Corporate Directory
DIRECTORS
Mark Wheatley
Harry Greaves (resigned 6 September 2022)
Gerry Fahey
Dev Shetty
Zed Rusike
HeNian Chen
Sam Hosack
SHARE REGISTRY
Automic Pty Ltd
Level 5
126 Phillip Street
Sydney NSW 2000
Telephone: 1300 288 664
Email: hello@automic.com.au
Investor Portal: investor.automic.com.au
SECRETARY
Ian Goldberg and Lee Tamplin
ASX CODE
Shares – PSC
PRINCIPAL & REGISTERED
OFFICE
Level 2
33 Richardson Street
West Perth WA 6005
Telephone: (+61) 405 524 960
Email: info@prospectresources.com.au
LEGAL
REPRESENTATIVES
King & Wood Mallesons
Level 30, QV1 Building
250 St Georges Terrace
Perth WA 6000
ACN 124 354 329
AUDITORS
Stantons International Audit
and Consulting Pty Ltd
Level 2
40 Kings Park Road
West Perth WA 6005
Table of Contents
Corporate Directory
Overview
Chairperson’s Report
Review of Operations
Directors' Report
Directors' Report
Directors' Declaration
Financial Report
Consolidated Statement of Profit or Loss
Consolidated Statement of Other
Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to and Forming Part of the
Financial Statements
Auditor's Independence Declaration
Independent Auditor’s Report
ASX Additional Information
2
4
12
24
27
28
29
30
31
32
70
71
76
1.
Chairperson's
Report
Dear Shareholders,
The 2022 financial year was one of substantial
advancement and value realisation for Prospect
and its shareholders. It is against this backdrop
that I would like to thank all shareholders, long
established and new, for their support over this
highly significant period.
In the face of volatile market conditions, the
business achieved a number of substantive
practical milestones. This included several key
activities that further reduced the Arcadia
Lithium Project’s technical and commercial risk
profile, including the successful construction and
operation of the Arcadia pilot plant, along with
the completion of two comprehensive Optimised
Feasibility Studies demonstrating multiple robust
pathways to development of Arcadia.
These activities, along with the execution of a
competitive tendering process for the funding of
Arcadia’s development, culminated in the sale of
our 87% interest in the Arcadia Project to Huayou
Cobalt, which was announced in December 2021.
The transaction with Huayou Cobalt, which
completed in April 2022, was a landmark moment
for the Company. It was also the result of extensive
advancement and evaluation efforts across several
years at Arcadia, from first discovery through to
the completion of the dual Optimised Feasibility
Studies.
The transaction realised a significant cash return
for shareholders, with Prospect distributing A$0.96
per share (A$444m in total) in early August 2022
as well as retaining approximately A$34 million
for future growth activities. As Chairman, I am
extremely proud of the substantial value uplift
and realisation that has been delivered to all
shareholders through the past year.
2.
Leading the way in the
battery revolution
The Company’s strategy going forward is to be a battery
and electrification minerals focused explorer and
developer. With the Arcadia transaction now complete,
business development and new project generation have
been our top priorities. The Board believes that with a
healthy balance sheet and continuation of the current
management team, that Prospect is appropriately
resourced to deliver on this strategy.
electrification minerals projects. It is my objective, along
with the entire Prospect Board, to ensure that Prospect
continues to protect, grow and realise further value for all
shareholders.
The Board would like to thank all shareholders for their
support through the year and we look forward to providing
updates on the opportunities ahead.
The team continue to develop a pipeline of prospective
battery and electrification mineral targets. The success
and publicity associated with the Arcadia transaction has
resulted in an increase in opportunities being presented
to Prospect. Project generation activities are advancing
well and the Company is well capitalised to identify, assess,
invest and advance projects that have the potential to
meet scale and grade criteria.
I look ahead with excitement. Prospect is in a strong
position to secure, advance and develop battery and
Yours faithfully
Mark Wheatley
Mark Wheatley
Non-Executive Chairperson
23 September 2022
3.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Review of
Operations
4.
Highlights
Highlights during and subsequent to the end of the year
were as follows:
(a) Successfully constructed and commenced
operation of the Arcadia Pilot Plant on budget and
within schedule.
(b) Completed the acquisition of shares in Prospect
Lithium Zimbabwe and issue of consideration
shares to Farvic. This value accretive transaction
enabled Prospect’s ownership in the Arcadia Project
to increase from 70% to 87%.
(c) Delivered bulk technical grade petalite shipment to
offtake partner, Sibelco.
(d) Delivered two Optimised Feasibility Studies,
presenting two economic development pathways
for Arcadia:
• A two-stage development to 2.4Mtpa throughput,
via progressive construction of two 1.2Mtpa
modules, providing a lower capital pathway to
production and allowing execution and market
risks to be managed progressively; and
• A single-stage development to 2.4Mtpa
throughput, providing greater development
efficiency and higher economic returns, with
higher upfront capital requirements.
(e) Acquisition of the Step Aside Lithium Project,
located 8km north of the Arcadia Project,
comprising claims rationalised to approximately 100
hectares within the Harare Greenstone Belt, west of
the Mashonganyika Fault.
(f) Completed an equity raising of A$18 million gross
proceeds in a placement to institutional investors
at A$0.40 per share, with funds used to advance
development of the Arcadia, advance the strategic
partnership process, undertake further regional
exploration and working capital.
(g) Commenced a structured partnership process,
whereby interested parties had the opportunity to
put forward proposals in a competitive environment
to fully fund the Arcadia Project.
(h) Signed a binding agreement with leading new
energy lithium-ion battery material producer,
Huayou Cobalt, for the sale of Prospect’s 87%
interest in the Arcadia Lithium Project for a cash
consideration of approximately US$377.8 million.
(i) Completed the transaction with Huayou in April 2022,
receiving net proceeds of US$342.9 million (A$465.6
million) after payment of US$26.9 million to ZIMRA for
capital gains tax and US$8.0 million to Sinomine.
(j) Subsequent to year end, distributed approx.
95% of the net Huayou transaction proceeds to
shareholders via a cash distribution of A$0.96 per
share (A$444 million), with approximately A$34
million cash retained to advance Prospect’s strategy
to be a battery and electrification metals explorer
and developer focussed on sub-Saharan Africa.
5.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Arcadia Lithium Project
Until completion of the transaction with Huayou Cobalt in April 2022, Prospect was the 87% owner of the Arcadia Lithium
Project. The Arcadia Project is located in Zimbabwe, approximately 35 kilometres east of the capital Harare, providing
convenient access to skilled and semi-skilled labour. A Mining Lease is granted over an area of more than 10 km2 and
Environmental Approvals are in place. Arcadia is located close to major highways and railheads, with the Beira Port being
less than 580 km away by rail/road transport. Grid power access via switchyard is within 4 kilometres of Arcadia with 20 MVA
capacity and with surplus groundwater available.
Pilot Plant
On 25 June 2021, Prospect announced that construction and commissioning of the Pilot Plant was complete and that
petalite production of bulk samples for customers had commenced, for an initial period of three months, with the ability to
extend this pending additional demand. On 1 July 2021 it was announced that an official opening ceremony had been held
at the Arcadia site in Zimbabwe with dignitaries from the Zimbabwean Government in attendance.
6.
Executive Director Harry Greaves briefing Minister Chitando and government officials at the pilot plant
Prospect received a pilot plant purchase order from offtake partner, Sibelco, in May 2021 for up to 2,000 tonnes of technical
grade petalite concentrate. The pricing in the purchase order represented an implied premium to the prevailing chemical
grade spodumene concentrate (SC6) price of approximately 40%, at the time the order was struck.
On 4 October 2021, Prospect announced that the first 25 tonne container of technical grade petalite concentrate from the
Arcadia Pilot Plant has been shipped to offtake partner, Sibelco. The Pilot Plant output was consistent with previous lab
scale test work and confirmed the amenability of the Arcadia Ore Reserves to the production of a technical grade petalite
concentrate product containing >4.0% Li2O, <0.06% Fe2O3 and <1.0% combined alkali (Na2O and K2O). The quality of the
petalite concentrate in the shipment exceeded the specifications set out in Prospect’s offtake agreement with Sibelco.
The operation of the Pilot Plant was critical in allowing for geo-metallurgical confirmation and optimisation for each ore
type, forming a critical part of Prospect’s project development and market integration strategies. Subsequent to the period,
pilot plant technical grade petalite product passed product qualification with the two largest European glass ceramics
customers and is able to be used as a feedstock in their manufacturing processes. This was a major validation of the pilot
plant, and successfully opened the European market.
7.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Optimised Feasibility Study
On 30 March 2021, Prospect appointed Lycopodium, a leading independent lithium focussed engineering firm, to deliver
the Optimised Feasibility Study (OFS) for the Arcadia Project. This scope of work included Front-End Engineering and
Design to improve technical certainty and reduce execution risk in providing greater accuracy on equipment selection,
sizing and resulting project economics.
Lycopodium was engaged to complete a dual-track OFS, evaluating:
•
Staged OFS - A two-stage development to 2.4 Mtpa throughput, via progressive construction of two 1.2 Mtpa
modules. This approach provided a lower upfront capital pathway to production and allowed execution and
market risks to be managed progressively.
• Direct OFS - A single-stage development to a 2.4 Mtpa throughput operation. This direct approach provided the
greater development efficiencies and higher economic returns, but with higher upfront capital requirements.
The Staged OFS and Direct OFS outcomes were released in October and December 2021, respectively. Both evidenced the
potential of Arcadia to become a compelling long life, large scale, hard rock open pit lithium mine in Zimbabwe. Both also
confirmed the Arcadia Project to be among the best lithium development projects globally in terms of scale and cost of
production.
ARCADIA DIRECT OPTIMISED FEASIBILITY STUDY (DIRECT OFS): KEY OUTCOMES
Key metric (100% project basis)
Unit
Direct OFS
Staged OFS
Price deck utilised
Annual process throughput
Initial life-of-mine (LOM) (Ore Reserve)
Average head grade (Ore Reserve)
Average production –spodumene
Average production – technical petalite
Average production – chemical petalite
Pre-production capital expenditure
Stage 2 capital expenditure
Sustaining capital expenditure
Post tax investment to positive cash
C1 cash operating cost
All-In-Sustaining-Cost (AISC)
LOM average SC6 reference price
IRR (pre-tax, real basis, ungeared)
Pre-tax NPV10% (real basis, ungeared)
IRR (post-tax, real basis, ungeared)
Post-tax NPV10% (real basis, ungeared)
Average annual EBITDA (post-tax)
Project net cashflow (post-tax)
Payback period (from first production)
High prices
Base prices
Low prices
Mtpa
years
% Li2O
ktpa conc.
ktpa conc.
ktpa conc.
US$m
US$m
US$m
US$m
US$/t conc.
US$/t conc.
US$/t SC6
%
US$m
%
US$m
US$m
US$m
Years
2.4
18.3
1.19
147
94
24
192
-
36
201
369
376
1,019
72
1,399
71
1,268
232
3,504
3.0
2.4
18.3
1.19
147
94
24
192
-
36
202
357
364
892
61
1,022
60
929
175
2,597
3.3
2.4
18.3
1.19
147
94
24
192
-
36
204
345
353
736
48
646
47
590
118
2.4
20.0
1.19
133
86
22
140
72
39
148
378
386
736
35
465
34
408
97
1,690
3.6
1,468
5.4
8.
In service of this strategy, the Company has taken the
opportunity to strengthen its management team with
the appointment of Mr David Broomfield to the role of
Business Development Manager.
David holds a Masters in Mineral Economics and an
honours Degree in Geology and has previously worked
in business development positions in iron ore and
manganese with both Sinosteel and Territory Resources
and privately in the gold-copper-nickel sectors.
Mr Broomfield also worked extensively with investors
and business leaders of small and emerging mid-cap
ASX-listed resource companies in multiple commodities,
experience that will play a key role in the corporate
development of Prospect as it strives to discover its next
development opportunity.
Prospect’s exploration team is headed by Chief Geologist,
Roger Tyler, who has decades of experience working
throughout Africa and prior to leading the team that
resulted in the discovery and development of the Arcadia
Lithium Mine, was Anvil Mining’s exploration manager in
the DRC and led the programmes resulting in the discovery
and development of the Kinsevere Copper-Cobalt Mine.
The exploration team continues to develop a pipeline of
prospective battery and electrification mineral asset targets.
The success and publicity associated with the Arcadia
transaction has resulted in an increase in opportunities
being presented to Prospect. Project generation activities
are advancing well, and the Company is well capitalised to
identify, assess, invest and advance projects that have the
potential to meet scale and grade criteria.
Business development activities have comprised
evaluation of a number of projects, spanning various
jurisdictions, commodities and stages of development.
Although the projects assessed to date presented
potential opportunities, they eventually failed to meet
Prospect’s internal project assessment criteria. Prospect is
in ongoing discussions with various parties and is focusing
its resources on the highest potential and best value
opportunities.
Partnership Process
On 23 August 2021, Prospect announced that following
a review of various funding options, and in response
to multiple inbound enquiries received from a range
of international parties in relation to funding and
development of Arcadia, the Prospect Board had decided
to commence a structured process for the submission
of competitive partnership proposals to fully fund the
Arcadia Project. The Company appointed Azure Capital and
Vermilion Partners to run this process.
On 22 November 2021, Prospect provided an update on the
process confirming that it had received seven non-binding
proposals for the advancement of Arcadia from a range of
international parties, encompassing structures including
development joint venture, offtake prepayment debt
funding and outright acquisition of Prospect’s interest in
Arcadia.
Huayou Cobalt transaction
On 21 December 2021, Prospect signed a binding
agreement with leading new energy lithium-ion battery
material producer, Huayou Cobalt, for the sale of its 87%
interest in the Arcadia Lithium Project. The transaction
comprised cash consideration of approximately US$377.8
million. Upon completion of the transaction in April 2022,
and after payment of US$26.9 million in Zimbabwean
capital gains tax and US$8 million to Sinomine in relation
to the termination of the offtake agreement between
Prospect and Sinomine, Prospect received net sale
proceeds of US$342.9 million (A$465.6 million).
Distribution
The Prospect Board determined to distribute the
vast majority of the Arcadia transaction proceeds to
shareholders via a A$0.96 per share distribution. This
distribution comprised an unfranked dividend component
of A$0.79 per share (Special Dividend) and a capital
reduction component of A$0.17 per share (Capital
Reduction).
The Company called a General Meeting for 22 July 2022 in
order for shareholders to approve the Capital Reduction.
At the meeting, Prospect shareholders approved the
resolution. Accordingly, all eligible shareholders received
the A$0.96 per share cash distribution on 4 August 2022.
Project Generation and Business Development
Post its sale of the Arcadia Project, Prospect’s strategy
is to be a battery and electrification minerals dedicated
explorer and developer, with a focus on the sub-Saharan
African region. With the Arcadia transaction now complete,
business development and new project generation are the
top priorities. The Board believes that, with approximately
A$34 million of residual cash post distribution, zero debt
and continuity of the current management team, that
Prospect is very well placed to deliver on this strategy.
9.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Current Projects – Zimbabwe
Current Projects – Zimbabwe
Step Aside Project – Lithium
The Step Aside Lithium Project is located 8km north of the Arcadia Project, and comprises claims rationalised to
approximately 100 hectares within the Harare Greenstone Belt, west of the Mashonganyika Fault (see map below).
The potential of the area has been confirmed by positive historical regional stream and soil sample geochemistry results. Four
mineralised pegmatites have been mapped from east to west within a meta-dolerite host rock. These mineralised pegmatites
are all roughly parallel to each other, lying in a north-south orientation and have mapped dip angles of 40-45˚ to the west.
Locality Map of Step Aside, 8km north of Arcadia
The next step in the exploration program at Step Aside is an initial Reverse Circulation (RC) drilling program. This
approximately 15-hole, 1,100 metres program is targeted to determine the lateral/strike extent of potential mineralisation
and identify key targets for planned follow-up diamond drilling (which will enable testing of the down-dip extent of the
pegmatites).
10.
Competent Person Statement
The Company confirms it is not aware of any new information or data that
materially affects the information included in the Arcadia Mineral Resource
Estimate and that all material assumptions and technical parameters
underpinning the estimate continue to apply and have not materially changed
when referring to its resource announcement made on 25 October 2017.
The Company confirms it is not aware of any new information or data that
materially affects the information included in the Arcadia ore reserve estimate
and that all material assumptions and technical parameters underpinning the
estimate continue to apply and have not materially changed when referring to its
reserve announcement made on 11 October 2021.
11.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Directors'
Report
12.
The Directors of Prospect Resources Limited (“the
Company”) submit hereby the annual report of the
Company and its subsidiaries, (together the “Consolidated
Entity” or “Group”) for the financial year ended 30 June
2022. In order to comply with the provisions of the
Corporations Act 2001, the Directors’ Report as follows:
DIRECTORS AND OFFICERS
The Directors and Officers at any time during or since the
end of the year are:
Name
Particulars
Mark Wheatley
Non-Executive Chairperson
Duncan (Harry) Greaves
(resigned 6 September 2022)
Executive Director
Gerry Fahey
Non-Executive Director
Zivanayi (Zed) Rusike
Non-Executive Director
Dev Shetty
Non-Executive Director
HeNian Chen
Non-Executive Director
Meng Sun
Sam Hosack
Ian Goldberg
Alternate to Mr H Chen
Managing Director
Chief Financial Officer and
Joint Company Secretary
Lee Tamplin
Joint Company Secretary
The above named Directors and Officers held office during
and since the end of the financial year, except as otherwise
stated.
PRINCIPAL ACTIVITY
The principal activity of the Group is exploration, evaluation
and development of mineral resources.
REVIEW OF OPERATIONS AND RESULTS
The Group has recognised an overall profit after tax of
$397,507,000 (2021: loss $3,745,000). This significant increase
in profit was driven by the sale of the Arcadia project which
enabled the Group to record a profit on sale of discontinued
operations of $415,389,000 for the year (2021: loss $1,236,000).
As at the date of this report there are 462,259,462 shares on
issue.
Additional information on the operations and financial
position of the Group is set out in the Review of Operations.
(2) Completed the acquisition of shares in Prospect
Lithium Zimbabwe and issue of consideration shares to
Farvic, increasing the ownership in the Arcadia Project
from 70% to 87%.
(3) Delivered bulk technical grade petalite shipment to
offtake partner, Sibelco.
(4) Delivered two Optimised Feasibility Studies, presenting
two economic development pathways for Arcadia:
• A two-stage development to 2.4Mtpa
throughput, via progressive construction of
two 1.2Mtpa modules, providing a lower capital
pathway to production and allowing execution
and market risks to be managed progressively;
and
• A single-stage development to 2.4Mtpa
throughput, providing greater development
efficiency and higher economic returns, with
higher upfront capital requirements.
(5) Acquisition of the Step Aside Lithium Project, located
8km north of the Arcadia Project, comprising claims
rationalised to approximately 100 hectares within the
Harare Greenstone Belt, west of the Mashonganyika
Fault.
(6) Completed an equity raising of A$18 million gross
proceeds in a placement to institutional investors
at A$0.40 per share, with funds used to advance
development of the Arcadia, advance the strategic
partnership process, undertake further regional
exploration and working capital.
(7) Commenced a structured partnership process,
whereby interested parties had the opportunity to put
forward proposals in a competitive environment to fully
fund the Arcadia Project.
(8) Signed a binding agreement with leading new
energy lithium-ion battery material producer, Huayou
Cobalt, for the sale of Prospect’s 87% interest in the
Arcadia Lithium Project for a cash consideration of
approximately US$377.8 million.
(9) Completed the transaction with Huayou in April 2022,
receiving net proceeds of US$342.9 million (A$465.6
million).
Subsequent to year end, the Company made a cash
distribution to shareholders totaling A$0.96 per share
(A$444 million), with approximately A$34 million cash
retained to advance Prospect’s strategy to be a battery and
electrification metals explorer and developer focussed on
sub-Saharan Africa.
ENVIRONMENTAL REGULATIONS
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Significant changes in the state of affairs of the Group
during the financial year were as follows:
The Group is aware of its environmental obligations with
regards to its exploration and development activities and
ensures that it complies with all regulations when carrying
out exploration and development work.
(1) Successfully constructed and commenced operation of
the Arcadia Pilot Plant on budget and within schedule.
13.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022Directors' Report MATTERS SUBSEQUENT TO THE END OF THE
FINANCIAL YEAR
Other than the following, the directors are not aware of any
significant events since the end of the reporting period:
• On 6 July 2022 the Company issued 13.5 million ordinary
shares and received $3.41 million in cash for the exercise
of 13.5 million options.
• On 22 July 2022 the Company held a general meeting
for shareholders where the return of capital, being $0.17
per share, was approved and Directors resolved to issue
an unfranked dividend of $0.79 per share, for a total
distribution of $0.96 per share.
Mr Wheatley is well known to institutional investors and
has served as a nominee director for a leading private
equity group across a number of their listed and private
portfolio companies. He brings strong corporate experience
and in depth understanding of equity markets and has led
successful turnaround stories and several highly accretive
merger and acquisition transactions.
Mr Wheatley holds a Bachelor of Engineering (Chemical
Engineering Hons 1) from the University of New South
Wales and a Master of Business Administration from West
Virginia University.
Other Current Listed Directorships
• On 4 August 2022 the distribution as noted above was
made to shareholders for gross amount of $443.8 million.
Ora Banda Mining Ltd (appointed 2 April 2019)
Peninsula Energy Limited (appointed 26 April 2016)
• On 26 August 2022 the Group acquired the 30%
noncontrolling interest in Hawkmoth Mining &
Explorations (Pvt) Limited (“HME”) for a purchase price
of US$100. On completion of the transaction HME
becomes a wholly owned subsidiary of the group.
• On 6th September Harry Greaves resigned as a Director
but will continue to provide consulting services to the
Company going forward.
DIVIDENDS
An unfranked dividend of $0.79 per share was recommended
during the year and paid subsequent to the year end.
LIKELY DEVELOPMENTS / STRATEGIES AND
PROSPECTS
The Company’s future strategy is to be a battery and
electrification minerals focused explorer and developer.
With the Arcadia transaction now complete, business
development and new project generation are our top
priorities. The Board believes that, with approximately
A$34 million of available cash and continuation of the
current management team, that the Company is extremely
well-resourced to deliver on this strategy.
Former Listed Directorships in the Last Three Years
None
Special Responsibilities
Chairman and member of the Remuneration and
Nominations Committee
Interests in Shares and Options
2,645,162 ordinary shares and Nil options.
Duncan (Harry) Greaves (Executive Director)
appointed 18 July 2013, resigned
6 September 2022
Experience and Expertise
Mr Greaves is a fourth generation Zimbabwean. He holds
a B.Sc (agriculture) from the University of Natal (in South
Africa). He is the Managing Director of Farvic Consolidated
Mines (Pvt) Ltd which incorporates Mixnote Investments
(Pvt) Ltd operating the Beatrice Mine.
Other Current Listed Directorships
None
INFORMATION ON DIRECTORS
Former Listed Directorships in the Last Three Years
None
Mark Wheatley (Non-Executive Chairman)
appointed 8 January 2021; Independent
Special Responsibilities
None
Interests in Shares and Options
5,517,954 ordinary shares and Nil options.
Experience and Expertise
Mr Wheatley is an experienced listed resources company
director including roles as CEO, MD, non-executive
director and chairman since 2003. He has operated on
the ASX, TSX, JSE and NASDAQ across the gold, base and
battery metals sectors at all stages of the mining life cycle
within companies with markets caps ranging from $5
million to $7 billion. His executive experience began as an
undergraduate trainee at a major miner and development
across a number of disciplines, then investment banking
before moving to a large gold miner and later into the
junior mining sector as MD/CEO in uranium and gold.
14.
Directors' Report Gerry Fahey (Non-Executive Director)
appointed 15 July 2013
Dev Shetty (Non-Executive Director)
appointed 18 December 2020
Experience and Expertise
Experience and Expertise
Mr Fahey has over 40 years’ experience in both the
international and local minerals industry. He is a specialist
in mining geology, mine development and training and
worked for 10 years as Chief Geologist Mining for Delta
Gold where he was actively involved in Zimbabwe with the
development of the Eureka, Chaka, Globe and Phoenix
gold mines and the following Australian gold projects:
Kanowna Belle, Golden Feather, Sunrise and Wallaby. Gerry
is currently a Director of Focus Minerals Ltd and a former
Director of CSA Global Pty Ltd, Modun Resources Limited
and a former member of the Joint Ore Reserve Committee
(JORC).
Mr Shetty is a highly experienced mining executive and
qualified chartered accountant. He is currently President
and CEO of Fura Gems Inc. He was previously a director
and group Chief Operating Officer of Gemfields plc (LSE:
GEM), and also held roles in a private-equity firm.
Other Current Listed Directorships
None
Former Listed Directorships in the Last Three Years
None
Other Listed Current Directorships
Focus Minerals Ltd (appointed 20 April 2011)
Former Listed Directorships in the Last Three Years
None
Special Responsibilities
Member of the Audit and Risk committee
Interests in Shares and Options
741,039 ordinary shares and Nil options.
Special Responsibilities
Member of the Remuneration and Nominations
Committee
Interests in Shares and Options
1,025,000 ordinary shares and Nil options.
Zivanayi (Zed) Rusike (Non-Executive Director)
appointed 26 September 2013
Experience and Expertise
Mr Rusike has a Bachelor of Accountancy Degree
(Birmingham) and is a resident of Zimbabwe. He was
previously the Managing Director of United Builders
Merchants before being promoted to Group Managing
Director for Radar Holdings Limited, then, a large, quoted
company on the Zimbabwe Stock Exchange. He retired
from the Radar Group of companies to pursue personal
interests and currently sits on the boards of ZB Capital
Limited, Dulux Paints Limited and Halsted Brothers
(Pvt) Limited. Mr Rusike is a former President of the
Confederation of Zimbabwe Industries (2000 – 2001).
HeNian Chen (Non-Executive Director)
appointed 13 November 2017
Experience and Expertise
Mr Chen has served as the Chairman of Changshu Yuhua
Property Co. Ltd since 2003, and has served as the Deputy
Chairman of Afore New Energy Technology (Shanghai) Co.
Ltd since 2007.
Other Current Listed Directorships
None
Former Listed Directorships in the Last Three Years
None
Special Responsibilities
Member of the Remuneration and Nominations
Committee, and Audit and Risk Committee
Interests in Shares and Options
6,913,744 ordinary shares and Nil options
Other Current Listed Directorships
None
Sam Hosack (Managing Director) appointed
14 July 2018
Former Listed Directorships in the Last Three Years
Experience and Expertise
None
Special Responsibilities
Member of the Remuneration and Nominations
Committee, and Audit and Risk Committee
Interests in Shares and Options
3,040,374 ordinary shares and Nil options.
Mr Hosack is a third generation Zimbabwean, residing
in Western Australia. He holds a Bachelors Engineering
Degree (Hons) from Essex University in UK, MBA from
Ashcroft Business School (UK) and respective professional
registrations. He has hands on experience in the delivery
of large-scale mining, power and port projects to market,
as well as management of their operations. For the 12
years prior to commencing at Prospect Resources, he was
employed by First Quantum Minerals Ltd, primarily in the
Project delivery team, where in his final role he project
15.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022Directors' Report managed the building of a port (coal offloading and copper
loading), 120km 230kV transmission line and a 300MW
coal fired power station for the Minera Panama Project in
Panama. His leadership and mining operations experience
in North and Southern Africa, Europe, Australia and Central
America will be a critical success factor in building Prospect
into a diversified mining developer.
Other Current Listed Directorships
None
Former Listed Directorships in the Last Three Years
None
Special Responsibilities
None
Interests in Shares and Options
7,220,854 ordinary shares and Nil options.
Company Secretary
Mr Ian Goldberg and Mr Lee Tamplin were appointed joint
company secretaries on 8 March 2021. Mr Goldberg is the
Company’s Chief Financial Officer and Mr Tamplin is an
employee of Automic Group and is currently the company
secretary of several other listed companies.
Interests in Shares and Options
Mr Goldberg holds 4,085,153 ordinary shares and Nil
options. Mr Tamplin has Nil interest in the Group.
MEETINGS OF DIRECTORS
The number of Board and Committee meetings of the
Company’s board held during the year ended 30 June 2022
that each Director was eligible to attend, and the number
of meetings attended by each Director were:
REMUNERATION REPORT (AUDITED)
The Remuneration Report is set out under the following
main headings:
(1) Principles used to determine the nature and amount of
remuneration;
(2) Details of remuneration;
(3) Service agreements; and
(4) Share-based compensation.
The information provided in this Remuneration Report
has been audited as required by Section 308(3C) of the
Corporations Act 2001.
This report details the nature and amount of remuneration
for each director and executive of Prospect Resources
Limited. The information provided in the remuneration
report includes remuneration disclosures that are
audited as required by the Corporations Act 2001 and its
regulations.
For the purposes of this report, Key Management
Personnel of the Group are defined as those persons
having authority and responsibility for planning, directing
and controlling the major activities of the Group, directly
or indirectly, including any director (whether executive or
otherwise) of the parent company.
For the purposes of this report, the term ‘executive’
includes those key management personnel who are not
directors of the parent company.
1) Principles used to determine the nature
and amount of remuneration
It is the Group’s objective to provide maximum stakeholder
benefit from the retention of a high quality board and
executives by remunerating directors and executives fairly
and appropriately with reference to relevant employment
market conditions. To assist in achieving the objective, the
Board links the nature and amount of executive director’s
Number of Meetings
Board
Audit & Risk
Remuneration
& Nomination
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
13
13
13
13
13
13
13
13
13
12
13
12
10
4
13
13
-
-
-
3
3
-
3
3
-
-
-
3
2
-
3
3
2
-
2
2
-
-
2
2
2
-
2
2
-
-
2
2
Director
Mark Wheatley
Harry Greaves
Gerry Fahey
Zed Rusike
Dev Shetty
HeNian Chen
Meng Sun (alternate to Mr Chen)
Sam Hosack
16.
Directors' Report REMUNERATION REPORT (AUDITED)
(Continued)
emoluments to the Group’s financial and operational
performance. The intended outcomes of this remuneration
structure are:
• Retention and motivation of directors and executives
• Performance rewards to allow directors and executives
to share the rewards of the success of the Group.
The remuneration of an executive director will be decided by
the Board. In determining competitive remuneration rates
the Board reviews local and international trends among
comparative companies and the industry generally. It also
examines terms and conditions for any options issued.
During the year, external consultants were not used for
determining remuneration.
The maximum remuneration of non-executive directors is
the subject of shareholder resolution in accordance with
the Group’s Constitution, and the Corporations Act 2001 as
applicable and is set at $500,000. The appointment of non-
executive director remuneration within that maximum will
be made by the Board having regard to the development
of the company and benchmarking of fees paid to peer
group companies.
The Board may award additional remuneration to non-
executive directors called upon to perform extra services
or make special exertions on behalf of the Group. There
is no scheme to provide retirement benefits, other than
statutory superannuation, to non-executive directors.
All equity-based remuneration paid to directors and
executives is valued at the cost to the Group and expensed.
Options are valued using the Black-Scholes methodology.
Performance Based Remuneration
The Board may pay bonuses to executive directors and
executives at its discretion.
The issue of options to directors and executives is to
encourage the alignment of personal and shareholder
returns. The intention of this program is to align the
objectives of directors/executives with that of the business
and shareholders. In addition, all directors and executives
are encouraged to hold shares in the Company.
Group Performance, Shareholder Wealth and
Key Management Personnel Remuneration
The Group is currently undertaking exploration and
development activities and does not expect to be undertaking
profitable operations (other than by way of material asset
sales) until sometime after the successful commercialisation,
production and sales of commodities from one or more of its
projects. Accordingly, the Board does not consider earnings
during the current and previous four financial years when
determining, and in relation to, the nature and amount of
remuneration of Key Management Personnel.
The remuneration policy has been tailored to maximise
the commonality of goals between shareholders, directors,
and executives. The method applied in achieving this aim
to date is to issue options to directors and executives to
encourage the alignment of personal and shareholder
interests while also allowing cash based compensation to
be moderated until operating cashflow is achieved. The
Group believes this policy will be the most effective in
increasing shareholder wealth.
Performance of Prospect Resources Limited
The table below sets out summary information about the
consolidated entity’s earnings and movements in shareholder
wealth for the financial year ended 30 June 2022 and prior.
Revenue
Net (loss) before tax
Gain / (loss) from discontinued operations
Net profit / (loss) after tax
30 June 2022 (ii)
30 June 2021
30 June 2020
30 June 2019 30 June 2018
$’000
5,650
(17,882)
415,389
397,507
$’000
442
(2,509)
(1,236)
(3,745)
$’000
369
$’000
3,320
$’000
3,892
(4,607)
(5,722)
(5,401)
-
-
-
(4,607)
(5,753)
(5,640)
30 June 2022
30 June 2021
30 June 2020
30 June 2019 30 June 2018
Share price at beginning of year (cents)
Share price at end of year (cents)
Dividends
Basic (loss) per share (cents per share)
Diluted (loss) per share
21.0
97.0
-
(4.29)
(4.20)
7.2
21.0
-
(1.06)
(1.06)
22.5
7.2
-
(1.79)
(1.79)
35.0 (i)
22.5
-
(3.52)
(3.52)
2.0
3.5
-
(0.32)
(0.32)
(i) The Company underwent a 10 for 1 share consolidation in 2019. The 2019 opening share price has been restated, however the data from
years prior to 2019 have not been restated
(ii) Unless otherwise stated, the current year performance information reflects the continuing operations of the group. The prior year data has
been restated to reflect the impact of the sale of the Arcadia project.
17.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022Directors' Report REMUNERATION REPORT (AUDITED) (Continued)
Remuneration of Key Management Personnel
The following persons were identified as Key Management Personnel of Prospect Resources Limited during the financial year:
Directors
Name
Mark Wheatley
Particulars
Non-Executive Chairperson
Duncan (Harry) Greaves (resigned 6 September 2022)
Executive Director
Gerry Fahey
Zivanayi (Zed) Rusike
Dev Shetty
HeNian Chen
Meng Sun
Sam Hosack
Executives
Name
Ian Goldberg
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Alternate to Mr H Chen
Managing Director
Particulars
Chief Financial Officer and Joint Company Secretary
2) Details of remuneration
SHORT TERM
POST
EMPLOYMENT
EQUITY OTHER (ii)
2022
Salary &
Fees
$
Bonus(v)
$
Salary
Sacrifice(iii)
$
Superannuation
$
Options
$
Total
$
Performance
%
-
-
32,727
36,000
100,000
36,000
32,727
32,579
-
-
-
-
-
-
-
-
-
Non-Executive Directors
M Wheatley
139,636(vi)
G Fahey
Z Rusike
D Shetty
H Chen (i)
M Sun (iv)
Executive Directors
H Greaves
S Hosack
Executives
$
-
-
-
-
-
-
-
247,980
86,190
136,000
86,190
86,190
36,000
849,989
7,964
100,380
3,273
50,190
-
-
-
50,190
3,273
50,190
3,421
-
-
250,000
475,000
124,989
-
326,432
-
174,999
23,568
275,981
25,324
826,304
I Goldberg
276,432
52,000
-
23,568
136,264
8,007
496,271
Total
1,162,533
627,000
299,988
65,067
663,195
33,331
2,851,114
(i) HeNian Chen fees were paid or are payable to his alternate director, Ms Sun
(ii) Other benefits represents leave accruals
(iii) Salary sacrifice represents the reimbursement of salary forgone up to 30 June 2021 when all salaries were restored to their original levels by
the board.
(iv) Alternative director Ms Sun was paid a fee as consideration for consultancy services rendered and special exertions made during the year.
(v) Bonus of Mr Greaves and Mr Rusike represent short term incentives paid for their additional services rendered and special exertions made
in contribution to recent corporate transactions. Bonus of Mr Goldberg represents one-off payment agreed on employment.
(vi) Salary and fees of Mr Wheatley includes $60,000 for additional days worked in addition to work performed under his Service Agreement
18.
40%
58%
74%
58%
58%
-
56%
33%
38%
45%
Directors' Report REMUNERATION REPORT (AUDITED) (Continued)
SHORT TERM
POST
EMPLOYMENT
EQUITY OTHER (vi)
2021
Salary &
Fees
$
Bonus
$
Salary
Sacrifice
$
Superannuation
$
Options
$
Total
$
Performance
%
Non-Executive Directors
M Wheatley (i)
G Fahey
Z Rusike
D Shetty
H Chen (ii)
Executive Directors
H Greaves
S Hosack
H Warner (iii)
Executives
T Barnard
C Hilbrands (iv)
I Goldberg (v)
Total
38,413
10,959
12,000
6,467
10,959
125,000
158,904
48,260
149,322
97,032
63,261
720,577
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
43,408
12,673
12,000
7,140
12,673
125,000
3,649
1,346
1,041
-
-
1,041
673
-
673
673
-
-
-
-
-
-
-
-
-
15,096
3,744
14,338
192,082
93,750
9,200
-
54,642
205,852
-
11,416
-
-
85,919
39,767
275,008
11,640
-
36,946
157,034
6,010
52,815
3,309
125,395
105,166
47,677
145,843
149,002
1,168,265
3%
5%
-
9%
5%
-
2%
-
31%
-
42%
(i) Mr Wheatley was appointed as a director on 8 January 2021
(ii) Mr Chen fees were paid or are payable to his alternate director, Meng Sun
(iii) Mr Warner resigned as a director on 22 October 2020
(iv) Mr Hilbrands resigned as CFO on 15 March 2021
(v) Mr Goldberg joined the Company on 6 February 2021
(vi)
Except in the case of Mr Barnard Other benefits represents leave accruals. Mr Barnard also received Other benefits of $39,767 being for
family school tuition and rental accommodation paid by the Group on his behalf
Salary sacrifice payments
In 2022, amounts forgone by executives up to 31 December 2021 were reimbursed (2021: $Nil). The amount paid to Executive
directors was in addition to their salary, paid as a 1 off salary sacrifice payment. The salary sacrifice payments included
$52,000 paid to Mr Goldberg as a one-off conditional bonus upon the Company declaring final investment decision on the
Arcadia project in accordance with his Executive Services Agreement for reduced salary for services from commencement
of his employment to 31 December 2021.
Short term incentives - bonus
In 2022 short term incentives of $575,000 were recognised by the Group (2021: $Nil). Payments were made to Mr Greaves
($475,000) and Mr Rusike ($100,000) for their additional services rendered and special exertions made in contribution to
recent corporate transactions.
3) Service agreements
Non-Executive Directors
Non-executive directors entered into either a Non-Executive Services Agreement or Consultancy Agreement commencing
1 June 2016, or if later, on commencement of appointment, with a total annual salary of $24,000 per annum inclusive of
superannuation (if applicable). Effective 1 April 2020, non-executive director remuneration was reduced by 50% to $12,000
per annum.
As of 1 July 2021, the non-executive director remuneration was adjusted to a total annual salary of $36,000 per annum
inclusive of superannuation (if applicable). During 2022, in addition to his salary, Mr Rusike received a short term incentive
of $100,000 for additional services rendered and special exertions made in contribution to recent corporate transactions.
19.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022Directors' Report Effective 1 April 2020, Mr Barnard’s contract was converted
into a US$ based value and reduced by approximately 40%
to US$112,260 (approx. AU$160,000) per annum.
As of 1 July 2021, Mr Barnard’s remuneration was adjusted
to a total annual salary of US$187,104 (approximately
$250,000) per annum inclusive of superannuation (if
applicable). During 2021, Mr Barnard also received other
benefits of $39,767 being for family school tuition and rental
accommodation paid by the Group on his behalf.
Mr Goldberg entered into an Executive Services Agreement
commencing 6 February 2021 with a total salary of
$300,000 per annum inclusive of superannuation. Effective
6 February 2021, Mr Goldberg’s remuneration was reduced
to $175,000 per annum. As of 1 July 2021, Mr Goldberg’s
remuneration was adjusted to a total salary of $300,000 per
annum inclusive of superannuation. During the year, Mr
Goldberg received a one-off payment of $52,000 for salary
forgone during the period.
Termination
For all Directors and Officers other than Mr Wheatley,
Mr Shetty and Mr Hosack, terms of employment require
that the Company provide the Executive with six months’
written notice. The Directors or Executive may terminate
their employment at any time and may be entitled to
up to six months’ salary. The Company can terminate an
Executive’s employment by giving one months notice if the
Executive commits or becomes guilty of gross misconduct
and summarily without notice if convicted of any major
criminal offence.
Mr Wheatley, Mr Shetty and Mr Hosack’s terms of
employment require that the Company or Executive
provide the other with three months’ notice.
REMUNERATION REPORT (AUDITED)
(Continued)
The Chairperson Mr Wheatley has a service agreement
with a total annual salary of $87,600 inclusive of super. After
the initial role orientation phase, days worked beyond 6
full days per month which when agreed by the Managing
Director prior, are billable at A$1,000 per day. A total of
$60,000 was accrued at 30 June 2022.
Executive Directors
Mr Hosack entered into an Executive Services Agreement
commencing 13 May 2018 with a total annual salary of
$35,000 per annum inclusive of superannuation. The total
annual salary increased to $350,000 per annum inclusive
of superannuation upon his appointment to Managing
Director which occurred on 14 July 2018. Effective 1 April
2020, Mr Hosack’s remuneration was reduced by 50.3% to
$174,000 per annum.
As of 1 July 2021, Mr Hosack’s remuneration was adjusted
to a total annual salary of $350,000 per annum inclusive of
superannuation. During 2022, in addition to his salary, Mr
Hosack received a 1 off salary sacrifice payment of $174,999.
Mr Greaves entered into an Executive Services Agreement
commencing 1 June 2016 with a total annual salary of
$250,000 per annum inclusive of superannuation
(if applicable) from 1 August 2016. Effective 1 April 2020,
Mr Greaves’ remuneration was reduced by 50% to $125,000
per annum.
As of 1 July 2021, Mr Greaves’ remuneration was adjusted
to a total annual salary of $250,000 per annum inclusive
of superannuation. During 2022, in addition to his salary,
Mr Greaves received a 1 off salary sacrifice payment
of $124,989 and a short term incentive of $475,000 for
additional services rendered and special exertions made in
contribution to recent corporate transactions.
Other Executives
Mr Barnard signed a consulting agreement with a subsidiary
of the Company commencing 1 August 2018, which
remained in force until the SSA was executed at which point
Mr Barnard ceased to be an Executive of the Group.
20.
Directors' Report REMUNERATION REPORT (AUDITED) (Continued)
4) Share-based compensation
The Company issued Nil options to directors or key management personnel during the financial year (2021: 17,500,000).
20,000,000 options were exercised (2021: Nil) and Nil options (2021: Nil) expired during the year.
During the financial year, all share based payment arrangements with key management personnel completed as all
options vested and were exercised. The following share based payment arrangements to directors and key management
personnel were in existence during the year:
Options series
Grant date
Grant date fair value
Exercise price
Expiry date
Vesting date
Issued 13/05/18
13/05/18
$0.1740
Issued 06/02/21
06/02/21
$0.0420
Issued 25/06/21
Issued 25/06/21
Issued 17/11/20
25/06/21
25/06/21
17/11/20
$0.0509
$0.0466
$0.0487
$0.60
$0.26
$0.24
$0.26
$0.24
12/05/22
14/10/18
03/02/25
23/12/21 (i)
07/01/25
03/02/25
05/11/23
23/12/21
23/12/21
23/12/21
(i) The terms of the options provided for their vesting on a Change in Control Event, covering a change of control at both a corporate and
project level. The signing of the SSA triggered a change in control event as the Group has agreed to sell all or a substantial part of the
assets or business of the Group (the Arcadia Project) to a third party, which was not the result of an internal restructure. The terms and
vesting conditions on the date of grant of 17,500,000 options in the prior year are detailed below.
During the financial year ended 30 June 2021, the Company issued 17,500,000 options to directors or key management
personnel and Nil options were exercised or expired during the year. During that year, the following share based payment
arrangements to directors and key management personnel were in existence:
Options series
Grant date
Grant date fair value
Exercise price
Expiry date
Vesting date
Issued 13/05/18
13/05/18
$0.1740
Issued 06/02/21
06/02/21
$0.0420
Issued 25/06/21
Issued 25/06/21
Issued 17/11/20
25/06/21
25/06/21
17/11/20
$0.0509
$0.0466
$0.0487
(i) Mr Goldberg option vesting conditions
(a) 1,500,000 options vest in 12 months from date of issue;
$0.60
$0.26
$0.24
$0.26
$0.24
12/05/22
14/10/18
03/02/25
07/01/25
03/02/25
05/11/23
(i)
(ii)
(iii)
(iv)
(b) 1,500,000 options vest at Final investment Decision (FID) before 31 December 2021 for stage 1 of the Arcadia development, FID occurs
after all elements of the project are procured and sufficient capital is secured to fully fund the stage 1 project;
(c) 1,500,000 options vest with first on-spec product shipped within 18 months of FID; and
(d) All options will vest immediately upon a change of control event.
(e) The options are non-transferable.
(ii) Options granted to Mr Wheatley, Mr Fahey, Mr Shetty and Mr Shen vesting conditions
(a) 1,00,000 of options vesting at FID before 31 December 2021 for stage 1 of the Arcadia development, FID occurs after all elements of
the project are procured and sufficient capital is secured to fully fund the stage 1 project; and
(b) 1,000,000 of the options vest with first on-spec product shipped within 18 months of FID.
(c) The options are non-transferable.
(iii) Mr Hosack option vesting conditions
(a) 2,000,000 options vest in 12 months from date of issue;
(b) 2,000,000 options vest at FID before 31 December 2021 for stage 1 of the Arcadia development, FID occurs after all elements of the
project are procured and sufficient capital is secured to fully fund the stage 1 project;
(c) 2,000,000 options vest with first on-spec product shipped within 18 months of FID; and
(d) All options will vest immediately upon a change of control event.
(e) The options are non-transferable.
(iv) Mr Barnard options vesting conditions
(a) 500,000 vest in 6 months;
(b) 500,000 vest in 12 months;
(c) 500,000 vest at first shipment of on-spec product from the pilot plant before 30 June 2021; and
(d) 500,000 vest at FID, FID occurs after all elements of the project are procured and sufficient capital is secured to fully fund the stage 1
project before 31 December 2021.
(e) The options are non-transferable.
21.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022Directors' Report REMUNERATION REPORT (AUDITED) (Continued)
The value of options granted during the financial year is calculated at the grant date using Black-Scholes. The Company
recognised $663,193 share based payment compensation to key management personnel for options granted in prior
periods. In 2021: $145,843 was recognised as share based payment compensation for options granted during that year.
20,000,000 options were exercised during the year (2021: Nil). Nil options expired in 2022 (2021: Nil).
During the year, the following options of directors and key management personnel were exercised (2021: Nil). The value of
options exercised during the year is calculated as the market price of shares of the Company as at close of trade on the date
the options were exercised after deducting the price paid to exercise the option. Some option holders utilised a cashless
exercise facility offered allowing the conversion of options for a reduced cash payment in forfeiture of shares.
Options Exercised during the year
Value of Option Exercised during the year
2022
M Wheatley
H Greaves
G Fahey
Z Rusike
D Shetty
H Chen
S Hosack
I Goldberg
T Barnard
2,000,000
-
1,000,000
-
1,000,000
1,000,000
10,500,000
4,500,000
2,000,000
22,000,000
$
1,460,000
-
700,000
-
720,000
700,000
5,655,000
3,060,000
1,200,000
13,495,000
Key Management Personnel Equity Holdings
Ordinary Shares
Held at 30 June 2022
M Wheatley
H Greaves
G Fahey
Z Rusike
D Shetty
H Chen
S Hosack
I Goldberg
T Barnard
Opening
balance
645,162
5,517,954
1,025,000
3,040,374
-
6,165,796
2,000,000
258,064
1,775,270
20,427,620
Granted as
compensation
On exercise of
options
Disposed
Net change
other
Closing
balance
-
-
-
-
-
-
-
-
-
-
2,000,000
-
-
-
747,948
(747,948)
-
741,039
747,948
-
-
-
7,220,854
(2,000,000)
4,085,153
(258,064)
-
-
-
-
-
-
-
-
2,645,162
5,517,954
1,025,000
3,040,374
741,039
6,913,744
7,220,854
4,085,153
-
-
(1,775,270)
-
15,542,942
(3,006,012)
(1,775,270)
31,189,280
Options Held at
30 June 2022
Opening
balance
Granted as
compensation
Exercised
Expired
Closing
balance
Vested during
the year
Vested and
exercisable
M Wheatley
2,000,000
H Greaves
G Fahey
Z Rusike
D Shetty
H Chen
S Hosack
I Goldberg
T Barnard
-
1,000,000
-
1,000,000
1,000,000
10,500,000
4,500,000
2,000,000
22,000,000
-
-
-
-
-
-
-
-
-
-
(2,000,000)
-
(1,000,000)
-
(1,000,000)
(1,000,000)
(10,500,000)
(4,500,000)
(2,000,000)
(22,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
-
1,000,000
-
1,000,000
1,000,000
6,000,000
4,500,000
1,500,000
17,000,000
(End of Remuneration Report)
-
-
-
-
-
-
-
-
-
-
22.
Directors' Report ADDITIONAL INFORMATION
(a) Shares under option
At 30 June 2022 the Company had 13,500,000 unlisted options over ordinary shares under issue (30 June 2021: 39,750,000).
These options have since been exercised such that at the date of signing this report, the Company has Nil unlisted options
over ordinary shares under issue.
(b) Insurance of officers
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company, the
company secretary, and any executive officers of the Company and of any related body corporate against a liability incurred
by such a director, secretary or executive 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.
(c) Agreement to indemnify officers
The Company has entered into agreements with the directors to provide access to Company records and to indemnify
them. The indemnity relates to any liability as a result of being, or acting in their capacity as, an officer of the Company to
the maximum extent permitted by law; and for legal costs incurred in successfully defending civil or criminal proceedings.
No liability has arisen under these indemnities as at the date of this report.
(d) Proceedings on Behalf of the Company
To the best of the directors’ knowledge, no person has applied to the court under Section 237 of the Corporations Act 2001
for leave to bring proceedings on behalf of the Company, or to 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. No proceedings
have been brought or intervened on behalf of the Company with leave of the court under Section 237.
(e) Auditor
Stantons is the appointed auditor.
(f) Indemnity of Auditor
The auditor (Stantons) has not been indemnified under any circumstance.
(g) Audit Services
During the financial year $99,356 (excluding GST) was paid or payable for audit services provided by Stantons (2021: $80,186).
Non related audit firms have been paid or are payable $50,000 for audit services of subsidiaries (2021: $43,000).
(h) Non-audit Services
Non-audit services totaling Nil (2021: $25,000) were provided by the auditor or any entity associated with the auditor. The
fees during the prior year related to the preparation of an Independent Experts Report. The Board of Directors is satisfied
that the provision of non-audit services during the year is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
(i) Auditor’s independence declaration
A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act 2001 is set out on
page 70 of the Annual Report.
(j) Corporate Governance Statement
The directors of the Group support and adhere to the principles of corporate governance, recognising the need for the
highest standard of corporate behaviour and accountability. Please refer to the corporate governance statement dated 30
September 2020 released to ASX and posted on the Company’s website.
www.prospectresources.com.au/company/corporate-governance.
Signed in accordance with a resolution of the directors.
Sam Hosack
Managing Director
Perth, Western Australia
Dated 23 September 2022
23.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022Directors' Report Directors' Declaration
(1) In the opinion of the directors of Prospect Resources Limited (“the Company”):
(a) the accompanying financial statements, notes thereto are in accordance
with the Corporations Act 2001 including:
(i) giving a true and fair view of the consolidated entity’s financial position
as at 30 June 2022 and of its performance for the year then ended; and
(ii) complying with Australian Accounting Standards (including the
Australian Accounting Interpretations) and the Corporations
Regulations 2001;
(b) as set out in Note 2(c), there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and
payable;
(c) the financial statements and notes thereto are in accordance with
International Financial Reporting Standards issued by the International
Accounting Standards Board as stated in Note 2(a) to the financial
statements; and
(d) the audited remuneration disclosures set out on pages 16 to 22 of the
Directors’ Report comply with accounting standard AASB 124 Related Party
Disclosures and the Corporations Regulations 2001.
(2) This declaration has been made after receiving the declarations required to be
made to the directors in accordance with Section 295A of the Corporations Act
2001 for the financial year ended 30 June 2022.
This declaration is signed in accordance with a resolution of the Board of directors.
Sam Hosack
Managing Director
Perth, Western Australia
Dated 23 September 2022
24.
25.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Financial
Report
26.
Consolidated Statement of Profit or Loss
For the Year Ended 30 June 2022
Consolidated
Note
2022
$’000
2021 Restated (i)
$’000
Continuing operations
Revenue
Depreciation expense
Development costs expensed
Employee benefits expenses
Foreign currency loss - unrealised
Interest expense
Impairment of exploration expenditure
Impairment of assets
Occupancy expenses
5
13
14
10
Share based payment – options expense
21(a)
Other administrative expenses
(Loss) before income tax
5,650
417
(56)
(349)
(2,833)
(17,556)
(7)
(198)
-
(15)
(699)
(1,819)
(17,882)
(32)
(248)
(904)
-
(2)
-
(141)
(38)
(328)
(1,233)
(2,509)
Income tax expense
6
-
-
(Loss) from continuing operations
(17,882)
(2,509)
Profit / (loss) from discontinued operations (attributable to equity holders of
the Company)
22(c)
Profit / (loss) for the year
Profit / (loss) attributable to:
Equity holders of the Company
Non-controlling interests
(Loss) per share from continuing operations
Basic (loss) per share (cents)
Diluted (loss) per share (cents)
Profit / (loss) per share from discontinuing operations
Basic profit / (loss) per share (cents)
Diluted profit / (loss) per share (cents)
22(a)
31
31
31
31
415,389
397,507
397,573
(66)
397,507
(4.29)
(4.20)
100.06
97.91
(1,236)
(3,745)
(3,458)
(287)
(3,745)
(0.80)
(0.80)
(0.26)
(0.26)
(i) See Note 22(c) for details regarding the restatement of the prior period as a result of the discontinued operations reported during the
current period
The accompanying notes form part of these financial statements
27.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Consolidated Statement of Other Comprehensive Income
For the Year Ended 30 June 2022
Note
Consolidated
2022
$’000
2021 Restated (i)
$’000
397,507
(3,745)
Profit / (loss) for the period
Other comprehensive gain / (loss)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
Exchange differences on translation of discontinued operation
Other comprehensive gain / (loss) for the year net of tax
Total comprehensive gain / (loss) for the year
Total comprehensive gain / (loss) attributable to:
Equity holders of the Company
Non-controlling interests
22(b)
Total comprehensive income / (loss) for the year attributable
to Equity holders of the Company arising from
Continuing operations
Discontinuing operations
19,246
-
19,246
416,753
416,271
482
416,753
882
415,389
416,271
(189)
(2,010)
(2,199)
(5,944)
(5,784)
(160)
(5,944)
(2,883)
(2,901)
(5,784)
(i) See Note 22(c) for details regarding the restatement of the prior period as a result of the discontinued operations reported during the
current period
The accompanying notes form part of these financial statements
28.
Consolidated Statement of Financial Position
As at 30 June 2022
Consolidated
Note
2022
$’000
2021
$’000
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Assets held for sale
Other current assets
Total Current Assets
Non-Current Assets
Investment in listed securities
Property, plant and equipment
Exploration and evaluation expenditure
Mine properties
Intangible assets
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Lease liability
Provisions
Tax liabilities
Total Current Liabilities
Non-Current Liabilities
Lease liability
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Accumulated profits / (losses)
Total Equity Attributable to Shareholders of Parent Company
Non-controlling interests
Total Equity
The accompanying notes form part of these financial statements
8
9
10
11
12
13
14
15
16
17
18
19
6
18
19
474,288
473
-
47
474,808
12
282
486
-
-
780
475,588
1,131
36
125
-
1,292
-
37
37
1,329
7,877
553
-
282
8,712
18
526
91
25,605
308
26,548
35,260
930
43
94
-
1,067
33
204
237
1,304
474,259
33,956
101,344
28,790
345,025
475,159
(900)
474,259
76,647
11,239
(52,548)
35,338
(1,382)
33,956
20(b)
21(a), 21(c)
21(d)
22(a)
29.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Consolidated Statement of Cash Flows
For the Year Ended 30 June 2022
Notes
Cash flows from operating activities
Receipts from other income
Government tax credits and rebates
Payments to suppliers and employees
Payment for development costs expensed
Payments for exploration expenditure expensed
Income tax paid
Net cash (outflow) from operating activities
8(a)
Cash flows from investing activities
Interest received
Net proceeds from assets held for sale
Proceeds from sale of Penhalonga Gold Project
Payments for development costs
Loan from minority interest
Payment for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for exploration expenditure and acquisition of tenements
Payment for additional interest in subsidiary
Proceeds from sale of subsidiaries
Payments for costs associated with sale of subsidiaries (i)
Net cash inflow / (outflow) from investing activities
Cash flows from financing activities
Payment for lease
Interest paid
Proceeds from issue of shares
Proceeds from exercise of options
Capital raising costs
Net cash inflows from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rate changes on the balance of cash held in foreign
currencies
Consolidated
2021
$’000
13
55
(2,384)
(201)
-
-
(2,517)
4
266
335
2022
$’000
-
-
(5,189)
(363)
-
(5,552)
315
126
964
(3,984)
(3,449)
-
(242)
16
(592)
(1,187)
508,692
(51,883)
452,225
(34)
(6)
18,000
2,557
(793)
19,724
466,397
7,877
14
27
(88)
15
(91)
-
-
-
(2,981)
(13)
(2)
12,500
-
(801)
11,684
6,186
1,698
(7)
7,877
Cash and cash equivalents at end of year
8
474,288
(i) Included within payments for costs associated with sale of subsidiaries is US$26.9 million paid to ZIMRA for capital gains tax and US$8
million to Sinomine.
The accompanying notes form part of these financial statements
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OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 1. CORPORATE INFORMATION
The financial report of Prospect Resources Limited (“the
Company”) for the year ended 30 June 2022 was authorised
for issue in accordance with a resolution of the directors on
23 September 2022.
Prospect Resources Limited is a company limited by shares
and incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange.
date. Fair value for measurement and/or disclosure
purposes in these consolidated financial statements
is determined on such a basis, except for share-based
payment transactions that are within the scope of AASB 2:
Share Based Payments, leasing transactions that are within
the scope of AASB 16: Leases, and measurements that have
some similarities to fair value but are not fair value, such as
net realisable value in AASB 102: Inventories or value in use
in AASB 136: Impairment of Assets.
The financial statements comprise the consolidated
financial statements of the Company and its subsidiaries
(together the “Consolidated Entity” or “Group”). For
the purposes of preparing the consolidated financial
statements the Company is a for-profit entity.
The principal activity of the Group is exploration, evaluation
and development of mineral resources.
NOTE 2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The principal accounting policies adopted in the
preparation of the Financial Report are set out below.
These policies have been consistently applied to the years
presented, unless otherwise stated.
(a) Basis of Preparation
This general purpose Financial Report has been prepared
in accordance with the Corporations Act 2001, Accounting
Standards and Interpretations, and comply with other
requirements of law, unless stated otherwise.
Accounting Standards include Australian Standards,
compliance with Australian Accounting Standards ensures
that the financial statements and notes of the Company
and Group comply with International Financial Reporting
Standards (‘IFRS’).
It is recommended that this financial report be read in
conjunction with the public announcements made by
Prospect Resources Limited during the year in accordance
with the continuous disclosure requirements arising under
the Corporations Act 2001.
(i) Historical Cost Convention
These financial statements have been prepared under the
historical cost convention modified, where applicable, for
financial assets and financial liabilities carried at fair value.
Fair value is 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,
regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating
the fair value of an asset or a liability, the Group takes into
account the characteristics of the asset or liability if market
participants would take those characteristics into account
when pricing the asset or liability at the measurement
In addition, for financial reporting purposes, fair value
measurements are categorised into Level 1, 2 or 3 based
on the degree to which the inputs to the fair value
measurements are observable and the significance of the
inputs to the fair value measurement in its entirety, which
are described as follows:
•
•
•
Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity
can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the asset
or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or
liability.
(ii) Critical Accounting Estimates
The preparation of financial statements in conformity
with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise
its judgment in the process of applying the Group’s
accounting policies. Where these are areas involving a
higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the financial
statements, these are disclosed in Note 2(z).
(iii) Comparative Figures
When required by accounting standards, comparative
figures have been adjusted to conform to changes in
presentation for the current year. When the Group applies
an accounting policy retrospectively, makes a retrospective
restatement or reclassifies items in its financial statements,
a statement of financial position as at the beginning of
the earliest comparative period will be disclosed. The
comparative results in the statement of profit and loss and
other comprehensive income have been restated to show
the effect of discontinued operations.
(b) Principles of Consolidation
The consolidated financial statements incorporate
the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is
achieved when the Company:
• has power over the investee;
•
is exposed, or has rights, to variable returns from its
involvement with the investee; and
• has the ability to use its power to affect its returns.
32.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(b) Principles of Consolidation (Continued)
The Company reassesses whether or not it controls an
investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control
listed above.
When the Company has less than a majority of the voting
rights of an investee, it has power over the investee when
the voting rights are sufficient to give it the practical
ability to direct the relevant activities of the investee
unilaterally. The Company considers all relevant facts and
circumstances in assessing whether or not the Company’s
voting rights in an investee are sufficient to give it power,
including:
•
the size of the Company’s holding of voting rights
relative to the size and dispersion of holdings of the
other vote holders;
• potential voting rights held by the Company, other vote
holders or other parties;
•
•
rights arising from other contractual arrangements;
and
any additional facts and circumstances that indicate
that the Company has, or does not have, the current
ability to direct the activities at the time that decisions
need to be made, including voting patterns at previous
shareholders’ meetings.
Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. Specifically,
income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated
statement of profit or loss and other comprehensive
income from the date the Company gains control until the
date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive
income are attributed to the owners of the Company and
to the non-controlling interests. Total comprehensive
income of subsidiaries is attributed to the owners of the
Company and to the non-controlling interests even if this
results in the non-controlling interests having a deficit
balance.
When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
(c) Going Concern
These accounts have been prepared on the going concern
basis, as the directors believe the Group’s cash balances
of $474.3 million at 30 June 2022 is sufficient to fund its
business for the foreseeable future.
Subsequent to year end (in August 2022), the directors
declared and paid a dividend and capital distribution of
$443.8 million. The directors believe cash holdings of the
Group post distribution of approximately $33 million are
sufficient to fund future planned operations of the Group.
(d) Application of New and Revised Accounting
Standards
The Group has considered the implications of new and
amended Accounting Standards which have become
applicable for the current financial reporting period.
(i) AASB 2021-3: Amendments to Australian Accounting
Standards – COVID-19 Related Rent Concessions
beyond 30 June 2021
The Group has applied AASB 2021-3: Amendments to
Australian Accounting Standards – COVID-19-Related Rent
Concessions beyond 30 June 2021 this reporting period.
The amendment amends AASB 16 to extend by one year,
the application of the practical expedient added to AASB
16 by AASB 2020-4: Amendments to Australian Accounting
Standards – COVID-19-Related Rent Concessions. The
practical expedient permits lessees not to assess whether
rent concessions that occur as a direct consequence of the
COVID-19 pandemic and meet specified conditions are
lease modifications and instead, to account for those rent
concessions as if they were not lease modifications. The
amendment has not had a material impact on the Group’s
financial statements.
(ii) AASB 2020-8: Amendments to Australian Accounting
Standards – Interest Rate Benchmark Reform – Phase 2
The Group has applied AASB 2020-8 which amends
various standards to help listed entities to provide financial
statement users with useful information about the effects
of the interest rate benchmark reform on those entities’
financial statements. As a result of these amendments, an
entity:
• will not have to derecognise or adjust the carrying
amount of financial statements for changes required by
the reform, but will instead update the effective interest
rate to reflect the change to the alternative benchmark
rate;
• will not have to discontinue its hedge accounting solely
because it makes changes required by the reform, if the
hedge meets other hedge accounting criteria; and
• will be required to disclose information about new
risks arising from the reform and how it manages
the transition to alternative benchmark rates. The
amendment has not had a material impact on the
Group’s financials.
(e) New and Revised Accounting Standards for
Application in Future Periods
New and revised accounting standards not yet adopted by
the Group include the following:
33.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(i) AASB 2020-1: Amendments to Australian Accounting
(i) Sale of Goods
Standards – Classification of Liabilities as Current or
Non-current
The amendment amends AASB 101 to clarify whether a
liability should be presented as current or non-current.
The Group plans on adopting the amendment for the
reporting period ending 30 June 2024. The amendment
is not expected to have a material impact on the financial
statements once adopted.
(ii) AASB 2020-3: Amendments to Australian Accounting
Standards – Annual Improvements 2018-2020 and
Other Amendments
AASB 2020-3: Amendments to Australian Accounting
Standards – Annual Improvements 2018-2020 and Other
Amendments is an omnibus standard that amends AASB
1, AASB 3, AASB 9, AASB 116, AASB 137 and AASB 141. The
Group plans on adopting the amendment for the reporting
period ending 30 June 2023. The impact of the initial
application is not yet known.
(iii) AASB 2021-2: Amendments to Australian Accounting
Standards – Disclosure of Accounting Policies and
Definition of Accounting Estimates
The amendment amends AASB 7, AASB 101, AASB
108, AASB 134 and AASB Practice Statement 2. These
amendments arise from the issuance by the IASB of the
following International Financial Reporting Standards:
Disclosure of Accounting Policies (Amendments to
IAS 1 and IFRS Practice Statement 2) and Definition of
Accounting Estimates (Amendments to IAS 8).
The Group plans on adopting the amendment for the
reporting period ending 30 June 2024. The impact of the
initial application is not yet known.
(iv) AASB 2021-5: Amendments to Australian Accounting
Standards – Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
The amendment amends the initial recognition exemption
in AASB 112: Income Taxes such that it is not applicable to
leases and decommissioning obligations – transactions for
which companies recognise both an asset and liability and
that give rise to equal taxable and deductible temporary
differences. The Group plans on adopting the amendment
for the reporting period ending 30 June 2024. The impact
of the initial application is not yet known.
The directors believe that there are no new Standards and
Interpretations that will impact the Group.
(f) Revenue Recognition
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is reduced for estimated
customer returns, rebates and other similar allowances.
Revenue from sale of goods in the course of ordinary
activities is brought to account when delivered to
the customer and selling prices are known or can be
reasonably estimated. For spodumene and petalite
concentrate sales, the above conditions are generally
satisfied when title passes to the customer, typically on the
bill of lading date when the concentrate is delivered to the
vessel. For gold, this is generally when the gold is credited
to the metal account of the customer.
(ii) Government Tax Credits and Rebates
Government tax credits and rebates, inclusive of research
and development tax credit, are recognised as income at
their fair value where there is a reasonable assurance that
the government tax credit or rebate will be received and
the Group will comply with all attached conditions.
(iii) Interest Income
Interest revenue is recognised on a time proportionate
basis using the effective interest method.
(iv) Gain on Sale of Penhalonga Gold Project and Disposal
of Mine Properties
A gain or loss is recognised on the disposal of the
Penhalonga Gold Project and Mine Properties at the
time of sale. The gain or loss arising on the disposal is
determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in
profit or loss.
(v) Gain on Assets Held for Sale
A gain or loss is recognised on the disposal of assets
held for sale. Any gain or loss arising on the disposal is
determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in
profit or loss.
(g) Cash and Cash Equivalents
For statement of cash flow presentation purposes, cash
and cash equivalents includes cash on hand, deposits
held at call with banks, other short-term highly liquid
investments with original maturities of three months or
less, and bank overdrafts.
(h)
Income Tax
The income tax expense or revenue for the period is the tax
payable on a current period’s taxable income based on the
income tax rate adjusted by changes in deferred tax assets
and liabilities attributable to temporary differences and to
unused tax losses.
34.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h)
Income Tax (Continued)
Deferred tax is accounted for using the liability method in
respect of temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts
in the financial statements. No deferred income tax will
be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is
no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected
to apply to the period when the asset is realised or liability
is settled. Deferred tax is credited in the income statement
except where it relates to items that may be credited
directly to equity, in which case the deferred tax is adjusted
directly against equity. Deferred income tax assets are
recognised for deductible temporary differences and
unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary
differences and tax losses.
(i) Trade and Other Receivables
(i) Trade Receivables
Trade receivables are amounts due from customers
for goods sold or services performed in the ordinary
course of business. They are generally due for settlement
within 30 days and therefore are all classified as current.
Trade receivables are recognised initially at the amount
of consideration that is unconditional unless they
contain significant financing components, when they
are recognised at fair value. The Group holds the trade
receivables with the objective to collect the contractual
cash flows and therefore measures them subsequently at
amortised cost using the effective interest method. Details
about the Group’s impairment policies and the calculation
of the loss allowance are provided in Note 2(y).
(ii) Other Receivables
Other receivables are recognised at fair value and
subsequently measured at amortised cost, less provision
for impairment.
(j) Assets Held For Sale
Non-current assets are classified as held for sale if their
carrying amount will be recovered principally through
a sale transaction rather than continued use. They are
measured at the lower of their carrying amount and fair
value less costs of disposal. For non-current assets to
be classified as held for sale, they must be available for
immediate sale in their present condition and their sale
must be highly probable.
An impairment loss is recognised for any initial or
subsequent write down of the non-current asset to fair
value less costs of disposal. A gain is recognised for any
subsequent increases in fair value less costs of disposal of
a non-current asset, but not in excess of any cumulative
impairment loss previously recognised.
Non-current assets are not depreciated or amortised
while they are classified as held for sale. Interest and other
expenses attributable to the liabilities of assets held for sale
continue to be recognised.
Non-current assets classified as held for sale are presented
separately on the face of the statement of financial
position, in current assets.
(k) Property, Plant and Equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment
losses. Depreciation is recognised so as to write off the cost
or valuation of assets less their residual values over their
useful lives, using the straight-line method. The estimated
useful lives, residual values and depreciation method
are reviewed at the end of each reporting period, with
the effect of any changes in estimate accounted for on a
prospective basis.
Depreciation rates and methods shall be reviewed at least
annually and, where changed, shall be accounted for as a
change in accounting estimate. During the current year, the
directors determined that the useful lives of each class of
asset are:
• Buildings - 20 to 40 years
•
Leasehold improvements - 2 years
• Right to use assets - 2 years
• Plant and equipment - 5 to 15 years
• Office equipment and furniture and fittings - 3 to 5 years
• Vehicles - 5 years
Where depreciation rates or methods are changed, the
net written down value of the asset is depreciated from
the date of the change in accordance with the new
depreciation rate or method. Depreciation recognised
in prior financial years shall not be changed, that is, the
change in depreciation rate or method shall be accounted
for on a ‘prospective’ basis.
An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any
gain 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 or loss.
35.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(l) Exploration expenditure
Exploration and evaluation expenditure incurred on
granted exploration licences is accumulated in respect of
each identifiable area of interest. These costs are carried
forward where the rights to tenure of the area of interest
are current and to the extent that they are expected to
be recouped through the successful development of the
area or where activities in the area have not yet reached a
stage that permits reasonable assessment of the existence
of economically recoverable reserves. Accumulated costs
in relation to any abandoned area will be written off in
full against profit in the period in which the decision to
abandon the area is made. When production commences,
the accumulated costs for the relevant area of interest will
be amortised over the life of the area of interest according
to the rate of depletion of the economically recoverable
reserves. A regular review will be undertaken of each area
of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest.
(m) Mine Properties
(i) Mines Under Construction
Expenditure is transferred from ’Exploration and evaluation
assets’ to ’Mines under construction’ which is a subcategory
of ’Mine properties’ once the work completed to date
supports the future development of the property and such
development receives appropriate approvals.
After transfer of the exploration and evaluation assets, all
subsequent expenditure on the construction, installation,
or completion of infrastructure facilities recognised in
’Mines under construction’. Development expenditure is
net of proceeds from the sale of ore extracted during the
development phase to the extent that it is considered
integral to the development of the mine. Any costs
incurred in testing the assets to determine if they are
functioning as intended, are capitalised, net of any
proceeds received from selling any product produced
while testing. Where these proceeds exceed the cost of
testing, any excess is recognised in the statement of profit
or loss and other comprehensive income. After production
starts, all assets included in ‘Mines under construction’ are
then transferred to ’Producing mines’ which is also a sub-
category of ’Mine properties’.
(ii) Mine Properties and Property, Plant and Equipment
•
Initial Recognition
Upon completion of the mine construction phase, the assets
are transferred into “Property, plant and equipment” or
“Mine properties”. Items of property, plant and equipment
and producing mine are stated at cost, less accumulated
depreciation and accumulated impairment losses.
The initial cost of an asset comprises its purchase price
or construction cost, any costs directly attributable to
bringing the asset into operation, the initial estimate of
the rehabilitation obligation, and, for qualifying assets
(where relevant), borrowing costs. The purchase price
or construction cost is the aggregate amount paid and
the fair value of any other consideration given to acquire
the asset. The capitalised value of a finance lease is also
included in property, plant and equipment.
Mine properties also consist of the fair value attributable
to mineral reserves and the portion of mineral resources
considered to be probable of economic extraction at the
time of an acquisition. When a mine construction project
moves into the production phase, the capitalisation
of certain mine construction costs ceases, and costs
are either regarded as part of the cost of inventory or
expensed, except for costs which qualify for capitalisation
relating to mining asset additions, improvements or new
developments, mine development or mineable reserve
development.
• Depreciation / Amortisation
Accumulated mine development costs are depreciated/
amortised on a Unit Of Production (UOP) basis over the
economically recoverable reserves of the mine concerned,
except in the case of assets whose useful life is shorter
than the life of the mine, in which case, the straight-line
method is applied. The unit of account for run-of-mine
(ROM) costs is tonnes of ore, whereas the unit of account
for post-ROM costs are recoverable tonnes of Li2O. Rights
and concessions are depleted on the UOP basis over
the economically recoverable reserves of the relevant
area. The UOP rate calculation for the depreciation/
amortisation of mine development costs takes into
account expenditures incurred to date, together with
sanctioned future development expenditure. Economically
recoverable reserves include proven and probable reserves.
The estimated fair value attributable to the mineral
reserves and the portion of mineral resources considered
to be probable of economic extraction at the time of the
acquisition is amortised on a UOP basis whereby the
denominator is the proven and probable reserves, and
for some mines, a portion of mineral resources which are
expected to be extracted economically. These other mineral
resources may be included in depreciation calculations in
limited circumstances and where there is a high degree
of confidence in their economic extraction. This would
be the case when the other mineral resources do not yet
have the status of reserves merely because the necessary
detailed evaluation work has not yet been performed and
the responsible technical personnel agree that inclusion
of a proportion of measured and indicated resources is
appropriate based on historic reserve conversion rates.
36.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The estimated fair value of the mineral resources that are
not considered to be probable of economic extraction at
the time of the acquisition is not subject to amortisation,
until the resource becomes probable of economic
extraction in the future and is recognised in exploration
and evaluation assets.
The premium paid in excess of the intrinsic value of land to
gain access is amortised over the life of the mine.
Other plant and equipment, such as mobile mine
equipment, is generally depreciated on a straight-line basis
over their estimated useful lives, as follows:
• Buildings - 20 to 40 years
• Plant and equipment - 5 to 15 years
• Office equipment and furniture and fittings - 3 to 5 years
• Vehicles - 5 years
An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the asset) is included in statement of profit or
loss and other comprehensive income when the asset is
derecognised.
The asset’s residual values, useful lives and methods of
depreciation/amortisation are reviewed at each reporting
period and adjusted prospectively, if appropriate.
•
Stripping (Waste Removal) Costs
As part of its mining operations, the Group incurs stripping
(waste removal) costs both during the development phase
and production phase of its operations. Stripping costs
incurred in the development phase of a mine, before the
production phase commences (development stripping),
are capitalised as part of the cost of constructing the mine
and subsequently amortised over its useful life using a UOP
method. The capitalisation of development stripping costs
ceases when the mine/component is commissioned and
ready for use as intended by management.
Stripping activities undertaken during the production
phase of a surface mine (production stripping) are
accounted for as set out below. After the commencement
of production, further development of the mine may
require a phase of unusually high stripping that is similar
in nature to development phase stripping. The cost of such
stripping is accounted for in the same way as development
stripping (as outlined above).
Production stripping is generally considered to create
two benefits, being either the production of inventory
or improved access to the ore to be mined in the future.
Where the benefits are realised in the form of inventory
produced in the period, the production stripping costs
are accounted for as part of the cost of producing those
inventories. Where the benefits are realised in the form
of improved access to ore to be mined in the future, the
costs are recognised as a non-current asset, referred to as a
‘stripping activity asset’, if the following criteria are met:
• Future economic benefits (being improved access to
the ore body) are probable
•
•
The component of the ore body for which access will be
improved can be accurately identified
The costs associated with the improved access can be
reliably measured
If any of the criteria are not met, the production stripping
costs are charged to profit or loss as operating costs as
they are incurred. In identifying components of the ore
body, the Group works closely with the mining operations
personnel for each mining operation to analyse each of the
mine plans. Generally, a component will be a subset of the
total ore body, and a mine may have several components.
The mine plans, and therefore the identification of
components, can vary between mines for a number of
reasons. These include, but are not limited to: the type of
commodity, the geological characteristics of the ore body,
the geographical location, and/or financial considerations.
Given the nature of the Group’s operations, components
are generally either major pushbacks or phases and they
generally form part of a larger investment decision which
requires board approval.
The stripping activity asset is initially measured at cost,
which is the accumulation of costs directly incurred to
perform the stripping activity that improves access to the
identified component of ore, plus an allocation of directly
attributable overhead costs. If incidental operations are
occurring at the same time as the production stripping
activity, but are not necessary for the production stripping
activity to continue as planned, these costs are not
included in the cost of the stripping activity asset.
If the costs of the inventory produced and the stripping
activity asset are not separately identifiable, a relevant
production measure is used to allocate the production
stripping costs between the inventory produced and
the stripping activity asset. This production measure is
calculated for the identified component of the ore body
and is used as a benchmark to identify the extent to which
the additional activity of creating a future benefit has
taken place. The Group uses the expected volume of waste
extracted compared with the actual volume for a given
volume of ore production of each component.
37.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The stripping activity asset is accounted for as an addition
to, or an enhancement of, an existing asset, being the
mine asset, and is presented as part of ’Mine properties’ in
the statement of financial position. This forms part of the
total investment in the relevant cash generating unit(s),
which is reviewed for impairment if events or changes of
circumstances indicate that the carrying value may not be
recoverable.
The stripping activity asset is subsequently depreciated
using the UOP method over the life of the identified
component of the ore body that became more accessible
as a result of the stripping activity. Economically
recoverable reserves, which comprise proven and probable
reserves, are used to determine the expected useful life of
the identified component of the ore body. The stripping
activity asset is then carried at cost less depreciation and
any impairment losses.
Group during the period.
All other borrowing costs are recognised in the statement
of profit or loss and other comprehensive income in the
period in which they are incurred.
Intangible Assets - Software
Costs associated with maintaining software programmes
are recognised as an expense as incurred. The cost
of purchasing software, and development costs that
are directly attributable to the design and testing of
identifiable and unique software products controlled by
the Group are recognised as intangible assets where the
following criteria are met:
•
it is technically feasible to complete the software so that
it will be available for use
• management intends to complete the software and
• Major Maintenance and Repairs
use or sell it
Expenditure on major maintenance refits or repairs
comprises the cost of replacement assets or parts of assets
and overhaul costs. Where an asset, or part of an asset,
that was separately depreciated and is now written off is
replaced, and it is probable that future economic benefits
associated with the item will flow to the Group through an
extended life, the expenditure is capitalised.
Where part of the asset was not separately considered as a
component and therefore not depreciated separately, the
replacement value is used to estimate the carrying amount
of the replaced asset(s) which is immediately written off.
All other day-to-day maintenance and repairs costs are
expensed as incurred.
• Borrowing Costs
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale (a qualifying asset) are capitalised as
part of the cost of the respective asset. Borrowing costs
consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
Where funds are borrowed specifically to finance a project,
the amount capitalised represents the actual borrowing
costs incurred. Where surplus funds are available for a short
term from funds borrowed specifically to finance a project,
the income generated from the temporary investment of
such amounts is also capitalised and deducted from the
total capitalised borrowing cost. Where the funds used
to finance a project form part of general borrowings, the
amount capitalised is calculated using a weighted average
of rates applicable to relevant general borrowings of the
•
•
•
•
there is an ability to use or sell the software
it can be demonstrated how the software will generate
probable future economic benefits
adequate technical, financial and other resources
to complete the development and to use or sell the
software are available, and
the expenditure attributable to the software during its
development can be reliably measured.
Directly attributable costs that are capitalised as part of
the software include employee costs and an appropriate
portion of relevant overheads. Capitalised development
costs are recorded as intangible assets and amortised from
the point at which the asset is ready for use.
The Group amortises intangible assets with a limited useful
life, using the straight-line method over the following
periods:
•
IT development and software 17 years
(n)
Investments in Associates
An associate is an entity over which the Group has
significant influence. Significant influence is the power to
participate in the financial and operating policy decisions
of the entity but is not control or joint control those
policies. Investments in associates are accounted for in
the consolidated financial statements by applying the
equity method of accounting, whereby the investment
is initially recognised at cost (including transaction costs)
and adjusted thereafter for the post-acquisition change in
the Group’s share of net assets of the associate. In addition,
the Group’s share of the profit or loss of the associate is
included in the Group’s profit or loss.
38.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The carrying amount of the investment includes, when
applicable, goodwill relating to the associate. Any discount
on acquisition, whereby the Group’s share of the net fair
value of the associate exceeds the cost of investment,
is recognised in profit or loss in the period in which the
investment is acquired.
The right-of-use asses comprise the initial measurement
of the corresponding lease liability, any lease payments
made at or before the commencement date and any initial
direct costs. The subsequent measurement of the right-
of-use assets is at cost less accumulated depreciation and
impairment losses.
Profits and losses resulting from transactions between the
Group and the associate are eliminated to the extent of the
Group’s interest in the associate.
When the Group’s share of losses in the associate equals or
exceeds its interest in the associate, the Group discontinues
recognising its share of losses unless it has incurred legal
or constructive obligations or made payments on behalf
of the associate. When the associate subsequently makes
profits, the Group will resume recognising its share of those
profits once its share of the profits equals the share of the
losses not recognised.
(o) Leases – The Group as Lessee
At inception of a contract the Group assesses if the contract
contains or is a lease. If there is a lease present, a right-
of-use asset and a corresponding liability are recognised
by the Group where the Group is a lessee. However, all
contracts that are classified as short-term leases (i.e. leases
with a remaining lease term of 12 months or less) and
leases of low-value assets are recognised as an operating
expense on a straight-line basis over the term of the lease.
Initially, the lease liability is measured at the present
value of the lease payments still to be paid at the
commencement date. The lease payments are discounted
at the interest rate implicit in the lease. If this rate cannot
be readily determined, the Group uses incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability are as follows;
• Fixed lease payments less any lease incentives;
•
•
•
•
variable lease payments that depend on index or
rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee under
residual value guarantees;
the exercise price of purchase options if the lessee is
reasonably certain to exercise the options;
lease payments under extension options, if the lessee is
reasonably certain to exercise the options; and
• payments of penalties for terminating the lease, if the
lease term reflects the exercise of options to terminate
the lease.
Right-of-use assets are depreciated over the lease term or
useful life of the underlying asset, whichever is the shortest.
Where a lease transfers ownership of the underlying asset
or the costs of the right-of-use asset reflects that the Group
anticipates to exercise a purchase option, the specific asset
is depreciated over the useful life of the underlying asset.
(p) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
(i) Provision for Site Restoration and Rehabilitation
In accordance with the Group’s environmental policy
and applicable legal requirements, a provision for site
restoration and rehabilitation in respect of disturbed land is
recognised when the land is disturbed.
The provision is the best estimate of the present value
of the expenditure required to settle the restoration and
rehabilitation obligation at the reporting date, based
on current legal requirements and technology. Future
restoration and rehabilitation costs are reviewed annually,
and any changes are reflected in the present value of the
restoration and rehabilitation provision at the end of the
reporting period. The unwinding of the effect of discounting
on the provision is recognised as a finance cost.
(ii) Provision for Employee Entitlements
Provision is made for employee entitlements accumulated
as a result of employees rendering services up to the end
of the reporting period. These benefits include wages,
salaries, annual leave and long service leave. Liabilities
in respect of employees’ services rendered that are not
expected to be wholly settled within one year after the end
of the period in which the employees render the related
services recognised as long-term employee benefits.
These liabilities are measured at the present value of the
estimated future cash outflow to the employees using the
projected unit credit method. Liabilities expected to be
wholly settled within one year after the end of the period
in which the employees render the related services are
classified as short-term benefits and are measured at the
amount due to be paid.
39.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(q) Trade and Other Payables
Financial Assets at Amortised Cost
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured and usually
paid within 30 days of recognition.
Financial assets are measured at amortised cost if the
assets meet with the following conditions (and are not
designated as FVPL);
(r) Financial Instruments
(i) Recognition, Initial Measurement and Derecognition
Financial assets and financial liabilities are recognised
when the Group becomes a party to the contractual
provisions of the financial instrument. Financial
instruments (except for trade receivables) are measured
initially at fair value adjusted by transaction costs, except for
those carried at ‘fair value through profit or loss’, in which
case transaction costs are expensed to profit or loss. Where
available, quoted prices in an active market are used to
determine the fair value. In other circumstances, valuation
techniques are adopted. Subsequent measurement of
financial assets and financial liabilities are described below.
Trade receivables are initially measured at the transaction
price if the receivables do not contain a significant
financing component in accordance with AASB 15.
Financial assets are derecognised when the contractual
rights to the cash flows from the financial asset expire,
or when the financial asset and all substantial risks and
rewards are transferred. A financial liability is derecognised
when it is extinguished, discharged, cancelled, or expired.
(ii) Classification and Measurement
• Financial Assets
Except for those trade receivables that do not contain a
significant financing component and are measured at the
transaction price in accordance with AASB 15, all financial
assets are initially measured at fair value adjusted for
transaction costs (where applicable).
For the purpose of subsequent measurement, financial
assets other than those designated and effective as
hedging instruments are classified into the following
categories upon initial recognition:
•
•
•
amortised cost;
fair value through other comprehensive income
(FVOCI); and
fair value through profit or loss (FVPL).
Classifications are determined by both:
•
•
the contractual cash flow characteristics of the financial
assets; and
the Group’s business model for managing the financial
asset.
•
•
they are held within a business model whose objective
is to hold the financial assets and collect its contractual
cash flows; and
the contractual terms of the financial assets give rise
to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
After initial recognition, these are measured at amortised
cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The
Group’s cash and cash equivalents, trade and most other
receivables fall into this category of financial instruments.
Financial Assets at Fair Value Through Other
Comprehensive Income
The Group measures debt instruments at fair value
through OCI if both of the following conditions are met:
•
•
the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments
of principal and interest on the principal amount
outstanding; and
the financial asset is held within a business model with
the objective of both holding to collect contractual cash
flows and selling the financial asset.
For debt instruments at fair value through OCI, interest
income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit
or loss and computed in the same manner as for financial
assets measured at amortised cost. The remaining fair
value changes are recognised in OCI.
Upon initial recognition, the Group can elect to classify
irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the
definition of equity under AASB 132 Financial Instruments:
Presentation and are not held for trading.
Financial Assets at Fair Value Through Profit or Loss (FVPL)
Financial assets at fair value through profit or loss include
financial assets held for trading, financial assets designated
upon initial recognition at fair value through profit or loss or
financial assets mandatorily required to be measured at fair
value. Financial assets are classified as held for trading if they
are acquired for the purpose of selling or repurchasing in the
near term.
40.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The Group assesses on a forward looking basis the
expected credit losses associated with its debt instruments
carried at amortised cost and FVOCI. The impairment
methodology applied depends on whether there has been
a significant increase in credit risk. For trade receivables,
the Group applies the simplified approach permitted
by AASB, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
investment in the foreign operation).
Exchange differences arising on the translation of
non-monetary items are recognised directly in other
comprehensive income to the extent that the underlying
gain or loss is recognised in other comprehensive income,
otherwise the exchange difference is recognised in the
profit or loss.
• Financial Liabilities
(iii) Group Companies
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs unless the
Group designated a financial liability at fair value through
profit or loss.
Subsequently, financial liabilities are measured at
amortised cost using the effective interest method except
for derivatives and financial liabilities designated at FVPL,
which are carried subsequently at fair value with gains or
losses recognised in profit or loss.
All interest-related charges and, if applicable, gains and
losses arising on changes in fair value are recognised in
profit or loss.
(s) Foreign Currency Transactions and Balances
The financial results and position of foreign operations
whose functional currency is different from the Group’s
presentation currency are translated as follows:
• Assets and liabilities are translated at exchange rates
prevailing at the end of the reporting period;
•
Income and expenses are translated at average
exchange rates for the period and/or at the exchange
rate prevailing on the date of the actual transaction; and
• Retained earnings are translated at the exchange rates
prevailing at the date of the transaction.
Exchange differences arising on translation of foreign
operations with functional currencies other than the
Australian dollar are recognised in other comprehensive
income and included in the foreign currency translation
reserve in the statement of financial position. The cumulative
amount of these differences is reclassified into profit or loss
in the period in which the operation is disposed of.
(i) Functional and Presentation Currency
(t) Contributed equity
The functional currency of each of the Group’s entities is
measured using the currency of the primary economic
environment in which that entity operates. The consolidated
financial statements are presented in Australian dollars
which is the parent entity’s functional currency. The
functional currency of all subsidiaries other than Thornvlei
Farming Enterprises (Pvt) Limited (Thornvlei) is US dollars.
Thornvlei’s functional currency is Zimbabwe Dollars.
Prospect Lithium Zimbabwe (Pvt) Limited and Thornvlei
were disposed during the year ended 30 June 2022.
(ii) Transaction and Balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the date of the transaction. Foreign currency monetary items
are translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried
at the exchange rate at the date of the transaction. Non-
monetary items measured at fair value are reported at the
exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of
monetary items are recognised in profit or loss, except
where deferred in equity when the exchange difference
arises on monetary items receivable from or payable to a
foreign operation for which settlement is neither planned
nor likely to occur (therefore forming part of the net
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options
are shown in equity as a deduction from the proceeds.
(u) Earnings per share
Basic earnings per share (“EPS”) is calculated by dividing
the result attributable to equity holders of the Company
by the weighted number of shares outstanding during the
year. Diluted EPS adjusts the figures used in the calculation
of basic EPS to take into account the after income tax
effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average
number of shares assumed or known to have been issued
in relation to dilutive potential ordinary shares.
(v) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Office. In these
circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
Receivables and payables in the balance sheet are shown
inclusive of GST. Cash flows are presented in the statement
of cash flow on a gross basis, except for the GST component
of investing and financing activities, which are disclosed as
operating cash flows.
41.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(w) Dividends
Provision is made for the amount of any dividend declared,
being appropriately authorised and no longer at the
discretion of the Company, on or before the end of the
financial year but not distributed at balance date.
(x)
Impairment of Assets
At each reporting date, the Group reviews the carrying
values of its tangible and intangible assets to determine
whether there is any indication that those assets have
been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair
value less cost to sell and value in use, is compared to the
asset’s carrying value. Any excess of the asset’s carrying
value over its recoverable amount is expensed to the
Statement of profit or loss.
Impairment testing is performed annually for intangible
assets with indefinite lives.
(y) Share based payment transactions - Equity
Settled Transactions
The Company provides benefits to its employees (including
key management personnel) in the form of share based
payments, whereby employees render services in exchange
for shares or rights over shares (equity settled transactions).
The cost of these equity settled transactions with
employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted.
The charge to the statement of profit or loss and other
comprehensive income is taken when the options are
granted. There is a corresponding entry to equity.
The dilutive effect, if any, of outstanding options is reflected
as additional share dilution in the computation of diluted
earnings per share.
(z) Critical Accounting Judgement and Key Sources
of Uncertainty
In the application of the Group’s accounting policies which
are described above in Note 2, the Directors are required
to make judgements, estimates and assumptions about
the carrying amounts 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 affect only that period, or in the period of
the revision and future periods of the revision affects both
current and future periods.
Key Estimates
(i) Ore reserves
Economically recoverable Ore Reserves represent the
estimated quantity of product in an area of interest that
can be expected to be profitably extracted, processed and
sold under current and foreseeable economic conditions.
The Group determines and reports ore reserves under
the standards incorporated in the Australasian Code for
Reporting Exploration Results, Mineral Resources and Ore
Reserves, 2012 Edition (the JORC Code). The determination
of Ore Reserves includes estimates and assumptions about
a range of geological, technical and economic factors,
including: quantities, grades, productions techniques,
recovery rates, production costs, transport costs,
commodity demand, commodity prices and exchange
rates. Changes in Ore Reserves impact the assessment of
recoverability of exploration and evaluation assets, property,
plant and equipment, the carrying amount of assets
depreciated on a units of production basis, provision for
site restoration and the recognition of deferred tax assets,
including tax losses.
(ii) Exploration an Evaluation Expenditure
The application of the Group’s accounting policy
for exploration and evaluation expenditure requires
judgement to determine whether future economic
benefits are likely, from either future exploitation or sale, or
whether activities have not reached a stage that permits a
reasonable assessment of the existence of reserves.
In addition to applying judgement to determine
whether future economic benefits are likely to arise
from the Group’s Exploration & Evaluation assets or
whether activities have not reached a stage that permits
a reasonable assessment of the existence of reserves,
the Group has to apply a number of estimates and
assumptions. The estimates directly impact when the
Group defers exploration and evaluation expenditure. The
deferral policy requires management to make certain
estimates and assumptions about future events and
circumstances, particularly, whether an economically
viable extraction operation can be established. Any
such estimates and assumptions may change as new
information becomes available. If, after expenditure is
capitalised, information becomes available suggesting
that the recovery of expenditure is unlikely, the relevant
capitalised amount is written off in the statement of profit
or loss and other comprehensive income in the period
when the new information becomes available.
42.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(iii) Mine Properties
(v) Share Based Payments
Estimated economically recoverable reserves are used in
determining the depreciation and/or amortisation of mine-
specific assets. This results in a depreciation/amortisation
charge proportional to the depletion of the anticipated
remaining life-of-mine production. The life of each item,
which is assessed at least annually, has regard to both
its physical life limitations and present assessments of
economically recoverable reserves of the mine property at
which the asset is located. These calculations require the
use of estimates and assumptions, including the amount
of recoverable reserves and estimates of future capital
expenditure. The calculation of the Unit of Production
(“UOP”) rate of depreciation/amortisation could be
impacted to the extent that actual production in the
future is different from current forecast production based
on economically recoverable reserves, or if future capital
expenditure estimates change. Changes to economically
recoverable reserves could arise due to changes in the
factors or assumptions used in estimating reserves,
including:
•
The effect on economically recoverable reserves of
differences between actual commodity prices and
commodity price assumptions
• Unforeseen operational issues
The fair value of employee share options and share
appreciation rights is measured using Black Scholes.
Measurement inputs include share price on measurement
date, exercise price of the instrument, expected volatility
(based on weighted average historic volatility adjusted for
changes expected due to publicly available information),
weighted average expected life of the instruments
(based on historical experience and general option holder
behaviour), expected dividends, the risk-free interest rate
(based on government bonds) and probability applied
to the non-vesting conditions (based on management’s
judgement formed in consideration of all the available facts
and circumstances).
Service and non-market performance conditions
attached to the transactions are not taken into account
in determining fair value. Any different estimates and
assumptions affecting the measurement inputs would
have resulted in different grant date fair values, which
would have changed equity settled share-based payments
expense. Subsequent changes to this estimate could have
a significant effect on share based payment expense and
the associated equity-settled payments reserve. The fair
value calculation and inputs to the Black Scholes model are
shown at Note 24(a).
Changes in estimates are accounted for prospectively.
(vi) Impairment
(iv) Rehabilitation Provision
The ultimate rehabilitation costs are uncertain, and cost
estimates can vary in response to many factors, including
estimates of the extent and costs of rehabilitation activities,
technological changes, and regulatory changes. These
uncertainties may result in future actual expenditure
differing from the amounts currently provided. Therefore,
significant estimates and assumptions are made in
determining the provision for mine rehabilitation. As
a result, there could be significant adjustments to
the provisions established which would affect future
financial result. The provision at reporting date represents
management’s best estimate of the present value of the
future rehabilitation costs required.
The future recoverability of capitalised exploration and
evaluation expenditure is dependent on a number of
factors, including whether the Group decides to exploit
the related permit itself or, if not, whether it successfully
recovers the related exploration and evaluation asset
through sale.
(vii) Deferred Tax Assets
Management have made a judgement for the non
recognition of deferred tax asset as the recovery of tax
losses and other deferred tax assets is not considered
probable at this stage.
(aa) Rounding of Amounts
The Group has applied the relief available to it under ASIC
Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191. Accordingly, the amounts in the
financial statements and directors’ report have been
rounded to the nearest $1,000.
43.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 3. SIGNIFICANT CHANGES IN THE CURRENT REPORTING PERIOD
The financial position and performance of the group was particularly affected by the following events and transactions
during the reporting period including:
•
•
•
•
the acquisition of an additional 17% in Prospect Lithium Zimbabwe (Pvt) Limited (refer Note 22(b)(i)) and Thornvlei
Farming Enterprises (Pvt) Limited (refer Note 22(b)(iii));
the completion of an equity raise, generating $18 million in a placement to institutional investors (refer Note 20);
the sale of Prospect Lithium Zimbabwe (Pvt) Limited and Thornvlei Farming Enterprises (Pvt) Limited in April 2022
(refer Note 22(c)) for cash consideration of US$377,800,000. In addition to the sale of sales in the subsidiaries the Group
also sold its loans receivable from these entities generating a further US$12,000,000 cash; and
the vesting and exercise of all internal (key management personal and staff) options during the year as detailed in Note
24.
NOTE 4. SEGMENT INFORMATION
Identification of Reportable Segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of
Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.
In the current year the Group engaged in exploration for minerals and project development activities in Zimbabwe. The
operations were located in Australia, Singapore and Zimbabwe with the head office being in Australia and Singapore
balances included within Australian operations.
Segment revenue, results and depreciation exclude discontinued operations.
Geographical segments
Revenue
Other external revenue
Total segment revenue
Results
Australia
Zimbabwe
Consolidated
2021
$’000
2022
$’000
2021
$’000
2022
$’000
2021
$’000
77
77
964
964
340(i)
340
5,650
5,650
417
417
2022
$’000
4,686
4,686
Segment (net loss) before tax
(18,284)
(2,788)
402
279(i)
(17,882)
(2,509)
474,803
7,804
785
27,456
475,588
35,260
Assets
Segment assets
Liabilities
Segment liabilities
Depreciation
36
24
1,281
678
48
20
626
1,329
1,304
8
56
32
The amount of non-current assets added during the year in Australia $8,000 and in Zimbabwe, prior to the disposal of the
Zimbabwe subsidiaries $4,787,000 (2021: Australia $117,000 and Zimbabwe $4,397,000).
(i) The results for Zimbabwe have been restated to account for the disposal of subsidiaries and discontinued operations.
44.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 5. REVENUE FROM CONTINUING OPERATIONS
Government tax credits and rebates
Interest revenue
Unrealised gain on revaluation of investment
Gain on derecognition of provision of rehabilitation
Gain on foreign currency
Gain on sale of assets held for sale
Sale of Penhalonga Gold Project
Total revenue from continuing operations
NOTE 6. INCOME TAX
Consolidated
2022
$’000
2021
Restated
$’000
-
315
(6)
-
4,251
126
964
5,650
55
4
18
5
-
-
335
417
Consolidated
2022
$’000
2021
$’000
(a) Numerical reconciliation of income tax expense to prima facie tax payable
Gain / (loss) before income tax expense
397,507
(3,745)
Tax at the Australian tax rate of 25% (2021: 26.0%)
Tax effect of differential corporate tax rates
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Profit on sale of Prospect Lithium Zimbabwe Limited (i)
Unrealised foreign exchange loss
Other
Over / under recognition of prior year tax expense
Foreign exchange adjustment on tax losses brought forward (ii)
Tax losses not recognised / (recognised)
Income tax expense
Income tax expense is attributable to:
Profit from continuing operations
Profit from discontinuing operations
99,377
(112)
(104,083)
4,389
627
6
1
(205)
-
-
-
(974)
(52)
-
-
596
(183)
24
589
-
-
-
(i) The sale of Prospect Lithium Zimbabwe Limited was subject to capital gains tax (CGT) in Zimbabwe. Total CGT of US$26,793,883 has been
paid to the Government of Zimbabwe on settlement of the transaction. The sale of shares in Prospect Lithium Zimbabwe Limited is also
prima facie subject to Australian CGT. An estimated capital gain of $474.4m was calculated in relation to this CGT event. The capital gain
was reduced to nil on the basis that the Active Foreign Business Percentage calculation in respect to the entity disposed was above 90%.
(ii) The Group is required to lodge its tax returns in Zimbabwe in local ZWL. The closing exchange rate between the AUD/ZWL at 30 June 2022
was $252.32 (2021: $64.22). This has resulted in carried forward losses being devalued
45.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 6. INCOME TAX (Continued)
(b) Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Consolidated
2022
$’000
2021
$’000
11,367
13,671
Potential tax benefit: Australia 25%, Zimbabwe 0% - 24.75% (2021: Australia 26%, Zimbabwe 0% - 25.75%)
2,846
3,643
Tax losses have not been recognised as a deferred tax asset as recoupment is dependent on, amongst other matters,
sufficient future assessable income being earned. That is not considered certain in the foreseeable future, and accordingly
there is uncertainty that the losses can be utilised. The reduction in unused tax losses in the current year is primarily the
result of the sale of Prospect Lithium Zimbabwe Limited.
The deferred tax liabilities of the Group relate to capitalised exploration costs. The deferred tax liabilities of the Group are
estimated as $Nil (2021: $Nil). Whilst it was still part of the Group, the Arcadia Project had Special Economic Zone status
which result in a 0% tax rate.
(c) Current tax liability
Income tax payable
Consolidated
2022
$’000
2021
$’000
-
-
NOTE 7. FINANCIAL RISK MANAGEMENT SEGMENT INFORMATION
Risk management is the role and responsibility of the Board. The Group’s current activities expose it to minimal risk.
However, as activities increase there may be exposure to interest rate, market, credit, and liquidity risks.
(a) Market Risk
(i) Interest Rate Risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result
of changes in market rates and the effective weighted average interest rates on classes of financial assets and financial
liabilities, is as follows:
46.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 7. FINANCIAL RISK MANAGEMENT SEGMENT INFORMATION (Continued)
Floating
interest rate
$’000
1 year or less
$’000
Over 1 year
to 5 years
$’000
More than 5
years
$’000
Non interest
bearing
$’000
Total
$’000
30 June 2022
Financial Assets
Cash and deposits
2,665
465,292
Trade and other receivables
Investment in listed securities
Other
-
-
-
-
-
-
2,665
465,292
Weighted average interest rate
0.30%
0.10%
Financial Liabilities
Trade and other payables
Lease liability
Weighted average interest rate
-
-
-
-
-
36
36
1.04%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,331
473
12
23
474,288
473
12
23
6,839
474,796
-
0.10%
97
-
97
-
30 June 2021
Financial Assets
Cash and deposits
Trade and other receivables
Other
Weighted average interest rate
Financial Liabilities
Trade and other payables
Lease liability
Weighted average interest rate
Floating
interest rate
$’000
1 year or less
$’000
Over 1 year
to 5 years
$’000
More than
5 years
$’000
Non interest
bearing
$’000
7,300
-
-
7,300
0.30%
-
-
-
-
-
-
-
-
-
-
43
43
-
-
-
-
-
-
33
33
1.04%
1.04%
-
-
-
-
-
-
-
-
-
577
553
31
1,161
-
412
-
412
-
97
36
133
0.28%
Total
$’000
7,877
553
31
8,461
0.26%
412
76
488
0.07%
The Group has interest bearing assets and therefore income and operating cash flows are subject to changes in the market
rates. Following the cash dividend distribution on 4 August 2022, market changes in interest rates will not have a material
impact on the profitability or operating cash flows of the Group. A movement in interest rates of +/- 100 basis points will
result in less than a +/- $340,000 (2021: $73,000) impact on the Group’s income and operating cash flows. At this time, no
detailed sensitivity analysis is undertaken by the Group.
(ii) Price Risk
The Group is not currently exposed to significant commodity price risk as it still operates in the exploration & development phase.
However, future operational cash flows will be affected by fluctuations in the lithium price and other commodity prices. The Group
will develop strategies to mitigate this risk when it moves from the exploration & development phase into the production phase.
47.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 7. FINANCIAL RISK MANAGEMENT SEGMENT INFORMATION (Continued)
The Group’s exposure to equity securities price risk arises from investments held by the Group and classified in the balance
sheet either as at fair value through profit or loss (FVPL) (refer Note 12). Post-tax loss for the year would increase/decrease
as a result of gains/losses on equity securities classified as at FVPL. The Group’s exposure to price risk is $12,000 at year end.
The amounts recognised in profit or loss and other comprehensive income in relation to the various investments held by
the group are disclosed in Note 5.
(b) Currency Risk
Currency risk arises from investments and borrowings that are denominated in a currency other than the respective
functional currencies of Group entities.
The Group is exposed to foreign currency risk in the form of financial instruments held in US Dollars (USD). The Group’s
exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars, was as follows:
Cash and cash equivalents – USD
Cash and cash equivalents – ZWL
Trade and other payables – USD
Trade and other payables – ZAR
Total Exposure
Consolidated
2021
$’000
301
63
(430)
(234)
(300)
2022
$’000
6,159
-
(51)
-
6,108
Assuming all other variables remain constant, a 10% increase or decrease of the Australian dollar at 30 June 2022 against
the USD would have resulted in an increase or decreased loss of $611,000 (2021: increase or decrease loss of $13,000).
(c) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s cash and cash equivalents.
Cash and cash equivalents comprise of cash on hand and demand deposits. The Group limits its credit risk by holding cash
balances and demand deposits with reputable counterparties with acceptable credit rating.
(d) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash to meet commitments as and when they fall
due. The Group manages liquidity risk by preparing forecasts and monitoring actual cash flows and requirements for
future capital raisings. The Group does not have committed credit lines available, which is appropriate given the nature
of its operations. Surplus funds are invested in a cash management account with Westpac Banking Corporation which is
available as required.
The material liquidity risk for the Group is the ability to raise equity in the future.
(e) Effective Interest Rate and Repricing Risk
Cash and cash equivalents and lease liabilities are the only interest bearing financial instruments of the Group.
(f) Fair Value of Financial Instruments
During the prior year, the Group received shares in listed securities, which are not held for trading. These securities are
measured at fair value based on the share price of the underlying security. Changes to the share price in these securities
are recognised as gains or losses through the profit or loss. During the current year, the Group recorded a $6,000 unrealised
loss on revaluation of this investment (Note 5) (2021: unrealised gain $18,000). These securities are reported within non-
current assets (refer Note 12) as the Group considers this classification to be most relevant.
48.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 8. CASH AND CASH EQUIVALENTS
Total cash and cash equivalents
Consolidated
2022
$’000
2021
$’000
474,288
7,877
(a) Reconciliation of operating (loss) after income tax to net cash flows used in operating activities
Operating gain / (loss) after tax
397,507
(3,745)
Non-cash items
Depreciation (as per Note 13)
Share based payments – options
Impairment of assets held for sale
Impairment of exploration and evaluation and mine properties
(Gain) on revaluation of rehabilitation provision
(Gain) on sale of Penhalonga Gold Project
(Gain) on sale of property, plant and equipment
(Gain) on sale of subsidiaries
Loss / (gain) on revaluation of investment
Foreign exchange difference
Interest received
Changes in operating assets and liabilities
(Increase) / decrease in operating trade and other receivables
(Increase) in other assets
Increase in operating trade and other payables
Increase / (decrease) in provisions
56
699
-
137
(2)
32
328
141
823
(5)
(964)
(335)
16
(415,389)
6
12,423
(315)
(269)
(19)
531
31
(12)
-
(18)
74
(4)
72
-
196
(64)
Net cash (outflows) from operating activities
(5,552)
(2,517)
(b) Non-cash transactions
The Group did not entered into any non-cash transactions during the year. During the prior year, the Company entered
into an agreement with a Lead Broker for the Group’s 6 April 2021 share offer. The fee payable to the Lead Broker included
a non-cash component in the form of the issue of 13,500,000 options on 23 April 2021. The terms of the options issued are
detailed in Note 24(a).
49.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 9. TRADE AND OTHER RECEIVABLES
GST / VAT receivable
Related party receivable (refer Note 29(c))
Other receivables
Total trade and other receivables
NOTE 10. ASSETS HELD FOR SALE
Equipment
Provision for impairment
Total assets held for sale
Consolidated
2022
$’000
473
-
-
473
2021
$’000
250
280
23
553
Consolidated
2022
$’000
2021
$’000
16
(16)
-
141
(141)
-
The Group holds equipment that is currently being marketed for sale to recoup the cost of the assets. In the prior year, a
provision for impairment was recognised reducing the carrying value of the equipment to $Nil. During the current period
the Group sold some equipment for $126,000. The gain on sale is recognised as Revenue (Note 5).
NOTE 11. OTHER CURRENT ASSETS
Deposits
Prepayments
Total other current assets
NOTE 12. INVESTMENTS IN LISTED SECURITIES
Nickelx Ltd
Consolidated
2022
$’000
2021
$’000
23
24
47
13
269
282
Consolidated
2022
$’000
2021
$’000
12
18
The fair value of the Investment in listed securities is determined by reference to quoted market prices (Note 7(f)). Changes
to the resulting fair value estimates are recognised as gains or losses through the profit or loss and included in Note 5. At
year end the Group held 100,000 shares in Nickelx Ltd at a share price of $0.125/share 2021: $0.175/share).
50.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 13. PROPERTY, PLANT AND EQUIPMENT
Consolidated
2022
$’000
2021
$’000
Buildings
Right to use asset
Leasehold improvements
Plant and machinery
Vehicles
Office equipment
Total property, plant and equipment
-
52
3
-
195
32
282
Right
to use
asset (i)
$’000
Buildings
$’000
Leasehold
improvements
$’000
Plant and
machinery
$’000
Vehicles
$’000
Office
equipment
$’000
39
74
6
241
62
104
526
Total
$’000
973
242
(14)
Reconciliation of
Property, plant and
equipment – 2022
Opening balance at cost
Additions
Disposals
Subsidiary assets
disposed (see Note 22(c))
Effect of foreign currency
exchange differences
Closing balance at cost
Opening accumulated
depreciation
Depreciation
Disposals
Subsidiary assets
disposed (see Note 22(c))
Effect of foreign currency
exchange differences
Closing accumulated
depreciation
Net written down value
41
-
-
(41)
-
-
(2)
(1)
-
2
1
-
-
89
-
-
-
-
89
(15)
(22)
-
-
-
(37)
52
7
-
-
-
-
7
(1)
(3)
-
-
-
(4)
3
(i) Included in the Right to use asset is the lease for the Company’s head office in Australia.
396
4
(2)
87
207
-
353
31
(12)
(364)
(88)
(284)
(777)
8
42
(155)
(31)
-
150
(6)
(42)
-
1
207
(25)
(26)
-
39
-
(12)
195
8
96
17
441
(249)
(447)
(66)
(149)
8
8
245
436
(2)
(7)
(64)
(159)
32
282
51.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 13. PROPERTY, PLANT AND EQUIPMENT (Continued)
Right to
use asset
(i)
$’000
Buildings
$’000
Leasehold
improvements
$’000
Plant and
machinery
$’000
Vehicles
$’000
Office
equipment
$’000
Total
$’000
Reconciliation of
Property, plant and
equipment – 2021
Opening balance at cost
Additions
Disposals
Effect of foreign currency
exchange differences
Closing balance at cost
Opening accumulated
depreciation
Depreciation
Disposals
Assets classified as
held for sale and other
disposals
Effect of foreign currency
exchange differences
Closing accumulated
depreciation
Net written down value
12
30
-
(1)
41
(1)
(1)
-
-
-
(2)
39
-
89
-
-
89
-
(15)
-
-
-
(15)
74
-
7
-
-
7
-
(1)
-
-
-
(1)
6
434
-
-
(38)
396
(130)
(37)
-
-
12
(155)
241
62
46
(16)
(5)
87
(32)
(12)
16
-
3
(25)
62
387
5
(9)
(30)
353
(182)
(86)
6
-
13
895
177
(25)
(74)
973
(345)
(152)
22
-
28
(249)
(447)
104
526
Consolidated
2022
$’000
149
(93)
56
2021
$’000
152
(120)
32
(i) Included in the Right to use asset is the lease for the Company’s head office in Australia
Depreciation
Depreciation transferred to capitalised mine properties
Depreciation recognised in statement of profit or loss and other comprehensive income
52.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 14. EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure comprises:
Shawa – Carbonatite – Rare Earth Elements
Step Aside – Lithium
Chishanya – Carbonatite – Rare Earth Elements
Total exploration and evaluation
Opening balance
Expenditure incurred
Impairment of exploration and evaluation expenditure
Effect of foreign currency exchange differences
Total exploration and evaluation expenditure
NOTE 15. MINE PROPERTIES
Mine properties – mines under construction
Arcadia – Lithium
Opening balance
Expenditure incurred
Impairment of exploration and evaluation expenditure
Proceeds of sale of lithium carbonate produced through the pilot plant
Rehabilitation asset
Effect of foreign currency exchange differences
Mine properties disposed of on sale of subsidiary (see Note 22(c))
Consolidated
2022
$’000
2021
$’000
185
301
-
486
91
592
(198)
1
486
-
-
91
91
-
91
-
-
91
Consolidated
2022
$’000
2021
$’000
-
25,605
25,605
24,257
4,067
61
(674)
195
310
29,564
(29,564)
4,036
(823)
-
193
(2,058)
25,605
-
Total mine properties – mines under construction
-
25,605
During the prior year, the Board of Directors undertook an impairment review of the Group’s exploration, evaluation &
mine properties resulting in an impairment of the Mines under Construction asset of $823,000. This impairment followed a
detailed assessment of the revised process flows following the commissioning of the pilot plant which identified items no
longer considered integral to the asset. The provision for impairment was determined considering the resale value of the
items and associated selling costs.
During the current year, the Group sold part of this equipment at fair market value to Farvic Consolidated Mines (Private)
Limited for USD$47,000 ($64,000). (Note 29(c). As the equipment sold had been fully provided for in the prior year, the sale
generated profit of $64,000 for the Group, included within the profit and loss of discontinued operations.
53.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 16. INTANGIBLE ASSETS
Capitalised ERP costs
Opening balance
Transfer to mines under construction
Effect of foreign currency exchange differences
Amortisation expense
Intangible assets disposed of on sale of subsidiary (see Note 22(c))
Total intangible assets
Amortisation
Amortisation transferred to capitalised mine properties
Amortisation recognised in statement of profit or loss from discontinued operations
NOTE 17. TRADE AND OTHER PAYABLES
Related party payables
Trade payables(i)
Accruals
Other payables
Total trade and other payables
Consolidated
2021
$’000
308
581
(204)
(50)
(19)
308
-
308
19
(19)
-
2022
$’000
-
308
-
4
(19)
293
(293)
-
19
(19)
-
Consolidated
2021
$’000
6
385
518
21
930
2022
$’000
1
96
1,034
-
1,131
(i) The group does not have any trade payables more than 31 days past the respective date of the original invoice.
NOTE 18. LEASE LIABILITY
The balance sheet shows the following amounts relating to Right-of-use asset – office space lease
Lease liabilities
Current
Non current
Total lease liabilities
54.
Consolidated
2022
$’000
2021
$’000
36
-
36
43
33
76
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 18. LEASE LIABILITY (Continued)
With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance
sheet as a right-of-use asset and a lease liability.
The group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or
less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In addition,
certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed as incurred.
During the prior year the Group entered into a 2 year lease for the head office in Australia. The lease imposes a restriction
that, unless there is a contractual right for the Group to sublet the asset to another party, the right-of-use asset can only be
used by the Group. The Group must keep the properties in a good state of repair and return the properties in its original
condition at the end of the lease. Further, the Group must insure items of property, plant and equipment and incur
maintenance fees on such items in accordance with the lease contracts.
Extension and termination are included in the office lease to maximise operational flexibility in terms of managing this asset.
NOTE 19. PROVISIONS
Current
Employee entitlements
Total current provisions
Non current
Employee entitlements
Provision for rehabilitation
Total non current provisions
NOTE 20. CONTRIBUTED EQUITY
(a) Issued share capital
Ordinary shares fully paid
Consolidated
2022
$’000
2021
$’000
125
125
37
-
37
94
94
11
193
204
2022
No. of Shares
2021
No. of Shares
448,759,462
374,025,855
55.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 20. CONTRIBUTED EQUITY (Continued)
(b) Movement in ordinary share capital
Date
Details
Balance at 30 June 2020
2 October 2020
Issue of shares via placement and rights issue
23 April 2021
Issue of shares
Cost of capital raising – cash
Cost of capital raising – options
Balance at 30 June 2021
No. of Shares
285,936,524
46,153,847
41,935,484
-
-
374,025,855
22 July 2021
Issue of shares to acquire additional ownership in subsidiary
9,497,680
5 November 2021
Issue of shares via placement
Cost of capital raising – cash
45,000,000
-
Issue of shares upon exercise of options (Note 24)
20,235,927(i)
$’000
65,429
6,000
6,500
(801)
(481)
76,647
3,087
18,000
(793)
4,403
Balance at 30 June 2022
448,759,462
101,344
(i) Some option holders utilised a cashless exercise facility offered allowing the conversion of options for a reduced cash payment in forfeiture
of shares. This resulted in the issue of only 20,235,927 shares on exercise of the 26,500,000 options (refer Note 24) during the year.
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands or on a poll every holder of ordinary
shares present at a meeting in person or by proxy is entitled to one vote.
NOTE 21. RESERVES AND ACCUMULATED PROFIT / (LOSSES)
Share based payments reserves (refer to Note 21(a)(ii))
Other reserves (refer to Note 21(b))
Foreign currency translation reserve (refer to Note 21(c))
Total reserves
Nature and Purpose of Reserves
Consolidated
2021
$’000
11,656
-
(417)
11,239
2022
$’000
10,509
-
18,281
28,790
The share based payments reserve arises pursuant to an issue of shares or options as consideration for a service or an
acquisition transaction.
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign subsidiaries and translation differences on intercompany loans.
56.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 21. RESERVES AND ACCUMULATED PROFIT/(LOSSES) (Continued)
(a) Share Based Payments Reserve
(i) Movement in options
Date
Details
No. of Options
Balance at 30 June 2020
17 November 2020
6 February 2021
23 April 2021
25 June 2021
Balance at 30 June 2021
November and December 2021
Issue of options
Issue of options
Issue of options
Issue of options
Share based payment expense on
options granted in prior periods
February to June 2022
Options exercised
Balance at 30 June 2022
(ii) Movement in Share Based Payments Reserve
4,500,000
6,250,000
4,500,000
13,500,000
11,000,000
39,750,000
-
(26,250,000)
13,500,000
Movement in reserve
2022
No. Options
2022
$’000
2021
No. Options
Balance at the beginning of the year
39,750,000
11,656
4,500,000
Options issued
Share based payments expense on options
granted in prior periods
Options exercised
Options expired
-
35,250,000
-
-
699
(26,250,000)
(1,846)
-
-
-
-
-
$’000
10,847
268
53
481
7
11,656
699
(1,846)
10,509
2021
$’000
10,847
809
-
-
-
Balance at the end of the year
13,500,000
10,509
39,750,000
11,656
(b) Other Reserves
Movement in Other Reserve
Opening balance
Other reserve - increase in ownership of Prospect Lithium
Zimbabwe (Pvt) Ltd (Note 22(b))
Other reserve - impact of debt to equity swap (Note 22(b))
On sale of subsidiary
Closing balance
Consolidated
2022
$’000
2021
$’000
-
4,484
1,941
(6,425)
-
-
-
-
-
-
57.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 21. RESERVES AND ACCUMULATED PROFIT / (LOSSES) (Continued)
(c) Foreign Currency Translation Reserve
Movement in reserve
Opening balance
Currency translation differences
Closing balance
(d) Accumulated profits / (losses)
Accumulated (losses) at beginning of year
Net profit / (loss) attributable to equity holders of the Company
Accumulated profits / (losses) at end of year
NOTE 22. SUBSIDIARIES
Consolidated
2022
$’000
2021
$’000
(417)
18,698
18,281
1,909
(2,326)
(417)
Consolidated
2022
$’000
2021
$’000
(52,548)
(49,090)
397,573
(3,458)
345,025
(52,548)
Details of the Group’s material subsidiaries at the end of the reporting period are as follows:
Principal activity
Country of
incorporation
Prospect Minerals Pte Ltd
Holding company
Singapore
Promin Resource Holdings Pte Ltd
Holding company
Singapore
Prospect Lithium Resources (Pvt) Limited
Exploration & evaluation Zimbabwe
Thornvlei Farming Enterprises (Pvt) Limited
Exploration & evaluation Zimbabwe
Hawkmoth Mining & Explorations (Pvt) Limited
Exploration & evaluation Zimbabwe
Tegridy (Private) Limited
Exploration & evaluation Zimbabwe
Breattaking Investments Private Limited
Exploration & evaluation Zimbabwe
Market Street (Private) Limited
Exploration & evaluation Zimbabwe
Coldawn Investments (Pvt) Limited
Exploration & evaluation Zimbabwe
Ownership and voting interest
2022
100%
100%
- (i)
- (ii)
70%
100%
100%
100%
- (iii)
2021
100%
-
70%
70%
70%
-
-
-
70%
(i) The ownership and voting interest increased to 87% on 22 July 2021 as detailed in Note 22(b). The entity was sold on 20 April 2022 as
detailed in Note 22(c).
(ii) The ownership and voting interest increased to 100% on 9 February 2022 as detailed in Note 22(b). The entity was sold on 20 April 2022 as
detailed in Note 22(c).
(iii) The Group entered into an option agreement to sell Coldawn Investments (Private) Limited, which holds the Penhalonga Gold Project,
for US$1m during the prior year. The Group received a non-refundable deposit of US$250,000 during 2021, and the option agreement was
executed during the current year generating revenue of $964,000 (Note 5).
58.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 22. SUBSIDIARIES (Continued)
(a) Details of Non-Wholly Owned Subsidiaries that have Material Non-Controlled Interest
The table below shows details of non-wholly owned subsidiaries of the Group that have non-controlling interests
Name of subsidiary
Place of
incorporation
and principal
place of
business
Proportion of
ownership interests
and voting rights
held by non-
controlling interests
Profit/(loss) allocated
to non-controlling
interests
Accumulated
non-controlling
interests
2022
%
2021
%
2022
$’000
2021
$’000
2022
$’000
2021
$’000
Prospect Lithium Zimbabwe (Pvt)
Limited
Thornvlei Farming Enterprises (Pvt)
Limited
Zimbabwe
Zimbabwe
Hawkmoth Mining & Explorations (Pvt)
Limited
Zimbabwe
Coldawn Investments (Pvt) Limited(ii)
Zimbabwe
- (i)
- (i)
30%
-
30%
30%
30%
30%
(63)
(349)
-
(21)
-
-
(365)
(68)
129
-
66
83
-
(900)
(949)
-
-
(287)
(900)
(1,382)
(i) During the year the ownership in Prospect Lithium Zimbabwe (Pvt) Limited and Thornvlei Farming Enterprises (Pvt) Limited increased to
87% (Note 22(b)). The Group acquired the remaining 13% of Thornvlei Farming Enterprises (Pvt) Limited. These subsidiaries were then sold
by the Group on as detailed in Note 22(c). The loss reported for the current year relates to the period before the subsidiary was sold.
(ii) During the prior year the Group entered into an option agreement to sell Coldawn Investments (Private) Limited, which holds the
Penhalonga Gold Project, for US$1 million. The Group received a non-refundable deposit of US$250,000 during the prior year. The option
agreement was executed during the current period and the balance of US$750,000 (AU$1,041,000) was received completing the sale.
(b) Transactions with Non-controlling Interests
(i) Increase in ownership of Prospect Lithium Zimbabwe (Pvt) Limited
On 22 July 2021, Prospect Minerals Pte Ltd acquired an additional 17% of the issued shares of Prospect Lithium Zimbabwe (Pvt)
Limited for cash consideration of $1,187,000 and the issue of 9,497,680 shares in Prospect Resources Limited valued at $3,087,000.
Immediately prior to the purchase, the carrying amount of the existing 30% non-controlling interest in Prospect Lithium
Zimbabwe (Pvt) Limited were net liabilities of $208,000. The group recognised a decrease in non-controlling interests of
$4,276,000 and a decrease in equity attributable to owners of the parent of $4,484,000. The effect on the equity attributable to
the owners of Prospect Resources Limited during the period is summarised as follows:
Carrying amount of non-controlling interests acquired
Reattribution of owners controlling interest – foreign currency translation reserve
(Consideration) paid to non-controlling interests
(Excess) of consideration paid recognised in the transactions with non-controlling
interests reserve within equity
2022
$’000
(208)
(3)
(4,273)
(4,484)
2021
$’000
-
-
-
59.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 22. SUBSIDIARIES (Continued)
(ii) Debt to equity swap
On 17 December 2021 Prospect Lithium Zimbabwe (Pvt) Limited issued shares as part of a debt-to-equity swap
transaction whereby US$10,700,000 owed by Prospect Lithium Zimbabwe (Pvt) Limited to Prospect Minerals Pte Ltd was
converted into equity in Prospect Lithium Zimbabwe (Pvt) Limited. This resulted in the recognition of a share premium of
$14,930,000 by the group.
Shares in Prospect Lithium Zimbabwe (Pvt) Limited were issued to the extent necessary to maintain the existing
ownership profile of Prospect Lithium Zimbabwe (Pvt) Limited. The shares issued to the non-controlling interest to
maintain their 13% ownership was completed for nil consideration resulting in a decrease in equity attributable to owners
of the parent of $1,941,000 recognised in the transactions with non-controlling interests reserve within equity.
(iii) Increase in ownership of Thornvlei Farming Enterprises (Pvt) Limited
On 9 February 2022, Prospect Lithium Zimbabwe (Pvt) Limited acquired the remaining 30% of Thornvlei Farming
Enterprises (Pvt) Limited for cash consideration of $0.30.
(c) Discontinued Operations
(i) Description
On 23 August 2021 the Group announced it had decided to commence a structured process giving interested parties the
opportunity to put forward proposals to fully fund the Arcadia project. Following this process, on 23 December 2021, the
Group announced it had executed a binding agreement for the sale of its 87% interest in the Arcadia project subject to
the completion of certain conditions.
In accordance with the binding agreement and following the satisfaction of the conditions precedent, the sale of the
Arcadia project was completed on 20 April 2022 via the sale of the Group’s ownership in Prospect Lithium Zimbabwe
(Pvt) Limited and Thornvlei Farming Enterprises (Pvt) Limited for US$365,755,000. In addition to the sale of it’s ownership
interest in its subsidiaries, the Group sold to the buyer it’s interest in intercompany loans at completion for US$12,000,000
in cash. The sale transaction is detailed in Note 22(c)(iii).
The amounts presented in the Consolidated Statement of Profit and Loss and Comprehensive Income under discontinuing
operations represents the profit / (loss) on the Group’s share in the subsidiaries sold.
Financial information relating to the discontinued operations for the period to date of disposal are listed below. The
subsidiaries were not previously classified as held-for-sale or as discontinued operation. The comparative consolidated
statement of profit and loss and other comprehensive income has been restated to show the discontinued operation
separately from continuing operations.
(ii) Financial performance and cashflow information
The financial performance and cashflow information presented are the 9.66 months ended 20 April 2022 (2022 column) and for
the year ended 30 June 2021, disclosed within profit / (loss) from discontinued operations.
Revenue
Expenses
(Loss) before income tax
Income tax expense
(Loss) after income tax of discontinued operations
60.
2022
$’000
98
(611)
(513)
-
(513)
2021
$’000
25
(1,261)
(1,236)
-
(1,236)
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 22. SUBSIDIARIES (Continued)
Net cash outflow from operating activities
Net cash (outflow) from investing activities
Net cash inflow from financing activities
Net (decrease) / increase in cash generated by the discontinued operations
(iii) Details of the sale of subsidiaries
Disposal consideration – cash received for sale of interest in subsidiaries
Costs incurred on completion of transaction and operating loss for the period
Cost of external consultants for transaction support
Loss on sale of intercompany loans
Write back of investment in subsidiary
Gain / (loss) on sale before income tax and reclassification of foreign operations
Reclassification of foreign operations
Income tax on gain
2022
$’000
(293)
(4,861)
5,099
(55)
2022
$’000
493,336
(46,957)
(8,991)
(606)
(19,705)
417,077
(1,688)
-
2021
$’000
(5)
(3,809)
3,962
148
2021
$’000
-
(1,236)
-
-
(1,236)
-
-
Profit / (loss) from discontinued operations
415,389
(1,236)
The carrying amounts of assets and liabilities as at the date of sale (20 April 2022) were:
Cash
Property, plant and equipment
Trade and other receivables
Intangible assets
Mine properties
Total assets
Trade and other payables
Loans
Provisions
Total liabilities
Net assets
20 April 2022
$’000
150
341
501
293
29,564
30,849
23
18,077
261
18,361
12,488
61.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 22. SUBSIDIARIES (Continued)
(d) Financial Information of Non-Wholly Owned Subsidiaries that have Material Non-Controlled Interest
Summarised financial information in respect of the Group’s Zimbabwe subsidiaries that have non-controlling interests
have been aggregated together and is set out below. The summarised financial information below represents amounts
before intragroup eliminations. The current year results and cashflows exclude discontinued operations.
Zimbabwe Subsidiaries
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net liabilities
Equity attributable to owners of the Company
Non-controlling interest
Total (deficit)
Revenue
Expenses
Gain / (loss) for the year
Gain / (loss) attributable to owners of the Company
Gain / (loss) attributable to the non-controlling interests
Gain / (loss) for the year
Other comprehensive income attributable to owners of the Company
Other comprehensive income attributable to the non-controlling interests
Other comprehensive income for the year
Total comprehensive gain / (loss) attributable to owners of the Company
Total comprehensive gain / (loss) attributable to the non-controlling interests
Total comprehensive gain / (loss) for the year
Net cash (outflow) / inflow from operating activities
Net cash inflow / (outflow) from investing activities
Net cash (outflow) / inflow from financing activities
Net cash (outflow) / inflow
62.
2022
$’000
85
699
(48)
(3,765)
(3,029)
(2,120)
(909)
(3,029)
964
(562)
402
273
129
402
-
-
-
273
129
402
(337)
474
(173)
(36)
2021
$’000
1,022
25,848
(433)
(31,050)
(4,613)
(3,231)
(1,382)
(4,613)
365
(1,322)
(957)
(670)
(287)
(957)
288
127
415
(382)
(160)
(542)
260
(4,103)
4,057
214
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 23. PROSPECT RESOURCES LIMITED PARENT COMPANY INFORMATION
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Contributed equity
Reserves
Accumulated profits / (losses)
Financial Performance
Profit / (loss) for the year
Other comprehensive income
Total Comprehensive Profit / (Loss)
2022
$’000
474,705
189
474,894
1,241
17,153
18,394
101,344
10,509
344,646
456,499
2021
$’000
7,681
26,374
34,055
633
43
676
76,647
11,655
(54,923)
33,379
399,569
(6,546)
-
-
399,569
(6,546)
Parent Entity Contingencies and Guarantees
The parent entity has no guaranteed any loans for any entities during the year.
Parent Entity Commitments
The parent entity has entered into contracts with its directors and certain executives whereby minimum notice periods
(usually six months) have been provided by the parent entity. This totals $615,000 (2021: $552,000).
63.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 24. SHARE-BASED PAYMENTS (OPTIONS)
(a) Recognised Share-Based Payments Expense
The share based payments expense was $699,121 (2021: $809,000), with $699,121 recognised in the statement of financial
performance (2021: $328,000). The share based payments expense results from options granted in the prior periods. The following
table lists the inputs to the model used:
Options series
No. of Options
Grant date
Share price
Exercise price
Asset Interest rate
Expiry date
Volatility
Fair value at grant date
Vesting condition and period
Employee
incentive
Management
incentive
Executive
incentive
Broker
Directors
6,250,000
4,500,000
6,000,000
13,500,000
5,000,000
17/11/2020
06/02/2021
25/06/2021
23/04/2021
25/06/2021
$0.125
$0.24
0.11%
$0.18
$0.26
1.77%
$0.195
$0.26
1.77%
$0.15
(ii)
1.77%
$0.195
$0.24
1.77%
05/11/2023
03/02/2025
03/02/2025
31/12/2025
07/01/2025
100%
$0.0487
(i)
42.33%
$0.042
(i)
42.33%
$0.047
(i)
42.33%
(ii)
(ii)
42.33%
$0.051
(i)
(i) The terms of the options provided for their vesting on a Change in Control Event, covering a change of control at both a corporate and
project level. The signing of the SSA triggered a change in control event as the Group has agreed to sell all or a substantial part of the
assets or business of the Group (the Arcadia Project) to a third party, which was not the result of an internal restructure.
(ii) Broker options are fully vested and have exercise prices attached as follows:
(a) 4,000,000 options have an exercise price of $0.22 and fair value per option of $0.0415;
(b) 4,500,000 options have an exercise price of $0.25 and fair value per option of $0.0357; and
(c) 5,000,000 options have an exercise price of $0.28 and fair value per option of $0.0309
Post 30 June 2022, the 13,500,000 Broker options were exercised on 8 July 2022 and the company received $3,405,000.
The following share-based payment arrangements were in existence during the current and prior reporting periods:
Exercise
Price
Fair Value per
Option at Grant Date
$782,289
$304,423
$189,079
$480,938
$279,725
$254,314
Options series
Number
Grant Date
Expiry Date
Issued 13 May 2018
4,500,000
13/05/2018
12/05/2022
Issued 17 November 2020
6,250,000
17/11/2021
05/11/2023
Issued 6 February 2021
4,500,000
06/02/2021
03/02/2025
$0.60
$0.26
$0.26
Issued 23 April 2021
13,500,000
23/04/2021
31/12/2025
$0.22-$0.28
Issued 25 June 2021
6,000,000
25/06/2021
03/02/2025
Issued 25 June 2021
5,000,000
25/06/2021
07/01/2025
$0.26
$0.24
64.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 24. SHARE-BASED PAYMENTS (OPTIONS) (Continued)
(b) Summary of Options Granted
The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share
options issued to Key Management Personnel and employees during the year:
2022
No.
2022
WAEP
$/Share
2021
No.
2021WAEP
$/Share
Outstanding at the beginning of the year
26,250,000
Granted during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
-
(26,250,000)
-
-
0.31
-
0.31
-
-
4,500,000
21,750,000
-
-
26,250,000
0.60
0.25
-
-
0.31
At the end of the year 26,500,000 options granted to Key Management Personnel and employees were vested and
exercised (2021: 6,250,000).
The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share
options issued to brokers during the year:
2022
No.
2022
WAEP
$/Share
Outstanding at the beginning of the year
13,500,000
0.25
Granted during the year
Exercised during the year
Expired during the year
-
-
-
-
-
-
2021
No.
-
13,500,000
-
-
2021
WAEP
$/Share
-
0.25
-
-
Outstanding at the end of the year
13,500,000
0.25
13,500,000
0.25
All the broker options above fully vested during the prior year.
(a) Weighted Average Remaining Contractual Life
The weighted average remaining contractual life for the share options outstanding as at 30 June 2022 is 3.51 years (2021:
3.39 years).
(b) Range of Exercise Price
The range of exercise prices for options outstanding at the end of the year was $0.22 - $0.28 (2021: $0.22 - $0.60).
(c) Weighted Average Fair Value
The weighted average fair value of options granted during the year was $Nil (2021: $0.45).
(d) Share Options Exercised During the Year
26,250,000 options were exercised in 2022 (2021: Nil).
65.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 25. COMMITMENTS FOR EXPENDITURE
(a) Exploration Commitments
In order to maintain an interest in the mining and exploration tenements in which the Group is involved, the Group is committed
to meet the conditions under which the tenements were granted and the obligations of any joint venture and/or acquisition
agreements. Outstanding exploration commitments are as follows:
Not longer than 1 year
Longer than 1 year and not longer than 5 years
(b) Operating Lease Commitments
Consolidated
2022
$’000
-
-
2021
$’000
-
-
The Group has an operating lease commitment for office rental and equipment totaling $45,000 (2021: $16,000).
(c) Other Commitments
The Group has Nil commitments for ongoing annual licensing and permit fees. In the prior year the Group had $50,000
commitments related to the Arcadia mining lease and its Special Economic Zone status.
The Group has entered into contracts with its directors and certain executives and consultants whereby minimum notice
periods (usually six months) have been provided by the Group. This totals $615,000 as at 30 June 2022 (2021: $682,000).
In the prior year the Group had entered into an offtake agreement to deliver 280,000 tonnes of 6% Li2O spodumene
concentrate and 784,000 tonnes of 4% Li2O petalite concentrate over a 7 year term from the Arcadia Project, and to receive
a US$10,000,000 offtake prepayment upon the ball mill being delivered and bolt installed at the Project. This offtake
agreement was cancelled at a cost of US$8,000,000 on the sale of the Arcadia project during the current year.
The Group had also entered into an offtake agreement to deliver up to 100,000 tonnes per annum of high quality, ultra-low
iron 4.1% petalite concentrate for 7 years, totaling up to 700,000 tonnes. This agreement was not for a fixed tonnage and
required agreement on the availability of supply, as the project is now sold this agreement will lapse.
Mr Greaves resigned from the Board on 6 September 2022. As the Board has accepted his resignation, a termination
payment of $125,000 has become payable to Mr Greaves.
NOTE 26. CONTINGENT LIABILITIES
The Group has no other liabilities.
66.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 27. AUDITORS REMUNERATION
Audit of the parent entity
Audit and audit review of the financial reports
Other services
Auditor of subsidiaries
Audit services
The auditor of the Group is Stantons.
NOTE 28. KEY MANAGEMENT PERSONNEL DISCLOSURES
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
Total compensation made to key management personnel
NOTE 29. RELATED PARTY TRANSACTIONS
(a) Dividends
Consolidated
2022
$’000
2021
$’000
98
-
98
80
25
105
50
42
Consolidated
2022
$’000
2021
$’000
2,123
65
663
2,851
974
48
146
1,168
During the year Prospect Minerals Pte Ltd declared and paid a dividend to its immediate parent Prospect Resources
Limited for US$298,000,000 ($416,900,000).
(b) Loans to subsidiaries
• At 30 June 2022, the Company has loaned US$33,000 ($48,000) to its 100% owned subsidiary Breattaking Investments
(Private) Limited. The Company has a recoverable book value of this loan of $48,000.
• At 30 June 2022, the Company has loaned US$29,000 ($42,000) to its 100% owned subsidiary Market Street (Private)
Limited. The Company has a recoverable book value of this loan of $42,000.
• At 30 June 2022, the Company has a payable of US$11,791,000 ($17,116,000) (2021 receivable: US$562,000 ($747,000)) to
its 100% owned subsidiary Prospect Minerals Pte Ltd (PMPL). The significant change in this position from the prior year
reflects the transfer of disposal consideration on sale of Prospect Lithium Zimbabwe (Private) Limited and Thornvlei
Farming Enterprises (Private) Limited to the Company net of the payment of the dividend by Prospect Minerals Pte Ltd
during the current year.
• At 30 June 2022, the Company has loaned US$2,532,000 ($3,676,000) (2021: US$3,490,000 / $4,643,000) to its 70% owned
subsidiary Hawkmoth Mining and Exploration (Private) Limited (‘HME’). The Company has a recoverable book value of
this loan of $Nil (2021: $694,000). The loan was fully provided for at 30 June 2022.
67.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 29. RELATED PARTY TRANSACTIONS (Continued)
In accord with the SSA the loans due from PLZ and TFE to related companies were sold for US$12,000,000. The proceeds
were received by PMPL as the owner of PLZ and subsequently transferred to the holding Company. The intercompany loan
balances that were in place at the end of the previous year were as follows:
• At 30 June 2021, the Company had loaned US$19,638,000 ($26,121,000) to its then 70% owned subsidiary Prospect
Lithium Zimbabwe (Private) Limited
• At 30 June 2021 the Company had a loan receivable from its then 70% owned subsidiary Thornvlei Farming Enterprises
(Private) Limited (‘TFE’) of US$70,000 ($93,000). This loan receivable was then sold sold in addition to the sale of the
shares in the subsidiary. At the end of the current year $Nil balances were receivable by the Group from TFE.
During the year, until the sale of the entity, the loan with PLZ increased to US$12,059,000 ($16,239,000). This loan receivable
was then sold in addition to the sale of the shares in the subsidiary. At the end of the current year $Nil balances are
receivable by the Group from PLZ. The loan payable by TFE was unchanged to the date of sale.
(c) Farvic Consolidated Mines (Private) Limited (Farvic)
•
The Group is owed $Nil by Farvic (2021: $142,000). The prior period amount receivable was interest free and payable on
demand. Harry Greaves and Zed Rusike are directors and shareholders of Farvic.
• Prior to its disposal, PLZ purchased a crusher and crusher frame from Farvic for US$99,000 for its Mine property.
Included within Revenue from discontinued operations for the current period is the gain on sale of flotation equipment
to Farvic for US$47,000 and revenue earned on provision of geological services to Farvic for US$2,000. All transactions
with Farvic were conducted on market terms and conditions.
•
The Group is owed $Nil by Mixnote Investments (Pvt) Limited (Mixnote), a subsidiary of Farvic (2021: $3,706). The amount
is recognised as a trade receivable and is interest free (Note 9)
(d) Anglo Pacific Ventures Pty Ltd
During the prior year the Company paid $36,778 to Anglo Pacific Ventures Pty Ltd for rent whilst Mr Warner was a Director
and beneficiary of Anglo Pacific Ventures Pty Ltd.
NOTE 30. SUBSEQUENT EVENTS
Other than the following, the directors are not aware of any significant events since the end of the reporting period:
•
Since the year end the directors have recommend the payment of a dividend of $0.79 per ordinary share ($365,224,975)
and a capital payment of $0.17 per ordinary share ($78,584,109). The payments were approved at the Company’s
Extraordinary General Meeting on 22 July 2022. The aggregate amount of $443,809,084 was paid on 4 August 2022 out
of retained earnings and share capital at 30 June 2022 but not recognised as a liability at year end.
• On 26 August 2022 the Group acquired the 30% noncontrolling interest in Hawkmoth Mining & Explorations (Pvt)
Limited (“HME”) for a purchase price of US$100. On completion of the transaction HME becomes a wholly owned
subsidiary of the group.
• Post 30 June 2022, the 13,500,000 Broker options were exercised on 8 July 2022 and the company received $3,405,000.
68.
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2022
NOTE 31. PROFIT / (LOSS) PER SHARE (EPS)
Basic (loss) per share (cents per share) from continuing operations
Consolidated
2021
$’000
(0.80)
2022
$’000
(4.29)
Diluted (loss) per share (cents per share) from continuing operations
(4.20)
(0.80)
Amount used in the calculation of basic EPS
Continuing (loss) after income tax attributable to members of Prospect Resources Limited ($’000)
(17,756)
(2,593)
Basic profit / (loss) per share (cents per share) from discontinuing operations
100.06
(0.26)
Diluted profit per share (cents per share) from discontinuing operations
97.91
0.26
Amount used in the calculation of basic EPS
Discontinuing profit / (loss) after income tax attributable to members of Prospect Resources
Limited ($’000)
415,389
(865)
Weighted average number of ordinary shares outstanding during the year used in the
calculation of basic (loss) per share
415,154,600
325,855,625
69.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 AUDITORS’ INDEPENDENCE DECLARATION
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
23 September 2022
Board of Directors
Prospect Resources Limited
Level 2, 33 Richardson Street
West Perth WA 6005
Dear Directors
RE: PROSPECT RESOURCES LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Prospect Resources Limited.
As the Audit Director for the audit of the financial statements of Prospect Resources Limited for the year
ended 30 June 2022, 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
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
70.
INDEPENDENT AUDITOR’S REPORT
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
PROSPECT RESOURCES LIMITED
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
OPINION
We have audited the financial report of Prospect Resources Limited (“the Company”) and its subsidiaries
(“Group”), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
BASIS FOR OPINION
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
KEY AUDIT MATTERS
We have defined the matters described below to be the key audit matters to be communicated in our report.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
this matter.
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
71.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022
INDEPENDENT AUDITOR’S REPORT
Key Audit Matters
How the matter was addressed in the audit
Disposal of Subsidiary and Accounting for
Discontinued Operations in accordance with
AASB 5
Inter alia, our audit procedures
following:
included
the
i. Obtained and read Share Sale Agreement for
the sale of PLZ and related announcements
made by the Company in order to assess the
accounting implications of the Transaction on
the consolidated financial statements of the
Group;
ii. Ensuring
the
that
Transaction was
appropriately accounted for, cash received
appropriately recorded and tracing the funs to
the bank statements;
iii. Testing, on a sample basis, the costs incurred
in completing the transaction;
iv. Testing
the accuracy of
the assets and
liabilities of PLZ as at the Completion Date by
reconciling these amounts to the completion
accounts of PLZ and assessed
the
corresponding tax effect (in Zimbabwe), which
were included in the calculation of the gain on
disposal and related results disclosed within
discontinued operations;
v. Reviewing the Directors’ assessment of the tax
consequences
in
Zimbabwe, Singapore, and Australia. This
included review of the draft ATO Tax Ruling on
the Taxation in Australia; and
transactions
the
of
vi. We also evaluated
disclosure of
the
consolidated financial statements.
the presentation and
the
transactions within
On 23 December 2021. The Company announced the
execution of Binding Agreements for the Sale of Arcadia
Lithium Project (“Arcadia Project”) to Zhejiang Huayou
Cobalt (“The Transaction”). The Arcadia Project was
held through Prospect Lithium Zimbabwe Pvt Ltd (“PLZ’)
which is a subsidiary of Prospect Resources’ wholly
Prospect
owned
Resources Pte Ltd. The Transaction was approved by
the shareholders of the Company in the Extraordinary
General Meeting held on 25 February 2022 and was
completed on 20 April 2022 (“Completion Date”). The
sale resulted in a profit on the sale of $414.5 million.
Singapore-based
subsidiary,
The Transactions comprised:
i)
ii)
the sale of Prospect Lithium Zimbabwe Pvt Ltd
(“PLZ’), the company that held the Arcadia Lithium
Project, including PLZ’s non-controlling interest;
and
The transfer/reassignment of benefits assigned to
PLZ by the Zimbabwe Investment Development
Agency (ZIDA) for the Special Economic Zone
License.
We consider
the disposal of
subsidiary and discontinued operations to be a key audit
matter due to the following:
the accounting
for
i)
ii)
iii)
for
Significance PLZ to the Group’s operations as
it the Arcadia Lithium Project was the flagship
the
project
the Group and because
Transaction has significantly affected
the
composition of the Group’s businesses and
activities. Significant audit effort was required
during the year ended 30 June 2022 to ensure
The Transaction was correctly accounted for;
Significant of the income from the disposal of
PLZ to the Group’s performance for the year;
and
the disclosures
Significance of
the
consolidated financial statements have been
presented in accordance with AASB 5: Non-
Current Assets Classified as Held for Sale and
Discontinued Operations (AASB 5).
in
Refer to note 22 to the consolidated financial statements
for the disclosure relating to the non-current assets held
for sale and discontinuing operations.
72.
INDEPENDENT AUDITOR’S REPORT
Key Audit Matters
How the matter was addressed in the audit
Inter alia, our audit procedures included the following:
i. Verifying
the
inputs and examining
the
assumptions used in the Group’s valuation of
unlisted options, being the share price of the
underlying equity, time to maturity (expected
life) and grant date;
ii. Challenging management’s assumptions in
relation to the likelihood of achieving the
vesting conditions;
iii. Assessing the fair value of the calculation
through re-performance using appropriate
inputs; and
iv. Assessing the accuracy of the share-based
payments expense and the adequacy of
disclosures made by the Group in the financial
report.
Share based payments
The consolidated financial statements, the Company
awarded 35,250,000 share options
to directors,
employees, consultants and other services providers in
the prior year. The awards vest subject
the
achievement of certain vesting conditions which
extended into the current financial year.
to
The Group valued the share options using the Black
Scholes methodology and estimated likelihood of vesting
conditions being achieved over the vesting period for
each tranche of awards. The Group has performed
calculations to record the related share-based payment
expense of $699,000 in the consolidated statement of
profit or loss and other comprehensive income.
Further to the above, 25,250,000 shares options were
exercised, resulting in cash proceeds of $2,561,000. As
a result of the exercise of these options, $1.842 million
has been transferred from Share Option Reserve to
Issued Capital. Included in the total number of share
options exercised were 15,225,000 share options
exercised via the cashless exercise mechanism, as per
the initial terms and conditions when the options were
granted
to respective directors, key management
personnel and employees.
Due to the complex nature of the transactions and
estimates used in determining the valuation of the share-
based payment arrangements and vesting periods, we
consider the Group’s calculation of the share-based
payment expense to be a key audit matter.
In determining the share-based payment expense, the
Group made assumptions in respect of future board’s
financial decisions as well as estimates of achievement
of certain mining targets.
Refer to note 21 to the consolidated financial statements
for the disclosure relating to share-based payment
expense.
OTHER INFORMATION
The directors are responsible for the other information. The other information comprises the information
included in the Company's annual report for the year ended 30 June 2022 but does not include the financial
report and our auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
73.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022
INDEPENDENT AUDITOR’S REPORT
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.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and
fair view 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 entity's internal control.
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.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Company to cease to continue as a going concern.
We 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.
We 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 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.
74.
INDEPENDENT AUDITOR’S REPORT
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. 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 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 16 to 21 of the directors’ report for the year ended
30 June 2022.
In our opinion, the Remuneration Report of Prospect Resources Limited for the year ended 30 June 2022
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
23 September 2022
75.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022
ASX Additional
Information
76.
ASX Additional Information
Additional Information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report is set out below.
The shareholder information was applicable as at 15 September 2022.
(a) Substantial Shareholders
The substantial shareholders are:
Holder Name
Holding Balance
Eagle Eye Asset Holdings Pte Limited
Mitsubishi UFJ Financial Group, Inc.
Morgan Stanley and its subsidiaries
Credit Suisse Holdings (Australia Limited
JPMorgan Chase & Co. and its affiliates
(b) Voting Rights
Ordinary Shares
58,188,891
31,439,762
31,439,762
28,293,466
24,883,312
% IC
12.58%
6.80%
6.80%
6.12%
5.58%
On a show of hands every member present at a meeting of shall have one vote and upon a poll each share shall have one
vote.
Options
There are no voting rights attached to the options
(c) Number of Holders
Class of Equity Securities
Fully paid ordinary shares
Options
(d) Distribution of Equity Security Holders
Fully Paid Ordinary Shares
Number of holders
3,608
0
Holding Ranges
Holders
Total Units
% Issued Share Capital
Above 0 up to and including 1,000
Above 1,000 up to and including 5,000
Above 5,000 up to and including 10,000
Above 10,000 up to and including 100,000
Above 100,000
Totals
(e) Less than Marketable Parcels
554
1,092
597
1,119
246
3,608
294,068
3,121,783
4,782,274
37,273,996
416,787,341
462,259,462
0.06%
0.68%
1.03%
8.06%
90.16%
100.00%
There were 1,711 holders of less than a marketable parcel of ordinary shares.
77.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 ASX Additional Information
(f) Equity Security Holders
The 20 largest fully paid ordinary shareholders of the Company as at the Reporting Date are:
Position
Holder Name
Holding % Issued Shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CS FOURTH NOMINEES PTY LIMITED
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MBM CAPITAL PARTNERS LLP
CG NOMINEES (AUSTRALIA) PTY LTD
MR KENNETH JOSEPH HALL
NEWECONOMY COM AU NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
86,417,535
53,054,029
31,937,708
29,148,219
14,956,354
14,125,000
13,500,000
13,000,000
10,136,215
7,655,934
MR SAMUEL TIMOTHY HOSACK & MRS BARBARA TAMARA SAMANTHA HOSACK
7,220,854
BNP PARIBAS NOMS PTY LTD
FARVIC CONSOLIDATED MINES (PVT) LTD
ECAPITAL NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
ARMOURED FOX CAPITAL PROPRIETARY LIMITED
MRS SAMANTHA JAYNE GOLDBERG
BUTTONWOOD NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
18.69%
11.48%
6.91%
6.31%
3.24%
3.06%
2.92%
2.81%
2.19%
1.66%
1.56%
1.56%
1.54%
1.46%
1.37%
1.09%
0.88%
0.81%
0.76%
0.69%
7,210,651
7,123,260
6,759,396
6,323,724
5,018,028
4,085,153
3,721,883
3,519,301
3,212,103
20
MR TREVOR MILES BARNARD
Total
328,125,347
70.98%
Total issued capital - selected security class(es)
462,259,462
100.00%
78.
ASX Additional Information
Restricted securities
Class of Restricted Securities
Type of Restriction
Number on Issue
End Date
Fully Paid Ordinary shares
Voluntary Escrow
4,748,840
25% released every 6 months
Unquoted equity securities
Class of Unquoted Securities
Number on Issue
Number of Holders
Unlisted options
Other Information
-
-
The Company is not currently conducting an on-market buy back.
There are no issues of securities approved for the purposes of item 7 of section 611 of the Corporations Act 2001 (Cth) that
have not yet been completed.
No securities were purchased on-market during the reporting period under or for the purposes of an employees incentive
scheme or to satisfy the entitlements of the holders of options or other rights to acquire securities granted under an
employee incentive scheme.
Exploration and mining licenses granted
As at 30 June 2022, Prospect Resources Limited has interests in tenements via the following companies:
(1) Hawkmoth Mining and Exploration (Private) Limited ("Hawkmoth") - Chishanya Project
(2) Promin Resource Holdings (Pte) Ltd ("Promin") - Step Aside Project
Tenement Type &
Number
Tenement Name
Country
Project
Registered
Company Name
% Held at 30 June
2022
ME19948 BM
Step Aside
Zimbabwe
Step Aside
Promin
M2873 BM
Penga 9
Zimbabwe
Chishanya
Hawkmoth
M2874 BM
Penga 10
Zimbabwe
Chishanya
Hawkmoth
M2875 BM
Penga 11
Zimbabwe
Chishanya
Hawkmoth
M2876 BM
Penga 12
Zimbabwe
Chishanya
Hawkmoth
100%
70%
70%
70%
70%
79.
OverviewReview of OperationsASX Additional InformationFinancial ReportDirectors' ReportAnnual Report 2022 Prospect Resources
+61 405 524 960
info@prospectresources.com.au
Level 2, 33 Richardson Street
West Perth, WA 6005