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Contents
Executive Chairman’s Report
Chief Executive Officer’s Report
Mining Exploration Entity Annual Reporting Requirements
Directors’ Report
Lead Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
4
5
7
11
25
26
27
28
29
30
49
50
54
2020 Annual Report - Page | 3
Executive
Chairman’s Report
On behalf of the Centrex Board, I am pleased to present
the Company’s Annual Report for financial year 2020.
During the financial year the Company continued to
make progress with its Ardmore Phosphate Rock Project
near Mount Isa. The Company continues to believe in
the Project’s ability to deliver attractive returns for
shareholders. Under current fund raising plans, the
Company is moving forward with preparations for
mining at Ardmore which will establish the operation
and lead to further marketing potential.
While the Company’s focus is on progressing towards
development of Ardmore in Queensland, the Company
continues to promote its other interesting projects,
including the Oxley Potassium Nitrate Project in
Western Australia and the Goulburn Base Metal and
Gold Project in New South Wales. While work on these
projects has been inhibited by the global Covid-19
pandemic, useful progress has been made at Oxley
investigating additional processing options and at
Goulburn, work was carried out to target areas
prospective for gold mineralisation.
During the financial year the Company substantially
reduced its outgoings from previous levels of
expenditure and the former Chairman, Mr David
Klingberg and several directors resigned. I sincerely
thank David for his efforts in setting up the Company to
be able to move ahead with the Ardmore Phosphate
project when project funding becomes available.
Former CEO Mr Simon Slesarewich, with the support of
the dedicated Centrex staff, was instrumental in
continuing work on the Company’s projects and in
particular Ardmore and the Board thanks him and the
other staff for their diligent service to the Company.
This year has been a very difficult one for the Company
and its personnel, as it has been for the Australian
community in general. The scale and potential duration
of the COVID-19 pandemic and its market consequences
are such that the Board has considered it prudent to
protect its valuable remaining staff and assets by taking
decisive action to preserve cash to enable the Company
to be able to act strongly and quickly once the Company
raises sufficient finance for its projects.
The Board appreciates the support of its shareholders
and looks forward to being in a position to report
favourably on progress to shareholders during the
coming financial year.
Page | 4 – 2020 Annual Report
Graham Chrisp
Executive Chairman
Chief Executive
Officer’s Report
The Company has several important projects, among
them its 100% owned flagship Ardmore Phosphate Rock
Project near Mount Isa in Queensland.
ARDMORE PHOSPHATE ROCK PROJECT, QLD
Ardmore is a commercially attractive project with a
relatively shallow, high grade, low impurity deposit
which, with simple processing through the existing
upgrading plant on site, can produce a premium
phosphate rock concentrate which is suitable for a
number of uses including the manufacture of
superphosphate and other chemicals. The Ardmore
project is serviced by existing infrastructure (such as
road and rail networks) and its proximity to key markets
enables a relative freight cost advantage potentially
leading to attractive shareholder returns.
The Company continues its work on establishing
additional markets for phosphate rock production from
Ardmore. The project has been designed to produce
800,000 tonnes per annum of high grade, low impurity
rock phosphate predominantly for export. Marketing of
the premium phosphate rock product gained good
acceptance as a feed for superphosphate production
and other uses. Recent work has also indicated there
may be substantial potential to supply additional
specialty phosphate rock products into local and
overseas markets, and technical and market
development work is being carried out to ascertain the
size and requirements of these markets.
The potential value of these additional markets has not
previously been included in the profitability projections
for the Ardmore project.
As noted in previous announcements, the Ardmore
Definitive Feasibility Study (“DFS”) delivered a robust set
of numbers that have since been improved upon
through optimisation work carried out in February 2019.
As previously announced, Centrex proposes to carry out
additional work to update the DFS to account for
various changes to the DFS since its release such as
product markets and marketability, projected
phosphate price going forward, updating of the of
production, transport and other relevant factors such as
foreign exchange projections.
The Company is now proceeding to implement its plan
to mine 25,000 tonnes in the first quarter of 2021. The
cost of this program of works is approximately $600,000,
and discussions are advancing regarding an interim
capital raising for this work.
Following the initial mining operation, and as soon as
funding becomes available, the Company intends to
move as quickly as possible towards development of
the full Ardmore Phosphate Project. Discussions
continue with funders with the potential to provide all of
the substantial capital required. If successful, Centrex
would become a producer of high grade low impurity
phosphate rock for sale, with additional potential for
the sale of as-mined ore and tailings from the
processing plant.
Apart from direct uses of the Ardmore phosphate rock,
the Company is investigating the potential for
commercial quantities of rare earth elements (REE)
which are contained in the Ardmore deposit. These rare
earths, if extracted would have a value that has not
previously been included in economic modelling for the
Ardmore project.
Ardmore location map
2020 Annual Report - Page | 5
Recently, the State Government, through the Geological
Survey of Queensland has commenced investigations to
improve scientific understanding of the REE association
with phosphate deposits including Ardmore and supply
the geoscience data needed to help locate and define
deposits for future production.
Oxley potash project. The Company has also had
discussions with interested parties aimed at progressing
the Oxley project further while it focuses on bringing the
Ardmore Project into production.
GOULBURN GOLD/BASE METALS PROJECT, NSW
The Company continues to evaluate strategic options of
the Goulburn gold/base metals project aimed to realise
value for shareholders. Due to the Covid-19 pandemic
no on-ground exploration was undertaken on the project
during the year. Additional work aimed at better
understanding the gold results from previous sampling is
being carried out on Goulburn. The heightened interest
in the gold prospectivity of the Goulburn region is
supported by the high-grade gold results achieved by
Skye Metals Ltd (ASX:SKY) at its nearby Cullarin project.
3D design of Ardmore processing plant and mine services
facilities
Funding
Phosphate Market
Traded phosphate rock benchmarks range from 27-34%
P2O5, and Ardmore’s Rock Phosphate concentrate sits
above the top end of this range at around 35%. It also
contains very low levels of cadmium, a toxic heavy
metal that occurs naturally in phosphate rock fertilisers.
Cadmium is becoming a major issue for the fertiliser
industry worldwide, with the European Union imposing
limits on levels contained in imported phosphate rock
to protect its constituents from adverse health effects.
Taking into account these factors, together with
geographic location and political environment, the
Company believe that the rock phosphate concentrate
to be produced from Ardmore will be attractive to
markets in the Asia-Pacific region.
Phosphate rock price forecasts sourced from market
research specialist CRU indicate positive real term
growth in the global phosphate market going forward,
with potential for increasing premiums for high-grade
product due to limited supply in the segment.
OXLEY POTASH PROJECT, WA
Work at the Oxley Project, is focussed on a 32km long
outcropping lava flow that predominantly comprises of
potassium feldspar, with the aim being the production of
high value fertiliser. The process technology
substantially investigated so far can convert the
potassium feldspar to soluble potassium chloride
(potash) through roasting with salt, for subsequent water
leaching and purification. The potash then reacts with
nitric acid to yield potassium nitrate, a high-value
horticultural fertiliser.
The Company has engaged experienced mineral
processing consultants Mineral Strategies Pty Ltd to
investigate refinements of processing options for the
Page | 6 – 2020 Annual Report
At the date of this report, although negotiations are
continuing with numerous parties, additional finance
has not been secured in order to substantially progress
the Company's projects. We are working diligently with a
number of parties to progress discussions on future
funding availability in order to progress the projects in
the manner warranted. As a result of the current funding
uncertainty, the Company has undertaken impairment
testing and taken up an impairment of its exploration
projects in accordance with Accounting Standards. The
Company remains focussed on securing funding to
progress its projects as soon as possible with the aim of
realising their full potential value for shareholders.
COVID-19 Response
This calendar year has been a difficult one for the
Company and its personnel, as it has been for the
Australian community in general. The scale and
potential duration of the COVID-19 pandemic and its
market consequences are such that the Board has
considered it wise to take every step necessary to protect
its staff and other people associated with its projects,
and to take all necessary action to preserve cash to
enable the Company to act strongly and decisively once
this situation has abated.
I am especially appreciative of the cooperation from the
Company’s directors and staff in measures to reduce the
Company’s operating costs until a successful capital
raising can be completed and the full development of
the Ardmore project is able to commence.
Mr Graham Chrisp
Executive Chairman
Mining Exploration Entity Annual
Reporting Requirements
LIST OF TENEMENTS IN WHICH THE GROUP HAS AN INTEREST
TENEMENT LIST
AS AT 30TH JUNE 2020
Location
Licence
number
Description
Held by:
ML 5542
Ardmore Phosphate Rock Project
Queensland
EPM 26551
Ardmore EPM 26551
EPM 26568
Ardmore EPM 26568
EPM 26841
Ardmore EPM 26841
Western Australia
New South Wales
E70/3777
E70/4318
EL 7388
EL 7503
Oxley A
Oxley C
Goulburn
Archer
ELA 32048
Northern Territory ELA 32048
Northern Territory
EL 320825
Northern Territory EL 32082
EL 320915
Northern Territory EL 32091
Wholly owned subsidiary of Centrex Metals Limited:
1 Centrex Phosphate Pty Ltd
2 Centrex Potash Pty Ltd
3
Lachlan Metals Pty Ltd
4 Centrex QLD Exploration Pty Ltd
5
EL 32082 and EL 32091 have been relinquished post 30 June 2020
CPhos1
CPhos1
CPhos1
CPhos1
CPot2
CPot2
LM3
LM3
CQld4
CQld4
CQld4
Interest
%
100
100
100
100
100
100
100
100
Application
Application
Application
2020 Annual Report - Page | 7
ANNUAL REVIEW OF MINERAL RESOURCES AND ORE RESERVES
The information included in the tables below was prepared in accordance with the JORC Code 2012. The Company
confirms that it is not aware of any new information or data that materially affects the information included in the table
and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not
changed.
POTASSIUM ORE MINERAL RESOURCES BY AREA
AS AT 30TH JUNE 2020
Location
Resource
Classification
Tonnage
(Mt)
Oxley Potassium
Project
Measured
Indicated
Inferred
Total
-
-
154.7
154.7
Head Grade
K2O (%)
Cut-off grade K2O (%)
-
-
8.3
8.3
-
-
6.0
6.0
PHOSPHATE ORE MINERAL RESOURCES BY AREA
AS AT 30TH JUNE 2020
Location
Resource
Classification
Tonnage
(Mt)
Ardmore
Phosphate Rock
Project
Measured
Indicated
Inferred
Total
3.3
11.1
1.7
16.2*
* Totals may not add precisely due to rounding.
Head Grade
P2O5 (%)
Cut-off grade P2O5 (%)
29.8
27.4
26.8
27.8
16.0
16.0
16.0
16.0
PHOSPHATE ORE RESERVE ESTIMATE
AS AT 30TH JUNE 2020
Ore Reserve Category
Probable
Proven
Total Ore Reserves
Tonnage
(Mt)
7.3
2.8
10.1
P2O5 (%)
30.2
30.3
30.2
Page | 8 – 2020 Annual Report
COMPARISON OF ANNUAL MINERAL RESERVES AND RESOURCES STATEMENT TO THE PRIOR YEAR
The table below summarises the changes that took place as far as the Group’s mineral resources and reserves are
concerned. The information contained in this table should be read in conjunction with the detailed resource and reserve
information provided above.
Location
Potassium
Oxley
Phosphate
Ardmore
Ardmore
Resource or
Reserve
Tonnage (Mt)
30/6/2019
30/6/2020
Notation
Resource
154.7
154.7
No change.
Resource
Reserve
16.2
10.1
16.2
10.1
No change.
No change.
SUMMARY OF GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS IN PLACE FOR THE
REPORTING OF MINERAL RESOURCES AND ORE RESERVES
Mineral Resources and Ore Reserves are estimated by suitably qualified consultants in accordance with the JORC Code,
using industry standard techniques and internal guidelines for the estimation and reporting of Ore Reserves and Mineral
Resources. These estimates and the supporting documentation are then reviewed by suitably qualified Competent
Persons from the Company.
All Ore Reserve estimates are prepared in conjunction with feasibility studies which consider all material factors.
The Mineral Resources and Ore Reserves Statements included in the Annual Report are reviewed by suitably qualified
Competent Persons from the Company prior to its inclusion.
CROSS REFERENCING OF THE RESOURCES ANNOUNCMENTS
For more detail regarding the Oxley resources please see the announcement of 8th March 2016.
http://www.asx.com.au/asxpdf/20160308/pdf/435nrchjm48mjx.pdf
For more detail regarding the Ardmore resources please see the announcement of 1st June 2018.
https://www.asx.com.au/asxpdf/20180601/pdf/43vgxdjlpsgcwb.pdf
For more detail regarding the Ardmore reserves please see the announcement of 8th October 2018.
https://www.asx.com.au/asxpdf/20181008/pdf/43z1q8nvm95k58.pdf
2020 Annual Report - Page | 9
COMPETENT PERSONS STATEMENT
The information in this report relating to Exploration Results (contained in the CEO’s report) is based on information either
compiled or reviewed by Mr Alastair Watts who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Watts
is the General Manager Exploration of Centrex Metals Limited. Mr Watts has sufficient experience, which is relevant to the
style of mineralization and type of deposit under consideration and to the activity, which he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr Watts consents to the inclusion in the report of the matters based on his information in the
form and context in which it appears.
The information in this report relating to the Mineral Resources of the Oxley Potassium Project is based on and accurately
reflects information compiled by Ms Sharron Sylvester of OreWin Pty Ltd, who is a consultant and adviser to Centrex Metals
Limited and who is a Member of the Australian Institute of Geoscientists (RPGeo). Ms Sylvester has sufficient experience
relevant to the style of mineralisation and type of deposit under consideration and to the activity she is undertaking to qualify
as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Ms Sylvester consents to the inclusion in the report of the matters based on this information in
the form and context in which it appears.
The information in this report relating to Mineral Resources of the Ardmore Phosphate Rock Project is based on and
accurately reflects information compiled by Mr Jeremy Clark of RPM, who is a consultant and adviser to Centrex Metals
Limited and who is a Member of the Australian Institute of Geoscientists and AusIMM. Mr Clark has sufficient experience
relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify
as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr Clark consents to the inclusion in the report of the matters based on this information in the
form and context in which it appears.
The information in this report that relates to Ore Reserves is based on information compiled by Mr Ben Brown, a Competent
Person who is a Member of The Australasian Institute of Mining and Metallurgy. Ben Brown is employed by Optima Consulting
and Contracting Pty Ltd, an external independent consultancy. Ben Brown has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 Edition of the ‘Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Ben Brown consents to the inclusion in the report of the matters based on his information in
the form and context in which it appears.
Page | 10 – 2020 Annual Report
Directors’ Report
For the Year Ended 30th June 2020
The Directors present their report together with the consolidated financial report of Centrex Metals Limited (“Company”)
and its controlled entities (“Group”), for the financial year ended 30th June 2020 and the auditor’s report thereon.
Section
Contents of Directors’ Report
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Directors and the Company Secretary
Executives considered to be Key Management Personnel
Directors’ Meetings
Corporate Governance Statement
Remuneration Report (audited)
Principal Activity
Operating and Financial Review
Dividends
Events subsequent to year end
Likely Developments
Directors’ Interests in Shares, Options and Rights
Share Rights
Indemnification and insurance of Directors and Officers
Environmental Regulation and Performance
Non-audit services
Rounding
Lead Auditor’s Independence Declaration
2020 Annual Report - Page | 11
1. Directors and the Company Secretary
1.1 Directors
The directors in office at any time during or since the end of the financial year are:
Name and Qualifications
Position, Experience and special responsibilities
Mr Graham Chrisp
Executive Chairman
B Tech (CE)
Appointed 21/1/10
Chairman since 2/12/19
Mr Chrisp has a degree in Civil Engineering and has substantial experience in numerous
aspects of business operations, including design and construction of roads and other
earthworks, mineral exploration and property development. Having previously been an
owner and operator of earth moving equipment for mining and civil applications, Mr Chrisp
has practical experience with modest scale mining operations, including several of his own
developments. He was a founding director of Centrex Metals Limited (having previously
served as its Managing Director from 2003 to 2005) and has numerous private interests.
Mr Chrisp is a director of Dapop Pty Ltd, trustee of the Chrisp CXM Family Trust, which is
the largest shareholder in the Company. Accordingly, Mr Chrisp is not considered to be
“independent” for the purposes of the Company’s corporate governance policies.
Mr Chrisp is a member of the Company’s Remuneration and Nomination Committee and
Audit and Risk Committee.
Mr Jason Chrisp
Non-executive Alternate Director to Mr Graham Chrisp
BA(Acc), DBAC
Appointed 23/7/19
Mr Jason Chrisp has experience based on a background in accountancy and numerous
aspects of business from working in the mineral exploration and land development fields
for over 10 years. He is also proficient in computing, analysis and project management. Mr
Chrisp has previously served on the board of ASX-listed company Outback Metals Ltd and
is also a private company director.
Mr Chrisp is a director of Dapop Pty Ltd, trustee of the Chrisp CXM Family Trust which is the
largest shareholder in the Company. Accordingly, Mr Chrisp is not considered to be
“independent” for the purposes of the Company’s corporate governance policies.
Mr Ben Chrisp
Non-executive Alternate Director to Mr Graham Chrisp
Appointed 22/9/20
Mr Ben Chrisp is completing a degree in accounting and finance and has worked in the
mineral exploration and land development fields for over 10 years. He is experienced in
finance, computing and project management. Mr Chrisp has previously served on the
board of ASX-listed company Outback Metals Ltd and is also a private company director.
Mr Chrisp is a director of Dapop Pty Ltd, trustee of the Chrisp CXM Family Trust, which is the
largest shareholder in the Company. Accordingly, Mr Ben Chrisp is not considered to be
“independent” for the purposes of the Company’s corporate governance policies.
Dr A John Parker
Independent Non-Executive Director
BSc (Hons).PhD, DipCompSc,
MAIG, MAICD
Appointed 17/12/19
Dr Parker is a geologist, geophysicist and manager with extensive local and international
experience and knowledge of the geology, mineral deposits and mineralizing systems in
the Precambrian. He was formerly Chief Geologist with the mapping branch of the South
Australian Geological Survey and responsible for the mapping and publication of
geological maps throughout South Australia. In the late 1980’s he initiated the first
geological mapping GIS in Australia, a system that has subsequently been developed to
become the global leading GIS, SARIG.
Mr Parker is a member of the Company’s Remuneration and Nomination Committee and
the Audit and Risk Management Committee.
Mr Peter Cox
Independent Non-Executive Director
Page | 12 – 2020 Annual Report
FCA (retired)
Appointed 28/1/20
Mr Cox has previously been Director and Secretary of ASX-listed company Lincoln Minerals
Limited (2007- 2012), Chairman of Wireless Communications Pty Ltd (2004 – 2016) and
Chairman of ASX-listed MIKOH Corporation Limited (2003-2005). In addition he has
provided secretarial services to a number of ASX listed companies. He was a Fellow of the
Institute of Chartered Accountants in Australia until his retirement in 2014 and brings to the
Company extensive accounting and governance experience.
Mr Cox is a member of the Company’s Audit and Risk Management Committee and the
Remuneration and Nomination Committee.
Mr David Klingberg AO
Independent Non-Executive Chairman - (Appointed 15/1/10, Resigned 2/12/19)
FTSE, D UniSA, B.Tech, FIE
Aust, FAus IMM, FAICD, KGSJ
Independent Non-Executive Director - (Appointed 2/12/19, Retired 17/12/19)
Appointed 19/4/05
Mr Klingberg retired during the year.
Chairman since 15/1/10
Resigned (Chairman) 2/12/19
Retired 17/12/19
Mr Kiat Poh
Independent Non-Executive Director
CDipAF, GDip MS, Dip CE
Mr Poh resigned during the year.
Appointed 21/5/08
Resigned 7/11/19
Mr Jim Hazel
BEc, SF Fin, FAICD
Appointed 12/7/10
Retired 20/9/19
Independent Non-Executive Director
Mr Hazel retired during the year.
Mr Chris Indermaur
Independent Non-Executive Director
Mr Indermaur resigned during the year
BEng (Mech), GDipEng
(Chem), LLB, LLM, GDLP
Appointed 1/7/17
Resigned 28/1/20
1.2 Company Secretaries
Company Secretaries
Dr John Santich, BE, MEngSc, PhD, DipLaw, MSocSc, was appointed as Company Secretary on 31 March 2020. Dr Santich
is a corporate lawyer and engineer with broad corporate legal, company director and company secretarial experience.
The outgoing Company Secretary, Ms Christine Manual, was appointed Company Secretary on 10 May 2019 and ceased
her engagement on 31 March 2020.
2020 Annual Report - Page | 13
2. Executives considered to be Key Management Personnel
The executives considered to be Key Management Personnel in office at any time during or since the end of the financial
year are:
Mr Alastair Watts, General Manager, Exploration
BSc(Geo), DipBs(Front Line Management), MAusIMM
Mr Alastair Watts, appointed 15th March 2007, is a geologist with over 25 years’ experience in exploration, mining and
project development. He has extensive gold, iron ore and phosphate mining experience as well as a successful history of
mineral discovery and development. The technical expertise gained at the Phosphate Hill mine provided significant
exposure to the fertiliser market to complement Centrex’s development of the Ardmore Phosphate Rock Project. A broad
technical knowledge of exploration has been gained from base metal and gold projects in the Lachlan Fold Belt of New
South Wales, the eastern goldfields of Western Australia, the Drummond Basin in north Queensland and nickel laterite
deposits in Indonesia. He has held previous positions in both major resources houses, and mid-tier and junior operators.
His roles have spanned mining, quality control and project management.
Mr Gérard Bosch, Manager Approvals & Stakeholder Relations
Bsc(Geol)(Hons), FAusIMM
Mr Gérard Bosch was appointed to the role on 27th February 2018. Mr Bosch is a geologist with over 37 years working in
Australian mineral exploration, discovery and development. He has held previous positions in BP Minerals, North
Flinders Mines, Normandy Mining, Australian Zircon and Eyre Iron. Mr Bosch has particular experience in the pre-
development phase of mining operations, including statutory approvals and land access, and has broad experience in
the management of exploration.
Mr Simon Slesarewich, Chief Executive Officer (“CEO”)
Mr Slesarewich was appointed to CEO on 3rd April 2019 and ceased employment on 26th February 2020.
Mr Mark Terry, Chief Financial Officer (“CFO”)
Mr Terry was appointed on 27th August 2018 and ceased employment on 10th December 2019.
Mr Steve Klose, General Manager, Projects
Mr Steve Klose was appointed on 12th August 2016 and ceased employment on 17th January 2020.
3. Directors’ Meetings
The number of directors’ meetings and number of meetings attended by each of the directors of the Group during the
year ended 30th June 2020 was:
Board Meetings *
Audit and Risk Management
Committee Meetings
Remuneration and Nomination
Committee
Eligible to
Attend
Number
Attended
Eligible to Attend Number Attended
Eligible to
Attend
Number
Attended
Mr G Chrisp
11
11
Dr John Parker
Mr Peter Cox
Mr D Klingberg AO
Mr K Poh
Mr J Hazel
Mr C Indermaur
6
5
6
6
3
7
Page | 14 – 2020 Annual Report
6
5
6
6
3
7
-
1
1
1
1
1
-
-
1
1
1
1
1
-
1
-
-
1
1
-
1
1
-
-
1
1
-
1
4. Corporate Governance Statement
The Board is committed to the principles underpinning
best practice in corporate governance. The Company
must comply with the ASX Listing Rules which require it
to report annually on the extent to which it complied
with the Corporate Governance Principles and
Recommendations 3rd Edition (“Principles”) as
published by the ASX Corporate Governance Council.
The Board believes that the Company has complied
with the Principles for the current reporting period
unless otherwise stated in the Appendix 4G and
Corporate Governance Statement which is lodged on
the Company announcements platform at the same
time as the annual report.
A description of the Company’s main corporate
governance practices are available on the Company’s
website located at:
http://centrexmetals.com.au/governance/
5. Remuneration Report - audited
5.1 Principles of compensation
The remuneration report provides details of the
remuneration of the Company’s directors and the
senior executives identified as those who had authority
for planning, directing and controlling the Company’s
activities during the reporting period (“Key Management
Personnel”).
Total remuneration packages for the executives of the
Group are competitively set to attract and retain
appropriately qualified and experienced people. The
Remuneration and Nomination Committee assists the
Board in setting remuneration strategy.
Executive and Non-Executive Directors
Total compensation for all Non-Executive Directors,
pursuant to the constitution must not exceed $500,000
per annum. Fees were set by incorporating significant
discount with reference to standard practice by
comparator companies.
For the year ended 30th June 2020, (up until 16th
December 2019), the Non-Executive Directors’
compensation comprised Directors’ base fees of
$81,000 per annum (2019: $81,000 per annum) for the
Chairman and $49,500 per annum (2019: $49,500 per
annum) for the other Non-Executive Directors. In
addition, $9,000 per annum (2019: $9,000 per annum)
was paid for membership of the Audit and Risk
Management Committee, with an additional $2,250 per
annum (2019: $2,250 per annum) for the Chairman of
the Audit and Risk Management Committee.
From 17th December 2019, Directors’ compensation
was revised and comprised $35,000 per annum for each
Director, with no additional fees to be paid for Board
Committee or Chairman responsibilities.
Superannuation is paid on behalf of the Non-Executive
Directors at the rate of 9.5% per annum as is legislated.
Where the Company engages a director as a consultant
the value of superannuation benefits that would
otherwise have been payable are paid as additional
fees.
CEO and Company executives
Remuneration packages for the CEO and other
Company executives previously included a mix of fixed
and variable compensation, the variable compensation
using short and long term incentives. The remuneration
packages previously took into account market practice
of comparable organisations within the industry and
reflect capability, role and experience of each executive.
The fixed remuneration component (cash,
superannuation and fringe benefits) was previously set
by utilising industry surveys with particular reference to
the practices of companies in the lowest quartile of the
survey (i.e. those with a similar market capitalisation
and with a similar sized workforce). Total remuneration
(base salary packages and variable remuneration)
previously provided the opportunity for executives to
reach compensation levels in the next quartile as
outlined within the industry surveys through the
following variable awards:
•
•
the Short Term Incentive (“STI”) Plan, which
awards a cash bonus of between 0% and 20% of
fixed remuneration subject to individual and
Company targets being met; and
the Long Term Incentive (“LTI”) Plan, under which
the executive may be granted incentive rights,
some of which vest after an extended period of
continuous employment (Retention Rights), the
others vesting after an assessment of performance
(Performance Rights).
For the 2020 financial year there were no awards made
under the STI plan. Details of the awards of rights
issued under the LTI plan are listed at the conclusion of
this Remuneration Report.
Mr Simon Slesarewich, CEO
Mr Slesarewich was appointed CEO on 3rd April 2019. Mr
Slesarewich ceased employment from the Company
26th February 2020. His total annual fixed remuneration
was $350,000 and for the 2020 financial year (pro-rata) it
was $240,615 (2019: $85,253).
Mr Mark Terry, CFO
Mr Terry was appointed CFO on 27th August 2018 and
ceased employment from the Company on 10th
December 2019. His total annual fixed remuneration
was $300,000 and for the 2020 financial year (pro-rata) it
was $133,076 (2019: $255,770).
2020 Annual Report - Page | 15
Other executives considered to be Key Management
Personnel
In addition to the Non-Executive Directors and
executives listed above, the following persons are
considered to be Key Management Personnel of the
Group:
Mr Alastair Watts
General Manager Exploration
Mr Steve Klose
General Manager Projects
Mr Gérard Bosch
Manager Approvals & Stakeholder
Relations
Mr Steve Klose ceased employment on 17th January
2020.
Service Agreements
The Company has service contracts with each executive
listed above. Each contract is for an unlimited term and
can be terminated by either party by giving up to three
months’ written notice (except for Mr Gérard Bosch,
whereby either party must give four weeks written
notice). The Company reserves the right to terminate
the contract without notice in the event of misconduct
or dishonesty.
Each existing executive has agreed with the Company to
be remunerated at a lesser rate due to disruption
caused by the Covid-19 pandemic. The Company
expresses significant gratitude to the executives for their
cooperation in assisting towards the long term viability
of Centrex.
Page | 16 – 2020 Annual Report
Remuneration of Key Management Personnel (KMP) (Consolidated)
Details of the nature and amount of each major element of remuneration of each of the KMP are:
Short-term
Salary & fees
STI cash bonus
(1)
Non-monetary
benefits
Annual leave (2)
$
$
$
$
Directors
Mr G Chrisp
Executive Chairman
Mr A J Parker (5)
Non-exec
Mr P Cox (6)
Non-exec
Mr D Klingberg (7)
Non-exec
Mr B Hammond
Managing Director
Mr J Hazel (8)
& CEO
Non-exec
Mr K Poh (9)
Non-exec
Mr C Indermaur (10)
Non-exec
Total compensation: Directors
Executives
Mr A Watts
GM Exploration
Mr Gerard Bosch
Mgr. Approvals
Mr S Slesarewich (11)
Mr M Terry (12)
CEO
CFO
Mr S Klose (13)
GM Projects
Mr Gavin Bosch
CFO
Total compensation: executives
Total compensation: KMP
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
45,305
49,500
18,911
-
14,866
-
43,990
98,550
-
298,171
15,188
60,750
25,979
64,058
32,715
73,052
196,954
644,081
245,608
260,500
159,088
183,600
219,740
83,792
121,531
235,749
158,524
255,307
-
52,298
904,491
1,071,246
1,101,445
1,715,327
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,328
(46,727)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,328
(46,727)
5,068
5,068
4,880
5,194
-
-
-
-
2.836
5,194
-
-
12,784
15,456
12,784
19,784
(30,238)
(23,757)
1,499
3,011
(2,760)
2,830
(21,523)
22,071
(22,895)
11.122
-
(38,363)
(75,917)
(23,086)
(75,917)
(69,813)
(1) STI represents the amount of the STI or bonus that will be paid to the executive for performance for the relevant financial year.
(2) In accordance with the requirements of the Accounting Standards, remuneration includes the movement in accrued annual leave for the period.
(3) In accordance with the requirements of the Accounting Standards, remuneration includes a proportion of the value of the equit y linked
compensation determined as at the grant date and progressively expensed over the vesting period. The amount allocated as remuneration is
not relative to or indicative of the actual benefit (if any) that the senior executives may ultimately realise should the e quity instruments vest.
2020 Annual Report - Page | 17
Super-
annuation
benefits
Share-based
payments (3)
Termination
Other long
term benefits
(4)
Total
Performance
related
Options /
Rights related
$
$
$
$
$
4,304
4,702
1,797
-
1,412
-
-
-
-
25,000
1,443
5,771
-
-
-
-
8,956
35,743
20,623
24,747
15,113
17,442
20,875
1,461
11,545
20,021
15,060
24,254
-
4,968
83,216
92,893
-
-
-
-
-
-
-
-
-
34,656
-
-
-
-
-
-
-
34,656
11,584
16,826
11,584
16,826
47,604
17,382
29,584
42,171
7,276
16,826
-
-
107,632
110,031
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
57,692
-
-
-
-
-
57,692
-
-
-
-
-
-
-
-
-
-
49,609
54,202
20,708
-
16,278
-
43,990
98,550
-
(110,621)
204,807
-
-
-
-
-
-
-
(110,621)
(42,863)
9,397
6,449
2,935
-
296
-
871
-
8,373
-
(61,108)
(36,414)
(39,236)
16,631
66,521
25,979
64,058
32,715
73,052
205,910
561,190
209,782
292,781
198,613
229,008
285,459
105,761
198,829
320,883
160,801
321,076
-
(42,205)
1,053,484
1,227,304
92,172
107,632
57,692
(36,414)
1,259,394
%
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
%
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
16.9
0.0
0.0
0.0
0.0
0.0
0.0
5.5
5.7
5.8
7.3
16.7
16.4
14.9
13.1
4.5
5.2
0.0
0.0
128,366
(149,857)
(4) Other long term benefits represents the movement in the senior executive’s long service leave entitlements measured as the present value of
1,788,494
144,687
-
the estimated future cash outflows to be made in respect of the senior executive’s service between the respective reporting d ates.
(5) Mr A John Parker was appointed as a director on 17th December 2019.
(6) Mr Peter Cox was appointed as a director on 28th January 2020.
(7) Mr David Klingberg resigned as Chairman on 2nd December 2019 and retired as a director on 17th December 2019.
Page | 18 – 2020 Annual Report
(8) Mr Jim Hazel retired as a director on 20th September 2019.
(9) Mr Kiat Poh resigned as a director on7th November 2019.
(10) Mr Chris Inermmaur resigned as a director on 28th January 2020.
(11) Mr Simon Slesarewich’s employment with the Company ceased on 26th February 2020.
(12) Mr Mark Terry’s employment with the Company ceased on 10th December 2019.
(13) Mr Steve Klose’s employment with the Company ceased on 17th January 2020.
5. Remuneration Report – audited (continued)
Consequences of performance on shareholder wealth
Any variable components of the Company’s executives’ remuneration (the short and long term incentives) seek to
encourage alignment of management performance and shareholders’ interests by linking remuneration to performance
of the Company as a whole.
Any award of any short term or long term incentive is always at the discretion of the Board which will also take into
account the following indices when assessing performance, although the Board acknowledges that as an exploration
company the use of such indices does not fully reflect Company performance.
Profit / (loss) attributable to
owners of the company
Dividends paid (per share)
Share price at 30 June
Short Term Incentive – Cash Bonus
2020
2019
2018
2017
2016
(19,820,532)
(1,384,316)
(1,139,938)
488,828
(4,987,053)
--
$0.03
-
$0.11
-
-
$0.10
$0.06
-
$0.06
Any STI Plan ordinarily involves the setting of key performance indicators (KPI) which must be achieved to be awarded
the short term incentive (cash bonus). These relate to overall Company performance and individual performance set by
the Board for the relevant period.
During the period the Company set KPIs for the MD and CEO, linked to the achievement of Company performance
hurdles. No performance bonus is payable for the reporting period.
Long Term Incentive – Equity based
Any LTI Plan is intended to reward efforts and results that promote long term growth in shareholder value. The KPI
which must be achieved for the vesting of Company executives’ Performance Rights is the growth in the Company’s
share price.
The other component of the LTI Pan is the grant of Retention Rights. Retention Rights vest on the completion of a period
of service with the Company. The purpose of granting Retention Rights is to retain executives who over the time of their
employment accumulate significant intellectual property of value to the Company, and to ensure the continuity of that
knowledge and in turn promote a stable and efficient executive team.
Rights
The Company did not issue any rights to directors and KMP during the year:
2020 Annual Report - Page | 19
6. Principal Activity
The principal activity of the Group during the reporting year was exploration on the following areas:
• Phosphate project development in Queensland;
• Potash exploration in Western Australia; and
• Base metals exploration in New South Wales.
7. Operating and Financial Review
A review of the operations of the Group during the year and the results of those operations are as follows:
The net profit / (loss) for the reporting year, after providing for income tax was:
2020
$
2019
$
Net profit / (loss) after income tax
(19,820,532)
(1,384,316)
The Group incurred expenditure of $1,352,302 (2019: $4,069,764) on mineral tenements during the year. Further details
can be found in Note 6 to the financial statements.
The ability of the Company to raise funds has been severely impacted by the COVID-19 situation. As a result, progress on
projects and scheduling of works has been delayed. The Company has also taken other measures to conserve its cash
position as a direct result of COVID-19 including reducing staff working hours and facilitating work from home
arrangements.
Further information on the Group’s operating activities can be found in the CEO’s Report.
8. Dividends
No dividends were declared during the year.
9. Events subsequent to year end
No material events occurred subsequent to the end of the financial year.
Page | 20 – 2020 Annual Report
10. Likely Developments
The mineral tenements with an interest held by the Group and available for mineral exploration have the following
expenditure covenants to maintain exploration rights:
Tenement
Held by
Ownership
Covenant ($’000)
Period
Expiry
New South Wales
Goulburn EL7388
Archer EL7503
Western Australia
Oxley A E70/3777
Oxley C E70/4318
Queensland
Ardmore EPM 26551
Ardmore EPM 26568
Ardmore EPM 26841
Northern Territory
EL 32082
EL 32091
(i)
(ii)
(iii)
(iv)
*
LM(i)
LM(i)
100%
100%
625*
50*
Annual
Annual
20th Aug 2023
7th Apr 2022
CPot(ii)
CPot(ii)
100%
100%
CPhos(iii)
CPhos(iii)
CPhos(iii)
100%
100%
100%
CQld (iv)
CQld (iv)
100%
100%
72
70
5
3
97
53
21
Annual
Annual
29th Dec 2020
13th May 2022
Annual
Annual
Annual
24th Nov 2022
29th Jan 2023
29th Oct 2023
Annual
Annual
22nd Aug 2025
22nd Aug 2025
Lachlan Metals Pty Ltd (“LM”)
Centrex Potash Pty Ltd (“CPot”)
Centrex Phosphate Pty Ltd (“CPhos”)
Centrex QLD Exploration Pty Ltd (“CQld”) – tenements have been relinquished post 30th June 2020
The annual commitments for the New South Wales tenements are an estimate of the work program to
which the Group has committed to undertake over the term of the licence.
The Directors have assessed the status of all of the Group’s tenements and believe all tenements have sufficient
remaining mineral potential to warrant continued exploration. It is noted however, that substantial advancement of the
projects is subject to sufficient finance being raised and because sufficient funding has not yet been arranged the
Company has taken up an impairment on its Ardmore, Oxley and Goulburn exploration assets on a fair value less cost to
sell basis.
2020 Annual Report - Page | 21
11. Directors’ Interests in Shares, Options and Rights
The relevant interest of each Director in the shares or options over such instruments issued by the Company and other
related bodies corporate, as notified by the Directors to the Australian Stock Exchange in accordance with S205G(1) of
the Corporations Act 2001, at the date of this report is as follows:
Name
Shares
Retention Rights
Performance Rights
Number
Price/Exp.
Number
Price/Exp.
Dapop Pty Ltd (a company associated with
Mr Graham Chrisp and Mr Jason
Chrisp)
110,905,672
Dr A J Parker
Mr Peter Cox
Patna Properties Pty Ltd (a
company associated with Mr
David Klingberg AO)1
Mr Kiat Poh2
Candle Grove Pty Ltd (a company
associated with Mr Jim Hazel)3
-
-
2,042,810
2,618,880
246,985
Mr Chris Indermaur4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Patna Properties Pty Ltd is a company associated with Mr David Klingberg AO who retired effective 17 December 2019.
2 Mr Kiat Poh resigned effective 7 November 2019.
3 Candle Grove Pty Ltd is a company associated with Mr Jim Hazel who retired 20 September 2019.
4 Mr Chris Indermaur resigned effective 28th January 2020.
Other than transactions as detailed in Note 13 to the financial statements, no director has received or become entitled
to receive, during or since the end of the reporting year, a benefit because of a contract made by the Group or a related
body corporate with a director, a firm of which a director is a member or a Company in which a director has a
substantial financial interest.
12. Share Rights
Rights granted to Directors and Executives of the Group
The Company did not grant any options or rights over shares since 30 June 2020. Details of rights granted during the
year, in addition to rights vested, exercised or lapsed, are detailed in Note 13 to the financial statements.
Unissued shares under rights
At the date of this report the unissued ordinary shares of the Company under unlisted rights are as follows:
Timing
Amount paid on
each share
No. of unissued
shares under rights
No. of unissued shares at 30th Jun 2019
New rights issued during the 12 months ending 30th Jun 2019
Options / rights converted to shares during the period
Expired options / rights during the period
No. of unissued shares under unlisted rights at 30th Jun 2020
New rights issued since 30th Jun 2020
Options / rights converted to shares since 30th Jun 2020
Expired options / rights since 30th Jun 2020
No. of unissued shares under unlisted rights at report date
Page | 22 – 2020 Annual Report
-
-
-
-
-
-
-
-
-
5,775,906
-
-
(4,465,906)
1,310,000
-
-
(1,310,000)
-
13. Indemnification and insurance of Directors and Officers
Directors’ and Officers’ Liability Insurance has been secured to insure the Directors, officers and senior executives of the
Group to the extent permitted by the Corporations Act 2001. The officers of the Company and the Group covered by the
insurance policy include any person acting in the course of duties for the Company or the Group who is or was a
Director, secretary or senior executive. The contract of insurance prohibits the disclosure of the nature of the insurance
covered and the amount of the premium.
The Company’s constitution provides that the Company indemnifies every person who is or has been an officer of the
Company for any liability (other than for legal costs) incurred by that person as an officer of the Company and any
subsidiary of the Company. The Company has entered into deeds of access, insurance and indemnity with the current
Directors of the Company. The agreements indemnify the Directors to the extent permitted by law against certain
liabilities and legal costs incurred by the Directors; require the Company to maintain and pay Directors’ and Officers’
Liability Insurance in respect of the Director; and provide the Director with access to board papers and other
documents.
14. Environmental Regulation and Performance
The Group is aware of its responsibility to impact as little as possible on the environment, and where there is any
disturbance, to rehabilitate sites. During the period under review the majority of work carried out was on Ardmore
Phosphate Rock Project in NW Queensland and the Group followed procedures and pursued objectives in line with
requirements published by the relevant regulators including the Department of Environment and Science, the
Department of Natural Resources, Mines and Energy and the Department of Aboriginal and Torres Strait Islander
Partnerships.
The requirements from the relevant government departments are quite detailed and encompass the impact on owners
and land users, heritage, health and safety and proper restoration practices. The Group supports this approach and is
confident that it properly monitors and adheres to these objectives, and any local conditions applicable. The Group
and its partner companies have individuals with detailed job responsibilities in this area.
The Board is not aware of any significant environmental breaches during the period covered by this report.
15. Non-audit services
During the year KPMG, the Company’s auditor, has performed certain other services in addition to their statutory duties.
The Board has considered the non-audit services provided during the year by the auditor and in accordance with
written advice provided by resolution of the Audit and Risk Management Committee is satisfied that the provision of
those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
•
•
all non-audit services were subject to the corporate governance procedures adopted by the Company and
have been reviewed by the Audit and Risk Management Committee to ensure they do not impact the integrity
and objectivity of the auditor; and
the non-audit services provided do not undermine the general principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing
the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an
advocate for the Company or jointly sharing risks and rewards.
Details of the amounts paid or accrued to the auditor of the Company, KPMG, and its related practices for audit and
non-audit services provided during the year are set out below.
Audit Services
Other services
Auditors of the company - KPMG
2020
$
46,575
11,321
57,896
2019
$
56,407
28,541
84,948
2020 Annual Report - Page | 23
16. Rounding
The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
dated 24 March 2016 and in accordance with that Financial Instrument, amounts in the consolidated financial
statements and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated. All
currencies are in Australian dollars unless stated otherwise.
17. Lead Auditor’s Independence Declaration
The Lead auditor’s independence declaration is set out on page 25 and forms part of the Directors’ Report for the
financial year ended 30th June 2020.
Signed in accordance with a Resolution of the Board of Directors:
Mr Graham Chrisp
Executive Chairman
Dated at Adelaide this 30th day of September 2020.
Page | 24 – 2020 Annual Report
KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Centrex Metals Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Centrex Metals Limited for the financial year ended 30 June 2020 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Paul Cenko Partner Adelaide 30 September 2020 Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the Year ended 30th June 2020
Note
2020
$’000
2019
$’000
Other income
Office and administration expenses
Consultants and management expenses
Directors' fees
Employee benefit expenses
Exploration expenditure written off
Depreciation expense
Reversal of previous land impairment
Other expenses
Results from operating activities
Finance income
Finance costs
Net finance income
Loss before income tax
Income tax benefit
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
Loss attributable to:
Owners of the Company
Loss for the period
Earnings per share for loss attributable to the
ordinary equity holders of the company:
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
2
2
6
7
2
5
5
59
(388)
(260)
(197)
(550)
(18,466)
(14)
-
(53)
43
(475)
(425)
(347)
(1,020)
-
(20)
724
(99)
(19,869)
(1,619)
50
(2)
48
235
-
235
(19,821)
(1,384)
-
(19,821)
-
(19,821)
(19,821)
(19,821)
-
(1,384)
-
(1,384)
(1,384)
(1,384)
Cents per share
Cents per share
(6.28)
(6.28)
(0.44)
(0.44)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the
notes to the consolidated financial report.
Page | 26 - 2020 Annual Report
Consolidated Statement of Changes
in Equity
For the Year ended 30th June 2020
Contributed
equity
Share Option
reserve
Profit reserve
Accumulated
Losses
Total
$’000
$’000
$’000
$’000
$’000
Current Period
Balance at 30th June 2019
Loss for the period
Total Comprehensive Income
for the Period
Contributions from/to equity
owners
Share-based payment
transactions
Balance at 30th June 2020
Prior Period
Balance at 30th June 2018
Loss for the period
Total Comprehensive Income
for the Period
Contributions from/to equity
owners
Share-based payment
transactions
Balance at 30th June 2019
41,351
2,540
1,005
(12,484)
(19,821)
32,412
(19,821)
(19,821)
(19,821)
-
-
-
-
-
41,351
108
2,648
-
-
-
-
21
41,351
124
2,540
-
-
-
-
-
-
1,005
(32,305)
-
108
12,699
41,330
2,416
1,005
(11,100)
(1,384)
33,651
(1,384)
(1,384)
(1,384)
1,005
(12,484)
-
145
32,412
The Consolidated Statement of Changes in Equity is to be read in conjunction with the notes to the consolidated
financial report.
2020 Annual Report - Page | 27
Consolidated Statement of
Financial Position
As at 30th June 2020
Note
As at
30th June 2020
$’000
Restated (1)
30 June 2019
$’000
Assets
Cash and cash equivalents
Term deposits
Receivables and other assets
Total Current Assets
Deposits held as security
Exploration and evaluation expenditure
Plant and equipment
Total Non-Current Assets
8
6
7
Total assets
Liabilities
Trade and other payables
Employee benefits
Total Current Liabilities
Employee benefits
Provision for rehabilitation
Total Non-Current Liabilities
Total Liabilities
Net assets
Equity
Contributed equity
Share option reserve
Profit reserve
Accumulated losses
Total equity
437
1,377
187
2,001
323
10,674
12
11,009
13,010
72
78
150
11
151
162
312
12,699
41,351
2,648
1,005
(32,305)
12,699
1,268
4,015
136
5,419
350
27,787
23
28,160
33,579
850
199
1,049
19
99
118
1,167
32,412
41,351
2,540
1,005
(12,484)
32,412
(1) The prior period has been restated to show the effect of Plant & Equipment reclassification as detailed in Note 6.
The Consolidated Statement of Financial Position is to be read in conjunction with the notes to the consolidated
financial report.
Page | 28 - 2020 Annual Report
Consolidated Statement of
Cash Flows
For the Year ended 30th June 2020
Note
2020
$’000
Restated (1)
12 months ending
30 June 2019
$’000
Cash flows from operating activities
Other income received
Payments to suppliers and employees
Research and development tax incentive received
Net cash used in operating activities
16(b)
Cash flows from investing activities
Expenditure on mining tenements
Interest received
Acquisition of property plant and equipment
7
Proceeds on disposal of assets
Other
Cash transferred (to) / from term deposits
Cash transferred (to) / from security deposits
Net cash used in / (from) investing activities
Cash flows from financing activities
Net cash from financing activities
Net increase / (decrease) in cash
Cash at the beginning of the year
Cash at the end of the year
50
(2,313)
-
(2,263)
(1,302)
63
(3)
9
-
2,638
27
1,432
-
(831)
1,268
437
12
(2,186)
116
(2,058)
(8,258)
297
(15)
1,350
35
6,383
(160)
(368)
-
(2,426)
3,694
1,268
(1) The prior period has been restated to show the effect of Plant & Equipment reclassification as detailed in Note 6.
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated financial
report.
2020 Annual Report - Page | 29
Notes to the Consolidated Financial
Statements
For the Year ended 30th June 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES
The Company’s registered office is located at Level 6, 44
Waymouth Street Adelaide, SA 5000. The consolidated
financial report of the Company for the financial year
ended 30th June 2020 comprises the Company and its
subsidiaries (together referred to as the ‘Group’). The
Group is a for profit entity and is primarily involved in
minerals exploration and development in Australia.
The financial report was authorised for issue by the
directors on 30th September 2020.
a) Statement of Compliance
The financial report is a general purpose financial report,
which has been prepared in accordance with Australian
Accounting Standards (‘AASBs’) adopted by the Australian
Accounting Standards Board (‘AASB’) and the
Corporations Act 2001. The consolidated financial
statements of the Group complies with International
Financial Reporting Standards (‘IFRSs’) and
interpretations adopted by the International Accounting
Standards Board (‘IASB’).
b) Going Concern
The Group financial statements have been prepared on a
going concern basis which contemplates the continuity
of normal business activity and realisation of assets and
the settlement of liabilities in the normal course of
business.
The Group has no debt obligations. The Group incurred
a loss of $19.821 million, including impairment and write-
off of exploration expenditure of $18.466 million related
to exploration and evaluation and net cash outflows
from operating and investment activities of $0.831
million, for the year ended 30 June 2020. At 30 June 2020,
the Company holds current assets of $2.001 million,
which includes cash and term deposits of $1.814 million.
The Group’s principal objective is to create value through
the discovery and development of mineral resources and
as such it does not presently have a source of operating
income. To support the planned level of exploration and
project development activities of the business, including
the continued development of the Ardmore project, the
Group is reliant on funds from external sources over the
next 12 months and in the future. The Directors have
prepared a cash flow estimate for the twelve month
period from the date of signing this financial report and
Page | 30 – 2020 Annual Report
identified a requirement to raise approximately $1.0
million to meet minimum ongoing operating
commitments and expenditure required on the Ardmore
Phosphate project in order for the Group to meet the
obligation to commence extraction of at least 25,000
tonnes of Phosphate ore by 27 June 2021. Failure to
commence the commercial extraction of minerals at a
rate at which total production of the minerals extracted
will exceed 25,000 tonnes per annum by 27 June 2021
will crystallise a further liability of $2.0 million payable
under the terms of the purchase agreement of the
Ardmore Phosphate project from Southern Cross
Fertilisers Pty Ltd.
The Group has commenced documentation for a Rights
Issue with a targeted raising of approximately $2.8
million by the end of December 2020. In addition to the
rights issue, the Group is negotiating terms for a
Convertible Note from Australia New Zealand Resources
Corporation Pty Ltd, a director related entity, which
could provide the Group with a loan of up to $1.0 million.
The convertible note will be subject to shareholder
approval at this year’s Annual General Meeting.
The Directors of Centrex are optimistic funds will be
raised under one of the above alternatives and therefore
are of the opinion that the Group is able to meet its
obligations as they fall due for at least twelve month
from the date of signing this financial report and that the
going concern basis is appropriate in the circumstances.
However, at the date of this report, as the Group has not
yet finalised its planned Rights Issue and has not agreed
the terms of the Convertible Note, which would also be
subject to approval from the Group’s shareholders, and
therefore these fund raising alternatives remain
uncertain at this time. Should the Group not be
successful in obtaining adequate funding from the
sources noted above, there is a material uncertainty as to
the ability of the Group to continue as a going concern
and to realise its assets and extinguish its liabilities in the
ordinary course of business.
c) Basis of Measurement and Presentation
The financial report is presented in Australian dollars,
which is the Group’s functional currency.
It has been prepared on the basis of historical cost and,
except where stated, does not take into account changing
money values or current valuations of non-current assets.
Notes to the Consolidated Financial Statements (continued)
d) Accounting estimates and judgements
• Centrex QLD Exploration Pty Ltd (previously named
The Group’s estimates and judgements that have a
significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below.
Estimates and assumptions
Income Tax – Note 1(j)
Determination of future taxable profits requires estimates
and assumptions as to future events and circumstances,
in particular, whether successful development and
commercial exploitation, or alternatively sale, of the
respective area of interest will be achieved. At this point
in time the Group has assumed there is insufficient
probability of generating income and as such has not
recognised a deferred tax asset in relation to the Group’s
carried forward tax losses in excess of the value to offset
its deferred tax liabilities.
Exploration, evaluation and development expenditure –
Note 1(k)
Determining the recoverability of exploration, evaluation
and development expenditure capitalised in accordance
with the Group’s accounting policy (refer Note 1(k)),
requires estimates and assumptions as to future events
and circumstances in particular, whether successful
development and commercial exploitation, or
alternatively sale, of the respective areas of interest will
be achieved. Important to this assessment are estimates
and assumptions as to ore resources and reserves, the
timing of expected cash flows, exchange rates,
commodity prices and future capital requirements.
Changes in these estimates and assumptions as new
information about the presence or recoverability of an ore
resource or reserve become available, may impact the
assessment of the recoverable amount of exploration,
evaluation and development expenditure. If, after having
capitalised the expenditure under policy 1(k), a
judgement is made that recovery of the expenditure is
currently not able to be determined, an impairment loss
is recorded in accordance with accounting policy 1(p).
e) Principles of Consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The
consolidated financial statements of the Group include
the financial statements of the Company, being the
parent entity, and its wholly owned subsidiaries, from the
date that control commences until the date control
ceases:
• DSO Development Pty Ltd
• Flinders Pastoral Pty Ltd
• Lachlan Metals Pty Ltd
• Kimba Gap Iron Project Pty Ltd
Port Spencer Holdings Pty Ltd)
• South Australia Iron Ore Group Pty Ltd
• Centrex Phosphate Pty Ltd (previously named Sturt
Pastoral Pty Ltd)
• Centrex Potash Pty Ltd
• Centrex Zinc Pty Ltd
f)
Joint Arrangements
Joint arrangements are those entities over whose
activities the consolidated entity has joint control,
established by contractual agreement.
Jointly controlled operations and assets
The interest of the consolidated entity in jointly
controlled operations and jointly controlled assets are
brought to account by recognising in its financial
statements the assets it controls and the liabilities that it
incurs, and the expenses it incurs and its share of income
that it earns from the sale of goods or services produced
by the joint arrangement. To the extent that the
Company is being “free-carried” in the jointly controlled
assets it will not reflect a share of such expenditure.
The balances and effects of transactions between
controlled entities included in the consolidated financial
statements have been eliminated.
g) Revenue Recognition
Revenue and expenses are brought to account on an
accrual basis.
Interest income - Interest income is recognised as it
accrues and is included in finance income.
Gain or loss on disposal of interest in mineral tenements
The Group recognises a gain or loss on disposal of
interest in mineral tenements as the difference between
the carrying amount of the asset at the time of the
disposal and the proceeds of disposal, less any direct
costs. This income is recognised when the risks and
rewards of ownership have passed to the buyer.
h) Government Grants
Grants that compensate the Group for exploration and
evaluation expenditure incurred are offset against the
exploration and evaluation capitalised asset in the same
period in which the capitalised expenditure is recognised.
i)
(i)
Cash and Cash Equivalents and term deposits
Cash and cash equivalents comprise cash balances
and call deposits which can be readily accessed and
have maturities of 90 days or less.
2020 Annual Report - Page | 31
Notes to the Consolidated Financial Statements (continued)
(ii) Term deposits comprise cash deposits with
maturities of more than 90 days.
entity. The head entity within the tax consolidation group
is Centrex Metals Limited.
j)
Income Tax
k) Exploration, Evaluation and Development
Income tax expense comprises current and deferred tax.
Income tax is recognised in profit or loss except to the
extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet liability
method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation
purposes. The following temporary differences are not
provided for: recognition of assets or liabilities that affect
neither accounting nor taxable profit, and differences
relating to investments in subsidiaries to the extent that
they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates
enacted or substantively enacted at the balance sheet
date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities
and assets, and they relate to taxes levied by the same tax
authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will
be realised simultaneously.
A deferred tax asset is recognised only to the extent that it
is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax
assets are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
Determination of future taxable profits requires estimates
and assumptions as to future events and circumstances,
in particular, whether successful development and
commercial exploitation, or alternatively sale, of the
respective area of interest will be achieved. This includes
estimates and judgements about commodity prices, ore
reserves, exchange rates, future capital requirements,
future operational performance and the timing of
estimated cash flows. Changes in these estimates and
assumptions could impact on the amount and probability
of estimated taxable profits and accordingly the
recoverability of deferred tax assets.
The company and its wholly owned Australian resident
subsidiaries commenced being a tax consolidation group
on 27th January 2005 and are therefore taxed as a single
Page | 32 – 2020 Annual Report
Expenditure
Exploration for and evaluation of mineral resources is the
search for mineral resources after the entity has obtained
legal rights to explore in a specific area, as well as the
determination of the technical feasibility and commercial
viability of extracting the mineral resource. Accordingly,
exploration and evaluation expenditures are those
expenditures incurred by the Group in connection with
the exploration for and evaluation of mineral resources
before the technical feasibility and commercial viability of
extracting mineral resources are demonstrable.
Costs associated with exploration, evaluation and
development expenditure will be accumulated in respect
of each separate ‘area of interest’. An ‘area of interest’ is
an individual geological area which is considered to
constitute a favourable environment for the presence of a
mineral deposit or has been proved to contain such a
deposit.
Expenditure incurred on activities that precede
exploration and evaluation of mineral resources,
including all expenditure incurred prior to securing legal
rights to explore an area, is expensed as incurred. For
each area of interest the expenditure is recognised as an
exploration and evaluation asset where the following
conditions are satisfied:
(a) The rights to tenure of the area are current; and
(b) At least one of the following conditions is also met:
(i) The expenditure is expected to be recouped through
successful development and commercial exploitation of
an area of interest, or alternatively by its sale; or
(ii) Exploration and evaluation activities in the area of
interest have not, at reporting date, reached a stage
which permits a reasonable assessment of the existence
or otherwise of ‘economically recoverable reserves’ and
active and significant operations in, or in relation to, the
area of interest are continuing. Economically
recoverable reserves are the estimated quantity of
product in an area of interest that can be expected to be
profitably extracted, processed and sold under current
and foreseeable conditions.
Exploration and evaluation assets include:
• Acquisition of rights to explore;
• Topographical, geological, geochemical and
geophysical studies;
• Exploratory drilling, trenching, and sampling; and
• Activities in relation to evaluating the technical
feasibility and commercial viability of extracting the
mineral resource.
Notes to the Consolidated Financial Statements (continued)
General and administrative costs are allocated to, and
included in, the cost of exploration and evaluation assets
only to the extent that those costs can be related directly
to the operational activities in the area of interest to
which the exploration and evaluation assets relate. In all
other instances, these costs are expensed as incurred.
During the time in which an area of interest qualifies for
classification as an exploration and evaluation asset; any
proceeds from the sale of material (derived for the
purpose of evaluating its saleability) from that area of
interest are offset against the expenditure incurred for
that area of interest.
Exploration and evaluation assets are classified as
tangible or intangible according to the nature of the
assets. Assets that are classified as tangible include:
piping and pumps; and, vehicles and drilling equipment.
Assets that are intangible include: acquired rights to
explore and exploratory drilling costs.
Exploration and evaluation assets are transferred to
Development Assets once technical feasibility and
commercial viability of an area of interest is
demonstrable. Exploration and evaluation assets are
assessed for impairment, and any impairment loss is
recognised, prior to being reclassified.
Exploration and evaluation assets are assessed for
impairment annually if (i) sufficient data exists to
determine technical feasibility and commercial viability,
and (ii) facts and circumstances suggest that the carrying
amount exceeds the recoverable amount (see
impairment accounting policy). For the purposes of
impairment testing, exploration and evaluation assets are
allocated to cash-generating units to which the
exploration activity relates. The cash generating unit
shall not be larger than the area of interest.
l)
Provisions
A provision is recognised in the consolidated statement of
financial position when the Group has a present legal or
constructive obligation that can be measured reliably as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the
obligation. Provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money
and, where appropriate, the risks specific to the liability.
m)
Provisions for Restoration and Rehabilitation
A provision is recognised for the estimated cost of
rehabilitation, decommissioning and restoration relating
to areas disturbed during the construction of the Ardmore
Trial Mine up to reporting date but not yet rehabilitated.
The provision is based on current cost estimates and has
been determined on a discounted basis. As the provision
represents the discounted value of the present obligation,
using a pre-tax rate that reflects current market
assessments and the risks specific to the liability, the
increase in value of the provision due to the passage of
time will be recognised as a borrowing cost in the profit
and loss statement in future periods. The provision is
recognised as a non-current liability (in line with the
expected timescales for the work to be performed) with a
corresponding asset taken to account and amortised over
the life of the trial mine. At each reporting date the
rehabilitation liability is reviewed and re-measured in line
with changes in discount rates and timing and the
amounts of the costs to be incurred based on the area of
disturbance at reporting date. Changes in the liability
relating to the re-assessment of rehabilitation estimates
are added to or deducted from the related asset.
n) Property, Plant and Equipment
Property, plant and equipment is brought to account at
cost, less where applicable any accumulated
depreciation and impairment losses. The carrying
amount of property, plant and equipment is reviewed
annually by the Directors to ensure it is not in excess of
the recoverable amount of those assets (refer Note 1(p)).
The gain or loss on disposal of fixed assets is determined
as the difference between the carrying amount of the
asset at the time of disposal and the proceeds of disposal,
and is included in operating profit before income tax in
the year of disposal.
The depreciable amount of all fixed assets is depreciated
over their useful lives commencing from the date the
assets are held ready for use.
o) Depreciation
With the exception of exploration, evaluation and
development expenditure, depreciation is charged to
profit or loss on a straight-line basis over the estimated
useful lives of each part of an item of plant and
equipment. Following the re-classification of Exploration
and evaluation assets as development assets, they are
depreciated on a unit of production basis over the life of
the economically recoverable reserves, once production
commences.
Land is not depreciated.
The estimated useful lives of plant and equipment in the
current and comparative periods are as follows:
Motor vehicles
Fixtures and fittings
Other plant and equipment
Buildings
3-5 years
3-5 years
3-5 years
50 years
2020 Annual Report - Page | 33
Notes to the Consolidated Financial Statements (continued)
p)
Impairment
The carrying amounts of the Group’s non-financial assets
are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any such
indication exists, the asset’s recoverable amount is
estimated.
An impairment loss is recognised whenever the carrying
amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are charged to
profit or loss, unless an asset has previously been
revalued, in which case the impairment loss is recognised
as a reversal to the extent of that previous revaluation
with any excess recognised through profit or loss.
Impairment losses recognised in respect of cash-
generating units are allocated first to reduce the carrying
amount of any goodwill allocated to cash-generating
units (group of units) and then, to reduce the carrying
amount of the other assets in the unit (group of units) on
a pro rata basis.
The recoverable amount of other assets is the greater of
their fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of
the time value of money and the risks specific to the
asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the
asset belongs.
Impairment losses are reversed when there is an
indication that the impairment loss may no longer exist
and there has been a change in the estimate used to
determine the recoverable amount. An impairment loss
is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would
have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
q) Goods and Services Tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the
taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset
or as part of the expense.
Receivables and payables are stated with the amount of
GST included. The net amount of GST recoverable from,
or payable to the Australian Taxation Office (ATO), is
included as a current asset or liability in the consolidated
statement of financial position.
Cash flows are presented in the cash flow statement on a
gross basis. The GST component of cash flows arising
from investing and financing activities which are
Page | 34 – 2020 Annual Report
recoverable or payable to the ATO, are disclosed as
operating cash flows.
r)
Payables
Liabilities are recognised for amounts to be paid in the
future for goods or services received. Trade accounts
payable are normally settled within 60 days.
s)
Share capital
Transaction costs of an equity transaction are accounted
for as a deduction from equity, net of any related income
tax benefit.
t)
Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the
related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present
legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the
obligation can be estimated reliably.
Long-term service benefits
The Group’s net obligation in respect of long-term service
benefits, is the amount of future benefit that employees
have earned in return for their service in the current and
prior periods. The obligation is calculated using expected
future increases in wage and salary rates including
related on-costs and expected settlement dates, and is
discounted using the rates attached to the corporate
bonds at the balance sheet date which have maturity
dates approximating to the terms of the Group’s
obligations. Remeasurements are recognised in profit or
loss in the period in which they arise.
Defined contribution superannuation funds
Obligations for contributions to defined contribution
superannuation funds are recognised as an expense in
the profit or loss as incurred.
Wages, salaries, annual leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries, and
annual leave that are expected to be settled within 12
months of the reporting date represent present
obligations resulting from employees’ services provided
to reporting date and are calculated at undiscounted
amounts based on remuneration wage and salary rates
that the Group expects to pay as at the reporting date
including related on-costs, such as workers
compensation insurance and payroll tax. Non-
accumulating non-monetary benefits, such as housing
and cars, are expensed based on the net marginal cost to
the Group as the benefits are taken by the employees.
Notes to the Consolidated Financial Statements (continued)
Termination benefits
w) Earnings per share
Termination benefits are recognised as an expense when
the Group is demonstrably committed, without realistic
probability of withdrawal, to a formal detailed plan to
either terminate employment before the normal
retirement date, or to provide termination benefits as a
result of an offer made to encourage voluntary
redundancy. Termination benefits for voluntary
redundancies are recognised as an expense if the Group
has made an offer of voluntary redundancy, it is probable
that the offer will be accepted, and the number of
acceptances can be estimated reliably.
The Group presents basic and diluted earnings per share
(EPS) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to ordinary
shares of the Company by the weighted average number
of ordinary shares outstanding during the period. Diluted
EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the
effects of all dilutive potential ordinary shares, which
comprise any convertible notes, share options, and rights
granted to employees.
u) Share and option compensation
x) New standards and interpretations
Where shares or share options are issued to employees or
directors as remuneration for past services, the fair value
of options granted is recognised as an employee expense
with a corresponding increase in equity. The fair value is
measured at grant date and recognised over the period
during which the employees become unconditionally
entitled to the options. Unless otherwise stated, the fair
value of the options granted is measured using an option-
pricing model, taking into account the terms and
conditions upon which the options were granted. The
amount recognised as an expense is adjusted to reflect
the actual number of share options that vest except for
those that fail to vest due to market conditions or vesting
conditions not being met.
The fair value of the employee share options and rights is
measured using the Black-Scholes formula.
Measurement inputs include the share price on
measurement date, the exercise price of the instrument,
expected volatility based on the Company’s historic
volatility, particularly over the period commensurate with
the expected term and the risk free interest rate. Service
and non-market performance conditions attached to the
transactions are not taken into account in determining
fair value.
v) Segmental reporting
The Group determines and presents operating segments
based on the information that internally is provided to
the Board, collectively the Group’s chief operating
decision makers.
The Board receives information internally based on the
geographical location of the Group’s assets. It has been
determined that as all of the assets are in one country
(Australia) and operations relate predominantly to mining
exploration, it is appropriate to have one operating
segment.
A number of new standards are effective for annual
periods beginning after 1 July 2020 and earlier
application is permitted. However, the Company has not
early adopted the new or amended standards in
preparing these consolidated financial statements and
they are not expected to have a material effect on the
Company’s financial statements.
y)
Impact of COVID-19 pandemic
The full impact of the COVID-19 pandemic continues to
evolve at the date of this report. Management is actively
monitoring the global situation and its impact on the
Group's financial condition, liquidity, operations,
suppliers and industry. Given the daily evolution of the
COVID-19 outbreak and the scale and potential duration
of the pandemic and its market consequences, the Board
has considered it prudent to protect its valuable staff and
assets by taking action to preserve cash to enable the
Company to be able to act strongly and quickly once the
Company raises sufficient finance for its projects. The
ability to raise finance to progress the Company’s projects
has been severely hampered by the COVID-19 situation.
As a result, substantive works for each project are
planned only on the basis of raising additional funding.
2020 Annual Report - Page | 35
Notes to the Consolidated Financial Statements (continued)
2. PROFIT FROM CONTINUING OPERATIONS
Finance Income
Interest income on bank accounts including term deposits
Other income
Gain on asset disposals
Cash flow boost
Other
Employee Benefit Expenses
Wages and salaries
Contributions to defined contribution superannuation funds
Employee liability movements
Equity settled share-based payment transactions
Other employee costs
3. AUDITOR’S REMUNERATION
Audit Services
Other services – employment advice
Other services – tenement expenditure audit
Other services – taxation advice
Auditors of the company - KPMG
2020
$’000
2019
$’000
50
50
9
50
-
59
214
94
76
108
58
550
235
235
-
-
43
43
412
150
151
145
162
1,020
2020
$
46,575
6,663
4,658
-
57,896
2019
$
56,407
-
-
28,541
84,948
Page | 36 – 2020 Annual Report
Notes to the Consolidated Financial Statements (continued)
4. TAXATION
The consolidated entity is not recognising a deferred tax asset to the extent that it exceeds the total of deferred tax
liabilities. Details of the current and deferred income tax expense is shown below:
2020
$’000
2019
$’000
Current income tax expense / (benefit)
Current period
Total income tax expense / (benefit)
Deferred Tax assets (DTA) and Deferred Tax liabilities (DTL)
Property, plant and equipment
Provisions and accrued expenses
Exploration and evaluation assets
Interest receivable
Net DTL
Tax losses recognised to the extent of the DTL
Reconciliation of effective tax rate
Loss for the year
Total income tax benefit
Loss excluding income tax
Prima facie income tax benefit calculated at 27.5% (2019: 27.5%)
Non-deductible expenses
Tax losses not recognised
Total income tax benefit
Unrecognised tax losses at 27.5% (2019: 27.5%)
-
-
(30)
69
(1,237)
-
(1,198)
1,198
(19,821)
-
(19,821)
(5,451)
31
5,420
-
8,110
-
-
(7)
99
(4,674)
(4)
(4,586)
4,586
(1,384)
-
(1,384)
(381)
41
340
-
2,674
2020 Annual Report - Page | 37
Notes to the Consolidated Financial Statements (continued)
5. EARNINGS PER SHARE
Basic earnings per share
The calculation of basic earnings per share at 30th June 2020 was based on the loss attributable to ordinary
shareholders of $19.821 million (2019: loss of $1.384 million) and a weighted average number of ordinary shares
outstanding during the financial year ended 30th June 2020 of 315,685,357 (2019: 315,656,754).
Loss attributable to ordinary shareholders
Loss for the period
Loss attributable to ordinary shareholders
2020
$’000
2019
$’000
(19,821)
(1,384)
(19,821)
Number of Shares
(1,384)
Number of Shares
Weighted average number of ordinary shares
Issued ordinary shares at beginning of year
Weighted average number of ordinary shares at year end
Earnings per share for continuing and discontinued operations
Basic earnings / (loss) – cents per share
Diluted earnings / (loss) – cents per share
315,685,357
315,685,357
315,505,357
315,656,754
(6.28)
(6.28)
(0.44)
(0.44)
Options or rights on issue are considered to be potential shares and are therefore excluded from the weighted
average number of ordinary shares used in the calculation of basic earnings per share. The dilutive earnings per
share at 30 June 2020 is the same as basic earnings per share. In accordance with AASB 133 Earnings per share, as
the potential ordinary shares would result in a decrease in the earnings per share, no dilutive effect has been taken
into account. For the year ended 30th June 2020 the weighted average number of ordinary shares outstanding during
the financial year after adjustment for the effects of all dilutive potential ordinary shares was 315,685,357 (2019:
315,656,754).
6. EXPLORATION AND EVALUATION EXPENDITURE
Tenements
The exploration and evaluation expenditure assets comprise of exploration expenditure incurred since acquiring the
exploration licenses. The expenditure is capitalised on a tenement by tenement (“area of interest”) basis.
The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the successful
development and commercial exploitation or sale of the respective area of interest. The Company has assessed the
exploration and evaluation assets for impairment and has decided to include an impairment loss for the period
ending 30 June 2020 of $13.2m. The impairment loss is in addition to $5,252 thousand of exploration and evaluation
assets written off that related to tenements relinquished. The total exploration and evaluation assets written off
during the year was $18,466 thousand.
Restated*
Cumulative
Expenditure to
30th Jun 19
Expenditure
12 months to
30th Jun 20
Tenements
relinquished
to 30th Jun 20
Tenements
impaired to
30th Jun 20
Cumulative
Expenditure to
30th Jun 20
$’000
$’000
$’000
$’000
$’000
19,113
16
2,083
6,575
27,787
1,176
5
53
119
1,353
-
(7)
-
(5,245)
(5,252)
(9,629)
10,660
-
(2,136)
(1,449)
(13,214)
14
-
-
10,674
Ardmore Phosphate
Northern Territory Phosphate
Goulburn Zinc
Oxley Potassium Nitrate
Total
* The company has changed the classification of the trial plant from Plant and Equipment to tangible E&E expenditure as it mo re clearly
represents the direct and integral nature of this modular plant to the Ardmore project.
Page | 38 – 2020 Annual Report
Notes to the Consolidated Financial Statements (continued)
The impact of this reclassification for the 30th June 2019 comparative balance sheet was to move $4,162 thousand of
Plant and Equipment directly related to the trial plant to tangible E&E assets. In addition, in the statement of cash
flows for the 12 months ending 30 June 2019, $4,063 thousand was reclassified from acquisition of plant and
equipment to expenditure on mining tenements.
Impairment
The ability to raise finance to progress the Company’s projects has been severely hampered by the COVID-19
situation. As a result, substantive works for each project are planned only on the basis of raising additional funding.
For both the Goulburn Zinc and Oxley Potassium Nitrate exploration and evaluation assets, whilst investigative works
continue, unless sufficient funds are raised there are no substantive works planned nor budgeted for these
tenements. On this basis, the Company has chosen to impair these assets to $0 for the year ended 30 June 2020 on a
fair value less cost to sell basis.
In relation to the Ardmore Phosphate exploration and evaluation asset an assessment was undertaken to estimate
the recoverable amount on a fair value less costs of disposal basis. The fair value relies on level 3 inputs, utilising a
market valuation approach based on the best information available to estimate an amount that could be obtained
by reference to recent transactions involving similar assets within the same industry. A mid-range valuation of P2O5
per tonne was established and applied to the total measured and indicated resource. After allowance for a royalty
applicable to Ardmore, the cost of tangible plant & equipment and costs to sell, a fair value of $10.660 million was
determined.
Cumulative Capitalised Expenditure to 30th June 2020
Ardmore Phosphate 1
Northern Territory Phosphate
Cumulative capitalised expenditure 30 Jun 2020
Tangible
$’000
Intangible
$’000
4,074
-
4,074
6,586
14
6,600
Total
$’000
10,660
14
10,674
1. Total cumulative capitalised expenditure includes an asset retirement cost of $0.15 million
Cumulative Capitalised Expenditure to 30th June 2019
Ardmore Phosphate
Northern Territory Phosphate
Goulburn Zinc
Oxley Potassium Nitrate
Tangible
$’000
4,162
-
-
-
Cumulative capitalised expenditure 30 Jun 2019
4,162
Intangible
$’000
Total
$’000
14,951
16
2,083
6,575
23,625
19,113
16
2,083
6,575
27,787
2020 Annual Report - Page | 39
Notes to the Consolidated Financial Statements (continued)
7. LAND AND BUILDINGS, PLANT AND EQUIPMENT
Land and buildings
At cost
Add prior period impairment reversal
Less accumulated depreciation
Less disposals
Total land and buildings
Plant and Equipment
At cost
Less accumulated depreciation
Total plant and equipment
Movements in carrying amounts
2020
$’000
Restated
2019
$’000
14
-
(14)
-
-
420
(408)
12
628
724
(2)
(1,350)
-
420
(397)
23
Restated Opening carrying amount 1 Jul 2019 (1)
Additions
Disposals
Accumulated depreciation reversal
Depreciation
Closing carrying amount 30 Jun 2020
Plant & Equipment
Restated Total
$’000
$’000
23
3
(2)
2
(14)
12
23
3
(2)
2
(14)
12
(1) The opening balances have been restated to show the effect of Plant & Equipment reclassification as detailed
in Note 6.
8. FINANCIAL GUARANTEES
Deposits held as security
Deposits held as security
Guarantee facility
Guarantee facility – available
Guarantee facility – undrawn
Guarantee facility – drawn
2020
$’000
2019
$’000
323
350
(27)
323
350
350
-
350
The Company has a cash-backed bank guarantee facility in place up to a value of $350 thousand. At 30 June the
facility was drawn to $323 thousand. The amounts drawn under the facility relate to ML5542 (QLD).
Page | 40 – 2020 Annual Report
Notes to the Consolidated Financial Statements (continued)
9. CAPITAL AND RESERVES
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at shareholder meetings. In the event of winding up of the Company, ordinary shareholders rank after
creditors and are fully entitled to any proceeds of liquidation.
The Company does not have authorised capital or par value in respect of its issued shares.
Issued ordinary shares
Issued ordinary shares at the beginning of the period
Ordinary shares issued during the period
Issued ordinary shares at the end of the period
2020
2019
315,685,357
-
315,685,357
315,505,357
180,000
315,685,357
10. OPTIONS AND RIGHTS
Options
There were no options outstanding at either 30th June 2020 or 30th June 2019.
Rights
The following share rights were outstanding as at 30th June 2020:
2017 Performance
Rights
2019 Performance
Rights
2019 Performance
Rights
2019
Retention Rights
As at 30th June 2020
Expiry date
Vesting date
Share Price Required to Vest:
22/10/2019
22/09/2019
$0.15
26/09/2020
26/08/2020
$0.17
02/05/2021
02/04/2021
$0.17
02/05/2021
02/04/2021
$0.00
Rights on issue at start of year
2,685,906
1,590,000
750,000
750,000
Rights issued during the year
Rights exercised during the
year
-
-
-
-
-
-
-
-
Rights cancelled or lapsed
(2,685,906)
Rights on issue at end of year
-
(280,000)
1,310,0001
(750,000)
-
(750,000)
-
1. 1,310,000 performance rights expired subsequent to reporting date.
2020 Annual Report - Page | 41
Notes to the Consolidated Financial Statements (continued)
The following share rights were outstanding as at 30th June 2019:
Expiry date
Vesting date
Share Price Required to
Vest:
Rights on issue at start of
year
Rights issued during the
year
Rights exercised during the
year
2017 Retention
Rights
2017
Performance
Rights
As at 30th June 2019
2019
2019
Performance
Sign-on
Rights
Rights
2019
Performance
Rights
2019
Retention
Rights
22/10/2019
22/10/2019
27/08/2018
26/09/2020
02/05/2021
02/05/2021
22/09/2017
22/09/2017
27/08/2018
26/08/2020
02/04/2021
02/04/2021
$0.00
$0.15
$0.00
$0.17
$0.17
$0.00
357,143
3,805,034
-
-
-
-
-
-
-
-
180,0001
2,247,0701
750,0002
750,0002
(180,000)
-
(657,070)
-
-
-
-
1,590,000
750,000
750,000
Rights cancelled or lapsed
(357,143)
(1,119,128)
Rights on issue at end of
year
-
2,685,906
-
-
11.
FINANCIAL INSTRUMENTS AND RISK EXPOSURES
(a) Financial risk management objectives
The Group does not enter into or trade financial instruments, for speculative purposes. As at 30th June 2020 the
Group has no exposure to exchange rate risk and has no derivative exposures to commodity prices.
(b)
Interest rate risk exposure
The Group has exposure to future interest rates on investments in fixed and variable-rate deposits. As at 30th
June 2020 the Group had $2.137 million invested in such deposits (2019: $5.633 million). The Group does not
use derivatives to mitigate these exposures.
Sensitivity Analysis
The Group does not account for any financial assets and liabilities at fair value through profit and loss and does
not use interest rate derivatives. For the year ending 30th June 2020, a 1 percent increase in the effective interest
rate would have resulted in an increase in profit of $0.032 million (2019: $0.093 million).
(c) Credit risk exposures
The Group has no significant concentrations of credit risk. As at 30th June 2020 the Group had receivables of
$0.048 million (2019: $0.069 million).
The Group does not have significant credit exposure to outstanding receivables or investments due to the
present nature of its operations. There have been no historical impairment losses.
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or
less.
(d) Capital management
The Board seeks to maintain a strong capital base sufficient to maintain the future development of the Group’s
business. The Board closely monitors the Group’s level of capital so as to ensure it is appropriate for the
Group’s planned level of activities. There were no changes to the Group’s approach to capital management
during the year. Neither the Company nor its wholly owned subsidiaries are exposed to any externally imposed
capital requirements.
Page | 42 – 2020 Annual Report
Notes to the Consolidated Financial Statements (continued)
(e) Liquidity Risk Management
The Group manages liquidity risk by maintaining adequate cash reserves and by continuously monitoring
forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The
following are both the expected payments and contractual maturities, including estimated interest payments:
Carrying amount – trade and other payables
Contractual cash flows
12 months or less
(f) Net fair values of financial assets and liabilities
2020
$’000
72
(72)
(72)
2019
$’000
850
(850)
(850)
Net fair values of financial assets and liabilities not readily traded in an organised financial market are
determined by valuing them at the present value of contractual future cash flows on amounts due from
customers (reduced for expected credit losses) or due to suppliers. Cash flows are discounted using standard
valuation techniques at the applicable market yield having regard to the timing of the cash flows. The carrying
amounts of bank term deposits, trade debtors, other debtors and accounts payable approximate net fair value.
The financial assets and financial liabilities included in assets and liabilities approximate their net fair values.
Cash assets are readily traded on organised markets in a standardised form. All other financial assets and
liabilities are not readily traded on organised markets in a standardised form.
12.
LEASES
Operating lease rentals are payable/receivable as follows:
Payable to third parties
Less than one year
Between one and five years
More than five years
Expensed during the year
2020
$’000
2019
$’000
-
-
-
57
92
-
-
76
Operating lease rentals relate to corporate and site offices and accommodation. At the end of the reporting period,
the Company had an operating lease relating to its Corporate office. The lease terminated at the end of February
2020. From March 2020, the lease reverted to a rolling monthly arrangement which may be terminated by either
the Company or the lessor by giving 30 days’ notice. The lease amount payable per month is $2.5 thousand.
13. RELATED PARTIES
The key management personnel compensation is as follows:
Short-term employee benefits
Other long-term benefits
Termination benefits
Executive share options benefits
Employee benefits
2020
$’000
2019
$’000
1,038
55
58
108
1,259
1,665
(22)
-
145
1,788
2020 Annual Report - Page | 43
Notes to the Consolidated Financial Statements (continued)
Individual director and executive compensation disclosures
Information regarding key management personnel compensation is provided in the Remuneration Report in section
5 of the Directors’ Report.
No director has entered into a material contract with the company since the end of the previous financial year and
there were no material contracts involving Directors’ interests existing at year-end.
Key Management Personnel Holding of Shares:
The movement during the reporting period in the number of ordinary shares in Centrex Metals Limited held, directly,
indirectly or beneficially, by each key management person, including their related parties, is as follows:
Opening
Balance
Number
Purchased
Issued on
Vesting
Ceased as
KMP
Number
Sold
Closing
Balance
Dapop Pty Ltd
Dr A J Parker
Mr Peter Cox
Patna Properties Pty Ltd
Mr Kiat Poh
(ii)
(iii)
Candle Grove Pty Ltd
(iv)
Mr Chris Indermaur
(v)
Mr Alastair Watts
Mr Gerard Bosch
Mr Simon Slesarewich (vi)
Mr Mark Terry
(vii)
Mr Steve Klose
(viii)
Mr Ben Hammond
(ix)
Mr Gavin Bosch
(x)
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
110,905,672
110,905,672
-
-
-
-
2,042,810
2,042,810
2,618,880
2,618,880
866,155
866,155
-
-
487,711
487,711
-
-
-
-
180,000
-
-
-
N/A
481,316
N/A
1,150,526
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
180,000
-
-
-
-
-
-
-
-
-
-
-
-
(2,042,810)
-
(2,618,880)
-
(866,155)
-
-
-
-
-
-
-
-
-
(180,000)
-
-
-
(481,316)
-
(1,150,526)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
487,711
-
-
-
-
-
-
-
-
-
-
-
-
-
110,905,672
110,905,672
-
-
-
-
N/A
2,042,810
N/A
2,618,880
N/A
866,155
N/A
-
-
487,711
-
-
N/A
-
N/A
180,000
N/A
-
N/A
N/A
N/A
N/A
Dapop Pty Ltd is an entity associated with Mr Graham Chrisp, Mr Jason Chrisp and Mr Ben Chrisp.
Patna Properties Pty Ltd is a company associated with Mr David Klingberg AO who retired effective 17 December 2019.
Candle Grove Pty Ltd is a company associated with Mr Jim Hazel who retired 20 September 2019.
Mr Chris Indermaur resigned effective 28th January 2020.
(i)
(ii)
(iii) Mr Kiat Poh resigned effective 7 November 2019.
(iv)
(v)
(vi) Mr Simon Slesarewich ceased employment with the Company effective 26 February 2020.
(vii) Mr Mark Terry ceased employment with the Company effective 10 December 2019.
(viii) Mr Steve Klose resigned from the Company effective 17 January 2020.
(ix) Mr Ben Hammond resigned from the Company effective 30 April 2019.
(x)
Mr Gavin Bosch resigned from the Company effective 30 September 2018.
Page | 44 – 2020 Annual Report
Notes to the Consolidated Financial Statements (continued)
Key Management Personnel Holding of Options & Rights:
The movement during the reporting period in the number of options and rights over ordinary shares in the
Company held, directly, indirectly or beneficially, by each key management person, including their related parties,
is as follows:
30th June 2020
Holding at 30th
Jun 19
Issued
Exercised (E) or
Lapsed (L)
Holding at 30th
Jun 20
2017 Performance Rights
Expiring: 22/10/19; Share hurdle:
$0.15
Mr Alastair Watts
Mr Steve Klose
Mr Gerard Bosch
2019 Performance Rights
Expiring: 26/09/20; Share hurdle: $0.17
Mr Mark Terry *
Mr Alastair Watts
Mr Steve Klose
Mr Gerard Bosch
Expiring: 02/05/21; Share hurdle:
$0.17
Mr Simon Slesarewich
2019 Retention Rights
Expiring: 02/05/21; Share hurdle:
$0.00
Mr Simon Slesarewich
Total
895,302
895,302
895,302
750,000
280,000
280,000
280,000
750,000
750,000
5,775,906
-
-
-
-
-
-
-
-
-
-
(895,302) L
(895,302) L
(895,302) L
-
-
(280,000) L
-
-
-
750,000
280,000
-
-
280,000
(750,000) L
(750,000) L
(4,465,906)
-
-
1,310,000
*
Mr Terry was made redundant during the period and under the terms upon which the 2019 performance rights were issued, the rights did
not lapse upon termination of employment.
30th June 2019
Holding at 30th
Jun 18
Issued
Exercised (E) or
Lapsed (L)
Holding at 30th
Jun 19
2017 Retention Rights
Expiring: 22/10/19; Share hurdle:
Mr Ben Hammond1
$0.00
2017 Performance Rights
Expiring: 22/10/19; Share hurdle:
$0.15
Mr Ben Hammond
Mr Alastair Watts
Mr Steve Klose
Mr Gerard Bosch
2019 Sign-On Rights
Expiring: 27/08/18; Share hurdle:
$0.00
Mr Mark Terry
2019 Performance Rights
Expiring: 26/09/20; Share hurdle:
Mr Ben Hammond1
$0.17
Mr Mark Terry
Mr Alastair Watts
Mr Steve Klose
357,143
1,119,128
895,302
895,302
895,302
-
-
-
-
-
(357,143) L
(1,119,128) L
-
-
-
-
-
-
-
-
180,000
(180,000) E
657,070
750,000
280,000
280,000
(657,070) L
-
-
-
-
-
895,302
895,302
895,302
-
-
750,000
280,000
280,000
2020 Annual Report - Page | 45
Notes to the Consolidated Financial Statements (continued)
Mr Gerard Bosch
Expiring: 02/05/21; Share hurdle:
$0.17
Mr Simon Slesarewich
2019 Retention Rights
Expiring: 02/05/21; Share hurdle:
$0.00
Mr Simon Slesarewich
Total
-
-
-
4,162,177
280,000
750,000
750,000
3,927,070
-
-
-
(2,313,341)
280,000
750,000
750,000
5,775,906
No other options or rights were granted to key personnel during the reporting period as compensation.
14. CONTINGENT ASSETS
On 22nd March 2018 the Group executed agreements to sell the Wilgerup iron ore project and Kimba Gap iron ore
project to SIMEC Mining (formerly Arrium Mining) which is a business of OneSteel Manufacturing Pty Ltd (“OMPL”).
OMPL will pay royalty streams to Centrex upon commencement of mining at each project. The royalties are capped
to a value of A$ 5 million for each project. The per tonne royalty rates and the royalty caps are both indexed annually
to CPI (from 2018). If OMPL has not committed to mining either of the projects by the 10th anniversary of the
executed agreement the relevant project will be returned at Centrex’s election.
15. COMMITMENTS AND CONTINGENT LIABILITIES
Minimum exploration tenement expenditures
In order to maintain its right of renewal of tenements (reviewed on a regular basis), the Group is required to meet
exploration expenditures as defined at the time of the granting of the tenements. The tenement commitments are
listed in detail in Section 10 of the Directors’ Report. A summary of these commitments is as follows:
Ardmore (QLD) - Phosphate
Tenements with annual commitments
Goulburn (NSW) – Zinc
Tenements with annual commitments
Oxley (WA) – Potassium Nitrate
Tenements with annual commitments
2020
$’000
2019
$’000
105
675*
142
247
645*
469
*
The annual commitments for the New South Wales tenements are an estimate of the work program to which
the Group has committed to undertake over the term of the licence.
Other commitments
At 30th June 2020 the Group had no other commitments (2019: 0.061 million relating to construction of the Ardmore
Phosphate Rock processing facility for the start-up phase of the project) payable within one year.
Contingent Liability
On 2nd February 2017 the Group executed agreements to purchase the Ardmore phosphate rock project from
Southern Cross Fertilisers Pty Ltd (“SCF”), a wholly owned subsidiary of Incitec Pivot Limited. Under the terms of the
agreements SCF retain an interest in the project via a 3% gross revenue royalty secured by a registered mortgage
over the mining lease (ML 5542). The first ranking security over ML 5542 also secures other monetary and non-
monetary obligations associated with the agreements including:
• SCF is entitled to receive 50% of the residual profit of a sale of in excess of a 70% interest in ML 5542 if the
transaction takes place within four years from completion (27th June 2017). In such case SCF will forego its 3%
gross revenue royalty.
Page | 46 – 2020 Annual Report
Notes to the Consolidated Financial Statements (continued)
• The Group must pay to SCF a $2 million annual agreement extension fee at the beginning of each year from 27th
June 2021 if it has not commenced Mining as defined in the agreements.
• SCF have the right to require ML 5542 be returned to them under certain Breach Events as defined in the
transaction agreements with consideration payable to the Group being the lesser of tenement costs incurred by
the Group, including acquisition costs, and market value.
16. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of Cash
For the purpose of the Consolidated Statement of Cash Flows, cash includes cash on hand and at bank, net of
outstanding bank overdrafts. Cash at the end of the financial year, as shown in the Consolidated Statement of
Cash Flows, is reconciled to the related items in the Consolidated Statement of Financial Position as follows:
NOTE
2020
$’000
2019
$’000
Cash and cash equivalents
437
1,268
(b) Reconciliation of cash flows from operating activities
Loss after income tax
Interest income
Depreciation
Reversal of previous year land impairment
Share options valuation
Exploration expenditure written off and other JV asset impairments
Profit on disposal of plant and equipment
Other
(Increase) in debtors
Increase / (decrease) in provisions
(Increase) / decrease in tax refund
Increase / (decrease) in payables
Net cash used in operating activities
2020
$’000
2019
$’000
(19,821)
(1,384)
(50)
14
-
108
18,466
(9)
1
(48)
(119)
-
(805)
(2,263)
(235)
20
(724)
145
-
-
(42)
(45)
-
116
91
(2,058)
17. PARTICULARS IN RELATION TO CONTROLLED ENTITIES
The Company holds 100% interest in the following controlled subsidiaries:
•
•
South Australian Iron Ore Group Pty Ltd;
• DSO Development Pty Ltd;
Flinders Pastoral Pty Ltd;
•
Lachlan Metals Pty Ltd;
• Centrex Phosphate Pty Ltd (previously named
• Kimba Gap Iron Project Pty Ltd;
Sturt Pastoral Pty Ltd);
• Centrex QLD Exploration Pty Ltd (previously
named Port Spencer Holdings Pty Ltd);
• Centrex Potash Pty Ltd; and
• Centrex Zinc Pty Ltd.
2020 Annual Report - Page | 47
Notes to the Consolidated Financial Statements (continued)
18. SEGMENT REPORTING
The Group operates in one business segment; mineral exploration and one geographical segment; Australia.
19. PARENT ENTITY DISCLOSURES
As at, and throughout the year the parent company of the Group was Centrex Metals Limited.
Result of the parent entity
Profit / (Loss) for the period
Other comprehensive income
Total comprehensive income / (loss) for the period
Financial position of the parent entity
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Equity of the parent entity
Contributed equity
Share options issues
Accumulated losses
Total equity
Company
2020
$’000
2019
$’000
(1,355)
-
(1,355)
2,324
2,336
301
312
2,024
41,351
2,647
(41,974)
2,024
(1,428)
-
(1,428)
5,768
13,395
1,148
1,167
12,228
41,351
2,540
(31,663)
12,228
Commitments and contingent liabilities of the parent entity
The commitments and contingent liabilities of the parent entity are the same as those identified at note 15.
20. EVENTS SUBSEQUENT TO BALANCE DATE
There were no material events that occurred subsequent to the end of the financial year.
Page | 48 – 2020 Annual Report
Notes to the Consolidated Financial Statements (continued)
Directors’ Declaration
In the opinion of the Directors of Centrex Metals Limited (‘the Company’):
1
(a)
the consolidated financial statements and notes set out on pages 26 to 48, and the Remuneration report
in the Directors' Report, are in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30th June 2020 and of its
performance, for the financial year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The Directors have been given the declarations by the Executive Chairman for the financial year ended 30th June
2020 pursuant to Section 295A of the Corporations Act 2001.
The Directors draw attention to Note 1(a) of the financial statements, which includes a statement of compliance
with International Financial Reporting Standards.
2
3
Signed in accordance with a Resolution of the Board of Directors:
Mr Graham Chrisp
Dated at Adelaide this 30th day of September 2020
2020 Annual Report - Page | 49
KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the Shareholders of Centrex Metals Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Centrex Metals Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2020; • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Notes including a summary of significant accounting policies; and • Directors’ Declaration. The Group consists of the Centrex Metals Limited (the Company) and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Page | 50 – 2020 Annual Report Material uncertainty related to going concern We draw your attention to Note 1 (b), Going Concern in the financial report. The conditions disclosed in Note 1 (b) indicate a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report. Our opinion is not modified in respect of this mater. In concluding there is a material uncertainty related to going concern we evaluated the extent of uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going concern. Our approach to this involved: • Evaluating the feasibility, quantum and timing of the Group’s plans to raise additional shareholder funds to address going concern; • Assessing the Group’s cash flow forecasts for incorporation of the Group’s operations and plans to address going concern, in particular in light of the requirement to commence the commercial extraction of minerals in relation to the Ardmore Phosphate project; and • Determining the completeness of the Group’s going concern disclosures for the principle matters casting significant doubt on the Group’s ability to continue as a going concern, the Group’s plans to address these matters and the material uncertainty. Key Audit Matters Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matter described below to be the Key Audit Matter. 2020 Annual Report - Page | 51 Exploration and evaluation expenditure asset – $10.674 million Refer to Note 6 to the financial report The key audit matter How the matter was addressed in our audit A key audit matter for us was the carrying value of the Group’s exploration and evaluation expenditure, given the size of the balance (being 82% of total assets). In addition to the above: • The Group recorded an impairment charge of $13.214 million against capitalised exploration and evaluation expenditure recorded for Ardmore Phosphate, Goulburn Zinc and Oxley Potassium Nitrate projects and an additional $5.252 million exploration and evaluation expenditure was written-off against tenements surrendered during the year ended 30 June 2020. • The carrying amount of the net assets of the Group, post impairment, exceeded the Group’s market capitalisation at year end, increasing the possibility of further exploration and evaluation expenditure being impaired. This further increased our audit effort in this key audit area. We focussed on the comparability of transactions utilised by the Group to estimate fair value less costs of disposal of the Ardmore Phosphate project. Using comparable transactions to estimate fair value less costs of disposal tends to be prone to greater risk for potential bias, error and inconsistent application due to the difficulty in identifying projects and transactions which are directly comparable. These conditions necessitated additional scrutiny by us. We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter. Our procedures included: • We, along with our valuation specialists, considered the appropriateness of the fair value less costs of disposal method applied by the Group to perform the impairment assessment against the requirements of the accounting standards. • We compared the characteristics of the Ardmore Phosphate project to the projects and transactions utilised by the Group in estimating the fair value less costs of disposal. • We checked the consistency of the fair value less costs of disposal assessment against the Group’s stated plans and strategy and our experience regarding the feasibility of these in the industry and economic environment in which they operate. • We recalculated the impairment charge against the recorded amount disclosed. • We, along with our valuation specialists, assessed the Group’s reconciliation of the difference between the year-end market capitalisation and the carrying amount of the net assets by comparing to accepted market control premiums. • We assessed the competence and objectivity of the internal expert engaged to assess the fair value less costs of disposal for the Ardmore project. • We assessed the disclosures in the financial report using our understanding of the issue obtained from our testing and against the requirements of the accounting standards. Other Information Other Information is financial and non-financial information in Centrex Metals Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Page | 52 – 2020 Annual Report Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and • assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing an Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Centrex Metals Limited for the year ended 30 June 2020, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 15 to 19 of the Directors’ report for the year ended 30 June 2020. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Paul Cenko Partner Adelaide 30 September 2020 2020 Annual Report - Page | 53 ASX Additional Information (unaudited)
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report is set out below.
Substantial Shareholders of Ordinary and Escrow shares
Rank
Name
27th September 2020
Units
% of Issued
Capital
1
2
3
4
5
DAPOP PTY LTD
110,905,672
35.13%
WISCO INTERNATIONAL RESOURCES DEVELOPMENT &
INVESTMENT LIMITED
BAOTOU IRON & STEEL (GROUP) COMPANY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MISS LAY HONG GOH
40,399,599
12.80%
21,900,000
14,685,245
10,845,101
6.94%
4.65%
3.44%
Distribution of equity holders
Name
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
27th September 2020
Fully paid
ordinary and
escrow shares
Employee
options / rights
plan
72
112
321
508
158
1,171
-
-
-
-
-
-
At 27 September 2020 there were 1,171 holders of a total of 315,685,357 fully paid ordinary shares and there were 608
shareholders holding less than a marketable parcel.
The issued capital of the Company is fully paid ordinary shares (entitling the holders to participate in dividends and
the proceeds on winding up of the Company in proportion to the number of shares held). On a show of hands every
holder of the shares present at a meeting in person or by proxy is entitled to one vote and upon poll each share
counts as one vote.
Page | 54 – 2020 Annual Report
Notes to the Consolidated Financial Statements (continued)
Top 20 Holders of Ordinary and Escrow shares
Rank
Name
27th September 2020
Units
% of Issued
Capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
DAPOP PTY LTD
110,905,672
35.13%
WISCO INTERNATIONAL RESOURCES DEVELOPMENT & INVESTMENT
LIMITED
40,399,599
12.80%
BAOTOU IRON & STEEL (GROUP) COMPANY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MISS LAY HONG GOH
MR MELVIN BOON KHER POH
KNT INTERNATIONAL CO LTD
GERARD ANDERSON SUPER PTY LTD
MR EWE GHEE LIM & MISS CHARLENE YULING LIM
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
MR DIETER URMERSBACH & MRS ROSMARIE URMERSBACH
MR KIAT POH & MISS JU-LYNN POH
AMALGAMATED DAIRIES LIMITED
MR YAM POEY CHEW
MR DIETER URMERSBACH & MRS ROSMARIE URMERSBACH
JP MORGAN NOMINEES AUSTRALIA PTY LIMITED
MR KA FAI MARTIN WONG
PATNA PROPERTIES P/L
MR PETER HOWELLS
21,900,000
14,685,245
10,845,101
5,782,404
5,535,000
3,990,000
3,750,000
3,573,826
3,319,258
2,668,270
2,618,880
2,617,327
2,500,000
2,276,676
2,150,028
2,126,455
2,042,810
2,000,000
6.94%
4.65%
3.44%
1.83%
1.75%
1.26%
1.19%
1.13%
1.05%
0.85%
0.83%
0.83%
0.79%
0.72%
0.68%
0.67%
0.65%
0.63%
245,686,551
77.82%
2020 Annual Report - Page | 55
Company Directory
Company Secretaries
Australian Securities Exchange
Dr John Santich, appointed 31st March 2020
The Company listed on the Australian Securities
Exchange on 17 July 2006. The Home exchange is
Adelaide.
ASX Codes
Shares: CXM
Auditors
KPMG
Chartered Accountants
151 Pirie Street
Adelaide SA 5000
Principal Registered Office
Centrex Metals Limited
Level 6, 44 Waymouth Street
Adelaide SA 5000
08 8213 3100
08 8231 4014
www.centrexmetals.com.au
Locations of Share Registries
Boardroom Pty Limited
Level 7, 207 Kent Street
Sydney NSW 2000
GPO Box 3993
Sydney NSW 2001
Telephone:
(02) 9290 9600
Fax:
Email:
Web:
(02) 9279 0664
enquiries@boardroomlimited.com.au
www.boardroomlimited.com.au
Page | 56 – 2020 Annual Report
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