REG - Neometals Ltd - Annual Financial Report
29/09/2023 08:30
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RNS Number : 1574O Neometals Ltd 29 September 2023
29 September 2023
Neometals Ltd
("Neometals" or "the Company")
Annual Financial Report
for the financial year ended 30 June 2023
Emerging sustainable battery materials producer, Neometals Ltd (ASX: NMT &
AIM: NMT) advises that a copy of the Company's Annual Report for the year
ended 30 June 2023 (the "Annual Report") has been lodged on the ASX along with
the Company's 2023 year-end Corporate Governance Statement and Appendix 4G.The
Annual Report, which was sent to shareholders today, is available on the
Company's website at https://www.neometals.com.au/
(https://www.neometals.com.au/) along with copies of each of these other
documents.
Set out below is the Chairman's Statement as included in the Annual Report.
Also, set out below is a summary of the Company's audited financial
information for the year ended 30 June 2023 as extracted from the Annual
Report, being:
· Consolidated Statement of Comprehensive Income;
· Consolidated Statement of Financial Position;
· Consolidated Statement of Changes in Equity;
· Consolidated Statement of Cash Flows; and
· Notes to the consolidated financial statements.
ENDS
For more information, please contact:
Neometals Ltd
Chris Reed, Managing Director & Chief Executive Officer +61 8 9322 1182
Jeremy McManus, General Manager - Commercial & Investor Relations +61 8 9322 1182
Cavendish Securities plc - NOMAD & Joint Broker
Neil McDonald +44 (0)131 220 9771
Peter Lynch +44 (0)131 220 9772
Adam Rae +44 (0)131 220 9778
RBC Capital Markets - Joint Broker +44 (0) 20 7653 4000
Paul Betts
Jamil Miah
Camarco PR + 44(0) 20 3 757 4980
Gordon Poole
Emily Hall
Lily Pettifar
For further information visit www.neometals.com.au
(http://www.neometals.com.au/) .
Chairman Statement
Dear Shareholders,
2022/2023 proved to be a challenging period in the Neometals' development
journey with several of the Company's core projects approaching critical
milestones against softness in relevant global commodity and capital markets
which resulted in downward pressure on the Company's share price.
Specifically, the Company's two European recycling business units (Lithium-ion
("LiB") Battery Recycling and Vanadium Recovery continued to progress with the
following material developments crystallising after the close of the financial
year:
a) Primobius GmbH LiB recycling joint venture - delivered its refinery
'Hub' engineering cost study and most recently the Mercedes-Benz ("Mercedes")
purchase order was received for fabrication / installation and commissioning
of the Mercedes 10tpd LiB recycling shredding "Spoke" plant package;
b) Finland Vanadium Recovery Project("VRP1") joint venture - executed an
agreement with Glencore International AG ("Glencore") for guaranteed 100%
offtake of VRP1 vanadium products.
In addition, the Company's Lithium Chemical business unit continues to advance
its ELi(TM) technology with robust refinery Engineering Cost Study results
announced and pilot demonstration activities ongoing alongside preparations
for next stage demonstration trials in Portugal with potential joint venture
partner, Bondalti Chemicals, Portugal's largest chemical company.
Further, Neometals continues to assess the optimal strategy to return
Barrambie value to shareholders.
Strategically, the global drive to mitigate climate change has continued to
put the spotlight squarely on sustainability, the energy transition and
circular economics. The Company's three core projects (LiB Recycling, Vanadium
Recovery and Lithium Chemicals) are well positioned to be the beneficiaries of
this drive, with myriad European and North American policy, regulation and
industry tailwinds supporting the Neometals strategy.
Alongside this annual report, Neometals will also be issuing its 2023 annual
Sustainability Report reflecting the strong commitment it is making to ESG
principles which underpin Neometals' obligation to the communities in which it
operates and the people with whom it works.
Finally, the dedication and support of the Company's management team and Board
warrant acknowledgement, without all of whom the Company's continuing growth
and success would not be possible.
Neometals is clear on its purpose, its values and its strategy. Specifically,
the Company supports the transition to a greener and circular economy and
looks to deliver value to its shareholders and its communities through
sustainable production of battery materials using proprietary downstream
processes.
In financial year 2023, your Company's Board and management applied themselves
diligently towards delivering on that purpose for the benefit of its
stakeholders and investors generally. The growing awareness of Neometals' and
the exciting opportunities before it bode well for 2023/2024.
In closing, we thank all our stakeholders for their ongoing support.
Steven Cole Chris Reed
CHAIRMAN
MANAGING DIRECTOR
Consolidated statement of profit or loss and other comprehensive income
for the year ended 30 June 2023
Note 2023 2022
$ $
Continuing operations
Interest and other income 5a 1,061,585 1,166,904
Employee expenses 5b (11,155,509) (8,778,942)
Occupancy expenses (188,662) (211,087)
AIM listing fee - (2,986,844)
Finance costs (29,859) (76,163)
Other expenses 5b (10,563,595) (10,697,790)
Marketing expenses (450,914) (518,084)
Foreign exchange gain/(loss) 61,466 (20,915)
Impairment (expense)/reversal on investment in associate 23 (1,273,045) 7,079,641
Impairment (expense)/reversal on investment in joint venture 22(i) (2,716,703) -
Share of loss in associate 23 (3,412,514) (318,287)
Share of loss in joint ventures 22(ii and iii) (7,298,801) (872,667)
Loss on disposal of subsidiary 22(iv) (212,473) -
Loss before income tax (36,179,024) (16,234,234)
Income tax benefit 8 1,374,655 5,066,295
Loss for the year from continuing operations (34,804,369) (11,167,939)
Discontinued operations
Profit for the year from discontinuing operations 6 and 7 - 15,528,639
(Loss)/profit for the year from continuing and discontinuing operations (34,804,369) 4,360,700
Other comprehensive income - -
Total comprehensive (loss)/profit for the year (34,804,369) 4,360,700
(Loss)/earnings per share
From continuing and discontinued operations:
Basic (cents per share) 19 (6.30) 0.80
Diluted (cents per share) 19 (6.30) 0.79
The consolidated statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
Consolidated statement of financial position as at 30 June 2023
Note 2023 2022
$ $
Current assets
Cash and cash equivalents 28 (a) 24,438,695 60,158,159
Trade and other receivables 11 2,031,604 518,007
Other financial assets 12 763,650 2,229,500
Total current assets 27,233,949 62,905,666
Non-current assets
Loan to joint ventures 22 - 350,000
Exploration and evaluation expenditure 13 47,364,711 41,415,749
Intangibles 945,994 999,270
Investments in joint ventures 22 5,449,045 5,458,508
Investment in associate 23 9,677,933 13,668,977
Other financial assets 12 5,298,971 5,298,971
Right of use assets 21 895,690 293,266
Property, plant and equipment 14 877,269 650,132
Total non-current assets 70,509,613 68,134,873
Total assets 97,743,562 131,040,539
Current liabilities
Trade and other payables 15 2,190,866 2,236,332
Provisions 16 1,021,613 1,053,518
Lease liability 21 285,625 371,756
Total current liabilities 3,498,104 3,661,606
Non-current liabilities
Provisions 16 72,685 -
Lease liability 21 652,049 -
Deferred tax liability 8 - 782,904
Total non-current liabilities 724,734 782,904
Total liabilities 4,222,838 4,444,510
Net assets 93,520,724 126,596,029
Equity
Issued capital 17 146,234,171 145,564,286
Reserves 18 10,835,122 9,775,943
Accumulated losses (63,548,569) (28,744,200)
Total equity 93,520,724 126,596,029
This consolidated statement of financial position should be read in
conjunction with the accompanying notes.
Consolidated statement of changes in equity
for the year ended 30 June 2023
Issued Investment revaluation reserve Other Share Accumulated Total
Capital $ equity based losses $
$ reserve payments $
$ reserve
$
Balance at 30/06/21 154,634,997 1,019,637 300,349 7,721,414 (16,908,128) 146,768,269
Gain for the period - - - - 4,360,700 4,360,700
Total comprehensive income for the period - - - - 4,360,700 4,360,700
Recognition of share-based payments (see note 10 and 18) - - - 1,474,081 - 1,474,081
Recognition of shares issued under performance rights plan 739,538 - - (739,538) - -
In-Specie Distribution (9,803,228) - - - (16,196,772) (26,000,000)
Share issue costs, net of tax (7,021) - - - - (7,021)
Balance at 30/06/22 145,564,286 1,019,637 300,349 8,455,957 (28,744,200) 126,596,029
Loss for the period - - - - (34,804,369) (34,804,369)
Total comprehensive income for the period - - - - (34,804,369) (34,804,369)
Recognition of share-based payments (see note 10 and 18) - - - 1,747,438 - 1,747,438
Recognition of shares issued under performance rights plan 688,259 - - (688,259) - -
Share issue costs, net of tax (18,374) - - - - (18,374)
Balance at 30/06/23 146,234,171 1,019,637 300,349 9,515,136 (63,548,569) 93,520,724
This consolidated statement of changes in equity should be read in conjunction
with the accompanying notes.
Consolidated statement of cash flows
for the year ended 30 June 2023
Note 2023 2022
$ $
Cash flows from operating activities
Research and development refund - 1,796,876
Payments to suppliers and employees (20,398,542) (25,626,023)
Payments to suppliers - discontinued operations - (1,248,630)
Net cash used in operating activities 28 (b) (20,398,542) (25,077,777)
Cash flows from investing activities
Payments for property, plant & equipment (435,530) (210,820)
Payments for intellectual property (159,198) (244,190)
Payments for exploration and evaluation (5,827,390) (4,882,350)
Payments for exploration and evaluation - discontinued operations - (505,680)
Interest received 1,050,819 257,359
Payments for purchase of investments (425,838) (3,741,729)
Receipts from sale of investments 1,215,791 2,771,705
Investment in associate (694,515) (2,038,056)
Investment in joint ventures 22 (9,656,039) (3,799,838)
Net cash used in by investing activities (14,931,900) (12,393,599)
Cash flows from financing activities
Share issue costs (18,374) (7,022)
Amounts received for security deposits - 4,000,000
Lease payments (347,854) (328,420)
Interest and other finance costs paid (26,999) (53,537)
Net cash generated by / (used in) financing activities (393,227) 3,611,021
Net (decrease)/increase in cash and cash equivalents (35,723,669) (33,860,355)
Cash and cash equivalents at the beginning of the financial year 60,158,159 93,984,074
Effect of exchange rates on cash balances 4,205 34,440
Cash and cash equivalents at the end of the financial year 28 (a) 24,438,695 60,158,159
This consolidated statement of cash flows should be read in conjunction with
the accompanying notes.
Index to Notes to the consolidated financial statements
Note Contents
1 General information
2 Significant accounting policies
3 Critical accounting judgments and key sources of estimation uncertainty
4 Parent entity disclosure
5 Profit / loss for the year continuing operations
6 Gain on demerger
7 Discontinued operations
8 Income taxes
9 Key management personnel compensation
10 Share based payments
11 Trade and other receivables
12 Other financial assets
13 Exploration and evaluation expenditure
14 Property, plant and equipment
15 Trade and other payables
16 Provisions
17 Issued capital
18 Reserves
19 Earnings per share
20 Commitments for expenditure
21 Leases
22 Joint arrangements
23 Investment in associates
24 Subsidiaries
25 Segment information
26 Related party disclosures
27 Auditor's remuneration
28 Notes to the statement of cash flows
29 Financial instruments
30 Contingent liabilities
31 Events after the reporting period
1. General information
Neometals Ltd is a limited public company incorporated in Australia and listed
on the Australian Securities Exchange. The principal activities of the
Consolidated Entity are development and commercialisation of
environmentally-friendly processing technologies. Neometals Ltd is the
ultimate parent.
Registered office and principal place of business
Level 1, 1292 Hay St, West Perth WA 6005
2. Significant accounting policies
Statement of compliance
These financial statements are general purpose financial statements which have
been prepared in accordance with the Corporations Act 2001, Accounting
Standards and Interpretations, and complies with other requirements of the
law. The financial statements comprise the consolidated financial statements
of the Consolidated Entity, comprising Neometals Ltd and its controlled
entities. For the purpose of preparing the financial statements the
consolidated entity is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with
Australian Accounting Standards ensures that the financial statements and
notes of the Company and the Group comply with International Financial
Reporting Standards ("IFRS").
The financial statements were authorised for issue by the directors of
Neometals Ltd on 29 September 2023.
Basis of preparation
The financial report has been prepared on a going concern basis. These
accounting policies are consistent with Australian Accounting Standards and
with IFRS.
The Group has adopted all of the new and revised Standards and Interpretations
issued by the Australian Accounting Standards Boards ("AASB") that are
relevant to its operations and effective for the current reporting period
beginning 1 July 2022.
The financial report has been prepared on the basis of historical cost except
for the revaluation of certain non-financial assets and financial
instruments. Cost is based on the fair values of the consideration given in
exchange for assets. All amounts are presented in Australian dollars, unless
otherwise noted.
Going concern
The Directors believe that Neometals Ltd will continue as a going concern, and
as a result the financial statements have been prepared on the going concern
basis, which contemplates the continuity of normal business activity and the
realisation of assets and the settlement of liabilities in the normal course
of business.
The Group incurred losses after tax from continuing operations of $34,804,369
(30 June 2022: $11,167,939) and experienced net cash outflows from operating
and investing activities of $35,330,442 (30 June 2022: $37,471,376) for the
year ended 30 June 2023. As at 30 June 2023 the Group had cash and cash
equivalents of $24,438,695 (30 June 2022: $60,158,159 and net current assets
of $23,735,845 (30 June 2022: $59,244,060).
The directors recognise that additional funding is required to meet the
Group's budgeted ongoing activities. The directors have prepared a cash flow
forecast for the period ending 30 September 2024 which indicates minimum
funding of $15 million will be required progressively from February 2024 by
way of debt, equity or other forms of funding to continue to progress its
projects through to 30 September 2024. The forecast assumes expenditures on
the development and expansion of all of the Group's core projects including
required expenditures to advance the Group's Vanadium Recovery and Barrambie
Titanium/Vanadium projects towards a final investment decision. However, the
cash flow forecast does not assume that development activities commence in
relation to any of the Group's projects in the period ending 30 September
2024. Further, Neometals has the ability to defer discretionary expenditure
should adequate funding not be secured by February 2024, however, additional
funding will still be required during the period to 30 September 2024.
Should a final investment decision be made with respect to the Group's
projects, the cash flow forecast will be updated to identify any additional
funding required for development, be this in the form of debt, equity or other
forms of funding, or a combination of these options.
Based on the advanced nature of discussions with various parties and the
directors' expectation that the additional funding will be secured within the
required timeframe, the directors reasonably believe that they will achieve
the matters set out above and therefore the going concern basis of preparation
is appropriate.
Should the Group be unable to achieve the additional funding referred to
above, there is a material uncertainty that may cast significant doubt as to
whether the Group will be able to continue as a going concern and, therefore,
whether it will realise its assets and discharge its liabilities in the normal
course of business.
No adjustments have been made to the financial statements relating to the
recoverability and classification of recorded asset amounts or to the amounts
and classification of liabilities that might be necessary should the Group not
continue as a going concern.
Standards and interpretations adopted in the current year
The Group has adopted all of the new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board (AASB) that are relevant
to its operations and effective for an accounting period that begins on or
after 1 July 2022.
New and revised Standards and amendments thereof and Interpretations effective
for the current year that are relevant to the Group include:
· AASB 2020-3 Amendments to Australian Accounting Standards -
Annual Improvements 2018-2020 and Other Amendments
· AASB 2021-7 Amendments to Australian Accounting Standards -
Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections
Standards and interpretations issued but not yet effective
At the date of authorisation of the financial statements, the following
Australian Accounting Standards and Interpretations have been issued or
amended but are not yet effective and have not been adopted by the Group for
the year ended 30 June 2023:
Effective for annual reporting periods beginning on or after Expected to be initially applied in the financial year ending
Standard
□
AASB 2014-10 'Amendments to Australian Accounting Standards - Sale or
Contribution of Assets between an Investor and its Associate or Joint Venture
and AASB 2015-10 Amendments to Australian Accounting Standards - Effective 1 January 2025 30 June 2026
Date of Amendments to AASB 10 and AASB 128'
□
AASB 2020-1 Amendments to Australian Accounting Standards - Classification of
Liabilities as Current or Non-Current and AASB 2020-6 Amendments to Australian
Accounting Standards - Classification of Liabilities as Current or Non-current 1 January 2024 30 June 2025
- Deferral of Effective Date
□
AASB 2021-2 Amendments to Australian Accounting Standards - Disclosure of 1 January 2023 30 June 2024
Accounting Policies and Definition of Accounting Estimates
Australian Accounting Standards and Interpretations that have recently been
issued or amended but are not yet mandatory, have not been early adopted by
the Company for the annual reporting period ended 30 June 2023. The Company is
assessing the impact of the new standards, however does not expect them to
have a material impact on the Company in the current of future reporting
periods and on foreseeable future transactions.
Critical accounting judgments and key sources of estimation uncertainty
In the application of the Group's accounting policies, management is required
to make judgments, 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 to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods. Refer to note 3 for a discussion of critical judgments in
applying the entity's accounting policies, and key sources of estimation
uncertainty.
Significant accounting policies
The following significant accounting policies have been adopted in the
preparation and presentation of the financial report:
(a) Cash and cash equivalents
Cash comprises cash on hand and term deposits with a 30 day cancellation
policy. Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
(b) Employee benefits
A liability is recognised for benefits accruing to employees in respect of
wages and salaries, annual leave, long service leave, and sick leave when it
is probable that settlement will be required and they are capable of being
measured reliably.
Liabilities recognised in respect of short-term employee benefits, are
measured at their nominal values using the remuneration rate expected to apply
at the time of settlement.
Liabilities recognised in respect of long term employee benefits are measured
as the present value of the estimated future cash outflows to be made by the
Group in respect of services provided by employees up to reporting date.
(c) Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The consolidated financial
statements are presented in Australian dollar ($), which is Neometals Ltd's
functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are generally recognised in profit or
loss.
All other foreign exchange gains and losses are presented in the statement of
profit or loss on a net basis within other income or other expenses.
(d) Financial instruments issued by the company
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity
in accordance with the substance of the contractual arrangement.
Financial assets
Financial instruments and non-financial assets such as investments in unlisted
entities, are initially measured at fair value plus transaction costs except
where the instrument is classified 'at fair value through profit or loss' in
which case transaction costs are expensed immediately.
Financial instruments are subsequently measured at fair value through profit
or loss (FVTPL), amortised cost using the effective interest rate method or at
cost. Fair value represents 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. Quoted prices in an active market are
used to determine fair value where possible. The group does not designate any
interest in subsidiaries, associates or joint venture entities as being
subject to the requirements of accounting standards specifically applicable to
financial instruments.
Amortised cost instruments are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and are
subsequently measured at amortised cost using the effective interest rate
method.
By default, all other debt investments and equity investments are measured
subsequently at fair value through profit or loss (FVTPL).
The Group classifies its financial assets into the following categories: those
to be measured subsequently at fair value (either through other comprehensive
income 'FVOCI' or through the income statement 'FVTPL') and those to be held
at amortised cost. The classification depends on the Group's business model
for managing its financial assets and the contractual terms of the cash flows.
All assets for which fair value is recognised or disclosed are categorised
within the fair value hierarchy, based on the lowest level input that is
significant to the fair value measurement as a whole, as follows:
- Level 1 - Quoted market prices in active markets for identical
assets.
- Level 2 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is directly or indirectly
observable.
- Level 3 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is unobservable.
External valuers are involved for valuation of unlisted investments and
unquoted financial assets. Involvement of external valuers is determined
annually with selection criteria including market knowledge, reputation,
independence and whether professional standards are maintained.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on
investments in debt and equity instruments that are measured at amortised
cost, FVTPL or at FVTOCI. The amount of expected credit losses is updated at
each reporting date to reflect changes in credit risk since initial
recognition of the respective financial instrument. The Group recognises
lifetime ECL (expected credit loss) when there has been a significant increase
in credit risk since initial recognition. However, if the credit risk on the
financial instrument has not increased significantly since initial
recognition, the Group measures the loss allowance for that financial
instrument at an amount equal to 12-month ECL. Lifetime ECL represents the
expected credit losses that will result from all possible default events over
the expected life of a financial instrument. In contrast, 12-month ECL
represents the portion of lifetime ECL that is expected to result from default
events on a financial instrument that are possible within 12 months after the
reporting date.
There has been no change in the estimation techniques or significant
assumptions made during the current reporting period in assessing the loss
allowance for these financial assets.
Financial liabilities
Financial liabilities are classified as either financial liabilities 'at fair
value through profit or loss' or other financial liabilities.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as at fair value through profit or loss
where the financial liability is either held for trading or it is designated
as at fair value through profit or loss.
A financial liability is held for trading if:
· It has been incurred principally for the purpose of
repurchasing in the near future; or
· It is a part of an identified portfolio of financial
instruments that the Group manages together and has a recent actual pattern of
short-term profit-taking; or
· It is a derivative that is not designated and effective as a
hedging instrument.
A financial liability other than a financial liability held for trading is
designated as at fair value through profit or loss upon initial recognition
if:
· such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise arise; or
· the financial liability forms part of a group of financial
assets or financial liabilities or both, which is managed and its performance
evaluated on a fair value basis, in accordance with the Group's documented
risk management or investment strategy, and information about the grouping is
provided internally on that basis; or
· it forms part of a contract containing one or more embedded
derivatives, and AASB 9 'Financial Instruments' permits the entire combined
contract (asset or liability) to be designated as at fair value through profit
or loss.
Financial liabilities at fair value through profit or loss are stated at fair
value, with any resultant gain or loss recognised in profit or loss. The net
gain or loss recognised in profit or loss incorporates any interest paid on
the financial liability.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at
fair value, net of transaction costs. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method,
with interest expense recognised on an effective yield basis. The effective
interest method is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial liability, or, where
appropriate, a shorter period.
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are recognised
directly in equity as a reduction of the proceeds of the equity instruments to
which the costs relate. Transaction costs are the costs that are incurred
directly in connection with the issue of those equity instruments and which
would not have been incurred had those instruments not been issued.
Interest and dividends
Interest and dividends are classified as expenses or as distributions of
profit consistent with the balance sheet classification of the related debt or
equity instruments or component parts of compound instruments.
(e) Goods and service tax
Other income, expenses and assets are recognised net of the amount of goods
and services tax ("GST"), except:
i) where the amount of GST incurred is not recoverable from the taxation
authority, it is recognised as part of the cost of acquisition of an asset or
as part of an item of expense; or
ii) for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority
is included as part of receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST
component of cash flows arising from investing and financing activities which
is recoverable from, or payable to, the taxation authority is classified as
operating cash flows.
(f) Non-current assets held for sale
Non-current assets and their disposal groups are classified as held for sale
if their carrying amount will be recovered principally through a sale
transaction rather than continuing use. This condition is regarded as met only
when the sale is highly probable and the non-current asset (or disposal group)
is available for immediate sale in its present condition. Management must be
committed to the sale which should be expected to qualify for recognition as a
completed sale within one year from the date of classification.
When the Group is committed to a sale plan involving loss of control of a
subsidiary, all of the assets and liabilities of that subsidiary are
classified as held for sale when the criteria described above are met,
regardless of whether the Group will retain a non-controlling interest in its
former subsidiary after the sale. Non-current assets (and disposal groups)
classified as held for sale are measured at the lower of their previous
carrying amount and fair value less cost to sell.
(g) Impairment of non-financial assets
At each reporting date, the consolidated entity reviews the carrying amounts
of its tangible and intangible assets, excluding exploration and evaluation
assets, to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the consolidated entity estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in
use. 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 for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash-generating unit) is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased carrying amount
does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset (cash-generating unit) in prior
years. A reversal of an impairment loss is recognised in profit or loss
immediately.
(h) Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable
or recoverable in respect of the taxable profit or tax loss for the period. It
is calculated using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax for current and prior
periods is recognised as a liability (or asset) to the extent that it is
unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability
method in respect of temporary differences arising from differences between
the carrying amount of assets and liabilities in the financial statements and
the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are recognised to the extent that
it is probable that sufficient taxable amounts will be available against which
deductible temporary differences or unused tax losses and tax offsets can be
utilised. However, deferred tax assets and liabilities are not recognised if
the temporary differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a result of a business
combination) which affects neither taxable income nor accounting profit.
Furthermore, a deferred tax liability is not recognised in relation to taxable
temporary differences arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, branches, associates and joint
ventures except where the consolidated entity is able to control the reversal
of the temporary differences and it is probable that the temporary differences
will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with these investments and
interests are only recognised to the extent that it is probable that there
will be sufficient taxable profits against which to utilise the benefits of
the temporary differences and they are expected to reverse in the foreseeable
future.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period(s) when the asset and liability giving rise to
them are realised or settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by reporting date. The measurement of
deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the consolidated entity expects, at the
reporting date, to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and liabilities are offset when they relate to income
taxes levied by the same taxation authority and the Company/Consolidated
Entity intends to settle its current tax assets and liabilities on a net
basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the profit
and loss statement, except when it relates to items credited or debited
directly to equity, in which case the deferred tax is also recognised directly
in equity, or where it arises from the initial accounting for a business
combination, in which case it is taken into account in the determination of
goodwill or gain on a bargain purchase.
Tax consolidation
The Company and all its wholly-owned Australian resident entities are part of
a tax-consolidated group under Australian taxation law. Neometals Ltd is the
head entity in the tax-consolidated group. Income tax expense/benefit,
deferred tax liabilities and deferred tax assets arising from temporary
differences of the members of the tax consolidated group are recognised in the
separate financial statements of the members of the tax consolidated group
using a 'group allocation' approach based on the allocation specified in the
tax funding arrangement.
The tax funding arrangement requires a notional current and deferred tax
calculation for each entity as if it were a taxpayer in its own right, except
that unrealised profits, distributions made and received and capital gains and
losses and similar items arising on transactions within the tax consolidated
group are treated as having no consequence. Current tax liabilities and
assets and deferred tax assets arising from unused tax losses and tax credits
of the members of the tax consolidated group are recognised by the Company (as
head entity in the tax consolidated group).
Due to the existence of a tax funding arrangement between the entities in the
tax consolidated group, amounts are recognised as payable to or receivable by
the Company and each member of the group in relation to the tax contribution
amounts paid or payable between the parent and the other members of the tax
consolidated group in accordance with the arrangement. In addition to the
Company own current and deferred tax amounts, the company does not recognise
the losses of the members of the tax consolidated group as intercompany
liabilities, it is recognised as part of the equity of the company. When the
company becomes reasonably certain that it will have to reimburse the
subsidiary for its losses, the company recognises an intercompany liability.
Where the tax contribution amount recognised by each member of the tax
consolidated group for a particular period is different to the aggregate of
the current tax liability or asset and any deferred tax asset arising from the
unused tax losses and tax credits in respect of that period, the difference is
recognised as a contribution from, or distribution to, equity participants.
Research & Development Tax offset
In respect of Research and Development tax offsets, the Income tax approach
(AASB 112) of accounting has been utilised, where the tax benefit is presented
within the tax line in the Statement of Comprehensive Income.
(i) Exploration and evaluation expenditure
Exploration and evaluation expenditures, excluding general overhead, in
relation to separate areas of interest are capitalised in the year in which
they are incurred and are carried at cost less accumulated impairment losses
where the following conditions are satisfied;
i) the rights to tenure of the area of interest are current;
and
ii) at least one of the following conditions is also met:
- the exploration and evaluation expenditures are expected to be recouped
through successful development and exploration of the area of interest, or
alternatively, by its sale; or
- exploration and evaluation activities in the area of interest have not
at the reporting date reached a stage which permits a reasonable assessment of
the existence or otherwise of economically recoverable reserves, and active
and significant operations in, or in relation to, the area of interest are
continuing.
Capitalised exploration costs for each area of interest (considered to be the
cash generating unit) are reviewed each reporting date to test whether an
indication of impairment exists. If any such indication exists, the
recoverable amount of the capitalised exploration costs is estimated to
determine the extent of the impairment loss (if any). The recoverable amount
for capitalised exploration costs has been determined as the fair value less
costs to sell by reference to an active market. Where an impairment loss
subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset in
previous years.
Where a decision is made to proceed with development, accumulated expenditure
is tested for impairment and transferred to capitalised development and then
amortised over the life of the reserves associated with the area of interest
once mining operations have commenced.
Development expenditure
Development expenditure is recognised at cost less any impairment losses.
Where commercial production in an area of interest has commenced, the
associated costs are amortised over the life of the reserves associated with
the area of interest. Changes in factors such as estimates of proved and
probable reserves that effect unit-of-production calculations are dealt with
on a prospective basis.
(j) Payables
Trade payables and other accounts payable are recognised when the Consolidated
Entity becomes obliged to make future payments resulting from the purchase of
goods and services.
(k) Principles of consolidation
The consolidated financial statements are prepared by combining the financial
statements of all the entities that comprise the Consolidated Entity, being
the Company (the parent entity) and its subsidiaries as defined in Accounting
Standard AASB 10 'Consolidated Financial Statements'. A list of subsidiaries
appears in note 24 to the financial statements. Consistent accounting
policies are employed in the preparation and presentation of the consolidated
financial statements.
On acquisition, the assets, liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair values of the identifiable net
assets acquired is recognised as goodwill. If, after reassessment, the fair
value of the identifiable net assets acquired exceeds the cost of acquisition,
the excess is credited to profit and loss in the period of acquisition. The
consolidated financial statements include the information and results of each
subsidiary from the date on which the Company obtains control and until such
time as the Company ceases to control such entity. In preparing the
consolidated financial statements, all inter-company balances and
transactions, and unrealised profits arising within the consolidated entity
are eliminated in full.
(l) Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and
impairment. Cost includes expenditure that is directly attributable to the
acquisition of the item. In the event that settlement of all or part of the
purchase consideration is deferred, costs are determined by discounting the
amounts payable in the future to their present value as at the date of
acquisition.
Depreciation is calculated on a diminishing value basis so as to write off the
net cost or other re-valued amount of each asset over its expected useful life
to its estimated residual value. The estimated useful lives, residual values
and depreciation method are reviewed at the end of each annual reporting
period with the effect of any changes recognised on a prospective basis.
The following estimated useful lives are used in the calculation of
depreciation:
Furniture &
Fittings
5-20 years
Plant and
Equipment
2-10 years
Buildings
10-20 years
An item of property, plant and equipment is derecognised upon disposal when no
future economic benefits are expected to arise from the continued use of the
asset. Any gain or loss arising on the disposal or retirement of an item of
property, plant and equipment is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in
profit and loss.
(m) Intangibles
Patents, trademarks, licences and customer contracts
Separately acquired patents, trademarks and licences are shown at historical
cost. Patents, trademarks, licenses and customer contracts acquired in a
business combination are recognised at fair value at the acquisition date.
They have a finite useful life and are subsequently carried at cost less
accumulated amortisation and impairment losses.
Research and development
Research expenditure is recognised as an expense as incurred. Development
expenditure is recognised as an asset as incurred if the following have been
demonstrated:
- The technical feasibility of completing the intangible asset so that
it will be available for use or sale;
- The intention to complete the intangible asset and use or sell it;
- The ability to use or sell the intangible asset;
- How the intangible asset will generate probable future economic
benefits; and
- The ability to measure reliably the expenditure attributable to the
intangible asset during its development.
Research and development costs previously recognised as an expense are not
recognised as an asset in a subsequent period.
(n) Provisions
Provisions are recognised when the consolidated entity has a present
obligation, the future sacrifice of economic benefits is probable, and the
amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at reporting date, taking into
account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows. When
some or all of the economic benefits required to settle a provision are
expected to be recovered from a third party, the receivable is recognised as
an asset if it is virtually certain that recovery will be received and the
amount of the receivable can be measured reliably.
Provision for onerous contract
Present obligations arising under onerous contracts are recognised and
measured as provisions. An onerous contract is considered to exist where the
Group has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be
received from the contract.
(o) Revenue recognition
The Company recognises revenue through its equity accounted share of loss in
joint venture entity Primobius GmbH from the following sources:
- LiB disposal fees (for LiBs supplied by multiple waste aggregators
delivering predominantly whole modules);
- Sale of products from the Hilchenbach Spoke (metallic scrap,
chemical intermediates and chemicals purchased by various recyclers and
smelting customers); and
- Mechanical plant and equipment package supply (Stelco and Mercedes)
and associated technology licensing royalties.
For the supply of services, revenue is recognised progressively as
contractually agreed services have been performed.
For the sale of products, revenue is recognised when control of the goods has
been transferred to the customer, being the point at which the customer has
received the goods.
(p) Income recognition
Other income is measured at the fair value of the consideration received or
receivable.
Dividend and interest revenue
Dividend revenue from investments is recognised when the shareholder's right
to receive the payment has been established. Interest revenue is recognised
on a time proportionate basis that takes into account the effective yield on
the financial asset.
(q) Share-based payments
Equity-settled share-based payments to employees and others providing services
to the Group are measured at fair value at the date of grant.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Consolidated Entity's estimate of shares that will eventually vest,
with a corresponding increase in equity.
Equity-settled share-based payments transactions with parties other than
employees are measured at the fair value of the goods or services received,
except where the fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments granted, measured at
the date the entity obtains the goods or the counter party renders the
service. The fair value of performance rights are measured using a Monte Carlo
Simulation.
(r) Leased assets
The Group assesses whether a contract is or contains a lease, at inception of
the contract. The Group recognises a right-of-use asset and a corresponding
lease liability with respect to all lease arrangements in which it is the
lessee.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
rate implicit in the lease. If this rate cannot be readily determined, the
Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise
fixed lease payments (including in-substance fixed payments), less any lease
incentives receivable.
The lease liability is presented as a separate line in the consolidated
statement of financial position. The lease liability is subsequently measured
by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to
reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding
lease liability, lease payments made at or before the commencement day, less
any lease incentives received and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation. Right-of-use
assets are depreciated over the shorter period of lease term and useful life
of the underlying asset. The depreciation starts at the commencement date of
the lease. The right-of-use assets are presented as a separate line in the
consolidated statement of financial position.
(s) Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence.
Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint control
over those policies.
A joint venture is a joint arrangement whereby the parties that have joint
control of the arrangement have rights to the net assets of the joint
arrangement. Joint control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are
incorporated in these consolidated financial statements using the equity
method of accounting, except when the investment, or a portion thereof, is
classified as held for sale, in which case it is accounted for in accordance
with AASB 5. Under the equity method, an investment in an associate or a joint
venture is initially recognised in the consolidated statement of financial
position at cost and adjusted thereafter to recognise the Group's share of the
profit or loss and other comprehensive income of the associate or joint
venture. When the Group's share of losses of an associate or a joint venture
exceeds the Group's interest in that associate or joint venture (which
includes any long-term interests that, in substance, form part of the Group's
net investment in the associate or joint venture), the Group discontinues
recognising its share of further losses. Additional losses are recognised only
to the extent that the Group has incurred legal or constructive obligations or
made payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the
equity method from the date on which the investee becomes an associate or a
joint venture. On acquisition of the investment in an associate or a joint
venture, any excess of the cost of the investment over the Group's share of
the net fair value of the identifiable assets and liabilities of the investee
is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the Group's share of the net fair value of the
identifiable assets and liabilities over the cost of the investment, after
reassessment, is recognised immediately in profit or loss in the period in
which the investment is acquired. Any increase in percentage shareholding is
accounted for in the cost of the investment.
If there is objective evidence that the Group's net investment in an associate
or joint venture is impaired, the requirements of IAS 36 are applied to
determine whether it is necessary to recognise any impairment loss with
respect to the Group's investment. When necessary, the entire carrying amount
of the investment (including goodwill) is tested for impairment in accordance
with AASB 136 Impairment of Assets as a single asset by comparing its
recoverable amount (higher of value in use and fair value less costs to sell)
with its carrying amount. Any impairment loss recognised forms part of the
carrying amount of the investment. Any reversal of that impairment loss is
recognised in accordance with AASB 136 to the extent that the recoverable
amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date when the
investment ceases to be an associate or a joint venture, or when the
investment is classified as held for sale. When the Group retains an interest
in the former associate or joint venture and the retained interest is a
financial asset, the Group measures the retained interest at fair value at
that date and the fair value is regarded as its fair value on initial
recognition in accordance with AASB 9. The difference between the carrying
amount of the associate or joint venture at the date the equity method was
discontinued, and the fair value of any retained interest and any proceeds
from disposing of a part interest in the associate or joint venture is
included in the determination of the gain or loss on disposal of the associate
or joint venture. In addition, the Group accounts for all amounts previously
recognised in other comprehensive income in relation to that associate or
joint venture on the same basis as would be required if that associate or
joint venture had directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognised in other comprehensive
income by that associate or joint venture would be reclassified to profit or
loss on the disposal of the related assets or liabilities, the Group
reclassifies the gain or loss from equity to profit or loss (as a
reclassification adjustment) when the equity method is discontinued.
The Group continues to use the equity method when an investment in an
associate becomes an investment in a joint venture or an investment in a joint
venture becomes an investment in an associate. There is no re-measurement to
fair value upon such changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint
venture but the Group continues to use the equity method, the Group
reclassifies to profit or loss the proportion of the gain or loss that had
previously been recognised in other comprehensive income relating to that
reduction in ownership interest if that gain or loss would be reclassified to
profit or loss on the disposal of the related assets or liabilities.
When a group entity transacts with an associate or a joint venture of the
Group, profits and losses resulting from the transactions with the associate
or joint venture are recognised in the Group's consolidated financial
statements only to the extent of interests in the associate or joint venture
that are not related to the Group.
3. Critical accounting judgments and key sources of estimation uncertainty
In the application of the Group's accounting policies, which are described in
note 2, management is required to make judgments, 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 various other factors that are believed to be
reasonable under the circumstance, the results of which form the basis of
making the judgments. Actual results may differ from these estimates. The
estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
3.1 Critical judgments in applying the entity's accounting policies
The following are the critical judgments that management has made in the
process of applying the Group's accounting policies and that have the most
significant effect on the amounts recognised in the financial statements.
(a) Recovery of capitalised exploration and evaluation expenditure
The Group capitalises exploration and evaluation expenditure incurred on
ongoing projects. The recoverability of this capitalised exploration
expenditure is entirely dependent upon returns from the successful development
of mining operations or from surpluses from the sale of the projects or the
subsidiary companies that control the projects. At the point that it is
determined that any capitalised exploration expenditure is definitely not
recoverable, it is written off.
(b) Share-based payments
Equity-settled share-based payments granted are measured at fair value at the
date of grant. The fair value of share options is measured by use of the Monte
Carlo model and requires substantial judgement. Management has made its best
estimate for the effects of non-transferability, exercise restrictions
(including the probability of meeting market conditions attached to the
option), and behavioural considerations.
The fair value of performance rights issued during the period was made with
reference to the Company's closing share price on the date of grant.
Management has been required to estimate the probability that the Company will
meet the performance criteria determined by the board.
(c) Unlisted Investment
The investments in non-listed shares, being financial assets, are required to
be fair valued at each reporting date in accordance with the Accounting
Standards. The valuation of shares held in non-listed companies includes a
number of estimates and judgements as, generally, limited information exists
on such non-listed companies and their underlying assets or projects.
Accordingly, management has engaged an external valuation specialist in
assessing the fair value of all investments in non-listed shares.
4. Parent entity disclosure
Financial Position 2023 2022
$ $
Assets
Current assets 26,199,905 55,115,437
Non-current assets 30,012,521 35,308,379
Total assets 56,212,426 90,423,816
Liabilities
Current liabilities 3,198,663 3,224,412
Non-current liabilities 519,747 782,904
Total liabilities 3,718,410 4,007,316
Net Assets 52,494,016 86,416,500
Equity
Issued capital 146,234,171 145,564,286
Retained earnings (103,555,639) (67,904,092)
Reserves
Share based payments 9,815,484 8,756,306
Total equity 52,494,016 86,416,500
Financial Performance
Profit for the year (27,642,526) 6,392,622
Other comprehensive income - -
Total comprehensive (loss) / income (27,642,526) 6,392,622
5. (Loss)/profit for the year continuing
operations
Note 2023 2022
$ $
(a) Income
Income from operations consisted of the following items:
Other income:
Net fair value realised gain on financial assets - 576,661
Net fair value unrealised gain on financial assets - 233,418
Other income 5,000 102,778
Interest revenue 1,056,585 254,047
Total 1,061,585 1,166,904
(b) Profit / (loss) before income tax
Profit / (loss) before income tax has been arrived at after charging the
following expenses:
Employee benefits
expense:
Equity settled share-based 10 (1,747,438) (1,474,081)
payments
Superannuation expense (743,997) (509,427)
Employee salaries (7,578,550) (5,769,680)
Other employee benefits (1,085,524) (1,025,754)
Total (11,155,509) (8,778,942)
Impairments:
Impairment (expense)/reversal of 23 (1,273,045) 7,079,641
associate
Impairment (expense)/reversal of joint 22(i) (2,716,703)
venture
Total (3,989,748) 7,079,641
Other expenses
Consultant fees (2,564,209) (4,740,532)
Legal fees (1,944,369) (1,048,363)
Travel (1,237,470) (418,850)
Insurances (642,782) -
Depreciation of non-current assets (523,023) -
Net fair value unrealised loss on financial assets (512,769) (411,720)
ASX/AIM fees (433,444) (457,126)
Accounting fees (392,250) (299,392)
Research and development expense (303,719) (305,577)
Net fair value realised loss on financial assets (150,247) (1,450,138)
Other expenses (1,859,313) (1,566,092)
Total (10,563,595) (10,697,790)
6. Gain on demerger
2023 2022
$ $
Shares issued on demerger - in specie distribution(1) - 26,000,000
Less: net assets disposed(2) - (11,938,961)
Less: demerger costs - (1,248,630)
Attributable tax benefit - 2,716,230
Gain on demerger(3) - 15,528,639
1. On 18 August 2021, Neometals Ltd shareholders approved the demerger of
Widgie Nickel Limited ("Widgie Nickel"), a dedicated nickel exploration and
development company holding Neometals' Mt Edwards nickel assets, via a $26
million capital reduction and in-specie distribution of 100% of Widgie
Nickel's shares. Neometals distributed the Widgie Nickel shares to eligible
Neometals shareholders, pro rata to their shareholding in Neometals on the
record date of 24 August 2021. The $26 million was the fair value of the
shares distributed to shareholders and has been accounted for in accordance
with interpretation 17. $9.8 million of the in specie distribution relates to
a return of capital, with the remaining $16.2 million being classed as a
deemed dividend.
2. Expenditure incurred by the demerged entities for the period up to the
time of the demerger amounted to $197,750. This amount is included within the
consolidated statement of profit or loss.
3. Per Class Ruling 2021/72, demerger rollover relief applied such that
any capital gain from Capital Gains Tax (CGT) event A1 on the disposal of
shares in Widgie Nickel Limited is disregarded for the Neometals Tax
Consolidated Group. Furthermore, an exit allocable cost amount ("ACA")
calculation was prepared, with the exit ACA being a positive balance such that
CGT event L5 did not arise. Accordingly, there were no CGT implications for
Neometals Ltd.
7. Discontinued operations
(i) On 1 July 2021, Neometals announced intention to demerge Mt Edwards Nickel
Project into a new company "Widgie Nickel Limited". Therefore, at 30 June
2021, Mt Edwards Lithium Pty Ltd was classified as a non-current asset held
for sale. The results of the discontinued operation which have been included
in the financial statements for the year were as follows:
2023 2022
Results of discontinued operations $ $
Gain/(loss) from discontinued operations - 15,528,639
Cash flows from discontinued operations
Cashflows from investing activities - (505,680)
Cashflows from operating activities - (197,750)
Effect on the financial position of the group
Assets classified as held for sale - -
Liabilities associated with the assets classified as held for sale - -
8. Income taxes
2023 2022
$ $
(a) Income tax (expense) / benefit recognised in profit or loss
Current income tax:
Current income tax charge (591,751) (1,797,096)
Deferred tax (782,904) (3,269,199)
Total tax (benefit) / expense (1,374,655) (5,066,295)
The prima facie income tax expense on pre-tax accounting profit
from continuing operations reconciles to the income tax benefit in the
financial statements as follows:
(Loss) / profit before income tax (36,179,024) (16,234,234)
Income tax calculated at 30% (10,853,707) (4,870,270)
Effect of income and expenses that are not deductible in determining taxable 3,384,630 1,601,071
profit
Effect of income and expenses that are not recognised as deferred tax assets 6,493,707 -
Adjustments for current tax of prior periods 192,466 981,831
Refund of prior year R&D claim (591,751) (1,797,096)
Income tax balances in profit or loss (1,374,655) (5,066,295)
The tax rate used in the above reconciliation is the corporate tax rate of 30%
payable by Australian corporate entities on taxable income under Australian
tax law. There has been no change in the corporate tax rate during the
reporting period.
(b) Deferred tax balances
The net deferred tax balance as presented in the statement of financial
position is detailed below:
2023 2022
$ $
Deferred tax liabilities (16,529,051) (16,724,165)
Deferred tax assets 16,529,051 15,941,262
Net deferred tax balance - (782,904)
(c) Deferred tax assets not brought to account
At 30 June 2023 the amount of tax losses not recognised was $6,493,707 (June
2022: $1,861,059). The utilisation of tax losses depends upon the generation
of future taxable profits and can be carried indefinitely while also being
subject to relevant tax legislation associated with recoupment.
Exploration and evaluation expenditure $ Investment in associate $ Tax losses Total
Other $ $
$
Balance at 30/06/21 (13,790,940) (1,393,059) 1,382,914 7,032,751 (6,768,334)
Charge to profit or loss - discontinued operations 2,716,231 - 2,716,231
Charge to profit or loss (1,350,042) (2,123,893) (209,705) 6,952,839 3,269,199
Balance at 30/06/22 (12,424,751) (3,516,952) 1,173,209 13,985,590 (782,904)
Charge to profit or loss (1,784,661) 1,197,313 (281,547) 1,651,799 782,904
Balance at 30/06/23 (14,209,412) (2,319,639) 891,662 15,637,389 -
Tax Consolidation
Relevance of tax consolidation to the consolidated entity
The Company and its wholly-owned Australian resident entities have formed a
tax-consolidated group and are therefore taxed as a single entity. The head
entity within the tax-consolidated group is Neometals Ltd. The members of
the tax-consolidated group are identified at note 24.
Nature of tax funding arrangements and tax sharing agreements
Entities within the tax-consolidated group have entered into a tax funding
arrangement and a tax sharing agreement with the head entity. Under the
terms of the tax funding arrangement, Neometals Ltd and each of the entities
in the tax consolidation group has agreed to pay a tax equivalent payment to
or from the head entity, based on the current tax liability or current tax
assets of the entity. Such amounts are reflected in amounts receivable from
or payable to each entity in the tax consolidated group, and are eliminated on
consolidation. The tax sharing agreement entered into between the members of
the tax-consolidated group provides for the determination of the allocation of
income tax liabilities between the entities should the head entity default on
its payment obligations or if an entity should leave the tax-consolidated
group. The effect of the tax sharing agreement is that each member's tax
liability for tax payable by the tax-consolidated group is limited to the
amount payable to the head entity under the tax funding arrangement.
9. Key management personnel compensation
Details of key management personnel compensation are provided on pages 30-43
of the Directors' Report.
The aggregate compensation made to key management personnel of the Group is
set out below:
2023 2022
$ $
Short-term employee benefits 3,405,081 2,759,503
Post-employment benefits 176,750 132,137
Share-based payments 1,064,871 849,126
Total 4,646,702 3,740,766
10. Share based payments
Neometals Ltd has an ownership based remuneration scheme for executives and
employees.
Performance Rights Plan ("PRP")
In accordance with the provisions of the PRP, as approved by shareholders at
the Company's AGM on 25 November 2020, employees, Non-Executive Directors and
consultants may be offered performance rights at such times and on such terms
as the board considers appropriate.
All performance rights issued under the PRP are measured over a three year
period with an opportunity for the performance conditions to be re-measured
six months later should they not vest at the first vesting date. The vesting
of the performance rights is dependent on 3 criteria:
(a) Tranche 1 - The performance conditions of 40% of
Performance Rights will be measured as at each vesting date by comparing the
Company's total shareholder return (TSR) with that of a comparator group of
resource companies over the relevant period.
The Performance Rights will vest depending on the Company's percentile ranking
within the comparator group on the relevant Vesting Date as follows:
· If the Company ranks below the 50(th) percentile,
none of the Performance Rights will vest.
· If the Company ranks at the 50(th) percentile,
50% of the Performance Rights will vest.
· For each 1% ranking at or above the 51st
percentile, an additional 2% of the Performance Rights will vest, with 100%
vesting where the Company ranks at or above the 75th percentile.
(b) Tranche 2 - The performance conditions of 40% of
Performance Rights will be measured as at each vesting date by calculating the
Company's TSR calculated over the period commencing on the Comparator Start
Date and ending on the relevant Vesting Date (Absolute TSR).
The Performance Rights will vest depending on the Company's Absolute TSR on
the relevant Vesting Date as follows:
· If the Company's Absolute TSR is less than 15%,
none of the Performance Rights will vest.
· If the Company's Absolute TSR is 15%, 50% of the
Performance Rights will vest.
· For each additional 1% TSR above 15% Absolute
TSR, an additional 10% of the Performance Rights will vest, with 100% vesting
where the Company's Absolute TSR is at or above 20%.
(c) Tranche 3 (except for CEO) - The performance
conditions of 20% of Performance Rights will be measured as at each Vesting
Date as follows:
10% will vest if the combined market capitalisation of Neometals and any
entity demerged from the Neometals Group and separately listed on the ASX
would meet the threshold for entry into the ASX/S&P 200 Index.
10% will vest if any two of the following are at least under construction via
direct investment or joint venture involvement (as assessed by the Board):
• a LiOH plant;
• a Li-Battery recycling;
• a Titanium / Vanadium mining or process.
(d) Tranche 3 (CEO only) - The performance
conditions of 20% of Performance Rights will be measured as at each Vesting
Date as follows:
10% will vest if the combined market capitalisation of Neometals and any
entity demerged from the Neometals Group and separately listed on the ASX
would meet the threshold for entry into the ASX/S&P 200 Index.
10% to vest at the discretion of the Board based on the overall achievement by
NMT of its strategic objectives (both financial and non-financial) under the
leadership of the CEO and in delivering value to NMT's shareholders and
broader stakeholders.
General terms of performance rights granted under the PRP:
· The performance rights will not be quoted on the ASX.
· Performance rights can only be granted to employees, Non-Executive
Directors and consultants of the Company.
· Performance rights are transferable to eligible nominees.
· Performance rights not exercised on or before the vesting date will
lapse.
· All shares allotted upon the vesting of performance rights rank
equally in all respects to all previously issued shares.
· Performance rights confer no right to vote, attend meetings,
participate in a distribution of profit or a return of capital or another
participating rights or entitlements on the grantee unless and until the
performance rights vest.
The following share-based payment arrangements in relation to performance
rights were in existence at the end of the period:
2023 Grant date Number Vesting date Expiry date Grant date share price Expected volatility Risk-free rate Fair value at grant date
Chris Reed(1) 7-Dec-20 1,656,754 30/06/2023 31/12/2023 0.230 50% 0.10% 0.18
Jason Carone(2) 7-Dec-20 666,055 30/06/2023 31/12/2023 0.230 50% 0.10% 0.18
Mike Tamlin(2) 7-Dec-20 755,670 30/06/2023 31/12/2023 0.230 50% 0.10% 0.18
Darren Townsend(2) 7-Dec-20 726,605 30/06/2023 31/12/2023 0.230 50% 0.10% 0.18
Staff and consultants(2) 7-Dec-20 3,457,189 30/06/2023 31/12/2023 0.230 50% 0.10% 0.18
Chris Reed 11-Oct-21 574,049 30/06/2024 31/12/2024 0.855 55% 0.34% 0.77
Jason Carone 11-Oct-21 235,885 30/06/2024 31/12/2024 0.855 55% 0.34% 0.77
Mike Tamlin 11-Oct-21 262,094 30/06/2024 31/12/2024 0.855 55% 0.34% 0.77
Darren Townsend 11-Oct-21 262,094 30/06/2024 31/12/2024 0.855 55% 0.34% 0.77
Staff and consultants 11-Oct-21 1,178,431 30/06/2024 31/12/2024 0.855 55% 0.34% 0.77
Chris Reed 5-Sep-22 239,904 30/06/2025 31/12/2025 1.310 61% 3.26% 1.15
Merrill Gray 5-Sep-22 120,554 30/06/2025 31/12/2025 1.310 61% 3.26% 1.15
Jason Carone 5-Sep-22 144,919 30/06/2025 31/12/2025 1.310 61% 3.26% 1.15
Mike Tamlin 5-Sep-22 126,804 30/06/2025 31/12/2025 1.310 61% 3.26% 1.15
Darren Townsend 5-Sep-22 126,804 30/06/2025 31/12/2025 1.310 61% 3.26% 1.15
Staff and consultants 5-Sep-22 693,110 30/06/2025 31/12/2025 1.310 61% 3.26% 1.15
Steven Cole(3) 4-Aug-22 54,499 30/06/2023 30/06/2023 1.205 n/a n/a 1.10
Doug Ritchie(3) 4-Aug-22 40,875 30/06/2023 30/06/2023 1.205 n/a n/a 1.10
Natalia Streltsova(3) 4-Aug-22 40,875 30/06/2023 30/06/2023 1.205 n/a n/a 1.10
Jenny Purdie(3) 4-Aug-22 40,875 30/06/2023 30/06/2023 1.205 n/a n/a 1.10
Les Guthrie(3) 4-Aug-22 8,175 30/06/2023 30/06/2023 1.205 n/a n/a 1.10
Total 11,412,220
The valuation of the Non-executive Directors performance rights has been based
on the amount of their fees that have been forgone calculated using a 5-day
VWAP. The fair value of other KMP performance rights issued have been
independently valued by a third party using a Monte Carlo simulation to
determine fair value. A dividend yield of 0% has been applied to all
share-based payments. The total expense recognised for the period arising from
share-based payment transactions and accounted for as equity-settled
share-based payment transactions is $1,747,438 (2022: $1,474,081).
1) 90% (1,491,079) of these performance rights have vested at 30 June 2023
and remain unexercised as at the date of this report. 10% remain unvested and
will be retested at 31 December 2023.
2) 80% (4,084,415) of these performance rights have vested at 30 June 2023
of which 566,761 have been converted into ordinary shares and the remaining
amount are unexercised as at the date of this report. 20% remain unvested and
will be retested at 31 December 2023.
3) 100% (185,299) of these performance rights have vested at 30 June 2023
and remain unexercised.
The following reconciles the outstanding performance rights granted at the
beginning and end of the financial year:
2023 2022
Performance Performance
Rights No. Rights No.
Balance at beginning of the financial year 15,293,385 16,016,135
Granted during the financial year as compensation 1,705,325 2,900,521
Exercised during the financial year ((i)) (4,364,780) (3,025,130)
Lapsed during the financial year ((ii)) (956,433) (598,141)
Forfeited during the financial year ((iii)) (265,277) -
Balance at the end of the financial year ((iv)) 11,412,220 15,293,385
(i) 4,364,780 shares in the Company were issued on vesting of
performance rights at a fair value of $688,259 at grant (2022: 3,025,130 for a
fair value of $739,538 at grant ). Refer to note 17.
(ii) 956,432 performance rights lapsed during the financial year (2022:
589,141).
(iii) 265,277 performance rights were forfeited on cessation of
employment (2022: nil)
(iv) 5,760,793 of this balance is exercisable at the end of the period.
11. Trade and other receivables
2023 2022
$ $
Current
Sundry debtors((i)) 1,008,422 208,499
Other receivables 720,376 129,186
Prepayments 302,806 180,322
Total 2,031,604 518,007
(i) Sundry debtors is inclusive of $859,083 owed from Primobius GmbH for
reimbursement of expenditure paid for by Neometals.
12. Other financial assets
2023 2022
$ $
Current
Financial assets measured at FVTPL((i)) 763,650 2,229,500
Total Current 763,650 2,229,500
Non-current
Financial assets measured at FVTPL((ii)) 4,429,896 4,429,896
Convertible note((iii)) 669,075 669,075
Rental bond term deposit 200,000 200,000
Total Non-current 5,298,971 5,298,971
Total 6,062,621 7,528,471
(i) The Group has invested in a portfolio of listed shares
which are held for trading. Financial assets at FVTPL are measured at fair
value at the end of each reporting period, with any fair value gains or losses
recognised in profit or loss. The valuation technique and key inputs used to
determine the fair value are quoted bid prices in an active market.
(ii) The Group has invested in a portfolio of non-listed
shares which are not actively traded. The fair values of these investments
have been determined by external valuation specialists using various valuation
techniques, including but not limited to the market approach, the cost or net
assets value approach and the income approach. Within this balance, Neometals
has an equity interest in Critical Metals Limited which was valued using the
income approach using a discounted cash flow model. The feasibility study
results of the Vanadium Recovery Project have been used to apply the
methodologies under the income approach of valuation using the discounted
cashflow methodology. As (unadjusted) quoted prices in active markets are
unavailable, consideration was also given to precedent transactions involving
the sale of the company's shares, as a basis to assess the value of the equity
investment.
(iii) The Group has invested US$500,000 in a financing round for
private US start up, Tyfast Energy Corp. The investment is by way of
convertible note providing the Group with the ability to obtain a minority
equity stake in Tyfast.
13. Exploration and evaluation expenditure
Consolidated
Capitalised
exploration and
evaluation
expenditure
$
Gross carrying amount
Balance at 30 June 2021 42,079,554
Additions 5,096,915
Balance at 30 June 2022 47,176,469
Additions 5,948,962
Balance at 30 June 2023 53,125,431
Accumulated impairment
Balance at 30 June 2021 5,760,720
Balance at 30 June 2022 5,760,720
Balance at 30 June 2023 5,760,720
Net book value
As at 30 June 2022 41,415,749
As at 30 June 2023 47,364,711
The recovery of exploration expenditure carried forward is dependent upon the
discovery of commercially viable mineral and other natural resource deposits,
their development and exploration, or alternatively their sale.
14. Property, plant and equipment
Consolidated
Plant and
equipment
at cost
$
Gross carrying amount
Balance at 30 June 2021 1,022,197
Additions 210,818
Balance at 30 June 2022 1,233,015
Additions 454,133
Written off (147,524)
Balance at 30 June 2023 1,539,624
Accumulated depreciation
Balance at 30 June 2021 431,482
Depreciation expense 151,401
Balance at 30 June 2022 582,883
Depreciation expense 190,205
Written off (110,733)
Balance at 30 June 2023 662,355
Net book value
As at 30 June 2022 650,132
As at 30 June 2023 877,269
15. Trade and other payables
2023 2022
$ $
Trade payables 322,691 916,809
Accrued expenses 1,868,175 1,319,523
2,190,866 2,236,332
The average credit period on purchases is 30 days. No interest is charged on
the trade payables. The Group has financial risk management policies in place
to help ensure that all payables are paid within the settlement terms.
16. Provisions
2023 2022
$ $
Current
Annual leave 847,923 682,334
Long service leave 173,690 371,184
Total current 1,021,613 1,053,518
Non-current
Long service leave 72,685 -
Total non-current 72,685 -
Total 1,094,298 1,053,518
17. Issued capital
2023 2022
$ $
552,741,176 fully paid ordinary shares (2022: 548,376,396) 146,234,171 145,564,286
2023 2022
No. $ No. $
Fully paid ordinary shares
Balance at beginning of financial year 548,376,396 145,564,286 545,351,266 154,634,997
Share issue costs - (18,374) - (7,021)
Return of capital - - (9,803,228)
Other share based payments (see note 10) 4,364,780 688,259 3,025,130 739,538
Balance at the end of the financial year 552,741,176 146,234,171 548,376,396 145,564,286
Fully paid ordinary shares carry one vote per share and carry the right to
dividends.
Share options
At balance date there were no share options in existence over ordinary shares
(2022: nil).
Performance rights
At balance date there were 11,412,220 performance rights in existence over
ordinary shares (2022: 15,293,385).
18. Reserves
The share-benefits reserve arises on the grant of share options and
performance rights for the provision of services by consultants and to
executives and employees under the employee share option plan, performance
rights plan, employment contracts or as approved by shareholders. Amounts are
transferred out of the reserve and into issued capital when the options are
exercised or when shares are issued pursuant to the terms of the performance
rights. Further information about share-based payments to employees is
provided in note 10 to the financial statements.
2023 2022
$ $
Share based payments reserve:
Balance at the beginning of the financial year 8,455,957 7,721,414
Increase in share based payments 1,747,438 1,474,081
Amounts transferred to share capital on exercise (688,259) (739,538)
Balance at the end of the financial year 9,515,136 8,455,957
Convertible note reserve:
Balance at the beginning of the financial year 300,349 300,349
Balance at the end of the financial year 300,349 300,349
Investment revaluation reserve:
Balance at the beginning of the financial year 1,019,637 1,019,637
Balance at the end of the financial year 1,019,637 1,019,637
Total Reserves 10,835,122 9,775,943
19. Earnings per share
2023 2022
Cents per share Cents per share
Basic earnings per share:
Continuing operations (6.30) (2.04)
Continuing and discontinued operations (6.30) 0.80
Diluted earnings per share:
Continuing operations (6.30) (2.04)
Continuing and discontinued operations (6.30) 0.79
Basic and diluted profit / (loss) per share
The profit / (loss) and weighted average number of ordinary shares used in the
calculation of basic and diluted profit / (loss) per share are as follows:
2023 2022
$ $
Profit / (loss) ((a))
Continuing operations (34,804,369) (11,167,939)
Continuing and discontinued operations (34,804,369) 4,360,700
2023 2022
No. No.
Weighted average number of ordinary shares for the purpose of basic profit / 552,167,746 548,285,227
(loss) per share
Weighted average number of ordinary shares for the purpose of diluted profit / 552,167,746 550,375,191
(loss) per share
(a) Profit / (loss) used in the calculation of profit / (loss) per share
reconciles to net profit / (loss) in the consolidated statement of
comprehensive income.
20. Commitments for expenditure
(a) Exploration and evaluation expenditure commitments
The Consolidated Entity holds mineral exploration licences in order for it to
undertake its exploration and evaluation activities. To continue to hold
tenure over these areas the Group is required to undertake a minimum level of
expenditure on or in relation to the leases. Minimum expenditure commitments
for the exploration and mining leases for the 2023 financial year are outlined
in the table below.
2023 2022
$ $
Exploration expenditure commitments
Not longer than 1 year((i)) 707,509 676,885
(i) Due to the nature of this expenditure, in that the expenditure
commitments may be reduced by the relinquishment of tenements, estimates for
the commitment have not been forecast beyond June 2024.
(b) Joint venture commitments
Pursuant to the shareholders agreement providing shareholders funding, in July
2023, Neometals subsidiary Ecometals Pty Ltd entered into a shareholder loan
agreement to provide Recycling Industries Scandinavia AB $725,000. which is to
be repaid in full, together with accrued interest, on 31 October 2023. The
loan attracts a fixed interest rate of 8% per annum. The Borrower shall use
the Loan for the purposes of continuing evaluation activities.
In addition, $1,143,956 has been committed to the Reed Advanced Materials
joint venture as part of ongoing funding requirements.
21. Leases
Leasing arrangements
Leases relate to the lease of commercial premises in West Perth, Welshpool,
and a photocopier. The lease agreement for the Company's West Perth premises
was entered into on 1 July 2019 for a 48 month period expiring on 30 June
2023, this has been renewed until 30 June 2026. The lease of a photocopier is
for a period of 12 months expiring in June 2023. The Welshpool lease expired
in February 2023 and was renewed until February 2026. A lease was entered into
in June 2023 for another floor in the West Perth office until 30 June 2026.
The commitments are based on the fixed monthly lease payment.
30 June 2023
Right-of-use assets Buildings Equipment Total
$ $ $
Cost 1,813,441 9,044 1,822,485
Accumulated Depreciation (917,751) (9,044) (926,795)
Carrying Amount 895,690 - 895,690
30 June 2023
Lease liability Buildings Equipment Total
$ $ $
Current 285,625 - 285,625
Non-current 652,049 - 652,049
Total 937,674 - 937,674
30 June 2022
Right-of-use assets Buildings Equipment Total
$ $ $
Cost 878,200 9,044 887,244
Accumulated Depreciation (593,978) - (593,978)
Carrying Amount 284,222 9,044 293,266
30 June 2022
Lease liability Buildings Equipment Total
$ $ $
Current 362,712 9,044 371,756
Non-current - - -
Total 362,712 9,044 371,756
2023 2022
$ $
Amounts recognised in profit and loss
Depreciation expense on right-of-use asset 332,817 305,725
Interest expense on lease liabilities 26,999 19,783
Total 359,816 325,508
22. Joint arrangements
Name of operation Principal activity Interest
2023 2022
% %
Reed Advanced Materials Pty Ltd((i)) Evaluation of lithium hydroxide process 70 70
The Consolidated Entity's interest in assets employed in the above joint
ventures is detailed below.
(i) Reed Advanced Materials Pty Ltd ("RAM")
On 6 October 2015 Neometals and Process Minerals International Pty Ltd entered
into a shareholders agreement for the purposes of establishing and operating a
joint venture arrangement through RAM to operate a business of researching,
designing and developing the capabilities and technology relating to the
processing of lithium hydroxide. Following the execution of the shareholders
agreement RAM was held 70:30 between Neometals and Process Minerals
International.
Summarised financial information for the joint venture: 2023 2022
$ $
Carrying value of investment in the joint venture 1 1
Opening loan to joint venture 350,000 70,000
Loan to joint venture during the period 2,366,703 280,000
Impairment of loan to joint venture (2,716,703) -
Closing loan to joint venture - 350,000
Share of loss of joint venture not recognised in profit or loss (1,532,266) (176,242)
Reed Advanced Materials Pty Ltd Summary Balance Sheet 2023 2022
$ $
Current assets 1,332,031 199,505
Non-current assets 678,909 612,399
Current liabilities (46,052) (38,954)
Non-current liabilities (6,062,571) (2,681,568)
Name of operation Principal activity Interest
2023 2022
% %
Primobius GmbH((ii)) Lithium battery recycling 50 50
The Consolidated Entity's interest in assets employed in the above joint
ventures is detailed below.
(ii) Primobius GmbH
On 31 July 2020, Neometals and SMS group GmbH entered into a formal agreement
to establish a 50:50 JV ('Primobius GmbH') to commercialise Neometals
proprietary lithium battery recycling process.
Summarised financial information for the joint venture: 2023 2022
$ $
Opening balance of investment in joint venture 5,458,508 2,811,338
Cash contributions 3,091,947 3,519,837
Share of loss of joint venture recognised in profit or loss (3,851,175) (872,667)
Carrying value of investment in the joint venture 4,699,280 5,458,508
Primobius GmbH Summary Balance Sheet 2023 2022
$ $
Current assets((a)) 6,200,733 3,489,421
Non-current assets 8,667,753 9,280,979
Current liabilities (5,307,806) (2,438,582)
Non-current liabilities - (20,826)
Revenue 1,567,123 -
Expenses((b)) (9,269,473) (1,745,334)
Loss from continuing operations (7,702,350) (1,745,334)
Share of loss of joint venture recognised in profit or loss (3,851,175) (872,667)
((a)) The current asset balance is inclusive of cash and cash equivalents of
$5,566,896 (2022: 3,488,429)
((b)) The expenses balance is inclusive of depreciation of $2,472,877 (2022:
908,331)
Name of operation Principal activity Interest
2023 2022
% %
Recycling Industries Scandinavia AB((iii)) Vanadium recovery 72.5 -
The Consolidated Entity's interest in assets employed in the above joint
ventures is detailed below.
(iii) Recycling Industries Scandinavia AB ("RISAB")
In March 2023, Neometals and Critical Metals Ltd executed an agreement to
formalise a 50:50 Vanadium Recovery Project JV (RISAB). In April 2023,
Neometals' interest in RISAB increased to 72.5% following additional equity
contributions of $3.0 million. Despite holding 72.5%, joint control continued
to exist and accordingly the investment in RISAB was accounted for using the
equity method prescribed under AASB 128. An additional equity contribution was
made in June 2023 for $1,090,590 and Critical Metals Ltd contributed their pro
rata share which saw Neometals' interest in RISAB remaining unchanged.
Summarised financial information for the joint venture: 2023 2022
$ $
Opening balance of investment in joint venture - -
Cash contributions 4,090,590 -
Share of (profit)/loss of joint venture recognised in profit or loss (3,447,626) -
Carrying value of investment in the joint venture 642,964 -
Recycling Industries Scandinavia AB Summary Balance Sheet 2023 2022
$ $
Current assets 2,200,633 -
Non-current assets 3,216,090 -
Current liabilities (2,023,294) -
Non-current liabilities (4,375,058) -
Name of operation Principal activity Interest
2023 2022
% %
ACN 630 589 507 Pty Ltd((iv)) Lithium-ion battery recycling IP 50 100
The Consolidated Entity's interest in assets employed in the above joint
ventures is detailed below.
(iv) ACN 630 589 507 Pty Ltd
On 8 December 2022, Neometals issued 50% equity interest in battery recycling
IP holding company, ACN 630 589 507 Pty Ltd ("ACN 630"), to SMS group GmbH on
an unconditional basis. As a result of this, ACN 630 left the Neometals
consolidated group, which resulted in a $212,473 loss on disposal of
subsidiary.
Summarised financial information for the joint venture: 2023 2022
$ $
Opening balance of investment in joint venture - -
Cash contributions 106,801 -
Share of (profit)/loss of joint venture recognised in profit or loss - -
Carrying value of investment in the joint venture 106,801 -
ACN 630 589 507 Pty Ltd Summary Balance Sheet 2023 2022
$ $
Current assets 119,077 -
Non-current assets 275,722 -
Current liabilities (10,000) -
Non-current liabilities (213,598) -
23. Investment in associate
Hannans Limited
Name of operation Principal activity Interest
2023 2022
% %
Hannans Limited Lithium-ion battery recycling 26.09 32.43
The above associate is accounted for using the equity method in this
consolidated financial report.
Summarised information for the associate:
2023 2022
$ $
Opening carrying value of investment in associate 13,668,977 4,869,567
Shares purchased / (disposed of) at fair value 694,515 2,038,056
Share of loss of associate recognised in profit or loss((i)) (3,412,514) (318,287)
Impairment (expense)/reversal((ii)) (1,273,045) 7,079,641
Closing carrying value of investment in associate((III)) 9,677,933 13,668,977
(i) The equity accounted share of the associate's loss as
adjusted as if applying the same accounting policies as Neometals is credited
against the carrying value of the investment in the associate.
(ii) In the current financial year, the carrying value of the
investment in associate has been impaired down to its carrying value on per
share basis. In 2023 resulting in a $1,273,045 expense (2022: reversal of
$7,079,641)
(iii) The fair value of the Groups investment in Hannans as at
30 June 2023 on a per share basis is $9,677,932 (2022: $17,746,812)
2023 2022
No. No.
Shares held in Hannans Limited 879,812,014 845,086,264
Hannans Ltd Summary Balance Sheet 2023 2022
$ $
Current assets 3,681,473 4,315,415
Non-current assets 13,095,013 2,400,089
Current liabilities (142,230) (418,853)
Non-current liabilities - -
24. Subsidiaries
Name of entity Country of Ownership interest
incorporation
2023 2022
% %
Parent entity
Neometals Ltd Australia
Subsidiaries
Australian Titanium Pty Ltd (formerly Australian Vanadium Corporation Australia 100 100
(Holdings) Pty Ltd)
Alphamet Management Pty Ltd (formerly Australian Vanadium Corporation Australia 100 100
(Investments) Pty Ltd)
Inneovation Pty Ltd (formerly Australian Vanadium Exploration Pty Ltd) Australia 100 100
Neometals Energy Pty Ltd (formerly Barrambie Gas Pty Ltd) Australia 100 100
Neomaterials Pty Ltd (formerly GMK Administration Pty Ltd) Australia 100 100
Neometals Investments Pty Ltd (formerly Gold Mines of Kalgoorlie Pty Ltd) Australia 100 100
Urban Mining Pty Ltd (formerly Mount Finnerty Pty Ltd) Australia 100 100
Adamant Technologies Pty Ltd Australia 100 100
Avanti Materials Ltd Australia 100 100
ACN 630 589 507 Pty Ltd((i)) Australia 50 100
Ecometals Pty Ltd Australia 100 100
All of these companies are members of a tax consolidated group. Neometals Ltd
is the head entity of the tax consolidated group.
(i) Refer to note 22 for further information on change in
ownership percentage.
25. Segment information
Basis for segmentation
AASB 8 Operating Segments requires the presentation of information based on
the components of the entity that management regularly reviews for its
operational decision making. This review process is carried out by the Chief
Operating Decision Maker ("CODM") for the purpose of allocating resources and
assessing the performance of each segment. The amounts reported for each
operating segment is the same measure reviewed by the CODM in allocating
resources and assessing performance of that segment.
For management purposes, the Group operates under three operating segments
comprised of the Group's lithium, titanium/vanadium and 'other segments' which
comprises other minor exploration projects and mineral process technology
businesses. The titanium/vanadium operating segment is separately identified
given it possess different competitive and operating risks and meets the
quantitative criteria as set out in the AASB 8. The 'other segments'
category is the aggregation of all remaining operating segments given
sufficient reportable operating segments have been identified.
The segment information reported on the next page does not include any amounts
for this discontinued operation for the current and prior periods, which is
described in more detail in note 7.
For the year ended 30 June 2023
Reportable operating segments Lithium Vanadium & Titanium Other Corporate Total
$ $ $ $ $
Revenue from external customers - - - - -
Cost of sales - - - - -
Gross profit/(loss) - - - - -
Other income - - - 1,061,585 1,061,585
Share of loss of JV and associate (3,851,175) (3,447,626) (3,412,514) - (10,711,315)
Impairment on investment in associate & JV - - (3,989,748) - (3,989,748)
Depreciation and Amortisation - (110,471) - (412,551) (523,022)
Total expenses (213,765) (3,275,223) (670,161) (17,857,375) (22,016,524)
Profit/(loss) before tax (4,064,940) (6,833,320) (8,072,423) (17,208,341) (36,179,024)
Loss for the year from discontinued operations - - - - -
Income tax benefit - - - 1,374,655 1,374,655
Consolidated profit/(loss) after tax (4,064,940) (6,833,320) (8,072,423) (15,833,686) (34,804,369)
As at 30 June 2023
Reportable operating segments Lithium Vanadium & Titanium Other Corporate Total
$ $ $ $ $
Increase/(decrease) in segment assets (309,905) 6,414,392 (6,544,926) (32,856,539) (33,296,978)
Total segment assets 6,000,490 48,796,923 15,291,630 27,654,518 97,743,561
Total assets 6,000,490 48,796,923 15,291,630 27,654,518 97,743,561
For the year ended 30 June 2022
Reportable operating segments Lithium Vanadium /Titanium Other Corporate Total
$ $ $ $ $
Revenue from external customers - - - - -
Cost of sales - - - - -
Gross profit/(loss) - - - - -
Other income - 75,000 820,079 2,068,921 2,964,000
Share of loss of JV and associate (872,667) - (318,287) - (1,190,954)
Impairment reversal on investment in associate - - 7,079,641 - 7,079,641
Depreciation and Amortisation - (68,758) - (388,307) (457,065)
Total expenses (2,410,535) (5,766,136) (45,050) (16,408,135) (24,629,856)
Profit/(loss) before tax (3,283,202) (5,759,894) 7,536,383 (14,727,521) (16,234,234)
Loss for the year from discontinued operations - - - 15,528,639 15,528,639
Income tax benefit - - - 5,066,295 5,066,295
Consolidated profit/(loss) after tax (3,283,202) (5,759,894) 7,536,383 5,867,413 4,360,700
As at 30 June 2022
Reportable operating segments Lithium Vanadium /Titanium Other Corporate Total
$ $ $ $ $
Increase/(decrease) in segment assets 5,785,912 5,550,676 (531,070) (41,427,327) (30,621,809)
Total segment assets 6,310,395 42,382,531 21,836,556 60,511,057 131,040,539
Total assets 6,310,395 42,382,531 21,836,556 60,511,057 131,040,539
Geographical information
The Group operates in four geographical areas being Germany, Finland, Portugal
and Australia (country of domicile).
26. Related party disclosures
(a) Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are
disclosed in note 24 to the financial statements.
Equity interests in joint arrangements
Details of the percentage of ordinary shares held in joint arrangements are
disclosed in note 22 to the financial statements.
(b) Key management personnel remuneration
Details of Key Management Personnel remuneration are disclosed on
pages 36-44 of the Remuneration Report.
(c) Key management personnel equity holdings
Fully paid ordinary shares of Neometals Ltd
2023 Balance at Balance on Received on Net other Balance at Balance
01/07/2022 appointment exercise of change 30/06/2023 h
e
l
d
perf rights n
o
m
i
n
a
l
l
y
No. No. No. No. No. N
o
.
Non-executive directors
S. Cole 1,890,160 - 61,611 - 1,951,771 -
D. Ritchie 209,819 - 55,450 70,000 335,269 -
N. Streltsova 224,819 - 55,450 - 280,269 -
J. Purdie 330,072 - 55,450 86,210 471,732 -
L. Guthrie 220,267 - 11,090 - 231,357 -
Executive director
C. Reed 6,882,172 - 986,417 - 7,868,589 -
Other executives
M. Tamlin 535,853 - 447,769 - 983,622 -
J. Carone 515,000 - 394,668 (143,206) 766,462 -
D. Townsend 251,057 430,547 (271,199) 410,405
M. Gray - - - 7,770 7,770 -
Total 11,059,219 - 2,498,452 (250,425) 13,307,246 -
2022 Balance at Balance on Received on Net other Balance at Balance
01/07/2021 appointment exercise of change 30/06/2022 held
perf rights nominally
No. No. No. No. No. No.
Non-executive directors
S. Cole 1,682,198 - 207,962 - 1,890,160 -
D. Ritchie 134,908 49,911 25,000 209,819 -
N. Streltsova 134,908 49,911 40,000 224,819 -
D. Reed ((i)) 39,588,900 - - (2,000,000) 37,588,900 -
J. Purdie 215,187 - 83,185 31,700 330,072 -
L. Guthrie 163,675 - 41,592 15,000 220,267 -
Executive director
C. Reed 6,707,189 - 668,271 (493,288) 6,882,172 -
Other executives
M. Tamlin 229,189 - 306,664 - 535,853 -
J. Carone 400,000 - 245,725 (130,725) 515,000 -
D. Townsend 272,405 - 294,870 (316,218) 251,057 -
Total 49,528,559 - 1,948,091 (2,828,531) 48,648,119 -
(1) David Reed resigned from his position as Non-Executive Director on 30
November 2021.
Share options of Neometals Ltd
No options were issued to related parties during the current period (2022:
nil).
Performance rights of Neometals Ltd
In the current reporting period the Company granted 944,284 (2022: 1,573,173)
performance rights to executives and KMP pursuant to the Company's Performance
Rights Plan.
Further details of performance rights granted are contained in note 10 to the
financial statements.
Performance rights granted to related parties
The following tables summarises information relevant to the current financial
year in relation to the grant of performance rights to KMP as part of their
remuneration. Performance rights are issued by Neometals Ltd.
Name During the Financial Year
Grant date No. No. Fair value at grant date Earliest exercise date Consideration payable on exercise
granted vested
KMP:
N. Streltsova 4/08/2022 40,875 40,875 45,000 30/06/2023 -
D. Ritchie((1)) 4/08/2022 40,875 40,875 45,000 30/06/2023 -
S. Cole((1)) 4/08/2022 54,499 54,499 60,000 30/06/2023 -
J. Purdie 4/08/2022 40,875 40,875 45,000 30/06/2023 -
L. Guthrie 4/08/2022 8,175 8,175 9,000 30/06/2023 -
C. Reed((2)) 5/09/2022 239,904 - 276,034 30/06/2025 -
J. Carone((2)) 5/09/2022 144,919 - 166,744 30/06/2025 -
M. Tamlin((2)) 5/09/2022 126,804 - 145,901 30/06/2025 -
D. Townsend((2)) 5/09/2022 126,804 - 145,901 30/06/2025 -
M. Gray((2)) 5/09/2022 120,554 - 138,709 30/06/2025 -
Total 944,284 185,299 1,077,289 -
(1) At 30 June 2023 Non-Executive Directors became entitled to securities
whose vesting conditions were the subject to the rules of the Performance
Rights Plan.
(2) The number of performance rights that will actually vest, if any, is
determined by the Company's performance based on Neometals relative and
absolute TSR compared to the comparative group of companies over a 3 year
period and Business Plan strategic objectives.
Details of performance rights held by KMP and of shares issued during the
financial year as a result of the vesting of performance rights:
Grant date Fair value of rights at grant date Granted Vested during the financial year Forfeited/ lapsed during the financial year Ordinary shares issued on exercise of rights
$ No. No. No.
KMP:
C. Reed((1)) 2/09/2019 141,797 1,233,021 - 246,604 986,417
J. Carone((1)) 2/09/2019 56,734 493,335 - 98,667 394,668
M. Tamlin((1)) 2/09/2019 64,367 559,711 - 111,942 447,769
D. Townsend((1)) 2/09/2019 61,891 538,184 - 107,637 430,547
C. Reed((1)) 7/12/2020 299,872 1,656,754 1,491,079 - -
J. Carone((1)) 7/12/2020 120,556 666,055 532,844 - -
M. Tamlin((1)) 7/12/2020 136,776 755,670 604,536 - -
D. Townsend((1)) 7/12/2020 131,516 726,605 581,284 - -
C. Reed((1)) 11/10/2021 442,592 574,049 - - -
J. Carone((1)) 11/10/2021 181,867 235,885 - - -
M. Tamlin((1)) 11/10/2021 202,074 262,094 - - -
D. Townsend((1)) 11/10/2021 202,074 262,094 - - -
N. Streltsova((2)) 11/10/2021 45,000 55,450 - - 55,450
D. Ritchie((2)) 11/10/2021 45,000 55,450 - - 55,450
S. Cole((2)) 11/10/2021 50,000 61,611 - - 61,611
J. Purdie((2)) 11/10/2021 45,000 55,450 - - 55,450
L. Guthrie((2)) 11/10/2021 9,000 11,090 - - 11,090
C. Reed((1)) 5/09/2022 276,034 239,904 - - -
J. Carone((1)) 5/09/2022 166,744 144,919 - - -
M. Tamlin((1)) 5/09/2022 145,901 126,804 - - -
D. Townsend((1)) 5/09/2022 145,901 126,804 - - -
M. Gray((1)) 5/09/2022 138,709 120,554
N. Streltsova((3)) 4/08/2022 45,000 40,875 40,875 - -
D. Ritchie((3)) 4/08/2022 45,000 40,875 40,875 - -
S. Cole((3)) 4/08/2022 60,000 54,499 54,499 - -
J. Purdie((3)) 4/08/2022 45,000 40,875 40,875 - -
L. Guthrie((3)) 4/08/2022 9,000 8,175 8,175 - -
Total 3,313,405 9,146,792 3,395,042 564,850 2,498,452
(1) The number of performance rights that will actually vest, if any, is
determined by the Company's performance based on Neometals TSR compared to the
comparative group of companies over the 3-year period as set out in the
employee's employment contract. As a result of the testing of the Company's
performance over this period 3,209,743 rights vested (2022: 2,259,401).
(2) Under the Performance Rights Plan, Non-Executive Directors were
invited to forgo part of their fees for their services in exchange for
performance rights. At 30 June 2023 all performance rights have vested. As a
result of the testing of the Company's performance over this period 239,051
rights vested and shares were issued (2022: 432,561).
(3) Under the Performance Rights Plan, Non-Executive Directors were
invited to sacrifice part of their fees for their services in exchange for
performance rights. At 30 June 2023 all performance rights have vested.
The performance rights granted entitle the grantee to one fully paid ordinary
share in Neometals Ltd for nil cash consideration on satisfaction of the
vesting criteria.
(d) Transactions with other related parties
Other related parties include:
· The parent entity;
· Associates;
· Joint ventures in which the entity is a venturer;
· Subsidiaries;
· Key Management Personnel of the Group; and
· Other related parties.
The Group has provided loans to its joint venture, Reed Advanced Materials Pty
Ltd, and equity contributions to its joint ventures, Primobius GmbH and
Recycling Industries Scandinavia AB (see note 22)
Transactions involving the parent entity
The directors elected for wholly-owned Australian entities within the Group to
be taxed as a single entity from 1 July 2003.
No other transactions occurred during the financial year between entities in
the wholly owned Group.
(e) Controlling entities
The ultimate parent entity of the Group is Neometals Ltd, a company
incorporated and domiciled in Australia.
27. Auditors remuneration
Details of the amounts paid or payable to the auditor for the audit and other
assurance services during the year are as follows:
2023 2022
$ $
Audit services - Deloitte Touche Tohmatsu
Fees to the group auditor for the audit or review of the statutory financial 289,006 113,250
reports of the Company, subsidiaries and joint operations
Fees for other assurance and agreed-upon procedures under other legislation or 14,621 65,491
contractual arrangements - Australia
Fees for other assurance and agreed-upon procedures under other legislation or - 760,515
contractual arrangements - United Kingdom
Total remuneration of Deloitte Touche Tohmatsu 303,627 939,256
Audit services - Other firms
Fees for auditing the financial reports of any controlled entities 24,684 -
Total remuneration of other firms 24,684 -
28. Notes to the statement of cash flows
(a) Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents
includes cash on hand and in banks and investments in money market
instruments, net of outstanding bank overdrafts. Cash and cash equivalents
at the end of the financial year as shown in the Cash Flow Statement is
reconciled to the related items in the statement of financial position as
follows:
2023 2022
$ $
Cash and cash equivalents from continuing operations 24,438,695 60,158,159
24,438,695 60,158,159
(b) Reconciliation of profit / (loss) for the period to net cash flows
from operating activities
2023 2022
$ $
(Loss) / Profit for the year (34,804,369) 4,360,700
Impairment (reversal)/expense 3,989,748 (7,079,641)
Profit on disposal of financial assets 150,247 (576,661)
Loss on disposal of subsidiary 212,473 -
Share of loss in associate 3,412,514 318,287
Share of loss in Joint Venture 7,298,801 872,667
Net (profit) / loss on financial assets measured at FVTPL 512,769 (233,418)
Interest received on investments (1,056,585) (254,047)
Finance costs recognised in profit or loss 29,859 76,163
Depreciation and amortisation of non-current assets 523,023 872,790
Equity settled share-based payment 1,747,437 1,474,081
Gain on disposal of discontinued operation - (15,528,639)
Net foreign exchange (gain)/loss (4,204) (34,441)
(Increase) / decrease in assets: -
Current receivables (1,513,597) (266,938)
Other 49,748 29,404
Increase / (decrease) in liabilities: -
Current payables (131,597) (3,000,612)
Deferred tax liability (782,904) (5,432,830)
Provisions (31,905) (674,642)
Net Cash used in operating activities (20,398,542) (25,077,777)
29. Financial instruments
(a) Financial risk management objectives
The Consolidated Entity does not enter into derivative financial instruments
for speculative or hedging purposes.
(b) Significant accounting policies
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument are disclosed in note 2 to
the financial statements.
(c) Interest rate risk
The following tables detail the Group's exposure to interest rate risk:
2023 Weighted Variable Maturity dates Non Total
average interest interest
effective rate bearing
interest
rate
% % $ $
Less than 1-5 More than 5
1 year years years
$
$ $
Financial assets:
Cash and cash equivalents AUD 3.77% - 24,013,096 - - - 24,013,096
Cash and cash equivalents EUR 0.00% - 208,846 - - - 208,846
Cash and cash equivalents USD 0.00% - 127,552 - - - 127,552
Cash and cash equivalents GBP 0.00% - 89,199 - - - 89,199
Bond term deposits ((i)) 4.17% - 200,000 - - - 200,000
Cash deposits trust 0.00% - - - - - -
Trade and other receivables 0.00% - - - - 2,031,604 2,031,604
Financial liabilities:
Trade payables((ii)) - - - - - 1,289,285 1,289,285
Lease liability 7.77% - 285,625 652,049 - - 937,674
(i) The balances represent two term deposits that are restricted in
their use and are classified in the current reporting period as other
financial assets. Additional information on all other term deposits is
provided at notes 12 and 28(b). The financial assets have contractual
maturities of less than one year, however they are classified as non-current
in the statement of financial position as they are not accessible to the Group
due to restrictions placed on accessing the funds.
(ii) Non interest bearing liabilities are due within 30 days.
2022 Weighted Variable Maturity dates Non Total
average interest interest
effective rate bearing
interest
rate
% % $ $
Less than 1-5 More than 5
1 year years years
$
$ $
Financial assets:
Cash and cash equivalents AUD 0.40% - 59,009,480 - - - 59,009,480
Cash and cash equivalents EUR 0.00% - 531,719 - - - 531,719
Cash and cash equivalents USD 0.00% - 704,839 - - - 704,839
Cash and cash equivalents GBP 0.00% - 112,121 - - - 112,121
Bond term deposits ((i)) 0.40% - 200,000 - - - 200,000
Cash deposits trust 0.00% - 2,078,476 - - - 2,078,476
Trade and other receivables 0.00% - - - - 518,007 518,007
-
Financial liabilities:
Trade payables - - - - - 2,236,332 2,236,332
Lease liabilities 3.50% - 371,756 - - - 371,756
(i) The balances represent two term deposits that are restricted in their
use and are classified in the current reporting period as other financial
assets. Additional information on all other term deposits is provided at notes
12 and 28(b). The financial assets have contractual maturities of less than
one year, however they are classified as non-current in the statement of
financial position as they are not accessible to the Group due to restrictions
placed on accessing the funds.
(d) Credit risk management
Credit risk refers to the risk that counterparty will default on its
contractual obligations resulting in financial loss to the consolidated
entity. The consolidated entity has adopted a policy of only dealing with
credit-worthy counterparties and obtaining sufficient collateral where
appropriate as a means of mitigating the risk of financial loss from defaults.
The consolidated entity exposure and the credit ratings of its counterparties
are continuously monitored and the aggregate value of transactions concluded
is spread amongst approved counterparties.
The consolidated entity does not have any significant credit risk exposure to
any single counterparty or any group of counterparties having similar
characteristics other than the Joint Venture. The credit risk on liquid funds
is limited because the counterparties are banks with high credit-ratings
assigned by international credit-rating agencies.
(e) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of
directors, who have built an appropriate liquidity risk management framework
for the management of the Group's short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by
maintaining adequate reserves and banking facilities, and by continuously
monitoring forecast and actual cash flows and matching the maturity profiles
of financial assets and liabilities.
The undiscounted lease liabilities balance is $937,674, split between $285,625
with a maturity date of less than 1 year and $652,049 with a maturity date of
1-5 years.
In addition to financial liabilities in note 15, the Company is required to
meet minimum spend commitments to maintain the tenure over the Company's
mineral exploration areas as described in note 20.
(f) Fair value
The carrying amount of financial assets measured at amortised cost recorded in
the financial statements approximates their respective fair values.
Financial assets carried at fair value through profit or loss comprise
investments predominantly in Australian listed equities. Their fair value is
determined using key inputs of quoted bid prices in an active market
multiplied by the number of shares held, which is Level 1 in the fair value
hierarchy. Where quoted prices in an active market are unable to be used to
determine fair value, alternative valuation methods are used to most
accurately represent the equities fair value which for the investments held by
the entity include other observable inputs and is therefore categorised as
level 3 on the fair value hierarchy.
29. Financial instruments (continued)
Other than the investments held at fair value, the group does not hold any
instruments that are measured at fair value. There have been no transfers
between fair value classes during the year. The sensitivity analysis below has
been calculated based on the exposure to equity price risk at the end of the
reporting period for financial assets carried at fair value through profit or
loss. A 25 percent increase and decrease has been used to assess the
sensitivity of the equity price risk and represents management's assessment of
a reasonably possible change in equity pricing.
If equity prices had been 25 percentage higher/lower and all other variables
were held constant, the Group's profit for the year ended 30 June 2023 would
decrease/increase by $190,912 (2022: 557,375).
(g) Capital management
The board's policy is to endeavour to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain future
development of the business. The Group sources any additional funding
requirements from either debt or equity markets depending on the market
conditions at the time the funds are sourced and the purpose for which the
funds are to be used. The Group is not subject to externally imposed capital
requirements.
(h) Interest rate risk management
The Group is exposed to interest rate risk as the Group has funds on deposit
as security for the head office lease.
The sensitivity analysis below has been calculated based on the exposure to
interest rates at the end of the reporting period. A 50 basis point increase
and decrease has been used when reporting the interest rate risk and
represents management's assessment of the potential change in interest rates.
If interest rates had been 50 basis points higher/lower and all other
variables were held constant, the Group's profit for the year ended 30 June
2023 would decrease/increase by $123,193 (2022: decrease/increase $301,791).
This is mainly attributable to the Group's exposure to interest rates on the
maturity of its term deposits.
30. Contingent liabilities
The Group has no contingent liabilities as at 30 June 2023 (2022: nil)
31. Events after the reporting period
On 12 July 2023, Neometals announced the execution of a binding offtake
agreement between Novana Oy and Glencore for the Vanadium Recovery Project.
On 1 August 2023, Neometals announced the successful completion by Primobius
GmbH of the Battery Recycling 'Hub' Engineering cost study results for a
21,000 tonne per annum fully integrated LiB recycling plant.
On 22 August 2023, Neometals announced that Primobius received a purchase
order for supply of a 10 tonne per day spoke with Mercedes for installation at
Kuppenheim in southern Germany.
Other than stated above, no matters or circumstances have arisen since the end
of the financial year that have significantly affected, or may significantly
affect the operations, results of operations or state of affairs of the Group
in subsequent financial years.
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