ANNUAL
REP ORT
FO R THE YEAR ENDED
JUNE 30 2022
METALLICA MINE RALS LTD
Metallica Minerals Annual Report | 2022 Table of
CONTENTS
Corporate Directory
Key Events
Chairman’s Letter
Cape Flattery Silica Sand
Silica Sand Market & Demand
Clermont Copper/Gold
4
7
8
12
21
24
Director & Management Profiles
26
Tenement Table
Top 20 Shareholders
Full year Financial Statements
29
30
32
3
CORPORATE
DIRECTORY
As at 16 Sept 2022
DI R EC TORS
SHARE REGISTRY
Theo Psaros, Executive Chairman
Link Market Services
Brad Sampson, Non-Executive Director
Level 21, 10 Eagle Street
Mark Bojanjac, Non-Executive Director
Brisbane QLD 4000
MAN AGEMEN T
Scott Waddell, Chief Financial Officer and
Company Secretary
+61 7 3320 2200
AUDITOR
Moore Australia
Nicholas Villa,
General Manager Cape Flattery Silica
Level 12, 10 Eagle Street
Brisbane QLD 4000
Pat Smith, Geology/Exploration Manager
+61 7 3340 3800
PR IN CI PAL
RE GI STERED OFFIC E
IN AU ST RALI A
Level 1, North Tower, 527 Gregory Terrace,
Fortitude Valley QLD 4006
+ 61 7 3249 3000
admin@metallicaminerals.com.au
WEB S IT E
www.metallicaminerals.com.au
LEGAL
Colin Biggers & Paisley
Level 35, 1 Eagle Street
Brisbane QLD 4000
+61 7 3002 8700
STOCK EXCHANGE
LISTING
ASX: MLM
AUSTRALIAN
BUSINESS NUMBER
ABN 45 076 696 092
Metallica Minerals Annual Report | 2022
METALLICA MINERALS
IS AN AUSTRALIAN
DEVELOPMENT COMPANY
FOCUSED ON DELIVERING
HIGH PURITY SILICA SAND
TO A DIVERSIFIED GLOBAL
CUSTOMER-BASE.
“
“
SUBSIDIARY COMPANIES
Lucky Break Operations | ACN: 126 272 580
Phoenix Lime Pty Ltd | ACN: 096 355 761
Cape Flattery Silica Pty Ltd | ACN: 138 608 894
Touchstone Resources Pty Ltd | ACN: 126 306 018
Greenvale Operations Pty Ltd | ACN: 139 136 708
NORNICO Pty Ltd | ACN: 065 384 045
PGE Minerals Pty Ltd | ACN: 642 538 805
PROJECT LOCATION
Metallica Minerals Annual Report | 2022
KEY
EVENTS
August 2022
JukesTodd appointed as Definitive Feasibility Study
Manager for the Cape Flattery Silica (CFS) Project
25-hole auger program completed west of the
Cape Flattery Silica MLA
MoU signed with Mitsui
June 2022
MoU signed with Ports North
April 2022
Metallica moves towards 51% ownership of the Clermont JV
Positive metallurgical testwork results achieved on
targeted samples from the CFS Project
Significant increase in measured and indicated resources
March 2022
Pre-Feasibility Study completed at the CFS Project
showing NPV8 of $290 million before tax.
Maiden Reserve of 46Mt high purity silica sand resource
at Cape Flattery
February 2022
CFS Project granted Project of Regional Significance
Status by Queensland Government
Infill drilling validates resource at CFS Project
$3 million capital raising completed
December 2021
24 Hole infill drilling program completed at CFS Project
November 2021
Sale of Unmarketable shares completed
CFS Sand Production Target
October 2021
40% increase of CFS Resource to 53.5Mt
September 2021
Assay results confirm and extend high purity silica
August 2021
98 Hole drill program completed at CFS Project
MoU signed with Diatreme Resources for Clermont
Copper Gold Project
Scoping Study completed for CFS Project
7
EXECUTIVE
CHAIRMAN’S
LETTER
Dear Metallica shareholders
It gives me immense pleasure to deliver Metallica’s Annual Report. The 2022 financial year
has been a year of significant progress for your company. Our primary focus remains on the
delivery of the development of the 100% owned Cape Flattery Silica Sand (CFS) project.
Among the many achievements for the CFS project, completion of our Pre-Feasibility Study
(PFS) delivered in March 2022 has produced a compelling economic forecast. This has
provided a high level of confidence in the project’s potential and accordingly, the Definitive
Feasibility Study (DFS) is underway.
The PFS has confirmed CFS can be a long-life project, producing high-quality silica sand for
the Asian glass manufacturing markets, predominantly supplying the solar panel industry.
The robust global market growth dynamics for silica sand and the progress the company
has made has also fuelled increasing interest from international shareholders, potential
financiers and offtake partners.
With the world focused on ESG and achieving net zero emissions targets, Metallica Minerals
is well-positioned to help power the global clean energy revolution in the future.
CAP E FLATTERY PROJ ECT U PDAT E
The PFS has produced positive financial metrics, including low forecast operating costs of
A$33.77 per tonne, a pre-tax NPV8 of $290 million, average forecast annual EBITDA of $38.1
million and life of project gross revenue of A$2.13 billion. The capital cost of the project is
estimated to be A$79 million with a payback period of 3.9 years.
In recent months, significant work and resources have been applied to the many approvals
being sought for the CFS project. Post-financial year end, the Company plans to lodge
the Environmental Application and Progressive Rehabilitation and Closure Plan with
the Queensland Department of Environment and Science. A referral to the new Federal
Government’s Department of Climate Change, Environment and Water and an application
for a Water Licence are also expected to have been lodged.
Metallica has also continued to build and foster positive relationships with the two Native
Title holders, Hopevale Congress Aboriginal Corporation RNTBC Trustee, on behalf of the
Nguurruumungu Clan, and Walmbaar Aboriginal Corporation, on behalf of the Dingaal Clan.
We plan to complete negotiations for cultural and compensation agreements that provide
support for the Traditional Owners for the development of the project. The Company has
also held negotiation meetings in Hope Vale and Cooktown and these have been conducted
in an open and mutually respectful manner.
Metallica Minerals Annual Report | 2022 Metallica retains ongoing support from the Queensland Government in relation to the CFS
project and we thank the respective departments and their officers for their advice and
counsel as we advance the project towards our goal of being the next project to deliver
high-quality silica sand to the Asian market.
A Development Application for a purpose-built jetty is expected to be lodged before the
current calendar year end. This jetty will allow barge loading and transhipping operations. It
is strategically important this infrastructure is located within the Port Limit of Cape Flattery
and not subject to the Sustainable Ports Act (Qld).
During the period, Metallica executed a Memorandum of Understanding (MoU) with the
Queensland Government-owned corporation, Far North Queensland Ports Corporation
Limited (Ports North). This non-binding MoU reflects the parties working closely together to
investigate and assess various port related aspects of the project eg; marine infrastructure,
marine operations, approvals and commercial agreements for our silica sand project.
The CFS project also achieved the designation of a Project of Regional Significance by
the Department of Regional Development, Manufacturing and Water in Queensland. This
means the project is eligible to apply for a water entitlement from the 25,000 megalitres of
unallocated water held in the strategic reserve for the Water Plan. In order to achieve this
designation, the CFS project was required to exhibit how it would deliver economic benefits
to the region and townships where it is located.
S ILICA SAND GLOBAL DEM AND
As the world transitions towards decarbonisation and net zero emissions by 2050,
the number of countries and households installing rooftop solar is expected to grow
exponentially.
Solar PV remains the powerhouse of growth in renewable electricity.
The International Energy Agency’s July 2022 report noted that reaching net zero by 2050
will be based largely on renewables, and annual additions of solar PV capacity worldwide
need to more than quadruple by 2030 to reach the net zero target.
As such, global demand for silica sand, particularly premium-quality silica, remains strong
given it is an essential ingredient for the fast-growing solar industry in addition to high-tech
glass applications.
Within Australia, the Federal Government’s 2022 Critical Minerals Strategy, which promotes
investment in the nation’s critical minerals sector, added high-purity silica to the critical
minerals list. This inclusion recognises the quality of silica sand that Australia can contribute
to the goal of net zero emissions.
The Queensland Department of Resources also published its Resource Industry
Development Plan and silica sand is designated a New Economy Mineral in this plan.
C LER MON T PROJECT UPDATE
During the period under review, the Company also signed a MoU with Diatreme Resources for
a potential Joint Venture on the Clermont Copper Gold Project which comprises EPM 17968.
The Company made the decision to move to the second stage of the earn in phase of the
agreement and increase Metallica’s share to 51% of the project through a further $700,000
spend on exploration activity at the Clermont Project prior to 27 April 2023.
The results from the first drill holes at Clermont are encouraging and warrant further
exploration activity. Importantly, this work is being managed by a dedicated team to ensure
there are no distractions from our focus on the development of the CFS project.
9
F IN ANCIN G STRATEGY
To continue funding the development of the CFS project, Metallica undertook a placement
to raise A$3 million in March 2022. The placement was completed with support from a new
institutional investor, Sparta AG and with continued support from the Company’s largest
pre-placement shareholders, Ilwella Pty Ltd and the Dostal Group.
Discussions with potential offtake partners in Europe, Japan and Korea have continued to
progress. The first of a planned number of MoUs was executed with Mitsui in August 2022.
The Company has also held ongoing discussions with potential debt and equity providers on
the CFS development plans, which enables these parties to be well versed in the project’s
attributes for when the required capital is pursued.
We were pleased to finish the 2022 financial year with $5.3m in cash and no debt.
In closing, I would like to thank my fellow Directors, Brad Sampson and Mark Bojanjac for
their counsel, strategic thinking and focus to deliver the positive progress of your company.
Importantly, the Board has been fortunate to work with a management team whose hard
work and professionalism continue to provide the platform for the successful delivery of the
CFS project. We have also been fortunate to work with a variety of specialist consultants
during the year, whose advice and support has also contributed positively to the Company.
On behalf of the Metallica Directors, we thank our many shareholders for their continued
support. Your company is very well placed to deliver a positive future as we progress
the development of the CFS project at a time when the world is enthusiastically seeking
solutions to achieving net zero emissions.
Yours faithfully
Theo Psaros
Executive Chairman
Metallica Minerals Annual Report | 2022
11
CAPE FLATTERY
S ILICA SANDS
MLM interest 100% through subsidiary Cape Flattery Silica Pty Ltd
36Km2 Exploration Tenure | EPM 25734
S ILICA SANDS – BULK
EX P ORT
The Cape Flattery Silica Sands (CFS)
project is located on the eastern coastline
of Cape York Peninsula and approximately
220 km north of Cairns in North
Queensland. The project is adjacent to
the world class Cape Flattery Silica Mine,
owned by Mitsubishi.
Importantly, the CFS Project is located
within the Cape Flattery Port area,
which is owned and operated by Ports
North, a Queensland Government owned
corporation. Ports North owns the jetty
which is leased by Mitsubishi and is located
immediately south of the CFS’s tenement.
The jetty’s ship-loading equipment is
owned by Mitsubishi.
MIN IN G LEASE
AP PLICATION
In 2021, Metallica lodged a Mining Lease
Application (MLA) with the Queensland
Department of Resources. The MLA covers
616.1 ha and had been applied for a term
of 25 years. The future Mining Lease
(ML 100284) will include the Project’s
resource area, the planned processing plant,
the accommodation camp, potential water
bore sites, and access from a gazetted road.
NATI V E TITLE
During 2022, four meetings have been
held with the representatives of the clans
who are the traditional landowners of the
Mining Lease Application (MLA) area.
The Company have met with the Dingaal
and Nguurruumungu representatives
and their respective legal advisors and
the negotiations for a compensation
agreement are ongoing. Negotiations have
been delayed due to impacts of a number
of COVID cases amongst the both the CFS
team and clan members.
Importantly, the negotiations have been
held in a professional and respectful
manner with significant information on the
project being shared with the negotiating
parties from each clan.
In August 2022, Metallica welcomed the
seven representatives of Walmbaar (Dingaal
clan) to the CFS office to meet with our
staff and introduce them to the Definitive
Feasibility Study group. Chairman, Kenneth
McLean addressed the group and discussed
Cultural Heritage matters.
PRE-FEASIBILITY
STUDY
The Pre-Feasibility Study (PFS) was
completed in March 2022.
The highlights of the PFS are listed below:
Cape Flattery Silica Sand Project’s (CFS)
Pre-Feasibility Study (PFS) confirms the
Project can be a long-life silica sand project
producing high quality silica sand for the
booming Asia-Pacific glass manufacturing
markets supplying the solar panel industry.
» The PFS returns Net Present Value
(NPV8, pre-tax) of A$290 million (M),
Internal Rate of Return (IRR) of 34.9%
and life of Project cash revenue of
A$2,127M. This compares with the
Updated Scoping Study (10 November
2021) which had an NPV8 of A$253M.
» The Capital Cost of the CFS Project
is estimated to be $79M (including
a 15% contingency of $10M) with a
payback period from commencement of
Metallica Minerals Annual Report | 2022 Figure 1: Cape Flattery Port location and Project proximity
L-R: John Deeral, Raynard Baru, Shailand Deeral-Rosendale, Stanton Thompson, Nicholas
Villa (General Manager), Theo Psaros (Executive Chairman), Tanya Yoren, Fabian O’Burns and
Kenneth McLean - Dingaal Clan representatives visit to the Metallica office in August 2022.
13
» CFS will contribute to delivery of the
Queensland Government’s commitment
to the development of new economy
minerals in Far North Queensland.
The results of the PFS demonstrated
a strong financial case and the Board
approved commencement of a Definitive
Feasibility Study.
DEFINITIVE
FEASIBIL ITY STUDY
The Definitive Feasibility Study (DFS)
commenced following the completion of
the PFS and is planned for completion
in 2nd Quarter 2023. In August 2022
JukesTodd were appointed as Study
Manager and have overall responsibility for
the management and delivery of the DFS.
The DFS will include the design,
engineering and planned delivery of the
Cape Flattery Silica operation producing
1.35Mt of high-purity silica sand per annum.
production of 3.9 years. All production is
based on the Maiden Ore Reserve (refer
Table 5 – Ore reserves).
» Maiden Ore Reserve of 46 million
tonnes (Mt) @ 99.18% SiO₂ contained
within a Resource of 53.5Mt @ 99.19%
SiO₂, (Table 2 – Mineral Resource) will
be exploited over a 25-year Project life
producing a saleable product of 1.35Mt
per annum.
» Sensitivity and scenario analysis
demonstrate the Project is financially
robust and can maintain a positive Net
Present Value (NPV) through stress-
testing of the various scenarios.
» Both the sand extraction area and the
industry standard processing facility
will have a small footprint and low
environmental impact.
» A purpose built jetty is planned to be
constructed, subject to Development
Approval (DA) to allow barge loading
and transhipping operations. This
infrastructure, importantly, is located
within the Port Limit of Cape Flattery.
» Development of the Project will
deliver employment, apprenticeship
and training opportunities to the
indigenous communities at Hope Vale
and Cooktown communities, where
the Dingaal and Nguurruumungu clans
dominantly live.
L to R: Boyd Dale and David Bainbrigge (JukesTodd), Tycho Buningh (Royal Haskoning),
Shailand Deeral-Rosendale (Walmbaar) and Nicholas Villa onsite at Cape Flattery
Metallica Minerals Annual Report | 2022 KEY
OUTCOMES
Table 1: Summary of key outcomes – Pre-feasibility study (A$ — Australian dollars)
Key Financial Metrics
NPV - pre-tax (8%)
IRR - pre-tax
NPV – post tax
IRR – post tax
Payback (start of production)
Initial Capital Expenditure (CapEx)
Life of Mine (LOM) CapEx
Average annual revenue
LOM revenue
Average annual OpEx
LOM OpEx
Average annual EBITDA
LOM EBITDA
C1 OpEx (FOB)
Average silica sand price (US$47.50)
Key Sand Extraction & Processing Metrics
Mineral Resources (see Table 3)
Ore Reserve (see Table 2)
LOM
Sand mined & processed
Silica sand production
Plant operating capacity
Plant yield
Silica product sold
Notes
Unit
A$M
%
A$M
%
Years
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$/t product
A$/t (FOB)
Unit
Tonnes M
Tonnes M
Years
LOM Tonnes M
LOM Tonnes M
Mtpa
%
Mtpa
Total
290.1
34.9
189.3
27.1
3.9
79.4
113.9
85.1
2,127
46.4
1,159
38.1
952
33.77
63.63
Total
53.5
46
25
45
33.4
1.8
75
1.35
»
The PFS Financial Model assumes 100% equity funding with no gearing. Financing the Project will be further explored in the
DFS process.
» All figures are presented in Australian dollars, unadjusted for inflation.
» Assumed exchange rates USD/AUD of approximately $0.75.
»
»
»
»
The plant is designed to process 1.8Mtpa.
The CapEx estimate includes a contingency of $9.6M (15%).
Production is assumed to commence approximately 13 months after the first drawdown of capital.
The Probable Ore Reserve and Measured and Indicated Mineral Resource underpinning the above production assumption
targets has been prepared by a Competent Person in accordance with the requirements of the JORC Code 2012 (refer Table 2 –
Mineral Resources).
»
Refer to ASX Release 21 March 2022 “Cape Flattery Silica PFS Confirms Excellent Economics and Maiden Ore Reserve”.
15
EN VI RON MENTAL
During the year, CFS in conjunction with
our external environmental consultants,
have completed various environmental
studies at the CFS project. These studies
have included soil sampling, ecological
studies (wet season fauna and flora
studies) and water monitoring.
We plan to lodge a Referral to the Federal
Government’s Department of Climate
Change, Energy, the Environment and
Water (DCCEEW) in late Q3 2022. It
is expected that the Environmental
Application and Progressive Rehabilitation
and Closure Plan (PRCP) will be lodged in
Q4 2022 to the Queensland Department
of Environment and Science (DES). The
PRCP will outline how rehabilitation will be
undertaken progressively throughout the
life of the project and what work will be
undertaken when the project is completed.
A communication process and a roadshow
to representatives of the Dingaal and
Nguurruumungu clans, local councils and
other key stakeholders to inform them of
the PRCP and seek feedback accordingly
will be completed prior to lodgement of
the PRCP.
R ES O URCE
Over the past 24 months, Metallica has
completed three drilling programs in the
eastern area on EPM 25734. A total of 144
aircore holes (CFS001 to CFS144) have
been drilled totalling 2,489 meters. The
results from the drilling program have
identified an area within EPM 25734 which
hosts a significant quantity of high-grade
(+99%) silica sand. This area has now
been contained within MLA100284 and is
referred to as the Project area.
Metallica Minerals engaged Ausrocks Pty
Ltd (Ausrocks) to complete a Mineral
Resource Estimate (MRE) for the Project
Area on the completion of each drilling
program, with the most recent resource
estimate completed by Ausrocks in April
2022. Ausrocks is a Brisbane-based
resources consultancy with expertise in
industrial minerals and quarrying. Ausrocks
determined that the drilling density on the
completion of the December 2021 drilling
program was sufficient to classify the
resources contained in the Project Area
as Measured – Indicated and Inferred in
accordance with the JORC 2012 guidelines.
Ausrocks reviewed the project geology,
assay data and the duplicate sample and
umpire laboratory assay data that Metallica
provided to ensure only valid and relevant
data was used for the MRE and that all
relevant Quality Assurance Quality Control
(QA/QC) checks had been completed.
The most recent Mineral Resource estimate
that Ausrocks developed for the Project
is referenced in the MLM ASX Release
dated 7 April 2022 ‘Significant Increase in
Measured and Indicated Resources at Cape
Flattery Silica Project’ . The block model’s
construction was based on data from 144
vacuum drill holes as inputs to the Mineral
Resource model, with a total of 2,489
samples used in the resource estimate.
The various resource categories for
the project area and the hole locations
are presented on figure, the April 2022
resource estimate is presented in Table 2.
Table 2: Mineral Resource for the Cape Flattery Silica Project
Resource
Category
Silica
Sand Mt
Measured
Indicated
Inferred
Total
16.7
35.2
0.3
52.2
SIO₂
%
99.26
99.14
99.06
99.18
FE₂O₃
%
0.10
0.13
0.14
0.12
TIO₂
%
0.08
0.13
0.16
0.11
LOI
%
0.13
0.14
0.12
0.14
AL₂O₃
%
Density
t/m3
Silica
Sand Mm3
0.17
0.19
0.23
0.18
1.6
1.6
1.6
1.6
10.4
22.0
0.2
32.6
For further details, refer to ASX Release: 7 April 2022: “Significant Increase in Measured and
Indicated Resources at Cape Flattery Silica Project”.
Metallica Minerals Annual Report | 2022 Figure 2: Cape Flattery Resource and drilling
In August 2022, a 25 hole hand auger
program was completed west of the
existing CFS Mineral Resource. The
program was completed over 4 days and
will provide data to aid in understanding
the strategic options and planning for the
western area. Assays are being processed
at ALS and results are expected by the end
of Q3 2022.
L to R: Shane Mardon and Traditional Landowner from Nguurruumungu clan Niall Cobus
17
METAL LURGICAL
T E STING
Over the last 12 months, Metallica Minerals
has completed extensive metallurgical
testwork on samples collected from the
CFS Project Area. Samples for the testwork
were selected from individual 1m drill
samples and composited to produce the
preferred head grade to be tested.
Samples were selected from drill holes from
various parts of the resource area to ensure
that they were representatives of the entire
deposit, with special emphasis on the
Measured resource area where the first 10
years production will be sourced from.
The different phases of metallurgical
studies were:
»
Initial characterisation tests on a 10kg
sample from the resource area to
determine the process parameters and
for process design purposes
» Additional test work on samples high in
clay content to determine if they can be
upgraded to a high grade SiO2 product
with simple scrubbing
» Test work on a 914 kg Bulk sample using
data obtained from the initial 10kg
characterisation test, with the sample
processed through a test rig plant to
determine what quality of product can
be produced
» Characterisation tests on samples with
varying iron content to determine what
the optimal feed grade is (both SiO2 and
Fe2O3) to produce a high-quality silica
sand product
Results from the targeted testwork
indicate that a high-quality silica sand
product, which is very similar to that being
exported by Mitsubishi can be achieved
from the processing of sand within
Metallica’s deposit. Metallurgical testwork
is ongoing and results from two sets of
characterisation test are still pending as of
September 2022.
ASX announcements containing results
from the metallurgical testwork were
released to the market on the 21 March
2022: “Cape Flattery Silica PFS confirms
excellent economics and maiden ore
reserve” and on the 28th of April 2022
“Positive Metallurgical test work results
achieved on targeted samples from the
Cape Flattery Silica Sand Project”.
All of the metallurgical testwork
undertaken by Metallica in the financial
year ending 30 June 2022 was completed
by Mineral Technologies who are based on
the Gold Coast in South East Queensland.
They initially carried out a silica sand
characterisation study comprising
laboratory-scale tests to produce products
that represent the purest silica sand that
may be achievable using conventional
mineral processing methods.
The sand characterisation study involved
using a suite of laboratory tests to
understand how the sand will behave in
a full-scale processing plant. The sand
sample was run through a series of stages,
with the silica content and the iron content
recorded at the end of each stage. This
work identified which stages, (laboratory
methods) are crucial in upgrading the
feed sand to a high-end product. Once the
results from this work was complete the
bulk sample was then run through a larger
scale test rig processing plant to assist in
the design of the process plant.
The next phase of metallurgical studies has
commenced and will concentrate on the iron
variability and final product specifications.
Variability studies on a range of silica
sand samples with varying levels of Fe2O3
samples from 300ppm Fe2O3 to 1,200ppm
Fe2O3 at 100ppm intervals from within the
Measured and Indicated Resource areas will
help optimise the mine planning and sand
recovery sequencing and is an important
part of the early DFS work.
Samples have also been requested
and dispatched to prospective offtake
partners for their evaluation of the silica
sand extracted from the drilling programs
and from the product produced after
processing the bulk sample. The feedback
received from these potential offtake
partners has been positive and indicates
that Metallica can produce a high-quality
saleable product from the CFS project area.
Metallica Minerals Annual Report | 2022 19
S ILICA SAND MARKET
AN D DEMAN D
SILICA SAND USES
AND FUTURE DEMAND
Silica sand is the key ingredient in
construction glass and the glass for vehicle
windscreens. Demand from the renewable
energy sector continues to rise driven by
solar panel manufacturers.
Growing Markets:
» Ultra Clean Glass
» Solar panels
» Smartphones
» Fibre optics
» Tablets
» LED lighting
» The global silica sand market was valued
at US$ 21.6 Billion in 2021
» Global silica sand market to exhibit a
CAGR of 6% during 2022-2027
» Solar PV capacity has grown 20 -fold
over the past decade and forecast to
triple in size over the next 10 years
Sand is the world’s most consumed raw
material after water and an essential
ingredient to our everyday lives. Yet, the
world is facing a shortage — and climate
scientists say it constitutes one of the
greatest sustainability challenges of the 21st
century. For construction alone the world
consumes roughly 40 – 50 billion tons of
sand on an annual basis. That’s enough to
build a wall of 27 meters high by 27m wide
that wraps around the planet every year.
The global rate of sand use which tripled
over the past two decades partially because
of surging urbanisation – far exceeds
the natural rate at which sand is being
replenished by the weathering of rocks by
wind and water. Sand is the worlds most
consumed raw material after water and an
essential ingredient to our everyday lives.
Source: A sand shortage? The world is
running out of a crucial — but under-
appreciated — commodity https://www.
cnbc.com/2021/03/05/sand-shortage-
the-world-is-running-out-of-a-crucial-
commodity.html
According to industry research firm
IMARC Group, high-purity silica sands
are becoming more sought after, with the
global market growing at a compound
annual growth rate (CAGR) of around 6%
between 2010 and 2017. In 2017, a total
of 188 Mt of silica sand was produced
globally. This growth has been driven by
silica sand’s applications across a broad
range of industries including glassmaking,
foundry casting, water filtration, chemicals
and metals, hydraulic fracturing and an
increasing number of hi-tech products,
including solar panels. For example, in the
global glass-making industry, one of the
major consumers of high-purity silica has
experienced significant growth recently
from the construction and automotive
industries. IMARC also estimated the global
silica sand market could grow from US$7
billion to US$20 billion in 2024.
Source: www.imarcgroup.com/silica-sand-
manufacturing-plant
Metallica Minerals Annual Report | 2022 Silica Sand Market - Growth rate by region 2022-2027
Silica Sand Market - Growth Rate by Region 2022-2027
High
Medium
Low
Source: Mordor Intelligence
Other
4%
Abrasives
5%
Filtration
10%
Hydraulic
Fracturing
18%
Glass Industry
37%
Foundry
26%
Asia Pacific silica production by end use
Silica Sand Market - Growth Rate by Region, 2022-2027
21
CAP E FLATTERY’S
PATHWAY TO NET
ZE RO
The International Energy Agency (IEA)
highlights reaching net zero by 2050 will
be based largely on renewables, with solar
power as the single biggest supply source.
IEA report states the pathway to net zero
requires annual additions of solar PV to
reach 630 gigawatts and wind power to
reach 390 gigawatts by 2030.*
Together this is four-times the record level
achieved in 2020.
For solar PV, this means installing the
world’s current largest solar park roughly
every day.
*IEA, 2021: https://iea.blob.core.windows.
net/assets/4719e321-6d3d-41a2-
bd6b-461ad2f850a8/NetZeroby2050-
ARoadmapfortheGlobalEnergySector.pdf
Cape Flattery’s 1.35 Mtpa production of
high-quality Silica sand could produce over
133 million 375W solar panels on the basis
of 74% of the panel is comprised of SiO2.
That’s equivalent to 3.35 billion panels over
a 25 year mine life at full production.
With an assumed output of 4.0 kWh/day,
those panels have the potential to generate
over 41,312 TWh of renewable energy over
their operating life (25 years).
* Detailed analysis of energy production
and emissions abatement opportunity
carried out by Arche Energy using
information derived from third parties,
heuristics and assumptions.
Metallica Minerals Annual Report | 2022
CAPE FLATTERY’S 1.35 MTPA
PRODUCTION OF HIGH-
QUALITY SILICA SAND COULD
PRODUCE OVER 133 MILLION
375W SOLAR PANELS .
“
“
23
CLERMONT
CO P PER GOLD
MLM 25% through subsidiary PGE Minerals Pty Ltd | 248Km2 Exploration Tenure | EPM 17968
In August 2021, the Company announced
it had signed a Memorandum of
Understanding (MoU) with Diatreme
Resources for a potential Joint Venture on
the Clermont Copper Gold Project which
comprises EPM 17968, after identifying the
tenement as having the potential to host a
Copper-Gold porphyry system.
In April 2022, the Company confirmed that
it has met the expenditure commitment
to earn 25% of the project. In addition, the
Company made the decision to move to
the second stage of the earn in phase of
the agreement, which at completion will
increase its share of the project to 51%
through a further $700,000 spend on
exploration activity to be completed prior
to 27 April 2023.
After reviewing the historical drill hole, soil
and geophysical data for EPM17968, Metallica
identified a large magnetic low feature within
what Diatreme referred to as the Rosevale
Porphyry Corridor. Drilling adjacent to and
on the margins off this feature intersected
low levels of copper – gold and molybdenum
mineralisation. MLM postulated that the
magnetic low feature is a buried porphyry
intrusive which has been strongly altered
and is the source of the mineralisation on the
periphery of this feature.
In February 2022, MLM initiated a two-
hole diamond drilling program to test the
magnetic feature which has a modelled
depth to top of between 300m to 500m.
The first hole (RDD019) was drilled to a
depth of 530.40m and was completed in
March 2022, the second hole (RDD020)
was drilled to a depth of 501.50m and was
completed in April 2022. The drill hole
parameters for the two holes are included
as Table 4 and the drill hole locations are
presented in Figure 3.
Both holes intersected porphyry style
alteration, veins styles and low levels of
mineralisation characteristic of porphyry
deposits, and this was confirmed by the
assay results which recorded anomalous
copper – gold and molybdenum
intersections in both holes. Assay results
from the drilling program were released to
the ASX on the 13th of July 2022, “Clermont
Project Assay Results indicate the potential
for a mineralised porphyry at depth”.
The results from the drilling indicate that:
» Anomalous copper, gold and
molybdenum were intersected in both
holes
» The drill holes show a distinction
geochemical zonation which indicates
the main copper rich zone of the
porphyry system is potentially below the
depth of the current drilling
» The intensity of copper, silver and
gold geochemistry is increasing with
depth, with the highest recorded
values occurring at or towards the
base of the two holes. Modelling of
the trace geochemistry, especially tin
and tungsten values indicate that the
two holes were drilled into the zone
immediately above or adjacent to the
more mineralised core
Based on the results from the drilling
program at Clermont, further exploration
has been planned for the September and
December Quarters of 2022. This includes;
» Petrological studies and a detailed
analysis of the geochemical data to
assist in vectoring in to where a higher-
grade copper rich zone may occur in the
porphyry system, and
Metallica Minerals Annual Report | 2022 » A close spaced magnetic survey to get
a better understanding of the depth and
morphology of magnetic low anomaly.
Based on the results of the magnetic
survey and geochemical analysis it is
likely that one of the existing holes will be
extended by an additional 500m to 1,000m
to determine if the copper grades continue
to increase with depth with this drilling
planned for Q4 2022.
Table 4: Clermont JV | EPM 17968 | Drill Hole Parameters
Hole Number
Easting
Northing
RDD019
RDD020
550,967
7,471,548
551,250
7,471, 559
320
RL
321
Dip
-90
-60
Azimuth
Depth (m)
000
240
530.40
501.50
Figure 3: Clermont Drill holes
25
DIRECTOR AND
MANAGEMENT PROFILES
T H EO PSAROS
BRAD SAMPSON
Executive Chairman
Non-Executive Director
Theo Psaros has over 37 years of diverse
global and local commercial experience in a
number of business sectors and industries
within multi-million dollar publicly listed
companies, private companies and
government departments. Theo’s resource
industry experience included a number of
years as Chief Financial Officer and Chief
Operating Officer of MetroCoal Limited,
Chairman of the Surat Basin Coal Alliance
and a member of the industry group that
assisted with the Queensland Government
Department of Natural Resources & Mines
to prepare the 30-year strategic plan for
the resources industry in Queensland
(ResourcesQ).
Theo joined the board of Metallica Minerals
as Non-Executive Chairman on 1 February
2019 and was appointed as Executive
Chairman on 21 May 2020.
Brad Sampson is a Brisbane based
internationally experienced business leader,
Director and mining professional with
more than 30 years resources industry
experience. He brings significant mine
development and operating experience
to the Metallica Board along with listed
company governance experience across
multiple international jurisdictions.
Brad has experienced all aspects of mining
operations, having worked in leadership
roles through the entire cycle of exploration,
development, operations and closure.
Brad joined the board of Metallica Minerals
as Non-Executive Director on 13 May 2021.
Metallica Minerals Annual Report | 2022
MA RK BOJA NJAC
SCOTT WADDELL
Non-Executive Director
Chief Financial Officer and Company
Mark Bojanjac is a Perth based company
Director with more than 20 years of
significant experience in ASX resource
companies including those that have taken
exploration projects into production. He
is currently Executive Chairman of PolarX
Limited (ASX: PXX), Non-executive Director
of Kula Gold Limited (ASX: KGD). He was
previously Non-executive Director and later
Managing Director of Adamus Resources
leading the transition of the company to a
gold producer.
Mark joined the board of Metallica Minerals
as Non-Executive Director on 13 May 2021.
Secretary
Scott Waddell’s resources experience was
gained from eight (8) years with Metro
Mining Limited and Cape Alumina Limited,
nine (9) years with Anglo Coal and eight
(8) years with Rio Tinto Alcan (RTA). This
included direct mine site experience of 8
years. Roles included Interim CEO at Cape
Alumina, CFO and Company Secretary for
Metro Mining Limited and Cape Alumina
Limited, Head of Finance for the Monash
Energy project in Victoria’s La Trobe Valley,
as well as being a director of the CO2CRC
Otway Pilot Project and chairman of the
audit committee, Business Development
Manager as well as a number of finance and
corporate roles.
Scott joined the board of Metallica Minerals
as Executive Director on 1 February 2019
and resigned from his Executive Director
role on 31 August 2021. Scott has continued
with the Company as Chief Financial Officer
and Company Secretary since this date.
27
NI C HO LAS V ILLA
PAT SMITH
General Manager Cape Flattery Silica
Exploration Manager
Patrick Smith has over 30 years experience
as an exploration geologist, with the last
15 years being in senior roles either as an
Exploration Manager or Country Manager.
He has an MSc in Mining Geology from
Cambourne School of Mines in the UK and
an MBA from QUT in Australia.
Patrick has experience exploring for various
commodities over his career including
Gold - Copper exploration in Australia, the
Middle East and the Pacific region, nickel,
cobalt and scandium in Australia and tin
– tantalum and lithium in Africa. Other
commodities he has explored for include,
heavy mineral sands, and more recently
silica sands.
He has designed and implement numerous
drilling programs over his career which
have led to the delineation of significant
resources and is familiar with most
aspects of tenement administration and
management especially in Queensland and
PNG. He has specialised in leading small
efficient exploration teams but has also
managed large exploration camps.
Nicholas has over 20 years’ experience as
a Mining Professional, he is well practiced
in the delivery of resource projects, taking
them from early exploration phase through
to production.
Nicholas has managed bulk commodity
operations both as Principal and as
Contractor, fulfilling senior management
roles including Mining Manager, Project
Manager and Site Senior Executive.
Developing his experience in a wide range
of commodities and operations across
Australia, Nicholas cultivated his knowledge
in as many areas as the resource industry
afforded him during his career including
Engineering, Maintenance, Survey, Geology
and Construction.
As part of this experience, Nicholas has had
comprehensive managerial involvement in
large scale mobilisation of mining fleets,
preceded by in depth investigation and
establishment of facilities and personnel to
match operational demand.
Thoroughly versed in Queensland resource
project approvals processes including
Environmental Studies and Native Title
negotiations, Nicholas was Project Manager
for the team that successfully delivered
Metro Mining’s Bauxite Hills mine to full
production in Northern Cape York. This
was comprised of both mining and marine
elements, situated in a remote location with
complex logistics.
Holding an Honours Degree in Geology, as
well as a Diploma in Project Management,
Nicholas is a long-term Member of the
Australian Institute of Geoscientists.
Nicholas joined Metallica Minerals on the
14th of June, 2021 with the purpose of
delivering yet another successful operation
in Northern Queensland.
Nicholas was appointed to the role of
General Manager on 14 June 2021.
Metallica Minerals Annual Report | 2022 IN TE REST I N MINING TENEMENTS
This section provides information required under ASX listing rule 5.3.3 for mineral
exploration entities.
State Tenement Name Tenement ID Status
Location
Interest Holder
QLD Cape Flattery
Silica
QLD Cape Flattery
Silica
EPM 25734
Granted
Cape
Flattery
100%
ML 100284
Application Cape
100%
Flattery
QLD Clermont
EPM 17968
Granted
Clermont
25%
Copper Gold
Cape Flattery
Silica P/L
Cape Flattery
Silica P/L
PGE Minerals
P/L
Table 5: Cape Flattery Silica Sand Maiden Ore Reserve
Ore Reserve
Category
Tonnage
Mt
Probable
Reserve
46
SIO₂
%
99.18
FE₂O₃
%
0.12
TIO₂
%
0.14
AL₂O₃
%
0.11
LOI
%
0.19
Waste
Mt
Silica Sand
Mm3
2.6
28.76
Refer to ASX Release: 7 April 2022: “Significant Increase in Measured and Indicated Resources at Cape Flattery Silica Project”
29
TOP 20 SHAREHOLDERS
AS A T 20
SEP TEMBER 20 22
Rank Name
# of Shares
%IC
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
515 131
,
,
933
23.
13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
SPARTA AG
6 4 , 5 1 6 , 1 2 9
DOSTAL NOMINEES PTY LTD
4 0, 4 2 2 , 4 0 9
ROOKHARP CAPITAL PTY LIMITED
SIBELCO ASIA PACIFIC PTY LTD
PLAN-1 PTY LTD
GEFRATO TRADING PTY LTD
MR GRAHAM RAYMOND WILLIAM DOW
SHADBOLT FUTURE FUND (TOTTENHAM) PTY LTD
1 7, 2 4 7, 4 0 8
51
,
4 3 6
, 5 0 0
11, 0 12, 50 2
1 0,0 0 0,0 0 0
9 , 2 50
3,
50
8 , 1 9 0 , 0 0 0
CALAMA HOLDINGS PTY LTD
5 , 5 0 0 , 0 0 0
ANDREW SCOTT VICTOR WADDELL
CAROJON PTY LTD
MRS CAROLYN DOW
5 , 0 6 6 , 6 6 7
5 , 0 0 0 , 0 0 0
4 ,9 80 , 0 00
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
4 , 9 7 5 , 5 2 7
BONDLINE LIMITED
CITICORP NOMINEES PTY LIMITED
4, 9 10 , 96 6
4 , 8 5 8 , 3 6 7
MACFORBES SUPER PTY LTD
4 , 5 0 0 , 0 0 0
NO BULL HEALTH PTY LTD
4 , 2 5 0 , 0 0 0
K H DREDGE NOMINEES PTY LTD 3 , 6 5 0 , 0 0 0
9.62
6.03
2.57
302.
1.64
1.49
351.
1.22
0.82
0.76
0.75
0.74
0.74
0.73
0.72
0.67
0.63
0.54
0.48
20
MINNELEX PTY LTD
3 , 2 0 5 , 2 6 0
Total
Balance of register
Grand total
3
81,878,97
3
56. 49
882
20,8
, 287
43.
06
670,699,701
100.00
Metallica Miner als Annual R eport | 20 22
CO MP ETENT P ERSON STATEMENT
CAP E FLATTERY SILICA SAND RESOURCE
The information in this report that relates to the Cape Flattery Silica Project – Eastern
Resource Area is based on information and modelling carried out by Chris Ainslie, Project
Engineer, who is a full-time employee of Ausrocks Pty Ltd and a Member of the Australasian
Institute of Mining & Metallurgy. The work was supervised by Mr Carl Morandy, Mining
Engineer who is Managing Director of Ausrocks Pty Ltd and a Member of the Australasian
Institute of Mining & Metallurgy and also by Mr Brice Mutton who is a Senior Associate
Geologist for Ausrocks Pty Ltd. Mr Mutton is a Fellow of the Australasian Institute of Mining
& Metallurgy and a Fellow of the Australian Institute of Geoscientists.
Mr Morandy and Mr Ainslie and Mr Mutton are employed by Ausrocks Pty Ltd who have
been engaged by Metallica Minerals Ltd to prepare this independent report, there is no
conflict of interest between the parties. Mr Morandy, Mr Ainslie and Mutton consent to the
disclosure of information in the form and context in which it appears in this report.
The overall resource work for the Cape Flattery Silica Project – Eastern Resource Area is
based on the direction and supervision of Mr Mutton who has sufficient experience that is
relevant to the style of mineralisation and type of deposits under consideration and to the
activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition
of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”.
CAP E FLATTERY SILICA SAND
EX P LO RATION RESULTS
The information in this report that relates to the Exploration Sampling and Exploration
Results is based on information compiled by Mr Patrick Smith, a Competent Person who is a
Member of the Australasian Institute of Mining and Metallurgy.
Mr Smith is the owner and sole Director of PSGS Pty Ltd and is contracted to Metallica
Minerals as their Exploration Manager. Mr Smith confirms there is no potential for a conflict
of interest in acting as the Competent Person. Mr Smith has sufficient experience that is
relevant to the style of mineralisation and type of deposits under consideration and to the
activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition
of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves. Mr Smith consents to the inclusion of this information in the form and context in
which it appears in this release/report.
FO RWA RD LOOKING STATEMENT
Forward-looking statements are based on assumptions regarding Metallica, business
strategies, plans and objectives of the Company for future operations and development and
the environment in which Metallica may operate.
Forward-looking statements are based on current views, expectations and beliefs as at the
date they are expressed and which are subject to various risks and uncertainties. Actual
results, performance or achievements of Metallica could be materially different from
those expressed in, or implied by, these forward-looking statements. The forward-looking
statements contained in this presentation are not guarantees or assurances of future
performance and involve known and unknown risks, uncertainties and other factors, many of
which are beyond the control of Metallica, which may cause the actual results, performance
or achievements of Metallica to differ materially from those expressed or implied by the
forward-looking statements. For example, the factors that are likely to affect the results of
Metallica include general economic conditions in Australia and globally; ability for Metallica
to funds its activities; exchange rates; production levels or rates; demand for Metallica’s
products, competition in the markets in which Metallica does and will operate; and the
inherent regulatory risks in the businesses of Metallica. Given these uncertainties, readers are
cautioned to not place undue reliance on such forward-looking statements.
31
Metallica Minerals Limited
ACN 076 696 092
Annual Financial Report - 30 June 2022
Metallica Minerals Limited
Corporate directory
30 June 2022
Directors
T Psaros - Executive Chairman
M Bojanjac - Non-executive Director
B Sampson - Non-executive Director
Company secretary
S Waddell
Annual General Meeting
The details of the annual general meeting of Metallica Minerals Limited are:
Colin Biggers & Paisley Pty Ltd
Level 35, Waterfront Place, 1 Eagle Street
Brisbane QLD 4000
9.30am on Thursday, 17 November 2022
Registered office and principal
place of business
Share register
Auditor
Solicitors
Level 1, North Tower
Terrace Office Park
527 Gregory Terrace
Bowen Hills
QLD 4006
Phone: (07) 3249 3000
Link Market Services Limited
Level 21, 10 Eagle Street
Brisbane
QLD 4001
Phone: 1300 554 474
Moore Australia Audit (QLD/NNSW)
Level 12, 10 Eagle Street
Brisbane
QLD 4000
Colin Biggers & Paisley Pty Ltd
Level 35, Waterfront Place
1 Eagle Street
Brisbane
QLD 4000
Stock exchange listing
Metallica Minerals Limited shares are listed on the Australian Securities Exchange
(ASX code: MLM)
Website
www.metallicaminerals.com.au
Corporate Governance Statement
www.metallicaminerals.com.au/corporate-governance
1
Metallica Minerals Limited
Directors' report
30 June 2022
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'consolidated entity') consisting of Metallica Minerals Limited (referred to hereafter as the 'company' or 'parent entity') and
the entities it controlled at the end of, or during, the year ended 30 June 2022.
Directors
The following persons were directors of Metallica Minerals Limited during the whole of the financial year and up to the date
of this report, unless otherwise stated:
Theo Psaros
Mark Bojanjac
Brad Sampson
Scott Waddell (resigned 31 August 2021)
Andrew Gillies (resigned 31 August 2021)
Principal activities
During the financial year, the principal activities of the consolidated entity consisted of mineral exploration, evaluation and
progressing the development of its Cape Flattery Silica Sands Project.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the consolidated entity after providing for income tax amounted to $2,007,194 (30 June 2021: $3,054,991).
The 30 June 2021 consolidated loss includes the net loss of $2,049,754 on disposal of the wholly-owned subsidiary
companies, Oresome Australia Pty Ltd, Oresome Bauxite Pty Ltd and their respective 50% interest holdings in the JV.
During the year ended 30 June 2022 the company:
(a) Continued to advance its Cape Flattery Silica Sands Project which included the following activities:
●
Successfully completed a 24-hole infill drilling program in December 2021 within the Eastern Target Area. All drilling
was undertaken with permission from the Aboriginal Corporations.
Progressing the Pre-Feasibility Study (PFS) which was completed in March of 2022.
Held a number of meetings with the Dingaal and Nguurruumungu clan members in Hope Vale and Cooktown where the
terms of a Negotiation Protocol document was finalised and progress was made on Mining Agreements with the
Traditional Landowner parties.
On 7 April 2022, released an upgraded resource in the Eastern Resource Area estimated and summarised in the table
below. The infill drilling program completed by the company in December 2021 successfully increased the Measured
and Indicated Resources from 47.8Mt @ 99.18% SiO2 to 52.2Mt @ 99.18% SiO2. Notably there has been a 74%
increase in the Measured Resource from 9.6Mt to 16.7Mt, which will form part of the early mine life as assessed within
the Definitive Feasibility Study.
Signed a Memorandum of Understanding (MOU) with the Queensland Government owned corporation, Far North
Queensland Ports Corporation Limited (Ports North). Ports North is the Port Authority that manages the Cape Flattery
Port. The MOU is the first step towards formalising the commercial terms for the establishment of the company's
purpose-built jetty for our silica sand project. Completion of the commercial terms remains subject to granting of
regulatory approvals and finalising agreements with the Traditional Landowners.
Commenced preliminary work on a Definitive Feasibility Study (DFS) which is planned for completion in Q2 of 2023.
The company, along with its external environmental consultants, completed an array of environmental studies at the
project. These studies included soil sampling, ecological studies and water monitoring.
●
●
●
●
●
●
2
Metallica Minerals Limited
Directors' report
30 June 2022
Figure 1: Cape Flattery Silica Project - Distribution of the various Resource categories
On 7 April 2022, the company released an upgraded resource in the Cape Flattery Silica Eastern Resource Area estimated
and summarised in Table 1, as is shown below:
Table 1 - Project Resources
Silica Sand
(Mt)
Measured Resource 16.7
Indicated Resource 35.2
Inferred Resource 0.3
Total 52.2
Silica Sand
(Mm3)
10.4
22.0
0.20
32.60
Density
(t/m3)
1.6
1.6
1.6
1.6
SiO2
%
99.26
99.14
99.06
99.18
Table 2 - Project Reserve
Silica Sand
(Mt)
Probable Reserve 46
Silica Sand
(Mm3)
28.76
Waste
Mt
2.6
SiO2
%
99.18
AI2O3
%
0.08
0.13
0.16
0.11
AI2O3
%
0.11
Fe2O3
%
0.10
0.13
0.14
0.12
Fe2O3
%
0.12
TiO2
%
0.13
0.14
0.12
0.14
TiO2
%
0.14
LOI
%
0.17
0.19
0.23
0.18
LOI
%
0.19
For further details, see ASX Release on 7 April 2022 titled “Significant Increase in Measured and Indicated Resources at
Cape Flattery Silica Project".
The Resource has been prepared in accordance with the JORC Code 2012 – A cut-off grade 98.5% has been defined based
on the surrounding data. These results show there is good potential to produce a premium grade silica product using standard
processing techniques.
See the Competent Person statement below.
3
Metallica Minerals Limited
Directors' report
30 June 2022
(b) On 5 August 2021, the company announced the signing of a Memorandum of Understanding (“MoU”) with Diatreme
Resources (ASX: DRX) for a potential joint venture on the Clermont Gold Copper Project (Clermont project) which comprises
EPM 17968. On 29 April 2022, the company announced that it had met the expenditure commitment undertaken in
accordance with the MOU to earn 25% of the Clermont project. This transfer of 25% of the EPM to the company is pending,
awaiting transfer by the Queensland Department of Resources. In addition, the company has made the decision to move to
the second stage of the earn-in phase of the agreement and increase the company's share to 51% of the project through a
further $700,000 spend on exploration activity at the Clermont Project prior to 27 April 2023.
1. Competent Person Statement
1.1 Cape Flattery Silica Sand Resource
The information in this report that relates to the Cape Flattery Silica Project - Eastern Resource Area is based on information
and modelling carried out by Chris Ainslie, Project Engineer, who is a full-time employee of Ausrocks Pty Ltd and a Member
of the Australasian Institute of Mining & Metallurgy. The work was supervised by Mr Carl Morandy, Mining Engineer who is
Managing Director of Ausrocks Pty Ltd and a Member of the Australasian Institute of Mining & Metallurgy and also by Mr
Brice Mutton who is a Senior Associate Geologist for Ausrocks Pty Ltd. Mr Mutton is a Fellow of the Australasian Institute of
Mining & Metallurgy and a Fellow of the Australian Institute of Geoscientists. Mr Morandy, Mr Ainslie and Mr Mutton are
employed by Ausrocks Pty Ltd who have been engaged by Metallica Minerals Ltd to prepare this independent report, there
is no conflict of interest between the parties. Mr Morandy, Mr Ainslie and Mr Mutton consent to the disclosure of information
in the form and context in which it appears in this report.
The overall resource work for the Cape Flattery Silica Project - Eastern Resource Area is based on the direction and
supervision of Mr Mutton who has sufficient experience that is relevant to the style of mineralisation and type of deposits
under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of
the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves".
1.2 Cape Flattery Silica Sand Exploration Results
The information in this report that relates to the Exploration Sampling and Exploration Results is based on information
compiled by Mr Patrick Smith, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy.
Capital expenditure
During the 2022 financial year, $3,977,378 was incurred on capitalised exploration and development expenditure (2021:
$1,183,081). The majority of the expenditure incurred was on the Cape Flattery Silica Sands Project.
Cash flow and Liquidity
During the 2022 financial year, the net cash outflows from operating activities increased to $1,075,641 (2021: $933,561). An
increase in employee costs and other general costs contributed to the increase in cash outflows from operating activities.
For the financial year ended 30 June 2022, the net cash outflow from investing activities amounted to $4,112,735 (2021 -
net cash outflow: $832,814). The net cash outflows for 2022 and 2021 were largely attributable to payments for exploration
and evaluation assets. Cash outflows for plant and equipment and, exploration and evaluation amounted to $4,087,680
(2021: $1,188,746).
COVID-19 Impacts
COVID-19 continues to impact the company particularly around our Traditional Landowner Negotiations held in Hope Vale
and Cooktown. The company continues to follow recommendations from Queensland Health and the Australian Government
to provide a COVID-19 safe workplace. Metallica remains committed to following the guidelines released by the Government.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
On 11 July 2022, the company allotted 7,342,742 MLMOB options to participants of the February 2022 placement.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
Likely developments and expected results of operations
The consolidated entity's goal is to develop and maximise the value of the Cape Flattery Silica Sands Project and to continue
to evaluate the Clermont project.
4
Metallica Minerals Limited
Directors' report
30 June 2022
Material business risks
The consolidated entity is engaged in the exploration and development of mine projects in Australia. The consolidated entity
is currently focused on successfully delivering high purity silica sand to a diversified customer base through the development
of its Cape Flattery Silica Sands Project. Material business risks that could impact the consolidated entity's performance are
described below.
Resource and
reserve estimates
Resource and reserve estimates are inherently prone to variability. They involve expressions of
judgement with regard to the presence and quality of mineralisation and the ability to extract and
process the mineralisation economically. Estimates which were valid when originally calculated may
alter significantly when new information or techniques become available. This may result in alterations to
development and mining plans which may, in turn, adversely affect the consolidated entity's operations
and reduce the estimated amount of mineral resources and ore reserves available for production and
expansion plans.
The consolidated entity manages the risk associated with resource and reserve estimates by engaging
suitably experienced and qualified contractors and operators and ensuring that the Competent Person
meets the requirements of the JORC Code 2012.
Commodity
prices
Commodity prices fluctuate and are affected by numerous factors beyond the control of the consolidated
entity. These factors include worldwide and regional supply and demand for commodities, general world
economic conditions and the outlook for interest rates, inflation and other economic or political factors
on both a regional and global basis. These factors may have a negative effect on the consolidated
entity's exploration, project development and production plans and activities, together with its ability to
fund those plans and activities.
Operating risks
The operations of the consolidated entity may be affected by various factors, including operational and
technical difficulties encountered in mining; difficulties in commissioning and operating plant and
equipment; mechanical failure or plant breakdown; unanticipated metallurgical problems which may
affect extraction costs; adverse weather conditions (e.g. significant rainfall); industrial and environmental
accidents; industrial disputes; and unexpected shortages or increases in the costs of consumables,
spare parts, plant and equipment. Such changes may have an adverse effect on the operations and
production ability of the consolidated entity by increasing costs or delaying activities.
The consolidated entity manages operating risks through a variety of means including selecting suitably
experienced and qualified contractors and operators; regular monitoring of the performance of
contractors and operators; the recruitment and retention of appropriately qualified employees and
contractors; and the regular review by the Board of the consolidated entity's key risks.
Environmental
and approval
risks
The ability of the consolidated entity to operate, develop and explore projects may be delayed and
limited by environmental and approval considerations and significant costs may result from complying
with the consolidated entity's environmental and approval obligations.
The consolidated entity recognises management’s best estimate for assets’ retirement obligations and
site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods
could differ materially from the estimates. Additionally, future changes to environmental laws and
regulations, life of mine estimates and discount rates could affect the carrying amount of this provision.
Environmental regulation
The consolidated entity is subject to environmental regulations under laws of Queensland and Australia where it holds mineral
exploration and mining tenements. During the financial year the consolidated entity’s activities recorded no non-compliance
issues.
5
Metallica Minerals Limited
Directors' report
30 June 2022
Information on directors (as at the date of this report)
Name:
Title:
Qualifications:
Experience and expertise:
Theo Psaros
Executive Chairman
GAICD, CA, BFinAdmin
Theo Psaros has over 37 years of diverse global and local commercial experience in a
number of business sectors and industries within multi-million dollar publicly listed
companies, private companies and government departments. Theo's resource industry
experience included a number of years as Chief Financial Officer and Chief Operating
Officer of MetroCoal Limited, Chairman of the Surat Basin Coal Alliance and a member
of the industry group that assisted with the Queensland Government Department of
Natural Resources & Mines to prepare the 30-year strategic plan for the resources
industry in Queensland (ResourcesQ).
None
Other current directorships:
Former directorships (last 3 years): Mobilicom Limited (ASX: MOB) resigned 5 July 2021
Special responsibilities:
Interests in shares:
Interests in options:
Executive Chairman
6,000,000 (3,000,000 shares subject to a limited recourse loan option)
3,000,000 shares subject to a limited recourse loan option
948,477 MLMOB listed options
1,266,667
Interests in rights:
Name:
Title:
Qualifications:
Experience and expertise:
Mark Bojanjac
Non-executive Director
BCom, ICAA
Mark Bojanjac is a Perth based company Director with more than 20 years of significant
experience in ASX resource companies including those that have taken exploration
projects into production. He is currently Executive Chairman of PolarX Limited (ASX:
PXX), Non-executive Director of Kula Gold Limited (ASX: KGD). He was previously
Non-executive Director and later Managing Director of Adamus Resources leading the
transition of the company to a gold producer.
Executive Chairman of PolarX Limited and Non-executive Director of Kula Gold Limited
Other current directorships:
Former directorships (last 3 years): Non-executive Director of Geopacific Resources Limited from 2013 to 2019
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
None
Nil
Nil
176,667
Name:
Title:
Qualifications:
Experience and expertise:
Stuart Bradley Sampson
Non-executive Director
B.E. (Hons) Mining, MBA, AMP, MAusIMM
Brad Sampson is a Brisbane based internationally experienced business leader,
Director and mining professional with more than 30 years resources industry
experience. He brings significant mine development and operating experience to the
Metallica Board along with listed company governance experience across multiple
international jurisdictions. Brad has experienced all aspects of mining operations,
having worked in leadership roles through the entire cycle of exploration, development,
operations and closure.
Director of Kore Potash Plc and Non-executive Director of Agrimin Ltd
Other current directorships:
Former directorships (last 3 years): None
None
Special responsibilities:
264,516
Interests in shares:
Nil
Interests in options:
176,667
Interests in rights:
6
Metallica Minerals Limited
Directors' report
30 June 2022
Name:
Title:
Qualifications:
Experience and expertise:
Andrew Scott Waddell (resigned as Director on 31 August 2021)
Executive Director (to 31 August 2021, then Chief Financial Officer and Company
Secretary thereafter)
B.Bus, Dip.PMM (Dist), FCPA, AGIA
Scott Waddell's resources experience was gained from eight (8) years with Metro
Mining Limited and Cape Alumina Limited, nine (9) years with Anglo Coal and eight (8)
years with Rio Tinto Alcan (RTA). This included direct mine site experience of 8 years.
Roles included Interim CEO at Cape Alumina, CFO and Company Secretary for Metro
Mining Limited and Cape Alumina Limited, Head of Finance for the Monash Energy
project in Victoria's La Trobe Valley, as well as being a director of the CO2CRC Otway
Pilot Project and chairman of the audit committee, Business Development Manager as
well as a number of finance and corporate roles.
None
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
CFO and Company Secretary
6,000,000 (4,000,000 shares subject to a limited recourse loan option)*
4,000,000 shares subject to a limited recourse loan option*
1,000,000 MLMOB listed options*
1,600,000*
Interests in rights:
Name:
Title:
Qualifications:
Experience and expertise:
Andrew Gillies (resigned 31 August 2021)
Non-executive Director
BSc Bachelor of Science (Geology), MAusIMM
Andrew Gillies is a highly experienced geologist with over 30 years' experience as
company director of ASX listed junior resource companies with strong resource and
mineral exploration, company management, project feasibility, project development,
mining, governance and corporate background.
Andrew was a founding director of Metallica Minerals in 1997, listing the company on
the ASX in 2004. He retired from the managing director position in July 2015 and then
retired as a director in June 2017.
Andrew has extensive experience across a range of mineral and resource projects,
much of this experience gained throughout Queensland. Andrew successfully listed
subsidiaries Cape Alumina Limited and MetroCoal Limited on the ASX in 2009 (these
companies have since merged to become Metro Mining Limited, a successful bauxite
producer).
Andrew was a director of ASX junior companies Orion Metals Limited and Planet Metals
Limited and he was previously a Director of the Queensland Resources Council (QRC).
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
5,750,000 (3,000,000 shares subject to a limited recourse loan option)*
Interests in shares:
3,000,000 shares subject to a limited recourse loan option*
Interests in options:
600,000 MLMOB listed options
Nil*
Interests in rights:
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships in all
other types of entities, unless otherwise stated. 'Former directorships (in the last 3 years)' quoted above are directorships
held in the last 3 years for listed entities only and excludes directorships in all other types of entities, unless otherwise stated.
* Interests in the shares, options and rights of the company as at the date of resignation as a director.
Company secretary
The Company Secretary is Scott Waddell. Scott is a member of the Governance Institute of Australia and has previously
worked as the Company Secretary to Cape Alumina Ltd and Metro Mining Ltd over an eight-year period.
7
Metallica Minerals Limited
Directors' report
30 June 2022
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2022, and
the number of meetings attended by each director were:
T Psaros
M Bojanjac
B Sampson
S Waddell (resigned as Director on 31 August 2021)
A Gillies (resigned 31 August 2021)
Full Board
Attended
Held
13
13
13
3
3
13
13
13
3
3
Held: represents the number of meetings held during the time the director held office.
The Board has previously decided that it was no longer appropriate to have separate committees for Audit & Risk and
Remuneration. The Board as part of its role has undertaken the responsibilities of these Board committees and carries out
the functions set out in their respective charters to ensure that their objectives are met.
Remuneration report (audited)
The remuneration report, which has been audited, outlines the director and executive remuneration arrangements for the
consolidated entity and the company, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's and company's executive reward framework is to ensure reward for performance
is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of
strategic objectives and the creation of value for shareholders, and conforms to the market best practice for delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
●
●
●
competitiveness and reasonableness
acceptability to shareholders
transparency
The remuneration structure for key management personnel, excluding non-executive directors, is set by the Board and is
based on a number of factors including, market remuneration for comparable companies, particular experience of the
individual concerned and overall performance of the consolidated entity. The contracts for service between the consolidated
entity and key management personnel are on a continuing basis the terms of which are not expected to materially change in
the immediate future. The consolidated entity retains the right to terminate contracts immediately by making payment of an
amount based on the employee's years of service. Upon retirement or termination key management personnel, excluding
non-executives, are paid employee benefits accrued to date of retirement or termination. No other termination benefits are
payable under service contracts except that the Executive Chairman is entitled to an additional 3 months written notice in the
case of a change of control event. Unless otherwise stated, service agreements do not provide for pre-determined
compensation values or the manner of payment. Compensation is determined in accordance with the general remuneration
policy. The manner of payment is determined on a case by case basis and is generally a mix of cash and non-cash benefits
as considered appropriate by the Board.
The remuneration framework is aligned to shareholders’ interests through:
●
●
a focus on sustained growth in share price and key non-financial drivers of value
attracting and retaining high calibre executives
8
Metallica Minerals Limited
Directors' report
30 June 2022
The remuneration framework is aligned to employees’ interests through:
●
●
●
●
rewarding capability and experience
reflecting competitive rates of remuneration in respect of skills and responsibility
providing a clear structure for earning rewards
providing recognition for achievements
In accordance with best practice corporate governance, the structure of non-executive directors and executive remuneration
is separate.
Non-executive director remuneration
Remuneration of the non-executive directors is approved by the Board and set in aggregate within the maximum amount
approved by the shareholders from time to time. The fees have been determined by the Board having regard to industry
practice and the need to obtain appropriately qualified independent persons.
The aggregate pool of remuneration paid to non-executive directors was approved by shareholders on 24 November 2010
and is currently $300,000 per annum for Metallica Minerals Limited as parent entity. The amount paid to non-executive
directors of the parent entity (Metallica Minerals Limited) during the year to 30 June 2022 was $120,050 excluding any
remuneration from options (2021: $60,631).
Executive remuneration
The consolidated entity and company aims to reward executives with a level and mix of remuneration, both fixed and variable,
based on their position and level of achievement.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
(i) Fixed remuneration
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board, based on individual and business unit performance, the overall performance of the consolidated entity and
comparable market remunerations.
Executives can receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the consolidated entity and adds additional value to the executive.
(ii) Short-term incentives
STIs paid to senior executives are made on a discretionary basis as determined by the Board. These incentives, while not
guaranteed, are directly linked to the achievement of KPIs as well as various performance targets for each area of operational
responsibility, including the preparation and delivery of reports on time and meeting industry targets and standards in relation
to workplace health and safety. No bonus is awarded where performance falls below the minimum acceptable KPI levels as
determined by the Board.
(iii) Long-term incentives
Long-term performance incentives (LTI) are delivered through the grant of options and share rights to executive directors
and selected senior executives from time to time as part of their remuneration. Share rights have a nil exercise price and the
performance hurdles applicable to any performance period (including how they will be measured) is set out in the invitation
to the eligible executives.
9
Metallica Minerals Limited
Directors' report
30 June 2022
At the Annual General Meeting (AGM) held on 17 November 2021, the company's shareholders approved the issue of share
options to key employees under the company's incentive plan.
At the Extraordinary General Meeting (EGM) held on 7 July 2021, the company's shareholders approved the issue of
performance rights to Directors under the company's new Employee Equity Incentive Plan.
The purpose of the new incentive plan is to:
(a) assist in the reward, retention and motivation of participants;
(b) align the interests of participants with the interests of the company's shareholders;
(c) promote the long-term success of the company and provide greater incentive for participants to focus on the company's
longer term goals;
(d) link the reward of participants to the performance of the company and the creation of shareholder value; and
(e) provide participants with the opportunity to share in any future growth in value of the company.
Consolidated entity performance and link to remuneration
Because the consolidated entity is in exploration and development, not production, there is no direct relationship between
the consolidated entity’s financial profits and the level of remuneration paid to key management personnel.
At 30 June 2022, the market price of the company’s ordinary shares was 2.3 cents per share (30 June 2021: 3.5 cents per
share). No dividends were paid during the year ended 30 June 2022.
Share prices are subject to the influence of international metal prices and market sentiment towards the sector and increases
or decreases may occur independently of executive performance or remuneration. The company may issue options or
performance rights to provide an incentive for key management personnel which, it is believed, is in line with industry
standards and practice and is also believed to align the interests of key management personnel with those of the company’s
shareholders.
Unless otherwise stated, service agreements do not provide for pre-determined compensation values or the manner of
payment. Compensation is determined in accordance with the general remuneration policy. The manner of payment is
determined on a case by case basis and is generally a mix of cash and non-cash benefits as determined by the Board of
Directors. Except in so far as Directors and other key management personnel hold options or share rights over shares in the
company, there is no relationship between remuneration policy and the company’s performance.
Use of remuneration consultants
The company did not engage remuneration consultants to prepare a formal remuneration report during the financial year
ended 30 June 2022.
Voting and comments made at the company's 17 November 2021 Annual General Meeting ('AGM')
At the 17 November 2021 AGM, 98.95% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2021. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors of Metallica Minerals Limited:
●
●
●
●
●
Theo Psaros
Mark Bojanjac
Brad Sampson
Andrew Gillies (resigned 31 August 2021)
S Waddell - Mr Waddell was a key management person up to 31 August 2021 when he resigned as Director of the
company. Mr Waddell has stayed on as Chief Financial Officer and Company Secretary post this date but is no longer
a key management person.
10
Metallica Minerals Limited
Directors' report
30 June 2022
And the following persons:
2022
Non-Executive Directors:
M Bojanjac
B Sampson
A Gillies (a)
Executive Directors:
T Psaros
S Waddell (c)
Short-term benefits
Post-
employment
Long-term
benefits
Share-based
payments
Cash salary
and fees
$
Annual
leave
accrual
$
Super-
annuation
$
Long
service
leave
$
Options,
rights &
shares (b)
$
Total
$
53,335
53,958
6,692
215,455
29,700
359,140
-
-
-
-
-
-
-
5,396
669
17,046
-
23,111
-
-
-
-
-
-
8,005
8,005
46,368
61,340
67,359
53,729
103,766
69,880
236,024
336,267
99,580
618,275
(a) Mr A Gillies resigned on 31 August 2021.
(b) The amounts included in the share-based remuneration represent the grant date fair value of performance rights and
options, amortised on a straight-line basis over the expected vesting period. Expenses are reversed where rights are
forfeited due to a failure to satisfy the service conditions or there is a revision of share rights expected to vest.
(c) Mr Waddell was a Key Management Personnel up to 31 August 2021 when he resigned as Director of the company on
31 August 2021. Mr Waddell has stayed on as Chief Financial Officer and Company Secretary post this date but is no
longer a Key Management Personnel.
Short-term benefits
Post-
employment
Long-term
benefits
Share-based
payments
Cash salary
and fees
$
Annual
leave
accrual
$
Super-
annuation
$
Long
service
leave
$
Options,
rights &
shares (b)
$
Total
$
40,150
8,334
7,610
149,600
135,245
340,939
-
-
-
-
-
-
3,814
-
723
-
-
4,537
-
-
-
-
-
-
4,326
-
-
48,290
8,334
8,333
4,326
5,768
14,420
153,926
141,013
359,896
2021
Non-Executive Directors:
A Gillies
M Bojanjac (a)
B Sampson (a)
Executive Directors:
T Psaros
S Waddell
(a) Mr M Bojanjac and Mr B Sampson were appointed Directors on 13 May 2021.
(b) The amounts included in the share-based remuneration represent the grant date fair value of performance rights and
options, amortised on a straight-line basis over the expected vesting period. Expenses are reversed where rights are
forfeited due to a failure to satisfy the service conditions or there is a revision of share rights expected to vest.
11
Metallica Minerals Limited
Directors' report
30 June 2022
The proportion of remuneration linked to performance (i.e. options) and the fixed proportion are as follows:
Name
Non-Executive Directors:
M Bojanjac
B Sampson
A Gillies
Executive Directors:
T Psaros
S Waddell
Fixed remuneration
2021
2022
At risk - STI
At risk - LTI
2022
2021
2022
2021
87%
88%
14%
69%
30%
100%
100%
91%
97%
96%
13%
12%
-
17%
8%
-
-
-
-
-
-
-
86%
14%
62%
-
-
9%
3%
4%
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Theo Psaros
Executive Chairman
1 February 2021
Ongoing
From 1 February 2021 to 30 September 2021, Mr Psaros’ monthly salary was $15,000
per month on a contractor basis. After 30 September 2021, Mr Psaros was engaged
as an employee on a salary of $227,275 excluding superannuation. Mr Psaros already
participates in an employee incentive plan and no other additional short or long-term
incentives have been included in the terms of the engagement. The contract can be
terminated by three months' notice from either party plus an additional three months'
payment in the case of a change of control event.
Andrew Scott Waddell
CFO and Company Secretary
21 May 2020
Agreement terminated on 31 August 2021 and was replaced with an employee
agreement
From 21 May 2020 the remuneration payable to Scott Waddell was $1,100 per full day
worked (excluding GST) on a contractor basis. Scott already participates in an
employee incentive plan and no other additional short or long-term incentives were
included in the terms of the engagement. The contract could be terminated by six
weeks' notice from either party plus an additional six weeks' payment in the case of a
change of control event. Scott was key management person up to 31 August 2021
when he resigned as a Director of the company. Scott has continued employment as
CFO and Company Secretary post this date but is no longer considered to be a key
management person.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares granted to directors and other key management personnel as part of compensation during the year
ended 30 June 2022.
12
Metallica Minerals Limited
Directors' report
30 June 2022
Options
On 23 December 2019, the company granted 10,000,000 unlisted options to its Directors pursuant to the employee equity
incentive plan as approved at the company's annual general meeting on 29 November 2019. Theo Psaros and Andrew Gillies
were each granted 3,000,000 options and Scott Waddell was granted 4,000,000 options, for nil consideration. The options
vested if the Metallica Minerals Limited share price traded at more than 2.9 cents for 5 days.
On 27 July 2021, the company allotted 10,000,000 shares for the exercise of employee options held by Directors, and entered
into limited recourse loan agreements with three Directors as outlined in the Extraordinary General Meeting held on 7 July
2021 and Notice of Meeting dated 7 and 8 June 2021. Under Accounting Standard AASB 2 Share-based payment, the
issuance of these shares has been accounted for as an in-substance option award. The in-substance options vested on the
grant date. The shares are subject to escrow until 23 December 2022.
Summary of the options granted on 23 December 2019 and which were exercised on 27 July 2021:
Number of
options
granted
Grant
Date
Expiry
Date
Exercise option at Vested
Price
grant date
%
Fair value
per
Number of
ordinary
shares
issued
3,000,000 23/12/2019
3,000,000 23/12/2019
4,000,000 23/12/2019
23/06/2022
23/06/2022
23/06/2022
$0.029
$0.029
$0.029
$0.004
$0.004
$0.004
100% 3,000,000
100% 3,000,000
100% 4,000,000
Name
T Psaros
A Gillies
S Waddell
Summary of the in-substance share-based option awards (limited recourse borrowings):
Number of
in substance
options
granted
3,000,000
3,000,000
4,000,000
Name
T Psaros
A Gillies
S Waddell
Fair value
per option
Grant date
Expiry date
Exercise price
at grant date
27/07/2021
27/07/2021
27/07/2021
31/12/2022
31/12/2022
31/12/2022
$0.029
$0.029
$0.029
$0.021
$0.021
$0.021
Options granted carried no dividend or voting rights.
Share rights
On 2 August 2021, the company issued 7,160,000 performance rights to Directors and employees based on the terms
detailed at the EGM held on 7 July 2021 and Notice of Meeting dated 7 and 8 June 2021.
The performance rights convert in 3 equal tranches into ordinary shares on achievement of the following performance hurdles
(Hurdles):
Hurdle 1:
The VWAP of the Metallica Minerals Limited (MLM) share price for the month of June 2022 (based on trading
days during that month) is at least 20% higher than the VWAP of the MLM share price for the month of June
2021.
Hurdle 2:
The total JORC resource of silica sand held by the company in relation to its Cape Flattery Silica Sands
Project is at least 50 million tonnes, with at least 25 million tonnes included at the measured and/or Indicated
JORC category.
Hurdle 3:
The company has successfully completed the Pre-Feasibility Study for the Cape Flattery Silica Project and
released the results of this study to the ASX.
As of 30 June 2022, two of the three hurdles had been met and thus 2,386,665 rights have been forfeited
13
Metallica Minerals Limited
Directors' report
30 June 2022
The terms and conditions of each grant of share rights over ordinary shares affecting remuneration of directors and other
key management personnel in this financial year or future reporting years are as follows:
Name
Grant date
T Psaros
T Psaros
M Bojanjac
M Bojanjac
B Sampson
B Sampson
S Waddell
S Waddell
07/07/2021
07/07/2021
07/07/2021
07/07/2021
07/07/2021
07/07/2021
07/07/2021
07/07/2021
Vesting date and
exercisable date Expiry date
19/07/2022
19/07/2022
19/07/2022
19/07/2022
19/07/2022
19/07/2022
19/07/2022
19/07/2022
19/08/2022
19/08/2022
19/08/2022
19/08/2022
19/08/2022
19/08/2022
19/08/2022
19/08/2022
Share rights granted carry no dividend or voting rights.
Fair value Number of Number of
per right at
rights
grant date granted
rights
forfeited
%
forfeited
633,333
$0.036
$0.034 1,266,667
88,333
$0.036
176,667
$0.034
88,333
$0.036
176,667
$0.034
$0.036
533,333
$0.034 1,066,667
633,333
-
88,333
-
88,333
-
533,333
-
100%
-
100%
-
100%
-
100%
-
Additional information
The earnings of the consolidated entity for the five years to 30 June 2022 are summarised below:
2022
$
2021
$
2020
$
2019
$
2018
$
Profit/(loss) after income tax
(2,007,194)
(3,054,991)
(521,340)
(4,391,316)
3,195,557
The factors that are considered to affect Total Shareholders Return ('TSR') are summarised below:
2022
2021
2020
2019
2018
Share price at financial year end (cents)
Basic earnings/(loss) per share (cents per
share)
2.30
0.33
3.50
1.05
1.60
(0.84)
(0.16)
(1.36)
3.70
0.99
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Ordinary shares
T Psaros
B Sampson
S Waddell
A Gillies
Shares
funded by
limited
recourse
loans*
Balance at
the start of
the year
Additions
Disposals/
other**
Balance at
the end of
the year
3,000,000
2,000,000
-
-
4,000,000
2,000,000
2,400,000
3,000,000
6,400,000 10,000,000
1,000,000
264,516
-
350,000
1,614,516
-
-
(6,000,000)
(5,750,000)
(11,750,000)
6,000,000
264,516
-
-
6,264,516
*
**
For further information on the share purchases funded by limited recourse loans, refer to the section below Loans to
key management personnel and their related entities.
Includes the removal from the table of the shareholdings for key management personnel who have resigned during the
period or who are no longer considered to be a key management person.
None of the shares above are held nominally by the directors or any of the other key management personnel.
14
Metallica Minerals Limited
Directors' report
30 June 2022
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out below:
Options over ordinary shares
T Psaros
S Waddell
A Gillies
Balance at
the start of Granted as
the year
remuneration Exercised
Expired/
forfeited/
Other
Balance at
the end of
the year
3,500,000
4,500,000
3,600,000
11,600,000
-
-
-
-
(3,000,000)
(4,000,000)
(3,000,000)
(10,000,000)
448,477
(500,000)
*
(600,000) *
(651,523)
948,477
-
-
948,477
*
The number of options removed from the table for Andrew Gillies represents the number of options he held at the date
of his resignation. The number of options removed from the table for Scott Waddell represents the options he held at
the date he was no longer considered to be a key management person.
The balance at the end of the year includes options that attached to shares issued under a renounceable rights offer.
Limited recourse loan options*
T Psaros
S Waddell
A Gillies
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other**
Balance at
the end of
the year
-
-
-
3,000,000
4,000,000
3,000,000
- 10,000,000
-
-
-
-
-
(4,000,000)
(3,000,000)
3,000,000
-
-
(7,000,000)
3,000,000
*
**
For further information on the limited recourse loan options refer to the section below Loans to key management
personnel and their related entities.
Includes the removal from the table of the option holdings for key management personnel who have resigned during
the period or who are no longer considered to be a key management person.
No other key management personnel held options.
Share rights holding
The number of share rights over ordinary shares in the company held during the financial year by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out below:
Share rights over ordinary shares
T Psaros
M Bojanjac
B Sampson
S Waddell*
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
1,900,000
265,000
265,000
1,600,000
4,030,000
-
-
-
-
-
(633,333)
(88,333)
(88,333)
(1,600,000)
(2,409,999)
1,266,667
176,667
176,667
-
1,620,001
*
The number of rights removed from the table for Scott Waddell represents the rights he held at the date he was no
longer considered to be a key management person.
15
Metallica Minerals Limited
Directors' report
30 June 2022
Loans to key management personnel and their related parties
On 27 July 2021, the company allotted 10,000,000 shares for the exercise of employee options held by Directors at $0.029
per share in terms of the Employee Equity Incentive Plan (refer to note 33). The shares have been funded by limited recourse
loans with three Directors as outlined in the Extraordinary General Meeting held on 7 July 2021 and Notice of Meeting dated
7 and 8 June 2021. Under Accounting Standard AASB 2 Share-based payment, the issuance of these shares has been
accounted for as an in-substance option award. The value of these equity instruments was assessed by Directors based on
an independent valuation (using an option-pricing model) and are recorded in the Share-based payments reserve (note 19).
The shares are subject to escrow until 23 December 2022.
Other transactions with key management personnel and their related parties
There were no other transactions with key management personnel of the group, including their close family members and
entities related to them, during the financial year ended 30 June 2022.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Metallica Minerals Limited under option at the date of this report are as follows:
Grant date
3 August 2011
27 April 2021
27 July 2021**
18 February 2022
Expiry date
No expiry date*
25 March 2024
31 December 2022
25 March 2024
Exercise
price
Number
under option
$0.700
1,000,000
$0.060 130,678,964
$0.029 10,000,000
$0.060 41,608,871
183,287,835
*
**
These options will expire 3 years after the decision to mine at Lucknow or Kokomo is made.
These options represent in-substance options (refer to note 33).
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
company or of any other body corporate.
No options were granted to the directors or any of the five highest remunerated officers of the company since the end of the
financial year.
Shares under share rights
Unissued ordinary shares of Metallica Minerals Limited under performance rights at the date of this report are as follows:
Grant date
7 July 2021*
Expiry date
19 August 2022
Exercise
price
Number
under rights
$0.000
4,773,335
*
On 7 July 2021, the company's shareholders approved the issue of 4,030,000 Performance Rights to the following
Directors: Scott Waddell, Theo Psaros, Mark Bojanjac, and Brad Sampson, and 3,130,000 to employees.
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in
any share issue of the company or of any other body corporate.
16
Moore Australia Audit
Level 12, 10 Eagle Street
Brisbane QLD 4000
GPO Box 475
Brisbane QLD 4001
T +61 7 3340 3800
F +61 7 3340 3700
www.moore-australia.com.au
Auditor's Independence Declaration under Section 307C of the
Corporations Act 2001 to the Directors of Metallica Minerals Limited
As lead auditor for the audit of Metallica Minerals Limited for the year ended 30 June 2022, I declare that, to the best of my
knowledge and belief, there have been:
(i) no contraventions of the independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Metallica Minerals Limited and the entities it controlled during the year.
Murray McDonald
Director - Audit and Assurance
Moore Australia Audit (QLD/NNSW)
Chartered Accountants
Brisbane
Moore Australia Audit (QLD/NNSW) – ABN 33 050 150 130.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
18
Metallica Minerals Limited
Contents
30 June 2022
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Metallica Minerals Limited
Shareholder information
General information
20
21
22
23
24
53
54
57
The financial statements cover Metallica Minerals Limited as a consolidated entity consisting of Metallica Minerals Limited
and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars,
which is Metallica Minerals Limited's functional and presentation currency.
Metallica Minerals Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Level 1, North Tower
Terrace Office Park
527 Gregory Terrace
Bowen Hills
QLD 4006
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 24 August 2022. The
directors have the power to amend and reissue the financial statements.
19
Metallica Minerals Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Revenue
Other income
Interest revenue
Expenses
Airfares and conferences
Extraordinary General Meeting costs
Employee benefits expense
Exploration costs
Depreciation and amortisation expense
Listing fees and share register expenses
Legal fees
Professional fees
Net loss on disposal of subsidiary and joint operation
Rental expenses
Other expenses
Finance costs
Total expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year attributable to the owners of
Metallica Minerals Limited
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of
Metallica Minerals Limited
Consolidated
Note
2022
$
2021
$
4
5
6
6
31
6
7
4,182
49,221
2,500
7,770
220,342
8,034
(37,521)
(14,667)
(857,204)
(306,391)
(85,372)
(87,732)
(35,911)
(148,033)
-
(41,413)
(388,886)
(18,516)
(2,021,646)
(41,254)
(6,000)
(372,460)
(279,878)
(18,421)
(96,599)
(50,545)
(113,436)
(2,049,754)
(89,936)
(214,305)
-
(3,332,588)
(2,007,194)
(3,054,991)
-
-
(2,007,194)
(3,054,991)
-
-
(2,007,194)
(3,054,991)
Cents
Cents
Basic earnings per share
Diluted earnings per share
32
32
(0.33)
(0.33)
(0.84)
(0.84)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
20
Metallica Minerals Limited
Statement of financial position
As at 30 June 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Plant and equipment
Right-of-use assets
Exploration and evaluation
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Employee benefits
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2022
$
2021
$
8
9
5,259,695
59,525
5,319,220
7,531,567
45,923
7,577,490
11
12
13
10
100,105
476,467
5,160,459
73,498
5,810,529
10,788
-
1,183,081
48,443
1,242,312
11,129,749
8,819,802
14
15
16
15
17
838,600
63,163
39,713
941,476
425,282
3,842
429,124
382,022
-
11,447
393,469
-
-
-
1,370,600
393,469
9,759,149
8,426,333
18
19
53,865,383 50,896,470
219,747
(42,689,884)
590,844
(44,697,078)
9,759,149
8,426,333
The above statement of financial position should be read in conjunction with the accompanying notes
21
Metallica Minerals Limited
Statement of changes in equity
For the year ended 30 June 2022
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2020
36,436,227
8,158,563
(39,634,893)
4,959,897
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
-
-
(3,054,991)
-
(3,054,991)
-
(3,054,991)
(3,054,991)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 18)
Share-based payments (note 33)
Transfer from share-based payments reserve to issued capital
6,310,017
-
8,150,226
-
211,410
(8,150,226)
-
-
-
6,310,017
211,410
-
Balance at 30 June 2021
50,896,470
219,747
(42,689,884)
8,426,333
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2021
50,896,470
219,747
(42,689,884)
8,426,333
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 18)
Share-based payments (note 33)
-
-
-
-
-
-
(2,007,194)
-
(2,007,194)
-
(2,007,194)
(2,007,194)
2,968,913
-
-
371,097
-
-
2,968,913
371,097
Balance at 30 June 2022
53,865,383
590,844
(44,697,078)
9,759,149
The above statement of changes in equity should be read in conjunction with the accompanying notes
22
Metallica Minerals Limited
Statement of cash flows
For the year ended 30 June 2022
Consolidated
Note
2022
$
2021
$
Cash flows from operating activities
Receipts from customers, government grants and other (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other finance costs paid
8,976
(1,073,871)
7,770
(18,516)
256,644
(1,198,239)
8,034
-
Net cash used in operating activities
34
(1,075,641)
(933,561)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation assets
Payments for security deposits
Sale proceeds - HMS plant and tenements
Proceeds from disposal of subsidiary and joint operation
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Repayment of lease liabilities
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
11
13
31
(110,302)
(3,977,378)
(25,055)
-
-
(5,665)
(1,183,081)
(15,805)
330,000
41,737
(4,112,735)
(832,814)
18
3,044,000
(75,087)
(52,409)
7,000,661
(500,254)
-
2,916,504
6,500,407
(2,271,872)
7,531,567
4,734,032
2,797,535
Cash and cash equivalents at the end of the financial year
8
5,259,695
7,531,567
The above statement of cash flows should be read in conjunction with the accompanying notes
23
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective
notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. None of the new
standards and amendments to standards affected any of the amounts recognised in the current period or any prior period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Going concern
For the year ended 30 June 2022, the consolidated entity incurred a loss of $2,007,194 after income tax (2021: $3,054,991)
and net cash outflows from operating activities of $1,075,641 (2021: $933,561). The net loss before income tax for the year
ended 30 June 2021 includes a net loss of $2,049,754 on disposal of the subsidiary companies Oresome Australia Pty Ltd,
Oresome Bauxite Pty Ltd and their respective 50% interest holdings in the Urquhart Bauxite joint venture (JV).
The Coronavirus (COVID-19) pandemic is restricting access to some remote communities. However, there does not currently
appear to be any significant impact upon solvency or going concern of the consolidated entity as at the reporting date or
subsequent to the date of this report as a result of the pandemic.
The Directors have concluded that the going concern basis of preparation of the financial statements is appropriate and any
uncertainty regarding going concern is mitigated by the following:
●
At 30 June 2022 the consolidated entity had net current assets of $4,377,744 (30 June 2021: $7,184,021) and total net
assets of $9,759,149 (30 June 2021: $8,426,333). Cash and cash equivalents at 30 June 2022 amounted to $5,259,695
(30 June 2021: $7,531,567).
If additional cash is required outside of current cash holdings, the consolidated entity is expected to be in a position to
complete capital raising with no foreseeable challenges as they have a proven history of successfully raising funds.
During the year ended 30 June 2022, the company raised $2,968,913 from the issue of ordinary shares in the company
(net of share issue costs) (note 18).
●
Based on the above, the Directors are of the opinion that at the date of signature of the financial report there are reasonable
and supportable grounds to believe that the consolidated entity will be able to meet its liabilities from its assets in the ordinary
course of business, for a period of not less than 12 months from the date of this financial report and has accordingly prepared
the financial report on a going concern basis.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 28.
24
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 1. Significant accounting policies (continued)
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Metallica Minerals Limited
('company' or 'parent entity') as at 30 June 2022 and the results of all subsidiaries for the year then ended. Metallica Minerals
Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Joint arrangements
Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure
of the joint arrangement. Metallica Minerals Limited has only one joint operation at the reporting date and no joint ventures.
Joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the arrangement. Metallica Minerals Limited has recognised its share of
the jointly held assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred
assets, liabilities, revenues and expenses of joint operations. These have been incorporated in the financial statements under
the appropriate classifications. Details of the joint operation are set out in and note 31.
25
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 1. Significant accounting policies (continued)
Joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the joint arrangement. Interests in joint ventures are accounted for using the equity method, after initially being
recognised at cost in the consolidated statement of financial position. Under the equity method, the share of the profits or
losses of the joint venture is recognised in profit or loss and the share of the movements in equity is recognised in other
comprehensive income. Investments in joint ventures are carried in the statement of financial position at cost plus post-
acquisition changes in the consolidated entity's share of net assets of the joint venture. Goodwill relating to the joint venture
is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment. Income
earned from joint venture entities reduces the carrying amount of the investment.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at
either amortised cost or fair value depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business
model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial
asset represent contractual cash flows that are solely payments of principal and interest.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are measured at
amortised cost. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of
each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition,
based on reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
Restoration, rehabilitation and environmental expenditure
Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the
costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building
structure, waste removal, and rehabilitation of the site in accordance with clauses of mining permits. Such costs have been
determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.
Estimates of future costs are reassessed at least annually. Changes in estimates relating to areas of interest in the
exploration and evaluation phase are dealt with retrospectively, with any amounts that would have been written off or provided
against under the accounting policy for exploration and evaluation immediately written off.
Restoration from exploration drilling is carried out at the time of drilling and accordingly no provision is required.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount.
26
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 1. Significant accounting policies (continued)
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Comparatives
Where required by the Australian Accounting Standards comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2022. The consolidated
entity has carried out a preliminary assessment of the impact of these new and amended Accounting Standards and
Interpretations, and determined that they are unlikely to have a material impact on the consolidated entity's financial
statements in the period of initial application.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments will have no impact on the carrying amounts of
assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Impairment of property, plant and equipment
The consolidated entity assesses impairment of property, plant and equipment at each reporting date by evaluating
conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger
exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use
calculations, which incorporate a number of key estimates and assumptions.
Significant judgements and assumptions were required in making an estimate of the fair value less costs of disposal of the
capital works in progress associated with the Oresome joint operation The estimated fair value less costs of disposal was
determined based on enquiries of independent parties.
27
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence commercial
production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources.
Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related
to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only
capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest.
Factors that could impact the future commercial production at the mine include the level of reserves and resources, future
technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the
extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which
this determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying
asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included
in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise
an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors
considered may include the importance of the asset to the consolidated entity's operations; comparison of terms and
conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements;
and the costs and disruption to replace the asset. The consolidated entity reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount
future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is
based on what the consolidated entity estimates it would have to pay a third party to borrow the funds necessary to obtain
an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
Note 3. Operating segments
Identification of reportable operating segments
The consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by
the parent entity’s Board of Directors (chief operating decision makers) in assessing performance and determining the
allocation of resources. The consolidated entity is managed primarily on a geographic basis that is the location of the
respective areas of interest (tenements) in Australia. Operating segments are determined on the basis of financial information
reported to the Board which is at the consolidated entity level.
The consolidated entity does not have any products/services it derives revenue from.
Management currently identifies the consolidated entity as having only one operating segment, being exploration and
development of mine projects in Australia. All significant operating decisions are based upon analysis of the consolidated
entity as one segment. The financial results from the segment are equivalent to the financial statements of the consolidated
entity as a whole.
Accounting policy for operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
28
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 4. Revenue
Rent
Accounting policy for revenue recognition
The consolidated entity recognises revenue as follows:
Consolidated
2022
$
2021
$
4,182
49,221
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Note 5. Other income
Government grants
Other
Other income
Consolidated
2022
$
2021
$
-
2,500
142,544
77,798
2,500
220,342
Accounting policy for government grants
Grants from the government are recognised at their fair value where there is reasonable assurance that the grant will be
received and the consolidated entity will comply with all the attached conditions. Government grants relating to costs are
deferred and recognised in profit or loss over the period necessary to match them with the costs they are intended to
compensate. Government grants relating to the purchase or development of assets, including exploration and evaluation
activities, are deducted from the carrying value of the asset.
The Government grants noted above relate to amounts received in respect of JobKeeper and Cash Flow Boost.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
29
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 6. Expenses
Loss before income tax includes the following specific expenses:
Aggregate employee benefits expense
Defined contribution superannuation expense
Equity-settled share-based payments
Other employee benefits expenses
Less
Employee costs capitalised to exploration
Employee benefits expense
Depreciation
Plant and equipment
Motor vehicles
Buildings right-of-use assets
Total depreciation
Finance costs
Interest and finance charges paid/payable on lease liabilities
Leases
Short-term lease payments
Note 7. Income tax
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 25% (2021: 26%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-assessable income
Other non-deductible items
Current year tax losses not recognised
Current year temporary differences not recognised
Income tax expense
30
Consolidated
2022
$
2021
$
68,305
371,097
823,771
19,591
14,420
514,391
1,263,173
548,402
(405,969)
(175,942)
857,204
372,460
7,263
13,722
64,387
18,421
-
-
85,372
18,421
18,516
-
30,356
80,166
Consolidated
2022
$
2021
$
(2,007,194)
(3,054,991)
(501,799)
(794,298)
-
-
(13,505)
1,844
(501,799)
410,049
91,750
(805,959)
673,885
132,074
-
-
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 7. Income tax (continued)
Deferred tax assets not recognised
Deductible temporary differences and unused tax losses for which no deferred tax assets
have been recognised are attributable to the following:
Unused tax losses
Other deductible temporary differences
Deductible temporary differences offset against taxable temporary differences
Total deferred tax assets not recognised
Consolidated
2022
$
2021
$
8,427,773
211,693
(1,409,232)
6,844,356
179,848
(295,770)
7,230,234
6,728,434
The above potential tax benefit for tax losses and deductible temporary differences has not been recognised in the statement
of financial position as the recovery of this benefit is uncertain. The tax losses can only be utilised in the future if the continuity
of ownership test is passed, or failing that, the same business test is passed.
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
●
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Metallica Minerals Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group
continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the group
allocation approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a
contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
31
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 8. Cash and cash equivalents
Current assets
Cash on hand
Cash at bank
Cash on deposit
Consolidated
2022
$
2021
$
-
1,933,300
3,326,395
50
3,508,758
4,022,759
5,259,695
7,531,567
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Note 9. Trade and other receivables
Current assets
Trade receivables
Loans to other parties
Less: Allowance for expected credit losses*
Other receivables
GST receivable
Consolidated
2022
$
2021
$
740
3,034
-
-
-
186,017
(186,017)
-
33
58,752
404
42,485
59,525
45,923
* The loan was fully written off in the current year.
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Note 10. Other non-current assets
Non-current assets
Security deposits - tenements and rental properties
32
Consolidated
2022
$
2021
$
73,498
48,443
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 11. Plant and equipment
Non-current assets
Plant and equipment - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
Consolidated
2022
$
2021
$
75,317
(60,386)
14,931
98,896
(13,722)
85,174
63,911
(53,123)
10,788
-
-
-
100,105
10,788
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2020
Additions
Disposal of subsidiary and joint operation
Adjustment
Depreciation expense
Balance at 30 June 2021
Additions
Depreciation expense
Balance at 30 June 2022
Plant and
equipment
$
Motor
vehicles
$
23,364
5,665
(2,705)
2,885
(18,421)
10,788
11,406
(7,263)
-
-
-
-
-
-
98,896
(13,722)
Total
$
23,364
5,665
(2,705)
2,885
(18,421)
10,788
110,302
(20,985)
14,931
85,174
100,105
Accounting policy for property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their
expected useful lives as follows:
Plant and equipment
Motor vehicles
33% per annum
33% per annum
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
33
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 12. Right-of-use assets
Non-current assets
Land and buildings - right-of-use
Less: Accumulated depreciation
Consolidated
2022
$
2021
$
540,854
(64,387)
476,467
-
-
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2020
Balance at 30 June 2021
Additions
Depreciation expense
Balance at 30 June 2022
Land and
buildings
$
-
-
540,854
(64,387)
476,467
On 23 July 2021, the company entered into a 4-year lease for office premises.
Accounting policy for right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities. The company has an option to extend the lease for 3 years, which the
Directors believe will be probable. As such, the depreciation has been calculated over a period of 7 years.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
Note 13. Exploration and evaluation
Non-current assets
Exploration and evaluation expenditure
Consolidated
2022
$
2021
$
5,160,459
1,183,081
34
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 13. Exploration and evaluation (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2020
Additions
Disposal of subsidiary and joint operation
Balance at 30 June 2021
Additions*
Balance at 30 June 2022
Exploration &
evaluation
$
2,090,729
1,183,081
(2,090,729)
1,183,081
3,977,378
5,160,459
*
Includes $273,167 of E&E expenditure on EPM 17968, Clermont project. The Clermont project is 25% owned by the
consolidated group. Expenditure at EPM 17968 was recorded as E&E from the point that the farm-in criteria were met
(see note 25). The earn-in arrangement entered into in respect of the Clermont Project has been accounted for in
accordance with the Exploration and evaluation assets accounting policy below.
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent upon successful
development and commercial exploitation or sale of the respective areas of interest.
Accounting policy for exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried
forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through
the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in
an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of
economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred
thereon is written off in the year in which the decision is made.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount.
Note 14. Trade and other payables
Current liabilities
Trade payables
Other payables
Consolidated
2022
$
2021
$
817,340
21,260
375,401
6,621
838,600
382,022
Refer to note 21 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
35
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 15. Lease liabilities
Current liabilities
Lease liability - land and buildings
Non-current liabilities
Lease liability - land and buildings
Consolidated
2022
$
2021
$
63,163
425,282
488,445
-
-
-
Refer to note 21 for further information on financial instruments.
On 23 July 2021, the company entered into a 4-year lease for office premises. The company has an option to extend the
lease for 3 years.
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on
an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
At commencement date and each subsequent reporting date, the company assesses where it is reasonably certain that the
extension options will be exercised. Only options where the entity is reasonably certain that the extension options will be
exercised are included in the calculation of the lease liability and right of use asset.
Note 16. Employee benefits
Current liabilities
Annual leave
Long service leave
Consolidated
2022
$
2021
$
30,823
8,890
6,144
5,303
39,713
11,447
Accounting policy for employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
36
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 17. Provisions
Non-current liabilities
Lease make good
Consolidated
2022
$
2021
$
3,842
-
Accounting policy for provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Note 18. Issued capital
Consolidated
2022
Shares
2021
Shares
2022
$
2021
$
Ordinary shares - fully paid
665,926,366 557,732,777 53,865,383 50,896,470
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Shares for services rendered
Rights issue (a)
Follow-on placement (a)
Transfer from share-based payments reserve (note
19)
Share issue costs
Balance
Share option exercised - funded by limited recourse
loans (b)
Shares for services rendered
Placement (c)
Share issue costs
1 July 2020
25 November 2020
27 April 2021
27 April 2021
324,047,408
330,000
162,188,704
71,166,665
36,436,227
6,600
4,865,661
2,135,000
$0.020
$0.030
$0.030
8,150,226
(697,244)
30 June 2021
557,732,777
50,896,470
27 July 2021
22 October 2021
18 February 2022
10,000,000
290,363
97,903,226
$0.031
$0.031
-
9,000
3,035,000
(75,087)
Balance
30 June 2022
665,926,366
53,865,383
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
(a) Rights issue and follow-on placement
On 25 March 2021, the company issued a Prospectus (Rights Issue Prospectus) for a renounceable pro rata entitlement
issue (Offer) fully underwritten by Mahe Capital Pty Ltd (Mahe) for the issue of up to 162,188,704 Shares and 1 free attaching
Option for every 2 Shares taken up under the Offer, to raise up to $4,865,661.
37
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 18. Issued capital (continued)
Pursuant to the company's underwriting agreement with Mahe for the Offer, the company also agreed to issue 9,731,322
Options to Mahe, based on the amount of funds sought under the Offer.
On 23 April 2021, the company issued a Supplementary Prospectus pursuant to which it advised that, as a result of excess
demand under the Shortfall Offer (as defined in the Rights Issue Prospectus), it had agreed to issue an additional 71,166,665
New Shares and 35,583,334 attaching New Options under the Offer to raise an additional $2,135,000 (Follow-on Placement).
As a result, the number of Options to which Mahe became entitled as underwriter of the Offer increased to 14,001,322
Options.
The total amount raised by the rights issue and follow-on placement was $7,000,661.
(b) Options
30 June 2021
The company issued a total of 116,677,686 free attaching options (New Options) in connection with the Rights Issue
Prospectus and Follow-on Placement on 27 April 2021 on the basis of 1 New Option for every 2 shares taken up. The options
are listed on the Australian Securities Exchange and are exercisable at $0.06 each at any time prior to 5.00pm (AEST) on
25 March 2024. There are no participation rights or entitlements inherent in the options and an option holder will not be
entitled to participate in new issues of capital offered to the company's shareholders during the term of the option.
A further 14,001,322 options were issued to the underwriter (refer note 33) which have the same terms as all other New
Options.
30 June 2022
On 27 July 2021, the company allotted 10,000,000 shares for the exercise of employee options held by Directors, and entered
into limited recourse loan agreements with three Directors as outlined in the EGM held on 7 July 2021 and Notice of Meeting
dated 7 and 8 June 2021. Under Accounting Standard AASB 2 Share-based payment, the issuance of these shares has
been accounted for as an in-substance option award (refer to note 33). The shares are subject to escrow until 23 December
2022.
(c) Placement
On 18 February 2022, the company issued 97,903,226 ordinary shares pursuant to a private placement with institutional and
sophisticated investors at an issue price of $0.031 per share. The company issued a total of 41,608,871 free attaching options
in connection with the placement on the basis of 1 option for every 2 shares taken up. The options are listed on the Australian
Securities Exchange (ASX) and are exercisable at $0.06 each at any time prior to 5.00pm (AEST) on 25 March 2024. There
are no participation rights or entitlements inherent in the options and an option holder will not be entitled to participate in new
issues of capital offered to the company's shareholders during the term of the option. The issue of the options exceeded the
company's placement limit under the ASX Listing Rules 7.1 and 7.1A. The issue of 7,342,742 options was approved by the
company's shareholders at an Extraordinary General Meeting held on 7 April 2022, and the issue of 34,266,129 options and
the 97,903,226 shares was ratified at the same meeting.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity's objectives when managing capital are to safeguard its ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure
to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
The capital structure of the consolidated entity consists of equity attributable to equity holders of the parent entity comprising
of issued capital, reserves and accumulated losses as disclosed in the statement of changes in equity. In common with many
other exploration companies, the parent raises finance for the consolidated entity's exploration and appraisal activities in
discrete tranches.
Management effectively manages the consolidated entity's capital by assessing the consolidated entity's financial risks and
adjusting its capital structure in response to changes in these risks and in the market.
38
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 18. Issued capital (continued)
There are no externally imposed capital requirements.
The capital risk management policy remains unchanged from the 2021 Annual Report.
The consolidated entity monitors capital on the basis of its working capital position (i.e. liquidity risk). The net working capital
of the consolidated entity at 30 June 2022 was $4,377,744 (2021: $7,184,021).
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Note 19. Reserves
Share-based payments reserve
Consolidated
2022
$
2021
$
590,844
219,747
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services. When the equity benefits are exercised or lapsed
the value is transferred to issued capital.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Share based payments
Transfer to issued capital (note 18)
Balance at 30 June 2021
Share based payments
Balance at 30 June 2022
Note 20. Dividends
Share-based
payments
reserve
$
8,158,563
211,410
(8,150,226)
219,747
371,097
590,844
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 21. Financial instruments
Financial risk management objectives
Risk management is carried out under policies set by the board of directors. The board provides principles for overall risk
management, as well as policies covering specific areas.
39
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 21. Financial instruments (continued)
The board monitors and manages the financial risk relating to the operations of the consolidated entity. The consolidated
entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest
rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
consolidated entity. The consolidated entity does not enter into or trade financial instruments, including derivative financial
instruments, for speculative purposes.
Market risk
Foreign currency risk
The consolidated entity does not currently have any significant exposure to foreign currency risk.
Price risk
The consolidated entity does not currently have any significant exposure to price risk.
Interest rate risk
The consolidated entity’s main interest rate risk arises from cash and cash equivalents.
Consolidated
Cash at bank
Cash on deposit
2022
2021
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
-
1.18%
1,933,300
3,326,395
-
0.22%
3,508,758
4,022,759
Net exposure to cash flow interest rate risk
5,259,695
7,531,517
At 30 June 2022, if interest rates had increased by 175 basis points (bps) from the year end rates with all other variables
held constant, post-tax loss for the year would have been $92,045 higher (2021 changes of 25 bps: $18,829 lower/higher),
mainly as a result of higher/lower interest income from cash and cash equivalents and held to maturity investments.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate to
mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to
the financial statements. The consolidated entity does not hold any collateral.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and
forecast cash flows and matching the maturity profiles of financial assets and liabilities.
40
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 21. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2022
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing
Lease liability
Total non-derivatives
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
817,340
21,260
-
-
-
-
-
-
817,340
21,260
82,848
921,448
174,496
174,496
285,322
285,322
16,493
16,493
559,159
1,397,759
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
375,401
6,621
382,022
-
-
-
-
-
-
-
-
-
375,401
6,621
382,022
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Due to their short-term nature the carrying amounts of financial instruments reflect their fair value.
Note 22. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity
is set out below:
Consolidated
2022
$
2021
$
359,140
23,111
236,024
340,939
4,537
14,420
618,275
359,896
Short-term employee benefits
Post-employment benefits
Share-based payments
41
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 22. Key management personnel disclosures (continued)
Loans to Key Management Personnel
On 27 July 2021, the company allotted 10,000,000 shares for the exercise of employee options held by Directors at $0.029
per share in terms of the Employee Equity Incentive Plan (refer to note 33). The shares have been funded by limited recourse
loans with three Directors as outlined in the Extraordinary General Meeting held on 7 July 2021 and Notice of Meeting dated
7 and 8 June 2021. Under Accounting Standard AASB 2 Share-based payment, the issuance of these shares has been
accounted for as an in-substance option award. The fair value of these equity instruments was assessed by Directors based
on an independent valuation (using an option-pricing model) and are recorded in the Share-based payments reserve (note
19). The shares are subject to escrow until 23 December 2022.
Note 23. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Moore Australia Audit (QLD/NNSW),
the auditor of the company:
Audit services - Moore Australia Audit (QLD/NNSW)
Audit or review of the financial statements
Note 24. Contingent assets
Consolidated
2022
$
2021
$
42,840
40,000
In respect of the disposal of the SCONI Project in September 2017, additional consideration of $2,500,000 in cash or shares
in Australian Mines Limited (the Production Payment), will be payable to the company on commencement of Australian Mines
Limited achieving commercial production on the project. This additional consideration has not been recognised in the 30
June 2022 financial statements, as the receipt of the additional consideration is not virtually certain. The commencement of
commercial production from the SCONI Project requires favourable commodity prices and markets, availability of significant
funding and various government approvals.
Note 25. Contingent liabilities
During the year the company entered into a farm-out agreement with Diatreme Resources Limited (ASX:DRX) for the
Clermont Copper/Gold Project (the Project). Under the terms of the Memorandum of Understanding (MOU), Metallica
Minerals Limited has the sole and exclusive right to earn:
●
a 25% interest in the Project by sole funding exploration expenditure of $300,000 by 30 April 2022 (Minimum
Commitment Date);
an additional 26% interest in the Project by sole funding exploration expenditure of an additional $700,000 by no later
than 12 months after the Minimum Commitment Date (Further Commitment Date), (the Earn-in Requirement); and
an additional 24% interest by sole funding the first $1 million of JV expenditure.
●
●
On 29 April 2022, the company announced that it had met the expenditure commitment undertaken in accordance with the
MOU to earn 25% of the Project. In addition, the company has made the decision to move to the second stage of the earn-
in phase of the agreement and increase the company's share to 51% of the Project through a further $700,000 spend on
exploration activity at the Clermont Project prior to 27 April 2023.
42
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 26. Commitments
Commitments for minimum expenditure on exploration permits
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Commitments for environmental authority annual fee
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Tenement rentals
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2022
$
2021
$
41,770
79,858
331,509
725,332
121,628
1,056,841
1,099
3,070
3,505
8,182
4,169
11,687
11,740
25,357
4,055
12,010
37,097
16,065
Commitments for minimum expenditure on exploration permits
The consolidated entity has certain commitments to meet minimum annual expenditure requirements on the mineral
exploration assets it has an interest in that were granted or renewed prior to May 2020. Any shortfalls are carried forward to
subsequent years.
Amendments to the Mineral Resources Act 1989 (MRA) were introduced under the Natural Resources and Other Legislation
Amendment Act 2019 (NROLA) and commenced on 25 May 2020. Under NROLA, expenditure commitments are no longer
a condition of grant or renewal of an exploration permit and have been replaced by a work program as a condition of grant
or renewal.
Operating lease commitments
The lease of offices as at 30 June 2021 was on a 'month to month' basis with three months' notice required to terminate the
lease. Notice to leave was provided on 8 July 2021.
Note 27. Related party transactions
Parent entity
Metallica Minerals Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures relating to key management personnel are set out in note 22 and the remuneration report included in the
directors' report.
43
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 27. Related party transactions (continued)
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
2022
$
2021
$
Other transactions:
Subscription for new ordinary shares by key management personnel as a result of the rights
issue
-
96,000
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Note 28. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Other comprehensive income for the year, net of tax
Total comprehensive income
Parent
2022
$
2021
$
(3,822,807)
(2,100,954)
-
-
(3,822,807)
(2,100,954)
44
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 28. Parent entity information (continued)
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2022
$
2021
$
5,068,196
7,540,777
5,417,752
1,741,535
10,485,948
9,282,312
6,323,049
5,065,738
429,124
-
6,752,173
5,065,738
3,733,775
4,216,574
53,865,383 50,896,470
219,747
(46,899,643)
590,844
(50,722,452)
3,733,775
4,216,574
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2022 and 30 June 2021.
Contingent liabilities
The parent entity believes it has no contingent liabilities as at 30 June 2022 and 30 June 2021.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 and 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except
for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Note 29. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1:
Name
NORNICO Pty Limited
Greenvale Operations Pty Limited*
Lucky Break Operations Pty Limited
PGE Pty Limited**
Cape Flattery Pty Limited
Phoenix Lime Pty Limited
Touchstone Resources Pty Limited
Principal place of business /
Country of incorporation
Ownership interest
2021
2022
%
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
45
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 29. Interests in subsidiaries (continued)
*
**
Greenvale Operations Pty Limited is a wholly owned subsidiary of NORNICO Pty Limited.
PGE Pty Limited is a wholly owned subsidiary of Lucky Break Operations Pty Limited.
Unless otherwise stated, the subsidiaries have share capital consisting solely of ordinary shares that are held directly by the
consolidated entity, and the proportion of ownership interests is equal to the proportion of voting rights held by the
consolidated entity.
Significant restrictions
There are no significant restrictions on the ability of the consolidated entity to access or use the assets and settle the liabilities
of the consolidated entity.
Note 30. Events after the reporting period
On 11 July 2022, the company allotted 7,342,742 MLMOB options to participants of the February 2022 placement.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
Note 31. Disposal of subsidiary and joint operation
30 June 2021
On 3 November 2020, the consolidated entity disposed of its wholly-owned subsidiaries Oresome Australia Pty Ltd, Oresome
Bauxite Pty Ltd and their respective 50% interest holdings in the Urquhart Bauxite joint venture (JV). The sale proceeds
comprised the following cash payments: $50,000 on the announcement of the sale; $50,000 within 30 days of the signing of
the Share Sale Agreement. The second payment of $50,000 has not been made after many attempts by the company and
is unlikely to be paid at the present time and is considered doubtful. The doubtful debt was provided for in the 2nd half of the
2021 financial year.
Consolidated
2021
$
50,000
Consolidated
2021
8,263
21,855
2,090,729
2,705
(9,303)
(14,495)
2,099,754
Consideration received
Cash received
Book values of net assets over which control was lost
Cash and cash equivalents
Security deposits
Exploration and evaluation assets
Property, plant and equipment
Other payables
Employee provisions
Net assets derecognised
46
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 31. Disposal of subsidiary and joint operation (continued)
(Gain)/loss on disposal of subsidiary and joint operation
Consideration received/receivable
Impairment of consideration receivable
Net assets disposed of
Net loss on disposal of subsidiary and joint operation
Net cash inflow/(outflow) arising on disposal
Cash consideration received
Cash and cash equivalents disposed of
Note 32. Earnings per share
Consolidated
2021
$
(100,000)
50,000
2,099,754
2,049,754
Consolidated
2021
50,000
(8,263)
41,737
Consolidated
2022
$
2021
$
Loss after income tax attributable to the owners of Metallica Minerals Limited
(2,007,194)
(3,054,991)
Weighted average number of ordinary shares used in calculating basic earnings per share
602,895,244 365,800,939
Weighted average number of ordinary shares used in calculating diluted earnings per share 602,895,244 365,800,939
Number
Number
Basic earnings per share
Diluted earnings per share
Cents
Cents
(0.33)
(0.33)
(0.84)
(0.84)
Share options are considered to be potential ordinary shares but were anti-dilutive in nature for the 30 June 2022 financial
year and were not included in the calculation of diluted earnings per share. These options could potentially dilute basic
earnings per share in the future.
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Metallica Minerals Limited, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
47
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 33. Share-based payments
(a) Employee Equity Incentive Plan (EEIP)
At an Extraordinary General Meeting (EGM) held on 7 July 2021, the company's shareholders approved the following:
(1) A new Employee Equity Incentive Plan (EEIP).
(2) The issue of a total of 4,030,000 Performance Rights to the following Directors: Scott Waddell, Theo Psaros, Mark
Bojanjac, and Brad Sampson.
(3) Cashless loans to the following Directors: Scott Waddell, Theo Psaros and Andrew Gillies, for the exercise of employee
options held by them.
The EEIP is open to certain contractors and employees (including Directors) of the company who are invited by the Board to
participate in the EEIP (Participants). The Board may invite Participants to apply for shares (including in these terms and
conditions, a right to the issue of a share), performance rights and/or options under the EEIP in its absolute discretion.
The vesting of a performance right will be conditional on the satisfaction of any conditions and performance hurdles attaching
to the performance right. Performance hurdles will be determined by the Board in its discretion and specified in the
Participant's invitation letter.
The vesting of an option will be conditional on the satisfaction of any conditions attaching to the option. Conditions will be
determined by the Board in its discretion and specified in the Participant's invitation letter.
Each performance right will entitle a Participant to one share upon vesting. Each option will entitle a Participant upon vesting
to subscribe for one share at the exercise price specified by the Board in the Participant’s invitation letter.
On 27 July 2021, the company allotted 10,000,000 shares for the exercise of employee options held by three Directors, and
entered into limited recourse loan agreements with the three Directors as outlined in the Extraordinary General Meeting held
on 7 July 2021 and Notice of Meeting dated 7 and 8 June 2021. Under Accounting Standard AASB 2 Share-based payment,
the issuance of these shares has been accounted for as an in-substance option award. The fair value of these equity
instruments was assessed by Directors based on an independent valuation (using an option-pricing model) and are recorded
in the Share-based payments reserve (note 19). The fair value of the equity instruments granted was estimated at the date
of grant using the Black Scholes model taking into account the terms and conditions upon which the shares were granted.
The value brought to account as a share-based payment expense in the year ended 30 June 2022 was $210,000. The in-
substance options vested on the grant date. In the company's financial report for the half-year ended 31 December 2021,
the issuance of these shares was not accounted for as a share-based payment. At 31 December 2021, the company
recognised a loan receivable of $290,000 and a credit to issued capital for the same amount. These amounts have
subsequently been reversed and replaced by a share-based payment expense and a credit to the share-based payments
reserve.
On 2 August 2021, the company issued 7,160,000 performance rights to Directors and employees based on the terms
detailed at the EGM held on 7 July 2021 and Notice of Meeting dated 7 and 8 June 2021.
The performance rights convert in 3 equal tranches into ordinary shares on achievement of the following performance hurdles
(Hurdles):
Hurdle 1:
The VWAP of the Metallica Minerals Limited (MLM) share price for the month of June 2022 (based on trading
days during that month) is at least 20% higher than the VWAP of the MLM share price for the month of June
2021.
Hurdle 2:
The total JORC resource of silica sand held by the company in relation to its Cape Flattery Silica Sands
Project is at least 50 million tonnes, with at least 25 million tonnes included at the measured and/or Indicated
JORC category.
Hurdle 3:
The company has successfully completed the Pre-Feasibility Study for the Cape Flattery Silica Project and
released the results of this study to the ASX.
48
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 33. Share-based payments (continued)
(b) Incentive Plan
At the Annual General Meeting held on 29 November 2016, the company's shareholders approved the issue of share rights
to key employees under the company's incentive plan approved the Board of Directors on 24 October 2016. The purpose of
the incentive plan is to:
(a) assist in the reward, retention and motivation of participants;
(b) align the interests of participants with the interests of the company's shareholders;
(c) promote the long-term success of the company and provide greater incentive for participants to focus on the company's
longer term goals;
(d) link the reward of participants to the performance of the company and the creation of shareholder value; and
(e) provide participants with the opportunity to share in any future growth in value of the company.
Under the plan eligible participants may be granted share rights for nil consideration (unless otherwise provided under the
relevant offer), which vest if certain vesting conditions are met. Upon vesting, subject to any exercise conditions, each share
right entitles the participant to one share in the company.
On 23 December 2019, the company granted 10,000,000 unlisted options to its Directors pursuant to the employee equity
incentive plan as approved at the company's annual general meeting on 29 November 2019. Theo Psaros and Andrew Gillies
were each granted 3,000,000 options and Scott Waddell was granted 4,000,000 options, for nil consideration. The options
vested if the Metallica Minerals Limited share price traded at more than 2.9 cents for 5 days. The options were exercisable
at 2.9 cents and expired on 23 June 2022. Any shares issued on exercise of the options are escrowed until 23 December
2022. The value of these options at the grant date was $37,000. On 27 July 2021, the company allotted 10,000,000 shares
for the exercise of the options and entered into limited recourse loan agreements with the three Directors as outlined in the
Extraordinary General Meeting held on 7 July 2021 and Notice of Meeting dated 7 and 8 June 2021.
(c) Other option issues
On 27 April 2021, the company issued 14,001,322 listed options to Mahe Capital Pty Ltd (Mahe) pursuant to the company's
underwriting agreement with Mahe (refer note 18). The options vested on the grant date and are exercisable at 6 cents
through to 25 March 2024. The value of the options at the grant date was $196,990.
(d) Movements in options and performance rights
Set out below are summaries of options granted:
2022
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted*
Exercised*
Expired/
forfeited/
other
Balance at
the end of
the year
23/12/2019
27/04/2021
27/07/2021
23/06/2022
25/03/2024
31/12/2022
$0.029 10,000,000
$0.060 14,001,322
$0.029
-
-
- 10,000,000
24,001,322 10,000,000
(10,000,000)
-
-
(10,000,000)
-
-
- 14,001,322
- 10,000,000
- 24,001,322
Weighted average exercise price
$0.047
$0.029
$0.029
$0.000
$0.047
*
Limited recourse loans were granted for the 10,000,000 options exercised. These loans were treated as in-substance
options.
2021
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
23/12/2019
27/04/2021
23/06/2022
25/03/2024
$0.029 10,000,000
$0.060
-
- 14,001,322
10,000,000 14,001,322
-
-
-
- 10,000,000
- 14,001,322
- 24,001,322
Weighted average exercise price
$0.029
$0.060
$0.000
$0.000
$0.047
49
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 33. Share-based payments (continued)
Note that the exercise price of the 10m options granted 23/12/2019 decreased from $0.030 to $0.029 due to the discount
that arose on the rights issue, where the Prospectus was announced on 25 March 2021.
The weighted average remaining contractual life of options outstanding at 30 June 2022 was 1.22 years (30 June 2021: 2.01
years).
Set out below are summaries of performance rights granted under the EEIP:
2022
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
07/07/2021
19/08/2022
$0.000
-
-
7,160,000
7,160,000
-
-
(2,386,665)
(2,386,665)
4,773,335
4,773,335
(e) Measurement of fair values
Options granted:
The fair value of options granted during the current and prior financial years was measured using the Black-Scholes option
pricing model. For the options granted during the current and prior financial year, the valuation model inputs used to
determine the fair value at the grant date, are as follows:
Grant date
Expiry date
Share price Exercise
at grant date
price
Expected
volatility
Dividend
Risk-free
Fair value
yield
interest rate at grant date
27/04/2021
27/07/2021
25/03/2024
31/12/2022
$0.029
$0.036
$0.060
$0.029
100.58%
116.44%
-
-
0.11%
0.06%
$0.014
$0.021
The options granted on 27 July 2021, relate to the limited recourse loans which have been accounted for as in-substance
options.
Performance rights granted:
The fair value of performance rights granted was measured using the Monte Carlo simulation pricing model for Hurdle 1 and
the Binomial pricing model for Hurdles 2 and 3. The valuation model inputs used to determine the fair value at the grant date,
are as follows:
Grant date
Expiry date
Share price Expected
volatility
at grant date
Dividend
Risk-free
Fair value
yield
interest rate at grant date
07/07/2021
07/07/2021
19/08/2022
19/08/2022
$0.036
$0.036
113.02%
113.02%
-
-
0.06%
0.06%
$0.024
$0.034
The expected price volatility is based on the historic volatility (based on the remaining life of the options/rights), adjusted for
any expected changes to future volatility due to publicly available information.
(f) Share-based payments expense
Consolidated
2022
$
2021
$
371,097
14,420
Expense from share-based payments
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees.
50
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 33. Share-based payments (continued)
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Black-Scholes or Binomial or Monte Carlo option pricing models that takes into account the exercise price, the
term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share,
the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that
do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. Vesting
conditions, other than market conditions, attached to equity instruments granted are not taken into account when estimating
the fair value at measurement date.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
Note 34. Cash flow information
Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
(2,007,194)
(3,054,991)
Consolidated
2022
$
2021
$
Adjustments for:
Depreciation and amortisation
Share-based payments
Adjustment to plant and equipment - non-cash
Net loss on disposal of non-current assets
Expenses - non-cash
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in trade and other payables
Increase/(decrease) in employee benefits
Increase in other provisions
Net cash used in operating activities
51
85,372
371,097
-
-
-
18,421
14,420
(2,885)
2,049,754
6,600
(13,602)
456,578
28,266
3,842
(12,919)
131,606
(83,567)
-
(1,075,641)
(933,561)
Metallica Minerals Limited
Notes to the financial statements
30 June 2022
Note 34. Cash flow information (continued)
Non-cash investing and financing activities
Options issued to underwriter
Consolidated
2022
$
2021
$
-
196,990
52
Moore Australia Audit
Level 12, 10 Eagle Street
Brisbane QLD 4000
GPO Box 475
Brisbane QLD 4001
T +61 7 3340 3800
F +61 7 3340 3700
www.moore-australia.com.au
Independent Audit Report
To the members of Metallica Minerals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Metallica Minerals Limited (the Company) and its subsidiaries (the
“Group”), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including
Independence Standards) (the “Code”) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Moore Australia Audit (QLD/NNSW) – ABN 33 050 150 130.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
54
Key audit matter
Going concern
How the matter was addressed in our audit
Refer to Note 1 Significant accounting policies, detailing going concern
Note 1 of the financial statements
outlines the basis of preparation of
financial statements which indicates
they are being prepared on a going
concern basis. As the group
generates no revenue and is reliant
on funding from other sources such
as capital raising, there is
significant judgement involved in
determining whether a material
uncertainty relating to going
concern exists and is critical to the
understanding of the financial
statements as a whole. As a result,
this matter was key to our audit.
In evaluating management’s assessment of the going
concern assumption, we performed the following procedures
but not limited to:
• Obtaining and evaluating management’s assessment of
the group’s ability to continue as a going concern
• Reviewing management’s assumptions in the cash flow
forecasts to assess whether current cash levels along
with expected cash inflows and expenditure can sustain
the operations of the Group for a period of at least 12
months from the date of signing of the financial
statements
• Assessing the cash flow forecasts provided by
management and challenging the assumptions therein to
determine if there is consistency with management’s
intention and stated business and operational objectives
• Performing a sensitivity analysis over cash flow forecasts
as prepared by management based on a number of
alternative scenarios
• Assessed the adequacy of the disclosures in relation to
going concern included in Note 1 to the financial report.
Carrying value of Capitalised Exploration & Evaluation Assets
Refer to Note 13 Exploration & Evaluation Assets
The carrying value of the Group's
exploration and evaluation asset is
impacted by the Group's ability, and
intention, to continue to explore this
asset. The results of exploration
work also determine to what extent
the mineral reserves and resources
may or may not be commercially
viable for extraction. This impacts
the ability of the Group to recover
the carrying value of the exploration
and evaluation assets either
through the successful
development or sale. Due to the
quantum of this asset and the
subjectivity involved in determining
whether it's carrying value will be
recovered through successful
development or sale, we have
determined this is a key audit
matter.
We have critically evaluated management’s assessment of
each impairment trigger per AASB 6 Exploration for and
Evaluation of Mineral Resources, including but not limited to:
• Reviewing the directors' assessment of the carrying value
of the exploration and evaluation costs, ensuring that
management have considered the effect of potential
impairment indicators, commodity prices and the stage of
the Group's project against the standard of AASB 6
• Obtaining from management a schedule of areas of
interest held by the Group and assessed as to whether
the Group had rights of tenure over the relevant
exploration areas by obtaining external confirmation from
the relevant government agency and also considered
whether the Group maintains tenements in good standing
• Making enquiries of management with respect to the
status of ongoing exploration programs in the respective
areas of interest and assessing the Group's cashflow
budget for the level of budgeted spend on exploration
projects
• Considering whether any other data exists which
indicates that the carrying amount of the exploration and
evaluation asset that is unlikely to be recovered in full
from successful development or by sale
• Assessed the appropriateness of the disclosures
included in Note 13 to the financial report.
55
Other information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2022 but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and will request that it is corrected. If it is not
corrected, we will seek to have the matter appropriately brought to the attention of users for whom our
report is prepared.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This description forms part of our auditor’s report.
Report on The Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report as included in pages 8 to 16 of the directors’ report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of Metallica Minerals Limited, for the year ended 30 June 2022
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Murray McDonald
Director – Audit and Assurance
Moore Australia Audit (QLD/NNSW)
Brisbane
Moore Australia Audit (QLD/NNSW)
Chartered Accountants
56
Metallica Minerals Limited
Shareholder information
30 June 2022
The shareholder information set out below was applicable as at 23 August 2022.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Ordinary shares
Number
of holders
% of total
shares
issued
Options over ordinary
shares
Number
of holders
% of total
shares
issued
48
32
43
816
524
1,463
164
3
2
3
56
36
100
0.15
25
37
30
131
137
360
202
7
10
8
36
38
100
2.51
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
Number held
% of total
shares
issued
151,868,345
64,516,129
35,422,409
17,247,408
11,012,502
10,500,000
8,300,000
8,190,000
7,264,100
5,500,000
5,000,000
5,000,000
5,000,000
4,910,966
4,869,975
4,741,456
4,500,000
4,250,000
4,200,000
4,000,000
366,293,290
22.81
9.69
5.32
2.59
1.65
1.58
1.25
1.23
1.09
0.83
0.75
0.75
0.75
0.74
0.73
0.71
0.68
0.64
0.63
0.60
55.01
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SPARTA AG
DOSTAL NOMINEES PTY LTD
ROOKHARP CAPITAL PTY LIMITED
PLAN-1 PTY LTD
MR GRAHAM RAYMOND WILLIAM DOW
GEFRATO TRADING PTY LTD
SHADBOLT FUTURE FUND (TOTTENHAM) PTY LTD
SIBELCO ASIA PACIFIC PTY LTD
CALAMA HOLDINGS PTY LTD
CAROJON PTY LTD
LATSOD PTY LTD
MRS CAROLYN DOW
BONDLINE LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
MACFORBES SUPER PTY LTD
NO BULL HEALTH PTY LTD
MR PAUL THOMAS MCGREAL
ANDREW SCOTT VICTOR WADDELL
57
Metallica Minerals Limited
Shareholder information
30 June 2022
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SPARTA AG
TANGO88 PTY LTD
DOSTAL NOMINEES PTY LTD
MR KEVIN JOHN HENDERSON
MR BILAL AHMAD
MR PUNIT ARORA & MRS SHWETA ARORA
LATSOD PTY LTD
CALAMA HOLDINGS PTY LTD
GEFRATO TRADING PTY LTD
ROOKHARP CAPITAL PTY LIMITED
OPEG (ORDU PRIVATE EQUITY GROUP) PTY LTD
BUCKINGHAM INVESTMENT FINANCIAL SERVICES PTY LTD
MRS MARCIA LURLINE DONALDSON
MR DAVID GAZE
MS PATRICIA MARIE NOELLE ORRE
CHALLENGE AURORA PTY LTD
PERALTA AGUILAR MEDICALS PTY LTD
MS ANGELA MARGARET DAY
MR JIAN LIANG
Unquoted equity securities
Options over ordinary shares issued
Substantial holders
Substantial holders in the company are set out below:
ILWELLA PTY LTD
SPARTA AG
DOSTAL NOMINEES PTY LTD
Voting rights
The voting rights attached to ordinary shares are set out below:
Options over ordinary
shares
% of total
options
issued
Number held
55,360,215
32,258,065
12,964,029
6,669,167
5,470,618
4,384,389
2,640,000
2,000,000
1,750,000
1,675,000
1,666,666
1,662,389
1,500,000
1,471,921
1,445,062
1,300,000
1,100,000
1,050,000
1,000,000
1,000,000
30.82
17.96
7.22
3.71
3.05
2.44
1.47
1.11
0.97
0.93
0.93
0.93
0.84
0.82
0.80
0.72
0.61
0.58
0.56
0.56
138,367,521
77.03
Number
on issue
Number
of holders
8,160,000
8
Ordinary shares
% of total
Number held
150,725,901
64,516,129
40,422,409
shares
issued
22.63
9.69
6.07
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
58
ANNUAL
RE PO RT
FO R THE YEAR ENDED
3 0 JUNE 2022
METALLICA
MINERALS LTD
202 2
Metallica Minerals Annual Report | 2022