2023 Annual Report
FOR THE YEAR ENDED 30 JUNE 2023
QEM LIMITED
ACN 167 966 770
QEM Limited
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Table of
Contents
Corporate Directory
Chairman’s Letter
Directors’ Report
Auditor’s Independence Declaration
Statement of Profit or Loss and Other
Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Schedule of Mineral Tenements
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QEM Limited
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Corporate
Directory
DIRECTORS
Timothy Wall
Gavin Loyden
David Fitch
Daniel Harris
Tony Pearson
SECRETARY
David Palumbo
REGISTERED OFFICE
Level 8
216 St Georges Terrace
Perth WA 6000
Ph: +61 8 9481 0389
Fax: +61 8 9463 6103
HEAD OFFICE
Level 6
50 Appel St
Surfers Paradise Q 4217
Australia
Ph: +61 7 5646 9553
AUDITORS
Hall Chadwick WA Audit Pty Ltd
283 Rokeby Road
SUBIACO WA 6008
SHARE REGISTRY
Automic Registry Services
Level 2, 267 St Georges Terrace
PERTH WA 6000
Email: info@qldem.com.au
Website: www.qldem.com.au
Phone (within Australia): 1300 288 664
Phone (outside Australia): +61 2 9698 5414
QEM Limited
QEM Limited
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Chairman’s Lettter
Dear Fellow Shareholders,
It is with great pleasure that I present QEM Limited’s 2023 Annual Report.
The 2023 financial year saw the Company progress significantly towards a number of key milestones for
the Julia Creek Vanadium and Oil Shale Project in North-West Queensland. Promising vanadium and oil
extraction results have continued at QEM’s pilot plant with subsequent vanadium recovery optimisation
work by GSA Environmental resulting in highest extraction results to date; oversubscribed placements
totalling $4.92M were completed; the Board’s composition has been enhanced to support the Company’s
purposeful advancement towards development; The University of Queensland’s Sustainable Minerals
Institute commenced mineral characterisation and fine particle beneficiation work focused on optimising
vanadium pentoxide grade; QEM secured two ongoing sources of vanadium-rich waste streams for
conversion to battery electrolyte; and the Company commenced the process of shortlisting bids from
global renewable energy companies to develop, own and operate the 1GW Julia Creek Renewables
Project adjacent to QEM’s flagship vanadium project.
Long duration energy storage will be imperative in the energy transition towards sustainable technologies
like wind and solar. Demand for Vanadium Redox Flow Batteries (VRFBs) is rapidly accelerating with
market penetration set to quadruple globally by 2030. With the reusable potential of vanadium in VRFBs,
this means that they are 100% recyclable and sustainable.
QEM is focused keenly on efficiently progressing towards first vanadium at an optimal moment when this
versatile metal is listed as ‘critical’ in Australia, the US, UK, the European Union and Japan.
It is notable that during the past 12 months, both the Australian Government and the Queensland State
Government both released refreshed Critical Minerals Strategies. The Australian Government released its
focus areas for 2023-2030, which include, developing strategically important projects, growing a skilled
workforce, and unlocking investment in enabling infrastructure and services. QEM is proud to be part of
the pipeline of critical minerals projects in this Tier 1 mining jurisdiction.
As part of the Queensland vanadium industry, QEM receives valuable support from the state government.
In January 2023, the Queensland Premier announced funding of $75M for the construction of the
Queensland Resources Common User Facility to demonstrate vanadium extraction at scale. Further, in
June 2023, the Premier announced the Queensland Critical Minerals Strategy and a $245 million
investment into the sector. Importantly for QEM, Queensland’s first Critical Minerals Zone was
established around Julia Creek and Richmond to support the region’s vanadium projects.
QEM continues its commitment to the principles of ESG as the most effective means of creating long-
term enterprise value by integrating ESG metrics into our governance, business strategy and performance
management processes. Every quarter since March 2022, QEM has tracked our disclosure progress and
demonstrated our sustainability performance against the Stakeholder Capitalism Metrics (SCM) of the
World Economic Forum (WEF). We continue to look for opportunities to bolster our ESG credentials.
I am honoured to serve as QEM’s Chair and I would like to thank previous Chair John Foley, my fellow
Directors, our hard-working team and our collaboration partners for their efforts and achievements this
year for your Company. I am delighted to welcome the post-FY23 addition of Tony Pearson to the QEM
Board, whose experience spans natural resources, infrastructure and government, while also raising our
finance, ESG and critical minerals expertise. The next 12 months will see QEM continue developing our
flagship Julia Creek Vanadium Project at pace.
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In closing, I thank QEM’s loyal shareholders for your continued support of our Company as we look
forward to an exciting year ahead.
Tim Wall
Non-executive Chair
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Directors’ Report
Your Directors present their report on QEM Limited (referred hereafter as “the Company”) for the financial
year ended 30 June 2023.
DIRECTORS
The names of the Directors of the Company in office during the financial year and up to the date of this
report are:
Timothy Wall (Non-Executive Chairman, appointed 15 February 2023)
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- Gavin Loyden (Managing Director)
- David Fitch (Non-Executive Director)
- Daniel Harris (Non-Executive Director)
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Tony Pearson (Non-Executive Director, appointed 24 August 2023)
John Foley (Non-Executive Director, resigned 15 February 2023)
John Henderson (Non-Executive Director, resigned 9 November 2022)
Unless noted above, all directors have been in office since the start of the financial year to the date of this
report.
COMPANY SECRETARY
David Palumbo
Details of the company secretary’s experience are set out below under ‘Information on Directors’.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the financial year was exploration at the Julia Creek vanadium
and oil shale project.
OPERATING RESULTS
Loss after income tax for the financial year was $4,561,319 (2022: $2,827,142).
FINANCIAL POSITION
The net assets of the Company at 30 June 2023 are $2,749,200 (2022: net assets of $1,820,506). The
Company’s working capital, being current assets less current liabilities is $1,672,976 at 30 June 2023
(2022: working capital of $1,102,424).
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DIVIDENDS PAID OR RECOMMENDED
No dividends were paid during the year and no recommendation is made as to dividends.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than those disclosed in this annual report, there were no significant changes in the state of affairs of
the Company that occurred during the financial year.
RISK MANAGEMENT
The Board of Directors review the key risks associated with conducting exploration and evaluation activities
in Australia and steps to manage those risks. The key material risks faced by the Company include:
EXPLORATION AND DEVELOPMENT
The future value of the Company will depend on its ability to find and develop resources that are
economically recoverable. Mineral exploration and development is a speculative undertaking that may be
impeded by circumstances and factors beyond the control of the Company. Success in this process
involves, among other things; discovery and proving-up an economically recoverable resource or reserve,
access to adequate capital throughout the project development phases, securing and maintaining title to
mineral exploration projects, obtaining required development consents and approvals and accessing the
necessary experienced operational staff, the financial management, skilled contractors, consultants and
employees.
The Company is entirely dependent upon its projects, which are the sole potential source of future revenue,
and any adverse development affecting these projects would have a material adverse effect on the
Company, its business, prospects, results of operations and financial condition.
ECONOMIC CONDITIONS
Factors such as (but not limited to) political movements, stock market fluctuations, interest rates, inflation
levels, commodity prices, foreign exchange rates, industrial disruption, taxation changes and legislative or
regulatory changes, may all have an adverse impact on operating costs, the value of the Company’s
projects, the profit margins from any potential development and the Company’s share price.
RELIANCE ON KEY PERSONNEL
The Company’s success is to a large extent dependent upon the retention of key personnel and the
competencies of its directors, senior management, and personnel. The loss of one or more of the directors
or senior management could have an adverse effect on the Company’s. There is no assurance that
engagement contracts for members of the senior management team personnel will not be terminated or
will be renewed on their expiry. If such contracts were terminated, or if members of the senior management
team were otherwise no longer able to continue in their role, the Company would need to replace them
which may not be possible if suitable candidates are not available.
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FUTURE FUNDING RISK
Continued exploration and evaluation is dependent on the Company being able to secure future funding
from equity markets. The successful development of a mining project will depend on the capacity to raise
funds from equity and debt markets. The Company will need to undertake equity/debt raisings for
continued exploration and evaluation. There can be no assurance that such funding will be available on
satisfactory terms or at all at the relevant time. Any inability to obtain sufficient financing for the Company’s
activities and future projects may result in the delay or cancellation of certain activities or projects, which
would likely adversely affect the potential growth of the Company.
UNFORESEEN EXPENDITURE RISK
Exploration and evaluation expenditures and development expenditures may increase significantly above
existing projected costs. Although the Company is not currently aware of any such additional expenditure
requirements, if such expenditure is subsequently incurred, this may adversely affect the expenditure
proposals of the Company and its proposed business plans.
ENVIRONMENTAL, WEATHER & CLIMATE CHANGE
The highest priority climate related risks include reduced water availability, extreme weather events,
changes to legislation and regulation, reputational risk, and technological and market changes. Mining and
exploration activities have inherent risks and liabilities associated with safety and damage to the
environment, including the disposal of waste products occurring as a result of mineral exploration and
production, giving rise to potentially substantial costs for environmental rehabilitation, damage control and
losses. Delays in obtaining approvals of additional remediation costs could affect profitable development
of resources.
CYBER SECURITY AND IT
The Company relies on IT infrastructure and systems and the efficient and uninterrupted operation of core
technologies. Systems and operations could be exposed to damage or interruption from system failures,
computer viruses, cyber-attacks, power or telecommunication provider’s failure or human error.
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FULL YEAR FY2023 REVIEW OF OPERATIONS:
QEM Limited is focused on the exploration and development of the Julia Creek Vanadium and Oil Shale
Project.
The Company’s flagship Julia Creek Project holds a 2,850Mt vanadium JORC Resource with an average
V2O5 content of 0.31%, with 360Mt in the Indicated category and 2,490Mt in the Inferred category, making
it one of the single largest vanadium deposits in the world, with the added benefit of a contingent (SPE-
PRMS 2018) in-situ oil resource of 79MMBBls of Oil equivalent in the 2C category, and 696MMBBLs in the
3C category, contained within the same ore body.
The Company controls 4, 100% owned exploration permits, which cover 249.6km² in the Julia Creek area
of North Western Queensland, Australia, form part of the vast Toolebuc Formation, which is recognised as
one of the world’s largest deposits of vanadium and oil shale.
In close proximity to all major infrastructure and services, the project is intersected by the main
infrastructure corridor of the Flinders Highway and the Great Northern Railway, connecting Mount Isa to
Townsville.
North West Minerals
Province Connection
Townsville
Queensland
Brisbane
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VANADIUM REVOLUTION
Vanadium is key ingredient used in steel production and acts as a hardening agent, providing strength and
durability whilst also reducing carbon emissions in the process. Increasingly vanadium is also used in the
energy storage market.
A successful transition to clean energy requires safe, cost-effective, and reliable energy storage systems.
Vanadium Redox Flow Battery (VRFB) is one of the most promising energy storage technologies for
effectively storing renewable energy. VRFB offers potential advantages owing to its durable and reusable
nature and high safety rating. VRFB is currently the most investigated and widely adopted energy storage
technology for long-duration, utility-scale energy storage applications. Hundreds of VRFB energy storage
systems have been installed worldwide, with many more under construction or planned. VRFB has the
highest potential to capture the largest market share of energy storage in the coming decades and is the
primary focus for QEM.
HIGHLIGHTS FOR THE REPORTING PERIOD
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Scoping study being developed by RPM Global
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Encouraging bench scale pilot plant results
- High yielding vanadium extraction methods
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- Circular economy project
2022 & 2023 exploration programs complete- awaiting update to JORC
Renewable power project attracts global developer interest
Board changes- appointments of Tim Wall and Tony Pearson
JULIA CREEK SCOPING STUDY
RPM Global completed a gap analysis in February 2023, prior to being engaged to conduct an updated
Scoping Study for the Julia Creek Project. RPM confirmed that the information provided by QEM is of a
sufficient standard and engineering accuracy for commencement of the scoping study.
The Scoping Study commenced on 31 March 2023 and is due for completion in Q3 2023. QEM completed
a mining scoping study in 2016 that focused on vanadium only, and with a smaller footprint. The project
has since developed with results from the pilot plant and vanadium extraction tests producing promising
results. The updated scoping study will focus on the production of both vanadium and transport fuel
products.
The scoping study will produce a mining model for both commodities, provide the initial mining schedule,
update the project economics and define the scope and flowsheet options for a Pre-Feasibility Study which
QEM intends to commence in 1H2024.
OIL & VANADIUM PILOT PLANT
After the successful commissioning of QEM’s bench-scale pilot plant in 2022, QEM conducted a total of 5
oil extraction trials (T1-T5), during the reporting period.
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T1- the first test encountered some issues regarding blockages caused by a build-up of solid deposits
(naphthalene) in the oil product, collection equipment, and related pipework.
T2 Results from the T2 trial were a significant improvement on T1, with oil extraction now reaching 170%
of yields, relative to an MFA or 1.7 times greater. A marked improvement on the 142% oil yield from T1.
Vanadium yields improved from 71.5% extraction in T1, to >90% extraction from T2 samples, based on the
feed to the leach test, for two samples roasted at 700°C and 900°C with a 24-hour leach time. These results
were announced on September 27, 2022.
T3-T5 The bench-scale pilot plant continued to operate effectively following the optimisation, with key run
targets for autoclave temperature and pressure achieved again and an oil yield of 180% of MFA achieved
on each occasion. In comparison, T1 delivered oil yields up to 142% greater than yields reported under an
MFA, and the yields from T2 were approximately 170% greater.
The mass balance closures for tests T3 to T5 and T4 to T5 (<2% error) showed a great improvement relative
to the earlier tests, indicating that changes to the pilot plant configuration including implementation of a
gas meter have led to improved performance. Building on the successful oil extraction testing program,
QEM commissioned a detailed petrology analysis on the Julia Creek project oil samples during the
December quarter.
On 31 May, HRL was engaged to conduct a further two pilot plant runs, with the aim of collecting samples
for further petrology analysis. These tests began post reporting period, with produced oil being sent to
Eurofins Scientific for analysis. Results will become available during the next reporting period.
Images: QEM’s bench scale pilot plant in HRL Laboratories Victoria; Julia Creek Oil Shale; Sample of raw oil produced from Julia
Creek shale, using QEM extraction techniques.
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VANADIUM BENEFICIATION AND EXTRACTION TESTS
GSA ENVIRONMENTAL
On 10 November 2022, QEM signed a technical collaboration with GSA Environmental Limited (GSAe). The
technical collaboration is focused on optimising Vanadium Pentoxide (V2O5) recovery from oil shale at the
Julia Creek vanadium and oil shale project.
GSAe has specific intellectual property relating to the extraction of vanadium from by-product materials,
such as petrochemicals, which aligns optimally with the nature of QEM’s Project. GSAe techniques have
the strong potential to result in lower carbon emissions and reduced waste at the Julia Creek project, when
compared against traditional roasting and acid leaching which would enhance the Project’s economics and
further bolster QEM’s ESG credentials.
GSAe was engaged to conduct comprehensive testing into multiple processes for extracting vanadium
from solids generated during shale oil recovery (ASX Announcement 10 Nov 2022). Samples of Julia Creek
oil shale (post-oil extraction from QEM’s pilot plant at HRL Melbourne) were subjected to leaching tests to
extract vanadium using a variety of reagents and methods.
Vanadium extraction rates achieved by both acid and alkaline leaching methods exceeded previous acid
extraction results (ASX Announcement 27 Sept 2022), whilst reagent consumption was improved
significantly over previous test work with further optimisation work still progressing.
Acid leaching yielded up to 98% extraction - highest rate to date. Alkali leaching routes also showed
promising results with 92% vanadium extraction achieved.
THE UNIVERSITY OF QUEENSLAND
On 14 December 2022, QEM announced the commencement of the first work order with the Company’s
new global industry, research and education partner, The University of Queensland’s Sustainable Minerals
Institute (UQ SMI), under an Umbrella Agreement signed between the parties on 29 September 2022. UQ
SMI is characterising the mineralogy of QEM’s Julia Creek shale post-oil extraction to assist in optimising
vanadium beneficiation to further improve V2O5 yields.
UQ SMI is utilising material produced from the successful testing at QEM’s bench-scale pilot plant and
integrates expertise across the mine life cycle. For this project with QEM, UQ SMI have brought together
experts in mineral surface chemistry, process mineralogy, ore and tailings, fine particle beneficiation
expertise and mining and geotechnical engineering. The team will analyse the Rare Earth Elements (REE)
hosted in the samples to determine if there is potential for economic recovery.
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JULIA CREEK RENEWABLES PROJECT
In July 2022, QEM completed the installation and commissioning of a 163-metre meteorological mast (met
mast) for the Julia Creek Renewables Project. The met mast, which was developed by Fulcrum 3D, was
fitted with anemometers and other instrumentation to measure wind speed and other meteorological
conditions. The mast has captured over 12 months of real-time data, needed to better understand the
potential for renewable power generation for the Julia Creek Project. The met mast compliments the
Fulcrum 3D SoDAR and Solar Monitoring Station installed in May 2022.
Image: Proximity of CopperString to QEM’s tenements
The objective of the wind and solar data gathered over the past year is to further inform the renewable
power generation optimisation study conducted by global engineering consultant GHD, which includes up
to 1GW of hybrid solar/wind generation capacity.
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Images: SODAR and Solar equipment installed on site at Julia Creek; 160m Met Mast commissioned on-site July 2022
Additional studies have been conducted over the past year to further de-risk the hybrid wind/solar farm.
Environmental assessments, topographic surveys, preliminary flood modelling and geotechnical studies
were completed at potential locations of wind turbines.
In February 2023, QEM established a data room containing relevant information pertaining to the
renewables project to allow interested parties to formulate indicative non-binding offers to build, own and
operate the hybrid wind/solar farm in Julia Creek.
QEM received a number of non-binding offers, indicating strong interest from global developers on the
Renewables Project located near Julia Creek (Refer: ASX announcement 31 May 2023). After assessing
the non-binding offers, QEM has shortlisted three potential developers, owners, and operators for one of
the State’s largest proposed renewable energy projects (ASX Announcement 3 July 2023):
- ACCIONA Energía;
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- Origin Energy and Energy Estate (joint venture).
Enel Green Power; and
Post reporting period, QEM is in active discussions with the three shortlisted parties.
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ANNOUNCEMENT OF COPPERSTRING 2.0 –
ACQUISITION BY QUEENSLAND GOVERNMENT
On 7 March 2023, the Queensland Premier Anastasia Palaszczuk released a joint statement with the
Queensland Treasurer Cameron Dick, Resources Minister Scott Stewart and Energy Minister Mick De Brenni
announcing that the Palaszczuk Government will deliver the 1,100 km CopperString project to unlock
Australia’s largest renewable energy zone and more than $500 billion dollars in new critical minerals in
North Queensland. Early works on the $5 billion CopperString project will start this year with construction
planned to commence next year. https://statements.qld.gov.au/statements/97314
CopperString 2032 will connect vast renewable wind and solar resources with critical minerals mining and
processing in the North West Minerals Provence (“NWMP”) and will be delivered as part of the $62 billion
Queensland Energy and Jobs Plan. Department of Energy and Public Works (epw.qld.gov.au)
“CopperString is the most significant investment in economic infrastructure in North Queensland in
generations. Unlocking affordable renewable energy and our critical minerals will benefit Townsville, Mount
Isa and every town in between – unlocking thousands of jobs and billions in investment,” said Queensland
Premier Annastacia Palaszczuk.
Construction is expected to support 800 direct jobs over six years and thousands of new jobs in critical
minerals mining, manufacturing and construction of renewables. Publicly owned transmission business
Powerlink will lead work on the project.
Image source: https://www.powerlink.com.au/projects/copperstring-2032
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DRILLING PROGRAMS
2022 DRILLING CAMPAIGN
In August 2022, QEM Limited completed an extended drilling campaign as part of QEM’s Julia Creek
Vanadium Project. The campaign targeted 17 locations across the QEM tenement and lasted 23 days. This
was a multipurpose drilling campaign that focused on resource exploration, groundwater bore installation
and geotechnical analysis. The drilling was conducted over four Exploration Permit for Minerals (EPM)
27057, 25662, 26429 and 25681 that QEM holds.
QEM engaged Measured Group as the lead resource geologist/ program manager and All State Drilling as
the drilling contractor. Epic Environmental and GHD were also present during the campaign to oversee the
construction of the groundwater monitoring bores and to conduct series of geotechnical tests respectively.
The 2022 drilling campaign consisted of 5 exploration holes, 9 groundwater bores and 5 geotechnical test
holes. In total 17 holes were drill as 2 were dual purpose, used for both exploration and groundwater bore
installation.
Exploration results were carried over to the 2023 program and will be added to the JORC Report at expected
in December 2023.
Image: 2022 drilling campaign
2023 DRILLING CAMPAIGN
QEM began planning for the 2023 drilling campaign in March 2023. The program includes 12 drilling
locations for the purpose of resource exploration and definition, geotechnical studies and water boreholes
and waste characterisation.
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QEM engaged Measured Group as the lead geologist/ program exploration managers, All State Drilling as
the drilling contractors, Cartledge Mining and Geotechnics (Cartledge) to supervise geotechnical
investigations and ATC Williams as the hydrogeologists to supervise groundwater bore installations.
Conduct and Compensation Agreements (CCAs) were issued and executed by the landholders in May and
the drilling program began, post reporting period on 10 July, with completion on 3 August 2023.
Post drilling, a 2D seismic survey will be conducted to determine the geological structure(s) and the
continuity of the resource across the project area. This survey will be conducted by Velseis Seismic
Technologies and is planned to commence post reporting period in September 2023.Updated JORC Report
expected post reporting period in December 2023.
Images: QEM 2023 drilling campaign and core samples
Image: 2023 drilling program
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Competent Persons Statement
*The information in this report that relates to the mineral resource and contingent resource estimates for the
Company’s Julia Creek Project was first reported by the Company in its IPO prospectus dated 20 August 2018
and supplementary prospectus dated 12 September 2018 (together, the “Prospectus”) and the subsequent
resource upgrade announcements (“Resource Upgrade”) dated 14 October 2019 and 7 April 2022. The
Company confirms that it is not aware of any new information or data that materially affects the information
included in the Prospectus and Resource Upgrade, and in the case of estimates of Mineral Resources and
Contingent Resources, that all material assumptions and technical parameters underpinning the estimates in
the Prospectus and Resource Upgrade continue to apply and have not materially changed.
ENVIRONMENTAL SURVEYS & STUDIES
ECOLOGY SURVEYS
On 15 November 2022, Epic Environmental (Epic) issued the Julia Creek Project Ecological Assessment
Report (EAR). The scope of the EAR includes a baseline assessment of the ecological values within QEM’s
tenement. The EAR was developed with information from desktop assessments, and extensive a post west
season flora and fauna field survey and a dry season flora field survey.
The EAR will support a future Environmental Impact Assessment under the State Development and Public
works Organisation Act 1971 or similar process to support a future Environmental Authority. The EAR may
also inform a future significant impact assessment to support a referral under the Environment Protection
and Biodiversity Conservation Act 1999.
Image: QEM Environmental baseline assessment map
FLOOD STUDY
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QEM engaged WRM Water and Environment (WRM) in September 2022 to undertake a Flood Study
Assessment of the tenement. The aim of the study is to provide a better understanding of flooding
constraints across the tenement to assist with the mine planning and preliminary infrastructure design.
WRM estimated Design Flood Discharge Hydrographs for a range of storm durations up to 168 hours for
Annual Exceedance Probabilities (AEPs) ranging from 0.1% to 10% AEP along with modelling two historical
flood events.
The memorandum and flood model were completed and delivered to QEM on 15 December 2022.
WATER MONITORING
In October 2022, QEM issued a work order to ATC Williams to conduct the monthly groundwater and
surface water quality monitoring program. ATC Williams is an international consulting engineering
company that specialises in design and management of tailing storage facilities and their associated
tailings dewatering and water distribution infrastructure.
The first ground and surface water monitoring event took place in November 2022; the monitoring program
will continue for a minimum of 12 months to characterise environmental baseline conditions and inform
the engineering design for tailings storage facilities. During the reporting period, ATC Williams and QEM
have conducted 7 monitoring campaigns around QEM’s tenement and Julia Creek.
Images: 2023 water monitoring campaign
WASTE CHARACTERISATION
In June 2023, QEM engaged RGS Environmental Consultants Pty Ltd (RGS) to conduct preliminary waste
characterisation assessments of the overburden and ore bodies throughout the project. RGS is a
specialised geosciences consulting and a leading provider of environmental management services to the
mining, energy, and mineral processing industry for 15 years.
The RGS’s scope is to provide soil quality, geochemical and physical characterisation of all major
geological units in the deposit from the topsoil to the deepest mined surface using available geological and
assay data, samples from metallurgical analytical programs, and samples from the 2023 drilling campaign.
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This information will be used to provide QEM with technical support to develop viable mine waste and mine
water management strategies through subsequent stages of the project.
GEOTECHNICAL STUDIES
On 11 November 2022, GHD Pty Ltd (GHD) issued a Geotechnical Factual Report outlining the Geotechnical
field investigation program conducted in August 2022. The report details site observations made,
investigations undertaken, ground conditions encountered, and the results of laboratory testing form
material collected from 5 boreholes. GHD also issued a Preliminary Geotechnical Foundation Assessment
Memorandum on 8 January 2023.
On 11 April 2023, QEM engaged Cartledge Mining and Geotechnics to conduct a preliminary geotechnical
investigation of the proposed mine pit to feed into the pre-feasibility study (PFS). Drilling for the
geotechnical study is being carried out as part of the 2023 JCP resource exploration campaign in July.
Cartledge Mining and Geotechnics provide geotechnical solutions and advisory services to the mining
industry. The team has global experience having worked in, Australia; England; Scotland; Wales; PNG;
Indonesia; America; Canada; South Africa; Madagascar; Suriname; Zambia; Zimbabwe; China; Mongolia;
Kazakhstan; Turkey; Chile; Brazil; Argentina; Colombia and, the Solomon Islands
WATER OPTIONS ASSESSMENT
QEM engaged ATC Williams on 31 October 2022 to complete a water options assessment for the Julia
Creek Vanadium Project. The study assessed the viability of sourcing reliable water from five sources:
Third party (supplemented) water
- Groundwater
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- Unsupplemented water – water harvesting from nearby watercourses
- Water trading
- Capture of site overland flow
The study was completed in February and two options were recommended for further investigation:
Seasonal water harvesting from the Flinders River
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- Potential for a common user pipeline from Cloncurry, utilising the water resources from Lake Julius
in NW Queensland
COMMON USER WATER PIPELINE
The North West Vanadium Supply Pipeline Project Study, conducted by Epic Environmental and Water
Resources Pty Ltd on behalf of the vanadium proponents surrounding Julia Creek/Richmond area, was
completed 13 April 2023 and presented to the Queensland Government in May.
An Opportunity and Constraints Assessment was prepared by Epic Environmental and Water Resources
Pty Ltd for QEM Limited, Richmond Vanadium Technology, Currie Rose Vanadium Pty Ltd, Critical Minerals
Group, and Vecco Group Pty Ltd (the Parties). The assessment considered the opportunities and
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constraints of two proposed pipeline options and identified the availability of 20,850 ML/a of secure water.
This water could be utilised by Critical Minerals Projects in the recently established Julia Creek-Richmond
Critical Minerals Zone, announced by the Queensland Minister for Resources on 27 June 2023. Strategy to
grow Queensland’s critical mineral sector - Ministerial Media Statements, such as QEM, as part of a
common user infrastructure approach to government, the intent of which is to gain support for this vital
piece of infrastructure.
The report includes the consideration of the current water demand and supply schemes, engineering design
and pipeline components, cost estimates, forecast supply tariffs, ownership models and commercial
considerations, environmental constraints and regulatory approvals required for each option.
The Queensland Government is now considering the proposal and investigating various potential funding
options.
VANADIUM EXTRACTION FROM INDUSTRIAL WASTE
During the reporting period, QEM entered into two agreements with Queensland sulphuric acid producers
for the off take of vanadium bearing spent catalyst.
These agreements were made with Sun Metals Corporation Pty Ltd (“SMC” or “Sun Metals”) and Incitec
Pivot Limited (ASX: IPL) (“IPL” or “Incitec”) on 7 March 2023 and 27 June 2023 respectively. The scope of
the agreements is for the off-take of all vanadium-bearing spent catalyst from Sun Metals operations in
Townsville and Incitec’s Mount Isa operations for five years with an option to extend.
This collaboration represents a Circular Economy opportunity where industrial waste can be repurposed to
a higher use. Spent catalyst recycling is an environmentally beneficial solution, without which valuable
metals like vanadium may be lost or sent to landfill.
The spent catalyst can be processed using standard, tested methods to extract high grade vanadium
pentoxide with >99% purity, a grade required to produce electrolyte for Vanadium Redox Flow Batteries
(VRFB), suitable for Long Duration Energy Storage (LDES) systems which will enable renewable power
projects in Queensland.
QEM commissioned Clean TeQ Water Pty Ltd (CNQ) to assess the viability of vanadium recovery from the
vanadium bearing spent catalyst.
The study established that 90% of the vanadium present in IPL’s spent catalyst is extractable using CNQ’s
proprietary methods. This can then be purified to >99% vanadium pentoxide (V2O5).
QUEENSLAND RESOURCES COMMON USER FACILITY (QRCUF)
In April 2023, the Queensland Government announced an increase of funding from $10m to $75m to
accelerate the development of the Queensland Resources Common User Facility (QR-CUF). This significant
funding commitment by the Queensland Government speaks to its recognition of the size of the opportunity
for Queensland critical minerals. The Queensland Government is inviting proponents to submit an
Expression of Interest demonstrating their capability to be the managing contractor responsible for the
design and construction of the QR-CUF. This is another significant step toward the delivery of this project,
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of which QEM is a founding participant with vanadium processing to be prioritised at the facility before
being expanded to other critical minerals.
On 20 June 2023, QEM presented Treasury and Department of Resources a proposal to bring forward stage
one of the QR-CUF and to install the equipment needed for vanadium extraction from spent catalyst,
collected from Sun Metals and IPL. This is equipment that will form part of the QR-CUF and can be utilised
by other users of the facility also. At the time of this report, QEM is still awaiting response on this proposal
to Treasury and Department of Resources regarding the QR-CUF.
CAPITAL RAISINGS
On 3 October 2022, QEM announced it had received firm commitments to raise $2.2m via an
oversubscribed placement to new and existing sophisticated and professional investors at 22 cents per
share. This was only a 1 cent discount to QEM’s closing price on 2 October 2022. The placement received
continued support from existing shareholders, including non-executive director and major shareholder
David Fitch, who subscribed for $600,000 to maintain his 28.7% shareholding. In tandem with existing cash
reserves, proceeds from the placement have fully funded QEM’s pilot plant program, including the
additional petrology, vanadium pentoxide processing and an update to the 2016 mining scoping study.
Complementing these activities, the funds have enabled QEM to undertake beneficiation and mineral
characterisation work with UQ SMI to further optimise the processing plan.
On 21 June 2023, QEM announced the completion of a $2.72 million placement of 16,000,000 new fully
paid ordinary shares at $0.17 per share. This includes a contribution by major shareholder and non-
executive director David Fitch for ~$765,000 to maintain his 28.7% shareholding in QEM, subject to
shareholder approval. Complementing existing cash reserves, proceeds from the placement will fully fund
QEM’s pilot plant program, including additional petrology and vanadium pentoxide processing flow sheet
optimisation. These works follow the successful second round of bench-scale pilot plant testing which
delivered a significant improvement in vanadium extraction rates and oil yields. Complementing these
activities, QEM will undertake beneficiation and mineral characterisation work with the University of
Queensland to further optimise the processing plan. In addition, funds have also been allocated to further
in-fill drilling and an update to the JORC report. These essential activities will underpin both the mining and
processing strategies and further positions QEM as a leading vanadium developer in Australia.
GOVERNMENT RELATIONS
Throughout FY2023, QEM has continued its engagement with the relevant all Queensland State
Government Departments who are key stakeholders in the progress and development of the Julia Creek
Project, whilst also providing strong support for the development of vanadium industry.
At the World Mining Congress in June 2023, the Queensland Premier announced the Queensland Critical
Minerals Strategy and a $245 million investment into the sector, including:
-
-
-
Reducing rent for new and existing exploration permits for minerals to $0 for the next five years
Establishing critical mineral zones, initially at Julia Creek/Richmond and around Mount Isa, to
support critical minerals projects
$75M to establish Critical Minerals Queensland, a one-stop office to oversee the development of
the sector
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-
Investment to target mining waste and tailings for critical minerals, and scientific research
including circular economy initiatives
- Delivering the $100M Critical Minerals and Battery Technology Fund to support new projects
QEM is set to take advantage of these initiatives as the Company progresses the development of the Julia
Creek Project.
Image: World Mining Congress, June 2023. (L to R: QEM Chair Tim Wall, Communications Director Joanne Bergamin, Qld Premier
Annastacia Palaszczuk, Minister for Resources Scott Stewart
R&D TAX INCENTIVE REFUND
On December 23rd QEM received the R&D tax incentive rebate for a total of $440,477 for financial year
2021/2022. These funds will be reinvested into the on-going project development.
BOARD APPOINTMENTS
TIMOTHY WALL
On 12 October 2022 QEM announced the appointment of Tim Wall as a non-executive director to further
enhance QEM’s board.
Mr Wall is a highly experienced company director and executive across the energy, infrastructure, transport
and resources sectors, with a strong leadership track record at multiple ASX100 companies.
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Mr Wall was elevated to the role of Deputy Chair following the Company's Annual General Meeting on 17
November 2022 and subsequently Chair after former Chair John Foley stepped down from the board on 15
February 2023.
TONY PEARSON
On 24 August 2023 QEM appointed former HSBC Managing Director Mr Tony Pearson to the Company’s
Board of Directors as a Non-executive Director.
Mr Pearson is a highly experienced company director with 10 years’ experience on Australian, Toronto and
Hong Kong Stock Exchange-listed companies, government, and not-for profit boards.
Mr Pearson’s experience spans natural resources, infrastructure, and State and Federal Government. He is
currently Chair of Possability Group Limited (“Possability”) and ASX-listed company, Cellnet Group Limited.
He also serves as a Non-Executive Director of ASX listed Xanadu Mines and not-for-profit Communicare.
His experience includes a variety of senior positions as a finance and investment professional, most
recently as Managing Director at HSBC (Hong Kong Shanghai Banking Corporation) and prior to that as
Group Executive at SouthGobi Resources and was previously Chair of ASX-listed Peak Rare Earths.
The QEM Board believes his knowledge and experience will be pivotal in bringing the project from the pre-
feasibility to development stage.
ESG AND COMMUNITY RELATIONS
The end of FY23 marks the sixth consecutive quarter that QEM is monitoring and disclosing the Company’s
ESG progress and initiatives via Socialsuite’s ESG Go platform.
QEM’s ESG reporting is based on the 21-core metrics set by the World Economic Forum (WEF), as part of
WEF’s standardised and globally recognised Stakeholder Capitalism Metrics ESG framework. ESG
highlights for QEM follow, including this graphic summary of the Company’s ESG focus. These core areas
will be continually updated with the input of stakeholder feedback.
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COMMUNITY
Investment in our community is a high priority for QEM.
In 2022, QEM invested in a permanent presence in the town of Julia Creek, just 6km from our flagship
vanadium project. QEM leased the property which was formerly the Suncorp Bank, for office space and
employee accommodation.
In the first quarter of 2023, QEM employed local tradespeople to renovate the premises, ready for the
official opening on 17 April 2023 by Mayor of McKinlay Shire Council Philip Curr during the MITEZ Vanadium
Forum in Julia Creek.
The opening of QEM's Julia Creek Office was attended by 150 MITEZ (Mount Isa to Townsville Economic
Development Zone Inc.) members and industry leaders, local government councillors, state and federal
government representatives, including Senator Susan McDonald, as well as the company's vanadium
resource optimisation partners from the University of Queensland's Sustainable Minerals Institute.
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Image: Official opening of QEM’s Julia Creek Office, 17 April 2023
Throughout the FY2023, QEM contributed to the region with a dozen work packages being assigned to local
contractors in Julia Creek and the North West Minerals Province, for work including fabrication, plant hire,
civil site works, building renovations, as well as preparation for QEM’s 2023 drilling campaign and general
property maintenance.
QEM also seeks to support the greater communities in which we operate, with a particular focus on youth
and women's development, education and sport.
QEM proudly sponsors the Julia Creek Saints junior girls and boys and senior rugby league teams, as well
as the annual Town vs Country Women’s Netball, Juniors and Seniors’ Rugby League.
QEM was a major sponsor of the 2023 Julia Creek Dirt N Dust Festival in April, and again in June, a major
sponsor for the Saxby Roundup weekend – camp draft, rodeo, kids events and entertainment.
Also in June 2023, QEM was pleased to be a Bronze Sponsor of the Isolated Children’s Parents’ Association
Queensland Inc. Conference held in Julia Creek, dedicated to ensuring rural and remote students have
equity of access to a continuing and appropriate education.
The company's Managing Director Gavin Loyden, who is based on the Gold Coast, raised $5,300 for the
homeless when he slept out on 22 June for the Vinnies CEO Sleepout. Also on the Gold Coast, QEM
sponsored a table at the "Investing in Women in Resources" event, organised by Joanne Bergamin, QEM's
Director of Communications & Sustainability, and President of Women in Mining and Resources (WIMARQ)
Gold Coast. QEM also fully supports Ms Bergamin in her volunteering for St Vincent de Paul Society and
participating regularly in resources industry STEM days at local girls' school, St Hilda's.
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The Company will continue to support its peoples' participation in community-based events and review its
level of economic contribution, commensurate with its activities.
INFORMATION ON DIRECTORS
TIM WALL – NON-EXECUTIVE CHAIRMAN – APPOINTED 15 FEBRUARY 2023 (APPOINTED AS NON-
EXECUTIVE DIRECTOR 12 OCTOBER 2022)
GAICD, MIE Aust, CPEng, RPEQ
Background
Mr Wall is a experienced ASX chair and company executive across energy, infrastructure, transport and
resources sectors, with a strong leadership track record at multiple ASX100 companies. His impressive list
of recent achievements includes driving a strategic shift in manufacturing while President of Global
Manufacturing and Corporate HSE for Incitec Pivot. He also delivered highly successful operational
outcomes while occupying senior managerial positions at Caltex Australia and BP Australia.
Mr Wall currently serves as a Senior Advisor – Oil and Gas at management consultant dss+ and as a
Director for energy consultant TJW Energy, with specific expertise in hydrogen and ammonia
manufacturing, storage and transportation, and energy storage technologies.
Mr Wall brings strong ESG credentials to the QEM Board, exemplified by his four-year board tenure on the
not-for-profit National Association of Women in Operations.
Interest in securities
100,000 Ordinary Shares
600,000 Options exercisable at $0.345 on or before 12 August 2025
Directorships held in other listed entities in the past three years
None
GAVIN LOYDEN – MANAGING DIRECTOR
M.A.I.C.D
Background
Gavin Loyden is the Founder and Managing Director of QEM Limited, having identified and acquired the
significant dual commodity resource at Julia Creek. Mr Loyden is responsible for QEM’s early capitalisation,
initial exploration program and project development. He has over a decade of experience in the mining
industry.
Prior to founding QEM, Mr Loyden assisted a range of companies from early stage development through
to international stock market listings. He has extensive experience in the structuring of capital raising
proposals for both private and public companies, executive selection, and Corporate Governance. Mr
Loyden is a member of the Australian Institute of Company Directors.
Interest in securities
20,654,936 Ordinary Shares
2,000,000 Options exercisable at $0.345 on or before 12 August 2025
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Directorships held in other listed entities in the past three years
None
DAVID FITCH – NON-EXECUTIVE DIRECTOR
B.Com. B.Juris., GAICD
Background
Mr Fitch was previously the Chief Operating Officer and joint major shareholder of the Fitch Group – a group
of companies with assets in excess of $250 million spread across the commercial, residential,
manufacturing, retail and hotel industries.
He has extensive experience in strategic planning, commercial negotiations, business operations and asset
management, with a particular focus on greenfield development sites for the commercial / retail sectors
and residential development.
Mr Fitch is also actively involved as director of BioCentral Laboratories Ltd, a company producing advanced
products for the firefighting
in addition to dust suppressants for mining and road
construction. Mr. Fitch is also the largest shareholder of QEM.
industry,
Interest in securities
43,440,477 Ordinary Shares
1,000,000 Options exercisable at $0.345 on or before 12 August 2025
Directorships held in other listed entities in the past three years
None
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DANIEL CLIFFORD HARRIS – NON-EXECUTIVE DIRECTOR
B.Sc (Chem Eng)
Background
Mr Daniel Harris is a seasoned and highly experienced mining executive and director. He has most recently
held the role of interim CEO and managing director of ASX listed Atlas Iron, a mid-sized, independent
Australian iron ore mining company with operations in the Northern Pilbara of Western Australia.
Mr Harris has been involved in all aspects of the vanadium industry for over 45 years and held both COO
and CEO positions in Atlantic Ltd. The company's subsidiary, Midwest Vanadium, owned a +$500 million-
dollar production plant and vanadium mine in Western Australia. As COO, Daniel was tasked with the start-
up of the newly constructed vanadium plant and brought it into commercial operation.
Mr Harris is also the former Vice President of EVRAZ Plc, Vanadium Assets responsible for their global
vanadium business. EVRAZ plc is a £4.2 billion publicly traded steel, mining and vanadium business with
operations in the Russian Federation, Ukraine, Europe, USA, Canada and South Africa. EVRAZ consolidated
vanadium business produced and marketed approximately one third of the world's vanadium supply, with
annual turnover, in excess of $600 million dollars.
Prior to EVRAZ, Mr Harris held numerous positions with Strategic Minerals Corporation. Throughout his 30
years with the company, he advanced his career from junior engineer, through to CFO and CEO roles within
the group and was responsible for increasing the capacity of the Hot Springs Project by 50%.
Mr Harris is a non-executive director on the Board of Australian Vanadium Ltd, a Perth based vanadium
company now finalizing a DFS for their Gabanintha vanadium project. Additionally, Mr Harris is an
Executive Director and member of the board of U. S. Vanadium, Ltd, a US based vanadium producer of high
purity vanadium oxides and chemicals, and a Non-executive Director of Red Hawk Mining, and ASX listed
iron ore company.
Mr Harris also acts as a technical executive consultant to GSA Environmental in the UK, a process
engineering company that is well credentialed in the vanadium and oil industries. GSA is the UK's leading
technology company for extraction and recovery of metals from ashes, minerals, refinery residues, spent
catalyst and industrial by-products.
Mr Harris brings a wealth of experience, in all aspects of mining and project development and will assist
QEM in creating a world class project in Queensland, Australia.
Interest in securities
600,000 Options exercisable at $0.345 on or before 12 August 2025
Directorships held in other listed entities in the past three years
Australian Vanadium Limited (current)
Red Hawk Mining (previously Flinders Mines Limited) (current)
Atlas Iron Limited
Paladin Energy Ltd
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TONY PEARSON – NON-EXECUTIVE DIRECTOR – APPOINTED 24 AUGUST 2023
B.Comm. (with Merit) UNSW, MAICD
Background
Mr Pearson’s experience spans natural resources, infrastructure, and State and Federal Government. He is
currently Chair of Possability Group Limited. He also serves as a Non-Executive Director of ASX-listed
Xanadu Mines, a Trustee of the Royal Botanic Garden & Domain Trust, and a non-executive director of not-
for-profit Communicare. Mr Pearson was previously Chair of ASX-listed Peak Rare Earths and Cellnet Group
Limited, as well as a Commissioner at the Independent Planning Commission. His executive experience
includes a variety of senior positions as a finance and investment professional, most recently as Managing
Director at HSBC (Hong Kong Shanghai Banking Corporation) and prior to that as Group Executive at
SouthGobi Resources.
Mr Pearson’s experience also bolsters the Board’s ESG credentials. He is the Chair of Possability, a leading
human services organisation in disability and youth services. As a Commissioner at the Independent
Planning Commission, he determined state significant development projects, with a need to consider
environmental and other stakeholder impacts, across natural resource, wind and solar farm projects. As a
former Senior Advisor to Regnan, Mr Pearson provided ESG advice to some of Australia’s largest
institutional shareholders.
Interest in securities
225,000 Share Performance Rights Expiry 26 August 2026 – vesting conditions disclosed on ASX
150,000 Share Performance Rights Expry 26 August 2027 – vesting conditions disclosed on ASX
Directorships held in other listed entities in the past three years
Xanadu Mines Ltd (current)
Cell Group Limited
Peak Rare Earths Ltd
JOHN JOSEPH FOLEY – NON-EXECUTIVE CHAIRMAN – RESIGNED 15 FEBRUARY 2023
B.D., LL.B., B.L. (Dub), KHS., F.A.I.C.D. Barrister-at-Law
Background
Graduating in law from the University of Sydney in 1969, Mr John Foley was admitted to practice as a
barrister in New South Wales in 1971. He was subsequently admitted to practice in the jurisdictions of
Victoria, ACT, the High Court of Australia and Ireland. He graduated with the post graduate degree of
Barrister-at-Law from Trinity College Dublin and was called to the Irish Bar and admitted as a Member of
the Honourable Society of King's Inns in Dublin. Mr Foley spent two years as a lecturer in law at Macquarie
University Sydney and has practiced as a Barrister for 40 years.
He is also currently a director of two public companies listed on the ASX, namely Citigold Corporation
Limited (ASX: CTO) and Hudson Investment Group Limited (ASX:HGL). John was a founding director of the
Australian Gold Council, the industry body. He is a long standing member and fellow of the Australian
Institute of Company Directors and he is listed in Who's Who in Business in Australia.
Mr Foley has wide-ranging experience in the resources, financial and investment related industries, with
extensive business experience in Australia and overseas. His leadership roles have covered a broad scope
of senior positions, and his commercial and legal background will provide further depth, knowledge and
experience to any enterprise.
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Mr Foley has a large network of connections with people in government, industry and the Investment
community. As a professional advocate he has represented industry bodies before various Commissions,
Tribunals and Courts and has extensive experience in negotiations and representations with both State and
Federal Governments.
Interest in securities
884,299 Ordinary Shares
600,000 Options exercisable at $0.345 on or before 12 August 2025
Directorships held in other listed entities in the past three years
Citigold Corporation Limited (current)
Hudson Investment Group Limited (current)
JOHN HENDERSON – NON-EXECUTIVE DIRECTOR – RESIGNED 9 NOVEMBER 2022
Background
Mr John Henderson is a Non-Executive Director, Advisory Board Member, Director and project development
specialist with 40 years industry experience in the mining, oil & gas and energy sectors. He has deep,
experience-based understanding of major project development processes and governance.
Since 2016, Mr Henderson has been a minority shareholder of Siecap Pty Ltd, which provides project
management advisory and consultancy services to mining, petroleum and energy clients. His executive
career has included senior project development and delivery assignments for multi-national energy,
resource and petroleum companies including BHP, Rio Tinto and Mobil, as well as large engineering
consulting and construction companies. In 2011 he founded Inkwazi Energy, a boutique advisory firm that
has provided advisory and strategic consulting to governments and agencies in developing nations.
Interest in securities
135,000 Ordinary Shares
600,000 Options exercisable at $0.345 on or before 12 August 2025
Directorships held in other listed entities in the past three years
None
COMPANY SECRETARY
DAVID PALUMBO
Mr Palumbo is a Chartered Accountant and a graduate of the Australian Institute of Company Directors
with over fifteen years’ experience in company secretarial, accounting and financial reporting of ASX listed
and unlisted companies, including five years as an external auditor. Mr Palumbo is an employee of Mining
Corporate and provides corporate advisory, financial management and corporate compliance services. He
has acted as Company Secretary for numerous ASX listed companies, assisted with multiple ASX IPO’s
and currently serves on the Board of Krakatoa Resources Limited, Albion Resources Limited and Rubix
Resources Limited.
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REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each director of QEM Limited and for the
executives receiving the highest remuneration.
1. Employment Agreements
On 7 April 2022, Gavin Loyden’s Remuneration package was reviewed by the board and it was deemed
appropriate to increase his remuneration package to $291,500 per annum plus superannuation effective
from 1 July 2022. Previously, on 25 May 2021, Gavin Loyden agreed to a variation from his inital executive
employment agreement with the Company. Per the variation, Mr Loyden’s annual salary was $275,000 plus
superannuation. Either party may terminate this Agreement by providing written notice to the other party
by providing three (3) months’ prior notice.
Appointments of non-executive directors are formalised in the form of service agreements between
themselves and the Company at a rate of $31,800 per annum. Their engagements have no fixed term but
cease on their resignation or removal as a director in accordance with the Corporations Act. Mr Tim Wall
was appointed as a non-executive director on 12 October 2022. His agreement is consistent with other
non-executive directors and his remuneration has been awarded on a pro-rata basis since his appointment.
2. Remuneration policy
The Company’s remuneration policy has been designed to align director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component and offering specific
long-term incentives based on key performance areas affecting the Company’s financial results. The board
believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best
executives and directors to run and manage the Company, as well as create goal congruence between
directors, executives and shareholders.
The board’s policy for determining the nature and amount of remuneration for board members and senior
executives of the Company is as follows:
-
The remuneration policy, setting the terms and conditions for the executive directors and other
senior executives, was developed by the board;
- All executives receive a base salary (which is based on factors such as length of service and
experience), superannuation and are entitled to the issue of share options. The remuneration
committee reviews executive packages annually by reference to the Company’s performance,
executive performance and comparable information from industry sectors.
The performance of executives is measured against criteria agreed annually with each executive and is
based predominantly on the forecast growth of the Company’s shareholders’ value. The board may,
however, exercise its discretion in relation to approving incentives, bonuses and options, and can
recommend changes to the committee’s recommendations. Any changes must be justified by reference to
measurable performance criteria. The policy is designed to attract the highest calibre of executives and
reward them for performance that results in long-term growth in shareholder wealth.
Executives are also entitled to participate in the employee share and option arrangements.
Any executive director, who is an Australian resident for tax purposes, receives a superannuation guarantee
contribution required by the government, which was 10.5%. No other retirement benefits are paid.
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2023 Annual Report | Directors’ Report qldem.com.au
All remuneration paid to directors and executives is valued at the cost to the Company and expensed, or
capitalised to exploration expenditure if appropriate. Options, if given to directors and executives in lieu of
remuneration, are valued using the Black-Scholes methodology.
The board policy is to remunerate non-executive directors at market rates for time, commitment and
responsibilities. The remuneration committee determines payments to the non-executive directors and
reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required. The maximum aggregate amount of fees that can be
paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. Fees
for non-executive directors are not linked to the performance of the Company. However, to align directors’
interests with shareholder interests, the directors are encouraged to hold shares in the Company.
3. Options issued as part of remuneration for the year ended 30 June 2023:
During the financial year, the Board were issued 5,400,000 incentive options exercisable at $0.345 expiring
12 August 2025. Options issued to directors were ratified at the Annual General Meeting of shareholders
on 17 November 2022.
4. Details of remuneration for the year ended 30 June 2023:
The remuneration for each key management personnel of the Company during the period was as follows:
2023
Short-term
Benefits
Post-
employment
Benefits
Other
Long-
term
Benefits
Share based
Payments
Total
Perfor
-
mance
Relate
d
% of Options
as
Remuneratio
n
Key Management
Person
Cash, salary &
commissions
$
Super-
annuation
$
Other
Equity
Options
$
$
$
$
%
%
Directors
John Foley1
David Fitch
Daniel Harris
Gavin Loyden
John Henderson2
Tim Wall3
53,000
31,800
31,800
-
3,339
-
291,500
30,608
10,600
22,824
2,968
2,397
441,524
39,312
-
-
-
-
-
-
-
-
-
-
-
-
73,860
126,860
123,100
158,239
73,860
105,660
246,200
568,308
73,860
87,428
69,341
94,562
660,221 1,141,057
-
-
-
-
-
-
-
58
78
70
43
84
73
58
2022
Short-term
Benefits
Key Management
Person
Cash, salary &
commissions
$
Post-
employment
Benefits
Super-
annuation
$
Other
Long-term
Benefits
Other
Share based
Payments
Total
Perfor-
mance
Related
% of Options
as
Remuneration
Equity
Options
$
$
$
$
%
%
Directors
John Foley
David Fitch
Daniel Harris
Gavin Loyden
John Henderson
30,000
30,000
30,000
-
3,000
-
275,000
27,500
21,300
2,105
386,300
32,605
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,000
33,000
30,000
302,500
23,405
418,905
-
-
-
-
-
-
-
-
-
-
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2023 Annual Report | Directors’ Report qldem.com.au
1 John Foley resigned from his positon as Non-Executive Chairman effective 15 February 2023.
2 John Henderson resigned from his position as Non-Executive Director effective 9 November 2022.
3 Tim Wall was appointed as a Non-Executive Director on 12 October 2022, and successed John Foley as
Non-Executive Chairman on 15 February 2023.
5. Equity holdings of key management personnel
Shareholdings
Number of ordinary shares held by key management personnel during the financial year ended 30 June 2023
was as follows:
30 June 2023
Balance at beginning of year
Net change
other
Balance at end of year
Directors
John Foley*
David Fitch
Daniel Harris
Gavin Loyden
John Henderson*
Tim Wall
Optionholdings
884,299
32,661,432
-
20,641,113
135,000
-
54,321,844
-
6,278,523
-
13,823
-
100,000
6,392,346
884,299
38,939,955
-
20,654,936
135,000
100,000
60,714,190
Number of options held by key management personnel during the financial year ended 30 June 2023 was as
follows:
30 June 2023
Balance at beginning of year
Net change
other
Balance at end of year
Directors
John Foley*
David Fitch
Daniel Harris
Gavin Loyden
John Henderson*
Tim Wall
-
-
-
-
-
-
-
600,000
1,000,000
600,000
2,000,000
600,000
600,000
5,400,000
600,000
1,000,000
600,000
2,000,000
600,000
600,000
5,400,000
* Resigned during the financial period.
6. Other Key Management Personnel Transactions
During the year ended 30 June 2023, the Company paid consulting fees to Daniel Harris totalling $74,200
(2022: $70,000). The Company also incurred fees of $407,899 plus GST (2022: $716,921 plus GST), to
Siecap Pty Ltd for the financial year ended 30 June 2023 under the project management agreement
announced to ASX on 20 April 2021. Siecap Pty Ltd is an entity in which John Henderson (resigned 9
November 2022) is a minority shareholder and maintains an advisory role.
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2023 Annual Report | Directors’ Report qldem.com.au
On 3 June 2022, the Company entered into a rental agreement with CL Fitch Pty Ltd, a related party entity
of David Fitch for a premises in Julia Creek. The rental agreement is for a term of 12 months and is rented
to the Company for $30,000 per annum. The Company paid CL Fitch Pty Ltd $30,000 (exc GST) in relation
to this agreement in financial year 2023 (2022: $2,250).The Company incurred no other transactions with
related parties.
“End of Remuneration Report (Audited)”
AFTER BALANCE DATE EVENTS
On 24 August 2023 the Company issued 4,500,000 fully-paid ordinary shares to David Fitch at $0.17 per
share to raise $765,000. The shares were placed as part of the 27 June 2023 capital raise and were issued
after receiving shareholder approval at the general meeting held on 24 August 2023.
On 25 September 2023, the Company entered into a unsecured loan facility from Non-Executive Director
David Fitch. Under the facility, the company will receive an initial A$1 million tranche of funding and the
ability to call for an additional A$1 million at the election of QEM at any time in the period 6 months after
commencement of the Facility. The Facility bears an interest rate of 10.0% per annum on the drawn
amounts that is payable at maturity (12 months). QEM may at its election at any time up to the date that is
9 months after the commencement of the Facility, repay the amount owing under the Facility (in whole or
in part) by way of the issue of shares in QEM (subject to shareholder approval first being obtained).
No other matters or circumstances have arisen since the end of the financial period which significantly
affected or may significantly affect the operations of the Company, the results of those operations, or the
state of affairs of the Company in future financial years.
FUTURE DEVELOPMENTS
Likely developments in the operations of the Company and the expected results of those operations in
future financial years have not been included in this report as the inclusion of such information is likely to
result in unreasonable prejudice to the Company.
MEETINGS OF DIRECTORS
During the financial year, 5 meetings of directors were held. Attendances by each director during the period
were as follows:
Directors’ Meetings
Number eligible to attend
4
3
5
5
5
2
Number attended
4
3
5
5
5
2
Tim Wall
John Foley
David Fitch
Daniel Harris
Gavin Loyden
John Henderson
ENVIRONMENTAL ISSUES
The Company is not aware of any breaches in relation to environmental matters.
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2023 Annual Report | Directors’ Report qldem.com.au
OPTIONS
At the date of this report, there were 5,850,000 unissued ordinary shares of the Company under option.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
INDEMNIFYING OF OFFICERS
During the year the Company paid premiums in respect of a contract insuring all the directors and officers
of the Company against liabilities, past, present and future.
In accordance with normal commercial practice, the disclosure of the total amount of premiums under and
the nature of the liabilities covered by the insurance contract is prohibited by a confidentiality clause in the
contract.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors
support, and adhere to, good corporate governance practices. Refer to the Company’s Corporate
Governance Statement at www.qldem.com.au.
NON-AUDIT SERVICES
There were no fees paid or payable to the external auditors for non-audit services provided during the year
ended 30 June 2023.
AUDITOR’S DECLARATION OF INDEPENDENCE
The auditor’s independence declaration for the year ended 30 June 2023 has been received and is included
within the financial statements.
Signed in accordance with a resolution of directors.
Gavin Loyden
Managing Director
27 September 2023
QEM Limited
36
To the Board of Directors
AUDITOR’S
CORPORATIONS ACT 2001
INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
As lead audit director for the audit of the financial statements of QEM Limited for the financial year ended 30
June 2023, I declare that to the best of my knowledge and belief, there have been no contraventions of:
•
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours Faithfully,
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated this 27th day of September 2023
Perth, Western Australia
Annual Financial Report qldem.com.au
Statement of Profit or Loss and Other
Comprehensive Income
Note
2023
2022
$
$
Revenue
Corporate and compliance expenses
Investor relations and marketing expenses
Travelling expenses
Employee benefits expense
Exploration expenditure
Share based payments expense
Depreciation expense
Foreign exchange
Other expenses
Loss from continuing operations before income tax
benefit
Income tax expense
Loss from continuing operations after income tax benefit
2
12
453,398
(302,596)
(188,467)
(260,315)
(406,956)
(2,639,248)
(752,451)
(241,904)
(11,058)
(211,722)
256,769
(248,746)
(120,673)
(55,285)
(273,717)
(2,132,103)
-
(81,996)
-
(171,391)
3
(4,561,319)
-
(2,827,142)
-
(4,561,319)
(2,827,142)
Other comprehensive income, net of tax
-
-
Total comprehensive loss attributable to Members of the
parent entity
(4,561,319)
(2,827,142)
Basic and diluted loss per share (cents)
4
(3.46)
(2.51)
The accompanying notes form part of these financial statements.
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38
Annual Financial Report qldem.com.au
Statement of Financial Position as at
30 June 2023
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Right of Use Asset
Total Current Assets
Non Current Asset
Other Assets
Right of Use Asset
Plant and Equipment
Total Non Current Asset
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Lease Liabilities
Provisions
Total Current Liabilities
Non Current Liabilities
Lease Liabilities
Non Current Liabilities
Total Liabilities
Net Assets
EQUITY
Issued capital
Reserves
Accumulated losses
Total Equity
2023
$
2022
$
Note
5
6
7
9
7
9
10
8
9
9
1,970,158
117,555
96,858
91,828
2,276,399
19,450
30,609
1,062,649
1,112,708
3,389,107
392,026
104,198
107,199
603,423
36,484
36,484
639,907
1,425,475
184,925
77,530
91,828
1,779,758
19,450
122,437
716,877
858,764
2,638,522
518,648
94,651
64,035
677,334
140,682
140,682
818,016
2,749,200
1,820,506
11
12
16,230,949
724,869
(14,206,618)
2,749,200
11,448,721
17,084
(9,645,299)
1,820,506
The accompanying notes form part of these financial statements.
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39
Annual Financial Report qldem.com.au
Statement of Changes in Equity for
the year ended 30 June 2023
Issued Capital Reserves
$
$
Accumulated
losses
$
Total
$
Balance at 1 July 2021
7,937,665
17,084
(6,818,157)
1,136,592
Issue of shares (net)
Loss after income tax expense for the
year
Options issued during the period
Other comprehensive income for the
year,
Balance at 30 June 2022
net of tax
Issue of shares (net)
Loss after income tax expense for the
year
Options issued during the period
Other comprehensive income for the
year,
Balance at 30 June 2023
net of tax
3,511,056
-
-
-
-
-
-
(2,827,142)
-
3,511,056
(2,827,142)
-
-
11,448,721
-
17,084
-
(9,645,299)
-
1,820,506
4,782,228
-
-
-
-
707,785
-
(4,561,319)
-
4,782,228
(4,561,319)
707,785
-
16,230,949
-
724,869
-
(14,206,618)
-
2,479,200
The accompanying notes form part of these financial statements.
QEM Limited
40
Annual Financial Report qldem.com.au
Statement of Cash Flows for the year
ended 30 June 2023
Cash Flows from Operating Activities
Payments for exploration and evaluation
Payments to suppliers and employees
Interest received
Grants received
Net Cash (Outflow) from Operating Activities
Note
15
Cash Flows from Investing Activities
Payments for plant and equipment
Net Cash (Outflow) from Investing Activities
Cash Flows from Financing Activities
Lease repayments
Payments for capital raising costs
Proceeds from issued capital
Net Cash Inflow from Financing Activities
Net Increase in cash held
Cash and cash equivalents at the beginning of the
year
Cash and cash equivalents at the end of the year
5
2023
$
2022
$
(2,733,877)
(1,220,722)
12,921
440,477
(3,501,201)
(2,117,253)
(809,110)
1,663
256,497
(2,668,203)
(608,684)
(608,684)
(684,503)
(684,503)
(73,449)
(147,893)
4,875,910
4,654,568
544,683
1,425,475
1,970,158
(59,799)
(184,394)
3,695,900
3,451,707
99,001
1,326,474
1,425,475
The accompanying notes form part of these financial statements.
QEM Limited
41
Annual Financial Report qldem.com.au
Notes to the Financial Statements for
the year ended 30 June 2023
1.
Statement of Significant Accounting Policies
These financial statements and notes represent those of QEM Limited (the “Company”). QEM Limited is a
listed public Company, incorporated and domiciled in Australia. The financial statements were authorised
for issue on 27 September 2023 by the directors of the Company.
BASIS OF PREPARATION
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
a financial report containing relevant and reliable information about transactions, events and conditions to
which they apply. Compliance with Australian Accounting Standards ensures that the financial statements
and notes also comply with International Financial Reporting Standards as issued by the IASB. Material
accounting policies adopted in the preparation of this financial report are presented below. They have been
consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs modified by
the revaluation of selected financial assets for which the fair value basis of accounting has been applied.
All amounts are presented in Australian dollars unless otherwise stated.
GOING CONCERN
The financial report has been prepared on the going concern basis which contemplates the continuity of
normal business activity, the realisation of assets and the settlement of liabilities in the ordinary course of
business.
For the financial year ended 30 June 2023 the Company incurred a loss of $4,561,319 (2022: $2,827,142 ).
The ability of the Company to continue as a going concern is principally dependent on the Company raising
capital. These conditions indicate a material uncertainty that may cast significant doubt about the ability
of the Company to continue as a going concern.
The directors have prepared a cash flow forecast, which indicates that the Company will have sufficient
cash flows to meet all commitments and working capital requirements for the 12 month period from the
date of signing this financial report.
Based on the cash flow forecasts and other factors referred to above, the Directors are satisfied that the
going concern basis of preparation is appropriate. In particular, given the Company’s history of raising
capital to date, the directors are confident of the Company’s ability to raise additional funds as and when
they are required. This is evidenced by the the Company raising $4,782,228 (net of costs) during the
financial period, and an additional $765,000 subsequent to year end (refer Note 20).
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Annual Financial Report qldem.com.au
Should the Company be unable to continue as a going concern it may be required to realise its assets and
extinguish its liabilities other than in the normal course of business and at amounts different to those stated
in the financial statements. The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or to the amount and classification of liabilities
that might result should the Company be unable to continue as a going concern and meet its debts as and
when they fall due.
ACCOUNTING POLICIES
The following is a summary of the material accounting policies adopted by the Company in the preparation
of the financial report.
a)
Income Tax
The income tax expense (revenue) for the period comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated
using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the period as well unused tax losses. Current and deferred income tax expense (income) is charged
or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or
charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets
also result where amounts have been fully expensed but future tax deductions are available. 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 assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at
reporting date. Their measurement also reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the
extent that it is probable that future taxable profit will be available against which the benefits of the deferred
tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and
joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and liability
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Annual Financial Report qldem.com.au
will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists,
the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
b)
Leases
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to
occur, and any anticipated termination penalties. The variable lease payments that do not depend on an
index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an
index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use
asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
c)
Exploration and evaluation expenditure
Exploration and evaluation expenditure, including the costs of acquiring tenements, are expensed as
incurred.
Expensing exploration and evaluation expenditure as incurred is irrespective of whether or not the Board
believes expenditure could be recouped from either a successful development and commercial exploitation
or sale of the respective assets.
d)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial assets at fair value through profit or loss. Such
assets are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and the
contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being
avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.
When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is
written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be
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44
Annual Financial Report qldem.com.au
either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them
as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which
are either measured at amortised cost or fair value through other comprehensive income. The
measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each
reporting period as to whether the financial instrument's credit risk has increased significantly since initial
recognition, based on reasonable and supportable information that is available, without undue cost or effort
to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit
or loss.
e)
Impairment of Assets
At the end of each reporting date, the Company assesses whether there is any indication that an asset may
be impaired. The assessment will include the consideration of external and internal sources of information
including dividends received from subsidiaries, associate or jointly controlled entities deemed to be out of
pre-acquisition profits. If such an indication exists, the recoverable amount of the asset, being the higher
of the asset’s fair value less costs 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. Impairment testing is
performed annually for intangible assets with indefinite lives. Where it is not possible to estimate the
recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
f)
Employee Benefits
Provision is made for the company’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits that are expected to be settled within a 12 month period
have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than 12 months have been measured at the present value of the estimated
future cash outflows to be made for those benefits.
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Annual Financial Report qldem.com.au
EQUITY-SETTLED COMPENSATION
The Company operates equity-settled share-based payment employee share and option schemes. The fair
value of the equity to which employees become entitled is measured at grant date and recognised as an
expense over the vesting period, with a corresponding increase to an equity account. The fair value of
shares is ascertained as the market bid price. The fair value of options is ascertained using a Black –
Scholes pricing model which incorporates all market vesting conditions. The number of shares and options
expected to vest is reviewed and adjusted at the end of each reporting date such that the amount
recognised for services received as consideration for the equity instruments granted shall be based on the
number of equity instruments that eventually vest.
g)
Provisions
Provisions are recognised when the Company has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow can be
reliably measured.
h)
Cash and Cash Equivalents
Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which
are readily convertible to known amounts of cash and which are subject to an insignificant risk of change
in value. Bank overdrafts also form part of cash equivalents for the purpose of the statement of cash flows
and are presented within current liabilities on the balance sheet.
i)
Borrowing Costs
All borrowing costs are recognised as expense in the period in which they are incurred.
j)
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 statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component
of investing and financing activities, which are disclosed as operating cash flows.
k)
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring
basis, depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in
an orderly (ie unforced) transaction between independent, knowledgeable and willing market participants
at the measurement date.
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Annual Financial Report qldem.com.au
As fair value is a market-based measure, the closest equivalent observable market pricing information is
used to determine fair value. Adjustments to market values may be made having regard to the
characteristics of the specific asset or liability. The fair values of assets and liabilities that are not traded
in an active market are determined using one or more valuation techniques. These valuation techniques
maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or
liability (ie the market with the greatest volume and level of activity for the asset or liability) or, in the
absence of such a market, the most advantageous market available to the entity at the end of the reporting
period (ie the market that maximises the receipts from the sale of the asset or minimises the payments
made to transfer the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant's ability
to use the asset in its highest and best use or to sell it to another market participant that would use the
asset in its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based
payment arrangements) may be valued, where there is no observable market price in relation to the transfer
of such financial instruments, by reference to observable market information where such instruments are
held as assets. Where this information is not available, other valuation techniques are adopted and, where
significant, are detailed in the respective note to the financial statements.
Valuation techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more
valuation techniques to measure the fair value of the asset or liability, The Group selects a valuation
technique that is appropriate in the circumstances and for which sufficient data is available to measure
fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics
of the asset or liability being measured. The valuation techniques selected by the Group are consistent with
one or more of the following valuation approaches:
Market approach: valuation techniques that use prices and other relevant information generated by market
transactions for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses
into a single discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current
service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use
when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique,
the Group gives priority to those techniques that maximise the use of observable inputs and minimise the
use of unobservable inputs. Inputs that are developed using market data (such as publicly available
information on actual transactions) and reflect the assumptions that buyers and sellers would generally
use when pricing the asset or liability are considered observable, whereas inputs for which market data is
not available and therefore are developed using the best information available about such assumptions are
considered unobservable.
Fair value hierarchy
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Annual Financial Report qldem.com.au
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an
input that is significant to the measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that
the entity can access at the measurement date. Measurements based on inputs other than quoted prices
included in Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly
Level 3
Measurements based on unobservable inputs for the asset or liability. The fair values of assets and
liabilities that are not traded in an active market are determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the use of observable market data. If all
significant inputs required to measure fair value are observable, the asset or liability is included in Level 2.
If one or more significant inputs are not based on observable market data, the asset or liability is included
in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following
circumstances:
-
-
if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or
vice versa; or
if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or
vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value
hierarchy (i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change
in circumstances occurred.
l)
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the Company's normal operating cycle; it is held primarily for the purpose of trading; it is
expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent
unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting
period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Company's normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting
period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after
the reporting period. All other liabilities are classified as non-current.
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m)
Revenue
Interest revenue is recognised using the effective interest method.
n)
Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the
Company.
Share-based payment transactions
The Company measures the cost of equity-settled transactions with employees and consultants by
reference to the fair value of the equity instruments at the date at which they are granted. The fair value is
determined by using either the Binomial or Black-Scholes model taking into account the terms and
conditions upon which the instruments were granted. The accounting estimates and assumptions relating
to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity.
o)
Property, Plant, and Equipment
Land and buildings are shown at fair value, based on periodic, at least every 3 years, valuations by external
independent valuers, less subsequent depreciation and impairment for buildings. The valuations are
undertaken more frequently if there is a material change in the fair value relative to the carrying amount.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount
of the asset and the net amount is restated to the revalued amount of the asset. Increases in the carrying
amounts arising on revaluation of land and buildings are credited in other comprehensive income through
to the revaluation surplus reserve in equity. Any revaluation decrements are initially taken in other
comprehensive income through to the revaluation surplus reserve to the extent of any previous revaluation
surplus of the same asset. Thereafter the decrements are taken to profit or loss.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant
and equipment (excluding land) over their expected useful lives as follows:
Plant and equipment
3-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful
life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the Company. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is
transferred directly to retained profits.
p)
Accounting Standards that are mandatorily effective for the current reporting year
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The following new accounting standards and interpretations have been published that are effective for the
30 June 2023 reporting period:
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018-
-
2020 and Other Amendments
The Company has reviewed these amendments and concluded that none have a significant impact on the
Company
q)
New accounting standards and interpretations issued but not effective
AASB 2020-1 Amendments to Australian Accounting Standards: Classification of Liabilities as
AASB 17 Insurance Contracts;
AASB 2021-2 Amendments to Australian Accounting Standards: Disclosure of Accounting Policies
The following new accounting standards and interpretations have been published that are not effective for
the 30 June 2023 reporting period:
-
-
and Definition of Accounting Estimates;
-
Current or Non-current; and
-
Covenants.
The Company has reviewed these amendments and improvements and concluded that none will have a
significant impact on the Company. The Company does not intend to early adopt any of the new standards
or interpretations. It is expected that where applicable, these standards and interpretations will be adopted
on each respective effective date.
AASB 2022-6 Amendments to Australian Accounting Standards: Non-current Liabilities with
2.
Revenue
Interest received
Research and development grant
Other grants
3.
Income tax benefit/(expense)
2023
$
2022
$
12,921
440,477
-
453,398
272
256,497
-
256,769
Net loss before tax
The prima facie tax payable on profit from ordinary activities before
income tax is reconciled to the income tax expense as follows:
Income tax benefit on above at 30% (2022: 25%)
(4,561,319)
(2,827,142)
(1,368,396)
(706,786)
Increase/(decrease) in income tax due to the tax effect of:
Non-deductile expenses
Non-assessable income
Research and development incentive
Temporary difference movements
Tax losses not recognised/(utilised)
682,708
-
(132,143)
(71,238)
889,069
6,694
-
(64,124)
-
764,216
Income tax reported in the statement of comprehensive income
-
-
4.
Earnings per share
2023
Cents per Share
2022
Cents per Share
Basic/diluted loss per share
(3.46)
(2.51)
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Annual Financial Report qldem.com.au
The loss and weighted average number of ordinary shares used in this
calculation of basic/diluted loss per share are as follows:
Loss from continuing operations
Weighted average number of ordinary shares for the purposes of
basic/ diluted loss per share
5.
Cash and cash equivalents
Cash at bank
6.
Trade and other receivables
Current
GST receivable
Other receivable
2023
$
2022
$
(4,561,319)
(2,827,142)
Number
Number
131,963,511
112,667,441
2023
$
2022
$
1,970,158
1,425,475
2023
$
2022
$
72,889
44,666
117,555
184,925
-
184,925
As at 30 June 2023, current trade and other receivables do not contain amounts which are past due and not
impaired. It is expected that these amounts will be received when due.
7.
Other assets
Current
Prepayments
Non-current
Other Assets
8.
Trade and other payables
Current
Trade payables and accruals
2023
$
96,858
96,858
19,450
19,450
2023
$
2022
$
77,530
77,530
19,450
19,450
2022
$
392,026
518,648
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9.
Leases
a) Right-of-use asset
Balance at the beginning of the year
Additions
Depreciation
Balance at the end of the year
Current
Non-Current
Total
b) Lease liabilities
Office lease
Current
Non-Current
Total
2023
$
2022
$
214,265
-
(91,828)
122,437
91,828
30,609
122,437
22,274
267,517
(75,526)
214,265
91,828
122,437
214,265
140,682
235,333
104,198
36,484
140,682
94,651
140,682
235,333
On 1 November 2021, the Company extended its office lease at 50 Appel Street, Surfers Paradise,
Queensland. The lease extension runs for a further 3 years ceasing on 21 October 2024.
10.
Plant and equipment
2023
$
2022
$
Equipment at cost
Equipment – accumulated depreciation
Plant at cost
Plant – accumulated depreciation
Plant and equipment
Opening balance
Additions
Disposals
Depreciation
51,103
(11,806)
1,189,294
(165,942)
1,062,649
716,877
517,050
-
(171,278)
1,062,649
28,200
(1,679)
695,147
(4,791)
716,877
-
723,347
-
(6,470)
716,877
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11.
Issued capital
Issued and paid up capital
(a)
146,891,190 (2022: 121,630,162) Ordinary Shares
2023
$
2022
$
16,230,949
11,448,721
Movement in ordinary
(b)
shares on issue
Balance at beginning of period
Shares issued during the year:
Issue of ordinary shares – 10
August 2021 (i)
Issue of ordinary shares – 29
September 2021 (ii)
Issue of ordinary shares 4 May
2022 (iii)
Issue of ordinary shares – 12
August 2022 (iv)
Issue of ordinary shares – 11
October 2022 (v)
Issue of ordinary shares – 21
October 2022 (vi)
Issue of ordinary shares – 26
April 2023 (vii)
Issue of ordinary shares – 27
June 2023 (viii)
Capital raising costs
Balance at end of period
2023
Number
121,630,162
2023
$
11,448,721
2022
Number
100,000,000
2022
$
7,937,665
-
-
-
-
-
-
9,556,666
1,433,500
3,866,667
580,000
8,206,829
1,682,400
3,463,415
710,000
7,322,720
1,610,998
2,727,272
600,000
248,143
44,666
-
-
-
-
11,499,478
-
146,891,190
1,954,911
(138,347)
16,230,949
-
-
121,630,162
-
-
-
-
-
(184,844)
11,448,721
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
On 10 August 2021, the Company issued 9,556,666 shares at $0.15 to raise $1,433,500
before costs.
On 29 September 2021, the Company issued 3,866,667 shares at $0.15 to raise $580,000
before costs.
On 4 May 2022, the Company issued 8,206,829 shares at $0.205 to raise $1,682,400 before
costs.
On 12 August 2022, the Company issued 3,463,415 shares at $0.205 to raise $710,000.
These shares were issued to David Fitch following shareholder approval.
On 11 October 2022, the Company issued 7,322,720 shares at $0.22 to raise $1,610,998
before costs.
On 21 October 2022, the Company issued 2,727,272 shares at $0.22 to raise $600,000 before
coss.
On 26 April 2023, the Company issued 248,143 shares to consultant in lieu of cash for
services provided. The shares were issued at a share price equivalent to $0.18 totalling
services valued at $44,666.
(viii)
On 27 June 2023, the Company issued 11,499,478 shares at $0.17 to raise $1,954,911 before
costs.
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(c)
Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company,
to participate in proceeds from the sale of all surplus assets in proportion to the number of and amounts
paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a
meeting of the Company.
(d)
Capital Management
The Company’s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders.
The Company’s capital includes ordinary share capital and financial liabilities, supported by financial
assets. There are no externally imposed capital requirements.
Due to the nature of the Company’s activities, being mineral exploration, the Company does not have ready
access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of
the Company’s capital risk management is the current working capital position against the requirements
of the Company to meet exploration programmes and corporate overheads. The Company’s strategy is to
ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to
initiating appropriate capital raisings as required.
The net working capital position of the Company at 30 June 2023 was a surplus of $1,672,976 (2022:
$1,102,424) and the net increase in cash held during the year was $544,683 (2022: decrease of $99,001).
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12.
Reserves
2023
$
2022
$
Share based payment reserve
724,869
17,084
Share based payment reserve
Reserve at the beginning of the year
Options issued – 12 August 2022 (i)
Options issued – 12 October 2022 (ii)
Options lapsed – 17 March 2023
Options issued – 27 April 2023 (iii)
Reserve at end of year
Options
No.#
250,000
5,000,000
600,000
(250,000)
250,000
5,850,000
$
17,084
615,501
69,341
-
22,943
724,869
During the period the Company issued 5,850,000 options to directors and employees in the financial year
ended 30 June 2023. Details of the options granted to directors and employees are detailed below:
(i) 5,000,000 incentive options were issued to directors on 12 August 2022. The options were issued
with an exercise price of $0.345 expiring on 12 August 2025 and vested immediately.
(ii) 600,000 optons were issued to Non-Executive Chairman Tim Wall on his deputy cahir appointment
on 12 October 2022. The options were issued with an exercise price of $0.345 expiring 12 August
2025 and vested immediately.
(iii) 250,000 incentive options were issued to employees on 27 April 2023. The options were issued with
an exercise price of $0.20 expiring 1 May 2025 and vested immediately.
Share Based Payment Expense
During the period, the company made total share based payments of $752,451 (2022: Nil), consisting of
director and employee options totalling $707,785 (note (12i, ii, and iii)) and shares issued totalling $44,666
(refer note 11 (vii)).
Grant
Date/entitlement
Number of
Instruments
Grant Date
Expiry Date
Exercise
Price
5,000,000
600,000
12/08/2022
12/10/2022
12/08/2025
12/08/2025
$0.345
$0.345
Fair value
per
instrument $
0.123
0.115
Value $
615,501
69,341
250,000
27/04/2023
01/05/2025
$0.20
0.092
22,943
Director Options
Chairman
Options
Employee
Options
Director options were calculated using the Black-scholes option pricing model with the following inputs:
Expected volatility (%)
Risk free interest rate (%)
Weighted average expected life of options (years)
Expected dividends
Option exercise price ($)
Share price at grant date ($)
Fair value of option ($)
Options granted
Range
100%
3.08%
3.00
Nil
$0.345
$0.225
$0.1231
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Chairman options were calculated using the Black-scholes option pricing model with the following inputs:
Expected volatility (%)
Risk free interest rate (%)
Weighted average expected life of options (years)
Expected dividends
Option exercise price ($)
Share price at grant date ($)
Fair value of option ($)
Options granted
Range
100%
3.61%
2.80
Nil
$0.345
$0.22
$0.1156
Employee options were calculated using the Black-scholes option pricing model with the following inputs:
Expected volatility (%)
Risk free interest rate (%)
Weighted average expected life of options (years)
Expected dividends
Option exercise price ($)
Share price at grant date ($)
Fair value of option ($)
13.
Auditors’ remuneration
Options granted
Range
100%
3.05%
2.00
Nil
$0.20
$0.18
$0.092
2023
$
2022
$
Amounts, received or due and receivable by auditors for:
- audit or review services
31,500
18,500
14.
Key Management Personnel (KMP) and Related Party Transactions
Key Management Personnel
(a)
Refer to the remuneration report contained in the directors’ report for details of the remuneration paid
or payable to each member of the Company’s KMP for the financial year ended 30 June 2023. The totals
of remuneration paid to KMP of the Company during the year are as follows:
Short term
Post-employment
Share based – options
2023
$
441,524
39,312
660,221
1,141,057
2022
$
386,300
32,605
-
418,905
Other transactions
(b)
During the year ended 30 June 2023, the Company paid consulting fees to Daniel Harris totalling $74,200
(2022: $70,000). The Company also incurred fees of $407,899 plus GST (2022: $716,921 plus GST), to Siecap
Pty Ltd for the financial year ended 30 June 2023 under the project management agreement announced to
ASX on 20 April 2021. Siecap Pty Ltd is an entity in which John Henderson (resigned 9 November 2022) is a
minority shareholder and maintains an advisory role.
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On 3 June 2022, the Company entered into a rental agreement with CL Fitch Pty Ltd, a related party entity of
David Fitch for a premises in Julia Creek. The rental agreement is for a term of 12 months and is rented to
the Company for $30,000 per annum. The Company paid CL Fitch Pty Ltd $30,000 (exc GST) in relation to this
agreement in financial year 2023 (2022: $2,250).The Company incurred no other transactions with related
parties. The Company incurred no other transactions with related parties.
15.
Cash Flow Information
2023
$
2022
$
(a) Reconciliation of Cash Flow from Operations with Loss after
Income Tax
Loss after income tax
Non cash flows:
Finance cost on right of use asset
Depreciation on right of use asset
Depreciation on plant and equipment
Share based payments
Changes in assets and liabilities:
- (increase)/decrease in trade and other receivables
- (increase)/decrease in other assets
- increase/(decrease) in trade and other payables
(b) Non Cash Investing & Financing Activities
There were no non-cash investing or financing activities during the year.
16.
Contingent liabilities and contingent assets
(4,561,319)
(2,827,142)
10,412
70,626
171,278
752,451
(67,370)
19,329
103,392
(3,501,201)
2,651
75,526
6,470
-
(84,242)
(61,578)
220,112
(2,668,203)
It is the opinion of directors of the Company that there were no contingent assets or liabilities.
17.
Financial reporting by segments
The Company has identified its operating segments based on the internal reports that are used by the Board
(the chief operating decision makers) in assessing performance and in determining the allocation of
resources.
The operating segments are identified by the Board based on the phase of operation within the mining
industry. For management purposes, the Company has organised its operations into two reportable
segments on the basis of stage of development as follows:
- Development assets; and
-
Exploration and evaluation assets, which
determination and assessment of the existence of commercial economic reserves.
includes assets that are associated with the
The Board as a whole will regularly review the identified segments in order to allocate resources to the
segment and to assess its performance.
During the year ended 30 June 2023, the Group had no development assets. The Board considers that it
has only operated in one segment, being mineral exploration.
The Group is domiciled in Australia. All revenue from external customers are only generated from Australia.
No revenues were derived from a single external customer.
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18.
Financial risk management
Overview
The Company has exposure to the following risks from their use of financial instruments:
-
credit risk
-
liquidity risk
- market risk
This note presents information about the Company’s exposure to each of the above risks, their
objectives, policies and processes for measuring and managing risk.
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework. Management monitors and manages the financial risks relating to the
operations of the Company through regular reviews of the risks.
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables
from customers and investment securities.
Trade and other receivables
As the Company has just started operations, it does not have trade receivables and therefore is not
exposed to credit risk in relation to trade receivables.
Exposure to credit risk
The carrying amount of the Company’s financial assets represents the maximum credit exposure. The
Company’s maximum exposure to credit risk at the reporting date was:
Financial assets
Cash and cash equivalents – AAA rated counterparties
Receivables – other
2023
$
1,970,158
117,555
2,087,713
2022
$
1,425,475
184,925
1,610,400
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Company’s reputation.
The Company manages liquidity risk by maintaining adequate reserves by continuously monitoring
forecast and actual cash flows. Typically the Company ensures that it has sufficient cash on demand to
meet expected operational expenses for a period of 60 days, including the servicing of financial
obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be
predicted, such as natural disasters.
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Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Company’s income or the value of its holdings of financial instruments. The
Company is not currently exposed to any material interest rate risk.
Interest rate risk sensitivity analysis
The Company does not have any material exposure to interest rate risk as there were no external
borrowings at 30 June 2023 (2022: nil). Any borrowings were intercompany related and unsecured and
interest free and therefore there is no exposure to interest rate risk associated with these amounts.
Interest bearing assets are all short term liquid assets and the only interest rate risk is the effect on interest
income by movements in the interest rate. There is no other material interest rate risk.
Fair value of financial instruments
The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the
financial statements approximates their fair value. There are no financial assets or liabilities which are
required to be measured at fair value on a recurring basis.
19.
Commitments
Exploration commitments
In order to maintain current rights of tenure to exploration tenements, the Company is required to perform
minimum exploration requirements specified by the Queensland Governments Department of Natural
Resource and Mines. These obligations are not provided for in the financial report.
Minimum Work Requirements
No later than 12 months
Between 1 and 5 years
2023
$
334,167
145,833
480,000
2022
$
290,000
600,000
890,000
2018
$
319,000
457,000
776,000
20.
Events Subsequent to Period End
On 24 August 2023 the Company issued 4,500,000 fully-paid ordinary shares to David Fitch at $0.17 per
share to raise $765,000. The shares were placed as part of the 21 June 2023 capital raise and were issued
after receiving shareholder approval at the general meeting held on 24 August 2023.
On 25 September 2023, the Company entered into a unsecured loan facility from Non-Executive Director
David Fitch. Under the facility, the company will receive an initial A$1 million tranche of funding and the
ability to call for an additional A$1 million at the election of QEM at any time in the period 6 months after
commencement of the Facility. The Facility bears an interest rate of 10.0% per annum on the drawn
amounts that is payable at maturity (12 months). QEM may at its election at any time up to the date that
is 9 months after the commencement of the Facility, repay the amount owing under the Facility (in whole
or in part) by way of the issue of shares in QEM (subject to shareholder approval first being obtained).
No other matters or circumstances have arisen since the end of the financial period, which significantly
affected or may significantly affect the operations of the Company, the results of those operations, or the
state of affairs of the Company in future financial years.
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Directors’ Declaration for the year
ended 30 June 2023
The directors of the Company declare that:
1.
the financial statements and notes are in accordance with the Corporations Act 2001 and:
a) comply with Accounting Standards and the Corporations Regulations 2001; and
b) give a true and fair view of the Company’s financial position as at 30 June 2023 and its
performance for the year ended on that date; and
c) are in accordance with International Financial Reporting Standards, as stated in note 1 to the
financial statements; and
2.
the Managing Director and Company Secretary have each declared that:
a) the financial records of the Company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
b) the financial statements and notes for the financial year comply with the Accounting Standards;
and
c) the financial statements and notes for the financial year give a true and fair view;
3.
in the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
This declaration is signed in accordance with a resolution of the Board of Directors.
Gavin Loyden
Managing Director
27 September 2023
QEM Limited
60
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QEM LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of QEM Limited (“the Company”), which comprises the statement of
financial position as at 30 June 2023, the statement of profit or loss and other comprehensive income, the
statement of changes in equity and the 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:
a.
the accompanying financial report of the Company is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Company’s financial position as at 30 June 2023 and of its
financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards as disclosed in Note
1.
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 Company 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.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial report, which indicates that the Company incurred a net loss of
$4,561,319 during the year ended 30 June 2023. As stated in Note 1, these events or conditions, along with
other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt
on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key audit matter
How our audit addressed the key audit matter
Exploration Expenditure
During the year, the Company incurred
Our procedures included, amongst others:
exploration expenses of $2,639,248.
Exploration expenditure is a key audit
matter due to the significance to the
Company’s statement of profit or loss and
other comprehensive income.
Share Based Payments – $752,451
During the year the Company issued
options to Directors and employees.
Share-based payments are considered to
be a key audit matter due to:
• The
significance
the
transactions to the Company’s
of
• Testing exploration expenditure for the year by
evaluating a sample of recorded expenditure for
consistency to underlying records, the Company’s
accounting policy and the requirements of AASB 6
Exploration for and Evaluation of Mineral Resources;
and
• Assessing
the Company’s
rights
to
tenure by
corroborating to government registries.
Our procedures included but were not limited to:
• Analysed contractual arrangements to identify key
terms and conditions of the share-based payments
and relevant vesting conditions in accordance with
AASB 2;
• Evaluated management’s valuation methods and
financial
position
and
assessed the assumptions and inputs used;
performance; and
• The level of judgement required in
management’s
evaluating
application of the requirements of
AASB 2 Share-based Payment
(“AASB 2”).
• Assessed the amount recognised during the period
against relevant vesting conditions; and
• Examination of the disclosures made in the financial
report.
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 2023, 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.
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 Note 1, the
directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Company’s ability 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 Company 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 the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the 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 Company’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.
• 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 communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2023.
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with s 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.
Auditor’s Opinion
In our opinion, the Remuneration Report of the Company, for the year ended 30 June 2023, complies with
section 300A of the Corporations Act 2001.
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated this 27th day of September 2023
Perth, Western Australia
Annual Financial Report | ASX Information qldem.com.au
The following additional information is required by the ASX Limited in respect of listed public companies
and was applicable at 25 September 2023.
1.
a.
Shareholder and Option holder information
Number of Shareholders and Option Holders
Shares
As at 25 September 2023, there were 1,427 shareholders holding 151,391,712 fully paid ordinary
shares.
Options
As at 25 September 2023, there are 6 option holders holding 5,600,000 unlisted options exercisable
at $0.345 on or before 12 August 2025, and 1 option holder holding 250,000 unlisted options
exercisable at $0.20 expiring 1 May 2025.
b.
Distribution of Equity Securities
Fully paid ordinary shares
Number (as at 25 September 2023)
Category (size of holding)
Shareholders
Ordinary Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
40
465
308
499
115
1,427
6,981
1,579,711
2,433,483
18,377,992
128,993,545
151,391,712
As at 25 September 2023 there were no number of shareholdings that were held in less than
marketable parcels.
c.
The names of substantial shareholders listed in the company’s register as at 25 September 2023 are:
Shareholder
Ordinary Shares
David Fitch
Gavin & Tracey Loyden
43,440,477
20,654,936
%Held of Total
Ordinary Shares
28.69%
13.64%
d.
Voting Rights
The voting rights attached to the ordinary shares are as follows:
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at
a meeting or by proxy has one vote on a show of hands.
QEM Limited
66
Annual Financial Report | ASX Information qldem.com.au
e.
20 Largest Shareholders as at 25 September 2023 — Ordinary Shares
Name
1
2
3
4
5
6
7
8
David Fitch Group
Gavin Loyden Group
STONE GROUP PTY LTD
MR QILIANG GU
CITYMETRO PTY LTD
ML FITCH NOMINEES PTY LTD
EVOLUTION HUB PTY LTD
PARADISE MARINE PTY LTD
SKIPTRAK PTY LTD
11
9
10 MR MICHAEL MYLES FORD &
MRS ELIZABETH FORD
TRAFALGAR HOUSE PTY LTD
P & L DEMPSEY SMSF PTY LTD
CRAV PTY LTD
ZARMAD PTY LTD
12
13
14
17
16
15 MT DAVIES INVESTMENTS PTY LTD
CG DAVIES INVESTMENTS PTY LTD
NETWEALTH INVESTMENTS LIMITED
VLADORA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
19
20
18
Number of
Ordinary Fully
Paid Shares
Held
% Held of
Issued
Ordinary
Capital
43,440,477
20,654,936
7,064,643
4,051,525
3,875,143
28.69%
13.64%
4.67%
2.68%
2.56%
3,325,179
2.20%
3,206,617
3,000,000
2,266,438
2,049,481
2.12%
1.98%
1.50%
1.35%
1,798,946
1.19%
1,650,000
1.09%
1,600,000
1.06%
1,495,126
0.99%
1,473,118
0.97%
1,473,118
0.97%
1,473,118
0.97%
1,031,149
0.68%
1,000,000
0.66%
922,856
106,851,870
0.61%
70.58%
2.
3.
4.
5.
6.
The name of the company secretary is David Palumbo.
The address of the principal registered office in Australia is:
Level 8, 216 St Georges Terrace Perth WA 6000
Registers of securities are held at the following address:
Automic Registry Services, Level 2, 267 St Georges Terrace, PERTH WA 6000
Stock Exchange Listing:
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of
the ASX Limited.
Restricted Securities:
The Company currently has no restricted securities held in Escrow.
QEM Limited
67
Annual Financial Report qldem.com.au
SCHEDULE OF MINERAL TENEMENTS
Project
Tenement
Interest held by
QEM Limited
Julia Creek
Julia Creek
Julia Creek
Julia Creek
EPM 25662
EPM 25681
EPM 26429
EPM 27057
100%
100%
100%
100%
QEM Limited
68