REG - PYX Resources Ltd. - Final Results
15/03/2024 14:00
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RNS Number : 1025H PYX Resources Limited 15 March 2024
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
PYX Resources Limited / EPIC: PYX / Market: Standard / Sector: Mining
15 March 2024
Pyx Resources Limited
("PYX" or "the Company")
2023 Full Year Results
PYX Resources Ltd (NSX: PYX | LSE: PYX), the world's third largest publicly
listed zircon producer by zircon resources,(1) is pleased to announce its Full
Year Results for the year ended 31 December 2023 ("FY2023").
FY2023 HIGHLIGHTS
· 24% Year on Year ("YoY") increase in total sales volume to 11,350
Tonnes
· Strong revenue recorded of US$22,672k - constant YoY
· 61% YoY increase in underlying EBITDA to US$676k
· 8% YoY increase in Net Cash Position to US$7,829k
· 22% YoY increase in Premium Zircon Inventory to 17 days
· 22% YoY decrease in total personnel to 95
· 28% & 47% YoY increase in female and indigenous (Dayak) employment
respectively
· ZERO total recordable injury frequency rate
· Signed UN Global Compact Annual Communication on Progress in March
2023
· Post period, the Company announced that it will start shipping
ilmenite following the award of a revised exporting licence
FINANCIAL AND OPERATIONS SUMMARY
US$ FY 2023 FY 2022 % change
Sales revenue 22,671,641 22,703,190 0%
Cash cost of production (19,601,174) (17,293,633) 13%
EBITDA (10,039,681) (9,254,205) 8%
EBIT (10,400,680) (9,496,707) 10%
Net loss before tax (10,456,195) (9,524,646) 10%
Net loss after tax (NLAT) (10,456,356) (9,433,600) 11%
Underlying EBITDA 676,301 419,289 61%
Cash 7,828,906 7,221,085 8%
Total assets 93,100,662 89,124,565 4%
Total liabilities 8,977,573 5,570,118 61%
Zircon Produced 11.8kt 9.1kt 31%
Zircon Sales 11.4kt 9.1kt 24%
Titanium Dioxide Minerals Produced 2.9kt 7.5kt (61%)
Titanium Dioxide Minerals Sold - 0.3kt
Value Per Tonne Zircon (USD/t) 1,998 $2,457 (19%)
Total Produced 14.8kt 16.6kt (11%)
Total Sold 11.4kt 9.5kt 20%
(1)According to publicly available information during the financial year ended
June 2023
FY2023 OVERVIEW
During the 12 months to December 2023, the Company made significant headways
in establishing itself as a leading player in the premium zircon market. Since
its listing in February 2020, the Company has focused on delivering its
strategy and creating shareholder value. The Company performed strongly during
2023 mainly due to a boost in premium zircon production and sales.
In FY2023 the company achieved revenue of US$22.7 million, while achieving a
positive underlying EBITDA, increased net cash at the year end to US$7.8m and
remaining debt free. All of this has been achieved despite an average price
decrease of PYX's premium zircon of 19%.
Operationally, PYX produced 14.8kt of minerals sands (zircon, rutile and
ilmenite) in total during the year, of which 11.8kt were premium zircon,
representing a 31% year-on-year (YoY) increase in premium zircon production.
YoY sales of premium zircon also grew by 24% to 11.4kt (2022: 9.5kt). No sales
of titanium stockfeed were made while the Company awaited the modification of
its rutile and ilmenite export licences which are required after changes in
regulation made by the Industrial and Trade Department for Export Tax Billing
in December 2023. On 12(th) March 2024, post period, the Company announced
that it had received the modified licence to export ilmenite and that it can
now start delivering on orders placed prior to the modification of the
licence. During the period, the Company also strengthened its finished goods
inventories to 10.9kt (2022: 7.3kt) mainly as a result of the increase of
rutile and ilmenite production. Alongside this, premium zircon inventories
increased to 533t (17 days) from 438t at the end of 2022.
During the year, the Company's premium zircon market has been driven by Asia's
demand, with little demand from Europe as a result of a sluggish global
economy.
Since PYX's inception in 2020, the company has managed to sell all of its
premium zircon production, mainly as a result of its high quality and
scarcity. 2023 was no exception, with the Company maintaining a low premium
zircon inventory at the year end.
International premium zircon prices remained unchanged for the first half of
2023 despite weak international market conditions but declined during the last
five months of the year with average prices for 2023 ending 19% lower than in
2022.
Nonetheless, despite a soft global economy, the Company ended the year with
US$7.8 million of cash on its balance sheet and no debt.
2023 was a significant year for PYX's Mandiri and Tisma mining licences. The
renewal of a 10-year Izin Usaha Pertambangan Operasi Produksi (IUP-OP, Mining
Operation and Production Licence) exploration and mining licence agreement for
the Tisma project, which PYX has a contractual interest in, represents a
significant milestone for the Company. The IUP-OP licence and newly issued
RKAB Operasi Produksi Tahun 2023 (Working Plan and Budget) authorises the
Company to extract, produce, and export 24kt of zircon, 20kt of rutile and
50kt of ilmenite, ensuring the extraction and production of other by-products,
such as SiO2 .
This renewal, and access to this licence, solidifies PYX's position as a
leading player in the mineral resources sector and opens up new opportunities
for growth and expansion. The Directors believe the Tisma project holds
immense potential, and this long-term licence agreement should provide
stability and confidence to maximise its value over the coming years.
Additionally, the Indonesian authorities have outlined the legislation for
mineral sands companies to export ilmenite and rutile to international
markets, following a change in Indonesian law. The Ministry of Trade of the
Republic of Indonesia, following the recommendation of the Ministry of Energy
and Natural Resources, has changed the category of titanium dioxide, with
ilmenite and rutile receiving the same classification as zircon, as a
Non-Metal Commodity.
The new law, issued by the Ministry of Trade under regulation No. 13, allows
for the export of ilmenite and rutile as Non-Metal with a minimum grade of
TiO2 ≥ 45% for ilmenite and TiO2 ≥ 90% for rutile. On 17 August 2023 the
Company announced the award of the export licence for rutile and ilmenite
however exports were put on hold following changes in regulation made by the
Industrial and Trade Department for Export Tax Billing in December 2023, which
required the use of two types of Ports, a Loading and Export port. The Company
has now received the modified licence to export ilmenite from the Investment
and One-Integrated Services Department (Dinas Penanaman Modal dan Pelayanan
Terpadu Satu Pintu/ DPMPTSP) (See 12(th) March 2024 RNS). PYX started
producing rutile in January 2022 and ilmenite in June 2022, and by the end of
December 2023 it had stockpiled 9.8kt.
PYX has achieved significant milestones in its third year as a public company
following its Australian IPO in 2020 and two years since its London Stock
Exchange listing. The Company's strategy has resulted in a 24% increase in
sales of premium zircon, from 9.1kt to 11.4kt, compared to the same period
last year.
Revenues from sales of zircon for the year were US$22,671,641 and remained
constant compared to 2022. This was driven by a 24% growth in premium zircon
sales volumes offset by an average sales price reduction of 19%. During 2023,
PYX achieved an average premium zircon price of US$1,998 per tonne compared to
our estimate for other Indonesian suppliers of US$1,750 per tonne.
Zircon prices in the near future will depend on the performance of the world
economy and the output of mining companies. PYX remains very positive on the
need of increased zircon supply and, with the amended rutile and ilmenite
export licence, the Company expects to increase sales during 2024. This will
be achieved through both an increase of production volume and the sales of the
9.8kt rutile and ilmenite the Company has in inventory at the end of 2023.
PYX's existing customer base consists of global blue-chip organisations
operating in various industries, sectors, and geographies. Through the
strategy of market diversification, PYX has been able to mitigate the steep
reduction in demand from the western economies. As a results, during 2023 most
of PYX's sales focused on India and China, with sales to India increasing
126%. During the period, PYX grew its customer base by 23% with zircon
utilisers around the world keen to approve PYX's premium zircon as they seek
to secure future supply and look for new competitive options.
All sales during the period continue to be in US dollars, reducing the risk of
exchange rate exposure.
The Annual Report and Financial Statements for the year ended 31 December 2023
has been published today and is available for inspection at
https://pyxresources.com/investors-reports.
2023 Full Year Results Conference Call
The Company will host a live investor presentation relating to the Company's
2023 Annual Results at 12:00pm GMT /20:00pm AWST / 23:00pm AEDT on Tuesday 19
March 2024, via the Investor Meet Company platform.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
9:00am GMT / 17:00 AWST / 20:00 AEDT on Monday 18 March 2024 or at any time
during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet PYX
RESOURCES LIMITED
via: https://www.investormeetcompany.com/pyx-resources-limited/register-investor
(https://www.investormeetcompany.com/pyx-resources-limited/register-investor)
.
Annual General Meeting
The Company's Annual General Meeting (AGM) will be held virtually on or around
Thursday, 16 May 2024. Details of all resolutions to be considered at the AGM
will be contained in a Notice of AGM and Explanatory Notes which will be
dispatched to shareholders prior to the meeting in accordance with the
relevant legal requirements.
CHAIRMAN'S STATEMENT
In terms of the macroeconomic and political environment, it has been a period
marked by notable shifts and challenges. Geopolitical tensions, including the
Israel - Palestine conflict in the Middle East and the continuation of the war
in Ukraine, have had a profound impact on governments and financial markets
globally. Additionally, persistently high inflation, supply chain disruptions
and higher interest rates in Europe and the US have posed challenges to local
manufacturers, reducing demand for our products in these regions.
Nevertheless, we have remained resilient and adaptable in the face of these
circumstances. While global equity markets have performed relatively well,
commodity prices have been soft overall, with global bearishness remaining
high, and short-term debt interest at a decade high. All of this arguably
builds into the most anticipated bear market in history. I am proud to say
that PYX has navigated its way through rough seas and has done so in a
remarkable manner yielding excellent results.
A pivotal accomplishment this year lies in our strategic decision to enhance
trade dynamics by actively expanding our customer base in the Asian markets,
particularly China and India. Recognising the immense growth potential in
these regions, we have successfully realigned our operations to cater to their
burgeoning demands. By establishing robust relationships with customers in
these markets, we have unlocked new avenues for business expansion and
cemented our presence in the vibrant Asian economies. This deliberate shift
has not only widened our market reach but has also positioned us to leverage
the thriving opportunities and meet the evolving needs of these influential
markets. Our strengthened focus on China and India reflects our commitment to
driving sustainable growth and maximising our trade potential in the Asian
region.
In terms of pricing, premium zircon has experienced a remarkable upward trend.
Starting from January 2021 at US$1,400, international market pricing steadily
increased throughout the year, reaching US$1,800 in the second half of 2021
and US$2,000 by January 2022. This positive trajectory continued, and world
premium zircon prices have remained stable, defying the volatility of the
market. This exceptional outcome underscores the imbalanced supply and demand
dynamics and highlights our ability to capitalise on this favourable market
condition. Despite current market challenges, resulting from the weak global
economy, we remain bullish in the long term, given the number of existing
operations reaching the end of their mine life between 2025 and 2030. In
addition, the increasing market uncertainty is heightening the challenge of
developing new projects.
We are pleased to report a significant surge in our total sales volumes of
20%, witnessing a YoY growth of 24% of premium zircon, while finished goods
inventory of premium zircon remains at a low of 17 days.
Furthermore, this year stands as an exceptional milestone for PYX Resources
with a strong positive underlying EBITDA of US$676k, up 61% from the previous
year. This is even more impressive when considering that the Company is in its
3rd year of operations since its original IPO in Australia, from which 2 years
had a considerable slow down amid Covid-19. This momentous achievement serves
as a resounding testament to our unwavering dedication to operational
excellence and sound financial stewardship. One key catalyst driving our
remarkable financial success has been the meticulous implementation of
measures that have led to a substantial reduction in non-cash expenses. By
optimising executive remuneration to align with profitability, we have
effectively strengthened our financial position and generated favourable EBIT
results. This strategic approach, combined with the positive fair value of our
financial instruments, has substantially enhanced our financial performance,
ensuring sustainable returns for our esteemed shareholders. Moreover, the
strategic commencement of sales of by-products, coupled with our astute
capitalisation on market demand, has not only diversified our revenue streams
but generated additional income, further bolstering our overall financial
prowess. This strategic manoeuvre, along with the noteworthy positive impact
derived from the accumulated ilmenite inventory, has played a pivotal role in
amplifying our overall profitability, serving as a compelling demonstration of
the efficacy of our astute resource management strategies.
This remarkable progress aligns seamlessly with our strategic 5-year plan,
showcasing our commitment to achieving the outlined objectives.
I am delighted to share the exciting news that PYX Resources has successfully
obtained an IUP-OP (Izin Usaha Pertambangan Produksi - Production Operation
Mining Business Licence) extension for the Tisma tenement. This achievement
solidifies our position and grants us the invaluable opportunity to operate
within this tenement for the next 10 years. The extension not only brings
stability and certainty to our operations but also serves as a strong
foundation for continued growth and expansion. With this extended tenure, we
can confidently pursue our long-term strategies and continue to explore new
opportunities to consolidate the mineral sands industry in Kalimantan.
To this end, we were delighted to be awarded the licence for the export of
ilmenite and rutile ores from the Indonesian government in August 2023, which
allows us to extract, produce, and export up to 24kt of zircon, 20kt of rutile
and 50kt of ilmenite per annum, as well as extract and produce other
by-products such as SiO2 . With 9,833 tonnes of finished ilmenite and rutile
in inventory, the Company has an important cash generation potential through
sales during 2024.
These milestones are testament to our strong relationships with regulatory
bodies and our unwavering commitment to compliance and responsible resource
management.
Sustainability remains at the core of our operations and values. We are proud
to actively uphold the United Nations' Sustainable Development Goals (SDGs) as
part of our commitment to creating a more sustainable future. Our dedication
to sustainability goes beyond mere compliance; it reflects our genuine desire
to make a positive impact on the environment and the communities in which we
operate. We have undertaken a multitude of sustainability projects and
initiatives, such as: active community engagement programmes, environmental
preservation efforts, and social welfare initiatives, we actively strive to
make a difference in the areas that matter most. By integrating the SDGs into
our operations, we aim to foster long-term sustainability, promote responsible
business practices, and create lasting positive change.
In summary, the year 2023 is a clear example of the focus all members of the
Company have on the accomplishment of our Plan. We have reduced our production
costs significantly, increased volumes and started selling our titanium
dioxide by-products.
Your unwavering support, trust, and belief in our vision have been
instrumental in our journey of success. This year has been filled with
significant achievements and notable milestones, and we attribute a great deal
of our accomplishments to your continued commitment to our Company.
Oliver B. Hasler
Chairman and Chief Executive
*** ENDS ***
For more information:
PYX Resources Limited T: +61 2 8823 3132
E: ir@pyxresources.com (mailto:ir@pyxresources.com)
WH Ireland Limited (Broker) T: +44 (0)20 7220 1666
Harry Ansell / Katy Mitchell / Megan Liddell
St Brides Partners Ltd (Financial PR) E: pyx@stbridespartners.co.uk (mailto:pyx@stbridespartners.co.uk)
Ana Ribeiro / Isabel de Salis / Isabelle Morris
This announcement is authorised for release by Oliver B. Hasler, Chairman and
Chief Executive Officer.
Consolidated Statement of Profit or Loss For the year ended 31 December 2023
Note 2023 2022
US$ US$
Revenue 3 22,671,641 22,703,190
Cost of sales 4 (19,894,961) (17,449,606)
Gross Profit 2,776,680 5,253,584
Other income 3 28,900 8,043
Selling and distribution expenses (1,222,886) (2,120,337)
Corporate and administrative expenses (2,587,605) (4,285,962)
Share based payment (7,616,663) (5,566,871)
Loss on fair value change 5 (1,685,242) (2,297,990)
Foreign exchange loss (93,864) (487,174)
Interest expense 4 (55,515) (27,939)
Loss before income tax (10,456,195) (9,524,646)
Income tax (expense)/benefit 6 (161) 91,046
Net loss for the year (10,456,356) (9,433,600)
Net loss attributable to:
Owners of the Parent Entity (10,588,047) (9,471,192)
Non-controlling interests 131,691 37,592
Net loss for the year (10,456,356) (9,433,600)
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
when specific conditions are met:
Exchange differences on translating foreign operations, net of tax 43,142 (621,873)
Total comprehensive income for the year (10,413,214) (10,055,473)
Total comprehensive income attributable to:
Owners of the Parent Entity (10,580,534) (9,446,042)
Non-controlling interests 167,320 (609,431)
(10,413,214) (10,055,473)
Loss per share
Basic loss per share (cents) 9 (2.32) (2.16)
Diluted loss per share (cents) 9 (2.32) (2.16)
The accompanying notes form part of these financial statements.
Consolidated Statement of Financial Position
As at 31 December 2023
Note 2023 2022
US$ US$
ASSETS
CURRENT ASSETS
Cash and cash equivalents 10 7,828,906 7,221,085
Trade and other receivables 11 1,557,570 1,396,300
Advances to suppliers 432,498 619,782
Other assets - 517,847
Prepayments and deposits 58,345 102,457
Prepaid tax 18 847,485 661,130
Inventories 12 2,308,586 705,776
TOTAL CURRENT ASSETS 13,033,390 11,224,377
NON-CURRENT ASSETS
Property, plant and equipment 14 6,042,116 4,051,196
Intangible assets 15 73,496,367 73,314,239
Right of use assets 2,163 11,332
Deferred tax assets 16 526,626 523,421
TOTAL NON-CURRENT ASSETS 80,067,272 77,900,188
TOTAL ASSETS 93,100,662 89,124,565
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 1,370,005 1,505,996
Other liabilities 17 2,331,568 4,064,122
Amount due to shareholder 19 5,276,000 -
TOTAL CURRENT LIABILITIES 8,977,573 5,570,118
TOTAL LIABILITIES 8,977,573 5,570,118
NET ASSETS 84,123,089 83,554,447
EQUITY
Issued capital 20 105,592,118 102,226,925
Reserves 24 672,381 8,905,334
Accumulated losses (20,758,040) (26,027,122)
Equity attributable to owners of the Parent Entity 85,506,459 85,105,137
Non-controlling interest (1,383,370) (1,550,690)
TOTAL EQUITY 84,123,089 83,554,447
Consolidated Statement of Changes in Equity For the year ended 31 December 2023
Share Foreign Non- controlling Interests
Ordinary Shares Based Payment Reserve Exchange Translation Options Reserve
Reserve Accumulated
losses Subtotal Total
US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 January 2022 96,651,080 3,906,968 (24,207) - (16,555,930) 83,977,911 (941,260) 83,036,651
Comprehensive income
Loss for the year - - - - (9,471,192) (9,471,192) 37,592 (9,433,600)
Other comprehensive income for the year - - 25,149 - - 25,149 (647,022) (621,873)
Total comprehensive income for the year
- - 25,149 - (9,471,192) (9,446,043) (609,430) (10,055,473)
Transactions with owners,
in their capacity as owners, and other transfers
Shares issued during the year 4,452,459 - - - - 4,452,459 - 4,452,459
Options reserve - - - 553,939 - 553,939 - 553,939
Share based payments - 5,566,871 - - - 5,566,871 - 5,566,871
Issue of shares to employees 1,123,386 (1,123,386) - - - - - -
Total transactions with owners and other transfers
5,575,845 4,443,485 - 553,939 - 10,573,269 - 10,573,269
Balance at 31 December 2022 102,226,925 8,350,453 942 553,939 (26,027,122) 85,105,137 (1,550,690) 83,554,447
Consolidated Statement of Changes in Equity For the year ended 31 December 2023
Share Foreign Non- controlling Interests
Based Payment Reserve Exchange Translation
Ordinary Shares Reserve Options Reserve Accumulated
losses Subtotal Total
US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 January 2023 102,226,925 8,350,453 942 553,939 (26,027,122) 85,105,137 (1,550,690) 83,554,447
Comprehensive income
Loss for the year
- - - - (10,588,047) (10,588,047) 131,691 (10,456,356)
Other comprehensive income for the year - - 7,513 - - 7,513 35,629 43,142
Total comprehensive income for the year
- - 7,513 - (10,588,047) (10,580,534) 167,320 (10,413,214)
Transactions with owners,
in their capacity as owners, and other transfers
Shares issued during the year 3,365,193 - - - - 3,365,193 - 3,365,193
Share based payments - 7,616,663 - - - 7,616,663 - 7,616,663
Share based payments cancelled - (15,857,129) - - 15,857,129 - - -
Total transactions with owners and other transfers
3,365,193 (8,240,466) - - 15,857,129 10,981,856 - 10,981,856
Balance at 31 December 2023 105,592,118 109,987 8,455 553,939 (20,758,040) 85,506,459 (1,383,370) 84,123,089
Consolidated Statement of Cash Flow For the year ended 31 December 2023
Note 2023 2022
US$ US$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 22,465,734 22,148,216
Payments to suppliers and employees (24,164,605) (25,646,834)
Other income 28,900 8,043
Interest received 2,080 2,007
Finance costs (57,595) (29,946)
Income tax paid (195,015) (408,885)
Net cash used in operating activities 21 (1,920,501) (3,927,399)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,523,961) (2,021,930)
Net cash used in investing activities (2,523,961) (2,021,930)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from investor (Net of costs) - 6,452,285
Gross proceeds from placement funds - 483,927
Payment of placement fund costs - (40,283)
Cash receipts from shareholder 5,100,000 -
Repayments of lease liabilities (917) (14,566)
(Payments)/Receipts of employee loans (107) 6,930
Net cash provided by financing activities 5,098,976 6,888,293
Net increase in cash and cash equivalents 654,514 938,964
Cash and cash equivalents at the beginning of financial year 7,221,085 6,624,364
Effect of foreign exchange rate changes (46,693) (342,243)
Cash and cash equivalents at the end of financial year 10 7,828,906 7,221,085
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
These general-purpose consolidated financial statements have been prepared in
accordance with the Corporations Act 2001, Australian Accounting Standards and
Interpretations of the Australian Accounting Standards Board and in compliance
with International Financial Reporting Standards as issued by the
International Accounting Standards Board. The Group is a for profit entity for
financial reporting purposes under Australian Accounting Standards. Material
accounting policies adopted in the preparation of these financial statements
are presented below and have been consistently applied unless stated
otherwise.
Except for cash flow information, the financial statements have been prepared
on an accrual basis and are based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets,
financial assets and financial liabilities.
Going Concern
During the year ended 31 December 2023 the Group incurred a loss after tax of
US$10,456,356 and had negative cash flows from operations of US$1,920,501.
Management has considered it is appropriate to prepare the financial
statements on a going concern basis. The year-end net cash position of the
Group was US$7,828,906. The losses were partly because of the non-operating
and non-cash items of US$9,752,935. One of the major non-operating items in
the period were loss on fair value change of financial instrument expenses of
US$1,685,242 and a share-based payment expense of US$7,616,663. Therefore, the
underlying EBlTDA for the period was positive US$676,301. Management has a
detailed plan to increase the mining and production capacity which is expected
to generate profit and positive cash flows from operations in the forthcoming
years.
These financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, nor to the
amounts or classification of liabilities that might be necessary should the
Group not be able to continue as a going concern.
a. Principles of Consolidation
The consolidated financial statements incorporate all of the assets,
liabilities and results of the Parent (Pyx Resources Limited) and all of the
subsidiaries (including any structured entities). Subsidiaries are entities
the Parent controls. The Parent controls an entity when it is exposed to, or
has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity. A list
of the subsidiaries is provided in Note 12.
The assets, liabilities and results of all subsidiaries are fully consolidated
into the financial statements of the Group from the date on which control is
obtained by the Group. The consolidation of a subsidiary is discontinued from
the date that control ceases. Intercompany transactions, balances and
unrealised gains or losses on transactions between Group entities are fully
eliminated on consolidation. Accounting policies of subsidiaries have been
changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to
the Group are presented as "non-controlling interests". The Group initially
recognises non-controlling interests that are present ownership interests in
subsidiaries and are entitled to a proportionate share of the subsidiary's net
assets on liquidation at either fair value or at the
non-controlling interests' proportionate share of the subsidiary's net assets.
Subsequent to initial recognition,
non-controlling interests are attributed their share of profit or loss and
each component of other comprehensive income. Non-controlling interests are
shown separately within the equity section of the statement of financial
position and statement of comprehensive income.
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill
is calculated as the excess of the sum of:
(i) the consideration transferred at fair value;
(ii) any non-controlling interest (determined under either the fair
value or proportionate interest method); and
(iii) the acquisition date fair value of any previously held equity
interest;
over the acquisition date fair value of any identifiable assets acquired and
liabilities assumed.
The acquisition date fair value of the consideration transferred for a
business combination plus the acquisition date fair value of any previously
held equity interest shall form the cost of the investment in the separate
financial statements.
Changes in the Group's ownership interests in subsidiaries that do not result
in the Group losing control over the subsidiaries are accounted for as equity
transactions. The carrying amounts of the Group's interests and the
non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries. Any difference between the amount by
which the non-controlling interests are adjusted and the fair value of the
consideration paid or received is recognised directly in equity and attributed
to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in
profit or loss and is calculated as the difference between (i) the aggregate
of the fair value of the consideration received and the fair value of any
retained interest and (ii) the previous carrying amount of the assets
(including goodwill), and liabilities of the subsidiary and any
non-controlling interests. All amounts previously recognised in other
comprehensive in come in relation to that subsidiary are accounted for as if
the Group had directly disposed of the related assets or liabilities of the
subsidiary (ie reclassified to profit or loss or transferred to another
category of equity as specified/permitted by applicable Accounting Standards).
The fair value of any investment retained in the former subsidiary at the date
when control is lost is regarded as the fair value on initial recognition for
subsequent accounting under AASE 139: Financial Instruments: Recognition and
Measurement, when applicable, the cost on initial recognition of an investment
in an associate or a joint venture.
The amount of goodwill recognised on acquisition of each subsidiary in which
the Group holds less than 100% interest will depend on the method adopted in
measuring the non-controlling interest. The Group can elect in most
circumstances to measure the non-controlling interest in the acquiree either
at fair value (full goodwill method) or at the non-controlling interest's
proportionate share of the subsidiary's identifiable net assets (proportionate
interest method). In such circumstances, the Group determines which method to
adopt for each acquisition and this is stated in the respective note to the
financial statements disclosing the business combination.
Under the full goodwill method, the fair value of the non-controlling interest
is determined using valuation techniques which make the maximum use of market
information where available.
Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill on acquisition of associates is included in investments in
associates.
Goodwill is tested for impairment annually and is allocated to the Group's
cash-generating units or groups of cash generating units, representing the
lowest level at which goodwill is monitored and not larger than an operating
segment. Gains and losses on the disposal of an entity include the carrying
amount of goodwill related to the entity disposed of.
Changes in the ownership interests in a subsidiary that do not result in a
loss of control are accounted for as equity transactions and do not affect the
carrying amounts of goodwill.
Prior Year Share Placement
During the 2022 financial year PYX received a total initial investment of
US$6,827,322 from a US Institutional Investor, L1 Capital Global Opportunities
Master Fund ("Investor"), for US$7,777,778 worth of PYX shares ("Subscription
Amount") via a share placement, as announced on 11 March 2022 and 2 December
2022.
Statement of financial position
The consolidated statement of financial position as at 31 December 2023
represents the consolidated financial position of Pyx Resources Limited and
its controlled entities as at 31 December 2023.
b. Income Tax
The income tax expense (income) for the year comprises current income tax
expense (income) and deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on
taxable income for the current period. Current tax liabilities (assets) are
measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority using tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax expense reflects movements in deferred tax asset and deferred tax
liability balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited
outside profit or loss when the tax relates to items that are recognised
outside profit or loss or arising from a business combination.
A deferred tax liability shall be recognised for all taxable temporary
differences, except to the extent that the deferred tax liability arises from:
(a) the initial recognition of goodwill; or (b) the initial recognition of an
asset or liability in a transaction which: (i) is not a business combination;
and (ii) at the time of the transaction, affects neither accounting profit nor
taxable profit (tax loss).
Deferred tax assets and liabilities are calculated at the tax rates that are
expected to apply to the period when the asset is realised or the liability is
settled and their measurement also reflects the manner in which management
expects to recover or settle the carrying amount of the related asset or
liability. With respect to non-depreciable items of property, plant and
equipment measured at fair value and items of investment property measured at
fair value, the related deferred tax liability or deferred tax asset is
measured on the basis that the carrying amount of the asset will be recovered
entirely through sale. When an investment property that is depreciable is held
by the entity in a business model whose objective is to consume substantially
all of the economic benefits embodied in the property through use over time
(rather than through sale), the related deferred tax liability or deferred tax
asset is measured on the basis that the carrying amount of such property will
be recovered entirely through use.
Deferred tax assets relating to temporary differences and unused tax losses
are recognised only to the extent that it is probable that future taxable
profit will be available against which the benefits of the deferred tax asset
can be utilised, unless the deferred tax asset relating to temporary
differences arises from the initial recognition of an asset or liability in a
transaction that:
- is not a business combination; and
- at the time of the transaction, affects neither accounting
profit nor taxable profit (tax loss).
Where temporary differences exist in relation to investments in subsidiaries,
branches, associates, and joint ventures, deferred tax assets and liabilities
are not recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the reversal will
occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable
right of set-off exists and it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where: (i) a legally
enforceable right of set-off exists; and (ii) the deferred tax assets and
liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities where it is
intended that net settlement or simultaneous realisation and settlement of the
respective asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
c. Inventories
Inventories are measured at the lower of cost and net realisable value. The
cost of manufactured products includes direct materials, direct labour and an
appropriate proportion of variable and fixed overheads. Overheads are applied
on the basis of normal operating capacity. Costs are assigned on the first-in,
first-out basis.
d. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value
as indicated less, where applicable, any accumulated depreciation and
impairment losses.
Property, plant and equipment are measured on the cost basis and therefore
carried at cost less accumulated depreciation and any accumulated impairment.
In the event the carrying amount of plant and equipment is greater than the
estimated recoverable amount, the carrying amount is written down immediately
to the estimated recoverable amount and impairment losses are recognised. A
formal assessment of recoverable amount is made when impairment indicators are
present (refer to Note 1(g) for details of impairment).
The carrying amount of plant and equipment is reviewed annually by directors
to ensure it is not in excess of the recoverable amount from these assets. The
recoverable amount is assessed on the basis of the expected net cash flows
that will be received from the asset's employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in
determining recoverable amounts.
The cost of fixed assets constructed within the Consolidated Group includes
the cost of materials, direct labour, borrowing costs and an appropriate
proportion of fixed and variable overheads.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance are
recognised as expenses in profit or loss during the financial period in which
they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised
leased assets, but excluding freehold land, is depreciated on a straight-line
basis over the asset's useful life to the Consolidated Group commencing from
the time the asset is held ready for use. Leasehold improvements are
depreciated over the shorter of either the unexpired period of the lease or
the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset Depreciation Rate
Buildings 5%
Plant and Equipment 20%
Furniture and Fittings 25%
Motor Vehicle 25%
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the
carrying amount. These gains and losses are recognised in profit or loss in
the period in which they arise. Gains shall not be classified as revenue. When
revalued assets are sold, amounts included in the revaluation surplus relating
to that asset are transferred to retained earnings.
e. Leases (the Group as lessee)
At inception of a contract, the Group assesses if the contract contains or is
a lease. If there is a lease present, a
right-of-use asset and a corresponding lease liability is recognised by the
Group where the Group is a lessee. However, all contracts that are classified
as short-term leases (lease with remaining lease term of 12 months or less)
and leases of low value assets are recognised as an operating expense on a
straight-line basis over the term of the lease.
Initially the lease liability is measured at the present value of the lease
payments still to be paid at commencement date. The lease payments are
discounted at the interest rate implicit in the lease. If this rate cannot be
readily determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as
follows:
- fixed lease payments less any lease incentives;
- variable lease payments that depend on an index or rate,
initially measured using the index or rate at the commencement date;
- the amount expected to be payable by the lessee under
residual value guarantees;
- the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options;
- lease payments under extension options if lessee is
reasonably certain to exercise the options; and
- payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding
lease liability as mentioned above, any lease payments made at or before the
commencement date as well as any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the
underlying asset whichever is the shortest.
Where a lease transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group anticipates to exercise a purchase
option, the specific asset is depreciated over the useful life of the
underlying asset.
f. Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions to the instrument. For financial
assets, this is the date that the Group commits itself to either the purchase
or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments (except for trade receivables) 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 to profit or loss immediately. Where available, quoted prices in an
active market are used to determine fair value. In other circumstances,
valuation techniques are adopted.
Trade receivables are initially measured at the transaction price if the trade
receivables do not contain a significant financing component or if the
practical expedient was applied as specified in AASB 15.63.
Classification and subsequent measurement financial liabilities
Financial instruments are subsequently measured at:
- amortised cost; or
- fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the
financial liability is:
- a contingent consideration of an acquirer in a business
combination to which AASB 3: Business Combinations applies;
- held for trading; or
- initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost
using the effective interest method.
The effective interest method is a method of calculating the amortised cost of
a debt instrument and of allocating interest expense in profit or loss over
the relevant period. The effective interest rate is the internal rate of
return of the financial asset or liability. That is, it is the rate that
exactly discounts the estimated future cash flows through the expected life of
the instrument to the net carrying amount at initial recognition.
Financial assets
Financial assets are subsequently measured at:
- amortised cost;
- fair value through other comprehensive income; or
- fair value through profit or loss. Measurement is on the
basis of two primary criteria:
- the contractual cash flow characteristics of the financial
asset; and
- the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured
at amortised cost:
- the financial asset is managed solely to collect contractual
cash flows; and
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on the principal
amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured
at fair value through other comprehensive income:
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on the principal
amount outstanding on specified dates;
- the business model for managing the financial assets
comprises both contractual cash flows collection and the selling of the
financial asset.
By default, all other financial assets that do not meet the measurement
conditions of amortised cost and fair value through other comprehensive income
are subsequently measured at fair value through profit or loss.
The Group initially designates a financial instrument as measured at fair
value through profit or loss if:
- it eliminates or significantly reduces a measurement or
recognition inconsistency (often referred to as "accounting mismatch") that
would otherwise arise from measuring assets or liabilities or recognising the
gains and losses on them on different bases;
- it is in accordance with the documented risk management or
investment strategy, and information about the groupings was documented
appropriately, so that the performance of the financial liability that was
part of a group of financial liabilities or financial assets can be managed
and evaluated consistently on a fair value basis;
- it is a hybrid contract that contains an embedded derivative
that significantly modifies the cash flows otherwise required by the contract.
The initial designation of the financial instruments to measure at fair value
through profit or loss is a one-time option on initial classification and is
irrevocable until the financial asset is derecognised.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset
or financial liability from the statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (i.e. when the obligation
in the contract is discharged, cancelled or expires). An exchange of an
existing financial liability for a new one with substantially modified terms,
or a substantial modification to the terms of a financial liability is treated
as an extinguishment of the existing liability and recognition of a new
financial liability.
The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable, including any non-cash
assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its
cash flows expires, or the asset is transferred in such a way that all the
risks and rewards of ownership are substantially transferred.
All of the following criteria need to be satisfied for derecognition of
financial asset:
- the right to receive cash flows from the asset has expired or
been transferred;
- all risk and rewards of ownership of the asset have been
substantially transferred; and
- the Group no longer controls the asset (i.e. the Group has no
practical ability to make a unilateral decision to sell the asset to a third
party).
On derecognition of a financial asset measured at amortised cost, the
difference between the asset's carrying amount and the sum of the
consideration received and receivable is recognised in profit or loss.
On derecognition of a debt instrument classified as at fair value through
other comprehensive income, the cumulative gain or loss previously accumulated
in the investment revaluation reserve is reclassified to profit or loss.
On derecognition of an investment in equity which was elected to be classified
under fair value through other comprehensive income, the cumulative gain or
loss previously accumulated in the investment revaluation reserve is not
reclassified to profit or loss, but is transferred to retained earnings.
Impairment
The Group recognises a loss allowance for expected credit losses on:
- financial assets that are measured at amortised cost or fair
value through other comprehensive income;
- lease receivables;
- contract assets (e.g. amounts due from customers under
construction contracts);
- loan commitments that are not measured at fair value through
profit or loss; and
- financial guarantee contracts that are not measured at fair
value through profit or loss. Loss allowance is not recognised for:
- financial assets measured at fair value through profit or
loss; or
- equity instruments measured at fair value through other
comprehensive income.
Expected credit losses are the probability-weighted estimate of credit losses
over the expected life of a financial instrument. A credit loss is the
difference between all contractual cash flows that are due and all cash flows
expected to be received, all discounted at the original effective interest
rate of the financial instrument.
The Group uses the following approaches to impairment, as applicable under
AASB 9: Financial Instruments:
- the general approach
- the simplified approach
General approach
Under the general approach, at each reporting period, the Group assesses
whether the financial instruments are credit-impaired, and if:
- the credit risk of the financial instrument has increased
significantly since initial recognition, the Group measures the loss allowance
of the financial instruments at an amount equal to the lifetime expected
credit losses; or
- there is no significant increase in credit risk since initial
recognition, the Group measures the loss allowance for that financial
instrument at an amount equal to 12-month expected credit losses.
Simplified approach
The simplified approach does not require tracking of changes in credit risk at
every reporting period, but instead requires the recognition of lifetime
expected credit loss at all times. This approach is applicable to:
- trade receivables or contract assets that result from
transactions within the scope of AASB 15: Revenue from Contracts with
Customers and which do not contain a significant financing component; and
- lease receivables.
In measuring the expected credit loss, a provision matrix for trade
receivables was used taking into consideration various data to get to an
expected credit loss (i.e. diversity of customer base, appropriate groupings
of historical loss experience, etc).
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognises the movement in the loss
allowance as an impairment gain or loss in the statement of profit or loss and
other comprehensive income.
The carrying amount of financial assets measured at amortised cost includes
the loss allowance relating to that asset.
Assets measured at fair value through other comprehensive income are
recognised at fair value, with changes in fair value recognised in other
comprehensive income. Amounts in relation to change in credit risk are
transferred from other comprehensive income to profit or loss at every
reporting period.
For financial assets that are unrecognised (e.g. loan commitments yet to be
drawn, financial guarantees), a provision for loss allowance is created in the
statement of financial position to recognise the loss allowance.
g. Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any
indication that an asset may be impaired. The assessment will include the
consideration of external and internal sources of information including
dividends received from subsidiaries, associates or joint ventures deemed to
be out of pre-acquisition profits. If such an indication exists, an impairment
test is carried out on the asset by comparing the recoverable amount of the
asset, being the higher of the asset's fair value less costs of disposal and
value in use, to the asset's carrying amount. Any excess of the asset's
carrying amount over its recoverable amount is recognised immediately in
profit or loss, unless the asset is carried at a revalued amount in accordance
with another Standard (e.g. in accordance with the revaluation model in AASB
116: Property, Plant and Equipment). Any impairment loss of a revalued asset
is treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the cash-generating unit
to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with
indefinite lives and intangible assets not yet available for use.
When an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so 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 (or
cash-generating unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss, unless the relevant asset is carried
at a revalued amount, in which case the reversal of the impairment loss is
treated as a revaluation increase.
h. Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group's entities is the currency of the
primary economic environment in which that entity operates. The consolidated
financial statements are presented in United States dollars, which is the
Parent Entity's functional currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the date of the transaction. Foreign
currency monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction. Non-monetary items measured at
fair value are reported at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary items are
recognised in profit or loss, except exchange differences that arise from net
investment hedges.
Exchange differences arising on the translation of non-monetary items are
recognised directly in other comprehensive income to the extent that the
underlying gain or loss is recognised in other comprehensive income; otherwise
the exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations, whose functional
currency is different from the Group's presentation currency, are translated
as follows:
- assets and liabilities are translated at exchange rates
prevailing at the end of the reporting period;
- income and expenses are translated at exchange rates on the
date of transaction; and
- all resulting exchange differences are recognised in other
comprehensive income.
Exchange differences arising on translation of foreign operations with
functional currencies other than US dollars are recognised in other
comprehensive income and included in the foreign exchange translation reserve
in the statement of change in equity and allocated to non-controlling interest
where relevant. The cumulative amount of these differences is reclassified
into profit or loss in the period in which the operation is disposed of.
i. Fair Value Measurement
When an asset or liability, financial or non-financial, is measured at fair
value for recognition or disclosure purposes, the fair value is based on the
price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date;
and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous
market.
Fair value is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming they act in their economic
best interests. For non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, are used, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three
levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifications are reviewed at each
reporting date and transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to the fair
value measurement.
j. Exploration and Evaluation Assets
Exploration and evaluation expenditure in relation to separate areas of
interest for which rights of tenure are current is carried forward as an asset
in the statement of financial position where it is expected that the
expenditure will be recovered through the successful development and
exploitation of an area of interest, or by its sale; or exploration activities
are continuing in an area and activities have not reached a stage which
permits a reasonable estimate of the existence or otherwise of economically
recoverable reserves. Where a project or an area of interest has been
abandoned, the expenditure incurred thereon is written off in the year in
which the decision is made.
k. Employee Benefits
Short-term employee benefits
Provision is made for the Group's obligation for short-term employee benefits.
Short-term employee benefits are benefits (other than termination benefits)
that are expected to be settled wholly before 12 months after the end of the
annual reporting period in which the employees render the related service,
including wages, salaries and sick leave. Short-term employee benefits are
measured at the (undiscounted) amounts expected to be paid when the obligation
is settled.
The Group's obligations for short-term employee benefits such as wages,
salaries and sick leave are recognised as part of current trade and other
payables in the statement of financial position. The Group's obligations for
employees' annual leave and long service leave entitlements are recognised as
provisions in the statement of financial position.
Other long-term employee benefits
Provision is made for employees' long service leave and annual leave
entitlements not expected to be settled wholly within 12 months after the end
of the annual reporting period in which the employees render the related
service. Other long-term employee benefits are measured at the present value
of the expected future payments to be made to employees. Expected future
payments incorporate anticipated future wage and salary levels, durations of
service and employee departures and are discounted at rates determined by
reference to market yields at the end of the reporting period on government
bonds that have maturity dates that approximate the terms of the obligations.
Any remeasurements for changes in assumptions of obligations for other
long-term employee benefits are recognised in profit or loss in the periods in
which the changes occur.
The Group's obligations for long-term employee benefits are presented as
non-current provisions in its statement of financial position, except where
the Group does not have an unconditional right to defer settlement for at
least 12 months after the end of the reporting period, in which case the
obligations are presented as current provisions.
Equity-settled compensation
The Group operates an employee performance rights plan. Share-based payments
to employees are measured at the fair value of the instruments at grant date
and amortised over the vesting periods. The corresponding amounts are
recognised in the share-based payment reserve and statement of profit and loss
respectively. The fair value of rights is determined by reference to the share
price of the Company. The number of rights expected to vest is reviewed and
adjusted at the end of each reporting period such that the amount recognised
for services received as consideration for the equity instruments granted is
based on the number of equity instruments that eventually vest.
l. Provisions
Provisions are recognised when the Group has a legal or constructive
obligation, as a result of past events, for which it is probable that an
outflow of economic benefits will result and that outflow can be reliably
measured.
Provisions are measured using the best estimate of the amounts required to
settle the obligation at the end of the reporting period.
m. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand
with banks, other short-term highly liquid investments with original
maturities of 3 months or less, and bank overdrafts. Bank overdrafts are
reported within borrowings in current liabilities on the statement of
financial position.
n. Revenue and Other Income
Revenue from sales of zircon is recognised either when the customer takes
possession of and accepts the products or when the products are ready for
shipment, according to the sales contract terms. If the products are a partial
fulfilment of a contract covering other goods and/or services, then the amount
of revenue recognised is an appropriate proportion of the total transaction
price under the contract, allocated between all the goods and services
promised under the contract on a relative stand-alone selling price basis.
Interest income is recognised using the effective interest method.
o. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or
production of assets that necessarily take a substantial period of time to
prepare for their intended use or sale are added to the cost of those assets,
until such time as the assets are substantially ready for their intended use
or sale.
All other borrowing costs are recognised in profit or loss in the period in
which they are incurred.
p. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted
to conform to changes in presentation for the current financial year.
q. Critical Accounting Estimates, Judgements and Assumptions
The directors evaluate estimates and judgements incorporated into the
financial statements based on historical knowledge and best available current
information. Estimates assume a reasonable expectation of future events and
are based on current trends and economic data, obtained both externally and
within the Group.
Key estimates
(i) Impairment
The Group assesses impairment on inventories, property, plant and equipment
and intangible assets at the end of each reporting period by evaluating the
conditions and events specific to the Group that may be indicative of
impairment triggers. Recoverable amounts of relevant assets are reassessed
using value-in-use calculations which incorporate various key assumptions.
Key judgements
(i) Share-based payments
The fair value of performance rights is measured at grant date, taking into
account the terms and conditions upon which those shares were granted. The
cumulative expense recognised between grant date and vesting date is adjusted
to reflect the Director's best estimate of the number of rights that will
ultimately vest because of internal and market conditions, such as the
employees having to remain with the Group until vesting date or such that
employees are required to meet internal KPI.
When shareholders' approval is required for the issuance of performance
rights, the expenses are recognised based on the grant date fair value
according to the management estimation.
(ii) Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only
if the Group considers it is probable that future taxable amounts will be
available to utilise those temporary differences and losses.
(iii) Exploration and evaluation cost
Exploration and evaluation costs have been capitalised on the basis that the
Group will commence commercial production in the future, from which time the
costs will be amortised in proportion to the depletion of the mineral
resources. Key judgements are applied in considering costs to be capitalised
which includes determining expenditures directly related to these activities
and allocating overheads between those that are expensed and capitalised. In
addition, costs are only capitalised that are expected to be recovered either
through successful development or sale of the relevant mining interest.
Factors that could impact the future commercial production at the mine include
the level of reserves and resources, future technology changes, which could
impact the cost of mining, future legal changes and changes in commodity
prices. To the extent that capitalised costs are determined not to be
recoverable in the future, they will be written off in the period in which
this determination is made.
NOTE 2: PARENT INFORMATION
The following information has been extracted from the books and records of the
financial information of the Parent Entity set out below and has been prepared
in accordance with Australian Accounting Standards.
2023 2022
US$ US$
Statement of Financial Position
ASSETS
Current assets 21,370,158 17,441,243
Non-current assets 78,058,861 78,058,861
TOTAL ASSETS 99,429,019 95,500,104
LIABILITIES
Current liabilities 8,107,660 4,857,163
Non-current liabilities - -
TOTAL LIABILITIES 8,107,660 4,857,163
EQUITY
Issued capital 112,862,604 109,497,411
Accumulated losses (22,544,235) (28,097,926)
Reserves 1,002,990 9,243,456
Non-controlling interest - -
TOTAL EQUITY 91,321,359 90,642,941
Statement of Profit or Loss and Other Comprehensive Income
Net loss (10,303,438) (9,231,282)
Total comprehensive income (10,303,438) (9,231,282)
NOTE 3: REVENUE
The Group has recognised the following amounts relating to revenue in the
statement of profit or loss.
Note 2023 2022
US$ US$
Sales Revenue 3a 22,671,641 22,703,190
Other income 28,900 8,043
a. Sales of mineral sands
The Group earns revenue by mining, processing, and subsequently selling
mineral sands (including zircon and rutile) to customers based in the
Americas, Asia, China and Europe. Revenue from the sale of product is
recognised at the point in time when control has been transferred to the
customer, generally being when the product has been dispatched and is no
longer under the physical control of the Group. In cases where control of
product is transferred to the customer before dispatch takes place, revenue is
recognised when the customer has formally acknowledged their legal ownership
of the product, which includes all inherent risks associated with control of
the product. In these cases, product is clearly identified and immediately
available to the customer.
Sales to customers are generally denominated in US Dollars. The effect of
variable consideration arising from rebates, discounts and other similar
arrangements with customers is included in revenue to the extent that it is
highly probable that there will be no significant reversal of the cumulative
amount of revenue recognised when any pricing uncertainty is resolved.
NOTE 4: LOSS FOR THE YEAR
2023 2022
US$ US$
Loss before income tax from continuing operations includes the following
specific expenses:
a. Expenses
Cost of sales 19,894,961 17,449,606
Interest expense on financial liabilities not classified as at fair
value through profit or loss:
- unrelated parties 57,595 29,907
Finance charges - 39
Less: Interest income (2,080) (2,007)
Net interest expense 55,515 27,939
Employee benefits expense:
- Staff salaries and benefits 322,207 323,931
- Share based payments 7,616,663 5,566,871
Rental expense on operating leases - short-term lease expense
1,970 4,304
Depreciation and amortisation 360,999 242,502
NOTE 5: LOSS ON FAIR VALUE CHANGE
2023 2022
US$ US$
Loss on fair value change of financial instruments (1,685,242) (2,297,990)
(1,685,242) (2,297,990)
NOTE 6: TAX EXPENSE
2023 2022
US$ US$
a. The components of tax benefit income comprise: (161) 91,046
Deferred tax (expense)/benefit (161) 91,046
2023 2022
US$ US$
b. The prima facie tax on (loss) from ordinary activities before income
tax is reconciled to income tax as follows:
(Loss) before income tax expense (10,456,195) (9,524,646)
Prima facie tax payable on (loss) from ordinary activities before income tax
at
2,614,049 2,381,162
25% (2022: 25%)
Tax effect of:
- non-deductible items (422,218) (2,249,813)
- Tax losses and temporary differences not recognised as (2,180,050) (67,224)
deferred tax assets
- Impact of overseas tax differential (11,942) 26,921
Income tax (expense)/benefit (161) 91,046
NOTE 7: KEY MANAGEMENT PERSONNEL COMPENSATION
Refer to the remuneration report contained in the directors' report for
details of the remuneration paid or payable to each member of the Group's key
management personnel (KMP) for the year ended 31 December 2023. The total
remuneration paid to KMP of the Company and the Group during the year are as
follows:
2023 2022
US$ US$
Short-term employee benefits 762,141 728,876
Share-based payments - 5,515,195
Total KMP compensation 762,141 6,244,071
During the 2023 financial year, all performance rights value of US$15,857,129
held by Mr. Oliver Hasler were cancelled.
NOTE 8: AUDITOR'S REMUNERATION
2023 2022
US$ US$
Remuneration of the auditor for:
Audit or review of financial statement
Pitcher Partners 34,522 -
Hall Chadwick (NSW) 17,925 67,924
Other services
T.K. Lo (HK)
4,000 3,800
KAP Syarief Basir & Rekan 5,092 15,664
SingAssure 2,651 -
Hall Chadwick (NSW) 2,655 -
66,845 87,388
NOTE 9: LOSS PER SHARE
2023 2022
US$ US$
a. Reconciliation of losses to profit or loss:
Loss attributable to non-controlling equity interest (10,456,356) (9,433,600)
Loss used to calculate basic and dilutive EPS (10,456,356) (9,433,600)
2023 2022
No. No.
Weighted average number of ordinary shares on issue used in the calculating of
basic loss per share 451,589,470 436,375,601
Weighted average number of dilutive options outstanding 4,407,076 4,944,576
Weighted average number of dilutive warrants outstanding 3,000,000 3,000,000
Weighted average number of ordinary shares outstanding during the year used in
calculating dilutive loss per share 458,996,546 464,540,177
Weighted average number of anti-dilutive performance rights outstanding 240,000 20,220,000
240,000 20,220,000
Loss per share
Basic loss per share (cents) (2.32) (2.16)
Diluted loss per share (cents) (2.32) (2.16)
NOTE 10: CASH AND CASH EQUIVALENTS
2023 2022
US$ US$
Cash at bank and on hand 7,828,906 7,221,085
7,828,906 7,221,085
Reconciliation of cash
Cash and cash equivalents at the end of the financial year as shown in the
statement of
cash flows is reconciled to items in the statement of financial position as
follows:
Cash and cash equivalents 7,828,906 7,221,085
7,828,906 7,221,085
NOTE 11: TRADE AND OTHER RECEIVABLES
2023 2022
US$ US$
CURRENT
Trade receivables 1,537,916 1,379,259
1,537,916 1,379,259
Other receivables 1,871 1,731
GST/VAT receivable 17,783 15,310
19,654 17,041
Total current trade and other receivables 1,557,570 1,396,300
a. Credit Risk
The Group has no significant concentration of credit risk with respect to any
single counterparty or group of counterparties other than those receivables
specifically provided for and mentioned within Note 10. The class of assets
described as "trade and other receivables" is considered to be the main source
of credit risk related to the Group.
The Group always measures the loss allowance for trade receivables at an
amount equal to lifetime expected credit loss. The expected credit losses on
trade receivables are estimated using a provision matrix by reference to past
default experience of the debtor and an analysis of the debtor's current
financial position, adjusted for factors that are specific to the debtor,
general economic conditions of the industry in which the debtor operates and
an assessment of both the current and the forecast direction of conditions at
the reporting date.
There has been no change in the estimation techniques used or significant
assumptions made during the current reporting period.
The Group writes off a trade receivable when there is information indicating
that the debtor is in severe financial difficulty and there is no realistic
prospect of recovery; for example, when the debtor has been placed under
liquidation or has entered into bankruptcy proceedings, or when the trade
receivables are over two years past due, whichever occurs earlier. None of the
trade receivables that have been written off are subject to enforcement
activities.
b. Collateral Held as Security
The Group does not hold any collateral over the trade and other receivables.
NOTE 12: INVENTORIES
2023 2022
US$ US$
CURRENT
At cost: Finished goods
2,308,586 705,776
2,308,586 705,776
NOTE 13: INTERESTS IN SUBSIDIARIES
a. Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary
shares, which are held directly or indirectly by the Group. The proportion of
ownership interests held equals the voting rights held by the Group. Each
subsidiary's principal place of business is also its country of incorporation.
Name of Subsidiary Principal Place of Business Ownership Interest Held by the Group Proportion of Non- Controlling Interests
2023 2022 2023 2022
% % % %
Takmur Pte Limited Singapore 100 100 - -
PT Andary Usaha Makmur Indonesia 99.5 99.5 0.5 0.5
PT Investasi Mandiri* Indonesia - - 100 100
Tisma Development (HK) Ltd. Hong Kong 100 100 - -
PT Tisma Investasi Abadi Indonesia 99 99 1 1
PT Tisma Global Nusantara** Indonesia - - 100 100
* This entity is accounted for as a controlled entity on the
basis that control was obtained through the execution of an exclusive
operations and management agreement between PT Andary Usaha Makmur and PT
Investasi Mandiri and was for nil purchase consideration.
** This entity is accounted for as a controlled entity on the
basis that control was obtained through the execution of an exclusive
operations and management agreement between PT Tisma Investasi Abadi and PT
Tisma Global Nusantara and was for nil purchase consideration.
The non-controlling interests in PT Andary Usaha Makmur and PT Tisma Investasi
Abadi are not material to the Group.
Subsidiary financial statements used in the preparation of these consolidated
financial statements have also been prepared as at the same reporting date as
the Group's financial statements.
b. Summarised Financial Information of Subsidiaries with Material Non-controlling Interests
Set out below is the summarised financial information for each subsidiary that
has non-controlling interests that are material to the Group, before any
intragroup eliminations.
PT Investasi Mandiri
2023 2022
US$ US$
Summarised Financial Position
Current assets 6,666,649 5,106,190
Non-current assets 4,522,663 2,280,298
Current liabilities (12,449,443) (8,865,505)
Non-current liabilities - -
NET ASSETS (1,260,130) (1,479,017)
Carrying amount of non-controlling interests (1,260,130) (1,479,017)
Summarised Financial Performance
Revenue 22,671,641 22,703,190
Profit/(Loss) after income tax 182,476 53,431
Other comprehensive income after tax 36,410 (659,903)
Total comprehensive income 218,886 (606,472)
Loss attributable to non-controlling interests 218,886 (606,472)
Distributions paid to non-controlling interests - -
Summarised Cash Flow Information
Net cash used in operating activities (1,676,010) (2,260,338)
Net cash used in investing activities (1,964,246) (1,086,625)
Net cash from financing activities 3,583,390 3,510,633
Net (decrease)/increase in cash and cash equivalents (56,866) 163,670
PT Tisma Global Nusantura
2023 2022
US$ US$
Summarised Financial Position
Current assets 39,235 122,011
Non-current assets 155,058 74,596
Current liabilities (380,417) (332,308)
Non-current liabilities - -
NET ASSETS (186,124) (135,701)
Carrying amount of non-controlling interests (186,124) (135,701)
Summarised Financial Performance
Revenue - -
Loss after income tax (49,590) (14,649)
Other comprehensive income after tax (833) 12,833
Total comprehensive income (50,423) (1,816)
Loss attributable to non-controlling interests (50,423) (1,816)
Distributions paid to non-controlling interests - -
Summarised Cash Flow Information
Net cash used in operating activities 130,467 (82,312)
Net cash used in investing activities (173,808) (74,596)
Net cash from financing activities 45,017 188,322
Net decrease in cash and cash equivalents 1,676 31,414
NOTE 14: PROPERTY, PLANT AND EQUIPMENT
2023 2022
US$ US$
Land and Buildings
Freehold land at cost 211,603 211,603
Translation (7,194) (11,286)
Total land 204,409 200,317
Buildings at cost 1,208,238 1,231,651
Accumulated depreciation (285,312) (248,221)
Translation (31,572) (53,375)
Total buildings 891,354 930,055
Total land and buildings 1,095,763 1,130,372
Construction in Progress
Construction in Progress at cost 4,409,048 2,258,130
Translation (112,341) (132,079)
Total Construction in Progress 4,296,707 2,126,051
Plant and Equipment
Plant and equipment at cost 1,048,146 1,073,904
Accumulated depreciation (442,341) (333,363)
Translation (32,301) (53,678)
Total plant and equipment 573,504 686,863
Motor Vehicles
Motor vehicles at cost 138,707 138,707
Accumulated depreciation (77,322) (42,618)
Translation (2,774) (6,254)
Total motor vehicles 58,611 89,835
Furniture and Fittings
Furniture and fittings at cost 36,192 31,806
Accumulated depreciation (18,557) (13,145)
Translation (104) (586)
Total furniture and fittings 17,531 18,075
Total property, plant and equipment 6,042,116 4,051,196
a. Movements in Carrying Amounts
Movements in the carrying amounts for each class of property, plant and
equipment between the beginning and the end of the current financial year:
Freehold Buildings Construction Plant and Motor Furniture Total
Land in Progress Equipment Vehicles and Fittings
US$ US$ US$ US$ US$ US$ US$
Balance at 1 Jan 2022 196,989 650,394 659,605 634,953 63,981 22,450 2,228,372
Additions 14,614 381,302 1,652,555 227,191 58,949 1,138 2,335,749
Transfer - - (54,030) - - - (54,030)
Depreciation expense - (48,266) - (121,603) (26,841) (4,927) (201,637)
Translation (11,286) (53,375) (132,079) (53,678) (6,254) (586) (257,258)
Balance at 31 Dec 2022 200,317 930,055 2,126,051 686,863 89,835 18,075 4,051,196
Balance at 1 Jan 2023 200,317 930,055 2,126,051 686,863 89,835 18,075 4,051,196
Additions - - 2,230,243 2,099 - 4,386 2,236,728
Transfer - - (79,325) - - - (79,325)
Depreciation expense - (60,504) - (136,835) (34,704) (5,412) (237,455)
Translation 4,092 21,803 19,738 21,377 3,480 482 70,972
Balance at 31 Dec 2023 204,409 891,354 4,296,707 573,504 58,611 17,531 6,042,116
NOTE 15: INTANGIBLE ASSETS
2023 2022
US$ US$
Goodwill:
Cost 7,774 7,774
Accumulated impairment losses - -
Net carrying amount 7,774 7,774
Mining License Renewal:
Cost 360,937 88,984
Accumulated amortization (153,499) (40,041)
Translation 21,102 (2,531)
Net carrying amount 228,540 46,412
Exploration asset:
Carrying value on acquisition 73,260,053 73,260,053
Net carrying amount 73,260,053 73,260,053
Total intangible assets 73,496,367 73,314,239
Mining Exploration
Goodwill Licenses assets Total
US$ US$ US$ US$
Year ended 31 December 2022
Balance at the beginning of the year 7,774 66,739 73,260,053 73,334,566
Amortisation - (17,796) - (17,796)
Translation - (2,531) - (2,531)
Closing value at 31 December 2022 7,774 46,412 73,260,053 73,314,239
Year ended 31 December 2023
Balance at the beginning of the year 7,774 46,412 73,260,053 73,314,239
Additions - 271,953 - 271,953
Amortisation - (113,458) - (113,458)
Translation - 23,633 - 23,633
Closing value at 31 December 2023 7,774 228,540 73,260,053 73,496,367
NOTE 16: DEFERRED TAX ASSETS (NON-CURRENT)
Non-current assets - deferred tax
2023 2022
US$ US$
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses 11,661 110,811
Property, plant and equipment (13,570) (8,131)
Employee benefits 1,748 (11,634)
Deferred tax asset (161) 91,046
Amount expected to be recovered with 12 months
Amount expected to be recovered after more than 12 months - 91,046
Amount expected to be settled within 12 months (161) -
Amount expected to be settled after more than 12 months - -
(161) 91,046
Movements:
Opening balance 523,421 471,811
Transferred to profit or loss (Note 5) (161) 91,046
Foreign exchange 3,366 (39,436)
Closing balance 526,626 523,421
NOTE 17: OTHER LIABILITIES
2023 2022
US$ US$
Prepayments from investor* 4,064,122 6,827,322
Allocation of costs - (309,154)
Less: fair value of initial shares - (3,702,036)
Less: fair value of subscribed shares (3,400,000) (1,050,000)
Loss on fair value change 1,667,446 2,297,990
Balance at the end of reporting period 2,331,568 4,064,122
* On 11 March 2022 the Company entered into Share Subscription
Agreement ("Subscription Agreement") with L1 Capital Global Opportunities
Master Fund ("L1" or "Investor") and received an advance payment amount of
US$4,383,822 (net of costs) from L1 as a prepayment for US$5 million worth of
PYX shares ("Initial Investment Subscription Amount") via a share placement.
The Company has issued initial 3,000,000 shares at zero value and 2,083,431
unlisted options to L1.
The key terms and conditions of the Subscription Agreement are:
• The Investor will immediately prepay a lump sum of
US$4,500,000 for Placement Shares worth US$5,000,000 and on mutual consent, up
to an additional US$9,000,000.
• The Investor will specify the time(s) of issuance(s) of
shares (the "Placement Shares") no later than 24 months following the date of
the applicable funding date to offset the Subscription Amount.
• The subscription price for the Placement Shares was
initially 130% of the average of the 5 daily VWAPs on the applicable exchange
(NSX or LSE) preceding the applicable funding date. Commencing 30 days after
the funding date, the Investor may elect to subscribe for the Placement Shares
at 95% of the average of 3 daily VWAPs over the 15 trading days (on the
applicable exchange) prior to the Share Issuance Date.
• The Investor will not sell more than 20% of the monthly
trading volume in any month.
• On each of the applicable funding dates, the Company will
issue to the Investor a number of Options equal to 40% of the prepayment
amount divided by the average of the 5 daily VWAPs preceding the applicable
funding date. Each option will have a strike price equal to 130% of the
average of the 5 daily VWAPs preceding the applicable funding date and expire
3 years from the applicable funding date.
• To the extent that any Shares remain unissued at the
24-month anniversary of the date of the prepayment, such Shares will be
mandatorily issued at that time, based on the Subscription Price applying at
the time.
On 5 January 2023, 2,436,438 shares valued at US$850,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 23 February 2023, 2,976,191 shares valued at US$500,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 30 March 2023, 2,732,241 shares valued at US$500,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 16 June 2023, 3,482,172 shares valued at US$700,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 25 August 2023, 2,072,110 shares valued at US$500,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 5 December 2023, 1,982,397 shares valued at US$350,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
These shares were issued in connection with the funds of US$4,383,822 received
from L1 as a prepayment for US$5 million worth of PYX shares.
* On 2 December 2022, L1 has invested an additional
US$2,500,000 in the Company in exchange for US$2,777,778 worth of PYX shares.
The Company received the additional advance funds of US$2,443,500 (net of
costs) from L1 as a prepayment for US$2,777,778 worth of PYX shares. The
Company has issued to the Investor 1,700,000 shares ("the Additional Initial
Shares") and 2,323,645 unlisted options with an exercise price of GBP 0.45
which will expire three years from the applicable funding date.
The following variations to their agreement have since been made by the
Company and the Investor:
• The Company will issue 1,700,000 shares to the Investor at
the time of the funding of the Advance Payment of US$2.5m (the Additional
Shares).
• The Investor may elect to subscribe for the Placement
Shares at 95% of the average of 3 daily VWAPs over the 15 trading days (on the
applicable exchange) prior to the Share Issuance Date or 130% of the average
of 5 daily VWAPs over the 5 trading days immediately prior to the relevant
date of the Advance Payment.
• The Investor will not sell more than 40% of the monthly
trading volume in any month, provided that during the term the Investor may
not sell more than 30% of the aggregate trading volume during the term.
• The term of the investment has been increased from 24 to 30
months.
The unconverted amounts of the prepayment and additional advance payment are
reported net of the fair value of initial shares, additional initial shares
and placement shares subscribed as at the reporting date.
NOTE 18: TAX
2023 2022
US$ US$
CURRENT
Income tax recoverable 847,485 661,130
NOTE 19: AMOUNT DUE TO SHAREHOLDER
2023 2022
US$ US$
Cash deposit from an investor 5,100,000 -
Fees payable to share-provider 176,000 -
5,276,000 -
NOTE 20: ISSUED CAPITAL
2023 2022
US$ US$
458,817,161 (2022: 441,349,100) fully paid ordinary shares 105,592,118 102,226,925
2023 2022
Contributed Contributed
No. of shares equity No. of Shares equity
No. US$ No. US$
a. Ordinary Shares
At the beginning of the reporting period 441,349,100 102,226,925 429,520,222 96,651,080
Movement:
Year 2022 - - 11,828,878 5,575,845
5 January 2023 2,436,438 850,000 - -
23 February 2023 2,976,191 500,000 - -
30 March 2023 2,732,241 500,000 - -
16 June 2023 3,482,172 700,000 - -
25 August 2023 2,072,110 500,000 - -
5 December 2023 1,982,397 350,000 - -
Share issue costs 1,786,512 (34,807) - -
At the end of the reporting period 458,817,161 105,592,118 441,349,100 102,226,925
On 5 January 2023, 2,436,438 shares valued at US$850,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 23 February 2023, 2,976,191 shares valued at US$500,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 30 March 2023, 2,732,241 shares valued at US$500,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 16 June 2023, 3,482,172 shares valued at US$700,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 25 August 2023, 2,072,110 shares valued at US$500,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
On 5 December 2023, 1,982,397 shares valued at US$350,000 were issued to L1
Capital Global Opportunities Master Fund ("L1").
These shares were issued in connection with the funds of US$4,383,822 received
from L1 as a prepayment for US$5 million worth of PYX shares.
At the shareholders' meetings each ordinary share is entitled to one vote when
a poll is called; otherwise, each shareholder has one vote on a show of hands.
b. Unlisted Options
2023 2022
No. No.
At the beginning of the reporting period 4,944,576 537,500
Granted during the period - 4,407,076
Expired during the period (537,500) -
At the end of the reporting period 4,407,076 4,944,576
On 2 February 2023, 537,500 unlisted options with exercise price of AU$1 held
by Tamarind Classic resources Limited were expired.
c. Unlisted Warrants
2023 2022
No. No.
At the beginning of the reporting period Granted during the period 3,000,000 - 3,000,000
-
At the end of the reporting period 3,000,000 3,000,000
d. Capital Management
Management controls the capital of the Group in order to maintain a
sustainable debt to equity ratio, generate long-term shareholder value and
ensure that the Group can fund its operations and continue as a going concern.
The Group's debt and capital include ordinary share capital, redeemable
preference shares, convertible preference shares and financial liabilities,
supported by financial assets.
The Group is not subject to any externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the Group's
financial risks and adjusting its capital structure in response to changes in
these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control
the capital of the Group since the prior year.
Note 2023 2022
US$ US$
Total borrowings - 7,828,906 - 7,221,085
Less cash and cash equivalents 10
Net cash/(debt) 7,828,906 7,221,085
Total equity 84,123,089 83,554,447
Total capital 84,123,089 83,554,447
Gearing ratio 0.0% 0.0%
NOTE 21: CASH FLOW INFORMATION
2023 2022
US$ US$
a. Reconciliation of Cash Flows from Operating Activities with Loss
after Income Tax
Loss after income tax (10,456,356) (9,433,600)
Non-cash flows in (loss):
- depreciation 360,999 242,502
- share-based payments 7,616,663 5,566,871
- exchange differences 90,031 (286,642)
- Fair value change of financial instrument 1,685,242 2,297,990
Changes in assets and liabilities:
- (increase) in trade and other receivables (161,130) (434,478)
- decrease/(increase) in advances to suppliers 187,284 (282,568)
- (increase) in inventories (1,602,810) (175,060)
- decrease/(increase) in prepayments and deposits 44,112 (33,974)
- (increase) in deferred tax assets (3,205) (51,610)
- increase/(decrease) in trade and other payables 505,024 (886,213)
- (decrease) in current tax liabilities (186,355) (450,617)
Net cash (used in) operating activities (1,920,501) (3,927,399)
b. Changes in Liabilities arising from Financing Activities
Non-cash changes
1 January Cash flows Acquisition Re-classification 31 December
2023 2023
US$ US$ US$ US$ US$
Short term borrowings - -
- -
-
Lease liabilities - -
- -
-
Total - - -
-
-
c. Non-Cash Financing and Investing Activities
(i) Share issue:
Refer to note 19 for details of non-cash financing activities arising from
shares issued.
NOTE 22: RELATED PARTY TRANSACTIONS
Phoenician Management Services Limited, a related party of Mr. Hasler,
provided management support, general administration and IT services to PT
Investasi Mandiri. For the year ended 31 December 2023, Phoenician Management
Services Limited was paid $1,263,694 (2022: $1,292,188) and expenses
recognised during the year totaled
$1,369,702 (2022: $1,287,784).
NOTE 23: FINANCIAL RISK MANAGEMENT
The Group's financial instruments consist mainly of deposits with banks,
accounts receivable and payable, loan and leases.
The totals for each category of financial instruments, measured in accordance
with AASB 9: Financial Instruments as detailed in the accounting policies to
these financial statements, are as follows:
Note 2023 2023
US$ US$
Financial assets
Financial assets at amortised cost
- cash and cash equivalents 10 7,828,906 7,221,085
- trade and other receivables 11 1,557,570 1,396,300
Total financial assets 9,386,476 8,617,385
Financial liabilities
Financial liabilities at amortised cost
- trade and other payables 17 1,370,005 1,505,996
Financial liabilities at fair value
- other liabilities 2,331,568 4,064,122
Total financial liabilities 3,701,573 5,570,118
Financial Risk Management Policies
The Finance and Operations Committee (FOC) has been delegated responsibility
by the Board of Directors for, among other issues, managing financial risk
exposures of the Group. The FOC monitors the Group's financial risk management
policies and exposures and approves financial transactions within the scope of
its authority. It also reviews the effectiveness of internal controls relating
to commodity price risk, counterparty credit risk, foreign currency risk,
liquidity risk, and interest rate risk.
The FOC meets on a bi-monthly basis and minutes of the FOC are reviewed by the
Board.
The FOC's overall risk management strategy seeks to assist the Consolidated
Group in meeting its financial targets, while minimising potential adverse
effects on financial performance. Its functions include the review of the use
of hedging derivative instruments, credit risk policies and future cash flow
requirements.
The main risks the Group is exposed to through its financial instruments are
credit risk, liquidity risk, and market risk consisting of interest rate risk,
foreign currency risk and other price risk (commodity and equity price risk).
There have been no substantive changes in the types of risks the Group is
exposed to, how these risks arise, or the Board's objectives, policies and
processes for managing or measuring the risks from the previous period.
a. Credit risk
Exposure to credit risk relating to financial assets arises from the potential
non-performance by counterparties of contract obligations that could lead to a
financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such as the
utilisation of systems for the approval, granting and renewal of credit
limits, regular monitoring of exposures against such limits and monitoring of
the financial stability of significant customers and counterparties), ensuring
to the extent possible that customers and counterparties to transactions are
of sound credit worthiness. Such monitoring is used in assessing receivables
for impairment.
Depending on the division within the Group, credit terms are generally 14 to
30 days from the invoice date.
Trade and other receivables that are neither past due nor impaired are
considered to be of high credit quality. Aggregates of such amounts are
detailed in Note 10.
b. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter
difficulty in settling its debts or otherwise meeting its obligations related
to financial liabilities. The Group manages this risk through the following
mechanisms:
- preparing forward-looking cash flow analyses in relation to
its operating, investing and financing activities;
- obtaining funding from a Parent Group;
- maintaining a reputable credit profile;
- managing credit risk related to financial assets; and
- comparing the maturity profile of financial liabilities with
the realisation profile of financial assets.
c. Other price risk
Other price risk relates to the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in market prices
for zircon largely due to demand and supply factors (other than those arising
from interest rate risk or foreign currency risk) for sand minerals.
The Group is exposed to commodity price risk through the operations of its
zircon Product Contracts for the sale and physical delivery of zircons are
executed whenever possible on a pricing basis intended to achieve a relevant
index target. Where pricing terms deviate from the index, derivative commodity
contracts may be used when available to return realised prices to the index.
Contracts for the physical delivery of zircon are generally not financial
instruments and are carried in the statement of financial position at cost
(typically at nil). There were no hedges in place at the end of the reporting
period.
d. Foreign currency risk
Exposure to foreign currency risk may result in the fair value or future cash
flows of a financial instrument fluctuating due to movement in foreign
exchange rates of currencies in which the Group holds financial instruments
which are other than the USD functional and presentation currency of the
Group.
With instruments being held by overseas operations, fluctuations in the IDR
and AUD may impact on the Group's financial results unless those exposures are
appropriately hedged.
Financial Liability and Financial Asset Maturity Analysis
The following table reflects an undiscounted contractual maturity analysis for
financial assets and financial liabilities.
Cash flows realised from financial assets reflect management's expectation as
to the timing of realisation. Actual timing may therefore differ from that
disclosed. The timing of cash flows presented in the table to settle financial
liabilities reflects the earliest contractual settlement dates and does not
reflect management's expectations that banking facilities will be rolled
forward.
Within 1 Year 1 to 5 Years Total
2023 2022 2023 2022 2023 2022
US$ US$ US$ US$ US$ US$
Financial liabilities due for payment
Trade and other payables 1,370,005 1,505,996 - - 1,370,005 1,505,996
Total expected outflows 1,370,005 1,505,996 - - 1,370,005 1,505,996
Financial assets - cash flows realizable
Cash and cash equivalents 7,828,906 7,221,085 - - 7,828,906 7,221,085
Trade and other receivables 1,557,570 1,396,300 - - 1,557,570 1,396,300
Total anticipated inflows 9,386,476 8,617,385 - - 9,386,47 8,617,385
Net inflow/(outflow) on financial instruments 8,016,471 7,111,389 - - 8,016,471 7,111,389
The following table shows foreign currency risk on the financial assets and
liabilities of the Group's operations denominated in currencies other than the
functional currency of the Group's operations. The foreign currency risk in
the books of the Parent Entity is considered immaterial and is therefore not
shown.
2023
Net Financial Assets/(Liabilities)
in USD
USD GBP AUD Total USD
Functional currency of entity:
US dollar - (86,535) 1,994,028 1,907,493
Indonesian Rupiah 720,571 - - 720,571
Statement of financial position exposure 720,571 (86,535) 1,994,028 2,628,064
2022
Net Financial Assets/(Liabilities)
in USD
USD GBP AUD Total USD
Functional currency of entity:
US Dollar - (3,213,877) 3,541,491 327,614
Indonesian Rupiah 1,595,683 - - 1,595,683
Statement of financial position exposure 1,595,683 (3,213,877) 3,541,491 1,923,297
Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in
the following table and can be compared to their carrying amounts as presented
in the statement of financial position.
Differences between fair values and carrying amounts of financial instruments
with fixed interest rates are due to the change in discount rates being
applied by the market since their initial recognition by the Group.
2023 Fair Value US$ 2022 Fair Value US$
Carrying Amount Carrying Amount
Note US$ US$
Financial assets
Financial assets at amortised cost:
Cash and cash equivalents(i) 10 7,828,906 7,828,906 7,221,085 7,221,085
Trade and other receivables(i) 11 1,557,570 1,557,570 1,396,300 1,396,300
Total financial assets 9,386,476 9,386,476 8,617,385 8,617,385
Financial liabilities
Financial liabilities at amortised costs
Trade and other payables(i) 1,370,005 1,370,005 1,505,996 1,505,996
Lease liabilities(i) - - - -
Financial liabilities at fair value
Other liabilities(i) 17 2,331,568 2,331,568 4,064,122 4,064,122
Total financial liabilities 3,701,573 3,701,573 5,570,118 5,570,118
(i) The carrying amounts of cash and cash equivalents, trade and
other receivables, trade and other payables and lease liabilities are
equivalent to their fair values.
NOTE 24: RESERVES
a. Share-Based Payment Reserve
The share-based payment reserve records items recognised as expenses on
valuation of share-based payments.
b. Options Reserve
The options reserve records costs associated with the option issue.
c. Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising
on translation of the foreign controlled subsidiaries.
NOTE 25: CAPITAL COMMITMENTS
The Company had no capital commitments at the balance sheet date.
NOTE 26: EVENTS AFTER THE REPORTING PERIOD
On 5 January 2024, the Company advised that a change introduced in December
2023 by the Indonesian Industrial and Trade Department for Export Tax Billing,
requires the exporter to use two types of Port, Loading Port and Export Port.
The licence, which the government originally issued to the Company only stated
the loading port in Banjarmasin. A request to modify the licence has been made
to the Trade Department.
On 17 January 2024 the Company announced a change of auditor to Pitcher
Partners BA&A Pty Ltd commencing the financial year ended 31 December
2023.
No other significant events are noted by management since the end of the
reporting period.
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