range of industries, in particular the mining and IT/
cyber security sectors.
Ms Anderson is an experienced company secretary
for both listed and unlisted public companies and has
served as a director of an ASX listed junior explorer. She
has provided consultancy services to entities wishing to
proceed to IPO and ASX listing, and has twice been
nominated for the Telstra Business Woman of the Year
Award.
Other current directorships
Former directorships in the last 3 years
Special responsibilities
Interests in shares and options
Ordinary shares
Unlisted Options
Nil
Nil
Nil
Nil
Nil
Mr Brian Scott
Company Secretary – Resigned on 12 January 2023
Experience and expertise
Mr Scott has previously worked as a partner in a
leading global law firm specialising in M&A, project
development, commercial contracts and capital
raisings. Mr Scott holds an LLB (Honours), First Class,
from Edinburgh University and has been admitted to
practice in England & Wales.
Other current directorships
Former directorships in the last 3 years
Special responsibilities
Interests in shares and options
Ordinary shares
Unlisted Options
Nil
Nil
Nil
Nil
Nil
Lotus Resources Annual Report 2023 27
Directors’ Report
Directors’ Meetings
The number of directors’ meetings (including meetings of committees of directors) and the number
of meetings attended by each of the directors of the Company during the financial year are:
Board Meeting
Committee Meetings
Audit
and Risk
Environmental,
Social and
Governance
Nomination &
Remuneration
Director
Held
Attended
Held
Attended
Held
Attended
Held Attended
Mr Michael Bowen
Mr Mark Hanlon
Ms Dixie Marshall
Mr Keith Bowes
Mr Grant Davey
8
8
8
8
8
8
8
7
8
7
6
6
6
-
-
6
6
4
-
-
-
-
3
3
3
-
-
3
3
2
-
1
1
-
1
-
1
1
-
1
Committee membership
The Board has established sub-committees
for Audit and Risk, Nomination and
Remuneration,
Environmental,
and
Social and Governance. The Board sub-
committees were established effective 1
July 2022 in recognition of the increasing
complexity in the Company’s activities as
it progresses towards a restart of operations
at Kayelekera, and in recognition of the
increased size of the Lotus Resources Board
facilitating appropriate memberships for
each committee.
For further
Company’s
Statement.
information, please see the
Governance
Corporate
Principal Activity
The principal activity of the Group during the
year was the exploration and development
of the Group’s Kayelekera Uranium Project,
in Malawi.
Significant Changes in the State Of Affairs
There were no significant or material
changes to the Group’s state of affairs,
other than as disclosed below:
•
The Group
the Restart
released
Definitive Feasibility Study in relation
to the Kayelekera Uranium Project.
Refer to the Directors Report and ASX
announcements dated 11 August 2022.
28 Lotus Resources Annual Report 2023
the
finalising
• On 2 September 2022, the Company
completed an institutional placement
issuing 104,166,667 new shares to raise
$25,000,000 (before costs) to provide
funding to progress the development
of the Kayelekera Uranium Project,
including
Mine
Development Agreement, advancing
offtake negotiations, FEED and project
financing prior to a final investment
decision. The capital raise was the
source of funding for the final instalment
of the rehabilitation bond repayment
in March 2023 and will also fund the
care and maintenance activities at
Kayelekera and corporate costs for a
period of at least 18 months, for general
working capital purposes and to fund
the costs of the offer.
•
•
rehabilitation and closure cost
The
estimate for the Kayelekera Uranium
Mine was revised during the financial
year resulting in a decrease to the
the exploration and
provision and
evaluation asset. Refer to note 15 for
details.
scheduled
The
US$3,000,000
environmental bond repayment was
made during the financial year
in
addition to the issue of the $3,000,000
worth of deferred consideration shares
to the vendor on the third anniversary of
the acquisition of the Kayelekera mine.
Refer to note 29 for details.
Directors’ Report
Results
The Group incurred a loss after income tax
and non-controlling interest of $9,916,736 for
the financial year (2022: loss after income tax
and non-controlling interest of $11,996,177).
As at 30 June 2023, the net current assets
and net assets of the Group amounted
to $16,353,637
(2022: $3,332,947, net
current liabilities) and $33,684,890 (2022:
$14,774,219), respectively.
Likely Developments and Expected Results
of Operations
In the opinion of the Directors, there is nothing
material further to report, except as outlined
in the Directors’ Report, which relates to
likely developments in the operations of the
Group and the expected results of those
operations in financial year subsequent to
30 June 2023.
Matters Subsequent to the end of the
Financial Year
On 13 July 2023 Lotus announced a merger
by way of Scheme of Arrangement with
ASX listed A-Cap Energy Limited (A-Cap)
under which Lotus will acquire 100% of the
A-Cap shares on issue. Refer to the Review
of Activities for more details.
On 20 September 2023 8,500,000 unlisted
options were exercised at an average
exercise price of $0.04 per option for gross
proceeds of $350,000 before costs, resulting
in the issue of the same number of Lotus
ordinary shares.
There was no other matter or circumstance
has arisen since 30 June 2023 that has
significantly affected, or may significantly
affect the Group’s operations, the results
of those operations, or the Group’s state of
affairs in future financial years.
Lotus Resources Annual Report 2023 29
ANNUAL STATEMENT OF ORE RESERVES AND MINERAL RESOURCES
Mineral Resources Governance
Lotus Resources reviews its Mineral Resource
and Ore Reserve
(where applicable)
estimates on an annual basis. The Annual
Statement of Mineral Resources and Ore
Reserves is prepared in accordance with
the JORC Code 2012 and the ASX Listing
Rules.
the
Competent Persons named by
Company are members of the Australian
Institute of Mining and Metallurgy and/or
the Australian Institute of Geoscientists and
qualify as Competent Persons as defined
under the JORC Code 2012.
The Company engages external consultants
and Competent Persons to prepare and
calculate estimates of its Mineral Resources
and Ore Reserves. These estimates and
underlying assumptions are
reviewed
by the Directors and management for
reasonableness and accuracy. The results
of the Mineral Resource and Ore Reserve
estimates are then reported in accordance
with the JORC Code 2012 and the ASX
Listing Rules. Where material changes occur
to a project during the period, including
the project’s size, title, exploration results
or other technical information, previous
resource estimates and market disclosures
are
The
Company reviews its Mineral Resources
for completeness.
reviewed
and Ore Reserves as at 30 June each
year and where a material change has
occurred in the assumptions or data used
in previously reported Mineral Resources
and Ore Reserves, a revised estimate will
be prepared as part of the annual review
process. There was no update to the Mineral
Resources and Ore Reserves required as at
30 June 2023.
Mineral Resources Estimate
to
The information in this document that relates
to Mineral Resources for Kayelekera at the
project was reported by the Company
in announcements
the ASX dated
15 February 2022 and 9 June 2022. The
Company confirms that it is not aware of
any new information or data that materially
affects the information included in the
original market announcements, and in
the case of estimates of Mineral Resources,
that all material assumptions and technical
the estimates
parameters underpinning
in the
relevant market announcement
continue to apply and have not materially
changed. The Company confirms that the
form and context in which the Competent
Person’s findings are presented have not
been materially modified from the original
market announcement.
30 Lotus Resources Annual Report 2023
Directors’ Report
Table 2 - Lotus Mineral Resource Inventory – June 20238
Project
Category
Kayelekera
Measured
Kayelekera
Measured – RoM Stockpile9
Kayelekera
Indicated
Kayelekera
Inferred
Kayelekera
Total
Kayelekera
Inferred – LG Stockpiles10
Kayelekera
Total All Materials
Livingstonia
Inferred
Total
Ore Reserves
The Ore Reserve estimate has been
developed using the 9 June 2022 Mineral
Resource Estimate
for Kayelekera only
(i.e. excluding the Livingstonia Resource
Estimate) and is based on the optimised mine
plan and production schedule prepared as
part of the Restart Definitive Feasibility Study
reported in ASX announcements dated 11
August 2022 and referred to in the Directors
Report.
The Company confirms that it is not aware
information or data that
of any new
Mt
0.9
1.6
29.3
8.3
40.1
2.4
42.5
6.9
49.4
Grade
(U3O8 ppm)
830
760
510
410
510
290
500
320
475
U3O8
(M kg)
U3O8
(M lbs)
0.7
1.2
15.1
3.4
20.4
0.7
21.1
2.2
23.3
1.6
2.6
33.2
7.4
44.8
1.5
46.3
4.8
51.1
materially affects the information included
in the original market announcements, and
in the case of estimates of Ore Reserves,
that all material assumptions and technical
parameters underpinning
the estimates
relevant market announcement
in the
continue to apply and have not materially
changed. The Company confirms that the
form and context in which the Competent
Person’s findings are presented have not
been materially modified from the original
market announcement.
Table 3 - Lotus Resources Ore Reserve Inventory – June 202311
Project
Category
Kayelekera
Open Pit - Proved
Kayelekera
Open Pit - Probable
Kayelekera
RoM Stockpile – Proved
Kayelekera
Total - Kayelekera
Mt
0.6
13.7
1.6
15.9
Grade
(U3O8 ppm)
902
637
760
660
U3O8
(M kg)
U3O8
(M lbs)
0.5
8.7
1.2
10.4
1.2
19.2
2.6
23.0
8 See ASX announcements dated 15 February 2022 and 9 June 2022 for information on the Kayelekera Project and Livingstonia Deposit
Mineral Resource Estimates. Lotus confirms that it is not aware of any new information or data that materially affects the information included
in the announcements of 15 February 2022 and 9 June 2022 and that all material assumptions and technical parameters underpinning the
Mineral Resource Estimate in that announcement continue to apply and have not materially.
The Kayelekera Project Mineral Resource Estimates are reported inclusive of the Kayelekera Project Ore Reserve Estimates Mineral Resources
are based on a 100% ownership basis of which Lotus has an 85% interest.
9 RoM stockpile has been mined and is located near the mill facility.
10 Low-grade stockpiles have been mined and placed on the medium-grade stockpile and are considered potentially feasible for blending
or beneficiation, with studies planned to further assess this optionality.
11 Ore Reserves are reported based on a dry basis. Proved Ore Reserves are inclusive of RoM stockpiles and are based on a 200ppm
cut-off grade for arkose and a 390ppm cut-off grade for mudstone. Ore Reserves are based on a 100% ownership basis of which Lotus has
an 85% interest. Lotus confirms that it is not aware of any new information or data that materially affects the information included in the
announcement of 11 August 2022 and that all material assumptions and technical parameters underpinning the Ore Reserve Estimate in that
announcement continue to apply and have not materially changed.
Lotus Resources Annual Report 2023 31
Directors’ Report
Shares and Options on Issue
At the date of this report, the Company has 1,352,482,044 (2022: 1,326,008,228) fully paid ordinary
shares on issue.
The following options over ordinary shares in the Company were on issue at the date of this report:
Unlisted Options - Number
Issue Date
Expiry Date
Exercise Price
2,500,000
2,000,000
6,000,000
1,230,000
550,800
11,050
1,319,000
2,000,000
2,697,857
3,823,073
250,000
250,000
23 October 2020
23 October 2023
26 August 2021
26 August 2021
1 January 2024
10 February 2024
29 November 2021
29 July 2026
29 November 2021
29 July 2024
14 December 2021
14 December 2024
14 December 2021
14 December 2026
1 April 2022
31 March 2025
14 November 2022
31 October 2025
14 November 2022
31 October 2027
14 November 2022
5 January 2025
14 November 2022
5 January 2026
$0.08
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
22,631,780
Total Unlisted Options
their position as Directors and Executives of
the Company, except where the liability
arises out of conduct involving a lack of
good faith or gross misconduct.
The agreement stipulates that the Company
will meet to the maximum extent permitted
by law the full amount of any such liabilities,
including costs and expenses.
Indemnification of Auditor
indemnify
To the extent permitted by law, Lotus
Resources has agreed to
its
auditor, RSM Australia Partners (RSM), as
part of the terms of its audit engagement
agreement against claims by third parties
arising from the audit (for an unspecified
amount). The Directors have not provided
RSM with any indemnities. No payment has
been made to indemnify RSM during or
since the end of the financial year.
The number of shares that were issued
during the year on the conversion of options
was 20,063,211
(2022: 23,382,434). The
weighted average exercise price of these
options was 2.40 cents (2022: 3.47 cents).
A further 8,500,000 options were exercised
post balance date at an average exercise
price of $0.04 per share.
There were 4,568,188 options that expired or
were cancelled during the year and none
since the end of the year. There were no
options that lapsed unexercised during the
year.
Dividends
No dividends were paid to members during
the financial year and the Directors do not
recommend the payment of a dividend.
Indemnification of Officers and Auditors
Indemnification of Officers
The Company has agreed to indemnify
the current Directors and Executives of the
Company against all liabilities to another
person (other than the Company or a
related body corporate) that may arise from
32 Lotus Resources Annual Report 2023
Directors’ Report
Insurance Premiums
Remuneration Report
insuring
insurance policy,
The Company paid a premium during the
year in respect of a Director and Officer
liability
the
Directors and Officers of the Company
against a liability incurred as such a Director
or Officer to the extent permitted by the
Corporations Act 2001. The Directors have
not included details of the nature of the
liabilities covered in respect of the Directors’
and Officers’ liability and legal expenses’
insurance contracts, as such disclosure is
prohibited under the terms of the contract.
Proceedings on Behalf of the Company
No person has applied to the Court under
section 237 of the Corporations Act 2001
for leave to bring proceedings on behalf
of the Company, or to intervene in any
proceedings to which the Company is a
party, for the purpose of taking responsibility
on behalf of the Company for all or part of
those proceedings. No proceedings have
been brought or intervened in on behalf of
the Company with leave of the Court under
section 237 of the Corporations Act 2001.
Non-Audit Services
Details of amounts paid or payable to the
Company’s auditor, RSM Australia Partners,
for audit and non-audit services provided
during the year are set out in note 23.
The Remuneration Report set out on pages
34 to 42 forms part of the Directors’ Report
and is signed as part of it.
Auditor’s Independence Declaration
The auditor’s independence declaration
as required under Section 307C of the
Corporations Act 2001 is set out immediately
after this Directors’ Report.
Auditor
RSM Australia Partners continues in office
in accordance with Section 327 of the
Corporations Act 2001.
This report is made in accordance with a
resolution of directors, pursuant to section
298(2)(a) of the Corporations Act 2001.
Signed in accordance with a resolution of
the directors:
Mr Michael Bowen
Non-Executive Chairman
22 September 2023
The Board is satisfied that the provision of
the non-audit services is compatible with
the general standard of independence
for auditors imposed by the Corporations
Act 2001. The directors are satisfied that
the provision of non-audit services by the
auditor did not compromise the auditor
independence
the
Corporations Act 2001 for the following
reasons:
requirements
of
a. all non-audit
services have been
reviewed by the Board to ensure they
do not impact the impartiality and
objectivity of the auditor; and
b. none of the services undermine the
general principles relating to auditor
independence as set out
in APES
110 Code of Ethics for Professional
Accountants.
Lotus Resources Annual Report 2023 33
AUDITED REMUNERATION REPORT
This Remuneration Report outlines the director and executive remuneration arrangements of the Group
in accordance with the requirements of the Corporations Act 2001 (the Act) and its Regulations. This
information has been audited as required by Section 308 (3C) of the Act.
For the purposes of this report, key management personnel (KMP) of the Group are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities of
the Company, directly or indirectly, including any director (whether executive or otherwise) of the Group.
Key Management Personnel
The following were key management personnel of the Group at any time during the financial year
and unless otherwise indicated were key management personnel for the entire financial year:
Name
Position held
Mr Michael Bowen
Non-Executive Chairman
Mr Keith Bowes
Mr Grant Davey
Mr Mark Hanlon
Ms Dixie Marshall
Mr Michael Ball
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer
Nomination & Remuneration Committee
The Board of Directors of the Company are responsible for determining and reviewing remuneration
policies for the directors and executives. Effective 1 July 2022, the Board established a Nomination
and Remuneration Committee in recognition of the increasing complexity in the Company’s activities
as it progresses towards a restart of operations at Kayelekera, and in recognition of the increased
size of the Lotus Resources Board facilitating appropriate memberships for sub-committees.
The Committee regularly assessess remuneration in light of market conditions and peer companies.
The Committee also seeks independent advice as required on the appropriateness of remuneration
packages given trends in comparable companies and in accordance with the objectives of the
Group. No such advice was obtained during the year.
Further information on the committee’s role, responsibilities and membership in relation to
remuneration and composition is set out in the Corporate Governance Statement.
34 Lotus Resources Annual Report 2023
Audited Remuneration Report
Principles of Remuneration
The remuneration structures explained below are competitively set to attract and retain suitably
qualified and experienced candidates, reward the achievement of strategic objectives and
achieve the broader outcome of creation of value for shareholders. The remuneration structure
takes into account:
•
the capability and experience of the key management personnel;
•
the key management personnel’s ability to control the achievement of strategic objectives; and
•
the Group’s performance including:
•
•
the growth in share price; and
the amount of incentives within each key management person’s compensation.
Given the evaluation and developmental nature of the Group’s principal activity, the overall level
of compensation does not have regard to the earnings of the Group.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive directors’
remuneration is clearly distinguished from that of executives.
The executive remuneration framework has three components:
•
Total Fixed Remuneration (TFR);
• Short-Term Incentives (STI); and
• Long Term Incentives (LTI).
Employment and Consultancy Agreements
The Company has entered into employment or contractual agreements with its executives. The
employment agreements outline the components of remuneration paid to the executives and are
reviewed on an annual basis.
Total Fixed Remuneration
Total Fixed Remuneration (TFR) consists of base compensation (which is calculated on a total cost
basis and excludes any fringe benefits charges related to employee benefits) as well as employer
contributions to superannuation funds.
TFR is reviewed annually (or as required) through a process that considers individual and overall
performance of the Group. As noted above, the Nomination and Remuneration Committee has
access to external advice independent of management.
Lotus Resources Annual Report 2023 35
Audited Remuneration Report
Executive Remuneration
Remuneration for executives is set out in employment agreements. Details of these employment
agreements are provided below. Executives do not receive any retirement benefits, other than
statutory superannuation.
Component
Managing Director – Keith Bowes (Appointed 15 February 2021)
Fixed remuneration
$400,000 Inclusive of superannuation effective 1 April 2022
Contract duration
No fixed term
Termination
Statutory entitlements will be paid as required by law. Three months
written notice.
Other benefits
Equity incentives
If there is a material diminution in the Executives position within the
Company, the Executive is entitled to payment in lieu of twelve
months’ notice in addition to statutory entitlements and any
unvested incentives will vest immediately in full.
A car park and mobile phone is provided in addition to statutory
leave provisions.
The Executive is eligible to receive an Equity Incentive Award at
the Board’s discretion and subject to the Executive’s performance
against agreed KPI’s for the relevant performance-based period.
In the event of a change of control event, all unvested equity
incentives will immediately vest in full.
Component
Chief Financial Officer – Michael Ball (Appointed 5 January 2022)
Fixed remuneration
$275,000 Inclusive of superannuation
Contract duration
No fixed term
Termination
Statutory entitlements will be paid as required by law. Three months
written notice.
Other benefits
Equity incentives
If there is a material diminution in the Executives position within the
Company, the Executive is entitled to payment in lieu of twelve
months’ notice in addition to statutory entitlements, subject to
the limits imposed under the Corporations Act, and any unvested
incentives will vest immediately in full.
A car park and mobile phone is provided in addition to statutory
leave provisions.
The Executive is eligible to receive 250,000 zero exercise price
options which vest upon completion of 12 months service period
and a further 250,000 zero exercise price options which vest upon
completion of 24 months service period.
The Executive is eligible to receive an Equity Incentive Award at
the Board’s discretion and subject to the Executive’s performance
against agreed KPI’s for the relevant performance-based period.
In the event of a change of control event, all unvested equity
incentives will immediately vest in full.
36 Lotus Resources Annual Report 2023
Audited Remuneration Report
Non-Executive Director Remuneration
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive
directors shall be determined from time to time by a general meeting. Total remuneration for all non-
executive directors, last voted upon by shareholders at the 2007 General Meeting, is not to exceed
$500,000 per year. Directors’ fees cover all main board activities and membership of committees.
Non-executive directors do not receive any retirement benefits, other than statutory superannuation
which is included in the Base Fees set out below.
Non-executive director fees are reviewed annually by the Board taking into account comparable
roles and market data. There were no options issued to non-executive directors during the financial
year. Fees for the financial year are as follows:
Name
Base Fees (Annual)
Term of Agreement
Notice Period
Mr Michael Bowen
Mr Grant Davey
Mr Mark Hanlon
Ms Dixie Marshall
$75,000
$50,000
$50,000
$50,000
No fixed term
No fixed term
No fixed term
No fixed term
Statutory
Statutory
Statutory
Statutory
Non-Executive Directors have no entitlement to termination payments in the event of removal for
misconduct or gross negligence.
Lotus Resources Annual Report 2023 37
Audited Remuneration Report
Short-Term and Long-Term Incentives
The Group adopted an Incentive Option Plan (the Option Plan) which was approved by shareholders
at the 2022 Annual General Meeting. The Group considers performance-based remuneration to be
a critical component of the overall remuneration framework, by providing remuneration structure
that rewards employees for achieving goals that are aligned to the Group’s strategy and objectives
and seek to generate long term shareholder value.
The company may utilise both short-term and long-term incentive programs to balance the short-
and long-term aspects of business performance, to reflect market practice, to attract and retain
key talent and to ensure a strong alignment between the incentive arrangements of executives and
the creation and delivery of shareholder return.
Both short term incentives and long-term incentives were issued under the Option Plan in the 2023
financial year.
The following table contains details of the options granted to the Managing Director, Executives and
Senior Management under the Option Plan during the financial year where the vesting criteria did
not contain any market conditions.
Options
Number
Grant date
Expiry date
Exercise
Price
Spot Price
at Grant
Date
Dividend
Yield
Risk-free
Interest
Rate
Fair Value
at Grant
Date
1,767,624
14/11/2022
31/10/2025
$0.00 each
$0.240
250,000
14/11/2022
05/01/2025
$0.00 each
$0.240
250,000
14/11/2022
05/01/2026
$0.00 each
$0.240
1,109,676
14/11/2022
31/10/2027
$0.00 each
$0.240
930,233
883,721
25/11/2022
31/10/2025
$0.00 each
$0.205
25/11/2022
31/10/2027
$0.00 each
$0.205
Nil
Nil
Nil
Nil
Nil
Nil
3.18%
3.18%
3.18%
3.18%
3.18%
3.18%
$0.240
$0.240
$0.240
$0.240
$0.205
$0.205
The pre-determined performance conditions relating to the above options include the following:
•
safety performance conditions;
• a service condition;
• conditions related to financial performance against budget;
• project performance conditions relating to the Mine Development Agreement and offtake
contracting;
• a resource growth target; and
• performance against environmental, social and governance targets.
The table below sets out details of the options granted during the period under the Option Plan that
had market based vesting criteria related to performance against a peer group. A Monte-Carlo
simulation was performed to estimate the fair value.
Options
Number
Grant date
Expiry date
Exercise
Price
Spot Price
at Grant
Date
Dividend
Yield
Risk-free
Interest
Rate
Fair Value
at Grant
Date
1,109,676
14/11/2022
31/10/2027
$0.00 each
$0.240
883,721
25/11/2022
31/10/2027
$0.00 each
$0.205
Nil
Nil
3.18%
3.18%
$0.188
$0.164
38 Lotus Resources Annual Report 2023
Audited Remuneration Report
Short-term incentives
The Managing Director, Key Management Personnel and other employees have the opportunity to
earn an annual Short-Term Incentive (STI) if predefined targets are achieved. Zero exercise priced
options were issued as part of the STI for the financial year 2023. Vesting for the options is contingent
upon meeting pre-determined measurable financial and non-financial performance targets over
the twelve-month performance period ended 30 June 2023. A service vesting condition must also
be met. Performance and the associated number of options to vest will be assessed by the Board
after the completion of the statutory audit.
Employees at Lotus (Africa) Limited can be rewarded under the short-term incentive by cash
payment instead of options.
The STI awards for the executive team in the 2023 financial year were based on the scorecard
measures and weighting as disclosed below. Targets were approved by the Nomination and
Remuneration Committee through a rigorous process to align the Company’s strategic and business
objectives.
The Committee has the discretion to adjust short term incentives downwards in light of unexpected
or unintended circumstances.
Long-Term Incentives
The Long-Term Incentive (LTI) is designed to focus executives on delivering long-term shareholder
returns. Eligibility for the plan is restricted to executives and nominated senior management, being
the employees who are most able to influence shareholder value. eligible participants have the
opportunity to earn an LTI if predefined targets are achieved over the three-year performance
vesting period. The LTI targets comprise a combination of total shareholder return and milestone
based targets
Zero exercise priced options were issued as part of the LTI for the financial year 2023. Vesting for the
options is contingent upon pre-determined measurable financial and non-financial performance
indicators over a three-year performance period ending 30 June 2025. A service vesting condition
must also be met. Performance and the associated number of options to vest will be assessed by
the Board after the completion of the statutory audit for the financial year ending 30 June 2025.
As the first tranche of LTI’s were issued in the 2022 financial year, no LTI’s vested during the financial
year.
Claw Back Policy For Incentives
Under the terms and conditions of the Company’s incentive plan offer and option plan rules, the
Board (or Nomination and Remuneration Committee as its delegate) has discretion to determine
forfeiture of unvested equity awards in certain circumstances (e.g. unlawful, fraudulent or dishonest
behaviour or a serious breach of obligations to the Company). All incentives offers and final outcomes
are subject to the full discretion of the Board (or Nomination and Remuneration Committee as its
delegate).
Lotus Resources Annual Report 2023 39
Audited Remuneration Report
Remuneration of Key Management Personnel
Details of the nature and amount of the remuneration of the key management personnel of the
Group are:
SHORT-TERM
POST-
EMPLOY-
MENT
SHARE-
BASED
PAYMENTS
Salary &
fees
$
Non-
Monetary
$
Cash
Bonus
S
Superan-
nuation
$
Options
$
Total
$
Non-Executive Directors
Mr M Bowen
2023
67,873
2022
68,182
Mr Grant Davey
2023
50,000
Mr M Hanlon
Ms D Marshall
2022
2023
2022
2023
2022
50,000
45,249
45,455
45,249
11,364
-
-
-
-
-
-
-
-
Executive Director
Mr K Bowes
2023
372,500
8,422
-
-
-
-
-
-
-
-
-
7,127
75,083
150,083
6,818
434,917
509,917
-
-
4,751
4,545
4,751
1,136
50,055
100,055
289,944
339,944
50,055
100,055
289,944
339,944
492,883
542,883
121,533
134,033
27,500
406,272
814,694
2022
265,000
3,438 48,700
-
841,989
1,159,127
Fixed
Remu-
nera-
tion
%
Perfor-
mance
Based
Remu-
neration
%
50%
15%
50%
15%
50%
15%
9%
9%
50%
23%
50%
85%
50%
85%
50%
85%
91%
91%
50%
77%
Other KMP
Mr M Ball*
2023
248,724
2022
123,016
8,422
3,438
Total KMP
2023
829,595
16,844
-
-
-
26,276
181,105
464,527
61%
39%
12,302
-
138,756
100%
70,405
1,255,453
2,172,297
-
58%
77%
42%
23%
2022
563,017
6,876 48,700
24,801
1,978,327
2,621,721
*Michael Ball joined on 5 January 2022 and the share-based payments for 2023 included joining options valued at $92,884.
Use of Remuneration Consultants
During the year, the Group did not use any remuneration consultants.
Options Holdings of Key Management Personnel
Held at
1 July
2022
Held at the
date of
appoint-
ment
Granted
as com-
pensation Exercised
Other
changes
Held at
date of
resigna-
tion
Held at
30 June
2023
Vested
during
the
year
2023
Mr Michael Bowen 3,000,000
Mr Keith Bowes
9,628,000
Mr Grant Davey
2,000,000
Mr Mark Hanlon
2,000,000
Ms Dixie Marshall
2,000,000
Mr Michael Ball
-
-
-
-
-
-
-
-
(3,000,000)
-
-
-
2,697,675 (1,750,000)
(97,200)
- 10,478,475
-
-
-
1,779,070
(2,000,000)
(2,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
1,779,070
-
-
-
-
-
-
40 Lotus Resources Annual Report 2023
Audited Remuneration Report
Shareholdings of Key Management Personnel
Held at
1 July 2022
Held at the
date of
appointment
Acquired
at market
value
Received
on
exercise
of options Disposal
Other
Changes
2023
Mr Michael Bowen
2,250,000
Mr Keith Bowes2
2,250,000
Mr Grant Davey1
177,459,031
Mr Mark Hanlon
4,500,000
Ms Dixie Marshall
Mr Michael Ball
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
1,750,000
2,000,000
2,000,000
-
-
-
-
-
-
-
-
Held at
30 June
2023
5,250,000
4,000,000
179,459,031
6,500,000
-
-
-
-
-
-
-
-
1 Following shareholder approval on 30 July 2021, 226,463,927 shares were issued to Kayelekera Resources Pty Ltd, an entity related to non-
executive director Grant Davey, in consideration for the Project interest acquired. These shares were subject to a 12-month escrow period
which expired on 16 August 2022. As advised to the ASX on 26 July 2021, the Company was made aware of a claim by a third party to a 22.5%
interest in the aforementioned shares issued. On 23 August 2023 50,954,438 were transferred to that third party with an appeal pending.
2 Mr Keith Bowes has a beneficial interest in 226,463,927 shares (in addition to the number reported above) by virtue of him holding an interest
in Kayelekera Resources Pty Ltd, an entity related to non-executive director Mr Grant Davey, and from which the Project interest was acquired .
Other key management personnel transactions with the Group
Mr Michael Bowen, who is a Non-Executive Director of the Company is a Partner of national law
firm Thompson Geer Lawyers (Thomson Geer). The Company used Thompson Geer for general legal
services and also transactional support. The services provided by Thompson Geer were done so at
an arm’s length basis and on normal commercial terms. During the year, the Company incurred
costs under this arrangement totalling $140,052 (2022: $28,734). There is a balance of $107,965 (2022:
$4,056) owing to Thompson Geer as at 30 June 2023 in relation to the provision of services.
Mr Grant Davey, who is a Non-Executive Director of the Company is a Director and shareholder
of Matador Capital Pty Ltd (Matador Capital). The Company made payments to Matador Capital
under a Shared Services Agreement in which Matador Capital provides office space, general office
services, bookkeeping services, company secretarial services, ESG consulting services, corporate
development and investor relation services and technical exploration and geological staff to the
Company at cost plus 5%. During the year, the Company incurred costs under this arrangement
totalling $635,589 (2022: $290,064). These services provided by Matador Capital were done so at
an arm’s length basis and on normal commercial terms. In addition to Mr Davey’s Director fees
payment of $50,000 (2022: $50,000) as disclosed in the remuneration table above, he is paid a
consulting fee of $100,000 (2022: $100,000) in relation to government liaison and in country services.
There is a balance of $62,895 (2022: $75,347) owing to Matador Capital as at 30 June 2023 in relation
to the provision of services.
There were no other related party transactions with key management personnel during the year.
Lotus Resources Annual Report 2023 41
Audited Remuneration Report
Additional Information
The Company aims to align Executive remuneration to the Company’s strategic and business
objectives and 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,
as the Group is in a development phase these are not necessarily consistent with the specific
measures in determining the variable amounts of remuneration to be awarded to Key Management
Personnel. As a consequence, there may not always be a direct correlation between the statutory
key performance measures and the variable remuneration rewarded.
EBITDA
EBIT
2023
$
2022
$
2021
$
2020
$
2019
$
(8,125,934)
(11,857,196)
(5,872,822)
(16,487,057)
(813,199)
(8,128,157)
(11,858,413)
(5,897,844)
(16,550,494)
(821,364)
Loss after income tax
(9,916,736)
(11,996,177)
(5,897,844)
(16,569,943)
(821,364)
The factors that are considered to affect total shareholders return are summarised below:
2023
$
2022
$
2021
$
2020
$
2019
$
Share price
18.5 cents
21.5 cents
19.0 cents
7.0 cents
4.5 cents
Total dividends declared
0.00 cents
0.00 cents
0.00 cents
0.00 cents
0.00 cents
Basic loss per share
0.76 cents
1.03 cents
0.72 cents
4.58 cents
0.82 cents
[This is the end of the audited remuneration report.]
42 Lotus Resources Annual Report 2023
Auditor’s Independence Declaration
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Lotus Resources Limited for the year ended 30 June 2023,
I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 22 September 2023
ALASDAIR WHYTE
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Lotus Resources Annual Report 2023 43
Corporate Governance Statement
Lotus Resources and the Board are committed to achieving and demonstrating the highest standards
of corporate governance. Lotus Resources has reviewed its corporate governance practices
against the Corporate Governance Principles and Recommendations (4th edition) published by
the ASX Corporate Governance Council.
The 2023 corporate governance statement is dated as at 30 June 2023 and reflects the corporate
governance practices in place throughout the 2023 financial year. The 2023 corporate governance
statement was approved by the Board on 22 September 2023. A description of the Group’s current
corporate governance practices is set out in the Group’s corporate governance statement which
can be viewed on the Company’s website at www.lotusresources.com.au/corporate-governance/.
44 Lotus Resources Annual Report 2023
44 Lotus Resources Annual Report 2023
Annual Financial Statements
Contents
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditors’ Report
ASX Additional Information
46
47
48
50
51
82
83
87
Lotus Resources Annual Report 2023 45
Statement of Profit or Loss and
Other Comprehensive Income
For the year ended June 30 2023
Other gains – net
Corporate and administrative expenses
Care and maintenance costs
Exploration and evaluation expenses
Finance costs – accretion interest
Finance costs - other
Impairment charges
Depreciation charges
Share-based payments expense
Loss before income tax
Income tax expense
Loss after income tax
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Foreign exchange differences on translating for-
eign operations
Total other comprehensive income
Note
3
4(a)
4(b)
10
15
9
9
22
5
Consolidated
2023
$
Consolidated
2022
$
1,195,764
2,580,303
(2,888,286)
(2,680,259)
(3,573,338)
(3,542,955)
(1,064,041)
(4,695,630)
(1,428,869)
-
(148,572)
(137,764)
(522,578)
(1,242,547)
(2,223)
(1,217)
(1,917,251)
(3,242,821)
(10,349,394)
(12,962,890)
(211,138)
-
(10,560,532)
(12,962,890)
418,082
1,076,551
418,082
1,076,551
Total comprehensive loss for the year
(10,142,450)
(11,886,339)
Loss attributable to:
Non-controlling interests
Members of the parent
Total comprehensive loss attributable to:
Non-controlling interests
Members of the parent
(643,796)
(966,713)
(9,916,736)
(11,996,177)
(10,560,532)
(12,962,890)
(643,517)
(995,866)
(9,498,933)
(10,890,473)
(10,142,450)
(11,886,339)
Loss per share
Basic and diluted loss per share (cents)
26
(0.76)
(1.03)
The statement of profit or loss and other comprehensive income is to be read in conjunction with the
accompanying notes.
46 Lotus Resources Annual Report 2023
Statement of Financial Position
as at 30 June 2023
Current Assets
Cash and cash equivalents
Other current assets
Inventories
Total Current Assets
Non-Current Assets
Plant and equipment
Exploration and evaluation assets
Other financial assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provisions
Other liabilities
Total Current Liabilities
Non-Current Liabilities
Provisions
Note
Consolidated
2023
$
Consolidated
2022
$
6
7
8
9
10
11
12
13
14
15,519,217
4,876,370
1,169,556
492,560
887,955
6,846
17,181,333
5,771,171
3,797
4,230
39,532,314
46,279,048
15,053,100
14,552,735
54,589,211
60,836,013
71,770,544
66,607,184
811,449
16,247
1,746,244
6,731
-
7,351,143
827,696
9,104,118
15
37,257,958
42,728,847
Total Non-Current Liabilities
37,257,958
42,728,847
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Accumulated losses
Equity attributable to owners of the Company
Non-controlling interest
Total Equity
38,085,654
51,832,965
33,684,890
14,774,219
16
17
18
17
143,537,936
114,923,546
(31,577,701)
(30,991,816)
(76,866,298)
(68,391,981)
35,093,937
15,539,749
(1,409,047)
(765,530)
33,684,890
14,774,219
The above statement of financial position should be read in conjunction with the accompanying
notes.
Lotus Resources Annual Report 2023 47
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Lotus Resources Annual Report 2023 49
Statement of Cash Flows
For the year ended June 30 2023
Cash flows from operating activities
Other income received
Interest received
Payments to suppliers and employees
Payments for care and maintenance
Finance costs paid
Income tax paid
Note
Consolidated
2023
$
Consolidated
2022
$
102,472
934,579
249,008
37,606
(3,337,438)
(6,225,038)
(5,731,906)
(3,887,106)
(148,573)
(137,764)
(161,944)
-
Net cash used in operating activities
27
(8,342,810)
(9,963,294)
Cash flows from investing activities
Proceeds from disposals of tenements
Purchases of plant and equipment
-
2,196,001
(524,641)
(1,047,065)
Payment of environmental bond
14
(4,518,392)
(2,707,123)
Other financial assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Proceeds from the exercise of options
Net cash from financing activities
-
(44,826)
(5,043,033)
(1,603,013)
25,000,000
174,500
(1,346,174)
-
482,044
898,869
24,135,870
1,073,369
Net increase/(decrease) in cash and cash equivalents
10,750,027
(10,492,938)
Cash and cash equivalents at the beginning of the
financial year
Effect of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at the end of the year
6
6
4,876,370
14,751,569
(107,180)
617,739
15,519,217
4,876,370
The above statement of cash flows should be read in conjunction with the accompanying notes.
50 Lotus Resources Annual Report 2023
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
This financial report includes the consolidated financial statements and notes of Lotus Resources
Limited and controlled entities (consolidated entity or the Group). The separate financial statements
and notes of Lotus Resources Limited as an individual parent entity (Company or Lotus Resources)
have not been presented within this financial report as permitted by the Corporations Act 2001.
Supplementary information about the parent entity is disclosed in note 31.
The financial report was authorised for issue on 22 September 2023 by the Directors of the Company.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (AASB) that are mandatory for the current
reporting period. The adoption of these Accounting Standards and Interpretations has not resulted
in a significant or material change to the Group’s accounting policies.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended
but are not yet mandatory have not been early adopted by the Consolidated Entity for the annual
reporting period ended 30 June 2023. The Consolidated Entity has not yet assessed the impact of
these new or amended Accounting Standards and Interpretations.
Basis of Preparation
The consolidated financial statements are a general-purpose financial report that has been prepared
in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other
authoritative pronouncements of the Australian Accounting Standards Board (“AASB”) and the
Corporations Act 2001.
Compliance with Australian Accounting Standards ensures that the financial statements and notes
also comply with International Financial Reporting Standards. The principal accounting policies
adopted in the preparation of the financial report are set out either in the respective notes or below.
They have been consistently applied unless otherwise stated.
The financial report covers Lotus Resources and its subsidiaries and has been prepared in Australian
dollars. Lotus Resources is a listed public company, incorporated and domiciled in Australia.
Historical cost convention
The financial report has been prepared under the historical cost convention, except as otherwise
disclosed below or on the respective notes.
Critical accounting estimates
The preparation of the financial report requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the consolidated
entity’s accounting policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial statements, are disclosed in
note 19.
Lotus Resources Annual Report 2023 51
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates
continuity of normal business activities and the realisation of assets and discharge of liabilities in the
normal course of business.
As disclosed in the financial statements, the consolidated entity incurred a net loss after income tax
of $10,560,532 (2022: $12,962,890) and had net cash outflows from operating activities and investing
activities of $8,342,810 (2022: $9,963,294) and $5,043,033 (2022: $1,603,013) respectively for the year
ended 30 June 2023. As at that date the consolidated entity had net current assets of $16,353,637
(2022: $3,332,947, net current liabilities).
The consolidated entity has sufficient cash reserves to meets its expected outflows for a period of at
least 12 months from the date of signing of this report, however it is expected that additional capital
will be required in the future for the consolidated entity to meet its objectives. Lotus Resources has
demonstrated that it has the ability to raise capital when required to further its objectives and the
Directors are confident that it will be able to raise capital when required. Therefore, the Directors
believe that it is reasonably foreseeable that the consolidated entity will continue as a going concern
and that it is appropriate to adopt the going concern basis in the preparation of the financial report.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Lotus
Resources as at 30 June 2023 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Company has control. The Company controls an
entity when they are 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 to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Company.
They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in
the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with the policies adopted by the
consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A
change in ownership interest, without the loss of control, is accounted for as an equity transaction,
where the difference between the consideration transferred and the book value of the share of the
non-controlling interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement
of profit or loss and other comprehensive income, statement of financial position and statement of
changes in equity. Losses incurred by the consolidated entity are attributed to the non-controlling
interest in full, even if that results in a deficit balance.
Where the Company loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation
differences recognised in equity. The Company recognises the fair value of the consideration
received and the fair value of any investment retained together with any gain or loss in profit or loss.
52 Lotus Resources Annual Report 2023
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is classified as current when it is either expected to be realised or intended to be sold or
consumed in the consolidated entity’s normal operating cycle, it is held primarily for the purpose of
trading, it is expected to be realised within 12 months after the reporting period, or the asset is cash
or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12
months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when it is either expected to be settled in the consolidated entity’s
normal operating cycle, it is held primarily for the purpose of trading, it is due to be settled within
12 months after the reporting period, or there is no unconditional right to defer the settlement of
the liability for at least 12 months after the reporting period. All other liabilities are classified as non-
current.
Deferred tax assets and liabilities are always classified as non-current.
Foreign currency
Functional and presentation currency
Both the functional and presentation currency of the parent entity and the Group is Australian
Dollars ($), with the exception of Lotus (Africa) Limited whose functional currency is United States
Dollars (US$).
Foreign currency transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying
the exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at financial year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange
rates at the reporting date. The revenues and expenses of foreign operations are translated into
Australian dollars using the average exchange rates, which approximate the rates at the dates of
the transactions, for the period. All resulting foreign exchange differences are recognised in other
comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment
is disposed of.
Lotus Resources Annual Report 2023 53
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit
or loss. Such assets are subsequently measured at either amortised cost or fair value depending
on their classification. Classification is determined based on both the business model within which
such assets are held and the contractual cash flow characteristics of the financial asset unless, an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation of recovering part or all of a financial asset,
its’ carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive
income are classified as financial assets at fair value through profit or loss. Typically, such financial
assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the
short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial
recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which
the consolidated entity intends to hold for the foreseeable future and has irrevocably elected to
classify them as such upon initial recognition.
The consolidated entity’s financial assets during the financial year comprised other receivables and
a security deposit.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets
which are either measured at amortised cost or fair value through other comprehensive income.
The measurement of the loss allowance depends upon the consolidated entity’s assessment at
the end of each reporting period as to whether the financial instrument’s credit risk has increased
significantly since initial recognition, based on reasonable and supportable information that is
available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition,
a 12-month expected credit loss allowance is estimated. This represents a portion of the asset’s
lifetime expected credit losses that is attributable to a default event that is possible within the next
12 months. Where a financial asset has become credit impaired or where it is determined that credit
risk has increased significantly, the loss allowance is based on the asset’s lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability
weighted present value of anticipated cash shortfalls over the life of the instrument discounted at
the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance
is recognised within other comprehensive income. In all other cases, the loss allowance is recognised
in profit or loss.
54 Lotus Resources Annual Report 2023
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Derecognition of financial assets
The consolidated entity derecognises a financial assets when the contractual rights to the cash
flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in
a transaction in which either:
•
substantially all of the risks and rewards of ownership of the financial asset are transferred; or
•
the consolidated entity neither transfers nor retains substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset.
Goods and Services Tax (and other similar taxes)
Revenues, expenses and assets are recognised net of the amount of goods and services tax
(GST), except where the amount of GST incurred is not recoverable from the tax authority. In these
circumstances 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 are stated with the amount of GST included. The net amount of GST
recoverable from, or payable to, the tax authority is included as a current asset or liability in the
statement of financial position. Cash flows are included in the statement of cash flows on a gross
basis. The GST components of cash flows arising from investing and financing activities which are
recoverable from, or payable to, the tax authority are classified as operating cash flows. Commitments
and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of
whether equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred,
equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and
the amount of any non-controlling interest in the acquiree. For each business combination, the non-
controlling interest in the acquiree is measured at either fair value or at the proportionate share of
the acquiree’s identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and
liabilities assumed for appropriate classification and designation in accordance with the contractual
terms, economic conditions, the consolidated entity’s operating or accounting policies and other
pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its
previously held equity interest in the acquiree at the acquisition-date fair value and the difference
between the fair value and the previous carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair
value. Subsequent changes in the fair value of the contingent consideration classified as an asset or
liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured
and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and
any non-controlling interest in the acquiree and the fair value of the consideration transferred
and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the
consideration transferred and the pre-existing fair value is less than the fair value of the identifiable
net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a
gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment
of the identification and measurement of the net assets acquired, the non-controlling interest in the
acquiree, if any, the consideration transferred and the acquirer’s previously held equity interest in
the acquirer.
Lotus Resources Annual Report 2023 55
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively
adjusts the provisional amounts recognised and also recognises additional assets or liabilities during
the measurement period, based on new information obtained about the facts and circumstances
that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12
months from the date of the acquisition or (ii) when the acquirer receives all the information possible
to determine fair value.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The
value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-
tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that
do not have independent cash flows are grouped together to form a cash-generating unit.
2.
SEGMENT REPORTING
An operating segment is a component of an entity that engages in business activities from which
it may earn revenues and incur expenses, whose operating results are regularly reviewed by the
consolidated entity’s chief operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance and for which discrete financial information is
available. Management will also consider other factors in determining operating segments such as
the level of segment information presented to the Board of Directors.
Operating segments have been identified based on the information provided to the chief operating
decision makers – being the Board of Directors.
During the financial year, the consolidated entity operated in two business segments and one
geographical location, being the exploration, evaluation and development of Uranium assets in
Africa. In the previous financial year, the consolidated entity operations relating to the exploration
and evaluation of Other Minerals in Australia were sold.
Operating
Loss
$
Total
Assets
$
Total
Liabilities
$
(4,291,973)
55,713,692
(37,300,374)
(6,268,559)
16,056,852
(785,280)
(10,560,532)
71,770,544
(38,085,654)
Operating
Profit/(Loss)
$
Total
Assets
$
Total
Liabilities
$
(9,250,229)
61,309,485
(50,221,699)
2,375,763
-
-
(6,088,424)
5,297,699
(1,611,266)
(12,962,890)
66,607,184
(51,832,965)
Consolidated
30 June 2023
Uranium
Corporate
Consolidated
30 June 2022
Uranium
Other Minerals
Corporate
56 Lotus Resources Annual Report 2023
Notes to the Financial Statements
3.
OTHER GAINS - NET
Finance income - interest
Gain on disposals of tenements
Other losses
Other income (including foreign currency gains)
Consolidated
2023
$
Consolidated
2022
$
1,093,292
-
-
102,472
37,606
2,375,763
(229,970)
396,904
1,195,764
2,580,303
During the year ended 30 June 2022, the Company sold 100% of its non-core Hylea Project for
consideration of $1,000,000 cash payment plus shares in ASX listed company Sunrise Energy Metals
Limited at fair value on receipt of $1,375,763. The disposal resulted in a gain on disposal of $2,375,763.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the
relevant period using the effective interest rate, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset to the net carrying amount of
the financial asset.
Foreign currency gain or loss on financial assets and financial liabilities
Finance costs attributable to qualifying assets are capitalised as part of the asset (e.g. interest on
borrowings). All other finance gains or losses are realised when earned or expensed in the period in
which they are incurred, respectively. These are mainly foreign currency gains or losses on financial
assets and financial liabilities.
4.
EXPENSES
(a) Corporate and administrative expenses
Director fees and salaries, including superannuation expense
Accounting and company secretarial fees
Legal fees
Other administrative costs
(b) Care and maintenance costs
Processing costs
Engineering fees
Site services costs
Safety, health, environment and radiation
Maintenance costs
Security fees
Administration, corporate and expatriate expenditures
Consolidated
2023
$
Consolidated
2022
$
1,120,574
141,363
23,997
1,602,352
2,888,286
299,596
1,079,480
1,044,028
745,138
130,718
274,378
-
736,518
273,460
181,809
1,488,472
2,680,259
383,052
1,370,373
142,533
267,810
147,182
293,250
938,755
3,573,338
3,542,955
Lotus Resources Annual Report 2023 57
Notes to the Financial Statements
5.
TAXATION
Consolidated
2023
$
Consolidated
2022
$
The prima facie tax on loss before income tax is reconciled to
the income tax expense as follows:
Income tax expense – withholding tax expense on interest payments
211,138
-
Income tax expense comprises amounts withheld from interest payments under Malawian tax
law. These amounts are able to be recouped against assessable company income tax. Given the
uncertainty around the timing of the generation of assessable income tax with the Kayelekera
Uranium Project currently on care and maintenance, these amounts have been de-recognised for
accounting purposes.
The income tax expense or benefit for the period is the tax payable on that period’s taxable income
based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred
tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected
to be applied when the assets are recovered or liabilities are settled, based on those tax rates that
are enacted or substantively enacted, except for:
• when the deferred income tax asset or liability arises from the initial recognition of goodwill or an
asset or liability in a transaction that is not a business combination and that, at the time of the
transaction, affects neither the accounting nor taxable profits; or
• when the taxable temporary difference is associated with interests in subsidiaries, associates
or joint ventures, and the timing of the reversal can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only
if it is probable that future taxable amounts will be available to utilise those temporary differences
and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each
reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable
that future taxable profits will be available for the carrying amount to be recovered. Previously
unrecognised deferred tax assets are recognised to the extent that it is probable that there are
future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset
current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities;
and they relate to the same taxable authority on either the same taxable entity or different taxable
entities which intend to settle simultaneously.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit
or loss.
58 Lotus Resources Annual Report 2023
Notes to the Financial Statements
5.
TAXATION (continued)
Lotus Resources Limited (the ‘head entity’) and its wholly owned Australian subsidiaries have formed
an income tax consolidated group under the tax consolidation regime. The head entity and each
subsidiary in the tax consolidated group continue to account for their own current and deferred tax
amounts. The tax consolidated group has applied the ‘separate taxpayer within group’ approach
in determining the appropriate amount of taxes to allocate to members of the tax consolidated
group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current
tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax
credits assumed from each subsidiary in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts receivable from or payable to other entities in the tax consolidated group.
The tax funding arrangement ensures that the intercompany charge equals the current tax liability
or benefit of each tax consolidated group member, resulting in neither a contribution by the head
entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
At 30 June 2023, the Group had significant unused tax losses relating to the operating losses incurred
under Malawian tax law by subsidiary Lotus (Africa) Limited, the owner of the Kayelekera Uranium
Mine. The availability of the losses for utilisation to offset against future taxable incomes is subject to
negotiation with the Malawian Government under the Mine Development Agreement. The Group
also has tax losses relating to the Australian tax consolidation group.
No deferred tax assets have been recognised with respect to these losses because the Directors do
not believe it is appropriate to recognise the deferred tax asset at this point in time. This benefit will
only be obtained if:
•
•
the Group expects to derive future assessable income of a nature and of an amount sufficient
to enable the benefits from the deduction for the losses to be realised;
the Group continues to comply with the conditions for deductibility imposed by tax legislation;
and
• no changes in tax legislation adversely affect the company in realising the benefit from the
deduction for the losses.
6.
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Term deposits
Consolidated
2023
$
Consolidated
2022
$
1,019,215
4,876,370
14,500,002
-
15,519,217
4,876,370
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions,
other short-term, highly liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value.
Lotus Resources Annual Report 2023 59
Notes to the Financial Statements
7.
OTHER CURRENT ASSETS
Prepayments
GST receivables
Security deposit
Other receivables
Consolidated
2023
$
Consolidated
2022
$
538,529
403,456
74,826
152,745
1,169,556
418,559
288,377
74,826
106,193
887,955
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for expected credit losses. Trade receivables
are generally due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses,
which uses a lifetime expected loss allowance. To measure the expected credit losses, trade
receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
The Group’s exposure to credit risk related to other receivables is disclosed in note 20.
Allowance for expected credit losses
The Group did not recognise any losses (2022: Nil) in profit or loss in respect of the expected credit
losses for the year ended 30 June 2023.
8.
INVENTORIES
Spare parts, supplies and consumables
Consolidated
2023
$
Consolidated
2022
$
492,560
6,846
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is
based on the weighted average cost method. During the financial year, inventories amounting to
$15,664 (2022: $11,031) was recognized as an expense and included in the care and maintenances
costs in the statement of profit or loss and other comprehensive income. There are no items which
are identified as obsolete during the financial year.
60 Lotus Resources Annual Report 2023
Notes to the Financial Statements
9.
PLANT AND EQUIPMENT
Furniture
and Fixtures
$
Mine Plant
and
Equipment
$
Motor
Vehicles
$
Total
$
At 30 June 2023 (Consolidated)
Cost
86,708
1,691,926
113,140
1,891,774
Accumulated depreciation and impairment
(82,911)
(1,691,926)
(113,140)
(1,887,977)
Net carrying amount
Year ended 30 June 2023 (Consolidated)
At 1 July 2022, net of accumulated depreciation
Additions
Depreciation charge for the year
Impairment charge for the year
3,797
4,230
1,790
(2,223)
-
-
522,578
-
-
(522,578)
At 30 June 2023, net of accumulated depreciation
3,797
-
-
-
-
-
-
-
3,797
4,230
524,368
(2,223)
(522,578)
3,797
At 30 June 2022 (Consolidated)
Cost
84,918
1,169,348
113,140
1,367,406
Accumulated depreciation and impairment
(80,688)
(1,169,348)
(113,140)
(1,363,176)
Net carrying amount
Year ended 30 June 2022 (Consolidated)
At 1 July 2021, net of accumulated depreciation
Additions
Depreciation charge for the year
Impairment charge of the year
4,230
1,409
4,038
(1,217)
-
-
-
-
4,230
1,409
1,155,407
87,140
1,246,585
-
-
(1,217)
-
(1,155,407)
(87,140)
(1,242,547)
At 30 June 2022, net of accumulated depreciation
4,230
-
-
4,230
Recognition and measurement
Items of plant and equipment are measured at cost less accumulated depreciation and impairment
losses. Cost includes expenditures that are directly attributable to the acquisition of the asset.
Subsequent costs
The cost of replacing part of an item of plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits embodied within the part will flow to
the Group and its cost can be measured reliably. The costs of day-to-day servicing of plant and
equipment are recognised in profit or loss as incurred.
Depreciation
Items of plant and equipment are depreciated using the straight line method over their estimated
useful lives of each part of an item of plant and equipment. The useful lives for each class of asset
for the current period are as follows:
• Motor vehicles
• Furniture and fixtures
5 years
3–5 years
• Mine plant and equipment
9 years
Depreciation method, useful lives and residual values are reassessed at the reporting date.
Lotus Resources Annual Report 2023 61
Notes to the Financial Statements
9.
PLANT AND EQUIPMENT (continued)
Derecognition
An item of plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss.
As outlined in note 29, the Company acquired the Kayelekera Uranium Project in the financial year
ended 30 June 2020. As part of the acquisition, the Company acquired a significant amount of
mine-related infrastructure, property, plant and equipment. Given the mine is currently in care and
maintenance, these assets have been assessed to have a nil fair value. Capital expenditures made
whilst the mine is on care and maintenance are immediately impaired in full.
10.
EXPLORATION AND EVALUATION ASSETS
Consolidated
2023
$
Consolidated
2022
$
Exploration and evaluation expenditure carried forward in respect of
areas of interest (net of amounts written off)
39,532,314
46,279,048
Reconciliation
Carrying amount at the beginning of the year
46,279,048
59,798,200
Assets acquired
Exploration and evaluation expenditures
Provision for impairment
Change in estimates provision for rehabilitation and closure costs
(note 15)
Movement in exchange rates
Carrying amount at the end of the year
-
33,843
1,064,041
4,695,630
(1,064,041)
(4,695,630)
(8,537,051)
(18,455,993)
1,790,317
4,902,998
39,532,314
46,279,048
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. 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.
The Kayelekera Uranium Project is under care and maintenance, hence any new exploration and
evaluation expenditures are being impaired and charged to profit or loss.
62 Lotus Resources Annual Report 2023
Notes to the Financial Statements
11.
OTHER FINANCIAL ASSET
Security deposit
Consolidated
2023
$
Consolidated
2022
$
15,053,100
14,552,735
Security deposits consist of a collateral deposit in the form of a bond issued for rehabilitation
obligations of the Kayelekera Uranium Project in Malawi in the amount of US$10,000,000 (30 June
2022: US$10,000,000). The security for environmental protection, rehabilitation and closure costs has
been provided in the form required by the relevant Malawian authorities. The bond was transferred
to the Company as part of the Kayelekera Uranium Project acquisition in 2020.
12.
TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Consolidated
2023
$
Consolidated
2022
$
107,273
704,176
811,449
495,263
1,250,981
1,746,244
These amounts represent liabilities for goods and services provided to the consolidated entity prior
to the end of the financial year and which are unpaid. Due to their short-term nature they are
measured at amortised cost and are not discounted. The amounts are unsecured and are usually
paid within 30 days of recognition.
The Group’s exposure to liquidity risk related to trade and other payables are disclosed in note 20.
13.
PROVISIONS – CURRENT
Annual leave provision
Provisions
Consolidated
2023
$
Consolidated
2022
$
16,247
6,731
Provisions are recognised when the consolidated entity has a present (legal or constructive)
obligation as a result of a past event, it is probable the consolidated entity will be required to settle
the obligation, and a reliable estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the
obligation. If the time value of money is material, provisions are discounted using a current pre-
tax rate specific to the liability. The increase in the provision resulting from the passage of time is
recognised as a finance cost.
Lotus Resources Annual Report 2023 63
Notes to the Financial Statements
13.
PROVISIONS – CURRENT (continued)
Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised
for the amount expected to be paid if the Company has a present legal or constructive obligation
to pay this amount as a result of past service provided by the employee and the obligation can be
estimated reliably.
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service
leave expected to be settled wholly within 12 months of the reporting date are measured at the
amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of
the reporting date are measured at the present value of expected future payments to be made in
respect of services provided by employees up to the reporting date using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on corporate bonds with terms to maturity and currency that match, as closely
as possible, the estimated future cash outflows.
Defined contribution superannuation expense
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution plans are recognised as part of
corporate and administrative expenses in profit or loss in the periods during which related services
are rendered by employees.
14.
OTHER LIABILITIES
Environmental bond – current
Deferred consideration – current
Total current
Environmental bonds
Opening balance – 1 July
Repayment of environmental bond
Reclassification of non-current liability to current
Foreign currency movement
Closing balance – 30 June
Consolidated
2023
$
Consolidated
2022
$
-
-
-
4,351,143
3,000,000
7,351,143
Current
Non-current
4,351,143
2,671,220
(4,351,143)
(2,740,916)
-
167,249
-
4,006,832
414,007
4,351,143
Deferred consideration of $3,000,000 was settled in March 2023 through issuance of 12,987,013
ordinary shares in Lotus Resources Limited in accordance with the terms of the sale and purchase
agreement.
During the financial year, the final instalment for US$3,000,000 of the reimbursement of the
US$10,000,000 which had previously been advanced by Paladin to Lotus (Africa) Limited to fund
the environmental bond in favour of the Government of Malawi (Environmental Bond) was settled
in March 2023. The repayment schedule was set out in note 29.
64 Lotus Resources Annual Report 2023
Notes to the Financial Statements
15.
PROVISIONS – NON-CURRENT
Rehabilitation and closure provision
37,257,958
42,728,847
Consolidated
2023
$
Consolidated
2022
$
Reconciliation – Non-current provisions
Opening balance – 1 July
Decrease in provision for closure cost
Accretion of interest
Foreign currency movements
Closing balance – 30 June
42,728,847
56,201,656
(8,537,051)
(18,455,993)
1,428,869
-
1,637,293
37,257,958
4,983,184
42,728,847
The Group has obligations to dismantle and remove certain items of property, plant and equipment
and to restore and rehabilitate the land on which they sit. Provisions are recognised when the
consolidated entity has a present (legal or constructive) obligation as a result of a past event, it is
probable the consolidated entity will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.
A provision is raised for the estimated cost of settling the rehabilitation and restoration obligations
existing at reporting date, discounted to present value using an appropriate pre-tax discount rate.
Where the obligation is related to an item of property, plant and equipment, its cost includes the
present value of the estimated costs of dismantling and removing the asset and restoring the site
on which it is located. Costs that relate to obligations arising from waste created by the production
process are recognised as production costs in the period in which they arise.
The provisions are reassessed at least annually. A change In any of the assumptions used to determine
the provisions could have a material impact on the carrying value of the provision.
As part of the work performed for the Kayelekera Restart Definitive Feasibility Study (DFS), a new
closure cost estimate was prepared. The cost estimate was prepared by expert consultants
considering the closure and rehabilitation costs of the Kayelekera mine using the base case mine
design and mine plan detailed in the DFS, and management’s estimate of the likely timing of
the expenditures. Costs were inflated using long-term inflation rates applicable to the expected
currency denomination that the outflows are expected to be influenced by. The future value was
then discounted to present value using the long-term risk-free rate that best matched the currency
and timing of the expected outflows.
The resulting adjustment to the provision was adjusted against the related exploration and evaluation
asset.
The Company also has in place a cash backed environmental performance bond of $15,053,100
(2022: $14,552,735) or US$10,000,000 as outlined in note 11. The bond is restricted cash to cover
closure and rehabilitation costs of the project. The bond is the minimum amount required to be
maintained in accordance with the terms of the Mine Development Agreement for the Kayelekera
Uranium Project and relevant local regulations.
Lotus Resources Annual Report 2023 65
Notes to the Financial Statements
16.
CONTRIBUTED EQUITY
Fully paid ordinary shares
Consolidated
2023
$
Consolidated
2022
$
143,537,936
114,923,546
2023
Number of
Shares
2022
Number of
Shares
2023
$
2022
$
Movements during the year:
Opening balance
1,206,765,153
954,718,792 114,923,546
78,142,783
Issue of shares – capital raising
104,166,667
1,900,000
25,000,000
174,500
Issue of shares to consultant
Exercise of options
Issue of shares to employees upon
exercise of options
-
300,000
-
90,000
12,050,861
19,846,721
482,044
898,869
8,012,350
3,535,713
1,478,520
515,485
Transaction with minority interest (note 29)
12,987,013
226,463,927
3,000,000
35,101,909
Share issue costs
Closing balance
-
-
(1,346,174)
-
1,343,982,044
1,206,765,153 143,537,936
114,923,546
Ordinary shares are classified as equity. Ordinary shares entitle the holder to participate in dividends
and the proceeds from winding up of the Company in proportion to the number and amounts paid
on the shares held.
On a show of hands every holder of ordinary securities present at a shareholder meeting in person
or by proxy is, entitled to one vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised
capital.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new
shares or options for the acquisition of a business are not included in the cost of the acquisition as
part of the purchase consideration.
66 Lotus Resources Annual Report 2023
Notes to the Financial Statements
17. RESERVES AND NON-CONTROLLING INTEREST
Share-based payment reserve
Capital reserve
Option premium reserve
Foreign exchange reserve
Movement in reserves
Share based payment reserve
Opening balance
Share-based payment expense
Transferred to share capital
Transferred to retained losses
Closing balance
Capital reserve
Opening balance
Shares issued to non-controlling interest
Closing balance
Option premium reserve
Opening balance
Reclassification to retained earnings
Closing balance
Foreign exchange reserve
Opening balance
Exchange rate differences on translating foreign operations
Closing balance
Non-controlling interest
Opening balance
Loss after income tax and other comprehensive loss
Shares issued to non-controlling interest
Closing balance
Movement in options:
Opening balance
Granted
Exercised
Expired
Closing balance
Consolidated
2023
$
Consolidated
2022
$
2,995,081
2,637,335
(34,945,960)
(34,945,960)
-
373,178
1,361,434
(44,625)
(31,577,701)
(30,991,816)
2,637,335
1,917,251
(1,478,520)
(80,985)
2,995,081
46,040
3,242,281
(604,946)
(46,040)
2,637,335
(34,945,960)
-
-
(34,945,960)
(34,945,960)
(34,945,960)
1,361,434
(1,361,434)
1,361,434
-
-
1,361,434
(44,625)
417,803
373,178
(1,150,329)
1,105,704
(44,625)
(765,530)
(643,517)
-
(1,409,047)
386,285
(995,866)
(155,949)
(765,530)
Number
Number
48,176,742
7,184,651
44,854,463
26,169,000
(19,661,425)
(22,846,721)
(4,568,188)
31,131,780
-
48,176,742
Weighted average exercise price of outstanding options (Cents)
Weighted average remaining life of outstanding options (Years)
1.77
1.50
2.39
1.47
Lotus Resources Annual Report 2023 67
Notes to the Financial Statements
17.
RESERVES AND NON-CONTROLLING INTEREST (continued)
Share-based payments reserve
This reserve is used to record the value of equity-settled share-based payments provided to
employees and directors as part of their remuneration.
Capital reserve
This reserve is used to record the value of equity instruments issued to a non-controlling interest as
part of the acquisition of the additional interest in the Kayelekera Uranium Mine. Refer to note 29 for
additional information.
Option premium reserve
This reserve was used to record the value of monies raised from issue of options and from issue of
incentive options. During the financial year, this amount was reclassified as part of accumulated
losses.
Option lapsed
No options lapsed during the year.
Option expired and cancelled
4,568,188 options expired or were cancelled during the year.
Foreign currency translation reserve
The foreign currency translation reserve records exchange rate differences on translating foreign
operations.
18.
ACCUMULATED LOSSES
Balance at 1 July
Loss for the year
Reclassification of options premium reserve
Transfer from share-based payments reserve
Balance at 30 June 2023
Consolidated
2023
$
Consolidated
2022
$
(68,391,981)
(56,441,844)
(9,916,736)
(11,996,177)
1,361,434
80,985
-
46,040
(76,866,298)
(68,391,981)
68 Lotus Resources Annual Report 2023
Notes to the Financial Statements
19.
CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts in the financial report. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements, estimates and assumptions on historical
experience and on other various factors it believes to be reasonable under the circumstances. The
resulting accounting judgements and estimates will seldom equal the related actual results. The
judgements, estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial
year are discussed below.
Share-based payments transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference
to the fair value of the equity instruments at the date at which they are granted. The fair value is
determined by using an appropriate valuation model taking into account the terms and conditions
upon which the instruments were granted. The accounting estimates and assumptions relating to
equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the consolidated entity
will commence commercial production in the future, from which time the costs will be amortised
in proportion to the depletion of the mineral resources. Key judgements are applied in considering
costs to be capitalised which includes determining expenditures directly related to these activities
and allocating overheads between those that are expensed and capitalised. In addition, costs
are only capitalised that are expected to be recovered either through successful development or
disposal of the relevant mining interest. Factors that could impact the future commercial production
at the mine include the level of reserves and resources, future technology changes, which could
impact the cost of mining, future legal changes and changes in commodity prices. To the extent
that capitalised costs are determined not to be recoverable in the future, they will be written-off in
the period in which this determination is made.
Rehabilitation provision
A provision has been made for the present value of anticipated costs for future rehabilitation of
land explored or mined. The consolidated entity’s mining and exploration activities are subject to
various laws and regulations governing the protection of the environment. The consolidated entity
recognises management’s best estimate for assets retirement obligations and site rehabilitations
in the period in which they are incurred. Actual costs incurred in the future periods could differ
materially from the estimates. Additionally, future changes to environmental laws and regulations
could affect the carrying amount of this provision.
Lotus Resources Annual Report 2023 69
Notes to the Financial Statements
20.
FINANCIAL RISK MANAGEMENT
Overview
The Group has exposure to the following risks from their use of financial instruments:
• credit risk
•
liquidity risk
• market risk
This note presents information about the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital. There
has been no change from prior year in relation to all of the exposures.
The Group’s risk management framework is supported by the Board and management. The Board
is responsible for approving and reviewing the Group’s risk management strategy and policy.
Management are responsible for monitoring that appropriate processes and controls are in place
to effectively and efficiently manage risk. The Board is responsible for identifying, monitoring and
managing significant business risks faced by the Group and considering the effectiveness of its
internal control system.
The Board has established an overall Risk Management Policy which sets out the Group’s system of
risk oversight, management of material business risks and internal control.
Financial risk management objectives
The overall financial risk management strategy focuses on the unpredictability of the finance markets
and seeks to minimise the potential adverse effects on financial performance and protect future
financial security.
Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to
meet its contractual obligations and arises principally from the Group’s cash and cash equivalents.
For the Company, it arises from receivables due from subsidiaries.
The Group does not hold any credit derivatives to offset its credit exposure.
Exposure to credit risk
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:
Cash and cash equivalents
Other assets (excluding prepayments, GST receivables
and other assets)
Other financial asset (security deposit)
Consolidated
2023
$
Consolidated
2022
$
15,519,217
4,876,370
227,571
181,019
15,053,100
30,799,888
14,552,735
19,610,124
70 Lotus Resources Annual Report 2023
Notes to the Financial Statements
20.
FINANCIAL RISK MANAGEMENT (continued)
Liquidity risk
Liquidity risk arises from the financial liabilities of the Group and the Group’s subsequent ability to
meet their obligations to repay their financial liabilities as and when they fall due.
Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Board
has determined an appropriate liquidity risk management framework for the management of the
Group’s short, medium and long-term funding and liquidity management requirements. The Group
manages liquidity risk by maintaining adequate reserves and continuously monitoring budgeted and
actual cash flows and matching the maturity profiles of financial assets, expenditure commitments
and liabilities.
The following are the contractual maturities of financial liabilities on an undiscounted basis, including
estimated interest payments. Cash flows for assets and liabilities without fixed amount or timing are
based on conditions existing at year end.
Carrying
amount
Contractual
cash flows
1
year
2-5
years
>5
years
Consolidated - 2023
Financial Liabilities
Trade and other payables
(811,448)
(811,448)
(811,448)
(811,448)
(811,448)
(811,448)
Consolidated – 2022
Financial Liabilities
Trade and other payables
(1,746,244)
(1,746,244)
(1,746,244)
Other liabilities
(7,351,143)
(7,351,143)
(7,351,143)
(9,097,387)
(9,097,387)
(9,097,387)
Market risk
-
-
-
-
-
-
-
-
-
-
Market risk is the risk that changes in market prices, such as foreign exchange rates and commodity
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 exposures within acceptable
parameters, while optimising return.
Foreign currency risk
The Group is exposed to fluctuations in foreign currencies arising from costs incurred in currencies
other than the functional currency of the Company and Group entities.
The Group operates internationally and is primarily exposed to foreign exchange risk arising from
currency exposures to the United States dollar and Malawi Kwacha.
Interest rate risk
The Group’s exposure to interest rates primarily relates to the Group’s cash and cash equivalents
and held to maturity investments. The Group manages market risk by monitoring levels of exposure
to interest rate risk and assessing market forecasts for interest rates.
Lotus Resources Annual Report 2023 71
Notes to the Financial Statements
20.
FINANCIAL RISK MANAGEMENT (continued)
At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:
Variable rate instruments
Financial assets
Carrying Amount
Consolidated
2023
$
Consolidated
2022
$
30,552,317
19,429,105
The Group’s variable rate instruments comprised the cash and cash equivalents and security deposit.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at reporting date would have increased/(decreased)
equity and profit or loss by the amounts shown below. The Board assessed a 100-basis point movement
as being reasonably possible based on short term historical movements. This analysis assumes that all
other variables remain constant. The analysis is performed on the same basis for 2022.
+100 basis points
-100 basis points
Profit
$
Equity
$
Profit
$
Equity
$
305,523
305,523
(305,523)
(305,523)
2023
Financial instruments with variable interest rate
Financial assets
2022
Financial instruments with variable interest rate
Financial assets
194,291
194,291
(194,291)
(194,291)
The weighted average effective interest rate on variable rate instruments was 4.30% (2022: 0.83%).
Fair value measurements
When an asset or liability, financial or non-financial, is measured at fair value for recognition or
disclosure purposes, the fair value is based on the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement
date; and assumes that the transaction will take place either: in the principal market; or in the
absence of a principal market, in the most advantageous market.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements. Classifications are
reviewed at each reporting date and transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers
are selected based on market knowledge and reputation. Where there is a significant change in fair
value of an asset or liability from one period to another, an analysis is undertaken, which includes a
verification of the major inputs applied in the latest valuation and a comparison, where applicable,
with external sources of data.
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded
in the financial statements approximate their fair values.
72 Lotus Resources Annual Report 2023
Notes to the Financial Statements
21.
CAPITAL RISK MANAGEMENT
The Group’s objectives when managing capital are to safeguard the ability to continue as a going
concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders
and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust
the capital structure, the Group may return capital to shareholders, pay dividends to shareholders,
issue new shares or sell assets.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt.
Net debt is calculated as total borrowings less cash and cash equivalents.
22.
SHARE BASED PAYMENTS
Share-based payment accounting policy
Equity-settled and cash-settled share-based compensation benefits are provided to Key
Management Personnel and employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to
employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for
the exchange of services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase
in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the
grant date fair value of the award, the best estimate of the number of awards that are likely to vest
and the expired portion of the vesting period. The amount recognised in profit or loss for the period
is the cumulative amount calculated at each reporting date less amounts already recognised in
previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined
by applying an appropriate valuation model, taking into consideration the terms and conditions on
which the award was granted. The cumulative charge to profit or loss until settlement of the liability
is calculated as follows:
• During the vesting period, the liability at each reporting date is the fair value of the award at that
date multiplied by the expired portion of the vesting period.
• From the end of the vesting period until settlement of the award, the liability is the full fair value
of the liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions
is the cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards
subject to market conditions are considered to vest irrespective of whether or not that market
condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification
has not been made. An additional expense is recognised, over the remaining vesting period, for any
modification that increases the total fair value of the share-based compensation benefit as at the
date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure
to satisfy the condition is treated as a cancellation. If the condition is not within the control of the
consolidated entity or employee and is not satisfied during the vesting period, any remaining
expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation,
and any remaining expense is recognised immediately. If a new replacement award is substituted
for the cancelled award, the cancelled and new award is treated as if they were a modification.
Lotus Resources Annual Report 2023 73
Notes to the Financial Statements
22.
SHARE BASED PAYMENTS (continued)
Share-based payment transactions
Share based compensation benefits are provided to employees via the Group’s incentive plans.
The incentive plans consist of short term and long-term incentives plans for Executive Directors, other
Executives and senior management and the short-term incentive plan for all other employees. The
equity instruments used for the Group incentive plans are zero exercise priced options. Information
relating to these plans is set out in the Remuneration Report and below.
The following tables illustrate the number and weighted average fair value of, and movements in,
options relating to share-based payments during the year.
Balance at 1 July
Granted during the year
Vested and exercised during the year
Lapsed or expired during the year
Balance at 30 June
30 June 2023
Options No.
Weighted
average fair
value
23,169,000
7,184,651
(8,012,350)
(1,209,521)
21,131,780
$0.194
$0.214
$0.185
$0.275
$0.199
Below are options granted during the year where the vesting criteria did not contain any market
conditions. The Black-Scholes-Merton model was used to determine the estimated fair value of
those options.
Options
Number
Grant date
Expiry date
Exercise Price Spot Price
at Grant
Date
Dividend
Yield
Risk-free
Interest
Rate
Fair Value
at Grant
Date
1,767,624
14/11/2022
31/10/2025
$0.00 each
250,000
14/11/2022
05/01/2025
$0.00 each
250,000
14/11/2022
05/01/2026
$0.00 each
1,109,676
14/11/2022
31/10/2027
$0.00 each
930,233
25/11/2022
31/10/2025
$0.00 each
883,721
25/11/2022
31/10/2027
$0.00 each
$0.240
$0.240
$0.240
$0.240
$0.205
$0.205
Nil
Nil
Nil
Nil
Nil
Nil
3.18%
3.18%
3.18%
3.18%
3.18%
3.18%
$0.240
$0.240
$0.240
$0.240
$0.205
$0.205
Below are options granted during the year that had market based vesting criteria related to
performance against a per group. A Monte-Carlo simulation was performed to estimate the fair
value.
Options
Number
Grant date
Expiry date
Exercise Price Spot Price
at Grant
Date
Dividend
Yield
Risk-free
Interest
Rate
Fair Value
at Grant
Date
1,109,676
14/11/2022
31/10/2027
$0.00 each
883,721
25/11/2022
31/10/2027
$0.00 each
$0.240
$0.205
Nil
Nil
3.18%
3.18%
$0.188
$0.164
74 Lotus Resources Annual Report 2023
Notes to the Financial Statements
22.
SHARE BASED PAYMENTS (continued)
Below are options granted during the previous financial year where the vesting criteria did not contain
any market conditions. The Black-Scholes-Merton model was used to determine the estimated fair
value of those options.
Options
Number
Grant date
Expiry date
Exercise Price Spot Price
648,000
29/11/2021
29/07/2024
$0.00 each
1,406,000
14/12/2021
14/12/2024
$0.00 each
615,000
29/11/2021
29/07/2026
$0.00 each
942,500
14/12/2021
14/12/2026
$0.00 each
3,000,000*
26/08/2021
1/01/2024
$0.00 each
3,000,000*
26/08/2021
10/02/2024
$0.00 each
3,000,000*
26/08/2021
1/01/2024
$0.00 each
3,000,000*
26/08/2021
10/02/2024
$0.00 each
7,000,000
26/08/2021
22/02/2024
$0.00 each
2,000,000
01/04/2022
31/03/2025
$0.00 each
at Grant
Date
$0.310
$0.285
$0.310
$0.285
$0.170
$0.170
$0.170
$0.170
$0.170
$0.370
Dividend
Yield
Risk-free
Interest
Rate
Fair Value
at Grant
Date
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
0.91%
0.91%
0.75%
0.72%
0.91%
0.91%
0.91%
0.91%
0.91%
2.35%
$0.310
$0.285
$0.310
$0.285
$0.109
$0.109
$0.138
$0.138
$0.170
$0.370
* These represent options granted that had a market based vesting criteria related to a share price
target, a trinomial barrier valuation was performed to estimate the fair value.
Below are options granted during the previous financial year that had market based vesting criteria
related to performance against a per group. A Monte-Carlo simulation was performed to estimate
the fair value.
Options
Number
Grant date
Expiry date
Exercise Price Spot Price
at Grant
Date
Dividend
Yield
Risk-free
Interest
Rate
Fair Value
at Grant
Date
615,000
29/11/2021
29/07/2026
$0.00 each
942,500
14/12/2021
14/12/2026
$0.00 each
$0.310
$0.285
Nil
Nil
0.75%
0.72%
$0.279
$0.277
Balance at 1 July
Vested and exercised during the year
Balance at 30 June
Share based payments expense
30 June 2022
Options No.
Weighted
average fair
value
26,169,000
(3,000,000)
23,169,000
$0.187
$0.138
$0.194
Consolidated
2023
$
Consolidated
2022
$
1,917,251
3,242,821
Lotus Resources Annual Report 2023 75
Notes to the Financial Statements
23. AUDITOR’S REMUNERATION
The following amounts were paid or payable for services provided by the auditors of the Group and
its related practices.
Audit and review services:
RSM Australia Partners
- audit and review of financial reports
61,300
56,000
Consolidated
2023
$
Consolidated
2022
$
Ernst & Young Malawi
- audit of financial report
24.
RELATED PARTY DISCLOSURES
a. Ultimate parent
Lotus Resources Limited is the ultimate Australian entity.
b. Subsidiaries
Interests in subsidiaries are set out in note 30.
c. Key management personnel compensation
36,354
97,654
19,290
75,290
The aggregate compensation made to directors and other members of key management personnel
of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
d. Loans to related parties
2023
$
846,439
70,405
1,255,453
2,172,297
2022
$
618,593
24,801
1,978,327
2,621,721
No loans were advanced to related parties during the reporting year (2022: Nil).
e. Amounts owed to related parties
As at the reporting date, $170,860 were owing to related parties (2022: $79,403) as disclosed in detail
below.
f.
Other key management personnel transactions with the Group
Mr Michael Bowen, who is a Non-Executive Director of the Company is a Partner of national law
firm Thompson Geer Lawyers (Thomson Geer). The Company used Thompson Geer for general legal
services and also transactional support. The services provided by Thompson Geer were done so at
an arm’s length basis and on normal commercial terms. During the year, the Company incurred
costs under this arrangement totalling $140,052 (2022: $28,734). There is a balance of $107,965 (2022:
$4,056) owing to Thomson Geer as at 30 June 2023 in relation to the provision of these services.
76 Lotus Resources Annual Report 2023
Notes to the Financial Statements
24.
RELATED PARTY DISCLOSURES (continued)
Mr. Grant Davey, who was a Non-Executive Director of the Company is a Director and shareholder
of Matador Capital Pty Ltd (Matador Capital). The Company made payments to Matador Capital
under a Shared Services Agreement in which Matador Capital provides office space and general
office costs to the Company at cost plus 5%. The Company also uses Matador Capital’s technical
and project management expertise. During the year the Company incurred costs under this
arrangement totalling $635,589 (2022: $290,064). In addition to Mr Davey’s Director payment of
$50,000 disclosed in the remuneration table above, he was also paid a consulting fee of $100,000 in
relation to government liaison and on country services. These services provided by Matador Capital
were done so at an arm’s length basis and on normal commercial terms. There is a balance of
$62,895 (2022: $75,347) owing to Matador Capital as at 30 June 2023 in relation to the provision of
these services.
25.
COMMITMENTS
Exploration Project commitments
Commitments for tenement rentals and expenditure commitments due within one year amounted
to $47,383 (2022: $51,347).
26.
EARNINGS PER SHARE
Reconciliation of earnings to profit or loss:
Loss after income tax used for basic and dilutive EPS
(9,916,736)
(11,996,177)
Consolidated
2023
$
Consolidated
2022
$
Consolidated
2023
No.
Consolidated
2022
No.
Weighted average number of ordinary shares outstanding during
the year used in calculating basic and dilutive EPS
1,309,279,308
1,167,267,583
Basic earnings per share
Basic earnings per share are calculated by dividing the profit attributable to owners of the Company,
excluding any costs of servicing equity other than ordinary shares by the weighted average number
of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to
take into account the after-income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares, and the weighted average number of additional ordinary shares
that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
Lotus Resources Annual Report 2023 77
Notes to the Financial Statements
27.
RECONCILIATION OF CASH FLOWS USED IN OPERATING ACTIVITIES
Cash flows from operating activities
Loss after income tax
Adjustments for:
Gain on disposals of tenements
Depreciation expense
Share based payments
Provision for rehabilitation - accretion of interest
Foreign currency translation difference
Impairment of property, plant and equipment
Consolidated
2023
$
Consolidated
2022
$
(10,560,532)
(12,962,890)
-
2,223
1,917,251
1,428,869
48,914
522,578
(2,196,001)
1,217
3,242,820
-
65,093
1,242,547
Adjusted operating loss before changes in working capital
(6,640,697)
(10,607,214)
Change in other current assets, including inventories
Change in trade and other payables
Net cash used in operating activities
(657,796)
(1,044,317)
(133,879)
777,799
(8,342,810)
(9,963,294)
28.
CONTINGENT LIABILITIES
Kayelekera Uranium Project
At 30 June 2023, the Company had three agreements providing for royalty payments to local
government and former owners for production from the Kayelekera Uranium Project. Royalties
payable on production comprise an uncapped royalty on revenue to the Malawi Government (the
rate is subject to ongoing negotiations with the Government), a 3.5% royalty on revenue capped at
$5,000,000 to Paladin Energy and an uncapped 0.75% royalty on revenue to Power Resources Inc.
Liability to make royalty payments only arises upon the restart of production from Kayelekera.
78 Lotus Resources Annual Report 2023
Notes to the Financial Statements
29.
ACQUISITION OF KAYELEKERA URANIUM PROJECT
On 24 June 2019, the Group entered into an agreement with ASX listed Paladin Energy Limited (ASX:
PDN) to acquire a 65% interest in the Kayelekera Uranium Project (Kayelekera), located in Malawi.
The acquisition was completed on 13 March 2020. This transaction has been accounted for as a
business combination.
Acquisition Agreement
The consideration payable for the acquisition was as follows:
• $200,000 in cash, plus 90,000,000 ordinary shares in Lotus Resources Limited to be issued on
completion (Initial Consideration);
• a royalty of 3.5% of gross returns at the Kayelekera mine up to a maximum of $5.0 million in favour
of the Paladin Energy Limited ; and
• $3,000,000 worth of ordinary shares in Lotus Resources Limited to be issued on the third anniversary
of Completion, calculated using the lower of;
•
the price at which shares were issued under the most recent capital raising undertaken by
the Company within 90 days prior to issue; and
• 30-day VWAP for Shares up to and including the business day prior to issue (Deferred
Consideration).
Environmental Bond
In addition to the consideration set out above, subsidiary Lotus (Africa) Limited, must repay (or
procure that the Company repays on its behalf) the amount of US$10,000,000 which had previously
been advanced by Paladin Energy Limited to Lotus (Africa) Limited to fund the environmental bond
in favour of the Government of Malawi (Environmental Bond). The following repayment schedule
was agreed:
i.
ii.
iii.
iv.
US$4,000,000 on completion (13 March 2020);
US$1,000,000 on the date that is not later than 1 year after completion (13 March 2021);
US$2,000,000 on the date that is not later than 2 years after completion (13 March 2022); and
US$3,000,000 on the date that is not later than 3 years after completion (13 March 2023).
As at 30 June 2023, all the remaining amounts due for the environmental bond and the deferred
consideration were fully settled.
Increase in Ownership Interest
In 2022, the Company increased its ownership interest in the Kayelekera Uranium Project from 65%
to 85%, by acquiring the remaining 23.5% interest in Lily Resources Pty Ltd, with the Government of
Malawi holding the remaining 15% interest.
The additional interest was acquired upon the Company exercising its buy out right under the
agreement entered when the Company acquired its initial 65% interest. The interest was purchased
from a director related entity following shareholder approval on 30 July 2021. In consideration for the
additional ownership interest, the Company issued 226,463,927 ordinary shares to the vendor, at an
estimated fair value of $35,101,909 based on the market price of the equity instruments at grant date.
Lotus Resources Annual Report 2023 79
Notes to the Financial Statements
30.
INTEREST IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following
wholly-owned subsidiaries in accordance with the accounting policy described in note 1:
Name
Westview Resources Pty Ltd
Providence Metals Pty Ltd
Lily Resources Pty Ltd
Lotus (Africa) Limited
Country of
incorporation
Ownership Interest
2023
%
Ownership Interest
2022
%
Australia
Australia
Australia
Malawi
-
100%
100%
85%
100%
100%
100%
85%
In 2022, the Company increased its shareholding in Lily Resources Pty Ltd to 100% which resulted in
the ownership in Lotus (Africa) Limited increasing to 85%. Refer to note 29 for further details.
Westview Resources Pty Ltd was voluntarily de-registered.
31.
PARENT ENTITY DISCLOSURES
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Guarantees
2023
$
2022
$
(13,734,621)
(53,962,918)
(13,734,621)
(53,962,918)
16,053,055
16,056,852
(785,280)
(785,280)
5,293,468
5,297,699
(4,611,266)
(4,611,266)
15,271,572
686,434
143,537,936
114,923,545
2,995,081
4,651,147
(131,261,445)
(118,888,258)
15,271,572
686,434
Lotus Resources Limited has no guarantees other than as disclosed in note 29.
Other Commitments and Contingencies
Lotus Resources Limited has no other commitments and contingencies other than as disclosed in
notes 28 and 29.
80 Lotus Resources Annual Report 2023
Notes to the Financial Statements
32.
EVENTS OCCURING AFTER THE REPORTING DATE
On 13 July 2023 Lotus announced a merger by way of Scheme of Arrangement with ASX listed
A-Cap Energy Limited (A-Cap) under which Lotus will acquire 100% of the A-Cap shares on issue.
Refer to the Review of Activities for more details in the Directors’ Report.
On 20 September 2023 8,500,000 unlisted options were exercised at an average exercise price
of $0.04 per option for gross proceeds of $350,000 before costs, resulting in the issue of the same
number of Lotus ordinary shares.
There were no other matters or circumstances that have arisen since 30 June 2023 that have
significantly affected, or may significantly affect the Group’s operations, the results of those
operations, or the Group’s state of affairs in future financial years.
Lotus Resources Annual Report 2023 81
Directors’ Declaration
In the directors’ opinion:
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, the
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements;
the attached financial statements and notes comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as stated in note 1 to the
financial statements;
the attached financial statements and notes give a true and fair view of the Group’s financial
position as at 30 June 2023 and of its performance for the financial year ended on that date;
and
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the directors
Mr Michael Bowen
Non-Executive Chairman
Dated at Perth, Western Australia this 22nd day of September 2023.
82 Lotus Resources Annual Report 2023
Independent Auditor’s Report
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
LOTUS RESOURCES LIMITED
Opinion
We have audited the financial report of Lotus Resources Limited (the Company) and its subsidiaries (the Group),
which comprises the statement of financial position as at 30 June 2023, the statement of profit or loss and other
comprehensive income, the statement of changes in equity and the statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting policies, and the
directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the 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 (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Lotus Resources Annual Report 2023 83
Independent Auditor’s Report
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.
Key Audit Matter
How our audit addressed this matter
Our audit procedures included:
• Obtaining management
• Assessing the Group’s accounting policy for
compliance with Australian Accounting Standards;
of
capitalised exploration and evaluation expenditure
by area of interest and agreeing to general ledger;
• Assessing whether the right to tenure of the area
reconciliation
of interest was current;
• Testing a sample of additions to supporting
the amounts
documentation and ensuring
capitalised during the year are in compliance with
the Group’s accounting policy and relate to the
area of interest;
• Assessing
and
evaluating management’s
assessment that no indicators of impairment
existed for those tenements where the Group has
rights of tenure;
• Through discussions with the management and
reading
relevant supporting documentation,
that
assessing management’s determination
exploration and evaluation activities have not yet
reached a stage where the existence or otherwise
of economically recoverable reserves may be
reasonably determined; and
• Assessing the appropriateness of the related
financial statements disclosure.
Our audit procedures included:
• Assessing the Group’s accounting policy for
compliance with Australian Accounting Standards;
• Testing key inputs such as inflation rate, discount
rate, timing of rehabilitation, area of disturbances
and unit costs to supporting documentation;
performed
by
the work
management’s expert, including the competency
and objectivity of the expert;
• Assessing
of
• Assessing the mathematical accuracy of the
model used to calculate the provision;
• Assessing the movement in the provision has been
in accordance with Australian
accounted
for
Accounting Standards; and
• Assessing the appropriateness of the related
financial statements disclosure.
Exploration and Evaluation Assets
Refer to Note 10 in the financial statements
The Group has capitalised exploration and evaluation
expenditure with a carrying value of $39,532,314 as at
30 June 2023.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resource, the Group is required
to assess at each reporting date if there are any
triggers for impairment which may suggest the
carrying value exceeds the recoverable value.
We considered this to be a key audit matter due to the
significant management
in
assessing the carrying value of the asset including:
judgments
involved
• Determining whether the expenditure can be
associated with finding specific mineral resources,
and the basis on which that expenditure is
allocated to an area of interest;
• determining whether exploration activities have
progressed to the stage at which the existence of
an economically recoverable mineral reserve may
be assessed; and
• Assessing whether any indicators of impairment
are present, and if so, judgments applied to
determine and quantify any impairment loss.
Provision for mine closure and rehabilitation
Refer to Note 15 in the financial statements
As at the reporting date, the Group had a provision of
$37,257,958 relating to the estimated future cost of
mine closure and rehabilitation.
We considered this to be a key audit matter due to the
significant management judgments and estimates
involved in assessing the provision of asset retirement
obligation including:
• The determination of costs to be incurred in future
years and its timing;
• The complexity involved in the quantification of the
provision based on areas disturbed; and
• The methodology used to calculate the provision
amount to ensure compliance with Australian
Accounting Standards.
84 Lotus Resources Annual Report 2023
Independent Auditor’s Report
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2023 but does not include the financial report and the
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.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This
description forms part of our auditor's report.
Lotus Resources Annual Report 2023 85
Independent Auditor’s Report
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report for the year ended 30 June 2023.
In our opinion, the Remuneration Report of Lotus Resources Limited, for the year ended 30 June 2023, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 22 September 2023
ALASDAIR WHYTE
Partner
86 Lotus Resources Annual Report 2023
ASX Additional Information
Additional information required by Australian Securities Exchange Ltd and not shown elsewhere in
this report is as follows. The information is current as at 20 September 2023.
a. Twenty largest shareholders
The names of the twenty largest holders of quoted ordinary shares are:
Rank
Name
CITICORP NOMINEES PTY LIMITED
KAYELEKERA RESOURCES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
Units
% Units
199,337,793
14.74
175,509,489
164,967,018
12.98
12.20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
57,874,931
DESERTFOX PTY LTD
BNP PARIBAS NOMINEES PTY LTD
TR NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
SANDHURST TRUSTEES LTD
MRS PAMELA JULIAN SARGOOD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
NETWEALTH INVESTMENTS LIMITED
NETWEALTH INVESTMENTS LIMITED
MR DARREN CRAIG GLOVER
MR BENJAMIN LEIGH HARPER
HAWTHORN GROVE INVESTMENTS PTY LTD
HUICEN CAPITAL PTY LIMITED
46,954,438
42,770,091
40,500,000
29,477,294
25,669,535
21,782,013
21,718,473
19,400,000
14,667,879
12,530,064
11,942,300
11,904,762
11,904,762
8,504,747
8,000,000
4.28
3.47
3.16
2.99
2.18
1.90
1.61
1.61
1.43
1.08
0.93
0.88
0.88
0.88
0.63
0.59
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
7,732,451
0.57
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
16
18
19
20
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
933,148,040
69.00
Total Remaining Holders Balance
419,334,004
31.00
Lotus Resources Annual Report 2023 87
ASX Additional Information
a. Twenty largest shareholders (continued)
The names of the holders of unlisted options are:
Rank
Name
Units
% Units
46.30
11.05
8.84
7.86
5.95
4.42
4.42
3.47
2.47
1.87
1.47
1.27
0.20
0.11
0.10
0.09
0.07
0.03
0.02
100
1
2
3
4
5
6
6
8
9
10
11
12
13
14
15
16
17
18
19
MR KEITH BOWES
TR NOMINEES PTY LTD
MS DIXIE INA MARSHALL
MR MICHAEL BARRIE BALL
MR THEO CORNELIUS KEYTER
MR CHRISTOPHER BRUCE KNEE
MRS RUTH MARY MCKENZIE + MR STUART ANDREW MCKENZIE
MR JACOBUS CHARL CILLIERS
MRS TARA ELIZABETH KILEY + MR ADAM KILEY
TSI CAPITAL PTY LTD
MR BRIAN SCOTT
MS AMY SULLIVAN
MR KAREL JOHAN DONDERS
MR TRENT DAVEY
MS JAYDE ROBINSON
MS NADINE MAYER
MS ASHLEE GORMAN
MS JESSICA JANETH CABALLERO GONGORA
FRANK HERNAN TERRONES FERNANDEZ
10,478,475
2,500,000
2,000,000
1,779,070
1,346,396
1,000,000
1,000,000
785,815
558,140
424,000
333,582
287,815
44,714
23,848
21,612
20,867
16,396
7,225
3,825
Totals: Holders of Unlisted Options
22,631,780
b. Distribution of equity security holders
Ordinary Shares
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Total
Total holders
Units
% of Issued Capital
608
1,107
801
1,866
597
4,979
204,313
3,425,272
6,261,848
67,306,439
1,275,284,172
1,352,482,044
0.02
0.25
0.46
4.98
94.29
100.00
There are 791 holders of a less than marketable parcel of shares (as at 20 September 2023, a less
than marketable parcel is 1,924 shares), representing a total of 493,652 shares.
88 Lotus Resources Annual Report 2023
ASX Additional InformationStatements
b. Distribution of equity security holders (continued)
Unlisted Options
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Total
Total holders
Units
% of Issued Capital
0
1
1
5
12
19
0
3,825
7,225
127,437
22,493,293
22,631,780
0.00
0.02
0.03
0.56
99.39
100.00
c. Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance with section
671B of the Corporations Act 2001 are:
Name
Number of Shares
%
Kayelekera Resources Pty Ltd
175,509,489
12.98
MM Asset Management Inc.
79,857,097
5.90
d. Restricted Securities
There are nil restricted securities as at 20 September 2023.
e. Voting Rights
The voting rights attaching to ordinary shares are:
On a show of hands, every member present in person or by proxy shall have one vote, and upon a
poll, each share shall have one vote.
Options do not carry any voting rights.
f. On Market Buy Back
There is no current on market buy-back.
Lotus Resources Annual Report 2023 89
ASX Additional Information
g. Unquoted securities
Class
UNL OPTS EXP 01/01/2024
UNL OPTS EXP 05/01/2025
UNL OPTS EXP 05/01/2026
UNL OPTS EXP 10/02/2024
UNL OPTS EXP 14/12/2024
UNL OPTS EXP 14/12/2026
UNL OPTS EXP 23/10/2023, EXERCISABLE AT $0.08
UNL OPTS EXP 29/07/2024
UNL OPTS EXP 29/11/2026
UNL OPTS EXP 31/03/2025
UNL OPTS EXP 31/10/2025
UNL OPTS EXP 31/10/2027
h. Unquoted Securities >20% Holders
Total Holdings
2,000,000
250,000
250,000
6,000,000
11,050
1,319,000
2,500,000
550,800
1,230,000
2,000,000
2,697,857
3,823,073
Class
Holder
Number
%
UNL OPTS EXP 01/01/2024
MR CHRISTOPHER BRUCE KNEE
MR STUART ANDREW MCKENZIE
UNL OPTS EXP 05/01/2025
MR MICHAEL BARRIE BALL
UNL OPTS EXP 05/01/2026
MR MICHAEL BARRIE BALL
UNL OPTS EXP 10/02/2024
MR KEITH BOWES
UNL OPTS EXP 14/12/2024
MS JESSICA JANETH CABALLERO GONGORA
MR FRANK HERNAN TERRONES FERNANDEZ
MR THEO CORNELIUS KEYTER
UNL OPTS EXP 14/12/2026
TSI CAPITAL PTY LTD
MR JACOBUS CHARL CILLIERS
1,000,000
1,000,000
50.00
50.00
250,000
100.00
250,000
100.00
6,000,000
100.00
7,225
3,825
565,000
424,000
330,000
65.38
34.62
42.84
32.15
25.02
UNL OPTS EXP 23/10/2023,
EXERCISABLE AT $0.08
TR NOMINEES PTY LTD
2,500,000
100.00
UNL OPTS EXP 29/07/2024
MR KEITH BOWES
550,800
100.00
UNL OPTS EXP 29/11/2026
MR KEITH BOWES
1,230,000
100.00
UNL OPTS EXP 31/03/2025
MS DIXIE INA MARSHALL
2,000,000
100.00
UNL OPTS EXP 31/10/2025
MR KEITH BOWES
UNL OPTS EXP 31/10/2027
MR KEITH BOWES
MR MICHAEL BARRIE BALL
930,233
1,767,442
767,442
24.33
46.23
20.07
90 Lotus Resources Annual Report 2023
ASX Additional InformationStatements
i.
Interest in Mining Tenements
As at 22 September 2023, the Company’s tenement interests are shown in the table below.
Ownership
Project
Location
Tenement
ML0152 - Kayelekera
EPL418 - Chilumba
EPL489 - Nthalire
EPL502 - Juma-Miwanga
EPL417 - Rukuru
EL595 - Livingstonia
EL583 - Livingstonia West
85%
85%
85%
85%
85%
85%
85%
Kayelekera
Kayelekera
Kayelekera
Kayelekera
Kayelekera
Kayelekera
Kayelekera
Malawi
Malawi
Malawi
Malawi
Malawi
Malawi
Malawi
Malawi
Mapambo (Formerly EPL0225)
Under Application
Kayelekera
Lotus Resources Annual Report 2023 91
Registered Office
Level 20, 140 St Georges Terrace
Perth, Western Australia, 6000
lotusresources.com.au | ASX:LOT
92 Lotus Resources Annual Report 2023