MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
1
Annual Report
MRG Metals Ltd
ABN: 83 148 938 532
For the Year ended 30 June 2022
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Contents
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Statement of Financial Position
Statement of Profit or Loss and Other Comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Corporate Directory
2
Page
3
27
36
37
45
46
47
48
49
69
70
74
77
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
3
Review of Operations
MRG Metals is pleased to provide a summary of the Company’s activities for the 2022 financial year across its portfolio
of Heavy Mineral Sands (HMS) and projects, located in southern Mozambique.
MRG is running a dual speed approach across its portfolio of assets:
• Exploration activities across multiple tenements
• Progressing Corridor Central and South Prospects to mine development whilst delivering the best 100- 200MT MRE
likely to feed into scoping study which is currently underway.
MRG has to date defined a JORC Resource over 2 billion tonnes with further upside from a JORC Exploration Target.
The Company believes that this could potentially be one of the largest HMS discoveries worldwide in the last decade.
Through the Company’s extensive activities at its Corridor Projects throughout the year, MRG is now in a position
with multiple pits demonstrating Mineral Resource Estimates which could lead to a mine start-up operation.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
4
Throughout the year, MRG has carried out multiple augur programs at Corridor. The Company’s auger exploration
technique has yet again been proven to be highly effective in delivering high grade results at Corridor.
Corridor Projects
The Corridor Projects covers 2 licences, Corridor Central and Corridor South covering a total of 387km2.
During the year, MRG applied for an additional Heavy Mineral Sands (HMS) exploration licence in Mozambique. The
Corridor North (10779L) ELA is north of and abutting MRG’s Corridor Central (6620 L) licence, which contains
Koko Massava JORC Resource (1.4BT @ 5.2% THM).
MRG’s key focus of the last year has been the Koko Massava, Nhacutse and Poimobo targets. The Nhacutse and
Poiombo deposits sit adjacent, approximately 4 km apart, and a similar distance between the Nhacutse and Koko
Massava deposit to the northwest. All three deposits are in a very close economic radius and approximately 40 km
from the proposed port at Chongoene.
The Company commenced this financial years’ activities by outlining its plans to progress the Corridor Projects from
purely exploration into mine development. IHC Mining was appointed to carry out a working program which include
the following scope of works:
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
5
- Update Koko Massava Mineral Resources Estimate (MRE)
- Pit optimisation / mine planning studies for Koko Massava
- Produce Maiden MREs for Nhacutsce and Poiombo
- Re-run pit optimisation / mine planning for all 3 MRE’s to achieve best scenario
- Preliminary Economic Assessment (PEA) comprising a Scoping Study and Financial Modelling including Pre-
Feasibility Stage Metallurgical Testwork
Mineral Resource Estimates (Koko Massava, Nhacutse and Poiombo)
Koko Massava
Within the December 2021 quarter, MRG announced its updated Koko Massava JORC Mineral Resource estimate
which included the delivery of a High-Grade Zone of 103 Mt @ 6.6% total heavy minerals (THM) at 5.5% cut-off
grade. This world-class HMS deposit confirmed at Koko Massava, contains the potential to support a 50+ year mine
life.
The High-Grade Zone, which is situated between the towns of Koko Massava and Malehice, presents a potential high-
grade start-up mine opportunity that MRG will asses in future pit optimisation studies.
The updated global Koko Massava MRE comprises a total Mineral Resource of 1,534 Mt @ 5.1% THM, with 17%
Slimes, containing 78 Mt of THM with an assemblage of 38% ilmenite, 32% titano-magnetite, 1% rutile and 1% zircon.
The JORC categories are specifically stated as:
Indicated Mineral Resource of 557 Mt @ 5.1% THM and 17% Slimes containing 28 Mt of THM with an assemblage
of 38% ilmenite, 32% titano-magnetite, 1% rutile and 1% zircon.
Inferred Mineral Resource of 977 Mt @ 5.0% THM and 16% Slimes containing 49 Mt of THM with an assemblage
of 38% ilmenite, 32% titano-magnetite, 1% rutile and 1% zircon.
The MRE at Koko Massava deposit also delivered an Exploration Target in the range of 120 and 630 Mt @ between
4.5 and 6.0% THM at cut-off grades of 3% and 5% THM. This Exploration Target was predominantly located within
the boundaries of the Koko Massava and Malehice villages.
Table 1: Summary of the updated JORC Mineral Resource estimate for the global Koko Massava deposit area.
•
•
Table 2: Summary of Exploration Target for global Koko Massava area.
The Mineral Resource estimate was reported at a range of cut-off grades in increments of 0.5% THM and this grade
tonnage curve is presented in the below figure, with the continuity of the high grades shown in the MRE to be present
up to a 5.5% THM cut-off.
Summary of Mineral Resources(1)THM Assemblage(2)MaterialIn Situ THMBDTHMSLIMESOSILMRUTZIRTIMAGCHROMMOTHANDANMOTH(Mt)(Mt)(gcm3)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)Indicated557281.75.117139113241383Inferred977491.75.016138113241383Grand Total1,534781.75.117138113241383Notes: (1) Mineral resources reported at a cut-off grade of 4% THM (2) Mineral assemblage is reported as a percentage of in situ THM content.Mineral Resource CategorySummary of Exploration Target(1)THM Assemblage(2)MaterialIn Situ THMBDTHMSLIMESOSILMRUTZIRTIMAGCHROMMOTHANDANMOTH(Mt)(Mt)(gcm3)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)Exploration Target120 - 6307 - 301.744.5 - 6.015138113141393Grand Total120 - 6307 - 301.744.5 - 6.015138113141393Notes: (1) Exploration Target reported at a cut-off grade of 3% - 5% THM (2) Mineral assemblage is reported as a percentage of in situ THM content.Target
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
6
Grade-tonnage curve showing material tonnes versus THM grade (and Slime) at various cut-off grades for the High-
Grade Zone Mineral Resource at Koko Massava. Cut-off grade is shown in the top row of the table, with
corresponding tonnage, average THM% grade and Slime % grade in the column below it.
The High-Grade Zone has grades of +4% THM at surface for the entire modelled outlined area with the majority of
the area having +4.5% THM grades at surface (refer below two figures).
Section through the High- Grade Zone area (looking east) 7x vertical exaggeration, local mine grid.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
7
Multiple section slices through the Koko Massava deposit sub-parallel to the strike of the High-Grade Zone (looking due
east) 7x vertical exaggeration, local mine grid.
The grade tonnage curve for the High-Grade Zone also shows the significant continuity of the grades, but the ratio of
material below cut-off grade to material above cut-off grade (stripping ratio) in the High-Grade Zone is generally lower
and more continuous than for the rest of the Koko Massava Resource deposit, at 1.3:1.0 in the High-Grade Zone with
a 5.5% THM cut-off. The stripping ratio is low in the High-Grade Zone even when higher cut-offs are used, with the
ratio at the 4.0% THM cutoff being 0.20:1.0, at 4.5% THM being 0.33:1.0 and at 5.0% THM being 0.65:1.0. The
stripping ratio for the 4.5% THM cut-off grade is shown in the below Figure.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
8
Plan view of High-Grade Zone (green outline) showing stripping ratio at a 4.5% THM cut-off grade, local mine grid.
The Koko Massava High-Grade Zone comprises a Mineral Resource estimate of 103 Mt @ 6.6% THM, at 5.5% cut-
off grade, containing 7 Mt of THM, with 14% Slimes, with an assemblage of 39% lmenite, 33% titano-magnetite, 1%
rutile and 1% zircon. The JORC categories are specifically stated as:
•
•
an Indicated Mineral Resource of 58 Mt @ 6.4% THM and 15% Slimes containing 4 Mt of THM with an assemblage
of 39% ilmenite, 33% titano-magnetite, 1% rutile and 1% zircon
an Inferred Mineral Resource of 45 Mt @ 6.8% THM and 12% Slimes containing 3 Mt of THM with an assemblage
of 38% ilmenite, 34% titano-magnetite, 1% rutile and 1% zircon
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Nhacutse and Poiombo MRE
9
In February 2022, MRG was thrilled to deliver its Maiden JORC MREs for its Nhacutse and Poiombo deposits. At
4% Total Heavy Mineral (THM) cut-off:
o Nhacutse
o Poiombo
o Combined Nhacutse and Poiombo
535 Mt @ 4.9% THM (Inferred Resource)
325 Mt @ 4.8% THM (Inferred Resource)
860 Mt @ 4.9% THM (Inferred Resource).
Both Nhacutse and Poiombo deposits demonstrate exceptional homogeneity and good continuity of higher grade
zones of mineralisation at 5% THM cut-off:
o Nhacutse 172 Mt @ 6.0% THM (Inferred Resource)
o Poiombo 84 Mt @ 6.1% THM (Inferred Resource)
o Combined 256 Mt @ 6.0% THM (Inferred Resource)
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
10
This was followed by a comprehensive mineralogical study of 27 composite samples from Nhacutse and Poiombo
deposits being completed, which returned substantially improved Valuable Heavy Mineral (VHM) results compared
to the widely spaced earlier mineralogy data used in the Maiden Mineral Resource estimates.
As such in April, MRG was able release its updated JORC MREs based on the new mineralogical study.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
11
Nhacutse
Poiombo
At 4% THM cut-off
Indicated
Inferred
Indicated
Inferred
386 Mt @ 4.9% THM
149 Mt @ 4.8%THM
138 Mt @ 5.0% THM
187 Mt @ 4.7%THM
Combined Nhacutse and Poiombo
Indicated and Inferred
860 Mt @ 4.9% THM
Nhacutse
Poiombo
At 5% THM cut-off
Indicated
Inferred
Indicated
Inferred
142 Mt @ 5.8% THM
31 Mt @ 6.8%THM
44 Mt @ 6.3% THM
40 Mt @ 5.8%THM
Combined Nhacutse and Poiombo
Indicated and Inferred
257 Mt @ 6.0% THM
The updated Nhacutse and Poiombo MREs also delivered a combined JORC Exploration Target of between 50 and
500 Mt @ between 4.2 and 5.4% THM for a total range of contained THM of between 3 and 20 Mt.
The Updated MRE and significantly better new mineralogy data from Nhacutse and Poiombo demonstrates further
exploration success for MRG through the discovery of at-surface, higher in-situ value per tonne deposits compared to
its Mineral Resource estimates to date from Koko Massava deposit
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
12
The updated JORC Mineral Resource estimates for the Nhacutse and Poiombo deposits are based on a comprehensive
mineralogical study (Refer ASX Announcement 2 February 2022), which returned significantly better results than the
historical mineralogy data utilised in the maiden Nhacutse and Poiombo estimate.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
13
Receipt of the results from the comprehensive mineralogical studies facilitated the preparation of an updated MRE at
a 4% THM cut-off grade (COG) for the Nhacutse and Poiombo deposits.
At a cut-off grade of 4% THM, The Global Mineral Resource estimates for the combined Nhacutse and Poiombo
deposits comprise a total Mineral Resource of 860 Mt @ 4.9% THM, with 20% Slimes, containing 42 Mt of THM
with an assemblage of 43% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon. The JORC categories are
specifically stated as:
Indicated Mineral Resource of 524 Mt @ 5.0% THM and 22% Slimes containing 26 Mt of THM with an assemblage
of 44% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon; and
Inferred Mineral Resource of 337 Mt @ 4.7% THM and 17% Slimes containing 16 Mt of THM with an assemblage
of 41% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon.
At a cut-off grade of 4% THM, the updated Nhacutse Mineral Resource estimate comprises a total Mineral Resource
of 535 Mt @ 4.9% THM, with 21% Slimes, containing 26 Mt of THM with an assemblage of 44% ilmenite, 27%
titano-magnetite, 1% rutile and 1% zircon. The JORC categories are specifically stated as:
Indicated Mineral Resource of 386 Mt @ 4.9% THM and 22% Slimes containing 19 Mt of THM with an assemblage
of 44% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon; and
Inferred Mineral Resource of 149 Mt @ 4.8% THM and 16% Slimes containing 7 Mt of THM with an assemblage of
45% ilmenite, 25% titano-magnetite, 1% rutile and 1% zircon.
At a cut-off grade of 4% THM, the updated Poiombo Mineral Resource estimate comprises a total Mineral Resource
of 325 Mt @ 4.8% THM, with 19% Slimes, containing 16 Mt of THM with an assemblage of 41% ilmenite, 27%
titano-magnetite, 1% rutile and 1% zircon. The JORC categories are specifically stated as:
Indicated Mineral Resource of 138 Mt @ 5.0% THM and 21% Slimes containing 7 Mt of THM with an assemblage
of 44% ilmenite, 26% titano-magnetite, 1% rutile and 1% zircon; and
Inferred Mineral Resource of 187 Mt @ 4.7% THM and 18% Slimes containing 9 Mt of THM with an assemblage of
38% ilmenite, 27% titano-magnetite, 1% rutile and 2% zircon.
•
•
•
•
•
•
The Mineral Resource estimate at the Nhacutse and Poiombo deposits also delivered an Exploration Target in the
range of 50 and 500 Mt @ between 4.5 and 5.4% THM at cut-off grades of 3% and 5% THM. This Exploration Target
was predominantly located within the boundaries of the Bungane, Nhacutse and Poiombo villages.
At a cut-off grade of 5% THM, the High-Grade Zone Mineral Resource estimates for the combined Nhacutse and
Poiombo deposits comprise a total Mineral Resource of 257 Mt @ 6.0% THM, with 21% Slimes, containing 15 Mt of
THM with an assemblage of 43% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon. The JORC categories are
specifically stated as:
•
•
Indicated Mineral Resource of 186 Mt @ 5.9% THM and 22% Slimes containing 11 Mt of THM with an assemblage
of 43% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon; and
Inferred Mineral Resource of 71 Mt @ 6.2% THM and 18% Slimes containing 4 Mt of THM with an assemblage of
41% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon.
At a cut-off grade of 5% THM, the updated High-Grade Zone Nhacutse Mineral Resource estimate comprises a total
Indicated and Inferred Mineral Resource of 173 Mt @ 6.0% THM, with 21% Slimes, containing 10 Mt of THM with
an assemblage of 44% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon. The JORC categories are specifically
stated as:
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
14
•
•
•
•
Indicated Mineral Resource of 142 Mt @ 5.8% THM and 22% Slimes containing 8 Mt of THM with an assemblage
of 43% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon; and
Inferred Mineral Resource of 31 Mt @ 6.8% THM and 17% Slimes containing 2 Mt of THM with an assemblage of
45% ilmenite, 27% titano-magnetite, 1% rutile and 1% zircon.
At a cut-off grade of 5% THM, the updated High-Grade Zone Poiombo Mineral Resource estimate comprises a total
Indicated and Inferred Mineral Resource of 84 Mt @ 6.1% THM, with 19% Slimes, containing 5 Mt of THM with an
assemblage of 41% ilmenite, 26% titano-magnetite, 1% rutile and 1% zircon. The JORC categories are specifically
stated as:
Indicated Mineral Resource of 44 Mt @ 6.3% THM and 19% Slimes containing 3 Mt of THM with an assemblage of
44% ilmenite, 26% titano-magnetite, 1% rutile and 1% zircon; and
Inferred Mineral Resource of 40 Mt @ 5.8% THM and 19% Slimes containing 2 Mt of THM with an assemblage of
38% ilmenite, 27% titano-magnetite, 1% rutile and 2% zircon.
Summary of the Global JORC Mineral Resource estimates for the combined Nhacutse and Poiombo deposit areas (THM>4%).
Summary of the JORC Mineral Resource estimates for the individual Nhacutse and Poiombo deposit areas (THM>4%).
The MREs were undertaken by IHC Mining in Perth, Australia.
Global Mineral Resource Estimation4% COGSummary of Mineral Resources(1)MaterialIn Situ THMBDTHMSLIMESOSILMRUTZIRTIMAGCHRMMOTHANDANMOTH(Mt)(Mt)(gcm3)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)GlobalIndicated524261.745.02214411273284Inferred337161.744.717141112745103Grand Total860421.744.92014311273393Notes: (1) Mineral resources reported at a cut-off grade of 4% THM (2) Mineral assemblage is reported as a percentage of in situ THM content.DepositMineral Resource CategoryNhacutse Mineral Resource Estimation4% COGSummary of Mineral Resources(1)MaterialIn Situ THMBDTHMSLIMESOSILMRUTZIRTIMAGCHRMMOTHANDANMOTH(Mt)(Mt)(gcm3)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)NhacutseIndicated386191.744.92214411273293Inferred14971.744.816145112532103Grand Total535261.744.92114411273293Notes: (1) Mineral resources reported at a cut-off grade of 4% THM (2) Mineral assemblage is reported as a percentage of in situ THM content.DepositMineral Resource CategoryPoiombo Mineral Resource Estimation4% COGSummary of Mineral Resources(1)MaterialIn Situ THMBDTHMSLIMESOSILMRUTZIRTIMAGCHRMMOTHANDANMOTH(Mt)(Mt)(gcm3)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)PoiomboIndicated13871.745.02114411264384Inferred18791.744.718138122747113Grand Total325161.744.819141112745103Notes: (1) Mineral resources reported at a cut-off grade of 4% THM (2) Mineral assemblage is reported as a percentage of in situ THM content.DepositMineral Resource Category
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
15
Mineralogical Studies
MRG released excellent results from a comprehensive quantitative mineralogical study (utilising XRF, XRD, Bulk
Mineralogy and QEMSCAN) within the Nhacutse and Poiombo deposits, which as previously outlined, was used for
the update of the maiden Nhacutse and Poiombo Inferred JORC Mineral Resource estimate.
The study involved 27 composites, 18 from Nhacutse and 9 from Poiombo, with the composites sourced from 56
aircore holes and 159 individual sample intervals. The composites were done lithologically, with composites covering
the mineralised sand at surface from 0 to generally between 3 and 4.5m depth (red/red-brown sand); the red/red-
brown sand to a depth of generally between 30 and 45m (depending on topography) and the deeper brown/grey sand
to a maximum depth of 60m below surface.
Results for an 18 composite mineralogical study at Nhacutse.
Sample
N000
1
N000
2
N000
3
N000
4
N000
5
N000
6
N000
7
N000
8
N000
9
N001
0
N001
1
N001
2
Mineral
Zircon
Rutile
Leucoxen
e
Altered
Ilmenite
1.3
1.1
0.3
1.3
1.1
0.3
1.2
1.1
0.3
1.2
1.3
0.3
1.4
1.2
0.3
1.3
1.0
0.3
1.2
1.2
0.3
1.4
1.0
0.3
1.0
1.2
0.3
1.3
1.2
0.3
1.2
0.9
0.3
1.2
1.1
0.4
2.3
3.1
2.1
2.6
2.6
2.6
3.0
2.3
2.4
2.8
2.7
2.6
Ilmenite
39.6
43.6
38.7
38.4
42.3
37.4
38.9
41.7
33.7
39.9
43.2
39.9
Titano-
magnetit
e
27.5
26.9
28.1
28.5
26.5
27.1
24.6
28.8
30.4
25.0
26.0
24.5
Hematite
7.5
8.6
10.2
8.6
9.5
9.8
9.7
10.2
10.2
9.5
9.1
9.3
Chromite
3.6
Magnetic
Others
1.6
3.4
1.6
3.4
3.4
3.4
2.2
2.8
1.7
3.6
2.4
3.4
1.8
2.7
1.5
3.1
2.3
3.4
1.8
2.9
1.6
3.1
2.9
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
16
Andalusit
e
Non-
magnetic
Others
11.5
7.2
7.7
10.5
8.8
9.5
11.4
7.6
11.1
11.1
8.9
9.9
3.7
3.0
3.7
3.2
3.1
5.1
4.7
2.7
4.3
3.7
3.2
5.2
Sample
N001
3
N001
4
N001
5
N001
6
N001
7
N001
8
Min Max
Ave
Mineral
Zircon
Rutile
Leucoxene
Altered
Ilmenite
1.2
1.2
0.3
2.4
1.4
1.3
0.3
3.0
1.1
0.8
0.3
2.1
1.4
1.2
0.4
3.0
1.6
1.2
0.3
2.9
1.3
1.1
0.3
1.0
0.8
0.3
1.6
1.3
0.4
1.3
1.1
0.3
2.6
2.1
3.1
2.6
0.3
45.3
Total
VHM in
HMC
StDe
v
0.1
0.1
0.0
Ilmenite
41.4
42.3
34.8
43.0
42.9
39.4
33.7
43.6
40.1
2.8
Titano-
magnetite
26.2
26.8
30.1
22.2
22.6
24.1
22.2
30.4
26.4
2.3
26.4
Hematite
8.5
9.0
9.0
7.3
7.9
7.9
7.3
10.2
9.0
0.9
Chromite
3.4
Magnetic
Others
1.6
3.3
1.5
3.4
2.7
4.2
1.8
3.4
1.7
3.2
2.7
4.2
3.3
0.3
2.6
1.5
3.4
2.0
0.6
54.7
Andalusite
11.0
8.5
11.2
11.8
11.8
12.9
7.2
12.9
10.1
1.7
Non-
magnetic
Others
2.9
2.8
4.6
3.8
3.9
4.7
2.7
5.2
3.8
0.8
Titano-
magnetit
e
Total
Non-VHM
in HMC
Results for a 9 composite mineralogical study at Poiombo.
Sample P0001 P0002 P0003 P0004 P0005 P0006 P0007 P0008 P0009 Min
Max
Ave
StDev
Mineral
Zircon
Rutile
1.1
1.1
Leucoxene
0.3
Altered
Ilmenite
2.1
1.2
1.6
0.4
2.1
1.2
1.3
0.4
6.3
1.1
1.2
0.4
4.1
1.5
1.0
0.3
5.1
0.9
1.5
0.4
5.8
1.2
0.9
0.2
6.0
1.2
1.2
0.3
6.0
1.1
1.0
0.2
5.4
0.9
0.9
0.2
1.5
1.6
0.4
1.2
1.2
0.3
2.1
6.3
4.8
0.1
0.2
0.1
1.6
45.9
Total VHM in
HMC
Ilmenite
39.4
41.4
39.4
36.8
36.7
36.1
36.8
39.6
39.8
36.1
41.4
38.4
1.9
Titano-
magnetite
Hematite
Chromite
Magnetic
Others
Andalusite
9.7
27.5
27.6
23.0
25.0
28.6
24.9
28.4
25.0
24.7
23.0
28.6
26.1
2.0
26.1
Titano-
magnetite
8.7
3.5
2.4
9.0
3.6
2.4
7.4
6.8
4.0
3.6
8.7
8.7
4.0
3.7
10.1
9.3
3.2
2.8
7.8
7.0
4.0
4.3
8.5
10.2
3.4
2.2
7.1
8.7
3.7
3.3
7.0
8.6
3.1
2.3
9.9
6.8
10.2
8.6
3.1
4.0
3.6
2.2
4.3
3.0
7.0
10.1
8.5
1.1
0.4
0.7
1.2
54.2
Total Non-
VHM in HMC
Non-
magnetic
Others
4.3
3.4
5.5
5.0
3.8
6.7
3.5
4.1
4.0
3.4
6.7
4.5
1.1
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
17
Summary locality of quantitative mineral composition of 18 composite samples from Nhacutse and Poiombo aircore
drillholes.
The composites returned average Valuable Heavy Mineral (VHM; ilmenite, altered ilmenite, leucoxene, zircon and
rutile) results of average 45.3% VHM for Nhacutse and 45.9% VHM at Poiombo. The average Titanomagnetite is
26.4% for Nhacutse and 26.1% for Poiombo.
The VHM results are higher compared to the widely spaced historic data used in the Inferred Nhacutse and Poiombo
JORC Mineral Resource estimate (from the Inferred Mineral Resource 44% VHM at Nhacutse and 39% VHM at
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
18
Poiombo. The new Nhacutse and Poiombo mineralogy data is also significantly better than found within the recently
updated JORC Mineral Resource estimate from the Koko Massava deposit,with Koko Massava showing an average
VHM for the Global resource area of 40% VHM, and 41% for an infill drilled higher grade area.
The VHM data, including the data from individual minerals in the VHM assemblage, confirmed data from previous
work with an increase in the VHM component of the HMC from west to east within the red/red-brown aeolian sand
(from average 45.8% VHM in the west to 47.5% VHM in the east of Nhacutse) and north to south as per previous
studies.
The results from this comprehensive study, combined with all other mineralogical work done by MRG on both the
Corridor Central and Corridor South licences, were used in planning of the targeted aircore drilling program focusing
on areas where better mineralogy (higher VHM%) meets high Total Heavy Mineral (THM) grades.
Drilling
The Company has completed a ~2,000m aircore drilling program at the Corridor Central and Corridor South
tenements to test targets that demonstrate high VHM content corresponding with high THM content.
The drilling program specifically targeted 11 areas with higher VHM% than found at the Koko Massava, Nhacutse
and Poiombo deposits of average 41% VHM within a High Grade Zone at Koko Massava, 45.3% VHM at Nhacutse
and 45.9% at Poiombo, where higher VHM% of the HMC meets high THM grade.
The drilling program aims to augment the existing Koko Massava, Nhacutse and Poiombo MRE resource inventory
with the discovery of smaller, higher insitu value per tonne material that may play a role in optimising potential mine
start up economics.
Analytical results from the drill program are still pending.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
19
Map showing the as-planned aircore drillholes within the Corridor Central (6620 L) and Corridor South (6621 L) Licences,
the Koko Massava, Nhacutse and Poiombo JORC Mineral Resource estimate areas in relation to the Type 1 (red/redbrown
sand) vs Type 2 (white/grey sand) lithological boundary shown in yellow.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
20
Average VHM, Zircon and Rutile from the Nhacutse and Poiombo composites.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
21
Scoping Study and Preliminary Economic Assessment
MRG has commissioned IHC Mining for an Engineering Scoping Study and Preliminary Economic Assessment (PEA)
for its Corridor Projects, focused on the Koko Massava, Nhacutse and Poiombo deposits. The Study has commenced.
The study will be augmented by metallurgical and processing test work of a 6.5t bulk sample from the Koko Massava
deposit currently being done by IHC Mining.
The key metrics of the Scoping Study include:
• Most likely scenario focused on optimising Ilmenite recovery and TiO2 quality
• Base scenario looking at approx. 20 MT/Annum
• Anticipate multiple early mine life pits of high grade sands in excess of 6% THM, with no strip (process all sand)
• Dozer pit operation with hydraulic pumping to plant and return of waste
• Optimise Rotary separation prior to Magnetic separation circuits.
• Metallurgical analysis in parallel to Scoping study and feed in results as they become available
• Anticipate improved recoveries from initial small bench top study last year
• Circa 80+% recoveries possible
• TiO2 levels in concentrate circa 50%
• Easy Slime separation with waste products returned back to mine pit
• Excellent recoveries for Non Mag circuit, whilst low in relative volume
• Low temperature roast remains viable operation to effectively remove Chrome
•
Ilmenite pricing likely to reflect current pricing dynamics for first 5 years, with longer term values reflecting historical
levels adjusted for inflationin the outer years.
• Operating costs facilitated with access to labor/power and infrastructure with future infrastructure development
potentially providing significantreductions in early mine operation – the Company is reviewing several port options
• Likely Titano-magnetite product containing 57% Fe and 14.5% TiO2 (new marketing opportunity)
•
Marao and Marruca Projects
Through grid augur drilling in 2021, MRG identified at its Marao Project three large, mineralised targets which
following the receipt of Environmental Licences for both the Marao and Marruca tenements, commenced an aircore
drilling program at the following Marao targets:
• Magonde target which has a surface footprint of >5 sq km of visually estimated (VIS EST) +3% total heavy minerals
(THM) sand, with auger hole grades as high as VIS EST 5.1% THM over 13.5m
• Mandende Target has a surface footprint of >9 sq km of VIS EST +3% THM, with auger hole grades as high as VIS
EST 5.1% THM over 13.5m
• Maduacua target has a surface footprint >6 sq km of VIS EST +3% THM and a high grade VIS EST >5% THM
portion of >3,5 sq km, with highest grade VIS EST of 6.9% THM over 13.5m
The Company commenced with a program of 10 holes for a total of 340.5m, to test depth continuity of these three
targets, which all demonstrate a north-south orientation. Aircore holes were drilled into the north, central and south
sections of each of the targets and samples were dispatched for geochemical assay in Australia. 14 Composite samples
were collected from the aircore holes and these samples were sent for mineralogical studies.
Post period, MRG has advised the Aircore Drilling program at Marao had delivered high laboratory grades, with
Magonde being established as a bery high grade target.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
22
Exploration hand auger drilling completed to date at Marao 6842, position of the Magonde, Mandende and Maduacua
Targets.
Results included:
Including 16.5 – 25.5m 9.0m @ 9.93 % THM, (highest individual 1.5m interval grade of 13.49% THM);
0 – 27.0m 27.0m @ 6.04 % THM,
0 – 42.0m 45.0m @ 3.65 % THM,
Including 33.0 – 40.5m 7.5m @ 7.12 % THM, (highest individual 1.5m interval grade of 10.63% THM);
• Magonde
▪
• Mandende
▪
• Magonde
• Maduacua
• Maduacua
0 – 37.5m 37.5m @ 3.04 % THM;
0 – 45.0m 45.0m @ 3.37 % THM; and
0 – 28.5m 28.5m @ 3.07 % THM
Significant outcomes of this target testing include:
• HMS grades of >3 % THM results were delivered from aircore holes in all 3 targets confirming again the effectiveness
of MRG’s auger drilling exploration technique
• Magonde is now established as a very high grade (>6 % THM) target from results of 22MUAC003 (Figure 4)
• Decent grades of >3 % THM mineralisation confirmed from surface up to 45m depth
• Very high grades of >10 % THM over 1.5m intersections confirmed in the Magonde and Mandende targets
Mineral assemblage investigation is currently underway for 14 composite samples taken from representative lithologies
of the 3 targets. The Company believes that Marao has the potential to deliver HMS Mineral Resources of equivalent
THM grade and higher VHM % than Koko Massava, Nhacutse and Poiombo deposits.
Market study of HMS Portfolio
During the period, MRG engaged world-leading independent consulting group TZ Minerals International Pty Ltd
(TZMI) to undertake a market study to better understand the economic potential of the different product streams of
the Company’s wholly owned Mozambique Heavy Mineral Sands ((HMS) portfolio.
TZMI, which specialises in all aspects of the mineral sands, titanium dioxide and coatings industries, has extensive
practical experience across all elements of the titanium, zirconium, TiO2 pigment and related industries.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
23
The Study will primarily focus on the MRG’s Corridor Heavy Mineral Sands Project.
Under the terms of the Study, TZMI has been engaged to carry out a work program in two phases:
Phase 1
Complete a detailed market study incorporating TZMI’s latest supply/demand projections on global sulfate ilmenite,
rutile and zircon markets. The study involves:
Introduction to the mineral sands value chain and industry structure.
•
• Overview of existing major producers and likely new projects that are currently under investigation.
• Review of supply of sulphate ilmenite, rutile and zircon, outlining the key producers/regions and a supply outlook to
2030.
• Demand analysis segmented by end-use markets and key customers by individual feedstock type and zircon. An
overview of the global TiO2 pigment sector (supply and demand) and forecasts to 2030 will be included, as this
TiO2 pigment is the dominant driver for consumption of titanium feedstocks.
• Review of sulfate ilmenite requirement for the beneficiation sector. This is becoming an important trend given the
increasing use of sulfate ilmenite as a merchant feed for titanium slag or SR manufacture. o Detailed analysis of
global supply/demand balances and indicative outlook to 2030 for sulfate ilmenite, rutile and zircon.
• Price forecasts of individual feedstock products - sulfate ilmenite, rutile as well as zircon through to 2025 and
provision of long-term inducement prices for each of the aforementioned product for the period post 2025.
Phase 2
• Product quality assessment of planned sulfate ilmenite and non-magnetic concentrate from the company’s HMS
project in Mozambique based on indicative quality obtained from bulk metallurgical testwork undertaken at IHC
Robbins.
• Primary research on the titanomagnetite market in China, covering market dynamics and pricing trends, market
segmentation and relative size.
• Commentary on market placement, key target markets and achievable pricing of the planned products (sulfate
ilmenite, titanomagnetite and non-magnetic concentrate) from the Corridor project will be provided. A co-product
credit will also be provided for the monazite/xenotime contained in the non-magnetic concentrate.
• Overview of the global concentrate market, with particular focus on cross-border volumes and pricing, as well as
introduction to the concentrate pricing methodology.
Rare Earth Elements and Uranium Applications
During the year, MRG added to its HMS portfolio Rare Earth Elements (REE) and Uranium (U) with the successful
submission of 3 Exploration Licence Applications over a high potential REE and U project in the Zambezia
Province of Mozambique.
The ELAs are situated approximately 780 km North-East of MRG’s Corridor Sands Projects and 230 km North -
Northeast of the port city of Beira.
The new highly prospective REE and U ELAs are:
• Patricio (10999 L; comprising 19,763.06 Ha)
• Fotinho (11000 L; comprising 19,865.18 Ha)
• Adriano (11002 L; comprising 19,777.14 Ha)
These ELA applications significantly expand on MRG’s exploration licence portfolio, while also diversifying the
Company’s portfolio from HMS projects to include REE and U.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
24
The Company considers the REE and U ELA’s as highly prospective for multiple reasons including:
• Airborne radiometric spectrometer data of a regional national airborne geophysical survey shows some very highly
anomalous radiometric areas over both hard-rock and recent sedimentary areas. MRG was able to apply for 3 ELA’s
on some of the highest anomalies covering 59,405.38 Ha of prospecting area in total .
• The ELA’s include both hard-rock and recent sediments, covering areas of high-grade metamorphic gneisses,
undifferentiated granites and granitoid rocks within the Mozambique Metamorphic Province and sediments from the
Mozambique Basin sediments.
• MRG’s exploration will therefore focus on enriched REE’s in the sediments sourced from the high-grade metamorphic
gneisses, undifferentiated granites and granitoid rocks; as well as exploring within the hard-rock source lithologies.
• A Report supplied to MRG by Dr Luc Antoine on historic reconnaissance exploration that took place in 2014 showing
highly anomalous results. The analytical results are from SGS South Africa Pty Ltd, from grab rock, soil and panned
Heavy Mineral Concentrate (HMC) samples, delivered Thorium (Th) grades as high as >1,000 ppm Th in a soil and
HMC sample and 559 ppm in a rock sample from within the application areas. Assays were reported from X-ray
fluorescence (XRF) analysis, while X-ray diffraction (XRD) results showed the clear presence of Monazite in the
samples from the REE area.
• Plotting all the XRF results for REE from panned HMC samples and comparing these results to known data from
USA based REE projects, shows the REE content within the Monazite have comparable values.
At this new project, MRG plans to explore a number of both hard-rock and sedimentary REE and U targets associated
with primary granitic sources in high-grade metamorphic gneiss, within the Mozambique Metamorphic Province and
the adjacent sedimentary sequences of the Mozambique Basin sediments.
The ELAs are currently under review by the relevant government departments and MRG is ready to commence field
exploration as soon as the applications are granted.
Upon grant, these REE and U projects will both grow and diversify the commodity spread of MRG’s exploration
portfolio in Mozambique.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
25
Corporate
Early in 2022, MRG completed a $1.6 million placement through the issue of 200 million fully paid ordinary shares at
$0.008 per share, together with 100 million attaching options, exercisable at $0.025 (expiring 30 June 2023) to
sophisticated and professional investors. The proceeds of the placement will facilitate scoping study/PEA at the
Corridor Sands HMS discovery and drive further HMS drilling programs.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
26
Tenements
The Tenements held by the Group at reporting date are as follows:
Project
Norrliden
Malanaset
Malanaset
Corridor Central
Corridor South
Corridor North
Linhuane
Marão
Marruca
Patricio
Fotinho
Adriano
Tenement
K nr 1
nr 100
nr 101
EL 6620
EL 6621
10779L
7423L
6842L
6846L
10999L
11000L
11002L
% Owned
10
10
10
100
100
100
100
100
100
100
100
100
Note
Application
Application
Application
Application
Application
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
27
Directors’ Report
The Directors of MRG Metals Ltd present their report together with the financial statements of the consolidated
entity, being MRG Metals Ltd (‘MRG’ or ‘the Company’) and its controlled entities, MRG Metals (Australia) Pty Ltd,
MRG Metals (Exploration) Pty Ltd, Sofala Resources Pty Ltd, Sofala Mining & Exploration Lda, Sofala Mining &
Exploration I Lda, Sofala Mining & Exploration II Lda, Sofala Mining & Exploration III Lda, Sofala Mining &
Exploration IV Lda, Sofala Mining & Exploration V Lda, Sofala Mining & Exploration VI Lda, Sofala Mining &
Exploration VII Lda, Sofala Mining & Exploration VIII Lda, Sofala Mining & Exploration IX Lda and Sofala
Mining & Exploration X Lda (‘the Group’) for the year ended 30 June 2022 and the Independent Auditor’s Report
thereon.
Director details
The following persons were directors of MRG Metals Ltd during or since the end of the financial year.
Mr Andrew Van Der Zwan
BE Chemical Engineering (hons)
Independent Non Executive Director since 07/01/2013
Chairman since 08/10/2013
Director since 14/02/2011
Andrew has over 30 years engineering and commercial experience, both local and international. He was a Non
Executive Director of Gulfx Ltd for 11 years and was employed in various senior positions within the worldwide
operations of Exxon Mobil for 17 years.
Other current directorships:
Argo Exploration Ltd (ASX: AXT) since 19/03/2013
Previous directorships (last 3 years):
JVG Global Ltd
Interests in shares:
37,906,679 shares
Mr Shane Turner
CA, Bachelor of Business
Independent Non-Executive Director
Director since incorporation 24/01/2011
Shane is a Chartered Accountant and has over 30 years financial and accounting experience. He has been employed
with KPMG, a large regional public accounting practice, operated his own public accounting practice and now is
employed with RSM Australia. He has been Company Secretary and CFO of White Rock Minerals (ASX: WRM)
since August 2015. He was a Non Executive Director and Company Secretary for Metminco (ASX: MNC) for 2
years.
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
24,482,509 shares
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
28
Mr Christopher Gregory
BSc Geology, MAusIMM, MAIG, FSEG, MAICD
Independent Non-Executive Director since 12/08/2013
Director since 12/08/2013
Chris has extensive global minerals industry experience over 38 years, at both technical and executive levels. Career
foundation of 22 years in the Asia-Pacific region with Rio Tinto. Past Vice President – Operational Geology at
Mandalay Resources (TSX: MND). Founding Partner and Director of Sasak Minerals, vended into SensOre (Private).
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
63,563,986 shares
Company secretary
Shane Turner is a Chartered Accountant and the Group Chief Financial Officer. Shane has held senior positions
with a number of professional accounting firms and has a degree in Business. Shane has held the role of Company
Secretary at White Rock Minerals (ASX: WRM) since August 2015. Shane has previously held the role of Company
Secretary for Metminco (ASX: MNC) for 2 years. He has been the Company Secretary of MRG since incorporation
on 24/01/2011.
Principal activities
During the period, the principal activities of entities within the Group were exploration and development of heavy
mineral sands within Mozambique. There have been no significant changes in the nature of these activities during the
period.
Review of operations and financial results
The operating result of the Group for the year ended was a loss of $702,340 (2021 loss $665,660). Refer detailed
Review of Operations that precedes this report.
Earnings per share (0.04) cents (2021 (0.05) cents).
Further information on the detailed operations of the Group during the year is included in the Review of Operations
Report.
Significant changes in the state of affairs
During the year, the Group carried out exploration on its Heavy Mineral Sands project in Mozambique.
During the year, the Group raised $1,600,000 from a placement in January 2022.
Dividends
There were no dividends declared or paid during the financial period.
Events arising since the end of the reporting period
Since the end of the year no further significant events have occurred other than those noted in the Review of
Operations Report.
Likely developments
Finalise Preliminary Economic Assessment comprising a Scoping Study and Financial Modelling, including Pre
Feasibility Stage Metallurgical Testwork.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
29
Continue to explore our Mozambique HMS projects to identify high grade targets.
Explore on Mozambique tenement Applications if granted.
Look for opportunities to expand our projects in Mozambique.
Pursue a sale of Norrliden.
Directors’ meetings
The number of meetings of directors held during the period and the number of meetings attended by each director
were as follows:
Name
Board meetings
Mr A Van Der Zwan
Mr S Turner
Mr C Gregory
A
6
6
6
B
6
6
6
Where:
A is the number of meetings the Director was entitled to attend
B is the number of meetings the Director attended
Movement in shares:
Opening balance at 1 July 2021
Capital Raising - placement
Issue of Ordinary Shares – corporate mandate
Less costs associated with capital raisings
Closing balance at 30 September 2022
Date
20/01/2022
20/01/2022
Issue price
(cents)
0.8
0.8
-
No of shares
1,540,669,878
200,000,000
6,388,750
-
1,747,058,628
$
26,355,247
1,600,000
51,110
(244,726)
27,761,631
Movements in options:
2022
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - corporate
mandate
Issue of options - placement
Issue of options - corporate
mandate
Closing balance at 30 September
2022
Date
No. options 1
July 2021
Issued/
(converted/
lapsed)
No. options
30
September
2022
Ex. price
(cents)
Expiry
date
04/02/2021
04/02/2021
162,000,000
9,042,000
-
-
162,000,000
9,042,000
2.5 30/06/2023
2.5 30/06/2023
30/11/2021
20/01/2022
20/01/2022
-
-
-
15,000,000
15,000,000
2.5 30/06/2023
100,000,000
19,194,375
100,000,000
19,194,375
2.5 30/06/2023
2.5 30/06/2023
171,042,000
134,194,375
305,236,375
30
Date of
issue/conver
sion
22/11/2016
22/01/2019
No. rights 1
July 2021
Issued/
(converted/
lapsed)
No. rights 30
September
2022
12,000,000
320,000,000
(12,000,000)
(320,000,000)
332,000,000 (332,000,000)
-
-
-
Expiry
date
22/11/2021
21/07/2021
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Movements in rights:
2022
Issue of rights – directors
Issue of rights – acquisition of HMS
project
Closing balance at 30 September
2022
Additional information
The results of the Group for the five years to 30 June 2022 are summarised below, together with the factors that are
considered to affect total shareholders return:
2022
2021
2020
2019
2018
Net profit/(loss) attributable to
equity holders of the parent
Closing share price at period end
Closing cash balance
$(702,340)
$0.0065
$1,017,533
$(665,660)
$0.008
$1,610,733
$(1,897,244)
$0.010
$721,248
$(4,089,395)
$0.005
$423,937
$(894,394)
$0.009
$1,724,570
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
31
Remuneration Report (audited)
The Directors of MRG Metals Ltd (‘the Group’) present the Remuneration Report prepared in accordance with the
Corporations Act 2001 and the Corporations Regulations 2001.
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 remuneration
e. Bonuses included in remuneration
f. Other information
(a) Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:
• To align rewards to business outcomes that deliver value to shareholders;
• To drive a high performance culture by setting challenging objectives and rewarding high performing
individuals; and
• To ensure remuneration is competitive in the relevant employment market place to support the attraction,
motivation and retention of executive talent.
MRG Metals Ltd has structured a remuneration framework that is market competitive and complementary to the
reward strategy of the Group.
The Board, in accordance with its charter as approved by the Board, is responsible for determining and reviewing
compensation arrangements for the directors and the executive team.
The remuneration structure that has been adopted by the Group consists of the following components:
• Fixed remuneration being annual salary; and
• Superannuation to meet statutory obligations.
The Board assesses the appropriateness of the nature and amount of remuneration on a periodic basis by reference
to recent employment market conditions with the overall objective of ensuring maximum stakeholder benefit from
the retention of a high quality Board and executive team.
The payment of bonuses, share options and other incentive payments are reviewed by the Board annually as part of
the review of executive. All bonuses, options and incentives must be linked to pre-determined performance criteria.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
32
(b) Details of remuneration
Details of the nature and amount of each element of the remuneration of each key management personnel (‘KMP’) of MRG Metals Ltd are shown in the table
below.
Director and other Key Management Personnel Remuneration
Short term employee benefits
Post-
employment
benefits
Long-term
benefits
Termination
benefits
Share-based
payments
Name
Cash salary
and fees ($)
Cash bonus
($)
Superannuation
($)
Long-term
bonus ($)
Termination
payments ($)
Performance
Rights ($) (1)
Total ($)
% of
remuneration
that is
performance
based
Non-executive directors
Mr A Van Der Zwan
Mr S Turner
Mr C Gregory
2021 Total
Non-executive directors
Mr A Van Der Zwan
Mr S Turner
Mr C Gregory
2022 Total
100,000
100,000
100,000
300,000
100,000
100,000
100,000
300,000
-
-
-
-
-
-
-
-
9,500
9,500
9,500
28,500
10,000
10,000
10,000
30,000
-
-
-
-
-
-
-
-
-
-
-
12,160
12,160
12,160
121,660
121,660
121,660
-
36,480
364,980
-
-
-
-
4,796
4,796
4,796
114,796
114,796
114,796
14,388
344,388
10%
10%
10%
10%
4%
4%
4%
4%
(1) Non-monetary benefits include Performance Rights that will lapsed as they did not vest within 5 years of grant date (22 November 2016). The amount for each Non-executive director was
$4,796 for the year based on the Monte-Carlo valuation model.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
33
(c) Service agreements
Remuneration and other terms of employment for Directors and other Key Management
Personnel are formalised in a service agreement. The major provisions of the agreements
relating to remuneration are set out below:
Base salary
Name
Mr A Van Der Zwan
50,000
Mr A Van Der Zwan - Consultant 50,000
50,000
Mr C Gregory
50,000
Mr C Gregory - Consultant
50,000
Mr S Turner - Director
50,000
Mr S Turner – Consultant
Term of agreement
Rotation per Corporations Act 2001 Nil
Nil
No fixed term
Rotation per Corporations Act 2001 Nil
No fixed term
Nil
Rotation per Corporations Act 2001 Nil
Nil
No fixed term
Notice period
Remuneration of Non-Executive Directors is not to exceed $150,000. Base fees for the 2022 financial year were
$50,000 per annum.
(d) Share based remuneration
During the year, share based remuneration comprised the share based payments expense in connection with the
performance rights granted on 22 November 2016.
(e) Bonuses included in remuneration
No short-term incentive cash bonuses were awarded as remuneration during the financial year.
(f) Other information
Loans to key management personnel (KMP) – there were no loans from the Group to KMP’s during the financial
year (2021: nil).
The Group used the accounting and taxation services of RSM Australia, an entity associated with Mr. Turner and
Mr. Turner. The amounts billed were based on normal market rates and amounted to $38,000 to Mr. Turner and
$6,870 to RSM (2021 $38,000 to Mr. Turner).
Shares held by key management personnel
The number of ordinary shares in the Company held by each of the Group’s key management personnel, including
their related parties, is set out below:
2021
Key
Management
Person
Van Der Zwan
Turner
Gregory
2022
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at
start of year
31,906,679
21,815,842
60,563,986
114,286,507
Balance at
start of year
37,906,679
24,482,509
63,563,986
125,953,174
Received
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
6,000,000
2,666,667
3,000,000
11,666,667
Received
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
-
-
-
-
Held at the
end of the
reporting
period
37,906,679
24,482,509
63,563,986
125,953,174
Held at the
end of the
reporting
period
37,906,679
24,482,509
63,563,986
125,953,174
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
34
Options held by key management personnel
The number of options to acquire shares in the Company held by each of the key management personnel of the
Group; including their related parties are set out below.
2021
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at start
of year
19,523,179
9,530,042
34,964,186
64,017,407
Deleted
on
Additions
3,000,000
1,666,667
-
4,666,667
exercise Ceased/Lapsed
(19,523,179)
(10,196,709)
(31,964,186)
(61,684,074)
(3,000,000)
(1,000,000)
(3,000,000)
(7,000,000)
Held at the
end of the
reporting
period
-
-
-
-
Year ended 30 June 2022
Nil.
Performance rights held by key management personnel
The number of performance rights held by each of the key management personnel of the Group; including their
related parties are set out below.
2021
Key
Management
Person
Van Der Zwan
Turner
Gregory
2022
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at start
of year
4,000,000
4,000,000
4,000,000
12,0000,000
Deleted
on
Additions
-
-
-
-
exercise Ceased/Lapsed
-
-
-
-
-
-
-
-
Balance at start
of year
4,000,000
4,000,000
4,000,000
12,000,000
Deleted on
Additions
-
-
-
-
exercise Ceased/Lapsed
(4,000,000)
(4,000,000)
(4,000,000)
(12,000,000)
-
-
-
-
Held at the
end of the
reporting
period
4,000,000
4,000,000
4,000,000
12,000,000
Held at the
end of the
reporting
period
-
-
-
-
End of audited remuneration report.
Environmental legislation
The Group’s projects are subject to environmental regulation under laws in Sweden and Mozambique; specifically
the Group is required to comply with terms of the grant of the tenement and all directions given to it under those
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
35
terms of the tenement which it holds. There have been no known breaches of the tenement conditions, and no such
breaches have been notified by any government agency during the period ended 30 June 2022.
Indemnities given and insurance premiums paid to auditors and officers
During the year, MRG Metals Ltd negotiated a premium to insure officers of the Group. The officers of the Group
covered by the insurance policy include all directors.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of the Group, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct
involving a wilful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for themselves or someone else to cause detriment to the Group.
Details of the amount of the premium paid in respect of the insurance policies are not disclosed as such disclosure is
prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnity any current or former officer or auditor of the Group against a liability incurred
as such by an officer or auditor.
Non-audit services
During the period, William Buck Audit (Vic) Pty Ltd, the Group’s auditors, performed no other services in addition
to their statutory audit duties.
Details of the amounts paid to the auditors of the Group, and its related practices for audit and non-audit services
provided during the year are set out in note 15 to the Financial Statements.
A copy of the auditor’s independence declaration as required under s307C of the Corporations Act 2001 is included
on page 36 of this financial report and forms part of this Directors’ Report.
Proceedings of behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking
responsibility on behalf of the Group for all or part of those proceedings.
Signed in accordance with a resolution of the directors.
Andrew Van Der Zwan
Chairman
30 September 2022
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF MRG METALS LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2022 there have been:
— no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J.C. Luckins
Director
Melbourne, 30th September 2022
Level 20, 181 William Street, Melbourne VIC 3000
+61 3 9824 8555
vic.info@williambuck.com
williambuck.com.au
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
Auditors Independence Declaration - MRG Metals Ltd - FY2022 - Signed
36
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
37
Corporate Governance Statement
MRG Metals Ltd has adopted comprehensive systems of controls and accountability as the basis for the administration
of corporate governance. To the extent that they are applicable, MRG has adopted the Corporate Governance
Principles and Recommendations, 4th Edition as published by ASX Corporate Governance Council in February 2019
and became effective for financial years commencing with the financial year ended 30 June 2022. The Corporate
Governance Statement is current at 30 June 2022 and has been approved by the Board of Directors.
ASX Corporate Governance Council
Recommendation
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1: A listed entity should have
and disclose a board charter setting out:
MRG policy
The Company's Corporate Governance framework
includes a Board Charter, which details the specific
responsibilities of the Board and identifies those
areas of authority delegated to senior executives.
(a) The respective roles and
responsibilities of its board and
management; and
(b) Those matters expressly reserved to
the board and those delegated to
management.
Recommendation 1.2: A listed entity should:
(a) Undertake appropriate checks before
appointing a director or senior
executive or putting someone forward
for election as a director; and
(b) Provide security holders with all
material information in its possession
relevant to a decision on whether or
not to elect or re-elect a director.
Recommendation 1.3: A listed entity should have
a written agreement with each director and senior
executive setting out the terms of their
appointment.
Recommendation 1.4: The company secretary of a
listed entity should be accountable directly to the
Board, through the chair, on all matters to do with
the proper functioning of the Board.
Recommendation 1.5: A listed entity should:
(a) Have and disclose a diversity policy;
(b) Through its board or a committee of
the board set measurable objectives
for achieving gender diversity in the
composition of its board, senior
executives and workforce generally;
and
(c) Disclose in relation to each reporting
period:
(1) The measurable objectives set for
that period to achieve gender
diversity;
(2) The entity’s progress towards
achieving those objectives; and
(3) Either:
The Company's Board Charter provides
that
appropriate checks should be undertaken before the
appointment of a director.
If checks reveal any information that is relevant , then
the Company will disclose that information to
Shareholders.
The Company's Board Charter provides that all
directors and senior executives, at the time of their
appointment, should execute a written agreement
that sets out the key terms of their appointment.
The Company's Board Charter sets out the role of
the Company Secretary and ensures that the
Company Secretary is accountable to the Board,
through the Chairman.
The Company's Diversity Policy requires the Board
to set out measurable objectives for achieving
gender diversity. The Diversity Policy requires the
Board to annually assess its diversity objectives and
report on the Company's progress in achieving
those objectives. At the end of each reporting
period, the Diversity Policy requires the Company
to report on its progress and set out the respective
proportion of men and women across the whole of
the Company (including their representation in key
management positions). The Company is not a
“relevant employer” under the Workplace Gender
Equality Act as it does not employ 100 or more
employees in Australia.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
ASX Corporate Governance Council
Recommendation
MRG policy
38
(A) The respective proportions of
men and women on the board,
in senior executive positions
and across the whole
workforce (including how the
entity has defined “senior
executive” for these purposes);
or
(B) If the entity is a “relevant
employer” under the
Workplace Gender Equality
Act, the entity’s most recent
“Gender Equality Indicators”,
as defined in and published
under that Act.
Recommendation 1.6: A listed entity should:
(a) Have and disclose a process for
periodically evaluating the
performance of the Board, its
committees and individual Directors;
and
(b) Disclose for each reporting period
The Company Secretary plays an integral role in
monitoring the conduct and activities of Board,
ensuring the Board has an appropriate mix of skills
and experience and reviewing individual director's
performance.
The Chairman is responsible for reviewing the
performance of the Company Secretary.
whether a performance evaluation has
been undertaken in accordance with
that process during or in respect of
that period.
Recommendation 1.7: A listed entity should:
(a) Have and disclose a process for
evaluating the performance of its
senior executives at least once every
reporting period; and
(b) Disclose for each reporting period
whether a performance evaluation has
been undertaken in accordance with
that process during or in respect of
that period.
Currently, there are no senior executives. However,
if there were, the Chairman would be responsible for
reviewing the individual performance of senior
executives.
Principle 2: Structure the board to be effective and add value
Recommendation 2.1: A listed entity should:
(a) Have a nomination committee which:
(1) Has at least three members, a
majority of whom are independent
directors; and
(2) Is chaired by an independent
director,
and disclose:
(3) The charter of the committee; and
(4) The members of the committee;
and
(5) As at the end of each reporting
period, the number of times the
committee met throughout the
period and the individual
The Company does not currently have a nomination
committee. The Board does not consider it necessary
given the size of the Company's current operations.
Board appointments will be decided by the Board as
a whole, taking into consideration the needs of the
Company at the relevant time. Where the Company
considers there is a need to review the skills and
competencies of the existing Directors and to
supplement that experience, the Company would
consider engaging appropriately qualified
third
parties to assist with the review. The Company's
Board Charter requires the Board to develop
succession plans for the future management of the
Company.
39
MRG policy
The Company's Board Charter sets out the directors'
obligations to prepare and disclose a Board skills
matrix. The skills, experience and expertise relevant
to the position of director held by each director are
disclosed in the Directors’ Report and on the
Company’s website.
The Company's Board Charter sets out the directors'
obligations in relation to conflicts of interests and the
disclosure requirements of the Board. Details of each
director are disclosed in the Directors’ Report and on
the Company’s website.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
ASX Corporate Governance Council
Recommendation
attendances of the members at
those meetings; or
(b) If it does not have a nomination
committee, disclose that fact and the
processes it employs to address board
succession issues and to ensure that
the board has the appropriate balance
of skills, knowledge, experience,
independence and diversity to enable
it to discharge its duties and
responsibilities effectively.
Recommendation 2.2: A listed entity should have
and disclose a Board skills matrix setting out the
mix of skills the Board currently has or is looking
to achieve in its membership.
Recommendation 2.3: A listed entity should
disclose:
(a) The names of the directors
considered by the board to be
independent directors:
(b) If a director has an interest, position
or relationship of the type described
in Box 2.3 of Corporate Governance
Principles and Recommendations
fourth edition but the board is of the
opinion that it does not compromise
the independence of the director, the
nature of the interest, position or
relationship in question and an
explanation of why the board is of
that opinion; and
(c) The length of service of each director.
Recommendation 2.4: A majority of the Board of a
listed entity should be independent Directors.
Recommendation 2.5: The Chair of the Board of a
listed entity should be an independent Director
and, in particular should not be the same person
as the Chief Executive Officer of the entity.
Recommendation 2.6: A listed entity should have
a program for inducting new Directors and for
periodically reviewing whether there is a need for
existing directors to undertake professional
development to maintain the skills and
knowledge needed to perform their role as
directors effectively.
All of the Company's current directors, being Chris
Gregory, Andrew Van Der Zwan and Shane Turner,
are independent directors.
Andrew Van Der Zwan, an independent director, is
the Chairman of the Board.
The Company's Board Charter requires the Board to
implement an induction procedure to assist newly
appointed directors to gain an understanding of the
Company's policies and procedures. In addition, the
Board Charter requires the Board to develop
continuing education opportunities in order to
provide the directors with the ability to enhance their
skills.
Principle 3: Instil a culture of acting lawfully, ethically and responsibly
Recommendation 3.1: A listed entity should
articulate and disclose its values.
The Board has established a Code of Conduct as to
the practices necessary to maintain confidence in the
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
ASX Corporate Governance Council
Recommendation
MRG policy
40
Company's integrity, practices necessary to take into
account the Company's legal obligations and the
reasonable expectations of shareholders and the
responsibility and accountability of individuals for
reporting and investigating reports of unethical
practices.
The Code of Conduct is available on the Company's
website.
The Company’s Whistleblower Policy is available on
the Company's website.
The board is informed of any material incidents that
occur as a result of this policy.
Recommendation 3.2: A listed entity should:
(a) Have and disclose a code of conduct
for its directors, senior executives and
employees; and
(b) Ensure that the board or a committee
of the board is informed of any material
breaches of that code.
Recommendation 3.3: A listed entity should:
(a) Have and disclose a whistleblower
policy; and
(b) Ensure that the board or a committee
of the board is informed of any
material incidents under that policy.
Recommendation 3.4: A listed entity should:
(a) Have and disclose an anti-bribery and
corruption policy; and
(b) Ensure that the board or a committee
The Company’s Anti-Bribery & Corruption Policy is
available on the Company's website.
The board is informed of any material incidents that
occur as a result of this policy.
The Company does not currently have an audit
committee. The Board does not consider it necessary
given the size of the Company's current operations.
The functions of this committee will be carried out
by the whole Board. The Company Secretary has
significant experience in financial and accounting
matters and will be primarily responsible for
monitoring and preparing the financial reports.
External resources will be commissioned where
necessary.
of the board is informed of any
material breaches of that policy.
Principle 4: Safeguard the integrity of corporate reports
Recommendation 4.1: The Board of a listed entity
should:
(a) Have an Audit Committee which:
(1) Has at least 3 members, all of whom
are non-executive Directors and a
majority of whom are independent
Directors;
(2) Is chaired by an independent
Director who is not the chair of the
Board; and
And disclose:
(3) The charter of the committee;
(4) The relevant qualifications and
experience of the members of the
committee; and
(5) In relation to each reporting period,
the number of times the committee
met throughout the period and the
individual attendances of the
members at those meetings; or
(b) If it does not have an audit committee,
disclose that fact and the processed it
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
ASX Corporate Governance Council
Recommendation
MRG policy
employs that independently verify and
safeguard the integrity of its corporate
reporting, including the processes for
the appointment and removal of the
external auditor and the rotation of the
audit engagement partner.
41
the
the
that
comply with
Recommendation 4.2: The Board of a listed entity
should, before it approves the entity’s financial
statements for a financial period, receive from its
CEO and CFO a declaration that, in their opinion,
the financial records of the entity have been
financial
properly maintained and
statements
appropriate
accounting standards and give a true and fair view
of the financial position and performance of the
entity and that the opinion has been formed on the
basis of a sound system of risk management and
is operating
internal control which system
effectively.
Recommendation 4.3: A listed entity should
disclose its process to verify the integrity of any
periodic corporate report it releases to the market
that is not audited or reviewed by an external
auditor.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1: A listed entity should have
and disclose a written policy for complying with its
continuous disclosure obligations under the ASX
listing rule 3.1.
Recommendation 5.2: A listed entity should
ensure that its board receives copies of all
material market announcements promptly after
they have been made.
Recommendation 5.3: A listed entity that gives a
new and substantive investor or analyst
presentation should release a copy of the
presentation materials on the ASX Market
Announcements Platform ahead of the
presentation.
Principle 6: Respect the rights of securityholders
Recommendation 6.1: A listed entity should
provide information about itself and its
governance to investors via its website.
The Company's process and practices comply with
the Recommendation. In particular, the CFO of the
Company provides a declaration in relation to the
Company's financial statements that, in his opinion,
the financial records of the Company have been
maintained and that the financial statements comply
with appropriate accounting standards and give a true
the financial position and
and fair view of
performance of the Company and that the opinion
has been formed on the basis of a sound system of
risk management and internal control which is
operating effectively.
Half Year and Annual accounts are reviewed or
audited by an external auditor. Quarterly activity
reports are prepared by the Company’s Geologist
and are reviewed and approved by the Board before
release to the market. Quarterly cash flow reports
are prepared by the Company’s CFO and certified
that they have been prepared in accordance with
appropriate accounting standards and are reviewed
and approved by the Board before release to the
market.
The Company has established a Continuous
Disclosure Policy which applies to all directors and
senior management.
A copy of the Continuous Disclosure Policy is
available on the Company's website.
This recommendation is satisfied. All members of
the board receive the ASX Announcement direct
from ASX once lodged.
This recommendation is satisfied.
The Company's Continuous Disclosure Policy
requires the Company to include all of its corporate
governance policies on its websites.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
ASX Corporate Governance Council
Recommendation
Recommendation 6.2 A listed entity should have
an investor relations program to facilitate effective
two-way communication with investors.
Recommendation 6.3: A listed entity should
disclose how it facilitates and encourages
participation at meetings of security holders.
42
MRG policy
the Board
should endeavour
The Company's Board Charter sets out the manner
to
in which
communicate with its shareholders and the manner
in which shareholders can make enquiries to the
Company. This includes emails to Shareholders on
its Mailing List and via Social Media.
The Company's Board Charter sets out
the
Company's goal to encourage participation at general
meetings. All Shareholders are notified of meetings.
Recommendation 6.4: A listed entity should
ensure that all substantive resolutions at a
meeting of security holders are decided by a poll
rather than a show of hands.
This recommendation is satisfied. All resolutions at
a meeting of MRG Metals’ security holders are
decided by a poll.
This recommendation is satisfied.
Given the size of the Company's current operations,
the Board has formed the view that a separate risk
committee is not necessary. The Board itself
monitors all areas of operational and financial risk
risk
and considers strategies
management arrangements on an ongoing basis. If
considered necessary, external input will be sought to
assess and counteract identified risks.
for appropriate
Recommendation 6.5: A listed entity should give
security holders the option to receive
communications from, and send communications
to, the entity and its security register
electronically.
Principle 7: Recognise and manage risk
Recommendation 7.1: The Board of a listed entity
should:
(a) Have a committee or committees to
oversee risk, each of which:
(1) Has at least 3 members, a majority
of whom are independent Directors;
(2) Is chaired by an independent
Director,
And disclose:
(3) The charter of the committee;
(4) The members of the committee; and
(5) At the end of each reporting period,
the number of times the committee
met throughout the period and the
individual attendances of the
members at those meetings; or
(b) If it does not have a risk committee
or committees that satisfy (a) above,
disclose that fact and the processed
it employs for overseeing the
entity’s risk management
framework.
Recommendation 7.2: The Board or a committee
of the Board should:
(a) review the entity’s risk management
framework at least annually to satisfy
itself that it continues to be sound
and that the entity is operating with
The Board requires that Andrew Van Der Zwan, as
Chairman undertakes a review of the Company's risk
management framework annually to ensure that the
framework continues to be sound, and disclose, in
relation to each reporting period, whether such a
review has taken place.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
ASX Corporate Governance Council
Recommendation
MRG policy
43
due regard to the risk appetite set by
the Board; and
(b) Disclose, in relation to each reporting
period, whether such a review has
taken place.
Recommendation 7.3: A listed entity should
disclose:
(a) if it has an internal audit function,
how the function is structured and
what role it performs; or
(b) if it does not have an internal audit
function, that fact and the processes
it employs for evaluating and
continually improving the
effectiveness of its governance, risk
management and internal control
processes.
Given the size of the Company's current operations,
the Board has formed the view that the appointment
of an internal auditor is not necessary. The Board
will oversee the risk management and internal control
process. If considered necessary, external input will
be sought to assess and review the effectiveness of
the Company's risk management and internal control
process.
Recommendation 7.4: A listed entity should
disclose whether it has any material exposure to
environmental or social risks and, if it does, how it
manages or intends to manage those risks.
The Company discloses various material risks to
company strategy, and how it manages those risks
within the Directors’ Report section of its Annual
Report.
The Company does not currently have a
remuneration committee. The Board does not
consider it necessary given the size of the Company's
current operations. The Board is responsible for
making recommendations regarding director and
management
The
Company's Board Charter sets out the principles that
should be considered by the Board in making
recommendations
to management
in
remuneration packages.
remuneration packages.
relation
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1: The Board of a listed entity
should:
(a) Have a remuneration committee
which:
(1) Has at least 3 members, a majority
of whom are independent Directors;
(2) Is chaired by an independent
Director,
And disclose:
(3) The charter of the committee;
(4) The members of the committee; and
(5) At the end of each reporting period,
the number of times the committee
met throughout the period and the
individual attendances of the
members at those meetings; or
(b) If it does not have a remuneration
committee, disclose that fact and
the processed it employs for setting
the level and composition of
remuneration for directors and
senior executives and ensuring that
such remuneration is appropriate
and not excessive.
44
MRG policy
the
scope of
the performance of
The Board
is aware of the need to ensure
remuneration remains competitive and consistent
with competitor companies and that remuneration
reflects the performance of the Company over time.
The directors performing an executive role are
their
remunerated based on
responsibilities and
the
Company.
Non-executive directors are paid fees within the total
as determined by shareholders.
The Company provides the requisite disclosure
regarding executive remuneration policies in its
annual report.
The Company offers at its discretion to Directors,
equity-based remuneration in the form of options to
purchase shares and performance rights. This
incentive assists in aligning their interests with those
of shareholders.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
ASX Corporate Governance Council
Recommendation
Recommendation 8.2: A listed entity should
separately disclose its policies and practices
regarding the remuneration of Non-Executive
Directors and the remuneration of Executive
Directors and other senior executives.
Recommendation 8.3: A listed entity which has an
equity-based remuneration scheme should:
(a) have a policy on whether participants
are permitted to enter into
transactions (whether through the use
of derivatives or otherwise) which
limit the economic risk of
participating in the scheme, and
(b) Disclose that policy or a summary of
it.
The Board actively monitors the Company's governance framework, related practices and overall culture.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Statement of Financial Position
As of 30 June 2022
45
Notes
Consolidated Consolidated
2021
$
2022
$
Assets
Current
Cash and cash equivalents
Other receivables
Total current assets
Non-current
Deposits
Plant & Equipment
Exploration & Evaluation
Total non-current assets
Total assets
Liabilities
Current
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserve
Retained earnings
Total equity
8
7
8
11
12
10
1,017,533
321,471
1,339,004
1,610,733
214,172
1,824,905
22,980
72,026
5,176,689
5,271,695
6,610,699
-
83,172
3,781,312
3,864,484
5,689,389
205,916
205,916
205,916
6,404,783
127,040
127,040
127,040
5,562,349
9
9
27,761,631
160,168
(21,517,016)
26,355,247
310,978
(21,103,876)
6,404,783
5,562,349
This statement should be read in conjunction with the notes to the financial statements.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
46
Statement of Profit or Loss and other
Comprehensive Income
for the year ended 30 June 2022
Interest income
Other income
Employee benefits expense
Consultants
Administration expenses
Depreciation
Foreign Exchange Gain/(Loss)
(Loss) before tax
Tax expense
(Loss) after tax
Other comprehensive income, net of tax
Total comprehensive (losses)
Earnings per share
Basic earnings per share
Earnings/(loss) from continuing operations
Diluted earnings per share
Earnings/(loss) from continuing operations
Notes
Consolidated
2022
$
Consolidated
2021
$
5
14
16
727
-
(244,388)
(5,984)
(442,168)
(19,802)
9,275
(702,340)
-
(702,340)
-
(702,340)
756
981
(264,980)
(6,364)
(396,494)
-
441
(665,660)
-
(665,660)
-
(665,660)
Cents
Cents
(0.04)
(0.05)
(0.04)
(0.05)
This statement should be read in conjunction with the notes to the financial statements.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
47
Statement of Changes in Equity
for the year ended 30 June 2022
Share
Capital
$
Reserves
$
Retained
earnings
$
Total
equity
$
Balance at 1 July 2020
23,589,237
988,932
(21,295,618)
3,282,551
Issue of share capital
Transaction costs
Options exercised
Options lapsed
Vesting of Share based payments
Loss after income tax expense for the period
Balance at 30 June 2021
2,958,346
(179,464)
130,096
-
(142,968)
-
26,355,247
-
-
-
(857,402)
179,448
-
310,978
-
-
-
857,402
-
(665,660)
(21,103,876)
2,958,346
(179,464)
130,096
-
36,480
(665,660)
5,562,349
Balance at 1 July 2021
26,355,247
310,978
(21,103,876)
5,562,349
Issue of share capital
Transaction costs
Vesting of Share based payments
Lapsed Rights/Options
Loss after income tax expense for the period
Balance at 30 June 2022
1,651,110
(244,726)
-
-
-
27,761,631
-
-
138,390
(289,200)
-
160,168
-
-
-
289,200
(702,340)
(21,517,016)
1,651,110
(244,726)
138,390
-
(702,340)
6,404,783
This statement should be read in conjunction with the notes to the financial statements.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Statement of Cash Flows
for the year ended 30 June 2022
Operating activities
Interest received
Refunds
Payments to suppliers and employees
Net cash used in operating activities
Investing activities
Payment for term deposits
Payment for exploration & evaluation
Acquisition of plant & equipment
Net cash used in investing activities
Financing activities
Proceeds from issue of capital
Payment of transaction costs
Net cash from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Effect of movements in exchange rates
Cash and cash equivalents, end of year
48
Notes
Consolidated Consolidated
2021
$
2022
$
800
-
(669,287)
(668,487)
889
981
(703,803)
(701,933)
(22,980)
(1,308,736)
(2,623)
(1,334,339)
-
(1,222,327)
(82,747)
(1,305,074)
1,651,110
(244,726)
1,406,384
(596,442)
1,610,733
3,242
1,017,533
2,936,096
(39,604)
2,896,492
889,485
721,248
-
1,610,733
17
8
This statement should be read in conjunction with the notes to the financial statements.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
49
Notes to the consolidated financial statements
Nature of operations
1
The activities of MRG Metals Ltd and its controlled entities, MRG Metals (Australia) Pty Ltd, MRG
Metals (Exploration) Pty Ltd, Sofala Resources Pty Ltd, Sofala Mining & Exploration Lda, Sofala Mining
& Exploration I Lda, Sofala Mining & Exploration II Lda, Sofala Mining & Exploration III Lda, Sofala
Mining & Exploration IV Lda, Sofala Mining & Exploration V Lda, Sofala Mining & Exploration VI
Lda, Sofala Mining & Exploration VII Lda, Sofala Mining & Exploration VIII Lda, Sofala Mining &
Exploration IX Lda and Sofala Mining & Exploration X Lda are exploration and development of heavy
mineral sands in Mozambique.
General information and statement of compliance
2
The consolidated general purpose financial statements of the Group have been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board. Compliance with
Australian Accounting Standards results in full compliance with the International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
MRG Metals Ltd is the Group's ultimate parent company. MRG Metals Ltd is a public company
incorporated and domiciled in Australia.
The consolidated financial statements for the year ended 30 June 2022 were approved and authorised for
issue by the board of directors on 30 September 2022 (see note 25).
New Accounting Standards and Interpretations adopted
3
The Group has adopted all of the new and revised Standards and Interpretations issued by the
Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for
the current reporting period. The adoption of these Accounting Standards did not have any significant
impact on the financial performance or position of the Group.
Summary of accounting policies
Overall considerations
4
4.1
The significant accounting policies that have been used in the preparation of these consolidated financial
statements are summarised below.
The consolidated financial statements have been prepared using the measurement bases specified by
Australian Accounting Standards for each type of asset, liability, income and expense. The measurement
bases are more fully described in the accounting policies below.
The financial statements are presented in Australian dollars, which is the Group’s presentation currency.
4.2 Basis of measurement
Going Concern
The financial report has been prepared on the going concern basis, which assumes continuity of normal
business activities and the realisation of assets and the settlement of liabilities in the ordinary course of
business.
50
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
The Group recorded a loss after tax of $702,340 and net cash outflows from operating and investing
activities were $2,002,826 for the year ended 30 June 2022. The Group’s financial position as at 30 June
2022 was as follows:
• The Group had available cash reserves of $1,017,533;
• The Group’s current assets of $1,339,004 exceed current liabilities of $205,916 by $1,133,088;
• The Group’s main activity is exploration and as such it does not presently have a source of operating
income, rather it is reliant on equity raisings or funds from other external sources to fund its activities.
Current forecasts indicate that cash on hand as at 30 June 2022 will not be sufficient to fully fund the
planned exploration and operational activities during the next twelve months.
The Group’s position as at 31 August 2022 was as follows:
• The Group had available cash reserves of $522,743;
• The Group continued to have a positive working capital position; and
• There have been no material changes to the Group’s liabilities or non-cancellable commitments since
30 June 2022.
These factors indicate a material uncertainty exists that may cast significant doubt on the entity’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. As a result, the Group may be required to relinquish title to
certain tenements, significantly curtail further expenditures and may have to realise its assets and extinguish
its liabilities other than in the ordinary course of business and at amounts different from those stated in
the financial report.
The Directors are confident that the Group will be able to secure sufficient funds or reduce or defer
expenditure to ensure that the Group can meet essential operational and expenditure commitments for at
least the next twelve months.
Accordingly, the financial statements for the year ended 30 June 2022 have been prepared on a going
concern basis as, in the opinion of the Directors, the Group will be in a position to continue to meet its
essential operating costs and pay its debts as and when they fall due for at least twelve months from the
date of this report.
4.3 Basis of consolidation
The Group financial statements consolidate those of the parent company and its subsidiary undertakings
drawn up to 30 June 2022. The parent controls a subsidiary if it is exposed, or has rights, to variable
returns from its involvement with the subsidiary and has the ability to affect those returns through its
power over the subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including
unrealised gains and losses on transactions between Group companies. Amounts reported in the
financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year
are recognised from the effective date of acquisition, or up to the effective date of disposal, as
applicable.
Segment reporting
4.4
Operating segments are presented using the ‘management approach’, where information is presented on
the same basis as the internal reports provided to chief operating decision makers, being the Board of
Directors. The Board of Directors are responsible for the allocation of resource to operating segments
and assessing their performance.
51
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Revenue
4.5
Interest income is recognised on an accrual basis using the effective interest method.
Operating expenses
4.6
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their
origin.
Exploration and evaluation
4.7
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a
stage that permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the
year in which the decision to abandon the area is made.
A regular review for impairment is undertaken of each area of interest to determine the appropriateness
of continuing to carry forward costs in relation to that area of interest.
Income taxes
4.8
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not
recognised in other comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian
Taxation Office (ATO) and other fiscal authorities relating to the current or prior reporting periods, that
are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or
loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have
been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the
carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on
the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related
transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary
differences associated with investments in subsidiaries and joint ventures is not provided if reversal of
these temporary differences can be controlled by the Group and it is probable that reversal will not
occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to
apply to their respective period of realisation, provided they are enacted or substantively enacted by the
end of the reporting period. Deferred tax liabilities are always provided for in full.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised
against future taxable income.
Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off
current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in
profit or loss, except where they relate to items that are recognised in other comprehensive income (such
as the revaluation of land) or directly in equity, in which case the related deferred tax is also recognised
in other comprehensive income or equity, respectively.
52
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Cash and cash equivalents
4.9
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term,
highly liquid investments that are readily convertible into known amounts of cash and which are subject
to an insignificant risk of changes in value.
Other Receivables
4.10
Other receivables are recognised at amortised cost, less any impairment.
Trade Payables
4.11
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial period and which are unpaid. Due to their short term nature they are measured at amortised
cost and not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Earnings per share
4.12
Basic earnings per share is calculated by dividing the profit attributable to the owners of MRG Metals
Ltd, excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary
shares issued during the financial period.
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
Equity
4.13
Share capital represents the nominal value of shares that have been issued. Any transaction costs
associated with the issuing of shares are deducted from share capital, net of any related income tax
benefits.
Retained earnings include all current and prior period retained profits.
4.14
The Group provides post employment benefits through various accumulation funds.
Post employment benefits
An accumulation fund is a superannuation fund under which the Group pays fixed contributions into an
independent entity. The Group has no legal or constructive obligations to pay further contributions
after its payment of the fixed contribution. Contributions to the funds are recognised as an expense in
the period that relevant employee services are received.
Provisions, contingent liabilities and contingent assets
4.15
Provisions are recognised when present obligations as a result of a past event will probably lead to an
outflow of economic resources from the Group and amounts can be estimated reliably. Timing or
amount of the outflow may still be uncertain. Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on
the most reliable evidence available at the reporting date, including the risks and uncertainties associated
with the present obligation. Where there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering the class of obligations as a whole.
Provisions are discounted to their present values, where the time value of money is material.
All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
Possible inflows of economic benefits to the Group that do not yet meet the recognition criteria of an
asset are considered contingent assets.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
53
Goods and Services Tax (GST)
4.16
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables
in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST
components of investing and financing activities, which are disclosed as operating cash flows.
4.17
Significant management judgement in applying accounting policies
The following are significant management judgements in applying the accounting policies of the Group
that have the most significant effect on the financial statements.
Deferred tax assets/Tax losses
The assessment of the probability of future taxable income in which deferred tax assets can be utilised is
based on the Group's latest approved budget forecast, which is adjusted for significant non-taxable
income and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in the
numerous jurisdictions in which the Group operates are also carefully taken into consideration. If a
positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it
can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition
of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed
individually by management based on the specific facts and circumstances.
The Group has not recognised a deferred tax asset with regard to unused tax losses and other temporary
differences, as it has not been determined whether the Company will generate sufficient taxable income
against which the unused tax losses and other temporary differences can be utilised in the foreseeable
future.
Estimation uncertainty
When preparing the financial statements management undertakes a number of judgements, estimates and assumptions
about recognition and measurement of assets, liabilities, income and expenses.
The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom
equal the estimated results.
Information about significant judgements, estimates and assumptions that have the most significant effect on
recognition and measurement of assets, liabilities, income and expenses is provided below.
Share based payments
Share based payments involve assumptions made by management regarding the date of recognition and application of
market price. Refer Note 4.22.
Exploration and evaluation assets
At each reporting date, the directors review the carrying amount of each area of interest, with reference to the
indicators of impairment outlined in AASB 6 Exploration for and Evaluation of Mineral Resources.
One or more of the following facts and circumstances indicate that an entity should test exploration and evaluation
assets for impairment (the list is not exhaustive):
(a)
the period for which the entity has a right to explore in the specific area has expired during the period or
will expire in the near future and is not expected to be renewed.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
54
(b)
(c)
(d)
substantive expenditure on further exploration for and evaluation of mineral resources in the specific area
is neither budgeted nor planned.
exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the entity has decided to discontinue such
activities in the specific area.
sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the
carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful
development or by sale.
4.18 Other intangible assets
Recognition of other intangible assets
When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the
proceeds and the carrying amount of the asset, and is recognised in profit or loss within other income or other
expenses.
4.19 Impairment testing of goodwill, other intangible assets and property, plant and equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent
cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are
tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit
from synergies of the related business combination and represent the lowest level within the Group at which
management monitors goodwill.
All individual assets or cash-generating units 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 or cash-generating unit's carrying amount
exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To determine the
value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a
suitable interest rate in order to calculate the present value of those cash flows. The data used for impairment testing
procedures are directly linked to the Group's latest approved budget, adjusted as necessary to exclude the effects of
future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating
unit and reflect management’s assessment of respective risk profiles, such as market and asset-specific risks factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-
generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.
With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss
previously recognised may no longer exist. An impairment charge is reversed if the cash-generating unit’s recoverable
amount exceeds its carrying amount.
4.20 Property, plant & equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the asset. Any gains and losses on disposal of an
item of property, plant and equipment are recognised in profit or loss.
Depreciation
(ii)
Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item
of property, plant and equipment.
The estimated useful lives for the current and comparative periods are as follows:
•
•
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
plant and equipment 2-20 years
4-20 years
motor vehicles
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
55
4.21 Asset held for sale
When the Group intends to sell a non-current asset or a group of assets (a disposal group), and if sale within 12
months is highly probable, the asset or disposal group is classified as ‘held for sale’ and presented separately in the
statement of financial position.
Assets classified as ‘held for sale’ are measured at the lower of their carrying amounts immediately prior to their
classification as held for sale and their fair value less costs to sell. Once classified as ‘held for sale’, the assets are not
subject to depreciation or amortization.
Any profit or loss arising from the sale or re-measurement of discontinued operations is presented as
part of a single line item, profit or loss from discontinued operations.
If an asset held for sale has not been sold within 12 months and a sale is not certain, then an impairment is charged
against that asset.
4.22 Share based payments
All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit
to share option reserve. If vesting periods or other vesting conditions apply, the expense is allocated over the
vesting period, based on the best available estimate of the number of share options expected to vest.
In addition equity settled share based payment transactions, the company shall measure the goods or services
rendered and the corresponding increase in equity, directly at fair value of the goods or services received, unless
that fair value cannot be estimated reliably.
The Company issued shares and options to Managers in November 2021 after approval at the Company’s
Annual General Meeting in consideration for corporate advisory services, calculated on the market value of the
listed MRQOC Options (15,000,000 MRQOC options @ $0.004).
The Company issued shares and options to Managers in consideration for corporate advisory services,
calculated on the same basis as the Placement in January 2022 (6,388,750 shares @ $0.008 and 16,000,000
MRQOC options @ $0.004).
4.23 Foreign currency translation
The financial statements are presented in Australian dollars, which is Group's presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
5
Employee benefit expense
Employee benefit expense incurred
Employee benefit expense capitalised in exploration assets
Consolidated
2022
$
344,388
(100,000)
244,388
Consolidated
2021
$
364,980
(100,000)
264,980
Segment reporting
6
The Group is organised into one operating segment, which is the exploration and development of heavy mineral
sands within Mozambique. This operating segment is based on the internal reports that are reviewed and used by the
Board of Directors (who are identified as the Chief Operating Decision Makers) in assessing performance and in
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
56
determining the allocation of resources. Non current assets excluding financial instruments are located in
Mozambique.
7
Other receivables
GST receivables
Interest Receivable
Mozambique VAT receivable
Other receivables
The receivables noted above are not impaired nor past due.
Cash and cash equivalents
8
Cash and cash equivalents include the following components:
Cash at bank and in hand:
- Australian dollars
- United States dollars
- Mozambique meticals
Short term deposits (Australian dollars) (a)
Cash and cash equivalents
Consolidated
2022
$
31,715
97
289,659
321,471
Consolidated
2021
$
12,716
170
201,286
214,172
Consolidated
2022
$
1,003,355
13,786
392
-
1,017,533
Consolidated
2021
$
1,581,149
2,621
4,188
22,775
1,610,733
Short term deposits (Australian dollars) (a) 22,980 -
The effective interest rate on short-term bank deposits is 0.2% (2021: 0.9%); these deposits have an average maturity
of 365 days.
(a) The $22,980 is restricted cash as it is security for Company credit cards.
Equity
Share capital & reserves
9
9.1
The share capital of MRG Metals Ltd consists of fully paid ordinary shares and options, the shares do not have a par
value. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the
shareholders' meeting of MRG Metals Ltd.
Details
SHARES
Total at 1 July 2020
Additions during the year
Costs of raising
Total share capital at 30 June 2021
OPTIONS RESERVE
Total at 1 July 2020
Additions during the year
Consolidated
2021
$
23,589,237
3,088,442
(322,432)
26,355,247
Quantity
1,234,151,639
306,518,239
-
1,540,669,878
680,672,784
305,508,667
857,402
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
57
Exercised during the year
Lapsed during the year
Total issued options at 30 June 2021
(13,009,572)
(802,129,879)
171,042,000
(857,402)
-
SHARE BASED PAYMENTS
RESERVE
Total at 1 July 2020
Additions during year (i)
Vesting expense – performance rights
Total reserve at 30 June 2021
PERFORMANCE RIGHTS
Total at 1 July 2020
Additions during the year
Deletions during the year
Total rights at 30 June 2021
SHARE CAPITAL & RESERVES
(i)
price on the ASX grant date.
131,530
142,968
36,480
310,978
-
-
-
26,666,225
332,000,000
-
-
332,000,000
The fair value of options granted to lead managers as a share-based payment is based on the listed
Details
SHARES
Total at 1 July 2021
Additions during the year
Costs of raising
Total share capital at 30 June 2022
OPTIONS RESERVE
Total at 1 July 2021
Additions during the year
Total issued options at 30 June 2022
SHARE BASED PAYMENTS
RESERVE
Total at 1 July 2021
Vesting expense
Lapsed Rights/Options
Total reserve at 30 June 2022
PERFORMANCE RIGHTS
Total at 1 July 2021
Forfeited
Total rights at 30 June 2022
Consolidated
2022
$
26,355,247
1,651,110
(244,726)
27,761,631
-
-
-
310,978
138,390
(289,200)
160,168
-
-
Quantity
1,540,669,878
206,388,750
-
1,747,058,628
171,042,000
134,194,375
305,236,375
332,000,000
(332,000,000)
-
SHARE CAPITAL & RESERVES
27,921,799
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
(i) Movements in issued capital:
Opening balance at 1 July 2020
Capital Raising - placement
Issue of Ordinary Shares – corporate mandate
Capital Raising - placement
Issue of Ordinary Shares – options conversion
Issue of Ordinary Shares – options conversion
Issue of Ordinary Shares – options conversion
Issue of Ordinary Shares – options conversion
Capital Raising - placement
Issue of Ordinary Shares – corporate mandate
Less costs associated with capital raisings
Closing balance at 30 June 2021
Opening balance at 1 July 2021
Capital Raising - placement
Issue of Ordinary Shares – corporate
mandate
Less costs associated with capital raisings
Closing balance at 30 June 2022
(ii) Movements in options:
58
Date
18/09/2020
18/09/2020
24/11/2020
24/11/2020
10/12/2020
11/12/2020
23/12/2020
04/02/2021
04/02/2021
Date
20/01/2022
20/01/2022
Issue price
(cents)
0.6
0.6
0.6
1.0
1.0
1.0
1.0
1.3
1.3
-
Issue price
(cents)
0.8
0.8
-
No of shares
1,234,151,639
110,000,000
5,800,000
6,666,667
1,580,085
1,601,809
7,000,000
2,827,678
162,000,000
9,042,000
-
1,540,669,878
No of shares
1,540,669,878
200,000,000
6,388,750
-
1,747,058,628
$
23,589,237
660,000
34,800
40,000
15,801
16,018
70,000
28,277
2,106,000
117,546
(322,432)
26,355,247
$
26,355,247
1,600,000
51,110
(244,726)
27,761,631
Date
No. options 1
July 2020
Issued/
(converted/
lapsed)
No. options
30 June 2021
Ex. price
(cents)
Expiry
date
72,978,404
118,968,298
69,551,582
15.0 31/08/2020
1.0 20/12/2020
1.0 20/12/2020
2021
Issue of options – entitlement issue
Issue of options – entitlement issue
Issue of options – entitlement issue
shortfall
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - placement
Issue of options - acquisition of
HMS project
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - placement
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - placement
Options lapsed
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - placement
Options conversion
Options conversion
15/09/2015
23/01/2018
25/01/2018
72,978,404
118,968,298
69,551,582
12/02/2018
12/02/2018
86,000,000
5,000,000
17/04/2018
22/01/2019
30,000,000
90,000,000
14/08/2019
08/10/2019
94,500,000
16,237,000
28,500,000
62,500,000
3,437,500
08/10/2019
10/12/2019
10/12/2019
13/02/2020
31/08/2020
18/09/2020
18/09/2020
24/11/2020
24/11/2020
10/12/2020
-
-
-
-
-
-
-
-
-
-
-
-
86,000,000
5,000,000
30,000,000
90,000,000
94,500,000
16,237,000
28,500,000
62,500,000
3,437,500
1.0 20/12/2020
1.0 20/12/2020
1.0 20/12/2020
1.0 20/12/2020
1.0 20/12/2020
1.0 20/12/2020
1.0 20/12/2020
1.0 20/12/2020
1.0 20/12/2020
1.0 20/12/2020
31/08/2020
1.0 20/12/2020
1.0 20/12/2020
1.0 20/12/2020
20/12/2020
20/12/2020
3,000,000
-
-
-
-
(72,978,404)
110,000,000
17,800,000
3,000,000
(72,978,404)
110,000,000
17,800,000
-
-
-
6,666,667
(1,580,085)
(1,601,809)
6,666,667
(1,580,085)
(1,601,809)
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
59
Options conversion
Options conversion
Options lapsed
Issue of options - placement
Issue of options - corporate
mandate
Closing balance at 30 June 2021
2022
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - corporate
mandate
Issue of options - placement
Issue of options - corporate
mandate
Closing balance at 30 June 2022
11/12/2020
23/12/2020
20/12/2020
04/02/2021
04/02/2021
Date
04/02/2021
04/02/2021
30/11/2021
20/01/2022
20/01/2022
-
-
-
-
-
(7,000,000)
(2,827,679)
(729,151,475)
162,000,000
9,042,000
(7,000,000)
(2,827,678)
(729,151,475)
162,000,000
9,042,000
20/12/2020
20/12/2020
20/12/2020
2.5 30/06/2023
2.5 30/06/2023
680,672,784 (509,630,784)
No. options 1
July 2021
162,000,000
9,042,000
Issued/
(converted)
-
-
171,042,000
No. options
30 June 2022
162,000,000
9,042,000
Ex. price
(cents)
Expiry
date
2.5 30/06/2023
2.5 30/06/2023
-
-
-
15,000,000
15,000,000
2.5 30/06/2023
100,000,000
19,194,375
100,000,000
19,194,375
2.5 30/06/2023
2.5 30/06/2023
171,042,000
134,194,375
305,236,375
(iii) Movements in rights:
2021
Issue of rights - directors
Issue of rights – acquisition of HMS
project
Closing balance at 30 June 2021
Date of
issue/conver
sion
22/11/2016
22/01/2019
No. rights 1
July 2020
Issued/
(converted)
No. rights 30
June 2021
Expiry
date
12,000,000
320,000,000
332,000,000
12,000,000
320,000,000
332,000,000
-
-
2022
Issue of rights - directors
Issue of rights – acquisition of HMS
project
Closing balance at 30 June 2022
Date of
issue/conver
sion
22/11/2016
22/01/2019
No. rights 1
July 2021
Issued/
(converted/
lapsed)
No. rights 30
June 2022
12,000,000
320,000,000
(12,000,000)
(320,000,000)
332,000,000 (332,000,000)
-
-
-
Dividends
9.2
No dividends were declared or paid during the year. There are no franking credits outstanding at period end.
Trade and other payables
10
Trade and other payables recognised in the Statement of Financial Position can be analysed
as follows:
Current
-
- Other payables and accrued expenses
Trade payables
Consolidated
2022
$
161,055
44,861
205,916
Consolidated
2021
$
75,728
51,312
127,040
22/12/2021
21/07/2021
Expiry
date
22/12/2021
21/07/2021
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
11
Plant and equipment
Plant & Equipment
Accumulated Depreciation
12
Exploration and evaluation assets
Cost as at 1 July 2020
Other exploration costs
Cost as at 30 June 2021
Cost as at 1 July 2021
Other exploration costs
Cost as at 30 June 2022
60
Consolidated
2022
$
100,272
(28,246)
72,0263
Consolidated
2021
$
88,952
(5,780)
83,172
Consolidated
2021
$
2,396,058
1,385,254
3,781,312
Consolidated
2022
$
3,781,312
1,395,377
5,176,689
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful
development and commercial exploitation, or alternatively, sale of the respective areas of interest. The
relinquishments represent the capitalised amounts written off during the period when ownership of the tenements is
abandoned.
Asset held for sale
13
The Norrliden project is currently being marketed for sale. The Norrliden asset was previously recognised as a non-
current exploration and evaluation asset. The asset held for sale is recognised at lower of the carrying value and fair
value less cost to sell.
Non-current assets held for sale
Less Impairment (a)
2022
608,596
(608,596)
-
2021
608,596
(608,596)
-
(a) Refer Note 4.21. If an asset held for sale has not been sold within 12 months and a sale is not certain, then an
impairment is charged against that asset. The Company took the view that as a sale was not achieved in the last
12 months, then an impairment was made against the asset.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
61
Income tax expense
14
The relationship between the expected tax expense based on the tax rate of MRG Metals Ltd and the reported tax
expense in profit or loss can be reconciled as follows, also showing major components of tax expenses:
Profit/(loss) before tax
Expected tax expense/(benefit) @ 25% (2021 26%)
Adjustment for non-deductible expenses:
- Movement in accruals
-
Impairment of asset held for sale
Current period tax (loss) not recognised
Deferred tax expense:
Temporary differences
-
- Unused tax losses
Deferred tax assets not recognised
Consolidated
2022
$
(702,340)
(175,585)
Consolidated
2021
$
(665,660)
(173,072)
875
-
(174,710)
(174,710)
875
174,710
175,585
(910)
-
(173,982)
(173,982)
(910)
173,982
173,072
The above potential tax benefit has not been recognised as the recovery is uncertain.
The carry forward tax losses at 30 June 2022 were $18,736,424.
The taxation benefit of tax losses and temporary differences not brought to account will only be obtained if:
-
-
-
the Group derives future assessable income of a nature and an amount sufficient to enable the benefit from
the deductions for the losses to be realised;
the Group continues to comply with the conditions for deductibility imposed by law; and
no change in tax legislation adversely affects the Group in realising the benefits from deducting the tax losses.
15
Auditor remuneration
Audit services
- Audit and review of the financial reports – Grant Thornton
- Audit financial reports – William Buck
Audit services remuneration
Other services
Total Auditor’s remuneration
Consolidated
2022
$
Consolidated
2021
$
-
34,500
34,500
-
34,500
21,386
20,000
41,386
-
41,386
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
62
Earnings per share
16
The weighted average number of shares for the purposes of diluted earnings per share can be
reconciled to the weighted average number of ordinary shares used in the calculation of basic
earnings per share as follows:
Loss after income tax
Weighted average number of shares used in basic earnings per share
Weighted average number of shares used in diluted earnings per share
Earnings Per Share
Diluted Earnings Per Share
Consolidated
2022
$
(702,340)
1,632,272,556
1,632,272,556
Consolidated
2021
$
(665,660)
1,404,958,320
1,404,958,320
(0.04) cents
(0.04) cents
(0.05) cents
(0.05) cents
The rights to options held by option holders have not been included in the weighted average number of ordinary
shares for the purposes of calculating diluted EPS as they do not meet the requirements for the inclusion in AASB
133 “Earnings per Share”. The rights to options are non-dilutive as the Group is loss generating.
17
Reconciliation of cash flows from operating activities
Cash flows from operating activities
(Loss) after income tax expense for the year
Cash flows excluded from loss attributable to operating activities
Non cash flows in loss:
Depreciation
Foreign exchange (gain)/loss
Vesting charges for share based payments transactions
Change in other assets and liabilities:
(Increase)/decrease in trade and other receivables
Increase/(decrease) trade and other payables
Net cash used in operating activities
Related party transactions
18
The Parent entity is MRG Metals Ltd.
Consolidated
2022
$
Consolidated
2021
$
(702,340)
(665,660)
19,802
(9,275)
138,390
(107,299)
(7,765)
(668,487)
-
(441)
36,480
(106,468)
34,156
(701,933)
MRG Metals Ltd owns 100% of the shares of MRG Metals (Australia) Pty Ltd. (2021 100%)
MRG Metals Ltd owns 100% of the shares of MRG Metals (Exploration) Pty Ltd. (2021 100%)
MRG Metals Ltd owns 100% of the shares of Sofala Resources Pty Ltd. (2021 100%)
Sofala Resources Pty Ltd owns 99% of the shares of Sofala Mining & Exploration Lda. (2021 99%), Sofala Mining &
Exploration I Lda, Sofala Mining & Exploration II Lda, Sofala Mining & Exploration III Lda, Sofala Mining &
Exploration IV Lda, Sofala Mining & Exploration V Lda, Sofala Mining & Exploration VI Lda, Sofala Mining &
Exploration VII Lda, Sofala Mining & Exploration VIII Lda, Sofala Mining & Exploration IX Lda and Sofala Mining
& Exploration X Lda (Mozambique Companies).
Sofala Mining & Exploration Limitada, Sofala Mining & Exploration I Lda, Sofala Mining & Exploration II Lda,
Sofala Mining & Exploration III Lda and Sofala Mining & Exploration IV Lda owns the HMS tenements.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
63
Sofala Mining & Exploration V Lda, Sofala Mining & Exploration VI Lda, Sofala Mining & Exploration VII Lda,
Sofala Mining & Exploration VIII Lda, Sofala Mining & Exploration IX Lda and Sofala Mining & Exploration X Lda
were set up during the year in preparation should there be future granting of HMS applications as Mozambique law
requires a separate company for each licence application.
MRG Metals (Australia) Pty Ltd and MRG (Exploration) Pty Ltd have no Assets or Liabilities.
The Group's related parties include its key management and others as described in Note 18.2.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were
given or received.
Transactions with related parties
18.1
The following transactions occurred with related parties:
Payment for goods and services:
The Group used the accounting and taxation services of RSM Australia, an entity associated with Mr. Turner and Mr.
Turner. The amounts billed were based on normal market rates and amounted to $38,000 to Mr. Turner and $6,870
to RSM (2021 $38,000 to Mr. Turner).
Receivable from and payable to related parties
There were no trade receivable from or trade payables to related parties.
Loans to/from related parties
There were no loans to or from related parties at the reporting date.
Terms and conditions
All transactions are made on normal commercial terms and conditions and at market rates.
18.2 Transactions with key management personnel
Key management of the Group are the Board of Directors. Key management personnel remuneration is set out in the
Remuneration Report in the Director’s Report.
Short term benefits
Post employment benefits
Share based payments
Total KMP remuneration
Consolidated
2022
$
300,000
30,000
14,388
344,388
Consolidated
2021
$
300,000
28,500
36,480
364,980
Equity instruments held by KMP
18.3
The number of shares in the Company by each of the key management personnel of the Group, including their
related parties are set out below:
Year ended 30 June 2021
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at
start of year
31,906,679
21,815,842
60,563,986
114,286,507
Received
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
6,000,000
2,666,667
3,000,000
11,666,667
Held at the
end of the
reporting
period
37,906,679
24,482,509
63,563,986
125,953,174
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Year ended 30 June 2022
64
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at
start of
year
37,906,679
24,482,509
63,563,986
125,953,174
Received
on
exercise
-
-
-
-
Held at the
end of the
reporting
period
37,906,679
24,482,509
63,563,986
125,953,174
Other
changes
-
-
-
-
Additions
-
-
-
-
The number of options in the Company by each of the key management personnel of the Group, including their
related parties are set out below:
Year ended 30 June 2021
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at
start of year
19,523,179
9,530,042
34,964,186
64,017,407
Deleted
on
Additions
3,000,000
1,666,667
-
4,666,667
exercise Ceased/Lapsed
(19,523,179)
(10,196,709)
(31,964,186)
(61,684,074)
(3,000,000)
(1,000,000)
(3,000,000)
(7,000,000)
Held at
the end
of the
reporting
period
-
-
-
-
Year ended 30 June 2022
Nil.
Performance rights held by key management personnel
The number of performance rights held by each of the key management personnel of the Group; including their related
parties are set out below.
Year ended 30 June 2021
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at start
of year
4,000,000
4,000,000
4,000,000
12,0000,000
Deleted
on
Additions
-
-
-
-
exercise Ceased/Lapsed
-
-
-
-
-
-
-
-
Held at the
end of the
reporting
period
4,000,000
4,000,000
4,000,000
12,000,000
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Year ended 30 June 2022
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at
start of year
4,000,000
4,000,000
4,000,000
12,000,000
Deleted on
Additions
-
-
-
-
exercise Ceased/Lapsed
(4,000,000)
(4,000,000)
(4,000,000)
(12,000,000)
-
-
-
-
65
Held at the
end of the
reporting
period
-
-
-
-
19
There were no contingent assets or liabilities (2021 Nil).
Contingent assets and contingent liabilities
20
Commitments for expenditure
Exploration and evaluation:
Within 12 months
After 12 months but not later than 5 years
2022
$
2021
$
270,736
1,082,944
421,708
1,686,832
Exploration and evaluation:
In order to maintain current rights of tenure for exploration tenements, the Group is required to meet the minimum
exploration requirements of the Mining Department. The Group holds four tenements in Mozambique, each year the
Mozambique mining regulations require companies to submit exploration programs which indicate the expected
mining expenditure for the year.
Mozambique New Mining Law Regulations require a minimum spend of 60% of the exploration program submitted
for the year. The commitment for FY23 to FY26 is the Group’s estimated tenement expenses to be incurred for each
licence at a rate of 60%, which is expected to be the best estimate of the required commitment.
21
Financial instrument risk
Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The main types of risks are market risk
(including interest rate risk), credit risk and liquidity risk.
The Group's risk management is carried out by the board of directors and focuses on actively securing the Group's
short to medium-term cash flows by minimising the exposure to financial markets.
The Group does not engage in the trading of financial assets for speculative purposes nor does it write options. The
most significant financial risks to which the Group is exposed are described below.
Foreign currency sensitivity
21.1
The Group's transactions during the year have been carried out in Australian Dollars, United States
Dollars (USD), and Mozambican Meticals (MZN).
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
66
There is a risk that changes in foreign exchange rates will affect the Group’s income or amounts to be
paid or received arising from its financial obligations. The Group’s objective of foreign currency risk
management is to manage and control foreign currency risk exposures within acceptable parameters, while
optimising the return.
The Group’s exposure to foreign currency risk relates primarily to foreign exchange rates applicable to the
Group’s foreign currency denominated obligations recognised in the balance sheet.
Foreign currency risk refers to the risk that the value of a financial commitment, recognised asset or liability
will fluctuate due to changes in foreign currency rates. The primary foreign currency exposure is to the
MZN and USD.
Management monitors the exposure to foreign exchange risk on an ongoing basis by regularly reviewing
forward foreign exchange rates applicable to its foreign currency denominated obligations.
The Group’s exposure to assets and liabilities to MZN at 30 June 2022 is set out below (Australian dollar
equivalents):
Reported exchange rate
Cash at Bank
Trade and other payables
Total exposure
30 June 2022
44.16
392
(4,861)
(4,469)
The Group’s exposure to assets and liabilities to USD at 30 June 2022 is set out below (Australian dollar
equivalents):
Reported exchange rate
Cash at Bank
Total exposure
30 June 2022
0.6889
13,786
13,786
The table below shows the effect on profit after income tax expense and total equity from MZN currency
exposures, had the rates been 10% higher or lower than the year end rate. Whilst directors cannot predict
movements in foreign currency rates, a sensitivity of 10% is considered reasonable taking in to account
the current level of exchange rates and the volatility observed on a historical basis.
Foreign exchange rates - 10%
Foreign exchange rates + 10%
30 June 2022
Increase/(Decrease)
in profit after
income tax
(447)
447
Increase/(Decrease)
in Equity
(447)
447
Interest rate sensitivity
21.2
The Group's only exposure to interest rate risk is in relation to deposits held. Deposits are held with
reputable banking financial institutions.
At 30 June 2022, there was $22,980 on deposit at 0.2% (Note 8).
An increase/decrease by 30% or 0.0006 basis points would have a favourable/adverse effect on profit
for the year of $14. The percentage change is based on the expected volatility of interest rates using
market data and analysts’ forecasts.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
67
Credit risk analysis
21.3
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is
exposed to minimal credit risk as its only exposure is to interest receivable and GST refunds.
Liquidity risk analysis
21.4
Liquidity risk is that the Group might be unable to meet its obligations. The Group manages its liquidity
needs by monitoring actual and forecast cash inflows and outflows due in day-to-day business.
The Group's working capital, being current assets less current liabilities, at 30 June 2022 was $1,133,088.
The Directors are confident that the Group will be able to secure sufficient funds or reduce or defer
expenditure to ensure that the Group can meet essential operational and expenditure commitments for at
least the next twelve months.
Based on this, the directors are satisfied the Group will have sufficient funds to pay its debts as and
when they fall due.
As at 30 June, the Group's non-derivative financial liabilities have contractual maturities (including
interest payments where applicable) as summarised below:
30 June 2021
Trade and other payables
Total
Current
Non current
Within 6
months
$
127,040
127,040
6 to 12
months
$
-
-
1 to 5 years
$
-
-
Later than 5
years
$
-
-
Current
Non current
30 June 2022
Trade and other payables
Total
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying
values of the liabilities at the reporting date. Unless otherwise stated, the carrying amounts of financial
instruments reflect their fair values due to their short term nature.
6 to 12
months
$
-
-
1 to 5 years
$
-
-
Later than 5
years
$
-
-
Within 6
months
$
205,916
205,916
Capital risk management
22
The Group’s objectives when managing capital is to ensure the Group's ability to continue as a going
concern so that it can provide an adequate return to shareholders.
The Group would look to raise capital when an opportunity to invest in a business, company or tenement is
seen as value adding.
Post-reporting date events
23
There are no other events occurring since the end of the year that have, or may, significantly affect the
Group’s operations, results of those operations or the state of affairs of the Group.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Parent entity information
24
Information relating to MRG Metals Ltd (‘the parent entity’)
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Reserves
Retained earnings
Statement of comprehensive income
Profit/(loss) for the period
Total comprehensive income
68
2022
$
2021
$
1,339,004
6,610,699
205,916
205,916
1,824,905
5,689,389
127,040
127,040
27,761,631
160,168
(21,517,016)
6,404,783
26,498,215
168,010
(21,103,876)
5,562,349
(702,340)
(702,340)
(665,660)
(665,660)
Authorisation of financial statements
25
The consolidated financial statements for the year ended 30 June 2022 were approved by the board of
directors on 30 September 2022.
Andrew Van Der Zwan
Chairman
Shane Turner
Director/Secretary
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Directors’ declaration
69
1.
In the opinion of the directors of MRG Metals Ltd:
a
the consolidated financial statements and notes of MRG Metals Ltd are in accordance with the
Corporations Act 2001, including
i.
giving a true and fair view of its financial position as at 30 June 2022 and of its performance for
the financial period ended on that date; and
ii.
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
b there are reasonable grounds to believe that MRG Metals Ltd will be able to pay its debts as and
when they become due and payable.
2. The directors have been given the declarations required by Section 295A of the Corporations Act
2001 from the chief executive officer and chief financial officer for the financial period ended 30 June
2022.
3. The consolidated financial statements comply with International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Dated at Melbourne, the 30 day of September 2022.
_______________________Andrew Van Der Zwan
Director
MRG Metals Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of MRG Metals Limited (the Company and its subsidiaries (the
Group)), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 4.2 in the financial report, which indicates that the consolidated entity incurred a net
loss after income tax of $702,340 and net cash outflows from operating and investing activities of $2,002,826 for
the year ended 30 June 2022. As stated in Note 4.2, these events, or conditions, along with other matters as set
forth in Note 4.2 indicate that a material uncertainty exists that may cast significant doubt on the consolidated
entity’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Level 20, 181 William Street, Melbourne VIC 3000
+61 3 9824 8555
vic.info@williambuck.com
williambuck.com.au
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
22.06.30 MRG Metals Limited - FY2022 Auditor's Report (clean)
70
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 matter described below to be the key audit matter to be
communicated in our report.
KEY AUDIT MATTER
Exploration and evaluation assets
How our audit addressed it
During the year, additions to exploration and
evaluation assets in Mozambique totalled
$1.395m as detailed in Note 12.
Accounting for these costs requires a significant
amount of judgements and estimates and there
is a risk that capitalisation of these costs may
not be appropriate.
The Group is also required to assess at each
reporting date if there are any triggers for
impairment which may suggest that the carrying
value is in excess of recovering value in
accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources. Management
is required to exercise judgement in evaluating
whether any impairment triggers exist.
Due to the judgements involved in assessing
recoverability of capitalised exploration and
evaluation assets, this was considered a Key
Audit Matter.
In order to address this risk, our audit
procedures included the following:
⎯ Reviewing the directors’ assessment of
the criteria for the capitalisation of
exploration expenditure and evaluation
of whether an impairment charge is
required;
⎯ Understanding and vouching the
underlying contractual entitlement to
explore and evaluate each area of
interest, including an evaluation of the
Group’s renewal in that area of interest
at its expiry;
⎯ Examining project spend per each area
of interest and comparing this spend to
budgeted expenditure;
⎯ Agreeing a sample of expenditure
capitalised to underlying support and
ensuring that it is appropriately
recorded in accordance with AASB 6
Exploration for and Evaluation of
Mineral Resources and is directly
attributable to that area of interest;
⎯ Evaluating management’s impairment
analysis which included the Group’s
analysis of recoverability of the carrying
value of the tenements; and
⎯ From an overall perspective, comparing
the market capitalisation of the Group to
the net carrying value of its assets on
the statement of financial position to
identify any other additional indicators
of impairment.
We also assessed the adequacy of the Group’s
disclosures in respect of capitalised exploration
costs and the planned expenditures.
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71
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 30 June 2022 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 these financial statements is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our independent auditor’s report.
22.06.30 MRG Metals Limited - FY2022 Auditor's Report (clean) | 3
72
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 30 June
2022.
In our opinion, the Remuneration Report of MRG Metals Limited, for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J.C. Luckins
Director
Melbourne, 30th September 2022
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73
74
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
ASX Additional Information
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this
report is set out below. The information is effective as at 18 September 2022.
Substantial Shareholders
There are no substantial Shareholders as at 18 September 2022.
Ordinary Shares
Number Held
%of quoted
shares
Nil
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 and over
Shareholders
41
15
49
630
1,352
2,087
There were 493 holders of less than a marketable parcel of ordinary shares.
Ordinary Shares
Twenty largest quoted shareholders
Number Held
AJ Barker
CJ & M Gregory S/F A/C
Citicorp Nominees P/L
BNP Paribas Nominees P/L
Finger Lakes P/L Anvil Investment A/C
10 Bolivianos P/L
R Joekar
S & E Turner Turner S/F A/C
KV Van Der Zwan Harleston Family A/C
A Knowles
GA Jacks
EJ Heymann
D & J Furfaro
Jolanza P/L Jolanza A/C
Altera P/L S/F A/C
H Miah
X Xu
A & KV Van Der Zwan S/F A/C
Blind Tiger P/L DG Borrowdale S/F A/C
A Swift
50,000,000
45,563,536
34,770,074
34,315,878
25,951,677
25,510,699
25,000,000
23,315,842
23,241,679
21,000,000
20,312,135
20,135,000
18,750,000
18,000,450
17,902,877
15,000,000
14,600,000
14,375,000
13,118,830
12,590,870
473,454,547
%of quoted
shares
2.86
2.61
1.99
1.96
1.49
1.46
1.43
1.33
1.33
1.20
1.16
1.15
1.07
1.03
1.02
0.86
0.84
0.82
0.75
0.72
27.10
75
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Restricted equity securities
Nil
Securities exchange
The Company is listed on the Australian Securities Exchange and shares are quoted under the code
MRQ.
Options
Twenty largest quoted optionholders
Number Held
MF Durward
D Ariti
JR Jakupi
I Toet
Euthenia Tyche P/L
ND Cowie
BS Jacobs
Speyside Holdings P/L S/F A/C
CR Barker
Merrill Lynch (Australia) Nominees P/L
Stocksonline P/L
10 Bolivianos P/L
PJ Slape
DAH Tuckett
First Investment Partners P/L
JW Princehorn
Kajprich P/L S/F A/C
Vibe FM Signature P/L S/F A/C
AB Kabir
OT & EH Yeoh
20,000,000
20,000,000
18,485,050
11,200,000
11,000,000
10,000,000
9,322,674
9,000,000
7,500,000
6,538,462
5,498,590
5,135,325
5,076,378
5,047,000
5,000,000
5,000,000
4,990,016
4,800,000
4,171,666
4,000,000
171,765,161
%of quoted
options
6.55
6.55
6.06
3.67
3.60
3.28
3.05
2.95
2.46
2.14
1.80
1.68
1.66
1.65
1.64
1.64
1.63
1.57
1.37
1.31
56.27
Securities exchange
The Company is listed on the Australian Securities Exchange and options are quoted under the code
MRQOC.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
76
Tenements
The Tenements held by the Company at reporting date are as follows:
Project
Norrliden
Malanaset
Malanaset
Corridor Central
Corridor South
Corridor North
Linhuane
Marão
Marruca
Patricio
Fotinho
Adriano
Tenement
K nr 1
nr 100
nr 101
EL 6620
EL 6621
10779L
7423L
6842L
6846L
10999L
11000L
11002L
% Owned
10
10
10
100
100
100
100
100
100
100
100
100
Note
Application
Application
Application
Application
Application
77
MRG Metals Ltd
Consolidated Financial Statements
30 June 2022
Corporate Directory
Directors & Secretary
Andrew Van Der Zwan
Non Executive Chairman
Christopher Gregory
Non Executive Director
Shane Turner
Non Executive Director and Company Secretary
Principal place of business
12 Anderson Street West, Ballarat VIC 3350
Telephone: +61 3 5330 5800 Fax: +61 3 5330 5890
Email: info@mrgmetals.com.au, www.mrgmetals.com.au
Registered office
12 Anderson Street West, Ballarat Victoria 3350
PO Box 237, Ballarat VIC 3353
Telephone: +61 3 5330 5800 Fax: +61 3 5330 5890
Corporate Accountant and Registered ASIC Agent
RSM Australia
12 Anderson Street West, Ballarat VIC 3350
PO Box 685, Ballarat VIC 3353
Telephone: +61 3 5330 5800 Fax: +61 3 5330 5890
www.rsm.com.au
Solicitors
Moray & Agnew
Level 6, 505 Little Collins Street, Melbourne VIC 3000
Telephone: +61 3 9600 0877 Fax: +61 3 9600 0894
www.moray.com.au
Share Registry
Automic Pty Ltd
Level 5, 126 Phillip Street, Sydney NSW 2000
Telephone: 1300 288 664
Auditor
William Buck Audit (Vic) Pty Ltd
Level 20
181 William Street, Melbourne Vic 3000
Telephone (office): +61 3 9824 8555
Website: www.williambuck.com
Stock Exchange Listing
ASX Codes: MRQ, MRQOC