Annual Financial Report
Year ended 30 June 2023
ABN 97 140 316 463
Suvo Strategic Minerals Limited
Corporate Directory
30 June 2023
Corporate Directory
Directors
Aaron Banks
Hugh Thomas
Oliver Barnes
Agu Kantsler
Company secretary
Chris Achurch
Registered office
Principal place of business
Share registry
Auditors
Solicitors
Level 11
40 The Esplanade
Perth WA 6000
Phone: (08) 9389 4495
3610 Glenelg Hwy
Pittong VIC 3360
Phone: (03) 5344 6688
Automic Registry Services Pty Ltd
Level 5
191 St Georges Terrace
Perth WA 6000
Phone: 1300 288 664
RSM Australia Partners
Level 32
2 The Esplanade
Perth WA 6000
Phone: (08) 9261 9100
Hamilton Locke
Level 48
152-158 St Georges Terrace
Perth WA 6000
Phone: (08) 6311 9160
Stock exchange listing
Suvo Strategic Minerals Limited’s shares are listed on the Australian Securities
Exchange (ASX code: SUV)
Website
www.suvo.com.au
Corporate Governance Statement www.suvo.com.au/investors/corporate-governance/
2
Suvo Strategic Minerals Limited
Directors’ Report
30 June 2023
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 2023.
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 Aaron Banks
Mr Hugh Thomas
Mr Oliver Barnes
Dr Agu Kantsler
Mr Henk Ludik
Dr Ian Wilson
Interim Non-Executive Chairman (appointed 7 March 2023)
Executive Director (resigned 7 March 2023)
Managing Director (appointed 15 June 2023)
Non-Executive Director
Non-Executive Director (appointed 5 September 2023)
Non-Executive Director (appointed 7 March 2023, resigned 15 June 2023)
Executive Chairman (appointed 22 August 2022, resigned 7 March 2023)
Non-Executive Chairman (resigned 22 August 2022)
Non-Executive Director (resigned 14 June 2023)
Principal activities
The principal activities of the Group during the year were refined kaolin production in Victoria and mineral exploration in
Western Australia.
Review of operations
Pittong upgrade and optimisation project
In August 2022, the Company announced that an independent review on the Pittong processing plant had been completed.
This independent review confirmed that the nameplate processing capacity of the Pittong plant could reach ~60,000 tonnes
per annum if certain plant items were upgraded. Due to the forecast increasing demand for kaolin, from both domestic and
international customers, and off the back of this independent review, the Board approved an upgrade and optimisation project
to commence at Pittong.
In February 2023, the Company announced that it had successfully completed, on time and on budget, the above-mentioned
Pittong plant upgrade and optimisation project. In February 2023, the Pittong plant was operated continuously over a 6-day
period, and produced in total, 1,004 tonnes of hydrous kaolin. This represents a 245% uplift in production when compared
to average weekly production rates achieved in the previous year of 410 tonnes. This result validates Pittong’s ability to
produce ~50,000 tonnes per annum of hydrous kaolin, representing an 83% utilisation rate of the 60,000 tonnes name plate
processing capacity.
New sales orders received, additional turnover generated
Bolstering the Company’s earnings, Suvo signed a major take or pay Offtake Agreement (“Agreement”) with Chaozhou
Chengcheng Industrial Co.,Ltd (“Chaozhou”) in November 2022. This is a major supply agreement for the Company covering
a minimum order quantity of 4,275 tonnes over a three-year term.
The hydrous kaolin to be supplied under this Agreement will primarily be used in the inks and pharmaceutical sectors, with
the contract valued at between ~A$3.25 million to A$3.50 million, depending on delivery location and a forecast exchange
rate of USD: AUD 0.65:1. An Offtake of this size is in line with the Company’s growth strategy and justifies the upgrade of its
Pittong plant.
In April 2023, Suvo signed another Sales Agreement (“the Agreement”) with Chinese distributor, Qingdao Minglang New
Material Co., Ltd (“Qingdao”). The Agreement covers up to 500 tonnes (+/-10%) of hydrous kaolin to be supplied between
May 2023 and December 2024 and is valued at ~A$0.4 million (based on an exchange rate of USD: AUD 0.65:1).
Suvo’s strategy for the next 12 months has been clearly defined, which is to increase sales of hydrous kaolin in the Asia
Pacific. The Company has a newfound depth of knowledge with respect to hydrous kaolin industry trends and market
dynamics throughout Asia Pacific which it can now leverage. Being an extremely opaque market, to sell the additional
hydrous kaolin tonnes available from the Company’s Pittong plant requires an in depth and acute understanding of each
region throughout Asia. Management is confident that it is acquiring the necessary knowledge of how the market works, and
the Company has identified a number of opportunities which it is currently pursuing.
3
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
Directors’ Report
As part of this newly formed strategy, new channel partners have been appointed throughout Asia Pacific, including
Indonesia, Philippines, China, Japan, Korea and India. A significant number of new end users throughout Asia Pacific have
been strategically targeted and product testing of Pittong hydrous kaolin is well advanced. The Company looks forward to
updating the market in the near term as new sales agreements are executed.
In June 2023, the Company signed a three-year agreement (valued at $A1.5 - A2.0m) with BQ Nominees Pty Ltd trading as
Barfold Quarry (“Barfold”) for the sale of silica sand, a by-product from its hydrous kaolin operation at Pittong, Victoria.
Barfold is a basalt quarry and recycled concrete company and will use the Pittong silica sand in its premix concrete. The
Company currently operates three batching plants throughout Victoria and is in the process of building a fourth. Subsequent
to the reporting period end, Barfold has mobilised its own mobile equipment at the Pittong processing facility and commenced
dry screening of the existing silica sand stockpiles. All processing, capital and haulage costs are incurred by Barfold.
Suvo estimates the current silica sand stockpiled at the Pittong processing facility is ~200,000 tonnes, of which ~90%
(180,000 tonnes) is saleable silica sand.
Due to the supply shortages of sand and growth in the construction industry, it is expected that all 180,000 tonnes of silica
sand stockpiled at the Pittong processing facility will be processed and hauled by Barfold in the first year of the agreement.
Post depletion of the current stockpiles, sales of the by-product will be linked to production of hydrous kaolin at Pittong.
Based on current recoveries, 1 tonne of hydrous kaolin produced generates ~1.2 tonnes of saleable silica sand. Barfold will
process and purchase all available future production during the term of the agreement.
This is a great result for Suvo as it is estimated the cost to the Company to re-locate and backfill would be approximately $9
per tonne in labour and equipment. Not only is the Company generating free cash-flow, the sale of the silica sand is reducing
a future cash flow burden.
Corporate
As part of a overall strategy to refresh the Suvo Board, Mr Hugh Thomas and Dr Agu Kantsler were appointed to the Board
in June 2023 and September 2023 respectively. Mr Hugh Thomas was initially appointed as Chief Executive Officer of the
Company and was subsequently appointed as Managing Director, whilst Dr Agu Kantsler serves as an independent Non-
Executive Director.
With over 35 years’ industry experience, Mr Thomas brings a strong mix of commercial and operational experience to Suvo,
having held several executive positions across the natural resources sector. Mr Thomas’ previous positions include Managing
Director and Head of Asia Pacific Natural Resources for both JP Morgan and Morgan Stanley in Hong Kong, Head of Natural
Resources Investment Banking at Investec Bank in Sydney and Partner at Deloitte Corporate Finance Pty Ltd.
Dr Agu Kantsler B.SC (hons), Ph.D., G.A.I.C.D., FTSE, has over 45 years of experience in the international and Australian
upstream oil and gas industry and has spent over 20 years in senior leadership positions and 12 years serving on the boards
of several listed and private companies. He is currently the Managing Director of Transform Exploration Pty Ltd and a Non-
Executive Director of Central Petroleum Limited.
The appointment of Mr Hugh Thomas and Dr Agu Kantsler follows the wider Company strategy to refresh the Board with the
appropriate skillset to support the Company’s next phase of operations and development of its portfolio of assets.
Previous Chairman Mr Henk Ludik resigned from the Board in June 2023 and Non-Executive Director Dr Ian Wilson sadly
passed in the same month. As this time, Mr Aaron Banks assumed the role of Interim Non-Executive Chairman.
Projects
On 17 January 2023, the Company announced that the tenement purchase for 100% of exploration license application
E70/4981, located in the Muchea region of Western Australia, was completed. The exploration license remains under
application as at the date of this report.
Subsequent to the reporting period end, the Company announced that it would not progress with the remaining stages of the
Dingo HPA Pty Ltd (“Dingo”) earn-in agreement (“Agreement”), and as a result, the Company agreed to sell its 26% share
at an agreed price of A$175,000. The divestment process is expected to be completed during the quarter ended 31 December
2023.
4
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
Directors’ Report
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 29 August 2023, the Company announced that it would not progress with the remaining stages of the Dingo HPA Pty Ltd
(“Dingo”) earn-in agreement (“Agreement”), and as a result, the Company agreed to sell its 26% share at an agreed price of
A$175,000. The divestment process is expected to be completed during the quarter ended 31 December 2023.
On 5 September 2023, Dr Agu Kantsler was appointed as Non-Executive Director of the Company.
Apart from matters discussed above, no other matter or circumstance has arisen since 30 June 2023 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.
Likely developments and expected results of operations
The Group intends to continue its exploration, development and production activities on its existing operations and 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.
Material business risks
Exploration and development
The Company’s mining tenements are at various stages of exploration, and potential investors should understand that mineral
exploration and development are high-risk undertakings. There can be no assurance that future exploration of these
tenements, or any other mineral tenements that may be acquired in the future, will result in the discovery of an economic
resource. Even where an apparently viable resource is identified, there is no guarantee that it can be economically exploited.
Staffing and reliance on key management
The Company relies on the experience and knowledge of key members of its staff. In the event that key personnel leave and
the Company is unable to recruit suitable replacements, such loss could have a materially adverse effect on the Company.
Capital and funding requirements
Suvo is not yet at the stage where it is generating positive cash flows at the group level. Further, no assurance can be given
that Suvo will become profitable in the future. Accordingly, the Company may require additional equity or debt funding in the
short, medium or long term. The ability of Suvo to access funding is never certain and is dependent on a multitude of factors,
including the macro-economic conditions in Australia and overseas.
5
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
Directors’ Report
Information on directors
Name:
Title:
Experience and expertise:
Aaron Banks
Interim Non-Executive Chairman (appointed 7 March 2023), Executive Director
(resigned 7 March 2023)
Aaron 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. In 2015 as founder and Managing Director
of Australian Silica Pty Ltd, Mr Banks discovered one of the largest high grade silica
sand resources in the world.
Whilst on the Board of Australian Silica he successfully negotiated the sale of the
Muchea Silica Sand Project to Ventnor Resources Limited which pivoted the former
base metals explorer to the emerging silica sand producers known today as VRX Silica
Limited (ASX:VRX). In 2020 he vended his private companies into what is Suvo
Strategic Minerals Limited today. Aaron has an extensive background in industrial
minerals and has focused on developing emerging assets globally.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
75,319,527
Interests in shares:
None
Interests in options:
15,000,000
Interests in performance rights:
Name:
Title:
Experience and expertise:
Hugh Thomas
Managing Director (appointed 15 June 2023)
Mr Thomas has over 35 years’ industry experience, with a strong mix of commercial
and operational experience, having held several executive positions across the natural
resources sector. Previous positions include Managing Director and Head of Asia
Pacific Natural Resources for both JP Morgan and Morgan Stanley in Hong Kong, Head
of Natural Resources Investment Banking at Investec Bank in Sydney and Partner at
Deloitte Corporate Finance.
NT Minerals Limited (ASX: NTM)
Other current directorships:
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
7,500,000
Interests in performance rights:
Name:
Title:
Experience and expertise
Other current directorships:
Former directorships (last 3 years): Alterra Limited (ASX:1AG)
Special responsibilities:
Interests in shares:
Interests in options:
Interests in performance rights:
None
None
None
5,895,000
Oliver Barnes
Non-Executive Director
Oliver Barnes has over 25 years’ experience in natural resources and asset
development with expertise in carbon, rural development, ESG and clean technology
commercialisation. Mr Barnes was previously the Managing Director of an ASX listed
land and water developer and held a senior role with an ASX listed phosphate
technology company. He holds a Bachelor of Science in Agriculture Business
Management.
None
6
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
Directors’ Report
Name:
Title:
Experience and expertise:
Agu Kantsler
Non-Executive Director (appointed 5 September 2023)
Dr Agu Kantsler B.SC (hons), Ph.D., G.A.I.C.D., FTSE, has over 45 years of experience
in the international and Australian upstream oil and gas industry and has spent over 20
years in senior leadership positions and 12 years serving on the boards of several listed
and private companies. He is currently the Managing Director of Transform Exploration
Pty Ltd and a Non-Executive Director of Central Petroleum Limited. He is a former
Director of Oil Search Limited, a former President of the Chamber of Commerce and
Industry Western Australia, a former Director of the Australian Chamber of Commerce
and Industry and a former Chairman and Director of the Australian Petroleum
Production and Exploration Association (APPEA). Dr Kantsler was awarded APPEA’s
gold medal for service to the industry in 2005 and in 2006 was elected to Fellowship of
the Australia Academy of Technological Sciences and Engineering.
Central Petroleum Limited (ASX: CTP)
Other current directorships:
Former directorships (last 3 years): Oil Search Limited (ASX: OSH)
Special responsibilities:
Interests in shares:
Interests in options:
Interests in performance rights:
None
None
None
None
Name:
Title:
Experience and expertise:
Henk Ludik
Non-Executive Director (appointed 7 March 2023, resigned 15 June 2023), Executive
Chairman (appointed 22 August 2022, resigned 7 March 2023), Non-Executive
Chairman (resigned 22 August 2022)
Mr Ludik is a mining engineer with a career spanning over 20 years in mining with
expertise in engineering, feasibility, mine optimisation, ESG and corporate finance. Mr
Ludik has worked on a number of landmark transactions in the resource sector since
2006. Mr Ludik holds a BEng in Mining Engineering, MSc in Oil and Gas Engineering
and an MBA.
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
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:
Name:
Title:
Experience and expertise:
Ian Wilson
Non-Executive Director (resigned 14 June 2023)
Dr. Wilson was an economic geologist with over forty-five years’ international
experience in industrial minerals. He held key technical and management positions in
a major publicly listed mining and construction enterprise, was a Senior Scientific
Officer in what is now the British Geological Survey, and had been an independent
consultant since 2001. His experience spanned the range from exploration and
resource estimation to project development and production, and included global and
regional marketing for a wide variety of industrial minerals, including kaolin, halloysite,
calcium carbonate, talc, bentonite, barytes, magnesite, and others. He authored many
articles in peer-reviewed journals and was a regular contributor to Industrial Minerals
magazine for over 17 years.
He was formerly Secretary of the Mineralogical Society of London (Clay Minerals
Group) and had 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:
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
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:
7
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
Directors’ Report
'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.
Company secretary
Chris Achurch (B Com, CA) holds the role of Company Secretary. Mr Achurch spent 10 years in public practice. 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.
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 2023, and the number of meetings attended by each director were:
Full board
Remuneration Committee1 Audit and Risk Committee1
Attended
Held
Attended
Held
Attended
Held
Nomination and
Aaron Banks
Hugh Thomas
Oliver Barnes
Henk Ludik
Ian Wilson
5
-
5
4
3
5
-
5
5
4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
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
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.
8
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
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 2023, the Group did not engage a remuneration consultant.
Voting and comments made at the Company's 2022 Annual General Meeting ('AGM')
At the 2022 AGM, 97.57% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2022. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
9
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
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.
The key management personnel of the Group consisted of the following persons:
●
●
●
●
Aaron Banks - Interim Non-Executive Chairman (appointed 7 March 2023), Executive Director (resigned 7 March 2023)
Hugh Thomas - Managing Director (appointed 15 June 2023), Chief Executive Officer (appointed 1 April 2023)
Oliver Barnes - Non-Executive Director
Henk Ludik - Non-Executive Director (appointed 7 March 2023, resigned 15 June 2023), Executive Chairman (appointed
22 August 2022, resigned 7 March 2023), Non-Executive Chairman (resigned 22 August 2022)
Ian Wilson - Non-Executive Director (resigned 14 June 2023)
Bojan Bogunovic - Chief Financial Officer
Hanno Van Der Merwe - Chief Operating Officer (appointed 1 December 2022)
●
●
●
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
Other9
$
Total
$
2023
Executive
Directors:
Aaron Banks1
Hugh Thomas2
Henk Ludik3
Non-Executive
Directors:
Aaron Banks1
Oliver Barnes
Henk Ludik3
Ian Wilson5
Other
KMP:
Hugh Thomas2
Bojan Bogunovic
Hanno Van Der
Merwe6
-
16,500
261,639
21,012
48,000
6,000
47,663
82,500
197,083
150,453
830,850
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26,250
2,206
-
-
-
-
22,794
15,797
67,047
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
399,3757
-
225,000
399,375
16,500
512,889
-
87,7944
-
(34,641)8
23,218
135,794
6,000
13,022
-
20,000
13,221
145,744
95,721
385,621
-
46,488
212,738
20,000
882,981 1,800,878
1
2
3
4
5
6
7
8
9
Aaron Banks was Executive Director up until 7 March 2023, he transitioned to Interim Non-Executive Chairman.
Hugh Thomas was appointed Chief Executive Officer on 1 April 2023 and as Managing Director on 15 June 2023.
Henk Ludik was Non-Executive Chairman up until 22 August 2022, he then transitioned to Executive Chairman. He held
this role until 7 March 2023, transitioning to Non-Executive Director. He resigned as Non-Executive Director on 15 June
2023.
Includes $31,945 in performance rights issued to ESG-F Holdings Pty Ltd, a related party of Oliver Barnes.
Salary represents the period 1 July 2022 to 14 June 2023.
Salary represents the period 1 December 2022 to 30 June 2023.
These performance rights were issued to Aaron Banks in his capacity as Executive Director.
Relates to performance rights forfeited due to cessation of directorship.
Equity settled performance rights.
10
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
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
other4
$
Total
$
2022
Executive
Directors:
Aaron Banks
Robert Martin
Non-Executive
Directors:
Ian Wilson
Henk Ludik1
Oliver Barnes1
Leonard
Troncone2
208,000
287,833
-
50,000
46,348
14,000
14,000
4,455
-
-
-
-
-
Other
KMP:
Bojan Bogunovic3
142,500
717,136
50,000
-
-
-
-
-
-
-
-
20,800
-
-
-
-
445
14,250
35,495
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
433,014
-
661,814
337,833
34,641
-
-
80,989
14,000
14,000
-
4,900
143,342
300,092
610,997 1,413,628
1
2
3
4
Salary represents the period 14 March 2022 to 30 June 2022.
Salary represents the period 1 July 2021 to 29 July 2021.
Salary represents the period 1 October 2021 to 30 June 2022.
Equity settled performance rights.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Executive Directors:
Aaron Banks
Hugh Thomas
Henk Ludik
Non-Executive Directors:
Aaron Banks
Oliver Barnes
Henk Ludik
Ian Wilson
Other KMP:
Hugh Thomas
Bojan Bogunovic
Hanno Van Der Merwe
Fixed remuneration
2022
2023
At risk - STI
At risk - LTI
2023
2022
2023
2022
-
100%
56%
100%
35%
100%
366%1
86%
57%
78%
35%
-
-
-
100%
100%
57%
-
52%
-
-
-
-
-
-
-
-
-
5%
-
-
-
-
-
-
-
-
-
-
-
100%
-
44%
-
65%
-
-266%1
14%
38%
22%
65%
-
-
-
-
-
43%
-
48%
-
1
Due to reversals of performance rights issued in prior years.
11
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
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:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Hugh Thomas
Managing Director (appointed 15 June 2023) and Chief Executive Officer (appointed 1
April 2023)
1 April 2023
Open
Consultancy fee of $33,000 plus GST per month. The fee will be reviewed annually in
accordance with the Company’s policies and procedures. 4-week termination notice by
either party, the Company may at any time pay a cash bonus, non-solicitation and non-
compete clauses.
Bojan Bogunovic
Chief Financial Officer
1 October 2021
Open
Base salary of $275,000 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.
Hanno Van Der Merwe
Chief Operating Officer (appointed 1 December 2022)
1 December 2022
Open
Base salary of $257,918 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. 5-week termination notice by either party, the Company may at any
time pay a cash bonus, non-solicitation and non-compete clauses.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
12
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
Directors’ Report
Share-based compensation
Shares
During the year Chief Financial Officer, Bojan Bogunovic received $20,000 worth of shares as part of compensation.
Performance rights
During the year, 24,645,000 performance rights were issued to Directors and 11,250,000 performance rights were issued to
other key management personnel. Of the performance rights issued to Directors, 4,391,958 were exercised, and 6,858,042
were forfeited during the year. The performance rights convert into fully paid ordinary shares in the capital of the Company
upon achievement of the following milestones:
a. One third of the performance rights will convert into ordinary shares on a one-for-one basis upon achieving
refined Kaolin production of at least 35kt across any 12-month period commencing on or after the date of issue
and ending within 3 years after the date of issue.
b. One third of the performance rights will convert into ordinary shares on a one-for-one basis upon achieving
refined Kaolin production of at least 50kt across any 12-month period commencing on or after the date of issue
and ending within 3 years after the date of issue.
c. One third of the performance rights will convert into ordinary shares on a one-for-one basis upon the Company’s
VWAP being at least $0.18 over 20 consecutive trading days on which the Company’s shares have actually
traded, expiring 3 years after the date of issue.
In addition to the above, 7,500,000 performance rights were granted to the Chief Executive Officer. The performance rights
convert into fully paid ordinary shares in the capital of the Company upon achievement of the following milestones:
a. One third of the performance rights will convert into ordinary shares on a one-for-one basis upon the Company’s
VWAP being at least $0.08 over 20 consecutive trading days on which the Company’s shares have actually
traded, expiring 3 years after the date of issue.
b. One third of the performance rights will convert into ordinary shares on a one-for-one basis upon the Company’s
VWAP being at least $0.13 over 20 consecutive trading days on which the Company’s shares have actually
traded, expiring 3 years after the date of issue.
c. One third of the performance rights will convert into ordinary shares on a one-for-one basis upon the Company’s
VWAP being at least $0.18 over 20 consecutive trading days on which the Company’s shares have actually
traded, expiring 3 years after the date of issue.
For the year ended 30 June 2023, an expense of $882,981 has been recognised in relation to the performance rights issued
to Directors and other key management personnel. Unless otherwise stated, the performance rights have not converted to
ordinary shares as at the date of this report.
Additional information
The earnings of the Group for the four years to 30 June 2023 are summarised below:
Sales revenue
EBITDA
EBIT
Loss after income tax
2023
$
2022
$
2021
$
20201
$
11,259,102 13,957,078
(1,348,513)
(1,888,438)
(1,951,007)
(7,533,562)
(8,130,410)
(8,101,122)
6,510,970
(1,671,660)
(2,238,073)
(2,220,638)
-
(1,546,584)
(1,546,584)
(1,546,584)
1 The suspension of trading in the securities of Suvo Strategic Minerals Limited (‘SUV’) was lifted from the commencement
of trading on Friday, 7 August 2020, following its re-compliance with Chapters 1 and 2 of the ASX Listing Rules.
13
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
Directors’ Report
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)
2023
2022
2021
20201
0.026
-
(1.14)
0.04
-
(0.32)
0.15
-
(0.43)
0.02
-
(0.19)
1 The suspension of trading in the securities of Suvo Strategic Minerals Limited (‘SUV’) was lifted from the commencement
of trading on Friday, 7 August 2020, following its re-compliance with Chapters 1 and 2 of the ASX Listing Rules.
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
the start of
the year
Exercise of Received
performance
as part of
rights
remuneration Acquired
Disposals/
other
Balance at
the end of
the year
Ordinary shares
Aaron Banks
Hugh Thomas
Oliver Barnes
Henk Ludik
Ian Wilson
Bojan Bogunovic
Hanno Van Der Merwe
72,564,516
-
-
-
-
-
-
72,564,516
-
-
-
4,391,958
-
600,000
-
4,991,958
-
-
-
-
-
522,619
-
522,619
1
Cessation of directorship on 15 June 2023.
- 75,319,527
2,755,011
-
-
-
-
-
-
-
- (4,391,958)1
-
-
-
(250,000) 1,247,619
375,000
-
-
76,567,146
3,130,011 (4,641,958)
-
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:
Balance at
the start of Granted as
the year
remuneration Exercised
Expired/
forfeited
Net change
other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(500,000)1
93,7502
-
(406,250)
-
-
-
-
-
93,750
-
93,750
Options over ordinary shares
Aaron Banks
Hugh Thomas
Oliver Barnes
Henk Ludik
Ian Wilson
Bojan Bogunovic
Hanno Van Der Merwe
-
-
-
-
500,000
-
-
500,000
1
2
Cessation of directorship on 14 June 2023.
Free-attaching options.
-
-
-
-
-
-
-
-
14
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
Directors’ Report
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:
Balance at
the start of Granted as
the year
remuneration Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Performance rights
Aaron Banks
Hugh Thomas
Oliver Barnes
Henk Ludik
Ian Wilson
Bojan Bogunovic
Hanno Van Der Merwe
7,500,000
20,833,333
-2
-
5,895,0003
-
- 11,250,000
-
933,333
5,250,000
1,800,000
6,000,000
-
23,566,666 35,895,000
-
-
-
(4,391,958)
-
(600,000)
-
(6,666,666) 21,666,6671
-
5,895,000
-
-
6,450,0004
6,000,000
(4,991,958) (14,458,041) 40,011,667
-
-
(6,858,042)
(933,333)
-
-
1
2
3
4
Subsequent to year end, 6,666,667 of these performance rights lapsed.
Hugh Thomas was granted 7,500,000 performance rights in his capacity as Chief Executive Officer. Subsequent to year
end, and as part of Hugh’s appointment as Managing Director of the Company, the vesting conditions of Hugh’s
performance rights were modified and subsequently issued.
Balance includes 2,145,000 performance rights issued to ESG-F Holdings Pty Ltd, a related party of Oliver Barnes.
Subsequent to year end, 600,000 of performance rights were exercised into ordinary shares.
Other transactions with key management personnel and their related parties
During the financial year, payments for consultancy services from ESG-F Holdings Pty Ltd and ESG-F Pty Ltd (Director-
related entities of Oliver Barnes) of $116,366 were made. Amounts owing to related parties as at 30 June 2023 were $4,000
for director fees. All transactions were made on normal commercial terms and conditions and at market rates.
On 17 January 2023, the Company announced the completed acquisition of mining tenement E70/4981 (owned by Director
Aaron Banks), a highly prospective silica sand project near Muchea, north of Perth, Western Australia.
This concludes the remuneration report, which has been audited.
15
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
Directors’ Report
Shares under option
Unissued ordinary shares of Suvo Strategic Minerals Limited under option at the date of this report are as follows:
Grant date
23-Dec-2020
15-Dec-2022
15-Dec-2022
17-Feb-2023
17-Feb-2023
17-Feb-2023
27-Jun-2023
Expiry date
31-Dec-2023
6-Dec-2025
6-Dec-2025
16-Mar-2026
16-Mar-2026
16-Mar-2026
26-Jun-2026
Exercise
price
Number
under option
$0.075
$0.15 12,000,000
1,000,000
$0.10 12,500,000
5,000,000
$0.08
$0.12
7,500,000
$0.16 12,500,000
5,000,000
$0.06
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 under performance rights
Unissued ordinary shares of Suvo Strategic Minerals Limited under performance rights at the date of this report are as
follows:
Grant date
5-Oct-2021
17-Nov-2021
21-Oct-2022
30-Nov-2022
13-Dec-2022
30-Aug-2023
Expiry date
24-Nov-2026
24-Nov-2026
16-Nov-2025
16-Dec-2025
3-Jan-2026
6-Sep-2026
Number
under
performance
rights
Exercise
price
2,600,000
nil
7,500,000
nil
5,895,000
nil
nil
7,500,000
nil 19,500,000
7,500,000
nil
On 7 August 2023, 13,333,333 performance rights expired.
Shares issued on the exercise of options and performance rights
During the year ended 30 June 2023, 2,483,333 shares were issued on the exercise of options, and 4,991,958 shares were
issued on the exercise of performance rights. Subsequent to year end, 241,667 shares were issued on the exercise of
options, and 600,000 share were issued on the exercise of performance rights.
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.
16
Suvo Strategic Minerals Limited
Directors' Report
30 June 2023
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 30 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 30 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 RSM Australia Partners
There are no officers of the Company who are former partners of RSM Australia Partners.
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.
Auditor
RSM Australia Partners 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.
On behalf of the directors
Aaron Banks
Interim Non-Executive Chairman
29 September 2023
Perth
17
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Suvo Strategic Minerals Limited for the year ended 30 June
2023, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 29 September 2023
TUTU PHONG
Partner
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
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
Annual mineral resource statement
Shareholder information
20
21
22
23
24
56
57
61
63
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
Level 11
40 The Esplanade
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 29 September 2023. The
Directors have the power to amend and reissue the financial statements.
19
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Consolidated statement of profit or loss and other
comprehensive income
Profit or loss from continuing operations
Revenue
Cost of sales
Gross profit before depreciation and amortisation
Depreciation and amortisation relating to kaolin production
Gross (loss)/profit from operations
Other income
Administration and other corporate expenses
Foreign exchange profit
Other depreciation and amortisation expenses
Exploration and evaluation expenditure impairment
Property, plant and equipment written off
Share based payments expense
Share of loss of associate accounted for using the equity method
Loss before income tax expense from continuing operations
Consolidated
Note
2023
$
2022
$
4
5
13
6
17
11,259,102
(10,961,231)
297,871
(300,415)
(2,544)
13,957,078
(10,856,820)
3,100,258
(287,661)
2,812,597
306,975
(4,595,479)
44,398
(296,433)
(40,768)
(2,097,507)
(1,408,628)
(11,136)
(8,101,122)
220,281
(4,025,143)
28,949
(252,264)
-
-
(735,427)
-
(1,951,007)
Income tax expense
7
-
-
Loss after income tax expense from continuing operations
Loss after income tax expense for the year
Other comprehensive income
Items that may be reclassified through profit or loss
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
Owners of Suvo Strategic Minerals Limited
(8,101,122)
(1,951,007)
(8,101,122)
(1,951,007)
-
-
(8,101,122)
(1,951,007)
(8,101,122)
(1,951,007)
(8,101,122)
(8,101,122)
(1,951,007)
(1,951,007)
Loss per share for loss attributable to owners of Suvo Strategic Minerals
Limited
Basic and diluted loss per share (in cents)
8
(1.14)
(0.32)
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 2023
Consolidated statement of financial position
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other
Total current assets
Non-current assets
Property, plant and equipment
Mine properties
Mineral interest acquisition and exploration expenditure
Right-of-use assets
Investment in associate
Other financial assets
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Lease liabilities
Interest-bearing liabilities
Total current liabilities
Non-current liabilities
Provisions
Lease liabilities
Interest-bearing liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
1 Restated – refer to note 39
Consolidated
Restated
Note
2023
$
20221
$
9
10
11
12
27
13
14
15
16
17
12
18
19
20
21
22
23
21
3,163,638
1,416,028
2,090,431
71,000
787,408
7,528,505
6,687,336
2,039,517
1,896,215
71,000
488,562
11,182,630
4,244,441
2,084,682
5,824,404
341,681
208,864
2,184,233
-
14,888,305
4,631,652
2,002,842
5,591,674
611,985
-
2,184,230
30,996
15,053,379
22,416,810
26,236,009
1,899,963
808,850
387,594
641,161
3,737,568
3,407,957
731,102
407,927
-
4,546,986
2,567,057
113,689
528,648
3,209,394
2,504,467
499,955
-
3,004,422
6,946,962
7,551,408
15,469,848
18,684,601
24
25
26
42,230,249
7,765,360
(34,525,761)
38,732,317
6,376,923
(26,424,639)
15,469,848
18,684,601
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 2023
Consolidated statement of changes in equity
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2021
31,191,948
5,641,496 (24,473,632) 12,359,812
Loss after income tax expense for the year
Other comprehensive loss for the year, net of
tax
Total comprehensive loss for the year
Transactions with owners in their capacity as
owners:
Shares issued
Shares issue costs
Share-based payments (note 6)
-
-
-
-
(1,951,007)
(1,951,007)
-
-
-
-
(1,951,007)
(1,951,007)
8,066,350
(525,981)
-
- -
- -
735,427 -
8,066,350
(525,981)
735,427
Balance at 30 June 2022
38,732,317
6,376,923 (26,424,639) 18,684,601
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2022
38,732,317
6,376,923 (26,424,639) 18,684,601
Loss after income tax expense for the year
Other comprehensive loss for the year, net of
tax
Total comprehensive loss for the year
Transactions with owners in their capacity as
owners:
Shares issued
Share issue costs
Share-based payments (note 6)
-
-
-
-
(8,101,122)
(8,101,122)
-
-
-
-
(8,101,122)
(8,101,122)
3,771,300
(273,368)
-
-
-
1,388,437 -
-
-
3,771,300
(273,368)
1,388,437
Balance at 30 June 2023
42,230,249
7,765,360 (34,525,761) 15,469,848
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 2023
Consolidated statement of cash flows
Cash flows from operating activities
Receipts in the course of operations
Payments to suppliers and employees
Income taxes received
Interest received
Interest paid
Grants received
Consolidated
Note
2023
$
Restated
20221
$
12,037,142
(15,848,187)
-
101,049
(98,536)
24,600
14,553,843
(14,947,751)
153,769
11,611
(45,694)
32,471
Net cash used in operating activities
28
(3,783,932)
(241,751)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation
Payments for mine properties
Payments for investments in associates
Other financial assets – term deposits at bank
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from exercise of options
Share issue transaction costs
Financed equipment
Repayment of lease liabilities
Repayment of interest-bearing liabilities
Net cash received from financing activities
Net (decrease)/increase 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
17
(2,621,883)
(556,310)
(119,634)
(220,000)
-
(2,690,160)
(954,305)
(348,934)
-
(1,266,000)
(3,517,827)
(5,259,399)
3,600,000
74,500
(181,858)
801,353
(337,302)
(178,632)
8,066,347
-
(525,978)
-
(337,433)
-
3,778,061
7,202,936
(3,523,698)
6,687,336
-
1,701,786
4,985,550
-
Cash and cash equivalents at the end of the financial year
9
3,163,638
6,687,336
1 Restated – refer to note 39
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 2023
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.
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.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business
activities and the realisation of assets and discharge of liabilities in the normal course of business. As disclosed in the financial
statements, the Group incurred a loss of $8,101,122 and had net cash outflows from operating activities of $3,783,932 for
the year ended 30 June 2023. As at that date the Group had a cash balance of $3,163,638.
The Directors believe that it is appropriate to continue to adopt the going concern basis of preparation as per the detailed
cash flow forecast prepared by Management. The cash flow forecast indicates that the Group expects to have sufficient
working capital and other funds available to continue for at least the next twelve-month period ending 30 September 2024.
The key assumptions used to derive at a detailed cashflow forecast relate to future sales and costs.
Whilst the Directors recognise that the key assumptions underpinning the cash flow forecast are subject to future events,
some of which are beyond the direct control of the Group, the Directors have assessed the cash flow forecast and believe
that it is appropriate that the Group continues to prepare its financial report on the going concern basis.
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 34.
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 2023 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.
24
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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.
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.
25
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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.
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.
Sale of kaolin and other minerals
Sale of kaolin and other minerals is recognised at the point of sale, which is where the customer has taken delivery of the
goods, the risks and rewards are transferred to the customer and there is a valid sales contract. Amounts disclosed as
revenue are net of sales returns and trade discounts.
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.
26
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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.
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.
27
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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.
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
3-40 years
2-25 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.
28
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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.
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.
29
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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.
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.
30
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
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.
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:
●
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.
●
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.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions
are considered to vest irrespective of whether that market condition has been met, provided all other conditions are satisfied.
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.
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.
31
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
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.
Investment in Associates
Associates are entities over which the Group has significant influence but not control. Investments in associates are
accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate is
recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive income.
Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes in the
Group's share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the
investment and is neither amortised nor individually tested for impairment. Dividends received or receivable from associates
reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured
long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on
behalf of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the associate and recognises
any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of the retained
investment and proceeds from disposal is recognised in profit or loss.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
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.
32
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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.
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 2023. 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.
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. Refer to note 6 for further
information.
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.
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.
33
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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).
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations
or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously
estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written
down.
Note 3. 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 the kaolin production operating segment are the manufacture and sale of refined
kaolin in Australia and overseas.
Major customers
During the year ended 30 June 2023 approximately $3,699,182 (2022: $4,697,338) of the Group’s external revenue was
derived from sales to two major Australian paper producers.
34
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Operating segment information
Corporate Exploration
Kaolin
& Evaluation Production
$
$
$
30 June 2023
Total
$
Revenue
Sales to external customers
Total segment revenue
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs
Loss before income tax expense
Income tax expense
Loss after income tax expense
Assets
Segment assets
Liabilities
Segment liabilities
Revenue
Sales to external customers
Total segment revenue
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs
Loss before income tax expense
Income tax expense
Loss after income tax expense
Assets
Segment assets
Liabilities
Segment liabilities
-
-
- 11,259,102 11,259,102
- 11,259,102 11,259,102
(4,832,911)
(228,367)
29,022
(36,189)
(5,068,445)
-
(5,068,445)
(42,886)
(729)
-
(1,780)
(45,395)
-
(45,395)
(2,657,765)
(7,533,562)
(367,752) (596,848)
98,802 127,824
(60,567) (98,536)
(2,987,282) (8,101,122)
- -
(8,101,122)
(2,987,282)
2,741,028
5,836,072 13,839,710 22,416,810
958,020
-
5,988,942
6,946,962
Corporate
Exploration
& Evaluation Production
Kaolin
$
$
$
30 June 2022
Total
$
-
-
- 13,957,078 13,957,078
- 13,957,078 13,957,078
(3,553,986)
(187,753)
3,451
(39,413)
(3,777,701)
-
(3,777,701)
(8,492)
(1,457)
-
-
(9,949)
-
(9,949)
(1,342,661)
2,219,817
(350,715) (539,925)
2,308 5,759
(34,767) (74,180)
(1,951,007)
- -
(1,951,007)
1,836,643
1,836,643
6,007,325
5,619,554 14,609,130 26,236,009
1,051,410
282,811
6,217,187
7,551,408
35
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 4. Revenue
Revenue from contracts with customers
Sale of goods
Revenue from continuing operations
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Geographical regions
Australia and New Zealand
Asia
Rest of the World
Note 5. Administration and other corporate expenses
Employee expenses
Legal fees
Accounting fees
Compliance fees
Other administration costs
Consolidated
2023
$
2022
$
11,259,102 13,957,078
11,259,102 13,957,078
Consolidated
2023
$
2022
$
7,182,454
3,474,701
601,947
8,555,013
5,023,716
378,349
11,259,102 13,957,078
Consolidated
2023
$
2022
$
1,601,243
265,099
203,672
243,666
2,281,799
1,523,277
164,427
240,511
237,672
1,859,256
4,595,479
4,025,143
36
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 6. Share based payments expense
Shares issued to key management personnel1
Shares issued to advisors1
Options issued to advisors1
Performance rights issued to key management personnel1
Performance rights issued to others1
Options issued to lead and co-lead managers2
Consolidated
2023
$
2022
$
20,000
46,000
317,374
882,981
142,273
1,408,628
-
-
-
610,997
124,430
735,427
45,809
-
1,454,4373
735,4273
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.
3 Of this balance, $1,388,437 is recorded in Reserves and $66,000 is recorded in Issued Capital (2022: $735,427 recorded
in Reserves).
Options
Set out below is a summary of the movement in options 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
10-May-2019
30-Jul-2020
24-Nov-2020
23-Dec-2020
24-Mar-2022
15-Dec-2022
15-Dec-2022
17-Feb-2023
17-Feb-2023
17-Feb-2023
27-Jun-2023
4-Sep-2022
30-Jul-2023
30-Jul-2023
31-Dec-2023
30-Jun-2023
6-Dec-2025
6-Dec-2025
16-Mar-2026
16-Mar-2026
16-Mar-2026
26-Jun-2026
$0.08 5,166,670 -
-
$0.03 101,866,903
-
500,000
$0.03
-
$0.15 12,000,000
-
$0.15 30,751,680
-
1,000,000
- 12,500,000
5,000,000
-
-
7,500,000
- 12,500,000
5,000,000
-
150,285,253 43,500,000
$0.075
$0.10
$0.08
$0.12
$0.16
$0.06
- (5,166,670) -
- 99,383,570
(2,483,333)
-
-
500,000
-
- 12,000,000
- (30,751,680) -
-
-
1,000,000
- 12,500,000
-
-
-
5,000,000
-
-
7,500,000
- 12,500,000
-
-
-
5,000,000
(2,483,333) (35,918,350) 155,383,570
Weighted average exercise price
$0.07
$0.11
$0.03
$0.14
$0.06
Set out below are the options exercisable at the end of the financial year:
Grant date
Expiry date
10-May-2019
30-Jul-2020
24-Nov-2020
23-Dec-2020
24-Mar-2022
15-Dec-2022
17-Feb-2023
27-Jun-2023
4-Sep-2022
30-Jul-2023
30-Jul-2023
31-Dec-2023
30-Jun-2023
6-Dec-2025
16-Mar-2026
26-Jun-2026
2023
2022
Number
Number
500,000
5,166,670
-
99,383,570 101,866,903
500,000
12,000,000 12,000,000
- 30,751,680
-
-
-
13,500,000
25,000,000
5,000,000
155,383,570 150,285,253
37
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
The weighted average remaining contractual life of options outstanding at the end of the financial year was 0.84 years (2022:
1.07 years).
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:
Grant date
Expiry date
price
Exercise
Share price at Expected
volatility
grant date
Dividend
Risk-free
Fair value at
yield
interest rate grant date
15-Dec-2022
15-Dec-2022
17-Feb-2023
17-Feb-2023
17-Feb-2023
27-Jun-2023
6-Dec-2025
6-Dec-2025
16-Mar-2026
16-Mar-2026
16-Mar-2026
26-Jun-2026
Performance rights
$0.075
67%
$0.04
$0.10 N/A – free attaching options
$0.049
$0.08
$0.049
$0.12
$0.049
$0.16
$0.026
$0.06
75%
75%
75%
69%
-
-
-
-
-
3.15%
$0.0117
3.49%
3.49%
3.49%
3.91%
$0.0174
$0.0132
$0.0105
$0.0068
Set out below is a summary of the movement in performance rights during the financial year:
Balance at
the start of
the year
Issued
Exercised
Expired/
lapsed/
other
Balance at
the end of
the year
Key management personnel
Others
44,400,000 35,895,000 (4,991,958) (28,624,708) 46,678,334
(1,000,000) 10,250,000
47,400,000 44,145,000 (4,991,958) (29,624,708) 56,928,334
3,000,000
8,250,000
-
For the performance rights issued during the current year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Grant date
Expiry date
Performance
Milestone
Total
Fair value
at grant date
Issue
date
Vesting
period
Expiry
period
21-Oct-22
21-Oct-22
21-Oct-22
30-Nov-22
30-Nov-22
30-Nov-22
13-Dec-22
13-Dec-22
13-Dec-22
13-Dec-22
13-Dec-22
16-Nov-25
16-Nov-25
16-Nov-25
16-Dec-25
16-Dec-25
16-Dec-25
3-Jan-26
3-Jan-26
3-Jan-26
3-Jan-26
3-Jan-26
a
b
c
a
b
c
a
b
c
d
e
5,715,000 $0.0590
5,715,000 $0.0590
5,715,000 $0.0357
2,500,000 $0.0460
2,500,000 $0.0460
2,500,000 $0.0229
4,250,000 $0.0400
6,500,000 $0.0400
4,250,000 $0.0203
2,250,000 $0.0400
2,250,000 $0.0400
16-Nov-22
16-Nov-22
16-Nov-22
16-Dec-22
16-Dec-22
16-Dec-22
3-Jan-23
3-Jan-23
3-Jan-23
3-Jan-23
3-Jan-23
24 months
30 months
36 months
24 months
30 months
36 months
24 months
30 months
36 months
12 months
18 months
36 months
36 months
36 months
36 months
36 months
36 months
36 months
36 months
36 months
36 months
36 months
44,145,000
Performance milestones
(a) Achieving kaolin production of at least 35kt across any 12-month period commencing on or after the date of issue.
(b) Achieving kaolin production of at least 50kt across any 12-month period commencing on or after the date of issue.
(c) The Company’s VWAP being at least $0.18 over 20 consecutive trading days on which the Company’s shares have
actually traded.
(d) 12 months continuous service from date of issue.
(e) 18 months continuous service from date of issue.
38
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 7. Income tax expense
Income statement
Current income tax
Current income tax charge
Deferred income tax
Relating to origination and reversal of temporary differences
Income tax expense/benefit reported in the income statement
Tax reconciliation
Accounting profit/(loss) before tax from continuing operations
At statutory tax rate of 25% (2022: 25%)
Non-deductible expenses
Tax losses and temporary differences not recognised
Income tax expense/benefit
Deferred tax assets
Inventories
Property, plant and equipment
Trade and other payables
Provisions
Lease liabilities
Mine properties
Blackhole expenditure
Foreign exchange loss
Tax losses
Net off deferred tax liabilities
Net deferred tax asset not recognised
Deferred tax assets
Deferred tax liabilities
Other assets
Mineral interest acqusition and exploration expenditure
Right-of-use assets
Net off deferred tax liabilities
Deferred tax liabilities
Consolidated
2023
$
2022
$
-
-
-
-
-
-
(8,101,122)
(1,951,007)
(2,025,281)
260,061
1,765,220
(487,752)
211,502
276,250
-
-
841
-
23,633
789,405
153,003
15,457
750,664
(5)
3,111,043
(600,079)
(4,243,962)
-
841
-
30,067
808,892
226,971
-
426,516
124
1,509,527
(517,986)
(2,484,952)
-
(137,295)
(377,364)
(85,420)
600,079
-
(56,000)
(308,989)
(152,996)
517,985
-
A potential deferred tax asset, attributable to tax loss incurred in the current period, amounts to approximately $4,243,962
(2022: $2,484,952) 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:
•
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.
39
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 8. 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 9. Cash and cash equivalents
Cash at bank and on hand
Consolidated
2023
$
2022
$
(8,101,122)
(1,951,007)
(8,101,122)
(1,951,007)
Cents
Cents
(1.14)
(0.32)
Number
Number
712,555,052
614,367,846
712,555,052 614,367,846
Consolidated
2023
$
Restated
2022
$
3,163,638
6,687,336
Restatement
Refer to note 39 for details of a restatement of the 30 June 2022 balance to reclassify restricted cash consisting of a bank
card guarantee, a rental guarantee, and a rehabilitation bond.
Note 10. Trade and other receivables
Trade receivables
Consolidated
2023
$
2022
$
1,416,028
2,039,517
Allowance for expected credit losses
The Group has recognised a loss of $Nil in the profit or loss in respect of the expected credit losses for the year ended 30
June 2023.
In relation to the ageing of receivables, 100% (2022: 92%) of trade receivables are current, with nil (2022: 6%) being 0 to 30
days overdue and nil (2022: 2%) being 31 to 60 days overdue.
40
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 11. Inventories
Raw materials
Packaging
Work in progress
Finished goods
Note 12. Other financial assets
Current
Bank card guarantee
Rental guarantee
Non-current
Rehabilitation bond
Rental guarantee
Consolidated
2023
$
2022
$
956,144
420,904
114,481
598,902
1,037,907
324,217
74,101
459,990
2,090,431
1,896,215
Consolidated
2023
$
Restated
2022
$
40,000
31,000
71,000
40,000
31,000
71,000
2,086,000
98,233
2,184,233
2,086,000
98,230
2,184,230
The rehabilitation bond was lodged with the Department of Jobs, Precincts and Regions in Victoria. It serves as surety for
compliance with the conditions of the mining licenses relating to rehabilitation.
Restatement
Refer to note 39 for details of a restatement of the 30 June 2022 balance to reclassify restricted cash to other financial assets.
Note 13. 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
41
Consolidated
2023
$
2022
$
798,934
(337,267)
461,667
798,934
(289,100)
509,834
222,926 222,926
(32,891)
190,035
(54,818)
168,108
3,993,154 4,087,577
(378,488) (155,794)
3,614,666 3,931,783
4,244,441
4,631,652
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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 2021
Additions
Disposals
Depreciation expense1
Balance at 30 June 2022
Additions
Disposals
Depreciation expense1
Write-off2
Balance at 30 June 2023
Land and
buildings
$
Leasehold
Plant and
Improvements equipment
$
$
Total
$
705,529
-
-
1,429,803
3,436,380
(1,275)
(195,695) (21,928) (15,633) (233,256)
4,631,652
512,311
3,436,380
(1,275)
211,963
-
-
3,931,783
190,035
509,834
-
-
(48,167)
-
-
-
(21,927)
-
2,005,911
(492)
(225,029)
(2,097,507)
2,005,911
(492)
(295,123)
(2,097,507)
461,667
168,108
3,614,666
4,244,441
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.
2 During the year, an amount of property, plant and equipment was written off as it related to abandoned projects.
Note 14. Mine properties
Mining properties - at cost
Consolidated
2023
$
2022
$
2,084,682
2,002,842
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 2021
Transfer from exploration expenditure
Additions
Adjustment under provisional accounting
Change in present value of rehabilitation provision
Amortisation expense
Balance at 30 June 2022
Overburden
Asset
$
Mining
Reserves
$
Rehabilitation
Asset
$
Total
$
597,110
92,555
256,379
1,406,616
-
-
2,003,726
-
92,555
-
-
256,379
- - 108,000 108,000
-
(263,130)
(263,130)
(126,231) (68,457) (194,688)
-
2,002,842
1,183,029
-
819,813
-
Additions
Change in present value of rehabilitation provision
Amortisation expense
113,696
-
-
29,969
-
(13,147)
- 143,665
(30,403)
(31,422)
(30,403)
(18,275)
Balance at 30 June 2023
113,696
836,635
1,134,351
2,084,682
42
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 15. Mineral interest acquisition and exploration expenditure
Consolidated
2023
$
2022
$
Mineral interest acquisition and exploration expenditure - at cost
5,824,404
5,591,674
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 2021
Transfer to mine properties
Additions
Balance at 30 June 2022
Additions
Exploration and evaluation expenditure impairment
Balance at 30 June 2023
Exploration
and
evaluation
$
4,436,938
(92,555)
1,247,291
5,591,674
273,498
(40,768)
5,824,404
The Company holds 4 exploration licences by Mt Marshall Kaolin Pty Ltd (Gabbin Kaolin project) and 4 exploration licences
by Watershed Enterprise Solutions Pty Ltd (Eneabba Silica Sands project). On 17 January 2023, the Company announced
the completed acquisition of mining tenement E70/4981 (owned by Director Aaron Banks), a highly prospective silica sand
project near Muchea, north of Perth, Western Australia.
On 31 January 2023, tenement E70/5334, held by Mt Marshall Kaolin Pty Ltd, was surrendered. The $40,768 of exploration
expenditure that related to this tenement was written off. No other impairment has been recognised for the year ended 30
June 2023.
Note 16. Right-of-use assets
Office space - right-of-use
Less: Accumulated depreciation
Motor vehicles - right-of-use
Less: Accumulated depreciation
Consolidated
2023
$
2022
$
608,898
(338,277)
270,621
228,769
(157,709)
71,060
608,898
(135,311)
473,587
228,769
(90,371)
138,398
341,681
611,985
Additions to the right-of-use assets during the year were nil.
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 equipment which are either short-term or low-value leases, so have been
expensed as incurred and not capitalised as right-of-use assets.
43
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 17. Investment in associate
Investment in associate accounted for using the equity method:
Initial investment at cost
Share of associate’s loss
Consolidated
2023
$
2022
$
220,000
(11,136)
208,864
-
-
-
During the year, the Company acquired a 26% share in Dingo HPA Pty Ltd (“Dingo”) through a private placement. The
Company purchased 220,000 fully paid ordinary shares in Dingo, at an issue price of $1.00 per share ($220,000). This
investment in an associate was initially recognised at cost, under the equity method, in accordance with Accounting Standards.
The carrying amount of the investment has decreased to recognise the Company’s 26% share of the loss generated by Dingo
($11,136) from the date of acquisition up to the year ended 30 June 2023. Subsequent to year end, the Company sold its 26%
share for $175,000.
Note 18. Trade and other payables
Trade payables
Accruals
Other payables
Note 19. Current provisions
Annual leave
Long service leave
Other provisions
Make good provision
Note 20. Current lease liabilities
Lease liability
Consolidated
2023
$
2022
$
1,226,346
322,193
351,424
2,251,141
912,450
244,366
1,899,963
3,407,957
Consolidated
2023
$
2022
$
329,076
247,236
14,250
218,288
372,381
342,971
15,750
-
808,850
731,102
Consolidated
2023
$
2022
$
387,594
407,927
387,594
407,927
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. Refer to note 35 for further information on financial instruments.
44
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 21. Interest-bearing liabilities
Current
Insurance funding
Equipment finance
Non-current
Equipment finance
Note 22. Non-current provisions
Long service leave
Rehabilitation
Consolidated
2023
$
2022
$
494,057
147,104
641,161
528,648
528,648
-
-
-
-
-
Consolidated
2023
$
2022
$
55,682
2,511,375
53,809
2,450,658
2,567,057
2,504,467
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 and previous financial year, are set out below:
Consolidated
Balance at 1 July 2021
Additional provisions recognised
Unwinding of discount
Balance at 30 June 2022
Additional provisions recognised
Unwinding of discount
Balance at 30 June 2023
Note 23. Non-current lease liabilities
Lease liability
Refer to note 35 for further information on financial instruments.
45
Rehabilitation
$
2,685,300
(263,128)
28,486
2,450,658
(30,403)
91,120
2,511,375
Consolidated
2023
$
2022
$
113,689
499,955
113,689
499,955
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 24. Equity - issued capital
Consolidated
2023
Shares
2022
Shares
2023
$
2022
$
Ordinary shares - fully paid
809,671,424 680,407,120 42,230,249 38,732,317
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Shares issued - Placement
Shares issued - Share purchase plan
Share issue costs
Balance
Shares issued - Advisory fees
Shares issued - Capital raising fees
Shares issued - Placement
Shares issued - Conversion of Performance Rights
Shares issued - Conversion of Performance Rights
Shares issued - Employee remuneration
Shares issued - Employee remuneration
Shares issued - Placement
Shares issued - Options exercised
Share issue costs
30 Jun 2021
7 Mar 2022
3 May 2022
30 Jun 2022
23 Sep 2022
23 Sep 2022
15 Dec 2022
20 Dec 2022
16 Mar 2023
16 Mar 2023
22 Jun 2023
27 Jun 2023
various
585,508,922
88,235,294
6,662,904
-
680,407,120
931,174
770,000
50,000,000
600,000
4,391,958
102,649
419,970
69,565,220
2,483,333
-
0.085
0.085
0.049
0.040
0.040
0.038
0.051
0.049
0.036
0.023
0.030
31,191,948
7,500,000
566,347
(525,978)
38,732,317
46,000
30,800
2,000,000
-1
-1
5,000
15,000
1,600,000
74,500
(273,368)
Balance
30 Jun 2023
809,671,424
42,230,249
1 This appears as nil as the value is already fully recognised within equity, in the share-based payments reserve.
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 objective 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 is 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.
The capital risk management policy remains unchanged from the 30 June 2022 Annual Report.
46
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 25. Equity - reserves
Share based payments reserve
Consolidated
2023
$
2022
$
7,765,360
6,376,923
7,765,360
6,376,923
Share based payments reserve
The reserve is used to recognise increments and decrements in the fair value of share-based payments.
Movements in reserves
Movements in equity reserves during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2021
Share based payments
Balance at 30 June 2022
Share based payments (note 6)
Balance at 30 June 2023
Note 26. Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Accumulated losses at the end of the financial year
Note 27. Other current assets
Prepayments
GST receivable
Lease receivable
Accrued interest income
Sundry debtors
47
Performance
Rights
$
Options
$
Total
$
- 5,641,496
735,427
735,427
5,641,496
5,641,496
- 735,427
6,376,923
1,025,254 363,183
1,388,437
1,760,681 6,004,679
7,765,360
Consolidated
2023
$
2022
$
(26,424,639) (24,473,632)
(1,951,007)
(8,101,122)
(34,525,761) (26,424,639)
Consolidated
2023
$
2022
$
550,518
165,519
32,325
26,775
12,271
224,002
193,567
70,619
-
374
787,408
488,562
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 28. Reconciliation of loss after income tax to net cash from operating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments expense
Write-off of property, plant and equipment
Exploration and evaluation expenditure impairment
Share of loss of associate
Make good provision
Unwinding of the discount on provisions
Other non-cash items
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
Net cash outflows from operating activities
Non-cash investing and financing activities
Additions to the right-of-use assets
Change in present value of rehabilitation provision
Additions to interest-bearing liabilities
Impairment and write-off
Note 29. Key management personnel disclosures
Consolidated
2023
$
2022
$
(8,101,122)
(1,951,007)
596,848
1,408,628
539,925
735,427
2,097,507 -
40,768 -
11,136 -
218,288 -
28,486
-
91,120
35,000
623,489 522,159
(194,216) (590,581)
87,625 (158,935)
(560,336) 1,010,232
- 153,769
(531,226)
(138,667)
(3,783,932)
(241,751)
Consolidated
2023
$
2022
$
- 567,833
(30,403) (263,130)
-
-
(547,088)
(2,138,275)
(2,715,766)
304,703
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
Short-term employee benefits
Post-employment benefits
Share-based payments
48
Consolidated
2023
$
2022
$
830,850
67,047
902,981
767,136
35,495
610,997
1,800,878
1,413,628
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 30. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the auditor
of the Company, its network firms and unrelated firms:
RSM Australia Partners
Audit or review of the financial statements
Independent expert report
Grant applications
Review of employee share scheme and notice of meeting
Note 31. Related party transactions
Parent entity
Suvo Strategic Minerals Limited is the parent entity.
Subsidiaries
Interests in subsidiaries and associates are set out in note 32 and 33 respectively.
Consolidated
2023
$
2022
$
78,500
6,750
11,000
-
70,000
20,000
-
1,800
96,250
91,800
Key management personnel
Disclosures relating to key management personnel are set out in note 29 and the remuneration report included in the
directors' report.
Transactions with related parties
During the financial year, payments for consultancy services from ESG-F Holdings Pty Ltd and ESG-F Pty Ltd (Director-
related entities of Oliver Barnes) of $116,366 were made.
On 17 January 2023, the Company announced it had completed the acquisition of mining tenement E70/4981 (owned by
Director Aaron Banks), a highly prospective silica sand project near Muchea, north of Perth, Western Australia.
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 2023, $4,000 was
outstanding to related parties (2022: $255,563).
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 2023
Notes to the financial statements
Note 32. 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 Ltd
Mt Marshall Kaolin Pty Ltd
Suvo Australia Pty Ltd
Suvo Minerals Australia Pty Ltd
Kaolin Australia Pty Ltd
Suvo Minerals Technology Pty Ltd (formerly known as
Far North Minerals Pty Ltd)
Note 33. Interests in associates
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Ownership interest
2022
2023
%
%
100% 100%
100%
100%
100%
100%
100%
100%
100%
100%
Australia
100%
100%
Interests in associates are accounted for using the equity method of accounting. Information relating to associates that are
material to the consolidated entity are set out below:
Name
Dingo HPA Pty Ltd
Note 34. Parent entity information
Principal place of business /
Country of incorporation
Australia
Ownership interest
2022
2023
%
%
-
26%
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
50
Parent
2023
$
2022
$
(5,381,711)
(3,779,950)
(5,381,711)
(3,779,950)
Parent
2023
$
2022
$
2,066,510
5,291,593
16,427,868 17,016,599
883,650
733,377
958,020
1,051,410
42,230,250 38,732,317
6,376,923
(34,525,762) (29,144,051)
7,765,360
15,469,848 15,965,189
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
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
Other than those specified in note 36, the parent entity had no contingent liabilities as at 30 June 2023 (30 June 2022: $Nil).
Capital commitments - Property, plant and equipment
The parent entity had committed $Nil for property, plant and equipment as at 30 June 2023 (30 June 2022: $Nil).
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the
following:
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
indicator of an impairment of the investment.
Note 35. 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 cash of US$50,647 as at 30 June 2023 (2022: US$268,515).
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The group is exposed to interest rate risk given it has interest-bearing liabilities at 30 June 2023 of $1,169,809 (2022: nil).
These are principal and interest payment liabilities. Monthly cash outlays of approximately $5,000 per month are required to
service the interest payments. In addition, minimum principal repayments of $641,159 are due during the year ending 30
June 2024. As the interest-bearing liabilities are at fixed rates, an official change in interest rates will have no effect on profit
before tax.
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.
51
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
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.
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 - 2023
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - fixed rate
Lease liability
Interest-bearing liabilities
Total non-derivatives
Consolidated - 2022
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - fixed rate
Lease liability
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
$
-
-
1,270,340
629,623
-
-
-
-
5.98%
6.28%
402,270
703,214
3,005,447
111,777
192,370
304,147
-
400,771
400,771
-
-
-
-
-
1,270,340
629,623
514,047
1,296,355
3,710,365
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
2,251,141
1,156,816
-
-
-
-
5.94%
407,927
3,815,884
384,939
384,939
115,016
115,016
-
-
-
-
2,251,141
1,156,816
907,882
4,315,839
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
52
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 36. Contingent assets and liabilities
On 17 January 2023, the Company announced that the tenement purchase for 100% of exploration license application
E70/4981, located in the Muchea region of Western Australia, was completed. As part of the consideration for the Tenement
Application, the Company agreed to issue or grant (as the case may be) the following royalty interest and deferred
consideration to the Vendor:
(a) Royalty: 4% of the proceeds of gross sales from Product derived from the Tenement Application;
(b) Deferred Consideration Shares: Subject to the following development milestones having first been satisfied, issue to
the Vendor up to $1,550,000 Shares (Deferred Consideration Shares), in the following tranches:
i.
ii.
Grant of Mining License: Upon the grant of a mining license over any area the subject of the
Exploration License. The number of Shares calculated by dividing $1,150,000 by the greater of:
-
-
the 5 Day VWAP; and
$0.15
Grant of Mining Permit: Upon the grant of all necessary mining permits over any part of the Tenement
Application, necessary to commence production (including environmental permits, water licenses,
project management plans and mine closure plans), the number of Shares calculated by dividing
$400,000 by the greater of:
- The 5 Day VWAP; and
-
$0.15
The Deferred Consideration Shares must be issued by 21 October 2027 (5 years from the date of shareholder approval), or
the rights to the Deferred Consideration Shares will lapse.
Other than the above, the Group had no other contingent assets or liabilities at the current and previous reporting date.
Note 37. Commitments
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Rent, rates and minimum tenement expenditure for next 12 months
Note 38. Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2021
Net cash from/used in financing activities
Other additions to liabilities
Balance at 30 June 2022
Net cash from/used in financing activities
Other additions to liabilities
Balance at 30 June 2023
53
Consolidated
2023
$
2022
$
477,952
475,546
477,952
475,546
Interest-
bearing
liabilities
$
Lease
liabilities
$
-
-
-
-
286,773
(337,433)
958,542
907,882
622,721
547,088
(406,599)
-
1,169,809
501,283
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 39. Restatement
Consolidated statement of financial position
Current assets – cash and cash equivalents
Balance reported
Reclassification of bank guarantees and term deposits
Restated balance
Current assets – other financial assets
Balance reported
Reclassification of bank guarantees and term deposits
Restated balance
Non-current assets – other financial assets
Balance reported
Reclassification of bank guarantees and term deposits
Restated balance
Non-current assets – other
Balance reported
Reclassification of bank guarantees and term deposits
Restated balance
The balances above were restated to reclassify bank guarantees held in term deposits.
Consolidated statement of cash flows
Cash and cash equivalents at the beginning of the financial year
Balance reported
Reclassification of bank guarantees and term deposits
Restated balance
Cash and cash equivalents at the end of the financial year
Balance reported
Reclassification of bank guarantees and term deposits
Restated balance
The balances above were restated to reclassify bank guarantees held in term deposits.
Consolidated
30 June 2022
$
8,844,336
(2,157,000)
6,687,336
-
71,000
71,000
-
2,184,230
2,184,230
129,226
(98,230)
30,996
Consolidated
30 June 2022
$
$
5,876,550
(891,000)
4,985,550
8,844,336
(2,157,000)
6,687,336
54
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2023
Notes to the financial statements
Note 40. Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:
Suvo Strategic Minerals Limited
Watershed Enterprise Solutions Pty Ltd
Mt Marshall Kaolin Pty Ltd
Suvo Australia Pty Ltd
Suvo Minerals Australia Pty Ltd
Kaolin Australia Pty Ltd
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial statements
and directors’ report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments
Commission.
The above companies represent a ‘Closed Group’ for the purposes of the Corporations Instrument, and as there are no other
parties to the deed of cross guarantee that are controlled by Suvo Strategic Minerals Limited, they also represent the
‘Extended Closed Group’.
The statement of profit and loss and other comprehensive income and statement of financial position of the Closed Group
are substantially the same as the consolidated entity and therefore have not been separately disclosed.
Note 41. Matters subsequent to the end of the financial year
On 29 August 2023, the Company announced that it would not progress with the remaining stages of the Dingo HPA Pty Ltd
(“Dingo”) earn-in agreement (“Agreement”), and as a result, the Company agreed to sell its 26% share at an agreed price of
A$175,000. The divestment process is expected to be completed during the quarter ended 31 December 2023.
On 5 September 2023, Dr Agu Kantsler was appointed as Non-Executive Director of the Company.
Apart from matters discussed above, no other matter or circumstance has arisen since 30 June 2023 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.
55
Suvo Strategic Minerals Limited
Director’s Declaration
30 June 2023
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
2023 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable; and
At the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group
will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross
guarantee described in note 40 to the financial statements.
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.
On behalf of the directors
Aaron Banks
Interim Non-Executive Chairman
29 September 2023
Perth
56
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
SUVO STRATEGIC MINERALS LIMITED
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 2023, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
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 2023 and of its financial
performance for the year then ended; 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 auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (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 for our
opinion.
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.
Going concern - Refer to Note 1 in the financial statements
Key Audit Matter
How our audit addressed this matter
At 30 June 2023, the Group incurred a loss of
$8,101,122 and had net cash outflows from operating
activities of $3,783,932 for the year ended 30 June
2023. As at that date the Group had a cash balance of
$3,163,638.
The directors have prepared the financial report on the
going concern basis. The directors' assessment of the
Group's ability to continue as a going concern is based
on a cash flow forecast.
Our audit procedures included:
Assessing the reasonableness of the Group’s cash
flow forecast;
Checking
the mathematical
management’s cash flow forecast;
accuracy
of
Challenging
the
reasonableness of
the key
assumptions used by management in the cash flow
forecast by comparison to our knowledge of the
business;
We determined this assessment of going concern to
be a key audit matter due to the significant judgments
involved in preparing the cash flow forecast, and the
potential material
results of
impact of
management´s assessment.
Share-based payments – Performance Rights - Refer to Note 6 in the financial statements
financial report.
the
Assessing the sensitivity of the key assumptions
within management’s cash flow forecast; and
Assessing the adequacy of disclosures made in the
During the year, the Group granted 44,145,000
performance rights. The fair value of performance
rights granted during the year was $1,861,921 of
which $580,169 was recognised and expensed in the
consolidated statement of profit or loss and other
comprehensive income. The remaining amount of
$1,281,752 will be amortised over the remaining
vesting period. In addition to $580,169 recognised,
$445,085 is recognised from performance rights
issued in prior years totalling to $1,025,254 which has
been recognised as an expense in the consolidated
statement of profit or loss and other comprehensive
income.
Our audit procedures included:
Reviewing the key terms and conditions of the
performance rights issued;
Obtaining
the valuation model prepared by
management and assessing whether the model was
appropriate for valuing the performance rights
granted during the year;
Challenging the reasonableness of key assumptions
used by management in the valuation model;
Reviewing the probability of vesting at reporting
date;
Recalculating
the value of
the share-based
payment expense to be recognised in the
consolidated statement of profit or loss and other
comprehensive income; and
Management has performed the valuation of the
performance rights granted using a valuation model.
We considered the valuation of these performance
rights to be a key audit matter as it involved
management’s judgement in determining various
inputs used in the valuation model.
Impairment consideration for property, plant and equipment and mine properties - Refer to Note 13 and
14 in the financial statements
As at 30 June 2023, the Group has capitalised
property, plant and equipment and mine properties
amounting
its Kaolin
to
production cash generating unit (CGU).
Assessing the adequacy of the disclosures in the
Understanding the nature of and property, plant and
equipment and mine properties that relate to the
CGU; and
Our audit procedures included:
to $6,329,123 relating
financial report.
The consideration of whether these assets in this CGU
have indicators of impairment was determined to be a
key audit matter due to the significant judgment
involved in making this determination.
Critically assessing and evaluating management’s
assessment that no indicators of impairment existed
in relation to the CGU as at 30 June 2023.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2023 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 accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
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 have 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 at: https://www.auasb.gov.au/auditors_responsibilities/ar2.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 within the directors' report for the year ended 30 June 2023.
In our opinion, the Remuneration Report of Suvo Strategic Minerals Limited, for the year ended 30 June 2023,
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.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 29 September 2023
TUTU PHONG
Partner
Suvo Strategic Minerals Limited
Annual Mineral Resource Statement
Annual Mineral Resource Statement
1. Mineral Resource Estimate
A summary of the Mineral Resources at Suvo Strategic Minerals Limited’s projects and operations as at 30 June 2023 is
shown in Table 1 and Table 2 below. The Mineral Resource estimation was carried out by CSA Global Pty Ltd, resulting in
the estimation of Indicated and Inferred Mineral Resources.
Table 1 Kaolin Mineral Resources Statement (as at 30 June 2023)
Category
Gabbin Project (White Cloud Kaolin Project)1
Indicated
Inferred
Total
Trawalla Deposit2
Indicated
Inferred
Total
Pittong Operations3
Indicated
Inferred
Total
White
ISO
Kaolinised Brightness %
Granite (Mt)
(457nm)
Yield
<45um
%
26.9
45.6
72.5
9.9
2.8
12.7
3.7
2.0
5.7
80.4
80.6
80.5
81.0
79.8
80.8
81.3
79.1
80.5
41.3
41.1
41.2
27.7
28.3
27.8
35.5
33.0
34.6
Kaolin
(Mt)
11.1
18.8
29.9
2.8
0.8
3.6
1.3
0.7
2.0
1 The Gabbin (White Cloud Kaolin Project) Mineral Resource estimate was completed by CSA Global Pty Ltd (CSA) on behalf
of Suvo. The Mineral Resource estimate was announced on 25 March 2021. As no mining activity has occurred since there
has been no movement in the Mineral Resource estimate.
2 The Trawalla Mineral Resource estimate was completed by CSA Global Pty Ltd (CSA) on behalf of Suvo. The Mineral
Resource estimate was announced on 22 September 2021. As no mining activity has occurred since there has been no
movement in the Mineral Resource estimate.
3 The Pittong Mineral Resource estimate was completed by CSA Global Pty Ltd (CSA) on behalf of Suvo. The Mineral
Resource estimate was announced on 1 March 2022. The Company estimates that between 50,000 to 60,000 tonnes were
mined during the current reporting period. Whilst mining activity has been undertaken, the depletion to the Mineral Resource
since the estimate date is immaterial and the Company confirms that there has been no material change to the Mineral
Resource estimate announced on 1 March 2022.
Table 2 Silica Sands Mineral Resources Statement (as at 30 June 2023)
Category
Eneabba Project (Nova Silica Sands Project)4
Silica Sand - Glass (-0.6 + 0.15mm)
Silica Flour (-0.15 + 0.075mm)
Silica Sand - Coarse (-1mm + 0.6mm)
Product
Tonnes
Mt
132
60
24
SiO2
%
99.2
97.0
99.0
Al2O3
%
0.4
1.1
0.5
Fe2O3
%
0.1
0.4
0.1
TiO2
%
0.0
0.7
0.1
1 The Eneabba (Nova Silica Sands Project) Mineral Resource estimate was completed by CSA Global Pty Ltd (CSA) on
behalf of Suvo. The Mineral Resource estimate was announced on 12 October 2021. As no mining activity has occurred
since there has been no movement in the Mineral Resource estimate.
61
Suvo Strategic Minerals Limited
Annual Mineral Resource Statement
Annual Mineral Resource Statement
2. Material changes and resource statement comparison
There has been no material changes to the resource statements between the current and previous reporting date.
3. Competent Persons Statement
No consent or statement is required from the competent person as no new information has been included since the previous
reporting period.
4. Mineral Resource Governance
The Company currently does not have a formal governance arrangement and internal control process for the reporting and
review of its Mineral Resource Estimates, other than those prescribed for the initial estimation of Mineral Resource estimates
in the JORC Code. The Company is of the view that a formal governance arrangement and internal control process is not
required at this stage on the basis that each of the Mineral Resource Estimates are less than 24 months old as at 30 June
2023 and that there has been no material resource depletion of any of its projects or operations. The Company will consider
whether a formal governance arrangement and internal control process is required prior to 30 June 2024
62
Suvo Strategic Minerals Limited
Shareholder information
Shareholder information
The shareholder information set out below was applicable as at 22 September 2023.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Ordinary shares
% of total
Number
of holders
142
530
326
1,005
708
2,711
shares
issued
0.01%
0.20%
0.32%
5.12%
94.35%
100.00%
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:
MR AARON PETER BANKS
MR CHRISTOPHER JAMES WEED & MRS JANET ELIZABETH BROCKMAN
MR ROBERT KINGSLEY FITZGERALD
RATDOG PTY LTD
MELBOURNE SECURITIES CORPORATION LTD
MR KOBI BEN SHABATH
SUNSET CAPITAL MANAGEMENT PTY LTD
BEARAY PTY LIMITED
CITICORP NOMINEES PTY LIMITED
ASMAC INVESTMENTS PTY LTD
SSELKROW PTY LTD
DIXSON TRUST PTY LTD
MR CHRISTOPHER JAMES WEED & MRS JANET ELIZABETH BROCKMAN
SANDTON CAPITAL PTY LTD
PRIMERO GROUP LIMITED
ALWAYS HOLDINGS PTY LTD
MR WAYNE STEPHEN CLARK
CHRISTOPHER JAMES WEED &JANET ELIZABETH BROCKMAN
HSBC CUSTODY NOMINEES
MR CHRISTOPHER JAMES WEED & MRS JANET ELIZABETH BROCKMAN
63
Ordinary shares
% of total
shares
issued
Number held
73,616,433 9.13%
3.37%
27,183,771
17,250,000
17,058,522
11,500,000
11,378,159
11,233,528
10,733,997
10,473,157
9,650,000
9,350,000
9,347,826
8,909,899
8,753,456
7,852,941
7,136,992
7,100,000
6,820,000
6,694,802
6,405,202
2.14%
2.12%
1.43%
1.41%
1.39%
1.33%
1.30%
1.20%
1.16%
1.16%
1.11%
1.09%
0.97%
0.89%
0.88%
0.85%
0.83%
0.79%
278,448,685
34.54%
Suvo Strategic Minerals Limited
Shareholder information
Shareholder information
Unquoted equity securities
Options expiring 31 December 2023 at $0.15
Options expiring 6 December 2025 at $0.075
Options expiring 6 December 2025 at $0.10
Options expiring 16 March 2026 at $0.08
Options expiring 16 March 2026 at $0.12
Options expiring 16 March 2026 at $0.16
Options expiring 26 June 2026 at $0.06
Performance rights
Number
Number
of holders
on issue
12,000,000 6
1
86
1
1
1
1
14
1,000,000
12,500,000
5,000,000
7,500,000
12,500,000
5,000,000
63,828,334
Substantial holders
As at 22 September 2023, the Company had received substantial shareholder notices from the following shareholders:
MR AARON PETER BANKS & HAYLEY MARIE PARRY
MR CHRISTOPHER JAMES WEED & MRS JANET ELIZABETH BROCKMAN
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
% of total
Number held
75,319,527
49,318,872
shares
issued
9.34%
6.12%
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.
Tenements
Description
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
E70/5517
E70/5324
E70/5001
E70/5322
E70/5323
M5408
M5409
M5365
Interest
owned %
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
64