ACN 110 150 055
Annual Report
For the Year Ended
31 December 2023
CONTENTS
CORPORATE DIRECTORY ...................................................................................................................................................... 1
CHAIRMAN’S LETTER .............................................................................................................................................................. 2
DIRECTORS’ REPORT ............................................................................................................................................................. 3
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ......................................................................................... 20
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................................................. 21
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................................... 22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................................................. 23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................................................ 24
DIRECTORS’ DECLARATION ................................................................................................................................................ 60
AUDITOR’S INDEPENDENCE DECLARATION ..................................................................................................................... 61
INDEPENDENT AUDIT REPORT ............................................................................................................................................ 62
MINERAL RESOURCES AND ORE RESERVES STATEMENT ............................................................................................. 68
SECURITY HOLDER INFORMATION ..................................................................................................................................... 70
CORPORATE DIRECTORY
Directors
Mr Peter Gunzburg (Non-Executive Chairman)
Mr Brett Smith (Executive Director)
Mr Grahame White (Non-Executive Director)
Mr Patrick O’Connor (Non-Executive Director)
Company Secretary
Ms Shannon Coates
Key Management
Mr Daniel Broughton (Chief Financial Officer)
Share Registry
Computershare Investor Services Pty Ltd
Level 17, 221 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
Registered Office
Unit 202, Level 2
39 Mends Street
South Perth WA 6151
Phone: +61 8 9220 5700
E-mail: reception@metalsx.com.au
Website: www.metalsx.com.au
Postal Address
Unit 202, Level 2
39 Mends Street
South Perth WA 6151
Securities Exchange
Australian Securities Exchange
Central Park
152-158 St George’s Terrace
Perth WA 6000
Code: ASX: MLX
Domicile and Country of Incorporation
Australia
1
CHAIRMAN’S LETTER
This report is for the 12 months ending 31 December 2023.
Your company’s principal asset remains its 50% interest in the Bluestone Mines Tasmania Joint Venture
(“BMTJV”).
During the year the tin price traded between AU$33,600 and AU$48,500 and was one of the few, perhaps the
only, base metal not to suffer a significant price decline during that period. This was largely due to decreases
in supply from Indonesia and Myanmar for various geopolitical reasons as distinct from any noticeable increase
in demand. It has resulted however in a healthy cash balance at year end of $143.0 million following a net
profit after tax of $14.59 million which compares very favourably with the situation the company reported at 30
June 2020 when debt totalled $30.5 million.
During the year, the BMTJV spent $34.93 million on various capital works designed to ensure a mine life of at
least 10 years and to also continue an extensive study on the Rentails project, one of the world’s largest
undeveloped tin projects.
The Rentails project represents an opportunity to significantly increase annual tin production using sustainable
mining practices and simultaneously reduce our existing environmental footprint. While the funding structure
for the Rentails project has not been finalised, it comes with a significant capital cost and technological
challenge.
The board has received a number of suggestions as to how we might allocate our cash reserves all of which
receive due consideration. We are also mindful of the vagaries of the tin market and how supply and demand
is capable of changing quite quickly. We are also conscious of our reliance on a single mine. As a
consequence, we will continue to maintain a strong balance sheet, whilst considering appropriate capital
management in an elevated tin price environment and continue to be on the lookout for potential acquisitions.
Peter Gunzburg
Non-Executive Chairman
2 DIRECTORS’ REPORT
For the year ended 31 December 2023
The Directors present their report together with the consolidated financial report of Metals X Limited (“Metals X”
or the “Company”) and its controlled entities (together the “Group”) for the year ended 31 December 2023 and
the Independent Auditor’s Report thereon. As a result of the financial year change from 30 June to 31
December, the comparative reporting period is for the 6 months to 31 December 2022. Consequently, the
amounts presented in this report and the consolidated financial statements are not directly comparable.
1.
Directors
The names of the Company's Directors in office during the Reporting Period and until the date of this report are
set out below. Directors were in office for this entire period unless otherwise stated.
Independent Non-Executive Chairman – Mr Peter Gunzburg B. Com (appointed 10 July 2020)
Mr Gunzburg has over 40 years’ experience acting as a public company director, stockbroker, and investor. Mr
Gunzburg has previously been a director of Australian Stock Exchange Ltd, Eyres Reed Ltd and CIBC World
Markets Australia Ltd. Mr Gunzburg was the Non-Executive Chairman of ASX listed BARD1 Life Sciences
Limited, now known as Inoviq Ltd (resigned 28 July 2020).
Mr Gunzburg is a member of the Remuneration and Nomination Committee and the Audit and Risk Committee.
Executive Director – Mr. Brett Smith MBA, M.A (appointed 2 December 2019 as Non-Executive Director and
Executive Director as of 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 33 years international experience in the engineering and construction of mineral
processing operations. Mr. Smith was previously Executive Director and Deputy Chairman of Hong Kong listed
company APAC Resources Limited (resigned 23 November 2023) and Non-Executive Director of ASX listed
Elementos NL (resigned 26 May 2023). He is currently Executive Director of Hong Kong listed company Dragon
Mining Limited (appointed 7 February 2014) and a Non-Executive Director of ASX listed companies Prodigy
Gold NL (appointed 29 November 2021), Tanami Gold NL (appointed 27 November 2018) and NICO Resources
Limited (appointed 29 April 202).
Independent Non-Executive Director – Mr Grahame White B. Eng, MAICD (appointed 10 July 2020)
Mr White is a construction and mining executive with comprehensive experience in Australia and Asia. Mr White
is currently a non-executive director of ASX listed MacMahon Holdings Limited (ASX: MAH) (appointed 1
February 2024) and has held numerous executive management positions in the resources sector. Mr White has
previously served on the Boards of Central West Rural, Forge Group Limited and the Queensland Resource
Council.
Mr White is Chairman of the Remuneration and Nominations Committee and a member of the Audit and Risk
Committee.
Independent Non-Executive Director – Mr Patrick O’Connor B.Com, FAICD (appointed Non-Executive
Director 24 October 2019 and Non-Executive and Executive Chairman on 3 December 2019 and 17 December
2019, respectively. Reverted to Non-Executive Director on 10 July 2020).
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 is currently Non-Executive Chairman of FAR Limited
(ASX: FAR) and Non-Executive Director of Sierra Rutile Holdings Limited (ASX: SRX) (appointed on 1 August
2023). He previously was a Non-Executive Director and executive director of Red River Resources Limited (In
Liquidation) appointed on 9 August 2022 and on 5 September 2022 respectively, which went into liquidation on
23 August 2023.
Mr O’Connor is Chairman of the Audit and Risk Committee and a member of the Remuneration and Nomination
Committee.
3
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
2.
Key Management Personnel (continued)
Chief Financial Officer – Mr Daniel Broughton – Bcomm, GradDipCA, MAICD (appointed 1 December 2020)
Mr Broughton provides financial services under a separate service agreement between Dragon Mining Limited
and Metals X. Mr Broughton has over 18 years’ experience with financial operations of listed mining companies.
Mr Broughton is also the Chief Financial Officer of Dragon Mining Limited, a company listed on the Stock
Exchange of Hong Kong Limited (Stock Code: 1712) and ASX listed company Tanami Gold NL (ASX: TAM).
Mr Broughton graduated with a Bachelor of Commerce from Murdoch University, Western Australia in 2005 and
obtained a Graduate Diploma of Chartered Accounting from The Institute of Chartered Accountants, Australia
in 2010.
3.
Directors’ Interests
As at the date of this report, the relevant interests of the Directors in securities of the Company are:
Directors
Mr Peter Gunzburg
Mr Brett Smith
Mr Patrick O’Connor
Mr Grahame White
Total
4.
Directors Meetings
Fully Paid Ordinary Shares
Options
-
250,000
1,000,000
-
1,250,000
-
-
-
-
-
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:
Board Meetings
Audit and Risk
Committee Meetings
Remuneration &
Nomination
Committee Meetings
Directors
Mr Peter Gunzburg
Mr Brett Smith(1)
Mr Patrick O’Connor
Mr Grahame White
Eligible
to attend Attended
Eligible
to attend Attended
Eligible
to attend Attended
9
7
9
9
8
7
9
9
2
-
2
2
2
2
2
2
1
-
1
1
1
1
1
1
(1) Mr Brett Smith was not eligible to attend 2 board meetings due to potential conflicts of interest. Mr Brett
Smith attended the Audit and Risk Committee meeting and the Remuneration & Nomination Committee
meeting as an invitee.
5.
Nature of Operations and Principal Activities
The Company is a limited liability company and is domiciled and incorporated in Australia. The Company owns
a 50% equity interest in the Renison Tin Operation through its 50% stake in the Bluestone Mines Tasmania
Joint Venture and comprises the Renison Tin Mine located 15km north-east of Zeehan on Tasmania’s west
coast and the Mount Bischoff Project, placed on care and maintenance in 2010, which is located 80km north
of Renison. The principal activities of the Company during the year were:
Investment in a joint venture company operating a tin mine in Australia; and
Investments in companies undertaking exploration and development of gold and base metals projects
in Australia.
There have been no significant changes in the nature of the Company’s activities during the year.
4
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
6.
Financial Results Overview
The financial results overview is for the year ended 31 December 2023. As a result of the financial year change
from 30 June to 31 December,1 the comparative reporting period is the 6 months ended 31 December 2022.
Consequently, the amounts presented in the Directors’ Report and consolidated financial statements are not
directly comparable.
The Company achieved a consolidated profit after income tax of $14.59 million (31 Dec 2022: $9.97 million)
for the year. At year end, Metals X closing cash at bank increased by $29.11 million to $143.04 million (31
December 2022: $113.93 million).
Other key financial results for the Group include:
Financial Results
(i)
(ii)
Revenue net of TC/RC
Cost of sales
(iii) Gross profit
(iv) Other income
(v)
(vi)
Fair value loss on financial assets
Income tax expense
(vii) Cash flows from operating activities
(viii) Cash flows used in investing activities
(ix)
Cash flows from/(used in) financing activities
12 months to
31 Dec 2023
$’000
$153,781
6 months to
31 Dec 2022
$’000
$66,682
$105,155
$48,626
$9,597
($23,637)
$12,234
$64,860
($32,650)
($3,097)
$50,400
$16,282
$1,453
($2,005)
$3,983
$11,558
($18,838)
($1,039)
(i)
Revenue is derived from the Company’s 50% equity interest in Renison. During the year, the Renison
Tin Operation (“Renison”) shipped 4,449 tonnes (Metals X 50% share) of tin-in-concentrate (31
December 2022: 2,012 tonnes of tin-in-concentrate) to Metals X tin customers. The average LME Tin
3-month tin price for the year was US$25,951/t (2022: US$22,445/t).
(ii)
Cost of sales of $105.16 million (31 December 2022: $50.40 million) includes the following:
o Royalty expense of $8.16 million (31 December 2022: $3.51 million) payable by Metals X on tin
revenue;
o Underground mining costs of $35.45 million (31 December 2022: $15.57 million);
o Processing costs of $19.80 million (31 December 2022: $9.00 million);
o Other Renison production costs of $9.61 million (31 December 2022: $4.23 million); and
o Renison employee costs of $21.55 million (31 December 2022: $10.22 million).
(iii)
An increase in tin revenue relative to cost of sales resulted in a gross profit margin of 31.62% for the
year (31 December 2022: 24.42%).
(iv) Other income of $9.60m includes $5.65 million of interest income (31 December 2022: $1.43 million)
on $100 million held in (3) 3-month term deposits, $1.44 million (31 December 2022: $1.44 million) as
settlement of the 4% coupon payable under the terms of the convertible notes issued by Cyprium Metals
Limited (“Cyprium”) (ASX: CYM) and $2.40 million (31 December 2022: nil) as a gain on sale of
investment in associate.
(v)
(vi)
Represents the fair value adjustment of the Company’s (4) convertible notes with a face value of $36.00
million to $14.00 million at year end (31 December 2022: $30.43 million), and a fair value adjustment
of the NICO options to $3.63 million (31 December 2022: $10.63 million). Refer to note 2 of the
consolidated financial statements for valuation details and assumptions.
The Company had a deferred tax asset (“DTA”) available to offset its income tax expense of $12.23
million (31 December 2022: tax expense $3.98 million). Following utilisation of the carry forward tax
losses, the Company has recognised a DTA of $26.31 million at 31 December 2023 (31 December
2022: DTA $38.54 million).
1 Refer ASX announcement: 4 January 2022, Change to Financial Year End.
5
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
6.
Financial Results Overview (continued)
(vii) Cash flows from operating activities of $64.86 million (31 December 2022: $11.56 million).
(viii) Cash flows used in investing activities of $32.65 million (31 December 2022: 18.84 million) relate
primarily to payments for property plant and equipment, and mine properties & development, offset by
proceeds from the sale of NICO shares.
(ix)
Cash flows used in financing activities relate to $3.10 million (31 December 2022: $1.04 million)
payments for lease and hire purchase liabilities.
7.
Review of Operations
Renison Tin Operation (50% Metals X)
The Company owns a 50% equity interest in the Renison Tin Operation through its 50% stake in the Bluestone
Mines Tasmania Joint Venture (“BMTJV”).
Renison is one of the world’s largest operating underground tin mines and Australia’s largest primary tin
producer. Renison is the largest of three major skarn, carbonate replacement, pyrrhotite-cassiterite deposits
within western Tasmania. The Renison Mine area is situated in the Dundas Trough, a province underlain by a
thick sequence of Neoproterozoic-Cambrian siliciclastic and volcaniclastic rocks. At Renison, there are three
main shallow-dipping dolomite horizons which host replacement mineralisation. The major structure
associated with tin mineralisation at Renison, the Federal Basset Fault, was formed during the forceful
emplacement of the Pine Hill Granite during the Devonian and is also an important source of tin mineralisation.
The Renison strategy is focussed on continuing to increase Mineral Reserves net of depletion each year to
maintain significant mine life and to deliver higher cash margins through an increased mining rate, grade, and
recovery, whilst continuing to seek productivity improvements and reduce costs.
Renison production performance summary (100% Basis)
Physicals
Unit
Ore mined
t
%
Grade mined
Sn
t
Ore processed
Grade of ore processed %
Sn
Mill recovery
%
t
Tin produced
12 months to
31 Dec 2023
778,638
1.65
649,548
1.92
76.27
9,532
6 months to
31 Dec 2022
380,186
1.38
307,043
1.63
75.37
3,773
Movement
$
398,452
0.27
342,505
0.29
0.90
5,759
Movement
%
105%
20%
112%
18%
1%
153%
During the year, ore was mined from central federal basset, Huon North, Area 5 and Leatherwood
stopes. Mined grade increased to 1.65% (31 Dec 2022: 1.38%) in line with the mine plan following
access to the higher-grade Area 5 and Leatherwood stopes established.
Grade of ore processed increased to 1.92% (31 December 2022: 1.63%) consistent with the increased
grade of ore mined from Area 5 and Leatherwood.
Mill recovery was influenced by high talc and sulphur grades early in the year. As a result, several
opportunities to deal with high talc levels were identified, the most significant integrated the mine plan
and ROM blending regime to blend talc and sulphur down to manageable levels. Following
implementation of the improvement opportunities, mill recovery increased to 76.27% (31 December
2022: 75.37%).
The improved grade and recovery resulted in production of 9,532t of tin-in-concentrate for the year.
Further details about Renison’s production performance can be obtained from the Company’s quarterly
announcements available on the Company’s website www.metalsx.com.au/quarterly-reports.
Capital Project Update
Area 5 Project
The Area 5 upgrade was completed with access to the high-grade Area 5 and Leatherwood stopes established
during Q2 CY2023. Average annual tin production is expected to increase on average to 10,000 tonnes of tin
per annum.
Key activities completed during the year included:
Ventilation upgrade
6
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
Capital Project Update (continued)
Area 5 Project (continued)
o The reaming of the upper leg of the Leatherwoods Fresh Air Raise (“FAR”).
o The lower leg recovery drive, at 1315 level, and the reaming head chamber mined.
o Geotechnical drilling for the new Leatherwoods Return Air Raise (“RAR”).
o The design and independent review of the mine-wide pumping system upgrade was completed.
Project costing, schedule development, and early long lead time item procurement are underway.
Backfill Facility and Infrastructure
o Paste delivery to production stopes was successfully completed during Q3 CY2023 although
component failure of the underground reticulation pipework caused challenges, they were
successfully rectified during Q4 CY2023 and scheduled paste fill delivery continued without
unplanned interruptions thereafter.
Surface projects
o Mechanical installation of the new 12m thickener has been successfully completed. Electrical
installations are ongoing, and the project remains on schedule for commissioning in Q1 CY2024.
o Ongoing defect rectification works in the HV switchyard, detailed design of the tailings dam overhead
powerline, and sitewide environmental improvements are in progress.
Metallurgical Improvement Program
The Metallurgical Improvement Program was completed during Q3 CY2023. Key projects completed during
the year:
Tin Flotation Circuit Re-configuration;
Leach fee surge tank commissioning; and
Decommissioning of the 50’ thickener.
Mine dewatering
o The mining, civil and mechanical installation of the new North Renison Decline pump stations (1036
and 1121 levels) were completed. Electrical installations will be finalised during Q1 CY2024.
Rentails Project
The Rentails Project (“Rentails”) located adjacent to the Murchison Highway south of Laker Pierman,
encompasses a significant geographical footprint within a 4,662-hectare consolidated mining lease. It aims to
reprocess 23.2 million tonnes of tailings, containing significant amounts of tin and copper, with a proposed
new high-technology tailings reprocessing plant capacity of approximately 2.5 million tonnes per year. The aim
is for the Rentails facility to be designed and operating to be Net Zero Emission through the selection of the
technology and energy source for the thermal upgrade plant with consideration of the world’s first use of green
hydrogen in tin fuming. The Company is targeting a FID in 2026 with a 12-18 month construction window.
During the year, the Rentails project has continued to progress in-line with the major objectives of the 2023
study plan approved by the BMTJV Committee2. Selection of the final Thermal Upgrade Plant (“TUP”)
Technology selection, and submission of a revised Notice of Intent (“NOI”) are scheduled for later in CY2024.
Key activities during the year included:
TUP Furnace Technology selection:
The Box fuming furnace trial at Yunnan Tin Group’s (“YTG”) Gejiu smelter recommenced following
commissioning of modifications to address the gas supply and fuel rate limitations encountered during
2023. Consistent results were achieved and adequate data to inform the purposes of the TUP
Furnace Technology selection produced. Data analysis of the trial results is now underway, with
reporting expected to be complete early Q1 CY2024.
o The Ausmelt Top Submerged Lance (“TSL”) trial report was finalised by engineering consultant,
Metso. Results from the trial demonstrate very low tin losses to slag and a high-grade tin fume product
can be robustly achieved.
2 Refer ASX announcement: 16 January 2023, Rentails Thermal Upgrade Plant Trials.
7
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
7.
Review of Operations (continued)
Rentails Project (continued)
o The Metso Ausmelt TSL furnace process study was completed, with all deliverables finalised and
issued for use. A key deliverable from the study was Metso’s proposed performance warranties with
respect to tin losses to slag, tin fume quality and fuel consumption for the full scale Rentails TUP
installation; these reflected the positive trial and process study outcomes.
o Commencement of the ENFI Box fumer process study is expected to commence in Q1 CY2024. The
overall TUP techno-economic study will be progressed in parallel with this, with the final TUP furnace
technology selection expected mid CY2024.
Infrastructure Engineering:
o Engagement with various stakeholders with respect to accommodation and energy requirements
continued.
o Assessment of additional permanent and
temporary
infrastructure requirements
including
construction and operations accommodation will be further progressed during Q1 and Q2 CY2024.
o Preparation of the water balance/s to support the definition of additional water requirements was well
progressed by the end of the year.
Tailings Reclaim, Tailings and Water Management:
o Analysis and reporting of the geotechnical and hydrogeological drill programs was completed. This
work highlighted the need for a small additional geotechnical/hydrogeological drilling program in the
proposed area to fully inform groundwater modelling and engineering requirements.
o The geotechnical/hydrogeological drilling program was fully defined, and approval granted by Mineral
Resources Tasmania (“MRT”) to complete this as an extension to the 2023 programme permit
conditions with completion expected during Q1 CY2024.
o Development of baseline surface, groundwater, and geo-chemistry models was completed.
o Ground monitoring and the surface water monitoring programs continued.
o Strength testing of A-B and C Dam tailings to inform detailed tailings reclaim planning was completed.
o Preliminary Tailings Storage Facility (“TSF”) engineering to assess spillway options and water
management issues continued.
Rentails Project (continued)
Safety, Health, Environment and Community:
o Studies to meet the revised NOI 2024 submission schedule were progressed.
o Further targeted natural values surveys of threatened species to support the previous natural values
assessment report were completed. These surveys will continue in CY2024.
o Stakeholder engagement activities continued, with initial engagement with all key stakeholders,
including the Environmental Protection Authority (“EPA”), completed.
o The socio-economic baseline assessment was validated through consultation with affected parties
and assessment of impacts.
o Further stakeholder engagement activities will be progressed over Q1 and Q2 CY2024.
o The Company is targeting a FID in 2026 with a 12-18 month construction window.
Near Mine Exploration
During the year a total of 6,474.6m of exploration diamond drilling was completed, of which 4,108.5m was
DHEM Phase 2 drilling, 1,972.7m was Ringrose follow-up (following S1671 discovery hole), 95.1m DHEM
Phase 3, and 298.3m Ringrose infill.
Mineralisation at Ringrose is located about 750m south of existing development and occurs over approximately
200m down dip and 250m strike length. Mineralisation is open to the north, south and at depth. Results from
the Ringrose follow-up exploration drilling were announced at the beginning of Q3 CY20233. The Company
expects to announce further Ringrose drilling results in Q1 CY2024. Drilling to continue in Q1 and Q2 CY2024.
3 Refer ASX announcement: 5 July 2023, Exploration Drilling Results
8
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
7.
Review of Operations (continued)
Further surface diamond drilling is continuing for the Down Hole Electro Magnetic (“DHEM”) phase 3 program
with five holes planned for 2,070m.
The DHEM survey was completed in Q4 CY2023 with 4 holes surveyed for 2,993m. A total of 161 stations for
8,000m line metres of surface Fixed-Loop Electromagnetic (“FLEM”) Survey was also completed in Q4
CY2023. A final report is expected in Q1 CY2024. Planning of a new FLEM survey along the northern extent
of the Federal Fault was completed in Q4 CY2023 with work expected to commence on the survey in Q1 and
Q2 CY2024.
During the year, two $70,000 Exploration Drilling Grant Initiative (“EDGI”) grants were awarded from the
Tasmanian Government to contribute to the drilling costs of testing the DC and Tunnel Hill targets.
Mine Resource Drilling Program
During the year, 50,272m of underground drilling was completed. Drilling included grade control from Area 5,
Heemskirk, Envelopes, and Central Federal Basset; Reserve definition drilling in Area 5, Huon north and
Leatherwood; geotechnical drilling from the Murchison Area.
In 2024 Renison’s planned underground drilling programs total 52,800m and will aim to expand mineral
resources further to the south, north, and depth than current extents. In addition to extensional drilling, grade
control drilling programs will be targeting planned mining activities to optimise mining outcomes with grade
definition drilling. Resource definition drilling will be targeting Regnans, Huon North, South Basset and Area
4, while infill drilling programs will be targeting lower Area 5, Hastings, CFB Upper, Area 4 and Leatherwood.
Definition drilling of the Ringrose prospect west of the Renison mine will also continue in 2024.
Renison Rehabilitation Update
During the year the BMTJV engaged a third party expert to update the mine closure cost estimate for Renison.
The update identified a significant increase in closure costs primarily in relation to demolition costs, and costs
in relation to tailings storage facility A, B, C and D. The Renison rehabilitation provision has increased to $32.44
million (31 December 2022: $9.79 million) resulting in an increase of $22.65 million (100% basis).
Rehabilitation provisions are estimated based on survey data, external contracted rates, and the timing of the
current mining schedule. Provisions are discounted based on rates that reflect current market assessments of
the time value of money and the risks specific to that liability. Refer to Note 18 for further information on the
rehabilitation provisions.
Mt Bischoff Project
Mt Bischoff has a rich history as a significant tin mine. Discovered in 1871, it produced approximately 60,000
tonnes of tin metal since the late 1800s. After being placed on care and maintenance in 2010, the mine is now
undergoing approval for rehabilitation and closure. An updated 90% rehabilitation plan is being prepared for
discussion with the authorities. The 90% design and closure plan are expected to be submitted to the Tasmania
EPA by 30 Nov 2024. Whilst the updated plan is being prepared, BMTJV performed a desktop review of the
provision in light of the updated rates for Renison. The update resulted in an increase in the Mt. Bishoff
rehabilitation provision to $21.18 million (31 December 2022: $17.00 million) resulting in an increase of $4.18
million (100% basis).
Renison Ore Reserve and Life of Mine update
Metals X announced its updated 2023 Renison Ore Reserve and Life of Mine Update4 highlighting a 10+ year
mine life from 2024 with an annual production average of 10,191t of recovered tin metal in concentrate with
the bulk of ore mined coming from the high-grade Area 5 and Leatherwood ore bodies.
Total Renison Bell Proved and Probable Reserve is 8.225 Mt at 1.48% Sn for 121,700 tonnes of contained tin.
The 2023 Resource estimate update5 for Renison on which the ore reserve is based highlighted total
measured, indicated and inferred resource at Renison Bell of 20 Mt at 1.54% Sn for 308,000 tonnes of
contained tin.
4 Refer ASX announcement 19 December 2023, Renison Ore Reserve and Life of Mine update
5 Refer ASX announcement 28 September 2023, Renison Mineral Resource update
9
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
8.
Corporate
Investments – Convertible Notes, Shares and Options
(i)
Cyprium Metals Limited
The Company continues to hold $36.00 million in aggregate in convertible notes issued by Cyprium with an
annual coupon rate of 4%. The convertible notes are valued at fair value through profit or loss refer at note 12
in the consolidated financial statements.
On 30 March 2023, the Company received the second annual payment of $1.44 million as settlement of the
4% coupon payable under the terms of the convertible notes issued by Cyprium.
The first and second tranche of Cyprium Options have expired out of the money on 30 March 2022 and 30
March 2023 respectively.
At 31 December 2023 the Cyprium convertible notes were fair valued at $14.00 million (31 December 2022:
$30.42 million) resulting in a fair value adjustment of $16.42 million. Refer to note 2 and 12 for further details
on the convertible note valuation.
Further details on the activities of Cyprium are available from their ASX releases.
(ii)
Nico Resources Limited
Following completion of the sale of the Company’s Nickel Asset portfolio to Nico Resources Limited (“NICO”)
(ASX: NC1) and subsequent IPO, the Company received 21,100,000 fully paid ordinary shares (“NICO
Shares”) and 25,000,000 Options (“NICO Options”). The investment in NICO is presented as an investment in
an associate at note 11 in the consolidated financial statements. The 25,000,000 options in NICO is presented
as a financial assets at fair value through profit or loss at note 12 in the consolidated financial statements.
Refer to note 2 for inputs used to value the NICO Options using a Black Scholes model at 31 December 2023.
During the year, the Company sold 8,000,000 NICO Shares for a consideration of approximately $3.99 million
(net of transaction costs).
On 19 September 2023, NICO announced a fully underwritten pro-rata non-renounceable entitlement offer of
one (1) new share for every five (5) shares at an issue price of $0.40 per new share. The Company took up
the whole of its pro-rata entitlement of 1,540,000 new shares for a consideration of $0.62 million after which
Metals X retained its interest of 8.46% in NICO.
At 31 December 2023, the Company continues to hold:
8,540,000 NICO Shares (unrestricted).
700,000 NICO Shares escrowed until 19 January 2024.
25,000,000 NICO Options, exercisable at $0.25 each, escrowed until 19 January 2024, expiring 3 years
after grant date, exercisable after 19 January 2024 and on or before 3 November 2024.
The Company is entitled to a 1.75% net smelter royalty on all metals produced from both the Wingellina Nickel-
Cobalt Project and the Claude Hills Project once in production.
(iii)
Tanami Gold NL
During the year, the Company purchased approximately 34.43 million shares (representing 2.93% of the
shares on issue) in Tanami Gold NL (“Tanami Gold”) (ASX:TAM) at an average price of approximately $0.034
cents per share for a cost of $1.17 million (net of transaction costs). The investment in Tanami Gold is
presented as an investment in associate at note 11 in the consolidated financial statements.
9.
Business Risks
The Group faces operational risks on a continuing basis. The Company has adopted policies and procedures
designed to manage and mitigate those risks wherever possible. However, it is not possible to avoid or even
manage all possible risks. Some of the operational risks are outlined below but the total risk profile, both known
and unknown, is more extensive.
Safety
LTI, serious workplace accidents or significant equipment failures may lead to harm to the Group’s employees
or other persons; temporary stoppage or closure of an operating mine; delays to production schedules and
disruption to operations; with material adverse impact on the business.
10
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
9.
Business Risks (Continued)
The Company continues to work closely with all stakeholders to promote continuous safety improvements and
Occupational Health and Safety (OH&S), with due consideration to evolving scientific knowledge and
technology, management practices and community expectations. The Group ensures it maintains compliance
with the applicable laws, regulations, and standards of the countries, it operates in by:
improving and monitoring OH&S performance;
training and ensuring its employees and contractors understand their obligations and are held
accountable for their responsibilities;
communicating and openly consulting with employees, contractors, government, and the community
on OH&S issues; and
developing risk management systems to appropriately identify, assess, monitor, and control hazards
in the workplace.
Production
The Group’s tin revenue for the year came from the BMTJV. The process recovery rate and production costs
are dependent on many technical assumptions and factors, including the geological, physical, and
metallurgical characteristics of ores. Any change in these assumptions and factors may have an adverse effect
on the Group’s production volume or profitability. Actual production may vary from expectation for a variety of
reasons, including grade and tonnage. Plant breakdown or availability and throughput restraints may also
affect the operation.
Permitting
The Group may encounter difficulties in obtaining all permits necessary for its exploration, evaluation, and
production activities at its existing operations or for pre-production assets. It may also be subject to ongoing
obligations to comply with permit requirements, which can incur additional time and costs.
Social and Political
The Group may face opposition from groups or individuals opposed to mining generally, or to specific projects,
resulting in delays or increased costs. Such opposition may also have adverse effects on the political climate
generally.
The Group is exposed to other risks which include, but are not limited to, cyber-attack, and natural disasters,
that could have varying degrees of impact on the Group and its operating activities. Where available and
appropriate to do so, the Board will seek to minimise exposure using insurance, while actively monitoring the
Group’s ongoing exposure. In addition, the Group’s awareness of the risks from political and economic
instability have been heightened by ongoing and recent geo-political events, which have contributed to an
increase in the costs of some key inputs.
10. Dividends
No dividends were paid to members during the year (31 Dec 2022: Nil).
The Directors do not propose to pay any dividend for the year.
11. Unissued Shares under Options
During the Reporting Period, no options were forfeited due to performance criteria not being achieved or
cessation of employment. As at the date of this report, there are no ordinary unissued shares under option (31
Dec 2022: Nil).
There were no shares issued under option in the Company since the Reporting Period.
12. Significant Events After Balance Date
There are no significant events after balance date as at the date of this report.
11
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
13. Business Strategies, Prospects and Capital Allocation
The Company continues to evaluate potential acquisitions both domestically and internationally. The principal
focus of the Company is Tin; however, the Board has reviewed and will continue to review analogous base
metal and gold opportunities that possess geological similarities or geographical synergies.
Along with maintaining a cash balance that will allow growth by acquisition, the Company is committed to
supporting the BMTJVs progress on Rentails. The Board considers the Rentails project more attractive than
any of the potential acquisitions. While the funding structure for the Rentails project has not been finalised, the
Company continues to build its cash reserves to allow a commitment to fund its share of the project to be
made.
Additionally, the Company is committed to optimising returns from its financial instruments and shareholdings
in NICO, Cyprium and Tanami Gold.
14. Environmental, Social and Governance
The Company owns a 50% interest in the Renison Tin Operation, through its 50% stake in the BMTJV, which
is subject to the relevant environmental protection legislation (Commonwealth and State legislation). The
Group 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 mining and
exploration activities and the storage of hazardous substances.
The Board retains overall responsibility for the Group’s Environmental, Social and Governance (“ESG”)
performance and is committed to operating in a manner that contributes to the sustainable development of
mineral resources through efficient, balanced, long-term management, while showing due consideration for
the well-being of people; protection of the environment; and development of local community.
The Group recognises its responsibility for minimising the impact of its activities on, and protecting, the
environment. The Group is committed to developing and implementing sound practices in environmental
design and management and actively operates to:
work within the legal permitting framework and operate in accordance with our environmental
management systems;
identify, monitor, measure, evaluate and minimise our impact on the surrounding environment;
give environmental aspects due consideration in all phases of the Groups mining projects, from
exploration through to development, operation, production, and final closure; and
act systematically to improve the planning, execution, and monitoring, of its environmental
performance.
There have been no material breaches of the Group’s licenses and all mining and exploration activities have
been undertaken in compliance with the relevant environmental regulations.
The Company’s has established an ESG Reporting framework consisting of five commitments developed “with
reference to” the Global Reporting Initiative Standards (“GRI”) (Foundation 2021) (“GRI Standards”) which
have been endorsed by the Board.
The Company’s 2023 ESG Report will be announced with the 31 December 2023 annual report, and made
available on the Company’s website at www.metalsx.com.au/ environment-social-and-governance/.
15. 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 https://www.metalsx.com.au/aboutus/ corporate-governance/.
12
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
16. Remuneration Report - Audited
The Directors of Metals X present the Remuneration Report (the Report) for the year ended 31 December
2023 . 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.
This Report details the remuneration arrangements for the Company’s Key Management Personnel (“KMP”)
defined as those who directly or indirectly, have authority and responsibility for planning, directing, and
controlling the major activities of the Group, including any Director (whether executive or otherwise) and
Executives of the Company.
The table below outlines the KMP of the Company and their movements during the year:
Name
Mr Peter Gunzburg
Mr Brett Smith
Mr Patrick O’Connor
Mr Grahame White
Mr Daniel Broughton
Position
Independent non-executive Chairman
Executive director
Independent non-executive director
Independent non-executive director
Chief financial officer
Term as KMP
Full financial year
Full financial year
Full financial year
Full financial year
Full financial year
There were no other changes to KMP during this year.
16.1 Remuneration Policy
The Board recognises that the Company’s performance depends upon the quality of its Directors and
Executives. To achieve its financial and operating activities, the Company must attract, motivate, and retain
highly skilled Directors and Executives.
The Company embodies the following principles in its remuneration framework:
Provides competitive rewards to attract high calibre Directors and Executives;
Structures remuneration at a level that reflects the Executive’s duties and accountabilities and is
competitive within Australia;
Benchmarks remuneration against appropriate industry groups; and
Aligns Executive incentive rewards with the creation of value for shareholders.
Performance related Executive remuneration, including cash bonuses, are based on the Company’s and
individual performance, and are determined at the Board’s discretion.
16.2 Company Performance
The table below shows the Company’s financial performance over the last five reporting periods.
Performance summary
31 Dec 2023
6 months to
31 Dec 2022
30 Jun 2022
30 Jun 2021
30 Jun 2020
Closing share price
$0.29
$0.39
$0.34
$0.21
$0.08
Profit/(loss) per share from
continuing operations (cents
per share)
Net assets per share
Total shareholder return
Dividend paid per share
(cents)
1.61
1.10
19.44
2.53
(1.46)
$0.37
(25%)
-
$0.35
15%
-
$0.34
62%
-
$0.15
172%
-
$0.06
(68%)
-
16.3 Remuneration and Nomination Committee Responsibility
The Remuneration and Nomination Committee (the “Remuneration Committee”) is a subcommittee of the
Board and is responsible for making recommendations to the Board on KMP remuneration, and the KMP
remuneration framework and incentive plan policies.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of
KMP 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 KMP.
To ensure the Remuneration Committee is fully informed when making remuneration decisions, it can seek
external remuneration advice. No external consultants were utilised during the year.
13
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
16. Remuneration Report – Audited (continued)
16.4 Remuneration of Non-Executive Directors
The Company’s Non-Executive Director 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 aggregate remuneration of Non-
Executive Directors, 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 remuneration paid to Non-Executive Directors is reviewed annually, within the aggregate
fee pool limit approved by shareholders.
16.5 Remuneration of Executives
In determining Executive remuneration, the Remuneration Committee 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.
16.6 Executive Remuneration Structure
The Company’s remuneration structure provides for a combination of fixed and variable pay with the following
components fixed remuneration and short-term incentives (“STI”).
The Company does not currently consider the issue of long-term incentive (“LTI”) to Directors and Executives
to be appropriate.
16.7 Fixed Remuneration
Fixed remuneration consists of base salary, superannuation and other non-monetary benefits designed to
reward for:
the scope of the Executive’s role;
the Executive’s skills, experience, and qualifications; and
individual performance.
16.8 Performance Linked Compensation – STI
Directors and Executives may have an STI component included in their remuneration package representing a
meaningful “at risk” STI payment. The payment will be “at risk” in that it will only be payable if a set of clearly
defined and measurable performance metrics or Key Performance Indicators (“KPI”) have been met in the
applicable performance period. The KPI’s may include a combination of company KPI’s and individual KPI’s.
The Board must set KPI’s that are based on metrics that are measurable, transparent, and achievable,
designed to motivate and incentivise the recipient to achieve high performance, and are aligned with the
Company’s short-term objectives and shareholder value creation. The board retains discretion to assess
performance during the period.
14
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
16. Remuneration Report – Audited (continued)
16.8 Performance Linked Compensation – STI (continued)
Under the STI plan, 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?
The STI, if achieved, will be paid annually in cash depending on the eligible
employee’s employment contract. STI opportunities will vary from employee to
employee depending on role and responsibility and will be set out in Executives
employment contract.
How much can
Executives earn?
The maximum STI award for the Executive Director for the year is $315,000
and represents 67% of the total fixed remuneration (“TFR”) being subject to
performance related criteria.
How is performance
measured?
When is it paid?
What happens if an
Executive leaves?
A combination of personal and business KPIs are chosen to reflect the core
drivers of short-term performance and also to provide a framework for
delivering sustainable value to the Group 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 STI award is determined after the end of the performance period following
a review of performance over the period against the STI performance
measures at the discretion of the Remuneration 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 Group:
• due to resignation or termination for cause, before the end of the performance
period, 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
period.
• 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).
15
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
16. Remuneration Report – Audited (continued)
16.8 Performance Linked Compensation – STI (continued)
The STI award threshold for the Directors and Executives are subject to annual review of the Board of
Directors. KPIs will be set annually as part of the annual business planning cycle and are targeted to be
finalised no later than the 31 January of each calendar year as follows:
KPIs for the Company and Executive Director are set and approved by the Board;
KPIs will be reviewed by the Board to ensure that hurdles are objectively measurable and aligned with
Company strategy; and
KPI achievement may be subject to ‘gate way’ tests as itemised for a particular KPI (for example,
irrespective of performance, a safety KPI will not be deemed achieved in the event that the Company
experiences a fatality).
Discretionary bonus for Senior Executives are set by the Executive Director and approved by the Board.
KPI Targets and Stretch Targets will generally be aligned with the Company’s strategic plan and may include
health, safety and environmental metrics, financial metrics, delivery of projects and growth initiatives,
sustainability initiatives and improvements to Company systems and processes. KPI Targets are not the same
as Budget Targets. Philosophically, employees are paid their TFR for delivering budget performance and are
paid “at risk” compensation for delivering better than budget performance. Stretch performance should be a
level beyond this. Targets and Stretch Targets will be developed as part of the Annual Business Planning
Cycle. The Board is responsible for the determination of whether the KPI Targets or Stretch Targets have been
achieved and how much of the STI will be payable for each performance period. In making such determination
it may obtain external expert advice.
STI Performance and Outcomes for the year:
Key Performance
Indicators
Performance
Measure
Value (% STI)
Actual
Result
Safety
Total Reportable
Injury Frequency
Rate (TRIFR)
Fatalities
Renison Operations
(100% basis)
Tin Production
Cash Production
Cost
Free cashflow to
Renison
Less Than 7
10%
5.6
> zero
Total STI equal zero
Zero
10%
N/A
> 10,676t +/-
10%
< $14,301/t +/-
10%
Greater than
A$53M +/- 10%
20-40% at board
discretion
20-40% at board
discretion
15-25% at board
discretion
9,532 t
20%
$17,696 / t
Zero
A$79M
25%
Corporate
Sale of NICO shares
Greater than
A$0.40/share
10%
A$0.50/share
10%
Consequently, the Remuneration Committee recommended the following remuneration for the Executive
Director for the year:
Total Fixed Remuneration: $467,500
Maximum STI:
$315,000 (being 67% Total fixed remuneration)
Awarded STI:
$204,750 (being 65% of the maximum available STI)
16
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
16. Remuneration Report – Audited (continued)
16.9 Executive Employment Arrangements and Service Contracts
Compensation and other terms of employment for KMP are formalised in contracts of employment. The major
provisions of each of the agreements relating to compensation are set out below.
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
Directors
Mr Peter Gunzburg
Mr Brett Smith
Mr Patrick O’Connor
Mr Grahame White
Executives
Mr Daniel Broughton1
Fixed
Remuneration
Maximum
variable
STI
Super-
annuation
Notice
period
(months)
Maximum
termination
payment
(months)
$110,000
$467,500
$80,000
$90,000
-
$315,000
-
-
$110,500
-
11%
11%
11%
11%
11%
-
6
-
-
-
-
6
-
-
-
1 Mr Daniel Broughton provides Chief Financial Officer services under a separate service agreement between
Dragon Mining Limited and Metals X.
16.10 Equity Instruments
No options over ordinary shares in the Company were granted as compensation to KMP during the year and
no options vested during the year.
16.11 Modifications of Terms of Equity-Settled Share-Based Payment Transactions
No terms of equity-settled share-based payment transactions (including options and rights granted as
compensation to KMP) have been altered or modified by the issuing entity during the year.
16.12 Exercise of Options Granted as Compensation
During the year, no shares were issued on the exercise of options previously granted as compensation to
KMP.
16.13 Analysis of Options and Rights Over Equity Instruments Granted as Compensation
No options have been issued, granted, or will vest to KMP personnel of the Company.
16.14 Analysis of movements in options and rights
There were no options granted during the year.
16.15 Shareholdings of Directors and Key Management Personnel
Ordinary Fully Paid Shares
Balance
1 Jan 2023
Granted as
Remuneration
Net Change
Other
Balance
31 Dec 2023
Directors
Mr Peter Gunzburg
Mr Brett Smith
Mr Patrick O’Connor
Mr Grahame White
Executives
Mr Daniel Broughton
Total
-
250,000
1,000,000
-
-
1,250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
1,000,000
-
-
1,250,000
17
16.16 Directors and Executive Officers Remuneration
The following table details the components of remuneration for KMP of the Company, for the year ended 31 December 2023
In dollars
Directors
Mr Peter Gunzburg
(Non-Executive Chairman)
Mr Brett Smith
(Executive Director)
Mr Grahame White
(Non-Executive Director)
Mr Patrick O'Connor
(Non-Executive Director)
Total all specified Directors
Specified Executives
Mr Daniel Broughton 1
(Chief Financial Officer)
Total all named Executives
Total all specified Directors and
Executives
Salary &
Fees
AUD
110,000
55,000
467,500
254,753
90,000
45,000
80,000
40,000
747,500
394,753
123,197
55,000
123,197
55,000
870,697
449,753
Dec 2023
Dec 2022
Dec 2023
Dec 2022
Dec 2023
Dec 2022
Dec 2023
Dec 2022
Dec 2023
Dec 2022
Dec 2023
Dec 2022
Dec 2023
Dec 2022
Dec 2023
Dec 2022
Short-Term
Long-Term
Benefits
Post-
Employment
Share
Based
Payments
Non-Monetary
Benefits
AUD
STI and
Bonuses
AUD
Employee
Entitlements
AUD
Super-
annuation
Benefits
AUD
Termination
Payments
Options
AUD
AUD
Total
Emoluments
AUD
Proportion of
Remuneration
Performance
Related
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
204,750
90,000
-
-
-
-
204,750
90,000
20,000
-
20,000
-
224,750
90,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,825
5,775
72,473
26,749
9,675
4,725
8,600
4,200
102,572
41,449
15,444
-
15,444
-
118,016
41,449
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
121,825
60,775
753,722
371,502
99,675
49,725
88,600
44,200
1,054,823
526,202
158,640
55,000
158,640
55,000
1,213,463
581,202
-
-
27%
24%
-
-
-
-
19%
17%
13%
-
13%
-
19%
15%
1 Mr Daniel Broughton provides Chief Financial Officer services under a separate service agreement between Dragon Mining Limited and Metals X. During the year Mr Daniel Broughton provided additional services outside the scope of
the service agreement, resulting in fees in excess of the $110,000 agreement. Mr Daniel Broughton received a non-variable $20,000 bonus at the discretion of the Board.
18
DIRECTORS’ REPORT (continued)
For the year ended 31 December 2023
17.
Indemnification and Insurance of Directors, Officers, and Auditors
The Company provides Directors’ and Officers’ liability insurance covering Directors’ and Officers of the
Company against liability in their role with the Company, except where:
the liability arises out of conduct involving a wilful breach of duty; or
there has been a contravention of Sections 232(5) or (6) of the Corporations Act 2001.
The Directors’ have not included details of the nature of the liabilities covered or the amount of the premium
paid in respect of this insurance, as such disclosure is prohibited under the terms of the contract.
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 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 year end.
18. Lead Auditor’s Independence Declaration
The Directors have received confirmation from the auditor of Metals X that they are independent of the
Company.
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001
is included on page 61 of this report.
19. 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 22 of the consolidated financial statements):
Tax compliance services $0.045 million.
20. Rounding
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000
(unless otherwise stated), and where noted ($’000) under the option available to the Company under ASIC
Corporations (Rounding in Financial/Directors Report) Instrument 2016/191. The Company is an entity to
which the instrument applies.
Signed in accordance with a resolution of the Directors.
Brett Smith
Executive Director
29 February 2024
19
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
General and administrative expenses
Commodity and foreign exchange gain
Finance costs
Fair value loss on financial assets
Share of loss of associates
Rehabilitation costs
Profit before tax
Income tax expense
Profit for the period from continuing operations
Profit attributable to:
Members of the parent
Notes
3
5(a)
4
5(b)
5(c)
5(d)
5(e)
11
17
6
12 months to
31 Dec 2023
$'000
153,781
(105,155)
48,626
6 months to
31 Dec 2022
$'000
66,682
(50,400)
16,282
9,597
(3,804)
-
(877)
(23,637)
(960)
(2,126)
26,819
(12,234)
14,585
1,453
(1,564)
11
(228)
(2,005)
-
-
13,949
(3,983)
9,966
14,585
9,966
Total comprehensive income attributable to:
Members of the parent
14,585
9,966
Basic earnings and diluted earnings per share
attributable to the ordinary equity holders of the
parent (cents per share)
From continuing operations
7
1.61
1.10
As a result of the financial year change from 30 June to 31 December, the comparative reporting period is for
the 6 months to 31 December 2022. Consequently, the amounts presented in the consolidated statement of
comprehensive income are not directly comparable.
20
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2023
At
31 Dec 2023
$'000
At
31 Dec 2022
$'000
Notes
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Convertible note receivable
Derivative financial instruments
Total current assets
Non-current assets
Other receivables
Convertible note receivable
Investment in associate
Property, plant, and equipment
Mine properties and development
Exploration and evaluation expenditure
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Interest bearing liabilities
Total current liabilities
Non-current liabilities
Provisions
Interest bearing liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Share based payments reserve
Total equity
8
9
10
12
12
9
12
11
13
14
15
6
16
17
18
17
18
19
20
21
143,042
15,686
28,591
1,604
1,080
3,625
113,929
16,331
22,949
1,160
1,080
10,842
193,628
166,291
3,457
12,923
2,374
74,084
79,811
352
26,307
199,308
392,936
16,400
6,407
4,030
26,837
27,539
4,327
31,866
58,703
3,457
29,343
3,140
68,073
45,999
352
38,541
188,905
355,196
13,104
4,529
1,930
19,563
14,576
1,409
15,985
35,548
334,233
319,648
319,570
(13,152)
27,815
334,233
319,570
(27,737)
27,815
319,648
21
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
Notes
12 months to
31 Dec 2023
$'000
6 months to
31 Dec 2022
$'000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Other receipts
Interest paid
Net cash flows from operating activities
8
Cash flows from investing activities
Payments for property, plant, and equipment
Payments for mine properties and development
Payments for investment in associate
Proceeds from sale of investment in associate
Proceeds from sale of property plant and equipment
149,162
(90,848)
6,846
38
(338)
64,860
(13,035)
(21,891)
(1,794)
4,000
70
54,209
(43,372)
826
19
(124)
11,558
(10,837)
(8,001)
-
-
-
Net cash flows used in investing activities
(32,650)
(18,838)
Cash flows from financing activities
Payment of lease and hire purchase liabilities
Net cash flows from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash at the beginning of the period
Cash and cash equivalents at the end of the period
8
(3,097)
(3,097)
29,113
113,929
143,042
(1,039)
(1,039)
(8,319)
122,248
113,929
As a result of the financial year change from 30 June to 31 December, the comparative reporting period is for
the 6 months to 31 December 2022. Consequently, the amounts presented in the consolidated statement of
cash flows are not directly comparable.
22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
At 1 July 2022
Profit for the 6 month period
Total comprehensive profit for the 6 month period
Issued capital
Accumulated
losses
Share based
payments reserve
Total Equity
$'000
319,570
-
-
$'000
(37,703)
9,966
9,966
$'000
27,815
-
-
$'000
309,682
9,966
9,966
At 31 December 2022
319,570
(27,737)
27,815
319,648
At 1 January 2023
Profit for the year
Total comprehensive profit for the year
At 31 December 2023
319,570
-
-
319,570
(27,737)
14,585
14,585
(13,152)
27,815
-
-
27,815
319,648
14,585
14,585
334,233
As a result of the financial year change from 30 June to 31 December, the comparative reporting period is for the 6 months to 31 December 2022. Consequently, the amounts
presented in the consolidated statement of changes in equity are not directly comparable.
23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2023
1.
Corporate Information and Summary of Accounting Policies
The consolidated financial report of Metals X Limited (“Metals X” or the “Company”) for the year ended 31 December
2023 was authorised for issue in accordance with a resolution of the Directors on 29 February 2024.
The Company was incorporated and domiciled in Australia and is a for profit company limited by shares which are
publicly traded on the Australian Securities Exchange. The consolidated financial statements comprise the financial
statements of the Parent and its subsidiaries (the “Group”). Both the functional and presentation currency of the
Group is Australian dollars (A$). The Company’s registered office address is Unit 202, Level 2, 39 Mends Street,
South Perth WA 6151.
a)
Basis of preparation of the consolidated financial report
The consolidated 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 Company’s consolidated financial report is for the year ended 31 December 2023 (the “Reporting Period”). As a
result of the financial year change from 30 June to 31 December, the comparative reporting period is for the 6 months
ended 31 December 2022. Consequently, the amounts presented in the consolidated financial statements are not
directly comparable.
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the assets, and obligations for the liabilities, relating to the arrangement. The Group has recognised its share of jointly
held assets, liabilities, revenues, and expenses of joint operations. These have been incorporated in the consolidated
financial statements under the appropriate classifications.
The consolidated 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 consolidated financial statements have
been rounded to the nearest thousand dollars unless otherwise stated (where rounding is applicable) under the option
available to the Group under ASIC Corporations (Rounding in Financial Report) Instrument 2016/191.
b)
Statement of compliance
The consolidated financial report complies with Australian Accounting Standards as issued by the Australian
Accounting Standards Board (“AASB") and International Financial Reporting Standards (“IFRS”) as issued by the
International Accounting Standards Board.
c)
New and amended accounting standards and interpretations
Since 1 January 2023, the Group has adopted all Accounting Standards and Interpretations effective from 1 January
2023. The accounting policies adopted are consistent with those of the previous financial year. The Group has not
early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
d)
Changes in accounting policies and disclosures
Certain new and amended accounting standards and interpretations have been issued that are not mandatory for
31 December 2023 reporting periods. These standards and interpretations have not been early adopted. The
Company has performed a preliminary assessment of the standards and interpretations below and anticipates no
material impact on the balances and transactions presented in these consolidated financial statements when they
come into effect.
AASB 2014-10 Amendments to AASs Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture. Effective for annual reporting periods beginning on or after 1 January 2025.
The amendments to AASB 10 Consolidated Financial Statements and AASB 128 Investments in Associates and
Joint Ventures 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 3Business Combinations. Any gain or loss resulting from the sale or contribution of
assets that does not constitute a business, however, is recognised only to the extent of unrelated investors’ interests
in the associate or joint venture. These amendments are applied prospectively.
Earlier application is permitted.
24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
1.
d)
Corporate Information and Summary of Accounting Policies (continued)
Changes in accounting policies and disclosures (continued)
AASB 2022-5 Amendments to AASs Lease Liability in a Sale and Leaseback. Effective for annual reporting periods
beginning on or after 1 January 2024.
In a sale and leaseback transaction recognised as a sale under AASB 15 Revenue from Contracts with Customers,
AASB 16 requires the seller-lessee to measure the right-of-use asset arising from the leaseback at the proportion of
the previous carrying amount of the asset that relates to the right of use retained by the seller-lessee. The standard,
however, does not specify how the liability arising in a sale and leaseback is measured. This impacts the
measurement of the right-of-use asset and could result in recognition of a gain or loss on the right-of-use asset
retained. Of particular concern is the impact of excluding from the lease liability, variable lease payments that do not
depend on an index or rate.
The issue has been addressed in the amendment, which specifies that the seller-lessee measures the lease liability
arising from the leaseback in such a way that they would not recognise any gain or loss on the sale and leaseback
relating to the right-of use asset retained.
The amendment does not prescribe specific measurement requirements for the lease liability arising from a
leaseback. The seller-lessee will need to establish an accounting policy that results in information that is relevant and
reliable in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.
The amendment, however, includes examples illustrating the initial and subsequent measurement of the lease liability
in a sale and leaseback transaction with variable lease payments that do not depend on an index or rate. The
amendment may represent a significant change in accounting policy for entities that enter into sale and leaseback
transactions with such variable payments.
The amendment to AASB 16 is applied retrospectively to sale and leaseback transactions entered into after the
beginning of the annual reporting period in which an entity first applied AASB 16.
Earlier application of the amendment is permitted.
AASB 2020-1 Amendments to AASs Classification of Liabilities as Current or Non-current Effective for annual
reporting periods beginning on or after 1 January 2024.
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 issued AASB 2020-1 Amendments to AASs Classification of
Liabilities as Current or Non-current to clarify the requirements for classifying liabilities as current or noncurrent,
specifically:
The amendments specify that 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 the classification of liabilities.
In cases where an instrument with a conversion option is classified as a liability, the transfer of equity
instruments would constitute settlement of the liability for the purpose of classifying it as current or non-
current.
A consequence of the first amendment is that a liability would be classified as current if its repayment conditions
failed their test at reporting date, despite those conditions only becoming effective in the 12 months after the end of
the reporting period.
In response to this possible outcome, in December 2022 the AASB issued AASB 2022-6 Amendments to
AASs - Non-current Liabilities with Covenants:
Clarifying that only covenants with which an entity must comply on or before the reporting date will affect a
liability’s classification as current or noncurrent;
Adding presentation and disclosure requirements for non-current liabilities subject to compliance with future
covenants within the next 12 months; and
Clarifying specific situations in which an entity does not have a right to defer settlement for at least 12 months
after the reporting date. These amendments are applied retrospectively.
Earlier application is permitted.
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
1.
Corporate Information and Summary of Accounting Policies (continued)
e) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 31 December 2023.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and can affect those returns through its power over the investee. Specifically, the Group controls an investee
if and only if the Group 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 Group has less than a majority of the voting or similar rights of an investee, the Group 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; and
the Group’s voting rights and potential voting rights.
The Group re-assesses whether 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 Group obtains control
over the subsidiary and ceases when the Group 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 Group gains control until the date the Group 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 Group 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 Group’s accounting policies. All intra-Group assets and liabilities, equity, income, expenses,
and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
f) 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 are taken to the consolidated statement of comprehensive income.
g)
Other accounting policies
Significant and other accounting policies that summarise the measurement basis used and are relevant in
understanding of the consolidated financial statements are provided throughout the notes to the consolidated
financial statements.
h)
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 amount of time to prepare 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.
i)
Goods and service 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 consolidated statement of financial position. Cash flows are included in the consolidated 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.
26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
1.
j)
Corporate Information and Summary of Accounting Policies (continued)
Joint arrangements
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 Group 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 Group 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 Group 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 Group’s share of the net assets of the joint
venture.
k)
Investment in associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control over those
policies.
The considerations made in determining significant influence are similar to those necessary to determine control over
subsidiaries. The Group’s investment in its associate are accounted for using the equity method.
Under the equity method, the investment in an associate or a joint venture is initially recognised at cost. The carrying
amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate since
the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not
tested for impairment separately.
The consolidated statement of comprehensive income reflects the Group’s share of the results of operations of the
associate. Any change in other comprehensive income (“OCI”) of those investees is presented as part of the Group’s
OCI. In addition, when there has been a change recognised directly in the equity of the associate, the Group
recognises its share of any changes, when applicable, in the consolidated statement of changes in equity. Unrealised
gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the
interest in the associate.
The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the consolidated statement
comprehensive income outside operating profit and represents profit or loss after tax and non-controlling interests in
the subsidiaries of the associate. The financial statements of the associate are prepared for the same reporting period
as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss
on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence
that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of
impairment as the difference between the recoverable amount of the associate and its carrying value, and then
recognises the loss within “share of loss of an associate” in the consolidated statement of comprehensive income.
Upon loss of significant influence over the associate, the Group measures and recognises any retained investment
at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and
the fair value of the retained investment and proceeds from disposal is recognised in the consolidated statement of
comprehensive income.
27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
1.
l)
Corporate Information and Summary of Accounting Policies (continued)
Significant accounting judgements, estimates and assumptions
The preparation of the consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the consolidated 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, independent experts, 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 consolidated
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.
Note
Revenue – note 3
Property, plant and equipment and
depreciation – note 13
Mine property and development and
amortisation – note 14
Key estimate or judgement
Identification of the enforceable contract.
Identification of performance obligations for arrangements subject
to CIF Incoterms.
Life of mine method of depreciation provided incorporating
residual values and useful lives.
Determination of mineral resources and ore reserves.
Life of mine method of amortisation based on units of production
(“UOP”) resulting in an amortisation charge proportional to the
depletion of the economically recoverable mineral reserves.
Impairment of capitalised mine development expenditure.
Estimate of future capital development expenditure.
Provisions – note 17
Future cash flows (amounts and timing) required to rehabilitate.
Discount rate.
Convertible notes receivable
Derivative financial instruments – note
2(g) and 12.
Share price volatility.
Determination of forecast commodity prices.
Market interest rate.
Credit risk.
Investment in an associate – note 11
Determination on whether the Group has significant influence in
the policy making process of the investee.
Deferred tax asset – note 6
Determination of future taxable income.
2.
Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise receivables, payables, lease liabilities, cash and short-term
deposits, derivative financial instruments, convertible notes, and equity investments.
Risk exposures and responses
The Group manages its exposure to key financial risks in accordance with the Group’s financial risk management
policy. The objective of the policy is to support the delivery of the Group’s financial targets while protecting future
financial security.
The Group may enter derivative transactions, principally forward commodity swaps, from time to time, to manage
the commodity price risks arising from the Group’s operations. The Group did not have any derivative transactions
of these types as at 31 December 2023 (31 December 2022: nil). Historically, 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 Group’s financial instruments are interest rate risk, foreign currency risk, commodity
risk, credit risk, equity price risk and liquidity risk. The Group 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 and monitoring of receivables are undertaken to manage credit risk, liquidity risk is monitored
through the development of future rolling cash flow forecasts.
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
2.
Financial Risk Management Objectives and Policies (continued)
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and
agrees policies for managing each of the identified risks, 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 consolidated financial statements.
The accounting classification of each category of financial instruments, as defined in the notes to the consolidated
financial statements, and their carrying amounts, are set out below:
a)
Interest rate risk
The Group’s exposure to risks of changes in market interest rates relate primarily to the Group’s interest-bearing
liabilities, trade receivables at fair value through the profit and loss, financial assets at fair value through profit or
loss, convertible note receivables, other receivables, and cash balances. The Group’s policy is to manage its interest
cost using fixed rate debt where possible.
The Group regularly reviews 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 31 December 2023, if interest rates had moved by a reasonably possible 1.50% (31 December 2022: 1.50%) as
illustrated in the table below, with all other variables held constant, post-tax profits and equity would have been
affected as follows:
Judgement of reasonably possible movements:
+ 1.50% (150 basis points)
- 1.50% (150 basis points)
Judgement of reasonably possible movements:
+ 1.50% (150 basis points)
- 1.50% (150 basis points)
Post tax profit
higher/(lower)
31 Dec 2023
$’000
1,426
(1,426)
31 Dec 2022
$’000
1,303
(1,303)
A sensitivity of +1.50% or -1.50% has been selected as this is considered reasonable given the current level of short-
term and long-term interest rates. The movements in profit are due to possible higher or lower interest payable or
receivable from variable rate interest bearing loans and cash balances.
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
2.
Financial Risk Management Objectives and Policies (continued)
At balance date, the Group’s exposure to interest rate risk for classes of financial assets and financial liabilities is set
out below.
31 December 2023 ($’000)
Financial assets
Cash and cash equivalents
Trade receivables at fair value
through the profit and loss
Convertible note receivables
Financial assets at fair value
through profit or loss
Other receivables
Financial liabilities
Trade and other payables
Interest bearing liabilities
Floating
interest
143,042
-
-
-
3,457
146,499
-
-
-
Net financial assets/(liabilities)
146,499
31 December 2022 ($’000)
Financial assets
Cash and cash equivalents
Trade receivables at fair value
through the profit and loss
Convertible note receivables
Financial assets at fair value
through profit or loss
Other receivables
Financial liabilities
Trade and other payables
Interest bearing liabilities
Floating
interest
113,929
-
-
-
3,457
117,386
-
-
-
Net financial assets/(liabilities)
117,386
Fixed
Interest
Non-interest
bearing
Total carrying
amount
-
-
13,979
-
-
-
143,042
12,368
24
3,625
-
12,368
14,003
3,625
3,457
13,979
16,017
176,495
-
(16,400)
(8,357)
(8,357)
5,622
-
(16,400)
(383)
(16,400)
(8,357)
(24,757)
151,738
Fixed
interest
Non-interest
bearing
Total carrying
amount
-
113,929
-
-
27,382
-
-
27,382
9,175
3,041
10,842
-
23,058
-
(11,472)
(3,339)
(3,339)
24,043
-
(11,472)
11,587
9,175
30,423
10,842
3,457
167,826
(11,472)
(3,339)
(14,811)
153,016
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
2.
b)
Financial Risk Management Objectives and Policies (continued)
Credit risk
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The
Group’s maximum exposures to credit risk at reporting date in relation to each class of financial asset is the carrying
amount of those assets as indicated in the consolidated statement of financial position.
Credit risk is managed on a Group basis. Credit risk predominantly arises from cash, cash equivalents, derivative
financial instruments, deposits with banks and financial institutions, trade receivables and convertible note
receivables.
The Group has in place policies that aim to ensure that derivative counterparties and cash transactions are limited
to high credit quality financial institutions and that the amount of credit exposure to any one financial institution is
limited as far as is considered commercially appropriate. The credit quality of financial assets that are neither past
due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information
about counterparty default rates:
Cash and cash equivalents and other financial assets are held with Australian Banks with an AA- credit rating
(Standard & Poor’s). Significant concentrations of credit risk are in relation to cash and cash equivalents with
Australian banks. Receivable balances are monitored on an ongoing basis with the result that the Group does not
have a significant exposure to bad debts.
The Group does not hold any credit derivatives to offset its credit exposure.
The Group 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 Group’s policy to securitise its trade and other loans and
receivables. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers
are in several jurisdictions and operate in largely independent markets.
At 31 December 2023, the Group had two customers (31 December 2022: three customers) that each owed the
Group $8,446,173 and $3,919,360 respectively (31 December 2022: $3,875,350, $3,083,716 and $2,216,352
respectively) and accounted for approximately 100% (31 December 2022: 100%) of all trade receivables owing.
At 31 December 2023, there are no trade receivables at amortised cost that are past due (31 December 2022: Nil).
At 31 December 2023 The Company continues to hold $36.00 million in aggregate in convertible notes issued by
Cyprium with an annual coupon rate of 4%. The convertible notes are valued at fair value through profit or loss refer
at note 12 in the consolidated financial statements. The Cyprium convertible notes were fair valued at $14.00 million
(31 December 2022: $30.42 million) resulting in a fair value adjustment of $16.42 million. The valuation was
comprised of a credit risk adjustment of 62.5% Refer to note 2 and 12 for further details on the convertible note
valuation.
c)
Equity security price risk
The Group’s income may be exposed to equity security price fluctuations arising from investments in equity securities
and the options available to the Group.
At the balance date the group had the following exposure to equity price risk:
Cyprium convertible notes
NICO options
Cyprium options
31 Dec 2023
$’000
14,003
31 Dec 2022
$’000
30,423
3,625
-
17,628
10,625
217
41,265
At 31 December 2023, if the underlying equity price in NICO and Cyprium 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:
Judgement of reasonably possible movements:
Equity price +10%
Equity price -10%
Post tax profit
higher/(lower)
31 Dec 2023
$’000
31 Dec 2022
$’000
707
(674)
1,441
(1,355)
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
2.
d)
Financial Risk Management Objectives and Policies (continued)
Foreign currency risk
As a result of tin concentrate sales receipts being denominated in US dollars, the Group’s cash flows can be affected
by movements in the US dollar/Australian dollar exchange rate.
At the balance date the Group had the following exposure to US dollar foreign currency:
Trade and other receivables
31 Dec 2023
$’000
12,368
31 Dec 2022
$’000
9,175
At 31 December 2023, if foreign currency rates had moved by a reasonably possible 10%, as illustrated in the table
below, with all other variables held constant, post tax profits and equity would have been affected as follows:
Judgement of reasonably
possible movements:
A$/US$ Rate +10%
A$/US$ Rate -10%
Post tax profit
higher/(lower)
Other comprehensive income
higher/(lower)
31 Dec 2023
$’000
31 Dec 2022
$’000
31 Dec 2023
$’000
31 Dec 2022
$’000
866
(866)
642
(642)
-
-
-
-
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.
e)
Commodity price risk
The Group is exposed to movements in the tin price. As part of the risk management policy of the Group, a variety
of financial instruments (such as forward commodity swaps) may be used from time to time to reduce exposure to
unpredictable fluctuations in the project life revenue streams. At 31 December 2023, the Group did not hold any
commodity derivatives (31 December 2022: Nil).
At balance date, the Group had the following exposure to commodity price risk:
Open invoices subject to quotational pricing
At
31 Dec 2023
$’000
3,919
At
31 Dec 2022
$’000
4,168
At 31 December 2023, if commodity price 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:
Judgement of reasonably
possible movements:
Tin Price +10%
Tin Price -10%
f)
Liquidity risk
Post tax profit
higher/(lower)
Other comprehensive income
higher/(lower)
31 Dec 2023
$’000
31 Dec 2022
$’000
31 Dec 2023
$’000
31 Dec 2022
$’000
416
(416)
308
(308)
-
-
-
-
Liquidity risk arises from the financial liabilities of the Group and the subsequent ability to meet the obligations to
repay the financial liabilities as and when they fall due.
The Group’s objective is to maintain a balance between continuity of funding and flexibility using finance and hire
purchase leases.
The tables below reflect all contractually fixed payables for settlement repayment resulting from recognised financial
liabilities as of 31 December 2023. Cash flows for financial liabilities without fixed amount or timing are based on the
conditions existing as 31 December 2023.
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
2.
Financial Risk Management Objectives and Policies (continued)
The remaining contractual maturities of the Group’s financial liabilities are:
31 December 2023 ($’000)
Financial liabilities
Trade and other payables
Lease liabilities
Total outflow
31 December 2022 ($’000)
Financial liabilities
Trade and other payables
Lease liabilities
Total outflow
g)
Fair values
<6 months
6-12 months
1-5 years
>5 years
Total
(16,400)
(2,015)
(18,415)
-
(2,015)
(2,015)
-
(4,652)
(4,652)
-
-
-
(16,400)
(8,682)
(25,082)
<6 months
6-12 months
1-5 years
>5 years
Total
(11,472)
(965)
(12,437
-
(965)
(965)
-
(1,512)
(1,512)
-
-
-
(11,472)
(3,442)
(14,914)
For all financial assets and liabilities recognised in the consolidated 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 consolidated financial statements.
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 -
the fair value is calculated using quoted prices in active markets.
Level 2 -
Level 3 -
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.
Quoted
market price
(Level 1)
$'000
-
-
-
Quoted
market price
(Level 1)
$'000
-
-
-
31 December 2023
Valuation
technique market
observable inputs
(Level 2)
$'000
-
Valuation technique
non-market
observable inputs
(Level 3)
$'000
14,003
-
-
3,625
17,628
31 December 2022
Valuation
technique market
observable inputs
(Level 2)
$'000
-
Valuation technique
non-market
observable inputs
(Level 3)
$'000
30,423
-
-
10,842
41,265
Total
$'000
14,003
3,625
17,628
Total
$'000
30,423
10,842
41,265
Convertible note receivables1
Derivative financial
instruments2
Convertible note receivables1
Derivative financial
instruments2
1 The carrying value of the convertible note receivables on inception was equivalent to $35.07 million and on 31
December 2023 $14.00 million (31 December 2022: $30.42 million). The change in fair value resulted from ($16.42)
million in remeasurement. To estimate the fair value of the convertible notes, the Group uses a discounted cash flow
(“DCF”) technique, and then applied a probability of loss to the valuation to account for Cyprium's credit risk.
As the convertible notes are not traded in an active market, their fair value is estimated by discounting the stream of
future interest and principal payments at the rate of interest prevailing at the reporting date for instruments of similar
term and risk, and adding this value to the value of the Embedded Derivative Component which is valued using a
Black Scholes model based on assumptions including risk free interest rate, expected dividend yield, implied volatility
and expected remaining life of the Convertible Notes.
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
2.
Financial Risk Management Objectives and Policies (continued)
At 31 December 2023 concerns exist regarding the recoverability of the Loan Receivable Component. Despite
securing a significant loan facility and raising substantial capital, Cyprium available cash remains notably lower than
the aggregated capital raised. Additionally, the 31 December 2023 quarterly activities report indicates the necessity
for further expenditures to progress the Nifty project, raising doubts about the company's financial sustainability and
its ability to fulfill repayment obligations.
Accordingly, a valuation of the convertible notes has been determined by an external expert as follows:
The fair value of the convertible notes assuming that a third party purchases the convertible notes from Metals X.
Under this valuation scenario, the stream of future interest and principal payments are discounted by the risk-free
rate as at the Valuation Date. A probability of loss of 62.5% has then been applied to determine the risk-adjusted
value of the Loan Receivable Component.
In addition, the Company adds the fair value of the conversion option. Exercising the conversion option would result
in the Company receiving 101.38 million Cyprium shares. The fair value is estimated using a Black Scholes valuation
model. The inputs to these models and techniques require a degree of judgement, including consideration of the risk-
free interest rates, Cyprium share price volatility and market interest rates.
The inputs used to value the convertible notes at 31 December 2023 are as follows:
Expected volatility
Risk-free interest rate
Expected life
Options exercise price
Share price at valuation date
Expiry date/maturity date
Face value of convertible notes
Risk-free rate of debt
Probability of loss
Fair value per instrument
Number of instruments
B&S Model
90%
3.691%
Total Fair Value at
31 Dec 2023
$’000
DCF
-
-
1.25 years
1.25 years
$0.3551
$0.03
-
-
30 Mar 2025
30 Mar 2025
-
-
$0.0002
101,379,893
$36.000 million
3.691%
62.5%
-
-
Total fair value at 31 Dec 2023
$24
$13,979
$14,003
The inputs used to value the convertible notes at 31 Dec 2022 are as follows:
Expected volatility
Risk-free interest rate
Expected life
Options exercise price
Share price at valuation date
Expiry date/maturity date
Face value of convertible notes
Market interest rates
Fair value per instrument
Number of instruments
Total fair value at 31 Dec 2022
B&S Model
100%
3.41%
Total Fair Value at
31 Dec 2022
$’000
DCF
-
-
2.25 years
2.25 years
$0.3551
$0.105
-
-
30 Mar 2025
30 Mar 2025
-
-
$0.030
101,379,893
$3,041
$36.000 million
20%
-
-
$27,382
$30,423
2 The derivative financial assets represent 25.00 million NICO Options to acquire shares in NICO. The fair value of
the NICO Options was determined using a Black Scholes valuation model, which considers factors including the
option’s exercise prices, the volatility of the underlying share price, the risk-free interest rate, the market price of the
underlying share at measurement date and the expected life of the NICO Options.
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 Dec 2023
2.
Financial Risk Management Objectives and Policies (continued)
Cyprium options (expired)
On 30 March 2023, the second tranche of 20.30 million Options (“T2”) expired out of the money (31 December 2022:
20.30 million Options $0.22 million).
Exercising the Options can result in bonus shares being awarded to the Group depending on the copper price on the
date of exercise. To accommodate the additional award, the Group has estimated the fair value of the bonus shares
that are most likely to be awarded at the exercise dates, which is judged to be the expiry dates. The number of bonus
shares to be awarded is estimated with reference to forecast copper prices on the expiry dates and applying the pre-
set factor. The increase in fair value is then calculated by applying that factor to the number of Cyprium Options
converted and multiplying by the price of Cyprium shares, on the measurement dates.
NICO options
The fair value of the 25.0 million NICO options at 31 December 2023 is $3.63 million (31 December 2022: $10.63
million).
The inputs used to value the Options at 31 December 2023 are as follows:
Expected volatility
Risk-free interest rate
Expected life of options
Options exercise price
Share price at measurement date
Expiry date/maturity date
Fair value as at 31 December 2023
The inputs used to value the NICO and Cyprium options at 31 December 2022 are as follows:
NICO
Options
$’000
80%
3.691%
0.84 years
$0.25
$0.345
3 Nov 2024
3,625
Expected volatility
Risk-free interest rate
Expected life of options
Options exercise price
Share price at measurement date
Forecast copper price per tonne
Bonus share factor / award
NICO
Options
Cyprium T2
Options
85%
3.41%
100%
3.41%
1.84 years
0.24 years
$0.250
$0.615
N/A
N/A
$0.3551
$0.105
$US 7,700
Cyprium T2
Bonus
Shares
Total Fair
Value at 31
Dec 2022
$’000
-
-
-
-
$0.105
-
1.1x
2.027 m
Expiry date
3 Nov 2024
30 Mar 2023
-
Fair value as at 31 December 2022
$10,625
$4
$213
$10,842
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
2.
Financial Risk Management Objectives and Policies (continued)
The effects of fair value changes are reflected in the consolidated statement of comprehensive income.
Significant estimates and judgments – level 3 inputs
The following significant estimates and judgments were made for inputs used in determining the fair value of financial
instruments categorised as level 3:
(i)
Volatility for buyer options and conversion feature
Management used an external expert to assist with the estimate of volatility for the purposes of its Black Scholes
valuation technique. The volatility of the share price of Cyprium was calculated for one, two, and three-year periods,
using historical data extracted from Bloomberg, noting that Cyprium shares were in a trading halt from 1 February
2023 to 20 September 2023. For the purpose of the valuation, a future estimated volatility level of 90% for Cyprium
was used.
The volatility of the share price of NICO was calculated for one and two-year periods, using historical data extracted
from Bloomberg, noting that NICO shares commenced trading on 19 January 2022. For the purpose of the valuation,
a future estimated volatility level of 80% for NICO was used in the option pricing model.
(ii)
Risk-free interest rates
Management used an external expert to assist with the estimate of the market interest rate of borrowing. The
Australian Government bond rate as at 29 December 2023 was used as a proxy for the risk-free rate over the life of
the convertible notes and the NICO Options. The 2-year Australian Government bond rate as at 29 December 2023
was 3.691%, which has been used as an input in the option pricing models.
(iii)
Copper price forecasts
Management used an external expert to assist with the estimate of future copper prices. Future copper prices were
estimated based on Consensus Economics forecasts.
(iv)
Probability of loss
Management used an external expert to assist with the estimate probability of loss.
A quantitative sensitivity analysis as at 31 December 2023 is shown below:
Instrument
Convertible notes
Valuation
technique
DCF
Significant
unobservable inputs
Probability of loss
Value
62.5%
Black Scholes
Volatility
90%
Derivative financial
instruments –
NICO options
Black Scholes
Volatility
80%
Sensitivity of the input to fair value
A change in the probability of loss
to 75% and 50% would result in a
change in fair value by ($4.65)
million and $4.65 million
respectively.
+/(-)10% change in volatility would
result in a change in fair value of
approximately $0.03 million and
approximately ($0.02) million.
+/(-)10% change in volatility would
result in a change in fair value of
$0.22 million and ($0.22) million.
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
2.
h)
Financial Risk Management Objectives and Policies (continued)
Changes in liabilities arising from financing activities
The Group classifies interest paid as cash flows from operating activities.
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
3.
Revenue
1 January 2023
$’000
1,930
1,409
3,339
1 July 2022
$’000
1,945
1,612
3,557
Payments
(3,097)
-
(3,097)
Payments
(1,039)
-
(1,039)
Net Transfers &
New Leases
31 Dec 2023
$’000
5,197
2,918
8,115
4,030
4,327
8,357
Net Transfers &
New Leases
31 Dec 2022
$’000
1,024
(203)
821
1,930
1,409
3,339
As a result of the financial year change from 30 June to 31 December, the comparative reporting period is for the 6
months to 31 December 2022. Consequently, the amounts presented in the following note are not directly
comparable.
12 months to
31 Dec 2023
$’000
6 months to
31 Dec 2022
$’000
Revenue from contracts with customers – tin-in-concentrate
153,781
66,682
Recognition and measurement
Metals X owns a 50% equity interest in the Renison Tin Operation through its 50% stake in the Bluestone Mines
Tasmania Joint Venture. The Group is principally engaged in the business of producing tin-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 Group expects to be entitled in exchange for those goods or
services.
The Group has concluded that it is the principal in its revenue contracts because it typically controls the goods or
services before transferring them to the customer.
Based on the current contractual terms, revenue is recognised when control passes to the customer, which occurs
at a point in time when the tin-in-concentrate physically arrives at the customer’s works or the customers destination
port.
Revenue is measured as the amount to which the Group 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 Group’s sales of tin-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 tin-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 QP for tin-in-concentrate is not expected to result in a material adjustment due to the short period
between the point control of the concentrate passing 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”).
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
3.
Revenue (continued)
Revenue is initially recognised based on the most recently determined estimate of tin-in-concentrate using the
expected value approach based on initial internal assay and weight results. The Group 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.
Key estimates and judgements
Revenue from contracts with customers
Identification of the enforceable contract
For 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
tin-in-concentrate when it places an order for each shipment. Therefore, the enforceable contract has been
determined to be each purchase order.
4. Other Income
As a result of the financial year change from 30 June to 31 December, the comparative reporting period is for the 6
months to 31 December 2022. Consequently, the amounts presented in the following note are not directly
comparable.
Interest income (i)(ii)
Other income
Gain on sale of investment in associate (iii)
Total other income
12 months to
31 Dec 2023
$’000
7,089
6 months to
31 Dec 2022
$’000
1,434
108
2,400
9,597
19
-
1,453
(i)
Interest income 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.
(ii)
On 30 March 2023, the Company received the second annual payment of $1.44 million as settlement of the
4% coupon payable under the terms of the convertible notes issued by Cyprium.
(iii) Gain on sale of investment in associate relates to the sale of 8,000,000 NICO shares at $0.50 per share with
a cost base of $0.20 per share. The NICO shares are classified as an investment in an associate with gains
or losses recognised in other income upon disposal of the shares (refer to note 1(k)).
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
5.
Expenses
As a result of the financial year change from 30 June to 31 December, the comparative reporting period is for the 6
months to 31 December 2022. Consequently, the amounts presented in the following note are not directly
comparable.
Cost of sales
a)
Salaries, wages expense and other employee benefits
12 months to
31 Dec 2023
$’000
19,458
6 months to
31 Dec 2022
$’000
9,248
Superannuation expense
Mining costs
Processing costs
Other production costs
Changes in inventories
Provision for obsolete and impairment stores and spares
Royalty expense
Depreciation - property, plant, and equipment
Depreciation - buildings
Mine properties and development - amortisation
Total cost of sales
b)
General and administration expenses
Directors' fees, and other benefits
Superannuation expense
Other employee benefits
Consulting expenses
Travel and accommodation expenses
Administration costs
Depreciation – other assets
Total general and administration expense
c)
Foreign exchange
Total foreign exchange gain
d)
Finance costs
Interest expense
Unwinding of rehabilitation provision discount
Total finance costs
e)
Fair value change in financial assets
2,096
35,447
19,802
9,606
(3,593)
327
8,163
4,483
1,277
8,089
971
15,567
8,996
4,227
2,249
49
3,514
1,999
318
3,262
105,155
50,400
1,014
110
32
1,228
234
1,178
8
3,804
528
55
16
566
113
276
10
1,564
-
(11)
743
134
877
124
104
228
Fair value loss in financial assets through profit or loss
23,637
2,005
Recognition and measurement
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 17 for the accounting policy relating to short-term and long-term employee benefits.
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.
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
6.
Income Tax
(a) Major components of income tax (benefit)/expense:
Income statement
Current income tax expense
Current income tax expense
Deferred income tax
Relating to origination and reversal of temporary differences
in current year
Net deferred tax asset not recognised
Income tax expense reported in the consolidated
statement of comprehensive income
At
31 Dec 2023
$'000
At
31 Dec 2022
$'000
16,367
(8,059)
3,926
12,234
3,253
762
(32)
3,983
(b) A reconciliation of income tax expense and the product of accounting profit before income tax multiplied by
the Group's applicable income tax rate is as follows:
Total accounting profit before income tax from
continuing operations
At statutory income tax rate of 30% (31 December 2022:
30%)
Non-deductible items
Non-deductible penalties
Sundry items
Other
Deductible items
Net deferred tax asset not recognised
Income tax expense reported in the statement of
comprehensive income
12 months to
31 Dec 2023
$'000
26,819
6 months to
31 Dec 2022
$'000
13,949
8,046
494
7
-
(239)
3,926
12,234
4,185
-
24
(14)
(194)
(18)
3,983
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
6.
Income Tax (continued)
Deferred income tax at 31 December 2023 relates to the following:
Deferred tax liabilities
Exploration
Derivative financial instruments
Deferred mining
Mine site establishment and refurbishment
Consumables
Interest income
Diesel rebate
Property Plant and Equipment
Gross deferred tax liabilities
Deferred tax assets
Inventories
Legal costs
Accrued expenses
Provision for employee entitlements
Provision for fringe benefits tax
Provision for rehabilitation
Recognised tax losses
Gross deferred tax assets
Net deferred tax assets
Income tax expense reported in the consolidated statement of
comprehensive income
Statement of Financial Position
Statement of Other Comprehensive Income
At
31 Dec 2023
$'000
At
31 Dec 2022
$'000
12 months to
31 Dec 2023
$'000
6 months to
31 Dec 2022
$'000
43
-
(13,511)
(4,312)
-
(258)
(22)
(2,867)
(20,927)
469
115
123
2,202
2
8,043
36,280
47,234
26,307
43
(1,876)
(11,470)
(1,132)
-
(186)
(18)
(1,886)
(16,525)
371
206
84
1,600
1
4,195
48,609
55,066
38,541
-
(1,876)
2,041
3,180
-
72
4
981
(98)
91
(39)
(602)
(1)
(3,848)
12,329
-
(602)
1,437
(72)
(3)
183
9
(151)
(15)
46
1
(255)
-
166
3,239
12,234
3,983
At 31 December 2023, there are unrecognised transferred losses of $156,534,000 (31 December 2022: $156,534,000) for the Group subject to a restricted rate of utilisation and
no expiry date.
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
6.
Income Tax (continued)
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 Group operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the consolidated
statement of comprehensive income. 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 except for transactions that, on initial recognition, give rise to equal
taxable and deductible temporary differences such as recognition of a right-of-use (“ROU”) asset and lease
liability; 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 other comprehensive income
(“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 and its wholly owned Australian controlled entities have implemented the tax consolidation legislation as of
1 July 2004. The head entity, Metals X and the controlled entities in the tax consolidated group continue to account
for their own current and deferred tax amounts. The Group 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 (“TSA”) 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 consolidated financial statements in respect of the TSA on the basis that the possibility of
default is remote.
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
6.
Income Tax (continued)
Tax consolidation legislation (continued)
Members of the Group have also entered into tax funding agreements (“TFA”). The TFA provides for the allocation
of current taxes to members of the tax consolidated group. The allocation of taxes under the TFA is recognised as
an increase/(decrease) in the controlled entities intercompany accounts with the tax consolidated group head
company, Metals X. The nature of the TFA is such that no tax consolidation contributions by or distributions to equity
participants are required.
7.
Earnings Per Share
The following reflects the data used in the basic and diluted earnings per share computations for the year ended 31
December 2023. As a result of the financial year change from 30 June to 31 December, the comparative reporting
period is for the 6 months to 31 December 2022. Consequently, the amounts presented in the following note are
not directly comparable.
12 months to
31 Dec 2023
6 months to
31 Dec 2022
For basic and diluted earnings per share:
Profit attributable to continuing operations ($’000)
14,585
9,966
Weighted average number of ordinary shares outstanding during the
period used in the calculation of basic and diluted earnings per share
907,266,067
907,266,067
Basic and diluted earnings per share (cents)
From continuing operations
Recognition and measurement
1.61
1.10
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.
The result is divided by the weighted average number of ordinary shares and dilutive potential ordinary shares,
adjusted for any bonus element.
The Company has no share options on issue which are anti-dilutive and are therefore not required to be included
in the calculation of diluted earnings per share (31 December 2022: Nil).
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 consolidated financial statements.
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
8.
Cash and Cash Equivalents
Cash at bank and in hand - denominated in AUD
Short-term deposits (i)
Total
At
31 Dec 2023
$'000
43,042
100,000
143,042
At
31 Dec 2022
$'000
13,929
100,000
113,929
(i) Short-term deposits are made for varying periods of between one day and three months, depending on the
immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.
Refer to note 2(b) for more details on the Group’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 consolidated 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.
Reconciliation of profit before tax to net cash flows from operating activities:
Profit before tax
Amortisation and depreciation
Foreign exchange loss
Fair value loss in financial assets
(Gain) on sale of investment in associate
Rehabilitation expense
Unwinding of rehabilitation provision discount
Provision for stock write down
Share of loss of associates
Gain on disposal of property plant and equipment
Changes in assets and liabilities
(Increase)/decrease in inventories
Decrease/(increase) in trade and other receivables and prepayments
Increase/(decrease) in trade and other creditors
Increase in provisions
Net cash flows from operating activities
12 months to
31 Dec 2023
$'000
6 months to
31 Dec 2022
$'000
26,819
13,857
-
23,637
(2,400)
2,126
134
327
960
(70)
13,949
5,589
11
2,005
-
-
81
49
-
-
65,390
21,684
(5,970)
204
3,292
1,944
64,860
586
(5,250)
(6,302)
840
11,558
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
9.
Trade and Other Receivables
Current
Trade receivables at fair value through profit or loss (i)
Other receivables at amortised cost (ii)
Non-current
At
31 Dec 2023
$’000
At
31 Dec 2022
$’000
12,368
3,318
15,686
9,175
7,156
16,331
Other receivables – performance bond facility (iii)
3,457
3,457
(i)
On 31 December 2023, 121 tonnes of tin-in-concentrate revenue remained open to price adjustment (31
December 2022: 114 tonnes).
Trade receivables (subject to provisional pricing) are non-interest bearing but are exposed to future commodity
price movements over the quotational period (“QP”) and are measured at fair value through profit or loss up
until the date of settlement. These trade receivables are initially measured at the amount which the Group
expects to be entitled, being the estimate of the price expected to be received at the end of the QP. For tin
concentrate 80% - 85% of the provisional invoice (based on the provisional price) is received in cash within
four weeks of the shipment’s arrival at the customers smelter. The QP for tin-in-concentrate is not expected
to result in a material adjustment due to the short period between the point control of the concentrate passes
to the customer and the end of the QP.
(ii)
Balance includes cash calls advanced to the Bluestone Mines Tasmania Joint Venture Pty Ltd $1.00 million
(31 December 2022: $4.93 million), GST receivable $0.81 million (31 December 2022: $0.76 million), interest
receivable of $0.86 million (31 December 2022: 0.62 million) and other debtors of $0.57 million (31 December
2022: $0.77 million).
(iii)
The performance bond facility is interest bearing and is used as security for government performance bonds.
The fair value approximates cost. Refer to note 2(b) for credit risk assessment.
10.
Inventories
Ore stocks – at cost
Tin in circuit – at cost
Tin concentrate – at cost
Stores and spares – at cost
Provision for obsolescence - stores and spares
Recognition and measurement
At
31 Dec 2023
$’000
4,127
131
14,889
11,007
(1,563)
At
31 Dec 2022
$’000
2,387
125
13,042
8,632
(1,237)
28,591
22,949
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.
11.
Investment in Associates
Investment in associates
NICO Seed funding share purchase (600,000 shares)
NICO Seed funding share purchase (500,000 shares)
NICO IPO purchase (20,000,000 shares)
Sale of NICO shares (5,400,000 shares) at cost
Sale of NICO shares (8,000,000 shares) at cost
Participation in NICO share issue (1,540,000 shares at 40c each)
Purchase of Tanami Shares (34,340,000 at 0.034c each)
Share of loss in associates
At
31 Dec 2023
$’000
30
50
4,000
(940)
(1,600)
616
1,178
(960)
At
31 Dec 2022
$’000
30
50
4,000
(940)
-
-
-
-
2,374
3,140
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
11.
Investment in Associates (continued)
The Company’s investment in associates pertain to its shares in NICO and Tanami Gold. The investment is initially
measured at the cost of the shares. The carrying amount of the investment is adjusted to recognise changes in the
Group’s share of gains or losses of the associate following the acquisition date.
NICO Investment
During the year, the Company sold 8,000,000 million NICO shares at an average price of $0.50 cents per share for
a total of $3.99 million (net of transaction costs).
On 19 September 2023, NICO announced a fully underwritten pro-rata non-renounceable entitlement offer of one (1)
new share for every five (5) shares at an issue price of $0.40 per new share. The Company took up the whole of its
pro-rata entitlement of 1,540,000 new shares for a consideration of $0.62 million after which Metals X retained its
interest of 8.46% in NICO.
As at 31 December 2023, the Company holds 9.24 million NICO shares (31 December 2022: 15.70 million) with an
equity accounted value of $1.30 million (31 December 2022: $3.14 million).
At 31 December 2023, the Company recognised an $0.85 million loss on its investment in NICO. The Company
recognises its share of losses incurred by NICO proportional to its 8.46% interest.
The Company is entitled to a 1.75% net smelter royalty on all metals produced from both the Wingellina Nickel-Cobalt
Project and the Claude Hills Project once in production.
Tanami Gold Investment
During the year, the Company purchased approximately 34.43 million shares (representing 2.93% of the shares on
issue) in Tanami Gold (ASX:TAM) at an average price of approximately $0.034 cents for a total cost of $1.17 million
(net of transaction costs).
At 31 December 2023, the Company holds 34.43 million shares (31 December 2022: nil) with an equity accounted
value of $1.07m (31 December 2023: nil).
The Company has recognised a $0.11 million loss in its investment in Tanami Gold. The Company recognises its
share of losses incurred by Tanami Gold proportional to its 2.93% interest.
12. Financial Assets at Fair Value Through Profit or Loss
Current
Convertible notes
Derivative financial assets
Non-current
Convertible notes
At
31 Dec 2023
$’000
At
31 Dec 2022
$’000
1,080
3,625
4,705
12,923
12,923
1,080
10,842
11,922
29,343
29,343
Derivative financial assets and debt instruments
Derivative financial assets are financial instruments. A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity instrument of another entity.
On 31 December 2023, the Company continues to hold:
$36.00 million in aggregate in convertible notes issued by Cyprium with an annual coupon rate of 4%; and
25 million options to acquire NICO shares exercisable at $0.25 each, escrowed until 19 January 2024, expiring
3 years after grant date, exercisable after 19 January 2024 and on or before 3 November 2024.
Initial recognition and measurement
The Group initially recognises financial assets in the following measurement categories:
those to be measured at fair value through profit or loss (“FVTPL”);
fair value through other comprehensive income (“FVTOCI”), and
financial assets measured at amortised cost (“Debt Instruments”).
The classification of financial assets at initial recognition, depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them.
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
12. Financial Assets at Fair Value Through Profit or Loss (continued)
For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For
investments in equity instruments that are not held for trading, this will depend on whether the Group has made an
irrevocable election at the time of initial recognition to account for the equity investment at FVTOCI.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at
FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at FVTPL are expensed.
For a financial asset to be classified and measured at amortised cost or FVTOCI, it needs to give rise to cash flows
that are ‘solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets with
cash flows that are not SPPI are classified and measured at FVTPL, irrespective of the business model. The Group
reclassifies debt investments when and only when its business model for managing those assets changes.
Convertible notes are financial assets with embedded derivatives which are considered in their entirety when
determining whether their cash flows are SPPI.
Subsequent measurement
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected
to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair
value gains and losses to the consolidated statement of comprehensive income following the derecognition of the
investment. Dividends from such investments continue to be recognised in the consolidated statement of
comprehensive income as other income when the Group’s right to receive payment is established. Changes in the
fair value of financial assets at FVTPL are recognised in other gains/(losses) in the consolidated statement of
comprehensive income as applicable. Impairment losses (and reversal of impairment losses) on equity investments
measured at FVTOCI are not reported separately from other changes in fair value.
Debt instruments
The subsequent measurement of Debt Instruments depends on the Group’s business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories for Debt Instruments:
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments
of principal and interest are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate (“EIR”) method. Any gain or loss arising on
derecognition is recognised directly in the consolidated statement of comprehensive income and presented
in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as
separate line item in the consolidated statement of comprehensive income.
Financial assets that are held for collection of contractual cash flows and for selling the financial assets, where
the assets’ cash flows represent SPPI, are measured at FVTOCI. Movements in the carrying amount are
taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign
exchange gains and losses which are recognised in the consolidated statement of comprehensive income.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and recognised in other gains/(losses).
Interest income from these financial assets is included in finance income using the EIR. Foreign exchange
gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate
line item in the consolidated statement of comprehensive income.
Assets that do not meet the criteria for amortised cost or FVTOCI are measured at FVTPL. A gain or loss on
a debt investment that is subsequently measured at FVTPL is recognised in the consolidated statement of
comprehensive income in the period it arises.
Impairment
Further disclosures relating to impairment of financial assets are also provided in:
Disclosures for significant assumptions in note 1(l).
Financial assets at fair value through profit and loss note 12.
Trade and other receivables note 9.
The Group recognises an allowance for expected credit losses (“ECL’s”) for all debt instruments not carried at FVTPL.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest
rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
12. Financial Assets at Fair Value Through Profit or Loss (continued)
that are integral to the contractual terms. The Group applies the simplified approach permitted by AASB 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
Financial liabilities at FVTPL
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial
recognition as at FVTPL.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near
term. This category also includes derivative financial instruments entered into by the Group that are not designated
as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also
classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities
held for trading are recognised in the consolidated statement of comprehensive income. Financial liabilities
designated upon initial recognition at FVTPL are designated at the initial date of recognition, and only if the criteria
in IFRS 9 are satisfied. The Group has not designated any financial liabilities at FVTPL.
Financial liabilities at amortised cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using
the EIR method. Gains and losses are recognised in consolidated statement of comprehensive income when the
liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking
into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the consolidated statement of comprehensive income. This category
generally applies to interest-bearing loans and borrowings. For more information, refer to note 18.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification, is treated as a derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is
recognised in the consolidated statement of comprehensive income.
Estimates and judgments
Fair value measurement of financial instruments
These financial assets cannot be measured based on quoted prices in active markets and are therefore measured
using valuation techniques.
The convertible note receivables convey a right to receive cash upon maturity of 30 March 2025 or the option to
convert the principle amount outstanding into shares of Cyprium. The convertible notes attract interest at a coupon
rate of 4% per annum to be capitalised and paid annually, payable in cash unless Metals X elects to receive the
interest in fully paid ordinary Cyprium shares.
To determine the fair value of the convertible notes, the Group estimates the fair value of the right to receive the cash
using discounted cash flow techniques and market interest rates and applying a probability of loss factor to account
for credit risk. In addition, the Group adds the fair value of the conversion option, which is estimated using the Black
Scholes valuation model. Refer to note 2. The inputs to this model and technique requires a degree of judgement,
including consideration of the risk-free rate, Cyprium share price volatility, credit risk, and market coupon rates.
The Group’s derivative financial instruments are options to acquire shares in NICO.
a)
The Group’s derivative financial instruments relate to options to acquire shares in NICO. To determine the fair
value of these instruments, the Group has used Black Scholes. Refer to note 2. The inputs to these models
and techniques require a degree of judgement, including consideration of the risk-free rates and NICO share
price volatility.
Changes in assumptions relating to the above factors could affect the reported fair value of the financial assets. See
note 1(l) for further disclosures. Future developments may require further revisions to the fair value estimate. The
convertible notes and derivative financial instruments are classified as financial assets at FVTPL.
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
13. Property, Plant, and Equipment
Property, 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
Net carrying amount
Total property, plant, and equipment
Reconciliations:
Reconciliations of the carrying amounts of property, plant, and
equipment at the beginning and end of the reporting period:
Property, plant, and equipment
Opening written down value
Transfers from capital in progress
Depreciation charge for the period
Carrying amount at the end of the period net of accumulated
depreciation
Land and buildings
Opening written down value
Transfers from capital in progress
Depreciation charge for the period
Carrying amount at the end of the period net of accumulated
depreciation
Capital work in progress
Opening written down value
Additions
Transfers to mine properties and development
Transfers to property, plant, and equipment
Transfers to land and buildings
Carrying amount at the end of the period
At
31 Dec 2023
$'000
At
31 Dec 2022
$'000
75,758
(43,348)
32,410
28,313
(5,476)
22,837
18,837
18,837
74,084
19,613
17,288
(4,491)
32,410
6,713
17,401
(1,277)
22,837
41,745
24,111
(12,330)
(17,288)
(17,401)
18,837
60,840
(41,227)
19,613
10,912
(4,199)
6,713
41,745
41,745
68,073
20,546
1,076
(2,009)
19,613
7,029
2
(318)
6,713
31,150
11,675
-
(1,078)
(2)
41,745
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
13. Property, Plant, and Equipment (continued)
At the end of each reporting period, the Group is required to review whether there is any indication that an asset may
be impaired, in accordance with International Accounting Standards. If any such indication exists, the Group shall
estimate each asset or cash generating unit (CGU) recoverable amount. The recoverable amount is determined as
the higher of a CGU’s value in use (VIU) and its fair value less costs of disposal (FVLCD).
In assessing the CGUs, management of the Company has determined that the smallest identifiable group of assets
that generates cash inflows that are largely independent of the cash inflows from other assets is the Bluestone Mine
Tasmania Joint Venture (“BMTJV”) CGU. The Group has determined that there is no active market for intermediate
components.
The Company has reviewed the BMTJV CGU for indications of impairment using both external and internal sources
of information which included current performance, changes in exchange rates, tin price, and market capitalisation.
The Company identified that the net assets of the group exceeded its market capitalisation resulting in an impairment
indicator and impairment testing being performed. No impairment indicators were identified for the comparative
period.
BMTJV CGU
The BMTJV CGU impairment assessment utilises a life of mine discounted cash flow (DCF) model. The recoverable
amount has been determined using the VIU methodology.
The key assumptions utilised in the impairment modelling included an average tin price of US$24,000 per tonne, a
USD:AUD exchange rate of $0.73 and a real pre-tax discount rate of 16.63%.
No impairment has been recognised for the year ended 31 December 2023 (31 December 2022: Nil).
Recognition and measurement
Property, plant and equipment are 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 property, 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/(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 comprehensive income in the period the item is derecognised.
Key estimates and judgements
Life of mine method of amortisation and depreciation
The Group 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 Group’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.
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
14. Mine Properties and Development
Recognition and measurement
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.
Key estimates and judgements
In determining amortisation of its mine capital development, the Group applies the units of production (“UOP”)
method and factors in future development spend required to access the remaining ore reserves. For Mine site
establishment, the Group applies the life of mine method of amortisation, which is also based on ore tonnes mined.
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 Group 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.
Impairment
At the end of each reporting period, the Group is required to review whether there is any indication that an asset may
be impaired, in accordance with International Accounting Standards. If any such indication exists, the Group shall
estimate each asset or cash generating unit (CGU) recoverable amount. The recoverable amount is determined as
the higher of a CGU’s value in use (VIU) and its fair value less costs of disposal (FVLCD).
In assessing the CGUs, management of the Company has determined that the smallest identifiable group of assets
that generates cash inflows that are largely independent of the cash inflows from other assets is the Bluestone Mine
Tasmania Joint Venture (“BMTJV”) CGU. The Group has determined that there is no active market for intermediate
components.
Refer to note 13 for a detailed discussion on impairment.
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
14. Mine Properties and Development (continued)
Determination of future capital development spend
Management estimates its future capital development spend based on historical annual requirements forecasted
over the remaining estimated life of mine.
Mine site establishment
Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount
At
31 Dec 2023
$'000
At
31 Dec 2022
$'000
70,288
(37,955)
32,333
44,377
(37,245)
7,132
Mine site establishment costs include $5.46m of capitalised Rentails costs (31 December 2022: $2.52 million).
Mine capital development
Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount
Total mine properties and development
Mine site establishment
Opening written down value
Additions
Transfers from capital work in progress
Increase/(decrease) in rehabilitation assets
Amortisation charge for the period
Carrying amount at the end of the period net of accumulated
amortisation
Mine capital development
Opening written down value
Additions
Amortisation charge for the period
Carrying amount at the end of the period net of accumulated
amortisation
15. Exploration and Evaluation
Exploration and evaluation costs are carried forward in respect of
mining areas of interest
Pre-production areas
At cost
Net carrying amount
144,442
(96,964)
47,478
79,811
7,132
2,939
12,330
10,643
(711)
32,333
38,866
15,991
(7,379)
47,478
128,451
(89,585)
38,866
45,999
7,894
603
-
70)
(495)
7,132
34,235
7,398
(2,767)
38,866
At
31 Dec 2023
$'000
At
31 Dec 2022
$'000
352
352
352
352
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
Recognition and measurement
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;
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;
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 comprehensive income 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 Group 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.
16. Trade and Other Payables
Trade and other creditors
Sundry creditors and accruals
Unearned revenue
Recognition and measurement
At
31 Dec 2023
$'000
At
31 Dec 2022
$'000
8,889
7,511
-
16,400
3,623
7,849
1,632
13,104
Trade and other payables are initially recognised, at fair value and subsequently measured at amortised cost using
the effective interest rate 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.
17. Provisions
Current
Provision for annual leave
Provision for superannuation
Provision for long service leave
Other provisions
Non-current
Provision for long service leave
Provision for rehabilitation
At
31 Dec 2023
$’000
3,470
At
31 Dec 2022
$’000
3,293
1,648
1,284
5
6,407
728
26,811
27,539
-
1,231
5
4,529
594
13,982
14,576
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
Rehabilitation movement
Opening balance
Change in rehabilitation obligations
Rehabilitation borrowing discount unwound
Balance at 31 December
Provision for Superannuation
13,982
12,695
134
26,811
14,771
(893)
104
13,982
The liability for superannuation relates to amounts taken up as part of the Company’s 50% share in the BMTJV.
Provision for 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.
Provision for rehabilitation
Environmental obligations associated with the retirement or disposal of mining properties and/or of exploration
activities are recognised when the disturbance occurs and are based on the extent of the damage incurred. The
provision is measured as the present value of the future expenditure. The rehabilitation liability is remeasured at each
reporting period in line with the change in the time value of money (recognised as an interest expense in the
consolidated statement of comprehensive
the provision), and additional
income and an
disturbances/change in the rehabilitation costs are recognised as additions/changes to the corresponding asset and
rehabilitation liability.
increase
in
The provisions for rehabilitation are recorded in relation to the Renison Tin Mine and Mt Bischoff for the rehabilitation
of the disturbed mining areas to a state acceptable to Tasmanian EPA. While rehabilitation is performed progressively
where possible, final rehabilitation of the disturbed mining area is not expected until the cessation of production.
Accordingly, the provisions are expected to be settled primarily at the end of the mine life, although some amounts
will be settled during the mine life.
During the year the BMTJV engaged a third party expert to update the mine closure cost estimate for Renison. The
update identified a significant increase in closure costs primarily in relation to demolition costs, and costs in relation
to tailings storage facility A, B, C and D.
Rehabilitation provisions are estimated based on survey data, external contracted rates, and the timing of the current
mining schedule. Provisions are discounted based on rates that reflect current market assessments of the time value
of money and the risks specific to that liability. The carrying value of the provision is calculated by applying an inflation
factor of 2.6% (31 December 2022: 3.0%) which has been estimated based on the break-even 10-year inflation rate
published by the RBA and a weighted average discount rate of 4.19% (31 December 2022: 3.57%), which has been
estimated using government bond yields for an equivalent period. Costs are inflated and discounted with reference
to the Group’s anticipated timing of payment, which is estimated based on the Group’s life of mine and planned
activities. A majority of the payments are anticipated within 12 years (31 December 2022: 12 years).
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
18.
Interest Bearing Liabilities
Current liabilities
Hire purchase liabilities
Other finance liabilities
Lease liabilities relating to right-of-use assets
Non-current liabilities
Hire purchase liabilities
Recognition and measurement
At
31 Dec 2023
$'000
At
31 Dec 2022
$'000
2,765
1,265
-
4,030
4,327
4,327
1,916
-
14
1,930
1,409
1,409
The Group 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 in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low-value assets. The Group 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 Group 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 Group’s impairment policies.
If ownership of the leased asset transfers to the Group 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 Group recognises lease liabilities measured at the present value of
future minimum lease payments, discounted using the Group’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 Group’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 statement of comprehensive
income.
iii)
Short-term leases and leases of low-value assets
The Group 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 Group recognises the lease payments associated with these leases as
an expense on a straight-line basis over the lease term.
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
19.
Issued Capital
Share capital
31 Dec 2023
Average number. of shares
31 Dec 2022
31 Dec 2023
AU$’000
31 Dec 2022
AU$’000
Ordinary shares fully paid
907,266,067
907,266,067
319,570
319,570
Movements in issued capital
Balance at 1 January 2023
Balance at 31 December 2023
Recognition and measurement
AU$'000 No. of Shares
319,570
907,266,067
319,570
907,266,067
Issued and paid-up capital is recognised at the fair value of the consideration received by the Company. Any
transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction in the
proceeds received.
Options on issue
There are no unissued ordinary shares of the company under option at the date of this report.
Capital management gearing ratio
Gearing ratio
Net debt
Capital 1
At
31 Dec 2023
$000
2.50%
8,357
319,648
At
31 Dec 2022
$000
1.04%
3,339
319,648
1Includes issued capital and all other equity reserves attributable to the equity holders of the parent for the purpose
of the Group’s capital management. The primary objective of the Group’s capital management is to ensure that it
maintains a strong credit rating and healthy capital ratios to support its business and maximise the shareholder’s
value. The Group manages its capital structure and adjusts considering changes in economic conditions and the
requirements of any financial covenants.
To maintain or adjust the capital structure, the Group may return capital to shareholders or issue new shares. No
changes were made in the objectives, policies or processes during the financial periods ended 31 December 2023
and 31 December 2022.
20. Accumulated Losses
Carrying amount at the beginning of the period
Net profit attributable to members of the parent entity
Carrying amount at the end of the period
At
31 Dec 2023
$’000
(27,737)
14,585
(13,152)
At
31 Dec 2022
$’000
(37,703)
9,966
(27,737)
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
21. Reserves
Share based payments reserve
Opening balance at beginning of period
Closing balance at the end of the period
At
31 Dec 2023
$’000
27,815
At
31 Dec 2022
$’000
27,815
27,815
27,815
This reserve is used to recognise the fair value of rights and options issued to employees in relation to equity-settled
share-based payments.
During the year ended 31 December 2023, the Company did not recognise income for the reversal of share-based
payments (31 December 2022: Nil) in the consolidated statement of comprehensive income. There were no share-
based payments granted during the year.
22. Auditor Remuneration
Fees to Ernst & Young (Australia)
12 months to
31 Dec 2023
$'000
6 months to
31 Dec 2022
$'000
Fees for auditing the statutory financial report of the Parent covering
the Group and auditing the statutory financial reports of any
controlled entities
185
121
Fees for other services
- tax compliance
Total fees to Ernst & Young (Australia)
23. Commitments
Capital commitments
Commitments relating to joint arrangements.
45
230
40
161
At 31 December 2023, the Group has capital commitments that relate principally to the purchase and maintenance
of plant and equipment for its mining operations. Refer to note 13.
Estimated capital expenditure contracted for at reporting date, but not recognised as liabilities for the Group:
Within one year
Mineral tenement commitments
At
31 Dec 2023
$’000
6,187
At
31 Dec 2022
$’000
9,754
The Company has tenements in which the mining operations are located. These tenement leases have a life of up
to twenty-one years. To maintain current rights to explore and mine the tenements the Group is required to perform
minimum exploration work to meet the expenditure requirements specified by the relevant state governing body. The
commitments include Renison commitments.
Within one year
After one year but not more than five years
After more than five years
At
31 Dec 2023
$’000
327
At
31 Dec 2022
$’000
284
1,305
845
2,477
1,136
1,019
2,439
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
Other commitments
The Group 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.
24.
Interest in Joint Operations
The Group has recognised its share of jointly held assets, liabilities, revenues and expenses of joint operations.
These have been incorporated in the consolidated financial statements under the appropriate classifications.
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. Under the agreement, the
Group is entitled to 50% of the production, assets, liabilities and expenses of the joint operation. The Renison Tin
Project is located in Tasmania.
25. Key Management Personnel
The following Key Management Personnel disclosures are for the 12-month period ended 31 December 2023. As a
result of the financial year change from 30 June to 31 December , the comparative reporting period is the 6-months
ended 31 Dec 2022. Consequently, the amounts presented in the consolidated financial statements are not directly
comparable.
Compensation of Key Management Personnel
Short-term employee benefits
Post-employment benefits
26. Related Party Disclosure
Subsidiaries
12 months to
31 Dec 2023
$
1,095,447
118,016
1,213,463
6 months to
31 Dec 2022
$
539,753
41,449
581,202
The consolidated financial statements of the Group include Metals X and the subsidiaries listed as follows:
Name
Bluestone Australia Pty Ltd
Subsidiary companies of Bluestone Australia Pty Ltd
Bluestone Mines Tasmania Pty Ltd
Subsidiary companies of Bluestone Mines Tasmania Pty Ltd
Bluestone Mines Tasmania Joint Venture Pty Ltd
Country of
Incorporation
Ownership Interest
31 Dec 2023
31 Dec 2022
Australia
100%
100%
Australia
100%
100%
Australia
50%
50%
Transactions with related parties
Sales to
related
parties
Related party transactions
Dragon Mining Limited: Provider
of services to Metals X.
Dec 2023
Dec 2022
$’000
-
-
Purchases
and interest
charges
from related
parties
$’000
474
271
Amounts
owed by
related
parties
Amounts
owed to
related
parties
$’000
$’000
-
-
51
52
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended 31 December 2023
27. Parent Entity Disclosure
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated losses
Share based payment reserve
Total equity
Loss of the parent entity
Total comprehensive loss of the parent entity
28. Dividends
At
31 Dec 2023
$'000
At
31 Dec 2022
$'000
143,070
168,500
130
82,107
341,685
(283,107)
27,815
86,393
(18,189)
(18,189)
128,732
171,564
272
66,982
341,685
(264,918)
27,815
104,582
(2,155)
(2,155)
No dividend has been paid or declared since the commencement of the year and no dividend has been recommended
by the Directors for the year ended 31 December 2023 (31 December 2022: nil).
29. Significant Events After Period End
There are no significant events after period end as at the date of this report.
59
DIRECTORS’ DECLARATION
For the year ended 31 December 2023
In accordance with a resolution of the Directors of Metals X Limited, I state that:
In the opinion of the Directors:
(a)
the consolidated financial statements and notes of the Group are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
giving a true and fair view of the financial position as at 31 December 2023 and the performance for the
Reporting Period ended on that date of the Group; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
the consolidated financial statements and notes also comply with International Financial Reporting Standards as
disclosed in note 1(b) and;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
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 year ended 31 December 2023.
(b)
(c)
(d)
On behalf of the Board
Brett Smith
Executive Director
29 February 2024
60
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Metals X Limited
As lead auditor for the audit of the financial report of Metals X limited for the financial year ended 31
December 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Metals X Limited and the entities it controlled during the financial
year.
Ernst & Young
Gavin Buckingham
Partner
29 February 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
61 Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Metals X Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Metals X Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 31
December 2023, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 December
2023 and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
62
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
BMTPL operations – work of a non-EY component team
Why significant
How our audit addressed the key audit matter
As disclosed in Note 24 to the financial report, a significant
component of the Group’s operations and activities take
place within its 100% owned Subsidiary Bluestone Mines
Tasmania Pty Ltd (“BMTPL”), which has a 50% interest and
participating share in the Renison Tin Project in Tasmania
(“a component”).
The Group’s 50% interest in the assets, liabilities, expenses
and cash flows of the component are included within the
Group consolidated financial statements and collectively are
material to the overall Group result and financial position.
In our role as Group auditor, we are required to obtain
sufficient appropriate audit evidence regarding the financial
information of the entities or business activities of
components within the Group in order to be able to express
an audit opinion on the financial report. We are responsible
for the direction, supervision, and performance of the Group
audit.
Given the financial significance of the component to the
group, which was audited by a non-EY audit team
(“Component Auditor”), the extent of our direction and
supervision of the Component Auditor was considered a key
audit matter.
In fulfilling our responsibilities as Group auditor, our audit
procedures included:
•
•
•
•
•
•
•
•
Performing a risk assessment and component
scoping at the Group level, identifying the
Component Auditor to be significant to the Group.
Sending out instructions to the Component
Auditor describing the audit areas in scope,
including the relevant risks and the information to
be reported to us as the Group auditor. We
determined and communicated the Component
Auditor materiality and reporting scopes, having
regard to the size and risk profile of the
component relative to the Group.
Obtaining written confirmation from the
Component Auditor of the work performed and the
results, as well as key documents supporting their
independence, significant findings and
observations.
Visiting the mine site of the component, in order to
obtain an understanding of the component’s
operations.
Holding meetings with the Component Auditor to
discuss the outcome and extent of their audit
procedures performed.
Reviewing the underlying working papers and
documentation of the Component Auditor
supporting their audit opinion on the results of the
component for the year ended 31 December
2023.
Agreeing the trial balance and related supporting
schedules audited by the Component Auditor to
the Group consolidation schedules, and where
relevant, financial statement note disclosures.
Assessing the adequacy of the accounting policies
of the component for consistency with the Group’s
accounting policies and assessed the Group’s
accounting for intercompany transactions with the
component.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
63
Convertible Notes Receivable
Why significant
How our audit addressed the key audit matter
As disclosed in Notes 2 and 12 to the financial report, the
Group holds $36.00 million in aggregate in convertible notes
issued by Cyprium Metals Limited (“Cyprium”).
The Group measures the convertible notes at fair value
through profit and loss, which requires the application of a
probability of loss factor to the carrying value of the
convertible notes to account for the credit risk applicable.
The convertible notes receivable fair value at 31 December
2023 was assessed at $14.00 million (31 December 2022:
$30.42 million) resulting in a fair value loss of $16.42
million being recognised in the consolidated statement of
comprehensive income.
Given the inherent complexity and judgement required to
estimate the fair value of the convertible notes receivable,
specifically the probability of loss factor applied to the
carrying value of the convertible notes and the significant
fair value loss recognised during the year as a result of the
application of this loss factor, this was considered a key
audit matter.
Our audit procedures included:
•
•
•
•
•
•
•
Assessed the Group’s measurement of the
convertible notes, in accordance with the
requirement of the accounting standards, which
included understanding the relevant terms and
conditions.
Read the valuation report prepared by the Group’s
external expert to arrive at an estimate of the fair
value of the convertible notes and, specifically the
rational for the probability of loss factor applied to
the carrying value of the convertible notes.
Read recent market releases and announcements
made by Cyprium for consistency in the market
announcements with the considerations adopted
by management and the Group’s expert in
assessing an appropriate probability of loss factor
to apply to the convertible notes.
Engaged our valuation specialists to assess the
reasonableness of the valuation methodology and
assumptions adopted by the Group’s independent
expert to determine the fair value of the
convertible notes.
Assessed the competency and objectivity of the
Group’s expert engaged to assess the fair value of
the convertible notes.
Tested the mathematically accuracy of the loss on
fair value recognised.
„Assessed the adequacy of the disclosures included
in the Notes to the financial statements relating to
the fair value assessment of the convertible notes.
Rehabilitation Provisions
Why significant
How our audit addressed the key audit matter
As a consequence of its operations, the Group incurs
obligations to restore and rehabilitate the area impacted by
mining activities. Rehabilitation activities are governed by a
combination of legislative requirements and Group policies.
As disclosed in Note 17 to the financial report, the Group's
consolidated statement of financial position as at 31
December 2023 includes a provision of $26.81 million in
respect of such obligations.
We considered this to be a key audit matter because of the
significant judgment and estimates associated with
estimating the rehabilitation provision including timing of
when the rehabilitation activities will take place, the extent
and cost of the rehabilitation and restoration activities and
economic assumptions such as inflation rates and discount
rates.
Our audit procedures included:
•
Assessed via enquiries of the component auditors
and review of the component auditors workpapers
the appropriateness of the changes in cost
estimates and other assumptions underpinning the
cost estimates.
• With the involvement of our subject matter
specialists, we assessed the appropriateness of the
rehabilitation cost estimates for the Renison Mine
site determined by an independent expert engaged
by management of the Renison Tin Project.
•
Assessed the qualifications, competence and
objectivity of the Group’s external expert, the work
of whom, formed the basis of the Group’s initial
rehabilitation cost estimates for the Renison mine
site.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
64
Why significant
How our audit addressed the key audit matter
•
•
•
Enquired of the component auditors and reviewed
workpapers to assess the qualifications,
competence and objectivity of the Group’s expert,
the work of whom, formed the basis of the Group’s
initial rehabilitation cost estimates for the Mt
Bischoff project.
Enquired of the component auditors and reviewed
workpapers to assess the mathematical accuracy
of the rehabilitation models and evaluate the
appropriateness of the assumed timing of
cashflows, inflation and discount rate
assumptions.
Assessed the adequacy of the disclosures relating
to the Group’s provision for rehabilitation included
in the Notes to the financial statements.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report other than the financial report and our
auditor’s report thereon. We obtained the directors’ report, corporate directory and chairman’s letter
that are to be included in the annual report, prior to the date of this auditor’s report, and we expect to
obtain the remaining sections of the annual report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
65
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
66
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 31
December 2023.
In our opinion, the Remuneration Report of Metals X Limited for the year ended 31 December 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Gavin Buckingham
Partner
Perth
29 February 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
67
MINERAL RESOURCES AND ORE RESERVES STATEMENT
Mineral Resource Estimates (50% MLX) – Consolidated Summary & Annual Comparison
Project
31 Mar 2022
Renison Bell
Rentails
Total
Mining Depletion
Renison Bell
Rentails
Total
Resource Adjustments
Renison Bell
Rentails
Total
31 Mar 2023
Renison Bell
Rentails
Tonnes1
(Mt)
19.8
23.9
43.7
(0.76)
-
(0.76)
0.98
-
0.98
20.0
23.9
Tin
(%Sn)
1.61
0.44
0.97
(1.44)
-
(1.44)
(0.08)
-
(0.08)
1.54
0.44
Copper
(%Cu)
0.20
0.22
0.21
(0.20)
-
(0.20)
0.07
-
0.07
0.19
0.22
Contained Metal
Tin
Copper
(kt)
320
104
424
(10.9)
-
(10.9)
(0.78)
-
(0.78)
308
104
(kt)
39.6
52.7
92.3
(1.50)
-
(1.50)
0.68
-
0.68
38.8
52.7
Total
1Figures are rounded according to JORC Code guidelines and may show apparent addition errors. Contained metal does not imply recoverable metal.
91.4
0.94
0.21
43.9
412
Ore Reserve Estimates (50% MLX) – Consolidated Summary & Annual Comparison
The Ore Reserve estimates are a subset of the Mineral Resource estimates
Ore
Kt
Grade
% Sn
8,848
22,310
31,158
(761)
-
1.46
0.44
0.73
1.44
-
Tin
Metal
Kt Sn
129
99
228
(11)
-
Ore
Kt
Grade
% Cu
Copper
Metal
Kt Cu
8,848
22,310
31,158
(761)
-
0.16
0.23
0.21
0.20
-
137
(22,310)
2.58
N/A
4
(99)
137
(22,310)
2.88
N/A
8,224
1.48
122
8,224
0.20
122
Renison Bell 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 Resources refer to ASX announcement dated 28 September 2023.
For further details on total Ore Reserves refer to ASX announcements dated 19 December 2023 and 2 April 2024.
8,224
8,224
1.48
0.20
The Company last undertook its annual review of Mineral Resources and Ore Reserves as at 31 March 2023,
as announced to ASX on 28 September 2023 and 19 December 2023 respectively. Since that date, immaterial
depletion has occurred due to mining activities. Further, as announced on 2 April 2024, the Company withdrew
the Rentails Ore Reserve pending an updated DFS.
The Company proposes to undertake its next annual review of Ore Reserves and Mineral Resources as at
31 March 2024, and release the results to ASX in the September Quarter 2024.
Project
31 Mar 2022
Renison Bell
Rentails
Mining Depletion
Renison Bell
Rentails
Reserve Adjustments
Renison Bell
Rentails
31 Mar 2023
Renison Bell
14
51
65
(1.5)
-
4
(51)
16
16
68
COMPETENT PERSONS STATEMENT
The information in this report that relates to Mineral Resources has been compiled by Bluestone Mines
Tasmania Joint Venture Pty Ltd technical employees under the supervision of Mr Colin Carter B.Sc. (Hons),
M.Sc. (Econ. Geol), AusIMM. Mr Carter is a full-time employee of the Bluestone Mines Tasmania Joint Venture
Pty Ltd 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 Carter consents to the inclusion in this report of the matters based on his information in the form
and context in which it appears, and to this Mineral Resources ad Ore Reserves Statement as a whole.
The information in this report that relates to Renison Bell underground Ore Reserves has been compiled by
Bluestone Mines Tasmania Joint Venture technical employees under the supervision of Mr Philip Bremner, B
Engineering (Mining Engineering), AusIMM. Mr. Bremner is a principal mining consultant at Oreteck Mining
Solutions. Mr Bremner 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 Bremner consents to the inclusion in this report of the matters based on his information
in the form and context in which it appears.
STATEMENT OF GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS
In accordance with ASX Listing Rule 5.21.5, governance of the Company’s Mineral Resources and Ore
Reserves development and management activities are managed through the management team of Renison
in Tasmania which is 50%-owned by Metals X through the BMTJV.
Senior geological and mining engineering staff of the BMTJV oversee reviews and technical evaluations of the
estimates and evaluates these with reference to actual physical, 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 BMTJV Management Committee of which Metals X has three members is responsible for monitoring the
planning, prioritisation 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 by the BMTJV:
1. Provision of internal policies, standards, procedures and guidelines;
2. 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;
3.
Internal review of process conformance and compliance; and
4.
Internal assessment of compliance and data veracity.
The BMTJV Management Committee aims to promote the maximum conversion of identified mineralisation
into Mineral Resources and Ore Reserves compliant with JORC 2012.
The Company reports its Mineral Resources and Ore Reserves, as a minimum, on an annual basis, in
accordance with ASX Listing Rule 5.21 and clause 14 of Appendix 5A (the JORC Code).
Mineral Resources are quoted inclusive of Ore Reserves. Competent Persons named by the Company are
members of the Australasian Institute of Mining and Metallurgy (AusIMM) and/or the Australian Institute of
Geoscientists (AIG) and qualify as Competent Persons as defined in the JORC Code.
CORPORATE GOVERNANCE
The Company’s 2024 Corporate Governance Statement is available for in the Corporate Governance section
of the Company’s website: https://www.metalsx.com.au/aboutus/corporate-governance/.
69
SECURITY HOLDER INFORMATION
As at 20 March 2024
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this
report is as follows. Unless otherwise stated, the information is current as at 20 March 2024.
Issued Equity Capital
Number of holders
Number on issue
Voting Rights
Ordinary Shares
4,719
907,266,067
Options
-
-
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.
Distribution of Holdings of Equity Securities
Fully Paid Ordinary Shares
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Total
Total Holders
387
986
933
2,003
410
4,719
Unmarketable Parcels
Ordinary Shares
Units
124,682
2,820,944
7,495,203
67,651,832
829,173,406
907,266,067
% Units
0.01
0.31
0.83
7.46
91.39
100.00
The number of shareholders holding less than a marketable parcel was 498 as at 20 March 2024 (being 1,409
shares based on a closing share price of $0.355 at 20 March 2024).
70 SECURITY HOLDER INFORMATION (Continued)
As at 20 March 2024
Substantial Shareholders
Substantial Shareholders as disclosed in substantial shareholder notices provided to the Company as at 20
March 2024.
APAC Resources Limited and its related bodies corporate1
Old Peak Group Ltd2
Bank of America Corporation and its related bodies corporate3
Number of Ordinary
Shares
198,021,221
59,888,019
46,825,557
Percentage
(%)
21.83
6.60
5.16
1. As lodged on 23 August 2023.
2. As lodged on 12 February 2024.
3. As lodged on 24 March 2023.
On Market Buy Back
On 1 March 2024, the Company announced an on-market share buy-back of up to 10% of its issued share
capital on-market over a 12 month period.
Number of
Ordinary Shares
Percentage
(%)
146,013,489
123,522,825
16.09
13.61
Restricted Securities
The Company has no restricted securities on issue.
Top 20 Shareholders
Rank Name
BNP Paribas Noms Pty Ltd
Citicorp Nominees Pty Limited
1
2
3
4
5
6
7
8
9
Everbright Securities Investment Services (HK) Ltd
79,636,595
BNP Paribas Nominees Pty Ltd
Jinchuan Group Ltd
Farjoy Pty Ltd
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited-GSCO ECA
J P Morgan Nominees Australia Pty Limited
10 HSBC Custody Nominees (Australia) Limited - A/C 2
11 National Nominees Limited
12
Jetosea Pty Ltd
13 BNP Paribas Nominees Pty Ltd ACF Clearstream
14 HSBC Custody Nominees (Australia) Limited
15 Mrs Yuqin Zhuang
16 NGE Capital Limited
17 Warbont Nominees Pty Ltd
18
Treasury Services Group Pty Ltd
19 Mr Ram Shanker Kangatharan
20 Mr Nyan Win + Mrs Aye Aye Kyaw
49,072,416
44,000,000
36,621,831
34,603,500
33,483,182
23,313,518
15,722,320
14,354,155
14,154,120
13,058,597
12,720,532
9,935,000
9,155,684
6,536,794
3,720,000
3,600,000
3,306,396
8.78
5.41
4.85
4.04
3.81
3.69
2.57
1.73
1.58
1.56
1.44
1.40
1.10
1.01
0.72
0.41
0.40
0.36
Total
676,530,954
74.57
71