Annual Report
Zenith Minerals Limited
ABN 96 119 397 938
for the Year Ended
30 June 2023
CONTENTS
CORPORATE INFORMATION ................................................................................... 3
CHAIRMAN’S REPORT .............................................................................................. 4
REVIEW OF OPERATIONS ........................................................................................ 6
DIRECTORS’ REPORT ............................................................................................ 18
AUDITOR’S INDEPENDENCE DECLARATION ................................................... 33
CONSOLIDATED FINANCIAL STATEMENTS ..................................................... 34
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME ............................................................................ 34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................. 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................. 36
CONSOLIDATED STATEMENT OF CASH FLOWS .......................................... 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ....................... 38
DIRECTORS’ DECLARATION ................................................................................ 71
INDEPENDENT AUDITOR’S REPORT .................................................................. 72
CORPORATE GOVERNANCE STATEMENT ...................................................... 77
ADDITIONAL SHAREHOLDERS INFORMATION ............................................... 78
INTERESTS IN MINING TENEMENTS .................................................................. 81
2
CORPORATE INFORMATION
Directors
David J E Ledger – Executive Chairman
Michael J Clifford - Director & CEO
Stanley A Macdonald - Non-Executive Director
Andrew P Bruton - Non-Executive Director
Geoffrey J Rogers – Non-Executive Director
Company Secretary
Nicholas Ong
Chief Financial Officer
Nicholas Bishop
Registered Office and Principal Place of Business
Level 2, 33 Ord Street
WEST PERTH WA 6005
PO Box 1426
WEST PERTH WA 6872
Telephone: +61 8 9226 1110
Email: info@zenithminerals.com.au
Website: www.zenithminerals.com.au
Auditors
PKF Perth
Level 4, 35 Havelock Street
WEST PERTH WA 6005
Telephone: +61 8 9426 8999
Facsimile: +61 8 9426 8900
Share Registry
Automic Group
Level 5, 126 Phillip Street
SYDNEY NSW 2000
Level 5, 191 St Georges Terrace
PERTH WA 6000
GPO Box 5193
SYDNEY NSW 2001
Telephone: 1300 288 664 (Within Australia)
+61 2 9698 5414 (Overseas)
Email: hello@automicgroup.com.au
Website: www.automicgroup.com.au/
Securities Exchange Listing
Australian Securities Exchange
Home Exchange: Perth, Western Australia
ASX Code: ZNC
3
CHAIRMAN’S REPORT
Dear Shareholders
2023 has turned out a lot differently than we forecast when writing the Chairman’s address at the same time
one year ago. We have seen extreme weakness across the junior end of the resource sector led by lower
commodity prices, concerns over a stalling Chinese economy and a market that saw institutional funds leave
junior miners (and stocks across the board) in staggering numbers. In fact, investment from funds managers in
the market that were invested in stocks under $750m market capitalisation fell from 25% of their asset allocation
to just 9%. Combine that with rising interest rates and the damage that did in the market amongst retail investors
in terms of confidence, and you were left with a very different backdrop to 2022.
All that said, we were also victims of circumstance. The confidence that we had placed in our joint ventures with
EV Metals on the lithium assets and the Earaheedy asset managed by Rumble Resources, both suffered from
different, but equally challenging, sets of conditions.
EV Metals - Lithium
Financially constrained due to commitments made elsewhere in the market, EV Metals has lacked sufficient
funding as a group which has had a knock-on effect with work they had committed to undertake at both Split
Rocks and Waratah Well throughout 2023. This has turned into a frustrating and concerning joint venture and
one that has seen activity stall during this past year.
There has been no significant field work completed at either Split Rocks or Waratah Well during the 2023
calendar year. Despite assurances that work on the assets would recommence once EV Metals had their funding
in place, the funding situation has remained unresolved. The lack of activity has been extremely painful to all
shareholders at a time when lithium stocks have been the one shining light in an otherwise disappointing market.
Your board has been in constant communication with EV Metals in efforts to get not only funding, but monies
owing, from them to continue with the joint venture in the spirit with which it was entered. We will continue to
work to resolve the issues until the new year when we will reassess their capability of assisting and advancing
these highly prospective tenements.
Earaheedy Zinc
During the year there was a lot of progress on the Earaheedy Project with Rumble Resources releasing their
maiden resource estimate on the 19th of April which highlighted a globally significant discovery of 94Mt @ 3.1%
Zinc and Lead and 4.1 grams per ton Silver for 2.2Mt Zinc, 0.7Mt Lead and 12.6 Moz of Silver. This made it one
of the largest zinc sulphide discoveries globally within Western Australia.
At the time of this release, Rumble was valued at a market capitalisation close to $120m. With a 25%
shareholding in the Earaheedy asset, the project was considered worth approximately $30m to Zenith.
Subsequent capital requirements have seen the Rumble share price fall to 12c which has in turn had a knock-
on impact to the value of this project for Zenith. Whilst there is no requirement to fund any element of the
exploration work until Rumble can deliver a Bankable Feasibility Study, the value of this project is unlikely to
increase dramatically until there is a Rumble price recovery, the zinc price can normalise at a higher level or
there is some corporate activity. Overall, the free-carry on this project provides shareholders with significant zinc
exposure, should zinc’s place in the new critical minerals economy take off.
The Develin Creek Sale
Discussions had been ongoing for some time regarding the sale of the Develin Creek copper project in
Queensland. At the end of the day there was realistically only one natural buyer of the project, QMines, due to
the proximity of their existing Mt Chalmers project to Develin Creek.
The sale negotiations were protracted but we were resolute in our resolve to obtain $4.5 million for the asset.
The cash ($2.5m) and scrip deal ($2m in QML paper with six-month escrow) provides your company with enough
runway to satisfy our needs and removes any immediate need to call on the market for additional funds.
4
Lithium Assets
We have not stood idle, during the period of EV Metals inactivity throughout 2023, and wanted to ensure we
have additional lithium project exposure. To that end, Zenith has continued the pursuit of lithium assets
throughout the year and has added to its projects portfolio. The Yilmia and Hayes Hill projects were notable
additions and broaden the scope of our footprint throughout Western Australia.
Initial work has been ongoing at these sites with heritage surveys completed in the last quarter of 2022 and
into 2023. We have not been idle on Split Rocks and Waratah Well either with nearly every corner of the
projects having seen soil sampling to identify drill ready lithium targets. You will have seen the interesting
geochemical signatures at the southern end of the Split Rocks land package, where we have identified an area
referred to as Cielo, which covers a 9km by 2km area that looks highly prospective for lithium pegmatites.
That being the largest, there are thirty more areas that have also been identified as compelling drill targets.
Our Focus
This year has seen us continue with the rationalisation of our asset base to focus on lithium. We have ceased
work on projects that we consider can add little value to the bigger picture. For instance, adding 1 ton of copper
to an asset does not achieve the same outcome as adding 1 ton of lithium. With lithium results we get more
upside per ton than we get in other metals and so we will continue to critically assess our portfolio and ensure
we are pushing the lithium assets forward.
Develin Creek was not the only asset we divested during the year. We made the decision that all work on non-
core projects was to cease in an effort to deploy our capital where it got better acknowledgement from the
market. Cowarra in New South Wales is one such example where we were earning into a gold project that has
strong potential but would be unlikely in the short term to realise value on the balance sheet or in the market.
We are not a diversified mining house. The days of having the luxury of a broad asset base covering every
commodity are not for us. We have finite resources that need to be focused on assets that can make a significant
difference to the Company and hence we will continue rationalising the asset base until we are recognised by
the market for being a specific metals player. We are focused on lithium.
Into 2024
We still have some challenges ahead of us. We will get resolution to the situation with the EV Metals joint
venture. The outstanding EV Metals matters is a daily focus for us all and at front of mind is unlocking the full
potential of our key lithium projects.
Our gold projects at Split Rocks and Red Mountain continue to have resources spent on them. We have
delivered on the commitment to identify the opportunities therein. They are not the core focus for your Company
but will be given every opportunity to have their full value recognised.
We have been through a tumultuous year. We have seen the resignation of two directors and seen the
appointment of two outstanding individuals, Andrew Bruton and Geoff Rogers who have brought greater diversity
and experience to the board. Their contribution is acknowledged here, as are all Board members.
To Mick Clifford, I am profoundly thankful. There was not one day in the past year that we did not engage in
conversation. We have been through some very challenging times. His commitment to finding resolution across
asset sales and dealing with those obstacles thrown in our path has been nothing short of outstanding.
We will continue on our path, and I thank the shareholders for their support and ongoing interest. We have some
very good days in front of us and we will ensure that we are in control of our destiny.
Mr David J E Ledger
Executive Chairman
28 September 2023
5
REVIEW OF OPERATIONS
Zenith Minerals Limited (ASX:ZNC) is an Australian-based minerals exploration company leveraged to the
increasing global demand for metals critical to the production processes of new energy industrial sectors. Zenith
is focused on minerals containing lithium and related metals required for rechargeable lithium -ion
batteries for electric vehicles and renewable energy storage (“Battery Minerals”) – Figure 1.
Figure 1: Zenith Lithium Project Locations
The Company currently has four lithium projects all located in Western Australia. Two projects, Split Rocks and
Waratah Well, are being explored under the terms of a joint venture between Zenith and EV Metals Group (EVM).
Split Rocks covers landholdings of approximately 660 km2 in the Forrestania greenstone belt immediately north
of the established Mt Holland lithium deposit. Waratah Well, located approximately 20km northwest of the regional
town of Yalgoo in the Murchison Region holds a lithium pegmatite with ongoing exploration required.
In January 2022, Zenith entered into a joint venture with EV Metals Group (EVM), a company with plans to develop
a Battery Chemicals Complex in Saudi Arabia. EVM has the right but not obligation to earn a 60% interest in the
lithium rights on two lithium projects, Split Rocks and Waratah Well, with Zenith retaining a 40% project share.
Under the terms of the agreement Zenith is fully funded by EVM through to a bankable feasibility on any project
development, such a study must be completed by January 2024.
Zenith has an additional two lithium projects. In January 2023, Zenith secured an option to acquire 100% of the
Hayes Hill lithium – nickel project, located in the Norseman – Widgiemooltha area of Western Australia. A further
project Yilmia, covers an 8 km long lithium prospective area in the Coolgardie district, some 13 km southeast of
the recent Kangaroo Hills lithium discovery by ASX:FBM. Zenith may earn up to a 100% interest in the lithium
rights at the Yilmia project.
In addition to its battery metal assets Zenith owns a portfolio of gold and base metal projects. It retains a 25% free
carried interest (to end bankable feasibility study) on the Earaheedy Zinc discovery, in Western Australia, with
Rumble Resources Limited (ASX:RTR) and two main gold projects – Red Mountain in Queensland and Split
Rocks in Western Australia.
6
BATTERY METALS
Split Rocks Lithium Project
The Split Rocks Project is located approximately
40km south of the regional town of Marvel Loch
in the Goldfields Region of Western Australia.
The project area lies immediately north of the Mt
Holland Lithium Project that is being developed
by Covalent Lithium (SQM and Wesfarmers) -
Figure 2.
A 100-hole drill program
(for 22,369m) was
completed during the year. Results confirmed and
the Rio
lithium mineralisation at
extended
Pegmatite (Figures 3 & 4).
A lithium mineralised zone (>0.1% Li2O) was
identified over >2900m by up to 1100m wide,
remaining open to the north and south with a higher-
grade (>0.3% Li2O) lithium zone >750m and up to
500m wide. Results reported (ASX Release 16-
Nov-22) included:
▪ 26m @ 1.2% Li2O incl. 13m @ 1.9% Li2O
(upper zone) and
Figure 2: Split Rocks Project
▪ 23m @ 0.8% Li2O incl. 8m @ 1.3% Li2O (lower zone).
▪ Diamond drilling also confirmed pegmatite continues or repeats (up to 100m in thickness) at depth below
many RC drill holes.
Figure 3: Rio Pegmatite – Map with Significant Lithium Drill Results
7
Figure 4: Rio Pegmatite – Long Section with
Significant Lithium Drill Results
Lithium pegmatite mineralisation identified to
date is a mixture of eucryptite with lesser
spodumene, petalite and lepidolite confirmed
including optical
by multiple methods
microscopy, SEM, Raman spectroscopy and
XRD analyses.
The amenability of eucryptite mineralisation to
conventional treatment processes has been
shown by positive sighter flotation testwork
and bench scale calcination-leach
tests,
hence confirming the potential of eucryptite as
a viable lithium target (ASX Release 26-Jul-
22).
Significant “blue-sky” potential exists within
the wider Split Rocks project area, in the
very large, untested lithium geochemical
soil anomaly “Cielo”, located 26km south
of the Rio Pegmatite and 18km northwest
of the Mt Holland Lithium Deposit (under
development by SQM-Wesfarmers), or in
30 other targets identified throughout the
project (announced post year end; see
ASX Release 10-Aug-23) – Figure 5.
Lithium mineralisation at Rio remains open to
the north, south, east and at depth. Permits
are now in place to enable infill and
extensional drilling of up to a further 50 RC /
diamond holes in the immediate Rio area.
Drilling is also planned to test the >30 lithium targets within the 660 km2 of the project.
Figure 5: Split Rocks Lithium Targets
8
Waratah Well Lithium Project
The Waratah Well Project is located approximately 20km northwest of the regional town of Yalgoo in the
Murchison Region of Western Australia.
An initial drilling program in early 2022 identified the presence of widespread lithium-bearing pegmatite
dykes over a 4km zone, open to the north and east under soil cover at Waratah Well (ASX Release 10-
Mar-22) – Figures 6 & 7).
Figure 6: Waratah Well Lithium Prospect Area - Lithium Drilling Results & Location of
Cross Section A-A’
Drilling this year has confirmed the presence of high-grade lithium below the depth of weathering (ASX
Release 24-Jan-23), including:
o
o
o
14m @ 1.0% Li2O, incl 8m @ 1.5%
Li2O.
10m @ 1.4% Li2O, incl 6m @ 2.0%
Li2O.
27m @ 0.8% Li2O (true width 10m),
incl 12m @ 1.2% Li2O (true width 6m).
Lithium mineralisation has been identified
by laboratory XRD analysis as containing
up to 84% petalite.
now
have
surveys
Heritage
been
completed and permits are in place to allow
a substantial follow-up drill program to
define the extents of lithium mineralisation
that remains open to the north, south and
east under shallow soil cover at Waratah
Well.
A 49-hole drill program has been approved to define the extents of lithium mineralisation that remains open to
the north, south and east under shallow soil cover, and to test the surroundings of the prospect at Waratah
Well where several lithium anomalous intersections were drilled in 2022.
Figure 7: Waratah Well Lithium Prospect Drilling
Cross Section A-A’
9
Hayes Hill Lithium – Nickel Project
The Hayes Hill Lithium – Nickel Project is in the Norseman – Widgiemooltha region of Western Australia (Figure
8). Zenith holds an option to acquire 100% of the Hayes Hill project (ASX Release 19-Jan-23).
The project consists of 4 granted exploration licences (2 of which were granted in July 2023) and 1 exploration
licence application in a highly mineral prospective corridor with significant untested lithium potential. The project
is situated 10 – 14km to the east and southeast of the Dome North lithium pegmatite deposit and immediately
east of the Sinclair caesium pegmatite mine both owned by Essential Metals Limited (ASX:ESS). Liontown’s
(ASX:LTR) Buldania lithium deposits are located a further 43km to the southeast of the Hayes Hill project area.
Modest lithium soil anomalies have been identified from cursory geochemical work by the project owner, however,
much of the ground is yet to be adequately screened using systematic soil or auger techniques, providing a
greenfields opportunity for lithium in a well-located tenure package.
In addition, the project has strong nickel potential with robust high-tenor nickel-copper-PGE soil anomalies that
have not yet been drill tested. Nickel prospective ultramafic rocks extend 18km north along strike from Galileo’s
(ASX:GAL) Calisto nickel-PGE discovery and 11km northwest along strike from ASX:S2R’s – Polar Bear nickel
prospects (Gwardar, Taipan & Halls Knoll).
Two existing high-tenor undrilled nickel-
copper-platinum-palladium
surface
geochemical anomalies are situated within
a folded sequence of ultramafic rocks
within the Hayes Hill project area:
• The Green Bananas auger anomaly
with peak values of 2,424 ppm Ni,
1,233ppm Cu, 77 ppm Pt and 21ppb
Pd is open ended to the east.
• PlatX soil anomaly with peak values of
1,486 ppm Ni, 386ppm Cu, 6 ppm Pt
and 49ppb Pd
The Green Bananas
target was
confirmed during the year with new
surface sampling returning peak assay
results of: 0.43% Cu, 0.53% Co &
203ppm Pt.
EM geophysical surveys and RC
drilling are proposed to commence
during the second half of 2023.
Yilmia Lithium Project
Zenith signed a binding option agreement
to secure up to a 100% interest in the
lithium rights over tenure near Coolgardie –
Western Australia during the first half of
2023 (ASX Release 22-May-23).
The Yilmia Lithium Project is inferred to
contain an 8km long greenstone package
that is considered highly prospective for
lithium pegmatites on the southern margin
the Woolgangie Monzogranite.
of
Figure 8: Hayes Hill Project Location
10
A strong aeromagnetic anomaly coincides with ultramafic and mafic rock units that are shown on government
geological maps, further east of the Yilmia project area. That same aeromagnetic anomaly extends through the
northern portion of the project area, under soil cover, indicating that the greenstone belt likely extends further west
through the Yilmia project tenure. Furthermore, the presence of greenstone within the Yilmia project area, is also
supported by a historical soil sampling program and a historical EM geophysical survey that were conducted as
part of nickel exploration in the area of interest to Zenith (Figure 9).
A program of aircore drilling is planned to test the lithium target zone.
Figure 9: Yilmia Lithium Project - Location Map
(Greenstone Outlines over Aeromagnetic Greyscale _ RTP Image)
11
GOLD & BASE METAL PROJECTS
On 2-Dec-22 the Board of Zenith advised shareholders , that the offer for shares in Mackerel Metals (Zenith’s
planned spin-out of its gold & base metal projects) had been negatively impacted by market conditions and had
therefore been withdrawn. The Company has no intentions to pursue a further spin-out via an initial public offering.
Earaheedy Zinc Project
The Earaheedy Zinc Joint Venture project is located ~900km northeast of Perth. Zenith, through its wholly
owned subsidiary, Fossil Prospecting Pty Ltd, holds a 25% non-contributing equity in the Earaheedy Zinc
Joint Venture Project and is free carried by Rumble through to the completion of a Bankable Feasibility
Study (BFS). Upon completion of a BFS Fossil may, within 90 days, elect to contribute its share to future
funding obligations or revert to a 1.5% Net Smelter Return (NSR) royalty.
During the year, Rumble announced a maiden, open-pit constrained, Inferred Mineral Resource Estimate (MRE)
for the Chinook, Tonka and Navajoh zinc deposits that make up the Earaheedy Joint Venture Project.
The MRE on a 100% basis stands at 94Mt @ 3.1% Zn+Pb and 4.1 g/t Ag (using a 2% Zn+Pb cutoff) and
constrained within optimised pit shells. Refer to Rumble’s ASX Release dated 19 April 2023, for full details.
Zenith, through its wholly owned subsidiary, Fossil Prospecting Pty Ltd, holds a 25% non-contributing equity in
the Earaheedy Joint Venture Project and is free carried by Rumble through to the completion of a Bankable
Feasibility Study (BFS).
Earaheedy Zinc Project – WA (Zenith 100%)
The Earaheedy Zinc Project (EZP) covers an area of ~500km2 and comprises seven granted exploration licences
and one Retention Licence located around the margins of the Earaheedy Basin. The basin margin contact is seen
as one of the key controls for significant zinc mineralisation within the adjacent Earaheedy Zinc joint venture. No
significant exploration was completed during the year.
Dulcie Far North Gold Project
Significant gold assay (>0.5 g/t Au) were reported from Dulcie Far North within the Company’s 100% owned
Split Rocks Gold Project during the quarter, including:
o
o
o
o
19.0m @ 1.9 g/t Au in SRRC020, incl 4m @ 6.4 g/t Au from 110m
14.0m @ 1.4 g/t Au in SRDD006, incl 1.9m @ 5.8 g/t Au from 134.5m
10.4m @ 1.0 g/t Au in SRDD005, including 3.4m @ 1.9 g/t Au from 127.5m
1.0m @ 12.4 g/t from 143m in SRDD013
A maiden Inferred Mineral Resource was estimated over the Dulcie Far North Prospect, immediately post year end
(ASX Release dated 11-Jul-23). Using a 0.5 g/t Au lower cut the resource is reported at:
o 3.4 million tonnes at 1.4 g/t Au for 150,000 ounces Au
Gold mineralisation remains open to the north and down dip. Further infill and extensional drilling is likely to
expand the mineralised zone.
Red Mountain Gold Project
Diamond drilling was also completed during the year at the Company’s 100% owned Red Mountain Gold-Silver
Project in Central Queensland (Figures 10 and 11). Two diamond holes (ZRMDD050 + 051) were completed for
959m and a third hole (ZRMDD052) was completed post year end at 491m.
Assay results received post year end returned significant widths of gold and silver mineralisation, including:
118m @ 0.54 g/t Au and 11.9g/t Ag. (ASX Release 29-Aug-23). The drilling confirmed the depth continuity
of gold and silver mineralisation occurring as stockwork, sheeted and extensional quartz and base metal
veins hosted primarily within rhyolite and granodiorite.
Drilling targeted the depth extensions to significant shallow high grade gold mineralisation up to 13m at 8.0 g/t Au
and 3.2 g/t Ag in ZRMRC001 from surface (see ASX release dated 3 August 2020).
Follow-up drilling is required to scope the lateral and depth extents of the rhyolite hosted mineralisation.
12
During the year 100% owned prospects Privateer and Auburn were consolidated into a single combined
Red Mountain project.
Figure 10: Maximum Downhole Gold Intersections along the
North-Western Flank of the Red Mountain IRG Breccia Pipe
Figure 11: Cross Section Through ZRMDD050 – ZRMDD052,
using a 0.10 g/t Au lower cut-off
Develin Creek Copper- Zinc Project – Queensland (Zenith 100%)
Develin Creek Project is a very high order volcanic massive sulphide (VMS) style copper – base metals target
spanning over of 50km strike length of favourable stratigraphy. VMS systems tend to occur in discrete commercial
clusters and this project appears to be presenting such an opportunity.
Develin Creek Project Background
13
Post year end the Develin Creek Project was divested to QMines Limited (ASX Release 24-Aug-23) for up to
$4.5M in cash and shares, plus additional work commitments.
The consideration includes:
An up-front payment to Zenith of $1.2M cash and $1M worth of QML shares for a 51% interest.
•
• Within 12 months QML must complete 500m of diamond drilling and a detailed metallurgical study on the
•
existing Develin Creek Inferred Mineral Resource.
At 12 months QML must pay a further $1.3M cash and issue another $1M worth of QML shares* to Zenith
for an additional 49% interest (Additional Interest Completion Date).
*The second tranche payment by QML may be adjusted down to $0.975M cash and $0.6875M worth of QML
shares, should the detailed metallurgical study show zinc concentrate grades below 50% or that a 50% zinc
concentrate grade is not commercially achievable.
Cowarra Gold Project – New South Wales (Zenith 22.3%, earning up to 47%)
The Cowarra gold project is located between Canberra and Cooma and consists of one granted exploration
licence and comprises multiple gold zones hosted in Lachlan Orogenic Belt sedimentary rocks associated with
gold mineralised strike extensive shear zones. Host rocks and structural setting are like that of some of the major
Victorian gold deposits.
Zenith initially announced a staged equity investment in pre-IPO vehicle (Oxley) back on 13-May-21 by way of a
Subscription Agreement. A renegotiation of the terms of the initial Subscription Agreement saw Zenith increase
its stake in Oxley, the owner of the Cowarra Gold Project, to 27%, by way of a further $150k placement at 8c per
share (see ASX Release dated 5-Oct-22).
During the year a total of 10 RC drill holes for 1,207m were completed across 3 prospects Victoria, King and
Democrat to confirm the style and geometry of gold mineralisation.
Significant (>0.5 g/t Au) gold drill results included:
▪ OCRC005 – 6m @ 3.4 g/t Au and 21m @ 3.7 g/t Au and 19m @ 3.6 g/t Au (true width 50% of reported
downhole intersections)
▪ OCRC006 - 21m @ 5.0 g/t (true width 50% of reported downhole intersection)
▪ OCRC007 – 12m @ 2.0 g/t Au and 26m @ 2.5 g/t Au (true width)
▪ OCRC009 - 14m @ 1.7 g/t Au and 4m @ 1.7 g/t Au (true width)
Multiple regional prospects and gold targets at Cowarra have been identified over 8km of strike with limited
systematic drill testing having occurred to date. Discrete IP geophysical targets from Oxley’s survey work are high
priority for drill follow-up. Zenith is looking to monetise its interest in Oxley, the company holding the Cowarra
Gold Project.
Kavaklitepe Gold Project – Turkey (Zenith ~20%)
Zenith’s joint venture partner for the Kavaklitepe gold project in Turkey, Gubretas Maden a Turkish mining
company that owns there nearby Sogut gold mine (under development) is planning an infill RC drilling program
over the project to enable a JORC Compliant resource to be estimated.
Zenith has elected not to contribute to the program and will dilute from its current 20% equity in the project. Should
Zenith’s equity fall below 10% it will revert to a 5% Net Profits Royalty.
14
MINERAL RESOURCE STATEMENT
During the year, Zenith's Joint Venture partner Rumble Resources limited announced a maiden, open-pit
constrained, Inferred Mineral Resource Estimate (MRE) for the Chinook, Tonka and Navajoh zinc deposits that
make up the Earaheedy Joint Venture Project.
The MRE on a 100% basis stands at 94Mt @ 3.1% Zn+Pb and 4.1 g/t Ag (using a 2% Zn+Pb cutoff) and is
constrained within optimised pit shells. Refer to Rumble’s ASX Release dated 19 April 2023, for full details.
Zenith, through its wholly owned subsidiary, Fossil Prospecting Pty Ltd, holds a 25% non-contributing equity in
the Earaheedy Joint Venture Project and is free carried by Rumble through to the completion of a Bankable
Feasibility Study (BFS).
The pit constrained MRE hosts a 41Mt higher-grade component above a 3% Zn+Pb cut-off grade, and a very
large 462Mt component above 0.5% Zn+Pb cut-off grade that has the potential to be upgraded through
beneficiation, providing the Earaheedy Project with significant optionality for future development.
Cut off
Zn+Pb %
0.5
Tonnes Mt
462
Pit Constrained Inferred Resources
Zn+Pb %
1.3
Zn %
1.0
Pb %
0.3
1.0
2.0
2.5
3.0
4.0
194
94
65
41
12
2.2
3.1
3.4
3.8
4.8
1.6
2.4
2.6
3.0
3.6
0.5
0.7
0.8
0.8
1.2
Ag g/t
2.2
3.1
4.2
4.5
4.9
5.7
Dulcie Far North – Gold Project
A maiden Inferred Mineral Resource was estimated over the Dulcie Far North Prospect, part of the Split Rocks
Project(100% owned, from 6m below surface ), immediately post year end (ASX Release dated 11-Jul-23).
Resource Category
Tonnes (Mt)
Au (g/t)
Contained Gold (Ounces)
Inferred
3.4
1.4
150,000
Using a 0.5 g/t Au lower cutoff grade
Develin Creek Copper-Zinc-Gold-Silver Project Mineral Resource
Following Zenith drilling at Develin Creek in 2014, 2021 and 2022, an updated Mineral Resource estimate was
completed for the Company’s 100% owned, Develin Creek project located in Queensland (ASX Release 8-Aug-
22). Note the project was divested subsequent to year end.
The Zenith drilling verified the past results that extended and improved the geological interpretation. The Mineral
Resource is interpreted and reported at a 0.5% Cu eq (copper equivalent) cut-off suitable for open pit assessment.
The updated Mineral Resource for the Sulphide City – Scorpion – Window copper – zinc deposits at the 0.5% Cu
eq cut-off includes:
Resource
Category
Indicated
Inferred
TOTAL
Tonnes (Mt)
Cu (%)
Zn (%)
Au (g/t)
Ag (g/t)
2.2
2.7
4.9
1.3
1.1
1.2
1.3
1.4
1.4
0.2
0.2
0.2
8
7
7
Note: Copper equivalence CuEq = (Cu + 0.45*Zn) and based on current rounded metal prices in June 2022 of
A$8400/tonne Cu, A$3300/t Zn and preliminary recoveries for Cu of 72% and Zn or 82%.
15
This update represents a 90% increase in tonnage and a 30% increase in overall contained metal from the
previous estimate announced on 15-Feb-2015. This difference is attributed in part to a lower cut-off grade for
reporting, but is also the result of resource extensions from recent Zenith drilling, as well as a more robust
interpretation that captures more or the mineralisation.
The estimate does not include the massive copper-zinc sulphide mineralisation identified at Snook and other
prospects to the south, also within the Develin Creek project area. Post year-end the Develin Creek project was
divested to QMines Limited (refer ASX Release 24-Aug-23).
Red Lake Manganese Mineral Resource
There was no change to the Red Lake Inferred Mineral Resource for manganese previously released to the ASX
in August 2014.
Red Lake Manganese Mineral Resource Estimate as at August 2014
Classification
Inferred
Reporting
Cut-off
Grade
25% Mn
20% Mn
15% Mn
Tonnes
(Mt)
Mn %
Fe % SiO2 % Al2O3 %
P %
S % LOI %
0.2
0.5
1.1
30.0
25.1
20.8
14.1
16.1
17.7
13.8
17.0
20.5
7.9
8.9
9.3
0.24
0.25
0.24
0.03
0.06
0.17
12.1
11.9
11.5
10% Mn
11.4
Note: The CSA Mineral Resource was estimated within constraining wireframe solids based on the specified
nominal lower cut-off grade for Mn. The Mineral Resource is quoted from all blocks above the specified Mn cut-
off grade %. Differences may occur due to rounding.
0.26
19.1
20.8
0.19
19.0
9.6
1.4
Lockeridge Manganese Mineral Resource
There was no change to the Lockeridge Inferred Mineral Resource for manganese previously released to the ASX
on 15-Apr15.
Lockeridge Manganese Mineral Resource Estimate as at April 2015
Classification
Inferred
Reporting
Cut-off
Grade
20% Mn
15% Mn
10% Mn
Tonnes
(Mt)
1.0
1.9
2.6
Mn %
Fe % Si02%
Al2O3 %
P % S %
LOI %
30.2
23.4
20.6
7.0
6.7
6.9
18.9
25.4
27.6
4.1
4.7
5.1
0.12
0.15
0.16
0.01
0.01
0.01
5.7
10.4
12.0
Note: The Mineral Resource was estimated within constraining wireframe solids based on the specified
nominal lower cut-off grade for Mn. The Mineral Resource is quoted from all blocks above the specified Mn
cut-off grade %. Differences may occur due to rounding.
Mineral Resource Governance and Internal Controls
Zenith Minerals Limited ensures that the Mineral Resource estimates quoted are subject to governance
arrangements and internal controls. All the Company’s Mineral Resources have been estimated by independent
third-party competent persons, or for selected inferred resources, by suitably qualified and experienced Company
personnel.
All resources have been subject to review by Zenith Minerals Limited technical staff and by a subcommittee
appointed by the Board of Directors. The Company re-affirms that its Mineral Resources are reported in
accordance with the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’ (the JORC Code) 2012 Edition.
16
COMPETENT PERSONS STATEMENT
The information in this report that relates to Exploration Results and Mineral Resources is based on information
compiled by Mr Michael Clifford, who is a Member of the Australian Institute of Geoscientists and an employee of
Zenith Minerals Limited. Mr Clifford has sufficient experience which is relevant to the style of mineralisation and
type of deposit under consideration, and to the activity which he is undertaking, to qualify as a Competent Person
as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves'. Mr Clifford consents to the inclusion in the report of the matters based on his information, in
the form and context in which it appears.
The information in this report that relates to the Develin Creek Mineral Resources is based on information
compiled by Mr John Horton, who is a Fellow and Chartered Professional of the Australasian Institute of Mining
and Metallurgy and a full-time employee of ResEval Pty Ltd. Mr Horton has sufficient experience which is relevant
to the style of mineralisation and type of deposit under consideration, and to the activity which he is undertaking,
to qualify as a Competent Person, as defined in the 2012 Edition of the 'Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves'. Mr Horton consents to the inclusion in the report of
the matters based on his information, in the form and context in which it appears.
The information in this report that relates to the Lockeridge and Red Lake Mineral Resources is based on
information compiled by Mr Michael Clifford, who is a Member of the Australian Institute of Geoscientists and an
employee of Zenith. Mr Clifford has sufficient experience which is relevant to the style of mineralisation and type
of deposit under consideration, and to the activity which he is undertaking, to qualify as a Competent Person as
defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves'. Mr Clifford consents to the inclusion in the report of the matters based on his information, in the
form and context in which it appears.
INVESTMENTS
At year end the Company has investments in various listed entities because of project-based transactions.
Bradda Head Holdings Ltd (LON & TSX-V:BHL)
43.9M shares
Alien Metals Ltd (LSE AIM:UFO)
7.827M shares
Rumble Resources Ltd (ASX:RTR)
3.9M shares
Bindi Metals Ltd (ASX:BIM)
1.25M shares
Zenith Minerals Limited (Zenith) signed a binding, but conditional agreement, that grants unlisted company WA
Rare Earths Pty Ltd (WRE) an option to acquire 80% legal and beneficial interest in a rare earth element (REE)
project portfolio (REE portfolio) held by Zenith (ASX Release 8-May-23).
The REE portfolio includes 6 granted exploration licences (EL’s) and 2 exploration licence applications (ELA’s) in
Western Australia covering a total of approximately 1,400km2.
Subject to certain conditions, Zenith will receive $2,000,000 worth of fully paid ordinary shares in the capital of
WRE, as at completion of an initial public offering (IPO) and retain a 20% free carried interest in the REE portfolio,
until such time that WRE announces to ASX a bankable feasibility study on any portion of the REE portfolio.
MATERIAL ASX RELEASES PREVIOUSLY RELEASED
The Company has released all material information that relates to Exploration Results, Mineral Resources and
Reserves, Economic Studies and Production for the Company’s Projects on a continuous basis to the ASX and
in compliance with JORC 2012. The Company confirms that it is not aware of any new information that materially
affects the content of this ASX release and that the material assumptions and technical parameters remain
unchanged.
17
DIRECTORS’ REPORT
The Directors present their report, together with the financial statements of the consolidated entity, being Zenith
Minerals Limited and subsidiaries ("the Consolidated Entity") it controlled at the end of, or during, the year
ended 30 June 2023, and the auditors' report thereon.
1 . DIRECT ORS
The Directors of the Consolidated Entity at any time during or since the end of the financial year and up to the date
of this report, unless otherwise stated are:
David J E Ledger
Executive Chairman, appointed 2 May 2022
Qualifications:
Experience:
MAICD, SFA (UK)
David Ledger has spent over 35 years in investment banking with experience
working in the United Kingdom and Australia. He is a former Executive
Director of a major European Bank and has been advising institutional and
corporate clients throughout his career. He currently works in Sydney in his
own advisory firm, working across multiple sectors.
Other Current Directorships:
Former Directorships (last 3
years):
None
None
Special Responsibilities:
Corporate and investor relations
Interest in Shares:
Interest in Options
Contractual Right to Shares:
350,000 as of 30 June 2023
None
None
Michael J Clifford
Managing Director, appointed 18 March 2014
Qualifications:
Experience:
BSc. (Hons), 1987, MSc
Mick Clifford is a geologist with over 35 years’ experience in the exploration
industry. Mick held senior technical and business development roles and
explored for most major metal commodities during a successful career with
Billiton Australia, Acacia Resources and AngloGold Ashanti, rising to the
position of Regional Exploration Manager Australia. Mick was Managing
Director of ASX listed PacMag Metals Ltd from 2005 until its takeover in 2010,
when he co-founded private explorer S2M2 Coal Pty Ltd. He is experienced
in international exploration, exploring for a broad range of commodities and
has had exposure to mining and exploration in Australia, USA, Brazil,
Indonesia, PNG, Angola, Democratic Republic of Congo, Mexico, Mongolia
and Turkiye.
Other Current Directorships:
Former Directorships (last 3
years):
None
None
Special Responsibilities:
Technical & Corporate
Interest in Shares:
Interest in Options
6,411,672 Ordinary Shares as of 30 June 2023
2,000,000 unlisted options exercisable at $0.39 expiring 7 February 2025.
Contractual Right to Shares:
None
18
Stanley A Macdonald
Non-Executive Director, appointed 24 April 2006
Experience:
Stan Macdonald has been associated with the mining and exploration
industry for over 25 years.
Other Current Directorships:
None
Former Directorships (last 3
years):
Gascoyne Resources Limited (Non-Executive Director from 20 April 2011,
resigned 8 October 2018)
Special Responsibilities:
Company promotion and project acquisition
Interest in Shares:
Interest in Options
6,820,072 Ordinary Shares as of 30 June 2023
4,000,000 unlisted options exercisable at $0.39 expiring 7 February 2025.
Contractual Right to Shares:
None
Andrew P Bruton
Non-Executive Director, appointed 8 December 2022
Qualifications:
Experience:
B Bus, LLB, AICDM
Andrew is an experienced company director, listed company CEO and
corporate advisor. He brings over 20 years of direct experience in
advancing complex mining, oil & gas and energy projects and
transactions within Australia and overseas. He was the former CEO of
MacArthur Minerals delivering the feasibility study on their iron ore
assets. Andrew was formerly a specialist lawyer for 20 years for one of
Australia’s leading national firms and was awarded “Most Trusted Mining
and Resource CEO 2022“ by CEO Monthly Magazine.
Other Current Directorships:
None
Former Directorships (last 3
years):
Macarthur Australia Ltd (December 2020 to May 2022)
Special Responsibilities:
Corporate
Interest in Shares:
Interest in Options
None as of 30 June 2023
500,000 unlisted options exercisable at $0.211 expiring 26 May 2026 and
500,000 unlisted options exercisable at $0.248 expiring 26 May 2027
Contractual Right to Shares:
None
Geoffrey J Rogers
Non-Executive Director, appointed 20 March 2023
Qualifications:
Experience:
B Juris LLB
Geoff has been involved in the resources sector for over 30 years. As a
former partner at international law firm, King & Wood Mallesons, he gathered
a wealth of legal experience particularly in mergers and acquisitions and the
resources area. He has been involved with significant project acquisitions
and project financing for many Australian and international mining and
mineral development companies. He has also previously served as in-
house legal counsel for an ASX listed mining company and presently
manages his own sole practice advising exploration and mining companies.
Other Current Directorships:
Former Directorships (last 3
years):
None
None
Special Responsibilities:
Corporate Law, Corporate Governance
Interest in Shares:
Interest in Options
None as of 30 June 2023
500,000 unlisted options exercisable at $0.211 expiring 26 May 2026 and
500,000 unlisted options exercisable at $0.248 expiring 26 May 2027
19
Contractual Right to Shares:
None
Julian D Goldsworthy
Non-Executive Director, appointed 29 August 2013
Stepped down 15 December 2022
Qualifications:
B. App. Sc. (Geology)
Emma J Scotney
Non-Executive Director, appointed 5 May 2022
Stepped down 7 February 2023
Qualifications:
LLB (Hons), B.A, GAICD, GradDipMgmt (Strategy and Finance)
‘Other current directorships’ mentioned above are current directorships for listed entities only,
excluding directorships of all other types of entities, unless otherwise stated.
‘Former directorships (last 3 years)’ mentioned above are directorships held in the last 3 years for
listed entities only, excluding directorships of all other types of entities, unless otherwise stated.
2. COMPANY SECRETARY
Nicholas Ong
Nicholas Ong was appointed Company Secretary on 16 November 2020.
He is experienced in mining project finance, mining and milling contract
negotiations, mine CAPEX & OPEX management, and toll treatment gold
reconciliation. Nicholas is a Fellow of the Governance Institute of Australia
and holds a Bachelor of Commerce and a Master of Business Administration
from the University of Western Australia. Nicholas is currently a Company
Secretary of several ASX listed companies.
3. DIRECTORS' MEETINGS
The number of Directors' meetings (including meeting of committees of directors) and number of meetings
attended by each of the directors of the Group during the financial year are:
Director
DJE Ledger MJ Clifford SA Macdonald JD Goldsworthy EJ Scotney AP Bruton GJ Rogers
Meetings
Attended
Meetings held
during office
6
6
6
6
4
6
3
3
4
4
3
3
1
1
4. REMUNERATION REPORT – AUDITED
The remuneration report is set out under the following main headings:
A. Principles of Compensation
B. Key Management Personnel Remuneration
C. Equity Instruments
The information provided under headings A-C includes remuneration disclosures that are required under the
Corporations Act 2001 and the Corporations Regulations 2001. These disclosures have been transferred from
the financial report and have been audited.
Details of the remuneration of the key management personnel of the Consolidated Entity are set out in
tables provided under heading ‘B. Key Management Personnel Remuneration’. Key management
personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the entity, directly or indirectly, including all directors.
Compensation levels for key management personnel of the entity are competitively set to attract and retain
appropriately qualified and experienced Directors and Executives.
20
A. Principles of Compensation - Audited
The objective of the Consolidated Entity’s reward framework is to ensure reward for performance is
competitive and appropriate. The framework aligns executive reward with achievement of strategic
objectives and creation of long-term growth and success for shareholders.
The Board ensures that remuneration satisfies the following criteria:
•
•
•
•
•
•
competitiveness and reasonableness
transparency
acceptability to shareholders
attracts and retains high calibre executives
rewards capability, experience and performance
performance alignment of executive compensation.
The full Board acts on behalf of Nomination and Remuneration Committee matters and is responsible for
determining and reviewing the remuneration packages for its directors and executives. Remuneration of
key management personnel for the year ended 30 June 2023 has been determined by the Board. In this
respect consideration is given to normal commercial rates of remuneration for similar levels of
responsibility that is market competitive and complementary
the
consolidated entity. Alignment to shareholders' interests focuses on pursuing long-term growth in
shareholder wealth, consisting of growth in share price and success of the Company within an
appropriate control framework. The structure of non-executive directors’ remuneration and executive
remuneration are separate as recommended by the Corporate Governance Council best practice.
reward strategy of
the
to
Executive Remuneration
The consolidated entity aims to reward executives with a level of remuneration based on their position and
responsibility, which has a mix of both fixed and variable components. The remuneration of executives and
reward framework comprises a combination of:
•
•
•
•
base pay and non-monetary benefits
performance linked incentives
share based payments
other remuneration such as superannuation and long service leave.
Fixed Compensation
Fixed compensation consists of base compensation (which is calculated on a total basis and includes any FBT
charges related to employee benefits including motor vehicles), as well as employer contributions to
superannuation funds. Compensation levels are reviewed annually by the Board of Directors acting in their
capacity as the Nomination and Remuneration Committee through a process that considers individual and
overall performance of the Consolidated Entity and comparable market remunerations.
Performance Linked Compensation
Performance-linked remuneration consists of long-term incentives in the form of options over ordinary shares
of the Consolidated Entity. Performance-linked remuneration is not based on specific financial indicators such
as earnings or dividends as the Consolidated Entity is at the exploration stage and during this period is
expected to incur operating losses. There is no separate profit-share plan or short-term incentive components.
Long-Term Incentive
Long-term incentives comprise of long service leave and share-based payments in the form of share options,
which are granted from time to time to encourage sustained performance in the realisation of strategic
outcomes and growth in shareholder wealth. Options are granted for no consideration and do not carry voting
or dividend entitlements. The exercise price of the options is determined after taking into account the
underlying share price performance during the period leading up to the date of the grant. Subject to specific
vesting conditions, each option is convertible into one ordinary share. There is presently no stated policy
restricting key management personnel from limiting their exposure to risk in relation to options granted. The
Board of Directors acting in their capacity as the Nomination and Remuneration Committee, review the long-
term incentives for executives on an annual basis during its review process of the executive’s performance.
21
A. Principles of Compensation – Audited (cont.)
Consequences of Performance on Shareholder Wealth
The overall level of key management personnel compensation takes into account the performance of the
Consolidated Entity over a number of years.
Performance in respect of the current financial year and the previous four financial years is detailed in the table
below:
2023
$
2022
$
2021
$
2020
$
2019
$
Profit/(Loss) attributable to owners of the Group
Basic Profit/(Loss) per Share
Share Price at financial year end ($)
Changes in share price (from initial listing of 25 cents)
(9,314,093) 1,465,147 2,010,141
0.0044
0.28
0.03
(0.0264)
0.09
(0.16)
0.0027
0.25
-
(383,397)
(0.002)
0.12
(0.13)
(695,492)
(0.003)
0.08
(0.17)
During the financial years noted above, there were no dividends paid or other returns of capital made by the
Consolidated Entity to shareholders. The Consolidated Entity’s performance is impacted by a number of
factors including employee performance. The measures of performance of the Consolidated Entity set out in
the table above have been taken into consideration in the determination of appropriate levels of remuneration
by the Board acting in its capacity as the Nomination and Remuneration Committee.
Non-Executive Compensation
Remuneration of Non-executives comprise fees in the form of cash and statutory superannuation entitlements,
quantified by having regard to industry practice and the need to obtain appropriately qualified, independent
persons. Fees may contain non-monetary elements. Fees and payments to non-executive directors have
regard to the demands and responsibilities of their role, which covers all main board activities and membership
of applicable sub-committees.
The Board, acting as the Nomination and Remuneration Committee, reviews non-executive director fees and
payments annually. The Board may receive advice from independent remuneration consultants to ensure
non-executive directors’ fees and payments are appropriate and in line with the market. The Chairman’s fees
are determined independently of other non-executive director fees, based on similar comparative roles in the
marketplace. The Chairman is not present at discussions regarding the determination of his own
remuneration.
Total compensation for all non-executive directors, agreed at a general meeting on 14 March 2006 is that the
maximum non-executive director remuneration be $200,000 per annum.
Voting and comments made at The Consolidated Entity’s 2022 Annual General Meeting (‘AGM’)
At the 2022 AGM, 99.69% of the votes received supported the adoption of the remuneration report for the year
ending 30 June 2022. There was no specific feedback received at the AGM, regarding its remuneration
practices.
B. Key Management Personnel Remuneration - Audited
The following table discloses the remuneration of the key management personnel of the Consolidated
Entity.
The key management personnel of the Consolidated Entity consisted of the following directors:
•
•
•
•
Mr D J E Ledger – Executive Chairman
Mr M J Clifford – Managing Director
Mr S A Macdonald – Non-Executive Director
Mr J D Goldsworthy – Non-Executive Director (stepped down 15 December 2022)
22
• Ms E J Scotney – Non-Executive Director (stepped down 7 February 2023)
• Mr A P Bruton – Non-Executive Director
• Mr G J Rogers – Non-Executive Director
23
The key management personnel of Zenith Minerals Limited and subsidiaries include the directors and the following executive officers:-
Short-Term Benefits
Cash Salary
& Fees
Cash Bonus
Non-
Monetary
Benefits
Post-
Employment
Benefits
Super-
annuation
Other Long
Term
Benefits
Long
Service
Leave
Share-Based
Payments
Options
TOTAL
$
$
$
$
$
$
$
S300A(1)(e)(i)
S300A(1)(e)(vi)
Proportion of
Remuneration
Performance
Related
%
Value of
Options as
Proportion of
Remuneration
%
Non- Executive
Directors:
S A Macdonald
J D Goldsworthy
E J Scotney
A P Bruton
G J Rogers
G D Riley
Executive
Directors:
D J E Ledger
M J Clifford
P J Bird
TOTAL
TOTAL
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
45,000
33,750
22,500
86,850
27,187
7,500
25,282
-
12,702
-
-
12,500
255,000
42,500
280,000
244,658
-
218,428
667,671
646,186
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,725
3,450
2,362
8,685
2,855
750
2,655
-
-
-
-
1,250
-
-
29,400
24,466
-
8,067
41,997
-
46,668
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
395,882
-
98,970
-
-
-
21,809
-
21,809
-
-
-
445,607
37,200
123,832
95,535
30,042
8,250
49,746
-
34,511
-
-
13,750
-
-
197,941
19,084
-
-
736,411
255,000
42,500
507,341
288,207
-
226,495
1,446,079
19,084
711,938
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
88.84%
-
79.92%
-
-
-
43.84%
-
63.19%
-
-
-
-
-
39.01%
6.62%
-
-
-
-
24
Analysis of Bonuses Included in Remuneration – Audited
No short-term incentive cash bonuses have been awarded as remuneration to directors of the Consolidated Entity
or to Consolidated Entity executives.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Non-Executive Directors:
S A Macdonald
J D Goldsworthy
E J Scotney
A P Bruton
G J Rogers
Executive Director:
D J E Ledger
M J Clifford
Fixed Remuneration
Remuneration linked to
performance
2023
2022
2023
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
100%
100%
-
-
-
-
-
-
No key management personnel appointed during the period received a payment as part of his or her
consideration for agreeing to hold the position.
Service Contracts
Remuneration and other terms of employment for the other key management personnel are formalised in
service agreements. The major provisions of the agreement relating to remuneration are set out below.
David J E Ledger
- Executive Chairman, appointed 2 May 2022
- Annually renewable contract
- Base salary of $255,000 per annum.
- Issue of unlisted options, subject to shareholder approval
- Three month notice period is prescribed on termination, with or without cause.
Stanley A Macdonald - Non-Executive Director, appointed 24 April 2006
- Annually renewable contract
- Base salary of $45,000 per annum plus superannuation of 10.5%
- No notice period is prescribed on termination
Julian D Goldsworthy - Non-Executive Director, appointed 29 August 2013, stepped down 15 December 2022
- Annually renewable contract
- Base salary of $45,000 per annum plus superannuation of 10.5%
- Additional consulting paid at daily rate.
- No notice period is prescribed on termination
Emma J Scotney
- Non-Executive Director, appointed 2 May 2022, stepped down 7 February 2023
- Annually renewable contract
- Base salary of $45,000 per annum plus superannuation of 10.5%
- No notice period is prescribed on termination
Andrew P Bruton
- Non-Executive Director, appointed 8 December 2022
- Annually renewable contract
- Base salary of $45,000 per annum plus superannuation of 10.5%
- No notice period is prescribed on termination
25
Service Contracts (cont.)
Geoffrey J Rogers
- Non-Executive Director, appointed 8 March 2023
- Annually renewable contract
- Base salary of $45,000 per annum plus superannuation of 10.5%
- No notice period is prescribed on termination
Michael J Clifford
- Managing Director appointed 18 March 2014
Terms of Agreement
- The agreement is annually renewable. To terminate the agreement, the
Consolidated Entity must provide six months’ notice, or the Managing Director
must provide three months’ notice.
If serious misconduct is committed by the executive, the agreement may be
immediately terminated by the Consolidated Entity. On termination, the
Consolidated Entity may provide the executive with a payment in lieu of notice of
termination for all or part of the notice period.
Remuneration and
Benefits
- Annual base salary of $280,000 exclusive of statutory superannuation for the
financial year to 30 June 2023. Salary is reviewed annually by the Board acting
as the Nomination and Remuneration Committee.
C. Equity Instruments – Audited
Share-Based Compensation
i) Issue of shares
There were no shares issued to the directors and other key management personnel as part of
compensation during the year ended 30 June 2023 (2022: Nil)
Options were exercised during the year using the cashless exercise method. The unpaid amount
expensed as Share-Based Compensation.
ii) Options
For Zenith Minerals Limited options granted over ordinary shares during the current financial year or
future reporting years affecting remuneration of directors and other key management personnel, the
terms and conditions are as follows:
26
Share-Based Compensation (cont.)
2023:
Name
Number
Options
Granted
Grant date Expiry date
Exercise
price
Fair value at
grant date
Vesting
Date
M Clifford
2,000,000 6 Dec 2022
7 Feb 2025 $0.3900
$0.0990
S A
Macdonald
J D
Goldsworthy
A Bruton
4,000,000 6 Dec 2022
7 Feb 2025 $0.3900
$0.0990
1,000,000 6 Dec 2022
7 Feb 2025 $0.3900
$0.0990
500,000 26 May 2023 26 May 2026 $0.2100
$0.0416
500,000 26 May 2023 26 May 2027 $0.2480
$0.0457
G Rogers
500,000 26 May 2023 26 May 2026 $0.2110
$0.0416
500,000 26 May 2023 26 May 2027 $0.2480
$0.0457
Vests at date of
grant
Vests at date of
grant
Vests at date of
grant
Vests at date of
grant
Vests 6 months
from date of grant
Vests at date of
grant
Vests 6 months
from date of grant
2022: Nil
Options granted carry no dividend or voting rights.
Values of options over ordinary shares granted, exercised, lapsed for directors and other key management
personnel as part of compensation during the year are set out below:
2023:
Name
Director:
D J E Ledger
M J Clifford
S A Macdonald
J D Goldsworthy
E J Scotney
A P Bruton
G J Rogers
2022:
Name
Director:
M J Clifford
S A Macdonald
J D Goldsworthy
P J Bird
Value of
options granted
during the year
$
Value of options
exercised
during the year
$
Value of
options lapsed
during the year
$
Remuneration
consisting of
options for the year
%
-
197,941
395,882
98,970
74,794
21,809
21,809
-
436,900
137,125
137,125
-
-
-
-
-
-
-
74,794
-
-
-
39.01%
88.84%
79.92%
-
43.84%
63.19%
Value of
options granted
during the year
$
Value of options
exercised
during the year
$
Value of
options lapsed
during the year
$
Remuneration
consisting of
options for the year
%
19,084
-
-
-
-
-
-
-
-
-
-
-
6.62%
-
-
-
Shares issued on exercise of options
27
Share-Based Compensation (cont.)
5,750,000 options granted under Zenith Minerals Limited’s Employee Option Plan were exercised into
ordinary shares during the year ended 30 June 2023 using the cashless exercise mechanism (2022:
1,705,828).
iii) Ad ditio nal disclosur es relating to ke y m ana g eme nt personn el
Share Holding
The number of shares in Zenith Minerals Limited held during the financial year by each director and other
key management personnel of the Consolidated Entity, including their personally related parties, are set
out below. There were no shares granted during the reporting period as compensation.
2023
Name
Directors:
Stanley A Macdonald
Julian D Goldsworthy
Michael J Clifford
David J E Ledger
Emma J Scotney
A Bruton
G Rogers
Total
Option Holding
Balance at
the start of
the year
Received
as part of
remuneration
Ordinary Shares
Additions
Other changes
5,570,072
2,726,180
3,317,988
350,000
-
-
-
11,964,240
-
-
-
-
-
-
-
-
1,250,000
808,615
3,093,684
-
-
-
-
5,152,299
-
-
(3,534,795)
-
-
-
-
-
(3,534,795)
13,581,744
Balance at
the end of
the year
6,820,072
-
6,411,672
350,000
-
-
-
The number of options over ordinary shares in Zenith Minerals Limited held during the financial year by directors
and other key management personnel of the Consolidated Entity, including their personally related parties,
are set out below:
2023:
Name
Balance at
the start of
the year
Granted as
Remuneration
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year**
Vested and
exercisable at
30 June 2023
Directors:
Stanley A Macdonald
Julian D Goldsworthy
Michael J Clifford
David J E Ledger
A Bruton
E J Scotney
G Rogers
1,250,000
1,250,000
4,500,000
-
-
-
-
4,000,000
1,000,000
2,000,000
-
1,000,000
1,000,000
1,000,000
(1,250,000)
(1,250,000)
(4,500,000)
-
-
-
-
-
-
-
-
-
(1,000,000)
-
4,000,000
1,000,000
2,000,000
-
1,000,000
-
1,000,000
4,000,000
1,000,000
2,000,000
-
500,000
-
500,000
Total
7,000,000
10,000,000
(7,000,000)
(1,000,000)
9,000,000
8,000,000
Other Transactions with Key Management Personnel and Their Related Parties
There are no loans to directors and executives
This concludes the remuneration report, which is audited.
28
5 . ACT IV IT IE S
The principal activity of the Consolidated Entity during the course of the financial year was mineral
exploration in Australia.
Following listing on ASX on 29 May 2007, the Consolidated Entity commenced exploration activity
wherever it assessed there was an opportunity of success.
There was no significant change in the nature of the activity of the Consolidated Entity during the year.
6 . OPERATING & FINANCIAL REVIEW
Overview
During the year, the Consolidated Entity undertook mineral exploration activities in Australia.
Objectives
The Group's objectives are to pursue opportunities in exploration and mining for minerals in areas which are
highly prospective for mineralisation.
Financial Results
The loss for the financial year ended 30 June 2023, attributable to members of the Consolidated Entity,
after income tax is $9,314,093 (2022 profit: $1,465,147).
No dividends were paid or recommended for payment during the financial year ended 30 June 2023
(2022: Nil).
Review of Financial Condition
During the year, the net assets of the Consolidated Entity decreased by $8,104,002 from $26,520,101 at 30
June 2022 to $18,416,099 at 30 June 2023.
The directors consider that the Consolidated Entity holds a valuable portfolio of mineral tenements with a
carrying value at 30 June 2023 of $12,334,857 (2022: $11,096,281). During the financial year, the
consolidated entity impaired and wrote off capitalised exploration and evaluation expenditure of $3,616,142
(2022: $158,137) following its review of its portfolio of mineral tenements.
7 . SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no other significant changes in the state of affairs of the Consolidated Entity during the financial
year ended 30 June 2023.
8 . EVENTS SUBSEQUENT TO REPORTING DATE
On 28 August 2023, the Company announced that a legally Binding Term Sheet has been executed with
QMines Limited (ASX:QML) for the sale of the Develin Creek Copper-Zinc Project in Queensland, for up to
$4.5M in cash and shares, plus additional work commitments (refer to ASX announcement dated 28 August
2023). The Company has since received an up-front payment of $1.2M cash and $1M worth of QML shares
for an initial 51% interest of the Develin Creek Copper-Zinc Project.
No other matter or material event has arisen since 30 June 2023, which has significantly affected or may
significantly affect the Consolidated Entity’s operations, the results of those operations, or the Consolidated
Entity’s future state of affairs.
29
9 . L IKE L Y DE V E L OP ME NT S
The Consolidated Entity will continue to pursue its policy of acquiring and testing attractive mineral
properties with a view to developing properties capable of economic mineral production.
Further information about likely developments in the operations of the Consolidated Entity and the
expected results of those operations in future financial years has not been included in this report because
disclosure of the information would be likely to result in unreasonable prejudice to the Consolidated Entity.
1 0 . E NV IRO NME NT AL R E GUL AT I ON
The Consolidated Entity is subject to significant environmental regulation in relation to its exploration
activities from the Department of Minerals and Petroleum (West Australian operations), Code of Environmental
Compliance for exploration and mineral development projects, Version 1.1 and provision of the Environmental
Heritage Protection Act 1994 (Queensland operations), , Turkish Mining Law as administered by the Mining
Affairs General Directorate of the Ministry of Energy and Natural Resources (Turkish operations) and aims to
ensure that it complies with all relevant environmental legislation. The directors are not aware of any significant
breaches during the period covered by this report.
1 1 . INDEMNITY AND INSURANCE OF OFF ICERS
The Consolidated Entity has indemnified the Directors and Officers for costs incurred by them in
defending civil or criminal proceedings that may be brought against the Directors and Officers in their
capacity, of the Consolidated Entity, and any other payments arising from liabilities incurred by the
Directors and Officers in connection with such proceedings. This does not include such liabilities that arise
from conduct involving a willful breach of duty by the Directors or Officers of the improper use of their position
or of information to gain advantage for themselves or someone else or to cause detriment to the
Consolidated Entity.
During the financial year, the company paid a premium in relation to a contract to insure the Directors and
Officers of the Consolidated Entity against liability to the extent permitted by the Corporations Act 2001. The
insurance contract prohibits disclosure of the nature of the liability and the amount of the premium.
1 2 . INDEMNITY AND INSURANCE OF AUDIT ORS
The Consolidated Entity has not, during or since the end of the financial year, indemnified or agreed to
indemnify the auditor of the company or any related entity against a liability incurred by the auditor.
During the financial year, the Consolidated Entity has not paid a premium in respect of a contract to
insure the auditor of the company or any related entity.
30
1 3 . S HARE OPT IONS
Shares Under Option
Unissued ordinary shares of Zenith Minerals Limited under option at the date of this report are as follows:
Date options
granted
Expiry date
16 July 2021
13 July 2020
13 July 2020
14 July 2024
31 December 2023
31 December 2023
6 December 2022
7 February 2025
26 May 2023
26 May 2023
26 May 2023
26 May 2023
26 May 2026
26 May 2027
26 May 2026
26 May 2027
Exercise
Price
$0.379
$0.14
$0.16
$0.39
$0.211
$0.211
$0.248
$0.248
Number under
option
750,000
2,000,000
2,000,000
7,000,000
500,000
500,000
500,000
500,000
No option holder has any right under the options to participate in any other share issue of the Group.
14. SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were 6,552,299 ordinary shares issued by Zenith Minerals Limited during the year ended 30
June 2023 and up to the date of this report on the exercise of options granted.
15. PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group
for all or any part of those proceedings. The Group was not a party to any such proceedings during the
period.
16. DIVIDENDS
No dividends were paid or provided for during the year.
17. NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor (PKF) for non-audit services provided during the
financial year are outlined in Note 9 to the financial statements.
The directors are satisfied that the provision for non-audit services during the financial year, by the auditor
(or by another person or firm on the auditor’s behalf), is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services do not compromise the external auditor’s independence
requirements of the Corporations Act 2001 due to the following reasons:
•
•
all non-audit services have been reviewed and approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional
and Ethics Standards Board, including reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the company, acting as advocate for the company or
jointly sharing economic risks and rewards.
31
18. OFFICERS OF THE COMPANY WHO ARE FORMER AUDIT PARTNERS OF PKF
There are no officers of the company who are former audit partners of PKF.
19. AUDITORS’ INDEPENDENCE DECLARATION
A copy of the auditors’ independence declaration as required under section 307C of the Corporations
Act 2001 is set out on the following page.
20. AUDITOR
PKF Perth continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
Mr David J E Ledger
Executive Chairman
Dated: 28 September 2023
Perth, WA.
32
PKF Perth
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF ZENITH MINERALS LIMITED
In relation to our audit of the financial report of Zenith Minerals Limited for the year ended 30 June 2023, to the
best of my knowledge and belief, there have been no contraventions of the auditor independence requirements
of the Corporations Act 2001 or any applicable code of professional conduct.
PKF PERTH
SIMON FERMANIS
AUDIT PARTNER
28 SEPTEMBER 2023
WEST PERTH
WESTERN AUSTRALIA
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or
inactions of any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
33
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Revenue from continuing operations
Net fair value (loss)/gain on other financial assets
Interest revenue
Expense
Employee benefits expenses
Share option-based payments
Depreciation
Premises costs
Exploration expenses
Exploration costs written off
Impairment of exploration costs
Impairment of trade debtors
Loss on recognition of associate
Impairment of investment in associate
Share of losses of Associate accounted for using
equity method
Other operating expenses
(Loss)/Profit from continuing operations before
income tax
Income tax expense
(Loss)/Profit from continuing operations after
income tax benefit for the year
Net profit after tax from discontinued operations
NOTE
5
13
25
15
16
16
12
11
11
11
6
9
Consolidated Entity
2023
$
1,695,960
(2,565,420)
101,236
(844,070)
(736,411)
(22,043)
(92,859)
(103,810)
(3,616,142)
-
(1,581,912)
-
(89,776)
(5,669)
2022
$
1,118,444
2,436,574
10,084
(579,339)
(305,594)
(6,341)
(113,937)
(39,739)
-
(158,137)
-
(114,421)
-
10,437
(1,453,177)
(792,884)
(9,314,093)
1,465,147
-
-
(9,314,093)
1,465,147
-
-
Net (loss)/profit for the year
(9,314,093)
1,465,147
Other comprehensive income
Items that might be reclassified subsequently to profit
or loss:
Foreign currency translation
20(a)
-
-
Other comprehensive loss for the year (net of tax)
Total comprehensive (loss)/profit for the year
(Loss)/Profit per share
Continuing and discontinued operations
Basic profit/(loss) per share
Diluted profit/(loss) per share
(9,314,093)
1,465,147
Cents
Cents
8
8
(2.64)
(2.64)
0.44
0.43
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction
with the notes to the consolidated financial statements.
34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
NOTE
Consolidated Entity
2023
$
2022
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial asset at fair value through profit or loss
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Interest in associate
Plant and equipment
Exploration and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefits
TOTAL CURRENT LIABILITIES
10
12
13
14
11
15
16
17
18
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
2,257,094
120,100
4,318,584
32,010
7,906,087
171,630
7,467,583
38,260
6,727,788
15,583,560
182,265
52,722
12,334,857
127,710
16,356
11,096,281
12,569,844
11,240,347
19,297,632
26,823,907
723,111
158,422
156,451
147,355
881,533
303,806
881,533
303,806
18,416,099
26,520,101
19
20(a)
20(b)
40,028,343
666,892
(22,279,136)
38,780,371
704,773
(12,965,043)
18,416,099
26,520,101
The consolidated statement of financial position is to be read in conjunction with the notes to the consolidated
financial statements.
35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Issued Capital
Reserves
$
$
Accumulated
Losses
$
Total
$
Balance at 1 July 2022
38,780,371
704,773
(12,965,043)
26,520,101
Profit/(Loss) for the period
Other comprehensive income
Total comprehensive income
Transactions with owners,
recorded directly in equity
Issue of shares, net of transaction
costs (note 19)
-
-
-
200,000
-
-
-
-
Exercise of options
1,047,972
(774,292)
Issue of employee options (note 25)
-
736,411
(9,314,093)
-
(9,314,093)
-
(9,314,093)
(9,314,093)
-
-
-
200,000
273,680
736,411
Balance at 30 June 2023
40,028,343
666,892
(22,279,136)
18,416,099
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Issued Capital
Reserves
$
$
Accumulated
Losses
$
Total
$
Balance at 1 July 2021
26,543,450
867,650
(14,430,190)
12,980,910
Profit/(Loss) for the period
Other comprehensive income
Total comprehensive income
Transactions with owners,
recorded directly in equity
Issue of shares, net of transaction
costs (note 19)
-
-
-
11,634,514
-
-
-
-
Exercise of options
602,407
(281,645)
Issue of employee options (note 25)
-
118,768
1,465,147
-
1,465,147
-
1,465,147
1,465,147
-
-
-
11,634,514
320,762
118,768
Balance at 30 June 2022
38,780,371
704,773
(12,965,043)
26,520,101
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated
financial statements.
36
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE
Consolidated Entity
2023
$
2022
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Cash paid to suppliers and employees
Payments for capitalised exploration and expenditure
Interest received
182,385
(1,806,131)
(4,775,334)
101,236
650,236
(1,542,378)
(4,767,424)
10,084
NET CASH (USED IN) OPERATING ACTIVITIES
26
(6,297,844)
(5,649,462)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of investments
Proceeds on sale of tenements
Payments for equity investments
Payments for plant and equipment
NET CASH FROM (USED IN) INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of equity securities
Cost of issuing equity securities
Proceeds from exercise of options
Repayment of lease liability
583,579
-
(150,000)
(58,408)
375,171
-
191,446
(231,694)
(4,836)
(45,084)
-
-
273,680
12,000,000
(365,486)
133,934
-
NET CASH PROVIDED BY FINANCING ACTIVITIES
273,680
11,768,448
Net (decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the
financial period
Effect of movement in exchange rates on cash held
CASH AND CASH EQUIVALENTS AT THE END OF THE
FINANCIAL PERIOD
(5,648,993)
6,073,904
7,906,087
1,832,183
-
-
10
2,257,094
7,906,087
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated
financial statements.
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
1. REPORTING ENTITY
Zenith Minerals Limited and controlled entities (“Consolidated Entity”) is domiciled in Australia, incorporated in
Australia, publicly listed on the ASX and limited by shares. The address of the Consolidated Entity
registered office and principal place of business is Level 2, 33 Ord Street, West Perth, Western Australia,
6005.
The Consolidated Entity is involved in mineral exploration.
2 . BAS IS OF P REPARAT ION
(a) Statement of Compliance
These general-purpose financial statements have been prepared in accordance with Australian Accounting
Standards (AASBs), Interpretations issued by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001, as appropriate for for-profit orientated entities.
These financial statements of the Consolidated Entity comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board.
The Consolidated Financial Statements were approved by the Board of Directors on 28 September 2023.
The directors have the power to amend and reissue the financial statements. Comparative information is for
period 1 July 2021 to 30 June 2022.
(b) Basis of Measurement
These financial statements have been prepared on the historical cost and accrual accounting basis,
except for the revaluation of financial assets and liabilities at fair value through profit or loss and financial
assets at fair value through other comprehensive income.
In accordance with the Corporations Act 2001, these financial statements present the results of the
Consolidated Entity with supplementary information about the parent entity being included at note 29.
(c) Functional and Presentation Currency
These financial statements are presented in Australian dollars, which is the Consolidated Entity’s functional
currency.
(d) Use of Estimates and Judgements
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the Financial Statements. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenues and
expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other
various factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual
results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
38
2 . BASIS OF P REPARAT ION (cont.)
(d) Use of Estimates and Judgements (cont.)
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant
judgement is required in determining the provision for income tax. There are many transactions and
calculations undertaken during the ordinary course of business for which the ultimate tax determination is
uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the
consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters is
different from the carrying amounts, such differences will impact the current and deferred tax provisions in
the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity
considers it is probable that future taxable amounts will be available to utilise those temporary differences
and losses.
Exploration and evaluation expenditure
The Consolidated Entity capitalises expenditure relating to exploration and evaluation where it is considered
likely to be recoverable or where the activities have not reached a stage which permits a reasonable
assessment of the existence of reserves. Key judgements are applied in considering costs to be
capitalised, including determining those expenditures directly related to these activities and allocating
overheads between those that are expensed and capitalised. While there are certain areas of interest
from which no reserves have been extracted, the directors are of the continued belief that such
expenditure should not be written off since feasibility studies in such areas have not yet concluded.
Factors that could impact the future recoverability include the level of reserves and resources, future
technological changes, costs of drilling and production, production rates, future legal changes and changes
to commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future,
they will be written off in the period in which this determination is made.
As at 30 June 2023, the carrying value of capitalised exploration expenditure is $12,334,857 (2022:
$11,096,281).
Impairment of Non-Financial Assets
The Consolidated Entity assesses impairment at each reporting date by evaluating conditions specific to
the Consolidated Entity and to the particular asset that may lead to impairment of assets. Where an
impairment trigger exists, the recoverable amount of the asset is determined. Fair value less cost of
disposal or value-in-use calculations performed in assessing recoverable amounts incorporate a number
of key estimates. Impairment loss recorded in the current financial year was $Nil (2022: $158,137).
Share Based Payments
The Consolidated Entity measures the cost of equity settled transactions with consultants and employees
by reference to the fair value of the equity instruments at the date at which they are granted. The fair
value is determined using a Black Scholes model, taking into account the terms and conditions upon which
the instruments were granted. The accounting estimates and assumptions relating to equity settled share-
based payments would not impact carrying amounts of assets and liabilities within the next annual reporting
period but may impact profit or loss and equity (note 25).
39
2. BAS IS OF P REPARAT ION (cont.)
Estimation of Useful Lives of Assets
The Consolidated Entity determines the useful lives and related depreciation and amortisation charges for its
property, plant & equipment and finite live intangible assets. Events such as technical innovations or other
events could change the useful lives of assets significantly. Depreciation and amortisation charges will
increase where the useful lives are less than the previously estimated lives, or technically obsolete or non-
strategic assets which have been abandoned or sold will be written down or written off.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. The
allowance for expected credit losses, as disclosed in note 12, is calculated based on the information available
at the time of preparation. The actual credit losses in future years may be higher or lower.
Fair Value Measurement Hierarchy
The Consolidated Entity is required to classify all assets and liabilities measured at fair value, using
a three level hierarchy which is based on the lowest level of input that is significant to the entire fair
value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets
or liabilities that the entity can access at the measurement date; Level 2: Inputs other than quoted
prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;
and Level 3: Unobservable inputs for the asset or liability. In determining what is significant to fair
value there is considerable judgement required. Therefore, the category the asset or liability is placed
in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models.
These include discounted cash flow analysis or use of observable inputs requiring significant adjustments
based on unobservable inputs.
(e) Going concern basis of accounting
The financial report has been prepared on a going concern basis, which contemplates the continuity of
normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of
business.
The Consolidated Entity is engaged in mineral exploration activities and has no revenue generating activity
yet. For the year ended 30 June 2023, the Consolidated Entity incurred a loss of $9,314,093 (2022: profit of
$1,465,147), and experienced a cash out flows of $6,297,844 (2022: 5,649,462) on operating activities. As
at 30 June 2023, the Consolidated Entity had cash & cash equivalent of $2,257,094 (2022: $7,906,087).
The Consolidated Entity’s ability to continue its exploration activities as a going concern and meet its debt
obligations and commitments as and when they fall due is depended on its ability to raise sufficient equity
finance at a regular frequency or alternatively dispose of its assets at a reasonable value.
As at the date of this report, the Consolidated Entity has sufficient liquidity in the form of cash, and
investments in listed entities to meet its current obligations and fund the working capital at least for the next
12 months. Accordingly, this financial report has been prepared on a going concern basis.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out below.
These policies have been consistently applied unless otherwise stated.
40
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
New or Amended Accounting Standards and Interpretations Adopted
The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting
period. There was no material impact on the financial report as a result of adopting the new accounting
standards.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted by the Consolidated Entity for the annual reporting period ended 30 June 2023. The impact
has not yet been determined.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Zenith
Minerals Limited (the “Company”) as at 30 June 2023 and the results of all subsidiaries for the year
then ended. Zenith Minerals Limited and its subsidiaries together are referred to in these financial
statements as the ‘Consolidated Entity’ or the ‘Group’.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity
controls an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities of
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated
Entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
Consolidated Entity are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference
between the consideration transferred and the book value of the share of the non-controlling interest acquired
is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit
or loss and other comprehensive income, statement of financial position and statement of changes in equity
of the Consolidated Entity. Losses incurred by the Consolidated Entity are attributed to the non-controlling
interest in full, even if that results in a deficit balance.
Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The Consolidated Entity recognises the fair value of the consideration received and the
fair value of any investment retained together with any gain or loss in profit or loss.
Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method. Under the equity method,
the share of the profits or losses of the associate is recognised in profit or loss and the share of the
movements in equity is recognised in other comprehensive income. Investments in associates are carried
in the statement of financial position at cost plus post-acquisition changes in the consolidated entity's share
of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the
investment and is neither amortised nor individually tested for impairment. Dividends received or receivable
from associates reduce the carrying amount of the investment.
41
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Associates (cont.)
When the consolidated entity's share of losses in an associate equals or exceeds its interest in the associate,
including any unsecured long-term receivables, the consolidated entity does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate.
The consolidated entity discontinues the use of the equity method upon the loss of significant influence over
the associate and recognises any retained investment at its fair value. Any difference between the
associate's carrying amount, fair value of the retained investment and proceeds from disposal is recognised
in profit or loss.
Operating segments
Operating segments are presented using the ‘management approach’, where the information presented is
on the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The
CODM is responsible for the allocation of resources to operating segments and assessing their
performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is the Consolidated Entity’s functional
and presentation currency.
Foreign Currency Transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
Foreign Operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates
at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars
using the average exchange rates, which approximate the rate at the date of the transaction, for the period.
All resulting foreign exchange differences are recognised in other comprehensive income through the foreign
currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is
disposed of.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as
part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets
are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and the
contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided.
Investments and other financial assets are initially measured at fair value. Transaction costs are included as
part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets
are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and the
contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided.
42
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Investments and other financial assets (cont.)
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.
When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is
written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either:
(i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of
making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value
movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them as
such upon initial recognition.
Loans
Loans are recognised initially at fair value, net of transaction costs. Subsequent to initial recognition loans
are measured at amortised cost using the effective interest method, less any impairment losses.
Finance costs
Finance costs directly attributable to qualifying assets are capitalised as part of the asset. All other finance
costs are expensed in the period in which they are incurred
Revenue
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is
expected to be entitled in exchange for transferring goods or services to a customer.
For each contract with a customer, the consolidated entity: identifies the contract with a customer; identifies
the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct good
or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a
manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount'
method. The measurement of variable consideration is subject to a constraining principle whereby revenue
will only be recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to
the constraining principle are recognised as a separate refund liability.
43
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue (cont.)
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on
either a fixed price or an hourly rate.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary
to match them with the costs that they are intended to compensate.
Rent
Rent revenue from investment properties is recognised on a straight-line basis over the lease term. Lease
incentives granted are recognised as part of the rental revenue. Contingent rentals are recognised as
income in the period when earned.
Income tax
The income tax expense or benefit for the period is the tax payable on the current period's taxable income based
on the income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised in prior periods, where applicable.
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect
of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been
enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised
as a liability (or asset) to the extent that it is unpaid (or refundable)
Deferred tax
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates that are expected
to apply in the period in which the liability is settle or the asset realised, based on the tax rates (and tax laws)
that have been enacted or substantively enacted, except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting nor taxable profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and in the timing of the reversal can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax liabilities are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses
The carrying amount of recognised deferred tax assets and unrecognised deferred tax assets is reviewed at
the end of each reporting period and reduced to the extent that it is no longer probably that sufficient future
taxable profits will be available to allow all or part of the asset to be recovered.
44
3. SUMMARY OF SIGNIFICANT ACCOUN TING POLICIES (cont.)
Income tax (cont.)
Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are
future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and when they
relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities which intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the Statement of Financial Position based on current and non-
current classification.
The asset is classified as current when:
i)
ii) it’s held primarily for the purpose of trading;
iii) it’s expected to be realised within 12 months after the reporting period; or
iv) the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a
It’s either expected to be realised or intended to be sold or consumed in normal operating cycle;
liability for at least 12 months after the reporting period.
it’s either expected to be settled in normal operating cycle;
All other assets are classified as non-current.
A liability is classified as current when:
i)
ii) it’s held primarily for the purpose of trading;
iii) it’s due to be settled within 12 months after the reporting period; or
iv) there is no unconditional right to defer the settlement of the liability for at least 12 months after the
reporting period.
All other liabilities are classified as non-current. Deferred tax assets and liabilities are always classified
as non-current.
Impairment
Financial Assets
(i)
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are
either measured at amortised cost or fair value through other comprehensive income. The measurement of
the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period
as to whether the financial instrument's credit risk has increased significantly since initial recognition, based
on reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial
asset has become credit impaired or where it is determined that credit risk has increased significantly, the
loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss
recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls
over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit
or loss.
Non-Financial Assets
(ii)
The carrying amounts of the Consolidated Entity’s non-financial assets, deferred tax assets, are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be
45
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Impairment (cont.)
recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceeds
its recoverable amount. Impairment losses are recognised in profit or loss.
The recoverable amount is the higher of the assets fair value less costs of disposal and value-in-use. In value
in use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount
rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have
independent cash flows are grouped together to form a cash-generating unit.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and at call and deposits with banks or financial institutions and
other short term, highly liquid investments with original maturities of three months or less, which are readily
convertible to cash, and which are subject to an insignificant risk of changes in value. Bank overdrafts that are
repayable on demand and form an integral part of the Group’s cash management are included as a component
of cash and cash equivalents for the purpose of the statement of cash flows.
Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses
a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses
a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the consolidated entity has transferred goods or services to the
customer but where the consolidated entity is yet to establish an unconditional right to consideration.
Contract assets are treated as financial assets for impairment purposes.
Customer acquisition costs
Customer acquisition costs are capitalised as an asset where such costs are incremental to obtaining a
contract with a customer and are expected to be recovered. Customer acquisition costs are amortised on a
straight-line basis over the term of the contract.
Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained or
which are not otherwise recoverable from a customer are expensed as incurred to profit or loss. Incremental
costs of obtaining a contract where the contract term is less than one year is immediately expensed to profit
or loss.
46
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Customer fulfilment costs
Customer fulfilment costs are capitalised as an asset when all the following are met: (i) the costs relate
directly to the contract or specifically identifiable proposed contract, (ii) the costs generate or enhance
resources of the consolidated entity that will be used to satisfy future performance obligations; and (iii) the
costs are expected to be recovered. Customer fulfilment costs are amortised on a straight-line basis over
the term of the contract.
Joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the arrangement. Investments in joint ventures are accounted for using the
equity method. Under the equity method, the share of the profits or losses of the joint venture is
recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive
income. Investments in joint ventures are carried in the statement of financial position at cost plus post-
acquisition changes in the consolidated entity’s share of net assets of the joint venture. Goodwill relating
to the joint venture is included in the carrying amount of the investment and is neither amortised nor
individually tested for impairment. Income earned from joint venture entities reduce the carrying amount
of the investment.
Property, plant and equipment
(i) Recognition and Measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the item.
(i) Subsequent Costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits embodied within the part will flow to the
Consolidated Entity and its costs can be measured reliably. The costs of the day-to-day servicing of property,
plant and equipment are recognised in profit or loss as incurred.
(ii) Derecognition
An item of property plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds
are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred
directly to retained profits.
(iii) Depreciation
Depreciation is calculated on a reducing balance basis so as to write off the net cost or other revalued amount
of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual
values and depreciation method is reviewed at the end of each annual reporting period.
The following rates are used in the calculation of depreciation:
• Plant and equipment
• Motor vehicles
• Office furniture and fittings
•
Computer and Office Equipment
10% - 33%
25%
10%
33%
47
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease
payments made at or before the commencement date net of any lease incentives received, any initial direct
costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these
assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's
incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend
on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an index
or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties.
When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to
profit or loss if the carrying amount of the right-of-use asset is fully written down.
Exploration and evaluation expenditure
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and
evaluation assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights
to explore an area are recognised in the profit or loss statement.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and
either:
(i)
(ii)
the expenditures are expected to be recouped through successful development and exploitation of the
area of interest, or by its sale; or
activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves.
Where a project or area of interest has been abandoned, the expenditure incurred is written off in the year
in which the decision is made.
Trade and other payables
Trade payables and other accounts payable are recognised when the Consolidated Entity becomes obliged
to make future payments resulting from the purchase of goods and services. Due to their short-term nature they
are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid
within 30 days of recognition.
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Contract liabilities
Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer
and are recognised when a customer pays consideration, or when the consolidated entity recognises a
receivable to reflect its unconditional right to consideration (whichever is earlier) before the consolidated
entity has transferred the goods or services to the customer.
Provisions
Provisions are recognised when the Consolidated Entity has a present obligation as a result of a past event, it is
probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at reporting date, taking into account the risks and uncertainties surrounding the
obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate
specific to the liability.
The increase in the provision due to the passage of time is recognised as a finance cos t.
Employee benefits
(i) Short term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected
to be settled within 12 months of the reporting date, are recognised in current other payables in respect
of employees' services up to the reporting date and are measured at the amounts expected to be paid when
the liabilities are settled.
(ii) O t h e r l o n g t e r m e m p l o y e e b e n e f i t s
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer
settlement of the liability. The liability is measured as the present value of expected future payments to be
made in respect of services provided by employees up to the reporting date using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the
reporting date on national government bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
(iii) Share-based payment transactions
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the
option, together with non-vesting conditions that do not determine whether the consolidated entity receives
the services that entitle the employees to receive payment. No account is taken of any other vesting
conditions.
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Employee benefits (cont.)
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in
equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant
date fair value of the award, the best estimate of the number of awards that are likely to vest and the
expired portion of the vesting period.
The amount recognised in profit or loss for the period is the cumulative amount calculated at each
reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by
applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms
and conditions on which the award was granted.
The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
• During the vesting period, the liability at each reporting date is the fair value of the award at that date
multiplied by the expired portion of the vesting period.
• From the end of the vesting period until settlement of the award, the liability is the full fair value of the
liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is
the cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to
market conditions are considered to vest irrespective of whether or not that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification
that increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy
the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity
or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised
over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that
the transaction will take place either: in the principal market; or in the absence of a principal market, in the
most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset
or liability, assuming they act in their economic best interest. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the
use of relevant observable inputs and minimising the use of unobservable inputs.
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Fair value measurement (cont.)
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements. Classifications are reviewed each
reporting date and transfers between levels are determined based on a reassessment of the lowest level
input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are
selected based on market knowledge and reputation. Where there is a significant change in fair value of
an asset or liability from one period to another, an analysis is undertaken, which includes a verification of
the major inputs applied in the latest valuation and a comparison, where applicable, with external sources
of data.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Consolidated Entity,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial years, adjusted for bonus elements in ordinary shares issued during the
year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
• where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the
cost of acquisition of an asset or as part of an item of expense; or
• for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component of
cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation
authority is classified as operating cash flows. Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to the tax authority.
51
4. OPERATING SEGMENTS
Identification of Reportable Operating Segments
The Consolidated Entity operates in two geographical locations, Australia, and Turkey-Europe (as
acquired through the 2014 acquisition), and is organised into one operating segment being mineral,
mining and exploration and all of the Consolidated Entity’s resources are employed for this purpose.
This operating segment is based on the internal reports that are reviewed and used by the Board of
Directors (who are identified as the Chief Operating Decision Makers (‘CODM’)) in assessing
performance and in determining the allocation of resources.
The CODM review expenditure in exploration. The accounting policies adopted for internal reporting
to the CODM are consistent with those adopted in the financial statements.
Geographical Information
Sales to external customers
2023
$
1,695,960
1,695,960
2022
$
1,118,444
1,118,444
Geographical non-current
assets
2023
$
12,569,844
2022
$
11,240,347
12,569,844
11,240,347
Australia
5. REVENUE
Other Revenue
Exploration Income - Profit on Sale of Tenement Interest
Exploration Income – JV Contributions
Other revenue
Consolidated Entity
2023
$
2022
$
5,000
1,633,425
57,535
404,477
617,139
96,828
Revenue from Continuing operations
1,695,960
1,118,444
6. OTHER OPERATING EXPENSES
Consolidated Entity
Accounting and Admin Services
Auditors Remuneration
Computer Expenses
Consulting Fee
Legal Expenses
Motor Vehicle Expense
Share Registry and Securities Exchange
Fringe Benefits Tax
Subscriptions, Publications, Memberships
Insurance
Marketing and Media
Sundry Administration Expenses
Note
7
2023
$
91,250
60,000
62,636
165,493
639,074
16,398
89,770
3,537
70,255
37,406
52,620
164,738
2022
$
91,800
46,825
48,938
54,000
257,328
11,415
82,924
118
9,424
2,834
62,002
125,276
1,453,177
792,884
52
7. AUDITOR’S REMUNERATION
During the financial year the following fees were paid or payable for services provided by PKF Perth, the
auditor of the Group:
Audit services
Auditors of the Group
Audit and review of financial report – payable to PKF Perth
Audit and review of financial report – payable to other audit firms
Total remuneration for audit services
Non-audit services
Total Audit Services
8. PROFIT/(LOSS) PER SHARE
Continuing operations
Basic profit/(loss) per share – cents
Diluted profit/(loss) per share – cents
Consolidated Entity
2023
$
60,000
-
60,000
-
60,000
2021
$
46,825
-
46,825
-
46,825
Consolidated Entity
2022
2023
(Cents)
(Cents)
(2.64)
(2.64)
0.44
0.43
Consolidated Entity
2023
$
2022
$
The profit/(loss) and weighted average number of ordinary shares
used in the calculation of basic and diluted profit/(loss) per share are
as follows:
(Loss)/Profit used in calculation of earnings per share
- continuing operations
- discontinued operations
Weighted average number of ordinary shares for the purposes of
basic profit/(loss) per share
Weighted average number of ordinary shares for the purposes of
diluted profit/(loss) per share
(9,314,093)
-
1,465,147
-
352,380,883
329,577,580
352,380,883
344,721,432
For the year ended 30 June 2023, the consolidated entity made a loss. Therefore, the options on issue are
considered anti-dilutive and diluted earnings per share is the same as basic earnings per share.
53
9. INCOME TAX EXPENSE
a)
Income Tax Expense
Current tax
Aggregate Income tax expense
Income tax expense is attributable to:
Profit from continuing operations
Profit from discontinued operations
Aggregate income tax expense
Deferred tax - origination and reversal of temporary
differences
Consolidated Entity
2023
$
2022
$
-
-
Consolidated Entity
2023
$
2022
$
-
-
-
-
-
-
-
-
-
The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income
tax expense in the financial statements as follows:
Loss before tax
9,314,093
1,465,147
Prima facie tax benefit on profit/(loss) at 25% (2021: 26%)
2,328,524
366,287
Add:
Tax effect of:
Other non-allowable items
Share based payments
Overs/unders from prior year
Tax losses not recognised
Deferred tax balances (recognised)
Income tax expense on pre-tax net profit/(loss)
23,357
184,103
(3,812)
1,239,221
885,655
-
25,696
76,399
1,217
1,180,684
(1,650,283)
-
Consolidated Entity
2022
2023
The applicable average weighted tax rates are as follows:
0%
0%
Deferred Tax Assets
At 25% (2021: 25%)
Carry forward losses
Provisions and accruals
Merger/acquisition costs
Lease liability
Right of use asset
Consolidated Entity
2023
$
2022
$
8,970,706
52,140
4,069
39,334
-
7,741,330
47,124
4,069
-
-
9,066,249
7,792,523
54
9. INCOME TAX EXPENSE (cont.)
Tax benefit of the above Deferred Tax Assets will only be obtained if:
a) The company derives future assessable income or a nature and of an amount sufficient to enable
the benefits to be utilised; and
b) The company continues to comply with the conditions for deductibility imposed by law; and
c) No changes in income tax legislation adversely affect the company in utilising the benefits.
Deferred Tax Liabilities
At 25% (2021: 25%)
Exploration expenditure
Capital raising costs
Property, plant and equipment
Financial asset
Prepayments
Consolidated Entity
2023
$
2022
$
2,911,985
-
13,180
320,015
-
2,605,815
34,591
4,089
1,429,930
5,313
3,245,180
4,079,738
The above Deferred Tax Liabilities have not been recognised as they have given rise to the carry forward
revenue losses for which the Deferred Tax Asset has not been recognised.
10. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Deposits at call
Consolidated Entity
2023
$
1,256,094
1,001,000
2022
$
7,905,087
1,000
2,257,094
7,906,087
a) Reconciliation to cash and cash equivalents at the end of the
year.
The above figures are reconciled to cash and cash
equivalents at the end of the financial year, as shown in the
Statement of Cash Flows, as follows:
Balances as above
Cash and cash equivalents in statement of cash flows
2,257,094
2,257,094
7,906,087
7,906,087
The Group’s exposure to interest rate risk and sensitivity analysis for financial assets and liabilities are
disclosed in note 21.
11. INTEREST IN ASSOCIATE
The consolidated entity has a 26.65% (30 June 2022: 22.5%) interest in Oxley Resources Limited. The
consolidated entity’s investment in Oxley Resources Limited is accounted for using the equity method in
the consolidated financial statements.
Summarised statement of financial position of Oxley Resources Limited.
55
11. INTEREST IN ASSOCIATE (cont.)
Cash and cash equivalents
Trade and other receivables
Exploration and evaluation expenditure
Non-current assets
Trade and other payables
Net assets/ equity
Zenith’s 26.65% share (30 June 2022: 22.5%)
Impairment recognised
Zenith’s carrying account of investment in Oxley Resources Limited
Summarised statement of profit or loss of Oxley Resources Limited
Administration Costs
Loss for the period
Zenith’s 26.65% share
Movement Reconciliation
Balance at beginning of financial year
Payments for investment
Share of loss recognised
Impairment
Balance at end of financial year
12. TRADE AND OTHER RECEIVABLES
Current
Trade receivables (i)
GST receivable
Other receivables
Provision for impairment
Consolidated Entity
2022
2023
$
$
240,844
25,499
494,430
-
(194,169)
63,230
45,459
610,810
-
(35,561)
683,938
566,604
Consolidated Entity
2023
$
2022
$
182,265
-
182,265
(21,272)
(21,272)
(5,669)
127,710
150,000
(5,669)
(89,776)
182,265
127,710
-
127,710
-
-
-
-
231,694
10,437
(114,421)
127,710
Consolidated Entity
2023
$
2022
$
1,581,582
120,430
-
(1,581,912)
70,900
98,729
2,001
-
120,100
171,630
(i) The Consolidated Entity has recognised a provision for the impairment of the receivable from its joint venture
partner EVM Metals Group PLC due to uncertainty on the recoverability of the receivable. Management
continues to seek repayment of these JV contributions under the terms of the JV agreement.
56
13. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
Current
Listed ordinary shares – at fair value
through profit and loss.
Reconciliation
Reconciliation of the fair values at the beginning and end of the
current and previous financial years.
Opening fair value
Additions
Disposals
Realised loss on financial assets sold
Unrealized change in fair value
Closing fair value
14. OTHER CURRENT ASSETS
Bonds & deposits
Prepayments
15. PLANT AND EQUIPMENT
Plant and equipment – at cost
Less: Accumulated depreciation
Motor vehicles – at cost
Less: Accumulated depreciation
Computer equipment and software – at cost
Less: Accumulated depreciation
Consolidated Entity
2023
$
2022
$
4,318,584
7,467,583
7,467,583
-
(583,579)
(145,181)
(2,420,239)
4,318,584
4,636,593
394,416
-
-
2,436,574
7,467,583
Consolidated Entity
2023
$
2022
$
32,010
-
32,010
17,010
21,250
38,260
Consolidated Entity
2022
2023
$
$
26,248
(25,309)
939
139,570
(104,359)
35,211
54,194
(37,622)
16,572
25,822
(24,843)
979
99,570
(92,242)
7,328
36,211
(28,162)
8,049
Carrying Amount
52,722
16,356
57
15. PLANT AND EQUIPMENT (cont)
a) Movement Reconciliation
Cost
Balance at 1 July 2021
Additions
Disposals/Write-off
Balance at 30 June 2022
Balance at 1 July 2022
Additions
Disposals/Write-off
Balance at 30 June 2023
Depreciation
Balance at 1 July 2021
Depreciation for the year
Depreciation on asset write off
Balance at 30 June 2022
Balance at 1 July 2022
Depreciation for the year
Depreciation on asset write off
Balance at 30 June 2023
Carrying Amount
At 30 June 2022
At 30 June 2023
Plant &
Equipment
Motor
Vehicles
$
$
Computer
Equipment
& Software
$
25,822
-
-
25,822
25,822
426
-
26,248
24,354
489
-
24,843
24,843
466
-
25,309
99,570
-
-
99,570
99,570
40,000
-
139,570
89,597
2,646
-
92,243
92,243
12,116
-
104,359
34,348
1,863
-
36,211
36,211
17,983
-
54,194
24,955
3,206
-
28,161
28,161
9,461
-
37,622
Total
$
159,740
1,863
-
161,603
161,603
58,409
-
220,012
138,906
6,341
-
145,247
145,247
22,043
-
167,290
979
939
7,328
35,211
8,049
16,572
16,356
52,722
16. EXPLORATION AND EVALUATION EXPENDITURE
Balance at beginning of financial year
Acquisition of Hayes Hill option
Acquisition of Yilmia option
Capitalised expenditure
Less capitalised expenditure written against proceeds
Exploration expenditure impaired
Exploration expenditure written off
Balance at end of financial year
Exploration and Evaluation Assets
Consolidated Entity
2022
$
2023
$
11,096,281
250,000
200,000
6,714,651
-
-
4,004,717
4,728,608
-
-
(3,616,141)
12,334,857
(188,841)
(158,137)
-
11,096,281
The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the
successful development and commercial exploitation or sale of the respective area of interest as well
as maintaining rights of tenure.
During the financial year, the consolidated entity impaired and wrote off capitalised exploration and
evaluation expenditure of $3,616,141 (2022: $158,137) following its review of its portfolio of mineral
tenements, whereby decisions have been made for certain areas of interest, not to incur substantial
expenditure on further exploration for and evaluation of mineral resources.
58
17. TRADE AND OTHER PAYABLES
Current
Trade payables (a)
Accrued fees and employment expenses (b)
Terms and Conditions
Consolidated Entity
2022
2023
$
$
551,213
171,898
723,111
79,145
77,306
156,451
Terms and conditions relating to the above financial instruments
a) Trade payables are non-interest bearing and are normally settled on 30 day terms.
b) Sundry creditors and accruals are non-interest bearing and have an average term of 30 days.
18. EMPLOYEE BENEFITS
Current liabilities
Employee benefits
19. ISSUED CAPITAL
(a) Share capital
Fully paid ordinary shares
Balance at beginning of year
Consolidated Entity
2022
2023
$
$
158,422
158,422
147,355
147,355
2023
Shares
No.
2023
$
2022
Shares
No.
2022
$
344,762,279
38,780,371
294,360,030
26,543,450
Issue of ordinary shares (i)
Exercise of options (ii)
1,066,305
6,552,299
200,000
1,047,972
47,906,977
2,495,272
12,000,000
602,407
Costs of issue
-
-
-
(365,486)
Total
2023
352,380,883
40,028,343
344,762,279
38,780,371
During the year to 30 June 2023, the following changes to equity securities took place:
(i) On 19 January 2023 the Company issued 391,466 shares at $0.255 per share as part consideration for
the acquisition of the Hayes Hill Lithium Nickel Project.
On 22 May 2023 the Company issued 674,839 shares at $0.148 per share as part consideration for the
acquisition of the Yilmia Project.
(ii) 6,552,299 shares were issued on exercise of 8,400,000 options under the Employee Option Plan (note
25).
(b) Ordinary Shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share at meetings of the Group. All shares rank equally with regard to the Group’s residual
assets. Ordinary shares do not have a par value.
59
19. ISSUED CAPITAL (cont)
(c) Options
Shares Under Option
13,750,000 Unissued ordinary shares of Zenith Minerals Limited under option at the date of this report
are as follows:
Issued date
Expiry date
16 July 2021
13 July 2020
13 July 2020
14 July 2024
31 December 2023
31 December 2023
6 December 2022
7 February 2025
26 May 2023
26 May 2023
26 May 2026
26 May 2027
Exercise
Price
$0.379
$0.14
$0.16
$0.39
$0.248
$0.248
Number under
option
750,000
2,000,000
2,000,000
7,000,000
1,000,000
1,000,000
No option holder has any right under the options to participate in any other share issue of the Group.
Information relating to Zenith Minerals Limited’s Employee Option Plan, including details of options issued,
exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set
out in Note 25.
(d) There is no current on market share buy-back.
20. RESERVES AND RETAINED LOSSES
(a) Reserves
Options reserve
Balance at beginning of financial year
Issue of Staff Options
Exercise of options
Balance at end of financial year
Foreign Currency Translation Reserve
Balance at beginning of financial year
Foreign currency translation
Balance at end of financial year
Consolidated Entity
2022
2023
$
$
890,256
736,411
(774,292)
852,375
(185,483)
-
(185,483)
1,053,133
118,768
(281,645)
890,256
(185,483)
-
(185,483)
Total Reserves
666,892
704,773
(b) Accumulated losses
Movements in accumulated losses were as follows:
Balance at beginning of financial year
Profit for the year
Balance at end of financial year
Options Reserve
(12,965,043)
(9,314,093)
(14,430,190)
1,465,147
(22,279,136)
(12,965,043)
The options reserve is used to recognise the benefit on the issue of options.
60
21. FINANCIAL INSTRUMENTS (cont.)
Foreign Currency Reserve
The reserve is used to recognise exchange differences arising from the translation of the financial
statements of foreign operations to Australian dollars.
Overview
The Consolidated Entity has exposure to the following risks from their use of financial instruments:
• Credit risk
Liquidity risk
•
• Market risk
This note presents information about the Consolidated Entity’s exposure to each of the above risks, their
objectives, policies and processes for measuring and managing risk and the management of capital.
The Consolidated Entity does not use any form of derivatives as it is not at a level of exposure that requires
the use of derivatives to hedge its exposure. Exposure limits are reviewed by management on a continuous
basis. The Consolidated Entity does not enter into or trade financial instruments, including derivative
financial instruments, for speculative purposes.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. Management monitors and manages the financial risks relating to the operations of the
Consolidated Entity through regular reviews of the risks identified.
Credit Risk
Credit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Consolidated Entity’s
receivables from customers and investment securities. For the Consolidated Entity, it arises from receivables
due from director-related parties. At the reporting date there were no significant concentrations of credit risk.
The consolidated entity does not hold any collateral.
Cash and Cash Equivalents
The Consolidated Entity limits its exposure to credit risk by only investing in liquid securities and only with
counter parties that have an acceptable credit rating.
Trade and Other Receivables
As the Consolidated Entity operates in the mining explorer sector, it does not have trade receivables and
therefore is not exposed to credit risk in relation to trade receivables.
Exposure to Credit Risk
The carrying amount of the Consolidated Entity’s financial assets represents the maximum credit exposure.
The Consolidated Entity’s maximum exposure to credit risk at the reporting date was:
Trade and other receivables
Trade receivables - Provision for impairment
Consolidated Entity
2022
2023
$
$
171,630
-
1,702,012
(1,581,912)
120,100
171,630
61
21. FINANCIAL INSTRUMENTS (cont.)
Exposure to Credit Risk (cont.)
The ageing of trade receivables included in trade and other receivables and allowance for expected credit
losses provided for above are as follows:
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Impairment Losses
Carrying amount
2022
2023
$
$
Allowance for expected
credit losses
2023
$
2022
$
211,329
31,304
403,039
941,132
1,586,804
-
-
-
-
-
211,329
31,304
403,039
941,132
1,586,804
-
-
-
-
-
The Consolidated Entity has recognised a provision for the impairment of the receivable from its joint venture
partner EVM Metals Group PLC due to uncertainty on the recoverability of the receivable. Management
continues to seek repayment of these JV contributions under the terms of the JV agreement.
The allowance accounts in respect of financial assets are used to record impairment losses unless the
Consolidated Entity is satisfied that no recovery of the amount owing is possible, at that point the amount is
considered irrecoverable and is written off against the financial asset directly.
Guarantees
The Consolidated Entity’s policy is to not provide financial guarantees. No guarantees have been
provided during the year.
Liquidity Risk
Liquidity risk is the risk that the Consolidated Entity will not be able to meet its financial obligations as they
fall due. The Consolidated Entity’s approach to managing liquidity is to ensure, as far as possible, that it
will always have sufficient liquidity (mainly cash and cash equivalents) to meet its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Consolidated Entity’s reputation. The Consolidated Entity manages liquidity risk by maintaining
adequate reserves by continuously monitoring forecast and actual cash flows. The Consolidated
Entity does not have any external borrowings.
The following are the contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements. The cashflows in the maturity analysis
below are not expected to occur significantly earlier than contractually disclosed above.
Non-derivatives
Consolidated Entity – 30 June 2023
Weighted
Average Interest
Rate
Non-interest bearing
Trade and other
payables*
Interest bearing
Lease liability
Contractual
cash flows
1 year
or less
1 to 2
years
2 to 5
years
Over 5
years
-
-
723,111
723,111
-
-
-
-
-
-
-
-
* The weighted average interest rate on other payables is Nil% as it is non-interest bearing.
62
21. FINANCIAL INSTRUMENTS (cont.)
Consolidated Entity - 30 June 2022
Weighted
Average Interest
Rate
Non-derivative
Non Interest
Bearing
Non-interest bearing
Trade and other
payables*
Interest bearing
Lease liability
-
-
Contractual
cash flows
1 year
or less
1 to 2
years
2 to 5
years
Over 5
years
156,451
156,451
-
-
-
-
-
*The weighted average interest rate on other payables is Nil% as it is non interest bearing.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Consolidated Entity’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
Currency Risk
The Consolidated Entity is exposed to foreign currency risk through foreign exchange rate
fluctuations when it enters into certain transactions denominated in foreign currency. Foreign
exchange risk arises from future commercial transactions and recognised financial assets and
financial liabilities denominated in a currency that is not the entity’s functional currency. The risk is
measured using sensitivity analysis and cash flow forecasting.
Currency Risk
At 30 June, the carrying amount of the Consolidated Entity’s financial assets denominated in foreign
currencies as detailed below.
Financial Assets
Cash and cash equivalents denominated in US dollars
Consolidated Entity
2023
$
2022
$
-
-
A 5% movement in foreign exchange rates would increase or decrease the loss before tax by $Nil
(2022: $Nil).
Interest Rate Risk
The Consolidated Entity is exposed to interest rate risk, however to maintain liquidity, cash is invested for
periods generally not exceeding 90 Days.
Cash Flow Sensitivity Analysis for Variable Rate Instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased)
equity and profit or loss by the amounts shown below. The analysis is performed on the same basis as
for 2022.
2023
Profit or Loss
2022
Profit or Loss
100 bp
Increase
$
1,012
100 bp
Decrease
$
(1,012)
100 bp
Increase
$
100 bp
Decrease
$
100
(100)
Cash & cash equivalents
63
21. FINANCIAL INSTRUMENTS (cont.)
Fair Values
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Fair Value Hierarchy
The table below details the consolidated entity’s assets and liabilities, measured or disclosed at fair value,
using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair value
measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly
Level 3: Unobservable inputs for the asset or liability.
Consolidated –
30 June 2023
Level 1
$
Level 2
$
Level 3
$
Total
$
Assets
Financial assets at fair value
through profit or loss
Total Assets
4,318,584
4,318,584
Consolidated –
30 June 2022
Level 1
$
Level 2
$
Assets
Financial assets at fair value
through profit or loss
Total Assets
7,467,583
7,467,583
There were no transfers between levels during the financial year.
-
-
-
-
-
-
-
-
4,318,584
4,318,584
Total
$
7,467,583
7,467,583
Level 3
$
The carrying amounts of other receivables, trade and other payables are assumed to approximate their fair
values due to their short-term nature.
Valuation techniques for fair value measurements categorised within level 2:
Unquoted investments have been valued using their share of the net asset value.
Capital Management
The Consolidated Entity’s objectives when managing capital is to safeguard the Consolidated Entity’s
ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future
exploration and development of its projects.
In order to maintain or adjust the capital structure, the Consolidated Entity may return capital to
shareholders, issue new shares or sell assets for in-specie distributions. The Consolidated Entity’s focus
has been to raise sufficient funds through equity to fund exploration and evaluation activities.
The Consolidated Entity monitors capital on the basis of the gearing ratio, however there are no external
borrowings as at reporting date. The Consolidated Entity encourages employees to be shareholders
through the issue of free options to employees.
64
21. FINANCIAL INSTRUMENTS (cont.)
Capital Management (cont.)
There were no changes in the Consolidated Entity’s approach to capital management during the financial
year. The Consolidated Entity is not subject to any externally imposed capital requirements.
22. EXPLORATION COMMITMENTS
The Consolidated Entity has certain obligations to perform minimum exploration work and expend
minimum amounts on works on mining tenements in order to retain its interests in these tenements,
which would be approximately $609,235 during the next 12 months (2022: $629,478). There are
no commitments beyond 12 months in relation to tenements. These obligations may be varied
from time to time, subject to approval and are expected to be fulfilled in the normal course of
operations of the entity.
23. KEY MANAGEMENT PERSONNEL DISCLOSURES
Key Management Personnel Compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated Entity
2022
$
2023
$
667,671
41,997
736,411
1,446,079
646,186
46,668
19,084
711,938
Information regarding key management personnel compensation is provided in the Remuneration
Report section of the Directors Report.
24. RELATED PARTY TRANSACTIONS
(a) Parent Entity and Ultimate Controlling Parent
Zenith Minerals Limited is the parent entity and ultimate controlling entity of the Group.
(b) Subsidiaries
Interests in subsidiaries are set out in Note 28.
(c) Key Management Personnel
Disclosures relating to key management personnel are set out in Note 23.
(d) Transactions with Related Parties
There were no transactions with related parties other than those set out in Note 23.
(e) Outstanding balances arising from transactions with related parties
The following balances arising from transactions with related parties are outstanding as at 30 June
2023:
Current receivables:
Trade and other receivables
Current payables:
Accrued fees and employment expenses
Consolidated Entity
2023
$
2022
$
-
-
18,232
51,105
(f) There were no loans to or from related parties at the current and previous reporting date.
All transactions were made on normal commercial terms and conditions and at market rates.
65
25. SHARE BASED PAYMENTS
Employee Option Plan
The establishment of the Zenith Minerals Limited's Employee Option Plan was approved by Directors
resolution dated 27 February 2007. A current version of the Zenith Minerals Limited's Employee Option
Plan was approved by shareholders at the Annual General Meeting held on 24th November 2016 and three
years later on 20th November 2019.
The Board may offer free options to persons ("Eligible Persons") who are:
i)
full time, part time or casual employees, a contractor or an associated body corporate of the Company
who have accepted a written offer of engagement; or
ii) Directors of the company or any subsidiary based on a number of criteria including contribution to the
Consolidated Entity, period of employment, potential contribution to the Consolidated Entity in the future
and other factors the Board considers relevant.
Options granted under the plan carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share, in any event no later than thirty days,
after the receipt of a properly executed notice of exercise and application monies. The Consolidated Entity
will issue to the option holder, the number of shares specified in that notice. The Consolidated Entity will
apply for official quotation of all shares issued and allotted pursuant to the exercise of the options.
Options may not be transferred other than to an associate of the holder.
Set out below is the summary of options granted under the plan:
66
25. SHARE BASED PAYMENTS (cont.)
Employee Option Plan (cont.)
2023:
Grant Date
Expiry Date Exercise
Price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Number
Number
Number
Expired or
Forfeited
during the
year
Number
Balance at
end of the
year
Exercisable
at end of
the year
Number
Number
01 Dec 2020 14 May 2023
$0.1097 4,500,000
- (4,500,000)
14 May 2020 14 May 2023
$0.1097
650,000
-
(650,000)
25 Nov 2019 24 Nov 2022
$0.087
3,250,000
- (3,250,000)
16 Jul 2021
14 Jul 2024
$0.3790
750,000
6 Dec 2022
7 Feb 2025
$0.390
6 Dec 2022
5 May 2025
$0.592
26 May 2023 23 May 2026
$0.211
26 May 2023 23 May 2027
$0.248
-
-
-
-
7,000,000
1,000,000
1,000,000
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
750,000
7,000,000
7,000,000
(1,000,000)
-
-
-
-
-
-
1,000,000
500,000
1,000,000
500,000
9,150,000 10,000,000 (8,400,000) (1,000,000)
9,750,000
8,750,000
2022:
Grant Date
Expiry Date Exercise
Price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Number
Number
Number
Expired or
Forfeited
during the
year
Number
01 Dec 2020 14 May 2023
$0.1097 5,750,000
- (1,250,000)
14 May 2020 14 May 2023
$0.1097 1,200,000
25 Nov 2019 24 Nov 2022
$0.087
3,900,000
28 Sep 2018 28 Sep 2021
$0.18
1,650,000
-
-
-
(550,000)
(650,000)
Balance at
end of the
year
Exercisable
at end of
the year
Number
Number
4,500,000
4,500,000
650,000
650,000
3,250,000
3,250,000
-
-
-
- (1,650,000)
-
-
16 Jul 2021
14 Jul 2024
$0.379
-
750,000
-
-
750,000
750,000
12,500,000
750,000 (2,450,000) (1,650,000)
9,150,000
9,150,000
Zenith Minerals Limited
Outstanding at the beginning of the period
Exercised during the period
Granted during the period
Forfeited during the period
Lapsed during the period
Outstanding at end of the period
Exercisable at the end of the period
Weighted
average
exercise
price
Number of
Options
Weighted
average
exercise
Price
Number of
options
2023
2023
2022
2022
$0.12
$0.17
$0.38
9,250,000
(9,400,000)
10,000,000
$0.592
(1,000,000)
-
-
$0.36
$0.41
9,750,000
8,750,000
$0.11
12,550,000
$0.13
$0.38
(4,050,000)
750,000
-
-
$0.12
$0.12
-
-
9,250,000
9,250,000
67
25. SHARE BASED PAYMENTS (cont.)
Employee Option Plan (cont.)
For the options granted during the 2023 financial year, the valuation model inputs used in the Black-
Scholes Model to determine the fair value at the grant date, are as follows:
2023:
Grant date
Expiry date
6 Dec 2022
26 May 2023
26 May 2023
5 May 2023
26 May 2026
26 May 2027
2022:
Grant date
Expiry date
16 Jul 2021
14 Jul 2024
Share
price
at
grant
date
$0.285
$0.135
$0.135
Share
price at
grant
date
$0.26
Exercise
price
Expecte
d
volatility
Dividend
yield
$0.390
$0.211
$0.248
74%
62%
62%
-
-
-
Exercise
price
Expected
volatility
Dividend
yield
$0.3790
113.00%
-
Risk-
free
interest
rate
3.24%
3.24%
3.24%
Risk-
free
interest
rate
0.25%
Fair value
at grant
date
$0.0990
$0.0416
$0.0457
Fair value
at grant
date
$0.158358
The expected price volatility is based on the historical volatility (based on the remaining life of the
options), adjusted for any expected changes to future volatility due to public available information.
Total expense recognised as share-based payments for the 2023 financial year was $736,411 (2022:
$305,594).
The weighted average remaining contractual life of share options outstanding at the end of the year was
2.3 years (2022: 0.8 years).
The weighted average exercise price during the financial year was $0.12 (2022: $0.12).
26. RECONCILIATION OF PROFIT/(LOSS) BEFORE INCOME TAX EXPENSE TO NET
CASH USED IN OPERATING ACTIVITIES
(Loss)/ Profit for the year
Add:
Non-cash items
Share of losses and impairment of Associate accounted for using
equity method
Net fair value (gain)/loss on other financial assets
Depreciation and amortisation
Share based payment
Profit on sale of tenements
Changes in operating liabilities:
Decrease/(Increase) in trade and other receivables and other current
assets
Decrease/(Increase) in exploration expenditure capitalised
Increase/(Decrease) in trade and other payables
Increase/(Decrease) in provisions
Net cash (used in) operating activities
Consolidated Entity
2022
2023
$
$
(9,314,093)
1,465,147
95,441
2,565,420
22,043
736,411
-
-
(2,436,574)
9,314
305,594
(404,477)
57,780
(1,038,631)
566,718
11,067
(6,297,844)
(92,565)
(4,464,185)
(49,181)
17,465
(5,649,462)
(a) Non-cash investing and financing activities.
During 2023, there were no non-cash investing and financing activities to disclose other than those in Note 29.
68
27. SUBSEQUENT EVENTS
On 28 August 2023, the Company announced that a legally Binding Term Sheet has been executed with
QMines Limited (ASX:QML) for the sale of the Develin Creek Copper-Zinc Project in Queensland, for up to
$4.5M in cash and shares, plus additional work commitments (refer to ASX announcement dated 28 August
2023). The Company has since received an up-front payment of $1.2M cash and $1M worth of QML shares
for an initial 51% interest of the Develin Creek Copper-Zinc Project.
No other matter or material event has arisen since 30 June 2023, which has significantly affected or may
significantly affect the Consolidated Entity’s operations, the results of those operations, or the Consolidated
Entity’s future state of affairs.
2 8 . S U B S I D I A R I E S
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly
owned subsidiaries in accordance with the accounting policy described in note 3.
Name
Nanutarra Minerals Pty Ltd
Earaheedy Minerals Pty Ltd
Mackerel Metals Ltd (formerly S2M2
Coal Pty Ltd)
Mackerel Copper Pty Ltd (formerly
Kalicoal Pty Ltd)
MKM Gold (WA) Pty Ltd
MKM Gold (QLD) Pty Ltd
Mamucoal Pty Ltd
S2M2 Eastern Coal Pty Ltd
Black Dragon Energy (Aus) Pty Ltd
Zacatecas Minerals Pty Ltd
Fossil Prospecting Pty Ltd
Caldera Metals Pty Ltd
Lighthouse Min Pty Ltd
Reel Min Pty Ltd
Lifeboat Min Pty Ltd
Principal place of
business/country of
incorporation
Australia
Australia
Ownership interest
2023
%
100%
100%
2022
%
100%
100%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
The Consolidated Entity is incorporated in Australia and its principal activity is exploration.
29. PARENT ENTITY DISCLOSURES
As at and throughout the financial year ended 30 June 2023, the parent entity of the Group was Zenith
Minerals Limited.
Result of Parent Entity:
Profit (loss) for the period
Other comprehensive income (loss)
Total Comprehensive Income (loss) for the period
2023
$
(9,043,333)
-
(9,043,333)
2022
$
1,216,770
-
1,216,770
69
29. PARENT ENTITY DISCLOSURES (cont.)
Financial Position of Parent Entity at Year End:
Current assets
Total Assets
Current liabilities
Total Liabilities
Total Equity of the Parent Entity Comprising of:
Share capital
Reserves
Retained earnings/(losses)
2023
$
2022
$
6,896,840
15,579,991
18,416,099
25,754,412
798,727
798,727
303,798
303,798
40,028,343
852,375
(23,263,346)
38,780,371
890,256
(14,220,013)
17,617,372
25,450,614
The Parent Entity has no guarantees at 30 June 2023 (2022: Nil)
Contingent Assets and Liabilities
There are no contingent assets and liabilities at reporting date (2022: Nil) other than what is disclosed in
Note 31.
30. DIVIDENDS
No dividends have been paid or provided for.
31. CONTINGENT ASSETS AND LIABILITIES
There are no contingent assets and liabilities at reporting date (2022: Nil).
The Consolidated Entity has recognised a provision for the impairment of the receivable from its joint venture
partner EVM Metals Group PLC due to uncertainty on the recoverability of the receivable. Management
continues to seek repayment of these JV contributions under the terms of the JV agreement.
70
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Zenith Minerals Limited:
(a)
the Financial Statements and notes thereto, are in accordance with the Corporations Act 2001,
including:
i) giving a true and fair view of the Consolidated Entity's financial position as at 30 June 2023 and
Remuneration Report marked as audited, and its performance for the financial year ended on
that date; and
ii) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements;
(b)
(c)
the Financial Report also complies with International Financial Reporting Standards as issued
by the International Accounting Standards Board as disclosed in note 2(a);
there are reasonable grounds to believe that the Company and the Consolidated Entity will be able
to pay its debts as and when they become due and payable.
2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to s.295(5)(a) of the Corporations Act
2001.
On behalf of the Directors
David J E Ledger
Executive Chairman
Dated: 28 September 2023
PERTH, WA
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PKF Perth
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ZENITH MINERALS LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Zenith Minerals Limited (the company), which comprises
the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss
and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies
and other explanatory information, and the directors’ declaration of the company and the consolidated entity
comprising the company and the entities it controlled at the year’s end or from time to time during the financial
year.
In our opinion the accompanying financial report of Zenith Minerals Limited is in accordance with the
Corporations Act 2001, including:
i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2023 and of its
performance for the year ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity 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.
Key Audit Matter
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 year. 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 audit opinion
on these matters. For each matter below, our description of how our audit addressed this matter are provided in
that context.
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of
any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
72
PKF Perth
1. Valuation of Capitalised Exploration Expenditure
Why significant
How our audit addressed the key audit matter
and
As at 30 June 2023 the carrying value of
exploration
assets was
$12,334,857 (2022: $11,096,281), as disclosed in
Note 16. This represents 64% (2022: 41%) of
total assets of the consolidated entity.
evaluation
The consolidated entity’s accounting policies in
respect of:
•
•
its use of estimates and judgements in
exploration and evaluation expenditure is
outlined in Note 2 (d) and;
recognition of exploration and evaluation
expenditure is outline in Note 3.
Significant judgement is required:
•
•
facts
determining whether
and
in
circumstances indicate that the exploration
and evaluation assets should be tested for
impairment in accordance with Australian
Accounting Standard AASB 6 Exploration for
and Evaluation of Mineral Resources (“AASB
6”); and
in determining the treatment of exploration
and evaluation expenditure in accordance
with AASB 6, and the consolidated entity’s
accounting policy. In particular:
o whether the particular areas of interest
meet the recognition conditions for an
asset; and
o which elements of exploration and
evaluation
for
expenditures
capitalisation for each area of interest.
qualify
Our work included, but was not limited to, the
following procedures:
• conducting a detailed review of management’s
trigger events
impairment
assessment of
prepared in accordance with AASB 6 including:
o assessing whether the rights to tenure of
the areas of interest remained current at
reporting date as well as confirming that
rights
to be
renewed for tenements that will expire in
the near future;
tenure are expected
to
o holding discussions with the directors and
management as to the status of ongoing
exploration programmes for the areas of
interest, as well as assessing if there was
evidence that a decision had been made to
discontinue activities in any specific areas
of interest; and
o obtaining and assessing evidence of the
consolidated entity’s future intention for the
areas of interest, including reviewing future
budgeted expenditure and related work
programmes.
• considering whether exploration activities for the
areas of interest had reached a stage where a
reasonable
economically
recoverable reserves existed;
assessment
of
•
testing, on a sample basis, exploration and
evaluation expenditure incurred during the year
the
for compliance with AASB 6 and
consolidated entity’s accounting policy; and
• reviewing the impairment calculations provided
and related assumptions and disclosures in
Note 3 and 16 for accuracy and completeness.
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PKF Perth
2. Going concern basis of accounting
Why significant
How our audit addressed the key audit matter
For the year ended 30 June 2023, the Consolidated
Entity incurred a loss of $9,314,093 (2022: profit of
$1,465,147), and experienced a cash out flows of
$6,297,844
(2022: $5,649,462) on operating
activities. As at 30 June 2023, the Consolidated
Entity had cash & cash equivalent of $2,257,094
(2022: $7,906,087).
The Consolidated Entity is engaged in mineral
exploration and has no revenue generating activity
as yet. The consolidated entity has also disclosed in
note 1(e) the going concern basis of accounting.
We evaluated the consolidated entity’s funding and
liquidity position at 30 June 2023 and the ability of the
consolidated entity to repay its debts as and when
they fall due for a minimum of 12 months from the
date of signing the financial report.
In order to assess the funding and liquidity position,
we:
•
•
the
reviewed
to
process
determine the appropriateness of the use of the
going concern basis;
undertaken
reviewed the funding plan for the consolidated
entity to achieve its future operational and
program development needs; and
3. Share based payments
Why significant
How our audit addressed the key audit matter
For the year ended 30 June 2023 the value of
share based payments totalled $736,411, (2022:
$305,594) as disclosed in Note 25.
The consolidated entity’s accounting judgement
and estimates in respect of share-based payments
is outlined in Note 2(d). We consider this to be a
key audit matter due to significant judgement
required in relation to:
• The valuation method used in the model;
and
• The assumptions and inputs used within
the model.
Our work included, but was not limited to, the
following procedures:
• Reviewed the valuations of options issued,
including:
o assessing
the appropriateness of
the
o assessing
valuation method used; and
the
the
assumptions and inputs used within the
valuation model.
reasonableness of
• Reviewed Board meeting minutes and ASX
announcements as well as enquired of relevant
personnel to ensure all share-based payments
had been recognised;
• Assessed
the allocation and recognition
to
ensure reasonable; and
• Assessed the appropriateness of the related
disclosures in Note 25.
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PKF Perth
Other Information
Those charged with governance are responsible for the other information. The other information comprises the
information included in the consolidated entity’s annual report for the year ended 30 June 2023, 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, with the exception of the Remuneration Report.
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 Directors’ for the Financial Report
The Directors of the company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the consolidated entity 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 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 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
consolidated entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Directors.
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PKF Perth
• 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 consolidated entity’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 consolidated entity 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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the group financial report. We are
responsible for the direction, supervision and performance of the group audit. We remain solely responsible
for our audit opinion.
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
We have audited the Remuneration Report included in the Directors’ Report for the year ended 30 June 2023.
In our opinion, the Remuneration Report of Zenith Minerals Limited for the year ended 30 June 2023 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
PKF PERTH
SIMON FERMANIS
AUDIT PARTNER
28 SEPTEMBER 2023
WEST PERTH, WESTERN AUSTRALIA
76
CORPORATE GOVERNANCE STATEMENT
Zenith Minerals Limited and its subsidiaries (‘Group’) Corporate Governance Statement outlines the main
corporate governance practices of Zenith Minerals Limited and its subsidiaries (‘Group’) in place throughout the
financial year ended 30 June 2023, which comply with the 3rd Edition of the Australian Securities Exchange
(‘ASX’) Corporate Governance Principles and Recommendations of the ASX Corporate Governance
Council, unless otherwise stated.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2023 is current as at 28
September 2023 and has been approved by the Board of Directors of Zenith Minerals Limited.
The Corporate Governance Statement
https://www.zenithminerals.com.au/corporate/corporate-governance-policies/ .
is available on
the Zenith Minerals Limited website at
The company’s ASX Appendix 4G, which is a checklist that cross-references the ASX Principles and
Recommendations to the relevant disclosures in either this statement, the Annual Report or the company website,
is contained on the website at www.zenithminerals.com.au.
77
ADDITIONAL SHAREHOLDERS INFORMATION
In Compliance with ASX Requirements
The shareholder information set out below was applicable as at 19 September 2023.
1.
DISTRIBUTION OF EQUITY SECURITIES
a) Analysis of numbers of shareholders by size of holding – ordinary fully paid shares (ZNC)
Holding Ranges
Holders
Total Units
% Issued Share Capital
0 up to and including 1,000
1,000 up to and including 5,000
5,000 up to and including 10,000
10,000 up to and including 100,000
> 100,000
Totals
464
732
354
925
316
159,040
1,926,932
2,866,855
33,091,196
314,336,860
2,791
352,380,883
0.05%
0.55%
0.81%
9.39%
89.20%
100.00%
b) Number of shareholders holding less than a marketable parcel – 1,219 (at 19 September 2023).
2.
PARTICULARS OF TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of quoted shares are listed below:
Shareholder Shares Issued
1 BNP PARIBAS NOMS PTY LTD
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3 CITICORP NOMINEES PTY LIMITED
4 MS NADA GRANICH
5
6
FIRST TRUSTEE COMPANY (NZ) LIMITED
ABINGDON NOMINEES PTY LTD
7 MS SUZI QUELI MIQUILINI
8 BREAMLEA PTY LTD
9 GREENHILL ROAD INVESTMENTS PTY LTD
10
BNP PARIBAS NOMINEES PTY LTD
11 GDR PTY LTD
12 BREAMLEA PTY LTD
13
MRS PAULINE TILBROOK & MR JOHN BEVAN TILBROOK & MR
JOHN EDWIN TILBROOK
14 MR JOHN BEVAN TILBROOK
15 TINTERN (VIC) PTY LTD
16 EV METALS GROUP PLC
17 STRUVEN NOMINEES PTY LTD
18 YANDAL INVESTMENTS PTY LTD
19 GREY WILLOW PTY LTD
20
MR JOHN BEVAN TILBROOK & MRS PAULINE TILBROOK & MR
JOHN EDWIN TILBROOK
TOTAL FOR TOP 20:
Fully Paid Ordinary
Shares
Number held % of total
30,458,366
26,266,815
21,958,917
8,883,404
8.64%
7.45%
6.23%
2.52%
8,000,000
2.27%
7,446,353
2.11%
7,433,446
6,826,364
6,141,406
2.11%
1.94%
1.74%
5,977,621
1.70%
5,000,000
4,790,091
1.42%
1.36%
4,550,000
1.29%
4,050,000
3,828,228
3,654,677
3,647,834
3,588,417
3,450,000
1.15%
1.09%
1.04%
1.04%
1.02%
0.98%
3,450,000
0.98%
172,628,056
48.99%
78
ADDITIONAL SHAREHOLDERS INFORMATION (cont.)
3 . V O T I N G R I G H T S
Ordinary Shares: At general meetings of the Company, each member entitled to vote may vote in person
or by proxy or attorney or representative. On a show of hands every person who is a member or a
representative of a member has one vote, and on a poll every person present in person or by proxy or
attorney has one vote for each share held.
Options: No voting rights
4.
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders in the Company are:
Ordinary Shares
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
Number
held
30,458,366
26,266,815
% Interest
8.64%
7.45%
21,958,917
6.23%
5.
UNQ UOT E D E Q UIT Y S E CUR IT IE S
The following unquoted options are on issue:
Number on
Issue
Number of
Holders
Options issued under the Company’s Employee Option Plan to take up
ordinary shares:
- Exercisable at 37.9 cents each by 14 July 2024
- Exercisable at 14 cents expiring 31 December 2023
- Exercisable at 16 cents expiring 31 December 2023
- Exercisable at 21.1 cents expiring 26 May 2025
- Exercisable at 24.8 cents expiring 26 May 2026
750,000(1)
2,000,000(2)
2,000,000(3)
1,000,000(4)
1,000,000(5)
4
1
1
2
2
(1) Persons holding 20% or more:-
A D’Hulst
P Snook
(2) Persons holding 20% or more:
C G Nominees (Australia) Pty Ltd
(3) Persons holding 20% or more:
C G Nominees (Australia) Pty Ltd
(4) Persons holding 20% or more:
A Bruton
G Rogers
(5) Persons holding 20% or more
A Bruton
G Rogers
79
67%
20%
100%
100%
50%
50%
50%
50%
ADDITIONAL SHAREHOLDERS INFORMATION (cont.)
6 . On -m a rk e t b u y b a c k
There is no current on-market buyback.
7 .
Re s tr ic te d s e c u r it ie s
There are no restricted securities on issue.
80
INTERESTS IN MINING TENEMENTS
PROJECT
LOCATION
TENEMENT
NUMBER
HOLDER
ZENITH
MINERALS
INTEREST
STATUS
Earaheedy Zinc JV
WA
E69/3464
Rumble Resources Ltd
Fossil Prospecting Pty Ltd
75%
25%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Lithium JV
(ZNC 100%,
EVM earning
60%) other
minerals 100%
As Above
Granted
Granted
E69/2733
E69/3414
R69/2
E69/3872
E69/3886
E69/3887
E69/3869
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
EPM16749
EPM17604
Mackerel Metals Limited
Mackerel Metals Limited
Earaheedy Mn
Earaheedy Mn
Earaheedy Mn
Earaheedy Zinc
Earaheedy Zinc
Earaheedy Zinc
Earaheedy Zinc
Develin Creek
Develin Creek
Auburn
Privateer
Red Mountain
WA
WA
WA
WA
WA
WA
WA
QLD
QLD
QLD
QLD
QLD
EPM27517 Black Dragon Energy (AUS) Pty Ltd
100%
Granted
EPM27552 Black Dragon Energy (AUS) Pty Ltd
100%
Granted
EPM26384 Black Dragon Energy (AUS) Pty Ltd
100%
Granted
Waratah Well
WA
E59/2170 Black Dragon Energy (AUS) Pty Ltd
Waratah Well
Morris Bore
WA
WA
E59/2321 Black Dragon Energy (AUS) Pty Ltd
E52/4028
Zenith Minerals Limited
100%
Granted
Split Rocks
WA
E77/2375 Black Dragon Energy (AUS) Pty Ltd
Lithium JV
(ZNC 100%,
EVM earning
60%) other
minerals 100%
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
E77/2394 Black Dragon Energy (AUS) Pty Ltd As above
E77/2395 Black Dragon Energy (AUS) Pty Ltd As above
E77/2386 Black Dragon Energy (AUS) Pty Ltd As above
E77/2388 Black Dragon Energy (AUS) Pty Ltd As above
E77/2457 Black Dragon Energy (AUS) Pty Ltd As above
E77/2513 Black Dragon Energy (AUS) Pty Ltd As above
E77/2514 Black Dragon Energy (AUS) Pty Ltd As above
E77/2515 Black Dragon Energy (AUS) Pty Ltd As above
E77/2555 Black Dragon Energy (AUS) Pty Ltd As above
E77/2598 Black Dragon Energy (AUS) Pty Ltd As above
E77/2616 Black Dragon Energy (AUS) Pty Ltd As above
P77/4507 Black Dragon Energy (AUS) Pty Ltd As above
Aust Lithium
Alliance ZNC
40%, EVM
60% ZNC other
minerals 100%
P77/4490 Black Dragon Energy (AUS) Pty Ltd
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Split Rocks
WA
E77/2514 Black Dragon Energy (AUS) Pty Ltd As above
Granted
81
INTERESTS IN MINING TENEMENTS cont.
PROJECT
LOCATION
TENEMENT
NUMBER
HOLDER
Split Rocks-Dulcie
WA
M77/1292
RR & Assoc & Highscore PL
Hayes Hill
WA
E15/1588
Loded Dog Prospecting Pty Ltd
Hayes Hill
WA
E63/1773
Loded Dog Prospecting Pty Ltd
Yilmia
WA
E15/1760 Kalgoorlie Mining Associates Pty Ltd
Yilmia
WA
E15/1783 Kalgoorlie Mining Associates Pty Ltd
ZENITH
MINERALS
INTEREST
Transfer to
ZNC in
progress, ZNC
owns mineral
rights below
6m
Option to
acquire 100%
Option to
acquire 100%
Option to
acquire 100%
of lithium
rights
Option to
acquire 100%
of lithium
rights
STATUS
Granted
Granted
Granted
Granted
Granted
Kavaklitepe
Turkey
EL20079861
Gubretas Maden Yatirimlari Anonim
Siketi
~20%
Granted
82