REG - European Metals Hldg - Annual Financial Report
30/09/2024 09:00
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RNS Number : 2150G European Metals Holdings Limited 30 September 2024
For immediate release
30 September 2024
European Metals Holdings Limited
("European Metals" or the "Company")
ANNUAL RESULTS
European Metals Holdings Limited (ASX & AIM: EMH, OTCQX: EMHXY and EMHLF)
("European Metals" or the "Company") are pleased to announce the Company's
annual results for the year ended 30 June 2024.
The annual report has been released on the Australian Securities Exchange
("ASX") as required under the listing rules of the ASX.
Whilst the financial information included in this announcement has been
prepared in accordance with the accounting policies and basis of preparation
set out below, this announcement does not constitute the Company's statutory
financial statements.
A copy of the annual report will be posted to shareholders and is also
available on the Company's website www.europeanmet.com.
For further information please contact:
European Metals Holdings Limited
Keith Coughlan, Executive Chairman Tel: +61 (0) 419 996 333
Email: keith@europeanmet.com
Kiran Morzaria, Non-Executive Director
Tel: +44 (0) 20 7440 0647
Henko Vos, Company Secretary
Tel: +61 (0) 400 550 042
Email: henko.vos@nexiaperth.com.au
Zeus Capital Limited (Nomad & Broker)
James Joyce / Darshan Patel / Isaac Hooper (Corporate Finance) Tel: +44 (0) 20 3829 5000
Harry Ansell (Broking)
BlytheRay (Financial PR) Tel: +44 (0) 20 7138 3222
Tim Blythe
Megan Ray
Chapter 1 Advisors (Financial PR - Aus)
David Tasker Tel: +61 (0) 433 112 936
CORPORATE DIRECTORY
Directors
Mr Keith Coughlan Executive Chairman
Mr Richard Pavlik Executive Director
Mr Kiran Morzaria Non-Executive Director
Ambassador Lincoln Bloomfield, Jr Non-Executive Director
Ms Merrill Gray Non-Executive Director
Company Secretary
Mr Henko Vos
Registered Office in Australia Registered Office in Czech Republic
Ground Floor, 41 Colin Street GEOMET s.r.o.
West Perth WA 6005 Ruska 287
Telephone 08 6245 2050 417 01 Dubi Bystrice
Email www.europeanmet.com The Czech Republic
Telephone: +420 732 671 666
Share Register - Australia Nominated Nomad & Broker
Computershare Investor Services Limited Zeus Capital Limited
Level 17 125 Old Broad Street, 12th Floor,
221 St Georges Terrace London, EC2N 1AR
Perth WA 6000
Telephone 1300 850 505 (within Australia) UK Depository
Telephone +61 3 9415 4000 (outside Australia) Computershare Investor Services plc
Facsimile 1800 783 447 (within Australia) The Pavilions
Facsimile +61 3 9473 2555 (outside Australia) Bridgewater Road
Bristol BS99 6ZZ
United Kingdom
Reporting Accountants (UK)
Chapman Davis LLP
2 Chapel Court
London SE1 1HH
United Kingdom
Auditor Securities Exchange Listing - United Kingdom
BDO Audit Pty Ltd London Stock Exchange plc
Level 9, Mia Yellagonga Tower 2, 5 Spring St 10 Paternoster Square
PERTH WA 6000 London EC4M 7LS
Telephone: +61 8 6382 4600 United Kingdom
AIM Code: EMH
Securities Exchange Listing - Australia Securities Exchange Listing - OTCQX Best Market
ASX Limited OTC Markets Group
Level 40, Central Park 300 Vesey Street, 12th Floor
152-158 St Georges Terrace New York City
Perth WA 6000 NY 10282 United States
ASX Code: EMH OTCQX Codes: EMHXY and EMHLF
CHAIRMAN'S LETTER
Dear Shareholders,
Welcome to the 2024 Annual Report for European Metals Holdings Limited
("European Metals" or "the Company").
On behalf of the Board of Directors, I am pleased to report on a year of
significant progress for the Company and the Cinovec Lithium Project ("Cinovec
Project") despite challenging macro conditions.
Lithium prices have fallen by some 80% over the year, and at the time of
writing, there have been numerous closures and production cutbacks at
established lithium production projects around the globe. Falling prices along
with increasing costs have combined to make new lithium project development
more challenging. However, the Company, remains confident in the lithium
market medium to long term and the future of our project. We have already seen
improvements in the macro indicators and remain enthusiastically committed to
developing the Cinovec Project.
We welcomed the European Bank for Reconstruction and Development ("EBRD") as a
shareholder early in the year. We believe the bank's involvement in the
Company and the project is significant. The EBRD works very closely with the
European Investment Bank, and the organisations have made joint public
statements about their support for funding the energy transition in Europe,
linked to the support that the industry is receiving from the European Union
("EU"). We have lodged our formal submission under the Critical Raw Materials
Act post-period and we look forward to the Cinovec Project being recognised as
a strategic project under this legislation. As previously reported, the
project already enjoys strategic project status under another EU initiative,
the Just Transition Fund.
Other key milestones achieved during the year included the successful
production of lithium carbonate and lithium hydroxide from the pilot programme
- both meeting battery grade specifications, the granting of extensions to our
exploration licenses which cover granted Preliminary Mining Permits, and the
selection of a significantly superior site for the lithium processing plant.
Clearly, the Definitive Feasibility Study delay during the year was
unfortunate, though necessary. The plant location attributes required
comprehensive assessment in order for engineering and design improvements to
be made to ensure improved permitting and project economics. We have been
working on processing enhancements during this time, which we anticipate will
further improve the project economics.
Corporately, we welcomed Non-executive Director Merrill Gray to the Board of
Directors as part of the Company's redomiciliation to Australia.
The project continues to enjoy strong support from all levels of the Czech
government. It remains well-positioned to assist in addressing the supply and
demand imbalance of lithium in the European Union, as substantial battery
manufacturing projects progress and real raw material supply gaps emerge.
Finally, I would like to take this opportunity to thank all staff, advisors,
contractors, our project partners, CEZ, and shareholders who have supported us
over the past difficult year. I look forward to updating you throughout the
new financial year as we continue to advance the Cinovec Project.
Keith Coughlan
EXECUTIVE CHAIRMAN
REVIEW OF OPERATIONS
PROJECT REVIEW
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech
State over the Cinovec Lithium Project. Geomet has been granted a preliminary
mining permit by the Ministry of Environment and the Ministry of Industry. The
Company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned
subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium
deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li(2)O,
Indicated Mineral Resource of 360.2Mt at 0.44% Li(2)O and an Inferred Mineral
Resource of 294.7Mt at 0.39% Li(2)O containing a combined 7.39 million tonnes
Lithium Carbonate Equivalent (refer to the Company's ASX/ AIM release dated 13
October 2021) (Resource Upgrade at Cinovec Lithium Project).
An initial Probable Ore Reserve of 34.5Mt at 0.65% Li(2)O reported 4 July 2017
(Cinovec Maiden Ore Reserve - Further Information) has been declared to cover
the first 20 years mining at an output of 22,500tpa of lithium carbonate
(refer to the Company's ASX/ AIM release dated 11 July 2018) (Cinovec
Production Modelled to Increase to 22,500tpa of Lithium Carbonate).
This makes Cinovec the largest hard rock lithium deposit in Europe and the
fifth largest non-brine deposit in the world.
Parts of the ore body near surface have been mined for tin from the 14th
Century to the 20th Century and the lithium-bearing orebody below surface
previously had over 400,000 tonnes of ore mined as a trial sub-level open
stope mining operation for tin mineralisation in the 1980's.
On 19 January 2022, EMH provided an update to the 2019 Pre-Feasibility-Study
("PFS") Update. It confirmed the deposit is amenable to bulk underground
mining (refer to the Company's ASX/ AIM release dated 19 January 2022) (PFS
Update delivers outstanding results). Metallurgical test-work has produced
both battery-grade lithium hydroxide and battery-grade lithium carbonate at
excellent recoveries. In February 2023 DRA Global Limited ("DRA") was
appointed to complete the Definitive Feasibility Study ("DFS").
Cinovec is centrally located for European end-users and is well serviced by
infrastructure, with a sealed road adjacent to the deposit, rail lines located
5 km north and 8 km south of the deposit, and an active 22 kV transmission
line running to the historic mine. The deposit lies in an active mining
region.
The economic viability of Cinovec has been enhanced by the recent push for
supply security of critical raw materials for battery production, including
the strong increase in demand for lithium globally, and within Europe
specifically, as demonstrated by the European Union's Critical Raw Materials
Act ("CRMA").
EBRD STRATEGIC INVESTMENT
Early in the year, the Company successfully completed a capital raising of
approximately €6 million by European Bank for Reconstruction and
Development ("EBRD") as a strategic investment in the Company and the
development of the Cinovec Project (refer to the Company's ASX release dated
21 July 2023) (EBRD Strategic Investment in EMH). As part of the due
diligence process, EBRD engaged an independent, international mining
consultancy to undertake a technical review of the Cinovec Project. EBRD also
performed a review of the Cinovec Project in respect to compliance with EBRD's
Environmental and Social Policy. The Company considers its relationship with
EBRD to be highly strategic as the European Union charts a path towards
greater lithium supply security and sustainability. Support for the
Company's lithium project aligns with these EU goals.
The EBRD is an international financial institution established in 1991 to
foster the economic transition process and to promote private and
entrepreneurial initiatives in its countries of operation including Central
and Eastern Europe, former Soviet Union and Eastern Mediterranean, through
provision of loans, equity investments, conducting policy dialogue and
providing technical cooperation. It has since played a transformative role
and gained unique expertise in fostering change in the region and beyond,
investing €170 billion in more than 6,400 projects including nearly EUR 3bn
in some 70 mining projects across 15 countries. EBRD works very closely with
the European Investment Bank ("EIB") and the organisations have made joint
public statements to assist in the funding of the energy transition in Europe.
As part of the investment in European Metals, EBRD will be offered the right
to maintain its percentage ownership in the Company and we believe that the
EBRD will play an important part, both directly and indirectly in the future
financing of European Metals and Geomet.
SUCCESSFUL BATTERY GRADE LITHIUM CARBONATE PILOT PROGRAMME
The Company has continued to enhance the project via improvements to
recoveries and quality of the potential end product. On 9 November 2023, the
Company announced the results of the Lithium Chemical Plant ("LCP") pilot
programme, confirming the robustness of the LCP process flow sheet (refer to
the Company's ASX/ AIM release dated 9 November 2023) (Successful
Battery-Grade pilot programme for Cinovec Project).
The pilot programme, conducted at ALS Laboratories in Perth, confirmed the
industrial viability of the LCP process flowsheet, producing exceptionally
clean battery grade lithium carbonate (>99.9%) with single-stage
purification (bicarbonation) of crude lithium carbonate. The programme
processed ore that was fully-representative in all respects of the run-of-mine
for the first seven years of planned mining, including average grade and
expected rock-type mix from the bulk mining.
A complete assay table for the piloted battery-grade lithium carbonate
comparing the Cinovec product with the global standard YS/T 582-2013 and
including assay results for the nine elements commonly controlled for cathode
manufacturers which sits outside YS/T 582-2013, is presented in the Company's
ASX/AIM release dated 9 November 2023 (Successful Battery-Grade pilot
programme for Cinovec Project).
SUCCESSFUL BATTERY GRADE LITHIUM HYDROXIDE ALSO PRODUCED FROM PILOT PROGRAMME
The Company announced the successful production of lithium hydroxide
monohydrate from pregnant leach solution manufactured during the larger-scale
Cinovec pilot programme referred to above. The pilot programme confirmed the
viability of the LCP process flowsheet for the industrial-scale production of
either lithium carbonate or lithium hydroxide. Crude lithium carbonate from
the pilot programme was converted into exceptionally clean battery-grade
lithium hydroxide monohydrate at laboratory scale.
The pilot programme processed ore that is fully-representative in all respects
of the run-of-mine for the first seven years of mining planned at Cinovec,
including average grade and expected rock-type mix from the bulk mining. The
Company is particularly pleased with the quality of product. The lithium
hydroxide produced was of the highest grade possible and exceptionally clean.
This, when combined with the ability to produce either battery-grade lithium
carbonate or hydroxide, enables a wider range of off-takers to be engaged with
for the Cinovec product.
A complete assay table for the battery-grade lithium hydroxide monohydrate
comparing the Cinovec product with the global standard GB/T 26008-2020 is
presented in the Company's ASX/AIM release dated 11 April 2024 (Successful
Production of Lithium Hydroxide).
extension granted to all exploration licenses
On 29 January 2024, the Company announced the granting of an extension to all
four Cinovec Exploration Licences ("the licences"). These licenses fully cover
all three granted Preliminary Mining Permits ("PMP's") comprising the Cinovec
Project. All four licences have been extended until 31 December 2026. The
granting of this extension follows a comprehensive evaluation by the relevant
state authorities of results achieved to date in exploring and developing the
deposit. Plans for future exploration work, including further resource
drilling, and compliance with conditions set by the Czech Ministry of
Environment were also assessed. The extension was required as the granted
PMP's, whilst conveying the sole and exclusive rights to apply for a Final
Mining Permit, do not allow for further drilling until the final mining area
is granted. As the Company plans to conduct further metallurgical and measured
resource drilling, an extension to the exploration licenses due to expire in
December 2023 was sought.
The licences extension applies to the Exploration Areas Cinovec, Cinovec II,
Cinovec III and Cinovec IV, which fully cover the East, South and North West
PMP's (refer to the Company's ASX/ AIM release dated 29 January 2024)
(Extension Granted to All Cinovec Exploration Licenses).
new plant site EXPECTED TO IMPROVE PERMITTING AND PROJECT ECONOMICS
On 26 April 2024, the Company announced the decision to move the proposed site
of the lithium processing plant from Dukla to Prunéřov. The new site was
selected for a number of reasons, including the expectation of speeding up the
permitting process and expediting the Cinovec Project. The Prunéřov site is
anticipated to also enable positive outcomes for project economics including
reductions in capex and opex per tonne as a result of optimalization of the
engineering identified as part of the Definitive Feasibility Study DFS
process, and reduced demolition and clearance requirements (refer to the
Company's ASX/ AIM release dated 26 April 2024) (New Plant Site to Improve
Project Permitting and Economics).
The new site has received preliminary agreement and support from the municipal
and regional governments. Prunéřov is the site of the former Prunéřov 1
Power Station, which was decommissioned in 2020 and Prunéřov 2 Power
Station. The site is owned and operated by CEZ, the Company's project level
partner. The site, currently zoned for industrial use, is considerably larger
in size than the Dukla site and should enable the processing plant to be laid
out in a more effective (and anticipated less costly) manner, enabling better
and faster constructability, improved operability and greater ease of
maintenance. The ore from the underground mining operation at Cinovec will be
carried by conveyor to Dukla where it will be loaded onto trains for transport
to Prunéřov, a distance of approximately 59 km using existing rail
facilities, the capacity of which has been confirmed. During the DFS process,
it became apparent that after considerable consultation with local
stakeholders and the municipal and regional governments the Dukla site
possessed limited capacity and also limited support from the surrounding
municipalities, for the extent of processing operations proposed. The
Prunéřov industrial site is located alongside the 750MW Prunéřov 2 Coal
fired power plant and is situated further away from inhabited areas.
Regional Project Map
REDOMICILIATION
The Company advised the market that it has been registered as an Australian
Company effective 7 May 2024 and lodged a notice of intention to discontinue
with the British Virgin Islands registry ("BVI Registry") (refer to the
Company's ASX/ AIM release dated 7 May 2024) (Redomiciliation Update). The
Company advised its intention to redomicile in the announcement to the market
on 1 December 2023, and the proposed redomiciliation was approved by the
Company's Shareholders on 22 December 2023. European Metals is now domiciled
in Australia and is a Company governed under the Corporations Act 2001 (Cth)
("Australian Continuance").
The Board believes that the Australian Continuance should lead to substantial
cost savings and improvements in the Company's administration and efficiency
of operations. Additionally, it will remove a potential impediment to
obtaining European development financial assistance for the Cinovec project.
The redomiciliation represented a re-admission to AIM, which was completed
shortly after the redomiciliation.
POST PERIOD UPDATE
On 31 July 2024, and post the reporting period, the Company provided a further
project update (refer to the Company's ASX/ AIM release dated 31 July 2024)
(Cinovec Lithium Project Update). The Company advised that the timeline for
the completion of the DFS and therefore construction of the Cinovec lithium
processing plant continue to be worked on. Given the change to the location of
the lithium processing plant from Dukla to Prunéřov, additional geotechnical
work is currently underway to confirm the optimal construction method and
layout at the new site. Results from this geotechnical work are expected to be
available at the end of September. DRA is then expected to provide a detailed
timeline and begin the DFS finalisation program of work.
The Project team continues to progress several DFS-related programs on the
Front-End Comminution and Beneficiation circuit ("FECAB") and LCP to improve
the overall flowsheet which are expected to positively impact Project
economics.
CORPORATE
The Company announced the appointment of Merrill Gray as a Non-executive
Director of the Company on 18 April 2024. Merrill is a highly experienced
executive and non-executive of ASX and private companies. Her appointment
brings over 30 years of metallurgical and mining engineering as well as
geology experience., including large-scale new technology project development
and production management skills. Merrill currently works as a global critical
minerals and renewable energy (including hydrogen derivatives) corporate
advisor, having previously been MD and CEO of Syngas Ltd (Founder), Hexagon
Energy Materials Limited (ASX: HXG) and Co-MD of lithium-ion battery recycling
Company, Primobius GmbH. She has significant international experience,
including within the European Union and specifically with German automotive
OEM's. Merrill brings experience and networks across the lithium-ion battery
supply chain. Merrill holds Bachelor of Engineering and Bachelor of Science
degrees, as well as an MBA, and is a fellow of The Australasian Institute of
Mining and Metallurgy and the Australian Institute of Engineering (refer to
the Company's ASX/ AIM release dated 18 April 2024) (Appointment of Director).
The Company announced the appointment of Henko Vos as Company Secretary on 2
February 2024, following the retirement of Ms Shannon Robinson. Mr Vos is a
member of the Australian Institute of Company Directors, the Governance
Institute of Australia and Chartered Accountants Australia & New Zealand.
He holds similar director and secretarial roles in various other listed public
companies in both industrial and resource sectors (refer to the Company's ASX/
AIM release dated 2 February 2024) (Company Secretary
Appointment/Resignation).
RISKS AND UNCERTAINTIES
The Group's activities have inherent risk, and the Board is unable to provide
certainty of the expected results of activities, or that any or all of the
likely activities will be achieved. The material business risks faced by the
Group that could influence the Group's future prospects, and how the Group
manages these risks, are provided below.
Operational risk
The Company may be affected by various operational factors. In the event that
any of these potential risks eventuate, the Company's operational and
financial performance may be adversely affected. No assurances can be given
that the Company will achieve commercial viability through successful
exploration outcomes on its tenement holdings. Until the Company is able to
realise value from its projects, it is likely to incur ongoing operating
losses.
The operations of the Company may be affected by various factors, including
failure to achieve predicted grades during mining, operational and technical
difficulties encountered during mining, lack of infrastructure in the
Company's areas of operation, unanticipated metallurgical problems which may
affect value of defined resources, increases in the costs of consumables,
spare parts, plant and equipment.
Mineral Resource estimates are made in accordance with the 2012 edition of the
JORC Code. Mineral resources are estimates only. An estimate is an expression
of judgement based on knowledge, experience and industry practice. Estimates
may alter significantly when new information or techniques become available.
Resource estimates can be imprecise and depend on interpretations, which may
prove to be inaccurate.
The Company's interests in mining tenements are at various stages of
exploration and potential production and potential investors should understand
that mineral exploration and production is a speculative and high-risk
undertaking that may be impeded by circumstances and factors beyond the
control of the Company. The Company has interests in mining tenements in the
Czech Republic which operate under different regulatory conditions which may
impact on time taken to evaluate projects and may affect the viability of
resources.
There can no assurance that the tenements, or any other exploration properties
that may be acquired in the future, will result in the exploitation of an
economic mineral resource. Even though an apparently viable deposit has been
identified, there is no guarantee that it can be economically exploited.
The Company will need to apply for a mining lease to undertake development and
mining on the relevant tenement. There is no guarantee that the Company will
be granted a mining lease and if it is granted, it will be subject to
conditions which may impact on the financial viability of the project.
Renewals
Mining and exploration tenements are subject to periodic renewal. The renewal
of the term of granted tenements is subject to compliance with the applicable
mining legislation and regulations and the discretion of the relevant mining
authority. Renewal conditions may include increased expenditure and work
commitments or compulsory relinquishment of areas of the tenements. The
imposition of new conditions or the inability to meet those conditions may
adversely affect the operations, financial position and/or performance of the
Company. The Company considers the likelihood of tenure forfeiture to be low
given the laws and regulations governing exploration in the Czech Republic and
the ongoing expenditure budgeted for by the Company. However, the consequence
of forfeiture or involuntary surrender of a granted tenement for reasons
beyond the control of the Company could be significant.
Title
Notwithstanding that the exploration licenses the subject of the Cinovec
Project has been granted, if the application for the licenses did not strictly
comply with the application requirements (such as were required reports were
not lodged or were lodged late), there is a risk that the tenements could be
deemed invalid.
Global conditions
General economic conditions, movements in interest and inflation rates and
currency exchange rates may have an adverse effect on the Company's potential
development activities, as well as on its ability to fund those activities.
General economic conditions, laws relating to taxation, new legislation, trade
barriers, interest and inflation rates, currency exchange controls, national
and international political circumstances (including outbreaks in
international hostilities, wars, terrorist acts, sabotage, subversive
activities, security operations, labour unrest, civil disorder, and states of
emergency), natural disasters (including fires, earthquakes and floods), and
quarantine restrictions, epidemics and pandemics, may have an adverse effect
on the Company's operations and financial performance, including the Company's
exploration and development activities, as well as on its ability to fund
those activities.
Regulatory compliance
Regulatory risks of the Company's operating activities are subject to
extensive laws and regulations relating to numerous matters including resource
licence consent, environmental compliance and rehabilitation, taxation,
employee relations, health and worker safety, waste disposal, protection of
the environment, protection of endangered and protected species and other
matters. The Company requires permits from regulatory authorities to authorise
the Company's operations. These permits relate to exploration, development,
production and rehabilitation activities. While the Company believes that it
will operate in substantial compliance with all material current laws and
regulations, agreements or changes in their enforcement or regulatory
interpretation could result in changes in legal requirements or in the terms
of existing permits and agreements applicable to the Company or its
properties, which could have a material adverse impact on the Company's
current operations or planned activities. Obtaining necessary permits can be a
time-consuming process and there is a risk that Company will not obtain these
permits on acceptable terms, in a timely manner or at all. The costs and
delays associated with obtaining necessary permits and complying with these
permits and applicable laws and regulations could materially delay or restrict
the Company from proceeding with the development of a project or the operation
or development of a mine. Any failure to comply with applicable laws and
regulations or permits, even if inadvertent, could result in material fines,
penalties or other liabilities. In extreme cases, failure could result in
suspension of the Company's activities or forfeiture of one or more of the
tenements, the subject of the Projects.
Climate
There are a number of climate-related factors that may affect the operations
and proposed activities of the Company. The climate change risks particularly
attributable to the Company include: (a) the emergence of new or expanded
regulations associated with the transitioning to a lower-carbon economy and
market changes related to climate change mitigation. The Company may be
impacted by changes to local or international compliance regulations related
to climate change mitigation efforts, or by specific taxation or penalties for
carbon emissions or environmental damage. These examples sit amongst an array
of possible restraints on industry that may further impact the Company and its
business viability. While the Company will endeavour to manage these risks and
limit any consequential impacts, there can be no guarantee that the Company
will not be impacted by these occurrences; and (b) climate change may cause
certain physical and environmental risks that cannot be predicted by the
Company, including events such as increased severity of weather patterns and
incidence of extreme weather events and longer-term physical risks such as
shifting climate patterns. All these risks associated with climate change may
significantly change the industry in which the Company operates.
General risks
Future funding requirements and the ability to access debt and equity markets.
The funds raised by the Company are considered sufficient to meet the
evaluation and development objectives of the Company. Additional funding may
be required in the event development costs exceed the Company's estimates and
to effectively implement its business and operations plans in the future, to
take advantage of opportunities for acquisitions, joint ventures or other
business opportunities, and to meet any unanticipated liabilities or expenses
which the Company may incur, additional financing will be required. In
addition, should the Company consider that its development results justify
commencement of production on any of its projects, additional funding will be
required to implement the Company's development plans, the quantum of which,
remain unknown at the date of the Annual report. The Company may seek to raise
further funds through equity or debt financing, joint ventures, production
sharing arrangements or other means. Failure to obtain sufficient financing
for the Company's activities and future projects may result in delay and
indefinite postponement of development or production on the Company's
properties or even loss of a property interest. There can be no assurance that
additional finance will be available when needed or, if available, the terms
of the financing might not be favourable to the Company and might involve
substantial dilution to shareholders.
Reliance on key personnel
The responsibility of overseeing the day-to-day operations and the strategic
management of the Company depends substantially on its senior management and
its key personnel. There can be no assurance given that there will be no
detrimental impact on the Company if one or more of these employees cease
their employment. The Company may not be able to replace its senior management
or key personnel with persons of equivalent expertise and experience within a
reasonable period of time or at all and the Company may incur additional
expenses to recruit, train and retain personnel. Loss of such personnel may
also have an adverse effect on the performance of the Company.
Competition
The industry in which the Company will be involved is subject to domestic and
global competition. Although the Company will undertake all reasonable due
diligence in its business decisions and operations, the Company will have no
influence or control over the activities or actions of its competitors, which
activities or actions may, positively or negatively, affect the operating and
financial performance of the Company's projects and business.
Market conditions
Share market conditions may affect the value of the Company's shares
regardless of the Company's operating performance. Share market conditions are
affected by many factors such as:
(a) general economic outlook;
(b) introduction of tax reform or other new legislation;
(c) interest rates and inflation rates;
(d) global health epidemics or pandemics;
(e) currency fluctuations;
(f) changes in investor sentiment toward particular market
sectors;
(g) the demand for, and supply of, capital;
(h) political tensions; and
(i) terrorism or other hostilities.
The market price of shares can fall as well as rise and may be subject to
varied and unpredictable influences on the market for equities in general and
resource exploration stocks in particular. Neither the Company nor the
Directors warrant the future performance of the Company or any return on an
investment in the Company. Potential investors should be aware that there are
risks associated with any securities investment. Securities listed on the
stock market, and in particular securities of exploration companies experience
extreme price and volume fluctuations that have often been unrelated to the
operating performance of such companies. These factors may materially affect
the market price of the shares regardless of the Company's performance. In
addition, after the end of the relevant escrow periods affecting shares in the
Company, a significant sale of then tradeable shares (or the market perception
that such a sale might occur) could have an adverse effect on the Company's
share price.
Commodity price volatility and exchange rate
If the Company achieves success leading to mineral production, the revenue it
will derive through the sale of product exposes the potential income of the
Company to commodity price and exchange rate risks. Commodity prices fluctuate
and are affected by many factors beyond the control of the Company. Such
factors include supply and demand fluctuations for precious and base metals,
technological advancements, forward selling activities and other
macro-economic factors. Furthermore, international prices of various
commodities are denominated in United States dollars, whereas the income and
expenditure of the Company will be taken into account in Australian currency,
exposing the Company to the fluctuations and volatility of the rate of
exchange between the United States dollar and the Australian dollar as
determined in international markets.
Government policy changes
Adverse changes in government policies or legislation may affect ownership of
mineral interests, taxation, royalties, land access, labour relations, and
mining and exploration activities of the Company. It is possible that the
current system of exploration and mine permitting in the Czech Republic may
change, resulting in impairment of rights and possibly expropriation of the
Company's properties without adequate compensation.
Dilution
In the future, the Company may elect to issue shares or engage in capital
raisings to fund construction of the Project and growth, for investments or
acquisitions that the Company may decide to undertake, to repay debt or for
any other reason the Board may determine at the relevant time. While the
Company will be subject to the constraints of the ASX Listing Rules regarding
the percentage of its capital that it is able to issue within a 12-month
period (other than where exceptions apply), shareholder interests may be
diluted as a result of such issues of shares or other securities.
Taxation
The acquisition and disposal of shares will have tax consequences, which will
differ depending on the individual financial affairs of each investor. All
potential investors in the Company are urged to obtain independent financial
advice about the consequences of acquiring shares from a taxation viewpoint
and generally. To the maximum extent permitted by law, the Company, its
officers and each of their respective advisers accept no liability and
responsibility with respect to the taxation consequences of subscribing for
shares under any prospectus.
Litigation
The Company is exposed to possible litigation risks including, tenure
disputes, environmental claims, occupational health and safety claims and
employee claims. Further, the Company may be involved in disputes with other
parties in the future which may result in litigation. Any such claim or
dispute if proven, may impact adversely on the Company's operations,
reputation, financial performance and financial position. The Company is not
currently engaged in any litigation.
Environmental regulation
The operations and proposed activities of the Company are subject to Czech
laws and regulations concerning the environment. As with most exploration
projects and mining operations, the Company's activities are expected to
have an impact on the environment, particularly if advanced exploration or
mine development proceeds. It is the Company's intention to conduct its
activities to the highest standard of environmental obligation, including
compliance with all environmental laws.
Mining operations have inherent risks and liabilities associated with safety
and damage to the environment and the disposal of waste products occurring as
a result of mineral exploration and production. The occurrence of any such
safety or environmental incident could delay production or increase production
costs. Events, such as unpredictable rainfall or bushfires may impact on
the Company's ongoing compliance with environmental legislation,
regulations, and licences. Significant liabilities could be imposed on the
Company for damages, clean-up costs or penalties in the event of certain
discharges into the environment, environmental damage caused by previous
operations or non-compliance with environmental laws or regulations.
The disposal of mining and process waste and mine water discharge are under
constant legislative scrutiny and regulation. There is a risk that
environmental laws and regulations become more onerous making the Company's
operations more expensive.
Approvals are required for land clearing and for ground disturbing activities.
Delays in obtaining such approvals can result in the delay to anticipated
exploration programs or mining activities.
DIRECTORS' REPORT
Your Directors present their report, together with the consolidated financial
statements of the Group, being European Metals Holdings Limited ("EMH" or the
"Company") and its controlled entities ("Group"), for the year ended 30 June
2024.
Directors
The following persons were Directors of the Company and were in office for the
entire year, and up to the date of this report, unless otherwise stated:
Mr Keith Coughlan Executive Chairman
Previously Managing Director
Mr Richard Pavlik Executive Director
Mr Kiran Morzaria Non-Executive Director
Ambassador Lincoln Bloomfield Jr Non-Executive Director
Ms Merrill Gray Non-Executive Director Appointed 18 April 2024
Company Secretary
Ms Shannon
Robinson
Resigned 1 February 2024
Ms Robinson was appointed as Company Secretary on 20 April 2023 and resigned
on 1 February 2024. Ms Robinson is a Chartered Secretary and corporate advisor
with 20 years' experience. Shannon is a former corporate lawyer, a graduate
member of the Australian Institute of Company Directors (AICD) and a fellow of
the Governance Institute of Australia (GIA). She holds similar secretarial
roles in various other listed public companies.
Mr Henko Vos
Appointed 1 February 2024
Mr Vos was appointed as Company Secretary on 2 February 2024. Mr Vos is a
graduate member of the Australian Institute of Company Directors (AICD),
Governance Institute of Australia and Chartered Accountants Australia &
New Zealand. He holds similar secretarial roles in various other listed public
companies in both industrial and resource sectors.
Principal Activities
The Group is primarily involved in the exploration activities of the Cinovec
lithium project in the Czech Republic.
Review of Operations
The 2024 Financial Year has been one of significant growth and development for
the Group. For further information refer to the Project Review section of this
report.
Results of Operations
The consolidated loss after tax for year ended 30 June 2024 was $3,355,576
(2023: $5,928,441).
Financial Position
The net assets of the Group have increased by $3,156,940 to $36,483,241 at 30
June 2024 (2023: $33,326,301).
Significant Changes in the State of Affairs
There have not been any significant changes in the state of affairs of the
Group during the financial year other than as disclosed in the Review of
Operations section of this report.
Dividends Paid or Recommended
No dividends were declared or paid during the year and the Directors do not
recommend the payment of a dividend for the period.
Information on Directors
Keith Coughlan Executive Chairman - Appointed 30 June 2020
Previously Managing Director (CEO) - Appointed 6 September 2013 to 30 June
2020
Qualifications BA
Experience Mr Coughlan has had almost 30 years' experience in stockbroking and funds
management. He has been largely involved in the funding and promoting of
resource companies listed on ASX, AIM and TSX. He has advised various
companies on the identification and acquisition of resource projects and was
previously employed by one of Australia's then largest funds management
organizations.
Interest in shares and Options Mr Coughlan held, at the date of this report, 850,000 shares direct interest
and 4,900,000 shares indirect interest held by Inswinger Holdings Pty Ltd, an
entity of which Mr Coughlan is a director and a shareholder.
Performance Rights Mr Coughlan held, at the date of this report, 2,400,000 Performance Rights
indirect interest held by Kadaje Investments Pty Ltd, an entity of which Mr
Coughlan is a director and a shareholder.
Special Responsibilities Member of Nomination Committee
Member of Environment, Social and Governance Committee
Directorships held in other listed entities Mr Coughlan is Non-Executive Director of Codrus Minerals Limited (appointed
22 July 2024-current)
Mr Coughlan was previously Non-Executive Chairman of Doriemus plc (appointed
19 June 2019, resigned 18 June 2024)
Mr Coughlan was previously a Non-Executive Director of Calidus Resources
Limited (appointed 13 June 2017, resigned 13 May 2022)
Richard Pavlik Executive Director - Appointed 27 June 2017
Qualifications Masters Degree in Mining Engineer
Experience Mr Pavlik is the Chief Advisor to the CEO of Geomet s.r.o. and is a highly
experienced Czech mining executive. Mr Pavlik holds a Masters Degree in Mining
Engineer from the Technical University of Ostrava in the Czech Republic. He is
the former Chief Project Manager and Advisor to the Chief Executive Officer at
OKD. OKD has been a major coal producer in the Czech Republic. He has almost
30 years of relevant industry experience in the Czech Republic. Mr Pavlik also
has experience as a Project Analyst at Normandy Capital in Sydney as part of a
postgraduate program from Swinburne University. Mr Pavlik has held previous
senior positions within OKD and New World Resources as Chief Engineer, and as
Head of Surveying and Geology. He has also served as the Head of the
Supervisory Board of NWR Karbonia, a Polish subsidiary of New World Resources
(UK) Limited. He has an intimate knowledge of mining in the Czech Republic.
Interest in shares and Options Mr Pavlik held, at the date of this report, 300,000 shares direct interest
Performance Rights Mr Pavlik held, at the date of this report, 1,200,000 Performance Rights
direct interest
Special Responsibilities Member of Environment, Social and Governance Committee
Member of Nomination Committee
Directorships held in other listed entities Nil
Information on Directors (continued)
Kiran Morzaria Non-Executive Director - Appointed 10 December 2015
Qualifications Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines
and an MBA (Finance) from CASS Business School
Experience Mr Morzaria has extensive experience in the mineral resource industry working
in both operational and management roles. He spent the first four years of
his career in exploration, mining and civil engineering before obtaining his
MBA. Mr Morzaria has served as a director of a number of public companies in
both an executive and non-executive capacity.
Interest in shares and Options Mr Morzaria held, at the date of this report, 200,000 shares direct
interest. Mr Morzaria is a director of Cadence Minerals Plc which owns
6,140,363 shares. Mr Morzaria does not exert control of the acquisition or
disposal of the shares held by Cadence Minerals and he is not a beneficiary.
Special Responsibilities Chair of Remuneration Committee
Chair of Nomination Committee
Member of Audit and Risk Committee
Member of Environment, Social and Governance Committee
Directorships held in other listed entities Chief Executive Officer and Director of Cadence Minerals plc (appointed 31
July 2015 - current) and Director of UK Oil & Gas plc (appointed 23
October 2015-current).
Lincoln Bloomfield Jr. Non-Executive Director - Appointed 3 January 2021
Qualifications Harvard College (cum laude, Government, 1974), Fletcher School of Law and
Diplomacy (M.A.L.D., 1980)
Experience Ambassador Bloomfield is based in Washington, DC, and brings governance and
regulatory experience, years of international diplomacy and security expertise
to the EMH Board, along with a North American presence, while his private
sector experience is centred on sustainability, resilience and renewable
energy.
Interest in shares and Options Ambassador Bloomfield held, at the date of this report, 525,000 direct
interest in shares.
Special Responsibilities Chair of Environment, Social and Governance Committee
Chair of Audit and Risk Committee
Member of Remuneration Committee
Member of Nomination Committee
Directorships held in other listed entities Nil
Information on Directors (continued)
Merrill Gray Non-Executive Director - Appointed 18 April 2024
Qualifications Bachelor of Engineering, Bachelor of Science, MBA, fellow of The Australasian
Institute of Mining and Metallurgy and the Australian Institute of
Engineering.
Experience Merrill is a highly experienced executive and non-executive of ASX and private
companies. Her appointment brings over 30 years of metallurgical and mining
engineering as well as geology experience., including large-scale new
technology project development and production management skills. Merrill
currently works as a global critical minerals and renewable energy (including
hydrogen derivatives) corporate advisor, having previously been MD and CEO of
Syngas Ltd (Founder), Hexagon Energy Materials Limited (ASX: HXG) and Co-MD of
lithium-ion battery recycling company, Primobius GmbH. She has significant
international experience, including within the European Union and specifically
with German automotive OEM's. Merrill brings experience and networks across
the lithium-ion battery supply chain.
Interest in shares and Options Nil
Special Responsibilities Member of Environment, Social and Governance Committee
Member of Audit and Risk Committee
Directorships held in other listed entities Managing Director of Hexagon Energy Materials Limited (Appointed 18 October
2021, resigned 17 May 2022)
Company Secretary
Mr Henko Vos (appointed 1 February 2024)
Ms Shannon Robinson (resigned 1 February 2024)
Director Meetings
The number of Directors' meetings and meetings of Committees of Directors held
during the year and the number of meetings attended by each of the Directors
of the Company during the year is:
Directors' Meetings Audit and Risk Committee Nomination Committee
Number attended Number eligible to attend Number attended Number eligible to attend Number attended Number eligible to attend
Name
Keith Coughlan 4 4 - - 1 1
Richard Pavlik 4 4 - - 1 1
Kiran Morzaria 4 4 2 2 1 1
Lincoln Bloomfield, Jr 4 4 2 2 1 1
Merrill Gray 2 2 - - - -
Director Meetings (continued)
Remuneration Committee
ESG Committee
Name Number attended Number eligible to attend Number attended Number eligible to attend
Keith Coughlan - - 3 3
Richard Pavlik - - 3 3
Kiran Morzaria 1 1 3 3
Lincoln Bloomfield, Jr 1 1 3 3
Merrill Gray - - 2 2
Indemnifying officers or auditor
During or since the end of the financial year the Company has given an
indemnity or entered into an agreement to indemnify, or paid or agreed to pay
insurance premiums as follows:
i. The Company has entered into agreements to indemnify all Directors
and provide access to documents, against any liability arising from a claim
brought by a third party against the Company. The agreement provides for the
Company to pay all damages and costs which may be awarded against the
Directors.
ii. The Company has paid premiums of $71,000 (2023: $71,000) to insure
each of the Directors against liabilities for costs and expenses incurred by
them in defending any legal proceedings arising out of their conduct while
acting in the capacity of Director of the Company, other than conduct
involving a willful breach of duty in relation to the Company. Under the terms
and conditions of the insurance contract, the nature of the liabilities
insured against and the premium paid cannot be disclosed.
iii. No indemnity or insurance of auditors has been paid.
Shares under option
During the year, no unquoted options and warrants were issued.
Unissued shares of European Metals Holdings Limited under option at the date
of this report is as follows:
Expiry date Exercise Price Number under option
31-Dec-25 80 cents 1,000,000
The following ordinary shares of European Metals Holdings Limited were issued
during the year ended 30 June 2024 and up to the date of this report on the
exercise of options granted:
Type Date options granted Expiry Date Number under option Number exercised Exercised price
Consultants 25 September 2020 23 October 2023 2,024,000 2,024,000 0.42
Consultants 8 October 2020 23 October 2023 600,000 600,000 0.45
No person entitled to exercise the option has or has any right by virtue of
the option to participate in any share issue of any other body corporate.
Performance Rights
Performance rights on issue at the date of this report is as follows:
Issued to Grant date/Issue date Expiry date Number on issue
Keith Coughlan 17 December 2020/2 March 2022 2-Mar-25 2,400,000
Richard Pavlik 17 December 2020/2 March 2022 2-Mar-25 1,200,000
Employee in terms of ESIP 27 February 2022 /2 March 2022 2-Mar-25 1,200,000
12 December 2022/20 December 2022 2-Mar-25 450,000
13 December 2022/20 December 2022 2-Mar-25 300,000
14 December 2022/20 December 2022 2-Mar-25 100,000
Consultant 22 February 2022/ 2 March 2022 2-Mar-25 900,000
29 August 2022/ 1 September 2022 2-Mar-25 750,000
Environmental, Social and Governance
The Company has adopted a set of Environmental, Social and Governance ("ESG")
metrics and disclosures following the recommendations released by the World
Economic Forum ("WEF") in Geneva, Switzerland which are acknowledged as the
gold standard for ESG reporting.
The establishment of an ESG Committee at Board level is chaired by Ambassador
Lincoln Bloomfield who has considerable private sector experience centred on
sustainability, resilience and renewable energy. Ambassador Bloomfield has
stated, "European Metals is making every effort to ensure that any finished
product containing our lithium will satisfy the public's need for assurance
that high ESG standards have been upheld at every stage of our production
process. We are committed to the well-being of our workforce, minimizing
environmental impact throughout our process, and engaging with the local
community".
The Company engaged Socialsuite ESG technology platform - a global leader in
ESG impact management systems and sustainability reporting.
The Company has utilised Socialsuite's ESG technology platform to establish
its initial ESG baseline dashboard. The Company will focus on delivering and
reporting on its ESG metrics and indicators. Socialsuite's ESG reporting
technology provides an easy way for investors and other stakeholders to assess
the progress of the Company on its journey.
The Company's ESG transparency commitment is a precursor to an independent
lithium production Life Cycle Assessment2 ("LCA") which includes a full Carbon
Footprint assessment.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the
Company or intervene in any proceedings to which the Company is a party for
the purpose of taking responsibility on behalf of the Company for all or any
part of those proceedings.
The Company was not a party to any such proceedings during the year.
Non-audit Services
BDO has not provided any non-audit services during the year.
Significant events after the reporting date
On 31 July 2024, and post the reporting period, the Company provided a further
project update (refer to the Company's ASX/ AIM release dated 31 July 2024)
(Cinovec Lithium Project Update). The Company advised that the timeline for
the completion of the DFS and therefore construction of the Cinovec lithium
processing plant continue to be worked on. Given the change to the location of
the lithium processing plant from Dukla to Prunéřov, additional geotechnical
work is currently underway to confirm the optimal construction method and
layout at the new site. Results from this geotechnical work are expected to be
available at the end of September. DRA is then expected to provide a detailed
timeline and begin the DFS finalisation program of work.
The Project team continues to progress several DFS-related programs on the
Front-End Comminution and Beneficiation circuit ("FECAB") and LCP to improve
the overall flowsheet which are expected to positively impact Project
economics.
Auditor's Independence Declaration
The auditor's independence declaration for the year ended 30 June 2024 has
been received and can be found in the financial report.
Corporate Governance Statement
The Company's 2024 Corporate Governance Statement has been released as a
separate document and is located on the Company's website at
https://www.europeanmet.com/corporate-governance/
(https://www.europeanmet.com/corporate-governance/) .
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191,
issued by the Australian Securities and Investments Commission, relating to
'rounding-off'. Amounts in this report have been rounded off in accordance
with that Corporations Instrument to the nearest dollar.
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each Director of
the Company, and key management personnel ("KMP"). The Directors are pleased
to present the remuneration report which sets out the remuneration information
for European Metals Holdings Limited's Non-Executive Directors, Executive
Directors and other key management personnel.
A. Principles used to determine the nature and amount of remuneration
The remuneration policy of the Group has been designed to align Director and
management objectives with shareholder and business objectives by providing a
fixed remuneration component, and offering specific long-term incentives based
on key performance areas affecting the Group financial results. The Board of
the Company believes the remuneration policy to be appropriate and effective
in its ability to attract and retain the best management and Directors to run
and manage the Group, as well as create goal congruence between Directors,
Executives and shareholders.
The Board's policy for determining the nature and amount of remuneration for
Board members and Senior Executives of the Group is as follows:
The remuneration policy, setting the terms and conditions for the Executive
Directors and other Senior Executives, was developed by the Board. All
Executives receive a base salary (which is based on factors such as length of
service and experience), superannuation, options and performance incentives.
The Board reviews Executive packages annually by reference to the Group's
performance, executive performance, and comparable information from industry
sectors and other listed companies in similar industries.
Executives are also entitled to participate in the employee share and option
arrangements.
All remuneration paid to Directors and Executives is valued at the cost to the
Group and expensed.
REMUNERATION REPORT (AUDITED)(continued)
A. Principles used to determine the nature and amount of remuneration
(continued)
The Board policy is to remunerate Non-executive Directors at commercial market
rates for comparable companies for time, commitment, and responsibilities. The
Board determines payments to the Non-executive Directors and reviews their
remuneration annually based on market practice, duties, and accountability.
Independent external advice is sought when required. The maximum aggregate
amount of fees that can be paid to Non-executive Directors is subject to
approval by shareholders at the Annual General Meeting. Fees for Non-Executive
Directors are not linked to the performance of the Group. However, to align
Directors' interests with shareholder interests, the Directors are encouraged
to hold shares in the Company.
The remuneration policy has been tailored to increase the direct positive
relationship between shareholders' investment objectives and Directors' and
Executives' performance. Currently, this is facilitated through the
issue of options to the majority of Directors and Executives to encourage the
alignment of personal and shareholder interests. The Company believes this
policy will be effective in increasing shareholder wealth. For details of
Directors' and Executives' interests in shares, options and performance shares
at year end, refer to sections d, e and f of the remuneration report.
B. Details of Remuneration
Details of the nature and amount of each element of the emoluments of each of
the KMP of the Company (the Directors) for the year ended 30 June 2024 are set
out in the following tables:
The maximum amount of remuneration for Non-Executive Directors is $300,000 as
approved by shareholders.
During the financial period, the Company did not engage any remuneration
consultants.
2024 Short-term benefits Post- employment benefits Long term benefits Equity-settled share-based payments Total % related to performance
Salary fees and leave Profit share and bonuses Super-annuation Annual Leave and Long Service Leave Rights/ Options (ii) $ %
$ $ $ $ $
Directors
Keith Coughlan(i) 478,322 116,978 27,500 195,098 (880,462) (62,564) 14%
Kiran Morzaria 54,826 - - - - 54,826 0%
Richard Pavlik 74,287 61,660 - - (440,231) (304,284) 45%
Lincoln Bloomfield Jr 70,100 - - - - 70,100 0%
Merrill Gray 11,667 - - - - 11,667 0%
Total 689,202 178,638 27,500 195,098 (1,320,692) (230,254) 16%
Notes:
(i) During the financial year, a total of $137,280 of
Mr Coughlan's remuneration was reimbursed by Geomet s.r.o.
(ii) As noted in section F "Performance Rights granted
for the year ended 30 June 2024" of the Remuneration Report, performance
rights were granted to Keith Coughlan and Richard Pavlik on 17 December 2020.
The Group's estimate of the probability of when these performance rights will
vest has been updated, as disclosed in section F. As a result, there has been
a reversal of the expense.
REMUNERATION REPORT (AUDITED)(Continued)
B. Details of Remuneration (continued)
Short-term benefits Post- employment benefits Long term benefits Equity-settled share-based payments Total % related to performance
2023 Salary fees and leave Profit share and bonuses Super-annuation Long Service Leave Rights/ Options (iii) $ %
$ $ $ $ $
Directors
Keith Coughlan (i) 425,901 48,922 27,500 32,762 201,359 736,444 34%
Kiran Morzaria 57,048 - - - - 57,048 0%
Richard Pavlik(ii) 141,295 33,647 - - 100,681 275,623 49%
Lincoln Bloomfield Jr 70,852 - - - - 70,852 0%
Total 695,096 82,569 27,500 32,762 302,040 1,139,967 34%
Notes:
(i) During the prior financial year, a total of
$137,280 of Mr Coughlan's remuneration was reimbursed by Geomet s.r.o.
(ii) In the prior financial period, Mr Pavlik was
reimbursed for a salary that should have been paid to him by European Metals
Holdings Limited in 2021, in addition to the salary paid by Geomet. The total
salary for the period January 2021 to July 2022 was $54,883 and a bonus of
$33,647.
(iii) Performance rights were granted to Keith Coughlan
and Richard Pavlik on 17 December 2020. The Group's estimate of the
probability of when these performance rights will vest was updated. As a
result, a share-based expense was recognised for the year ended 30 June 2023.
C. Service Agreements
It was formally agreed at a meeting of the directors that the following
remuneration be established; there are no formal notice periods or termination
benefits payable on termination.
Mr Keith Coughlan, Executive Chairman, received a salary of $595,300 plus
statutory superannuation contribution from 1 July 2023 to 30 June 2024.
D. Share-based compensation
During the financial year, no shares were issued to KMP under the Employee
Securities Incentive Plan (ESIP) (2023: nil).
Loan shares on issue to KMP under the ESIP are as follows:
30-Jun-24 Loan shares Grant Details Exercised Lapsed/Cancelled Balance at End of Year
Grant Date No. Value No. Value No. Value No. Value
$ $ $ Vested $
Group KMP
Keith Coughlan 30-Nov-17 850,000 592,245 - - - - 850,000 592,245
Richard Pavlik 30-Nov-17 300,000 209,028 - - - - 300,000 209,028
Kiran Morzaria 30-Nov-17 200,000 139,352 - - - - 200,000 139,352
1,350,000 940,625 - - - - 1,350,000 940,625
REMUNERATION REPORT (AUDITED)(Continued)
D. Share-based compensation (continued)
30-Jun-23 Loan shares Grant Details Exercised Lapsed/Cancelled Balance at End of Year
Grant Date No. Value No. Value No. Value No. Value
$ $ $ Vested $
Group KMP
Keith Coughlan 30-Nov-17 850,000 592,245 - - - - 850,000 592,245
Richard Pavlik 30-Nov-17 300,000 209,028 - - - - 300,000 209,028
Kiran Morzaria 30-Nov-17 200,000 139,352 - - - - 200,000 139,352
1,350,000 940,625 - - - - 1,350,000 940,625
The terms of the loan shares are disclosed in Note 18(d).
E. Options issued for the year ended 30 June 2024
No options were issued as part of the remuneration for the year ended 30 June
2024 (2023: nil).
No options were held by key management personnel at 30 June 2024 (2023: nil).
F. Performance Rights granted for the year ended 30 June 2024
No performance rights were granted as part of the remuneration for the year
ended 30 June 2024 (2023: nil).
Granted in prior year Performance Rights Details Exercised Lapsed/ Balance at
Cancelled End of Year Vested Unvested
Grant Date No. Value(1) No. Value No. Value No. Value(1) No. No.
$ $ $ $
Group KMP
Keith Coughlan 17-Dec-20 2,400,000 2,088,000 - - - - 2,400,000 2,088,000 - 2,400,000
Richard Pavlik 17-Dec-20 1,200,000 1,044,000 - - - - 1,200,000 1,044,000 - 1,200,000
3,600,000 3,132,000 - - - - 3,600,000 3,132,000 - 3,600,000
Notes:
1. The value of performance rights granted to key management personnel is
calculated as at the grant date based on the share price at grant date. As at
30 June 2024, management's assessment is that the performance rights will vest
as follows:
- 1,200,000 Class A performance rights on 2 March 2025, probability 100%
- 1,200,000 Class B performance rights after 2 March 2025, probability 0%
- 1,200,000 Class C performance rights after 2 March 2025, probability 0%
REMUNERATION REPORT (AUDITED)(Continued)
G. Equity instruments issued on exercise of remuneration options
No equity instruments were issued during the year to Directors or other KMP.
H. Loans to Directors and Key Management Personnel
No loans were issued to Key Management Personnel during the financial year.
See section d for share loans currently recognised from previous issue.
I. Company performance, shareholder wealth and Directors' and Executives'
remuneration
The remuneration policy has been tailored to increase the direct positive
relationship between shareholders' investment objectives and Directors' and
Executives' performance. This will be facilitated through the issue of options
to the majority of Directors and Executives to encourage the alignment of
personal and shareholder interests. The Company believes this policy will be
effective in increasing shareholder wealth. At commencement of mine
production, performance-based bonuses based on key performance indicators are
expected to be introduced.
J. Other information - Shareholdings
2024 Granted as remuneration during the year Other Changes during the year
Name Issued on exercise of options
Balance at Start of year Balance at end of year
Keith Coughlan 850,000 - - - 850,000
Indirect(1) 4,900,000 - - - 4,900,000
Richard Pavlik 300,000 - - - 300,000
Kiran Morzaria 200,000 - - - 200,000
Indirect(2) 11,968,504 - - (5,828,141) 6,140,363
Lincoln Bloomfield, Jr 250,500 - - 274,500 525,000
Total 18,469,004 - - (5,553,641) 12,915,363
1. Mr Coughlan held, at the end of the financial year, 850,000 shares
direct interest and 4,900,000 shares indirect interest held by Inswinger
Holdings Pty Ltd, an entity of which Mr Coughlan is a director and a
shareholder.
2. Mr Morzaria is a director of Cadence Minerals plc, an entity which owns
6,140,363 shares in European Metals Holdings Limited. Mr Morzaria does not
exert control of the acquisition or disposal of the shares held by Cadence
Minerals and he is not a beneficiary.
K. Other transactions with Key Management Personnel
Purchases from related parties are made on terms equivalent to those that
prevail in arm's length transactions.
From July 2023, the Company received company secretarial, accounting and
bookkeeping services of $206,278 plus GST from Nexia, a company at which the
spouse of Executive Chairman, Keith Coughlan, acts as key management
personnel. Amount payable to Nexia as at 30 June 2024 was $37,969(2023:
$17,028).
There were no other transactions with Key Management Personnel during the
financial year.
REMUNERATION REPORT (AUDITED)(Continued)
L. Additional Information
The earnings of the consolidated entity for the five years to 30 June 2024 are
summarised below:
2024 2023 2022 2021 2020
$ $ $ $ $
Sales revenue - - - - -
EBITDA (3,289,784) (5,876,476) (6,758,452) (3,892,419) (4,607,385)
EBIT (3,344,508) (5,925,349) (6,798,864) (3,901,295) (4,608,729)
Loss after income tax (3,355,576) (5,928,441) (6,802,895) (3,962,450) (4,608,729)
2024 2023 2022 2021 2020
Share price at financial year end ($) 0.28 0.83 0.65 1.60 0.29
Total dividends declared (cents per share) - - - - -
Basic loss per share (cents per share) (1.64) (3.14) (3.78) (2.39) (3.05)
End of Remuneration Report
Signed in accordance with a resolution of the Board of Directors.
Keith Coughlan
EXECUTIVE CHAIRMAN
Dated at 30 September 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
Note 30 June 2024 30 June 2023
$ $
(Restated)*
Finance Income 767,263 479,783
Other income 6 868,868 1,116,293
Share based payments 17/18 2,299,512 (1,933,518)
Share of loss of equity accounted investee 12 (2,301,708) (1,845,158)
Professional fees (1,270,579) (1,544,741)
Employees' benefits (1,946,862) (719,705)
Advertising and promotion (547,634) (576,744)
Travel and accommodation (164,813) (175,848)
Directors' fees (272,539) (219,984)
Share registry and listing expenses (342,526) (152,501)
Insurance expense (78,366) (76,357)
Audit fees 7 (77,952) (63,443)
Depreciation and amortisation expense (54,724) (48,873)
Facility, advance fee and finance costs (11,068) (3,092)
Foreign exchange gain/(loss) 46,202 145,858
Other expenses (268,650) (310,411)
Loss before income tax (3,355,576) (5,928,441)
Income tax expense 3 - -
Loss from operations (3,355,576) (5,928,441)
Loss for the period (3,355,576) (5,928,441)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
- Exchange differences on translating foreign operations 13,379 (25,452)
- Exchange difference on translating investment in Geomet 12 (2,206,706) 1,938,737
Other comprehensive (loss)/income for the period, net of tax (2,193,327) 1,913,285
Total comprehensive loss for the period (5,548,903) (4,015,156)
Net Loss attributable to:
- Members of the parent entity (3,355,576) (5,928,441)
(3,355,576) (5,928,441)
Total Comprehensive loss attributable to:
- Members of the parent entity (5,548,903) (4,015,156)
(5,548,903) (4,015,156)
Loss per share for loss from continuing operations
Basic and diluted loss per share (cents) 8 (1.64) (3.14)
The above statement should be read in conjunction with the accompanying notes.
*The comparative information has been restated as a result of prior period
adjustments discussed in Note 1(m).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024
30 June 2024 30 June 2023 1 July 2022
Note $ $ $
(Restated)* (Restated)*
CURRENT ASSETS
Cash and cash equivalents 9 4,727,375 8,892,951 19,055,509
Trade and other receivables 10 391,942 200,706 782,518
Other assets 11 37,263 34,697 53,094
TOTAL CURRENT ASSETS 5,156,580 9,128,354 19,891,121
NON-CURRENT ASSETS
Other assets 11 28,549 48,154 47,392
Right-of-use asset 166,211 39,968 87,930
Investments accounted for using equity method 12 23,531,598 22,275,934 16,554,847
Advances to associate 13 8,430,289 8,418,872 -
Property, plant and equipment 5,212 2,899 -
TOTAL NON-CURRENT ASSETS 32,161,859 30,785,827 16,690,169
TOTAL ASSETS 37,318,439 39,914,181 36,581,290
CURRENT LIABILITIES
Trade and other payables 14 359,859 818,977 939,822
Payable to associate 1(u) - 5,627,507 -
Provisions - employee entitlements 15 310,832 16,570 147,048
Lease liability 45,917 40,775 45,707
TOTAL CURRENT LIABILITIES 716,608 6,503,829 1,132,577
NON-CURRENT LIABILITIES
Provisions - employee entitlements 15 329 84,051 -
Lease liability 118,261 - 40,775
TOTAL NON-CURRENT LIABILITIES 118,590 84,051 40,775
TOTAL LIABILITIES 835,198 6,587,880 1,173,352
NET ASSETS 36,483,241 33,326,301 35,407,938
EQUITY
Issued capital 16 58,886,707 47,881,352 47,881,352
Reserves 17 7,684,597 16,719,125 12,872,321
Accumulated losses (30,088,063) (31,274,176) (25,345,735)
TOTAL EQUITY 36,483,241 33,326,301 35,407,938
- - -
The above statement should be read in conjunction with the accompanying notes.
*The comparative information has been restated as a result of prior period
adjustments discussed in Note 1(m).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024
Issued Capital Share Based Payment Reserve Foreign Currency Translation Reserve Accumulated Losses Total
$ $ $ $ $
Balance at 1 July 2022, as previously reported 47,881,352 11,904,132 379,659 (24,365,633) 35,799,510
Adjustment for correction of error - - 588,530 (980,102) (391,572)
Balance at 1 July 2022, as restated 47,881,352 11,904,132 968,189 (25,345,735) 35,407,938
Loss attributable to members of the Company - - - (5,928,441) (5,928,441)
Other comprehensive income - - 1,913,286 - 1,913,286
Total comprehensive loss for the year - - 1,913,286 (5,928,441) (4,015,155)
Transactions with owners, recognised directly in equity
Share based payments - 1,933,518 - - 1,933,518
Balance at 30 June 2023, as restated 47,881,352 13,837,650 2,881,475 (31,274,176) 33,326,301
Balance at 1 July 2023, as restated 47,881,352 13,837,650 2,881,475 (31,274,176) 33,326,301
Loss attributable to members of the Company - - - (3,355,576) (3,355,576)
Other comprehensive loss - - (2,193,327) - (2,193,327)
Total comprehensive loss for the year - - (2,193,327) (3,355,576) (5,548,903)
Transactions with owners, recognised directly in equity
Shares issued during the year 9,889,116 - - - 9,889,116
Capital raising costs (3,841) - - - (3,841)
Exercise of options 1,120,080 - - - 1,120,080
Share based payments - (2,299,512) - - (2,299,512)
Transfer from performance rights/options reserve (4,541,689) 4,541,689 -
Balance at 30 June 2024 58,886,707 6,996,449 688,148 (30,088,063) 36,483,241
The above statement should be read in conjunction with the accompanying
notes.
*The comparative information has been restated as a result of prior period
adjustments discussed in Note 1(m).
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2024
30 June 2024 30 June 2023
Note $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Other income - 1,716,398
Payments to suppliers and employees (4,238,770) (3,596,566)
Interest received 827,502 438,823
Payments for Cinovec associated costs (10,334) (398,354)
Net cash (used in) operating activities 19 (3,421,602) (1,839,699)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (3,812) (4,191)
Payments for investments in associate (11,391,585) (8,420,065)
Net cash (used in) investing activities (11,395,397) (8,424,256)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 9,889,116 -
Capital raising costs paid (3,841) -
Proceeds from exercise of options 1,120,080 -
Payment for lease liability (62,616) (48,799)
Net cash provided by/(used in) financing activities 10,942,739 (48,799)
Net (decrease) in cash and cash equivalents (3,874,259) (10,312,754)
Cash and cash equivalents at the beginning of the financial year 8,892,951 19,055,509
Exchange differences in foreign currency held (291,317) 150,196
Cash and cash equivalents at the end of financial year 9 4,727,375 8,892,951
The above statement should be read in conjunction with the accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES
(a) Basis of preparation
These consolidated financial statements and notes represent those of European
Metals Holdings Limited ("EMHL" or "the Company") and its Controlled Entities
(the "Consolidated Group" or "Group").
The consolidated financial statements are general purpose financial
statements, which have been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Boards (AASB) and the
Corporations Act 2001. The Group is a for-profit entity for financial
reporting purposes under Australian Accounting Standards.
The accounting policies detailed below have been adopted in the preparation of
the financial report. Except for cash flow information, the consolidated
financial statements have been prepared on an accrual basis and are based on
historical cost, modified, where applicable, by the measurement at fair values
of selected non-current assets, financial assets and financial liabilities.
The Company is a listed public company, incorporated in Australia. The Company
was previously incorporated in the British Virgin Islands however redomiciled
on 7 May 2024.
(i) New and Revised Accounting Standards Adopted by the Group
The Group has adopted all the new or amended Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ("AASB")
that are mandatory for the current reporting period.
New and revised Accounting Standards for Application in Future Periods
Any new, revised or amending Accounting Standards or Interpretations that are
not yet mandatory have not been early adopted. The adoption of these
Accounting Standards and Interpretations would not have any significant impact
on the financial performance or position of the Group.
There are no other standards that are not yet effective and that would be
expected to have a material impact on the entity in the current or future
reporting period and on foreseeable future transactions.
(ii) Statement of Compliance
Australian Accounting Standards set out accounting policies that the AASB has
concluded would result in the financial statements containing relevant and
reliable information about transactions, events and conditions. Compliance
with Australian Accounting Standards ensures that the financial statements and
notes also comply with International Financial Reporting Standards as issued
by the IASB.
(iii) Financial Position
The Directors have prepared the consolidated financial statements on going
concern basis, which contemplates continuity of normal business activities and
the realisation of assets and extinguishment of liabilities in the ordinary
course of business.
At 30 June 2024, the Group comprising the Company and its subsidiaries has
incurred a loss for the year amounting to $3,355,576 (2023: loss of
$5,928,441). The Group has a net working capital surplus of $4,439,972 (2023:
surplus of $2,624,525) and cash and cash equivalents of $4,727,375 (2023:
$8,892,951).
The Directors have prepared a cash flow forecast, which indicates that the
Company will have sufficient cash flows to meet all commitments and working
capital requirements for the 12-month period from the date of signing this
financial report.
Based on the cash flow forecasts, the Directors are satisfied that the going
concern basis of preparation is appropriate.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES
(iv) Critical accounting estimates and judgements
The application of accounting policies requires the use of judgements,
estimates and assumptions about carrying values of assets and liabilities that
are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions are recognised in the period in which the estimate is revised if it
affects only that period or in the period of the revision and future periods
if the revision affects both current and future periods.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees and
consultants by reference to the estimated fair value of the equity instruments
at the date at which they are granted. These are expensed over the estimated
vesting periods. Judgement has been exercised on the probability and timing of
achieving milestones related to performance rights granted to Directors.
Recognition of deferred tax assets
Deferred tax assets relating to temporary differences and unused tax losses
have not been recognised as the Directors are of the opinion that it is not
probable that future taxable profit will be available against which the
benefits of the deferred tax assets can be utilised.
Investment in associate
Control exists where the parent entity is exposed or has the rights to
variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee. Power over the
investee exists when it has existing rights to direct the relevant activities
of the investee which are those which significantly affect the investee's
returns. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities
require the unanimous consent of the parties sharing control. Significant
influence exists if the Group holds 20% or more of the voting power of an
investee and has the power to participate in the financial and operating
policy decisions of the entity.
Judgements are required by the Group to consider the existence of control,
joint control or significant influence over an investee. The Group has
considered its investment in Geomet concluding the Group has significant
influence but not control or joint control. Control and joint control do not
exist as the Group does not direct and does not have the power to direct the
relevant activities of Geomet, this lies with the Geomet board, of which there
are only 2 directors out of 5 in common with the Group, and Geomet CEO and CFO
who are employed and work directly for Geomet.
(b) Income Tax
Current income tax expense charged to the profit or loss is the tax payable on
taxable income calculated using applicable income tax rates enacted, or
substantially enacted, as at reporting date. Current tax liabilities
(assets) are therefore measured at the amounts expected to be paid to
(recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and
deferred tax liability balances during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited
directly to equity instead of the profit or loss when the tax relates to items
that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. Deferred tax assets
also result where amounts have been fully expensed but future tax deductions
are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where
there is no effect on accounting or taxable profit or loss.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(b) Income Tax (continued)
Deferred tax assets and liabilities are calculated at the tax rates that are
expected to apply to the period when the asset is realised or the liability is
settled, based on tax rates enacted or substantively enacted at reporting
date. Their measurement also reflects the manner in which management expects
to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses
are recognised only to the extent that it is probable that future taxable
profit will be available against which the benefits of the deferred tax asset
can be utilised. Where temporary differences exist in relation to investments
in subsidiaries, branches, associates, and joint ventures, deferred tax assets
and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled, and it is not probable that the
reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable
right of set-off exists and it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally enforceable
right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where it is intended that net settlement
or simultaneous realisation and settlement of the respective asset and
liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
(c) Impairment of Assets
At the end of each reporting period the Group assesses whether there is an
indication that an asset may be impaired. If any such indication exists, or
when annual impairment testing for an asset is required, the Group makes an
estimate of the asset's recoverable amount. An asset's recoverable amount is
the higher of its fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of
assets and the asset's value in use cannot be estimated to be close to its
fair value. In such cases the asset is tested for impairment as part of the
cash-generating unit to which it belongs. When the carrying amount of an asset
or cash-generating unit exceeds its recoverable amount, the asset or
cash-generating unit is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
Impairment losses relating to continuing operations are recognised in those
expense categories consistent with the function of the impaired asset unless
the asset is carried at revalued amount in which case the impairment loss is
treated as a revaluation decrease.
An assessment is also made at each reporting period as to whether there is any
indication that previously recognised impairment losses may no longer exist or
may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there
has been a change in the estimates used to determine the asset's recoverable
amount since the last impairment loss was recognised. If that is the case the
carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for
the asset in prior years.
Such reversal is recognised in profit or loss unless the asset is carried at
revalued amount, in which case the reversal is treated as a revaluation
increase. After such a reversal the depreciation charge is adjusted in future
periods to allocate the asset's revised carrying amount, less any residual
value, on a systematic basis over its remaining useful life.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(d) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of
three months or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities in the Statement of Financial
Position.
(e) Revenue
Interest
Interest income is recognised using the effective interest method.
Services Revenue
Revenue is recognised at an amount that reflects the consideration to which
the Group is expected to be entitled in exchange for transferring goods or
services to a customer. For each contract with a customer, the Group:
identifies the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which takes into
account estimates of variable consideration and the time value of money;
allocates the transaction price to the separate performance obligations on the
basis of the relative stand-alone selling price of each distinct good or
service to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised.
(f) Goods and Services Tax (GST)
Revenues, expenses, and assets are recognised net of the amount of GST, except
where the amount of GST incurred is not recoverable from the Australian Tax
Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and
payables in the Statement of Financial Position are shown inclusive of GST.
Cash flows are presented in the Statement of Cash Flows on a gross basis,
except for the GST component of investing and financing activities, which are
disclosed as operating cash flows.
(g) Financial Instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial instrument.
Financial instruments (except for trade receivables) are measured initially at
fair value adjusted by transaction costs, except for those carried at 'fair
value through profit or loss', in which case transaction costs are expensed to
profit or loss. Where available, quoted prices in an active market are used
to determine the fair value. In other circumstances, valuation techniques are
adopted. Subsequent measurement of financial assets and financial liabilities
are described below.
Trade receivables are initially measured at the transaction price if the
receivables do not contain significant financing component in accordance with
AASB 15 Revenue from Contracts with Customers.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and all
substantial risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expired.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(g) Financial Instruments (continued)
Classification and measurement
Financial assets
Except for those trade receivables that do not contain a significant financing
component and are measured at the transaction price in accordance with AASB 15
Revenue from Contracts with Customers, all financial assets are initially
measured at fair value adjusted for transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets other than those
designated and effective as hedging instruments are classified into the
following categories upon initial recognition:
· amortised cost;
· fair value through other comprehensive income (FVOCI); and
· fair value through profit or loss (FVPL).
Classifications are determined by both:
· the contractual cash flow characteristics of the financial assets; and
· the Group's business model for managing the financial asset.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet with the
following conditions (and are not designated as FVPL);
· they are held within a business model whose objective is to hold the
financial assets and collect its contractual cash flows; and
· the contractual terms of the financial assets give rise to cash flows that
are solely payments of principal and interest on the principal amount
outstanding.
For debt instruments at fair value through OCI, interest income, foreign
exchange revaluation and impairment losses or reversals are recognised in the
statement of profit or loss and computed in the same manner as for financial
assets measured at amortised cost. The remaining fair value changes are
recognised in OCI.
After initial recognition, these are measured at amortised cost using the
effective interest method. Discounting is omitted where the effect of
discounting is immaterial. The Group's cash and cash equivalents, trade and
most other receivables fall into this category of financial instruments.
Financial assets at fair value through other comprehensive income
The Group measures debt instruments at fair value through OCI if both of the
following conditions are met:
· the contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the
principal amount outstanding; and
· the financial asset is held within a business model with the objective of
both holding to collect contractual cash flows and selling the financial
asset.
Upon initial recognition, the Group can elect to classify irrevocably its
equity investments as equity instruments designated at fair value through OCI
when they meet the definition of equity under AASB 132 Financial Instruments:
Presentation and are not held for trading.
Financial assets at fair value through profit or loss (FVPL)
Financial assets at fair value through profit or loss include financial assets
held for trading, financial assets designated upon initial recognition at fair
value through profit or loss or financial assets mandatorily required to be
measured at fair value. Financial assets are classified as held for trading
if they are acquired for the purpose of selling or repurchasing in the near
term.
For trade receivables and advance to associate, the Group applies a simplified
approach in calculating expected credit losses ('ECLs). Therefore, the Group
does not track changes in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(g) Financial Instruments (continued)
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables or as derivatives designated as hedging instruments in an effective
hedge, as appropriate.
Financial liabilities are initially measured at fair value, and, where
applicable, adjusted for transaction costs unless the Group designated a
financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the
effective interest method except for derivatives and financial liabilities
designated at FVPL, which are carried subsequently at fair value with gains or
losses recognised in profit or loss.
All interest-related charges and, if applicable, gains and losses arising on
changes in fair value are recognised in profit or loss.
(h) Segment reporting
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the Group's
other components. Operating segments' results are reviewed by the Group's
Executive Chairman to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete financial
information is available.
(i) Principles of Consolidation
The consolidated financial statements incorporate all of the assets,
liabilities and results of the parent European Metals Holdings Limited and all
of the subsidiaries. Subsidiaries are entities the parent controls. The parent
controls an entity when it 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 over the entity. A list of the subsidiaries is
provided in Note 22.
The assets, liabilities and results of all subsidiaries are fully consolidated
into the financial statements of the Group from the date on which control is
obtained by the Group. The consolidation of a subsidiary is discontinued from
the date that control ceases. Intercompany transactions, balances and
unrealised gains or losses on transactions between Group entities are fully
eliminated on consolidation. Accounting policies of subsidiaries have been
changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to
the Group are presented as "non-controlling interests". The Group initially
recognises non-controlling interests that are present ownership interests in
subsidiaries and are entitled to a proportionate share of the subsidiary's net
assets on liquidation at either fair value or at the non-controlling
interests' proportionate share of the subsidiary's net assets. Subsequent to
initial recognition, non-controlling interests are attributed their share of
profit or loss and each component of other comprehensive income.
Non-controlling interests are shown separately within the equity section of
the statement of financial position and statement of comprehensive income.
(j) Share based payments
The grant date fair value of share-based payment awards granted to employees
is recognised as an employee expense, with a corresponding increase in equity,
over the period that the employees unconditionally become entitled to the
awards. The amount recognised as an expense is adjusted to reflect the number
of awards for which the related service and non-market vesting conditions are
expected to be met, such that the amount ultimately recognised as an expense
is based on the number of awards that do not meet the related service and
non-market performance conditions at the vesting date. For share-based payment
awards with non-vesting conditions, the grant date fair value of the
share-based payment is measured to reflect such conditions and there is no
true-up for differences between expected and actual outcomes.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(j) Share based payments
Loan shares are treated similar to options and value is an estimate calculated
using an appropriate mathematical formula based on Black-Scholes option
pricing model. The choice of models and the resultant Loan share value
require assumptions to be made in relation to the likelihood and timing of the
vesting of the Loan shares and the value and volatility of the price of the
underlying shares.
(k) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group's entities is measured using the
currency of the primary economic environment in which that entity operates.
The consolidated financial statements are presented in Australian dollars
which is the parent entity's functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using
the exchange rates prevailing at the date of the transaction. Foreign currency
monetary items are translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at the exchange rate
at the
date of the transaction. Non-monetary items measured at fair value are
reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are
recognised in Profit or Loss, except where deferred in equity as a qualifying
cash flow or net investment hedge. Exchange differences arising on the
translation of non-monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in other comprehensive
income; otherwise the exchange difference is recognised in Profit or Loss.
Group companies
The financial results and position of foreign operations whose functional
currency is different from the Group's presentation currency are translated as
follows:
· Assets and liabilities are translated at year end exchange rates prevailing
at the end of the reporting period;
· Income and expenses are translated at average exchange rates for the
period; and
· Retained earnings are translated at the exchange rates prevailing at the
date of the transaction.
Exchange differences arising on translation of foreign operations recognised
in the other comprehensive income and included in the foreign currency
translation reserve in the Statement of Financial Position. These differences
are reclassified into Profit or Loss in the period in which the operation is
disposed.
(l) Investments in 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.
When the consolidated entity's share of losses in an associate equal 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.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(m) Restatement of comparatives
Correction of error
On 28 April 2020, the Company announced the investment of EUR 29,100,000
(circa A$ 48,850,092) by CEZ a.s. ("CEZ") for a 51% equity interest in Geomet,
the Company's wholly owned Czech subsidiary at the time, and holder of the
Cinovec licenses, had been completed. The Company ceased to fully consolidate
Geomet's results within EMH's consolidated accounts effective from this date
and commenced equity accounting its investment in Geomet, as an associate.
At 30 June 2020, the Company inadvertently recognised its portion of that
period's share of Geomet's loss as a profit, resulting in a misstatement of
the investment in associate's carrying value. In May 2023, the Company
agreed to a further investment of $5,627,057 million (circa EUR 3,432,217) to
maintain its 49% shareholding. The Company inadvertently neglected to
provide for this obligation as a payable at 30 June 2023, and accordingly also
understated its investment by this amount. The balance was subsequently
settled on 7 July 2023. The Company also noted that historical balances were
converted directly from CZK to AUD, where they should have been converted into
GBP as the functional currency of the holding company. The noted errors have,
in turn, had a resultant impact on the exchange difference on translating the
investment since its acquisition.
Extracts (being only those line items affected) are disclosed below.
Consolidated Statement of profit or loss and other comprehensive income 30 Jun 2023 30 Jun 2023
$ $ $
As Reported Adjustment Restated
Loss for the period (5,928,441) - (5,928,441)
Other comprehensive income: -
- Exchange differences on translating foreign operations (25,342) - (25,342)
- Exchange difference on translating investment in Geomet 4,528,258 (2,589,521) 1,938,737
Other comprehensive income/(loss) for the period, net of tax 4,502,916 (2,589,521) 1,913,395
Total comprehensive loss for the period (1,425,525) (2,589,521) (4,015,046)
Consolidated statement of financial position at the end of the comparative 30 Jun 2023 30 Jun 2023
period
$ $ $
As Reported Adjustment Restated
Investment in associate 19,629,519 2,646,415 22,275,934
Total assets 37,267,766 2,646,415 39,914,181
Payable to associate - 5,627,507 5,627,507
Total liabilities 960,373 5,627,507 6,587,880
Net assets 36,307,393 (2,981,092) 33,326,301
Accumulated losses (30,294,074) (980,102) (31,274,176)
Reserves 18,720,115 (2,000,990) 16,719,125
Total equity 36,307,393 (2,981,092) 33,326,301
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(u) Restatement of comparatives (continued)
Consolidated statement of financial position at the beginning of the of 1 Jul 2022 1 Jul 2022
the earliest comparative period
$ $ $
As Reported Adjustment Restated
Investment in associate 16,946,419 (391,572) 16,554,847
Total assets 36,972,862 (391,572) 36,581,290
Net assets 35,799,510 (391,572) 35,407,938
Accumulated losses (24,365,633) (980,102) (25,345,735)
Reserves 12,283,791 588,530 12,872,321
Total equity 35,799,510 (391,572) 35,407,938
The prior period adjustment did not have an impact on the consolidated
statement of cash flows.
The prior period adjustment did not have an impact on the basic or diluted
earnings/(loss) per share.
NOTE 2: DETERMINATION OF FAIR VALUES
A number of the Group's accounting policies and disclosures require the
determination of fair value, for both financial and non-financial assets and
liabilities. Fair values have been determined for measurement and / or
disclosure purposes based on the following methods. When applicable, further
information about the assumptions made in determining fair values is disclosed
in the notes specific to that asset or liability.
When an asset or liability, financial or non-financial, is measured at fair
value for recognition or disclosure purposes, the fair value is based on the
price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date;
and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous
market.
Fair value is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming they act in their economic
best interests. For non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, are used, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three
levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifications are reviewed at each
reporting date and transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may
be used when internal expertise is either not available or when the valuation
is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of
an asset or liability from one period to another, an analysis is undertaken,
which includes a verification of the major inputs applied in the latest
valuation and a comparison, where applicable, with external sources of data.
NOTE 2: DETERMINATION OF FAIR VALUES (CONTINUED)
Share-based payment transactions
The fair value of the employee share options is measured using the
Black-Scholes formula. Measurement inputs include share price on measurement
date, exercise price of the instrument, expected volatility (based on weighted
average historic volatility adjusted for changes expected due to publicly
available information), weighted average expected life of the instruments
(based on historical experience and general option holder behaviour), expected
dividends, and the risk-free interest rate (based on government bonds).
Service and non-market performance conditions attached to the transactions are
not taken into account in determining the fair value.
The fair value of consultant share options is measured at the fee for the
services received, except for when the fair value of the services cannot be
estimated reliably, in which case the fair value is measured using the
Black-Scholes formula.
The fair value of performance rights granted to Directors is measured using
the share price at grant date. Service and non-market performance conditions
attached to the transactions are not taken into account in determining the
fair value.
NOTE 3: INCOME TAX
(a) Income tax expense 2024 2023
$ $
Current tax - -
Deferred tax - -
- -
Deferred income tax expense included in income tax expense comprises:
(Increase) in deferred tax assets - -
Increase in deferred tax liabilities* - -
- -
* Any capital gain on disposal of shares in Geomet held by EMH UK is
tax-exempt under the current UK legislation (Schedule 7AC of the Taxation of
Chargeable Gains Act 1992). For this reason, no deferred tax liability has
been recognised as at 30 June 2024.
NOTE 3: INCOME TAX (CONTINUED)
(b) Reconciliation of income tax expense to prima facie tax payable 2024 2023
$ $
Net loss before tax (3,355,576) (5,928,441)
Prima facie tax on operating loss at 25% (2023: 25%) (838,894) (1,482,110)
Add/(Less): Non-deductible items
Non-deductible expenses 854,198 1,333,306
Non-assessable income (574,878) -
Adjustments recognised in the current year in relation to the current tax of (37,663) 1,236
previous years
Current year tax loss not recognised - 188,998
Effect of temporary differences that would be recognised directly in equity (960) -
Temporary differences not recognised 598,197 (41,430)
Income tax attributable to operating profit/loss - -
The applicable weighted average effective tax rates are as follows: Nil% Nil%
Balance of franking account at year end Nil Nil
Deferred tax assets/(liabilities)
Tax losses 2,003,970 1,499,005
Other future deductions 768 -
Other receivables and other assets (27,456) (27,670)
Trade and other payables and Accruals 6,734 8,750
Right-of-use assets (41,553) (9,992)
Lease liabilities 41,045 10,194
Provisions 81,228 27,517
Unrecognised net deferred tax asset 2,064,735 1,507,804
Tax losses
Unused tax losses for which no deferred tax asset has been recognised 8,015,879 6,000,962
The Company is registered in Australia (previously the British Virgin Islands
(BVI) up to 7 May 2024). The Company is a tax resident of Australia. The
unused tax losses are representative of losses incurred in Australia. These
tax losses can only be utilised in the future if the continuity of ownership
test is passed, or failing that, the same business test is passed.
The Company is subject to UK taxation regulations in respect of European
Metals (UK) Limited.
NOTE 4: RELATED PARTY TRANSACTIONS
Transactions between related parties are at arms' length and on normal
commercial terms and conditions no more favourable than those available to
other parties unless otherwise stated.
During the year, the Company received a total of $1,009,490 (2023: 1,830,738)
from its associate, Geomet s.r.o. This amount is broken down as $868,741
(2023: $1,102,944) for providing services of managing the Cinovec project
development and $140,749 (2023: $727,794) for recharged costs. The balance
owing from Geomet s.r.o at 30 June 2024 is $94,802 (2023: $94,802). The
Company's Directors also received remuneration from Geomet s.r.o in arm's
length transaction during the financial year.
From July 2023, the Company received company secretarial, accounting and
bookkeeping services of $206,278 plus GST from Nexia, a company at which the
spouse of Executive Chairman, Keith Coughlan, acts as key management
personnel. Amount payable to Nexia as at 30 June 2024 was $37,969(2023:
$17,028).
On 31 May 2023 an unsecured loan of $8,418,872 (initial value of
CZK121,000,000) was advanced to Geomet s.r.o by the Company. The loan is due
for repayment on 31 December 2028 and carries a fixed interest rate at 8.8%
per annum. There have been no further loan advancements or repayments made
during the year. Interest charged and paid for the year was $717,173 (CZK
11,683,222). Closing balance of the loan is $8,430,289 (See Note 13)
There were no other transactions with related parties during the financial
year.
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION
Refer to the Remuneration Report contained in the Directors' Report for
details of the remuneration paid or payable to each member of the Group's key
management personnel (KMP) for the year ended 30 June 2024 and 30 June 2023.
The totals of remuneration paid to KMP during the year are as follows:
2024 2023
$ $
Short-term benefits 867,840 777,665
Post-employment benefits 27,500 27,500
Annual leave and long service leave 195,098 32,762
1,090,438 837,927
Equity settled (1,320,692) 302,040
(1,320,692) 302,040
Total (230,254) 1,139,967
Loans to Key Management Personnel
There were no loans to Key Management Personnel during the financial year
(2023: nil). The total value of loan shares at 30 June 2024 amounted to
$1,442,666 (30 June 2023: $1,442,666). The fair value of the remaining
1,350,000 loan shares is $1,442,666 at 30 June 2024. (See Note 17(d))
NOTE 6: OTHER INCOME
2024 2023
$ $
Service revenue - Cinovec project development 868,741 1,102,944
Other Income 127 13,349
868,868 1,116,293
NOTE 7: AUDITOR'S REMUNERATION
2024 2023
$ $
Auditor's services
Audit and review of financial report 65,677 63,443
other services 3,500 -
Under provision in prior year 8,775 -
77,952 63,443
NOTE 8: BASIC AND DILUTED LOSS PER SHARE
2024 2023
$ $
Basic and diluted loss per share (1.64) (3.14)
Loss attributable to members of European Metals Holdings Limited (3,355,576) (5,928,441)
Weighted average number of shares outstanding during the period 204,755,046 188,790,669
Potential ordinary shares of the Company consist of 1,000,000 options and
7,300,000 performance rights which were considered as being potentially
dilutive at balance date.
In accordance with AASB 133 'Earnings per Share' these options have been
excluded from the calculation of diluted loss per share due to their
antidilutive effect and as such, diluted loss per share is equal to basic loss
per share.
NOTE 9: CASH AND CASH EQUIVALENTS
2024 2023
$ $
Cash at bank 2,990,454 6,758,425
Term deposit 1,736,921 2,134,526
Total cash and cash equivalents in the consolidated Statement of Cash Flows 4,727,375 8,892,951
NOTE 10: TRADE AND OTHER RECEIVABLES
2024 2023
$ $
Trade receivables 94,802 94,802
GST and VAT receivable 47,068 38,903
Accrued management fees 243,310 -
Interest receivable 6,762 67,001
391,942 200,706
NOTE 11: OTHER ASSETS
2024 2023
$ $
Current
Prepayments - -
Other receivables 37,263 34,697
37,263 34,697
Non-Current
Bank guarantee on office lease 28,549 48,154
28,549 48,154
NOTE 12: INVESTMENT IN ASSOCIATE
2024 2023
$ $
(Restated)
Opening balance 22,275,934 16,554,847
Increase in investment 5,764,078 5,627,507
Share of loss - associates 5 (2,301,708) (1,845,158)
Share of the movement in foreign currency translation reserve - associates (2,206,706) 1,938,738
Closing balance 23,531,598 22,275,934
Effective 28 April 2020 and up to 30 June 2024, Geomet was equity accounted
(i.e. 49% of share of the profit or loss of the investee after the date of
acquisition) for as Investment in Associate by EMH. The Company was appointed
to provide services of managing the Cinovec project development.
Contingent liabilities, commitments and bank guarantees
Geomet had no contingent liabilities, commitments or bank guarantees at 30
June 2024.
NOTE 12: INVESTMENT IN ASSOCIATE (CONTINUED)
Summarised statement of financial position 2024 2023
$ $
Current assets 10,679,067 24,328,436
Non-current assets 74,233,700 64,599,159
Total assets 84,912,767 88,927,595
Current liabilities 1,892,298 5,785,887
Non-current liabilities 15,963,209 17,193,373
Total liabilities 17,855,507 22,979,260
Net assets 67,057,260 65,948,335
Summarised statement of profit or loss and other comprehensive income
Revenue 1,409,179 18,399
Expenses (6,058,543) (3,781,572)
Loss for the year (4,649,364) (3,763,173)
NOTE 13: ADVANCES TO ASSOCIATES
2024 2023
$ $
Advances to associate 8,430,289 8,418,872
8,430,289 8,418,872
On 31 May 2023 an unsecured loan of $8,418,872 (initial value of
CZK121,000,000) was advanced to Geomet s.r.o by the Company. The loan is due
for repayment on 31 December 2028 and carries a fixed interest rate at 8.8%
per annum.
NOTE 14: TRADE AND OTHER PAYABLES
2024 2023
$ $
Trade payables 238,376 747,492
Accrued expenses and other liabilities 121,483 71,485
359,859 818,977
NOTE 15: PROVISIONS
2024 2023
$ $
Current Liability
Provision for annual leave 219,139 16,570
Provision for long service leave 91,693 -
310,832 16,570
Non-current Liability
Provision for long service leave 329 84,051
329 84,051
NOTE 16: ISSUED CAPITAL
On the 7 May 2024 the Company redomiciled from the British Virgin Islands to
Australia. On redomiciliation all CDI's converted to shares on a 1:1 basis.
(a) Issued and paid up capital
2024 2023
$ $
Total issued capital 58,886,707 47,881,352
Shares Number 207,444,705 192,385,492
(b) Movements in shares
Date Number $
Balance at the beginning of the year 1 Jul 2023 186,042,485 47,881,352
Exercise of options 9 Jan 2023 6,343,007 -
Balance at the end of the year 30 Jun 2023 192,385,492 47,881,352
Balance at the beginning of the year 1 Jul 2023 192,385,492 47,881,352
Placement shares 23 Aug 2023 12,315,213 9,889,116
Exercise of options Various 2,624,000 1,120,080
Conversion of performance rights 28 Mar 2024 120,000 -
Transaction costs - (3,841)
Balance at end of the year 30 Jun 2024 207,444,705 58,886,707
(c) Capital risk management
The Group's objectives when managing capital is to safeguard its ability to
continue as a going concern, so that it may continue to provide returns for
shareholders and benefits for other stakeholders.
The capital structure of the Group consists of equity comprising issued
capital, reserves and accumulated losses.
NOTE 16: ISSUED CAPITAL (CONTINUED)
(c) Capital risk management (continued)
The Group does not have ready access to credit facilities, with the primary
source of funding being equity raisings. Therefore, the focus of the Group's
capital risk management is to maintain sufficient current working capital to
meet the requirements of the Group to meet exploration programs and corporate
overheads. The Group's strategy is to ensure appropriate liquidity is
maintained to meet anticipated operating requirements, with a view to
initiating appropriate capital raisings as required.
The working capital position of the Group at 30 June is as follows:
2024 2023
$ $
Cash and cash equivalents 4,727,375 8,892,951
Trade and other receivables 391,942 200,706
Other assets 37,263 34,697
Trade and other payables (359,859) (818,977)
Payable to associate - (5,627,507)
Provisions (310,832) (16,570)
Lease liability (45,917) (40,775)
Working capital surplus 4,439,972 2,624,525
The Group is not subject to any externally imposed capital requirements.
NOTE 17: RESERVES
2024 2023
$ $
Option reserve 17(a) 418,000 4,788,589
Performance shares reserve 17 (b) 3,471,444 3,471,444
Performance rights reserve 17 (c) 1,664,338 4,134,950
Loan shares reserve 17 (d) 1,442,667 1,442,667
Foreign currency translation reserve 17 (e) 688,148 2,881,475
Total Reserves 7,684,597 16,719,125
(a) Option reserve
2024 2023
$ $
Balance at the beginning of the financial year 4,788,589 4,370,589
Share based payment expense - 418,000
Transfer to retained earnings (4,370,589) -
Balance at the end of the financial year 418,000 4,788,589
NOTE 17: RESERVES (CONTINUED)
(a) Option reserve (continued)
The following options existed as at 30 June 2023 and 30 June 2024:
( )
Expiry date Balance at 30 Jun 2023 Issued during the year Exercised during the year Expired/ cancelled Balance at 30 Jun 2024
Options @ 42cents 23 Oct 2023(1) 2,024,000 - (2,024,000) - -
Options @ 45cents 23 Oct 2023(2) 600,000 - (600,000) - -
Options @ 80 cents(1) 31 Dec 2025(3) 2,000,000 - - (1,000,000) 1,000,000
Total 4,624,000 - (2,624,000) (1,000,000) 1,000,000
(1)2,024,000 unlisted options were exercised during the year as detailed in
the table above. The share capital for the options exercised was issued on 25
October 2023.
(2)600,000 unlisted options were exercised during the period as detailed in
the table above. The share capital for the options exercised was issued on 23
October 2023(.)( )
(3)2,000,000 options exercisable at $0.80 on or before 31 December 2025 were
granted to consultants on 15 June 2023, subject to vesting conditions. The
share-based payment expense of $418,000 was recognised in the consolidated
statement of profit or loss and other comprehensive income for the prior year.
1,000,000 did not meet vesting conditions and therefore lapsed on 28 March
2024.
(b) Performance shares reserve
The Performance shares reserve records the fair value of performance shares
issued. No performance shares were on issue at 30 June 2024.
Date Number $
Balance at the beginning of the year 1 Jul 2023 - 3,471,444
Balance at the end of the year 30 June 2024 - 3,471,444
(c) Performance rights reserve
30 June 2024 30 Jun 2023
Number $ Number $
Balance at the beginning of the year 7,470,000 4,134,950 5,800,000 2,619,432
Granted - - 1,670,000 1,515,518
Converted (120,000) - - -
Cancelled (50,000) - - -
Movement (1) - (2,299,512) - -
Transfer to retained earnings (171,100) - -
Balance at the end of the year 7,300,000 1,664,338 7,470,000 4,134,950
(1) Movement relates to reassessment of probability of performance rights
by management during the year.
NOTE 17: RESERVES(continued)
(d) Loan shares reserve
Employee securities incentive plan
In prior years, remuneration in the form of an employee securities incentive
plan was issued to the Directors and employees to attract, motivate and retain
such persons and to provide them with an incentive to deliver growth and value
to shareholders.
The loan shares reserve records the fair value of the loan shares issued.
The loan shares represent an option arrangement. Loan shares vested
immediately. The key terms of the employee share plan and of each limited
recourse loan provided under the plan are as follows:
i. The total loan equal to issue price multiplied by the number of
plan shares/shares applied for ("the Advance"), which shall be deemed to have
been drawn down at settlement upon issued of the loan shares.
ii. The loan shall be interest free. However, if the advance is not
repaid on or before the repayment date, the Advance will accrue interest at
the rate disclosed in the plan from the business day after the repayment date
until the date the Advance is repaid in full.
iii. All or part of the loan may be repaid prior to the Advance
repayment Date.
Repayment date
iv. Notwithstanding paragraph iii. above, ("the borrower") may repay
all or part of the Advance at any time before the repayment date i.e. the
repayment date for 1,650,000 Director shares - 15 years after the date of loan
advance and the repayment date for 1,500,000 Employee shares - 7 years after
the date of loan advice.
v. The Loan is repayable on the earlier of:
(a) The repayment date;
(b) The plan shares being sold;
(c) The borrower becoming insolvent;
(d) The borrower ceasing to be employed by the Company; and
(e) The plan shares being acquired by a third party by way of an
amalgamation, arrangement, or formal takeover bid for not less than all the
outstanding shares.
Loan forgiveness
vi. The Board may, in its sole discretion, waive the right to
repayment of all or any part of the outstanding balance of an Advance where:
(a) The borrower dies or becomes permanently disabled; or
(b) The Board otherwise determines that such waiver is appropriate
vii. Where the Board waives repayment of the Advance in accordance with
clause 6(a), the Advance is deemed to have been repaid in full for the
purposes of the plan in this agreement.
Sale of loan shares
viii. In accordance with the terms of the plan and the invitation, the
loan shares cannot be sold, transferred, assigned, charged or otherwise
encumbered with the plan shares except in accordance with the plan.
30 June 2024 30 Jun 2023
Number Amount Expensed Number Amount Expensed
Balance at beginning of the year 1,350,000 1,442,667 1,350,000 1,442,667
Loan shares repaid during the year - - - -
Balance at end of the year 1,350,000 1,442,667 1,350,000 1,442,667
NOTE 17: RESERVES(continued)
(d) Loan shares reserve (continued)
Loan shares entitle the holder to participate in dividends and the proceeds on
winding up of the Company in proportion to the number of shares held. On a
show of hands every holder of a share present at a meeting in person or by
proxy, is entitled to one vote, and in a poll each share is entitled to one
vote.
The Loan shares were issued to the executive members under the employee
securities incentive plan on 6 June 2018.
Holders of shares have the same entitlement benefits of holding the underlying
shares. Each share in the Company confers upon the Shareholder:
1. the right to one vote at a meeting of the shareholders of
the Company or on any resolution of shareholders;
2. the right to an equal share in any dividend paid by the
Company; and
3. the right to an equal share in the distribution of the
surplus assets of the Company on its liquidation.
Loan shares granted in prior years and existed during the financial year ended
30 June 2024:
Number Repaid during the year Number
30 June 2023 30 June 2024
Director Loan shares 1,350,000 - 1,350,000
1,350,000 - 1,350,000
No loan shares were granted/repaid during the financial year.
The total fair value of the loan shares was fully expensed in the consolidated
statement of profit or loss and other comprehensive income in the 2019
financial year.
A summary of the outstanding Director loan shares at 30 June 2024 and the
inputs used in the valuation of the loan shares issued to Directors are as
follows:
Loan shares Keith Coughlan Richard Pavlik Kiran Morzaria
Issue price $0.725 $0.725 $0.725
Share price at date of issue $0.70 $0.70 $0.70
Grant date 30 November 2017 30 November 2017 30 November 2017
Expected volatility 143.41% 143.41% 143.41%
Expiry date 30 November 2032 30 November 2032 30 November 2032
Expected dividends Nil Nil Nil
Risk free interest rate 2.47% 2.47% 2.47%
Value per loan $0.69676 $0.69676 $0.69676
Number of loan shares 850,000 300,000 200,000
Total value $592,245 $209,028 $139,352
NOTE 17: RESERVES(continued)
(e) Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising
on translation of foreign controlled subsidiaries, the Group's share of
foreign exchange movement in Geomet s.r.o.
2024 2023
$ $
(Restated)
Balance at the beginning of the financial year 2,881,475 968,189
Movement during the period (2,193,327) 1,913,286
Balance at the end of the period 688,148 2,881,475
NOTE 18: SHARE BASED PAYMENT EXPENSE
During the year, the Group incurred a share-based payments reversal for a
total of $2,299,512 resulting from the transactions detailed below.
(i) Share based payment arrangements granted in previous years/periods and
existing during the year ended 30 June 2024:
· On 17 December 2020, 3,600,000 performance rights were issued to
Directors. The performance rights were valued at $3,132,000 at grant date and
are being expensed over the vesting period as noted below. For the year ended
30 June 2024, management assessed the probability of achieving the financial
hurdles to be 100% for its Class A options and 0% for its Class B and C
options, as a result of which, a reversal of share-based payment expense of
$1,320,693 has been recognised in the consolidated statement of profit or loss
and other comprehensive income for the year.
Number granted Grant date Estimated Vesting Date Share price on grant date Value per right Total fair value % vested
Class A 1,200,000 17 Dec 20 2 March 2025 $0.87 $0.87 $1,044,000 0%
Class B 1,200,000 17 Dec 20 Post 2 March 2025 $0.87 $0.87 $1,044,000 0%
Class C 1,200,000 17 Dec 20 Post 2 March 2025 $0.87 $0.87 $1,044,000 0%
· On 24 November 2021, 50,000 performance rights were issued to a
consultant. The performance rights were valued at $76,750 at grant date. These
had fully vested, and total expense was recognised in 30 June 2022
consolidated statement of profit or loss and other comprehensive income. These
performance rights were converted to shares on 28 March 2024 and therefore
have been reversed from the reserve to retained earnings.
· On 24 November 2021, 50,000 performance rights were issued to a
consultant. The performance rights were valued at $76,750 at grant date. By 31
December 2023 a total amount of $46,050 had vested and was expensed, with
$17,189 being recognised in the consolidated statement of profit or loss and
other comprehensive income for the year. These performance rights were
cancelled on 28 March 2024 as conditions had not been met and therefore have
been reversed from the reserve to retained earnings.
NOTE 18: SHARE BASED PAYMENT EXPENSE (continued)
· On 22 February 2022, 900,000 performance rights were issued to a
consultant. The performance rights were valued at $1,044,000 at grant date and
are being expensed over the vesting period as noted below. For the year ended
30 June 2024, management assessed the probability of achieving the financial
hurdles to be 100% for its Class A options and 0% for its Class B and C
options, as a result of which, a reversal of share-based payment expense of
$318,591 has been recognised in the consolidated statement of profit or loss
and other comprehensive income for the year.
Number granted Grant date Estimated Vesting Date Share price on grant date Value per right Total fair value % vested
Class A 300,000 22 Feb 22 2 March 2025 $1.16 $1.16 $348,000 0%
Class B 300,000 22 Feb 22 Post 2 March 2025 $1.16 $1.16 $348,000 0%
Class C 300,000 22 Feb 22 Post 2 March 2025 $1.16 $1.16 $348,000 0%
· On 27 February 2022, 1,200,000 performance rights were issued to a
consultant. The performance rights were valued at $1,368,000 at grant date and
are being expensed over the vesting period as noted below. For the year ended
30 June 2024, management assessed the probability of achieving the financial
hurdles to be 100% for its Class A options and 0% for its Class B and C
options, as a result of which, a reversal of share-based payment expense of
$414,693 has been recognised in the consolidated statement of profit or loss
and other comprehensive income for the year.
Number granted Grant date Estimated Vesting Date Share price on grant date Value per right Total fair value % vested
Class A 400,000 27 Feb 22 2 March 2025 $1.14 $1.14 $456,000 0%
Class B 400,000 27 Feb 22 Post 2 March 2025 $1.14 $1.14 $456,000 0%
Class C 400,000 27 Feb 22 Post 2 March 2025 $1.14 $1.14 $456,000 0%
· On 29 August 2022, 750,000 performance rights were issued to an
employee. The performance rights were valued at $547,500 at grant date and are
being expensed over the vesting period as noted below. For the year ended 30
June 2024 management assessed the probability of achieving the hurdles to be
100% for Tranche 1 and 0% for Tranches 2 and 3, as a result of which, a
reversal of share-based payment expense of $113,928 was recognised in the
consolidated statement of profit or loss and other comprehensive income for
the year.
Number granted Grant date Estimated Vesting Date Share price on grant date Value per right Total fair value % vested
Tranche 1 250,000 29 Aug 22 2 March 2025 $0.73 $0.73 $182,500 0%
Tranche 2 250,000 29 Aug 22 Post 2 March 2025 $0.73 $0.73 $182,500 0%
Tranche 3 250,000 29 Aug 22 Post 2 March 2025 $0.73 $0.73 $182,500 0%
NOTE 18: SHARE BASED PAYMENT EXPENSE (continued)
· On 12 December 2022, 450,000 performance rights were issued to an
employee. The performance rights were valued at $301,500 at grant date and are
being expensed over the vesting period as noted below. For the year ended 30
June 2024, management assessed the probability of achieving the hurdles to be
0% for all Tranches, as a result of which, a reversal of share-based payment
expense of $107,705 was recognised in the consolidated statement of profit or
loss and other comprehensive income for the year.
Number granted Grant date Estimated Vesting Date Share price on grant date Value per right Total fair value % vested
Tranche 1 150,000 12 Dec 22 Post 2 March 2025 $0.67 $0.67 $100,500 0%
Tranche 2 150,000 12 Dec 22 Post 2 March 2025 $0.67 $0.67 $100,500 0%
Tranche 3 150,000 12 Dec 22 Post 2 March 2025 $0.67 $0.67 $100,500 0%
· On 13 December 2022, 300,000 performance rights were issued to an
employee. The performance rights were valued at $201,000 at grant date and are
being expensed over the vesting period as noted below. For the year ended 30
June 2024, management assessed the probability of achieving the to be 0% for
all Tranches, as a result of which, a reversal of share-based payment expense
of $71,587 was recognised in the consolidated statement of profit or loss and
other comprehensive income for the year.
Number granted Grant date Estimated Vesting Date Share price on grant date Value per right Total fair value % vested
Tranche 1 100,000 13 Dec 22 Post 2 March 2025 $0.67 $0.67 $67,000 0%
Tranche 2 100,000 13 Dec 22 Post 2 March 2025 $0.67 $0.67 $67,000 0%
Tranche 3 100,000 13 Dec 22 Post 2 March 2025 $0.67 $0.67 $67,000 0%
· On 14 December 2022, 170,000 performance rights were issued to an
employee. The performance rights were valued at $117,300 at grant date. 70,000
Tranche 1 performance rights had fully vested by 9 November 2023, and total
expense was recognised by 31 December 2023. These 70,000 Tranche 1 performance
rights were converted to shares on 28 March 2024 and therefore have been
reversed from the reserve to retained earnings. The remaining 100,000 tranche
2 performance rights are being expensed over the vesting period as noted
below. For the year ended 30 June 2024, management assessed the probability of
achieving the hurdles to be 100% for Tranche 2, as a result of which, a
share-based payment expense of $30,497 was recognised in the consolidated
statement of profit or loss and other comprehensive income for the year.
Number granted Grant date Estimated Vesting Date Share price on grant date Value per right Total fair value % vested
Tranche 2 100,000 14 Dec 22 1 October 2026 $0.69 $0.69 $69,000 0%
NOTE 19: CASH FLOW INFORMATION
2024 2023
$ $
Reconciliation of cash flow from operating activities with loss after tax:
Loss after income tax (3,355,576) (5,928,441)
Adjustments for:
Share based payments (2,299,512) 1,933,518
Finance costs 11,068 25,962
Foreign exchange loss 300,381 362,201
Depreciation and amortisation expenses 54,724 48,873
Equity accounted of investment in Geomet s.r.o. 2,301,708 1,845,158
Interest in assets and liabilities net of deemed disposal of subsidiary
Decrease/(Increase) in trade and other receivables and other assets (184,449) 40,302
(Decrease)/Increase in trade and other payables (460,486) (120,845)
(Decrease)/Increase in provisions 210,541 (46,427)
Cash flow used in operating activities (3,421,602) (1,839,699)
(b) Credit standby facilities
The Company had no credit standby facilities as at 30 June 2024 and 2023.
(c) Investing and Financing Activities - Non-Cash
There were no non-cash investing or financing activities during the year,
apart from an increase in lease liabilities of $123,403 following the
commencement of a new office lease agreement.
NOTE 20: OPERATING SEGMENTS
The accounting policies used by the Group in reporting segments are in
accordance with the measurement principles of Australian Accounting Standards.
The Group has identified its operating segments based on the internal reports
that are provided to the Board of Directors. According to AASB 8 Operating
Segments, two or more operating segments may be aggregated into a single
operating segment if the segments have similar economic characteristics, and
the segments are similar in each of the following respects:
• The nature of the products and services;
• The nature of the production processes;
• The type or class of customer for their products and services;
• The methods used to distribute their products or provide their
services; and
• If applicable, the nature of the regulatory environment, for
example; banking, insurance and public utilities.
Effective 28 April 2020, the Group has a 49% interest in Geomet s.r.o. which
is accounted for in accordance with AASB 128 Investment in Associates and
Joint Venture. Therefore, the Group has only one operating segment based on
geographical location. The Australian segment incorporates the services
provided to Geomet s.r.o. in relation to the Cinovec project development along
with head office and treasury function. Consequently, the financial
information for the sole operating segment is identical to the information
presented in these financial reports.
NOTE 21: FINANCIAL RISK MANAGEMENT
The Group's financial instruments consist mainly of deposits with banks, loans
to associated company, leases and accounts receivable and payable. The main
purpose of non-derivative financial instruments is to raise finance for
Group's operations. The Group does not speculate in the trading of derivative
instruments.
The Group holds the following financial instruments:
2024 2023
$ $
Financial assets
Cash 4,727,375 8,892,951
Trade and other receivables 391,942 200,706
Other Assets 65,812 82,851
Advances to associate 8,430,289 8,418,872
Total financial assets 13,615,418 17,595,380
Financial liabilities
Trade and other payables 359,859 818,977
Lease liability 164,178 40,775
Total financial assets 524,037 859,752
The fair value of the Group's financial assets and liabilities approximate
their carrying value.
Specific Financial Risk Exposures and Management
The Group's activities expose it to a variety of financial risks: market risk
(including currency risk, interest rate risk and price risk) credit risk and
liquidity risk.
(i) Market risk
The Board meets on a regular basis to analyse currency and interest rate
exposure and to evaluate treasury management strategies in the context of the
most recent economic conditions and forecasts.
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial
liabilities recognised at the end of the reporting period whereby a future
change in interest rates will affect future cash flows or the fair value of
fixed rate financial instruments. The Group is also exposed to earnings
volatility on floating rate instruments. Interest rate risk is not material to
the Group as no interest-bearing debt arrangements have been entered into.
Price risk
Price risk relates to the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices. The
Group is not exposed to significant price risk.
Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash
flows of a financial instrument fluctuating due to movement in foreign
exchange rates of currencies in which the Group holds financial instruments
which are other than the AUD functional currency of the Group.
With instruments being held by overseas operations, fluctuations in foreign
currencies may impact on the Group's financial results. The Group's exposure
to foreign exchange risk is monitored by the Board. The majority of the
Group's funds are held in Australian dollars, British Sterling and the Euro.
NOTE 21: FINANCIAL RISK MANAGEMENT (CONTINUED)
(ii) Market risk (continued)
Foreign exchange risk (continued)
At 30 June 2024, the Group has financial assets and liabilities denominated in
the foreign currencies detailed below:
2024 2023
Amount in EUR Amount in GBP Amount in USD Amount in EUR Amount in GBP Amount in USD
Cash and cash equivalents in EMH 2,080,365 48,100 - 2,018,189 48,287 -
Trade and other payables in EMH 35,000 19,693 5,882 6,300 12,909 3,901
2,115,365 67,793 5,882 2,024,489 61,196 3,901
5% effect in foreign exchange rates 105,768 3,390 294 101,224 3,060 195
Other than intercompany balances there were no financial assets and
liabilities denominated in foreign currencies for EMH UK.
(ii) Credit risk
Credit exposure represents the extent of credit related losses that the Group
may be subject to on amounts to be received from financial assets. Credit risk
arises principally from trade and other receivables. The objective of the
Group is to minimise the risk of loss from credit risk. The Group trades only
with creditworthy third parties. In addition, receivable balances are
monitored on an ongoing basis with the result that the Group's exposure to bad
debts is insignificant. The Group's maximum credit risk exposure is limited to
the carrying value of its financial assets as indicated on the Consolidated
Statement of Financial Position and notes to the consolidated financial
statements.
The credit quality of the financial assets was high during the year. The
table below details the credit quality of the financial assets at the end of
the year:
2024 2023
Financial assets Credit Quality $ $
Cash and cash equivalents held at Westpac Bank High 2,456,825 2,045,240
Cash and cash equivalents held at ANZ bank High 2,270,550 6,847,711
Bank guarantee held at ANZ bank High 28,549 48,154
Trade and other receivables High 391,942 200,706
Other assets High 37,263 34,697
Advances to associate High 8,430,289 8,418,872
13,615,418 17,595,380
NOTE 21: FINANCIAL RISK MANAGEMENT (CONTINUED)
(iii) Liquidity risk
Liquidity risk is the risk that the entity will not be able to meet its
financial obligations as they fall due. The objective of the Group is to
maintain sufficient liquidity to meet commitments under normal and stressed
conditions.
Prudent liquidity risk management implies maintaining sufficient cash and
marketable securities, and the availability of funding through an adequate
amount of committed credit facilities. The Group aims at maintaining
flexibility in funding by maintaining adequate reserves of liquidity.
The following are the contractual maturities of financial assets and financial
liabilities, including estimated interest receipts and payments and excluding
the impact of netting arrangements.
Carrying Amount Contractual Cash flows <3 months 3-6 months 6-24 months >24 months
As at 30 June 2024 $ $ $ $ $ $
Financial assets
Cash and cash equivalents 4,727,375 4,727,375 4,727,375 - - -
Trade and other receivables 391,942 391,942 391,942 - - -
Other assets 65,812 65,812 37,263 - 28,549 -
Advances to associate 8,430,289 8,430,289 - - - 8,430,289
Cash inflows 13,615,418 13,615,418 5,156,580 - 28,549 8,430,289
Financial liabilities
Trade and other payables 359,859 359,859 359,859 - -
Lease liabilities 164,178 164,178 6,576 13,746 96,188 47,668
Cash outflows 524,037 524,037 366,435 13,746 96,188 47,668
Carrying Amount Contractual Cash flows <3 months 3-6 months 6-24 months >24 months
As at 30 June 2023 $ $ $ $ $
Financial assets
Cash and cash equivalents 8,892,951 8,892,951 8,892,951 - - -
Trade and other receivables 200,706 200,706 200,706 - - -
Other assets 82,851 82,851 34,697 - 48,154 -
Advances to associate 8,418,872 8,418,872 - - - 8,418,872
Cash inflows 17,595,380 17,595,380 9,128,354 - 48,154 8,418,872
Financial liabilities
Trade and other payables 818,977 818,977 818,977 - - -
Lease liabilities 40,775 40,775 12,047 12,201 16,527 -
Cash outflows 859,752 859,752 831,024 12,201 16,527 -
NOTE 21: FINANCIAL RISK MANAGEMENT (CONTINUED)
(iii) Interest rate risk
From time to time the Group has significant interest-bearing assets, but they
are as a result of the timing of equity raising and capital expenditure rather
than a reliance on interest income. The interest rate risk arises on the rise
and fall of interest rates. The Group's exposure to interest rate risk, which
is the risk that a financial instrument's value will fluctuate as a result of
changes in market interest rates and the effective weighted average interest
rate for each class of financial assets and financial liabilities comprises:
As at 30 June 2024 Weighted Average Interest Rate Floating Interest Rate Fixed Interest Rate Non-interest bearing Total
Financial assets % $ $ $ $
Cash and cash equivalents 0.905% 2,990,454 1,736,921 - 4,727,376
Trade and other receivables - - 391,942 391,942
Bank guarantee - 28,549 - 28,549
Other assets - - 37,263 37,263
Advances to associate 8.8% - 8,430,289 - 8,430,289
2,990,454 10,195,759 429,205 13,615,419
Financial liabilities
Trade and other payables - - 359,859 359,859
Lease liabilities - 164,178 - 164,178
- 164,178 359,859 524,037
As at 30 June 2023 Weighted Average Interest Rate Floating Interest Rate Fixed Interest Rate Non-interest bearing Total
Financial assets % $ $ $ $
Cash and cash equivalents 1.05% - 2,134,526 6,758,425 8,892,951
Trade and other receivables - - 200,706 200,706
Bank guarantee - 48,154 - 48,154
Other assets - - 34,697 34,697
Advances to associate 8.8% - 8,418,872 - 8,418,872
- 10,601,552 6,993,828 17,595,380
Financial liabilities
Trade and other payables - - 818,977 818,977
Lease liabilities - 40,775 - 40,775
- 40,775 818,977 859,752
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in the interest rates at the reporting date would
have increased or decreased the Group's equity and profit or loss by $29,905
(2023: $21,345).
NOTE 21: FINANCIAL RISK MANAGEMENT (CONTINUED)
(iv) Net fair value of financial assets and liabilities
The net fair value of cash and cash equivalents and non-interest-bearing
monetary assets and financial liabilities approximates their carrying values.
NOTE 22: CONTROLLED ENTITIES
Subsidiaries of European Metals Holdings Limited
Controlled entity Country of Incorporation Class of Shares Percentage Owned
2024 2023
European Metals UK Limited (EMH UK) United Kingdom Ordinary 100% 100%
EMH (Australia) Pty Ltd Australia Ordinary 100% 100%
NOTE 23: PARENT ENTITY DISCLOSURE
The following information has been extracted from the books and records of the
parent, European Metals Holdings Limited, and has been prepared in accordance
with Australian Accounting Standards.
2024 2023
$ $
ASSETS
Current assets 5,156,582 9,128,354
Non-current assets 20,023,040 8,511,087
TOTAL ASSETS 25,179,621 17,639,441
LIABILITIES
Current liabilities 709,160 864,563
Non-current liabilities 118,590 84,051
TOTAL LIABILITIES 827,750 948,614
NET ASSETS 24,351,871 16,690,827
EQUITY
Issued capital 58,886,707 47,881,352
Reserves 12,983,323 13,837,650
Accumulated losses (47,518,159) (45,028,175)
TOTAL EQUITY 24,351,871 16,690,827
- -
Profit or Loss and Other Comprehensive Income
Loss for the year (2,491,091) (4,094,183)
Total comprehensive loss (2,491,091) (4,094,183)
Guarantees
There are no guarantees entered into by European Metals Holdings Limited for
the debts of its subsidiaries as at 30 June 2024.
NOTE 23: PARENT ENTITY DISCLOSURE (CONTINUED)
Contingent liabilities
There are no contingent liabilities of the parent as at 30 June 2024 and 30
June 2023.
Commitments
There were no commitments for the parent as at 30 June 2024 and 30 June 2023.
Material accounting policy information
The accounting policies of the parent entity are consistent with those of the
consolidated entity, as disclosed in note 1, except for the following:
- Investments in subsidiaries are accounted for at cost, less any impairment,
in the parent entity.
NOTE 24: CAPITAL COMMITMENTS
There are no capital commitments for the Group as at 30 June 2024 and 30 June
2023.
NOTE 25: CONTINGENT LIABILITIES
There are no contingent liabilities for the Group as at 30 June 2024 and 30
June 2023.
NOTE 26: SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 31 July 2024, and post the reporting period, the Company provided a further
project update (refer to the Company's ASX/ AIM release dated 31 July 2024)
(Cinovec Lithium Project Update). The Company advised that the timeline for
the completion of the DFS and therefore construction of the Cinovec lithium
processing plant continue to be worked on. Given the change to the location of
the lithium processing plant from Dukla to Prunéřov, additional geotechnical
work is currently underway to confirm the optimal construction method and
layout at the new site. Results from this geotechnical work are expected to be
available at the end of September. DRA is then expected to provide a detailed
timeline and begin the DFS finalisation program of work.
The Project team continues to progress several DFS-related programs on the
Front-End Comminution and Beneficiation circuit ("FECAB") and LCP to improve
the overall flowsheet which are expected to positively impact Project
economics.
CONSOLIDATED ENTITY DISCLOSURE STATEMENT AS AT 30 JUNE 2024
Entity name Entity type Place formed / Country of incorporation Ownership interest Tax residency
%
European Metals Holding Limited Body corporate Australia 100% Australia
European Metals UK Limited (EMH UK) Body corporate United Kingdom 100% United Kingdom
EMH (Australia) Pty Ltd Body corporate Australia 100% Australia
DIRECTORS' DECLARATION
The Directors of the Company declare that:
1. the consolidated financial statements, notes and the additional disclosures
are in accordance with the Corporations Act 2001 including:
(a) complying with Accounting Standards;
(b) are in accordance with International Financial Reporting Standards issued by
the International Accounting Standards Board, as stated in Note 1 to the
financial statements; and
(c) give a true and fair view of the financial position as at 30 June 2024 and of
the performance for the year ended on that date of the Group.
2. the Chief Executive Officer and Chief Finance Officer have each declared that:
(a) the financial records of the Group for the financial year have been properly
maintained in accordance with s286 of the Corporations Act 2001;
(b) the consolidated financial statements and notes for the financial year comply
with the Accounting Standards; and
(c) the consolidated financial statements and notes for the financial year give a
true and fair view.
3. in the Directors' opinion there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and payable.
4 The information disclosed in the consolidated entity disclosure statement on
in this annual report is true and correct.
The directors have been given the declarations required by section 295A of the
Corporations Act.
Signed in accordance with a resolution of directors made pursuant to section
295(5)(a) of the Corporations Act 2001.
Keith Coughlan
EXECUTIVE CHAIRMAN
Dated at Perth on 30 September 2024
additional information
The following additional information is required by the Australian Securities
Exchange in respect of listed public companies only.
1 Shareholding as at 10 September 2024
(a) Distribution of Shareholders
Number and percentage
Category (size of holding) of Shareholders
1 - 1,000 608 (0.17%)
1,001 - 5,000 794 (1.00%)
5,001 - 10,000 353 (1.34%)
10,001 - 100,000 498 (7.74%)
100,001 - and over 168 (89.76%)
2,421
(b) The number of shareholdings held in less than marketable parcels is 1,111.
(c) Voting Rights
The voting rights attached to each class of equity security are as follows:
207,444,705 shares/DI's
- Each share/ DI is entitled to one vote when a poll is called, otherwise each
member present at a meeting or by proxy has one vote on a show of hands.
(d) 20 Largest Shareholders - Shares/ DI's as at 10 September 2024
Rank Shareholder Percentage of capital held
Number of shares/ DI's held
1 ARMCO BARRIERS PTY LTD 13,644,000 6.58%
2 EUROCLEAR NOMINEES LIMITED EOC01 12,371,555 5.96%
3 BNP PARIBAS NOMINEES PTY LTD CLEARSTREAM 11,065,033 5.33%
4 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 10,233,888 4.93%
5 HARGREAVES LANSDOWN (NOMINEES) LIMITED 15942 7,635,722 3.68%
6 EUROPEAN ENERGY & INFRASTRUCTURE GROUP LIMITED 6,343,007 3.06%
7 CITICORP NOMINEES PTY LIMITED 5,919,455 2.85%
8 BNP PARIBAS NOMS PTY LTD 5,256,819 2.53%
9 INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED SMKTISAS 5,031,922 2.43%
10 INSWINGER HOLDINGS PTY LTD 4,900,000 2.36%
11 BARCLAYS DIRECT INVESTING NOMINEES LIMITED CLIENT1 4,607,550 2.22%
12 HARGREAVES LANSDOWN (NOMINEES) LIMITED VRA 4,572,963 2.20%
13 VIDACOS NOMINEES LIMITED CLRLUX 4,070,661 1.96%
14 LAWSHARE NOMINEES LIMITED SIPP 3,422,536 1.65%
15 HSDL NOMINEES LIMITED MAXI 3,176,353 1.53%
16 BNP PARIBAS NOMINEES PTY LTD 2,701,555 1.30%
17 HARGREAVES LANSDOWN (NOMINEES) LIMITED HLNOM 2,375,361 1.15%
18 INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED SMKTNOMS 2,313,851 1.12%
19 WILGUS INVESTMENTS PTY LTD 2,210,000 1.07%
20 MR RICHARD KELLER 2,203,000 1.06%
Total Top 20 Shareholders 114,055,231 54.98
2 The name of the Company Secretary is Mr Henko Vos.
3 The address of the principal registered office is Level 3, 88 William St,
Perth WA 6000. Telephone +61 8 6245 2050.
4 Registers of securities are held at the following addresses
Computershare Investor Services Limited
Level 17
221 St Georges Terrace
Perth, Western Australia, 6000
5 Securities Exchange Listing
Quotation has been granted for all the shares/ DI's of the Company on all
Member Exchanges of the Australian Securities Exchange Limited.
6 Unquoted Securities
A total of 1,000,000 options over unissued shares/ DI's are on issue.
A total of 7,300,000 performance rights are on issue.
7 Use of Funds
The Company has used its funds in accordance with its business objectives.
TENEMENT SCHEDULE
Permit Code Deposit Interest at beginning of Quarter Acquired / Disposed Interest at end of Quarter
Cinovec 100% N/A 100%
Exploration Area N/A
Cinovec II 100% N/A 100%
Cinovec III 100% N/A 100%
Cinovec IV 100% N/A 100%
Preliminary Mining Permit Cinovec II Cinovec South 100% N/A 100%
Cinovec III Cinovec East 100% N/A 100%
Cinovec IV Cinovec NorthWest 100% N/A 100%
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. END FR FIFSDARIIVIS Recent news on European Metals Holdings
See all newsREG - European Metals Hldg - Notice of AGM
AnnouncementREG - European Metals Hldg - Quarterly Activities/Appendix 5B Cash Flow Report
AnnouncementREG - European Metals Hldg - USD 36m JTF Grant Approved for Cinovec Project
AnnouncementREG - European Metals Hldg - Corporate Governance Statement
AnnouncementREG - European Metals Hldg - Transitional Annual Report to Shareholders
Announcement