ANNUAL REPORT
2024
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ANNUAL REPORT | 1
CONTENTS
CORPORATE DIRECTORY
Company Project:
BOARD
Apurimac Iron Ore Project (Peru)
2
Farooq Khan
Executive Chairman
William Johnson
Executive Director
Directors’ Report
7
Victor Ho
Executive Director
Remuneration Report
20
Auditor’s Independence Declaration
28
COMPANY SECRETARY
Consolidated Statement of Profit or Loss
29
Victor Ho
and Comprehensive Income
Email:
cosec@strikeresources.com.au
Consolidated Statement of Financial Position
30
REGISTERED OFFICE
Consolidated Statement of Changes in Equity
31
AND PRINCIPAL PLACE OF BUSINESS
Suite 1, Level 1,
Consolidated Statement of Cash Flows
32
680 Murray Street,
West Perth, Western Australia 6005
Notes to Consolidated Financial Statements
33
Telephone:
+61 8 9214 9700
Facsimile:
Consolidated Entity Disclosure Statement
49
Email:
Website:
+61 8 9214 9701
info@strikeresources.com.au
www.strikeresources.com.au
Directors’ Declaration
50
AUDITORS
Independent Audit Report
51
In.Corp Audit & Assurance Pty Ltd
(formerly Rothsay Audit & Assurance Pty Ltd)
List of Mineral Concessions
55
Level 1, Lincoln House
4 Ventnor Avenue
Annual Mineral Resources Statement
56
West Perth, Western Australia 6005
Website:
https://australia.incorp.asia
JORC Code Competent Persons’
57
Compliance Statements
STOCK EXCHANGE
Forward Looking Statements
58
Australian Securities Exchange
Perth, Western Australia
Additional ASX Information
59
ASX CODE
SRK
The 2024 Corporate Governance Statement
can be found at the following URL
SHARE REGISTRY
on the Company’s website:
Automic
www.strikeresources.com.au/corporate/corporate-
governance/
Level 5, 126 Phillip Street
Sydney, New South Wales 2000
GPO Box 5193
Sydney NSW 2001
Visit www.strikeresources.com.au for
Local Telephone:
1300 288 664
•
Market Announcements
Telephone:
+61 2 9698 5414
•
Financial Reports
Email:
hello@automicgroup.com.au
•
Corporate Governance
Website:
www.automic.com.au
•
Forms
•
Email Subscription
Investor Portal: https://investor.automic.com.au
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
ANNUAL REPORT | 2
Strike Resources Limited (ASX:SRK) is an ASX listed resource company which owns the high grade
Apurimac Iron Ore Project in Peru where it has exported “Apurimac Premium Lump” DSO product of ~65%
Fe. Strike also has a 27.7% (31.01 Million shares) interest in Lithium Energy Limited (ASX:LEL), which was
spun-out of Strike under a $9 Million IPO in May 2021. Lithium Energy is developing battery minerals related
assets - the Solaroz Lithium Brine Project in Argentina and the Burke and Corella Graphite Projects in
Queensland.
Apurimac Iron Ore Project (Peru)
Strike’s Apurimac Iron Ore Project in Peru is recognised as one of the highest grade, large scale magnetite
projects in the world with the potential to support the establishment of a significant iron ore operation.
Strike has completed two shipments (to Chinese and South American Steel Mills) of high-grade (+65% Fe)
Apurimac Premium Lump DSO in calendar 2021.1
The specifications of the first (35,000 tonne) shipment of Apurimac Premium Lump DSO are in Table 1.
Fe
SiO2
Al2O3
P
S
Moisture
65.99
2.76
0.65
0.059
0.09
1.06
Table 1: Apurimac Premium Lump DSO – First Shipment Analysis
The specifications of the second (15,000 tonne) shipment of Apurimac Premium Lump DSO are in Table 2.
Fe
SiO2
Al2O3
P
S
Moisture
65.28
1.64
0.88
0.052
0.09
0.62
Table 2: Apurimac Premium Lump DSO – Second Shipment Analysis
Strike notes that:
•
The Offtake Agreement2 (pursuant to which the first shipment of 35,000 tonnes to China was
undertaken) is on a CFR basis (where Strike bears the cost of shipment). As such, subsequent
shipments to China will be subject to negotiation of an acceptable price with the offtake counterparty
and securing a ship charter on terms acceptable to Strike.
•
The second shipment (of 15,000 tonnes to a South American steel mill) was made on an FOB basis
(where the buyer is responsible for the shipment cost) with a competitive market price calculated by
reference to the high grade nature of the Apurimac Lump DSO ore. This shipment was successfully
used by the buyer as an industrial trial for their steel manufacturing facility.
Strike is investigating further shipments from Peru, subject to satisfaction with a number of matters including
negotiation of an acceptable price (referenced to the benchmark iron ore price) and Strike securing sufficient
working capital to fund production to this end.
1 Refer Strike’s ASX Announcements dated 19 August 2021: Maiden Iron Ore Shipment from Peru and 29 October 2021: Second Iron
Ore Shipment from Peru Completed
2 Refer Strike’s ASX Announcement dated 14 April 2021: Peru Iron Offtake Agreement Signed with US$2 Million Prepayment
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
ANNUAL REPORT | 3
Rail and Port Infrastructure Initiatives and Development
The Peruvian Government, through the Ministry of Transport and Communications (MTC) has formally
approved an investment study that was completed to examine the viability of the proposed San Juan de
Marcona-Andahuaylas railway. 3 This railway is proposed to commence adjacent to the Company’s Apurimac
Project and terminate at the Port of San Juan de Marcona.4
Figure 1: Location of Apurimac Iron Ore Project and Proposed Andahuaylas Railway Route to Port
With the MTC having completed its approval process, the MTC has confirmed that it will now move to a
tendering and subsequent construction phase with construction scheduled to commence between 2026 and
2027 and with a targeted completion date by 2032. The Marcona-Andahuaylas Railway Project is proposed
to operate under a 40-year concession model, managed by a single operator responsible for its operation and
maintenance.5
This strategic initiative by the Peruvian Government is part of Peru's broader plan to expand its railway
network by 1,934 kilometres across six new rail networks, positioning the Marcona-Andahuaylas railway as a
national priority and one of the two most advanced rail projects in development in Peru.6
3
Refer to Ministry of Transport and Communications Press Release dated 23 July 2024: The viability of the Lima-Ica and San Juan de
Marcona - Andahuaylas railways was approved
4 Refer Strike’s ASX Announcement dated 31 July 2024: Peruvian Government Approves Viability Study for San Juan de Marcona-
Andahuaylas Railway
5
Refer to Ministry of Transport and Communications Press Release dated 5 July 2024: Minister Pérez Reyes presents priority projects
exhibited in China
6
Refer to Ministry of Transport and Communications Press Release dated 5 July 2024: Minister Pérez Reyes presents priority projects
exhibited in China
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
ANNUAL REPORT | 4
Figure 2 – Map of Peruvian Government’s planned railway network expansion (Source: MTC)
The Marcona-Andahuaylas Railway Project is projected to cost USD$8.16 billion and is proposed to be
executed under a Government to Government (G2G) scheme. Following the technical sign-off by the
Peruvian Government, the Peruvian Minister for Transport and Communications (MTC) has made a number
of positive comments highlighting the importance of the Marcona-Andahuaylas Railway Project including
confirming interest from the Chinese Government after a recent state visit to China led by President Dina
Boluarte.7 Interest in the Marcona-Andahuaylas Railway Project has also been received from governments
of Canada, France and Germany.8
Following on from the state visit of the President of Peru to China, the President of Peru has also announced
the creation of a Joint Commission between China and Peru aimed at facilitating a portfolio of Government
to Government (G2G) projects in infrastructure and services. It was also announced that a new dedicated
Ministry of Infrastructure would be created to centralize investment promotion under a single agency.9
The Peruvian Government has also awarded a contract worth approximately US$405 million to the Chinese
company, Terminal Portuario Jinzhao Perú S.A., for the construction and operation of a new Port Terminal at
San Juan de Marcona with a capacity of around 40 Million tonnes per annum (Mtpa). This port development,
in conjunction with the Marcona-Andahuaylas railway, forms a proposed integrated transport export corridor
starting from Andahuaylas Airport near Strike's Apurimac Iron Ore Project and ending at the Marcona Port
Terminal. The port's development assumes that Strike’s Apurimac Project could contribute up to 50%
(20Mtpa) of the port's total freight.
7
Refer to Ministry of Transport and Communications Press Release dated 27 June 2024: Government in China promotes US$31 billion
railway project portfolio
8
Refer to Ministry of Transport and Communications Press Release dated 5 July 2024: Minister Pérez Reyes presents priority projects
exhibited in China
9
Refer to Bloomberg Media Release dated 28 July 2024: Peru’s Boluarte Promises Infrastructure Spree in 5-Hour Speech and refer to
MSN Media Release dated 28 July 2024: Boluarte announces that China will be in charge of the largest infrastructure projects in Peru
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
ANNUAL REPORT | 5
Table 3 – PROINVERSIÓN’s Projected Port Capacity at
the New San Juan de Marcona Port Terminal10
Upon completion by the targeted 2032 date, the railway would connect Strike’s Apurimac Iron Ore Project
(Apurimac Project) directly to the new Marcona Port Terminal and potentially provide an externally funded,
high-capacity infrastructure solution for the Apurimac Project.
The advancement of port and rail initiatives by the Peruvian Government increase the Company’s confidence
in the commitment of the Peruvian Government to develop large scale infrastructure projects, such as the
proposed Marcona-Andahuaylas Railway Project. The recent study completion in particular is considered by
the Company to be a significant step forward in potentially catalysing the development of Strike’s Apurimac
Project.
Feasibility Studies
Strike completed a Pre-Feasibility Study on the Apurimac Project in 200811 (subsequently updated in 201012),
which indicated the clear potential for development of a world class iron ore project, with competitive capital
costs and very low operating costs:
•
The 2008 Pre-Feasibility Study undertaken by Snowden Mining Industry Consultants and SKM utilised
a proposed slurry pipeline configuration as the preferred transport solution (under the study). For
further details, refer to Strike’s ASX Announcement dated 23 July 2008: Prefeasibility Results Confirm
World Class Prospects in Peru;
•
Further infrastructure studies were undertaken by Ausenco Sandwell and SRK Consulting in 2010 with
the purpose to further compare the economics of a slurry pipeline versus railway infrastructure
solutions at various production levels. For further details, refer to Strike’s ASX Announcement dated
23 November 2010: Apurimac Project Update and Strike’s December 2010 Quarterly Report.
10 Refer PROVERSION Presentation dated 2 May 2024: Presentation of new port investment opportunity - New Port Terminal of San
Juan de Marcona
11 Refer Strike’s ASX Announcement dated 23 July 2008: Prefeasibility Results Confirm World Class Prospects in Peru
12 Refer Strike’s ASX Announcement dated 23 November 2010: Apurimac Project Update and Strike’s December 2010 Quarterly Report
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
ANNUAL REPORT | 6
In 2021, Ausenco completed a (high level) review of the 2008 and 2010 studies and gap and trade-off
analyses to identify opportunities to reduce project capex and increase project execution security, taking into
account current cost estimates, technology advancements (since 2010) and current/expected market
conditions.
JORC Mineral Resource
A JORC (2012) Indicated and Inferred Mineral Resource has been defined at the main Opaban 1 and
Opaban 3 concessions of 269Mt of iron ore at 57.3% Fe (142 Mt Indicated Resource at 57.8% Fe and 127
Mt Inferred Resource at 56.7% Fe)13.
The Opaban 3 Mineral Resource has been diminished by production and sales of 50,095 tonnes of lump iron
ore grading 65.78% Fe, 2.42% SiO2, 0.72% Al2O3, 0.057% P and 0.09% S.
In addition to the current JORC resource, there is significant exploration potential given the deposits are open
at depth and along strike with extensive undrilled gravity and magnetic anomalies.
13 Refer Strike’s ASX Announcement dated 20 January 2015: Apurimac Mineral Resources Updated to JORC 2012 Standard
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 7
The Directors present their report on Strike Resources Limited ABN 94 088 488 724 (Company or SRK) and
its controlled entities (the Consolidated Entity or Strike) for the financial year ended 30 June 2024 (balance
date) (financial year).
SRK is a company limited by shares that was incorporated in Western Australia and has been listed on the
Australian Securities Exchange (ASX) since 7 March 2000 (ASX Code: SRK).
The Company has prepared a consolidated financial report incorporating the entities that it controlled during
the financial year.
PRINCIPAL ACTIVITIES
Strike Resources Limited is an ASX listed resource company whose principal activities during the financial
year were:
•
the development of the Paulsens East Iron Ore Project in Western Australia (Paulsens East) (until the
Company entered into an agreement (on 22 December 2023) for the sale of the Paulsens East, which
was completed on 8 March 2024); and
•
the development of the Apurimac Iron Ore Project in Peru (Apurimac).
OPERATING RESULTS
June 2024
June 2023
Consolidated
$
$
Total revenue
5,366,077
2,013,052
Total expenses
(4,611,554)
(8,895,515)
Profit/(Loss) before tax
754,523
(6,882,463)
Income tax expense
-
-
Profit/(Loss) after tax
754,523
(6,882,463)
Total revenue includes a $5.08 million net gain on the sale of Paulsens East.
FINANCIAL POSITION
June 2024
June 2023
Consolidated
$
$
Cash
6,714,999
2,640,955
Financial assets at fair value through profit or loss
3,000
1,980
Resource projects
149,550
-
Mine development
-
15,688,267
Investment in Associate entity
-
669,878
Receivables
585,252
140,922
Other assets
402,717
465,765
Liabilities
(1,154,244)
(13,826,613)
Net assets
6,701,274
5,781,154
Issued capital
160,453,332
160,453,332
Reserves
43,955,117
43,789,520
Accumulated losses
(197,707,175)
(198,461,698)
Total equity
6,701,274
5,781,154
During the financial year, the Company completed the sale of the Paulsens East. The Company received
cash consideration of $20 million and fully discharged a $11.26 million loan at completion of the sale. There
is a $0.5 million deferred consideration component to the sale, which is recognised as a Receivable.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 8
CASH FLOWS
June 2024
June 2023
Consolidated
$
$
Net cash flow from operating activities
(2,834,443)
(1,303,939)
Net cash flow from investing activities
19,942,013
(4,207,407)
Net cash flow from financing activities
(12,992,528)
4,131,356
Net change in cash held
4,115,042
(1,379,990)
Effect of exchange rate changes on cash held
(40,998)
(185,603)
Cash held at year end
6,714,999
2,640,955
DIVIDENDS
The Directors have not declared a dividend in respect of the financial year ended 30 June 2024.
CAPITAL MANAGEMENT
Securities on Issue
The following securities were on issue as at Balance Date and currently
Class of Security
Quoted on ASX
Unlisted
Fully paid ordinary shares
283,750,000
-
Securities Incentive Plan (SIP)1 Options ($0.185, 14 February 2025)2
1,850,000
Total
283,750,000
1,850,000
The following unlisted options lapsed during the year:
Class of Unlisted Options
Exercise Price
Date of Lapse
Number of options
Broker’s Options
($0.15, 23 November 2023) 3
$0.15
30 November 20234
1,000,000
Directors’ Options
($0.185, 3 December 2023) 5
$0.185
3 December 20236
12,000,000
SIP Options
($0.185, 14 February 2025)2
$0.185
15 March 20247
1,250,000
Broker’s Options
($0.33, 3 June 2024)8
$0.33
3 June 20249
1,000,000
1
The SIP was approved by shareholders at the Company’s AGM held on 4 December 2020; a summary of the SIP is in Annexure A to
Strike's Notice of AGM and Explanatory Statement dated 20 October 2020 and released on ASX on 4 November 2020
2 Refer SRK ASX Announcement dated 18 February 2022: Notification regarding unquoted securities - SRK
3 Refer Strike’s Notice of Annual General Meeting and Explanatory Statement (Resolutions 6 to 10) dated 20 October 2020 and released
on ASX on 4 November 2020 and SRK ASX Announcements dated 4 December 2020: Results of 2020 Annual General Meeting and
4 December 2020: Proposed Issue of Securities
4 Refer SRK ASX Announcement dated 4 June 2024: Notification of cessation of securities - SRK
5 Refer Strike’s Notice of Annual General Meeting and Explanatory Statement (Resolutions 6 to 10) dated 20 October 2020 and released
on ASX on 4 November 2020 and SRK ASX Announcements dated 4 December 2020: Results of 2020 Annual General Meeting and
4 December 2020: Proposed Issue of Securities
6 Refer SRK ASX Announcements dated 4 December 2023: Lapse of Unlisted Options and 4 December 2023: Notification of Cessation
of Securities - SRK
7 Refer SRK ASX Announcement dated 22 March 2024: Notification of cessation of securities - SRK
8 Refer SRK ASX Announcement date 4 June 2021: Appendix 3G – Notification of Issue of 1M Broker Options
9 Refer SRK ASX Announcement dated 4 June 2024: Notification of cessation of securities - SRK
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 9
Securities Incentive Plan
The Company has adopted a Securities Incentive Plan (Plan or SIP) pursuant to which the Board may offer
to eligible persons the opportunity to subscribe for securities in the Company on such terms and conditions
as the Board may decide and otherwise pursuant to the rules of the Plan.10 The purpose of the Plan is to:
(a)
assist in the reward, retention, and motivation of ‘Eligible Participants’ (which includes directors11,
employees and contractors);
(b)
link the reward of Eligible Participants to shareholder value creation; and
(c)
align the interests of Eligible Participants with shareholders of the Company by providing an opportunity
to Eligible Participants to receive an equity interest in the Company in the form of securities (which
includes a share, a right to a share, an option over an issued or unissued security and a convertible
security).
REVIEW OF OPERATIONS
Paulsens East Iron Ore Project (Pilbara, Western Australia)
The Paulsens East Iron Ore Project (Paulsens East) is located in the Pilbara region of Western Australia,
~235km by road east of Onslow (and the Port of Ashburton) and ~600km by road south of Port Hedland.
In September 2022, Strike completed a maiden shipment of 66,618 tonnes of iron ore from Paulsens East,
which involved the mining of surface detrital material to produce Paulsens East Lump direct shipping iron ore
(DSO) (grading 62% Fe), which was exported to China from the Utah Point Multi-User Bulk Handling Facility
(Utah Point) at Port Hedland. Whilst the successful shipment of its first shipment of iron ore from Paulsens
East was a significant milestone for the Company, Strike determined to pause on further shipments from Utah
Point given market conditions, together with rising input costs, adversely impacting operating margins.12
Strike was also advancing the development of an export solution through the Port of Ashburton, Onslow
(located ~235km from Paulsens East, versus ~650km to Port Hedland), including via the Port of Ashburton
Consortium (PAC) with iron ore developer CZR Resources Ltd (ASX:CZR) and transhipment services
provider CSL Australia Pty Ltd, to develop a ~5 Mtpa capacity multi-user bulk loading export facility.13
On 22 December 2023, the Company entered into a Share and Asset Purchase Agreement (Agreement)
with certain parties including Miracle Iron Holdings Pty Ltd (Miracle) for the sale of 100% of the shares in
wholly-owned subsidiary, Strike Iron Ore Holdings Pty Ltd (SIOH) in consideration of a cash purchase price
of A$20.5 million.14 SIOH is the parent of Paulsens East Iron Ore Pty Ltd (PEIOPL), the owner and operator
of Paulsens East.
Given prevailing market conditions, Strike’s significant (US$7.2 million) liability owed to Good Importing
International Pty Ltd (GII)15 and the significant financial requirements of operating iron ore projects, the Board
believed that it was in the best interests of Strike shareholders to dispose of its interest in Paulsens East on
the terms negotiated under the Agreement.16
10 The SIP was approved by shareholders at the Company’s AGM held on 4 December 2020; a summary of the SIP is in Annexure A to
Strike's Notice of AGM and Explanatory Statement dated 20 October 2020 and released on ASX on 4 November 2020
11 The issue of securities to Directors and Key Management Personnel will require prior shareholder approval, as required under the
ASX Listing Rules and/or Corporations Act, as applicable.
12 Refer SRK ASX Announcement dated 30 August 2022: First Export Shipment of Paulsens East Lump Iron Ore and Future Operations
and 25 August 2022: Maiden Shipment of Paulsens East Lump Iron Ore and Operational Update
13 Refer SRK ASX Announcement dated 16 December 2022: Formation of Consortium for Development of Iron Ore Export Facility at
Port of Ashburton and CZR’s ASX Announcement dated 16 December 2022: Strategic Partnership to Develop Iron Ore Export Facility
14 Refer SRK ASX Announcement dated 3 January 2024: Proposed Divestment of Paulsens East Iron Ore Project
15 Refer SRK ASX Announcements dated 28 February 2022: Funding Secured and Production to Commence at Paulsens East Iron Ore
Project, 16 December 2022: Update on Paulsens East Project Financing and 4 April 2023: Further Update on Paulsens East Project
Financing
16 Refer also to Strike’s Notice of General Meeting, Explanatory Statement and Proxy Form dated and released on ASX 5 February 2024
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 10
Shareholders approved the disposal of Paulsens East at a General Meeting on 6 March 202417 and the
disposal was completed on 8 March 2024.
Strike received a A$2 million deposit on execution of the Agreement in December 2023 and received A$18
million at completion on 8 March 202418. Strike also fully discharged a $11.26 million (US$7.2 million loan
principal) loan (inclusive of accrued interest) owed to GII at completion. There is a $0.5 million deferred
consideration component to the sale - Strike received $0.10 million in July 2024 and $0.40 million is pending
receipt.
ASX Listing Rule Requirements
The disposal of Paulsens East (under the Agreement) was regarded by ASX as a disposal of the Company
‘main undertaking’ under Listing Rule 11.2.
ASX had previously advised that14,16:
(a)
in accordance with paragraph 4.7 of Guidance Note 12 (Significant Changes to Activities), Strike will
be afforded a period of 6 months from the date of the Agreement (being 22 December 2023) to
demonstrate to the ASX that it is compliant with Listing Rule 12.1 (which obliges a listed entity to satisfy
ASX on an ongoing basis that the level of its operations is sufficient, and its financial condition
adequate, to warrant its continued quotation of its securities); and
(b)
it will suspend trading in Strike’s securities if Strike had not demonstrated compliance with Listing Rule
12.1 to ASX’s satisfaction at the end of the 6-month period (being by 21 June 2024), with such
suspension continuing until Strike undertakes an acquisition and re-complies with Chapters 1 and
2 of the Listing Rules, which will involve, amongst other matters, the issue of a prospectus and
making a fresh application for admission to ASX.
As announced by Strike in July 202419, ASX has advised that:
•
ASX is not aware of any reason why Strike’s operations are not presently adequate to warrant the
continued quotation of its securities pursuant to Listing Rule 12.1;
•
This determination does not preclude Strike from being suspended in the future pursuant to Listing
Rule 12.1; and
•
ASX will continue to monitor Strike’s compliance with Listing Rule 12.1.
Apurimac Iron Ore Project (Peru)
(Strike – 80%)
Strike’s Apurimac Iron Ore Project in Peru is recognised as one of the highest-grade, large-scale magnetite
projects in the world with the potential to support the establishment of a significant iron ore operation.20
Strike has previously completed two shipments (to Chinese and South American Steel Mills) of high-grade
(+65% Fe) Apurimac Premium Lump shipping iron ore (DSO) in 2021.21
Under the Agreement with Miracle (referred to above), GII has also agreed to terminate the marketing agency
and offtake arrangements granted to GII in respect of Apurimac22 in consideration for Strike transferring either
directly or indirectly a 20% interest in Apurimac Ferrum S.A.C. (AF), the owner of Apurimac, to JE United Ltd
(JEL) (a nominee/associate of GII). The investment structure in respect of the 20% interest in AF is pending
finalisation and agreement with JEL. The Company notes that JEL will be called upon to contribute its (20%)
share of funding towards the ongoing ownership costs of Apurimac and the development of Apurimac
including the potential resumption of DSO mining operations.
17 Refer SRK ASX Announcement dated 6 March 2024: Results of General Meeting
18 Refer SRK ASX Announcement dated 8 March 2024: Completion of Disposal of Paulsens East Iron Ore Project
19 Refer SRK ASX Announcement dated 5 July 2024: Company Update
20 Refer SRK ASX Announcement 20 January 2015: Apurimac Mineral Resources Updated to JORC 2012 Standard
21 Refer SRK ASX Announcements dated 19 August 2021: Maiden Iron Ore Shipment from Peru and 29 October 2021: Second Iron Ore
Shipment from Peru Completed
22 Refer SRK ASX Announcement dated 14 April 2021: Peru Iron Offtake Agreement Signed with US$2 Million Prepayment
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 11
Strike has advanced the development of Apurimac during the financial year, including:
(a)
appointing a full-time CEO for Peru operations, to advance Strike’s operations in Peru, both on a short-
term basis to restart production (subject to favourable production economics being attained) together
with longer term aims to develop a more substantial iron ore operation at Apurimac;
(b)
undertaking a management site visit in February 2024 to meet with various stakeholders required for
a recommencement of mining operations, including visits to potential crushing plants and the Port,
discussions with mining services contractors, the local offices of international trading houses (who
have offered joint venture, offtake and hedging facility arrangements), owners of other nearby iron ore
projects close to Apurimac (who have put forward proposals to combine various aspects of mining
operations such as a joint crushing facility and shared trucking operations);
(c)
engaging with local community miners in relation to undertaking mining activities within the Apurimac
concessions as part of start-up activities as well as seeking to finalise trucking, crushing and Port
access arrangements for the mining and export of iron ore at Apurimac;
(d)
implementing a Community Relations strategy and programme to facilitate both a potential short-term
start-up of mining operations as well as advance the larger and more fundamental commercial
objective of expanding the current iron ore resource at Apurimac (as part of its long standing strategic
objectives since the asset was acquired in 2006) to commence long term substantial iron ore
production from Apurimac, including seeking approvals for a resource expansion drilling programme;
(e)
engaging a Geological Specialist to undertake a comprehensive review and assessment of past works
on the Apurimac Project to determine optimal locations for small-scale production and a review of
historical data to determine optimal locations and drill plans for an expansion of the current JORC
Mineral Resource20 at Apurimac;
(f)
expanding its logistics/administration support personnel (including staff based in Andahuaylas, near
the Apurimac site, located ~450kms by air from Lima, the capital of Peru);
(g)
actively engaging with Peruvian Government departments/authorities to explore opportunities for
involvement in the Government's port23 and rail24 initiatives and to identify ways to expedite the
approval process for the Company’s mining permits;
(h)
engaging with international trading houses for project financing, hedging and offtake agreement; and
(i)
engaging with traders who are interested in purchasing Apurimac iron ore on an "Ex-Mine Gate" basis.
For further details on Strike’s staged development pathway for Apurimac, refer to SRK ASX Announcement
dated 5 July 2024 entitled “Company Update”/
Investment in Lithium Energy Limited (ASX:LEL)
Lithium Energy Limited (LEL or Lithium Energy) was spun out of Strike following the successful completion
of LEL’s $9 million (at $0.20 per share) initial public offering (IPO) under a Prospectus (dated 30 March
2021).25
23 Refer:
•
SRK ASX Announcement dated 27 May 2024: Port & Rail Infrastructure Development Update in Peru
•
PROVERSION Presentation dated 2 May 2024: Presentation of new port investment opportunity - New Port Terminal of San Juan
de Marcona
•
PROVERSION Statement dated 22 March 2024: State awards the development of the project "New Port Terminal of San Juan
De Marcona
24 Refer:
•
SRK ASX Announcement dated 31 July 2024: Peruvian Government Approves Viability Study for San Juan de Marcona-
Andahuaylas Railway
•
to Bloomberg Media Release dated 28 July 2024: Peru’s Boluarte Promises Infrastructure Spree in 5-Hour Speech and refer to
MSN Media Release dated 28 July 2024: Boluarte announces that China will be in charge of the largest infrastructure projects in
Peru
•
Ministry of Transport and Communications Press Release dated 23 July 2024: The viability of the Lima-Ica and San Juan de
Marcona - Andahuaylas railways was approved’
•
Ministry of Transport and Communications Press Release dated 5 July 2024: Minister Pérez Reyes presents priority projects
exhibited in China
•
Ministry of Transport and Communications Press Release dated 27 June 2024: Government in China promotes US$31 billion
railway project portfolio
25 Refer LEL ASX Announcement released on 17 May 2021: Prospectus
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 12
As at 30 June 2024 and currently, Strike is the largest shareholder of LEL with 31,010,000 shares (27.7%)
(30 June 2023: 31,410,000 shares; 30.49%).
The LEL share price has traded within a range of $0.29 (on 20 September 2024) to $0.8295 (on 3/4 July
2023) since 1 July 2023, with a bid price of $0.37 (as at 30 June 2024) and a current closing price of $0.31
(as at 27 September 2024).
Lithium Energy Limited is an ASX listed battery minerals company which is developing its flagship Solaroz
Lithium Brine Project in Argentina and the Burke and Corella Graphite Projects in Queensland. The Solaroz
Lithium Project (LEL:90%) comprises 12,000 hectares of highly prospective lithium mineral concessions
(where a JORC Indicated and Inferred Mineral Resource of lithium has been delineated26) located
strategically within the Salar de Olaroz Basin in South America’s “Lithium Triangle” in north-west Argentina.
Lithium Energy shares the lithium rights in the Olaroz Salar basin with lithium carbonate producers Arcadium
Lithium plc (ASX:LTM) and Lithium Argentina Corporation (TSX:LAAC). Prior to the announced sale of the
Solaroz Project (settlement pending)27, Lithium Energy had completed a Scoping Study on Solaroz and had
been investigating the development of a 20/40ktpa lithium carbonate equivalent (LCE) production facility using
conventional evaporation ponds; Lithium Energy has also been evaluating direct-lithium extraction (DLE)
technologies. The Burke and Corella Graphite Projects (LEL:100%) in Queensland, Australia, contains high
grade JORC Indicated and Inferred Mineral Resources of graphite.28
On 3 April 2024, Lithium Energy and NOVONIX Limited (ASX:NVX) announced the merger of their adjoining
Burke and Mt Dromedary Queensland Natural Graphite Deposits into Lithium Energy subsidiary, Axon
Graphite Limited (Proposed ASX Code: AXG) (Axon Graphite or AXG), which will undertake a $15 Million to
$25 Million IPO and seek admission to ASX as a dedicated vertically-integrated mine to battery anode material
product manufacturing company.29
On 30 April 2024, Lithium Energy announced the sale of its interest in the Solaroz Project to a subsidiary of
CNGR Advanced Materials Co Ltd for US$63 Million (~A$97 Million30) cash; completion is subject to the
satisfaction (or waiver, as applicable) of a number of conditions precedent, including receipt of Lithium Energy
shareholder approval (which was attained on 8 March 202431), receipt of regulatory approvals (in China32 and
Argentina, as required) and receipt of environmental and concession related approvals relating to Solaroz.33
Pending completion of the sale of Solaroz, Lithium Energy will focus on advancing the Axon Graphite IPO
and securing the relevant approvals required to satisfy applicable conditions relating to the sale of Solaroz.34
Further information about Lithium Energy’s resource projects and activities are contained in their ASX
releases, including as follows:
•
30 July 2024: Quarterly Report – 30 June 2024;
•
1 May 2024: Quarterly Report – 31 March 2024; and
•
4 March 2024: Half Year Report – 31 December 2023.
Information concerning Lithium Energy may be viewed from its website: www.lithiumenergy.com.au
Lithium Energy’s market announcements may also be viewed from the ASX website (www.asx.com.au) under
ASX code “LEL”.
26 Refer LEL ASX announcement dated 29 June 2023: Significant Maiden JORC Lithium Resource of 3.3Mt LCE at Solaroz Project in
Argentina
27 Refer LEL ASX Announcement dated 30 April 2024: Sale of Solaroz Lithium Project for A$97 Million
28 Based on LEL ASX announcement released on 30 July 2024: Quarterly Reports – 30 June 2024
29 Refer LEL ASX Announcement dated 3 April 2024: Merger of Lithium Energy and NOVONIX Natural Graphite Assets and Proposed
Axon Graphite Limited Spin-Out and IPO
30 Based on an exchange rate of A$1.00 : US$0.65
31 Refer LEL ASX Announcement dated 8 August 2024: Results of General Meeting and LEL Notice of General Meeting, Explanatory
Statement and Proxy Form dated and released on ASX on 3 July 2024
32 Refer LEL ASX Announcement dated 3 June 2024: Chinese Regulatory Approvals Secured by CNGR to Acquire Solaroz Lithium
Project
33 Refer LEL ASX Announcements dated 8 August 2024: Shareholders Approve Sale of Interests in Solaroz Lithium Brine Project and
30 April 2024: Sale of Solaroz Lithium Project for A$97 Million
34 Refer LEL ASX Announcement dated 8 August 2024: Shareholders Approve Sale of Interests in Solaroz Lithium Brine Project
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 13
Other Projects
Strike may also pursue other investment opportunities in the resource sector in Australia and overseas if it is
in the interests of the Company and shareholders, subject to the results of its Apurimac operations in Peru
and the relative prospects of any new proposed project.
ASX has noted that it may require Strike to re-comply with Chapters 1 and 2 of the Listing Rules in the event
Strike proposes to undertake an acquisition or transaction that warrants the application of Chapter 11 of the
Listing Rules.
Quarterly Reports
Further information on Strike’s activities and operations during the financial year are also contained in Strike’s
Quarterly Activities and Cash Flow Reports lodged on ASX dated:
•
31 July 2024: Quarterly Report - 30 June 2024
•
30 April 2024: Quarterly Report - 31 March 2024
•
31 January 2024: Quarterly Report - 31 December 2023
•
31 October 2023: Quarterly Report - 30 September 2023
MATERIAL BUSINESS RISKS
Strike’s exploration and development operations
will be subject to the normal risks of mineral
exploration and development, and any revenues
will be subject to factors beyond Strike’s control.
The material business risks that may affect Strike
are summarised below:
Exploration Risk: Strike’s resource projects are
at various stages of exploration, evaluation and
development. There is no assurance that future
exploration will result in the discovery of an
economic resource or reserve or that it can be
economically exploited. Future exploration
activities may be affected by a range of factors
including geological conditions, limitations on
activities due to seasonal weather patterns or
adverse
weather
conditions,
unanticipated
operational and technical difficulties, difficulties in
commissioning
and
operating
plant
and
equipment, mechanical failure or plant breakdown,
unanticipated metallurgical problems which may
affect extraction costs/recovery rates, industrial
and environmental accidents, industrial disputes,
unexpected shortages and increases in the costs
of consumables, spare parts, plant, equipment
and personnel, local communities/indigenous and
existing
land/lease
holder
stakeholder
engagements, changing government regulations
and many other factors beyond the control of
Strike. Exploration and evaluation costs are
based on certain assumptions in relation to the
nature, method and timing of these activities,
which are subject to significant uncertainties and,
accordingly, the actual costs may materially differ.
Cost estimates and the underlying assumptions
may not be realised in practice, which may
materially and adversely affect Strike’s financial
performance and or position.
Resource Estimation Risk: Resource estimates
are
expressions
of
judgement
based
on
knowledge, experience and industry practice.
These estimates were appropriate when made but
may change significantly when new information
becomes available. Resource estimates which
depend on interpretations may require adjustment.
Adjustments to resource estimates could affect
Strike‘s future plans and ultimately its financial
performance. Mineral and commodity price
fluctuations, as well as increased production costs
or reduced throughput and/or recovery rates, may
render resources containing relatively lower
grades uneconomic and may materially affect
resource estimations.
Title Risk: Mining tenements are granted subject to
a number of conditions, compliance with which is
necessary to ensure continued title to those
tenements. These conditions may include payment
of annual rents, meeting prescribed expenditure
and/or work commitments, and annual reporting
requirements. Failure to meet tenement conditions
may cause loss of title to tenure and/or the imposition
of fines. Mining tenements may only be granted for
a specified term and may be subject to periodic
renewal or extension. In some cases, mining
tenements may only be renewed or extended a
limited number of times for a limited period of time.
After completing their permitted number of renewals
and extensions of term, an exploration tenement may
expire at the end of their respective term, unless an
application to convert those tenements to a mining
licence (or another form of mining tenure) is lodged
and successfully granted.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 14
The renewal or extension of the term of a granted
tenement or grant of a tenement application is also
subject to the discretion of the relevant government
official/authority or their authorised delegates (as
applicable) and may be subject to renewal/grant
conditions. Renewal/grant conditions may include
increased expenditure and/or work commitments or
compulsory relinquishment of tenement areas. Strike
cannot guarantee that renewals or extensions of its
mining tenements (where applicable) will be granted
on a timely basis, or at all. The inability to obtain the
grant of tenements, or renewals or extensions, and
the imposition of new conditions, or the inability or
failure to meet any conditions may adversely affect
the operations, financial position and/or performance
of Strike.
Feasibility and Development Risks: There is
risk associated with the successful commercial
exploitation of resource discoveries. Such
exploitation would involve securing necessary
approvals from relevant authorities that may
require conditions to be satisfied and/or the
exercise of discretions by such authorities. It may
or may not be possible for such conditions to be
satisfied or in a timely manner. Advancing
exploitation may involve the participation of other
parties/stakeholders
whose
interests
and
objectives may differ from Strike’s. There is a
complex, multidisciplinary process involved to
evaluate and assess development pathways and
undertake feasibility-related studies to support a
development proposal. Evaluations/assessments
and studies and associated technical works may
not achieve the results expected. Even if
supported by a positive feasibility study, a project
may not be successfully developed for a range of
technical, commercial and or financial reasons.
Commodity Pricing Risk: The commercial
prospects of Strike (in relation to the development
of its current iron ore projects) is dependent
principally upon the demand for iron ore and steel
products, in particular in China, which is the
predominant export market for junior iron ore
producers.
Key Personnel: In formulating its exploration and
evaluation programmes, feasibility-related studies
and development strategies, Strike relies on the
experience and expertise of its directors, senior
executives and other senior management. There
is a risk that key personnel may leave their
employment, which may adversely affect the
business, at least in the short term. Recruiting and
retaining qualified, skilled and experienced key
personnel in the minerals/commodities sectors
and geography in which Strike operates may also
be challenging in a strong and competitive
resources sector.
Future Funding: Strike’s ongoing exploration,
evaluation and development activities will require
substantial further funding in the future.
Any additional equity capital may be dilutive to
shareholders and may be undertaken at lower
issue prices than the current market price. Debt
financing, if available, may involve restrictive
covenants which limit Strike’s operations and
business strategy. There is no assurance that
appropriate funding, if and when needed, will be
available on terms satisfactory to Strike or at all.
The inability to obtain funding will adversely affect
Strike and may result in some or all of its projects
not proceeding or their scale and/or scope being
altered or defaults in licences or permits or
agreements occurring, which, if not remedied,
could result in forfeiture of its tenements.
Foreign Jurisdiction: Strike holds its interest in
the Apurimac Project in Peru through its 100%
shareholdings in Peruvian registered companies.
The overseas companies are subject to risks
normally associated with the conduct of business
in foreign countries. Risks pertaining to Peru may
include, among other things, political risk,
economic environments, disruptions to logistics,
access to infrastructure and services (water,
power and gas), labour disputes, corruption, civil
disturbances and crime, changes in law or
policies, opposition to mining from environmental
or other non-governmental organisations or
changes in political attitudes towards mining
activities.
Foreign Exchange Risk: The expenditure of
Strike is and will be in Australian, United States
and Peruvian currencies, exposing the Company
to fluctuations and volatility of the rates of
exchange between the Australian dollar, United
States dollar and Peruvian Soles as determined in
international markets. Strike does not currently
undertake any hedging of foreign currency items,
however as operations develop and expand, more
sophisticated foreign exchange risk management
strategies may be adopted.
Access Risk: There may be areas of Strike’s
projects over which indigenous rights exist or are
claimed by indigenous owners. Similarly, Strike’s
tenements may encroach on existing land or lease
holders. As such, Strike’s ability to gain access to
the tenements or to progress from the exploration
phase to the development and mining phases of
operations, may require reaching agreement with
these stakeholders to facilitate access and
development, which is not assured, on terms
satisfactory to Strike, or at all. Negotiations with
stakeholders may also result in a delay with the
development of Strike’s projects.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 15
Regulatory Risk: Strike‘s operations are subject
to various Federal, State/Provincial and local laws
and regulations, including those relating to
exploration, development and mining permit and
licence
requirements,
industrial
relations,
environment, land use, royalties, water, native
title/indigenous and cultural heritage, mine safety
and occupational work, health and safety.
Approvals, licences and permits required to
comply with such rules may be subject to the
discretion
of
the
applicable
government
officials/authorities. No assurance can be given
that Strike will be successful in maintaining such
authorisations in full force and effect without
modification or revocation. To the extent such
approvals are required and not retained or
obtained in a timely manner or at all, Strike may
be curtailed or prohibited from continuing or
proceeding with exploration and production.
Strike’s business and results of operations could
be adversely affected if applications lodged for
relevant licences are not granted.
Environmental Risk: The operations and
activities of Strike are subject to environmental
laws and regulations. Strike is unable to predict
the effect of additional environmental laws and
regulations which may be adopted in the future,
including whether any such laws or regulations
would materially increase Strike’s cost of doing
business or affect its operations in any area.
However, there can be no assurances that new
environmental
laws,
regulations
or
stricter
enforcement policies, once implemented, will not
oblige Strike to incur significant expenses and
undertake significant investments which could
have a material adverse effect on Strike’s
business, financial condition and performance.
Climate Change Risk: The operations and
activities of Strike may be subject to local or
international compliance regulations related to
climate change mitigation efforts, specific taxation
or penalties for carbon emissions or environmental
damage, and other possible restraints on industry
that may further impact Strike and its profitability.
Climate change may also cause certain physical
and environmental risks that cannot be predicted
by Strike, including events such as increased
severity of weather patterns, incidence of extreme
weather events and longer-term physical risks
such as shifting climate pattern.
Pandemic and other Public Health Risks:
Future health pandemics (such as COVID-19) and
other possible outbreaks of viruses/disease may
have a significant adverse effect on Strike’s
business. The spread of such diseases amongst
management, employees, contractors, suppliers
and logistic networks, as well as any health-
related government-imposed quarantine and
isolation requirements, may reduce the ability to
operate
and
have
detrimental
financial
implications. More broadly, Strike may also be
affected by the macroeconomic effects and likely
ensuing financial volatility in the economies where
the Company operates.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of Strike, save as otherwise disclosed in this
Directors’ Report or the financial statements and notes thereto, including:
(a)
The sale of Paulsens East, which was completed on 8 March 2024.
FUTURE DEVELOPMENTS
Strike intends to (subject to, amongst other matters, market conditions, Strike’s financial position and
commitments and the relative prospects of Strike’s resource projects) advance the evaluation and
development of its Apurimac Iron Ore Project in Peru. The likely outcomes of these activities depend on a
range of technical and economic factors (including underlying commodity prices) and also industry,
geographic and other strategy specific issues. In the opinion of the Directors, it is not possible or appropriate
to make a prediction on the results of these activities, the future course of markets or the forecast of the likely
results of Strike’s activities.
ENVIRONMENTAL REGULATION
Strike holds mineral tenements/concession licences issued by the relevant mining and environmental
protection authorities of the various countries in which it operates (from time to time). In the course of its
mineral exploration, evaluation and development activities, Strike adheres to licence conditions and
environmental regulations imposed upon it by various authorities (as applicable). Strike has complied with all
licence conditions and environmental requirements (as applicable) during the financial year and up to the
date of this report. There have been no known material breaches of Strike’s licence conditions and
environmental regulations during the financial year and up to the date of this report.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 16
BOARD OF DIRECTORS
On 5 December 2023, Malcom Richmond (appointed 25 October 2006) retired as a Non-Executive Director
of the Company.35 On behalf of the Board and all Strike shareholders, the Company would like to thank
Malcolm for his valuable contribution as a Non-Executive Director for the last 17 years, four of which years
he also acted as the Company’s Chairman (between 2011 and 2015). Malcolm has brought unparalleled
knowledge and understanding of the Australia iron ore sector to the Company and during his tenure as a
Director, has played a significant role in guiding the Company through a number of industry cycles.
On 8 March 2024, William Johnson transitioned from Managing Director to an Executive Director, after the
completion of the sale of the Paulsen East Project.36
On 27 September 2024, Matthew Hammond resigned as a Non-Executive Director of the Company.37
Matthew has been a valued Director for the past 15 years and in that time, the Board and the Company has
had the benefit of his extensive corporate and commercial experience and counsel.
Farooq Khan
Executive Chairman
Appointed
18 December 2015; Director since 1 October 2015
Qualifications
BJuris, LLB (Western Australia)
Experience
Farooq Khan is a qualified lawyer having previously practised principally in the field of
corporate law. Mr Khan has extensive experience in the securities industry, capital markets
and the executive management of ASX-listed companies. In particular, Mr Khan has guided
the establishment and growth of a number of public listed companies in the investment, mining
and financial services sector. He has considerable experience in the fields of capital raisings,
mergers and acquisitions and investments.
Special
responsibilities
Member of the Audit Committee
Member of the Remuneration and Nomination Committee
Relevant Interests in
shares and options
1,813,231 shares (held jointly)
Other current
directorships in listed
entities
Executive Chairman of:
•
Orion Equities Limited (ASX:OEQ) (since 23 October 2006)
•
Bentley Capital Limited (ASX:BEL) (since 2 December 2003)
Executive Chairman and Managing Director of:
•
Queste Communications Ltd (ASX:QUE) (since 10 March 1998)
•
Executive Director of Lithium Energy Limited (ASX:LEL) (since 14 January 2021)
35 Refer SRK ASX Announcement dated 11 December 2023: Retirement of Director
36 Refer SRK ASX Announcement dated 30 April 2024: Quarterly Reports - 31 March 2024
37 Refer SRK ASX Announcement dated 30 September 2024: Resignation of Director
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 17
William Johnson
Executive Director
Appointed
Executive Director since 8 March 2024; Managing Director between 25 March 2013 and 8
March 2024; Director since 14 July 2006
Qualifications
MA (Oxon), MBA, MAICD
Experience
William Johnson holds a Masters Degree in Engineering Science from Oxford University,
England and an MBA from Victoria University, New Zealand. His 40+ years business career
spans multiple industries and countries, with executive/CEO experience in mineral exploration
and investment (Australia, Peru, Chile, Saudi Arabia, Oman, North Africa and Indonesia),
telecommunications infrastructure investment (New Zealand, India, Thailand and Malaysia)
and information technology and Internet ventures (New Zealand, Philippines and Australia).
Mr Johnson is a highly experienced public company director and has considerable depth of
experience in corporate governance, business strategy and operations, investment analysis,
finance and execution.
Special
responsibilities
Chairman of the Remuneration and Nomination Committees (from 27 September 2024)
Relevant Interests in
shares and options
349,273 shares (held jointly)
Other current
directorships in listed
entities
Executive Director of:
•
Bentley Capital Limited (ASX:BEL) (since 1 January 2016; Director since March 2009)
•
Executive Chairman of Lithium Energy Limited (ASX:LEL) (since 14 January 2021)
Victor Ho
Executive Director and Company Secretary
Appointed
Director since 24 January 2014; Company Secretary since 30 September 2015
Qualifications
BCom, LLB (Western Australia), CTA
Experience
Victor Ho has been in Executive roles with a number of ASX-listed companies across the
investments, resources and technology sectors over the past 24+ years. Mr Ho is a Chartered
Tax Adviser (CTA) and previously had 9 years’ experience in the taxation profession with the
Australian Tax Office (ATO) and in a specialist tax law firm. Mr Ho has been actively involved
in the investment management of listed investment companies (as an Executive Director
and/or a member of the Investment Committee), the structuring and execution of a number of
corporate, M&A and international joint venture (in South America (Peru, Chile and Argentina),
Indonesia and the Middle East (Saudi Arabia and Oman) transactions, capital raisings,
resources project (debt) financing, spin-outs/demergers and IPO’s/re-listings on ASX and
capital management initiatives and has extensive experience in public company
administration, corporations’ law, ASIC/ASX compliance and investor/shareholder relations.
Special
responsibilities
Chairman of Audit Committee (from 27 September 2024)
Secretary of Audit Committee and Remuneration and Nomination Committee
Relevant Interests in
shares and options
-
Other positions held
in listed entities
Executive Director (also Company Secretary) of:
•
Orion Equities Limited (ASX:OEQ) (Secretary since 2 August 2000 and Director since 4
July 2003)
•
Queste Communications Ltd (ASX:QUE) (Secretary since 30 August 2000 and Director
since 3 April 2013)
Company Secretary of Bentley Capital Limited (ASX:BEL) (since 5 February 2004)
Company Secretary of Lithium Energy Limited (ASX:LEL) (since 14 January 2021)
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 18
Matthew Hammond
Non-Executive Director
Appointed
25 September 2009; Resigned 27 September 2024
Qualifications
BA (Hons) (Bristol)
Experience
Mr Hammond is currently a key advisor and works for a family office. Between 2011 and
2022), he was the Group Managing Director and CFO of VK Company (formerly Mail.ru
Group), a leading European Internet communication and entertainment services group, which
is listed on the London Stock Exchange. Prior to that he was Group Strategist for
Metalloinvest Holdings, where he had broad-ranging responsibilities for part of the non-core
asset portfolio and advised the Metalloinvest Board on strategic acquisitions and investments.
He began his career at Credit Suisse and was Sector Head in Equity Research and in Private
Bank Ultra High Net Worth Client Advisory advising on portfolio allocation, strategic M&A and
individual investments. As a Technology Analyst at Credit Suisse, he was ranked #1 in the
Extell and Institutional Investor surveys 8 times.
Special
responsibilities
Chairman of the Remuneration and Nomination Committees (until resignation as a Director)
Member of the Audit Committee (until resignation as a Director)
Relevant Interests in
shares and options
-
Other current
directorships in listed
entities
-
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 19
DIRECTORS' MEETINGS
The following table sets out the numbers of meetings of the Company's Directors held during the financial
year (including Directors’ circulatory resolutions), and the numbers of meetings attended by each Director of
the Company:
Board Meetings
Audit Committee
Remuneration Committee
Name of Director
Attended
Max. Possible
Meetings
Attended
Max. Possible
Meetings
Attended
Max. Possible
Meetings
Farooq Khan
13
13
1
1
-
-
William Johnson
13
13
-
-
-
-
Malcolm Richmond(a)
2
2
1
1
-
-
Matthew Hammond
13
13
1
1
-
-
Victor Ho(b)
13
13
1
1
-
-
Notes:
(a)
Mr Richmond retired as a Director on 5 December 2023.
(b)
Mr Ho attended Audit Committee meetings as Secretary of the Audit Committee
Audit Committee
The Audit Committee was established in March 2010 and currently comprises Victor Ho (as Chairman)
and Farooq Khan.
The Audit Committee has a formal charter to prescribe its objectives, duties and responsibilities,
access and authority, composition, membership requirements of the Committee and other
administrative matters. Its function includes reviewing and approving the audited annual and reviewed
half-yearly financial reports, ensuring a risk management framework is in place, reviewing and
monitoring compliance issues, reviewing reports from management and matters related to the external
auditor.
A copy of the Audit Committee Charter may be downloaded from the Company’s website:
www.strikeresources.com.au/corporate/corporate-governance/.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee was established in August 2010 and currently
comprises William Johnson (as Chairman) and Farooq Khan.
The Remuneration and Nomination Committee has a formal charter to prescribe its purpose, key
responsibilities, composition, membership requirements, powers and other administrative matters. The
Committee has a:
•
Remuneration function - with key responsibilities to make recommendations to the Board on
policy governing the remuneration benefits of the Executive Chairman and Executive Directors,
including equity-based remuneration and assist the Executive Chairman to determine the
remuneration benefits of senior management and advise on those determinations; and a
•
Nomination function - with key responsibilities to make recommendations to the Board as to
various Board matters including the necessary and desirable qualifications, experience and
competencies of Directors and the extent to which these are reflected in the Board, the
appointment of the Chairman and Managing Director, the development and review of Board
succession plans and addressing Board diversity.
A copy of the Remuneration and Nomination Committee Charter may be downloaded from the
Company’s website: www.strikeresources.com.au/corporate/corporate-governance/.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
ANNUAL REPORT | 20
This Remuneration Report details the nature and amount of remuneration for each Director and Company
Executive (being a company secretary or senior manager) (Key Management Personnel) of the Company.
The information provided under headings (1) to (8) below has been audited for compliance with section 300A
of the Corporations Act 2001 (Cth) as required under section 308(3C).
(1)
Key Management Personnel disclosed in this report
Name
Current Position
Tenure
Farooq Khan
Chairman
Chairman since 18 December 2015; Director since 1 October 2015
William Johnson
Executive Director
Executive Director since 8 March 2024; Managing Director between
25 March 2013 and 8 March 2024; Director since 14 July 2006
Victor Ho
Director and
Company Secretary
Director since 24 January 2014;
Company Secretary since 30 September 2015
Malcolm
Richmond
Non-Executive
Director
Retired as Director on 5 December 2023;
appointed Director on 25 October 2006 and served as Chairman
between 3 February 2011 and 18 December 2015
Matthew
Hammond
Non-Executive
Director
Resigned as Non-Executive Director on 27 September 2024;
appointed Director on 25 September 2009
(2)
Remuneration Policy
The Board (with guidance from the Remuneration and Nomination Committee) determines the
remuneration structure of all Key Management Personnel having regard to Strike’s strategic objectives,
scale and scope of operations and other relevant factors, including experience and qualifications,
length of service, market practice (including available data concerning remuneration paid by other listed
companies in particular companies of comparable size and nature within the resources sector in which
Strike operates), the duties and accountability of Key Management Personnel and the objective of
maintaining a balanced Board which has appropriate expertise and experience, at a reasonable cost
to the Company.
The Remuneration and Nomination Committee: A purpose of the Committee is to assist the
Executive Chairman and the Board to adopt and implement a remuneration system that is required to
attract, retain and motivate the personnel who will enable the Company to achieve long-term success.
In carrying out this ‘remuneration function’, the Committee’s key responsibilities are to:
•
make recommendations to the Board on the specific benefits to be provided to the Managing
Director/Executive Directors within the policy
•
conduct an annual review of Non-Executive Directors’ fees and determining whether the limit
on the Non-Executive Directors’ fee pool remains appropriate, and
•
assist the Executive Chairman to determine the remuneration (including equity-based
remuneration) of ‘Senior Management’ (being executive direct reports to the Executive
Chairman and other senior employees) and advise on those determinations.
A copy of the Remuneration and Nomination Committee Charter may be downloaded from the
Company’s website: www.strikeresources.com.au/corporate/corporate-governance/.
Corporate Governance Principles: The Company’s Corporate Governance Statement (CGS) also
addresses matters pertaining to the Board, Senior Management and Remuneration. The latest version
of the CGS may be downloaded from the Company’s website:
www.strikeresources.com.au/corporate/corporate-governance/.
Company Constitution: The Company’s Constitution38 also contain provisions in relation to the
remuneration of the Managing Director, Executive Directors and Non-Executive Directors.
38 Refer SRK ASX Announcement released on 1 February 2006: Constitution
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
ANNUAL REPORT | 21
Fixed Cash Short-term Employment Benefits: The Key Management Personnel of the Company
are paid a fixed amount per annum plus applicable employer superannuation contributions. The Non-
Executive Directors of the Company can be paid a maximum aggregate base remuneration of
$500,00039 per annum inclusive of employer superannuation contributions where applicable, in such
quantum and to be divided as the Board determines appropriate.
The Board has determined the following fixed cash remuneration for current Key Management
Personnel as follows (as at 30 June 2024):
(a)
Mr Farooq Khan (Executive Chairman) - a base salary of $175,000 per annum plus employer
superannuation contributions;
(b)
Mr William Johnson (Executive-Director) - a base salary of $100,000 per annum plus employer
superannuation contributions;
(c)
Mr Victor Ho (Executive Director and Company Secretary) - a base salary of $175,000 per
annum plus employer superannuation contributions; and
(d)
Mr Matthew Hammond (Non-Executive Director) - a base fee of $45,000 per annum.
Special Exertions and Reimbursements: Pursuant to the Company’s Constitution, each Director is
also entitled to receive:
•
Payment for reimbursement of all travelling, hotel and other expenses reasonably incurred by a
Director for the purpose of attending meetings of the Board or otherwise in and about the
business of the Company; and
•
In respect of Non-Executive Directors, payment for the performance of extra services or the
making of special exertions for the benefit of the Company (at the request of and with the
concurrence of the Board).
Short-Term Benefits: Relevant Key Management Personnel have an opportunity to earn annual
short-term incentive (STI) cash amounts if predefined key performance indicators (KPI’s) are achieved.
The STI/KPI’s are reviewed annually (where applicable). No STI benefits have been set for or paid to
Key Management Personnel during the financial year. During the financial year, the Company paid
STI benefits earned and resolved to be paid in the 2022 financial year.
Long-Term Benefits: The Company does not have any long-term incentive (LTI) cash bonus schemes
(or equivalent) in place for Key Management Personnel. The Company reserves the right to implement
LTI remuneration measures for Key Management Personnel if appropriate in the future.
Equity-Based Benefits: There were no equity-based benefits granted to Key Management Personnel
during the financial year. There were no shares issued as a result of the exercise of options issued to
Key Management Personnel during the financial year. The Company may propose the issue of
securities to Key Management Personnel in the future (as an equity-based incentive benefit), which
will be put to shareholders for approval at that time (as required under the ASX Listing Rules and/or
Corporations Act 2001 (Cth), as applicable).
39 As approved by shareholders at the Annual General Meeting held on 25 November 2009; refer Strike’s Notice of Annual General
Meeting released on ASX on 27 October 2009 and SRK ASX Announcement dated 25 November 2009: Results of Annual General
Meeting
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
ANNUAL REPORT | 22
Securities Incentive Plan: The Company adopted a Securities Incentive Plan (the Plan or SIP),
which was approved by shareholders at the Company’s AGM held on 4 December 2020. The purpose
of the Plan is to:
(a)
assist in the reward, retention, and motivation of ‘Eligible Participants’ (which includes
employees, Executive and Non-Executive Directors and contractors – not limited to Key
Management Personnel);
(b)
link the reward of Eligible Participants to shareholder value creation; and
(c)
align the interests of Eligible Participants with shareholders of the Company by providing an
opportunity to Eligible Participants to receive an equity interest in the Company in the form of
securities (which includes a share, a right to a share, an option over an issued or unissued
security and a convertible security).
Under the Plan, the Board may offer to eligible persons the opportunity to subscribe for such number
of securities in the Company on such terms and conditions as the Board may decide and otherwise
pursuant to the rules of the Plan. The maximum number of securities issued under the Plan is limited
to 5% of Strike’s issued share capital. A summary of the Plan is in Annexure A to the Notice of Annual
General Meeting and Explanatory Statement dated 20 October 2020 and released on ASX on 4
November 2020.
There were no SIP Options granted to Key Management Personnel during the financial year.
Post-Employment Benefits: The Company does not presently provide retirement benefits to Key
Management Personnel other than compulsory superannuation contributions. The Company notes
that shareholder approval is required where a Company proposes to make a “termination payment”
(for example, a payment in lieu of notice, a payment for a post-employment restraint and payments
made as a result of the automatic or accelerated vesting of share based payments) in excess of one
year’s “base salary” (defined as the average base salary over the previous 3 years) to a director or any
person who holds a managerial or executive office.
Performance-Related Benefits and Financial Performance of Company: Save for any applicable
STI(s), LTI(s) or equity-based benefits that may be provided to Key Management Personnel, the
remuneration of Key Management Personnel is fixed, is not dependent on the satisfaction of a
performance condition and is unrelated to the Company’s performance.
In considering the Company's performance and its effects on shareholder wealth, Directors have had
regard to the data set out below for the latest financial year and the previous four financial years.
2024
2023
2022
2021
2020
Profit/(Loss) Before Income Tax ($)
754,523
(6,882,463)
(4,589,491)
3,859,875
(1,401,713)
Basic Earnings/(Loss) per share (cents)
0.27
(2.48)
(1.70)
1.66
(0.83)
Dividends Paid (total)
-
-
-
-
-
VWAP Share Price on ASX for financial year ($)
0.052
0.10
0.17
0.176
0.051
Closing Bid Share Price on ASX at 30 June ($)
0.036
0.06
0.11
0.265
0.045
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
ANNUAL REPORT | 23
(3)
Employment Agreements
Details of the material terms of employment agreements entered by the Company with Key
Management Personnel are as follows:
Key
Management
Personnel
and Position
Held
Relevant
Date(s)
Current Base
Remuneration
Other Current Terms
Farooq Khan
(Executive
Chairman)
25 January
2021 (date of
executive
employment
agreement)
18 December
2015
(commencement
date)
1 January 2021
(date of effect of
current
remuneration)
$175,000
plus employer
superannuation
contributions
(11% of base
salary for
2023/24 and
11.5% from 1
July 2024)
•
No fixed term or fixed rolling terms of service.
•
Commitment to a minimum prescribed hours per week over the
course of a 5 day working week plus reasonable additional time
required by the Company.
•
Standard annual leave (20 days) and personal/sick leave (10 days
paid) entitlements plus entitlement to long service leave of 60 days
after 7 years of service with an additional 5 days after each year
of service thereafter.
•
Six months’ notice of termination by the Company (or payment of
six month’s salary in lieu thereof) and one month’s notice by
executive. Immediate termination without notice if executive
commits any act of serious misconduct. Employment terminates
upon cessation as officer of the Company, with entitlement to
payment of six month’s salary(save for voluntary resignation or
immediate termination for serious misconduct).
•
Permitted to continue as a Director of other existing ASX-listed
companies – concurrent role as Director of any other company is
not prohibited if it does not interfere with the proper performance
of duties.
•
Entitlement to performance-related cash bonuses as agreed with
the Company from time to time.
William
Johnson
(Executive
Director)
22 April 2013
(date of
employment
agreement)
11 March 2013
(commencement
date)
1 July 2023
(date of effect of
current
remuneration)
$100,000
plus employer
superannuation
contributions
(11% of base
salary for
2023/24 and
11.5% from 1
July 2024)
•
No fixed term or fixed rolling terms of service.
•
Standard annual leave (20 days) and personal/sick leave (10 days
paid) entitlements plus entitlement to long service leave of 60 days
after 7 years of service with an additional 5 days after each year
of service thereafter.
•
Six months’ notice of termination by executive. Company may
terminate without notice with payment of six month’s salary.
Immediate termination without notice and without payment in lieu
of notice if executive commits any serious act of misconduct.
•
Save with the agreement of the Board, permitted to be a Non-
Executive Director of no more than 2 public companies provided
that it does not compromise ability to devote the care and attention
to the Company’s affairs required by the position.
•
Entitlement to cash STI payments as set by the Board.
Victor Ho
(Executive
Director and
Company
Secretary)
25 January
2021 (date of
executive
employment
agreement)
30 September
2015
(commencement
date)
1 January 2021
(date of effect of
current
remuneration)
$175,000
plus employer
superannuation
contributions
(11% of base
salary for
2023/24 and
11.5% from 1
July 2024)
•
No fixed term or fixed rolling terms of service.
•
Commitment to a minimum prescribed hours per week over the
course of a 5 day working week plus reasonable additional time
required by the Company.
•
Standard annual leave (20 days) and personal/sick leave (10 days
paid) entitlements plus entitlement to long service leave of 60 days
after 7 years of service with an additional 5 days after each year
of service thereafter.
•
Six months’ notice of termination by the Company (or payment of
six month’s salary in lieu thereof) and one month’s notice by
executive. Immediate termination without notice if executive
commits any act of serious misconduct. Employment terminates
upon cessation as officer of the Company, with entitlement to
payment of six month’s salary(save for voluntary resignation or
immediate termination for serious misconduct).
•
Permitted to continue as a Director/Company Secretary of other
existing
ASX-listed
companies
–
concurrent
role
as
Director/Company Secretary of any other company is not
prohibited if it does not interfere with the proper performance of
duties.
•
Entitlement to performance-related cash bonuses as agreed with
the Company from time to time.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
ANNUAL REPORT | 24
(4)
Details of Remuneration of Key Management Personnel
Details of the nature and amount of each element of remuneration of each Key Management Personnel
paid or payable by the Company during the financial year are as follows:
Note:
(a)
During the financial year, the Company paid STI benefits earned and resolved to be paid in the 2022
financial year – these benefits were disclosed in the 2022 remuneration report.
(b)
Mr Richmond retired as a Director on 5 December 2023.
2023
Short-term Benefits
Post-
Employment
Benefits
Other
Long-term
Benefits
Equity-
Based
Benefits
Key
Management
Personnel
Performance
- related
Cash
salary
and fees
STI
benefits Superannuation
Long
service
leave
Shares
&
options
Total
%
$
$
$
$
$
$
Directors:
William Johnson
-
300,000
-
31,500
-
-
331,500
Farooq Khan
-
175,000
-
18,375
-
-
193,375
Malcolm Richmond
-
41,250
-
4,331
-
-
45,581
Matthew Hammond
-
45,000
-
-
-
-
45,000
Victor Ho (also
Company Secretary)
-
175,000
-
18,375
-
-
193,375
(5)
Other Benefits Provided to Key Management Personnel
No Key Management Personnel has during or since the end of the financial year, received or become
entitled to receive a benefit, other than a remuneration benefit as disclosed above, by reason of a
contract made by the Company or a related entity with the Director or with a firm of which he is a
member, or with a Company in which he has a substantial interest.
(6)
Securities held by Key Management Personnel
The number of securities in the Company held by Key Management Personnel is set below:
Shares
Key Management
Personnel
Balance at
30 June 2023
Received as part of
remuneration
Net Other
Change
Balance at
30 June 2024
Farooq Khan
1,813,231
-
-
1,813,231
William Johnson
349,273
-
-
349,273
Victor Ho
-
-
-
-
Malcolm Richmond(a)
-
-
-
-
Matthew Hammond
-
-
-
-
Note:
(a)
Mr Richmond retired as a Director on 5 December 2023.
2024
Short-term Benefits
Post-
Employment
Benefits
Other
Long-term
Benefits
Equity-
Based
Benefits
Key
Management
Personnel
Performance-
related
Cash
salary
and fees
STI
benefits(a) Superannuation
Long
service
leave
Shares
&
options
Total
%
$
$
$
$
$
$
Directors:
William Johnson
-
100,000
-
20,900
-
-
120,900
Farooq Khan
-
175,000
-
25,025
-
-
200,025
Malcolm Richmond(a)
-
19,286
-
2,121
-
-
21,407
Matthew Hammond
-
45,000
-
-
-
-
45,000
Victor Ho (also
Company Secretary)
-
175,000
-
25,025
-
-
200,025
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
ANNUAL REPORT | 25
Directors’ Options ($0.185, 3 December 2023)
During the financial year, all 12,000,000 Directors’ Options ($0.185, 3 December 2023) lapsed on their
expiry.40
Key Management Personnel
Balance at
Received as part
Net Other
Balance at
30 June 2023
of remuneration
Change
30 June 2024
Farooq Khan
3,750,000
-
(3,750,000)41
-
William Johnson
4,500,000
-
(4,500,000) 42
-
Victor Ho
2,250,000
-
(2,250,000) 43
-
Malcolm Richmond
750,000
-
(750,000) 44
-
Matthew Hammond
750,000
-
(750,000) 45
-
Notes:
(a)
The Directors’ Options were granted on 4 December 2020 (after receipt of shareholder approval at the Company’s
AGM held on 4 December 202046), each with an exercise price of $0.21, an expiry date of 2 December 2023 and
were subject to vesting conditions. These Executive Options lapsed on 3 December 2023.40
(b)
The terms and conditions of the Directors’ Options are set out in Annexure B to Strike’s Notice of Annual General
Meeting and Explanatory Statement dated 20 October 2020 and released on ASX on 4 November 2020.
(c)
The disclosures of holdings above are in accordance with the accounting standards which require disclosure of
securities held directly, indirectly or beneficially by each key management person, a close member of the family
of that person, or an entity over which either of these persons have, directly or indirectly, control, joint control or
significant influence (as defined under Accounting Standard AASB 124 Related Party Disclosures).
(7)
Engagement of Remuneration Consultants
The Company has not engaged any remuneration consultants to provide remuneration
recommendations in relation to Key Management Personnel during the financial year. The Board has
established a policy for engaging external Key Management Personnel remuneration consultants
which includes, inter alia, that the Non-Executive Directors on the Remuneration Committee be
responsible for approving all engagements of and executing contracts to engage remuneration
consultants and for receiving remuneration recommendations from remuneration consultants regarding
Key Management Personnel. Furthermore, the Company has a policy that remuneration advice
provided by remuneration consultants be quarantined from Management (who are not Directors) where
applicable.
(8)
Voting and Comments on the Remuneration Report at the 2023 AGM
At the Company’s most recent (2023) AGM, a resolution to adopt the prior year (2023) Remuneration
Report was passed on a poll with 96.1% of votes in favour of adopting the Remuneration Report.47 No
comments were made on the Remuneration Report at the 2023 AGM.
This concludes the audited Remuneration Report.
40 Refer SRK ASX Announcement dated 4 December 2023: Lapse of Unlisted Options and Notification of cessation of securities -SRK
41 Refer SRK ASX Announcement dated 5 December 2023: Change of Director’s Interest Notice – F Khan
42 Refer SRK ASX Announcement dated 5 December 2023: Change of Director’s Interest Notice – W Johnson
43 Refer SRK ASX Announcement dated 5 December 2023: Change of Director’s Interest Notice – V Ho
44 Refer SRK ASX Announcement dated 5 December 2023: Change of Director’s Interest Notice – M Hammond
45 Refer SRK ASX Announcement dated 5 December 2023: Change of Director’s Interest Notice – M Richmond
46 Refer Strike’s Notice of Annual General Meeting and Explanatory Statement (Resolutions 6 to 10) dated 20 October 2020 and released
on ASX on 4 November 2020 and SRK ASX Announcements dated 4 December 2020: Results of 2020 Annual General Meeting and
4 December 2020: Proposed Issue of Securities
47 Refer Strike’s Notice of Annual General Meeting and Explanatory Statement (Resolution 2) dated and released on ASX on 26 October
2023 and SRK ASX Announcements dated 30 November 2023: Results of 2023 Annual General Meeting
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 26
DIRECTORS’ AND OFFICERS’ INSURANCE
The Company insures Directors and Officers against liability they may incur in respect of any wrongful acts
or omissions made by them in such capacity (to the extent permitted by the Corporations Act 2001 (Cth))
(D&O Policy). Details of the amount of the premium paid in respect of the insurance policies are not disclosed
as such disclosure is prohibited under the terms of the contract.
DIRECTORS’ AND OFFICERS’ DEEDS
In addition to the rights of indemnity provided under the Company’s Constitution (to the extent permitted by
the Corporations Act 2001 (Cth)), the Company has also entered into a deed with each of the Directors and
the Company Secretary (Officer) to regulate certain matters between the Company and each Officer, both
during the time the Officer holds office and after the Officer ceases to be an officer of the Company, including
the following matters:
•
The Company’s obligation to indemnify an Officer for liabilities or legal costs incurred as an officer of
the Company (to the extent permitted by the Corporations Act 2001 (Cth)); and
•
Subject to the terms of the deed and the Corporations Act 2001 (Cth), the Company may advance
monies to the Officer to meet any costs or expenses of the Officer incurred in circumstances relating
to the indemnities provided under the deed and prior to the outcome of any legal proceedings brought
against the Officer.
LEGAL PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of a court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of such proceedings. The Company was not a party to any such proceedings during and
since the financial year.
AUDITOR
Details of the amounts paid or payable to the Auditor for audit and non-audit services provided during the
financial year are set out below:
Audit & Review Fees
Non-Audit Services
Total
Auditor
$
$
$
In.Corp Audit & Assurance Pty Ltd
28,700
-
28,700
On 15 January 2024, Rothsay Audit & Assurance Pty Ltd ABN 14 129 769 151 changed its name to In.Corp
Audit & Assurance Pty Ltd.
In.Corp Audit & Assurance Pty Ltd continues in office in accordance with section 327C of the Corporations
Act 2001 (Cth).
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
ANNUAL REPORT | 27
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act
2001 (Cth) forms part of this Directors Report and is set out on page 28. This relates to the Independent
Auditor’s Report, where the Auditor states that they have issued an independence declaration.
EVENTS SUBSEQUENT TO BALANCE DATE
The Directors are not aware of any matters or circumstances at the date of this Directors’ Report, other than
those referred to in this Directors’ Report or the financial statements or notes thereto (in particular Note 25),
that have significantly affected or may significantly affect the operations, the results of operations or the state
of affairs of the Company in subsequent financial years.
Signed for and on behalf of the Directors in accordance with a resolution of the Board,
Farooq Khan
Executive Chairman
30 September 2024
In.Corp Audit & Assurance Pty Ltd
ABN 14 129 769 151
Level 1
6-10 O’Connell Street
SYDNEY NSW 2000
Suite 11, Level 1
4 Ventnor Avenue
WEST PERTH WA 6005
GPO BOX 542
SYDNEY NSW 2001
T +61 2 8999 1199
E team@incorpadvisory.au
W incorpadvisory.au
To the Directors of Strike Resources Limited
As lead auditor of Strike Resources Limited for the year ended 30 June
2024, I declare that, to the best of my knowledge and belief, there have
been:
•
no contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the audit; and
•
no contraventions of any applicable code of professional conduct in
relation to the audit.
This declaration is in relation to Strike Resources Limited and the
entities it controlled during the year.
In.Corp Audit & Assurance Pty Ltd
Daniel Dalla
Director
Sydney, 30 September 2024
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION
307C OF THE CORPORATIONS ACT 2001
Liability limited by a scheme approved under Professional Standards Legislation
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2024
Note
2024
2023
REVENUE
2
$
$
Other income
Net gain on sale of subsidiaries
5,077,850
-
Net gain on financial assets at fair value through profit or loss
163,797
1,800,616
Interest revenue
124,430
15,030
Other income
-
197,406
TOTAL REVENUE AND OTHER INCOME
5,366,077
2,013,052
EXPENSES
3
Share of Associate entity's net loss
(800,041)
(4,311,597)
Mining expenses
(758,291)
(527,174)
Personnel expenses
(1,207,475)
(1,692,914)
Corporate expenses
(476,569)
(325,711)
Occupancy expenses
(46,972)
(78,724)
Finance expenses
(763,913)
(1,115,608)
Foreign exchange loss
(238,070)
(395,055)
Administration expenses
(320,223)
(448,732)
PROFIT/(LOSS) BEFORE INCOME TAX
754,523
(6,882,463)
Income tax expense
5
-
-
PROFIT/(LOSS) FOR THE YEAR
754,523
(6,882,463)
OTHER COMPREHENSIVE INCOME
Other Comprehensive Income, Net of Tax
Exchange differences on translation of foreign operations
(44,566)
(530,800)
Share of other comprehensive loss of associate
210,163
41,007
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
920,120
(7,372,256)
Basic and diluted loss per share (cents)
6
0.27
(2.48)
EARNINGS/(LOSS) PER SHARE FOR LOSS ATTRIBUTABLE TO
THE ORDINARY EQUITY HOLDERS OF THE COMPANY:
ANNUAL REPORT | 29
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
as at 30 June 2024
Note
2024
2023
$
$
CURRENT ASSETS
Cash and cash equivalents
7
6,714,999
2,640,955
Financial assets at fair value through profit or loss
3,000
1,980
Receivables
10
585,252
140,922
Other current assets
366,506
386,298
TOTAL CURRENT ASSETS
7,669,757
3,170,155
NON-CURRENT ASSETS
Investment in Associate entity
21
-
669,878
Resource project
11
149,550
-
Mine development
12
-
15,688,267
Property, plant and equipment
36,211
79,467
TOTAL NON-CURRENT ASSETS
185,761
16,437,612
TOTAL ASSETS
7,855,518
19,607,767
CURRENT LIABILITIES
Payables
13
883,074
1,987,733
Provisions
14
271,170
1,032,760
TOTAL CURRENT LIABILITIES
1,154,244
3,020,493
NON-CURRENT LIABILITIES
Borrowings
13
-
10,806,120
TOTAL NON-CURRENT LIABILITIES
-
10,806,120
TOTAL LIABILITIES
1,154,244
13,826,613
NET ASSETS
6,701,274
5,781,154
EQUITY
Issued capital
15
160,453,332
160,453,332
Reserves
16
Profits reserve
28,968,834
28,968,834
Share-based payments reserve
13,402,658
13,402,658
Foreign currency translation reserve
1,583,625
1,418,028
Accumulated losses
(197,707,175)
(198,461,698)
TOTAL EQUITY
6,701,274
5,781,154
ANNUAL REPORT | 30
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
For the year ended 30 June 2024
#
$
$
$
$
$
$
BALANCE AT 1 JUL 2022
159,420,982
13,402,658
24,402,692
1,907,821
(187,013,093)
12,121,060
Loss for the year
-
-
-
-
(6,882,463)
(6,882,463)
Profits reserve transfer
4,566,142
(4,566,142)
-
Other comprehensive income
-
-
-
(489,793)
-
(489,793)
-
-
4,566,142
(489,793)
(11,448,605)
(7,372,256)
Issue of shares
1,100,000
-
-
-
-
1,100,000
Cost of issued shares
(67,650)
-
-
-
-
(67,650)
BALANCE AT 30 JUN 2023
160,453,332
13,402,658
28,968,834
1,418,028
(198,461,698)
5,781,154
BALANCE AT 1 JUL 2023
160,453,332
13,402,658
28,968,834
1,418,028
(198,461,698)
5,781,154
Profit for the year
-
-
-
-
754,523
754,523
Other comprehensive income
-
-
-
165,597
-
165,597
-
-
-
165,597
754,523
920,120
Transactions with owners
in their capacity as owners:
-
-
-
-
-
-
BALANCE AT 30 JUN 2024
160,453,332
13,402,658
28,968,834
1,583,625
(197,707,175)
6,701,274
Total comprehensive income
for the year
Total comprehensive income
for the year
Share-based
payments
reserve
Accumulated
losses
Total
Issued capital
Foreign
currency
translation
reserve
Profits
reserve
ANNUAL REPORT | 31
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CASH FLOWS
For the year ended 30 June 2024
2024
2023
Note
$
$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
(2,627,985)
-
Payments for resource projects
(206,458)
-
Payments for mining production
-
(1,501,345)
Other receipts
-
197,406
NET CASH USED IN OPERATING ACTIVITIES
7(a)
(2,834,443)
(1,303,939)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
124,430
15,030
Proceeds from disposal of subsidiaries
20,000,000
-
Pre-production receipts from sale of iron ore
-
8,978,796
Payment for mine development
(425,194)
(15,599,877)
Payment for purchases of office equipment
-
(1,356)
Proceeds from realisation of share investments
242,777
2,400,000
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES
19,942,013
(4,207,407)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan repayment to third party
(11,051,866)
-
Loan from third party
-
3,099,006
Loan interest repayment
(1,940,662)
-
Issue of shares
-
1,100,000
Cost of issuing shares
-
(67,650)
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES
(12,992,528)
4,131,356
NET INCREASE/(DECREASE) IN CASH HELD
4,115,042
(1,379,990)
Cash and cash equivalents at beginning of financial year
2,640,955
4,206,548
Effect of exchange rate changes on cash held
(40,998)
(185,603)
CASH AND CASH EQUIVALENTS AT END
OF FINANCIAL YEAR
7
6,714,999
2,640,955
ANNUAL REPORT | 32
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the financial year ended 30 June 2024
ANNUAL REPORT | 33
1.
ABOUT THIS FINANCIAL REPORT
1.1
Background
This financial report covers the consolidated financial
statements of the consolidated entity consisting of Strike
Resources Limited (ASX:SRK) (the Company or SRK), its
subsidiaries and investments in associates (the Consolidated
Entity or Strike). The financial report is presented in the
Australian currency.
Strike Resources Limited is a company limited by shares
incorporated in Australia and whose shares are publicly traded
on the Australian Securities Exchange (ASX).
These financial statements have been prepared on a
streamlined basis where key information is grouped together
for ease of understanding and readability. The notes include
information which is required to understand the financial
statements and is material and relevant to the operations,
financial position and performance of the Consolidated Entity.
Information is considered material and relevant if, for example:
(a)
the amount in question is significant because of its size
or nature;
(b)
it is important for understanding the results of the
Consolidated Entity;
(c)
it helps to explain the impact of significant changes in
the Consolidated Entity’s business; or
(d)
it relates to an aspect of the Consolidated Entity’s
operations that may be important to its future
performance.
The notes to the financial statements are organised into the
following sections:
(a)
Key Performance: Provides a breakdown of the key
individual line items in the statement of Profit or Loss
and other comprehensive income that is most
relevant
to
understanding
performance
and
shareholder returns for the year:
Notes
2
Revenue
3
Expenses
4
Segment information
5
Tax
6
Earnings/(Loss) per share
(b)
Financial Risk Management: Provides information
about the Consolidated Entity’s exposure and
management of various financial risks and explains
how these affect the Consolidated Entity’s financial
position and performance:
Notes
7
Cash and cash equivalents
8
Financial risk management
9
Fair value measurement of financial
instruments
(c)
Other Assets and Liabilities: Provides information
on other balance sheet assets and liabilities that do
materially affect performance or give rise to material
financial risk:
Notes
10
Receivables
11
Resource project
12
Mine development
13
Payables
14
Provisions
(d)
Capital Structure: This section outlines how the
Consolidated Entity manages its capital structure and
related financing costs (where applicable), as well as
capital adequacy and reserves. It also provides
details on the dividends paid by the Company:
Notes
15
Issued capital
16
Reserves
17
Shared-based payments
18
Capital risk management
(e)
Consolidated Entity Structure: Provides details and
disclosures relating to the parent entity of the
Consolidated Entity, controlled entities, investments
in associates and any acquisitions and/or disposals of
businesses in the year. Disclosure on related parties
is also provided in the section:
Notes
19
Parent entity information
20
Investment in controlled entities
21
Investment in associate entity
22
Related party transactions
(f)
Other: Provides information on items which require
disclosure to comply with Australian Accounting
Standards and other regulatory pronouncements
however,
are
not
considered
significant
in
understanding the financial performance or position of
the Consolidated Entity:
Notes
23
Auditor’s remuneration
24
Contingencies
25
Events occurring after the reporting period
Significant and other accounting policies that summarise the
measurement basis used and presentation policies and are
relevant to an understanding of the financial statements are
provided throughout the notes to the financial statements.
1.2
Basis of Preparation
These general purpose financial statements have been
prepared in accordance with Australian Accounting Standards,
other
authoritative
pronouncements
of the
Australian
Accounting
Standards
Board,
Australian
Accounting
Interpretations and the Corporations Act 2001 (Cth). The
Company is a for-profit entity for the purpose of preparing the
financial statements.
Compliance
with
International
Financial
Reporting
Standards (IFRS)
The consolidated financial statements of the Consolidated
Entity comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards
Board (IASB).
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the financial year ended 30 June 2024
ANNUAL REPORT | 34
Reporting Basis and Financial Statement Presentation
The financial report has been prepared on a going concern and
accrual basis and is based on historical costs modified by the
revaluation of financial assets and financial liabilities for which
the fair value basis of accounting has been applied.
The principal accounting policies adopted in the preparation of
these financial statements have been consistently applied to
all the years presented, unless otherwise stated.
1.3
Principles of Consolidation
The consolidated financial statements incorporate the assets
and liabilities of the Company as at 30 June 2024 and the
results of its subsidiaries for the year then ended. The
Company and its subsidiaries are referred to in this financial
report as Strike or the Consolidated Entity.
All inter-company balances and transactions between entities
in the Consolidated Entity, including any unrealised profits or
losses, have been eliminated on consolidation.
1.4
Comparative Figures
Where required by the Accounting Standards, comparative
figures have been adjusted to conform to changes in
presentation for the current financial period.
1.5
New, revised or amending Accounting Standards
and Interpretations adopted
The Consolidated Entity has adopted all of the new, revised or
amending Accounting Standards and Interpretations issued by
the AASB that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or
Interpretations that are not mandatory have not been early
adopted. These are not expected to have a material impact on
the Consolidated Entity’s financial statements.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
2.
REVENUE
2024
2023
$
$
Other income
Net gain on sale of subsidiaries
5,077,850
-
Net gain on financial assets at fair value through profit or loss
163,797
1,800,616
Interest revenue
124,430
15,030
Other income
-
197,406
5,366,077
2,013,052
3.
EXPENSES
Share of Associate entity's net loss
800,041
4,311,597
Mine development expenses
279,589
527,174
Write off of tenements sold
478,702
-
Personnel expenses
Salaries, fees and employee benefits
1,106,650
1,548,277
Superannuation
100,825
144,637
Corporate expenses
Professional fees
224,387
85,322
ASX and CHESS fees
38,906
61,124
ASIC fees
6,893
7,291
Accounting, taxation and related administration
161,451
124,558
Audit
28,700
32,000
Share registry
9,668
12,072
Other corporate expenses
6,564
3,344
Occupancy expenses
46,972
78,724
Finance expenses
763,913
1,115,608
Foreign exchange loss/(gain)
238,070
395,055
Administration expenses
Insurance
75,052
102,365
Office administration
57,322
65,196
Travel, accommodation and incidentals
44,195
4,730
Depreciation
40,093
84,264
Other administration expenses
103,561
192,177
4,611,554
8,895,515
The Consolidated Entity's operating profit/(loss) before income tax includes the
following items of revenue:
The Consolidated Entity's operating profit/(loss) before income tax includes the
following items of expenses:
ANNUAL REPORT | 35
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
4.
SEGMENT INFORMATION
Peru
Australia
Total
$
$
$
Other
-
5,366,077
5,366,077
Total segment revenues and other income
-
5,366,077
5,366,077
Share of Associate entity's net loss
-
800,041
800,041
Mining expenses
99,878
658,413
758,291
Personnel expenses
48,298
1,159,177
1,207,475
Corporate expenses
61,955
414,614
476,569
Finance expenses
1,577
762,336
763,913
Depreciation expense
2,395
37,698
40,093
Other expenses
(9,410)
574,582
565,172
Total segment profit/(loss)
(204,693)
959,216
754,523
Adjusted EBITDA
(202,298)
1,757,787
1,555,489
Total segment assets
576,377
7,279,141
7,855,518
Total segment liabilities
149,142
1,005,102
1,154,244
Other
-
2,013,052
2,013,052
Total segment revenues
-
2,013,052
2,013,052
Share of Associate entity's net loss
-
4,311,597
4,311,597
Mining expenses
128,506
398,668
527,174
Personnel expenses
4,304
1,688,610
1,692,914
Corporate expenses
78,774
246,937
325,711
Finance expenses
2,670
1,112,938
1,115,608
Depreciation expense
-
84,264
84,264
Other expenses
(137,091)
975,338
838,247
Total segment loss
(77,163)
(6,805,300)
(6,882,463)
Adjusted EBITDA
(77,163)
(5,617,790)
(5,694,953)
Total segment assets
427,527
19,180,240
19,607,767
Total segment liabilities
197,539
13,629,074
13,826,613
Accounting policy
2023
The operating segments are reported in a manner consistent with the internal reporting provided to the Executive
Chairman. The Executive Chairman is responsible for allocating resources and assessing performance of the
operating segments and has considered the business and geographical perspectives of the operating results and
determined that the Consolidated Entity operated only in Australia and Peru during the financial year.
2024
The assets and liabilities in relation to wholly-owned subsidiaries, Strike Iron Ore Holdings Pty Ltd and Paulsens
East Iron Ore Pty Ltd, which were sold on 8 March 2024 pursuant to an agreement dated 22 December 2023
(refer Note 12), were not allocated to an operating segment and is within the Australian segment.
ANNUAL REPORT | 36
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
5.
TAX
2024
2023
(a)
The components of tax expense comprise:
$
$
Current tax
-
-
Deferred tax
-
-
-
-
(b)
226,357
(2,064,739)
Adjust tax effect of:
Non-deductible expenses
71,229
34,139
Current year tax losses not recognised
-
2,030,600
Prior year tax losses utilised
(297,586)
-
Income tax attributable to entity
-
-
(c)
Unrecognised deferred tax balances
Unrecognised deferred tax asset - revenue losses
9,797,848
10,015,779
Unrecognised deferred tax asset - other
4,623,503
4,623,503
14,421,351
14,639,282
Critical accounting judgement and estimate
6.
EARNINGS/(LOSS) PER SHARE
2024
2023
cents
cents
Basic and diluted earnings/(loss) per share
0.27
(2.48)
Net profit/(loss) after income tax
754,523
(6,882,463)
Shares
Shares
Weighted average number of ordinary shares
283,750,000
277,157,534
7.
CASH AND CASH EQUIVALENTS
2024
2023
$
$
Cash at bank
6,714,999
2,640,955
The prima facie tax on operating loss before income tax is reconciled
to the income tax as follows:
Prima facie tax payable on operating loss before income tax at 30%
(2023: 30%)
Deferred tax assets have not been recognised as, in the Directors' opinion, it is not probable that future taxable
profit will be available against which the Consolidated Entity can utilise the benefits. The utilisation of revenue and
capital tax losses are subject to compliance with taxation legislation.
The following represents the profit/(loss) and weighted average number of
shares used in the EPS calculations:
ANNUAL REPORT | 37
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
7.
CASH AND CASH EQUIVALENTS (continued)
2024
2023
(a)
$
$
Profit/(Loss) after income tax
754,523
(6,882,463)
Add non-cash items:
Depreciation
40,093 84,264
Write off of equipment
81 -
Write off of tenements sold
478,702 -
Share of Associate entity's net loss
800,041 4,311,597
Net gain on sale of subsidiairies
(5,077,850) -
Net gain on financial assets at fair value through profit or loss
(163,797) (1,800,616)
Adjustment for movement in foreign exchange
238,070
395,055
Changes in assets and liabilities:
Receivables
(68,760)
161,193
Other current assets
19,792
(5,217)
Mine development
(217,819)
1,219,336
Payables
363,198
4,970
Provisions
(761,590)
104,696
Loan from third party
760,873
1,103,246
(2,834,443)
(1,303,939)
8.
FINANCIAL RISK MANAGEMENT
2024
2023
Note
$
$
Cash and cash equivalents
7
6,714,999
2,640,955
Financial assets at fair value through profit or loss
3,000
1,980
Receivables
585,252
140,922
7,303,251
2,783,857
Payables
13
(883,074)
(1,987,733)
Loan from third party
13
-
(10,806,120)
Net financial assets
6,420,177
(10,009,996)
Reconciliation of operating profit/(loss) after income tax to net cash
used in operating activities
The Consolidated Entity's financial instruments consist of deposits with banks, receivables and payables. The
Consolidated Entity's financial instruments are subject to market (which includes interest rate and foreign
exchange risk), credit and liquidity risks.
The Board is responsible for the overall internal control framework (which includes risk management) but no cost-
effective internal control system will preclude all errors and irregularities. The system is based, in part, on the
appointment of suitably qualified management personnel. The effectiveness of the system is continually reviewed
by management and at least annually by the Board.
The financial receivables and payables of the Consolidated Entity in the table below are due or payable within 30
days. The Consolidated Entity holds the following financial assets and liabilities:
ANNUAL REPORT | 38
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
8.
FINANCIAL RISK MANAGEMENT (continued)
(a)
Market risk
(i)
Commodity price risk
(ii)
Foreign exchange risk
2024
2023
USD
USD
Cash and cash equivalents
55,746
858,130
Loan from third party
-
(7,991,002)
Payables
(149,142)
(134,432)
Net financial assets/(liabilities)
(93,396)
(7,267,304)
2023
2024
2023
$
$
$
Increase 10%
(726,730)
(9,340)
(726,730)
Decrease 10%
726,730
9,340
726,730
(9,340)
2024
$
9,340
The Consolidated Entity is exposed to commodity price risk whereby fluctuations in the prices of
commodities (i.e. iron ore), driven by market factors, can affect its financial performance. Volatile
fluctuations in commodity prices creates significant business challenges that affects credit availability,
production costs and product pricing. This price volatility creates an imperative for the Consolidated
Entity to manage the impact of commodity price fluctuations across its value chain to effectively manage
its financial performance and profitability.
The Consolidated Entity operates internationally and is exposed to foreign exchange risk arising from
various currency exposures, primarily with respect to the US dollar and Peruvian Nuevo Soles. Foreign
exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the Consolidated Entity's functional currency. The risk is
measured using sensitivity analysis and cash flow forecasting. The Consolidated Entity has a policy of
generally not hedging foreign exchange risk and therefore has not entered into any hedging against
movements in foreign currencies against the Australian dollar, including forward exchange contracts, as
at the reporting date and is currently fully exposed to foreign exchange risk. The Consolidated Entity's
exposure to foreign exchange risk expressed in US dollars at the reporting date are as follows:
Market risk is the risk that the fair value and/or future cash flows from a financial instrument or asset will
fluctuate as a result of changes in market factors. Market risk comprises of foreign exchange risk from
fluctuations in foreign currencies and interest rate risk from fluctuations in market interest rates.
Impact on equity
The Consolidated Entity has performed a sensitivity analysis on its exposure to exchange risk.
Management's assessment is based upon an analysis of current and future market positions. The
analysis (below) demonstrates the effect on the current year results and equity if the Australian dollar
strengthened or declined by 10% against the foreign currency detailed above.
Impact on post-tax profit
ANNUAL REPORT | 39
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
8.
FINANCIAL RISK MANAGEMENT (continued)
(a)
Market risk (continued)
(iii)
Interest rate risk
2023
2024
2023
$
$
$
Increase by 25bps
6,602
16,787
6,602
Decrease by 25bps
(6,602)
(16,787)
(6,602)
(b)
(c)
Credit risk
2024
2023
Cash and cash equivalents
$
$
AA-
6,658,290
2,601,000
No external credit rating available
56,709
39,955
6,714,999
2,640,955
Receivables (due within 30 days)
No external credit rating available
585,252
140,922
2024
$
16,787
(16,787)
Credit risk refers to the risk that a counterparty under a financial instrument will default (in whole or in part) on
its contractual obligations resulting in financial loss to the Consolidated Entity. Credit risk arises from cash
and cash equivalents and deposits with banks and financial institutions, including outstanding receivables
and committed transactions. Concentrations of credit risk are minimised primarily by management carrying
out all market transactions through recognised and creditworthy brokers and the monitoring of receivable
balances. The Consolidated Entity's business activities do not necessitate the requirement for collateral as a
means of mitigating the risk of financial loss from defaults.
The credit quality of the financial assets are neither past due nor impaired and can be assessed by reference
to external credit ratings or to historical information about counterparty default rates. The maximum exposure
to credit risk at reporting date is the carrying amount of the financial assets as summarised below:
Liquidity risk
Liquidity risk is the risk that the Consolidated Entity will encounter difficulty in meeting obligations associated
with financial liabilities. The Consolidated Entity's non-cash assets can be realised to meet trade and other
payables arising in the normal course of business. The financial liabilities disclosed in the table above have a
maturity obligation of not more than 30 days.
Impact on post-tax profit
Impact on equity
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in
market interest rates. The Consolidated Entity's exposure to market risk for changes in interest rates
relate primarily to investments held in interest bearing instruments. The weighted average interest rate
of the cash at bank for the year for the table below is 4.19% (2023: 0.4%).
The table (below) illustrates the sensitivity of profit and equity to a reasonably possible change in
interest rates based on observation of current market conditions. The calculations are based on a
change in the average market interest rate and the financial instruments that are sensitive to changes in
interest rates.
ANNUAL REPORT | 40
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
9.
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
Fair value hierarchy
(i)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
(ii)
(iii)
Level 2
Level 3
Total
Listed securities at fair value
$
$
$
2024
-
-
3,000
2023
-
-
1,980
There have been no transfers between the levels of the fair value hierarchy during the financial year.
(a)
Valuation techniques
(b)
Fair values of other financial assets and liabilities
2024
2023
Note
$
$
Cash and cash equivalents
7
6,714,999
2,640,955
Receivables
10
585,252
140,922
7,300,251
2,781,877
Payables
13
(883,074)
(12,793,853)
6,417,177
(10,011,976)
10.
RECEIVABLES
2024
2023
$
$
Deferred consideration
500,000
-
Deposits
24,362
60,855
Other receivables
60,890
80,067
585,252
140,922
Risk exposure
The Consolidated Entity’s exposure to credit and interest rate risks is discussed in Note 8.
The fair value of the listed securities traded in active markets is based on closing bid prices at the end of the
reporting period. These investments are included in Level 1.
The fair value of any assets that are not traded in an active market are determined using certain valuation
techniques. The valuation techniques maximise the use of observable market data where it is available, or
independent valuation and rely as little as possible on entity specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in Level 2. If one or more of
the significant inputs is not based on observable market data, the instrument is included in Level 3.
1,980
Due to their short-term nature, the carrying amounts of cash, current receivables and current payables is
assumed to approximate their fair value.
3,000
AASB 13 (Fair Value Measurement) requires disclosure of fair value measurements by level of the following fair
value measurement hierarchy:
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices); and
$
Level 1
Financial assets at fair value through
profit or loss:
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
ANNUAL REPORT | 41
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
11.
RESOURCE PROJECT
2024
2023
$
$
Opening Balance
-
-
Capitalised costs
149,550
-
Closing Balance
149,550
-
12.
MINE DEVELOPMENT
Mine development expenditure
-
15,688,267
Movements in Mine development expenditure
Opening balance
15,688,267
9,890,168
Mine development costs
110,439
14,026,895
Write off of tenements sold
(15,798,706)
-
Asset retirement costs
-
750,000
Pre- production receipts from sale of iron ore
-
(8,978,796)
Closing balance
-
15,688,267
13.
PAYABLES
2024
2023
Current
$
$
Trade payables
412,922
292,656
Loan from third party
-
1,186,979
Directors' short term incentive benefit
-
90,000
Other creditors and accruals
470,152
418,098
883,074
1,987,733
Non-current
Loan from third party
-
10,806,120
Loan from third party
The Consolidated Entity had entered into a project finance loan facility agreement to borrow US$7.2 million to fund
the Stage 1 Production at the Paulsens East Iron Ore Project (Facility). The Facility (comprising US$7.2 million
principal and US$0.133 million accrued interest) was fully discharged on 8 March 2024 at a cost of A$11.26
million, pursuant to completion of the Agreement in respect of the sale of Paulsens East (refer Notes 12).
Capitalised Mine development expenditure pertained to the Paulsens East Iron Ore Project (located in Western
Australia). Mine development represents the costs incurred in preparing mines for production and includes plant
and equipment under construction and operating costs incurred before production commences. On 22 December
2023, the Company entered into a Share and Asset Purchase Agreement (Agreement) with certain parties
including Miracle Iron Holdings Pty Ltd (Miracle) for the sale of 100% of the shares in wholly-owned subsidiary,
Strike Iron Ore Holdings Pty Ltd (SIOH).
SIOH is the parent of Paulsens East Iron Ore Pty Ltd, the owner and
operator of the Paulsens East Iron Ore Project. On 8 March 2024, the Company completed the sale of SIOH
under the Agreement (refer also Note 13).
ANNUAL REPORT | 42
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
14.
PROVISIONS
2024
2023
$
$
Provision for Environmental rehabilitation
-
750,000
Employee benefits - annual leave
89,056
109,337
Employee benefits - long service leave
182,114
173,423
271,170
1,032,760
15.
ISSUED CAPITAL
283,750,000 (2023: 283,750,000) fully paid ordinary shares
160,453,332
160,453,332
Number
Movement in fully paid ordinary shares
Date of issue
of shares
$
At 1 July 2022
270,000,000
159,420,982
Issue of shares at 8 cents
23-Dec-22
13,750,000
1,100,000
Cost of share issue
(67,650)
At 30 June 2023
283,750,000
160,453,332
There was no movement during the year.
16.
RESERVES
2024
2023
$
$
Profits reserve
28,968,834
28,968,834
Share-based payments reserve
13,402,658
13,402,658
Foreign currency translation reserve
1,583,625
1,418,028
43,955,117
43,789,520
(a)
Share-based payments reserve
(b)
Profits reserve
(c)
Foreign currency translation reserve
The Share-based payments reserve recognises the consideration (net of expenses) received by the
Company on the issue of options. In relation to options issued to Directors and personnel for nil
consideration, the fair value of these options (refer Note 17) are recognised in the Share-based payments
reserve.
An increase in the Profits reserve will arise when the Company or its subsidiaries generates a net profit (after
tax) for a relevant financial period (i.e. half year or full year) which the Board determines to credit to the
company’s Profits reserve. Dividends may be paid out of (and debited from) a company’s Profits reserve,
from time to time.
Exchange differences arising on translation of the foreign controlled entities are recognised in the Foreign
currency translation reserve as described in the accounting policy note below and accumulates in a separate
reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is
disposed of.
ANNUAL REPORT | 43
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
17.
SHARE-BASED PAYMENTS
The Consolidated Entity has the following share-based payment arrangements:
The following options lapsed during the year:
(a)
(b)
(c)
18.
CAPITAL RISK MANAGEMENT
19.
PARENT ENTITY INFORMATION
2024
2023
Statement of profit or loss and other comprehensive income
$
$
Profit/(Loss) for the year
(16,400,511)
4,566,142
Other comprehensive income
-
Total comprehensive income for the year
(16,400,511)
4,566,142
The Company's objectives when managing its capital are to safeguard its ability to continue as a going concern,
so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain a
capital structure balancing the interests of all shareholders.
The Board will consider capital management initiatives as is appropriate and in the best interests of the Company
and shareholders from time to time, including undertaking capital raisings, share buy-backs, capital reductions and
selling assets to reduce debt.
On 30 November 2023, 1,000,000 Broker's options (each with an exercise price of $0.15) lapsed on expiry.
The following information provided relates to the Company, Strike Resources
Limited, as at 30 June 2024.
On 3 December 2023, 12,000,000 Directors' options (each with an exercise price of $0.185) lapsed on expiry.
On 3 June 2024, 1,000,000 Broker's options (each with an exercise price of $0.185) lapsed on expiry.
Fair value
Vested and
Grant
Expiry
at grant
Exercise
Opening
Closing
exercisable
date
date
date ($)
price ($)
balance
Granted Exercised
Lapsed
balance at period end
Financial year 30 June 2024
01-Dec-20
30-Nov-23
0.066
0.150
1,000,000
-
-
(1,000,000)
-
-
04-Dec-20
03-Dec-23
0.063
0.185
12,000,000
-
-
(12,000,000)
-
-
04-Jun-21
03-Jun-24
0.104
0.330
1,000,000
-
-
(1,000,000)
-
-
15-Feb-22
14-Feb-25
0.115
0.185
3,100,000
-
-
-
3,100,000
-
17,100,000
-
-
(14,000,000)
3,100,000
-
Weighted average exercise price
0.19
-
-
-
0.29
Financial year 30 June 2023
01-Dec-20
30-Nov-23
0.066
0.150
1,000,000
-
-
-
1,000,000
1,000,000
04-Dec-20
03-Dec-23
0.063
0.185
12,000,000
-
-
-
12,000,000
-
04-Jun-21
03-Jun-24
0.104
0.330
1,000,000
-
-
-
1,000,000
1,000,000
15-Feb-22
14-Feb-25
0.115
0.185
3,100,000
-
-
-
3,100,000
-
17,100,000
-
-
-
17,100,000
2,000,000
Weighted average exercise price
0.19
-
-
-
0.19
During the period
ANNUAL REPORT | 44
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
19.
PARENT ENTITY INFORMATION (continued)
2024
2023
Statement of financial position
$
$
Current assets
Cash and cash equivalents
6,659,493
2,584,122
Other
4,759,484
137,379
Non current assets
8,098,801
44,789,983
Total assets
19,517,778
47,511,484
Current liabilities
1,005,102
605,197
Non-Current liabilities
-
11,993,100
Total liabilities
1,005,102
12,598,297
Net assets
18,512,676
34,913,187
Issued capital
160,453,332
160,453,332
Options reserve
13,402,658
13,402,658
Profits reserve
28,968,834
24,402,692
Accumulated losses
(184,312,148)
(163,345,495)
Equity
18,512,676
34,913,187
20.
INVESTMENT IN CONTROLLED ENTITIES
Investment in controlled entities
Incorporated
2024
2023
Strike Finance Pty Ltd
Australia
100%
100%
Paulsens East Iron Ore Pty Ltd
Australia
-
100%
Strike Iron Ore Holdings Pty Ltd
Australia
-
100%
Strike Resources Peru S.A.C.
Peru
100%
100%
Apurimac Ferrum S.A.C.
Peru
100%
100%
Ferrum Trading S.A.C
Peru
100%
100%
21.
INVESTMENT IN ASSOCIATE ENTITY
2024
2023
2023
$
$
Lithium Energy Limited (ASX:LEL)
30.49%
-
669,878
Movements in carrying amounts
Opening balance
669,878
5,540,968
Sale of ordinary shares
(80,000)
(600,500)
Share of net loss after tax
(800,041)
(4,311,597)
Share of other comprehensive loss
210,163
41,007
-
669,878
Fair value (at market price on ASX) of investment in Associate entity
11,473,700
27,012,600
Net asset value of investment
8,826,410
9,795,216
Ownership interest
Ownership interest
2024
30.10%
ANNUAL REPORT | 45
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
21.
INVESTMENT IN ASSOCIATE ENTITY (continued)
2024
2023
$
$
Summarised statement of profit or loss and other comprehensive income
Revenue
174,871
514,731
Expenses
(4,998,425)
(12,581,582)
Loss before income tax
(4,823,554)
(12,066,851)
Income tax expense
-
-
Loss after income tax
(4,823,554)
(12,066,851)
Other comprehensive income/(loss)
698,126
134,484
Total comprehensive income
(4,125,428)
(11,932,367)
Summarised statement of financial position
Current assets
28,725,997
10,064,558
Non-current assets
3,821,773
23,255,630
Total assets
32,547,770
33,320,188
Current liabilities
3,227,922
1,196,495
Total liabilities
3,227,922
1,196,495
Net assets
29,319,848
32,123,693
22.
RELATED PARTY TRANSACTIONS
(a)
Transactions with key management personnel
2024
2023
Directors
$
$
Short-term employee benefits
709,286
736,250
Post-employment benefits
73,071
72,581
782,357
808,831
(b)
Transactions with other related parties
No other related party transactions have been identified other than those disclosed above.
23.
AUDITOR'S REMUNERATION
2024
2023
Audit of financial statements
$
$
In.Corp Audit & Assurance Pty Ltd
28,700
32,000
During the year the following fees were paid for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or
payable to each member of the Consolidated Entity's KMP for the year ended 30 June 2024. The total
remuneration paid to KMP of the Consolidated Entity during the year is as follows:
ANNUAL REPORT | 46
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
ANNUAL REPORT | 47
24.
CONTINGENCIES
(a)
Directors' Deeds
The Company has entered into Access, Indemnity and Insurance Deeds with the Directors which,
inter alia, indemnify them against liability incurred in discharging their duties as officers. As at the
reporting date, no claims have been made under any such indemnities and, accordingly, it is not
possible to quantify the potential financial obligation of the Consolidated Entity under these
indemnities.
(b)
Deferred Payments from Settlement Agreement Relating to Apurimac Ferrum SAC
Pursuant to a settlement agreement dated 30 December 2012 whereby the Consolidated Entity
acquired the (50%) balance of equity interest in Apurimac Ferrum SAC (AF) (the holder of the
Apurimac Project) from D&C Pesca SAC, the Consolidated Entity has a series of deferred payment
obligations as outlined below.
The Consolidated Entity has payment obligations if certain milestones are achieved as follows:
(i)
Resource Milestone Payment: US$2 million on the delineation of at least 500 Mt of JORC
Mineral Resources at an average grade of at least 55% Fe with at least 275 Mt of contained
iron having an average grade of at least 52.5% Fe, on the Apurimac Project mineral
concessions.
(ii)
Approvals Milestone Payment: Up to US$3 million on AF receiving all formal government
environmental and community approvals for the construction and operation of an iron ore mine
and required infrastructure with a design capacity of at least 10Mtpa of iron ore product,
relating to the Apurimac Project mineral concessions.
(iii)
Construction Milestone Payment: Up to US$5 million on formal approval of the AF Board
to commence construction of an iron ore project or the commencement of bulk earthworks for
an iron ore mine or processing plant, in either case with a design capacity of at least 10Mtpa
of iron ore product, relating to the Apurimac Project mineral concessions.
The Consolidated Entity has royalty payment obligations as follows:
(i)
1.5% of the net profits from sales of iron ore mined and iron ore products produced from the
Apurimac Project mineral concessions.
(ii)
2% of the proceeds of sales of other metals (on a net smelter return basis) mined from the
Apurimac Project mineral concessions.
Due to the inherent uncertainty surrounding the achievement and timing of the above
milestones/royalty triggers, the Consolidated Entity regards these future payment obligations as
contingencies.
For further background details, refer also to SRK ASX Announcement dated 31 December 2012:
Strike Moves to 100% Ownership of AF.
(c)
Legal Disputes Over Peru Mineral Concessions
The Consolidated Entity has successfully defended against a number of legal actions and claims
made by several Peruvian parties (that have had a contractual relationship with AF) relating to the
Consolidated Entity’s mineral concessions in Peru. Whilst there still remain some outstanding claims
and appeals, the Consolidated Entity believes that they are without merit and will all be eventually
dismissed, consistent with previous decisions by the relevant Peruvian authorities.
For further background details, refer also to SRK ASX Announcement dated 1 May 2014: Strike Wins
Millenium Arbitration Case in Peru.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
ANNUAL REPORT | 48
25.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
(a)
On 11 July 2024, the Company received $100,000 deferred consideration from the sale of Paulsens
East (which completed on 8 March 2024). The Company has agreed to a temporary suspension of
payment of the ($400,000) balance of the deferred consideration pending finalisation and
reconciliation of a pre-completion supplier contractual matter. The $500,000 deferred consideration
was recognised as a Receivable asset as at balance date.
No other matter or circumstance has arisen since the end of the financial year that significantly affected, or
may significantly affect, the operations of the Consolidated Entity, the results of those operations, or the state
of affairs of the Consolidated Entity in future financial periods.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED ENTITY
DISCLOSURE STATEMENT
as at 30 June 2024
ANNUAL REPORT | 49
% of
Share
Capital
Tax Residency
Entity name
Entity type
Place of
Incorporation
Australian
or Foreign
Foreign
Jurisdiction
Strike Resources Limited (SRK)
Strike Iron Ore Holdings Pty Ltd
Body corporate
-
Australia
Australian
N/A
Paulsens East Iron Ore Pty Ltd
Body corporate
-
Australia
Australian
N/A
Strike Finance Pty Ltd
Body corporate
100%
Australia
Australian
N/A
Strike Resources Peru S.A.C.
Body corporate
100%
Peru
Foreign
Peru
Apurimac Ferrum S.A.C.
Body corporate
100%
Peu
Foreign
Peru
Ferrum Trading S.A.C
Body corporate
100%
Peu
Foreign
Peru
Notes:
(1)
SRK disposed of Strike Iron Ore Holdings Pty Ltd and Paulsens East Iron Ore Pty Ltd (which owns the
Paulsens East Iron Ore Project in Western Australia) on 8 March 2024.
(2)
The Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with subsection
295(3A)(a) of the Corporations Act 2001 (Cth) and includes information for each entity that was part of the
Consolidated Entity as at the end of the financial year in accordance with AASB 10 Consolidated Financial
Statements.
(3)
The percentage of share capital disclosed for bodies corporate included in the CEDS represents the
economic interest consolidated in the consolidated financial statements.
(4)
The Company has formed a tax-consolidated group (with effect on 1 July 2019) under Australian taxation
law, with SRK as the head entity and the wholly-owned Australian subsidiaries of SRK as members.
(5)
Section 295 (3A)(vi) of the Corporation Act 2001 defines tax residency as having the meaning in the Income
Tax Assessment Act 1997 (Cth) (ITAA 1997). Foreign incorporated companies can still be considered a tax
resident of Australia if their central management and control is in Australia. An entity can be both, an
Australian tax resident under the ITAA 1997, and a tax resident in another foreign jurisdiction under the tax
law applicable in that jurisdiction.
(6)
The determination of tax residency involves judgement as there are different interpretations that could be
adopted, and which could give rise to a different conclusion on residency. In determining tax residency, the
Consolidated Entity has applied the following interpretations:
(a)
The Consolidated Entity has applied current legislation and judicial precedent, including having
regard to the Tax Commissioner's public guidance in Tax Ruling TR 2018/5 and the advice of
independent Australian tax advisers; and
(b)
Where necessary, the Consolidated Entity has used independent tax advisers in foreign jurisdictions
to assist in its determination of tax residency to ensure applicable foreign tax legislation has been
complied with.
(7)
Where the entity is not an Australian tax resident but is a foreign tax resident based on the Australian
domestic law definition, then each foreign country in which the entity is a tax resident (as determined under
the law of foreign jurisdictions) must be disclosed in the CEDS. However, if the entity is an Australian tax
resident, this requirement does not apply and no further information needs to be provided about other tax
residencies of the entity.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ DECLARATION
ANNUAL REPORT | 50
The Directors of the Company declare that:
(1)
The financial statements, comprising the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of
Cash Flows, Consolidated Statement of Changes in Equity, and accompanying notes as set out on
pages 29 to 48 are in accordance with the Corporations Act 2001 (Cth) and:
(a)
comply with Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting; and
(b)
give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2024 and
of their performance for the year ended on that date;
(2)
The Company has included in the notes to the Financial Statements an explicit and unreserved
statement of compliance with the International Financial Reporting Standards;
(3)
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable;
(4)
The Directors have been given the declarations required by section 295A of the Corporations Act 2001
(Cth) by the Executive Chaiman (the person who, in the opinion of the Directors, performs the Chief
Executive Officer function) and Company Secretary (the person who, in the opinion of the Directors,
performs the Chief Financial Officer function); and
(5)
In the Directors’ opinion, the Consolidated Entity Disclosure Statement on page 49 is true and correct.
This declaration is made in accordance with a resolution of the Directors made pursuant to section 295(5) of
the Corporations Act 2001 (Cth).
Farooq Khan
Executive Chairman
30 September 2024
In.Corp Audit & Assurance Pty Ltd
ABN 14 129 769 151
Level 1
6-10 O’Connell Street
SYDNEY NSW 2000
Suite 11, Level 1
4 Ventnor Avenue
WEST PERTH WA 6005
GPO BOX 542
SYDNEY NSW 2001
T +61 2 8999 1199
E
team@incorpadvisory.au
W
incorpadvisory.au
To the members of Strike Resources Limited
Opinion
We have audited the financial report of Strike Resources Limited (“the
Company”) and its controlled entities (“the Group”), which comprises
the consolidated statement of financial position as at 30 June 2024, the
consolidated statement of profit or loss and other comprehensive
income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes
to the financial statements, including material accounting policy
information, the consolidated entity disclosure statement and the
Directors’ Declaration.
In our opinion, the 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 2024 and of its performance for the year ended on that date;
and
b)
Complying with Australian Accounting Standards and Corporations
Regulations 2001
STRIKE RESOURCES LIMITED
INDEPENDENT AUDITOR’S REPORT
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 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 confirm that the independence declaration required by the
Corporations Act 2001, which has been given to the directors of the
Group, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Liability limited by a scheme approved under Professional Standards Legislation
STRIKE RESOURCES LIMITED
INDEPENDENT AUDITOR’S REPORT (continued)
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.
How our Audit Addressed the Key Audit
Matter
Key Audit Matter
Our procedures in
reviewing the transaction
included but were not limited to the following:
•
Reviewed
the
share
and
asset
sale
agreement to understand the key terms and
structure of the consideration paid; and
•
Reconciled management’s calculations of
the
gain
on
disposal
of
the
subsidiary
recognised in the financial report;
•
Reviewed the accounting treatment of the
transaction; and
•
Assessed the adequacy of the disclosures
included in the financial report.
Our procedures did not result in any significant
findings
surrounding
the
accounting
for
the
transaction.
Divestment of Mining Project
During the year, the Group disposed of its mining
project and recorded a gain on disposal of
$5,077,850.
The recognition of the gain on disposal of the
mining project was considered a key audit matter
due to the following:
•
The recorded gain and associated
consideration is considered a material
transaction to the Group; and
•
Accounting for these types of transactions can
be complex.
STRIKE RESOURCES LIMITED
INDEPENDENT AUDITOR’S REPORT (continued)
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b)
the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the director determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of 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 director either intends to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Other Information
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 2024 but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
STRIKE RESOURCES LIMITED
INDEPENDENT AUDITOR’S REPORT (continued)
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2024. 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.
Opinion
In our opinion the Remuneration Report of Strike Resources Limited, for the year ended 30 June 2024,
complies with section 300A of the Corporations Act 2001.
In.Corp Audit & Assurance Pty Ltd
Daniel Dalla
Director
Sydney, 30 September 2024
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 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:
https://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor’s
report.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
LIST OF MINERAL CONCESSIONS
ANNUAL REPORT | 55
The following mineral concessions were held as at the end of the financial year (30 June 2024) and as at the
date of this report:
Apurimac Iron Ore Project (Peru)
(Strike – 80%)
Concession Name
Area
(Ha)
Province
Code
Title
File No
Opaban I
999 Andahuaylas 5006349X01 No 8625-94/RPM Dec 16, 1994
20001465
Opaban III
990 Andahuaylas 5006351X01 No 8623-94/RPM Dec 16, 1994
20001464
Cristoforo 22
379 Andahuaylas
010165602 RP2849-2007-INGEMMET/PCD/PM Dec 13, 2007
11067786
Ferrum 31
327 Andahuaylas
010552807 RP 1266-2008-INGEMMET/PCD/PM May 12, 2008
11076509
Wanka 01
100 Andahuaylas
010208110 RP 3445-2010-INGEMMET/PCD/PM Oct 18,2010
11102187
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ANNUAL MINERAL RESOURCES
STATEMENT
ANNUAL REPORT | 56
The following JORC Code (2012 Edition) compliant Mineral Resources estimates are as at the end of the
financial year (30 June 2024) and as at the date of this report:
Apurimac Iron Ore Project (Peru)
The Apurimac Project has a JORC Code (2012 Edition) compliant Mineral Resource:
Category
Concession
Density t/m3
Mt
Fe%
SiO2%
Al2O3%
P%
S%
Indicated
Opaban 1
4
133.71
57.57
9.46
2.54
0.04
0.12
Indicated
Opaban 3 *
4
8.53
62.08
4.58
1.37
0.07
0.25
Inferred
Opaban 1
4
127.19
56.7
9.66
2.7
0.04
0.2
Total Indicated and Inferred
269.4
57.3
9.4
2.56
0.04
0.16
Refer Strike’s ASX Announcement dated 20 January 2015: Apurimac Mineral Resources Updated to JORC 2012 Standard.
*
The Opaban 3 Mineral Resource has been diminished by production and sales of 50,095 tonnes of lump iron ore grading
65.78% Fe, 2.42% SiO2, 0.72% Al2O3, 0.057% P and 0.09% S.
Compliance Notes
•
The Mineral Resources estimate in respect of the Apurimac Iron Ore Project (above) have not changed
since reported in last year’s (2023) Annual Report. The Company notes that production at the Opaban
3 concession was undertaken during calendar 2021 with two shipments totalling ~50,000 tonne
shipment of Lump direct-shipping iron ore (DSO) completed in August and October 2021.
•
The Mineral Resources estimates in this Annual Mineral Resources Statement are based on, and fairly
represents, information and supporting documentation prepared by a Competent Person (recognised
under the JORC Code (2012 Edition)).
•
The Annual Mineral Resources Statement as a whole (in respect of the Apurimac Iron Ore Project) has
been approved by the Competent Persons named in the JORC Code Competent Persons’ Statements
section of this Annual Report (at page 57) where further information concerning their qualifications and
professional memberships are also disclosed.
•
Due to the nature, stage and size of the Company’s existing operations, Strike believes there would
be no efficiencies gained by establishing a separate Mineral Reserves/Resources Committee
responsible for reviewing and monitoring the Company’s processes for estimating Mineral
Reserves/Resources. The Board as a whole has responsibility in this regard (with assistance from
external advisers as appropriate) including ensuring that appropriate internal controls are applied to
such calculations.
•
The Company ensures that any Mineral Reserve/Resource estimations are prepared by Competent
Persons and where appropriate, reviewed independently and verified (including estimation
methodology, sampling, analytical and test data).
•
The Company will report any future Mineral Reserves/Resources estimates in accordance with the
2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves’ (the JORC Code (2012 Edition)), or any updated version of the same that may be
applicable at the time of the relevant Mineral Reserve/Resource estimation.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
JORC CODE COMPETENT PERSONS’
COMPLIANCE STATEMENTS
ANNUAL REPORT | 57
ode () ompetent erson’s om pliance tatement - purimac
ron re roject (eru)
The information in this document that relates to Mineral Resources 17 is based on information compiled by
Mr Ken Hellsten, B.Sc. (Geology), who is a Fellow of AusIMM. Mr Hellsten was a principal consultant to
Strike Resources Limited and was also formerly the Managing Director of Strike Resources Limited (between
24 March 2010 and 19 January 2013). Mr Hellsten has sufficient experience which is relevant to the style of
mineralisation 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 JORC Code. Mr Hellsten consents to the
inclusion in this document of the matters based on his information in the form and context in which it appears.
Strike’s ASX Announcements may be viewed and downloaded from the Company’s website:
www.strikeresources.com.au or the ASX website: www.asx.com.au under ASX code “SRK”.
17 Also refer Strike ASX Announcement dated 20 January 2015: Apurimac Mineral Resources Updated to JORC 2012 Standard
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
FORWARD LOOKING STATEMENTS
ANNUAL REPORT | 58
This document contains “forward-looking statements” and “forward-looking information”, including statements
and forecasts which include without limitation, expectations regarding future performance, costs, production
levels or rates, mineral reserves and resources, the financial position of the Company, industry growth and
other trend projections. Often, but not always, forward-looking information can be identified by the use of
words such as “plans”, “expects”, “is expected”, “is expecting”, “budget”, “scheduled”, “estimates”, “forecasts”,
“intends”, “anticipates”, or “believes”, or variations (including negative variations) of such words and phrases,
or state that certain actions, events or results “may”, “could”, “would”, “might”, or “will” be taken, occur or be
achieved. Such information is based on assumptions and judgements of management regarding future
events and results. The purpose of forward-looking information is to provide the audience with information
about management’s expectations and plans. Readers are cautioned that forward-looking information
involves known and unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company and/or its subsidiaries to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking information. Such factors
include, among others, changes in market conditions, future prices of minerals/commodities, the actual results
of current production, development and/or exploration activities, changes in project parameters as plans
continue to be refined, variations in grade or recovery rates, plant and/or equipment failure and the possibility
of cost overruns.
Forward-looking information and statements are based on the reasonable assumptions, estimates, analysis
and opinions of management made in light of its experience and its perception of trends, current conditions
and expected developments, as well as other factors that management believes to be relevant and
reasonable in the circumstances at the date such statements are made, but which may prove to be incorrect.
The Company believes that the assumptions and expectations reflected in such forward-looking statements
and information are reasonable. Readers are cautioned that the foregoing list is not exhaustive of all factors
and assumptions which may have been used. The Company does not undertake to update any forward-
looking information or statements, except in accordance with applicable securities laws.
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 15 October 2024
ANNUAL REPORT | 59
CORPORATE GOVERNANCE STATEMENT
The Company has adopted the Corporate Governance Principles and Recommendations (4th Edition, 27 February
2019) issued by the ASX Corporate Governance Council in respect of the financial year ended 30 June 2024.
Pursuant to ASX Listing Rules 4.7.3 and 4.10.3, the Company’s 2024 Corporate Governance Statement (dated on
or about 24 October 2024) and ASX Appendix 4G (Key to Disclosures of Corporate Governance Principles and
Recommendations) can be found at the following URL on the Company’s Internet website:
www.strikeresources.com.au/corporate/corporate-governance/
VOTING RIGHTS
Subject to any rights or restrictions for the time being attached to any class or classes of shares (at present there
are none), at meetings of shareholders of the Company:
•
Each shareholder entitled to vote may vote in person or by proxy or by power of attorney or, in the case of a
shareholder which is a corporation, by representative;
•
Every person who is present in the capacity of shareholder or the representative of a corporate shareholder
shall, on a show of hands, have one vote;
•
Every shareholder who is present in person, by proxy, by power of attorney or by corporate representative
shall, on a poll, have one vote in respect of every fully paid share held by them;
•
Optionholders have no entitlement to vote.
UNLISTED OPTIONS
SECURITIES INCENTIVE PLAN (SIP)
1 OPTIONS ($0.185, 14 FEBRUARY 2025)
2
Holders
3
№ of Options
Issue Date
Exercise Price
Expiry Date
SIP Participant 1
1,000,000
15 February 2022
$0.185
14 February 2025
SIP Participant 2
750,000
15 February 2022
$0.185
14 February 2025
SIP Participant 3
100,000
15 February 2022
$0.185
14 February 2025
Total
1,850,000
Distribution Schedule
Spread
of
Holdings
Number of Holders
Number of Options
% of Total Issued Options
1
-
1,000
-
-
-
1,001
-
5,000
-
-
-
5,001
-
10,000
-
-
-
10,001
-
100,000
1
100,000
5.41
100,001
-
and over
2
1,750,000
94.59
TOTAL
3
1,850,000
100.00%
1 The SIP was approved by shareholders at the Company’s AGM held on 4 December 2020; a summary of the SIP is in Annexure A to
Strike's Notice of AGM and Explanatory Statement dated 20 October 2020 and released on ASX on 4 November 2020
2 Refer SRK ASX Announcement dated 18 February 2022: Notification regarding unquoted securities - SRK
3 Not required to be named as securities were issued under an ‘employee incentive scheme’, pursuant to ASX Listing Rule 4.10.16
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 15 October 2024
ANNUAL REPORT | 60
DISTRIBUTION OF FULLY PAID ORDINARY SHARES
Spread
of
Holdings
Number of
Holders
Number of
Shares
% of Total
Issued Capital
1
-
1,000
350
130,931
0.05%
1,001
-
5,000
709
2,221,994
0.78%
5,001
-
10,000
439
3,524,027
1.24%
10,001
-
100,000
832
31,576,609
11.13%
100,001
-
and over
302
246,296,439
86.80%
TOTAL
2,632
283,750,000
100 %
UNMARKETABLE PARCELS
Spread
of
Holdings
Number of
Holders
Number of
Shares
% of Total
Issued Capital
1
-
13,158
1,587
6,891,116
2.43%
13,159
-
over
1,045
276,858,884
97.57%
TOTAL
2,632
283,750,000
100%
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 13,158 shares or less
(being a value of $500 or less in total), based upon the Company’s closing share price of $0.038 on 15 October 2024.
SUBSTANTIAL SHAREHOLDERS
Substantial Shareholders
Registered Shareholder
Shares Held
%
Voting
Power
Bentley Capital Limited (ASX:BEL)
Bentley Capital Limited
56,739,857
19.996%
Windfel Properties Limited
and Associates
HSBC Custody Nominees
(Australia) Limited
25,825,000
9.38%
Good Importing International Pty Ltd
and Associates
Mr Zhoufeng Zhang
13,082,910
6.85%
Ms Hong Xu
5,747,799
Good Importing International Pty Ltd
601,873
Orion Equities Limited (ASX:OEQ)
Orion Equities Limited
10,000,000
23.52%
Bentley Capital Limited
56,739,857
Queste Communications Ltd (ASX:QUE)
Orion Equities Limited
10,000,000
23.52%
Bentley Capital Limited
56,739,857
30 JUNE 2024
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 15 October 2024
ANNUAL REPORT | 61
SECURITIES ON ISSUE
Class of Security
Quoted on ASX
Unlisted
283,750,000
-
Fully paid ordinary shares
Securities Incentive Plan (SIP)1 Options ($0.185, 14 February 2025)2
1,850,000
Total
283,750,000
1,850,000
TOP TWENTY, ORDINARY FULLY PAID SHAREHOLDERS
Rank
Holder name
Shares Held
% Issued
Capital
1
BENTLEY CAPITAL LIMITED
56,739,857
19.996
2
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
26,608,902
9.38
3
GOOD IMPORTING INTERNATIONAL PTY LTD
13,082,910
MR ZHOUFENG ZHANG
5,747,799
MS HONG XU
601,873
Sub-total
19,432,582
6.85
4
ORION EQUITIES LIMITED
10,000,000
3.52
5
MRS AMBREEN CHAUDHRI
10,000,000
3.52
6
MR MINH VU QUANG DANG & MRS THI KIM DAU NGUYEN
4,345,994
1.53
7
IRIS SYDNEY HOLDINGS PTY LTD
3,851,988
1.36
8
MR STEVEN JAMES CLUNE & MRS LISA MICHELLE CLUNE
3,282,273
1.16
9
MR HONGWEI YAO
2,671,798
0.94
10
LAVISH LIMOUSINES PTY LTD
2,304,754
0.81
11
DOLMAT PTY LTD
2,010,000
0.71
12
CITICORP NOMINEES PTY LIMITED
1,853,812
0.65
13
MR FAROOQ KHAN & MS ROSANNA DECAMPO
1,813,231
0.64
14
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
1,772,783
0.62
15
MR RICHARD DAVID SIMPSON
1,752,241
0.62
16
MR DAVID JOHN DWYER & MRS LYNETTE MAREE DWYER
1,641,435
0.58
17
ELVIEN PTY LTD
1,500,000
0.53
18
MR MINH DANG & MR HUY DANG
1,326,396
0.47
19
PRINT LOGIC WA PTY LTD
1,300,000
0.46
20
JALDARA PTY LTD
1,256,093
0.44
TOTAL
155,464,139
54.786%
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ASX Code: SRK
REGISTERED OFFICE AND
PRINCIPAL PLACE OF BUSINESS
Suite 1, Level 1, 680 Murray Street
West Perth, Western Australia 6005
T | +61 8 9214 9700
F | +61 8 9214 9701
E | info@strikeresources.com.au
W | www.strikeresources.com.au
SHARE REGISTRY
Automic
Level 5, 126 Philip Street
Sydney, New South Wales 2000
Local T | 1300 288 664
T | +61 2 9698 5414
F | +61 2 8583 3040
E | hello@automicgroup.com.au
W | www.automic.com.au
Investor Portal | https://investor.automic.com.au