ASX Announcement | 31 October 2024
Variscan Mines Limited (ASX:VAR)
2024 Annual Report
Variscan Mines Limited (“Variscan” or the “Company”) encloses its annual report for the year ended 30 June
2024.
This announcement has been approved for release by Mr Mark Pitts, Company Secretary, Variscan Mines Limited.
For further information, please contact:
Variscan Mines Limited (ASX:VAR)
Stewart Dickson
Managing Director & CEO
E: stewart.dickson@variscan.com.au
T: +44 (0) 7799 694195
Media & Investor Enquiries
The Capital Network
Julia Maguire
E: julia@thecapitalnetwork.com.au
P: +61 2 8999 3699
About Variscan Mines Limited (ASX:VAR)
Variscan Mines Limited (ASX:VAR) is a growth oriented, natural resources company focused on the acquisition,
exploration and development of high-quality strategic mineral projects. The Company has compiled a portfolio of high-
impact base-metal interests in Spain, Chile and Australia. Its primary focus is the development of its advanced zinc projects
in Spain. The Company’s name is derived from the Variscan orogeny, which was a geologic mountain building event caused
by Late Paleozoic continental collision between Euramerica (Laurussia) and Gondwana to form the supercontinent of
Pangea.
To learn more, please visit: www.variscan.com.au
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Visit our investor website: www.variscan.com.au
ANNUAL
REPORT
2024
ABN
87 095 092 158
DIRECTORS
Mr Anthony Wehby
Non-Executive Chairman
Mr Stewart Dickson
Managing Director & CEO
Mr Nicholas Farr-Jones AM
Non-Executive Director
Dr Frank Bierlein
Non-Executive Director
COMPANY SECRETARY
Mr Mark Pitts
REGISTERED OFFICE
5/191 St Georges Terrace
Perth, Western Australia
Australia
Telephone: +61 419 700 493
Email: info@variscan.com.au
Website: www.variscan.com.au
SHARE REGISTRY
Boardroom Pty Ltd
GPO Box 3993
Sydney NSW 2001
Australia
Telephone: +61 2 9290 9600
AUDITORS
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Australia
Telephone: +61 8 9227 7500
SECURITIES EXCHANGE LISTING
Variscan Mines Limited’s shares are listed on
the Australian Securities Exchange (ASX: VAR)
Corporate Directory
VARISCAN MINES ANNUAL REPORT 2024
2
Contents
Corporate Directory
2
Chairman’s Letter
4
Operational Review
6
Annual Mineral Resource Statement
25
Competant Persons Statements
26
Directors’ Report
28
Auditor’s Independence Declaration
44
Consolidated Statement of Profit or Loss and Other Comprehensive Income
45
Consolidated Statement of Financial Position
46
Consolidated Statement Of Cash Flows
47
Consolidated Statement Of Changes In Equity
48
Notes To The Consolidated Financial Statements
49
Consolidated Entity Disclosure Statement
73
Directors’ Declaration
74
Independent Auditor’s Report
76
ASX Additional Information
80
Contents
VARISCAN MINES ANNUAL REPORT 2024
3
Chairman’s
Letter
We are proud of the significant progress made in executing our exploration
and development plans for our flagship Novales-Udias Zinc Project in
northern Spain during the year ended 30 June 2024 (FY24).
This period notably saw the issue of an initial high-grade Mineral
Resource Estimate and secured a new lease agreement over the
San Jose mine site and facilities. All of which supports and aligns
with our rapidly evolving mine re-start strategy over the Novales-
Udias Project.
In addition, our exploration activities, led by a successful
underground drilling campaign, have yielded very exciting results.
Further, we significantly increased the size of the Novales-Udias
Project, via the addition of several new licence areas.
We continue to generate momentum and I am pleased to say that
further key project development milestones have been realised
in the early part of FY25.
On behalf of the Board of Directors of Variscan Mines, I am
pleased to report on our achievements during the financial year
ended 30 June 2024 (FY24). During this year we made significant
progress towards bringing the Novales-Udias Zinc Project back
into production.
Midway through FY24, Variscan announced its maiden JORC
Mineral Resource Estimate (MRE) for the historically producing
San Jose Mine that lies within the Novales-Udias Project. The
Operational Review that immediately follows this Letter will
discuss the makeup of this MRE in more detail. A key take-away
from this initial estimate is that San Jose hosts of one of the
highest grade zinc mineral resources currently held by an ASX-
listed company.
The Operational Review also provides shareholders with detail on
the exploration successes and associated development activities
undertaken during the year. These activities included successful
underground drilling campaigns in the San Jose Mine, and a
structural geological assessment over the linked San Jose and
Udias Mines. The positive results of the drilling and study work
have given us confidence that the mineral resources contained in
our Novales-Udias asset have significant growth potential. Your
Board have undertaken to report an updated MRE by the close of
calendar year 2024.
Another significant development during FY24 was the realization
of our growth ambitions by substantially upsize the Project’s land
area. In April 2024, Variscan was conditionally awarded five new
exploration licences, comprising 36.66km2 in aggregate, by the
Government of Cantabria. These new licences, which boost the
land package of Variscan’s Novales-Udias Project by around 70%,
are immediately adjacent to the existing San Jose and Buenahora
tenements and contain attractive exploration targets.
While successfully executing on our plans to grow the scale of the
Project we at the same time met another objective, which was
the extend the lease on the San Jose Mine site and facilities. This
lease extension, done at a competitive, commercial rate in line
with prevailing local norms for industrial sites, is a key enabler
to support Variscan’s current activities and future objective
mine re-start.
Late in FY24 and early in FY25 the Company undertook two
funding initiatives. The first was a small interim placement
which was followed by a Fully Underwritten Renounceable
Rights Issue to raise approximately $2m. These raisings saw
strong support from our largest shareholder and also attracted
some new sophisticated investors with experience in the natural
resources sector. At the time of writing, I am pleased to note the
early positive response of shareholders to this Rights Issue.
Looking ahead, it is apparent that FY25 will be a transformational
year for your Company. Completion of the Rights Issue will provide
funds and impetus to accelerate project activities. Deliverables
set to be released in the near future include an updated Mineral
Resource Estimate and a Mine Re-Start Study. We are hopeful
that both will be well received by investors and the wider market.
In closing, I would like to express my thanks to both our
management team and staff for their unwavering commitment
over the past year. I also want to show my appreciation to local
communities and regional authorities with whom we work, the
Government of Cantabria included, for their ongoing support,. I
also express my appreciation to our loyal shareholders for their
support during FY24 when the share price has not reflected the
achievements of the Company. Like all junior mining companies,
we have faced tough market conditions. We are well positioned
to capitalize on the substantial progress made to date and look
forward to delivering development milestones.
Yours sincerely
Anthony Wehby
Non-executive Chair
Chairman’s Letter
VARISCAN MINES ANNUAL REPORT 2024
4
5
VARISCAN MINES ANNUAL REPORT 2024
Operational
Review
f Group Highlights – Year in Review
Variscan has made great strides in executing its development plan for the
Company’s exciting Novales-Udias Zinc Project in northern Spain over the
course of the financial year ended 30 June 2024 (FY24).
All of our exploration and development activities show demonstrable progress as we continue to advance one of the highest-grade
zinc deposits in Europe towards re-starting production.
FY24 Highlights
▯
Delivery of an initial maiden high-grade Mineral Resource Estimate
▯
Reporting multiple sets of positive drilling results from a successful, extended, infill and expansion
underground drilling campaign defining new zones of high-grade mineralisation
▯
Comprehensive geological assessment and structural targeting study completed by world-renowned
expert, Dr. Brett Davis
▯
70% expansion of the tenure area to +100km2 via the addition of five new licences → new target areas with
the potential to increase project scale
▯
New Lease Agreement over the San Jose Mine site and facilities secured
Post Period Achievements
▯
Marketing Agreement executed with Square Resources
▯
Newly compiled, assays from historic underground face-sampling and drilling results at the Udias
Mine show very high-grade zinc-lead results, confirming mineralization outside of the current Mineral
Resource Estimate footprint
▯
Launched fully underwritten Rights Issue to raise ~$2.067m with significant support from Variscan’s
major shareholder and attracting new sophisticated and professional investors
Future Milestones & Activities in FY25
▯
Maiden underground drilling campaign at Udias Mine
▯
Updated Mineral Resources Estimate
▯
Publication of Mine Re-Start Study
▯
Evaluation of additional assets
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
6
Operational Review
f Spain
Variscan holds two very attractive zinc-rich, proven producing assets in Spain.
Figure 1. Variscan’s Spanish Zinc Projects
Novales-Udias Project
Variscan Mines’ FY24 exploration and development activities were again focussed on the Company’s flagship Novales-Udias
Project, located in the Basque-Cantabrian Basin approximately 30km from the regional capital, Santander in northern Spain.
Our work has significantly advanced the project and builds on the compound progress made over preceding years. The results from
our exploration activities, especially drilling, and study work, notably the initial Mineral Resource Estimate and structural geology
review, have reinforced our confident view that Novales-Udias Project has a realistic prospect of recommencing mining once again.
This remains our primary focus and our future work plans align to deliver one of the highest-grade, development stage zinc deposits
in Europe towards re-starting production.
Key advantages and attributes of the Novales-Udias Project.
▯
A near term zinc production opportunity (subject to further positive exploration and development work)
▯
A maiden JORC compliant Mineral Resource Estimate of 1.08 Mt at 9% Zn defined in FY24
▯
A large tenement holding of +100 km2 (including a number of granted mining tenements)
▯
Regional exploration potential for further discoveries analogous to Reocin (total past production and
remaining resource 62Mt @ 8.7% Zn and 1.0% Pb)1,2
VARISCAN MINES ANNUAL REPORT 2024
7
Operational Review
▯
Novales Mine is within trucking distance (~ 80km) from the zinc smelter in Asturias
▯
Classic MVT carbonate hosted zinc-lead deposits
▯
Historic production of high-grade zinc; average grade reported as ~7% Zn3
▯
Simple mineralogy of sphalerite-galena-calamine
▯
Mineralisation is strata-bound, epigenetic, lenticular and sub-horizontal
▯
Reported historic production of super high grade ‘bolsas’ (mineralised pods and lenses) commonly 10-20%
Zn and in some instances +30% Zn
▯
Assay results of targeted grab samples taken from within the underground Novales Mine recorded 31.83%
Zn and 62.3% Pb4
▯
Access and infrastructure all in place
▯
Local community and government support due to historic mining activity
Note: (1) Velasco, F., Herrero, J.M., Yusta, I., Alonso, J.A., Seebold, I. and Leach, D., 2003 - Geology and Geochemistry of the Reocin Zinc
Note: (2) Cautionary statement: references in this report to the publicly stated resource tonnes and grade of the Project (Reocin)
are historical and foreign in nature and not reported in accordance with the JORC Code 2012, or the categories of
mineralisation as defined in the JORC Code 2012. A competent person has not completed sufficient work to classify the
resource estimate as mineral resources or ore reserves in accordance with the JORC Code 2012. It is uncertain that
following evaluation and/or further exploration work that following evaluation and/or further exploration work that the
foreign/historic resource estimates of mineralisation will be able to be reported as mineral resources or ore reserves in
accordance with the JORC Code 2012.
Note: (3) These figures have been taken from historical production data from the School of Mines in Torrelavega historical archives
Note: (4) Refer to ASX announcement dated 19 December 2019
Award of new licences substantially increases size of the Novales-Udias Project
In early April 2024, Variscan’s Novales-Udias Project was significantly increased, after the Company was conditionally awarded
five new exploration licences, comprising 36.66km2 in aggregate, by the Government of Cantabria (see ASX announcement dated
8 April 2024).
Figure 2. Map of enlarged licence areas and extension of Novales Trend to the North-East
VARISCAN MINES ANNUAL REPORT 2024
8
Operational Review
Licence Area
Size (km2)
Esperanza
34.44
Estela
0.56
Elena
0.28
Candela
1.11
Valeria
0.28
TOTAL
36.66
Table 1. Map of enlarged licence areas and extension of Novales Trend to the North-East
These new licences, which have increased the land package of Variscan’s Novales-Udias Project by around 70%, are immediately
adjacent to the existing San Jose and Buenahora tenements. They extend the Novales Trend to the northeast to approximately 12
km in strike length. These additional tenements represent a de-risked exploration opportunity for the Company, which extend over
very prospective areas, increase the scale of the Novales-Udias Project.
One of these newly acquired licences, the Estela licence, hosts the main shaft of the Udias Mine (Pozo Madroño) and some major
underground developments, and infills a previous gap in the San Jose licence.
This excellent step forward in the growth of the Novales-Udias project has the potential to increase scale and tonnage in this
proven, high grade zinc district. This is supported by the positive results from historical exploration, collated by Variscan. The
Variscan exploration team identified the location of 53 drillholes over the Esperanza licence area (see Figure 3) which include:
▯
DDH S-21:
6.0m @ 9.62% Zn
▯
DDH S-163:
7.3m @ 6.50% Zn
▯
DDH S-162:
3.2m @ 9.57% Zn.
The more significant zinc anomalies identified from historical geochemical sampling typically range 4,000 – 9,000 ppm Zn
(maximum 33,600 ppm Zn) and 380 – 2280 ppm Pb, making for compelling drill targets.
9
VARISCAN MINES ANNUAL REPORT 2024
Operational Review
Figure 3. Map of enlarged licence areas and historical drilling over the Esperanza Licence
The future workplan for these new tenements includes drilling with applications already submitted.
FY24 Novales-Udias exploration and development activities
During the year, the Variscan team have been busy on the ground with all work-streams aligned towards the achievement of an initial
JORC-compliant Mineral Resource Estimate as well as working towards the re-start of mining operations. That has been and remains
our main effort.
Acquiring and interpreting historical data to gain operational leverage
Since we acquired the Novales-Udias project, we have sought to acquire available exploration and production data to augment our own
fieldwork and studies. Having collated a significant and valuable drilling database, as well as geological and mine plans, we have gained
operational leverage. Our extensive geological understanding has been developed efficiently and effectively, saving time and money.
In August 2023, Variscan Mines announced exploration and archival work at the San Jose Mine (see ASX announcement dated 7 August
2023) which confirmed a south-west extension and continuity of mineralisation from the San Jose Mine, on the Novales-Udias Trend.
The extension of mineralisation, along strike, revealed from new data collated by Variscan Mines, comprised, 131 historical drillholes
for 7,398 metres. Undoubtedly this shed a bright light on the upside potential to the south-west of the San Jose Mine and drew focus
onto the potential significance of the Udias Mine. This evolved with further positive sampling data reported post period (see ASX
Announcement dated 10 September 2024) and has advanced further with Variscan expecting to commence drill-testing the Udias
Mine complex for the first time in the fourth quarter of 2024.
VARISCAN MINES ANNUAL REPORT 2024
10
Operational Review
Figure 4. Plan view of drill-hole data illustrating significant exploration
potential as mineralisation extends on strike to the south west of San Jose Mine
Revised structural and geological assessment highlights continuity and new drill targets at San
Jose Mine
Mid-February 2024 saw Variscan report the findings of a comprehensively updated, structural geological assessment and structural
targeting study at the San Jose Mine and the surrounding Novales Trend (see ASX announcement dated 19 February 2024).
The study, completed by world renowned expert, Dr. Brett Davis, resulted in a significantly improved understanding of the controls on
multi-phase Zn-Pb mineralization within the San Jose and Udias mine systems.
Its outcomes confirm the orientation of the dominant structural trends as a highly effective vectoring tool for drilling and future
exploration. The study identified new targets within the San Jose Mine for immediate drill-testing and highlighted numerous target
zones within the broader Novales – San Jose – Udias corridor.
VARISCAN MINES ANNUAL REPORT 2024
11
Figure 5. Approximate orientation of the dominant D1 and D2 structures overlaid with existing mine development at the San Jose Mine
Figure 6. Interpreted tectonic evolution of the structurally controlled -mineralization-fluid flow system at San Jose
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
12
Figure 7. Regional-scale structures overlaid on JORC Exploration Target and proposed surface
drillhole locations proximal and further afield to the Udias – San Jose – Novales mine system and Zinc Trend.
Variscan quickly started to drill test some of the newly identified targets within the San Jose Mine as part of the ongoing underground
drilling campaign at the time.
Successful underground drilling campaign yields excellent high grade zinc results and is
expanded
Drilling is at the centre of our exploration activities and during the reporting period Variscan has been pleased to report multiple sets
of positive drilling results.
In recent years, the Variscan management team made the decision to acquire its own portable drill rig which means that by using our
trained staff, we are able to conduct underground drilling programs efficiently, cost effectively and with a high degree of flexibility.
Throughout the reporting period and beyond, having this in-house capability has allowed Variscan to continue drilling in contrast to
the wider junior mining sector which signalled reduced drilling activity amid challenging capital market conditions. This strategy has
proved highly successful.
In October 2023 (see ASX announcement dated 5 October 2023), high grade zinc assay results from underground drilling defined a
new lower lens of high-grade zinc mineralization below La Catedral stope in the San Jose Mine. Selected drilling results included:
▯
NDDT007B:
21.85m @ 8.50% Zn, 0.38% Pb
▯
NDDT007:
23.35m @ 7.09% Zn, 1.72% Pb
▯
NDDT014:
14.55m @ 5.81% Zn, 0.90% Pb
▯
NDDT012:
10.30m @ 5.09% Zn, 0.19% Pb
▯
NDDT010:
3.80m @ 24.58% Zn, 3.13% Pb
▯
NDDT008:
9.30m @ 5.18% Zn, 0.13% Pb
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
13
Figure 8. Plan view of drill-hole data illustrating newly defined La Catedral Lower Lens, Central Zone, San Jose Mine
Figure 9. Cross-section of newly defined La Catedral Lower Lens, Central Zone, San Jose Mine
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
14
Early March 2024 saw Variscan report the discovery of further high-grade zinc intercepts from its underground diamond drilling program at
the San Jose Mine (see ASX announcement dated 4 March 2024). Selected drilling results included:
▯
NDDT027
14.5 m @ 8.93% Zn, 0.50% Pb
▯
NDDT029
11.6 m @ 8.43% Zn, 1.61% Pb
▯
NDDT026
7.0 m @ 5.30% Zn, 0.04% Pb
▯
NDDT028
6.0 m @ 6.59% Zn, 0.62% Pb
▯
NDDT020
3.0 m @ 5.55% Zn, 0.41% Pb
Figure 10. Plan view of new drill-hole data over the Central Zone, San Jose Mine
This round of drilling results supported the Mineral Resource Estimate model (having been published in November 2023 – see below for
further discussion) with positive infill drill intercepts. It also confirmed the potential for additional lenses below the existing model and
further extensions.
To follow-up success, the Variscan management team upscaled and extended the drilling campaign, further details of which are set out in
post-period exploration results set out below.
An initial, maiden high-grade Mineral Resource Estimate published
In late November 2023, Variscan announced an initial, maiden JORC Mineral Resource Estimate (MRE) for the historically producing San Jose
Mine of 1.1Mt @ 9.0% Zn and 1.2%Pb at a cut-off grade of 2% Zn (see ASX announcement dated 28 November 2023). The maiden MRE for the
San Jose Mine is one of the highest grade zinc mineral resources currently owned by an ASX-listed company.
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
15
Deposit
Classification
Tonnes (Kt)
Zn %
Pb %
Zn + Pb %
Indicated
490
10.0
1.7
11.7
San Jose
Inferred
250
12.3
1.6
14.0
Sub-total
740
10.8
1.7
12.5
San Jose (NE)
Inferred
260
4.7
0.1
4.8
Udîas (NE)
Inferred
90
6.5
0.4
6.8
Total
Indicated
490
10.0
1.7
11.7
Inferred
590
8.2
0.8
8.9
TOTAL
1,080
9.0
1.2
10.2
Table 2. JORC Mineral Resource Estimate for San Jose Mine and
north-eastern Udías by deposit and classification reported above a 2% Zn cut-off
Notes:
▯
Due to effects of rounding, the total may not represent the sum of all components.
▯
Mineral resource is reported from all blocks, classified as either Indicated or Inferred, where interpolated block grade is ≥2.0% Zn.
▯
Block model is coded where blocks have been depleted by historical underground mining activities.
▯
A density value of 3 t/m3 is applied to all blocks.
Table 11. JORC Mineral Resource Estimate for San Jose Mine and north-eastern Udías by deposit
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
16
Resources in the Indicated category represent 45% of the MRE, with grades notably higher (10% Zn) than those in the Inferred category
(8.2% Zn), providing potential for significant grade and tonnage increases with infill drilling.
Figure 12. Mineral Resource Estimate categories in 3D View
Importantly, the deposit is already considered to be of sufficient grade, quantity, and continuity to have reasonable prospects for
eventual economic extraction. This initial, maiden resource for the San Jose Mine is a significant milestone for the Company. It
validates the success of our exploration activities to date and establishing a platform upon which we can continue to build a resource
inventory as well as advance mine re-start assessments.
Mineralization remains open along strike, and at depth. Subsequent drilling and exploration work undertaken by VAR has confirmed
the potential to grow the MRE. Variscan expect to publish an updated MRE before the end of calendar year 2024.
Lease San Jose Mine site & facilities extended; a key enabler supporting our mine re-start strategy
In early calendar year 2024, Variscan signed a new agreement to lease the San Jose Mine site and facilities for a period of three
years, extendable up to six years, at the option of Variscan, at a competitive, commercial rate in line with prevailing local norms for
industrial sites (see ASX announcement dated 29 January 2024). The site owners, Groupo Anibal are a supportive local partner and
Variscan shareholder. As this site is already permitted for mineral exploration, development and mining activities, with extensive in-
situ facilities and infrastructure already in place, the signing of the extended lease is a key enabler to support Variscan’s stated mine
re-start strategy. By leveraging these facilities, we can hopefully lower our re-start capex requirements and timeframes.
The site confers a number of advantages to Variscan:
▯
31,199m2 site adjacent to the village of Novales is
already permitted for use for mineral exploration,
development and mining activities;
▯
Access to the main portal of the underground San
Jose Mine;
▯
The site comprises 5 permanent buildings. The total
area of constructed buildings is 1,157m2 with the
ability add more warehouse area if required;
▯
The property has existing water supply, which is
being upgraded and single-phase power. The site was
previously supplied with overhead 3-phase power,
re-connection will be assessed during Mine Re-Start
Study work;
▯
Excellent core logging and storage facilities
established (see Figures 14 & 15);
▯
Direct access via sealed roads capable of taking
heavy goods vehicles;
▯
Site is within trucking distance (~145km) from the San
Juan de Nieva zinc smelter operated by Asturiana de
Zinc (100% owned by Glencore).
▯
Site is ~30km southwest from the regional capital,
Santander which has an international airport and a
deep water port with freight terminals.
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
17
Figure 13. Aerial view of San Jose Mine Site & Facilities
Figure 14. San Jose Mine Site Core Logging Area
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
18
Figure 15. San Jose Mine Site Core Storage
Operational Review
19
VARISCAN MINES ANNUAL REPORT 2024
Guajaraz Project (central Spain).
The Guajaraz Project is a prospective brown-field zinc-rich polymetallic opportunity with known mineral occurrences. The Project
is located in the highly mineralised Central Zone of the Iberian Massif, which ranks as one of the most mineralised units globally and
represents the internal zone of the prolific European Variscan Orogenic belt. Variscan believes Guajaraz represents an excellent, de-
risked brownfield polymetallic project. Reflective of this belief in the prospectivity of this Project, the Company filed an application
with the authorities in Castilla-La Mancha during FY24 for a 3-year extension of the current exploration licence over the Guajaraz
tenement area. This 3-year extension, covering the period 2023 through 2026 was granted to Variscan Mines’ local Spanish subsidiary,
Variscan La Mancha in late October 2023.
f Post FY24 year end
Further exploration activities.
Subsequent to the end of Variscan’s FY24, exploration activities have continued apace.
Extended underground drilling continues to yield positive intercepts
Variscan has continued and expanded its drilling activities. In very early FY25, Variscan informed investors that drilling had intersected
significant zinc mineralisation outside of the Mineral Resource Estimate model delivering growth potential (see ASX announcement
dated 11 July 2024. The strong assay results received from this underground infill and extensional drilling campaign with significant
drilling results include:
▯
NDDT033:
14.10 m @ 5.31% Zn, 0.44% Pb
▯
NDDT032:
11.00 m @ 6.66% Zn, 0.72% Pb
▯
NDDT034:
4.65 m @ 5.49% Zn, 0.14% Pb
▯
NDDT035:
4.00 m @ 5.92% Zn, 0.26% Pb
Figure 16. Plan view of new drill-hole data over the Central Zone, San Jose Mine
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
20
Figure 17. 3D section view of drill-hole locations testing D2 structural
targets between Stope 200 and beside the La Caseta Trend in the San Jose Mine
Drilling has continued seamlessly from FY24 into FY25. The program is targeting previously untested southwest extensions of the San
Jose Mine as well as testing geologically informed potential feeder zones in the central zone of the San Jose Mine. Results are yet to
be published. All available drilling results will be incorporated into the Mineral Resource Estimate update scheduled for release in late
CY2024
Historic underground face-sampling Sampling data a positive prelude to maiden drilling in the Udias Mine
Towards the end of Q1 FY25, (ASX announcement dated, 10 September 2024) Variscan announced that newly compiled, assays from
historic underground face-sampling at the Udias Mine had revealed very high-grade zinc-lead results, further confirming mineralization
outside of the current Mineral Resource Estimate footprint (see ASX announcement dated 10 September 2024). 337 samples were
compiled over distance of 2.2km which includes the following high-grade sample results taken along development drives and faces:
▯
Sample UTS-15:
4.50m @ 26.47% Zn, 19.46% Pb
▯
Sample UTB-65L:
2.80m @ 35.87% Zn, 0.17% Pb
▯
Sample UTB-11:
4.00m @ 21.50% Zn, 0.32% Pb
▯
Sample B-20:
3.00m @ 28.20% Zn, 5.90% Pb
▯
Sample UTB-32:
2.00m @ 36.95% Zn, 0.41% Pb
▯
Sample UTB-132:
2.00m @ 35.39% Zn, 0.07 % Pb
▯
Sample UTB-86:
4.00m @ 16.39% Zn, 2.18% Pb
▯
Sample D-5:
1.55m @ 41.00% Zn, 0.22% Pb
These samples together with historic drilling results report August 2023 (see previous discussion above) have supported the definition
of exciting high-priority targets for our forthcoming, maiden underground drilling at the Udias Mine, which is due to start in H1 FY25.
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
21
Figure 18. Plan view of underground face sampling results in the Udias Mine
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
22
Figure 19. Simplified geological cross-section showing connectivity and continuity between San Jose Mine and Udias Mine
f New capital raised
Just after the end of FY24, Variscan completed an interim funding
initiative, which raised $294,000 through the issue of 49,000,000 new
ordinary shares, priced at $0.006 per share (see ASX announcement dated
22 July 2024).
This placement was supported by the Company’s largest shareholder, Zinc GroupCo and also attracted some new sophisticated
investors. At the same time, Variscan directors provided an additional $100,000 of unsecured working capital loans, convertible into
new shares on the same terms of the Interim Placement (subject to shareholder approval).
In mid-August 2024, a direct placement was subsequently made to Zinc GroupCo (see ASX announcement dated 23 August 2024). This
issue raised a further $90,000 for the Company, via the issue of 15,000,000 new ordinary shares at $0.006 per share. The issue saw
Zinc GroupCo increase its holding in Variscan to 22.57%.
In late September 2024, Variscan announced a fully underwritten renounceable Entitlement Offer to raise approximately $2.067m. It
has received strong support from Variscan’s major shareholder Zinc GroupCo, and also attracted some new sophisticated investors (see
ASX announcement dated 26 September 2024). This is a strong signal amid challenging market conditions for junior mining companies,
All these additional funds will be directed towards accelerated exploration and drilling programs and development studies at the
Company’s flagship Novales-Udias Zinc project as well as operational working capital requirements.
f Marketing Agreement for sale of future zinc & lead production secured
In mid-August 2024, Variscan announced the appointment of Square
Trading Singapore Pte Ltd as its exclusive marketing manager for the
worldwide sale of zinc concentrates from its Novales-Udias and Guajaraz
Projects in Spain (see ASX announcement dated 13 August 2024).
In an associated development, Square Trading will also assist Variscan to secure third party financing to construct and operate the
mines being developed by the Company.
Square brings considerable global marketing and trading experience and capacity across a number of commodities. We are pleased to
have a marketing partner who is aligned with the Company and its shareholders by virtue of its co-ownership of the Company’s largest
shareholder, Zinc GroupCo.
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
23
f Exit from Chile
Variscan announced its decision to relinquish the Company’s limited interest in the Rosario Project in Chile. Given the ongoing success of
exploration and development work occurring at the Company’s Spanish assets, Variscan has resolved to focus its capital and resources
on these highly promising zinc projects. The decision is aligned with Variscan’s key objective; the re-commencement of mining at the
Novales-Udias Project. As a result, the Company has relinquished its interest in the Chilean project and ceased all business activities
within Chile.
Looking ahead and note of thanks
As the Chairman has noted in his opening letter, we expect FY25 to be a transformational year for Variscan. We expect a number of very
significant milestones for the Novales-Udias Project to be achieved in FY25.
The current financial year has got off to a good start, continuing on the progress made in FY24, A number of exploration activities have
already been completed – and more are in the pipeline, including the maiden underground drilling campaign at the Udias Mine.
Variscan is also now well progressed on both an updated Mineral Resource Estimate and the compilation of a Mine Re-Start Study. Both
these much-anticipated reports are expected to be released in the first half of Variscan’s 2025 financial year.
I want to personally thank the entire team at Variscan for their hard work over our FY24. Their sustained efforts were critical to the
delivery of our development plans and genuine exploration successes achieved over the past 12 months. Their labours have also set
Variscan up for the realisation of some ultra-important development milestones over the near-term, headed by the updated Mineral
Resource Estimate and compilation of the Mine Re-Start Study.
I also want to thank our host local communities as well as the regional authorities, the Government of Cantabria included, for their
ongoing support, as we develop the Novales-Udias Project. Last but not least, I want to say thank you to the Board of Directors and our
loyal shareholders for their ongoing support, as the planned transformation of Novales-Udias from project-status to producing mine
status draws ever closer. My commitment and conviction to achieve this objective is more resolute than ever.
Stewart Dickson
Managing Director & CEO
Operational Review
VARISCAN MINES ANNUAL REPORT 2024
24
f Annual Mineral Resource Statements
Annual Review
The Company has conducted a review of its mineral resources at the end of the financial year and has compiled this Mineral Resource
Statement in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The
JORC Code 2012 Edition) and Chapter 5 of the ASX Listing Rules and ASX Guidance Note 31. The Company has no Ore Reserve estimates.
San Jose Mine – Novales-Udias Project
The San Jose Mine is situated within the Company’s Novales-Udias Project area which is located near the town of Novales, in the region
of Cantabria, Spain. The project is centred around the former producing San Jose underground zinc-lead mine with a large surrounding
area of exploration opportunities over the 9km Novales Trend, which includes a number of satellite underground and surface workings.
During the year the Company engaged ERM Sustainable Mining Services team (previously CSA Global) (ERM) to undertake a review and
prepare a Mineral Resource estimate for the San Jose deposit and the adjacent north-eastern part of the Udías deposit, both of which
were previously mined for zinc during the 20th century.
The Mineral Resource estimate was initially published via an ASX announcement dated 28 November 2023.
Resources
As at 30 June 2024, total JORC 2004 Measured, Indicated and Inferred mineral resources were as follows:
San Jose Mine – Novales-Udias Project - Mineral Resource Reported above a 2% Zn cut-off
Deposit
Classification
Tonnes (Kt)
Zn %
Pb %
Zn + Pb %
Indicated
490
10.0
1.7
11.7
San Jose
Inferred
250
12.3
1.6
14.0
Sub-total
740
10.8
1.7
12.5
San Jose (NE)
Inferred
260
4.7
0.1
4.8
Udîas (NE)
Inferred
90
6.5
0.4
6.8
Total
Indicated
490
10.0
1.7
11.7
Inferred
590
8.2
0.8
8.9
TOTAL
1,080
9.0
1.2
10.2
Mineral Resource Estimation Governance Statement
The Company ensures that the Mineral Resource estimates are subject to appropriate levels of governance and internal controls.
The Mineral Resource has been generated by employees and consultants of the Company who are experienced in best practices in
modelling and estimation methods and have undertaken reviews of the quality and suitability of the underlying information used to
generate the resource estimation.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the
time of estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities,
exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in reserves
or resources being restated.
The Company will report any future mineral reserves and resources estimates in accordance with the 2012 JORC Code.
Annual Mineral Resource Statement
VARISCAN MINES ANNUAL REPORT 2024
25
f Competent Persons Statements
Exploration
The information in this report that relates to Exploration Results is based on and fairly represents information compiled by Dr. Michael
Mlynarczyk. Dr Mlynarczyk is a Principal consultant for Redstone Exploration Services, a geological consultancy acting as an external
consultant to Variscan Mines and is a Professional Geologist (PGeo) of the Institute of Geologists in Ireland, and European Geologist
(EurGeol) of the European Federation of Geologists, as well as a Fellow of the Society of Economic Geologists (SEG). Mr Mlynarczyk has
sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are
undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code). Dr. Mlynarczyk consents to the disclosure of the information in this report
in the form and context in which it appears.
Mineral Resource Estimate
The information in this report that relates to Mineral Resources is based on, and fairly reflects, information compiled by Dr. Michael
Mlynarczyk. Dr. Michael Mlynarczyk is a Principal consultant for Redstone Exploration Services, a geological consultancy acting as
an external consultant to Variscan Mines and is a Professional Geologist (PGeo) of the Institute of Geologists of Ireland, and European
Geologist (EurGeol) of the European Federation of Geologists, as well as Fellow of the Society of Economic Geologists (SEG). Dr. Michael
Mlynarczyk has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity
which they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the Australasian Code for the Reporting
of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Dr. Michael Mlynarczyk consent to the disclosure of the
information in this report in the form and context in which it appears.
Where reference is made to previous releases of exploration results in this announcement, the Company confirms that it is not aware
of any new information or data that materially affects the information included in those announcements.
Competant Persons Statements
VARISCAN MINES ANNUAL REPORT 2024
26
VARISCAN MINES ANNUAL REPORT 2024
27
Directors’
Report
Your directors submit their report for the year ended
30 June 2024.
28
VARISCAN MINES ANNUAL REPORT 2024
f Directors
The names and details of the Company’s directors in office during the
financial year and until the date of this report are as follows. Directors were
in office for this entire period unless otherwise stated.
Anthony (‘Tony’) Wehby MAICD
Non-Executive Chairman (Appointed 20 October 2022)
Tony is a former Partner of PriceWaterhouseCoopers and
Corporate Finance Specialist.
Tony is an experienced listed company director with over 50 years
of executive and non-executive experience.
Having operated in the mining industry for a considerable
time, he is currently a non-executive director on the Board of
Kingston Resources Ltd a listed Asia Pacific gold producer. He
has previously been Chairman of Tellus Resources Limited, Non-
executive Chairman of Aurelia Metals Limited and a Director of
Ensurance Ltd and Harmony Gold (Aust) Pty Ltd.
Tony has a financial consulting practice focused on strategic
advice and he is a member of the Australian Institute of Company
Directors.
Stewart Dickson BA (Hons), MBA
Managing Director (Appointed 1 May 2017)
Stewart is an experienced corporate financier with a decade of
investment banking experience. Most recently, he was Managing
Director and Head of Metals & Mining at Cantor Fitzgerald Europe,
based in London. He had responsibility for client coverage of
public and private mining companies across precious metals
and base metals, bulks, fertilizers and specialty metals. He has
a broad range of international financial advisory, equity capital
markets and corporate broking transaction experience including
initial public offerings, financings and M&A.
Prior to investment banking, Mr Dickson served in the British Army
as a commissioned officer and saw operational service overseas.
Stewart is a graduate of University College London and holds an
MBA from Henley Business School.
Nicholas Farr-Jones AM LLB
Non-executive Director (Appointed 1 July 2022)
Nick has over 25 years of experience in the global mining sector
as a specialist in natural resources investment and corporate
governance. Additionally, he is an experienced public company
director.
Nick qualified as a lawyer before pursuing a career in investment
banking. Notably he was responsible for the metal derivative
business of Societe Generale in Europe and Africa before leading
its commodity finance business in Australia. He is currently a
Director of Taurus Funds Management, headquartered in Sydney,
which specialises in bespoke financing solutions for global mid-
tier and junior mining companies. Nick also holds a number of
charitable appointments and is a highly regarded speaker on
leadership. He was awarded the Order of Australia in 1992 for
services to rugby union, having captained the Australian rugby
team to World Cup success in 1991.
Dr Frank Bierlein PhD, FAIG, MSED, MSGA
Non-Executive Director (Appointed 20 October 2022)
Frank is a geologist with 30 years of experience as a consultant,
researcher and lecturer and industry professional. Additionally,
he is an experienced public company director.
Frank has held exploration and generative geology management
positions with QMSD Mining Co Ltd, Qatar Mining, Afmeco
Australia and Aveva NC, and consulted for among others,
Newmont Gold, Resolute Mining, Goldfields International,
Freeport McMoRan, and the International Atomic Energy Agency.
He was a non-executive director of Gold Australia Pty Ltd from
2015 to 2019 and chaired the Advisory Board of a Luxembourg
based private equity fund between 2014 and 2022. He is currently
a Non-executive Director on the Boards of Blackstone Minerals
Limited and Impact Minerals Limited.
Frank has worked on six continents spanning multiple
commodities and over the course of his career has published and
co-authored more than 130 articles in peer reviewed scientific
journals.
Frank obtained a PhD (Geology) from the University of Melbourne,
is a Fellow of the Australian Institute of Geoscientists (AIG) and
a member of both the Society of Economic Geologists (SEG) and
the Society of Geology Applied to Mineral Deposits.
Mark Pitts BBus, FCA, GAICD
Company Secretary (Appointed 2 March 2018)
Mark is a Fellow of Chartered Accountants Australia and New
Zealand and a graduate member of the Australian Institute of
Company Directors. He has more than 30 years’ experience in
statutory reporting and business administration.
Mark has been directly involved with and consulted to a number
of public companies holding senior financial management
positions. He is a Principal in the Company Secretarial and CFO
advisory divisions of the Automic Group providing secretarial
support and corporate and compliance advice, pursuant to a
contract with the Company. He has no fixed term with the option
of termination by either party with two months’ written notice.
Mr Pitts is not entitled to any termination payments other than
for services rendered at time of termination.
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
29
f Directorships of other listed companies
Directorships of other ASX listed companies held by Directors in the 3 years
immediately before the end of the financial year are as follows:
Directors
Company
Mr Tony Wehby
Ensurance Ltd (3 May 2018 – 17 November 2023)
Kingston Resources Ltd (4 July 2016 – Current)
Mr Stewart Dickson
None
Mr Nicholas Farr-Jones
None
Mr Frank Bierlein
Impact Minerals Ltd (13 October 2021 – Current)
PNX Metals Ltd (18 June 2021 – April 2023)
Blackstone Minerals Ltd (12 November 2021 – Current)
Firetail Resources Ltd (10 November 2022 – September 2023)
Directors’ Report
30
VARISCAN MINES ANNUAL REPORT 2024
f Directors’ interests in shares and options
As at the date of this report, the interests of the Directors in the shares,
options and performance rights of Variscan Mines Limited were:
Number of securities held directly and indirectly
Director
Ordinary shares
Options
Performance Rights
Mr Tony Wehby
1,164,461
1,500,000
-
Mr Stewart Dickson
13,824,450
3,000,000
-
Mr Nicholas Farr-Jones
1,523,955
1,500,000
-
Mr Frank Bierlein
388,411
1,500,000
-
f Principal activities
The principal continuing activity of the Group is the exploration for
economic metal and mineral deposits.
f Results
The net result of operations of the Group after applicable income tax was a
loss of $650,271 (2023: $886,240).
f Dividends
No dividends were paid or proposed during the year.
f Review of operations
Group Overview.
During the financial year, the Group’s operations have been focused on the exploration of its wholly owned Zinc projects in Spain.
Board & Management Changes.
During the year, there have been no board or management changes.
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
31
f Risk Management
The Company takes a proactive approach to risk management.
The Board is responsible for ensuring that risks, including emerging risks, and also opportunities, are identified on a timely basis
and the Company’s objectives and activities are aligned with the risks and opportunities identified by the Board. Given the size of the
Company and its stage of development all Board members are involved and have responsibility for management of risk.
f Material business risks
There are inherent risks associated with the exploration for minerals.
The Group faces the usual risks encountered by companies engaged in the exploration, evaluation and development of minerals. The
material business risks for the Group include:
External Risks
Environmental risks
The Company’s operations and projects are subject to the laws and regulations of the jurisdictions in which it has interests and carries
on business (Spain and Chile) regarding environmental compliance and relevant hazards. There is also a risk that the environmental
laws and regulations may become more onerous, making the Group’s operations more expensive which may adversely affect the
financial position and /or performance of the Group. The Directors are not aware of any Breaches of environmental law by the Company.
Government regulations and tenement risks
Changes in laws and regulations or government policies may adversely affect the Group’s operations. There is no guarantee that
current or future exploration claim applications or existing tenancy renewals will be granted, that they will be granted without undue
delay, or that the Company can economically comply with any conditions imposed on any granted exploration tenements. Loss of
tenements may adversely affect the financial position and /or performance of the Group.
Operating Risks
Exploration and development risk
The exploration for and development of mineral deposits involves significant risks that even a combination of careful evaluation,
experience and knowledge may not eliminate. While the discovery of an ore body may result in substantial rewards, not all exploration
activity will lead to the discovery of economic deposits. Major expenditure may be required to locate and establish Ore Reserves, to
establish rights to mine, to receive all necessary operating permits, to develop metallurgical processes and to construct mining and
processing facilities at a particular site.
In addition to the risks described above, the Group’s ability to successfully develop projects is contingent on the Group’s ability to fund
those projects through debt or equity raisings.
f Significant changes in the state of affairs
The Directors are not aware of any significant changes in the state of affairs
of the Group occurring during the financial period, other than as disclosed in
this report.
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
32
f Significant events after the reporting date
On 22 July 2024 the Company announced the issue of 49,000,000 fully paid
ordinary shares at an issue price of $0.006, raising $294,000, to further
progress the Novales-Udias Zinc project.
This share placement includes a free-attaching option on the basis of 1 option for every 2 shares subscribed, subject to shareholder
approval. The options are exercisable at $0.01 each, with an expiry period of 2 years from the date of issue.
On 13 August 2024 the Company announced the signing of an exclusive Marketing Agreement with Square Trading Singapore Pte
Ltd, for the exclusive marketing rights to all zinc concentrate from the Novales-Udias and Guajaraz projects in Spain. The term of the
agreement will end 5 years from the date of the first invoice issued to a customer relating to the delivery of zinc concentrate products.
On 23 August 2024 the Company announced the issue of 15,000,000 fully paid ordinary shares at an issue price of $0.006, raising
$90,000, as an addition to the placement announced on 22 July 2024. This placement to the Company’s largest shareholder, Zinc
GroupCo Pty Ltd also includes the free-attaching options on the basis of 1 option for every 2 shares subscribed, subject to shareholder
approval. The options are exercisable at $0.01 each, with an expiry period of 2 years from the date of issue.
On 20 September 2024 the Company announced that Mr. Nicholas Farr-Jones had also provided the Group with a working capital loan
of $32,000 on the same basis as Messrs Wehby and Dickson, as detailed in Notes 10 and 16.
On 26 September 2024 the Company announced a fully underwritten 2 for 3 renounceable entitlement issue to raise approximately
$2.067 million before costs of the offer.
Other than noted above, there were, at the date of this report, no matters or circumstances which have arisen since 30 June 2024
that have significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state
of affairs of the Group, in future financial years.
f Indemnification and insurance of directors and officers
The Company has not, during or since the end of the financial period, in
respect of any person who is or has been an officer of the Company or a
related body corporate, indemnified or made any relevant agreement for
indemnifying against a liability incurred as an officer, including costs and
expenses in successfully defending legal proceedings.
The Company maintains adequate Directors and Officers insurance coverage.
f Insurance premiums
During the financial period the Company has paid premiums to insure each of
the directors and officers against liabilities for costs and expenses incurred
by them in defending any legal proceedings arising out of their conduct
while acting in the capacity of director or officer of the Company, other than
conduct involving a wilful breach of duty in relation to the Company.
The premiums paid are not disclosed as such disclosure is prohibited under the terms of the contract.
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
33
Directors’ Report
f Likely developments and expected results
As the Group’s mineral projects are at an early stage of exploration, it is not
appropriate to speculate on likely future developments or results.
f Shares under option or issued on exercise of options
Details of unissued shares or interests under option for Variscan Mines
Limited as at the date of this report are:
Exercise Price of Option
Expiry Date of Options
Class of Share received
upon exercise
Number of Shares under
option
$0.12
30 September 2024
ORD
2,500,000
$0.045
30 November 2024
ORD
4,000,000
$0.055
30 November 2024
ORD
4,000,000
$0.065
30 November 2024
ORD
4,000,000
$0.0275
15 March 2025
ORD
51,388,890
65,388,890
The holders of these options and performance rights do not have the right, by virtue of the option or performance rights, to
participate in any share issue of the Company or of any other body corporate or registered scheme.
Refer to the Remuneration Report and Notes 11 & 12 to the financial statements for further details of the options and rights
outstanding.
During the period, no options were issued or exercised, and 16,500,000 options lapsed. From 1 July 2024 to the date of this report,
no options have been issued, exercised, cancelled or have lapsed.
During the period, no performance rights were issued or cancelled, and 2,500,000 performance rights were exercised. From 1 July
2024 to the date of this report, no performance rights have been issued, exercised, cancelled or have lapsed.
f Remuneration report (audited)
This remuneration report for the year ended 30 June 2024 outlines
the remuneration arrangements of the Group in accordance with the
requirements of the Corporations Act 2001 (the Act) and its regulations.
This information has been audited as required by section 308(3C) of the Act. The remuneration report details the remuneration
arrangements for key management personnel (KMP) who are defined as those persons having authority and responsibility for planning,
directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether
executive or otherwise) of the parent company.
VARISCAN MINES ANNUAL REPORT 2024
34
Directors’ Report
f Details of key management personnel
Details of KMP of the Group are set out below:
Directors
Mr Anthony Wehby
Non-Executive Chairman
Stewart Dickson
Managing Director & CEO
Nicholas Farr-Jones
Non-Executive Director
Dr Frank Bierlein
Non-Executive Director
Mark Pitts
Company Secretary
f Remuneration philosophy
The objective of the Company’s remuneration framework is to ensure reward
for performance is competitive and appropriate for the results delivered.
The framework aligns executive reward with achievement of strategic objectives and the creation of value for shareholders. The Board
believes that executive remuneration satisfies the following key criteria:
▯
Competitiveness and reasonableness;
▯
Acceptability to shareholders;
▯
Performance linkage/alignment of executive
compensation;
▯
Transparency; and
▯
Capital management.
These criteria result in a framework which can be used to provide a mix of fixed and variable remuneration, and a blend of short- and
long-term incentives in line with the Company’s limited financial resources.
Fees and payments to the Company’s Non-Executive Directors and Senior Executives reflect the demands which are made on, and
the responsibilities of, the Directors and the senior management. Such fees and payments are reviewed annually by the Board. The
Company’s Executive and Non-Executive Directors, Senior Executives and Officers are entitled to receive options under the Company’s
Employee Share Option Plan (“ESOP”), subject to Shareholder approval.
VARISCAN MINES ANNUAL REPORT 2024
35
f Non-Executive Directors remuneration arrangements
Directors are entitled to remuneration out of the funds of the Company, but
the remuneration of the Non-Executive Directors (NED) may not exceed in any
year the amount fixed by the Company in general meeting for that purpose.
The aggregate remuneration of the NEDs has been fixed at a maximum of $250,000 per annum to be apportioned among the NEDs
in such a manner as the Board determines. Directors are also entitled to be paid reasonable travelling, accommodation and other
expenses incurred in consequence of their attendance at Board meetings and otherwise in the execution of their duties as Directors.
The Chairman’s fee is set at $50,000 p.a. and NED fees at $36,000 p.a. which are consistent with industry average fees. At present,
no Committee fees are paid to Directors.
f Use of remuneration consultants
No remuneration consultants were engaged during the years ended 30 June
2023 or 30 June 2024.
f Profit and Share Price Performance
In considering remuneration the Board has had regard to the following data
in respect of the current and previous four financial years:
2024
2023
2022
2021
2020
Loss per share (cents)
(0.18)
(0.31)
(0.31)
(0.32)
(0.76)
Net loss ($)
(650,271)
(886,240)
(827,051)
(684,613)
(1,125,142)
Share Price at 30 June
$0.005
$0.012
$0.025
$0.075
$0.016
f Service agreements
Remuneration and other terms of engagement for key management personnel
are formalised in contractor agreements.
Details of these arrangements are set out below:
Managing Director – Stewart Dickson
▯
Contract term: No fixed term. Either party may terminate the letter of employment with six months’ notice.
▯
Remuneration: £132,500 p.a. plus VAT as applicable (2023: £132,500 p.a. plus VAT as applicable) as at 30 June 2024.
▯
Termination payments: Nil.
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
36
Directors’ Report
f Directors and KMP remuneration for the year ended 30 June 2024
Short-term benefits
Long-term
benefits
Post-
employment
Share-based payments
(a)
Salary &
fees
Consulting
fees
Other short-
term benefits
Long service
leave
Superannuation
Options
Performance
rights
Total
Performance
based
$
$
$
$
$
$
$
$
$
Directors
A Wehby
50,000
-
-
-
-
-
-
50,000
-
S Dickson
-
274,110
-
-
-
-
-
274,110
-
N Farr-Jones
36,000
-
-
-
-
-
-
36,000
-
F Bierlein
36,000
-
-
-
-
-
-
36,000
-
Sub-total
122,000
274,110
-
-
-
-
-
396,110
-
Other KMP
M Pitts
63,875
-
-
-
-
-
-
63,875
-
Sub-total
63,875
-
-
-
-
-
-
63,875
-
Total Remuneration
185,875
274,110
-
-
-
-
-
459,985
-
VARISCAN MINES ANNUAL REPORT 2024
37
Directors’ Report
f Directors and KMP remuneration for the year ended 30 June 2023
Details of the nature and amount of each major element of the remuneration of each director of the Company and other key management personnel of the Group are:
Short Term
Long-term
benefits
Post-
employment
Share-based payments
(a)
Salary &
fees
Consulting
fees
Other short-
term benefits
Long service
leave
Superannuation
Options
Performance
rights
Total
Performance
based
$
$
$
$
$
$
$
$
$
Directors
A Wehby (b)
33,252
-
-
-
-
10,600
-
43,852
-
S Dickson
-
257,076
-
-
-
21,200
7,296
285,572
2.6%
N Farr-Jones
36,000
-
-
-
-
10,600
-
46,600
-
F Bierlein (b)
25,085
-
-
-
-
10,600
-
35,685
-
F K Foo (c)
20,788
-
-
-
-
-
-
20,788
-
M Moore (d)
27,000
-
-
-
-
10,600
-
37,600
-
Sub-total
142,125
257,076
-
-
-
63,600
7,296
470,097
1.6%
Other KMP
M Pitts
60,000
-
-
-
-
10,600
-
70,600
-
Sub-total
60,000
-
-
-
-
10,600
-
70,600
-
Total Remuneration
202,125
257,076
-
-
-
74,200
7,296
540,697
1.3%
(a)
Includes a portion of options and rights issued during previous years, which continue to vest in accordance with their vesting conditions.
(b)
Appointed 20 October 2022
(c)
Resigned 30 November 2022
(d)
Resigned 31 March 2023
VARISCAN MINES ANNUAL REPORT 2024
38
f Share holdings and transactions of Key Management Personnel
Balance at 1 July 2023 /
upon appointment
Shares issued on exercise
of options / performance
rights
Shares granted in lieu of
fees
Net change other
Balance at 30 June 2024 /
upon resignation
A Wehby
837,260
-
327,201
-
1,164,461
S Dickson
9,737,192
2,500,000
1,587,258
-
13,824,450
N Farr-Jones
1,288,371
-
235,584
-
1,523,955
F Bierlein
152,827
-
235,584
-
388,411
M Pitts
-
-
-
-
-
f Option holdings and transactions of Key Management Personnel
Balance at 1 July 2023 /
upon appointment
Granted as remuneration
Lapsed/Expired
Balance at 30 June 2024 /
upon resignation
Vested and exercisable at
30 June 2024
A Wehby
1,500,000
-
-
1,500,000
1,500,000
S Dickson
7,500,000
-
(4,500,000)
3,000,000
3,000,000
N Farr-Jones
2,250,000
-
(750,000)
1,500,000
1,500,000
F Bierlein
1,500,000
-
-
1,500,000
1,500,000
M Pitts
4,500,000
-
(3,000,000)
1,500,000
1,500,000
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
39
f Performance Rights holdings of Key Management Personnel
Balance at 1 July
2023 / upon
appointment
Granted as
remuneration
Exercised
Balance at 30
June 2024 / upon
resignation
Vested and
exercisable at 30
June 2024
A Wehby
-
-
-
-
-
S Dickson
2,500,000
-
(2,500,000)
-
-
N Farr-Jones
-
-
-
-
-
F Bierlein
-
-
-
-
-
M Pitts
-
-
-
-
-
f Compensation options and performance rights granted during the year
Options and Rights granted during the year
No Options or Rights were granted during the year.
Options and Rights granted during the previous year
12,000,000 unquoted options were granted as compensation during the previous period to directors and key management personnel,
the details of which are as follows:
Options - Tranche 7
Options – Tranche 8
Options – Tranche 9
Number of securities granted
4,000,000
4,000,000
4,000,000
Grant date
30 November 2022
30 November 2022
30 November 2022
Expiration date
30 November 2024
30 November 2024
30 November 2024
Exercise price
$0.045
$0.055
$0.065
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
40
The fair value of the options issued as compensation as set out above was determined by reference to the Black-Scholes option
pricing model, the key inputs into which and resulting valuation are summarised as follows:
Options - Tranche 7
Options - Tranche 8
Options – Tranche 9
Underlying security spot price
on date of grant
$0.022
$0.022
$0.022
Exercise price
$0.045
$0.055
$0.065
Grant date
30 November 2022
30 November 2022
30 November 2022
Expiration date
30 November 2024
30 November 2024
30 November 2024
Total life (years)
2
2
2
Expected volatility
100%
100%
100%
Risk-free rate
3.11%
3.11%
3.11%
Expected dividend yield
-
-
-
Value per security
$0.008
$0.007
$0.0062
Number of securities
4,000,000
4,000,000
4,000,000
Remaining life (years)
0.42
0.42
0.42
Total value
$32,000
$28,000
$24,800
Options and Rights lapsed during the year
8,250,000 unquoted options held by Key Management Personnel exercisable at various prices expired unexercised on 30
November 2023.
Options and Rights lapsed during the prior year
500,000 unquoted options held by Key Management Personnel exercisable at $1.00 each expired unexercised on 20 November 2022.
Options and Rights exercised during the year
A total of 2,500,000 performance rights were exercised during the year and, as a result, 2,500,000 new ordinary shares were issued.
Options and Rights exercised during the prior year
No Options or Rights were exercised during the prior year.
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
41
f Transactions with directors and key management personnel
During the current year, amounts totalling $48,000 were paid to Endeavour
Corporate Pty Ltd, a Company Associated with Mr Mark Pitts, for accounting
and administration services (2023: $48,000).
These amounts are separate from the fees paid to Mr Pitts through his role as Company Secretary and are not included in the Key
Management Personnel remuneration table on page 10. At 30 June 2024, a total of $4,000 (exclusive of GST) was payable to Endeavour
Corporate (2023: $8,000).
At the end of the financial year, Messrs Wehby and Dickson provided the Company with working capital loans totalling $50,000 each
($100,000 total). These loans mature on 31 July 2025 and contain a mechanism by which the loans may be converted to shares upon
receipt of approval by the Company’s shareholders. If the loans are not converted, they are subject to an interest rate of 1% per month.
f Directors’ Benefits, Emoluments and Share Options
During its annual budget review, the Board reviews the Directors’
Emoluments.
Remuneration levels, including participation in the Company’s ESOP, are set to provide reasonable compensation in line with the
Company’s limited financial resources. During the year no Director of the Company has received or become entitled to receive any
additional benefits to their ordinary directors’ fees by reason of a contract made by the Company or a related corporation with the
Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.
Due to the difficulty in the measurement of performance using quantitative indicators in the mineral exploration industry, there is no
formal link between financial performance of the group and remuneration levels.
There is no retirement scheme for Non-Executive Directors.
End of Audited Remuneration report.
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
42
f Meetings of directors
The following table sets out the number of Directors’ meetings held during
the financial year and the number of meetings attended by each Director
for which they were entitled to attend.
Due to the size and composition of the board, the roles of the Audit and Risk and Remuneration Committees are fulfilled by the board
as a whole.
Director
Number of Meetings Held
whilst a director
Number Attended
Mr Anthony Wehby
6
6
Mr Stewart Dickson
6
6
Mr Nicholas Farr-Jones
6
5
Dr Frank Bierlein
6
6
Total Number of Meetings Held
6
Non-audit services
The Company’s auditor did not provide any non-audit services during the year ended 30 June 2024 (2023: Nil).
Signed this 27th day of September 2024 in accordance with a resolution of the Directors.
Stewart Dickson
Managing Director
Directors’ Report
VARISCAN MINES ANNUAL REPORT 2024
43
Auditor’s Independence Declaration
Auditor’s Independence Declaration
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Variscan Mines 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:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
27 September 2024
D B Healy
Partner
VARISCAN MINES ANNUAL REPORT 2024
44
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
f For the year ended 30 June 2024
Consolidated
Notes
2024
$
2023
$
Continuing operations
Interest income
3
9,464
9,530
Other income
3
1,073
-
Total income
10,537
9,530
Compliance expenses
(50,154)
(62,630)
Professional services expenses
(264,574)
(270,550)
Finance expenses
(171)
(31)
Directors’ expenses
(259,055)
(271,323)
Travel and accommodation expenses
(10,230)
-
Share based payments
12,13
-
(108,744)
Exploration expenses
-
(21,432)
Capitalised exploration expenditure written-off
9
-
(78,726)
Other expenses
(75,966)
(89,638)
Total expenses
(660,150)
(903,074)
Realised gain/(loss) on foreign exchange
(2,136)
8,217
Unrealised gain/(loss) on foreign exchange
1,478
(913)
Total foreign exchange loss
(658)
7,304
Loss before income tax expense
(650,271)
(886,240)
Income tax expense
4
-
-
Loss for the year
(650,271)
(886,240)
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
(54,233)
63,543
Other comprehensive (loss) / income for the year, net of tax
(54,233)
63,543
Total comprehensive loss for the year
(704,504)
(822,697)
Basic and diluted loss per share (cents per share)
14
(0.18)
(0.31)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income
should be read in conjunction with the accompanying notes
VARISCAN MINES ANNUAL REPORT 2024
45
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
f As at 30 June 2024
Consolidated
Notes
2024
$
2023
$
Assets
Current assets
Cash and cash equivalents
6
250,260
1,017,571
Trade and other receivables
7
122,784
375,680
Total current assets
373,044
1,393,251
Non-current assets
Plant and equipment
8
61,765
71,158
Deferred exploration and evaluation expenditure
9
9,331,873
8,097,650
Other non-current assets
66,737
67,798
Total non-current assets
9,460,375
8,236,606
Total assets
9,833,419
9,629,857
Liabilities
Current liabilities
Trade and other payables
10
509,617
254,179
Total current liabilities
509,617
254,179
Total liabilities
509,617
254,179
Net assets
9,323,802
9,375,678
Equity
Issued capital
11
36,066,871
35,344,243
Reserves
13
302,259
875,774
Accumulated losses
(27,045,328)
(26,844,339)
Total equity
9,323,802
9,375,678
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
VARISCAN MINES ANNUAL REPORT 2024
46
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
f For the year ended 30 June 2024
Consolidated
Notes
2024
$
2023
$
Cash flows from operating activities
Payments to suppliers and employees
(637,981)
(574,826)
Exploration and evaluation expenditure
-
(21,432)
Interest received
9,464
9,530
Finance costs
(171)
(31)
Net VAT refunds received from Spanish authorities
269,739
-
Net cash outflow from operating activities
20
(358,949)
(586,759)
Cash flows from investing activities
Exploration and evaluation expenditure
(1,114,159)
(1,598,957)
Payments for property, plant and equipment
-
(11,353)
Net cash outflow from investing activities
(1,114,159)
(1,610,310)
Cash flows from financing activities
Proceeds from issue of shares
595,000
1,255,000
Share funds received in advance
84,000
-
Working capital loans from Directors
10
100,000
-
Payments for share issue costs
(72,000)
-
Net cash inflow / (outflow) from financing activities
707,000
1,255,000
Net decrease in cash and cash equivalents
(766,108)
(942,069)
Cash and cash equivalents at the beginning of the year
1,017,571
1,945,935
Effect of exchange rate fluctuations on cash held
(1,203)
13,705
Cash and cash equivalents at the end of the year
6
250,260
1,017,571
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
VARISCAN MINES ANNUAL REPORT 2024
47
Consolidated Statement of Changes in Equity
f For the year ended 30 June 2024
Consolidated
Issued
capital
Share-based
payment
reserve
Foreign
currency
translation
reserve
Accumulated
losses
Total
1 July 2022
34,018,303
636,838
85,649
(25,977,099)
8,763,691
Loss for the year
-
-
-
(886,240)
(886,240)
Other comprehensive income, for
the year, net of income tax
-
-
63,543
-
63,543
Total comprehensive income /
(loss) for the year
-
-
63,543
(886,240)
(822,697)
Issue of share capital for cash
1,255,000
-
-
-
1,255,000
Issue of share capital in lieu of fees
70,940
70,940
Share based payments
-
108,744
-
-
108,744
Lapse of options
-
(19,000)
-
19,000
-
30 June 2023
35,344,243
726,582
149,192
(26,844,339)
9,375,678
1 July 2023
35,344,243
726,582
149,192
(26,844,339)
9,375,678
Loss for the year
-
-
-
(650,271)
(650,271)
Other comprehensive loss for the
year, net of income tax
-
-
(54,233)
-
(54,233)
Total comprehensive loss for the
year
-
-
(54,233)
(650,271)
(704,504)
Issue of share capital for cash
595,000
-
-
-
595,000
Share capital funds received in
advance
84,000
-
-
-
84,000
Issue of share capital in lieu of fees
45,628
-
-
-
45,628
Exercise of performance rights
70,000
(70,000)
-
-
-
Lapse of options
-
(449,282)
-
449,282
-
Share issue costs
(72,000)
-
-
-
(72,000)
30 June 2024
36,066,871
207,300
94,959
(27,045,328)
9,323,802
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
Consolidated Statement of Changes in Equity
VARISCAN MINES ANNUAL REPORT 2024
48
Notes to the Financial Statements
f 1. Corporate information
The financial report of Variscan Mines Limited (Variscan or the Company) for the year ended 30 June 2024 was authorised for issue
in accordance with a resolution of the Directors on 27 September 2024. Variscan is a for-profit entity for the purposes of preparing
the financial statements.
Variscan Mines Limited (the parent) is a company limited by shares incorporated and domiciled in Australia whose shares are publicly
traded on the Australian Securities Exchange under ASX Code VAR.
The consolidated financial statements comprise the financial statements of Variscan Mines Limited and its subsidiaries (the Group
or Consolidated Entity).
The nature of the operations and principal activities of the Group are described in the Directors’ Report.
f 2. Summary of significant accounting policies
Basis of preparation.
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board. It has been prepared on a historical cost basis except for investments in listed shares, which are measured at fair
value.
Statement of compliance.
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board (IASB).
Accounting standards issued but not yet effective.
Australian Accounting Standards and interpretations that have been issued or amended but are not yet effective have been assessed has
having no material impact on the Group’s financial statements and have not been adopted by the Group for the year ended 30 June 2024.
Adoption of new and revised standards.
Standards and Interpretations applicable to 30 June 2024
In the year ended 30 June 2024, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the
AASB that are relevant to the Company and effective for the current reporting period beginning on or after 1 July 2023. As a result of
this review, the Group has determined there is no material impact of the new and revised standards on the results for the financial
year, and no changes required to Group Accounting Policies.
Basis of consolidation.
The consolidated financial statements comprise the financial statements of Variscan Mines Limited (Variscan or the Company) and
its subsidiaries as at 30 June each year. The financial statements of subsidiaries are prepared for the same reporting period as the
parent company, using consistent accounting policies.
All intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have
been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the
date on which control is transferred out of the Group. At this date, any retained interest in the entity is remeasured to its fair value with
the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently
accounting for the retained interest as an associate.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
49
Going Concern.
The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities and the
realisation of assets and the settlement of liabilities in the ordinary course of business. The Directors believe that the Group will have
sufficient working capital to meet its minimum project development and administrative expenses in the next twelve months following
the date of signing of the financial report.
For the year ended 30 June 2024, the Group has incurred a loss before tax of $650,271 and net cash outflows from operating and investing
activities of $1,473,108. As at 30 June 2024 the Group had $250,260 in cash and cash equivalents and a deficiency of net current assets
of $136,573.
Subsequent to the end of the financial year the Company has issued 64,000,000 shares at $0.006 per share, raising $384,000.
Additionally, on 26 September 2024 the Company announced a fully underwritten 2 for 3 renounceable entitlement issue to raise
approximately $2.067 million before costs of the offer. The offer is expected to close on 23 October 2024.
Whilst not immediately required, the Group may need to raise additional funds to meet its planned and budgeted exploration expenditure
as well as regular corporate overheads.
The Group’s capacity to raise additional funds will be impacted by the success of the ongoing exploration activities and market
conditions. Additional sources of funding available to the Group include a capital raising via preferential issues to existing shareholders
or placements to new and existing investors. If necessary, the Group can delay exploration expenditure and the directors can also
institute cost saving measures to further reduce corporate and administrative costs.
However, should the above planned activities to raise or conserve capital not be successful, there exists a material uncertainty which
may cast significant doubt surrounding the Group’s ability to continue as a going concern and, therefore, realise its assets and dispose
of its liabilities in the ordinary course of business and at the amounts stated in the financial report.
Exploration and evaluation.
Exploration and evaluation
Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest. Such
expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but does not include general
overheads or administrative expenditure not having a specific connection with a particular area of interest. Exploration and evaluation
costs in relation to separate areas of interest for which rights of tenure are current are brought to account in the year in which they
are incurred and carried forward provided that:
▯
Such costs are expected to be recouped through successful development and exploitation of the area, or alternatively
through its sale; and
▯
Exploration and/or evaluation activities in the area have not yet reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves.
Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the area of
interest is aggregated within costs of development.
Exploration and evaluation – impairment
The Group assesses at each reporting date whether there is an indication that an asset has been impaired and for exploration and
evaluation costs whether the above carry forward criteria are met.
Accumulated costs in respect of areas of interest are written off or a provision made in the profit or loss when the above criteria do
not apply or when the Directors assess that the carrying value may exceed the recoverable amount. The costs of productive areas are
amortised over the life of the area of interest to which such costs relate on the production output basis.
Provisions are made where farm-in partners are sought and there is a possibility that carried-forward expenditures may have to be
written off in the future if a farm-in partner is not found. In the event that farm-in agreements are reached or the Group undertakes
further exploration in its own right on those properties, the provisions would be reviewed and if appropriate, written back.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
50
Financial assets and liabilities.
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or
when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
The Group makes use of a simplified approach for expected credit losses and records the loss allowance as lifetime expected credit
losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life
of the financial instrument.
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated
a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and
financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss
(other than derivative financial instruments that are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included
within finance costs or finance income.
Plant and equipment.
Plant and equipment assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset, namely motor vehicles and plant and
equipment – depreciated over 2 to 5 years (2023: 2 to 5 years).
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the
carrying value may not be recoverable.
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its
use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the item) is included in the profit or loss in the period the item is derecognised.
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.
Share-based payment transactions.
In addition to salaries, the Group provides benefits to certain employees (including Directors) of the Group in the form of share-based
payment transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled transactions”).
There is currently an Employee Share Option Plan in place to provide these benefits.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are
granted. The fair value of the options is determined by using the Black-Scholes or binomial option pricing model, or in the case of listed
options, the listed option price at the date the options were issued.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
51
Notes to the Financial Statements
In valuing transactions settled by way of issue of options, no account is taken of any vesting limits or hurdles, or the fact that the
options are not transferable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
vesting conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting
period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to
which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in
the determination of fair value at grant date. The profit or loss charge or credit for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market
condition.
If the terms of an equity-settled award are modified, at a minimum an expense is recognised as if the terms had not been modified. In
addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement,
or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any expense not yet recognised
is recognised immediately. However, if a new award is substituted for the cancelled award and designated a replacement award on
the date it is granted, the cancelled and the new award are treated as if there was a modification of the original award, as described
in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share
except where such dilution would serve to reduce a loss per share.
Income tax.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted
by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
Except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures,
except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused
tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,
and the carry-forward of unused tax assets and unused tax losses can be utilised:
Except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss.
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures,
deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable
future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the profit or loss.
VARISCAN MINES ANNUAL REPORT 2024
52
Currency.
Functional currency translation
The functional and presentation currency for the parent company is Australian dollars ($). The functional currency of overseas
subsidiaries is the local currency.
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date
of the translation. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange at the
reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at
the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
Impairment of assets.
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists,
or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s
recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s
value in use cannot be estimated to be close to its fair value.
In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount
of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is
written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to
continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset
is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses
may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised
impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since
the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. The
increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss
been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount,
in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future
periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
Contributed equity.
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.
Significant accounting judgements, estimates and assumptions.
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events.
The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain
assets and liabilities within the next annual reporting period are:
Share-based payment transactions
The Company measures the cost of equity-settled share-based payments at fair value at the grant date using the Black-Scholes
formula taking into account the terms and conditions upon which the instruments were granted and estimates of volatility.
Capitalisation and write-off of capitalised exploration costs
The determination of when to capitalise and write-off exploration expenditure requires the exercise of judgement based on
assessments of results, various assumptions, and other factors such as historical experience, current and expected economic
conditions. Refer to Note 9 for further details.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
53
Earnings/Loss per share.
Basic earnings/loss per share is calculated as net profit/loss attributable to members of the Group, adjusted to exclude any costs of
servicing equity divided by the weighted average number of ordinary shares.
Diluted earnings/loss per share is calculated as net profit/loss attributable to members of the Group, adjusted for:
▯
Costs of servicing equity.
▯
The after-tax effect of dividends and interest
associated with dilutive potential ordinary shares that
have been recognised as expenses.
▯
Other non-discretionary changes in revenues or
expenses during the period that would result from the
dilution of potential ordinary shares.
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
Segment reporting.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments,
has been identified as the Managing Director.
f 3. Income
Consolidated
2024
$
2023
$
Income
Interest income
9,464
9,530
Other income
1,073
-
10,537
9,530
f 4. Income tax
Consolidated
2024
$
2023
$
Prima facie income tax (credit) on operating (loss) at 30% (2023: 30%)
(195,081)
(265,872)
Non-deductible expenses / (Non-assessable income)
-
2,191
Deferred tax assets not recognised
195,081
263,681
Income tax expense
-
-
Deferred tax assets have not been recognised in respected to the following items
Unrecognised deferred tax assets
Accrued expenses and provisions
104,784
63,151
Capital raising costs
6,600
8,250
Income tax losses
5,140,265
5,098,539
5,251,649
5,169,940
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
54
Consolidated
2024
$
2023
$
Unrecognised deferred tax liabilities
Temporary timing differences related to:
Exploration and evaluation expenditure
(2,799,562)
(2,429,295)
Net deferred tax asset not recognised
2,452,087
2,740,645
No provision for income tax is considered necessary in respect of the Company for the period ended 30 June 2024.
No recognition has been given to any deferred income tax asset which may arise from available tax losses. The Company has estimated
its losses at 30 June 2024 of $17,134,217 (2023: $16,995,129).
No recognition has been given to any deferred income tax liabilities which may arise from the recognition of capitalised exploration
and evaluation expenditures, as the Company has sufficient expected carried-forward tax losses to negate such a liability.
A benefit of 30% (2023: 30%) of approximately $5,140,265 (2023: $5,073,573) associated with the tax losses carried forward will only
be obtained if:
▯
The Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the losses to be realised;
▯
The Company continues to comply with the conditions for deductibility imposed by the law; and
▯
No changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses.
Tax consolidation.
Variscan Mines Limited and its 100% owned Australian subsidiaries formed a tax consolidated group with effect from 1 November 2007.
Variscan Mines Limited is the head entity of the tax consolidated group. No amounts have been recognised in the financial statements
in respect of this agreement on the basis that the possibility of default is remote.
Franking credits.
Franking credits of $2,810,116 (2023: $2,810,116) are available for subsequent years.
The above amounts represent the balance of the franking account as at the end of the reporting period, adjusted for:
▯
Franking credits that will arise from the payment of the amount of the provision for income tax,
▯
Franking debits that will arise from the payment of dividends recognised as a liability at the reporting date, and
▯
Franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of subsidiaries
were paid as dividends.
f 5. Auditors’ remuneration
Consolidated
2024
$
2023
$
Amounts received or due and receivable by:
HLB Mann Judd (WA) Partnership, for:
39,656
36,750
Audit and review of the financial report of Variscan Mines Limited (a)
39,656
36,750
(a)
Includes accruals at balance date.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
55
Notes to the Financial Statements
f 6. Cash and cash equivalents
Consolidated
2024
$
2023
$
Cash at bank and in hand
250,260
1,017,571
250,260
1,017,571
Cash at bank earns interest at floating rates based on daily bank deposit rates. The carrying amount of cash and cash equivalents
represents fair value.
Short-term deposits are made for varying periods of between one day and six months, depending on the immediate cash requirements
of the Group, and earn interest at the respective short-term deposit rates.
f 7. Receivables
Consolidated
2024
$
2023
$
Current
Other Debtors
1,269
-
GST/VAT receivable
102,611
356,170
Prepayments
18,904
19,510
122,784
375,680
Receivables are non-interest bearing and generally 30-day terms and trading terms are being followed by debtors and there are no
overdue amounts. An allowance for expected credit losses is recognised when there is objective evidence that it is impaired. No
allowance for expected credit losses is required.
VARISCAN MINES ANNUAL REPORT 2024
56
f 8. Plant & equipment
Consolidated
2024
$
2023
$
Plant and equipment – at cost
82,274
82,991
Accumulated depreciation
(20,509)
(11,833)
Net book value
61,765
71,158
Reconciliation of plant and equipment is as follows:
Opening carrying value
71,158
67,351
Additions
-
11,353
Depreciation
(9,957)
(7,546)
Impact of foreign exchange
564
-
61,765
71,158
Depreciation expenses related to the plant and equipment utilised solely in the exploration and evaluation activities of the Group is
capitalised to deferred exploration and evaluation expenditure. Refer Note 9.
f 9. Deferred exploration and evaluation expenditure
Consolidated
2024
$
2023
$
Exploration and evaluation phase:
Costs brought forward
8,097,650
6,710,006
Costs incurred during the year
1,272,166
1,231,286
Depreciation capitalised (refer Note 8)
9,957
7,546
Written-off during the year (a)
-
(78,726)
Impact of foreign currency exchange differences
(47,900)
227,538
Costs carried forward
9,331,873
8,097,650
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
57
Notes to the Financial Statements
Consolidated
2024
$
2023
$
Exploration expenditure costs carried forward are made up of:
Novales/Udias Zinc Project - Spain
8,608,577
7,396,914
Guajaraz Zinc Project – Spain
723,296
700,736
Costs carried forward
9,331,873
8,097,650
(a)
During the previous financial year, as a result of the Group’s continued focus on its Spanish assets, the amount
capitalised to the Rosario Copper Project in Chile was written off.
The above amounts represent costs of areas of interest carried forward as an asset in accordance with the accounting policy set out in
Note 2. The ultimate recoupment of deferred exploration and evaluation expenditure in respect of an area of interest carried forward
is dependent upon the discovery of commercially viable reserves and the successful development and exploitation of the respective
areas or alternatively sale of the underlying areas of interest for at least their carrying value. Amortisation, in respect of the relevant
area of interest, is not charged until a mining operation has commenced.
f 10. Current liabilities – payables
Consolidated
2024
$
2023
$
Trade creditors (a)
127,152
164,845
Trade creditors
282,466
89,334
Loans from Directors (b)
100,000
-
509,617
254,179
Reconciliation of short-term director loans:
Opening value
-
-
Accrued expenses
100,000
-
Closing value
100,000
-
(a)
Trade creditors are non-interest bearing and are generally settled on 30-day terms.
(b)
In June 2024, the Group was provided with short-term working capital loans from directors Mr Anthony Wehby
and Mr Stewart Dickson. The loans may be convertible to ordinary shares, subject to shareholder approval, at
a conversion price of $0.006 per share. Should shareholder approval not be obtained, the loans are repayable
before 31 July 2025 and will attract an interest rate of 1% per month.
VARISCAN MINES ANNUAL REPORT 2024
58
f 11. Contributed equity
Consolidated
2024
$
2023
$
Share capital
379,000,368 (2023: 338,003,630) ordinary shares fully paid
37,964.668
37,170,040
Share issue costs
(1,897,797)
(1,825,797)
35,982,871
35,344,243
Terms and conditions of contributed equity.
Ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the
proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle
their holder to one vote, either in person or by proxy, at a meeting of the Company.
Options
Options do not carry voting rights or rights to dividends until options are exercised.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
59
Number
Value
$
Movements in ordinary shares on issue
At 1 July 2022
266,732,024
34,018,303
Shares issued for cash
66,666,667
1,200,000
Shares issued in lieu of share issue costs
1,527,778
27,500
Shares issued in lieu of directors fees (a)
3,077,161
70,940
Subscription funds for unissued shares (b)
-
55,000
Share issue costs
-
(27,500)
At 30 June 2023
338,003,630
35,344,243
Shares issued for cash
33,055,555
595,000
Shares issued for funds received in prior year (b)
3,055,556
-
Shares issued in lieu of directors fees (a)
2,385,627
45,628
Conversion of performance rights
2,500,000
70,000
Share funds received in advance (c)
-
84,000
Share issue costs
-
(72,000)
At 30 June 2024
379,000,368
35,982,871
(a)
Shares issued in lieu of directors fees were valued by reference to the Company’s shares as quoted on the ASX
for the month to which the liability related.
(b)
In June 2024, the Company received $55,000 relating to the second tranche of the share placement conducted
during the year. The shares relating to these funds were issued on 21 August 2024.
(c)
On 28 June 2024 the Company received $84,000 relating to the share placement completed on 22 July 2024.
The Company has 65,888,890 unquoted options on issue at balance date. Refer Note 12 for details.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
60
f 12. Share-based payments and unquoted options
Option pricing model and terms of options.
TThe Company has 14,500,000 unquoted options currently on issue as a result of share-based payment
arrangements, as well as 51,388,890 unquoted options issued as free-attaching options to placements.
No options were issued during the current financial year as share-based payments to directors and other key
management personnel (2023: 12,000,000 options issued to directors and other key management personnel).
The options issued during the previous financial year were valued by reference to the Black-Scholes option pricing model.
The following table lists the inputs into this model and the terms of options
granted in the Company during the previous financial year:
Options - Tranche
7
Options - Tranche
8
Options – Tranche
9
Options – Broker
Options
Underlying security spot
price on date of grant
$0.022
$0.022
$0.022
$0.075
Exercise price
$0.045
$0.055
$0.065
$0.12
Grant date
30 November 2022
30 November 2022
30 November 2022
28 June 2021
Expiration date
30 November 2024
30 November 2024
30 November 2024
30 September 2024
Total life (years)
2
2
2
3.25
Expected volatility
100%
100%
100%
125%
Risk-free rate
3.11%
3.11%
3.11%
0.20%
Expected dividend yield
-
-
-
-
Value per security
$0.008
$0.007
$0.0062
$0.049
Number of securities
4,000,000
4,000,000
4,000,000
2,500,000
Portion vested at balance
date
100%
100%
100%
100%
Remaining life (years)
0.42
0.42
0.42
0.25
Total value
$32,000
$28,000
$24,800
$125,000
Types of share-based payment plans.
Share-based payments
An Employee Share Option Plan (ESOP) has been established where selected officers, employees and consultants of
the Company can be issued with options over ordinary shares in Variscan Mines Limited. The options, issued for nil
consideration, will be issued in accordance with a performance review by the Directors. The options cannot be transferred
and will not be quoted on the ASX. Options expire if not exercised 90 days after a participant resigns from the Company.
There have been no cancellations or modifications to any of the plans during 2024 and 2023. No securities have been
issued under the ESOP during the financial year ended 30 June 2024 (2023: Nil).
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
61
Summary of movement of unquoted options on issue in the parent entity.
Number
Value
$
Movements in unquoted options on issue
At 1 July 2022
19,500,000
574,135
Issue of options to Directors and Key Management Personnel
12,000,000
84,800
Lapse of options
(500,000)
(19,000)
Expense recognised for further vesting during the year
-
16,647
Issue of options as free-attaching to placement
15,277,779
-
At 30 June 2023
46,277,779
656,582
Expiry of options
(16,500,000)
(449,282)
Issue of options as free-attaching to placement
36,111,111
-
At 30 June 2024
65,888,890
207,300
The outstanding balance as at 30 June 2024 is represented by:
Exercise Price of Option
Expiry Date of Options
Class of Share received
upon exercise
Number of Shares under
option
$0.12
30 September 2024
ORD
2,500,000
$0.045
30 November 2024
ORD
4,000,000
$0.055
30 November 2024
ORD
4,000,000
$0.065
30 November 2024
ORD
4,000,000
$0.0275
15 March 2025
ORD
51,388,890
65,888,890
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
62
Weighted Average disclosures for unquoted options granted by the parent entity.
2024
$
2023
$
Weighted average exercise price of options at 1 July
$0.057
$0.106
Weighted average exercise price of options granted during period
$0.0275
$0.04
Weighted average exercise price of options expired during period
$0.076
$1.00
Weighted average exercise price of options outstanding at 30 June
$0.036
$0.057
Weighted average exercise price of options exercisable at 30 June
$0.036
$0.057
Weighted average contractual life remaining (years)
0.637
1.15
Range of exercise price
$0.0275 - $0.12
$0.0275 - $0.12
Summary of movement of performance rights on issue in the parent entity.
Number
Value
$
Movements in performance rights on issue
At 1 July 2022
2,500,000
62,704
Expense recognised for further vesting during the year
-
7,296
At 30 June 2023
2,500,000
70,000
Performance rights exercised
(2,500,000)
(70,000)
At 30 June 2024
-
-
Performance rights issued as share-based payments.
During a previous financial year, the shareholders of the Company approved the issue of 2,500,000 performance rights to the
Company’s Managing Director and CEO, Stewart Dickson. The fair value of these performance rights was determined by reference
to the underlying share price on the date of grant, being $0.028 per security. These performance rights were exercised during the
current financial year. Details of the performance rights exercised during the financial year are as follows:
Performance Condition
Expiry Date of
Rights
Fair value per
security
Number of Rights
Continuous service until 30 November 2021
30 November 2023
$0.028
1,250,000
Continuous service until 30 November 2022
30 November 2023
$0.028
1,250,000
2,500,000
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
63
Notes to the Financial Statements
f 13. Reserves
Consolidated
2024
$
2023
$
Share-based compensation reserve
207,300
726,582
Foreign currency translation reserve
94,959
149,192
302,259
875,774
Share-based compensation reserve (a)
Balance at the beginning of financial year
726,582
636,838
Share-based payments
-
108,744
Lapse of options
(449,282)
(19,000)
Exercise of performance rights
(70,000)
-
Balance at end of financial year
207,300
726,582
Foreign currency translation reserve (b)
Balance at the beginning of financial year
149,192
85,649
Effect of exchange rate fluctuation
(54,233)
63,543
Balance at end of financial year
94,959
149,192
(a)
Share-based compensation reserve
The share-based compensation reserve is used to recognise the fair value of unlisted options and performance
rights issued but not exercised as described in Note 2 and referred to in Note 12.
(b)
Foreign currency translation reserve
The foreign currency translation reserve recognised the net exchange differences on foreign operations.
VARISCAN MINES ANNUAL REPORT 2024
64
f 14. Earnings/(Loss) per share
Consolidated
2024
$
2023
$
Earnings/(loss) used in calculating basic and
diluted earnings/(loss) per share
(650,271)
(886,240)
Consolidated
2024
Number
2023
Number
Weighted average number of ordinary shares outstanding during
the year used in calculation of basic and diluted EPS
364,624,334
286,866,914
Consolidated
2024
Cents per share
2023
Cents per share
Basic and diluted earnings/(loss) per share
(0.16)
(0.31)
All potential ordinary shares for the calculation of diluted loss per share are considered anti-dilutive.
f 15. Key management personnel
Key management personnel (KMP) remuneration.
Consolidated
2024
$
2023
$
Compensation for key management personnel
Short-term employee benefits
459,985
459,201
Share-based payments
-
81,496
Total compensation
459,985
540,697
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
65
Notes to the Financial Statements
f 16. Related party disclosures
Subsidiaries
The consolidated financial statements include the financial statements of Variscan Mines Limited (the Parent Entity) and the following
subsidiaries:
% Equity interest
$ Investment
Name
Country of
incorporation
2024
2023
2024
2023
Bluestone 23 Pty Ltd
Australia
100
100
5,000
5,000
Variscan Mines Europe Limited
UK
100
100
1
1
Slipstream Resources Spain Pty Ltd
Australia
100
100
2,403,748
2,403,748
Slipstream Resources Spain 2 Pty Ltd
Australia
100
100
686,531
686,531
Variscan Mines Cantabria, SL
Spain
100
100
4,439
4,439
Variscan Mines La Mancha, SL
Spain
100
100
4,500
4,500
Transactions with key management personnel
During the current year, amounts totalling $48,000 were paid to Endeavour Corporate Pty Ltd, a Company Associated with Mr
Mark Pitts, for accounting and administration services (2023: $48,000). These amounts are separate from the fees paid to Mr Pitts
through his role as Company Secretary and are not included in the Key Management Personnel remuneration table on page 10 of the
remuneration report. At 30 June 2024, a total of $4,000 (exclusive of GST) was payable to Endeavour Corporate Pty Ltd (2023: $8,000).
At the end of the financial year, Messrs Wehby and Dickson provided the Company with working capital loans totalling $50,000 each
($100,000 total). These loans mature on 31 July 2025 and contain a mechanism by which the loans may be converted to shares upon
receipt of approval by the Company’s shareholders. If the loans are not converted, they are subject to an interest rate of 1% per
month. Refer Note 10.
f 17. Farm-in / Farm-out arrangements
The Company is a party to a number of exploration farm-in / farm-out agreements to explore for copper, gold, zinc, lead and
uranium. Under the terms of the agreements the Company may be required to contribute towards the exploration and other
costs if it wishes to maintain or increase its percentage holdings. These arrangements are not separate legal entities. There are
contractual arrangements between the participants for sharing costs and future revenues in the event of exploration success.
There are no assets and liabilities attributable to Variscan at reporting date resulting from these arrangements. Percentage equity
interests in these arrangements at 30 June 2024 were as follows:
Consolidated
2024
% Interest
2023
% Interest
Hillston – diluting to 16%
39.2%
39.2%
Callabonna – diluting to 30%
49%
49%
VARISCAN MINES ANNUAL REPORT 2024
66
f 18. Segment information
AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components of the
Group that are regularly reviewed by the Chief Operating Decision Maker in order to allocate resources to the segment and to assess
its performance.
The Group’s operating segments have been determined with reference to the monthly management accounts used by the Chief
Operating Decision maker to make decisions regarding the Group’s operations and allocation of working capital. Due to the size and
nature of the Group, the Managing Director has been determined as the Chief Operating Decision Maker.
Based on the quantitative thresholds included in AASB 8, there are currently two geographical segments, being Australia and Spain,
which are considered for management purposes to form part of the single reportable segment of mineral exploration.
Segment information
The following tables present revenue and profit information and certain asset and liability information regarding geographical
segments for the years ended 30 June 2024 and 2023.
Australia
Spain
Total
2024
$
2023
$
2024
$
2023
$
2024
$
2023
$
Segment income
9,464
9,530
1,073
-
10,537
9,530
Segment loss before income
tax expense
(651,344)
(865,314)
1,073
(20,926)
(650,271)
(886,240)
Segment assets
212,068
974,554
9,621,351
8,655,303
9,833,419
9,629,857
Segment liabilities
(456,041)
(206,655)
(53,576)
(47,524)
(509,617)
(254,179)
Non-current asset additions
-
-
1,282,123
1,238,832
1,282,123
1,238,832
f 19. Commitments
Exploration licence expenditure requirements.
In order to maintain the Group’s tenements in good standing with the various mines departments, the Group may be required to incur
exploration expenditure under the terms of each licence.
There are nil exploration licence commitments at year end (2023: nil).
Milestone consideration – Spanish Zinc Project Acquisition.
In accordance with the acquisition of the Spanish Zinc Projects, the Company must issue additional shares upon the satisfaction of
certain exploration milestones. These milestones are for the definition, in accordance with JORC 2012, of an Inferred Mineral Resource
(or greater) of:
▯
Milestone 1: 4 million tonnes at 7% Zn
▯
Milestone 2: 8 million tonnes at 7% Zn
Upon satisfaction of each of these milestones, the Company must issue 27,500,000 ordinary shares to the vendors of Slipstream Spain
Pty Ltd and Slipstream Spain 2 Pty Ltd, and 2,426,471 shares to Hispanibal S.L. as the vendor of the “Hispanibal Option”, for a total of
59,852,941 Ordinary Shares if both milestones are met.
As at the date of this report, the Directors are of the view that the work conducted on the projects to date is not of a sufficiently
advanced stage to determine the probability of meeting these milestones and therefore no current obligation has been recorded in
this financial report.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
67
f 20. Statement of Cash Flows
Consolidated
2024
$
2023
$
Reconciliation of net cash outflow from operating activities to
operating loss after income tax
Operating loss after income tax
(650,271)
(886,240)
Share-based payment expense
-
108,744
Capitalised exploration expenditure written off
-
78,726
Shares issued in lieu of fees
45,628
70,940
Foreign exchange variances
(53,594)
(8,217)
Net VAT refunds received from Spanish authorities
269,739
-
Change in assets and liabilities:
(Increase)/decrease in receivables
1,899
2,738
(Decrease)/increase in trade and other creditors
27,650
46,550
Net cash outflow from operating activities
(358,949)
(586,759)
For the purpose of the Statement of Cash Flows, cash includes cash on hand, at bank, deposits and bank bills used as part of the
cash management function. The Group does not have any unused credit facilities.
Consolidated
2024
$
2023
$
The balance at 30 June comprised:
Cash and cash equivalents
250,260
1,017,571
250,260
1,017,571
f 21. Financial risk management objectives and policies
The Company’s Board considers the Company’s overall risk management framework and policies, including quarterly review by the
Board of the Company’s financial position and financial forecasts and maintaining adequate insurances.
AASB 7 requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments,
including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
68
Capital management.
The Group considers its capital to comprise its ordinary share capital and its retained earnings, net of accumulated losses.
In managing its capital, the Group’s primary objective as an explorer is to maintain a sufficient funding base to enable the Group to meet
its working capital and strategic investment needs. The Group has no debt at the year-end hence has a nil gearing ratio.
In making decisions to adjust its capital structure to achieve these aims, either through altering its new share issues, or consideration
of debt, the Group considers not only its short-term position but also its long-term operational and strategic objectives.
Financial instrument risk exposure and management.
As is common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. These main
risks, arising from the group’s financial instruments are interest rate risk, liquidity risk, share market risk and credit risk. This note
describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes
for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.
General objectives, policies and processes.
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and has the
responsibility for designing and operating processes that ensure the effective implementation of the objectives and policies to the
Group’s finance function. The Board receives quarterly reports through which it reviews the effectiveness of the processes put in
place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s
competitiveness and flexibility. Further details regarding these policies are set out below:
Liquidity risk.
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter difficulty in meeting
its financial obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve
this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 45 days.
The Board receives cash flow projections on a monthly basis as well as information regarding cash balances. At balance date, these
projections indicated that the Group expected to have sufficient liquid resources to meet its obligations under all reasonably expected
circumstances.
The expected settlement of the Group’s financial liabilities is as follows:
Carrying
amount
Contracted
cash flows
< 6 months
6-12 months
1-2 years
2-5 years
30 June 2024
Trade and other payables
509,617
509,617
509,617
-
-
-
509,617
509,617
509,617
-
-
-
30 June 2023
Trade and other payables
254,179
254,179
254,179
-
-
-
254,179
254,179
254,179
-
-
-
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
69
Interest rate risk.
At reporting date, the Group is exposed to floating weighted average interest rates at 30 June 2024 for financial assets as follows:
Consolidated
2024
2023
Weighted average rate of cash balances
1.18%
1.55%
Cash balances
$250,260
$1,017,571
All other financial assets and liabilities are non-interest bearing.
The Group’s exposure to interest rate risk is set out in the following tables:
Consolidated
Pre-tax Loss
lower / (higher)
Consolidated
Equity
lower / (higher)
2024
$
2023
$
2024
$
2023
$
+1% (100 basis points)
2,503
10,175
2,503
10,175
-1% (100 basis points)
(2,503)
(10,175)
(2,503)
(10,175)
The above table reflects the impact on the Group’s loss before income tax and equity from a movement in interest rates of 1%, or 100
basis points, for the current and comparative financial periods.
Share market risk.
The Company relies greatly on equity markets to raise capital for its exploration activities and is thus exposed to equity market volatility.
When market conditions require, for prudent capital management, in consultation with its professional advisers the Group looks to
alternative sources of funding, including the sale of assets and royalties.
Credit risk.
Credit risk arises principally from the Group’s cash, cash equivalents, receivables and tenement security deposits.
The Group’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to the carrying
amount of these instruments. The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested
nor is it the Group’s policy to securitise its trade and other receivables.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not
significant.
Foreign currency risk.
The Group is exposed to foreign currency risk on purchases that are denominated in a currency other than the Australian dollar. The
Group does not enter into derivative financial instruments to hedge such transactions denominated in a foreign currency. The Group
is primarily exposed to change in Euro/$ exchange rates for the year ended 30 June 2024, although this exposure and all other foreign
currency exposure during the current financial year has been assessed as immaterial.
Other receivables.
Other receivables comprise GST. Credit worthiness of debtors is undertaken when appropriate.
Equity price risk.
During the previous year, the Group disposed of its investments in equity interests in listed securities, and therefore, no equity price
risk exposure exists at 30 June 2024 (2023: Nil exposure).
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
70
Accounting policies.
Accounting policies in relation to financial assets and liabilities and share capital are contained in Note 2.
Fair value of financial assets and liabilities.
The fair value of all monetary financial assets and financial liabilities of the Group approximate their carrying value.
There are no off-balance sheet financial asset and liabilities at year-end.
All financial assets and liabilities were denominated in Australian dollars during the years ended 30 June 2024 and 2023.
Fair value risk
The group uses three different methods in estimating the fair value of a financial investment. The methods comprise -
▯
Level 1 – the fair value is calculated using quoted prices in active markets; and
▯
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (as prices) or indirectly (derived from prices)
▯
Level 3 – the fair value is estimated using inputs other than quoted prices.
Quoted market price represents the fair value determined based on quoted prices on active markets as at the reporting date without
any deduction for transaction costs.
The fair value of derivatives that do not have an active market are based on valuation techniques. Level 2 derivatives include market
observable inputs whilst level 3 derivatives do not include market observable inputs.
Transfer between categories
There were no transfers between levels during the year.
f 22. Parent entity information
Consolidated
Information relating to the parent entity Variscan Mines Limited:
2024
2023
Current assets
193,157
974,547
Total assets
9,485,005
9,582,334
Current liabilities
533,279
206,654
Total liabilities
533,279
206,654
Net Assets
8,951,726
9,375,680
Issued capital
36,066,871
35,344,243
Accumulated losses
(27,322,445)
(26,695,145)
Reserves
207,300
726,582
Total shareholders’ equity
8,951,726
9,375,680
(Loss) of the parent entity
(627,300)
(556,225)
Other comprehensive income
-
-
Total comprehensive (loss) of the parent entity
(627,300)
(556,225)
The accounting policies of the Parent Entity are consistent with those of the Group as disclosed in Note 2, except for Investments
in Subsidiaries, which are accounted for at cost less accumulated impairment losses.
The Parent Entity has no commitments or contingencies.
Notes to the Financial Statements
VARISCAN MINES ANNUAL REPORT 2024
71
f 23. Events after the reporting date
On 22 July 2024 the Company announced the issue of 49,000,000 fully paid ordinary shares at an issue price of $0.006, raising
$294,000, to further progress the Novales-Udias Zinc project. This share placement includes a free-attaching option on the basis
of 1 option for every 2 shares subscribed, subject to shareholder approval. The options are exercisable at $0.01 each, with an expiry
period of 2 years from the date of issue.
On 13 August 2024 the Company announced the signing of an exclusive Marketing Agreement with Square Trading Singapore Pte
Ltd, for the exclusive marketing rights to all zinc concentrate from the Novales-Udias and Guajaraz projects in Spain. The term of the
agreement will end 5 years from the date of the first invoice issued to a customer relating to the delivery of zinc concentrate products.
On 23 August 2024 the Company announced the issue of 15,000,000 fully paid ordinary shares at an issue price of $0.006, raising
$90,000, as an addition to the placement announced on 22 July 2024. This placement to the Company’s largest shareholder, Zinc
GroupCo Pty Ltd also includes the free-attaching options on the basis of 1 option for every 2 shares subscribed, subject to shareholder
approval. The options are exercisable at $0.01 each, with an expiry period of 2 years from the date of issue.
On 20 September 2024 the Company announced that Mr. Nicholas Farr-Jones had also provided the Group with a working capital loan
of $32,000 on the same basis as Messrs Wehby and Dickson, as detailed in Notes 10 and 16.
On 26 September 2024 the Company announced a fully underwritten 2 for 3 renounceable entitlement issue to raise approximately
$2.067 million before costs of the offer.
Other than noted above, there were, at the date of this report, no matters or circumstances which have arisen since 30 June 2024
that have significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state
of affairs of the Group, in future financial years.
Notes to the Financial Statements
72
VARISCAN MINES ANNUAL REPORT 2024
Consolidated Entity
Disclosure Statement
Body Corporates
Tax Residency
Entity Name
Entity Type
Place of
Incorporation
% Share
Capital Held
Australian
or Foreign
Foreign
Jurisdiction
Variscan Mines Limited
Body Corporate
Australia
100%
Australian
N/A
Bluestone 23 Pty Ltd
Body Corporate
Australia
100%
Australian
N/A
Variscan Mines Europe
Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Slipstream Resources
Spain Pty Ltd
Body Corporate
Australia
100%
Australian
N/A
Slipstream Resources
Spain 2 Pty Ltd
Body Corporate
Australia
100%
Australian
N/A
Variscan Mines
Cantabria, SL
Body Corporate
Spain
100%
Foreign
Spain
Variscan Mines La
Mancha, SL
Body Corporate
Spain
100%
Foreign
Spain
All Australian entities are part of the Variscan Mines Limited tax consolidated group.
Variscan Mines Europe Limited is currently a dormant entity.
None of the abovementioned entities acts as a trustee of a trust within the Consolidated Entity, nor is a partner in partnership with
the Consolidated Entity, nor is a participant in a joint venture within the Consolidated Entity.
Consolidated Entity Disclosure Statement
VARISCAN MINES ANNUAL REPORT 2024
73
Directors’
Declaration
1.
In the directors’ opinion:
(a) the financial statements and notes set out on pages 45 to 72 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving 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; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
2.
The notes to the financial statements include a statement of compliance with International Financial Reporting Standards.
3.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer for the year ended
30 June 2024 required by section 295A of the Corporations Act 2001.
4.
4. The Consolidated Entity Disclosure Statement as set out on page 73 is true and correct.
This declaration is made in accordance with a resolution of the directors.
Stewart Dickson
Managing Director
27 September 2024
Directors’ Declartion
VARISCAN MINES ANNUAL REPORT 2024
74
VARISCAN MINES ANNUAL REPORT 2024
75
Independent Auditor’s Report
Independent Auditor’s Report
INDEPENDENT AUDITOR’S REPORT
To the Members of Variscan Mines Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Variscan Mines Limited (“the Company”) and its controlled entities
(“the Group”), which comprises the consolidated statement of financial position as at 30 June 2024, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, notes to the financial
statements, including 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:
(a) 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
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 in the financial report, which indicates that a material uncertainty exists that
may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
VARISCAN MINES ANNUAL REPORT 2024
76
Independent Auditor’s Report
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter
How our audit addressed the key audit
matter
Exploration and evaluation assets
Refer to Note 9
In accordance with AASB 6 Exploration for and Evaluation
of Mineral Resources, the Group capitalises all exploration
and evaluation expenditure, including acquisition costs
and subsequently applies the cost model after recognition.
Our audit focused on the Group’s assessment of the
carrying amount of the capitalised exploration and
evaluation asset, as this is one of the most significant
assets of the Group.
We planned our work to address the audit risk that the
capitalised expenditure may no longer meet the
recognition criteria of the standard. In addition, we
considered it necessary to assess whether facts and
circumstances existed which suggest that the carrying
amount of an exploration and evaluation asset may
exceed its recoverable amount.
Our procedures included but were not limited
to the following:
• We obtained an understanding of the key
processes associated with management’s
review of the carrying values of each area
of interest;
• We
considered
management’s
assessment of potential indicators of
impairment;
• We obtained evidence that the Group has
current rights to tenure of its areas of
interest;
• We examined the exploration budget for
the year ending 30 June 2025 and
discussed with management the nature of
planned ongoing activities;
• We verified a sample of exploration
expenditure capitalised; and
• We examined the disclosures made in the
financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2024, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report, or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
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
VARISCAN MINES ANNUAL REPORT 2024
77
Independent Auditor’s Report
(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:
(a) 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
(b) the consolidated entity disclosure statement that is true and correct and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
−
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
−
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
−
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
−
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
−
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation
VARISCAN MINES ANNUAL REPORT 2024
78
Independent Auditor’s Report
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the Directors’ Report for the year ended 30 June
2024.
In our opinion, the Remuneration Report of Variscan Mines 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.
HLB Mann Judd
D B Healy
Chartered Accountants
Partner
Perth, Western Australia
27 September 2024
VARISCAN MINES ANNUAL REPORT 2024
79
Schedule of Tenements
f Listing of tenements held as at 18 October 2024
Tenement
Tenement No.
Interest
Joint Venture Details
SPAIN
Cantabria
Buenahora Fraction 1
IP 16.662-01
100%
Buenahora Fraction 2
IP 16.662-02
100%
San José
EC 94
100%
La Torra
EC 512
100%
Tres Amigos
EC 1565
100%
Torpeza
EC 2557
100%
Andrea
EC5220
100%
Andrea-demasía a
EC5374
100%
Es
EC8049
100%
Dudosa
EC8165
100%
Cargadoiro
EC11589
100%
Tres amigos-demasía a
EC11594
100%
Flor del pueblo
EC12942
100%
Torpeza-demasía a
EC12952
100%
Torpeza-3ª demasía a
EC13079
100%
Torpeza-2ª demasía a
EC13080
100%
Flor del pueblo-demasía a
EC13154
100%
Dudosa-demasía a
EC13170
100%
Andrea-3ª demasía a
EC13175
100%
Andrea-2ª demasía a
EC13176
100%
Cargadoiro-demasía a
EC13260
100%
Ampliación a Matilde
EC13641
100%
Aumentada
EC14238
100%
Campitos
EC14554
100%
Campitos-demasía a
EC14640
100%
Carmenchu
EC14945
100%
Amelita
EC14949
100%
Eloísa
EC14947
100%
ASX Additional Information
VARISCAN MINES ANNUAL REPORT 2024
80
Tenement
Tenement No.
Interest
Joint Venture Details
Ampliación a Matilde-demasía a
EC14948
100%
Cargadoiro 2
EC14954
100%
Amelita-demasía a
EC14979
100%
Carmenchu-demasía a
EC14980
100%
Eloísa-demasía a
EC14981
100%
Carmenchu-2ª demasía a
EC14982
100%
6º Aumento a porvenir
EC15672
100%
Ampliación a Matilde-demasía a
EC13641-10
100%
Campitos-segunda demasía a
EC14554-20
100%
Cargadoiro 2- demasía a
EC14954-10
100%
Carmenchu-tercera demasía a
EC14980-30
100%
6º Aumento a porvenir-demasía a
EC15672-10
100%
Torpeza-tercera demasía a
EC2557-30
100%
Esperanza
IP 16674
100%
Estela
IP 16672
100%
Elena
IP 16673
100%
Candela
IP 16676
100%
Valeria
IP 16675
100%
Toledo
Guajaraz
IP 4.203
100%
Tenement
Tenement No.
Interest
Joint Venture Details
CHILE
Rosario
Rosario 6 1-40
0310259624
10.4%
Note 4
Rosario 7 1-60
0310259632
10.4%
Note 4
Rosario 101
03102N2229
10.4%
Note 4
Salvadora
0310231355
10.4%
Note 4
Abandonara
0310248487
10.4%
Note 4
ASX Additional Information
VARISCAN MINES ANNUAL REPORT 2024
81
Tenement
Tenement No.
Interest
Joint Venture Details
NEW SOUTH WALES
Willyama
EL 8075
0%
Note 1
Hillston
EL 6363
39.2%
Perilya can earn 80%,
Eaglehawk 9.8%
Native Dog
EL 8236
0%
Note 1
Woodlawn South
ELs 7257
and 7469
0%
Royalty interest only
Tenement
Tenement No.
Interest
Joint Venture Details
SOUTH AUSTRALIA
Junction Dam
EL 5682
0%
Marmota acquired 100%
ownership. See Note 2
Callabonna
EL 5360
49%
Red Metal 51%, can earn 70%
Tenement
Tenement No.
Interest
Joint Venture Details
FRANCE – Note 4
St Pierre
PER
100%
Beaulieu
PER
100%
EL
= Exploration Licence
PER
= Permis Exclusif de Recherche (France)
IP
= Investigation Permit (Spain)
EC
= Exploration Concession (Spain)
Note 1:
On 1 July 2019 the Company announced it had successfully renegotiated the terms of the existing Option Agreement to
provide the Company with a participating interest of 10.4%. The Company can earn up to 90% of the project through payment
of amounts totaling approximately US$2.25 milllion.
Note 2: Under an agreement with Silver City Minerals Limited, Broken Hill Operations and Eaglehawk Geological Consulting Pty Ltd
Variscan has converted its interest in parts of these tenements to a NSR (Net Smelter Return).
Note 3: Marmota has earned 100% of the uranium rights only in EL 5682. Variscan has a 0.5% net profits royalty on production from
a uranium mine.
Note 4: The remaining exploration licences owned by Variscan Mines SAS (excluding the Couflens PER) have been conditionally
acquired by a new wholly owned subsidiary, Variscan Mines Europe Limited. Pursuant to the approval for the Subsidiary
Sale, the Ministry of Economy and Finance has imposed, without prior consultation, the compulsory relinquishment of the
remaining licences. The Company has approved the relinquishment request and has yet to receive a response. The timetable
for the completion of the relinquishment process is unknown.
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f Details of Joint Ventures
Callabonna EL 5360, SA
Variscan 49%. Red Metal has earned a 51% interest by spending $1 million and can earn a 70% interest by spending $3 million. Variscan
then can contribute with 30% or reduce to a 15% interest, carried to completion of a BFS and repayable from Variscan’s share of net
proceeds of mine production.
Hillston EL 6363, NSW
Variscan 39.2% and Eaglehawk 9.8%, Perilya 51%. Perilya can earn an 80% interest in this tenement by completing expenditure of
$1.5 million. Variscan and Eaglehawk can then each participate with their respective interests of 16% and 4% or convert to a 10% and
2.5% free-carried interest to completion of a BFS. On completion of a BFS, Variscan and Eaglehawk can participate or convert their
interests to a NSR royalty.
Woodlawn South ELs 7257 and 7469, NSW
Variscan holds an NSR royalty interest in both these tenements.
Willyama and Native Dog, ELs 8075 and 8236 NSW
Under various agreements with Silver City Minerals Limited, Variscan holds an NSR royalty interest in each of these tenements.
f Governance Framework
The Board of Variscan Mines Limited (Variscan) has responsibility for corporate governance for the Company and its subsidiaries (the
Group) and has implemented policies, procedures and systems of control with the intent of providing a strong framework and practical
means for ensuring good governance outcomes which meet the expectations of all stakeholders.
The Corporate Governance Statement, dated 30 June 2024, sets out corporate governance practices of the Group which, taken as a
whole, represents the system of governance.
The framework for corporate governance follows the 4th Edition of the ASX Corporate Governance Council’s Principles and Guidelines.
The Directors have implemented policies and practices which they believe will focus their attention and that of their Executives on
accountability, risk management and ethical conduct. The Board will continue to review its policies to ensure they reflect any changes
within the Group, or to accepted principles and good practice.
Where the Board considers the Group is not of sufficient size or complexity to warrant adoption of all the recommendations set out in
the ASX Corporate Governance Council’s published guidelines, these instances have been highlighted.
This Corporate Governance Statement together with governance policies and committee charters is available on our website at
https://www.variscan.com.au/index.php/corporate-information/corporate-governance.
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Shareholder Information
f Shareholder Information as at 18 October 2024
Ordinary fully paid shares
443,000,368 fully paid ordinary shares on issue.
Substantial shareholders
Shareholding
%
ZINC GROUPCO PTY LTD
100,000,000
22.573%
SLIPSTREAM RESOURCES INTERNATIONAL PTY LTD
43,891,667
9.908%
CITICORP NOMINEES PTY LIMITED
35,416,901
7.995%
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
26,828,750
6.056%
As at 18 October 2024, there were 1,145 shareholders with less than a marketable parcel of $500.
Top 20 shareholders of ordinary shares
Number
%
ZINC GROUPCO PTY LTD
85,444,444
19.288%
SLIPSTREAM RESOURCES INTERNATIONAL PTY LTD
43,891,667
9.908%
CITICORP NOMINEES PTY LIMITED
35,416,901
7.995%
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
26,828,750
6.056%
SPELT KENT PTY LTD
20,301,668
4.583%
ZINC GROUPCO PTY LTD
14,555,556
3.286%
FELDI LIMITED
13,824,450
3.121%
WAINIDIVA PTY LTD
11,666,667
2.634%
MRS LARA WEHBY
9,583,334
2.163%
BNP PARIBAS NOMS PTY LTD
8,449,762
1.907%
OFFELBAR PTY LTD
8,333,333
1.881%
HISPANIBAL SL
7,150,000
1.614%
LIGHTNING JACK PTY LTD
7,080,000
1.598%
POWERHOUSE VENTURES LIMITED
6,400,566
1.445%
MR PETER FABIAN HELLINGS & MRS JACQUELINE KIM GUN HELLINGS
5,000,000
1.129%
OPEKA DALE PTY LTD
5,000,000
1.129%
SPINERGY CAPITAL PTY LTD
5,000,000
1.129%
MR GEORGE DAVID BUTKERAITIS
4,852,842
1.095%
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Top 20 shareholders of ordinary shares
Number
%
ESM LIMITED
3,768,957
0.851%
MS JASMINE LOUISE HELLINGS
3,550,000
0.801%
Total Securities of Top 20 Holdings
326,098,897
73.611%
Total of Securities
443,000,368
Distribution of shareholders
Range
No of shareholders
Ordinary shares
%
1 – 1,000
730
147,944
0.030
1,001 – 5,000
174
435,724
0.100
5,001 – 10,000
60
473,339
0.110
10,001 – 100,000
245
10,155,527
2.290
100,001 – and over
207
431,787,834
97.470
1,416
443,000,368
100.000
Unquoted securities
The Company has the following unquoted securities on issue:
Description
Number
Number of
holders
Unquoted options, exercisable at $0.12 on or before 30 September 2024
2,500,000
1
Unquoted options, exercisable at $0.045 on or before 30 November 2024
4,000,000
7
Unquoted options, exercisable at $0.055 on or before 30 November 2024
4,000,000
7
Unquoted options, exercisable at $0.045 on or before 30 November 2024
4,000,000
7
Unquoted options, exercisable at $0.0275 on or before 15 March 2025
51,388,890
4
Voting rights
There are no restrictions on voting rights for ordinary shares. On a show of hands every member present or by proxy shall have one
vote and upon a poll each share shall have one vote. Where a member holds shares which are not fully paid, the number of votes to
which that member is entitled on a poll in respect of those part paid shares shall be that fraction of one vote which the amount paid
up bears to the total issued price thereof.
Option holders have no voting rights until the options are exercised.
There is no current on-market buy-back.
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www.variscan.com.au