REVIEW OF
OPERATIONS
PROJECT
REVIEW
Geomet s.r.o. controls the mineral
exploration licenses awarded by the Czech State over the Cinovec
Lithium Project. Geomet has been granted a preliminary mining
permit by the Ministry of Environment and the Ministry of Industry.
The Company is owned 49% by EMH and 51% by CEZ a.s. through its
wholly owned subsidiary, SDAS. Cinovec hosts a globally significant
hard rock lithium deposit with a total Measured Mineral Resource of
53.3Mt at 0.48% Li2O, Indicated Mineral Resource of
360.2Mt at 0.44% Li2O and an Inferred Mineral Resource
of 294.7Mt at 0.39% Li2O containing a combined 7.39
million tonnes Lithium Carbonate Equivalent (refer to the Company's ASX/ AIM release dated
13 October 2021)
(Resource Upgrade at
Cinovec Lithium Project).
An initial Probable Ore Reserve of
34.5Mt at 0.65% Li2O reported 4 July 2017
(Cinovec Maiden Ore
Reserve - Further Information)
has been declared to cover the first 20 years
mining at an output of 22,500tpa of lithium carbonate
(refer to the Company's
ASX/ AIM release dated 11 July
2018) (Cinovec
Production Modelled to Increase to 22,500tpa of Lithium
Carbonate).
This makes Cinovec the largest
hard rock lithium deposit in Europe and the fifth largest non-brine
deposit in the world.
Parts of the ore body near surface
have been mined for tin from the 14th Century to the 20th Century
and the lithium-bearing orebody below surface previously had over
400,000 tonnes of ore mined as a trial sub-level open stope mining
operation for tin mineralisation in the 1980's.
On 19 January 2022, EMH provided
an update to the 2019 Pre-Feasibility-Study ("PFS") Update. It
confirmed the deposit is amenable to bulk underground mining (refer
to the Company's ASX/ AIM release dated 19 January 2022)
(PFS Update delivers outstanding results).
Metallurgical test-work has produced both
battery-grade lithium hydroxide and battery-grade lithium carbonate
at excellent recoveries. In February 2023 DRA Global Limited
("DRA") was appointed to complete the Definitive Feasibility Study
("DFS").
Cinovec is centrally located for
European end-users and is well serviced by infrastructure, with a
sealed road adjacent to the deposit, rail lines located 5 km north
and 8 km south of the deposit, and an active 22 kV transmission
line running to the historic mine. The deposit lies in an active
mining region.
The economic viability of Cinovec
has been enhanced by the recent push for supply security of
critical raw materials for battery production, including the strong
increase in demand for lithium globally, and within Europe
specifically, as demonstrated by the European Union's Critical Raw Materials Act
("CRMA").
EBRD STRATEGIC INVESTMENT
Early in the year, the Company
successfully completed a capital raising of approximately
€6 million by European Bank for Reconstruction and Development
("EBRD") as a strategic investment in the Company and the
development of the Cinovec Project (refer to the Company's ASX
release dated 21 July 2023) (EBRD Strategic Investment in
EMH). As part of the due
diligence process, EBRD engaged an independent, international
mining consultancy to undertake a technical review of the Cinovec
Project. EBRD also performed a review of the Cinovec Project in
respect to compliance with EBRD's Environmental and Social
Policy. The Company considers its relationship with EBRD to
be highly strategic as the European Union charts a path towards
greater lithium supply security and sustainability. Support
for the Company's lithium project aligns with these EU
goals.
The EBRD is an international
financial institution established in 1991 to foster the economic
transition process and to promote private and entrepreneurial
initiatives in its countries of operation including Central and
Eastern Europe, former Soviet Union and Eastern Mediterranean,
through provision of loans, equity investments, conducting policy
dialogue and providing technical cooperation. It has since
played a transformative role and gained unique expertise in
fostering change in the region and beyond, investing €170 billion
in more than 6,400 projects including nearly EUR 3bn in some 70
mining projects across 15 countries. EBRD works very closely
with the European Investment Bank ("EIB") and the organisations
have made joint public statements to assist in the funding of the
energy transition in Europe.
As part of the investment in
European Metals, EBRD will be offered the right to maintain its
percentage ownership in the Company and we believe that the EBRD
will play an important part, both directly and indirectly in the
future financing of European Metals and Geomet.
SUCCESSFUL BATTERY GRADE LITHIUM CARBONATE PILOT
PROGRAMME
The Company has continued to
enhance the project via improvements to recoveries and quality of
the potential end product. On 9 November 2023, the Company
announced the results of the Lithium Chemical Plant ("LCP") pilot
programme, confirming the robustness of the LCP process flow sheet
(refer to the Company's ASX/ AIM release dated 9 November 2023)
(Successful Battery-Grade pilot programme for Cinovec
Project).
The pilot programme, conducted at
ALS Laboratories in Perth, confirmed the industrial viability of
the LCP process flowsheet, producing exceptionally clean battery
grade lithium carbonate (>99.9%) with single-stage purification
(bicarbonation) of crude lithium carbonate. The programme processed
ore that was fully-representative in all respects of the
run-of-mine for the first seven years of planned mining, including
average grade and expected rock-type mix from the bulk
mining.
A complete assay table for the
piloted battery-grade lithium carbonate comparing the Cinovec
product with the global standard YS/T 582-2013 and including assay
results for the nine elements commonly controlled for cathode
manufacturers which sits outside YS/T 582-2013, is presented in the
Company's ASX/AIM release dated 9 November 2023
(Successful Battery-Grade pilot programme for Cinovec
Project).
SUCCESSFUL BATTERY GRADE LITHIUM HYDROXIDE ALSO PRODUCED FROM
PILOT PROGRAMME
The Company announced the
successful production of lithium hydroxide monohydrate from
pregnant leach solution manufactured during the larger-scale
Cinovec pilot programme referred to above. The pilot
programme confirmed the viability of the LCP process flowsheet for
the industrial-scale production of either lithium carbonate or
lithium hydroxide. Crude lithium carbonate from the pilot programme
was converted into exceptionally clean battery-grade lithium
hydroxide monohydrate at laboratory scale.
The pilot programme processed ore
that is fully-representative in all respects of the run-of-mine for
the first seven years of mining planned at Cinovec, including
average grade and expected rock-type mix from the bulk mining. The
Company is particularly pleased with the quality of product. The
lithium hydroxide produced was of the highest grade possible and
exceptionally clean. This, when combined with the ability to
produce either battery-grade lithium carbonate or hydroxide,
enables a wider range of off-takers to be engaged with for the
Cinovec product.
A complete assay table for the
battery-grade lithium hydroxide monohydrate comparing the Cinovec
product with the global standard GB/T 26008-2020 is presented in
the Company's ASX/AIM release dated 11
April 2024 (Successful Production of Lithium
Hydroxide).
extension granted to all exploration
licenses
On 29 January 2024, the Company
announced the granting of an extension to all four Cinovec
Exploration Licences ("the licences"). These licenses fully cover
all three granted Preliminary Mining Permits ("PMP's") comprising
the Cinovec Project. All four licences have been extended until 31
December 2026. The granting of this extension follows a
comprehensive evaluation by the relevant state authorities of
results achieved to date in exploring and developing the deposit.
Plans for future exploration work, including further resource
drilling, and compliance with conditions set by the Czech Ministry
of Environment were also assessed. The extension was required as
the granted PMP's, whilst conveying the sole and exclusive rights
to apply for a Final Mining Permit, do not allow for further
drilling until the final mining area is granted. As the Company
plans to conduct further metallurgical and measured resource
drilling, an extension to the exploration licenses due to expire in
December 2023 was sought.
The licences extension applies to
the Exploration Areas Cinovec, Cinovec II, Cinovec III and Cinovec
IV, which fully cover the East, South and North West PMP's (refer
to the Company's ASX/ AIM release dated 29 January 2024)
(Extension Granted to All Cinovec Exploration
Licenses).
new plant site EXPECTED TO IMPROVE PERMITTING AND PROJECT
ECONOMICS
On 26 April 2024, the Company
announced the decision to move the proposed site of the lithium
processing plant from Dukla to Prunéřov. The new site was selected
for a number of reasons, including the expectation of speeding up
the permitting process and expediting the Cinovec Project. The
Prunéřov site is anticipated to also enable positive outcomes for
project economics including reductions in capex and opex per tonne
as a result of optimalization of the engineering identified as part
of the Definitive Feasibility Study DFS process, and reduced
demolition and clearance requirements (refer to the Company's ASX/
AIM release dated 26 April 2024) (New Plant Site to Improve
Project Permitting and Economics).
The new site has received
preliminary agreement and support from the municipal and regional
governments. Prunéřov is the site of the former Prunéřov 1 Power
Station, which was decommissioned in 2020 and Prunéřov 2 Power
Station. The site is owned and operated by CEZ, the Company's
project level partner. The site, currently zoned for industrial
use, is considerably larger in size than the Dukla site and should
enable the processing plant to be laid out in a more effective (and
anticipated less costly) manner, enabling better and faster
constructability, improved operability and greater ease of
maintenance. The ore from the underground mining operation at
Cinovec will be carried by conveyor to Dukla where it will be
loaded onto trains for transport to Prunéřov, a distance of
approximately 59 km using existing rail facilities, the capacity of
which has been confirmed. During the DFS process, it became
apparent that after considerable consultation with local
stakeholders and the municipal and regional governments the Dukla
site possessed limited capacity and also limited support from the
surrounding municipalities, for the extent of processing operations
proposed. The Prunéřov industrial site is located alongside the
750MW Prunéřov 2 Coal fired power plant and is situated further
away from inhabited areas.
Regional Project Map
REDOMICILIATION
The Company advised the market
that it has been registered as an Australian Company effective 7
May 2024 and lodged a notice of intention to discontinue with the
British Virgin Islands registry ("BVI Registry") (refer to the
Company's ASX/ AIM release dated 7 May 2024) (Redomiciliation
Update). The Company advised its
intention to redomicile in the announcement to the market on 1
December 2023, and the proposed redomiciliation was approved by the
Company's Shareholders on 22 December 2023. European Metals is now
domiciled in Australia and is a Company governed under the
Corporations Act 2001 (Cth) ("Australian Continuance").
The Board believes that the
Australian Continuance should lead to substantial cost savings and
improvements in the Company's administration and efficiency of
operations. Additionally, it will remove a potential impediment to
obtaining European development financial assistance for the Cinovec
project. The redomiciliation represented a re-admission to AIM,
which was completed shortly after the redomiciliation.
POST PERIOD UPDATE
On 31 July 2024, and post the
reporting period, the Company provided a further project update
(refer to the Company's ASX/ AIM release dated 31 July 2024)
(Cinovec
Lithium Project Update). The
Company advised that the timeline for the completion of the DFS and
therefore construction of the Cinovec lithium processing plant
continue to be worked on. Given the change to the location of the
lithium processing plant from Dukla to Prunéřov, additional
geotechnical work is currently underway to confirm the optimal
construction method and layout at the new site. Results from this
geotechnical work are expected to be available at the end of
September. DRA is then expected to provide a detailed timeline and
begin the DFS finalisation program of work.
The Project team continues to
progress several DFS-related programs on the Front-End Comminution
and Beneficiation circuit ("FECAB") and LCP to improve the overall
flowsheet which are expected to positively impact Project
economics.
CORPORATE
The Company announced the
appointment of Merrill Gray as a Non-executive Director of the
Company on 18 April 2024. Merrill is a highly experienced executive
and non-executive of ASX and private companies. Her appointment
brings over 30 years of metallurgical and mining engineering as
well as geology experience., including large-scale new technology
project development and production management skills. Merrill
currently works as a global critical minerals and renewable energy
(including hydrogen derivatives) corporate advisor, having
previously been MD and CEO of Syngas Ltd (Founder), Hexagon Energy
Materials Limited (ASX: HXG) and Co-MD of lithium-ion battery
recycling Company, Primobius GmbH. She has significant
international experience, including within the European Union and
specifically with German automotive OEM's. Merrill brings
experience and networks across the lithium-ion battery supply
chain. Merrill holds Bachelor of Engineering and Bachelor of
Science degrees, as well as an MBA, and is a fellow of The
Australasian Institute of Mining and Metallurgy and the Australian
Institute of Engineering (refer to the Company's ASX/ AIM release
dated 18 April 2024) (Appointment of
Director).
The Company announced the
appointment of Henko Vos as Company Secretary on 2 February 2024,
following the retirement of Ms Shannon Robinson. Mr Vos is a member
of the Australian Institute of Company Directors, the Governance
Institute of Australia and Chartered Accountants Australia &
New Zealand. He holds similar director and secretarial roles in
various other listed public companies in both industrial and
resource sectors (refer to the Company's ASX/ AIM release dated 2
February 2024) (Company Secretary
Appointment/Resignation).
RISKS AND UNCERTAINTIES
The Group's activities have
inherent risk, and the Board is unable to provide certainty of the
expected results of activities, or that any or all of the likely
activities will be achieved. The material business risks faced by
the Group that could influence the Group's future prospects, and
how the Group manages these risks, are provided below.
Operational risk
The Company may be affected by
various operational factors. In the event that any of these
potential risks eventuate, the Company's operational and financial
performance may be adversely affected. No assurances can be given
that the Company will achieve commercial viability through
successful exploration outcomes on its tenement holdings. Until the
Company is able to realise value from its projects, it is likely to
incur ongoing operating losses.
The operations of the Company may
be affected by various factors, including failure to achieve
predicted grades during mining, operational and technical
difficulties encountered during mining, lack of infrastructure in
the Company's areas of operation, unanticipated metallurgical
problems which may affect value of defined resources, increases in
the costs of consumables, spare parts, plant and
equipment.
Mineral Resource estimates are
made in accordance with the 2012 edition of the JORC Code. Mineral
resources are estimates only. An estimate is an expression of
judgement based on knowledge, experience and industry practice.
Estimates may alter significantly when new information or
techniques become available. Resource estimates can be imprecise
and depend on interpretations, which may prove to be
inaccurate.
The Company's interests in mining
tenements are at various stages of exploration and potential
production and potential investors should understand that mineral
exploration and production is a speculative and high-risk
undertaking that may be impeded by circumstances and factors beyond
the control of the Company. The Company has interests in mining
tenements in the Czech Republic which operate under different
regulatory conditions which may impact on time taken to evaluate
projects and may affect the viability of resources.
There can no assurance that the
tenements, or any other exploration properties that may be acquired
in the future, will result in the exploitation of an economic
mineral resource. Even though an apparently viable deposit has been
identified, there is no guarantee that it can be economically
exploited.
The Company will need to apply for
a mining lease to undertake development and mining on the relevant
tenement. There is no guarantee that the Company will be granted a
mining lease and if it is granted, it will be subject to conditions
which may impact on the financial viability of the
project.
Renewals
Mining and exploration tenements
are subject to periodic renewal. The renewal of the term of granted
tenements is subject to compliance with the applicable mining
legislation and regulations and the discretion of the relevant
mining authority. Renewal conditions may include increased
expenditure and work commitments or compulsory relinquishment of
areas of the tenements. The imposition of new conditions or the
inability to meet those conditions may adversely affect the
operations, financial position and/or performance of the Company.
The Company considers the likelihood of tenure forfeiture to be low
given the laws and regulations governing exploration in the Czech
Republic and the ongoing expenditure budgeted for by the Company.
However, the consequence of forfeiture or involuntary surrender of
a granted tenement for reasons beyond the control of the Company
could be significant.
Title
Notwithstanding that the
exploration licenses the subject of the Cinovec Project has been
granted, if the application for the licenses did not strictly
comply with the application requirements (such as were required
reports were not lodged or were lodged late), there is a risk that
the tenements could be deemed invalid.
Global conditions
General economic conditions,
movements in interest and inflation rates and currency exchange
rates may have an adverse effect on the Company's potential
development activities, as well as on its ability to fund those
activities. General economic conditions, laws relating to taxation,
new legislation, trade barriers, interest and inflation rates,
currency exchange controls, national and international political
circumstances (including outbreaks in international hostilities,
wars, terrorist acts, sabotage, subversive activities, security
operations, labour unrest, civil disorder, and states of
emergency), natural disasters (including fires, earthquakes and
floods), and quarantine restrictions, epidemics and pandemics, may
have an adverse effect on the Company's operations and financial
performance, including the Company's exploration and development
activities, as well as on its ability to fund those
activities.
Regulatory compliance
Regulatory risks of the Company's
operating activities are subject to extensive laws and regulations
relating to numerous matters including resource licence consent,
environmental compliance and rehabilitation, taxation, employee
relations, health and worker safety, waste disposal, protection of
the environment, protection of endangered and protected species and
other matters. The Company requires permits from regulatory
authorities to authorise the Company's operations. These permits
relate to exploration, development, production and rehabilitation
activities. While the Company believes that it will operate in
substantial compliance with all material current laws and
regulations, agreements or changes in their enforcement or
regulatory interpretation could result in changes in legal
requirements or in the terms of existing permits and agreements
applicable to the Company or its properties, which could have a
material adverse impact on the Company's current operations or
planned activities. Obtaining necessary permits can be a
time-consuming process and there is a risk that Company will not
obtain these permits on acceptable terms, in a timely manner or at
all. The costs and delays associated with obtaining necessary
permits and complying with these permits and applicable laws and
regulations could materially delay or restrict the Company from
proceeding with the development of a project or the operation or
development of a mine. Any failure to comply with applicable laws
and regulations or permits, even if inadvertent, could result in
material fines, penalties or other liabilities. In extreme cases,
failure could result in suspension of the Company's activities or
forfeiture of one or more of the tenements, the subject of the
Projects.
Climate
There are a number of
climate-related factors that may affect the operations and proposed
activities of the Company. The climate change risks particularly
attributable to the Company include: (a) the emergence of new or
expanded regulations associated with the transitioning to a
lower-carbon economy and market changes related to climate change
mitigation. The Company may be impacted by changes to local or
international compliance regulations related to climate change
mitigation efforts, or by specific taxation or penalties for carbon
emissions or environmental damage. These examples sit amongst an
array of possible restraints on industry that may further impact
the Company and its business viability. While the Company will
endeavour to manage these risks and limit any consequential
impacts, there can be no guarantee that the Company will not be
impacted by these occurrences; and (b) climate change may cause
certain physical and environmental risks that cannot be predicted
by the Company, including events such as increased severity of
weather patterns and incidence of extreme weather events and
longer-term physical risks such as shifting climate patterns. All
these risks associated with climate change may significantly change
the industry in which the Company operates.
General risks
Future funding requirements and
the ability to access debt and equity markets. The funds raised by
the Company are considered sufficient to meet the evaluation and
development objectives of the Company. Additional funding may be
required in the event development costs exceed the Company's
estimates and to effectively implement its business and operations
plans in the future, to take advantage of opportunities for
acquisitions, joint ventures or other business opportunities, and
to meet any unanticipated liabilities or expenses which the Company
may incur, additional financing will be required. In addition,
should the Company consider that its development results justify
commencement of production on any of its projects, additional
funding will be required to implement the Company's development
plans, the quantum of which, remain unknown at the date of the
Annual report. The Company may seek to raise further funds through
equity or debt financing, joint ventures, production sharing
arrangements or other means. Failure to obtain sufficient financing
for the Company's activities and future projects may result in
delay and indefinite postponement of development or production on
the Company's properties or even loss of a property interest. There
can be no assurance that additional finance will be available when
needed or, if available, the terms of the financing might not be
favourable to the Company and might involve substantial dilution to
shareholders.
Reliance on key personnel
The responsibility of overseeing
the day-to-day operations and the strategic management of the
Company depends substantially on its senior management and its key
personnel. There can be no assurance given that there will be no
detrimental impact on the Company if one or more of these employees
cease their employment. The Company may not be able to replace its
senior management or key personnel with persons of equivalent
expertise and experience within a reasonable period of time or at
all and the Company may incur additional expenses to recruit, train
and retain personnel. Loss of such personnel may also have an
adverse effect on the performance of the Company.
Competition
The industry in which the Company
will be involved is subject to domestic and global competition.
Although the Company will undertake all reasonable due diligence in
its business decisions and operations, the Company will have no
influence or control over the activities or actions of its
competitors, which activities or actions may, positively or
negatively, affect the operating and financial performance of the
Company's projects and business.
Market conditions
Share market conditions may affect
the value of the Company's shares regardless of the Company's
operating performance. Share market conditions are affected by many
factors such as:
(a) general economic outlook;
(b) introduction of tax reform or other new
legislation;
(c) interest rates and inflation rates;
(d) global health epidemics or pandemics;
(e) currency fluctuations;
(f)
changes in investor sentiment toward particular
market sectors;
(g) the demand for, and supply of, capital;
(h)
political tensions; and
(i)
terrorism or other hostilities.
The market price of shares can
fall as well as rise and may be subject to varied and unpredictable
influences on the market for equities in general and resource
exploration stocks in particular. Neither the Company nor the
Directors warrant the future performance of the Company or any
return on an investment in the Company. Potential investors should
be aware that there are risks associated with any securities
investment. Securities listed on the stock market, and in
particular securities of exploration companies experience extreme
price and volume fluctuations that have often been unrelated to the
operating performance of such companies. These factors may
materially affect the market price of the shares regardless of the
Company's performance. In addition, after the end of the relevant
escrow periods affecting shares in the Company, a significant sale
of then tradeable shares (or the market perception that such a sale
might occur) could have an adverse effect on the Company's share
price.
Commodity price volatility and exchange
rate
If the Company achieves success
leading to mineral production, the revenue it will derive through
the sale of product exposes the potential income of the Company to
commodity price and exchange rate risks. Commodity prices fluctuate
and are affected by many factors beyond the control of the Company.
Such factors include supply and demand fluctuations for precious
and base metals, technological advancements, forward selling
activities and other macro-economic factors. Furthermore,
international prices of various commodities are denominated in
United States dollars, whereas the income and expenditure of the
Company will be taken into account in Australian currency, exposing
the Company to the fluctuations and volatility of the rate of
exchange between the United States dollar and the Australian dollar
as determined in international markets.
Government policy changes
Adverse changes in government
policies or legislation may affect ownership of mineral interests,
taxation, royalties, land access, labour relations, and mining and
exploration activities of the Company. It is possible that the
current system of exploration and mine permitting in the Czech
Republic may change, resulting in impairment of rights and possibly
expropriation of the Company's properties without adequate
compensation.
Dilution
In the future, the Company may
elect to issue shares or engage in capital raisings to fund
construction of the Project and growth, for investments or
acquisitions that the Company may decide to undertake, to repay
debt or for any other reason the Board may determine at the
relevant time. While the Company will be subject to the constraints
of the ASX Listing Rules regarding the percentage of its capital
that it is able to issue within a 12-month period (other than where
exceptions apply), shareholder interests may be diluted as a result
of such issues of shares or other securities.
Taxation
The acquisition and disposal of
shares will have tax consequences, which will differ depending on
the individual financial affairs of each investor. All potential
investors in the Company are urged to obtain independent financial
advice about the consequences of acquiring shares from a taxation
viewpoint and generally. To the maximum extent permitted by law,
the Company, its officers and each of their respective advisers
accept no liability and responsibility with respect to the taxation
consequences of subscribing for shares under any
prospectus.
Litigation
The Company is exposed to possible
litigation risks including, tenure disputes, environmental claims,
occupational health and safety claims and employee claims. Further,
the Company may be involved in disputes with other parties in the
future which may result in litigation. Any such claim or dispute if
proven, may impact adversely on the Company's operations,
reputation, financial performance and financial position. The
Company is not currently engaged in any litigation.
Environmental regulation
The operations and proposed
activities of the Company are subject to Czech laws and regulations
concerning the environment. As with most exploration projects and
mining operations, the Company's activities are expected to have an impact on the
environment, particularly if advanced exploration or mine
development proceeds. It is the Company's intention to conduct its
activities to the highest standard of environmental obligation,
including compliance with all environmental laws.
Mining operations have inherent
risks and liabilities associated with safety and damage to the
environment and the disposal of waste products occurring as a
result of mineral exploration and production. The occurrence of any
such safety or environmental incident could delay production or
increase production costs. Events, such as unpredictable rainfall
or bushfires may impact on the Company's ongoing compliance with
environmental legislation, regulations, and licences. Significant
liabilities could be imposed on the Company for damages, clean-up
costs or penalties in the event of certain discharges into the
environment, environmental damage caused by previous operations or
non-compliance with environmental laws or regulations.
The disposal of mining and process
waste and mine water discharge are under constant legislative
scrutiny and regulation. There is a risk that environmental laws
and regulations become more onerous making the Company's operations
more expensive.
Approvals are required for land
clearing and for ground disturbing activities. Delays in obtaining
such approvals can result in the delay to anticipated exploration
programs or mining activities.
DIRECTORS'
REPORT
Your Directors present their
report, together with the consolidated financial statements of the
Group, being European Metals Holdings Limited ("EMH" or the
"Company") and its controlled entities ("Group"), for the year
ended 30 June 2024.
Directors
The following persons were
Directors of the Company and were in office for the entire year,
and up to the date of this report, unless otherwise
stated:
|
Mr Keith Coughlan
|
Executive Chairman
Previously Managing
Director
|
|
|
Mr Richard Pavlik
|
Executive Director
|
|
|
Mr Kiran Morzaria
|
Non-Executive Director
|
|
|
Ambassador Lincoln Bloomfield Jr
|
Non-Executive Director
|
|
|
Ms Merrill Gray
|
Non-Executive Director
|
Appointed 18 April 2024
|
Company Secretary
Ms Shannon
Robinson
Resigned 1 February 2024
Ms Robinson was appointed as
Company Secretary on 20 April 2023 and resigned on 1 February 2024.
Ms Robinson is a Chartered Secretary and corporate advisor with 20
years' experience. Shannon is a former corporate lawyer, a graduate
member of the Australian Institute of Company Directors (AICD) and
a fellow of the Governance Institute of Australia (GIA).
She holds similar secretarial roles in various
other listed public companies.
Mr Henko Vos
Appointed 1 February 2024
Mr Vos was appointed as Company
Secretary on 2 February 2024. Mr Vos is a
graduate member of the Australian Institute of Company Directors
(AICD), Governance Institute of Australia
and Chartered Accountants Australia & New Zealand. He holds
similar secretarial roles in various other listed public companies
in both industrial and resource sectors.
Principal Activities
The Group is primarily involved in
the exploration activities of the Cinovec lithium project in the
Czech Republic.
Review of Operations
The 2024 Financial Year has been
one of significant growth and development for the Group. For
further information refer to the Project Review section of this
report.
Results of Operations
The consolidated loss after tax
for year ended 30 June 2024 was $3,355,576 (2023:
$5,928,441).
Financial Position
The net assets of the Group have
increased by $3,156,940 to $36,483,241 at 30 June 2024 (2023:
$33,326,301).
Significant Changes in the State
of Affairs
There have not been any
significant changes in the state of affairs of the Group during the
financial year other than as disclosed in the Review of Operations
section of this report.
Dividends Paid or
Recommended
No dividends were declared or paid
during the year and the Directors do not recommend the payment of a
dividend for the period.
|
Information on Directors
|
|
|
|
|
|
|
|
Keith Coughlan
|
|
Executive
Chairman - Appointed 30 June 2020
Previously Managing Director (CEO)
- Appointed 6 September 2013 to 30 June 2020
|
|
Qualifications
|
|
BA
|
|
Experience
|
|
Mr Coughlan has had almost 30
years' experience in stockbroking and funds management. He
has been largely involved in the funding and promoting of resource
companies listed on ASX, AIM and TSX. He has advised various
companies on the identification and acquisition of resource
projects and was previously employed by one of Australia's then
largest funds management organizations.
|
|
Interest in shares and
Options
|
|
Mr Coughlan held, at the date of
this report, 850,000 shares direct interest and 4,900,000 shares
indirect interest held by Inswinger Holdings Pty Ltd, an entity of
which Mr Coughlan is a director and a shareholder.
|
|
Performance Rights
|
|
Mr Coughlan held, at the date
of this report, 2,400,000 Performance
Rights indirect interest held by Kadaje Investments Pty Ltd,
an entity of which Mr Coughlan is a director and a shareholder.
|
|
Special
Responsibilities
|
|
Member of Nomination
Committee
Member of Environment, Social and
Governance Committee
|
|
Directorships held in other listed
entities
|
|
Mr Coughlan is Non-Executive
Director of Codrus Minerals Limited (appointed 22 July
2024-current)
Mr Coughlan was previously
Non-Executive Chairman of Doriemus plc (appointed 19 June 2019,
resigned 18 June 2024)
Mr Coughlan was previously a
Non-Executive Director of Calidus Resources Limited (appointed 13
June 2017, resigned 13 May 2022)
|
|
Richard Pavlik
|
|
Executive Director - Appointed 27
June 2017
|
|
Qualifications
|
|
Masters Degree in Mining
Engineer
|
|
Experience
|
|
Mr Pavlik is the Chief Advisor to
the CEO of Geomet s.r.o. and is a highly experienced Czech mining
executive. Mr Pavlik holds a Masters Degree in Mining Engineer from
the Technical University of Ostrava in the Czech Republic. He is
the former Chief Project Manager and Advisor to the Chief Executive
Officer at OKD. OKD has been a major coal producer in the Czech
Republic. He has almost 30 years of relevant industry experience in
the Czech Republic. Mr Pavlik also has experience as a Project
Analyst at Normandy Capital in Sydney as part of a postgraduate
program from Swinburne University. Mr Pavlik has held previous
senior positions within OKD and New World Resources as Chief
Engineer, and as Head of Surveying and Geology. He has also served
as the Head of the Supervisory Board of NWR Karbonia, a Polish
subsidiary of New World Resources (UK) Limited. He has an intimate
knowledge of mining in the Czech Republic.
|
|
Interest in shares and
Options
|
|
Mr Pavlik held, at the date of
this report, 300,000 shares direct interest
|
|
Performance Rights
|
|
Mr Pavlik held, at the date of this report, 1,200,000
Performance Rights direct interest
|
|
Special
Responsibilities
|
|
Member of Environment, Social and
Governance Committee
Member of Nomination
Committee
|
|
Directorships held in other listed
entities
|
|
Nil
|
|
Information on Directors (continued)
|
|
|
|
|
|
Kiran Morzaria
|
|
Non-Executive Director - Appointed
10 December 2015
|
|
Qualifications
|
|
Bachelor of Engineering
(Industrial Geology) from the Camborne School of Mines and an MBA
(Finance) from CASS Business School
|
|
Experience
|
|
Mr Morzaria has extensive
experience in the mineral resource industry working in both
operational and management roles. He spent the first four
years of his career in exploration, mining and civil engineering
before obtaining his MBA. Mr Morzaria has served as a
director of a number of public companies in both an executive and
non-executive capacity.
|
|
Interest in shares and
Options
|
|
Mr Morzaria held, at the date of
this report, 200,000 shares direct interest. Mr Morzaria is a
director of Cadence Minerals Plc which owns 6,140,363 shares. Mr
Morzaria does not exert control of the acquisition or disposal of
the shares held by Cadence Minerals and he is not a
beneficiary.
|
|
Special
Responsibilities
|
|
Chair of Remuneration
Committee
Chair of Nomination
Committee
Member of Audit and Risk
Committee
Member of Environment, Social and
Governance Committee
|
|
Directorships held in other listed
entities
|
|
Chief Executive Officer and
Director of Cadence Minerals plc (appointed 31 July 2015 - current) and Director
of UK Oil & Gas plc (appointed 23 October
2015-current).
|
|
Lincoln Bloomfield Jr.
|
|
Non-Executive Director - Appointed
3 January 2021
|
|
Qualifications
|
|
Harvard College (cum laude,
Government, 1974), Fletcher School of Law and Diplomacy (M.A.L.D.,
1980)
|
|
Experience
|
|
Ambassador Bloomfield is based in
Washington, DC, and brings governance and regulatory experience,
years of international diplomacy and security expertise to the EMH
Board, along with a North American presence, while his private
sector experience is centred on sustainability, resilience and
renewable energy.
|
|
Interest in shares and
Options
|
|
Ambassador Bloomfield held, at the
date of this report, 525,000 direct interest in shares.
|
|
Special
Responsibilities
|
|
Chair of Environment, Social and
Governance Committee
Chair of Audit and Risk
Committee
Member of Remuneration
Committee
Member of Nomination
Committee
|
|
Directorships held in other listed
entities
|
|
Nil
|
|
Information on Directors (continued)
|
|
|
|
|
|
Merrill Gray
|
|
Non-Executive Director - Appointed
18 April 2024
|
|
Qualifications
|
|
Bachelor of Engineering, Bachelor
of Science, MBA, fellow of The Australasian Institute of Mining and
Metallurgy and the Australian Institute of Engineering.
|
|
Experience
|
|
Merrill is a highly experienced
executive and non-executive of ASX and private companies. Her
appointment brings over 30 years of metallurgical and mining
engineering as well as geology experience., including large-scale
new technology project development and production management
skills. Merrill currently works as a global critical minerals and
renewable energy (including hydrogen derivatives) corporate
advisor, having previously been MD and CEO of Syngas Ltd (Founder),
Hexagon Energy Materials Limited (ASX: HXG) and Co-MD of
lithium-ion battery recycling company, Primobius GmbH. She has
significant international experience, including within the European
Union and specifically with German automotive OEM's. Merrill brings
experience and networks across the lithium-ion battery supply
chain.
|
|
Interest in shares and
Options
|
|
Nil
|
|
Special
Responsibilities
|
|
Member of Environment, Social and
Governance Committee
Member of Audit and Risk
Committee
|
|
Directorships held in other listed
entities
|
|
Managing Director of Hexagon
Energy Materials Limited (Appointed 18 October 2021, resigned 17
May 2022)
|
Company Secretary
Mr Henko Vos (appointed 1 February
2024)
Ms Shannon Robinson (resigned 1
February 2024)
Director Meetings
The number of Directors' meetings
and meetings of Committees of Directors held during the year and
the number of meetings attended by each of the Directors of the
Company during the year is:
|
|
Directors'
Meetings
|
Audit and Risk
Committee
|
Nomination
Committee
|
|
Name
|
Number
attended
|
Number eligible to
attend
|
Number
attended
|
Number eligible to
attend
|
Number
attended
|
Number eligible to
attend
|
|
Keith Coughlan
|
4
|
4
|
-
|
-
|
1
|
1
|
|
Richard Pavlik
|
4
|
4
|
-
|
-
|
1
|
1
|
|
Kiran Morzaria
|
4
|
4
|
2
|
2
|
1
|
1
|
|
Lincoln Bloomfield, Jr
|
4
|
4
|
2
|
2
|
1
|
1
|
|
Merrill Gray
|
2
|
2
|
-
|
-
|
-
|
-
|
Director Meetings
(continued)
|
|
Remuneration
Committee
|
ESG
Committee
|
|
Name
|
Number
attended
|
Number eligible to
attend
|
Number
attended
|
Number eligible to
attend
|
|
Keith Coughlan
|
-
|
-
|
3
|
3
|
|
Richard Pavlik
|
-
|
-
|
3
|
3
|
|
Kiran Morzaria
|
1
|
1
|
3
|
3
|
|
Lincoln Bloomfield, Jr
|
1
|
1
|
3
|
3
|
|
Merrill Gray
|
-
|
-
|
2
|
2
|
Indemnifying officers or
auditor
During or since the end of the
financial year the Company has given an indemnity or entered into
an agreement to indemnify, or paid or agreed to pay insurance
premiums as follows:
i. The Company
has entered into agreements to indemnify all Directors and provide
access to documents, against any liability arising from a claim
brought by a third party against the Company. The agreement
provides for the Company to pay all damages and costs which may be
awarded against the Directors.
ii. The Company has
paid premiums of $71,000 (2023: $71,000) to insure each of the
Directors against liabilities for costs and expenses incurred by
them in defending any legal proceedings arising out of their
conduct while acting in the capacity of Director of the Company,
other than conduct involving a willful breach of duty in relation
to the Company. Under the terms and conditions of the insurance
contract, the nature of the liabilities insured against and the
premium paid cannot be disclosed.
iii. No indemnity or insurance of auditors has been
paid.
Shares under option
During the year, no unquoted
options and warrants were issued.
Unissued shares of European Metals
Holdings Limited under option at the date of this report is as
follows:
|
Expiry
date
|
Exercise
Price
|
Number under
option
|
|
31-Dec-25
|
80
cents
|
1,000,000
|
The following ordinary shares of
European Metals Holdings Limited were issued during the year ended
30 June 2024 and up to the date of this report on the exercise of
options granted:
|
Type
|
Date options
granted
|
Expiry
Date
|
Number under
option
|
Number
exercised
|
Exercised
price
|
|
Consultants
|
25
September 2020
|
23
October 2023
|
2,024,000
|
2,024,000
|
0.42
|
|
Consultants
|
8
October 2020
|
23
October 2023
|
600,000
|
600,000
|
0.45
|
|
|
|
|
|
|
|
No person entitled to exercise the
option has or has any right by virtue of the option to participate
in any share issue of any other body corporate.
Performance Rights
Performance rights on issue at the
date of this report is as follows:
|
Issued to
|
Grant date/Issue
date
|
Expiry
date
|
Number on
issue
|
|
Keith Coughlan
|
17 December 2020/2 March
2022
|
2-Mar-25
|
2,400,000
|
|
Richard Pavlik
|
17 December 2020/2 March
2022
|
2-Mar-25
|
1,200,000
|
|
Employee in terms of ESIP
|
27 February 2022 /2 March
2022
|
2-Mar-25
|
1,200,000
|
|
|
12 December 2022/20 December
2022
|
2-Mar-25
|
450,000
|
|
|
13 December 2022/20 December
2022
|
2-Mar-25
|
300,000
|
|
|
14 December 2022/20 December
2022
|
2-Mar-25
|
100,000
|
|
Consultant
|
22 February 2022/ 2 March
2022
|
2-Mar-25
|
900,000
|
|
|
29 August 2022/ 1 September
2022
|
2-Mar-25
|
750,000
|
Environmental, Social and
Governance
The Company has adopted a set of
Environmental, Social and Governance ("ESG") metrics and
disclosures following the recommendations released by the World
Economic Forum ("WEF") in Geneva, Switzerland which are
acknowledged as the gold standard for ESG reporting.
The establishment of an ESG
Committee at Board level is chaired by Ambassador Lincoln
Bloomfield who has considerable private sector experience centred
on sustainability, resilience and renewable energy.
Ambassador Bloomfield has stated, "European Metals is making every
effort to ensure that any finished product containing our lithium
will satisfy the public's need for assurance that high ESG
standards have been upheld at every stage of our production
process. We are committed to the well-being of our workforce,
minimizing environmental impact throughout our process, and
engaging with the local community".
The Company engaged Socialsuite
ESG technology platform - a global leader in ESG impact management
systems and sustainability reporting.
The Company has utilised
Socialsuite's ESG technology platform to establish its initial ESG
baseline dashboard. The Company will focus on delivering and
reporting on its ESG metrics and indicators. Socialsuite's ESG
reporting technology provides an easy way for investors and other
stakeholders to assess the progress of the Company on its
journey.
The Company's ESG transparency
commitment is a precursor to an independent lithium production Life
Cycle Assessment2 ("LCA") which includes a full Carbon Footprint
assessment.
Proceedings on Behalf of the Company
No person has applied for leave of
Court to bring proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for the purpose of
taking responsibility on behalf of the Company for all or any part
of those proceedings.
The Company was not a party to any
such proceedings during the year.
Non-audit Services
BDO has not provided any non-audit
services during the year.
Significant events after the reporting date
On 31 July 2024, and post the
reporting period, the Company provided a further project update
(refer to the Company's ASX/ AIM release dated 31 July 2024)
(Cinovec
Lithium Project Update). The
Company advised that the timeline for the completion of the DFS and
therefore construction of the Cinovec lithium processing plant
continue to be worked on. Given the change to the location of the
lithium processing plant from Dukla to Prunéřov, additional
geotechnical work is currently underway to confirm the optimal
construction method and layout at the new site. Results from this
geotechnical work are expected to be available at the end of
September. DRA is then expected to provide a detailed timeline and
begin the DFS finalisation program of work.
The Project team continues to
progress several DFS-related programs on the Front-End Comminution
and Beneficiation circuit ("FECAB") and LCP to improve the overall
flowsheet which are expected to positively impact Project
economics.
Auditor's Independence
Declaration
The auditor's independence
declaration for the year ended 30 June 2024 has been received and
can be found in the financial report.
Corporate Governance
Statement
The Company's 2024 Corporate
Governance Statement has been released as a separate document and
is located on the Company's website at https://www.europeanmet.com/corporate-governance/.
Rounding of amounts
The Company is of a kind referred
to in Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to 'rounding-off'.
Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest dollar.
REMUNERATION REPORT (AUDITED)
This report details the nature and
amount of remuneration for each Director of the Company, and key
management personnel ("KMP"). The Directors are pleased to present
the remuneration report which sets out the remuneration information
for European Metals Holdings Limited's Non-Executive Directors,
Executive Directors and other key management personnel.
A. Principles used to determine
the nature and amount of remuneration
The remuneration policy of the
Group has been designed to align Director and management objectives
with shareholder and business objectives by providing a fixed
remuneration component, and offering specific long-term incentives
based on key performance areas affecting the Group financial
results. The Board of the Company believes the remuneration policy
to be appropriate and effective in its ability to attract and
retain the best management and Directors to run and manage the
Group, as well as create goal congruence between Directors,
Executives and shareholders.
The Board's policy for determining
the nature and amount of remuneration for Board members and Senior
Executives of the Group is as follows:
The remuneration policy, setting
the terms and conditions for the Executive Directors and other
Senior Executives, was developed by the Board. All Executives
receive a base salary (which is based on factors such as length of
service and experience), superannuation, options and performance
incentives. The Board reviews Executive packages annually by
reference to the Group's performance, executive performance, and
comparable information from industry sectors and other listed
companies in similar industries.
Executives are also entitled to
participate in the employee share and option
arrangements.
All remuneration paid to Directors
and Executives is valued at the cost to the Group and
expensed.
REMUNERATION REPORT (AUDITED)(continued)
A. Principles used to determine
the nature and amount of remuneration (continued)
The Board policy is to remunerate
Non-executive Directors at commercial market rates for comparable
companies for time, commitment, and responsibilities. The Board
determines payments to the Non-executive Directors and reviews
their remuneration annually based on market practice, duties, and
accountability. Independent external advice is sought when
required. The maximum aggregate amount of fees that can be paid to
Non-executive Directors is subject to approval by shareholders at
the Annual General Meeting. Fees for Non-Executive Directors are
not linked to the performance of the Group. However, to align
Directors' interests with shareholder interests, the Directors are
encouraged to hold shares in the Company.
The remuneration policy has been
tailored to increase the direct positive relationship between
shareholders' investment objectives and Directors' and Executives'
performance. Currently, this is facilitated through the
issue of options to the majority
of Directors and Executives to encourage the alignment of personal
and shareholder interests. The Company believes this policy will be
effective in increasing shareholder wealth. For details of
Directors' and Executives' interests in shares, options and performance
shares at year end, refer to sections d, e and f of the
remuneration report.
B. Details of Remuneration
Details of the nature and amount
of each element of the emoluments of each of the KMP of the Company
(the Directors) for the year ended 30 June 2024 are set out in the
following tables:
The maximum amount of remuneration
for Non-Executive Directors is $300,000 as approved by
shareholders.
During the financial period, the
Company did not engage any remuneration consultants.
|
2024
|
Short-term
benefits
|
Post- employment
benefits
|
Long term
benefits
|
Equity-settled share-based
payments
|
Total
|
%
related to performance
|
|
|
Salary
fees and leave
|
Profit
share and bonuses
|
Super-annuation
|
Annual Leave and Long Service Leave
|
Rights/
Options (ii)
|
$
|
%
|
|
$
|
$
|
$
|
$
|
$
|
|
|
|
Directors
|
|
|
|
|
|
|
|
|
Keith Coughlan(i)
|
478,322
|
116,978
|
27,500
|
195,098
|
(880,462)
|
(62,564)
|
14%
|
|
Kiran Morzaria
|
54,826
|
-
|
-
|
-
|
-
|
54,826
|
0%
|
|
Richard Pavlik
|
74,287
|
61,660
|
-
|
-
|
(440,231)
|
(304,284)
|
45%
|
|
Lincoln Bloomfield Jr
|
70,100
|
-
|
-
|
-
|
-
|
70,100
|
0%
|
|
Merrill Gray
|
11,667
|
-
|
-
|
-
|
-
|
11,667
|
0%
|
|
Total
|
689,202
|
178,638
|
27,500
|
195,098
|
(1,320,692)
|
(230,254)
|
16%
|
Notes:
(i)
During the financial year, a total of $137,280 of Mr Coughlan's
remuneration was reimbursed by Geomet s.r.o.
(ii)
As noted in section F "Performance Rights granted for the year
ended 30 June 2024" of the Remuneration Report, performance rights
were granted to Keith Coughlan and Richard Pavlik on 17 December
2020. The Group's estimate of the probability of when these
performance rights will vest has been updated, as disclosed in
section F. As a result, there has been a reversal of the
expense.
REMUNERATION REPORT (AUDITED)(Continued)
B. Details of Remuneration (continued)
|
|
Short-term
benefits
|
Post- employment
benefits
|
Long term
benefits
|
Equity-settled share-based
payments
|
Total
|
%
related to performance
|
|
2023
|
Salary
fees and leave
|
Profit
share and bonuses
|
Super-annuation
|
Long Service Leave
|
Rights/
Options (iii)
|
$
|
%
|
|
$
|
$
|
$
|
$
|
$
|
|
|
|
Directors
|
|
|
|
|
|
|
|
|
Keith Coughlan (i)
|
425,901
|
48,922
|
27,500
|
32,762
|
201,359
|
736,444
|
34%
|
|
Kiran Morzaria
|
57,048
|
-
|
-
|
-
|
-
|
57,048
|
0%
|
|
Richard Pavlik(ii)
|
141,295
|
33,647
|
-
|
-
|
100,681
|
275,623
|
49%
|
|
Lincoln Bloomfield Jr
|
70,852
|
-
|
-
|
-
|
-
|
70,852
|
0%
|
|
Total
|
695,096
|
82,569
|
27,500
|
32,762
|
302,040
|
1,139,967
|
34%
|
Notes:
(i)
During the prior financial year, a total of $137,280 of Mr
Coughlan's remuneration was reimbursed by Geomet s.r.o.
(ii)
In the prior financial period, Mr Pavlik was reimbursed for a
salary that should have been paid to him by European Metals
Holdings Limited in 2021, in addition to the salary paid by Geomet.
The total salary for the period January 2021 to July 2022 was
$54,883 and a bonus of $33,647.
(iii)
Performance rights were granted to Keith Coughlan
and Richard Pavlik on 17 December 2020. The Group's estimate of the
probability of when these performance rights will vest was updated.
As a result, a share-based expense was recognised for the year
ended 30 June 2023.
C. Service Agreements
It was formally agreed at a
meeting of the directors that the following remuneration be
established; there are no formal notice periods or termination
benefits payable on termination.
Mr Keith Coughlan, Executive
Chairman, received a salary of $595,300 plus statutory
superannuation contribution from 1 July 2023 to 30 June
2024.
D. Share-based
compensation
During the financial year,
no shares were
issued to KMP under the Employee Securities Incentive Plan (ESIP)
(2023: nil).
Loan shares on issue to KMP under the
ESIP are as follows:
|
30-Jun-24
|
Loan shares Grant
Details
|
Exercised
|
Lapsed/Cancelled
|
Balance at End of
Year
|
|
|
|
|
Grant Date
|
No.
|
Value
|
No.
|
Value
|
No.
|
Value
|
No.
|
Value
|
|
|
|
|
|
$
|
|
$
|
|
$
|
Vested
|
$
|
|
|
Group KMP
|
|
|
|
|
|
|
|
|
|
|
|
Keith Coughlan
|
30-Nov-17
|
850,000
|
592,245
|
-
|
-
|
-
|
-
|
850,000
|
592,245
|
|
|
Richard Pavlik
|
30-Nov-17
|
300,000
|
209,028
|
-
|
-
|
-
|
-
|
300,000
|
209,028
|
|
|
Kiran Morzaria
|
30-Nov-17
|
200,000
|
139,352
|
-
|
-
|
-
|
-
|
200,000
|
139,352
|
|
|
|
|
1,350,000
|
940,625
|
-
|
-
|
-
|
-
|
1,350,000
|
940,625
|
|
REMUNERATION REPORT (AUDITED)(Continued)
D. Share-based compensation
(continued)
|
30-Jun-23
|
Loan shares Grant
Details
|
Exercised
|
Lapsed/Cancelled
|
Balance at End of
Year
|
|
|
|
|
Grant Date
|
No.
|
Value
|
No.
|
Value
|
No.
|
Value
|
No.
|
Value
|
|
|
|
|
|
$
|
|
$
|
|
$
|
Vested
|
$
|
|
|
Group KMP
|
|
|
|
|
|
|
|
|
|
|
|
Keith Coughlan
|
30-Nov-17
|
850,000
|
592,245
|
-
|
-
|
-
|
-
|
850,000
|
592,245
|
|
|
Richard Pavlik
|
30-Nov-17
|
300,000
|
209,028
|
-
|
-
|
-
|
-
|
300,000
|
209,028
|
|
|
Kiran Morzaria
|
30-Nov-17
|
200,000
|
139,352
|
-
|
-
|
-
|
-
|
200,000
|
139,352
|
|
|
|
|
1,350,000
|
940,625
|
-
|
-
|
-
|
-
|
1,350,000
|
940,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The terms of the loan
shares are disclosed in
Note 18(d).
E. Options issued for the year ended 30 June
2024
No options were issued as part of
the remuneration for the year ended 30 June 2024 (2023:
nil).
No options were held by key
management personnel at 30 June 2024 (2023: nil).
F. Performance Rights granted for the year ended 30 June
2024
No performance rights were granted
as part of the remuneration for the year ended 30 June 2024 (2023:
nil).
|
Granted in prior year
|
Performance Rights
Details
|
Exercised
|
Lapsed/
|
Balance at
|
|
|
|
Cancelled
|
End of
Year
|
Vested
|
Unvested
|
|
|
Grant Date
|
No.
|
Value1
|
No.
|
Value
|
No.
|
Value
|
No.
|
Value1
|
No.
|
No.
|
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
Group KMP
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith Coughlan
|
17-Dec-20
|
2,400,000
|
2,088,000
|
-
|
-
|
-
|
-
|
2,400,000
|
2,088,000
|
-
|
2,400,000
|
|
Richard Pavlik
|
17-Dec-20
|
1,200,000
|
1,044,000
|
-
|
-
|
-
|
-
|
1,200,000
|
1,044,000
|
-
|
1,200,000
|
|
|
|
3,600,000
|
3,132,000
|
-
|
-
|
-
|
-
|
3,600,000
|
3,132,000
|
-
|
3,600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
1. The value of
performance rights granted to key management personnel is
calculated as at the grant date based on the share price at grant
date. As at 30 June 2024, management's assessment is that the
performance rights will vest as follows:
- 1,200,000 Class A performance
rights on 2 March 2025, probability 100%
- 1,200,000 Class B performance
rights after 2 March 2025, probability 0%
- 1,200,000 Class C performance
rights after 2 March 2025, probability 0%
REMUNERATION REPORT (AUDITED)(Continued)
G. Equity instruments issued on exercise of remuneration
options
No equity instruments were issued
during the year to Directors or other KMP.
H. Loans to Directors and Key Management
Personnel
No loans were issued to Key
Management Personnel during the financial year. See section d for
share loans currently recognised from previous issue.
I. Company performance, shareholder wealth and Directors' and
Executives' remuneration
The remuneration policy has been
tailored to increase the direct positive relationship between
shareholders' investment objectives and Directors' and Executives'
performance. This will be facilitated through the issue of options
to the majority of Directors and Executives to encourage the
alignment of personal and shareholder interests. The Company
believes this policy will be effective in increasing shareholder
wealth. At commencement of mine production, performance-based
bonuses based on key performance indicators are expected to be
introduced.
J.
Other information - Shareholdings
|
2024
Name
|
Balance at Start of
year
|
Granted as remuneration
during the year
|
Issued on exercise of
options
|
Other Changes during the
year
|
Balance at end of
year
|
|
Keith Coughlan
|
850,000
|
-
|
-
|
-
|
850,000
|
|
Indirect1
|
4,900,000
|
-
|
-
|
-
|
4,900,000
|
|
Richard Pavlik
|
300,000
|
-
|
-
|
-
|
300,000
|
|
Kiran Morzaria
|
200,000
|
-
|
-
|
-
|
200,000
|
|
Indirect2
|
11,968,504
|
-
|
-
|
(5,828,141)
|
6,140,363
|
|
Lincoln Bloomfield, Jr
|
250,500
|
-
|
-
|
274,500
|
525,000
|
|
Total
|
18,469,004
|
-
|
-
|
(5,553,641)
|
12,915,363
|
1. Mr Coughlan
held, at the end of the financial year,
850,000 shares
direct interest and 4,900,000 shares indirect interest held by
Inswinger Holdings Pty Ltd, an entity of which Mr Coughlan is a
director and a shareholder.
2. Mr Morzaria is a director of Cadence Minerals plc, an entity
which owns 6,140,363 shares
in European Metals Holdings Limited.
Mr Morzaria does not exert control of the
acquisition or disposal of the shares held by Cadence Minerals and
he is not a beneficiary.
K. Other transactions with Key Management
Personnel
Purchases from related parties are
made on terms equivalent to those that prevail in arm's length
transactions.
From July 2023, the Company
received company secretarial, accounting and bookkeeping services
of $206,278 plus GST from Nexia, a company at which the spouse of
Executive Chairman, Keith Coughlan, acts as key management
personnel. Amount payable to Nexia as at 30 June 2024 was
$37,969(2023: $17,028).
There were no other transactions
with Key Management Personnel during the financial year.
REMUNERATION REPORT (AUDITED)(Continued)
L. Additional Information
The earnings of the consolidated
entity for the five years to 30 June 2024 are summarised
below:
|
|
2024
|
2023
|
2022
|
2021
|
2020
|
|
|
$
|
$
|
$
|
$
|
$
|
|
Sales revenue
|
-
|
-
|
-
|
-
|
-
|
|
EBITDA
|
(3,289,784)
|
(5,876,476)
|
(6,758,452)
|
(3,892,419)
|
(4,607,385)
|
|
EBIT
|
(3,344,508)
|
(5,925,349)
|
(6,798,864)
|
(3,901,295)
|
(4,608,729)
|
|
Loss after income tax
|
(3,355,576)
|
(5,928,441)
|
(6,802,895)
|
(3,962,450)
|
(4,608,729)
|
|
|
2024
|
2023
|
2022
|
2021
|
2020
|
|
Share price at financial year end
($)
|
0.28
|
0.83
|
0.65
|
1.60
|
0.29
|
|
Total dividends declared (cents per
share)
|
-
|
-
|
-
|
-
|
-
|
|
Basic loss per share (cents per
share)
|
(1.64)
|
(3.14)
|
(3.78)
|
(2.39)
|
(3.05)
|
End
of Remuneration Report
Signed in accordance with a
resolution of the Board of Directors.
Keith Coughlan
EXECUTIVE CHAIRMAN
Dated at 30 September
2024
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE
2024
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING
POLICIES
(a) Basis of preparation
These consolidated financial
statements and notes represent those of European Metals Holdings
Limited ("EMHL" or "the Company") and its Controlled Entities (the
"Consolidated Group" or "Group").
The consolidated financial
statements are general purpose financial statements, which have
been prepared in accordance with Australian Accounting Standards,
Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Boards (AASB)
and the Corporations Act
2001. The Group is a for-profit entity for financial
reporting purposes under Australian Accounting
Standards.
The accounting policies detailed
below have been adopted in the preparation of the financial report.
Except for cash flow information, the consolidated financial
statements have been prepared on an accrual basis and are based on
historical cost, modified, where applicable, by the measurement at
fair values of selected non-current assets, financial assets and
financial liabilities.
The Company is a listed public
company, incorporated in Australia. The Company was previously
incorporated in the British Virgin Islands however redomiciled on 7
May 2024.
(i)
New and Revised Accounting Standards Adopted by
the Group
The Group has adopted all the new
or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ("AASB") that are mandatory
for the current reporting period.
New and revised Accounting
Standards for Application in Future Periods
Any new, revised or amending
Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted. The adoption of these Accounting
Standards and Interpretations would not have any significant impact
on the financial performance or position of the Group.
There are no other standards that
are not yet effective and that would be expected to have a material
impact on the entity in the current or future reporting period and
on foreseeable future transactions.
(ii) Statement of
Compliance
Australian Accounting Standards
set out accounting policies that the AASB has concluded would
result in the financial statements containing relevant and reliable
information about transactions, events and conditions. Compliance
with Australian Accounting Standards ensures that the financial
statements and notes also comply with International Financial
Reporting Standards as issued by the IASB.
(iii) Financial
Position
The Directors have prepared the
consolidated financial statements on going concern basis, which
contemplates continuity of normal business activities and the
realisation of assets and extinguishment of liabilities in the
ordinary course of business.
At 30 June 2024, the Group
comprising the Company and its subsidiaries has incurred a loss for
the year amounting to $3,355,576 (2023: loss of $5,928,441). The
Group has a net working capital surplus of $4,439,972 (2023:
surplus of $2,624,525) and cash and cash equivalents of $4,727,375
(2023: $8,892,951).
The Directors have prepared a cash
flow forecast, which indicates that the Company will have
sufficient cash flows to meet all commitments and working capital
requirements for the 12-month period from the date of signing this
financial report.
Based on the cash flow forecasts,
the Directors are satisfied that the going concern basis of
preparation is appropriate.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING
POLICIES
(iv)
Critical accounting estimates and judgements
The application of accounting
policies requires the use of judgements, estimates and assumptions
about carrying values of assets and liabilities that are not
readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions are
recognised in the period in which the estimate is revised if it
affects only that period or in the period of the revision and
future periods if the revision affects both current and future
periods.
Share-based payment
transactions
The Group measures the cost of
equity-settled transactions with employees and consultants by
reference to the estimated fair value of the equity instruments at
the date at which they are granted. These are expensed over the
estimated vesting periods. Judgement has been exercised on the
probability and timing of achieving milestones related to
performance rights granted to Directors.
Recognition of deferred tax assets
Deferred tax assets relating to
temporary differences and unused tax losses have not been
recognised as the Directors are of the opinion that it is not
probable that future taxable profit will be available against which
the benefits of the deferred tax assets can be utilised.
Investment in associate
Control exists where the parent
entity is exposed or has the rights to variable returns from its
involvement with the investee and has the ability to affect those
returns through its power over the investee. Power over the
investee exists when it has existing rights to direct the relevant
activities of the investee which are those which significantly
affect the investee's returns. Joint control is the contractually
agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous
consent of the parties sharing control. Significant influence
exists if the Group holds 20% or more of the voting power of an
investee and has the power to participate in the financial and
operating policy decisions of the entity.
Judgements are required by the
Group to consider the existence of control, joint control or
significant influence over an investee. The Group has considered
its investment in Geomet concluding the Group has significant
influence but not control or joint control. Control and joint
control do not exist as the Group does not direct and does not have
the power to direct the relevant activities of Geomet, this lies
with the Geomet board, of which there are only 2 directors out of 5
in common with the Group, and Geomet CEO and CFO who are employed
and work directly for Geomet.
(b) Income Tax
Current income tax expense charged
to the profit or loss is the tax payable on taxable income
calculated using applicable income tax rates enacted, or
substantially enacted, as at reporting date. Current tax
liabilities (assets) are therefore measured at the amounts expected
to be paid to (recovered from) the relevant taxation
authority.
Deferred income tax expense
reflects movements in deferred tax asset and deferred tax liability
balances during the year as well unused tax losses. Current and
deferred income tax expense (income) is charged or credited
directly to equity instead of the profit or loss when the tax
relates to items that are credited or charged directly to
equity.
Deferred tax assets and
liabilities are ascertained based on temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements. Deferred tax
assets also result where amounts have been fully expensed but
future tax deductions are available. No deferred income tax
will be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES
(CONTINUED)
(b) Income Tax (continued)
Deferred tax assets and
liabilities are calculated at the tax rates that are expected to
apply to the period when the asset is realised or the liability is
settled, based on tax rates enacted or substantively enacted at
reporting date. Their measurement also reflects the manner in
which management expects to recover or settle the carrying amount
of the related asset or liability.
Deferred tax assets relating to
temporary differences and unused tax losses are recognised only to
the extent that it is probable that future taxable profit will be
available against which the benefits of the deferred tax asset can
be utilised. Where temporary differences exist in relation to
investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised
where the timing of the reversal of the temporary difference can be
controlled, and it is not probable that the reversal will occur in
the foreseeable future.
Current tax assets and liabilities
are offset where a legally enforceable right of set-off exists and
it is intended that net settlement or simultaneous realisation and
settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally
enforceable right of set-off exists, the deferred tax assets and
liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability
will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or
settled.
(c) Impairment of Assets
At the end of each reporting
period the Group assesses whether there is an indication that an
asset may be impaired. If any such indication exists, or when
annual impairment testing for an asset is required, the Group makes
an estimate of the asset's recoverable amount. An asset's
recoverable amount is the higher of its fair value less costs to
sell and its value in use and is determined for an individual
asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets
and the asset's value in use cannot be estimated to be close to its
fair value. In such cases the asset is tested for impairment as
part of the cash-generating unit to which it belongs. When the
carrying amount of an asset or cash-generating unit exceeds its
recoverable amount, the asset or cash-generating unit is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the
estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset. Impairment losses relating to continuing operations are
recognised in those expense categories consistent with the function
of the impaired asset unless the asset is carried at revalued
amount in which case the impairment loss is treated as a
revaluation decrease.
An assessment is also made at each
reporting period as to whether there is any indication that
previously recognised impairment losses may no longer exist or may
have decreased. If such indication exists, the recoverable amount
is estimated. A previously recognised impairment loss is reversed
only if there has been a change in the estimates used to determine
the asset's recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is
increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset
in prior years.
Such reversal is recognised in
profit or loss unless the asset is carried at revalued amount, in
which case the reversal is treated as a revaluation increase. After
such a reversal the depreciation charge is adjusted in future
periods to allocate the asset's revised carrying amount, less any
residual value, on a systematic basis over its remaining useful
life.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES
(CONTINUED)
(d) Cash and cash
equivalents
Cash and cash equivalents include
cash on hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months
or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities in the Statement of
Financial Position.
(e) Revenue
Interest
Interest income is recognised
using the effective interest method.
Services Revenue
Revenue is recognised at an amount
that reflects the consideration to which the Group is expected to
be entitled in exchange for transferring goods or services to a
customer. For each contract with a customer, the Group: identifies
the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which
takes into account estimates of variable consideration and the time
value of money; allocates the transaction price to the separate
performance obligations on the basis of the relative stand-alone
selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of
the goods or services promised.
(f) Goods and
Services Tax (GST)
Revenues, expenses, and assets are
recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In
these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
Receivables and payables in the Statement of Financial Position are
shown inclusive of GST.
Cash flows are presented in the
Statement of Cash Flows on a gross basis, except for the GST
component of investing and financing activities, which are
disclosed as operating cash flows.
(g) Financial
Instruments
Recognition, initial
measurement and derecognition
Financial assets and financial
liabilities are recognised when the Group becomes a party to the
contractual provisions of the financial instrument. Financial
instruments (except for trade receivables) are measured initially
at fair value adjusted by transaction costs, except for those
carried at 'fair value through profit or loss', in which case
transaction costs are expensed to profit or loss. Where
available, quoted prices in an active market are used to determine
the fair value. In other circumstances, valuation techniques are
adopted. Subsequent measurement of financial assets and financial
liabilities are described below.
Trade receivables are initially
measured at the transaction price if the receivables do not contain
significant financing component in accordance with AASB 15 Revenue
from Contracts with Customers.
Financial assets are derecognised
when the contractual rights to the cash flows from the financial
asset expire, or when the financial asset and all substantial risks
and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or
expired.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES
(CONTINUED)
(g) Financial Instruments
(continued)
Classification and
measurement
Financial
assets
Except for those trade receivables
that do not contain a significant financing component and are
measured at the transaction price in accordance with AASB 15
Revenue from Contracts with Customers, all financial assets are
initially measured at fair value adjusted for transaction costs
(where applicable).
For the purpose of subsequent
measurement, financial assets other than those designated and
effective as hedging instruments are classified into the following
categories upon initial recognition:
· amortised cost;
· fair
value through other comprehensive income (FVOCI); and
· fair
value through profit or loss (FVPL).
Classifications are determined by
both:
· the
contractual cash flow characteristics of the financial assets;
and
· the
Group's business model for managing the financial asset.
Financial assets at amortised cost
Financial assets are measured at
amortised cost if the assets meet with the following conditions
(and are not designated as FVPL);
· they
are held within a business model whose objective is to hold the
financial assets and collect its contractual cash flows;
and
· the
contractual terms of the financial assets give rise to cash flows
that are solely payments of principal and interest on the principal
amount outstanding.
For debt instruments at fair value
through OCI, interest income, foreign exchange revaluation and
impairment losses or reversals are recognised in the statement of
profit or loss and computed in the same manner as for financial
assets measured at amortised cost. The remaining fair value changes
are recognised in OCI.
After initial recognition, these
are measured at amortised cost using the effective interest
method. Discounting is omitted where the effect of
discounting is immaterial. The Group's cash and cash equivalents,
trade and most other receivables fall into this category of
financial instruments.
Financial assets at fair value through other comprehensive
income
The Group measures debt
instruments at fair value through OCI if both of the following
conditions are met:
· the
contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding; and
· the
financial asset is held within a business model with the objective
of both holding to collect contractual cash flows and selling the
financial asset.
Upon initial recognition, the
Group can elect to classify irrevocably its equity investments as
equity instruments designated at fair value through OCI when they
meet the definition of equity under AASB 132 Financial Instruments:
Presentation and are not held for trading.
Financial assets at fair value through profit or loss
(FVPL)
Financial assets at fair value
through profit or loss include financial assets held for trading,
financial assets designated upon initial recognition at fair value
through profit or loss or financial assets mandatorily required to
be measured at fair value. Financial assets are classified as
held for trading if they are acquired for the purpose of selling or
repurchasing in the near term.
For trade receivables and advance
to associate, the Group applies a simplified approach in
calculating expected credit losses ('ECLs). Therefore, the Group
does not track changes in credit risk, but instead recognises a
loss allowance based on lifetime ECLs at each reporting
date.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES
(CONTINUED)
(g) Financial Instruments
(continued)
Financial
liabilities
Financial liabilities are
classified, at initial recognition, as financial liabilities at
fair value through profit or loss, loans and borrowings, payables
or as derivatives designated as hedging instruments in an effective
hedge, as appropriate.
Financial liabilities are
initially measured at fair value, and, where applicable, adjusted
for transaction costs unless the Group designated a financial
liability at fair value through profit or loss.
Subsequently, financial
liabilities are measured at amortised cost using the effective
interest method except for derivatives and financial liabilities
designated at FVPL, which are carried subsequently at fair value
with gains or losses recognised in profit or loss.
All interest-related charges and,
if applicable, gains and losses arising on changes in fair value
are recognised in profit or loss.
(h) Segment
reporting
An operating segment is a
component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any of the Group's
other components. Operating segments' results are reviewed by the
Group's Executive Chairman to make decisions about resources to be
allocated to the segment and assess its performance, and for which
discrete financial information is available.
(i) Principles of
Consolidation
The consolidated financial
statements incorporate all of the assets, liabilities and results
of the parent European Metals Holdings Limited and all of the
subsidiaries. Subsidiaries are entities the parent controls. The
parent controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
A list of the subsidiaries is provided in Note 22.
The assets, liabilities and
results of all subsidiaries are fully consolidated into the
financial statements of the Group from the date on which control is
obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany
transactions, balances and unrealised gains or losses on
transactions between Group entities are fully eliminated on
consolidation. Accounting policies of subsidiaries have been
changed and adjustments made where necessary to ensure uniformity
of the accounting policies adopted by the Group.
Equity interests in a subsidiary
not attributable, directly or indirectly, to the Group are
presented as "non-controlling interests". The Group initially
recognises non-controlling interests that are present ownership
interests in subsidiaries and are entitled to a proportionate share
of the subsidiary's net assets on liquidation at either fair value
or at the non-controlling interests' proportionate share of the
subsidiary's net assets. Subsequent to initial recognition,
non-controlling interests are attributed their share of profit or
loss and each component of other comprehensive income.
Non-controlling interests are shown separately within the equity
section of the statement of financial position and statement of
comprehensive income.
(j) Share based
payments
The grant date fair value of
share-based payment awards granted to employees is recognised as an
employee expense, with a corresponding increase in equity, over the
period that the employees unconditionally become entitled to the
awards. The amount recognised as an expense is adjusted to reflect
the number of awards for which the related service and non-market
vesting conditions are expected to be met, such that the amount
ultimately recognised as an expense is based on the number of
awards that do not meet the related service and non-market
performance conditions at the vesting date. For share-based payment
awards with non-vesting conditions, the grant date fair value of
the share-based payment is measured to reflect such conditions and
there is no true-up for differences between expected and actual
outcomes.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES
(CONTINUED)
(j) Share based
payments
Loan shares are treated similar to
options and value is an estimate calculated using an appropriate
mathematical formula based on Black-Scholes option pricing
model. The choice of models and the resultant Loan share
value require assumptions to be made in relation to the likelihood
and timing of the vesting of the Loan shares and the value and
volatility of the price of the underlying shares.
(k) Foreign Currency
Transactions and Balances
Functional and presentation
currency
The functional currency of each of
the Group's entities is measured using the currency of the primary
economic environment in which that entity operates. The
consolidated financial statements are presented in Australian
dollars which is the parent entity's functional and presentation
currency.
Transaction and
balances
Foreign currency transactions are
translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency
monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be
carried at the exchange rate at the
date of the transaction.
Non-monetary items measured at fair value are reported at the
exchange rate at the date when fair values were
determined.
Exchange differences arising on
the translation of monetary items are recognised in Profit or Loss,
except where deferred in equity as a qualifying cash flow or net
investment hedge. Exchange differences arising on the translation
of non-monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in other
comprehensive income; otherwise the exchange difference is
recognised in Profit or Loss.
Group companies
The financial results and position
of foreign operations whose functional currency is different from
the Group's presentation currency are translated as
follows:
· Assets
and liabilities are translated at year end exchange rates
prevailing at the end of the reporting period;
· Income
and expenses are translated at average exchange rates for the
period; and
· Retained earnings are translated at the exchange rates
prevailing at the date of the transaction.
Exchange differences arising on
translation of foreign operations recognised in the other
comprehensive income and included in the foreign currency
translation reserve in the Statement of Financial Position. These
differences are reclassified into Profit or Loss in the period in
which the operation is disposed.
(l) Investments in
associates
Associates are entities over which
the consolidated entity has significant influence but not control
or joint control. Investments in associates are accounted for using
the equity method. Under the equity method, the share of the
profits or losses of the associate is recognised in profit or loss
and the share of the movements in equity is recognised in other
comprehensive income. Investments in associates are carried in the
statement of financial position at cost plus post-acquisition
changes in the consolidated entity's share of net assets of the
associate. Goodwill relating to the associate is included in the
carrying amount of the investment and is neither amortised nor
individually tested for impairment. Dividends received or
receivable from associates reduce the carrying amount of the
investment.
When the consolidated entity's
share of losses in an associate equal or exceeds its interest in
the associate, including any unsecured long-term receivables, the
consolidated entity does not recognise further losses, unless it
has incurred obligations or made payments on behalf of the
associate.
The consolidated entity
discontinues the use of the equity method upon the loss of
significant influence over the associate and recognises any
retained investment at its fair value. Any difference between the
associate's carrying amount, fair value of the retained investment
and proceeds from disposal is recognised in profit or
loss.
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES
(CONTINUED)
(m) Restatement of comparatives
Correction of error
On 28 April 2020, the Company
announced the investment of EUR 29,100,000 (circa A$ 48,850,092) by
CEZ a.s. ("CEZ") for a 51% equity interest in Geomet, the Company's
wholly owned Czech subsidiary at the time, and holder of the
Cinovec licenses, had been completed. The Company ceased to fully
consolidate Geomet's results within EMH's consolidated accounts
effective from this date and commenced equity accounting its
investment in Geomet, as an associate.
At 30 June 2020, the Company
inadvertently recognised its portion of that period's share of
Geomet's loss as a profit, resulting in a misstatement of the
investment in associate's carrying value. In May 2023, the
Company agreed to a further investment of $5,627,057 million (circa
EUR 3,432,217) to maintain its 49% shareholding. The Company
inadvertently neglected to provide for this obligation as a payable
at 30 June 2023, and accordingly also understated its investment by
this amount. The balance was subsequently settled on 7 July
2023. The Company also noted that historical balances were
converted directly from CZK to AUD, where they should have been
converted into GBP as the functional currency of the holding
company. The noted errors have, in turn, had a resultant impact on
the exchange difference on translating the investment since its
acquisition.
Extracts (being only those line
items affected) are disclosed below.
|
Consolidated Statement of profit or loss and other
comprehensive income
|
30 Jun
2023
|
|
30 Jun
2023
|
|
|
$
|
$
|
$
|
|
|
As
Reported
|
Adjustment
|
Restated
|
|
Loss for the period
|
(5,928,441)
|
-
|
(5,928,441)
|
|
Other comprehensive income:
|
|
|
-
|
|
- Exchange differences on
translating foreign operations
|
(25,342)
|
-
|
(25,342)
|
|
- Exchange difference on translating
investment in Geomet
|
4,528,258
|
(2,589,521)
|
1,938,737
|
|
Other comprehensive income/(loss) for the period, net of
tax
|
4,502,916
|
(2,589,521)
|
1,913,395
|
|
Total comprehensive loss for the period
|
(1,425,525)
|
(2,589,521)
|
(4,015,046)
|
|
|
|
|
|
|
Consolidated statement of financial position
at the end of the comparative period
|
30 Jun
2023
|
|
30 Jun
2023
|
|
|
$
|
$
|
$
|
|
|
As
Reported
|
Adjustment
|
Restated
|
|
Investment in associate
|
19,629,519
|
2,646,415
|
22,275,934
|
|
Total assets
|
37,267,766
|
2,646,415
|
39,914,181
|
|
|
|
|
|
|
Payable to associate
|
-
|
5,627,507
|
5,627,507
|
|
Total liabilities
|
960,373
|
5,627,507
|
6,587,880
|
|
|
|
|
|
|
Net
assets
|
36,307,393
|
(2,981,092)
|
33,326,301
|
|
|
|
|
|
|
Accumulated losses
|
(30,294,074)
|
(980,102)
|
(31,274,176)
|
|
Reserves
|
18,720,115
|
(2,000,990)
|
16,719,125
|
|
Total equity
|
36,307,393
|
(2,981,092)
|
33,326,301
|
|
|
|
|
|
NOTE 1: STATEMENT OF MATERIAL ACCOUNTING POLICIES
(CONTINUED)
(u) Restatement of comparatives (continued)
|
Consolidated statement of financial position
at the beginning of the of the earliest comparative
period
|
1 Jul 2022
|
|
1 Jul 2022
|
|
|
$
|
$
|
$
|
|
|
As
Reported
|
Adjustment
|
Restated
|
|
Investment in associate
|
16,946,419
|
(391,572)
|
16,554,847
|
|
Total assets
|
36,972,862
|
(391,572)
|
36,581,290
|
|
|
|
|
|
|
Net
assets
|
35,799,510
|
(391,572)
|
35,407,938
|
|
|
|
|
|
|
Accumulated losses
|
(24,365,633)
|
(980,102)
|
(25,345,735)
|
|
Reserves
|
12,283,791
|
588,530
|
12,872,321
|
|
Total equity
|
35,799,510
|
(391,572)
|
35,407,938
|
|
|
|
|
|
|
The prior period adjustment did not
have an impact on the consolidated statement of cash
flows.
|
|
The prior period adjustment did not
have an impact on the basic or diluted earnings/(loss) per
share.
|
NOTE 2: DETERMINATION OF FAIR VALUES
A number of the Group's accounting
policies and disclosures require the determination of fair value,
for both financial and non-financial assets and liabilities. Fair
values have been determined for measurement and / or disclosure
purposes based on the following methods. When applicable, further
information about the assumptions made in determining fair values
is disclosed in the notes specific to that asset or
liability.
When an asset or liability,
financial or non-financial, is measured at fair value for
recognition or disclosure purposes, the fair value is based on the
price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at
the measurement date; and assumes that the transaction will take
place either: in the principal market; or in the absence of a
principal market, in the most advantageous market.
Fair value is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming they act in their economic best
interests. For non-financial assets, the fair value measurement is
based on its highest and best use. Valuation techniques that are
appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of
relevant observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at
fair value are classified into three levels, using a fair value
hierarchy that reflects the significance of the inputs used in
making the measurements. Classifications are reviewed at each
reporting date and transfers between levels are determined based on
a reassessment of the lowest level of input that is significant to
the fair value measurement.
For recurring and non-recurring
fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed
to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in
fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major
inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
NOTE 2: DETERMINATION OF FAIR VALUES
(CONTINUED)
Share-based payment transactions
The fair value of the employee
share options is measured using the Black-Scholes formula.
Measurement inputs include share price on measurement date,
exercise price of the instrument, expected volatility (based on
weighted average historic volatility adjusted for changes expected
due to publicly available information), weighted average expected
life of the instruments (based on historical experience and general
option holder behaviour), expected dividends, and the risk-free
interest rate (based on government bonds). Service and non-market
performance conditions attached to the transactions are not taken
into account in determining the fair value.
The fair value of consultant share
options is measured at the fee for the services received, except
for when the fair value of the services cannot be estimated
reliably, in which case the fair value is measured using the
Black-Scholes formula.
The fair value of performance
rights granted to Directors is measured using the share price at
grant date. Service and non-market performance conditions attached
to the transactions are not taken into account in determining the
fair value.
NOTE 3: INCOME TAX
|
(a)
Income tax expense
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Current tax
|
|
-
|
-
|
|
Deferred tax
|
|
-
|
-
|
|
|
|
-
|
-
|
|
|
|
|
|
|
Deferred income tax expense included
in income tax expense comprises:
|
|
|
|
|
(Increase) in deferred tax
assets
|
|
-
|
-
|
|
Increase in deferred tax
liabilities*
|
|
-
|
-
|
|
|
|
-
|
-
|
|
|
|
|
|
* Any
capital gain on disposal of shares in Geomet held by EMH UK is
tax-exempt under the current UK legislation (Schedule 7AC of the Taxation of Chargeable Gains Act 1992).
For this reason, no deferred tax liability has been recognised as
at 30 June 2024.
NOTE 3: INCOME TAX (CONTINUED)
|
(b) Reconciliation of income tax expense to prima facie
tax payable
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Net loss before tax
|
|
(3,355,576)
|
(5,928,441)
|
|
Prima facie tax on operating loss at
25% (2023: 25%)
|
|
(838,894)
|
(1,482,110)
|
|
Add/(Less): Non-deductible items
|
|
|
|
|
Non-deductible expenses
|
|
854,198
|
1,333,306
|
|
Non-assessable income
|
|
(574,878)
|
-
|
|
Adjustments recognised in the
current year in relation to the current tax of previous
years
|
|
(37,663)
|
1,236
|
|
Current year tax loss not
recognised
|
|
-
|
188,998
|
|
Effect of temporary differences that
would be recognised directly in equity
|
|
(960)
|
-
|
|
Temporary differences not
recognised
|
|
598,197
|
(41,430)
|
|
Income tax attributable to operating
profit/loss
|
|
-
|
-
|
|
The applicable weighted average
effective tax rates are as follows:
|
|
Nil%
|
Nil%
|
|
Balance of franking account at year
end
|
|
Nil
|
Nil
|
|
Deferred tax assets/(liabilities)
|
|
|
|
|
Tax losses
|
|
2,003,970
|
1,499,005
|
|
Other future deductions
|
|
768
|
-
|
|
Other receivables and other
assets
|
|
(27,456)
|
(27,670)
|
|
Trade and other payables and
Accruals
|
|
6,734
|
8,750
|
|
Right-of-use assets
|
|
(41,553)
|
(9,992)
|
|
Lease liabilities
|
|
41,045
|
10,194
|
|
Provisions
|
|
81,228
|
27,517
|
|
Unrecognised net deferred tax
asset
|
|
2,064,735
|
1,507,804
|
|
Tax
losses
|
|
|
|
|
Unused tax losses for which no
deferred tax asset has been recognised
|
|
8,015,879
|
6,000,962
|
|
|
|
|
|
The Company is registered in
Australia (previously the British Virgin Islands (BVI) up to 7 May
2024). The Company is a tax resident of Australia. The unused tax
losses are representative of losses incurred in Australia.
These tax losses can only be utilised in the
future if the continuity of ownership test is passed, or failing
that, the same business test is passed.
The Company is subject to UK
taxation regulations in respect of European Metals (UK)
Limited.
NOTE 4: RELATED PARTY TRANSACTIONS
Transactions between related
parties are at arms' length and on normal commercial terms and
conditions no more favourable than those available to other parties
unless otherwise stated.
During the year, the Company
received a total of $1,009,490 (2023: 1,830,738) from its
associate, Geomet s.r.o.
This amount is broken down as $868,741 (2023: $1,102,944) for
providing services of managing the Cinovec project development and
$140,749 (2023: $727,794) for recharged costs. The balance owing
from Geomet s.r.o at 30 June 2024 is
$94,802 (2023: $94,802). The Company's Directors also received
remuneration from Geomet s.r.o in arm's length transaction during
the financial year.
From July 2023, the Company
received company secretarial, accounting and bookkeeping services
of $206,278 plus GST from Nexia, a company at which the spouse of
Executive Chairman, Keith Coughlan, acts as key management
personnel. Amount payable to Nexia as at 30 June 2024 was
$37,969(2023: $17,028).
On 31 May 2023 an unsecured loan
of $8,418,872 (initial value of CZK121,000,000) was advanced to
Geomet s.r.o by the Company. The loan is due for repayment on 31
December 2028 and carries a fixed interest rate at 8.8% per annum.
There have been no further loan advancements or repayments made
during the year. Interest charged and paid for the year was
$717,173 (CZK 11,683,222). Closing balance of the loan is
$8,430,289 (See Note 13)
There were no other transactions
with related parties during the financial year.
NOTE 5: KEY MANAGEMENT PERSONNEL
COMPENSATION
Refer to the Remuneration Report
contained in the Directors' Report for details of the remuneration
paid or payable to each member of the Group's key management
personnel (KMP) for the year ended 30 June 2024 and 30 June
2023.
The totals of remuneration paid to
KMP during the year are as follows:
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Short-term benefits
|
|
867,840
|
777,665
|
|
Post-employment benefits
|
|
27,500
|
27,500
|
|
Annual leave and long service
leave
|
|
195,098
|
32,762
|
|
|
|
1,090,438
|
837,927
|
|
|
|
|
|
|
Equity settled
|
|
(1,320,692)
|
302,040
|
|
|
|
(1,320,692)
|
302,040
|
|
|
|
|
|
|
Total
|
|
(230,254)
|
1,139,967
|
|
|
|
|
|
Loans to Key Management Personnel
There were no loans to Key
Management Personnel during the financial year (2023: nil). The
total value of loan shares at 30 June 2024 amounted to $1,442,666
(30 June 2023: $1,442,666). The fair value of the remaining
1,350,000 loan shares is $1,442,666 at 30 June 2024. (See Note
17(d))
NOTE 6: OTHER INCOME
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Service revenue - Cinovec project
development
|
|
868,741
|
1,102,944
|
|
Other Income
|
|
127
|
13,349
|
|
|
|
868,868
|
1,116,293
|
|
|
|
|
|
NOTE 7: AUDITOR'S REMUNERATION
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Auditor's services
|
|
|
|
|
Audit and review of financial
report
|
|
65,677
|
63,443
|
|
other services
|
|
3,500
|
-
|
|
Under provision in prior
year
|
|
8,775
|
-
|
|
|
|
77,952
|
63,443
|
NOTE 8: BASIC AND DILUTED LOSS PER SHARE
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Basic and diluted loss per
share
|
|
(1.64)
|
(3.14)
|
|
Loss attributable to members of
European Metals Holdings Limited
|
|
(3,355,576)
|
(5,928,441)
|
|
Weighted average number of shares
outstanding during the period
|
|
204,755,046
|
188,790,669
|
|
|
|
|
|
Potential ordinary shares of the
Company consist of 1,000,000 options and 7,300,000 performance
rights which were considered as being potentially dilutive at
balance date.
In accordance with AASB 133
'Earnings per Share' these options have been excluded from the
calculation of diluted loss per share due to their antidilutive
effect and as such, diluted loss per share is equal to basic loss
per share.
NOTE 9: CASH AND CASH EQUIVALENTS
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Cash at bank
|
|
2,990,454
|
6,758,425
|
|
Term deposit
|
|
1,736,921
|
2,134,526
|
|
Total cash and cash equivalents in
the consolidated Statement of Cash Flows
|
|
4,727,375
|
8,892,951
|
|
|
|
|
|
NOTE 10: TRADE AND OTHER RECEIVABLES
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Trade receivables
|
|
94,802
|
94,802
|
|
GST and VAT receivable
|
|
47,068
|
38,903
|
|
Accrued management fees
|
|
243,310
|
-
|
|
Interest receivable
|
|
6,762
|
67,001
|
|
|
|
391,942
|
200,706
|
|
|
|
|
|
NOTE 11: OTHER ASSETS
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Current
|
|
|
|
|
Prepayments
|
|
-
|
-
|
|
Other receivables
|
|
37,263
|
34,697
|
|
|
|
37,263
|
34,697
|
|
|
|
|
|
|
Non-Current
|
|
|
|
|
Bank guarantee on office
lease
|
|
28,549
|
48,154
|
|
|
|
28,549
|
48,154
|
|
|
|
|
|
NOTE 12: INVESTMENT IN ASSOCIATE
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
|
|
|
(Restated)
|
|
Opening balance
|
|
22,275,934
|
16,554,847
|
|
Increase in investment
|
|
5,764,078
|
5,627,507
|
|
Share of loss -
associates
|
5
|
(2,301,708)
|
(1,845,158)
|
|
Share of the movement in foreign
currency translation reserve - associates
|
|
(2,206,706)
|
1,938,738
|
|
Closing balance
|
|
23,531,598
|
22,275,934
|
|
|
|
|
|
Effective 28 April 2020 and up to
30 June 2024, Geomet was equity accounted (i.e. 49% of share of the
profit or loss of the investee after the date of acquisition) for
as Investment in Associate by EMH. The Company was appointed to
provide services of managing the Cinovec project
development.
Contingent liabilities, commitments and bank
guarantees
Geomet had no contingent
liabilities, commitments or bank guarantees at 30 June 2024.
NOTE 12: INVESTMENT IN ASSOCIATE
(CONTINUED)
|
Summarised statement of financial position
|
|
2024
|
2023
|
|
|
$
|
$
|
|
Current assets
|
|
10,679,067
|
24,328,436
|
|
Non-current assets
|
|
74,233,700
|
64,599,159
|
|
Total assets
|
|
84,912,767
|
88,927,595
|
|
|
|
|
|
|
Current liabilities
|
|
1,892,298
|
5,785,887
|
|
Non-current liabilities
|
|
15,963,209
|
17,193,373
|
|
Total liabilities
|
|
17,855,507
|
22,979,260
|
|
Net
assets
|
|
67,057,260
|
65,948,335
|
|
|
|
|
|
|
Summarised statement of profit or loss and other
comprehensive income
|
|
|
|
Revenue
|
|
1,409,179
|
18,399
|
|
Expenses
|
|
(6,058,543)
|
(3,781,572)
|
|
Loss for the year
|
|
(4,649,364)
|
(3,763,173)
|
|
|
|
|
|
NOTE 13: ADVANCES TO ASSOCIATES
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Advances to associate
|
|
8,430,289
|
8,418,872
|
|
|
|
8,430,289
|
8,418,872
|
|
|
|
|
|
On 31 May 2023 an unsecured loan
of $8,418,872 (initial value of CZK121,000,000) was advanced to
Geomet s.r.o by the Company. The loan is due for repayment on 31
December 2028 and carries a fixed interest rate at 8.8% per
annum.
NOTE 14: TRADE AND OTHER PAYABLES
|
|
|
2024
|
2023
|
|
|
$
|
$
|
|
|
|
|
|
|
Trade payables
|
|
238,376
|
747,492
|
|
Accrued expenses and other
liabilities
|
|
121,483
|
71,485
|
|
|
|
359,859
|
818,977
|
|
|
|
|
|
NOTE 15: PROVISIONS
|
|
|
2024
|
2023
|
|
|
$
|
$
|
|
Current Liability
|
|
|
|
|
Provision for annual
leave
|
|
219,139
|
16,570
|
|
Provision for long service
leave
|
|
91,693
|
-
|
|
|
|
310,832
|
16,570
|
|
|
|
|
|
|
Non-current Liability
|
|
|
|
|
Provision for long service
leave
|
|
329
|
84,051
|
|
|
|
329
|
84,051
|
|
|
|
|
|
NOTE 16: ISSUED CAPITAL
On the 7 May 2024 the Company
redomiciled from the British Virgin Islands to Australia. On
redomiciliation all CDI's converted to shares on a 1:1
basis.
|
(a)
Issued and paid up capital
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Total issued capital
|
|
58,886,707
|
47,881,352
|
|
Shares
|
Number
|
207,444,705
|
192,385,492
|
|
|
|
|
|
|
(b)
Movements in shares
|
|
|
|
|
|
Date
|
Number
|
$
|
|
Balance at the beginning of the year
|
1 Jul
2023
|
186,042,485
|
47,881,352
|
|
Exercise of options
|
9 Jan
2023
|
6,343,007
|
-
|
|
Balance at the end of the year
|
30 Jun
2023
|
192,385,492
|
47,881,352
|
|
|
|
|
|
|
Balance at the beginning of the year
|
1 Jul
2023
|
192,385,492
|
47,881,352
|
|
Placement shares
|
23 Aug
2023
|
12,315,213
|
9,889,116
|
|
Exercise of options
|
Various
|
2,624,000
|
1,120,080
|
|
Conversion of performance
rights
|
28 Mar
2024
|
120,000
|
-
|
|
Transaction costs
|
|
-
|
(3,841)
|
|
Balance at end of the year
|
30 Jun
2024
|
207,444,705
|
58,886,707
|
|
|
|
|
|
(c) Capital risk
management
The Group's objectives when
managing capital is to safeguard its ability to continue as a going
concern, so that it may continue to provide returns for
shareholders and benefits for other stakeholders.
The capital structure of the Group
consists of equity comprising issued capital, reserves and
accumulated losses.
NOTE 16: ISSUED CAPITAL
(CONTINUED)
(c) Capital risk management
(continued)
The Group does not have ready
access to credit facilities, with the primary source of funding
being equity raisings. Therefore, the focus of the Group's capital
risk management is to maintain sufficient current working capital
to meet the requirements of the Group to meet exploration programs
and corporate overheads. The Group's strategy is to ensure
appropriate liquidity is maintained to meet anticipated operating
requirements, with a view to initiating appropriate capital
raisings as required.
The working capital position of
the Group at 30 June is as follows:
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Cash and cash equivalents
|
|
4,727,375
|
8,892,951
|
|
Trade and other
receivables
|
|
391,942
|
200,706
|
|
Other assets
|
|
37,263
|
34,697
|
|
Trade and other payables
|
|
(359,859)
|
(818,977)
|
|
Payable to associate
|
|
-
|
(5,627,507)
|
|
Provisions
|
|
(310,832)
|
(16,570)
|
|
Lease liability
|
|
(45,917)
|
(40,775)
|
|
Working capital surplus
|
|
4,439,972
|
2,624,525
|
|
|
|
|
|
The Group is not subject to any
externally imposed capital requirements.
NOTE 17: RESERVES
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Option reserve 17(a)
|
|
418,000
|
4,788,589
|
|
Performance shares reserve 17
(b)
|
|
3,471,444
|
3,471,444
|
|
Performance rights reserve 17
(c)
|
|
1,664,338
|
4,134,950
|
|
Loan shares reserve 17
(d)
|
|
1,442,667
|
1,442,667
|
|
Foreign currency translation reserve
17 (e)
|
|
688,148
|
2,881,475
|
|
Total Reserves
|
|
7,684,597
|
16,719,125
|
|
|
|
|
|
|
(a)
Option reserve
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Balance at the beginning of the
financial year
|
|
4,788,589
|
4,370,589
|
|
Share based payment
expense
|
|
-
|
418,000
|
|
Transfer to retained
earnings
|
|
(4,370,589)
|
-
|
|
Balance at the end of the financial
year
|
|
418,000
|
4,788,589
|
|
|
|
|
|
NOTE 17: RESERVES (CONTINUED)
(a) Option reserve (continued)
The following options existed as
at 30 June 2023 and 30 June 2024:
|
|
Expiry
date
|
Balance at 30 Jun
2023
|
Issued during the
year
|
Exercised during the
year
|
Expired/
cancelled
|
Balance at 30
Jun 2024
|
|
|
|
Options @ 42cents
|
23 Oct
20231
|
2,024,000
|
-
|
(2,024,000)
|
-
|
-
|
|
|
Options @ 45cents
|
23 Oct
20232
|
600,000
|
-
|
(600,000)
|
-
|
-
|
|
|
Options @ 80
cents1
|
31 Dec
20253
|
2,000,000
|
-
|
-
|
(1,000,000)
|
1,000,000
|
|
|
Total
|
|
4,624,000
|
-
|
(2,624,000)
|
(1,000,000)
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
12,024,000 unlisted options were exercised during the year as
detailed in the table above. The share capital for the options
exercised was issued on 25 October 2023.
2600,000 unlisted options were exercised during the period as
detailed in the table above. The share capital for the options
exercised was issued on 23 October
2023.
32,000,000 options exercisable at $0.80 on or before 31
December 2025 were granted to consultants on 15 June 2023, subject
to vesting conditions. The share-based payment expense of $418,000
was recognised in the consolidated statement of profit or loss and
other comprehensive income for the prior year. 1,000,000 did not
meet vesting conditions and therefore lapsed on 28 March
2024.
(b) Performance shares reserve
The Performance shares reserve
records the fair value of performance shares issued. No
performance shares were on issue at 30 June
2024.
|
|
|
|
|
|
|
Date
|
Number
|
$
|
|
Balance at the beginning of the year
|
1 Jul
2023
|
-
|
3,471,444
|
|
|
|
|
|
|
Balance at the end of the year
|
30 June
2024
|
-
|
3,471,444
|
|
|
|
|
|
(c) Performance rights reserve
|
|
30 June
2024
|
30 Jun
2023
|
|
|
Number
|
$
|
Number
|
$
|
|
|
|
|
|
|
|
Balance at the beginning of the year
|
7,470,000
|
4,134,950
|
5,800,000
|
2,619,432
|
|
Granted
|
-
|
-
|
1,670,000
|
1,515,518
|
|
Converted
|
(120,000)
|
-
|
-
|
-
|
|
Cancelled
|
(50,000)
|
-
|
-
|
-
|
|
Movement (1)
|
-
|
(2,299,512)
|
-
|
-
|
|
Transfer to retained
earnings
|
|
(171,100)
|
-
|
-
|
|
Balance at the end of the year
|
7,300,000
|
1,664,338
|
7,470,000
|
4,134,950
|
|
|
|
|
|
|
(1) Movement relates to
reassessment of probability of performance rights by management
during the year.
NOTE 17:
RESERVES(continued)
(d) Loan shares reserve
Employee securities
incentive plan
In prior years, remuneration in
the form of an employee securities incentive plan was issued to the
Directors and employees to attract, motivate and retain such
persons and to provide them with an incentive to deliver growth and
value to shareholders.
The loan shares reserve records
the fair value of the loan shares issued.
The loan shares represent an
option arrangement. Loan shares vested immediately. The key terms
of the employee share plan and of each limited recourse loan
provided under the plan are as follows:
i. The total loan equal
to issue price multiplied by the number of plan shares/shares
applied for ("the Advance"), which shall be deemed to have been
drawn down at settlement upon issued of the loan shares.
ii.
The loan shall be interest free. However, if the advance is not
repaid on or before the repayment date, the Advance will accrue
interest at the rate disclosed in the plan from the business day
after the repayment date until the date the Advance is repaid in
full.
iii. All
or part of the loan may be repaid prior to the Advance repayment
Date.
Repayment
date
iv.
Notwithstanding paragraph iii. above, ("the borrower") may repay
all or part of the Advance at any time before the repayment date
i.e. the repayment date for 1,650,000 Director shares - 15 years
after the date of loan advance and the repayment date for 1,500,000
Employee shares - 7 years after the date of loan
advice.
v.
The Loan is repayable on the earlier of:
(a) The
repayment date;
(b) The plan
shares being sold;
(c) The borrower
becoming insolvent;
(d) The borrower
ceasing to be employed by the Company; and
(e) The plan
shares being acquired by a third party by way of an amalgamation,
arrangement, or formal takeover bid for not less than all the
outstanding shares.
Loan
forgiveness
vi. The
Board may, in its sole discretion, waive the right to repayment of
all or any part of the outstanding balance of an Advance
where:
(a) The borrower dies
or becomes permanently disabled; or
(b) The Board
otherwise determines that such waiver is appropriate
vii. Where the
Board waives repayment of the Advance in accordance with clause
6(a), the Advance is deemed to have been repaid in full for the
purposes of the plan in this agreement.
Sale of loan
shares
viii. In accordance
with the terms of the plan and the invitation, the loan shares
cannot be sold, transferred, assigned, charged or otherwise
encumbered with the plan shares except in accordance with the
plan.
|
|
30 June
2024
|
30 Jun
2023
|
|
|
Number
|
Amount
Expensed
|
Number
|
Amount
Expensed
|
|
Balance at beginning of the year
|
1,350,000
|
1,442,667
|
1,350,000
|
1,442,667
|
|
Loan shares repaid during the
year
|
-
|
-
|
-
|
-
|
|
Balance at end of the year
|
1,350,000
|
1,442,667
|
1,350,000
|
1,442,667
|
|
|
|
|
|
|
NOTE 17:
RESERVES(continued)
(d) Loan shares reserve (continued)
Loan shares entitle the holder to
participate in dividends and the proceeds on winding up of the
Company in proportion to the number of shares held. On a show of
hands every holder of a share present at a meeting in person or by
proxy, is entitled to one vote, and in a poll each share is
entitled to one vote.
The Loan shares were issued to the
executive members under the employee securities incentive plan on 6
June 2018.
Holders of shares have the same
entitlement benefits of holding the underlying shares. Each share
in the Company confers upon the Shareholder:
1.
the right to one vote at a meeting of the
shareholders of the Company or on any resolution of
shareholders;
2.
the right to an equal share in any dividend paid
by the Company; and
3.
the right to an equal share in the distribution
of the surplus assets of the Company on its liquidation.
Loan shares granted in prior
years and existed during the financial year ended 30 June
2024:
|
|
Number
30 June
2023
|
Repaid
during the year
|
Number
30 June 2024
|
|
Director Loan shares
|
1,350,000
|
-
|
1,350,000
|
|
|
1,350,000
|
-
|
1,350,000
|
No loan shares were granted/repaid
during the financial year.
The total fair value of the loan
shares was fully expensed in the consolidated statement of profit
or loss and other comprehensive income in the 2019 financial
year.
A summary of the outstanding
Director loan shares at 30 June 2024 and the inputs used in the
valuation of the loan shares issued to Directors are as
follows:
|
Loan shares
|
Keith
Coughlan
|
Richard
Pavlik
|
Kiran
Morzaria
|
|
Issue price
|
$0.725
|
$0.725
|
$0.725
|
|
Share price at date of
issue
|
$0.70
|
$0.70
|
$0.70
|
|
Grant date
|
30
November 2017
|
30
November 2017
|
30
November 2017
|
|
Expected volatility
|
143.41%
|
143.41%
|
143.41%
|
|
Expiry date
|
30
November 2032
|
30
November 2032
|
30
November 2032
|
|
Expected dividends
|
Nil
|
Nil
|
Nil
|
|
Risk free interest rate
|
2.47%
|
2.47%
|
2.47%
|
|
Value per loan
|
$0.69676
|
$0.69676
|
$0.69676
|
|
Number of loan shares
|
850,000
|
300,000
|
200,000
|
|
Total value
|
$592,245
|
$209,028
|
$139,352
|
NOTE 17:
RESERVES(continued)
(e) Foreign currency translation reserve
The foreign currency translation
reserve records exchange differences arising on translation of
foreign controlled subsidiaries, the Group's share of foreign
exchange movement in Geomet s.r.o.
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
|
|
|
(Restated)
|
|
Balance at the beginning of the
financial year
|
|
2,881,475
|
968,189
|
|
Movement during the
period
|
|
(2,193,327)
|
1,913,286
|
|
Balance at the end of the
period
|
|
688,148
|
2,881,475
|
|
|
|
|
|
NOTE 18: SHARE BASED PAYMENT
EXPENSE
During the year, the Group incurred
a share-based payments reversal for a total of $2,299,512 resulting
from the transactions detailed below.
(i) Share based payment
arrangements granted in previous years/periods and existing during
the year ended 30 June 2024:
· On 17
December 2020, 3,600,000 performance rights were issued to
Directors. The performance rights were valued at $3,132,000 at
grant date and are being expensed over the vesting period as noted
below. For the year ended 30 June 2024, management assessed the
probability of achieving the financial hurdles to be 100% for its
Class A options and 0% for its Class B and C options, as a result
of which, a reversal of share-based payment expense of $1,320,693
has been recognised in the consolidated statement of profit or loss
and other comprehensive income for the year.
|
|
Number
granted
|
Grant date
|
Estimated Vesting
Date
|
Share price on grant
date
|
Value per
right
|
Total fair
value
|
% vested
|
|
Class A
|
1,200,000
|
17 Dec
20
|
2 March
2025
|
$0.87
|
$0.87
|
$1,044,000
|
0%
|
|
Class B
|
1,200,000
|
17 Dec
20
|
Post 2
March 2025
|
$0.87
|
$0.87
|
$1,044,000
|
0%
|
|
Class C
|
1,200,000
|
17 Dec
20
|
Post 2
March 2025
|
$0.87
|
$0.87
|
$1,044,000
|
0%
|
· On 24
November 2021, 50,000 performance rights were issued to a
consultant. The performance rights were valued at $76,750 at grant
date. These had fully vested, and total expense was recognised in
30 June 2022 consolidated statement of profit or loss and other
comprehensive income. These performance
rights were converted to shares on 28 March 2024 and therefore have
been reversed from the reserve to retained earnings.
· On 24
November 2021, 50,000 performance rights were issued to a
consultant. The performance rights were valued at $76,750 at grant
date. By 31 December 2023 a total amount of $46,050 had vested and
was expensed, with $17,189 being recognised in the consolidated
statement of profit or loss and other comprehensive income for the
year. These performance rights were cancelled on 28 March 2024 as
conditions had not been met and therefore
have been reversed from the reserve to retained
earnings.
NOTE 18: SHARE BASED PAYMENT
EXPENSE (continued)
·
On 22 February 2022, 900,000 performance rights
were issued to a consultant. The performance rights were valued at
$1,044,000 at grant date and are being expensed over the vesting
period as noted below. For the year ended 30 June 2024, management
assessed the probability of achieving the financial hurdles to be
100% for its Class A options and 0% for its Class B and C options,
as a result of which, a reversal of share-based payment expense of
$318,591 has been recognised in the consolidated statement of
profit or loss and other comprehensive income for the
year.
|
|
Number
granted
|
Grant date
|
Estimated Vesting
Date
|
Share price on grant
date
|
Value per
right
|
Total fair
value
|
% vested
|
|
Class A
|
300,000
|
22 Feb
22
|
2 March
2025
|
$1.16
|
$1.16
|
$348,000
|
0%
|
|
Class B
|
300,000
|
22 Feb
22
|
Post 2
March 2025
|
$1.16
|
$1.16
|
$348,000
|
0%
|
|
Class C
|
300,000
|
22 Feb
22
|
Post 2
March 2025
|
$1.16
|
$1.16
|
$348,000
|
0%
|
·
On 27 February 2022, 1,200,000 performance rights
were issued to a consultant. The performance rights were valued at
$1,368,000 at grant date and are being expensed over the vesting
period as noted below. For the year ended 30 June 2024, management
assessed the probability of achieving the financial hurdles to be
100% for its Class A options and 0% for its Class B and C options,
as a result of which, a reversal of share-based payment expense of
$414,693 has been recognised in the consolidated statement of
profit or loss and other comprehensive income for the
year.
|
|
Number
granted
|
Grant date
|
Estimated Vesting
Date
|
Share price on grant
date
|
Value per
right
|
Total fair
value
|
% vested
|
|
Class A
|
400,000
|
27 Feb
22
|
2 March
2025
|
$1.14
|
$1.14
|
$456,000
|
0%
|
|
Class B
|
400,000
|
27 Feb
22
|
Post 2
March 2025
|
$1.14
|
$1.14
|
$456,000
|
0%
|
|
Class C
|
400,000
|
27 Feb
22
|
Post 2
March 2025
|
$1.14
|
$1.14
|
$456,000
|
0%
|
· On
29 August 2022, 750,000 performance rights were issued to an
employee. The performance rights were valued at $547,500 at grant
date and are being expensed over the vesting period as noted below.
For the year ended 30 June 2024 management assessed the probability
of achieving the hurdles to be 100% for Tranche 1 and 0% for
Tranches 2 and 3, as a result of which, a reversal of share-based
payment expense of $113,928 was recognised in the consolidated
statement of profit or loss and other comprehensive income for the
year.
|
|
Number
granted
|
Grant date
|
Estimated Vesting
Date
|
Share price on grant
date
|
Value per
right
|
Total fair
value
|
% vested
|
|
Tranche 1
|
250,000
|
29 Aug
22
|
2 March
2025
|
$0.73
|
$0.73
|
$182,500
|
0%
|
|
Tranche 2
|
250,000
|
29 Aug
22
|
Post 2
March 2025
|
$0.73
|
$0.73
|
$182,500
|
0%
|
|
Tranche 3
|
250,000
|
29 Aug
22
|
Post 2
March 2025
|
$0.73
|
$0.73
|
$182,500
|
0%
|
NOTE 18: SHARE BASED PAYMENT
EXPENSE (continued)
· On
12 December 2022, 450,000 performance rights were issued to an
employee. The performance rights were valued at $301,500 at grant
date and are being expensed over the vesting period as noted below.
For the year ended 30 June 2024, management assessed the
probability of achieving the hurdles to be 0% for all Tranches, as
a result of which, a reversal of share-based payment expense of
$107,705 was recognised in the consolidated statement of profit or
loss and other comprehensive income for the year.
|
|
Number
granted
|
Grant date
|
Estimated Vesting
Date
|
Share price on grant
date
|
Value per
right
|
Total fair
value
|
% vested
|
|
Tranche 1
|
150,000
|
12 Dec
22
|
Post 2
March 2025
|
$0.67
|
$0.67
|
$100,500
|
0%
|
|
Tranche 2
|
150,000
|
12 Dec
22
|
Post 2
March 2025
|
$0.67
|
$0.67
|
$100,500
|
0%
|
|
Tranche 3
|
150,000
|
12 Dec
22
|
Post 2
March 2025
|
$0.67
|
$0.67
|
$100,500
|
0%
|
· On
13 December 2022, 300,000 performance rights were issued to an
employee. The performance rights were valued at $201,000 at grant
date and are being expensed over the vesting period as noted below.
For the year ended 30 June 2024, management assessed the
probability of achieving the to be 0% for all Tranches, as a result
of which, a reversal of share-based payment expense of $71,587 was
recognised in the consolidated statement of profit or loss and
other comprehensive income for the year.
|
|
Number
granted
|
Grant date
|
Estimated Vesting
Date
|
Share price on grant
date
|
Value per
right
|
Total fair
value
|
% vested
|
|
Tranche 1
|
100,000
|
13 Dec
22
|
Post 2
March 2025
|
$0.67
|
$0.67
|
$67,000
|
0%
|
|
Tranche 2
|
100,000
|
13 Dec
22
|
Post 2
March 2025
|
$0.67
|
$0.67
|
$67,000
|
0%
|
|
Tranche 3
|
100,000
|
13 Dec
22
|
Post 2
March 2025
|
$0.67
|
$0.67
|
$67,000
|
0%
|
· On
14 December 2022, 170,000 performance rights were issued to an
employee. The performance rights were valued at $117,300 at grant
date. 70,000 Tranche 1 performance rights had fully vested by 9
November 2023, and total expense was recognised by 31 December
2023. These 70,000 Tranche 1 performance
rights were converted to shares on 28 March 2024 and therefore have
been reversed from the reserve to retained earnings. The remaining
100,000 tranche 2 performance rights are
being expensed over the vesting period as noted below. For the year
ended 30 June 2024, management assessed the probability of
achieving the hurdles to be 100% for Tranche 2, as a result of
which, a share-based payment expense of $30,497 was recognised in
the consolidated statement of profit or loss and other
comprehensive income for the year.
|
|
Number
granted
|
Grant date
|
Estimated Vesting
Date
|
Share price on grant
date
|
Value per
right
|
Total fair
value
|
% vested
|
|
Tranche 2
|
100,000
|
14 Dec
22
|
1
October 2026
|
$0.69
|
$0.69
|
$69,000
|
0%
|
NOTE 19: CASH FLOW
INFORMATION
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Reconciliation of cash flow from operating activities with
loss after tax:
|
|
|
|
|
Loss after income
tax
|
|
(3,355,576)
|
(5,928,441)
|
|
Adjustments for:
|
|
|
|
|
Share based payments
|
|
(2,299,512)
|
1,933,518
|
|
Finance costs
|
|
11,068
|
25,962
|
|
Foreign exchange loss
|
|
300,381
|
362,201
|
|
Depreciation and amortisation
expenses
|
|
54,724
|
48,873
|
|
Equity accounted of investment in
Geomet s.r.o.
|
|
2,301,708
|
1,845,158
|
|
Interest in assets and liabilities net of deemed disposal of
subsidiary
|
|
|
|
|
Decrease/(Increase) in trade and
other receivables and other assets
|
|
(184,449)
|
40,302
|
|
(Decrease)/Increase in trade and
other payables
|
|
(460,486)
|
(120,845)
|
|
(Decrease)/Increase in
provisions
|
|
210,541
|
(46,427)
|
|
Cash flow used in operating
activities
|
|
(3,421,602)
|
(1,839,699)
|
|
|
|
|
|
(b) Credit standby facilities
The Company had no credit standby
facilities as at 30 June 2024 and 2023.
(c) Investing and Financing Activities -
Non-Cash
There were no non-cash investing
or financing activities during the year, apart from an increase in
lease liabilities of $123,403 following the commencement of a new
office lease agreement.
NOTE 20: OPERATING SEGMENTS
The accounting policies used by
the Group in reporting segments are in accordance with the
measurement principles of Australian Accounting
Standards.
The Group has identified its
operating segments based on the internal reports that are provided
to the Board of Directors. According to AASB 8 Operating Segments, two or more
operating segments may be aggregated into a single operating
segment if the segments have similar economic characteristics, and
the segments are similar in each of the following
respects:
• The nature of the
products and services;
• The nature of the
production processes;
• The type or class of
customer for their products and services;
• The methods used to
distribute their products or provide their services; and
• If applicable, the
nature of the regulatory environment, for example; banking,
insurance and public utilities.
Effective 28 April 2020, the Group
has a 49% interest in Geomet s.r.o. which is accounted for in
accordance with AASB 128 Investment in Associates and Joint
Venture. Therefore, the Group has only one operating segment
based on geographical location. The Australian segment incorporates
the services provided to Geomet s.r.o. in relation to the Cinovec
project development along with head office and treasury function.
Consequently, the financial information for the sole operating
segment is identical to the information presented in these
financial reports.
NOTE 21: FINANCIAL RISK
MANAGEMENT
The Group's financial instruments
consist mainly of deposits with banks, loans to associated company,
leases and accounts receivable and payable. The main purpose of
non-derivative financial instruments is to raise finance for
Group's operations. The Group does not speculate in the trading of
derivative instruments.
The Group holds the following
financial instruments:
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Financial assets
|
|
|
|
|
Cash
|
|
4,727,375
|
8,892,951
|
|
Trade and other
receivables
|
|
391,942
|
200,706
|
|
Other Assets
|
|
65,812
|
82,851
|
|
Advances to associate
|
|
8,430,289
|
8,418,872
|
|
Total financial assets
|
|
13,615,418
|
17,595,380
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
Trade and other payables
|
|
359,859
|
818,977
|
|
Lease liability
|
|
164,178
|
40,775
|
|
Total financial assets
|
|
524,037
|
859,752
|
|
|
|
|
|
The fair value of the Group's
financial assets and liabilities approximate their carrying
value.
Specific Financial Risk Exposures and
Management
The Group's activities expose it
to a variety of financial risks: market risk (including currency
risk, interest rate risk and price risk) credit risk and liquidity
risk.
(i)
Market
risk
The Board meets on a regular basis
to analyse currency and interest rate exposure and to evaluate
treasury management strategies in the context of the most recent
economic conditions and forecasts.
Interest rate
risk
Exposure to interest rate risk
arises on financial assets and financial liabilities recognised at
the end of the reporting period whereby a future change in interest
rates will affect future cash flows or the fair value of fixed rate
financial instruments. The Group is also exposed to earnings
volatility on floating rate instruments. Interest rate risk is not
material to the Group as no interest-bearing debt arrangements have
been entered into.
Price risk
Price risk relates to the risk
that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market prices. The Group is
not exposed to significant price risk.
Foreign exchange
risk
Exposure to foreign exchange risk
may result in the fair value or future cash flows of a financial
instrument fluctuating due to movement in foreign exchange rates of
currencies in which the Group holds financial instruments which are
other than the AUD functional currency of the Group.
With instruments being held by
overseas operations, fluctuations in foreign currencies may impact
on the Group's financial results. The Group's exposure to
foreign exchange risk is monitored by the Board. The majority of
the Group's funds are held in Australian dollars, British Sterling
and the Euro.
NOTE 21: FINANCIAL RISK MANAGEMENT
(CONTINUED)
(ii)
Market risk
(continued)
Foreign exchange risk
(continued)
At 30 June 2024, the Group has
financial assets and liabilities denominated in the foreign
currencies detailed below:
|
|
2024
|
2023
|
|
|
Amount in
EUR
|
Amount in
GBP
|
Amount in
USD
|
Amount in
EUR
|
Amount in
GBP
|
Amount in
USD
|
|
Cash and cash equivalents in
EMH
|
2,080,365
|
48,100
|
-
|
2,018,189
|
48,287
|
-
|
|
Trade and other payables in
EMH
|
35,000
|
19,693
|
5,882
|
6,300
|
12,909
|
3,901
|
|
|
2,115,365
|
67,793
|
5,882
|
2,024,489
|
61,196
|
3,901
|
|
5% effect in foreign exchange
rates
|
105,768
|
3,390
|
294
|
101,224
|
3,060
|
195
|
|
|
|
|
|
|
|
|
Other than intercompany balances
there were no financial assets and liabilities denominated in
foreign currencies for EMH UK.
(ii)
Credit risk
Credit exposure represents the
extent of credit related losses that the Group may be subject to on
amounts to be received from financial assets. Credit risk arises
principally from trade and other receivables. The objective of the
Group is to minimise the risk of loss from credit risk. The Group
trades only with creditworthy third parties. In addition,
receivable balances are monitored on an ongoing basis with the
result that the Group's exposure to bad debts is insignificant. The
Group's maximum credit risk exposure is limited to the carrying
value of its financial assets as indicated on the Consolidated
Statement of Financial Position and notes to the consolidated
financial statements.
The credit quality of the
financial assets was high during the year. The table below
details the credit quality of the financial assets at the end of
the year:
|
|
|
2024
|
2023
|
|
Financial assets
|
Credit
Quality
|
$
|
$
|
|
Cash and cash equivalents held at
Westpac Bank
|
High
|
2,456,825
|
2,045,240
|
|
Cash and cash equivalents held at
ANZ bank
|
High
|
2,270,550
|
6,847,711
|
|
Bank guarantee held at ANZ
bank
|
High
|
28,549
|
48,154
|
|
Trade and other
receivables
|
High
|
391,942
|
200,706
|
|
Other assets
|
High
|
37,263
|
34,697
|
|
Advances to associate
|
High
|
8,430,289
|
8,418,872
|
|
|
|
13,615,418
|
17,595,380
|
|
|
|
|
|
NOTE 21: FINANCIAL RISK MANAGEMENT
(CONTINUED)
(iii)
Liquidity risk
Liquidity risk is the risk that
the entity will not be able to meet its financial obligations as
they fall due. The objective of the Group is to maintain sufficient
liquidity to meet commitments under normal and stressed
conditions.
Prudent liquidity risk management
implies maintaining sufficient cash and marketable securities, and
the availability of funding through an adequate amount of committed
credit facilities. The Group aims at maintaining flexibility in
funding by maintaining adequate reserves of liquidity.
The following are the contractual
maturities of financial assets and financial liabilities, including
estimated interest receipts and payments and excluding the impact
of netting arrangements.
|
|
Carrying
Amount
|
Contractual Cash
flows
|
<3
months
|
3-6 months
|
6-24
months
|
>24
months
|
|
As
at 30 June 2024
|
$
|
$
|
$
|
$
|
$
|
$
|
|
Financial assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
4,727,375
|
4,727,375
|
4,727,375
|
-
|
-
|
-
|
|
Trade and other
receivables
|
391,942
|
391,942
|
391,942
|
-
|
-
|
-
|
|
Other assets
|
65,812
|
65,812
|
37,263
|
-
|
28,549
|
-
|
|
Advances to associate
|
8,430,289
|
8,430,289
|
-
|
-
|
-
|
8,430,289
|
|
Cash inflows
|
13,615,418
|
13,615,418
|
5,156,580
|
-
|
28,549
|
8,430,289
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
359,859
|
359,859
|
359,859
|
-
|
-
|
|
|
Lease liabilities
|
164,178
|
164,178
|
6,576
|
13,746
|
96,188
|
47,668
|
|
Cash outflows
|
524,037
|
524,037
|
366,435
|
13,746
|
96,188
|
47,668
|
|
|
|
|
|
|
|
|
|
|
Carrying
Amount
|
Contractual Cash
flows
|
<3
months
|
3-6 months
|
6-24
months
|
>24
months
|
|
As
at 30 June 2023
|
$
|
$
|
$
|
$
|
$
|
|
|
Financial assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
8,892,951
|
8,892,951
|
8,892,951
|
-
|
-
|
-
|
|
Trade and other
receivables
|
200,706
|
200,706
|
200,706
|
-
|
-
|
-
|
|
Other assets
|
82,851
|
82,851
|
34,697
|
-
|
48,154
|
-
|
|
Advances to associate
|
8,418,872
|
8,418,872
|
-
|
-
|
-
|
8,418,872
|
|
Cash inflows
|
17,595,380
|
17,595,380
|
9,128,354
|
-
|
48,154
|
8,418,872
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
818,977
|
818,977
|
818,977
|
-
|
-
|
-
|
|
Lease liabilities
|
40,775
|
40,775
|
12,047
|
12,201
|
16,527
|
-
|
|
Cash outflows
|
859,752
|
859,752
|
831,024
|
12,201
|
16,527
|
-
|
|
|
|
|
|
|
|
|
NOTE 21: FINANCIAL RISK MANAGEMENT
(CONTINUED)
(iii)
Interest rate risk
From time to time the Group has
significant interest-bearing assets, but they are as a result of
the timing of equity raising and capital expenditure rather than a
reliance on interest income. The interest rate risk arises on the
rise and fall of interest rates. The Group's exposure to interest
rate risk, which is the risk that a financial instrument's value
will fluctuate as a result of changes in market interest rates and
the effective weighted average interest rate for each class of
financial assets and financial liabilities comprises:
|
As
at 30 June 2024
|
Weighted Average Interest
Rate
|
Floating Interest
Rate
|
Fixed Interest
Rate
|
Non-interest
bearing
|
Total
|
|
|
|
Financial assets
|
%
|
$
|
$
|
$
|
$
|
|
|
Cash and cash equivalents
|
0.905%
|
2,990,454
|
1,736,921
|
-
|
4,727,376
|
|
|
Trade and other
receivables
|
|
-
|
-
|
391,942
|
391,942
|
|
|
Bank guarantee
|
|
-
|
28,549
|
-
|
28,549
|
|
|
Other assets
|
|
-
|
-
|
37,263
|
37,263
|
|
|
Advances to associate
|
8.8%
|
-
|
8,430,289
|
-
|
8,430,289
|
|
|
|
|
2,990,454
|
10,195,759
|
429,205
|
13,615,419
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
|
-
|
-
|
359,859
|
359,859
|
|
|
Lease liabilities
|
|
-
|
164,178
|
-
|
164,178
|
|
|
|
|
-
|
164,178
|
359,859
|
524,037
|
|
|
|
|
|
|
|
|
|
|
As
at 30 June 2023
|
Weighted Average Interest
Rate
|
Floating Interest
Rate
|
Fixed Interest
Rate
|
Non-interest
bearing
|
Total
|
|
|
|
Financial assets
|
%
|
$
|
$
|
$
|
$
|
|
|
Cash and cash equivalents
|
1.05%
|
-
|
2,134,526
|
6,758,425
|
8,892,951
|
|
|
Trade and other
receivables
|
|
-
|
-
|
200,706
|
200,706
|
|
|
Bank guarantee
|
|
-
|
48,154
|
-
|
48,154
|
|
|
Other assets
|
|
-
|
-
|
34,697
|
34,697
|
|
|
Advances to associate
|
8.8%
|
-
|
8,418,872
|
-
|
8,418,872
|
|
|
|
|
-
|
10,601,552
|
6,993,828
|
17,595,380
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
|
-
|
-
|
818,977
|
818,977
|
|
|
Lease liabilities
|
|
-
|
40,775
|
-
|
40,775
|
|
|
|
|
-
|
40,775
|
818,977
|
859,752
|
|
|
|
|
|
|
|
|
|
Cash flow sensitivity analysis for
variable rate instruments
A change of 100 basis points in
the interest rates at the reporting date would have increased or
decreased the Group's equity and profit or loss by $29,905 (2023:
$21,345).
NOTE 21: FINANCIAL RISK MANAGEMENT
(CONTINUED)
(iv) Net fair
value of financial assets and liabilities
The net fair value of cash and cash
equivalents and non-interest-bearing monetary assets and financial
liabilities approximates their carrying values.
NOTE 22: CONTROLLED
ENTITIES
Subsidiaries of European Metals
Holdings Limited
|
Controlled entity
|
Country of
Incorporation
|
Class of
Shares
|
Percentage
Owned
|
|
|
2024
|
2023
|
|
European Metals UK Limited
(EMH UK)
|
United
Kingdom
|
Ordinary
|
100%
|
100%
|
|
EMH (Australia) Pty Ltd
|
Australia
|
Ordinary
|
100%
|
100%
|
NOTE 23: PARENT ENTITY DISCLOSURE
The following information has been
extracted from the books and records of the parent, European Metals
Holdings Limited, and has been prepared in accordance with
Australian Accounting Standards.
|
|
2024
|
2023
|
|
|
$
|
$
|
|
ASSETS
|
|
|
|
Current assets
|
5,156,582
|
9,128,354
|
|
Non-current assets
|
20,023,040
|
8,511,087
|
|
TOTAL ASSETS
|
25,179,621
|
17,639,441
|
|
|
|
|
|
LIABILITIES
|
|
|
|
Current liabilities
|
709,160
|
864,563
|
|
Non-current liabilities
|
118,590
|
84,051
|
|
TOTAL LIABILITIES
|
827,750
|
948,614
|
|
NET
ASSETS
|
24,351,871
|
16,690,827
|
|
|
|
|
|
EQUITY
|
|
|
|
Issued capital
|
58,886,707
|
47,881,352
|
|
Reserves
|
12,983,323
|
13,837,650
|
|
Accumulated losses
|
(47,518,159)
|
(45,028,175)
|
|
TOTAL EQUITY
|
24,351,871
|
16,690,827
|
|
|
-
|
-
|
Profit or Loss and Other Comprehensive
Income
|
Loss for the year
|
(2,491,091)
|
(4,094,183)
|
|
Total comprehensive loss
|
(2,491,091)
|
(4,094,183)
|
Guarantees
There are no guarantees entered
into by European Metals Holdings Limited for the debts of its
subsidiaries as at 30 June 2024.
NOTE 23: PARENT ENTITY DISCLOSURE
(CONTINUED)
Contingent liabilities
There are no contingent
liabilities of the parent as at 30 June 2024 and 30 June
2023.
Commitments
There were no commitments for the
parent as at 30 June 2024 and 30 June 2023.
Material accounting policy information
The accounting policies of the
parent entity are consistent with those of the consolidated entity,
as disclosed in note 1, except for the following:
- Investments in subsidiaries are accounted for at cost, less
any impairment, in the parent entity.
NOTE 24: CAPITAL COMMITMENTS
There are no capital commitments
for the Group as at 30 June 2024 and 30 June 2023.
NOTE 25: CONTINGENT LIABILITIES
There are no contingent
liabilities for the Group as at 30 June 2024 and 30 June
2023.
NOTE 26: SIGNIFICANT EVENTS AFTER THE REPORTING
DATE
On 31 July 2024, and post the
reporting period, the Company provided a further project update
(refer to the Company's ASX/ AIM release dated 31 July 2024)
(Cinovec
Lithium Project Update). The
Company advised that the timeline for the completion of the DFS and
therefore construction of the Cinovec lithium processing plant
continue to be worked on. Given the change to the location of the
lithium processing plant from Dukla to Prunéřov, additional
geotechnical work is currently underway to confirm the optimal
construction method and layout at the new site. Results from this
geotechnical work are expected to be available at the end of
September. DRA is then expected to provide a detailed timeline and
begin the DFS finalisation program of work.
The Project team continues to
progress several DFS-related programs on the Front-End Comminution
and Beneficiation circuit ("FECAB") and LCP to improve the overall
flowsheet which are expected to positively impact Project
economics.
