Annual Financial Report
Year ended 30 June 2024
ABN 97 140 316 463
Suvo Strategic Minerals Limited
Corporate Directory
30 June 2024
2
Corporate Directory
Directors
Aaron Banks
Oliver Barnes
Mark Pensabene
Company secretary
Chris Achurch
Registered office
Level 11
40 The Esplanade
Perth WA 6000
Phone: (08) 9389 4495
Principal place of business
3610 Glenelg Hwy
Pittong VIC 3360
Phone: (03) 5344 6688
Share registry
Automic Registry Services Pty Ltd
Level 5
191 St Georges Terrace
Perth WA 6000
Phone: 1300 288 664
Auditors
RSM Australia Partners
Level 32
2 The Esplanade
Perth WA 6000
Phone: (08) 9261 9100
Solicitors
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/
Suvo Strategic Minerals Limited
Directors’ Report
30 June 2024
3
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 2024.
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
Executive Chairman (appointed 1 May 2024)
Non-Executive Chairman (resigned 1 May 2024)
Mr Oliver Barnes
Non-Executive Director
Mr Mark Pensabene
Non-Executive Director (appointed 13 June 2024)
Dr Agu Kantsler
Non-Executive Director (appointed 5 September 2023, resigned 13 June 2024)
Mr Hugh Thomas
Managing Director (resigned 30 October 2023)
Principal activities
The principal activities of the Group during the year were refined kaolin production in Victoria and commercialisation of the
‘Murdoch Technology’, namely Intellectual Property for a geopolymer concrete batching plant and a low carbon geopolymer
concrete formulation known as ‘Colliecrete’, licensed by the Company under a worldwide and exclusive Intellectual Property
License Agreement.
Review of operations
Kaolin Operations
The Company generated revenue of A$12.3 million in FY24 (A$11.3 million in FY23). Sales of hydrous kaolin products sold
to the local and international markets totaled ~20,000 tonnes during the 2024 financial year.
Over the past 12 months the Company has undertaken extensive engagements, both in Australia and Asia, with major
industry players and market participants. As a result of this, it was determined that Suvo’s kaolin and applicable chemistry
from its Pittong kaolin mines is best suited to the high-margin industries such as paints and coatings, rubber, inks and
pharmaceuticals.
This engagement, and related analysis, has prompted kaolin sales efforts and focus on purchasers operating in these
industries and the Company believes the revised sales and marketing strategy will deliver improved long-term results.
In the second half of FY24, the Company achieved an average selling price on new customers converted after successful
plant trials of A$863/tonne, which is a 47% premium compared to the weighted average selling price achieved for other
existing customers during the same period (ASX announcement 31 July 2024).
Subsequent to the financial year end, the Company secured purchase orders from existing Chinese distributor Qingdao
Minglang New Material Co., Ltd (Qingdao) totaling 1,568 tonnes of hydrous kaolin (attracting a 22% price premium compared
to the weighted average selling price to existing customers) to be supplied between July 2024 and December 2025 (18
months) valued at ~A$1.15 million (based on an exchange rate of 0.65:1 AUD:USD). Qingdao purchased 596 tonnes of
hydrous kaolin across the prior 18 months up to 30 June 2024, resulting in increased orders of almost 1,000 tonnes of
hydrous kaolin (ASX announcement 31 July 2024).
In parallel with the sales strategy of focusing on high margin industries, Suvo had implemented a number of initiatives to
optimise operational costs at Pittong, including reduction of operational working hours and staffing levels which will allow the
Company to meet current sales and production requirements. Additionally, the period of significant capital expenditure at
Pittong has been completed and as a result capital outflows have significantly reduced. These initiatives were implemented
in June 2024 and are expected to bear fruit in FY25.
The Company continues product testing and trials with other potential end users operating in the end user markets or high-
margin industries where the Pittong kaolin is being marketed due to its suitability. As sales orders are received from new
customers production will start to ramp up at Pittong.
Geopolymer Concrete
As announced on 30 October 2023, Suvo licensed the ‘Murdoch Technology’ from Murdoch University under a worldwide
and exclusive Intellectual Property License Agreement. The Murdoch Technology is namely Intellectual Property for a
geopolymer concrete batching plant and a low carbon geopolymer concrete formulation known as ‘Colliecrete’.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
4
Directors’ Report
Geopolymer concrete is a low carbon alternative to traditional concrete. It is produced by using a caustic activator to react
with aluminate and silicate-bearing materials, such as metakaolin, fly ash, ground blast furnace slag, and other waste-derived
materials. In this process, these materials act as the binder in place of Ordinary Portland Cement (OPC). The manufacture
of OPC is an emission intensive process that currently accounts for 8% of global CO2 emissions, which is equivalent to the
emissions produced by entire global car fleet.
Utilising the licensed IP, in a laboratory setting, Suvo has successfully produced three new geopolymer concrete formulations
using caustic activators, metakaolin and flyash. The laboratory trials ran tests comprising five samples in each test, returning
an average compressive strength of 27 megapascal (MPa) up to 52MPa. The trials indicated the geopolymer concrete
formulations using metakaolin and flyash showed a potential greenhouse gas emission reduction of up to ~70% compared
to concrete made using OPC.
Suvo subsequently entered into a binding Joint Development Agreement (JDA) with PERMAcast and is now in the process
of incorporating a joint venture entity (SPV Entity) to develop and commercialise low-carbon geopolymer concrete (GPC)
products and projects. Under the binding JDA, Suvo and PERMAcast will prepare and test various formulations, assess their
suitability for different applications, and determine the best route for commercialisation through the jointly-owned special
purpose vehicle.
Subsequent to the financial year end, the Company with its partner PERMAcast, completed the production and delivery of
its first low carbon geopolymer precast product, a series of 1000mm x 350mm x 350mm backing blocks, to be used for
hardscaping and demonstration purposes for a major Government infrastructure project. The 28-day compressive strengths
on the backing blocks ranged from 31 to 35 Megapascals (MPa).
Corporate
During the year, the Company completed a successful Placement and Share Purchase Plan (Capital Raise) which raised
A$4.5 million (before costs). Funding from the Capital Raise is being used to support production at Pittong and accelerate
the commercialisation of the Company’s low carbon geopolymer concrete licensed intellectual property.
In October 2023, the Company’s CFO, Bojan Bogunovic, was appointed as Interim Chief Executive Officer of the Company,
effective immediately following the resignation of Mr Hugh Thomas as Managing Director and Chief Executive Officer. In
June 2024, Bojan Bogunovic, Suvo’s Interim Chief Executive Officer was appointed as Chief Executive Officer of the
Company.
In May 2024, Aaron Banks, Suvo’s Non-Executive Chairman was appointed as Executive Chairman of the Company.
Additionally, in June 2024, Mark Pensabene was appointed as Non-Executive Director of the Company with Agu Kantsler
resigning from the Board of Directors. Mark Pensabene holds a Bachelor of Engineering and Commerce degrees from the
University of Western Australia and has over 20 years of operational and management experience in the engineering and
construction sectors.
Projects
Suvo’s focus is on expanding high margin sales of hydrous kaolin produced at its 100% owned Pittong operations and
progressing the commercialisation of the ‘Murdoch Technology’, namely the intellectual property for a geopolymer concrete
batching plant and low carbon geopolymer concrete formulation known as ‘Colliecrete’, licensed by the Company under a
worldwide and exclusive Intellectual Property License Agreement.
Consequently, the Company opted to relinquish the majority of its silica sand tenements (E70/5322, E70/5323, E70/5324)
on the Eneabba Project in Western Australia. The Company partly relinquished EL70/5001, keeping approximately 10 blocks
of the tenement which are situated on privately owned cleared farmland (ASX announcement 13 June 2024).
Relinquishing these tenements will reduce the Company’s overall administrative overhead on exploration, including the need
to meet annual minimum expenditure commitments and costs associated with annual rents and rates.
During the period, Suvo made the decision not to progress the remaining stages of the staged earn-in agreement in Dingo
HPA Pty Ltd. The Board of Directors of Dingo HPA Pty Ltd resolved to de-register the Company as Dingo’s technology could
not be commercialised. Subsequently, the remaining cash balance held by Dingo was distributed proportionally amongst the
shareholders of the Company. Suvo, as a 26% shareholder received A$25,788 from the divestment process (ASX
announcement 30 April 2024).
Suvo Strategic Minerals Limited
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30 June 2024
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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 9 July 2024, the Company announced that a tripartite binding Joint Development Agreement (JDA) was executed
between Suvo, its wholly owned subsidiary Climate Tech Cement Pty Ltd (CTC) and Polevine Pty Ltd (PERMAcast). The
purpose of the JDA is for CTC and PERMAcast to deliver low carbon geopolymer concrete products and projects and
otherwise commercialise the intellectual property created through a joint venture entity.
On 17 September 2024, the Company secured a 12-month extension on debt funding of A$1.0 million (before costs)
advanced on 1 December 2023 and previously repayable on 30 November 2024. The loan term period has been extended
for a period of six months commencing 1 December 2024 and expiring 31 May 2025. A further six months will be available,
at the Company’s option, for the subsequent period from 1 June 2025 to 30 November 2025.
Apart from matters discussed above, no other matter or circumstance has arisen since 30 June 2024 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, commercialisation and production activities on its existing
operations and projects and to acquire further suitable projects as opportunities arise.
Material business risks
Development and commercialisation of the Company’s licensed technology
The success of the Company will depend upon the Company’s ability to further develop and commercialise its licensed
technology and intellectual property. A failure to successfully develop and commercialise the technology could lead to a loss
of opportunities and adversely impact the Company’s operating results and financial position.
Intellectual Property
The success of the Company, in part, depends on its continued ability to protect its intellectual property and use any
trademarks to increase brand awareness. The Company will depend on its intellectual property to protect its brand and trade
secrets, and any pending patents on its products and production processes. In the event the Company is unable to protect its
intellectual property adequately, the value of the Company’s products and brands could be adversely affected. This may
further impact the overall business, with respect to its financial position and overall profitability and operational output.
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.
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.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
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Directors’ Report
Production, operations and supply chain
Suvo aims to have reliable operational performance to allow it to deliver on its operational objectives and satisfy its obligations
to customers, regulators and communities. Supply chains have an influence on the way Suvo operates and the results it
generates. The Company relies on various key customers, supplier relationships and contractors to conduct various aspects
of its operations.
Demand, product pricing and offtake agreements
Suvo continues to build relationships with its customers and has underpinned its production with geographically diverse offtake
agreements with various pricing mechanisms.
Environment, climate change and natural events
Suvo’s hydrous kaolin operational activities have the potential to impact the environment and require proactive management
to minimise any potential impact to water resources, air quality and biodiversity. Climate change has the potential to impact
the frequency, intensity, and likelihood of extreme events that could impact people’s safety, wellbeing, security and key
operating infrastructure.
Future growth opportunities
Suvo endeavors to improve its return on investments and create shareholder value by carefully evaluating organic and
inorganic growth and investment opportunities. The Company expects this risk may increase with the increased likelihood of
growth and investment opportunities.
Information on directors
Name:
Aaron Banks
Title:
Executive Chairman (appointed 1 May 2024), Non-Executive Chairman (resigned 1
May 2024)
Experience and expertise:
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 producer 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
Special responsibilities:
None
Interests in shares:
75,451,278
Interests in options:
None
Interests in performance rights:
15,000,000
Name:
Oliver Barnes
Title:
Non-Executive Director
Experience and expertise:
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.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
Interests in performance rights:
5,895,000
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
7
Directors’ Report
Name:
Mark Pensabene
Title:
Non-Executive Director (appointed 13 June 2024)
Experience and expertise
Mark Pensabene holds Bachelor of Engineering and Commerce degrees from the
University of Western Australia and has over 20 years of operational and management
experience in the engineering and construction sectors. Mark spent 18 years with
ASX-200 Company, Monadelphous Group, where he held a number of general
manager roles. Most recently, Mark was the Executive General Manager & Chief
Operating Officer at Primero Group, subsidiary of ASX listed NRW Holdings, a
company specializing in the provision of EPC services in the Western Australian and
North American mining sectors.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
None
Interests in shares:
1,300,000
Interests in options:
None
Interests in performance rights:
None
Name:
Agu Kantsler
Title:
Non-Executive Director (appointed 5 September 2023, resigned 13 June 2024)
Experience and expertise:
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.
Other current directorships:
Not applicable as no longer a director
Former directorships (last 3 years): 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:
Not applicable as no longer a director
Name:
Hugh Thomas
Title:
Managing Director (resigned 30 October 2023)
Experience and expertise:
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.
Other current directorships:
Not applicable as no longer a director
Former directorships (last 3 years): 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:
Not applicable as no longer a director
'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 holds the position of Company Secretary. Mr Achurch provides company secretarial, corporate advisory and
general consulting services to a number of ASX listed companies.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
8
Directors’ Report
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 2024, and the number of meetings attended by each director were:
Full board
Nomination and
Remuneration Committee1
Audit and Risk Committee1
Attended
Held
Attended
Held
Attended
Held
Aaron Banks
5
5
-
-
-
-
Oliver Barnes
5
5
-
-
-
-
Mark Pensabene
-
-
-
-
-
-
Agu Kantsler
5
5
-
-
-
-
Hugh Thomas
1
1
-
-
-
-
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.
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.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
9
Directors’ Report
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 2024, the Group did not engage a remuneration consultant.
Voting and comments made at the Company's 2023 Annual General Meeting ('AGM')
At the 2023 AGM, 95.49% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2023. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
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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 - Executive Chairman (appointed 1 May 2024), Non-Executive Chairman (resigned 1 May 2024)
●
Oliver Barnes - Non-Executive Director
●
Mark Pensabene - Non-Executive Director (appointed 13 June 2024)
●
Agu Kantsler - Non-Executive Director (appointed 5 September 2023, resigned 13 June 2024)
●
Hugh Thomas - Managing Director (resigned 30 October 2023)
●
Bojan Bogunovic - Chief Executive Officer (appointed 31 October 2023), previously Chief Financial Officer
●
Hanno Van Der Merwe - Chief Operating Officer
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
Cash
Super-
Long
service
Equity-
settled
Equity-
settled
and fees
bonus
Other
annuation
leave
shares
Other
Total
2024
$
$
$
$
$
$
$
$
Executive
Directors:
Aaron Banks1
41,667
-
-
4,583
-
-
(177,186)8
(130,936)
Hugh Thomas2
165,000
-
-
-
-
-
(13,221)9
151,779
Non-Executive
Directors:
Aaron Banks1
54,299
-
61,6146
12,750
-
-
-
128,663
Oliver Barnes
48,000
-
-
-
-
- (49,155)8,10
(1,155)
Mark Pensabene3
2,400
-
-
-
-
-
-
2,400
Agu Kantsler4
33,574
-
-
3,693
-
-
-
37,267
Other
KMP:
Bojan Bogunovic5
291,667
-
-
29,333
-
-
(34,101) 8
286,899
Hanno Van Der
Merwe
257,918
-
12,0007
27,399
-
60,000
(25,952) 8
331,365
894,525
-
73,614
77,758
-
60,000
(299,615)
806,282
1
Aaron Banks was Non-Executive Chairman up until 1 May 2024, he then transitioned to Executive Chairman.
2
Hugh Thomas resigned as Managing Director on 30 October 2023.
3
Mark Pensabene was appointed Non-Executive Director on 13 June 2024.
4
Agu Kantsler was appointed Non-Executive Director on 5 September 2023 and resigned on 13 June 2024.
5
Bojan Bogunovic was Chief Financial Officer up until 31 October 2023, he then transitioned to Chief Executive Officer.
6
This was for consulting services provided by Aaron Banks during his time as Non-Executive Chairman.
7
This was for director fees for Dingo HPA Pty Ltd.
8
Relates to reversal of performance rights as a result of changes in the likelihood of vesting.
9
Relates to performance rights forfeited due to cessation of directorship.
10
Includes a $17,886 reversal in performance rights issued to ESG-F Holdings Pty Ltd, a related party of Oliver Barnes.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
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Directors’ Report
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
2023
Cash salary
Cash
Non-
Super-
Long
service
Equity-
settled
Equity-
settled
and fees
bonus
monetary
annuation
leave
shares
Other9
Total
Executive
Directors:
$
$
$
$
$
$
$
$
Aaron Banks1
-
-
-
-
-
-
399,3757
399,375
Hugh Thomas2
16,500
-
-
-
-
-
-
16,500
Henk Ludik3
261,639
-
-
26,250
-
-
225,000
512,889
Non-Executive
Directors:
Aaron Banks1
21,012
-
-
2,206
-
-
-
23,218
Oliver Barnes
48,000
-
-
-
-
-
87,7944
135,794
Henk Ludik3
6,000
-
-
-
-
-
-
6,000
Ian Wilson5
47,663
-
-
-
-
-
(34,641)8
13,022
Other
KMP:
Hugh Thomas2
82,500
-
-
-
-
-
13,221
95,721
Bojan Bogunovic
197,083
-
-
22,794
-
20,000
145,744
385,621
Hanno Van Der
Merwe6
150,453
-
-
15,797
-
-
46,488
212,738
830,850
-
-
67,047
-
20,000
882,981
1,800,878
1
Aaron Banks was Executive Director up until 7 March 2023, he transitioned to Interim Non-Executive Chairman.
2
Hugh Thomas was appointed Chief Executive Officer on 1 April 2023 and as Managing Director on 15 June 2023.
3
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.
4
Includes $31,945 in performance rights issued to ESG-F Holdings Pty Ltd, a related party of Oliver Barnes.
5
Salary represents the period 1 July 2022 to 14 June 2023.
6
Salary represents the period 1 December 2022 to 30 June 2023.
7
These performance rights were issued to Aaron Banks in his capacity as Executive Director.
8
Relates to performance rights forfeited due to cessation of directorship.
9
Equity settled performance rights.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk - STI
At risk - LTI
Name
2024
2023
2024
2023
2024
2023
Executive Directors:
Aaron Banks
(35%)1
-
-
-
135%1
100%
Hugh Thomas
109%1
100%
-
-
(9%)1
-
Non-Executive Directors:
Aaron Banks
100%
100%
-
-
-
-
Oliver Barnes
(4,155%)1
35%
-
-
4,255%1
65%
Mark Pensabene
100%
-
-
-
-
-
Agu Kantsler
100%
-
-
-
-
-
Other KMP:
Bojan Bogunovic
112%1
57%
-
5%
(12%)1
38%
Hanno Van Der Merwe
90%1
78%
18%1
-
(8%)1
22%
Hugh Thomas
-
86%
-
-
-
14%
1
Due to reversals of performance rights issued in prior years.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
12
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:
Aaron Banks
Title:
Executive Chairman
Agreement commenced:
1 May 2024
Term of agreement:
Open
Details:
Base salary of $250,000 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.
Name:
Bojan Bogunovic
Title:
Chief Executive Officer
Agreement commenced:
31 October 2023
Term of agreement:
Open
Details:
Base salary of $300,000 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.
Name:
Hanno Van Der Merwe
Title:
Chief Operating Officer
Agreement commenced:
1 December 2022
Term of agreement:
Open
Details:
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.
Share-based compensation
Shares
During the year Chief Operating Officer, Hanno Van Der Merwe received $60,000 worth of shares as part of compensation.
Performance rights
During the year, 7,500,000 performance rights were issued to Hugh Thomas. 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 $0.06 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 $0.08 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 $0.10 over 20 consecutive trading days on which the Company’s shares have actually
traded, expiring 3 years after the date of issue.
These performance rights were forfeited on Hugh Thomas’ resignation as Managing Director on 30 October 2023.
For the year ended 30 June 2024, an expense reversal of $299,615 has been recognised in relation to the performance
rights issued to Directors and other key management personnel.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
13
Directors’ Report
Additional information
The earnings of the Group for the five years to 30 June 2024 are summarised below:
2024
2023
2022
2021
20201
$
$
$
$
$
Sales revenue
12,252,427
11,259,102
13,957,078
6,510,970
-
EBITDA
(6,718,124)
(7,533,562)
(1,348,513)
(1,671,660)
(1,546,584)
EBIT
(7,541,764)
(8,130,410)
(1,888,438)
(2,238,073)
(1,546,584)
Loss after income tax
(7,635,544)
(8,101,122)
(1,951,007)
(2,220,638)
(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.
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2024
2023
2022
2021
20201
Share price at financial year end ($)
0.046
0.026
0.04
0.15
0.02
Total dividends declared (cents per share)
-
-
-
-
-
Basic loss per share (cents per share)
(0.88)
(1.14)
(0.32)
(0.43)
(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
Exercise of
Received
Balance at
the start of
performance
as part of
Disposals/
the end of
the year
rights
remuneration
Acquired
other
the year
Ordinary shares
Aaron Banks
75,319,527
-
-
131,751
-
75,451,278
Oliver Barnes
-
-
-
-
-
-
Mark Pensabene
1,300,0001
-
-
-
-
1,300,000
Agu Kantsler
-
-
-
-
- -2
Hugh Thomas
-
-
-
-
- -2
Bojan Bogunovic
1,247,619
600,000
-
-
-
1,847,619
Hanno Van Der Merwe
-
-
2,000,000
-
-
2,000,000
77,867,146
600,000
2,000,000
131,751 - 80,598,897
1
Balance at appointment as director on 13 June 2024.
2
Balance at cessation of directorship.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
14
Directors’ Report
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
Balance at
the start of
Granted as
Expired/
Net change
the end of
the year
remuneration
Exercised
forfeited
other
the year
Options over ordinary shares
Aaron Banks
-
-
-
-
-
-
Oliver Barnes
-
-
-
-
-
-
Mark Pensabene
-1
-
-
-
-
-
Agu Kantsler
-
-
-
-
-
-2
Hugh Thomas
-
-
-
-
-
-2
Bojan Bogunovic
93,750
-
-
-
-
93,7503
Hanno Van Der Merwe
-
-
-
-
-
-
93,750
-
-
-
-
93,750
1
Balance at appointment as director on 13 June 2024.
2
Balance at cessation of directorship.
3
Free-attaching options.
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
Expired/
Balance at
the start of
Granted as
forfeited/
the end of
the year
remuneration
Exercised
other
the year
Performance rights
Aaron Banks
21,666,667
-
-
(6,666,667)
15,000,000
Oliver Barnes
5,895,000
-
-
-
5,895,0001
Mark Pensabene
-
-
-
-
-
Agu Kantsler
-
-
-
-
-
Hugh Thomas
-
7,500,0002
- (7,500,000)2
-
Bojan Bogunovic
6,450,000
-
(600,000)
-
5,850,000
Hanno Van Der Merwe
6,000,000
-
-
-
6,000,000
40,011,667
7,500,000
(600,000) (14,166,667)
32,745,000
1
Balance includes 2,145,000 performance rights issued to ESG-F Holdings Pty Ltd, a related party of Oliver Barnes.
2
Hugh Thomas was issued 7,500,000 performance rights during the year. These lapsed on the cessation of his
employment on 30 October 2023.
Other transactions with key management personnel and their related parties
During the financial year, no other transactions with key management personnel and their related parties were made.
Amounts owing to related parties as at 30 June 2024 were $10,400 for director fees. All transactions were made on normal
commercial terms and conditions and at market rates.
This concludes the remuneration report, which has been audited.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
15
Directors’ Report
Shares under option
Unissued ordinary shares of Suvo Strategic Minerals Limited under option at the date of this report are as follows:
Exercise
Number
Grant date
Expiry date
price
under option
15-Dec-2022
6-Dec-2025
$0.075
1,000,000
15-Dec-2022
6-Dec-2025
$0.10
12,500,000
17-Feb-2023
16-Mar-2026
$0.08
5,000,000
17-Feb-2023
16-Mar-2026
$0.12
7,500,000
17-Feb-2023
16-Mar-2026
$0.16
12,500,000
27-Jun-2023
26-Jun-2026
$0.06
5,000,000
29-Nov-2023
1-Dec-2025
$0.06
2,000,000
26-Feb-2024
26-Jun-2027
$0.045
5,000,000
26-Feb-2024
26-Jun-2027
$0.06
5,000,000
26-Feb-2024
26-Jun-2027
$0.075
5,000,000
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:
Number
under
Exercise
performance
Grant date
Expiry date
price
rights
5-Oct-2021
24-Nov-2026
nil
2,100,000
17-Nov-2021
24-Nov-2026
nil
7,500,000
21-Oct-2022
16-Nov-2025
nil
5,895,000
30-Nov-2022
16-Dec-2025
nil
7,500,000
13-Dec-2022
3-Jan-2026
nil
14,333,333
Shares issued on the exercise of options and performance rights
During the year ended 30 June 2024, 241,667 shares were issued on the exercise of options, and 2,183,333 shares were
issued on the exercise of performance rights. Subsequent to year end, 1,583,333 shares 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.
Suvo Strategic Minerals Limited
Directors' Report
30 June 2024
16
Directors’ Report
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.
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 31 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 31 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
Executive Chairman
27 September 2024
Perth
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the
members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm
which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32 Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
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
2024, 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
Perth, WA
TUTU PHONG
Dated: 27 September 2024
Partner
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
18
Consolidated statement of profit or loss and other comprehensive income
19
Consolidated statement of financial position
20
Consolidated statement of changes in equity
21
Consolidated statement of cash flows
22
Notes to the financial statements
23
Consolidated entity disclosure statement
54
Directors' declaration
55
Independent auditor's report to the members of Suvo Strategic Minerals Limited
56
Annual mineral resource statement
60
Shareholder information
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
Principal place of business
Level 11
3610 Glenelg Hwy
40 The Esplanade
Pittong VIC 3360
Perth WA 6000
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 27 September 2024. The
Directors have the power to amend and reissue the financial statements.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
19
Consolidated statement of profit or loss and other
comprehensive income
Consolidated
Note
2024
2023
$
$
Profit or loss from continuing operations
Revenue
4
12,252,427
11,259,102
Cost of sales
(11,982,037)
(10,961,231)
Gross profit before depreciation and amortisation
270,390
297,871
Depreciation and amortisation relating to kaolin production
(540,752)
(300,415)
Gross (loss)/profit from operations
(270,362)
(2,544)
Other income
324,817
306,975
Administration and other corporate expenses
5
(4,676,432)
(4,595,479)
Foreign exchange profit
24,116
44,398
Other depreciation and amortisation expenses
(282,889)
(296,433)
Exploration and evaluation expenditure impairment
16
(2,752,934)
(40,768)
Property, plant and equipment written off
14
-
(2,097,507)
Share based payments expense
6
181,216
(1,408,628)
Share of loss of associate accounted for using the equity method
18
(12,714)
(11,136)
Loss on disposal of associate
18
(170,362)
-
Loss before income tax expense from continuing operations
(7,635,544)
(8,101,122)
Income tax expense
7
-
-
Loss after income tax expense from continuing operations
(7,635,544)
(8,101,122)
Loss after income tax expense for the year
(7,635,544)
(8,101,122)
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
(7,635,544)
(8,101,122)
Loss for the year is attributable to:
Owners of Suvo Strategic Minerals Limited
(7,635,544)
(8,101,122)
Total comprehensive loss for the year is attributable to:
Continuing operations
(7,635,544)
(8,101,122)
Owners of Suvo Strategic Minerals Limited
(7,635,544)
(8,101,122)
Loss per share for loss attributable to owners of Suvo Strategic Minerals
Limited
Basic and diluted loss per share (in cents)
8
(0.88)
(1.14)
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
20
Consolidated statement of financial position
Consolidated
Note
2024
2023
$
$
Assets
Current assets
Cash and cash equivalents
9
3,126,425
3,163,638
Trade and other receivables
10
1,414,959
1,416,028
Inventories
11
1,941,961
2,090,431
Other financial assets
12
133,252
71,000
Other
13
183,385
787,408
Total current assets
6,799,982
7,528,505
Non-current assets
Property, plant and equipment
14
4,690,324
4,244,441
Mine properties
15
2,227,294
2,084,682
Mineral interest acquisition and exploration expenditure
16
3,225,385
5,824,404
Right-of-use assets
17
86,088
341,681
Investment in associate
18
-
208,864
Other financial assets
12
2,086,000
2,184,233
Total non-current assets
12,315,091
14,888,305
Total assets
19,115,073
22,416,810
Liabilities
Current liabilities
Trade and other payables
19
2,284,907
1,899,963
Borrowings
20
1,000,000
-
Provisions
21
670,591
808,850
Lease liabilities
22
125,114
387,594
Interest-bearing liabilities
23
158,414
641,161
Total current liabilities
4,239,026
3,737,568
Non-current liabilities
Provisions
24
2,478,819
2,567,057
Lease liabilities
25
-
113,689
Interest-bearing liabilities
23
370,234
528,648
Total non-current liabilities
2,849,053
3,209,394
Total liabilities
7,088,079
6,946,962
Net assets
12,026,994
15,469,848
Equity
Issued capital
26
46,488,046
42,230,249
Reserves
27
7,700,253
7,765,360
Accumulated losses
28
(42,161,305)
(34,525,761)
Total equity
12,026,994
15,469,848
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
21
Consolidated statement of changes in equity
Issued
Accumulated
capital
Reserves
losses
Total equity
Consolidated
$
$
$
$
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
-
-
(8,101,122) (8,101,122)
Other comprehensive loss for the year, net of
tax
-
-
-
-
Total comprehensive loss for the year
-
-
(8,101,122) (8,101,122)
Transactions with owners in their capacity as
owners:
Shares issued
3,771,300
-
-
3,771,300
Shares issue costs
(273,368)
-
-
(273,368)
Share-based payments (note 6)
-
1,388,437 -
1,388,437
Balance at 30 June 2023
42,230,249
7,765,360 (34,525,761) 15,469,848
Issued
Accumulated
capital
Reserves
losses
Total equity
Consolidated
$
$
$
$
Balance at 1 July 2023
42,230,249
7,765,360 (34,525,761)
15,469,848
Loss after income tax expense for the year
-
-
(7,635,544)
(7,635,544)
Other comprehensive loss for the year, net of
tax
-
-
-
-
Total comprehensive loss for the year
-
-
(7,635,544)
(7,635,544)
Transactions with owners in their capacity as
owners:
Shares issued
4,651,250
-
-
4,651,250
Share issue costs
(393,453)
-
-
(393,453)
Share-based payments (note 6)
-
(65,107) -
(65,107)
Balance at 30 June 2024
46,488,046
7,700,253 (42,161,305)
12,026,994
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
22
Consolidated statement of cash flows
Consolidated
Note
2024
2023
$
$
Cash flows from operating activities
Receipts in the course of operations
12,410,423
12,037,142
Payments to suppliers and employees
(15,318,044) (15,848,187)
Interest received
145,773
101,049
Interest paid
(182,042)
(98,536)
Grants received
20,541
24,600
Net cash used in operating activities
29
(2,923,349)
(3,783,932)
Cash flows from investing activities
Payments for property, plant and equipment
(930,853)
(2,621,883)
Payments for exploration and evaluation
(147,191)
(556,310)
Payments for mine properties
(342,397)
(119,634)
Receipts/payments for investments in associates
18
25,788
(220,000)
Other financial assets – term deposits at bank
5,000
-
Net cash used in investing activities
(1,389,653)
(3,517,827)
Cash flows from financing activities
Proceeds from issue of shares
4,500,000
3,600,000
Proceeds from exercise of options
7,250
74,500
Share issue transaction costs
(183,244)
(181,858)
Proceeds from borrowings
1,000,000
-
Financed equipment
-
801,353
Repayment of lease liabilities
(345,977)
(337,302)
Repayment of interest-bearing liabilities
(702,240)
(178,632)
Net cash received from financing activities
4,275,789
3,778,061
Net decrease in cash and cash equivalents
(37,213)
(3,523,698)
Cash and cash equivalents at the beginning of the financial year
3,163,638
6,687,336
Effects of exchange rate changes on cash and cash equivalents
-
-
Cash and cash equivalents at the end of the financial year
9
3,126,425
3,163,638
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
23
Notes to the financial statements
Note 1. Material accounting policies
The material 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 $7,635,544 and had net cash outflows from operating activities of $2,923,349 for
the year ended 30 June 2024. As at that date, the Group had a cash balance of $3,126,425.
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 2025.
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 35.
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 2024 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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
24
Notes to the financial statements
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.
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
25
Notes to the financial statements
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.
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
26
Notes to the financial statements
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.
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
27
Notes to the financial statements
Right of return assets
Right of return assets represents the right to recover inventory sold to customers and is based on an estimate of customers
who may exercise their right to return the goods and claim a refund. Such rights are measured at the value at which the
inventory was previously carried prior to sale, less expected recovery costs and any impairment.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and delivery costs, direct
labour, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal
operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory
are determined after deducting rebates and discounts received or receivable.
Cost is determined on the following basis:
a. Work in progress and finished goods on hand is valued on an average total production cost method
b. Ore stockpiles are valued at the average cost of mining and stockpiling the ore, including haulage
c. Raw materials are valued at average cost
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Property, plant and equipment
Land is measured at fair value, based on periodic valuations by external independent valuers. The valuations are undertaken
more frequently if there is a material change in the fair value relative to the carrying amount. Any accumulated depreciation
at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the
revalued amount of the asset. Increases in the carrying amounts arising on revaluation of land are credited in other
comprehensive income through to the revaluation surplus reserve in equity. Any revaluation decrements are initially taken in
other comprehensive income through to the revaluation surplus reserve to the extent of any previous revaluation surplus of
the same asset. Thereafter the decrements are taken to profit or loss.
Buildings are stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Buildings
3-40 years
Plant and equipment
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.
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
28
Notes to the financial statements
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for
any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms
of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as
incurred.
Exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried
forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through
the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in
an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of
economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred
thereon is written off in the year in which the decision is made.
Mining assets
Capitalised mining development costs include expenditures incurred to develop new ore bodies to define further
mineralisation in existing ore bodies, to expand the capacity of a mine and to maintain production. Mining development also
includes costs transferred from exploration and evaluation phase once production commences in the area of interest.
Amortisation of mining development is computed by the units of production basis over the estimated proved and probable
reserves. Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can
be recovered in the future from known mineral deposits. These reserves are amortised from the date on which production
commences. The amortisation is calculated from recoverable proven and probable reserves and a predetermined percentage
of the recoverable measured, indicated and inferred resource. This percentage is reviewed annually.
Restoration costs expected to be incurred are provided for as part of development phase that give rise to the need for
restoration.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts
are unsecured and are usually paid within 30 days of recognition.
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
29
Notes to the financial statements
Refund liabilities
Refund liabilities are recognised where the Group receives consideration from a customer and expects to refund some, or
all, of that consideration to the customer. A refund liability is measured at the amount of consideration received or receivable
for which the Group does not expect to be entitled and is updated at the end of each reporting period for changes in
circumstances. Historical data is used across product lines to estimate such returns at the time of sale based on an expected
value methodology.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected
to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or
a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of
money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision
resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
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30
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
31
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
32
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 2024. 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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
33
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 mineral resource 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 mineral resources, by their very nature, require judgements, estimates and assumptions.
Where the mineral resources 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 2024 approximately $3,563,989 (2023: $3,699,182) of the Group’s external revenue was
derived from sales to two major Australian paper producers.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
34
Notes to the financial statements
Operating segment information
Corporate
Exploration
Kaolin
30 June 2024
& Evaluation Production
Total
$
$
$
$
Revenue
Sales to external customers
-
-
12,252,427
12,252,427
Total segment revenue
-
-
12,252,427
12,252,427
EBITDA
(2,783,049)
(2,808,247)
(1,126,828)
(6,718,124)
Depreciation and amortisation
(224,478)
(364)
(598,798) (823,640)
Interest revenue
20,184
- 127,166
147,350
Finance costs
(75,144)
-
(165,986) (241,130)
Loss before income tax expense
(3,062,487)
(2,808,611)
(1,764,446) (7,635,544)
Income tax expense
-
-
- -
Loss after income tax expense
(3,062,487)
(2,808,611)
(1,764,446)
(7,635,544)
Assets
Segment assets
2,005,335
3,226,244
13,883,494
19,115,073
Liabilities
Segment liabilities
1,485,670
6,723
5,595,686
7,088,079
Corporate
Exploration
Kaolin
30 June 2023
& Evaluation
Production
Total
$
$
$
$
Revenue
Sales to external customers
-
-
11,259,102
11,259,102
Total segment revenue
-
-
11,259,102
11,259,102
EBITDA
(4,832,911)
(42,886)
(2,657,765)
(7,533,562)
Depreciation and amortisation
(228,367)
(729)
(367,752) (596,848)
Interest revenue
29,022
-
98,802 127,824
Finance costs
(36,189)
(1,780)
(60,567) (98,536)
Loss before income tax expense
(5,068,445)
(45,395)
(2,987,282) (8,101,122)
Income tax expense
-
-
- -
Loss after income tax expense
(5,068,445)
(45,395)
(2,987,282)
(8,101,122)
Assets
Segment assets
2,741,028
5,836,072
13,839,710
22,416,810
Liabilities
Segment liabilities
958,020
-
5,988,942
6,946,962
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
35
Notes to the financial statements
Note 4. Revenue
Consolidated
2024
2023
$
$
Revenue from contracts with customers
Sale of goods
12,252,427
11,259,102
Revenue from continuing operations
12,252,427
11,259,102
Timing of revenue recognition
All revenue is recognised at a point in time.
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated
2024
2023
$
$
Geographical regions
Australia and New Zealand
7,639,184
7,182,454
Asia
4,443,097
3,474,701
Rest of the World
170,146
601,947
12,252,427
11,259,102
Note 5. Administration and other corporate expenses
Consolidated
2024
2023
$
$
Employee expenses
1,662,034
1,601,243
Legal fees
109,749
265,099
Accounting fees
161,570
203,672
Compliance fees
179,783
243,666
Other administration costs
2,563,296
2,281,799
4,676,432
4,595,479
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
36
Notes to the financial statements
Note 6. Share based payments expense
Consolidated
2024
2023
$
$
Shares issued to key management personnel1
60,000
20,000
Shares issued to advisors1
49,000
46,000
Options issued to advisors1
15,233
317,374
Performance rights issued to key management personnel1
(299,615)
882,981
Performance rights issued to others1
(5,834)
142,273
(181,216)
1,408,628
Options issued to lead and co-lead managers2
225,109
45,809
43,8933
1,454,4373
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, ($65,107) is recorded in Reserves and $109,000 is recorded in Issued Capital (2023: $1,388,437
recorded in Reserves and $66,000 recorded in Issued Capital).
Options
Set out below is a summary of the movement in options during the financial year:
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
30-Jul-2020
30-Jul-2023
$0.03
99,383,570
-
(241,667) (99,141,903)
-
24-Nov-2020
30-Jul-2023
$0.03
500,000
-
-
(500,000)
-
23-Dec-2020
31-Dec-2023
$0.15
12,000,000
-
- (12,000,000)
-
15-Dec-2022
6-Dec-2025
$0.075
1,000,000
-
-
-
1,000,000
15-Dec-2022
6-Dec-2025
$0.10
12,500,000
-
-
-
12,500,000
17-Feb-2023
16-Mar-2026
$0.08
5,000,000
-
-
-
5,000,000
17-Feb-2023
16-Mar-2026
$0.12
7,500,000
-
-
-
7,500,000
17-Feb-2023
16-Mar-2026
$0.16
12,500,000
-
-
-
12,500,000
27-Jun-2023
26-Jun-2026
$0.06
5,000,000
-
-
-
5,000,000
29-Nov-2023
1-Dec-2025
$0.06
-
2,000,000
-
-
2,000,000
26-Feb-2024
26-Feb-2027
$0.045
-
5,000,000
-
-
5,000,000
26-Feb-2024
26-Feb-2027
$0.06
-
5,000,000
-
-
5,000,000
26-Feb-2024
26-Feb-2027
$0.075
-
5,000,000
-
-
5,000,000
155,383,570
17,000,000
(241,667)
(111,641,903)
60,500,000
Weighted average exercise price
$0.06
$0.06
$0.03
$0.04
$0.10
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
37
Notes to the financial statements
Set out below are the options exercisable at the end of the financial year:
2024
2023
Grant date
Expiry date
Number
Number
30-Jul-2020
30-Jul-2023
-
99,383,570
24-Nov-2020
30-Jul-2023
-
500,000
23-Dec-2020
31-Dec-2023
-
12,000,000
15-Dec-2022
6-Dec-2025
13,500,000
13,500,000
17-Feb-2023
16-Mar-2026
25,000,000
25,000,000
27-Jun-2023
26-Jun-2026
5,000,000
5,000,000
29-Nov-2023
1-Dec-2025
2,000,000
-
26-Feb-2024
26-Feb-2027
15,000,000
-
60,500,000
155,383,570
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.90 years (2023:
0.84 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:
Exercise
Share price at
Expected
Dividend
Risk-free
Fair value at
Grant date
Expiry date
price
grant date
volatility
yield
interest rate
grant date
29-Nov-2023
1-Dec-2025
$0.06
$0.029
81%
-
4.10%
$0.0076
26-Feb-2024
26-Feb-2027
$0.045
$0.036
80%
-
3.71%
$0.0174
26-Feb-2024
26-Feb-2027
$0.06
$0.036
80%
-
3.71%
$0.0148
26-Feb-2024
26-Feb-2027
$0.075
$0.036
80%
-
3.71%
$0.0129
Performance rights
Set out below is a summary of the movement in performance rights during the financial year:
Balance at
Expired/
Balance at
the start of
lapsed/
the end of
the year
Issued
Exercised
other
the year
Key management personnel
46,678,334 7,500,000 (600,000) (20,833,334) 32,745,000
Others
10,250,000
- (1,583,333)
(2,500,001)
6,166,666
56,928,334
7,500,000 (2,183,333) (23,333,335)
38,911,666
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:
VWAP
Fair value
Issue
Vesting
Expiry
Grant date
Expiry date
Milestone
Total
at grant date
date
period
period
30-Aug-23
6-Sep-26
$0.06
2,500,000
$0.0217
6-Sep-23
36 months
36 months
30-Aug-23
6-Sep-26
$0.08
2,500,000
$0.0185
6-Sep-23
36 months
36 months
30-Aug-23
6-Sep-26
$0.10
2,500,000
$0.0161
6-Sep-23
36 months
36 months
7,500,000
The 7,500,000 performance rights issued during the year all lapsed during the year.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
38
Notes to the financial statements
Note 7. Income tax expense
Consolidated
2024
2023
$
$
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
(7,635,544)
(8,101,122)
At statutory tax rate of 25% (2023: 25%)
(1,908,886)
(2,025,281)
Non-deductible expenses
(26,846)
260,061
Tax losses and temporary differences not recognised
1,935,732
1,765,220
Income tax expense/benefit
-
-
Deferred tax assets
Inventories
-
841
Property, plant and equipment
-
-
Trade and other payables
19,500
23,633
Provisions
796,084
789,405
Lease liabilities
18,598
153,003
Mine properties
70,236
15,457
Blackhole expenditure
557,535
750,664
Other liabilities
13,512
-
Foreign exchange loss
126
(5)
Capital losses
48,553
-
Tax losses
5,101,436
3,111,043
Net off deferred tax liabilities
(571,510)
(600,079)
Net deferred tax asset not recognised
(6,054,070)
(4,243,962)
Deferred tax assets
-
-
Deferred tax liabilities
Other assets
(135,920)
(137,295)
Mineral interest acquisition and exploration expenditure
(418,676)
(377,364)
Right-of-use assets
(16,914)
(85,420)
Net off deferred tax liabilities
571,510
600,079
Deferred tax liabilities
-
-
A potential deferred tax asset, attributable to tax loss incurred in the current period, amounts to approximately $6,054,070
(2023: $4,243,962) 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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
39
Notes to the financial statements
Note 8. Loss per share
Consolidated
2024
2023
$
$
Loss used in calculating loss per share
Loss after income tax attributable to owners of Suvo strategic Minerals Limited
(7,635,544)
(8,101,122)
(7,635,544)
(8,101,122)
Cents
Cents
Basic and diluted loss per share
(0.88)
(1.14)
Number
Number
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic and diluted loss per
share
862,941,096
712,555,052
862,941,096
712,555,052
Note 9. Cash and cash equivalents
Consolidated
2024
2023
$
$
Cash at bank and on hand
3,126,425
3,163,638
Note 10. Trade and other receivables
Consolidated
2024
2023
$
$
Trade receivables
1,414,959
1,416,028
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 2024.
In relation to the ageing of receivables, 79% (2023: 100%) of trade receivables are current, with 21% (2023: nil) being 0 to
30 days overdue and nil (2023: nil) being 31 to 60 days overdue.
Note 11. Inventories
Consolidated
2024
2023
$
$
Raw materials
984,607
956,144
Packaging
298,456
420,904
Work in progress
-
114,481
Finished goods
658,898
598,902
1,941,961
2,090,431
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
40
Notes to the financial statements
Note 12. Other financial assets
Consolidated
2024
2023
$
$
Current
Bank card guarantee
35,000
40,000
Rental guarantee
98,252
31,000
133,252
71,000
Non-current
Rehabilitation bond
2,086,000
2,086,000
Rental guarantee
-
98,233
2,086,000
2,184,233
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.
Note 13. Other current assets
Consolidated
2024
2023
$
$
Prepayments
69,615
550,518
GST receivable
79,916
165,519
Lease receivable
-
32,325
Accrued interest income
28,352
26,775
Sundry debtors
5,502
12,271
183,385
787,408
Note 14. Property, plant and equipment
Consolidated
2024
2023
$
$
Land and buildings - at fair value (land) and at cost (buildings)
798,934
798,934
Less: Accumulated depreciation on buildings
(374,219)
(337,267)
424,715
461,667
Leasehold improvements - at cost
222,926
222,926
Less: Accumulated depreciation
(76,745)
(54,818)
146,181
168,108
Plant and equipment - at cost
4,957,875 3,993,154
Less: Accumulated depreciation
(838,447) (378,488)
4,119,428 3,614,666
4,690,324
4,244,441
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
41
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:
Land and
Leasehold
Plant and
buildings
Improvements
equipment
Total
Consolidated
$
$
$
$
Balance at 1 July 2022
509,834
190,035
3,931,783
4,631,652
Additions
-
-
2,005,911
2,005,911
Disposals
-
-
(492)
(492)
Depreciation expense1
(48,167) (21,927) (225,029) (295,123)
Write-off
- - (2,097,507) (2,097,507)
Balance at 30 June 2023
461,667
168,108
3,614,666
4,244,441
Additions
-
-
964,721
964,721
Disposals
-
-
-
-
Depreciation expense1
(36,952)
(21,927)
(459,959)
(518,838)
Write-off
-
-
-
-
Balance at 30 June 2024
424,715
146,181
4,119,428
4,690,324
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.
Note 15. Mine properties
Consolidated
2024
2023
$
$
Mining properties - at cost
2,227,294
2,084,682
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Overburden
Mining
Rehabilitation
Asset
Reserves
Asset
Total
Consolidated
$
$
$
$
Balance at 1 July 2022
-
819,813
1,183,029
2,002,842
Additions
113,696
29,969
- 143,665
Change in present value of rehabilitation provision
-
-
(30,403)
(30,403)
Amortisation expense
-
(13,147)
(18,275)
(31,422)
Balance at 30 June 2023
113,696
836,635
1,134,351
2,084,682
Additions
332,019
-
- 332,019
Change in present value of rehabilitation provision
-
-
(145,618)
(145,618)
Amortisation expense
-
(18,580)
(25,209)
(43,789)
Balance at 30 June 2024
445,715
818,055
963,524
2,227,294
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
42
Notes to the financial statements
Note 16. Mineral interest acquisition and exploration expenditure
Consolidated
2024
2023
$
$
Mineral interest acquisition and exploration expenditure - at cost
3,225,385
5,824,404
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Exploration
and
evaluation
Consolidated
$
Balance at 1 July 2022
5,591,674
Additions
273,498
Exploration and evaluation expenditure impairment
(40,768)
Balance at 30 June 2023
5,824,404
Additions
153,915
Exploration and evaluation expenditure impairment
(2,752,934)
Balance at 30 June 2024
3,225,385
The Company has 4 exploration licences held by Mt Marshall Kaolin Pty Ltd (Gabbin Kaolin project) and 1 exploration licence
held 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 12 June 2024, tenements E70/5322, E70/5323, E70/5324, and part of tenement E70/5001, held by Watershed Enterprise
Solutions Pty Ltd, were surrendered. The $2,752,934 of exploration expenditure that related to these tenements, including
acquisition costs of $1,448,090, were written off. No other impairment has been recognised for the year ended 30 June 2024.
Note 17. Right-of-use assets
Consolidated
2024
2023
$
$
Office space - right-of-use
608,898
608,898
Less: Accumulated depreciation
(541,243)
(338,277)
67,655
270,621
Motor vehicles - right-of-use
64,598
228,769
Less: Accumulated depreciation
(46,165)
(157,709)
18,433
71,060
86,088
341,681
Additions to the right-of-use assets during the year were $15,655.
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
43
Notes to the financial statements
Note 18. Investment in associate
During the prior 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 decreased to recognise the Company’s 26% share of the loss generated by Dingo.
The Company sold its 26% share of Dingo during the current year, receiving funds of $25,788. The Company recorded a loss
on disposal of $170,362.
Consolidated
2024
2023
$
$
Investment in associate accounted for using the equity method:
Opening balance
208,864
220,000
Share of associate’s loss
(12,714)
(11,136)
Funds distributed
(25,788)
-
Loss on disposal of associate
(170,362)
-
-
208,864
Note 19. Trade and other payables
Consolidated
2024
2023
$
$
Trade payables
1,781,535
1,226,346
Accruals
319,682
322,193
Other payables
183,690
351,424
2,284,907
1,899,963
Note 20. Borrowings
Consolidated
2024
2023
$
$
Mortgage loan
1,000,000
-
On 30 November 2023, the Company obtained debt funding, from private lender Tember Nominees Pty Ltd, attracting an
interest rate of 10% per annum and repayable in 12 months. The Company has used its non-core asset, being freehold land
it owns at Lal Lal, located in Victoria, as security against the loan.
Note 21. Current provisions
Consolidated
2024
2023
$
$
Annual leave
374,034
329,076
Long service leave
287,807
247,236
Other provisions
8,750
14,250
Make good provision
-
218,288
670,591
808,850
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
44
Notes to the financial statements
Note 23. Interest-bearing liabilities
Consolidated
2024
2023
$
$
Current
Insurance funding
-
494,057
Equipment finance
158,414
147,104
158,414
641,161
Non-current
Equipment finance
370,234
528,648
370,234
528,648
Note 22. Current lease liabilities
Consolidated
2024
2023
$
$
Lease liability
125,114
387,594
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 36 for further information on financial instruments.
Note 24. Non-current provisions
Consolidated
2024
2023
$
$
Long service leave
12,171
55,682
Rehabilitation
2,466,648
2,511,375
2,478,819
2,567,057
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:
Rehabilitation
Consolidated
$
Balance at 1 July 2022
2,450,658
Additional provisions recognised
(30,403)
Unwinding of discount
91,120
Balance at 30 June 2023
2,511,375
Additional provisions recognised
(145,618)
Unwinding of discount
100,891
Balance at 30 June 2024
2,466,648
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
45
Notes to the financial statements
Note 25. Non-current lease liabilities
Consolidated
2024
2023
$
$
Lease liability
-
113,689
Refer to note 36 for further information on financial instruments.
Note 26. Equity - issued capital
Consolidated
2024
2023
2024
2023
Shares
Shares
$
$
Ordinary shares - fully paid
966,265,407
809,671,424
46,488,046
42,230,249
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
30 Jun 2022
680,407,120
38,732,317
Shares issued - Advisory fees
23 Sep 2022
931,174
0.049
46,000
Shares issued - Capital raising fees
23 Sep 2022
770,000
0.040
30,800
Shares issued - Placement
15 Dec 2022
50,000,000
0.040
2,000,000
Shares issued - Conversion of Performance Rights
20 Dec 2022
600,000
0.038
-1
Shares issued - Conversion of Performance Rights
16 Mar 2023
4,391,958
0.051
-1
Shares issued - Employee remuneration
16 Mar 2023
102,649
0.049
5,000
Shares issued - Employee remuneration
22 Jun 2023
419,970
0.036
15,000
Shares issued - Placement
27 Jun 2023
69,565,220
0.023
1,600,000
Shares issued - Options exercised
various
2,483,333
0.030
74,500
Share issue costs
-
(273,368)
Balance
30 Jun 2023
809,671,424
42,230,249
Shares issued - Conversion of Performance Rights
13 Jul 2023
600,000
0.031
-1
Shares issued - Options exercised
28 Jul 2023
241,667
0.030
7,250
Shares issued - Conversion of Performance Rights
7 Feb 2024
1,583,333
0.030
-1
Shares issued - Employee remuneration
7 Feb 2024
2,000,000
0.030
60,000
Shares issued - Placement
26 Feb 2024
83,333,334
0.030
2,500,000
Shares issued - Share Purchase Plan
1 Mar 2024
66,666,617
0.030
2,000,000
Shares issued - Advisory fees
28 Mar 2024
2,169,032
0.039
84,000
Share issue costs
-
(393,453)
Balance
30 Jun 2024
966,265,407
46,488,046
1 This appears as nil as the value is already fully recognised within equity, in the share-based payments reserve.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
46
Notes to the financial statements
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 2023 Annual Report.
Note 27. Equity - reserves
Consolidated
2024
2023
$
$
Share based payments reserve
7,700,253
7,765,360
7,700,253
7,765,360
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:
Performance
Rights
Options
Total
Consolidated
$
$
$
Balance at 1 July 2022
735,427 5,641,496
6,376,923
Share based payments
1,025,254
363,183 1,388,437
Balance at 30 June 2023
1,760,681
6,004,679
7,765,360
Share based payments (note 6)
(305,449) 240,342
(65,107)
Balance at 30 June 2024
1,455,232 6,245,021
7,700,253
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
47
Notes to the financial statements
Note 28. Equity - accumulated losses
Consolidated
2024
2023
$
$
Accumulated losses at the beginning of the financial year
(34,525,761) (26,424,639)
Loss after income tax expense for the year
(7,635,544)
(8,101,122)
Accumulated losses at the end of the financial year
(42,161,305) (34,525,761)
Note 29. Reconciliation of loss after income tax to net cash from operating activities
Consolidated
2024
2023
$
$
Loss after income tax expense for the year
(7,635,544)
(8,101,122)
Adjustments for:
Depreciation and amortisation
823,640
596,848
Share-based payments expense
(181,216)
1,408,628
Write-off of property, plant and equipment
- 2,097,507
Exploration and evaluation expenditure impairment
2,752,934 40,768
Share of loss of associate
12,714 11,136
Loss on disposal of associate
170,362 -
Make good provision
- 218,288
Unwinding of the discount on provisions
100,891
91,120
Other non-cash items
(2,557)
35,000
Change in operating assets and liabilities:
Change in trade and other receivables
1,070
623,489
Change in inventories
148,469
(194,216)
Change in other assets
585,467
87,625
Change in other financial assets
31,000
-
Change in trade and other payables
451,191 (560,336)
Change in other provisions
(181,770)
(138,667)
Net cash outflows from operating activities
(2,923,349)
(3,783,932)
Non-cash investing and financing activities
Consolidated
2024
2023
$
$
Additions to the right-of-use assets
15,655
-
Change in present value of rehabilitation provision
145,618
30,403
Additions to interest-bearing liabilities
61,079
547,088
222,352
577,491
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
48
Notes to the financial statements
Note 30. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
Consolidated
2024
2023
$
$
Short-term employee benefits
968,139
830,850
Post-employment benefits
77,758
67,047
Share-based payments
(239,615)
902,981
806,282
1,800,878
Note 31. 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:
Consolidated
2024
2023
$
$
RSM Australia Partners
Audit or review of the financial statements
86,500
78,500
Independent expert report
-
6,750
Grant applications
-
11,000
86,500
96,250
Note 32. Related party transactions
Parent entity
Suvo Strategic Minerals Limited is the parent entity.
Subsidiaries
Interests in subsidiaries and associates are set out in note 33 and 34 respectively.
Key management personnel
Disclosures relating to key management personnel are set out in note 30 and the remuneration report included in the
directors' report.
Transactions with related parties
During the financial year, no transactions with related parties were made.
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 2024, $10,400 was
outstanding to related parties (2023: $4,000).
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
49
Notes to the financial statements
Note 33. 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.
Ownership interest
Principal place of business /
2024
2023
Name
Country of incorporation
%
%
Watershed Enterprise Solutions Pty Ltd
Australia
100% 100%
Mt Marshall Kaolin Pty Ltd
Australia
100%
100%
Suvo Australia Pty Ltd
Australia
100%
100%
Suvo Minerals Australia Pty Ltd
Australia
100%
100%
Kaolin Australia Pty Ltd
Australia
100%
100%
Climate Tech Cement Pty Ltd (formerly known as
Greenmix Global Pty Ltd and Suvo Minerals
Technology Pty Ltd)
Australia
100%
100%
Note 34. Interests in associates
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:
Ownership interest
Principal place of business /
2024
2023
Name
Country of incorporation
%
%
Dingo HPA Pty Ltd
Australia
0%
26%
Note 35. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2024
2023
$
$
Loss after income tax
(7,635,543)
(5,381,711)
Total comprehensive loss
(7,635,543)
(5,381,711)
Statement of financial position
Parent
2024
2023
$
$
Total current assets
1,860,735
2,066,510
Total assets
13,512,664
16,427,868
Total current liabilities
1,485,670
883,650
Total liabilities
1,485,670
958,020
Equity
Issued capital
46,488,046
42,230,250
Reserves
7,700,253
7,765,360
Accumulated losses
(42,161,305) (34,525,762)
Total equity
12,026,994
15,469,848
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
50
Notes to the financial statements
Note 36. 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$189,149 as at 30 June 2024 (2023: US$50,647).
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 2024 of $528,648 (2023:
$1,169,809). These are principal and interest payment liabilities. Monthly cash outlays of approximately $2,200 per month
are required to service the interest payments. In addition, minimum principal repayments of $158,414 are due during the
year ending 30 June 2025. 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.
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 37, the parent entity had no contingent liabilities as at 30 June 2024 (30 June 2023: $Nil).
Capital commitments - Property, plant and equipment
The parent entity had committed $Nil for property, plant and equipment as at 30 June 2024 (30 June 2023: $Nil).
Material 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:
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
51
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.
Weighted
average
interest rate 1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 2024
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
1,781,535
-
-
-
1,781,535
Other payables
-
503,372
-
-
-
503,372
Interest-bearing - fixed rate
Borrowings
10.00%
1,000,000
-
-
-
1,000,000
Lease liability
5.80%
126,127
-
-
-
126,127
Interest-bearing liabilities
7.43%
192,370
192,370
208,401
-
593,141
Total non-derivatives
3,603,404
192,370
208,401
-
4,004,175
Weighted
average
interest rate 1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 2023
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
1,270,340
-
-
-
1,270,340
Other payables
-
629,623
-
-
-
629,623
Interest-bearing - fixed rate
Lease liability
5.98%
402,270
111,777
-
-
514,047
Interest-bearing liabilities
6.28%
703,214
192,370
400,771
-
1,296,355
Total non-derivatives
3,005,447
304,147
400,771
-
3,710,365
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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
52
Notes to the financial statements
Note 37. 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.
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
ii.
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 38. Commitments
Consolidated
2024
2023
$
$
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Rent, rates and minimum tenement expenditure for next 12 months
486,061
477,952
486,061
477,952
Note 39. Changes in liabilities arising from financing activities
Interest-
bearing
Lease
Borrowings
liabilities
liabilities
Consolidated
$
$
$
Balance at 1 July 2022
-
-
907,882
Net cash from/used in financing activities
-
622,721
(406,599)
Other additions to liabilities
-
547,088
-
Balance at 30 June 2023
-
1,169,809
501,283
Net cash from/used in financing activities
1,000,000
(702,240)
(391,824)
Other additions to liabilities
-
61,079
15,655
Balance at 30 June 2024
1,000,000
528,648
125,114
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
53
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. Climate Tech Cement
Pty Ltd is not a party to the deed of cross guarantee, it is a standalone wholly-owned subsidiary. Climate Tech Cement Pty
Ltd is not a reporting entity.
As at 30 June 2024, Climate Tech Cement Pty Ltd has no assets (2023: nil) and has liabilities of $246,719 (2023: $12,392),
all of which relate to amounts due to Group entities. Climate Tech Cement Pty Ltd generates no revenue, and made a loss
for the year of $234,327 (2023: $12,392).
Note 41. Matters subsequent to the end of the financial year
On 9 July 2024, the Company announced that a tripartite binding Joint Development Agreement (JDA) was executed
between Suvo, its wholly owned subsidiary Climate Tech Cement Pty Ltd (CTC) and Polevine Pty Ltd (PERMAcast). The
purpose of the JDA is for CTC and PERMAcast to deliver low carbon geopolymer concrete products and projects and
otherwise commercialise the intellectual property created through a joint venture entity.
On 17 September 2024, the Company secured a 12-month extension on debt funding of A$1.0 million (before costs)
advanced on 1 December 2023 and previously repayable on 30 November 2024. The loan term period has been extended
for a period of six months commencing 1 December 2024 and expiring 31 May 2025. A further six months will be available,
at the Company’s option, for the subsequent period from 1 June 2025 to 30 November 2025.
Apart from matters discussed above, no other matter or circumstance has arisen since 30 June 2024 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.
Suvo Strategic Minerals Limited
Annual Financial Statements
30 June 2024
54
Consolidated entity disclosure statement
As at 30 June 2024
Place formed /
Country of
Ownership
Interest
Tax
Entity Name
Entity type
incorporation
%
Residency
Watershed Enterprise Solutions Pty Ltd
Body Corporate
Australia
100%
Australia*
Mt Marshall Kaolin Pty Ltd
Body Corporate
Australia
100%
Australia*
Suvo Australia Pty Ltd
Body Corporate
Australia
100%
Australia*
Suvo Minerals Australia Pty Ltd
Body Corporate
Australia
100%
Australia*
Kaolin Australia Pty Ltd
Body Corporate
Australia
100%
Australia*
Climate Tech Cement Pty Ltd (formerly known as
Greenmix Global Pty Ltd and Suvo Minerals
Technology Pty Ltd)
Body Corporate
Australia
100%
Australia*
* Suvo Strategic Minerals Limited (the ‘Parent’) and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime.
Suvo Strategic Minerals Limited
Director’s Declaration
30 June 2024
55
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
2024 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;
●
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; and
●
The information disclosed in the attached consolidated entity disclosure statement is true and correct.
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
Executive Chairman
27 September 2024
Perth
RSM Australia Partners
Level 32 Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM
network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM
network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
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 2024, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
a material accounting policy information, the consolidated entity disclosure statement 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 2024 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.
Key Audit Matter
How our audit addressed this matter
Going concern - Refer to Note 1 in the financial statements
At 30 June 2024, the Group incurred a loss of
$7,635,544 and had net cash outflows from
operating activities of $2,923,349 for the year
ended 30 June 2024.
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.
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 impact of the
results of management´s assessment.
Our audit procedures included:
•
Assessing the reasonableness of the Group’s cash
flow forecast;
•
Checking
the
mathematical
accuracy
of
management’s cash flow forecast;
•
Challenging
the
reasonableness
of
the
key
assumptions used by management in the cash flow
forecast by comparison to our knowledge of the
business;
•
Assessing the sensitivity of the key assumptions
within management’s cash flow forecast; and
•
Assessing the disclosures in the financial report.
Impairment consideration for property, plant and equipment and mine properties - Refer to Note 14
and 15 in the financial statements
As at 30 June 2024, the Group recorded
property, plant and equipment and mine
properties amounting to $6,917,618 relating to its
Kaolin production cash generating unit (CGU).
We have considered this to be a key audit matter
due to significant management’s judgment
involved in consideration of whether these assets
are part of the CGU and if there are any indicators
of impairment at the reporting date.
Our audit procedures included:
•
Understanding the nature of and property, plant and
equipment and mine properties that relate to the CGU;
and
•
Critically assessing and evaluating management’s
assessment that no indicators of impairment existed in
relation to the CGU as at 30 June 2024.
Mineral interest acquisition and exploration expenditure - Refer to Note 16 in the financial statements
The Group has capitalised mineral interest
acquisition and exploration expenditure with a
carrying value $3,225,385 as of 30 June 2024.
We determined this to be a key audit matter due
to
the
significant
management
judgments
involved in assessing the carrying value of the
assets including:
• Determining whether the exploration and
evaluation expenditure can be associated
with finding specific mineral resources, and
the basis on which that expenditure is
allocated to an area of interest;
• Assessing whether exploration activities
have reached a stage at which the existence
of an economically recoverable reserves may
be concluded; and
• Assessing
whether
any
indicators
of
impairment are present and if so, any
impairment expense to be recognised.
Our audit procedures included:
• Assessing
the
Group’s
accounting
policy
in
compliance with Accounting Standards;
• Assessing whether the rights to tenure of the areas of
interest are current;
• Testing a sample of additions to supporting
documentation and assessing whether the amounts
capitalised during the year are in compliance with the
Group’s accounting policy and relate to the relevant
area of interest;
• Assessing and evaluating management’s assessment
of whether indicators of impairment existed at the
reporting date;
• Assessing the impairment recognised in profit or loss
for the year ended 30 June 2024;
• Enquiring with management and reading budgets and
other documentation as evidence that active and
significant operations in, or relation to, the relevant
area of interests will be continued in the future; and
• Assessing
and
evaluating
management’s
determination that exploration activities have not yet
progressed to the stage where the existence or
otherwise of economically recoverable reserves may
be determined.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2024 but does not include the financial report and 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:
a.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b.
the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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/admin/file/content102/c3/ar2_2020.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2024.
In our opinion, the Remuneration Report of Suvo Strategic Minerals Limited, for the year ended 30 June 2024,
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
Perth, WA
TUTU PHONG
Dated: 27 September 2024
Partner
Suvo Strategic Minerals Limited
Annual Mineral Resource Statement
60
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 2024 is
shown in Table 1 below.
Table 1 Kaolin Mineral Resources Statement (as at 30 June 2024)
White
ISO
Yield
Kaolinised
Brightness %
<45um
Kaolin
Category
Granite (Mt)
(457nm)
%
(Mt)
Gabbin Project (White Cloud Kaolin Project)1
Indicated
26.9
80.4
41.3
11.1
Inferred
45.6
80.6
41.1
18.8
Total
72.5
80.5
41.2
29.9
Trawalla Deposit2
Indicated
9.9
81.0
27.7
2.8
Inferred
2.8
79.8
28.3
0.8
Total
12.7
80.8
27.8
3.6
Pittong Operations3
Indicated
3.6
81.3
35.5
1.3
Inferred
1.9
79.1
33.0
0.7
Total
5.5
80.5
34.6
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 and has been revised to account for depletion due to mining activity
which occurred during the period 1 July 2023 to 30 June 2024 by Goldfields Geological Services on behalf of Suvo.
Suvo Strategic Minerals Limited
Annual Mineral Resource Statement
61
Annual Mineral Resource Statement
2. Material changes and resource statement comparison
A comparison table between 2023 and 2024 Mineral Resource Estimates for Suvo Strategic Minerals Limited’s projects and
operations is shown in Table 2 and Table 3 below.
Table 2 Kaolin Pittong Operations Mineral Resource Estimate comparison between 2023 and 2024
Estimate as at 30 June 2024:
White
ISO
Yield
Kaolinised
Brightness %
<45um
Kaolin
Category
Granite (Mt)
(457nm)
%
(Mt)
Pittong Operations
Indicated
3.6
81.3
35.5
1.3
Inferred
1.9
79.1
33.0
0.7
Total
5.5
80.5
34.6
2.0
Estimate as at 30 June 2023:
White
ISO
Yield
Kaolinised
Brightness %
<45um
Kaolin
Category
Granite (Mt)
(457nm)
%
(Mt)
Pittong Operations
Indicated
3.7
81.3
35.5
1.3
Inferred
2.0
79.1
33.0
0.7
Total
5.7
80.5
34.6
2.0
Table 3 Silica Sand Mineral Resource Estimate comparison between 2023 and 2024
Estimate as at 30 June 2024:
During the period, the Company opted to relinquish the majority of its silica sand tenements (E70/5322, E70/5323, E70/5324)
on the Eneabba Project in Western Australia (https://investorhub.suvo.com.au/announcements/6381470). The Company
partly relinquished EL70/5001, keeping approximately 10 blocks of the tenement which are situated on privately owned cleared
farmland. Consequently, there is no longer a Mineral Resource to report as the majority of the project has been relinquished.
The remaining ground maintained by the Company was not part of the original Mineral Resource Estimate.
Estimate as at 30 June 2023:
Product
Tonnes
SiO2
Al2O3
Fe2O3
TiO2
Category
Mt
%
%
%
%
Eneabba Project (Nova Silica Sands Project)
Silica Sand - Glass (-0.6 + 0.15mm)
132
99.2
0.4
0.1
0.0
Silica Flour (-0.15 + 0.075mm)
60
97.0
1.1
0.4
0.7
Silica Sand - Coarse (-1mm + 0.6mm)
24
99.0
0.5
0.1
0.1
The Company is not aware of any new information or data that materially effects the information as previously released and
all material assumptions and technical paraments underpinning the estimates continue to apply and have not materially
changed.
Suvo Strategic Minerals Limited
Annual Mineral Resource Statement
62
3. Competent Persons Statement - Mineral Resource Estimation
The information in this report that relates to Mineral Resources at Suvo Strategic Minerals Pittong Operations, is based on
information compiled by Mr Matthew Hernan, a Competent Person who is a Fellow and Chartered Professional of The
Australasian Institute of Mining and Metallurgy and a member of Australian Institute of Geoscientists. Mr Hernan is the
Principal Geologist at Goldfields Geological Services and provides independent geological consulting services to Suvo
Strategic Minerals Limited Pittong Operations. Mr Hernan has sufficient experience that is relevant to the style of mineralisation
and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in
the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Hernan consents to the inclusion in the report of the matters based on his information in the form and context in which it
appears.
The information related to the Trawalla deposit is extracted from the report entitled “Trawalla Maiden Resource Estimate”
created on 22nd September 2021 and is available to view at https://investorhub.suvo.com.au/announcements/4022588. The
information related to the Gabbin project (White Cloud Kaolin project) is extracted from the report entitled “Suvo increases
White Cloud kaolin resource by 84% to 72.5Mt” created on 25th March 2021 and is available to view at
https://investorhub.suvo.com.au/announcements/3950995. The Company confirms that it is not aware of any new information
or data that materially affects the information included in the original market announcements and, in the case of estimates of
Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in
the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form
and context in which the Competent Person’s findings are presented have not been materially modified from the original
market announcement.
4. Mineral Resource Governance
The Company has appropriate systems in place and suitably qualified and competent geological consultants to complete any
resource estimation or review to the required standards as shown in the 2012 JORC Code Guidelines. The Quality Assurance,
Sampling Systems, Assay procedures, Data Recording, Interpretation Standards and Resource Estimation Methods and other
paraments as set out in Table 1 of the JORC Code 2012 Guidelines are closely followed. The mineral resources reported
have been generated by independent external consultants where appropriate who are experienced in best practices in
modelling and estimation methods. The consultants have also undertaken reviews of the quality and suitability of the
underlying information used to determine the resource estimate.
Suvo Strategic Minerals Limited
Shareholder information
63
Shareholder information
The shareholder information set out below was applicable as at 25 September 2024.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
% of total
Number
shares
of holders
issued
1 to 1,000
145
0.01%
1,001 to 5,000
477
0.15%
5,001 to 10,000
289
0.24%
10,001 to 100,000
971
4.15%
100,001 and over
788
95.45%
2,670
100.00%
Holding less than a marketable parcel
815
0.29%
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
MR AARON PETER BANKS
73,748,184 7.62%
MELBOURNE SECURITIES CORPORATION LTD
71,250,000
7.36%
MR CHRISTOPHER JAMES WEED & MRS JANET ELIZABETH BROCKMAN
35,003,771
3.62%
MR PETER MARK LEWIS
22,000,000
2.27%
MR ROBERT KINGSLEY FITZGERALD
17,000,000
1.76%
RATDOG PTY LTD
16,058,522
1.66%
DIXSON TRUST PTY LTD
12,681,160
1.31%
MR CHRISTOPHER JAMES WEED & MRS JANET ELIZABETH BROCKMAN
12,565,101
1.30%
BEARAY PTY LIMITED
11,733,997
1.21%
CITICORP NOMINEES PTY LIMITED
11,015,127
1.14%
BONCLYDE PTY LTD
10,000,000
1.03%
MR KOBI BEN SHABATH
9,578,159
0.99%
SSELKROW PTY LTD
9,350,000
0.97%
MR WAYNE STEPHEN CLARK
8,550,000
0.88%
PRIMERO GROUP LIMITED
7,852,941
0.81%
SANDTON CAPITAL PTY LTD
7,200,000
0.74%
HSBC CUSTODY NOMINEES
6,730,404
0.70%
ALWAYS HOLDINGS PTY LTD
6,686,992
0.69%
FRANUNTA SUPER PTY LTD
6,200,000
0.64%
SD FAMILY INVESTMENTS PTY LTD
6,077,312
0.63%
361,281,670
37.33%
Suvo Strategic Minerals Limited
Shareholder information
64
Shareholder information
Substantial holders
As at the date of this report, the Company had received substantial shareholder notices from the following shareholders:
Ordinary shares
% of total
shares
Number held
issued
MR AARON PETER BANKS
75,451,2781
7.83%
MELBOURNE SECURITIES CORPORATION LTD
63,250,0002
6.55%
1As per most recent notice of change of interests of substantial holder received on 28 March 2024, hence, the number of
ordinary shares held does not reconcile to the twenty largest quoted equity security holders on 25 September 2024.
2As per most recent notice of change of interests of substantial holder received on 4 July 2024, hence, the number of ordinary
shares held does not reconcile to the twenty largest quoted equity security holders on 25 September 2024.
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
Tenements
Description
Tenement
number
Interest
owned %
White Cloud Kaolin Project
E70/5039
100%
Nova Silica Sands Project
E70/5001
100%
Pittong Project
M5408
100%
Pittong Project
M5409
100%
Pittong Project
M5365
100%
E = Exploration License
M = Mining Lease
Unquoted equity securities
Number
Number
on issue
of holders
Options expiring 1 December 2025 at $0.006
2,000,000
2
Options expiring 6 December 2025 at $0.075
1,000,000
1
Options expiring 6 December 2025 at $0.10
12,500,000
86
Options expiring 16 March 2026 at $0.08
5,000,000
3
Options expiring 16 March 2026 at $0.12
7,500,000
3
Options expiring 16 March 2026 at $0.16
12,500,000
3
Options expiring 26 June 2026 at $0.06
5,000,000
1
Options expiring 26 February 2027 at $0.045
5,000,000
11
Options expiring 26 February 2027 at $0.060
5,000,000
11
Options expiring 26 February 2027 at $0.075
5,000,000
11
Performance rights
37,328,333
9