2019 ANNUAL REPORT
CONTENTS
CORPORATE DIRECTORY ............................................................................... 1
COMPANY PROFILE .......................................................................................... 2
REVIEW OF OPERATIONS ............................................................................... 4
DIRECTORS’ REPORT .................................................................................... 11
AUDITOR’S INDEPENDENCE DECLARATION .............................................. 33
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2019 .......................................... 34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019 ........................................................................................ 35
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019 ......................................................... 36
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019 ........................................................ 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 ......................................................... 38
DIRECTORS’ DECLARATION .......................................................................... 94
INDEPENDENT AUDIT REPORT ..................................................................... 95
TABLES OF MINERAL RESOURCES AND ORE RESERVES
AS AT 30 JUNE 2019 ...................................................................................... 100
SECURITY HOLDER INFORMATION AS AT 23 AUGUST 2019 .................. 105
CORPORATE DIRECTORY
Directors
Peter Newton (Non-Executive Chairman)
Damien Marantelli (Managing Director)
Simon Heggen (Non-Executive Director)
Milan Jerkovic (Non-Executive Director)
Yimin Zhang (Non-Executive Director)
Company Secretary & Chief Financial Officer
Fiona Van Maanen
Key Management
Campbell Baird (Executive General Manager – Mining & Technical)
Simon Rigby (Executive General Manager – Geology & Business Development)
Stephen Robinson (Executive General Manager – Projects & Planning)
Russell Cole (General Manager – Nifty Copper Operations)
Mark Recklies (General Manager – Renison Tin Operations)
Registered Office
Level 5, 197 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9220 5700
Email: reception@metalsx.com.au
Web: www.metalsx.com.au
Postal Address
PO Box 7248
Cloisters Square PO WA 6850
Securities Exchange
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St Georges Terrace
Perth WA 6000
ASX Code: MLX
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
GPO Box Melbourne VIC 3001
Phone: (within Australia) 1300 850 505
Phone: (outside Australia) +61 3 4915 4000
Facsimile: +61 3 9473 2500
Domicile and Country of Incorporation
Australia
- 1 -
COMPANY PROFILE
Metals X Limited (“Metals X” or “the Company”) is an Australian base metals producer with two high-
quality and long-life operations and a global scale development project:
Australia’s largest tin producer through its 50%-owned Tasmanian joint arrangement,
generating high margins and strong cashflow, with further production and development upside;
A well-established copper operation with significant production, development and exploration
potential;
A world class nickel-cobalt development project, ready to leverage increasing global demand
for responsibly sourced battery metals.
Operations and Projects Location Map
(50%-owned
Metals X currently has two producing assets; the
Renison Tin Operations
joint
arrangement) in Tasmania and the Nifty Copper
Operations in Western Australia. The Company
also owns the Wingellina nickel-cobalt deposit
(Central Musgrave Nickel Project), one of the
world’s largest undeveloped nickel and cobalt
resources.
The Company is in a unique position as the only
significant publicly listed tin producer on the ASX,
and remains as one of few publicly listed tin
producers in the western world. The Tin Division
has aggregated Mineral Resources containing
approximately 376,400
tin and
aggregated
containing
approximately 181,300 tonnes of tin*. Renison
has expanded its production by approximately
15-20% with the construction and commissioning
of a new crusher and ore sorting plant. In
addition, the environmental approvals process for
the Renison Tailings Retreatment Project is well
advanced.
tonnes of
Reserves
Ore
- 2 -
COMPANY PROFILE (continued)
The Nifty Copper Operations produce a clean copper concentrate from an underground copper sulphide
mine, with ore processed through a 2.5 million tonne-per-annum copper concentrator. Nifty has
aggregated Mineral Resources containing approximately 546,000 tonnes of copper and aggregated Ore
Reserves containing approximately 161,000 tonnes of copper**. Metals X has significantly extended the
Nifty mine to the east, west and northeast and completed over 80,000 metres of underground drilling
since acquisition. The Copper Division also includes the Maroochydore Copper Project located
approximately 85 kilometres to the south-east of Nifty. Maroochydore already hosts aggregated Mineral
Resources of approximately 486,000 tonnes of copper, mainly in oxides. Following an extensive review
of geological information, further sulphide targets have been identified along strike of the defined
Maroochydore resource.
The Wingellina nickel–cobalt project, which forms part of the Company’s Central Musgrave Nickel Project,
is a world-class deposit. Wingellina has aggregated Mineral Resources containing approximately 2.0
million tonnes of nickel and over 154,000 of
cobalt***. A feasibility study was completed
in 2008 based on a minimum 40 year
project producing at an annual rate of
40,000 tonnes of nickel and 3,000 tonnes
the company
of cobalt. During 2017
undertook a review of the high grade cobalt
and nickel zones of the ore body and
identified an initial 15 high grade pits within
the existing reserve. Infill drilling of 6 these
high
pits was
undertaken to confirm the integrity of the
geological models. The drilling results have
demonstrated the potential for a high
grade, potentially smaller scale and lower
capital start-up. In addition, metallurgical
testwork has successfully produced nickel
sulphate and cobalt
from
Wingellina ore.
nickel-cobalt
sulphate
grade
Metals X has received the required approvals, including Native Title and Environmental, to proceed with
the development of Wingellina. Development of the project is contingent mainly upon nickel price
improvement and funding.
For further details on Total Mineral Resource and Ore Reserve estimates for the Renison Tin Operations refer to ASX
announcements dated 24 May 2019 and 20 August 2019 respectively.
** For further details on Total Mineral Resource and Ore Reserve estimates for the Nifty Copper Operations refer to ASX
announcement dated 28 August 2019.
*** For further details on Total Mineral Resource and Ore Reserve estimates for the Central Musgrave Nickel Project refer to ASX
announcement dated 18 August 2016.
- 3 -
REVIEW OF OPERATIONS
CORPORATE
Share Placement
On 7 August 2018 the Company completed a capital raising of $50,000,000 (before costs) by issuing
76,923,076 fully paid ordinary shares at an issue price of $0.65 per share to institutional and professional
investors.
Hedging
In the previous period, the Company entered into forward commodity contracts relating to puts and calls
granted over 1,500 tonnes of copper per month, which settled in July 2018. The puts had a strike price
as low as $7,600 per tonne of LME copper and the calls had a strike price as high as $8,255 per tonne of
LME copper.
During the period, the Company entered into copper commodity swap transactions and foreign exchange
forward contracts to hedge the Quotational Period risk of copper shipments. There were no outstanding
contracts at the end of the period.
COPPER DIVISION
The Copper Division holds two key assets:
1.
2.
Nifty Copper Operations; and
Maroochydore Copper Project.
Nifty Copper Operations
The Nifty Copper Operations (“Nifty”) comprise an underground copper sulphide mine with an associated
2.5Mtpa copper concentrator. Site infrastructure is extensive, including a powerhouse, camp and airfield.
Processing of sulphide copper ore is by conventional comminution, grinding and flotation to produce a
clean copper concentrate. A concentrate storage facility is located at Port Hedland where concentrate is
accumulated before shipping for smelting and refining.
During the period a comprehensive evaluation of Nifty was undertaken. The evaluation included
geological endowment, the historical performance of the mine, the condition of the underground and
surface infrastructure, the cost base, planning activities as well as operational and productivity constraints.
The evaluation has been incorporated into a detailed plan of action to transform Nifty into a long term,
profitable operation.
In regard to geological potential, the Nifty deposit (and regional tenure) remains underexplored. Drilling
results received during the period, support the view of the significant upside of the deposit. Underground
drilling, including establishing drill drives to provide optimal angles for resource definition and extensional
drilling, has been a key activity for the period.
The immediate focus at Nifty is to increase production through the development and introduction of new
mining areas outside of the Central Zone (the historical area of mining). Prior activities at Nifty have
prioritised short term operational objectives ahead of the required development of new mining areas and
associated underground infrastructure. These capital project imperatives are now being addressed.
Key activities for the period were:
Continuing the recruitment and building of a higher capability Nifty mining team;
Accelerating development into new areas both east and west of the Central Zone;
Identifying and progressively resolving operational inefficiencies in the mine;
Identifying and delivering sustainable cost reductions including commencement of campaign
processing and improvements in inventory management;
Optimising the mining fleet to build further on productivity improvements;
Increasing paste filling underground through improvements to the paste delivery system and
commissioning of dry tailings reclaim to provide paste while the process plant is not in a campaign;
Completion of the first phase of improving secondary ventilation;
Ongoing review of options to integrate several primary ventilation circuits into the mining areas;
and
Continued production and resource definition drilling to demonstrate significant geological
opportunity within the new mining areas and their potential extensions.
At the end of the period the Company completed a recoverable amount assessment that resulted in an
impairment of Nifty of $64,199,644 (refer to note 39).
- 4 -
REVIEW OF OPERATIONS (continued)
COPPER DIVISION (continued)
Grade control and resource definition drilling programs continued during the period, with the priority being
grade control programs east and west of the Central Zone and also within the Northeast Limb. Results
from these drilling campaigns are continuing to flow through with excellent intersections being reported.
The grade control programs in upcoming production areas combined with an improved structural
interpretation, are mostly confirming or increasing tonnages within the geological model.
Since acquiring Nifty the Company has put a significant effort into better understanding the stratigraphic
sequence and structural architecture which hosts the orebody. This has been carried out on multiple fronts
but has primarily been underpinned by targeted diamond drilling and intensive mapping of the mined
openings.
PLAN AND LONGSECTION THROUGH THE NIFTY DEPOSIT SHOWING PRIORITY TARGET AREAS
The Company controls 2,900km2 of exploration tenure within the Paterson Province. The recent discovery
of the new Winu copper deposit by Rio Tinto, and exciting copper-gold drilling results from the Greatland
Gold – Newcrest Mining JV Havieron prospect, continue to demonstrate this area’s prospectivity.
Regional exploration activities during the period focussed on program finalisation and field preparation for
the upcoming field season exploration programs. Primary targets include surface diamond drilling
programs testing new lithostructural interpretations southeast of the Nifty orebody within Eastern Zones
2/3 and the new Brookes target within Eastern Zone 4, as well as planned RC drilling programs at the
Rainbow and Juniper prospects located north of Nifty, and the Noosa and Spitfire targets located near
Maroochydore.
The Noosa prospect is targeting an area 4km to the west of the Maroochydore deposit where interpreted
Maroochydore host rocks are in structural contact with the Eva Well intrusive. The Spitfire prospect also
targets the contact position of the Eva Well and Broadhurst stratigraphy immediately to the north of
Maroochydore. Drilling is also planned to test the eastern extensions to the known sulphide mineralisation
at Maroochydore itself.
- 5 -
REVIEW OF OPERATIONS (continued)
COPPER DIVISION (continued)
REGIONAL GEOLOGY OF THE PATERSON PROVINCE SHOWING MLX TENURE AND PRIORITY EXPLORATION TARGETS
Maroochydore Copper Project
The Maroochydore deposit, located approximately 85km south east of Nifty, consists of a significant oxide
Mineral Resource of 43.5 million tonnes at 0.91% Cu and 391ppm Co, with a small primary sulphide
Mineral Resource of 5.43 million tonnes at 1.66% Cu and 292ppm Co based upon the limited drilling to
date (refer to ASX announcement dated 18 August 2016).
Following the completion of drilling activities at Maroochydore in 2018, work has focused on developing
additional metallurgical testwork programs. Metallurgical domaining of the orebody has been completed
and further testwork is planned.
In addition to the oxide resources, copper sulphide mineralisation has been identified at depth in historic
drilling. However, the area is sparsely drilled and inadequately defined, with primary copper sulphide
mineralisation remaining open along-strike and down-dip. Geophysical modelling of high resolution
aeromagnetic data suggests that the Maroochydore deposit lies within a north-trending structural corridor
with the possibility of a structural repetition of the mineralised horizon occurring to the east of the current
resource area. A comprehensive review of historic exploration was conducted during the previous period
with key exploration targets identified for the upcoming drilling field season.
- 6 -
REVIEW OF OPERATIONS (continued)
TIN DIVISION
Metals X is the largest Australian tin producer through its 50% ownership of the Renison joint arrangement
which holds three key assets:
1.
2.
3.
The world class Renison Tin Operations (“Renison”);
The Renison Tailings Retreatment Project (“Rentails”); and
The historic Mt Bischoff Project, currently on care and maintenance.
Renison Tin Operations (50%)
The Renison Tin Mine is located approximately 15km north-east of Zeehan on Tasmania’s west coast.
Renison is a world-class, long life underground mining operation producing tin concentrate.
Key activities for the period were:
Commissioning and optimisation of the ore sorting plant which increases the grade of ore
processed and production by 15-20% by rejecting waste material prior to the processing plant;
Substantial Mineral Resource upgrade with a 22% increase in contained tin and an increase in
total Mineral Resource grade from 1.31% Sn to 1.50% Sn (refer to ASX Announcement dated 24
May 2019);
Area 5 subset Mineral Resource of 4.47Mt at 1.91% Sn for 85,200 tonnes of contained tin
represents an outstanding high-grade opportunity with development underway:
•
•
Phase 1 ventilation works to allow increased depth of operations completed;
Mining optimisation study commenced in conjunction with overall mine planning and Renison
life-of-mine planning targeting an increase in mining rate to 1Mtpa;
Drilling continued to demonstrate resource growth in the Leatherwood Trend, proximal to existing
development, as well as strong drilling results from other extensional exploration priority areas to
the north and south of the current mining area (Huon North and Bell 50);
Commencement of a metallurgical improvement program with the objective of increasing mill
throughput rate and metallurgical recovery; and
Surface exploration work with downhole electromagnetic testing for new targets in the proximity of
current underground operations.
During the period, mining rates achieved the steady-state production rate required to sustain the
expanded processing facility and ore sorter. The significant surface stockpile of ore that was created in
the previous period was drawn upon, as planned, during commissioning of the ore sorter.
The drilling focus remained on further expanding the resource definition program in the Area 5, Deep
Federal, Leatherwood, Bell 50, Central Federal Bassett and Huon North lodes. Results from these
campaigns demonstrated exceptional mineralisation, in particular holes targeting Area 5 and the
Leatherwood trend which are upcoming production zones.
Mine planning activities to identify the most efficient mining methods to capitalise on the high-grade Area
5 orebody commenced. Development of the decline to access the high grade zone and additional
development to allow an immediate upgrade of ventilation to support mining in the area is also underway.
Stoping in Area 5 is planned to progressively increase in the second half of the financial year. The
increased percentage of Area 5 feed into the mill will increase mill feed grade. In addition, mining rate,
throughput and recovery increases are planned to further increase production across the year.
(LEFT) ISOMETRIC VIEW OF THE RENISON OREBODY SHOWING CURRENT MINING AREAS AND RESOURCE DEFINITION AREAS (PINK) AND
(RIGHT) LONG SECTION THROUGH THE AREA 5 AND LEATHERWOOD AREAS
- 7 -
REVIEW OF OPERATIONS (continued)
TIN DIVISION (continued)
In addition to the “in-mine” resource definition programs described above, a “near-mine” exploration
strategy was developed targeting potential new stand alone and incremental resource exploration targets
within the Renison area. During the period, exploration activities focussed on the planned downhole
electromagnetic survey (“DHEM”) in the Argent, South Bassett, North Federal and Lead-Blow target
areas. This work included completion of various permitting requirements along with re-establishment of
access tracks within the target areas and the commencement of drilling to clean-out and case selected
drill holes in preparation for the DHEM survey. In addition to this work, historic data compilation and 3D
geological modelling was undertaken in support of additional targeting programs.
RENISON EXPLORATION – PRIORITY TARGET AREAS RELATIVE TO THE RENISON OREBODY SHOWING SELECTED HISTORIC DRILL HOLES
(YELLOW) FOR DHEM SURVEY
Renison Tailings Retreatment Project
The objective of the Rentails Project is to re-process the estimated 22.5 Mt of tailings at an average grade
of 0.44% tin and 0.23% copper from the historical processing of tin ore. The current tailings dams have a
Probable Ore Reserve containing approximately 99,000 tonnes of tin and 51,000 tonnes of copper.
The Rentails Definitive Feasibility Study proposed to retreat the historical tailings over an 11-year period
at an average rate of 2Mtpa to produce approximately 5,400 tonnes of tin in a high grade tin fume product
and 2,200 tonnes of copper in a high grade copper matte (refer to ASX announcement dated 3 July 2017).
The key Rentails activities during the period were the continuation of the environmental approvals process
and further evaluation of tin fuming testwork. Mining studies, with associated geochemical testwork, to
produce a basis of design for tailings dam deconstruction and reconstruction have been completed.
Mt Bischoff Project
The Mt Bischoff Project is located approximately 80km north of the Renison mine. Mt Bischoff was a
significant historical tin operation, producing some 60,000 tonnes of tin metal since the late 1800’s. Open
pit mining by the Company between 2009 and 2011 produced a further 5,000 tonnes of tin metal before
the initial open pit mine was depleted. Whilst the mine remains on care and maintenance, significant
resources remain at depth and numerous historically mined areas remain underexplored and offer future
development opportunity at higher tin prices.
- 8 -
REVIEW OF OPERATIONS (continued)
NICKEL DIVISION
Metals X’s nickel strategy remains focused on the Central Musgrave Nickel Project that straddles the
triple-point of the Western Australia/Northern Territory/South Australia borders. The project comprises
the globally significant Wingellina nickel-cobalt limonite deposit, the similar Claude Hills deposit and the
Mt Davies exploration prospects. The project includes a large tract of prospective exploration tenure
encompassing the whole of the Wingellina layered intrusive sub-set of the Giles Complex rocks in
Western and Southern Australia.
Wingellina is one of the largest undeveloped nickel–cobalt deposits in the world. Metals X has defined
an Ore Reserve estimate of approximately 168 million tonnes containing 1.56 million tonnes of nickel,
123,000 tonnes of cobalt and a significant inventory of scandium and iron.
Metals X has completed a feasibility study (+/-25%) and has signed an agreement with the Traditional
Owners which provides consent to undertake mining activities. Metals X has also received Environmental
Protection Authority (EPA) approval to develop the project.
During the previous period, the Company undertook a review of the high grade cobalt and nickel zones
and identified an initial 15 high grade pits. An infill drilling program was successfully completed on 6 of 15
identified high grade nickel-cobalt pit shells within the defined resource area. The drilling program
demonstrated the potential for a high grade, smaller project start-up with a lower capital cost. Metals X
also successfully completed metallurgical testwork for the production of high quality nickel sulphate and
cobalt sulphate from Wingellina.
The potential for improved economics from a high grade start-up and demonstrated ability to produce
nickel sulphate and cobalt sulphate provides further options for the development of the project in terms of
scale, payback on capital and final product. Off the back of these expanded options for the project,
Metals X has actively re-engaged in discussions with potential partners for the development of Wingellina.
This includes parties with which initial discussions have been held previously as well as other interested
organisations including downstream end-users of product.
OVERVIEW OF WINGELLINA DEPOSIT SHOWING 9KM FOOTPRINT OF +0.5% NI RESOURCE WIREFRAMES, +0.05% CO RESOURCE WIREFRAMES
AND POTENTIAL HIGH GRADE OPEN PIT OUTLINES. ALL COORDINATES ARE WINGELLINA 2015 LOCAL GRID
- 9 -
REVIEW OF OPERATIONS (continued)
CORPORATE STRUCTURE
- 10 -
DIRECTORS’ REPORT
The Directors submit their report together with the financial and annual report of Metals X Limited and of
the Consolidated Entity, being the Company and its controlled entities, for the year ended 30 June 2019.
DIRECTORS
The names and details of the Company’s Directors in office during the financial period and until the date
of this report are as follows. Directors were in office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Peter Newton – Independent Non-Executive Chairman
Mr Newton was a stockbroker for 25 years until 1994. Since then he has been a significant participant in
the Australian resource industry as an investor and a director of a number of listed companies. In past
years, he has been the Chairman of both Hill 50 Limited and Abelle Limited. Mr Newton is also the
Chairman of the Company’s Remuneration & Nomination Committee and serves on the Audit & Risk
Committee.
During the past three years he has served as a director of the following public listed companies:
Westgold Resources Limited *.
Damien Marantelli - Managing Director (Appointed 12 November 2018)
Mr Marantelli has a Diploma of Mining Engineering from the Royal Melbourne Institute of Technology and
extensive worldwide operational experience spanning almost 40 years in the industry. During the past 18
years, Mr Marantelli has had General Manager or Chief Operating Officer accountability for open pit and
underground mines in Australia, Turkey, Spain, Zambia, Canada and Mexico. This includes exposure to
bulk materials, base metals and precious metals as well as overall exploration and brownfields project
management at those operations.
Mr Marantelli has held no public company directorships in the past three years.
Warren Hallam - Managing Director (Appointed 1 March 2005 – Resigned 12 November 2018)
Mr Hallam is a Metallurgist (B. App Sci (Metallurgy)), a Mineral Economist (MSc (Min. Econ)), holds a
Graduate Diploma in finance and has around 30 years of technical and commercial experience within the
resources industry.
During the past three years he has served as a director of the following public listed companies:
Westgold Resources Limited (Appointed 18 March 2010 – Resigned 2 February 2017).
Stephen Robinson – Executive Director (Appointed 25 November 2016 – Resigned 3 September 2018)
Mr Robinson holds a BSc and is an experienced Australian mining executive and a Rhodes Scholar. Mr
Robinson has extensive international experience at senior executive levels within the mining industry.
Previously he has been the Director of Business Development & Strategy at Barrick (Australia Pacific)
Limited, Group Manager Planning with Iluka Resources Ltd and a senior manager in the gold business
unit at WMC Resources Ltd.
During the past three years he has served as a director of the following public listed companies:
Sumatra Copper & Gold Plc (Appointed 8 July 2013 - Resigned 30 June 2017).
Simon Heggen – Independent Non-Executive Director
Mr Heggen holds a Bachelor of Economics and a Bachelor of Laws Degrees from the Australian National
University and has around 30 years proven experience in strategic planning, corporate development, M&A
and corporate finance within the Resources sector. Mr Heggen is Chairman of the Company’s Audit
Committee and also serves on the Remuneration & Nomination Committee.
During the past three years he has served as a director of the following public listed companies:
Auris Minerals Limited (Appointed 31 October 2015 – Resigned 25 November 2015).
- 11 -
DIRECTORS’ REPORT (continued)
Yimin Zhang – Non-Executive Director
Mr Zhang is the Chief Representative for Jinchuan Australia and is also an Executive Director of Sino
Nickel Pty Limited. Mr Zhang has worked for Jinchuan since 1981 and has been posted to several
overseas positions to which he has been involved in numerous Jinchuan co-operative ventures. Mr Zhang
holds a Diploma from the Metallurgical and Architectural Institute of Chang Chun. Mr Zhang served as an
Alternative Non-Executive Director for Mr Xie Penggen until 9 January 2017, at that time Mr Zhang was
appointed a Non-Executive Director of the Company.
Mr Zhang has held no public company directorships in the past three years.
Milan Jerkovic – Independent Non-Executive Director
Mr Jerkovic has over 30 years of experience in the mining industry involving resource evaluation,
operations, financing, acquisition, project development and general management. Mr Jerkovic is a
Geologist with post graduate qualifications in Mineral Economics and Mining, is a Fellow of the Australian
Institute of Mining and Metallurgy and a member of the Australasian Institute of Company Directors. He
was previously the CEO of Straits Resources Limited and was the founding Chairman of Straits Asia
Resources Limited which was listed on the Singapore Stock Exchange. Mr Jerkovic has also held
positions with WMC, BHP, Nord Pacific, Hargraves, and Tritton. Mr Jerkovic is currently Chairman of both
Geopacific Resources Limited and Blackham Resources Limited. Mr Jerkovic also serves on the
Company’s Audit and Remuneration & Nomination Committees.
During the past three years he has served as a director of the following public listed companies:
Blackham Resources Limited *; and
Geopacific Resources Limited (Appointed 23 April 2013 – Resigned 8 May 2019).
* Denotes current directorship
INTERESTS IN THE SHARES OF THE COMPANY
As at the date of this report, the interests of the Directors in the shares and options of Metals X Limited
were:
Director
DM Marantelli
SD Heggen
PJ Newton
M Jerkovic
Y Zhang
Total
Fully Paid
Ordinary Shares
-
6,689
16,070,217
917,500
-
Options
3,000,000
-
-
-
-
16,994,406
3,000,000
COMPANY SECRETARY
Fiona Van Maanen – Chief Financial Officer and Company Secretary
Mrs Van Maanen is a CPA, holds a Bachelor of Business (Accounting) degree and a Graduate Diploma
in Company Secretarial Practice. Mrs Van Maanen has significant experience in accounting and financial
management in the mining and resources industry.
PRINCIPAL ACTIVITIES
The principal activities during the year of the Consolidated Entity were:
operation of tin and copper mines in Australia; and
exploration and development of base metals projects in Australia.
EMPLOYEES
The Consolidated Entity had 467 employees at 30 June 2019 (2018: 446).
- 12 -
DIRECTORS’ REPORT (continued)
DIVIDENDS
No dividends were paid during the period to members in respect to the 2018 financial year.
The Directors do not propose to pay any dividend for the financial year ended 30 June 2019.
Refer to note 10 for available franking credits.
SHARE OPTIONS
Unissued shares
As at the date of this report, there were 29,173,202 ordinary shares under options, refer to note 27(e).
Option holders do not have any right, by virtue of the option, to participate in any share issue of the
Company or any related body corporate.
Shares issued as a result of exercising options
There were no options converted to shares during the financial year.
RESULTS OF OPERATIONS
In accordance with the transitional provisions of AASB 9 and AASB 15, the comparative information below
has not been restated.
Consolidated total loss after income tax - $116,968,634 (2018: loss $26,297,186);
Total consolidated revenue - $204,722,012 (2018: $209,901,427);
Total cost of sales - $238,146,757 (2018: $217,533,046);
Impairment losses - $64,199,644 (2018: $1,988,131);
Exploration and evaluation expenditure write off - $6,569,771 (2018: $115,718)
Cash flows used in operating activities - $15,161,400 (2018: from $27,295,830);
Cash flows used in investing activities - $46,309,541 (2018: $38,889,357); and
Cash flows from financing activities - $41,600,495 (2018: used in $7,296,798).
Key results for the period are:
Capital Investment Activities
Cash flows used in investing activities was $46,309,541, which was higher than the previous period (2018:
$38,889,357), mainly due to capital expenditure at Nifty. This was offset by the sale of shares investments
for net proceeds of $4,542,993. Capital re-investment during the period:
Tin Division $9,034,209 (2018: $21,361,744), expenditure was higher in the previous period due
to the construction of the purpose built three stage crushing, screening and ore sorting plant and
a tailings dam lift;
Copper Division $40,498,845 (2018: $14,919,739), expenditure was higher than the previous
period due to expenditure on upgrading and refurbishing infrastructure and additional capital
development being undertaken to develop new mining areas outside of the Central Zone; and
Nickel Division $1,187,766 (2018: $1,308,239).
- 13 -
DIRECTORS’ REPORT (continued)
RESULTS OF OPERATIONS (continued)
Copper Division
Revenue from the Nifty Copper Operations was $119,445,784 (2018: $127,972,186). The revenue
is lower than the previous year as a result of a lower copper price.
The cost of sales was $159,566,683 (2018: $159,538,701) which was similar to the previous period
due to a similar level of production from the mine. Total All-in-costs was $188,525,055 (2018:
$169,684,968) which was higher than the previous period due to expenditure on upgrading and
refurbishing infrastructure and additional capital development being undertaken to develop new
mining areas outside of the Central Zone.
Performance of the Copper Division is summarised below:
Physical Summary
UG Ore Mined
UG Grade Mined
Ore Processed
Head Grade
Recovery
Copper Produced
Copper Sold
Copper Price
Realised Copper Price (net of Tc/Rc charges)
Copper Sales Revenue (net of Tc/Rc charges)
Cost Summary
Mining
Processing
Admin
Stockpile Adj
C1 Cash Cost (produced t) *
Cost per tonne produced
Royalties
Other Marketing Costs
Sustaining Capital
Reclamation & other adj.
Corporate Costs
All-in Sustaining Costs **
Cost per tonne produced
Project Startup Capital
Exploration Holding Cost
All-in Cost ***
Cost per tonne produced
Reconciliation to cost of sales
All-in Sustaining Costs
Sustaining Capital
Depreciation and amortisation
Inventory movements and other adjustments
Cost of sales
Units
t
% Cu
t
g/t
% Cu
t
t
A$/t
A$/t
A$
A$
A$
A$
A$
A$
A$/t
A$
A$
A$
A$
A$
A$
A$/t
A$
A$
A$
A$/t
A$
A$
A$
A$
A$
30 June 2019
30 June 2018
1,321,032
1,361,019
1.43
1.32
1,254,879
1,361,371
1.45
92.58
16,913
15,776
8,579
7,571
1.33
92.16
16,774
15,738
8,910
8,131
119,445,784
127,972,186
75,472,175
43,449,375
18,735,339
(5,699,413)
82,313,732
36,009,678
23,800,592
(33,111)
131,957,476
142,090,891
7,802
6,498,003
7,290,294
8,471
6,618,388
6,640,767
19,630,240
10,366,342
69,544
934,075
100,123
1,029,372
166,379,632
166,845,883
9,838
18,819,431
3,325,992
9,947
-
2,839,085
188,525,055
169,684,968
11,147
10,116
166,379,632
166,845,883
(19,630,240)
(10,366,342)
20,134,407
(7,317,116)
12,888,303
(9,829,143)
159,566,683
159,538,701
•
•
•
•
* C1 Cash Cost (C1): represents the cost for mining, processing and administration after accounting for movements in inventory (predominantly ore
stockpiles). It includes net proceeds from by-product credits, but excludes the cost of royalties and capital costs for exploration, mine development and plant
and equipment.
** All-in Sustaining Cost (AISC): is made up of the C1 cash cost plus royalty expense, sustaining capital expense and general corporate and administration
expenses.
*** All-in Cost (AIC): is made up of the AISC plus growth (major project) capital and discovery expenditure.
C1, AISC and AIC are non-IFRS financial information and are not subject to audit. These are widely used “industry standard” terms that certain investors
use to evaluate company performance.
- 14 -
DIRECTORS’ REPORT (continued)
RESULTS OF OPERATIONS (continued)
Tin Division
Revenue from the 50% owned Renison Tin Operations was $85,276,228 (2018: $81,929,241).
The revenue was higher than the previous year as a result of higher tin sales and prices.
The cost of sales was $78,580,075 (2018: $57,994,348). The costs are higher than the previous
period due to increased operating costs associated with the new crushing plant and ore sorter,
drawdown of the large low grade ore stockpile developed in the previous period as feed for the ore
sorter and inventory write downs to net realisable value.
Performance of the Tin Division (50% share) is summarised below:
30 June 2019
30 June 2018
Physical Summary
UG Ore Mined
UG Grade Mined
Ore Processed
Head Grade
Recovery
Tin Produced
Tin Sold
Tin Price
Realised Tin Price (net of Tc/Rc charges)
Tin Sales Revenue (net of Tc/Rc charges)
Cost Summary
Mining
Processing
Administration
Stockpile Adj
C1 Cash Cost
Cost per tonne produced
Royalties
Other Marketing Costs
Sustaining Capital
Reclamation & other adj.
Corporate Costs
All-in Sustaining Costs
Cost per tonne produced
Project Startup Capital
Exploration Holding Cost
All-in Cost
Cost per tonne produced
Reconciliation to cost of sales
All-in Sustaining Costs
Sustaining Capital
Depreciation and amortisation
Inventory movements and other adjustments
Cost of sales
398,990
1.21%
372,592
1.32%
72.36%
3,562
3,445
27,913
24,754
401,174
1.19%
366,242
1.25%
73.31%
3,370
3,434
26,595
23,862
85,276,228
81,929,241
23,682,022
19,967,097
4,289,385
3,320,898
51,259,402
14,391
2,125,852
456,526
8,078,134
18,432
100,563
23,081,846
16,438,961
3,639,709
(3,349,166)
39,811,350
11,814
4,381,904
487,088
10,979,218
42,097
103,325
62,038,909
55,804,982
17,417
4,228,363
228,278
16,559
15,079,888
-
66,495,550
70,884,870
18,668
21,034
62,038,909
(8,078,134)
14,757,984
9,861,316
78,580,075
55,804,982
(10,979,218)
12,535,023
633,561
57,994,348
Units
t
% Sn
t
g/t
% Sn
t
t
A$/t
A$/t
A$
A$
A$
A$
A$
A$
A$/t
A$
A$
A$
A$
A$
A$
A$/t
A$
A$
A$
A$/t
A$
A$
A$
A$
A$
- 15 -
DIRECTORS’ REPORT (continued)
REVIEW OF OPERATIONS
A full review of the operations of the Consolidated Entity during the year ended 30 June 2019 is set out
on page 13 of this report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Total equity decreased by 40% ($68,856,845) to $101,593,334 (2018: $170,450,179). The decrease was
mainly due to asset impairments ($64,199,644) and operating losses ($40,120,899) incurred at the Copper
Division, which was offset by a capital raise of $50,000,000 (before costs) in August 2018.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 29 August 2019 the Company entered into a facility agreement with Citibank N.A. for a A$35,000,000
secured term loan facility (“Facility”) through the Company’s 100%-owned subsidiary Bluestone Mines
Tasmania Pty Ltd. The key terms of the facility agreement are:
Loan term:
Repayments:
4 years;
Quarterly in arrears commencing 31 December 2019 with accelerated
prepayment from cash sweep commencing 30 June 2020. Early repayment
allowed, without penalty, at any time;
All material assets of the Company and certain subsidiaries excluding the
Renison Tin Operations joint venture participating interest and tenements;
Mandatory tin hedging, minimum liquidity and standard debt service ratios;
and
Drawdown conditional upon completion of tin hedge arrangements and other
conditions customary for a facility of this nature.
Security:
Key terms:
Conditions Precedent:
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
It is expected that the Consolidated Entity will continue its exploration, mining, processing, production and
marketing of tin and copper concentrates in Australia, and will continue the development of its nickel
exploration projects. These are described in more detail in the Review of Operations on page 13.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Consolidated Entity's operations are subject to the relevant environmental protection legislation
(Commonwealth and State legislation). The Consolidated Entity holds various environmental licenses
issued under these laws, to regulate its mining and exploration activities in Australia. These licenses
include conditions and regulations in relation to specifying limits on discharges into the air, surface water
and groundwater, rehabilitation of areas disturbed during the course of mining and exploration activities
and the storage of hazardous substances.
All environmental performance obligations are monitored by the board of directors and subjected from
time to time to Government agency audits and site inspections. There have been no material breaches of
the Consolidated Entity’s licenses and all mining and exploration activities have been undertaken in
compliance with the relevant environmental regulations.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company paid a premium in respect of a contract of insurance to insure
Directors and officers of the Company and related bodies corporate against those liabilities for which
insurance is permitted under section 199B of the Corporations Act 2001. Disclosure of the nature of the
liabilities and the amount of the premium is prohibited under the conditions of the contract of insurance.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part
of the terms of its audit engagement agreement against claims by third parties arising from the audit (for
an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the
financial year.
- 16 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited)
Contents
1. Remuneration report overview
2. Remuneration governance
3. Non-Executive Director remuneration
4. Executive remuneration
5. Performance and executive remuneration outcomes
6. Executive employment arrangements
7. Additional statutory disclosures
1. REMUNERATION REPORT OVERVIEW
The Directors of Metals X present the Remuneration Report (“the Report”) for the Consolidated Entity for
the year ended 30 June 2019 (“FY2019”). This Report forms part of the Director’s Report and has been
audited in accordance with section 300A of the Corporations Act 2001 and its regulations.
The Report details the remuneration arrangements for Metals X’s Key Management Personnel (“KMP”):
Non-Executive Directors (“NEDs”)
Managing Director (“MD”), executive directors and senior executives (collectively the executives).
KMP are those who directly or indirectly, have authority and responsibility for planning, directing and
controlling the major activities of the Consolidated Entity and includes all directors of the parent entity.
Details of KMP of the Consolidated Entity are set out below:
Name
Position
Appointed
Resigned
(i)
Non-Executive Directors
PJ Newton
SD Heggen
M Jerkovic
DM Marantelli 1
Y Zhang
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
(ii) Executive Directors
DM Marantelli 1
WS Hallam
SD Robinson 2
(iii) Senior Executives
Managing Director
Managing Director
Executive Director
14 Dec 2012
25 Oct 2012
1 May 2017
3 Sep 2018
9 Jan 2017
-
-
-
12 Nov 2018
-
12 Nov 2018
1 Mar 2005
1 Jul 2005
-
12 Nov 2018
3 Sep 2018
CC Baird
RL Cole
JR Croall
AH King
M Recklies
SB Rigby
SD Robinson 2
FJ Van Maanen
EGM – Mining & Technical
General Manager – Nifty
General Manager – Nifty
Chief Operating Officer
General Manager - Renison
EGM – Geology & Business Development
EGM – Projects & Planning
CFO & Company Secretary
3 Sep 2018
23 Aug 2018
2 Nov 2017
24 Feb 2014
24 Mar 2017
5 Jun 2018
3 Sep 2018
1 Jul 2005
-
-
6 July 2018
12 Nov 2018
-
-
-
-
1. DM Marantelli was appointed as a Non-executive Director on 3 September 2018 and was subsequently employed as an
2.
Executive Director on 12 November 2018.
SD Robinson resigned as an Executive Director on 3 September and was subsequently employed as the EGM - Projects and
Planning.
2. REMUNERATION GOVERNANCE
Remuneration and Nomination Committee Responsibility
The remuneration and nomination committee is a subcommittee of the Board. It is primarily responsible
for making recommendations to the Board on:
Non-Executive Director fees;
Executive remuneration (directors and senior executives); and
The executive remuneration framework and incentive plan policies.
- 17 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
2. REMUNERATION GOVERNANCE (CONTINUED)
The remuneration and nomination committee assesses the appropriateness of the nature and amount of
remuneration of non-executive directors and executives on a periodic basis by reference to relevant
employment market conditions with the overall objective of ensuring maximum stakeholder benefit from
the retention of a high performing director and executive team.
The composition of the remuneration and nomination committee is set out on page 31 of this annual
report.
Use of remuneration consultants
In forming remuneration recommendations, each year the Remuneration and Nomination Committee (“the
Committee”) obtains and considers industry specific independent data and professional advice as
appropriate. All reports and professional advice relating to the MD’s remuneration are commissioned and
received directly by the Committee.
The Committee did not engage a remuneration consultant in FY2019. In accordance with the Committee’s
charter, where a remuneration consultant is appointed in relation to remuneration of KMP, the Committee
directly engages the consultant and receives the reports of the consultant. The Committee has delegated
authority to the MD for approving remuneration recommendations for employees other than KMP, within
the parameters of approved remuneration levels and structures.
During the FY2018 period the Committee approved the engagement of BDO Remuneration and Reward
Pty Ltd (“BDO”) to review and provide recommendations on the Consolidated Entity’s executive
remuneration framework and policies.
Both BDO and the Committee are satisfied the advice received from BDO was free from undue influence
from the KMP to whom the remuneration recommendations apply.
The fees paid to BDO for the remuneration recommendations in FY2018 were $27,250.
Outcome of BDO Remuneration Review
Following the BDO remuneration review the following changes to the remuneration structure were made
during FY2018:
The introduction of a formal short term incentive (“STI”) policy that has the objective of linking executive
remuneration with the achievement of the Consolidated Entity’s key operational and financial targets. The
STI will be an annual “at risk” component of remuneration for executives that is payable in cash based on
performance against key performance indicators (refer to section 4).
Following the BDO remuneration review the following changes to the remuneration structure were made
in FY2019:
The long term incentive policy was amended to focus the efforts of executives on long term value creation
to further align management’s interests with those of the shareholders. The LTI is an annual “at risk”
component of remuneration for executives that is payable in performance options (being an option to
acquire an ordinary share in Metals X for nil consideration).
The MD will have a maximum LTI opportunity of 80% of fixed remuneration and other executives have a
maximum LTI opportunity of 60% of fixed remuneration. The number of performance options to be granted
will be determined by dividing the LTI remuneration dollar amount by the volume weighted average price
of Metals X shares traded on the ASX during the 5 day trading period prior to the day of the grant.
As a transitional arrangement, for the options granted in FY2019, the LTI performance period was treated
as two tranches:
50% of the performance options will be performance tested against the LTI performance measures
for the period 1 July 2018 to 30 June 2020.
50% of the performance options will be performance tested against the LTI performance measures
for the period 1 July 2018 to 30 June 2021.
All subsequent grants of performance options will have a three year performance period. There will be no
opportunity for re-testing. Any performance options that do not vest will lapse after testing. Executives are
able to exercise any performance options that vest for up to two years after the vesting date before the
vested performance options lapse.
- 18 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Performance options will be subject to the following performance conditions:
Relative Total Shareholder Return (“Relative TSR”) (50%); and
Return on Capital Employed (“ROCE”) (50%).
Relative Total Shareholder Return Performance Condition
Total Shareholder Return is the percentage growth in shareholder value, which takes into account factors
such as changes in share price and dividends paid. The Relative TSR performance condition measures
Metals X’s ability to deliver superior shareholder returns relative to its peer companies by comparing the
TSR performance of Metals X against the performance of the S&P/ASX Metals and Mining Index.
The Board considers that TSR is an appropriate performance hurdle because it ensures that a proportion
of each participant’s remuneration is explicitly linked to shareholder value and ensures that participants
only receive a benefit where there is a corresponding direct benefit to shareholders.
The vesting schedule for the Relative TSR measure is as follows:
Relative TSR Performance
% Contribution to the Number of
Employee Options to Vest
Below Index
Equal to the Index
0%
50%
Above Index and below 15% above the Index
Pro-rata from 50% to 100%
15% above the Index
100%
Return on Capital Employed Performance Condition
ROCE measures the efficiency with which management uses capital in seeking to increase shareholder
value.
The Board considers ROCE as an appropriate measure as it focuses executives on generating earnings
that efficiently use shareholder capital as the reinvestment of earnings.
The vesting schedule for the ROCE measure is as follows:
ROCE Performance
% Contribution to the Number of
Employee Options to Vest
Less than or equal to the average annual weighted average cost
of capital (“WACC”)
WACC (calculated as above ) + 3%
0%
50%
WACC (calculated as above ) + between 3% and 6%
Pro-rata from 50% to 100%
WACC (calculated as above ) + 6%
100%
3. NON-EXECUTIVE DIRECTOR REMUNERATION
NED Remuneration Policy
Metals X’s NED fee policy is designed to attract and retain high calibre directors who can discharge the
roles and responsibilities required in terms of good governance, strong oversight, independence and
objectivity.
The Company’s constitution and the ASX listing rules specify that the NED fee pool limit, shall be approved
periodically by shareholders. The last determination was at the annual general meeting (“AGM”) held on
26 November 2014 when shareholders approved an aggregate fee pool of $600,000 per year.
The amount of the aggregate remuneration sought to be approved by shareholders and the manner in
which it is paid to NEDs is reviewed annually against comparable companies. The Board also considers
advice from external advisors when undertaking the review.
Non-executive directors have long been encouraged by the Board to hold shares in the Company and
align their interests with the Company’s shareholders. The shares are purchased by the directors at the
prevailing market share price.
- 19 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
3. NON-EXECUTIVE DIRECTOR REMUNERATION (continued)
NED Remuneration Structure
The remuneration of NEDs consists of director’s fees. There is no scheme to provide retirement benefits
to NEDs other than statutory superannuation. NEDs do not participate in any performance related
incentive programs.
Fees paid to NEDs cover all activities associated with their role on the Board and any sub-committees.
No additional fees are paid to NEDs for being a Chair or Member of a sub-committee. However, NEDs
are entitled to fees or other amounts as the Board determines where they perform special duties or
otherwise perform extra services on behalf of the Company. They may also be reimbursed for out of
pocket expenses incurred as a result of their Directorships.
4. EXECUTIVE REMUNERATION
Executive Remuneration Policy
In determining executive remuneration, the Board aims to ensure that remuneration practices are:
competitive and reasonable, enabling the Company to attract and retain high calibre talent;
aligned to the Company’s strategic and business objectives and the creation of shareholder value;
transparent and easily understood; and
acceptable to shareholders.
The Company’s approach to remuneration ensures that remuneration is competitive, performance-
focused, clearly links appropriate reward with desired business performance, and is simple to administer
and understand by executives and shareholders.
In line with the remuneration policy, remuneration levels are reviewed annually to ensure alignment to the
market and the Company’s stated objectives.
Executive Remuneration Structure
The Company’s remuneration structure provides for a combination of fixed and variable pay with the
following components:
fixed remuneration;
short-term incentives (“STI”); and
long-term incentives (“LTI”).
In accordance with the Company’s objective to ensure that executive remuneration is aligned to Company
performance, a portion of executives’ remuneration is placed “at risk”. The relative proportion of FY2019
total remuneration packages split between the fixed and variable remuneration is shown below:
Executive
Fixed Remuneration
Managing Director
Other Executives
43%
50%
STI
22%
20%
LTI
35%
30%
Elements of remuneration
Fixed remuneration
Fixed remuneration consists of base salary, superannuation and other non-monetary benefits and is
designed to reward for:
the scope of the executive’s role;
the executive’s skills, experience and qualifications; and
individual performance.
- 20 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
4. EXECUTIVE REMUNERATION (continued)
Short Term Incentive arrangements
Under the STI, all executives have the opportunity to earn an annual incentive award which is delivered
in cash. The STI recognises and rewards annual performance.
How is it paid?
Any STI award is paid in cash after the assessment of annual performance.
How
executives earn?
much
can
In FY2019, the MD had a maximum STI opportunity of 50% of total fixed
remuneration and other executives had a maximum STI opportunity of 40%
of total fixed remuneration.
is performance
How
measured?
A combination of personal and business Key Performance Indicators (“KPIs”)
are chosen to reflect the core drivers of short term performance and also to
provide a framework for delivering sustainable value to the Consolidated
Entity and its shareholders. Robust threshold, target and maximum targets
are established for all KPIs to drive high levels of personal and business
performance. The annual budget generally forms the basis for the target
performance set by the Board. The specific KPIs and weightings may change
from year to year to best reflect the priorities and critical success factors of
the Company.
The following KPIs, weightings and measures were chosen for the 2019
financial year:
•
KPI 1: All-in-sustaining cost (“AISC”) per tonne (25%)
Threshold - 5% above budget, Target – equal to budget and Maximum – 5% below
budget;
KPI 2: Production (tonnes of copper and tin metal) (25%)
Threshold - 10% below budget, Target – equal to budget and Maximum – 10% above
budget;
KPI 3: Safety performance (25%)
Threshold - 5% below prior year TRIFR, Target – 10% below prior year TRIFR and
Maximum – 15% below prior year TRIFR; and
KPI 4: Board discretion based on performance of the Consolidated
Entity and/or the individual (25%).
•
•
•
When is it paid?
The STI award is determined after the end of the financial year following a
review of performance over the year against the STI performance measures
by the Remuneration and Nomination Committee. The Board approves the
final STI award based on this assessment of performance and the award is
paid in cash up to three months after the end of the performance period.
What happens if an
executive leaves?
Where an executive ceases to be an employee of the Consolidated Entity:
•
due to resignation or termination for cause, before the end of the
financial year, no STI is awarded for that year; or
due to redundancy, ill health, death or other circumstances approved by
the Board, the executive will be entitled to a pro-rata cash payment
based on assessment of performance up to the date of ceasing
employment for that year.
•
unless the Board determines otherwise.
What happens if there
is a change of control
In the event of a change of control, a pro-rata cash payment will be made
based on assessment of performance up to the date of the change of control
(subject to Board discretion).
- 21 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
4. EXECUTIVE REMUNERATION (continued)
Long Term Incentive arrangements
Under the LTI plan, annual grants of performance options are made to executives to align remuneration
with the creation of shareholder value over the long-term.
How is it paid?
How
executives earn?
much
can
is performance
How
measured?
Executives are eligible to receive performance options.
In FY2019 options issued were performance options, being an option to
acquire an ordinary share in Metals X for nil consideration.
The MD had a maximum LTI opportunity of 80% of total fixed remuneration
and other executives had a maximum LTI opportunity of 50% of total fixed
remuneration.
The number of performance options to be granted will be determined by
dividing the LTI remuneration dollar amount by the volume weighted average
price of Metals X shares traded on the ASX during the 5 day trading period
prior to the day of the grant.
Performance options are subject to performance measures over a two and
three year performance period.
The performance measures are:
•
•
Refer to note 30 for vesting schedules of the performance measures.
Relative Total Shareholder Return (50%); and
Return on Capital Employed (50%).
When is performance
measured?
Performance is measured at the end of the performance periods.
The performance periods is 1 July 2019 to 30 June 2022.
What happens if an
executive leaves?
Where an executive ceases to be an employee of the Consolidated Entity:
•
•
•
due to resignation or termination for cause, then any unvested
performance options will automatically lapse on the date of the
cessation of employment; or
due to redundancy, ill health, death or other circumstances approved by
the Board, the executive will generally be entitled to a pro-rata number
of unvested performance options based on achievement of the
performance measures over the performance period up to the date of
cessation of employment; and
where an employee ceases employment after the vesting of their
performance options, the performance options automatically lapse after
three months of cessation of employment.
unless the Board determines otherwise.
What happens if there
is a change of control
In the event of a change of control, the performance period end date will be
brought forward to the date of the change of control and performance options
will vest based on performance over the shortened period (subject to board
discretion).
Are executives eligible
for dividends
Executives are not eligible to receive dividends on unvested performance
options.
Sign on payments
In addition to fixed remuneration, STI and LTI, the Board may determine, from time to time, to award sign
on payments to new executives.
Mr Marantelli received a share-based sign on payment of 3,000,000 options. In January 2019, after
receiving approval from shareholders at an Extraordinary General Meeting, the options were granted to
Mr Marantelli. The options will vest over a three year period, as follows: 1,000,000 options on 22 January
2020, 1,000,000 options on 22 January 2021 and 1,000,000 options on 22 January 2022 (refer to Table
3 for further details). There are no other performance conditions as this was designed to attract and retain
talent.
- 22 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
5. PERFORMANCE AND EXECUTIVE REMUNERATION OUTCOMES
Remuneration earned by executives in 2019
The actual remuneration earned by executives in the year ended 30 June 2019 is set out in Table 1. This
provides shareholders with a view of the remuneration paid to executives for performance in FY2019.
STI performance and outcomes
A combination of financial and non-financial measures were used to measure performance for STI
rewards. Company performance against those measures is as follows for FY2019:
Metric
Weighting
Actuals
Achievement
Weighted
Achievement
AISC
Production
Copper – 12.5%
Tin – 12.5%
Copper - below threshold
Tin - between threshold
and target
Copper – 0%
Tin – 28%
Copper – 12.5%
Tin – 12.5%
Copper - below threshold
Tin – between target and
maximum
Copper – 0%
Tin – 76%
Reduction in total
recordable injury
frequency rate (TRIFR)
Copper – 12.5%
Tin – 12.5%
Copper - below threshold
Tin - between threshold
and target
Copper – 0%
Tin – 32%
Board Discretion
25%
Below threshold
0%
Percentage of Maximum STI achieved
0%
3.5%
0%
9.5%
0%
4.0%
0%
17%
The Board has absolute discretion to reduce, withhold or cancel the final STI award based on assessment
of performance of the Consolidated Entity and/or the individual.
Based on this assessment, the STI payments for FY2019 to executives were recommended as detailed
in the following table:
Name
Position
Maximum STI
Awardable
$
Achieved
STI
%
DM Marantelli
Managing Director
RL Cole
CC Baird
SB Rigby
General Manager – Nifty
EGM – Mining & Technical
EGM – Geology & Business
Development
SD Robinson
EGM – Projects & Planning
FJ Van Maanen
Chief Financial Officer & Company
Secretary
200,105 *
148,920
147,128 *
142,350
164,250
160,000
17%
-
17%
17%
17%
17%
STI
Awarded
$
34,703
-
25,515
24,687
28,485
27,748
* Maximum STI awardable is calculated on a pro-rata basis from date of employment.
The STI payments, subject to Board approval, are expected to be paid in September 2019.
LTI performance and outcomes
LTI performance options granted to the Executives in FY2018 are subject to achievement of performance
measures over a two and three year vesting period ending on 30 June 2020 and 30 June 2021
respectively.
LTI performance options granted to Executives in FY2019 will be subject to achievement of performance
measures a three year vesting period ending on 30 June 2022.
No performance options vested during the period.
For further details of options granted and vested refer to Table 3 below.
- 23 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
5. PERFORMANCE AND EXECUTIVE REMUNERATION OUTCOMES (continued)
Clawback of remuneration
In the event of serious misconduct or material misstatement in the Consolidated Entity’s financial
statements, the board has the discretion to reduce, cancel or clawback any unvested short term incentives
or long term incentives.
Share trading policy
The Metals X trading policy applies to all non-executive directors and executives. The policy prohibits
employees from dealing in Metals X securities while in possession of material non-public information
relevant to the Consolidated Entity. Executives must not enter into any hedging arrangements over
unvested long term incentives under the Consolidated Entity’s long term incentive plan. The Consolidated
Entity would consider a breach of this policy as gross misconduct, which may lead to disciplinary action
and potentially dismissal.
Overview of company performance
The table below sets out information about Metals X’s earnings and movements in shareholder wealth for
the past five years up to and including the current financial year. In accordance with the transitional
provisions of AASB 9 and AASB 15, the comparative information below has not been restated.
30 June
2015 *
30 June
2016 *
30 June
2017
30 June
2018
30 June
2019
Closing share price
Profit/(loss) per share (cents)
Net tangible assets per share
Total Shareholder Return
Dividend paid per shares (cents)
$1.38
9.87
$0.72
35%
2.950
* Pre demerger of Westgold Resources Limited.
$1.40
-5.21
$0.82
4%
-
$0.67
-17.43
$0.27
12%
1.000
$0.80
-4.30
$0.28
19%
0.000
$0.25
-17.17
$0.15
-69%
-
6. EXECUTIVE EMPLOYMENT ARRANGEMENTS
A summary of the key terms of employment agreements for executives is set out below. There is no fixed
term for executive service agreements and all executives are entitled to participate in the Company’s STI
and LTI plans. The Company may terminate employment agreements immediately for cause, in which the
executive is not entitled to any payment other than the value of fixed remuneration and accrued leave
entitlements up to the termination date.
Name
Base Salary
Superannuation
DM Marantelli (Managing
Director)
CC Baird (EGM – Mining &
Technical)
RL Cole (General Manager – Nifty
Copper Operations)
M Recklies (General Manager –
Renison Tin Operations) **
SB Rigby (EGM – Geology &
Business Development)
$550,000
$400,000
$340,000
$280,000 100%
$325,000
SD Robinson (Executive Director)
$375,000
FJ Van Maanen (Chief Financial
Officer & Company Secretary)
$365,297
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
Notice
Period
Termination
Payment
3 months
3 months
6 months
base salary
6 months
base salary
1 month
per NES *
1 month
per NES *
3 months
3 months
3 months
6 months
base salary
6 months
base salary
6 months
base salary
* NES are National Employment Standards as defined in the Fair Work Act 2009 (Cth).
** Mr Recklies is the General Manager of the 50% owned Renison Tin Operations Joint Venture. Metals X Limited is responsible
for 50% of Mr Recklies remuneration arrangements.
- 24 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
6. EXECUTIVE EMPLOYMENT ARRANGEMENTS (continued)
Table 1: Remuneration for the year ended 30 June 2019
Remuneration of key
management personnel of the
Consolidated Entity
Non-executive Directors
PJ Newton
SD Heggen
M Jerkovic
Y Zhang
Executive Directors
DM Marantelli 1
WS Hallam 2
Other key management personnel
CC Baird 3
RL Cole 3
JR Croall 2
AH King 2
M Recklies
SB Rigby 3
SD Robinson 4
FJ Van Maanen
Totals
Short Term
Post employment
Long term
benefits
Share based
payment
Termination
payments
Total
Salary and Fees
Cash Bonus
Non monetary
benefits
Superannuation
Employee
Entitlements
Options
%
Performance
related
110,000
80,000
80,000
80,000
350,000
368,019
213,508
333,333
286,784
6,624
127,435
153,846
326,555
393,128
395,982
2,605,214
2,955,214
-
-
-
-
-
34,703
-
-
-
-
-
-
-
5,059
25,515
4,609
-
-
-
25,278
24,687
28,485
27,748
166,416
166,416
-
-
44
-
3,068
9,167
11,421
33,368
33,368
10,450
7,600
7,600
7,600
33,250
34,962
48,613
31,667
27,245
5,538
28,444
17,017
31,023
25,410
17,021
266,940
300,190
-
-
-
-
-
34,449
10,642
19,302
34,170
(2,403)
1,277
7,256
24,450
21,171
67,934
218,248
218,248
-
-
-
-
-
125,676
199,389
45,893
39,009
(51,066)
(175,085)
-
31,551
162,658
157,102
535,127
535,127
-
-
-
-
-
-
407,695
-
-
51,667
94,232
-
-
-
120,450
87,600
87,600
87,600
383,250
597,809
884,906
460,319
387,208
10,360
76,347
203,397
441,334
640,019
-
553,594
677,208
4,378,907
553,594
4,762,157
-
-
-
-
27
23
16
10
(493)
(229)
12
13
30
27
1. DM Marantelli was appointed as a Non-executive Director on 3 September 2018 and was subsequently employed as an Executive Director on 12 November 2018.
2. WS Hallam and AH King both resigned on 12 November 2018 and JR Croall resigned on 6 July 2018.
3. CC Baird, RL Cole and SB Rigby were employed on 3 September 2018, 23 August 2018 and 5 June 2018 respectively.
4. SD Robinson resigned as an Executive Director on 3 September and was subsequently employed as the Executive General Manger-Projects and Planning.
- 25 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
6. EXECUTIVE EMPLOYMENT ARRANGEMENTS (continued)
Table 2: Remuneration for the year ended 30 June 2018
Remuneration of key management
personnel of the Consolidated Entity
Short Term
Post employment
Long term
benefits
Share based
payment
Total
Salary and Fees
Cash Bonus
Non monetary
benefits
Superannuation
Employee
Entitlements
Options
%
Performance
related
Non-executive Directors
PJ Newton
SD Heggen
M Jerkovic
Y Zhang
Executive Directors
WS Hallam
SD Robinson 1
Other key management personnel
JR Croall 2
AH King 3
MR Poepjes 4
M Recklies
FJ Van Maanen
Totals
110,000
80,000
80,000
80,000
350,000
478,700
385,625
204,679
350,000
245,980
141,544
312,954
2,119,482
2,469,482
-
-
-
-
-
127,716
83,293
-
117,740
-
14,565
70,996
414,310
414,310
-
-
-
-
-
7,321
8,426
-
163
4,341
9,932
9,466
39,649
39,649
10,450
7,600
7,600
7,600
33,250
25,000
25,000
19,445
37,050
20,879
14,830
19,300
161,504
194,754
-
-
-
-
-
2,732
1,768
-
2,344
-
-
1,766
8,610
8,610
-
-
-
-
-
120,450
87,600
87,600
87,600
383,250
498,225
185,544
1,139,694
689,656
-
290,007
56,695
-
290,007
1,320,478
224,124
797,304
327,895
180,871
704,489
4,064,033
1,320,478
4,447,283
-
-
-
-
55
39
-
51
17
8
51
1. SD Robinson was appointed as a Non-executive Director on 25 November 2016 and was subsequently employed as an Executive Director on 1 May 2017.
2. JR Croall was appointed on 2 November 2017 and resigned on 6 July 2018.
3. AH King received a $40,000 board discretionary cash bonus in addition to the FY2018 STI award of $77,740.
4. MR Poepjes resigned on 11 May 2018.
- 26 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
7. ADDITIONAL STATUTORY DISCLOSURES
This section sets out the additional disclosures required under the Corporations Act 2001.
Table 3: Options granted and vested during the year (Consolidated)
DM Marantelli 1
DM Marantelli 1
DM Marantelli 1
CC Baird
CC Baird
CC Baird
CC Baird
RL Cole
RL Cole
RL Cole
RL Cole
SB Rigby
SB Rigby
SB Rigby
SB Rigby
SD Robinson
SD Robinson
SD Robinson
SD Robinson
SD Robinson 2
FJ Van Maanen
FJ Van Maanen
FJ Van Maanen
FJ Van Maanen
FJ Van Maanen
WS Hallam 2
AH King 3
Year
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2018
2019
2019
2019
2019
2018
2018
2018
Options granted
during the year
(No.)
Performance options
granted during the
year (No.)
1,000,000
1,000,000
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,200,000
-
-
-
-
1,200,000
2,000,000
1,200,000
-
-
-
83,413
83,413
83,413
83,413
70,901
70,901
70,901
70,901
57,347
57,347
57,347
57,347
78,200
78,200
78,200
78,200
-
76,177
76,177
76,177
76,177
-
-
-
Grant date
25 Jan 2019
25 Jan 2019
25 Jan 2019
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
22-Nov-17
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
23-Nov-17
22-Nov-17
23-Nov-17
Fair value per
option at
grant date
Value of
options at
grant date $
Vesting date
Exercise
price
Expiry dated
Options
vesting during
the period
Options
lapsed during
the year
124,410
145,044
163,212
21,270
33,365
22,522
33,365
18,080
28,360
19,143
28,360
14,623
22,939
15,484
22,939
19,941
31,280
21,114
31,280
305,178
19,425
30,471
20,568
30,471
291,808
508,630
291,808
22 Jan 2020
22 Jan 2021
22 Jan 2022
1 Jul 2020
1 Jul 2020
1 Jul 2021
1 Jul 2021
1 Jul 2020
1 Jul 2020
1 Jul 2021
1 Jul 2021
1 Jul 2020
1 Jul 2020
1 Jul 2021
1 Jul 2021
1 Jul 2020
1 Jul 2020
1 Jul 2021
1 Jul 2021
22-Nov-18
1 Jul 2020
1 Jul 2020
1 Jul 2021
1 Jul 2021
23-Nov-18
22-Nov-18
23-Nov-18
$0.54
$0.56
$0.58
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$1.32
$0.00
$0.00
$0.00
$0.00
$1.32
$1.32
$1.32
22 Jan 2022
22 Jan 2023
22 Jan 2024
30 Jun 2022
30 Jun 2022
30 Jun 2023
30 Jun 2023
30 Jun 2022
30 Jun 2022
30 Jun 2023
30 Jun 2023
30 Jun 2022
30 Jun 2022
30 Jun 2023
30 Jun 2023
30 Jun 2022
30 Jun 2022
30 Jun 2023
30 Jun 2023
30-Nov-20
30 Jun 2022
30 Jun 2022
30 Jun 2023
30 Jun 2023
30-Nov-20
30-Nov-20
30-Nov-20
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,200,000
-
-
-
-
1,200,000
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,200,000
$0.12
$0.15
$0.16
$0.26
$0.40
$0.27
$0.40
$0.26
$0.40
$0.27
$0.40
$0.26
$0.40
$0.27
$0.40
$0.26
$0.40
$0.27
$0.40
$0.25
$0.26
$0.40
$0.27
$0.40
$0.24
$0.25
$0.24
- 27 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
7. ADDITIONAL STATUTORY DISCLOSURES (continued)
1. Grant of options was subject to shareholder approval at an Extraordinary General Meeting, which
occurred on 22 January 2019.
2. Grant of options was subject to shareholder approval at the Annual General Meeting, which occurred
on 22 November 2017.
3. During the period 1,200,000 options issued to AH King lapsed upon his resignation as the options had
not vested at that date and were subsequently forfeited.
For details on vesting conditions and valuation of the options, including models and assumptions used,
please refer to note 30.
The value of the share based payments granted during the period is recognised in compensation over the
vesting period of the grant.
Table 4: Shareholdings of key management personnel (including nominees)
Ordinary shares held in Metals X Limited (number)
Balance held
at 30 June
2018
On exercise
of options
Net change
other ^
Balance
held at 30
June 2019
Directors
PJ Newton
WS Hallam
SD Heggen
M Jerkovic
DM Marantelli
Y Zhang
Executives
CC Baird
RL Cole
JR Croall
AH King
M Recklies
SB Rigby
SD Robinson
FJ Van Maanen
14,070,217
2,142,928
6,689
367,500
-
-
-
-
-
71,072
1,487
-
45,000
521,041
Total
17,225,934
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
(2,142,928)
-
550,000
-
-
16,070,217
-
6,689
917,500
-
-
123,000
-
-
(71,072)
15,000
20,000
84,000
-
123,000
-
-
-
16,487
20,000
129,000
521,041
578,000
17,803,934
^ Represents acquisitions and disposals of shares on market and shares issued under the
dividend reinvestment plan, as well as departures and appointments.
- 28 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
7. ADDITIONAL STATUTORY DISCLOSURES (continued)
Table 5: Share option holdings of key management personnel (including nominees)
Share options
balance at end of
period 30 June 2018
Share options
granted as
remuneration
Share options lapsed
during the period and
forfeited
Share options
balance at end of
period 30 June 2019
Share options
not vested and
not exercisable
Share options
vested and
exercisable
-
4,000,000
-
-
-
-
-
-
-
2,400,000
-
-
1,200,000
2,400,000
-
-
-
-
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,400,000)
-
-
-
-
-
4,000,000
-
-
3,000,000
-
-
-
-
-
-
-
1,200,000
2,400,000
-
-
-
-
3,000,000
-
-
-
-
-
-
-
-
-
-
4,000,000
-
-
-
-
-
-
-
-
-
-
1,200,000
2,400,000
Directors
PJ Newton
WS Hallam
SD Heggen
M Jerkovic
DM Marantelli
Y Zhang
Executives
CC Baird
RL Cole
JR Croall
AH King
M Recklies
SB Rigby
SD Robinson
FJ Van Maanen
Total
10,000,000
3,000,000
(2,400,000)
10,600,000
3,000,000
7,600,000
^ Options lapsed during the period and forfeited.
- 29 -
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
7. ADDITIONAL STATUTORY DISCLOSURES (continued)
Table 6: Performance option holdings of key management personnel (including nominees)
Performance options
balance at end of
period 30 June 2018
Performance
options granted
as remuneration
Performance options
lapsed during the
period and forfeited
Performance options
balance at end of
period 30 June 2019
Performance
options not vested
and not
exercisable
Performance
options vested
and exercisable
Directors
PJ Newton
WS Hallam
SD Heggen
M Jerkovic
DM Marantelli
Y Zhang
Executives
CC Baird
RL Cole
JR Croall
AH King
M Recklies
SB Rigby
SD Robinson
FJ Van Maanen
Total
End of Audited Remuneration Report.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
333,654
283,606
-
-
-
229,388
312,800
304,708
1,464,156
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
333,654
283,606
-
-
-
229,388
312,800
304,708
-
-
-
-
-
-
333,654
283,606
-
-
-
229,388
312,800
304,708
1,464,156
1,464,156
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 30 -
DIRECTORS’ REPORT (continued)
DIRECTORS’ MEETINGS
The number of meetings of Directors’ (including meetings of committees of Directors) held during the
year and the number of meetings attended by each Director was as follows:
Directors
Meetings
Audit
Committee
Remuneration &
Nomination
Committee
No of meetings held:
No of meetings attended:
WS Hallam
SD Heggen
M Jerkovic
PJ Newton
DM Marantelli
SD Robinson
Y Zhang
9
4
9
9
9
6
3
9
2
-
2
2
2
-
-
-
All Directors were eligible to attend all meetings held except for the following:
Mr Hallam who resigned on 12 November 2019;
Mr Robinson who resigned on 3 September 2019.
Mr Marantelli who was appointed on 3 September 2019; and
3
-
3
3
3
-
-
-
COMMITTEE MEMBERSHIP
As at the date of this report, the Company had an Audit Committee and a Remuneration and Nomination
Committee of the Board of Directors.
Members acting on the committees of the Board during the year were:
Audit Committee
Remuneration and Nomination Committee
SD Heggen *
PJ Newton
M Jerkovic
Notes:
PJ Newton *
SD Heggen
M Jerkovic
* Designates the Chairman of the Committee.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors
of the Company support and have adhered to the principles of Corporate Governance. The Company’s
corporate governance statement is available at the Company’s website at http://metalsx.com.au/about
us/corporate governance.
- 31 -
DIRECTORS’ REPORT (continued)
AUDITOR’S INDEPENDENCE AND NON-AUDIT SERVICES
AUDITOR INDEPENDENCE
The Directors’ received the Independence Declaration, as set out on page 33, from Ernst & Young.
NON-AUDIT SERVICES
The following non-audit services were provided by the entity’s auditor, Ernst & Young. The directors are
satisfied that the provision of non-audit is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service
provided means that auditor independence was not compromised.
Ernst & Young received or are due to receive the following amounts for the provision of non-audit
services (refer to note 32):
Tax compliance services
$
54,500
Signed in accordance with a resolution of the Directors.
DM Marantelli
Managing Director
Perth, 29 August 2019
- 32 -
AUDITOR’S INDEPENDENCE DECLARATION
- 33 -
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2019
Continuing operations
Revenue
Cost of sales
Gross loss
Other income
Administration expenses
Gain/(loss) on derivative instruments
Finance costs
Fair value change in financial assets
Impairment loss on available-for-sale financial assets
Share-based payments
Fair value loss on provisionally priced trade receivables
Impairment loss on assets
Exploration and evaluation expenditure written off
Loss before income tax from continuing operations
Notes
2019
2018
5
7(a)
6
7(b)
7(c)
7(d)
7(e)
30
12
39, 19
20
204,722,012
(238,146,757)
(33,424,745)
209,901,427
(217,533,046)
(7,631,619)
919,945
(6,732,351)
4,387,238
(1,472,286)
(4,422,234)
-
(693,929)
(4,760,857)
(64,199,644)
(6,569,771)
(116,968,634)
1,817,195
(4,478,838)
(10,364,135)
(1,469,351)
(47,300)
(1,748,370)
(2,019,289)
-
(239,761)
(115,718)
(26,297,186)
Income tax expense
Loss for the period from continuing operations
8
-
(116,968,634)
-
(26,297,186)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Changes in the fair value of available-for-sale financial assets, net
of tax
Other comprehensive loss for the period, net of tax
Total comprehensive loss for the period
Loss attributable to:
Members of the parent
Total comprehensive loss attributable to:
Members of the parent
-
-
(116,968,634)
-
-
(26,297,186)
(116,968,634)
(26,297,186)
(116,968,634)
(26,297,186)
(116,968,634)
(26,297,186)
(116,968,634)
(26,297,186)
Loss per share for the loss attributable to the ordinary equity
holders of the parent (cents per share)
Basic loss per share
Diluted loss per share
9
9
(17.17)
(17.17)
(4.30)
(4.30)
- 34 -
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS
AT 30 JUNE 2019
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
NON-CURRENT ASSETS
Other financial assets
Derivative financial instruments
Available-for-sale financial assets
Financial assets at fair value through profit and loss
Property, plant and equipment
Mine properties and development costs
Exploration and evaluation expenditure
Total non-current assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Derivative financial instruments
Provisions
Interest bearing loans and borrowings
Total current liabilities
NON-CURRENT LIABILITIES
Provisions
Interest bearing loans and borrowings
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Accumulated losses
Share based payments reserve
Fair value reserve
TOTAL EQUITY
Notes
2019
2018
11
12
13
14
15
16
17
17
18
19
20
21
22
23
25
24
26
27
28
29
29
11,364,399
16,545,008
45,858,778
2,455,368
76,223,553
31,234,845
13,676,176
55,278,112
1,421,373
101,610,506
10,771,569
44,850
-
243,586
46,465,692
42,547,133
10,178,774
110,251,604
186,475,157
10,311,569
82,950
9,170,714
-
48,585,729
80,287,603
11,242,392
159,680,957
261,291,463
25,441,824
-
7,817,701
5,043,404
38,302,929
31,686,792
1,078,251
6,752,654
4,848,201
44,365,898
42,268,613
4,310,335
46,578,948
84,881,877
101,593,280
40,953,035
5,522,351
46,475,386
90,841,284
170,450,179
302,004,550
(228,455,539)
28,044,269
-
101,593,280
254,586,744
(115,249,072)
27,350,340
3,762,167
170,450,179
- 35 -
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE
YEAR ENDED 30 JUNE 2019
OPERATING ACTIVITIES
Receipts from customers
Interest received
Other income
Payments to suppliers and employees
Interest paid
Notes
2019
2018
201,635,495
229,168,725
816,179
97,376
702,626
472,471
(217,168,988)
(202,568,449)
(541,462)
(479,543)
Net cash flows (used in)/from operating activities
11
(15,161,400)
27,295,830
INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for mine properties and development
Payments for exploration and evaluation
Proceeds from sale of property, plant and equipment
Payments for equity instruments
Payment for derivatives held for trading
Proceeds from sale of equity instruments
Net cash flows used in investing activities
FINANCING ACTIVITIES
Payment of finance lease liabilities
Payments for dividends
Proceeds from share issue
Payments for share issue costs
Payments for performance bond facility
(10,845,722)
(21,011,277)
(34,516,083)
(10,427,201)
(5,506,154)
(6,465,944)
15,425
664,621
-
-
(1,618,306)
(31,250)
4,542,993
-
(46,309,541)
(38,889,357)
(5,351,548)
(5,763)
50,000,000
(2,582,194)
(460,000)
(3,831,333)
(4,530,084)
532,000
(13,861)
546,480
Net cash flows from/(used in) financing activities
41,600,495
(7,296,798)
Net increase/(decrease) in cash and cash equivalents
(19,870,446)
(18,890,325)
Cash and cash equivalents at the beginning of the financial period
31,234,845
50,125,170
Cash and cash equivalents at the end of the period
11
11,364,399
31,234,845
- 36 -
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
30 JUNE 2019
2018
At 1 July 2017
Profit for the year
Other comprehensive income, net of tax
Total comprehensive (loss)/profit for the year net of tax
Transactions with owners in their capacity as owners
Dividend paid
Share based payments
Issue of share capital
Share issue costs
At 30 June 2018
2019
Issued capital
Accumulated
losses
Share based
payments
reserve
Fair value
reserves
Total Equity
252,511,413
(82,858,477)
25,331,051
3,762,167
198,746,154
-
-
-
(26,297,186)
-
(26,297,186)
-
-
-
-
-
2,089,192
(13,861)
(6,093,409)
-
-
-
2,019,289
-
-
-
-
-
-
-
-
-
-
(26,297,186)
-
(26,297,186)
(6,093,409)
2,019,289
2,089,192
(13,861)
254,586,744
(115,249,072)
27,350,340
3,762,167
170,450,179
At 1 July 2018 as previous stated
254,586,744
(115,249,072)
27,350,340
3,762,167
170,450,179
New accounting standards adjustment to opening balances (note 2(e))
-
3,762,167
-
(3,762,167)
-
Restated at 1 July 2018
Loss for the year
Other comprehensive income, net of tax
Total comprehensive (loss)/profit for the year net of tax
Transactions with owners in their capacity as owners
Share based payments
Issue of share capital
Share issue costs
At 30 June 2019
254,586,744
(111,486,905)
27,350,340
-
-
-
(116,968,634)
-
(116,968,634)
-
-
-
-
50,000,000
(2,582,194)
-
-
-
693,929
-
-
302,004,550
(228,455,539)
28,044,269
-
-
-
-
-
-
-
-
170,450,179
(116,968,634)
-
(116,968,634)
693,929
50,000,000
(2,582,194)
101,593,280
- 37 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
1. CORPORATE INFORMATION
The financial report of Metals X Limited for the year ended 30 June 2019 was authorised for issue in accordance
with a resolution of the Directors on 22 August 2019.
Metals X Limited (“the Company or the Parent”) is a for profit company limited by shares incorporated in Australia
whose shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Consolidated Entity are described in the Directors’
Report.
The address of the registered office is Level 5, 197 St Georges Terrace, Perth WA 6000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001 and Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board.
The financial report has been prepared on a historical cost basis, except for certain financial assets measured at
fair value through profit and loss.
The financial report is presented in Australian dollars.
(b) Statement of compliance
The financial report complies with Australian Accounting Standards as issued by the Australian Accounting
Standards Board which include International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
(c) Going concern basis of preparation
The Consolidated Entity incurred a net loss after income tax of $116,968,634 for the year ended 30 June 2019
(2018: $26,297,186) which includes an impairment loss on assets of $64,199,644 (2018: $239,761) and a net
cash outflow of $19,870,446 (2018: outflow $18,890,325) which includes proceeds from share issue of
$50,000,000 (2018: $532,000). As at 30 June 2019 the Consolidated Entity had cash and cash equivalents of
$11,364,399 (2018: $31,234,845) and a net current asset surplus of $37,920,624 (2018: $57,244,608 surplus).
The Consolidated Entity’s available cash on 29 August 2019 amounted to $15,545,194.
The Consolidated Entity will require further funding in future years to progress its projects. Based on the
Consolidated Entity’s cash flow forecast the Board of Directors is aware of the Consolidated Entity’s need to
access additional working capital in the future to enable the Consolidated Entity to continue its normal business
activities and to ensure the realisation of assets and extinguishment of liabilities as and when they fall due.
The Directors are satisfied that at the date of signing of the financial report, there are reasonable grounds to
believe that the Consolidated Entity will be able to continue to meet its debts as and when they fall due and that
it is appropriate for the financial statements to be prepared on a going concern basis. The Directors have based
this on the following pertinent matters:
•
The Directors regularly monitor the Consolidated Entity’s cash position and, on an on-going basis, consider
a number of strategic initiatives to ensure that adequate funding continues to be available.
•
•
•
The Consolidated Entity has entered into a loan facility with Citibank N.A. for $35,000,000 (refer to note 40
and ASX announcement dated 29 August 2019). The loan will be available for drawn down in early
September 2019.
The Directors have determined that future equity raisings will be required in the next financial year to provide
funding for the Consolidated Entity’s activities and to meet the Consolidated Entity’s objectives.
The Directors believe that future funding will be available to meet the Consolidated Entity’s objectives and
debts as and when they fall due.
Should the Consolidated Entity not achieve the matters set out above, there is uncertainty whether it will be able
to continue as a going concern and therefore whether it will be able to pay its debts as and when they fall due and
realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the
financial statements.
The financial report does not include any adjustments relating to the recoverability or classification of recorded
asset amounts, or to the amounts or classification of liabilities that might be necessary should the Consolidated
Entity not be able to continue as a going concern.
(d) New and amended accounting standards and interpretations
Since 1 July 2018, the Consolidated Entity has adopted all Accounting Standards and Interpretations effective
from 1 July 2018. Other than the changes described below, the accounting policies adopted are consistent with
those of the previous financial year. The Consolidated Entity has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet effective.
- 38 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e) Change in accounting policies and disclosures
The Consolidated Entity applied AASB 15 Revenue from Contracts with Customers (“AASB 15”) and AASB 9
Financial Instruments (“AASB 9”) for the first time from 1 July 2018. The nature and effect of these changes as a
result of the adoption of these new Accounting Standards are described below.
Several other new and amended Accounting Standards and Interpretations applied for the first time from 1 July 2018,
but did not have an impact on the consolidated financial statements of the Consolidated Entity and, hence, have not
been disclosed.
AASB 15
AASB 15 supersedes AASB 118 Revenue (“AASB 118”) and related Interpretations and it applies to all revenue
arising from contracts with customers, unless those contracts are in the scope of other standards. The new standard
establishes a five-step model to account for revenue arising from contracts with customers. Under AASB 15, revenue
is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for
transferring goods or services to a customer.
The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and
circumstances when applying each step of the model to contracts with their customers. The standard also specifies
the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.
The Consolidated Entity adopted AASB 15 using the modified retrospective method of adoption with the date of initial
application being 1 July 2018. The Consolidated Entity elected to apply the standard only to contracts that were not
completed contracts at the initial date of application. The comparative information has not been restated and
continues to be reported under AASB 118 and related interpretations.
Overall Impact
The Consolidated Entity’s revenue from contracts with customers comprises two main streams being the sale of tin
in concentrate and copper in concentrate. The Consolidated Entity undertook a comprehensive analysis of the impact
of the new revenue standard based on a review of the contractual terms of its principal revenue streams with the
primary focus being to understand whether the timing and amount of revenue recognised could differ under AASB
15.
Impact on statement of profit or loss and other comprehensive income
Tin and copper concentrate (metal in concentrate) sales: there were no changes identified with respect to the timing
of revenue recognition in relation to metal in concentrate. This is because control transfers to customers (mainly
smelting companies) at the date of shipment for copper concentrate and at the date of arrival at customer’s works
for tin concentrate, which is consistent with the point in time when risks and rewards passed under AASB 118. There
were some reclassification changes arising from metal in concentrate sales that have provisional pricing terms (refer
below).
There has been a change in the amount of revenue recognised for copper concentrate sold under Cost, Insurance
and Freight (“CIF”) Incoterms where the Consolidated Entity provides shipping services. This is because these
services are now considered to represent a separate performance obligation which is satisfied at a different point in
time from the sale of metal in concentrate. Therefore, some of the transaction price that was previously all allocated
to the sale of metal in concentrate under AASB 118 is now required to be allocated to this new performance obligation
under AASB 15 (see below for further discussion).
Provisionally priced commodity sales: the Consolidated Entity’s sales of metal in concentrate to customers contain
terms which allow for price adjustments based on the market price at the end of a quotational period (“QP”) stipulated
in the contract – these are referred to as “provisionally priced sales”.
Under previous accounting standards (AASB 118 and AASB 139 Financial Instruments: Recognition and
Measurement), provisionally priced sales were considered to contain an embedded derivative (“ED”). For receivables
relating to tin concentrate the Consolidated Entity accounted for the ED separately (“Tin ED”) from the host contract.
For receivables relating to copper concentrate, the Consolidated Entity measured the receivable, being the hybrid
instrument, at fair value through profit and loss. Revenue was initially recognised for these arrangements based on
the estimated forward price that the Consolidated Entity expected to receive at the end of the QP, determined at the
date the sale was initially recognised. Subsequent changes in the fair value of the Tin ED / copper concentrate
receivable were recognised in the Statement of Comprehensive Income each period until the end of the QP, and
were presented as part of ‘revenue’. Under AASB 15, the initial accounting for this revenue will remain unchanged in
that revenue will be recognised when control passes to the customer and will be measured at the amount to which
the Consolidated Entity expects to be entitled. This will be the estimate of the price expected to be received at the
end of the QP, i.e. the forward price. The Consolidated Entity will now present the fair value movements after the
date of sale in profit or loss as ‘fair value gains/losses on provisionally priced trade receivables’ and as such will not
be included in total revenue from contracts with customers.
- 39 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e)
Change in accounting policies and disclosures (continued)
AASB 15 (continued)
Assay and weight variations: the Consolidated Entity’s sales of metal in concentrate to customers contain terms,
which allow for assay and weight adjustments based on the final assay and weight results. Revenue is initially
recognised at the date control of the concentrate passes to the customer based on the most recently determined
estimate of metal in concentrate using the expected value approach based on initial internal assay and weight
results. Subsequent changes in value based on the customer’s final assay and weight results at the end of the QP
are recognised in revenue. The Consolidated Entity has determined that it is highly unlikely that a significant
reversal of the amount of revenue recognised will occur due to variations in assay and weight results.
Shipping services: the Consolidated Entity’s copper concentrate sales are sold under CIF Incoterms, whereby the
Consolidated Entity is responsible for providing shipping services after the date that it transfers control of the copper
concentrate to the customer. Under AASB 118, shipping services were not accounted for as separate services.
Instead, all of the revenue relating to the sale was recognised at the date of loading and presented as sales revenue.
Under AASB 15, it has been concluded that the provision of these services represents separate performance
obligations and the Consolidated Entity acts as principal.
As a result, under AASB 15, a portion of the transaction price is now required to be allocated to these performance
obligations and will be recognised over time, on a gross basis, as the services are provided. The Consolidated
Entity receives a portion of the transaction price in cash for each shipment at or near the date of shipment under a
provisional invoice. Given this, a portion of the transaction price relating to these shipping services is received in
advance of the Consolidated Entity providing these services. Such amounts have been recognised as a contract
liability upon receipt under AASB 15 and are then recognised as revenue over time as the services are provided.
Given the nature of the Consolidated Entity’s commodity shipping profile, most of these services are completed in
the same reporting period that control of the underlying copper concentrate passes to the customer with only a very
small percentage of shipments subject to these Incoterms being on the water over a reporting period end.
Other impacts
The change did not have a material impact on the total comprehensive loss for the year ended 30 June 2019. There
was no impact on the consolidated statement of financial position as at 1 July 2018 or 30 June 2019. There was
no impact on the statement of cash flows or earnings per share for the year ended 30 June 2019. The QP fair value
movement after the date of sale that is included in profit or loss as a ‘fair value gains/losses on provisionally priced
trade receivables’ for the period was $4,760,857. Under the previous accounting policy these gains and losses
were included in revenue.
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces parts of AASB 139 bringing together all three aspects of the accounting for
financial instruments: classification and measurement; impairment; and hedge accounting. The accounting policies
have been updated to reflect the application of AASB 9 for the period from 1 July 2018 (refer to note 2(p)).
The Consolidated Entity has applied AASB 9 retrospectively, with the initial application date being 1 July 2018. The
cumulative impact of applying AASB 9 is recognised at the date of initial application as an adjustment to the
opening balance of retained earnings. The Consolidated Entity has elected not to adjust comparative information.
AASB 9 introduced new classification and measurement models for financial assets. A financial asset shall be
measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect
contractual cash flows, which arise on specified dates and are solely payments of principal and interest (“SPPI”).
All other financial instrument assets are to be classified and measured at fair value through profit or loss (“FVTPL”)
unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity
instruments (that are not held-for trading) in other comprehensive income (“OCI”).
For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity’s own
credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting
requirements more closely align the accounting treatment with the risk management activities of the Consolidated
Entity.
Impairment requirements use an ‘expected credit loss’ (“ECL”) model to recognise an allowance. Impairment is
measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly
since initial recognition in which case the lifetime ECL method is adopted.
The key impacts of adopting AASB 9 are summarised below:
- 40 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e)
2.
Change in accounting policies and disclosures (continued)
AASB 9 Financial Instruments (continued)
Classification and measurement
Financial assets - The Consolidated Entity continued measuring at fair value all financial assets previously held at
fair value under AASB 139. The following are the changes in the classification of the Consolidated Entity’s financial
assets:
1.
Term deposit and other receivables (not subject to provisional pricing), previously classified as Loans and
receivables: these were assessed as being held to collect contractual cash flows and give rise to cash flows
representing SPPI. These are now classified and measured as Debt instruments at amortised cost.
Trade receivables (subject to provisional pricing) and Quotational period derivatives: The exposure of trade
receivables to commodity price movements over the QP, gives rise to an ED). Prior to the adoption of AASB 9, the
Consolidated Entity accounted for the ED separately from the host contract for receivables relating to tin concentrate.
For receivables relating to copper concentrate, the Consolidated Entity measured the receivable, being the hybrid
instrument, at fair value through profit and loss. Under AASB 9, embedded derivatives are no longer separated from
financial assets. Instead, the exposure of the trade receivable to future commodity price movements will cause the
trade receivable to fail the SPPI test. Therefore, the entire receivable is now required to be measured at fair value
through profit or loss, with subsequent changes in fair value recognised in the Consolidated Statement of
Comprehensive Income each period until final settlement. Accordingly, the adoption of AASB 9 did not impact the
classification of trade receivables relating to copper concentrate. It has resulted in the reclassification of trade
receivables relating to tin concentrate from loans and receivables under AASB 139 to financial assets at fair value
through profit and loss under AASB 9. This reclassification adjustment did not have a material impact on the
measurement of trade receivables.
The Consolidated Entity previously presented fair value changes in the ED and Copper Concentrate trade
receivable in ‘revenue’ but will now present fair value movements in trade receivables subject to provisional pricing
as ‘fair value gains/losses on provisionally priced trade receivables’.
Financial liabilities - There are no changes in classification and measurement for the Consolidated Entity’s financial
liabilities.
Equity investments - Listed equity investments previously classified as Available-for-Sale financial assets are now
classified and measured as financial assets at FVTPL. As a consequence the reclassification the fair value reserve
at 1 July 2018 relating to Available-for-Sale financial assets was transferred to retained earnings (see below).
Impact on statement of financial position
The following table summarises the impact, net of tax, of transition to AASB 9 on reserves and accumulated losses
at 1 July 2018.
Fair value reserve
Closing balance under AASB 139 (30 June 2018)
Equity instruments reclassified as financial assets at FVTPL
Opening balance under AASB 9 (1 July 2018)
Accumulated losses
Closing balance under AASB 139 (30 June 2018)
Equity instruments reclassified as financial assets at FVTPL
Opening balance under AASB 9 (1 July 2018)
3,762,167
(3,762,167)
-
(115,249,072)
3,762,167
(111,486,905)
- 41 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e)
Change in accounting policies and disclosures (continued)
Classification of financial assets and financial liabilities on the date of initial application of AASB 9
The following table shows the original measurement categories under AASB 139 and the new measurement
categories under AASB 9 for each class of the Consolidated Entity’s financial assets and financial liabilities as at
1 July 2018.
Financial assets
Equity investments
Cash and cash
equivalents
Tin concentrate trade
receivables – host
contract
Copper concentrate
trade receivables
Other receivables
Other financial assets
Total financial assets
Financial liabilities
Interest bearing loans
Trade and other
payables
Total financial
liabilities
Original
classification under
AASB 139
New
classification
under AASB 9
Original carrying
amount under
AASB 139
New carrying
amount under
AASB 9
Available-for-sale
investment
Loans and
receivables
Loans and
receivables
FVTPL
Loans and
receivables
Loans and
receivables
FVTPL
9,253,664
9,253,664
Amortised cost
31,234,845
31,234,845
FVTPL
FVTPL
4,528,645
4,528,645
2,048,186
2,048,186
Amortised cost
7,099,345
7,099,345
Amortised cost
10,311,569
10,311,569
64,476,254
64,476,254
Amortised cost
Amortised cost
10,370,552
10,370,552
Amortised cost
Amortised cost
31,686,792
31,686,792
42,057,344
42,057,344
Impairment
The adoption of AASB 9 has changed the Consolidated Entity’s accounting for impairment losses for financial
assets by replacing AASB 139’s incurred loss approach with a forward-looking ECL approach. AASB 9 requires
the Consolidated Entity to recognise an allowance for ECLs for all debt instruments not held at fair value through
profit or loss.
As all of the Consolidated Entity’s other receivables which the Consolidated Entity measures at amortised cost are
short term (ie less than 12 months) and the Consolidated Entity has risk management policies in place, the change
to a forward-looking ECL approach did not have a material impact on the amounts recognised in the financial
statements.
Hedge Accounting
The Consolidated Entity has elected to adopt the new general hedge accounting model in AASB 9. However, the
changes introduced by AASB 9 relating to hedge accounting currently have no impact, as the Consolidated Entity
does not apply hedge accounting.
- 42 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(f) New and amended Accounting Standards issued but not yet effective
Certain new and amended accounting standards and interpretations have been issued that are not mandatory for 30
June 2019 reporting periods. These standards and interpretations have not been early adopted.
Application date
of standard*
Application
date for
Consolidated
Entity*
1 January 2019
1 July 2019
Reference
Title
Summary
Impact on Metals X
AASB 16
Leases
required
’low-value’ assets
AASB 16 requires lessees to
account for all leases under a
single on- balance sheet model in
a similar way to finance leases
under AASB 117 Leases. The
standard includes two recognition
exemptions for lessees – leases
of
(e.g.,
personal computers) and short-
term leases (i.e., leases with a
lease term of 12 months or less).
At the commencement date of a
lease, a lessee will recognise a
liability to make lease payments
(i.e., the lease liability) and an
asset representing the right to
use the underlying asset during
the lease term (i.e., the right-of-
use asset).
Lessees will be
to
separately recognise the interest
expense on the lease liability and
the depreciation expense on the
right-of-use asset.
Lessees will be
to
remeasure the lease liability upon
the occurrence of certain events
(e.g., a change in the lease term,
lease
a
payments
from a
resulting
change in an index or rate used to
determine those payments). The
lessee will generally recognise
the
the
lease
remeasurement of
liability as an adjustment to the
right-of-use asset.
Lessor accounting is substantially
unchanged
today’s
accounting under AASB 117.
Lessors will continue to classify all
leases
same
classification principle as in AASB
117 and distinguish between two
types of leases: operating and
finance leases.
required
amount
of
the
change
future
using
from
the
in
the
the
onto
approach
to adopt
is measured as
AASB 16 Leases eliminates the
distinction between operating
and finance leases, and brings all
leases (other than short term
balance
leases)
sheet. The standard does not
apply mandatorily before 1 July
2019. The Consolidated Entity
the modified
plans
on
retrospective
lease
transition, where
liability
the
present value of future lease
payments on the initial date of
application being 1 July 2019.
Work
completed
by
the
to date
Consolidated Entity
indicates the new leases standard
is expected to have a material
effect on the Consolidated Entity’s
it will
financial statements as
significantly
the
increase
Consolidated Entity’s recognised
assets and liabilities.
There will be an increase in
property, plant and equipment
(right of use) assets and a
corresponding increase in lease
liabilities of at least $500,000 as
at 1 July 2019. As a result of the
creation of a right-of-use asset
and lease liability, depreciation
expense and interest expense are
expected
and
operating lease expense will be
reduced. This is due to the
change
for
expenses of leases that were
classified as operating
leases
under AASB 117. In addition, the
classification between cash flow
from operating activities and cash
flow from financing activities will
also change. Many commonly
and
used
the
performance metrics
Consolidated Entity’s,
using
existing definitions, will also be
impacted
including net debt,
gearing, EBITDA, unit costs and
operating
flows. The
Consolidated Entity’s existing
equipment and property operating
leases will be the main source of
leases under the new standard.
Information on the Consolidated
Entity’s
lease
operating
commitments under AASB 117
is
Leases
33
disclosed
Commitments – operating lease
commitments – Consolidated
Entity as lessee.
the accounting
(undiscounted)
increase
financial
ratios
cash
note
for
to
in
in
There will be no material impact.
1 January 2019
1 July 2019
IAS 19
Amendments to
Australian
Accounting
Standards
Plan
Amendment,
Curtailment or
Settlement
–
This Standards amends AASB
119 Employee Benefits - address
the accounting when a plan
amendment, curtailment or
settlement occurs during a
reporting period.
Determining the current service
cost and net interest
- 43 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
Reference
Title
Summary
Impact on Metals X
Application date
of standard*
Application
date for
Consolidated
Entity*
When accounting for defined
benefit plans under IAS 19, the
standard generally
requires
entities to measure the current
service cost using actuarial
assumptions determined at the
start of the annual reporting
period. Similarly,
the net
interest is generally calculated
by multiplying the net defined
benefit liability (asset) by the
discount
as
determined at the start of the
annual reporting period. The
amendments specify that when
a plan amendment, curtailment
or settlement occurs during the
annual reporting period, an
entity is required to:
•
rate,
both
the
after
using
Determine current service
cost for the remainder of the
period
plan
amendment, curtailment or
settlement,
the
actuarial assumptions used
the net
to
liability
defined
(asset)
the
benefits offered under the
plan and the plan assets
after that event
benefit
reflecting
remeasure
•
Determine net interest for
the remainder of the period
after the plan amendment,
curtailment or settlement
the net defined
using:
liability
(asset)
benefit
reflecting
benefits
the
offered under the plan and
the plan assets after that
event; and the discount rate
used to remeasure that net
liability
benefit
defined
(asset)
Effect
on
requirements
asset
ceiling
A plan amendment, curtailment
or settlement may reduce or
eliminate a surplus in a defined
benefit plan, which may cause
the effect of the asset ceiling to
change.
The amendments clarify that an
entity first determines any past
service cost, or a gain or loss on
settlement, without considering
the effect of the asset ceiling.
This amount is recognised in
profit or loss. An entity then
determines the effect of the
the plan
asset ceiling after
amendment,
curtailment or
settlement. Any change in that
effect,
amounts
included in the net interest, is
recognised
other
comprehensive income.
This clarification provides that
entities might have to recognise
a past service cost, or a gain or
loss on settlement, that reduces
a
not
recognised before. Changes in
the effect of the asset ceiling are
not netted with such amounts.
that was
excluding
surplus
in
- 44 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
Reference
Title
Summary
Impact on Metals X
AASB
Interpretation
and
amending
standards
23,
relevant
Uncertainty
over Income
Tax
Treatments
The Interpretation clarifies the
application of the recognition and
measurement criteria in AASB
112 Income Taxes when there is
income
uncertainty over
tax
Interpretation
treatments. The
specifically
the
following:
► Whether an entity considers
treatments
addresses
tax
uncertain
separately
The Company is still assessing
whether there will be any material
impact.
Application date
of standard*
Application
date for
Consolidated
Entity*
1 January 2019
1 July 2019
► The assumptions an entity
the
tax
taxation
makes
examination
treatments
authorities
about
of
by
► How an entity determines
taxable profit (tax loss), tax
bases, unused tax losses,
unused tax credits and tax
rates
► How an entity considers
and
in
facts
changes
circumstances.
There will be no material impact.
1 March 2018
1 March 2018
AASB 2019-1
Conceptual
Framework for
Financial
Reporting
and
amending
‡‡,
relevant
revised
Conceptual
The
Framework includes some new
updated
concepts,
provides
definitions
recognition
and
criteria for assets and liabilities
and clarifies some
important
concepts. It is arranged in eight
chapters, as follows:
► Chapter 1 – The objective of
financial reporting
► Chapter 2 – Qualitative
characteristics of useful
financial information
► Chapter 3 – Financial
statements and the reporting
entity
► Chapter 4 – The elements of
financial statements
► Chapter 5 – Recognition and
derecognition
► Chapter 6 – Measurement
► Chapter 7 – Presentation
and disclosure
► Chapter 8 – Concepts of
capital
and
capital
maintenance
to
the
to
in order
Amendments to References to
the Conceptual Framework
in
AASB Standards has also been
the
issued, which sets out
affected
amendments
to update
standards
references
revised
Conceptual Framework. . In most
cases, the standard references
are updated
the
Conceptual Framework. There
are exemptions
in developing
accounting policies for regulatory
account
two
balances
standards, namely, AASB 3 and
for those applying AASB 108.
to refer
for
to
- 45 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
Application date
of standard*
Application
date for
Consolidated
Entity*
1 January 2020
1 July 2020
Reference
Title
Summary
Impact on Metals X
AASB 2018-7
Definition
Material
of
The Company is still assessing
whether there will be any material
impact.
of
of
the
that,
financial
in a way
’Information
or misstating
or magnitude
combination with
the standards and
financial
the basis of
statements,
In October 2018, the IASB issued
to AASB 101
amendments
Presentation
Financial
Statements and AASB 108 to
align the definition of ‘material’
to
across
clarify certain aspects of
the
definition. The new definition
states
is
material if omitting, misstating or
obscuring it could reasonably be
expected to influence decisions
that the primary users of general
statements
purpose
those
make on
financial
which
provide
information
about a specific reporting entity.’
The amendments clarify
that
materiality will depend on the
nature
of
information, or both. An entity will
need
the
to assess whether
information, either individually or
in
other
information, is material in the
context
financial
statements.
Obscuring information
The amendments explain that
information is obscured if it is
that
communicated
would have a similar effect as
omitting
the
information. Material information
may, for instance, be obscured if
information regarding a material
item, transaction or other event is
scattered throughout the financial
statements, or disclosed using a
language that is vague or unclear.
Material information can also be
obscured
items,
transactions or other events are
inappropriately aggregated, or
conversely, if similar items are
inappropriately disaggregated.
New threshold
The amendments replaced the
threshold ‘could influence’, which
suggests
that any potential
influence of users must be
‘could
considered,
reasonably be expected
to
the definition of
influence’
the amended
‘material’.
definition, therefore, it is clarified
that the materiality assessment
will need to take into account only
reasonably expected influence on
economic decisions of primary
users.
Primary users of the financial
statements
The current definition refers to
‘users’ but does not specify their
characteristics, which can be
interpreted to imply that an entity
is required to consider all possible
users of the financial statements
when deciding what information
to disclose. Consequently, the
IASB decided to refer to primary
users in the new definition to help
respond to concerns that the term
‘users’ may be interpreted too
widely.
if dissimilar
with
In
in
- 46 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(g) Basis of consolidation
The consolidated financial statements comprise the financial statements of the parent entity and its subsidiaries
('the Consolidated Entity') as at 30 June each year. Control is achieved when the Consolidated Entity is exposed, or
has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through
its power over the investee. Specifically, the Consolidated Entity controls an investee if and only if the Consolidated
Entity has:
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee)
•
•
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns
When the Consolidated Entity has less than a majority of the voting or similar rights of an investee, the Consolidated
Entity considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
•
•
•
The contractual arrangement with the other vote holders of the investee
The Consolidated Entity’s voting rights and potential voting rights
Rights arising from other contractual arrangements
The Consolidated Entity re-assesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the
Consolidated Entity obtains control over the subsidiary and ceases when the Consolidated Entity loses control of the
subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are
included in the statement of comprehensive income from the date the Consolidated Entity gains control until the date
the Consolidated Entity ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent
of the Consolidated Entity and to the non-controlling interests, even if this results in the non-controlling interests
having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring
their accounting policies into line with the Consolidated Entity’s accounting policies. All intra-Consolidated Entity
assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Consolidated Entity are eliminated in full on consolidation.
(h) Foreign currency translation
(i) Functional and presentation currency
Both the functional and presentation currency of the Company and its Australian subsidiaries is Australian dollars
(A$).
(ii) Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the
rate of exchange at the reporting date.
All exchange differences in the consolidated financial report are taken to the profit or loss.
(i) Operating segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenues
and incur expenses (including revenues and expenses relating to transactions with other components of the same
entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions
about resources to be allocated to the segment and assess its performance and for which discrete financial information
is available. This includes start up operations which are yet to earn revenues. Management will also consider other
factors in determining operating segments such as the existence of a line manager and the level of segment
information presented to the board of directors.
Operating segments have been identified based on the information provided to the chief operating decision makers –
being the executive management team. The Consolidated Entity aggregates two or more operating segments when
they have similar economic characteristics.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an
operating segment that does not meet the quantitative criteria is still reported separately where information about the
segment would be useful to users of the financial statements.
Information about other business activities and operating segments that are below the quantitative criteria are
combined and disclosed in a separate category for “all other segments”.
- 47 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j) Cash and cash equivalents
(k)
(l)
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term
deposits that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value.
For the purposes of the Statement of cash flows, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts. Bank overdrafts are included within interest bearing loans
and borrowings in the current liabilities on the statement of financial position.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Cost includes expenditure incurred in acquiring and bringing the inventories to their existing condition and location
and is determined using the weighted average cost method.
Provisions
Provisions are recognised when the Consolidated Entity has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle
the present obligation at the reporting date. The discount rate used to determine the present value reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the provision
resulting from the passage of time is recognised in finance costs.
(m) Joint arrangements
Assets, including its share of any assets held jointly
Joint arrangements are arrangements over which two or more parties have joint control. Joint Control is the
contractual agreed sharing of control of the arrangement which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing control. Joint arrangements are classified as ether a joint
operation or a joint venture, based on the rights and obligations arising from the contractual obligations between the
parties to the arrangement.
To the extent the joint arrangement provides the Consolidated Entity with rights to the individual assets and
obligations arising from the joint arrangement, the arrangement is classified as a joint operation and as such, the
Consolidated Entity recognises its:
•
•
•
•
•
To the extent the joint arrangement provides the Consolidated Entity with rights to the net assets of the arrangement,
the investment is classified as a joint venture and accounted for using the equity method. Under the equity method,
the cost of the investment is adjusted by the post-acquisition changes in the Consolidated Entity’s share of the net
assets of the joint venture.
Revenue from the sale of its share of the output arising from the joint operation;
Share of revenue from the sale of the output by the joint operation; and
Expenses, including its share of any expenses incurred jointly
Liabilities, including its share of liabilities incurred jointly;
(n) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset
that necessarily takes a substantial period of time to get ready for its intended use or sale) are capitalised as part
of the cost of that asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist
of interest and other costs that an entity incurs in connection with the borrowing of funds.
(o) Rehabilitation costs
The Consolidated Entity is required to decommission and rehabilitate mines and processing sites at the end of their
producing lives to a condition acceptable to the relevant authorities.
The expected cost of any approved decommissioning or rehabilitation programme, discounted to its net present
value, is provided when the related environmental disturbance occurs. The cost is capitalised when it gives rise to
future benefits, whether the rehabilitation activity is expected to occur over the life of the operation or at the time of
closure. The capitalised cost is amortised over the life of the operation and the increase in the net present value of
the provision for the expected cost is included in financing expenses. Expected decommissioning and rehabilitation
costs are based on the discounted value of the estimated future cost of detailed plans prepared for each site. Where
there is a change in the expected decommissioning and restoration costs, the value of the provision and any related
asset are adjusted and the effect is recognised in profit or loss on a prospective basis over the remaining life of the
operation.
The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation,
technology or other circumstances. Cost estimates are not reduced by potential proceeds from the sale of assets or
from plant clean up at closure.
- 48 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p) Financial instruments
On 1 July 2018 the Consolidated Entity implemented AASB 9 Financial Instruments and elected not to restate comparative
information. The Consolidated Entity has disclosed the current and prior year accounting policies as below.
Pre 1 July 2018 accounting policy
Initial recognition and measurement
Financial assets and financial liabilities were recognised when the entity became party to the contractual provisions
to the instrument. For financial assets, this was equivalent to the date that the Company committed itself to either
the purchase or sale of the asset.
Financial assets were classified, at initial recognition, as financial assets at fair value through profit or loss, trade
and other receivables, trade and other payables, held-to-maturity investments, available-for-sale financial assets,
or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
Financial instruments were initially measured at fair value plus transaction costs, except where the instrument was
classified "at fair value through profit or loss", in which case transaction costs were expensed to profit or loss
immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method,
or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of
the difference between that initial amount and the maturity amount calculated using the effective interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied
to determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar
instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the relevant period and
is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs
and other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the contractual
term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to
expected future net cash flows will necessitate an adjustment to the carrying amount with a consequential
recognition of an income or expense item in profit or loss.
i. Trade and other receivables
On initial recognition copper trade receivables are designated as fair value through profit and loss (refer to note
2(y)), accordingly these trade receivables are measured at fair value as at reporting date. Credit balances are
reclassified to trade and other payables.
Tin trade receivables and other receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest rate method, less an allowance for impairment. The revenue
adjustment mechanism embedded within the sales contract had the characteristics of a commodity derivative
which was bifurcated from the trade receivable. The fair value movements in this embedded derivative were re-
estimated continuously and changes in fair value recognised as an adjustment to revenue in the consolidated
statement of comprehensive income.
Collectability of tin trade receivables and other receivables carried at amortised cost is reviewed on an ongoing
basis. Individual debts that are known to be uncollectible are written off when identified. An impairment allowance
is recognised when there is objective evidence that the Consolidated Entity will not be able to collect the
receivable. Financial difficulties of the debtor, default payments or debts more than 60 days overdue are
considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying
amount compared to the present value of estimated future cash flows, discounted at the original effective interest
rate.
ii. Trade and other payables
Trade payables and other payables are carried at amortised cost and due to their short-term nature they are not
discounted. They represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the
financial year that are unpaid and arise when the Consolidated Entity becomes obliged to make future payments in
respect of the purchase of these goods and services. The amounts are unsecured and usually paid within 30 days of
recognition.
iii. Derivative financial instruments and hedging
The Consolidated Entity uses derivative financial instruments to manage commodity price exposures. Such
derivative financial instruments are initially recorded at fair value on the date on which the derivative contract is
entered into and are subsequently remeasured to fair value.
Certain derivative instruments are also held for trading for the purpose of making short term gains. None of the
derivatives qualify for hedge accounting and changes in fair value are recognised immediately in profit or loss
in other revenue and expenses.
Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative.
- 49 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p) Financial instruments (continued)
iv. Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets, principally equity securities that are
designated as available-for-sale. Investments are designated as available-for-sale if they do not have fixed
maturities and fixed and determinable payments and management intends to hold them for the medium to long
term.
After initial recognition, available-for-sale investments are measured at fair value. Gains or losses are
recognised in other comprehensive income and presented as a separate component of equity until the
investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at
which time the cumulative gain or loss previously reported in equity is included in profit or loss.
The fair value of investments that are actively traded in organised markets is determined by reference to quoted
market bid prices at the close of business on the reporting date.
For investments with no active market, fair value is determined using valuation techniques. Such valuation
techniques include using recent arm’s length transactions; reference to the current market value of another
instrument that is substantially the same; discounted cash flow analysis and option pricing models. Where fair
value cannot be reliably measured for certain unquoted investments, these investments are measured at cost.
v.
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the effective interest rate method.
Borrowings are classified as current liabilities unless the Consolidated Entity has the unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
Post 1 July 2018 accounting policy
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition that are debt instruments depends on the financial asset’s
contractual cash flow characteristics and the Consolidated Entity’s business model for managing them. With the
exception of trade receivables, the Consolidated Entity initially measures a financial asset at its fair value plus, in the
case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables are measured at
the transaction price determined under AASB 15. Refer to the revenue from contracts with customer accounting
policy in note 2(y).
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding.
This assessment referred to as the SPPI test is performed at an instrument level.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
•
•
•
Financial assets at amortised cost (debt instruments);
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments);
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments); or
Financial assets at fair value through profit or loss.
•
Financial assets at amortised cost (debt instruments)
The Consolidated Entity measures financial assets at amortised cost if both of the following conditions are met:
•
The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows; and
•
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are
subject to impairment. Interest received is recognised as part of finance income in the Consolidated Statement of
Comprehensive Income. Gains and losses are recognised in profit or loss when the asset is derecognised, modified
or impaired.
The Consolidated Entity’s financial assets at amortised cost include trade receivables (not subject to provisional
pricing), other receivables and term deposits.
- 50 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p) Financial instruments (continued)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated
upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at
fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or
repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for
trading unless they are designated as effective hedging instruments. Financial assets with cash flows do not pass
the SPPI test are classified and measured at fair value through profit or loss, irrespective of the business model. Debt
instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or
significantly reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with
net changes in fair value recognised in the profit or loss.
This category also includes trade receivables subject to provisional pricing (QP adjustment), and listed equity
investments which the Consolidated Entity has not irrevocably elected to classify at fair value through OCI. Dividends
on listed equity investments are also recognised as other income in the statement of profit or loss when the right of
payment has been established.
Derecognition
A financial asset is primarily derecognised when:
•
•
The rights to receive cash flows from the asset have expired; or
The Consolidated Entity has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’
arrangement; and either (a) the Consolidated Entity has transferred substantially all the risks and rewards of
the asset, or (b) the Consolidated Entity has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Consolidated Entity recognises an allowance for ECLs for all debt instruments not held at fair value through profit
or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract
and all the cash flows that the Consolidated Entity expects to receive, discounted at an approximation of the original
EIR. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible
within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant
increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For receivables other than those subject to provisional pricing, and due in less than 12 months, the Consolidated
Entity does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s
lifetime ECL at each reporting date. The Consolidated Entity has established a provision matrix for these receivables
that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and
the economic environment. For any other financial assets carried at amortised cost (which are due in more than 12
months), the ECL is based on the 12-month ECL when there has not been a significant increase in credit risk since
origination. The 12-month ECL is the proportion of lifetime ECLs that results from default events on a financial
instrument that are possible within 12 months after the reporting date.
When there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime
ECL. When determining whether the credit risk of a financial asset has increased significantly since initial recognition
and when estimating ECLs, the Consolidated Entity considers reasonable and supportable information that is
relevant and available without undue cost or effort. This includes both quantitative and qualitative information and
analysis, based on the Consolidated Entity’s historical experience and informed credit assessment including forward-
looking information. The Consolidated Entity considers a financial asset in default when contractual payments are 90
days past due. However, in certain cases, the Consolidated Entity may also consider a financial asset to be in default
when internal or external information indicates that the Consolidated Entity is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements held by the Consolidated Entity. A
financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and
usually occurs when past due for more than one year and not subject to enforcement activity.
At each reporting date, the Consolidated Entity assesses whether financial assets carried at amortised cost are credit
impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
- 51 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p) Financial instruments (continued)
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Consolidated Entity’s financial liabilities include trade and other payables, derivatives loans and borrowings.
Subsequent measurements
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings and trade and other payables
After initial recognition, interest-bearing loans and borrowings and trade and other payables are subsequently
measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or
loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss
and other comprehensive income.
This category generally applies to interest-bearing loans and borrowings and trade and other payables.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for
trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative
financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships
as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the
statement of profit or loss and other comprehensive income
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit or loss.
Impairment of non-financial assets
The Consolidated Entity assesses, at each reporting date, whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment testing for an asset is required, the Consolidated Entity
estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-
generating unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for
an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other
assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
or CGU. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples or other available fair value indicators.
The Consolidated Entity bases its impairment calculation on detailed budgets and forecasts, which are prepared
separately for each of the Consolidated Entity’s CGUs to which the individual assets are allocated, based on the life-
of-mine plans. The estimated cash flows are based on expected future production, metal selling prices, operating
costs and forecast capital expenditure based on life-of-mine plans.
Value in use does not reflect future cash flows associated with improving or enhancing an asset’s performance,
whereas anticipated enhancements to assets are included in fair value less costs of disposal calculations.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the profit and
loss. For such properties, the impairment is recognised in other comprehensive income up to the amount of any
previous revaluation.
For assets, an assessment is made at each reporting date to determine whether there is an indication that previously
recognised impairment losses no longer exist or have decreased. If such indication exists, the Consolidated Entity
estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if
there has been a change in the assumptions used to determine the asset’s recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its
recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the
asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
(q)
- 52 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r) Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business
combination shall be measured at fair value, which shall be calculated as the sum of the acquisition-date fair values
of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree and
the equity issued by the acquirer, and the amount of any non-controlling interest in the acquiree. For each business
combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the
appropriate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.
When the Consolidated Entity acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the
Consolidated Entity’s operating or accounting policies and other pertinent conditions as at the acquisition date. This
includes the separation of embedded derivatives in the host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will
be recognised in accordance with AASB 9 either in profit or loss or in other comprehensive income. If the contingent
consideration is classified as equity, it shall not be remeasured and subsequent settlement is accounted for within
equity. In instances, where the contingent consideration does not fall within the scope of AASB 9, it is measured in
accordance with the appropriate Accounting Standard.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the
amount recognised for non-controlling interest over the fair value of the identifiable net assets acquired and liabilities
assumed. If this consideration is lower than the fair value of the identifiable net assets of the subsidiary acquired, the
difference is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of
the Consolidated Entity’s cash-generating units that are expected to benefit from the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the
goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured
based on the relative value of the operation disposed of and the portion of the cash-generating unit retained.
(s) Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any impairment in value.
Capital work-in-progress is stated at cost and comprises all costs directly attributable to bringing the assets under
construction ready to their intended use. Capital work-in-progress is transferred to property, plant and equipment at
cost on completion.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset, or where appropriate,
over the estimated life of the mine.
Major depreciation periods are:
• Mine specific plant and equipment is depreciated using – the shorter of life of mine and useful life. Useful life
ranges from 2 to 10 years.
Buildings – the shorter of life of mine and useful life. Useful life ranges from 5 to 40 years.
•
• Office Plant and equipment is depreciated at 33% per annum for computers and office machines and 20% per
annum for other office equipment and furniture.
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for
the cash-generating unit to which the asset belongs.
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets
or cash-generating units are written down to their recoverable amount. Refer to note 2(q) for further discussion on
impairment testing performed by the Consolidated Entity.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the item) is included in the profit and loss in the period the item is
derecognised.
- 53 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(t)
Exploration and evaluation expenditure
Expenditure on acquisition, exploration and evaluation relating to an area of interest is carried forward at cost where
rights to tenure of the area of interest are current and;
(i)
it is expected that expenditure will be recouped through successful development and exploitation of the area of
interest or alternatively by its sale and/or;
(ii) exploration and evaluation activities are continuing in an area of interest but at reporting date have not yet
reached a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest. Where uncertainty exists as to the future viability of certain areas, the value
of the area of interest is written off to the profit and loss or provided against.
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment regularly and if
after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely
or that the Consolidated Entity no longer holds tenure, the relevant capitalised amount is written off to profit or loss
in the period when the new information becomes available.
(u) Mine properties and development
Expenditure on the acquisition and development of mine properties within an area of interest are carried forward at
cost separately for each area of interest. Accumulated expenditure is amortised over the life of the area of interest to
which such costs relate on a production output basis.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
Impairment
The carrying value of capitalised mine properties and development expenditure is assessed for impairment whenever
facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
Refer to note 2(q) for further discussion on impairment testing performed by the Consolidated Entity.
(v) Leases
Leases are classified at their inception as either operating or finance leases based on the economic substance of
the agreement so as to reflect the risks and benefits incidental to ownership.
(i) Operating Leases
The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the
risks and benefits of ownership of the leased item, are recognised as an expense in profit and loss on a straight-
line basis over the lease term.
Contingent rentals are recognised as an expense in the financial year in which they are incurred.
(ii) Finance Leases
Leases which effectively transfer substantially all the risks and benefits incidental to ownership of the leased
item to the Consolidated Entity are capitalised at the inception of the lease at the fair value of the leased property
or, if lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged
directly to profit and loss.
Capitalised leased assets are depreciated over the estimated useful life of the asset or where appropriate, over
the estimated life of the mine.
The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements, and
amortised over the unexpired period of the lease or the estimated useful lives of the improvements, whichever
is the shorter.
(w)
(x)
Interest receivable
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.
Issued capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated Entity.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction in the
proceeds received.
- 54 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(y) Revenue from contracts with customers
On 1 July 2018 the Consolidated Entity implemented AASB 15 Revenue from Contracts with Customers using the
modified retrospective method of adoption. The Consolidated Entity has disclosed the current and prior year
accounting policies as below:
Pre 1 July 2018 accounting policy
Revenue was measured at the fair value of the consideration received or receivable to the extent it was probable
that the economic benefits would flow to the Consolidated Entity and the revenue could be reliably measured. The
following specific recognition criteria had to be met before revenue was recognised
Copper concentrate sales
Revenue from copper production was recognised when the significant risks and rewards of ownership have passed
to the buyer. Sales revenue is subject to adjustment based on final assay results. In addition, the terms of the sales
contracts for copper concentrate contain provisional pricing arrangements. Adjustments to the sales price are based
on movements in metal prices up to the date of final pricing. Final settlement is between 2 and 4 months after the
date of delivery (the “quotational period”) with pricing based on the average LME copper price for the month of
settlement. The revenue adjustment mechanism embedded within the sales contract has the characteristics of a
commodity derivative which significantly modifies the cash flows under the contract. The Consolidated Entity has
decided to designate the trade receivables arising on initial recognition of these sales transaction as a financial asset
at fair value through profit and loss and not separately account for the embedded derivative. Accordingly, the fair
value of the receivable is re-estimated continuously and changes in fair value recognised as an adjustment to revenue
in the consolidated statement of comprehensive income.
Tin concentrate sales
Revenue from tin and gold production is recognised when the significant risks and rewards of ownership have passed
to the buyer. In addition, the terms of the sales contracts for tin concentrate contain provisional pricing arrangements.
Adjustments to the sales price are based on movements in metal prices up to the date of final pricing. Final settlement
is between 11 and 46 days after the date of delivery (the “quotational period”) with pricing based on the average LME
or KLTM tin price for the month of settlement. The revenue adjustment mechanism embedded within the sales
contract has the characteristics of a commodity derivative which is bifurcated from the trade receivable. The fair value
movements in this embedded derivative are re-estimated continuously and changes in fair value recognised as an
adjustment to revenue in the consolidated statement of comprehensive income.
Post 1 July 2018 accounting policy
The Consolidated Entity is principally engaged in the business of producing tin and copper in concentrate. Revenue
from contracts with customers is recognised when control of the goods or services is transferred to the customer at
an amount that reflects the consideration to which the Consolidated Entity expects to be entitled in exchange for
those goods or services.
The Consolidated Entity has generally concluded that it is the principal in its revenue contracts because it typically
controls the goods or services before transferring them to the customer.
For the Consolidated Entity’s metal in concentrate sales not sold under cost, insurance and freight (“CIF”) Incoterms,
the performance obligation is the delivery of the concentrate. Where the Consolidated Entity’s copper concentrate is
sold under CIF Incoterms the Consolidated Entity is also responsible for providing shipping services. In these
situations, the shipping services also represent separate performance obligations.
The Consolidated Entity’s sales of metal in concentrate allow for price adjustments based on the market price at the
end of the relevant Quotational Period (“QP”) stipulated in the contract. These are referred to as provisional pricing
arrangements and are such that the selling price for metal in concentrate is based on prevailing spot prices on a
specified future date after shipment to the customer. Adjustments to the sales price occur based on movements in
quoted market prices up to the end of the QP. The period between provisional invoicing and the end of the QP can
be up to three months for copper concentrate. The QP for tin concentrate is not expected to result in a material
adjustment due to the short period between the point of control of the concentrate passes to the customer and the
end of the QP.
Based on the current contractual terms, revenue is recognised when control passes to the customer, which occurs
at a point in time when the metal in concentrate is physically transferred onto a vessel for copper concentrate and
physically arrives at the customer’s works for tin concentrate. The revenue is measured as the amount to which the
Consolidated Entity expects to be entitled, being the estimate of the price expected to be received at the end of the
QP, and a corresponding trade receivable is recognised.
For the provisional pricing arrangements, any future changes that occur over the QP are embedded within the
provisionally priced trade receivables and are, therefore, within the scope of AASB 9 and not within the scope of
AASB 15. Given the exposure to the commodity price, these provisionally priced trade receivables fail the cash flow
characteristics test within AASB 9 and are classified and measured at fair value through profit or loss from initial
recognition and until the date of settlement. Subsequent changes in fair value of the receivable are recognised in the
Consolidated Statement of Comprehensive Income each period and presented separately from revenue from
contracts with customers as part of ‘fair value gains/losses on provisionally priced trade receivables’. Changes in fair
value over, and until the end of, the QP, are estimated by reference to updated forward market prices for copper and
tin as well as taking into account relevant other fair value considerations, including interest rate and credit risk
adjustments.
- 55 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(y) Revenue from contracts with customers (continued)
Revenue is initially recognised based on the most recently determined estimate of metal in concentrate using the
expected value approach based on initial internal assay and weight results. The Consolidated Entity has determined
that it is highly unlikely that a significant reversal of the amount of revenue recognised will occur due to variations in
assay and weight results. Subsequent changes in the fair value based on the customer’s final assay and weight
results are recognised in revenue at the end of the QP.
For CIF arrangements, the transaction price (as determined above) is allocated to the metal in concentrate and
shipping services using the relative stand-alone selling price method. Under these arrangements, a portion of
consideration is received from the customer at, or around, the date of shipment under a provisional invoice.
Therefore, some of the upfront consideration that relates to the shipping services yet to be provided is deferred. It is
then recognised as revenue over time using an output method (being days of shipping/transportation elapsed) to
measure progress towards complete satisfaction of the service as this best represents the Consolidated Entity’s
performance. This is on the basis that the customer simultaneously receives and consumes the benefits provided by
the Consolidated Entity as the services are being provided. The costs associated with these freight/shipping services
are also recognised over the same period of time as incurred. Deferred revenue is generally not material at the
balance sheet date.
(z) Share-based payment transactions
The Consolidated Entity provides benefits to employees (including Directors) in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (equity-settled
transactions). The Consolidated Entity has one plan in place that provides these benefits. It is the Long Term
Incentive Plan (“LTIP”) which provides benefits to all employees including Directors.
In valuing equity-settled transactions, no account is taken of any vesting conditions (such as service conditions),
other than conditions linked to the price of the shares of Metals X Limited (market conditions) if applicable.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date
at which they are granted. The fair value is determined by using a Black & Scholes model. Further details of which
are given in note 30.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled (the vesting period), ending on the date on
which the relevant employees become fully entitled to the award (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive income
is the product of (i) the grant date fair value of the award; (ii) the current best estimate of the number of awards that
will vest, taking into account such factors as the likelihood of employee turnover during the vesting period and the
likelihood of non-market performance conditions being met; and (iii) the expired portion of the vesting period.
The charge to profit and loss for the period is the cumulative amount as calculated above less the amounts already
charged in previous periods. There is a corresponding credit to equity.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest
than were originally anticipated to do so. Any award subject to a market condition is considered to vest irrespective
of whether or not the market condition is fulfilled, provided that all other conditions are satisfied.
If a non-vesting condition is within the control of the Consolidated Entity, Company or the employee, the failure to
satisfy the condition is treated as a cancellation. If a non-vesting condition within the control of neither the
Consolidated Entity, Company nor employee is not satisfied during the vesting period, any expense for the award
not previously recognised is recognised over the remaining vesting period, unless the award is forfeited.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. An additional expense is recognised for any modification that increases the total fair value of
the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award, and designated as a replacement award on the date that it is granted, the cancelled and new award are
treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of dilutive
earnings per share.
- 56 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(aa) Employee benefits
(i) Wages, salaries, sick leave and other short-term benefits
Liabilities for wages and salaries, including non-monetary benefits, accumulating sick leave and other short term
benefits expected to be settled wholly within 12 months of the reporting date are recognised in respect of employees'
services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are
settled.
(ii) Long service leave
The liability for long service leave is recognised and measured as the present value of expected future payments to
be made in respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures, and periods
of service. Expected future payments are discounted using market yields at the reporting date on high quality
corporate bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash
outflows.
(iii) Superannuation
Contributions made by the Consolidated Entity to employee superannuation funds, which are defined contribution
plans, are charged as an expense when incurred.
(ab) Income tax
The Consolidated Entity entered into a tax Consolidated Entity as of 1 July 2004.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted at the reporting date in the countries where the Consolidated Entity operates and generates taxable
income.
Deferred tax is provided for using the balance sheet full liability method on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date
Deferred income tax liabilities are recognised for all taxable temporary differences except:
•
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
•
in respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and
it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised
except:
•
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
•
in respect of the deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income
tax asset to be utilised.
Unrecognised income taxes are reassessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the profit and loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
Tax consolidation legislation
Metals X Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation as of 1 July 2004. The head entity, Metals X Limited and the controlled entities in the tax consolidated
group continue to account for their own current and deferred tax amounts. The Consolidated Entity has applied the
group allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to
members of the tax consolidated group.
- 57 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(ac) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
•
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item
as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are
classified as operating cash flows.
Commitments and contingencies are disclosed net of amounts of GST recoverable from, or payable to, the taxation
authority.
(ad) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any
costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent adjusted for:
•
•
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised; and
cost of servicing equity (other than dividends) and preference share dividends;
•
other non-discriminatory changes in revenues or expenses during the period that would result from the dilution
of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any
bonus element.
(ae) Comparative figures
Comparative figures have been adjusted to reclassify other financial assets of $10,311,569 from current assets to
non-current assets to conform with the changes in the presentation of the current financial year. The adjustment
has no impact on the net assets for the year ended 30 June 2018.
3. SIGNIFICANT 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 and estimates on historical experience and on other various factors it believes to be reasonable under the
circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily
apparent from other sources.
Management has identified the following critical accounting policies for which significant judgements have been made
as well as the following key estimates and assumptions that have the most significant impact on the financial
statements. Actual results may differ from these estimates under different assumptions and conditions and may
materially affect financial results or the financial position reported in future periods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial
statements.
(i) Significant judgments made in applying accounting policies
•
Identification of the enforceable contract
For copper and tin in concentrate (metal in concentrate) sales, there are master services agreements with
key customers that set out the general terms and conditions governing any sales that occur. The customer is
only obliged to purchase copper and tin in concentrate when it places an order for each shipment. Therefore,
the enforceable contract has been determined to be each purchase order.
Identification of performance obligations for arrangements subject to CIF Incoterms
A proportion of the Consolidated Entity’s metal in concentrate sales subject to CIF Incoterms, whereby the
Consolidated Entity is responsible for providing freight/shipping services. The freight/shipping services are a
promise to transfer services in the future and are part of the negotiated exchange between the Consolidated
Entity and the customer. The Consolidated Entity determined that both the metal in concentrate and the
freight/shipping services are capable of being distinct as the customer can benefit from both products on their
own. The Consolidated Entity also determined that the promises to transfer the metal in concentrate and the
freight/shipping services are distinct within the context of the contract. Consequently, the Consolidated Entity
allocated a portion of the transaction price to the metal in concentrate and the freight/shipping services based
on relative stand-alone selling prices.
- 58 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(continued)
(i) Significant judgments made in applying accounting policies (continued)
• Principal versus agent considerations – freight/shipping services
As noted above, in some arrangements subject to CIF Incoterms, the Consolidated Entity is responsible for
providing freight/shipping services. While the Consolidated Entity does not actually provide nor operate the
vessels, the Consolidated Entity has determined that it is principal in these arrangements because it has
concluded it controls the specified services before they are provided to the customer. This is on the basis that
the Consolidated Entity obtains control of a right to freight/shipping services after entering into the contract
with the customer, but before those services are provided to the customer. The terms of the Consolidated
Entity’s contract with the service provider give the Consolidated Entity the ability to direct the service provider
to provide the specified services on the Consolidated Entity’s behalf.
In addition, the Consolidated Entity has concluded that the following indicators provide evidence that it
controls the freight/shipping services before they are provided to the customer:
♦
The Consolidated Entity is primarily responsible for fulfilling the promise to provide freight/shipping
services. Although the Consolidated Entity has hired a service provider to perform the services promised
to the customer, it is the Consolidated Entity itself that is responsible for ensuring that the services are
performed and are acceptable to the customer (i.e., the Consolidated Entity is responsible for fulfilment
of the promise in the contract, regardless of whether the Consolidated Entity performs the services itself
or engages a third-party service provider to perform the services).
♦
The Consolidated Entity has discretion in setting the price for the services to the customer as this is
negotiated directly with the customer.
• Determining the timing of satisfaction of freight/shipping services
The Consolidated Entity concluded that revenue for freight/shipping services is to be recognised over time
because the customer simultaneously receives and consumes the benefits provided by the Consolidated
Entity. The fact that another entity would not need to re-perform the freight/shipping services that the
Consolidated Entity has provided to date demonstrates that the customer simultaneously receives and
consumes the benefits of the Consolidated Entity’s performance as it performs. The Consolidated Entity
determined that the input method is the best method for measuring progress of the freight/shipping services
because there is a direct relationship between the Consolidated Entity’s effort (i.e., time elapsed) and the
transfer of service to the customer. The Consolidated Entity recognises revenue on the basis of the time
elapsed relative to the total expected time to complete the service.
• Provision for expected credit losses (ECLs) on trade receivables carried at amortised cost
The Consolidated Entity uses a provision matrix to calculate ECLs for short term receivables carried at
amortised cost.
The provision matrix is initially based on the Consolidated Entity’s historical observed default rates. The
Consolidated Entity will calibrate the matrix to adjust the historical credit loss experience with forward-looking
information. For instance, if forecast economic conditions are expected to deteriorate over the next year,
which can lead to an increased number of defaults, the historical default rates are adjusted. At every
reporting date, the historical observed default rates are updated and changes in the forward-looking
estimates are analysed.
The assessment of the correlation between historical observed default rates, forecast economic conditions
and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of
forecast economic conditions. The Consolidated Entity’s historical credit loss experience and forecast of
economic conditions may also not be representative of customer’s actual default in the future.
(ii) Significant accounting estimates and assumptions
• Determination of mineral resources and ore reserves
The determination of reserves impacts the accounting for asset carrying values, depreciation and
amortisation rates and provisions for mine rehabilitation. The Consolidated Entity estimates its mineral
resource and reserves in accordance with the Australian code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves 2012 (the “JORC code”). The information on mineral resources and ore
reserves were prepared by or under the supervision of Competent Persons as defined in the JORC code.
The amounts presented are based on the mineral resources and ore reserves determined under the JORC
code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and
assumptions that are valid at the time of estimation may change significantly when new information becomes
available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may
change the economic status of reserves and may, ultimately, result in the reserves being restated.
- 59 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(continued)
(ii) Significant accounting estimates and assumptions (continued)
• Mine rehabilitation provision
The Consolidated Entity assesses its mine rehabilitation provision on an annual basis in accordance with the
accounting policy stated in note 2(o). In determining an appropriate level of provision, consideration is given
to the expected future costs to be incurred, the timing of those future costs (largely dependent on the life of
mine) and the estimated level of inflation. The ultimate rehabilitation costs are uncertain, and cost estimates
can vary in response to many factors, including estimates of the extent and costs of rehabilitation activities,
technological changes, regulatory changes, cost increases as compared to the inflation rates, and changes
in discount rates. The expected timing of expenditure can also change, for example in response to changes
in reserves or to production rates. These uncertainties may result in future actual expenditure differing from
the amounts currently provided. Therefore, significant estimates and assumptions are made in determining
the provision for mine rehabilitation. As a result, there could be significant adjustments to the provisions
established which would affect future financial result. The provision at reporting date represents
management’s best estimate of the present value of the future rehabilitation costs required.
• Life of mine method of amortisation and depreciation
The Consolidated Entity applies the life of mine method of amortisation and depreciation to its mine specific
plant and to mine properties and development based on ore tonnes mined. These calculations require the
use of estimates and assumptions. Significant judgement is required in assessing the available reserves and
the production capacity of the plants to be depreciated under this method. Factors that are considered in
determining reserves and production capacity are the Consolidated Entity’s history of converting resources
to reserves and the relevant time frames, the complexity of metallurgy, markets and future developments.
When these factors change or become known in the future, such differences will impact pre tax profit and
carrying values of assets.
•
•
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of
factors, including whether the Consolidated Entity decides to exploit the related area interest itself or, if not,
whether it successfully recovers the related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future
technological changes, which could impact the cost of mining, future legal changes (including changes to
environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in
the future, profits and net assets will be reduced in the period in which this determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not
yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be
written off, profits and net assets will be reduced in the period in which this determination is made.
Impairment of capitalised mine development expenditure
The Consolidated Entity assess each asset or cash generating unit (“CGU”) at the end of each reporting
period to determine whether an indication of impairment exists. Where an indicator of impairment exists, a
formal estimate of the recoverable mount is made, which is considered to be the higher of value in use (“VIU”)
(being net present value of expected future cash flows of the relevant cash generating unit) and fair value
less costs to sell” (“FVLCS”).
The future recoverability of capitalised mine development expenditure is dependent on a number of factors,
including the level of proved, probable and inferred mineral resources, future technological changes, which
could impact the cost, future legal changes (including changes to environmental restoration obligations) and
changes to commodity prices.
The Consolidated Entity regularly reviews the carrying values of its mine development assets in the context
of independent expert valuations, internal and external consensus forecasts for commodity prices and foreign
exchange rates, with the application of appropriate discount rates for the assets concerned.
To the extent that capitalised mine development expenditure is determined not to be recoverable in the future,
this will reduce profit in the period in which this determination is made. Capitalised mine development
expenditure is assessed for recoverability in a manner consistent with property, plant and equipment as
described below. Refer to note 39 for further details on the impairment assessment process undertaken by
the Consolidated Entity.
- 60 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(continued)
(ii) Significant accounting estimates and assumptions (continued)
•
Impairment of property, plant and equipment
The Consolidated Entity assess each asset or CGU at the end of each reporting period to determine whether
an indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the
recoverable mount is made, which is considered to be the higher of VIU and FVLCS.
In determining the value in use, future cash flows for each CGU (i.e. each mine site) are prepared utilising
management’s latest estimates of;
♦
the quantities of ore reserves and mineral resources for which there is a high degree of confidence of
economic extraction;
♦
♦
♦
♦
♦
royalties and taxation;
future production levels;
future commodity prices;
future cash costs of production; and
other relevant cash inflows and outflows.
Cash flow scenarios for a range of commodity prices and foreign exchange rates are assessed using internal
and external market forecasts, and the present value of the forecast cash flows.
The Consolidated Entity’s cash flows are most sensitive to movements in commodity price, expected
quantities of ore reserves and mineral resources and key operating costs.
Variations to the expected cash flows, and the timing thereof, could result in significant changes to any
impairment losses recognised, if any, which in turn could impact future financial results. Refer to note 39 for
further details on the impairment assessment process undertaken by the Consolidated Entity.
4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Consolidated Entity’s principal financial instruments comprise receivables, payables, finance lease and hire
purchase contracts, cash and short-term deposits, and equity investments.
Risk exposures and responses
The Consolidated Entity manages its exposure to key financial risks in accordance with the Consolidated Entity’s
financial risk management policy. The objective of the policy is to support the delivery of the Consolidated Entity’s
financial targets while protecting future financial security.
The Consolidated Entity enters into derivative transactions, principally zero cost collar put and call options. The
purpose is to manage the commodity price risks arising from the Consolidated Entity’s operations. These derivatives
provide economic hedges, but do not qualify for hedge accounting and are based on limits set by the board. The
main risks arising from the Consolidated Entity’s financial instruments are interest rate risk, foreign currency risk,
commodity risk, credit risk, equity price risk and liquidity risk. The Consolidated Entity uses different methods to
measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to
interest rate, foreign exchange risk and assessments of market forecasts for interest rate, foreign exchange and
commodity prices. Ageing analysis of and monitoring of receivables are undertaken to manage credit risk, liquidity
risk is monitored through the development of future rolling cash flow forecasts.
The board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and
agrees policies for managing each of the risks identified below, including for interest rate risk, credit allowances and
cash flow forecast projections.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.
The accounting classification of each category of financial instruments as defined in note 2, and their carrying
amounts, are set out below:
- 61 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(a)
Interest rate risk
The Consolidated Entity’s exposure to risks of changes in market interest rates relate primarily to the Consolidated
Entity’s trade receivables carried at fair value through profit and loss and cash balances. The Consolidated Entity’s
policy is to manage its interest cost using fixed rate debt. Therefore, the Consolidated Entity does not have any
variable interest rate risk on its debt. The Consolidated Entity constantly analyses its interest rate exposure. Within
this analysis consideration is given to potential renewals of existing positions, alternative financing positions and the
mix of fixed and variable interest rates. The following sensitivity analysis is based on the interest rate risk exposures
in existence at the reporting date. The sensitivity analysis is for variable rate cash balances and trade receivables
carried at fair value through profit and loss.
At 30 June 2019, if interest rates had moved by a reasonably possible 0.25%, as illustrated in the table below, with
all other variables held constant, post tax profits and equity would have been affected as follows:
Post tax profit
higher/(lower)
Other Comprehensive Income
higher/(lower)
2019
2018
2019
2018
Judgements of reasonably possible
movements:
+ 0.25% (25 basis points)
- 0.25% (25 basis points)
A sensitivity of +0.25% or -0.25% has been selected as this is considered reasonable given the current level of short-
term and long-term Australian dollar interest rates. The movements in profit are due to possible higher or lower interest
income from variable rate cash balances. The sensitivity is lower in 2019 than 2018 mainly due to a decrease in the
balance of cash and cash equivalents held in variable interest rate accounts in 2019, which has offset by an increase
in the balance of trade receivables carried at fair value through profit and loss.
At the reporting date the Consolidated Entity’s exposure to interest rate risk for classes of financial assets and
financial liabilities is set out below.
40,732
(40,732)
24,088
(24,088)
-
-
-
-
2019
Financial Assets
Cash and cash equivalents
Trade receivables at fair value through the
profit and loss
Other receivables
Other financial assets
Financial Liabilities
Trade and other payables
Interest bearing liabilities
Net financial assets/(liabilities)
2018
Financial Assets
Cash and cash equivalents
Trade receivables at fair value through the
profit and loss
Trade receivables at amortised cost
Other financial assets
Financial Liabilities
Trade and other payables
Interest bearing liabilities
Net financial assets/(liabilities)
Floating
interest rate
Fixed interest
Non-Interest
bearing
Total carrying
amount
728,687
174,361
10,461,351
11,364,399
8,211,481
4,824,183
-
-
-
8,211,481
-
10,771,569
3,509,344
-
8,333,527
10,771,569
13,764,351
10,945,930
13,970,695
38,680,976
-
-
-
-
(9,353,739)
(25,441,824)
-
(9,353,739)
(25,441,824)
(25,441,824)
(9,353,739)
(34,795,563)
3,885,413
Floating
interest rate
Fixed interest
Non-Interest
bearing
Total carrying
amount
21,227,486
15,000
9,992,359
31,234,845
2,048,186
-
-
-
-
-
2,048,186
4,825,234
4,825,234
10,311,569
-
23,275,672
10,326,569
14,817,593
-
-
-
-
(10,370,552)
(31,686,792)
-
(10,370,552)
(31,686,792)
- 62 -
10,311,569
48,419,834
(31,686,792)
(10,370,552)
(42,057,344)
6,362,490
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(b) Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Consolidated Entity is exposed to credit risk from its operating activities (primarily
trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign
exchange transactions and other financial instruments. Cash and cash equivalents are held with ANZ Bank which is
an Australian Bank with an AA- credit rating (Standard & Poor’s). The Consolidated Entity’s exposure to credit risk
arises from potential default of the counter party, with the maximum exposure equal to the carrying amount of the
financial assets (as outlined in each applicable note).
The Consolidated Entity does not hold any credit derivatives to offset its credit exposure.
The Consolidated Entity trades only with recognised, creditworthy third parties and as such collateral, letters of credit
or other forms of credit insurance is not requested nor is it the Consolidated Entity’s policy to securitise its trade and
other loans and receivables. The Consolidated Entity evaluates the concentration of risk with respect to trade
receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.
Receivable balances are monitored on an ongoing basis with the result that the Consolidated Entity does not have a
significant exposure to bad debts.
Significant concentrations of credit risk are in relation to cash and cash equivalents with Australian banks.
At 30 June 2019, the Consolidated Entity had three customers (2018: three customers) that each owed the
Consolidated Entity $3,698,679, $1,561,519 and $1,164,196 respectively and accounted for approximately 56%
(2018: 80%) of all receivables owing.
At 30 June 2019, there are no material trade receivables at amortised cost that are past due.
Refer to note 12 for details of the Consolidated Entity’s credit risk exposure on the Consolidated Entity’s trade
receivables using a provision matrix.
(c) Price risk
Equity Security Price Risk
The Consolidated Entity’s revenues are exposed to equity security price fluctuations arising from investments in
equity securities.
At 30 June 2019, if equity security prices had moved by a reasonably possible 20%, as illustrated in the table below,
with all other variables held constant, post tax profits and equity would have been affected as follows:
Post tax profit
higher/(lower)
2019
2018
Other Comprehensive Income
higher/(lower)
2018
2019
Judgements of reasonably possible
movements:
Price + 20%
Price - 20% *
45,715
(45,715)
-
(1,289,150)
-
-
1,289,150
-
* Provided the decline is below cost and is significant or prolonged.
A sensitivity of +20% or -20% has been selected as this is considered reasonable given recent fluctuations in equity
prices and management’s expectations of future movements. The movements in profit or loss for 2019 are due to
possible higher or lower equity security prices from investments in equity securities that are classified as Financial
assets at fair value through profit and loss (refer to note 2(p)).
(d) Foreign currency risk
As a result of tin and copper concentrate sales receipts being denominated in US dollars, the Consolidated Entity’s
cash flows can be affected by movements in the US dollar/Australian dollar exchange rate.
At the balance date the Consolidated Entity had the following exposure to US dollar foreign currency:
Cash and cash equivalents
Trade and other receivables
2019
2018
10,461,351
8,211,481
18,672,832
9,992,359
2,048,186
12,040,545
- 63 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(d) Foreign currency risk (continued)
At 30 June 2019, if foreign currency rates had moved by a reasonably possible 10%, as illustrated in the table below,
with all other variables held constant, post tax profits and equity would have been affected as follows:
Post tax profit
higher/(lower)
Other Comprehensive Income
higher/(lower)
2019
2018
2019
2018
Judgements of reasonably possible
movements:
A$/US$ Price +10%
A$/US$ Price -10%
1,867,283
(1,867,283)
1,204,055
(1,204,055)
-
-
-
-
A sensitivity of +10% or -10% has been selected as this is considered reasonable given recent fluctuations in foreign
currency rates and management’s expectations of future movements. The overall sensitivity for post-tax profits in
2019 is lower than 2018 due to a decrease in the value exposed to fluctuations in US dollar foreign currency.
(e)
Commodity price risk
The Consolidated Entity’s revenues are exposed to commodity price fluctuations. Periodically the Consolidated Entity
enters into contracts to manage commodity price risk.
Gross value of open copper
concentrate positions *
Derivative financial instruments **
2019
2018
28,864,239
-
28,864,239
30,601,768
(1,078,251)
29,523,517
* This relates to the provisional amount of copper tonnes remaining open to price adjustments (gross sales). Refer
to note 12 for the open quantity.
** This relates to a forward commodity option over 1,500 tonnes of copper maturing in July 2018. The put has a
strike price of $7,800 per tonne of LME copper and the call has a strike price of $8,255 per tonne of LME copper
(refer to note 22).
*** There is no significant commodity price risk for tin.
At 30 June 2019, if commodity prices had moved by a reasonably possible 10%, as illustrated in the table below,
with all other variables held constant, post tax profits and equity would have been affected as follows:
Post tax profit
higher/(lower)
Other Comprehensive Income
higher/(lower)
2019
2018
2019
2018
Judgements of reasonably possible
movements:
Copper prices +10%
Copper prices -10%
2,886,424
(2,886,424)
2,952,352
(2,952,352)
-
-
-
-
A sensitivity of +10% or -10% has been selected as this is considered reasonable given recent fluctuations in
commodity prices and management’s expectations of future movements. The overall sensitivity for post-tax profits in
2019 is lower than 2018 due to a decrease in the value exposed to fluctuations in commodity prices.
- 64 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(f)
Liquidity risk
Liquidity risk arises from the financial liabilities of the Consolidated Entity and the subsequent ability to meet the
obligations to repay the financial liabilities as and when they fall due.
The Consolidated Entity’s objective is to maintain a balance between continuity of funding and flexibility through the
use of finance and hire purchase leases.
The tables below reflect all contractually fixed payments including interest for recognised financial liabilities as of 30
June 2019. Cash flows for financial liabilities without fixed amount or timing are based on the conditions existing as
30 June.
The remaining contractual maturities of the Consolidated Entity’s financial liabilities are:
6 months or less
6 - 12 months
1 - 5 years
Over 5 years
2019
2018
(25,442,837)
(808)
(1,160)
-
(25,444,805)
(34,328,510)
(2,422,226)
(5,768,093)
-
(42,518,829)
Maturity analysis of financial assets and liabilities based on management’s expectation.
The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows.
Leasing obligations, trade payables and other financial liabilities mainly originate from the financing of assets used
in our ongoing operations such as property, plant, equipment and investments of working capital e.g. inventories and
trade receivables. To monitor existing financial assets and liabilities as well as to enable effective controlling of future
risks, management monitors its Consolidated Entity’s expected settlement of financial assets and liabilities on an
ongoing basis.
2019
<6 months
6-12
months
1-5 years
>5 years
Total
Financial assets
Cash and equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Interest bearing loans
Net inflow/(outflow)
11,580,518
8,333,527
10,976,414
30,890,459
-
-
-
-
-
-
-
-
(25,441,824)
(1,013)
(25,442,837)
5,447,622
-
(808)
(808)
(808)
-
(1,160)
(1,160)
(1,160)
-
-
-
-
11,580,518
8,333,527
10,976,414
30,890,459
- (25,441,824)
-
(2,981)
- (25,444,805)
5,445,654
-
2018
<6 months
6-12
months
1-5 years
>5 years
Total
Financial assets
Cash and equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Interest bearing loans
Net inflow/(outflow)
31,684,596
6,873,420
10,460,045
49,018,061
-
-
-
-
-
-
-
-
(31,686,792)
(2,641,718)
(34,328,510)
14,689,551
-
(2,422,226)
(2,422,226)
(2,422,226)
-
(5,768,093)
(5,768,093)
(5,768,093)
-
-
-
-
31,684,596
6,873,420
10,460,045
49,018,061
- (31,686,792)
- (10,832,037)
- (42,518,829)
6,499,232
-
- 65 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(g) Fair values
For all financial assets and liabilities recognised in the statement of financial position, carrying amount approximates
fair value unless otherwise stated in the applicable notes.
The methods for estimating fair value are outlined in the relevant notes to the financial statements.
The Consolidated Entity uses various methods in estimating the fair value of a financial instrument. The methods
comprise:
Level 1 – the fair value is calculated using quoted prices in active markets.
Level 2 - the fair value is estimated using inputs other than quoted prices included in level 1 that are observable for
the asset or liability, either directly (as prices) or indirectly (derived from price).
Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market
data.
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in
the table below.
2019
Valuation
technique
market
observable
inputs (Level 2)
Valuation
technique non
market
observable inputs
(Level 3)
Total
Quoted market
price (Level 1)
-
-
-
8,211,481
243,586
37,500
-
281,086
-
-
7,350
8,218,831
2018
-
-
-
-
-
-
-
8,211,481
243,586
37,500
7,350
8,499,917
Valuation
technique
market
observable
inputs (Level 2)
Valuation
technique non
market
observable inputs
(Level 3)
Total
Quoted market
price (Level 1)
-
2,048,186
-
2,048,186
Financial Assets
Trade receivables
Tin sales 1
Copper sales 1
Equity investments
Listed investments 2
Derivatives
Listed investments 2
Unlisted investments 3
Financial Assets
Trade receivables
Copper sales 1
Equity investments
Listed investments 2
9,170,714
Derivatives
Listed investments 2
Unlisted investments 3
37,500
-
-
-
45,450
9,208,214
2,093,636
-
9,170,714
-
-
37,500
45,450
- 11,301,850
Financial Liabilities
Derivatives
Forward commodity options 4
-
-
1,078,251
1,078,251
-
-
1,078,251
1,078,251
1.
The fair value of trade receivables relates to tin and copper concentrate provisionally sold at the reporting date. The fair
value is based on the applicable KLM or LME spot prices. Changes in fair value over, and until the end of, the QP, are
estimated by reference to updated forward market prices for copper and tin as well as taking into account relevant other
fair value considerations, including interest rate and credit risk adjustments. Refer to note 2(y) for further details.
2. Quoted market price represents the fair value determined based on quoted prices on active markets as at the
reporting date without any deduction for transaction costs. The fair value of equity investments and derivatives are
based on quoted market prices.
- 66 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(g) Fair values (continued)
3.
The unlisted investment relates to 1,500,000 unlisted options in Brainchip Holdings Limited. The fair value is
determined using a Black & Scholes model, which takes account of factors including the option exercise price,
the volatility of the underlying share price, the risk free rate, the market price of the underlying share at grant
date and the expected life of the option. Below are the inputs used to value the unlisted options:
Details
2019
2018
Expected Volatility (%)
Risk-free interest rate (%)
Expected life of options (yrs)
Options exercise price ($)
Share price at grant date ($)
93%
1.04%
0.92
$0.23
$0.072
73%
1.99%
1.92
$0.23
$0.130
4.
The forward commodity options related to puts and calls granted over 1,500 tonnes of copper per month
maturing in July 2018. The puts had a strike price as low as $7,600 per tonne of LME copper and the calls
had a strike price as high as $8,255 per tonne of LME copper. The fair value is based on the applicable LME
forward prices as at the reporting date.
Transfer between categories
There were no transfers between Level 1 and Level 2, and no transfers into and out of Level 3 fair value
measurement.
(h) Changes in liabilities arising from financing activities
1 July 2018
Cash flows
New leases
Other
30 June 2019
Current obligations under finance
leases
Non-current obligations under
finance leases
Total liabilities from financing
activities
4,848,201
(5,351,548)
503,347
5,043,404
5,043,404
5,522,351
-
3,831,388 (5,043,404)
4,310,335
10,370,552
(5,351,548)
4,334,735
-
9,353,739
1 July 2017
Cash flows
New leases
Other
30 June 2018
Current obligations under finance
leases
Non-current obligations under
finance leases
Total liabilities from financing
activities
3,187,557
(3,831,333)
643,776
4,848,201
4,848,201
5,308,678
-
5,061,874 (4,848,201)
5,522,351
8,496,235
(3,831,333)
5,705,650
-
10,370,552
The ‘Other’ column includes the effect of reclassification of non-current portion of interest-bearing loans and
borrowings, including obligations under finance leases and hire purchase contracts to current due to the passage of
time. The Consolidated Entity classifies interest paid as cash flows from operating activities.
- 67 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
5. REVENUE
Tin concentrate sales
Copper concentrate sales
Total revenue from contracts with customers
2019
2018
85,276,228
119,445,784
204,722,012
81,929,241
127,972,186
209,901,427
(a)
(b)
(c)
Revenue for shipping services is not material and has been included in copper concentrate sales.
The Consolidated Entity has applied AASB 15 using the modified retrospective method with the date of initial
application being 1 July 2018 (see note 2(y)). Accordingly, the comparative information has not restated for the
impact of adopting AASB 15.
Copper and tin concentrate sales are provisionally priced at the time revenue is recognised. The price feature is
considered to be an embedded derivative. On the application of AASB 15 in 2019, movements in the fair value of
the provisionally priced trade receivables is recognised as other expenses/(income) in the profit and loss. For
2018 the movement in the fair value of the embedded derivative for copper sales due to price changes is an
increase of $5,241,050 which was included in revenue from copper concentrate sales.
6. OTHER INCOME
Interest received
Net loss/(gain) on sale of assets
Other income
Total other income
7.
(a)
EXPENSES
Cost of sales
Salaries, wages expense and other employee benefits
Superannuation expense
Other production costs
Write down in value of inventories to estimated net realisable value
Royalty expense
Depreciation and amortisation expense
Depreciation of non-current assets
Property, plant and equipment
Buildings
Amortisation of non-current assets
Mine, properties and development costs
Total cost of sales
(b)
Administration expenses
Employee benefits expense
Salaries and wages expense
Directors' fees and other benefits
Superannuation expense
Other employee benefits
Other administration expenses
Consulting expenses
Travel and accommodation expenses
Operating lease costs
Stamp duty compliance (refund)/costs
Administration costs
- 68 -
807,144
(15,539)
128,340
919,945
680,102
634,659
502,434
1,817,195
45,558,779
4,328,084
137,995,732
7,734,113
7,637,659
40,357,418
3,833,955
130,431,917
6,791,083
10,695,347
9,680,844
649,640
9,115,574
624,394
24,561,906
238,146,757
15,683,358
217,533,046
3,276,406
350,000
378,623
60,835
4,065,864
1,402,132
178,113
95,297
(114,371)
912,123
2,473,294
1,566,453
350,000
172,182
29,033
2,117,668
537,880
242,906
202,709
24,481
1,129,538
2,137,514
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
7. EXPENSES (continued)
Depreciation expense
Depreciation of non-current assets
Property plant and equipment
Total Administration expenses
(c) Fair value change in derivative financial instruments
Foreign exchange gain/(loss)
Commodity (loss)/gain
Total fair value change in derivative financial instruments
(d) Finance costs
Interest
Unwinding of rehabilitation provision discount
Total finance costs
(e) Fair value change in financial instruments
2019
2018
193,193
6,732,351
223,656
4,478,838
908,134
3,479,104
4,387,238
1,004,356
(11,368,491)
(10,364,135)
(629,466)
(842,820)
(1,472,286)
(621,763)
(847,588)
(1,469,351)
Fair value change in derivative financial instruments (refer to note 16)
(38,100)
(47,300)
Fair value change in financial assets through profit and loss (refer to note
17)
Total fair value change in financial assets
INCOME TAX
8.
(a) Major components of income tax expense:
(4,384,134)
-
(4,422,234)
(47,300)
Income Statement
Current income tax expense
Current income tax benefit
Adjustments in respect of current income tax of previous years
Deferred income tax
(20,290,442)
(8,274,898)
(8,562,928)
8,839,298
Relating to origination and reversal of temporary differences in current
year
Derecognition of carry forward losses and other temporary differences
Adjustments in respect of current income tax of previous years
Income tax reported in the income statement
(15,241,875)
42,245,986
1,561,229
-
961,163
46,880
(1,284,413)
-
(b) Amounts charged or credited directly to equity
Deferred income tax related to items charged or credited directly to equity
Unrealised gain on available-for-sale investments
Income tax reported in equity
-
-
-
-
(c) A reconciliation of income tax benefit and the product of accounting loss before income tax multiplied by the
Consolidated Entity's applicable income tax rate is as follows:
Total accounting loss before income tax
(116,968,634)
(26,297,186)
At statutory income tax rate of 30% (2018: 30%)
(35,090,590)
(7,889,156)
Non-deductible items
Share-based payments
Sundry items
Deductible items
Adjustments in respect of current income tax of previous years
Deferred tax asset not recognised
Income tax expense/(benefit) reported in income the statement of
comprehensive income
208,179
6,980
(656,886)
(6,713,669)
42,245,986
605,787
5,690
(324,086)
7,554,885
46,880
-
-
- 69 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
(continued)
8.
INCOME TAX (continued)
(d)
Deferred income tax at 30 June relates to the following:
Deferred tax liabilities
Exploration
Deferred mining
Mine site establishment and refurbishment
Consumables
Prepayments
Diesel rebate
Gross deferred tax liabilities
Deferred tax assets
Property, plant and equipment
Non-current financial assets
Derivative held for trading
Derivative Financial Instruments
Inventories
Legal costs
Accrued expenses
Provision for employee entitlements
Provision for fringe benefits tax
Provision for rehabilitation
(Unrecognised timing differences)/Recognised tax losses
Gross deferred tax assets
Net deferred tax liabilities
Deferred tax income/(expense)
Statement of financial
position
Statement of comprehensive
income
2019
2018
2019
2018
(2,883,735)
(9,307,431)
(3,334,220)
(9,120,092)
(1,488)
(54,928)
(24,701,894)
15,857,757
1,346,623
25,620
-
5,514,268
17,060
46,500
2,741,307
(930)
12,285,464
(13,131,775)
24,701,894
(3,190,023)
(20,081,130)
(3,867,289)
(8,834,912)
-
(40,290)
(36,013,644)
16,262,078
1,563,687
14,190
323,475
2,810,014
18,012
52,251
2,561,594
(31,621)
11,891,093
548,871
36,013,644
(306,288)
(10,773,699)
(533,069)
285,180
1,488
14,638
404,321
217,064
(11,430)
323,475
(2,704,254)
952
5,751
(179,713)
(30,691)
(394,371)
1,989,231
(1,690,045)
2,566,762
(141,514)
-
(59,985)
(2,375,913)
(524,511)
(14,190)
(323,475)
385,711
113,748
12,279
(46,015)
(18,442)
(196,891)
-
-
(13,680,646)
(323,250)
- 70 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
8.
INCOME TAX (continued)
(e) Tax Consolidation and the tax sharing arrangement
The Company and its 100% owned subsidiaries are a tax consolidated group with effect from 1 July 2004. Metals X
Limited is the head entity of the tax consolidated group. Members of the group have entered into a tax sharing
agreement that provides for the allocation of income tax liabilities between the entities should the head entity default
on its tax payments obligations. No amounts have been recognised in the financial statements in respect of this
agreement on the basis that the possibility of default is remote.
(f)
Tax effect accounting by members of the tax consolidated group
Deferred taxes are allocated to members of the tax consolidated group in accordance with a group allocation
approach which is consistent with the principles of AASB 112 ‘Income Taxes’. Members of the tax consolidated group
have entered into a tax funding agreement. The tax funding agreement provides for the allocation of current taxes
to members of the tax consolidated group.
The allocation of taxes under the tax funding agreement is recognised as an increase/decrease in the controlled
entities intercompany accounts with the tax consolidated group head company, Metals X Limited. The nature of the
tax funding agreement is such that no tax consolidation contributions by or distributions to equity participants are
required.
(g) Unrecognised losses
At 30 June 2019, there are unrecognised losses of $229,302,104 (2018: $200,187,893) for the Consolidated Entity,
of which $156,354,189 (2018: $156,479,138) is subject to a restricted rate of utilisation.
9. EARNINGS PER SHARE
The following reflects the data used in the basic and diluted earnings per share computations.
(a) Earnings used in calculating earnings per share
For basic earnings per share:
Loss attributable to continuing operations
Loss attributable to ordinary equity holders of the parent
Basic loss per share (cents)
For diluted earnings per share:
Loss attributable to continuing operations
Loss attributable to ordinary equity holders of the parent
Fully diluted loss per share (cents)
(b) Weighted average number of shares
2019
2018
(116,968,634)
(116,968,634)
(26,297,186)
(26,297,186)
(17.17)
(4.30)
(116,968,634)
(116,968,634)
(26,297,186)
(26,297,186)
(17.17)
(4.30)
Weighted average number of ordinary shares for basic earnings per
share
681,262,826
611,157,234
Effect of Dilution:
Share Options
-
-
Weighted average number of ordinary shares adjusted for the effect
of dilution
681,262,826
611,157,234
Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by dividing the
profit attributable to ordinary equity holders of the parent (after adjusting for interest on the convertible preference
shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average
number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary
shares.
The Company had 29,173,202 (2018: 13,350,000) share options on issue that are excluded from the calculation of
diluted earnings per share for the current financial period because they are considered non-dilutive or contingently
issuable.
There have been no transactions involving ordinary shares or potential ordinary shares since that would significantly
change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and before
the completion of these financial statements.
- 71 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
10. DIVIDENDS PAID AND PROPOSED
Dividends declared and paid during the financial year
Nil dividends were declared for 2019 (2018: nil)
Total dividends
Dividends proposed but not recognised as a liability
Final dividend for 2019: nil (2018: nil)
The amount of franking credits available for the subsequent financial
year are:
Franking account balance as at the end of the financial year at 30%
(2018: 30%)
The amount of franking credits available for future reporting years
2019
2018
-
-
-
-
-
-
1,842
1,842
1,842
1,842
The Company operates a dividend reinvestment plan which allows eligible shareholders to elect to invest dividends
in ordinary shares. All holders of Metals X ordinary shares with addresses in Australia or New Zealand are eligible to
participate in the plan. The allocation price for shares is based on the average of the daily volume weighted average
price of Metals X ordinary shares sold on the Australian Securities Exchange less a discount, calculated with
reference to a period of not less than five consecutive trading days as determined by the directors.
An issue of shares under the dividend reinvestment plan results in an increase in issued capital unless the Company
elects to purchase the required number of shares on-market.
11. CASH AND CASH EQUIVALENTS
Cash at bank and in hand - denominated in AUD
Cash at bank and in hand - denominated in USD
Short-term deposits
Total
728,687
10,461,351
174,361
11,364,399
21,227,486
9,992,359
15,000
31,234,845
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for
varying periods of between one day and three months, depending on the immediate cash requirements of the
Consolidated Entity, and earn interest at the respective short-term deposit rates. Refer to note 4(b) for more details
on the Consolidated Entity’s credit risk management practices. As all deposits are on demand or have maturity dates
of less than twelve months, the Group has assessed the credit risk on these financial assets using life time expected
credit losses. In this regard, the Group has concluded that the probability of default is insignificant.
For the purposes of the statement of cash flows, cash and cash
equivalents comprise the following at 30 June:
Cash at bank and in hand
Short-term deposits
11,190,038
174,361
11,364,399
31,219,845
15,000
31,234,845
CASH FLOW RECONCILIATION
Reconciliation of net profit after income tax to net cash flows from operating activities
(116,968,634)
Loss after income tax
35,085,583
Amortisation and depreciation
38,100
Fair value change in derivative financial instruments
-
Impairment loss on available-for-sale financial assets
Fair value change in financial assets through profit and loss
4,384,134
64,199,644
Impairment loss on assets
693,929
Share based payments
842,820
Unwinding of rehabilitation provision discount
6,569,771
Exploration and evaluation expenditure written off
-
Loss/(gain) on derivatives instruments
15,539
Loss/(gain) on disposal of property, plant and equipment
(5,139,114)
(26,297,186)
25,646,982
47,300
1,748,370
-
239,761
2,019,289
847,588
115,718
1,078,251
(634,659)
4,811,414
Changes in assets and liabilities
Increase in inventories
131,968
(11,639,588)
Decrease/(increase) in trade and other receivables and prepayments
Increase/(decrease) in trade and other creditors
Increase in provisions
Net cash flows from operating activities
(3,902,854)
(6,949,821)
698,421
(15,161,400)
31,199,922
2,709,850
214,232
27,295,830
- 72 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
12. TRADE AND OTHER RECEIVABLES (current)
Trade receivables at fair value (a)
Trade receivables at amortised cost (b)
Other debtors and cash call advances at amortised cost (c)
Allowance for expected credit loss (d)
2019
8,211,481
-
8,333,527
-
16,545,008
2018
2,048,186
4,528,645
7,099,345
-
13,676,176
(a)
As at 30 June 2019 tin concentrate sales of 215 tonnes (2018: 196) remained open to price adjustments.
Total copper concentrate sales for the period was 15,776 tonnes (2018: 15,738), out of which 3,721 tonnes
(2018: 3,990) of copper, provisionally sold at the reporting date, has been revalued at a weighted average price
of US$5,868 (2018: US$6,645). The fair value loss on provisionally priced trade receivables of $4,760,857 for
the period ended 30 June 2019 has been included as an expense in the statement of comprehensive income.
Trade receivables (subject to provisional pricing) are non-interest bearing, but are exposed to future commodity
price movements over the QP and, hence, fail the SPPI test and are measured at fair value up until the date of
settlement. These trade receivables are initially measured at the amount which the Consolidated Entity expects
to be entitled, being the estimate of the price expected to be received at the end of the QP. For copper
concentrate 90% of the provisional invoice (based on the provisional price) is received in cash within three weeks
of the shipment date. The period between provisional invoicing and the end of the QP can be up to three months
for copper concentrate. For tin concentrate 85% - 90% of the provisional invoice (based on the provisional price)
is received in cash within four weeks of the shipment date. The QP for tin concentrate is not expected to result
in a material adjustment due to the short period between the point of control of the concentrate passes to the
customer and the end of the QP. Refer to note 4(b) for details of fair value disclosures.
Trade receivables (not subject to provisional pricing) are non-interest bearing and are generally on 30 - 90 day
terms.
These primarily relate to cash calls advanced to the Bluestone Mines Tasmania Joint Venture Pty Ltd.
Credit quality of a customer is assessed based on individual credit limits. Outstanding customer receivables are
regularly monitored. At 30 June 2019, there are no receivables past due.
(b)
(c)
(d)
13.
INVENTORIES (current)
Ore stocks at net realisable value
Tin in circuit at cost
Tin concentrate at cost
Copper concentrate at net realisable value
Stores and spares at cost
Provision for obsolete stores and spares
Impairment of stores and spares
Total inventories at lower of cost and net realisable value
4,518,323
66,689
7,285,770
21,968,583
30,400,305
(9,093,494)
(9,287,398)
45,858,778
2,425,768
62,642
19,146,839
13,559,867
29,449,708
(9,366,712)
-
55,278,112
During the year there were write-downs of $17,021,511 (2018: $6,791,083) for the Consolidated Entity.
$7,734,113 (2018: $6,791,083) relates to the write down of stockpiles to its net realisable value and stores and
spares obsolescence provision which are included in cost of sales, refer to note 7(a). The remaining amount of
$9,287,398 (2018: nil) relates to an allocated impairment loss resulting from the assessment of the Nifty Copper
Operations CGU. Refer to note 39 for impairment disclosure details.
14. PREPAYMENTS (current)
Prepayments
15. OTHER FINANCIAL ASSETS (non-current)
Cash on deposit - performance bond facility
Total other financial assets
2,455,368
1,421,373
10,771,569
10,771,569
10,311,569
10,311,569
The cash on deposit is interest bearing and is used as security for government performance bonds. The fair
value approximates cost (refer to note 4(b)).
- 73 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
16. DERIVATIVE FINANCIAL INSTRUMENTS (non-current)
Derivatives held for trading
2019
2018
44,850
82,950
The Consolidated Entity holds 1,500,000 unlisted options in Brainchip Holdings Limited (Brainchip). The options
were acquired for nil cost as part of a capital raising. The fair value $7,350 (2018: $45,450) of the options at 30
June 2019 have been valued using a Black & Scholes model, which takes account of factors including the option
exercise price, the volatility of the underlying share price, the risk free rate, the market price of the underlying
share at grant date and the expected life of the option (refer to note 4(g)). At the end of the period the market
value of the investment was lower than the cost, the Company recognised a fair value movement of $38,100
(2018: $53,550).
The Consolidated Entity holds 1,250,000 listed options in Nelson Resources Limited (Nelson). The options were
acquired for nil cost as part of a capital raising. The fair value $37,500 (2018: 37,500) of the options at 30 June
2019 are based on quoted market prices. At the end of the period the market value of the investment was equal
to the carrying value.
17. FINANCIAL ASSETS (non-current)
Shares - Australian listed
2019
Financial
assets at fair
value through
profit and loss
243,586
2018
Available-for-
sale financial
assets
9,170,714
Listed shares
The fair value of listed equity investments has been determined directly by reference to published price quotations
in an active market.
The Company has a 9.21% (2018: 11.26%) interest in Nelson, which is involved in the exploration of base metals
in Australia. Nelson is listed on the ASX. During the period, the Company sold a portion of its investment in Nelson.
At the end of the period the fair value of the Company’s investment was $243,586 (2018: $718,534) which is
based on Nelson’s quoted share price. During the period, the Company recognised a fair value movement of
$382,210 (2018: Nil).
During the period the Company sold its interest in Brainchip (2018: 6.45%), an ASX listed company. At the end
of the previous period the fair value of the Company’s investment was $8,248,179 which was based on Brainchip’s
quoted share price. During the period, the Company recognised a fair value movement of $3,890,635 (2018:
$2,031,194).
During the period the Company sold its interest in Auris Minerals Limited (Auris) (2018: 0.74%), an ASX listed
company. At the end of the previous period the fair value of the Company’s investment was $204,000 which was
based on Auris quoted share price. During the period, the Company recognised a fair value movement of
$111,283 (2018: $33,000).
(a)
(b)
(c)
- 74 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
18. PROPERTY, PLANT & EQUIPMENT (non-current)
2019
2018
Plant and equipment
At cost
Accumulated depreciation
Impairment
Net carrying amount
Land and buildings
At cost
Accumulated depreciation
Impairment
Net carrying amount
Capital work in progress at cost
At cost
Impairment
Net carrying amount
86,263,260
(43,136,426)
(5,450,004)
37,676,830
66,499,298
(33,792,571)
-
32,706,727
9,703,426
(3,782,360)
(392,430)
5,528,636
7,952,369
(3,132,720)
-
4,819,649
3,260,226
-
3,260,226
11,059,353
-
11,059,353
Total property, plant and equipment
46,465,692
48,585,729
Movement in property, plant and equipment
Plant and equipment
At 1 July net of accumulated depreciation
Transfer from capital in progress
Disposals
Impairment (refer to note 39)
Depreciation charge for the year
At 30 June net of accumulated depreciation
Land and buildings
At 1 July net of accumulated depreciation
Transfer from capital in progress
Disposals
Impairment (refer to note 39)
Depreciation charge for the year
At 30 June net of accumulated depreciation
Capital work in progress
At 1 July
Additions
Transfer to mine properties & development
Transfer to plant and equipment
Transfer to land and buildings
At 30 June
32,706,727
20,325,109
(30,965)
(5,450,004)
(9,874,037)
37,676,830
4,819,649
1,751,057
-
(392,430)
(649,640)
5,528,636
31,235,048
10,840,874
(29,962)
-
(9,339,233)
32,706,727
4,944,663
499,379
-
-
(624,393)
4,819,649
11,059,353
15,180,457
(903,418)
(20,325,109)
(1,751,057)
3,260,226
4,287,271
26,716,929
(8,604,595)
(10,840,874)
(499,378)
11,059,353
The carrying value of plant and equipment held under finance leases and hire purchase contracts at 30 June 2019
is $10,714,343 (2018: $9,801,093). Value of plant and equipment leased under finance leases and acquired
through hire purchase contracts is $4,337,734 (2018: $5,705,651).
Leased assets and assets under hire purchase contracts are pledged as security for the related finance lease and
hire purchase lease liabilities (refer to notes 25 and 26).
In 2019, a recoverable amounts assessment of the Nifty Copper Operations property, plant and equipment was
conducted which resulted in an impairment loss of $5,842,434 (refer to note 39).
- 75 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
19. MINE PROPERTY AND DEVELOPMENT (non-current)
2019
2018
Development areas at cost
At cost
Impairment
Net carrying amount
Mine site establishment
At cost
Accumulated amortisation
Net carrying amount
Mine capital development
At cost
Accumulated amortisation
Impairment
Net carrying amount
72,599,409
(72,490,411)
108,998
72,505,411
(72,490,411)
15,000
41,460,789
(30,351,669)
11,109,120
39,812,550
(26,820,392)
12,992,158
188,482,954
(108,084,128)
(49,069,811)
31,329,015
154,333,943
(87,053,498)
-
67,280,445
Total mine properties and development
42,547,133
80,287,603
Movement in mine properties and development
Development areas at cost
At 1 July
Additions
Impairment (refer to note 39)
Transfer to mine site establishment
At 30 June
Mine site establishment
At 1 July net of accumulated amortisation
Additions
Impairment (refer to note 39)
Transfer from capital work in progress (refer to note 18)
Transfer from development areas
(Decrease)/increase in rehabilitation provision
Amortisation charge for the year
At 30 June net of accumulated amortisation
Mine capital development
At 1 July net of accumulated amortisation
Additions
Impairment (refer to note 39)
Transfer from capital work in progress (refer to note 18)
Adjustment to rehabilitation liability (refer to note 24)
Amortisation charge for the year
At 30 June net of accumulated amortisation
15,000
93,998
-
-
108,998
12,992,158
664,111
-
903,418
-
80,710
(3,531,277)
11,109,120
67,280,445
33,757,972
(49,069,811)
-
391,039
(21,030,630)
31,329,015
15,000
239,761
(239,761)
-
15,000
4,437,469
458,871
-
8,604,595
-
1,106,400
(1,615,177)
12,992,158
72,917,741
9,728,568
-
-
(1,297,683)
(14,068,181)
67,280,445
In the previous period there was an update to the Mineral Resource and Ore Reserve estimates of the Nifty copper
operations. This resulted in an increase in Ore Reserves to 237,500 tonnes of contained copper and an extension
of the mine life to seven years. This resulted in a decrease in amortisation expense by $2,008,659.
In 2019, a recoverable amounts assessment of the Nifty Copper Operations mine, properties and development
was conducted which resulted in an impairment loss of $49,069,811 (refer to note 39).
- 76 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
20. EXPLORATION EXPENDITURE (non-current)
2019
2018
Exploration and evaluation costs carried forward in respect of mining
areas of interest
Pre-production areas
At Cost
Accumulated impairment
Net carrying amount
10,178,774
-
10,178,774
11,242,392
-
11,242,392
Movement in deferred exploration and evaluation expenditure
At 1 July net of accumulated impairment
Additions
Adjustment to rehabilitation liability (refer to note 24)
Expenditure written off
At 30 June net of accumulated impairment
11,242,392
5,506,154
-
(6,569,772)
10,178,774
4,892,164
6,465,945
-
(115,717)
11,242,392
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the
successful development and commercial exploitation or sale of the respective mining areas. Amortisation of the
costs carried forward for the development phase is not recognised pending the commencement of production.
During the year a review was undertaken for each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest. In assessing the carrying value of all of the Consolidated
Entity’s projects certain expenditure on exploration and evaluation of mineral resources has not led to the
discovery of commercially viable quantities of mineral resources. As a result exploration and evaluation
expenditure of $6,569,771 (2018: $115,717) was written off to the profit and loss. In the current period the amount
relates to mainly tenements in the copper division which were written down to nil as the expenditure did not result
in the discovery of commercially viable quantities of mineral resources and as a result there is no future benefits
expected.
21. TRADE AND OTHER PAYABLES (current)
Trade creditors (a)
Sundry creditors and accruals (b)
13,462,805
11,979,019
25,441,824
16,391,970
15,294,822
31,686,792
(a) Trade creditors are non-interest bearing and generally on 30 day terms.
(b) Sundry creditors and accruals are non-interest bearing and generally on 30 day terms.
Due to the short term nature of these payables, their carrying value approximates their fair value.
22. DERIVATIVE FINANCIAL INSTRUMENTS (current)
Forward commodity options
-
-
1,078,251
1,078,251
The forward commodity options relate to a put and call granted over 1,500 tonnes of copper due for settlement in
July 2018. The put has a strike price of $7,800 per tonne and the call has a strike price as of $8,255 per tonne of
LME copper. The fair value is based on the applicable LME prices.
23. PROVISIONS (current)
Provision for annual leave
Provision for sick leave
Provision for long service leave
Provision for fringe benefits tax payable
(a)
The nature of the provisions are described in note 2(l) and 2(aa).
6,154,800
36,794
1,626,107
-
7,817,701
4,640,632
76,853
2,035,169
-
6,752,654
- 77 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
24. PROVISIONS (non-current)
Provision for long service leave (a)
Provision for rehabilitation (b)
2019
1,317,066
40,951,547
42,268,613
2018
1,316,057
39,636,978
40,953,035
(a)
(b)
Provision for long service leave
The nature of the provisions are described in note 2(l) and 2(aa).
Provision for rehabilitation
Environmental obligations associated with the retirement or disposal of mining properties and/or of exploration
activities are recognised when the disturbance occurs and are based on the extent of the damage incurred. The
provision is measured as the present value of the future expenditure. The rehabilitation liability is remeasured at
each reporting period in line with the change in the time value of money (recognised as an interest expense in the
statement of comprehensive income and an increase in the provision), and additional disturbances/change in the
rehabilitation cost are recognised as additions/changes to the corresponding asset and rehabilitation liability.
(c)
Current and non-current movements in provisions
At 1 July
Arising during the year
Rehabilitation expenditure
Unwind of discount
At 30 June
39,636,978
471,749
-
842,820
40,951,547
38,980,674
(191,284)
-
847,588
39,636,978
25.
INTEREST BEARING LOANS AND BORROWINGS (current)
Lease liability
5,043,404
4,848,201
Represents current portion of finance leases which have repayment terms of 36 months.
26.
INTEREST BEARING LOANS AND BORROWINGS (non-current)
Lease liability
4,310,335
5,522,351
Represents non-current portion of finance leases which have repayment terms of 36 months from inception.
The carrying amount of the Consolidated Entity's non-current loans and borrowings approximate their fair value.
The weighted average interest rate is 5.12% (2018: 4.45%) per annum.
Financing facilities available
At reporting date, the following financing facilities were available:
Total facilities
- finance lease facility
Facilities used at reporting date
- finance lease facility
Borrowing Base Facility
9,353,739
9,353,739
10,370,552
10,370,552
9,353,739
10,370,552
The Consolidated Entity has a borrowing base facility of US$20,000,000 with Citibank N.A., which is secured by
copper concentrate inventories and copper trade receivables when drawn down. The facility was undrawn at the
balance date.
Assets pledged as security:
The carrying amounts of assets pledged as security for current and non-current interest bearing liabilities are:
Non-current
Finance lease
Plant and equipment
Total non-current assets pledged as security
10,714,343
10,714,343
9,801,093
9,801,093
Plant and equipment assets are pledged against lease liabilities for the term of the lease period.
- 78 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
27.
(a)
ISSUED CAPITAL
Ordinary Shares
Issued and fully paid
(b)
Movements in ordinary shares on issue
At 1 July 2017
Issue share capital
Issue share capital under dividend reinvestment plan
Share issue costs
At 30 June 2018
Issue share capital
Share issue costs
At 30 June 2019
2019
2018
302,004,550
254,586,744
Number
$
609,340,903
700,000
2,096,529
-
612,137,432
76,923,076
-
689,060,508
252,511,413
532,000
1,557,192
(13,861)
254,586,744
50,000,000
(2,582,194)
302,004,550
Dividend Reinvestment Plan
The Company operates a dividend reinvestment plan (DRP) which allows eligible shareholders to elect to invest
dividends in ordinary shares.
2018
The Company paid an unfranked dividend of 1.00 cent per share with a record date of 7 September 2017 and
paid on 19 September 2017. The Company offered a DRP at a 5% discount to the 5 day VWAP. Under the
offer 2,096,529 shares were issued at $0.7428 per share on 19 September 2017.
2019
There were no shares issued under the DRP in the 2019 financial year.
(c) Terms and conditions of contributed equity
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at shareholder meetings. In the event of winding up the Company the holders are entitled to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up
on shares held.
Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par
share values. Accordingly, the Parent does not have authorised capital nor par value in respect of its issued shares.
(d) Escrow restrictions
There are no current escrow restrictions on the issued capital of the Company.
(e) Options on issue
Unissued ordinary shares of the company under option at the date of this report are as follows:
Type
Unlisted*
Unlisted*
Unlisted*
Unlisted*
Unlisted*
Unlisted*
Unlisted*
Unlisted*
Total
Expiry Date
20 January 2020
30 November 2020
22 January 2022
22 January 2023
22 January 2024
30 June 2022
30 June 2023
30 June 2024
Exercise Price
$0.76
$1.32
$0.54
$0.56
$0.58
$0.00
$0.00
$0.00
Number of options
4,150,000
5,650,000
1,000,000
1,000,000
1,000,000
1,185,094
1,185,094
14,003,014
29,173,202
*
These options were issued pursuant to the Metals X Limited Employee Option Scheme and can only be
exercised pursuant to the scheme rules.
Share options carry no right to dividends and no voting rights.
- 79 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
28. ACCUMULATED LOSSES
At 1 July
New accounting standards adjustment to opening balances (note
2(e))
Restated at 1 July
Net loss in current period attributable to members of the parent entity
Dividends paid
At 30 June
2019
2018
(115,249,072)
(82,858,477)
3,762,167
(111,486,905)
(116,968,634)
-
(228,455,539)
-
(82,858,477)
(26,297,186)
(6,093,409)
(115,249,072)
29. RESERVES
At 30 June 2017
Share based payments
Fair value change in available-for-sale financial assets
At 30 June 2018
New accounting standards adjustment to opening balances
(note 2(e))
Restated at 1 July 2018
Share based payments
At 30 June 2019
Share based
payments
reserve
$
Fair value
reserve
$
Total
$
25,331,051
2,019,289
-
27,350,340
3,762,167
-
-
3,762,167
29,093,218
2,019,289
-
31,112,507
-
27,350,340
693,929
28,044,269
(3,762,167)
-
-
-
(3,762,167)
27,350,340
693,929
28,044,269
Nature and purpose of reserves
Fair value reserve
This reserve records the movements in the fair value of available-for-sale investments.
Share based payments reserve
This reserve is used to recognise the fair value of rights and options issued to employees in relation to equity-
settled share based payments.
30. SHARE-BASED PAYMENTS
2019
2018
(a)
Recognised share-based payment expense
The expense recognised for services received during the year is
shown in the table below:
Expense arising from equity-settled share-based payments
693,929
2,019,289
The share-based payment plan is described below. There have been no cancellations or modifications
to the plan during 2019 and 2018.
(b) Long Term Incentive Plan
Under the Long Term Incentive Plan (LTIP), grants are made to senior executives and other staff members who
have made an impact on the Consolidated Entity’s performance. LTIP grants for FY2018 and FY2019 were
delivered in the form of share options, which vest over a period of one year with no other performance conditions.
Following a remuneration review during the period, the long term incentive policy was amended to focus the efforts
of executives on long term value creation to further align management’s interests with those of the shareholders.
Accordingly from FY2019 onwards LTIP grants were issued in the form of performance options, which will vest over
a period of two to three years subject to meeting performance measures, with no opportunity to retest.
(i) Share Options
Share options are issued for nil consideration. The exercise price of the share options is equal to 125% - 135% of
the weighted average closing sale price of the Company’s fully paid ordinary shares on ASX over the 5 trading days
immediately preceding the day on which the options are awarded. Any options that are not exercised by the third
anniversary of their grant date will lapse. Upon exercise, the options will be settled in ordinary fully paid shares of
the Company. These options will vest when the senior executive or other staff member continues to be employed
by the Consolidated Entity on the first anniversary of the grant date or as determined by the Board of Directors.
- 80 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
30. SHARE-BASED PAYMENTS (continued)
Summary of share options granted under the Long Term Incentive Plan
The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share
options issued under the LTIP.
2019
Number
2019
WAEP
2018
Number
2018
WAEP
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Lapsed/cancelled during the year
Outstanding at the year end
13,350,000
3,000,000
-
(3,550,000)
12,800,000
1.07
0.56
-
1.04
0.96
7,250,000
8,100,000
(700,000)
(1,300,000)
13,350,000
0.76
1.32
0.76
1.06
1.07
Exercisable at the year end
9,800,000
1.08
5,950,000
0.76
The outstanding balance as at 30 June 2019 is represented by the following table:
Grant
Date
Vesting
date
Expiry
date
Exercise
Price
Options
granted
Options
lapsed /
cancelled
24 Nov16
20 Jan 17
22 Nov 17
23 Nov 17
25 Jan 19
25 Jan 19
25 Jan 19
Total
20 Jan 18
20 Jan 18
30 Nov 18
30 Nov 18
22 Jan 20
22 Jan 21
22 Jan 22
20 Jan 20
20 Jan 20
30 Nov 20
30 Nov 20
22 Jan 22
22 Jan 23
22 Jan 24
$0.76
$0.76
$1.32
$1.32
$0.54
$0.56
$0.58
2,000,000
5,250,000
3,200,000
4,900,000
1,000,000
1,000,000
1,000,000
-
(2,400,000)
-
(2,450,000)
-
-
-
Options
exercised
Number of options at
end of period
On issue
- 2,000,000
(700,000) 2,150,000
- 3,200,000
- 2,450,000
- 1,000,000
- 1,000,000
- 1,000,000
Vested
2,000,000
2,150,000
3,200,000
2,450,000
-
-
-
18,350,000
(4,850,000)
(700,000) 12,800,000
9,800,000
Weighted average remaining contractual life of share options
The weighted average remaining contractual life for the share options outstanding as at 30 June 2019 is 1.53
(2018: 2.04).
Range of exercise price of share options
The range of exercise prices for options outstanding at the end of the year $0.54 - $1.32 (2018: $0.76 - $1.32).
Weighted average fair value of share options
The weighted average fair value of options granted during the year was $0.14 (2018: $0.22).
Share option valuation
The fair value of the equity-settled share options granted under the LTIP is estimated at the date of grant using a
Black & Scholes model, which takes into account factors including the options exercise price, the volatility of the
underlying share price, the risk-free interest rate, the market price of the underlying share at grant date, historical
and expected dividends and the expected life of the option.
The following table gives the assumptions made in determining the fair value of the options granted:
Grant date
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (yrs)
Options exercise price ($)
Share price at grant date ($)
Fair value at grant date ($)
25 January 2019
52%
1.86%
4.0
$0.56
$0.43
$0.145
25 January 2019
52%
1.96%
5.0
$0.58
$0.43
$0.163
2019
25 January 2019
52%
1.81%
3.0
$0.54
$0.43
$0.124
- 81 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
30. SHARE-BASED PAYMENTS (continued)
Grant date
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (yrs)
Options exercise price ($)
Share price at grant date ($)
Fair value at grant date ($)
2018
22 November 2017
50%
1.90%
2.5
$1.32
$1.05
$0.25
23 November 2017
50%
1.90%
2.5
$1.32
$1.03
$0.24
The effects of early exercise have been incorporated into the calculations by using an expected life for the option
that is shorter than the contractual life based on historical exercise behaviour, which is not necessarily indicative of
exercise patterns that may occur in the future. The expected volatility was determined using a historical sample of
the Company’s share price over a 12 month period. The resulting expected volatility therefore reflects the
assumptions that the historical volatility is indicative of future trends, which may also not necessarily be the actual
outcome.
(ii) Performance Options
Performance options are issued for nil consideration. The performance options vest over a measurement period of
two to three years subject to meeting performance measures. The Company uses relative shareholder return and
return on capital employed as the performance measures for the performance options. Any performance options
that do not vest on the second or third anniversary of their grant date will lapse. Upon vesting these performance
options will convert into an option to acquire ordinary fully paid shares of the Company for nil consideration. Any
performance options that are not exercised by the second anniversary of their vesting date will lapse.
Summary of performance options granted under the Long Term Incentive Plan
The following table illustrates the number and movements in, performance share options issued under the
LTIP.
2019
Number
2019
WAEP
2018
Number
2018
WAEP
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Lapsed/cancelled during the year
Outstanding at the year end
Exercisable at the year end
-
2,682,990
-
(166,828)
2,516,162
-
-
-
-
-
-
-
The outstanding balance as at 30 June 2019 is represented by the following table:
-
-
-
-
-
-
-
-
-
-
-
-
Grant
Date
Vesting
date
Expiry
date
Exercise
Price
Options
granted
Options
lapsed /
cancelled
Options
exercised
Number of options at
end of period
7 Dec 18
7 Dec 18
Total
1 Jul 20
1 Jul 21
30 Jun 22
30 Jun 23
$0.00 1,341,495
$0.00 1,341,495
2,682,990
(83,414)
(83,414)
(166,828)
Exercise price of performance options
Performance options on issue as part of LTIP have a nil exercise price.
On issue
- 1,258,081
- 1,258,081
- 2,516,162
Vested
-
-
-
Performance conditions
The performance options have the following performance hurdles, which will be measured over the measurement
period from grant date:
• The Relative Total Shareholder Return (“TSR”) performance options (50% of total performance options) are
measured against the S&P/ASX Metals and Mining Index, which the Board considers compete with the
Company for the same investment capital, both in Australia and overseas, and which by the nature of their
business are influenced by commodity prices and other external factors similar to those that impact on the TSR
performance of the Company.
- 82 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
30. SHARE-BASED PAYMENTS (continued)
The vesting schedule for the Relative TSR measure is as follows:
Relative TSR Performance
Below Index
Equal to the Index
% Contribution to the Number of
Employee Options to Vest
0%
50%
Above Index and below 15% above the Index
Pro-rata from 50% to 100%
15% above the Index
100%
• Return on Capital Employed (“ROCE”) performance options (50% of total performance share options) measures
the efficiency with which management uses capital in seeking to increase shareholder value.
The vesting schedule for the ROCE measure is as follows:
ROCE Performance
% Contribution to the Number of
Employee Options to Vest
Less than or equal to the average annual weighted average cost of capital (WACC
WACC (calculated as above ) + 3%
0%
50%
WACC (calculated as above ) + between 3% and 6%
Pro-rata from 50% to 100%
WACC (calculated as above ) + 6%
100%
Measurement period
The performance options are subject to two performance periods:
•
50% of the Relative TSR and ROCE performance options will be measured against the performance measures
for a two year period from 1 July 2018 to 30 June 2020.
•
50% of the Relative TSR and ROCE performance options will be measured against the performance measures
for a three year period from 1 July 2018 to 30 June 2021.
Weighted average fair value of performance rights
The weighted average fair value of performance options granted during the year was nil (2018: nil).
Performance share options valuation
The fair value of the performance share options granted are estimated using a Monte Carlo Simulation option
pricing model, taking into account the terms and conditions upon which the performance share options were
granted.
Details
Grant date
Valuation date
Measurement date
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (yrs)
Options exercise price ($)
Share price at grant date ($)
Fair value at grant date ($)
Details
Grant date
Valuation date
Measurement date
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (yrs)
Options exercise price ($)
Share price at grant date ($)
Fair value at grant date ($)
2019
Tranche 1
Relative Total Shareholder Return
23 November 2017
1 July 2018
30 June 2020
50%
2.00%
2.0
$0.00
$0.80
$0.26
Return on Capital Employed
22 November 2017
1 July 2018
30 June 2020
50%
2.00%
2.0
$0.00
$0.80
$0.80
Tranche 2
Relative Total Shareholder Return
23 November 2017
1 July 2018
30 June 2021
50%
2.07%
3.0
$0.00
$0.80
$0.27
Return on Capital Employed
22 November 2017
1 July 2018
30 June 2021
50%
2.07%
3.0
$0.00
$0.80
$0.80
- 83 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
31. CONTINGENT ASSETS AND LIABILITIES
Bank guarantees
The Consolidated Entity has a number of bank guarantees in favour of various government authorities and
service providers. The bank guarantees primarily relate to environmental and rehabilitation bonds at the
various projects. The total amount of these guarantees at the reporting date is $10,771,569 (2018:
$10,311,569). These bank guarantees are fully secured by performance bonds (refer to note 15).
32. AUDITOR'S REMUNERATION
2019
2018
Amounts received or due and receivable by Ernst & Young
(Australia) for:
An audit or review of financial reports of the entity and any other entity
within the Consolidated Entity
Other services in relation to the entity and any other entity in the
Consolidated Entity:
- tax compliance
- stamp duty compliance
An audit or review of financial reports of the entity and any other entity
within the Consolidated Entity
Total auditor remuneration
335,692
225,730
54,500
-
-
390,192
187,483
24,481
-
437,694
33. COMMITMENTS
(a)
Capital commitments
Commitments relating to joint arrangements
At 30 June 2018 the Consolidated Entity has capital commitments that relate principally to the purchase and
maintenance of plant and equipment for its mining operations.
Capital expenditure commitments
Estimated capital expenditure contracted for at reporting date, but not recognised as liabilities for the
Consolidated Entity:
- Within one year
1,399,708
5,145,233
(b)
Operating lease commitments - Consolidated Entity as lessee
The Company has entered into commercial property leases on office rental and remote area residential
accommodation. The Company has entered into commercial leases on office equipment. These operating
leases have an average life of between one month and three years with renewal options included in the
contracts. The Company also has commercial leases over the tenements in which the mining operations are
located. These tenement leases have a life of up to twenty one years. In order to maintain current rights to
explore and mine the tenements the Consolidated Entity is required to perform minimum exploration work to
meet the expenditure requirements specified by the relevant state governing body. There are no restrictions
placed on the lessee by entering into these contracts. The operating lease commitments include Joint
Operation commitments as disclosed in note 34.
Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:
(i)
Property leases as lessee:
- Within one year
- After one year but not more than five years
(ii)
Equipment leases:
- Within one year
- After one year but not more than five years
- After more than five years
197,587
246,520
444,107
285,531
102,553
-
388,084
109,360
453,767
563,127
3,499,269
2,210,241
155,279
5,864,789
- 84 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
33. COMMITMENTS (continued)
(iii) Mineral tenement leases:
- Within one year
- After one year but not more than five years
- After more than five years
2019
1,153,952
3,543,534
6,947,291
11,644,777
2018
782,819
2,876,954
7,020,966
10,680,739
(c)
Operating lease commitments - Consolidated Entity as lessor
The Company has entered into property leases on remote area residential accommodation that it sub-leases
to employees. These property leases have an average life of between one month and one year with renewal
options included in the contracts. The property lease commitments include Joint Operation commitments as
disclosed in note 34.
Future minimum rentals receivable under non-cancellable operating leases as at 30 June are as
follows:
(i)
Property leases as lessor:
- Within one year
- After one year but not more than five years
(d)
Finance lease and hire purchase commitments
11,309
-
11,309
22,126
4,843
26,969
The Company has finance leases and hire purchase contracts for various items of plant and machinery. The
leases do have terms of renewal but no escalation clauses. Renewals are at the option of the specific entity
that holds the lease. The finance and hire purchase contracts have an average term of 36 months with the right
to purchase the asset at the completion of the lease term for a pre-agreed amount.
Future minimum lease payments under finance leases and hire purchase contracts together with the present
value of the minimum lease payments are as follows:
Within one year
After one year but not more than five years
Total minimum lease payments
Less amounts representing finance charges
Present value of minimum lease payments
Within one year
After one year but not more than five years
Total minimum lease payments
Less amounts representing finance charges
Present value of minimum lease payments
Included in the financial statements as:
2019
Minimum lease
payments
Present value of
lease payments
5,394,957
4,430,023
9,824,980
(471,241)
9,353,739
2018
5,043,404
4,310,335
9,353,739
-
9,353,739
Minimum lease
payments
Present value of
lease payments
5,205,554
5,721,986
10,927,540
(556,988)
10,370,552
4,848,201
5,522,351
10,370,552
-
10,370,552
2019
2018
Current interest-bearing loans and borrowings (note 25)
Non-current interest-bearing loans and borrowings (note 26)
Total included in interest-bearing loans and borrowings
5,043,404
4,310,335
9,353,739
4,848,201
5,522,351
10,370,552
The weighted average interest rate of leases for the Company is 5.12% (2018: 4.45%).
(e)
Other commitments
The Consolidated Entity has obligations for various expenditures such as state government royalties,
production based payments and exploration expenditure. Such expenditures are predominantly related to the
earning of revenue in the ordinary course of business.
- 85 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
34.
INTERESTS IN JOINT OPERATIONS
The Consolidated Entity's interest in the assets and liabilities of joint operations are included in the consolidated
statement of financial position.
RENISON TIN OPERATIONS
Subsidiary Bluestone Mines Tasmania Pty Ltd has a 50% interest and participating share in the Renison Tin
Operations which is operated and managed by Bluestone Mines Tasmania Joint Venture Pty Ltd. The
Consolidated Entity is entitled to 50% of the production. The Renison Tin Operations is located in Tasmania.
Commitments relating to the joint operation:
2019
2018
Share of capital commitments (refer to note 33(a))
515,192
1,477,690
Share of operating lease commitments (refer to note 33(b))
Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:
Operating lease commitments - joint operation as lessee
(i)
Property leases as lessee:
- Within one year
(ii)
Equipment leases:
- Within one year
- After one year but not more than five years
(iii) Mineral tenement leases:
- Within one year
- After one year but not more than five years
- After more than five years
Operating lease commitments - joint operation as lessor
(i)
Property leases as lessor:
- Within one year
- After one year but not more than five years
9,947
9,947
4,902
3,640
8,542
60,013
220,345
385,604
665,962
2,979
2,979
4,938
3,654
8,592
53,738
214,951
429,902
698,591
11,309
-
11,309
22,126
4,843
26,969
Impairment
During the year reversal of write-downs of inventory of $256 (2018: $4,358) were recognised in the joint
operation.
35. SEGMENTS
For management purposes, the Consolidated entity is organised into operating segments determined by the
similarity of the mineral being mined or explored, as these are the sources of the Consolidated Entity’s major
risks and have the most effect on rates of return
The Consolidated Entity comprises the following reportable segments:
- Renison Tin Operations:
- Wingellina Nickel Project:
- Nifty Copper Operations:
- Maroochydore Copper Project:
Mining, treatment and marketing of tin concentrate.
Exploration and development of nickel assets.
Mining, treatment and marketing of copper concentrate.
Exploration and development of copper assets.
Executive management monitors the operating results of its operating segments separately for the purpose of
making decisions about resource allocation and performance assessment. Segment performance is evaluated
based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated
financial statements. Inter-segment revenues are eliminated upon consolidation. All other adjustments and
eliminations are part of the detailed reconciliations presented further below.
- 86 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
35. SEGMENTS (continued)
The following table presents revenue and profit information for reportable segments for the years ended 30
June 2019 and 30 June 2018.
Year ended
30 June 2019
Renison Tin
Operations
Nifty Copper
Operations
Maroochydore
Copper
Project
Wingellina
Nickel
Project
Adjustments
and
eliminations
Total
Revenue
External customers
85,276,228
119,445,784
Total revenue
85,276,228
119,445,784
-
-
-
-
-
-
204,722,012
204,722,012
Results
Depreciation and
amortisation
Exploration and
evaluation expenditure
written off
(14,757,984)
(20,134,407)
-
(56,851)
-
(34,949,242)
(256)
(6,558,463)
(11,053)
Impairment of assets
-
(64,199,644)
Segment profit
6,695,897
(115,639,861)
(11,053)
-
-
-
Total assets
84,749,512
67,326,294
5,929,277
2,357,095
Total liabilities
(14,118,071)
(68,682,599)
-
(69,240)
-
-
(6,569,772)
(64,199,644)
-
(108,955,017)
-
-
160,362,178
(82,869,910)
Other disclosures
Capital expenditure
(9,034,209)
(39,598,992)
(899,853)
(1,187,766)
-
(50,720,820)
Year ended
30 June 2018
Renison Tin
Operations
Nifty Copper
Operations
Maroochydore
Copper
Project
Wingellina
Nickel
Project
Adjustments
and
eliminations
Total
Revenue
External customers
81,929,241
127,972,186
Total revenue
81,929,241
127,972,186
-
-
-
-
-
-
209,901,427
209,901,427
Results
Depreciation and
amortisation
Exploration and
evaluation expenditure
written off
(12,535,023)
(12,888,303)
-
(81,439)
-
(25,504,765)
(4,538)
-
(7,996)
(103,184)
Impairment of assets
-
(239,761)
Segment profit
23,930,358
(31,566,515)
(7,996)
(342,945)
Total assets
102,494,118
101,021,499
5,042,672
1,162,345
-
-
-
-
(115,718)
(239,761)
(7,987,098)
209,720,634
Total liabilities
(19,113,945)
(67,293,691)
-
(56,883)
-
(86,464,519)
Other disclosures
Capital expenditure
(21,361,744)
(12,290,970)
(2,628,769)
(1,308,239)
-
(37,589,722)
Reconciliation of segment results to consolidated results
Finance income and costs, fair value gains and losses on financial assets are not allocated to individual
segments as the underlying instruments are managed on a Consolidated Entity basis.
Current taxes, deferred taxes, cash and certain financial assets and liabilities are not allocated to those
segments as they are also managed on a Consolidated Entity basis.
Capital expenditure consists of additions of property, plant and equipment, mine properties and development
and exploration and evaluation expenditure including assets from the acquisition of subsidiaries.
Corporate charges comprise non-segmental expenses such as head office expenses and interest. Corporate
charges are not allocated to operating segments.
- 87 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
35. SEGMENTS (continued)
(a) Reconciliation of profit/(loss)
2019
2018
Segment profit
Corporate administration expenses
Corporate interest income
Corporate other income
Finance costs
Fair value change in financial assets
Impairment loss on available-for-sale financial assets
Share-based payments
Loss on derivative instruments
Net loss on disposal of assets
(108,955,017)
(6,732,351)
807,144
128,340
(1,472,286)
(4,422,234)
-
(693,929)
4,387,238
(15,539)
(7,987,098)
(4,478,838)
680,102
502,434
(1,469,351)
(47,300)
(1,748,370)
(2,019,289)
(10,364,135)
634,659
Total consolidated profit before income tax from continuing
operations
(116,968,634)
(26,297,186)
(b) Reconciliation of assets
Segment operating assets
Unallocated corporate assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Other financial assets
Derivative financial instruments
Financial assets (non-current)
Property, plant and equipment
Total consolidated assets
(c) Reconciliation of liabilities
Segment operating liabilities
Unallocated corporate liabilities
Trade and other payables
Derivative financial instruments
Provision for employee benefits
Interest bearing loans and borrowings
Total consolidated liabilities
(d) Segment revenue from external customers
Segment revenue
Total revenue
160,362,178
209,720,634
11,183,420
3,011,559
141,224
10,771,569
44,850
243,585
716,826
186,475,211
30,971,488
167,408
158,770
10,311,569
82,950
9,170,713
707,931
261,291,463
82,869,910
86,464,519
1,277,901
-
650,168
83,898
84,881,877
2,238,622
1,078,251
1,036,936
22,956
90,841,284
204,722,012
204,722,012
209,901,427
209,901,427
Revenue from external customers by geographical locations is detailed below. Revenue is attributable to
geographical location based on the location of the customers. The Company does not have external revenues
from external customers that are attributable to any foreign country other than as shown.
South East Asia
Total revenue
204,722,012
204,722,012
209,901,427
209,901,427
In the current period the Consolidated Entity had three customers to which it provides tin and copper. The
Consolidated Entity sends its tin and copper concentrates to three South East Asian customers that accounts
for 100% of total external revenue (2018: 100%). The Renison Tin Operations, Customer 1 and Customer 2
provided 12% and 29% respectively of total external revenue (2018: 8% and 33%). The Nifty Copper Operations,
Customer 1 provided 59% of total external revenue (2018: 59%).
(e) Segment non-current assets, excluding financial assets, are all located in Australia.
- 88 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
36. KEY MANAGEMENT PERSONNEL
(a)
Details of Key Management Personnel
(i)
Non-Executive Directors (NEDs)
PJ Newton
SD Heggen
M Jerkovic
DM Marantelli
Y Zhang
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Managing Director
Non-Executive Director
Appointed
Resigned
14 December 2012
25 October 2012
1 May 2017
3 September 2018
9 January 2017
-
-
-
12 November 2018
-
(ii)
Executive Directors
WS Hallam
DM Marantelli
(iii) Other Executives (KMPs)
Managing Director
Managing Director
1 March 2005
12 November 2018
12 November 2018
-
CC Baird
RL Cole
JR Croall
AH King
M Recklies
SB Rigby
SD Robinson
FJ Van Maanen
EGM - Mining & Technical
General Manager - Nifty
General Manager - Nifty
Chief Operating Officer
General Manager - Renison
EGM - Geology & Business
Development
EGM - Projects & Planning
CFO & Company Secretary
3 September 2018
23 August 2018
2 November 2017
24 February 2014
24 March 2017
-
-
6 July 2018
12 November 2018
-
5 June 2018
25 November 2016
1 July 2005
-
-
-
There are no other changes of the key management personnel after the reporting date and before the date the
financial report was authorised for issue.
(b)
Compensation of Key Management Personnel
Short-term employee benefits
Post employment benefits
Other long-term benefits
Share-based payment
Termination payments
2019
2018
3,154,998
300,190
218,248
535,127
553,594
4,762,157
2,923,441
194,754
8,610
1,320,478
-
4,447,283
The amounts disclosed in the table are the amounts recognised as an expense during the period related to key
management personnel.
(c) Loans to Key Management Personnel
There were no loans to key management personnel during the current or previous financial year.
(d)
Interest held by Key Management Personnel under the Long Term Incentive Plan
Share options* and performance options** held by key management personnel under the long term
incentive plan to purchase ordinary shares:
Grant date
Expiry date
Exercise price $
2019
2018
24 November 2016 *
20 January 2017 *
22 November 2017 *
23 November 2017 *
7 December 2018 **
7 December 2018 **
25 January 2019 *
25 January 2019 *
25 January 2019 *
20 January 2020
20 January 2020
30 November 2020
30 November 2020
30 June 2022
30 June 2023
22 January 2022
22 January 2023
22 January 2024
0.76
0.76
1.32
1.32
-
-
0.54
0.56
0.58
Total
2,000,000
1,200,000
3,200,000
1,200,000
732,078
732,078
1,000,000
1,000,000
1,000,000
12,064,156
2,000,000
3,000,000
3,200,000
2,700,000
-
-
-
-
-
10,900,000
- 89 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
37. RELATED PARTY DISCLOSURES
(a)
Subsidiaries
The consolidated financial statements of the Consolidated Entity include Metals X Limited and the subsidiaries
listed in the following table:
Name
Bluestone Australia Pty Ltd
Metals Exploration Pty Ltd
Cupric Pty Ltd
Country of
incorporation
Australia
Australia
Australia
Ownership interest
2019
2018
100%
100%
100%
100%
100%
100%
companies
Subsidiary
Australia Pty Ltd
Bluestone Mines Tasmania Pty Ltd
of Bluestone
Australia
100%
100%
Subsidiary companies of Metals Exploration
Pty Ltd
Austral Nickel Pty Ltd
Hinckley Range Pty Ltd
Metex Nickel Pty Ltd
Subsidiary companies of Cupric Pty Ltd
Nifty Copper Pty Ltd
Maroochydore Copper Pty Ltd
Ultimate parent
Metals X Limited is the ultimate parent entity.
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Key management personnel
Details relating to key management personnel, including remuneration paid, are included in note 36.
Transactions with related parties
2019
2018
Jointly controlled operations
Amounts charged by Bluestone Australia Pty Ltd and Metals X Limited
to Bluestone Mines Tasmania Joint Venture Pty Ltd for services
provided *
488,186
276,741
Related parties
Amounts charged by Xavier Group Pty Ltd to Metals X Limited for
corporate advisory services provided.**
205,000
-
Subsidiary Bluestone Mines Tasmania Pty Ltd has a 50% interest in the Renison Tin Operations accounted for
as a joint operation.
M Jerkovic is a director of Xavier Group Pty Ltd.
(b)
(c)
(d)
(i)
(ii)
*
**
- 90 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
38.
INFORMATION RELATING TO METALS X LIMITED ("THE PARENT ENTITY")
Current assets
Total assets
Current Liabilities
Total Liabilities
Issued capital
Accumulated losses
Option premium reserve
Other reserves
Total Equity
2019
24,780,214
82,123,588
785,949
785,949
2018
41,361,344
147,111,691
3,308,420
3,308,420
311,284,548
(257,991,179)
28,044,270
-
263,866,743
(151,175,979)
27,350,340
3,762,167
81,337,639
143,803,271
Loss of the parent entity
Total comprehensive loss of the parent entity
(96,830,093)
(96,830,093)
(11,885,961)
(11,885,961)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries.
Pursuant to ASIC Instrument 2016/785, Metals X and its wholly owned subsidiaries (refer to note 37(a) entered
into a deed of cross guarantee on 11 November 2013. The effect of the deed is that Metals X has guaranteed to
pay any deficiency in the event of winding up of any controlled entity or if they do not meet their obligations under
the terms of any debt subject to the guarantee. The controlled entities have given a similar guarantee in the event
that Metals X is wound up or if it does not meet its obligations under the terms of any debt subject to the guarantee.
The statement of financial position and statement of comprehensive income for the closed group is not different
to the Consolidated Entity's statement of financial position and statement of comprehensive income.
Contingent liabilities of the parent entity.
Contractual commitments by the parent entity for the acquisition of property, plant
or equipment.
Nil
Nil
- 91 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
39. IMPAIRMENT OF ASSETS
The Consolidated Entity assessed each asset or cash generating unit (“CGU”) for the year ended 30 June 2019 to
determine whether any indication of impairment existed. Where an indicator of impairment existed, a formal
estimate of the recoverable amount was made. In assessing whether an impairment is required for the carrying
value of an asset, its carrying value is compared to its recoverable amount. The recoverable amount is the higher
of the asset’s fair value less costs of disposal (“FVLCD”) and value in use (“VIU”).
30 June 2019 Assessment
As a result of the Consolidated Entity’s impairment review it was determined that continued cash outflows and
underperformance against budget represented indicators of potential impairment of the Nifty CGU. The
Consolidated Entity used FVLCD to determine the recoverable amount for the Nifty CGU based on the following
methodology and assumptions:
Methodology
For the year ended 30 June 2019 the Consolidated Entity has impaired the assets of the Nifty CGU based on fair
values determined by independent experts using comparable transactions less expected costs of disposal. This
method has been adopted as it results in a higher recoverable amount than a VIU assessment.
The recoverable amount of the Nifty CGU was previously measured using VIU based on discounted cash flows.
The change in valuation method is due to the fact that the mining strategy at Nifty has been refocused to expanding
laterally underground into new mining areas in the east and west and to move away from the historical Central
Zone mining area. In May 2019 the Company announced the Nifty Reset Plan which focusses on the development
of new mining areas and underground infrastructure. Due to the depletion and shift away from continuing to mine
the historical Central Zone the carrying value associated with the Central Zone mine, properties and development
has been impaired to nil. Key objectives of the Reset Plan is to take advantage of the substantial resource base,
exploration upside and the existing processing plant, mobile fleet and other surface infrastructure all of which
continue to have significant value to the Consolidated Entity. Therefore, the Consolidated Entity considers the
FVLCD to be the most appropriate valuation method for financial statement reporting purposes.
Impairment Losses
Impairment losses have been allocated to assets of the Nifty CGU as follows:
Details
Carrying Value $
Impairment loss $
Recoverable amount $
Inventory of stores and spares
18,287,398
9,287,398
Property, plant and equipment
32,025,834
5,842,434
Exploration expenditure
2,080,449
-
Mine, properties and development
49,069,811
49,069,811
9,000,000
26,183,400
2,080,449
-
Total
101,463,492
64,199,643
37,263,849
In allocating the impairment, individual assets have not been impaired below their individual recoverable values.
To determine their individual recoverable values, inventory of stores and spares and property, plant and equipment
have been valued using the market comparison and replacement cost approach adjusted for present condition and
location. Mine, properties and development and the exploration expenditure has been valued using a market
approach known as the exploration valuation method, which is based on comparable transactions and past
expenditure on exploration. The fair value methodologies adopted are categorised as Level 3 in the fair value
hierarchy. The Consolidated Entity has valued the Nifty tenements using ranges of value per unit area (km²) derived
from comparable transactions. The range of the implied value of comparable transactions is between $60/km² and
$9,596/km², with a mean of $2,612/km². The Consolidated Entity has applied an economic obsolescence deduction
where relevant of an average of 70% to the inventory of stores and spares and property, plant and equipment.
- 92 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019 (continued)
39. IMPAIRMENT OF ASSETS (continued)
30 June 2018 Assessment
As a result of the Consolidated Entity’s 30 June 2018 impairment indicator review, an assessment of the recoverable
amount for all of its cash generating units (“CGUs”) with impairment indicators was performed. Underperformance
against budget at the Nifty Copper Project (“Nifty”) CGU represented an indicator of potential impairment. The
Consolidated Entity utilised a discounted cash flow (“DCF”) model to determine the recoverable amount of Nifty
based upon the Nifty life of mine plan. The assessment of the recoverable amount of Nifty determined that no
impairment was required as at 30 June 2018. There were no indicators of impairment of other Metals X assets or
CGUs as at 30 June 2018.
Assumptions
The table below summarises the key assumptions used in the carrying value assessment:
Details
30 June 2018
Copper price (US$ per tonne)
Exchange rate (AUD/USD)
Discount rate % (post tax)
$6,775
$0.77
8.0%
Sensitivity Analysis
It was estimated that changes in key assumptions, in isolation, would have had the following approximate impact
(increase or decrease) on the recoverable amount of the Nifty CGU as at 30 June 2018:
Details
Increase in key assumption
Decrease in key assumption
5% change in copper price (US$ per tonne)
43,768,881
(47,695,547)
5% change in exchange rate (AUD/USD)
(39,437,271)
5% change in cost of production
1% change in recovery factor
1% change in discount rate
(26,493,359)
8,732,434
(4,466,134)
43,390,620
26,396,468
(8,740,498)
4,684,839
40. EVENTS AFTER THE BALANCE SHEET DATE
On 29 August 2019 the Company entered into a facility agreement with Citibank N.A. for a A$35,000,000 secured
term loan facility (“Facility”) through the Company’s 100%-owned subsidiary Bluestone Mines Tasmania Pty Ltd. The
key terms of the facility agreement are:
Loan term:
Repayments:
4 years;
Quarterly in arrears commencing 31 December 2019 with accelerated prepayment
from cash sweep commencing 30 June 2020. Early repayment allowed, without
penalty, at any time;
All material assets of the Company and certain subsidiaries excluding the Renison
Tin Operations joint venture participating interest and tenements;
Mandatory tin hedging, minimum liquidity and standard debt service ratios; and
Drawdown conditional upon completion of tin hedge arrangements and other
conditions customary for a facility of this nature.
Security:
Key terms:
Conditions Precedent:
- 93 -
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Metals X Limited, I state that:
In the opinion of the Directors:
(a)
the financial statements and notes of the Company and of the Consolidated Entity are in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Company's and the Consolidated Entity's financial position as at 30
June 2019 and of their performance for the year ended on that date; and
complying with
Interpretations) and Corporations Regulations 2001; and
the Australian Accounting Standards (including
the Australian Accounting
(b)
(c)
(d)
the financial statements and notes also comply with International Financial Reporting Standards as disclosed
in note 2(b) and;
subject to matters stated in note 2(c) of the financial report, there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and payable; and
this declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2019.
As at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group
identified in note 37 will be able to meet any obligations or liabilities to which they are or may become subject, by virtue
of the Deed of Cross Guarantee.
On behalf of the Board.
DM Marantelli
Managing Director
Perth, 29 August 2019
- 94 -
INDEPENDENT AUDIT REPORT
- 95 -
INDEPENDENT AUDIT REPORT (continued)
- 96 -
INDEPENDENT AUDIT REPORT (continued)
- 97 -
INDEPENDENT AUDIT REPORT (continued)
- 98 -
INDEPENDENT AUDIT REPORT (continued)
- 99 -
TABLES OF MINERAL RESOURCES AND ORE RESERVES
AS AT 30 JUNE 2019
TIN DIVISION
Mineral Resource Estimates – Consolidated Summary & Annual Comparison
Project
30 June 2018
Renison Bell
Mt Bischoff
Rentails
Mining Depletion
Renison Bell
Mt Bischoff
Rentails
Resource Adjustments
Renison Bell
Mt Bischoff
Rentails
30 June 2019
Renison Bell
Mt Bischoff
Rentails
Tonnes
Kt
16,437
1,667
23,886
41,990
(808)
-
-
(808)
1,918
-
-
1,918
17,547
1,667
23,886
43,100
TIN
Grade
% Sn
Metal
Kt Sn
Tonnes
kt
COPPER
Grade
% Cu
Metal
Kt Cu
1.31
0.54
0.44
0.78
1.17
-
-
1.17
2.95
-
-
2.95
1.50
0.54
0.44
0.87
216
9
104
329
(9.5)
-
-
(9.5)
56.5
-
-
56.5
263
9
104
376
16,236
-
23,886
40,121
(808)
-
-
(808)
2,119
-
-
2,119
17,547
-
23,886
41,447
0.21
-
0.22
0.22
0.32
-
-
0.32
0.17
-
-
0.17
0.20
-
0.22
0.21
34
-
53
87
(2.6)
-
-
(2.6)
3.6
-
-
3.6
35
-
53
87
Ore Reserve Estimates – Consolidated Summary & Annual Comparison
The Ore Reserve estimates are a subset of the Mineral Resource estimates
Project
30 June 2018
Renison Bell
Rentails
Mining Depletion
Renison Bell
Rentails
Reserve Adjustments
Renison Bell
Rentails
30 June 2019
Renison Bell
Rentails
Ore
Kt
6,822
22,313
29,135
(808)
-
(808)
2,085
-
2,085
8,098
22,313
30,411
TIN
Grade
% Sn
Metal
Kt Sn
1.01
0.44
0.58
1.17
-
1.17
1.11
-
1.11
1.02
0.44
0.60
69
99
168
(9)
-
(9)
23
-
23
82
99
181
Ore
Kt
6,822
22,313
29,135
(808)
-
(808)
2,085
-
2,085
8,099
22,313
30,411
COPPER
Grade
% Cu
Metal
Kt Cu
0.22
0.23
0.23
0.32
-
0.32
0.23
-
0.23
0.21
0.23
0.22
15
51
66
(2)
-
(2)
5
-
5
17
51
68
Notes: Renison Bell, Mount Bischoff and Rentails Resources and Reserves are 50% owned by Metals X.
The geographic region for Tin Mineral Resources and Ore Reserves is Australia.
- 100 -
TABLES OF MINERAL RESOURCES AND ORE RESERVES
AS AT 30 JUNE 2019 (continued)
COPPER DIVISION
Mineral Resource Estimates – Consolidated Summary & Annual Comparison
Project
30 June 2018
Nifty Sulphide
Nifty Oxide
Nifty Heap Leach
Mining Depletion
Nifty Sulphide
Nifty Oxide
Nifty Heap Leach
Resource Adjustments
Nifty Sulphide
Nifty Oxide
Nifty Heap Leach
30 June 2019
Nifty Sulphide
Nifty Oxide
Nifty Heap Leach
COPPER
Kt
Grade %
Metal Kt
40,390
4,330
3,310
48,030
(1,396)
-
-
(1,396)
(2,709)
-
-
(2,709)
36,280
4,330
3,310
48,014
1.49
0.86
0.74
1.38
1.36
-
-
1.36
1.36
-
-
1.36
1.50
0.86
0.74
1.39
602
37
23
662
(19)
-
-
(19)
(37)
-
-
(37)
546
37
23
666
Maroochydore Project
30 June 2018
Maroochydore Oxide
Maroochydore Sulphide
Mining Depletion
Maroochydore Oxide
Maroochydore Sulphide
Resource Adjustments
Maroochydore Oxide
Maroochydore Sulphide
30 June 2019
Maroochydore Oxide
Maroochydore Sulphide
COPPER
Grade
% Cu
Metal
Kt Cu
Kt
COBALT
Grade
ppm Co
0.91
1.66
1.00
394
90
486
43,200
5,430
48,630
391
292
380
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Kt
43,200
5,430
48,630
-
-
-
-
-
-
Metal
kt Co
16.9
1.6
18.5
-
-
-
-
-
-
43,200
5,430
48,630
0.91
1.66
1.00
394
90
486
43,200
5,430
48,630
391
292
380
16.9
1.6
18.5
- 101 -
TABLES OF MINERAL RESOURCES AND ORE RESERVES
AS AT 30 JUNE 2019 (continued)
COPPER DIVISION (continued)
Ore Reserve Estimates – Consolidated Summary & Annual Comparison
The Ore Reserve estimates are a subset of the Mineral Resource estimates
Project
30 June 2018
Nifty Sulphide
Mining Depletion
Nifty Sulphide
Resource Adjustments
Nifty Sulphide1
30 June 2019
Nifty Sulphide
Ore
Kt
COPPER
Grade
% Cu
Metal
Kt Cu
12,692
1.75
222
(1,396)
1.36
(19)
(196)
21.43
(42)
11,100
1.45
161
1 Refer to ASX announcement dated 28 August 2019 for details.
Notes:
The geographic region for Copper Mineral Resources and Ore Reserves is Australia.
- 102 -
TABLES OF MINERAL RESOURCES AND ORE RESERVES
AS AT 30 JUNE 2019 (continued)
NICKEL DIVISION
Mineral Resource Estimates – Consolidated Summary & Annual Comparison
Project
Kt
NICKEL
Grade
% Ni
30 June 2018
Wingellina
Claude Hills
Mining Depletion
Wingellina
Claude Hills
Resource
Adjustments
Wingellina
Claude Hills
30 June 2019
Wingellina
Claude Hills
182,560
33,277
215,837
0.92
0.81
0.91
-
-
-
-
-
(637)
182,560
33,277
215,837
-
-
-
-
-
17.9
0.92
0.81
0.91
COBALT
Grade
% Co
Kt
Metal
Kt Co
Kt
Fe2O3
Grade
% Fe2O3
182,560
33,277
215,837
0.07
0.07
0.07
-
-
-
-
-
(637)
182,560
33,277
215,837
-
-
-
-
-
1.06
0.07
0.07
0.07
132
22
154
-
-
-
-
-
(7)
132
22
154
182,560
33,277
215,837
45.30
38.73
44.29
-
-
-
-
-
-
-
-
(637)
-
-
519.23
182,560
33,277
215,837
45.30
38.73
44.29
Metal
Kt Ni
1,684
269
1,953
-
-
-
-
-
(114)
1,684
269
1,953
Ore Reserve Estimates – Consolidated Summary & Annual Comparison
The Ore Reserve estimates are a subset of the Mineral Resource estimates
Project
30 June 2018
Wingellina
Claude Hills
Mining Depletion
Wingellina
Claude Hills
Resource
Adjustments
Wingellina
Claude Hills
30 June 2019
Wingellina
Claude Hills
NICKEL
Grade
% Ni
Ore
Kt
168,422
-
168,422
0.93
-
0.93
Metal
Kt Ni
1,561
-
1,561
COBALT
Grade
% Co
Ore
Kt
Metal
Kt Co
Ore
Kt
Fe2O3
Grade
% Fe2O3
168,422
-
168,422
0.07
-
0.07
123
-
123
168,422
-
168,422
45.64
-
45.64
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
168,422
-
168,422
0.93
-
0.93
1,561
-
1,561
168,422
-
168,422
0.07
-
0.07
123
-
123
168,422
-
168,422
45.64
-
45.64
76,870
-
76,870
Notes:
The geographic region for Nickel Mineral Resources and Ore Reserves is Australia.
- 103 -
Metal
Kt
82,701
12,889
95,590
-
-
-
-
-
(3,306)
82,701
12,889
95,590
Metal
Kt
76,870
-
76,870
-
-
-
-
-
-
TABLES OF MINERAL RESOURCES AND ORE RESERVES
AS AT 30 JUNE 2019 (continued)
COMPETENT PERSONS STATEMENT
The information in this report that relates to nickel Mineral Resources was compiled by Metals X technical employees and contractors
under the supervision of Mr. Jake Russell B.Sc. (Hons), who is a member of the Australian Institute of Geoscientists. Mr Russell, is a
contractor to the Company, and has sufficient experience which is relevant to the styles of mineralisation and types of deposit under
consideration and to the activities which he is undertaking 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 Russell consents to the inclusion in
this report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to tin Mineral Resources was compiled by Metals X technical employees and contractors under
the supervision of Mr. Colin Carter B.Sc., who is a member of the Australian Institute of Geoscientists. Mr. Carter is a full-time employee
of the Company, and has sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration
and to the activities which he is undertaking 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. Carter consents to the inclusion in this report of the
matters based on his information in the form and context in which it appears. Mr. Carter is eligible to participate in short and long term
incentive plans.
The information in this report that relates to copper Mineral Resources compiled by Metals X technical employees and contractors under
the supervision of Mr. Kim Kremer B.Sc., who is a member of the Australian Institute of Geoscientists. Mr Kremer is a full-time employee
of the Company, and has sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration
and to the activities which he is undertaking 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 Kremer consents to the inclusion in this report of the
matters based on his information in the form and context in which it appears. Mr Kremer is eligible to participate in short and long term
incentive plans.
The information in this report that relates to Ore Reserves has been compiled by Metals X Limited technical employees under the
supervision of Mr Campbell Baird BEng (Mining), Master of International Finance & Member AusIMM. Mr Baird is a full time employee of
the Company. Mr Baird has sufficient experience which is relevant to the style of mineralisation and types of deposit under consideration
and to the activities which he is undertaking 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 Baird consents to the inclusion in this report of the matters
based on his information in the form and context in which it appears. Mr Baird is eligible to participate in the Company’s short and long
term incentive plan and holds performance rights in the Company.
The information in this report that relate to tin Ore Reserves has been compiled by Metals X technical employees under the supervision
of Mr Mark Recklies, B Engineering (Mining Engineering), AusIMM. Mr Recklies is a full time employee of the Metals X. Mr Recklies has
sufficient experience which is relevant to the style of mineralisation and types of deposit under consideration and to the activities which
he is undertaking 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 Recklies consents to the inclusion in this report of the matters based on his information
in the form and context in which it appears. Mr Recklies is eligible to participate in the Metals X short and long term incentive plans.
STATEMENT OF GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS
Governance of Metals X’s Mineral Resources and Ore Reserves development and management activities is a key responsibility of the
Executive Management of the Company.
Senior geological and mining engineering staff of the Company oversee reviews and technical evaluations of the estimates and evaluate
these with reference to actual physical and cost and performance measures. The evaluation process also draws upon internal skill sets
in operational and project management, ore processing and commercial/financial areas of the business.
The Chief Operating Officer (in consultation with senior staff) is responsible for monitoring the planning, prioritization and progress of
exploratory and resource definition drilling programs across the Company and the estimation and reporting of resources and reserves.
These definition activities are conducted within a framework of quality assurance and quality control protocols covering aspects including
drill hole siting, sample collection, sample preparation and analysis as well as sample and data security.
A four-level compliance process guides the control and assurance activities:
1.
2.
3.
4.
Provision of internal policies, standards, procedures and guidelines;
Mineral Resources and Ore Reserves reporting based on well-founded assumptions and compliance with external standards
such as the Australasian Joint Ore Reserves Committee (JORC) Codes;
Internal review of process conformance and compliance; and
Internal assessment of compliance and data veracity.
The objectives of the estimation process are to promote the maximum conversion of identified mineralisation into JORC 2012 compliant
Mineral Resources and Ore Reserves.
Metals X reports its Mineral Resources and Ore Reserves on an annual basis, in accordance with ASX Listing Rule 5.21 and clause 14
of Appendix 5A (the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC code) 2012
Edition). The has been no material changes to the Mineral Resources and Ore Reserves estimates since the last annual reporting date.
Mineral Resources are quoted inclusive of Ore Reserves. Competent Persons named by Metals X are members of the Australasian
Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists, and qualify as Competent Persons as defined in the
JORC Code.
- 104 -
SECURITY HOLDER INFORMATION AS AT 23 AUGUST 2019
(a) Top 20 quoted Shareholders
Shareholder
%
Number of Shares
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SUN HUNG KAI INVESTMENT SERVICES LIMITED
JINCHUAN GROUP LTD
CS THIRD NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
FARJOY PTY LTD
ALL-STATES FINANCE PTY LIMITED
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
JETOSEA PTY LTD
NERO RESOURCE FUND PTY LTD
MININGNUT PTY LTD
BELL POTTER NOMINEES LTD
BNP PARIBAS NOMINEES PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
JETOSEA PTY LIMITED
DEBORTOLI WINES PTY LIMITED
AJAVA HOLDINGS PTY LTD
TOTAL
(b) Distribution of quoted ordinary shares
14.64
10.09
8.77
6.39
4.97
3.96
3.51
2.33
2.06
1.89
1.33
1.16
0.97
0.95
0.81
0.53
0.44
0.39
0.34
0.33
65.85%
100,866,905
69,537,702
60,407,571
44,000,000
34,257,086
27,283,039
24,198,140
16,070,217
14,205,526
13,041,121
9,186,719
7,984,079
6,650,000
6,540,083
5,557,343
3,632,802
3,010,403
2,700,000
2,317,262
2,300,000
453,745,998
Size of Parcel
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Over 100,000
TOTAL
Number of
Shareholders
987
2,531
1,241
2,387
462
7,608
Number of Shares
470,084
6,842,454
9,491,005
81,248,102
591,008,864
689,060,509
(c) Number of holders with less than a marketable parcel of ordinary shares
1 – 1,000
(d) Substantial Shareholders
Shareholder
Apac Resources Limited
Mitsubishi UFJ Financial Group, Inc.
IOOF Holdings Limited
Jinchuan Group Limited
Number of
Shareholders
3,031
Number of
Shares
3,773,202
%
Number of shares
9.18
8.93
7.65
7.22
55,907,571
61,508,894
52,686,625
44,000,000
- 105 -
SECURITY HOLDER INFORMATION AS AT 23 AUGUST 2019
(e) Voting Rights
The voting rights for each class of security on issue are:
Ordinary fully paid shares
Each ordinary shareholder is entitled to one vote for each share held.
Options
The holders of options have no rights to vote at a general meeting of the company.
(f) Unquoted Equity Securities
Number of Options
Exercise Price
Expiry Date
Number holders
4,150,000
5,650,000
1,000,000
1,000,000
1,000,000
1,185,094
1,185,094
14,003,014
$0.76
$1.32
$0.54
$0.56
$0.58
$0.00
$0.00
$0.00
20/01/2020
30/11/2020
22/01/2022
22/01/2023
22/01/2024
30/06/2022
30/06/2023
30/06/2024
5
10
1
1
1
13
13
30
- 106 -
www.metalsx.com.auu