ANNUAL
REPORT
2020
CONTENTS
CORPORATE DIRECTORY .................................................................. 1
CHAIRMAN’S LETTER ......................................................................... 2
REVIEW OF OPERATIONS .................................................................. 3
DIRECTORS’ REPORT ......................................................................... 8
AUDITOR’S INDEPENDENCE DECLARATION ...................................34
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2020 ...............................35
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020 ...........................................................................36
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020 ..............................................37
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020 .............................................38
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 .....................39
DIRECTORS’ DECLARATION .............................................................89
INDEPENDENT AUDIT REPORT .........................................................90
TABLES OF MINERAL RESOURCES AND
ORE RESERVES AS AT 30 JUNE 2020 ..............................................95
SECURITY HOLDER INFORMATION
AS AT 1 SEPTEMBER 2020 .............................................................. 100
CORPORATE DIRECTORY
DIRECTORS
Peter Gunzburg (Non-Executive Chairman)
Brett Smith (Executive Director)
Grahame White (Non-Executive Director)
Patrick O’Connor (Non-Executive Director)
Xingwang Bao (Non-Executive Director)
COMPANY SECRETARY & CHIEF FINANCIAL OFFICER
Fiona Van Maanen
KEY MANAGEMENT
Michael Spreadborough (Chief Executive Officer)
Simon Rigby (Executive General Manager – Geology & Business Development)
Stephen Robinson (Executive General Manager – Projects & Planning)
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 -
CHAIRMAN’S LETTER
Your Board is acutely aware that the last financial year has not been a rewarding one for shareholders.
We are in the process of reviewing all our operations with a view to cutting costs and establishing a cash
flow positive Company.
To this aim we have refinanced the restrictive Citibank N.A. loan and have progressed a strategy to divest
the copper assets.
The most pleasing aspect of the year was the substantial increase in ore reserves at our 50% owned
Renison Tin operation.
Our hope is that with further exploration and development we can maintain a substantial, long term, and
profitable operation at Renison. If this can be achieved it is hoped that it will form the backbone upon
which we can re grow the Company and reward shareholders accordingly.
Peter Gunzburg
Chairman
REVIEW OF OPERATIONS
TIN DIVISION
Metals X owns a 50% equity interest in the Renison Tin Operations in Tasmania through its 50% stake in
the Bluestone Mines Tasmania Joint Venture, which comprise three key assets:
1.
2.
3.
The Renison Tin Operations;
The Renison Tailings Retreatment Project (Rentails Project); and
The Mount Bischoff Project.
RENISON TIN OPERATIONS (50%)
The Renison Tin Mine (Renison) 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.
The Renison strategy is focused on continuing to convert ongoing significant in-mine exploration success
into a substantial long-life mining operation, to deliver higher cash margins through an increased mining
rate, grade and recovery, whilst continuing to seek productivity improvements and reduce costs. MLX’s
tin exploration strategy is inclusive of investigation of near mine and regional targets.
Production from Renison for the period on a 100% basis, was 7,182 tonnes of tin (Sn) (2019: 7,124
tonnes) from ore mined of 848,909 tonnes at 1.18% Sn (2019: 797,980 tonnes at 1.21% Sn). Metals X’s
50% share resulted in 3,412 tonnes of tin (2019: 3,445 tonnes) sold at an average realised price of
A$24,511/t (2019: A$27,913/t) at an All-In Sustaining Cost of $16,761/t (2019: $17,417/t) with additional
project capital and exploration costs of $13.0M (2019: $4.5M).
The following key focus areas that were advanced during the period:
•
•
•
•
•
•
Substantial Ore Reserve upgrade with a 46% increase in contained tin metal;
Measured and Indicated Resources increased by 12% after mining depletion;
Grade control and resource definition drilling programs continued in the Leatherwood, Huon North
and Area 5 regions, with a total of 140 holes for 9,027m being completed. Assay results from these
drill programs continue to support and refine the resource models;
The Area 5 Optimisation Study, in conjunction with an updated Renison Life of Mine (LOM) Plan,
was completed extending the mine life to 10 years
Continuation of the Metallurgical Improvement Program to increase mill throughput rate and
metallurgical recovery. The program is being advanced through ongoing review and updating of
control systems and online analytical infrastructure, and improved training and communication of
standard operating parameters.
Emanating from the work conducted on the options for choice of technology for the tin fuming with
Rentails, an opportunity has been identified for a potential process change in the existing
processing plant to produce a low-grade tin concentrate that is upgraded via a tin fumer to produce
a high-grade product, together with an associated step change in tin recovery. A scoping study of
the Renison Thermal Upgrade Project will progress into FY2021.
The Area 5 Study and 2020 LOM reported the following key results:
•
•
Area 5 Ore Reserve declared of 3.30 Mt at 1.87% Sn for 61,900 tonnes of contained tin, with total
Renison Ore Reserve increasing by 46% to 120,300 tonnes of contained tin.
Mine life extended to 10 years incorporating:
•
•
•
•
•
Total of 9.27 Mt mined over ten years at an average 1.38% Sn for 128,000 tonnes of
contained tin.
Grade profile increasing from 1.25% - 1.30% Sn in initial years to 1.4% - 1.5% Sn from FY25
onwards.
Production from the high-grade Area 5 contributes approximately 40% of total contained tin
mined over the 10 year mine life.
Production increasing from first two years of 8,500 - 9,000 tonnes of tin per annum to over
10,000 tonnes of tin per annum from FY25.
Estimated production of approximately 98,000 tonnes of tin in concentrate over the ten year
plan.
- 3 -
REVIEW OF OPERATIONS (CONT.)
TIN DIVISION (CONT.)
•
Additional existing Mineral Resources and exploration upside provide clear scope for extending
mine life beyond 10 years.
•
•
•
Two-year Area 5 project capital investment of $50M - $55M into ventilation, backfill, electrical and
pumping infrastructure, as well as additional mobile equipment together with additional asset
integrity sustaining capital, is funded by operating cash flow based on modelled tin prices of
A$23,500 - A$24,500 per tonne of tin.
ASIC, initially $19,000 - $20,000 per tonne of tin during ramp-up, reducing to $16,500 - $17,500
per tonne of tin from FY25 when steady state production of over 10,000 tonnes of tin per annum is
achieved.
Total cash flow of $300M, EBITDA of $476M and net present value (8% discount rate) of $185M
(all Metals X’s 50% share on a pre-tax, pre-debt basis) achieved at LOM average price of
A$24,800/t Sn.
RENISON TAILINGS RETREATMENT (RENTAILS) 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
Mineral Resource containing approximately 104,000 tonnes of tin and 53,000 tonnes of copper (refer to
ASX announcement dated 30 January 2020).
MT BISCHOFF PROJECT
The Mt Bischoff Project is located approximately 80km north of the Renison mine. The project was placed
on care and maintenance in 2010.
During the period there was a review of the environmental obligations associated with the Mt Bischoff
Project, which resulted in an increase in the Consolidated Entity’s 50% share in the provision for
rehabilitation to $8,710,000 (2019: $350,000). The majority of the Consolidated Entity’s 50% share of the
rehabilitation expenditure will be incurred in the first six years ($8,094,000) with the remaining incurred
over the ensuing eight years during the monitoring phase ($616,000).
COPPER DIVISION
The Copper Division holds three key assets:
1.
2.
3.
Nifty Copper Operation;
Maroochydore Copper Project; and
Paterson Exploration project.
On 2 July 2020 the Company announced that the Board has resolved to seek offers for the proposed sale
of its entire copper asset portfolio, including the Nifty, Maroochydore and exploration tenure (together
Copper Assets). In seeking a sale of the Copper Assets, the Company will endeavour to leverage the
significant value that has been added through completion of the Scoping Study and execution of the Farm-
in Agreement.
There is no certainty that a transaction will be entered into or completed.
NIFTY COPPER OPERATION
The Nifty Copper Operation (Nifty) comprise an underground mine, with an associated 3.2Mtpa copper
concentrator, a 21MW gas turbine power station, full heavy vehicle workshops, administration buildings,
a 500-person accommodation village and an airport capable of handling commercial scale jet aircraft.
Metals X operated Nifty, producing copper concentrate, from its acquisition in August 2016 until November
2019 when the Company suspended mining operations (refer to ASX Announcement of 26 November
2019) and placed the mine into care and maintenance (C&M). A final concentrate shipment was made in
December 2019 of 7,658t of concentrate containing 2,090t of copper.
The decision to suspend operations was made following an operational review in November 2019. The
review confirmed that the Company was unlikely to achieve its planned production at Nifty at an
acceptable operating cost within the previously expected timeframe. On that basis, the Board considered
that continuing operations at Nifty was not in the best interests of shareholders.
- 4 -
COPPER DIVISION (CONT.)
As a result of the suspension of operations the Company completed a recoverable amount assessment
that resulted in an impairment of Nifty of $15,363,000 (refer to note 39).
On 22 January 2020, the Company announced that it had commenced a strategic review of its Copper
Assets which included Nifty, Maroochydore and the surrounding exploration tenure. The strategic review
was to explore various options for the Copper Assets including joint arrangements and the partial or
complete divestment of some or all of the assets.
During the strategic review process the Company completed a Scoping Study at Nifty that returned
positive results on mining the large copper sulphide resource through a major expansion to the historical
oxide open pit, using the existing processing plant and site infrastructure. Also a Scoping Study was
completed on the option of a recommencement of heap leach Solvent Extraction/Electrowinning (SX/EW)
operations at Nifty that supported further evaluation in conjunction with potential open pit mining.
The Scoping Study reported the following key results:
•
•
•
•
•
•
10-year open pit life providing approximately 23 Mt of sulphide feed to the existing concentrator, at
an estimated average grade of 1.24% copper, with a waste-to-ore strip ratio of approximately 7.6:1.
250,000 - 270,000 tonnes of copper in concentrate at an average annual production rate of
approximately 26,000 tonnes of copper in concentrate.
All-in sustaining cost of approximately A$5,400 - A$5,800 per tonne of copper produced (US$1.67
- US$1.79/lb) from the open pit sulphide operation. Treatment and refining costs are approximately
A$960 per tonne of copper sold (US$0.30/lb).
Estimated pre-production capital for the open pit sulphide operation of $40M - $60M including
studies, pre-production drilling, concentrator and infrastructure refurbishment, open pit pre-strip,
and commissioning.
At the assumed long term copper price of A$8,500 per tonne (US$2.62/lb), total pre-tax net cash
flow of $405M - $435M, pre-tax net present value (10% discount rate) of $170M - $190M and a
pre-tax internal rate of return of 50% – 54% for the open pit sulphide operation.
Opportunity to recommission the existing heap leach SX/EW facility to treat oxide ore mined from
the open pit as well as reprocessing of the existing leach pads, to produce an additional estimated
total 40,000 – 50,000 tonnes of copper as cathode over eight years.
During care and maintenance and the strategic review process, surface infrastructure including the power
station, processing plant and camp are being maintained in a production-ready status to protect the value
of Nifty.
MAROOCHYDORE COPPER PROJECT
The Maroochydore deposit, located approximately 85km south east of Nifty, consists of a significant oxide
Mineral Resource of 43.5 Mt at 0.91% Cu and 391ppm Co, with a small primary sulphide Mineral Resource
of 5.43 Mt at 1.66% Cu and 292ppm Co based upon the limited drilling to date (refer to ASX
announcement dated 18 August 2016).
Since acquisition, the Company has completed a number of drilling geophysical programmes at
Maroochydore, with work focusing on developing additional metallurgical testwork programs. Metallurgical
domaining of the orebody has been completed. However, the area is sparsely drilled and inadequately
defined, with primary copper sulphide mineralisation remaining open along-strike and down-dip.
PATERSON EXPLORATION PROJECT
The Copper Division holds approximately 2,950km2 of mineral licences within the highly prospective, and
in the wake of recent new copper-gold discoveries by Rio Tinto and the Newcrest Mining/Greatland Gold
JV, highly sought after, Paterson Province of Western Australia. Metals X is the third largest ground holder
in the Paterson Province.
Metals X has defined over 30 regional exploration targets within the currently granted exploration tenure
which warrant further investigation. In addition to copper, the tenure package also has substantial lead,
zinc and manganese potential
- 5 -
REVIEW OF OPERATIONS (CONT.)
COPPER DIVISION (CONT.)
As a result of the strategic review, on 11 June 2020 the Company announced that it had signed a binding
Farm-in and Joint Venture Term Sheet with IGO Limited (IGO) on the Company’s Paterson Exploration
Project. Under the agreement IGO must spend $32M on mineral exploration over 6.5 years to earn a 70%
interest, with a minimum commitment of $11M over the initial 3.5 years. The Company will be free-carried
to the completion of a Pre-feasibility Study on a new mineral discovery.
NICKEL DIVISION
The Wingellina Nickel-Cobalt Project is part of Metals X’s Central Musgrave Project which remains one
of the largest undeveloped nickel-cobalt deposits in the world. The Central Musgrave Project has a
Mineral Resource containing approximately 2.0 Mt of nickel and 154,000t of cobalt within which Wingellina
hosts an Ore Reserve of approximately 1.56Mt of nickel and 123,000t of cobalt (refer to the 2019 Annual
Report).
In 2008 the Company completed a feasibility study (+/-25%) and signed an agreement with the Traditional
Owners in 2010, which provides consent to undertake mining activities. In November 2016, the Company
received its Public Environment Review approval from the Environmental Protection Authority.
At Wingellina, 15 potential high-grade nickel-cobalt open pits have been delineated as potential starter
pits, of which six were successfully infill-drilled during 2017-18. During the period a further drilling program
was completed on two additional potential starter pits, successfully confirming the high-grade nickel-cobalt
domains.
In May 2020, the Company commenced a strategic review of the options to advance the project and
engaged a consulting group, CSA Global, to assist with the study. The scope of works included a business
environment review of global lateritic nickel mines and development projects along with a gap analysis in
relation to the completed 2008 Phase 1 Feasibility Study.
As a world-class project, with the potential to produce high grade ore for at least the first 10 years of
production and the potential to produce battery-grade nickel sulphate and cobalt sulphate, Wingellina
provides a number of investment and development options for potential investment partners.
CORPORATE
SHARE PLACEMENT
On 19 September 2019, the Company completed a capital raising of $24,642,181 (before costs) via a
placement and accelerated non-renounceable rights entitlement offer by issuing 164,281,206 fully paid
ordinary shares at an issue price of $0.15 per share to institutional and professional investors.
On 10 October 2019, the Company completed a capital raising of $8,088,651 (before costs) via a non-
renounceable rights entitlement offer by issuing 53,924,352 fully paid ordinary shares at an issue price of
$0.15 per share to retail investors.
CITI FINANCE FACILITY
On 29 August 2019, the Company entered into a finance facility with Citibank N.A. (Citi) for a $35,000,000
secured term loan facility (Citi Facility) through the Company’s 100%-owned subsidiary Bluestone Mines
Tasmania Pty Ltd. The Citi Facility was fully utilized and the principal outstanding at 30 June 2020 was
$30,462,000. Refer to note 25 for the key terms of the Citi Facility
Under the Citi Facility the Company was required to remain within certain financial covenants which were
measured for compliance at the end of each calendar quarter. For the quarter ending 30 June 2020 the
Company did not meet the Forecast Cash Flow Cover Ratio (Forecast CFCR) nor the Forward Debt
Service Cover Ratio (Forecast DSCR). The principal reason for the Forecast CFCR and the Forward
DSCR were not met was the decision to proceed with the Area 5 development with its capital expenditure
for the Consolidated Entity’s 50% share being $25 – $27.5 million over the next two years.
- 6 -
CORPORATE (CONT.)
On 27 July 2020, the Company entered into a loan facility with Asia Cheer Trading Limited (ACT) for a
$26,000,000 unsecured term loan facility (ACT Loan) ending on 31 January 2021. The funds from the
ACT Loan were to be applied to the repayment of the amount outstanding pursuant to the Citi Facility.
Drawdown of the ACT Facility was subject to the contemporaneous close out of the Citi Facility (refer to
note 40). A further condition of the ACT Loan is that the net proceeds from the sale of the Copper Assets
or any capital raising undertaken by the Company during the loan term must be paid to the lender in
permanent reduction of the principal amount.
On 31 July 2020, the Company settled the Citi Facility in full by repaying the outstanding principal and
accrued interest of $30,556,000.
On 21 August 2020, ACT provided the Company with a waiver of the mandatory repayment of the loan
from the sale of the Copper Assets or any capital raising undertaken by the Company if required to assist
with management of working capital. On 31 August 2020, ACT advised the Company that if required, the
ACT Loan will be amended to increase the commitment by $5,000,000 to $31,000,000 and extend the
repayment date to 31 July 2021. If the amendments are required the Company is to provide ACT with a
formal written notice prior to 31 October 2020.
During the period, in conjunction with the Citi Facility the Company entered into forward commodity
contracts relating to 3,310 tonnes of tin at an average price of $25,000 per tonne of tin. At the end of the
period, there were outstanding contracts for 2,010 tonnes of tin at an average price of $24,911 per tonne
of tin.
In July 2020 in conjunction with the repayment of the Citi Facility the remaining forward commodity
contracts were closed out in full.
DEED OF REVOCATION COPPER DIVISION
On 26 March 2020 the Company lodged a Deed of Revocation with ASIC to remove the Paterson Copper
Pty Ltd group of companies (Copper Entities) from the Metals X Deed of Cross Guarantee. The Company
has followed all ASIC procedures in relation to the Deed of Revocation and the Copper Entities will be
released from the Metals X Deed of Guarantee on 30 September 2020.
- 7 -
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 2020.
DIRECTORS
The names and particulars of the Company’s Directors during the financial period and until the date of
this report are as follows.
NAME
PARTICULARS
Peter Gunzburg
B.Com
Appointed
10 July 2020
Non-Executive Chairman (Independent)
Mr Gunzburg has over 40 years’ experience acting as a public company director,
stockbroker and investor. Mr Gunzburg has previously been a director of Resolute Ltd,
Australian Stock Exchange Ltd, Eyres Reed Ltd, CIBC World Markets Australia Ltd and
Fleetwood Corporation Ltd.
Special responsibilities
Chairman of the Board, Chairman of the Remuneration and Nominations Committee and
member of the Audit and Risk committee.
Other current directorships
None.
Former directorships in last three years
BARD1 Life Sciences Limited (2001 - 2020).
Brett Smith
Executive Director
B.Eng Hons (Chem),
MBA, MA
Appointed
Non-Executive Director
2 December 2019
Appointed
Executive Director
10 July 2020
Mr. Smith has participated in the development of a number of mining and mineral
processing projects including coal, iron ore, base and precious metals. He has also
managed engineering and construction companies in Australia and internationally.
Mr. Smith has served on the board of private and listed mining and exploration companies
and has over 32 years international experience in the engineering and construction of
mineral processing operations. Mr. Smith is Executive Director and Deputy Chairman of
Hong Kong listed company APAC Resources Limited, Executive Director of Hong Kong
listed company Dragon Mining Limited and a Non-Executive Director of ASX listed
companies Prodigy Gold NL, Elementos NL and Tanami Gold NL.
Special responsibilities
None.
Other current directorships
Elementos Limited (appointed 24 January 2020).
Tanami Gold NL (appointed 27 November 2018).
APAC Resources Limited – HK (appointed 18 May 2016).
Prodigy Gold NL (appointed 9 May 2016).
Dragon Mining Limited – HK (appointed 7 February 2014).
Former directorships in last three years
None.
- 8 -
NAME
PARTICULARS
Grahame White
Non-Executive Director (Independent)
B.Eng, MAICD
Appointed
10 July 2020
Mr White is a construction and mining executive with comprehensive experience in
Australia and Asia. Mr White has held numerous executive management positions in the
resources sector and recently served on the boards of Central West Rural, Forge Group
Limited and the Queensland Resource Council.
Special responsibilities
Chairman of the Audit and Risk Committee and member of the Remuneration and
Nominations Committee.
Other current directorships
None.
Former directorships in last three years
None.
Patrick O’Connor
B.Com FAICD
Appointed
Non-Executive Director
24 October 2019
Appointed
Chairman
3 December 2019
Appointed
Executive Chairman
17 December 2019
Reverted to
Non-Executive Director
10 July 2020
Non-Executive Director (Independent)
Mr O’Connor has significant experience as an independent Non-Executive Director and
as a Chief Executive Officer. His experience spans across mining (gold, copper, lead,
zinc and coal), oil & gas exploration, biotechnology and government utility sectors.
Mr O’Connor was previously a Non-Executive Director of Stanmore Coal Ltd. In addition,
he has held the roles of Deputy Chairman and Chairman of Perilya Ltd, the operator of
the Broken Hill mine in NSW Australia, prior to its takeover and delisting from the ASX. Mr
O’Connor spent nine years as a director of the Water Corporation in WA including four
years as its Chairman. Mr O’Connor was also the Chief Executive Officer for OceanaGold
Corporation at the time of its listing on the ASX and remained for a period as a Non-
Executive Director. Prior to OceanaGold, Mr O’Connor was Managing Director of
Macraes Mining Co Ltd for nine years.
Special responsibilities
Chairman of the Board (3 December 2019 – 10 July 2020), Chairman of the
Remuneration and Nominations Committee (24 October 2019 – 10 July 2020) thereafter
member of the Remuneration and Nominations Committee and member of the Audit and
Risk Committee.
Other current directorships
None.
Former directorships in last three years
Stanmore Coal Limited (2014 – 2018).
Tech Mpire Limited (2016 – 2017).
Xingwang (Simon)
Bao
B.Sc (Mineral
Processing)
Appointed
10 January 2020
Non-Executive Director
Mr Bao is the Vice General Manager for Jinchuan Marketing Co. Mr Bao has worked for
Jinchuan since 2005 and has extensive experience in the mining industry. Mr Bao holds
a Bachelor in Mineral Processing from Central South University and a Master’s Degree
in Applied Chemistry from East China University of Science and Technology.
Special responsibilities
None.
Other current directorships
None.
Former directorships in last three years
None.
- 9 -
NAME
PARTICULARS
Brett Lambert
Non-Executive Director (Independent)
B.AppSc (Mining
Engineering), MAICD
Appointed
24 October 2019
Resigned
10 July 2020
Mr Lambert is a mining engineer and experienced company director with over 35 years
of involvement in the Australian and international resource industry, encompassing
operations, project development, business development and corporate administration.
Mr Lambert has more than 10 years’ experience leading pubic companies as Managing
Director/CEO and has served on the boards of companies listed on the ASX, TSX, AIM
and SET (Thailand). Mr Lambert is currently the Non-Executive Chairman of Mincor
Resources Ltd, Non-Executive Director of Australian Potash Ltd and was formerly the
CEO/Managing Director of ABM Resources NL, Bullabulling Gold Ltd, Thundelarra
Exploration Ltd and Intrepid Mines Ltd.
Mr Lambert has been responsible for evaluating, developing and funding several new
resource projects. He has been directly involved in a number of transactions at both asset
and corporate level.
Special responsibilities
Was Chairman of the Audit and Risk Committee (24 October 2019 – 10 July 2020) and
was a member of the Remuneration and Nominations Committee (24 October 2019 – 10
July 2020).
Anthony Polglase
B.Eng (Hons) 1st
Class, ACSM
Appointed
24 October 2019
Resigned
10 July 2020
Other current directorships
Mincor Resources Limited (appointed 1 January 2017).
Australian Potash Limited (appointed 9 May 2017).
Saturn Metals Limited (appointed 9 April 2020).
Former directorships in last three years
Tao Commodities Limited (2017).
De Grey Mining Limited (2017 – 2019).
Non-Executive Director (Independent)
Mr Polglase has more than 40 years of multi-disciplined mining experience across ten
different countries and is qualified in mechanical and electrical engineering with an
Honours degree in Metallurgy.
Mr Polglase has deep experience in the development and operation of gold, copper, lead,
zinc and tin projects, having been responsible for, or closely involved with, the
commissioning of more than seven mining projects.
Most recently Mr Polglase was a driving force behind Avanco Resources Ltd, which
transitioned from explorer to developer to producer after discovering one of the world’s
highest grade open pit copper deposits in Brazil. Under Mr Polglase’s guidance Avanco
went on to build the Antas copper mine on-time and on-budget. Avanco was acquired in
2018 by OZ Minerals for approximately $430M representing a 130% premium to the share
price and a 100 fold increase in market capitalisation of Avanco since its IPO. Mr
Polglase’s specific copper and tin experience extends approximately 15 years and 10
years respectively in both open-pit and underground mines, and across operational and
maintenance disciplines.
Special responsibilities
Was a member of the Audit and Risk Committee (24 October 2019 – 10 July 2020) and
was a member of the Remuneration and Nominations Committee (24 October 2019 – 10
July 2020).
Other current directorships
Black Cat Syndicate Limited (appointed 25 May 2020).
New World Resources Limited (appointed 17 October 2019).
Former directorships in last three years
None.
- 10 -
NAME
PARTICULARS
Yimin Zhang
Non-Executive Director
Diploma (Metallurgy
and Architecture)
Appointed
9 January 2017
Resigned
10 January 2020
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.
Special responsibilities
None.
Other current directorships
None.
Former directorships in last three years
None.
Simon Heggen
Non-Executive Director (Independent)
B.Econ, LL.B
Appointed
25 October 2012
Appointed
Non-Executive
Chairman
24 October 2019
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.
Special responsibilities
Was Chairman of the Audit and Risk Committee (1 July 2019 – 3 December 2019) and
was a member of the Remuneration and Nominations Committee (1 July 2019 – 2
December 2019).
Resigned
2 December 2019
Other current directorships
None.
Former directorships in last three years
None.
Milan Jerkovic
B.AppSC (Geology,
Diploma (Mineral
Economics), and
Diploma (Mining)
Appointed
1 May 2017
Resigned
30 August 2019
Non-Executive Director (Independent)
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.
Special responsibilities
Was a member of the Remuneration and Nominations Committee (1 July 2019 – 30
August 2019) and was a member of the Audit and Risk Committee (1 July 2019 – 30
August 2019).
Other current directorships
Blackham Resources Limited.
Former directorships in last three years
Geopacific Resources Limited (2013 – 2019).
- 11 -
NAME
PARTICULARS
Peter Newton
Non-Executive Chairman (Independent)
Appointed
Non-Executive
Chairman
14 December 2012
Resigned
2 December 2019
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.
Special responsibilities
Was Chairman of the Remuneration and Nominations Committee (1 July 2019 to 24
October 2019) and was a member of the Audit and Risk Committee (1 July 2019 to 24
October 2019).
Other current directorships
None.
Former directorships in last three years
Westgold Resources Limited (2016 – 2019)
Damien Marantelli
Managing Director
Diploma (Mining
Engineering)
Appointed
Non-Executive Director
3 September 2018
Appointed
Managing Director
12 November 2018
Resigned
Managing Director
2 December 2019
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.
Special responsibilities
None.
Resigned
Chief Executive Officer
1 March 2020
Other current directorships
None.
Former directorships in last three years
None.
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
Peter Gunzburg
Brett Smith
Patrick O’Connor
Grahame White
Xingwang Bao
Total
Fully Paid
Ordinary Shares
Options
-
160,000
1,000,000
-
-
1,160,000
-
-
-
-
-
-
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.
- 12 -
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 175 employees at 30 June 2020 (2019: 467).
DIVIDENDS
No dividends were paid during the period to members in respect to the 2019 financial year.
The Directors do not propose to pay any dividend for the financial year ended 30 June 2020.
Refer to note 10 for available franking credits.
SHARE OPTIONS
Unissued shares
As at the date of this report, there were 11,984,332 ordinary shares under options, refer to note 31.
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 refer to note 31 for further details.
RESULTS OF OPERATIONS
Details
30 June 2020
30 June 2019
Consolidated total loss after income tax
Total consolidated revenue
Total cost of sales
Impairment losses
Exploration and evaluation expenditure write off
Cash flows used operating activities
Cash flows used in investing activities
Cash flows from financing activities
KEY RESULTS FOR THE PERIOD ARE
CAPITAL INVESTMENT ACTIVITIES
$’000
80,340
143,449
166,170
15,363
105
21,043
32,080
55,854
$’000
116,969
204,722
238,147
64,200
6,570
15,161
46,310
41,600
Cash flows used in investing activities was $32,080,000, which was lower than the previous period (2019:
$46,310,000), mainly due to the large amount of capital expenditure at Nifty in the previous period. Capital
re-investment during the period:
•
•
Tin Division $13,750,000 (2019: $9,034,000), expenditure was higher than the previous period due
plant and equipment upgrades, the metallurgical improvement program and the commencement of
development of the Area 5 mining zone;
Copper Division $ 16,461,000 (2019: $40,499,000), expenditure was lower than the previous period
due to due to the suspension of operations in November 2019 and subsequently being placed on
care and maintenance; and
•
Nickel Division $ 1,340,000 (2019: $1,188,000).
- 13 -
RESULTS OF OPERATIONS (CONT.)
TIN DIVISION
•
•
•
Revenue from the 50% owned Renison was $73,243,000 (2019: $85,276,000). The revenue was
lower than the previous year as a result of lower tin prices.
The cost of sales was $70,329,000 (2019: $78,580,000). The costs were higher in the previous
period due to the drawdown of the large low grade ore stockpile developed prior to the construction
of the ore sorter in 2019.
During the period there was a review of the environmental obligations associated with the Mt
Bischoff Project, which resulted in an increase in the Consolidated Entity’s 50% share in the
provision for rehabilitation of $8,360,000 (2019: Nil) to $8,710,000 (2019: $350,000) (refer to note
24).
Performance of the Tin Division (50% share) is summarised below:
30 June 2020
30 June 2019
Physical Summary
UG Ore Mined
UG Grade Mined
Ore Processed
Head Grade
Recovery
Tin Produced
Tin Sold
Tin Price
Realised Tin Price (net of Tc/Rc charges)
Tin Sales Revenue (net of Tc/Rc charges)
Cost Summary
Mining
Processing
Administration
Stockpile Adj
C1 Cash Cost
Cost per tonne produced
Royalties
Other Marketing Costs
Sustaining Capital
Reclamation & other adj.
Corporate Costs
All-in Sustaining Costs
Cost per tonne produced
Project Startup Capital
Exploration Holding Cost
All-in Cost
Cost per tonne produced
Reconciliation to cost of sales
Units
t
% Sn
t
% Sn
% Sn
t
t
A$/t
A$/t
A$’000
A$’000
A$’000
A$’000
A$’000
A$’000
A$/t
A$’000
A$’000
A$’000
A$’000
A$’000
A$’000
A$/t
A$’000
A$’000
A$’000
A$/t
424,454
1.18%
344,591
1.42%
73.56%
3,591
3,412
24,511
21,466
73,243
27,988
23,218
4,838
431
56,475
15,729
1,522
542
1,369
27
104
60,039
16,721
12,869
124
73,032
20,340
398,990
1.21%
372,592
1.32%
72.36%
3,562
3,445
27,913
24,754
85,276
23,68
19,967
4,289
3,321
51,259
14,391
2,126
457
8,078
18
101
62,039
17,417
4,228
228
66,496
18,668
60,039
Sustaining Capital
All-in Sustaining Costs
Depreciation and amortisation
Inventory movements and other adjustments
A$’000
A$’000
A$’000
A$’000
A$’000
* 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.
Cost of sales
(1,369)
(2,004)
(8,078)
70,329
13,663
78,580
62,039
14,758
9,861
- 14 -
COPPER DIVISION
•
•
•
•
On 26 November 2019 the Company suspended mining operations at Nifty and subsequently
placed the mine into care and maintenance. During the period the Company incurred care and
maintenance costs of $24,744,000 (2019: Nil), which included costs of placing the operation into
suspension of $10,120,000 (2019: Nil).
During the period, an impairment assessment of Nifty was conducted which resulted in an
impairment loss of $15,363,000 (2019: $64,200,000) (refer to note 39).
Revenue from Nifty was $70,206,000 (2019: $119,446,000).
The cost of sales was $95,840,000 (2019: $159,567,000).
Performance of the Copper Division is summarised below:
Physical Summary
UG Ore Mined
UG Grade Mined
Ore Processed
Head Grade
Recovery
Copper Produced
Copper Sold
Copper Price
Realised Copper Price (net of Tc/Rc charges)
Units
t
% Cu
t
% Cu
% Cu
t
t
A$/t
A$/t
30 June 2020
30 June 2019
409,653
1.30
476,007
1.33
91.79
6,023
9,095
8,511
7,677
1,321,032
1.43
1,254,879
1.45
92.58
16,913
15,776
8,579
7,571
Copper Sales Revenue (net of Tc/Rc charges)
A$’000
70,206
119,446
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
Care and Maintenance Costs
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
A$’000
A$’000
A$’000
A$’000
A$’000
A$/t
A$’000
A$’000
A$’000
A$’000
A$’000
A$’000
A$/t
A$’000
A$’000
A$’000
A$’000
A$/t
A$’000
A$’000
A$’000
A$’000
A$’000
36,118
12,994
7,556
25,314
81,982
13,612
2,307
2,316
5,617
(19)
466
92,669
15,387
12,853
1,622
24,744
131,889
21,899
92,669
(5,617)
6,641
2,147
95,840
75,472
43,449
18,735
(5,699)
131,957
7,802
6,498
7,290
19,630
70
934
166,380
9,838
18,819
3,326
-
188,525
11,147
166,380
(19,630)
20,134
(7,317)
159,567
- 15 -
RESULTS OF OPERATIONS (CONT.)
IMPACT OF COVID-19
The onset of the COVID-19 pandemic was rapid on both an operational and personal level for employees,
the Company, our stakeholders and the communities within which Metals X operates.
Metals X took immediate action to protect the integrity of the Company’s business interests and the safety
and well-being of its employees and stakeholders.
Prompt implementation and affirmative compliance with government and health bodies forced quick
change to operating processes.
Metals X operates a number of isolated and remote mining areas and fortunately with the positive
protection measures and support of governments and employees all of our projects continued to function
close to normal levels. Although travel restrictions, social distancing and isolation practices had some
impacts on the Consolidated Entity. The demographic regions of our remote workforce required changes
to rosters and transport to comply with Government restrictions. The closure of borders required
immediate action to manage the impact on outputs, inputs, employees and communities that Metals X
operates in.
Social and mental health impact were a possible outcome from roster changes, changed travel,
commuting, dining and enhanced hygiene practices. The Company has taken a considerate approach to
the hidden consequences of such changes and continues to work with its employees to lessen the impact.
The over-arching objective of the Consolidated Entity has been to keep all its employees and stakeholders
safe and free from infection and/or spread, and importantly to keep people employed during these
uncertain times.
The net impact on the Consolidated Entity’s output has been minimal and estimated at less than 1%.
Cost impacts as a result of changed practices are estimated to be minor at less than 1%.
REVIEW OF OPERATIONS
A full review of the operations of the Consolidated Entity during the year ended 30 June 2020 is set out
on page 3 of this report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Total equity decreased by 49% ($49,803,000) to $51,791,000 (2019: $101,593,000). The decrease was
mainly due to asset impairments ($15,363,000), Nifty care and maintenance costs ($24,744,000), Mt
Bischoff rehabilitation costs ($8,360,000) and operating losses and administration expenses ($29,830,000),
which was offset by a capital raise of $30,401,000 (after costs) in September and October 2019.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
ASIA CHEER FINANCE FACILITY
On 27 July 2020, the Company entered into a loan facility with Asia Cheer Trading Limited (ACT) for a
$26,000,000 unsecured term loan facility (ACT Loan). The funds from the ACT Loan were to be applied
to the repayment of the amount outstanding pursuant to the Citi Facility. Draw down of the ACT Loan
was subject to the contemporaneous close out of the Citi Facility. The Loan was fully drawn down on 31
July 2020.
The key terms of the Loan are as follows:
Loan term:
Interest and charges: Establishment fee of 3.5%. Interest rate is BBSY plus 1.0%, approximate total
Until 31 January 2021
Key terms:
rate of 4.5%.
The net proceeds from the sale of Nifty or any capital raising undertaken by the
Company during the loan term must be paid to the lender in permanent reduction
of the Principal Amount.
CITI FINANCE FACILITY REPAYMENT
Under the Citi Facility the Company was required to remain within certain financial covenants which are
measured for compliance at the end of each calendar quarter. For the quarter ending 30 June 2020 the
Company did not met the Forecast Cash Flow Cover Ratio (Forecast CFCR) nor the Forward Debt
Service Cover Ratio (Forecast DSCR). The principal reason for the Forecast CFCR and the Forward
DCR were not met was the decision to proceed with the Area 5 development with its capital expenditure
for the Consolidated Entity’s 50% share being $25 – $27.5 million over the next two years.
- 16 -
SIGNIFICANT EVENTS AFTER THE BALANCE DATE (CONT.)
CITI FINANCE FACILITY REPAYMENT (CONT.)
On 27 July 2020, the Company entered into a loan facility with Asia Cheer Trading Limited (ACT) for a
$26,000,000 unsecured six month term loan facility (ACT Loan) ending on 31 January 2021. The funds
from the ACT Loan were to be applied to the repayment of the amount outstanding pursuant to the Citi
Facility. A further condition of the ACT Loan is that the net proceeds from the sale of Nifty or any capital
raising undertaken by the Company during the loan term must be paid to the lender in permanent
reduction of the Principal Amount.
On 31 July 2020, the Company announced that it paid out the principal and interest sum of the Citi Facility
and the Company settled and closed out the associated derivative contracts.
As a result of the pay out of the Citi Facility, the final condition was satisfied with regard to the ACT Loan
and the Company drew down the full A$26,000,000.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
It is expected that the Consolidated Entity will continue its exploration, mining, processing, production and
marketing of tin, will seek the sale of its copper assets and will seek funding development partner(s) for
or the outright sale of its nickel exploration projects. These are described in more detail in the Review of
Operations on page 3.
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.
- 17 -
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 2020 (FY2020). This Report forms part of the Directors’ Report and has been
audited in accordance with section 300A of the Corporations Act 2001 and its regulations. The Directors
have considered the impact of COVID-19 on the performance of the Consolidated Entity. Given the status
of the current projects, COVID-19 did not impact the remuneration for the year ended 30 June 2020.
REMUNERATION REPORT AT FY2019 AGM
Metals X received 71.35% votes for and 28.65% votes against its Remuneration Report for the financial
year ending 30 June 2019, resulting in a “First Strike” being recorded.
In September 2019 the Company received notices pursuant to sections 203D, 249N and 249D of the
Corporations Act on behalf of APAC, regarding the intention of APAC to move resolutions for the
appointment and removal of Directors of the Company, requisitioning a meeting of shareholders to
consider those resolutions and a member’s statement from APAC to be tabled at the shareholder meeting
(Notices). The Notices nor the member’s statement from APAC made any objection to the Company’s
remuneration structure.
The issues raised in the Notices and member’s statement from APAC have been resolved by a
subsequent change in the composition of the board and the appointment of Brett Smith (APAC’s nominee)
as a Director of the Company.
During the period the Board reviewed the variable remuneration for KMP’s and overall performance of the
Company. As a result of a decline of the Company’s performance, short term incentives that were
achieved by KMP’s in FY2020 were forfeited at the discretion of the Board. In addition the Board proposed
a refresh of the remuneration strategy going forward (refer below).
FUTURE REMUNERATION STRATEGY – FY2021
As a result of decision of the Board to pursue the divestment of the Company’s copper assets (refer to
ASX announcement dated 2 July 2020 “Copper Assets Strategic Review – Proposed Sale”) the variable
remuneration, both STI and LTI, for KMP’s (other than for the Executive Director, Brett Smith) has been
suspended effective 1 July 2020 for FY2021. The Board will consider the appropriate variable structure
for KMP’s at a future date.
Due to the receipt of notices pursuant to sections 203D, 249N and 249D of the Corporations Act 2001
(Cth) (Corporations Act) on behalf of APAC Resources Strategic Holdings Ltd (APAC) in June 2020,
Board changes were effected on 10 July 2020 with Mr Peter Gunzburg appointed as Non-Executive
Chairman, Mr Grahame White appointed as Non-Executive Director and Mr Brett Smith appointed as
Executive Director.
Following the appointment of Mr Gunzburg and Mr White, a reduction in non-executive director fees of
$10,000 per annum was made effective 1 August 2020.
FY2020 REMUNERATION REPORT
The Report details the remuneration arrangements for Metals X’s Key Management Personnel (KMP):
• Non-Executive Directors (NEDs)
• Managing Director (MD) or Chief Executive Officer (CEO) or Executive Director (ED) 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.
- 18 -
1. REMUNERATION REPORT OVERVIEW (CONT.)
Details of KMP of the Consolidated Entity are set out below:
(i) Directors
Details
Peter Gunzburg 2
Non-Executive Chairman
Brett Smith 5
Patrick O'Connor 2
Grahame White
Xingwang Bao
Brett Lambert
Anthony Polglase
Peter Newton
Damien Marantelli 3
Simon Heggen 1
Milan Jerkovic
Yimin Zhang
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
(ii) Other Executives (KMPs)
Michael Spreadborough 4 Chief Executive Officer (CEO)
Campbell Baird
Russell Cole
Simon Rigby
Stephen Robinson
Fiona Van Maanen
EGM - Mining & Technical
General Manager - Nifty
EGM - Geology & Business
Development
EGM - Projects & Planning
CFO & Company Secretary
Appointed
10 Jul 2020
2 Dec 2019
24 Oct 2019
10 Jul 2020
10 Jan 2020
24 Oct 2019
24 Oct 2019
14 Dec 2012
3 Sept 2018
25 Oct 2012
1 May 2017
9 Jan 2017
19 Dec 2019
3 Sep 2018
23 Aug 2018
5 Jun 2018
25 Nov 2016
1 Jul 2005
Resigned
-
-
-
-
-
10 Jul 2020
10 Jul 2020
24 Oct 2019
2 Dec 2019
2 Dec 2019
30 Aug 2019
10 Jan 2020
-
30 Nov 2019
31 Jan 2020
-
-
-
1) Simon Heggen was appointed Non-Executive Chairman of the Company upon the resignation of Peter Newton on
24 October 2019.
2) Patrick O'Connor was appointed Non-Executive Chairman of the Company upon the resignation of Simon Heggen
on 2 December 2019 and was subsequently appointed Executive Chairman on 17 December 2019. Upon the
appointment of Peter Gunzburg as the Non-Executive Chairman on 10 July 2020, Mr O'Connor became a Non-
Executive Director
3) Damien Marantelli resigned as the Managing Director on 2 December 2019, was subsequently appointed as the
CEO and resigned 1 March 2020.
4) Michael Spreadborough was appointed as the Chief Operations Officer on 19 December. He was subsequently
appointed the CEO on 3 March 2020.
5) Brett Smith was appointed an Executive Director on 10 July 2020.
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.
2. REMUNERATION GOVERNANCE
REMUNERATION AND NOMINATION COMMITTEE RESPONSIBILITY
The Remuneration and Nomination Committee (the 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.
The 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 Committee is set out on page 32 of this annual report.
- 19 -
REMUNERATION REPORT (AUDITED) (CONT.)
2. REMUNERATION GOVERNANCE (CONT.)
USE OF REMUNERATION CONSULTANTS
In forming remuneration recommendations, each year the Committee obtains and considers industry
specific independent data and professional advice as appropriate. All reports and professional advice
relating to KMP remuneration are commissioned and received directly by the Committee.
At the end of FY2020 the Committee approved the engagement of Godfrey Remuneration Group Pty Ltd
(GRG) to review and provide recommendations on the Consolidated Entity’s executive remuneration
framework and policies for FY2021. 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/CEO/ED
for approving remuneration recommendations for employees other than KMP, within the parameters of
approved remuneration levels and structures.
Both GRG and the Committee are satisfied the advice received from GRG was free from undue influence
from the KMP to whom the remuneration recommendations apply. The fees paid to GRG for the
remuneration recommendations for FY2021 were $26,000.
Due to the receipt of notices pursuant to sections 203D, 249N and 249D of the Corporations Act 2001
(Cth) (Corporations Act) on behalf of APAC Resources Strategic Holdings Ltd (APAC) in June 2020 the
Committee did not consider nor implement the recommendations of the GRG Remuneration Review.
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.
3. NON-EXECUTIVE DIRECTOR REMUNERATION
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.
The FY2020 director’s fee for the Chairman was $110,000 per annum (reducing to $100,000 from 1
August 2020 in FY2021). The FY2020 director’s fee for other NEDs was $80,000 per annum (reducing to
from 1 August 2020 $70,000 in FY2021). The director’s fees are exclusive of any contributions to
superannuation funds nominated by Directors.
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.
For the period from 19 December 2020, Mr O’Connor was paid additional consulting fees for the role as
Executive Chairman based on an hourly rate limited to 8 hours in any day less any director fee paid, in
accordance with the Board approved policy.
- 20 -
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 FY2020
total remuneration packages split between the fixed and variable remuneration is shown below:
Executive
Executives
Fixed remuneration
50%
STI
20%
LTI
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.
- 21 -
REMUNERATION REPORT (AUDITED) (CONT.)
4. EXECUTIVE REMUNERATION (CONT.)
SHORT TERM INCENTIVE ARRANGEMENTS
Under the STI plan in FY2020, 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
Executives had a maximum STI opportunity of 40% of total fixed
remuneration.
is performance
How
measured?
When is it paid?
What happens if an
executive leaves?
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 FY2020:
•
•
•
•
KPI 1: All-in-sustaining cost (AISC) per tonne (30%)
Threshold - 5% above budget, Target – equal to budget and Maximum
– 5% below budget;
KPI 2: Production (tonnes of copper and tin metal) (30%)
Threshold - 10% below budget, Target – equal to budget and
Maximum – 10% above budget;
KPI 3: Safety performance (30%)
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 (10%).
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.
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).
- 22 -
4. EXECUTIVE REMUNERATION (CONT.)
LONG TERM INCENTIVE ARRANGEMENTS
Under the LTI plan in FY2020, 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
Executives are eligible to receive performance options.
In FY2020 options issued were performance options, being an option to
acquire an ordinary share in Metals X for nil consideration.
Executives had a maximum LTI opportunity of 60% 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.
is performance
How
measured?
Performance options issued in 2020 are subject to performance measures
over a three year performance period.
The performance measures are:
• Relative Total Shareholder Return (50%); and
• Return on Capital Employed (50%).
Relative TSR was selected as it focuses executives on shareholder value
creation and is widely accepted and understood by shareholders.
ROCE was selected as it focuses executives on generating earnings that
efficiently use shareholder capital and the reinvestment of earnings.
The TSR is measured 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. Refer to note 31 for vesting schedules of the
performance measures.
When is performance
measured?
Performance is measured at the end of the two or three year 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, 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. There were no sign on payments in FY2020.
- 23 -
REMUNERATION REPORT (AUDITED) (CONT.)
5. PERFORMANCE AND EXECUTIVE REMUNERATION OUTCOMES
REMUNERATION EARNED BY EXECUTIVES IN FY2020
The actual remuneration earned by executives in the year ended 30 June 2020 is set out in Table 1. This
provides shareholders with a view of the remuneration paid to executives for performance in FY2020.
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 FY2020:
Weighting
Actuals
Achievement
Weighted
Achievement
Metric
AISC
Production
Reduction
injury frequency rate (TRIFR)
total recordable
in
Copper – 15%
Tin – 15%
Copper - below threshold
Tin - between threshold
and target
Copper – 0%
Tin – 51.2%
Copper – 15%
Tin – 15%
Copper - below threshold
Tin – between target and
maximum
Copper – 0%
Tin – 27.0%
Copper – 15%
Tin – 15%
Copper - below threshold
Tin - between threshold
and target
Copper – 0%
Tin – 0%
Board Discretion
10%
Below threshold
0%
Percentage of Maximum STI achieved
0%
7.7%
0%
4.0%
0%
0.0%
0%
11.7%
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 FY2020 to executives were recommended as detailed
in the following table:
Name
Position
Damien Marantelli 1
Managing Director
Campbell Baird 2
EGM – Mining & Technical
Russell Cole 3
General Manager – Nifty Copper Operation
Simon Rigby 4
EGM – Geology & Business Development
Stephen Robinson 4
EGM – Projects & Planning
Fiona Van Maanen 4
Chief Financial Officer & Company Secretary
Maximum STI
Awardable
Achieved
STI
STI
Awarded
$
301,125
175,200
148,920
142,350
164,250
160,000
%
-
-
-
11.7%
11.7%
11.7%
$
-
-
-
-
-
-
1. Damien Marantelli resigned on 1 March 2020 and 100% of the STI has been forfeited.
2. Campbell Baird was terminated on 30 November 2019 and 100% of the STI has been forfeited.
3. Russell Cole resigned on 31 January 2020 and 100% of the STI has been forfeited.
4. Whilst the STI has been achieved, 100% of the STI has been forfeited at the discretion of the Board due to the overall decline
in performance of the Company over the period.
LTI PERFORMANCE AND OUTCOMES
LTI performance options granted to the Executives in FY2020 are subject to achievement of performance
measures over a three year vesting period ending on 30 June 2023 respectively.
LTI performance options granted to Executives in FY2019 will be subject to achievement of performance
measures over a two year vesting period ending on 30 June 2021 and 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.
- 24 -
5. PERFORMANCE AND EXECUTIVE REMUNERATION OUTCOMES (CONT.)
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.
30 June
2016 *
30 June
2017
30 June
2018
30 June
2019 **
30 June
2020 ***
Closing share price
Profit/(loss) per share (cents)
Net assets per share
Total Shareholder Return
Dividend paid per shares (cents)
$1.40
-5.21
$0.82
4%
-
$0.67
-17.43
$0.27
12%
1.000
$0.80
-4.30
$0.28
19%
-
$0.25
-17.17
$0.15
-69%
$0.08
-9.45
$0.06
-68%
-
-
* Pre demerger of Westgold Resources Limited.
** AASB 9 and AASB 15 were adopted for the year ended 30 June 2019. The prior year comparatives have not been updated.
*** AASB 16 was adopted for the year ended 30 June 2020. The prior year comparatives have not been updated.
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
Annual Base
Remuneration
Superannuation
Resigned
Notice
Period
Maximum
Termination
Payment
Michael Spreadborough **
$625,000
Patrick O’Connor ***
Damien Marantelli
Campbell Baird
Russell Cole
Simon Rigby ****
Stephen Robinson
Fiona Van Maanen ****
$110,000
$550,000
$400,000
$340,000
$325,000
$375,000
$365,297
N/A
N/A
-
-
1 month
N/A
N/A
N/A
9.5%
1 Mar 2020
3 months
6 months
9.5%
30 Nov 2020
3 months
6 months
9.5%
31 Jan 2019
1 month
per NES *
9.5%
9.5%
9.5%
-
-
1 month
6 months
3 months
6 months
3 months
6 months
* NES are National Employment Standards as defined in the Fair Work Act 2009 (Cth).
** Michael Spreadborough is employed under a service agreement on a fixed rate that is inclusive of superannuation and any other
employment entitlements.
*** From 16 December 2020, Patrick O’Connor was paid additional consulting fees for the role as Executive Chairman. In
accordance with the Board approved policy, he was paid on an hourly rate limited to 8 hours in any day less any director’s fees paid.
**** Simon Rigby and Fiona Van Maanen have flexible employment contracts that provide that they will be paid for the hours worked.
- 25 -
REMUNERATION REPORT (AUDITED) (CONT.)
6.
EXECUTIVE EMPLOYMENT ARRANGEMENTS (CONT.)
Table 1: Remuneration for the year ended 30 June 2020
Remuneration of key
management personnel of
the Consolidated Entity
Non-Executive Directors
Patrick O'Connor 1
Brett Lambert 2
Anthony Polglase 2
Brett Smith 2
Xingwang Bao 2
Peter Newton 3
Simon Heggen 3
Milan Jerkovic 3
Yimin Zhang 3
Executive Directors
Damien Marantelli 4
Other key management personnel
Michael Spreadborough 5
Campbell Baird 6
Russell Cole 7
Simon Rigby
Stephen Robinson
Fiona Van Maanen
Totals
Salary and
Fees
Cash Bonus
Non monetary
benefits
Superannuation
Employee
Entitlements
Options
%
Performance
related
Short Term
Post
employment
Long term
benefits
Share based
payment
Termination
payments
Total
270,221
55,054
55,054
46,237
-
36,667
41,436
13,333
42,151
560,153
366,667
359,663
166,667
286,135
400,437
389,793
391,726
2,361,088
2,921,241
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,816
-
-
-
-
-
-
467
-
3,283
6,893
5,230
5,230
4,392
-
3,483
3,936
1,267
4,004
34,435
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
279,930
60,284
60,284
50,629
-
40,150
45,372
15,067
46,155
597,871
2,816
34,833
10,489
(1,239)
45,833
459,399
1,661
3,913
-
7,130
10,858
11,053
37,431
40,714
-
15,833
27,182
38,042
20,833
30,783
167,506
201,941
-
10,067
13,968
17,999
32,786
8,831
94,140
94,140
-
(45,893)
(39,009)
46,085
58,269
56,874
75,087
75,087
-
230,769
196,155
-
-
-
361,324
381,357
484,431
509,693
512,539
499,267
472,757
3,208,009
472,757
3,805,880
-
-
-
-
-
-
-
-
-
(0)
-
(12)
(8)
9
11
11
1. Patrick O'Connor was appointed as a Non-Executive Director on 24 October 2019 and was subsequently appointed Executive Chairman on 17 December 2019.
2. Brett Lambert and Anthony Polglase were both appointed on 24 October 2019. Brett Smith and Xingwang Bao were appointed on 2 December 2019 and 10 January 2020 respectively.
3. Milan Jerkovic, Peter Newton, Simon Heggen and Yimin Zhang resigned on 30 August 2019, 24 October 2019, 2 December 2019 and 10 January 2020 respectively.
4. Damien Marantelli resigned as the Managing Director on 2 December 2019, was subsequently appointed as the CEO and resigned on 1 March 2020.
5. Michael Spreadborough was appointed CEO on 3 March 2020.
6. Campbell Baird was terminated on 30 November 2019.
7. Russell Cole resigned on 31 January 2020.
- 26 -
6.
EXECUTIVE EMPLOYMENT ARRANGEMENTS (CONT.)
Table 2: Remuneration for the year ended 30 June 2019
Remuneration of key
management personnel of
the Consolidated Entity
$,000
Non-Executive Directors
Peter Newton
Simon Heggen
Milan Jerkovic
Yimin Zhang
Executive Directors
Damien Marantelli 1
Warren Hallam 2
Other key management personnel
Campbell Baird 3
Russell Cole 3
John Croall 2
Allan King 2
Mark Recklies
Simon Rigby 3
Stephen Robinson 4
Fiona 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
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
677,208
553,594
4,378,907
553,594
4,762,157
%
Performance
related
-
-
-
-
27
23
16
10
(493)
(229)
12
13
30
27
1. Damien 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. Warren Hallam and Allan King both resigned on 12 November 2018 and JR Croall resigned on 6 July 2018.
3. Campbell Baird, Russell Cole and Simon Rigby were employed on 3 September 2018, 23 August 2018 and 5 June 2018
respectively.
4. Stephen Robinson resigned as an Executive Director on 3 September and was subsequently employed as the Executive General Manger-Projects and Planning.
- 27 -
REMUNERATION REPORT (AUDITED) (CONT.)
7. ADDITIONAL STATUTORY DISCLOSURES
This section sets out the additional disclosures required under the Corporations Act 2001.
Table 3: Options granted, vested and lapsed during the year (Consolidated)
KMP
Damien Marantelli 1
Damien Marantelli 1
Damien Marantelli 1
Damien Marantelli 1
Damien Marantelli 1
Campbell Baird 2
Campbell Baird 2
Campbell Baird 2
Campbell Baird 2
Campbell Baird 2
Campbell Baird 2
Russell Cole 3
Russell Cole 3
Russell Cole 3
Russell Cole 3
Russell Cole 3
Russell Cole 3
Simon Rigby
Simon Rigby
Simon Rigby
Simon Rigby
Stephen Robinson
Stephen Robinson
Stephen Robinson
Stephen Robinson
Fiona Van Maanen
Fiona Van Maanen
Fiona Van Maanen
Fiona Van Maanen
Fiona Van Maanen 4
Year of
grant
Options
granted
during the
year (No.)
Performance
options
granted (No.)
Grant date
Fair value
per option
at grant
date
Fair value
of options
$
Vesting
date
Exercise
price
Expiry
dated
Options
vesting
during the
period
Options
lapsed
during the
year
2020
2020
2019
2019
2019
2020
2020
2019
2019
2019
2019
2020
2020
2019
2019
2019
2019
2020
2020
2019
2019
2020
2020
2019
2019
2020
2020
2019
2019
2017
-
-
1,000,000
1,000,000
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
961,702
961,702
-
-
-
524,565
524,565
83,413
83,413
83,413
83,413
445,880
445,880
70,901
70,901
70,901
70,901
426,209
426,209
57,347
57,347
491,779
491,779
78,200
78,200
481,242
481,242
76,177
76,177
24 Nov 2019
24 Nov 2019
25 Jan 2019
25 Jan 2019
25 Jan 2019
3 Jul 2019
3 Jul 2019
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
3 Jul 2019
3 Jul 2019
7 Dec 2018
7 Dec 2018
7 Dec 2018
7 Dec 2018
3 Jul 2019
3 Jul 2019
7 Dec 2018
7 Dec 2018
3 Jul 2019
3 Jul 2019
7 Dec 2018
7 Dec 2018
3 Jul 2019
3 Jul 2019
7 Dec 2018
7 Dec 2018
-
20 Jan 2017
$0.09
$0.15
$0.12
$0.15
$0.16
$0.09
$0.15
$0.26
$0.40
$0.27
$0.40
$0.09
$0.15
$0.26
$0.40
$0.27
$0.40
$0.09
$0.15
$0.26
$0.40
$0.09
$0.15
$0.26
$0.40
$0.09
$0.15
$0.26
$0.40
$0.19
87,515
1 Jul 2022
144,255
1 Jul 2022
124,410
22 Jan 2020
145,044
22 Jan 2021
163,212
22 Jan 2022
47,735
78,685
21,270
33,365
22,522
33,365
40,575
66,882
18,080
28,360
19,143
28,360
38,785
63,931
14,623
22,939
44,752
73,767
19,941
31,280
43,793
72,186
19,425
30,471
1 Jul 2022
1 Jul 2022
1 Jul 2020
1 Jul 2020
1 Jul 2021
1 Jul 2021
1 Jul 2022
1 Jul 2022
1 Jul 2020
1 Jul 2020
1 Jul 2021
1 Jul 2021
1 Jul 2022
1 Jul 2022
1 Jul 2020
1 Jul 2020
1 Jul 2022
1 Jul 2022
1 Jul 2020
1 Jul 2020
1 Jul 2022
1 Jul 2022
1 Jul 2020
1 Jul 2020
226,780
20 Jan 2018
$0.00
$0.00
$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
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.76
30 Jun 2024
30 Jun 2024
-
-
22 Jan 2022
1,000,000
22 Jan 2023
22 Jan 2024
30 Jun 2024
30 Jun 2024
30 Jun 2022
30 Jun 2022
30 Jun 2023
30 Jun 2023
30 Jun 2024
30 Jun 2024
30 Jun 2022
30 Jun 2022
30 Jun 2023
30 Jun 2023
30 Jun 2024
30 Jun 2024
30 Jun 2022
30 Jun 2022
30 Jun 2024
30 Jun 2024
30 Jun 2022
30 Jun 2022
30 Jun 2024
30 Jun 2024
30 Jun 2022
30 Jun 2022
20 Jan 2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
961,702
961,702
1,000,000
1,000,000
1,000,000
524,565
524,565
83,413
83,413
83,413
83,413
445,880
445,880
70,901
70,901
70,901
70,901
-
-
-
-
-
-
-
-
-
-
-
-
1,200,000
- 28 -
7. ADDITIONAL STATUTORY DISCLOSURES (CONT.)
1. During the period 3,000,000 share options and 1,923,404 performance option issued to Damien
Marantelli lapsed upon his resignation as the options had not vested at that date and were
subsequently forfeited.
2. During the period 1,382,781 performance options issued to Campbell Baird lapsed upon his
termination as the options had not vested at that date and were subsequently forfeited.
3. During the period 1,175,363 performance options issued to Russell Cole lapsed upon his
resignation as the options had not vested at that date and were subsequently forfeited.
4. During the period 1,200,000 share options issued to Fiona Van Maanen lapsed.
For details on vesting conditions and valuation of the options, including models and assumptions used,
please refer to note 31.
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 2019
On exercise of
options
Net change
other ^
Balance held at
30 June 2020
Directors
Patrick O'Connor
Peter Gunzburg
Brett Lambert
Anthony Polglase
Brett Smith
Grahame White
Xingwang Bao
Peter Newton
Damien Marantelli
Simon Heggen
Milan Jerkovic
Yimin Zhang
Executives
Campbell Baird
Russell Cole
Simon Rigby
Stephen Robinson
Fiona Van Maanen
-
-
-
-
-
-
-
16,070,217
-
6,689
917,500
-
123,000
-
20,000
129,000
521,041
Total
17,787,447
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
-
-
-
160,000
-
-
(16,070,217)
-
(6,689)
(917,500)
-
(123,000)
-
3,334
209,983
86,841
1,000,000
-
-
-
160,000
-
-
-
-
-
-
-
-
-
23,334
338,983
607,882
(15,657,248)
2,146,686
^ Represents acquisitions and disposals of shares on market and shares issued under the dividend
reinvestment plan, as well as departures and appointments.
- 29 -
REMUNERATION REPORT (AUDITED) (CONT.)
7. ADDITIONAL STATUTORY DISCLOSURES (CONT.)
Table 5: Share option holdings of key management personnel (including nominees)
Share options balance
at end of period
30 June 2019
Share options
granted as
remuneration
Share options lapsed
during the period and
forfeited
Share options balance
at end of period
30 June 2020
Share options
vested and not
exercisable
Share options
vested and
exercisable
-
-
-
-
-
-
-
-
3,000,000
-
-
-
-
-
-
1,200,000
2,400,000
6,600,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,000,000)
-
-
-
-
-
-
-
(1,200,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,200,000
1,200,000
(4,200,000)
2,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,200,000
1,200,000
2,400,000
Directors
Patrick O'Connor
Peter Gunzburg
Brett Lambert
Anthony Polglase
Brett Smith
Grahame White
Xingwang Bao
Peter Newton
Damien Marantelli
Simon Heggen
Milan Jerkovic
Yimin Zhang
Executives
Campbell Baird
Russell Cole
Simon Rigby
Stephen Robinson
Fiona Van Maanen
Total
- 30 -
7.
ADDITIONAL STATUTORY DISCLOSURES (CONT.)
Table 6: Performance option holdings of key management personnel (including nominees)
Performance options
balance at end of
period 30 June 2019
Performance
options granted
as remuneration
Performance options
lapsed during the
period and forfeited
Performance options
balance at end of
period 30 June 2020
Performance
options not
vested
Performance
options vested
and exercisable
Directors
Patrick O'Connor
Peter Gunzburg
Brett Lambert
Anthony Polglase
Brett Smith
Grahame White
Xingwang Bao
Peter Newton
Damien Marantelli
Simon Heggen
Milan Jerkovic
Yimin Zhang
Executives
Campbell Baird
Russell Cole
Simon Rigby
Stephen Robinson
Fiona Van Maanen
-
-
-
-
-
-
-
-
-
-
-
-
333,654
283,606
229,388
312,800
304,708
-
-
-
-
-
-
-
-
1,923,404
-
-
-
1,049,129
891,759
852,417
983,558
962,484
-
-
-
-
-
-
-
-
(1,923,404)
-
-
-
(1,382,783)
(1,175,365)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
967,111
1,139,958
1,114,838
-
-
967,111
1,139,958
1,114,838
Total
1,464,156
6,662,751
(4,481,552)
3,645,355
3,645,355
End of Audited Remuneration Report.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 31 -
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:
Director
Directors Meetings
Audit and Risk
Committee Meetings
Remuneration &
Nomination Committee
Meetings
Number of
meetings
eligible to
attend
Number
of
meetings
attended
Number of
meetings
eligible to
attend
Number
of
meetings
attended
Number of
meetings
attended
Number
of
meetings
eligible to
attend
Brett Smith
Patrick O’Connor
Xingwang Bao
Brett Lambert
Anthony Polglase
Peter Newton
Simon Heggen
Milan Jerkovic
Yimin Zhang
Damien Marantelli
14
17
12
17
17
10
12
5
16
12
14
17
5
17
17
10
12
5
15
12
-
1
-
1
1
1
1
1
-
-
-
1
-
1
1
1
1
1
-
-
-
1
-
1
1
2
2
2
-
-
-
1
-
1
1
2
2
2
-
-
All Directors were eligible to attend all meetings held except for the following:
•
•
•
•
•
•
•
•
Milan Jerkovic who resigned on 30 August 2019;
Peter Newton who resigned on 24 October 2019;
Patrick O’Connor who was appointed on 24 October 2019;
Simon Heggen and Damien Marantelli who both resigned on 2 December 2019;
Brett Smith who was appointed on 2 December 2019;
Yimin Zhang who resigned on 10 January 2020;
Xingwang Bao who was appointed on 10 January 2020
Brett Lambert and Anthony Polglase who were both appointed on 24 October 2019 and both resigned
on 10 July 2020.
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 and Risk Committee
Remuneration and Nomination Committee
Grahame White *
Peter Gunzburg
Patrick O’Connor
Peter Gunzburg *
Grahame White
Patrick O’Connor **
Brett Lambert ** - resigned 10 July 2020
Brett Lambert - resigned 10 July 2020
Anthony Polglase - resigned 10 July 2020
Anthony Polglase - resigned 10 July 2020
Simon Heggen ** – resigned 2 December 2019
Simon Heggen – resigned 2 December 2019
Peter Newton – resigned 24 October 2019
Peter Newton ** – resigned 24 October 2019
Milan Jerkovic – resigned 30 August 2019
Milan Jerkovic – resigned 30 August 2019
Notes:
* Designates the current Chairman of the Committee.
** Designates a previous Chairman of the Committee.
- 32 -
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/.
AUDITOR’S INDEPENDENCE AND NON-AUDIT SERVICES
AUDITOR INDEPENDENCE
The Directors’ received the Independence Declaration, as set out on page 34, 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
$
47,000
ROUNDING
The amounts contained in this financial report have been rounded to the nearest $1,000 where rounding is
applicable and where noted ($’000) under the option available to the Company under ASIC Corporations
(Rounding in Financial/Director’s Reports) Instrument 2016/191 dated 24 March 2016. The Company is an
entity to which this legislative instrument applies.
Signed in accordance with a resolution of the Directors.
Brett Smith
Executive Director
Perth, 15 September 2020
- 33 -
AUDITOR’S INDEPENDENCE DECLARATION
- 34 -
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2020
Notes
5
7(a)
6
7(b)
7(c)
7(d)
7(e)
31
12
24
39, 19
21
8
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
Share-based payments
Fair value loss on provisionally priced trade receivables
Care and maintenance costs
Rehabilitation provision
Impairment loss on assets
Exploration and evaluation expenditure written off
Loss before income tax from continuing operations
Income tax expense
Loss for the period from continuing operations
Loss attributable to:
Members of the parent
Total comprehensive loss attributable to:
Members of the parent
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
2020
$'000
2019
$'000
143,449
(166,170)
(22,721)
671
(6,659)
1,219
(1,992)
(83)
(137)
(2,066)
(24,744)
(8,360)
(15,363)
(105)
(80,340)
-
(80,340)
204,722
(238,147)
(33,425)
935
(6,747)
4,387
(1,472)
(4,422)
(694)
(4,761)
-
-
(64,200)
(6,570)
(116,969)
-
(116,969)
(80,340)
(80,340)
(116,969)
(116,969)
(80,340)
(80,340)
(116,969)
(116,969)
(9.45)
(9.45)
(17.17)
(17.17)
- 35 -
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Derivative financial instruments
Total current assets
NON-CURRENT ASSETS
Other financial assets
Derivative financial instruments
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
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
TOTAL EQUITY
Notes
11
12
13
14
16
15
17
18
19
20
21
22
23
25
24
26
28
29
30
2020
$'000
14,095
6,153
20,328
885
1,532
42,993
9,978
-
50
43,315
39,633
13,993
106,969
149,962
7,518
3,680
33,108
44,306
51,397
2,468
53,865
98,171
51,791
2019
$'000
11,364
16,545
45,860
2,454
-
76,223
10,772
45
243
46,466
42,547
10,179
110,252
186,475
25,442
7,818
5,043
38,303
42,269
4,310
46,579
84,882
101,593
332,406
(308,796)
28,181
51,791
302,005
(228,456)
28,044
101,593
- 36 -
CONSOLIDATED STATEMENT OF CASH FLOWS FOR
THE YEAR ENDED 30 JUNE 2020
Notes
2020
$'000
2019
$'000
OPERATING ACTIVITIES
Receipts from customers
Interest received
Other income
Payments to suppliers and employees
Interest paid
Net cash flows used in operating activities
11
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
Proceeds from sale of equity instruments
Net cash flows used in investing activities
FINANCING ACTIVITIES
Proceeds from borrowings
Repayment of borrowings
Payment of lease liabilities and hire purchase liabilities
Payments for dividends
Proceeds from share issue
Payments for share issue costs
Payments for performance bond facility
Proceeds from performance bond facility
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial period
Cash and cash equivalents at the end of the period
11
147,468
201,635
441
230
816
97
(167,549)
(217,168)
(1,633)
(21,043)
(541)
(15,161)
(10,405)
(18,230)
(3,919)
319
155
(10,846)
(34,516)
(5,506)
15
4,543
(32,080)
(46,310)
34,899
(4,814)
(5,369)
(58)
32,731
(2,330)
-
795
-
-
(5,352)
(6)
50,000
(2,582)
(460)
-
55,854
41,600
2,731
11,364
14,095
(19,871)
31,235
11,364
- 37 -
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
30 JUNE 2020
Accumulated
losses
$'000
Share based
payments reserve
$'000
Fair value
reserves
$'000
Total Equity
$'000
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
2020
At 1 July 2019
Loss for the year
Other comprehensive income, net of tax
Issued capital
$'000
254,587
-
-
-
-
50,000
(2,582)
302,005
302,005
-
-
(111,487)
(116,969)
-
(116,969)
-
-
-
27,350
-
-
-
694
-
-
(228,456)
28,044
(228,456)
(80,340)
-
28,044
-
-
Total comprehensive (loss)/profit for the year net of tax
302,005
(308,796)
28,044
Transactions with owners in their capacity as owners
Share based payments
Issue of share capital
Share issue costs
At 30 June 2020
-
32,731
(2,330)
332,406
-
-
-
137
-
-
(308,796)
28,181
- 38 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
170,450
(116,969)
-
(116,969)
694
50,000
(2,582)
101,593
101,593
(80,340)
-
21,253
137
32,731
(2,330)
51,791
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
1. CORPORATE INFORMATION
The financial report of Metals X Limited for the year ended 30 June 2020 was authorised for issue in accordance with
a resolution of the Directors on 2 September 2020.
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 consolidated financial statements
comprise the financial statements of Metals X Limited and its subsidiaries (the Consolidated Entity).
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 instruments measured
at fair value through profit and loss.
The amounts contained in the financial statements have been rounded to the nearest thousand dollars unless
otherwise stated (where rounding is applicable) under the option available to the Consolidated Entity under ASIC
Corporations (Rounding in Financial Report) Instrument 2016/191.
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 and 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 $80,340,000 for the year ended 30 June 2020 (2019:
$116,969,000) which includes an impairment loss on assets of $15,363,000 (2019: $64,200,000) and a net operating
and investing cash outflow of $53,123,000 (2019: $61,471,000). As at 30 June 2020 the Consolidated Entity had
cash and cash equivalents of $14,095,000 (2019: $11,364,000) and a net current asset deficit of $1,313,000 (2019:
$37,921,000 surplus). COVID-19 did not significantly contribute to these losses nor did it have a significant adverse
impact on the Company during the period.
On 26 November 2019 the Company announced that the Nifty operations were suspended and were subsequently
placed into care and maintenance. In January 2020 the Company announced that it had commenced a strategic
review of its Copper Assets to explore all options including joint arrangements and the partial or complete divestment
of some or all of the assets. In June 2020 the Company announced that it had signed a binding Farm-in and Joint
Venture Term Sheet with IGO on the Company’s Paterson Exploration Project (refer to review of operations on page
3). On 2 July 2020 the Company announced that the Board had resolved to seek offers for the proposed sale of its
entire Copper Asset portfolio.
In August 2019, the Company entered into a facility agreement with Citibank N.A. (Citi) for a $35,000,000 secured
term loan facility (Citi Facility). The Citi Facility was fully utilized and the principal outstanding at 30 June 2020 was
$30,462,000. Under the Citi Facility the Company was required to remain within certain financial covenants which
are measured for compliance at the end of each calendar quarter. For the quarter ending 30 June 2020 the Company
did not met the Forecast Cash Flow Cover Ratio (Forecast CFCR) nor the Forward Debt Service Cover Ratio
(Forecast DSCR). The principal reason the Forecast CFCR and the Forward DSCR were not met was the decision
to proceed with the Area 5 development with associated capital expenditure for the Consolidated Entities 50% share
being $25 million – 27.5 million over the next two years.
On 27 July 2020, the Company entered into a loan facility with Asia Cheer Trading Limited (ACT) for a $26,000,000
unsecured six month term loan facility (ACT Loan) ending on 31 January 2021. The funds from the ACT Loan were
to be applied to the repayment of the amount outstanding pursuant to the Citi Facility. A further condition of the ACT
Loan is that the net proceeds from the sale of Nifty or any capital raising undertaken by the Company during the loan
term must be paid to the lender in permanent reduction of the Principal Amount (refer to note 40). On 31 July 2020,
the Company settled the Citi Facility in full by repaying the outstanding principal and accrued interest of $30,556,000.
On 21 August 2020, ACT provided the Company with a waiver of the mandatory repayment of the loan from the sale
of the Copper Assets or any capital raising undertaken by the Company if required to assist with management of
working capital. On 31 August 2020, ACT advised the Company that if required, the ACT Loan will be amended to
increase the commitment by $5,000,000 to $31,000,000 and extend the repayment date to 31 July 2021. If the
amendments are required the Company is to provide ACT with a formal written notice prior to 31 October 2020.
- 39 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
(c) Going concern basis of preparation (cont.)
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 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, including
progression of its exploration interests.
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 Directors have determined that future equity raisings and / or the sale of the Copper Assets will be required
to provide funding for the Consolidated Entity’s activities and to meet its 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 significant 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 2019, the Consolidated Entity has adopted all Accounting Standards and Interpretations effective from
1 July 2019. 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.
(e) Change in accounting policies and disclosures
AASB 16 Leases
The Consolidated Entity adopted AASB 16 as of 1 July 2019.
The leases recognised by the Consolidated Entity under AASB 16 predominantly relate to mobile property, plant and
equipment and property. AASB 16 provides a new lessee accounting model, which requires a lessee to recognise
assets and liabilities for all leases with a term of more than 12 months unless the underlying asset is of low value.
The depreciation of the lease assets and interest on the lease liabilities are recognised in the Consolidated statement
of comprehensive income.
Before the adoption of AASB 16, the Consolidated Entity classified each of its leases (as lessee) at inception as
either a finance lease or operating lease. For operating leases, the leased item was not capitalised and the lease
payments were recognised in the consolidated income statement on a straight-line basis.
Transition to AASB 16
The Consolidated Entity adopted the new standard using the modified retrospective approach and therefore the
comparative information has not been restated and continues to be reported under AASB 117. Lease liabilities are
measured at the present value of future payments on the initial date of application, being 1 July 2019. The
Consolidated Entity applied the practical expedient allowing the application of a single discount rate to a portfolio of
leases with similar characteristics and applied the short-term leases exemptions to leases with lease terms that end
within 12 months of the date of initial application.
On transition to AASB 16, the Consolidated Entity recognised $775,771 of right-of use assets and lease liabilities.
When measuring lease liabilities, the Consolidated Entity discounts lease payments using its incremental borrowing
rate at 1 July 2019. The weighted average incremental borrowing rate applied was 5.2%.
Operating lease commitment at 30 June 2019 as disclosed in the Consolidated Entity’s
financial statements
Discounted using the incremental borrowing rate
Recognition exemption for short term leases
Total lease liabilities recognised at 1 July 2019
$'000
833
(43)
(14)
776
The impact on cash flows on the adoption of AASB 16 is the payment of principal for operating leases, previously
classified as operating activities, is now classified as financing activities in the statement of cash flow.
- 40 -
(e) Change in accounting policies and disclosures (cont.)
AASB 16 Leases (cont.)
Policy applied from 1 July 2019: Group as a lessee
Leases as a lessee Lease assets and lease liabilities are recognised at the lease commencement date, which is
when the assets are available for use. The assets are initially measured at cost, which comprises the initial amount
of the lease liability adjusted for any lease payments made at or before the commencement date, plus any make-
good obligations and initial direct costs incurred.
Lease assets are depreciated using the straight-line method over the shorter of their useful life and the lease term.
Periodic adjustments are made for any re-measurements of the lease liabilities and for impairment losses, assessed
in accordance with the Consolidated Entity’s impairment policies.
Lease liabilities are initially measured at the present value of future minimum lease payments, discounted using the
Consolidated Entity’s incremental borrowing rate if the rate implicit in the lease cannot be readily determined, and
are subsequently measured at amortised cost using the effective interest rate. Minimum lease payments are fixed
payments or index-based variable payments incorporating the Consolidated Entity’s expectations of extension
options and do not include non-lease components of a contract.
The lease liability is remeasured when there are changes in future lease payments arising from a change in rates,
index or lease terms from exercising an extension or termination option. A corresponding adjustment is made to the
carrying amount of the lease assets, with any excess recognised in the consolidated income statement.
Short-term leases and lease of low value assets
The Consolidated Entity has elected not to recognise assets and lease liabilities for short term leases (lease term of
12 months or less) and leases of low value assets. The Consolidated Entity recognises the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
AASB Interpretation 23 Uncertainty over Income Tax Treatment
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects
the application of AASB 112 Income Taxes. It does not apply to taxes or levies outside the scope of AASB 112, nor
does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.
The Interpretation specifically addresses the following:
Whether an entity considers uncertain tax treatments separately;
•
•
•
The assumptions an entity makes about the examination of tax treatments by taxation authorities;
How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax
rates; and
How an entity considers changes in facts and circumstances.
An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more
other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty needs to be
followed.
The Consolidated Entity applies significant judgement in identifying uncertainties over income tax treatments. The
Consolidated Entity assessed that the interpretation has not had an impact on the consolidated financial statements
of the Consolidated Entity.
- 41 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
(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 2020 reporting periods. These standards and interpretations have not been early adopted.
Application
date of
standard*
Application
date for
Consolidate
d Entity*
1 January 2020
1 July 2020
Reference
Title
Summary
Impact on Metals X
The Company is still
assessing whether
there will be any
material impact.
Policies,
Changes
The amendments align the definition of
‘material’ across AASB 101 Presentation of
Financial Statements and AASB 108
Accounting
in
Accounting Estimates and Errors, and
clarify certain aspects of the definition. The
new definition states that, ’Information is
material if omitting, misstating or obscuring
it could reasonably be expected to influence
decisions that the primary users of general
purpose financial statements make on the
basis of those financial statements, which
provide
information about a
specific reporting entity.’ The amendments
clarify that materiality will depend on the
nature or magnitude of information, or both.
An entity will need to assess whether the
in
information, either
combination with other
is
material in the context of the financial
statements.
individually or
information,
financial
AASB 2018-7
Definition
Material
of
AASB 2018-6
Amendments to
AASs –
Definition of a
Business
The amendments is
not expected to have
a significant impact
on the Company
1 January 2020
1 July 2020
The definition of a business helps entities to
distinguish business combinations
from
asset purchases. Business combinations
are accounted for using the acquisition
method, which, among other things, may
give rise to goodwill.
Accounting treatments for other types of
transactions may also be affected,
depending on whether
transaction
involves a business (e.g., A loss of control
transaction where a retained interest is
accounted for using the equity method).
the
With
the aim of helping companies
determine whether an acquired set of
activities and assets is a business, the
amendments to AASB 3:
• Clarify the minimum requirements for a
business to exist
• Remove the assessment of whether
market participants are capable of
replacing missing elements of a
business
•
Provide guidance
to help entities
assess whether an acquired process is
substantive
• Narrow the definitions of a business
and of outputs
•
Introduce an optional
fair value
concentration test to identify a business
AASB 2014-10
Amendments to
AASs – Sale or
Contribution of
Assets between
an Investor and
its Associate or
Joint Venture
The amendments to AASB 10 Consolidated
Financial Statements and AASB 128 clarify
that a full gain or loss is recognised when a
transfer to an associate or joint venture
involves a business as defined in AASB 3.
Any gain or loss resulting from the sale or
that does not
contribution of assets
is
constitute a business, however,
recognised only to the extent of unrelated
investors’ interests in the associate or joint
venture.
The Company is still
assessing whether
there will be any
material impact.
1 January 2022
1 July 2022
- 42 -
Application
date of
standard*
Application
date for
Consolidate
d Entity*
1 January 2022
1 July 2022
Reference
Title
Summary
Impact on Metals X
AASB 2020-1
Amendments to
AASs
–
Classification of
Liabilities
as
Current or Non-
current
The Company is still
assessing whether
there will be any
material impact.
A liability is classified as current if the entity
has no right at the end of the reporting
period to defer settlement for at least 12
months after the reporting period. The
AASB recently
to
AASB 101 to clarify the requirements for
classifying liabilities as current or non-
current. Specifically:
issued amendments
•
that
The amendments specify
the
conditions which exist at the end of the
reporting period are those which will be
used to determine if a right to defer
settlement of a liability exists.
• Management intention or expectation
does not affect classification of
liabilities.
•
In cases where an instrument with a
conversion option is classified as a
liability,
equity
instruments would constitute settlement
of
for the purpose of
classifying it as current or non- current.
transfer
liability
the
the
of
The Company is still
assessing whether
there will be any
material impact.
1 January 2020
1 July 2020
Conceptual
Framework
AASB 2019-1
AASB 2020-3
for
Conceptual
Framework
Financial
Reporting
Amendments to
Australian
Accounting
Standards
–
Reference to the
Conceptual
Framework
revised Conceptual Framework
The
includes some new concepts, provides
updated definitions and recognition 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
for references
AASB 2019-1 has also been issued, which
to other
sets out
the amendments
pronouncements
the
revised Conceptual Framework. The
changes to the Conceptual Framework may
affect
the application of accounting
standards in situations where no standard
applies to a particular transaction or event.
In addition, relief has been provided in
applying AASB
developing
3
accounting policies for regulatory account
that
balances using AASB 108, such
entities must continue
the
to apply
definitions of an asset and a liability (and
supporting concepts) in the Framework for
the Preparation and Presentation of
Financial Statements (July 2004), and not
the definitions in the revised Conceptual
Framework.
and
- 43 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(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
• Rights arising from other contractual arrangements
• The Consolidated Entity’s voting rights and potential voting rights
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) 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.
(j) Goods and services taxes (GST)
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.
- 44 -
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(k) Other accounting policies
Significant and other accounting policies that summarise the measurement basis used and are relevant in
understanding of the financial statements are provided throughout the notes to the financial statements.
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.
The COVID-19 pandemic was rapid and Metals X took immediate action to protect the integrity of the Company’s
business interests and the safety and well-being of its employees and stakeholders. Prompt implementation and
affirmative compliance with government and health bodies forced quick change to operating processes. Metals X
operates a number of isolated and remote mining areas, therefore travel restrictions, social distancing and isolation
practices had some impacts on the Consolidated Entity. This resulted in changes to rosters and transport to comply
with Government restrictions. However, the net impact on the Consolidated Entity’s output has been minimal and
estimated at less than 1%. Cost impacts as a result of changed practices are estimated to be minor at less than 1%.
Note
5. Revenue
Key estimate or judgement
•
•
Identification of the enforceable contract
Identification of performance obligations for arrangements subject to
CIF Incoterms
• Principal versus agent considerations – freight/shipping services
• Determining the timing of satisfaction of freight/shipping services
19. Property, plant and equipment
and depreciation
•
•
Life of mine method of amortisation and depreciation
Impairment of property, plant and equipment as disclosed in Note
39
20. Mine property and development
• Determination of mineral resources and ore reserves
and amortisation
•
•
Life of mine method of amortisation and depreciation as disclosed in
Note 19
Impairment of capitalised mine development expenditure as
disclosed in Note 39
21. Exploration expenditure
•
Impairment of capitalised exploration and evaluation expenditure
24. Provisions
39. Impairment
• Mine rehabilitation provision
•
Impairment of inventory, property, plant and equipment and
capitalised mine development expenditure
- 45 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Consolidated Entity’s principal financial instruments comprise receivables, payables, lease liabilities, cash and
short-term deposits, derivative financial instruments 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 forward commodity swaps. 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 the notes to the financial statements.
The accounting classification of each category of financial instruments as defined in the notes to the financial
statements, and their carrying amounts, are set out below:
(a)
Interest rate risk
The Consolidated Entity’s exposure to risks of changes in market interest rates relate primarily to the Consolidated
Entity’s interest bearing loans, trade receivables at fair value through the profit and loss, other receivables, derivatives
financial instruments and cash balances. The Consolidated Entity’s policy is to manage its interest cost using fixed
rate debt where possible. The Citi Finance Facility has a variable interest rate that is on commercial terms. Under
the Citi Finance Facility the Company selects a three month interest repayment period to minimise the interest rate
risk exposure. 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 interest bearing loans and cash balances.
At 30 June 2020, 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)
2020
$'000
2019
$'000
Other Comprehensive
Income
higher/(lower)
2020
$'000
2019
$'000
Judgements of reasonably possible movements:
+ 0.25% (25 basis points)
- 0.25% (25 basis points)
(23)
23
24
(24)
-
-
-
-
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 interest rates. The movements in profit are due to possible higher or lower interest payable or
receivable from variable rate interest bearing loans and cash balances. The sensitivity is higher in 2020 than 2019
due to the $35,000,000 Citi Finance Facility entered into during the period.
At the reporting date the Consolidated Entity’s exposure to interest rate risk for classes of financial assets and
financial liabilities is set out below.
- 46 -
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
2020 ($'000)
Financial Assets
Cash and cash equivalents
Trade receivables at fair value through
the profit and loss
Other receivables
Other financial assets
Derivative financial instruments
Financial Liabilities
Trade and other payables
Interest bearing liabilities
Net financial assets/(liabilities)
2019 ($'000)
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)
(b) Credit risk
Floating
interest rate
or at fair
value
9,674
1,812
4,077
-
1,532
17,095
-
(30,186)
(30,186)
Floating
interest rate
or at fair
value
Fixed
interest
Non-Interest
bearing
Total carrying
amount
74
-
-
9,978
-
10,052
-
(5,390)
(5,390)
4,347
-
266
-
-
4,613
(7,518)
-
(7,518)
14,095
1,812
4,342
9,978
1,532
31,759
(7,518)
(35,576)
(43,094)
(11,335)
Fixed
interest
Non-Interest
bearing
Total carrying
amount
729
8,212
4,824
-
13,765
174
10,461
-
-
10,772
10,946
-
3,509
-
13,970
-
-
-
-
(9,354)
(9,354)
(25,442)
-
(25,442)
11,364
8,212
8,333
10,772
38,681
(25,442)
(9,354)
(34,796)
3,885
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 and other financial assets 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 2020, the Consolidated Entity had two customers (2019: three customers) that each owed the
Consolidated Entity $1,201,000 and $611,000 respectively and accounted for approximately 29% (2019: 56%) of all
receivables owing.
At 30 June 2020, there are no material trade receivables at amortised cost that are past due.
- 47 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(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 2020, 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:
Judgements of reasonably possible movements:
Price + 20%
Price - 20% *
Post tax profit
higher/(lower)
2020
$'000
9
(9)
Other Comprehensive
Income
higher/(lower)
2019
$'000
2020
$'000
2019
$'000
46
(46)
-
-
1,289
-
* 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 2020 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.
(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
2020
$'000
4,347
1,812
6,159
2019
$'000
10,461
8,211
18,672
At 30 June 2020, 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)
2020
$'000
2019
$'000
Other Comprehensive
Income
higher/(lower)
2020
$'000
2019
$'000
Judgements of reasonably possible movements:
A$/US$ Price +10%
A$/US$ Price -10%
616
(616)
1,867
(1,867)
-
-
-
-
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
2020 is lower than 2019 due to a decrease in the value exposed to fluctuations in US dollar foreign currency.
- 48 -
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(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 **
2020
$'000
-
1,532
1,532
2019
$'000
28,864
-
28,864
* This relates to the provisional amount of copper tonnes remaining open to price adjustments (gross sales) at
the end of the period. Refer to note 12 for the open quantity.
** This relates to forward commodity swaps for 2,010 tonnes of tin at an average price of $24,911 per tonne of
tin. The fair value is based on the applicable LME forward prices. (refer to note 16).
At 30 June 2020, if forward commodity swaps prices had moved by a reasonably possible 3.1%, as illustrated in the
table below, with all other variables held constant, post tax A sensitivity of +3.1% or -3.1% 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 2020 is higher than 2019 as the Company only entered into
the commodity swaps in 2020 in conjunction with the Citi Finance Facility.
Judgements of reasonably possible movements:
Forward tin price +3.1%
Forward tin price -3.1%
(f) Liquidity risk
Post tax profit
higher/(lower)
2020
$'000
2019
$'000
Other Comprehensive
Income
higher/(lower)
2020
$'000
2019
$'000
1,532
(1,532)
-
-
-
-
-
-
Liquidity risk arises from the financial liabilities of the Consolidated Entity and the subsequent ability to meet the
obligations to repay the financial liabilities as and when they fall due.
The Consolidated Entity’s objective is to maintain a balance between continuity of funding and flexibility through the
use of finance and hire purchase leases.
The tables below reflect all contractually fixed payables for settlement, repayment and interest resulting from
recognised financial liabilities as of 30 June 2020. Cash flows for financial liabilities without fixed amount or timing
are based on the conditions existing as 30 June.
- 49 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
The remaining contractual maturities of the Consolidated Entity’s financial instruments are:
(f) Liquidity risk (cont.)
2020 ($'000)
Financial assets
Cash and equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Lease Liabilities
Hire purchase liabilities
Interest bearing loans
Net inflow/(outflow)
2019 ($'000)
Financial assets
Cash and equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Hire purchase liabilities
Net inflow/(outflow)
(g) Fair values
<6 months
6-12 months
1-5 years
>5 years
Total
14,243
4,342
10,082
28,667
(7,518)
(1,844)
(135)
(31,510)
(41,007)
(12,340)
-
-
-
-
-
(1,007)
(64)
-
(1,071)
(1,071)
-
-
-
-
-
(2,433)
(143)
-
(2,576)
(2,576)
-
-
-
-
-
-
-
-
-
-
14,243
4,342
10,082
28,667
(7,518)
(5,284)
(342)
(31,510)
(44,654)
(15,987)
<6 months
6-12 months
1-5 years
>5 years
Total
11,581
8,334
10,976
30,891
(25,442)
(2,651)
(28,093)
2,798
-
-
-
-
-
-
-
-
-
(2,650)
(2,650)
(2,650)
-
(4,531)
(4,531)
(4,531)
-
-
-
-
-
-
-
-
11,581
8,334
10,976
30,891
(25,442)
(9,833)
(35,275)
(4,384)
For all financial assets and liabilities recognised in the statement of financial position, carrying amount approximates
fair value unless otherwise stated in the applicable notes.
The methods for estimating fair value are outlined in the relevant notes to the financial statements.
The Consolidated Entity uses various methods in estimating the fair value of a financial instrument. The methods
comprise:
Level 1 -
Level 2 -
Level 3 -
the fair value is calculated using quoted prices in active markets.
the fair value is estimated using inputs other than quoted prices included in level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from price).
the fair value is estimated using inputs for the asset or liability that are not based on observable market
data.
- 50 -
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(g) Fair values (cont.)
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in
the table below.
2020 ($'000)
Quoted
market price
(Level 1)
Valuation
technique market
observable inputs
(Level 2)
Valuation
technique non
market observable
inputs (Level 3)
Total
-
50
-
50
1,812
-
1,532
3,344
2019 ($'000)
-
-
-
-
1,812
50
1,532
3,394
Quoted
market price
(Level 1)
Valuation
technique market
observable inputs
(Level 2)
Valuation
technique non
market observable
inputs (Level 3)
Total
-
-
243
-
-
243
2
8,212
-
38
7
8,259
-
-
-
-
-
-
2
8,212
243
38
7
8,502
Financial Assets
Trade receivables
Tin sales 1
Equity investments
Listed investments 2
Derivatives
Forward commodity swaps 3
Financial Assets
Trade receivables
Tin sales 1
Copper sales 1
Equity investments
Listed investments 2
Derivatives
Listed investments 2
Unlisted investments 4
1. The fair value of trade receivables relates to tin and copper concentrate provisionally sold at the reporting date.
The Consolidated Entity’s sales of metal in concentrate allow for price adjustments based on the market price
at the end of the 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 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.
3.
4.
The forward commodity swaps relate to derivatives of 2,010 tonnes of tin at an average price of $24,911 per
tonne of tin. The fair value is based on the applicable LME forward prices as at the reporting date.
The unlisted investment related to 1,500,000 unlisted options in Brainchip Holdings Limited which expired
unexercised on 31 May 2020. In 2019 the fair value was determined using a Black & Scholes model, which took
into account factors including the option exercise price, the volatility of the underlying share price, the risk free
rate, the market price of the underlying share at grant date and the expected life of the option. Below are the
inputs used to value the unlisted options:
- 51 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(g) Fair values (cont.)
Details
Expected Volatility (%)
Risk-free interest rate (%)
Expected life of options (yrs)
Options exercise price ($)
Share price at grant date ($)
2019
93%
1.04%
0.92
$0.23
$0.072
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
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.
1 July 2019 *
$'000
Cash
flows
New
leases
Disposals
New
loans
Other
30 June 2020
$'000
5,495 (10,184)
4,266
(4,390) 35,000
2,921
33,108
4,634
-
755
-
-
(2,921)
2,468
10,129 (10,184)
5,021
(4,390) 35,000
-
35,576
1 July 2018
$'000
Cash
flows
New
leases
Disposals
New
loans
Other
30 June 2019
$'000
4,848
(5,352)
504
5,523
-
3,830
10,371
(5,352)
4,334
-
-
-
-
5,042
5,042
-
(5,042)
4,311
-
-
9,353
Current interest bearing
loans and borrowings
Non-current interest
bearing loans and
borrowings
Total liabilities from
financing activities
Current interest bearing
loans and borrowings
Non-current interest
bearing loans and
borrowings
Total liabilities from
financing activities
* This includes leases transitioned under AASB 16 of $776,000.
- 52 -
5. REVENUE
Tin concentrate sales
Copper concentrate sales (a)
Total revenue from contracts with customers
2020
$'000
73,243
70,206
143,449
2019
$'000
85,276
119,446
204,722
(a) Revenue for shipping services is not material and has been included in copper concentrate sales
Recognition and measurement
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.
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 Quotational Period (QP), and a corresponding trade receivable
is recognised.
The Consolidated Entity’s sales of metal in concentrate allow for price adjustments based on the market price at the
end of the relevant 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.
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 Financial Instruments (“AASB
9”) and not within the scope of AASB 15 Revenue from Contracts with Customers (“AASB 15”).
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. This is generally
not material at the balance sheet date. 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.
- 53 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
5. REVENUE (CONT.)
Key estimates and judgements
Revenue from contracts with customers
•
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.
•
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.
- 54 -
6. OTHER INCOME
Interest revenue
Other income
Total other income
Recognition and measurement
2020
$'000
441
230
671
2019
$'000
807
128
935
Interest revenue
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
7.
EXPENSES
(a) 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
Net (gain)/loss on sale of assets
Administration costs
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
Commodity gain
Total fair value change in derivative financial instruments
(d) Finance costs
Interest
Borrowing costs
Unwinding of rehabilitation provision discount
Total finance costs
2020
$'000
28,670
2,724
109,653
41
4,769
5,855
817
13,641
166,170
2,618
560
299
34
3,511
2,020
237
-
-
(319)
942
2,880
268
6,659
375
844
1,219
1,663
102
227
1,992
2019
$'000
45,559
4,328
137,995
7,734
7,638
9,681
650
24,562
238,147
3,276
350
379
61
4,066
1,402
178
95
(114)
15
912
2,488
193
6,747
908
3,479
4,387
629
-
843
1,472
- 55 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
7. EXPENSES (CONT.)
(e) Fair value change in financial assets
Fair value change in derivative financial instruments
Fair value change in financial assets through profit and loss
Total fair value change in financial assets
Fair value movements in provisionally priced trade receivables
Fair value loss on provisionally priced trade receivables
Total fair value movements in provisionally priced trade receivables
2020
$'000
-
(83)
(83)
(2,066)
(2,066)
2019
$'000
(38)
(4,384)
(4,422)
(4,761)
(4,761)
Recognition and measurement
Salaries, wages expense and other employee benefits
Salaries, wages and other employee benefits are recognised as and when employees render their services.
Expenses for non-accumulating personal leave are recognised when the leave is taken and measured at the rates
paid or payable. Refer to note 23 for the accounting policy relating to short term and long-term employee benefits.
Finance costs
Provisions and other payables are discounted to their present value when the effect of time value of money is
significant. The impact of the unwinding of these discounts is reported in finance costs.
For policies of leases refer to note 27, depreciation notes 19 and 20 and share based payments note 31.
8.
INCOME TAX
(a) Major components of income tax expense:
Income Statement
Current income tax expense
Current income tax benefit
Adjustments in respect of current income tax of previous years
Deferred income tax
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
2020
$'000
2019
$'000
(25,432)
1,723
629
23,054
26
-
(20,290)
(8,275)
(15,242)
42,246
1,561
-
(b) 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
At statutory income tax rate of 30% (2019: 30%)
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
(80,340)
(24,102)
(116,969)
(35,091)
41
3
(745)
1,749
23,054
208
7
(657)
(6,713)
42,246
Income tax expense/(benefit) reported in income the statement of
comprehensive income
-
-
- 56 -
8.
INCOME TAX (CONT.)
(c) 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
Recognised tax losses
Unrecognised timing differences
Gross deferred tax assets
Net deferred tax liabilities
Deferred tax income/(expense)
Statement of
financial position
Statement of comprehensive
income
2020
$'000
(4,040)
(9,052)
(2,729)
(8,451)
-
(16)
(24,288)
14,731
361
-
(460)
5,408
149
47
1,330
5
15,194
-
(12,477)
24,288
-
2019
$'000
(2,884)
(9,307)
(3,334)
(9,120)
(2)
(55)
(24,702)
15,858
1,347
26
-
5,514
17
47
2,741
(1)
12,285
-
(13,132)
24,702
-
2020
$'000
1,156
(255)
(605)
(669)
(2)
(39)
1,127
986
26
460
106
(132)
-
1,411
(6)
(2,909)
-
2019
$'000
(306)
(10,774)
(533)
285
2
15
404
217
(11)
323
(2,704)
1
6
(180)
(31)
(395)
-
655
(13,681)
At 30 June 2020, there are unrecognised losses of $254,543,000 (2019: $229,302,000) for the Consolidated Entity, of which $156,354,000 (2019: $156,354,000) are subject to a restricted
rate of utilisation.
- 57 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
8.
INCOME TAX (CONT.)
Recognition and measurement
Current income tax
Current income 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.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of
profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
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 items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
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. 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.
Members of the group have also entered into tax sharing agreements. 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.
- 58 -
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
Weighted average number of ordinary shares for basic earnings per
share
Effect of Dilution:
Share Options
Weighted average number of ordinary shares adjusted for the effect
of dilution
Recognition and measurement
2020
$'000
(80,340)
(80,340)
(9.45)
(80,340)
(80,340)
(9.45)
2019
$'000
(116,969)
(116,969)
(17.17)
(116,969)
(116,969)
(17.17)
849,818
681,263
-
-
849,818
681,263
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:
•
cost of servicing equity (other than dividends) and preference share dividends;
•
•
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised; and
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.
The Company had 11,984,332 (2019: 29,173,202) share and performance options on issue that are excluded from
the calculation of diluted earnings per share for the current financial period because they are considered
contingently issuable shares or anti-dilutive.
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.
10. DIVIDENDS PAID AND PROPOSED
Dividends declared and paid during the financial year
Dividends declared for 2020: nil (2019: nil)
Total dividends
Dividends proposed but not recognised as a liability
Final dividend for 2020: nil (2019: 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%
(2019: 30%)
The amount of franking credits available for future reporting years
2020
$'000
2019
$'000
-
-
-
2
2
-
-
-
2
2
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.
- 59 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
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
2020
$'000
9,674
4,347
74
14,095
2019
$'000
729
10,461
174
11,364
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 lifetime expected credit losses. In this regard, the Group has concluded that the probability
of default is insignificant.
Recognition and measurement
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 comprise the following at 30 June:
Cash at bank and in hand
Short-term deposits
14,021
74
14,095
11,190
174
11,364
CASH FLOW RECONCILIATION
Reconciliation of net profit after income tax to net cash flows from operating activities
Loss after income tax
Amortisation and depreciation
Fair value change in derivative financial instruments
Fair value change in financial assets through profit and loss
Borrowing costs
Impairment loss on assets
Share based payments
Rehabilitation expense
Exploration and evaluation expenditure written off
(Gain)/loss on disposal of property, plant and equipment
(80,340)
23,508
-
83
102
15,363
137
8,587
105
(319)
(32,774)
(116,969)
35,086
38
4,384
-
64,200
694
843
6,570
16
(5,138)
Changes in assets and liabilities
Decrease in inventories
Decrease/(increase) in trade and other receivables and prepayments
(Decrease) in trade and other creditors
(Decrease)/increase provisions
Net cash flows from operating activities
12. TRADE AND OTHER RECEIVABLES (CURRENT)
Trade receivables at fair value
Other debtors and cash call advances at amortised cost (a)
Allowance for expected credit loss
23,868
132
10,431
(17,887)
(4,681)
(21,043)
1,811
4,342
-
6,153
(3,903)
(6,950)
698
(15,161)
8,211
8,334
-
16,545
As at 30 June 2020 tin concentrate sales of 303 tonnes (2019: 196) remained open to price adjustments. Total
copper concentrate sales for the period was 9,095 tonnes (2019: 15,776), there were no concentrate sales
outstanding at the reporting date. In 2019, 3,721 tonnes of copper, provisionally sold at the reporting date, had
been revalued at a weighted average price of (US$5,868). The fair value loss on provisionally priced trade
receivables of $2,067,000 for the period (2019: $4,761,000) has been included as an expense in the statement
of comprehensive income.
(a) These primarily relate to cash calls advanced to the Bluestone Mines Tasmania Joint Venture Pty Ltd.
- 60 -
12. TRADE AND OTHER RECEIVABLES (CURRENT) (CONT.)
Recognition and measurement
The classification of receivables depends on the financial asset’s contractual cash flow characteristics and the
Consolidated Entity’s business model for managing them.
In order for a receivable 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.
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
Trade receivables at fair value
Trade receivables which are 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 fair value, being 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 for details of fair value disclosures.
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.
Trade and other receivables at amortised cost
Financial assets at amortised cost are those which satisfy the SPPI test and therefore exclude trade receivables
which are subject to provisional pricing. Trade receivables are measured at the transaction price determined under
revenue policy (see note 5). Other receivables are initially measured at fair value.
Trade and other receivables at amortised costs 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.
Trade receivables are non-interest bearing and are generally on 30 to 90-day terms.
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 applies the simplified approach in calculating ECLs, as permitted by AASB 9. Therefore, 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 trade receivables
that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and
the economic environment.
Credit quality of a customer is assessed based on individual credit limits. Outstanding customer receivables are
regularly monitored. At 30 June 2020, there are no receivables past due.
- 61 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
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 and impairment stores and spares
Total inventories at lower of cost and net realisable value
Recognition and measurement
2020
$000
798
52
9,332
-
28,171
(18,025)
20,328
2019
$000
4,518
67
7,286
21,969
30,400
(18,380)
45,860
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.
14. PREPAYMENTS (CURRENT)
Prepayments
885
2,454
15. OTHER FINANCIAL ASSETS (NON-CURRENT)
Cash on deposit - performance bond facility
Total other financial assets
9,978
9,978
10,772
10,772
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) for credit risk assessment.
16. DERIVATIVE FINANCIAL INSTRUMENTS (CURRENT)
Forward commodity swaps
1,532
1,532
-
-
The forward commodity swaps relate to derivatives of 2,010 tonnes of tin at an average price of $24,911 per
tonne of tin. The fair value is based on the applicable LME forward prices.
17. DERIVATIVE FINANCIAL INSTRUMENTS (NON-CURRENT)
Derivatives held for trading
-
45
The Consolidated Entity held 1,500,000 unlisted options in Brainchip Holdings Limited (Brainchip), which
expired unexercised on 31 May 2020. The options were acquired for nil cost as part of a capital raising. In
2019 the fair value was $7,000, which were 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 nil, the Company recognised a fair value movement
of $7,000 (2019: $38,000).
Recognition and measurement
Derivatives are designated as fair value through profit or loss on initial recognition with all changes in fair value
subsequently being recorded in profit or loss within the Statement of Comprehensive income.
- 62 -
18. FINANCIAL ASSETS (NON-CURRENT)
Shares - Australian listed
2020
$'000
50
2019
$'000
243
The Company has a 1.05% (2019: 9.21%) 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 $50,000 (2019: $243,000)
which is based on Nelson’s quoted share price. During the period, the Company recognised a fair value
movement of $37,000 (2019: $382,000).
Recognition and measurement
Listed equity investments are designated as fair value through profit or loss on initial recognition with all
changes in fair value subsequently being recorded in profit or loss within the Statement of Comprehensive
income. 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.
The fair value of listed equity investments has been determined directly by reference to published price
quotations in an active market.
19. PROPERTY, PLANT & EQUIPMENT (NON-CURRENT)
Plant and equipment
Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount
Land and buildings
Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount
Capital work in progress at cost
Gross carrying amount - at cost
Impairment
Net carrying amount
Total property, plant and equipment
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
Impairment (refer to note 39)
Transfer to mine properties & development
Transfer to plant and equipment
Transfer to land and buildings
At 30 June
Refer to note 27 for leases disclosure.
77,185
(45,664)
31,521
86,263
(48,586)
37,677
11,035
(5,192)
5,843
5,951
-
5,951
43,315
37,677
9,729
(3,378)
(3,454)
(9,052)
31,521
5,529
1,377
(25)
(220)
(817)
5,843
3,260
15,214
-
(1,416)
(9,729)
(1,377)
5,951
9,703
(4,174)
5,529
3,260
-
3,260
46,466
32,707
20,325
(31)
(5,450)
(9,874)
37,677
4,820
1,751
-
(392)
(650)
5,529
11,059
15,180
-
(903)
(20,325)
(1,751)
3,260
- 63 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
19. PROPERTY, PLANT & EQUIPMENT (NON-CURRENT) (CONT.)
Recognition and measurement
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 or
mine properties and development 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.
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
Impairment
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 discussion on impairment testing performed by the Consolidated Entity.
Key estimates and judgements
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.
- 64 -
20. MINE PROPERTY AND DEVELOPMENT (NON-CURRENT)
Development areas at cost
Gross carrying amount - at cost
Impairment
Net carrying amount
Mine site establishment
Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount
Mine capital development
Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount
Total mine properties and development
Movement in mine properties and development
Development areas at cost
At 1 July
Additions
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 19)
(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)
Adjustment to rehabilitation liability (refer to note 24)
Amortisation charge for the year
At 30 June net of accumulated amortisation
Recognition and measurement
2020
$'000
72,715
(72,490)
225
43,390
(34,426)
8,964
2019
$'000
72,599
(72,490)
109
41,461
(30,352)
11,109
207,190
(176,746)
30,444
188,483
(157,154)
31,329
39,633
42,547
109
116
225
11,109
143
(1,395)
1,416
370
(2,679)
8,964
31,329
17,971
(8,631)
736
(10,961)
30,444
15
94
109
12,992
664
-
903
81
(3,531)
11,109
67,281
33,758
(49,070)
391
(21,031)
31,329
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 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.
- 65 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
20. MINE PROPERTY AND DEVELOPMENT (NON-CURRENT) (CONT.)
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.
Refer to note 39 for discussion on impairment testing performed by the Company.
Key estimates and judgements
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.
21. EXPLORATION EXPENDITURE (NON-CURRENT)
Exploration and evaluation costs carried forward in respect of mining
areas of interest
Pre-production areas
At Cost
Net carrying amount
Movement in deferred exploration and evaluation expenditure
At 1 July net of accumulated impairment
Additions
Expenditure written off
At 30 June net of accumulated impairment
Recognition and measurement
2020
$'000
2019
$'000
13,993
13,993
10,179
10,179
10,179
3,919
(105)
13,993
11,243
5,506
(6,570)
10,179
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.
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.
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.
Key estimates and judgements
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.
- 66 -
21.
EXPLORATION EXPENDITURE (NON-CURRENT) (CONT.)
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.
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
$105,000 (2019: $6,570,000) 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.
22. TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors
Sundry creditors and accruals
Recognition and measurement
2020
$'000
3,779
3,739
7,518
2019
$'000
13,463
11,979
25,442
Trade and other payables are initially recognised, at fair value and subsequently measured at amortised cost using
the effective interest rate (EIR) method.
Trade creditors are non-interest bearing and generally on 30-day terms. 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.
23. PROVISIONS (CURRENT)
Provision for annual leave
Provision for sick leave
Provision for long service leave
Recognition and measurement
Employee benefits
2,679
2
999
3,680
6,155
37
1,626
7,818
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.
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.
Superannuation
Contributions made by the Consolidated Entity to employee superannuation funds, which are defined contribution
plans, are charged as an expense when incurred.
- 67 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
24. PROVISIONS (NON-CURRENT)
Provision for long service leave
Provision for rehabilitation
Recognition and measurement
Employee benefits
2020
$'000
752
50,645
51,397
2019
$'000
1,317
40,952
42,269
Provision for long service leave
The nature of the provisions are described in note 23.
Provision for rehabilitation
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 relates to the
development of an asset, 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.
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.
Current and non-current movements in provisions
At 1 July
Arising during the year
Unwind of discount
At 30 June
2020
$’000
40,952
9,467
226
50,645
2019
$,000
39,637
472
843
40,952
During the period a review of the environmental obligations associated with the Mt Bischoff Project was conducted,
which resulted in the increase in the provision for rehabilitation of $8,360,000 (2019: Nil). Due to the suspension of
operations at the Nifty Copper Operation a review of the expected timing of the environmental obligations was
conducted which resulted in the increase in the provision for rehabilitation of $736,000 (2019: $391,000).
Key estimates and judgements
Mine rehabilitation provision
The Consolidated Entity assesses its mine rehabilitation provision on an annual basis. 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.
- 68 -
25.
INTEREST BEARING LOANS AND BORROWINGS (CURRENT)
Lease liabilities related to right of use assets (refer to note 27)
Hire purchase liabilities
Citi finance facility
Refer to Note 26 for policy.
Citi finance facility
2020
$'000
191
2,731
30,186
33,108
2019
$'000
-
5,043
-
5,043
During the period the Consolidated Entity entered into a finance facility with Citi for a $35,000,000 secured
term loan facility through the Company’s 100%-owned subsidiary Bluestone Mines Tasmania Pty Ltd. The
finance facility limit at reporting date is $33,000,000 (2019: nil). The finance facility payable and utilised at
reporting date is $30,462,000 (2019: nil).
The facility term is 4 years. Repayments are quarterly in arrears commencing 31 December 2019 with
accelerated prepayment from cash sweep commencing 30 June 2020. Early repayment is allowed, without
penalty, at any time. Interest and charges are an establishment fee of 1.0%, interest rate is BBSY plus 3.5%
for an approximate total rate of 4.5%. Security is all material assets of the Company and certain subsidiaries
excluding the Renison Tin Operations joint venture participating interest and tenements. The key terms are
mandatory tin derivatives, minimum liquidity and standard debt service ratios.
Under the Citi Facility the Company was required to remain within certain financial covenants which were
measured for compliance at the end of each calendar quarter. For the quarter ending 30 June 2020 the
Company did not meet the Forecast Cash Flow Cover Ratio (Forecast CFCR) nor the Forward Debt Service
Cover Ratio (Forecast DSCR). The principal reason for the Forecast CFCR and the Forward DSCR were not
met was the decision to proceed with the Area 5 development with its capital expenditure for the Consolidated
Entity's 50% share being $25 – $27.5 million over the next two years.
On 10 July 2020, the Company notified Citi of its non-compliance with respect to the two financial covenants.
On 21 July 2020 the Company submitted to Citi a proposed strategy to cure the financial covenant breaches.
The strategy was to pay out the Citi finance facility in full, plus accrued interest and the close-out of existing
derivative contracts.
On 31 July 2020, the Company settled and closed out the Citi finance facility and the associated derivative
contracts.
26.
INTEREST BEARING LOANS AND BORROWINGS (NON-CURRENT)
Lease liabilities related to right of use assets (refer to note 27)
Hire purchase liabilities
Citi finance facility
137
2,331
-
2,468
-
4,310
-
4,310
The weighted average interest rate is 4.69% (2019: 5.12%) per annum.
Recognition and measurement
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using
the EIR method. Gains and losses are recognised in profit or loss 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.
- 69 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
27. LEASES
Consolidated Entity as lessee
The Consolidated Entity has entered into lease contracts for various items of plant, machinery, vehicles,
equipment and remote area residential accommodation. These leases have an average life of between one
month and three years with renewal options included in the contracts. The Consolidated entity applies
judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers
all relevant factors that create an economic incentive for it to exercise the renewal. The Consolidated Entity's
obligations under its leases are secured by the lessor's title to the leased assets. Generally, the Consolidated
Entity is restricted from assigning and subleasing the lease assets.
The Consolidated Entity also has certain leases of machinery with lease terms of 12 months or less and
leases of office equipment with low value. The Consolidated Entity applies the short-term lease and lease of
low-value assets recognition exemptions for these leases. Set out below are the carrying amounts of right-
of-use assets recognised and the movements during the period:
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the
period:
Right of use assets
At 30 June
Transfers from PPE to Right of use assets on 1 July 2019
Transition adjustment on 1 July 2019
Additions
Depreciation
Impairment (refer to note 39 for impairment assessment)
Disposals
At 30 June
2020
$'000
-
-
776
2,176
(442)
(61)
(1,751)
698
2019
$'000
-
-
-
-
-
-
-
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and
borrowings) and the movements during the period:
Lease liabilities related to right of use assets
At 30 June
Transition adjustment on 1 July 2019
Additions
Accretion of interest
Payments
Disposals
At 30 June
Current (refer to note 25)
Non-current (refer to note 26)
The maturity analysis of lease liabilities are disclosed in note 4(f).
The following amounts are recognised in profit or loss:
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases (included in cost of sales)
Expense relating to leases of low-value assets (included in
administrative expenses)
Total amount recognised in profit or loss
-
776
2,173
94
(593)
(2,122)
328
191
137
328
442
94
10
-
2,684
-
-
-
-
-
-
-
5,043
4,310
9,353
-
494
-
-
494
The Consolidated Entity had total cash outflows for lease liabilities related to right of use assets and hire
purchase liabilities of $5,770,000 in 2020 (2019: $5,846,000).
- 70 -
27. LEASES (CONT.)
Recognition and measurement
Policy applied from 1 July 2019
The Consolidated Entity assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Consolidated Entity as a lessee
The Consolidated Entity applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Consolidated Entity recognises lease liabilities to make lease payments
and right-of-use assets representing the right to use the underlying assets.
i) Right-of-use assets
The Consolidated Entity recognises right-of-use assets at the lease commencement date, which is when the assets
are available for use. The assets are initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any make-good obligations and
initial direct costs incurred.
Right-of-use assets are depreciated using the straight-line method over the shorter of their useful life and the lease
term. Periodic adjustments are made for any re-measurements of the lease liabilities and for impairment losses,
assessed in accordance with the Consolidated Entity’s impairment policies.
If ownership of the leased asset transfers to the Consolidated Entity at the end of the lease term or the cost reflects
the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
ii) Lease liabilities
At the commencement date of the lease, the Consolidated Entity recognises lease liabilities measured at the present
value of future minimum lease payments, discounted using the Consolidated Entity’s incremental borrowing rate if
the rate implicit in the lease cannot be readily determined, and are subsequently measured at amortised cost using
the effective interest rate. Minimum lease payments are fixed payments or index-based variable payments
incorporating the Consolidated Entity’s expectations of extension options and do not include non-lease components
of a contract.
The lease liability is re-measured when there are changes in future lease payments arising from a change in rates,
index or lease terms from exercising an extension or termination option. A corresponding adjustment is made to the
carrying amount of the lease assets, with any excess recognised in the consolidated income statement.
iii) Short-term leases and leases of low-value assets
The Consolidated Entity has elected not to recognise assets and lease liabilities for short term leases (lease term of
12 months or less) and leases of low value assets. The Consolidated Entity recognises the lease payments
associated with these lease as an expense on a straight-line basis over the lease term.
Policy pre 1 July 2019
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.
- 71 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
28.
ISSUED CAPITAL
(a) Ordinary Shares
Issued and fully paid
(b) Movements in ordinary shares on issue
At 1 July 2018
Issue share capital
Share issue costs
At 30 June 2019
Issue share capital
Share issue costs
At 30 June 2020
Recognition and measurement
2020
$'000
332,406
2019
$'000
302,005
Number
$
612,137,432
76,923,076
-
689,060,508
218,205,559
-
907,266,067
254,587
50,000
(2,582)
302,005
32,731
(2,330)
332,406
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.
Dividend Reinvestment Plan
The Company operates a dividend reinvestment plan (DRP) which allows eligible shareholders to elect to invest
dividends in ordinary shares.
2019
There were no shares issued under the DRP in the 2019 financial year.
2020
There were no shares issued under the DRP in the 2020 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*
Total
Expiry Date
30 Nov 2020
30 Jun 2023
30 Jun 2024
Exercise Price
$1.32
$0.00
$0.00
Number of options
5,250,000
632,277
6,102,055
11,984,332
*
These options were issued pursuant to the Metals X Limited Employee Option Scheme and can only be exercised
pursuant to the scheme rules.
- 72 -
28.
ISSUED CAPITAL (CONT.)
(f) Capital management - gearing ratio
Gearing ratio
Net debt
capital
2020
$000
68.69%
35,576
51,791
2019
$000
3.91%
9,353
101,593
Capital includes issued capital and all other equity reserves attributable to the equity holders of the parent for
the purpose of the Consolidated Entity’s capital management. The primary objective of the Consolidated
Entity’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in
order to support its business and maximise the shareholder’s value. The Consolidated Entity manages its
capital structure and makes adjustments in light of changes in economic conditions and the requirements of
the financial covenants. To maintain or adjust the capital structure, the Consolidated Entity’s may return capital
to shareholders or issue new shares. No changes were made in the objectives, policies or processes during
the years ended 30 June 2020 and 30 June 2019. The Consolidated Entity monitors capital using a gearing
ratio, which is net debt divided by the aggregate of equity and net debt. The Consolidated Entity includes in its
net debt, interest-bearing loans and borrowings, trade and other payables, less cash and short-term deposits.
Net debt in the current year is higher due to the Citi Finance Facility.
29. ACCUMULATED LOSSES
At 1 July
Net loss in current period attributable to members of the parent
entity
Dividends paid
At 30 June
30. RESERVES
At 1 June 2018
Share based payments
At 30 June 2019
Share based payments
At 30 June 2020
Nature and purpose of reserves
2020
$'000
(228,456)
(80,340)
-
(308,796)
2019
$'000
(111,487)
(116,969)
-
(228,456)
Share based
payments
reserve
$'000
27,350
694
28,044
137
28,181
Total
$'000
27,350
694
28,044
137
28,181
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.
31. SHARE-BASED PAYMENTS
2020
$000
2019
$000
(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
137
694
The share-based payment plan is described below. There have been no cancellations or modifications to
the plan during 2020 and 2019.
Recognition and measurement
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.
- 73 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
31. SHARE BASED PAYMENTS (CONT.)
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.
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.
(b)
Long Term Incentive Plan
Under the 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 FY2020 were delivered in the form of performance options,
which will vest over a period of 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.
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.
2020
Number
2020
WAEP
2019
Number
2019
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
12,800,000
-
-
(7,550,000)
5,250,000
5,250,000
0.96
-
-
0.71
1.32
1.32
13,350,000
3,000,000
-
(3,550,000)
12,800,000
9,800,000
1.07
0.56
-
1.04
0.96
1.08
- 74 -
31. SHARE BASED PAYMENTS (CONT.)
The outstanding balance as at 30 June 2020 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
On issue
Vested
24 Nov16
20 Jan 17
22 Nov 17
20 Jan 18
20 Jan 18
30 Nov 18
20 Jan 20
20 Jan 20
30 Nov 20
$0.76
$0.76
$1.32
2,000,000
5,250,000
3,200,000
(2,000,000)
(4,550,000)
-
-
(700,000)
-
-
-
-
- 3,200,000 3,200,000
23 Nov 17
25 Jan 19
25 Jan 19
25 Jan 19
Total
30 Nov 18
22 Jan 20
22 Jan 21
22 Jan 22
30 Nov 20
22 Jan 22
22 Jan 23
22 Jan 24
$1.32
$0.54
$0.56
$0.58
4,900,000
1,000,000
1,000,000
1,000,000
18,350,000
(2,850,000)
(1,000,000)
(1,000,000)
(1,000,000)
(12,400,000)
-
-
-
-
2,050,000 2,050,000
-
-
-
-
-
-
(700,000) 5,250,000 5,250,000
Weighted average remaining contractual life of share options
The weighted average remaining contractual life for the share options outstanding as at 30 June 2020 is $1.32
(2019: $1.53).
Range of exercise price of share options
The range of exercise prices for options outstanding at the end of the year $1.32 (2019: $0.54 - $1.32).
Weighted average fair value of share options
The weighted average fair value of options granted during the year was nil (2019: $0.14).
Share option valuation
The fair value of the equity-settled share options granted under the LTIP is estimated at the date of grant using a
Black & Scholes model, which takes into account factors including the options exercise price, the volatility of the
underlying share price, the risk-free interest rate, the market price of the underlying share at grant date, historical and
expected dividends and the expected life of the option.
The following table gives the assumptions made in determining the fair value of the options granted:
Grant date
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (yrs)
Options exercise price ($)
Share price at grant date ($)
Fair value at grant date ($)
2019
25 Jan 2019
52%
1.81%
3.0
$0.54
$0.43
$0.124
25 Jan 2019
52%
1.86%
4.0
$0.56
$0.43
$0.145
25 Jan 2019
52%
1.96%
5.0
$0.58
$0.43
$0.163
The effects of early exercise have not 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 historical term consistent with the option 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 for the options issued in 2019 and three years for the options issued in 2020, 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.
- 75 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
31. SHARE BASED PAYMENTS (CONT.)
The outstanding balance as at 30 June 2020 is represented by the following table:
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.
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
Exercise price of performance options
2020
Number
2020
WAEP
2019
Number
2019
WAEP
2,516,162
15,926,418
-
(11,708,247)
6,734,333
-
-
-
-
-
-
-
-
2,682,990
-
(166,828)
2,516,162
-
-
-
-
-
-
-
Performance options on issue as part of LTIP have a nil exercise price.
Performance measures
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.
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 FY2019 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.
The FY2020 performance options are subject to one performance period:
•
100% of the Relative TSR and ROCE performance options will be measured against the performance
measures for a three year period from 1 July 2019 to 30 June 2022.
- 76 -
31.
SHARE BASED PAYMENTS (CONT.)
Weighted average fair value of performance options
The weighted average fair value of performance options granted during the year was nil (2019: 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 ($)
Details
Grant date
Valuation date
Measurement date
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (yrs)
Options exercise price ($)
Share price at grant date ($)
Fair value at grant date ($)
2019
Tranche 1
Relative Total
Shareholder Return
23 Nov 2017
1 Jul 2018
30 Jun 2020
50%
2.00%
2.0
$0.00
$0.80
$0.26
Return on Capital
Employed
22 Nov 2017
1 Jul 2018
30 Jun 2020
50%
2.00%
2.0
$0.00
$0.80
$0.80
Tranche 2
Relative Total
Shareholder Return
23 Nov 2017
1 Jul 2018
30 Jun 2021
50%
2.07%
3.0
$0.00
$0.80
$0.27
2020
Relative Total
Shareholder Return
1 Jul 2019
1 Jul 2019
30 Jun 2022
50%
2.00%
2.0
$0.00
$0.80
$0.26
Return on Capital
Employed
22 Nov 2017
1 Jul 2018
30 Jun 2021
50%
2.07%
3.0
$0.00
$0.80
$0.80
Return on Capital
Employed
1 Jul 2019
1 Jul 2019
30 Jun 2022
50%
2.00%
2.0
$0.00
$0.80
$0.80
- 77 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
32. AUDITOR'S REMUNERATION
Fees to Ernst & Young (Australia)
2020
2019
Fees for auditing the statutory financial report of the parent covering the
group and auditing the statutory financial reports of any controlled
entities
212,016
282,927
Fees for other assurance and agreed-upon-procedures services under
other legislation or contractual arrangements where there is discretion
as to whether the service is provided by the auditor or another firm:
- Renison joint Venture audit
Fees for other services
- tax compliance
Total fees to Ernst & Young (Australia)
33. COMMITMENTS
(a) Capital commitments
63,643
52,764
47,000
322,659
54,500
390,191
Commitments relating to joint arrangements
At 30 June 2020 the Consolidated Entity has capital commitments that relate principally to the purchase and
maintenance of plant and equipment for its mining operations (refer to note 34).
Capital expenditure commitments
Estimated capital expenditure contracted for at reporting date, but not recognised as liabilities for the
Consolidated Entity:
- Within one year
(b) Mineral tenement commitments
2020
$'000
1,632
2019
$'000
1,400
The Company has 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 commitments include Joint Operation commitments as disclosed in note 34.
- Within one year
- After one year but not more than five years
- After more than five years
875
3,228
6,347
10,450
1,154
3,544
6,947
11,645
(c) 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.
- 78 -
34.
INTEREST 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 Project
Subsidiary Bluestone Mines Tasmania Pty Ltd has a 50% interest and participating share in the Renison Tin Project,
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 Project is located in Tasmania.
Recognition and measurement
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:
•
•
•
•
•
Assets, including its share of any assets held jointly
Liabilities, including its share of liabilities incurred jointly;
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
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.
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 Operation:
Mt Bischoff Tin Project:
Nifty Copper Operation:
Maroochydore Copper Project:
-
-
-
-
- Wingellina Nickel Project:
Mining, treatment and marketing of tin concentrate.
Tin project under care and maintenance.
Mining, treatment and marketing of copper concentrate.
Exploration and development of copper assets.
Exploration and development of nickel 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.
During the year, the Consolidated Entity has reviewed the basis of segmentation and identified the Mt Bischoff Tin
Project as a separate segment from the Renison Tin Project. The comparatives have been adjusted to comply
with the current period reporting.
- 79 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 30 JUNE 2020 (CONT.)
35. SEGMENTS (CONT.)
The following table presents revenue and profit information for reportable segments for the year ended 30 June 2020.
Year ended 30 June 2020
Renison Tin
Operation
Mt Bischoff Tin
Project
Nifty Copper
Operation
Maroochydore
Copper Project
Wingellina Nickel
Project
Revenue
External customers
Total revenue
Results
Depreciation and amortisation
Exploration and evaluation
expenditure written off
Impairment of assets
Segment profit
Total assets
$'000
73,243
73,243
(13,690)
-
-
$'000
-
-
-
-
2,913
(8,360)
$'000
70,206
70,206
(9,552)
(105)
(15,363)
(67,913)
$'000
$'000
-
-
-
-
-
-
-
-
-
-
-
Total
$'000
143,449
143,449
(23,242)
(105)
(15,363)
(73,360)
86,866
-
27,494
6,994
3,575
124,929
Total liabilities
(45,239)
(8,710)
(42,213)
-
(99)
(96,261)
Other disclosures
Capital expenditure
(13,750)
-
(15,400)
(1,061)
(1,340)
(31,551)
- 80 -
35. SEGMENTS (CONT.)
The following table presents revenue and profit information for reportable segments for the year ended 30 June 2019.
Year ended 30 June 2019
Renison Tin
Operation
Mt Bischoff Tin
Project
Nifty Copper
Operation
Maroochydore
Copper Project
Wingellina Nickel
Project
Revenue
External customers
Total revenue
Results
$'000
85,276
85,276
Depreciation and amortisation
(14,758)
Exploration and evaluation
expenditure written off
Impairment of assets
Segment profit
Total assets
Total liabilities
Other disclosures
Capital expenditure
$'000
-
-
-
-
-
-
$'000
119,446
119,446
(20,134)
(6,558)
(64,200)
(115,640)
-
-
6,696
84,750
-
-
-
(11)
-
(11)
$'000
$'000
-
-
Total
$'000
204,722
204,722
(57)
(34,949)
-
-
-
(6,569)
(64,200)
(108,955)
67,326
5,929
2,357
160,362
(13,768)
(350)
(68,683)
-
(69)
(82,870)
(9,034)
-
(39,599)
(900)
(1,188)
(50,721)
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 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.
- 81 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
35. SEGMENTS (CONT.)
(a) Reconciliation of profit/(loss)
Segment profit
Corporate administration expenses
Corporate interest income
Corporate other income
Finance costs
Fair value change in financial assets
Share-based payments
Loss on derivative instruments
2020
$'000
(73,360)
(6,659)
441
231
(1,992)
(83)
(137)
1,219
2019
$'000
(108,955)
(6,748)
807
128
(1,472)
(4,422)
(694)
4,387
Total consolidated profit before income tax from continuing
operations
(80,340)
(116,969)
(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
Provision for employee benefits
Interest bearing loans and borrowings
Total consolidated liabilities
(d) Right of use assets
124,929
160,362
23,786
173
211
12
-
50
801
149,962
96,261
1,139
538
233
98,171
6,903
11,183
3,011
141
10,772
45
244
717
186,475
82,870
1,278
650
84
84,882
-
Right of use assets are included in property, plant and equipment.
(e) Segment revenue from external customers
Segment revenue
Total revenue
143,449
143,449
204,722
204,722
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
143,449
143,449
204,722
204,722
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 (2019: 100%). The Renison Tin Operations, Customer 1 and Customer 2 provided
23% and 28% respectively of total external revenue (2019: 12% and 29%). The Nifty Copper Operation, Customer
1 provided 49% of total external revenue (2019: 59%).
(f) Segment non-current assets, excluding financial assets, are all located in Australia.
- 82 -
36. KEY MANAGEMENT PERSONNEL
(a) Details of Key Management Personnel
(i) Directors
Details
Peter Gunzburg 2
Non-Executive Chairman
Brett Smith 5
Patrick O'Connor 2
Grahame White
Xingwang Bao
Brett Lambert
Anthony Polglase
Peter Newton
Damien Marantelli 3
Simon Heggen 1
Milan Jerkovic
Yimin Zhang
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
(ii) Other Executives (KMPs)
Michael Spreadborough 4
Campbell Baird
Russell Cole
Simon Rigby
Stephen Robinson
Fiona Van Maanen
Chief Executive Officer (CEO)
EGM - Mining & Technical
General Manager - Nifty
EGM - Geology & Business
Development
EGM - Projects & Planning
CFO & Company Secretary
Appointed
10 Jul 2020
2 Dec 2019
24 Oct 2019
10 Jul 2020
10 Jan 2020
24 Oct 2019
24 Oct 2019
14 Dec 2012
3 Sept 2018
25 Oct 2012
1 May 2017
9 Jan 2017
19 Dec 2019
3 Sep 2018
23 Aug 2018
5 Jun 2018
25 Nov 2016
1 Jul 2005
Resigned
-
-
-
-
-
10 Jul 2020
10 Jul 2020
24 Oct 2019
2 Dec 2019
2 Dec 2019
30 Aug 2019
10 Jan 2020
-
30 Nov 2019
31 Jan 2020
-
-
-
1)
2)
3)
Simon Heggen was appointed Non-Executive Chairman of the Company upon the resignation of Peter Newton
on 24 October 2019.
Patrick O'Connor was appointed Non-Executive Chairman of the Company upon the resignation of Simon
Heggen on 2 December 2019 and was subsequently appointed Executive Chairman on 17 December 2019.
Upon the appointment of Peter Gunzburg as the Non-Executive Chairman on 10 July 2020, Mr O'Connor
became a Non-Executive Director
Damien Marantelli resigned as the Managing Director on 2 December 2019, was subsequently appointed as
the CEO and resigned 1 March 2020.
4) Michael Spreadborough was appointed as the Chief Operations Officer on 19 December. He was
subsequently appointed the CEO on 3 March 2020.
Brett Smith was appointed an Executive Director on 10 July 2020.
5)
(b) Compensation of Key Management Personnel
Short-term employee benefits
Post employment benefits
Other long-term benefits
Share-based payment
Termination payments
2020
2,961,955
201,941
94,140
75,087
472,757
3,805,880
2019
3,154,998
300,190
218,248
535,127
553,594
4,762,157
(c)
Loans to Key Management Personnel
There were no loans to key management personnel during the current or previous financial year.
- 83 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
36. KEY MANAGEMENT PERSONNEL (CONT.)
(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
24 Nov 2016 *
20 Jan 2017 *
22 Nov 2017 *
23 Nov 2017 *
7 Dec 2018 **
7 Dec 2018 **
25 Jan 2019 *
25 Jan 2019 *
25 Jan 2019 *
1 Jul 2019 **
Expiry
date
20 Jan 2020
20 Jan 2020
30 Nov 2020
30 Nov 2020
30 Jun 2022
30 Jun 2023
22 Jan 2022
22 Jan 2023
22 Jan 2024
30 Jun 2024
Total
*
**
Share options
Performance options
37. RELATED PARTY DISCLOSURES
(a) Subsidiaries
Exercise price
$
0.76
0.76
1.32
1.32
-
-
0.54
0.56
0.58
-
2020
Number
-
-
1,200,000
1,200,000
-
423,448
-
-
-
2,798,459
5,621,907
2019
Number
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
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
Country of
incorporation
Australia
Australia
Paterson Copper Pty Ltd (formerly Cupric Pty
Ltd)
Australia
Ownership interest
2020
2019
100%
100%
100%
100%
100%
100%
Subsidiary companies of Bluestone
Australia Pty Ltd
Bluestone Mines Tasmania Pty Ltd
Subsidiary companies of Metals
Exploration Pty Ltd
Austral Nickel Pty Ltd
Hinckley Range Pty Ltd
Metex Nickel Pty Ltd
Subsidiary companies of Paterson Copper
Pty Ltd
Nifty Copper Pty Ltd
Maroochydore Copper Pty Ltd
(b) Ultimate parent
Metals X Limited is the ultimate parent entity.
(c) Key management personnel
Australia
100%
100%
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Details relating to key management personnel, including remuneration paid, are included in note 36.
- 84 -
37. RELATED PARTY DISCLOSURES (CONT.)
(d)
Transactions with related parties
Recharges
Purchases
from
related
parties
Amounts
owed by
related
parties
Amounts
owed to
related
parties
Jointly controlled operations
Bluestone Mines Tasmania Joint Venture
Pty Ltd (Manager of the Renison Tin
Project)
Key management personnel of the
Consolidated Entity
Milan Jerkovic as a significant
shareholder and director of Xavier Group
Pty Ltd
2020
2019
887,968
488,186
-
-
63,667
47,837
2020
2019
-
-
60,000
205,000
-
-
38.
INFORMATION RELATING TO METALS X LIMITED ("THE PARENT ENTITY")
Current assets
Total assets
Current Liabilities
Total Liabilities
Issued capital
Accumulated losses
Share based payment reserve
Other reserves
Total Equity
2020
$'000
16,133
22,050
762
762
341,685
(348,578)
28,181
-
21,288
-
-
-
-
2019
$'000
24,780
82,124
786
786
-
311,285
(257,991)
28,044
-
81,338
Loss of the parent entity
Total comprehensive loss of the parent entity
(90,587)
(90,587)
(96,830)
(96,830)
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
- 85 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
39.
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. The recoverable amount is the higher of the
asset’s fair value less costs of disposal (FVLCD) and value in use (VIU).
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.
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, are recognised in the profit and loss.
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.
31 December 2019 Assessment
On 26 November 2019, the Company announced that after completing an operational review of Nifty, the Board
decided to immediately suspend mining activities with the mine, processing facilities and infrastructure put on care
and maintenance. As a result, of Nifty being placed on care and maintenance it was determined there were indicators
of impairment of the Nifty CGU. The primary trigger for impairment is due to the increase in the value of the Nifty
CGU with no substantial increase in the recoverable amount. The Consolidated Entity used FVLCD to determine the
recoverable amount for the Nifty CGU based on the following methodology and assumptions:
Methodology
For the period ended 31 December 2019 the Consolidated Entity has impaired the assets of the Nifty CGU using the
ranges from the independent expert valuation reports prepared at 30 June 2019 based on comparable transactions
less expected costs of disposal. The independent valuation reports for stores and spares and property, plant and
equipment did not allow for economic obsolescence and as such the Consolidated Entity has applied a reduction of
an average of 76% (30 June 2019: 70%) to allow for economic obsolescence. The Consolidated Entity considers
using the independent expert valuation reports prepared at 30 June 2019, prior to economic obsolescence, as a
basis to determine the FVLCD to be the most appropriate valuation method for financial statement reporting
purposes. At 30 June 2020 the Company determined that there were no indicators for impairment reversals or any
further impairment of the Nifty CGU.
In allocating the impairment, individual assets have not been impaired beyond 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 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.he Company has not allowed for any COVID-19 impacts on the prices it expects to be able to sell
equipment for as to date COVID-19 has not had an impact on the recoverable values of the assets given the general
improvement in the WA mining industry, however it may in future periods if conditions change.
- 86 -
39.
IMPAIRMENT OF NON FINANCIAL ASSETS (CONT.)
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
8,862,871
1,662,871
Property, plant and equipment
25,728,630
3,673,932
Exploration expenditure
3,170,671
-
Mine, properties and development
10,026,475
10,026,475
7,200,000
22,054,698
3,170,671
-
Total
47,788,647
15,363,278
32,425,369
30 June 2019 Assessment
As a result of the Consolidated Entity’s 30 June 2019 impairment indicator review, it was determined that continued
cash outflows and underperformance against budget represent indicators of potential impairment of the Nifty CGU.
The Consolidated Entity has used FVLCD to determine the recoverable amount for the Nifty CGU.
Methodology
For the year ended 30 June 2019 the Consolidated Entity impaired the assets of Nifty based on fair values determined
by independent experts using comparable transactions less expected costs of disposal. This method was been
adopted as it results in a higher recoverable amount than a VIU assessment.
Inventory and property, plant and equipment was valued using estimated market values adjusted for present
condition and location. Mine, properties and development and the exploration expenditure were 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.
Impairment Losses
Impairment losses were 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
- 87 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020 (CONT.)
40. EVENTS AFTER THE BALANCE SHEET DATE
Asia Cheer Finance Facility
On 27 July 2020, entered into a loan facility with Asia Cheer Trading Limited (ACT) for a $26,000,000 unsecured
term loan facility (ACT Loan). The funds from the ACT Loan were to be applied to the repayment of the amount
outstanding pursuant to the Citi Facility. Draw down of the ACT Loan was subject to the contemporaneous close out
of the Citi Facility. The Loan was fully drawn down on 31 July 2020.
The key terms of the Loan are as follows:
Loan term:
Until 31 January 2021
Interest and charges:
Key terms:
Establishment fee of 3.5%. Interest rate is BBSY plus 1.0%, approximate total rate of
4.5%.
The net proceeds from the sale of the Copper Assets or any capital raising undertaken
by the Company during the loan term must be paid to the lender in permanent
reduction of the Principal Amount.
On 21 August 2020, ACT provided the Company with a waiver of the mandatory repayment of the loan from the sale
of the Copper Assets or any capital raising undertaken by the Company if required to assist with management of
working capital. On 31 August 2020, ACT advised the Company that if required, the ACT Loan will be amended to
increase the commitment by $5,000,000 to $31,000,000 and extend the repayment date to 31 July 2021. If the
amendments are required the Company is to provide ACT with a formal written notice prior to 31 October 2020.
Citi Finance Facility Repayment
Under the Citi Facility the Company was required to remain within certain financial covenants which were measured
for compliance at the end of each calendar quarter. For the quarter ending 30 June 2020 the Company did not meet
the Forecast Cash Flow Cover Ratio (Forecast CFCR) nor the Forward Debt Service Cover Ratio (Forecast DSCR).
The principal reason for the Forecast CFCR and the Forward DSCR were not met was the decision to proceed with
the Area 5 development with its capital expenditure for the Consolidated Entity’s 50% share being $25 – 27.5 million
over the next two years. On 31 July 2020, the Company announced that it paid out the principal and interest sum of
the Citi Facility and the Company settled and closed out the associated derivative contracts.
As a result of the pay out of the Citi Facility, the final condition was satisfied with regard to the ACT Loan and the
Company drew down the full A$26,000,000.
- 88 -
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
2020 and of their performance for the year ended on that date; and
complying with the Australian Accounting Standards (including the Australian Accounting Interpretations)
and Corporations Regulations 2001; and
(b)
(c)
(d)
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 2(b) and;
subject to the 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 2020.
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.
Brett Smith
Executive Director
Perth, 15 September 2020
- 89 -
INDEPENDENT AUDIT REPORT
- 90 -
- 91 -
INDEPENDENT AUDIT REPORT
- 92 -
- 93 -
INDEPENDENT AUDIT REPORT
- 94 -
TABLES OF MINERAL RESOURCES AND ORE
RESERVES AS AT 30 JUNE 2020
Tin Division
MINERAL RESOURCE ESTIMATES – CONSOLIDATED SUMMARY & ANNUAL COMPARISON
Project
30 June 2019
Renison Bell
Mt Bischoff
Rentails
Mining Depletion
Renison Bell
Mt Bischoff
Rentails
Resource Adjustments
Renison Bell
Mt Bischoff *
Rentails
30 June 2020
Renison Bell
Rentails
Tonnes
Kt
17,550
1,670
23,890
43,110
Tin
Grade
% Sn
1.50
0.54
0.44
0.87
Metal
Kt Sn
Tonnes
kt
Copper
Grade
% Cu
Metal
Kt Cu
263
9
104
376
17,550
-
23,890
41,440
0.20
-
0.22
0.21
(850)
1.16
(10)
(850)
0.29
-
-
1,850
(1,670)
-
18,550
23,890
42,440
-
-
2.08
0.54
-
1.57
0.44
0.93
-
-
38
(9)
-
292
104
396
-
-
-
-
150
2.71
-
-
18,550
23,890
42,440
-
-
0.20
0.22
0.21
35
-
53
88
(3)
-
-
4
-
-
37
53
89
ORE RESERVE ESTIMATES – CONSOLIDATED SUMMARY & ANNUAL COMPARISON
The Ore Reserve estimates are a subset of the Mineral Resource estimates
Project
30 June 2019
Renison Bell
Rentails
Mining Depletion
Renison Bell
Rentails
Reserve Adjustments
Renison Bell
Rentails
30 June 2020
Renison Bell
Rentails
Ore
Kt
8,100
22,310
30,410
(808)
-
1,320
-
8,610
22,310
30,920
Tin
Grade
% Sn
Metal
Kt Sn
Ore
Kt
Copper
Grade
% Cu
Metal
Kt Cu
1.02
0.44
0.60
1.17
-
3.56
-
1.40
0.44
0.60
82
99
181
(9)
-
47
-
120
99
181
8,100
22,310
30,410
(808)
-
1,320
-
8,610
22,310
30,920
0.21
0.23
0.22
0.32
-
0.15
-
0.18
0.23
0.21
17
51
68
(2)
-
3
-
1
51
66
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.
For further details on Total Mineral Resource and Ore Reserve Estimates for the Tin Division refer to ASX announcement dated 17 June 2020.
* The 30 June 2019 Renison Tin Operation Mineral Resource estimate included a defined Mineral Resource for the Mt Bischoff de posit. During the
year a decision was made to rehabilitate the Mt Bischoff open pit which, when complete, will have the effect of s terilising the defined Mineral
Resource. On this basis, BMTJV has written-off the Mt Bischoff Mineral Resource for the 30 June 2020 estimation.
- 95 -
MINERAL RESOURCE ESTIMATES – CONSOLIDATED SUMMARY & ANNUAL COMPARISON
COPPER DIVISION
Project
30 June 2019
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 2020
Nifty Sulphide
Nifty Oxide
Nifty Heap Leach
Copper
Kt
Grade %
Metal Kt
36,280
4,330
3,310
43,920
(680)
-
-
4,050
-
-
39,650
4,330
3,310
47,290
1.50
0.86
0.74
1.38
1.40
-
-
1.54
-
-
1.51
0.86
0.74
1.39
546
37
23
606
(10)
-
-
62
-
-
598
37
23
658
Maroochydore Project
30 June 2019
Maroochydore Oxide
Maroochydore Sulphide
Mining Depletion
Maroochydore Oxide
Maroochydore Sulphide
Resource Adjustments
Maroochydore Oxide
Maroochydore Sulphide
30 June 2020
Maroochydore Oxide
Maroochydore Sulphide
Copper
Grade
% Cu
Kt
Metal
Kt Cu
Kt
Cobalt
Grade
ppm Co
43,200
5,430
48,630
0.91
1.66
1.00
394
90
486
43,200
5,430
48,630
391
292
380
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
- 96 -
COPPER DIVISION (CONT.)
ORE RESERVE ESTIMATES – CONSOLIDATED SUMMARY & ANNUAL COMPARISON
The Ore Reserve estimates are a subset of the Mineral Resource estimates
Project
30 June 2019
Nifty Sulphide
Mining Depletion
Nifty Sulphide
Ore
Kt
Copper
Grade
% Cu
Metal
Kt Cu
11,100
1.45
161
(680)
1.40
(10)
Resource Adjustments
Nifty Sulphide *
(10,420)
1.45
(151)
30 June 2020
Nifty Sulphide
-
-
151
Notes:
The geographic region for Copper Mineral Resources and Ore Reserves is Australia.
For further details on Total Mineral Resource Estimates for the Copper Division refer to ASX announcement dated 10 March 2020.
* On the 26th November 2019 the Company suspended mining the Nifty Sulphide deposit and placed the Nifty Copper Operation on care and
maintenance pending the outcome of a strategic review to consider re-start scenarios. On this basis, the Company has taken the decision to
withdraw the Ore Reserve estimation pending the completion of a re-start feasibility study.
- 97 -
MINERAL RESOURCE ESTIMATES – CONSOLIDATED SUMMARY & ANNUAL COMPARISON
NICKEL DIVISION
Project
30 June 2019
Wingellina
Claude Hills
Mining Depletion
Wingellina
Claude Hills
Resource
Adjustments
Wingellina
Claude Hills
30 June 2020
Wingellina
Claude Hills
Nickel
Cobalt
Kt
Grade
% Ni
Metal
Kt Ni
Kt
Grade
% Co
Metal
Kt Co
Kt
Fe2O3
Grade
%
Fe2O3
Metal
Kt
182,560
33,277
215,837
0.92
0.81
0.91
1,684
182,560
269
33,277
1,953
215,837
0.07
0.07
0.07
132
22
154
182,560
33,277
215,837
45.30
38.73
44.29
82,701
12,889
95,590
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
182,560
33,277
215,837
0.92
0.81
0.91
1,684
182,560
269
33,277
1,953
215,837
0.07
0.07
0.07
132
22
154
182,560
33,277
45.30
38.73
82,701
12,889
215,837
44.29
95,590
ORE RESERVE ESTIMATES – CONSOLIDATED SUMMARY & ANNUAL COMPARISON
The Ore Reserve estimates are a subset of the Mineral Resource estimates
Project
30 June 2019
Wingellina
Claude Hills
Mining Depletion
Wingellina
Claude Hills
Resource
Adjustments
Wingellina
Claude Hills
30 June 2020
Wingellina
Claude Hills
Nickel
Cobalt
Ore
Kt
Grade
% Ni
Metal
Kt Ni
Ore
Kt
Grade
% Co
Metal
Kt Co
Ore
Kt
Fe2O3
Grade
%
Fe2O3
Metal
Kt
168,422
0.93
1,561
168,422
0.07
123
168,422
45.64
76,870
-
-
-
-
-
-
-
-
-
168,422
0.93
1,561
168,422
0.07
123
168,422
45.64
76,870
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
168,422
0.93
1,561
168,422
0.07
123
168,422
45.64
76,870
-
-
-
-
-
-
-
-
-
168,422
0.93
1,561
168,422
0.07
123
168,422
45.64
76,870
Notes:
The geographic region for Nickel Mineral Resources and Ore Reserves is Australia.
For further details on Total Mineral Resource and Ore Reserve Estimates for the Tin Division refer to ASX announcement dated 18 August 2016.
- 98 -
COMPETENT PERSONS STATEMENT
The information in this report that relates to tin Mineral Resources was compiled by Bluestone Mines Tasmania Joint Venture 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 Bluestone Mines Tasmania Joint Venture, 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.
The information in this report that relates to copper Mineral Resources has been compiled by Metals X Limited technical employees under
the supervision of Mr Kane Hutchinson BSc., who is a member of the Australasian Institute of Mining and Metallurgy. Mr Hutchinson is a
full-time employee of the Company and 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 Hutchinson 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 relate to tin Ore Reserves has been compiled by Bluestone Mines Tasmania Joint Venture technical
employees under the supervision of Mr Mark Recklies, B Engineering (Mining Engineering), AusIMM. Mr Recklies is a full-time employee
of Bluestone Mines Tasmania Joint Venture. 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.
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 nickel Ore Reserves was compiled in 2016 by Metals X technical employees under the
supervision of Mr Michael Poepjes, B Engineering (Mining Engineering), MSc (Min. Econ) AusIMM. Mr Poepjes was then a full-time
employee of the Company. Metals X confirms that it is not aware of any new information or data that materially affects the information
included in the original market announcement of 18 August 2016 and that all material assumptions and technical parameters underpinning
the estimates in the relevant market announcement continue to apply and have not materially changed. Metals X confirms that the form
and context in which the Competent Persons’ findings are presented have not been materially modified from the original.
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 Executive 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). A material change to the Nifty Copper Sulphide Ore Reserve estimate occurred during the reporting period as a result of the
decision taken on the 26th November 2019 to suspended mining the Nifty Sulphide deposit and place the Nifty Copper Operation on care
and maintenance pending the outcome of a strategic review to consider re-start scenarios. On this basis, the Company has taken the
decision to withdraw the Nifty Sulphide Ore Reserve estimation pending the completion of a re-start feasibility study. No other material
changes to the Mineral Resources and Ore Reserves have been made 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.
- 99 -
SECURITY HOLDER INFORMATION AS AT
1 SEPTEMBER 2020
(a) Top 20 quoted Shareholders
Name
J P Morgan Nominees Australia Pty Limited
Sun Hung Kai Investment Services Limited
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
Jinchuan Group Ltd
Farjoy Pty Ltd
HSBC Custody Nominees (Australia) Limited-GSCO ECA
All-States Finance Pty Limited
Miningnut Pty Ltd
National Nominees Limited
Mrs Yuqin Zhuang
Mr Ram Shanker Kangatharan
CS Third Nominees Pty Limited
% Units
14.13
Units
128,181,507
8.77
6.53
5.82
5.64
4.85
4.51
2.86
2.07
0.99
0.88
0.85
0.73
0.68
0.64
0.53
0.50
0.47
0.44
0.42
62.30
79,536,595
59,262,627
52,805,566
51,145,179
44,000,000
40,897,831
25,953,819
18,748,587
9,000,000
7,959,081
7,700,000
6,605,479
6,170,338
5,819,211
4,800,000
4,503,507
4,300,000
4,000,000
3,817,262
565,206,589
Number of Shareholders Number of Shares
414,076
916
5,826,043
2,200
8,274,647
1,096
80,356,853
2,308
812,394,448
639
907,266,067
7,159
Jetosea Pty Ltd
Mr Richard Farleigh
Ajava Holdings Pty Ltd
Whale Watch Holdings Limited
Mr Kon Tzimokas
Debortoli Wines Pty Limited
Total
(b) Distribution of quoted ordinary shares
Size of Parcel
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Total
(c) Number of holders with less than a marketable parcel of ordinary shares
1 – 10,000
(d) Substantial Shareholders
Shareholder
APAC Resources Strategic Holding Limited
Argyle Street Management Limited
Old Peak Group Limited
Number of
Shareholders
3,400
Number of
Shares
7,823,566
%
Number of shares
15.31
12.08
8.43
130,627,608
109,583,251
76,469,553
(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
5,250,000
632,277
6,102,055
Exercise Price
$1.32
$0.00
$0.00
Expiry Date
30/11/2020
30/06/2023
30/06/2024
Number holders
8
7
12
- 100 -
-