ANNUAL REPORT
31 DECEMBER 2023
MINERAL COMMODITIES LTD ABN 39 008 478 653
Contents
4 Chairman’s review
98 Directors’ declaration
7 Chief Executive Officer’s review
100
9
Financial Report
10 Corporate directory
12 Directors’ report
43 Auditor’s Independence
Declaration
44 Financial statements
51 Notes to the consolidated
financial statements
Independent auditor’s report
to the members
104 Statement of corporate
governance
112 Mineral Resource and Ore
Reserves statement
118 Shareholder information
The consolidated financial statements are presented in United States Dollars
(“$”), unless otherwise stated, which is the Company’s presentation currency.
2
MINERAL COMMODITIES LTD | Annual Report 2023
MINERAL COMMODITIES LTD | Annual Report 2023
3
ChAIRMAN’S REvIEw
Chairman’s review
Dear Shareholders,
I am pleased to provide our Annual Report for FY2023.
MRC has had another busy year, raising further funds, advancing work on its key projects with a primary focus on
returning the heavy minerals division to profitability and increasing its asset value, while also prioritising work on
increasing the asset value of the battery minerals division.
At Tormin we have set in train the required steps to increase our ownership to 69 per cent.
we are aiming to progress work to improve plant production issues with a view to restoring Tormin to positive
earnings. A number of initiatives have been put in place including obtainment of a third primary concentrator and
upgrading to higher product value through use of Mineral Separation Plants. Unfortunately, some delays have arisen
and we are now aiming for commissioning in Q4 2024.
In 2023 we obtained 100 per cent ownership of our Skaland Operation in Norway. we are aiming to improve
production levels in 2024 after experiencing drill rig and other maintenance issues.
At Munglinup the Company continues work to advance approvals and further studies as part of its ongoing review
of the optimal structure within which we can develop a vertically integrated battery anode strategy, based on the
existing Skaland operations and the development of the larger Munglinup Graphite project.
4
MINERAL COMMODITIES LTD | Annual Report 2023
ChAIRMAN’S REvIEw
A pilot plant is now under construction and there is continued engagement with various Governments in Australia,
Europe and US to provide funding support for the project.
I would like to extend my thanks to Scott Lowe, the Company’s new CEO, and also to our wonderful global MRC
team for their unwavering support and commitment to our Company.
I look forward to being able to update all shareholders with the further progress on both our mineral sands and
graphite projects over the course of the coming year.
On behalf of the Board, I thank you for your continued support of the Company and look forward to bringing you
further news as our operations and development efforts continue.
Brian Moller
Chairman
MINERAL COMMODITIES LTD | Annual Report 2023
5
ChIEF EXECUTIvE OFFICER’S REvIEw
6
MINERAL COMMODITIES LTD | Annual Report 2023
ChIEF EXECUTIvE OFFICER’S REvIEw
Chief Executive Officer’s review
Dear Shareholders,
I would like to begin by thanking shareholders for their ongoing support and encouragement during 2023.
while the year saw the Company dealing with significant operational issues, a number of important steps were
taken towards developing the graphite business and restoring Tormin to profitability.
MRC remains significantly undervalued by the market due to a range of factors. however, the quality of its key assets
is such that there is real potential for a re-rate of the Company’s market capitalisation. Achieving market recognition
of the Company’s underlying value will require focus on the following value drivers:
• Advancing the battery minerals projects, taking advantage of the growing investor interest in critical minerals;
• Returning the heavy minerals division to profitability and cash flow generation; and
• Maintaining our commitment to ESG performance to meet the expectations of the global community.
Achievements
The Company made solid progress in a number of key areas in 2023, including:
Securing 100% of Skaland Graphite AS
The Company purchased the minority shareholder’s 10% interest in its Skaland operations for an amount
of US$1.9 million and now holds 100% of one of Europe’s only operating graphite mines.
Tormin downstream production development
An order was placed for a 3rd primary concentrator (PCP), which has been designed as an upgrade of the two
existing PCPs, with improved spirals and tailings disposition technology. Commissioning is expected in the
December quarter of 2024.
work was also undertaken on the flowsheet and plant design of Mineral Separation Plants (MSP) in line with
the GMA Offtake and US$10 million Loan Agreement, signed during the half-year ended 30 June 2023.
This project has been delayed and construction is now expected to be completed during the December quarter 2024
(previously planned for April 2024). This delay is due to test work and further analysis identifying some challenges to
the original MSP design and timetable. Addressing these issues has required some further investigation and design
work to mitigate risks.
Mining method adjustment
An external review of the Inland Strands mining method at Tormin supported recognising low-grade stockpiles
previously expensed as waste stockpiles.
Resource and reserve drilling – Maiden Resource Du Punt
The Company announced a significant maiden mineral resource at De Punt of 66.1 Mt at 7.1% vhM, containing
11.19 Mt of total heavy mineral. MRC’s total Tormin Mineral Resources of heavy mineral sands increased to
a combined estimate of 282.6 million tonnes at 3.8% vhM, containing 30.8 Mt in situ heavy mineral.
Financial performance and challenges
while the Company made improvements in 2023, it remained a challenging year financially due to a number
of operational issues both at Tormin and Skaland, necessitating a capital raising in November 2023.
Production delays at Tormin in 2023 included seawater intake interruption of processing, extended crusher
breakdown at the Inland Strand significantly reducing feed rates and sub-optimal fine tailings removal allowing
tailings build up in the water circuit and reducing the efficiency of water pumps, reducing plant availability.
Dealing with the fine material (known as “slimes”) in the inland material has proven to be more challenging than
anticipated. More recently production has been negatively impacted by poor availability of the ageing mining fleet.
Production delays at Skaland in 2023 included mining fleet breakdowns, deferral of mining while the haul road from
the mine to the main road was being resurfaced, and breakdown of the Skaland primary ore production drill rig
during the September 2023 quarter.
MINERAL COMMODITIES LTD | Annual Report 2023
7
ChIEF EXECUTIvE OFFICER’S REvIEw
A range of corrective actions have since been launched to reduce operational risks and are due for completion
in 2024 including:
Skaland
• Purchase of a new production drill rig for Skaland
Tormin
• Evaluating options for replacement and additional trucks, excavators and other mobile equipment
•
•
•
•
Introduction of the 3rd PCP
Improved security and capacity of sea water intake
Installation of double efficiency cyclones and other process changes to better handle inland strand slimes
Further work on the design and planning for the tertiary concentration MSP at Tormin to boost product value
ESG
The Company is fully committed to ESG as a way of doing business and maintaining its license to operate.
In South Africa, the ESG emphasis is on procurement and employment equity initiatives put in place in accordance
with the recommendations of the Mining Charter 2018 and promoting economic growth through the support of
small, medium and micro enterprises and suppliers of mining goods and services. Tormin will also continue to move
towards a shared profitability model with its BEE Entrepreneur, employees and the community through its restructure
of shareholding in its holding company Mineral Sands Resources (Pty) Ltd. Environmental work will be aimed at
identifying and implementing a sustainable mining framework (biodiversity management plan) and effective tailings
management. Late in Q1 2024, damage to the process water dam liner saw the Company taking immediate action
to prevent further deterioration and protect the environment.
ESG initiatives at Skaland will include investigating methods of minimisation of tailings disposal at Skaland.
Looking ahead
The Company’s focus in 2024 and beyond will be developing the battery minerals assets and improving performance
at Tormin.
Battery minerals plans include advancing studies and testing of graphite material from Skaland and Munglinup
as part of the active anode material project. work will also continue to obtain environmental authorisation and
a subsequent mining right for Munglinup.
At Tormin, efforts will concentrate on improving operational performance in mining and the process plant necessary
to return to profitability.
In addition to progressing these specific initiatives, MRC has engaged Bacchus Capital Advisors in London to assist
the Company with strategic options to enhance value for shareholders.
In conclusion, we have a very clear set of business objectives and priorities that focus on developing the graphite
assets, returning the Company to profitability and maintaining an overriding commitment to ESG.
I would like to offer sincere thanks to our valued and supportive shareholders, our dedicated employees, and all
MRC’s stakeholders.
Scott Lowe
Chief Executive Officer
8
MINERAL COMMODITIES LTD | Annual Report 2023
MINERAL COMMODITIES LTD
Mineral Commodities Ltd
ABN 39 008 478 653
Financial Report
31 December 2023
Contents
10 Corporate directory
12 Directors’ report
43 Auditor’s Independence Declaration
44
Financial statements
The consolidated financial statements are
presented in United States Dollars (“$”),
unless otherwise stated, which is the
Company’s presentation currency.
MINERAL COMMODITIES LTD | Annual Report 2023
9
CORPORATE DIRECTORY
Corporate directory
DIRECTORS
Brian Moller
Independent Non-Executive Chairman
Russell Gordon Tipper
Independent Non-Executive Director
Debbie Ntombela
Independent Non-Executive Director
Zamile David Qunya
Non-Executive Director
Guy Walker
Non-Executive Director
PRINCIPAL REGISTERED OFFICE IN AUSTRALIA
Level 2, 161 Great Eastern Highway
Belmont WA 6104
+61 (8) 6373 8900
+61 (8) 6373 8999
info@mncom.com.au
Telephone:
Facsimile:
Email:
AUDITORS
BDO Audit (WA) Pty Ltd
Level 9
Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
BANKERS
Westpac Banking Corporation
Brookfield Place, Tower 2
Level 3, 123 St Georges Terrace
Perth WA 6000
SHARE REGISTRY
Link Market Services Limited
Level 12, QV1 Building
250 St Georges Terrace
Perth WA 6000
STOCK EXCHANGE LISTING
The Company’s shares are listed on the Australian Securities Exchange (“ASX”) under ASX Code MRC
WEBSITE ADDRESS
www.mineralcommodities.com
10
MINERAL COMMODITIES LTD | Annual Report 2023
COMPETENT PERSON STATEMENT
Competent Person statement
Tormin – The information in this report which relates to Mineral Resources for Tormin, including Tormin Beaches,
Northern Beaches, and Inland Strands, is based on information compiled by Mr Chris De vitry who is a member of
AusIMM and an independent consultant to the Company. Mr De vitry is the Director and Principal Geologist of Manna
hill GeoConsulting Pty Ltd. Mr De vitry has sufficient experience which is relevant to the style of mineralisation and types
of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person in accordance with
the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
(“JORC Code (2012)”). The information from Mr De vitry was prepared under the JORC Code (2012). Mr De vitry
consents to inclusion in the report of the matters based on this information in the form and context in which it appears.
The information in this report related to Ore Reserve for Tormin is based on information compiled by Mr Daniel hastings,
who is a member of the Australian Institute of Mining and Metallurgy (“AusIMM”)). Mr hastings is an employee of
Quantified Strategies Pty Ltd and a consultant to the Company. he has sufficient experience which is relevant to the
style of mineralisation and types of deposit under consideration and to the activity he is undertaking to qualify as a
Competent Person in accordance with the JORC Code (2012). The information from Mr hastings was prepared under
the Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code
(2012)”). Mr hastings consents to the inclusion in the report in the form and context in which it appears.
Xolobeni – The information, if any, in this report which relates to Mineral Resources for Xolobeni is based on
information compiled by Mr Allen Maynard, who is a Member of the Australian Institute of Geosciences (“AIG”), a
Corporate Member of AusIMM and independent consultant to the Company. Mr Maynard is the Director and Principal
Geologist of Al Maynard & Associates Pty Ltd and has over 40 years of exploration and mining experience in a variety of
mineral deposit styles. Mr Maynard has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in
the 2004 Edition of the Australasian Code for reporting of Exploration Results, Exploration Targets, Mineral Resources
and Ore Reserves (“JORC Code (2004)”). This information was prepared and first disclosed under the JORC Code
(2004). It has not been updated since to comply with the JORC Code (2012) on the basis that the information has not
materially changed since it was last reported. Mr Maynard consents to inclusion in the report of the matters based on
this information in the form and context in which it appears.
Skaland – The information in this report which relates to Mineral Resources for Trælen, is based on information
compiled by Mr Daniel hastings, who is a member of the Australian Institute of Mining and Metallurgy (“AusIMM”)).
Mr hastings is an employee of Quantified Strategies Pty Ltd and a consultant to the Company. he has sufficient
experience which is relevant to the style of mineralisation and types of deposit under consideration and to the activity
he is undertaking to qualify as a Competent Person in accordance with the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code (2012)”). The information from
Mr hastings was prepared under the JORC Code (2012). Mr hastings consents to inclusion in the report of the matters
based on this information in the form and context in which it appears.
The information in this report related to Ore Reserve for Trælen is based on information compiled by Mr Esko Pystynen,
who is a member of the Australian Institute of Materials, Minerals and Mining (“IMMM”)). Mr Pystynen is a mining
engineer and an employee of Skaland. he has sufficient experience which is relevant to the style of mineralisation
and types of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person in
accordance with the JORC Code (2012). The information from Mr Pystynen was prepared under the Australian Code
for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code (2012)”). Mr Pystynen
consents to the inclusion in the report in the form and context in which it appears.
Munglinup – The information, if any, in this report which relates to Mineral Resources for Munglinup is based on
information compiled by Mr Chris De vitry who is a member of AusIMM and an independent consultant to the Company.
Mr De vitry is the Director and Principal Geologist of Manna hill GeoConsulting Pty Ltd. Mr De vitry has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity
he is undertaking to qualify as a Competent Person as defined by the JORC Code (2012). Mr De vitry consents to the
inclusion in the report of the matters based on this information in the form and context in which it appears.
The information in this report which relates to the Ore Reserve for Munglinup is based on information compiled by
Mr Daniel hastings, who is a Member of AusIMM. Mr hastings is an employee of Quantified Strategies Pty Ltd and a
consultant to the Company. Mr hastings has sufficient experience relevant to the type of deposit under consideration to
qualify as a Competent Person as defined by the JORC Code (2012). Mr hastings consents to the inclusion in the report
of the matters based on the reviewed information in the form and context in which it appears.
MINERAL COMMODITIES LTD | Annual Report 2023
11
DIRECTORS’ REPORT
Directors’ report
Your Directors present their report on the consolidated entity (referred to hereafter as “MRC” or the “Group”)
consisting of Mineral Commodities Ltd (the “Company”) and the entities it controlled at the end of, or during, the
year ended 31 December 2023. The consolidated financial statements are presented in United States Dollars (“$”),
unless otherwise stated, which is the Company’s presentation currency.
Directors
The following persons were Directors of the Company during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Brian Moller
Independent Non-Executive Chairman
Russell Gordon Tipper
Independent Non-Executive Director
Guy Walker
Non-Executive Director
Zamile David Qunya
Non-Executive Director
Debbie Ntombela
Independent Non-Executive Director
Principal activities
The principal activities of the Group during the year were:
• mineral sands mining and processing at the Group’s Tormin Mineral Sands Operation (“Tormin” or the
“Tormin Operation”) in the western Cape province of South Africa;
• graphite mining and processing at the Group’s Skaland Graphite Operation (“Skaland” or the “Skaland
Operation”) in northern Norway on the island of Senja;
12
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
•
•
undertaking exploration and evaluation for the future development of the Munglinup Graphite Project
(“Munglinup” or the “Munglinup Project”) in the Great Southern region of western Australia; and
undertaking evaluation for the future development of an Active Anode Materials Plant (“AAMP”) to produce
graphitic anode materials in Australia and Norway.
Review of operations
The Company provides shareholders with an update of the Company’s activities during the year ended 31 December
2023. The year was focused on investing in long term income producing assets aimed at returning Tormin to
profitability and increasing the asset value of our heavy mineral and battery mineral divisions.
In line with the Company’s vision of “enabling a better world through sustainable and responsible production of
critical and industrial minerals and products” MRC is highly focused on environmental management, good corporate
citizenship and long-term sustainable value for all stakeholders.
The Company’s strategy incorporates initiatives aimed at achieving the following goals:
• Return the heavy Minerals Division to profitability and positive cash flow generation, then increase its scale of
operations;
• Advance and develop assets in the Battery Minerals Division to meet the growing global demand of the electric
vehicle and battery storage sectors; and
• Continue to focus on Environment, Social and Governance (ESG) performance to meet the growing expectations
of the global community and stakeholders.
Explanation of results
The lower sales revenue during the 2023 financial year reflects lower Tormin concentrate production due to
various production issues outlined below and significant ilmenite and non-mags inventory deferred into 2024.
A 48 Kt ilmenite shipment sailed in January 2024 with sale proceeds of $6.2 million.
The loss after tax of $10,062,526 includes an $8,938,322 impairment of assets that includes:
• Prudent write down of the carrying value of the Xolobeni exploration asset, given the moratorium over the asset
has not been officially lifted and there is question over the probability of the development and commercial
exploitation of this asset in this ongoing environment;
•
•
Intangible mine properties assets at Tormin and Skaland; and
a long term receivable with our BEE Partner at Tormin, which is expected to be included as an acquisition
cost as a part of the proposed Mineral Sands Resources Proprietary Limited (“MSR”) Restructure that aims
to increase the Company’s ownership interest in Tormin from 50% to 69% (refer Growing Tormin Ownership
section below).
EBITDA performance in 2023 recognises that while the business did recognise a loss in 2023 it did improve its
operating position going into 2024, with a significant increase in inventory on hand as at 31 December 2023,
which is available for future cash flows. Impairment expense recognised in 2023 has been excluded from EBITDA.
Final 2023 EBITDA recognised of $1,705,019 is lower than EBITDA recognised the 2023 Preliminary Financial
Report of $3,358,464 due to reclassification of lease costs from interest expense, which is adjusted in the EBITDA
reconciliation, to general finance costs.
Tormin profitability
The Company has sought to return Tormin to profitability by focusing on the development of three income producing
assets in 2023:
1.
Introduction of mining and processing from the Inland Strands after various process changes, including the
introduction of crushing, scrubbing and tailings management to the processing circuit. Commissioning of
these changes to process Inland Strands feed material into Tormin’s various end products was completed on
27 March 2023. These changes increased the throughput feed capacity of Tormin from 2.4 Mtpa to 2.7 Mtpa but
importantly also provides the option of limiting beach mining moving forward to 1.5 Mta from previous 2.4 Mtpa,
with the remaining 1.2 Mtpa being sourced from Inland Strands material. This option allows mine planning
flexibility to optimise the mix of beach and inland material and where practicable, allow for replenishment of
Tormin’s placer beach deposits. By balancing the feed mix, there is enhanced potential for beach mining at
higher grades, improving the long-term profitability of beach mined material;
MINERAL COMMODITIES LTD | Annual Report 2023
13
DIRECTORS’ REPORT
2. Adding a third Primary Concentration Plant (PCP), which aims to increase the throughput feed capacity of
Tormin from 2.7 Mtpa to 3.9 Mtpa. Funding for the third PCP was included in the rights issue that was completed
in November 2023. with the completion of Inland Strands plant commissioning, management have turned their
attention to adding this key asset by Q4, 2024. The design of the third concentrator has since been upgraded
to improve product recoveries with new technology, which has delayed expected implementation to Q4 2024.
The benefit of this additional processing capacity is the economies of scale impact on profitability by increasing
production, with minimal additional variable operating costs. Management signed the construction contract for
PCP3 subsequent to year end and expect completion by the end of Q3 2024; and
3. Adding garnet and ilmenite mineral separation plants (MSPs). Tormin has produced concentrate products since
inception at reasonable margins. Further processing via MSPs aims to convert these concentrate products into
finished products, which are expected to generate better profit margins. This project has been delayed and
is now expected to be commissioning during Q4 2024 (previously planned for April 2024). This delay is due to
test work and further analysis completed during the current quarter identifying some challenges to the original
MSP design and timetable. Addressing these issues will require some further investigation and design work to
mitigate risks. In parallel with further investigations, procurement and long lead construction of the MSPs circuit
(including water supply and slimes management improvements) has commenced with funding via the GMA
Group (GMA) US$10 million Loan Agreement, that is underpinned by a long-term offtake agreement with GMA.
MRC remains focussed on completing the work necessary to deliver MSPs that meet GMA offtake specifications
and is collaborating with its partner GMA.
Tormin Garnet Offtake and Loan Agreement
During the 2023 financial year Tormin secured MSP funding and 10-year finished garnet offtake agreements with
GMA Group. The contracts included a long term Offtake Agreement and a Loan Agreement to fund the introduction
of MSPs. The principal terms of the Agreements are outlined below:
• Mineral Sands Resources (Pty) Ltd (“MSR”) agrees to supply GMA Group with finished garnet product in the
following volumes:
(i) 2024–2025 – 80 ktpa;
(ii) 2026–2028 – 105 ktpa; and
(iii) 2029–2033, subject to renewal at GMA’s election – 125 ktpa; and
• GMA Group agrees to provide MSR with US$10,000,000 in loan funding, repayable over 5 years, on commercial
terms to fund the design and construction of an MSP in the western Cape Region of South Africa. The size and
scope of the MSP in terms of capacity and product type (garnet, ilmenite, zircon or rutile) is at MSR’s discretion,
with a minimum garnet concentrate feed of 200 ktpa the only specified requirement under the GMA Agreements.
MSR intends for all garnet and ilmenite concentrate feedstock to be processed through the MSP.
Tormin Resources and Reserves
The Inland Strands reserve upgrade announced in April 2023 increased the total ore reserve by 177% and by 181%
for the ore reserve within the current Expanded Mining Right. This increase provides a foundation for the Company to
consider increasing feed production beyond 3.9 Mtpa, subject to stakeholder approvals. The updated total ore reserve
is 60.3 million tonnes at 3.7% vhM (14.7% ThM) containing 2.21 million tonnes of heavy mineral, while the updated
EMR ore reserve is 21.5 million tonnes at 5.4% vhM (21.0% ThM) containing 1.17 million tonnes of heavy mineral.
Additionally, the announced De Punt resource (66.1 million tonnes at 7.1% vhM, adjacent to Tormin), provided a 31%
increase in total Tormin mineral resource tonnes and a 57% increase in total Tormin mineral resource in situ heavy
mineral, increasing resources aimed at significantly increasing the asset value of the heavy Minerals Division by
further increasing potential scale of operations.
Growing Tormin ownership
During 2023 the Company entered into formal agreements (Restructure Agreements) for the restructure of its holding
in MSR in order to align with the recommendations of the Broad-Based Socio-Economic Empowerment Charter for
the Mining and Minerals Industry, 2018 (as amended) (the “2018 Mining Charter”).
To date MRC has developed and operated the project via its 50% shareholding in MSR through its subsidiary
MRC Resources (Pty) Ltd (MRCR), with the remaining 50% of MSR owned by the Company’s existing empowerment
partner, Blue Bantry Investments 255 (Pty) Ltd (Blue Bantry). Following completion of the restructure of MSR,
MSR’s ownership structure will change to being 69% owned by MRCR, 21% owned by Blue Bantry, 5% owned by
employees and 5% owned by the community. Obtainment of regulatory approval of this transaction is ongoing.
14
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
Battery Minerals
The Company’s focus in the Battery Minerals Division in 2023 was advancing work on the graphite ore-to-battery
anode pilot plant and testwork, required to advance its feasibility study for an active anode materials production
plant. The Company completed design of the graphite ore-to-battery anode pilot plant and began procurement,
aiming for completed construction before June 2024. Active anode material is the final precursor to commercial scale
anode production.
During the year, work also continued on obtaining environmental authorisation for Munglinup (MRC 51% ownership).
Looking ahead, the Company would also like to explore increasing its graphite reserves and resources when funding
is available.
On 4 July 2023 MRC entered into an agreement to settle the disputes between MRC Graphite (Norway) Pty Ltd
(a subsidiary of the Company) (MRCGN) and minority ~10% shareholder BSG Mining LLC (BSG). The settlement
resulted in MRCGN obtaining 100% ownership of Skaland Graphite AS (“Skaland”) by acquiring BSG’s ~10%
shareholding in Skaland for a total of US$1,900,000. MRCGN and BSG have agreed to a confidential settlement
of all disputes between them on a “no admission as to liability” basis, and executed a Deed of Settlement
(Settlement Deed) in that regard. The terms of the Settlement Deed are fully executed and MRCGN has obtained
100% ownership of Skaland.
The Battery Minerals division placed additional pressure on MRC cash flows due to the unbudgeted settlement
payment, significant dispute legal costs and production delays at Skaland in the second half of 2023. Unplanned
delays included mining fleet breakdowns, deferral of mining while the haul road from the mine to the main road was
being resurfaced, breakdown of the Skaland primary ore production drill rig and breakdown of the primary AG mill
for Skaland ore processing.
Increasing Battery Minerals asset value from 2024 will be aimed at potential expansion of Skaland production and
advancing studies on development projects, subject to funding.
Environmental and Social Governance (ESG)
MRC’s ESG focus will continue in 2024 with Tormin moving towards a shared profitability model with its
BEE Entrepreneur, employees and the community through its restructure of shareholding in MSR and
ongoing procurement transformation. Environmental work will prioritise effective management of tailings
disposition from Inland Strands at Tormin and regulated deposition of tailings into the nearby fjord at Skaland.
Community engagement will remain a priority in all operating areas.
Safety, Environment, Community and Sustainability
The ongoing commitment to developing a safe working environment and culture continues. Encouragingly, this year
saw the three-month and the twelve-month rolling TRIFR remain at nil at both operating sites. There were no LTIs
during the financial year. Importantly, the Company maintained a no fatality track record across all of its operations
since inception. The Group’s safety performance is outlined below:
TOTAL RECORDABLE INJURY FREQUENCY (PER MILLION HOURS WORKED)
Year ended 31 December
2023
2022
Group
–
–
–
South Africa
Norway
Australia
–
–
–
–
–
–
–
–
2021
4.83
4.24
12.91
–
LOST TIME INJURIES (LTI) INCIDENTS RECORDED
Year ended 31 December
2023
2022
2021
Group
–
–
–
South Africa
Norway
Australia
–
–
–
–
–
–
–
–
1
–
1
–
MINERAL COMMODITIES LTD | Annual Report 2023
15
DIRECTORS’ REPORT
There were no environmental non-compliance or incidents during the year. The Company has moved to investigate
further risk mitigation in terms of currently permitted tailings disposal and reducing any detrimental environmental
deposition into the environment.
The Company recognises the growing pressure and competition for environmental resources such as land,
water and air, which are amplified by the effects of climate change. The Company manages and operates its assets
with a clear understanding that the performance and management of these environmental impacts are critical to
all operations in the mining sector. The Company has comprehensive risk management policies and procedures
that set the guidelines of achieving environmental compliance and is fully cognisant of the importance of a social
operating license and its effects on the communities in which we operate.
The Company is pleased to announce that there were no significant environmental incidents during the year.
Given the sensitivities of the coastal operating environment at Tormin and the proximity of Skaland’s operations to
fjords, the Company considers this evidence of its commitment to environmental and operational discipline.
The Company and its subsidiaries source a range of goods and services through a global supply chain. It is
recognised that there is a potential for modern slavery to exist in the form of slavery, forced labour, debt bondage,
human trafficking and child labour. All forms of modern slavery involve the deprivation of a person’s liberty to
exploit them for commercial or personal gain and amount to a violation of an individual’s fundamental human rights.
while there are currently no legal requirements for MRC to report its actions regarding modern slavery, the Company
is committed to ensuring open, fair and transparent procurement, logistics and supply functions.
MRC seeks to prevent or mitigate any negative human rights impacts in connection with its operations or activities.
MRC also provides safe and fair working conditions for all its employees and ensures that no child labour is employed,
in line with minimum age laws. The Company expects the same standards from contractors, suppliers and stakeholders
and requires that they hold the same standards throughout their procurement and supply chain processes.
16
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
Under the Company’s Social Labour Plan (SLP) at Tormin, the Company has invested circa ZAR5.3 million
during the financial year into various learnership, internship and bursary programs to benefit both employees
and community students. Initiatives within the local community and workplace include bursaries, scholarships,
traineeships, internships, apprenticeships, and adult basic education programs.
Tormin Mineral Sands Operation
Tormin Operational and Financial Performance
2023 saw below expectation operational performance, resulting in negative operating cash flows from Tormin.
The Company’s financial results for the financial year ended 31 December 2023 highlight the impact of these
operational challenges. Production delays at Tormin in 2023 included seawater intake interruption of processing,
extended crusher breakdown at the Inland Strand significantly reducing feed rates and sub-optimal fine tailings
removal allowing tailings build up in the water circuit and reducing the efficiency of water pumps, reducing plant
availability. Management has devised a plan to seek to address these issues. however, the proposed solutions
require long lead time items and delayed delivery of components has impacted the plant output, increasing the strain
on operating cash flows. The Company’s production during the financial year ended 31 December 2023 was below
theoretical production rates due to various factors, including:
• Sub-optimal fine tailings removal – Fine tailings from the Inland Strands processing circuit reduces product
grades by entraining other minerals and causing significant process plant downtime. Two (2) solutions to this
problem have been identified: (i) double efficiency cyclones to increase the removal of fine tailings from ore
upon presentation to the PCP; and (ii) a new water circulation circuit including a fresh seawater infeed line to the
secondary process plant and a return line. These two solutions are fully funded as part of the Loan Agreement
with GMA and are expected to be in operation by 30 June 2024;
• Poor crusher availability – A rental scalping screen has been successfully added to improve feed availability for
Inland Strands material processing. This significantly improved production in the December 2023 quarter; and
• Seawater intake interruption – A more permanent seawater intake system solution has been finalised and
procured. This solution is being funded through the Loan Agreement with GMA and has been designed to
increase volume and reduce risk of storm damage to stabilise production by the end of 2024. Storm water
damage greatly impacted operations in 2023.
These production issues, combined with ongoing SARS disputes on cash receivables, meant a need for additional
funding, which led to a rights issue in the second half of 2023. The additional A$8.8 million of capital raised in the
rights issue aimed to address accounts payable, immediate working capital needs and necessary further investment
aimed at delivering long term positive cash flow generation from the Group’s mining operations.
Key production and sales metrics were:
Mining Production
High Grade Ore Mined – Tonnes (dmt)
% VHM Grade
Garnet
Ilmenite
Zircon
Rutile
Full Year to
31 December 2023
Full Year to
31 December 2022
1,021,970
3,225,319
8.8%
6.5%
1.5%
0.5%
0.3%
11.2%
8.0%
2.3%
0.6%
0.3%
Low Grade Ore Mined – Tonnes (dmt)
1,290,455
179,035
Tormin reduced total high grade material mined during 2023 to 1.0 million tonnes, with a valuable heavy Mineral
(“vhM”) grade of 8.8% in comparison to the previous year of 11.2%. The decreased vhM grade reflects no Inland
Strands ore mining from the high-grade South Pit in comparison to the previous year, given the large stockpiles
already in place at the start of 2023. Better than expected tailings dewatering performance means new tailings pits
will not need to be mined out as quickly as budgeted, reducing total material mined expectations. Mining will ramp up
again in the June 2024 quarter as remaining Inland Strands South pit ore inventory processing becomes fully depleted.
MINERAL COMMODITIES LTD | Annual Report 2023
17
DIRECTORS’ REPORT
Tormin year-to-date total material moved is 32% below 2023, with mining deferred into 2024 given the large
stockpiles already in place at the start of the financial year and slower than expected processing of South Pit ore.
Significant Inland Strands ROM stockpiles were available at the start of 2023 in anticipation of further optimisation of
the primary concentration circuit and tailings discharge facilities, which was commissioned in the March 2023 quarter.
Processing & Production
Primary Beach Concentrators
Tonnes processed (dmt)
Heavy mineral concentrate (dmt)
% Heavy mineral grade
Garnet Stripping Plant/Secondary Concentrator Plant
Tonnes processed (dmt)
Tonnes produced (dmt)
Garnet concentrate (net)
Ilmenite concentrate (net)
Zircon/Rutile concentrate
% Zircon in concentrate
% Rutile in concentrate
Full Year to
31 December 2023
Full Year to
31 December 2022
1,441,654
2,482,392
405,456
42.7%
513,149
38.1%
305,340
510,540
96,485
67,785
11,202
71.3%
16.5%
178,766
35,256
7,309
73.8%
17.5%
ROM feed to the PBCs for the financial year was 1,441,654 tonnes at an average feed rate of 271 tonnes per hour
(tph) at 57% plant utilisation, with the throughput 42% below the previous year’s 2,482,392 tonnes at an average feed
rate of 326 tph at 91% plant utilisation. The Company’s lower processing rate of PCPs during the current financial
year was due to Inland Strands plant tie-ins, commissioning, optimisation of the GSP to handle varied Inland Strand
material and seawater intake issues.
heavy mineral concentrate (HMC) produced was below the previous financial year due to 42% lower tonnes
processed during the financial year. Total hMC mineral content however was only 11.4% below the previous financial
year due to the significantly higher ore grade processed from the Inland Strands South Pit.
Garnet Stripping Plant/Secondary Concentration Plant (GSP/SCP) feed of 305,340 tonnes was below the prior
year’s 510,540 tonnes. The GSP/SCP operated at 58% utilisation with an infeed throughput rate of 75 tph.
Lower production reflects the slowed infeed throughput rate in comparison to the previous year for testing Inland
Strands production and then seeks to optimise plant setup for the Inland Strands feedstock, without any significant
decrease in grade recoveries.
Total tonnes produced by the GSP/SCP was 175 kt, compared to 221 kt from the previous year. higher ilmenite and
non-mags production, offset by lower garnet production, reflects the transition to Inland Strands ore processing.
Sales (wmt)
Garnet concentrate
Ilmenite concentrate
Zircon/Rutile concentrate
Full Year to
31 December 2023
Full Year to
31 December 2022
64,610
33,377
8,896
144,519
46,678
9,929
18
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
Product sales revenue at Tormin for the financial year was US$22.1 million for a total 106,883 wet metric tonnes
sold, below the prior financial year’s revenue of US$36.5 million for 201,126 wet metric tonnes sold. The lower sales
revenue reflects lower concentrate production due to various production issues outlined above and significant
ilmenite and non-mags inventory deferred into 2024. A 48 Kt ilmenite shipment sailed in January 2024 with sale
proceeds of $6.2 million.
The following table summarises Tormin’s unit costs and revenues for the year to 31 December 2023:
Summary of Unit Costs & Revenues
Unit production cash costs per tonne of net final concentrate produced ($/dmt)
Unit cost of goods sold per tonne of final concentrate sold ($/wmt) (1)
Unit revenue per tonne of final concentrate sold ($/wmt)
Revenue to Cost of Goods Sold Ratio
Full Year to
31 December 2023
Full Year to
31 December 2022
127.22
166.06
206.87
1.25
123.12
163.16
177.53
1.09
(1)
Cost of goods sold includes production cash costs, product handling, transport and selling costs, royalties, stock movements, and depreciation and amortisation.
Excludes corporate and financing costs.
2023 unit production cash costs and unit cost of goods sold are in line with 2022. higher unit revenue in 2023 in
comparison to 2022 reflects a higher proportion of zircon/rutile concentrate sales in the current financial year with
the introduction of processing from the high grade Inlands Strands deposit.
work is underway, aiming to improve plant production rates from the June quarter 2024 including repairs and
upgrades to mobile equipment fleet and process plant improvements.
Exploration and Permitting
The Company’s successful exploration and initial resource at De Punt was outlined in the heavy Minerals Division
achievements during the financial year, above.
The Company has one Prospecting Right under application, adjoining PR10262 on the Company owned farm,
Geelwal Karoo 262:
• PR10348 – Klipvley, immediately to the north, covers an area approximately 16 km in length and 3,970 hectares.
The area is highly prospective for the continuation of western and Eastern Inland Strandlines due to the nature of
constant mineralisation along the coastal zone. Drilling conducted to the northern extremity of PR10262 intersected
the western Inland Strandline open and continuing north of the delineated ore body.
The Company’s reported a material increase in its JORC Ore Reserve for the western Strandline of the Tormin Mineral
Sands Operation, which was outlined in the heavy Minerals Division achievements during the financial year, above.
with the addition of De Punt, MSR’s total Tormin JORC Mineral Resources of heavy mineral sands increased to
a combined estimate of 282.6 million tonnes at 10.9% ThM, containing 30.8 million tonnes in situ heavy mineral
(previously 216.5 million tonnes at 9.1% ThM, containing 19.6 million tonnes in situ heavy mineral). This represents a:
• 31% increase in Tormin mineral resource tonnes; and
• 57% increase in Tormin mineral resource in situ heavy mineral.
MINERAL COMMODITIES LTD | Annual Report 2023
19
DIRECTORS’ REPORT
Tormin Resource Activities
The Tormin Mineral Resource review for the Tormin Beaches was completed in April 2023, with results as follows:
Category
Tonnes Mined – FY2022
Resource – Apr 2023
Tonnes Mined – FY2023
Resource
(Mt)
1.38
2.05
0.11
HM
(%)
9.12
5.79
9.38
Zircon
(%)
0.34
0.25
0.41
Garnet
(%)
7.52
4.49
7.96
Ilmenite
(%)
0.86
0.56
0.70
Rutile
(%)
0.24
0.13
0.20
•
•
2% THM cut-off grade used
HM includes other valuable heavy minerals e.g., anatase and magnetite
The Company provided its most recent Tormin Beaches Annual Resource Update to the market in April 2023,
recognising a resource of 2.05 million tonnes at 10.3% ThM (5.52% hM), based on a 2% heavy mineral cut-off
grade. The Tormin Beaches deposit is an active placer beach sand deposit limited in extent on its eastern side by
coastal cliffs and to depth by bedrock contact. The resource is open towards the ocean and surf zone on its western
side, as well as along the coastline towards the north and south.
Total Mineral Resources for the Tormin Beaches Deposit (2% THM cut-off grade)
Category
Measured
Indicated
Total
Tonnes
(Mt)
1.86
0.19
2.05
THM
(%)
10.3
10.1
10.3
In Situ
THM (Mt)
Zircon
(% HM)
Garnet
(% HM)
Ilmenite
(% HM)
Rutile
(% HM)
Anatase
(% HM)
Magnetite
(% HM)
0.19
0.02
0.21
2.5
2.3
2.5
43.1
48.9
43.6
5.4
5.0
5.4
1.3
1.2
1.3
0.1
0.1
0.1
0.6
0.7
0.7
•
Mineral assemblage reported as in situ percentage of THM content
20
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
Since commencement of operations at Tormin, the Company has mined in excess of 16.53 million tonnes. The tonnage
mined is more than six times the original declared resource tonnage (2.70 million tonnes), which is indicative of the
significant replenishing nature of the deposit where resource blocks are mined more than once per year.
The Tormin Mineral Resource review for the Northern Beaches was completed in April 2023, with results as follows:
Category
Tonnes Mined – FY2022
Resource – Apr 2023
Tonnes Mined – FY2023
Resource
(Mt)
1.42
1.72
0.86
HM
(%)
10.50
15.8
7.83
Zircon
(%)
0.47
0.41
0.46
Garnet
(%)
8.41
7.68
5.92
Ilmenite
(%)
1.24
1.02
1.13
Rutile
(%)
0.26
0.21
0.23
The Company provided its most recent Northern Beaches Annual Resource Update to the market in April 2023,
recognising a resource estimated at 1.72 million tonnes at 15.8% ThM in the category of Measured, Indicated and
Inferred, based on a 2% heavy mineral cut-off grade. The Northern Beaches incorporate ten beaches directly north
of and adjoining the Tormin Beaches. The areas unite semi-continuous tenements approximately 23.5 kilometres in
length, covering an area of 398 hectares of beach sands prospective for zircon, rutile, ilmenite, garnet, leucoxene
and magnetite. Like the Tormin Beaches, this deposit is located on an active placer beach undergoing continuous
replenishment from oceanic storm and wave activity. The heavy minerals in the beach are constantly replenished by
the transport of new sediment from deeper waters, much of which has been derived from the erosion of deposits
accumulated in the elevated historic beach terraces onto the present beach.
Total Mineral Resources for the Northern Beaches HM Deposit (2% cut-off grade)
Cat egory
Indicated
Inferred
Total
Tonnes
(Mt)
1.49
0.23
1.72
THM
(%)
17.2
6.9
15.8
In Situ
THM (Mt)
Zircon
(% HM)
Garnet
(% HM)
Ilmenite
(% HM)
Rutile
(% HM)
Anatase
(% HM)
Magnetite
(% HM)
0.26
0.02
0.27
2.6
2.2
2.6
49.6
41.7
48.6
6.8
4.5
6.5
1.3
1.3
1.3
0.1
0.0
0.1
0.6
0.8
0.6
•
Mineral assemblage reported as in situ percentage of THM content
The Company provided its Inland Strands Annual Resource Update to the market in April 2023.
The Inland Strands mining areas granted under the Expanded Mining Right (162&163EM) in mid-2020 include two
areas approximately 5.6 kilometres in total length, covering 75 hectares of high-grade mineralisation adjacent to the
existing mining operations on the Company owned farm, Geelwal Karoo 262. The Inland Strands Mining Right areas
are part of the Inland Strands Prospecting Right 10262, which incorporates an area approximately 12 kilometres in
length, covering 1,741 hectares.
The JORC compliant Mineral Resource of the western Strandline was estimated in April 2023 at 193.2 million tonnes
at 9.58% ThM for 18.5 Mt of contained heavy Mineral using a 2% cut-off.
Total Mineral Resources for the Western Strandline Deposit (2% cut-off grade)
In Situ
THM (Mt)
Zircon
(% HM)
Garnet
(% HM)
Ilmenite
(% HM)
Rutile
(% HM)
Anatase
(% HM)
Magnetite
(% HM)
Category
Measured
Indicated
Inferred
Stockpile
Total
Tonnes
(Mt)
32.7
39.7
119.2
1.60
193.2
THM
(%)
19.21
9.48
6.93
12.84
6.20
3.70
8.20
0.20
9.58
18.50
•
•
Mineral assemblage reported as in situ percentage of THM content
Tonnes and grade numbers may not compute due to rounding.
1.82
1.05
2.60
4.21
2.16
12.49
14.77
10.68
18.85
11.89
7.91
3.80
18.04
25.78
13.46
1.09
0.84
1.44
1.95
1.26
0.21
0.21
0.29
0.39
0.25
0.52
0.74
0.43
0.78
0.51
MINERAL COMMODITIES LTD | Annual Report 2023
21
DIRECTORS’ REPORT
The Mineral Resource of Eastern Strandline is estimated at 19.5 million tonnes at 3.36% ThM in the categories of
Indicated and Inferred using a 2% ThM cut-off grade and was reported in April 2023. This maiden Mineral Resource
demonstrates the prospectivity of the inland strandline areas and underscores the Company’s strategy of growing
the resources for mineral processing expansion.
Total Mineral Resources for the Eastern Strandline Deposit (2% cut-off grade)
Category
Indicated
Inferred
Total
Tonnes
(Mt)
1.90
17.5
19.5
THM
(%)
5.34
3.13
3.36
In Situ
THM (Mt)
Zircon
(% HM)
Garnet
(% HM)
Ilmenite
(% HM)
Rutile
(% HM)
Anatase
(% HM)
Magnetite
(% HM)
0.10
0.50
0.60
6.12
6.35
6.32
15.71
14.39
14.52
35.44
36.74
36.60
7.73
6.09
6.25
0.92
1.19
1.16
0.89
0.51
0.57
•
•
Mineral assemblage reported as in situ percentage of THM content
Tonnes and grade numbers may not compute due to rounding.
The Inland Strands deposit presents a significant mineral sands asset for the Company which offers material
extension of mine life. The opportunity to develop mining in the western Strandline is an important turning point for
the Company in realising the value of the world-class Tormin Mineral Sands Operation.
MSR is considering a final phase-3 drilling program designed to infill the existing targeted resource areas in the
known mineralised zones on the Eastern and western Strandlines as part of a strategy to unlock the full potential
of the Prospecting Right.
The development of the western Strandline is expected to allow the Tormin and Northern Beaches mining area to
satisfactorily replenish.
The De Punt Inland Strands mining area was granted under Prospecting Right 10240PR in July 2022, covering
4,495 hectares and potentially hosting southern extensions of the western and Eastern Strandline deposits.
This prospecting area is 13 km long, to the south of the existing western Strandline deposit and adjacent to the
existing mining operations.
The initial Mineral Resource of De Punt is estimated at 66.1 million tonnes at 16.9% ThM in the categories of
Indicated and Inferred using a 2% ThM cut-off grade and was reported in May 2023. This maiden Mineral Resource
demonstrates the prospectivity of the inland strandline areas and underscores the Company’s strategy of growing
the resources for mineral processing expansion.
Total Mineral Resources for the De Punt Strandline Deposit (2% cut-off grade)
Category
Indicated
Inferred
Total
Tonnes
(Mt)
26.9
39.2
66.1
THM
(%)
15.1
18.2
16.9
In Situ
THM (Mt)
Zircon
(% HM)
Garnet
(% HM)
Ilmenite
(% HM)
Rutile
(% HM)
Anatase
(% HM)
Magnetite
(% HM)
4.06
7.13
11.2
4.45
3.25
3.74
21.1
17.1
18.7
18.2
14.5
16.0
2.75
2.1
2.36
0.24
0.17
0.20
0.90
1.17
1.06
•
•
Mineral assemblage reported as in situ percentage of THM content
Tonnes and grade numbers may not compute due to rounding.
MRC’s total Tormin Mineral Resources of heavy mineral sands increased to a combined estimate of 282.6 million
tonnes at 10.9% ThM, containing 30.8 million tonnes in situ heavy mineral (previously 216.5 million tonnes at 9.1%
ThM, containing 19.6 million tonnes in situ heavy mineral).
• 31% increase in Tormin mineral resource tonnes.
• 57% increase in Tormin mineral resource in situ heavy mineral.
There is significant potential to increase Mineral Resources given only one of the seven identified De Punt exploration
targets has been drilled.
This increase in the overall Mineral Resources at Tormin reflects the Company’s focused commitment to its Strategic
Plan, which aims to increase Tormin’s asset value by expanding mineral resources and reserves through organic
growth with the aim of significantly increasing production and returning Tormin to strong profitability levels.
22
MINERAL COMMODITIES LTD | Annual Report 2023
The Tormin Beaches, Northern Beaches and Inland Strands Annual Resource Update will be revised for MRC’s 2023
annual report.
Total Mineral Resources of Heavy Mineral Sand
DIRECTORS’ REPORT
Project
Tormin
Beaches
Northern
Beaches
Western
Strandline
Category
Measured
Indicated
Total
Indicated
Inferred
Total
Measured
Indicated
Resource
(Mt)
1.86
0.19
2.05
1.49
0.23
1.72
32.7
39.7
Inferred
119.2
THM
(%)
10.3
10.1
10.3
17.2
6.9
15.8
19.21
9.48
6.93
Stockpile
1.6
12.84
Total
193.2
Eastern
Strandline
Indicated
Inferred
Total
De Punt
Indicated
Inferred
Total
Xolobeni
Measured
Indicated
Inferred
1.9
17.5
19.5
26.9
39.2
66.1
224
104
18
Total
346.0
9.58
5.34
3.13
3.36
15.1
18.2
16.9
5.7
4.1
2.3
5.0
In Situ
THM
(Mt)
0.19
0.02
0.21
0.26
0.02
0.27
6.2
3.7
8.2
0.2
18.5
0.1
0.5
0.6
4.06
7.13
11.2
12.76
4.26
0.41
17.3
Zircon
(% HM)
Garnet
(% HM)
Ilmenite
(% HM)
Rutile
(% HM)
Anatase
(% HM)
Magnetite
(% HM)
2.5
2.3
2.5
2.6
2.2
2.6
1.82
1.05
2.60
4.21
2.16
6.12
6.35
6.32
4.45
3.25
3.74
1.3
1.2
1.3
1.3
1.3
1.3
1.09
0.84
1.44
1.95
1.26
7.73
6.09
6.25
2.75
2.1
2.36
0.1
0.1
0.1
0.1
0.0
0.1
0.21
0.21
0.29
0.39
0.25
0.92
1.19
1.16
0.24
0.17
0.20
0.6
0.7
0.7
0.6
0.8
0.6
0.52
0.74
0.43
0.78
0.51
0.89
0.51
0.57
0.90
1.17
1.06
43.1
48.9
43.6
49.6
41.7
48.6
12.49
14.77
5.4
5.0
5.4
6.8
4.5
6.5
7.91
3.80
10.68
18.04
18.85
25.78
11.89
13.46
15.71
35.44
14.39
36.74
14.52
36.60
21.1
17.1
18.7
18.2
14.5
16.0
54.5
53.7
69.4
54
36.72
Grand Total
628.57
7.65
48.08
•
•
•
•
Mineral assemblage reported as in situ percentage of THM content.
Tonnes and grades numbers may not compute due to rounding.
2% THM cut-off grade used for Tormin and Northern Beaches, Western and Eastern Strandlines.
1% THM cut-off grade used for Xolobeni.
The Mineral Resources Estimate and Ore Reserve were prepared in accordance with the JORC Code (2012).
MINERAL COMMODITIES LTD | Annual Report 2023
23
DIRECTORS’ REPORT
Skaland Graphite Operation
Skaland Operational and Financial Performance
Management’s priority in 2023 was to stabilise operations at Skaland and progress towards profitability. During the
financial year the operation experienced delays causing production to fall below an annualised production rate
of 10 ktpa, the historical peak performance baseline. The production delays included mining fleet breakdowns,
deferral of mining while the haul road from the mine to the main road was being resurfaced, the breakdown of the
Skaland primary ore production drill rig and breakdown of the primary mill for ore processing.
Key production and sales metrics were:
Mining
Tonnes Mined
Ore Mined (t)
Waste Mined (t)
Ore Grade (%C)
Development Metres
Full Year to
31 December 2023
Full Year to
31 December 2022
30,049
21,865
8,184
28
90
43,891
39,434
4,457
28
462
Total material moved in 2023 reflects 68% of total material moved in 2022. Ore Mined during the financial year is 55%
of 2022. This reflects production delays at Skaland in the second half of 2023 that included mining fleet breakdowns,
deferral of mining while the haul road from the mine to the main road was being resurfaced and breakdown of the
Skaland primary ore production drill rig.
Graphite concentrate production of 6,483 tonnes is below the annual historical peak of annualised 10,000 tonnes of
production and below the prior financial year due to lack of feed availability and the long term breakdown of the primary
AG mill. The plant treated 24,408 tonnes of ore, at a grade of 28%C, resulting in 6,483 tonnes of bagged product.
Processing
Ore Processed (t)
Throughput (tph)
Ore Grade (%C)
C Recovery (%)
Concentrate Grade (%)
Concentrate Produced (t)
Full Year to
31 December 2023
Full Year to
31 December 2022
24,408
33,903
7
28
91
93
6
28
92
93
6,483
10,380
Annual graphite concentrates sales of 7,120t are 71% of historical performance expectations.
Product (wmt)
Coarse/Medium
Fine-Medium/Powder
Total
31 December 2023
Year to Date
31 December 2022
Year to Date
Sales
2,739
4,381
7,120
PSD %
38%
62%
Sales
3,547
6,938
10,485
PSD %
34%
66%
Sales revenue for the financial year was US$6.5 million for a total of 7,120 tonnes sold, compared to the previous
financial year US$7.9 million for a total of 10,485 tonnes sold. Lower sales reflect lower production during the 2023
year, partially offset by an improved coarse/fines ratio from production during the current financial year.
24
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
The following table summarises Skaland’s unit costs and revenues for the year to 31 December 2023:
Summary of Unit Costs & Revenues
Unit production cash costs per tonne of net final concentrate produced ($/dmt)
Unit cost of goods sold per tonne of final concentrate sold ($/wmt) (1)
Unit revenue per tonne of final concentrate sold ($/wmt)
Revenue to Cost of Goods Sold Ratio
Full Year to
31 December 2023
Full Year to
31 December 2022
905.65
877.19
798.65
0.91
585.94
725.91
750.37
1.03
(1)
Cost of goods sold includes production cash costs, product handling, transport and selling costs, royalties, stock movements, and depreciation and amortisation. Excludes
corporate and financing costs.
2023 unit production cash costs and unit cost of goods sold are above 2022 due to a 37.5% decrease in concentrate
production in 2023 resulting from various production issues including long term production drill rig downtime,
AG mill availability issues and mining road repairs. The 6.4% increase in unit revenue in 2023 in comparison to 2022
reflects improved coarse/fine fraction in 2023, with a greater proportion of higher value products sold in 2023.
Skaland Resource and Prospecting Activities
The Mineral Resource of 1.79 million tonnes at 23.5% TGC in the Measured, Indicated, and Inferred categories for
420 kt of contained graphite using a 10% cut-off was reported in April 2023 for the Trælen deposit. This will be
revised for MRC’s 2023 annual report.
MINERAL COMMODITIES LTD | Annual Report 2023
25
DIRECTORS’ REPORT
Total mineral resources for the Trælen graphite deposit (10% cut-off)
Category
Measured
Indicated
Inferred
Total
Tonnes
(Mt)
Total Graphitic Carbon (TGC)
%
Contained Graphite
(Mt)
0.06
0.68
1.05
1.79
30.2
25.2
22.0
23.5
0.02
0.17
0.23
0.42
•
•
10% TGC cut-off grade used for Trælen Mineral Resource estimate.
Tonnes and grade numbers may not compute due to rounding.
Total Ore Reserves of Trælen Graphite
Category
Proven
Probable
Total
Tonnes
(Mt)
0.05
0.55
0.60
Total Graphitic Carbon
(%)
Contained Graphite
(Mt)
27.8
24.6
24.8
0.01
0.14
0.15
•
•
Ore Reserve was estimated using a 10% TGC cut-off grade
Ore reserves are a sub-set of Mineral Resources.
There were 21,865 tonnes of ore mined in 2023 at an ore grade of 28%. The Trælen graphite deposit is open at
depth beyond the planned development levels and there are also several promising side lenses that require further
drilling. It is noteworthy that the operations at 10 ktpa have been considered as a base case and the Company has
mining rights to support an increase in the production capacity to 16 ktpa.
Munglinup Graphite Project (51%)
The Munglinup project is on a mining lease granted until 2031 within a designated mining reserve. Obtaining
environmental approvals and advancing studies remains the priority for the Munglinup graphite development and
is expected to be achieved by the December 2024 quarter. This has been deferred due to additional environmental
assessment work requested by the regulator prior to approvals. The Munglinup Graphite Project remains an
important asset in the Company’s overall goal to supply natural graphite into the key high-demand battery anode
markets, with the Definitive Feasibility Study (DFS) (2020) outlining a graphite asset able to produce approximately
52,000tpa over 14 years at an average grade of 12.8%.
A DFS was completed in 2020, which outlined a robust and economically justifiable project. Additional drilling has
been planned to expand the resource base and convert inferred resources into higher categories for an updated
Mineral Resource and Ore Reserve.
The Company retains a right to increase its joint venture interest from 51% to 90% by:
• paying AU$800,000 to Jv partner Gold Terrace; and
•
issuing Gold Terrace with 30 million fully paid ordinary shares in MRC.
The Munglinup Graphite Project, for the fourth consecutive year, was recognised by the Australian Government as a
Critical Mineral Project and is included in the Australian Critical Minerals Prospectus 2023.
26
MINERAL COMMODITIES LTD | Annual Report 2023
Mineral Resource and Reserve
Total Mineral Resource and Ore Reserve for the Munglinup Graphite Project (10% cut-off)
DIRECTORS’ REPORT
Tonnes
(Mt)
4.49
3.50
7.99
Total Graphitic
Carbon
(%)
13.1
11.0
12.2
Sieve Size
(µm)
300–500
180–300
150–180
75–150
< 75
MINERAL RESOURCE
Category
Measured
Indicated
Inferred
Total
ORE RESERVE
Flake Size
Jumbo
Large
Medium
Small
Fine
IN PIT RESOURCES
Category
Inferred
ORE RESERVE
Category
Proven
Probable
Total
Tonnes
(Mt)
4.24
4.24
Mass
(%)
6.5%
16.9%
8.0%
29.8%
38.8%
Tonnes
(Mt)
2.75
Total Graphitic
Carbon
(%)
12.8
12.8
TGC Grade
(%)
95%
95%
95%
95%
95%
Total Graphitic carbon
(%)
11.1
•
•
•
Ore Reserve uses a variable cash flow cut-off grade
Ore Reserve flake size distribution is for recovered graphite product
In-Pit Resources comprise Inferred material inside the designed pit designs using a variable cash flow cut-off grade and do not constitute part of the Ore Reserves
There has been no change to the Mineral Resource and Ore Reserve since last year.
Battery Minerals Projects
In March 2022, testwork for the Cooperative Research Centres Projects (CRC-P) project with Australia’s national
science agency, CSIRO, was successfully completed with battery grades achieved at increasing scale. The project
achieved battery grades (minimum of 99.95% purity) for both Munglinup and Skaland spherical graphite, with typical
recoveries to product of 90%.
The laboratory scale CRC-P project provides the foundation for larger-scale piloting in the Company’s successful
$3.94M grant application under the Commonwealth Government’s Critical Minerals Acceleration Initiative (CMAI)
project, announced during 2022 and then confirmed by the new federal government in 2023. The CMAI project
targets the development of an integrated ore-to-battery anode materials business based on Munglinup.
Design on the pilot-scale graphite anode pilot plant has been finalised – partly financed by the Australian
government CMAI Project. Procurement of long lead items has been completed and the pilot plant is currently under
construction. The Company also continues to advance its collaboration with Mitsubishi Chemical Corporation and
CSIRO (the Australian government research organisation). In addition to project technical work and studies, the
Company has been actively engaging with governments in Australia, Europe and the US regarding potential support
for the project.
The Company’s objective remains development of these downstream studies with the aim of realising maximum
value from its graphite assets in the near to medium term. In this regard, the Company will continue to update
shareholders on its vertical integration strategy.
MINERAL COMMODITIES LTD | Annual Report 2023
27
DIRECTORS’ REPORT
Xolobeni Mineral Sands Project (56%)
The Company’s Xolobeni Mineral Sands Project on the Eastern Cape of South Africa remains a world-class mineral
sands deposit with a JORC compliant resource of 346 million tonnes @ 5% ThM. The Xolobeni permitting process
remains under a DMRE mandated moratorium with minimal activity undertaken. The Company has entered into
an agreement to divest its interest to its project BEE partners, which is currently under suspension due to the
moratorium. Given the ongoing moratorium, the Company has decided that the carrying value of this project be
written down to nil during the financial year ended 31 December 2023.
MRC Outlook
Looking ahead to 2024, the Company’s focus will be in the following key areas:
• Tormin – initiatives will be focused on investing in income enhancing assets (Inland Strands plant upgrade,
third primary concentration circuit and finalising design work on the mineral separation plants) for processing
operations and improving Tormin profitability;
• Skaland – operational changes will be focused on returning to positive cash flows and improving concentrate
quality; and
• Battery Minerals – advancing studies and regulatory approvals.
The expansion and flexibility of the Tormin mining operation capacity, consolidation of Skaland and continued
advancement of battery minerals projects are designed to return to stabilised production, profitability and position
the Company for value growth.
Significant changes in the state of affairs
Details of the year’s operational performance and the resulting financial impact are set out in the operations review.
No event or transaction has arisen in the interval between the end of the financial year and the date of this report of a
material and unusual nature, other than what has been disclosed elsewhere in this financial report, in the opinion of the
Directors of the Company, to significantly affect the operations of the Group, the results of those operations or the state
of affairs of the Company or the Group in future financial years unless otherwise disclosed in this Directors’ Report.
Events since the end of the financial year
There have been no material matters arising subsequent to the end of the financial year.
Likely developments and expected results of operations
Likely developments in the operations of the Group that were not finalised at the date of this report are included in
the review of operations above and as detailed in the Outlook section.
28
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
The Board continues to review other projects and opportunities in the interests of increasing shareholder value.
Environmental regulation
The Group is subject to various environmental regulations in respect to its exploration, development and
production activities.
In the course of its normal mining and exploration activities, the Group adheres to all environmental regulations
imposed upon it by the relevant regulatory authorities, particularly those regulations relating to ground disturbance
and the protection of rare and endangered flora and fauna.
Greenhouse gas and energy data reporting requirements
The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 (Cth)
which requires entities to report annual greenhouse gas emissions and energy use in Australia. For the measurement
period, the Directors have assessed that there are no current reporting requirements but may be required to do so
in the future.
External Factors and Risks Affecting the Group Results
The Group operates in an uncertain economic environment but these uncertainties are minimised through
the application of a rigorous risk management framework and clearly defined risk appetite, set by the Board.
As a consequence, the Group’s Board and management monitor these uncertainties and, where possible, mitigate
the associated risk of adverse outcomes. The following external factors are all capable of having a material adverse
effect on the business and will affect the prospects of the Group for future financial years.
Commodity Prices
The prices that the Group obtains for its products are a key driver of business performance, and fluctuations in these
markets affects its results, including cash flows and shareholder returns. The Group’s FY23 operating cash flows
were sourced from the sale of materials from Tormin and Skaland. Each of these commodities are priced by external
markets and, as the Group is not a price maker with respect to the materials it sells, it is susceptible to adverse price
movements. Commodity prices experienced volatility in FY23. The Group purchases material amounts of fuel that is
subject to global pricing impacts. The Group has not hedged its exposure to fuel price volatility during the 2023 year.
Interest Rates
Interest rate movements affect both returns on funds on deposit as well as the cost of borrowings. The Group
may hedge interest rate risk in accordance with its Financial Risk Management Policy in certain circumstances.
The Group did not enter into any interest rate hedging during FY23.
Currency Exchange Rates
The Group’s functional currency is US Dollars (USD), which is the currency of denominated material sales.
with operations in South Africa (Rand), Australia (AUD) and Norway (Krone) the Group’s cash inflows may therefore
be subject to fluctuations in the exchange rate with respect to sales or expenditures in the various locations.
The Group did not enter into any currency exchange hedging during FY23.
Exposure to Economic, Environment and Social Risks
The Group has material exposure to economic, environmental and social risks, including changes in community
expectations, and environmental, social and governance legislation (including, for example, those matters related to
climate change). The Group employs suitably qualified personnel to assist with the management of its exposure to
these risks.
Processing Risks
The Group processes ore at it mine sites and the processing is subject to interruption risk, equipment failure,
ore variability, labour risk and other risks associated with mineral extraction and processing. The outcome of this has
the potential to materially affect the Group’s results and profitability.
Recoverability of receivables
The financial report includes $3,721,453 (2022: $2,664,792) of vAT and $5,721,083 (2022: $5,282,127) of Diesel Fuel
Rebate refundable from the South African Revenue Service. The Group is currently engaged in legal proceedings
with the South African Revenue Service to seek to ensure recoverability of these amounts.
MINERAL COMMODITIES LTD | Annual Report 2023
29
DIRECTORS’ REPORT
Schedule of mining and prospecting tenements
Mining and prospecting tenements currently held or under application by the Group are:
Country
Location
Right/Tenement No.
South Africa
Tormin – Expansion
162&163 EM
Tormin – Steenvas
(WC)30/5/1/2/2/162 MR
(10108 MR)
Type of Right/
Tenement
Mining
Mining
Status
Granted
Granted
Tormin – North and
South
(WC)30/5/1/2/2/163 MR
(10107 MR)
Mining
Granted
Tormin – Surf Zone
(WC)30/5/1/1/2/10036 PR
(10276 PR)
Prospecting
Granted
Registered
Interest
(Beneficial
Interest)
50%
50%
50%
50%
Tormin – Offshore
(WC)30/5/1/1/2/10199 PR
(10343 PR)
Prospecting
Granted – subject to renewal application
50%
Tormin – De Punt
(WC)30/5/1/1/2/10240 PR
Prospecting
Granted
Tormin – Northern
Beaches Graauw Duinen
(WC)30/5/1/1/2/10261 PR
Prospecting
Granted
Tormin – Geelwal Karoo
(WC)30/5/1/1/2/10262 PR
Prospecting
Granted
Tormin – Klipvley Karoo
Kop
(WC)30/5/1/1/2/10307 PR
(10348 PR)
Prospecting
Under application
Xolobeni – Kwanyana
block
EC30/5/1/1/2/10025 PR
Prospecting
Xolobeni
EC30/5/1/1/2/10025 MR
Mining
Subject to moratorium – Converting to
Mining Right
Subject to Regional Mining Development
and Environmental Committee (REMDEC)
appeal decision
Subject to moratorium – Under
Application
Australia
Munglinup
M74/245
Mining
Granted
Munglinup
E74/505
Exploration
Granted
Munglinup
Munglinup
Munglinup
Munglinup
E74/565
E74/702
E74/752
E74/753
Exploration
Granted
Exploration
Granted
Exploration
Under application
Exploration
Under application
Norway
Traelen
Gnr./Bnr.5421-306/1,5421-
306/2 and 5421-307/1 in
Berg
Granted
Expropriation of
Mining Rights
on specified
land parcels
Mount Bukken
Gnr. 90/Bnr. 2
Exploration
Granted
Vardfjellet/Hesten
Gnr. 124/Bnr. 1
Exploration
Granted
30
MINERAL COMMODITIES LTD | Annual Report 2023
50%
50%
50%
50%
56%
56%
51%
(Option to
acquire 90%)
51%
(Option to
acquire 90%)
100%
100%
100%
100%
100%
100%
100%
DIRECTORS’ REPORT
Information on Directors
Brian Moller
Experience and expertise
Independent Non-Executive
Chairman
Age 65
Mr Moller is a solicitor of the Supreme Court of Queensland and Solicitor
and Barrister of the Supreme Court of western Australia. he specialises
in capital markets, mergers and acquisitions, and corporate restructuring,
and has acted in numerous transactions and capital raisings in both the
industrial and resources and energy sectors. he is a partner at the legal firm,
hopgoodGanim for over 40 years and leads the firm’s Corporate Advisory
and Governance practice. Mr Moller acts for many publicly listed companies
in both Australia and elsewhere and regularly advises boards of directors on
corporate governance and related issues.
Other current directorships
Tempest Minerals Ltd
Platina Resources Ltd
Clara Resources Limited (formerly AusTin Mining Limited)
DGR Global Ltd
New Peak Metals Ltd
Tolu Minerals Ltd
Former directorships in the last 3 years
None
Special responsibilities
Chairman of the Board
Interests in shares and performance rights
Nil ordinary shares in the Company and nil performance rights
Russell Gordon Tipper
Experience and expertise
Independent Non-Executive
Director
Age 69
Mr Tipper is a mining engineer with considerable senior executive, mining and
project level experience having held a number of senior executive positions
with mining companies over the years, including group treasurer for a large
miner for four years. he has delivered feasibility studies and project proposals
for major mining and infrastructure projects such as the hope Downs Iron
Ore Project and the Karara Magnetite Project. Mr Tipper has also been
instrumental in debt restructuring and capital raisings, along with providing
leadership in the revision of work practices at mining operations.
Other current directorships
None
Former directorships in the last 3 years
None
Special responsibilities
Chairman of the Remuneration and Nomination Committee and member of
the Audit, Compliance and Risk Committee
Chairman of MSR and Skaland
Interests in shares and performance rights
Nil ordinary shares in the Company and 2,300,000 performance rights
MINERAL COMMODITIES LTD | Annual Report 2023
31
DIRECTORS’ REPORT
Guy Redvers Walker
Experience and expertise
Non-Executive Director
Age 54
Mr walker is a highly accomplished director and senior investment
management executive with over 25 years’ financial market experience.
he has experience on the boards of listed mining companies including
exploration, development and production companies. he has extensive
experience in capital raising through both traditional banks and alternative
lenders.
Other current directorships
Metals Exploration plc
Former directorships in the last 3 years
None
Special responsibilities
Chair of the Audit, Compliance and Risk Committee and member of the
Remuneration and Nomination Committee
Interests in shares and performance rights
2,299,516 ordinary shares in the Company and 1,100,000 performance rights
Zamile David Qunya
Experience and expertise
Non-Executive Director
Age 55
Mr Qunya has been a director of the Company’s South Africa subsidiary
Mineral Sands Resources (Pty) Ltd, which owns the Tormin Mineral Sands
Mine since November 2014. he is also a director and shareholder in
Blue Bantry Investments, the Company’s Black Economic Empowerment
Partner in South Africa. he has extensive experience in South African local
government matters having held position as Mayor and Councilor of the
MbiZana Municipality and the wild Coast District Council. he was also
regional manager from 1999 to 2004 for Eskom and Shell in the KwaZulu
Natal and Eastern Cape responsible predominantly for human resource
management.
Other current directorships
None
Former directorships in the last 3 years
None
Special responsibilities
Member of the Audit, Compliance and Risk Committee
Interests in shares and performance rights
Nil ordinary shares in the Company and 1,100,000 performance rights
32
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
Debbie Ntombela
Experience and expertise
Non-Executive Director
Age 70
Ms. Ntombela is a lawyer in South Africa with an in-depth knowledge of the
mining sector, specifically regarding regulatory compliance from previously
working at, and with, the Department of Mineral Resources and the mining
industry in South Africa. She specialises in applications for prospecting rights,
mining rights, and mining permits, and all related mining and exploration
documentation. Ms. Ntombela is currently a Partner in the law firm Shepstone
& wylie in South Africa.
Other current directorships
None
Former directorships in the last 3 years
None
Special responsibilities
Member of the Audit, Compliance and Risk Committee and member of the
Remuneration and Nomination Committee
Interests in shares and performance rights
Nil ordinary shares in the Company and 1,100,000 performance rights
MINERAL COMMODITIES LTD | Annual Report 2023
33
DIRECTORS’ REPORT
Directors and Key Management Personnel Shareholdings
The relevant interest of each Director and key management personnel in the share capital of the Company,
shown in the Register of Directors’ and Key Management Personnel Shareholding at the date of the Directors’
Report is as follows:
Balance as at
1 January
2023
Received as
remuneration
Increase as a result
of performance
rights exercised
Purchased
on market
Balance as at
31 December 2023
Brian Moller
Debbie Ntombela
Russell Tipper
Guy Walker
Zamile Qunya
Scott Lowe
Adam Bick
–
–
–
–
–
–
1,000,000
Meetings of Directors
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,299,516
2,299,516
–
–
–
–
–
1,000,000
The number of meetings of the Company’s Board of Directors and each of the Board committees held during the
year ended 31 December 2023, and the number of meetings attended by each Director were:
NAME
No. of meetings held
A being total of meetings eligible to attend
B being total of meetings actually attended
Brian Moller
Zamile David Qunya
Guy Redvers Walker
Debbie Ntombela
Russell Gordon Tipper
DIRECTORS’ MEETINGS
Audit, Compliance & Risk
Remuneration & Nomination
MEETINGS OF COMMITTEES
A
9
9
9
9
9
B
9
6
9
8
9
A
–
2
2
2
2
B
–
2
2
2
2
A
–
–
2
2
2
B
–
–
2
2
2
Other matters of Board business have been resolved by circular resolutions of Directors, which are records of
decisions made at a number of informal meetings of the Directors held to control, implement and monitor the
Company’s activities throughout the year.
Remuneration Report (Audited)
This remuneration report sets out the remuneration information for the Company’s non-executive Directors,
executive Directors, other key management personnel and the key executives of the Group and the Company.
The remuneration report is set out under the following main headings:
A. Principles used to determine the nature and amount of remuneration
B. Details of remuneration
C. Service agreements
D. Share-based compensation
E. Additional information
F. Other transactions with key management personnel
34
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
A. Principles used to determine the nature and amount of remuneration
In order to retain and attract executives of sufficient calibre to facilitate the efficient and effective management
of the Company’s operations, the Board reviews the remuneration packages of all key management personnel,
if any, on an annual basis and makes recommendations. Remuneration packages are reviewed with due regard
to performance and other relevant factors.
Remuneration packages may contain the following key elements:
(a) Directors’ fees;
(b) Salary and consultancy; and
(c) Benefits, including the provision of a motor vehicle and superannuation.
Fees payable to non-executive Directors reflect the demands which are made on, and the responsibilities of the
Directors. The Board reviews non-executive Directors’ fees and payments on an annual basis. The Non-Executive
Directors fee pool was set at $750,000 on 25 May 2023 at the Annual General Meeting. Non-Executive Director
fees are paid with an aggregate limit (currently $750,000) which is approved by the shareholders from time to time.
Non-Executive Directors serve in accordance with a standard letter of appointment which sets out the remuneration
arrangements.
Executives are offered a competitive base pay which is reviewed annually to ensure the pay is competitive with
the market.
There were short term cash incentives provided to the Chief Executive Officer and Chief Financial Officer.
Long-term incentives are provided to Directors and other key management personnel to incentivise them to deliver
long-term shareholder returns.
These are determined based on what the Board views as reasonable based on market conditions. Any grant of
securities to Directors of the Company must be approved by shareholders in a general meeting.
The Directors are not required to hold any shares in the Company under the constitution of the Company; however,
to align Directors’ interests with shareholders’ interests, the Directors are encouraged to hold shares in the Company.
As at 31 December 2023 the short term cash bonus incentives are up to 25% of base pay calculated on Company
performance and other key performance indicators. Directors’ fees are fixed.
(Loss)/profit for the year after tax attributable
to owners of Mineral Commodities Ltd (USD)
2023
2022
2021
2020
2019
2018
(9,950,737)
(11,177,268)
(3,308,455)
13,754,615
7,828,231
8,823,231
Closing share price (AUD)
2.4 cents
6.9 cents
11.0 cents
37.0 cents
28.0 cents
17.0 cents
Dividends paid (AUD)
–
–
–
–
5,474,790
5,431,140
Voting and comments made at the Company’s 2023 Annual General Meeting
At the General Meeting held 25 May 2023, Mr Brian Moller was elected as a Director of the Company, Mr Zamile
Qunya and Mr Guy walker were re-elected as Directors of the Company, adoption of the remuneration report was
approved, increase in aggregate non-executive director remuneration from $500,000 to $750,000 was granted and
a proposed 11.3 million share issue to a related party of Mr Zamile Qunya was approved, which are yet to be issued
given the MSR Restructure has not yet been approved by the South African regulatory authority. The 11.3 million
share issue to a related party of Mr Zamile Qunya will require new shareholder approval under ASX listing rules.
MINERAL COMMODITIES LTD | Annual Report 2023
35
)
%
(
–
8
.
0
4
0
.
6
2
8
.
4
2
4
.
8
1
.
3
1
2
–
6
.
5
1
.
1
6
1
f
o
e
g
a
t
n
e
c
r
e
p
n
o
i
t
a
r
e
n
u
m
e
r
–
–
–
–
0
7
.
6
1
.
–
–
7
.
0
)
%
(
d
e
s
a
b
e
c
n
a
m
r
o
f
r
e
p
e
c
n
a
m
r
o
f
r
e
P
t
n
e
m
y
o
l
p
m
e
&
l
a
u
n
n
A
)
$
A
(
s
l
a
t
o
T
)
$
A
(
)
s
t
h
g
i
r
)
$
A
(
s
t
fi
e
n
e
b
)
$
A
(
e
v
a
e
l
)
$
A
(
e
c
i
v
r
e
s
g
n
o
l
s
u
n
o
b
h
s
a
C
d
e
s
a
b
e
r
a
h
S
a
s
a
s
t
n
e
m
y
a
p
e
g
a
t
n
e
c
r
e
P
s
t
n
e
m
y
a
p
&
s
n
o
i
t
p
O
(
d
e
s
a
b
-
e
r
a
h
S
-
t
s
o
P
DIRECTORS’ REPORT
i
g
n
w
o
l
l
o
f
e
h
t
n
i
t
u
o
t
e
s
e
r
a
y
n
a
p
m
o
C
e
h
t
f
o
l
i
)
s
e
r
u
s
o
c
s
D
y
t
r
a
P
d
e
t
a
e
R
4
2
1
B
S
A
A
n
l
i
d
e
n
fi
e
d
s
a
(
l
e
n
n
o
s
r
e
p
t
n
e
m
e
g
a
n
a
m
y
e
k
e
h
t
d
n
a
s
r
o
t
c
e
r
i
D
f
o
n
o
i
t
a
r
e
n
u
m
e
r
e
h
t
f
o
s
l
i
a
t
e
D
;
)
”
O
E
C
“
(
r
e
c
fi
f
O
e
v
i
t
u
c
e
x
E
f
i
e
h
C
e
h
t
,
e
w
o
L
t
t
o
c
S
r
M
;
y
n
a
p
m
o
C
e
h
t
f
o
s
r
o
t
c
e
r
i
D
e
h
t
;
)
”
O
F
C
“
(
r
e
c
fi
f
O
l
i
a
c
n
a
n
F
i
f
i
e
h
C
e
h
t
i
,
k
c
B
m
a
d
A
r
M
•
•
•
.
y
n
a
p
m
o
C
e
h
t
f
o
l
e
n
n
o
s
r
e
p
t
n
e
m
e
g
a
n
a
m
y
e
k
d
n
a
s
r
o
t
c
e
r
i
D
o
t
l
e
b
a
c
i
l
p
p
a
e
r
a
s
e
e
f
i
g
n
w
o
l
l
o
f
e
h
T
l
.
s
e
b
a
t
:
e
r
a
3
2
0
2
r
e
b
m
e
c
e
D
1
3
d
e
d
n
e
r
a
e
y
l
i
a
c
n
a
n
fi
e
h
t
g
n
i
r
u
d
p
u
o
r
G
e
h
t
f
o
l
e
n
n
o
s
r
e
p
t
n
e
m
e
g
a
n
a
m
y
e
k
e
h
T
n
o
i
t
a
r
e
n
u
m
e
R
f
o
s
l
i
a
t
e
D
.
B
4
1
4
1
0
1
,
4
1
4
,
6
2
4
1
4
,
6
0
1
4
1
4
,
6
2
–
–
0
0
0
,
4
4
1
–
–
1
1
4
,
5
3
1
0
3
2
,
5
5
3
8
7
,
7
0
8
4
,
3
4
1
4
1
4
,
6
2
0
0
0
,
7
9
1
7
,
0
3
6
2
7
4
,
4
3
1
3
8
7
,
4
1
–
–
–
–
–
–
–
–
–
–
6
6
0
,
0
1
6
6
0
,
0
1
)
$
A
(
h
s
a
C
y
r
a
l
a
s
0
0
0
,
4
4
1
8
9
3
,
2
7
0
0
0
,
5
7
0
0
0
,
0
8
0
0
0
,
0
0
1
r
a
e
Y
3
2
0
2
3
2
0
2
3
2
0
2
3
2
0
2
3
2
0
2
)
2
2
0
2
r
e
b
m
e
c
e
D
8
2
i
d
e
t
n
o
p
p
a
(
r
e
l
l
o
M
n
a
i
r
B
s
r
o
t
c
e
r
i
D
e
m
a
N
l
a
e
b
m
o
t
i
N
e
b
b
e
D
r
e
p
p
i
T
l
l
e
s
s
u
R
a
y
n
u
Q
e
l
i
m
a
Z
l
r
e
k
a
W
y
u
G
8
9
3
,
1
7
4
3
2
0
2
n
o
i
t
a
r
e
n
u
m
e
R
r
o
t
c
e
r
i
D
l
a
t
o
T
36
MINERAL COMMODITIES LTD | Annual Report 2023
2
6
2
,
4
8
1
–
9
9
2
,
8
7
5
4
6
1
0
9
,
0
1
4
,
1
1
0
0
5
,
7
2
9
1
0
,
7
2
0
8
,
9
2
–
–
3
3
8
,
5
6
1
3
3
8
,
0
3
4
3
2
0
2
3
2
0
2
)
3
2
0
2
r
e
b
m
e
t
p
e
S
1
i
d
e
t
n
o
p
p
a
(
e
w
o
L
t
t
o
c
S
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
r
e
h
t
O
i
k
c
B
m
a
d
A
0
8
2
,
3
9
3
1
,
6
3
6
,
4
2
2
3
9
6
,
3
5
1
2
8
,
6
3
6
6
0
,
0
1
4
6
0
,
8
6
0
,
1
3
2
0
2
n
o
i
t
a
r
e
n
u
m
e
R
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
l
a
t
o
T
d
e
s
a
b
e
r
a
h
S
a
s
a
s
t
n
e
m
y
a
p
e
g
a
t
n
e
c
r
e
P
s
t
n
e
m
y
a
p
&
s
n
o
i
t
p
O
(
d
e
s
a
b
-
e
r
a
h
S
-
t
s
o
P
)
%
(
–
.
5
7
1
.
4
7
1
5
.
6
1
2
.
2
1
.
1
3
2
5
.
0
2
f
o
e
g
a
t
n
e
c
r
e
p
n
o
i
t
a
r
e
n
u
m
e
r
–
–
–
–
7
.
5
4
.
0
1
1
7
.
)
%
(
d
e
s
a
b
e
c
n
a
m
r
o
f
r
e
p
e
c
n
a
m
r
o
f
r
e
P
t
n
e
m
y
o
l
p
m
e
&
l
a
u
n
n
A
)
$
A
(
s
l
a
t
o
T
)
$
A
(
)
s
t
h
g
i
r
)
$
A
(
s
t
fi
e
n
e
b
)
$
A
(
e
v
a
e
l
)
$
A
(
e
c
i
v
r
e
s
g
n
o
l
s
u
n
o
b
h
s
a
C
)
$
A
(
h
s
a
C
y
r
a
l
a
s
r
a
e
Y
s
r
o
t
c
e
r
i
D
e
m
a
N
6
7
7
0
9
,
6
7
7
5
1
,
6
7
7
5
9
,
6
7
7
5
1
,
7
1
9
,
8
2
1
6
7
7
5
1
,
–
–
–
–
–
–
7
8
9
7
8
1
,
7
8
9
,
2
3
0
1
4
,
4
1
–
–
–
–
–
–
–
–
6
1
3
,
7
5
2
8
,
5
0
1
0
0
0
,
5
7
0
0
0
,
0
8
2
2
0
2
2
2
0
2
2
2
0
2
–
2
2
0
2
)
2
2
0
2
y
r
a
u
n
a
J
5
n
o
r
o
t
c
e
r
i
d
s
a
d
e
n
g
s
e
r
(
i
r
e
k
a
B
i
d
v
a
D
0
9
5
,
0
4
1
2
2
0
2
y
r
a
u
n
a
J
5
n
o
n
a
m
r
i
a
h
C
m
i
r
e
t
n
i
s
a
i
d
e
t
n
o
p
p
a
(
r
e
p
p
i
T
l
l
e
s
s
u
R
)
2
2
0
2
c
e
D
8
2
n
o
n
a
m
r
i
a
h
C
m
i
r
e
t
n
i
s
a
d
e
n
g
s
e
r
i
d
n
a
2
2
0
2
7
0
8
1
6
8
,
9
9
8
,
8
9
1
0
0
5
,
7
2
7
5
6
,
8
4
0
5
2
,
9
8
0
0
5
,
7
9
4
2
2
0
2
2
2
0
2
n
a
J
5
n
o
i
r
o
t
c
e
r
i
D
g
n
g
a
n
a
M
d
e
t
n
o
p
p
a
(
i
3
6
2
,
5
6
3
1
,
4
1
2
,
9
7
2
0
1
9
,
1
4
7
5
6
,
8
4
6
6
5
,
6
9
5
1
9
,
8
9
8
2
2
0
2
n
o
i
t
a
r
e
n
u
m
e
R
r
o
t
c
e
r
i
D
l
a
t
o
T
)
3
2
0
2
y
r
a
u
n
a
J
6
n
o
d
e
n
g
s
e
r
i
d
n
a
l
a
e
b
m
o
t
i
N
e
b
b
e
D
a
y
n
u
Q
e
l
i
m
a
Z
l
e
s
y
e
D
b
o
c
a
J
l
r
e
k
a
W
y
u
G
DIRECTORS’ REPORT
–
–
–
.
7
9
1
0
.
6
1
–
–
0
.
0
2
–
8
.
9
.
9
1
2
6
.
8
1
2
9
6
,
0
7
6
7
7
7
,
6
4
1
0
0
5
,
7
2
8
2
2
,
9
4
7
8
6
,
4
2
1
0
0
5
,
2
2
3
5
1
6
,
5
6
2
4
6
6
,
0
4
2
–
–
1
1
5
,
0
2
5
2
8
,
0
2
8
1
8
,
3
2
5
4
3
4
,
3
0
1
6
8
3
,
7
2
6
8
7
1
5
2
,
–
–
5
1
6
,
0
4
4
6
6
,
5
1
5
6
6
,
5
1
–
–
–
9
8
4
,
4
0
2
5
7
1
,
4
0
2
9
1
7
,
4
0
1
4
1
6
,
2
7
2
–
6
8
7
,
1
5
2
2
2
0
2
2
2
0
2
2
2
0
2
2
2
0
2
2
2
0
2
)
2
2
0
2
c
e
D
1
3
n
o
d
e
n
g
s
e
r
(
i
)
2
(
)
1
(
k
c
o
c
n
a
H
r
e
h
c
t
e
l
F
)
2
2
0
2
e
n
u
J
0
3
d
e
n
g
s
e
r
(
i
y
e
r
F
h
p
o
t
s
i
r
h
C
)
2
2
0
2
t
p
e
S
0
3
n
o
d
e
n
g
s
e
r
(
i
g
a
h
G
r
e
d
n
i
r
u
S
)
2
2
0
2
t
c
O
8
2
n
o
d
e
n
g
s
e
r
(
i
i
i
d
h
s
a
R
n
a
m
h
a
B
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
r
e
h
t
O
)
2
(
i
k
c
B
m
a
d
A
7
3
8
7
1
3
,
,
3
5
2
4
,
9
2
5
2
3
1
,
8
3
1
9
2
8
,
9
6
1
2
7
9
,
5
2
3
9
7
4
,
4
5
1
,
2
2
2
0
2
n
o
i
t
a
r
e
n
u
m
e
R
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
l
a
t
o
T
.
2
2
0
2
n
i
d
e
r
r
e
f
e
d
s
a
w
t
a
h
t
s
u
n
o
b
h
s
a
c
1
2
0
2
d
n
a
t
n
e
m
y
a
p
s
u
n
o
b
h
s
a
c
2
2
0
2
s
t
n
e
s
e
r
p
e
r
d
n
a
3
2
0
2
y
r
a
u
r
b
e
F
4
2
n
o
d
e
v
o
r
p
p
a
s
a
w
s
u
n
o
b
h
s
a
C
.
2
2
0
2
r
e
b
m
e
c
e
D
8
2
d
e
t
a
d
e
s
a
e
e
r
l
X
S
A
e
h
t
r
e
p
2
2
0
2
r
e
b
m
e
c
e
D
8
2
n
o
y
r
a
t
e
r
c
e
S
y
n
a
p
m
o
C
s
a
d
e
n
g
s
e
R
i
)
1
(
)
2
(
MINERAL COMMODITIES LTD | Annual Report 2023
37
DIRECTORS’ REPORT
The CEO, Scott Lowe, was entitled to an annual bonus of 30% of the Base Remuneration, measured against the
following criteria:
1. Performance against scope of services set out in the employment contract at the sole discretion of the Board – 75%;
2. Achieving EBITDA against budget taking into account uncontrollable variables at the discretion of the Board – 25%.
Future bonus of the CEO will be at the sole discretion of the Board.
The measurable objectives were chosen to ensure the CEO was incentivised to meet budgeted EBITDA to ensure the
CEO performed each of the tasks outlined in his employment contract which are typical of that for a CEO position.
The Board assessed and reviewed the performance of the CEO against the above set of measurable criteria and
awarded 0% of the full pro rate bonus of 30% of the Base Remuneration for 2023, on the basis that the current
financial position of the Company did not support payment of Executive bonuses.
The CEO, Scott Lowe, is entitled to a retention bonus of $125,000 as at 31 August 2024, provided that Mr Lowe has
provided services until that date, and $125,000 as at 31 August 2025 provided that Mr Lowe has provided services
until that date.
The CFO, Adam Bick, was entitled to an annual bonus of 25% of the Base Remuneration, measured against the
following criteria:
1. Performance against scope of services set out in the employment contract at the sole discretion of the CEO – 75%;
2. Achieving EBITDA against budget taking into account uncontrollable variables at the discretion of the Board – 25%.
Future bonus of the CFO will be at the sole discretion of the Board.
The measurable objectives were chosen to ensure the CFO was incentivised to meet budgeted EBITDA to ensure
the CFO performed each of the tasks outlined in his employment contract which are typical of that for a CFO position
and timely reporting to the Board to ensure business decisions can be made on a timely and informed basis.
The Board assessed and reviewed the performance of the CFO against the above set of measurable criteria and
awarded 0% of the full bonus of 25% of the Base Remuneration for 2023, on the basis that the current financial
position of the Company did not support payment of Executive bonuses.
38
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
The CFO, Adam Bick, is entitled to a retention bonus of $90,000 as at 31 August 2024, provided that Mr Bick has
provided services until that date, and $90,000 as at 31 August 2025, provided that Mr Bick has provided services
until that date.
Relative proportions of fixed versus variable remuneration expense
The following table shows the relative proportions of remuneration that are linked to performance and those that are
fixed, based on the amounts disclosed as statutory remuneration expense in the previous table:
Name
FIXED REMUNERATION
AT RISK – STI
AT RISK – LTI
2023
2022
2023
2022
2023
2022
Directors
Brian Moller
Debbie Ntombela
Russell Tipper
Guy Walker
Zamile Qunya (1)
Other Key Management Personnel
Scott Lowe
Adam Bick
100%
74%
59%
75%
77%
100%
84%
–
83%
82%
84%
82%
–
59%
–
–
–
–
–
–
–
–
5%
6%
–
–
–
19%
–
26%
41%
25%
18%
–
16%
–
17%
18%
16%
12%
–
22%
(1) Mr Qunya is included in the STI payable to Tormin employees on a quarterly basis, rather than the Executive STI payable annually.
MINERAL COMMODITIES LTD | Annual Report 2023
39
DIRECTORS’ REPORT
C. Service Agreements
Scott Lowe
Commencement date
1 September 2023
Term
No fixed term
Adam Bick
5 June 2019
No fixed term
Total Remuneration
package
A$525,000 per annum (inclusive of
statutory superannuation) and cash
bonus as set out above
A$375,000 per annum (inclusive of
statutory superannuation) and cash
bonus as set out above
Termination benefits
Nil unless constructive redundancy in
which case 12 months’ salary
Nil unless constructive redundancy in
which case 12 months’ salary
Mr Bick was paid A$500,000 per annum while acting CEO until 31 August 2023.
There are no other service agreements.
D. Performance Rights
The Company has implemented an Incentive Performance Rights Plan that is designed to provide long-term
incentives for senior managers and above (including Directors) to deliver long-term shareholder returns. Performance
Rights granted under the plan carry no dividend or voting rights.
Grant Date
Vesting Date
Expiry Date
Exercise
Price
Barrier Price
(A$)^
Fair Value
No. of
Performance
Rights
Adam Bick
24 Feb 2022
23 Feb 2023
23 Feb 2026
Adam Bick
24 Feb 2022
23 Feb 2024
23 Feb 2026
Adam Bick
24 Feb 2022
23 Feb 2025
23 Feb 2026
–
–
–
19.0 cents
5.0 cents
1,200,000
19.0 cents
7.6 cents
1,200,000
19.0 cents
8.9 cents
1,200,000
^
Rights will convert to shares if the Company’s share price exceeds the Barrier Price for thirty consecutive days. The Barrier Price was set at the time of initial discussions with
each relevant Key Management Personnel. Rights without a Barrier Price and subject to non-market measures.
No additional performance rights were offered to key management personnel in 2023.
Details of performance rights over ordinary shares in the Company provided as remuneration to key management
personnel are shown below:
Balance as at
1 January 2023
Cancelled
Received as
remuneration
Forfeited #
Performance
rights vested
& exercised
Balance as at
31 December
2023
Performance
rights vested &
not exercised
Scott Lowe
–
Adam Bick
3,600,000
Brian Moller
–
Russell Tipper
2,300,000
Guy Walker
1,100,000
Debbie Ntombela
1,100,000
Zamile Qunya
1,100,000
Total
9,200,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,600,000
–
2,300,000
1,100,000
1,100,000
1,100,000
9,200,000
–
–
–
–
–
–
–
–
40
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ REPORT
E. Other transactions with key management personnel
(i) Transactions with other related parties
Shepstone & wylie, a company associated with Debbie Ntombela, one of the Directors, has provided legal services
to the Company during 2023. This amount paid by the Company to Shepstone and wylie for the year ended
31 December 2023 was $28,181 (2022: $174,297).
Zamadiba Trading and Z Square M.P Empowerment, companies associated with Zamile David Qunya, one of the
Directors, has provided executive services and manpower to the Company during 2023. This amount paid by
the Company to Zamadiba Trading and Z Square M.P Empowerment for the year ended 31 December 2023 was
$301,042 (2022: $526,263), excluding labour payroll costs of site based Z Square employees.
(ii) Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Shepstone & Wylie
Zamadiba Trading
Z Square M.P Empowerment
31 Dec 2023
$
31 Dec 2022
$
10,503
12,356
7,924
8,909
–
103,418
End of the audited remuneration report
MINERAL COMMODITIES LTD | Annual Report 2023
41
DIRECTORS’ REPORT
Insurance of officers
During the financial year, the Group has paid an insurance premium to insure the Directors and secretaries of the
Company and its controlled entities. The provision of details in respect to the terms and conditions of the policy are
prohibited from disclosure under the terms of the policy.
Proceedings on behalf of the Group
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Company for all or
any part of those proceedings.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor for audit and non-audit services provided during the year are
set out below.
The Board of Directors has considered the position and, in accordance with advice received from the Audit,
Compliance and Risk Committee, is satisfied that the provision of the non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are
satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
•
•
all non-audit services have been reviewed by the Audit, Compliance and Risk Committee to ensure they do not
impact the impartiality and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
During the current year $nil fees were paid or payable for services provided by BDO Audit (wA) Pty Ltd, BDO
Corporate Finance (wA) Pty Ltd and BDO Tax (wA) Pty Ltd, its related practices and related firms.
Auditor
BDO Audit (wA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out on page 43 and forms part of this report.
This report has been made in accordance with a resolution of the Directors.
Brian Moller
Chairman
Perth, western Australia
28 March 2024
42
MINERAL COMMODITIES LTD | Annual Report 2023
AUDITOR’S INDEPENDENCE DECLARATION
Auditor’s Independence Declaration
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9
Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF MINERAL COMMODITIES LTD
As lead auditor of Mineral Commodities Ltd for the year ended 31 December 2023, I declare that,
to the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Mineral Commodities Ltd and the entities it controlled during the
period.
Glyn O'Brien
Director
BDO Audit (WA) Pty Ltd
Perth
28 March 2024
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
MINERAL COMMODITIES LTD | Annual Report 2023
43
FINANCIAL STATEMENTS
Financial statements
Contents
46 Consolidated income statement
47 Consolidated statement of comprehensive income
48 Consolidated balance sheet
49 Consolidated statement of cash flows
50 Consolidated statement of changes in equity
51 Notes to the consolidated financial statements
98 Directors’ declaration
100
Independent auditor’s report to the members
44
MINERAL COMMODITIES LTD | Annual Report 2023
FINANCIAL STATEMENTS
MINERAL COMMODITIES LTD | Annual Report 2021
45
FINANCIAL STATEMENTS
Consolidated income statement
For the year ended 31 December 2023
Revenue from continuing operations
Sale of product
Other revenue
Expenses
Mining and processing costs
Other expenses from ordinary activities
Administration expenditure
Impairment charges
Share based payment expense
Financial expense (net)
Notes
2.2
2.2
31 Dec 2023
$
31 Dec 2022
$
28,264,817
44,310,010
306,894
149,666
28,571,711
44,459,676
2.3(i)
(30,475,439)
(48,515,030)
2.3(ii)
2.3(iii)
5.2
(3,339,706)
(7,634,809)
(8,938,322)
172,831
(505,669)
–
(325,577)
(29,328)
Loss before income tax from continuing operations
(14,514,594)
(12,045,068)
Income tax benefit
2.4(i)
4,452,068
529,367
Loss after income tax from continuing operations
(10,062,526)
(11,515,701)
Loss is attributable to:
Owners of Mineral Commodities Ltd
Non-controlling interest
(9,950,737)
(11,177,268)
(111,789)
(338,433)
(10,062,526)
(11,515,701)
Cents
Cents
Earnings per share for loss from continuing operations attributable
to the ordinary equity holders of the Company:
Basic earnings per share
Diluted earnings per share
2.5(i)
2.5(ii)
(1.37)
(1.37)
(2.13)
(2.13)
The above consolidated income statement should be read in conjunction with the accompanying notes.
46
MINERAL COMMODITIES LTD | Annual Report 2023
Consolidated statement of comprehensive income
For the year ended 31 December 2023
Loss for the year
Other comprehensive expense
FINANCIAL STATEMENTS
31 Dec 2023
$
(10,062,526)
31 Dec 2022
$
(11,515,701)
Exchange differences on translation of foreign operations
(4,195,695)
(3,458,576)
Other comprehensive expense for the year, net of tax
(4,195,695)
(3,458,576)
Total comprehensive expense for the year
(14,258,221)
(14,974,277)
Total comprehensive expense for the year is attributable to:
Owners of Mineral Commodities Ltd
Non-controlling interest
(13,944,413)
(14,425,161)
(313,808)
(549,116)
(14,258,221)
(14,974,277)
The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.
MINERAL COMMODITIES LTD | Annual Report 2023
47
FINANCIAL STATEMENTS
Consolidated balance sheet
as at 31 December 2023
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other investments, including derivatives
Total Current Assets
Non-current assets
Trade and other receivables
Inventories
Exploration expenditure
Mine development expenditure
Deferred tax asset
Property, plant and equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current liabilities
Trade and other payables
Unearned revenue
Borrowings
Employee benefits
Current tax liabilities
Total Current Liabilities
Non-current liabilities
Provisions
Long term borrowings
Employee benefits
Deferred tax liabilities
Total Non-current Liabilities
Total Liabilities
NET ASSETS
Equity
Contributed equity
Reserves
Retained earnings/(losses)
Parent entity interest
Non-controlling interest
TOTAL EQUITY
Notes
31 Dec 2023
$
31 Dec 2022
$
4.1
4.2
4.3
4.2
4.3
3.1
3.2
2.4(ii)
3.3
4.4
2.2(i)
5.1
7.1
3.5
5.1
7.1
2.4(ii)
5.3(a)
5.3(b)
5.3(c)
5.3(d)
1,129,794
10,851,200
21,533,289
23,821
33,538,104
243,877
2,200,672
14,600,437
–
588,457
20,047,223
37,680,666
71,218,770
16,471,760
1,787,802
4,083,504
805,763
146,263
1,142,141
11,451,889
11,849,610
156,529
24,600,169
1,131,868
2,367,296
17,507,213
4,676,944
–
28,266,958
53,950,279
78,550,448
14,725,208
3,646,486
4,346,123
582,435
103,871
23,295,092
23,404,123
880,512
4,133,824
18,788
–
5,033,124
28,328,216
42,890,554
90,914,631
(39,788,707)
(8,235,369)
42,890,554
–
42,890,554
951,865
2,905,040
76,500
3,980,832
7,914,237
31,318,360
47,232,088
78,925,112
(32,810,841)
1,715,369
47,829,640
(597,552)
47,232,088
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
48
MINERAL COMMODITIES LTD | Annual Report 2023
FINANCIAL STATEMENTS
Consolidated statement of cash flows
For the year ended 31 December 2023
Notes
31 Dec 2023
$
31 Dec 2022
$
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
28,800,522
44,180,415
Payments to suppliers and employees
Income tax refund/(paid)
(35,713,539)
(42,994,339)
–
90,524
Net cash inflow/(outflow) from operating activities
4.1(ii)
(6,913,017)
1,276,600
Cash flows from investing activities
Payments for exploration expenditure
Payments for property, plant and equipment
Proceeds from property, plant and equipment
Payments for development expenditure
(1,080,359)
(432,910)
(1,611,344)
(5,734,007)
234,503
(296,309)
2,442,708
(181,661)
–
302
Acquisition of non-controlling interest in Skaland Graphite AS
5.3
(1,900,000)
Interest received
10,284
Net cash outflow from investing activities
(4,643,225)
(3,905,568)
Cash flows from financing activities
Proceeds from issue of new shares (net of costs)
Proceeds from borrowings
Repayment of borrowings
Interest paid on borrowings
Net cash (outflow)/inflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of financial year
4.1
11,989,519
5,045,699
1,211,594
2,891,220
(5,108,835)
(4,339,008)
(515,953)
11,410,430
(145,812)
1,142,141
133,465
1,129,794
(242,200)
(478,394)
(3,107,362)
4,251,383
(1,880)
1,142,141
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
MINERAL COMMODITIES LTD | Annual Report 2023
49
FINANCIAL STATEMENTS
Consolidated statement of changes in equity
For the year ended 31 December 2023
For the year ended 31 December 2023
Contributed
equity
$
Reserves
$
Retained
earnings/
(accumulated
losses)
$
Non-
controlling
interest
$
Totals
$
Total
equity
$
At 1 January 2023
78,925,112
(32,810,841)
1,715,369
47,829,639
(597,552)
47,232,088
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
–
–
–
–
(9,950,737)
(9,950,737)
(111,789)
(10,062,526)
(3,993,676)
–
(3,993,676)
(202,019)
(4,195,695)
(3,993,676)
(9,950,737)
(13,944,413)
(313,808)
(14,258,221)
Transaction with owners in their capacity as owners:
Share Issue, net of costs
11,989,519
–
Acquisition of non-controlling interest
Share based payments
–
–
(2,811,359)
(172,831)
–
–
–
Balance at the end of the year
90,914,631
(39,788,707)
(8,235,369)
42,890,554
11,989,519
–
11,989,519
(2,811,359)
911,360
(1,900,000)
(172,831)
–
–
(172,831)
42,890,554
For the year ended 31 December 2022
Contributed
equity
$
Reserves
$
Retained
earnings
$
Non-
controlling
interest
$
Totals
$
Total
equity
$
At 1 January 2022
77,672,620
(29,847,627)
12,892,636
60,717,629
(48,435)
60,669,194
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
–
–
–
–
(11,177,267)
(11,177,267)
(338,434)
(11,515,701)
(3,247,893)
–
(3,247,893)
(210,683)
(3,458,576)
(3,247,893)
(11,177,267)
(14,425,160)
(549,117)
(14,974,277)
Transaction with owners in their capacity as owners:
Share Issue, net of costs
1,211,594
–
Conversion of unlisted performance rights
40,898
(40,898)
Share based payments
–
325,577
–
–
–
1,211,594
–
325,577
–
–
–
1,211,594
–
325,577
Balance at the end of the year
78,925,112
(32,810,841)
1,715,369
47,829,639
(597,552)
47,232,088
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
50
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated
financial statements
1. Basis of Preparation
This section provides information about the overall basis of preparation that is considered to be useful in
understanding these financial statements. Accounting policies specific to the various components of the financial
statements are located within the relevant section of the report.
1.1 Corporate information
Mineral Commodities Ltd (the ‘Company’) is a company limited by shares, domiciled, and incorporated in Australia.
Its shares are publicly traded on the Australian Securities Exchange (“ASX”). The nature of the operations and
principal activities of the Company and its controlled entities are described in the directors’ report and in the
segment information in Note 2.1.
The financial report of the Company for the year ended 31 December 2023 was authorised for issue in accordance
with a resolution of Directors with effect on 28 March 2024.
1.2 Basis of accounting
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and other authoritative pronouncements of the Australian Accounting Standards Board and the
requirements of the Corporations Act 2001. Mineral Commodities Ltd is a for-profit entity for the purpose of preparing
the financial statements. The Group has prepared the financial statements on the basis that it will continue to operate
as a going concern, which contemplates continuity of normal business activities and realisation of assets and
settlement of liabilities in the normal course of business.
As disclosed in the financial statements, for the financial year ended 31 December 2023, the Group incurred a
loss before income tax of $14,514,594 and had net cash outflows from operations of $6,913,017. The Group has
ongoing commitments for the development of its mining and exploration assets and has, subsequent to the financial
year end, committed to the purchase of third primary concentration circuit and ongoing development of capital for
product mineral separation. The Group has been managing its financial liquidity during the financial year due to the
lower than budgeted financial performance of its mining operations.
The ability of the Group to continue as a going concern is dependent upon generating positive cash flows from the
Groups mining operations and/or raising additional working capital. These conditions indicate a material uncertainty
that may cast a significant doubt about the Group’s ability to continue as a going concern and, therefore, that it may
be unable to realise its assets and discharge its liabilities in the normal course of business.
The Directors have reviewed the Group’s financial position and are of the opinion that there are sufficient funds to
meet the entity’s working capital requirements as at the date of this report.
The Directors believe that it is reasonably foreseeable that the consolidated entity will continue as a going
concern and that it is appropriate to adopt the going concern basis in the preparation of the financial report after
consideration of the following factors:
• The Group has budgeted for positive future operating cash flows from its mining operations;
• The Company has the ability to issue additional securities to raise further working capital; and
• The Company has the ability to raise additional working capital from entering into new debt facilities.
Budgeted positive future operating cash flows from the mining operations at Tormin and Skaland including the
re-introduction of low cost, high-grade production from the Tormin Beaches, currently expected from end of the
March quarter 2024, completion of processing of the high grade South pit Inland Strands ore, improved production
from Q4 2024 with the introduction of the third primary concentrator into the processing circuit increasing the
theoretical capacity of ore processing at Tormin from 2.7 mtpa to 3.9 Mtpa. Management believes Tormin plant
reliability will significantly improve in 2024 due to mitigation strategies implemented for seawater intake, water
circulation and crusher support via the addition of a scalping screen in Q4 2023, combined with investment in
permanent solutions for these issues being implemented in 2024 including double efficiency cyclones, permanent
seawater intake solution, and a new water circulation circuit.
MINERAL COMMODITIES LTD | Annual Report 2023
51
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge
its liabilities other than in the normal course of business, and at amounts that differ from those stated in the financial
statements. The financial report does not include any adjustments relating to the recoverability or classification of
recorded assets or liabilities that might be necessary if the Group does not continue as a going concern.
(i) Compliance with IFRS
The consolidated financial statements of the Group also comply with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
•
financial assets and liabilities recognised at fair value.
(iii) Presentation currency
The consolidated financial statements are presented in United States dollars (“USD”), which is the Company’s
presentation currency.
1.3 Comparative Information
Certain comparatives have been reclassified to conform to current year presentation.
1.4 Principles of consolidation
The consolidated financial statements include the financial statements of the parent entity, Mineral Commodities
Ltd, and its controlled entities (together referred to hereafter as the “Group”). A list of significant controlled entities is
presented in Note 6.1.
Control is achieved when the Group is exposed, or has the rights, to variable returns from its involvement with
the investee and has the ability to affect those returns through its power over the investee. The Group reassesses
whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the
three elements of control. Specifically, the Group controls an investee if, and only if, the Group has all of the following:
• 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.
52
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Non-controlling interests in the results and equity of the entities that are not controlled by the Group is shown
separately in the Income Statement, Statement of Comprehensive Income, Balance Sheet and Statement of
Changes in Equity respectively.
1.5 Foreign currency
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial
statements are presented in United States dollars, which is the Company’s presentation currency.
• Assets and liabilities for each balance sheet presented have been translated at the closing rate at the date of
balance sheet;
• Results for the cash flow statement were translated at average daily exchange rates from 1 January 2023 to
31 December 2023; and
•
exchange differences on translating income, expenses and movements in equity and reserves at annual
average exchange rates and assets and liabilities at closing exchange rates from functional currency to
presentation currency are taken to the foreign currency translation reserve in the equity section and under
other comprehensive income/(expense) in the statement of comprehensive income.
(ii) Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and
qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the income statement, within
finance costs. All other foreign exchange gains and losses are presented in the income statement on a net basis
within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary
assets and liabilities, such as equities held at fair value through profit or loss, are recognised in profit or loss as
part of the fair value gain or loss and translation differences on non-monetary assets, such as equities classified
as financial assets, are recognised in other comprehensive income.
MINERAL COMMODITIES LTD | Annual Report 2023
53
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
•
•
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet;
income and expenses for each income statement and statement of comprehensive income are translated
at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions); and
•
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities,
and of borrowings and other financial instruments designated as hedges of such investments, are recognised
in other comprehensive income. when a foreign operation is sold or any borrowings forming part of the net
investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain
or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and translated at the closing rate.
1.6 Goods and Services Tax (“GST”) and Value Added Tax (“VAT”)
Revenues, expenses and assets are recognised net of the amount of GST and vAT except where the GST and vAT
incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST
and vAT is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable
and where receivables and payables are stated with the amount of GST and vAT included. The net amount of GST
and vAT recoverable from, or payable to, the taxation authority is included as part of receivables in the consolidated
balance sheet. Cash flows are included in the statements of cash flows on a gross basis and the GST and vAT
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
the amount of GST and vAT recoverable from, or payable to, the relevant taxation authority.
1.7 Critical accounting estimates and judgements
The Group makes significant estimates and judgements concerning the future. The resulting accounting estimates
may not equal the related actual results. The estimates and judgements that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The Directors evaluate estimates and judgements incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events and
are based on current trends and economic data, obtained both externally and within the Group.
Significant judgements, estimates and assumptions made by management in the preparation of these financial
statements are found in the following notes:
Note 2.4: Recognition of deferred taxes
Note 3.1: Exploration and evaluation expenditure
Note 3.2: Development expenditure
Note 3.3: Property, plant and equipment
Note 3.5: Rehabilitation provisions
1.8 Application of new and revised Australian Accounting Standards
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended
31 December 2023. The consolidated entity has not yet assessed the impact of these new or amended Accounting
Standards and Interpretations.
54
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
2. Financial Performance
This section highlights key financial performance of the Group for the reporting period including, where applicable,
the accounting policies applied and the key estimates and judgements made.
2.1 Segment information
(i) Description of segments
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker has been identified as the board of directors that
makes strategic decisions.
There is no goodwill attaching to any of the segments. There has been no impact on the measurement of the
assets and liabilities reported for each segment.
The chief operating decision maker has identified six reportable segments to its business, being:
1. Mineral sands mining and production (Tormin Mineral Sands project) – South Africa;
2. Mineral sands exploration (Xolobeni Mineral Sands project) – South Africa;
3. Graphite mining and production (Skaland) – Norway;
4. Exploration activities – Australia; and
5. Corporate (management and administration of the Company’s projects) – Australia, South Africa, and Norway.
(ii) Segment results, segment assets and segment liabilities
The segment information provided to the chief operating decision maker for the reportable segments for the year
ended 31 December 2023 is as follows:
2023
Tormin
Project
$
Xolobeni
Project
$
Skaland
Project
$
Australia
exploration
$
Corporate
$
Consolidation
eliminations
$
Total
$
Total segment revenue
22,099,748
Revenue from external customers
22,099,748
Adjusted EBITDA
5,949,072
Depreciation and amortisation
4,606,318
Total segment assets
44,608,834
–
–
–
–
–
6,470,545
6,470,545
(1,359,127)
1,224,554
–
–
–
–
1,418
1,418
–
–
28,571,711
28,571,711
(2,822,183)
(62,743)
1,705,019
944,749
–
6,775,621
14,682,756
13,024,356
(469,676)
(627,500)
71,218,770
Total segment liabilities
12,326,235
4,015,384
2,761,904
2,270,596
7,036,407
(82,310)
28,328,216
2022
Tormin
Project
$
Xolobeni
Project
$
Skaland
Project
$
Australia
exploration
$
Total segment revenue
36,494,614
Revenue from external customers
36,494,614
–
–
7,909,501
7,909,501
–
–
Corporate
$
55,561
55,561
Consolidation
eliminations
$
Total
$
–
–
44,459,676
44,459,676
Adjusted EBITDA
(297,249)
(263)
762,404
10,182
(4,012,676)
(102,498)
(3,640,098)
Depreciation and amortisation
5,156,141
Impairment
–
–
–
1,359,225
–
996,922
–
834,764
–
–
–
7,512,288
834,764
Total segment assets
138,112,245 4,420,561
16,220,169
12,249,430
317,293,662
(409,745,619)
78,550,448
Total segment liabilities
122,029,229 4,373,830
25,573,912
14,166,802
280,231,881
(415,057,294)
31,318,360
2023 financial year segment assets and liabilities has removed intercompany balances to better highlight
underlying financial position.
MINERAL COMMODITIES LTD | Annual Report 2023
55
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(iii) Reconciliation of EBITDA (segment result) to loss before tax
Adjusted EBITDA reconciles to operating loss before income tax as follows:
Adjusted EBITDA
Interest revenue/(expense)
Depreciation and amortisation
Impairment charges
Disposals
Operating loss before income tax
2.2 Revenue
Accounting Policies
31 Dec 2023
$
1,705,019
31 Dec 2022
$
(3,640,098)
(505,669)
(29,328)
(6,775,621)
(7,512,288)
(8,938,322)
–
–
(863,354)
(14,514,594)
(12,045,068)
Revenue is recognised when the significant control of products has been transferred to the customer, recovery of
the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there
is no continuing management involvement with the goods and the amount of revenue can be measured reliably.
Revenue is measured net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
The timing of the transfer of control varies depending on the individual terms of the sales agreement. Generally for
the Group, this is based on free-on-board (“FOB”) sales where transfer of control passes at port of origin or cost,
insurance and freight (“CIF”) sales where control passes at port of destination. Sales revenue is recognised for FOB
and CIF sales on bill of lading date. Sales revenue comprises gross revenue earned from the provision of product
to customers. Sales are initially recognised at estimated sales value when the product is delivered. Adjustments are
made for variations in metals price, assay, weight and moisture content between the time of delivery and the time of
final settlement of sales proceeds.
The majority of the Group’s revenue is derived from product sales with revenue recognised at a point in time when
control of the goods has transferred to the customer.
From continuing operations
Sales revenue
Sale of product
Other revenue
Other income
(i) Contract liabilities
A reconciliation of contract liabilities is below:
As at 1 January
Cash received in advance of performance and not recognised in revenue
during the period/(product delivered and earned)
As at 31 December
31 Dec 2023
$
31 Dec 2022
$
28,264,817
44,310,010
306,894
149,666
2023
$
3,646,486
(1,858,684)
1,787,802
2022
$
–
3,646,486
3,646,486
56
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
2.3 Expenses
This note provides an analysis of expenses by nature.
(i) Mining & processing costs
Mining and processing costs include the following material expenditure items:
Transport of product
Fuel
Wages and salaries
Repairs and maintenance
Depreciation and amortisation – mining and processing assets
Finance costs
(ii) Administration expenses
Administration expenses include the following material expenditure items:
Note
31 Dec 2023
$
31 Dec 2022
$
3,487,751
6,915,178
6,182,542
9,802,845
10,250,040
10,853,255
5,822,872
5,830,872
2,196,039
7,092,291
6,515,366
2,260,904
Directors and key management personnel remuneration
1,393,280
3,222,924
Depreciation – corporate assets
944,749
996,922
(iii) Impairment charges
Exploration expenditure
Development expenditure
Advance to Blue Bantry
Impairment charges include:
3.1
3.2
4.2
4,965,717
2,981,842
990,763
8,938,322
–
–
–
–
• Prudent write down of the carrying value of the Xolobeni exploration asset, given the moratorium over the asset
has not been officially lifted and there is question over the probability of the development and commercial
exploitation of this asset in this ongoing environment;
•
•
Intangible mine properties assets at Tormin and Skaland; and
a long term receivable with our BEE Partner at Tormin, which is expected to be included as an acquisition cost
as a part of the proposed MSR Restructure that aims to increase the Company’s ownership interest in Tormin
from 50% to 69%.
2.4 Taxation
Accounting Policies
The income tax expense for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
The current income tax charge is calculated based on the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the Company’s subsidiaries and associates operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate based on amounts
expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. however,
MINERAL COMMODITIES LTD | Annual Report 2023
57
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is
also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit/loss. Deferred income tax
is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian
taxation law. Mineral Commodities Ltd is the head entity in the tax-consolidated group. The head entity and the
controlled entities in the tax-consolidated group continue to account for their own current and deferred tax amounts.
Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members
of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group).
The Company and the other entities in the tax-consolidated group have entered into a tax funding agreement and
a tax sharing agreement.
(i)
Income tax expense/(benefit)
The following provides an analysis of the Group’s income tax expense/(benefit), shows what amounts are
recognised directly in equity and how the tax expense is affected by non-assessable and non-deductible items.
It also explains significant estimates made in relation to the Group’s tax position.
The components of income tax expense/(benefit) comprise:
Current tax expense/(benefit)
Deferred tax (benefit)/expense
Adjustments for current tax (benefit)/expense of prior periods
Income tax (benefit)/expense is attributable to:
(Loss)/profit from continuing operations
Aggregate income tax (benefit)/expense (1)
Deferred income tax (benefit)/expense included in income tax expense comprises:
Decrease/(increase) in deferred tax assets
(Increase)/decrease in deferred tax liabilities
31 Dec 2023
$
39,479
(4,523,414)
31,867
31 Dec 2022
$
126,159
(590,111)
(65,415)
(4,452,068)
(529,367)
(4,452,068)
(4,452,068)
(2,757,641)
(1,694,426)
(4,452,068)
(529,367)
(529,367)
296,778
(886,889)
(590,111)
(1)
The income tax benefit for the financial year is the tax receivable on the current period’s taxable expense based on the applicable income tax rate and tax law for each
jurisdiction. This has resulted in an effective tax rate for the year ending 31 December 2023 of 31% (2022: 4%).
58
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Numerical reconciliation of income tax expense to prima facie tax expense
(Loss)/profit from continuing operations before income tax expense
Prima facie tax payable/(benefit) on profit/(loss) from ordinary activities before
at a rate of 30% (2022: 30%)
Foreign tax rate differential
Tax at consolidated amount
Tax effect of:
Entertainment
Foreign exchange
Donations
Share based payment
Depreciation on Skaland acquisition assets
Other non-assessable items
Other non-deductible items
Gain from disposal of assets
Adjustment for current tax of prior period
Unrecognised deferred tax asset
Income tax expense/(benefit)
(ii) Deferred tax assets and liabilities
Accounting Policies
31 Dec 2023
$
(14,514,594)
31 Dec 2022
$
(12,045,068)
(4,354,378)
(3,613,520)
706,423
394,587
(3,647,955)
(3,218,933)
998
819
(81,356)
1,373,823
775
(51,849)
–
19
97,673
36
(190,586)
852,073
63,549
–
36,750
(582,395)
–
13,818
(65,415)
416,720
(4,452,068)
(529,367)
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it
is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in foreign operations where the Company is able to control the timing of the reversal of
the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
Significant Judgement – Deferred taxes recognised
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. The Group has
$14,234,541 (2022: $1,702,839) of tax losses carried forward. These losses relate to subsidiaries that have a
history of losses, do not expire, and may not be used to offset taxable income. The Group considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. On this basis,
the Group has determined that it can recognise deferred tax assets on the tax losses carried forward.
The Group operates in a number of tax jurisdictions. Transactions between jurisdictions are subject to transfer
pricing requirements which can require modification as the Group’s operations evolve.
MINERAL COMMODITIES LTD | Annual Report 2023
59
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(a) Deferred tax assets
Recognised deferred tax assets
Tax losses
Trade and other receivables
Financial assets
Lease liability
Provisions/accrued expenditure
Unrealised foreign exchange loss
Property, plant and equipment
Business related expenditure and borrowing costs
Set-off against deferred tax liabilities
31 Dec 2023
$
31 Dec 2022
$
3,652,520
152,207
35,716
639,663
603,937
1,105,776
1,996,575
56,065
1,702,839
203,828
–
1,019,214
403,051
–
1,929,526
109,138
8,242,459
5,367,596
(7,654,002)
(5,367,596)
588,457
–
Movements
Trade
& other
receivables
$
Financial
assets
$
Lease
liability
$
Tax Losses
$
Provisions/
accrued
expenditure
$
Unrealised
foreign
exchange
loss
$
Business
related
expenditure
& borrowing
costs
$
Property,
plant &
equipment
$
Total
$
At 1 January 2023
1,702,839
203,828
–
1,019,214
403,051
–
109,138
1,929,526
5,367,596
(charged)/credited
–
to profit or loss
1,949,681
(51,621)
35,716
(379,551)
200,886
1,105,776
(53,073)
67,049
2,874,863
At 31 December 2023
3,652,520
152,207
35,716
639,663
603,937
1,105,776
56,065
1,996,575
8,242,459
60
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Movements
Trade
& other
receivables
$
Financial
assets
$
Lease
liability
$
Tax Losses
$
Provisions/
accrued
expenditure
$
Unrealised
foreign
exchange
loss
$
Business
related
expenditure
& borrowing
costs
$
Property,
plant &
equipment
$
Total
$
At 1 January 2022
1,781,878
358,221
2,091
1,235,636
477,846
59,494
151,471
1,929,526
5,996,163
(charged)/credited
–
to profit or loss
(79,039)
(154,393)
(2,091)
(216,422)
(74,795)
(59,494)
(42,333)
–
(628,567)
At 31 December 2022
1,702,839
203,828
–
1,019,214
403,051
–
109,138
1,929,526
5,367,596
(b) Deferred tax liabilities
Recognised deferred tax liabilities
Unrealised foreign exchange gain
Property, plant and equipment
Prepayments
Trade and other payables
Capital raising cost
Exploration Expenditure
31 Dec 2023
$
31 Dec 2022
$
1,708,214
3,201,462
78,239
237,082
116,919
2,311,385
7,654,002
839
7,039,349
107,133
13,846
87,824
2,099,437
9,348,428
Set-off against deferred tax assets
(7,654,002)
(5,367,596)
–
3,980,832
Unrealised
foreign
exchange gain
$
Property,
plant &
equipment
$
Prepayments
$
Trade
& other
payables
$
Capital
Raising
Cost
$
Exploration
expenditure
$
Development
Expenditure
$
Movements
At 1 January 2023
839
7,039,349
107,133
13,846
87,824
2,099,437
(charged)/credited
–
to profit or loss
1,707,375
(3,837,887)
(28,194)
223,236
29,095
211,948
At 31 December 2023
1,708,214
3,201,462
78,939
237,082
116,919
2,311,385
–
–
–
Total
$
9,348,428
(1,694,426)
7,654,002
Unrealised
foreign
exchange gain
$
Property,
plant &
equipment
$
Prepayments
$
Trade
& other
payables
$
Capital
Raising
Cost
$
Exploration
expenditure
$
Development
Expenditure
$
Total
$
Movements
At 1 January 2022
–
7,097,168
94,858
13,051
62,368
2,434,016
1,100,449
10,801,910
(charged)/credited
–
to profit or loss
839
(57,819)
12,275
–
25,456
(334,579)
(1,100,449)
(1,453,482)
At 31 December 2022
839
7,039,349
107,133
13,051
87,824
2,099,437
–
9,348,428
MINERAL COMMODITIES LTD | Annual Report 2023
61
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
2.5 Earnings per share
(i) Basic earnings per share
Accounting Policies
Basic earnings per share is determined by dividing the profit after income tax attributable to members of the
Company by the weighted average number of ordinary shares outstanding during the financial year.
From continuing operations attributable to the ordinary equity holders of the Company
Total basic earnings per share attributable to the ordinary equity holders of the Company
2023
US Cents
(1.37)
(1.37)
2022
US Cents
(2.13)
(2.13)
(ii) Diluted earnings per share
Accounting Policies
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking
into account amounts unpaid on ordinary shares and any reduction in earnings per share would arise from the
exercise of options outstanding at the end of the financial year.
From continuing operations attributable to the ordinary equity holders of the Company
Total diluted earnings per share attributable to the ordinary equity holders of the Company
Reconciliation of earnings used in the calculation of earnings per share
Basic earnings per share
Loss attributable to the ordinary equity holders of the Company used in calculating basic
earnings per share:
From continuing operations
Discontinued operations
Loss for the year
Diluted earnings per share
Loss attributable to the ordinary equity holders of the Company used in calculating diluted
earnings per share:
From continuing operations
Discontinued operations
Loss for the year
2023
US Cents
(1.37)
(1.37)
2022
US Cents
(2.13)
(2.13)
2023
$
2022
$
(10,062,526)
(11,515,701)
–
–
(10,062,526)
(11,515,701)
(10,062,526)
(11,515,701)
–
–
(10,062,526)
(11,515,701)
62
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
2023
No.
2022
No.
Weighted average No. of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
736,673,662
540,996,399
Adjustment for calculation of diluted earnings per share:
Performance rights
–
–
Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in calculating diluted earnings per share
736,673,662
540,996,399
2.6 Dividends
Accounting policies
Dividends are recognised as a liability at the time the Directors resolve to pay or declare the dividend.
No dividend was declared for the year ended 31 December 2023.
3. Capital Expenditure, Operating Assets and Rehabilitation Obligations
This section includes information about the assets used by the Group to generate profits and revenue, specifically
information relating to its exploration and evaluation assets, mine development expenditures, property, plant and
equipment, associated rehabilitation obligations and commitments for capital expenditure not yet recognised as
a liability.
3.1 Exploration and evaluation assets
Accounting Policies
Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each
area of interest. Such expenditure comprises direct costs and does not include general overheads or administrative
expenditure not having a specific nexus with a particular area of interest.
Exploration expenditure for each area of interest is carried forward as an asset provided the rights to tenure of the
area of interest are current and one of the following conditions is met:
•
The exploration and evaluation expenditures are expected to be recouped through successful development and
exploitation of the area of interest, or alternatively, by its sale; or
• Exploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
and significant operations in, or in relation to, the area of interests is continuing.
Exploration expenditure is written off when it fails to meet at least one of the conditions outlined above or an area of
interest is abandoned.
when a decision is made to develop an area of interest, all carried forward exploration expenditure in relation to the
area of interest is transferred to development expenditure.
No amortisation is charged during the exploration and evaluation phase.
Refer to note 3.4 for the Group’s accounting policy on impairment of exploration and evaluation assets.
Significant judgement
The carrying value of exploration assets is reviewed on an area of interest basis. Exploration in Australia, excluding
Munglinup, is in its infancy stages and is being carried forward on the basis that these areas have not, at the reporting
date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interests is continuing.
MINERAL COMMODITIES LTD | Annual Report 2023
63
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
As at 1 January
Expenditure during the year
Write-off discontinued projects
Note
31 Dec 2023
$
17,507,213
1,080,359
–
Re-classification: transfer from property, plant and equipment
3.3
1,424,495
Impairment charge
Exchange differences
As at 31 December
31 Dec 20212
$
19,087,833
432,910
(834,764)
–
–
(4,965,717)
(445,913)
(1,178,766)
14,600,437
17,507,213
The impairment charge during the current financial year reflects the prudent write down of the carrying value of the
Xolobeni exploration asset, given the moratorium over the asset has not been officially lifted and there is question
over the probability of the development and commercial exploitation of this asset in this ongoing environment.
Discontinued projects in the prior financial year reflect assets disposed in the settlement with the previous CEO.
3.2 Development expenditure
Accounting Policies
Development expenditure
Development expenditure represents the accumulated exploration, evaluation, land and development expenditure
incurred by or on behalf of the Group in relation to areas of interest in which mining of a mineral resource
has commenced.
when further development expenditure is incurred in respect of a mine property after commencement of production,
such expenditure is carried forward as part of the development expenditure only when substantial future economic
benefits are thereby established, otherwise such expenditure is classified as part of the cost of production.
The estimated recoverable reserves and life of the mine and the remaining useful life of each class of asset
are reassessed at least annually. where there is a change in the reserves/resources amortisation rates are
correspondingly adjusted. Refer to the table in Note 3.3 for basis of amortisation rates used.
Refer to Note 3.4 for the Group’s accounting policy on impairment of development expenditure.
Significant judgement
Reserves and Resources
In order to calculate ore reserves and mineral resources, estimates and assumptions are required about a range
of geological, technical and economic factors, including quantities, grades, production techniques, recovery
rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. The Group
estimates its ore reserves and mineral resources based on information compiled by Competent Persons (as defined
in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
as revised in 2012 (the JORC code).
As economic assumptions used to estimate reserves change and as additional geological data is generated during
the course of operations, estimates of reserves and mineral resources may vary from period to period. Changes in
reported reserves and mineral resources may affect the Group’s financial results and financial position in a number
of ways, including the following:
• Asset carrying values may be affected due to changes in estimated future cash flows;
• Depreciation and amortisation charges in profit or loss may change where such charges are determined by the
units of production basis, or where the useful economic lives of assets change; and
• Restoration and rehabilitation provision may be affected due to changes in the magnitude of future restoration
and rehabilitation expenditure.
64
MINERAL COMMODITIES LTD | Annual Report 2023
As at 1 January
Additions
Amortisation expense
Impairment charge
Exchange differences
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
31 Dec 2023
$
4,676,944
31 Dec 2022
$
7,150,293
296,309
181,661
(1,456,056)
(1,493,797)
(2,981,842)
–
(535,355)
(1,161,213)
–
4,676,944
Carrying value assessment
The Company has undertaken an assessment of impairment and take the position to impair its intangible mine
properties assets at Tormin and Skaland. Refer Note 3.4.
3.3 Property, plant and equipment
Accounting Policies
Property, plant, and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Items of plant and equipment are initially recorded at cost and include any expenditure that is directly attributable to
acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset as appropriate. All other repairs and maintenance are charged to the profit for the year in which they are incurred.
De-commissioning assets relates to capitalised restoration costs expected to be incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Depreciation of property, plant, and equipment
Depreciation and amortisation are provided to expense the cost of property, plant and equipment, and de-commissioning
assets and development, over its estimated useful life on a straight line or units of usage (activity) basis.
MINERAL COMMODITIES LTD | Annual Report 2023
65
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
The basis of depreciation and amortisation of each asset is reviewed annually and changes to the basis of
depreciation and amortisation are made if the straight line or units of production basis is no longer considered to
represent the expected pattern of consumption of economic benefits.
The reserves and life of each mine and the remaining useful life of each class of asset are reassessed at regular
intervals and the depreciation and amortisation rates adjusted accordingly on a prospective basis. The estimated
useful lives for the main categories of assets are as follows:
Fixed Asset Category
Mine properties and development
Land
Mine buildings
Estimated Useful Life
The shorter of applicable mine life or generally 10 years
Not depreciated
The shorter of applicable mine life or generally 10 years
Excavators and loaders working in significant salt exposed conditions
Generally 12,000 hours operation
All other heavy earth moving vehicles
Generally 18,000 hours operation
Light and other mobile vehicles
Generally 5 years
Mine specific machinery, plant and equipment
The shorter of applicable mine life or generally 10 years
Rights of use asset
Lease term, generally 3 to 5 years
Other machinery, plant and equipment
Computer hardware
Software acquisitions and development
Generally 10 years
Generally 4 years
Generally 3 years
Office leasehold fit-outs
Generally lease term, including extensions
Other office furniture and fittings
Generally 10 years
Note: For assets under a finance lease, if there is no reasonable certainty that the lessee will obtain ownership by the
end of the lease term, the asset shall be fully depreciated over the shorter of the lease term or its useful life.
Note: “Generally” implies that if a specific asset or class of assets’ useful life is reasonably able to be determined as
less than that stipulated above, then the applicable lower estimated useful life is to be used.
Disposal of assets
The gain or loss on disposal of assets is calculated as the difference between the carrying amount of the asset at the
time of disposal and the proceeds on disposal and is included in profit for the year of disposal.
Significant judgement
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life mine development assets which requires significant estimation and judgement.
The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives,
or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.
The estimated recoverable reserves and life of the mine and the remaining useful life of each class of asset is
reassessed at least annually based upon latest resource information and replenishment rates. In circumstances
where conversion of resources into reserves is expected, applicable resources are included in life of mine
assessments and reassessments. In circumstances where there is reasonable evidence of natural replenishment
of resources, the applicable natural replenishment resource estimates are included in the life of mine assessments
and reassessments.
where the lives of the assets are shorter than the mine life, their costs are amortised based on the useful life
of the assets. where there is a change in the estimated life of mine, amortisation rates are correspondingly
adjusted which may change the depreciation and amortisation charges in the statement of profit or loss and other
comprehensive income.
66
MINERAL COMMODITIES LTD | Annual Report 2023
l $
a
t
o
T
k
r
o
w
x
e
p
a
C
s $
s
e
r
g
o
r
p
n
i
t
e
s
s
a
e
s
u
-
f
o
-
t
h
g
R
i
t $
e
s
s
a
g
n
i
n
o
i
s
s
i
m
m
o
c
e
D
s $
e
l
c
i
h
e
v
e
n
M
i
&
t
n
a
l
P
y $
r
e
n
i
h
c
a
m
,
e
r
u
t
i
n
r
u
F
&
s
g
n
i
t
t
fi
t $
n
e
m
p
i
u
q
e
&
d
n
a
l
d
l
o
h
e
e
r
F
s $
g
n
i
d
l
i
u
b
,
9
3
1
5
6
4
,
3
5
4
0
2
,
5
4
9
7
,
4
5
9
1
2
2
,
,
3
1
5
6
8
1
5
9
,
8
6
1
,
6
0
1
8
9
4
,
4
7
2
,
5
2
3
6
2
,
1
9
2
,
1
6
8
1
,
4
7
6
,
4
)
5
9
4
,
4
2
4
1
(
,
)
5
9
4
,
4
2
4
1
,
(
–
)
4
8
2
,
6
0
5
,
2
(
–
–
,
4
4
3
1
1
6
1
,
,
4
4
3
1
1
6
1
,
–
,
)
3
2
6
7
7
9
1
(
,
–
)
,
3
2
6
7
7
9
1
,
(
–
–
–
–
)
0
2
5
,
6
9
9
,
2
(
)
5
8
5
1
2
6
,
(
)
5
5
6
1
9
8
,
(
)
2
9
4
,
3
6
(
3
4
8
7
7
6
,
,
8
4
,
3
8
1
4
0
0
,
5
6
7
6
,
2
5
3
,
0
1
3
7
3
,
8
8
8
–
–
–
–
)
2
7
4
,
7
(
6
9
6
,
8
9
–
–
–
4
8
2
,
6
0
5
,
2
–
–
–
–
–
–
–
–
)
9
3
9
,
2
2
3
,
1
(
)
5
9
3
,
8
2
(
)
2
8
9
,
0
6
(
3
2
0
2
r
e
b
m
e
c
e
D
1
3
d
e
d
n
e
r
a
e
Y
3
2
0
2
y
r
a
u
n
a
J
1
t
a
s
A
e
u
l
a
v
r
i
a
f
t
a
t
s
o
C
s
n
o
i
t
i
d
d
A
l
s
a
s
o
p
s
D
i
e
r
u
t
i
d
n
e
p
x
e
n
o
i
t
a
r
o
p
x
e
l
o
t
r
e
f
s
n
a
r
T
s
e
c
n
e
r
e
f
f
i
d
e
g
n
a
h
c
x
E
s
n
o
i
t
a
c
fi
i
l
s
s
a
c
-
e
R
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
,
)
1
8
1
8
9
1
5
2
(
,
)
5
6
5
,
9
1
3
,
5
(
4
1
9
,
2
4
4
2
1
2
,
4
4
4
1
,
)
0
2
6
,
0
3
6
,
8
2
(
–
–
–
–
–
)
9
0
5
1
9
4
,
,
6
(
)
8
6
0
,
6
0
3
(
)
8
6
1
,
6
0
1
(
)
3
7
9
,
7
1
7
,
5
1
(
)
5
1
4
,
7
0
1
,
1
(
)
8
4
0
,
9
6
4
,
1
(
3
2
0
2
y
r
a
u
n
a
J
1
t
a
s
A
)
2
3
9
,
2
7
0
,
2
(
)
7
7
7
7
8
,
(
4
1
9
,
2
4
4
5
9
2
,
5
1
4
–
4
4
3
,
9
1
–
–
)
2
8
6
,
8
0
4
,
2
(
)
2
0
8
,
3
4
1
(
)
3
7
3
,
6
0
6
(
n
o
i
t
a
s
i
t
r
o
m
a
d
n
a
n
o
i
i
t
a
c
e
r
p
e
D
–
–
–
l
s
a
s
o
p
s
D
i
2
7
4
,
7
7
5
3
,
9
6
9
6
5
3
,
1
2
8
8
3
,
1
1
s
e
c
n
e
r
e
f
f
i
d
e
g
n
a
h
c
x
E
)
1
3
2
,
6
0
7
7
,
(
)
1
0
5
,
4
7
3
(
)
6
9
6
,
8
9
(
)
8
9
2
,
7
5
1
,
7
1
(
)
1
6
8
,
9
2
2
,
1
(
)
3
3
0
,
4
6
0
,
2
(
3
2
0
2
r
e
b
m
e
c
e
D
1
3
t
a
s
A
3
4
8
7
7
6
,
,
8
4
,
3
8
1
4
0
0
,
5
6
7
6
,
2
5
3
,
0
1
3
7
3
,
8
8
8
6
9
6
,
8
9
3
4
8
,
7
5
4
,
6
2
8
6
8
,
2
6
2
,
1
4
0
2
,
3
1
6
,
4
t
n
u
o
m
a
k
o
o
b
t
e
N
e
u
a
v
l
r
i
a
f
t
a
t
s
o
C
)
0
2
6
,
0
3
6
,
8
2
(
–
)
1
3
2
,
6
0
7
7
,
(
)
1
0
5
,
4
7
3
(
)
6
9
6
,
8
9
(
)
8
9
2
,
7
5
1
,
7
1
(
)
1
6
8
,
9
2
2
,
1
(
)
3
3
0
,
4
6
0
,
2
(
n
o
i
t
a
s
i
t
r
o
m
a
d
n
a
n
o
i
i
t
a
c
e
r
p
e
d
l
d
e
t
a
u
m
u
c
c
A
3
2
2
7
4
0
,
,
0
2
,
3
8
1
4
0
0
,
5
5
4
4
,
6
4
6
,
2
2
7
8
,
3
1
5
–
5
4
5
,
0
0
3
,
9
7
0
0
,
3
3
1
7
1
,
9
4
5
,
2
t
n
u
o
m
a
k
o
o
b
t
e
N
MINERAL COMMODITIES LTD | Annual Report 2023
67
3
4
8
,
7
5
4
,
6
2
8
6
8
,
2
6
2
,
1
4
0
2
,
3
1
6
,
4
3
2
0
2
r
e
b
m
e
c
e
D
1
3
t
a
s
A
n
o
i
t
a
s
i
t
r
o
m
a
&
n
o
i
t
a
i
c
e
r
p
e
d
d
e
t
a
l
u
m
u
c
c
A
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
l $
a
t
o
T
k
r
o
w
x
e
p
a
C
s $
s
e
r
g
o
r
p
n
i
t
e
s
s
a
e
s
u
-
f
o
-
t
h
g
R
i
t $
e
s
s
a
g
n
i
n
o
i
s
s
i
m
m
o
c
e
D
s $
e
l
c
i
h
e
v
e
n
M
i
&
t
n
a
l
P
y $
r
e
n
i
h
c
a
m
,
e
r
u
t
i
n
r
u
F
&
s
g
n
i
t
t
fi
t $
n
e
m
p
i
u
q
e
&
d
n
a
l
d
l
o
h
e
e
r
F
s $
g
n
i
d
l
i
u
b
9
1
4
,
0
7
5
,
4
5
7
0
8
,
6
1
1
8
,
,
0
2
3
7
1
2
1
1
,
7
9
5
,
0
2
0
1
,
1
2
3
,
3
1
1
9
7
9
,
2
1
9
,
7
2
0
0
8
,
1
8
3
,
1
5
9
5
,
7
0
8
,
4
–
–
)
4
0
7
,
6
6
5
,
3
(
)
0
3
9
,
8
2
1
2
,
(
–
–
7
0
0
,
4
3
7
,
5
4
5
6
7
7
5
,
,
2
0
2
2
1
9
8
,
,
2
–
–
–
–
–
–
–
3
3
1
,
5
6
2
)
4
7
7
,
7
3
4
,
1
(
–
–
–
–
–
–
)
3
8
5
,
2
7
2
,
3
(
)
6
2
3
,
0
2
6
(
)
6
8
5
,
6
8
8
(
)
2
3
7
,
8
6
(
)
3
5
1
,
7
(
)
0
4
8
,
5
6
4
,
1
(
)
7
3
5
,
0
9
(
)
9
0
4
,
3
3
1
(
2
2
0
2
r
e
b
m
e
c
e
D
1
3
d
e
d
n
e
r
a
e
Y
2
2
0
2
y
r
a
u
n
a
J
1
t
a
s
A
e
u
l
a
v
r
i
a
f
t
a
t
s
o
C
s
n
o
i
t
i
d
d
A
s
e
c
n
e
r
e
f
f
i
d
e
g
n
a
h
c
x
E
s
n
o
i
t
a
c
fi
i
l
s
s
a
c
-
e
R
l
s
a
s
o
p
s
D
i
,
9
3
1
5
6
4
,
3
5
4
0
2
,
5
4
9
7
,
4
5
9
1
2
2
,
,
3
1
5
6
8
1
5
9
,
8
6
1
,
6
0
1
8
9
4
,
4
7
2
,
5
2
3
6
2
,
1
9
2
,
1
6
8
1
,
4
7
6
,
4
2
2
0
2
r
e
b
m
e
c
e
D
1
3
t
a
s
A
)
0
0
9
,
5
3
8
,
0
2
(
)
1
9
4
,
8
1
0
,
6
(
5
6
4
7
1
2
,
0
1
5
,
4
3
4
1
,
,
)
1
8
1
8
9
1
5
2
(
,
–
–
–
–
–
)
,
7
7
1
4
2
1
4
,
(
)
,
5
2
1
6
2
2
(
)
1
2
3
,
3
1
1
(
)
7
7
5
,
8
1
5
,
4
1
(
)
9
1
3
,
3
7
9
(
)
1
8
3
,
0
8
8
(
2
2
0
2
y
r
a
u
n
a
J
1
t
a
s
A
n
o
i
t
a
s
i
t
r
o
m
a
&
n
o
i
t
a
i
c
e
r
p
e
d
d
e
t
a
l
u
m
u
c
c
A
–
–
)
,
1
1
8
7
4
7
2
,
(
)
5
5
7
,
8
9
(
–
–
9
7
4
,
0
8
3
2
1
8
,
8
1
3
5
1
,
7
)
0
0
3
,
6
5
3
,
2
(
)
2
6
5
,
9
9
1
(
)
3
6
0
,
6
1
6
(
n
o
i
t
a
s
i
t
r
o
m
a
d
n
a
n
o
i
i
t
a
c
e
r
p
e
D
5
6
4
,
7
1
2
9
3
4
,
9
3
9
–
–
l
s
a
s
o
p
s
D
i
6
6
4
,
5
6
6
9
3
,
7
2
s
e
c
n
e
r
e
f
f
i
d
e
g
n
a
h
c
x
E
)
9
0
5
1
9
4
,
,
6
(
)
8
6
0
,
6
0
3
(
)
8
6
1
,
6
0
1
(
)
3
7
9
,
7
1
7
,
5
1
(
)
5
1
4
,
7
0
1
,
1
(
)
8
4
0
,
9
6
4
,
1
(
2
2
0
2
r
e
b
m
e
c
e
D
1
3
t
a
s
A
,
9
3
1
5
6
4
,
3
5
4
0
2
,
5
4
9
7
,
4
5
9
1
2
2
,
,
3
1
5
6
8
1
5
9
,
8
6
1
,
6
0
1
8
9
4
,
4
7
2
,
5
2
3
6
2
,
1
9
2
,
1
6
8
1
,
4
7
6
,
4
t
n
u
o
m
a
k
o
o
b
t
e
N
e
u
a
v
l
r
i
a
f
t
a
t
s
o
C
,
)
1
8
1
8
9
1
5
2
(
,
–
)
9
0
5
1
9
4
,
,
6
(
)
8
6
0
,
6
0
3
(
)
8
6
1
,
6
0
1
(
)
3
7
9
,
7
1
7
,
5
1
(
)
5
1
4
,
7
0
1
,
1
(
)
8
4
0
,
9
6
4
,
1
(
n
o
i
t
a
s
i
t
r
o
m
a
d
n
a
n
o
i
i
t
a
c
e
r
p
e
d
l
d
e
t
a
u
m
u
c
c
A
8
5
9
,
6
6
2
,
8
2
4
0
2
,
5
4
9
7
,
5
4
4
,
0
3
7
,
6
,
7
9
7
5
4
6
–
5
2
5
,
6
5
5
,
9
8
4
8
,
3
8
1
8
3
1
,
5
0
2
,
3
t
n
u
o
m
a
k
o
o
b
t
e
N
68
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
3.4 Impairment of non-current assets
Accounting Policies
The carrying amounts of the Group’s exploration and evaluation assets, development expenditure and property,
plant and equipment are reviewed at each reporting date to determine whether there is any indication of impairment.
where an indicator of impairment exists, a formal estimate of the recoverable amount is made.
Indicators of impairment – exploration and evaluation assets
The carrying amounts of the Group’s exploration and evaluation assets are reviewed at each reporting date, to
determine whether any of the following indicators of impairment exists:
•
Tenure over the licence area has expired during the period or will expire in the near future, and is not expected to
be renewed; or
• Substantive expenditure on further exploration for, and evaluation of, mineral resources in the specific area is not
budgeted or planned; or
• Exploration for, and evaluation of, resources in the specific area have not led to the discovery of commercially
viable quantities of resources, and the Group has decided to discontinue activities in the specific area; or
• Sufficient data exists to indicate that although a development is likely to proceed, the carrying amount of the
exploration and evaluation asset is unlikely to be recovered in full from successful development or from sale.
Impairment testing – other assets
Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs
of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows from other
assets or groups of assets (cash-generating units–CGU).
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
External and internal indicators of impairment as at 31 December 2023 included:
• Market capitalisation of the Company is lower than net assets of the Group; and
•
Increased costs of production.
Impairment Testing
(i) Methodology
Impairment is recognised when the carrying amount exceeds the recoverable amount. The recoverable amount,
being the value in use of the CGU, has been estimated using the discounted cashflows method based on the
Group’s recoverable minerals.
value in use is estimated based on discounted cash flows using market-based commodity price, estimated
quantities of recoverable minerals, production levels, operating costs and capital requirements. when Life of
Mine (“LOM”) plans fully utilise the existing mineral resource and the Group have demonstrated an ability to
replenish resources, an estimated replenishment rate has been applied to unmined resources.
Estimates of quantities of recoverable minerals, production levels, operating costs and capital requirements are
sourced from the Group planning and budgeting process, mill capacity levels and mining plans for the following
year. The 2024 budget and mine plan were developed in the context of the current commodities environment.
Significant judgements and assumptions are made by the Group to determine value in use. This includes
assessing variable key assumptions such as commodity prices, cost structures, production utilisation and
capacity, available minerals and discount rates. Any change in these variable assumptions can cause adverse
changes in one or more of the assumptions used to estimate value in use.
MINERAL COMMODITIES LTD | Annual Report 2023
69
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(ii) Key Assumptions
The table below summarises the key assumptions used in the 31 December 2023 carrying value assessments.
Assumptions
Pre-tax discount rate (%)
Inflation rate (5)
Average unit production cash costs per tonne of net final concentrate produced (US$/70 dmt)
Reserve (‘M tonnes)
Production (tph)
Garnet price (USD/t)
Ilmenite price(USD/t)
Non-mag price(USD/t)
Avg. Flake price (USD/t)
Avg. Medium Flake price (USD/t)
Avg. Fine Medium Flake price (USD/t)
Avg. Powder price (USD/t)
Discount rate
Tormin
(2024–2052)
Skaland
(2024–2031)
17.4%
4.0%
157
21.8
320–520
120–200
135–350
836–1,600
–
–
–
–
13.7%
4.0%
580
0.6
7–11
–
–
–
1,191–1,429
834–1008
693–832
503–604
The future cash flows of the CGU are discounted by the estimated real weighted average cost of capital (“wACC”),
pursuant to the Capital Asset Pricing Model. The nominal pre-tax wACC has been derived from comparable
company analysis, in addition to the wACC rate of the group’s mining operations being the primary CGU.
Reserves
Reserves were based on the Group’s JORC 2012 compliant Annual Resource and Reserve Update Statement
announced to the Australian Securities Exchange in April 2023 adjusted for accrual tonnes mined in 2023.
Production
Life of mine production activity are based on the Group’s latest annual budget and the LOM plan.
Estimated production is assumed consistent with the capacity constraint of both the plants considered while
assuming a constant recovery rate. Discounted cash flows include expected cost improvements and sustaining
capital requirements.
Commodity prices
Commodity prices are estimated with reference to external market forecasts and reviewed at least annually.
The price applied has taken into account observable market data.
70
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(iii) Impacts
Due to the recoverable amount of the mining operations CGU being greater than the estimated carrying amount,
no impairment was required for the year ending 31 December 2023. however, due to the 2023 performance
of the mining operations, during the year Management impaired the carrying value of intangible mine property
assets at Tormin and Skaland.
Description
Tormin
Mine Development
Plant & Equipment
Total
Skaland
Mine Development
Plant & Equipment
Total
Carrying Amount
Impairment
Balance
2,253,278
(2,253,278)
9,223,973
–
11,477,251
(2,253,278)
–
9,223,973
9,223,973
728,565
(728,565)
–
10,792,267
–
10,792,267
11,520,832
(728,565)
10,792,267
3.5 Rehabilitation provisions
Accounting Policies
Provisions for environmental rehabilitation are recognised when the Group has a present legal or constructive
obligation as a result of exploration, development and/or production activities undertaken and it is probable that an
outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
The estimated future obligations include the costs of removing facilities and restoring the affected areas and is the
best estimate of the present value of the future expenditure required to settle the environmental rehabilitation at
reporting date, based on current legal requirements. Any changes in the estimate are reflected in the present value
of the environmental rehabilitation provision at the reporting date, with a corresponding change in the cost of the
associated asset.
Significant judgement
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or
mined. The Group’s mining and exploration activities are subject to various laws and regulations governing the
protection of the environment. The Group recognises management’s best estimate for assets’ retirement obligations
and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could
differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine
estimates and discount rates could affect the carrying amount of this provision.
Non-current
Environmental rehabilitation provision
31 Dec 2023
$
31 Dec 2022
$
880,512
951,865
MINERAL COMMODITIES LTD | Annual Report 2023
71
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
3.6 Commitments for expenditure
The Group has the following commitments for expenditure for which no liabilities have been recorded in the financial
statements as the goods or services have not been received, including non-cancellable operating lease rentals:
a) Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Property, plant and equipment
4. Working Capital Management
31 Dec 2023
$
3,565,548
31 Dec 2022
$
750,684
This section provides information about the Group’s working capital balances and management, including cash
flow information.
4.1 Cash and cash equivalents
Accounting Policies
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
The carrying amounts of cash and cash equivalents represent fair value. Bank balances and deposits held at call
earn interest at floating rates based upon market rates.
Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
Cash assets
Cash at bank and in hand
(i)
Interest rate risk exposure
The Group’s exposure to interest rate risk is discussed in note 5.4(a)(ii).
72
MINERAL COMMODITIES LTD | Annual Report 2023
31 Dec 2023
$
31 Dec 2022
$
1,129,794
1,142,141
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(ii) Reconciliation of profit after income tax to cash flow from operating activities
Loss for the year
Adjustments for:
Depreciation and amortisation
Assets written off
Loss/(gain) on disposal of asset
Net finance costs
Share based payments
Impairment charges
Fair value gain on other investments
Net exchange differences
Change in operating assets and liabilities:
Decrease/(increase) in trade debtors
Decrease/(increase) in prepayments
Decrease/(increase) in inventories
31 Dec 2023
$
(10,062,526)
31 Dec 2022
$
(11,515,701)
6,775,621
7,512,288
–
–
2,701,710
(172,831)
8,938,322
–
834,764
906,531
(26,514)
325,577
–
(6,576)
(1,536,908)
1,214,663
306,106
294,583
(9,683,679)
(3,887,785)
(243,750)
(675,487)
Increase/(decrease) in trade payables and unearned revenue
(112,132)
8,843,886
Increase/(decrease) in income tax payable
Increase/(decrease) in deferred tax liabilities
Increase/(decrease) in employee benefits
42,392
(1,009,748)
(4,569,289)
165,614
(824,915)
(170,633)
Net cash flows from operating activities
(6,913,017)
1,276,600
(iii) Non-cash investing and financing activities
Plant and equipment acquired by leases in 2023 of $1,145,700 (2022: $2,782,734) were receipted by the
Company and immediately repatriated to the supplier. These cash inflows and outflows have therefore been
recognised in the consolidated statement of cashflows.
(iv) Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
Cash and cash equivalents
31 Dec 2023
$
1,129,794
31 Dec 2022
$
1,142,141
Borrowings – repayable within one year (including overdraft)
(4,083,504)
(4,346,123)
Borrowings – repayable after one year
Net debt
Cash and cash equivalents
Gross debt – variable interest rates
Net debt
(4,133,824)
(2,905,040)
(7,087,533)
(6,109,022)
1,129,794
1,142,141
(8,217,328)
(7,251,163)
(7,087,533)
(6,109,022)
MINERAL COMMODITIES LTD | Annual Report 2023
73
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Other assets
Liabilities from financing activities
Leases due
within
1 year
$
Leases
due after
1 year
$
Borrowings
due within
1 year
$
Borrowings
due after
1 year
$
Cash
$
Total
$
Net debt as at 1 January 2022
4,251,383
(2,644,044)
(3,123,395)
(2,320,776)
(1,532,373)
(5,369,205)
Cash flows
(3,107,362)
197,612
936,451
421,086
814,277
(737,936)
Foreign exchange adjustments
(1,880)
–
–
–
–
(1,880)
Net debt as at 31 December 2022
1,142,141
(2,446,432)
(2,186,944)
(1,899,690)
(718,096)
(6,109,021)
Cash flows
(12,347)
537,411
1,173,120
(274,793)
(2,401,904)
(978,513)
Foreign exchange adjustments
–
–
–
–
–
–
Net debt as at 31 December 2023
1,129,794
(1,909,021)
(1,013,824)
(2,174,483)
(3,120,000)
(7,087,533)
4.2 Trade and other receivables
Accounting Policies
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
Loans and receivables are recognised initially at fair value and subsequently at amortised cost using the effective
interest rate method. They are included within current assets, except for those with maturities greater than
12 months after the reporting date which are classified as non-current assets.
Current
Trade receivables
Less: Provision for impairment of receivables
Other receivables (i)
Prepayments
Non-current
Security deposits (ii)
Advance to Blue Bantry (iii)
Other receivables
31 Dec 2023
$
31 Dec 2022
$
999,670
3,054,499
–
999,670
9,563,228
288,302
–
3,054,499
7,814,505
582,885
10,851,200
11,451,889
221,187
–
22,690
243,877
237,934
869,526
24,408
1,131,868
(i)
(ii)
(iii)
Includes $3,721,453 (2022: $2,664,792) of VAT and $5,721,083 (2022: $5,282,127) of Diesel Fuel Rebate refundable from the South African Revenue Service. The Group is
currently engaged in legal proceedings with the South African Revenue Service (Refer to Note 8.1 for further details).
A secured deposit of $221,187 (2022: $237,934) for an insurance bond with Guardrisk held as security for a performance guarantee issued by Guardrisk in favour of the South
African Department of Minerals and Energy in respect of Mineral Sands Resources (Pty) Ltd obligations under the Tormin Mining Rights.
An amount of ZAR 14 million (2021: ZAR 14 million) has been advanced to the BEE partner, Blue Bantry (refer note 8.2 for further details). This long term receivable has been
reduced to nil in the current financial year as the receivable is expected to be included as an acquisition cost as a part of the proposed MSR Restructure, which aims to increase
the Company’s ownership interest in Tormin from 50% to 69%.
74
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Impairment of receivables
The Advance to Blue Bantry has been impaired during the year ended 31 December 2023. This asset is expected to
be included as an acquisition cost as a part of the proposed MSR Restructure that aims to increase the Company’s
ownership interest in Tormin from 50% to 69%. Refer to Note 5.4(a)(iv) for impairment & credit losses of receivables.
Fair values and credit risk
Due to the short term nature of these receivables the carrying values represent their respective fair values as
at 31 December 2023 and 2022. The maximum exposure to credit risk at the reporting date is the carrying amount
of each class of receivables disclosed above. The non-current trade and other receivables have a fair value of $Nil as
at 31 December 2023, compared to a carrying amount of $Nil (2022: fair value of $Nil and carrying amount of $Nil).
The fair values were calculated based on cash flows discounted using a current lending rate. Refer to note 5.4 for
more information on the risk management policy of the Group and the credit quality of the entity’s receivables.
Foreign exchange and interest rate risk
Information about the Group’s exposure to foreign exchange and interest rate risk in relation to trade and other
receivables is provided in Note 5.4.
Recoverability of receivables
The Group has amounts due from various counterparties as a result of its operations in a number of jurisdictions.
The recoverability of these amounts, which include certain input taxes and rebates, is subject to interpretation of
legislation and judgement on the credit risk of the counterparty.
Rebate & Indirect Taxes
The Group is eligible to claim and recover various indirect taxes and rebates from various taxation authorities where
it has operations. The estimation of the amounts to which the Group is entitled to receive and will ultimately recover
requires interpretation of legislation, compliance with administrative obligations and judgement on the credit risk of
the counterparty.
4.3 Inventories
Accounting Policies
Raw materials, stores, ore stockpiles, work in progress and finished stocks are physically measured or estimated
and valued at the lower of cost and net realisable value. Net realisable value less costs to sell is assessed annually
based on the amount estimated to be obtained from sale of the item of inventory in the normal course of business,
less any anticipated costs to be incurred prior to its sale.
weighted average cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed
overhead expenditure and depreciation and amortisation relating to mining activities, the latter being allocated on
the basis of normal operating capacity. As a result of mineral sands or graphite products being co-products from
the same mineral separation process, costs are allocated to the various finished products on the basis of the relative
sales value of the finished goods produced. Net realisable value is the estimated selling price in the ordinary course
of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Inventories of consumable supplies and spare parts expected to be used in production are valued at the lower of
weighted average cost, which includes the cost of purchase as well as transportation and statutory charges, or net
realisable value. Any provision for obsolescence is determined by reference to specific stock items identified.
MINERAL COMMODITIES LTD | Annual Report 2023
75
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Current
Raw materials at cost
Finished product at lower of cost and net realisable value
Spare parts and consumables at cost
Non-current
Finished product at lower of cost and net realisable value (i)
31 Dec 2023
$
31 Dec 2022
$
13,451,179
5,893,528
2,188,582
4,392,549
4,991,709
2,465,352
21,533,289
11,849,610
2,200,672
2,200,672
2,367,296
2,367,296
(i)
The non-current finished product represents garnet stockpile below the third-party stockpile at the Tormin mine site, which will be accessible once the third-party stockpile is
removed from the site, expected to occur beyond one year from the reporting date.
The individual items of inventory are carried at lower of cost and net realisable value.
4.4 Trade and other payables
Accounting Policies
Trade and other payables are recognised originally at fair value and subsequently measured at amortised cost using
the effective interest rate method. Trade and other payables represent liabilities for goods and services provided to
the Group prior to the end of each reporting period that are unpaid and arise when the Group becomes obliged to
make future payments in respect of the purchase of goods and services. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months from the reporting date.
Trade payables
Other payables and accruals
(i) Fair values and credit risk
31 Dec 2023
$
8,308,043
31 Dec 2022
$
9,493,428
8,163,717
5,231,780
16,471,760
14,725,208
Due to the short term nature of these payables the carrying values represent their respective fair values as at
31 December 2023 and 2022.
(ii) Foreign exchange and interest rate risk
Information about the Group’s exposure to foreign exchange and interest rate risk in relation to trade and other
payables is provided in Note 5.4.
5. Funding and Risk Management
This section provides information relating to the management of capital, credit, liquidity and market risks and the
policies for measuring and managing these risks.
5.1 Interest bearing loans and borrowings
Accounting Policies
All loans and borrowings are initially recognised at cost, being fair value of the consideration received net of issue
costs associated with the borrowing.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using
the effective interest rate method. Amortised cost is calculated by taking into account any issue costs and any
discount or premium on settlement.
76
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Gains and losses are recognised in the income statement when the liabilities are derecognised and as well as
through the amortisation process.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting periods.
Details of the contractual maturities can be found in Note 5.4.
Current
Borrowings – unsecured (5)
Amounts due under equipment acquisition agreements (1), (2), (3), (4)
Borrowings – secured (6) (7)
Non-current
Borrowings – unsecured (5)
Amounts due under equipment acquisition agreements (1), (2), (3), (4)
Borrowings – secured (6) (7)
31 Dec 2023
$
31 Dec 2022
$
701,636
1,909,021
1,472,847
4,083,504
–
1,013,824
3,120,000
4,133,824
686,788
2,446,432
1,212,903
4,346,123
687,560
2,186,944
30,536
2,905,040
(1)
(2)
(3)
(4)
(5)
(6)
(7)
The Group entered into Master Rental Agreements to acquire mobile mining equipment and generators. Under the terms of these agreements, there was an option to purchase
which the Group exercised for the mobile mining equipment.
The Group entered into Instalment Sale Agreements to acquire mobile mining equipment and other equipment. Under the terms of these agreements, the Group will become the
owner of the mobile mining equipment on final payment.
The Group entered into Commercial Loans and Chattel Mortgages for motor vehicles. Under the terms of these agreements, the Group will become the owner of the motor
vehicles on final payment.
The Group entered into a Master Finance Lease to acquire mobile mining equipment. Under the terms of these agreements, the Group will become the owner of the mobile
mining equipment on final payment.
The Group entered into a Loan Agreement with the previous owners as a part of the acquisition of Skaland Graphite AS. The interest rate is NIBOR +2% and is repaid quarterly.
The Group acquired two loans payable to Innovasjon Norge for the Acquisition of Skaland Graphite AS. The loan is repayable in full by 2024. The loan has an effective rate of 5.46%.
The Group has drawn down on the Loan Agreement with GMA Group for the development of mineral separation finished products at Tormin. The loan is repayable over five years
from 2024. The loan has an effective rate of 9.50%.
(a) Lease liability commitments
Accounting Policies
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset
is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement
date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased
asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over
the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance
fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a
lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not
depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers
the payment occurs.
MINERAL COMMODITIES LTD | Annual Report 2023
77
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the
underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment
(i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment
that are considered of low value (i.e., below $5,000). Lease payments on short-term leases and leases of low-value
assets are recognised as expense on a straight-line basis over the lease term.
Significant judgement in determining the lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered
by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to
terminate the lease, if it is reasonably certain not to be exercised.
The Group has the option under some of its leases to lease the assets for additional terms. The Group applies
judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all
relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date,
the Group reassesses the lease term if there is a significant event or change in circumstances that is within its
control and affects its ability to exercise (or not to exercise) the option to renew (e.g., a change in business strategy).
Commitments in relation to minimum lease repayments under equipment acquisition agreements:
Within one year
Later than one year but no later than five years
Greater than 5 years
Minimum lease payments
Less: Future Finance Charges
31 Dec 2023
$
2,179,118
31 Dec 2022
$
2,784,369
1,067,389
2,333,394
–
3,246,507
(323,662)
2,922,845
–
5,117,763
(484,801)
4,632,962
78
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Lease commitments include contracted amounts for various plant and equipment with a written down value of
$4,246,106 (2022: $6,730,445) secured under finance leases expiring within one to five years. Under the terms
of the leases, the Group will become the owner of the leased assets on the final payment under instalment
sale agreements.
5.2 Net finance costs
Accounting Policies
Interest income is recognised as it accrues on a time proportion basis using the effective interest method.
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is
required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.
Finance income
Interest Income
Total finance income
Finance costs
Interest paid to third parties
Net change in fair value of financial assets–derivatives
Total finance costs
Net finance costs
5.3 Equity
(a) Contributed equity
Accounting Policies
31 Dec 2023
$
31 Dec 2022
$
10,284
10,284
412,718
103,235
515,953
302
302
242,200
(212,570)
29,630
(505,669)
(29,328)
Ordinary share 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 of the share
proceeds received.
(i) Share capital
Ordinary shares
Fully paid
2023
No. of shares
2022
No. of shares
2023
$
2022
$
984,472,599
558,819,354
90,914,631
78,925,113
(ii) Movements in ordinary share capital
Details
At 1 January 2023
Shares issued, net of costs
At 31 December 2023
(iii) Ordinary shares
No. of shares
558,819,354
$
78,925,112
425,653,245
11,989,519
984,472,599
90,914,631
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands, every holder of ordinary
shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled
to one vote.
MINERAL COMMODITIES LTD | Annual Report 2023
79
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(iv) Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern,
so that they can continue to provide returns to shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may issue new shares or sell assets in order to
maintain sufficient funds necessary to continue its operations.
(b) Reserves
The following table shows a breakdown of the balance sheet line item ‘other reserves’ and the movements in these
reserves during the year. A description of the nature and purpose of each reserve is provided in the table below.
At 1 January 2022
Share based payments
Conversion of performance rights
Exchange differences on translation
of foreign operations
General
reserve
$
1,363,393
–
–
–
At 1 January 2023
Share based payments
1,363,393
–
Acquisition of non-controlling interest
(2,811,359)
Exchange differences on translation
of foreign operations
–
At 31 December 2023
(1,447,966)
Nature and purpose of reserves
General reserve
Financial asset
revaluation
reserve
$
Foreign currency
translation
reserve
$
Share based
payment reserve
$
Total
$
–
–
–
–
–
–
–
–
–
(31,469,683)
258,663
(29,847,627)
–
–
325,577
(40,898)
325,577
(40,898)
(3,247,893)
–
(3,247,893)
(34,717,576)
543,342
(32,810,841)
–
–
(3,993,676)
(172,831)
(172,831)
–
–
(2,811,359)
(3,993,676)
(38,711,252)
370,511
(39,788,707)
The General reserve in the prior period arose from the issue of shares in MRC Resources Proprietary Limited to
an entity outside the economic entity. The $2,811,359 movement in 2023 relates to acquisition of the non-controlling
interest in Skaland Graphite AS for $1,900,000, offset by $902,247 to eliminate the non-controlling interest balance
in equity (refer clause 5.3(d)).
Financial asset revaluation reserve
The financial asset revaluation reserve arises from the revaluation at reporting date of financial assets.
Foreign currency translation reserve
The foreign currency translation reserve records the unrealised foreign currency differences arising from the
translation of operations into the presentation currency of the Group.
Share based payment reserve
Records the amounts received in a prior year together with the amounts amortised for employee options in the
current year from the issue of listed options and performance rights.
80
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(c) Retained Earnings/(Accumulated Losses)
At 1 January
Loss for the year
At 31 December
(d) Non-controlling interest
At 1 January
Comprehensive loss for the year
Acquisition of non-controlling interest
At 31 December
31 Dec 2023
$
1,715,368
31 Dec 2022
$
12,892,636
(9,950,737)
(11,177,268)
(8,235,369)
1,715,368
31 Dec 2023
$
31 Dec 2022
$
(597,552)
(313,808)
911,360
(48,435)
(549,117)
–
–
(597,552)
The non-controlling interest accounted for above relates to the equity impact of the non-controlling 10% interest
in Skaland held by BSG. On 4 July 2023 MRC entered into an agreement to settle the disputes between MRCGN
and minority ~10% shareholder BSG. The settlement resulted in MRCGN obtaining 100% ownership of Skaland
by acquiring BSG’s ~10% shareholding in Skaland for a total of US$1,900,000. The terms of the Settlement Deed
are fully executed and MRCGN has obtained 100% ownership of Skaland. As part of this transaction the Company
therefore acquired the non-controlling interest in Skaland.
5.4 Financial risk management
Accounting Policies
The Group classifies its financial instruments on initial recognition. The classification depends on the purpose for
which the financial instrument was acquired.
(i) Recognition and de-recognition
Regular purchases and sales of financial assets are recognised on trade date being the date on which the Group
commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired
or been transferred and the Group has transferred substantially all the risks and rewards of ownership.
(ii) Fair value
Fair value is determined based on current bid prices for all quoted investments. valuation techniques are applied
to determine the fair value of all unlisted securities, including recent arm’s length transactions, reference to
similar instruments and other pricing models.
The Group uses derivative financial instruments such as forward foreign currency contracts to hedge its risk
associated with foreign currency fluctuations. Such derivatives are stated at fair value. The fair value of forward
exchange contracts is calculated by reference to current forward exchange rates for contracts with similar
maturity profiles. Changes in the fair value of forward foreign currency contracts are recorded in profit or loss,
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
(iii) Financial Liabilities
Financial liabilities are recognised initially at fair value and subsequently at amortised cost, comprising original
debt less principal payments and amortisation of transaction costs.
MINERAL COMMODITIES LTD | Annual Report 2023
81
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(iv) Impairment
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has
been impaired. Impairment losses are recognised in profit or loss. Impairment losses recognised on equity
instruments classified as available for sale are not reversed through the income statement.
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s
future financial performance. Current year profit or loss information has been included where relevant to add
further context.
The Group’s activities expose it to a variety of financial risks, as detailed below:
Risk
Exposure arising from
Measurement
Management
Market risk – foreign
exchange risk
Future commercial transactions
Recognised financial assets and liabilities
not denominated in USD
Cash flow forecasting
Sensitivity analysis
Foreign currency forwards and
foreign currency options
Market risk – interest
rate risk
The Company’s borrowings in South Africa
are at variable interest rates, subject to
the Prime Lending Rate. The Company’s
borrowings in Norway are at variable interest
rates, subject to NIBOR interest rates.
N/A
N/A
Market risk – price risk
Investments in equity securities
Sensitivity analysis
N/A
Market risk –
commodity price risk
Sale of products
Cash flow forecasting
Sensitivity analysis
Monitoring the prevailing
commodity prices and entering
into longer term fixed price sales
contracts
Credit risk
Cash and cash equivalents and trade and
other receivables
Aging analysis
Credit ratings
Credit limits, retention of title over
product sold and letters of credit
Liquidity risk
Borrowings and other liabilities
Rolling cash flow
forecasts
Availability of committed credit
lines and borrowing facilities
The Group’s risk management is predominantly controlled by the finance department (“Treasury”) under
policies approved by the Board of Directors. Treasury identifies, evaluates and hedges financial risks in
close co-operation with the Group’s operating units. The board provides written principles for overall risk
management, as well as policies covering specific areas such as foreign exchange risk, interest rate risk,
credit risk, commodity price risk, use of derivative financial instruments and non-derivative financial instruments
and investment of excess liquidity.
(a) Market risk
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various
currency exposures.
As detailed in Note 1.2(iii), items included in the financial statements of each of the Group’s entities are
measured using the currency of the primary economic environment in which the entity operates (‘the functional
currency’). The consolidated financial statements are presented in United States dollars, which is the Company’s
presentation currency.
Based on the financial instruments held at the reporting date, the sensitivity of the Group’s profits after tax for
the year and equity at the reporting date to movements in the United States dollar to South African rand (ZAR),
United States dollar to Australian dollar (AUD) and United States dollar to Norwegian kroner (NOK) were:
82
MINERAL COMMODITIES LTD | Annual Report 2023
Sensitivity
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Impact on
post tax profit
2023
US$
2022
US$
Impact on other
components of equity
2023
US$
2022
US$
USD/AUD exchange rate – increase 10%
276,761
414,878
USD/AUD exchange rate – decrease 10%
(276,761)
(414,878)
USD/ZAR exchange rate – increase 10%
1,530,343
2,853,128
USD/ZAR exchange rate – decrease 10%
(1,530,343)
(2,853,128)
USD/NOK exchange rate – increase 10%
666,264
743,703
USD/NOK exchange rate – decrease 10%
(666,264)
(743,703)
–
–
–
–
–
–
–
–
–
–
–
–
(ii)
Interest rate risk
The Group’s exposure to interest rate risk relates primarily to the Group’s floating interest rate cash balance
which is subject to movements in interest rates. The Board monitors its cash balance on an ongoing basis
and liaises with its financiers regularly to mitigate cash flow interest rate risk. Interest is charged on the loans
from the parent company to the South African subsidiaries at rates permitted by the South African Reserve
Bank. This interest is eliminated on consolidation. Interest on loans to Skaland Graphite AS are variable and
denominated in Norwegian kroner (NOK). Based on the loans with variable interest rates the sensitivity of the
Group’s profits after tax for the year and equity at the reporting dates were:
Sensitivity
Impact on
post tax profit
2023
US$
2022
US$
Interest rate increase of 100 basis points
(93,888)
(60,738)
Interest rate decrease of 100 basis points
93,888
60,738
Impact on other
components of equity
2023
US$
–
–
2022
US$
–
–
(iii) Price risk
The Group has an exposure to equity securities price risk. This arises from investments held by the Group and
classified on the balance sheet as at fair value through profit or loss (“FvTPL”). The Group’s investment in equity
securities at FvTPL is $23,821 (2022: $123,863), which is monitored by the Board of Directors. Any investment in
equity securities would require approval by the Board of Directors.
Sensitivity
Price increase of 10%
Price decrease of 10%
Impact on
post tax profit
2023
US$
1,667
2022
US$
8,670
(1,667)
(8,670)
Impact on other
components of equity
2023
US$
–
–
2022
US$
–
–
The Group is also exposed to commodity price risk as a result of fluctuations in the market price of commodities,
however, the commodities that the Company produces and sells are not quoted on any recognised exchange.
(iv) Credit risk
Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents and deposits with
banks, as well as credit exposures including outstanding receivables and investments in unlisted entities.
All cash balances held at banks are held at internationally recognised institutions. The Group has a strict code
of credit and requires the majority of its customers to have letters of credit in place. The maximum exposure to
credit risk at the reporting date to trade receivables is the carrying amount, net of any provisions for impairment
MINERAL COMMODITIES LTD | Annual Report 2023
83
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
of those assets, as disclosed in the balance sheet and notes to the financial statements. The Group does not
hold any collateral.
The Group has two types of financial assets that are subject to the expected credit loss model:
•
trade receivables for sales of inventory; and
• debt investments carried at amortised cost.
Trade receivables
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past due.
The expected loss rates are based on the payment profiles of sales over a period of 36 months before
31 December 2023 and the corresponding historical credit losses experienced within this period. The historical
loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting
the ability of the customers to settle the receivables. The Group has identified the GDP of the countries in which
it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates
based on expected changes in these factors.
On that basis, the loss allowance as at 31 December 2023 was determined as follows for both trade receivables
and contract assets:
At 31 December 2023
Expected loss rate
Current
0%
Gross carrying amount – trade receivables
999,670
Loss allowance
–
More than
30 days
past due
More than
60 days
past due
More than
90 days
past due
0%
–
–
0%
–
–
0%
–
–
Total
999,670
–
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment
plan with the Group, and a failure to make contractual payments for a period of greater than 120 days past due.
Impairment losses on trade receivables are presented as net impairment losses within operating profit.
Subsequent recoveries of amounts previously written off are credited against the same line item.
Other financial assets at amortised cost
Other financial assets at amortised cost include loans to Directors and employees of subsidiaries, deposits and
other receivables.
(v) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash to meet obligations when due. At the
end of the reporting period, the Group held cash and cash equivalents totalling $2,069,549 (2022: $1,142,141).
Management monitors rolling forecasts of the Group’s liquidity reserve (comprising cash and cash equivalents,
Note 4.1) on the basis of expected cash flows. This is carried out at the corporate level for all active companies
of the Group in accordance with practice and limits set by the Group.
Financing arrangements
On 4 October 2019, the Group acquired Skaland Graphite AS. As part of the consideration, the Group agreed to
pay an amount to Leonhard Nilsen & Sønner AS of NOK37,986,514 over 5 years, paid in quarterly instalments.
The interest is charged at NIBOR +2%.
On 4 October 2019, the Group acquired Skaland Graphite AS. As part of the acquisition the Group consolidated
the fair value of the loans from Innovation Norge. The borrowings at acquisition were NOK2,526,000. Loan 1 of
NOK1,326,000 was fully repaid in 2020. Loan 2 of NOK1,200,000 is due in 2024.
On 22 May 2023, GMA agreed to provide MSR with US$10,000,000 in loan funding, repayable over 5 years from
1 January 2024, on commercial terms to fund the design and construction of a Mineral Separation Plant (“MSP”)
in the western Cape Region of South Africa.
84
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Maturity of financial assets
The Group manages liquidity risk by maintaining sufficient cash reserves and through the continuous monitoring
of budgeted and actual cash flows. At the reporting date there is no significant liquidity risk. The table below
analyses the Group’s maturity of financial assets:
31 December 2023
< 6
months
$
6–12
months
$
Trade and other receivables
5,130,117
5,721,083
1–5
years
$
–
Trade and other receivables – non current
–
–
243,877
Total financial assets
5,130,117
5,721,083
243,877
31 December 2022
< 6
months
$
6–12
months
$
Trade and other receivables
6,169,762
5,282,127
1–5
years
$
–
Trade and other receivables – non current
–
–
1,131,868
Derivatives – FVTPL
Inflow
(Outflow)
2,032,666
(2,000,000)
–
–
–
–
Total financial assets
6,202,428
5,282,127
1,131,868
5+
years
$
Total
contractual
cash flows
$
Carrying
amount
$
–
–
–
10,851,200
10,851,200
243,877
243,877
11,095,077
11,095,077
5+
years
$
Total
contractual
cash flows
$
Carrying
amount
$
–
–
–
–
–
11,451,889
11,451,889
1,131,868
1,131,868
2,032,666
32,666
(2,000,000)
–
12,616,423
12,616,423
Maturity of financial liabilities
The Group manages liquidity risk by maintaining sufficient cash reserves and through the continuous monitoring
of budgeted and actual cash flows. At the reporting date there is no significant liquidity risk. The table below
analyses the Group’s maturity of financial liabilities:
31 December 2023
Trade and other payables
< 12
months
$
16,471,760
1–5
years
$
–
Borrowings excluding finance leases
2,174,483
3,120,000
Lease liabilities
1,909,021
1,013,824
Total financial liabilities
20,555,264
4,133,824
31 December 2022
Trade and other payables
< 12
months
$
14,725,208
1–5
years
$
–
Borrowings excluding finance leases
1,899,690
718,096
Lease liabilities
2,446,432
2,186,529
Total financial liabilities
19,071,330
2,904,625
5+
years
$
Total contractual
cash flows
$
Carrying
amount
$
–
–
–
–
16,471,760
16,471,760
5,294,483
5,294,483
2,922,845
2,922,845
24,689,088
24,689,088
5+
years
$
Total contractual
cash flows
$
Carrying
amount
$
–
–
–
–
14,725,208
14,725,208
2,617,786
2,617,786
4,632,961
4,632,961
21,975,955
21,975,955
MINERAL COMMODITIES LTD | Annual Report 2023
85
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
86
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
(vi) Fair value hierarchy
To provide an indication about the reliability of the inputs used in determining fair value, the Group classifies its
financial instruments into the three levels prescribed under the accounting standards. An explanation of each
level follows underneath the table.
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair
value at 31 December 2023 and 31 December 2022:
31 December 2023
Financial assets
Listed equity securities – FVTPL
Total financial assets
31 December 2022
Financial assets
Derivatives – FVTPL
Listed equity securities – FVTPL
Unlisted equity securities – FVTPL
Total financial assets
Level 1
$
23,821
23,821
Level 1
$
Level 2
$
Level 3
$
–
–
–
–
Level 2
$
Level 3
$
–
32,666
23,857
–
23,857
–
100,006
132,672
–
–
–
–
Total
$
23,821
23,821
Total
$
32,666
23,857
100,006
156,529
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives and
equity securities) is based on quoted (unadjusted) market prices at the end of the reporting period. The quoted
marked price used for financial assets held by the Group is the current bid price. These instruments are included
in Level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined using valuation techniques. These valuation techniques maximise
the use of observable market data where it is available and rely as little as possible on entity specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in Level 3. This is the case for unlisted equity securities.
Specific valuation techniques used to value financial instruments include:
• The use of quoted market prices or dealer quotes for similar instruments;
• The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows
based on observable yield curves;
• The fair value of forward foreign exchange contracts is determined using forward exchange rates at the
reporting date; and
• Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining
financial instruments.
6. Group structure
6.1 Consolidated entities
Accounting Policies
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an
entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
MINERAL COMMODITIES LTD | Annual Report 2023
87
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Associates
Associates are entities over which the Group has significant influence but not control or joint control. This is
generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting, after initially being recognised at cost.
Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to
recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s
share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received
or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.
when the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity,
including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the
extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been
changed where necessary to ensure consistency with the policies adopted by the Group.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts
of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid or received is
recognised in a separate reserve within equity attributable to owners of the Company.
Non-controlling interests
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income
statement, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
The Company, via its wholly owned subsidiary MRC Resources Proprietary Limited (“MRCR”), has a 50% interest
in the issued capital in Mineral Sands Resources Proprietary Limited (“MSR”). whilst the Group controls 50% of the
share voting power, it has been determined that the Group effectively has 100% control due to its control over the
relevant activities for accounting purposes, controls the management of MSR, and also controls the Board of MSR
due to provisions set out in the Shareholders Agreement entered into between the shareholders of MSR.
Therefore, these financial statements include 100% of the results of MSR. In addition to the holding of the issued
capital, the Group also holds Class A and B preference shares in MSR which effectively provides for the repayment
of the capital investment and deemed investment by the Company’s Black Empowerment partner. Due to the terms
attached to these A and B Preference Shares, they are categorised as an equity instrument. As the A preference
shares and B preference shares would be redeemed out of distributable profits and net assets of MSR before
all other ordinary shareholders, until such time as the net assets exceed the value of the unredeemed A and B
preference shares, no value has been attributed to the non-controlling interest. Until that time, the non-controlling
interest has no rights to the assets or results of the Company, and therefore has not been allocated any value in
these financial statements.
The Company, via its wholly owned subsidiary MRC Graphite (Norway) Pty Ltd (“MRCGN”), has a 100% interest
in the issued capital in Skaland Graphite AS (“SKA”) since the Group acquired the remaining 10% non-controlling
interest on 4 July 2023. whilst the Group controlled 90% of the share voting power prior to the acquisition, it has
been determined that the Group effectively had 100% control due to its control over the relevant activities for
accounting purposes, controls the management of SKA, and also controls the Board of SKA.
(i) Material subsidiaries
The Group’s principal subsidiaries at 31 December 2023 are set out below. Unless otherwise stated, they have
share capital consisting solely of ordinary shares that are held directly by the Group, and the proportion of
ownership interests held equals the voting rights held by the Group. The country of incorporation or registration
is also their principal place of business.
88
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Ownership
interest held by
the Group
Ownership
interest held by
non-controlling
interests
2023
%
2022
%
2023
%
2022
%
Place of
business/country
of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Namibia
Norway
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
100
100
100
100
100
90
100
100
100
100
100
100
100
100
100
50
50
–
–
100
56
100
100
100
100
100
100
90
100
100
100
100
100
100
100
90
100
50
50
100
100
100
56
100
–
–
–
–
–
–
–
–
–
–
10
10
–
–
–
–
–
–
–
–
–
50
50
–
–
–
44
–
–
–
–
–
–
–
–
10
–
50
50
–
–
–
44
–
Name of entity
Rexelle Pty Ltd
MRC Trading (Aust) Pty Ltd
MRC Cable Sands Pty Ltd
Blackhawk Oil and Gas Pty Ltd
Queensland Minex Pty Ltd
Q Smelt Pty Ltd
Mincom Waste Pty Ltd
MRC Graphite Pty Ltd
MRC Exploration Australia Pty Ltd
MRC Graphite (Norway) Pty Ltd
MRC Downstream Pty Ltd
MRC Anode Pty Ltd
Skeleton Coast Resources (Pty) Ltd
Skaland Graphite A.S.
MRC Resources Proprietary Limited
Mineral Sands Resources Proprietary Limited (2)
Tormin Mineral Sands Proprietary Limited
Nyati Titanium Eastern Cape Proprietary Limited (1)
MRC Metals Proprietary Limited (1)
Skeleton Coast Mining (Pty) Ltd
Transworld Energy and Minerals Resources (SA) Proprietary Limited
South Africa
Skaland Graphite (Netherlands) BV
Netherlands
The Company was dissolved in May 2022.
(1)
(2) MSR Restructure Agreement signed with Blue Bantry, increasing the Company’s interest in Tormin from 50% to 69% once completed.
6.2 Parent entity financial information
The financial information for the parent entity, Mineral Commodities Ltd, has been prepared on the same basis as the
consolidated financial statements, unless stated otherwise.
Accounting Policies
Interests in subsidiaries
Investments in subsidiaries are carried in the Company’s financial report at cost less any impairment losses.
Dividends and distributions are brought to account in profit when they are declared by the subsidiaries.
The individual financial statements for the parent entity show the following aggregate numbers:
MINERAL COMMODITIES LTD | Annual Report 2023
89
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Issued capital
Reserves
Accumulated losses
Total equity
(Loss)/profit for the year
7. People
31 Dec 2023
$
31 Dec 2022
$
41,338,400
23,380,792
709,156
679,125
42,047,556
24,059,917
9,175,237
3,572,922
18,786
76,500
9,194,023
3,649,422
32,853,533
20,410,495
68,460,579
56,110,429
(35,973,892)
(36,244,159)
366,846
544,225
32,853,533
20,410,495
212,775
(5,114,949)
This section provides information in relation to the Group employee benefits, share-based payment schemes and
related party transactions.
7.1 Employee Benefits
Accounting policies
Provision is made for the Group’s liability for employee entitlements arising from services rendered by employees
to reporting date. These benefits include annual and long service leave. Sick leave is non-vesting and has not been
provided for.
Employee entitlements expected to be settled within one year have been measured at the amounts expected to be
paid when the liabilities are settled and are recognised in other payables.
The contributions made to defined contribution superannuation funds by entities within the consolidated entity are
charged against profits when due.
Current
Annual leave provision
Non-current
Long service leave provision
7.2 Share based payments
Accounting policies
31 Dec 2023
$
31 Dec 2022
$
805,763
582,435
18,788
76,500
Equity-settled share-based compensation benefits are provided to certain senior employees.
Equity-settled transactions are awards of options over shares that are provided to employees in exchange for the
rendering of services.
90
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
The cost of equity-settled transactions is measured at fair value at grant date. The cost of equity-settled transactions
is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative change
to profit or loss is calculated based on the grant date fair value of the award and then amortised over the vesting
period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting
date less amounts already recognised in previous periods.
(a) Employee Options
The issue of employee options was approved by shareholders at a general meeting of the Company held on
21 December 2012. The employee option plan (“the Plan”) is designed to provide long-term incentives for senior
managers and above (including Directors) to deliver long-term shareholder returns. Options granted under the
Plan carry no dividend or voting rights. when exercisable each option is convertible into one ordinary share at the
predetermined exercise price.
No options were granted under the Plan in 2023 and 2022.
(b) Performance Rights
The Company has implemented an Incentive Performance Rights Plan that is designed to provide long-
term incentives for senior managers and above (including directors) to deliver long-term shareholder returns.
Performance Rights granted under the plan carry no dividend or voting rights.
On 28 May 2019, the Board approved the issue of 1,000,000 Performance Rights to Executives. These performance
rights are exercisable on or before 14 May 2022, with 500,000 vesting on 14 May 2020 and 500,000 vesting
on 14 May 2021 and upon the 30 Day volume weighted Average Price (“VWAP”) being at or above $0.26.
These Performance Rights have all vested and been exercised in prior year.
On 28 May 2019, the Board approved the issue of 150,000 Performance Rights to employees. These performance
rights are exercisable on or before 28 February 2023, with 50,000 vesting on 28 February 2020, 50,000 vesting on
28 February 2021 and 50,000 vesting on 28 February 2022 and upon the 30 Day vwAP being at or above $0.26.
100,000 have been forfeited and 50,000 have been exercised.
On 29 June 2021, the Board approved the issue of 1,000,000 Performance Rights to executives and employees.
These performance rights are exercisable on or before 1 September 2023 with 500,000 vesting on 1 September
2021 and 500,000 vesting on 1 September 2022 and upon the 30 Day vwAP being at or above $0.31 and
service condition being achieved. The Barrier Price was set at the time of initial discussions with each relevant
Key Management Personnel. 500,000 of these Performance Rights have vested and been exercised. 500,000 have
been forfeited.
On 29 June 2021, the Board approved the issue of 1,000,000 Performance Rights to executives and employees.
These performance rights are exercisable on or before 25 November 2024 with 1,000,000 vesting on 25 November
2022 and upon the 30 Day vwAP being at or above $0.31 and service condition being achieved. The Barrier Price
was set at the time of initial discussions with each relevant Key Management Personnel. On 24 February 2022 these
Performance Rights were voluntarily cancelled by Directors and replaced with alternative Performance Rights.
On 29 June 2021, the Board approved the issue of 1,500,000 Performance Rights to executives and employees.
These performance rights are exercisable on or before 25 November 2025, with 1,500,000 vesting on 25 November
2023 and upon non-market measures and service conditions being achieved. The Barrier Price was set at the time
of initial discussions with each relevant Key Management Personnel. On 24 February 2022 these Performance Rights
were voluntarily cancelled by Directors and replaced with alternative Performance Rights.
On 24 February 2022, the Board approved the issue of 4,466,667 Performance Rights vesting on 23 February 2023
and upon the 30-day vwAP of the Company’s shares trading on the ASX being at or above A$0.19, expiring on
23 February 2026.
On 24 February 2022, the Board approved the issue of 4,466,667 Performance Rights vesting on 23 February 2024
and upon the 30-day vwAP of the Company’s shares trading on the ASX being at or above A$0.19, expiring on
23 February 2026.
On 24 February 2022, the Board approved the issue of 4,466,666 Performance Rights vesting on 23 February 2025
and upon the 30-day vwAP of the Company’s shares trading on the ASX being at or above A$0.19, expiring on
23 February 2026.
On 27 May 2022, shareholders approved the issue of 2,900,000 Performance Rights vesting on 23 February 2023
and upon the 30-day vwAP of the Company’s shares trading on the ASX being at or above A$0.19, expiring on
23 February 2026.
MINERAL COMMODITIES LTD | Annual Report 2023
91
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
On 27 May 2022, shareholders approved the issue of 2,900,000 Performance Rights vesting on 23 February 2024
and upon the 30-day vwAP of the Company’s shares trading on the ASX being at or above A$0.19, expiring on
23 February 2026.
On 27 May 2022, shareholders approved the issue of 2,900,000 Performance Rights vesting on 23 February 2025
and upon the 30-day vwAP of the Company’s shares trading on the ASX being at or above A$0.19, expiring on
23 February 2026.
On 27 May 2022, shareholders approved the issue of 5,600,000 Performance Rights that will vest upon the
Company’s share price achieving a 30 day vwAP of $0.19, expiring on 23 February 2026.
Set out below are summaries of all Performance Rights granted under the Plan and unexpired at 31 December 2023:
Grant date
Expiry date
24 Feb 2022 23 Feb 2026
24 Feb 2022 23 Feb 2026
24 Feb 2022 23 Feb 2026
24 Feb 2022 23 Feb 2026
24 Feb 2022 23 Feb 2026
24 Feb 2022 23 Feb 2026
27 May 2022 23 Feb 2026
Exercise
price
Fair Value
at grant
date
Rights at
the start of
the year
Granted
during the
year(1)
Exercised
during the
year
Forfeited
during the
year
Cancelled
during
the year
Balance at
the end of
the year
Vested at
the end of
the year
Nil
Nil
Nil
Nil
Nil
Nil
Nil
5 cents
2,566,667
7.6 cents
2,566,667
8.9 cents
2,566,666
3.5 cents
2,900,000
6.7 cents
2,900,000
8.1 cents
2,900,000
9.0 cents
5,600,000
22,000,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,566,667
2,566,667
2,566,666
1,700,000
1,700,000
1,700,000
–
– 12,800,000
–
–
–
–
–
–
–
–
–
–
–
1,200,000
1,200,000
1,200,000
5,600,000
9,200,000
–
–
–
–
–
–
–
–
Set out below are summaries of all Performance Rights granted under the Plan and unexpired at 31 December 2022:
Exercise
price
Fair Value
at grant
date
Rights at
the start of
the year
Granted
during the
year(1)
Exercised
during the
year
Forfeited
during the
year
Cancelled
during
the year
Balance at
the end of
the year
Vested at
the end of
the year
Grant date
Expiry date
28 May 2019
28 Feb 2023
29 June 2021
1 Sept 2023
29 June 2021
25 Nov 2024
29 June 2021
25 Nov 2025
24 Feb 2022
23 Feb 2026
24 Feb 2022
23 Feb 2026
24 Feb 2022
23 Feb 2026
24 Feb 2022
23 Feb 2026
24 Feb 2022
23 Feb 2026
24 Feb 2022
23 Feb 2026
27 May 2022
23 Feb 2026
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
13.2 cents
100,000
12.0 cents
1,000,000
12.0 cents
920,000
20.0 cents
1,380,000
–
–
–
–
5 cents
7.6 cents
8.9 cents
3.5 cents
6.7 cents
8.1 cents
9.0 cents
–
–
–
–
–
–
–
4,466,667
4,466,667
4,466,666
2,900,000
2,900,000
2,900,000
5,600,000
–
100,000
500,000
500,000
–
–
–
–
920,000
1,380,000
–
–
–
–
–
–
–
–
–
–
–
–
–
1,900,000
1,900,000
1,900,000
–
–
–
–
–
–
–
–
–
–
–
2,566,667
2,566,667
2,566,666
2,900,000
2,900,000
2,900,000
5,600,000
3,400,000 27,700,000
500,000
6,300,000
2,300,000 22,000,000
92
MINERAL COMMODITIES LTD | Annual Report 2023
–
–
–
–
–
–
–
–
–
–
–
–
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
MINERAL COMMODITIES LTD | Annual Report 2023
93
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
s
e
k
a
t
t
a
h
t
l
e
d
o
m
g
n
c
i
r
p
i
n
o
i
t
p
o
n
a
g
n
s
u
i
i
d
e
n
m
r
e
t
e
d
s
a
w
2
2
0
2
r
e
b
m
e
c
e
D
1
3
d
e
d
n
e
d
o
i
r
e
p
e
h
t
g
n
i
r
u
d
d
e
r
e
f
f
o
i
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
e
h
t
f
o
e
t
a
d
t
n
a
r
g
t
a
e
u
a
v
l
r
i
a
f
d
e
s
s
e
s
s
a
e
h
T
,
n
o
i
t
u
l
i
d
f
o
t
c
a
p
m
i
e
h
t
i
,
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
e
h
t
f
o
m
r
e
t
e
h
t
,
)
s
y
a
d
e
v
i
t
u
c
e
s
n
o
c
y
t
r
i
h
t
r
o
f
e
r
a
h
s
r
e
p
9
1
.
0
$
A
g
n
h
c
a
e
r
i
e
c
i
r
p
e
r
a
h
s
.
g
.
e
(
s
n
o
i
t
i
d
n
o
c
e
c
n
a
m
r
o
f
r
e
p
e
h
t
t
n
u
o
c
c
a
o
t
n
i
d
e
t
n
a
r
g
i
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
f
o
e
u
a
v
l
r
i
a
F
e
c
n
a
m
r
o
f
r
e
P
e
h
t
f
o
m
r
e
t
e
h
t
r
o
f
e
t
a
r
t
s
e
r
e
t
n
i
e
e
r
f
k
s
i
r
e
h
t
d
n
a
l
d
e
y
i
d
n
e
d
v
d
i
i
d
e
t
c
e
p
x
e
e
h
t
,
e
r
a
h
s
g
n
y
i
l
r
e
d
n
u
e
h
t
f
o
y
t
i
l
i
t
a
o
v
l
e
c
i
r
p
d
e
t
c
e
p
x
e
d
n
a
e
t
a
d
t
n
a
r
g
t
a
e
c
i
r
p
e
r
a
h
s
e
h
t
.
t
e
m
g
n
e
b
i
s
n
o
i
t
i
d
n
o
c
g
n
i
t
s
e
v
e
h
t
f
o
t
n
e
m
s
s
e
s
s
a
s
’
t
n
e
m
e
g
a
n
a
m
d
n
a
t
h
g
R
i
0
0
0
,
0
0
6
,
5
0
0
0
,
0
0
9
,
2
0
0
0
,
0
0
9
,
2
0
0
0
,
0
0
9
,
2
6
6
6
,
6
6
4
,
4
7
6
6
,
6
6
4
,
4
7
6
6
,
6
6
4
,
4
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
5
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
1
d
e
u
s
s
i
s
t
h
g
R
i
f
o
r
e
b
m
u
N
)
a
(
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
s
t
n
e
c
0
)
D
U
A
(
e
c
i
r
p
e
s
i
c
r
e
x
E
)
b
(
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
–
–
–
–
–
–
–
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
s
t
n
e
c
0
.
9
1
–
–
–
s
t
n
e
c
0
.
1
3
s
t
n
e
c
0
.
1
3
s
t
n
e
c
0
.
6
2
s
t
n
e
c
0
.
6
2
s
t
n
e
c
0
.
0
2
s
t
n
e
c
0
.
0
2
)
D
U
A
(
r
e
i
r
r
a
b
e
c
i
r
p
e
r
a
h
S
)
c
(
–
–
–
–
s
t
n
e
c
5
.
7
1
s
t
n
e
c
0
.
8
2
y
t
i
r
u
c
e
s
g
n
i
y
l
r
e
d
n
u
f
o
P
A
W
V
y
a
d
5
)
d
(
s
t
n
e
c
0
.
1
3
s
t
n
e
c
0
.
1
3
s
t
n
e
c
0
.
6
2
s
t
n
e
c
0
.
6
2
–
–
y
t
i
r
u
c
e
s
g
n
i
y
l
r
e
d
n
u
f
o
P
A
W
V
y
a
d
0
3
)
e
(
2
2
0
2
y
a
M
7
2
2
2
0
2
y
a
M
7
2
2
2
0
2
y
a
M
7
2
2
2
0
2
y
a
M
7
2
2
2
0
2
b
e
F
4
2
2
2
0
2
b
e
F
4
2
2
2
0
2
b
e
F
4
2
1
2
0
2
n
u
J
9
2
1
2
0
2
n
u
J
9
2
1
2
0
2
n
u
J
9
2
9
1
0
2
y
a
M
8
2
9
1
0
2
y
a
M
8
2
8
1
0
2
p
e
S
5
2
8
1
0
2
y
a
M
2
2
e
t
a
d
t
n
a
r
G
)
f
(
%
5
7
7
.
2
%
5
7
7
.
2
%
0
5
4
.
2
%
0
5
4
.
2
%
5
6
5
1
.
%
5
8
0
1
.
%
5
8
0
.
1
%
7
0
.
0
%
7
0
.
0
%
7
0
.
0
%
2
1
.
1
%
2
1
.
1
%
5
1
.
2
%
0
2
.
2
e
t
a
r
t
s
e
r
e
t
n
i
e
e
r
f
-
k
s
R
i
)
g
(
6
2
0
2
b
e
F
3
2
6
2
0
2
b
e
F
3
2
6
2
0
2
b
e
F
3
2
6
2
0
2
b
e
F
3
2
6
2
0
2
b
e
F
3
2
6
2
0
2
b
e
F
3
2
6
2
0
2
b
e
F
3
2
5
2
0
2
v
o
N
5
2
4
2
0
2
v
o
N
5
2
3
2
0
2
p
e
S
1
2
2
0
2
y
a
M
4
1
2
2
0
2
y
a
M
4
1
1
2
0
2
p
e
S
0
3
1
2
0
2
t
c
O
1
e
t
a
d
y
r
i
p
x
E
)
h
(
s
t
n
e
c
.
0
1
1
s
t
n
e
c
.
0
1
1
s
t
n
e
c
.
0
1
1
s
t
n
e
c
.
0
1
1
s
t
n
e
c
.
5
1
1
s
t
n
e
c
.
5
1
1
s
t
n
e
c
5
.
1
1
s
t
n
e
c
0
.
0
2
s
t
n
e
c
0
.
0
2
s
t
n
e
c
0
.
0
2
s
t
n
e
c
5
.
9
1
s
t
n
e
c
5
.
9
1
s
t
n
e
c
5
.
7
1
s
t
n
e
c
0
.
8
2
)
D
U
A
(
e
t
a
d
t
n
a
r
g
t
a
e
c
i
r
p
e
r
a
h
S
)
i
(
%
0
8
l
i
N
%
0
8
l
i
N
%
0
8
l
i
N
%
0
8
l
i
N
%
0
8
l
i
N
%
0
8
l
i
N
%
0
8
l
i
N
%
0
8
l
i
N
%
0
8
l
i
N
%
0
8
l
i
N
%
5
8
%
5
8
%
5
8
%
5
8
s
e
r
a
h
s
e
h
t
f
o
y
t
i
l
i
t
a
l
o
v
e
c
i
r
p
d
e
t
c
e
p
x
E
)
j
(
%
7
6
.
6
%
7
6
.
6
%
6
.
7
%
7
6
.
5
d
l
e
i
y
d
n
e
d
i
v
i
d
d
e
t
c
e
p
x
E
)
k
(
e
h
t
r
e
v
o
X
S
A
e
h
t
n
o
i
g
n
d
a
r
t
d
n
a
s
e
s
s
e
n
s
u
b
i
r
a
l
i
m
s
i
n
i
i
s
e
n
a
p
m
o
c
e
h
t
f
o
s
e
c
i
r
p
e
r
a
h
s
n
i
d
n
e
r
t
l
a
r
e
n
e
g
e
h
t
d
n
a
y
t
i
l
i
t
a
o
v
l
c
i
r
o
t
s
h
i
e
h
t
n
o
d
e
s
a
b
s
i
y
t
i
l
i
t
a
o
v
l
e
c
i
r
p
d
e
t
c
e
p
x
e
e
h
T
.
d
o
i
r
e
p
g
n
i
t
s
e
v
.
r
a
e
y
e
h
t
g
n
i
r
u
d
d
e
t
i
e
f
r
o
f
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
f
o
e
u
a
v
l
r
i
a
f
e
h
t
f
o
l
a
s
r
e
v
e
r
y
b
t
e
s
f
f
o
,
d
e
t
n
a
r
g
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
f
o
e
u
a
v
l
r
i
a
f
e
h
t
s
e
d
u
c
n
l
i
3
2
0
2
r
e
b
m
e
c
e
D
1
3
d
e
d
n
e
:
d
e
d
u
c
n
l
i
,
s
d
o
i
r
e
p
r
o
i
r
p
s
a
l
l
e
w
s
a
,
d
o
i
r
e
p
e
h
t
g
n
i
r
u
d
d
e
r
e
f
f
o
/
d
e
t
n
a
r
g
i
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
r
o
f
s
t
u
p
n
i
l
e
d
o
m
e
h
T
d
o
i
r
e
p
e
h
t
r
o
f
t
n
u
o
m
a
e
h
T
.
)
7
7
5
,
5
2
3
$
:
2
2
0
2
(
,
1
3
8
2
7
1
$
-
s
a
w
3
2
0
2
r
e
b
m
e
c
e
D
1
3
d
e
d
n
e
d
o
i
r
e
p
e
h
t
r
o
f
i
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
o
t
d
e
t
a
e
r
l
e
s
n
e
p
x
e
t
n
e
m
y
a
p
d
e
s
a
b
e
r
a
h
s
l
a
t
o
t
e
h
T
94
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
7.3 Related party transactions
(i) Parent entity
Transactions between the Company and other entities in the Group during the years ended 31 December 2023
and 31 December 2022 consisted of loans advanced and payments received and made on inter-company
accounts. These transactions were made on normal commercial terms and conditions and at market rates.
(ii) Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group
is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
31 Dec 2023
A$
1,114,951
53,693
224,636
31 Dec 2022
A$
2,555,367
138,132
529,425
1,393,280
3,222,924
Detailed remuneration disclosures are provided in the remuneration report in the Director’s Report.
Shepstone & wylie, a company associated with Debbie Ntombela, one of the Directors, has provided legal
services to the Company during 2022. This amount paid by the Company to Shepstone and wylie for the year
ended 31 Dec 2023 was $28,181 (2022: $174,297).
Zamadiba Trading and Z Square M.P Empowerment, companies associated with Zamile David Qunya, one of
the Directors, has provided executive services and manpower to the Company during 2023. This amount paid
by the Company to Zamadiba Trading and Z Square M.P Empowerment for the year ended 31 Dec 2023 was
$301,042 (2022: $526,263), excluding labour payroll costs of site based Z Square employees.
(iii) Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Shepstone & Wylie
Zamadiba Trading
Z Square M.P Empowerment
31 Dec 2023
$
31 Dec 2022
$
10,503
12,356
7,924
8,909
–
103,418
MINERAL COMMODITIES LTD | Annual Report 2023
95
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
8. Other
This section provides information that is not directly related to the specific line items in the financial statements,
including information about contingent assets and liabilities, other commitments, events after the end of the financial
year, remuneration of auditors and changes to accounting policies and procedures.
8.1 Contingent assets and contingent liabilities
(a) Contingent liabilities
Guarantees
Guardrisk has issued a Guarantee in favour of the South African Department of Mineral Resources, in
respect of MSR’s obligations under the Tormin Mining Right for an amount of ZAR4,102,989 (US$224,430)
(Dec 2022: ZAR4,102,989 (US$241,423)).
Guardrisk has issued a Guarantee in favour of the South African Department of Mineral Resources, in respect of
MSR’s obligations under the De Punt Prospecting Right Application for an amount of ZAR320,000 (US$17,504)
(Dec 2022: ZAR320,000 (US$18,829)).
Guardrisk has issued a Guarantee in favour of the South African Department of Mineral Resources, in respect
of MSR’s obligations under the Tormin Prospecting Rights for an amount of ZAR400,000 (US$21,880)
(Dec 2022: ZAR400,000 (US$23,536)).
Guardrisk has issued a Guarantee in favour of the South African Department of Mineral Resources, in
respect of MSR’s obligations under the Tormin Prospecting Rights for an amount of ZAR350,000 (US$19,145)
(Dec 2022: ZAR350,000 (US$20,594)).
Guardrisk has issued a Guarantee in favour of the South African Department of Mineral Resources, in respect
of MSR’s obligations under the expanded Tormin Mining Rights for an amount of ZAR15,200,000 (US$831,428)
(Dec 2022: ZAR15,200,000 (US$894,380)).
Others
In 2019, the Company received a letter of demand for up to ZAR32,268,000 (US$1,765,034) (Dec 2022:
US$1,898,674) plus penalty interest of ZAR4,307,083 (US$235,594) (Dec 2022: US$253,432), total ZAR36,575,083,
relating to diesel fuel rebates claimed from its mining activities over several years. The Company is of the view, based
upon independent legal advice obtained, that the Company has been compliant with the respective legislation
and therefore the Company does not consider it had a present obligation with respect to this claim. Accordingly,
no provision or liability in relation to the claim was recognised on the date of the letter of demand in the financial
statements. SARS has withheld payment for diesel fuel rebate and vAT claims in order to satisfy this purported cash
debt, with the full amount now withheld. The Group maintains its position that there is no present refund obligation
to SARS and that this amount has been withheld in error and therefore these amounts are recoverable. The Company
is pursuing legal proceedings and is confident in its claim. There has been no change since 31 December 2022.
Receivables as at 31 December 2023 (note 4.2) includes $3,721,453 (2022: $2,664,792) of vAT and $5,721,083
(2022: $5,282,127) of Diesel Fuel Rebate refundable from the South African Revenue Service. The Group is currently
engaged in legal proceedings with the South African Revenue Service.
Other than those mentioned above, there have been no other changes to contingent assets or liabilities since
31 December 2023.
96
MINERAL COMMODITIES LTD | Annual Report 2023
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
8.2 Other Commitments
Blue Bantry funding support
The Company, via MRCR, and Blue Bantry are both 50% shareholders in MSR, the entity which owns the
Tormin Project.
The Company agreed to provide Blue Bantry access to an amount of funding to support the original Tormin Project
objectives by advancing through a loan, certain benefits Blue Bantry would expect to receive from the Tormin
Project. Blue Bantry will repay the ZAR14,000,000 loan from dividend distributions that it will receive in the future
from MSR.
The Advance to Blue Bantry has been impaired during the year ended 31 December 2023. This asset is expected to
be included as an acquisition cost as a part of the proposed MSR Restructure that aims to increase the Company’s
ownership interest in Tormin from 50% to 69%. Refer to Note 5.4(a)(iv) for impairment & credit losses of receivables.
8.3 Events since the end of the financial year
There have been no material matters arising subsequent to the end of the financial year.
8.4 Remuneration of auditors
During the year, the following fees were paid or payable for services provided by BDO Audit (wA) Pty Ltd, BDO Tax
(wA) Pty Ltd, and their related practices and related firms:
Audit services
Audit and review of financial reports
BDO Audit (WA) Pty Ltd
BDO Johannesburg, South Africa
BDO Tromso, Norway
Non-audit services
BDO Corporate Finance (WA) Pty Ltd
31 Dec 2023
$
31 Dec 2022
$
110,880
8,205
52,721
171,806
95,579
16,201
20,852
132,631
–
7,200
MINERAL COMMODITIES LTD | Annual Report 2023
97
DIRECTORS’ DECLARATION
Directors’ declaration
The Directors of the Company declare that:
1. The financial statements, comprising the consolidated income statement, consolidated statement of comprehensive
income, consolidated balance sheet, consolidated statement of cash flows, consolidated statement of changes
in equity and accompanying notes, are in accordance with the Corporations Act 2001 including;
(a) complying with Australian Accounting Standards and the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(b) give a true and fair view of the consolidated entity’s financial position as at 31 December 2023 and of its
performance for the year ended on that date.
2. The Company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
3.
In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required
by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the Directors:
Brian Moller
Chairman
Dated at Perth, western Australia this 28th day of March 2024
98
MINERAL COMMODITIES LTD | Annual Report 2023
DIRECTORS’ DECLARATION
MINERAL COMMODITIES LTD | Annual Report 2023
99
INDEPENDENT AUDITOR’S REPORT TO ThE MEMBERS
Independent auditor’s report to the members
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9
Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Mineral Commodities Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Mineral Commodities Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated balance sheet as at 31 December 2023, the
consolidated income statement, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial report, including a summary of material accounting policies and
the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
(ii)
Giving a true and fair view of the Group’s financial position as at 31 December 2023 and of its
financial performance for the year ended on that date; and
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 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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1.2 in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
Group’s ability to continue as a going concern and therefore the Group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
100
MINERAL COMMODITIES LTD | Annual Report 2023
INDEPENDENT AUDITOR’S REPORT TO ThE MEMBERS
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material Uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Impairment of Mine Assets
Key audit matter
How the matter was addressed in our audit
Notes 3.2, 3.3 and 3.4 of the financial
report disclose the carrying value of the
Group’s mine assets comprising Mine
Development Expenditure and Property,
Plant and Equipment.
The Australian Accounting Standards require
the Group to assess whether there are any
indicators that these assets may be
Impaired.
During the year the Group assessed the
recoverability of its mine assets and
impaired its Mine Development assets at
Tormin and Skaland resulting in an
impairment expense of $2,981,842.
Determining the impairment of these assets
requires Management to make significant
judgements and estimates of key
assumptions within the mine models
including:
• Discount rates;
• Reserve estimates;
• Production; and
• Commodity prices.
This is a key audit matter due to the
quantum of the impairment recognised and
the significant judgements and estimates
involved in Management’s assessment of the
recoverable amounts of the assets.
Our work included, but was not limited to the
following procedures:
• Assessing the appropriateness of the Cash
Generating Unit (“CGU’s”) identification
and the allocation of assets and liabilities
to the carrying value of each CGU;
• Challenging the key inputs used within the
discounted cash flows, including the
following:
In conjunction with our internal Valuation
Specialist:
- Comparing the commodity pricing
data used by Management to current
market information;
- Comparing the foreign exchange rate
data used by Management to current
market information;
-
Evaluating the appropriateness of the
discount rates applied;
- Challenging the appropriateness of
Management’s reserve estimates;
-
Evaluating forecasted mining and
processing costs included in
Managements models; and
- Assessing the adequacy of the
related disclosures in the financial
report.
MINERAL COMMODITIES LTD | Annual Report 2023
101
INDEPENDENT AUDITOR’S REPORT TO ThE MEMBERS
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2023, but does not include
the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
102
MINERAL COMMODITIES LTD | Annual Report 2023
INDEPENDENT AUDITOR’S REPORT TO ThE MEMBERS
Report on 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 Mineral Commodities 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.
BDO Audit (WA) Pty Ltd
Glyn O'Brien
Director
Perth, 28 March 2024
MINERAL COMMODITIES LTD | Annual Report 2023
103
STATEMENT OF CORPORATE GOvERNANCE
Statement of corporate governance
The Board of Directors (referred to hereafter as the “Board”) of Mineral Commodities Ltd (referred to hereafter as the
“Company” or “MRC”) is responsible for the corporate governance of the Company. The Board guides and monitors
the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they
are accountable. The Statement of Corporate Governance was approved by the Board on 10 April 2024.
In accordance with the Australian Securities Exchange (ASX) Corporate Governance Council’s (“CGC”) “principles
of Good Corporate Governance and Best practice Recommendations”, the Corporate Governance Statement must
contain certain specific information and must disclose the extent to which the Company has followed the guidelines
during the period. where a recommendation has not been followed, that fact must be disclosed together with the
reasons for the departure.
The Company’s corporate governance practices were in place throughout the year ended 31 December 2023 and
are compliant, unless otherwise stated, with the Corporate Governance Council’s principles and recommendations
(4th Edition), which are noted below.
Principle 1.
Lay solid foundations for management and oversight
Principle 2.
Structure the Board to be effective and add value
Principle 3.
Instill a culture of acting lawfully, ethically and responsibly
Principle 4.
Safeguard the integrity of corporate reports
Principle 5.
Make timely and balanced disclosure
Principle 6.
Respect the rights of security holders
Principle 7.
Recognise and manage risk
Principle 8.
Remunerate fairly and responsibly
A summary of the corporate governance policies and practices adopted by MRC is set out below.
Role of the Board of Directors
The Board of MRC is responsible for setting the Company’s strategic direction and providing effective governance
over MRC’s affairs in conjunction with the overall supervision of the Company’s business with the view of maximising
shareholder value. The Board’s key responsibilities are to:
(a) chart the direction, strategies and financial objectives for MRC and monitor the implementation of those policies,
strategies and financial objectives;
(b) monitor compliance with regulatory requirements, ethical standards and external commitments;
(c) appoint, evaluate the performance of, determine the remuneration of, plan for the succession of and, where
appropriate, remove the Chief Executive Officer (“CEO”) if in place or similar person acting in the executive
capacity; and
(d) ensure that the Board continues to have the mix of skills and experience necessary to conduct MRC’s activities,
and that appropriate directors are selected and appointed as required.
In accordance with MRC’s Constitution, the Board delegates responsibility for the day-to-day management of
MRC to the CEO (subject to any limits of such delegated authority as determined by the Board from time to time).
Management as a whole is charged with reporting to the Board on the performance of the Company.
All directors have unrestricted access to the Company Secretary, all employees of the group, and, subject to the law,
access to all Company records and information held by group employees and external advisers. The Board receives
regular detailed financial and operational reports from senior management to enable it to carry out its duties.
Each director may, with the prior written approval of the Chairman, obtain independent professional advice to assist
the director in the proper exercise of powers and discharge of duties as a director or as a member of a Board
Committee. The Company will reimburse the director for the reasonable expense of obtaining that advice.
104
MINERAL COMMODITIES LTD | Annual Report 2023
STATEMENT OF CORPORATE GOvERNANCE
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the
proper functioning of the Board. The role of the Company Secretary includes:
• Advising the Board and its Committees on governance matters;
• Monitoring that Board and Committee policy and procedures are followed;
• Coordinating, in unison with the Company, the timely completion and dispatch of Board and Committee papers;
• Ensuring that the business at Board and Committee meetings is accurately captured in the minutes; and
• helping to organise and facilitate the induction and professional development of directors.
Board structure and composition
The Board currently comprises five directors, three of which are independent non-executive directors. Details of each
director’s skill, expertise and background are contained within the directors’ report included with the Company’s
annual financial statements.
Independence, in this context, is defined to mean a non-executive director who is free from any interest and any
business or other relationship that could, or could reasonably be perceived to, materially interfere with the director’s
ability to act in the best interests of MRC. The definition of independence in ASX Recommendation 2.3 is taken into
account for this purpose.
The Board will continue to assess its makeup and will ensure that it continues to have the mix of skills and experience
necessary to conduct MRC’s activities, and that appropriate directors are selected and appointed as required.
The following tables set out the mix of skills and competencies that the Board currently has:
No. of Directors
Expertise
Senior Executive Experience
Governance
Financially knowledgeable
Mining
Technical (Geological/Engineering)
Mergers and Acquisitions
In-Country Experience
Resource Development
Competencies
Strategic Leadership
Vision and Mission
Governance
3
4
4
3
1
3
3
3
5
5
5
Details of directors’ shareholdings are disclosed in the directors’ report and financial report. There are no retirement
schemes other than the payment of statutory superannuation contributions.
MINERAL COMMODITIES LTD | Annual Report 2023
105
STATEMENT OF CORPORATE GOvERNANCE
Between 1 January 2023 and 31 December 2023
Any equity-based compensation of directors is required to be approved in advance by shareholders.
The roles of Chairman and CEO are separated. The Chair position of the Company is filled by an Independent
Non-Executive Director.
The CEO is responsible for supervising the management of the business as designated by the Board.
The Company’s non-executive directors may not hold office for a continuous period in excess of three years or past
the third annual general meeting following their appointment, whichever is longer, without submitting for re-election.
Directors are elected or re-elected, as the case may be, by shareholders in a general meeting. Directors may offer
themselves for re-election. A director appointed by the directors (e.g. to fill a casual vacancy) will hold office only until
the conclusion of the next annual general meeting of MRC but is eligible for re-election at that meeting.
The process for retirement by rotation and re-election of a director is set down in the Company’s Constitution.
If a retiring director nominates for re-election, the Board, through the Remuneration and Nomination Committee,
will assess the performance of that director in their absence and determine whether the Board will recommend that
a shareholder vote in favour of the re-election, or otherwise.
Details of each director standing for re-election, including their biographical details, relevant qualifications,
experience and the skills, and other material directorships they bring to the Board are provided to shareholders to
assess prior to voting on their re-election.
For new appointments, the Board, through the Remuneration and Nomination Committee, identifies candidates with
the appropriate expertise and experience, having regard to the weighted list of required directors’ competencies
as maintained by the Company. The Board will appoint the most suitable candidate, but the shareholders at the next
annual general meeting of the Company must ratify the appointment. Shareholders are provided with all material
information in the Notice of Annual General Meeting relevant to a decision on whether or not to elect or re-elect
a director.
The Board will ensure appropriate checks are undertaken prior to making any new Board appointments. These will
include checks as to the person’s character, experience, education, criminal record and bankruptcy history.
The key terms, conditions and requirements are set out in a standard letter of appointment. New directors will be
provided with an induction program specifically tailored to the needs of individual appointees. The program includes
meetings with major shareholders, one-on-one meetings with the members of the management team and visits to
key sites.
Directors are also encouraged to participate in continual improvement programs and are expected to highlight areas
of activity that could potentially be improved.
Under the Company’s Constitution, voting requires a simple majority of the Board. The Chairman holds a casting vote.
The Company has procedures enabling any director or committee of the Board to seek external professional advice
as considered necessary, at the Company’s expense, subject to prior consultation with the Chairman. A copy of any
advice sought by a director would be made available to all directors.
Board and management effectiveness
Responsibility for the overall direction and management of the Company, its corporate governance and the internal
workings of the Company rests with the Board notwithstanding the delegation of certain functions to the CEO and
management generally (such delegation effected at all times in accordance with the Company’s Constitution and its
corporate governance policies).
An evaluation procedure in relation to the Board, individual directors, Board Committees and Company executives
has been adopted by the Board and evaluations are conducted in accordance with it.
The evaluation of the Board as a whole is facilitated through the use of a questionnaire required to be completed by
each Board Member, the results of which are summarised and discussed with the Chairman of the Board and tabled
for discussion at a Board Meeting. Similarly, each individual director is required to self-assess his/her performance
and to discuss the results with the Chairman. The same procedure is undertaken for the Audit, Compliance and
Risk Committee and the Remuneration and Nomination Committee.
106
MINERAL COMMODITIES LTD | Annual Report 2023
STATEMENT OF CORPORATE GOvERNANCE
To ensure management, as well as Board, effectiveness, the Board, through the Remuneration and Nomination
Committee, has direct responsibility for evaluating the performance of the CEO. As a new CEO was appointed during
the 2023 financial year, no formal evaluation of the CEO’s performance was undertaken during that period.
Financial Reporting, Internal Control and Risk Management
The Board has overall responsibility for the Company’s systems of internal control. These systems are designed
to ensure effective and efficient operations, including financial reporting and compliance with laws and regulation,
with a view to managing risk of failure to achieve business objectives. It must be recognised however that internal
control systems provide only reasonable and not absolute assurance against the risk of material loss.
The Board reviews the financial position of the Company on a monthly basis. For annual and half yearly financial
statements, the CEO and the Chief Financial Officer (“CFO”) are required to state in writing that the Company’s
financial reports:
• present a true and fair view, in all material respects, of the Company’s financial condition and operational results
in accordance with the relevant accounting standards; and
•
are founded on a system of risk management and internal compliance and control and the Company’s
risk management and internal compliance and control system is operating efficiently and effectively in all
material respects.
Management reports to the Board on the effectiveness of the Company’s management of material business
risk through the provision of regular risk reports to the Board via the Audit, Compliance and Risk Committee.
Each reportable risk is discussed ensuring appropriate mitigation strategies are implemented by the Group.
Management and the Board interact on a day to day basis and risk is continually considered across the financial,
operational and organisational aspects of the Company’s business. The Company considers the overall risk
framework at each Audit Compliance and Risk Committee Meeting and will continue to monitor, assess and report
its business risks.
The following are key risk areas that could have a material impact on the Company and its ability to achieve its
objectives. These are not the only risks associated with the Company and there may be others from time to time that
may also adversely affect future performance.
• Country Risk: The Company’s current primary assets are located in South Africa and Norway. Potential changes
in fiscal or regulatory regimes in South Africa and Norway may adversely affect the Company. The Company
must also comply with local laws and administrative process which are subject to potential amendments
from time to time. The Company adopts processes to mitigate these risks and continues to explore other
opportunities in other jurisdictions to diversify its asset holdings.
• Business Continuance Risk: various circumstances may arise which may lead to shut downs in operations,
including plant failure, industrial action, in-country unrest, natural disasters, pandemics such as COvID-19,
and continuance of licenses. Management and the Board continually assess these risks and ensure all
appropriate mitigating actions are put in place. This is underpinned by various policies currently in place, and in
respect to licences, continued stakeholder engagement.
•
Financial Risks: Like all mining entities, the Company faces risks relating to movement in interest rates, foreign
exchange rates, and access to funds. The Company maintains tight treasury controls and budget processes.
Other financial risks are reported in the financial statements.
• Product Risk: The pricing of the Company’s products are subject to many global factors. The Company
actively markets its products itself in order to achieve the maximum possible value based on the prevailing
market conditions. The Company is also assessing investment in downstream processing to add value to its
concentrate products.
• Development Risk: The Company continues to assess other projects. A failure to develop a project or seek
alternate projects could impact the long-term profitability and financial position of the Company. The Board
continues to assess the progress of the Xolobeni Mineral Sands project, will continue with its intention to develop
the Munglinup Graphite project, and will continue to review other opportunities in order to extend the Company’s
operations beyond the existing assets.
MINERAL COMMODITIES LTD | Annual Report 2023
107
STATEMENT OF CORPORATE GOvERNANCE
The Company does not presently have an internal audit function. This is mitigated by the Board, through the Audit,
Compliance and Risk Committee implementing the matters set out above in respect to risk and management,
and having a primary responsibility to ensure that:
• The Company presents and publishes accounts, which present a true and fair view of its results and
financial position;
• The accounting methods adopted are appropriate to the Company and consistently applied in accordance with
relevant accounting standards and the applicable laws; and
• The appointment and performance of the external auditor is appropriately monitored to ensure independence
and the serving of the interests of shareholders.
This requirement is assisted by the formal sign off from the CEO and CFO as noted above.
Committees of the Board of Directors
The Board has two permanent Board committees to assist the Board in the performance of its functions:
(a)
the Audit, Compliance and Risk Committee; and
(b) the Remuneration and Nomination Committee.
Each committee has a charter, which sets out the Committee’s purpose and responsibilities. The Committees are
described further below.
Audit, Compliance and Risk Committee
The purpose of the Audit, Compliance and Risk Committee is to provide assistance to the Board in its review of:
(a) MRC’s financial reporting, internal control structure and risk management systems;
(b) the internal and external audit functions; and
(c) MRC’s compliance with legal and regulatory requirements in relation to the above.
The Audit, Compliance and Risk Committee has specific responsibilities in relation to MRC’s financial reporting
process; the assessment of accounting, financial and internal controls; the appointment of external auditor; the
assessment of the external audit; the independence of the external auditor; and setting the scope of the external audit.
The Company’s external auditor is required to attend to the Company’s annual general meeting and make
themselves available to answer questions from security holders relevant to the audit.
The Audit, Compliance and Risk Committee Charter provides that the Committee must comprise at least
three non-executive directors that have diverse, complementary backgrounds, with two independent
non-executive directors.
while the Chairman of the Audit, Compliance and Risk Committee is not technically classified as an independent
non-executive director, Mr walker has the most appropriate competencies, expertise and experience necessary
to fulfill the role of Chairman of the Audit, Compliance and Risk Committee.
The members of the Audit, Compliance and Risk Committee are: Mr walker (Chairman), Mr Tipper, Mr Qunya
and Ms Ntombela.
Remuneration and Nomination Committee
The purpose of the Remuneration and Nomination Committee is to discharge the Board’s responsibilities relating
to the nomination and selection of directors and the compensation of the Company’s executives and directors.
The key responsibilities of the Remuneration and Nomination Committee are to:
(a) ensure the establishment and maintenance of a formal and transparent procedure for the selection and
appointment of new directors to the Board; and
(b) establish transparent and coherent remuneration policies and practices, which will enable MRC to attract,
retain and motivate executives and directors who will create value for shareholders and to fairly and responsibly
reward executives.
108
MINERAL COMMODITIES LTD | Annual Report 2023
STATEMENT OF CORPORATE GOvERNANCE
The Remuneration and Nomination Committee Charter provides that the Committee must comprise at least
three non-executive directors, two of which must be independent non-executive Directors. The Chairman of the
Remuneration and Nomination Committee must be an independent non-executive director.
The members of the Remuneration and Nomination Committee are: Mr Tipper (Chairman), Mr walker and
Ms Ntombela.
The remuneration policy which sets out the terms and conditions for the CEO and other senior executives is set out
in the Remuneration Report included in the Directors’ Report.
Timely and balanced disclosure
The Company is committed to promoting investor confidence and ensuring that shareholders and the market have
equal access to information and are provided with timely and balanced disclosure of all material matters concerning
the Company. Additionally, the Company recognises its continuous disclosure obligations under the ASX Listing
Rules and the Corporations Act.
The Company’s shareholders are responsible for voting on the appointment of directors. The Board informs
shareholders of all major developments affecting the Company by:
• Preparing half yearly and annual financial reports and making these available to all shareholders;
• Preparing quarterly activity reports;
• Advising the market of matters requiring disclosure under Australian Securities Exchange Continuous
Disclosure Rules;
• Maintaining a record of significant ASX announcements on the Company’s website;
• Submitting proposed major changes in the Company’s affairs to a vote of shareholders, as required by the
Corporations Act;
• Reporting to shareholders at annual general meetings on the Company’s activities during the year.
All shareholders that are unable to attend these meetings are encouraged to communicate issues or ask
questions by writing to the Company;
• Security holders are given the option to receive communications from, and send communications to, the
Company and its share registry electronically; and
• Undertaking various presentations to discuss the Company’s activities, copies of which are released to the ASX
ahead of the presentations.
The Company has adopted a formal disclosure policy. The Board and management are aware of their responsibilities
in respect of identifying material information and coordinating disclosure of that information where required by the
ASX Listing Rules.
The Board receives copies of all material announcements promptly after they have been made and in most instances
require the prior consent of the Board ahead of release.
Ethical and responsible decision-making
Code of Conduct
The Board has created a framework for managing the Company including internal controls, business risk
management processes and appropriate ethical standards. The Board recognises that our operations have direct
and indirect social and environmental impacts.
The Board has adopted practices for maintaining confidence in the Company’s integrity including promoting integrity,
trust, fairness and honesty in the way employees and directors conduct themselves and MRC’s business, avoiding
conflicts of interest and not misusing company resources. A formal Code of Conduct has been adopted.
Whistle Blower Policy
The Company is committed to maintaining a high standard of integrity, investor confidence and good corporate
governance. The Company has a whistle blower policy which is aimed at implementing these commitments including
ensuring compliance with the Corporations Act and details the framework for receiving, investigating and addressing
allegations of Reportable Conduct where that Reportable Conduct concerns the activities of the Company, or its
current or former directors, officers, agents, employees and contractors.
MINERAL COMMODITIES LTD | Annual Report 2023
109
STATEMENT OF CORPORATE GOvERNANCE
The purpose of the policy is to:
• Encourage the reporting of matters that may cause harm to individuals or financial or non-financial loss to MRC
or damage to its reputation;
• Enable the Company to deal with reports from whistleblowers in a way that will protect the identity of the
whistleblower;
• Provide for the appropriate infrastructure; and
• help to ensure the Company maintains the highest standards of ethical behaviour and integrity.
Anti-bribery and corruption policy
The Company has an anti-bribery and corruption policy which assists with the Company’s commitment to
conducting its business and activities with integrity. A copy of the policy can be viewed on the Company’s website
under the Corporate Governance section.
Sustainability
The Board is committed to supporting the sustainability of the natural environment, the people who rely on that
environment, and to ensuring the health and safety of our workforce and the communities in which we operate.
Our responsibility is to conduct business in a manner that uses best practices to minimise the effects of our
operations on the environment, to actively promote the sustainability of local communities, and to provide a safe
workplace for all employees, contractors and visitors.
Our goal is to manage these impacts so we can better manage the risks and enhance our company’s reputation in
environmental sustainability.
Diversity
The Company employs a broad mix of individuals reflecting its philosophy of hiring the best candidate for all positions
at all levels irrespective of race, religion or gender. In terms of the composition of the Board and Board nominations,
the Board considers the Australian Securities Exchange Corporate Governance principles as part of the overall
Board appointment process of determining the composition of the Board that is the most appropriate for the Group.
The Company has implemented a diversity policy. The objective of the policy is for the Company to embrace the
diversity of skills, ideas and experiences of an individual and recognise that a workforce is made up of people with
differences in age, gender, sexual orientation, disability, religion or national origin or social origin contributes to
MRC’s success and organisational strength. It ensures all employees are treated with fairness and respect.
MRC is committed to embedding a corporate culture that embraces diversity through:
• Recruitment on the basis of competence and performance and selection of candidates from a diverse pool of
qualified candidates;
• Maintaining selection criteria that does not indirectly disadvantage people from certain groups;
• Providing equal employment opportunities through performance and flexible working practices;
• Maintaining a safe working environment and supportive culture by taking action against inappropriate workplace
and business behaviour that is deemed as unlawful (discrimination, harassment, bullying, vilification and
victimisation);
• Promoting diversity across all levels of the business;
• Undertaking diversity initiatives and measuring their success;
• Regularly surveying our work climate; and
• The Board establishing measurable objectives in achieving gender diversity.
The Company currently employs 321 staff, with 88 females, representing 27%. There is one female director.
The Company has not yet set any measurable objectives however it has an extensive social and labour plan in
South Africa which addresses these diversity objectives.
The development of people is the fundamental principle, enshrined in the business strategy. The Company provides
opportunities and resources for employees to be fully developed in job disciplines that form part of the occupational
structures of the operating subsidiaries. These opportunities pervade throughout and are not limited to a specific
department or level.
The Company ensures that the highest calibre of management is of great importance to sustain the business.
110
MINERAL COMMODITIES LTD | Annual Report 2023
STATEMENT OF CORPORATE GOvERNANCE
The Company will assist employees in achieving their potential by supporting and mentoring them in their
development. At the same time, meticulous attention is given to the requirements of the legislation applicable thereto.
Regional and local economic development/socio-economic development
The Company’s wholly-owned subsidiary, Mineral Sands Resources (Pty) Ltd (“MSR”), is committed to contributing
to the socio-economic activities of the immediate community and the region. Although the primary objective is to
mine heavy mineral sands from the Tormin Mineral Sands Operation for the international and local markets, the
business is managed in a manner that embodies value-added compliance with all relevant legislative requirements
and socio-economic responsibilities.
MSR’s management will always endeavour to offer job opportunities to the local community and the labour sending
area from which labour is sourced, Xolobeni, by the creation of direct and indirect jobs wherever the required skills
and experience are present or developed. MSR will continue to afford job opportunities to the members of the local
community and the labour sending area where such individuals meet the necessary recruitment criteria.
The promotion of local and Xolobeni sustainable development is a core objective of MSR’s Social & Labour plan
(SLP) and, as such, may be used as a general indicator of the success of this SLP. This performance indicator
should focus particularly on the prevalence of livelihood opportunities for local people and Xolobeni people after
mine closure, compared with the situation before the commencement of the operation.
The Company’s Skaland Operation has an historical regional operational continuance for over 100 years. The social
economic benefits of the mine are integral to the local community’s sustainability, as such the Company is
committed to investing in local employment and continuous training and upskilling to ensure ongoing balanced
viability of the Mine’s future operations and the local community.
Securities Trading Policy
A Securities Trading policy has been adopted by the Board to set a standard of conduct, which demonstrates the
Company’s commitment to ensuring awareness of the insider trading laws, and that employees and directors comply
with those laws.
The Securities Trading policy imposes additional share trading restrictions on directors, the Company Secretary,
executives and employees involved in monthly financial accounting processes (“specified persons”).
Under the Securities Trading policy, specified persons are only permitted to buy and sell securities if they do
not possess non-public price sensitive information and trading occurs outside of specified restricted periods.
These periods are the periods commencing on the first day of the month before the end of the half-year or full year
period and ending on the next business day after the announcement of the results for that period. In addition, before
a specified person can deal in the Company’s securities they must obtain clearance from the appropriate officer,
confirming that there is no reason why they cannot trade.
Other Information
The ASX guidelines also prescribe that the Company should maintain a dedicated corporate governance information
section on its website. Such a dedicated information section is available on the Company’s website.
MINERAL COMMODITIES LTD | Annual Report 2023
111
MINERAL RESOURCE AND ORE RESERvES STATEMENT
Mineral Resource
and Ore Reserves statement
The Company reviews its Mineral Resources and Ore Reserves as at 31 December each year.
The Company considers any additional exploration or depletion of its resources that
would have a bearing on the total resource and reserve reported.
112
MINERAL COMMODITIES LTD | Annual Report 2021
MINERAL RESOURCE AND ORE RESERvES STATEMENT
)
%
0
9
e
r
i
u
q
c
a
o
t
n
o
i
t
p
O
(
%
1
5
)
%
0
9
e
r
i
u
q
c
a
o
t
n
o
i
t
p
O
(
%
1
5
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
6
5
n
o
i
t
a
c
i
l
p
p
A
r
e
d
n
U
–
m
u
i
r
o
t
a
r
o
m
o
t
j
t
c
e
b
u
S
n
o
i
s
i
c
e
d
l
a
e
p
p
a
)
C
E
D
M
E
R
(
e
e
t
t
i
m
m
o
C
l
a
t
n
e
m
n
o
r
i
v
n
E
d
n
a
t
n
e
m
p
o
l
e
v
e
D
g
n
n
M
i
i
l
i
a
n
o
g
e
R
o
t
j
t
c
e
b
u
S
t
s
e
r
e
t
n
I
d
e
r
e
t
s
i
g
e
R
)
t
s
e
r
e
t
n
I
l
a
i
c
fi
e
n
e
B
(
s
u
t
a
t
S
t
n
e
m
e
n
e
T
/
t
h
g
R
f
o
i
e
p
y
T
.
o
N
t
n
e
m
e
n
e
T
/
t
h
g
R
i
n
o
i
t
a
c
o
L
y
r
t
n
u
o
C
:
s
t
h
g
i
r
g
n
i
t
c
e
p
s
o
r
p
d
n
a
i
i
g
n
n
m
g
n
w
o
i
l
l
o
f
e
h
t
l
s
d
o
h
y
n
a
p
m
o
C
e
h
T
i
s
t
h
g
R
g
n
i
t
c
e
p
s
o
r
P
d
n
a
g
n
n
M
i
i
1
1
1
1
1
1
1
1
1
%
0
5
%
0
5
%
0
5
%
0
5
%
0
5
%
0
5
%
0
5
%
0
5
%
0
5
%
6
5
t
h
g
R
i
n
o
i
t
a
c
i
l
p
p
a
l
a
w
e
n
e
r
o
t
j
t
c
e
b
u
s
–
d
e
t
n
a
r
G
g
n
i
t
c
e
p
s
o
r
P
)
R
P
3
4
3
0
1
(
R
P
9
9
1
0
1
/
2
/
1
/
1
/
5
/
0
3
)
C
W
(
g
n
i
t
c
e
p
s
o
r
P
)
R
P
6
7
2
0
1
(
R
P
6
3
0
0
1
/
2
/
1
/
1
/
5
/
0
3
)
C
W
(
i
i
g
n
n
M
o
t
g
n
i
t
r
e
v
n
o
C
–
m
u
i
r
o
t
a
r
o
m
o
t
j
t
c
e
b
u
S
g
n
i
t
c
e
p
s
o
r
P
R
P
5
2
0
0
1
/
2
/
1
/
1
/
5
/
0
3
C
E
k
c
o
b
l
a
n
a
y
n
a
w
K
–
i
n
e
b
o
l
o
X
n
o
i
t
a
c
i
l
p
p
a
r
e
d
n
U
g
n
i
t
c
e
p
s
o
r
P
)
R
P
8
4
3
0
1
(
R
P
7
0
3
0
1
/
2
/
1
/
1
/
5
/
0
3
)
C
W
(
p
o
K
o
o
r
a
K
y
e
l
v
p
i
l
K
–
i
n
m
r
o
T
d
e
t
n
a
r
G
d
e
t
n
a
r
G
d
e
t
n
a
r
G
g
n
i
t
c
e
p
s
o
r
P
g
n
i
t
c
e
p
s
o
r
P
g
n
i
t
c
e
p
s
o
r
P
R
P
0
4
2
0
1
/
2
/
1
/
1
/
5
/
0
3
)
C
W
(
R
P
1
6
2
0
1
/
2
/
1
/
1
/
5
/
0
3
)
C
W
(
i
n
e
n
u
D
w
u
a
a
r
G
s
e
h
c
a
e
B
n
r
e
h
t
r
o
N
–
i
n
m
r
o
T
R
P
2
6
2
0
1
/
2
/
1
/
1
/
5
/
0
3
)
C
W
(
o
o
r
a
K
l
l
a
w
e
e
G
–
i
n
m
r
o
T
e
n
o
Z
f
r
u
S
–
i
n
m
r
o
T
e
r
o
h
s
f
f
O
–
i
n
m
r
o
T
t
n
u
P
e
D
–
i
n
m
r
o
T
d
e
t
n
a
r
G
d
e
t
n
a
r
G
d
e
t
n
a
r
G
d
e
t
n
a
r
G
i
g
n
n
M
i
i
g
n
n
M
i
i
g
n
n
M
i
)
R
M
8
0
1
0
1
(
R
M
2
6
1
/
2
/
2
/
1
/
5
/
0
3
)
C
W
(
s
a
v
n
e
e
t
S
–
i
n
m
r
o
T
)
R
M
7
0
1
0
1
(
R
M
3
6
1
/
2
/
2
/
1
/
5
/
0
3
)
C
W
(
h
t
u
o
S
d
n
a
h
t
r
o
N
–
i
n
m
r
o
T
M
E
3
6
1
&
2
6
1
n
o
i
s
n
a
p
x
e
–
i
n
m
r
o
T
a
c
i
r
f
A
h
t
u
o
S
d
e
t
n
a
r
G
d
e
t
n
a
r
G
d
e
t
n
a
r
G
d
e
t
n
a
r
G
n
o
i
t
a
c
i
l
p
p
a
r
e
d
n
U
n
o
i
t
a
c
i
l
p
p
a
r
e
d
n
U
d
e
t
n
a
r
G
s
t
h
g
R
i
n
o
i
t
a
r
o
p
x
E
l
n
o
i
t
a
r
o
p
x
E
l
n
o
i
t
a
r
o
p
x
E
l
n
o
i
t
a
r
o
p
x
E
l
n
o
i
t
a
r
o
p
x
E
l
i
g
n
n
M
i
i
g
n
n
M
i
R
M
5
2
0
0
1
/
2
/
1
/
1
/
5
/
0
3
C
E
i
n
e
b
o
l
o
X
5
4
2
/
4
7
M
5
0
5
/
4
7
E
5
6
5
/
4
7
E
2
0
7
/
4
7
E
2
5
7
/
4
7
E
3
5
7
/
4
7
E
p
u
n
i
l
g
n
u
M
p
u
n
i
l
g
n
u
M
p
u
n
i
l
g
n
u
M
p
u
n
i
l
g
n
u
M
p
u
n
i
l
g
n
u
M
p
u
n
i
l
g
n
u
M
a
i
l
a
r
t
s
u
A
i
g
n
n
M
i
f
o
n
o
i
t
a
i
r
p
o
r
p
x
E
d
n
a
2
/
6
0
3
-
1
2
4
5
,
1
/
6
0
3
-
1
2
4
5
.
r
n
B
/
.
r
n
G
n
e
l
e
a
r
T
y
a
w
r
o
N
s
l
e
c
r
a
p
d
n
a
l
d
e
fi
i
c
e
p
s
n
o
g
r
e
B
n
i
1
/
7
0
3
-
1
2
4
5
d
e
t
n
a
r
G
d
e
t
n
a
r
G
n
o
i
t
a
r
o
p
x
E
l
n
o
i
t
a
r
o
p
x
E
l
2
.
r
n
B
/
0
9
.
r
n
G
1
.
r
n
B
/
4
2
1
.
r
n
G
n
e
t
s
e
H
/
t
e
l
l
e
j
f
d
r
a
V
n
e
k
k
u
B
t
n
u
o
M
l
a
v
o
r
p
p
a
y
r
o
t
a
u
g
e
r
l
d
n
a
l
r
e
d
o
h
e
r
a
h
s
o
t
j
t
c
e
b
u
s
s
i
3
2
0
2
l
i
r
p
A
n
i
d
e
c
n
u
o
n
n
a
%
9
6
o
t
%
0
5
m
o
r
f
e
s
a
e
r
c
n
I
1
MINERAL COMMODITIES LTD | Annual Report 2021
113
MINERAL RESOURCE AND ORE RESERvES STATEMENT
Mineral Resources
As at 31 December 2023, Group Mineral Resources includes:
• 627 million tonnes at 7.7% ThM including 48 million tonnes of in situ heavy mineral across the Tormin Mineral
Sands Operation and Xolobeni Mineral Sands project.
• 9.76 million tonnes at 14.2% TGC and contained 1.38 million tonnes of graphite across the Munglinup Graphite
project and Skaland Graphite Operation.
Ore Reserves
As at 31 December 2023, Group Ore Reserves includes:
• 59.8 million tonnes at 3.6% vhM (14.5% ThM) including 2.2 million tonnes of in situ heavy mineral at the Tormin
Mineral Sands Operation.
• 4.83 million tonnes at 14.1% TGC and contained 0.68 million tonnes of graphite across its Munglinup Graphite
project and Skaland Graphite Operation.
Mineral Sands Resources
The Tormin Mineral Sands Operation is located on the west coast of South Africa, approximately 360 km north
of Cape Town.
• Tormin Beaches is a high grade placer beach mineral sands deposit hosting naturally occurring zircon,
ilmenite, rutile, magnetite and garnet. The Company is mining a heavy Mineral Sands (“hMS”) deposit located
in a dynamic and actively changing coastal beach environment. Due to the constant wave action and high tidal
flooding of the mining areas, replenishment of hMS material is taking place in mined and disturbed areas.
Mining has now been ongoing for ten years and a total of 18.5 million tonnes of material has been processed.
The tonnage processed is more than the declared resource tonnage, which is indicative of the replenishing
nature of the resource where resource blocks are mined more than once. As the mining rate is faster than the
replenishment rate, the resource grade has been steadily diminishing over the past ten years.
The Company as at 31 December 2023 is recognising a resource of 1.9 million tonnes at 10.4% ThM, using a
2% heavy mineral cut-off grade based on the JORC Code (2012).
• Northern Beaches incorporate ten beaches directly north of and adjoining the Tormin Beaches. The areas
unite semi-continuous tenements approximately 23.5 kilometres in length, covering an area of 398 hectares of
beach sands prospective for zircon, rutile, ilmenite, garnet, leucoxene and magnetite. Like the Tormin Beaches,
this deposit is located on an active placer beach undergoing continuous replenishment from oceanic storm and
wave activity. The heavy minerals in the beach are constantly replenished by the transport of new sediment
from deeper waters, much of which has been derived from the erosion of deposits accumulated in the elevated
historic beach terraces onto the present beach.
In 2023, a total of 0.86 Mt of ore was mined out from the Northern Beaches. Total Mineral Resource for the
Northern Beaches is estimated at 0.9 million tonnes at 25.4% ThM in the category of Indicated and Inferred
using a 2% cut-off.
•
Inland Strand incorporates an area approximately 12 km in length covering 1741 hectares of coastal area
immediately adjacent to the existing mining operations on the Company-owned farm Geelwal Karoo 262.
The Inland Strand mining areas granted under the Expanded Mining Right (162&163 EMR) in mid-2020 include
two areas approximately 5.6 kilometres in total length, covering 75 hectares of high-grade mineralisation.
The JORC compliant resource Mineral Resource of western Strandline was estimated in December 2021 at
193.2 million tonnes at 9.58% ThM for 18.5 Mt of contained heavy Mineral using a 2% cut-off and was reported
on December 2021. A minor resource change has occurred in 2023 resulting in a reduction of 0.3 million tonnes
in the Measured category due to processing of the high grade ROM stockpile material from the southern pits.
The maiden Mineral Resource of Eastern Strandline was estimated at 19.5 million tonnes at 3.3% ThM in the
categories of Indicated and Inferred using a 2% ThM cut-off grade. This Mineral Resource demonstrates the
prospectivity of the inland strandline areas and underscores the Company’s strategy of growing the resources
for mineral processing expansion.
114
MINERAL COMMODITIES LTD | Annual Report 2023
MINERAL RESOURCE AND ORE RESERvES STATEMENT
The Xolobeni Mineral Sands Project is located in the Eastern Cape province of South Africa approximately
300 km north of East London and 200 km south of Durban.
Mineral resource is estimated at 346 million tonnes at 5.0% ThM, with 54% ilmenite in ThM. The Xolobeni project is
currently subject to a Department of Mineral Resources (“DMR”) mandated moratorium in South Africa. Any potential
development timetable is unknown and subject to the outcome of this moratorium. No exploration or production
activity has been carried out at Xolobeni during the year and mineral resource remain consistent with that reported
for the period ending 31 December 2021.
Total Mineral Resources of heavy Mineral Sand based on mined material reconciliation as at 31 December 2023.
Project
Category
Tormin Beaches
Indicated
Inferred
Total
Northern Beaches
Indicated
Inferred
Total
Western Strandline Measured
Indicated
Inferred
Stockpile
Total
Eastern Strandline
Indicated
Inferred
Total
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
De Punt
Sub Total
Xolobeni
Grand Total
Resource
(Mt)
1.7
0.2
1.9
0.6
0.2
0.9
31.9
39.7
119.2
2.05
192.9
1.9
17.5
19.5
26.9
39.2
66.1
281
224
104
18
346
627
THM
(%)
10.4
10.1
10.4
32.2
6.9
25.4
19.5
9.5
6.9
12.3
9.6
5.3
3.1
3.4
15.1
18.2
16.9
10.9
5.7
4.1
2.3
5.0
7.7
•
•
•
•
Mineral assemblage reported as in situ percentage of THM content.
Tonnes and grades numbers may not compute due to rounding.
2% THM cut-off grade used for Tormin Deposits.
1% THM cut-off grade used for Xolobeni.
Contained
THM
(Mt)
Zircon
(% HM)
Garnet
(% HM)
Ilmenite
(% HM)
Rutile
(% HM)
Magnetite
(% HM)
0.18
0.02
0.20
0.20
0.02
0.22
6.2
3.7
8.2
0.3
18.4
0.1
0.5
0.6
4.1
7.1
11.2
30.6
12.8
4.3
0.4
17.4
48.0
2.4
2.3
2.4
1.8
2.2
1.9
1.8
1.1
2.6
2.2
2.1
6.1
6.4
6.3
4.5
3.3
3.7
2.8
–
–
–
–
–
40.9
49.0
41.7
42.1
41.7
42.0
12.5
15.0
11.0
17.7
12.1
16.6
15.6
15.7
21.3
17.3
18.9
14.3
–
–
–
–
–
5.4
5.0
5.3
5.0
4.5
4.9
7.6
3.8
18.0
26.1
13.5
35.4
36.7
36.6
18.2
14.5
16.0
15.6
54.5
53.7
69.4
55.0
37.3
1.2
1.2
1.2
0.8
1.3
0.9
1.1
0.8
1.4
3.4
1.3
7.7
6.1
6.2
2.8
2.1
2.4
1.9
–
–
–
–
–
0.6
0.7
0.6
0.8
0.8
0.8
0.5
0.7
0.4
1.2
0.5
0.9
0.5
0.6
0.9
1.2
1.1
0.7
–
–
–
–
–
MINERAL COMMODITIES LTD | Annual Report 2023
115
MINERAL RESOURCE AND ORE RESERvES STATEMENT
Mineral Sands Reserves
As at 31 December 2023, Group Ore Reserves of Mineral Sands is estimated to contain 59.8 million tonnes of 3.6%
vhM. This represents 2.2 million tonnes of valuable heavy.
Total Ore Reserves of valuable Mineral Sands as at 31 December 2023.
Category
Project
Proven
Probable
Total
Reserves
(Mt)
21.0
38.8
59.8
Contained
VHM
(Mt)
1.15
1.05
2.20
VHM
(%)
5.3
2.7
3.6
Zircon
(%)
Garnet
(%)
Ilmenite
(%)
Rutile
(%)
Magnetite
(%)
0.4
0.2
0.2
2.7
1.7
2.1
1.8
0.6
1.1
0.3
0.1
0.2
0.1
0.1
0.1
THM
(%)
20.6
11.2
14.5
•
•
•
Tonnes and grade numbers may not compute due to rounding.
Ore Reserve uses a variable cut-off grade.
Ore Reserves are a sub-set of Mineral Resources.
Graphite Resources
The Skaland Graphite Operation is located on the Island of Senja in northern Norway. The updated JORC Code
(2012) compliant resource of 1.77 million tonnes at 23.4% TGC in the categories of Measured, Indicated and Inferred
for 0.41 Mt of contained graphite using a 10% cut-off for the Trælen deposit.
The Munglinup Graphite Project is located in the South Coast region of western Australia, approximately 107 km
west of Esperance. On 8 January 2020, a JORC Code (2012) compliant Mineral Resource of 7.99 million tonnes
at 12.2% TGC in the category of Indicated and Inferred using a 5% cut-off was reported. The Mineral Resource of
Munglinup remains unchanged since the release in January 2020.
Total Mineral Resources of Graphite based on mined material reconciliation as at 31 December 2023.
Project
Munglinup
Skaland
Grand Total
Category
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
•
•
•
Tonnes and grade numbers may not compute due to rounding.
10% TGC cut-off grade used for Skaland.
5% TGC cut-off grade used for Munglinup.
Resource
(Mt)
Total Graphitic
Carbon
(%)
Contained Graphite
(Mt)
4.49
3.50
7.99
0.05
0.66
1.05
1.77
9.76
13.1
11.0
12.2
30.4
25.1
22.0
23.4
14.2
0.58
0.38
0.97
0.02
0.17
0.23
0.41
1.38
116
MINERAL COMMODITIES LTD | Annual Report 2023
MINERAL RESOURCE AND ORE RESERvES STATEMENT
Graphite Reserves
As at 31 December 2023, Group Ore Reserves of graphite is estimated to contain 4.83 million tonnes of 14.1% TGC.
This represents 0.68 million tonnes of graphite ore.
The Munglinup Ore Reserve was reported in January 2020 and contains 4.24 million tonnes of 12.8% TGC.
Also reported are in-pit resources (inferred resources that will be mined as part of the design but do not constitute
part of the ore reserves) of 2.75 million tonnes @ 11.1% TGC. The Munglinup Ore Reserve remains unchanged
since 2020.
Total Ore Reserves of Graphite as at 31 December 2023.
Project
Munglinup
Skaland
Grand Total
Category
Proven
Probable
Total
Proven
Probable
Total
•
•
•
Tonnes and grade numbers may not compute due to rounding.
Ore Reserve uses a variable cut-off grade.
Ore Reserves are a sub-set of Mineral Resources.
Reserves
(Mt)
Total Graphitic
Carbon
(%)
Contained Graphite
(Mt)
–
4.24
4.24
0.04
0.55
0.59
4.83
–
12.8
12.8
27.5
23.8
24.1
14.1
–
0.54
0.54
0.01
0.13
0.14
0.68
Mineral Resource and Ore Reserve Governance
Mineral Resources and, where applicable, Ore Reserves, are estimated by suitably qualified persons in accordance
with the JORC Code and the ASX Listing Rules, using industry standard techniques. Mineral Resource estimates
and supporting documentation are reviewed by external Competent persons. Any amendments to the Mineral
Resources and Ore Reserves Statement to be included in the Annual Report are reviewed by suitably qualified
Competent persons. All Competent persons have sufficient experience which is relevant to the style of mineralisation
and types of deposit under consideration and to the activity which they are is undertaking to qualify as a Competent
person in accordance with the JORC Code (2012). Each Competent person consents to inclusion in the report of the
matters based on this information in the form and context in which it appears.
MINERAL COMMODITIES LTD | Annual Report 2023
117
ShAREhOLDER INFORMATION
Shareholder information
Additional information required by the Australian Securities Exchange Ltd Listing Rules and not disclosed elsewhere
in this report. This information is current as at 11 April 2024.
Twenty Largest Shareholders
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
AU MINING LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SIMTO RESOURCES PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
REGIONAL MANAGEMENT PTY LTD
MR ANTHONY JOHN ANDREWS
MRS KATHRYN ELIZABETH STRICKLAND
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
TASMANIAN OUTSTANDING PROPERTY INVESTMENTS PTY LTD
CHETAN ENTERPRISES PTY LTD
KENSINGTON CAPITAL MANAGEMENT PTY LTD
MR JONATHAN COLVILE
MR RICHARD ARTHUR LOCKWOOD
MR BARTON THOMAS WARE
MR LAWRENCE WING MING HO & MRS YING HO
MR GUY WALKER
MR GUY MICHAEL LINDLEY OSBORNE& MRS PAULA-JANE OSBORNE
MR CHRISTOPHER JOHN EAGLES
20
MR ROGER WILLIAM DOBSON
11 Apr 2024
401,863,619
184,633,331
173,603,805
33,628,177
14,959,654
10,046,540
5,549,900
5,299,983
4,014,410
3,962,625
3,909,181
3,500,000
3,349,219
3,070,989
2,430,000
2,300,000
2,299,516
2,215,159
2,002,537
2,000,000
Total
864,638,654
Balance of register
119,833,954
Grand total
984,472,599
% IC
40.82
18.75
17.63
3.42
1.52
1.02
0.56
0.54
0.41
0.40
0.40
0.36
0.34
0.31
0.25
0.23
0.23
0.23
0.20
0.20
87.83
12.17
100.00
118
MINERAL COMMODITIES LTD | Annual Report 2023
Distribution of equity security holders
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
ShAREhOLDER INFORMATION
Securities
956,213,243
24,625,689
2,209,771
1,387,412
36,484
%
97.13
2.50
0.22
0.14
0.00
No. of holders
259
674
274
408
154
984,472,599
100.00
1,769
Marketable Parcels
Number of shareholders holding less than a marketable parcel of ordinary shares is 1,123.
Voting Rights
Every ordinary shareholder present in person or by proxy at meetings of shareholders shall have one vote for every
share held.
Option and performance Rights holders have the right to attend meetings but have no voting rights until the options
or performance rights are exercised.
Substantial shareholders
The following shareholders are substantial shareholders of MRC:
•
•
Au Mining Limited
Tormin Holdings Limited
• Mr & Mrs Anthony C Lowrie
Restricted securities
There are no restricted securities.
Share buy backs
There is no current on market share buyback.
401,863,619
164,375,619
76,951,674
40.82%
16.70%
7.82%
MINERAL COMMODITIES LTD | Annual Report 2023
119
M
R
C
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
3
Unit 2, 161 Great Eastern highway
Belmont wA 6104
Telephone: +61 (8) 6373 8900
Facsimile: +61 (8) 6373 8999
Email: info@mncom.com.au