QEM Limited
1
2024 Annual Report
FOR THE YEAR ENDED 30 JUNE 2024
QEM LIMITED
ACN 167 966 770
QEM Limited
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2024 Annual Report
qldem.com.au
Table of
Contents
Chairman’s Letter
04
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
QEM Limited
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06
33
34
35
36
37
38
59
60
66
68
Corporate Directory
03
Consolidated Entity
Disclosure Statement
61
QEM Limited
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2024 Annual Report
qldem.com.au
Corporate
Directory
DIRECTORS
Timothy Wall
Gavin Loyden
Daniel Harris
Tony Pearson
SECRETARY
Duncan Cornish
REGISTERED OFFICE
Level 6
10 Market Street
Brisbane QLD 4000
Ph: +61 7 3212 6299
AUDITORS
Hall Chadwick WA Audit Pty Ltd
283 Rokeby Road
SUBIACO WA 6008
HEAD OFFICE
Level 6
50 Appel St
Surfers Paradise Q 4217
Australia
Ph: +61 7 5646 9553
SHARE REGISTRY
Automic Registry Services
Level 2, 267 St Georges Terrace
PERTH WA 6000
Phone (within Australia): 1300 288 664
Phone (outside Australia): +61 2 9698 5414
Email: info@qldem.com.au
Website: www.qldem.com.au
QEM Limited
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2024 Annual Report | Chairman’s Letter qldem.com.au
QEM Limited
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Chairman’s Letter
Dear Fellow Shareholders,
It is with great pleasure that I present QEM Limited’s 2024 Annual Report.
The 2024 financial year saw the Company continue to deliver significant key milestones for the Julia Creek
Vanadium and Oil Shale Project in North-West Queensland. The primary focus for the team was delivery of
the Project scoping study, which was released shortly post-FY24, demonstrating a distinctive and
commercially attractive project for onsite critical minerals refining in Qld. The multi-commodity nature of
QEM’s Julia Creek Project has strong revenue potential and the technical solutions presented enable
capital efficient mining, on-site processing and refining to produce high purity Vanadium with a compelling
investment proposition.
The scoping study work delivered during the year builds on vanadium recovery optimisation work by GSA
Environmental, previous QEM pilot plant work and completion of mineral characterisation and fine particle
beneficiation work, focused on optimising vanadium pentoxide grade, by The University of Queensland’s
Sustainable Minerals Institute.
A significant achievement in 2024 was completing the sale of the Julia Creek Renewables Project assets,
proposed to be adjacent to the Julia Creek Vanadium and Oil Shale Project, to Enel Green Power Australia
Pty Ltd. The completion payment received, and future contingent milestone and royalty payments
strengthen QEM’s balance sheet. The Renewables Project also has the potential to provide cheaper power
for the JCP and to contribute to decarbonisation and the Queensland and Australian Government
renewable energy and emission reduction targets. Execution of the Renewables Project Sale Agreement
reinforces QEM’s continued focus on its core vanadium and oil shale project.
Importantly, the company also completed it’s 2024 drilling program, resulting in an increase in the size and
grade of the Julia Creek vanadium deposit, which was already one of the largest single vanadium deposits
in the world, as well as a significant upgrade in the confidence of the oil Resource at the Company’s flagship
Julia Creek Project.
The Board’s composition has been enhanced to support the next phase of project development with the
addition of Tony Pearson, whose experience spans natural resource, infrastructure and government.
Long duration energy storage is increasingly seen as imperative in the energy transition towards
sustainable technologies like wind and solar. Demand for Vanadium Flow Batteries (VFBs) is rapidly
accelerating with market penetration set to quadruple globally by 2030. With the reusable potential of
vanadium in VFBs, this means that they are 100% recyclable and sustainable.
The Vanadium sector continues to be strongly supported by the Australian Government and the
Queensland State Government through their respective Critical Minerals Strategies. The Australian
Government’s focus areas for 2024-2030 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.
The Queensland State Government is progressing the $75M Queensland Resources Common User Facility
to demonstrate vanadium extraction at scale. Further, in June 2024, 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 has been established around Julia Creek and Richmond to support
the region’s vanadium projects.
2024 Annual Report | Chairman’s Letter qldem.com.au
QEM Limited
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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. 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 my fellow Directors, our hard-working team
and our collaboration partners for their efforts and achievements this year for your Company. The next 12
months will see QEM continue developing our flagship Julia Creek Vanadium Project at pace, with priority
on preparing for and commencing work on the Project pre-feasibility study.
In closing, I thank QEM’s loyal shareholders for your continued support of our Company as we look forward
to another exciting year ahead.
Tim Wall
Non-executive Chair
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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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 2024.
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)
-
Gavin Loyden (Managing Director)
-
Daniel Harris (Non-Executive Director)
-
Tony Pearson (Non-Executive Director, appointed 24 August 2023)
-
David Fitch (Non-Executive Director, resigned 27 August 2024)
Unless noted above, all directors have been in office since the start of the financial year to the date of this
report.
COMPANY SECRETARY
Duncan Cornish (appointed 1 May 2024)
David Palumbo (resigned 1 May 2024)
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 $2,044,866 (2023: $4,561,319).
FINANCIAL POSITION
The net assets of the Company at 30 June 2024 are $1,564,460 (2023: net assets of $2,749,200). The
Company’s working capital, being current assets less current liabilities is $1,013,829 at 30 June 2024
(2023: working capital of $1,672,976).
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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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.
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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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.
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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FULL YEAR FY2024 REVIEW OF
OPERATIONS:
THE JULIA CREEK PROJECT
The Julia Creek Project comprises four granted Exploration Permits for Minerals (EPMs) covering a total
area of approximately 250km2. The tenements form part of the vast Toolebuc Formation, which is
recognised as one of the largest deposits of vanadium and oil shale in the world.
The Julia Creek project is a unique world class resource with the potential to produce vanadium pentoxide
and transport fuel. QEM strives to become a global supplier of high-purity vanadium pentoxide for the
emerging energy storage sector.
This globally significant JORC (2012) Mineral Resource of 2,870 Mt @ 0.31% V2O5 is one of the single
largest ASX listed vanadium resources and represents a significant opportunity for development. The
resource is comprised of 461Mt @ 0.28% V2O5 in the Indicated category and 2,406Mt @ 0.31% V2O5 in
the Inferred category, with the added benefit of a contingent (SPE-PRMS 2018) in-situ oil resource of 6.3
MMBBls of Oil equivalent in the 1C category, 94MMBBls in the 2C category, and 654MMBBLs in the 3C
category, contained within the same ore body.
The Project is significant at regional, national and international scales, as supported by the Critical Minerals
Strategies published by both Queensland and Federal Governments. These strategies target the
accelerated development of critical minerals projects to produce minerals such as vanadium that are
required for sustainable supply chains and in addressing the energy transition.
The Julia Creek Project is located approximately 16 km southeast of the Julia Creek township. Julia Creek
is approximately 650 km west of Townsville and 250 km east of Mount Isa. Julia Creek falls within the
McKinlay Shire Council local government area. The town of Julia Creek serves as a hub for the surrounding
agricultural and mining activities and also provides essential amenities and services for residents and
workers in the area.
With its strategic location near Julia Creek and convenient access via the Flinders Highway and Julia Creek
Airport, QEM's Julia Creek project enjoys a favourable position within the region's mining and resource
industry.
Tenure
The 100% fully owned project consists of 4 tenements covering 249.6 km2.
Table 1: Julia Creek Project Tenure
Tenement
Concession Type
Area
(km2)
Status
Granted
Expiry
EPM 25662
Exploration Permit Minerals other than Coal
134.54
Granted
22/01/2015
23/01/2025
EPM 25681
Exploration Permit Minerals other than Coal
6.41
Granted
06/03/2015
5/03/2025
EPM 26429
Exploration Permit Minerals other than Coal
35.24
Granted
16/03/2017
15/03/2027
EPM 27057
Exploration Permit Minerals other than Coal
73.63
Granted
02/05/2019
1/05/2029
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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Figure 1: Julia Creek Project Location
Scoping Study
Throughout the reporting period (FY2024), QEM continued to progress the development of the Julia Creek
Project’s Scoping Study. The Scoping Study commenced pre-reporting period on 31 March 2023. This study
was led by RPM Global.
During the development of the Scoping Study, value engineering opportunities were identified that pre-
treating the feed ore to remove calcite substantially reduced the tonnage directed to the vanadium refining
and oil recovery facilities, which resulted in significant economic improvements for the Project. QEM
subsequently undertook additional metallurgical investigations in late 2023 and early 2024. The outcome
of these additional metallurgical investigations is an updated metallurgical flowsheet where a Feed
Preparation Facility (FPF) removes significant quantities of calcite and a series of float cells that direct
feed to either the Oil Recovery Facility (ORF) or Vanadium Refining Facility (VRF).
The Scoping Study was completed post-reporting period on 27 August 2024.
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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EXPLORATION CAMPAIGN
In July 2023, QEM engaged Measured Group as the lead geologist/ program exploration managers for the
2023 drilling campaign. 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 on 10 July 2023, with successful completion on 3 August 2023. (ASX
announcement 9 August 2023)
The program was conducted for the purpose of resource exploration and definition, geotechnical studies
and water boreholes. Material from the overburden levels was also collected for waste characterization.
The campaign targeted 12 exploration locations in the north of the QEM tenement with a target depth of
up to 80 metres, with 620 total metres of 4C drilled (620m).
Two of the drilling campaign’s 12 exploration holes have now been converted to groundwater monitoring
bores, and a further four were used for geotechnical analysis. Overburden and core samples from a range
of holes have been collected, allowing for waste characterisation analysis to commence. Fresh core
samples were also collected for further pilot plant testing and metallurgical test work at QEM’s pilot plant
at HRL Labs in Victoria.
Figure 2: 2023 Drilling Campaign (QEM, Measured Group, All State Drilling & Cartledge).
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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Seismic Survey
In October 2023, QEM conducted a 2D non-disturbing seismic survey across the tenement. The survey was
made up of two 4.5km lines running East-West. The program took approximately ten days to complete and
was led by Velseis Integrated Seismic Technologies and Measured Group. The purpose of the program was
to determine the geological structure(s) and the continuity of the resource across the project area.
The seismic report was completed and handed over to QEM in December 2023.
Figure 3: OS Horizon Elevation ASL Map (5m contours)
Mineral Resource Estimate 2024
In March 2024, the Company announced an upgrade in the Project’s Mineral Resource Estimate. The
updated 2024 JORC Mineral Resource Estimate encompasses a 28% increase in Indicated vanadium
Resource of 461Mt and 2,406Mt in the Inferred category. (Ref: ASX Announcement 5 March 2024- updated)
Additionally, the updated PRMS (2018) resulted in a Maiden 1C resource of 6.3 million barrels in-situ
(MMbbl’s), oil equivalent along with a 32% increase of the 2C oil shale estimate to 94 MMbbl’s, and a 3C oil
shale Resource estimate of 654 million barrels (MMbbl’s) was reached, (utilising a 90% recovery factor).
The previous resource estimate was declared as of March 30th, 2022 and consisted of 359Mt @ 0.29%
V2O5 in the Indicated category and 2,490Mt @ 0.31% V2O5 in the Inferred category. Since that time, an
extra sixteen (16) core holes have been drilled, and two extra 2D seismic lines have been acquired on the
project, primarily in the shallower parts of the western blocks.
Furthermore, it is possible that additional by-products such as base metals (Copper (Cu), Molybdenum
(Mo), Nickel (Ni), Zinc (Zn), Aluminium (Al) which may be produced as High Purity Alumina (HPA) or as
cement product inputs, could be produced as by-products from the waste stream of vanadium processing,
which may have a further positive impact on revenue.
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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Table 2: Julia Creek Resource Estimate as of 9th February 2024
Note:
(1) The estimate uses a minimum cut-off of 0.2% V2O5 for the oil shale units and a minimum cut-off of 0.15% V2O5
for the Coquina units.
(2) The total resource tonnage reported is rounded to reflect the relative uncertainty in the estimate categories and
component horizons may not sum correctly.
(3) Copper (Cu), Molybdenum (Mo), Nickel (Ni), Zinc (Zn), and Aluminium (Al) are not listed due to categorisation as
secondary potential by-products.
Table 3: Summary of Oil Shale Resources as at 9 February 2024
Note:
(1) The total resource tonnage reported is rounded to reflect the relative uncertainty in the estimate and component
horizons may not sum correctly.
(2) The 3C petroleum resource reported includes the 1C and 2C volumes, i.e., They are cumulative not incremental
as per the PRMS 2018 guidelines.
(3) An economic cut-off of 40 L/tonne was applied prior to the calculation; it must be noted that the CQU and the
CQLA did not meet the criteria of >40 L/tonne for inclusion in the volumetric calculation.
(4) The 1C, 2C and 3C volumes reported here are unrisked.
Resource
Class
Strat.Unit
Mass (Mt)
Average
Thickness (m)
Insitu
Density
(gm/cc)
V2O5
(wt%)
CQLA
167
3.17
2.40
0.24
CQLB
128
2.58
2.28
0.30
OSU
81
1.92
1.95
0.31
OSL
84
2.02
1.93
0.32
461
2.20
0.28
CQLA
697
2.46
2.42
0.23
CQLB
826
3.13
2.23
0.39
OSU
432
1.84
1.97
0.31
OSL
451
1.95
1.95
0.29
2,406
2.18
0.31
Total
2,870
2.19
0.31
Total
Inferred
Indicated
Resource
Class
Strat
Unit
Mass
(Mt)
Average
Thickness
(m)
Total
Moisture
wt%
Oil Yield
(L/tonne)
Oil Yield
LTOM
MMBbls
(in-situ
PIIP)
MMBbls
Recover
able
CQLB
903
2.5
6.8
53.1
55.0
254
228
OSU
621
1.8
6.8
75.9
79.0
248
223
OSL
609
1.9
6.8
70.7
76.7
224
202
Total / Ave
2134
6.8
66.6
70.2
726
654
CQLB
107
2.1
2.8
50.9
52.3
33
29
OSU
76
1.9
13.3
78.7
81.4
36
32
OSL
81
2.0
11.8
74.8
76.7
36
33
Total / Ave
264
9.3
68.1
70.1
105
94
CQLB
7
1.9
2.8
49.0
49.6
1.9
1.8
OSU
5
1.9
13.3
77.2
78.7
2.5
2.2
OSL
6
2.1
11.8
74.6
76.2
2.6
2.3
Total / Ave
18
9.3
66.9
68.1
7.0
6.3
Total
3C
Contingent
2C
Contingent
1C
Contingent
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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Figure 4: Resource Categories, points of observation and interpretive data for the Julia Creek Project
JULIA CREEK RENEWABLES PROJECT SALE
In January 2024, the Company announced the sale of the Julia Creek Renewables Project (JCRP) assets
to Enel Green Power Australia (EGPA).(Ref: ASX Announcement 15 January 2024)
Under the Project Sale Agreement (PSA) QEM sold to EGPA, among others, wind and solar monitoring
equipment and more than 18 months of data, and intellectual property regarding engineering,
environmental, geotechnical, flood plain and other project studies (the Sale Interests).
An initial upfront payment of $3,000,000 was made to QEM for the Sale Interests, which included among
others, the Met Mast, Sodar equipment and corresponding data collected.
In addition to the initial upfront payment received, the consideration for the sale of Sale Interest is as
follows:
(a) two contingent milestone payments totalling $4,000,000 in aggregate, payable in separate
tranches upon achievement of key Project development milestones; and
(b) a contingent milestone payment upon EGPA reaching Final Investment Decision (FID) (the FID
Payment).
(c) a revenue-based royalty of between 1% - 2% generated by the JCRP operations.
(d) Additionally, through Project operations, QEM will be offered a 10-year off-take agreement (PPA),
on an arm’s length basis, for up to 25MW firm capacity to supply its mine operations.
Upon the completion and satisfaction of the Condition Precedent, being that the relevant equipment was
fully functional and able to be operated in accordance with good operating practice. On March 26, 2024,
the Company announced that the transaction had been completed. (Ref: ASX Announcement 26 March
2024.)
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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MATERIAL CHARACTERISATION STUDIES
Mineral Beneficiation Studies
During the reporting period, The University of Queensland Sustainable Minerals Institute (SMI) completed
a review of applicable froth flotation techniques for the separation of particles for beneficiation of the Julia
Creek Project’s feed material.
The review presented a comprehensive and critical assessment on the use of froth flotation for the
separation and recovery of hydrocarbon in the form of kerogen and the vanadium-bearing clay host, as well
as the rejection of calcite gangue. Based on the review, the recommended flow sheet involves two stages:
a kerogen separation circuit and a calcite rejection circuit. This flowsheet underwent further assessment
by RPM Global during the Scoping Study update.
In June 2024, QEM entered into an agreement with The University of Queensland (UQ) to characterise the
mineralogical and chemical composition of vanadium host phases in the oil shale.
This work program will utilise a range of advanced mineralogical and chemical analytical techniques to
constrain the mineralogical characteristics and vanadium host phases in feed materials for QEM’s
vanadium extraction processes. The aim is to quantify through mass-balance approaches, the deportment
of vanadium between hydrocarbon phases and residual mineralogical phases. Understanding the
mineralogical host of vanadium in the feed material (e.g., clay-hosted) along with material characteristics
of the associated gangue phases (e.g., calcite/limestone) will contribute to improved knowledge of the
feed characteristics and process response during further test work.
Previous characterisation work was undertaken on a post hydrogenation material which identified
opportunities in terms of particle size and primary texture preservation. This current work program will
utilise as-received drill core samples for detailed material characterisation. Techniques used in this new
scope of works include Multiple Gas Chromatograph (GC) systems with Electron Capture Detector (ECD)
for assessing volatile-hosted vanadium content in hydrocarbon phases, automated microscopy (MLA) and
high-resolution energy dispersive spectroscopy (EDS) and x-ray fluorescence mapping (XFM) to determine
the relative intensity of vanadium across mineral phases mapped by MLA.
Fully quantitative analysis of the vanadium content of target minerals identified from EDS mineral mapping
will be conducted using EMPA and LA-ICPMS analysis where required. NaOH leaching and ICP-AES
analysis of residual material and leachate will also be undertaken to determine the final vanadium content
of residual materials
This work program is expected to take 4 months, completion is expected in Q1 2025.
Pilot Plant Test Work
During the reporting period, QEM’s technical partner HRL conducted two pilot plant tests with the following
objectives:
Test T6 involved a trial with hydrogen donor solvent only (no shale) as the feedstock. The intent was to
gain further understanding of solvent behaviour as a result of heating to a target temperature of 450°C;
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
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Test T7 involved a trial with hydrogen donor solvent and the shale residue from a previous trial (Test T4).
The intent was to establish whether the presence of shale solids has an influence on the behaviour of the
solvent. An additional outcome was the production of a new quantity of fully processed shale residue for
additional vanadium beneficiation and extraction work.
In addition to Tests T6 and T7, HRL conducted a small-scale trial in QEM’s 100ml autoclave using direct
injection of hydrogen gas. The aim of the trial was to test alternatives to the hydrogen donor solvent
previously used.
Based on the results of a single small-scale test with hydrogen and naphthalene as solvent, equivalent
carbon conversions can potentially be achieved using either the solvent previously used or hydrogen gas.
Preliminary Geotechnical Investigation
During the reporting period, Cartledge Mining and Geotechnics completed the Julia Creek Project –
Preliminary Geotechnical Study. This study aimed at gaining a preliminary understanding of the
geotechnical conditions onsite to inform mine pit geometries and risks.
Cartledge identified four locations that were drilled during the 2023 exploration campaign for geotechnical
purposes. Samples from these four holes were sent to Cartledge for geotechnical analysis. The final report
was made available to QEM in May 2024.
Cartledge concluded that “Overall, the geotechnical conditions at Julia Creek appear favourable, and
standard operational controls, in conjunction with appropriate slope design, should be adequate to manage
any latent geotechnical risk.”
Figure 5: Recommended pit geometries for the Julia Creek Project (not for construction)
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QEM Limited
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RGS Waste Characterisation
RGS Consultants Pty Ltd (RGS) was commissioned by QEM in 2023 to complete a soil quality, geochemical,
and physical characterisation assessment of mine waste materials for the Julia Creek Project.
During the reporting period, RGS received the final batch of core samples from the 2023 drilling campaign.
A total of 119 core samples have been collected and will be used for the geochemical and physical testing
program.
In October, RGS supplied QEM with the geochemical and physical sampling and analysis plan (GAPSAP)
which outlines the static and kinetic geochemical and physical testing that will be performed on the Batch
1 soil and overburden and Batch 2 oil shale samples. The purpose of the GAPSAP is to guide the selection,
collection, and analysis of samples of soil, overburden, and oil shale materials collected from the QEM
(2023) drilling program. The information derived from the sampling and analysis program will be used to
determine the geochemical and physical properties of the mine materials and report these in a format that
that is suitable for inclusion in relevant approvals documentation.
Throughout the reporting period, RGS continued the 12-month Geochemical and Physical Sampling and
Analysis Plan (GAPSAP). Interim reports have been provided throughout the reporting period on a quarterly
basis.
Test pit sampling for further soil characterisation (on large bulk samples) and process waste
characterisation are likely to be required for the Progressive Rehabilitation and Closure Plan (PRCP) to
meet Queensland regulatory requirements for the Julia Creek Project.
GROUND AND SURFACE WATER MONITORING
In November 2022, QEM engaged ATC Williams to conduct a 12-month baseline assessment of the ground
water and surface water conditions around the tenement. During the reporting period, ATC Williams
completed the 12-month baseline water monitoring campaign and associated reports.
ATC Williams and QEM conducted routine monthly monitoring of the Julia Creek monitoring network for
the period between November 2022 and November 2023. The purpose of this work is to provide an
assessment of baseline groundwater conditions to support preparation of an Environmental Impact
Statement (EIS). In accordance with the Environmental Protection Act 1994, this EIS is required by QEM to
obtain environmental authority to proceed with the Julia Creek Project.
The water monitoring baseline report was delivered in January 2024 and provided an assessment of
baseline annual trends in water levels and water quality identified through the monitoring program. ATC
Williams also included recommendations for improvements to QEM’s water monitoring network.
After the completion of the 12-month baseline campaign, QEM is continuing the water monitoring
campaign with ATC Williams on a quarterly basis. The first quarterly event of 2024 was conducted in the
reporting period in March 2024.
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QEM Limited
18
Figure 6: Water monitoring campaign (FY2024)
Vanadium Extraction from Spent Catalyst
QEM achieved the successful extraction of high purity vanadium pentoxide, covered from industrial waste.
QEM partnered with The University of Queensland (UQ) to produce the first high purity vanadium pentoxide
(V2O5) with the source material, being spent catalyst used in the production of sulphuric acid at Incitec
Pivot Limited’s (“IPL”) Mount Isa plant.
This work package received partial funding through the Australian Government Department of Education’s
Trailblazer Universities Program. QEM is the industry leader partnering with The University of Queensland
School of Chemical Engineering in the Resources Technology and Critical Minerals program accelerating
innovation, commercialisation and research in the resources technology and critical minerals sector.
This project represents a Circular Economy opportunity where industrial waste can be repurposed to a
higher use by extracting the critical mineral vanadium as V2O5. V2O5 is the essential component of the
electrolyte used in vanadium flow batteries (VFB). VFB’s are known as Long Duration Energy Storage
(LDES) systems that are seen a key to Australia reaching its carbon reduction targets.
The first stage of the collaboration between QEM and UQ involved a small-scale laboratory demonstration
of all the processing steps in recycling the spent catalyst into a high purity vanadium oxide product,
resulting in the first V2O5 produced in Queensland from industrial waste.
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QEM Limited
19
Figure 7: Process flow from industrial waste to High Purity V2O5
UQ completed the process flowsheet after conducting several tests in a small-scale laboratory setting,
confirming a technically viable method of recycling spent catalyst to produce high-purity V2O5.
Figure 8: High purity (99.93%) vanadium pentoxide (V2O5) extracted from Queensland industrial waste at
The University of Queensland. (Ref: ASX announcement 4 April 2024)
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QEM Limited
20
GRANTS
The Collaborative Development Program
During the reporting period, QEM applied for $1.4 million in grant funding through the Queensland
Government’s Collaborative Development Program (CDP). The CDP was announced as part of the
Queensland Government’s Critical Minerals Strategy and builds on the Queensland Resources Industry
Development Plan. The CDP is administered by the Geological Survey of Queensland (GSQ) within the
Department of Resources and offers a total of $5 million in funding for the recovery or reprocessing of
mine waste for the extraction of critical minerals in Queensland.
QEM’s grant application aims to partially fund the next stage of test work on the company’s Vanadium
Recovery Project (Spent Catalyst). This package of work will be conducted in conjunction with the
University of Queensland (UQ) School of Chemical Engineering and will focus on flowsheet optimisation
and the development of a small-scale pilot testing program.
CAPITAL RAISINGS
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 included an issue of 4,500,523 shares, totalling of $765,089,
to (then) non-executive director David Fitch, which were allotted on 25 August 2023 after receiving
shareholder approval at an EGM.
GOVERNMENT RELATIONS
Throughout FY2024, 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.
R&D TAX INCENTIVE REFUND
On 11 June 2024, QEM received the R&D tax incentive rebate for a total of $240,708 for financial year 2023.
These funds will be reinvested into the on-going project development.
BOARD APPOINTMENTS
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.
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QEM Limited
21
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
On 30 June 2024, QEM released its Annual ESG Report and tenth consecutive Quarterly ESG Report using
Socialsuite’s ESG Go platform to monitor and disclose the Company’s ESG progress and initiatives. The
metrics QEM reports on form part of the World Economic Forum’s (WEF) standardised and globally
recognised Stakeholder Capitalism Metrics ESG framework, with the Company’s current ESG focus
highlighted below.
Figure 9: QEM has adopted the WEF Stakeholder Capitalism Metrics ESG Framework
ESG HIGHLIGHTS
PLANET - GHG EMISSIONS
In Q1 2023, QEM engaged Carbonhalo to conduct our inaugural third-party verified GHG emissions
inventory assessment for FY 2022 (12 months ending 30 June 2022). This initial assessment recorded
total GHG emissions of 146.80 tonnes of CO2 equivalent (tCO2e). A follow-up assessment for FY 2023
showed our business activity had returned a reduction in emissions to 116.15 tCO2e.
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QEM Limited
22
QEM uses these assessments as one of the tools to track progress towards a low-carbon footprint and
achieving our sustainability objectives. To further our commitment, QEM has also offset its unavoidable
emissions through verified carbon credits from projects focused on renewable energy, technology-based
emissions reduction, habitat regeneration, and waste capture. These offsets are sourced from Australian
ACCUs and International VERRA/UNFCC projects.
QEM is also dedicated to fostering sustainability awareness and engagement among our employees,
clients, and stakeholders, encouraging collective participation in our carbon reduction initiatives by sharing
with stakeholders our emissions reduction plans. We have also committed to reassess our emissions
annually, with the next evaluation underway for the end of FY 2024 through Carbonhalo.
Figure 10: QEM’s unavoidable emissions offsets sourced from Australian ACCUs and International
VERRA/UNFCC projects
GOVERNANCE – MATERIALITY & STAKEHOLDER ENGAGEMENT
QEM is committed to openly consulting with - and communicating our progress to - internal and external
stakeholders, including potential investors. We understand the importance of maintaining transparency in
the way the Company operates so our stakeholders and investors understand our goals and the progress
we are making throughout the Company and may be actively involved throughout the process.
QEM’s ESG Materiality Assessment was distributed to nearly 100 stakeholders in Q3 FY23/24 and the
Company received about a 25% rate of return, providing valuable feedback on QEM and the Julia Creek
Project through a sustainability lens. An analysis of material issues captured and feedback of material
issues to stakeholders occurred in Q4 FY23/24 The survey results were extremely aligned with our current
focus but will help us prioritise and improve on material ESG matters. Importantly, our stakeholders placed
a priority on the key areas that we also see as vital to our company: Good health and well-being, affordable
and clean energy, reduced inequalities, sustainable cities and communities, decent work and economic
growth, and life on land.
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COMMUNITY RELATIONS
Investment in our community is a high priority for QEM. QEM contributes to the region with 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, and preparation for QEM’s drilling campaigns
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 sponsor this financial year of the following McKinlay Shire events:
•
Julia Creek Dirt N Dust Festival (April)
•
Saxby Roundup weekend (June/July)
•
Sedan Dip (August)
•
Big Weekend in (October)
•
Beach Races in (November)
In early 2024, QEM became a WISER (Women In Sustainable Energy & Resources) Inc. Bronze Partner and
sponsored the WISER International Women’s Day Event held in Brisbane in March 2024.
INFORMATION ON DIRECTORS
TIM WALL – NON-EXECUTIVE CHAIRMAN
GAICD, MIE Aust, CPEng, RPEQ
Background
Mr Wall is an 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 has
over 35 years of global Oil Refining and fuel supply experience.
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
150,000 Class A performance rights
75,000 Class B performance rights
150,000 Class C performance rights
Directorships held in other listed entities in the past three years
None
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QEM Limited
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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 and AusIMM.
Interest in securities
20,730,690 Ordinary Shares
2,000,000 Options exercisable at $0.345 on or before 12 August 2025
250,000 Class A performance rights
125,000 Class B performance rights
250,000 Class C performance rights
Directorships held in other listed entities in the past three years
None
DAVID FITCH – NON-EXECUTIVE DIRECTOR (resigned 27 August 2024)
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 industry, in addition to dust suppressants for mining and road
construction. Mr. Fitch is also the largest shareholder of QEM.
Interest in securities
44,219,693 Ordinary Shares
1,000,000 Options exercisable at $0.345 on or before 12 August 2025
100,000 Class A performance rights
50,000 Class B performance rights
100,000 Class C performance rights
Directorships held in other listed entities in the past three years
None
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QEM Limited
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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 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 was previously 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 a Non-
executive Director of Red Hawk Mining, an 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
100,000 Class A performance rights
50,000 Class B performance rights
100,000 Class C performance rights
Directorships held in other listed entities in the past three years
Australian Vanadium Limited (current)
Red Hawk Mining (previously Flinders Mines Limited) (current)
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QEM Limited
26
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 (“Possability”) and ASX-listed company, Xanadu Mines. He also
serves as a Non-Executive Director of Bloomfield Group and Communicare, and a trustee of the Royal
Botanic Garden & Domain Trust. 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
150,000 Class A performance rights
75,000 Class B performance rights
150,000 Class C performance rights
Directorships held in other listed entities in the past three years
Xanadu Mines Ltd (current)
Cell Group Limited
Peak Rare Earths Ltd
COMPANY SECRETARY
DUNCAN CORNISH
Mr. Cornish was appointed as Company Secretary and CFO on 1 May 2024.
Mr. Cornish is a Chartered Accountant with significant experience as a public company CFO and Company
Secretary. He has more than 30 years’ experience in the accountancy profession including with the
accountancy firms Ernst & Young and PricewaterhouseCoopers. He has extensive experience in all aspects
of company financial reporting, corporate regulatory and governance areas, business acquisition and
disposal due diligence, initial public offerings and capital raisings and has served as CFO and/or Company
Secretary of several Australian and Canadian public companies.
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
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QEM Limited
27
and currently serves on the Board of Krakatoa Resources Limited, Albion Resources Limited and Rubix
Resources Limited.
Mr. Palumbo resigned from the Company on 1 May 2024.
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
The Company has entered into an Executive Employment Agreement with Gavin Loyden. Either party may
terminate this Agreement by providing written notice to the other party by providing three (3) months’ prior
notice. Following a review by the Board, Gavin Loyden’s remuneration package was increased to $340,000
plus superannuation per annum, effective from 25 February 2024.
Appointments of non-executive directors are formalised in the form of service agreements between
themselves and the Company. Their engagements have no fixed term but cease on their resignation or
removal as a director in accordance with the Corporations Act.
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 (subject to Board
discretion and shareholder approval). 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.
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QEM Limited
28
Any executive director, who is an Australian resident for tax purposes, receives a superannuation guarantee
contribution required by the government, which was 11%. No other retirement benefits are paid.
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. Performance rights issued as part of remuneration for the year ended 30 June 2024:
During the financial year, the Board were issued a total of 1,875,000 performance rights in three classes:
Class A, Class B and Class C.
-
Class A: A total of 750,000 Class A performance rights were granted to directors. These
performance rights will vest after a 3-year service period by 26 August 2026.
-
Class B: A total of 375,000 Class B performance rights were granted to directors. These
performance rights will vest on the Company’s share price reaching $0.40 at any time before 26
August 2026.
-
Class C: A total of 750,000 Class C performance rights were granted to directors. These
performance rights will vest upon the security of a strategic investor to the Company at any time
before 26 August 2027.
The value of these performance rights is recognized on a pro-rated basis over the life of the performance
rights, considering the probability of meeting the performance conditions. Refer Note 13 to the Financial
Statements.
4. Details of remuneration for the year ended 30 June 2024:
The remuneration for each key management personnel of the Company for the year ended 30 June 2024
was as follows:
Key
Management
Personnel
Short Term Benefits
Post-Employment
Equity-settled Share-
based Payments
Total
Performance
related %
% consisting
of options/
rights
Salary &
Fees
Prov for
leave
entitle-
ments
Non-
monetary
benefits
Super-
annuation
Other
Shares
Options
/Rights
$
$
$
$
$
$
$
%
%
Directors
David Fitch5
31,800
-
-
3,498
-
-
8,884
44,182
-
20%
Daniel Harris
40,000
-
-
-
-
-
8,884
48,884
-
18%
Gavin Loyden
308,990
51,683
8,323
33,989
-
-
22,209
425,194
-
5%
Tony Pearson1
34,194
-
-
3,761
-
-
17,741
55,696
-
32%
Tim Wall2
70,000
-
-
7,700
-
-
13,325
91,025
-
15%
Total
484,984
51,683
8,323
48,948
-
-
71,043
664,981
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QEM Limited
29
The remuneration for each key management personnel of the Company for the year ended 30 June 2023
was as follows:
Key
Management
Personnel
Short Term Benefits
Post-Employment
Equity-settled Share-
based Payments
Total
Performance
related %
% consisting
of options/
rights
Salary &
Fees
Prov for
leave
entitle-
ments
Non-
monetary
benefits
Super-
annuation
Other
Shares
Options
/Rights
$
$
$
$
$
$
$
%
%
Directors
John Foley3
53,000
-
-
-
73,860
126,860
-
58%
David Fitch5
31,800
3,339
-
-
123,100
158,239
-
78%
Daniel Harris
31,800
-
-
-
73,860
105,660
-
70%
Gavin Loyden
291,500
29,651
8,500
30,608
246,200
606,459
-
41%
John
Henderson4
10,600
2,968
73,860
87,428
-
84%
Tim Wall2
22,824
2,397
69,341
94,562
-
73%
Total
441,524
29,651
8,500
39,312
-
-
660,221
1,179,208
1Tony Pearson was appointed as a Non-Executive Director on 24 August 2023.
2Tim Wall was appointed as a Non-Executive Director on 12 October 2022, and succeeded John Foley as Non-Executive
Chairman on 15 February 2023.
3John Foley resigned from his position as Non-Executive Chairman effective 15 February 2023.
4John Henderson resigned from his position as Non-Executive Director effective 9 November 2022.
5David Fitch resigned as a Non-Executive Director on 27 August 2024.
5. Equity holdings of key management personnel
Share holdings
Number of ordinary shares held by key management personnel during the financial year ended 30 June
2024 was as follows:
30 June 2024
Balance at beginning of
year
Net change other
Balance at end of year
Directors
David Fitch1
38,939,955
5,279,738
44,219,693
Daniel Harris
-
-
-
Gavin Loyden
20,654,936
75,754
20,730,690
Tony Pearson
-
-
-
Tim Wall
100,000
-
100,000
TOTAL
59,694,891
5,355,492
65,050,383
1David Fitch resigned as a Non-Executive Director on 27 August 2024.
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QEM Limited
30
Option holdings
Number of options held by key management personnel during the financial year ended 30 June 2024 was
as follows:
30 June 2024
Balance at beginning of
year
Net change other
Balance at end of year
Directors
David Fitch1
1,000,000
-
1,000,000
Daniel Harris
600,000
-
600,000
Gavin Loyden
2,000,000
-
2,000,000
Tony Pearson
-
-
-
Tim Wall
600,000
-
600,000
TOTAL
4,200,000
-
4,200,000
1David Fitch resigned as a Non-Executive Director on 27 August 2024.
Performance Rights Holdings
Number of performance rights held by key management personnel during the financial year ended 30 June
2024 was as follows:
30 June 2024
Balance at beginning of
year
Issued as remuneration
Balance at end of year
Directors
David Fitch1
-
250,000
250,000
Daniel Harris
-
250,000
250,000
Gavin Loyden
-
625,000
625,000
Tony Pearson
-
375,000
375,000
Tim Wall
-
375,000
375,000
TOTAL
-
1,875,000
1,875,000
1David Fitch resigned as a Non-Executive Director on 27 August 2024.
6. Other Key Management Personnel Transactions
During the year ended 30 June 2024, the Company paid consulting fees to Daniel Harris totalling $66,000
(2023: $74,200).
David Fitch was a non-executive director of the Company during the year ended 30 June 2024, who resigned
on 27 August 2024. On 3 June 2023, 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 was for a term of 12
months and was rented to the Company for $30,000 per annum. After the lease expired on 2 June 2024, it
continued on a month-to-month basis under the same terms until such time as either party provides one
month notice. The Company paid CL Fitch Pty Ltd $27,500 (exc GST) under this agreement during the
financial year 2024 (2023: $30,000).
The Company incurred no other transactions with related parties.
“End of Remuneration Report (Audited)”
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QEM Limited
31
AFTER BALANCE DATE EVENTS
Mr David Fitch resigned as a non-executive director on 27 August 2024.
On 23 September 2024 the Company announced it was undertaking renounceable entitlement offer to raise
up to $3.0 million. The entitlement offer is partially underwritten to $1.6 million.
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 five meetings of directors were held. Attendances by each director during the
period were as follows:
Directors’ Meetings
No. eligible to attend
No. attended
David Fitch1
5
5
Daniel Harris
5
5
Gavin Loyden
5
5
Tony Pearson
5
5
Tim Wall
5
5
1David Fitch resigned as a Non-Executive Director on 27 August 2024.
ENVIRONMENTAL ISSUES
The Company is not aware of any breaches in relation to environmental matters.
UNQUOTED SECURITIES
At the date of this report, there were 6,350,000 unquoted options and 1,875,000 unquoted performance
rights on issue.
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.
2024 Annual Report | Directors’ Report qldem.com.au
QEM Limited
32
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 2024.
AUDITOR’S DECLARATION OF INDEPENDENCE
The auditor’s independence declaration for the year ended 30 June 2024 has been received and is included
within the financial statements.
Signed in accordance with a resolution of directors.
Gavin Loyden
Managing Director
25 September 2024
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33
Auditor’s Independence Declaration
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34
Statement of Profit or Loss and Other
Comprehensive Income
Note
2024
$
2023
$
Other income
2
2,863,663
453,398
Corporate and compliance expenses
(614,793)
(302,596)
Investor relations and marketing expenses
(131,439)
(188,467)
Travelling expenses
(239,278)
(260,315)
Employee benefits expense
(485,896)
(406,956)
Exploration expenditure
(2,829,307)
(2,639,248)
Share based payments expense
13
(99,898)
(752,451)
Amortisation and depreciation expense
(237,985)
(241,904)
Foreign exchange
(6,351)
(11,058)
Interest expense
(9,000)
-
Other expenses
(254,582)
(211,722)
Loss from continuing operations before income tax benefit
(2,044,866)
(4,561,319)
Income tax expense
3
-
-
Loss from continuing operations after income tax benefit
(2,044,866)
(4,561,319)
Other comprehensive income, net of tax
-
-
Total comprehensive loss attributable to Members of the parent
entity
(2,044,866)
(4,561,319)
Basic and diluted loss per share (cents)
4
(1.36)
(3.46)
The accompanying notes form part of these financial statements.
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QEM Limited
35
Statement of Financial Position as at
30 June 2024
Note
2024
$
2023
$
ASSETS
Current Assets
Cash and cash equivalents
5
1,645,176
1,970,158
Trade and other receivables
6
51,563
117,555
Other assets
7
38,178
96,858
Right of Use Asset
9
30,609
91,828
Total Current Assets
1,765,526
2,276,399
Non-Current Assets
Other Assets
7
19,450
19,450
Right of Use Asset
9
-
30,609
Plant and Equipment
10
531,181
1,062,649
Total Non-Current Assets
550,631
1,112,708
Total Assets
2,316,157
3,389,107
LIABILITIES
Current Liabilities
Trade and other payables
8
504,543
392,026
Lease Liabilities
9
36,485
104,198
Provisions
210,669
107,199
Total Current Liabilities
751,697
603,423
Non-Current Liabilities
Lease Liabilities
9
-
36,484
Total Non-Current Liabilities
-
36,484
Total Liabilities
751,697
639,907
Net Assets
1,564,460
2,749,200
EQUITY
Issued capital
11
16,991,177
16,230,949
Reserves
12
807,683
724,869
Accumulated losses
(16,234,400)
(14,206,618)
Total Equity
1,564,460
2,749,200
The accompanying notes form part of these financial statements.
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36
Statement of Changes in Equity for
the year ended 30 June 2024
Note
Issued
Capital
Reserves
Accumulated
Losses
Total
$
$
$
$
Balance at 1 July 2022
11,448,721
17,084
(9,645,299)
1,820,506
Issue of shares (net)
4,782,228
-
-
4,782,228
Loss after income tax expense for the year
-
-
(4,561,319)
(4,561,319)
Share-based payments
13
-
707,785
-
707,785
Balance at 30 June 2023
16,230,949
724,869
(14,206,618)
2,749,200
Issue of shares (net)
760,228
-
-
760,228
Loss after income tax expense for the year
-
-
(2,044,866)
(2,044,866)
Share-based payments
13
-
99,898
-
99,898
Options lapsed
-
(17,084)
17,084
-
Balance at 30 June 2024
16,991,177
807,683
(16,234,400)
1,564,460
The accompanying notes form part of these financial statements.
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37
Statement of Cash Flows for the year
ended 30 June 2024
Note
2024
$
2023
$
Cash Flows from Operating Activities
Payments for exploration and evaluation
(2,783,962)
(2,733,877)
Payments to suppliers and employees
(1,433,673)
(1,220,722)
Interest received
14,751
12,921
Grants received
240,707
440,477
Net Cash (Outflow) from Operating Activities
16
(3,962,177)
(3,501,201)
Cash Flows from Investing Activities
Payments for plant and equipment
(35,818)
(608,684)
Proceeds from sale of plant and equipment
2
3,000,000
-
Net Cash (Outflow) from Investing Activities
2,964,182
(608,684)
Cash Flows from Financing Activities
Lease repayments
(87,215)
(73,449)
Payments for capital raising costs
(4,861)
(147,893)
Proceeds from issued capital
765,089
4,875,910
Net Cash Inflow from Financing Activities
673,013
4,654,568
Net Increase in cash held
(324,982)
544,683
Cash and cash equivalents at the beginning of the year
1,970,158
1,425,475
Cash and cash equivalents at the end of the year
5
1,645,176
1,970,158
The accompanying notes form part of these financial statements.
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38
Notes to the Financial Statements for
the year ended 30 June 2024
1.
Statement of Material 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 25 September 2024 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 year ended 30 June 2024 the Company generated a loss of $2,044,866 and incurred operating cash
outflows of $3,962,176. As at 30 June 2024 the Company has cash and cash equivalents of $1,645,176
and net assets of $1,564,460.
The Company’s ability to continue to adopt the going concern assumption will depend upon the Company
being able to manage its liquidity requirement and by taking some or all of the following actions:
1. raising additional capital;
2. successful exploration and subsequent exploitation of the Company’s tenements;
3. applying for government grant funding; and
4. reducing its working capital expenditure.
The Company has a strong track record of raising capital, evidenced by the $14.3m raised since the
Company’s IPO in 2018. As announced on 23 September 2024, the Company executed a (lead manager)
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QEM Limited
39
mandate to raise up to $3.0m (before costs) via a partially underwritten (to $1.6m) renounceable
entitlement offer.
The directors have concluded as a result of the requirement to raise funds currently, and in the future, there
exists a material uncertainty that may cast significant doubt regarding the Company's ability to continue
as a going concern and therefore, the Company may be unable to realise their assets and discharge their
liabilities in the normal course of business. Nevertheless, after taking into account the current financial
position of the Company, and the Company’s ability to raise further capital, the directors have a reasonable
expectation that the Company will have adequate resources to fund its future operational requirements
and for these reasons they continue to adopt the going concern basis in preparing the financial report.
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.
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40
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
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
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41
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
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
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42
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.
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.
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43
(k)
Fair Value of Assets and Liabilities
The Company 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 Company 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.
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 (i.e., 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 (i.e., 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 Company selects and uses one or
more valuation techniques to measure the fair value of the asset or liability, The Company 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 Company
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.
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44
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 Company 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
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 Company 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 Company 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.
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45
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.
(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
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46
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)
New and Amended Standards and Interpretations
The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by
the AASB that are necessary for the current reporting period. Adoption of these new and amended
standards and interpretations did not have material impact to the financial statements.
2.
Other income
2024
$
2023
$
Interest received
14,751
12,921
Research and development grant
240,708
440,477
Gains on sale of plant and equipment(1)
2,608,204
-
2,863,663
453,398
(1) On 15 January 2024, QEM signed a binding agreement with Enel Green Power Australia Pty Ltd (EGPA)
for the sale of the Julia Creek Renewables Project (JCRP)(Sales Agreement). Conditions precedent were
subsequently met, and an upfront payment of $3,000,000 was made to QEM in accordance with the Sales
Agreement. Further contingent consideration is available based on milestones.
In accordance with AASB 15 (Revenue from Contracts with Customers) recognition of the upfront payment
occurred upon the transfer of the control of the assets to the purchaser (i.e. on settlement), as a “gain on
sale of plant and equipment”.
We have not yet recognised the potential contingent milestone payments as revenue, as we are currently
not sufficiently confident that it is highly probable that a significant reversal of any contingent consideration
recognised will not occur.
3.
Income tax benefit/(expense)
2024
$
2023
$
(a) Income tax (benefit)/expense
Current tax
-
-
Deferred tax
-
-
-
-
(b) Reconciliation of income tax expense to prima facie tax payable
Profit from ordinary activities before income tax
(2,044,866)
(4,557,726)
The prima facie tax payable on profit from ordinary activities before income
tax is reconciled to the income tax expense as follows:
Prima facie tax on operating profit at 30% (2023: 30%)
(613,460)
(1,367,318)
Annual Financial Report qldem.com.au
QEM Limited
47
Income tax benefit/(expense) continued:
2024
$
2023
$
Increase/(decrease) in income tax due to the tax effect of:
Non-deductible expenses
532,131
682,708
Research and development incentive
(72,212)
(132,143)
Temporary difference movements
(61,998)
(71,238)
Tax losses not recognised/(utilised)
215,539
887,991
Income tax reported in the statement of comprehensive income
-
-
(c) Deferred tax assets
Tax losses
3,469,151
2,951,820
Right of Use Asset
11,342
43,423
Provisions and accruals
1,431,643
928,711
Total deferred tax assets
4,912,136
3,923,954
Set-off deferred tax liabilities pursuant to set-off provisions
-
-
Net deferred tax assets
4,912,136
3,923,954
Less deferred tax assets not recognised
(4,912,136)
(3,923,954)
Net tax assets
-
-
(d) Deferred tax liabilities
The balance comprises temporary differences attributable to:
Accrued income
-
-
Total deferred tax liabilities
-
-
Set-off deferred tax assets pursuant to set-off provisions
-
-
Net deferred assets
-
-
(e) Tax Losses
Unused tax losses for which no deferred tax asset has been recognised
11,563,835
10,845,371
Potential tax benefit @ 30% (2023: 30%)
3,469,151
3,253,611
The benefit for tax losses will only be obtained if:
(a) The company and consolidated entity derive future assessable income of a nature and an amount
sufficient to enable the benefit from the deductions for the losses to be realised;
(b) The company and the consolidated entity continue to comply with the conditions for deductibility
imposed by law; and
(c) No changes in tax legislation adversely affect the ability of the Company and consolidated entity to
realise these benefits.
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QEM Limited
48
4.
Earnings per share
2024
Cents / share
2023
Cents / share
Basic/diluted loss per share
(1.36)
(3.46)
The loss and weighted average number of ordinary shares used in this
calculation of basic/diluted loss per share are as follows:
2024
$
2023
$
Loss from continuing operations
(2,044,866)
(4,561,319)
Number
Number
Weighted average number of ordinary shares for the purposes of basic/
diluted loss per share
150,703,108
131,963,511
5.
Cash and cash equivalents
2024
$
2023
$
Cash at bank
1,645,176
1,970,158
6.
Trade and other receivables
Current
GST receivable
51,563
72,889
Other receivable
-
44,666
51,563
117,555
As at 30 June 2024, 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
2024
$
2023
$
Current
Prepayments
38,178
96,858
38,178
96,858
Non-current
Bond
19,450
19,450
19,450
19,450
Annual Financial Report qldem.com.au
QEM Limited
49
8.
Trade and other payables
2024
$
2023
$
Current
Trade payables and accruals
437,872
392,026
Employee benefits
66,671
-
504,543
392,026
9.
Leases
a) Right-of-use asset
Balance at the beginning of the year
122,437
214,265
Additions
-
-
Depreciation
(91,828)
(91,828)
Balance at the end of the year
30,609
122,437
Current
30,609
91,828
Non-Current
-
30,609
Total
30,609
122,437
b) Lease liabilities
Office lease
36,485
140,682
Current
36,485
104,198
Non-Current
-
36,484
Total
36,485
140,682
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
2024
$
2023
$
Equipment at cost
58,241
51,103
Equipment – accumulated depreciation
(25,945)
(11,806)
Plant at cost
693,361
1,189,294
Plant – accumulated depreciation
(194,476)
(165,942)
531,181
1,062,649
Plant and equipment
Opening balance
1,062,649
716,877
Additions
28,537
517,050
Disposals (refer note 2)
(517,333)
-
Depreciation
(42,672)
(171,278)
531,181
1,062,649
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QEM Limited
50
11.
Issued Capital
2024
$
2023
$
(a) Issued and paid-up capital
151,391,713 (2023: 146,891,190) Ordinary Shares
16,991,177
16,230,949
(b) Movement in ordinary
shares on issue
2024
Number
2024
$
2023
Number
2023
$
Balance at beginning of period
146,891,190
16,230,949
121,630,162
11,448,721
Shares issued during the year:
Issue of ordinary shares – 12
August 2022 (1)
3,463,415
710,000
Issue of ordinary shares – 11
October 2022 (2)
7,322,720
1,610,998
Issue of ordinary shares – 21
October 2022 (3i)
2,727,272
600,000
Issue of ordinary shares – 26 April
2023 (4)
248,143
44,666
Issue of ordinary shares – 27 June
2023 (5)
11,499,478
1,954,911
Issue of ordinary shares – 25
August 2023 (6)
4,500,523
765,089
-
-
Capital raising costs
-
(4,861)
-
(138,347)
Balance at end of period
151,391,713
16,991,177
146,891,190
16,230,949
(1)
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.
(2)
On 11 October 2022, the Company issued 7,323,720 shares at $0.23 to raise $1,610,998 before
costs.
(3)
On 21 October 2022, the Company issued 2,727,272 shares at $0.23 to raise $600,000 before costs.
(4)
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.
(5)
On 27 June 2023, the Company issued 11,499,478 shares at $0.17 to raise $1,954,911 before costs.
(6)
On 25 August 2023, the Company issued 4,500,523 shares at $0.17 to raise $765,089 before costs.
(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.
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51
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 2024 was a surplus of $1,013,829 (2023:
$1,672,976) and the net decrease in cash held during the year was $324,982 (2023: increase of $544,683).
12.
Reserves
Share-Based Payments Reserve
The share-based payment reserve is used to recognise the fair value of options and performance rights
issued to directors, employees and consultants. This reserve can be reclassified to accumulated losses if
options or performance rights lapse. Refer to note 13 for details of share-based payment arrangements
and valuations.
13.
Share-based Payments
Director and Employee Share-based Payments
Share-based payments expense recognised during the year:
2024
$
2023
$
Share based payment reserve
Options issued – 12 August 2022 (1)
-
615,501
Options issued – 12 October 2022 (2)
-
69,341
Options issued – 27 April 2023 (3)
-
22,943
Performance rights issued – 31 August 2023 (4)
17,742
-
Performance rights issued – 9 November 2023 (5)
53,301
-
Options issued – 12 March 2024 (6)
28,855
-
99,898
707,785
Notes for the above table are:
(1) 5,000,000 incentive options were issued to directors on 12 August 2022. The options were issued with
an exercise price of $0.345 expiring on 12 August 2025 and vested immediately.
These options were calculated using the Black-Scholes option pricing model with the following inputs:
Options granted
Range
Expected volatility (%)
100%
Risk free interest rate (%)
3.08%
Weighted average expected life of options (years)
3.00
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QEM Limited
52
Expected dividends
Nil
Option exercise price ($)
$0.345
Share price at grant date ($)
$0.225
Fair value of option ($)
$0.1231
(2) 600,000 options were issued to Non-Executive Chairman Tim Wall on his deputy chair appointment
on 12 October 2022. The options were issued with an exercise price of $0.345 expiring 12 August
2025 and vested immediately.
These options were calculated using the Black-scholes option pricing model with the following inputs:
Options granted
Range
Expected volatility (%)
100%
Risk free interest rate (%)
3.61%
Weighted average expected life of options (years)
2.80
Expected dividends
Nil
Option exercise price ($)
$0.345
Share price at grant date ($)
$0.22
Fair value of option ($)
$0.1156
(3) 250,000 incentive options were issued to employees on 27 April 2023. The options were issued with
an exercise price of $0.20 expiring 1 May 2025 and vested immediately.
These options were calculated using the Black-scholes option pricing model with the following inputs:
Options granted
Range
Expected volatility (%)
100%
Risk free interest rate (%)
3.05%
Weighted average expected life of options (years)
2.00
Expected dividends
Nil
Option exercise price ($)
$0.20
Share price at grant date ($)
$0.18
Fair value of option ($)
$0.092
(4) A total of 375,000 performance rights were issued to directors on 24 August 2023. These performance
rights are in three classes: Class A, Class B and Class C.
-
Class A: 150,000 Class A performance rights were issued to director. These performance rights
will vest after a 3-year service period by 26 August 2026.
-
Class B: 75,000 Class B performance rights were issued to director. These performance rights will
vest on the Company’s share price reaching $0.40 at any time before 26 August 2026.
-
Class C: 150,000 Class C performance rights were issued to director. These performance rights
will vest upon the security of a strategic investor to the Company at any time before 26 August
2027.
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QEM Limited
53
These options were calculated using the Monte-Carlo option pricing model with the following inputs:
Tranche 1 Class A
Performance Rights1
Tranche 2 Class B
Performance Rights2
Tranche 3 Class C
Performance Rights3
Methodology
-
Monte-Carlo
-
Grant date
24 August 2023
24 August 2023
24 August 2023
Vesting date
26 August 2026
26 August 2026
26 August 2027
Expiry date
26 August 2026
26 August 2026
26 August 2027
Spot price
$0.20
$0.20
$0.20
Share Price target
-
$0.40
-
Risk-free rate
-
3.81%
-
Volatility
-
92.4%
-
Dividend Yield
-
-
-
Number
150,000
75,000
150,000
Value per PR
$0.20
$0.13268
$0.20
The value of these performance rights is recognized on a pro-rated basis over the life of the
performance rights, considering the probability of meeting the performance conditions.
(5) A total of 1,500,000 performance rights were issued to directors on 9 November 2023. These
performance rights are in three classes: Class A, Class B and Class C.
-
Class A: 600,000 Class A performance rights. These performance rights will vest after a 3-year
service period by 26 August 2026.
-
Class B: 300,000 Class B performance rights. These performance rights will vest on the Company’s
share price reaching $0.40 at any time before 26 August 2026.
-
Class C: 600,000 Class C performance rights. These performance rights will vest upon the security
of a strategic investor to the Company at any time before 26 August 2027.
These options were calculated using the Monte-Carlo option pricing model with the following inputs:
Tranche 1 Class A
Performance Rights1
Tranche 2 Class B
Performance Rights2
Tranche 3 Class C
Performance Rights3
Methodology
-
Monte-Carlo
-
Grant date
9 November 2023
9 November 2023
9 November 2023
Vesting date
26 August 2026
26 August 2026
26 August 2027
Expiry date
26 August 2026
26 August 2026
26 August 2027
Spot price
$0.20
$0.20
$0.20
Share Price target
-
$0.40
-
Risk-free rate
-
4.16%
-
Volatility
-
92.2%
-
Dividend Yield
-
-
-
Number
600,000
300,000
600,000
Value per PR
$0.20
$0.13268
$0.20
The value of these performance rights is recognized on a pro-rated basis over the life of the
performance rights, considering the probability of meeting the performance conditions.
Annual Financial Report qldem.com.au
QEM Limited
54
(6) 500,000 incentive options were issued to employees on 12 March 2024. The options were issued with
an exercise price of $0.20 expiring 1 March 2026.
These options were calculated using the Black-scholes option pricing model with the following inputs:
Options granted
Range
Expected volatility (%)
68.3%
Risk free interest rate (%)
3.64%
Weighted average expected life of options (years)
1.97
Expected dividends
Nil
Option exercise price ($)
$0.20
Share price at grant date ($)
$0.17
Fair value of option ($)
$0.0577
Share-based payment options during 2024:
Option
exercise
price
Option expiry
date
Balance
1 July
2023
Granted as
Compens-
ation
Exercised/
Lapsed
Balance
30 June
2024
Total
Vested
30 June
2024
Total Vested
and
Exercisable
30 June
2024
Weighted
average
remaining
contractual
life
$0.345
12/08/2025
5,000,000
-
-
5,000,000
5,000,000
5,000,000
1.12 years
$0.345
12/08/2025
600,000
-
-
600,000
600,000
600,000
1.12 years
$0.20
01/05/2025
250,000
-
-
250,000
250,000
250,000
0.84 years
$0.20
01/03/2026
-
500,000
-
500,000
500,000
500,000
1.67 years
Total
5,850,000
500,000
-
6,350,000
6,350,000
6,350,000
1.15 years
Share-based payment options during 2023:
Option
exercise
price
Option expiry
date
Balance
1 July
2022
Granted as
Compens-
ation
Exercised/
Lapsed
Balance
30 June
2023
Total
Vested
30 June
2023
Total Vested
and
Exercisable
30 June
2023
Weighted
average
remaining
contractual
life
$0.068
17/03/2023
250,000
-
(250,000)
-
-
-
0 year
$0.345
12/08/2025
5,000,000
5,000,000
5,000,000
5,000,000
2.12 years
$0.345
12/08/2025
600,000
600,000
600,000
600,000
2.12 years
$0.20
01/05/2025
250,000
250,000
250,000
250,000
1.84 years
Total
250,000
5,850,000
(250,000)
5,850,000
5,850,000
5,850,000
2.11 years
Annual Financial Report qldem.com.au
QEM Limited
55
Share-based payment performance rights during 2024:
Performa
nce rights
exercise
price
Performance
rights expiry
date
Balance
1 July
2023
Granted as
Compens-
ation
Exercised/
Lapsed
Balance
30 June
2024
Total
Vested
30 June
2024
Total Vested
and
Exercisable
30 June
2024
Weighted
average
remaining
contractual
life
Class A
$0
26/06/2026
-
750,000
-
750,000
-
-
2.16 years
Class B
$0
26/06/2026
-
375,000
-
375,000
-
-
2.16 years
Class C
$0
26/06/2027
-
750,000
-
750,000
-
-
3.16 years
Total
-
1,875,000
-
1,875,000
-
-
There is no performance rights on issued in 2023.
14.
Auditors’ Remuneration
2024
$
2023
$
Amounts, received or due and receivable by auditors for:
- audit or review services
32,420
31,500
15.
Key Management Personnel (KMP) and Related Party Transactions
(a) Key Management Personnel
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 2024. The totals of
remuneration paid to KMP of the Company during the year are as follows:
2024
$
2023
$
Short-term employee benefits
544,990
441,524
Post-employment benefits
48,948
39,312
Share-based payments
71,043
660,221
664,981
1,141,057
(b) Other Transactions
During the year ended 30 June 2024, the Company paid consulting fees to Daniel Harris totalling $66,000
(2023: $74,200).
David Fitch was a non-executive director of the Company during the year ended 30 June 2024, who resigned
on 27 August 2024. On 3 June 2023, 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 was for a term of 12
months and was rented to the Company for $30,000 per annum. After the lease expired on 2 June 2024, it
continued on a month-to-month basis under the same terms until such time as either party provides one
month notice. The Company paid CL Fitch Pty Ltd $27,500 (exc GST) under this agreement during the
financial year 2024 (2023: $30,000).
The Company incurred no other transactions with related parties.
Annual Financial Report qldem.com.au
QEM Limited
56
16.
Cash flow information
2024
$
2023
$
(a) Reconciliation of Cash Flow from Operations with Loss after Income Tax
Loss after income tax
(2,044,866)
(4,561,319)
Non cash flows:
Finance cost on right of use asset
5,070
10,412
Depreciation on right of use asset
69,777
70,626
Depreciation on plant and equipment
168,208
171,278
Gains on sale of plant and equipment (refer note 2)
(2,608,204)
-
Share based payments
99,898
752,451
Changes in assets and liabilities:
- (increase)/decrease in trade and other receivables
44,666
(67,370)
- (increase)/decrease in other assets
58,680
19,329
- increase/(decrease) in trade and other payables
141,125
103,392
- Increase/(decrease) in other current liability
103,470
-
(3,962,176)
(3,501,201)
(b) Non-Cash investing and financing activities
Reconciliation of cash and non-cash movements in the investing and financing activities:
2023
Cash flows
Non-cash
adjustments
2024
$
$
$
$
Plant and equipment
1,062,649
28,537
(560,005)
531,181
Lease liability
140,682
(87,215)
(16,982)
36,485
17.
Contingent liabilities and contingent assets
It is the opinion of directors of the Company that there were no contingent assets or liabilities.
18.
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 includes assets that are associated with the
determination and assessment of the existence of commercial economic reserves.
Annual Financial Report qldem.com.au
QEM Limited
57
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 2024, the Company had no development assets. The Board considers that
it has only operated in one segment, being mineral exploration.
The Company is domiciled in Australia. All revenue from external customers are only generated from
Australia. No revenues were derived from a single external customer.
19.
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
2024
$
2023
$
Cash and cash equivalents – AAA rated counterparties
1,645,176
1,970,158
Receivables – other
-
117,555
1,645,176
2,087,713
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.
Annual Financial Report qldem.com.au
QEM Limited
58
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.
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 2024 (2023: 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.
20.
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
2024
$
2023
$
No later than 12 months
720,000
334,167
Between 1 and 5 years
4,500,000
145,833
5,220,000
480,000
21.
Events Subsequent to Period End
Mr David Fitch resigned as a non-executive director on 27 August 2024.
On 23 September 2024 the Company announced it was undertaking renounceable entitlement offer to raise
up to $3.0 million. The entitlement offer is partially underwritten to $1.6 million.
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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59
Consolidated
Entity
Disclosure
Statement
Name of
entity
Type of
entity
Trustee
partner or
participant
in JV
Share
capital
Place of
incorporation
Australian
resident or
foreign
resident
Foreign
jurisdiction
of foreign
residents
QEM
Limited
Body
Corporate
-
100%
Australia
Australian
-
Basis of preparation
QEM Limited has no controlled entities and, therefore, is not required by the Australian Accounting
Standards to prepare consolidated financial statements. As a result, section 295(3A)(a) of the
Corporations Act 2001 does not apply to the entity.
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QEM Limited
60
Directors’ Declaration for the year
ended 30 June 2024
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 2024 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.
4. The consolidated entity disclosure statement on the previous page is true and correct.
This declaration is signed in accordance with a resolution of the Board of Directors.
Gavin Loyden
Managing Director
25 September 2024
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Annual Financial Report | ASX Information qldem.com.au
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66
The following additional information is required by the ASX Limited in respect of listed public companies
and was applicable at 17 September 2024.
1.
Shareholder and Option holder information
a.
Distribution of Equity Securities
Ordinary Shares
Performance Rights
Range
No. Holders
No. Shares
No. Holders
No. Rights
1 - 1,000
39
4,605
-
-
1,001 - 5,000
434
1,482,593
-
-
5,001 - 10,000
260
2,052,125
-
-
10,001 - 100,000
467
16,782,117
-
-
100,001 and over
114
131,070,272
5
1,875,000
Total
1,314
151,391,712
5
1,875,000
Options ($0.345 @ 12-Aug-25)
Options ($0.20 @ 1-May-25)
Options ($0.20 @ 1-Mar-26)
Range
No. Holders
No. Options
No. Holders
No. Options
No. Holders
No. Options
1 - 1,000
-
-
-
-
-
-
1,001 - 5,000
-
-
-
-
-
-
5,001 - 10,000
-
-
-
-
-
-
10,001 - 100,000
-
-
-
-
-
-
100,001 and over
10
5,600,000
1
250,000
2
500,000
Total
10
5,600,000
1
250,000
2
500,000
There are 312 shareholders holding less than a marketable parcel of 3,846 shares.
b.
Substantial Shareholders
The Company has received substantial shareholder notices from the following entities:
Name of Shareholder
No. Ordinary Shares
% of Total Shares
TRACEY LOYDEN
20,730,690
13.69%
DAVID FITCH
44,219,693
29.21%
NICHOLAS STONE
7,591,222
5.01%
c.
Voting Rights
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.
Options and performance rights do not carry voting rights.
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67
d.
20 Largest Shareholders
#
Registered Name
Number of
Shares
% of total
Shares
1
DL FITCH NOMINEES PTY LTD *
21,029,684
13.9%
2
GREENWICH GLOBAL PTY LTD
19,707,248
13.0%
3
ER FITCH PTY LTD *
9,800,366
6.5%
4
STONE GROUP PTY LTD
7,475,952
4.9%
5
DAVRAC INVESTMENTS PTY LTD
5,786,822
3.8%
6
CL FITCH PTY LTD *
5,242,225
3.5%
7
MR QILIANG GU
4,171,108
2.8%
8
CITYMETRO PTY LTD
3,901,054
2.6%
9
EVOLUTION HUB PTY LTD *
3,584,444
2.4%
10
ML FITCH NOMINEES PTY LTD *
3,439,053
2.3%
11
PARADISE MARINE PTY LTD
3,000,000
2.0%
12
DLFCMS NOMINEES PTY LTD
2,415,229
1.6%
13
SKIPTRAK PTY LTD
2,223,857
1.5%
14
P & L DEMPSEY SMSF PTY LTD
2,150,000
1.4%
15
MR MICHAEL MYLES FORD & MRS ELIZABETH FORD
2,083,210
1.4%
16
TRAFALGAR HOUSE PTY LTD
1,798,946
1.2%
17
ZARMAD PTY LTD *
1,745,126
1.2%
18
CRAV PTY LTD
1,650,000
1.1%
19
DAVGOE INVESTMENTS PTY LTD
1,473,118
1.0%
20
MT DAVIES INVESTMENTS PTY LTD
1,473,118
1.0%
Top 20 total
104,150,560
68.8%
Total Shares
151,391,712
100.0%
*Denotes merged holding
2.
The name of the company secretary is Duncan Cornish.
3.
The address of the registered office in Australia is:
Level 6, 10 Market Street, Brisbane QLD 4000
4.
Registers of securities are held at the following address:
Automic Registry Services, Level 2, 267 St Georges Terrace, PERTH WA 6000
5.
Stock Exchange Listing:
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of
the ASX Limited.
6.
Restricted Securities:
The Company currently has no restricted securities held in Escrow.
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QEM Limited
68
SCHEDULE OF MINERAL TENEMENTS
Project
Tenement
Interest held by
QEM Limited
Julia Creek
EPM 25662
100%
Julia Creek
EPM 25681
100%
Julia Creek
EPM 26429
100%
Julia Creek
EPM 27057
100%