ANNUAL REPORT
2022
Contents
Executive Chairman’s Report
Managing Director’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 Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information & Corporate Directory
3
5
7
11
22
23
24
25
26
27
49
50
54
Page | 2 – 2022 Annual Report
Chairman’s Report
Dear Shareholders
On behalf of the Centrex Limited’s board, it gives me great pleasure, in my first year as chairman, to present the
Company’s Annual Report for the 2022 financial year.
I am pleased to report the significant progress the Company has achieved to date in developing its 100%-owned Agriflex
Pty Ltd (Agriflex) fertiliser business and welcome those that have become shareholders for the first time.
During the financial year, Agriflex successfully commissioned its flagship Ardmore Phosphate Rock Project in North West
Queensland.
The Company’s Managing Director, Robert Mencel, has assembled an experienced project management, engineering,
technical and operational team to implement the Ardmore Project and build a foundation for a sustainable business into
the future.
Highlights include:
•
•
Shareholder approval to change the company’s name to Centrex Limited at the 2021 AGM.
Successful capital raise, announced on 28 October 2021, by way of a share placement to sophisticated
investors of 44.4 million new shares at an issue price of $0.09 to raise $4.0 m.
• Agriflex executing a conditional term sheet with Samsung C & T Corporation to take the lesser of 20% of the
•
•
•
•
•
•
product or 160,000 MT of product for the first three years.
Settlement with Southern Cross Fertilizers Pty Ltd (SCF) in the dispute with the Royalty Deed. Agriflex
announced on 25 November 2021 it had agreed to increase SCF’s first right of refusal over Ardmore’s
available production under Royalty Deed from 20% to 30% and to pay an amount of $1.0 m.
The company announced on 6 April 2022 a binding commitment to place 57.1m shares to institutional,
professional, and sophisticated investors at an issue price of $0.14 per share to raise gross proceeds of
approximately $8.0m. The Company further announced a non-renounceable entitlement offer to Eligible
Shareholders to raise up to another $8.0 m fully underwritten by Taylor Collison.
The Company announced in the March 2022 quarterly that 70% of its first three years of production had been
allocated to first-class customers.
The Company announced in the June 2022 quarterly that it had achieved nameplate capacity and
metallurgical design performance with the plant consistently achieving the design throughput rate of 80
tonnes (wet) per hour feed of phosphate rock and product yields of over 80% compared to the Plants 70%
design parameters.
The Plant is producing a world class plus 34.5% P205 (Assayed) final product grade from a 30-31% (Assayed)
feed grade with R2O3 impurity levels below the preferred market acceptance level of 3%.
The mining contractor mobilised to site in April 2022 to recommence stripping of overburden and ore
mining. Mining is ongoing at the scheduled production rate of 27,000 t of ore per month. Further crushing
and screen enhancements have been identified to increase efficiencies and reduce costs.
• Appointment of key executives to establish and maintain a viable business, including the following
appointments-
General Manager Ardmore project
Commercial Manager Agriflex
Brian Hall
Stewart Bale
Cormac Byrne Chief Financial Officer
Enzo Artone Chief Technical Officer
Gavin Swart Engineering & Projects Manager
During the June 2022 quarter, the Company signed agreements to reserve 100% of its first three years production with the
final 50% allocated to major customers in Australia, New Zealand and
Asia.
2022 Annual Report - Page | 3
With 100% of the Ardmore projects annual production reserved for the first three years and the beneficiation plant
producing a 34.5% P205 final grade product, the Company has significantly de-risked many of technical aspects of the
Ardmore project, helping to support future final investment decisions.
All non-process infrastructure was completed on schedule and budget. The work completed included installation of
onsite power generation and distribution, mine site potable and non-potable water supply, construction of offices and
work shop, initial tailings dam cell, construction of permanent service roads and additional accommodation in Dajarra.
Initial engineering work suggests the existing Ardmore plant has significant latent production capacity. Detailed
engineering design work commenced in July 2022 to identify aspects of the plant which can be up-graded at low cost.
The low-cost capital changes to the plant are expected to increase nameplate capacity from 80 tph to greater than 100
tph.
The engineering design work is expected to be completed by December 2022 and progressively implemented.
The Company has three potential plant locations under consideration; at Ardmore, where the Definitive Feasibility Study
was based upon, Mount Isa and Townsville. Regardless of the plant location, a Townsville facility will be required for
product storage, staging and ship loading. A decision as to where to locate the plant is yet to be finalised.
When the Company in August 2021 announced an update to its Definitive Feasibility Study for its Ardmore Phosphate
Rock Project, the average June / July 2021 North Africa FOB Benchmark Price adjusted for grade was USD $125.The
benchmark phosphate price in the last quarterly lodged on the 29 July 2022 was US $287.50, representing a 130%
increase in potential revenue. There is also a potential gain on the exchange rate given that A$0.74 was used in the August
2021 update and the weakening in the Australian dollar since.
As a show of confidence in the Ardmore project, one of the Company’s major shareholders Australian New Zealand
Resources Corporation Pty Ltd, converted their $1.0 m Convertible Note into 59.545 m shares together with attaching
options and the registered security has been discharged. This will assist the Company when it comes to progressing its
final investment decision.
The Centrex management team and the boards primary focus is the Ardmore project and Oxley potassium project.
During the year minimal work was carried out at the Goulburn Gold – Base Metal project in NSW. In the next twelve
months the company will carry out a strategic review of its NSW projects to determine the best way to maximise
shareholder value.
I wish to acknowledge the efforts of the Centrex team and Robert Mencel for delivering on the Company’s strategy and for
building a sustainable business which will likely increase shareholders value in the medium term.
I wish to thank our long-term shareholders and welcome new shareholders to the Company for what I see as an extremely
exciting and rewarding next 12 months.
Kind Regards
Mr Peter Hunt
Chairman
Page | 4 – 2022 Annual Report
Managing Director’s
Report
During the Financial 2022 year, the company made substantial progress transforming Centrex into a modern resource
company.
Its 100% owned agricultural fertiliser company Agriflex Pty Ltd (Agriflex) recommenced mining at the Ardmore Phosphate
Rock Mine and successfully completed and commissioned the beneficiation plant onsite. This was completed on budget
and schedule.
At the end of the June quarter, the company formally committed to the “Ardmore Stage 1.5 Project”. Initial engineering
work suggests the existing Ardmore’s plant has significant latent production capacity. Detailed engineering design work
commenced in July to identify aspects of the plant which can be upgrade at low cost. Areas identified to date include
potential screen modifications, additional cyclones, as well as optimising and resetting plant operational parameters.
These low-cost capital changes are expected to increase name plate capacity from 80tph to greater than 100tph. The
engineering design work is expected to be completed by December 2022. Key focus for the year ahead increasing
production at Ardmore and reducing its operating costs.
Front End Engineering and Design and approvals planning continues for the 800,000 tpa plant. Project options analysis
and scheduling work for optimal project development and execution timelines are ongoing.
An experienced EPC contractor continues to work on optimising the physical location of the process plant and the
logistics pathway. This work is expected to be completed in Q3 2022. Three potential plant locations are being examined
in detail. These are the Ardmore site, a potential site near Mt Isa and Townsville.
The Definitive Feasibility Study is based upon the plant being built at Ardmore. The benefit of the Ardmore site is the
reduced logistics costs as only final product is transported, albeit work has been concluded that has identified markets
for the low- grade phosphate by- product streams. This by-product sale improves the overall Ardmore resource
utilisation.
The benefit of the Mount Isa site is access to mains services (water, gas, electricity) and other established town services
(workforce, accommodation, airport etc.) Only the final product would need to be transported from Mount Isa to
Townsville.
The benefit of the Townsville plant is access to lower costs services and immediate access to the port. A Townsville
facility would enhance and extend the longer-term business strategy that could include the treatment of other resources
within rail, transport and shipping corridors both on-shore and from overseas. There are multiple potential locations that
are currently being assessed within Townsville and its surrounds.
Regardless of the plant location, a Townsville facility will be required for product storage, staging and ship loading.
With the initial production Ardmore beneficiation plant recently achieving and exceeding design throughput and design
yield parameters, the commercial plant process flow diagram will be optimised and costed using this experience.
An environmental and social impact assessments consultant has been engaged to provide planning and scheduling
advice on the approval and permitting pathway for the various plant site options. Initial consultations and engagement
with Townsville port, business, service providers and community stakeholders has commenced.
The Company continues to undertake metallurgical test work on its Oxley Potassium Feldspar Project in Western
Australia. The test work is aimed at developing a low cost process flowsheet to produce a novel potassium fertiliser.
2022 Annual Report - Page | 5
Hydrothermal testwork is underway includes:
• High temperature and pressure lime leach
• Atmospheric pressure/elevated temperature hydroxide leach
• Atmospheric pressure/elevated temperature hydroxide/glycine leach
The programme is due for completion mid-August 2022 at which point positive results may warrant further testing. No
further testing is planned for the baseline roast/ leach/ precipitate/ Flotation/ KNO3 conversion flowsheet.
The Company has two exploration licences EL 7388 Goulburn and EL 7503 Archer located in the east Lachlan Fold Belt.
Minimal exploration work was undertaken during the financial year.
The company’s key focus for the year ahead is increasing production at Ardmore and lowering operating costs.
On behalf of the Board, I would like to thank our all our employees for their contribution to Centrex throughout the year
and acknowledge the support of our suppliers and contractors who have played a significant role in the company’s
success to date.
Kindest regards
Mr Robert Mencel
Managing Director
Page | 6 – 2022 Annual Report
Mining Exploration Entity Annual
Reporting Requirements
LIST OF TENEMENTS IN WHICH THE GROUP HAS AN INTEREST
TENEMENT LIST
Location
Licence
number
AS AT 30TH JUNE 2022
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
E70/4318
Oxley C
E70/5976
E70/5977
E70/5978
Oxley
Oxley
Oxley
New South Wales
EL 7388
Goulburn
Northern Territory
ELA 32048
Northern Territory ELA 32048
Wholly owned subsidiaries of Centrex Limited:
1 Agriflex Pty Ltd
2 Centrex Potash Pty Ltd
3
Lachlan Metals Pty Ltd
4 Centrex QLD Exploration Pty Ltd
AgriF1
AgriF1
AgriF1
AgriF1
CPot2
CPot2
CPot2
CPot2
LM3
CQld4
Interest
%
100
100
100
100
100
100
100
100
100
Application
2022 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 2022
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 2022
Location
Ardmore
Phosphate Rock
Project
Resource
Classification
Measured
Indicated
Inferred
Total
Tonnage
(Mt)
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 2022
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 – 2022 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)
30/6/2022
30/6/2021
Resource
154.7
154.7
Resource
Reserve
16.2
10.1
16.2
10.1
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
2022 Annual Report - Page | 9
COMPETENT PERSONS STATEMENT
The information in this report relating to Exploration Results (contained in the Managing Director’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 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 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 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 – 2022 Annual Report
Directors’ Report
For the Year Ended 30th June 2022
The Directors present their report together with the consolidated financial report of Centrex Limited (formerly Centrex
Metals Limited) (“Company”) and its controlled entities (“Group”), for the financial year ended 30th June 2022 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
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
Indemnification and insurance of Directors and Officers
Environmental Regulation and Performance
Non-audit services
Lead Auditor’s Independence Declaration
2022 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 Peter Hunt
FCA
Appointed 15/12/20
Chairman since 30/06/21
Mr Robert Mencel
B Eng(Mining) MBA
Appointed CEO 24/05/21
Appointed MD 01/09/21
Chairman – Non executive Director – Independent
Mr Hunt was appointed initially as a Non-Executive Director of the Company on 15
December 2020. He was a former consultant to BDO Australia, which acquired PKF
Adelaide of which Mr Hunt was senior partner in 2012. He is a member of the Chartered
Accountants Australia & New Zealand.
Mr Hunt is an experienced company director and has been a director and chairman over
several decades of a number of ASX listed mineral exploration and technology oriented
companies.
Mr Hunt is a member of the Company’s Remuneration and Nomination Committee and
Audit and Risk Committee.
In the three years immediately prior to 30 June 2021 Mr Hunt was Chairman of Xped Ltd,
resigning on the 5th February 2020.
Other than as disclosed above, in the three years prior to 30 June 2022, Mr Hunt held no
other positions with any other ASX listed companies.
Managing Director – Executive Director
Mr Mencel is an engineering and mining executive with more than 25 years’ experience
developing and operating a wide range of mining, mineral processing and engineering
operations. Previously he held the position of CEO for RONPHOS Corp., the Republic of
Nauru’s Phosphate company, where he was responsible for production, marketing and
export of phosphate to customers throughout Asia and Indian Pacific region.
Mr Mencel brings significant senior managerial experience to the role at Centrex, having
held the position of Managing Director/CEO of various ASX listed companies in the energy
and resource sector.
In the three years before 30 June 2022, Mr Mencel held no director positions with any other
ASX listed companies.
Mr Graham Chrisp
Non-executive Director – Not Independent
B Tech (CE)
Appointed 21/1/10
Executive Chairman 2/12/19
– 30/06/21
Remains a Non-Executive
Director
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 Limited (having previously served as
its CEO 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. In addition, Mr Chrisp is managing director of
Australian New Zealand Resources Corporation Pty Ltd, who through the Chrisp Family
Trust is the Company’s second largest shareholder. 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.
In the three years before 30 June 2022, Mr Chrisp held no director positions with any other
ASX listed companies.
Page | 12 – 2022 Annual Report
Dr A John Parker
Non-Executive Director – Independent
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 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. He was formerly Managing Director of Lincoln Minerals Limited and is
a member of the Australian Institute of Geoscientists and the Australian Institute of
Company Directors.
Dr Parker is a member of the Company’s Remuneration and Nomination Committee and
the Audit and Risk Management Committee.
In the three years before 30 June 2022, Dr Parker held no director positions with any other
ASX listed companies.
1.2 Company Secretary
Mr Jonathan Lindh was appointed on the 29 March 2021 and has over 15 years’ legal and corporate advisory experience
practising predominantly in the energy and resources sector. Mr Lindh holds a Bachelor of Laws, a Bachelor of
International Studies and post graduate qualifications in finance and corporate governance. Mr Lindh has extensive
experience in the areas of corporate governance, mergers and acquisitions, joint ventures, farm-in arrangements, equity
capital markets, foreign investment and native title /aboriginal heritage.
2022 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 29 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.
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 2022 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
12
12
12
12
12
12
12
10
2
2
2
2
2
2
2
2
-
-
-
-
-
-
-
-
Mr P Hunt
Mr R Mencel
Mr G Chrisp
Dr J Parker
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 4th 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:
https://www.centrexlimited.com.au/governance/
5. Remuneration Report - audited
5.1 Principles of compensation
Page | 14 – 2022 Annual Report
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.
For the year ended 30th June 2022, the Non-Executive
Directors’ compensation comprised Directors’ base fees
of $54,545 per annum (2021: $35,000 per annum) for the
Chairman and $45,455 per annum (2021: $35,000 per
annum) for the other Non-Executive Directors.
Superannuation is paid on behalf of the Non-Executive
Directors at the rate of 10% 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. The increases in Directors Fees was effective from
the 1st November 2021.
Managing Director and other key management
personnel
Remuneration packages for the Managing Director and
other Key Management previously included a mix of
fixed and variable compensation, the variable
compensation using short and long term incentives.
The remuneration packages currently takes 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) is currently 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)
provides 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 2022 financial year Mr Robert Mencel was
awarded 3 Million Performance Rights as approved at
the 2021 AGM.
Following their issue, the first tranche of 1,000,000
performance rights vested and were exercised into the
equivalent number of ordinary shares after meeting the
following Performance Conditions.
(a) 500,000 vesting upon a continuous period of
employment of 12 months with the Company;
(b) 100,000 vesting upon completion of an update of
the 2018 Ardmore Project Definitive Feasibility
Study;
(c) 100,000 vesting upon securing direct application
phosphate rock sales to 3 or more customers;
(d) 200,000 vesting upon securing 2 or more
sales/marketing agreements for future Ardmore
Project production; and
(e) 100,000 vesting upon the Company completing a
successful capital raise of $2m or more.
Tranche 2, 1,000,000 Performance Rights, with the
performance period being the financial year ending
2023:
(a) 500,000 vesting upon a continuous period of
employment of 24 months with the Company;
(b) 300,000 vesting upon shipment of more than 20,000t
in trial shipments for Ardmore;
(c) 200,000 vesting upon completion of FEED for
800ktpa process plant for the Ardmore Project.
Tranche 3, 1,000,000 Performance Rights, with the
performance period being the financial year ending
2024:
(a) 250,000 vesting upon a continuous period of
employment of 36 months with the Company;
(b) 350,000 vesting upon completing of
financial
closure for the construction and operation of a 800kt
pa Process Plant;
(c) 400,000 vesting upon 80% of production at the
Ardmore Project allocated by sales/marketing
agreements or off take agreements.
The fair value of the share-based payments was
determined based on the market price for the shares as
at the grant date.
Service agreements
Robert Mencel, Managing Director
Mr Mencel was appointed Chief Executive Officer (CEO)
on 24th May 2021 and Managing Director on 1st
September 2021. On appointment as CEO his total
annual fixed remuneration was $390,000 plus statutory
superannuation. On the 1st June 2022 Mr Mencel’s total
annual fixed remuneration was increased to $450,000
plus statutory superannuation.
Mr Mencel’s employment with the company may be
terminated with three months written notice.
Other Key Management Personnel
Mr Alastair Watts - General Manager Exploration
Service Agreements
Mr Watts contract is for an unlimited term and can be
terminated by either party by giving up to three months’
written notice. The Company reserves the right to
terminate the contract without notice in the event of
misconduct or dishonesty. His total annual fixed
remuneration is $260,500 plus statutory
superannuation.
2022 Annual Report - Page | 15
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:
Salary & fees
Non-
monetary
benefits
Super-
annuation
benefits
Share-
based
payments
(1)
Termination
Total
Options /
Rights
related
$
$
Directors
Mr P Hunt Chairman
2022
52,819
Mr G Chrisp. Non-exec
Mr A J Parker Non-exec
2021
20,759
2022
2021
2022
41,970
166,513
41,970
2021
35,000
Mr P Cox (2) Non-exec
2022
-
2021
16,042
Mr R Mencel Managing Director
2022
Total compensation: Directors
2021
2022
2021
Executives
Mr A Watts(3) GM Exploration
2022
Mr Gerard Bosch Mgr. Approvals
Total compensation: executives
Total compensation: KMP
2021
2022
2021
2022
2021
2022
2021
395,000
41,786
531,759
280,100
196,061
239,419
-
134,494
196,061
373,913
727,820
654,013
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
4,197
3,325
4,197
3,325
-
1,524
27,500
2,679
35,894
10,853
19,607
22,745
-
12,058
19,607
$
-
-
-
-
-
-
-
-
83,000
5,900
83,000
5,900
-
11,800
-
-
-
34,803
11,800
55,501
45,656
83,000
17,700
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
16.4
11.7
0.0
4.3
0.0
0.0
52,819
20,759
46,167
169,838
46,167
38,325
-
17,566
505,500
50,365
650,653
296,853
215,668
273,964
-
146,552
215,668
420,516
866,321
717,369
(1) In accordance with the requirements of the Accounting Standards, remuneration includes a proportion of the value of the equity 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 equity instruments vest.
(2) Mr Peter Cox was appointed as a director on 28th January 2020.
(3) During the period Mr Watts took leave without pay.
Page | 16 – 2022 Annual Report
Key Management Personnel Holding of Shares:
The movement during the reporting period in the number of ordinary shares in Centrex 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
Issued
Graham Chrisp
(i)
2022
110,905,672
59,545,454
2021
110,905,672
-
Mr Robert Mencel (ii)
Dr A J Parker
Mr Peter Hunt
Mr Alastair Watts
2022
2021
2022
2021
2022
2021
2022
2021
100,000
1,011,905
-
-
-
-
-
100,000
-
-
-
-
200,000
-
976,190
200,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
170,451,126
110,905,672
1,111,905
100,000
-
-
-
-
1,176,190
200,000
(i)
(ii)
(iii)
Shares are held by Dapop Pty Ltd and Australia New Zealand Resources Corporation Pty Ltd both are entities
associated with Mr Graham Chrisp. The movement of 59,545,454 shares during the year related to the conversion of the convertible
note as previously approved by shareholders. Refer to note 25 for more detail.
Shares are held by Mrs Georgina Mencel and Mr Robert John Mencel an entity associated with Mr Robert
Mencel. The movement of 1,011,905 shares represents the exercise of 1,000,000 performance rights to shares with the remaining
11,905 shares acquired through participation in the Company’s 2022 Pro Rata Rights Issue.
Shares are held by Mr Alastair Watts and Mr Alastair James Watts & Mrs Sonja Watts an entity
associated with Mr Alastair Watts. The movement of 976,190 shares were acquired through participation in the Company’s 2022 Pro
Rata Rights Issue & Placement.
Key Management Personnel Holding of Performance Rights:
The number of performance rights issued during the current and prior years which has been recognised as Director and
Key Management Personnel remuneration is shown below:
30th June 2022
2022 Performance Rights
Mr Robert Mencel
Total
Holding at 30th
Jun 2021
Issued
Exercised (E) or
Lapsed (L)
Holding at 30th
Jun 22
-
-
3,000,000
3,000,000
(1,000,000)E
(1,000,000)
2,000,000
2,000,000
During the year ended 30 June 2022, Mr Robert Mencel was awarded 3 million Performance Rights as approved at the
2021 AGM.
Following their issue, the first tranche of 1,000,000 performance rights vested and were exercised into the equivalent
number of ordinary shares. The fair value of the share-based payments was determined based on the market price for
the shares as at the grant date.
The first tranche of 1,000,000 performance rights vested and were exercised into the equivalent number of ordinary
shares after meeting the following Performance Conditions.
(a) 500,000 vesting upon a continuous period of employment of 12 months with the Company;
(b) 100,000 vesting upon completion of an update of the 2018 Ardmore Project Definitive Feasibility Study;
(c) 100,000 vesting upon securing direct application phosphate rock sales to 3 or more customers;
(d) 200,000 vesting upon securing 2 or more sales/marketing agreements for future Ardmore Project production; and
100,000 vesting upon the Company completing a successful capital raise of $2m or more.
2022 Annual Report - Page | 17
The remaining tranches have the following performance conditions:
Tranche 2, 1,000,000 Performance Rights with a performance period of the financial year ending 2023
(a) 500,000 vesting upon a continuous period of employment of 24 months with the Company;
(b) 300,000 vesting upon shipment of more than 20,000t in trial shipments for Ardmore;
(c) 200,000 vesting upon completion of FEED for 800ktpa process plant for the Ardmore Project.
Tranche 3, 1,000,000 Performance Rights with a performance period of the financial year ending 2024
(a) 250,000 vesting upon a continuous period of employment of 36 months with the Company;
(b) 350,000 vesting upon completing of financial closure for the construction and operation of a 800kt pa Process Plant;
(c) 400,000 vesting upon 80% of production at the Ardmore Project allocated by sales/marketing agreements or off take
agreements.
Key Management Personnel Holding of share options:
30th June 2022
2022 Unlisted Options
Mr Graham Chrisp
Total
Holding at 30th
Jun 2021
Issued
Exercised (E) or
Lapsed (L)
Holding at 30th
Jun 22
-
-
59,545,454
59,545,454
-
-
59,545,454
59,545,454
On the 1st April 2022 the Company advised the market upon that a notice of conversion was received from the
convertible note holder. At that time the company converted the convertible note (including all capitalised interest on
the convertible note) into 59,545,454 ordinary shares and 59,545,454 free attaching options in accordance with it terms.
The movement in options during the period reflects the free attaching options which all have an exercise price of $0.05
per option and an expiry date of 31st December 2023.
Other
Total interest paid or payable on the convertible note held by a related party of Mr Chrisp for the year ended 30 June
2022 was $340,000 of which $30,000 was paid in cash. For the 2021 financial year the interest paid or payable was
$10,000 which was settled in cash.
During the year ended 30 June 2021, the company granted shares to two key management personnel (Mr Mencel and Mr
Watts). In total 300,000 shares were issued with a total fair value of $17,700. The fair value of the share based payments
were determined based on the market price for the shares as at the grant date.
Other than transactions as detailed in Note 18 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.
Other related party transactions:
During the 2021 year, Centrex entered into a convertible securities agreement with Australia New Zealand Resources
Corporation Pty Ltd (a director related entity of Graham Chrisp). The effective date of the note was 2 June 2021 being
the date the convertible note was issued and the face value of $1,000,000 was received. The interest rate was 12% per
annum which accrues and compounds on first day of each calendar month.
On the 1st April 2022 the Company advised the market upon that a notice of conversion was received from the
convertible note holder. The company converted the convertible note (including all capitalised interest outstanding)
into 59,545,454 ordinary shares and 59,545,454 attaching options in accordance with it terms as approved by
shareholders at the Company’s 2021 AGM. The total fair value at the date of conversion was $18.934 million.
Page | 18 – 2022 Annual Report
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.
Loss attributable to owners of the
company
2022
2021
2020
2019
2018
(21,654,584)
(2,626,637)
(19,820,532)
(1,384,316)
(1,139,938)
Dividends paid (per share)
-
-
Share price at 30 June
$0.15
$0.05
-
$0.03
-
-
$0.11
$0.10
End of audited remuneration report.
6. Principal Activity
The principal activity of the Group during the reporting year was exploration on the following areas:
• Phosphate Rock Ardmore mine 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 (loss) for the reporting year, after providing for income tax was:
Net loss after income tax
2022
$
2021
$
(21,654,584)
(2,626,637)
The net loss for the financial year is inclusive of a once off expense totalling $18.934M relating to the remeasurement to
fair value of the convertible note on issue immediately prior to its exercise into ordinary shares. Pursuant to the terms
of the convertible note, the note converted to 59,545,454 shares with 59,545,454 attaching options. Given the material
movement in the share price of the Company since the convertible note was issued, the fair value uplift of the note was
a significant accounting transaction included in the loss for the year.
The Group capitalised expenditure of $9.419 million (2021: $0.919 million) on mineral tenements during the year.
Further details can be found in Note 9 to the financial statements.
Further information on the Group’s operating activities can be found in the Managing Directors Report.
8. Dividends
No dividends were declared during the year or prior year.
2022 Annual Report - Page | 19
9. Events subsequent to year end
On the 16th September 2022 the Company updated the shareholders on recent correspondence with the royalty holder
for the Ardmore Phosphate Rock Project. The Company received an invoice for $2 million from Southern Cross
Fertilisers Pty Ltd (“SCF”), a wholly owned subsidiary of Incitec Pivot Limited (the Royalty Holder) requesting payment of
the $2 million Extension Fee.
The Board has subsequently sought and obtained legal advice regarding the validity of the invoice.
The Company notes that the Royalty Deed includes a dispute resolution clause. The clause includes a requirement for
both parties to negotiate in good faith with a view to resolving any dispute within 21 days after the receipt of a dispute
notice, which has been submitted by Agriflex.
The Company looks forward to the matter being resolved in good faith and will keep the market informed on any
developments.
On the 27th September 2022 the Company issued 20,880,769 Performance Rights to senior executives and employees of
the Company under the terms of the Company’s Performance Rights Plan. The Performance Rights were issued for no
consideration and will not vest unless the performance conditions set by the Board have been satisfied for each tranche
for the relevant financial years, being 30 June 2023 (tranche 1), 30 June 2024 (tranche 2) and 30 June 2025 (tranche 3).
10. Likely Developments
The Directors have assessed the status of all of the Group’s tenements and believe all tenements have sufficient mineral
potential to warrant further exploration. It is noted, however, that substantial advancement of the projects is subject to
sufficient finance being raised for all of the Company’s projects. Mining is also scheduled to continue at the Ardmore
Phosphate Mine in the period at the scheduled production rates.
11. 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.
12. 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
Page | 20 – 2022 Annual Report
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.
13. Non-audit services
During the year Grant Thornton, 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, Grant Thornton, and its related practices for
audit and non-audit services provided during the year are set out below.
Audit and review Services
Other services
Auditors of the company
2022
$
102,486
15,927
118,413
2021
$
52,995
4,400
57,395
14. Lead Auditor’s Independence Declaration
The Lead auditor’s independence declaration is set out on page 22 and forms part of the Directors’ Report for the
financial year ended 30th June 2022.
Signed in accordance with a Resolution of the Board of Directors:
Mr Robert Mencel
Managing Director
Dated at Adelaide this 30th day of September 2022.
2022 Annual Report - Page | 21
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Directors of Centrex Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Centrex Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there
have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 30 September 2022
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
#8456170v1w
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the Year ended 30th June 2022
Note
2022
$’000
2021
$’000
Revenue
Mining & Crushing - contractor
Other income
Office and administration expenses
Consultants and management expenses
Directors' fees
Employee benefit expenses
Project generation expense
Exploration expenditure – written off
Depreciation expense
2
2
2
9
Change in fair value of convertible note
25
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
4
5
5
214
(236)
20
(560)
(384)
(137)
(1,037)
(93)
(94)
(1)
(18,934)
(50)
(21,292)
2
(365)
(363)
-
-
55
(261)
(195)
(238)
(122)
-
(45)
(12)
(1,794)
-
(2,612)
8
(23)
(15)
(21,655)
(2,627)
-
(21,655)
-
(21,655)
(21,655)
(21,655)
-
(2,627)
-
(2,627)
(2,627)
(2,627)
Cents per share
Cents per
share
(4.93)
(4.93)
(0.76)
(0.76)
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.
2022 Annual Report - Page | 23
Consolidated Statement of
Financial Position
As at 30th June 2022
Note
As at
30th June 2022
$’000
30th June 2021
$’000
Assets
Cash and cash equivalents
Trade and other receivables and other assets
Other financial assets
Other assets - prepayments
Total Current Assets
Other financial assets - deposits held as security
Exploration and Evaluation assets
Plant and equipment
Total Non-Current Assets
Total assets
Liabilities
Trade and other payables
Employee benefits
Total Current Liabilities
Employee benefits
Provision for rehabilitation
Derivative financial instruments
Interest bearing loans and borrowings
Total Non-Current Liabilities
Total Liabilities
Net assets
Equity
Contributed equity
Share based payments reserve
Profit reserve
Accumulated losses
Total equity
6
7
8
8
9
10
11
12
25
13
14
15
12,848
476
20
79
13,423
510
22,298
141
22,949
36,372
2,783
162
2,945
7
1,573
-
151
1,731
4,676
31,696
74,816
9,815
-
(52,935)
31,696
1,331
1
860
79
2,271
510
11,910
-
12,420
14,691
92
10
102
-
510
2,794
-
3,304
3,406
11,285
42,564
-
1,005
(32,284)
11,285
The Consolidated Statement of Financial and Other Comprehensive Income is to be read in conjunction with the notes
to the consolidated financial report.
Page | 24 – 2022 Annual Report
Consolidated Statement of Changes
in Equity
For the Year ended 30th June 2022
Contributed
equity
(Note 14)
Share based
payment reserve
(Note 15)
Profit
reserve
Accumulated
Losses
Total
$’000
$’000
$’000
$’000
Current Period
Balance at 30th June 2021
Loss for the period
Total Comprehensive Income for
the Period
Contributions from/to equity
owners
Transfer of Historical Profit
Reserve to Accumulated Losses
Contributions from equity holders
Share issue costs
Share-based payment
transactions – refer note 15
Fair value of options issued in
conjunction with the exercise of
the convertible note – refer note
15
Balance at 30th June 2022
Prior Period
Balance at 30th June 2020
Loss for the period
Total Comprehensive Income for
the Period
Contributions from/to equity
owners
Contributions from equity holders
Share issue costs
Share-based payment
transactions
Balance at 30th June 2021
$’000
42,564
-
-
21,126
(1,229)
12,355
74,816
-
-
-
-
-
49
9,766
9,815
1,005
-
-
(32,284)
(21,655)
11,285
(21,655)
(21,655)
(21,655)
(1,005)
1,005
-
-
-
-
-
-
(52,935)
21,125
(1,228)
12,404
9,766
31,696
41,351
2,648
1,005
-
-
1,209
(14)
18
42,564
-
-
-
-
(2,648)
-
-
-
-
-
(32,305)
(2,627)
12,699
(2,627)
(2,627)
(2,627)
-
-
1,209
(14)
2,648
18
-
1,005
(32,284)
11,285
The Consolidated Statement of Changes in Equity is to be read in conjunction with the notes to the consolidated
financial report.
2022 Annual Report - Page | 25
Consolidated Statement of
Cash Flows
For the Year ended 30th June 2022
Note
2022
$’000
2021
$’000
Cash flows from operating activities
Receipts from customers
Other income received
Payments to suppliers and employees
Net cash used in operating activities
21(b)
Cash flows from investing activities
Expenditure on mining tenements
Interest received
Interest and other costs of finance paid
Cash transferred (to) / from term deposits
Net cash used in / (from) investing activities
Cash flows from financing activities
Proceeds from issue of equity securities
Proceeds from issue of convertible note
Proceeds from exercise of options
Transaction costs relating to issues of equity
securities
Net cash from financing activities
Net increase / (decrease) in cash
Cash at the beginning of the year
Cash at the end of the year
217
20
(1,756)
(1,519)
(7,647)
4
(55)
857
(6,841)
20,024
-
1,102
(1,229)
19,897
11,537
1,331
12,868
55
(979)
(924)
(717)
9
332
(376)
1,199
1,000
10
(15)
2,194
894
437
1,331
The Consolidated Statement of Cash Flows is to be read in conjunction with the notes to the consolidated financial
report.
Page | 26 – 2022 Annual Report
Notes to the Consolidated Financial
Statements
For the Year ended 30th June 2022
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 2022 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 2022.
a) Statement of Compliance
The financial report is a general purpose financial report,
which has been prepared in accordance with Australian
Accounting Standards (‘AAS’s’) adopted by the Australian
the
Accounting Standards Board
Corporations Act 2001.
The consolidated financial
statements of the Group complies with International
Financial
and
interpretations adopted by the International Accounting
Standards Board (‘IASB’).
Standards
Reporting
(‘IFRSs’)
(‘AASB’)
and
b) Going Concern
The Group’s financial statements are prepared on the
going concern basis which assumes continuity of normal
business activities and the realisation of assets and
settlement of liabilities and commitments in the normal
course of business.
During the year ended 30 June 2022 the group recognised
a loss of $21.655m (2021: $2.627m), had net cash outflows
from operating and investing activities of $8.36m (2021:
$1.30m), and had accumulated losses of $ 52.935m(2021:
$32.284m) as at 30 June 2022. The continuation of the
group as a going concern is dependent upon its ability to
generate sufficient net cash inflows from operating and
financing activities and manage the level of exploration
and other expenditure within available cash resources.
The Directors consider that the going concern basis of
accounting is appropriate, as the company has the
following options:
• Securing commercial sales agreements for
Phosphate Rock;
• The ability to issue share capital under the
Corporations Act 2001, by a share purchase plan,
share placement or rights issue;
• The option of farming out all or part of its assets;
• The option of selling interests in the Company’s
assets; and
• The option of relinquishing or disposing
of rights and interests in certain assets.
is unsuccessful
In the event that the Company
in
implementing one or more of the funding options listed
above, such circumstances would indicate that a material
uncertainty exists that may cast significant doubt as to
whether the Company will 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.
This financial report does not include any adjustments
relating to the recoverability and classification of
recorded asset amounts or to the amounts and
classification of liabilities that might be necessary should
the Company not continue as a going concern.
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.
d) Accounting estimates and judgements
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)
successful development
Determination of future taxable profits requires estimates
and assumptions as to future events and circumstances, in
particular, whether
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
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.
is
2019 Annual Report - Page | 27
Notes to the Consolidated Financial Statements (continued)
Exploration, evaluation and development expenditure –
Note 1(k)
commercial
exploitation,
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
in particular, whether successful
and circumstances
development
or
and
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
Changes in these
and future capital requirements.
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).
Provision for restoration and rehabilitation - Note 1(m)
The Group assesses its site restoration and rehabilitation
provision at each reporting date in accordance with the
accounting policy. Significant judgement is required in
determining the provision for restoration and
rehabilitation as there are many transactions and other
factors that will affect the ultimate liability payable to
rehabilitate and restore the site.
The estimate of future costs therefore requires
management to make assessment of the future
restoration and rehabilitation date, future environmental
legislation, changes in regulations, price increases,
changes in discount rates, the extent of restoration
activities and future removal and rehabilitation
technologies. When these factors change or become
known in the future, such differences will impact the
restoration and rehabilitation provision in the period in
which they change or become known. At each reporting
date the rehabilitation and restoration provision is
remeasured to reflect any of these changes.
Financial instruments - Convertible note
The Group was required to fair value its convertible note at
each reporting date utilising appropriate valuation
methodologies. The conversion option was considered a
derivative liability measured at fair value using observable
inputs (Monte Carlo). Immediately prior to the conversion
of the convertible note fair value was determined using the
Centrex share price as at conversion date and the
attaching options using a Black Scholes valuation taking
into account observable data and assumptions.
e) Principles of Consolidation
Page | 28 – 2022 Annual Report
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
• Centrex QLD Exploration Pty Ltd (previously named
Port Spencer Holdings Pty Ltd)
• South Australia Iron Ore Group Pty Ltd
• AgriFlex Pty Ltd (previously named Centrex Phosphate
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.
g) Revenue & Other Income
Revenue is measured at the fair value of the consideration
received or receivable. Revenue from sale of goods or
rendering of a service is recognised upon delivery of the
goods or service to customers as this corresponds to the
transfer of control of the goods and the cessation of all
involvement with those goods. All revenue is stated net of
goods and services tax (GST).
Direct Application Phosphate Rock Sales - The Group
generates revenue from the sale of Phosphate Rock.
Revenue from the sale of these goods is recognised when
control over the inventory has transferred to the customer.
Control is generally considered to have passed when:
• physical possession and inventory risk is transferred
(including via a third-party transport provider arranged by
the customer):
• payment terms for the sale of goods can be clearly
identified for the transfer of control of the asset
Notes to the Consolidated Financial Statements (continued)
Interest income - Interest income is recognised as it
accrues and is included in finance income.
assets on a net basis or their tax assets and liabilities will
be realised simultaneously.
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)
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.
Term deposits comprise cash deposits with maturities of
more than 90 days.
j)
Income Tax
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
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
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.
future capital requirements,
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
entity. The head entity within the tax consolidation group
is Centrex Limited.
k) Exploration, Evaluation and Development
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.
incurred on activities
Expenditure
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:
2022 Annual Report - Page | 29
Notes to the Consolidated Financial Statements (continued)
(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
Economically
area of
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.
interest are continuing.
Exploration and evaluation assets include:
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.
geochemical
and
m)
Provisions for Restoration and Rehabilitation
• Acquisition of rights to explore;
• Topographical,
geological,
geophysical studies;
• Exploratory drilling, trenching, and sampling; and
• Activities in relation to evaluating the technical
feasibility and commercial viability of extracting the
mineral resource.
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
include: acquired rights to explore and
intangible
exploratory drilling costs.
Exploration and evaluation assets are transferred to
Development Assets once
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.
technical
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
Page | 30 – 2022 Annual Report
A provision is recognised for the estimated cost of
rehabilitation, decommissioning and restoration relating
to areas disturbed during the construction of the Ardmore
Mine site 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
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.
life of the mine.
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.
Notes to the Consolidated Financial Statements (continued)
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
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.
the
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
p)
Impairment
3-5 years
3-5 years
3-5 years
50 years
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.
losses recognised
Impairment
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 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
2022 Annual Report - Page | 31
Notes to the Consolidated Financial Statements (continued)
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
the
Liabilities for employee benefits for wages, salaries, and
annual leave that are expected to be settled within 12
months of
represent present
reporting date
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.
Termination benefits
terminate employment before
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
the normal
retirement date, or to provide termination benefits as a
to encourage voluntary
result of an offer made
redundancy.
for voluntary
Termination benefits
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.
u) Share and option compensation
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-
into account the terms and
pricing model, taking
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 have been
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
Page | 32 – 2022 Annual Report
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.
w) Earnings per share
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
loss
is determined by adjusting the profit or
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.
x) Convertible Note
Borrowings and other financial liabilities
Financial liabilities are recognised at the fair value of the
consideration received, when the group becomes a party
to the contractual provisions of the financial instrument. A
financial liability is recognised when it is extinguished,
discharge, cancelled or expires.
Classification and measurement of financial liabilities
The Group's financial liabilities include borrowings, trade
and other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transactional costs unless
the group designate a financial liability at fair value
through profit or loss.
financial
Subsequently,
liabilities are measured at
amortised cost using the effective interest method except
for derivatives and financial liabilities designated at FVPL,
which are carried subsequently at fair value with gains or
losses recognised in profit or loss.
The Group has recognised its convertible note liabilities at
FVPL in order to provide the most relevant information to
Notes to the Consolidated Financial Statements (continued)
users, and furthermore to keep consistency with initial
recognition on inception of these instruments.
Assessments are made at each reporting period in regard
to underlying valuation of its liability utilising appropriate
valuation methodologies (Monte Carlo) and the share
price upon conversion of convertible notes.
y) New standards and interpretations
At the date of authorisation of these financial statements,
several new, but not yet effective, standards and
amendments to existing standards, and interpretations
have been published by the IASB. None of these standards
or amendments to existing standards have been adopted
early by the Group. Management anticipates that all
relevant pronouncements will be adopted for the first
period beginning on or after the effective date of the
pronouncement. New standards, amendments and
interpretations not adopted in the current year have not
been disclosed as they are not expected to have a
material impact on the Group’s financial statements.
The accounting policies applied by the Group in the
consolidated financial statements are consistent with
those applied in the prior year. The Group has not early
interpretation or
adopted any other
amendment that has been issued but is not yet effective.
Standards, interpretations and amendments that apply
for the first time in 2022 did not have any impact on the
amounts recognised in prior periods and are not expected
to significantly affect the current or future periods
standard,
2022 Annual Report - Page | 33
Notes to the Consolidated Financial Statements (continued)
2. PROFIT FROM CONTINUING OPERATIONS
Finance Income
Interest income on bank accounts including term deposits
Revenue
Direct Application Phosphate Rock Sales
Other income
Government Grant
Other
Employee Benefit Expenses
Wages and salaries
Contributions to defined contribution superannuation funds
Equity settled share-based payment transactions
Other employee costs
Finance costs
Accrued/Expensed Convertible note interest
Bank fees/interest
2022
$’000
2021
$’000
2
2
214
214
20
-
20
749
134
132
22
1,037
340
25
365
8
8
-
-
50
5
55
60
46
18
(2)
122
10
13
23
3. AUDITOR’S REMUNERATION
Audit and review services
Other services – tax compliance
Auditors of the company
2022
$
102,486
15,927
118,413
2021
$
52,995
4,400
57,395
Page | 34 – 2022 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:
2022
$’000
2021
$’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
Deferred capital expenses
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 25% (2021: 26%)
Non-deductible expenses
Non-assessable government grants
Tax losses not recognised
Total income tax benefit
Unrecognised tax losses at 25% (2021: 26%)
-
-
(17)
454
(4,235)
-
253
(3,545)
3,545
(21,655)
-
(21,655)
(5,414)
4,767
-
647
-
7,523
-
-
16
145
(1,691)
-
7
(1,523)
1,523
(2,627)
-
(2,627)
(683)
471
(13)
225
-
6,832
The utilisation of losses depends upon the generation of future taxable profits which Centrex believes to be recoverable
based on current taxable income projections. Utilisation will also be subject to relevant tax legislation associated with
recoupment.
2022 Annual Report - Page | 35
Notes to the Consolidated Financial Statements (continued)
5. EARNINGS PER SHARE
Basic earnings per share
Loss attributable to ordinary shareholders
Loss for the period
Loss attributable to ordinary shareholders
2022
$’000
2021
$’000
(21,655)
(2,627)
(21,655)
Number of Shares
(2,627)
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
367,404,274
439,556,542
315,685,357
346,905,611
(4.93)
(4.93)
(0.76)
(0.76)
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 2022 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.
6. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Total cash and cash equivalents
7. TRADE AND OTHER RECEIVABLES
Trade Debtors
GST receivable
Total receivables and other assets
8. OTHER FINANCIAL ASSETS
Other Financial Assets
Cash on deposit
Deposits held as security
2022
$’000
12,848
12,848
2021
$’000
1,331
1,331
2022
$’000
2021
$’000
2
474
476
20
510
2022
$’000
1
-
1
860
510
2021
$’000
The Company has a cash-backed bank guarantee facility in place up to a value of $510 thousand. At 30 June the
facility was drawn to $510 thousand. The amounts drawn under the facility relate to ML5542 (QLD).
Page | 36 – 2022 Annual Report
Notes to the Consolidated Financial Statements (continued)
9. 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.
Cumulative
Expenditure to
30th Jun 21
Expenditure
12 months to
30th Jun 22
Increase
Rehab
Provision to
30th Jun 22
Tenements
Impaired to
30th Jun 22
Cumulative
Expenditure to
30th Jun 22
$’000
$’000
$’000
$’000
$’000
Ardmore Phosphate
11,879
9,313
1,063
Northern Territory Phosphate
Goulburn Zinc
Oxley Potassium Nitrate
Total
Impairment
14
7
10
-
25
81
-
-
-
11,910
9,419
1,063
-
(14)
(5)
(75)
(94)
22,255
-
27
16
22,298
The carrying amounts of the Group’s exploration and evaluation assets are reviewed at each reporting date, to
determine whether any of the following indicators of impairment exists:
• tenure over the tenement area has expired during the period or will expire in the near future, and is not expected to
be renewed; or
• substantive expenditure on further exploration for, and evaluation of, mineral resources in the specific area is not
budgeted or planned; or
• exploration for, and evaluation of, resources in the specific area have not led to the discovery of commercially
viable quantities of resources, and the Group has decided to discontinue activities in the specific area; or
• sufficient data exists to indicate that, although a development is likely to proceed, the carrying amount of the
exploration and evaluation asset is unlikely to be recovered in full from successful development or from sale.
As a result an exploration impairment of $94,000 was recognised during the year.
10. PLANT AND EQUIPMENT
At cost
Less accumulated depreciation
Total plant and equipment
Movement in plant and equipment
Opening balance
Additions
Depreciation
Closing balance
2022
$’000
2022
$’000
143
(2)
141
-
143
(2)
141
2021
$’000
2021
$’000
-
-
-
-
-
-
-
2022 Annual Report - Page | 37
Notes to the Consolidated Financial Statements (continued)
11. TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Other payables
Total trade and other payables
2022
$’000
2,690*
65
28
2,783
2021
$’000
43
32
17
92
Trade and other payables liabilities for trade and other payables are initially recorded at the fair value of the
consideration to be paid in the future for goods and services received, whether or not billed to the Group, and then
subsequently at amortised cost. Trade payables are unsecured and are usually paid within 30 days of recognition.
The carrying amounts of trade and other payables are assumed to be the same as their fair values, due to their short
term nature.
*$2.597M relates to the ramp up of operations at Ardmore and the remaining $0.093M to corporate operations.
12. PROVISION FOR REHABILIATION
Rehabilitation – non current
Total provision for rehabilitation
2022
$’000
1,573
1,573
2021
$’000
Opening balance
Revision of provision during the year
Expenditure on rehabilitation during the year
Closing balance
Revision of rehabilitation and restoration provision
510
1,063
-
1,573
510
510
510
-
-
510
Represents amendments to future restoration and rehabilitation liabilities resulting from changes to the site
disturbance during the financial year, initial recognition of new rehabilitation provisions as well as a change in
provision assumptions. Key provision assumption changes include reassessment of costs and timing of expenditure.
The material increase in the provision for rehabilitation in the current year largely relates to the ground disturbance
from the company restarting mining in April 2022. Included in the provision is also the rehabilitation of the tailing cell,
ROM pad and access roads.
13. INTEREST BEARING LOANS AND BORROWINGS
Motor vehicle finance
Total interest bearing loans and borrowings
2022
$’000
151
151
2021
$’000
-
-
Assets with a written down value of $141,000 act as security for these borrowings.
Page | 38 – 2022 Annual Report
Notes to the Consolidated Financial Statements (continued)
14. SHARE CAPITAL
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.
Issued ordinary shares
(a)
Issued and paid-up capital
Fully paid ordinary shares
(b) Movements in fully paid shares
Opening balance
Issue of shares via placement (Oct 21)
Issue of shares upon convertible note conversion (Share Based Payment)
Issue of shares via placement (April 22)
Issue of shares via underwritten rights issue
Issue of shares via unlisted options exercised during the period
Issue of shares for conversion of performance rights (Share Based Payment)
Issue costs
Issued ordinary shares at the end of the period
Number of
shares
608,841,721
608,841,721
367,403,090
44,444,445
59,545,454
57,104,593
57,314,633
22,029,506
1,000,000
-
608,841,721
$’000
74,816
74,816
42,564
4,005
12,272
7,995
8,024
1,102
83
(1,229)
74,816
15. SHARE BASED PAYMENTS & RESERVES
Unlisted Options
59,545,454 unlisted options were issued during the 2022 on the conversion of the convertible note in accordance
with the terms. The fair value of the options of $9,765,454 was determined using the Black Scholes methodology.
Further information on the options issued can be found in note 25.
Performance Rights
During the year ended 30 June 2022 the group issued 3 million performance rights as approved at the AGM to
Managing Director Robert Mencel. Details of the performance criteria are as follows:
- Date issued – 24th December 2021
- Date approved at AGM – 30th November 2021
-
-
Share Based Payment expense recognised in year $49,000
Fair Value of the Performance rights being $249,000 to be expensed over the vesting period was calculated
using the Black Scholes Model
The company granted shares to Managing Director Robert Mencel in line with the performance criteria as approved
at the 2021 AGM, in total 1,000,000 shares were issued for $83,000. The fair value of the share based payments were
determined based on the market price for the shares as at the grant date.
Performance
Rights
Tranche 1:
1,000,000
Vesting: Performance Conditions
Performance / vesting
Period
(a) 500,000 vesting upon a continuous period of employment
Financial year ending 2022
of 12 months with the Company;
2022 Annual Report - Page | 39
Notes to the Consolidated Financial Statements (continued)
Performance
Rights
Vesting: Performance Conditions
Performance / vesting
Period
(b) 100,000 vesting upon completion of an update of the 2018
Ardmore Project Definitive Feasibility Study;
(c) 100,000 vesting upon securing direct application phosphate
rock sales to 3 or more customers;
(d) 200,000 vesting upon securing 2 or more sales/marketing
agreements for future Ardmore Project production; and
(e) 100,000 vesting upon the Company completing a successful
capital raise of $2m or more.
Tranche 2:
1,000,000
Performance
Rights
Tranche 3:
1,000,000
Performance
Rights
(a) 500,000 vesting upon a continuous period of employment
Financial year ending 2023
of 24 months with the Company;
(b) 300,000 vesting upon shipment of more than 20,000t in trial
shipments for Ardmore;
(c) 200,000 vesting upon completion of FEED for 800ktpa
process plant for the Ardmore Project.
(a) 250,000 vesting upon a continuous period of employment
Financial year ending 2024
of 36 months with the Company;
(b) 350,000 vesting upon completing of financial closure for the
construction and operation of a 800kt pa Process Plant;
(c) 400,000 vesting upon 80% of production at the Ardmore
Project allocated by sales/marketing agreements or off take
agreements.
Performance Rights
The share based payments reserve is used to recognise the fair value of all performance rights. The movement
during the financial year was as set out below:
Opening balance as at 1 July 2021
Issued
Exercised
Lapsed
Performance rights balance at end of period
Share options
Number of rights
-
3,000,000
(1,000,000)
-
2,000,000
$
$’000
-
132
(83)
-
49
The share based payments reserve is used to recognise the fair value of options issued as share based
payments. The movement during the financial year was as set out below:he share
Opening balance as at 1 July 2021
Issued on conversion of the convertible note
Exercised
Lapsed
Unlisted options balance at end of period
Total Share Based Payment Reserve
Page | 40 – 2022 Annual Report
Number of options
40,678,400
59,545,454
(22,029,506)
-
78,194,348
$
$’000
-
9,766
-
-
9,766
9,815
Notes to the Consolidated Financial Statements (continued)
The options relating to the opening balance and those exercised during the year are free attaching options which
were granted as part of capital raises undertaken and were for nil consideration
The following share rights were outstanding as at 30th June 2021:
As at 30th June
2021
2019 Performance
Rights
Expiry date
Vesting date
Share Price Required to Vest:
26/09/2020
26/08/2020
$0.17
Rights on issue at start of year
1,310,000
Rights issued during the year
Rights exercised during the
year
-
-
Rights expired during the year
(1,310,000)
Rights on issue at end of year
-
The 2019 performance rights were issued as part of the Company’s Long Term Incentive Plan. The remaining rights at 1
July 2020 were granted on 27 August 2018 and valued using an appropriate valuation methodology at grant date with
fair value of 6.81 cents per performance right. The remaining rights expired unvested on 26 September 2020.
16.
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 2022 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 2022 the Group had $0.530 million invested in such deposits (2021: $1.370 million). The Group does not
use derivatives to mitigate these exposures.
Sensitivity Analysis
For the year ending 30th June 2022, a 1 percent increase in the effective interest rate would have resulted in an
increase in profit of $0.05 million (2021: $0.014 million).
(c) Credit risk exposures
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.
2022 Annual Report - Page | 41
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.
(f) Net fair values of financial assets and liabilities
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.
17. LEASES
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
2022
$’000
2021
$’000
-
-
-
28
-
-
-
28
Lease rentals relate to corporate and site office and accommodation. At the end of the reporting period, the
Company had a lease relating to its Corporate office. The lease officially ended in 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. This meets the definition of a short-term lease. The lease amount payable per month is
$2.5 thousand.
18. 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
2022
$’000
2021
$’000
728
55
-
83
866
654
45
-
18
717
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.
During the 2021 year, Centrex entered into a convertible securities agreement with Australia New Zealand Resources
Corporation Pty Ltd (a director related entity of Graham Chrisp). The effective date of the note was 2 June 2021 being
the date the convertible note was issued and the face value of $1,000,000 was received. The interest rate was 12%
per annum which accrues and compounds on first day of each calendar month. The convertible notes allowed for
conversion into shares at $0.022 each with a free attaching option with an exercise price of $0.05.
Page | 42 – 2022 Annual Report
Notes to the Consolidated Financial Statements (continued)
On the 1st April 2022 the Company advised the market upon that a notice of conversion was received from the
convertible note holder. Pursuant to the terms of the convertible note, the company converted the convertible
note(including all capitalised interest on the outstanding loan) into 59,545,454 ordinary shares and 59,545,454
attaching options in accordance with it terms. The total fair value at the date of conversion was $18.934 million.
Pursuant to the conditions of the convertible note, total interest accumulated on the convertible note was $340,000
of which $30,000 was paid in cash during the year leaving $310,00 subject to share and option settlement.
In 2021 total interest of $10,000 was accrued and paid with respect to the convertible note.
19. CONTINGENT ASSETS
On 22nd March 2018 the Group executed agreements to sell the Wilgerup iron ore project and Kimba Gap iron ore
project to SIMEC Mining (formerly Arrium Mining) which is a business of OneSteel Manufacturing Pty Ltd (“OMPL”).
OMPL will pay royalty streams to Centrex upon commencement of mining at each project. The royalties are capped
to a value of A$ 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.
20. 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
2022
$’000
2021
$’000
200
-
152
9
675*
-
*
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 2022 the Group had no other commitments (2021: NIL).
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% -3.5% 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.
• 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.
2022 Annual Report - Page | 43
Notes to the Consolidated Financial Statements (continued)
• 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.
21. 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
2022
$’000
2021
$’000
Cash and cash equivalents
12,848
1,331
(b) Reconciliation of cash flows from operating activities
2022
$’000
2021
$’000
Loss after income tax
(21,655)
(2,627)
Interest income
Depreciation
Performance rights expense
Exploration expenditure written off
Change in fair value of convertible note
Other
(Increase) / decrease in debtors
Increase / (decrease) in provisions
Increase / (decrease) in payables
Increase / (decrease) in payables for investing activities
Net cash used in operating activities
1
132
94
18,934
(475)
1,222
(2,691)
2,919
(1,519)
(8)
12
18
45
1,794
(55)
107
(79)
(131)
(924)
22. 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;
•
•
•
• Kimba Gap Iron Project Pty Ltd;
• Centrex Potash Pty Ltd; and
• Centrex Zinc Pty Ltd.
AgriFlex Pty Ltd (previously named Centrex
Phosphate Pty Ltd);
• Centrex QLD Exploration Pty Ltd (previously
named Port Spencer Holdings Pty Ltd);
Page | 44 – 2022 Annual Report
Notes to the Consolidated Financial Statements (continued)
23. SEGMENT REPORTING
The Group operates in one business segment; mineral exploration and one geographical segment; Australia.
24. PARENT ENTITY DISCLOSURES
As at, and throughout the year the parent company of the Group was Centrex 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
Non current assets
Total assets
Current liabilities
Non current liabilities
Total liabilities
Net assets
Equity of the parent entity
Contributed equity
Share options issues
Accumulated losses
Total equity
Company
2022
$’000
2021
$’000
(30,121)
-
(30,121)
13,932
142
14,074
2,945
7
2,952
11,122
74,816
9,815
(73,509)
11,122
(2,581)
-
(1,355)
2,583
2,583
3,407
3,407
(824)
42,564
-
(43,388)
(824)
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 20.
25 DERIVATIVE FINANCIAL INSTRUMENTS
Convertible notes payable - shares
Convertible notes payable - options
Total comprehensive income / (loss) for the period
Company
2022
$’000
2021
$’000
-
-
-
1,565
1,229
2,794
2022 Annual Report - Page | 45
Notes to the Consolidated Financial Statements (continued)
Opening balance
Issue of Convertible Note Face Value
Convertible note interest accrued
Convertible note interest paid
Fair Value movement in period
Convertible Note conversion to shares and options
Closing balance
2022
$’000
2,794
-
2021
$’000
-
1,000
340
10
(340)
18,934
(21,728)
-
(10)
1,794
-
2,794
On the 26th February 2021 at the Company's AGM, shareholders approved the issue of the convertible note to Australia
New Zealand Resources Corporation Pty Ltd (a director related entity of Graham Chrisp). At the time of the shareholder
approval it was outlined that the maximum number of shares that could be issued on conversion of the note assuming
no interest payments were made during the term of the note was 63,770,882 shares and 63,770,882 free attaching
options with a $0.05 exercise price expiring 31st December 2023.
The key terms of the Note as outlined in the notice of meeting at the date of approval were as follows:
•
•
•
•
•
•
•
the Note matures on 31 December 2023, unless conversion is exercised sooner;
the Note has a notional face value of $1.0 million;
the Note carries a coupon rate of 12% per annum in respect of the amount outstanding, if not paid, then
accrued and compounding on the first day of each calendar month;
the conversion price (and base price) of $0.022 per share;
the total amount outstanding at any point in time is the outstanding face value of $1.0 million plus the
addition of any accrued interest;
Australia New Zealand Resources Corporation Pty Ltd and/or nominee (the Subscriber) at its sole
discretion may advise in writing that the interest for the last calendar month may deem to be unpaid, in
which case the interest will be capitalised and become part of and be treated as the amount outstanding;
• Centrex must have provided a registered security over the assets of the Company in a form satisfactory to
the Subscriber and, at the sole cost of the Company, securing performance of the Company’s obligations
under the agreement;
the Note is convertible at the election of the Subscriber on any date leading up to, and including, the
maturity date into Centrex shares at the conversion price of $0.022. The Subscriber may specify the amount
to be converted in the conversion notice;
in the event that a conversion notice is issued prior to the maturity date the conversion amount shall be
adjusted to include the aggregate amount of interest that would have been payable on the conversion
amount of the Note through to the conversion date, if the conversion amount had not been converted, and
the Company had made all payments of interest as they fell due;
should there still be an amount outstanding at maturity Centrex shall pay an amount equal to the amount
outstanding to the Subscriber or its nominee;
if the Company makes a capital raising of more than $4.0 million within any period of three months, the
Subscriber will thereafter have the right to require the Company to forthwith repay either part or all of the
amount outstanding of the Note forthwith;
if a change of control of the Company occurs at any time, the Subscriber will thereafter have the right to
require the Company to forthwith repay either part or all of the amount outstanding of the Note forthwith;
•
•
•
•
• providing Centrex has fulfilled its obligations in registering a security interest over the assets of the
•
Company, nothing in the CSA shall require the Company to make payments to the Subscriber where such
payments would expose the Company to a lack of liquidity or to insolvency in which case the Subscriber
shall be entitled to rely on a non-recourse basis on the security proposed to be provided;
If the daily Volume Weighted Average Price (VWAP)per share is less than the conversion price of $0.022 on
any trading day during the term, the Subscriber may either terminate the CSA effective immediately or
convert all or any part of the Note into shares at the current VWAP; • if an event of default occurs which is not
remedied, the Subscriber may: declare the amount outstanding and all other amounts payable to be
immediately due and payable in immediately available funds; and/or exercise its conversion rights; and
Page | 46 – 2022 Annual Report
Notes to the Consolidated Financial Statements (continued)
•
the Note is unlisted but can be assigned to any affiliate, bank or financial institution, any successor entity in
connection with a merger or consolidation, and/or any acquirer of a substantial portion of the Subscriber’s
business and/or assets.
Initial recognition
At initial recognition the Group assessed AASB 9 and determined that the notes were derivative in nature as all
characteristics under this section were met. The fixed for fixed test per AASB 9 was then consequently assessed to
determine whether the notes were of an equity or liability in nature.
Pursuant to the terms of the note, if the daily VWAP is less than Base price of $0.022 at any time during the term of
the agreement, the conversion price reduces to that VWAP. The variable nature of the conversion price and hence
number of shares issued on conversion, indicates that the fixed for fixed test as noted above was failed and notes
have been recognised as a financial liability within the scope of AASB 9.
Subsequent recognition
At 30 June 2021, the Group valued the conversion feature using Monte Carlo valuation methodology and the
conversion options using a Black Scholes model. The models calculate the convertible notes value using the
following inputs:
• valuation date – 30 June 2021
• share price at valuation date- $0.048
• expiry date- 31 December 2023
• risk free rate- 0.14%
• company-specific volatility – 100%
• strike price- $0.05; and
maximum expected life- 2.5 years.
The fair value of the conversion feature and options was $2.794 m as at 30 June 2021. The change in fair value of
conversion was recognised in statement of profit loss during the year amounting to $1.794 m.
Current year
On the 29 September 2021 notice was produced by the note holder to defer payment of the interest coupon, which
triggered accrual and compounding effect of the to the face value of the note. In total a further $340,000 in interest
was accrued in the year to 30 June 2022 with $30,000 being settled in cash.
On 1st April 2022, the Company advised the market that it had received a notice of conversion from the convertible
note holder. Pursuant to the terms of the convertible note, the company converted the convertible note (including
all capitalised interest on the outstanding loan) into 59,545,454 ordinary shares and 59,545,454 attaching options in
accordance with it terms. The 59,545,454 shares and equal number of options was attributed to the note as follows:
-
-
45,454,545 shares on conversion of the face value of the convertible note ($1,000,000)
14,090,908 shares relating to capitalised interest on the convertible note ($310,000)
The fair value of the ordinary shares at conversion were determined using the closing share price on 1 April 2022
totalling $12,272,000. This amount was transferred from derivative liability to share capital.
The convertible note options were measured at fair value utilising a Black Scholes valuation model and totalled
$9,766,000. This amount was transferred from derivative liability to the share based payment reserve.
2022 Annual Report - Page | 47
Notes to the Consolidated Financial Statements (continued)
The following inputs were utilised to value the components as at the conversion date:
• valuation date – 1 April 2022
• share price at valuation date- $0.2061
• expiry date- 31 December 2023
• risk free rate- 2.15%
• company-specific volatility – 68%
• strike price- $0.05; and
maximum expected life- 1.75 years.
26. EVENTS SUBSEQUENT TO BALANCE DATE
On the 16th September 2022 the Company received correspondence from the royalty holder for the Ardmore
Phosphate Rock Project.
The Company received an invoice from Southern Cross Fertilisers Pty Ltd (“SCF”), a wholly owned subsidiary of
Incitec Pivot Limited (the Royalty Holder) requesting payment of the Extension Fee.
The Board has subsequently sought and obtained legal advice regarding the validity of the invoice.
The Company notes that the Royalty Deed includes a dispute resolution clause. The clause includes a requirement
for both parties to negotiate in good faith with a view to resolving any dispute within 21 days after the receipt of a
dispute notice, which has been submitted by Agriflex.
The Company looks forward to the matter being resolved in good faith and will keep the market informed on any
developments.
On the 27th September 2022 the Company issued 20,880,769 Performance Rights to senior executives and
employees of the Company under the terms of the Company’s Performance Rights Plan. The Performance Rights
were issued for no consideration and will not vest unless the performance conditions set by the Board have been
satisfied for each tranche for the relevant financial years, being 30 June 2023 (tranche 1), 30 June 2024 (tranche 2)
and 30 June 2025 (tranche 3).
Page | 48 – 2022 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 23 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 2022 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
2022 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 Robert Mencel
Dated at Adelaide this 30th day of September 2022
2022 Annual Report - Page | 49
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of Centrex Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Centrex Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2022, the 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, and notes to the consolidated financial
statements, including a summary of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for
the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
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‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
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Material uncertainty related to going concern
We draw attention to Note 1(b) in the financial statements, which indicates that the Group incurred a net loss of
$21,655,000 during the year ended 30 June 2022 and cash outflows from operating and investing activities of
$8,360,000. As stated in Note 1 (b), these events or conditions, along with other matters as set forth in Note 1(b),
indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets - Note 9
At 30 June 2022 the carrying value of exploration
and evaluation assets was $22,298,000.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group is
required to assess at each reporting date if there are
any triggers for impairment which may suggest the
carrying value is in excess of the recoverable value.
The process undertaken by management to assess
whether there are any impairment triggers in each
area of interest involves an element of management
judgement.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
Our procedures included, amongst others:
• obtaining the management reconciliation of
capitalised exploration and evaluation expenditure
and agreeing to the general ledger;
•
reviewing management’s area of interest
considerations against AASB 6;
• conducting a detailed review of management’s
assessment of trigger events prepared in
accordance with AASB 6 including;
−
tracing projects to statutory registers,
exploration licenses and third party
confirmations to determine whether a right of
tenure existed;
− enquiry of management regarding their
intentions to carry out exploration and
evaluation activity in the relevant exploration
area, including review of management’s
budgeted expenditure;
− understanding whether any data exists to
suggest that the carrying value of these
exploration and evaluation assets are unlikely to
be recovered through development or sale;
• assessing the accuracy of impairment recorded for
the year as it pertained to exploration interests;
• evaluating the competence, capabilities and
objectivity of management’s experts in the
evaluation of potential impairment triggers; and
• assessing the appropriateness of the related
financial statement disclosures.
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Grant Thornton Australia Limited 2
Key audit matter
How our audit addressed the key audit matter
Derivative Financial Instruments – Note 25
In June 2021, the Group issued convertible notes to
a Director related entity with a face value of
$1,000,000 following shareholder approval.
Accordingly, management were required to consider
the classification of the notes and their fair value in
accordance with AASB 132 Financial Instruments:
Presentation and AASB 9 Financial Instruments,
respectively.
The convertible note was converted including
accrued and unpaid interest on 1 April 2022 which
required a remeasurement to fair value as at that
date.
The assessments associated with the classification
and measurement of the instrument can be complex
and involve significant management judgement.
This is a key audit matter due to management
judgements and valuation complexities of the
instruments.
Our procedures included, amongst others:
• obtaining the convertible note agreement to
understand the terms and conditions of the
convertible notes;
• assessing the appropriateness of management’s
classification of the financial instruments in
accordance with AASB 132 and AASB 9;
• assessing management’s conclusions on
identification of the separate components implied
within the instrument;
• evaluating reasonableness of fair value assigned to
each component as the conversion date of the
instrument;
•
reviewing the independent legal advice received by
management in relation to the conversion of the
note and the number of equity instruments issued;
• ensuring mathematical accuracy of managements
valuation as at conversion date; and
• assessing the adequacy of disclosures in the
financial statements.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2022 but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
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Grant Thornton Australia Limited 3
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in Directors’ report for the year ended 30 June 2022.
In our opinion, the Remuneration Report of Centrex Limited, for the year ended 30 June 2022 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 30 September 2022
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Grant Thornton Australia Limited 4
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
30th September 2022
Units
% of Issued
Capital
1
2
3
4
5
DAPOP PTY LTD
110,905,672
18.168%
AUSTRALIA NEW ZEALAND RESOURCES CORPORATION PTY
LTD
59,545,454
9.754%
BAOTOU IRON & STEEL (GROUP) COMPANY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HONGMEN PTY LTD
40,399,599
23,536,015
21,900,000
6.618%
3.855%
3.587%
Distribution of equity holders
Name
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
30th September 2022
Fully paid
ordinary and
escrow shares
Employee
options / rights
plan
95
266
523
1,296
569
2,749
-
-
-
-
13
13
At 30th September 2022 there were 2,749 holders of a total of 610,453,479 fully paid ordinary shares and there were 75
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 – 2022 Annual Report
Notes to the Consolidated Financial Statements (continued)
Top 20 Holders of Ordinary and Escrow shares
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
DAPOP PTY LTD
AUSTRALIA NEW ZEALAND RESOURCES CORPORATION PTY
LTD
WISCO INTERNATIONAL RESOURCES DEVELOPMENT &
INVESTMENT LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BAOTOU IRON & STEEL (GROUP) COMPANY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
HONGMEN PTY LTD
MISS MENGJIAO ZHAO
BNP PARIBAS NOMINEES PTY LTD
VINGO HOLDINGS LTD
MR MELVIN BOON KHER POH
CS FOURTH NOMINEES PTY LIMITED
MR EWE GHEE LIM & MISS CHARLENE YULING LIM
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
MR DIETER URMERSBACH & MRS ROSMARIE URMERSBACH
JARHAMCHE PTY LTD
MRS JULIE AVOTINS
JAMARI PTY LTD
MR YAM POEY CHEW
30th September 2022
Units
110,905,672
59,545,454
% of Issued
Capital
18.168%
9.754%
40,399,599
6.618%
23,536,015
21,900,000
18,000,000
13,701,836
12,080,000
6,867,500
6,182,078
5,535,000
4,382,404
3,866,570
3,750,000
3,578,826
3,146,301
3,050,070
2,555,700
2,500,000
2,500,000
350,483,025
3.855%
3.587%
2.949%
2.245%
1.979%
1.125%
1.013%
0.907%
0.718%
0.633%
0.614%
0.586%
0.515%
0.500%
0.419%
0.410%
0.410%
57.414%
2022 Annual Report - Page | 55
Australian Securities Exchange
The Company listed on the Australian Securities
Exchange on 17 July 2006. The Home exchange is
Adelaide.
ASX Codes
Shares: CXM
Auditors
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3, 170 Frome Street
Adelaide SA 5000
Company Directory
Board of Directors
Mr Peter Hunt – Chairman
Mr Robert Mencel – Managing Director
Mr Graham Chrisp – Non-executive Director
Dr A John Parker - Non-executive Director
Company Secretary
Mr Jonathan Lindh
Principal Registered Office
Centrex 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 – 2022 Annual Report