For personal use only CORPORATE DIRECTORY
DIRECTORS
Steven Cole
Non-Executive Chairman
Christopher Reed
Managing Director
David Reed
Non-Executive Director
Dr Natalia Streltsova
Non-Executive Director
Douglas Ritchie
Non-Executive Director
Dr Jenny Purdie
Non-Executive Director
Les Guthrie
Non-Executive Director
COMPANY SECRETARY
Jason Carone
REGISTERED OFFICE
Level 3, 1292 Hay Street
West Perth WA 6005
CONTACT DETAILS
Telephone (+618) 9322 1182
Facsimile (+618) 9321 0556
www.neometals.com.au
AUDITORS
Deloitte Touche Tohmatsu
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St Georges Terrace
Perth WA 6000
STOCK EXCHANGE LISTING
Neometals Ltd are listed on
the Australian Stock Exchange
(Home Branch – Perth)
ASX Code: NMT
ACN: 099 116 631
ABN: 89 099 116 631
North American OTC Market
(DR Symbol: RDRUY)
ANNUAL GENERAL MEETING
3pm Wednesday 20 November 2019
Parmelia Hilton Perth
14 Mill St,
Perth WA 6000
For personal use only 1
Neometals Annual Report 2019
CONTENTS
CHAIRMAN &
MANAGING DIRECTOR’S ADDRESS
2-3
REVIEW OF OPERATIONS
DIRECTORS’ REPORT
REMUNERATION REPORT
AUDIT REPORT
AUDITOR’S INDEPENDENCE
DECLARATION
DIRECTORS’ DECLARATION
CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT
OF CASH FLOWS
FINANCIAL STATEMENTS CONTENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
ADDITIONAL SHAREHOLDER
INFORMATION
4
25
32
41
46
47
48
49
50
51
52
53
98
For personal use only 2
CHAIRMAN &
MANAGING DIRECTOR’S ADDRESS
Dear Shareholders,
FY 2018/2019 proved to be a milestone year for Neometals with significant achievements on
multiple fronts. Broadly, the year under review saw the Company refine its integrated project
development focus with a move away from upstream lithium mining in favour of expediting
the development of its mineral and advanced material growth projects.
The strategic sale of the Company’s
remaining equity holding in the Mt Marion
lithium mine with retention of annual offtake
rights at market pricing proved to be prescient.
The spodumene market has come under
significant short to medium-term supply side
pressure and a corresponding commodity
price correction has validated the decision to
sell. Importantly, the transaction generated a
significant financial capital reserve for Neometals
and the valuable life of mine offtake option
underwrites Neometals’ continuing participation in
lithium battery materials downstream processing
opportunities which are projected to emerge in
the medium term. It also marked the culmination
of years spent strategically creating an ecosystem
building inherent value for future realisation
with exposure to downstream opportunities
developed and retained.
Neometals has a clear strategy and a unique
approach that looks to combine the following
elements:
1.
2.
3.
4.
Identifying and securing diversified project
development opportunities connected to the
electric vehicle battery and stationary energy
storage sectors;
Applying its ecosystem of expertise to
build and realise inherent value in
project and opportunity commercialisation
through co-venturing with strong industry
relevant partners to fast-track development
and returns, minimise Neometals’ capital
outlay and mitigate financial and
operating risks;
Shortening the timeline to project
development, commercialisation and
cashflow realisation leading to the
acceleration of returns to shareholders;
and
Using returns from past project success
to finance growth projects and to fund
innovation to enable downstream processing
of upstream mineral and advanced
material feedstocks.
Neometals Annual Report 2019
For personal use only 3
CHAIRMAN &
MANAGING DIRECTOR’S ADDRESS (CONTINUED)
Neometals’ project development approach
allowed the Company to deliver total realised
returns to date from its Mt Marion project
participation of almost $AUD200m off an initial
$AUD3m investment. The Company’s business
model and aim is to replicate this success.
Key business highlights that support the
Company’s current position include:
Security
•
A strong balance sheet (~$AUD114m cash
and term deposits plus $AUD8.9m in net
receivables and listed securities as at 30 June
2019) courtesy of internally generated returns.
The Company has not raised dilutive equity
capital since 2013;
•
•
A history of de-risking opportunity
development with strong operating and
offtake partners;
A history of disciplined capital allocation,
value realisation and shareholder returns
with $6 million in share buy backs and
$39 million in total dividends being paid
to shareholders progressively over the
last 4 years; and
•
A strong diversified board and disciplined
management team.
Opportunity
•
The financial means to pursue development
of its growth projects;
•
•
•
Diversified and mature portfolio of minerals
and advanced materials required for a
sustainable future;
Risk-mitigating business model that
supports innovation towards the head of the
trend - so as to deliver enhanced margins;
Clear growth strategy with an approach
validated by prudent timing and value
realisation;
•
•
•
•
The assurance of its track record to
leverage stronger financial outcomes
from future project transactions;
Three advanced core project priorities
together with mineral exploration,
processing and longer-term technology-
based projects;
All projects sharing common DNA with
their connection to the globally relevant
electric vehicle battery and stationary
energy storage thematic; and
A market discrepancy where share market
capitalisation is less than cash backing and
value crystallisation opportunities exist on
multiple fronts as already mature projects
continue to advance.
Over the year, your Company’s Board and
management have worked hard to fulfil Neometals
stated corporate purpose, “to innovatively develop
opportunities in minerals and advanced materials
essential for a sustainable future”.
Strong disciplined governance and focus on
dynamic corporate strategy underpins the
Neometals commitment to delivering value to
our shareholders, partners and community.
Neometals’ innovative business approach offers
a combination of security, returns and growth
opportunities in a diversified project pipeline.
Your Board is confident of the Company’s future,
and together with the management team, we are
committed to realising the Company’s success
which we look forward to sharing with our loyal
and supportive shareholder base.
Steven Cole
CHAIRMAN
17 October 2019
Chris Reed
MANAGING DIRECTOR
Neometals Annual Report 2019
For personal use only 4
REVIEW OF OPERATIONS
The directors of Neometals Ltd (‘Company’ and ‘Neometals’) present
the annual financial report for the Company and its controlled entities
(‘Consolidated Entity’ and ‘Group’).
Neometals innovatively develops opportunities in minerals and advanced materials essential for a sustainable
future. The Company strategy focuses on de-risking and developing long life projects with strong partners and
integrating down the value chain to increase margins and return value to shareholders.
Neometals has three core projects:
A proprietary process for
recovering cobalt, nickel,
lithium and other valuable
materials from scrap and end-of-
life lithium batteries. Pilot plant
testing currently underway
with commercial development
decision expected in the
December 2020.
Progressing evaluation activities
for the development of India’s
first lithium refinery with
Manikaran Power Limited to
supply lithium hydroxide to the
battery cathode industry. Project
underpinned by a binding life-
of-mine annual offtake option
for 57,000 tonnes per annum
of Mt Marion 6% spodumene
concentrates. Commercial
development decision expected
in the 1H CY2021.
One of the world’s highest-grade
hard-rock titanium-vanadium
deposits, currently evaluating
an all-hydrometallurgical process
to extract high purity titanium
and vanadium chemicals
with a view to identifying the
optimal process flowsheet for
development of this globally
significant resource in 2020.
Neometals Annual Report 2019
For personal use only 5
REVIEW OF OPERATIONS (CONTINUED)...
CORE PROJECTS:
(Neometals Ltd 100%)
Neometals has developed a process flowsheet
targeting the recovery of 90% of all battery
materials from end-of-life lithium-ion batteries
(LIBs) that might otherwise be disposed of
in land fill or processed in energy-intensive
Neometals High-Level Flowsheet
LiCo/NMC
Battery
Feed
STAGE 1
SHREDDING
2nd Life
pyrometallurgical recovery circuits. Neometals’
process flowsheet targets the recovery of valuable
materials from consumer electronic batteries
(devices with lithium cobalt oxide (LCO) cathodes),
and nickel-rich EV and stationary storage battery
chemistries (lithium-nickel-manganese-cobalt
(NMC) cathodes). The flowsheet is designed
to recover cobalt, nickel, lithium, copper, iron,
aluminium, manganese into saleable products and
is being validated currently in a pilot plant at SGS
Lakefield in Ontario, Canada (Pilot).
Black
Powder
STAGE 2
REFINING
Plastics
Metal Foil
Base Metals
Co, Ni, Cu
Lithium
Graphite
Figure 1 - High level flowsheet showing the materials
generated from Feed Preparation and Hydrometallurgical
Processing facilities
Scoping Study and Pilot Plant
During the year Neometals announced the result of a Class 5 scoping study (‘Study’) to Association for the
Advancement of Cost Engineering (‘AACE’) standard. Primero Group Ltd (‘Primero’) was engaged to complete
the Study which determined operating and capital costs based on Neometals’ bench-scale validation and
optimisation test work. Process design criteria and mass/energy balances were prepared by Strategic
Metallurgy Pty Ltd (‘Strategic Metallurgy’) and financial modelling was undertaken by Azure Capital.
Neometals Annual Report 2019
For personal use only 6
REVIEW OF OPERATIONS (CONTINUED)...
The Study indicated potentially robust
economic outcomes with estimated operating
costs of less than US$7/lb of contained cobalt
as cobalt sulphate, before by-product credits,
from the processing of 50 tonnes per day of an
equal amount of lithium-cobalt (‘LCO’)(consumer
electronic) and lithium-nickel-manganese-cobalt
(‘NMC’)(electric vehicle) batteries.
Primero completed the Study considering both
a 10 tonnes per day (‘tpd’) and a 50tpd battery
shredding and hydrometallurgical processing
circuit (‘Recycling Plant’), with AACE Class 5
order of magnitude (±35%) capital cost and
(±35%) operating cost estimates.
Table 1 - Study Financial Highlights
Scoping Study Highlights
Annual Production
Life of Plant (LOP)
Life of Plant (LOM) Revenue
Pre-tax Cashflow
Pre-tax NPV (12% discount rate)
Average Net Operating Cost of recovered cobalt as cobalt sulphate
excluding by-product credits
Total initial capital costs
Payback of capital costs
For full details refer to ASX announcement entitled “Neometals Completes Lithium Battery
Recycling Scoping Study” released on 4 June 2019.
Neometals Annual Report 2019
The Recycling Plant flowsheet, which is being
optimised at pilot scale, comprises two sections:
1. Shredding, removal of metal casings
and plastics in the feed preparation facility
(‘Feed Preparation Facility’); and
2. Leaching, recovery and refining to
deliver chemical products via the
hydrometallurgical processing facility
(‘Hydrometallurgical
Processing Facility’).
The Study estimate was based on a
development scenario characterised by:
• Establishing a green-fields operation for an
integrated shredding and processing plant
nominally located in Kwinana (chosen as an
assumed site for accuracy and estimation
conservatism);
• Modular plant with a throughput capacity
of 18,250tpa; and
• LIB feedstock comprising 50:50 LCO and
NMC batteries.
9,623 t Cobalt Sulphate
5,635 t Copper Sulphate
1,544 t Lithium Sulphate
2,020 t Nickel Sulphate
10 years
US$ 850 million
US$ 502 million
US$ 220 million
US$6.65/lb (US$14.65/kg)
US$66 million
2 years
For personal use only
7
During the year the Company commenced
commissioning its mixed chemistry LIB recycling
pilot in Canada. The Company awarded the
contracts to SGS Canada Inc.(SGS) to construct
and operate the bench-scale and pilot plant at
their fully accredited Lakefield facility.
Stage 1 of the Pilot comprises feed preparation
and Stage 2 is hydrometallurgical processing
and refining of products to deliver high-purity
materials for market qualification.
Neometals successfully commissioned its Stage
1 Feed Preparation Pilot in February 2019 then
shredded approximately 2 tonnes of spent LIBs
ready for subsequent leaching in the Stage 2
Hydrometallurgical Processing Pilot. During the
June quarter, Neometals advanced the following
aspects of its Pilot:
•
•
•
Feed Preparation Facility design was improved
based on lessons learned during the Feed
Preparation Pilot;
Pilot leaching of approximately 1,100kg of
shredded and cleaned LIBs (‘Black Mass’)
producing 2,500 litres of pregnant leach
solution for subsequent product recovery in
the Hydrometallurgical Processing Facility;
and
Bulk Hydrometallurgical Processing test-work
commenced with successful copper recovery
via solvent extraction.
Commercial Developments
Neometals continued to advance its engagement
with potential partners to commercialise the
recycling project. Dialogues with brand name
plant operators have been run in parallel with
maturing feed supply dialogues with electric
vehicle and battery manufacturers who have
scrap and end of life LIBs to recycle now. The
key takeaway from Neometals discussions
with industry and extensive due diligence is
that consensus forecasts on LIB demand,
predominantly from electric vehicle applications,
continue to predict sustained strong growth with
LIB materials supply side deficits predicted to
be the major constraint on growth. With internal
combustion engine powered vehicles predicted
to be phased out, the increase in LIB-powered
electric vehicles means sustained increase in
production scrap and in end of life cells that will
require mandated disposal through recycling.
Neometals has used its Montreal laboratory
facilities to evaluate more than 70 LIBs with a
range of cathode chemistries from vehicle
OEMs and electronic manufacturers. With the
Pilot now progressing to recovery from solution
and purification, it will soon be possible to
commence end user market evaluation of
finished chemical products from the
Hydrometallurgical Processing Facility.
Post Pilot completion, Neometals plans to
commence an AACE Class 3 feasibility study
and look to demonstrate its Recycling Plant in
advance of commercial deployment. Sites will
be considered either in Montreal at the
eometals industrial facility or at the site of a
commercial partner.
Neometals Annual Report 2019
For personal use only 8
REVIEW OF OPERATIONS (CONTINUED)...
(Neometals Ltd 100%)
During the year, the Company continued pursuing
its integrated lithium chemical production goals.
Key activities included:
•
•
•
Completion of the capital cost estimate
component of the FEED Study of the proposed
Kalgoorlie Lithium Refinery, a peer review of
the estimate and initial financial modelling of
the project;
Secured MoU with a leading Indian power
trader, Manikaran Power, to evaluate the
development of India’s first lithium refinery in
a 50:50 Joint Venture; and
Initial assessment of the impact of making
a zeolite co-product on the economics of
the project.
The key driver of the LR Project is to realise
value from the conversion of future spodumene
concentrates purchased under the Company’s
Mt Marion Spodumene Concentrate Offtake Option
(‘Offtake Option’). The annual Offtake Option
provides a fixed volume of up to 57,000tpa of
6% spodumene concentrate for conversion into
battery grade lithium hydroxide (LiOH) and lithium
carbonate (LC) for supply to LIB cathode and cell
makers. The LR has been designed to produce
lithium hydroxide and lithium carbonate in a plant
with capacity of approximately 10,000tpa lithium
hydroxide equivalent.
Neometals previously completed a capital cost
study on a proposed lithium refinery operation
in Kalgoorlie, WA, which indicated a higher than
anticipated capital intensity for the 10,000t LiOH
capacity. Neometals decided to delay further
evaluation on the Kalgoorlie site but continues to
advance the engineering and approvals processes.
The Company has confidence in the medium-to-
long term spodumene concentrate supply from
existing and emerging mining projects in the
Eastern Goldfields region to support consideration,
in due course, of a larger (~20,000t LiOH
capacity) conversion facility located in Kalgoorlie.
Discussions with potential project and offtake
partners are continuing.
The near term LR priority lies with joint
development activities for a potential Indian
project – see below.
Neometals Annual Report 2019
For personal use only REVIEW OF OPERATIONS (CONTINUED)...
MOU with Manikaran Power
Neometals and Manikaran Power Limited have
agreed to contribute their respective skills,
resources and know-how to evaluate development
of a LR in India and to share the costs of the
evaluation equally (for full details refer to ASX
announcement entitled ‘MOU – Lithium Refinery in
India’ released on 20 June 2019). Upon completion
of the feasibility study analysis, and subject to
agreement on terms, a final investment decision
(‘FID’) will be considered for a 50:50 joint venture
(‘JV’) to progress and develop the LR in India.
A positive FID and formal JV commitment would
see Neometals contributing to the venture its
‘life-of-mine’ offtake option volume (i.e. up to
57,000t per annum of 6% spodumene concentrate)
(‘Offtake Option’) retained as part of the Mt Marion
equity sale agreement (for full details refer to
ASX announcement entitled ‘Completion of
Mt Marion Sale and Strategy Guidance’ released
on 19 March 2019). Additional spodumene feed
would be sourced as required from external
sources to meet the LR’s needs depending on its
nameplate capacity. In the event of a positive FID
and formation of a JV, Manikaran will take the lead
role in procuring project financing for not less than
50% of the capital expenditure required, securing
regulatory approvals and Indian government
subsidies (as available), securing a suitable site
for the LR and securing necessary utility and
reagent supplies.
The MOU represents a significant step forward for
Neometals in its downstream lithium processing
strategy. It allows the realisation of value from its
Offtake Option to participate in higher value, higher
margin lithium chemical production for electric
vehicles, stationary energy storage and a more
sustainable future.
It is estimated that the feasibility study, which
needs to be completed irrespective of site, will
take approximately 18 to 24 months, with an FID on
whether to proceed with a potential JV likely to be
considered thereafter.
Zeolite
Zeolites are advanced industrial materials used
for water treatment, gas adsorption and green
chemistry applications. Manufacturing zeolites
from LR waste (spodumene leach residue) could
eliminate residue disposal and associated costs
9
from lithium chemical production and generate
significant co-product revenue.
Zeolite materials are produced as both naturally
occurring and synthetic materials. Synthetic
zeolites such as the specifications now produced
by Neometals at bench-scale, are typically used
in more demanding industrial applications such
as molecular sieves for air and hydrocarbon
purification. According to Markets and
Markets (2017), the global zeolite market was
approximately 2.4Mtpa with a total estimated
value in excess of US$13B per annum.
Late 2018 feedback from early engagement with
market participants on the Company’s ‘Type A’
zeolite led to bench-scale process optimisation
and the subsequent manufacture of a higher
value ‘Type X’ zeolite product.
Neometals’ zeolite development work is running
in parallel with continued evaluation of the optimal
design scale for its LR. During the year Neometals
advanced the work on its zeolite program and
successfully produced commercial grade samples
of ‘Type X’ zeolite from both Mt Marion and third-
party sourced spodumene leach residue via its
patent pending technology (for full details refer to
ASX announcement entitled “Neometals Zeolite
Production Evaluation Results” released on
24 June 2019). Benchmarking studies indicated
Neometals product quality to be comparable to
industry leading zeolite products from a leading
Japanese manufacturer.
Neometals Annual Report 2019
For personal use only 10
REVIEW OF OPERATIONS (CONTINUED)...
Demonstrating that Type A and Type X zeolites
could be produced from lithium refinery residue
represented a proof of concept breakthrough.
Subsequent production of synthetic zeolite, from
various sources of lithium refinery residue, at or
close to commercial benchmarks is extremely
encouraging. Neometals has engaged global
engineering company Exyte to complete a
Class 4 Engineering Cost Study (pre-feasibility
level) based on the current test-work.
Exyte is completing an AACE Class 4
pre-feasibility study for a zeolite manufacturing
facility located adjacent to the Kalgoorlie
Lithium Refinery. Neometals has since engaged
Queensland University of Technology to
perform continuous lab-scale process testing
to be followed by pilot testing in 2020. A Class 3
Engineering Cost and Feasibility Study is planned
to follow successful completion of the pilot plant
demonstration of the process. The pilot plant will
also generate customer evaluation samples of
the zeolite products.
Lithium Market Commentary
The demand side of the lithium market is
continuing to grow in line with consensus
forecasts. However, the high rate of growth
Figure 2 – Projected lithium market supply/demand
on the supply side through capacity expansions
and committed new production facilities for raw
materials and lithium compounds has exceeded
the rate of demand growth.
The global lithium market is reported to be
oversupplied currently and is forecast to remain
oversupplied until 2024 due to the cumulative
capacity of new conversion plants, particularly
those under construction in Australia.
The projected lithium market supply/demand
balance (in LCE units) is described in the SFA
Oxford chart below (Figure 2). A supply deficit from
2025 is probable at which time market conditions
will once again support and stimulate the
commissioning of new production capacity.
The Deutsche Bank price forecast (Figure 3) for
the most commonly traded lithium chemicals,
lithium carbonate and lithium hydroxide, and the
main hard rock lithium mineral, spodumene,
shows a trend for convergence between
Chinese spot prices and international prices.
Both Chinese spot prices and international
prices have peaked and are trending down to more
stable levels expected to prevail for the next five
years. Deutsche Bank is not forecasting any
price increases before 2025.
Neometals Annual Report 2019
For personal use only 11
REVIEW OF OPERATIONS (CONTINUED)...
This price forecast is supported by the ‘probable’
supply/demand balance scenario forecast by SFA
Oxford (Figure 2), which indicates that the market
will once again move into a supply deficit at
this time.
Forecast Lithium Prices
Prices for lithium chemicals and mineral
concentrates continued to soften in the June
quarter and are now considerably lower than
they were in 2018. According to Fastmarkets,
Chinese domestic prices for battery grade lithium
carbonate were in the range US$10,000 – 11,000/t
ex works and in North Asia (i.e. Japan & Korea)
at the end of June. Cost Insurance freight (‘CIF’)
prices were in the range US$11,000 - 12,500/t.
In the case of battery grade lithium hydroxide
Chinese domestic prices were US$11,500 –
12,300/t ex works in June and in North Asia.
CIF prices were US$14,000 – 15,000/t. Prices for
industrial grades of these chemicals traded at
slightly lower levels. The spread of prices results
from a range of product qualities offered by
different suppliers in the market.
Fastmarkets reported the CIF China price for
spodumene (5 - 6% Li2O) to be US$585 – 650 per
tonne at the end of June. This market has moved
Figure 3 – Deutsche Bank Lithium price forecast
into surplus as a result of the commissioning of
four spodumene mining operations in Western
Australia during 2018. In addition, Talison is
expanding its Greenbushes production to satisfy
demand for spodumene from the Tianqi lithium
hydroxide plant in Kwinana and the Albemarle
lithium hydroxide plant at Kemerton. Spodumene
concentrates are expected to be in surplus supply
for some years if current new entrants achieve
their design capacities and the Greenbushes
expansion proceeds as planned.
SQM has recently reported it will postpone a
planned capacity expansion of its lithium brine
operations in Chile in response to the current
lithium supply surplus and softer pricing outlook.
Notwithstanding pressure on the lithium market
in the near term, the longer-term outlook remains
robust. This is primarily due to the world’s motor
vehicle industry transitioning to the manufacture
of electric vehicles and lithium-ion battery
technology being the most suitable technology
for this industry.
Neometals Annual Report 2019
For personal use only 12
REVIEW OF OPERATIONS (CONTINUED)...
(Neometals Ltd 100%)
The Barrambie Vanadium and Titanium Project
in Western Australia (‘Barrambie’) is one of the
largest vanadiferous-titanomagnetite (‘VTM’)
resources globally (280.1Mt at 9.18% TiO2 and
Figure 4– Barrambie Mineral Resource Estimate, April 2018
Global Resource as at 17 April 20181
Indicated
Inferred
Total
High Grade V2O5 Resource (at 0.5% V2O5 cut-off)2
Indicated
Inferred
Total
High TiO2 Resource (14% TiO2 cut-off)2
Indicated
Inferred
Total
0.44% V2O5)*, containing the world’s
second highest-grade hard rock titanium
resource (53.6Mt at 21.17% V2O5 and 0.63% V2O5)*
and high-grade vanadium resource (64.9Mt at
0.82% V2O5 and 16.9% V2O5) subsets based on
the latest Neometals 2018 Mineral Resource
Estimate (*for full details refer to ASX
announcement entitled ‘Updated Barrambie
Mineral Resource Estimate’ released on
17 April 2018 and Figure 4 below).
Tonnes (M)
TiO2 (%)
V2O5 (%)
187.1
93.0
280.1
9.61
8.31
9.18
0.46
0.40
0.44
Tonnes (M)
TiO2 (%)
V2O5 (%)
49.0
15.9
64.9
Tonnes (M)
39.3
14.3
53.6
16.93
16.81
16.90
TiO2 (%)
21.18
21.15
21.17
0.82
0.81
0.82
V2O5 (%)
0.65
0.58
0.63
(1) Based on cut-ff grades of 10% TiO2 or
(2) The high grade titanium and vanadium figures are a sub-set of the total Mineral Resource. These figures are not additive and are
reporting the same block model volume but using different cut-off grades.
0.2% V2O5
Neometals Annual Report 2019
For personal use only REVIEW OF OPERATIONS (CONTINUED)...
Barrambie is located approximately 80km
Northwest of Sandstone in Western Australia, has
a granted mining permit and has been the subject
of approximately AUD$30 million in Neometals
exploration and evaluation expenditure since 2003.
During the year the Company completed an update
to its 2009 definitive feasibility study (‘Updated
DFS’) which considered primary vanadium
production from a conventional salt roast-leach
process at Barrambie. The Updated DFS focused
on production of high purity vanadium pentoxide
and ferrovanadium, primarily from Barrambie
Central Band ore, which was confirmed to be
technically feasible and economically viable.
The Updated DFS did not consider the impact to
project economics of exploiting the considerable
quantity of contained titanium through a whole of
deposit processing solution. This represents the
next stage of project evaluation.
The Updated DFS used the latest Neometals
2018 Mineral Resource Estimate* as a basis.
The Updated DFS establishes Ore Reserves,
estimated using the guidelines of the 2012 edition
of the Australian Code for Reporting Exploration
Results, Mineral Resources and Ore Reserves
‘(JORC Code (2012))’.
13
Key highlights from the Updated DFS are shown
in Figure 5 below:
MINERAL RESOURCE*
280.1Mt
@ 0.44% V2O5
ORE RESERVE**
39.9Mt
@ 0.78% V2O5
PROCESSING PLANT
6,337t
FEV80 pa
MINE LIFE***
15 YEARS
OPEX
US$26.27
/kg V in FE80
PAYBACK
5.1 YEARS
CAPITAL COSTS
US484M****
A$692M
PRE TAX NPV10
IRR 21%*****
A$692M
US$301M
A$430M
*Refer to Figure 4
** Probable
*** Years of processing plant operation
**** USD: AUD 0.70
***** At US$48.71/kg V
For full details refer to ASX announcement
entitled ‘Barrambie Vanadium Production and
Commencement of Titanium Pilot Plant Program’
released on 22 May 2019.
Neometals Annual Report 2019
For personal use only 14
REVIEW OF OPERATIONS (CONTINUED)...
Neometals has made significant investment
in the acquisition, exploration and evaluation
of Barrambie since 2003. Given the size and
scale of the titanium and vanadium resources,
the Company continues to evaluate a range of
metallurgical processing routes seeking how
best to realise value from both minerals.
The Company has maintained its focus on
recovering a titanium co-product to maximise the
probability of developing Barrambie and realising
maximum value for shareholders. Going forward,
subject to final board approval, this focus will see
the 2015 titanium pre-feasibility study (‘PFS’) (for
full details refer to ASX announcement entitled
‘Barrambie Pre-feasibility Study Results’ released
on 25 August 2018) updated using data from a
newly designed hydrometallurgical pilot test-work
program. The aim is to identify the optimal ‘whole
of deposit’ flowsheet to recover the maximum
value from this globally significant VTM resource
before moving to a Hydrometallurgical Definitive
Feasibility Study and subsequent Front-End
Engineering and Design (‘FEED’) Study.
The abovementioned titanium PFS was completed
on a proprietary hydrometallurgical process which
showed titanium chemical production to yield
the highest returns). Forward work programs
will focus on advancing towards pilot-scale
evaluation of a hydrometallurgical flowsheet
utilising atmospheric acid leaching to recover
titanium, vanadium and iron products in
combination with conventional and proprietary
acid regeneration equipment.
Neometals Annual Report 2019
Evaluation Activities
The Barrambie project is unique owing to its
exceptionally high titanium resource grade
coupled with high vanadium content and the
weathered nature of the orebody. Extracting value
from both minerals is nuanced and has required
Neometals to evaluate a range of metallurgical
processing routes. The comprehensive approach
has also been necessary to accommodate
fluctuations in the markets for vanadium
and titanium. At completion of the proposed
hydrometallurgical feasibility process, Neometals
will have a complete and extensive data set to
choose the best processing path from which
to base its FEED study.
Three conventional options exist for
Barrambie processing:
1.
2.
3.
Pyrometallurgy – electric arc smelting to
produce slag precursors for titanium and
vanadium chemical production;
Salt Roast Leach – production of vanadium
chemical/s and a titanium-iron residue; and
Hydrometallurgy – multi-stage leaching
coupled with acid regeneration to generate
both titanium and vanadium products.
For personal use only 15
REVIEW OF OPERATIONS (CONTINUED)...
Figure 6 – Barrambie Processing Options
CENTRAL BANDS
0.79% V2O5
1.25% TiO2
1.21% V2O5
19% TiO2
98.5% V2O5
FeV (80% V)
Barambie
Ore
EASTERN BAND
Barambie Mineral
Concentrates
Intermediate
Product
Final
Product
DFS complete
Pilot plant work at
AML commissioned
0.56% V2O5
22% TiO2
0.73% V2O5
+30% TiO2
Pilot being repeated
at IMUMR
Ti Slag
90% TiO2
TiO2 Hydolosate
Vanadyl Sulphate
Hydromet Pilot Planned
2H CY19
TiO2 Pigment
Vanadium
Sulphate
(Solid State Batteries)
Vanadium
Electrolyte
(VRB Batteries)
Vanadium & Titanium
Market Commentary
Vanadium
Ferro-vanadium and vanadium pentoxide
prices continued to drift lower during Q2 2019.
The average weekly ferro-vanadium price in
Europe in June was US$35.18/kg V, more than
50% down since January and more than 70%
down from the November 2018 peak of
US$124.59/kg V. Vanadium pentoxide prices also
fell. The prices of the two products are highly
correlated. Prices are now back to their Q4 2017
levels, erasing all the 2018 gains.
According to Fastmarkets, there were a few key
factors contributing to the meteoric price rise in
late 2018. On the demand side, the new Chinese
rebar standards led to higher levels of demand
for ferro-vanadium from Chinese steel mills.
Additionally, there was an expectation of higher
demand from the vanadium redox flow battery
sector. On the supply side, the market was tight
owing to the previous shuttering of capacity and
a subsequent decline in global inventories. With
approximately 70% of supply as co-product from
the steel industry and with no major projects set
to enter production in the near term, there were
concerns over whether supply could meet demand.
Neometals Annual Report 2019
For personal use only 16
REVIEW OF OPERATIONS (CONTINUED)...
Fastmarkets considers that the subsequent
downturn in prices was primarily a result of
two factors. Firstly, the new Chinese rebar
standards, implemented to eliminate low quality
rebar produced via the quenching and tempering
process, have not been strictly enforced. It is not
clear when monitoring of the new standards will
commence, however, some industry analysts
predict that the new standards will start
being enforced during the second half of 2019.
The second reason for the price drop appears to be
that niobium is substituting vanadium in some high
strength low alloy (HSLA) products and in 400MPa
rebar. The evidence for this is higher levels of
ferro-niobium imports into China in H2 2018
and early 2019.
Now that vanadium prices have returned to 2017
levels there does not appear to be any incentive for
steel mills to continue substituting ferro-vanadium
with ferro-niobium, in which case the downward
price trend of the last six months is expected to
end. Looking ahead, the output of the Chinese
stone coal producers, who are swing producers in
this industry, will be a factor in determining if the
vanadium market remains in deficit or if vanadium
prices resume their upward trend of recent years.
Titanium
The main titanium raw material is the mineral
ilmenite. Ilmenite is a relatively abundant mineral
recovered from hard rock deposits and from
heavy mineral sand deposits. The major hard rock
deposits currently being exploited are in Canada,
China, Norway and the Ukraine. The heavy mineral
sand deposits are distributed globally, mostly
in coastal regions of Australia, India, Vietnam,
South Africa, Mozambique, Tanzania and Kenya.
Other naturally occurring titanium minerals
recovered from heavy mineral sand deposits
include leucoxene and rutile. Beneficiated titanium
feedstocks include chloride slag, sulphate slag,
upgraded slag (‘UGS’) and synthetic rutile, all
of which are produced from ilmenite. The TiO2
pigment industry accounts for approximately
90% of titanium feedstock demand.
Figure 7 - Weekly Average European Ferro-vanadium and Vanadium Pentoxide Prices (Source: Fastmarkets)
Neometals Annual Report 2019
For personal use only 17
REVIEW OF OPERATIONS (CONTINUED)...
China is the world’s largest market for TiO2
accounting for more than one third of global
demand. Therefore, changes in the Chinese
market have implications for the wider Asian
market. According to Fastmarkets, titanium
dioxide availability in China is increasing as
exports to the United State have slowed in
response to trade measures and currency
fluctuations. Titanium dioxide prices in Asia fell
as higher US tariffs increased availability in China,
and the weakening yuan increased the buying
power of the dollar. Fastmarkets assessed the
price of titanium dioxide pigment, high quality,
bulk volume, CFR Asia, at $2,350 - 2,550 per
tonne on Thursday June 27, compared with
$2,700 - 3,100 per tonne a year earlier.
Market participants attributed this to three main
factors. The yuan is currently trading at its lowest
level in more than six months. At the end of June,
the Chinese currency was trading at approximately
6.9 yuan to the dollar, down by nearly 3% since
April. This means dollar-denominated purchases
Figure 8 - TiO2 Pigment Price, Asia (Source: Fastmarkets)
increase yuan-denominated receipts to sellers,
improving producer margins and allowing them
to consider lower offers. Chinese titanium dioxide
is now subject to a 25% tariff on entry to the US.
This is increasing the availability of the pigment
within China because Chinese exporters are
turning to the domestic market to avoid the tariffs,
which puts pressure on domestic prices. At the
same time US-China trade war concerns are
unsettling the Chinese economy, weighing on
local titanium dioxide demand.
Neometals Annual Report 2019
For personal use only Barrambie - Potential Crushing and
Beneficiation Plant layout
18
REVIEW OF OPERATIONS (CONTINUED)...
In China, a new round of environmental
inspections commenced in May to ensure
that protection measures are being properly
implemented. These inspections are being
undertaken in major cities and 25 regions across
the country. These protection measures include
the treatment of wastewater, protection of water
resources, treatment of solid or hazardous waste,
and the implementation of procedures for solid
waste processing. The sulphate route TiO2 pigment
producers are impacted by these measures due
to their high output of iron sulphate, gypsum and
other waste materials.
Neometals is currently evaluating
hydrometallurgical flowsheets to recover and
exploit titanium and vanadium. As it relates to
titanium, Neometals aims to produce a
high-grade titanium feedstock from Barrambie
mineral concentrate using the hydrometallurgical
process. This high-grade feedstock, which is
suitable for the sulphate pigment process, should
assist the Chinese pigment producers in their
efforts to reduce their environmental footprint
and comply with the increasingly stringent
environmental controls in this country.
BARRAMBIE MINE PLAN
Neometals Annual Report 2019
For personal use only 19
REVIEW OF OPERATIONS (CONTINUED)...
EXPLORATION PROJECTS:
(Neometals Ltd 100%)
The Mt Edwards tenements
cover an area of 240 square
kilometres in a historic
nickel sulphide belt, located
40km south of Mt Marion
and 35km west of Kambalda
in Western Australia.
The Mt Edwards project
hosts 123,000 tonnes of
contained nickel estimated
across ten Nickel Sulphide
Mineral Resources, within
what is emerging as a
highly endowed and globally
significant lithium province
(for full details refer to ASX
announcement entitled ‘Mt
Edwards Project Mineral
Resource Over 120,000
Nickel Tonnes’ released
on 22 June 2018).
A nickel targeting study has
commenced, with Newexco
Exploration consultants
conducting a thorough
review of geochemical
and geophysical datasets.
Neometals plans to carry out
nickel exploration in parallel
with lithium efforts over the
project, with soil sampling,
geological mapping and
geophysical interpretation
conducted during the year.
Exploration at Mt Edwards
continues to target fertile
Lithium-Caesium-Tantalum
(‘LCT’) pegmatites.
Figure 9 – Mt Edwards
Project Tenure
Neometals Annual Report 2019
For personal use only 20
REVIEW OF OPERATIONS (CONTINUED)...
Late in the year the Company has carried out a
15-hole reverse circulation (RC) drill and sample
program for a total of 2,705 metres. The program
was conducted on three tenements:
3. M15/96 (a regional area west of the
Mandilla gold prospects) -
Four holes were drilled on M15/96 to test
geophysical anomalies.
1. E15/989 (Lake Eaton) -
Neometals holds Nickel minerals rights in the
exploration licence; all other mineral rights are
held by Mincor Resources NL. Eight RC holes
are drilled at Lake Eaton area, focussed on the
ultramafic–basalt contact located along strike
from the Mincor’s Cassini Nickel Mineral
Resource (Cassini) (for full details refer to
Mincor Resources ASX announcement entitled
‘Investor Presentation (by David Southam)’
released on 19 February 2019);
2. M15/97 (Zabel prospect) -
Three holes have been drilled at the Zabel
prospect to confirm targeting infill areas of the
nickel Mineral Resource; and
The Mt Edwards Lithium & Nickel Project
All drill holes were planned at -60 degree
angles, with varying azimuth angles in order to
‘orthogonally’ intercept the favourable geological
contact zones, which are known to host nickel
mineralisation and deposits in this region.
The Company announced significant nickel
sulphide intercepts at the Zabel prospect confirms
the high-grade tenor of mineralisation contained
within a large, moderate grade nickel inventory
at Mt Edwards, while the drilling at Lake Eaton
has shown elevated nickel grades on and near the
ultramafic – basalt contact along strike of Mincor
Resources’ high-grade Cassini nickel deposits.
(For full details refer to ASX announcement
entitled ‘Mt Edwards Nickel – Drill Results’
released on 5 August 2019)
Lithium exploration continues in parallel with
nickel over the project, with soil sampling,
geological mapping and geophysical interpretation
continuing to target fertile Lithium-Caesium-
Tantalum (‘LCT’) pegmatites.
Neometals Annual Report 2019
For personal use only REVIEW OF OPERATIONS (CONTINUED)...
CORPORATE:
Finances
Cash and term deposits on hand as of 30 June
2019 totalled A$113.7 million, including $4.2
million in restricted use term deposits supporting
performance bonds and other contractual
obligations. The Company has net receivables and
listed securities totalling approximately
$8.9 million.
Capital Management
In keeping with the Company’s strategy to deliver
prudent, capital efficient returns to shareholders,
on 1 May 2019 the Board declared a dividend of
2 cents per share (of which 1 cent was franked).
The total dividend paid out by the Company was
$10.9 million.
Issued Capital
The total number of shares on issue at 30 June
2019 was 543,974,269.
21
Compliance Statement
The information in the Review of Operations that relates to
Mineral Resource and Ore Reserve Estimates and updated DFS
Results and start of Titanium Pilot for the Barrambie Vanadium/
Titanium Project and Mineral Resource Estimates and Nickel
drill results for the Mt Edwards Project are extracted from the
ASX Announcements listed in the table below, which are also
available on the Company’s website at www.neometals.com.au
05/08/2019
Mt Edwards Nickel – Drill Results
21/05/2019
25/06/2018
17/04/2018
Barrambie Vanadium DFS Results
and Start of Titanium Pilot
Mt Edwards Project Mineral
Resource Over 120,000 Nickel
Tonnes
Updated Barrambie Mineral
Resource Estimate
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the original market announcements and that all
material assumptions and technical parameters underpinning
the estimates in the market announcements continue to apply
and have not materially changed. The Company confirms that
the form and context in which the Competent Persons’ findings
are presented have not been materially modified form the
original market announcements.
Neometals Annual Report 2019
Neometals Annual Report 2019
Neometals Annual Report 2019
For personal use only 22
REVIEW OF OPERATIONS (CONTINUED)...
Barrambie Project Mineral Resource Estimate
Classification
Tonnes (Mt)
TiO2 (%)
Indicated
Inferred
Total
187.1
93.0
280.1
9.61
8.31
9.18
V2O5 (%)
0.46
0.40
0.44
Reporting criteria: 10% TiO2 or 0.2% V2O5; small discrepancies may occur due to rounding;
Mineral Resources are reported inclusive of Ore Reserves.
See ASX Release 17 April 2018 titled: Updated Barrambie Mineral Resource Estimate
There has been no change in this estimate since last year’s Annual Statement.
Changes since last year’s Annual Statement for the Barrambie Project.
In May 2019 a Definitive Feasibility Study was completed on a salt roast leaching flowsheet with a focus on
extracting value from the Vanadium content of the orebody. The Reserve applicable to this study is:
JORC Code 2012
Reserve Category
Ore Tonnes
(Mt)
V2O5 (%)
TiO2 (%)
Fe2O3 (%)
AI2O3 (%)
SiO2 (%)
Probable
39.9
0.78
15.1
46.4
12.5
17.6
Cut-off based on 0.6% V2O5, cut-off (prior to dilution) and net value (revenue minus selling, processing, administration and incremental ore
mining costs
$0/t on a diluted block-by-block basis from the parameters used in the pit optimisation.
See ASX Release 22 May 2019 titled: DFS Results for Barrambie Vanadium Production and commencement
of Titanium Pilot Program.
Neometals Annual Report 2019
For personal use only 23
The information in this announcement that relates to
Ore Reserves (Metallurgy and Metallurgical Factors and
Assumptions) is based on, and fairly represents, information
and supporting documents, compiled by Gavin Beer who is
a full-time employee of Neometals Ltd and is a Chartered
Professional (Metallurgy) and Member of The Australasian
Institute of Mining and Metallurgy. Gavin Beer has sufficient
experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the
JORC Code (2012). Gavin Beer consents to the inclusion in the
report of the matters based on his information in the form and
context in which it appears.
The estimated Ore Reserves underpinning the production
targets in this announcement have been prepared by a
competent person in accordance with the requirements of
the JORC code (2012).
REVIEW OF OPERATIONS (CONTINUED)...
Competent Persons Statement
The information in this Annual Statement for Barrambie that
relates to Mineral Resources is based on, and fairly represents,
information and supporting documents compiled by John
Graindorge who is a full-time employee of Snowden Mining
Industry Consultants Pty Ltd and is a Chartered Professional
(Geology) and a Member of the Australasian Institute of Mining
and Metallurgy. John Graindorge has sufficient experience
that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity being undertaken to
qualify as a Competent Person as defined in the JORC Code
(2012). John Graindorge consents to the inclusion in this
Annual Statement of the matters based on his information in
the form and context in which it appears.
The information in this Annual Statement for Barrambie that
relates to Ore Reserves is based on, and fairly represents,
information and supporting documents compiled by Frank
Blanchfield who is an employee of Snowden Mining Industry
Consultants Pty Ltd and is a Fellow of The Australasian Institute
of Mining and Metallurgy. Frank Blanchfield has sufficient
experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the
JORC Code (2012). Frank Blanchfield consents to the inclusion
in the report of the matters based on his information in the
form and context in which it appears.
Mt Edwards Nickel Mineral Resource Estimate
Measured
Indicated
Inferred
TOTAL Mineral Resources
Tonne
(Kt)
Nickel
(%)
Tonne
(Kt)
Nickel
(%)
Tonne
(Kt)
Nickel
(%)
Tonne
(Kt)
Nickel
(%)
Nickel
(t)
10
2.1
110
280
3.5
2.3
10
30
150
1,070
1,060
330
575
625
955
4,805
1.8
4.9
1.3
1.3
1.4
1.8
1.4
1.5
1.8
1.5
120
320
150
1,070
1,060
330
575
2,193
625
955
7,395
3.4
2.6
1.3
1.3
1.4
1.8
1.4
1.9
1.5
1.8
1.7
4,070
8,180
1,950
13,380
14,840
5,780
8,210
40,720
9,160
17,050
123,340
Widgie Townsite
2,190
1.9
Widgie1
Gillet
TOTAL
10
2.1
2,580
2.0
Note: 1 Refer announcement ASX:NMT 19 April
Reporting criteria: Mineral Resources quoted using a 1% Ni block cut-off grade; Small discrepancies may
occur due to rounding
See ASX Release 25 June 2018 titled: Mt Edwards Project Mineral Resource Over 120,000 Nickel Tonnes
There has been no change in this estimate since last year’s Annual Statement.
Neometals Annual Report 2019
Deposit
132N1
Armstrong1
Cooke1
McEwen1
McEwen
Hangingwall1
Zabel1
Mt Edwards
For personal use only 24
REVIEW OF OPERATIONS (CONTINUED)...
Competent Persons Statement
The information in this Annual Statement for Mt Edwards
that relates to Widgie Townsite, Widgie 3 and Gillet Mineral
Resources is based on, and fairly represents, information
and supporting documentation compiled and prepared by
Mr Luke Marshall. Mr Marshall is a sole trader and
independent contractor to Neometals Ltd.
The information in this Annual Statement for Mt Edwards that
relates to the Mt Edwards Mineral Resources is based on, and
fairly represents, information and supporting documentation
compiled and prepared by Mr Andrew Bewsher. Mr Bewsher is
an employee of BM Geological Services who provides consulting
services to Neometals Ltd.
Both Mr Marshall and Mr Bewsher are Members of
The Australasian Institute of Geoscientists have sufficient
experience which is relevant to the styles of mineralisation and
types of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in
the 2012 Edition of the JORC Code.
Mr Marshall and Mr Bewsher have provided prior written
consent as to the form and context in which the Mineral
Resources and the supporting information are presented in
this market announcement.
Other changes in Minerals Resources to that Reported in 2018
In 2018 Neometals reported on the Mineral Resources at the Mt Marion lithium project of which the
Company had a 13.8% interest. During this financial year Neometals sold its interest in Reed Industrial
Minerals Pty Ltd the holder of the Mt Marion Lithium Project. Accordingly, the Company no longer has any
interest in the Mt Marion’s Mineral Resources.
Governance Arrangements
The Company ensures that all Mineral Resource estimates are subject to appropriate levels of governance
and internal controls.
Exploration results are collected and managed by a qualified geologists. All data collection activities are
conducted to industry standards based on a framework of quality assurance and quality control protocols
covering all aspects of sample collection, topographical and geophysical surveys, drilling, sample preparation,
physical and chemical analysis and data and sample management.
Mineral Resource and Ore Reserve estimates for Barrambie and Mt Edwards have been prepared by
qualified independent Competent Persons. If there is a material change in the estimate of a Mineral
Resources and Ore Reserves, the estimate and supporting documentation in question is reviewed by a
suitable qualified independent Competent Person. The Company is not aware of any new information or data
that materially affects the information included in the Annual Statement with regard to Mineral Resources
and Ore Reserves, and confirms that all material assumptions and technical parameters underpinning the
estimates continue to apply and have not materially changed.
The Company reports its Mineral Resources and Ore Reserves for Barrambie and Mt Edwards on an
annual basis in accordance with the 2012 JORC Code.
Neometals Annual Report 2019
For personal use only 25
DIRECTORS REPORT 2019
The directors of Neometals Ltd submit their report for the
financial year ended 30 June 2019.
The names and particulars of the directors of the Company
during or since the end of the financial year are:
Current Directors
Steven Cole
Non-executive Chairman
Steven Cole has over 40 years of professional,
corporate and business experience through senior
legal consultancy, as well as a range of executive
management and non-executive appointments.
His extensive boardroom and board sub-
committee experience includes ASX listed,
statutory, proprietary and NFP organisations
covering the industrial, financial, educational,
professional services, agribusiness, health and
resources sectors.
David J. Reed OAM
Non-executive Director
David Reed is a Fellow of CPA Australia with
over 45 years’ experience in stock broking and
corporate management. From 1985 to 1997
Mr. Reed was chairman of stock-broking firm
Eyres Reed Ltd until its sale to CIBC World
Markets in 1997 at which time he became
Chairman of CIBC Australia, a position he held
until 2003. Mr. Reed has served as chairman of
several ASX listed mineral exploration companies
and served as Chairman of Neometals Ltd since
inception in 2001 to 27 November 2015 when
he was succeeded by Steven Cole. Mr. Reed is a
former chairman of the fund raising committee
Steven’s professional qualifications include:
•
•
•
•
Llb (hons)– University of Western Australia
AICD Company Directors Diploma
and Fellow;
Wharton Business School – University
of Pennsylvania – Corporate Governance
Program 2010
Harvard – Corporate Governance
Program 2015
Appointed: 24 July 2008
Special responsibilities: Chairman of each of the
Nomination and Remuneration Committees and
Member of the Audit Committee.
Directorships of other listed companies:
Non-executive Director Matrix Composites and
Engineering Ltd.
for the Australian Prospectors and Miners Hall
of Fame and secretary of the Amalgamated
Prospectors and Leaseholders Association and
was a co-founder of the Diggers and Dealers
Forum in Kalgoorlie. Mr. Reed received an Order
of Australia Medal in 2002 for his service to
the community.
Appointed: 20 December 2001
Special responsibilities: Deputy Chairman
and Member of the Risk, Nomination and
Remuneration Committees
Directorships of other listed companies:
Nil.
Neometals Annual Report 2019
For personal use only 26
DIRECTORS REPORT 2019 (CONTINUED)
the Association of Mining and Exploration
Companies having served for 13 years,10 years
as Vice-president.
Mr. Reed holds a Bachelor of Commerce from
the University of Notre Dame and a Graduate
Certificate in Mineral Economics from the WA
School of Mines. He is a member of the AusIMM.
Appointed: 20 December 2001
Special responsibilities: CEO
America, Africa and the Former Soviet Union.
She is currently a Non‐Executive Director of
Western Areas Limited and Parkway Minerals.
Appointed: 14 April 2016
Special responsibilities: Chairman of the
Risk Committee and Member of each of the
Remuneration and Audit Committees.
Directorships of other listed companies:
Parkway Minerals NL & Western Areas Ltd
Doug is a Fellow of the Australian Institute
of Mining and Metallurgy and a Fellow of the
Australian Institute of Company Directors.
Appointed: 14 April 2016
Special responsibilities: Chairman of the Audit
Committee and Member of each of the Nomination
and Risk Committees.
Directorships of other listed companies:
Nil.
Christopher J. Reed
Managing Director
Chris Reed is an accountant with over 25 years’
experience in the resource industry including
more than 10 years in corporate administration
and management. Chris served as Managing
Director of Reed Resources Ltd (now Neometals
Ltd) from September 2007 until May 2012 at which
time he assumed the role executive director.
Chris resumed the role as Managing Director
from 1 October 2013. Mr. Reed is a councilor of
Dr. Natalia Streltsova
Non-executive Director
Natalia Streltsova is a PhD qualified chemical
engineer with over 25 years’ experience in the
minerals industry, including over 10 years in
senior technical and corporate roles with mining
majors - WMC, BHP and Vale. Dr Streltsova has
considerable international experience covering
project development and acquisitions in South
Mr Douglas Ritchie
Non-executive Director
Doug has four decades experience working in
the mining industry, including as a member of
Rio Tinto’s Executive Committee, and the Group
Executive responsible for China, Doug’s expertise
across the industry is extensive.
He has previously been a Director of Jinchuan
Group International Resources (HKSE), Rossing
Uranium Limited, Coal & Allied Limited (ASX 50),
and various other ASX listed companies.
He was also formerly Chairman of the Coal
Industry Advisory Board to the International
Energy Agency, a Director of the World Coal
Association and a Director of the Queensland
Resources Council. Between 2013 and April
2016, Doug was Chairman of UniQuest, the main
commercialisation vehicle of the University
of Queensland.
Neometals Annual Report 2019
For personal use only DIRECTORS REPORT 2019 (CONTINUED)
27
Dr Jenny Purdie
Non-executive Director
Dr Purdie’s extensive career has seen her hold
roles in engineering, senior technology, strategy
and operations for leading international mining
companies. Dr. Purdie is currently a senior
executive of Jemena Management Holdings
– Executive General Manager Gas Distribution -
which follows her role as CEO of Adani from 2017
to 2018. Dr. Purdie previously served as Executive
Vice President at Aurizon, Global Practice
Leader for Rio Tinto’s Technology and Innovation
team (leading a global network of in-house
technologists and suppliers to deploy innovative
technologies across Rio Tinto operations) and she
filled engineering and management roles with
Rio Tinto, Alcoa and Altona Petrochemical.
Dr Purdie has worked in a number of senior
management and operational roles and has
been deeply immersed in technology development.
She has a PhD and Bachelor of Engineering
(Chemical and Materials, Hons 1) from Auckland
Mr Les Guthrie
Non-executive Director
Mr Guthrie has over 40 years experience in the
project delivery space. He has held corporate
executive and project management roles, across
the UK, Australia, North America and Asia. It is a
background steeped in the strategy, development
and delivery of major capital programs spanning
mining, infrastructure and oil & gas.
He is currently Managing Director of Bedford Road
Associates, where he has provided advice and
delivery support to clients in Mongolia, S.Korea,
New Zealand as well as in Australia. He was
recently invited to be the sole international guest
speaker at a conference jointly hosted by Seoul
National University and the Koream Ministry of
Trade & Industry.
Prior to establishing Bedford Road Mr Guthrie
was Vice President Projects for BHP Billiton.
Previously he held roles as Group Head of Capital
Projects and President LNG for BG Group in the
University and an Executive MBA from the
University of Queensland. She is a committee
member of Women in Mining and Resources
Queensland, a fellow of the Institution of Chemical
Engineers and a graduate of the Australian
Institute of Company Directors.
Appointed: 27 September 2018
Special Responsibilities: Member of the
Audit Committee
Directorships of other listed companies:
Nil.
UK, President of Aker Kvaerner Inc. in the US, and
Managing Director of Aker Kvaerner Australia.
Mr Guthrie was a founding contributor to the John
Grill Centre for Project Leadership at Sydney
University and is engaged as a subject matter
expert by Ernst & Young Advisory.
Appointed: 27 September 2018
Special responsibilities: Member of the
Risk Committee.
Directorships of other listed companies:
Nil.
Neometals Annual Report 2019
For personal use only 28
DIRECTORS REPORT 2019 (CONTINUED)
Company Secretary
Jason Carone
Chief Financial Officer and
Company Secretary
Mr. Carone is a Chartered Accountant with over
20 years’ experience in accounting and company
administration in Australia and South East Asia.
Mr. Carone holds a Bachelor of Commerce
in Accounting and Business Law from
Curtin University and is a member of the Institute
of Chartered Accountants, and Chartered
Secretaries Australia.
Appointed: 4 March 2009
Review of operations
The consolidated profit after income tax for the year attributable to members of Neometals Ltd was
$76.1 million (2018: $15.7 million). A detailed review of the Company’s operations during the financial year
can be found on pages 4 to 24 of this Annual Financial Report.
Changes in state of affairs
During the financial year the Consolidated Entity’s primary focus centered on advancing its advanced minerals
projects. There have not been any other significant changes in the affairs of the Consolidated Entity from the
previous year other than as disclosed in the Director’s Report.
Principal activities
The Consolidated Entity’s principal activities during the year centred on advancing its advanced minerals
projects and developing its technology business unit.
Events after the reporting period
No matters or circumstances have arisen since the end of the financial year that have significantly affected,
or may significantly affect the operations, results of operations or state of affairs of the Group in subsequent
financial years.
Future developments
The Consolidated Entity intends to continue its focus on disciplined evaluation and development of its
three core assets, the Lithium-ion Battery Recycling Project, the Lithium Refinery Project and the Barrambie
Vanadium and Titanium Project. These core projects are characterised by a combination of proven and
innovative process flow sheets, successful mining operations and large JORC – compliant Resources.
Neometals Annual Report 2019
For personal use only 29
DIRECTORS REPORT 2019 (CONTINUED)
Neometals Vision, Strategy & Execution
PURPOSE
STRATEGIC
PILLARS
CURRENT
FOCUS
Neometals innovatively develops opportunities in minerals and
advanced materials essential for a sustainable future.
Opportunity
Evaluation
We will take a
disciplined and
informed approach to
sourcing, evaluating
and developing and/or
divesting opportunities
consistent with
our value creation
objectives and appetite
for risk.
• Proactive opportunity
identification not
necessarily confined
to Li and V.
• Dual path battery
recycling evaluation.
• Final Barrambie
decision 2020.
Diversified
Portfolio
We will develop a
balanced porrfolio
of assets and
opportunities
that mitigates
risk throughout
market cycles and
ensures corporate
sustainability.
• Access nearer
term value for
Mt Edwards.
• Review other
non-core assets.
• Agree on action plan
for all other assets.
Innovation
We will leverage value
by applying innovative
technologies and
commercial models
and co-venturing with
strong partners.
Capability
We will build
organisational
capability to deliver
our strategies.
• Emphasis on means
towards cash
generation and/or
market validation.
• Develop and
formailise
opportunity
evaluation process
and report against.
• Business
development project
management and
HR resources.
DELIVERING VALUE TO OUR SHAREHOLDERS, PARTNERS & COMMUNITY
Environmental regulations
As required by section 299(1)(f) of the Corporations Act the Company confirms that it has performed all of its
environmental obligations in accordance with applicable environmental regulations.
Dividends
In respect of the financial year ended 30 June 2019, a special dividend of 2 cent per share, of which 1 share
was franked, was paid to the holders of fully paid ordinary shares on 15 May 2019.
Indemnification of officers and auditors
During the financial year the Company paid a premium in respect of a contract insuring the directors and
officers of the Company and of any related body corporate against a liability incurred as a director or officer,
to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the
nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Group or of any related body corporate against
a liability incurred as such an officer or auditor.
Unissued shares under option
There were no unissued ordinary shares of the company, Neometals Ltd, under option at the date of
this report.
No shares of the Company were issued during or since the end of the financial year as a result of the
exercise of an option over the unissued shares of the Company.
Please refer to the Remuneration Report on page 32 for details of Performance rights issued as part of
KMP remuneration.
Neometals Annual Report 2019
For personal use only 30
DIRECTORS REPORT 2019 (CONTINUED)
Directors’ security holdings
The following table sets out each director’s relevant interest in shares, debentures, and rights or options in
shares or debentures of the Company or a related body corporate as at the date of this report:
Directors
S. Cole
C. Reed
D. Reed
D. Ritchie
N. Streltsova
J. Purdie
L. Guthrie
Fully paid
Ordinary
Shares
Number
1,396,731
10,228,170
49,188,900
27,048
27,048
44,248
25,000
Share options
Number
Performance
Rights
Number
-
-
-
-
-
-
-
285,467
3,020,834
-
107,860
107,860
114,187
-
Directors’ meetings
The following table sets out the number of directors’ meetings (including meetings of committees of directors)
held during the financial year and the number of meetings attended by each director (while they were a
director or committee member). During the financial year, 10 board meetings, 2 nomination committee
meeting, 2 remuneration committee meetings, 1 risk committee and 4 audit committee meetings were held.
Board of
Directors
Nomination
Committee
Remuneration
Committee
Risk
Committee
Audit
Committee
Directors
Held
Attended
Held(1)
Attended Held(1)
Attended Held(2) Attended
Held
Attended
S. Cole
C. Reed
D. Reed
N. Streltsova
D.Ritchie
J. Purdie(3)
L. Guthrie(3)
10
10
10
10
10
8
8
10
10
10
10
9
8
8
2
n/a
2
n/a
2
n/a
n/a
2
n/a
2
n/a
2
n/a
n/a
2
n/a
2
2
n/a
n/a
n/a
2
n/a
1
2
n/a
n/a
n/a
n/a
n/a
1
1
1
n/a
1
n/a
n/a
1
1
1
n/a
1
4
n/a
n/a
4
4
2
n/a
4
n/a
n/a
4
4
2
n/a
Meeting numbers in the ‘Held’ column are the number of meetings held whilst the relevant director was a member
of the board or committee.
(1) Excludes several informal meetings of the members of the Nomination and Remuneration Committee to discuss matters including
the establishment of executive KPIs for incentive based remuneration and the TSR comparator group, board evaluation and board
succession planning.
(2) Excludes several informal meetings of the members of the Risk Committee and management to discuss matters including the
Company’s strategic direction and resultant changes in risk exposure.
(3) Dr Purdie and Les Guthrie were appointed 26 September 2018.
Neometals Annual Report 2019
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DIRECTORS REPORT 2019 (CONTINUED)
Proceedings on behalf of the company
No person has applied for leave of the court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or part of those proceedings. The Company was not a party to any such proceedings during the year.
Corporate Governance Statement
The Company is committed to high standards of corporate governance designed to enable the Company to
meet its performance objectives and better manage its risks.
The Company has adopted a comprehensive governance framework in the form of a formal corporate
governance charter together with associated policies, protocols and related instruments (together ‘Charter’).
The Company’s Charter is based on a template which has been professionally verified to be complementary
to and in alignment with the ASX Corporate Governance Council Principles and Recommendations 3rd Edition
2014 (‘ASX CGC P&R’) in all material respects. The Charter also substantially addresses the suggestions of
good corporate governance mentioned in the ‘Commentary’ sections of the ASX CGC P&R.
The Charter was formally adopted by the board on 28 November 2014. Prior to that date the Company’s
corporate governance charter was substantially reflective of the ASX Corporate Governance Council Principles
and Recommendations 2nd Edition.
The Board of Neometals is responsible for the corporate governance of the company and its subsidiaries.
The Board has governance oversight of all matters relating to the strategic direction, corporate governance,
policies, practices, management and operations of Neometals with the aim of delivering value to its
Shareholders and respecting the legitimate interest of its other valued stakeholders, including employees,
suppliers and joint venture partners.
Under ASX Listing Rule 4.10.3, Neometals is required to provide in its annual report details of where
shareholders can obtain a copy of its corporate governance statement, disclosing the extent to which the
Company has followed the ASX Corporate Governance Council Principles and Recommendations in the
reporting period. Neometals has published its corporate governance statement on the Corporate section
of its website:
www.neometals.com.au/reports/corporate-governance-statement.pdf
Neometals Annual Report 2019
For personal use only 32
REMUNERATION REPORT 2019
Key Management Personnel
The following persons were deemed to be Key Management Personnel (“KMP”) during or since the end of the
financial year for the purpose of Section 300A of the Corporations Act 2001 and unless otherwise stated were
KMP for the entire reporting period.
Non-executive Director/Chairman
Non-executive Director/Deputy Chairman
Non-executive Directors
• Steven Cole
• David Reed
• Natalia Streltsova Non-executive Director
• Douglas Ritchie
Non-executive Director
• Jenny Purdie
Non-executive Director (Appointed: 26 September 2018)
• Les Guthrie
Non-executive Director (Appointed: 26 September 2018)
Executive Directors
• Christopher Reed Managing Director and CEO
Other executives
• Jason Carone
• Michael Tamlin
• Darren Townsend Chief Development Officer
Chief Financial Officer and Company Secretary
Chief Operating Officer
Remuneration policy for key management personnel
Non-executive Directors
The board’s policy is to remunerate Non-executive Directors at market rates for comparable companies for
time, commitment and responsibilities. The remuneration committee on behalf of the board determines
payments to the Non-executive Directors and reviews their remuneration annually, based on market
practice, shareholder sentiment, board workload, company cashflow capacity and corporate performance
generally. Independent external advice and/or benchmark comparisons are sought when required. The
maximum aggregate amount of fees that can be paid to Non-executive Directors is $600,000 as approved by
shareholders at the Annual General Meeting on 27 November 2015. Fees for Non-executive Directors are
not linked to the performance of the economic entity. However, to align Directors’ interests with shareholder
interests, the Directors are encouraged to hold shares in the Company and invited to salary sacrifice fees for
performance rights pursuant to the company’s Performance Rights Plan (‘PRP’).
General
The remuneration policy for employees is developed by the Remuneration Committee taking into
account market conditions and comparable salary levels for companies of a similar size and operating in
similar sectors.
The Company adopted a revised PRP for its staff, executive KMP and Non-executive Directors in November
2017 and shareholders reapproved the issue of securities under the plan in November 2017. The board
believes that the PRP will assist the Consolidated Entity in remunerating and providing ongoing incentives to
employees of the Group.
The rules of the PRP enable the Company to issue performance rights to eligible personnel subject to
performance and vesting conditions determined by the Company. Each performance right entitles the holder,
for nil cash consideration, to one fully paid ordinary share in the Company for every performance right offered,
if the applicable performance and vesting conditions set for that holder are satisfied.
During the financial year a total of 2,137,056 (2018: 2,377,312) performance rights were offered to and
accepted by KMP. Of this amount 1,894,413 performance rights are subject to relative and absolute Total
Shareholder Return (TSR) and other strategic hurdles, details of which can be found in the ‘Service agreements
- performance based remuneration’ section below. Testing undertaken for the period ended 30 June 2019 and
31 December 2019 resulted in 166,796 performance rights subject to the TSR criteria vesting.
Neometals Annual Report 2019
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REMUNERATION REPORT 2019 (CONTINUED)
The Group’s remuneration policy for executive KMP seeks to balance its desire to attract, retain and motivate
high quality personnel with the need to ensure that remuneration incentivises them to pursue growth and
success of the Company without taking undue risks and without it being excessive remuneration.
To align the interests of the executive with that of the company remuneration packages for executive KMPs
contain the following key elements:
a) Fixed Base Salary – salary, superannuation and non-monetary benefits;
b) Short Term Incentives – cash bonus incentives applied to a maximum percentage of Fixed Base Salary and
structured against relative satisfaction (at the reasonable discretion of the board) of certain corporate and
personally related key performance indicators of the executive.
c) Long Term Incentives – the grant of performance rights in the Company, with value capped to a maximum
percentage of Fixed Base Salary, vesting progressively while the executive remains employed, with the
degree of vesting structured against the Company’s relative and absolute TSR performance against a
comparator group of companies as well as other strategic hurdles.
The Company’s remuneration is specifically designed to encourage loyalty and longevity of employment as
well as aligning the employee’s interests with those of the Company and the creation of genuine long term
sustainable value for security holders.
All remuneration provided to KMP in the form of share based payments are valued pursuant to AASB 2
Share-based Payment at fair value on grant date and are expensed on a pro rata basis over the vesting period
of the relevant security.
Relationship between the remuneration policy and company performance
The table below sets out summary information about the Consolidated Entity’s earnings and movements in
shareholder wealth for the five years to June 2019:
Revenue(i)
Net profit / (loss) before tax(ii)
Net profit / (loss) after tax(iii)
Share price at start of year
Share price at end of year
Market capitalisation at year
end (undiluted)
Basic profit / (loss) per share
Diluted profit / (loss) per share
Dividends Paid
30 June 2019
$
-
(19,242,733)
76,178,556
0.30
0.21
114,234,596
30 June 2018
$
Restated*
-
4,009,985
15,679,541
0.27
0.30
163,059,742
30 June 2017
$
30 June 2016
$
30 June 2015
$
-
4,745,744
4,963,444
0.450
0.270
147,447,206
-
83,832,380
84,606,280
0.091
0.450
251,590,166
419,526
(10,314,405)
(10,314,405)
0.018
0.091
45,701,361
0.1400
0.1401
10,879,485
0.0290
0.0288
5,435,325
0.0085
0.0084
11,260,217
0.1568
0.1562
11,181,785
(0.0203)
(0.0203)
Nil
(i)
Although the past 4 financial years have returned a net profit before tax there has been no revenues from ordinary activities.
The group has been profitable in these financial years from the sell down of the investment held in RIM in 2016 and 2019, and
respective associate profits booked from the project in 2017 and 2018 and an impairment reversal in 2018 relating to the
Barrambie project.
(ii) Exclusive of profits resulting from discontinued operations.
(iii)
Inclusive of profits resulting from discontinued operations.
*Refer to note 6 for details of restatement.
Neometals Annual Report 2019
For personal use only 34
REMUNERATION REPORT 2019 (CONTINUED)
Key management personnel remuneration
The KMP received the following amounts during the year as compensation for their services as directors and
executives of the Company and/or the Group.
Short-term employee benefits
Post-
employment
benefits
Share
based payments
Bonus
FY
18’19
$
-
-
-
-
-
-
-
Bonus
FY
18’19
$
-
-
-
-
-
Salary
& fees
$
2019
Non-executive Directors
73,059
S. Cole
73,059
D. Reed
62,100
N. Streltsova
62,100
D. Ritchie
54,795
J. Purdie
54,795
L. Guthrie
379,908
Executive directors
C. Reed
515,000
515,000
Other executives
M. Tamlin
J. Carone
D. Townsend
349,400
305,000
335,000
989,400
1,884,308
Total
Salary
& fees
$
2018
Non-executive Directors
73,059
S. Cole
73,059
D. Reed
62,100
N. Streltsova
62,100
D. Ritchie
270,318
Executive directors
C. Reed
515,000
515,000
Other executives
M. Tamlin
J. Carone
D. Townsend(1)
349,400
275,000
209,414
833,814
1,619,132
Total
Non-
Monetary(2)
$
Other
$
Super-
annuation
$
Shares
$
-
-
-
-
-
-
-
-
-
-
-
-
-
6,941
6,941
5,900
5,900
5,205
5,205
36,092
25,000
25,000
25,000
25,000
25,000
75,000
136,092
-
-
-
-
-
-
-
-
-
-
-
-
-
90,000
90,000
60,000
60,000
40,000
160,000
250,000
50,351
50,351
9,218
17,528
-
26,746
77,097
Short-term employee benefits
Post-
employment
benefits
Share
based payments
Non-
Monetary(2)
$
Other
$
Super-
annuation
$
Shares
$
-
-
-
-
-
-
-
-
-
-
-
6,941
6,941
5,900
5,900
25,682
25,000
25,000
25,000
25,000
15,909
65,909
116,591
-
-
-
-
-
-
-
-
-
-
-
61,200
61,200
50,000
50,000
50,000
150,000
211,200
2,409
2,409
127,866
22,324
-
150,190
152,599
Options
and
rights
$
50,000
-
12,000
12,000
-
-
74,000
Total
$
130,000
80,000
80,000
80,000
60,000
60,000
490,000
189,970
189,970
870,321
870,321
70,290
57,629
86,957
214,876
478,846
513,908
465,157
486,957
1,466,022
2,826,343
%
remuneration
linked to
performance
-
-
-
-
-
-
-
32
-
25
25
26
-
-
Options
and
rights
$
50,000
-
12,000
12,000
74,000
Total
$
130,000
80,000
80,000
80,000
370,000
159,374
159,374
762,983
762,983
67,803
56,503
32,271
620,069
428,827
307,594
156,577 1,356,490
389,951 2,489,473
%
remuneration
linked to
performance
-
-
-
-
-
29
-
19
25
27
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1)
Commenced 13 November 2018
(2) Relates to fringe benefits received by key management personnel
Neometals Annual Report 2019
For personal use only 35
REMUNERATION REPORT 2019 (CONTINUED)
Service agreements - performance based remuneration
The KMP of the Company, other than non-executive directors, are employed under service agreements.
A summary of performance conditions for relevant KMP are detailed below:
Name:
Position:
Term:
Termination:
Mr. J. Carone
Chief Financial Officer / Company Secretary
No defined term
3 months notice period and 3 months termination payment
Incentive based remuneration
Short Term Incentive
Each financial year during the term of his service agreement the board, at its sole discretion, may award
the KMP a cash bonus up to 25% of the KMP’s annual salary package ($330,000 inclusive of superannuation
for 2018-19). The basis for calculating the STI will be a range of criteria including both the KMP’s personal
performance and the Company’s financial performance/position and share price. The STI for 2018-19 was set
at a maximum of $82,500 of which 73% or $60,000 was agreed to be paid by management.
Long Term Incentive
Each financial year during the term of his service agreement the KMP is entitled to receive performance rights
granted under the Company’s Performance Rights Plan. The number of performance rights to which the KMP
may be granted is based on the following calculation and vesting of the performance rights are subject to
further criteria which are also set out below.
Calculation of potential entitlement to performance rights
P =
33
10
X
S
VWAP
Where:
P is the potential performance rights entitlement.
S is the KMP’s annual salary package for the applicable period
VWAP is the 30 day volume weighted average price of ordinary shares in Neometals Ltd for the period ended
30 June of the preceding financial year.
Name:
Position:
Term:
Termination notice period: 12 months by employee
Termination notice period: 6 months by executive
Mr. C. Reed
Managing Director
Expiry date of 30 June 2020
Incentive based remuneration
Short Term Incentive
Each financial year during the term of his service agreement the board, at its sole discretion, may
award the KMP a cash bonus of up to one third of the KMP’s annual salary package ($540,000 inclusive
of superannuation for 2018-19). The STI for 2018-19 was set at a maximum of $180,000 representing
approximately 33% of the annual base salary package of which 50% or $90,000 was acknowledged and agreed
by the Board and Mr C Reed. The basis for calculating the STI will be a range of criteria including both the
KMP’s personal performance and the Company’s financial performance/position and share price.
Long Term Incentive
Each financial year during the term of his service agreement the KMP is entitled to receive performance rights
granted under the Company’s Performance Rights Plan. The maximum number of performance rights to
which the KMP may be granted is based on the following calculation and vesting of the performance rights are
subject to further criteria which are also set out below, as approved by shareholders.
Neometals Annual Report 2019
For personal use only 36
REMUNERATION REPORT 2019 (CONTINUED)
Calculation of potential entitlement to performance rights
P =
50
100
X
S
VWAP
Where:
P is the potential performance rights entitlement.
S is the KMP’s annual salary package for the applicable period
VWAP is the 60 day volume weighted average price of ordinary shares in Neometals Ltd for the period ended
30 June of the preceding financial year.
Name:
Position:
Term:
Termination:
Mr. M. Tamlin
Chief Operating Officer
No defined term
6 months
Incentive based remuneration
Short Term Incentive
Each financial year during the term of his service agreement the board, at its sole discretion, may award the
KMP a cash bonus of up to 33% of the KMP’s annual salary package ($374,400 inclusive of superannuation
for 2018-19). The STI for 2018-19 was set at a maximum of $123,552 representing approximately 33% of
the annual base salary package of which 49% or $60,000 was acknowledged and agreed by the board and
Mr M Tamlin. The basis for calculating the STI will be a range of criteria including both the KMP’s personal
performance and the Company’s financial performance/position and share price.
Long Term Incentive
Each financial year during the term of his service agreement the KMP is entitled to receive performance rights
granted under the Company’s Performance Rights Plan. The maximum number of performance rights to
which the KMP may be granted is based on the following calculation and vesting of the performance rights are
subject to further criteria which are also set out below, as approved by shareholders.
Calculation of potential entitlement to performance rights
P =
33
100
X
S
VWAP
Where:
P is the potential performance rights entitlement.
S is the KMP’s annual salary package for the applicable period
VWAP is the 30 day volume weighted average price of ordinary shares in Neometals Ltd for the period ended
30 June of the preceding financial year.
Name:
Position:
Term:
Termination:
Mr. D. Townsend
Chief Development Officer
No defined term
6 months
Incentive based remuneration
Short Term Incentive
Each financial year during the term of his service agreement the board, at its sole discretion, may award the
KMP a cash bonus of up to 33% of the KMP’s annual salary package ($360,000 inclusive of superannuation
for 2018-19). The STI for 2018-19 was set at a maximum of $118,000 representing approximately 33% of the
Neometals Annual Report 2019
For personal use only 37
REMUNERATION REPORT 2019 (CONTINUED)
annual base salary package of which 34% or $40,000 was acknowledged and agreed by the CEO and
Mr D Townsend. The basis for calculating the STI will be a range of criteria including both the KMP’s personal
performance and the Company’s financial performance/position and share price.
Long Term Incentive
Each financial year during the term of his service agreement the KMP is entitled to receive performance rights
granted under the Company’s Performance Rights Plan. The maximum number of performance rights to
which the KMP may be granted is based on the following calculation and vesting of the performance rights are
subject to further criteria which are also set out below, as approved by shareholders.
Calculation of potential entitlement to performance rights
P =
33
100
X
S
VWAP
Where:
P is the potential performance rights entitlement.
S is the KMP’s annual salary package for the applicable period
VWAP is the 60 day volume weighted average price of ordinary shares in Neometals Ltd for the period ended
30 June of the preceding financial year.
Criteria
The grant of Performance Rights is designed to reward long term sustainable business performance
measured over a three year period with an opportunity for the performance conditions to be re-measured six
months later should they not vest at the first vesting date. The KMP’s entitlement to the performance rights is
dependent on 3 criteria:
(a) Tranche 1 – Relative TSR
The performance conditions of 40% of Performance Rights will be measured as at each vesting date by
comparing the Company’s total shareholder return (TSR) with that of a comparator group of resource
companies over the relevant period.
The Performance Rights will vest depending on the Company’s percentile ranking within the comparator
group on the relevant Vesting Date as follows:
• If the Company ranks below the 50th percentile, none of the Performance Rights will vest.
• If the Company ranks at the 50th percentile, 50% of the Performance Rights will vest.
• For each 1% ranking at or above the 51st percentile, an additional 2% of the Performance Rights will
vest, with 100% vesting where the Company ranks at or above the 75th percentile.
(b) Tranche 2 – Absolute TSR
The performance conditions of 40% of Performance Rights will be measured as at each vesting date by
calculating the Company’s TSR calculated over the period commencing on the Comparator Start Date and
ending on the relevant Vesting Date (Absolute TSR).
The Performance Rights will vest depending on the Company’s Absolute TSR on the relevant Vesting Date
as follows:
• If the Company’s Absolute TSR is less than 15%, none of the Performance Rights will vest.
• If the Company’s Absolute TSR is 15%, 50% of the Performance Rights will vest.
• For each additional 1% TSR above 15% Absolute TSR, an additional 10% of the Performance Rights will
vest, with 100% vesting where the Company’s Absolute TSR is at or above 20%.
Neometals Annual Report 2019
For personal use only
38
REMUNERATION REPORT 2019 (CONTINUED)
(c) Tranche 3 – Business plan
The performance conditions of 20% of Performance Rights will be measured as at each Vesting Date
s follows:
10% will vest if the combined market capitalisation of Neometals and any entity demerged from the
Neometals Group and separately listed on the ASX would meet the threshold for entry into the ASX/S&P
200 Index.
10% will vest if any two of the following have been achieved (as assessed by the Board):
• an LiOH plant is under construction or in operation;
• a Barrambie/Neomet plant under construction/in operation;
• an Li-Battery recycling plant under construction/in operation;
• third party royalties received from the commercialisation of Neometals’ technology A$5M in aggregate.
Performance rights granted to the KMP have a vesting period of 3 years from grant date and will lapse on the
KMP ceasing to be an employee of the Group prior to the vesting date.
The Company provides the KMP with performance based incentives in order to incentivise KMP to
pursue strategies that are aligned with the overall business strategy and the interests of the shareholders.
Where deemed appropriate the Company has set specific Key Performance Indicators as performance
criteria for staff that have a direct role/responsibility in achieving a specific outcome. To ensure that KMP are
also incentivised to pursue longer term strategies that increase shareholder wealth a portion of the KMP’s
remuneration is linked to a ‘comparative TSR model’ which links the level of the KMP remuneration to the
Company’s performance against a group of comparable ASX listed entities, using Total Shareholder Return
as the basis of comparison. KMP are also issued with performance rights with service conditions as vesting
criteria which assist the company retain staff as well as aligning the interests of the KMP with shareholders.
The Company has deemed the issue of service based performance rights as an appropriate form of
remuneration due to the uncertain nature of the Group’s business, that is, mineral exploration, mining and
developing new mineral processing technologies.
The comparator group adopted by the company for LTI granted in 2017 (vest 2020) is as follows:
• Galaxy Resources Limited (ASX: GXY)
• TNG Ltd (ASX: TNG)
• Nemaska Lithium Inc. (TSX: NMX)
•
Iluka Resources Limited (ASX: ILU)
• Argex Titanium Inc. (TSX: RGX)
• Pilbara Minerals Limited (ASX: PLS)
• Global X Lithium ETF (NYSE Arca: LIT)
• S&P ASX Small Resources Index (ASXR: ASX)
• S&P ASX 300 (XKO: ASX)
• Orocobre Limited (ORE.ASX)
• Umicore Belgium (BSE: UMI)
The comparator group adopted by the company for LTI granted in 2018 (vest 2021) is as follows:
• Galaxy Resources Limited (ASX: GXY)
• TNG Ltd (ASX: TNG)
• Nemaska Lithium Inc. (TSX: NMX)
•
Iluka Resources Limited (ASX: ILU)
• Argex Titanium Inc. (TSX: RGX)
• Pilbara Minerals Limited (ASX: PLS)
• AVZ Minerals Limited (ASX:AVZ)
• Global X Lithium ETF (NYSE Arca: LIT)
• S&P ASX Small Resources Index (ASXR: ASX)
• S&P ASX 300 (XKO: ASX)
• Orocobre Limited (ORE.ASX)
• Umicore Belgium (BSE:UMI)
The Company has selected the above group of companies as the comparator group for the following reasons:
1. It represents a reasonable cross section of resource companies with reasonably comparable market
capitalisation, resource base and stage of development to that of the Company
2. The group is primarily focused on developing industrial minerals projects.
The Company’s performance rights plan was approved by shareholders at the 2017 AGM.
Neometals Annual Report 2019
For personal use only
39
REMUNERATION REPORT 2019 (CONTINUED)
Performance rights issued as part of KMP remuneration
Performance Rights granted to key management personnel
The following tables summarises information relevant to the current financial year in relation to the grant of
performance rights to KMP as part of their remuneration. Performance rights are issued by Neometals Ltd.
During the Financial Year
Grant date
No.
granted
No.
vested
Fair value at
grant date(3)
Earliest
exercise date
Consideration
payable on
exercise
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
835,339
307,156
383,330
368,587
39,348
39,348
163,948
2,137,056
-
-
-
-
-
-
-
-
209,252
76,943
96,024
92,331
12,000
12,000
50,000
548,550
30/06/2021
30/06/2021
30/06/2021
30/06/2021
30/06/2019
30/06/2019
30/06/2019
-
-
-
-
-
-
-
-
Name
KMP:
C. Reed(1)
J. Carone(1)
M. Tamlin(1)
D. Townsend(1)
N. Streltsova(2)
D. Ritchie(2)
S. Cole(2)
Total
(1) The number of performance rights that will actually vest, if any, is determined by the Company’s performance based on Neometals relative and
absolute TSR compared to the comparative group of companies over a 3 year period and Business Plan strategic objectives.
(2) These Non-executive Directors elected to sacrifice Directors Fees for performance rights pursuant to the company’s PRP.
(3) These values have been calculated using the monte carlo valuation method.
Details of performance rights held by KMP and of shares issued during the financial year as a result of the vesting of
performance rights:
Balance at
01/07/18
No.
Grant
date
Granted
No.
Vested
during
the
financial
year
No.
Forfeited/
lapsed
during the
financial
year
No.
Fair value
of rights at
grant date
$
1,573,735
586,075
703,290
444,015
-
-
-
3,307,115
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
835,339
307,156
383,330
368,587
39,348
39,348
163,948
2,137,056
209,252
76,943
96,024
92,331
12,000
12,000
50,000
548,550
-
-
-
-
39,348
39,348
163,948
242,644
621,261
216,063
259,275
-
-
-
-
1,096,599
Ordinary
shares
issued on
exercise of
rights
No.
-
-
-
-
-
-
-
-
Balance at
30/06/2019
No.
1,787,813
677,168
827,345
812,602
39,348
39,348
163,948
4,347,572
2019
KMP:
C. Reed(1)
J. Carone(1)
M. Tamlin(1)
D. Townsend(1)
N. Streltsova(2)
D. Ritchie(2)
S. Cole(2)
Total
(1) The number of performance rights that will actually vest, if any, is determined by the Company’s performance based on Neometals relative
and absolute TSR compared to the comparative group of companies over a 3 year period and Business Plan strategic objectives.
(2) Under the Performance Rights Plan, Non-Executive Directors were invited to sacrifice part of their fees for their services in exchange for
performance rights.
Neometals Annual Report 2019
For personal use only
40
REMUNERATION REPORT 2019 (CONTINUED)
2018
KMP:
J. Carone(1)
C. Reed(1)
M. Tamlin(1)
D. Townsend(1)
N. Streltsova(2)
D. Ritchie(2)
S. Cole(2)
Total
Balance at
01/07/17
No.
Grant
date
Granted
No.
314,995
887,163
455,160
-
-
-
-
1,657,318
03/10/2017
03/10/2017
11/12/2017
11/12/2017
05/01/2017
05/01/2017
05/01/2017
370,012
952,474
444,015
444,015
27,048
27,048
112,700
2,377,312
Vested
during
the
financial
year
No.
Forfeited/
lapsed
during the
financial
year
No.
-
-
-
-
27,048
27,048
112,700
166,796
98,932
265,902
195,885
-
-
-
-
560,719
Fair value
of rights at
grant date
$
149,419
482,512
179,304
149,633
12,000
12,000
50,000
1,034,868
Balance at
30/06/2018
No.
586,075
1,573,735
703,290
444,015
-
-
-
3,307,115
Ordinary
shares
issued on
exercise of
rights
No.
494,540
1,329,190
979,189
-
-
-
-
2,802,919
(1) The number of performance rights that will actually vest, if any, is determined by the Company’s performance based on Neometals relative and
absolute TSR compared to the comparative group of companies over a 3 year period and Business Plan strategic objectives.
(2) Under the Performance Rights Plan, Non-Executive Directors were invited to sacrifice part of their fees for their services in exchange for
performance rights.
The performance rights granted entitle the grantee to one fully paid ordinary share in Neometals Ltd for nil
cash consideration on satisfaction of the vesting criteria.
Use of remuneration consultants
During the year no remuneration consultants were used in relation to the company’s Performance Rights
Plan.
This is the end of the audited remuneration report.
Auditor’s Independence Declaration
The auditor’s independence declaration is included on page 46 of the Annual Financial Report.
Signed in accordance with a resolution of directors
Mr. Chris Reed
Managing Director
West Perth, WA
13 September 2019
Neometals Annual Report 2019
For personal use only 41
AUDIT REPORT 2019
Independent Auditor’s Report to the Members of
Neometals Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Neometals Ltd (the “Company”) and its subsidiaries
(the “Group”) which comprises the consolidated statement of financial position as at 30 June
2019, 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)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of
its financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Financial Report section of our report. We are independent of the Group in accordance with
the 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 (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of the Company, would be in the same terms if given to the
directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
Neometals Annual Report 2019
For personal use only
42
AUDIT REPORT 2019 (CONTINUED)
Key Audit Matter
How the scope of our audit responded to
the Key Audit Matter
Accounting for non-current assets
held for sale
Neometals investment in Reed Industrial
Minerals Pty Ltd (“RIM”) was equity
accounted in accordance with AASB128
for the period to 30 November 2018, the
date at which the Board endorsed the
decision to complete the sale of RIM to
co-shareholders (Mineral Resources &
Ganfeng). Accordingly, the classification
of the investment was required to be
reassessed under AASB 5 Non-current
Assets Held for Sale and Discontinued
Operations. The sale completed on 18
March 2019.
Accounting for sales of non-current
assets and liabilities and presentation of
discontinued operations contain several
judgments that affects timing,
presentation of the consolidated
statement of profit or loss and other
comprehensive income.
Exploration and Evaluation Assets
and
Expenditure
As at 30 June 2019 the carrying value of
exploration and evaluation assets was
$36,983,106 as disclosed in Note 13.
The Group’s accounting policy in respect
of exploration and evaluation
expenditure is outlined in Note 2.
Significant judgement is required:
•
in determining whether facts and
circumstances indicate that the
exploration and evaluation assets
should be tested for impairment in
accordance with the relevant
accounting standards
in determining the treatment of
exploration and evaluation
expenditure:
o whether the particular areas of
interest meet the recognition
conditions for an asset; and
o which elements of exploration
and evaluation expenditures
•
Neometals Annual Report 2019
Our procedures included, but were not limited
to:
• Reading the sale agreement and assessing
whether the classification was in accordance
with accounting standards;
• Reviewing management’s assessment of
any impairment triggers at the date of
classification to Held for sale (“HFS”);
• Reconciling the carrying cost and
recognised share of profit of the RIM joint
venture until the date of recognition as
HFS; and
• Recalculating the profit on disposal of the
HFS asset.
We also assessed the appropriateness of the
disclosures in Note 6 to the financial
statements.
Our procedures included, but were not limited
to:
• assessing whether there were indicators of
impairment:
o assessing whether the rights to
tenure of the areas of interest
remained current at balance date as
well as confirming that rights to
tenure are expected to be renewed
for tenements that will expire in the
near future;
o holding discussions with management
as to the status of ongoing
exploration programmes for the areas
of interest, as well as assessing if
there was evidence that a decision
had been made to discontinue
activities in any specific areas of
interest; and
o assessing evidence of the Group’s
future intention for the areas of
For personal use only
43
AUDIT REPORT 2019 (CONTINUED)
qualify for capitalisation for each
area of interest.
interest, including reviewing future
budgeted expenditure.
•
testing, on a sample basis, exploration and
evaluation expenditure incurred during the
year for compliance with the relevant
accounting standards.
We also assessed the appropriateness of the
disclosures in Notes 2 and 13 to the financial
statements.
Other Information
The directors are responsible for the other information. The other information comprises the
Directors’ Report and Review of Operations which we obtained prior to the date of this auditor’s
report, and also includes the following information which will be included in the Group’s annual
report (but does not include the financial report and our auditor’s report thereon): letter from
the Chairman, and additional stock exchange information, which is expected to be made
available to us after that date.
Our opinion on the financial report does not cover the other information and we do not and will
not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is
materially inconsistent with the financial report or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If, based on the work we have performed on the
other information that we obtained prior to the date of this auditor’s report, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
When we read the letter from the Chairman, and additional stock exchange information, if we
conclude that there is a material misstatement therein, we are required to communicate the
matter to the directors and use our professional judgement to determine the appropriate action.
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.
Neometals Annual Report 2019
For personal use only
44
AUDIT REPORT 2019 (CONTINUED)
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether
due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the director’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the related disclosures in
the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
Evaluate the overall presentation, structure and content of the financial report,
including the disclosures, and whether the financial report represents the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial
report. We are responsible for the direction, supervision and performance of the Group’s
audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the directors we determine those matters that were of
most significance in the audit of the financial report of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 32 to 40 of the Director’s Report
for the year ended 30 June 2019.
Neometals Annual Report 2019
For personal use only 45
AUDIT REPORT 2019 (CONTINUED)
In our opinion, the Remuneration Report of Neometals Ltd for the year ended 30 June 2019
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.
DELOITTE TOUCHE TOHMATSU
Ian Skelton
Partner
Chartered Accountants
Perth, 13 September 2019
Neometals Annual Report 2019
For personal use only
46
AUDITOR’S INDEPENDENCE DECLARATION
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
The Board of Directors
Neometals Ltd
Level 3, 1292 Hay Street
West Perth WA 6005
13 September 2019
Dear Board Members
Neometals Ltd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Neometals Ltd.
As lead audit partner for the audit of the financial statements of Neometals Ltd for the year
ended 30 June 2019, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Ian Skelton
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
Neometals Annual Report 2019
For personal use only
47
DIRECTORS’ DECLARATION
Directors’ declaration
The directors declare that:
(a) in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable;
(b) the attached financial statements are in compliance with International Financial Reporting Standards as
stated in Note 2 to the financial statements;
(c) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of
the financial position and performance of the consolidated entity; and
(d) the directors have been given the declarations required by s.295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations
Act 2001.
On behalf of the directors of Neometals Ltd,
Mr. Chris Reed
Managing Director
West Perth, WA
13 September 2019
Neometals Annual Report 2019
For personal use only 48
CONSOLIDATED STATEMENT
OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
Continuing operations
Other income
Employee expenses
Occupancy expenses
Administration expenses
Finance costs
Other expenses
Marketing expenses
Foreign exchange (loss)/gain
Impairment
Impairment reversal
Share of loss of associate
(Loss)/profit before income tax
Income tax (expense)/benefit
(Loss)/profit for the year from continuing operations
Discontinued operations
Profit for the year from discontinuing operations
Profit for the year from continuing and discontinuing operations
Other comprehensive income
Total comprehensive income for the year
Earnings per share
From continuing and discontinued operations:
Basic (cents per share)
Diluted (cents per share)
2019
$
2018
$
(Restated*)
Note
5
5
5
5
23
7
6
19
19
1,652,500
(5,524,273)
(879,782)
(4,654,003)
(60,649)
(3,675,525)
(405,217)
(334)
(5,226,805)
-
(468,645)
(19,242,733)
(3,263,494)
(22,506,227)
1,417,210
(3,815,040)
(663,214)
(3,284,845)
(62,599)
(2,340,733)
-
53,231
(1,677,554)
14,694,964
(311,435)
4,009,985
568,605
4,578,590
98,684,783
76,178,556
-
76,178,556
11,100,951
15,679,541
-
15,679,541
14.00
14.01
2.90
2.88
The consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
*Refer to note 6 for details of restatement.
Neometals Annual Report 2019
For personal use only 49
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AS AT 30 JUNE 2019
Current assets
Cash and cash equivalents
Related party loan
Trade and other receivables
Other financial assets
Total current assets
Non-current assets
Exploration and evaluation expenditure
Intangibles
Investments in joint venture
Investment in associate
Other financial assets
Other assets
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
28 (a)
11
12
13
22
23
12
14
15
16
16
7
17
18
2019
$
109,462,006
-
627,599
782,927
110,872,532
36,983,106
662,888
1
7,062,095
4,787,118
345,016
1,774,520
51,614,744
162,487,276
2018
$
(Restated*)
26,342,414
4,104,458
448,960
252,181
31,148,013
31,506,853
461,328
1
24,082,742
4,536,000
609,638
955,689
62,152,251
93,300,264
2,089,652
1,154,882
3,244,534
1,225,740
1,177,288
2,403,028
1,378,062
3,786,582
5,164,644
8,409,178
154,078,098
2,807,526
-
2,807,526
5,210,554
88,089,710
154,264,634
7,620,733
(7,807,269)
154,078,098
154,101,518
7,094,532
(73,106,340)
88,089,710
This consolidated statement of financial position should be read in conjunction with the accompanying notes.
*Refer to note 6 for details of restatement.
Neometals Annual Report 2019
For personal use only 50
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
AS AT 30 JUNE 2019
Issued
Capital
$
155,367,391
-
Investment
revaluation
reserve
$
1,019,637
-
Other
equity
reserve
$
300,349
-
Share based
payments
reserve
$
5,531,947
-
Accumulated
losses
$
(83,350,556)
15,679,541
Total
$
78,868,768
15,679,541
-
-
258,725
(1,524,598)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
154,101,518
-
-
1,019,637
-
-
300,349
-
-
-
165,000
-
(1,884)
-
-
-
-
-
-
-
-
-
15,679,541
15,679,541
501,324
(258,725)
-
-
-
5,774,546
-
-
691,201
(165,000)
-
-
-
501,324
-
(1,524,598)
(5,435,325)
-
(5,435,325)
-
(73,106,340)
76,178,556
76,178,556
-
-
88,089,710
76,178,556
76,178,556
691,201
-
-
-
(10,879,485)
-
(10,879,485)
(1,884)
154,264,634
1,019,637
300,349
6,300,747
(7,807,269)
154,078,098
Balance at 01/07/17
Profit for the period -
As restated*
Total comprehensive
income for the period
- As restated*
Recognition of share-
based payments (see
note 18)
Recognition of
shares issued under
performance rights
plan
Recognition of share
buy back
Issue of dividends
Share issue costs,
net of tax
Balance at 30/06/18
Profit for the period
Total comprehensive
income for the period
Recognition of share-
based payments (see
note 18)
Recognition of
shares issued under
performance rights
plan
Issue of dividends
Share issue costs,
net of tax
Balance at 30/06/19
This consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
*Refer to note 6 for details of restatement.
NeoMetals Annual Report 2019
For personal use only 51
CONSOLIDATED STATEMENT
OF CASH FLOWS
AS AT 30 JUNE 2019
Cash flows from operating activities
Tax refunds
Payments to suppliers and employees
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant & equipment
Payments for intellectual property
Payments for exploration and evaluation costs
Payments for asset acquisition
Interest received
Net investment in equity instruments
Loans repaid from associate
Dividends received from RIM - Mt Marion Project
Sale of Mt Marion Project
Loans paid to joint venture parties
Net cash generated by / (used in) investing activities
Cash flows from financing activities
Share issue costs
Share buy-back
Repayment of borrowings
Amounts received from related parties
Amounts deposited for security deposits
Dividends paid
Interest and other finance costs paid
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rates on cash balances
Cash and cash equivalents at the end of the financial year
2019
$
2018
$
549,117
(15,152,981)
(14,603,864)
763,008
(9,411,576)
(8,648,568)
(896,520)
(217,896)
(4,959,848)
-
1,049,099
(154,348)
4,104,458
6,210,000
103,800,000
-
108,934,945
(1,884)
-
-
-
(200,000)
(10,879,485)
(60,649)
(11,142,018)
83,189,063
26,342,414
(69,471)
109,462,006
(796,864)
(207,055)
(1,947,634)
(2,500,000)
984,720
224,553
4,104,458
-
-
(11,615)
(149,437)
-
(1,541,335)
(25,379)
22,717
-
(5,435,325)
(60,000)
(7,039,322)
(15,837,327)
42,129,157
50,584
26,342,414
Note
28 (c)
13
6
28 (a)
This consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Neometals Annual Report 2019
For personal use only 52
INDEX TO NOTES TO
THE FINANCIAL STATEMENTS
Note
Contents
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
General information
Significant accounting policies
Critical accounting judgments and key sources of
estimation uncertainty
Parent entity disclosure
Profit / loss for the year continuing operations
Discontinued operations
Income taxes
Key management personnel compensation
Share based payments
Dividends on equity instruments
Trade and other receivables
Other financial assets
Exploration and evaluation expenditure
Property, plant and equipment
Trade and other payables
Provisions
Issued capital
Reserves
Earnings per share
Commitments for expenditure
Leases
Joint arrangements
Investment in associates
Subsidiaries
Segment information
Related party disclosures
Auditors remuneration
Notes to the statement of cash flows
Financial instruments
Events after the reporting period
Neometals Annual Report 2019
For personal use only NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
53
Neometals Ltd is a limited public company incorporated in Australia and listed on the Australian
Securities Exchange. The principal activities of the Consolidated Entity are mineral exploration.
Neometals Ltd is the ultimate parent.
Registered office and principal place of business
Level 3, 1292 Hay St, West Perth WA 6005
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the
Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements
of the law. The financial statements comprise the consolidated financial statements of the Consolidated
Entity, comprising Neometals Ltd and its controlled entities. For the purpose of preparing the financial
statements the consolidated entity is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting
Standards ensures that the financial statements and notes of the Company and the Group comply with
International Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by the directors of Neometals Ltd on
11 September 2019.
Basis of preparation
The accounting policies adopted are consistent with those adopted and disclosed in the Consolidated
Entity’s 2018 Annual Financial Report for the financial year ended 30 June 2018, except for the impact
of the Standards and Interpretations described below. These accounting policies are consistent with
Australian Accounting Standards and with IRFS.
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Boards (‘AASB’) that are relevant to its operations and effective for the current
reporting period beginning 1 July 2018.
The financial report has been prepared on the basis of historical cost except for the revaluation of certain
non-financial assets and financial instruments. Cost is based on the fair values of the consideration given
in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.
Standards and interpretations adopted in the current year
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board that are relevant to their operations and are effective for the current
financial reporting period beginning 1 July 2018.
The following new and revised Standards and Interpretations have been adopted in the current period:
AASB 9 ‘Financial Instruments’, and the relevant amending standards
AASB 15 ‘Revenue from Contracts with Customers’, AASB 2014-5 ‘Amendments to Australian Accounting
Standards arising from AASB 15’, AASB 2015-8 ‘Amendments to Australian Accounting Standards –
Effective date of AASB 15’
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of
Share-based Payment Transactions
The impact of the adoption of these Standards and Interpretations did not have a material impact on
the Group.
Neometals Annual Report 2019
For personal use only
54
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
Standards and interpretations issued but not yet effective
At the date of authorisation of the financial statements, the following Australian Accounting Standards
and Interpretations have been issued or amended but are not yet effective and have not been adopted by
the Group for the year ended 30 June 2019:
Standard
AASB 16 ‘Leases’
AASB 2014-10 ‘Amendments to Australian Accounting Standards –
Sale or Contribution of Assets between an Investor and its Associate or
Joint Venture and AASB 2015-10 Amendments to Australian Accounting
Standards – Effective Date of Amendments to AASB 10 and AASB 128’
Effective for annual
reporting periods
beginning on
or after
Expected to be
initially applied in
the financial year
ending
1 January 2019
1 January 2022
30 June 2020
30 June 2023
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the Company for the annual reporting period ended
30 June 2019. The Company’s assessment of the impact of these new or amended Accounting Standards
and Interpretations, most relevant to the Company, are set out below.
(i) AASB 16 Leases
The AASB has issued this new standard which eliminates the operating and finance lease classifications
for lessees currently accounted for under AASB 117 Leases. It instead requires an entity to bring most
leases onto its Statement of Financial Position in a similar way to how existing finance leases are treated
under AASB 117. An entity will be required to recognise a lease liability and a right of use asset in its
balance sheet for most leases. There are some optional exemptions for leases with a period of 12 months
or less and for low value leases. Lessor accounting remains largely unchanged from AASB 117. The Group
is currently completing its assessment of the effects of applying the new standard on the Group’s financial
statements, including the extent to which these commitments will result in the recognition of lease
assets and liabilities for future lease payments and how this will affect the Group’s net assets, profit and
classification of cash flows. The Group estimates, by implementing the modified retrospective approach,
that on adoption of the new standard the Group’s assets and liabilities will increase by $1,403,426.
The financial impact of the new standard in the 2020 financial year will be dependent on the
following factors:
(i) the number and value of the Group’s leases arrangements at the implementation date;
(ii) management judgements made regarding the likelihood of renewal of each lease (where renewal
options are available) at the implementation date;
(iii) management judgements in relation to the applicable discount rate for each lease at the
implementation date; and
(iv) the accounting approach adopted for each lease.
The final impact will be dependent on the lease arrangements in place at transition and the assessment
of the factors outlined above. The Group’s assets and liabilities are estimated not to increase materially
following recognition of assets and liabilities representing the present value of the operating lease
commitments.
Neometals Annual Report 2019
For personal use only
55
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
Critical accounting judgments and key sources of estimation uncertainty
In the application of the Group’s accounting policies, management is required to make judgments,
estimates and assumptions about carrying values of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future
periods. Refer to Note 3 for a discussion of critical judgments in applying the entity’s accounting policies,
and key sources of estimation uncertainty.
The following significant accounting policies have been adopted in the preparation and presentation of the
financial report:
(a) Cash and cash equivalents
Cash comprises cash on hand and term deposits with a 30 day cancellation policy. Cash equivalents are
short-term, highly liquid investments that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
(b) Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave,
long service leave, and sick leave when it is probable that settlement will be required and they are capable
of being measured reliably.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values
using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long term employee benefits are measured as the present value of the
estimated future cash outflows to be made by the Group in respect of services provided by employees up
to reporting date.
(c) Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian dollar ($), which is Neometals Ltd’s
functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are generally recognised in profit or loss. They are deferred
in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are
attributable to part of the net investment in a foreign operation.
All other foreign exchange gains and losses are presented in the statement of profit or loss on a net
basis within other income or other expenses.
Neometals Annual Report 2019
For personal use only
56
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
(d) Financial instruments issued by the company
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the
substance of the contractual arrangement.
Financial assets
Financial instruments are initially measured at fair value plus transaction costs except where the
instrument is classified ‘at fair value through profit or loss’ in which case transaction costs are expensed
immediately.
Financial instruments are subsequently measured at fair value, amortised cost using the effective
interest rate method or at cost. Fair value represents the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. Quoted prices in an active market are used to determine fair value where possible. The group does
not designate any interest in subsidiaries, associates or joint venture entities as being subject to the
requirements of accounting standards specifically applicable to financial instruments.
Amortised cost amounts are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are subsequently measured at amortised cost using the effective
interest rate method.
By default, all other debt investments and equity investments are measured subsequently at fair value
through profit or loss (FVTPL).
The Group classifies its financial assets into the following categories: those to be measured subsequently
at fair value (either through other comprehensive income ‘FVOCI’ or through the income statement
‘FVTPL’) and those to be held at amortised cost. The classification depends on the Group’s business
model for managing its financial assets and the contractual terms of the cash flows. As part of the
implementation of AASB 9, management have considered the categorisation of financial assets and no
reclassification between categories were deemed necessary.
Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other
financial liabilities.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as at fair value through profit or loss where the financial liability is either
held for trading or it is designated as at fair value through profit or loss.
A financial liability is held for trading if:
•
It has been incurred principally for the purpose of repurchasing in the near future; or
•
It is a part of an identified portfolio of financial instruments that the Group manages together and has
a recent actual pattern of short-term profit-taking; or
•
It is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading is designated as at fair value through
profit or loss upon initial recognition if:
Neometals Annual Report 2019
For personal use only
57
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
•
•
•
such designation eliminates or significantly reduces a measurement or recognition inconsistency that
would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both, which
is managed and its performance evaluated on a fair value basis, in accordance with the Group’s
documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and AASB 9 ‘Financial
Instruments’ permits the entire combined contract (asset or liability) to be designated as at fair value
through profit or loss.
Financial liabilities at fair value through profit or loss are stated at fair value, with any resultant gain or
loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest
paid on the financial liability.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction
costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest
method, with interest expense recognised on an effective yield basis. The effective interest method is a
method of calculating the amortised cost of a financial liability and of allocating interest expense over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments through the expected life of the financial liability, or, where appropriate, a shorter period.
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a
reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the
costs that are incurred directly in connection with the issue of those equity instruments and which would
not have been incurred had those instruments not been issued.
Interest and dividends
Interest and dividends are classified as expenses or as distributions of profit consistent with the
balance sheet classification of the related debt or equity instruments or component parts of compound
instruments.
(e) Goods and service tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax
(‘GST’), except:
i)
where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as
part of the cost of acquisition of an asset or as part of an item of expense; or
ii) for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows
arising from investing and financing activities which is recoverable from, or payable to, the taxation
authority is classified as operating cash flows.
Neometals Annual Report 2019
For personal use only
58
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
(f) Non-current assets held for sale
Non-current assets and their disposal groups are classified as held for sale if their carrying amount will
be recovered principally through a sale transaction rather than continuing use. This condition is regarded
as met only when the sale is highly probable and the non-current asset (or disposal group) is available
for immediate sale in its present condition. Management must be committed to the sale which should be
expected to qualify for recognition as a completed sale within one year from the date of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and
liabilities of that subsidiary are classified as held for sale when the criteria described above are met,
regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the
sale. Non-current assets (and disposal groups) classified as held for sale are measured at the lower of
their previous carrying amount and fair value less cost to sell.
(g) Impairment of assets
At each reporting date, the consolidated entity reviews the varying amounts of its tangible and intangible
assets to determine whether there is any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent
from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit
to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset
for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the varying amount of the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the varying amount of the asset (cash-generating unit)
is increased to the revised estimate of its recoverable amount, but only to the extent that the increased
varying amount does not exceed the varying amount that would have been determined had no impairment
loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss
is recognised in profit or loss immediately.
(h) Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect
of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have
been enacted or substantively enacted by reporting date. Current tax for current and prior periods is
recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of
temporary differences arising from differences between the varying amount of assets and liabilities in
the financial statements and the corresponding tax base of those items.
Neometals Annual Report 2019
For personal use only
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
59
Statement of compliance (continued)
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax
assets are recognised to the extent that it is probable that sufficient taxable amounts will be available
against which deductible temporary differences or unused tax losses and tax offsets can be utilised.
However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise
to them arise from the initial recognition of assets and liabilities (other than as a result of a business
combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax
liability is not recognised in relation to taxable temporary differences arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in
subsidiaries, branches, associates and joint ventures except where the consolidated entity is able to
control the reversal of the temporary differences and it is probable that the temporary differences will
not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with these investments and interests are only recognised to the extent that it is probable that
there will be sufficient taxable profits against which to utilise the benefits of the temporary differences
and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s)
when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted by reporting date. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from the manner in which the
consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets
and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation
authority and the Company/Consolidated Entity intends to settle its current tax assets and liabilities on a
net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the profit and loss statement, except
when it relates to items credited or debited directly to equity, in which case the deferred tax is also
recognised directly in equity, or where it arises from the initial accounting for a business combination,
in which case it is taken into account in the determination of goodwill or excess.
Tax consolidation
The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group
under Australian taxation law. Neometals Ltd is the head entity in the tax-consolidated group. Income
tax expense/benefit, deferred tax liabilities and deferred tax assets arising from temporary differences
of the members of the tax consolidated group are recognised in the separate financial statements of
the members of the tax consolidated group using a ‘group allocation’ approach based on the allocation
specified in the tax funding arrangement.
The tax funding arrangement requires a notional current and deferred tax calculation for each entity as
if it were a taxpayer in its own right, except that unrealised profits, distributions made and received and
capital gains and losses and similar items arising on transactions within the tax consolidated group are
treated as having no consequence. Current tax liabilities and assets and deferred tax assets arising from
unused tax losses and tax credits of the members of the tax consolidated group are recognised by the
Company (as head entity in the tax consolidated group).
Neometals Annual Report 2019
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60
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
Due to the existence of a tax funding arrangement between the entities in the tax consolidated group,
amounts are recognised as payable to or receivable by the Company and each member of the group in
relation to the tax contribution amounts paid or payable between the parent and the other members of
the tax consolidated group in accordance with the arrangement.
Where the tax contribution amount recognised by each member of the tax consolidated group for a
particular period is different to the aggregate of the current tax liability or asset and any deferred tax
asset arising from the unused tax losses and tax credits in respect of that period, the difference is
recognised as a contribution from, or distribution to, equity participants.
Research & Development Tax offset
In respect of Research and Development tax offsets, the Income tax approach (AASB 112) of
accounting has been utilised, where the tax benefit is presented within the tax line in the Statement of
Comprehensive Income.
(i) Exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to separate areas of interest are capitalised in the
year in which they are incurred and are carried at cost less accumulated impairment losses where the
following conditions are satisfied;
`
i) the rights to tenure of the area of interest are current; and
ii) at least one of the following conditions is also met:
- the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
- exploration and evaluation activities in the area of interest have not at the reporting date reached
a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest
are continuing.
Capitalised exploration costs for each area of interest (considered to be the cash generating unit) are
reviewed each reporting date to test whether an indication of impairment exists. If any such indication
exists, the recoverable amount of the capitalised exploration costs is estimated to determine the extent
of the impairment loss (if any). The recoverable amount for capitalised exploration costs has been
determined as the fair value less costs to sell by reference to an active market. Where an impairment
loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of
its recoverable amount, but only to the extent that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the asset
in previous years.
Where a decision is made to proceed with development, accumulated expenditure is tested for
impairment and transferred to capitalised development and then amortised over the life of the reserves
associated with the area of interest once mining operations have commenced.
Neometals Annual Report 2019
For personal use only
61
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
Development expenditure
Development expenditure is recognised at cost less any impairment losses. Where commercial
production in an area of interest has commenced, the associated costs are amortised over the life of
the reserves associated with the area of interest. Changes in factors such as estimates of proved and
probable reserves that effect unit-of-production calculations are dealt with on a prospective basis.
(j) Payables
Trade payables and other accounts payable are recognised when the Consolidated Entity becomes obliged
to make future payments resulting from the purchase of goods and services.
(k) Principles of consolidation
The consolidated financial statements are prepared by combining the financial statements of all the
entities that comprise the Consolidated Entity, being the Company (the parent entity) and its subsidiaries
as defined in Accounting Standard AASB 10 ‘Consolidated Financial Statements’. A list of subsidiaries
appears in Note 24 to the financial statements. Consistent accounting policies are employed in the
preparation and presentation of the consolidated financial statements.
On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their
fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill. If, after reassessment, the fair value of the
identifiable net assets acquired exceeds the cost of acquisition, the excess is credited to profit and loss
in the period of acquisition. The consolidated financial statements include the information and results of
each subsidiary from the date on which the Company obtains control and until such time as the Company
ceases to control such entity. In preparing the consolidated financial statements, all inter-company
balances and transactions, and unrealised profits arising within the consolidated entity are eliminated
in full.
(l) Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or
part of the purchase consideration is deferred, costs are determined by discounting the amounts payable
in the future to their present value as at the date of acquisition.
Depreciation is calculated on a diminishing value basis so as to write off the net cost or other re-valued
amount of each asset over its expected useful life to its estimated residual value. The estimated useful
lives, residual values and depreciation method are reviewed at the end of each annual reporting period
with the effect of any changes recognised on a prospective basis.
The following estimated useful lives are used in the calculation of depreciation:
Furniture & Fittings
Plant and Equipment
Buildings
5-20 years
2-10 years
10-20 years
An item of property, plant and equipment is derecognised upon disposal when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal
or retirement of an item of property, plant and equipment is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in profit and loss.
Neometals Annual Report 2019
For personal use only
62
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
(m) Intangibles
Trademarks, licences and customer contracts
Separately acquired trademarks and licences are shown at historical cost. Trademarks, licenses and
customer contracts acquired in a business combination are recognised at fair value at the acquisition
date. They have a finite useful life and are subsequently carried at cost less accumulated amortisation
and impairment losses.
Research and development
Research expenditure is recognised as an expense as incurred. Development expenditure is recognised
as an asset as incurred. Research and development costs previously recognised as an expense are not
recognised as an asset in a subsequent period.
(n) Provisions
Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of
economic benefits is probable, and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at reporting date, taking into account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash flows. When some or all of the economic benefits
required to settle a provision are expected to be recovered from a third party, the receivable is recognised
as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be
measured reliably.
Provision for onerous contract
Present obligations arising under onerous contracts are recognised and measured as provisions.
An onerous contract is considered to exist where the Group has a contract under which the unavoidable
costs of meeting the obligations under the contract exceed the economic benefits expected to be received
from the contract.
(o) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable.
Dividend and interest revenue
Dividend revenue from investments is recognised when the shareholder’s right to receive the payment
has been established. Interest revenue is recognised on a time proportionate basis that takes into account
the effective yield on the financial asset.
(p) Interests in joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is
the contractually agreed sharing of control of an arrangement, which exists only when decisions about
the relevant activities require unanimous consent of the parties sharing control.
When a group entity undertakes its activities under joint operations, the Group as a joint operator
recognises in relation to its interest in a joint operation:
•
•
its assets, including its share of any assets held jointly;
its liabilities, including its share of any liabilities incurred jointly;
Neometals Annual Report 2019
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63
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
•
its revenue from the sale of its share of the output arising from the joint operation;
•
its share of the revenue from the sale of the output by the joint operation; and
•
its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint
operation in accordance with the AASBs applicable to the particular assets, liabilities, revenues and
expenses.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as
a sale or contribution of assets), the Group is considered to be conducting the transaction with the other
parties to the joint operation, and gains and losses resulting from the transactions are recognised in
the Group’s consolidated financial statements only to the extent of other parties’ interests in the joint
operation.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a
purchase of assets), the Group does not recognise its share of the gains and losses until it resells those
assets to a third party.
(q) Share-based payments
Equity-settled share-based payments to employees and others providing services to the Group are
measured at fair value at the date of grant.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Consolidated Entity’s estimate of shares that will
eventually vest, with a corresponding increase in equity.
Equity-settled share-based payments transactions with parties other than employees are measured at
the fair value of the goods or services received, except where the fair value cannot be estimated reliably,
in which case they are measured at the fair value of the equity instruments granted, measured at the date
the entity obtains the goods or the counter party renders the service.
The fair value of performance rights are measured using a Monte Carlo Simulation.
(r) Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks
and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as
operating leases.
Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal
to the present value of the minimum lease payments, each determined at the inception of the lease.
The corresponding liability to the Lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged
directly to profit and loss, unless they are directly attributable to qualifying assets, in which case they are
capitalised in accordance with the Group’s general policy on borrowing costs.
Contingent rentals are recognised as expenses in the periods in which they are incurred. Finance leased
assets are amortised on a straight-line basis over the estimated useful life of the asset.
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64
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
(s) Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the power
to participate in the financial and operating policy decisions of the investee but is not control or joint
control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing
of control of an arrangement, which exists only when decisions about the relevant activities require
unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these
consolidated financial statements using the equity method of accounting, except when the investment,
or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with
AASB 5. Under the equity method, an investment in an associate or a joint venture is initially recognised
in the consolidated statement of financial position at cost and adjusted thereafter to recognise the
Group’s share of the profit or loss and other comprehensive income of the associate or joint venture.
When the Group’s share of losses of an associate or a joint venture exceeds the Group’s interest in that
associate or joint venture (which includes any long-term interests that, in substance, form part of the
Group’s net investment in the associate or joint venture), the Group discontinues recognising its share of
further losses. Additional losses are recognised only to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date
on which the investee becomes an associate or a joint venture. On acquisition of the investment in an
associate or a joint venture, any excess of the cost of the investment over the Group’s share of the net fair
value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included
within the carrying amount of the investment. Any excess of the Group’s share of the net fair value of
the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised
immediately in profit or loss in the period in which the investment is acquired.
The requirements of AASB 9 are applied to determine whether it is necessary to recognise
any impairment loss with respect to the Group’s investment in an associate or a joint venture.
When necessary, the entire carrying amount of the investment (including goodwill) is tested for
impairment in accordance with AASB 136 Impairment of Assets as a single asset by comparing its
recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount.
Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of
that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable
amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases to be
an associate or a joint venture, or when the investment is classified as held for sale. When the Group
retains an interest in the former associate or joint venture and the retained interest is a financial asset,
the Group measures the retained interest at fair value at that date and the fair value is regarded as its
fair value on initial recognition in accordance with AASB 9. The difference between the carrying amount
of the associate or joint venture at the date the equity method was discontinued, and the fair value of any
retained interest and any proceeds from disposing of a part interest in the associate or joint venture is
included in the determination of the gain or loss on disposal of the associate or joint venture. In addition,
Neometals Annual Report 2019
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65
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
the Group accounts for all amounts previously recognised in other comprehensive income in relation to
that associate or joint venture on the same basis as would be required if that associate or joint venture
had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised
in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on
the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit
or loss (as a reclassification adjustment) when the equity method is discontinued.
The Group continues to use the equity method when an investment in an associate becomes an
investment in a joint venture or an investment in a joint venture becomes an investment in an associate.
There is no re-measurement to fair value upon such changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint venture but the Group
continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or
loss that had previously been recognised in other comprehensive income relating to that reduction in
ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related
assets or liabilities.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses
resulting from the transactions with the associate or joint venture are recognised in the Group’s
consolidated financial statements only to the extent of interests in the associate or joint venture that
are not related to the Group.
In the application of the Group’s accounting policies, which are described in Note 2, management is
required to make judgments, estimates and assumptions about carrying values of assets and liabilities
that are not readily apparent from other sources. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to be reasonable under the
circumstance, the results of which form the basis of making the judgments. Actual results may differ
from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future periods if the revision affects
both current and future periods.
3.1 Critical judgments in applying the entity’s accounting policies
The following are the critical judgments that management has made in the process of applying the
Group’s accounting policies and that have the most significant effect on the amounts recognised in the
financial statements.
(a) Recovery of capitalised exploration evaluation and development expenditure
The Group capitalises exploration, evaluation and development expenditure incurred on ongoing projects.
The recoverability of this capitalised exploration expenditure is entirely dependent upon returns from
the successful development of mining operations or from surpluses from the sale of the projects or the
subsidiary companies that control the projects. At the point that it is determined that any capitalised
exploration expenditure is definitely not recoverable, it is written off.
Neometals Annual Report 2019
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66
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
(b) Share-based payments
Equity-settled share-based payments granted are measured at fair value at the date of grant. The fair
value of share options is measured by use of the Monte Carlo model and requires substantial judgement.
Management has made its best estimate for the effects of non-transferability, exercise restrictions
(including the probability of meeting market conditions attached to the option), and behavioural
considerations.
The fair value of performance rights issued during the period was made with reference to the parent
entity’s closing share price on the date of grant. Management has been required to estimate the
probability that the employee will meet the performance criteria determined by the board and that the
employee employed by the Group.
(c) Joint arrangements
When determining the accounting treatment to apply to joint ventures and joint operations management
considers the factors which govern the relationship between itself and the other party or parties involved
in the joint commitment. Based on information such as legal agreements and the structure of the vehicle
under which the joint arrangement is executed management determine whether it is a joint venture or
a joint operation. With respect to terms of agreements between two or more parties there is a risk that
the parties may interpret the terms of the agreement differently. Management continually review the
facts and circumstances under which these judgements are made and reassess whether the type of joint
arrangement in which it is involved has changed.
3.2 Key areas of estimation uncertainty
The following are key assumptions concerning the future, or other key sources of estimation uncertainty
at the reporting date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
(a) Capitalised development and evaluation assets
Certain assumptions are required to be made in order to assess the recoverability of long-lived assets.
Key assumptions include future commodity prices, future cash flows, estimated discount rate and
estimates of Ore Reserves. Estimates of Ore Reserves are dependent on various assumptions. Changes
in these estimates could materially impact on actual ore recovered, and could therefore affect estimates
of future cash flows used in the assessment of recoverable amounts. The carrying amount of exploration
evaluation and development assets which is included in the consolidated statement of financial position
at 30 June 2019 is $37.0 million (2018: $31.5 million).
The Group estimates its Mineral Resources and Reserves based on information assessed by Competent
Persons (as defined in the JORC code). In estimating the remaining life of the mine for the purpose of
amortisation and depreciation calculations, due regard is given, not only to the amount of remaining Ore
Reserves, but also to limitations which could arise from the potential for changes in technology, demand,
and other issues which are inherently difficult to estimate over an extended timeframe.
(b) Value of deferred tax assets
Deferred income tax assets, including those arising from un-utilised tax losses, require management to
assess the likelihood that the Group will generate sufficient taxable earnings in future periods, in order to
utilise recognised deferred income tax assets. Assumptions about the generation of future taxable profits
depend on management’s estimates of future cash flows. These estimates of future taxable income are
based on forecast cash flows from operations (which are impacted by production and sales volumes,
Neometals Annual Report 2019
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67
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Statement of compliance (continued)
commodity prices, reserves, operating costs, closure and rehabilitation costs, capital expenditure,
dividends and other capital management transactions) and judgement about the application of existing
tax laws in Australia. To the extent that future cash flows and taxable income differ significantly from
estimates, the ability of the Group to realise the net deferred income tax assets recorded at the
reporting date could be impacted.
In addition, future changes in tax laws in Australia could limit the ability of the Group to obtain tax
deductions in future periods. The carrying amount of deferred taxes included in the consolidated
statement of financial position at 30 June 2019 is a deferred tax liability of $3,786,582 (2018: Nil).
(c) Onerous Contract
The Company has an onerous contract which relates to a contract entered into by Neometals Energy
Pty Ltd, a wholly owned subsidiary of the Company, for the Company’s Barrambie Project. The contract
with DBNGP (WA) Transmission Pty Ltd for gas transmission, commenced on 1 July 2010. The provision
in the accounts represents the present value of the gas transmission obligations under the contract for
gas transmission not expected to be utilised or on sold.
The estimates for the remaining term is subject to Management’s judgement and could change in
future periods.
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68
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Retained earnings
Reserves
Share based payments
Total equity
Financial Performance
Profit for the year
Other comprehensive income
Total comprehensive income
Guarantees entered into on behalf of subsidiaries(i)
2019
$
2018
$
109,893,836
22,467,652
132,361,488
47,061,206
18,547,206
65,608,412
2,101,075
3,786,582
5,887,657
126,473,831
1,303,468
-
1,303,468
64,304,944
154,264,362
(34,391,900)
154,101,518
(95,871,470)
6,601,369
126,473,831
6,074,896
64,304,944
81,273,621
-
81,273,621
4,000,000
8,395,058
-
8,395,058
4,000,000
(i)
Neometals Energy Pty Ltd, a wholly owned subsidiary of the Company, is party to a gas transmission agreement with DBNGP (WA)
Transmission Pty Ltd. The parent entity has provided security for a bank guarantee required under the contract for $4.0 million.
Refer to Note 12 for details.
Neometals Annual Report 2019
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NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(a) Income
Income from operations consisted of the following items:
Other income:
Interest revenue
Other
(b) Profit / (loss) before income tax
Profit / (loss) before income tax has been arrived at after
charging the following expenses:
Employee benefits expense:
Equity settled share-based payments
Superannuation expense
Other employee benefits
Finance costs:
Borrowing costs
Facility fees
Interest expense
Note
2019
$
2018
$
1,140,353
512,147
1,652,500
926,376
490,834
1,417,210
(691,201)
(291,080)
(4,541,992)
(5,524,273)
(501,324)
(183,793)
(3,129,923)
(3,815,040)
-
(60,000)
(649)
(60,649)
(490)
(60,000)
(2,109)
(62,599)
Impairment of related party loan
Impairment of associate
Depreciation of non-current assets
23
-
(5,226,805)
(117,364)
(1,677,554)
-
(42,530)
Neometals Annual Report 2019
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NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
At 30 June 2018, Neometals investment in RIM was equity accounted for as an investment in associate.
On 30 November 2018, the Board endorsed the decision to complete the sale of RIM to co-shareholders
(Mineral Resources & Ganfeng), and a sales agreement was executed in December 2018 to dispose of
the remaining interest of 13.8% in Reed Industrial Minerals Pty Ltd. Accordingly, the classification of the
investment was required to be reassessed for the current period end under AASB 5 Non-current Asset
Held for Sale and Discontinued Operations.
The disposal was completed in March 2019 for a cash consideration of $103.8M, on which date the equity
interest passed to the acquirer. Details of the investment disposed of and the calculation of the profit or
loss on disposal are disclosed below.
Profit on sale of associate
Opening carrying value of investment in the associate (a)
Share of profit / (loss) of associate recognised in profit or loss
Fully franked dividends received from associate
Investment balance classified as held for sale
Proceeds from sale of associate
Profit on sale of associate
Note
23
2019
$
11,325,197
11,561,336
(6,210,000)
16,676,533
(103,800,000)
(87,123,467)
The results of the discontinued operation which have been included in the financial statements for the year were as follows:
Results of discontinued operations
Profit / (loss) from discontinued operations (a)
Cash flows from discontinued operations
Cashflows from investing activities
Effect of disposal on the financial position of the group
investment in associate
2019
$
2018
$
(Restated*)
98,684,783
11,100,951
114,114,458
4,104,458
(16,676,533)
-
(a)
During the 2019 financial year, it was identified that as part of a review of the accounting treatment for
the equity accounting profit take up in 2018, there had been an inappropriate take up of the share of
associates profit, whereby the take up was done on a pre-tax profit basis, rather than a post-tax basis.
In accordance with AASB108.42, the 2018 share of profit of associate and the opening carrying value of
the investment in associate has been restated.
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71
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
The impact of the adjustment is as follows:
Impact on assets as at 30 June 2018
Investment in Associate
Impact on profit/(loss) for the year
Share of profit of associate
Impact on basic earnings per share (cents per share)
Impact on diluted earnings per share (cents per share)
As previously
reported
$
Share of
profit
adjustment
$
As restated
adjustment
$
15,856,197
(4,531,000)
11,325,197
15,631,951
3.73
3.72
(4,531,000)
(0.83)
(0.84)
11,100,951
2.90
2.88
(a) Income tax benefit recognised in profit or loss
Tax benefit comprises:
Current tax expense
Research and development claim
Total tax benefit
The prima facie income tax expense on pre-tax accounting profit
from continuing operations reconciles to the income tax benefit in the
financial statements as follows:
Profit / (Loss) from operations
Income tax calculated at 30%
Effect of income and expenses that are not deductible in determining
taxable profit
Recognition of previously unrecognised tax losses
Tax effect on disposal of capital assets(i)
Non-assesable income - R&D credit
Non-deductible loan write-off
Refund of prior year R&D claim
Income tax expense / (benefit) recognised
*Refer to note 6 for details of restatement.
2019
$
2018
$
(Restated*)
3,786,582
(523,088)
3,263,494
-
(568,605)
(568,605)
79,442,050
23,832,315
15,679,541
4,703,862
(3,150,651)
(7,160,077)
(23,031,010)
6,292,554
(156,926)
-
(523,088)
3,263,494
-
2,123,230
(170,581)
503,266
(568,605)
(568,605)
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NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(i) Tax effect on disposal of capital assets was higher than the accounting gain on disposal.
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable income under Australian tax law. There has been no change in the corporate tax rate
during the reporting period.
(b) Deferred tax balances
The impact of the adjustment is as follows:
Deferred tax liabilities
Deferred tax assets
Net deferred tax balance
2019
$
2018
$
(12,697,822)
8,911,240
(3,786,582)
(8,130,761)
8,130,761
-
(c) Deferred tax assets not brought to account
At 30 June 2019 the amount of unrecognised tax losses was (gross) $nil (June 2018: $76,770,032).
Other losses may be available. Currently assessing the ability to carry these forward.
Tax Consolidation
Relevance of tax consolidation to the consolidated entity
The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group and
are therefore taxed as a single entity. The head entity within the tax-consolidated group is Neometals Ltd.
The members of the tax-consolidated group are identified at Note 24.
Nature of tax funding arrangements and tax sharing agreements
Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing
agreement with the head entity. Under the terms of the tax funding arrangement, Neometals Ltd and each
of the entities in the tax consolidation group has agreed to pay a tax equivalent payment to or from the head
entity, based on the current tax liability or current tax assets of the entity. Such amounts are reflected in
amounts receivable from or payable to each entity in the tax consolidated group, and are eliminated on
consolidation. The tax sharing agreement entered into between the members of the tax-consolidated group
provides for the determination of the allocation of income tax liabilities between the entities should the head
entity default on its payment obligations or if an entity should leave the tax-consolidated group. The effect of
the tax sharing agreement is that each member’s tax liability for tax payable by the tax-consolidated group is
limited to the amount payable to the head entity under the tax funding arrangement.
Neometals Annual Report 2019
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NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Details of key management personnel compensation are provided on pages 32 to 40 of the Directors’ Report.
The aggregate compensation made to key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
2019
$
2018
$
2,211,405
136,092
478,846
2,826,343
1,982,931
116,591
389,951
2,489,473
Neometals Ltd has an ownership based remuneration scheme for executives and employees.
Performance Rights Plan (‘PRP’)
In accordance with the provisions of the PRP, as approved by shareholders at the Company’s AGM on
24 November 2017, employees, Non-Executive Directors and consultants may be offered performance
rights at such times and on such terms as the board considers appropriate.
General terms of performance rights granted under the PRP:
•
•
The performance rights will not be quoted on the ASX.
Performance rights can only be granted to employees, Non-Executive Directors and consultants of
the Company.
• Performance rights are transferable to eligible nominees.
• Performance rights not exercised on or before the vesting date will lapse.
•
•
All shares allotted upon the vesting of performance rights rank equally in all respects to all previously
issued shares.
Performance rights confer no right to vote, attend meetings, participate in a distribution of profit or
a return of capital or another participating rights or entitlements on the grantee unless and until the
performance rights vest.
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74
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
The following share-based payment arrangements in relation to performance rights were in existence during
the period:
2019
Grant date
Number
Vesting date/
Expiry date
Grant date
share price
Probability
factor
Fair value at
grant date
Jason Carone
Michael Tamlin
Staff and consultants
Chris Reed
Darren Townsend
Staff and consultants
Staff and consultants
Natalia Streltsova
Doug Ritchie
Steven Cole
Chris Reed
Jason Carone
Michael Tamlin
Darren Townsend
Staff and consultants
Staff and consultants
Total
03/10/2017
03/10/2017
03/10/2017
11/12/2017
11/12/2017
11/12/2017
11/12/2017
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
25/01/2019
370,012
444,015
150,000
952,474
444,015
280,312
400,000
39,348
39,348
163,948
835,339
307,156
383,330
368,587
739,501
356,797
6,274,181
31/12/2020
31/12/2020
30/06/2019
31/12/2020
31/12/2020
31/12/2020
30/06/2019
30/06/2019
30/06/2019
30/06/2019
30/06/2021
30/06/2021
30/06/2021
30/06/2021
30/06/2021
30/06/2021
0.30
0.30
0.30
0.385
0.385
0.385
0.385
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.22
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
93,243
111,892
75,000
320,984
149,633
94,465
192,500
12,000
12,000
50,000
209,252
76,943
96,024
92,331
185,245
89,378
1,860,890
The valuation of the Non-executive Directors performance rights has been based on the amount of their
fees that have been sacrificed. The fair value of other KMP performance rights issued have been
independently valued by a third party using a Monte Carlo simulation to determine fair value. The total
expense recognised for the period arising from share-based payment transactions and accounted for as
equity-settled share-based payment transactions is $691,201 (2018: $501,324).
The following reconciles the outstanding performance rights granted at the beginning and end of the
financial year:
Balance at beginning of the financial year
Granted during the financial year as compensation
Vested during the financial year (i)
Lapsed during the financial year (ii)
Balance at the end of the financial year (iii)
2019
Performance
Rights No.
2018
Performance
Rights No.
4,654,223
3,233,353
(441,796)
(1,171,599)
6,274,181
4,460,237
3,557,624
(2,802,919)
(560,719)
4,654,223
(i) 441,796 shares in the Company were issued on vesting of performance rights (2018: 2,802,919).
(ii) 1,171,599 performance rights lapsed during the financial year (2018: 560,719).
(iii) Subject to the satisfaction of certain retention and performance conditions 542,643 performance rights vest at the end of the year
(2018: 1,538,395)
Neometals Annual Report 2019
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NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Declared and paid during the year:
Dividends paid on ordinary shares:
On 25 May 2019, the directors declared a partially franked dividend of 2 cent
per share, 1 cent franked and 1 cent unfranked to the holders of fully paid
ordinary shares, paid to shareholders on 8 June 2019. (2018: 1.0 cents)
2019
$
2018
$
10,879,485
5,435,325
The dividend franking account has a balance of $330,110 as at 30 June 2019 (2018: nil).
Current
Related party receivable(i)
Other receivables
Prepayments
Total
2019
$
2018
$
-
428,903
198,696
627,599
4,104,458
320,665
128,295
4,553,418
(i)
Related party receivable relates to the amount loaned to associate Reed Industrial Minerals Pty Ltd. The amount was repaid in full to
Neometals in July 2018.
Current
Financial assets measured at FVTPL
Total Current
Non-current
Financial assets measured at FVTPL
Barrambie Gas term deposit (i)
Rental bond term deposit
Total Non-current
Total
2019
$
2018
$
782,927
782,927
252,181
252,181
543,000
4,000,000
244,118
4,787,118
5,570,045
493,000
4,000,000
43,000
4,536,000
4,788,181
(i)
Neometals Energy Pty Ltd, a wholly owned subsidiary of the Company, is a party to a gas transmission agreement with DBNGP (WA)
Transmission Pty Ltd (DBP) in relation to the Barrambie Project. As part of the agreement the Group was required to provide security
by way of a $4.0 million bank guarantee.
Neometals Annual Report 2019
For personal use only
For personal use only NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
77
Gross carrying amount
Balance at 1 July 2017
Additions
Disposals
Transfers to property, plant and equipment
Written off
Balance at 1 July 2018
Additions
Disposals
Transfers to property, plant and equipment
Written off
Balance at 30 June 2019
Accumulated depreciation
Balance at 1 July 2017
Disposals
Depreciation expense
Balance at 1 July 2018
Disposals and write offs
Depreciation expense
Balance at 30 June 2019
Net book value
As at 30 June 2018
As at 30 June 2019
Trade payables
Accrued expenses
Other
Consolidated
Plant and
equipment at cost
$
483,269
796,864
-
-
(65,881)
1,214,252
943,403
-
-
(131,331)
2,026,324
248,552
(32,518)
42,529
258,563
(116,188)
109,429
251,804
955,689
1,774,520
2019
$
2018
$
738,530
1,306,976
44,146
2,089,652
504,948
690,207
30,585
1,225,740
The average credit period on purchases is 30 days. No interest is charged on the trade payables.
The Group has financial risk management policies in place to help ensure that all payables are paid within
the settlement terms.
Neometals Annual Report 2019
For personal use only
78
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Current
Annual leave
Long service leave
Other (a)
Non-current
Other (a)
(a) Detail of movement in other provisions
2019
Balance at 1 July 2018
Additional provisions recognised
Reductions resulting from re-measurement
Balance at 30 June 2019
Comprised of:
Other (a)
Other (a)
2019
$
2018
$
433,762
161,980
559,140
1,154,882
1,378,062
1,378,062
2,532,944
316,251
101,512
759,525
1,177,288
2,807,526
2,807,526
3,984,814
Onerous
Contracts
(i)
$
3,567,051
-
(653,832)
(976,017)
1,937,202
559,140
1,378,062
1,937,202
(i)
The onerous contract relates to a contract entered into by Neometals Energy Pty Ltd, a wholly owned subsidiary of the Company,
for the Company’s Barrambie Project. The contract with DBNGP (WA) Transmission Pty Ltd for gas transmission, commenced on
1 July 2010. The provision in the accounts represents the present value of the remaining gas transmission obligations under the
contract for gas transmission not expected to be utilised or on sold.
Neometals Annual Report 2019
For personal use only
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
2018
Balance at 1 July 2017
Additional provisions recognised
Reductions resulting from re-measurement
Reductions resulting from re-measurement or settlement without cost
Balance at 30 June 2018
Comprised of:
Current provision
Non-current provision
79
Onerous
Contracts
(i)
$
4,322,333
-
(755,282)
-
3,567,051
759,525
2,807,526
3,567,051
(i)
The onerous contract relates to a contract entered into by Neometals Energy Pty Ltd, a wholly owned subsidiary of the Company,
for the Company’s Barrambie Project. The contract with DBNGP (WA) Transmission Pty Ltd for gas transmission, commenced on
1 July 2010. The provision in the accounts represents the present value of the remaining gas transmission obligations under the
contract for gas transmission not expected to be utilised or on sold.
2019
$
2018
$
543,974,269 fully paid ordinary shares (2018: 543,532,473)
154,264,634
154,101,518
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to
share capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital
and issued shares do not have a par value.
Fully paid ordinary shares
Balance at beginning of financial year
Share issue costs
Shares cancelled through share buy back
Other share based payments
Balance at the end of the financial year
2019
2018
No.
$
No.
$
543,532,473
-
-
441,796
543,974,269
154,101,518
(1,884)
-
165,000
154,264,634
546,100,763
-
(5,371,209)
2,802,919
543,532,473
155,367,391
-
(1,524,598)
258,725
154,101,518
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Share options
At balance date there were no share options in existence over ordinary shares (2018: nil).
Neometals Annual Report 2019
For personal use only
80
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
The share-benefits reserve arises on the grant of share options and performance rights for the provision of
services by consultants and to executives and employees under the employee share option plan, performance
rights plan, employment contracts or as approved by shareholders. Amounts are transferred out of the
reserve and into issued capital when the options are exercised or when shares are issued pursuant to the
terms of the performance rights. Further information about share-based payments to employees is provided
in Note 9 to the financial statements.
2019
$
2018
$
5,774,546
691,201
(165,000)
6,300,747
5,531,947
501,324
(258,725)
5,774,546
300,349
300,349
300,349
300,349
1,019,637
-
1,019,637
7,620,733
1,019,637
-
1,019,637
7,094,532
2019
Cents per
share
2018
Cents per
share
Restated*
14.00
14.01
2.90
2.88
Share based payments reserve:
Balance at the beginning of the financial year
Increase in share based payments
Amounts transferred to share capital on exercise
Balance at the end of the financial year
Other reserve:
Balance at the beginning of the financial year
Balance at the end of the financial year
Investment revaluation reserve:
Balance at the beginning of the financial year
Investment revaluation reserve
Balance at the end of the financial year
Total Reserves
Basic earnings per share:
Continuing and discontinued operations
Diluted earnings per share:
Continuing and discontinued operations
Neometals Annual Report 2019
For personal use only
81
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Basic and diluted profit / (loss) per share
The profit / (loss) and weighted average number of ordinary shares used in the calculation of basic and diluted
profit / (loss) per share are as follows:
Profit / (loss) (a)
Continuing and discontinued operations
Weighted average number of ordinary shares for the purpose of
basic profit / (loss) per share
Weighted average number of ordinary shares for the purpose of
diluted profit / (loss) per share
2019
$
2018
$
Restated*
76,178,556
15,679,541
2019
$
2018
$
Restated*
543,974,269
541,458,075
543,911,970
543,961,504
(a) Profit / (loss) used in the calculation of profit / (loss) per share reconciles to net loss in the consolidated statement of
comprehensive income.
*Refer to note 6 for details of restatement.
(a) Exploration and evaluation expenditure commitments
The Consolidated Entity holds mineral exploration licences in order for it to undertake its exploration
and evaluation activities. To continue to hold tenure over these areas the Group is required to undertake a
minimum level of expenditure on or in relation to the leases. Minimum expenditure commitments for the
exploration and mining leases for the 2020 financial year are outlined in the table below.
Exploration expenditure commitments
Not longer than 1 year(i)
30 June
30 June
2019
$
2018
$
2,570,503
2,612,527
(1) Due to the nature of this expenditure, in that the expenditure commitments may be reduced by the relinquishment of tenements,
estimates for the commitment have not been forecast beyond June 2020. However, should the Group continue to hold the tenements
beyond this date additional expenditure commitments would arise.
Neometals Annual Report 2019
For personal use only
82
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(b) Lease commitments
Non-cancellable operating lease commitments are disclosed in Note 21 to the financial statements.
(c) Other
As referred to in Note 16 (i) to the accounts, Neometals Energy Pty Ltd, a wholly owned subsidiary of the
Company, previously entered into a gas transmission agreement with DBNGP (WA) Transmission Pty Ltd
for the Barrambie Project. As part of the agreement the Group was required to procure a ‘blocked’ term
deposit for $4.0 million (30 June 2018: $4.0 million) as security a bank guarantee, which approximates the
present value of the Group’s commitment under the agreement. The obligations under the gas transmission
agreement commenced on 1 July 2010.
Operating leases:
Leasing arrangements
Operating leases relate to the lease of commercial premises in West Perth, Welshpool and Canada and a
photocopier. The lease agreement for the Company’s Canadian branch premises was entered into on 1 May
2016 for a 60 month period expiring on 30 April 2021. The lease of a photocopier is for a period of 48 months
expiring in June 2022. The commitments are based on the fixed monthly lease payment. The commitments
are based on the fixed monthly lease payment.
Payments recognised as an expense
Minimum lease payments
Contingent rentals
Non-cancellable operating lease commitments
Not longer than 1 year
Longer than 1 year and not longer than 5 years
2019
$
322,390
75,924
398,314
2018
$
518,527
43,003
561,530
908,595
2,011,702
2,920,297
505,626
507,443
1,013,069
Neometals Annual Report 2019
For personal use only 83
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Name of operation
Principal activity
Reed Advanced Materials Pty Ltd(i)
Evaluation of lithium hydroxide process
2019
%
70
2018
%
70
The Consolidated Entity’s interest in assets employed in the above joint ventures is detailed below.
(i) Reed Advanced Materials Pty Ltd
On 6 October 2015 Neometals and Process Minerals International Pty Ltd entered into a shareholders
agreement for the purposes of establishing and operating a joint venture arrangement through RAM to
operate a business of researching, designing and developing the capabilities and technology relating to the
processing of lithium hydroxide. Following the execution of the shareholders agreement RAM was held 70:30
between Neometals and Process Minerals International.
Summarised financial information for the joint venture:
Carrying value of investment in the joint venture
Loan to joint venture
Share of (profit)/loss of joint venture not recognised in profit or loss
Current assets
Non-current assets
Current liabilities
Non-current liabilities
2019
$
2018
$
1
-
33,159
79,847
362,536
-
(1,968,678)
1
-
(87,657)
184,537
308,345
(2,868)
(1,968,678)
Neometals Annual Report 2019
For personal use only
84
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(i) Reed Industrial Minerals Pty Ltd
Name of operation
Principal activity
Reed Industrial Minerals Pty Ltd
Mt Marion Lithium Project
Summarised financial information for the associate:
Carrying value of investment in the associate
Loan to associate
Share of profit of associate recognised in profit or loss(i)
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Interest
30 June
30 June
2019
%
-
2018
%
13.8
30 June
30 June
2019
$
2018
$
Restated*
-
-
11,561,336
11,325,197
4,104,458
11,100,951
-
-
-
-
-
117,050,100
78,907,700
(55,700,500)
(46,489,000)
93,768,300
(i) The equity accounted share of the associates profit / (loss) is adjusted against the carrying value of the investment in the associate.
The asset was sold during the financial year. Refer to Note 6 for further details.
The Group has no commitments in relation to RIM as the investment has been sold during the financial year.
Refer to Note 6 for further details.
*Refer to note 6 for details of restatement.
Neometals Annual Report 2019
For personal use only
85
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(ii) Hannans Limited
Name of operation
Hannans Limited
Principal activity
Exploration of nickel and lithium
Interest
30 June
30 June
2019
%
35.5
2018
%
35.7
The above associate is accounted for using the equity method in this consolidated financial report.
Summarised information for the associate:
Carrying value of investment in associate
Share of loss of associate recognised in profit or loss(i)
30 June
30 June
2019
$
2018
$
7,062,095
(468,645)
12,757,545
(311,435)
(i) The equity accounted share of the associate’s loss as adjusted as if applying the same accounting policies as Neometals is credited
against the carrying value of the investment in the associate.
Shares held in associate are set out in the table below.
30 June 2019
30 June 2018
No.
$
No.
$
Shares held in Hannans prior to disposal of REX(i)
Consideration shares received on disposal of REX(i)
Close out of options(ii)
Net shares disposed(ii)
Impairment expense(iii)
Share of (loss)/profit in associate
Balance at the end of the period
63,750,000
620,833,333
25,250,000
(3,623,850)
-
-
706,209,483
1,147,500
11,175,000
392,000
(157,330)
(5,226,805)
(268,270)
7,062,095
63,750,000
620,833,333
25,250,000
(3,623,850)
-
N/A
706,209,483
1,147,500
11,175,000
392,000
(157,330)
-
200,375
12,757,545
(i) Shares have been valued at the market value on settlement date, 26 September 2016.
(ii) Shares valued at market rate on date of trade.
(iii) The market value of the underlying shares has decreased significantly over a prolonged period as compared to the carrying value
on a per share basis. Accordingly, the investment in associate has been impaired to bring the balance down to the market value as
at 30 June 2019 of 1.0 cent per share.
Neometals Annual Report 2019
For personal use only
86
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(ii) Hannans Limited
Name of entity
Parent entity
Ownership interest
Country of
incorporation
2019
%
2018
%
Neometals Ltd
Subsidiaries
Australian Titanium Pty Ltd (formerly Australian Vanadium
Corporation (Holdings) Pty Ltd)
Alphamet Management Pty Ltd (formerly Australian
Vanadium Corporation (Investments) Pty Ltd)
Inneovation Pty Ltd (formerly Australian Vanadium
Exploration Pty Ltd)
Neometals Energy Pty Ltd (formerly Barrambie Gas Pty Ltd)
Neomaterials Pty Ltd (formerly GMK Administration Pty Ltd)
Neometals Investments Pty Ltd (formerly Gold Mines of
Kalgoorlie Pty Ltd)
Urban Mining Pty Ltd (formerly Mount Finnerty Pty Ltd)
Adamant Technologies Pty Ltd
Mt Edwards Lithium Pty Ltd
Avanti Materials Ltd
ACN 630 589 507 Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
All of these companies are members of a tax consolidated group. Neometals Ltd is the head entity of the tax
consolidated group.
Basis for segmentation
AASB 8 Operating Segments requires the presentation of information based on the components of the entity
that management regularly reviews for its operational decision making. This review process is carried out
by the Chief Operating Decision Maker (“CODM”) for the purpose of allocating resources and assessing the
performance of each segment. The amounts reported for each operating segment is the same measure
reviewed by the CODM in allocating resources and assessing performance of that segment.
For management purposes, the Group operates under three operating segments comprised of the Group’s
lithium, titanium/vanadium and ‘other segments’ which comprises other minor exploration projects and
mineral process technology businesses. The titanium/vanadium operating segment is separately identified
given it possess different competitive and operating risks and meets the quantitative criteria as set out in the
AASB 8. Previously the Group operated under two reportable operating segments comprised of the Group’s
titanium/vanadium and ‘other segments’ which comprises the Mount Marion lithium project and other minor
exploration projects. The ‘other segments’ category is the aggregation of all remaining operating segments
given sufficient reportable operating segments have been identified.
During the year an investment in associate was classified as held for sale and the sale was completed in
March 2019. The segment information reported on the next page does not include any amounts for this
discontinued operation, which is described in more detail in note 6.
Neometals Annual Report 2019
For personal use only
87
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Reportable operating segments
Revenue from external customers
Cost of sales
Gross profit/(loss)
Other income
Depreciation and amortisation
Total revenue
Total expense
Profit/(loss) before tax
Profit for the year from
discontinued operations
Income tax expense
Consolidated profit/(loss) after tax
As at 30 June 2019
Lithium
$
-
-
-
299,886
(41,583)
299,886
(2,285,531)
(1,985,645)
-
Vanadium /
Titanium
$
-
-
-
1,270
(75,781)
1,270
(2,106,863)
(2,105,593)
-
Other
$
Unallocated
$
Total
$
-
-
-
162,450
-
162,450
(5,697,277)
(5,534,827)
-
-
-
-
-
1,188,894
-
1,188,894
(10,805,562)
(9,616,668)
98,684,783
-
-
1,652,500
(117,364)
1,652,500
(20,895,233)
(19,242,733)
98,684,783
-
(1,985,645)
-
(2,105,593)
-
(5,534,827)
(3,263,494)
85,804,621
(3,263,494)
76,178,556
Reportable operating segments
Increase/(decrease) in segment assets
Impairment
Deconsolidation
Discontinued operations
Decrease in classified as held for sale
Consolidated increase/(decrease) in
segment assets
Total segment assets
Assets classified as held for sale
Total assets
Lithium
$
(17,676,310)
Vanadium /
Titanium
$
4,540,378
-
-
-
-
-
-
Other
$
Unallocated
$
Total
$
(5,411,673)
-
-
-
103,164,273
-
84,616,668
-
19,960,655 19,960,655
-
-
(17,676,310)
4,540,378
(5,411,673)
123,124,928
104,577,323
5,605,277
34,287,512
-
-
5,605,277
4,540,378
8,388,092
-
8,388,092
114,206,395
-
114,206,395
162,487,276
-
162,487,276
Neometals Annual Report 2019
For personal use only 88
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2018
Reportable operating segments
Revenue from external customers
Cost of sales
Gross profit/(loss)
Other income
Expenditure written off
Depreciation and amortisation
Total revenue
Total expense
Profit/(loss) before tax
Consolidated profit/(loss) after tax
As at 30 June 2018
Lithium
$
Restated*
-
-
-
11,957,804
-
-
11,957,804
(1,864,557)
10,093,247
10,093,247
Vanadium /
Titanium
$
-
-
-
54
14,694,964
-
14,695,018
(1,185,875)
13,509,143
13,509,143
Other
$
-
-
-
245,225
-
-
245,225
(320,047)
(74,822)
(74,822)
Unallocated
$
-
-
-
979,444
-
(42,530)
979,444
(8,784,941)
(7,805,497)
(7,805,497)
Total
$
-
-
-
13,182,527
14,694,964
(42,530)
27,834,961
(12,155,420)
15,679,541
15,679,541
Reportable operating segments
Increase/(decrease) in segment assets
Decrease in classified as held for sale
Consolidated increase/(decrease) in
segment assets
Total segment assets
Assets classified as held for sale
Consolidated total assets
Lithium
$
Restated*
8,651,486
-
8,651,486
Vanadium /
Titanium
$
16,293,980
-
16,293,980
Other
$
(342,730)
-
(342,730)
Unallocated
$
(15,905,723)
-
(15,905,723)
Total
$
8,697,013
-
8,697,013
18,750,587
-
18,750,587
29,747,134
-
29,747,134
13,799,765
-
13,799,765
31,002,778
-
31,002,778
93,300,264
-
93,300,264
Geographical information
The Group operates in a single geographical area being Australia (country of domicile).
*Refer to note 6 for details of restatement.
Neometals Annual Report 2019
For personal use only 89
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(a) Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are disclosed in Note 24 to the
financial statements.
(b) Key management personnel remuneration
Details of Key Management Personnel remuneration are disclosed on pages 32 to 40 of the
Directors’ Report.
(c) Key management personnel equity holdings
Fully paid ordinary shares of Neometals Ltd
2019
Non-executive directors
S. Cole
D. Ritchie
N. Streltsova
D. Reed
J. Purdie
L. Guthrie
Executive directors
C. Reed (i)
Other executives
M. Tamlin (i)
J. Carone (i)
D. Townsend
Total
2018
Non-executive directors
S. Cole
D. Reed
Executive directors
C. Reed (i)
Other executives
J. Carone (i)
M.Tamlin
Total
Balance at
01/07/2018
No.
Balance on
appointment
No.
Received on
exercise of
perf rights
No.
Net other
change
No.
Balance at
30/06/2019
No.
Balance
held
nominally
No.
1,120,083
-
-
49,188,900
-
-
9,978,170
979,189
1,650,000
-
62,916,342
-
-
-
-
-
-
-
-
-
-
-
Balance at
01/07/2017
No.
Balance on
appointment
No.
112,700
27,048
27,048
-
-
-
-
-
-
-
44,248
25,000
1,232,783
27,048
27,048
49,188,900
44,248
25,000
-
250,000
10,228,170
-
(200,000)
130,272
249,520
979,189
1,450,000
130,272
63,332,658
-
-
-
-
-
-
-
-
-
-
-
Net other
change
No.
Balance at
30/06/2018
No.
Balance
held
nominally
No.
-
-
-
166,796
Received on
exercise of
perf rights
No.
1,120,083
61,288,900
10,548,980
4,400,000
-
77,357,963
-
-
-
-
-
-
-
-
-
(12,100,000)
1,120,083
49,188,900
1,329,190
(1,900,000)
9,978,170
494,540
979,189
2,802,919
(3,244,540)
-
(17,244,540)
1,650,000
979,189
62,916,342
-
-
-
-
-
-
Neometals Annual Report 2019
For personal use only
90
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Share options of Neometals Ltd
No options were issued to related parties during the current period (2018: nil).
Performance rights of Neometals Ltd
In the current reporting period the Company granted 2,137,056 (2018: 2,377,312) performance rights to
executives and KMP pursuant to the Company’s Performance Rights Plan.
Further details of the employee share option plan and of share options and performance rights granted are
contained in Note 8 to the financial statements.
Performance Rights granted to related parties
The following tables summarises information relevant to the current financial year in relation to the grant of
performance rights to KMP as part of their remuneration. Performance rights are issued by Neometals Ltd.
Name
Grant date
No.
granted
No.
vested
Fair value at
grant date
Earliest
exercise date
Consideration
payable on
exercise
During the Financial Year
KMP:
N. Streltsova(1)
D. Ritchie(1)
S. Cole(1)
C. Reed(2)
J. Carone(2)
M. Tamlin(2)
D. Townsend(2)
Total
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
39,348
39,348
163,948
835,339
307,156
383,330
368,587
2,137,056
39,348
39,348
163,948
-
-
-
-
242,644
12,000
12,000
50,000
209,252
76,943
96,024
92,331
548,550
30/06/2019
30/06/2019
30/06/2019
30/06/2021
30/06/2021
30/06/2021
30/06/2021
-
-
-
-
-
-
-
-
(1) At 30 June 2019 Non-Executive Directors became entitled to securities whose vesting conditions were the subject to the rules of the
Performance Rights Plan.
(2) The number of performance rights that will actually vest, if any, is determined by the Company’s performance based on Neometals
relative and absolute TSR compared to the comparative group of companies over a 3 year period and Business Plan strategic objectives.
Neometals Annual Report 2019
For personal use only 91
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Details of performance rights held by KMP and of shares issued during the financial year as a result of the
vesting of performance rights:
KMP:
Chris Reed(1)
Jason Carone(1)
Michael Tamlin(1)
Jason Carone(2)
Michael Tamlin(2)
Chris Reed(2)
Darren Townsend(2)
Steven Cole(3)
Doug Ritchie(3)
Natalia Streltsova(3)
Steven Cole(4)
Doug Ritchie(4)
Natalia Streltsova(4)
Chris Reed(2)
Jason Carone(2)
Michael Tamlin(2)
Darren Townsend(2)
Total
Grant date
14/09/2016
14/09/2016
14/09/2016
03/10/2017
03/10/2017
11/12/2017
11/12/2017
05/01/2018
05/01/2018
05/01/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
10/08/2018
Fair value
of rights at
grant date
$
161,528
56,176
67,412
93,243
111,892
320,984
149,633
50,000
12,000
12,000
50,000
12,000
12,000
209,252
76,943
96,024
92,331
1,583,418
No.
granted
621,261
216,063
259,275
370,012
444,015
952,474
444,015
112,700
27,048
27,048
163,948
39,348
39,348
835,339
307,156
383,330
368,587
5,610,967
Vested during
the financial
year
No.
Forfeited/
lapsed during
the financial
year
No.
Ordinary shares
issued on
exercise of rights
No.
-
-
-
-
-
-
-
-
-
-
163,948
39,348
39,348
-
-
-
-
242,644
621,261
216,063
259,275
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,096,599
-
-
-
-
-
-
-
112,700
27,048
27,048
-
-
-
-
-
-
-
166,796
(1)
(2)
(3)
The number of performance rights that will actually vest, if any, is determined by the Company’s performance based on Neometals
TSR compared to the comparative group of companies over the 2-year period as set out in the relevant employee’s employment
contract. At 30 June 2019 no employee had become entitled to securities whose vesting conditions were the subject of the TSR criteria
and as a result, 1,096,599 performance rights have lapsed.
The number of performance rights that will actually vest, if any, is determined by the Company’s performance based on Neometals
TSR compared to the comparative group of companies over the 3-year period as set out in the employee’s employment contract. As a
result of the testing of the Company’s performance over this period no rights vested and thus no shares were issued (2018: 2,802,919).
Under the Performance Rights Plan, Non-Executive Directors were invited to sacrifice part of their fees for their services in exchange
for performance rights. At 30 June 2018 all performance rights have vested. As a result of the testing of the Company’s performance
over this period 166,796 rights vested and shares were issued (2018: nil).
(4)
Under the Performance Rights Plan, Non-Executive Directors were invited to sacrifice part of their fees for their services in exchange
for performance rights. At 30 June 2019 all performance rights have vested.
The performance rights granted entitle the grantee to one fully paid ordinary share in Neometals Ltd for nil
cash consideration on satisfaction of the vesting criteria.
Neometals Annual Report 2019
For personal use only 92
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(d) Other transactions with key management personnel
The loss from operations includes the following items of income that
resulted from transactions other than compensation or equity holdings,
with Key Management Personnel or their related parties:
Interest income
Total recognised as income
(e) Transactions with other related parties
2019
$
2018
$
-
-
603
603
Other related parties include:
The parent entity;
Joint ventures in which the entity is a venturer;
Subsidiaries;
•
• Associates;
•
•
• Key Management Personnel of the Group;
•
Former Key Management Personnel; and
• Other related parties.
Transactions involving the parent entity
The directors elected for wholly-owned Australian entities within the Group to be taxed as a single entity
from 1 July 2003.
No other transactions occurred during the financial year between entities in the wholly owned Group.
(f) Controlling entities
The ultimate parent entity of the Group is Neometals Ltd, a company incorporated and domiciled in Australia.
Details of the amounts paid or payable to the auditor for the audit and other assurance services during the
year are as follows:
Auditor (Deloitte Touche Tohmatsu)
Audit fees
Other assurance services
2019
$
95,650
37,800
133,450
2018
$
91,000
-
91,000
The directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by
another person or firm on the auditor’s behalf) is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
The directors are satisfied that the non-audit services provided did not compromise the external auditor’s
independence for the following reasons:
•
•
all non-audit services are reviewed and approved by the directors prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor
independence as set out in the Institute of Chartered Accountants in Australia and CPA Australia’s
Professional Statement F1: Professional Independence.
Neometals Annual Report 2019
For personal use only
93
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(a) Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash
equivalents includes cash on hand and in banks and investments
in money market instruments, net of outstanding bank overdrafts.
Cash and cash equivalents at the end of the financial year as shown
in the Cash Flow Statement is reconciled to the related items in
the statement of financial position as follows:
Cash and cash equivalents
Cash and cash equivalents included in a disposal group
2019
$
2018
$
109,462,006
-
109,462,006
26,342,414
-
26,342,414
(b) Funds not available for use
Restrictions exist on bank deposits with a total value of $4,244,118. Deposits are classified as financial assets
(see Note 12).
Of the $4,244,118 held in restricted bank deposits $4,000,000 is held as security in relation to an unconditional
performance bond issued by the National Australia Bank in favour of the Minister for State Development and
DBNGP (WA) Transmission Pty Ltd. In addition, the Group has $244,118 on deposit as security for a rental
bond relating to its leased business premises.
Neometals Annual Report 2019
For personal use only
94
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(c) Reconciliation of profit / (loss) for the period to net cash flows from operating activities
2019
$
2018
$
Restated*
76,178,556
-
5,226,805
-
(71,441)
-
(98,216,158)
(29,505)
(1,140,353)
60,649
1,884
117,364
691,201
(334)
15,679,541
-
1,677,554
(14,694,964)
(140,168)
(10,789,516)
-
(72,599)
(926,376)
62,599
-
42,530
501,324
(53,231)
(178,640)
(29,652)
472,016
13,768
451,047
-
3,786,582
(1,451,869)
(14,603,864)
268,476
(11,278)
-
(678,244)
(8,648,568)
Profit for the period
Profit on deconsolidation of subsidiary
Impairment
Impairment reversal
Profit on disposal of financial assets
Share of equity accounted entity’s profit
Profit on the sale of associate
Gains on financial assets measured at FVTPL
Interest received on investments
Finance costs
Share issue costs
Depreciation and amortisation of non-current assets
Equity settled share-based payment
Net foreign exchange loss/(gain)
(Increase) / decrease in assets:
Current receivables
Other
Increase / (decrease) in liabilities:
Current payables
Current borrowings
Deferred tax liability
Provisions
Net Cash used in operating activities
*Refer to note 6 for details of restatement.
Neometals Annual Report 2019
For personal use only
95
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(a) Financial risk management objectives
The Consolidated Entity does not enter into or trade financial instruments, including derivative financial
instruments, for speculative purposes.
(b) Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class
of financial asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements.
(c)
Interest rate risk
The following tables detail the Group’s exposure to interest rate risk:
Maturity dates
Weighted
average
effective
interest
rate
%
Fair value
of rights
at grant
date
$
Less than
1 year
$
1-5
years
$
More than
5 years
$
2.00%
0.00%
0.00%
2.35%
2.13%
0.00%
0.00%
-
-
-
-
-
-
-
-
-
107,140,847
284,108
14,725
4,000,000
244,118
2,022,326
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Ordinary
shares
issued on
exercise of
rights
No.
Total
$
- 107,140,847
-
-
-
-
-
627,599
284,108
14,725
4,000,000
244,118
2,022,326
627,599
738,530
738,530
2019
Financial assets:
Cash and cash
equivalents AUD
Cash and cash
equivalents CAD
Cash and cash equivalents
USD
Barrambie Gas term
deposit (i)
Bond term deposits(i)
Cash deposits trust
Trade and other receivables
Financial liabilities:
Trade payables
(i)
The balances represent two term deposits that are restricted in their use and are classified in the current reporting period other
financial assets. Additional information on all other term deposits is provided at Notes 12 and 28(b). The financial assets have
contractual maturities of less than one year, however they are classified as non-current in the statement of financial position as
they are not accessible to the Group due to restrictions placed on accessing the funds.
Neometals Annual Report 2019
For personal use only 96
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
Maturity dates
Weighted
average
effective
interest
rate
%
Fair value
of rights
at grant
date
$
Less than
1 year
$
1-5
years
$
More than
5 years
$
2.46%
0.00%
2.70%
2.60%
2.65%
0.00%
-
-
-
-
-
-
-
-
24,467,829
346,609
4,000,000
43,000
527,193
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Ordinary
shares
issued on
exercise of
rights
No.
-
-
-
-
-
4,510,984
Total
$
24,467,829
346,609
4,000,000
43,000
527,193
4,510,984
882,106
882,106
2018
Financial assets:
Cash and cash
equivalents AUD
Cash and cash
equivalents USD
Barrambie Gas term
deposit (i)
Bond term deposits(i)
Cash deposits trust
Trade and other receivables
Financial liabilities:
Trade payables
(i)
The balances represent two term deposits that are restricted in their use and are classified in the current reporting period other
financial assets. Additional information on all other term deposits is provided at Notes 12 and 28(b). The financial assets have
contractual maturities of less than one year, however they are classified as non-current in the statement of financial position as
they are not accessible to the Group due to restrictions placed on accessing the funds.
(d) Credit risk management
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in
financial loss to the consolidated entity. The consolidated entity has adopted a policy of only dealing with
credit-worthy counterparties and obtaining sufficient collateral where appropriate as a means of mitigating
the risk of financial loss from defaults. The consolidated entity exposure and the credit ratings of its
counterparties are continuously monitored and the aggregate value of transactions concluded is spread
amongst approved counterparties.
The consolidated entity does not have any significant credit risk exposure to any single counterparty or any
group of counterparties having similar characteristics other than the Joint Venture. The credit risk on liquid
funds is limited because the counterparties are banks with high credit-ratings assigned by international
credit-rating agencies.
(e) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an
appropriate liquidity risk management framework for the management of the Group’s short, medium and
long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining
adequate reserves and banking facilities, and by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities.
In addition to financial liabilities in note 15, the Company is required to meet minimum spend commitments to
maintain the tenure over the Company’s mineral exploration areas as described in note 20.
Neometals Annual Report 2019
For personal use only 97
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
(f) Fair value
The carrying amount of financial assets and financial liabilities recorded in the financial statements
approximates their respective net fair values.
(g) Commodity price risk
The Group is exposed commodity price risk. These commodity prices can be volatile and are influenced
by factors beyond the Group’s control. No hedging or derivative transactions have been used to manage
commodity price risk.
(h) Capital management
The board’s policy is to endeavour to maintain a strong capital base so as to maintain investor, creditor and
market confidence and to sustain future development of the business. The Group sources any additional
funding requirements from either debt or equity markets depending on the market conditions at the time the
funds are sourced and the purpose for which the funds are to be used. The Group is not subject to externally
imposed capital requirements.
(i) Interest rate risk management
The Group is exposed to interest rate risk as the Group has funds on deposit as security for the head
office lease and the Neometals Energy Pty Ltd onerous contract outlined at Note 16. The Group’s financial
borrowings (motor vehicle hire purchase lease) are not subject to interest rate risk as the rate is fixed at time
of entering into the financing agreement.
The sensitivity analysis below has been calculated based on the exposure to interest rates at the end of the
reporting period. A 50 basis point increase and decrease has been used when reporting the interest rate
risk and represents management’s assessment of the potential change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant,
the Group’s profit for the year ended 30 June 2019 would decrease/increase by $568,530
(2018: decrease/increase $151,923). This is mainly attributable to the Group’s exposure to interest
rates on the maturity of its term deposits.
No matters or circumstances have arisen since the end of the financial year that have significantly affected,
or may significantly affect the operations, results of operations or state of affairs of the Group in subsequent
financial years.
Neometals Annual Report 2019
For personal use only 98
ADDITIONAL SHAREHOLDER
INFORMATION
AS AT 20 SEPTEMBER 2019
Top Holders Snapshot
Rank
Name
Units
% of Units
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
MR DAVID JOHN REED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
ZERO NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
FARJOY PTY LTD
TRUCKING NOMINEES PTY LTD
MR KENNETH JOSEPH HALL (HALL PARK A/C)
TRUCKING NOMINEES PTY LTD (D J REED SUPER FUND A/C)
WESTERN MINING CORPORATION PTY LIMITED (TWO BOYS A/C)
MR RICHARD ARTHUR LOCKWOOD
BOND STREET CUSTODIANS LIMITED (HP0DHH - V04614 A/C)
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
MR FRANCIS JAMES ROBINSON
FANO PTY LTD (KIM HURLEY SUPER FUND A/C)
31,801,674
27,813,548
27,372,094
16,381,477
13,707,492
9,540,999
8,900,000
8,648,914
8,000,000
6,758,862
5,600,000
5,270,000
5,154,998
5,000,000
4,883,500
BNP PARIBAS NOMINEES PTY LTD (IB AU NOMS RETAILCLIENT DRP)
4,371,295
PESYAN PTY LTD (PARS FAMILY A/C)
LINFOOT ONE SUPER PTY LTD (LINFOOT SUPER PLAN NO 1 A/C)
BNP PARIBAS NOMS PTY LTD (DRP)
LINFOOT TWO SUPER PTY LTD (LINFOOT SUPER PLAN NO 2 A/C)
4,154,325
3,873,000
3,402,032
3,188,000
5.84
5.11
5.03
3.01
2.52
1.75
1.63
1.59
1.47
1.24
1.03
0.97
0.95
0.92
0.90
0.80
0.76
0.71
0.62
0.59
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES
203,822,210
37.44
Neometals Annual Report 2019
For personal use only 99
ADDITIONAL SHAREHOLDER
INFORMATION (CONTINUED)
AS AT 20 SEPTEMBER 2019
Analysis of number of equity security holders by size of holding:
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Total
Unmarketable Parcels*
Total holders
470
2,488
1,351
2,910
616
7,835
2,632
*Minimum $ 500.00 parcel at $ 0.1900 per unit
Substantial holders in the Company are set out below:
Ordinary Shares
David Reed
Number Held
Percentage
49,188,900
9.03%
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
Registers of Securities are held at the following addresses:
Level 3,
1292 Hay Street,
West Perth,
Western Australia 6005.
Neometals Annual Report 2019
For personal use only 100
ADDITIONAL SHAREHOLDER
INFORMATION (CONTINUED)
As at 20 September 2019 the Company has an interest in the following projects and tenements in
Western Australia.
Project Name
Licence Name
Beneficial Interest
Status
Live
Live
Live
Live
Live
Live
Pending
Pending
Pending
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Pending
Pending
Live
Live
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Barrambie
Barrambie
Barrambie
Barrambie
Barrambie
Barrambie
Barrambie
Barrambie
Barrambie
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
Mt Edwards
E57/769
E57/770
E57/1041
L57/30
L20/55
M57/173
L20/80
G57/11
L20/81
M15/45
M15/46
M15/48
M15/74
M15/75
M15/87
M15/77
M15/78
M15/79
M15/80
M15/94
M15/96
M15/97
M15/99
M15/100
M15/101
M15/102
M15/103
M15/105
L15/102
M15/478
M15/633
M15/653
M15/693
M15/698
M15/699
M15/1271
L15/254
E15/989
L15/280
P15/5905
P15/5906
E15/1505
E15/1507
E77/2397
E15/1562
E15/1576
E15/1583
E77/2427
E15/1679
P15/6362
P15/6387
E15/1665
E15/1711
P15/6408
P15/6539
100%
100%
100%
100%
100%
100%
100%
100%
100%
100% (^)
100% (^)
100% (^)
100%
100%
100% (**)
100% (^)
100% (^)
100% (^)
100% (^)
100% (^)
100% (#)
100% (#)
100% (#)
100% (#)
100% (#)
100% (#)
100% (^)
100% (^)
100%
100% (^)
100% (^)
100% (#)
100% (^)
100%
100%
100% (#)
100%
100% (^)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
^Nickel rights only
**Lithium rights only
# No gold interest
Neometals Annual Report 2019
For personal use only For personal use only