SUVO STRATEGIC
MINERALS LIMITED
(Formerly Ultracharge Limited)
ABN 97 140 316 463
Annual Financial Report
For the year ended
30 June 2021
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Suvo Strategic Minerals Limited
Corporate directory
30 June 2021
Corporate directory
Directors
Company secretary
Registered office
Principal place of business
Share register
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Auditors
Solicitors
Stock exchange listing
Website
Robert Martin
Aaron Banks
Ian Wilson
Chris Achurch
9th Floor
182 St Georges Terrace
Perth WA 6000
Phone: (08) 9389 4495
3610 Glenelg Hwy
Pittong VIC 3360
Phone: (03) 5344 6688
Automic Registry Services Pty Ltd
2nd Floor
267 St Georges Terrace
Perth WA 6000
Phone: 1300 288 664
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Phone: (08) 6382 4600
HWL Ebsworth
20th Floor
240 St Georges Terrace
Perth WA 6000
Phone: (08) 6559 6500
Suvo Strategic Minerals Limited’s shares are listed on the Australian Securities
Exchange (ASX code: SUV)
www.suvo.com.au
Corporate Governance Statement www.suvo.com.au/investors/corporate-governance/
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Suvo Strategic Minerals Limited
Chairman’s Letter
30 June 2021
Chairman’s Letter
Dear Shareholder
On behalf of the Board, I am pleased to present the 2021 Annual Report to shareholders.
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The 2021 financial year heralded significant milestones for your Company subsequent to the successful commencement of
trading on the ASX on 7 August 2020. An oversubscribed A$5m capital raising as part of the relisting process allowed the
Company to settle the acquisition of Mt Marshall Kaolin Pty Ltd and Watershed Enterprise Solutions Pty Ltd, owners of the
White Cloud Kaolin and Nova Silica Sands projects respectively.
On 1 January 2021, the Company acquired the Australian kaolin operations of French multi-national, Imerys S.A, with the
support of institutional and sophisticated investors who participated in a heavily oversubscribed A$6m capital raising. The
purchase included Mircal Australia Pty Ltd, its two wholly owned subsidiaries, Kaolin Australia Pty Ltd, the owner of the Pittong
and Lal Lal Mines and the Trawalla deposit and Imerys Minerals Australia Pty Ltd the owner of the Pittong processing plant.
The net cash outflow of A$1.88m represents excellent value for our shareholders with replacement costs estimated at
substantially more than A$100M.
The purchase of Imery’s Australian operations put Suvo at the forefront of the Australian kaolin industry, positioning itself as
the only operating hydrous kaolin mine in the country. During the period 1 January to 30 June 2021, Pittong produced 12,464t
of refined kaolin resulting in positive EBITDA of ~A$1.50m.
The Company is in the final stages of singing off on the planned press deck upgrade works at the Pittong plant, these works
once complete will increase annual production by a further 45,000 tonnes of refined kaolin product.
In May 2021, the Company released a maiden Scoping Study for its White Cloud kaolin asset showing a 25 year LOM, an
IRR (pre-tax) of 113%, revenues of A$3.60b and EBITDA of A$2.34b.
During the year the Company signed multiple memorandums of understanding and cooperation agreements with large well
know global producers and research and development organisations. These include LIXIL AS Sanitary Manufacturing (Tianjin)
Co Ltd who have an annual turnover of A$20b and Rezel Catalysts Corporation a leading global catalysts, zeolite and
molecular sieve producer. As a Company we believe this shows that Suvo’s product, personnel and operations have the
potential to perform well on the global stage.
The first Nova Silica Sand drilling campaign was completed during the period with a maiden JORC 2012 compliant resource
due in the first half of the 2022 financial year. Initial test work shows the potential for a large-scale high value resource with
multiple products and revenue streams including rare naturally occurring silica-flour. The Company is excited by the scale of
the Nova project and looks forward to updating its shareholders as information comes to hand.
After successfully implementing the acquisition of Imery’s Pittong mining operations into the Suvo group, delivering
outstanding results on our maiden scoping study from our White Cloud resource and the possibility of a world class asset from
our Nova silica tenements, the Board believes the Company is in a tremendously strong position heading into the 2022
financial year.
I would like to thank my fellow directors, Dr Ian Wilson and Mr Aaron Banks for their hard work on the successful acquisition
of Imery’s Pittong operations and their efforts in working towards commercialising our White Cloud Kaolin and Nova Silica
Sands projects. I would also like to thank our management team, dedicated employees and the management and employees
of recently acquired Pittong operations for their efforts over this transformational year for your Company.
In closing I thank Suvo’s loyal shareholders for their continued support of our Company as we look forward to an exciting year
ahead.
Yours faithfully
Robert Martin
Executive Chairman
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of Suvo Strategic Minerals Limited (referred to hereafter as the 'Suvo' or the 'Company') and the
entities it controlled at the end of, or during, the year ended 30 June 2021.
Directors
The following persons were Directors of Suvo during the whole of the financial year and up to the date of this report, unless
otherwise stated:
Mr Robert Martin (appointed 30 July 2020)
Mr Aaron Banks (appointed 30 July 2020)
Dr Ian Wilson (appointed 1 September 2020)
Mr Leonard Troncone (appointed 30 July 2020,
resigned 29 July 2021)
Mr Kobi Ben-Shabat (resigned 30 July 2020)
Mr Anthony Brown (resigned 30 July 2020)
Mr John Paitaridis (resigned 30 July 2020)
Executive Chairman
Executive Director
Non-executive Director
Non-executive Director, Executive Director
Managing Director
Non-executive Director
Non-executive Director
Principal activities
On 30 July 2020 the Company acquired Watershed Enterprise Solutions Pty Ltd (‘Watershed’) and Mt Marshall Kaolin (‘Mt
Marshall’), holders of exploration licences in Western Australia. Subsequently, on 1 January 2021, the Company acquired
the holding Company of the Australian Kaolin operations of Imerys S.A., Mircal Australia Pty Ltd, and its two wholly owned
subsidiaries, Kaolin Australia Pty Ltd (the owner of the Pittong and Lal Lal mines and Trawalla deposit) and Imerys Minerals
Australia Pty Ltd (the owner of the Pittong processing plant). This marked the Company’s diversification into resources
exploration, development and production.
Review of operations
The Company changed its name to Suvo Strategic Minerals Limited (from Ultracharge Limited) on 30 July 2020 and
commenced trading on the ASX on 7 August 2020 after a successful heavily oversubscribed A$5 million capital raising. As
part of the relisting process, the Company settled the acquisition of Watershed Enterprises Solutions Pty Ltd and Mt Marshall
Kaolin Pty Ltd, owners of the White Cloud Kaolin and Nova Silica Sands projects respectively. Post acquisition, the Company
received notification from the Department of Mines, Industry Regulation and Safety (‘DMIRS’) of the granting of further
exploration licenses at its White Cloud Kaolin and Nova Silica Sands projects providing the Company with significant
expansion of tenement area under exploration licenses.
After another successful heavily oversubscribed A$6 million capital raising backed by high quality institutional and
sophisticated investors, the Company used the proceeds from the capital raising to acquire the holding Company of the
Australian Kaolin operations of Imerys S.A., Mircal Australia Pty Ltd, and its two wholly owned subsidiaries, Kaolin Australia
Pty Ltd (the owner of the Pittong and Lal Lal mines and Trawalla deposit) and Imerys Minerals Australia Pty Ltd (the owner
of the Pittong processing plant). The mining operations are located west of the township of Ballart, Victoria, and consists of
Australia’s only operating wet kaolin processing plant, two active kaolin mine deposits and one unused mine deposit. As part
of the conditions to acquire the business, Imerys Minerals Australia Pty Ltd and Mircal Australia Pty Ltd were renamed to
Suvo Minerals Australia Pty Ltd and Suvo Australia Pty Ltd. Kaolin Australia Pty Ltd retained its name. The acquisition was
settled on 31 December 2020 and the Company became the effective owner of those assets on 1 January 2021.
During the period 1 January 2021 to 30 June 2021, the Company produced 12,464t of refined Kaolin products. With the sales
pipeline looking strong well into next year, with noticeable increase in sales enquiries, the Company is in the final stages of
singing off on the planned press deck upgrade works at the Pittong plant, these works once complete will increase annual
production by a further 45,000 tonnes of refined kaolin product.
On 9 March 2021, Mt Marshall Kaolin Pty Ltd (‘Mt Marshall’) entered into a non-binding term sheet to negotiate an offtake
agreement with C.M.M Toye Industrial Mineral Consultants (‘C.M.M’), whereby, subject to entering into a binding offtake
agreement, it is envisaged that Mt Marshall will be required to supply C.M.M a minimum of 10,000tpa of high-quality kaolin
products at A$850/t. Subsequently, Suvo Strategic Minerals Limited (‘Suvo’) signed a Memorandum of Understanding (MOU)
with LIXL AS Sanitary Manufacturing (Tianjin) Co. Ltd., one of the world’s largest producers of sanitaryware and ceramics
products. The MOU contemplates joint research to develop high quality refined kaolin products specifically for LIXIL and, if
successful, to enter into an offtake agreement to buy White Cloud and Pittong manufactured kaolin products.
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
The White Cloud Kaolin Project Scoping Study was released on 27 May 2021. The study identified the strong project
economics, which shows an initial pre-tax NPV of A$705 million, an IRR of 113% with Life of Mine (LOM) revenue of A$3.60
billion and LOM EBITDA of A$2.34 billion. The study showed significant social benefits with the employment of 80-90 people
full-time during operations and 250 during construction. The plant would be a hydrous (wet) processing plant with a capacity
of 500,000tpa, which would produce 200,000tpa of high-quality kaolin products to be exported via the Fremantle bulk
container port to high-quality paper coating, paint, pharmaceutical, catalysts and ceramics markets.
Primero Group assisted with the completion of the Study by compiling capital and operating costs for the processing plant
(Class 5 level, +/- 50% accuracy). Mining was envisaged to consist of shallow open pit excavation at White Cloud in an area
under a land access and compensation agreement. The Resource at White Cloud is 72.5Mt, 26.9Mt classified as Indicated
and 45.6Mt Inferred. The Scoping Study only utilised around 50% of the Indicated Resource and none of the Inferred. At an
ex-works selling price of A$720/tonne (using a USD exchange rate of 0.76), total LOM revenues of A$3.60 billion are
estimated to be generated, total all in sustaining cost averages of A$256/tonne were used. Capital expenditure has been
estimated at A$68 million. It was assumed that the project would be funded 50% via equity and 50% by project finance. Start-
up working capital was estimated at A$18 million.
The metallurgical drilling program at White Cloud commenced during the year, the metallurgical sample derived from the
program was to be used for ongoing product development with LIXIL AS Sanitary Manufacturing (Tianjin) Co, Ltd. The
remaining sample was designated for further customer acceptance and ongoing metallurgical test work programs.
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Significant changes in the state of affairs
As stated in the ‘Review of operations’ the Company restructured its Board and Management following the acquisition of
Watershed and Mt Marshall. The Group now conducts multi mineral exploration and evaluation activities in Western Australia
and operates a kaolin mine in Victoria.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
The Company strengthened its Management team with the appointments of Jeremy Whybrow and Bojan Bogunovic. Jeremy
was promoted to General Manager of Mining & Exploration on 13 July 2021, whilst Bojan joined as the Group Financial
Controller, effective 26 July 2021.
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On 20 July 2021, the Company announced that Chris Achurch was appointed as Company Secretary effective 1 August
2021.
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On 5 August 2021, the Company signed an MOU and Collaboration Agreement with Rezel Catalysts Corporation to define
a 5 to 10 year supply agreement for up to 10,000t per annum of refined kaolin products, subject to entry into a formal long
term supply agreement.
On 29 July 2021 Leonard Troncone resigned as a Director of the Company.
On 26 August 2021, the Company announced it achieved 99.992%(4N) from its first High Purity Alumina (‘HPA’) test work
program conducted by the Beijing General Research Institute of Mining and Metallurgy (BGRIMM) in China on samples
produced from White Cloud ore.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially positive for the Group up
to 30 June 2021, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The
situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries,
such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
Apart from matters discussed above, no other matter or circumstance has arisen since 30 June 2021 that has significantly
affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in
future financial years.
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Likely developments and expected results of operations
The Group intends to continue its exploration, development and production activities on its existing projects and to acquire
further suitable projects as opportunities arise.
Environmental regulation
The Group is subject to and is compliant with all aspects of environmental regulation of its exploration and mining activities.
The directors are not aware of any environmental law that is not being complied with.
Information on directors
Name:
Title:
Experience and expertise:
Robert Martin
Executive Chairman (appointed 30 July 2020)
Mr Martin has over 20 years’ experience across the mining services, supply chain and
capital market sectors. Before joining the Company’s Board of Directors, he operated
a highly successful mining services company which became a leading provider of
products and services to the mining industry and operated globally with offices across
Australia and internationally. After 7 years of growth on growth revenue, profitability
and expansion into multiple countries, Mr Martin’s company was acquired by a
prominent Perth business. Mr Martin now runs a family office in Western Australia with
a focus on investing and supporting emerging private and public businesses.
PARKD Limited (ASX:PKD), Critical Resources Limited (ASX:CRR)
Other current directorships:
Former directorships (last 3 years): None
None
Special responsibilities:
15,555,161
Interests in shares:
10,000,000
Interests in options:
8,000,000
Interests in performance rights:
Name:
Title:
Experience and expertise:
Aaron Banks
Executive Director (appointed 30 July 2020)
Mr Banks is a specialist business consultant with over 20 years’ experience in contract
negotiations and business development including senior roles in sales, marketing and
construction management where he successfully negotiated contracts exceeding $300
million in value within the housing sector. Since 2015 as Founder, and since 2016 as
Managing Director of Australian Silica Pty Ltd, Mr Banks has developed extensive
relationships with glass companies and manufacturers of specialty products for LCD
screens and photovoltaic systems in the Asian-Pacific Region.
In 2016 Mr Banks discovered what has become one of the largest high-grade silica
sand resources in the world. While on the board of Australian Silica, he successfully
negotiated the sale of the Muchea Silica Sand Project to VRX Silica (ASX: VRX) in
2017, which helped re-pivot VRX from a base metals explorer to a silica sand explorer
with a market capitalisation as at 20 August 2020 of approximately $45 million.
None
Other current directorships:
Former directorships (last 3 years): None
None
Special responsibilities:
72,564,516
Interests in shares:
None
Interests in options:
13,333,333
Interests in performance rights:
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Name:
Title:
Experience and expertise:
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Ian Wilson
Non-Executive Director (appointed 1 September 2020)
Dr. Wilson is an economic geologist with over 45 years’ international experience in
industrial minerals. He has held key technical and management positions in a major
publically listed mining and construction enterprise, was a Senior Scientific Officer in
what is now the British Geological Survey, and has been an independent consultant
since 2001. His experience spans the range from exploration and resource estimation
to project development and production, and includes global and regional marketing for
a wide variety of industrial minerals, including kaolin, halloysite, calcium carbonate,
talc, bentonite, barytes, magnesite, and others. He has authored many articles in peer-
reviewed journals and has been a regular contributor to Industrial Minerals magazine
for over 17 years.
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He was formerly Secretary of the Mineralogical Society of London (Clay Minerals
Group) and has been the convenor of several international conferences on clay
minerals. In 2009 he was awarded the Hal William Hardinge Award by SME in
recognition of his services to the industrial minerals industry.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
500,000
Interests in options:
333,333
Interests in performance rights:
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Name:
Title:
Experience and expertise:
Leonard Troncone
Non-Executive Director, Executive Director (appointed 30 July 2020, resigned 29 July
2021)
Mr Troncone is a senior finance executive with over 35 years’ hands-on experience in
the Australian corporate environment, with experience gained in a range of industries
including mining, mineral exploration, mine development and oil and gas, diversified
engineering, manufacturing and construction, financial services and private investment.
Mr Troncone holds a Bachelor of Business degree from Curtin University of Technology
(formerly the Western Australian Institute of Technology).
Not applicable as no longer a director
Other current directorships:
Former directorships (last 3 years): Not applicable as no longer a director
Not applicable as no longer a director
Special responsibilities:
Not applicable as no longer a director
Interests in shares:
Not applicable as no longer a director
Interests in options:
Not applicable as no longer a director
Interests in performance rights:
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Name:
Title:
Experience and expertise:
Mr Kobi Ben-Shabat
Managing Director (resigned 30 July 2020)
Mr Ben-Shabat was educated in Israel's Ruppin Academic Centre in Business and
Administration and concluded his tertiary studies with an MBA in Marketing and
Information Technology from the University of Manchester in 2000.
After working for various US based technology companies, Mr Ben-Shabat was
seconded to Australia where he was instrumental in the growth of the region's IP
Surveillance and Security industry. After noticing a market opportunity Mr Ben-Shabat
established Open Platform Systems Limited (OPS). OPS swiftly became recognised as
the predominant player in its technology space and became a "pain point" for the
region's long established tier one providers. Australia's Business Review Weekly
magazine recognised OPS in its annual BRW Fastest Growing Companies index for
three consecutive years. OPS was acquired by Hills Ltd (ASX listed) in April 2014. Mr
Ben-Shabat has extensive experience with sales and senior management with a
particular emphasis on emerging markets and technologies.
Other current directorships:
Not applicable as no longer a director
Former directorships (last 3 years): Not applicable as no longer a director
Not applicable as no longer a director
Interests in shares:
Not applicable as no longer a director
Interests in options:
Not applicable as no longer a director
Interests in performance rights:
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Mr Anthony Brown
Non-Executive Director (resigned 30 July 2020)
Mr Brown is an entrepreneur who has owned various businesses over his 30 year
commercial career. These businesses have provided specialist technology services to
government and non-government organisations. During Mr Brown’s leadership, two of
his organisations were successfully sold to multi-national enterprises, delivered
complex large multi-facted projects, won major awards for product sales and system
integrations within Australia and the Asia-Pacific region.
Other current directorships:
Not applicable as no longer a director
Former directorships (last 3 years): Not applicable as no longer a director
Not applicable as no longer a director
Interests in shares:
Not applicable as no longer a director
Interests in options:
Not applicable as no longer a director
Interests in performance rights:
Mr John Paitaridis
Non-Executive Director (resigned 30 July 2020)
As the managing director of Optus Business, Mr Paitaridis leads Optus' enterprise,
business and government organisation. With 25 years' industry experience, he is
accountable for all aspects of sales, marketing, products, operations and service
delivery. Mr Paitaridis joined Optus Business in 2012, bringing a deep understanding
of the telecommunications and ICT needs of enterprise and government customers.
Previously, he was an executive at Telstra.
Other current directorships:
Not applicable as no longer a director
Former directorships (last 3 years): Not applicable as no longer a director
Not applicable as no longer a director
Interests in shares:
Not applicable as no longer a director
Interests in options:
Not applicable as no longer a director
Interests in performance rights:
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'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
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Name:
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Title:
Experience and expertise:
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Name:
Title:
Experience and expertise:
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Company secretary
Chris Achurch (B Com, CA) holds the role of Company Secretary (appointed 1 August 2021). Mr Achurch spent 10 years in
public practice in the Audit and Assurance division with RSM Australia, based in Perth, Dallas and New York. Mr Achurch
then spent over 2 years as CFO and Joint Company Secretary at Kalium Lakes Limited, before his resignation to join Perth
based Investment Banking and Corporate Advisory firm, Westar Capital Limited. Mr Achurch provides company secretarial,
corporate advisory and general consulting services to a number of ASX listed clients. Justyn Stedwell stepped down as
Company Secretary on 1 August 2021.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2021, and the number of meetings attended by each director were:
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Robert Martin
Aaron Banks
Ian Wilson
Leonard Troncone
Kobi Ben-Shabat
Anthony Brown
John Paitaridis
Full board
Remuneration Committee1 Audit and Risk Committee1
Attended
Held
Attended
Held
Attended
Held
Nomination and
9
9
9
9
-
-
-
9
9
9
9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Refer to Company’s Corporate Governance statement.
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant
committee.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance
with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all Directors.
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
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Principles used to determine the nature and amount of remuneration
The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its Directors and executives. The
performance of the Group depends on the quality of its Directors and executives. The remuneration philosophy is to attract,
motivate and retain high performance and high quality personnel.
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Non-executive directors remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors'
fees and payments are reviewed annually by the Board. The chairman's fees are determined independently to the fees of
other non-executive directors based on comparative roles in the external market. The chairman is not present at any
discussions relating to the determination of his own remuneration.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the 2016 Annual General Meeting where the shareholders approved a
maximum annual aggregate remuneration of $350,000.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board based on individual and business unit performance, the overall performance of the Group and comparable market
remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits where it does not create any
additional costs to the Group and provides additional value to the executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles
of executives. STI payments are granted to executives based on specific annual targets and key performance indicators
('KPI's') being achieved.
The long-term incentives ('LTI') include share-based payments. Shares are awarded to executives over a period greater than
one year based on long-term incentive measures.
Use of remuneration consultants
During the financial year ended 30 June 2021, the Group did not engage a remuneration consultant.
Voting and comments made at the company's 2020 Annual General Meeting ('AGM')
At the 2020 AGM, 99.9% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2020. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
l
The key management personnel of the Group consisted of the following persons:
●
●
●
●
●
●
●
Robert Martin - Executive Chairman (appointed 30 July 2020)
Aaron Banks - Executive Director (appointed 30 July 2020)
Ian Wilson - Non-Executive Director (appointed 1 September 2020)
Leonard Troncone - Non-Executive Director, Executive Director (appointed 30 July 2020, resigned 29 July 2021)
Kobi Ben-Shabat - Managing Director (resigned 30 July 2020)
Anthony Brown - Non-Executive Director (resigned 30 July 2020)
John Paitaridis - Non-Executive Director (resigned 30 July 2020)
Changes since the end of the reporting period:
Leonard Troncone resigned as a Non-Executive Director on 29 July 2021.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
Non-Executive
Directors:
Ian Wilson1
Leonard
Troncone3
Anthony Brown
John Paitaridis
Executive
Directors:
Robert Martin2
Aaron Banks2
Leonard
Troncone3,4
Kobi Ben-Shabat5
37,194
3,500
-
-
188,467
220,000
299,633
37,740
786,534
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
350
-
-
-
22,000
28,667
-
51,017
-
-
-
-
-
-
-
-
-
-
-
-
66,280
103,474
13,375
-
-
17,225
-
-
61,103
87,290
107,000
-
356,570
329,290
-
-
-
-
328,300
37,740
148,393
186,655 1,172,599
Salary represents the period 1 September 2020 to 30 June 2021.
Salary represents the period 30 July 2020 to 30 June 2021.
Leonard Troncone was appointed as a Non-Executive Director on 30 July 2020. On 1 September 2020, Leonard was
appointed as an Executive Director.
The employment of Leonard Troncone as an Executive Director ceased effective 22 June 2021. Leonard Troncone’s
remuneration includes a $133,967 termination payment. Leonard Troncone remained a Non-Executive Director until 29
July 2021.
Salary represents the period 1 July 2020 to 30 July 2020.
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2
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3
5
11
Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
Non-Executive
Directors:
Ian Wilson
Leonard
Troncone
Anthony Brown
John Paitaridis
Executive
Directors:
Robert Martin
Aaron Banks
Leonard
Troncone
Kobi Ben-Shabat
-
-
31,983
41,559
-
-
-
285,547
359,089
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Non-Executive Directors:
Ian Wilson
Leonard Troncone
Anthony Brown
John Paitaridis
Executive Directors:
Robert Martin
Aaron Banks
Leonard Troncone
Kobi Ben-Shabat
Fixed remuneration
2020
2021
At risk - STI
At risk - LTI
2021
2020
2021
2020
36%
22%
-
-
53%
73%
100%
100%
-
-
100%
100%
-
-
-
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
64%
78%
-
-
47%
27%
-
-
-
-
-
-
-
-
-
-
No cash bonuses were paid in the current or previous financial year.
Total
$
-
-
31,983
41,559
-
-
-
285,547
359,089
-
-
-
-
-
-
-
-
-
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Name:
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Title:
Agreement commenced:
Term of agreement:
Details:
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Name:
Title:
Agreement commenced:
Term of agreement:
Details:
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Name
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Robert Martin
Aaron Banks
Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Robert Martin
Executive Chairman (appointed 30 July 2020)
30 July 2020
Open
Consultancy fee of $18,333 plus superannuation and GST per month. The fee will be
reviewed annually in accordance with the Company’s policies and procedures. 4 month
termination notice by either party, the Company may at any time pay a cash bonus,
non-solicitation and non-compete clauses.
Aaron Banks
Executive Director (appointed 30 July 2020)
30 July 2020
Open
Base salary of $240,000 plus superannuation guarantee. The salary will be reviewed
annually by the Company in accordance with the policy of the Company for the annual
review of salaries. 3 month termination notice by either party, the Company may at any
time pay a cash bonus, non-solicitation and non-compete clauses.
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1 Mr Kobi Ben-Shabat resigned as Managing Director and his service agreement ceased on 30 July 2020.
2 The employment of Mr Leonard Troncone as an Executive Director ceased effective 22 June 2021.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
Details of shares issued to Directors and other key management personnel as part of compensation during the year ended
30 June 2021 are set out below:
Date
30-Jul-2020
30-Jul-2020
Shares
Issue price
$
3,055,1611
4,364,5161
$0.02
$0.02
61,103
87,290
1 Payment in shares for accrued salaries in consideration for services performed until settlement of acquisition of Watershed
Enterprise Solutions Pty Ltd and Mt Marshall Kaolin Pty Ltd.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors and other key
r
management personnel in this financial year or future reporting years are as follows:
o
F
Vesting date and
exercisable date
Exercise price at grant date
Fair value
per option
options
granted
Number of
Expiry date
Grant date
Name
Robert Martin
Ian Wilson
Leonard Troncone
10,000,000 30-Jul-2020
500,000 24-Nov-2020
1,250,000 30-Jul-2020
At any time
At any time
At any time
30-Jul-2023
30-Jul-2023
30-Jul-2023
$0.03
$0.03
$0.03
$0.02
$0.13
$0.02
Options granted carry no dividend or voting rights and vest immediately.
13
Robert Martin
Ian Wilson
Leonard Troncone
Performance rights
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Values of options over ordinary shares granted, exercised and lapsed for Directors and other key management personnel
as part of compensation during the year ended 30 June 2021 are set out below:
Value of
options
granted
during the
Value of
options
exercised
during the
Value of
options
lapsed
during the
year
$
year
$
year
$
Remuneration
consisting of
options
for the
year
%
107,000
66,280
13,375
-
-
-
-
-
-
30%
64%
77%
During the period 40,500,000 performance rights were issued to Directors. The performance rights convert into fully paid
ordinary shares in the capital of the Company upon achievement of the following milestones:
• One third of the performance rights will convert into ordinary shares on a one-for-one basis upon the satisfaction of
the following milestones within 12 months following the date of listing:
a.
b.
the definition of an Inferred JORC Resource at the Eneabba Sands Project of 80Mt @ 97.5% SiO2; and
the definition of an Inferred JORC Resource at the Mt Marshall Kaolin Project of 20Mt @ cut-off grade of 25%
AI2O3;
• One third of the performance rights will convert into ordinary shares on a one-for-one basis upon the satisfaction of
the following milestones within 24 months following the date of listing:
a.
b.
the definition of a Measured JORC Resource at the Eneabba Sands Project of 40Mt @ 97.5% SiO2; and
the definition of a Measured JORC Resource at the Mt Marshall Kaolin Project of 20Mt @ cut-off grade of 25%
AI2O3;
• One third of performance rights will convert into ordinary shares on a one-for-one basis upon completion of
preliminary feasibility studies on both the Eneabba Sands Project and Mt Marshall Kaolin Project demonstrating an
ability to operate both projects as commercially viable enterprises within 36 months following the date of listing.
No value was attributable to the performance rights as they were deemed as being less likely to vest than to vest. For
remuneration purposes the value is the number of performance rights granted, multiplied by the share price at date of grant.
As at 30 June 2021, these performance rights have not converted to ordinary shares. As at 30 June 2021, no expense has
been recognised in respect of the performance rights as a 0% probability was assigned at grant date to meeting any of the
non-market milestones. On 7 August 2021, 13,500,000 performance rights lapsed.
Additional information
The earnings of the Group for the two years to 30 June 2021 are summarised below:
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Sales revenue
EBITDA
EBIT
Loss after income tax
2021
$
2020
$
5,892,146
(1,671,660)
(2,238,073)
(2,220,638)
-
(1,546,584)
(1,546,584)
(1,546,584)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Total dividends declared (cents per share)
Basic loss per share (cents per share)
2021
2020
0.15
-
(0.43)
0.02
-
(0.19)
14
Ordinary shares
Robert Martin
Aaron Banks
Ian Wilson
Leonard Troncone
Kobi Ben-Shabat2
Anthony Brown2
John Paitaridis2
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Balance at Received
the start of as part of
the year
remuneration Additions1
Disposals/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
3,055,161 12,500,000
4,364,516 68,200,000
-
250,000
-
-
-
- 15,555,161
- 72,564,516
-
-
250,000
-
-
-
-
-
-
-
7,419,677 80,950,000 - 88,369,677
-
-
-
-
-
Shares issued under the Public Offer.
Not applicable as not a Director as at 30 June 2021.
Option holding
The number of options over ordinary shares in the Company held during the financial year by each Director and other
members of key management personnel of the Group, including their personally related parties, is set out below:
Options over ordinary shares
Robert Martin
Aaron Banks
Ian Wilson
Leonard Troncone
Kobi Ben-Shabat1
Anthony Brown1
John Paitaridis1
Balance at
the start of Granted as
the year
remuneration Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
- 10,000,000
-
-
500,000
-
1,250,000
-
-
-
-
-
-
-
- 11,750,000
-
-
-
-
-
-
-
-
- 10,000,000
-
-
500,000
-
1,250,000
-
-
-
-
-
-
-
- 11,750,000
Not applicable as not a Director as at 30 June 2021.
Performance rights
The number of performance rights in the Company held during the financial year by each Director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Performance rights
Robert Martin
Aaron Banks
Ian Wilson
Leonard Troncone
Kobi Ben-Shabat1
Anthony Brown1
John Paitaridis1
Balance at
the start of Granted as
the year
remuneration Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
- 12,000,000
- 20,000,000
500,000
-
8,000,000
-
-
-
-
-
-
-
- 40,500,000
-
-
-
-
-
-
-
-
- 12,000,0002
- 20,000,0002
500,0002
-
8,000,0002
-
-
-
-
-
-
-
- 40,500,000
1
2
Not applicable as not a Director as at 30 June 2021.
Subsequent to the reporting period 13,500,000 performance rights lapsed.
15
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Other transactions with key management personnel and their related parties
During the financial year, payments for consultancy services from Ian Wilson Consultancy Ltd (Director-related entity of Ian
Wilson) of $19,461 were made, of this $10,070 related to work which was performed in the previous financial year. Ian Wilson
Consultancy Ltd provided services related to JORC reporting. Payments were also made to Martin Family Trust (Director-
related entity of Robert Martin) of $16,037 for office rent and reimbursement of business-related expenses. The current trade
payable balance as at 30 June 2021 was $10,070. All transactions were made on normal commercial terms and conditions
and at market rates.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Suvo Strategic Minerals Limited under option at the date of this report are as follows:
Grant date
e
s
u
10-May-2019
24-Nov-2020
30-Jul-2020
30-Jul-2020
23-Dec-2020
Expiry date
4-Sep-2022
30-Jul-2023
30-Jul-2023
30-Jul-2023
31-Dec-2023
Exercise
price
Number
under option
5,166,670
$0.08
$0.03
500,000
$0.03 90,616,903
$0.03 11,250,000
$0.15 12,000,000
l
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
Company or of any other body corporate.
Shares issued on the exercise of options
No shares were issued on the exercise of options during the year ended 30 June 2021.
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a Director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the Directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to 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 part of those proceedings.
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Suvo Strategic Minerals Limited
Directors' report
30 June 2021
Directors’ Report
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 28 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 28 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risks and rewards.
●
Officers of the company who are former partners of BDO Audit (WA) Pty Ltd
There are no officers of the Company who are former partners of BDO Audit (WA) Pty Ltd.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this Directors' report.
l
Auditor
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
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On behalf of the directors
___________________________
Robert Martin
Executive Chairman
23 September 2021
Perth
r
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17
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF SUVO STRATEGIC MINERALS
LIMITED
As lead auditor of Suvo Strategic Minerals Limited for the year ended 30 June 2021, I declare that, to
the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Suvo Strategic Minerals Limited and the entities it controlled during
the period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 23 September 2021
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BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Suvo Strategic Minerals Limited
Shareholder information
20
21
22
23
24
54
55
59
General information
The financial statements cover Suvo Strategic Minerals Limited as a consolidated entity consisting of Suvo Strategic Minerals
Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian
dollars, which is Suvo Strategic Mineral Limited's functional and presentation currency.
Suvo Strategic Minerals Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business are:
Registered office
9th Floor
182 St Georges Terrace
Perth WA 6000
Principal place of business
3610 Glenelg Hwy
Pittong VIC 3360
A description of the nature of the Group’s operations and its principal activities are included in the directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 23 September 2021. The
Directors have the power to amend and reissue the financial statements.
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Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Consolidated statement of profit or loss and other
comprehensive income
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Profit or loss from continuing operations
Revenue
Cost of sales
Gross profit before depreciation and amortisation
Depreciation and amortisation relating to kaolin production
Gross profit from operations
Other income
Administration and other corporate expenses
Foreign exchange (loss)/profit
Other depreciation and amortisation expenses
Share based payments expense
Loss before income tax expense from continuing operations
Income tax expense
l
Loss after income tax expense from continuing operations
Profit after income tax expense from discontinued operations
Loss after income tax expense for the year
Other comprehensive income
Items that may be reclassified through profit or loss
Exchange differences on translating discontinued foreign operations
Total other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Loss for the year is attributable to:
Owners of Suvo Strategic Minerals Limited
Total comprehensive loss for the year is attributable to:
Continuing operations
Discontinued operations
Owners of Suvo Strategic Minerals Limited
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Loss per share for loss attributable to owners of Suvo Strategic Minerals
Limited
Basic and diluted loss per share (in cents)
Consolidated
Note
2021
$
2020
$
6
7
8
9
5,892,146
(4,028,260)
1,863,886
(494,054)
1,369,832
39,246
(2,714,106)
(26,703)
(72,359)
(816,548)
(2,220,638)
-
-
-
-
-
4,869
(1,595,323)
43,870
-
-
(1,546,584)
-
-
(2,220,638)
(1,546,584)
-
310,406
(2,220,638)
(1,236,178)
-
-
(319,525)
(319,525)
(2,220,638)
(1,555,703)
(2,220,638)
(1,546,584)
(2,220,638)
-
(2,220,638)
(1,546,584)
(9,119)
(1,555,703)
10
(0.43)
(0.19)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
20
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Consolidated statement of financial position
Non-current assets
Property, plant and equipment
Mine properties
Mineral interest acquisition and exploration expenditure
Right-of-use assets
Total non-current assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Income tax
Total current assets
Assets
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Total assets
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Liabilities
Current liabilities
Trade and other payables
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Provisions
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
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Reserves
Accumulated losses
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Total equity
Consolidated
Note
2021
$
2020
$
11
12
13
14
15
16
17
18
19
20
21
22
5,876,550
2,561,676
1,305,634
206,832
153,769
10,104,461
1,429,803
2,776,941
4,436,938
264,134
8,907,816
349,033
91,695
-
26,098
-
466,826
-
-
-
-
-
19,012,277
466,826
1,825,682
738,201
141,546
2,705,429
3,801,809
145,227
3,947,036
152,024
-
-
152,024
-
-
-
6,652,465
152,024
12,359,812
314,802
23
24
25
31,191,948
5,641,496
(24,473,632)
18,978,136
3,589,660
(22,252,994)
12,359,812
314,802
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
21
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Consolidated statement of changes in equity
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Consolidated
Balance at 1 July 2019
Loss after income tax expense for the year
Other comprehensive loss for the year, net of
tax
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
18,831,305
3,476,658 (20,584,289)
1,723,674
-
- (1,236,178) (1,236,178)
-
(319,525)
-
(319,525)
Total comprehensive loss for the year
-
(319,525) (1,236,178) (1,555,703)
Transactions with owners in their capacity as
owners:
Transfers
Shares issued
Balance at 30 June 2020
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Consolidated
Balance at 1 July 2020
Total comprehensive loss for the year
Loss after income tax expense for the year
Other comprehensive loss for the year, net of
tax
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n
o
s
Transactions with owners in their capacity as
owners:
r
Shares issued
e
Share issue costs
Share based payments
p
Balance at 30 June 2021
-
146,831
432,527
(432,527)
- -
-
146,831
18,978,136
3,589,660 (22,252,994)
314,802
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
18,978,136
3,589,660 (22,252,994)
314,802
-
-
-
-
(2,220,638)
(2,220,638)
-
-
-
-
(2,220,638)
(2,220,638)
14,323,494
(2,109,682)
-
- 14,323,494
(2,109,682)
-
2,051,836
2,051,836 -
-
-
31,191,948
5,641,496 (24,473,632) 12,359,812
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The above consolidated statement of financial position should be read in conjunction with the accompanying notes
22
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Consolidated statement of cash flows
Cash flows from operating activities
Receipts in the course of operations
Payments to suppliers and employees
Income taxes paid
Interest received
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation
Payments to acquire entities
Cash received from acquisitions of entities
Cash received from acquisition of assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Repayment of lease liabilities
Net cash received from financing activities
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Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
Consolidated
Note
2021
$
2020
$
5,769,156
(6,812,751)
(153,769)
1,200
-
(1,878,640)
-
48
26
(1,196,164)
(1,878,592)
4
4
3
(400,614)
(1,226,499)
(3,083,602)
1,194,647
64,670
(3,451,398)
-
-
-
-
-
-
11,000,000
(726,000)
(98,921)
50,134
-
-
10,175,079
50,134
5,527,517
349,033
-
(1,828,458)
2,014,870
162,621
11
5,876,550
349,033
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The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
23
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
Conceptual Framework for Financial Reporting (Conceptual Framework)
The Group has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual Framework contains new
definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards, but
it has not had a material impact on the Group's financial statements.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss and certain classes of property, plant and
equipment.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 2.
Presentation currency
The Directors have elected to change the Group’s functional and presentation currency from United States dollars to
Australian dollars effective from 1 July 2020 due to the Company changing its operations to Australian mineral exploration
activity. The change in presentation currency is a voluntary change which is accounted for retrospectively. These annual
financial statements have been restated to Australia dollars using the procedures outlined below:
a. The consolidated statement of profit or loss and other comprehensive income and the consolidated statement of
cash flows have been translated into Australian dollars using average foreign currency rates prevailing to the relevant
period, and
b. Assets and liabilities in the consolidated statement of financial position have been translated into Australian dollars
at the closing foreign currency rates on the relevant balance sheet dates, and
c. The equity section of the consolidated statement of financial position, including issued capital, reserves and
accumulated losses have been translated into Australian dollars using historical rates.
d. Earnings per share have also been restated to Australian dollars to reflect the change in presentation currency.
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Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Acquisitions
On 30 July 2020 the Company acquired Watershed Enterprises Solutions Pty Ltd (‘Watershed’) and Mt Marshall Kaolin (‘Mt
Marshall’), holders of exploration licences. Subsequently, on 1 January 2021, the Company acquired the holding Company
of the Australian Kaolin operations of Imerys S.A., Mircal Australia Pty Ltd, and its two wholly owned subsidiaries, Kaolin
Australia Pty Ltd (the owner of the Pittong and Lal Lal mines and Trawalla deposit) and Imerys Minerals Australia Pty Ltd
(the owner of the Pittong processing plant).
The implications of the above acquisitions on the annual financial statements are as follows:
a. Consolidated statement of profit or loss and other comprehensive income comprise the following:
• The consolidated statement of profit or loss and other comprehensive income comprises the total profit or
loss and other comprehensive income for the financial year 1 July 2020 to 30 June 2021 for the parent
Company, Suvo Strategic Minerals Limited.
• The consolidated statement of profit or loss and other comprehensive income comprises the total profit or
loss and other comprehensive income from 30 July 2020 to 30 June 2021 (11 months) for Watershed and
Mt Marshall.
• The consolidated statement of profit or loss and other comprehensive income comprises the total profit or
loss and other comprehensive income from 1 January 2021 to 30 June 2021 (6 months) for Mircal Australia
Pty Ltd (now Suvo Australia Pty Ltd) and its two wholly owned subsidiaries.
• The consolidated statement of profit or loss and other comprehensive income comprises the total profit or
loss and other comprehensive income from 1 July 2019 to 30 June 2020 for Suvo Strategic Minerals Limited
(previously Ultracharge) and its wholly owned subsidiaries.
b. Consolidated statement of financial position and consolidated statement of changes in equity comprise the following:
• The consolidated statement of financial position and the consolidated statement of changes in equity as at
and for the year ended 30 June 2021 represents the combination of the Group, including Suvo Strategic
Minerals Limited as the parent and its wholly owned subsidiaries acquired throughout the reporting period.
• The consolidated statement of financial position and the consolidated statement of changes in equity as at
and for the year ended 30 June 2020 represents the combination Suvo Strategic Minerals Limited (previously
Ultracharge) and its wholly owned subsidiaries.
c. Consolidated statement of cashflows comprise the following:
• The consolidated statement of cashflows comprises the total cashflows for the financial year 1 July 2020 to
30 June 2021 for the parent Company, Suvo Strategic Minerals Limited.
• The consolidated statement of cashflows comprises the total cashflows from 30 July 2020 to 30 June 2021
(11 months) for Watershed and Mt Marshall.
• The consolidated statement of cashflows comprises the cashflows from 1 January 2021 to 30 June 2021 (6
months) for Mircal Australia Pty Ltd (now Suvo Australia Pty Ltd) and its two wholly owned subsidiaries.
• The consolidated statement of cashflows comprises the cashflows from 1 July 2019 to 30 June 2020 for
Suvo Strategic Minerals Limited (previously Ultracharge) and its wholly owned subsidiaries.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 31.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Suvo Strategic Minerals
Limited ('Company' or 'Parent') as at 30 June 2021 and the results of all subsidiaries for the year then ended. Suvo Strategic
Minerals Limited and its subsidiaries together are referred to in these annual financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
25
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses
incurred by the Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises
the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in
profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Foreign currency translation
As stated in the “Basis of preparation’, the financial statements are presented in Australian dollars, which is Suvo Strategic
Mineral Limited's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject
to the constraining principle are recognised as a refund liability.
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Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
●
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Suvo Strategic Minerals Limited (the 'Parent') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime. The Parent and each subsidiary in the tax consolidated group
continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate
taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax
consolidated group.
In addition to its own current and deferred tax amounts, the Parent also recognises the current tax liabilities (or assets) and
the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a
contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
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Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Discontinued operations
A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The
results of discontinued operations are presented separately on the face of the statement of profit or loss and other
comprehensive income.
Current and non-current classification
Assets and liabilities are presented in the consolidated statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group’s
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement
of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 60
to 90 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group is
yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment
purposes.
Customer acquisition costs
Customer acquisition costs are capitalised as an asset where such costs are incremental to obtaining a contract with a
customer and are expected to be recovered. Customer acquisition costs are amortised on a straight-line basis over the term
of the contract.
Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained or which are not
otherwise recoverable from a customer are expensed as incurred to profit or loss. Incremental costs of obtaining a contract
where the contract term is less than one year is immediately expensed to profit or loss.
Customer fulfilment costs
Customer fulfilment costs are capitalised as an asset when all the following are met: (i) the costs relate directly to the contract
or specifically identifiable proposed contract; (ii) the costs generate or enhance resources of the Group that will be used to
satisfy future performance obligations; and (iii) the costs are expected to be recovered. Customer fulfilment costs are
amortised on a straight-line basis over the term of the contract.
28
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Right of return assets
Right of return assets represents the right to recover inventory sold to customers and is based on an estimate of customers
who may exercise their right to return the goods and claim a refund. Such rights are measured at the value at which the
inventory was previously carried prior to sale, less expected recovery costs and any impairment.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and delivery costs, direct
labour, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal
operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory
are determined after deducting rebates and discounts received or receivable.
Cost is determined on the following basis:
a. Work in progress and finished goods on hand is valued on an average total production cost method
b. Ore stockpiles are valued at the average cost of mining and stockpiling the ore, including haulage
c. Raw materials are valued at average cost
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Property, plant and equipment
Land is measured at fair value, based on periodic valuations by external independent valuers. The valuations are undertaken
more frequently if there is a material change in the fair value relative to the carrying amount. Any accumulated depreciation
at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the
revalued amount of the asset. Increases in the carrying amounts arising on revaluation of land are credited in other
comprehensive income through to the revaluation surplus reserve in equity. Any revaluation decrements are initially taken in
other comprehensive income through to the revaluation surplus reserve to the extent of any previous revaluation surplus of
the same asset. Thereafter the decrements are taken to profit or loss.
Buildings are stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Buildings
Plant and equipment
10-40 years
3-5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation
surplus reserve relating to the item disposed of is transferred directly to retained profits.
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Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for
any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms
of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as
incurred.
Exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried
forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through
the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in
an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of
economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred
thereon is written off in the year in which the decision is made.
Mining assets
Capitalised mining development costs include expenditures incurred to develop new ore bodies to define further
mineralisation in existing ore bodies, to expand the capacity of a mine and to maintain production. Mining development also
includes costs transferred from exploration and evaluation phase once production commences in the area of interest.
Amortisation of mining development is computed by the units of production basis over the estimated proved and probable
reserves. Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can
be recovered in the future from known mineral deposits. These reserves are amortised from the date on which production
commences. The amortisation is calculated from recoverable proven and probable reserves and a predetermined percentage
of the recoverable measured, indicated and inferred resource. This percentage is reviewed annually.
Restoration costs expected to be incurred are provided for as part of development phase that give rise to the need for
restoration.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts
are unsecured and are usually paid within 30 days of recognition.
Contract liabilities
Contract liabilities represent the Group’s obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods or services to the customer.
30
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Refund liabilities
Refund liabilities are recognised where the Group receives consideration from a customer and expects to refund some, or
all, of that consideration to the customer. A refund liability is measured at the amount of consideration received or receivable
for which the Group does not expect to be entitled and is updated at the end of each reporting period for changes in
circumstances. Historical data is used across product lines to estimate such returns at the time of sale based on an expected
value methodology.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected
to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or
a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of
money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision
resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
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Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the Group receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
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The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
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All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
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Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
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are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
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If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
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If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
32
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group’s operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
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Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Suvo Strategic Minerals Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
l
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the annual reporting period ended 30 June 2021. The Group has not yet
assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have,
on the Group based on known information. This consideration extends to the nature of the products and services offered,
customers, supply chain, staffing and geographic regions in which the Group operates. Other than as addressed in specific
notes, there does not currently appear to be either any significant impact upon the financial statements or any significant
uncertainties with respect to events or conditions which may impact the Group unfavourably as at the reporting date or
subsequently as a result of the Coronavirus (COVID-19) pandemic.
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Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes
model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity.
34
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. Net realisable value
tests are performed at least annually and represent the estimated future sales price of the product based on prevailing prices,
less estimated costs to complete production and bring the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the contained tonnes
based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile tonnages
are verified by periodic surveys. The Group reviews the carrying value of stockpile inventories regularly to ensure that their
cost does not exceed net realisable value.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Rehabilitation provision
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined. The
Group’s mining and exploration activities are subject to various laws and regulations governing the protection of the
environment. The Group recognises management's best estimate for assets retirement obligations and site rehabilitations in
the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates.
Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the
carrying amount of this provision.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the Group will commence commercial production
in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key
judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to
these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only
capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest.
Factors that could impact the future commercial production at the mine include the level of reserves and resources, future
technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the
extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which
this determination is made.
Amortisation
The Group uses the concept of life of mine to determine the amortisation of mine properties. In determining life of mine, the
Group prepares ore reserve estimation in accordance with JORC 2012, guidelines prepared by the Joint Ore Reserves
Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council
of Australia. The estimate of these proved and probable ore reserves, by their very nature, require judgements, estimates
and assumptions. Where the proved and probable reserve estimates need to be modified, the amortisation expense is
accounted for prospectively from the date of assessment until the end of the revised mine life (for both current and future
years).
Business combinations
As discussed in note 1, business combinations are initially accounted for on a provisional basis. The fair value of assets
acquired, liabilities and contingent liabilities assumed are initially estimated by the Group taking into consideration all
available information at the reporting date. Fair value adjustments on the finalisation of the business combination accounting
is retrospective, where applicable, to the period the combination occurred and may have an impact on the assets and
liabilities, depreciation and amortisation reported.
Asset acquisition
As disclosed in Note 3, on 30 July 2020 the Company acquired Watershed Enterprise Solutions Pty Ltd and Mt Marshall
Kaolin Pty Ltd by way of issuing shares in the Company. For accounting purposes, the Company was deemed to be the
accounting acquirer and accounted for these entities as subsidiaries from acquisition date. Based on the relative voting rights
and value of the net assets of the entities, at the time of the acquisition, it was deemed that the Company was the accounting
acquirer.
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Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 3. Acquisition of Watershed Enterprise Solutions Pty Ltd and Mt Marshall Kaolin Pty Ltd
On 30 July 2020, Suvo Strategic Minerals Limited acquired 100% of the issued share capital in Watershed Enterprise
Solutions Pty Ltd (‘Watershed’) and Mt Marshall Kaolin Pty Ltd (‘Mt Marshall’). The two separate Companies own exploration
licenses for industrial minerals in Western Australia.
Management has determined that this acquisition does not meet the definition of a business within AASB 3 Business
Combinations. This transaction has therefore been accounted for as an asset acquisition.
Acquisition agreement
Watershed Enterprises Pty Ltd
The total consideration included payment of A$50,000 for the option to purchase the share capital and a further payment of
A$100,000 to exercise that option. At 30 June 2020, the Company had paid both the option fee and exercise fee. Completion
took place on the transfer of 75 million fully paid ordinary shares in the Company to the shareholders of Watershed Enterprise
Solutions Pty Ltd on 30 July 2020.
Mt Marshall Kaolin Pty Ltd
The total consideration included payment of A$50,000 for the option to purchase the share capital and a further payment of
A$100,000 to exercise that option. At 30 June 2020, the Company had paid both the option fee and exercise fee. Completion
took place on the transfer of 75 million fully paid ordinary shares in the Company to the shareholders of Mt Marshall Kaolin
Pty Ltd on 30 July 2020.
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Details of the purchase consideration and the net assets acquired
Purchase consideration paid by Suvo Strategic Minerals Limited to acquire Watershed and
Mt Marshall
Shares issued on completion - 75,000,000 ordinary shares at A$0.02
Shares issued on conversion of convertible note - 8,750,000 ordinary shares at A$0.02
Watershed Mt Marshall
30 July
2020
$
30 July
2020
$
1,500,000
-
1,500,000
175,000
1,500,000
1,675,000
Watershed Mt Marshall
30 July
2020
$
30 July
2020
$
660
4,792
1,582,126
5,582
64,010
31,057
1,628,313
3,156
1,593,160
1,726,536
93,160
51,536
93,160
51,536
1,500,000
1,675,000
The fair value of assets and liabilities recognised as a result of the acquisition are outlined
below:
Cash and cash equivalents
Other current assets
Mineral interest acquisition and exploration expenditure
Other non-current assets
Total assets
Trade and other payables
Total liabilities
Net assets
36
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 4. Acquisition of Mircal Australia Pty Ltd
On 1 January 2021, Suvo Strategic Minerals Limited acquired the holding Company of the Australian Kaolin operations of
Imerys S.A., Mircal Australia Pty Ltd, and its two wholly owned subsidiaries, Kaolin Australia Pty Ltd (the owner of the Pittong
and Lal Lal mines and Trawalla deposit) and Imerys Minerals Australia Pty Ltd (the owner of the Pittong processing plant).
The mining operations are located west of the township of Ballarat, Victoria, and consist of Australia’s only operating wet
kaolin processing plant, two active kaolin mine deposits and one unused mine deposit.
As part of the conditions to acquire the business, Suvo Strategic Minerals Limited changed the names of the two group
entities. Imerys Minerals Australia Pty Ltd was renamed Suvo Minerals Australia Pty Ltd and Mircal Australia Pty Ltd was
renamed Suvo Australia Pty Ltd. The third group entity, Kaolin Australia Pty Ltd retained its name.
Management has determined that this acquisition meets the definition of a business within AASB 3 Business Combinations.
This transaction has therefore been accounted for as a business combination.
Acquisition agreement
Per the Share Purchase Agreement, the consideration payable was A$2.00 million subject to completion Balance Sheet
adjustments. A$2.00 million was paid on 31 December 2020. The final payment occurred on 21 June 2021 upon completion
of all Balance Sheet adjustments bringing the total consideration paid to A$3.08 million.
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Purchase consideration paid by Suvo Strategic Minerals Limited to acquire Mircal Australia
Pty Ltd and its wholly owned subsidiaries:
Cash consideration paid on acquisition date
Deferred cash consideration paid during the period subject to all Balance Sheet adjustments
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The fair value of assets and liabilities recognised as a result of the acquisition are outlined
below:
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Cash and cash equivalents
Trade and other receivables
Inventories
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Other assets
Property, plant and equipment
Mine properties
Trade and other payables
Other current liabilities
Other non-current liabilities
Total assets
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Total liabilities
Net assets
1 January
2021
$
2,000,000
1,083,602
3,083,602
1 January
2021
$
1,194,647
2,308,947
1,054,611
116,998
1,499,407
3,297,797
9,472,407
1,901,310
599,261
3,888,234
6,388,805
3,083,602
The acquisition has been accounted for on a provisional basis, if new information obtained on year from the date of acquisition
about facts or circumstances that existed at the date of acquisition identifies adjustments to the above amounts, or any
additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised.
The acquired business contributed revenues of $5,892,146 and net profit after tax of $960,452 for the period 1 January 2021
to 30 June 2021. If the acquisition had occurred on 1 July 2020, consolidated revenue and consolidated profit after tax for the
year ended 30 June 2021 would have been $11,784,292 and $1,920,904 respectively.
37
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 5. Operating segments
Identification of reportable operating segments
The Group is organised into one operating segment, being mining and exploration operations. This operating segment is
based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating
Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted
for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
Types of products and services
The principal products and services of this operating segment are the mining and exploration operations predominately in
Australia.
Major customers
During the year ended 30 June 2021 approximately $2,764,542 of the Group’s external revenue was derived from sales to
two major Australian paper producers.
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Geographical information
Australia
Rest of world
Note 6. Revenue
Sale of Kaolin
Sale of other minerals
Sale returns and rebates
Distribution, freight and commissions
Note 7. Administration and other corporate expenses
Employee expenses
Legal fees
Accounting fees
Compliance fees
Other administration costs
38
Sales to external customers
Geographical non-current
assets
2021
$
2020
$
2021
$
2020
$
4,476,955
2,229,744
6,706,699
-
-
-
9,141,848
-
9,141,848
Consolidated
2021
$
2020
$
6,706,699
25,329
(221,058)
(618,824)
5,892,146
-
-
-
-
-
-
-
-
Consolidated
2021
$
2020
$
1,067,484
242,864
257,049
112,853
1,033,856
332,443
339,162
123,661
161,432
638,625
2,714,106
1,595,323
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 8. Share based payments expense
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Shares issued to key management personnel1
Options issued to key management personnel 1
Options issued to advisors1
Options issued to lead and co-lead managers2
Consolidated
2021
$
2020
$
148,393
186,655
481,500
816,548
1,383,681
2,200,229
-
-
-
-
-
-
1 Share based payments expensed to the consolidated statement of profit or loss and other comprehensive income
2 Share based payments capitalised to the consolidated statement of financial position as cost of raising capital
On 30 July 2020, 7,419,677 shares were issued to Robert Martin and Aaron Banks at an issue price of $0.02 per share and
a total transactional value of $148,393. The shares were issued as remuneration for director services rendered.
A share option plan has been established by the Group, whereby the Group may grant options over ordinary shares in the
Company to certain key management personnel and advisors of the Group. The options are issued for nil consideration.
Set out below are summaries of options granted during the financial year:
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
30-Jul-2020
30-Jul-2020
30-Jul-2020
30-Jul-2020
24-Nov-2020
23-Dec-2020
30-Jul-2023
30-Jul-2023
30-Jul-2023
30-Jul-2023
30-Jul-2023
31-Dec-2023
$0.03
$0.03
$0.03
$0.03
$0.03
$0.15
Weighted average exercise price
- 10,000,000
-
1,250,000
- 45,000,000
- 45,616,903
-
500,000
- 12,000,000
- 114,366,903
-
-
-
-
-
-
-
- 10,000,000
-
1,250,000
- 45,000,000
- 45,616,903
-
500,000
- 12,000,000
- 114,366,903
$0.00
$0.04
$0.00
$0.00
$0.04
No options were granted during the previous financial year. All options have vested.
Set out below are the options exercisable at the end of the financial year:
Grant date
10-May-2019
30-Jul-2020
30-Jul-2020
24-Nov-2020
23-Dec-2020
Expiry date
4-Sep-2022
30-Jul-2023
30-Jul-2023
30-Jul-2023
31-Dec-2023
2021
2020
Number
Number
5,166,670
90,616,903
11,250,000
500,000
12,000,000
5,166,670
-
-
-
-
119,533,573
5,166,670
The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.13 years.
39
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Grant date
30-Jul-2020
24-Nov-2020
23-Dec-2020
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Expiry date
30-Jul-2023
30-Jul-2023
31-Dec-2023
Share price Exercise
at grant date
price
Expected
volatility
Dividend
Risk-free
Fair value
yield
interest rate at grant date
$0.02
$0.15
$0.13
$0.03
$0.03
$0.15
100%
100%
100%
0%
0%
0%
0.68%
0.14%
0.10%
$0.02
$0.13
$0.07
Performance rights
The Company completed the acquisition of Watershed Enterprise Solutions Pty Ltd and Mt Marshall Kaolin Pty Ltd on 30
July 2020 and the ASX re-listing on 7 August 2020. At completion of the acquisition, the incoming Directors were granted 40
million performance rights which were split equally into three tranches and subject to conversion into fully paid ordinary
shares in the capital of the Company upon achievement of the following milestones:
• One third of the performance rights will convert into ordinary shares on a one-for-one basis upon the satisfaction of
the following milestones within 12 months following the date of listing:
a.
b.
the definition of an Inferred JORC Resource at the Eneabba Sands Project of 80Mt @ 97.5% SiO2; and
the definition of an Inferred JORC Resource at the Mt Marshall Kaolin Project of 20Mt @ cut-off grade of 25%
AI2O3;
• One third of the performance rights will convert into ordinary shares on a one-for-one basis upon the satisfaction of
the following milestones within 24 months following the date of listing:
a.
b.
the definition of a Measured JORC Resource at the Eneabba Sands Project of 40Mt @ 97.5% SiO2; and
the definition of a Measured JORC Resource at the Mt Marshall Kaolin Project of 20Mt @ cut-off grade of 25%
AI2O3;
• One third of performance rights will convert into ordinary shares on a one-for-one basis upon completion of
preliminary feasibility studies on both the Eneabba Sands Project and Mt Marshall Kaolin Project demonstrating an
ability to operate both projects as commercially viable enterprises within 36 months following the date of listing.
The Company issued a further 500,000 performance rights to Ian Wilson (Non-Executive Director) which were approved at
the Annual General Meeting of shareholders held on 24 November 2021. The performance rights were issued on the same
terms as the existing performance rights and were issued as part of remuneration in his capacity as Director.
No value was attributable to the performance rights as they were deemed as being less likely to vest than to vest. For
remuneration purposes the value is the number of performance rights granted, multiplied by the share price at date of grant.
As at 30 June 2021, these performance rights have not converted to ordinary shares. As at 30 June 2021, no expense has
been recognised in respect of the performance rights as a 0% probability was assigned at grant date to meeting any of the
non-market milestones. On 7 August 2021, 13,500,000 performance rights lapsed.
Note 9. Income tax expense
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Loss from continuing operations
Prima facie tax benefit on loss before income tax is reconciled to the income tax as follows:
Prima facie benefit on operating loss at 26 % (2020:27.5%)
Tax losses and temporary differences not recognised
Consolidated
2021
$
2020
$
(2,220,638)
(1,546,584)
(577,366)
577,366
(425,310)
425,310
-
-
A potential deferred tax asset, attributable to tax loss incurred in the current period, amounts to approximately $1,128,487
and has not been brought to account at reporting date because the Directors believe it is inappropriate to regard realisation
of the deferred tax asset as probable at this point in time. This benefit will only be obtained if:
40
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
•
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the loss incurred;
the Group continues to comply with the conditions for deductibility imposed by law; and
•
• no changes in tax legislation adversely effects the Group in realising the benefit from the deductions for the loss
incurred.
Note 10. Loss per share
Loss used in calculating loss per share
Loss after income tax attributable to owners of Suvo strategic Minerals Limited
Basic and diluted loss per share
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic and diluted loss per
share
Note 11. Current assets - cash and cash equivalents
l
y
n
o
e
s
u
l
a
n
o
s
r
e
p
r
o
F
Cash on hand
Cash at bank
Cash in term deposit - restricted1
Trade receivables
Other receivables
Consolidated
2021
$
2020
$
(2,220,638)
(1,546,584)
(2,220,638)
(1,546,584)
Cents
Cents
(0.43)
(0.19)
Number
Number
520,994,915
825,808,455
520,994,915 825,808,455
Consolidated
2021
$
2020
$
400
4,985,150
891,000
-
349,033
-
5,876,550
349,033
Consolidated
2021
$
2020
$
2,561,676
2,561,676
-
-
-
91,695
2,561,676
91,695
1 Restricted cash includes $710,000 rehabilitation bond, $150,000 payroll service guarantee and $31,000 rental guarantee.
Note 12. Current assets - trade and other receivables
Allowance for expected credit losses
The Group has recognised a loss of $Nil in profit or loss in respect of the expected credit losses for the year ended 30 June
2021.
41
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 13. Current assets - inventories
l
y
n
o
Raw materials
Packaging
Work in progress
Finished goods
Consolidated
2021
$
2020
$
765,457
208,972
72,587
258,618
1,305,634
-
-
-
-
-
The Group has assessed the impact of COVID-19 on the net realisable value of inventories. The majority of the Group’s
inventories have no specific risk of obsolescence and as a result no specific write down was recognised.
Note 14. Non-current assets - property, plant and equipment
Land and buildings - at fair value (land) and at cost (buildings)
Less: Accumulated depreciation on buildings
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
2021
$
2020
$
2,335,534
(1,630,005)
705,529
-
-
-
606,281 -
-
-
(394,318)
211,963
16,084,966 -
-
(15,572,655)
-
512,311
1,429,803
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2019
Balance at 30 June 2020
Assets acquired (note 3, note 4)
Additions
Depreciation expense1
Land and
buildings
$
Plant and
Leasehold
Improvements equipment
$
$
Total
$
-
-
-
-
-
569,774
229,160
(93,405)
-
222,926
-
(10,963)
-
715,445
171,454
(374,588)
-
1,508,145
400,614
(478,956)
Balance at 30 June 2021
705,529
211,963
512,311
1,429,803
1 Depreciation expense will not match the depreciation and amortisation relating to kaolin production expense in the
consolidated statement of profit or loss and other comprehensive income as the above depreciation expense relates to all
classes of property, plant and equipment, whilst the depreciation and amortisation related to kaolin production expense
includes amortisation of mining reserves but excludes certain equipment, such as office equipment.
42
e
s
u
l
a
n
o
s
r
e
p
r
o
F
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 15. Non-current assets - mine properties
Mining properties - at cost
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
l
y
n
o
e
s
u
l
Consolidated
Balance at 1 July 2019
Balance at 30 June 2020
Assets acquired (note 4)
Change in present value of rehabilitation provision
Amortisation expense
Consolidated
2021
$
2020
$
2,776,941
-
Mining
Reserves
$
Rehabilitation
Asset
$
Total
$
-
-
-
-
-
-
3,336,053
2,711,943
(424,112)
(424,112)
(27,000) (108,000) (135,000)
624,110
-
597,110
2,776,941
2,179,831
Balance at 30 June 2021
Note 16. Non-current assets - mineral interest acquisition and exploration expenditure
a
n
o
s
Reconciliations
r
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
e
p
Mineral interest acquisition and exploration expenditure - at cost
Exploration
and
Consolidated
evaluation
2020
$
2021
$
4,436,938
-
Total
$
Consolidated
$
Balance at 1 July 2019
r
o
F
Balance at 30 June 2020
Assets acquired (note 3)
Additions
Balance at 30 June 2021
-
-
-
2,896,179
1,540,759
-
2,896,179
1,540,759
4,436,938
4,436,938
The Company holds 5 exploration licences through Mt Marshall Kaolin Pty Ltd (White Cloud Kaolin project) and 4 exploration
licences through Watershed Enterprise Solutions Pty Ltd (Nova Silica Sands project).
No impairment has been recognised for the year ended 30 June 2021.
43
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 17. Non-current assets - right-of-use assets
The Group leases its office space and has motor vehicles under lease agreements of three years. On renewal, the terms of
the leases are renegotiated. The Group also leases plant and equipment under agreements of between two to seven years.
Note 18. Current liabilities - trade and other payables
Office space - right-of-use
Less: Accumulated depreciation
Equipment - right-of-use
Less: Accumulated depreciation
Motor vehicles - right-of-use
Less: Accumulated depreciation
l
y
n
o
e
s
u
l
a
n
o
s
r
e
p
Trade payables
Accruals
Other payables
Note 19. Current liabilities - provisions
Annual leave
Other provisions
Sales rebate
r
o
F
44
Consolidated
2021
$
2020
$
194,560
(37,828)
156,732
39,308
(24,183)
15,125
119,594
(27,317)
92,277
264,134
-
-
-
-
-
-
-
-
Consolidated
2021
$
2020
$
1,431,779
117,420
276,483
88,482
63,542
-
1,825,682
152,024
Consolidated
2021
$
2020
$
319,390
230,395
188,416
738,201
-
-
-
-
Consolidated
2021
$
2020
$
141,546
141,546
-
-
Consolidated
2021
$
2020
$
343,294
3,458,515
3,801,809
-
-
-
Rehabilitation
$
Total
$
-
3,848,323
(424,112)
34,304
-
3,848,323
(424,112)
34,304
3,458,515
3,458,515
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 20. Current liabilities - lease liabilities
The Group leases its office space and has motor vehicles under lease agreements of three years. On renewal, the terms of
the leases are renegotiated. The Group also leases plant and equipment under agreements of between two to seven years.
Note 21. Non-current liabilities - provisions
Long service leave
Rehabilitation
Lease liability
l
y
n
o
e
s
u
l
a
n
o
s
r
e
p
Consolidated
Carrying amount at the start of the year
Provision acquired (note 4)
Additional provisions recognised
Unwinding of discount
Carrying amount at the end of the year
Rehabilitation
The provision represents the present value of estimated costs for future rehabilitation of land explored or mined by the Group
at the end of the exploration or mining activity.
Movements in rehabilitation provision
Movements in the rehabilitation provision during the current financial year, is set out below:
r
o
F
As disclosed in note 4, on 1 January 2021, the Company acquired the holding Company of the Australian Kaolin operations
of Imerys S.A., Mircal Australia Pty Ltd, and its two wholly owned subsidiaries, Kaolin Australia Pty Ltd (the owner of the
Pittong and Lal Lal mines and Trawalla deposit) and Imerys Minerals Australia Pty Ltd (the owner of the Pittong processing
plant). From this transaction, the Company acquired a provision of $3,848,323 for the site rehabilitation at the Pittong and
Lal Lal mines and Trawalla deposit. In accordance with accounting standards, the provision has been present valued.
45
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 22. Non-current liabilities - lease liabilities
Consolidated
2021
$
2020
$
145,227
145,227
-
-
Consolidated
2021
Shares
2020
Shares
2021
$
2020
$
585,508,922 112,338,245 31,191,948 18,978,136
Date
Shares
Issue price
$
1 Jul 2019
4 Sep 2019
20 Feb 2020
30 Jun 2020
30 Jul 2020
30 Jul 2020
30 Jul 2020
30 Jul 2020
31 Dec 2020
1,073,380,619
50,000,000
(1,011,042,374)
0.003
- 18,831,305
146,831
- -
112,338,245
7,419,677
(3,000,000)
158,750,000
250,000,000
60,001,000
-
- 18,978,136
148,393
-
3,175,000
5,000,000
6,000,100
(2,109,681)
0.020
-
0.020
0.020
0.100
-
30 Jun 2021
585,508,922
31,191,948
Lease liability
Note 23. Equity - issued capital
Ordinary shares - fully paid
Movements in ordinary share capital
Balance
Shares issued
Share consolidation
Balance
Shares issued - Directors
Share cancellation
Shares issued - Acquisition
Shares issued - Public offer
Shares issued - Placement
Share issue costs
l
y
n
o
e
s
u
Details
l
a
n
o
s
r
Balance
e
p
r
o
F
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost
of capital. Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current Company's share price at the time of the investment. The Group is not actively pursuing additional
investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.
46
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 24. Equity - reserves
Consolidated
2021
$
2020
$
5,641,496
3,589,660
- -
5,641,496
3,589,660
Share based payments reserve
Foreign currency reserve
Share based payments reserve
The reserve is used to recognise increments and decrements in the fair value of share based payments.
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
l
y
n
o
e
s
u
l
a
n
o
s
r
e
p
r
o
F
Consolidated
Balance at 1 July 2019
Foreign currency translation
Transfers to accumulated losses
Balance at 30 June 2020
Share based payments (note 8)
Balance at 30 June 2021
Note 25. Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Transfers to accumulated losses
Accumulated losses at the end of the financial year
Share based
payments
$
Foreign
currency
$
Total
$
3,589,660 (113,002)
(319,525)
-
432,527
-
3,476,658
(319,525)
432,527
3,589,660
2,051,836
5,641,496
-
-
-
3,589,660
2,051,836
5,641,496
Consolidated
2021
$
2020
$
(22,252,994) (20,584,289)
(1,236,178)
(432,527)
(2,220,638)
-
(24,473,632) (22,252,994)
47
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 26. Reconciliation of loss after income tax to net cash from operating activities
l
y
n
o
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Foreign exchange differences
Unwinding of the discount on provisions
e
s
u
Change in operating assets and liabilities:
Change in trade and other receivables
Change in inventories
Change in other assets
Change in trade and other payables
Change in provision for income tax
Change in other provisions
l
Net cash outflows from operating activities
Non-cash investing and financing activities
a
n
o
s
r
e
p
Settlement of asset acquisition through the issue of shares
Share based payments
Consolidated
2021
$
2020
$
(2,220,638)
(1,236,178)
566,413
816,548
-
-
- (702,982)
-
34,304
38,379
(161,035)
(251,023)
-
(75,836) (4,866)
377,149 27,055
(153,769) -
-
(128,277)
(1,196,164)
(1,878,592)
Consolidated
2021
$
2020
$
3,175,000
1,383,681
4,558,681
-
-
-
Note 27. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
r
o
F
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2021
$
2020
$
786,534
51,017
335,048
359,089
-
-
1,172,599
359,089
48
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 28. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by BDO Audit (WA) Pty Ltd, the auditor
of the Company, its network firms and unrelated firms:
Consolidated
2021
$
2020
$
102,800
5,000
107,800
52,026
-
52,026
2,000
-
-
23,333
109,800
75,359
BDO Audit (WA) Pty Ltd, BDO Israel
Audit or review of the financial statements
Eligible project expenditure report
BDO Corporate Finance (WA) Pty Ltd
Review of options valuations for notice of meeting
Investigating Accountants Report
Note 29. Related party transactions
Parent entity
Suvo Strategic Minerals Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
l
y
n
o
e
s
u
l
a
n
o
s
r
e
p
r
o
F
Key management personnel
Disclosures relating to key management personnel are set out in note 27 and the remuneration report included in the
directors' report.
Transactions with related parties
During the financial year, payments for consultancy services from Ian Wilson Consultancy Ltd (Director-related entity of Ian
Wilson) of $19,461 were made, of this $10,070 related to work which was performed in the previous financial year. Ian Wilson
Consultancy Ltd provided services related to JORC reporting. Payments were also made to Martin Family Trust (Director-
related entity of Robert Martin) of $16,037 for office rent and reimbursement of business-related expenses.
Receivable from and payable to related parties
There were no receivables from related parties at the current and previous reporting date. As at 30 June 2021, $10,070 was
outstanding to related parties (2020: $Nil).
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
49
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 30. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries
in accordance with the accounting policy described in note 1:
Name
Watershed Enterprise Solutions Pty Ltd1
Mt Marshall Kaolin Pty Ltd1
Suvo Australia Pty Ltd2
Suvo Minerals Australia Pty Ltd2
Kaolin Australia Pty Ltd2
Far North Minerals Pty Ltd3
Ultracharge Ltd4
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Israel
Ownership interest
2020
2021
%
%
100% -
-
-
-
-
-
100%
100%
100%
100%
100%
100%
-
Acquired 30 July 2020
Acquired 31 December 2020
The subsidiary is dormant
The subsidiary was deregistered during the current financial year and its operations were formally discontinued in the
prior financial year.
l
Note 31. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
l
y
n
o
1
e
s
u
2
4
3
a
n
o
s
r
e
p
r
o
F
Loss after income tax
Total comprehensive loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Parent
2021
$
2020
$
(3,111,107)
(1,546,584)
(3,111,107)
(1,546,584)
Parent
2021
$
2020
$
3,236,290
466,826
11,887,157
466,826
258,375
152,024
417,814
152,024
31,191,948 18,978,136
3,589,660
(25,364,101) (22,252,994)
5,641,496
11,469,343
314,802
Equity
Issued capital
Reserves
Accumulated losses
Total equity
50
l
y
n
o
e
s
u
l
a
n
o
s
r
e
p
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity and some of its subsidiaries are party to a deed of cross guarantee under which each company guarantees
the debts of the others.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 (30 June 2020: $Nil).
Capital commitments - Property, plant and equipment
The parent entity had committed $213,800 ex.GST for property, plant and equipment as at 30 June 2021 (30 June 2020:$Nil).
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1.
Note 32. Financial instruments
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk and price risk), credit
risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to
measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of foreign
exchange and other price risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate procedures,
controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group’s operating units. Finance
reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions (export sales) denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations.
The Group has elected not to enter into hedging contracts as receipts in foreign currency (USD) were not material during the
financial year. The Group will continue to monitor foreign currency risk and take the appropriate course of action as required.
The Group held US$262,805 in the bank as at 30 June 2021 (2020:US$Nil)
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The group is not exposed to interest rate risk as it does not have any borrowings.
r
o
F
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has a strict code of credit, including obtaining agency credit information, confirming references and setting
appropriate credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to
credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of
those assets, as disclosed in the consolidated statement of financial position and notes to the financial statements. The
Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through
the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative
across all customers of the Group based on recent sales experience, historical collection rates and forward-looking
information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
51
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents)
to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and forecast
cash flows and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade payables
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
1,431,779
393,903
-
-
-
-
4.55%
141,546
1,967,228
119,851
119,851
25,376
25,376
-
-
-
-
1,431,779
393,903
286,773
2,112,455
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
152,024
152,024
-
-
-
-
-
-
152,024
152,024
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
l
y
n
o
e
s
u
l
a
n
o
s
r
e
p
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 33. Contingent assets and liabilities
r
o
F
The Group had no contingent assets or liabilities at the current and previous reporting date.
52
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2021
Notes to the financial statements
Note 34. Commitments
l
y
n
o
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Property, plant and equipment
Rent, rates and minimum tenement expenditure for next 12 months
Consolidated
2021
$
2020
$
213,800
316,173
529,973
-
-
-
e
s
u
a
n
o
s
r
e
p
Note 35. Matters subsequent to the end of the financial year
The Company strengthened its Management team with the appointments of Jeremy Whybrow and Bojan Bogunovic. Jeremy
was promoted to General Manager of Mining & Exploration on 13 July 2021, whilst Bojan joined as the Group Financial
Controller, effective 26 July 2021.
On 20 July 2021, the Company announced that Chris Achurch was appointed as Company Secretary effective 1 August
2021.
l
On 29 July 2021 Leonard Troncone resigned as a Director of the Company.
On 5 August 2021, the Company signed an MOU and Collaboration Agreement with Rezel Catalysts Corporation to define
a 5 to 10 year supply agreement for up to 10,000t per annum of refined kaolin products, subject to entry into a formal long
term supply agreement.
On 26 August 2021, the Company announced it achieved 99.992%(4N) from its first High Purity Alumina (‘HPA’) test work
program conducted by the Beijing General Research Institute of Mining and Metallurgy (BGRIMM) in China on samples
produced from White Cloud ore.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially positive for the Group up
to 30 June 2021, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The
situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries,
such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
Apart from matters discussed above, no other matter or circumstance has arisen since 30 June 2021 that has significantly
affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in
future financial years.
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Suvo Strategic Minerals Limited
Director’s Declaration
30 June 2021
Director’s Declaration
In the directors' opinion:
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group’s financial position as at 30 June
2021 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
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On behalf of the directors
___________________________
Robert Martin
Executive Chairman
23 September 2021
Perth
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Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
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INDEPENDENT AUDITOR'S REPORT
To the members of Suvo Strategic Minerals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Suvo Strategic Minerals Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
30 June 2021, 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 report, including a summary of significant accounting policies
and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, 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
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BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
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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.
Accounting for business acquisition
Key audit matter
How the matter was addressed in our audit
During the financial year ended 30 June 2021 the
Our procedures included, but were not limited to the
Group acquired Mircal Australia Pty Ltd as disclosed in
following:
Note 4.
(cid:127)
Reviewing the purchase and sale agreement to
The accounting for this acquisition is a key audit
understand the terms and conditions of the
matter due to the material nature of the acquisition,
acquisition including evaluating management's
the related estimates and judgements associated with
application of AASB 3 Business Combinations;
the identification and determination of the fair value
of net assets and liabilities acquired and the final
purchase consideration.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Assessing how the group estimated fair value of
assets and liabilities identified in the acquisition;
Evaluating the group’s determination of purchase
consideration to underlying share agreements and
cash paid;
Comparing assets and liabilities recognised on
acquisition against executed agreements and the
historical financial information of the acquired
business;
Reviewing the purchase price allocation; and
Assessing the adequacy of the Group’s disclosures
of the acquisition in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
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In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 16 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Suvo Strategic Minerals Limited, for the year ended 30 June
2021, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 23 September 2021
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Suvo Strategic Minerals Limited
Shareholder information
30 June 2021
Shareholder information
The shareholder information set out below was applicable as at 21 September 2021.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
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1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
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AARON PETER BANKS
ROBERT KINGSLEY FITZGERALD
MR ROBERT MARTIN
RATDOG PTY LTD
MR CHRISTOPHER JAMES WEED & MRS JANET ELIZABETH BROCKMAN
MR KOBI BEN SHABATH
SUNSET CAPITAL MANAGEMENT PTY LTD
SSELKROW PTY LTD
CITICORP NOMINEES PTY LIMITED
SANDTON CAPITAL PTY LTD
CHRISTOPHER JAMES WEED & JANET ELIZABETH BROCKMAN
BEARAY PTY LIMITED
MR YEHUDA COHEN
PRIMERO GROUP LIMITED
PROPEL HOLDINGS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
SANDTON CAPITAL PTY LTD
MALAHIDE MANAGEMENT PTY LTD
MR REBLAZE SINGAPORE PTE LTD
MR ORI ACKERMAN
Ordinary shares
Number
of holders
144
665
411
1,092
514
2,826
% of total
shares
issued
0.01%
0.35%
0.56%
7.30%
91.78%
100.00%
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Ordinary shares
Number held
72,564,516
21,975,000
15,555,161
15,400,000
% of total
shares
issued
12.39%
3.75%
2.66%
2.63%
14,087,101
11,188,192
10,000,000
8,755,000
7,803,427
7,500,000
6,820,000
6,565,997
5,570,856
5,500,000
5,400,000
5,350,000
5,300,000
5,125,000
5,000,000
4,970,000
2.41%
1.91%
1.71%
1.50%
1.33%
1.28%
1.16%
1.12%
0.95%
0.94%
0.92%
0.91%
0.91%
0.88%
0.85%
0.85%
240,430,250
41.06%
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Suvo Strategic Minerals Limited
Shareholder information
30 June 2021
Shareholder information
Unquoted equity securities
Options expiring 31 December 2023 at $0.15
Options expiring 4 September 2022 at $0.08
Options expiring 30 July 2023 at $0.03
Options expiring 30 July 2023 at $0.03 (restricted)
Performance rights
Performance rights (restricted)
Substantial holders
As at 20 September 2021, the Company had received substantial shareholder notices from the following shareholders:
Number
on issue
12,000,000
5,166,670
500,000
101,866,903
333,333
26,666,666
Number
of holders
1
6
1
11
1
3
Ordinary shares
Number held
72,564,516
% of total
shares
issued
12.39%
AARON PETER BANKS
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
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Tenements
Description
White Cloud Kaolin Project
White Cloud Kaolin Project
White Cloud Kaolin Project
White Cloud Kaolin Project
White Cloud Kaolin Project
Nova Silica Sands Project
Nova Silica Sands Project
Nova Silica Sands Project
Nova Silica Sands Project
Pittong Project
Pittong Project
Pittong Project
E = Exploration License
M = Mining Lease
Tenement
number
E70/5039
E70/5332
E70/5333
E70/5334
E70/5517
E70/5324
E70/5001
E70/5322
E70/5323
M5408
M5409
M5365
Interest
owned %
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
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