MRG Metals Limited
Consolidated Financial Statements
30 June 2023
1
Annual Report
MRG Metals Ltd
ABN: 83 148 938 532
For the Year ended 30 June 2023
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
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
68
79
80
88
89
90
91
92
112
113
117
120
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
Review of Operations
MRG Metals is pleased to provide a summary of the Company’s activities for the 2023 financial year across
its portfolio of Heavy Mineral Sands (HMS) projects, located in southern Mozambique.
3
MRG has 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, MRG is in a position with multiple pits
demonstrating Mineral Resource Estimates which could lead to a mine start-up operation.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
4
During the financial year, MRG’s activities were highlighted by the release of results from the Scoping Study
and Preliminary Economic Assessment for the Corridor Central and Corridor South Projects, specifically the
Koko Massava, Nhacutse and Poiombo deposits.
Corridor Projects
The Corridor Projects covers 2 licences, Corridor Central and Corridor South covering a total of 387km2.
MRG’s key focus of the last financial 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.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
Corridor Projects
5
Scoping Study and Preliminary Economic Assessment
Within the December 2022 quarter, MRG announced the results of the Scoping Study and Preliminary
Economic Assessment by IHC Mining for the Corridor Central (11142C) and Corridor South (11137C)
Projects, specifically the Koko Massava, Nhacutse and Poiombo deposits.
This was released following the earlier Pre-Feasibility Metallurgical Process Development Test Work carried
out by IHC Mining on the Koko Massava prospect which returned excellent results.
Cautionary Statement
The Scoping Study and Preliminary Economic Assessment referred to in this report has been undertaken to
determine the potential viability of an open pit mine and ilmenite processing plant constructed onsite at the
Corridor Sands project in Mozambique and to reach a decision to proceed with more definitive studies. The
Scoping Study and Preliminary Economic Assessment has been prepared to an accuracy level of +30-35%.
The results should not be considered a profit forecast or production forecast.
The Scoping Study and Preliminary Economic Assessment is a preliminary technical and economic study of
the potential viability of the Corridor Sands project. In accordance with the ASX Listing Rules, the Company
advises it is based on low-level technical and economic assessments that are not sufficient to support the
estimation of Ore Reserves. Further evaluation work including infill drilling and appropriate studies are
required before MRG Metals Ltd (MRG) will be able to estimate any Ore Reserves or to provide any assurance
of an economic development case.
82% of the scheduled throughput over the first 11 years of production, at Nhacutse and Poiombo deposits,
is in the Indicated Mineral Resource category, with 18% in the Inferred Mineral Resource category. 50% of
the scheduled throughput over years 12 to 25 of production, at Koko Massava deposit, is in the Indicated
Mineral Resource category, with 50% in the Inferred Mineral Resource category. The Company has concluded
that it has reasonable grounds for disclosing a production target which includes a modest amount of Inferred
material. However, MRG, in consultation with IHC Mining, intends to conduct infill drilling to increase the
confidence of the Inferred Mineral Resources to Indicated Mineral Resources and to increase the confidence
of the Indicated Mineral Resources to Measured Mineral Resources. There is a low level of geological
confidence associated with Inferred Mineral Resources, and there is no certainty that further exploration work
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
6
will result in the determination of Indicated Mineral Resources or that the production target itself will be
realised.
The Scoping Study and Preliminary Economic Assessment is based on the material assumptions outlined
elsewhere in the announcement. These include assumptions about the availability of funding. While MRG
considers all the material assumptions to be based on reasonable grounds, there is no certainty that they will
prove to be correct or that the range of outcomes indicated by the Scoping Study and Preliminary Economic
Assessment will be achieved.
To achieve the range of outcomes indicated in the Scoping Study Preliminary Economic Assessment, initial
funding in the order of USD$239 million will likely be required. Investors should note that such funding may
only be available on terms that dilute or otherwise affect the value of MRG’s existing shares. Debt funding
via offtake pre-funding will be investigated.
It is also possible that the Company could pursue other value realisation strategies such as a sole, partial sale
or joint venture of the project. If it does, this could materially reduce the Company’s proportionate ownership
of the project.
The Company has concluded it has a reasonable basis for providing the forward-looking statements included
in this announcement and believes that it has a reasonable basis to expect it will be able to fund the
development of the Project. Given the uncertainties involved, Investors should not make any investment
decisions based solely on the results of the Scoping Study Preliminary Economic Assessment.
No Ore Reserve has been declared. This ASX release has been prepared in compliance with the current JORC
Code (2012) and the ASX Listing Rules. All material assumptions, including sufficient progression of all JORC
Modifying Factors, on which the production target and forecast financial information are based have been
included in this ASX release.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
7
Figure 2: Map of the MRG HMS Projects MLA’s Corridor Central (11142C) and Corridor South (11137C),
showing roads and towns.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
8
Figure 3: Cash flow over the life of the project
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
Table 1: Scoping Study and PEA key economics summary
9
Corridor Sands Scoping Study Project Summary
Mining Physics
Total Mining Inventory
Contained THM
Average Grade
Mining Rate
Mine Life
Pricing (Average life of mine)
Titano-Magnetite
Ilmenite
Non mag
Production
Titano-Magnetite
Ilmenite
Non-mag
Capital Expenditure
CAPEX (start up capital)
Key Financial Metrics
Revenue
Free cash flow (After tax)
Cash costs
CAPEX (including deferred)
NPV (after-tax)
IRR (after-tax)
Payback (discounted, after-tax)
Life of Mine
Background
Mt
Mt
%
Mtpa
Years
USD/t
USD/t
USD/t
ktpa
ktpa
ktpa
USD M
$M
$/t Ore
$/t HMC
$M
$/t Ore
$/t HMC
$M
$/t Ore
$/t HMC
$M
$M
%
Year
Years
513
27.8
5.4
19.7
26
90
256
320
262
369
48
239
3262
6.4
139.6
938
1.8
40.1
-1603.3
-3.1
-68.6
279
258
21%
5.5
26
The Scoping Study and Preliminary Economic Assessment Report (Report) has been prepared for MRG
Metals Limited (MRG) by IHC Mining (IHC), based on assumptions as identified throughout the text and
upon information and data supplied by others.
IHC has, in preparing the Report exercised due care consistent with the intended level of accuracy, using its
professional judgment and reasonable care. However, no warranty should be implied as to the accuracy of
estimates or other values and all estimates and other values are only valid as at the date of the Report and will
vary thereafter. Parts of the Report have been prepared or arranged by third party contributors, as detailed in
the document. While the contents of those parts have been generally reviewed by IHC for inclusion into the
Report, they have not been fully audited or sought to be verified by IHC.
IHC is not in a position to, and does not, verify the accuracy or completeness of, or adopt as its own, the
information and data supplied, either from the request for information (RFI) process or free issued by others
and disclaims all liability, damages or loss with respect to such information and data.
In respect of all parts of the Report, whether or not prepared by IHC, no express or implied representation
or warranty is made by IHC or by any person acting for and/or on behalf of IHC to any third party that the
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
10
contents of the Report are verified, accurate, suitably qualified, reasonable or free from errors, omissions or
other defects of any kind or nature. Third parties who rely upon the Report do so at their own risk and IHC
disclaims all liability, damages or loss with respect to such reliance.
IHC disclaims any liability, damage and loss to MRG and to third parties in respect of the publication,
reference, quoting or distribution of the Report or any of its contents to and reliance thereon by any third
party.
Scoping Study and PEA Summary
1.
Introduction
MRG Metals Limited (MRG) is looking at developing a mining and processing operation in Mozambique.
The Corridor Sands project (CSP) incorporates the Corridor Central (6620L) and Corridor South (6621L)
licences. These two licences are now under mining licence application (MLA) (refer ASX release 21 October
2022), with INAMI having accepted the MLAs and changing the licence numbers accordingly, Corridor
Central to 11142C (17.31956 Ha) and Corridor South to 11137C (18.23168 Ha). The MLAs were accepted by
INAMI on the 6th of October 2022 and 3rd of October 2022 respectively for Corridor Central and Corridor
South. The two licences are currently 100% owned by MRG Metals Limited (MRG) through its ownership of
its subsidiaries, Sofala Mining & Exploration Limitada and Sofala Mining & Exploration I Limitada, in
Mozambique. MRG is committed to working with INAMI to further the application process to the approval
of Mining Licences, with Environmental Management Plan (EMP) and Social and Labour Plan (SLP) studies
and reports, as well as the land-use licence / licences (DUAT) to take place after Mining Licences have been
granted. All land in Mozambique is owned by the Mozambican government and land-use administered
through rental and DUAT’s. Studies on existing DUAT’s will take place in the process, but no heritage sites
within the mining areas or native title is applicable. The project comprises the Koko Massava, Nhacutse and
Poiombo deposits.
The envisioned strategy for the initial operation has been developed with the aim of enabling MRG to identify
a clear path towards project execution. MRG plans to mine and process Run of Mine (ROM) material by
establishing Mining Unit Plant (s) (MUP) and a Wet Concentrator Plant (WCP) initially capable of processing
20.1mtpa.
The WCP will produce two streams, namely a Heavy Mineral Concentrate (HMC) that will be transported to
a proposed Mineral Separation Plant (MSP) and a Titano-Magnetite final product that will be also transported
to the MSP for offsite storage prior to loading on bulk carriers – sea freight. The MSP will be sized to handle
536Ktpa.
Within the bounds of this Study, products will be stored on the MSP site for onward transport by others by
road and sea on an FOB basis.
2.
Basis of Study
The purpose of this section is to set out the Scoping Study inputs, methods, key activities, deliverables, results
and recommendations clearly for MRG Metals and its intended parties. The Study report generally brings
together the technical scoping outcomes, capital and operating costs and financial modelling.
IHC Mining provided a proposal outlining the scope of the study to be performed. The scope of work outlined
in the proposal broadly included the following:
In-house assessment of IHC Mining historical works of similar projects;
•
• Desktop metallurgy (in addition to existing test work);
• Desktop investigative engineering;
•
•
•
Preliminary calculations;
Concept sketch layouts; and
Study management.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
11
This was to comprise two packages of work, specifically, a Scoping Study and associated financial modelling
for:
• Mining Unit Plant (MUP);
• Wet Concentrator Plant (WCP);
• Mineral Separation Plant (MSP);
• General Process Infrastructure.
In undertaking the study, the following items were excluded:
• Detailed building layouts (to support local authority applications);
•
3D Modelling for buildings, designs and any other equipment;
• Permitting and approvals; and
•
Investigations as described in section 14 Capital Cost Estimate.
Deliverables and activities undertaken during this scoping study include:
Scoping of mining strategy and mining unit(s);
• General review, registration and management of client data and key input information;
• Convene internal and external kick-off meetings;
• Development of a basis of study guiding document;
• Prepare preliminary requests for information (RFI’s) and develop a register;
•
• Development of a basic mining inventory and schedule;
•
• Undertaking of mining options investigation;
• Drafting of concept sketch site layouts of mining, wet processing, dry processing and port facilities;
• Development of a Block Flow Diagram outlining high level plant Interaction;
• Compiling mass and water balances
• Assessing stockpile strategies and volumes, water consumption, reticulation and management, plant
Scoping of process plants;
consumables (power, diesel, gas etc) and man power requirements;
• Undertaking preliminary engineering calculations sufficient to compile a Class 5 estimate;
• Completing preliminary equipment selections;
• Preparing mechanical equipment list with power draws;
• Compiling a Class 5 Capital Budget Estimate (+/-35% accuracy);
• Compiling a Class 5 Operating Cost Estimate (+/-35% accuracy);
• Development of preliminary project execution schedule;
• Development of a preliminary financial model; and
• Preparation of final scoping study report.
3.
Geology and Resources
The deposits are hosted by the palaeodunes in the Chongoene-Chibuto area. The palaeodunes are known to
host significant heavy mineral sand mineralisation. Recent drilling has intersected high total heavy mineral
(THM) grades, from surface extending to a depth of up to 55m over a strike of 8km. The mineralisation is
hosted within the red to brownish, medium grained sand units. The mineralisation zone is geologically
continuous along strike, with grades varying along and across strike.
In December 2021, MRG released a Mineral Resource Estimate (MRE) for their Koko Massava orebody
which delivered a High-Grade Zone of 103Mt @ 6.6% THM at a 5.5% cut-off grade (Table 2.1 and 2.2; refer
ASX Announcement 16 December 2021). The updated MRE comprised a total Mineral Resource of 1,534Mt
@ 5.1% THM, with 17% slimes, containing 78Mt of THM with an assemblage of 38% ilmenite, 32% titano-
magnetite, 1% rutile and 1% zircon. The JORC categories are specifically stated as:
•
•
an Indicated Mineral Resource of 557Mt @ 5.1% THM and 17% slimes containing 28Mt of THM
with an assemblage of 38% ilmenite, 32% titano-magnetite, 1% rutile and 1% zircon.
an Inferred Mineral Resource of 977Mt @ 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.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
12
In April 2022, MRG then announced the results of the updated JORC Mineral Resource estimates for its
Nhacutse and Poiombo deposits at Corridor Sands with a combined Inferred Resource of 860Mt @ 4.9%
THM (Table 2.3 and 2.4; refer ASX Announcement 8 April 2022). The MRE included high-grade zones
totalling 256Mt @ 6.0% THM.
Table 2-1: Mineral Resource estimate for Nhacutse and Poiombo at 4% THM cut-off grade
Summary of Mineral Resources(1)
Mineral Assemblage (2)
Mineral
Resource
Category
Indicated
Inferred
Deposit
Global
Grand Total
Notes:
Material
In Situ
THM
BD
M
H
T
S
E
M
L
S
I
S
O
M
L
I
T
U
R
R
Z
I
G
A
M
T
I
M
R
H
C
H
T
O
M
A
D
N
A
H
T
O
M
N
(Mt)
524
337
860
(Mt)
(gcm3)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
26
16
42
1.74
1.74
1.74
5.0
4.7
4.9
22
17
20
1
1
1
44
41
43
1
1
1
1
1
1
27
27
27
3
4
3
2
5
3
8
10
9
4
3
3
(1) Mineral resources reported at a cut-off grade of 4% THM
(2) Mineral assemblage is reported as a percentage of in-situTHM
Table 2-2:
Mineral Resource estimate for Nhacutse and Poiombo at 5.5% THM cut-off grade
Summary of Mineral Resources(1)
Mineral Assemblage (2)
Mineral
Resource
Category
Indicated
Inferred
Deposit
Global
Grand Total
Notes:
Material
In Situ
THM
BD
M
H
T
S
E
M
L
S
I
S
O
M
L
I
T
U
R
R
Z
I
G
A
M
T
I
M
R
H
C
H
T
O
M
A
D
N
A
H
T
O
M
N
(Mt)
186
71
257
(Mt)
(gcm3)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
11
4
15
1.75
1.75
1.75
5.9
6.2
6.0
22
18
21
1
1
1
43
41
43
1
1
1
1
1
1
27
27
27
3
4
4
2
5
3
8
10
9
4
3
4
(1) Mineral resources reported at a cut-off grade of 5% THM
(2) Mineral assemblage is reported as a percentage of in-situTHM
Table 2-3:
Mineral Resource estimate for Koko Massava at 4% THM cut-off grade
Summary of Mineral Resources(1)
Mineral Assemblage (2)
Mineral
Resource
Category
Indicated
Inferred
Deposit
Global
Grand Total
Notes:
Material
In Situ
THM
BD
M
H
T
S
E
M
L
S
I
S
O
M
L
I
T
U
R
R
Z
I
G
A
M
T
I
M
R
H
C
H
T
O
M
A
D
N
A
H
T
O
M
N
(Mt)
557
977
1,531
(Mt)
(gcm3)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
28
49
77
1.74
1.74
1.74
5.1
5.1
5.1
17
16
17
1
1
1
38
38
38
1
1
1
1
1
1
32
32
32
4
4
4
4
4
4
8
8
8
3
3
3
(1) Mineral resources reported at a cut-off grade of 4% THM
(2) Mineral assemblage is reported as a percentage of in-situTHM
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
13
Table 2-4:
Mineral Resource estimate for Koko Massava at 5.5% THM cut-off grade
Summary of Mineral Resources(1)
Mineral Assemblage (2)
Mineral
Resource
Category
Indicated
Inferred
Deposit
Global
Grand
Total
Notes:
Material
In Situ
THM
BD
M
H
T
S
E
M
L
S
I
S
O
M
L
I
T
U
R
R
Z
I
G
A
M
T
I
M
R
H
C
H
T
O
M
A
D
N
A
H
T
O
M
N
(Mt)
(Mt)
(gcm3)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
(%)
58
45
103
4
3
7
1.8
1.8
1.8
6.4
6.8
5.1
15
12
17
1
1
1
39
37
39
1
1
1
1
1
1
33
34
33
4
4
4
3
4
3
7
5
6
3
2
3
(1) Mineral resources reported at a cut-off grade of 5.5% THM
(2) Mineral assemblage is reported as a percentage of in-situTHM
4.
Mining Strategy
Review and selection of the appropriate mining methodology was based upon a conventional open pit
unconsolidated free-dig, free flowing dry sand mining operation. Wet Mining operations were ruled out due
to the mining pits relationship to the water table. At this stage of project development, conventional truck
and shovel and dozer trap were considered.
Apart from the superior economics, the broad acre deposit, little to no overburden combined with a pit depth
of nominally up to 50 metres are well suited to dozer trap mining. This mining methodology is well understood
and is currently being employed by a variety of Tier 1 mineral sands producers.
Mining would be conducted by large bulldozers pushing ore to in pit screening and slurrying units known as
mining unit plant (MUP). The MUP receives ROM ore mined by bulldozers. The MUP is designed to be
relocatable and is placed adjacent to the lower ore level of the mine face. Process water from the plant reservoir
is piped to the MUP and used to slurry and transport the screened ore back to the processing plant. Oversize
material is rejected and disposed of in the mine void.
Processing of ore will be conducted in two distinct stages. The WCP receives ore as slurry from the mine and
after removal of clay, silt and oversize, the sands will be processed by spiral gravity separators to yield a HMC
and low intensity magnets (LIMs) to yield a titano-magnetite product. The HMC and titano-magnetite product
will be trucked to the MSP, the titano-magnetite will not undergo further processing and be stored as final
product.
At the MSP, the HMC feed stock will undergo various stages of magnetic, electrostatic separation and
pyrometallurgy to isolate and upgrade the TiO2 products. Non-mag containing zircon, rutile and lighter
minerals will be removed in wet gravity separation processes and a non-mag concentrate produced.
The products will be conveyed to storage shed facilities on the MSP site and then reloaded on a ship loading
conveyor as bulk sea freight.
Coarse and fine tails will be trucked back to the WCP site and dumped into a tails reclaim hopper, mixed with
WCP tailings and pumped back to the mine void.
The mining inventory for the Nhacutse-Poiombo & Koko-Massava is included in Table 3. Tonnages and
grades are rounded as appropriate and mineral assemblage is reported as a percentage of in situ HM. The
reference point for the Mining Inventory is the point of feed to the MUP, i.e., the tonnes and grade reported
are in-situ. The production profile over the life of mine (LOM) is shown in Figure 4.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
14
Table 3: Mining Inventory for PEA (showing valuable mineral component)
Ore
HM HM
SLIMES OS
BD
ILM
ILMA
LX
RUT
TIMAG
ZIR
Deposit
Mt Mt
%
%
%
g/cm3 %HM %HM %HM %HM %HM %HM
Nhacutse & Poiombo
248 13.5 5.5
20
0.6
1.75
39.9
4.0
0.3
1.1
26.7
1.3
Koko Massava
265 14.3 5.4
16
0.9
1.75
37.1
2.2
0.3
1.2
32.1
1.2
Total
513 27.8 5.4
18
0.8
1.75
38.5
3.1
0.3
1.1
29.5
1.3
Resource Breakdown :Nhacutse and Poiombo: 82% Indicated,18% Inferred : Koko Massava 50% Indicated, 50%
Inferred.
Figure 4: Production Profile for Life of Mine (LOM)
5.
Metallurgical Testwork
IHC Mining completed scoping study level metallurgical test work in August 2020 for the Corridor Sands
Project. The test work was conducted on a ~100kg sample of composited drill sample material derived from
MRG’s Koko Massava deposit.
The sample was characterised as per MRG’s standard methodology developed for the geological modelling,
metallurgical evaluation and production forecasting of the CSP. The feed material contained minimal +2.0mm
oversize particles/organics, 15.6% fines (-45μm) and 5% heavy mineral (2.85s.g.) content. XRF analysis
indicated the HM to contain 24.6% TiO2 and 0.96% ZrO2. QEMSCAN analysis calculated the HM
mineralogy to contain 0.2% rutile, 2.0% altered ilmenite, 28.8% ilmenite, 16.6% titano-magnetite and 1.2%
zircon.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
15
The material was processed through a simulated feed preparation process to remove fines and oversize
particles. The screened sand fraction represented a mass yield of 87.3% with respect to ROM material.
A sample of generated fines was used to complete fines handling test work, which confirmed the fines to settle
readily and consolidate well when using conventional flocculent.
The screened sand fraction was then processed through a two-stage (rougher-cleaner) wet table circuit to
simulate a wet concentration process. The material was amenable to upgrading by gravity separation. The
circuit produced a HMC containing 83.0% HM, and recovered 93.5% of the TiO2 units and 93.7% of the
ZrO2 units. The HMC represented a mass yield of 4.35% with respect to ROM material.
The resultant HMC was then processed through a typical mineral sands concentrate upgrade process (CUP),
utilising a two-stage LIMS (non-mag scavenger), two-stage WHIMS (non-mag scavenger) and two-stage wet
table (rougher-scavenger) to further upgrade the WHIMS non-mags. This circuit produced a titano-magnetite
product, a low-Ti concentrate, a magnetic concentrate and a non-magnetic concentrate.
The CUP magnetic concentrate was then processed through the ilmenite upgrade process, consisting of
electrostatic and dry magnetic separation. The produced magnetic fraction represented a mass yield of 1.60%
with respect to ROM material, contained 43.5% TiO2 and was elevated in chrome (1.4% Cr2O3). Further
magnetic fractionation test work concluded that the chrome could not be adequately removed by magnetic
separation alone and that chemical alteration by ultra-low temperature roasting (ULTR) plant would be
required.
The roasting process successfully enhanced the magnetic susceptibility of the ilmenite species, allowing for
more effective rejection of chrome-bearing minerals by the proceeding dry magnetic separation circuit. The
produced ULTR Ilmenite contained 47.1% TiO2, 0.10% Cr2O3, 0.92% SiO2 and negligible U+Th. This
product represents 1.42% of the ROM mass and meets typical primary ilmenite specification.
Despite the low mass yield, the CUP’s non-magnetic concentrate was further processed by electrostatic,
magnetic and gravity separation methods to produce a Ti concentrate and a Zr concentrate.
The developed flow sheet is a relatively simple process which uses typical mineral sands separation
methodologies. The production of the titano-magnetite product has proven particularly robust and consistent
throughout the scoping study and pre-feasibility study metallurgical test work completed to date. The non-
magnetic concentrate, while representing a low mass yield, is a potential value adding stream for future
consideration. The production of a primary ilmenite product has proven to be somewhat more demanding,
with multiple stages of magnetic separation required in conjunction with ULTR treatment. Each progressive
stage of mineral separation introduces ilmenite mineral losses. With ilmenite proving to be a major driver for
the project, there is opportunity to optimise ilmenite recovery through alternate process flow sheet options.
Two major process routes have been investigated to date – the WHIMS-oriented scoping study test work flow
sheet and the current design as presented herein (and as currently being developed during pre-feasibility study
test work). The latter’s main advantage is reducing opportunity for ilmenite mineral losses in the WHIMS
circuit. It is possible that this may cause a net increase in operating costs due to the increased drying
requirements. To identify the optimum choice, a high-level cost-benefit analysis is recommended to be
conducted for these two process options once metallurgical test work results are finalised for this processing
option.
Pending the results of this investigation, further options for reducing ilmenite losses may also be available,
such as the removal of the mineral separation steps prior to roasting. While this would increase the energy
intensive roasting requirement, it would eliminate the ilmenite mineral losses associated with the pre-ULTR
MSP circuit. The ilmenite upgrade (to final product) would then occur entirely through the magnetic
separation post-ULTR, wherein the ilmenite magnetic susceptibility has been enhanced and normalised by the
roasting process. It is recommended that these option assessments are completed prior to commencement of
a bankable feasibility study, such that the bankable feasibility metallurgical test work can confirm and optimise
the selected circuit and assess its response to ore variability.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
6.
Modifying Parameters
16
Mining recovery and dilution have been considered in design and given the bulk, non-selective mining method
used, it is not considered that application of further modifying factors is appropriate. No cutting or factoring
of grades were made. The same modifying factors were used on both deposits.
Exchange Rates:
All dollar values referred to in this report are in United States Dollars (USD) unless explicitly stated otherwise.
Therefore, no exchange rate has been assumed.
Commodity Prices:
Product prices are a function of supply and demand, and product quality. Those used for optimisation value
modelling purposes are included in Table 4. Prices were based on those supplied by MRG and have
subsequently been updated. These updated prices were confirmed by TZMI. TZMI conducted a detailed
Market Study for MRG, the study loo ed particularly at incorporating TZMI’s latest supply/demand
projections on global sulfate ilmenite, rutile and zircon markets. The study had the following focus:
Introduction to the mineral sands value chain and industry structure.
Phase 1
•
• Overview of existing major producers and likely new projects that are currently under investigation.
• Review of supply of sulfate 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 feedback 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.
• 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. For context, historical prices from 2010 to 2020 will be provided.
Phase 2
• Product quality assessment of planned sulfate ilmenite and non-magnetic concentrate from the
company’s HM project in Mozambique based on indicative quality obtained from bulk metallurgical
testwork undertaken at IHC Mining.
• 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. 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.
The new prices confirmed by TZMI are higher than these, however that will simply drive a higher valuation
for the financial modelling and result in a more robust operation and economics.
Table 4: Product Prices
Product
US$/t product
Ilmenite Product
Non Magnetic Product
Titano-Magnetic Product
195.02
525.00
84.00
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
Royalties:
17
Royalties include provision for government royalties and are assigned based on a percentage of sales price. An
ad valorem royalty of 6% is used in this study.
Operating Costs:
The operating cost and revenue assumptions used for pit optimisation are summarised in Table 5. These are
derived from the scoping study and industry standards for similar sized and style of operation. No contingency
has been applied to operating cost because the pit limit selection process always selects a pit shell that assumed
a reduced revenue (which is the same as increased cost, effectively).
Table 5: Operating Cost Assumptions
Description
Surface costs
Clearing & topsoil removal cost
Rehabilitation cost
Mining costs
Unit
US$/ha
US$/ha
Overburden removal cost (if applicable)
US$/BCM
Mining unit
Oversized handling cost
Pumping cost to WCP
WCP costs
Fine tails handling cost
WCP cost
Tailings cost
CUP cost
Miscellaneous costs
US$/t mined
US$/t o/s generated
US$/t moved
US$/t fine generated
US$/t feed in
US$/t moved
US$/t feed in
Royalty - percentage of sales price
%
Overhead cost
MSP costs
IUP cost
Shipping and Storage
Transport cost to port facilities
Bagging cost
Wharf cost
US$/t HMC
US$/t feed in
US$/t moved
US$/t moved
US$/t moved
Value
4,200
23,333
1.21
0.81
0.70
0.52
0.77
0.22
0.46
3.56
6
16.13
30.34
5.54
0.43
6.30
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
Process Recoveries:
Process recoveries and yields used in this study are included below.
Table 6: Product Recoveries
HM
Assemblag
e
WCP
%
CUP
Titano
Magnetic
%
CUP
Ilmenite
product
%
CUP
Non
Magnetic
%
RUT
LX
ILMA
ILM
TIMAG
ZIR
ANDA
CHROM
HEMA
NMOTH
MOTH
90.79
86.53
83.61
84.46
74.55
87.58
80.75
85.31
80.99
80.75
80.99
0
0
0.67
1.01
80.10
0
0
5.45
33.27
0
33.27
8.64
58.73
86.96
91.12
14.04
15.22
14.52
79.52
47.04
14.52
47.04
86.30
34.37
6.47
0.54
0.13
81.16
24.61
7.97
4.51
24.61
4.51
Other recoveries:
• Mining recovery used for the optimisation process: 98%;
•
Sand in HMC: 9%.
7.
Block Flow Diagram
18
IUP
%
3.05
33.55
58.73
98.43
91.05
0
0
35.37
32.42
0
ULTR
%
15.00
15.00
96.70
96.70
5.00
0
0
6.50
68.10
0
32.42
68.10
An overview of the processing stages and associated throughputs and products are summarised in the below
table and Figure 5:
Table 7: Process Overview
20.1 Mtpa Mined Ore
Note
Qty
MUP 1
MUP 2
WCP
-
MSP
ULTR
Post Mag Sep
Titano-Magnetite
Ilmentite
Non Mag Concentrate
Pit 1
Pit 2
ROM
Rougher HF
HF
ULTR HF
Hybrid
Ex WCP -tph - damp
Ex post mag sep – dry
Ex MSP - damp
1
1
1
1
1
1
1
1
1
1
Feed
(T/h)
1350
1350
2700
2272
72.3
60.2
58.4
58.6
52.6
9.7
Availability
85%
85%
85%
85%
85%
85%
85%
85%
85%
85%
Annual
(Mtpa)
10.05
10.05
20.1
16.92
0.538
0.448
0.435
0.436
0.392
0.072
PLANTS
PRODUCTS
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
19
Figure 5: Scoping Study Process Staging Flowsheet – Corridor Sands Project (Koko Massava, Nhacutse and
Poiombo Deposits).
8.
Process Areas
The proposed mining equipment would consist of two identical MUP’s. Each of the MUP’s will be capable
of processing up to 1,500t/h solids with an average of 1,350 tph, which equates to the total operating feed
rate of 2,700tph (20.1mtpa).
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
20
Each MUP would operate in a separate mining pit, the pumping metrics adopted for the study start up case
were a 2,500m pumping distance for each MUP to the centrally located WCP. As the mine progresses further
away from WCP, deferred capital will be applied.
The ore will be mined using dozers, the ore pushed down from the mining face to a receival hopper, the ROM
then slurried, wet screened with a vibrating screen (2.0mm) and then pumped via overland slurry pipe to the
WCP for de-sliming and further processing. The sand tails will be returned to the pit along with slimes as a
co-disposal operation.
The WCP receives ROM material as a slurry via an overland pipeline from the two (2) MUP’s located in
separate mining pits. The WCP receives, de-slimes and processes the ROM producing three streams; a titano-
magnetite product (deemed a final product). A HMC suitable for further processing at the MSP and two (2)
tailings stream that are returned to the mining voids.
The MSP receives HMC by truck from the WCP site where it is dumped in windrows ready for feeding into
the plant. The HMC is then fed by Front End Loader (FEL) into a hopper and then dried prior to being
processed using conventional electrostatic separators and rare earth drum magnets. A non-conductor stream
is fed to a wet circuit using wet shaking tables.
This initial stage produces a hi-mag suitable for presentation to the ULTR and a non-mag concentrate product
along with a tailing stream.
The titano-magnetite product is also unloaded and stored at the MSP site where it is loaded on the ship loading
facility for export. This material is not treated further at the MSP, but merely stored on site for additional
draining to meet the 5% total moisture limit (TML) requirement.
The ULTR process conditions lower ilmenite and iron bearing minerals by partial reduction to homogenise
the magnetic susceptibility, while keeping the ilmenite in a temperature range that avoids the solubility of TiO2
being affected by rutilisation. Central to this process is a fluid bed reactor (referred to as the roasting stage)
fluidised with reducing gases, within a temperature range of 575 °C to 625 °C.
The result is an upgraded ilmenite with a higher TiO2 content (47.1% increased from 43.5%) and lower Cr2O3
content, while the total iron oxide is decreased, the remaining iron is predominately FeO, which is favourable
for feed stocks presented to the sulphate process.
The product load-out facility consists of the storage and materials handling equipment required to load the
final products on to the wharf facility and then on to ocean going vessels.
With the selected option being the Chongoene MRG built facility, provision includes the loadout conveyors
for both Titano-magnetite, Ilmenite and non-mag products.
The final products are reloaded from their respective storage sheds and compounds on to transverse loading
conveyors and on to a main ship loading conveyor for export.
9.
Schedule
A total project execution duration of 157 weeks has been estimated, including project feasibility and approvals
through to detailed design, construction and commissioning. An arbitrary plant signoff and handover,
scheduled in this study to take place at the end of third quarter 2025, will be affected by numerous factors,
including the timing of grant of Mining Licence applications.
10.
Cost Estimate
The cost estimate has been developing in accordance with the AusIMM requirements for a class 5 scoping
study, with engineering development to between 1 – 2% and a cost accuracy of +/- 30 – 35%.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
21
The scoping study has considered the following 4 scenarios, each scenario assumes a fixed mine site based W
P, x mobile MUP’s and port based M P:
1. MRG owned port and loading facility at Chongoene, with WCP relocation from Nhacutse / Poiombo to
Koko Massava (Base case; Figure 6);
2. Use of shared port facility at Chongoene, with WCP relocation from Nhacutse / Poiombo to Koko
Massava;
3. Use of shared port at Maputo, with WCP relocation from Nhacutse / Poiombo to Koko Massava; and
4. MRG owned port and loading facility at Chongoene, with single WCP location at Nhacutse / Poiombo,
and additional booster pumps and field pipework for mining at Koko Massava.
The tables below outline the CAPEX estimates for the Scenario 1: Base case, 2, 3 and 4:
Table 8: CAPEX Cost Distribution Inclusive of Direct cost, Indirect cost & Contingency
Cost Centre
Area 0000 – Operational Establishment
Area 1000 – Mobile MUP
Area 2000 – Wet Concentrator Plant
Area 3100 – Ilmenite Drying Plant
Area 3200 – Ultra Low Temperature Roast
Area 3300 – Final Magnetic Separation
Area 4000 – Load Out and Storage
Cost (M’s) by Scenario (USD)
2
3
4
17.25
36.53
97.52
30.93
32.10
2.00
5.72
17.25
36.53
97.52
30.78
32.10
1.99
5.68
34.25
36.53
97.52
30.93
32.10
2.00
5.72
1 (Base
Case)
34.25
36.53
97.52
30.93
32.10
2.00
5.72
Total Project Costs
239.04
222.04
221.84
239.04
Table 9: CAPEX Cost Breakdown of Direct cost, Indirect cost & Contingency
Cost Centre
Direct Cost
Indirect Cost
Total Project Costs (Excluding Contingency)
Contingency
Total Project Costs
Cost (M’s) by Scenario (USD)
1 (Base
Case)
167.38
40.48
207.86
31.18
239.04
2
3
4
155.72
37.36
193.08
28.97
222.04
155.56
37.34
192.90
28.94
221.84
167.38
40.48
207.86
31.18
239.04
As noted, the initial capex for scenarios 1 and 4 is the same, however scenario 4 incurs an additional $40m in
deferred capital to coincide with the WCP move to Koko Massava.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
Figure 6: Corridor Sands Project MSP & Port Layout
22
11.
Operational Estimate
The OPEX is based on a 2,700 tph operation, assuming a plant availability of 85%. The tables below outline
the OPEX estimates for the Scenario 1 (Base case), Scenario 2 and 3, noting that the start-up OPEX of
scenario is the same as scenario. Costs shown in millions of USD.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
Table 10: Operating Cost Scenario 1 (Base Case) and Scenario 4
23
0000
1000
2000
3100
3200
4000
Area Description
Admin MUP WCP MSP ULTR
Mining
Labour
Mobile Equipment
Other Consumables
Electrical Power
Maintenance
Operating Spare Parts
Rehabilitation
Transport - Cartage
Loading - Wharfage
Annual Operating Cost
0.00
0.54
0.00
0.00
0.12
0.35
0.00
0.00
0.00
0.00
1.01
14.07
0.93
0.00
0.00
6.45
0.00
0.00
0.00
0.00
0.00
0.00
1.48
0.29
1.77
12.76
2.07
1.04
0.00
0.00
0.00
0.00
1.42
0.18
2.53
0.47
0.71
0.35
0.00
0.00
0.00
21.45 19.41
5.66
0.00
0.43
0.00
4.64
2.43
0.71
0.36
0.00
0.00
0.00
8.56
Load
Out
0.00
0.34
0.02
0.00
0.06
0.12
0.06
0.00
0.00
0.00
0.60
Site
Wide
0.00
Annual
Cost
14.07
0.36
0.18
0.00
0.10
0.00
0.00
0.48
3.20
0.00
4.33
5.49
0.67
8.94
22.39
3.61
1.81
0.48
3.20
0.00
61.02
Table 11: Operating Cost Scenario 2
0000
1000
2000
3100
3200
4000
Area Description
Admin MUP WCP MSP ULTR
Mining
Labour
Mobile Equipment
Other Consumables
Electrical Power
Maintenance
Operating Spare Parts
Rehabilitation
Transport - Cartage
Loading - Wharfage
Annual Operating Cost
0.00
0.54
0.00
0.00
0.12
0.18
0.00
0.00
0.00
0.00
0.84
14.07
0.93
0.00
0.00
6.45
0.00
0.00
0.00
0.00
0.00
0.00
1.48
0.29
1.77
12.76
2.07
1.04
0.00
0.00
0.00
0.00
1.42
0.18
2.53
0.47
0.71
0.35
0.00
0.00
0.00
21.45 19.41
5.66
0.00
0.43
0.00
4.64
2.43
0.71
0.36
0.00
0.00
0.00
8.56
Load
Out
0.00
0.34
0.02
0.00
0.06
0.12
0.06
0.00
0.00
0.00
0.60
Site
Wide
0.00
Annual
Cost
14.07
0.36
0.18
0.00
0.10
0.00
0.00
0.48
3.20
9.24
5.49
0.67
8.94
22.39
3.61
1.81
0.48
3.20
9.24
13.57
70.08
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
Table 12: Operating Cost Scenario 3
24
0000
1000
2000
3100
3200
4000
Area Description
Admin MUP WCP MSP ULTR
Mining
Labour
Mobile Equipment
Other Consumables
Electrical Power
Maintenance
Operating Spare Parts
Rehabilitation
Transport – Cartage
Loading – Wharfage
Annual Operating Cost
0.00
0.54
0.00
0.00
0.12
0.18
0.00
0.00
0.00
0.00
0.84
14.07
0.93
0.00
0.00
6.45
0.00
0.00
0.00
0.00
0.00
0.00
1.48
0.29
1.77
12.76
2.07
1.04
0.00
0.00
0.00
0.00
1.42
0.18
2.53
0.47
0.71
0.35
0.00
0.00
0.00
21.45 19.41
5.66
0.00
0.43
0.00
4.64
2.43
0.71
0.36
0.00
0.00
0.00
8.56
Load
Out
0.00
0.34
0.02
0.00
0.06
0.12
0.06
0.00
0.00
0.00
0.60
Site
Wide
0.00
0.36
0.18
0.00
0.10
0.00
0.00
0.48
Annual
Cost
14.07
5.49
0.67
8.94
22.39
3.61
1.81
0.48
22.20
22.20
9.91
9.91
33.24
89.75
12.
Financial Modelling
The Corridor Sands Project Scoping Study included financial modelling as a part of the evaluation and pathway
valuation outcomes (the development of a PEA). The development of the Financial Model was based on a
historical model supplied by IHC and subsequently modified by Duncan Freeman of Freeman Financial
Modelling (FFM).
An initial audit and review of the as-supplied Financial Model was carried out by FFM under the direction of
and in collaboration with IHC.
The financial modelling of 4 scenarios or cases was carried out. These are first detailed in Table 13 and are
described as:
Scenario 2: Client leased port facility at Chongoene;
Scenario 3: Client leased port facility at Maputo; and
Scenario 4: a variation on the Base Case where a WCP plant move from the Nhacutse and
• Base Case or Scenario 1: Client owned and managed port facility at Chongoene;
•
•
•
• Poiombo to Koko Massava minesite is executed rather than incorporating the extra pumping. This case
was selected as a comparator and the order of magnitude differential (if any) could be extrapolated to the
other Scenarios.
The financial modelling used the following assumptions:
• CAPEX/OPEX as prepared by the IHC engineering team with assumptions on power and transport and
owners costs provided by the Client;
• Pricing as supplied by the Client, derived from open source data and TZMI studies;
• Assumed cost of capital of 8% as specified by the Client;
• Operational metrics developed by IHC;
• CAPEX spend commencing Jan-2024;
• Final commissioning Jan-2025; and
• An assumed 6 month ramp up to full production (reflected in the model by an end of Q1 start mining
date - i.e. 3 full months of production but spread over 6 months).
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
25
Of the 4 Scenarios, the one that generates the most favourable metrics, is Scenario 4, which utilises the WCP
move in Year 13 of the project (operational Year 12, as the project includes just over 12 months of build time).
A summary of the various scenario metrics is presented in Table 13, but the NPV value of US$258M is the
most favourable outcome taking all of the inputs into consideration.
A payback period of 6 whole years (5.5 years) on a CAPEX spend of US$279M including deferred capital is a
favourable outcome. The project is not overly sensitive to CAPEX, but is quite sensitive to Product Pricing.
A range of ± 35% was used for the sensitivity analysis (Figure 7) which is in line with the order of accuracy
for the overall Scoping Study.
The project is assisted with elevated pricing and the future of mineral sands markets will be in part, dictate the
development pathway for the Corridor Sands Project. Were MRG to secure fair market off-take agreements
for ilmenite and titano-magnetite, then the future of the project would have a definitive pathway to
development.
Sensitivities
Price (+ / - 35%)
-56
572
Opex (+ / - 35%)
108
408
Capex (+ / - 35%)
184
332
(400)
(300)
(200)
(100)
0
100
200
300
400
Axis value represents USD'm change. Value next to bar
represent resultant NPV
Figure 7: Sensitivity analysis
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
Table 13: Summary of Key Financial Metrics from Modelling Scenarios
26
SCENARIO SELECTED
Base Case
Scenario 2
Scenario 3
Scenario 4
MINING INVENTORY SELECTED
Reserve 1
Reserve 1
Reserve 1
Reserve 1
PRICING MODEL
Cash flows
Revenue
Free cash
flow (After tax)
Cash costs
CAPEX
(including
deferred)
NPV (after-
tax)
IRR (after-
tax)
Payback
(discounted,
after-tax)
$M
$/t Ore
$/t HMC
$M
$/t Ore
$/t HMC
$M
$/t Ore
$/t HMC
RCCR
$M
$M
%
Year
Life of Mine
Years
Funding
Base
3,262
6.4
139.6
882
1.7
37.7
-1,715.60
-3.3
-73.4
1.9
250
255
21%
6
26
Base
3,262
6.4
139.6
771
1.5
33
-1,894.80
-3.7
-81.1
1.7
233
220
20%
6
26
Base
3,262
6.4
139.6
449
0.9
19.2
-2,369.60
-4.6
-101.4
1.4
232
91
13%
8
26
Base
3,262
6.4
139.6
938
1.8
40.1
-1,603.30
-3.1
-68.6
2
279
258
21%
6
26
To achieve the range of outcomes indicated in the Scoping Study, initial funding in the order
of US$239m will likely be required, which includes all pre-production costs of which the preproduction capital.
The Company has formed the view that there is a reasonable basis to believe that requisite future funding for
development of the Project will be available when required. The grounds on which this reasonable basis is
established include:
- The Project has strong technical and economic fundamentals which provides an attractive return on
capital investment and generates robust cashflows at conservative ilmenite, non-magnetic product and
titano-magnetic product prices. This provides a strong platform to source debt and equity funding.
- The Board has a strong track record of equity raisings, having raised in excess of $27 million over the last
11 years.
- The Company has received significant interest from various potential Offtakers/Partners regarding
financing for the project, with preliminary discussions occurring.
- The Company has appointed TZMI to assist in marketing during the PFS STAGE. TZMI has extensive
expertise and has identified potential buyers for the products identified in the Scoping Study, but has yet
to make approaches on the Company’s behalf as both MRG and TZMI believe further product upgrade
is possible in the PFS stage.
- MRG will consider a range of funding sources, with the objective of securing the most cost competitive
and value maximising option for the Company.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
27
- Given the scale of the operation, the Project is expected to generate substantial free cash flow per year to
service debt, which will enhance the debt capacity of the Project. As a result, a greater percentage of debt
funding may be achievable when compared to smaller scale, lower margin projects.
-
- MRG will preferentially engage with offtake counterparties that may contribute funding to the Project
which may include: conventional equity at the corporate and/or project level; convertible notes or bond;
debt financing in the form of either conventional project debt financing, prepayment for product or
royalties; or a combination of the above.
Sources of equity funding may include private equity funds specialising in resource project investment;
institutional funds; strategic investors; and high net worth, sophisticated and retail investors. Depending
on market conditions, the equity component may be structured with a combination of ordinary and hybrid
equity. Given the above, the Company has concluded that it has a reasonable basis to expect that the
upfront project capital cost could be funded following the completion of a positive bankable feasibility
study and obtaining the necessary project approvals.
- There is, however, no certainty that the Company will be able to source funding as and when required.
Typical project development financing would involve a combination of debt and equity. It is possible that
such funding may only be available on terms that may be dilutive to or otherwise affect the value of the
Company’s existing shares.
13.
Conclusions and Recommendations
The pit optimisation and preliminary mine planning exercise carried out on the CSP deposits, Koko Massava,
Nhacutse and Poiombo demonstrates that there are substantive, economically exploitable pits to potentially
support a mining operation of approximately 25 years duration.
The global Mining Inventory developed for the Scoping Study and PEA totalled 513Mt at an average THM
grade of 5.4% for a total contained THM of 27.8Mt.
The following recommendations flow from this work package and are in no particular order of importance,
but should be taken for consideration:
• The next phase of work should establish a firm basis for mineral pricing based on off-take agreements so
as to firm up the revenue drivers for the project;
• Consideration of other mining methodologies should be considered such as hydraulic mining as a cost
competitive and practical alternative to dozer trap;
•
• Detailed work needs to be undertaken on the nature of the slimes and the direct impact this has on
flocculent / coagulant usage as well as handling with respect to water recovery, solar drying requirements
and potential for co-disposal;
If the project is deemed to be overall positive in economics from the financial modelling (most likely),
then planning for the next phase of detailed pit optimisation and mine planning needs to be considered;
• As per a Framework Environmental & Social Management Program developped by Coastal
Environmental Services (CES) for MRG as part of the MLAs for Corridor Central and Corridor South, a
significant amount of studies will take place to develop the Environmental Management Plan (EMP) and
Social and Labour Plan (SLP). These studies will feed into future economic studies on the project and
includes:
o Water Quality Monitoring, including hydrogeology study, development of piezometers, bores,
baseline data, etc;
o Meteorology;
o Air Quality Monitoring;
o Noise and Vibration Monitoring;
o Waste Disposal Facilities and Practices;
o Floral and Faunal Monitoring;
o Soil and Rehabilitation Monitoring;
o Occupational Health and Safety Monitoring; and
o Socio-Economic Monitoring.
• The most likely next step is a PFS phase and one of the key deliverables from that level of study will be a
Probable Ore Reserve. In order to undertake that work, there is a considerable amount of background
study work that needs to be completed, including but not restricted to:
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
o Transport study;
o Power study;
o Port development study; and
o
Investigation of alternative mining methodologies.
Forward Looking Statement(s)
28
Statements relating to the estimated or expected future production, operating results, cash flows and costs
and financial condition of MRG’s planned work at the Company’s project and the expected results of such
work are forward-looking statements. Forward-looking statements that are not historical facts and are
generally, but not always, identified by words such as the following: expects, plans, anticipates, forecasts,
believes, intends, estimates, projects, assumes, potential and similar expressions. Forward-looking statements
also include reference to events or conditions that will, would, may, could or should occur. Information
concerning exploration results, metallurgical results and Mineral Resource Estimates may also be deemed to
be forward-looking statements, as it constitutes a prediction of what might be found to be present when and
if a project is developed.
These forward-looking statements are necessarily based upon a number of estimates and assumptions that,
while considered reasonable at the time they are made, are inherently subject to a variety of risks and
uncertainties which could cause actual events or results to differ materially from those reflected in the forward-
looking statements, including, without limitation: uncertainties related to raising sufficient financing to fund
the planned work in a timely manner and on acceptable terms; changes in the planned work resulting from
logistical, technical or other factors; the possibility that results of work will not fulfil projections/expectations
and realise the perceived potential of the Company’s projects; uncertainties involved in the interpretation of
drilling results and other tests and the estimation of Heavy Mineral Sands resources; risk of accidents,
equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility
of environmental issues at the Company’s projects; the possibility of cost overruns or unanticipated expenses
in work programs; the need to obtain permits and comply with environmental laws and regulations and other
government requirements; fluctuations in the price of heavy mineral sands and other risks and uncertainties.
New Very High Valuable Minerals Identified at Azaria Target
MRG announced the laboratory and excellent mineralogical results of the new Azaria Very High VHM Target,
located east of the Company’s Koko Massava deposit within the Corridor Central (11142C) HMS projects
(refer ASX Announcement 10 November 2022).
Laboratory results from 3 aircore drillhole (22CCAC776 – 22CCAC778) drilled within the Azaria Target
confirmed the laboratory THM grades from reconnaissance auger holes, indicating large areas of >3%THM,
while hole 22CCAC777 with 4.38 % THM over 19.5m also confirms areas with >4% THM (also shown by
auger holes 20CCHA505 @ 4.01% THM over 12.0m and 20CCHA195 @ 4.21% THM over 13.0m; both
from surface).
Importantly, excellent mineralogical results from 5 lithologically composited HMC samples from the 3 aircore
holes (refer Table 15) confirmed Azaria as an exciting new large target for very high value HMC situated in
the White Sand lithology. With average VHM (Zircon, Rutile, Leucoxene, Altered Ilmenite and Ilmenite)
results from the 5 samples at 72.4%, the VHM is significantly higher than the average of 41% VHM found
within the Koko Massava MRE area (refer ASX Announcement 16 December 2021) or the average 43%
VHM from the Global Nhacutse and Poiombo MRE area (refer ASX Announcements 8 April 2022). The
additional 9.1% of Titanomagnetite then also results in an economic product of >80% of the HMC within
the Azaria Target. Additionally, the high value Zircon and Rutile Heavy Minerals are also higher than found
in Koko Massava, Nhacutse and Poiombo deposits (Zircon at 2.8% vs the 1.2% in Koko Massava and the
1.3% in Nhacutse and Poiombo; Rutile at 1.9% vs the 1.2% in Koko Massava and the 1.1% in Nhacutse and
Poiombo) (refer ASX Announcements 16 December 2021 and 8 April 2022).
Corridor South (11142C) Drilling Program and Mineralogy
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
29
Ongoing mineralogical studies have identified a very strong lithological boundary in the eastern side of the
Corridor licences (yellow line, Figure 8), with red/red-brown coloured sand to the west of the boundary (Type
1 sand) and white/grey coloured sand to the east of the boundary (Type 2 sand; refer ASX Announcements
11 August 2021, 1 April 2022 and 7 April 2022). The VHM% in the Type 2 sand is as high as 73.37% from
previous studies (refer ASX Announcement 31 July 2020). 3 Aircore holes (22CCAC776 - 22CCAC778) were
drilled in a large area of Type 2 White Sand lithology east of the Koko Massava deposit (refer Figure 8). A
total of 67 samples (inclusive of QAQC samples) were collected at 1.5m intervals and analyses at Western
Geolabs in Perth, Australia (refer Table 14). Aircore drillhole 22CCAC777 returned 4.38% THM over 19.5m;
22CCAC778 returned 3.50% THM over 19.5m and 22CCAC776 returned 3.20% THM over 16.5m, all with
mineralisation from surface. Individual 1.5m intervals showed THM results as high as 8.15% THM.
Figure 8: Map showing the location of the 3 new Aircore holes, all laboratory obtained aircore and auger THM %
drilling grades, the Red/White Sand lithological boundary (yellow line) and the position of the new Azaria Target
within the Corridor Central (11142C) licence.
5 Heavy Mineral Concentrate (HMC) composites, derived from all observed lithologies and from all 3 holes
drilled, were also sent for mineralogical investigations. Mineralogical investigation and analyses were done by
SJMetMin Laboratories. The average total VHM of 72.4%, as well as the high individual valuable minerals,
clearly illustrates the samples are from the Type 2 White Sand.
Table 14: Summary collar and Assay THM% results for 3 Reconnaissance Aircore Holes within new
Azaria Target within Corridor Central (11142C).
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
DRILLHOLE INFORMATION
30
MINERALISATION
LAB RESULTS
HOLE ID
UTM EAST
WGS84
UTM NORTH
WGS84
ELEV'N
(M)
22CCAC776
7255396
22CCAC777
7258587
22CCAC778
7260418
572859
573950
573827
68
79
84
EOH
(M)
33.0
33.0
31.5
DRILL
TYPE
AIRCORE
AIRCORE
AIRCORE
FROM
TO
INTERSECTION
(M)
% LAB
THM
0.0
0.0
0.0
16.5
19.5
19.5
16.5
19.5
19.5
3.20
4.38
3.50
Table 15: Quantitative QEMSCAN mineralogy results from 3 Aircore drillholes within New Azaria Target
at Corridor Central (11142C).
Sample
BH ID
Mineral
Zircon
Rutile
Alt-Ilmenite II (TiO₂
74%)
Alt-Ilmenite I (TiO₂ 62%)
CCMIN
07
CCMIN
08
CCMIN
09
CCMIN
10
CCMIN
11
AC776
AC777
AC778
3.0
2.1
0.5
6.4
3.0
2.0
0.3
6.7
2.8
1.7
0.3
5.5
2.8
1.8
0.4
6.0
2.6
1.8
0.3
5.9
Ilmenite (TiO₂ 52%)
Titanomagnetite
60.4
8.6
62.4
7.9
59.7
12.4
63.5
6.1
60.5
10.6
Hematite
Chromite
Magnetic Others
Andalusite
Non-magnetic Others
3.2
5.4
0.9
6.3
3.3
3.1
4.8
0.7
6.0
3.1
4.6
4.5
0.8
3.3
4.6
1.9
4.4
0.8
7.1
5.2
4.6
4.8
1.1
4.9
3.1
TOTALS:
100.00
100.00
100.00
100.00
100.00
Min
Max
Ave
StDev
Average
2.6
1.7
0.3
5.5
59.7
6.1
1.9
4.4
0.7
3.3
3.1
3.0
2.1
0.5
6.7
63.5
12.4
4.6
5.4
1.1
7.1
5.2
2.8
1.9
0.3
6.1
61.3
9.1
3.5
4.8
0.9
5.5
3.9
0.2
0.2
0.1
0.5
1.6
2.4
1.1
0.4
0.1
1.5
1.0
72.4
Total VHM in
HMC
9.1
Titanomagnetite
18.5
Total Non-VHM in
HMC
New Very High Valuable Minerals Identified at Cihari Target
MRG announced the laboratory and mineralogical results of the new Cihari High VHM Target, located within
the north-east of the Company’s Nhacutse deposit in the Corridor South (11137 C) HMS projects (refer ASX
Announcement 16 November 2022; (also refer Tables 16-17 and Figures 1, 9 and 10).
Laboratory results from 5 aircore drillhole (22CCAC790 – 22CCAC794) within the north-east of the Nhacutse
deposit confirmed the high-grade laboratory THM grades from 2 historic reconnaissance aircore and 1 auger
drillholes. The new approximately 1.3km² Cihari Target has therefore been confirmed (refer Figure 9) as a
significant VHM target.
The 2 historic aircore drillholes returned >4% THM laboratory results (20CSAC540 @ 4.21% THM over
24.0m from surface and 20CSAC587@ 4.22% THM over 30.0m from surface; refer ASX Announcements 24
November 2020 and 7 January 2021), combined by the new results of 22CCAC790 (4.20 % THM over 36.0m
from surface) and 22CCAC794 (4.26 % THM over 36.0m from surface) (refer Table 16) indicates an
approximate 1km² area of >4%THM within the Cihari Target (refer Figure 10). Drill spacing in the Cihari
target is at <500m inter-hole spacing.
Importantly, mineralogical results from 4 lithologically composited HMC samples from the 5 aircore drillholes
(refer Table 17) has confirmed Cihari as an exciting new large target for high value HMC situated in the Red
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
31
Sand lithology. With average VHM (Zircon, Rutile, Leucoxene, Altered Ilmenite and Ilmenite) results from
the 4 samples at 58.1%, plus 21.6% Titanomagnetite, the valuable product of the HMC at Cihari Target is
79.7%. The VHM is significantly higher than the average of 41% VHM found within the Koko Massava MRE
area (refer ASX Announcement 16 December 2021) or the average 43% VHM from the Global Nhacutse and
Poiombo MRE area (refer ASX Announcement 8 April 2022).
Corridor South (11137 C) Drilling Program and Mineralogy
Ongoing mineralogical studies have identified a very strong lithological boundary in the eastern side of the
Corridor licences (yellow line, Figures 9 and 10), with red/red-brown coloured sand to the west of the
boundary (Type 1 sand) and white/grey coloured sand to the east of the boundary (Type 2 sand). The
mineralogical studies have identified very high VHM sand in the white Type 2 sand east of the boundary, but
also found a significant increase in VHM content of the HMC from west to east within the Type 1 red sand,
with significantly higher VHM content of the HMC close to the boundary in the red sand (refer ASX
Announcements 11 August 2021 and 1 April 2022). The VHM% in the 5 aircore drillholes reported here are
situated in the Type 1 red sand, but very close to the lithological boundary (refer Figures 9 and 10). A total of
119 samples (inclusive of QAQC samples) were collected at 1.5m intervals and analyses at Western Geolabs
in Perth, Australia (refer Table 16). Aircore drillhole 22CCAC790 returned 4.20% THM over 36.0m;
22CCAC794 returned 4.26% THM over 36.0m, 22CCAC791 returned 3.37% THM over 36.0m, 22CCAC792
returned 3.72% THM over 16.5m and 22CCAC793 returned 3.37% THM over 18.0m, all with mineralisation
from surface. Drillholes 22CCAC790, ‘791 and ‘794 were still in >3% THM sand at end of hole.
Mineral Concentrate (HMC) composites, derived from all observed lithologies and from all 5 drillholes drilled,
were also sent for mineralogical investigations. Mineralogical investigation and analyses were done by
SJMetMin Laboratories, with results as per Table 17.
Figure 9: Map showing the location of the 5 new Aircore drillholes, all laboratory obtained aircore and auger THM
% drilling grades, the Red/White Sand lithological boundary (yellow line) and the position of the new Cihari Target
within the Corridor South (11137 C) licence.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
32
Figure 10: Map showing the location of the 5 new aircore drillholes and historic aircore and auger drillholes within
the new Cihari Target within the Corridor South (11137 C) licence, as well as Red/White Sand lithological boundary
(yellow line) and the >4% THM area (in blue).
Table 16: Summary collar and Assay THM% results for 3 Reconnaissance aircore drilloles within new
Cihari Target within Corridor South (11137C).
DRILLHOLE INFORMATION
MINERALISATION
LAB RESULTS
HOLE ID
UTM
EAST
WGS84
UTM
NORTH
WGS84
ELEV'N
(M)
EOH
(M)
DRILL
TYPE
FROM
TO
INTERSECTION
(M)
% LAB
THM
22CCAC790
7250017
575442
22CCAC791
7250802
575795
22CCAC792
7250219
576195
22CCAC793
7249893
576184
22CCAC794
7250517
575457
81
78
79
78
82
36.0
AIRCORE
36.0
AIRCORE
33.0
AIRCORE
30.0
AIRCORE
36.0
AIRCORE
0.0
0.0
0.0
0.0
0.0
36.0
36.0
16.5
18.0
36.0
36.0
36.0
16.5
18.0
36.0
4.20
3.37
3.72
3.37
4.26
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
33
Table 17: Quantitative QEMSCAN mineralogy results from 5 aircore drillholes within New Cihari Target
at Corridor South (11137C).
Sample
CCMIN 26
CCMIN 27
CCMIN 28
CCMIN 29
BH ID
Mineral
Zircon
Rutile
Alt-Ilmenite II (TiO₂ 74%)
Alt-Ilmenite I (TiO₂ 62%)
Ilmenite (TiO₂ 52%)
Titanomagnetite
Hematite
Chromite
Magnetic Others
Andalusite
Non-magnetic Others
22CCAC790
&
22CAAC794
22CCAC790
&
22CAAC794
22CCAC791
&
22CAAC792
&
22CSAC793
22CCAC791
&
22CAAC792
&
22CSAC793
Min Max
Ave
StDev
Average
1.9
1.1
0.2
3.9
52.2
22.9
8.5
3.2
0.8
3.4
2.0
1.7
1.0
0.2
3.7
50.8
23.5
9.6
3.5
0.9
3.2
2.0
1.6
1.1
0.2
4.1
51.2
20.8
9.0
4.0
1.0
4.3
2.7
1.7
1.2
0.2
5.6
49.1
19.4
8.0
4.8
1.6
4.9
3.4
1.6
1.0
0.2
3.7
1.9
1.2
0.2
5.6
1.7
1.1
0.2
4.3
49.1
52.2
50.8
19.4
23.5
21.6
8.0
3.2
0.8
3.2
2.0
9.6
4.8
1.6
4.9
3.4
8.8
3.9
1.1
3.9
2.5
0.1
0.1
0.0
0.9
1.3
1.9
0.7
0.7
0.3
0.8
0.7
58.1
Total VHM in
HMC
21.6
Titanomagnetite
20.2
Total Non-VHM in
HMC
TOTALS:
100.00
100.00
100.00
100.00
New VHM Data highlights Malambane Target as a Significant Discovery
MRG announced excellent laboratory and mineralogical results of the Malambane High VHM Target, located
within the east of the Poiombo Mineral Resource Estimate (MRE) area of the Company’s Corridor South
(11137 C) HMS projects (refer ASX Announcement 15 December 2022 and Tables 18 and 19; Figures 11, 12,
13).
Malambane infill aircore drilling was undertaken as part of a drilling program to define the high VHM content
of the Heavy Mineral Concentrate (HMC) close to the well-established red sand/white sand lithological
boundary (refer ASX Announcements 11 August 2021 and 1 April 2022). The drilling took place in the red
sand, close to the lithological boundary (refer Figures 11, 12, 13). Drilling in the Malambane target area
previously was very widely spaced (1,000m by 500m), with the drilling of these latest 15 infill aircore holes
bringing spacing to approximately 500m by 500m.
Laboratory results from the 15 infill aircore drillhole (22CCAC800 – 22CCAC813 and 22CCAC821) returned
excellent results (refer Table 18; Figures 12 and 13), with:
3 holes (22CCAC802, 22CCAC804 and 22CCAC821) with >6% THM,
2 holes (22CCAC805 and 22CCAC810) with 5-6% THM,
4 holes (22CCAC801, 22CCAC806, 22CCAC809 and 22CCAC813) with 4-5% THM, and
•
•
•
• The remaining 6 holes with 3-4% THM, all mineralised from surface (refer Table 18, Figures 11 and
12 ).
The Silt content for the 15 holes is on average 14.3%.
During the completed Corridor Project Scoping Study (refer ASX Announcement 3 November 2022), 2 high
grade pit areas were identified, one west of the town of Poiombo, the other east of Poiombo on the red/white
sand boundary. The western pit has a surface area of approximately 0.9km², while the eastern has a surface
area of approximately 0.3km². The eastern pit was based on the laboratory results of the historical aircore hole
20CSAC352 (refer Figure 4 and ASX Announcement 25 March 2020), this hole drilled in early 2020 was
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
34
twinned during the report period by hole 22CCAC821 (refer Figure 13), with very good correlation in the
results thus clearly proving the very high grade in this area.
The >5% THM grades from new aircore holes 22CCAC802, 22CCAC804, 22CCAC805, 22CCAC810 (refer
Table 18), as well as the 5.93% THM over 36.0m from surface in the historical aircore drillhole 20CSAC349
(refer ASX Announcement 25 March 2020) shows the large approximately 1.3km² high-grade Malambane
Target (refer Figure 13, blue area) situated outside the current Scoping Study pit area in the east of the
Poiombo MRE area (refer Figure 13). This target area is larger than the combined area of the 2 current
Poiombo pit areas in the Scoping Study, thus clearly showing the potential for additional very high grade sand
in the Malambane Target.
Very importantly, the mineralogical results from 14 composite samples of Heavy Mineral Concentrate (HMC)
from the aircore holes returned high Valuable Heavy Mineral (VHM) results (refer Table 19 and Figure 13),
averaging 61.6% VHM (53.9% Ilmenite, 4.7% Altered Ilmenite, 0.2% Leucoxene, 1.9% Zircon and 1.0 %
Rutile) plus 21.0% Titanomagnetite. This clearly confirmed Malambane as not just a very high grade target,
but also as a high value HMC Target. The VHM is significantly higher than the average of 41% VHM found
within the Koko Massava MRE area (refer ASX Announcement 16 December 2021) or the average 43%
VHM from the Global Nhacutse and Poiombo MRE area (refer ASX Announcement 8 April 2022).
Figure 11: Map showing the locality of the 15 infill aircore drillholes in yellow within Corridor South (11137 C)
licence.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
35
Corridor South (11137 C) Drilling Program and Mineralogy
The laboratory THM% and mineralogy results in the 15 aircore drillholes reported here are situated in the
Type 1 red sand (refer ASX Announcements 11 August 2021 and 1 April 2022), but close to the lithological
boundary (refer Figures 11, 12, 13). A total of 366 samples (inclusive of QAQC samples) were collected at
1.5m intervals and analyses at Western Geolabs in Perth, Australia (refer Table 18). Several of the aircore holes
were still in high THM% grade at the end of drilling, with 22CSAC801 at 5.55% THM and 22CSAC809 at
6.88% THM in the final 1.5m intervals; while holes 22CSAC804 and 22CSAC805 were in >4% THM in the
final drilling intersection.
The eastern high-grade pit in the recently completed Corridor Project Scoping Study (refer ASX
Announcement 2 November 2021) was based on the laboratory results of the historical aircore hole
20CSAC352 (refer Figure 4 and ASX Announcement 25 March 2020). This hole was twinned during the
drilling program reported here by hole 22CCAC821 (refer Table 18 and Figure 13). Aircore hole 20CSAC352
was sampled at 3m intervals and had an end of hole depth of 36m, still in 5.02% THM grade; while
22CCAC821 was sampled at 1.5m intervals and had an end of hole depth of 39m. The two holes have the
following laboratory THM results:
o 20CSAC352
o 22CCAC804
– 36.0m 36.0m @ 5.12 % THM, including
– 21.0m 21.0m @ 6.06 % THM.
– 37.5m 37.5m @ 5.43 % THM, including
– 21.0m 21.0m @ 6.41 % THM.
The results from the twin hole 22CCAC821 clearly confirms the presence of the very high THM grade sand
in the Malambane Target.
14 Mineral Concentrate (HMC) composites, derived from all observed lithologies within the drillholes, were
also sent for mineralogical investigations. Mineralogical investigation and analyses were done by SJMetMin
Laboratories (refer Table 18) via XRF, XRD and QEMSCAN analyses.
Figure 12: Map showing 15 new Aircore drillholes only with laboratory obtained Total Heavy Mineral (THM) %
grades. Aircore holes are close to the Red/White Sand lithological boundary (yellow line), with position of the
Poiombo MRE Area outlined in green, the Scoping Study 2 pit areas are shown in orange.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
36
Figure 13: Map showing 15 new Aircore drillholes, as well as historic MRG aircore and hand auger holes with
laboratory obtained Total Heavy Mineral (THM) % grades, the Red/White Sand lithological boundary (yellow line),
the Poiombo MRE outline (green), 2 pit optimisation areas (orange) as well as the new >5% THM Malambane
target area (in blue).
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
37
Table 18: Summary collar and Assay THM% results for 15 Infill aircore drillholes within Malambane Target within
Corridor South (11137C).
DRILLHOLE INFORMATION
MINERALISATION
LAB RESULTS
HOLE ID
UTM
EAST
WGS84
UTM
NORTH
WGS84
ELEV'N
(M)
EOH
(M)
DRILL
TYPE
FROM
TO
INTERSECTION
(M)
% LAB
THM
22CSAC800
7244833
576902
22CSAC801
7244438
577201
81
84
33.0 AIRCORE
36.0 AIRCORE
22CSAC802
7244004
576798
79
34.5 AIRCORE
22CSAC803
7244561
576478
75
34.5 AIRCORE
22CSAC804
7244805
575925
87
36.0 AIRCORE
22CSAC805
7244559
576061
22CSAC806
7244178
575789
22CSAC807
7244363
575621
22CSAC808
7244556
575495
88
76
79
78
34.5 AIRCORE
34.5 AIRCORE
34.5 AIRCORE
34.5 AIRCORE
22CSAC809
7244867
575235
85
37.5 AIRCORE
22CSAC810
7243394
577269
86
34.5 AIRCORE
22CSAC811
7242513
577984
116
34.5 AIRCORE
22CSAC812
7243237
578091
22CSAC813
7242856
578427
22CSAC821
7243635
577806
75
76
72
34.5 AIRCORE
34.5 AIRCORE
39.0 AIRCORE
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
30.0
0.0
0.0
0.0
0.0
0.0
31.5
36.0
33.0
21.0
30.0
22.5
16.5
19.5
33.0
30.0
34.5
37.5
37.5
27.0
21.0
31.5
21.0
19.5
31.5
36.0
33.0
21.0
30.0
22.5
16.5
19.5
33.0
30.0
34.5
37.5
7.5
27.0
21.0
31.5
21.0
19.5
3.67
4.57
5.72
6.03
3.83
5.54
6.09
5.05
4.47
3.66
3.95
4.91
7.42
5.23
3.01
3.22
4.67
6.41
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
38
Table 19: Quantitative QEMSCAN mineralogy results from aircore drillholes within Malambane Target at Corridor
South (11137C).
Sample CCMIN 35 CCMIN 36 CCMIN 37 CCMIN 38 CCMIN 39 CCMIN 40 CCMIN 41 CCMIN 42
BH ID
22CSAC800,
22CSAC801
22CSAC800,
22CSAC801
22CSAC802,
22CSAC803
22CSAC802,
22CSAC803
22CSAC804,
22CSAC805
22CSAC804,
22CSAC805
22CSAC806,
22CSAC807,
22CSAC808,
22CSAC809
22CSAC806,
22CSAC807,
22CSAC808,
22CSAC809
CCMIN
43
CCMIN
44
22CSAC810
22CSAC810
Mineral
Zircon
Rutile
Alt-Ilmenite II (TiO₂
74%)
Alt-Ilmenite I (TiO₂
62%)
Ilmenite (TiO₂
52%)
Titanomagnetite
Hematite
Chromite
Magnetic Others
Andalusite
Non-magnetic
Others
VHM in HMC
Titanomagnetite
in HMC
Non-VHM in HMC
Total
2.1
1.3
0.2
5.5
54.5
20.2
7.8
3.7
0.7
2.2
1.8
63.6
20.2
16.2
1.5
1.0
0.2
4.7
53.2
22.5
8.7
4.3
0.8
1.4
1.5
60.7
22.5
16.7
1.9
0.9
0.2
3.8
57.0
20.0
7.9
4.4
0.7
1.8
1.5
63.8
20.0
16.2
1.8
1.0
0.2
4.0
52.8
23.0
8.2
4.0
0.8
2.1
2.2
59.7
23.0
17.3
1.7
1.1
0.2
5.0
56.5
19.1
7.5
3.9
0.7
2.5
1.7
64.5
19.1
16.4
1.8
1.1
0.2
4.6
53.0
21.7
7.9
3.1
0.8
3.4
2.4
60.7
21.7
17.6
1.8
0.8
0.1
4.6
55.6
21.1
8.6
3.6
0.7
1.1
1.9
63.0
21.1
15.9
1.6
0.9
0.1
4.9
53.8
22.2
9.2
3.3
0.7
1.5
1.8
61.3
22.2
16.4
2.1
1.0
0.2
5.7
55.8
18.3
7.0
4.2
1.1
2.4
2.1
64.8
18.3
16.9
1.7
1.0
0.2
4.4
49.8
23.9
8.2
2.7
1.0
4.3
2.8
57.1
23.9
19.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Sample CCMIN 45 CCMIN 46
BH ID
22CSAC811
22CSAC811
CCMIN 47
22CSAC812,
22CSAC813
CCMIN 48
22CSAC812,
22CSAC813
Mineral
Zircon
Rutile
Alt-Ilmenite II
(TiO₂ 74%)
Alt-Ilmenite I
(TiO₂ 62%)
Ilmenite (TiO₂
52%)
Titanomagnetite
Hematite
Chromite
Magnetic Others
Andalusite
Non-magnetic
Others
VHM in HMC
Titanomagnetite
in HMC
Non-VHM in
HMC
2.2
1.3
0.2
4.7
53.7
19.5
8.0
3.7
0.8
3.7
2.2
62.1
19.5
18.4
1.5
1.0
0.2
4.2
50.4
21.9
7.4
3.4
1.3
4.5
4.2
57.3
21.9
20.8
2.1
1.1
0.2
5.8
55.8
18.6
7.1
3.6
0.8
2.5
2.3
65.0
18.6
16.4
2.0
0.9
0.1
4.3
52.0
21.7
8.5
3.6
1.1
3.3
2.5
59.3
21.7
19.0
Total
100.0
100.0
100.0
100.0
Min
Max
Ave
StDev
Average
1.5
0.8
0.1
3.8
2.2
1.3
0.2
5.8
1.9
1.0
0.2
4.7
49.8
57.0
53.9
18.3
23.9
21.0
7.0
2.7
0.7
1.1
1.5
9.2
4.4
1.3
4.5
4.2
8.0
3.7
0.9
2.6
2.2
0.2
0.1
0.0
0.6
2.2
1.7
0.6
0.5
0.2
1.1
0.7
61.6
Total VHM in HMC
21.0
Total Titanomagnetite in
HMC
38.4
Total Non-VHM in HMC
100.00
Very High Mineral Assemblage Intersected in Aircore Drilling at Viaria and Zulene Targets
MRG announced the laboratory Total Heavy Mineral (THM) and mineralogical results of infill aircore drilling
within the Viaria and Zulene Targets, located within the south of the Company’s Corridor South (11137 C)
HMS Project (refer ASX Announcement 19 December 2022; Tables 20 and 21; Figures 1, 14 and 15).
Laboratory results from 7 infill aircore holes (comprising 4 holes at Zulene Target and 3 holes at Viaria Target)
within Mining Licence Application (MLA) Corridor South (11137 C) have delivered some high THM results
(refer Table 20, Figure 15). The results from hole 22CCAC815 in Viaria in particular is very encouraging. To
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
39
date the Viaria target only had 1 aircore drilled. Even with the inclusion of these latest 3 holes, the area still
remains totally under-drilled, however it now contains a significant >4% THM target of approximately 1.4
km² (refer Figure 15).
Importantly, mineralogical results from 6 composite HMC samples for Viaria and 5 composite HMC samples
Zulene have confirmed the high VHM content of the HMC (refer Tables 21 and 22) in the south and close
to the red sand/white sand lithological boundary. The high VHM content of the HMC for Viaria and the large
>4% THM target area has confirmed Viaria as an exciting large target for high value HMC situated in the Red
Sand lithology (refer Figure 15). The Viaria Target is also >1.5km from any town. With average VHM (Zircon,
Rutile, Leucoxene, Altered Ilmenite and Ilmenite) results at Viaria at 63.5%, plus 19.1% Titanomagnetite, the
valuable product of the HMC at Viaria Target is 82.6%. The VHM is significantly higher than the average of
41% VHM found within the Koko Massava MRE area (refer ASX Announcement 16 December 2021) or the
average 43% VHM from the Global Nhacutse and Poiombo MRE area (refer ASX Announcement 8 April
2022).
Figure 14: Map showing the locality of the 3 Viaria and 4 Zulene infill aircore drillholes in yellow within Corridor
South (11137 C) licence.
Viaria and Zulene Infill Aircore Drilling Program and Mineralogy
The Viaria and Zulene infill aircore drilling followed on from other targets generated – Azaria and Chihari -
and excellent results from the Malambane Target from ongoing aircore drilling and mineralogical studies in
and around the very strong lithological boundary in the eastern side of the Corridor licences (yellow line,
Figures 14 and 15), as well in the south of within Corridor South (11137 C) where the Viaria and Zulene
targets are situated.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
40
Viaria is close to the red sand/white sand boundary, while Zulene Target is in the southwestern corner of the
licence (refer Figure 14). The laboratory THM% and mineralogy results in the 7 aircore drillholes (total 240.0m
drilled), 3 in Viaria and 4 in Zulene, reported here are situated in the Type 1 red sand (refer ASX
Announcements 11 August 2021 and 1 April 2022), but close to the lithological boundary (refer Figures 14
and 15). A total of 167 samples (inclusive of QAQC samples) were collected at 1.5m intervals and analyses at
Western Geolabs in Perth, Australia (refer Table 20).
6 Heavy Mineral Concentrate (HMC) composites samples from Varia (refer Table 21) and 5 HMC composites
samples from Zulene (refer Table 22), derived from all observed lithologies within the drillholes, were sent
for mineralogical investigations. Mineralogical investigation and analyses were done by SJMetMin Laboratories
via XRF, XRD and QEMSCAN analyses.
Figure 15: Map showing the location and lab obtained grades of the 7 new Aircore drillholes, all laboratory
obtained aircore and auger THM % drilling grades, the Red/White Sand lithological boundary (yellow line) and the
position of the Viaria and Zulene >4% THM Targets within the Corridor South (11137 C) licence.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
41
Table 20: Summary collar and Assay THM% results for 7 Infill aircore drilloles within the Viaria and
Zulene Targets within Corridor South (11137C).
DRILLHOLE INFORMATION
MINERALISATION
LAB RESULTS
HOLE ID
UTM EAST
WGS84
UTM NORTH
WGS84
ELEV'N
(M)
EOH
(M)
DRILL
TYPE
FROM
TO
INTERSECTION
(M)
% LAB
THM
22CSAC814
7238544
580718
22CSAC815
7237901
580323
22CSAC816
7238151
22CSAC817
7236791
22CSAC818
7236929
22CSAC819
7236204
22CSAC820
7236208
581308
576708
576024
576704
576248
83
89
97
62
51
66
73
36.0
AIRCORE
33.0
AIRCORE
33.0
34.5
34.5
34.5
34.5
AIRCORE
AIRCORE
AIRCORE
AIRCORE
AIRCORE
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
34.5
19.5
15.0
22.5
34.5
34.5
28.5
24.0
34.5
19.5
15.0
22.5
34.5
34.5
28.5
24.0
3.15
3.96
4.05
3.54
2.38
2.46
3.15
3.82
Table 21: Quantitative QEMSCAN mineralogy results from 3 aircore drillholes within the Viaria Target.
Sample
Target
CCMIN
49
CCMIN
50
CCMIN
51
CCMIN
52
CCMIN
53
CCMIN
54
Viaria
Viaria
Viaria
BH ID
AC814
AC814
AC815
AC815
AC816
AC816
Mineral
Zircon
Rutile
Alt-Ilmenite II
(T ₂ %)
Alt-Ilmenite I
(T ₂ %)
m (T ₂
52%)
Min
Max
Ave
StDev
Average
2.1
1.2
0.2
5.2
2.2
1.2
0.2
5.4
2.0
1.3
0.2
5.6
2.1
1.4
0.2
5.2
1.7
1.3
0.2
4.7
2.4
1.4
0.2
4.7
1.7
1.2
0.2
4.7
2.4
1.4
0.2
5.6
2.1
1.3
0.2
5.1
55.3
55.5
55.0
54.3
56.1
52.6
52.6
56.1
54.8
0.3
0.1
0.0
0.4
1.2
63.5
Total VHM in
HMC
Titanomagnetite
18.9
19.1
18.4
19.6
18.9
19.8
18.4
19.8
19.1
0.5
19.1
Total
Titanomagnetite
in HMC
Hematite
Chromite
Magnetic Others
Andalusite
Non-magnetic
Others
7.1
3.3
0.9
3.9
1.9
6.7
3.5
1.1
3.2
2.0
7.4
3.9
0.9
3.6
1.8
7.5
3.5
0.8
3.4
1.9
7.4
3.4
0.9
3.3
2.0
7.5
4.0
1.0
3.9
2.4
6.7
3.3
0.8
3.2
1.8
7.5
4.0
1.1
3.9
2.4
7.3
3.6
0.9
3.6
2.0
0.3
0.3
0.1
0.3
0.2
VHM in HMC
64.1
64.5
64.0
63.2
64.0
61.3
36.5
Total Non-VHM
in HMC
Titanomagnetite
in HMC
Non-VHM in
HMC
18.9
19.1
18.4
19.6
18.9
19.8
100.0
17.1
16.5
17.6
17.2
17.1
18.9
Total
100.0
100.0
100.0
100.0
100.0
100.0
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
42
Table 22: Quantitative QEMSCAN mineralogy results from 3 aircore drillholes within the Zulene Target
at Corridor South (11137C).
Sample
CCMIN 55
CCMIN 56
CCMIN 57
CCMIN 58
Target
BH ID
Zulene
Zulene
AC817,
AC819
AC817,
AC819
AC818,
AC820
AC818,
AC820
Mineral
Zircon
Rutile
Alt- m (T ₂
74%)
Alt- m (T ₂
62%)
m (T ₂ %)
Titanomagnetite
Hematite
Chromite
Magnetic Others
Andalusite
Non-magnetic Others
VHM in HMC
Titanomagnetite in
HMC
Non-VHM in HMC
Total
1.8
1.3
0.2
5.2
53.9
19.5
7.4
3.6
1.0
3.9
2.3
62.3
19.5
18.2
2.2
1.3
0.2
5.4
55.4
19.4
7.2
3.5
1.1
2.6
1.8
64.5
19.4
16.0
2.2
1.2
0.2
5.4
55.5
19.0
8.1
3.7
0.9
2.2
1.7
64.4
19.0
16.6
Min Max
Ave
StDev
Average
1.8
2.2
2.0
1.2
1.3
1.2
0.2
0.1
0.2
0.2
0.2
0.0
62.6
Total VHM in HMC
5.2
5.4
5.3
0.1
1.9
1.2
0.2
5.3
50.6
50.6
55.5
53.8
2.3
20.3
19.0
20.3
19.6
0.5
19.6
Total Titanomagnetite in
HMC
6.9
8.1
7.4
3.5
4.3
3.8
0.9
1.7
1.1
2.2
4.5
3.3
0.5
0.4
0.4
1.1
1.7
3.2
2.2
0.7
6.9
4.3
1.7
4.5
3.2
59.1
20.3
20.6
37.4
Total Non-VHM in HMC
100.0
100.0
100.0
100.0
100.0
Marao Aircore Drilling
Excellent analytical results were reported from a reconnaissance aircore hole drilling program at three targets
previously defined by MRG at its Marao (6842L) Heavy Mineral Sands licence, particularly at Mogonde Target
(refer ASX Announcement 12 December 2022.
Three targets, Magonde, Maduacua and Mandende (refer ASX Announcements 18 March 2021, 8 July
2021 and 18 June 2021) were generated via reconnaissance hand auger grid drilling, and the aircore drilling
took place at 1km inter-drill line and 500m inter borehole spacing. The very widely spaced reconnaissance
aircore drillholes were drilled in all 3 targets (Figures 16 and 17).
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
43
Figure 16: Reconnaissance aircore drillholes at Marao (6842L), position of the Magonde, Mandende and Maduacua
Targets as well as 2 mineralogy data points.
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
44
Figure 17: Aircore holes and auger holes drilled at Marao (6842L).
Given multiple aircore holes returned >3%THM grades within the holes, the three targets were proven as
prospective, with the prospectivity of Marao further supported given the mineralogy is better than that
reported at Koko Massava, Nhacutse and Poiombo. Magonde in particular was established as a very high
grade target.
Magonde Aircore Drilling Delivers Very High VHM Mineralogy Results
MRG announced excellent mineralogy results from heavy mineral concentrate (HMC) samples sourced from
three target testing aircore drillholes within MRG’s Magonde Target in the Marao (6842L) Heavy Mineral
Sands licence (Figures 1, 18 and 19; refer ASX Announcements 16 March 2022 and 21 July 2022). MRG also
announced the laboratory results for hand auger drillholes in the Magonde Target area.
The Magonde Target was generated via visual estimated THM grade of reconnaissance hand auger grid drilling
(Figure 19, refer ASX Announcement 18 March 2021). Three very widely spaced target testing aircore
drillholes were then drilled during March 2022 within the Magonde Target (Figures 18 and 19; refer ASX
Announcement 16 March 2022), with the highest laboratory derived grade of 6.04% THM over 27.0m from
surface returned from 22MUAC003 within the Target (Figures 18 and 19; refer ASX Announcement 21 July
2022).
Laboratory grade from selected hand auger drillholes delivered five drillholes with >3% THM, which very
clearly defines the Magonde Target as a >3% THM Target, with the target area 2.6 km² (refer Figure 19, red
area). With two of the auger drillholes returning >4% THM results from surface (21MUHA014 and
21MUHA015), a higher >4% THM grade target including the very high grade aircore drillhole 22MUAC003
has an area of 1.1km² (refer Figure 19, yellow area).
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
45
Five Composite samples were generated from HMC of all three aircore drillholes, covering all interpreted
lithologies (red sand at surface, grey sand at depth, refer Table 23). The mineralogical results follow the very
encouraging results from initial grab sample from within the Magonde target (sample 20MR03; refer Figure
19 and ASX Announcement 27 April 2021) that showed 50.05% VHM content results (Ilmenite, Altered
Ilmenite, Rutile and Zircon) from Scanning Electron Microscopy (SEM).
The mineralogical results from the aircore HMC composites show even higher VHM results from the red
sand lithology than the grab samples, with between 58.2% and 61.8% VHM in the Magonde Target.
Additionally, Titanomagnetite content of the HMC in these samples are between 14.2% and 15.1%. The VHM
+ Titanomagnetite product is therefore in the 73.4% to 76.5% of the HMC range. The red sand portion of
22MUAC003 with the very high VHM has 5.25% THM from surface to 19.5m. This clearly shows the
potential for high grade and high value HMC within the Magonde Target in Marao, with follow-up closer
spaced aircore drilling and additional mineralogical work to follow in 2023.
The VHM % for the Magonde red sand lithology is significantly higher than results reported in MRG’s
updated Koko Massava JORC Mineral Resource estimate of average 41% VHM of the HMC for the high-
grade area (refer ASX Announcement 16 December 2021) and from the updated Nhacutse and Poiombo
JORC Mineral Resource Estimate at average 45% and 46 % VHM respectively of the HMC within the >4%
THM areas (refer ASX Announcement 8 April 2022).
The low VHM grey sand lithology intersected at depth in Magonde (samples Mumin 02 and Mumin 05; Table
231) has not been seen in any other MRG Project to date. This low VHM lithology, that still has high VHM
grade, will be studied further during infill aircore drilling.
Figure 18: Target testing aircore drillholes at Marao 6842L, with the 3 holes within Magonde Target clearly shown
(22MUAC001 to 22MUAC003).
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
46
Figure 19: Laboratory results for aircore holes and Visually Estimated (VIS EST) results for auger holes drilled at
Marao (6842L) (refer ASX Announcement 21 July 2022).
MRG Metals Limited
Consolidated Financial Statements
30 June 2023
47
Table 23: Summary mineralogy data of 5 composite samples derived from QEMSCAN, XRF and XRD
analyses for 3 target testing aircore drillholes at Magonde Target, Marao (6842L).
Sample
Locality
Target
BH ID
Mumin
01
Mumin
02
Mumin 03
Mumin
04
Mumin
05
Marao
Marao
Marao
Magonde
Magonde
Magonde
22MUAC001
22MUAC002
22MUAC003
Interval (m)
Lithology
0.0 -
27.0
Red
Sand
27.0 -
34.5
Gray
Sand
0.0 - 12.0
Red Sand
0.0 -
19.5
Red
Sand
19.5 -
25.5
Gray
Sand
Mineral
Zircon
Rutile
Leucoxene
Altered Ilmenite
Ilmenite
Min Max
Ave
StDev
Average
2.6
2.0
0.3
6.9
1.2
1.2
0.1
2.8
2.8
2.4
0.4
7.4
2.5
2.0
0.2
6.0
1.4
1.2
0.2
4.7
50.0
22.0
48.9
47.6
24.2
1.2
1.2
0.1
2.8
2.8
2.4
0.4
7.4
2.1
1.8
0.3
5.5
0.7
0.5
0.1
1.8
22.0
50.0
38.5
14.1
48.16
Total VHM in
HMC
Titanomagnetite
14.6
9.2
14.2
15.1
8.6
8.6
15.1
12.4
3.2
12.35
Total
Titanomagnetite
in HMC
Hematite
Chromite
Magnetic Others
Andalusite
Non-magnetic Others
4.2
3.4
2.1
9.1
4.8
VHM in HMC
Titanomagnetite in
HMC
61.8
14.6
Non-VHM in HMC
23.5
2.1
2.5
27.1
9.4
22.6
27.2
9.2
63.6
4.7
3.2
1.6
10.4
4.1
61.8
14.2
24.0
3.4
3.6
5.7
6.4
7.5
58.2
15.1
26.6
1.7
2.5
1.7
2.5
4.7
3.6
3.2
3.0
1.3
0.5
30.1
1.6
30.1
13.3
14.1
39.49
Total Non-VHM
in HMC
2.4
9.0
4.5
4.5
10.4
8.0
4.1
22.6
12.0
20.9
31.7
8.6
59.7
Total
100.0
100.0
100.0
100.0
100.0
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
Metallurgical Testwork
48
During the June quarter, MRG completed highly successful metallurgical testwork on non-magnetic (nonmag)
concentrate that had been assigned a low value in the existing PEA. These metallurgy results are expected to
significantly and positively impact the economic model to be associated with an updated PEA.
Previous Scoping and PEA testwork conducted at IHC Mining on a bulk sample generated from the Koko Massava
deposit produced a non-magnetic concentrate as a potential product stream. The valuable mineral in the concentrate
was predominantly zircon, with rutile as a secondary product. The concentrate was degraded by high grades of U and
Th associated with monazite and with aluminosilicates.
The objective of the sighter testwork was to investigate potential product grades in the concentrate and to identify
potential issues that would impact the grade and recoveries of those products. The sample used for the sighter testwork
(Figure 20) was a composite of processing streams reconstituted to a non-magnetic concentrate by IHC Mining (Table
24).
The sighter metallurgical testing involved single stage RER magnetic separation on the non-magnetic concentrate,
followed by primary stage of electrostatic separation on the nonmag stream to further isolate potential zircon and rutile
products by to separate the TiO2 bearing minerals from the zircon. The two streams were then processed through
stages of gravity, electrostatic and magnetic separation to isolate potential zircon and rutile products.
The RER magnetic separation work resulted in upgrading the nonmag by a significant reduction in mass of the nonmag
concentrate by removing deleterious minerals such as aluminosilicates and Monazite, as well as significant reductions
in Fe2O3 and Cr2O3. The electrostatic separation, followed by gravity, electrostatic and magnetic separation, resulted
in a number of near Zircon and Rutile product streams. Further optimised testing will result in upgrading the Zircon
and Rutile streams further. Testwork to optimise a Monazite product from the reject magnetic stream needs to still
take place.
TZMI calculated value for combined Zircon and Rutile non-magnetic products are now more than USD$900 per ton,
up from approximately USD$350 per ton used in the PEA, with additional work to be done, including on the Monazite
in the magnetic rejects, to determine value.
TZMI estimated the unit prices of ZrO2 and TiO2 at US$15.95 per % and US$8.12 per % respectively, multiply the
values against the ZrO2 (47.9%) and TiO2 (15.4%) content of the non-magnetic concentrate, to a total value of more
than USD1,000 per ton.
Further metallurgy results are expected shortly from sighter testwork at newly discovered Azaria and Malambane
deposits, where substantially higher VHM mineralogy has been discovered and is being progressed in anticipation of
providing further upside into an updated PEA.
Summary of testwork and results
The following comments are made based on the results of the initial sighter testwork on the non-magnetic concentrate:
• The grade of the reconstituted non-magnetic sample closely matched the results from IHC Mining for the
same sample (Table 24). The exception to this is the CaO grade of 0.59% compared to the 0.05% in the
Reported (IHC) assay. While this may warrant further investigation, the distribution of CaO in the primary
separation stage was 85% reporting to mag rejects, therefore did not adversely affect the grades of products
in the context of this sighter.
• The non-magnetic concentrate had a ZrO2+HfO2 grade of 30%, equating to an approximate zircon content
of 45.5%. The grade of TiO2 in the sample was 16.7% and the grade of Fe2O3 was 14.1% (Refer ASX
Announcement 31 August 2022).
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
49
• The principle contaminant minerals in the concentrate were aluminosilicates, both para-magnetic and non-
magnetic with the associated oxides Al2O3, SiO2 and Fe2O3. Additionally, the sample had a high grade of
monazite, associated with the oxides CeO2, P2O5 and Th. A calculation of the monazite content based on
an approximate CeO2 content of 26% in monazite was 7.1%. The combined grades of U and Th in the was
5,293 ppm.
• The primary process tested in the sighter metallurgical testwork was a single stage of magnetic separation
using an RER magnetic separator (Figure 20). The process sought to reduce the grades of U and Th through
the rejection of monazite to a magnetic reject. Additionally, this process would reduce the mass and increase
the grades of zircon in rutile in the concentrate through the rejection of para-magnetic gangue mineral.
Figure 20: Met testwork flowsheet
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
50
• The processing rejected 39.8% of the mass, 97.5% of the Fe2O3, 95.1% of the CeO2 and 75.6% of the Al2O3
to the magnetic stream with a loss of 4% of the ZrO2 (Table 25). The non-magnetic stream had a ZrO2+HfO2
grade of 47.87% equating to an approximate zircon content of 72.5%.
• There was a recovery of 60.3% of the TiO2 to the non-magnetic stream (Table 25). The ratio of TiO2 to Fe2O3
in the non-magnetic stream indicates that this is associated with high TiO2 and low Fe2O3 mineral, rutile and
HiTi/leucoxene. The TiO2 reporting to the magnetic fraction is likely secondary type ilmenite although this
could be further investigated in future testwork. The grades and distributions of the Cr2O3 are notable in
regard to this with 98.3% of the Cr2O3 reporting to the magnetics at a grade of 4.05% (Table 25).
• The distributions of CeO2 and P2O5 indicate that greater than 90% of the monazite has reported to the
magnetic rejects (Table 25). The combined grades of U and Th in the nonmagnetic concentrate are reduced
from 5,293ppm in the pre-RER concentrate (Figure 21) to 1,212ppm in the post RER concentrate (Figure
22). While this grade exceeds a typical target for shipping the results do indicate the potential to greatly reduce
the U and Th through a stage of magnetic separation.
• Further sighter tests were conducted on a sub-split of the RER non-magnetic concentrate using an IRM
(Figure 20). The results of these tests indicate that magnetic separation can be used to reduce the grades of U
and Th in the non-magnetic concentrate with the additional benefit of increasing the grade of zircon (Figures
22 and 23). However, the recovery of zircon is likely to be impacted as lower grades are targeted.
• Post RER separation, the non-magnetic stream was processed to isolate potential zircon and rutile products
(Figure 22). The processing involved a primary stage of electrostatic separation to separate the TiO2 bearing
minerals from the zircon. The two streams were then processed through stages of gravity, electrostatic and
magnetic separation.
• The processing recovered a high-grade zircon product with a ZrO2+HfO2 grade of 66.2% (Table 26). The
grades of TiO2 and Fe2O3 in this were less than 0.1% and the grade of Al2O3 was 0.12%. The combined grade
of U and Th was 398ppm (Table 26).
• A number of near zircon product grade streams were generated in the processing (Table 24, 26 and 27). These
were degraded by varying grades of TiO2, Fe2O3, Al2O3 and U and Th. This initial processing indicates that
aluminosilicates, notably kyanite, are likely to have the greatest impact on zircon recovery. The un-optimised
wet gravity processing conducted in this initial sighter does however indicate that much of the Al2O3 should
be rejectable through an optimised processing.
• The impact of monazite on the zircon product grade and recovery will likely be reduced with an optimised
rejection of this mineral in the primary magnetic separation of the non-magnetic concentrate. It is not possible
to comment on the potential to reduce the TiO2 and Fe2O3 grades in the near zircon product grade streams
in this stage of testwork, however it is notable that the final zircon stream recovered had grades of less than
0.1% without the inclusion of acid leaching.
• The processing recovered a high-grade rutile product with a TiO2 grade of 95.5% and Fe2O3 grade of 0.49%
(Table 28). The product had a SiO2 grade of 1.26% and a ZrO2 grade of 0.5%. Other contaminants were V2O5
at 0.39% and Cr2O3 at 0.23%. The combined grade of U and Th was 60ppm (Figure 21).
• A number of near rutile product grade streams were generated in the processing (Table 28). These were
degraded by varying grades of SiO2, Al2O3 and ZrO2 associated with misreporting non-conductors from the
primary electrostatic separation. It is likely that an optimised separation in this stage of separation will reduce
the impact of these non-conductors on the grade and recoveries of rutile.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
Table 24: Sighter test head grade
51
Oxide
TiO2
Fe2O3
Al2O3
SiO2
Cr2O3
ZrO2+HfO2
CaO
MgO
MnO
CeO2
Th XRF
U XRF
K2O
Nb2O5
P2O5
SO3
V2O5
LOI @1000°C
%
%
%
%
%
%
%
%
%
%
ppm
ppm
%
%
%
%
%
%
Reported
(IHC)
Received
Grades
16.7
14.3
5.98
23.5
1.42
29.5
0.05
0.47
0.25
1.65
15.35
14.1
6.21
23.2
1.64
30.0
0.59
0.53
0.27
1.85
4634
4840
464
0.06
0.09
1.79
0.51
0.11
N/R
453
0.06
0.08
1.99
0.05
0.09
0.47
Table 25: RER separation results
TiO2 (%)
Fe2O3 (%)
ZrO2+HfO2 (%)
Al2O3 (%)
SiO2 (%)
Stream
Mass (%)
Mag
Non-mag
39.8
60.2
Grade Distr. Grade Distr. Grade
Distr. Grade Distr. Grade Distr.
15.30
39.7
34.50
97.5
3.03
4.0
11.8
75.6
11.4
19.5
15.35
60.3
0.58
2.5
47.87
96.0
2.52
24.4
31.1
80.5
Calc. Total
100.0
15.33
100.0
14.07
100.0
30.04
100.0
6.21
100.0
23.2
100.0
CeO2 (%)
P2O5 (%)
Th (ppm)
U (ppm)
Cr2O3 (%)
Grade Distr. Grade Distr. Grade Distr. Grade Distr. Grade Distr.
4.42
95.1
4.63
92.5
11000
90.4
470
41.3
4.05
98.3
0.15
4.9
0.25
7.5
770
9.6
442
58.7
0.05
1.7
1.85
100.0
1.99
100.0
4839
100.0
453
100.0
1.64
100.0
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
52
Table 26: Initial sighter zircon processing; individual stream grades and recoveries
Zircon
Gravity
Tail 2
Zircon
Conductors
Zircon
Gravity
Tail 1
Zircon
Mags
Zircon
Oxide
Mass
% N/M conc.
ZrO2+HfO2
TiO2
Fe2O3
Al2O3
SiO2
Cr2O3
ZrO2+HfO2
CaO
MgO
MnO
CeO2
Th XRF
U XRF
K2O
Nb2O5
P2O5
SO3
V2O5
LOI
@1000°C
%
%
%
%
%
%
%
%
%
%
%
ppm
ppm
%
%
%
%
%
%
Recoveries
1.60
3.45
Grades
0.6
0.25
0.21
32.3
0.01
64.6
0.10
0.0
0.02
0.2
893
373
0.01
0.01
0.3
0.2
0.01
0.45
7.46
16.4
0.07
0.09
0.12
32.8
0.00
66.2
0.04
0.00
0.01
0.02
152
246
0.01
0.00
0.11
0.09
0.00
0.30
2.49
5.1
0.11
0.41
0.42
31.4
0.01
61.9
0.20
0.02
0.02
1.01
3188
657
0.02
0.01
1.12
0.10
0.02
0.81
13.93
13.80
29.26
27.5
0.1
0.34
1.41
32.7
0.01
63.1
0.15
0.0
0.02
0.1
793
527
0.02
0.01
0.3
0.0
0.01
0.62
0.22
0.42
2.69
34.2
0.01
59.9
0.19
0.02
0.03
0.12
750
580
0.03
<0.01
0.24
0.05
0.01
0.76
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
53
Table 27: Initial sighter zircon processing streams; cumulative grades and recoveries
Oxide
Rutile
Rutile
para-mag
Rutile
HTR Mid
Rutile
IRM Mag
Rutile
Non-
cond.
Rutile
Gravity
Tail 2
Rutile
Gravity
Tail 1
Mass
TiO2 (total)
TiO2 (non-mag post RER)
TiO2
Fe2O3
Al2O3
SiO2
Cr2O3
ZrO2+HfO2
CaO
MgO
MnO
CeO2
Th XRF
U XRF
K2O
Nb2O5
P2O5
SO3
V2O5
LOI @1000°C
% N/M
conc.
%
%
%
%
%
%
%
%
%
%
%
%
ppm
ppm
%
%
%
%
%
%
1.01
6.28
10.4
95.50
0.49
0.26
1.3
0.23
0.46
0.02
0.72
4.41
7.32
93.4
1.11
0.48
1.9
0.23
0.47
0.03
<0.01
<0.01
0.01
<0.01
30
30
0.04
0.35
<0.01
<0.01
0.39
0.08
0.02
0.01
40
40
0.08
0.61
0.01
0.01
0.30
0.16
Recoveries
0.33
1.99
3.3
Grades
92.50
0.94
0.48
2.6
0.25
1.77
0.03
<0.01
0.02
<0.01
80
60
0.07
0.42
0.02
<0.01
0.32
0.22
0.09
0.48
0.80
80.6
10.70
0.88
2.8
0.58
1.04
0.08
0.1
0.20
0.02
100
40
0.09
0.62
0.04
0.06
0.22
0.07
2.51
12.17
20.2
74.40
0.90
0.57
8.2
0.19
12.56
0.10
<0.01
0.02
0.09
500
260
0.08
0.32
0.12
0.03
0.26
0.52
1.93
10.11
16.76
80.2
1.34
0.95
7.8
0.20
7.19
0.08
0.0
0.03
0.07
320
180
0.13
0.39
0.09
0.02
0.22
0.58
5.18
21.67
35.9
64.10
1.75
2.36
14.2
0.17
14.42
0.14
0.03
0.04
0.09
480
330
0.16
0.35
0.13
0.05
0.16
0.84
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
54
Table 28: Initial sighter rutile processing streams; cumulative grades and recoveries
Oxide
Rutile 1 Rutile 2
Rutile
3
Rutile
4
Rutile
5
Rutile
6
Rutile
7
Mass
TiO2 (total)
TiO2 (non-mag post RER)
TiO2
Fe2O3
Al2O3
SiO2
Cr2O3
ZrO2+HfO2
CaO
MgO
MnO
CeO2
Th XRF
U XRF
K2O
Nb2O5
P2O5
SO3
V2O5
LOI @1000°C
% N/M
conc.
%
%
%
%
%
%
%
%
%
%
%
%
ppm
ppm
%
%
%
%
%
%
Recoveries
1.7
10.7
17.7
Grades
94.6
0.75
0.35
1.51
0.23
0.5
0.02
2.1
12.7
21.0
94.28
0.78
0.37
1.69
0.23
0.7
0.03
1.0
6.3
10.4
95.50
0.49
0.26
1.26
0.23
0.5
0.02
2.2
13.2
21.8
93.7
1.20
0.39
1.73
0.25
0.7
0.03
4.7
25.3
42.0
83.32
1.04
0.49
5.22
0.22
7.1
0.07
6.6
35.4
58.8
82.4
1.13
0.62
5.98
0.21
7.1
0.07
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
0.01
0.01
0.01
0.02
<0.01
<0.01
<0.01
<0.01
30
30
0.04
0.35
<0.01
<0.01
0.39
0.08
34
34
0.05
0.46
0.0
41
38
0.05
0.45
0.01
<0.01
<0.01
0.35
0.11
0.35
0.13
44
38
0.06
0.46
0.01
0.01
0.34
0.13
0.02
0.05
289
158
0.07
0.38
0.07
0.02
0.30
0.34
0.02
0.06
298
164
0.08
0.39
0.07
0.02
0.27
0.41
11.8
57.1
94.7
74.35
1.40
1.39
9.60
0.19
10.3
0.10
0.02
0.03
0.07
378
237
0.12
0.37
0.10
0.03
0.22
0.60
Figure 21: Magnetic separation of Concentrate: zircon recovery vs grades of U & Th
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
55
Figure 22: Post Primary RER magnetic separation of Concentrate: zircon recovery vs grades
of U & Th
Figure 23: Post Primary RER magnetic separation of Concentrate: recovery ZrO2, CeO2, U &
Th
Sighter Metallurgical Testwork at Azaria And Malambane
Excellent sighter metallurgical test results were released from AML Laboratories on three composite Heavy Mineral
(HM) samples from the new Azaria and Malambane targets, located within the Company’s Corridor Sands Projects.
These outstanding results continue to improve the Company’s knowledge of the resources and will help in
identifying the priority resources for early mine life economics.
The objective of the sighter testwork was to investigate potential product grades in the HMC from the two targets
areas, as well as an initial comparison of the HMC of the Azaria and Malambane targets versus the Koko Massava
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
56
bulk sample HM concentrate. The three samples used for the sighter testwork were 2 HMC samples from 5 aircore
holes and 2 distinctly different lithologies at Malambane (upper-red sand MAL 1 HMC and lower-red/brown sand
MAL 2 HMC) and 1 HMC from 3 aircore holes at Azaria.
The sighter metallurgical testing returned excellent results including:
•
•
•
concentrates of ilmenite, zircon and titanomagnetite generated;
the testwork clearly showing Azaria HMC with significantly less coatings; and
very good potential mass recoveries of ilmenite, titanomagnetite, zircon and rutile.
Further optimised testing with larger HMC sample size will be undertaken to carry out additional work on the rutile
in the non magnetic Middling, as well as work on the monazite in the same fraction.
Summary of testwork and results
An Orekinetics Coronastat high-tension roll (HTR) with a 300mm diameter roll was used in the electrostatic
separations. A Readings induced roll magnet (IRM) set with a field strength of 15,000 Gauss was used in the
magnetic separations of the HTR non-conductors and the HTR middlings (Refer Figure 24).
A Carpco lift magnet in a non-magnetic reprocess configuration at increasing field intensities was used for the
detailed fractionation of the HTR conductors (Refer Figure 24).
Figure 24: Initial sighter testwork flowsheet
The following comments are made based on the grades of the HM composites (Refer Table 29):
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
57
• The grades of the 2 Malambane HMCs, MAL 1 and MAL 2, are comparable. The MAL 1 composite (upper
lithology) has a slightly higher TiO2 grade and slightly lower Fe2O3 grade than the MAL 2 composite (lower
lithology) at 30% TiO2 compared to 28.4% TiO2 and 53.75% Fe2O3 compared to 54.93% Fe2O3. The grades
of contaminant oxides are comparable in both samples.
• The Azaria HMC, AZA 1, had a higher TiO2 grade than both the MAL composites at 33.2% and a
significantly lower Fe2O3 grade of 45.6%. The grades of contaminant oxides were higher in the Azaria
sample than in both Malambane samples.
• The MAL 1 composite had a ZrO2 grade of 1.46% and the MAL 2 composite had a ZrO2 grade of 1.38%
equating to approximate zircon contents of 2.2% and 2.1% respectively. The AZA composite had a ZrO2
grade of 2.18% equating to an approximate zircon content of 3.3%.
• A visual distinction between the MAL 1 and MAL 2 HM composites was evident when observed under the
microscope. The MAL 1 HM, identified by the client as “Upper red sand” had a high number of grains
coated with red material (Refer Figure 25). This material was evident in the MAL 2 sample, but at a lower
level and coated grains were not observed (Refer Figure 26). The AZA 1 HM composite was free of this
material (Refer Figure 27).
Table 29: HM Composite head grade
Mass
(g)
327
220
125
MAL 1
MAL 2
AZA 1
TiO2
Fe2O3
Al2O3
SiO2
Cr2O3
ZrO2+HfO2
CaO
MgO
MnO
CeO2
Th XRF
U XRF
K2O
Nb2O5
P2O5
SO3
V2O5
LOI @1000°C
%
%
%
%
%
%
%
%
%
%
ppm
ppm
%
%
%
%
%
%
Grades
30.02
53.75
28.4
54.93
33.21
45.56
6.44
5.7
1.89
1.46
0.02
0.64
0.80
0.05
148
26
0.02
0.04
0.06
0.01
0.32
6.75
6.54
1.73
1.38
0.02
0.63
0.79
0.05
162
24
0.02
0.04
0.06
0.01
0.34
8.36
8.4
2.11
2.18
0.02
0.72
0.87
0.04
152
40
0.02
0.05
0.06
0.00
0.23
-1.71
-1.83
-1.79
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
58
Figure 25: Malambane HMC (MAL 1)
Figure 26: Malambane HMC (MAL 2)
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
59
Figure 27: Azaria HMC (AZA 1)
Potential mass recoveries of HM to Product streams (Refer Table 30):
•
Ilmenite: Assuming material reporting to magnetic fractions between 1,000 Gauss and 6,000 Gauss of the
HTR Conductors reporting to ilmenite at a grade of 48% TiO2 in product;
• Titanomagnetite: Assuming material reporting to magnetic fractions at 500 Gauss and 1,000 Gauss
Conductors reporting to product;
• Rutile: Assuming TiO2 material reporting to non-magnetic fractions of the HTR Conductors and HTR
Middlings reporting to rutile at a grade of 95% TiO2 in product;
• Zircon: Assuming TiO2 material reporting to non-magnetic fractions of the HTR Middlings and Clerici sinks
for the non-conductors reporting to zircon at a grade of 66% ZrO2+HfO2 in product;
• The ilmenite product quality achieved in this testwork indicates the opportunity for improvement by low
temperature roasting of the ilmenite to reduce Cr2O3 levels and thereby increase the TiO2 grade of the
product;
Insufficient mass of sample was available to isolate a clean zircon product in the testwork, with
approximately 5% gangue mineral in the product, predominantly aluminosilicates and monazite. Given the
relatively low distribution of these minerals to the final zircon it would be anticipated that an optimised
processing would reduce these contaminant levels; and
•
• Clean grains of rutile were observed in the expected concentrates but at very low levels. Given the low grade
of rutile in the HM and the low sample mass used, the rutile grades presented are potentially underestimated.
In future testwork using larger samples it may be possible to isolate a rutile product.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
60
Table 30: HM Composite processing: Potential mass recoveries based on sighter results
MAL 1
MAL 2
AZA 1
HM Mass
42.0
26.4
0.76
1.66
%
%
%
%
48.8
24.2
0.80
1.92
56.9
11.4
0.98
2.92
Ilmenite
Titanomagnetite
Rutile
Zircon
(recoverable)
2023 Exploration Program
During the March quarter, MRG commenced planning for a targeted exploration program during 2023, following the
excellent Q4 2022 Total Heavy Mineral (THM) and mineralogy results from aircore drilling and associated laboratory
metallurgical testwork results at Corridor Central (11142C), Corridor South (11137C) and Marao (6842L) licences.
The exploration activities and 2023 HMS work plan (refer Table 31) will focus on new data to update and hopefully
further increase the already substantial NPV for the Corridor Project. This will likely comprise:
infill / extension aircore drilling of Azaria and Malambane for MRE and pit optimisation purposes;
•
• mineralogical and metallurgical studies, with new grade and metallurgical recovery work to be undertaken
initially on Azaria and Malambane drill samples; and
further study of the non-magnetic part of the existing PEA material to upgrade the zircon recoveries.
•
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
61
Table 31: Work program for 2023, with priority rating of targets.
Funding
Priority
2023
Deposit /
Target
Mineralogy
VHM
(Total %)
Next Step 2023
Koko Massava +
Nhacutse +
Poiombo PEA ( NPV ) A$417M
Malambane
Azaria
Cihari
Viaria
Zulene
Magonde
Mandende
Maduacua
Corridor North
45
61.6
72.4
58.1
63.5
62.6
58.2
58.7
57.4
NA
Patricio, Fotinho, Adriano (REE + U)
NA
Olinga (REE + U)
NA
1
2
3
7
8
9
10
11
12
13
4
5
6
Linhuane
NA
Application for Mining Licences for Corridor Projects
Focussed metallurgy aimed to upgrade
non-magnetic product value, to in turn
substantially increase the project NPV
Initial metallurgy to confirm significant
VHM mineralogy results compared to
Koko Massava, Nhacutse + Poiombo
Initial metallurgy to confirm significant
VHM mineralogy results compared to
Koko Massava, Nhacutse + Poiombo
Initial metallurgy to confirm significant
VHM mineralogy results compared to
Koko Massava, Nhacutse + Poiombo
To be announced
To be announced
To be announced
To be announced
To be announced
To be announced upon grant of ELA
Field work to commence immediately
upon grant of ELA. Geological mapping,
stream sediment sampling, auger drilling
Field work to commence immediately
upon grant of ELA. Geological mapping,
stream sediment sampling, auger drilling
Field work to commence immediately
upon grant of ELA. Auger drilling to
follow up very high THM historic
anomalies
MRG announced the successful submittal of Mining Licence Applications (MLA’s) for the Company’s Corridor
Central (6620L) and Corridor South (6621L) Heavy Mineral Sands (HMS) licences. The submission was accepted by
INAMI, with subsequent renumbered by INAMI of Corridor Central to 11142C and Corridor South to 11137C. The
MLA’s follow initial results from the Scoping and Preliminary Economic Analysis (PEA) (refer ASX Announcements
23 August 2022 and 31 August 2022).
The MLA’s also follows the recent 4 ELA’s for REE and U, namely Patricio (10999L; 19,763.06 Ha), Fotinho (11000L;
19,865.18 Ha), Adriano (11002L; 19,777.14 Ha) and Olinga (11005L; 19.148,72 Ha). MRG will now work with INAMI
to progress all MLAs and ELAs.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
62
MRG will focus future exploration activities within Corridor Central (6620L) and Corridor South (6621L) on the very
high Valuable Heavy Mineral (VHM) area discovered east of a very strong lithological boundary. Results from a recent
reconnaissance aircore drilling program, as well as mineralogical studies, are expected soon. Further exploration will
then aim to deliver these deposits for MRE, with the possibility of significantly improving the economics of the
projects.
Uranium & Rare Earth Element Licence Application
MRG made a new exploration licence application (ELA) in the Zambezia Province of Mozambique for Uranium (U)
and Rare Earth Elements (REEs)(refer ASX Announcement 15 November 2022).
The new U and REE Olinga ELA (11005 L, 19,148.72 Ha) is situated 890 km North-East of MRG’s existing Heavy
Mineral Sands (HMS) projects at Corridor Sands (MLAs 11142 C and 11137 C) and 270 km Northeast of the port city
of Beira. It is also 115 km East-Northeast of the 3 new MRG REE and U ELAs (refer ASX Announcement 11 May
2022; refer Figure 28).
The ELA application, in combination with the 3 recent ELAs Patricio (10999 L; 19,763.06 Ha), Fotinho (11000 L;
19,865.18 Ha) and Adriano (11002 L; 19,777.14 Ha), will further expand on MRG’s exploration licence portfolio
(combined 78,554.10 Ha for the 4 ELAs), while also diversifying the Company’s portfolio from HMS projects to now
include a fourth licence with REE and U as targets.
A Report supplied to MRG by Dr Luc Antoine on historic reconnaissance exploration that took place in 2014 showing
highly anomalous results from the 3 new REE and U ELAs (refer ASX Announcement 11 May 2022), but with a
walkover of the U and REE area of this new ELA. No analysis was done on samples collected from the U and REE
target area.
MRG considers the U and REE ELA as prospective for 2 reasons:
1.
The airborne radiometric spectrometer data of a regional national airborne geophysical survey shows some
very highly anomalous radiometric areas over the target area of the Olinga 11005 L ELA, with the anomalous
data characterised by a higher U:Th ratio compared the 3 REE and U ELAs (refer Figure 29).
The ELA area includes granites of different ages (refer Figure 30), with the contact between the granites as a
main target for exploration.
2.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
63
Figure 28: Map of the location of MRG’s new Uranium and Rare Earth ELA (Olinga, 11005 L) in relation to
the 3 Rare Earth and Uranium ELAs (Patricio, 10999 L, Adriano, 11000 L and, Fotinho, 11002 L); the MRG
Corridor Projects (HMS) and the local port city of Beira.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
64
Figure 29: Map showing MRG’s Uranium and Rare Earth ELA (Olinga 11005 L) plotted on airborne
radiometric spectrometer data of a regional national airborne geophysical survey.
Figure 30: Map showing MRG’s Uranium and Rare Earth Exploration Licence Application (ELA; 11005 L)
plotted on the regional geology map.
Field based exploration activities will commence on the applied for REE + U projects immediately upon grant of their
Exploration Licences.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
Corporate
Jangamo Mining Concession
65
Late in 2022 (ASX Announcements 9 November 2022 and 30 December 2022) MRG advised that it had, subject to
Due Diligence, secured an option to acquire Savannah Resources Plc’s Jangamo Mining Concession in Mozambique.
During the quarter, MRG advised that the Due Diligence period in relation to the option agreement had lapsed and
both parties had mutually decided not to proceed with entering into an Option Agreement.
Placement and Options Entitlement Offer
During the March quarter, MRG Metals Limited completed a capital raising (announced 23 November 2022)
comprising:
•
3 for 5 pro-rata non-renounceable entitlement offer of options to existing Shareholders closed on 13 January
2023 raising $312,683.
• A Placement of fully paid ordinary shares, with 2 for 3 free attaching options, raising $60,000 from
Directors, after approval from the General Meeting held on 13 January 2023.
• Placement of fully paid ordinary shares, with 2 for 3 free attaching options, raised $840,000 (completed in
November).
The 3 for 5 pro-rata non-renounceable entitlement offer of Options to existing Shareholders raised $312,682.80 on
closing on 13 January 2023. This resulted in the issue of 312,682,557 listed MRQO Options, exercisable at $0.008
and expiring 31 December 2025.
The Board sought Shareholder approval at a General Meeting of the Company, held on 13 January 2023, to take up
$60,000 under the same terms as the Placement. This resulted in the issue of 15,000,000 fully paid ordinary shares at
$0.004 per share, together with 10,000,001 free attaching MRQO listed options, exercisable at $0.008 and expiring 31
December 2025.
Proposed use of funds:
• Corridor Sands HMS Project - improvement programs to increase project economics towards Feasibility.
Follow up drilling, mineralogy and metallurgy to test high VHM Azaria and Cihari targets.
• Exploration at HMS, Rare Earth Elements and Uranium Projects should these Exploration Licences be
granted.
• Working Capital, costs of the Placement and expenses of the Offers.
Events Subsequent to end of Financial Year
Memorandum of Understanding to Form Joint Venture on Mozambique Corridor Sands Projects
On 26 July 2023, MRG Metals Limited entered a Memorandum of Understanding (MOU) with Tianjin Lanqi Materials
Company Limited (“LANQI”) for a Joint Venture operation (“JV”) on its Mozambique Corridor Sands projects.
Key aspects of the MOU are:
- A period of 3 months Due Diligence commencing from today. During the period of Due Diligence, LANQI shall send
their technical team to Mozambique for field inspection and sampling of the Corridor Projects. MRG shall send their
representatives to assist LANQI to carry out this work.
- During the period of Due Diligence, LANQI shall also draft a JV agreement and shall send it to MRG together with
LANQI’s decision to proceed to JV, such that the JV is signed at or before completion of the Due Diligence period.
- A commitment to purchase AUD$500,000 shares at 0.4c upon successful completion of Due Diligence and entering the
JV.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
66
Key Terms of the JV are:
- Both parties shall sign a JV Agreement upon or before completion of Due Diligence period that parties will set up a JV
company in Mozambique owned 75 % by LANQI and 25 % by MRG, achieved upon first production.
- LANQI shall invest USD 3 million dollars (and at the commencement of the JV place USD$3 million into the JV trust
account) for the following stages:
o To finish the JV company set up in Mozambique and company working capital.
i) Working capital to cover JV company in-country costs estimated at $40k USD for minimum of 12 months.
ii) MRG Management involvement in JV at $15k USD/month for minimum of 18 months.
o To complete the mine exploration and feasibility report for the Initial Corridor Project.
o To design the engineering and construction plan of the Initial Corridor Project.
o To get the mining licence approval from the Government.
- LANQI shall invest all funds necessary to develop the initial mining operation and all subsequent funds for mine
expansion either on the Initial Corridor Project or subsequent Corridor Projects.
- LANQI shall guarantee that the total output of the HMC in the Initial Corridor Project shall be not less than 100,000
tpa at 18 months from the date any mining commences on the Initial Corridor Project; the total output of the HMC in
Initial Corridor Project shall be increased to 200,000 tpa at or before 3 years from the date any mining commences and
to 400,000 tpa at or before 5 years from the date any mining commences.
- The JV Agreement shall specify obligation of the parties to retain JV equity with the intention of not limiting MRG’s
rights should the HMC production profile not deliver 100,000 tpa by 18 months, 200,000 tpa by 36 months, 400,000
tpa by 5 years and also should the JV not have implemented further expansion plans by 5 years from the date any
mining commences in the Initial Corridor project.
Key Terms of the Offtake Agreement are:
LANQI shall be the Offtaker for all HMC products in the Initial Corridor Project.
1.
2. The offtake price fixing can be referred to the export prices of the same quality HMC which shall be processed by
other companies in Mozambique and the JV shall coordinate independent review mechanism agreeable to both Parties.
3. The JV company shall give 5% sales commission for the offtake agreement.
Definitions:
- Corridor Projects means Mineral Sands projects in Mozambique including Corridor Central (11142C), Corridor South
(11137C), Corridor North (10779L) and Linhuane (7423L).
“Initial Project” means the first of the Corridor Projects chosen by the JV for commencement of production.
-
Placement
On 7 August 2023, MRG Metals Limited completed a capital raising (announced 1 August 2023) comprising:
• Placement of 200,000,000 fully paid ordinary shares at $0.0025, with 1 for 2 free attaching MRQO options
(100,000,000 options), raised $500,000
Issuance of 10,000,000 MRQO options for payment of Lead Manager fees.
•
Proposed use of funds:
• Progress Rare Earth Elements and Uranium Projects should these Exploration Licences be granted.
• Working Capital.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
Tenements
The Tenements held by the Group at reporting date are as follows:
67
Project
Norrliden
Malanaset
Malanaset
Corridor Central
Corridor South
Corridor North
Linhuane
Marão
Marruca
Olinga
Patricio
Fotinho
Adriano
Tenement
K nr 1
nr 100
nr 101
11142C
11137C
10779L
7423L
6842L
6846L
11005L
10999L
11000L
11002L
% Owned
10
10
10
100
100
100
100
100
100
100
100
100
100
Note
Application
Application
Application
Application
Application
Application
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
68
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 2023 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 since May 2019 until Deregistration in March 2022
Interests in shares and options:
44,156,679 shares
4,166,667 options
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 and options:
26,982,509 shares
1,666,667 options
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
69
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 and options:
69,813,986 shares
4,166,667 options
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, rare earths and uranium 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 $846,894 (2022 loss $702,340). Refer detailed
Review of Operations that precedes this report.
Earnings per share (0.04) cents (2022 (0.04) 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 and development on its Heavy Mineral Sands projects in
Mozambique and applied for Rare Earth and Uranium tenements in Mozambique. MRG announced the results of a
Scoping Study and Preliminary Economic Assessment by IHC Mining for the Corridor Central (11142C) and
Corridor South (11137C) Projects, specifically the Koko Massava, Nhacutse and Poiombo deposits. Based on the
positive outcome of the Scoping Study and Preliminary Economic Assessment, mining licence applications were
lodged for the Corridor Central and Corridor South Projects.
During the year, the Group raised $1,268,123 from placements and an entitlement offer.
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 the following significant events have occurred:
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
70
Memorandum of Understanding to Form Joint Venture on Mozambique Corridor Sands Projects
On 26 July 2023, MRG Metals Limited entered a Memorandum of Understanding (MOU) with Tianjin Lanqi Materials
Company Limited (“LANQI”) for a Joint Venture operation (“JV”) on its Mozambique Corridor Sands projects.
Key aspects of the MOU are:
- A period of 3 months Due Diligence commencing from today. During the period of Due Diligence, LANQI shall send
their technical team to Mozambique for field inspection and sampling of the Corridor Projects. MRG shall send their
representatives to assist LANQI to carry out this work.
- During the period of Due Diligence, LANQI shall also draft a JV agreement and shall send it to MRG together with
LANQI’s decision to proceed to JV, such that the JV is signed at or before completion of the Due Diligence period.
- A commitment to purchase AUD$500,000 shares at 0.4c upon successful completion of Due Diligence and entering the
JV.
Key Terms of the JV are:
- Both parties shall sign a JV Agreement upon or before completion of Due Diligence period that parties will set up a JV
company in Mozambique owned 75 % by LANQI and 25 % by MRG, achieved upon first production.
- LANQI shall invest USD 3 million dollars (and at the commencement of the JV place USD$3 million into the JV trust
account) for the following stages:
o To finish the JV company set up in Mozambique and company working capital.
i) Working capital to cover JV company in-country costs estimated at $40k USD for minimum of 12 months.
ii) MRG Management involvement in JV at $15k USD/month for minimum of 18 months.
o To complete the mine exploration and feasibility report for the Initial Corridor Project.
o To design the engineering and construction plan of the Initial Corridor Project.
o To get the mining licence approval from the Government.
- LANQI shall invest all funds necessary to develop the initial mining operation and all subsequent funds for mine
expansion either on the Initial Corridor Project or subsequent Corridor Projects.
- LANQI shall guarantee that the total output of the HMC in the Initial Corridor Project shall be not less than 100,000
tpa at 18 months from the date any mining commences on the Initial Corridor Project; the total output of the HMC in
Initial Corridor Project shall be increased to 200,000 tpa at or before 3 years from the date any mining commences and
to 400,000 tpa at or before 5 years from the date any mining commences.
- The JV Agreement shall specify obligation of the parties to retain JV equity with the intention of not limiting MRG’s
rights should the HMC production profile not deliver 100,000 tpa by 18 months, 200,000 tpa by 36 months, 400,000
tpa by 5 years and also should the JV not have implemented further expansion plans by 5 years from the date any
mining commences in the Initial Corridor project.
Key Terms of the Offtake Agreement are:
LANQI shall be the Offtaker for all HMC products in the Initial Corridor Project.
4.
5. The offtake price fixing can be referred to the export prices of the same quality HMC which shall be processed by
other companies in Mozambique and the JV shall coordinate independent review mechanism agreeable to both Parties.
6. The JV company shall give 5% sales commission for the offtake agreement.
Definitions:
- Corridor Projects means Mineral Sands projects in Mozambique including Corridor Central (11142C), Corridor South
(11137C), Corridor North (10779L) and Linhuane (7423L).
“Initial Project” means the first of the Corridor Projects chosen by the JV for commencement of production.
-
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
Placement
71
On 7 August 2023, MRG Metals Limited completed a capital raising (announced 1 August 2023) comprising:
• Placement of 200,000,000 fully paid ordinary shares at $0.0025, with 1 for 2 free attaching MRQO options
(100,000,000 options), raised $500,000
Issuance of 10,000,000 MRQO options for payment of Lead Manager fees.
•
Proposed use of funds:
• Progress Rare Earth Elements and Uranium Projects should these Exploration Licences be granted.
• Working Capital.
Likely developments
Progress Corridor HMS projects to Production should Joint Venture be formed with Tianjin Lanqi Materials
Company Limited.
Explore on Mozambique HMS, Rare Earth Elements and Uranium Projects tenement Applications if granted.
Look for opportunities to expand our projects.
Pursue a sale of Norrliden.
Business risk management
The Company is committed to the effective management of risk to reduce uncertainty in the Company’s business
outcomes and to protect and enhance shareholder value. There are various risks that could have a material impact on
the achievement of the Company’s strategic objectives and future prospects.
Key risks and mitigation activities associated with the Company's objectives are set out
below:
The Company is committed to the effective management of risk to reduce uncertainty in the Company’s business
outcomes and to protect and enhance shareholder value. There are various risks that could have a material impact on
the achievement of the Company’s strategic objectives and future prospects.
Exploration risk
The Company’s projects are at various stages of exploration, and potential investors should understand that mineral
exploration is a high-risk undertaking. There can be no assurance that exploration of these projects, or any other
tenements that may be acquired in the future, will result in the discovery of an economic mineral deposit.
The future exploration activities of the Company may be affected by a range of factors including geological
conditions, limitations on activities due to seasonal weather patterns, unanticipated operational and technical
difficulties, industrial and environmental accidents, local title processes, changing government regulations and many
other factors beyond the control of the Company.
In addition, the tenements forming the projects of the Company may include various restrictions excluding, limiting
or imposing conditions upon the ability of the Company to conduct exploration activities. While the Company will
formulate its exploration plans to accommodate and work within such access restrictions, there is no guarantee that
the Company will be able to satisfy such conditions on commercially viable terms, or at all.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
72
The Company uses a number of exploration techniques in order to reduce the level of exploration risks and
continues to explore new and innovative technologies through its day to day operations.
Regulatory risk
The Company’s mining and exploration activities are dependent upon the maintenance (including renewal) of the
tenements in which the Company has or acquires an interest. Maintenance of the Company’s tenements is dependent
on, among other things, the Company’s ability to meet the licence conditions imposed by relevant authorities.
Although the Company has no reason to think that the tenements in which it currently has an interest will not be
renewed, there is no assurance that such renewals will be given as a matter of course and there is no assurance that new
conditions will not be imposed by the relevant authority or whether the Company will be able to meet the conditions
of renewal on commercially reasonable terms, if at all.
The Company works with local government and mining departments to ensure it meets the required level of
reporting requirements and to reduce any potential for breach of regulatory requirements
Future funding risk
The Company has no operating revenue and is unlikely to generate any operating revenue in the foreseeable future.
Exploration and development costs and pursuit of its business plan will use funds from the Company's current cash
reserves and the amounts raised under future Equity Offers.
Any additional equity financing may be dilutive to Shareholders, may be undertaken at lower prices than the then
market price (or Offer Price) or may involve restrictive covenants which limit the Company's operations and business
strategy. Debt financing, if available, may involve restrictions on financing and operating activities.
Although the Directors believe that additional capital can be obtained, no assurances can be made that appropriate
capital or funding, if and when needed, will be available on terms favourable to the Company or at all. If the
Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its activities
and this could have a material adverse effect on the Company's activities and could affect the Company's ability to
continue as a going concern. The Company’s funding requirements are reviewed on a regular basis in order to
mitigate future funding risk.
Farm in and joint venture risk
The Company is contemplating a joint venture on its Mozambique Corridor Sands projects. This joint venture
arrangement would be subject to conditions and expenditure requirements to achieve certain ownership percentage
ownership of the relevant projects.
There is a risk that the requirements (including in respect of expenditure) under any farm-in arrangements or that,
even if such requirements are met, a commercially viable resource will not be located on the project. In addition, any
joint venture arrangement will be subject to risks typically associated with arrangements of that kind, including but not
limited to that either party may seek to terminate or withdraw from the arrangement or fail to meet their obligations
thereunder. There is also the potential for disputes in respect of the obligations of the parties to the joint venture.
Environmental regulation
The consolidated entity holds participating interests in a number of exploration tenements. The various authorities
granting such tenements require the tenement holder to comply with the terms of the grant of the tenement and all
directions given to it under those terms of the tenement. To the best of the Directors' knowledge, the Group has
adequate systems in place to ensure compliance with the requirements of all environmental legislation described
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
73
above and are not aware of any breach of those requirements during the financial year and up to the date of the
Directors' report.
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 2022
Capital Raising - placement
Issue of Ordinary Shares – corporate mandate
Capital Raising - placement
Capital Raising - placement
Less costs associated with capital raisings
Closing balance at 28 September 2023
Movements in options:
Date
29/11/2022
02/12/2022
19/01/2023
07/08/2023
Issue price
(cents)
0.4
0.4
0.4
0.25
-
No of shares
1,747,058,628
210,000,000
13,860,000
15,000,000
200,000,000
-
2,185,918,628
$
27,761,631
840,000
55,440
60,000
500,000
(78,426)
27,761,631
2023
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - corporate
mandate
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - corporate
mandate
Issue of options – rights issue
Issue of options - placement
Issue of options - placement
Issue of options - corporate
mandate
Closing balance at 28
September 2023
Date
04/02/2021
04/02/2021
No. options 1
July 2022
162,000,000
9,042,000
Issued/
(Expired)
(162,000,000)
(9,042,000)
No. options
30 June 2023
-
-
Ex. price
(cents)
2.5
2.5
Expiry
date
30/06/2023
30/06/2023
30/11/2021
15,000,000
(15,000,000)
20/01/2022
20/01/2022
100,000,000
19,194,375
(100,000,000)
(19,194,375)
-
-
-
29/11/2022
29/11/2022
02/12/2022
19/01/2023
19/01/2023
07/08/2023
07/08/2023
-
-
-
-
-
-
-
140,000,000
10,000,000
140,000,000
10,000,000
9,240,000
9,240,000
0.8
31/12/2025
312,682,557
10,000,001
100,000,000
10,000,000
312,682,557
10,000,001
100,000,000
10,000,000
0.8
0.8
0.8
0.8
31/12/2025
31/12/2025
31/12/2025
31/12/2025
305,236,375
286,686,183
591,922,558
2.5
2.5
2.5
0.8
0.8
30/06/2023
30/06/2023
30/06/2023
31/12/2025
31/12/2025
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
74
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 2023
75
(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 ($)
Performance
Rights ($)
Total ($)
% of
remuneration
that is
performance
based
Non-executive directors
Mr A Van Der Zwan
Mr S Turner
Mr C Gregory
2023 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
-
-
-
-
-
-
-
-
10,500
10,500
10,500
31,500
10,000
10,000
10,000
30,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
110,500
110,500
110,500
-
331,500
4,796
4,796
4,796
114,796
114,796
114,796
14,388
344,388
0%
0%
0%
0%
4%
4%
4%
4%
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
76
(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 2023 financial year were
$50,000 per annum.
(d) Share based remuneration
During the year there was no share based remuneration.
(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 (2022: 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
$1,710 to RSM (2022 $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:
2023
Key
Management
Person
Van Der Zwan
Turner
Gregory
2022
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
Balance at
start of year
37,906,679
24,482,509
63,563,986
125,953,174
Received
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
6,250,000
2,500,000
6,250,000
15,000,000
Received
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
-
-
-
-
Held at the
end of the
reporting
period
44,156,679
26,982,509
69,813,986
140,953,174
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 2023
77
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.
Balance at start
of year
-
-
-
-
Deleted
on
Additions
4,166,667
1,666,667
4,166,667
10,000,001
exercise Ceased/Lapsed
-
-
-
-
-
-
-
-
Held at the
end of the
reporting
period
4,166,667
1,666,667
4,166,667
10,000,001
2023
Key
Management
Person
Van Der Zwan
Turner
Gregory
2022
Nil
The results of the Group for the five years to 30 June 2023 are summarised below, together with the factors that are
considered to affect total shareholders return:
2023
2022
2021
2020
2019
Net profit/(loss) attributable to
equity holders of the parent
Closing share price at period end
Closing cash balance
$(846,894)
$0.002
$575,046
$(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
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
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 2023.
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.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
78
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 79 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
28 September 2023
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 2023 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, 28 September 2023
Level 20, 181 William Street, Melbourne VIC 3000
+61 3 9824 8555
vic.info@williambuck.com
williambuck.com
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.
79
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
80
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 2023 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 2023
ASX Corporate Governance Council
Recommendation
MRG policy
81
(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
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.
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.
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.
82
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 2023
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 2023
ASX Corporate Governance Council
Recommendation
MRG policy
83
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.
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:
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.
(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 2023
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.
84
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 2023
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.
85
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 2023
ASX Corporate Governance Council
Recommendation
MRG policy
86
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.
87
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 2023
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 2023
Statement of Financial Position
As of 30 June 2023
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
88
Notes
Consolidated Consolidated
2022
$
2023
$
8
7
8
11
12
10
575,046
362,349
937,395
1,017,533
321,471
1,339,004
23,096
51,831
5,794,788
5,869,715
6,807,110
22,980
72,026
5,176,689
5,271,695
6,610,699
59,524
59,524
59,524
6,747,586
205,916
205,916
205,916
6,404,783
9
9
28,951,328
-
(22,203,742)
27,761,631
160,168
(21,517,016)
6,747,586
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 2023
Statement of Profit or Loss and other
Comprehensive Income
for the year ended 30 June 2023
89
Interest income
Employee benefits expense
Consultants
Administration expenses
Impairment of exploration
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
Diluted earnings per share
Notes
Consolidated
2023
$
Consolidated
2022
$
5
12
14
16
6,268
(231,500)
(5,552)
(515,496)
(112,948)
12,334
(846,894)
-
(846,894)
-
(846,894)
727
(244,388)
(5,984)
(461,970)
-
9,275
(702,340)
-
(702,340)
-
(702,340)
Cents
Cents
(0.04)
(0.04)
(0.04)
(0.04)
This statement should be read in conjunction with the notes to the financial statements.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
90
Statement of Changes in Equity
for the year ended 30 June 2023
Issued
Capital
$
Reserves
$
Retained
earnings
$
Total
equity
$
Balance at 1 July 2022
27,761,631
160,168
(21,517,016)
6,404,783
Loss after income tax expense for the period
Total comprehensive loss for the period
-
-
-
-
(846,894)
(846,894)
(846,894)
(846,894
Transactions with owners in their capacity as owners:
Issue of share capital
Transaction costs
Options lapsed
955,440
(78,426)
-
312,683
-
(160,168)
-
-
160,168
1,268,123
(78,426)
-
Balance at 30 June 2023
28,638,645
312,683
(22,203,742)
6,747,586
Balance at 1 July 2021
26,355,247
310,978
(21,103,876)
5,562,349
Loss after income tax expense for the period
Total comprehensive loss for the period
-
-
-
-
(702,340)
(702,340))
(702,340)
(702,340)
Transactions with owners in their capacity as owners:
Issue of share capital
Transaction costs
Vesting of Share based payments
Lapsed Rights/Options
1,651,110
(244,726)
-
-
-
-
138,390
(289,200)
-
-
-
289,200
1,651,110
(244,726)
138,390
-
Balance at 30 June 2022
27,761,631
160,168
(21,517,016)
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 2023
Statement of Cash Flows
for the year ended 30 June 2023
Operating activities
Interest received
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
91
Notes
Consolidated Consolidated
2022
$
2023
$
6,268
(939,818)
(933,550)
800
(669,287)
(668,487)
17
(116)
(688,168)
(5,310)
(693,594)
(22,980)
(1,308,736)
(2,623)
(1,334,339)
1,212,683
(28,026)
1,184,657
(442,487)
1,017,533
-
575,046
1,651,110
(244,726)
1,406,384
(596,442)
1,610,733
3,242
1,017,533
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
8
This statement should be read in conjunction with the notes to the financial statements.
92
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
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, rare earths and uranium 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 2023 were approved and authorised
for issue by the board of directors on 28 September 2023 (see note 25).
New Accounting Standards and Interpretations adopted
3
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting
period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted. 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.
93
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
The Group recorded a loss after tax of $846,894 and net cash outflows from operating and investing
activities were $1,627,144 for the year ended 30 June 2023. The Group’s financial position as at 30 June
2023 was as follows:
• The Group had available cash reserves of $575,046;
• The Group’s current assets of $937,395 exceed current liabilities of $59,524 by $877,871;
• 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 2023 will not be sufficient to fully fund the
planned exploration and operational activities during the next twelve months. The Group raised $500,000
via a Placement subsequent to 30 June 2023 (refer Note 23).
The Group’s position as at 31 August 2023 was as follows:
• The Group had available cash reserves of $792,390;
• 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 2023.
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 2023 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 2023. 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
94
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
Directors. The Board of Directors are responsible for the allocation of resource to operating segments
and assessing their performance.
4.5
Interest income is recognised on an accrual basis using the effective interest method.
Revenue
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
95
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
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.
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.
96
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
Possible inflows of economic benefits to the Group that do not yet meet the recognition criteria of an
asset are considered contingent assets.
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):
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
97
(a)
(b)
(c)
(d)
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.
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.
Property, plant & equipment
Recognition and measurement
4.19
(i)
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.
(ii) Depreciation
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 or capitalised in exploration and evaluation 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
4.20 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.
4.21 Share based payments
Share-based remuneration is recognised as an expense in profit or loss, with a corresponding credit to share
option reserve or capitalised as a cost of raising capital.. 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.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
98
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 a Manager in consideration for corporate advisory services,
calculated on the same basis as the Placement in November 2022 (13,860,000 shares @ $0.004 and 9,240,000
MRQO options).
4.22 Foreign currency translation
The financial statements are presented in Australian dollars, which is Group's functional and presentation currency. The
Group’s exploration assets are located in Mozambique.
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.
Foreign operations
The assets and liabilities of foreign operations are translated into Australia dollars using the exchange rates at the
reporting date. The expenses of foreign operations are translated into Australian dollars using the average exchange
rates.
5
Employee benefit expense
Employee benefit expense incurred
Employee benefit expense capitalised in exploration assets
Consolidated
2023
$
331,500
(100,000)
231,500
Consolidated
2022
$
344,388
(100,000)
244,388
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
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.
Consolidated
2023
$
12,316
521
349,512
362,349
Consolidated
2022
$
31,715
97
289,659
321,471
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
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
Cash and cash equivalents
99
Consolidated
2023
$
574,841
18
187
575,046
Consolidated
2022
$
1,003,355
13,786
392
1,017,533
Short term deposit (Australian dollars) 23,096
22,980
The effective interest rate on the short-term bank deposit is 2.7% (2022: 0.2%); this deposit has an average maturity
of 365 days.
The $23,096 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, 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 2022
Additions during the year
Costs of raising
Total share capital at 30 June 2023
OPTIONS RESERVE
Total at 1 July 2022
Additions during the year
Lapsed during the year
Total issued options at 30 June 2023
SHARE BASED PAYMENTS
RESERVE
Total at 1 July 2022
Lapsed during year
Total reserve at 30 June 2023
SHARE CAPITAL & RESERVES
Consolidated
2023
$
27,761,631
955,440
(78,426)
28,638,645
Quantity
1,747,058,628
238,860,000
-
1,985,918,628
305,236,375
481,922,558
(305,236,375)
481,922,558
-
312,683
(857,402)
312,683
160,168
(160,168)
-
28,951,328
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
100
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
(i) Movements in issued capital:
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
Opening balance at 1 July 2022
Capital Raising - placement
Issue of Ordinary Shares – corporate
mandate
Capital Raising - placement
Less costs associated with capital raisings
Closing balance at 30 June 2023
Date
20/01/2022
20/01/2022
Date
29/11/2022
02/12/2022
19/01/2023
Issue price
(cents)
0.8
0.8
-
Issue price
(cents)
0.4
0.4
0.4
-
No of shares
1,540,669,878
200,000,000
6,388,750
-
1,747,058,628
No of shares
1,747,058,628
210,000,000
13,860,000
15,000,000
-
1,985,918,628
$
26,355,247
1,600,000
51,110
(244,726)
27,761,631
$
27,761,631
840,000
55,440
60,000
(78,426)
28,638,645
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
(ii) Movements in options:
101
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
Date
04/02/2021
04/02/2021
30/11/2021
20/01/2022
20/01/2022
No. options 1
July 2021
162,000,000
9,042,000
Issued/
(converted)
-
-
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
2023
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - corporate
mandate
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - placement
Issue of options - corporate
mandate
Issue of options - corporate
mandate
Issue of options – rights issue
Issue of options - placement
Closing balance at 30 June 2023
Date
04/02/2021
04/02/2021
No. options 1
July 2022
162,000,000
9,042,000
Issued/
(Expired)
(162,000,000)
(9,042,000)
No. options
30 June 2023
-
-
30/11/2021
15,000,000
(15,000,000)
20/01/2022
20/01/2022
100,000,000
19,194,375
(100,000,000)
(19,194,375)
-
-
-
Ex. price
(cents)
Expiry
date
2.5 30/06/2023
2.5 30/06/2023
2.5 30/06/2023
2.5 30/06/2023
2.5 30/06/2023
29/11/2022
29/11/2022
02/12/2022
19/01/2023
19/01/2023
-
-
-
140,000,000
10,000,000
140,000,000
10,000,000
0.8 31/12/2025
0.8 31/12/2025
9,240,000
9,240,000
0.8 31/12/2025
-
-
305,236,375
312,682,557
10,000,001
176,686,183
312,682,557
10,000,001
481,922,558
0.8 31/12/2025
0.8 31/12/2025
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
2023
$
17,857
41,667
59,524
Consolidated
2022
$
161,055
44,861
205,916
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
11
Plant and equipment
Plant & Equipment
Accumulated Depreciation
102
Consolidated
2023
$
105,582
(53,751)
51,831
Consolidated
2022
$
100,272
(28,246)
72,026
12
Exploration and evaluation assets
Cost as at 1 July 2022
Other exploration costs
Impairment (i)
Cost as at 30 June 2023
(i) During the year, the Marruca tenement was applied to be surrendered due to lack of
good exploration results and better opportunities with other tenement applications.
The surrender has yet to be processed by INAMI, but the capitalised costs to date for
this tenement have been impaired.
Cost as at 1 July 2021
Other exploration costs
Cost as at 30 June 2022
Consolidated
2023
$
5,176,689
731,047
(112,948)
5,794,788
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)
2023
608,596
(608,596)
-
2022
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 2023
103
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% (2022 25%)
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
2023
$
(846,894)
(211,723)
Consolidated
2022
$
(702,340)
(175,585)
798
-
(210,925)
(210,925)
798
210,925
211,723
875
-
(174,710)
(174,710)
875
174,710
175,585
The above potential tax benefit has not been recognised as the recovery is uncertain.
The carry forward tax losses at 30 June 2023 were $19,610,201.
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 services remuneration
Other services
Total Auditor’s remuneration
Consolidated
2023
$
34,901
34,901
-
34,901
Consolidated
2022
$
34,500
34,500
-
34,500
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
Consolidated
2023
$
(846,894)
1,884,892,765
1,884,892,765
Consolidated
2022
$
(702,340)
1,632,272,556
1,632,272,556
Earnings Per Share
(0.04) cents
(0.04) cents
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
104
Diluted Earnings Per Share
(0.04) cents
(0.04) 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
Impairment of exploration
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
2023
$
Consolidated
2022
$
(846,894)
(702,340)
-
112,948
(12,334)
-
(40,878)
(146,392)
(933,550)
19,802
(9,275)
138,390
(107,299)
(7,765)
(668,487)
MRG Metals Ltd owns 100% of the shares of MRG Metals (Australia) Pty Ltd. (2022 100%)
MRG Metals Ltd owns 100% of the shares of MRG Metals (Exploration) Pty Ltd. (2022 100%)
MRG Metals Ltd owns 100% of the shares of Sofala Resources Pty Ltd. (2022 100%)
Sofala Resources Pty Ltd owns 99% of the shares of Sofala Mining & Exploration Lda. (2022 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 to Sofala Mining & Exploration IX Lda own the HMS tenements.
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.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
105
Turner. The amounts billed were based on normal market rates and amounted to $38,000 to Mr. Turner and $1,710
to RSM (2022 $38,000 to Mr. Turner and $6,870 to RSM).
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
2023
$
300,000
31,500
-
331,500
Consolidated
2022
$
300,000
30,000
14,388
344,388
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 2023
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
-
-
-
-
Other
changes
-
-
-
-
Additions
6,250,000
2,500,000
6,250,000
15,000,000
Held at the
end of the
reporting
period
44,156,679
26,982,509
69,813,986
140,953,174
Year ended 30 June 2022
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
-
-
-
-
Additions
-
-
-
-
Held at the
end of the
reporting
period
37,906,679
24,482,509
63,563,986
125,953,174
Other
changes
-
-
-
-
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
106
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 2023
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at
start of year
-
-
-
-
Additions
4,166,667
1,666,667
4,166,667
10,000,001
Year ended 30 June 2022
Nil.
Deleted
on
Held at
the end
of the
reporting
period
exercise Ceased/Lapsed
4,166,667
-
1,666,667
-
-
4,166,667
- 10,000,001
-
-
-
-
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 2023
Nil
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)
-
-
-
-
Held at the
end of the
reporting
period
-
-
-
-
19
There were no contingent assets or liabilities in the current financial year (2022 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
2023
$
2022
$
45,068
180,272
270,736
1,082,944
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
107
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).
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 2023
42.37
187
(4,267)
(4,080)
The Group’s exposure to assets and liabilities to USD at 30 June 2023 is set out below (Australian dollar
equivalents):
Reported exchange rate
30 June 2023
0.6630
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
108
Cash at Bank
Total exposure
18
18
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 2023
Increase/(Decrease)
in profit after
income tax
(408)
408
Increase/(Decrease)
in Equity
(408)
408
Interest rate sensitivity
21.2
The Group's only exposure to interest rate risk is in relation to a deposit held. Deposits are held with
reputable banking financial institutions.
At 30 June 2023, there was $23,096 on deposit at 2.7% (Note 8).
An increase/decrease by 30% or 0.0081 basis points would have a favourable/adverse effect on profit
for the year of $187. The percentage change is based on the expected volatility of interest rates using
market data and analysts’ forecasts.
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 2023 was $877,871.
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 2023
Trade and other payables
Total
30 June 2022
Current
Non current
Within 6
months
$
59,524
59,524
6 to 12
months
$
-
-
1 to 5 years
$
-
-
Later than 5
years
$
-
-
Current
Non current
Within 6
months
$
6 to 12
months
$
1 to 5 years
$
Later than 5
years
$
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
109
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.
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.
23
Since the end of the year the following significant events have occurred:
Post-reporting date events
Memorandum of Understanding to Form Joint Venture on Mozambique Corridor Sands
Projects
On 26 July 2023, MRG Metals Limited entered a Memorandum of Understanding (MOU) with Tianjin Lanqi
Materials Company Limited (“LANQI”) for a Joint Venture operation (“JV”) on its Mozambique Corridor
Sands projects.
Key aspects of the MOU are:
- A period of 3 months Due Diligence commencing from today. During the period of Due Diligence,
LANQI shall send their technical team to Mozambique for field inspection and sampling of the Corridor
Projects. MRG shall send their representatives to assist LANQI to carry out this work.
- During the period of Due Diligence, LANQI shall also draft a JV agreement and shall send it to MRG
together with LANQI’s decision to proceed to JV, such that the JV is signed at or before completion of
the Due Diligence period.
- A commitment to purchase AUD$500,000 shares at 0.4c upon successful completion of Due Diligence and
entering the JV.
-
-
Key Terms of the JV are:
Both parties shall sign a JV Agreement upon or before completion of Due Diligence period that parties
will set up a JV company in Mozambique owned 75 % by LANQI and 25 % by MRG, achieved upon first
production.
LANQI shall invest USD 3 million dollars (and at the commencement of the JV place USD$3 million into
the JV trust account) for the following stages:
o To finish the JV company set up in Mozambique and company working capital.
i) Working capital to cover JV company in-country costs estimated at $40k USD for minimum of 12 months.
ii) MRG Management involvement in JV at $15k USD/month for minimum of 18 months.
o To complete the mine exploration and feasibility report for the Initial Corridor Project.
o To design the engineering and construction plan of the Initial Corridor Project.
o To get the mining licence approval from the Government.
-
LANQI shall invest all funds necessary to develop the initial mining operation and all subsequent funds
for mine expansion either on the Initial Corridor Project or subsequent Corridor Projects.
LANQI shall guarantee that the total output of the HMC in the Initial Corridor Project shall be not less
than 100,000 tpa at 18 months from the date any mining commences on the Initial Corridor Project; the
total output of the HMC in Initial Corridor Project shall be increased to 200,000 tpa at or before 3 years
-
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
110
from the date any mining commences and to 400,000 tpa at or before 5 years from the date any mining
commences.
The JV Agreement shall specify obligation of the parties to retain JV equity with the intention of not
limiting MRG’s rights should the HMC production profile not deliver 100,000 tpa by 18 months, 200,000
tpa by 36 months, 400,000 tpa by 5 years and also should the JV not have implemented further expansion
plans by 5 years from the date any mining commences in the Initial Corridor project.
Key Terms of the Offtake Agreement are:
LANQI shall be the Offtaker for all HMC products in the Initial Corridor Project.
The offtake price fixing can be referred to the export prices of the same quality HMC which shall be
processed by other companies in Mozambique and the JV shall coordinate independent review mechanism
agreeable to both Parties.
The JV company shall give 5% sales commission for the offtake agreement.
Definitions:
Corridor Projects means Mineral Sands projects in Mozambique including Corridor Central (11142C),
Corridor South (11137C), Corridor North (10779L) and Linhuane (7423L).
“Initial Project” means the first of the Corridor Projects chosen by the JV for commencement of production.
Placement
On 7 August 2023, MRG Metals Limited completed a capital raising (announced 1 August 2023)
comprising:
Placement of 200,000,000 fully paid ordinary shares at $0.0025, with 1 for 2 free attaching MRQO
options (100,000,000 options), raised $500,000
Issuance of 10,000,000 MRQO options for payment of Lead Manager fees.
-
7.
8.
9.
-
-
•
•
Proposed use of funds:
Progress Rare Earth Elements and Uranium Projects should these Exploration Licences be granted.
•
• Working Capital.
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
2023
$
2022
$
937,395
6,807,110
59,524
59,524
1,339,004
6,610,699
205,916
205,916
28,951,328
-
(22,203,742)
6,747,586
27,761,631
160,168
(21,517,016)
6,404,783
(846,894)
(846,894)
(702,340)
(702,340)
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
111
Authorisation of financial statements
25
The consolidated financial statements for the year ended 30 June 2023 were approved by the board
of directors on 28 September 2023.
Andrew Van Der Zwan
Chairman
Shane Turner
Director/Secretary
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
112
Directors’ declaration
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 2023 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
2023.
3. The consolidated financial statements comply with International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Dated at Melbourne, the 28th day of September 2023.
_______________________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 2023, 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 2023 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 Group incurred a net loss after
income tax of $846,894 and net cash outflows from operating and investing activities of $1,627,144 for the year
ended 30 June 2023. 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 Group’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.
113
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 $731k
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.
During the year, impairment to exploration and
evaluation assets in Mozambique totalled $112k
as detailed in Note 12 due to the Group’s
intention to relinquish tenement 6864L.
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.
114
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 2023 but does not include the financial report and the
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report, or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of 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.
115
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
2023.
In our opinion, the Remuneration Report of MRG Metals Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J. C. Luckins
Director
Melbourne, 28 September 2023
116
117
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
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 11 September 2023.
Substantial Shareholders
There was one substantial shareholder at 11 September 2023.
Name
10 Bolivianos P/L
Holdings Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 and over
Ordinary Shares
Number Held
111,930,199
%of quoted
shares
5.12
Shareholders
47
15
48
562
1,374
2,046
There were 874 holders of less than a marketable parcel of ordinary shares.
Ordinary Shares
Twenty largest quoted shareholders
Number Held
10 Bolivianos P/L
CJ & M Gregory S/F A/C
BNP Paribas Nominees P/L
JNW SFund P/L JNW S/F A/C
M Fimeri
Citicorp Nominees P/L
C Niu
Rob Roy P/L John Wright Family A/C
AJ Barker
S & E Turner Turner S/F A/C
Finger Lakes P/L Anvil Investment A/C
R Joekar
KV Van Der Zwan Harleston Family A/C
Altera P/L S/F A/C
A & KV Van Der Zwan S/F A/C
EJ Heymann
D & J Furfaro
First Investment Partners P/L
Jolanza P/L Jolanza A/C
MC Anderson
111,930,199
51,813,536
43,114,144
38,100,000
38,096,666
34,857,160
34,125,000
32,951,031
30,000,000
26,982,509
26,451,677
25,000,000
23,241,679
21,902,877
20,625,000
20,135,000
20,000,000
18,400,000
18,000,450
17,349,000
653,075,928
%of quoted
shares
5.12
2.37
1.97
1.74
1.74
1.59
1.56
1.51
1.37
1.23
1.21
1.14
1.06
1.00
0.94
0.92
0.91
0.84
0.82
0.79
29.88
118
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
Restricted equity securities
Nil
Securities exchange
The Company is listed on the Australian Securities Exchange and shares are quoted under the code
MRQ.
Twenty largest quoted optionholders
Number Held
A Knowles
Benjay P/L
C Niu
10 Bolivianos P/L
R Joekar
MF Durward
FZ Feng
M Fimeri
First Investment Partners P/L
Vivo Trading P/L
Simmo Enterprises P/L
PJ Savage & C Savage P&C Savage S/F A/C
Superhero Securities Limited
Riya Investments P/L
D Kenley
V Brizzi & RL Brizzi Brizzi Family S/F A/C
R Gropel
JY Kiu Or Poon
Blind Tiger P/L DG Borrowdale S/F A/C
SJ Reid & LS Reid Lilypilly S/F A/C
32,000,000
28,184,810
25,000,000
22,396,000
20,000,000
20,000,000
19,999,996
19,200,000
19,200,000
13,458,333
12,413,333
11,640,000
10,522,494
10,000,000
10,000,000
10,000,000
9,999,995
9,999,994
7,871,298
7,083,333
318,969,586
Options
%of quoted
options
5.41
4.76
4.22
3.78
3.38
3.38
3.38
3.24
3.24
2.27
2.10
1.97
1.78
1.69
1.69
1.69
1.69
1.69
1.33
1.20
53.89
Securities exchange
The Company is listed on the Australian Securities Exchange and options are quoted under the code
MRQO.
119
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
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
Olinga
Patricio
Fotinho
Adriano
Tenement
K nr 1
nr 100
nr 101
11142C
11137C
10779L
7423L
6842L
6846L
11005L
10999L
11000L
11002L
% Owned
10
10
10
100
100
100
100
100
100
100
100
100
100
Note
Application
Application
Application
Application
Application
Application
120
MRG Metals Ltd
Consolidated Financial Statements
30 June 2023
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, MRQO