ANNUAL
REPORT
2024
Contents
03
Chairman's Letter
05
Mineral Resources
07
Corporate Governance Statement
22
Directors Report
26
Financial Report
94
Independent auditor's report
100
ASX additional information
103
Corporate Directory
2
Chairman's Letter
Our company underwent a significant change in
2024 to stabilise the company and optimise our future.
This was necessitated by the impact of a very difficult
diamond market and some operational
challenges both in Lesotho and in Angola. Globally
the downturn in the diamond market continued and
rough diamond prices remained under severe
pressure, which impacted on our profitability and led
to the board assessing all our assets and operations.
After a thorough review, we concluded that we should
reduce our cost base and only focus on our core
areas of exploration and alluvial mining in Angola, and
on the development of the Merlin project in the
Northern Territory of Australia.
Our first action in reducing our cash outflow was the
successful divestment of our 70 percent stake in the
Mothae Diamond Mine in Lesotho. We also took the
decision to not renew the Orapa Area F exploration
license in Botswana and to sell the Brooking
exploration asset in Western Australia.
The disposal of our 70% share in Mothae was only
considered after assessing all options, including
mothballing the mine and severe cost cutting, to see if
the mine could break even from a cash flow
perspective to enable us to ride out the downturn in
the diamond market. The mine was performing well
from a mining and grade recovered perspective
however, there was a significant drop in the quality of
the diamonds recovered and combined with the
overall reduction in global rough prices, meant that we
were having to subsidise the mine at an unacceptably
high level, which was not sustainable. After reviewing
all options considered by management, it was decided
that exiting Lesotho was the best option for the
company.
We successfully sold our 70% share to a
local
entrepreneur,
who
has
since
continued with responsible mining at
Mothae.
After our restructuring, we were left with
our two core assets in Angola and the 100
percent owned Merlin Project in the
Northern Territory of Australia. We also
embarked on a cost-cutting exercise at our
small
head
office
and
have
further
reduced headcount and costs to a more
appropriate level, while we refocus our
efforts on our two main assets. We also
saw the departure due to ill health of our
CEO, Nick Selby who had been with
Lucapa for more than a decade. Nick
was succeeded by Alex Kidman, who
has added significant focus and energy to
our company.
3
Chairman's Letter
In November we outlined to the market our low-
cost plan to restart production on a small scale
at the Merlin Diamond Project. The management
team did excellent work in reducing the high
initial
capital
investment,
and
we
are
now
engaging with potential partners to fund Merlin at
a project level.
In addition to reworking the Merlin Project, we
also undertook a new generation helicopter-
borne
geophysics
survey
over
the
Merlin
tenements, an area of 234km2. This is the first
time Merlin has been exposed to modern Time-
Domain airborne survey technology, and the
results were very positive.
Merlin hasn’t been surveyed for more than a
quarter of a century.
More than fifteen new kimberlite targets were
identified, in addition to two very large potential
base metal anomalies, demonstrating that Merlin
has potential beyond diamonds.
The reason we are so excited about the results
from the in depth review of the geophysics
data,
which
show
two
large
conductive
features, is because the area has comparable
stratigraphy to Glencore’s large McArthur River
Mine ore bodies, which are situated just 50
kilometres away from Merlin.
In 2025, we intend to undertake follow up
geophysics,
soil
sampling
and
geological
mapping to continue defining the targets ahead of
drilling them.
In Angola, our Kimberlite Exploration Joint
Venture
continued
to
explore
for
the
kimberlite source of the alluvial diamonds.
Pleasingly we moved closer to confirming the
majority stake in the JV with our par tners.
Through a concer ted ef for t we now have
terms
of
the
new
Mineral
Investment
Contract fully negotiated, we are expecting to
sign and finalise our majority ownership in
the second quar ter of 2025.
I would like to thank the board and
management for their suppor t and dedication
in what has been a very dif ficult 2024, but I
believe we are now following the best path
towards success.
2024 has indeed been a year of change for
Lucapa, none of it was easy, but it has left us
appropriately structured and very focused as
we progress in 2025. The diamond market
remains challenging but we see signs of
recovery and continued strong demand for
our diamonds which is very positive.
Stuart Brown
Chairman
"More than fifteen new kimberlite
targets were identified, in addition
to two very large potential base
metal
anomalies,
demonstrating
that Merlin has potential beyond
diamonds"
4
LULO JORC Classified Inferred Alluvial Diamond Resource 31 December 2024
DATE
AREA
(M )
2
DILUTED
VOLUME
(M )
3
CARATS
/STONE
STONES
CARATS
DILUTED
GRADE
(CPHM )
3
MODELLED
DIAMOND
VALUE
(US$/CARAT)
31 Dec 24
5,608,862
5,797,094
1.24
201,100
249,000
4.30
1,581
31 Dec 23
4,780,000
5,020,000
1.26
181,900
228,400
4.55
1,897
Mineral Resources
The Updated Lulo Diamond Resource was independently estimated and reconciled on a depletion
and addition basis to 31 December 2024 by external consultants Z Star Mineral Resource
Consultants (Pty) Ltd (“Z Star”) of Cape Town, South Africa.
After
accounting
for
mining
depletion of 25,341 carats during
the 2024 calendar year, the
extensive
alluvial
exploration
activities undertaken during the
year increased the Lulo Diamond
Resource in-situ carats by 9%
percent to 249,000 carats.
Notes
i.
m = square metres; m = cubic metres; cphm = carats per 100 cubic metres
2
3
3
ii.
Diluted volumes have been estimated based on historical mining production data to better reflect recoverable volumes and grades
iii.
Bottom cut off screen size: effective 1.5mm
iv.
Table contains rounded figures
*
Special stones are not excluded in the modelling stage, either in terms of size or assortment
**
Reported on a 100% project basis, of which LOM holds a 40% interest
5
Merlin JORC Classified Diamond Resource 31 December 2024
Lucapa 100% attributable
RESOURCE
CLASSIFICATION
DATE
TONNES
(MT)
GRADE (CPHT)
CARATS (MILLION)
Indicated
31 Dec 24
13.4
17
2.28
Inferred
31 Dec 24
14.4
15
2.07
TOTAL
27.8
16
4.35
Mineral Resources
Notes:
(i)
Mineral Resource reported in Lucapa’s ASX announcement “Acquisition of Merlin Diamond Project and A$23M
Capital Raising” on 24 May 2021. No changes to the resource have been made since.
(ii)Mineral Resource grades based on previous mining operations recovery using a +0.95mm slotted bottom screen
and +5DTC cut-off;
(iii)Insufficient grade data available to determine +5DTC cut-off grade for Tristram and Bedevere pipes therefore full-
cut-off grades are used;
(iv)Rounding of tonnage and carats may result in computational inaccuracies.
Information included in this announcement that relates to exploration results and resource estimates is based on
and fairly represents information and supporting documentation prepared and compiled by Richard Price MAusIMM
who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Price is an employee of Lucapa Diamond
Company Limited. Mr Price has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined
in the 2012 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore
Reserves. Mr Price consents to the inclusion in the announcement of the matters based on this information in the
form and context in which it appears.
Information included in this report that relates to the stone frequency, grade and size frequency valuation and
validation in the Lulo Diamond Resource estimate is based on, and fairly represents, information and supporting
documentation prepared and compiled by Sean Duggan (Pri.Sci.Nat 400035/01) and David Bush (Pri.Sci.Nat
400071/00).
Messers. Duggan and Bush are directors and employees of Z Star Mineral Resource Consultants (Pty) Ltd, of Cape
Town, South Africa. Both hold qualifications and experience such that both qualify as members of a Recognised
Overseas Professional Organisation (ROPO) under relevant ASX listing rules. Messers. Duggan and Bush both
have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration
and to the activity which they are undertaking to each qualify as a Competent Person as defined in the 2012 Edition
of the Joint Ore Reserves Committee (JORC) Code. Messers. Duggan and Bush both consent to the inclusion in the
announcement of the matters based on this information in the form and context in which it appears.
6
Corporate Governance Statement
7
Corporate Governance Statement
For the year ended 31 December 2024
In fulfilling its obligations and responsibilities to its
various stakeholders, the Board of Lucapa is a
strong advocate of good corporate governance.
The Board has adopted corporate governance
policies and practices consistent with the ASX
Corporate
Governance
Council’s
“Corporate
Governance Principles and Recommendations”
(“Recommendations”)
where
considered
appropriate for a Company of Lucapa’s size and
complexity.
Lucapa has implemented the ASX Corporate
Governance Council’s Fourth Edition Corporate
Principles
(“Fourth
Edition”)
and
Recommendations. Accordingly, this Corporate
Governance Statement has been prepared on the
basis of disclosure under the Fourth Edition of
these principles. Details of the Company’s
compliance with these principles are summarised
in the Appendix 4G announced to the ASX in
conjunction with the Annual Report.
This statement describes how Lucapa has
addressed the Council’s guidelines and eight
corporate governance principles and where the
Company’s
corporate
governance
practices
depart from the Recommendations, the Company
discloses the reason for adoption of its own
practices on an “if not, why not” basis.
Given the size, complexity and development
nature of the Group and the cost of strict
compliance with all the Recommendations, the
Board
has
adopted
a
range
of
modified
procedures and practices which it considers
appropriate to enable it to meet the principles of
good corporate governance.
At the end of this sta
\
tement is a checklist setting out
the Recommendations with which the Company does
or does not comply. The information in this statement is
current as at 22 April 2025.
Background
Lucapa
has
a
highly
experienced
and
well
credentialed Board and management team, with a
proven history of developing diamond projects
successfully, quickly and cost effectively in a
corporately responsible manner.
Lucapa recognises the importance of its people in
building a strong and successful organisation. To
achieve this, Lucapa has focused on developing the
right culture across the organisation, which is strongly
based on a vision, mission and values communicated
in our teams in Australia and Africa to ensure they
know what is expected of them, both operationally
and behaviourally, and are recognised for their good
work.
Vision
Lucapa’s vision is to become a pre-eminent mid-tier
diamond company with multiple assets, vertically
integrating through the supply chain, to bring greater
value to all stakeholders.
Mission
Lucapa’s mission is to explore and grow our
production of niche highvalue diamonds in a safe,
responsible, innovative and profitable manner for the
benefit of all stakeholders.
Values
Integrity
We interact with all stakeholders with integrity,
honesty, transparency and fairness.
8
Safety
We conduct operations in a safe, responsible and
environmentally conscious manner.
Teamwork
We attract and employ the best skillsets,
encourage
teamwork,
diversity
and
reward
performance.
Partnership
We work with the local communities in which we
operate for common benefit.
The Board is targeting the highest standards of
corporate governance to continue their track
record of delivering this value.
The following governance-related documents can
be
found
on
the
Company’s
website
at
www.lucapa.com.au under the section marked
“Investors” / “Company Information” / “Corporate
Governance”.
Charters
·Board
Policies and Procedures
Code of Conduct
Policy and Procedure for Selection and
(Re)Appointment of Directors
Policy on Assessing the Independence of
Directors
Securities Trading Policy
Risk Management Policy
Procedure for the Selection, Appointment and
Rotation of External Auditor
Policy on Continuous Disclosure
Shareholder Communication Policy
Diversity Policy
Whistle Blower Policy
Anti-Bribery and Corruption Policy
Anti-Slavery Policy
Principle 1 Lay solid foundations for
management and oversight
The main function of the Board is to lead and
oversee the management and strategic direction of
the Group. The Board regularly measures the
performance of management in implementation of
the strategy through regular Board meetings.
Lucapa has adopted a formal Board charter
delineating the roles, responsibilities, practices and
expectations of the Board collectively, the individual
Directors and management.
The Board of Lucapa ensures that each member
understands their roles and responsibilities and
ensures regular meetings so as to retain full and
effective control of the Company.
Role of the Board
The Board responsibilities are as follows:
Setting the strategic aims of Lucapa and
overseeing management’s performance within
that framework;
Making sure that the necessary resources
(financial and human) are available to the
Group and management to meet its strategic
objectives;
Overseeing and measuring management’s
performance in delivering the Company’s
strategic objectives;
Selecting and appointing a Managing Director
with the appropriate experience and skills to
help the Group in the pursuit of its strategic
objectives;
Controlling and approving financial and
compliance reporting, capital structures and
material contracts;
Ensuring that a sound system of risk
management and internal controls is in place;
Setting the Company’s vision, core values and
standards;
9
Undertaking regular review of the corporate
governance policies to ensure adherence to
the ASX Corporate Governance Council
principles;
Ensuring that the Company’s obligations to
shareholders are understood and met;
Ensuring the health, safety and well-being of
employees in conjunction with management,
developing, overseeing and reviewing the
effectiveness of the Group’s occupational
health and safety systems to assure the well-
being of all employees;
Ensuring an adequate system is in place for
the proper delegation of duties for the
effective day to day running of the Group
without the Board losing sight of the direction
that the Group is taking; and
Ensuring the Company values diversity in all
aspects of its business.
Delegation to management
Other than matters specifically reserved for the
Board, responsibility for the operation and
administration
of
the
Company
has
been
delegated to the Managing Director. This
responsibility
is
subject
to
an
approved
delegation
of
authority
which
is
reviewed
regularly.
Internal control processes are designed to allow
management to operate within the parameters
approved by the Board and the Managing
Director cannot commit the Group to additional
activities or obligations in excess of these
delegated authorities without specific approval of
the Board.
Election of Directors
The Board is responsible for overseeing the
selection
process
of
new
Directors,
and
undertakes appropriate checks before appointing
a new Director, or putting forward a candidate for
election as a Director. All relevant information is
provided in the Notice of Meeting seeking the
election or re-election of a Director including:
Biographical details including qualifications and
experience;
Other directorships and material interests;
Term of office;
Statement by the Board on the independence of
the Director;
Statement by the Board as to whether it
supports the election or re-election; and
Any other material information.
Terms of appointment
Non-executive Directors
To facilitate a clear understanding of roles and
responsibilities all non-executive Directors have
signed a letter of appointment. This letter of
appointment includes acknowledgement of:
Director responsibilities under the Corporations
Act, Listing Rules, the Company’s Constitution
and other applicable laws;
Corporate governance processes and Group
policies;
Board and Board sub-committee (if applicable)
meeting obligations;
Conflicts and confidentiality procedures;
Securities trading and required disclosures;
Access to independent advice and employees;
Confidentiality obligations;
Directors fees;
Expenses reimbursement;
Directors and officers insurance arrangements;
Other directorships and time commitments; and
Board performance review.
Managing Director
The Managing Director has a signed services
agreement. For further information refer to the
Remuneration Report.
10
10
Role of Company Secretary
The Company Secretary is accountable to the
Board for:
Advising the Board and committees on
corporate governance matters;
The completion and distribution of Board and
committee papers;
Completion of Board and committee minutes;
and
The
facilitation
of
Director
induction
processes
and
ongoing
professional
development of Directors.
All Directors have access to the Company
Secretary who has a direct reporting line to the
Chairman.
Diversity
The Board values diversity in all aspects of its
business and is committed to creating a working
environment that recognises and utilises the
contribution of its employees. The purpose of this
is to provide diversity and equality relating to all
employment matters. The Group’s policy is to
recruit and manage on the basis of experience,
ability and qualification for the position and
performance, irrespective of gender, age, marital
status,
sexuality,
nationality,
race/
cultural
background, religious or political opinions, family
responsibilities or disability.
The Group’s objective is to improve gender
diversity at all levels of its business on a year-on-
year basis whilst recognising that it operates in
very competitive labour markets in remote
locations, with strong cultural sensitivities, where
positions are sometimes difficult to fill. There is
periodic reporting at the Group’s operations to
measure the gender mix within various levels of
the organisation. The Group is committed to
continually assessing and proactively monitoring
these diversity trends and advocates that every
candidate suitably qualified for a position has an
equal opportunity of appointment regardless of
gender, age, ethnicity or cultural background.
The Group opposes all forms of unlawful and
unfair discrimination. As at 31 December 2024
the Board comprised of four Directors, all of
whom were male. The Board has determined
that the composition of the current Board
Directors have an appropriate range of
qualifications and expertise in the industries
and the jurisdictions in which the Group
operates, can understand and competently
deal with current and emerging business
matters and can effectively assess the
performance of management.
The Board is aware that many studies suggest
that greater gender diversity at Board and
management level creates a positive force for
driving corporate performance as qualified
and
committed
directors
with
different
backgrounds, experiences and knowledge will
likely enhance corporate performance.
The Board remains focused on resolving the
gender imbalance by continuing to identify a
pipeline of suitably qualified candidates with
careful consideration of those who strengthen
the
Board
skills
matrix.
The
Company
continues to support the Australian Institute of
Company Director’s Board diversity initiatives
and will continue to evolve its Board in
alignment with the Company’s needs and
diversity best practice.
The following senior positions within the
Company were held by a female employee at
31 December, 2024:
Head of Investor Relations and Corporate
Communications.
Human
Resources
and
Administrative
Director of Sociedade Mineira Do Lulo Lda
11
31 December 2024
31 December 2023
GENDER
REPRESENTATION
FEMALE
MALE
FEMALE
MALE
Number
%
Number
%
Number
%
Number
%
Board representation
0
0
4
100
0
0
3
100
Group representation
43
6
673
94
130
13
881
87
Performance review
Board and Board committees
A
review
of
the
Board’s
performance
and
effectiveness is conducted annually and the
performance of individual Directors is undertaken
regularly. The Board has the discretion for these
reviews to be conducted either independently or on
a self-assessment basis.
The review focuses on:
Strategic alignment and engagement;
Board composition and structure;
Processes and practices;
Culture
and
dynamics;
relationship
with
management; and
Personal effectiveness.
A
review
of
the
Board’s
performance
and
effectiveness in respect of the year ended 31
December 2024 was conducted.
Managing Director and senior executives
Performance evaluations of the Managing Director
and senior executives is undertaken annually
through a performance appraisal process which
involves reviewing and assessment of performance
against agreed corporate objectives and individual
key performance indicators or deliverables. A
review of the Managing Director’s performance and
effectiveness in respect of the year ended 31
December 2024 was not conducted due to the
Managing
Director
being
appointed
on
21
November 2024.
Retirement and rotation of directors
Retirement and rotation of directors are
governed by the Corporations Act 2001 and the
Constitution of the Company. There must be an
election at each annual general meeting of the
Company. The Constitution provides that the
following directors must retire at each annual
general meeting;
• any director required to retire under clause
14.4(b) of the Constitution, being the provision
relating to the three year limit on the term of a
director;
• any director required to submit for election
under clause 14.2(c) of the Constitution, being
the provision requiring casual vacancies to retire
at the next annual general meeting following
their appointment; or
• if no person is standing for election or re-
election under the above, then the director that
has been in office the longest will seek re-
election.
Mr Miles Kennedy, who has served as a Director
since 19 September 2008 and was last elected
on 30 May 2023, will retire by rotation and seek
re-election at the upcoming annual general
meeting expected to be held on 29 May 2025.
12
Independent professional advice
Each Director of the Company or a controlled entity
has the right to seek independent professional
advice at the expense of the Company or the
controlled entity. However, prior approval of the
Chairman is required which will not be unreasonably
withheld.
Access to employees
Directors have the right of access to any employee.
Any employee shall report any breach of corporate
governance principles or Company policies to the
Chairman or as outlined under the Whistleblower
policy. If the breach is not rectified to the satisfaction
of the employee, they shall have the right to report
any breach to an independent Director without
further reference to senior executives of the
Company.
Directors’ and officers’ liability insurance
Directors’ and officers’ liability insurance is
maintained by the Company for the Directors and
senior executives at the Company’s expense.
Board meetings
The frequency of Board meetings and the extent of
reporting from management at Board meetings are
as follows:
A minimum of four scheduled meetings are to be
held per each financial year;
Other meetings will be held as required;
Meetings can be held where practicable by
electronic means;
Information provided to the Board includes all
material information related to the operations of
the Group including exploration, evaluation,
development and mining operations, budgets,
forecasts, cash flows, funding requirements,
investment
and
divestment
proposals,
new
business
development
activities,
investor
relations, financial accounts, sales and market
information, taxation, external audits, internal
controls, risk assessments, people and health,
safety and environmental reports, statistics and
new business; and
Once established or as necessary, the
Chairman of the appropriate Board sub-
committee or other meeting will report at
the
subsequent
Board
meeting
the
outcomes of that meeting.
The number of Directors’ meetings (including
meetings of committees of Directors where
applicable) and the number of meetings
attended by each of the Directors of the
Company during the financial year are set out
in the Directors’ Report.
Principle 2 Structure the Board to be
effective and add value
The names of the Directors of the Company
and their qualifications are set out in the
section headed “Information on Directors” in
the Directors’ Report.
The ASX Corporate Governance Council
guidelines recommend that the Board should
constitute a majority of independent Directors
and
that
the
Chairperson
should
be
independent.
As at 31 December 2024, the Board consisted
of four Directors of whom three were
considered independent being:
Mr Stuart Brown – (Non-executive Chair -
appointed 8 April 2024);
Mr
Ronnie
Beevor
–
(Non-executive
Director - appointed 8 April 2024); and
Mr
Miles
Kennedy
–
(Non-executive
Director - appointed as a director on 12
September 2008 and served as Executive
Director until 11 December 2014).
The Board considers that whilst Mr Kennedy
has served as a Director for a long period, he
remains independent from management and
substantial shareholders and is therefore able
to bring an independent judgement to bear on
issues before the Board and to act in the best
interests of the Company as a whole rather
13
than in the interests of an individual shareholder or
other party. Mr Alex Kidman (Managing Director -
appointed on 21 November 2024) does not meet the
criteria for an independent Director due to his
executive role.
Board skills and experience
The Company objective is to have an appropriate mix
of experience and expertise on the Board and
Committees so that the Board can effectively
discharge its strategic, corporate governance and
oversight responsibilities. The composition of the
Board has been structured so as to provide the
Company with an adequate mix of non-executive and
executive Directors with exploration, development
and mining industry knowledge, country specific
knowledge, technical, commercial, capital markets
and financial skills together with integrity and
judgment
considered
necessary
to
represent
shareholders and fulfil the business objectives of the
Group.
The Board Skills Matrix is an important driver to
formalise the director nomination processes and was
applied as a significant number of candidates were
considered for the recently appointed independent
non-executive director positions to complement the
existing skill sets on the Board and in alignment with
the Company’s needs and best practice.
The competencies that the current Board members
have formulated their analysis are based upon the
criteria judged as important by the Board given the
Company’s current stage of growth, in conjunction
with independent industry guidance as follows:
Resources Industry & Africa Experience -
experience in the resources industry, including
broad knowledge of exploration, operations,
project development, markets, shipping and
competition.
Diamond Industry & Marketing Experience -
specific experience in the diamond industry,
including an in-depth knowledge of exploration,
operations, project development, markets, cutting
and
polishing,
competitors
and
relevant
technology.
Strategy
–
identifying
and
critically
assessing the strategic opportunities and
threats to the organisation and developing
and implementing successful strategies in
context to an organisation’s policies and
business objectives.
Mergers and Acquisition – experience
managing,
directing
or
advising
on
mergers, acquisitions, divestments and
portfolio optimisations.
Finance – senior executive or other
experience in financial accounting and
reporting,
internal
financial
and
risk
controls,
corporate
finance
and
restructuring corporate transactions.
Risk Management - experience working
with and applying broad risk management
frameworks
in
various
countries,
regulatory
or
business
environments,
identifying key risks to an organisation,
monitoring risks and compliance and
knowledge
of
legal
and
regulatory
requirements.
Government
Relations
–
senior
management or equivalent experience
(particularly
transactional)
working
in
politically, culturally and regulatory diverse
business environments.
Capital
Projects;
Financing
/
Project
Management – experience with projects
involving
contractual
negotiations,
significant
capital
outlays,
procuring
project investment and securing partners
with long investment horizons.
Sustainable
Development
–
senior
management or equivalent experience in
economic,
social
and
environmental
sustainability and workplace health and
safety practices.
Previous Board Experience – serving on
boards of varying size and composition in
varying industries and for a range of
organisations.
Awareness
of
global
practices,
benchmarking,
some
international experience.
14
Skills
Directors holding this
skill
Resources industry and
Africa experience
4
Diamond industry and
marketing
4
Strategy
4
M&A
4
Finance
3
Risk Management
4
Government Relations
4
Capital Projects
/Financing/Project
Management
4
Sustainable Development
4
Previous board experience
4
Governance
4
Policy
4
Executive leadership
4
Remuneration
4
Governance
-implementing
the
high
standards of governance in a major
organisation that is subject to rigorous
governance standards and assessing the
effectiveness of senior management.
Policy -identifying key issues for an
organisation and developing appropriate
policy
parameters
within
which
the
organisation should operate.
Executive Leadership – experience in
corporate
structuring,
overseeing
strategic
human
capital
planning,
evaluating the performance of senior
management,
industrial
relations,
organizational change management and
sustainable success in business at a
senior level.
Remuneration
-
experience
in
remuneration
strategy,
remuneration
governance
frameworks,
Corporations
Act and employment law, performance
and incentive schemes.
This mix described in the Board skills matrix is based on
the Board composition as at 31 December 2024 as
follows:
15
Nomination of other Board members
Membership of the Board of Directors is reviewed on
an on-going basis by the Chairperson of the Board to
determine if additional core strengths are required to
be added to the Board in light of the nature of the
Group’s businesses and its objectives and diversity.
The Board currently performs the role of a
Nomination Committee given the Company’s size
and stage of growth. However this will be reviewed to
ensure there is a continued emphasis on board
membership which aligns with the Company’s
corporate culture and addresses independence and
diversity.
The Board has focused on a measured process to
ensure it maintains a strong, well-credentialed Board
to oversee the Company’s next growth phase.
Director induction and ongoing professional
development
The Company does not have a formal induction
program for Directors but does provide Directors with
information detailing policies, corporate governance
and various other corporate requirements of being a
director of an ASX listed company. To the extent
required, new Directors are provided access to the
diamond industry centres and given audiences with
key management, industry participants as part of the
induction. Due to the size and nature of the
business, Directors are expected to already possess
a level of both industry, technical, corporate and
commercial expertise before being considered for a
directorship of the Company. Directors are provided
with the opportunity to access employees of the
business and any information as they require on the
business including being given access to regular
operational updates, industry update, news articles
and publications where considered relevant.
Principle 3 Instill a culture of acting lawfully,
ethically and responsibly
Directors, officers, employees and consultants to the
Group are required to observe high standards of
behaviour
and
business
ethics
in
conducting
business on behalf of the Group and they are
required to maintain a reputation of integrity on the
part of both the Group and themselves. The Group
does not contract with or otherwise engage any
person or party where it considers integrity may be
compromised.
Lucapa recognises the importance of its people in
building a strong and successful organisation. To
achieve this, Lucapa has focused on developing the
right culture across the organisation, which is
strongly based on a vision, mission and values
communicated in our teams in Australia and Africa
to ensure they know what is expected of them, both
operationally and behaviourally, and are recognised
for their good work.
Code of Conduct
The Company’s Code of Conduct policy has been
endorsed by the Board and applies to all Directors,
officers, employees and consultants.
Whistleblower policy
In line with the Code of Conduct, the Company has
a Whistleblower policy that ensures that all eligible
whistleblowers who make a report in good faith can
do so without fear of intimidation, disadvantage or
reprisal.
Anti-Bribery and Corruption and Anti-Slavery
policies
The Company’s Anti-Bribery and Corruption and
Anti-Slavery policies have been endorsed by the
Board and applies to all Directors, Group
employees, consultants, contractors and third-
parties.
Conflicts of interest
Directors are required to disclose to the Board
actual or potential conflicts of interest that may or
might reasonably be thought to exist between the
interests of the Director or the interests of any other
party in so far as it affects the activities of the Group
and to act in accordance with the Corporations Act if
the conflict cannot be removed or if it persists. That
involves taking no part in the decision-making
process or discussions where a conflict does arise.
16
Trading in Company securities
Directors are required to make disclosure of
any trading in the Company’s shares. The
Company policy in relation to share trading is
that Directors, key management personnel,
officers,
employees,
consultants
and
contractors
of
the
Group
(“Staff”)
are
prohibited to trade whilst in possession of
unpublished
price
sensitive
information
concerning the Group or within a certain
period of the release of results i.e. the
blackout period. That is information which a
reasonable person would expect to have a
material effect on the price or value of the
Company’s shares.
Staff must receive authority to acquire or sell
shares from the Chairman or the Company
Secretary prior to doing so to ensure that
there is no price sensitive information of
which
Staff
might
not
be
aware.
The
undertaking of any trading in shares by a
Director must be notified to the ASX.
Principle 4 Safeguard the integrity of
corporate reports
Lucapa has a financial reporting process
which includes quarterly, half year and full
year reports which are signed off by the
Board before they are released to the market.
The Company’s Continuous Disclosure policy
ensures that any corporate reports that are
released to the market that are not audited or
reviewed by an external auditor are reviewed
by the Board and appointed responsible
officers, which are the Managing Director,
Head of Investor Relations and Corporate
Communications, the Company Secretary and
Chief Financial Officer (or equivalent), to
verify the accuracy of information before
being released.
Given its current size, the Board does not have a
separate Audit Committee. However, it is intended
that a committee will be established comprised by
a majority of independent directors as the
Company
transitions
to
become
a
mid-tier
producer.
In the interim, the four Board members, who each
have
extensive
corporate,
commercial
and
financial expertise, manage the financial oversight
as well as advise on the modification and
maintenance of the Group’s financial reporting,
internal control structure, external audit functions,
and
appropriate
ethical
standards
for
the
management of the Group.
In discharging its oversight role, the Board is
empowered to investigate any matter brought to
its attention with full access to all books, records,
facilities, and personnel of the Group and the
authority to engage independent counsel and
other advisers as it determines necessary to carry
out its duties.
The Managing Director and Chief Financial
Officer (or equivalent) reports on the propriety of
compliance on internal controls and reporting
systems and ensures that they are working
efficiently and effectively in all material respects.
The Company has established procedures for the
selection, appointment and rotation of its external
auditor. The Board is responsible for the initial
appointment of the external auditor and the
appointment of a new external auditor when any
vacancy arises. Candidates for the position of
external auditor must demonstrate complete
independence from the Company through the
engagement period. The Board may otherwise
select an external auditor based on criteria
relevant to the Company’s and Group’s business
and circumstances. The performance of the
external auditor is reviewed on an annual basis by
the Board.
17
The Company’s external auditor attends each
annual general meeting and is available to
answer questions from shareholders relevant to
the conduct of the external audit, the preparation
and content of the Auditor’s Report, the
accounting policies adopted by the Company and
the independence of the auditor.
Principle
5
Make
timely
and
balanced
disclosure
The Company has adopted a formal policy
dealing with its disclosure responsibilities. The
Board has designated the Company Secretary
as the person responsible for overseeing and
coordinating disclosure of information to the
ASX as well as communicating with the ASX. In
accordance with the ASX Listing Rules the
Company immediately notifies the ASX of non-
public information:
•Concerning the Group that a reasonable person
would expect to have a material effect on the
price or value of the Company’s securities; and
•That would, or would be likely to, influence
persons who commonly invest in securities in
deciding whether to acquire or dispose of the
Company’s securities.
The policy also addresses the Company’s
obligations to prevent the creation of a false
market in its securities. The Company also
publishes other information to assist investors to
make an informed decision on its website.
The Managing Director has ultimate authority
and responsibility for recommending market
disclosure to the Board which, in practice, is
exercised in conjunction with the Board and
Company Secretary.
In addition, the Board will also consider whether
there are any matters requiring continuous
disclosure in respect of each and every item of
business that it considers.
Principle 6 Respect the rights of security
holders
The
Board’s
fundamental
responsibility
to
shareholders is to work towards meeting the
Company’s strategic objectives to add value for
them. The Board maintains an investor relation
program which will inform shareholders of all
major developments affecting the Group by:
•Preparing half yearly and yearly financial
reports;
•Preparing quarterly reports as to activities;
•Making announcements in accordance with the
listing rules and the continuous disclosure
obligations;
•Posting all the above on the Company’s website
once released to the ASX;
•Annually, and more regularly if required, holding
a
general
meeting
of
shareholders
and
forwarding
to
them
the
annual
report,
if
requested, together with notice of meeting and
proxy form; and
•Voluntarily releasing other information which it
believes is in the interest of shareholders.
The
Annual
General
Meeting
enables
shareholders to discuss the annual report and
participate in the meetings either by attendance
or by written communication. The Company
provides all shareholders with a Notice of
Meeting so they can be fully informed and be
able to vote on all resolutions at the Annual
General Meeting. Shareholders are able to
discuss any matter with the Directors and/ or the
auditor of the Company who is also invited to
attend the Annual General Meeting.
Shareholders have the option to receive all
Company and share registry communications
electronically and may also communicate with the
Company by contacting the Company via email.
18
18
Principle 7 Recognise and manage risk
The Board has adopted a Risk Management
policy, which sets out the Group’s risk profile.
Under the policy, the Board is responsible for
approving the Group’s policies on risk oversight
and
management
and
satisfying
itself
that
management has developed and implemented a
sound system of risk management and internal
control.
Under the policy, the Board delegate’s day-to-day
management of risk to the Managing Director,
who is responsible for identifying, assessing,
monitoring
and
managing
risks
with
other
executive management. The executive is also
responsible for updating the Group’s material
business risks to reflect any material changes,
with the approval of the Board.
In fulfilling the duties of risk management, the
executive has unrestricted access to Group
employees, contractors and records and may
obtain independent expert advice on any matter
they believe appropriate.
The Board does not have a separate Risk
Management Committee as the Board monitors
and reviews the integrity of financial reporting and
the Group’s internal financial control systems.
Management assesses the effectiveness of the
internal financial control on an annual basis and
table any concerns and/ or recommendations at
Board meetings where required.
In addition, the following risk management
measures have been adopted by the Board to
manage the Group’s material business risks:
Establishment of financial control procedures
and authority limits for management;
Approval of an annual budget;
Adoption of a compliance procedure for the
purpose of ensuring compliance with the
Company’s continuous disclosure obligations;
Adoption of a corporate governance manual
which contains other policies to assist the
Group
to
establish
and
maintain
its
governance practices; and
Compilation, maintenance and review of a
risk register to identify the Group’s material
business and operational risks and risk
management strategies for these risks. The
risk register is reviewed half yearly and
updated as required. The Executive reports
to the Board on material business risks at
each Board meeting.
The Board has required the executive to design,
implement and maintain risk management and
internal control systems to manage the material
business risks of the Group. The Board also
requires management to report to it confirming
that those risks are being managed effectively.
The Chief Financial Officer (or equivalent) has
provided
a
declaration
to
the
Board
in
accordance
with
section
295A
of
the
Corporations Act and has assured the Board that
such declaration is founded on a sound system
of risk management and internal control and that
the system is operating effectively in all material
respects in relation to financial risks.
The Board monitors the adequacy of its risk
management framework regularly to ensure that
it continues to be sound and deals adequately
with contemporary and emerging risks and that
the Company is operating with due regard to the
risk appetite set by the Board and discloses that
reviews have taken place at the end of each
reporting period.
19
Internal Audit
The Group does not have an internal audit function
as the Board believes the business is neither the
size nor complexity that requires such a function.
The Board is currently responsible for monitoring the
effectiveness of internal controls, risk management
procedures and governance.
Sustainability and Industry risks
The Group’s operations are and will continue to be
subject to a range of hazards and risks normally
incidental to exploring for, evaluating, developing and
mining diamond resources.
The Company and its subsidiaries have detailed risk
matrices which are regularly reviewed, and which
highlight critical risk factors that the Group faces at
any time. Principal risks to the business include,
amongst others, those relating to:
Macroeconomic factors, sovereign and partner
risk, global diamond market and diamond
demand and pricing;
The ability to raise capital and/ or required
additional funding for continued exploration,
evaluation, development and mining operations;
Operational issues such as severe weather
conditions, supply delays, major equipment
breakdowns and labour disputes;
The ability to replace resource and reserves as
they are depleted or become uneconomical and/
or achieve exploration success;
Environmental, health and safety and social
issues (see below); and
Retention and reliance on key executives.
As the Group expands its activities either within
existing projects or with the addition of new projects,
it is expected that the sustainability risks will change
accordingly.
The
Board
reviews
the
overall
sustainability of both the diamond business and
more specifically, the Group, in its normal course of
business.
Details of the Group’s sustainability activities and
strategic direction are set out in the ESG Report.
Environmental and Social Risks
The Group strives to operate in accordance
with the highest standards of environmental
practice and comply in all material respects
with
applicable
environmental
laws
and
regulations. Such regulations typically cover a
wide variety of matters including, without
limitation, prevention of waste, pollution and
protection
of
the
environment,
labour
regulations and worker safety. The Company
may also be subject under such regulations to
clean-up costs and liability for toxic or
hazardous substances which may exist on or
under any of its properties or which may be
produced as a result of its operations.
The Company has adopted formal Anti-
Bribery and Corruption and Anti-Slavery
policies which apply to all staff, consultants
and contractors that work with the Group. The
policies seek to ensure that the Company
operates in an ethical and transparent manner
in all business dealings and that the Company
has a Whistleblower policy and mechanism for
staff to alert management should any issues
or incidents occur.
The Board monitors the adequacy of its
environmental and social risk management to
ensure that it continues to be sound and deals
adequately with contemporary and emerging
risks in the respective jurisdictions the Group
operates within.
Principle 8 Remunerate fairly and
responsibly
The Company does not have a Remuneration
Committee given the size of the Board.
However it is intended that a committee will be
established comprised by a majority of
independent
directors
as
the
Company
transitions to become a mid-tier producer. In
the interim, the Board monitors and reviews
the remuneration level and policy of the
Group.
20
Details of the remuneration policy are contained in
the Remuneration Report included in the Directors’
Report. The Company’s policy is to remunerate non-
executive
Directors
at
a
fixed
fee
for
time,
commitment, and responsibilities. Any services over
and above their agreed responsibility is remunerated
separately
on
normal
commercial
terms.
Remuneration for non-executive Directors is not
linked to individual performance. The Company may
grant options and performance rights to non-executive
Directors. The grant of options and performance is
designed to recognise and reward efforts as well as
to provide non-executive Directors with additional
incentive to continue those efforts for the benefit of
shareholders and the Group.
The maximum aggregate amount of fees (including
superannuation payments) that can be paid to non-
executive Directors is subject to approval by the
shareholders at a general meeting.
Pay and rewards for executive Directors and senior
executives consists of a base salary, performance
and retention incentives. Medium and long-term
performance incentives may include options and/ or
performance rights granted at the discretion of the
Board and subject to obtaining the relevant approvals.
The grant of options and/ or performance rights is
designed to recognise and reward efforts as well as
to provide additional incentives and retentions and
may be subject to the successful completion of
performance hurdles. Executives are offered a
competitive level of base pay at market rates (for
comparable
companies
and
industry)
and
are
reviewed annually to ensure market competitiveness.
The Company’s policy is not to allow transactions in
associated
products
which
limit
the
risk
of
participating in unvested elements of equity-based
compensation plans.
The Directors are not entitled to a termination bonus
or retirement benefit (other than for superannuation).
The Directors’ contracts contain a service bonus in
the event of a takeover or change of control, subject
to shareholder approval where required.
21
Director's Report
22
Directors’ Report
The Directors present their report together with the financial report of Lucapa and the Group for the financial
year ended 31 December 2024 and independent auditor’s report thereon.
Directors
The Directors of the Company at any time during or since the end of the financial period are:
Name
Position
Period of directorship
S Brown
Non-Executive Chairman
Appointed 8 April 2024
A Kidman
Chief Executive Officer/ Managing Director
Appointed 21 November 2024
R Beevor
Non-Executive Director
Appointed 8 April 2024
M Kennedy
Non-Executive Director
Previous Non-Executive Chairman
Effective from 8 April 2024
Effective to 8 April 2024
Appointed 12 September 2008
N Selby
Previous Non-Executive Director
Previous Chief Executive Officer/ Managing Director
Interim Chief Executive Officer/ Managing Director
Previous Chief Operating Officer/ Executive Director
Resigned 31 December 2024
Effective to 21 November 2024
Effective from 5 October 2023
1 August 2023 to 4 October 2023
Appointed 4 September 2017
R Stanley
Previous Non-Executive Director
Resigned 8 April 2024
Appointed 26 July 2018
The qualifications, experience and other directorships of the Directors in office at the date of this report are:
Stuart Brown
Mr Brown has over 30 years of diamond knowledge
and Africa experience as the former Interim CEO and
CFO of major diamond producer De Beers with
which he had a 20-year career. Stuart is a former
CEO of both Firestone Diamonds and Mountain
Province Diamonds. Stuart is a non-executive
director of London-listed Ukrainian iron-ore miner
Ferrexpo Plc and a member of the audit and
remuneration committees. Stuart is also a non-
executive director and chair of the audit committee
of Digby Wells Environmental Holdings Limited, a
provider of ESG consulting services to the mining
industry. He currently also runs a consulting
business focused on the mining and luxury goods
sectors. Stuart holds a Bachelor of Accounting
Science degree from the University of South Africa
and lives in Herefordshire, England.
Alex Kidman
Mr Kidman is a geologist with 20 years’ experience
in the diamond mining industry. He started his
career exploring for alluvial diamonds in Angola and
joined the Gem Diamonds group in 2006 where he
held a number of technical and project management
roles throughout the company. He subsequently
settled in Australia working for the Ellendale mine
and consulting on other Australian diamond projects
before joining Lucapa in 2017. Mr Kidman has
experience operating in multiple jurisdictions
around the world including Angola, DRC, Botswana,
Indonesia, Australia, South Africa and Lesotho. He
holds a Masters in Science (Geology) from the
23
23
University of Birmingham and is a member of the
Australasian Institute of Mining and Metallurgy. He
lives in Perth, Western Australia.
Ronnie Beevor
Mr Beevor has 40 years of collective experience that
spans investment banking and mining. Ronnie is a
former head of investment banking of Rothschild
Australia and has served on the boards of many
mining companies in Australia and internationally.
He is currently a director of Canadian iron-ore miner
Champion Iron Limited, a director of Canadian
explorer Mont Royal Resources and serves as
chairman of Felix Gold, a gold explorer with assets in
the United States. Ronnie qualified as a chartered
accountant in England and Wales, holding an
honours
degree
in
Philosophy,
Politics
and
Economics from Oxford University. Ronnie resides
in Sydney, Australia.
Miles Kennedy
Mr Kennedy has held directorships of Australian
listed companies for more than 30 years. He was
previously Chairman of
companies including
Sandfire Resources, Kimberley Diamond Company,
Blina Diamonds, Macraes Mining Company, MOD
Resources and Auris. He has extensive experience in
the management of public companies with specific
emphasis in the resources industry. He lives in
Dunsborough, Western Australia.
Nick Selby (resigned 31 December 2024)
Mr Selby is an extraction metallurgist with over 35
years' experience in the mining industry. He began
his career with De Beers, where he spent 19 years in
a range of technical roles. Mr Selby joined Gem
Diamonds in 2005, where he was responsible for
establishing diamond projects in various countries
including Angola, Australia, DRC, Central African
Republic, Indonesia, Lesotho and Botswana. He lives
in Perth, Western Australia.
Ross Stanley (resigned 8 April 2024)
Mr Stanley has an extensive background in the
resources
industry
in
Australia
and
Africa,
specialising in drilling and related exploration and
mining services. He was the founder and Managing
Director of ASX-listed Stanley Mining Services prior
to its merger with Layne Christensen in 1997. Mr
Stanley was also a major shareholder and Non-
Executive director of Perth-based gold miner
Equigold NL, which was taken over by Lihir Gold for
A$1.1 billion in 2008. He is a Non-Executive director
of ASX listed Emerald Resources NL. He lives in
Dunsborough, Western Australia.
Company Secretary
Daniel Coletta
Mr Coletta was appointed Company Secretary on 31
May 2024 and holds a Bachelor of Commerce degree
from the University of Western Australia. He is a
Member of the Institute of Chartered Accountants,
an Associate of the Governance Institute of Australia
and the Chartered Governance Institute. Mr Coletta
currently holds the position of company secretary
with a number of other ASX listed companies and has
experience in accounting and administration, capital
raising and ASX Compliance and regulatory
requirements.
Mark Clements (resigned 31 May 2024)
Mr Clements was appointed Company Secretary on
2 July 2012. Mr Clements holds a Bachelor of
Commerce degree from the University of Western
Australia and is a Fellow of the Institute of Chartered
Accountants of Australia, a Fellow of the Governance
Institute of Australia and member of the Australian
Institute of Company Directors. Mr Clements has
experience in corporate governance, finance,
accounting and administration, capital raising, ASX
compliance and regulatory requirements.
24
24
Directors’ Meetings
The number of Directors’ meetings and the number of meetings attended by each of the Directors of the Company
during the financial year are:
Director
Meetings attended
Number of meetings held during
Directors’ appointment
S Brown
5
5
M Kennedy
6
6
N Selby
6
6
R Beevor
5
5
R. Stanley
1
1
A Kidman
1
1
Mine in Lesotho in 2024. It also did not renew its
100% owned exploration asset in Botswana (Orapa
Area F) in 2024. The board has decided to sell its
80% share in the Brooking lamproite diamond
exploration tenements in Western Australia held
through its wholly owned subsidiary Brooking
Diamonds Pty Ltd.
Nature of Operations and Principal Activities
Lucapa Diamond Company is a diamond miner and
explorer with assets in Africa and Australia. It has a
40% stake in Sociedade Mineira do Lulo (“SML”) the
operator of the Lulo Alluvial Mine in Angola and a
39% stake in the Lulo Kimberlite Exploration Joint-
Venture. The Company also owns the Merlin
Diamond Project in the Northern Territory of
Australia through its wholly owned subsidiary
Australian Natural Diamonds Pty Ltd.
In 2024, following a strategic review by the newly
restructured board, the Group took the decision to
divest non-core assets to streamline the portfolio.
The Company divested its 70% stake in the Mothae
Operating and Financial Review
Overview
Lucapa is a producer of large and high-quality
diamonds from its Lulo Alluvial Mine (“SML”) in
Angola, which attract the highest price per carat for
alluvial diamonds globally.
The Company’s 100% owned subsidiary, Australian
Natural Diamonds Pty Ltd acquired the Merlin
Diamond Project (“Merlin”) in the Northern
Territory in 2021. In November 2024, Lucapa
released a production target, detailing the re-start
plan for the Merlin Diamond Mine.
Lucapa is also advancing exploration and evaluation
activities on two projects, in Angola and in Australia.
The most advanced of these programs is the
prospective Lulo Kimberlite Exploration Joint
Venture in Angola exploring for the primary source
of the large, high-value alluvial diamonds regularly
recovered at Lulo. Exploration at Merlin also
commenced in 2024 to detect kimberlite and base
metal targets. An advanced electromagnetic (EM)
survey was flown over the tenements, the first
modern EM survey carried out in 25 years.
25
25
2024 Group Highlights
(figures exclude Mothae unless stated):
Financial
•
Rough diamond revenue: US$54.5 million
(A$82.8 million) on a 100% basis at an
average price of US$1,980 per carat;
•
EBITDA: US$5.9 million (A$8.9 million) on
100% basis; and
•
Repatriation of US$2.5 million (A$3.8
million) in capital loan repayments and SML
dividends.
Operations
•
45,180 carats recovered on a 100% basis
from Lulo and Mothae;
•
Lulo recovered 25,341 carats and sold
27,364 carats in 2024;
•
Lulo recovered 5 +100 carat diamonds in
2024;
•
Mothae recovered a total of 19,839 carats to
31 July;
•
Mothae sold 19,798 carats at an average
price per carat of US$515 to 31 July, 2024;
•
A plan for the re-start of production at Merlin
was announced; and
•
Improved safety performance at Lulo.
Exploration
•
Lucapa initiated an exploration program at
Merlin to increase the kimberlite resources
and potentially identify other minerals
including base metals; and
•
The Lulo Kimberlite Bulk Sampling Program
processed a total of 22 samples in 2024.
Corporate:
•
Stuart Brown appointed Non-executive
Chairman;
•
Ronnie Beevor appointed Non-executive
Director;
•
Miles Kennedy stood down as Chairman to
become Non-executive director;
•
Nick Selby stepped down as CEO and MD for
health reasons with Alex Kidman appointed
CEO and MD;
•
Strategic review resulted in divestment of
Mothae Mine in Lesotho and non-renewal of
Orapa Area F exploration licence in
Botswana; and
•
Lucapa initiated a capital raise including a
Placement and Share Purchase Plan.
Diamond market
Challenging and uncertain market conditions
continued for the diamond industry in 2024 as the
gap between supply and demand of natural
diamonds widened.
These market dynamics impacted on the price of
rough and polished diamonds which continued to
soften. Other contributing factors to the weakness in
diamond prices, were geopolitical tensions and high
finance costs.
The mid-stream pipeline remained overstocked in
2024 as lab-grown diamonds continued to capture
market share. The industry also felt the impact from
the lack in Chinese demand for diamonds as
domestic stimulus measures did little to increase
discretionary spend.
In the second half of the 2024 calendar year, some of
the large diamond mining companies curtailed
rough supply to try to bring the market back into
balance. This was done in the hope of seeing price
recovery
once
midstream
inventories
were
depleted.
Demand for large diamonds over 10.8 carats
remained robust in 2024, with smaller diamonds
suffering greater price pressure with some sellers
forced to discount inventory by more than 10
percent at year end.
26
Financial Review
The Group results from continuing operations for
the year were a loss after tax of US$5.5 million
(2023: profit of US$2.1 million).
Lucapa’s share of SML’s after tax earnings was a loss
of US$0.9 million, compared to a profit of US$4.2
million in 2023. SML reported an EBITDA of US$8.1
million (2023: US$23.6 million) for the year, which
was impacted by flooding caused by a severe end to
the wet season and poor management of a
temporary
river
crossing
by
a
government
contractor tasked with upgrading the main highway
from Luanda to Saurimo that crosses through the
Lulo concession. This impacted the mine’s ability to
mine in planned areas throughout the year and led
to lower carat recoveries and revenues during the
second half of 2024.
Corporate expenses for the year were US$2.8
million, down US$0.4 million on the prior year
mainly due to savings in employment expenses.
The profit after tax from discontinued operations for
the year was US$3.9 million (2023: loss of US$19.4
million) and includes the trading results of Mothae
until its effective disposal on 31 July 2024 as well as
the impairment of previously capitalised exploration
andevaluation cost of the Brooking and Botswana
projects.
The consolidated loss after tax from all operations
was US$1.5 million (2023: US$17.2 million)
consisting of a loss attributable to members of the
Company of US$20.5 million (2023: US$9.1 million)
and a gain of US$18.9 million (2023: loss of US$8.2
million) allocated to non-controlling interests with
the disposal of Mothae.
During the year, Lucapa received US$0.7 million
against the SML receivable as well as half of the US$4
million (US$1.8 million, net of 10% withholding tax)
dividend declared by SML in 2023. The balance of
US$2 million was delayed due to cash flow
constraints at SML and was outstanding as at 31
December 2024.
The Company continued during the year with
pursuing development options for the Merlin project
and incurred US$1.8 million on related studies, site
maintenance and exploration work. A short-term
loan of US$0.6 million was arranged in this regard
from New Azilian Pty Ltd, an entity associated with
former non-executive Director Ross Stanley.
Following the delay in the second half of the SML
dividend as per above, Lucapa undertook a gross
US$1.9 million (A$ 3 million) capital raising through
a two-tranche share placement and Share Purchase
Plan (A$0.4 million) in terms of which US$0.6m (net
of fees) were received during the period. The funds
for the second tranche, which were subject to
shareholder approval, was received after the
reporting date.
The Group had a cash balance of US$0.2 million at 31
December 2024 (31 December 2023: US$1.7
million).
Group net assets as at 31 December 2024 amounted
to US$64.8 million (31 December 2022: US$71.3
million).
The Board has considered the financial position and
prospects of the Group as set out in the basis of
preparation of the financial statements and is
satisfied that the going concern basis of preparation
of the financial statements is appropriate.
Additional performance measures
To enable users of the Financial Report to gain a
better insight into the extent and nature of activities
of the Group, the Board has decided to provide the
following financial disclosures, in addition to the
AIFRS requirements:
•
•
a pro-forma Consolidated Statement of Profit &
Loss by entity including the full results of SML
(refer page 29); and
a summary of the attributable EBITDA by entity
(refer page 30).
Lucapa is extensively involved in the operating
activities of SML, has funded the development and
has a 40% ownership interest in the mine. It
therefore provides useful information to incorporate
SML’s results on a consolidated basis and providing
an alternative view of the make-up of the profit after
tax attributable to owners of the Company.
27
The additional information is not presented in terms
of AIFRS but reconciliations have been prepared to
the statutory Operating Profit/ Loss per the Interim
Consolidated Statement of Profit or Loss as set out
below.
On the pro-forma consolidated basis as per above,
the Group recorded an EBITDA from continuing
operations of US$5.9 million (2023: US$20.5 million)
for the year and a loss after tax from continuing
operations of US$6.5 million (2023: profit of US$8.9
million). On a per carat sold basis rough diamond
revenue from continuing operations decreased from
US$2,700 in 2023 to US$1,980 for the current period
whilst
EBITDA
from
continuing
operations
decreased from US$714 to US$214 per carat.
On an attributable basis, the Group recorded an
EBITDA from continuing operations of US$1.0
million (2023: US$6.3 million) for the year. Per carat
sold, attributable rough diamond revenue from
continuing operations decreased as above and
EBITDA from continuing operations decreased from
US$548 to US$92.
28
Pro-forma consolidated earnings overview (including SML)
Consolidated Statement of Profit or Loss
Consolidated EBITDA Reconciliation
* Results converted to A$ at an average rate US$: A$ exchange rate for the period of 0.658 (2023:0.644)
SML
Corporate & other
Group
Group*
2024
2023
2024
2023
2024
2023
2024
2023
US$000s
A$000s
CONTINUING OPERATIONS
Rough revenue & polished margin
54,468
78,556
-
-
54,468
78,556
82,778
121,921
Royalty & selling costs
(5,917)
(8,496)
-
-
(5,917)
(8,496)
(8,992)
(13,186)
Operating costs
(40,446)
(46,423)
(2,237)
(3,174)
(42,683)
(49,597)
(64,868)
(76,976)
EBITDA
8,105
23,637
(2,237)
(3,174)
5,868
20,463
8,918
31,759
Depreciation
(9,497)
(8,862)
(158)
(159)
(9,655)
(9,021)
(14,673)
(14,001)
Rehabilitation
(1,100)
-
-
-
(1,100)
-
(1,672)
-
Net finance cost
-
-
(34)
(271)
(34)
(271)
(52)
(421)
Fx & FV adjustments and other
-
1,787
(1,562)
491
(1,562)
2,278
(2,374)
3,536
Profit/ (loss) before income tax
(2,492)
16,562
(3,991)
(3,113)
(6,483)
13,449
(9,853)
20,873
Income tax
281
(4,243)
(310)
(217)
(29)
(4,460)
(44)
(6,922)
Profit/ (loss) after income tax
(2,211)
12,319
(4,301)
(3,330)
(6,512)
8,989
(9,897)
13,951
DISONTINUED OPERATIONS (Mothae, Brooking & Orapa)
Profit from discontinued operation, after tax
-
-
3,682
(19,930)
3,682
(19,930)
5,596
(30,932)
Profit for the period
(2,211)
12,319
(619)
(23,260)
(2,830)
(10,941)
(4,301)
(16,981)
Attributable to:
Owners of the Company
(884)
4,928
(19,603)
(13,977)
(20,487)
(9,049)
(31,135)
(14,045)
Non-controlling interests
(1,327)
7,391
18,984
(9,283)
17,657
(1,892)
26,834
(2,936)
(2,211)
12,319
(619)
(23,260)
(2,830)
(10,941)
(4,301)
(16,981)
Per carat sold:
US$
A$
Rough diamond revenue
1,980
2,700
-
-
1,980
2,700
3,008
4,190
EBITDA
296
825
-
-
214
714
326
1,109
2024
2023
US$000
Operating loss as per statement of profit or loss
(5,133)
262
Remove equity accounted earnings:
SML equity accounted income
885
(4,195)
Add consolidated earnings (100%):
SML EBITDA
8,105
23,637
Add back non-cash items:
Foreign exchange translation
1,562
32
LOM depreciation and impairment
158
159
Mothae - intergroup transactions
291
568
Consolidated EBITDA
5,868
20,463
29
Attributable performance overview
Attributable EBITDA by entity
Attributable EBITDA Reconciliation
* Results converted to A$ at an average rate US$: A$ exchange rate for the period of 0.658 (2022:0.644)
SML
(40%)
Corporate & other
(100%)
Group
Group*
2024
2023
2024
2023
2024
2023
2024
2023
US$000s
A$000s
Rough revenue & polished margin
21,787
31,422
-
-
21,787
31,422
33,111
48,768
Royalty & selling costs
(2,367)
(3,398)
-
-
(2,367)
(3,398)
(3,597)
(5,274)
Operating costs
(16,178)
(18,569)
(2,236)
(3,176)
(18,414)
(21,745)
(27,985)
(33,749)
EBITDA
3,242
9,455
(2,236)
(3,176)
1,006
6,279
1,529
9,745
Per carat sold:
US$
A$
Rough diamond revenue
1,979
2,700
-
-
1,979
2,699
3,008
4,190
EBITDA
296
825
-
-
92
548
140
850
2024
2023
US$000
Operating loss as per statement of profit or loss
(5,133)
262
Eliminate intergroup entries:
Mothae - intergroup transactions
291
568
Add back non-cash items:
Foreign exchange translation
1,562
32
LOM depreciation and impairment
158
159
SML depreciation, rehabilitation and tax
4,128
5,258
Attributable EBITDA
1,006
6,279
30
Review of Financial Condition
Given the Group’s mix of mining, evaluation and
exploration assets, and given their various stages of
development, the Group may require funding for
continued exploration, evaluation, development
and/ or mining activities. To the extent that
sufficient cash is not generated by the Group’s
activities or mining operations for the payment of
loan, interest and/ or dividends, funding will be
required.
As a result of the current general economic
uncertainties, and the potential unknown future
impact on the assumptions contained in the Group’s
cash flow forecasts over the next 12 months, the
Directors recognise that the Group may have to
source funding solutions in order to ensure the
realisation of assets and extinguishment of liabilities
as and when they fall due.
The ability of the Group to continue to pay its debts
as and when they fall due for the 12-month period
from the date the financial report is signed is
dependent on:
•
The Group’s staff, operations, partners and the
global diamond industry not being adversely
impacted by the economic environment or
Russia/ Ukraine conflict, thereby impacting key
forecast assumptions and scheduled loan,
interest and/ or dividend payments;
•
The Group, as required, successfully sourcing
equity,
raising
new
debt
facilities
with
financiers;
•
The Group continuing to achieve success with its
exploration and development projects, such as
the Lulo kimberlite exploration program in
Angola and Merlin mine development in
Australia;
•
The continued achievement of targeted cash
operating margins at SML; and
•
The current Mining Investment Contract for the
Lulo Kimberlite JV being renewed in 2025.
The Directors believe that the going concern basis is
appropriate for the preparation of the financial
statements due to the following reasons:
•
The diamond market is relatively stable for
higher value production despite recent volatility
experienced in the overall market;
•
The book value of the Group’s assets exceeds its
liabilities by US$64.8 million;
•
The Group has historically been successful in
raising equity for the furtherance of its projects
and under ASX Listing Rule 7.1 the Company has
the capacity to place securities to raise equity:
and
•
The Group has historically been successful in
raising and restructuring debt facilities.
The
above
conditions
represent
a
material
uncertainty that might cause significant doubt about
the ability of the Company to continue as a going
concern. Should the Company be unable to continue
as a going concern it may be required to realise its
assets and extinguish its liabilities other than in the
normal course of business and at amounts different
to those stated in the financial statements. The
financial statements do not include any adjustments
relating to recoverability and classification of asset
carrying amounts or to amounts and classification of
liabilities that might result should the Company be
unable to continue as a going concern.
Significant Changes in the State of Affairs
General
Challenging market conditions continued for the
diamond industry in 2024 although this was offset to
a certain extent by strong demand for diamonds in
excess of 10.8 carats.
Angola
The alluvial mining operations at Lulo were
impacted during the year by flooding caused by a
severe end to the wet season and management of a
temporary
river
crossing
by
a
government
contractor tasked with upgrading the main highway
that crosses through the Lulo concession. This
impacted the mine’s ability to follow the original
mine plan throughout the year and led to lower carat
recoveries and revenues during the second half of
2024, resulting in the mine underperforming against
internal targets and prior years in terms of
recoveries and revenue.
31
The Kimberlite Bulk Sampling program to locate the
source(s) of the alluvial diamonds at Lulo was
continued during the year.
The current Mineral Investment Contract (MIC) for
the Kimberlite JV expired in May 2024 but has been
extended while the new MIC is being finalised and
implemented. Under the new MIC Lucapa will obtain
a majority stake in the Joint-Venture.
Lesotho
The Board decided to dispose of its 70% stake in the
Mothae mine following a strategic review of the
Group’s assets. The sale, to a locally owned business
in Lesotho was concluded effective at 31 July2024.
Australia
NORTHERN TERRITORY
Following the suspension of the Merlin Diamond
Project Feasibility Study during 2023, a low-cost,
smaller-scale
pathway
to
development
was
developed in 2024. The Group is currently in the
process of considering alternative sources of funding
for the plan.
WESTERN AUSTRALIA
Following an extensive program conducted in 2023,
further targets were selected for testing during the
current year and results from drilling and
geochemical and heavy mineral samples were
announced to the ASX on 2 April 2024. Certain
targets/areas of interest were identified but require
further work and the Board has put the future of
Brooking under review.
Botswana
A drilling program was conducted during H1 to
confirm if kimberlite was present in a geophysical
target at the project. None was observed from the
results and therefore no further work was planned.
The exploration licence was allowed to lapse in June
2024.
Corporate
In February 2024, a general meeting of shareholders
approved a 1 for 5 share consolidation which was
completed in March 2024.
A short-term loan of US$0.6 million was arranged
during the year from New Azilian Pty Ltd, an entity
associated with former non-executive Director, Ross
Stanley, for purposes of advancing exploration work
at Merlin.
In December 2024, Lucapa undertook a gross US$1.9
million (A$ 3 million) capital raising through a two-
tranche share placement in terms of which US$0.6m
(net of fees) were received during the period. The
funds for the second tranche and the Share Purchase
Plan, which were subject to shareholder approval,
were received after the reporting date.
Business Risks
Diamond prices and marketability
The ultimate profitability of the Company’s
operations will be dependent upon the market price
and marketability of diamonds. There is a risk that a
profitable market may not exist for the sale of
diamonds produced by the Company.
Commodity prices, including diamond prices
fluctuate widely and are affected by numerous
factors beyond the control of the Company. General
economic factors as well as the world supply of
mineral commodities in general, the stability of
exchange rates and political developments can all
cause significant fluctuations in diamond prices. The
prices of mineral commodities have fluctuated
widely in recent years and future diamond price
declines could cause commercial production to be
uneconomic, thereby having a material adverse
effect on the Company’s business, financial condition
and results of operations.
Moreover, resource and reserve estimates and
studies using different diamond prices than the
prevailing market price could result in material
write-downs of the Company’s investment in the
assets and even a reassessment of the economic
feasibility of the Company’s projects which could
result in putting one or more projects on care and
maintenance and slowing down operations until
there is a change in diamond prices. Despite the high
quality of the diamond production from the
Company’s operation, an increase in the acceptance
of manufactured (synthetic or lab-grown) gem-
quality diamonds for the jewellery industry could
negatively affect the market for natural stones.
32
Sovereign risks
In addition to its activities in Australia, the Company
is also involved in operations in Angola and may
explore other opportunities in other countries in the
future.
Whilst the Directors are of the opinion that the
democratic and regulatory systems in those
countries are relatively stable, the Company may be
adversely affected by changes in economic, political,
judicial, administrative, taxation or other regulatory
factors. There can be no assurance that the political
environment in these jurisdictions will continue and
this could materially adversely affect the Company’s
prospects, operations, financial condition and
results of operations.
The Company’s projects and businesses may be
adversely impacted by acts of terrorism or war.
While the Company will undertake all reasonable
due diligence in assessing the risks of terrorism and
war in the countries and regions in which it invests,
the risks of acts of terrorism and war cannot be fully
mitigated.
Other risks and uncertainties include, but are not
limited to, high rates of inflation, labour unrest, mass
migration, pandemics, shortages of food, water,
currency exchange fluctuations, limitations or
delays in repatriation of profits, renegotiation or
nullification of existing licences, changes in taxation
policies, currency controls and regulations that
favour or require the awarding of contracts to local
contractors or require foreign contractors to employ
citizens, or purchase supplies from, a particular
jurisdiction.
The occurrence of any of these risks or any material
changes in government policies, attitude or
legislation
that
affect
foreign
investment,
repatriation of foreign currency, taxation or mineral
exploration, development or mining activities, may
adversely affect the viability and profitability of the
Company’s assets and operations in Angola or other
southern African jurisdictions in a highly material
manner. Failure to comply strictly with applicable
laws, regulations and local practices relating to
mineral tenure and development, could result in
loss, reduction or expropriation of entitlements.
Industry profitability can be affected by changes in
government within Angiola, South Africa, Australia
and elsewhere, which are not within the control of
the Company. The Company’s activities are subject
to extensive laws and regulations controlling not
only the activities of the Company, and the possible
effects of those activities on the environment and on
the interests of local inhabitants, among other
things.
Licences and permits from regulatory authorities
are required for many aspects of the Company’s
activities. There is no guarantee that the required
licences in Angola or Australia will continue to be
extended past the current expiry dates and this
could materially affect the Company’s prospects,
operations, financial condition and results of
operations.
Whilst the Company is satisfied that it has taken
reasonable measures to ensure an unencumbered
right to explore, develop its licence areas in Angola
and Australia some of these countries are subject to
greater risks than more developed markets,
including significant legal, economic and political
risks. Title to mining properties in Angola and
Australia is subject to potential litigation by third
parties claiming an interest in them and the failure
to comply with all applicable laws and regulations,
including failure to pay taxes, meet minimum
expenditure requirements or carry out and report
assessment work may invalidate title to mineral
rights held by the Company.
Regulatory delays
The business of mineral exploration, project
evaluation, development, mining and processing is
subject to various national and local laws and plans
relating
to,
amongst
others,
licencing
and
maintenance of title; environmental consents;
taxation; employee relations; heritage or historic
matters;
health
and
safety;
royalties;
land
acquisition and other matters.
Although the Board believe that the Company is well
placed to have all of its licences issued or renewed in
relation to its material assets, should the Company
identify future development opportunities or
operations there is a risk that the necessary
33
concessions, permits, licences, consents, titles,
authorisations and agreements to implement
planned exploration, project development, or
mining may not be obtained or renewed under
conditions or within time frames that make such
plans economic, that applicable laws, regulations or
the governing authorities will change or that such
changes
will
result
in
additional
material
expenditures or time delays could materially
adversely
affect
the
Company’s
prospects,
operations, financial condition and results of
operations.
Risks
and
hazards
inherent
in
exploration,
development and mining
Exploration, evaluation, development and mining
generally involves a high degree of risk. The
Company’s operations are and will continue to be
subject to all the hazards and risks normally
incidental to exploring for, evaluating, developing
and mining diamond resources.
Whilst the Company has taken, and will continue to
take, all precautions necessary to minimize risk, the
Company’s operations will be exposed to hazards
including, but not limited to: environmental hazards,
periodic interruptions due to bad or hazardous
weather conditions, unusual or unexpected geology
or grade problems, unanticipated changes in the
gravels or ore-body characteristics and diamond
recovery, difficulties in sourcing, commissioning and
operating plant and equipment, mechanical failure
or plant breakdown, unexpected shortages, delays
or increases in the sourcing or cost of consumables,
spare parts, plant and equipment, industrial or
labour disputes, seismic activity, flooding, fire,
equipment failure, pit wall failure and other
conditions involved in the exploration, evaluation,
development and mining activities.
Dividends
No dividends were paid or declared by the Company
during the current or prior financial year.
Environmental Regulation
The Group’s mining and exploration activities are
subject to various environmental regulations. The
respective Company, subsidiary and associate
Boards are responsible for the regular monitoring of
environmental exposures and compliance with
environmental regulations.
The Group is committed to achieving a high standard
of environmental performance and conducts its
activities in a professional and environmentally
conscious manner and in accordance with applicable
laws and permit requirements.
The Board believes the Group has adequate systems
in place for the management of its environmental
requirements and is not aware of any material
breach of those environmental requirements as they
apply to the projects.
Events Subsequent to Reporting Date
On 21 January 2025, Lucapa announced the results
from the first modern geophysical survey conducted
in 25 years at its Merlin project. A preliminary
review of the electromagnetic survey data has
identified two large and highly conductive base
metal targets.
On 22 January 2025, Lucapa announced that all
resolutions put to shareholders in respect of the A$3
million capital raising announced on 5 December
2024, were carried and decided by way of a poll.
On 22 January 2025, Lucapa announced the
completion of its Share Purchase Plan (SPP)
following the closing of applications on 23 January
2025. The SPP was announced on 11 December 2024
with terms of the SPP offer detailed in the
Prospectus dated 23 December 2024. The SPP raised
A$405,000 and 20,250,000 new fully paid ordinary
shares in the Company were issued under the SPP on
30 January 2025.
On 29 January 2025, Lucapa announced that it has
completed Tranche 2 of the capital raising
previously announced on 5 December 2024. The
Company has raised A$1.8M (before costs) via the
placement of 90,006,901 new fully paid ordinary
shares (Placement Shares) at an issue price of
A$0.02 per share. The issue of the Placement Shares
was approved by Shareholders at a General Meeting
held 22 January 2025 and rank equally with the
existing fully paid ordinary shares on issue. In
addition to the Placement Shares, the Company has
34
issued 16,474,800 new fully paid ordinary shares
(Employee
Shares)
to
directors
and
senior
management at a deemed issue price of A$0.02 per
share
to
convert
A$329k
of
accrued
fees,
remuneration and expenses. The issue of the
Employee Shares was approved by Shareholders at
a General Meeting held 22 January 2025 and rank
equally with the existing fully paid ordinary shares
on issue.
On 3 February 2025, Lucapa announced that
operations at Lulo have been disrupted following a
blockade of all entrances to the mine by the local
community leaders.
On 20 February 2025, Lucapa announced the
recommencement of mining operations at Lulo
following the peaceful end to the blockade by local
community leaders. Processing of existing stockpiles
was able to continue throughout the blockade,
ensuring that monthly carat targets remained on
track against targets. SML has reiterated its
commitment to its existing social programs and is
also revieing its alluvial mining plan to attempt to
mitigate the impact caused by the stoppage.
Likely Developments
The Directors consider the following as a summary
of the likely developments and expected results for
the next 12 months.
Lulo, Angola
It is expected that Lucapa and its partners will
continue alluvial mining and mine development at
Lulo in 2025 alongside the alluvial exploration
program. Further sales of Lulo diamonds are
planned, with more diamonds continuing to be
delivered into the cutting & polishing partnership
with Safdico.
It is expected the new Mineral Investment Contract
for the Project Lulo Kimberlite Exploration JV will be
signed with Lucapa to receive a majority stake in the
JV. The exploration program to find the kimberlite
source of the alluvial diamonds will be continued.
Merlin Diamonds, Northern Territory, Australia
An investment decision will be made in connection
with the Merlin development in terms of a smaller
scale
low-cost
development
plan
with
an
appropriate funding solution to maximise the
benefits for all stakeholders.
Exploration for kimberlite and base metal targets
will continue at Merlin in 2025.
Brooking, Western Australia
The Board will review its strategic options following
the decision not to pursue further exploration work
on the project.
35
Directors’ Interests
The relevant interest of each Director in the shares and options over such instruments issued by the Company
and other related bodies corporate, as notified by the Directors to the ASX in accordance with S205G(1) of the
Corporations Act 2001, at the date of this report is as follows:
1 Performance rights issued following shareholder approval at the
annual general meetings held 30 May 2022 and 30 May 2023, subject
to various vesting conditions.
Share Options and Performance Rights
Unissued Shares Under Options and Performance Rights
At the date of this report unissued ordinary shares of the Company under option and performance rights are set
out below. These options and performance rights over unissued shares do not entitle the holder to participate in
any share issue of the Company or any other body corporate.
1 Performance rights issued following shareholder approval at the annual general meetings held 30 May
2022 and 30 May 2023, subject to various vesting conditions.
Director
Fully paid
ordinary shares
Performance
rights - various
expiry dates (1)
M Kennedy
623,364
-
R Beevor
766,667
-
A Kidman
308,012
737,645
Expiry date
Exercise price
(A$)
Number of
securities
Quoted
Share options
30 July 2025
$0.08
1,000,000
-
Performance rights
Various expiry dates (1)
$0.00 5,586,219
-
36
Remuneration Report (Audited)
Principles of Compensation
Key management personnel (“KMP”) have authority
and responsibility for planning, directing and
controlling the activities of the Group. KMP
comprises the Directors of the Company.
Compensation levels for KMP are competitively set
to attract and retain appropriately qualified and
experienced Directors and Executives. The Directors
of the Company obtain independent advice on the
appropriateness of compensation packages of KMP
given trends in comparative companies both locally
and internationally, and the objectives of the Group’s
compensation strategy.
The compensation structures are designed to attract
and retain suitably qualified industry experts and
candidates, reward the achievement of strategic
objectives, and achieve the broader outcome of
creation of value for shareholders. Compensation
packages include a mix of fixed compensation,
equity-based compensation as well as employer
contributions to superannuation funds.
Shares, options and performance rights may only be
issued to Directors subject to approval by
shareholders at a general meeting.
Fixed Compensation
Fixed compensation consists of base compensation,
determined from a market review, to reflect core
performance requirements and expectations of the
relevant
position
and
statutory
employer
contributions
to
superannuation
funds.
Compensation
levels
are
generally
reviewed
annually by the Board through a process that
considers individual, segment, comparable peers
and overall performance of the Group.
Directors’ Fees
Total compensation for Directors is set based on
advice from external advisors with reference to fees
paid to other Directors of comparable companies.
Non-Executive Directors’ fees are presently limited
to an aggregate total of US$500,000 per annum,
excluding the fair value of any options or
performance rights granted. Directors’ fees cover all
main Board activities and membership of any
committee and subsidiary Boards. The Board has no
established retirement (other than superannuation)
or redundancy schemes in relation to Directors. The
Directors’ contracts contain a service bonus in the
event of a takeover or change of control, subject to
shareholder approval where required.
Use of Remuneration Consultants
The Board has previously engaged an independent
remuneration consultant, BDO Reward WA Pty
Limited (BDO) to review the pay and rewards for
Directors
and
senior
executives
including
independent
benchmarking
as
the
Company
continues to maximise operating performance from
its existing mines and exploration programs and
moves toward the development of the Merlin Project
in the Northern Territory, Australia.
The recommendations were incorporated into the
Group’s Incentive and Retention Plan (Plan), which
was approved by shareholders at the annual general
meeting held on 30 May 2022.
Equity-based Compensation
The purpose of the Plan is to assist in the
incentivisation, reward and retention of Directors
and management, align their interests with those of
the shareholders of the Company and to focus on the
Company’s development strategy through the award
of equity-based incentives in the form of options or
performance rights.
Short-term and Long-term Incentive Structure and
Consequences of Performance on Shareholder Wealth
Given the Group’s principal activities during the
course of the financial period consisting of
exploration, evaluation, development and mining of
mineral
resources,
successful
expansion
and
acquisition workstreams, the Board has for 2023
given significance to service criteria, performance
criteria and overall market related criteria in setting
the Group’s incentive and retention schemes.
The Board does not consider the Group’s earnings to
be the only appropriate key performance indicator
for setting remuneration packages. In addition, the
issue of options and performance rights as part of
the
remuneration
package
of
Directors,
37
management, employees and contractors is an
established
practice
for
listed
exploration,
development and mining companies and has the
benefit of conserving cash whilst appropriately
rewarding and retaining the recipient.
In circumstances where cash flow permits, the Board
may approve the payment of a discretionary cash
bonus as a reward for performance.
In considering the relationship between the Group’s
remuneration policy and the consequences for the
Company’s shareholder wealth, changes in the
Company’s share price are also considered.
The Board currently monitors and reviews the
remuneration level and policy of the Group as the
Company does not have a Remuneration Committee
given the size of the Board. However it is intended
that a Remuneration Committee will be established
comprised by a majority of independent Directors as
the Company transitions to become a mid-tier
producer and explorer.
Remuneration Outcomes (FY24 & FY23)
The Board believes that the current remuneration
framework is appropriate and fit-for-purpose based
on the Company’s development and growth profile
and to drive and deliver the outcomes desired by all
shareholders.
The FY23 framework for STI’s in the form of cash
and equity and LTI’s in the form of equity, were to be
measured against the Company’s relevant targets
and individual key performance indicators (KPI’s) in
FY23 such as:
STI’s
•
Company Targets
o
Production
o
Operating and Capital Expenditures
o
ESG/ Safety
o
Exploration
•
Individual KPI’s for participants in the Incentive
Plan
LTI’s
•
Absolute Shareholder return
A Performance Right is exercisable, at no cost, on
satisfaction of relevant performance hurdles, into a
Share. The Performance Rights proposed to be
granted to the Executive Directors will vest based on
the achievement of short term, project based and
long-term
incentive
performance
hurdles
respectively and as a key staff retention mechanism,
employment with the Company at time of vesting.
For 2024, the incentive and retention portion of the
Plan was not implemented due to various changes in
the Group as well as in the composition of the Board.
Details for the remuneration outcomes for the year
ended 31 December 2024 are summarised below.
EXECUTIVE FIXED REMUNERATION
In FY24, Mr Selby’s total annual fixed remuneration
was adjusted for the increased superannuation
guarantee to A$597,838 and Mr Kidman was
appointed as Managing Director/ Chief Executive
Officer at a total annual fixed remuneration of
A$505,000.
EXECUTIVE INCENTIVES
Short-term incentives (‘STI’)
The Company’s STI framework was established in
FY22 following the recommendations from BDO
whereby performance measures set for the KMP and
key staff based upon the Company’s relevant targets
for the year in relation to production, operating &
capital expenditure, ESG/safety and exploration,
together with personal performance indicators
(KPIs).
No STI awards were made to KMPs during FY24.
Long-term incentives (‘LTI’)
The Company’s LTI framework was established in
FY22 following the recommendations from BDO
whereby performance measures set for the KMP and
key staff based upon the Company’s Absolute
Shareholder Return over a three year period.
No LTI awards were made to KMPs during FY24.
NON-EXECUTIVE DIRECTOR REMUNERATION
In
FY24
Mr
Kennedy’s
total
annual
fixed
remuneration was reduced to A$133,800 after
stepping down as Chairman and Mr Stanley’s total
annual fixed remuneration remained at A$ 127,827
until his resignation. Mr Brown was appointed as
Chairman at a total annual fixed remuneration of
38
A$178,400 and Mr Beevor as non-executive Director
at A$133,800.
Service contracts (as at the date of these financial
statements)
NICK SELBY
Mr Selby resigned as the Company’s Managing
Director/ Chief Executive Officer on 21 November
2024 and as Director on 31 December 2024. Mr
Selby was entitled to receive remuneration of
A$595,000 (gross, including superannuation) per
annum which is subject to review by the Board from
time to time.
ALEX KIDMAN
Mr Kidman has been engaged to act as the
Company’s Managing Director/ Chief Executive
Officer.
Mr
Kidman
is
entitled
to
receive
remuneration of A$505,000 (gross, including
superannuation) per annum which is subject to
review by the Board from time to time. He will be
eligible to participate in any future incentive and
retention plans implemented by the Board.
Shareholder approval will be sought for his
participation in any incentive plan involving equity
of the Company. The appointment may be
terminated for various causes of a standard nature.
Upon termination, no benefits are due unless
approved by shareholders.
STUART BROWN
Mr Brown has been engaged to act as a non-
executive Chairman of the Company. Mr Brown is
entitled to receive Director fees of A$178,400
(gross) per annum, which is subject to review by the
Board from time to time. The appointment may be
terminated for various causes of a standard nature.
Upon termination, no benefits are due unless
approved by shareholders.
RONNIE BEEVOR
Mr Beevor has been engaged to act as a non-
executive Director of the Company. Mr Beevor is
entitled to receive Director fees of A$133,800
(gross) per annum, which is subject to review by the
Board from time to time. The appointment may be
terminated for various causes of a standard nature.
Upon termination, no benefits are due unless
approved by shareholders.
MILES KENNEDY
Mr Kennedy has been engaged to act as a non-
executive Director of the Company. Mr Kennedy is
entitled to receive Director fees of A$133,800
(gross) per annum, which is subject to review by the
Board from time to time. The appointment may be
terminated for various causes of a standard nature.
Upon termination, no benefits are due unless
approved by shareholders.
Mr Kennedy is entitled to be reimbursed all his
travel, accommodation, food and other expenses in
the conduct of his role as non-executive Director of
the Company and to a rate of A$500 a day in respect
of each day worked by him in excess of 4 days in any
calendar month.
39
KMP Remuneration
Details of the nature and amount of each major element of remuneration (in USD) of each KMP of the Company are:
Short-term benefits
Post
employment
benefits
Equity-settled
share based
payments
Key management personnel
Period
ended
Salary & fees
Bonus
Superannuation
benefits
Options and
performance
rights(1)
Total (US$)
Executive Directors
Alex Kidman, Chief Executive Officer/ Managing Director
Dec 24
28,837
-
1,652
(279)
30,210
appointed as CEO/MD 21 Nov 2024, formerly employed as Group Operations Manager
Dec 23
-
-
-
-
-
Nick Selby, former Chief Executive Officer/ Managing Director
Dec 24
375,161
-
19,000
(73,220)
320,942
resigned as CEO/MD 21 Nov 2024 and as director 31 Dec 2024
Dec 23
333,537
166,614
18,144
105,996
624,291
Stephen Wetherall, former Chief Executive Officer/ Managing Director
Dec 24
-
-
-
-
-
resigned 31 Jul 2023
Dec 23
527,649
-
15,120
81,656
624,425
Non-Executive Directors
Stuart Brown, Non-Executive Chairman
Dec 24
86,990
-
-
-
86,990
appointed 8 Apr 2024
Dec 23
-
-
-
-
-
Ronnie Beevor, Non-Executive Director
Dec 24
60,479
-
6,573
-
67,052
appointed 8 Apr 2024
Dec 23
-
-
-
-
-
Miles Kennedy, Non-Executive Director
Dec 24
88,754
-
12,860
-
101,614
Non-executive Chairman until 8 Apr 2024
Dec 23
114,575
-
18,144
-
132,719
Ross Stanley, Non-Executive Director
Dec 24
20,490
-
2,254
-
22,744
resigned 8 Apr 2024
Dec 23
73,478
-
7,905
-
81,383
Total
Dec 24
660,712
-
42,339
(73,499)
629,552
Dec 23
1,049,239
166,614
59,313
187,652
1,462,818
40
Equity Investments
All options refer to options and performance rights over ordinary shares of the Company, which are exercisable
on a one-for-one basis.
Analysis of movements in options, performance rights and shares
OPTIONS AND PERFORMATION RIGHTS OVER EQUITY INSTRUMENTS
The movement during the reporting period in the number of options and performance rights over ordinary
shares in the Company held, directly, indirectly or beneficially, by each KMP, including their related parties, is as
follows:
MOVEMENTS IN SHARES
The movement during the reporting period in the number of ordinary shares in the Company held, directly,
indirectly or beneficially, by each KMP, including their related parties, is as follows:
No shares were granted to KMP during the reporting period as compensation in 2024 or 2023.
End of audited section.
Held at
1 January
or date of
appointment
Adjustment for
share
consolidation
(5:1) on 13 Mar 24
Exercise of
options and
performance
rights
Expired without
exercise
Options and
performance
rights granted
Held at 31
December
or date of
resignation
Vested &
exercisable
2024
Directors
S Brown (appointed 8 Apr 24)
-
-
-
-
-
-
-
R Beevor (appointed 8 Apr 24)
-
-
-
-
-
-
-
M Kennedy
-
-
-
-
-
-
-
R Stanley (resigned 8 Apr 24)
-
-
-
-
-
-
-
A Kidman (appointed 21 Nov 24)
737,645
-
-
-
-
737,645
289,718
N Selby (resigned 31 Dec 24)
7,176,494
(5,741,195)
(240,099)
(896,400)
-
298,800
-
2023
Directors
M Kennedy
-
-
-
-
-
-
-
R Stanley
-
-
-
-
-
-
-
N Selby
7,644,300
-
-
(467,806)
-
7,176,494
1,200,494
S Wetherall (resigned 31 July 2023)
14,234,220
-
-
(9,333,469)
-
4,900,751
4,900,751
Directors
Held at
1 January
or date of
appointment
Adjustment for
share
consolidation
(5:1) on 13 Mar 24
Received upon
exercise of
options and
performance
rights
Sales
Purchases
Held at 31
December
or date of
resignation
2024
Directors
S Brown (appointed 8 Apr 24)
-
-
-
-
-
-
R Beevor (appointed 8 Apr 24)
766,667
-
-
-
-
766,667
M Kennedy
3,116,819
(2,493,455)
-
-
-
623,364
R Stanley (resigned 8 Apr 24)
87,156,600
(69,725,280)
-
-
-
17,431,320
A Kidman (appointed 21 Nov 24)
308,012
-
-
308,012
N Selby (resigned 31 Dec 24)
2,187,350
(1,749,880)
240,099
-
-
677,569
2023
Directors
M Kennedy
3,116,819
-
-
-
-
3,116,819
R Stanley
80,940,347
-
-
-
6,216,253
87,156,600
N Selby
2,187,350
-
-
-
-
2,187,350
S Wetherall (resigned 31 July 2023)
4,425,100
-
-
-
-
4,425,100
41
Indemnification and Insurance of Officers and Directors
The Company has entered into deeds of indemnity, insurance and access (“Deeds”) with each of its Directors.
Under these Deeds, the Company indemnifies each Director or officer to the maximum extent permitted by the
Corporations Act 2001 from liability to third parties and in successfully defending legal and administrative
proceedings and applications for such proceedings. The Company must use its best endeavours to insure a
Director or officer against any liability, which does not arise out of conduct constituting a wilful breach of duty
or a contravention of the Corporations Act 2001. The Company must also use its best endeavour to insure a
Director or officer against liability for costs and expenses incurred in defending proceedings whether civil or
criminal.
The Company has, during and since the end of the year, in respect of any person who is an officer of the Company
or a related body corporate, paid a premium in respect of Directors and Officer liability insurance which
indemnifies Directors, officers and the Company of any claims made against the Directors, officers of the
Company and the Company, subject to conditions contained in the insurance policy. The Directors have not
included details of the premium paid in respect of the Directors’ and officers’ liability and legal expenses’
insurance contracts, as such disclosure is prohibited under the terms of the contract.
The Company has not entered into any agreement to indemnify the auditors against any claims by third parties
arising from their reports on the financial report for the year ended 31 December 2024 and prior period ended
31 December 2023.
42
Auditor Independence and Non-Audit Services
The Directors received the following declaration from the Company’s auditors, Elderton Audit Pty Ltd:
During the period Elderton Audit Pty Ltd have not performed any other services for the Company in addition to
their statutory audit and as a result the Directors are satisfied that auditors have not compromised the auditor
independence requirements of the Corporations Act 2001.
Details of the amounts paid to the current auditor of the Company, Elderton Audit Pty Ltd are set out below:
31 Dec 2024
31 Dec 2023
US$
Audit services
35,840
40,027
Other services
-
-
35,840
40,027
43
Signed in accordance with a resolution of the Directors, on behalf of the Directors.
STUART BROWN
Chairman
Dated this 27th FEBRUARY 2025
44
Consolidated Financial Statements
Consolidated Statement of Profit or Loss
FOR YEAR ENDED 31 DECEMBER 2024
The Consolidated Statement of Profit or Loss is to be read in conjunction with the accompanying notes.
31 Dec 2024
31 Dec 2023
Note
US$000
CONTINUING OPERATIONS
Share of (loss)/ profit of associate
11
(885)
4,195
Corporate expenses
3
(2,769)
(3,160)
Share-based payments
13
83
(741)
Foreign exchange loss
(1,562)
(32)
Operating (loss)/ profit
(5,133)
262
Finance cost
4
(41)
(282)
Finance income
4
7
11
Fair value adjustments
8
-
2,354
(Loss)/ profit before income tax
(5,167)
2,345
Income tax expense
5
(310)
(217)
(Loss)/ profit after income tax from continuing operations
(5,477)
2,128
DISCONTINUED OPERATIONS
Profit/ (loss) from discontinued operations, after tax
6
3,973
(19,363)
Loss for the period
(1,504)
(17,235)
Attributable to:
Owners of the Company
(20,488)
(9,051)
Non-controlling interests
18,984
(8,184)
(1,504)
(17,235)
Earnings per share
7
Cents
Cents
Basic loss per share
(7.02)
(3.14)
Basic (loss)/ profit per share - continuing operations
(1.88)
0.74
Diluted loss per share
(6.79)
(3.02)
Diluted (loss)/ profit per share - continuing operations
(1.82)
0.71
45
Consolidated Statement of Other Comprehensive Income
FOR YEAR ENDED 31 DECEMBER 2024
The Consolidated Statement of Other Comprehensive Income is to be read in conjunction with the accompanying
notes.
31 Dec 2024
31 Dec 2023
US$000
Loss for the period
(1,504)
(17,235)
Other comprehensive (loss)/income
(5,269)
2,471
Total comprehensive loss for the year
(6,773)
(14,764)
Attributable to:
Owners of the Company
(24,210)
(7,323)
Non-controlling interests
17,437
(7,441)
(6,773)
(14,764)
46
Consolidated Statement of Financial Position
AS AT 31 DECEMBER 2024
The Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
31 Dec 2024
31 Dec 2023
Note
US$000
Assets
Cash and cash equivalents
8a
194
1,317
Trade and other receivables
8b
260
2,466
Contract assets
-
833
Inventories
9
25
2,351
Other current financial assets
8c
1,142
3,923
Total current assets
1,621
10,890
Property plant and equipment
10
52,005
51,863
Non-current financial assets
8c
635
699
Investment in associate
11
13,396
18,281
Total non-current assets
66,036
70,843
Total assets
67,657
81,733
Liabilities
Trade and other payables
8d
1,691
8,231
Current borrowings
8e
623
235
Total current liabilities
2,314
8,466
Non-current provisions
12
542
1,956
Deferred tax liabilities
5
26
26
Total non-current liabilities
568
1,982
Total liabilities
2,882
10,448
Net assets
64,775
71,285
Equity
Share capital
13
155,027
154,230
Reserves
(5,647)
(1,344)
Accumulated losses
(84,605)
(64,164)
Equity attributable to owners of the Company
64,775
88,722
Non-controlling interests
-
(17,437)
Total equity
64,775
71,285
47
Consolidated Statement of Changes in Equity
FOR YEAR ENDED 31 DECEMBER 2024
The Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
Issued capital
Share based
payments
reserve
Foreign currency
translation
reserve
Accumulated
losses
Total
Non-controlling
interests
Total equity
Note
US$000
Balance at 1 January 2023
154,230
158
(3,956)
(55,129)
95,303
(9,996)
85,307
Comprehensive income for the period
Loss for the period
-
-
-
(9,051)
(9,051)
(8,184)
(17,235)
Other comprehensive income
-
-
1,728
-
1,728
743
2,471
Total comprehensive income/ (loss) for the period
-
-
1,728
(9,051)
(7,323)
(7,441)
(14,764)
Transactions with owners, in their capacity as owners
Issue of options
13
-
742
-
-
742
-
742
Expiry of options
-
(16)
-
16
-
-
-
Total transactions with owners
-
726
-
16
742
-
742
Balance at 1 Janaury 2024
154,230
884
(2,228)
(64,164)
88,722
(17,437)
71,285
Comprehensive income for the period
(Loss)/ profit for the period
-
-
-
(20,488)
(20,488)
18,984
(1,504)
Other comprehensive (loss)/ income
-
-
(3,769)
47
(3,722)
(1,547)
(5,269)
Total comprehensive (loss)/ income for the period
-
-
(3,769)
(20,441)
(24,210)
17,437
(6,773)
Transactions with owners, in their capacity as owners
Issue of share capital
555
-
-
-
555
-
555
Issue of options
13
-
373
-
-
373
-
373
Expiry of options
13
-
(456)
-
-
(456)
-
(456)
Transfer of reserves on exercise of options
324
(451)
-
-
(127)
-
(127)
Share issue expenses
(82)
-
-
-
(82)
-
(82)
Total transactions with owners
797
(534)
-
-
263
-
263
Balance at 31 December 2024
155,027
350
(5,997)
(84,605)
64,775
-
64,775
48
Consolidated Statement of Cash Flows
FOR YEAR ENDED 31 DECEMBER 2024
The Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes.
31 Dec 2024
31 Dec 2023
Note
US$000
Cash flows from operating activities
Receipts from products and related debtors
9,638
24,817
Cash paid to suppliers and employees
(12,353)
(26,739)
Interest and finance cost
(6)
(997)
Interest received
8
17
Net cash used in operating activities
(2,713)
(2,902)
Cash flows from investing activities
Payments for exploration costs
(535)
(1,031)
Payments for development
(1,483)
(3,345)
Dividend and receivable proceeds from associate
2,500
7,875
Payments for property plant and equipment
(171)
(692)
Net cash generated from investing activities
311
2,807
Cash flows from financing activities
Proceeds from issue of share capital
555
-
Share issue costs
(81)
-
Repayment of borrowings
-
(5,463)
Proceeds from borrowings
644
-
Net cash generated from/ (used in) financing activities
1,118
(5,463)
Net decrease in cash and cash equivalents
(1,284)
(5,558)
Cash and cash equivalents at beginning of period
1,317
6,905
Exchange loss on foreign cash balances
-
(30)
Cash and cash equivalents disposed of
6
161
-
Cash and cash equivalents at end of period
8a
194
1,317
Reconciliation of loss after tax to cash flows from operations:
Loss for the period (including discontinued operations)
(2,824)
(17,235)
Adjustments for:
Depreciation expense
2,422
5,841
Loss on disposal of assets
1,320
1
Impairment (gain)/ charge
(3,451)
13,370
Director and employee options
3
(83)
741
Exchange gains
-
29
Interest and other finance costs paid
694
(463)
Fair value loss on financial assets
-
(2,354)
Share of profit of associate
885
(4,195)
Other non cash items
(30)
(867)
Working Capital adjustments:
-
Change in inventory
306
6
Change in trade and other receivables
(63)
(844)
Change in trade and other payables relating to operating
activities
(1,889)
3,068
Net cash used in operating activities
(2,713)
(2,902)
49
Notes to the Consolidated Financial Statements
1.
Basis of Preparation
Corporate Information
Lucapa Diamond Company Limited (“Lucapa” or “the
Company”)
is
a
company
domiciled
and
incorporated in Australia. The address of the
Company’s registered office is 34 Bagot Road,
Subiaco WA 6008. The Company, its subsidiaries and
associates (collectively “the Group”) are primarily
involved in the exploration, evaluation, development
and mining on diamond projects in Africa and
Australia.
Statement of compliance
The financial report is a general purpose financial
report which has been prepared in accordance with
Australian
Accounting
Standards
(“AASBs”)
(including Australian Interpretations) adopted by
the
Australian
Accounting
Standards
Board
(“AASB”) and the Corporations Act 2001. The
financial report of the Group complies with
International
Financial
Reporting
Standards
(“IFRSs”) and interpretations adopted by the
International Accounting Standards Board (“IASB”).
The basis of preparation of the financial report is set
out below and in the notes to the consolidated
financial statements. The financial statements were
authorised for issue by the Board of Directors on the
date of the Directors’ report.
Basis of measurement
The financial statements have been prepared on the
going concern basis, which contemplates the
continuity of normal business activities and the
realisation of assets and settlement of current
liabilities in the ordinary course of business.
Going concern
The Group incurred a net loss of US$1.5 million
during the year ended 31 December 2024 and
incurred cash outflows of US$2.7 million from
operating activities with a net decrease of US$1.3
million in cash and cash equivalent for the year then
ended.
The Directors believe that the going concern basis is
appropriate for the following reasons:
•
The diamond market is relatively stable for
higher value production despite volatility
experienced in the overall market during 2024;
•
Prior year inflationary environment pressures
on costs and the supply chains have improved;
•
The book value of the Group’s assets exceeds its
liabilities by US$64.8 million;
•
All approvals for SML to repay Lucapa’s alluvial
investment loan are in place and are expected to
follow directly following SML shareholder
approval;
•
The Group has historically been successful in
raising equity for the furtherance of its projects
and under ASX Listing Rule 7.1 the Company has
the capacity to place securities to raise equity:
and
•
The Group has historically been successful in
raising and restructuring debt facilities.
However, despite the Group’s previous track record
in sourcing new funds for its projects, there remains
no assurance that the Group in future will be
successful in obtaining funding as and when needed.
In the event that the Group is unsuccessful in the
matters set out above in relation to obtaining future
funds, there is a material uncertainty whether the
Group will continue as a going concern, and
therefore whether it will realise its assets and
discharge its liabilities in the normal course of
business, and at the amounts stated in the financial
statements
The financial statements do not include any
adjustments
relating
to
recoverability
and
classification of asset carrying amounts or to
amounts and classification of liabilities that might
result should the Company be unable to continue as
a going concern.
50
Notes to the Consolidated Financial Statements
2.
Segment Reporting
Financial Overview
Exploration & Evaluation
Mining
Corporate
& other
Discontinued
operations
Total
Angola
Australia
Angola
Australia
Australia
Various*
US$000
Period ended 31 December 2024
Profit or loss
External revenue
-
-
-
-
-
10,571
10,571
Inter-segment
-
-
-
-
-
-
-
Total revenue
-
-
-
-
-
10,571
10,571
Depreciation
-
-
-
-
158
2,264
2,422
Share-based payments
-
-
-
-
(83)
-
(83)
Segment operating profit/ (loss)
-
-
(885)
-
(4,248)
1,209
(3,924)
Net finance (costs)/ income
-
-
-
-
(34)
(694)
(34)
Profit/ (loss) before income tax
-
-
(885)
-
(4,282)
3,973
(1,194)
Other segment information
Capital expenditure
4,793
-
-
1,791
4
10,451
17,039
As at 31 December 2024
Assets and liabilities
Segment assets
36,221
96
15,102
15,815
418
5
67,657
Segment liabilities
-
26
-
695
2,151
10
2,882
Period ended 31 December 2023
Profit or loss
External revenue
-
-
-
-
-
27,999
27,999
Inter-segment
-
-
-
-
-
-
-
Total revenue
-
-
-
-
-
27,999
27,999
Depreciation
-
-
148
-
11
4,928
5,087
Share-based payments
-
-
-
-
741
-
741
Segment operating profit/ (loss)
-
-
4,047
-
(2,841)
(20,061)
(18,855)
Net finance (costs)/ income
-
-
-
-
6,704
(7,221)
(517)
Impairment loss
-
-
-
-
-
(13,370)
(13,370)
Profit/ (loss) before income tax
-
-
4,550
-
5,714
(27,282)
(17,018)
Other segment information
Capital expenditure
4,036
-
-
3,240
5
2,601
9,882
As at 31 December 2023
Assets and liabilities
Segment assets
31,428
-
22,914
15,601
1,554
10,236
81,733
Segment liabilities
-
-
-
658
993
8,797
10,448
* Lesotho (Mothae), Botswana (Orapa Area F) and Australia (Brooking)
51
Notes to the Consolidated Financial Statements
Segment Reporting (continued)
Additional Information
The Group engages in business activities within the following business segments:
-
exploration & evaluation in Angola;
-
mining in Angola, mine development and exploration & evaluation in Australia;
-
mining in Lesotho and exploration & evaluation in Botswana and Western Australia were discontinued
during 2024; and
-
corporate and other administrative functions in Western Australia to support and promote its activities.
The Group’s operating segments are managed by geographical region as the risks and required rates of returns
are largely affected by differences in the regions in which they operate.
Accounting policy
Segment disclosures are based on information that is provided to the Board of Directors, which is the Group’s
chief decision-making body.
An operating segment is a component of the Group that engages in business activities from which it may expend
capital and generate revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Group’s other components.
All operating segments’ operating results, for which discrete financial information is available, are reviewed by
the Group’s Managing Director and management to assess their performance and make decisions with respect to
the allocation of resources to that segment.
52
Notes to the Consolidated Financial Statements
3. Expenses
Financial Overview
Accounting policy
Expenses recognised in profit or loss are classified and presented on a functional basis.
Employee benefits
SHORT-TERM EMPLOYEE BENEFITS
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12
months of the reporting date represent present obligations resulting from employees’ services provided to
reporting date and are calculated at undiscounted amounts based on remuneration wage and salary rates that
the Group expects to pay as at the reporting date including related on-costs, such as workers compensation
insurance and payroll tax.
31 Dec 2024
31 Dec 2023
Note
US$000
Breakdown of expenses by nature
Employee benefits expenses (excluding share based payments)
1,619
2,213
Depreciation and amortisation
158
159
Auditors remuneration
36
40
Mining and short term leases
120
119
Consulting fees and other administrative expenses
836
629
Total expenses
2,769
3,160
Breakdown of expenses by function
Corporate expenses
2,769
3,160
Total expenses
2,769
3,160
Employee benefits expenses
Wages, salaries and director remuneration
1,409
2,078
Superannuation costs
121
116
Share-based payments
13
(83)
741
Other associated employee expenses
89
19
1,536
2,954
Auditors remuneration
Elderton Pty Ltd (Auditors of parent company & consolidation)
Audit services
36
40
Other services
-
-
36
40
Other group auditors (for subsidiary companies)
Audit services
-
10
Other services
-
-
-
10
36
50
53
Notes to the Consolidated Financial Statements
Expenses (continued)
LONG-TERM EMPLOYEE BENEFITS
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that
employees have earned in return for their service in the current and prior periods plus related on-costs: that
benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The
discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the
terms of the Group’s obligations.
TERMINATION BENEFITS
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic
possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement
date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
Share based payments
Refer note 13.
54
Notes to the Consolidated Financial Statements
4. Finance Cost and Income
Financial Overview
Accounting policy
Finance income and expenses comprises interest income on funds invested, interest expense on borrowings
calculated using the effective interest method and unwinding of discounts on provisions.
Interest income is recognised in the statement of profit or loss and other comprehensive income as it accrues,
using the effective interest method. All borrowing costs are recognised in the statement of profit or loss and
other comprehensive income using the effective interest method.
General and specific borrowing costs that are directly attributable to the acquisition, construction or production
of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset
for its intended use or sale. Exchange differences arising from foreign currency borrowings used to acquire
qualifying assets are regarded as an adjustment to the interest cost and included in the capitalised amount.
Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use
or sale.
31 Dec 2024
31 Dec 2023
US$000
Finance cost
Finance cost on borrowings
16
258
Unwinding of discount rate on rehabilitation liability
25
24
41
282
Finance income
Interest income on bank deposits
7
11
7
11
Net finance cost on financial instruments
34
271
55
Notes to the Consolidated Financial Statements
5. Income Tax
Financial Overview
31 Dec 2024
31 Dec 2023
US$000
Current tax expense
Current income tax charge
310
217
Current income tax adjustments relating to prior years
-
-
Deferred tax expense
Relating to origination and reversal of temporary differences
-
-
Total income tax expense - Continuing operations
310
217
Total income tax expense - Discontinued operations
-
-
Reconciliation of tax expense and the accounting profit multiplied
by Australia’s domestic tax rate
Net (loss)/ profit before tax - Continuing operations
(5,167)
2,345
Net profit/ (loss) before tax - Discontinued operations
3,973
(19,363)
(1,194)
(17,018)
Income tax benefit using the Australian domestic tax rate of 30%
(358)
(5,105)
Increase in income tax due to tax effect of:
Non-deductible expenses
1,641
481
Tax rate differential on foreign income
(1,894)
1,313
Net current year tax losses not recognised
-
2,325
Impact of movement in unrecognised temporary differences
8,261
-
Foreign taxes paid
310
217
Derecognition of previously recognised tax losses
5
4,209
Decrease in income tax expense due to:
Non-assessable income
(57)
(608)
Share of profit of associate
266
(1,259)
Impact of movement in unrecognised temporary differences
-
(446)
Utilisation of previously unrecognised tax losses
(7,833)
(879)
Deductible equity raising costs
(31)
(31)
Income tax expense
310
217
Recognised deferred tax assets and liabilities
Recognised deferred tax assets
Tax losses
213
638
Accruals & provisions
246
565
Other
15
-
474
1,203
Less: Set off of deferred tax liabilities
(474)
(1,203)
Net deferred tax assets
-
-
Recognised deferred tax liabilities
Property plant and equipment
(26)
(627)
Capitalised interest and foreign exchange adjustments
(471)
-
Other
(3)
(602)
(500)
(1,229)
Less: Set off of deferred tax assets
474
1,203
Net deferred tax liabilities
(26)
(26)
Deferred tax assets not recognised
Tax revenue losses
875
20,028
Tax capital losses
4,089
4,501
Deductible temporary differences
29
16,233
4,993
40,762
56
Notes to the Consolidated Financial Statements
Income Tax (continued)
Additional information
The estimated tax losses above may be available to be offset against taxable income in future years. The
availability of these losses is subject to satisfying taxation legislative requirements. The deferred tax asset
attributable to tax losses has not been brought to account in these financial statements because the Directors
believe it is not presently appropriate to regard realisation of the future income tax benefits as probable.
Accounting policy
Income tax expense represents the sum of the tax
currently payable and deferred tax. The tax
currently payable is based on taxable profit/ (loss)
for the period. Taxable profit differs from net profit
as reported in the statement of profit or loss and
other comprehensive income because it excludes
items of income or expense that are taxable or
deductible in other years and it further excludes
items that are never taxable or deductible. The
Group’s liability for current tax is calculated using
tax rates that have been enacted or substantively
enacted by the balance sheet date for each
jurisdiction.
Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax
authorities.
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying
amount of assets and liabilities in the financial
statements and the corresponding tax bases used in
the computation of taxable profit/ (loss) and is
accounted for using the balance sheet liability
method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that
it is probable that taxable profits will be available
against which deductible temporary differences can
be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from
goodwill (or negative goodwill) or from the initial
recognition (other than in a business combination)
of other assets and liabilities in a transaction that
affects neither the tax profit/ (loss) nor the
accounting profit/ (loss).
Deferred tax liabilities are recognised for taxable
temporary differences arising on investments in
subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control
the reversal of the temporary difference and it is
probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is
reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the asset to be recovered.
Deferred tax is calculated at the tax rates that are
expected to apply in the period when the liability is
settled or the asset realised. Deferred tax is charged
or credited in the statement of profit or loss and
other comprehensive income, except when it relates
to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in
equity.
Deferred tax assets and liabilities are offset when
they relate to income taxes levied by the same
taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis
57
Notes to the Consolidated Financial Statements
6. Discontinued Operations
Financial Overview
31 Dec 2024
31 Dec 2023
US$000
Revenue
10,571
27,999
Cost of sales
(11,814)
(41,173)
Gross profit/(loss)
(1,243)
(13,174)
Royalties and selling expenses
(504)
(1,297)
Corporate expenses
(569)
(823)
Foreign exchange gain/(loss)
3,525
(3,823)
Operating profit/ (loss)
1,209
(19,117)
Finance cost
(694)
(246)
Gain on disposal of subsidairy
4,195
-
Reclassification of foreign currency translation reserve
1,593
-
Profit / (loss) from discontinued operations - Mothae
6,303
(19,363)
Impairment of capitalised exploration cost - Orapa & Brooking
(2,330)
-
Profit/ (loss) from discontinued operations - Group
3,973
(19,363)
Profit/ (loss) from discontinued operations - Mothae as above
6,303
(19,363)
Gain/(loss) on reversal of loan and interest with Lucapa
57,270
(6,975)
Profit /(loss) from discontinued operations - Mothae entity
63,573
(26,338)
Attributable to:
Owners of the Company (before intergroup elimination)
44,589
(18,154)
Non-controlling interests
18,984
(8,184)
63,573
(26,338)
Effect of the disposal of Mothae on the financial postion of the Group
Assets
Cash and cash equivalents
(161)
-
Trade & other receivables and Contract assets
3,192
-
Diamond and other inventory
1,995
-
Property, plant and equipment
2,385
-
Right of Use Assets
8,296
-
Assets disposed
15,707
-
Liabilities
-
Trade and other payables
9,784
-
Provisions
1,500
-
Lease liabilities
8,612
-
Liabilities disposed
19,896
-
Net assets disposed of
(4,189)
-
Amounts included in accumulated OCI
Foreign currency translation reserve
(5,153)
2,479
Cash flows for the period
Operating
(537)
330
Investing
(351)
(878)
Financing
656
(550)
Net cash flow
(232)
(1,098)
Earnings per share
Cents
Cents
Basic(loss)/earnings per share
(5.14)
(3.88)
Diluted (loss)/earnings per share
(4.98)
(3.74)
58
Notes to the Consolidated Financial Statements
Discontinued Operations (continued)
Additional information
As per the ASX announcements of 15 May 2024 and 25 June 2024 the Board decided to divest Mothae and a sale
agreement was executed in this regard during June with local Lesotho company, Lephema Executive Transport
(Pty) Ltd. The sale was fully completed with effect from 31 July 2024. Mothae’s assets and liabilities have been
derecognised and its trading results treated as a discontinued operation in the Statement of Profit or Loss.
As per the ASX announcement on 2 April 2024 the Group completed exploration work at the Orapa Area F Project
in Botswana. No further work is planned on the project and the exploration licence has lapsed. The Board has
also decided not to continue with further exploration work on the Brooking tenements and put the project up for
sale. The previously capitalised exploration cost for both projects were expensed during the current period and
classified as discontinued operations.
7.
Earnings per Share
Financial Overview
Accounting Policy
Basic earnings/ (loss) per share is calculated by dividing the net profit/ (loss) attributable to the ordinary
shareholders of the Company by the weighted average number of ordinary shares of the Company during the
period. Diluted earnings/ (loss) per share is determined by adjusting the net profit/ (loss) attributable to the
ordinary shareholders and the number of shares outstanding for the effects of all dilutive potential shares, which
comprise share options.
31 Dec 2024
31 Dec 2023
Cents
Cents
Basic loss per share
(7.02)
(3.14)
Basic loss per share - continuing operations
(1.88)
0.74
Diluted loss per share
(6.79)
(3.02)
Diluted loss per share - continuing operations
(1.82)
0.71
Loss used in calculating earnings per share
US$000
US$000
Attributable to members of the Company used in calculating:
- basic earnings per share
(20,488)
(9,051)
- basic earnings per share - continuing operations
(5,477)
2,128
- diluted earnings per share
(20,488)
(9,051)
- diluted earnings per share - continuing operations
(5,477)
2,128
Weighted average number of shares used as the denominator
Number
Number
Weighted average number of ordinary shares outstanding during
the period used in calculation of:
- basic earnings per share
291,817,266
287,911,975
- diluted earnings per share
301,555,004
299,250,671
59
Notes to the Consolidated Financial Statements
8. Financial Instruments and Financial Risk Management
Financial Overview
Additional information
Financial risk management
The Group has exposure to market, credit and
liquidity risks from the use of financial instruments.
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. Further
quantitative disclosures are included throughout
this financial report.
The Board of Directors has overall responsibility for
the establishment and oversight of the risk
management framework. Risk management policies
are established to identify and analyse the risks
faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to
limits. Risk management policies and systems are
reviewed to reflect changes in market conditions
and the Group’s activities. The Group, through its
training
and
management
standards
and
procedures, aims to develop a disciplined and
constructive control environment in which all
employees understand their roles and obligations.
MARKET RISK
COMMODITY PRICE RISK
The Group is focussed on its diamond mining and
exploration interests in Africa and Australia.
Accordingly, the Group is exposed to the global
pricing structures of the diamond market.
31 Dec 2024
31 Dec 2023
Note
US$000
Summary of carrying value of financial instruments
Financial assets
Cash and cash equivalents
8a
194
1,317
Trade and other receivables
8b
260
2,466
Other current financial assets
8c
1,142
3,923
Non-current financial assets
8c
635
699
2,231
8,405
Financial liabilities
Trade and other payables
8d
1,691
8,231
Current borrowings
8e
623
235
2,314
8,466
Summary of amounts recognised in profit or loss
Fair value adjustments
Gain in respect of the alluvial project receivable
-
1,832
Gain on borrowing embedded derivatives
-
522
-
2,354
Foreign exchange loss
On financial instruments
(1,562)
(32)
(1,562)
(32)
Net finance cost/ (income) on financial instruments
4
34
517
60
Notes to the Consolidated Financial Statements
Financial Instruments and Financial Risk Management (continued)
FOREIGN EXCHANGE RISK
The Group operates internationally and is exposed
to foreign exchange risk arising from various
currency exposures, primarily with respect to the US
dollar, Australian dollar, South African rand and
Angolan kwanza. Foreign exchange risk arises from
future commercial transactions, recognised assets
and liabilities and net investments in foreign
operations that are not in the individual business
unit’s functional currency. The Group manages its
foreign exchange risk by monitoring its net
exposures, maintaining an appropriate balance
between foreign currency assets and liabilities and
making use of hedging instruments. The Group does
not speculate with the use of hedging instruments
and derivatives. The extent of the Group’s exposure
to foreign currency risk at balance date is disclosed
below for each category of financial instrument.
CASH FLOW INTEREST RATE RISK
Cash flow interest rate risk, is the risk that a financial
instrument’s value will fluctuate as a result of
changes in the market interest rates on interest-
bearing financial instruments. The Group does not
currently
use
derivatives
to
mitigate
these
exposures. The extent of the Group’s exposure to
interest rate risk at balance date is disclosed below
for each category of financial instrument.
CREDIT RISK
Credit risk refers to the risk that a counterparty will
default on its contractual obligations resulting in a
financial loss to the Group. The Group’s potential
concentration of credit risk mainly relates to
amounts advanced to SML (Note 8c). The Group’s
short-term cash surpluses are placed with banks
that have investment grade ratings. The maximum
credit risk exposure relating to the financial assets is
represented by their carrying values as at the
balance sheet date.
LIQUIDITY RISK
Liquidity risk is the risk that the Group will not be
able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to
ensure, as far as possible, that it will always has
sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to
the Group’s reputation.
Ultimate
responsibility
for
liquidity
risk
management rests with the Board of Directors. The
Group manages liquidity risk by maintaining
adequate cash reserves, or from funds raised in the
market, or by debt and by continuously monitoring
forecast and actual cash flows. The liquidity profile
of the Group’s financial liabilities are disclosed in the
relevant notes below.
Capital risk management
The Group’s objectives when managing capital are to
safeguard its ability to continue as a going concern,
so as to maintain a strong capital base sufficient to
maintain future exploration and development of its
projects. In order to maintain or adjust the capital
structure, the Group may return capital to
shareholders, issue new shares, raise debt finance or
sell assets to reduce debt. The Group’s focus has
been to raise sufficient funds through equity and
debt finance to fund exploration & evaluation, mine
development and corporate overheads.
Fair value hierarchy
Details of the significant accounting policies and
methods adopted, including the criteria for
recognition, the basis of measurement and the basis
on which revenues and expenses are recognised, in
respect of each class of financial asset, financial
liability and equity instrument are disclosed below.
61
Notes to the Consolidated Financial Statements
Financial Instruments and Financial Risk Management (continued)
The financial assets and liabilities are classified as
follows in terms of the fair value hierarchy:
-
the SML receivable (Note 8c): level 3 due to
the use of unobservable inputs; and
-
other
financial
assets
and
liabilities
approximate their net fair value, determined
in accordance with the accounting policies.
Accounting policy
Recognition, initial measurement and derecognition
Financial
assets
and
financial
liabilities are
recognised when the Group becomes a party to the
contractual provisions of the financial instrument
and are measured initially at fair value adjusted by
transactions costs, except for those carried at fair
value through profit or loss, which are measured
initially at fair value. Subsequent measurement of
financial assets and financial liabilities are described
below.
Financial assets are derecognised when the
contractual rights to the cash flows from the
financial asset expire, or when the financial asset and
all substantial risks and rewards are transferred. A
financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Subsequent measurement of financial assets
For the purpose of subsequent measurement,
financial assets of the Group are classified into either
the amortised cost or fair value through profit or loss
(“FVPL”) categories. Classifications are determined
by both the Group’s business model for managing
the financial asset and the contractual cash flow
characteristics of the financial assets.
All income and expenses relating to financial assets
that are recognised in profit or loss are presented
within finance costs, finance income or other
financial items, except for impairment of trade
receivables which is presented within other
expenses.
FINANCIAL ASSETS AT AMORTISED COST
Financial assets are measured at amortised cost if
the assets meet the following conditions (and are not
designated as FVPL):
-
they are held with the objective to hold the
assets and collect its contractual cash flows;
-
the contractual terms of the financial assets
give rise to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
After initial recognition, these are measured at
amortised cost using the effective interest method.
Discounting is omitted where the effect of
discounting is immaterial. The Group’s cash and cash
equivalents, trade and most other receivables fall
into this category of financial instruments.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR
LOSS
Financial assets that are held within a different
business model other than ‘hold to collect’ or ‘hold to
collect and sell’ are categorised at fair value through
profit and loss. Further, irrespective of business
model financial assets whose contractual cash flows
are not solely payments of principal and interest are
accounted for at FVPL. All derivative financial
instruments fall into this category.
Subsequent measurement of financial liabilities
The Group’s financial liabilities include borrowings,
trade and other payables and derivative financial
instruments. Subsequent to initial recognition,
financial liabilities are measured at amortised cost
using the effective interest method, except for
derivatives and financial liabilities designated at
FVPL, which are carried subsequently at fair value
with gains or losses recognised in profit or loss.
All interest-related charges and, if applicable,
changes in an instrument’s fair value that are
reported in profit or loss are included within finance
costs or finance income.
62
Notes to the Consolidated Financial Statements
Financial Instruments and Financial Risk Management (continued)
Leases
Contracts are assessed at inception to determine
whether a contract is, or contains, a lease. It is
classified as such if the contract conveys the right to
control the use of an identified asset for a period of
time in exchange for consideration.
A single recognition and measurement approach is
applied for all leases, except for short-term leases,
leases of low-value assets and leases to explore for
or mine minerals and similar non-regenerative
resources. The Group recognises lease liabilities to
make lease payments and right-of-use assets
representing the right to use the underlying assets.
Right-of-use assets are included under Property
Plant and Equipment (refer note 10).
Lease
liabilities
are
recognised
at
the
commencement date of the lease and measured at
the present value of lease payments to be made over
the lease term. The lease payments include fixed
payments (including in-substance fixed payments)
less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and
amounts expected to be paid under residual value
guarantees. The lease payments also include the
exercise price of a purchase option reasonably
certain to be exercised by the Group and payments
of penalties for terminating the lease, if the lease
term reflects the Group exercising the option to
terminate.
The Group uses its incremental borrowing rate at the
lease commencement date to calculate the present
value of lease payments, if the interest rate implicit
in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities
is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition,
the
carrying
amount
of
lease
liabilities
is
remeasured if there is a modification, a change in the
lease term, a change in the lease payments (e.g.,
changes to future payments resulting from a change
in an index or rate used to determine such lease
payments) or a change in the assessment of an
option to purchase the underlying asset.
Lease liabilities are included in interest-bearing
loans and borrowings.
Lease payments for short-term leases, leases of low-
value assets and leases to explore for or mine
minerals as well as variable lease payments that do
not depend on an index or a rate are recognised as
expenses (unless they are incurred to produce
inventories) in the period in which the event or
condition that triggers the payment occurs.
Determination of fair values
TRADE AND OTHER RECEIVABLES
The fair value of trade and other receivables is
estimated as the present value of future cash flows,
discounted at the market rate of interest at the
reporting date.
FINANCIAL LIABILITIES
Fair value, which is determined for disclosure
purposes, is calculated based on the present value of
future principal and interest cash flows, discounted
at the market rate of interest at the reporting date.
Significant accounting judgements, estimates and
assumptions
FINANCIAL ASSETS
The Group’s financial assets include the receivable in
respect of associate, SML, that represents the future
reimbursement in US dollars of the Group’s historic
alluvial exploration and development costs incurred
at Lulo. The recoverable amount of the receivable is
reassessed using calculations which incorporate
various key assumptions as per above.
63
Notes to the Consolidated Financial Statements
Financial Instruments and Financial Risk Management (continued)
8a.
Cash and Cash Equivalents
Financial Overview
Additional Information
Foreign exchange sensitivity analysis
A sensitivity analysis has been prepared to demonstrate the sensitivity to a reasonably possible change in foreign
exchange rates, with all other variables held constant.
A change of 10 percentage points in foreign exchange rates at the reporting date would have an estimated impact
of US$18k (2023: US$100k) before tax on the statement of profit of loss and other comprehensive income. There
would be no effect on the equity reserves other than those directly related to the statement of profit of loss and
other comprehensive income. The analysis is performed on the same basis as for the prior period.
31 Dec 2024
31 Dec 2023
US$000
Balances on hand
Bank balances
194
1,317
194
1,317
Foreign exchange risk
Cash balances exposed to foreign currency risk, based on notional amounts
178
103
Interest rate risk
Cash balances held at variable interest rates
194
1,317
Average rate for 2024: 2.2% (2023: 2.1%)
64
Notes to the Consolidated Financial Statements
Financial Instruments and Financial Risk Management (continued)
8b.
Trade and Other Receivables
Financial Overview
Additional Information
Foreign exchange sensitivity analysis
A sensitivity analysis has been prepared to demonstrate the sensitivity to a reasonably possible change in foreign
exchange rates, with all other variables held constant.
A change of 10 percentage points in foreign exchange rates at the reporting date would have an estimated impact
of US$0.02 million (2022: US$0.02million) before tax on the statement of profit of loss and other comprehensive
income. There would be no effect on the equity reserves other than those directly related to the statement of
profit of loss and other comprehensive income. The analysis is performed on the same basis as for the prior
period.
Credit risk
The Group is not exposed to any significant credit risk.
31 Dec 2024
31 Dec 2023
US$000
Current
GST/ VAT receivable
54
1,307
Prepayments and other receivables
206
1,159
260
2,466
Foreign exchange risk
Receivable balances exposed to foreign currency risk, based on
notional amounts
186
229
Interest rate risk
Non-interest bearing balances
260
2,466
65
Notes to the Consolidated Financial Statements
Financial Instruments and Financial Risk Management (continued)
8c.
Financial Assets
Financial Overview
Additional information
The receivable in respect of SML was transferred from Alluvial development in 2016 and represents the future
reimbursement in US dollars of the Company’s historic alluvial exploration and development costs incurred at
Lulo. The receivable was classified as a current asset from 2023. Prior to 2023 it was re-measured to its estimated
fair value using the income approach, which is a valuation technique that converts future cash flow into a single
discounted present value and is classified as level 3 in the fair value hierarchy due to the use of unobservable
inputs.
Significant unobservable inputs are the timing and amounts of future repayments which are based on the
expected cash flows per the Company’s forecast model for SML. Sensitivity factors which could impact the
valuation include operational recoveries, prices and delays in the timing of repayments which will decrease the
fair value estimate.
31 Dec 2024
31 Dec 2023
US$000
Non-current financial assets
Receivable in respect of SML
At 1 January
3,923
12,643
Investment during the period
2,378
565
Repayment received
(700)
(5,781)
Transferred to Deferred exploration and evaluation costs for Kimberlite JV
(4,459)
(3,504)
At end of period
1,142
3,923
Less: Current portion of receivable
(1,142)
(3,923)
Non-current receivable
-
-
Security deposit for environmental rehabilitation in respect of Merlin
635
699
Total non-current financial assets
635
699
Current financial assets
Receivable in respect of SML
Current portion of receivable
1,142
3,923
Interest rate risk
Non-interest bearing balances
1,142
3,923
66
Notes to the Consolidated Financial Statements
Financial Instruments and Financial Risk Management (continued)
8d.
Trade and Other Payables
Financial Overview
Additional Information
The short-term advance under 2023 relates to monies advanced to Mothae in terms of the minimum cash price
of US$630/ carat contained in the partnership agreement with Safdico International Limited. The advance was
non-interest bearing and repayable from future sales, polished partnership profits, in cash by 31 December 2022,
or as otherwise agreed.
Foreign exchange sensitivity analysis
A sensitivity analysis has been prepared to demonstrate the sensitivity to a reasonably possible change in foreign
exchange rates, with all other variables held constant.
A change of 10 percentage points in foreign exchange rates at the reporting date would have an estimated impact
of US$153k (2023: US$100k) before tax on the statement of profit of loss and other comprehensive income. There
would be no effect on the equity reserves other than those directly related to the statement of profit of loss and
other comprehensive income. The analysis is performed on the same basis as for the prior period.
31 Dec 2024
31 Dec 2023
US$000
Trade payables
548
1,275
Short-term advance
-
2,213
Employee related accruals
711
1,875
Accruals and other payables
432
2,868
Total
1,691
8,231
Foreign exchange risk
Payable balances exposed to foreign currency risk, based on
notional amounts
1,528
1,493
Interest rate risk
Non-interest bearing balances
1,691
8,231
Liquidity risk
Contractual maturities profile
Payable within one year
1,691
8,231
67
Notes to the Consolidated Financial Statements
Financial Instruments and Financial Risk Management (continued)
8e.
Borrowings
Financial Overview
31 Dec 2024
31 Dec 2023
US$000
Current borrowings
Lease liabilities
-
235
Other short-term loans
623
-
Total
623
235
Foreign exchange risk
Borrowings exposed to foreign currency risk, based on notional amounts
623
-
Interest rate risk
Refer interest rate sensitivity analysis below
Balances at fixed interest rates
623
235
Average rate for 2024: 10% (2023: 9.8% )
Liquidity risk
Contractual maturities profile, including estimated interest
payments and excluding the impact of netting agreements
Borrowings
Payable within one year
623
-
Payable after one year but less than five years
-
-
Payable after more than five years
-
-
Leases
Payable within one year
-
240
Payable after one year but less than five years
-
-
Payable after more than five years
-
-
Other disclosures in respect of leases
Cash outflow
135
1,726
Low value lease expense
273
168
Expense relating to variable lease payments not included in the
measurement of lease liabilities
-
5,170
Non-cash financing recognised
-
-
68
Notes to the Consolidated Financial Statements
Financial Instruments and Financial Risk Management (continued)
Borrowings - additional Information
Terms and conditions
LEASE LIABILITIES
The prior period lease liabilities consist of the amounts due in respect of the following:
•
Mining equipment and plant at Mothae, leased on a monthly basis until May 2024; and
•
Various lease contracts for office space, office and other equipment used in its operations. Lease terms
vary between 1 and 3 years.
Generally, the Group’s obligations under its leases are secured by the lessor’s title to the leased assets. Certain
lease contracts include extension and termination options.
OTHER LOANS
The short-term loan amount reflects the balance due to New Azilian Pty Ltd, an entity associated with former
non-executive director Ross Stanley. The terms of the loan include the following:
•
Loan facility of A$1 million, fully utilised;
•
The principal balance and accrued interest is payable in April 2025;
•
Interest is payable at 10% pa;
•
Security: New Azilian holds security over Lucapa’s shares in and intergroup loan to its subsidiary,
Australian Natural Diamonds Pty Ltd.
Cash flow sensitivity analysis for variable rate instruments
A sensitivity analysis has been prepared to demonstrate the sensitivity to a reasonably possible change in
interest rates, with all other variables held constant through the impact on floating rate interest rates.
A change of 100 basis points in interest rates at the reporting date would have an estimated impact of US$6k
(2023: US$10k) before tax on the statement of profit of loss and other comprehensive income. There would be
no effect on the equity reserves other than those directly related to the statement of profit of loss and other
comprehensive income. The analysis is performed on the same basis as for the prior period.
Foreign exchange sensitivity analysis
A sensitivity analysis has been prepared to demonstrate the sensitivity to a reasonably possible change in
foreign exchange rates, with all other variables held constant. A change of 10 percentage points in foreign
exchange rates at the reporting date would have an estimated impact of US$62k (2023: US$0k) before tax on
the statement of profit of loss and other comprehensive income. There would be no effect on the equity
reserves other than those directly related to the statement of profit of loss and other comprehensive income.
The analysis is performed on the same basis as for the prior period.
69
Notes to the Consolidated Financial Statements
9. Inventories
Financial Overview
Additional Information
During the year, US$3.2 million (2023: US$6.8 million) was recognised as an expense under cost of sales for
inventories carried at net realisable value.
Accounting policy
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the
first-in first-out principle, and includes expenditure incurred in acquiring the inventories, production or
conversion costs and other costs incurred in bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.
31 Dec 2024
31 Dec 2023
US$000
Diamond inventory
-
922
Consumables and other inventory
25
1,429
25
2,351
70
Notes to the Consolidated Financial Statements
10. Property Plant and Equipment
Financial Overview
Deferred
exploration and
evaluation
Mine
development*
Plant and
equipment
Decom-
missioning
assets
Stripping
activity
assets
Right-of-use
assets
Other
assets
Total
US$000
Cost
Balance at 1 January 2023
31,727
30,808
18,565
1,307
855
3,132
1,945
88,339
Additions
4,221
59
3,516
5
284
1,651
146
9,882
Disposals
-
-
(11)
(418)
-
(3,875)
(2)
(4,306)
Foreign currency movements
(146)
(466)
(1,257)
(58)
(59)
(232)
(122)
(2,340)
Balance at 31 December 2023
35,802
30,401
20,813
836
1,080
676
1,967
91,575
Additions
4,955
1,851
103
30
-
10,075
25
17,039
Disposals
-
(6,878)
(16,603)
(337)
(1,058)
(10,739)
(1,738)
(37,353)
Foreign currency movements
(2,116)
(1,595)
(448)
(55)
(22)
(12)
(45)
(4,293)
Balance at 31 December 2024
38,641
23,779
3,865
474
-
-
209
66,968
Accumulated depreciation
Balance at 1 January 2023
2,040
15,206
3,279
133
322
3,037
1,212
25,229
Amortisation/ depreciation charge for the year
-
1,324
2,033
25
617
1,515
352
5,866
Impairment
-
154
12,420
126
136
190
344
13,370
Disposals
-
-
(11)
-
-
(3,875)
(2)
(3,888)
Foreign currency movements
(144)
(129)
(267)
(9)
(18)
(223)
(75)
(865)
Balance at 31 December 2023
1,896
16,555
17,454
275
1,057
644
1,831
39,712
Amortisation/ depreciation charge for the year
-
208
159
6
2
2,019
39
2,433
Impairment
2,325
-
-
-
-
-
-
2,325
Disposals
-
(7,318)
(14,128)
(275)
(1,037)
(2,652)
(1,684)
(27,094)
Foreign currency movements
(1,898)
(128)
(307)
(6)
(22)
(11)
(41)
(2,413)
Balance at 31 December 2024
2,323
9,317
3,178
-
-
-
145
14,963
Net carrying amounts
At 31 December 2023
33,906
13,846
3,359
561
23
32
136
51,863
At 31 December 2024
36,318
14,462
687
474
-
-
64
52,005
* Mine Development includes Merlin Exploration and Evaluation cost of US$13.9m.
71
Notes to the Consolidated Financial Statements
Property Plant and Equipment (continued)
Additional Information
Deferred exploration and evaluation costs
Deferred exploration and evaluation costs represent
the cumulative expenditure incurred in relation to
the Lulo Kimberlite Project including plant and
equipment. The Company continues to explore for
the primary kimberlite sources of the alluvial
diamonds being recovered on the Lulo concession.
The diamond exploration and evaluation projects in
Botswana (Orapa Area F) and Australia (Brooking)
were discontinued in 2024.
The Group has a 39% interest in the Project Lulo
Kimberlite Venture (“the JV”), an unincorporated
entity classified as a joint operation that operates
under the terms of a Mineral Investment Contract
entered into between the partners. Accordingly, the
Group’s interest in the assets, liabilities, revenues
and expenses attributable to the JV have been
included in the appropriate line items in the
consolidated
financial
statements.
Deferred
exploration and evaluation costs of US$36.3 million
(31 December 2023: US$31.4 million) in the
schedule above are related to the JV.
Other assets
Other
assets
comprise
vehicles,
computer
equipment,
furniture
&
fittings
and
office
equipment.
Impairment testing
The Group recognised an impairment charge in 2023
in respect of Mothae. The following key assumption
averages were used in the value-in-use model for
impairment testing:
•
Ore volume treated: 1.4 Mtpa (2022: 1.4
Mtpa);
•
US$/ carat sold: 823 (2022: 1,351);
•
Discount rate: 10% (2022: 10%);
•
ZAR/ US$ exchange rate: 18.8 (2022: 17.0).
The first three assumptions are considered to be
level three fair value measurements in both years as
they are derived from valuation techniques that
include inputs that are not based on observable
market data.
Previously capitalised exploration and evaluation
cost in respect of Botswana and Brooking amounting
to US$2.3 million were impaired during the year.
As at the reporting date the mineral exploration
licences for the Lulo Kimberlite Project in Angola
were under application for renewal. The Group
believes it has complied with all licence conditions,
including minimum expenditure requirements, and
is not aware of any matters or circumstances that
have arisen that would result in the application for
renewal of the exploration licences not being
granted in the ordinary course of business. The
Group has determined that no impairment of the
capitalised exploration and evaluation expenditure
relating to these exploration licences is necessary as
it is considered that there is a reasonable basis to
expect that the renewal applications will be granted
and that the Group is otherwise proceeding with
exploration and development activities on the
exploration licences. Should any of the exploration
licences not be renewed, the relevant capitalised
amount as at the reporting date will be expensed in
the statement of profit or loss and other
comprehensive income.
Accounting policy
Recognition and measurement
Items of property plant and equipment are
measured at cost less accumulated depreciation and
accumulated impairment losses.
Cost
includes
expenditure
that
is
directly
attributable to the acquisition of the asset. The cost
of self-constructed assets includes the cost of
materials and direct labour, any other costs directly
attributable to bringing the asset to a working
condition for its intended use, and the costs of
dismantling and removing the items and restoring
the site on which they are located.
When parts of an item of property plant and
equipment have different useful lives, they are
accounted for as separate items (major components)
of property plant and equipment.
72
Notes to the Consolidated Financial Statements
Property Plant and Equipment (continued)
Gains and losses on disposal of an item of property
plant and equipment are determined by comparing
the proceeds from disposal with the carrying
amount of property plant and equipment and are
recognised net within “other income” in the
statement of profit or loss and other comprehensive
income.
Subsequent costs
The cost of replacing part of an item of property
plant and equipment is recognised in the carrying
amount of an item if it is probable that the future
economic benefits embodied within the item will
flow to the Group and the cost of the item can be
measured reliably. The carrying amount of the
replaced part is derecognised. All other costs are
recognised in the statement of profit or loss and
other comprehensive income as an expense
incurred.
Depreciation
Depreciation is recognised in the statement of profit
or loss and other comprehensive income on a
reducing balance basis over the estimated useful
lives of each part of an item of property plant and
equipment.
The estimated useful lives in the current and
comparative periods are as follows:
•
Computer equipment: 3-5 years
•
Office equipment : 5-10 years
•
Mine development: Lesser of life of mine or
period of lease
•
Mine infrastructure and plant facilities: Based on
resources on a unit of production basis
Depreciation methods, useful lives and residual
values are reviewed at each reporting date.
Mine development
Once a mining project has been established as
commercially
viable
and
technically
feasible,
expenditure other than that on land, buildings, plant
and equipment is capitalised as Mine development.
Development
includes
previously
capitalised
exploration and evaluation costs, pre-production
development
costs,
certain
mining
assets,
development
studies
and
other
subsurface
expenditure pertaining to that area of interest. On
completion, development cost is depreciated as per
above. If, after having commenced the development
activity, a judgement is made that a development
asset is impaired, the appropriate amount is written
off to profit and loss.
Deferred exploration and evaluation
Exploration and evaluation expenditure incurred is
accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the
extent that the right to tenure of each identifiable
area of interest are current, and either the costs are
expected to be recouped through successful
development of the area, or activities in the area
have not yet reached a stage that permits reasonable
assessment of the existence of economically
recoverable reserves. Exploration assets that are not
available for use are not amortised.
Exploration and evaluation assets are initially
measured at cost and include acquisition of mining
tenements, studies, exploratory drilling, trenching
and sampling and associated activities and an
allocation of depreciation of assets used in
exploration activities. General and administrative
costs are only included in the measurement of
exploration costs where they are related directly to
operational activities in a particular area of interest.
Deferred exploration and evaluation costs in relation
to an abandoned area are written off in full against
profit or loss in the period in which the decision to
abandon that 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.
Stripping activity assets
Costs associated with removal of waste overburden
are classified as stripping costs. Stripping activities
that are undertaken during the production phase of
a surface mine may create two benefits, being either
the production of inventory or improved access to
the ore to be mined in the future.
73
Notes to the Consolidated Financial Statements
Property Plant and Equipment (continued)
Where the benefits are realised in the form of
inventory produced in the period, the production
stripping costs are accounted for as part of the cost
of producing those inventories. Where production
stripping costs are incurred and where the benefit is
the creation of mining flexibility and improved
access to ore to be mined in the future, the costs are
recognised as a non-current asset, referred to as a
‘stripping activity asset’ and included as a separate
category of Property plant and equipment, if:
•
future economic benefits (being improved
access to the orebody) are probable;
•
the component of the orebody for which access
will be improved can be accurately identified;
and
•
the costs associated with the improved access
can be reliably measured.
If all the criteria are not met, the production
stripping costs are charged to the statement of profit
or loss as operating costs. The stripping activity
asset is initially measured at cost, which is the
accumulation of costs directly incurred to perform
the stripping activity that improves access to the
identified component of ore, plus an allocation of
directly attributable overhead costs. If incidental
operations are occurring at the same time as the
production stripping activity, but are not necessary
for the production stripping activity to continue as
planned, these costs are not included in the cost of
the stripping activity asset. If the costs of the
stripping activity asset and the inventory produced
are not separately identifiable, a relevant production
measure is used to allocate the production stripping
costs between the inventory produced and the
stripping activity asset.
The stripping activity asset is subsequently
amortised over the expected useful life of the
identified component of the orebody that became
more accessible as a result of the stripping activity.
The expected average stripping ratio over the
average life of the area being mined is used to
amortise the stripping activity. As a result, the
stripping activity asset is carried at cost less
amortisation and any impairment losses.
The average life of area cost per tonne is calculated
as the total expected costs to be incurred to mine the
orebody divided by the number of tonnes expected
to be mined. The average life of area stripping ratio
and the average life of area cost per tonne are
recalculated
annually
in
light
of
additional
knowledge and changes in estimates. Changes in the
stripping ratio are accounted for prospectively as a
change in estimate.
Right-of-use assets
Right-of-use
assets
are
recognised
at
the
commencement date of a lease (i.e., the date the
underlying asset is available for use) and are
measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-
of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease
payments made at or before the commencement
date less any lease incentives received. Right-of-use
assets are depreciated on a straight-line basis over
the shorter of the lease term and the estimated
useful lives of the assets.
Joint operations
A joint arrangement in which the Group has direct
rights to underlying assets and obligations for
underlying liabilities is classified as a joint operation.
Interests in joint operations are accounted for by
recognising the Group’s assets (including its share of
any assets held jointly); its liabilities (including its
share of any liabilities incurred jointly); its revenue
from the sale of its share of the output arising from
the joint operation; its share of the revenue from the
sale of the output by the joint operation; and its
expenses (including its share of any expenses
incurred jointly).
74
Notes to the Consolidated Financial Statements
Property Plant and Equipment (continued)
Significant accounting judgements, estimates and
assumptions
ASSET USEFUL LIVES AND RESIDUAL VALUES
Property, plant and equipment are depreciated over
its useful life taking into account residual values
where appropriate. The actual useful lives of the
assets and residual values are assessed annually and
may vary depending on a number of factors. In re–
assessing asset useful lives, factors such as
technological innovation, product life cycles and
maintenance programmes are taken into account.
Residual value assessments consider issues such as
future market conditions, the remaining life of the
asset and projected disposal values.
VALUATION OF MINERAL PROPERTIES
The Group carries the acquisition of its mineral
properties at cost less any provision for impairment.
The Group undertakes a periodic review of the
carrying values of mineral properties and whenever
events or changes in circumstances indicate that
their carrying values may exceed their fair value. In
undertaking this review, management of the Group
is required to make significant estimates. These
estimates are subject to various risks and
uncertainties, which may ultimately have an effect
on the expected recoverability of the carrying values
of the mineral properties and related expenditures.
EXPLORATION AND EVALUATION ASSETS
The Group assesses the carrying value of exploration
and evaluation assets in accordance with the
accounting policy noted above. The basis of
determining the carrying value involves numerous
estimates and judgements resulting from the
assessment of ongoing exploration activities, as per
the accounting policy note.
DEVELOPMENT
Development activities commence after commercial
viability and technical feasibility of the project is
established. Judgement is applied in determining
when a project is commercially viable and
technically feasible. In exercising this judgement,
management is required to make certain estimates
and assumptions, with inherent uncertainty, as to
the future events.
MINERAL RESOURCE, ORE RESERVES AND PRODUCTION
TARGET* ESTIMATES
Ore reserves and production target estimates are
estimates of the amount of ore that can be
economically and legally extracted from the mineral
resources of the Group’s mining properties. An ore
reserve is the economically mineable part of a
measured and/ or indicated resource. A production
target may include lower confidence inferred
resources under certain circumstances and if there
are reasonable grounds to do so. Such production
target estimates and changes to them may impact
the company’s reported financial position and
results, in the following way:
•
The carrying value of exploration and evaluation
assets, mine properties, property plant and
equipment, and goodwill may be affected due to
changes in estimated future cash flows;
•
Depreciation and amortisation charges in the
statement
of
profit
or
loss
and
other
comprehensive income may change where such
charges are determined using the unit of
production method, or where the useful life of
the related assets change;
•
Capitalised stripping costs recognised in the
statement of financial position, as either part of
mine properties or inventory or charged to
profit or loss, may change due to changes in
stripping ratios;
•
Provisions for rehabilitation and environmental
provisions may change where reserve estimate
changes affect expectations about when such
activities will occur and the associated cost of
these activities;
•
The recognition and carrying value of deferred
income tax assets may change due to changes in
the judgements regarding the existence of such
assets and in estimates of the likely recovery of
such assets.
* The term “production target” is defined to mean a projection or forecast
of the amount of mineral to be extracted from a particular mining tenement
or tenements for a period that extends past the current year and the
forthcoming year.
75
Notes to the Consolidated Financial Statements
Property Plant and Equipment (continued)
The Group estimates its mineral resource, ore reserves and production targets based on information compiled
by appropriately qualified persons relating to the geological and technical data on the size, depth, shape and
grade of the ore body and suitable production techniques and recovery rates. Such an analysis requires complex
geological judgements to interpret the data. The estimation of ore reserves and production targets are based
upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements and
production costs, along with geological assumptions and judgements made in estimating the size and grade of
the ore body
The Group estimates and reports ore reserves and mineral resources in line with the principles contained in the
Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012) published by
the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute
of Geoscientists and Minerals Council of Australia (“JORC Code”).
76
Notes to the Consolidated Financial Statements
11. Investment in Associate
Financial Overview
Additional Information
The Group has a 40% ownership in SML and has
recognised its share of SML’s results since its formal
incorporation in May 2016.
Accounting policy
Associates are those entities over which the Group is
able to exert significant influence, but which are not
subsidiaries. A joint venture is an arrangement that
the Group controls jointly with one or more other
investors, and over which the Group has rights to a
share of the arrangement’s net assets rather than
direct rights to underlying assets and obligations for
underlying liabilities.
Investments in associates and joint ventures are
accounted for using the equity method
Any goodwill or fair value adjustment attributable to
the Group’s share in the associate or joint venture is
not recognised separately and is included in the
amount recognised as investment.
31 Dec 2024
31 Dec 2023
US$000
Summarised financial information of SML
Current assets
18,824
30,450
Non-current assets
19,376
28,322
Current liabilities
6,394
15,856
Non-current liabilities
3,944
2,844
Equity
27,862
40,072
Group’s carrying amount of the investment
13,396
18,281
Contingent liabilities
-
-
Revenue
54,468
78,556
Cost of sales
(43,791)
(39,914)
Administrative and selling expenses
(13,169)
(22,079)
Fair value adjustments
-
(1,831)
(Loss)/ profit before tax
(2,492)
14,732
Income tax expense
281
(4,243)
(Loss)/ profit for the period
(2,211)
10,489
Total comprehensive (loss)/ income for the period
(2,211)
10,489
Group’s share of (loss)/ profit for the period
(885)
4,195
EBITDA
8,105
23,637
Capital commitments
Payable within one year
- Approved, not yet contracted
3,348
2,237
- Approved and contracted
760
1,637
77
Notes to the Consolidated Financial Statements
Investment in Associate (continued)
The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise
the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture,
adjusted where necessary to ensure consistency with the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its associates and joint ventures are
eliminated to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the
underlying asset is also tested for impairment.
78
Notes to the Consolidated Financial Statements
12. Non-Current Provisions
Financial Overview
Additional Information
The provision for rehabilitation has been recognised
in respect of Merlin and Mothae projects. Mothae
was disposed of during 2024.
Merlin
The estimate is based on the Mining Management
Plan for Merlin as approved by the government of
the Northern Territory of Australia and discounted
back to present value using a pre-tax discount rate
that
reflects
current
market
assessments.
Assumptions include an estimated rehabilitation
timing of 15 years (2023:16 years), an annual
inflation rate of 3.0% (2023:3.0%) and a discount
rate of 4.6% (2023: 4.2%).
Accounting policy
A provision is recognised if, as a result of a past
event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market
assessments of the time value of money and, when
appropriate, the risks specific to the liability.
Asset retirement obligations
The Group recognises a liability for an asset
retirement obligation on long-lived assets when a
present legal or constructive obligation exists, as a
result of past events and the amount of the liability
is reasonably determinable. The obligations are
initially recognised and recorded as a liability based
on estimated future cash flows discounted at a credit
adjusted risk free rate. This is adjusted at each
reporting period for changes to factors including the
expected amount of cash flows required to discharge
the liability, the timing of such cash flows and the
credit
adjusted
risk
free
discount
rate.
Corresponding amounts and adjustments are added
to the carrying value of the related long-lived asset
and amortised or depleted to operations over the life
of the related asset.
Environmental liabilities
Environmental expenditures that relate to current
operations
are
expensed
or
capitalised
as
appropriate. Expenditures that relate to an existing
condition caused by past operations and which do
not contribute to current or future revenue
generation are expensed. Liabilities are recorded
when environmental assessments and/ or remedial
efforts are probable, and the costs can be reasonably
estimated.
Significant accounting judgements, estimates and
assumptions
Included in liabilities at the end of each reporting
period is an amount that represents an estimate of
the cost to rehabilitate the land upon which the
Group has carried out its exploration and evaluation
for mineral resources. Provisions are measured at
the present value of management's best estimate of
the costs required to settle the obligation at the end
of the reporting period. Actual costs incurred in
future periods to settle these obligations could differ
materially from these estimates. Additionally, future
changes to environmental laws and regulations, life
of mine estimates, and discount rates could affect the
carrying amount of this provision.
31 Dec 2024
31 Dec 2023
US$000
Provision for environmental rehabilitation
At 1 January
1,956
2,329
Increase/ (decrease) during the year
(19)
(413)
Unwinding of discount rate
25
167
Foreign exchange difference
(43)
(127)
Disposal of subsidiary
(1,377)
-
At end of period
542
1,956
79
Notes to the Consolidated Financial Statements
13. Share Capital and Share-Based Payments
Financial Overview
Additional Information
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share at meetings of the Company.
Share-based payments
31 Dec 2024
31 Dec 2024
Number
US$000
Listed securities
Movement in ordinary shares (ASX code: LOM)
On issue at beginning of period
1,439,559,875
154,230
Share consolidation (5:1)
(1,151,647,935)
-
Issue of shares on exercise of options and performance rights
2,210,059
324
Issue of shares
43,518,299
555
Transaction costs
-
(82)
On issue at end of period
333,640,298
155,027
Unlisted securities
Movement in unlisted options (A$0.08 exercise price; expire 30 July 2025)
On issue at beginning of period
5,000,000
-
Share consolidation (5:1)
(4,000,000)
-
On issue at end of period
1,000,000
-
31 Dec 2024
31 Dec 2023
US$000
Share-based payment recognised
Profit or Loss
Director and employee options
(83)
742
Non-cash financing and investing activities
Share issue expenses
-
-
Loan funding
-
-
Deferred exploration and evaluation costs
-
-
(83)
742
Weighted average remaining contractual life of share options and
performance rights in issue (years)
1.12
1.82
Weighted average Lucapa share price during the period/ year (A$)
(after 5:1 share consolidation)
0.066
0.195
80
Notes to the Consolidated Financial Statements
Share-based payments (continued)
Movement in Share options and Performance rights in issue and other share-based payment disclosures
Share options
Performance rights
Weighted
average price
(A$)
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Exercise price (A$)
$0.08
$0.00
$0.00
$0.00
$0.00
$0.00
Expiry date
30-Jun-25
31-Dec-25
31-Jan-27
29-Nov-27
31-Dec-26
30-Jun-28
Number on issue at beginning of period
5,000,000
22,959,090
8,206,295
10,497,030
11,027,380
9,875,264
0.01
Share consolidation (5:1)
(4,000,000)
(18,367,272)
(6,565,036)
(8,397,624)
(8,821,903)
(7,900,211)
Issue of options/ performance rights
-
-
-
-
-
-
-
Exercise of options/ performance rights
-
-
(1,641,259)
(568,800)
-
-
-
Expiry/ lapsing of options/ performance rights
-
(4,591,818)
-
(124,917)
-
-
On issue at end of period
1,000,000
0
(0)
1,530,606
2,080,560
1,975,053
0.01
Exercisable at end of period
1,000,000
-
-
-
2,080,560
-
81
Notes to the Consolidated Financial Statements
Share Capital and Share-based Payments (continued)
Accounting policy
Share capital
Equity instruments, including preference shares,
issued by the Company are recorded at the proceeds
received. Incremental costs directly attributable to
the issue of equity instruments are recognised as a
deduction from equity, net of any tax effects.
Share based payments
The fair value of options and rights granted is
measured using the Black-Scholes or binomial
option pricing models, taking into account the terms
and conditions upon which the instruments were
granted. The fair value is recognised in employee
benefits expense together with a corresponding
increase in equity (share-based payment reserve),
over the period in which the service and, where
applicable, the performance conditions are fulfilled.
The cumulative expense recognised at each
reporting date until the vesting date reflects the
extent to which the vesting period has expired and
the Group’s best estimate of the number of equity
instruments that will ultimately vest. The expense or
credit in profit or loss for a period represents the
movement in cumulative expense recognised as at
the beginning and end of that period.
Service and non-market performance conditions are
not taken into account when determining the grant
date fair value of awards, but the likelihood of the
conditions being met is assessed as part of the
Group’s best estimate of the number of equity
instruments that will ultimately vest. Market
performance conditions are reflected within the
grant date fair value.
Any other conditions attached to an award, but
without an associated service requirement, are
considered to be non-vesting conditions. Non-
vesting conditions are reflected in the fair value of an
award and lead to an immediate expensing of an
award unless there are also service and/ or
performance conditions.
No expense is recognised for awards that do not
ultimately vest because non-market performance
and/ or service conditions have not been met. Where
awards include a market or non-vesting condition,
the transactions are treated as vested irrespective of
whether the market or non-vesting condition is
satisfied, provided that all other performance and/
or service conditions are satisfied.
Where the terms of an equity-settled award are
modified, as a minimum an expense is recognised as
if the terms had not been modified. In addition, an
expense is recognised for any increase in the value of
the transaction as a result of the modification, as
measured at the date of modification.
Where an equity-settled award is cancelled, it is
treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is
recognised immediately. However, if a new award is
substituted for the cancelled award and designated
as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they
were a modification of the original award, as
described in the previous paragraph.
The amounts carried under share-based payment
reserves are allocated to share capital when
underlying shares are issued upon the conversion of
options or rights, and to accumulated income/ losses
upon the expiry of option or rights.
DETERMINATION OF FAIR VALUES
The fair value of options issued is measured using
the Black-Scholes or binomial option pricing models.
Measurement inputs include share price on
measurement date, exercise price of the instrument,
expected volatility (based on weighted average
historic volatility adjusted for changes expected due
to publicly available information), weighted average
expected life of the instruments (based on historical
experience and general option holder behaviour),
expected dividends, and the risk-free interest rate
(based on government bonds). Service and non-
market performance conditions attached to the
transactions are not taken into account in
determining fair value.
82
Notes to the Consolidated Financial Statements
Share Capital and Share-based Payments (continued)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The Company measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. Where required, the fair value of options granted is measured
using valuation models, taking into account the terms and conditions as set out above. 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 expenses and reserves.
83
Notes to the Consolidated Financial Statements
14. Commitments and Contingencies
15. Parent Entity Information
31 Dec 2024
31 Dec 2023
US$000
Operating lease commitments iro mining and exploration rights
Minimum lease payments under non-cancellable operating lease
agreements
Payable within one year
74
126
Payable after one year but less than five years
238
285
Payable after more than five years
1,063
-
1,375
411
Capital commitments
Payable within one year
Approved, not yet contracted
-
1,130
Approved and contracted
-
-
Contingencies
The Group did not have any contingent liabilities as at 31 December 2024 (2023: Nil).
31 Dec 2024
31 Dec 2023
US$000
Current assets
1,506
5,848
Total assets
69,828
74,053
Current liabilities
2,151
1,493
Total liabilities
2,151
1,493
Share capital
155,027
154,230
Reserves
(5,182)
(4,775)
Accumulated losses
(82,169)
(76,895)
67,676
72,560
Loss for the period
(5,276)
(36,259)
Total comprehensive loss for the period
(5,276)
(36,259)
Contingent liabilities
Guarantees issued in favour of suppliers of subsidiaries
-
1,639
84
Notes to the Consolidated Financial Statements
16. Related Party Disclosures
Financial Overview
*Relates to an amount approved by the Board payable to Mr Kennedy for expenses incurred in the conduct of his role as non-executive
Chairman of the Company since September 2017. Mr Kennedy previously took the view that until such time as the Group had repaid substantial
amounts of debt owing to three different entities, he would not make any claim for reimbursement of Company-related expenses.
Additional Information
Individual Directors’ and executives’ compensation disclosures
Information regarding individual Directors' and executives' compensation and some equity instruments
disclosures as required by Corporations Regulations 2M.3.03 is provided in the remuneration report section of
the Directors’ report. Apart from the details disclosed in this note, no Director has entered into a material contract
with the Company since the end of the previous financial year and there were no other material contracts
involving Director’s interests at period-end.
31 Dec 2024
31 Dec 2023
US$
Key management personnel compensation
Short-term employee benefits
660,712
1,215,853
Post-employment benefits
42,339
59,313
Share-based payments
(73,499)
187,652
629,552
1,462,818
Other related party transactions
Remuneration of spouse of Director Alex Kidman for period since
his appointment
7,769
-
Director Miles Kennedy for reimbursement of travel,
accommodation, food and other expenses incurred on behalf of the
Company*
-
62,611
Loan facility agreement with an entity associated with former non-
executive Director Ross Stanley:
Amount due to New Azilian Pty Ltd
623,302
-
Finance cost for period
9,488
-
Amount paid to previous Director Stephen Wetherall for consulting
and services supplied in respect of the Group's cutting & polishing
business (from 1 August 2023)
19,681
103,554
85
Notes to the Consolidated Financial Statements
17. Group Information
Subsidiaries
The consolidated financial statements of the Group include the following subsidiaries:
Summarised financial information of subsidiaries with non-controlling interests
Mothae Diamonds (Pty) Ltd
31 Dec 2024
31 Dec 2023
%
%
Lucapa Diamonds (Botswana) (Proprietary) Limited
Incorporated in Botswana
Equity interest held
100
100
Australian Natural Diamonds Pty Ltd
Incorporated in Australia
Equity interest held
100
100
Brooking Diamonds Pty Ltd
Incorporated in Australia
Equity interest held
100
100
Heartland Diamonds Pty Ltd
Incorporated in Australia
Equity interest held
100
100
Mothae Diamonds (Pty) Ltd
Incorporated in the Kingdom of Lesotho
Equity interest held
0
70
Lucapa (Mauritius) Holdings Limited
Incorporated in Mauritius
Equity interest held
100
100
31 Dec 2024
31 Dec 2023
US$000
Assets and liabilities at the end of the period
Current assets
-
5,084
Non-current assets
-
2,436
Current liabilities
-
7,430
Non-current liabilities
-
58,211
Profit or loss and cash flow items for the period
Revenue
10,571
27,999
Profit/ (loss) for the period
63,573
(27,282)
Total comprehensive income/ (loss) for the period
58,420
(19,841)
Cash flows (used in)/ from operating activities
(537)
330
Cash flows used in investing activities
(351)
(687)
Dividends paid to non-controlling interests
-
-
86
Notes to the Consolidated Financial Statements
18. Other Significant Accounting Policies
The financial statements have been prepared using
consistent accounting policies to those used for the
prior year, except as set out below.
New or revised accounting policies
The Group has applied the following standards and
amendments for the first time for the annual
reporting period commencing 1 January 2024:
•
AASB
2020-1
Amendments
to
AASs
–
Classification of Liabilities as Current or Non-
current;
•
AASB 2022-5 Amendments to AASs – Lease
Liability in a Sale and Leaseback;
•
AASAB 2022-6 Amendments to AASs – Non-
current Liabilities with Covenants;
•
AASB 2022-10 Amendments to AASs – Fair Value
Measurement of Non-financial Assets of Not-for-
Profit Public Sector Entities;
•
AASB
2023-1
Amendments
to
AASs
–
Amendments to AASB 107 and AASB 7 –
Disclosures of Supplier Finance Arrangements;
•
AASB
2023-3
Amendments
to
Australian
Accounting Standards – Disclosure of Non-
current Liabilities with Covenants: Tier 2; and
•
AASB
2024-1
Amendments
to
Australian
Accounting Standards Disclosures of Supplier
Finance Arrangements: Tier 2 Disclosures.
The adoption of these standards has not resulted in
any material changes to the Group’s financial
statements.
The following new/ amended standards have been
issued, but are not yet effective:
•
AASB 2014-10 Amendments to AASs – Sale or
Contribution of Assets between an Investor and
its Associate or Joint Venture, effective 1-Jan-28;
•
AASB 2022-9 Amendments to AASs – Insurance
Contracts in the Public Sector, effective 1-Jan-26;
•
AASB
2023-5
Amendments
to
Australian
Accounting Standards – Lack of Exchangeability,
effective 1-Jan-25;
•
AASB 18 Presentation and Disclosure in
Financial Statements, effective 1-Jan-27;
•
AASB
2024-2
Amendments
to
AASs
–
Classification and Measurement of Financial
Instruments, effective 1-Jan26; and
•
AASB 2024-3 Amendments to AASs – Annual
Improvements Volume II, effective 1-Jan-26:
o
Amendments to AASB 1
o
Amendments to AASB 7
o
Amendments to AASB 9
o
Amendments to AASB 10
o
Amendments to AASB 107.
The requirements of these standards are currently
being reviewed, but it is not currently expected to
have a material impact on the Group’s financial
statements.
Significant accounting judgements, estimates
and assumptions
The preparation of financial statements requires
management to make judgements, estimates and
assumptions that affect the application of accounting
policies and reported amounts of assets, liabilities,
income and expenses. Actual results may differ from
those
estimates.
Estimates
and
underlying
assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in
the period in which the estimate is revised and in any
future periods affected.
Judgements made by management in the application
of Australian Accounting Standards that have
significant effect on the financial statements and
estimates with a significant risk of material
adjustment in the next year are discussed where
relevant in the individual notes above.
Management
discusses
with
the
Board
the
development, selection and disclosure of the Group’s
critical accounting policies and estimates and the
application of these policies and estimates.
Principles of consolidation
The Group financial statements consolidate those of
the Company and all its subsidiaries as at the end of
the period. The Company controls a subsidiary if it is
exposed, or has rights, to variable returns from its
involvement with the subsidiary and has the ability
to affect those returns through its power over the
subsidiary.
All transactions and balances between Group
companies
are
eliminated
on
consolidation,
including
unrealised
gains
and
losses
on
transactions between Group companies.
87
Notes to the Consolidated Financial Statements
Other Significant Accounting Policies (continued)
Where unrealised losses on intra-group asset sales
are reversed on consolidation, the underlying asset
is also tested for impairment from a group
perspective. Amounts reported in the financial
statements of subsidiaries have been adjusted
where necessary to ensure consistency with the
accounting policies adopted by the Group.
Profit or loss and other comprehensive income of
subsidiaries acquired or disposed of during the year
are recognised from the effective date of acquisition,
or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of
equity, represent the portion of a subsidiary’s profit
or loss and net assets that is not held by the Group.
The Group attributes total comprehensive income or
loss of subsidiaries between the owners of the
parent and the non-controlling interests based on
their respective ownership interests.
Functional and presentation currency
An entity’s functional currency is the currency of the
primary economic environment in which it operates.
All items included in the financial statements of
entities in the Group are measured and recognised in
the functional currency of the entity. The Group’s
presentation currency is US dollars, which is also the
functional currency of the Company.
Foreign currency transactions and balances
Transactions in foreign currencies are translated to
the respective functional currencies of the Group at
exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in
foreign currencies at the reporting date are
retranslated to the functional currency at the foreign
exchange rate at that date. Foreign exchange
differences arising on retranslation are recognised
in the statement of profit or loss and other
comprehensive income.
The assets and liabilities of foreign operations,
including goodwill and fair value adjustments
arising on acquisition, are translated to US dollars at
foreign exchange rates ruling at the reporting date.
The income and expenses of foreign operations are
translated to US dollars at exchange rates
approximating the foreign exchange rates ruling at
the dates of the transactions. Foreign exchange
differences arising on retranslation are recognised
directly in a separate component of equity.
When a foreign operation is disposed of in part or in
full, the relevant amount in equity is transferred to
the statement of profit or loss and other
comprehensive income.
Foreign exchange gains and losses arising from a
monetary item receivable from or payable to a
foreign operation, the settlement of which is neither
planned nor likely in the foreseeable future, are
considered to form part of the net investment in a
foreign operation and are recognised directly in
equity.
Impairment
Financial assets
A financial asset is assessed at each reporting date to
determine whether there is a risk of default. A
financial asset is considered to be impaired if
objective evidence indicates that one or more events
have had a negative effect on the estimated future
cash flows of that asset.
An impairment loss in respect of a financial asset
measured at amortised cost is calculated as the
difference between its carrying amount, and the
present value of the estimated future cash flows
discounted at the original effective interest rate.
Individually significant financial assets are tested for
impairment on an individual basis. The remaining
financial assets are assessed collectively in groups
that share similar credit risk characteristics.
All impairment losses are recognised in the
statement of profit or loss and other comprehensive
income.
An impairment loss is reversed if the reversal can be
related objectively to an event occurring after the
impairment loss was recognised. For financial assets
measured at amortised cost the reversal is
recognised in the statement of profit or loss and
other comprehensive income.
Non-financial assets
The carrying amounts of the Group’s non-financial
assets, other than inventories, are reviewed at each
reporting date to determine whether there is any
indication of impairment. If any such indication
exists, the asset’s recoverable amount is estimated.
88
Notes to the Consolidated Financial Statements
Other Significant Accounting Policies (continued)
The recoverable amount of an asset or cash-
generating unit is the greater of its value in use and
its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset.
For the purpose of impairment testing, assets are
grouped together into the smallest group of assets
that generates cash inflows from continuing use that
are largely independent of the cash inflows of other
assets or groups of assets (the “cash-generating
unit”).
An impairment loss is recognised if the carrying
amount of an asset or its cash-generating unit
exceeds its recoverable amount. Impairment losses
are recognised in the statement of profit or loss and
other comprehensive income. Impairment losses
recognised in respect of cash-generating units are
allocated first to reduce the carrying amount of any
goodwill allocated to cash-generating units (group of
units) and then, to reduce the carrying amount of the
other assets in the unit (group of units) on a pro rata
basis.
Impairment losses recognised in prior periods are
assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a
change in the estimates used to determine the
recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would
have been determined, net of depreciation or
amortisation, if no impairment loss had been
recognised
Significant accounting judgements, estimates and
assumptions
The Group assesses impairment at the end of each
reporting year by evaluating specific conditions that
may
be
indicative
of
impairment
triggers.
Recoverable amounts of relevant assets are
reassessed using calculations which incorporate
various key assumptions, including estimating
diamond prices, foreign exchange rates, production
levels & recoverable diamonds, operating costs,
capital requirements & its eventual disposal and
latest life of mine plans.
Future cash flows expected to be generated by the
assets are projected, taking into account market
conditions and the expected useful lives of the
assets. The present value of these cash flows,
determined using an appropriate discount rate, is
compared to the current net asset value and, if lower,
the assets are impaired to the present value. If the
information to project future cash flows is not
available or could not be reliably established,
management uses the best alternative information
available to estimate a possible impairment.
Goods and services tax/ value added tax
Revenues, expenses and assets are recognised net of
the amount of goods and services tax (“GST”) or
value added tax (“VAT”), except where the amount of
GST or VAT incurred is not recoverable from the
taxation authority, it is recognised as part of the cost
of acquisition of an asset or as part of an item of
expense. Receivables and payables are stated with
the amount of GST or VAT included.
The net amount of GST and VAT recoverable from, or
payable to, the taxation authority is included as part
of receivables or payables.
Cash flows are included in the statement of cash
flows on a gross basis. The GST and VAT component
of cash flows arising from investing and financing
activities which is recoverable from, or payable to,
the taxation authority is classified as operating cash
flows.
Revenue
To determine whether to recognise revenue, the
following 5-step process is followed:
-
Identifying the contract with a customer;
-
Identifying the performance obligations;
-
Determining the transaction price;
-
Allocating the transaction price to the
performance obligations; and
-
Recognising revenue when/ as performance
obligation(s) are satisfied.
The transaction price is the amount to which the
Group expects to be entitled to in exchange for the
transfer of goods and services and is allocated
amongst the various performance obligations based
on their relative stand-alone selling prices. The
transaction price for a contract excludes any
amounts collected on behalf of third parties.
89
Notes to the Consolidated Financial Statements
Other Significant Accounting Policies (continued)
Revenue is recognised either at a point in time or
over time, when (or as) the Group satisfies
performance
obligations
by
transferring
the
promised goods or services to its customers.
Revenue from the sale of rough diamonds is
recognised on a point in time basis.
Revenue from cutting and polishing partnerships:
-
is considered to be variable consideration
and is recognised to the extent that it is
highly probable that its inclusion will not
result in a significant revenue reversal in the
future when the uncertainty has been
resolved. This is generally the case when
cutting and polishing work has substantially
been completed and relative certainty exists
over the quality of the final product or when
the polished diamonds have been sold;
-
is recognised once a high level of certainty
exists regarding factors that influence the
sale prices including the size, quality and
colour of the final polished diamonds. These
factors are considered per individual stone.
If the Group satisfies a performance obligation
before it receives the consideration, either a contract
asset or a receivable is recognised in the statement
of financial position, depending on whether
something other than the passage of time is required
before the consideration is due.
Determination of fair values
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.
Fair value is measured using the assumptions that
market participants would use when pricing the
asset or liability, assuming they act in their economic
best interests. For non-financial assets, the fair value
measurement is based on its highest and best use.
Valuation techniques that are appropriate in the
circumstances and for which sufficient data are
available to measure fair value, are used, maximising
the use of relevant observable inputs and
minimising the use of unobservable inputs.
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. 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.
Rounding of amounts
The company is of a kind referred to in ASIC
Legislative Instrument 2016/191, relating to the
‘rounding off’ of amounts in the financial statements.
Amounts in the financial statements have been
rounded off in accordance with the instrument to the
nearest thousand dollars, or in certain cases, the
nearest dollar.
90
Notes to the Consolidated Financial Statements
19. Events Subsequent to Reporting Date
On 21 January 2025, Lucapa announced the results
from the first modern geophysical survey conducted
in 25 years at its Merlin project. A preliminary
review of the electromagnetic survey data has
identified two large and highly conductive base
metal targets.
On 22 January 2025, Lucapa announced that all
resolutions put to shareholders in respect of the A$3
million capital raising announced on 5 December
2024, were carried and decided by way of a poll.
On 22 January 2025, Lucapa announced the
completion of its Share Purchase Plan (SPP)
following the closing of applications on 23 January
2025. The SPP was announced on 11 December 2024
with terms of the SPP offer detailed in the
Prospectus dated 23 December 2024. The SPP raised
A$405,000 and 20,250,000 new fully paid ordinary
shares in the Company will be issued under the SPP
on 30 January 2025.
On 29 January 2025, Lucapa announced that it has
completed Tranche 2 of the capital raising
previously announced on 5 December 2024. The
Company has raised A$1.8M (before costs) via the
placement of 90,006,901 new fully paid ordinary
shares (Placement Shares) at an issue price of
A$0.02 per share. The issue of the Placement Shares
was approved by Shareholders at a General Meeting
held 22 January 2025 and rank equally with the
existing fully paid ordinary shares on issue. In
addition to the Placement Shares, the Company has
issued 16,474,800 new fully paid ordinary shares
(Employee
Shares)
to
directors
and
senior
management at a deemed issue price of A$0.02 per
share
to
convert
A$329k
of
accrued
fees,
remuneration and expenses. The issue of the
Employee Shares was approved by Shareholders at
a General Meeting held 22 January 2025 and rank
equally with the existing fully paid ordinary shares
on issue.
On 3 February 2025, Lucapa announced that
operations at Lulo have been disrupted following a
blockade of all entrances to the mine by the local
community leaders.
On 20 February 2025, Lucapa announced the
recommencement of mining operations at Lulo
following the peaceful end to the blockade by local
community leaders. Processing of existing stockpiles
was able to continue throughout the blockade,
ensuring that monthly carat targets remained on
track against targets. SML has reiterated its
commitment to its existing social programs and is
also revieing its alluvial mining plan to attempt to
mitigate the impact caused by the stoppage.
On 7 March, 2025, the results from the in depth
review of the electromagnetic survey over Merlin
were released which identified two large base
metals targets. Follow up exploration activities are
planned in 2025.
On 20 March, 2025, the Project Lulo Joint Venture
Mineral Investment Contract was finalised. In
addition, Lucapa is to increase its stake in the JV to
51% from the current 39%. The MIC is expected to
be formally signed by all partners in Q2/2025.
No other matters or circumstances have arisen
since the end of the financial period, which
significantly affected or may significantly affect the
operations of the Group, the results of those
operations, or the state of affairs of the Group in
subsequent financial periods.
91
Consolidated Entity Disclosure Statement
Name of entity
Type of entity
Trustee, partner or
participant in joint
venture
% of share
capital
held
Country of
incorporation
Australian resident of
foreign resident (for tax
purposes)
Foreign tax
jurisdiction (s) of
foreign residents
Lucapa Diamond Company Limited
Body corporate
n/a
n/a
Australia
Australian
n/a
Australian Natural Diamonds Pty Ltd
Body corporate
n/a
100
Australia
Australian
n/a
Brooking Diamonds Pty Ltd
Body corporate
n/a
100
Australia
Australian
n/a
Heartland Diamonds Pty Ltd
Body corporate
n/a
100
Australia
Australian
n/a
Lucapa Diamonds (Botswana) (Proprietary) Limited
Body corporate
n/a
100
Botswana
Foreign
Botswana
Lucapa (Mauritius) Holdings Limited
Body corporate
n/a
100
Mauritius
Foreign
Mauritius
92
Director’s Declaration
1.
In the opinion of the Directors of Lucapa Diamond Company Limited:
a.
the financial statements and notes, and the remuneration report in the Directors’ Report, as set
out on pages 22 to 91, are in accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the Group’s financial position as at 31 December 2024 and
of its performance for the financial period ended on that date; and
ii.
complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Regulations 2001;
b.
the financial report also complies with International Financial Reporting Standards as
disclosed in the Statement of compliance on page 50; and
c.
Subject to the uncertainty outlined in the Directors’ report and basis of measurement
sections, there are reasonable grounds to believe that the Group will be able to pay its debts as
and when they become due and payable.
2.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001
for the financial year ended 31 December 2024.
3.
The consolidated entity disclosure statement on page 92 is true and correct.
Signed in accordance with a resolution of the Directors.
STUART BROWN
Chairman
Dated this 27th FEBRUARY 2025
93
Independent Auditor’s Report
94
95
96
97
98
99
36-40
Additional ASX Information
The following additional information is required by the Australian Securities Exchange in respect of ASX listed public
companies and is current as at 28 March 2025.
Fully paid ordinary shares
The Company has 460,371,999 ordinary fully paid shares on issue as at 28 March 2025, held by 3,025 shareholders.
Based on a share price of $0.016 there were 2,211 holders of ordinary shares, with a combined total of 18,433,897
ordinary shares, holding less than a marketable parcel which amounts to 4.00% of the shares on issue.
Quoted Options
Unquoted Options
The Company had 95,124,993 listed options (ASX:LOMOD) (exercisable at $0.06 each on or before 6 February 2028) on
issue as at 28 March 2025, held by 157 option holders.
The Company had 1,000,000 LOMAP unlisted options (exercisable at $0.40 each on or before 30 July 2025) on issue as at 28
March 2025, held by 1 option holder. Ashanti Capital Pty Ltd hold greater than 20% of the LOMAP unlisted options on issue.
Performance Rights
There is no current on-market buy back
The Company had no restricted securities on issue as at 28 March 2025
100
Substantial Shareholders Number of Shares
% of Issued Capital
Ilwella Pty Ltd
60,719,973
13.8%
Tazga Two Pty Ltd as
trustee for Tazga Two
Trust*
55,007,014
5.35%
Additional ASX Information
Voting Rights
Ordinary Shares
On a show of hands, every member present in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
Options and Performance Rights
Options and performance rights carry no voting rights and convert to one ordinary share upon exercise
*Disclosed on a pre-consolidation basis (5:1)
101
Definitions and Abbreviations
A$
Australian dollar
AIFRS
Australian International Financial Reporting Standards
AGM
Annual general meeting of shareholders
ASX
Australian Securitues Exchange
Attributable
Attributable ownership in projects based on Lucapa’s % shareholding. This is a non-
AIFRS measure
AusND
Australian Natural Diamonds Pty Ltd (Lucapa 100% held; registered in Australia)
Brooking
Brooking Pty Ltd
EBITDA
Earnings before interest, taxation, depreciation & amortisation and other non-
trading items EBITDA is a non-AIFRS measure
Endiama
Endiama E.P. (Angola’s national diamond mining company)
ESG
Environmental, Social and Governance
GoL
Government of the Kingdom of Lesotho
GTD Index
GTD Consulting Overall Rough Diamond Price Index
June half, the half year or H1
The six months ended 30 June
LTI
Lost time injury
Lucapa, the Company or LOM
Lucapa Diamond Company Limited (ASX code: LOM)
MB
Mining block
Merlin
Merlin Diamond Project, owned by AusND
Mothae
Mothae Diamonds (Pty) Ltd, registered in Lesotho (Shareholding: Lucapa 70%
(disposed 31 Jul24) and GoL 30%). For AIFRS reporting, Mothae’s results are
consolidated
Mtpa
Million tonnes per annum
New Azilian
New Azilian Pty Ltd
Orapa
Orapa Area F, Botswana
P&L
Profit or Loss; Statement of Profit or Loss
PPE
Property plant and equipment
Rosas & Petalas
Rosas & Petalas S.A. (Private venture partner in Lulo, registered in Angola)
QX 20XX
Reference to one of the quarter periods in a calendar year
Safdico
Safdico International, a subsidiary of Graff International
SFD
Size frequency distribution
SML
Sociedade Mineira Do Lulo Lda, registered in Angola (Shareholding: Lucapa 40%,
Endiama 32% and Rosas & Petalas 28%). For AIFRS reporting, SML’s results are
included on an equity accounted basis
Specials
Diamonds individually weighing in excess of 10.8 carats
the Board
The Lucapa Board of Directors
the Group
The Company, its subsidiaries and associates
the Second Half or H2
The six months ended/ ending 31 December
US$
United States dollar
XRT
X-Ray transmission
Z Star
Z Star Mineral Resource Consultants Pty Ltd
ZAR, R or Rand
South African rand
102
Corporate Directory
Registered Office & Principal Place of Business
34 Bagot Road, Subiaco
Western Australia 6008
Contact Details
Phone:
+61 8 9381 5995
E-mail:
general@lucapa.com.au
Internet:
www.lucapa.com.au
Directors
Stuart Brown:
Non-Executive Director, Chairman
Miles Kennedy:
Non-Executive Director
Ronnie Beevor:
Non-Executive Director
Alex Kidman:
Managing Director/ Chief Executive Officer
Company Secretary
Daniel Coletta
Share Registry
Automic Pty Ltd
Level 5
191 St Georges Terrace, Perth
Western Australia 6000
Share Trading Facilities
The Company's ordinary shares are listed on the Australian Securities Exchange (Code: LOM)
The Home exchange is Perth.
Auditor
Elderton Audit Pty Ltd
Level 32
152 St Georges Terrace, Perth
Western Australia 6000
103
LUCAPA DIAMOND COMPANY LTD
ACN 111 501 663
34 BAGOT ROAD
SUBIACO WA 6008
TEL:+61 8 9381 5995
EMAIL: GENERAL@LUCAPA.COM.AU
WWW.LUCAPA.COM.AU