Index to Notes to the consolidated financial statements

Note		Contents
1		General information
2		Significant accounting policies
3		Critical accounting judgments and key sources of estimation uncertainty
4		Parent entity disclosure
5		Profit / loss for the year continuing operations
6		Gain on demerger
7		Discontinued operations
8		Income taxes
9		Key management personnel compensation
10		Share based payments
11		Trade and other receivables
12		Other financial assets
13		Exploration and evaluation expenditure
14		Property, plant and equipment
15		Trade and other payables
16		Provisions
17		Issued capital
18		Reserves
19		Earnings per share
20		Commitments for expenditure
21		Leases
22		Joint arrangements
23		Investment in associates
24		Subsidiaries
25		Segment information
26		Related party disclosures
27		Auditor's remuneration
28		Notes to the statement of cash flows
29		Financial instruments
30		Contingent liabilities
31		Events after the reporting period

 

 

1.    General information

Neometals Ltd is a limited public company incorporated in Australia and listed on the Australian Securities Exchange. The principal activities of the Consolidated Entity are development and commercialisation of environmentally-friendly processing technologies. Neometals Ltd is the ultimate parent.

Registered office and principal place of business

Level 1, 1292 Hay St, West Perth WA 6005             

2.    Significant accounting policies

       Statement of compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law.  The financial statements comprise the consolidated financial statements of the Consolidated Entity, comprising Neometals Ltd and its controlled entities. For the purpose of preparing the financial statements the consolidated entity is a for-profit entity.

Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Company and the Group comply with International Financial Reporting Standards ("IFRS").

The financial statements were authorised for issue by the directors of Neometals Ltd on 29 September 2023.

Basis of preparation

The financial report has been prepared on a going concern basis. These accounting policies are consistent with Australian Accounting Standards and with IFRS.

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Boards ("AASB") that are relevant to its operations and effective for the current reporting period beginning 1 July 2022.

The financial report has been prepared on the basis of historical cost except for the revaluation of certain non-financial assets and financial instruments.  Cost is based on the fair values of the consideration given in exchange for assets.  All amounts are presented in Australian dollars, unless otherwise noted. 

Going concern

The Directors believe that Neometals Ltd will continue as a going concern, and as a result the financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The Group incurred losses after tax from continuing operations of $34,804,369 (30 June 2022: $11,167,939) and experienced net cash outflows from operating and investing activities of $35,330,442 (30 June 2022: $37,471,376) for the year ended 30 June 2023. As at 30 June 2023 the Group had cash and cash equivalents of $24,438,695 (30 June 2022: $60,158,159 and net current assets of $23,735,845 (30 June 2022: $59,244,060).

The directors recognise that additional funding is required to meet the Group's budgeted ongoing activities. The directors have prepared a cash flow forecast for the period ending 30 September 2024 which indicates minimum funding of $15 million will be required progressively from February 2024 by way of debt, equity or other forms of funding to continue to progress its projects through to 30 September 2024. The forecast assumes expenditures on the development and expansion of all of the Group's core projects including required expenditures to advance the Group's Vanadium Recovery and Barrambie Titanium/Vanadium projects towards a final investment decision. However, the cash flow forecast does not assume that development activities commence in relation to any of the Group's projects in the period ending 30 September 2024. Further, Neometals has the ability to defer discretionary expenditure should adequate funding not be secured by February 2024, however, additional funding will still be required during the period to 30 September 2024.

Should a final investment decision be made with respect to the Group's projects, the cash flow forecast will be updated to identify any additional funding required for development, be this in the form of debt, equity or other forms of funding, or a combination of these options.

Based on the advanced nature of discussions with various parties and the directors' expectation that the additional funding will be secured within the required timeframe, the directors reasonably believe that they will achieve the matters set out above and therefore the going concern basis of preparation is appropriate.

Should the Group be unable to achieve the additional funding referred to above, there is a material uncertainty that may cast significant doubt as to whether the Group will be able to continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course of business.

No adjustments have been made to the financial statements relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.

Standards and interpretations adopted in the current year

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 July 2022.

New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group include:

·      AASB 2020-3 Amendments to Australian Accounting Standards - Annual Improvements 2018-2020 and Other Amendments

·      AASB 2021-7 Amendments to Australian Accounting Standards - Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections

Standards and interpretations issued but not yet effective

At the date of authorisation of the financial statements, the following Australian Accounting Standards and Interpretations have been issued or amended but are not yet effective and have not been adopted by the Group for the year ended 30 June 2023:

Standard		Effective for annual reporting periods beginning on or after	Expected to be initially applied in the financial year ending
□	AASB 2014-10 'Amendments to Australian Accounting Standards - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and AASB 2015-10 Amendments to Australian Accounting Standards - Effective Date of Amendments to AASB 10 and AASB 128'	1 January 2025	30 June 2026
□	AASB 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-Current and AASB 2020-6 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-current - Deferral of Effective Date	1 January 2024	30 June 2025
□	AASB 2021-2 Amendments to Australian Accounting Standards - Disclosure of Accounting Policies and Definition of Accounting Estimates	1 January 2023	30 June 2024

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Company for the annual reporting period ended 30 June 2023. The Company is assessing the impact of the new standards, however does not expect them to have a material impact on the Company in the current of future reporting periods and on foreseeable future transactions.

 

Critical accounting judgments and key sources of estimation uncertainty

In the application of the Group's accounting policies, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources.  The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.  Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.  Refer to note 3 for a discussion of critical judgments in applying the entity's accounting policies, and key sources of estimation uncertainty.

Significant accounting policies

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a)   Cash and cash equivalents

Cash comprises cash on hand and term deposits with a 30 day cancellation policy.  Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(b)   Employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

(c)   Foreign currency translation

Functional and presentation currency 

Items included in the financial statements of each of the group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Australian dollar ($), which is Neometals Ltd's functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. 

All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other income or other expenses.

(d)   Financial instruments issued by the company

       Debt and equity instruments

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

 

 

       Financial assets

Financial instruments and non-financial assets such as investments in unlisted entities, are initially measured at fair value plus transaction costs except where the instrument is classified 'at fair value through profit or loss' in which case transaction costs are expensed immediately.

Financial instruments are subsequently measured at fair value through profit or loss (FVTPL), amortised cost using the effective interest rate method or at cost. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Quoted prices in an active market are used to determine fair value where possible. The group does not designate any interest in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments.

Amortised cost instruments are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method.

By default, all other debt investments and equity investments are measured subsequently at fair value through profit or loss (FVTPL).

The Group classifies its financial assets into the following categories: those to be measured subsequently at fair value (either through other comprehensive income 'FVOCI' or through the income statement 'FVTPL') and those to be held at amortised cost. The classification depends on the Group's business model for managing its financial assets and the contractual terms of the cash flows.

All assets for which fair value is recognised or disclosed are categorised within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole, as follows:

-     Level 1 - Quoted market prices in active markets for identical assets.

-     Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

-     Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

External valuers are involved for valuation of unlisted investments and unquoted financial assets. Involvement of external valuers is determined annually with selection criteria including market knowledge, reputation, independence and whether professional standards are maintained.

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on investments in debt and equity instruments that are measured at amortised cost, FVTPL or at FVTOCI. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Group recognises lifetime ECL (expected credit loss) when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

There has been no change in the estimation techniques or significant assumptions made during the current reporting period in assessing the loss allowance for these financial assets.

Financial liabilities

Financial liabilities are classified as either financial liabilities 'at fair value through profit or loss' or other financial liabilities.

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as at fair value through profit or loss where the financial liability is either held for trading or it is designated as at fair value through profit or loss.

A financial liability is held for trading if:

·        It has been incurred principally for the purpose of repurchasing in the near future; or

 

·        It is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

·        It is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading is designated as at fair value through profit or loss upon initial recognition if:

·        such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

·        the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

·        it forms part of a contract containing one or more embedded derivatives, and AASB 9 'Financial Instruments' permits the entire combined contract (asset or liability) to be designated as at fair value through profit or loss.

Financial liabilities at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss.  The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability. 

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period.  The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Transaction costs on the issue of equity instruments

Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate.  Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

Interest and dividends

Interest and dividends are classified as expenses or as distributions of profit consistent with the balance sheet classification of the related debt or equity instruments or component parts of compound instruments.

(e)   Goods and service tax

Other income, expenses and assets are recognised net of the amount of goods and services tax ("GST"), except:

i)   where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

ii)   for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash flows are included in the cash flow statement on a gross basis.  The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(f)    Non-current assets held for sale

Non-current assets and their disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

 

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale. Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less cost to sell.

(g)   Impairment of non-financial assets

At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets, excluding exploration and evaluation assets, to determine whether there is any indication that those assets have suffered an impairment loss.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).  Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use.  In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.  An impairment loss is recognised in profit or loss immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years.  A reversal of an impairment loss is recognised in profit or loss immediately.

(h)   Income tax

       Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date.  Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

       Deferred tax

Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised.  However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit.  Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and joint ventures except where the consolidated entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.  Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

 

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/Consolidated Entity intends to settle its current tax assets and liabilities on a net basis.  

       Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the profit and loss statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or gain on a bargain purchase.

Tax consolidation

The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation law.  Neometals Ltd is the head entity in the tax-consolidated group.  Income tax expense/benefit, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial statements of the members of the tax consolidated group using a 'group allocation' approach based on the allocation specified in the tax funding arrangement.

The tax funding arrangement requires a notional current and deferred tax calculation for each entity as if it were a taxpayer in its own right, except that unrealised profits, distributions made and received and capital gains and losses and similar items arising on transactions within the tax consolidated group are treated as having no consequence.  Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax consolidated group are recognised by the Company (as head entity in the tax consolidated group).

Due to the existence of a tax funding arrangement between the entities in the tax consolidated group, amounts are recognised as payable to or receivable by the Company and each member of the group in relation to the tax contribution amounts paid or payable between the parent and the other members of the tax consolidated group in accordance with the arrangement. In addition to the Company own current and deferred tax amounts, the company does not recognise the losses of the members of the tax consolidated group as intercompany liabilities, it is recognised as part of the equity of the company. When the company becomes reasonably certain that it will have to reimburse the subsidiary for its losses, the company recognises an intercompany liability.

Where the tax contribution amount recognised by each member of the tax consolidated group for a particular period is different to the aggregate of the current tax liability or asset and any deferred tax asset arising from the unused tax losses and tax credits in respect of that period, the difference is recognised as a contribution from, or distribution to, equity participants.

Research & Development Tax offset

In respect of Research and Development tax offsets, the Income tax approach (AASB 112) of accounting has been utilised, where the tax benefit is presented within the tax line in the Statement of Comprehensive Income.

 

(i)    Exploration and evaluation expenditure

Exploration and evaluation expenditures, excluding general overhead, in relation to separate areas of interest are capitalised in the year in which they are incurred and are carried at cost less accumulated impairment losses where the following conditions are satisfied;

i)          the rights to tenure of the area of interest are current; and

ii)          at least one of the following conditions is also met:

-    the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or

-    exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Capitalised exploration costs for each area of interest (considered to be the cash generating unit) are reviewed each reporting date to test whether an indication of impairment exists.  If any such indication exists, the recoverable amount of the capitalised exploration costs is estimated to determine the extent of the impairment loss (if any).  The recoverable amount for capitalised exploration costs has been determined as the fair value less costs to sell by reference to an active market.  Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and transferred to capitalised development and then amortised over the life of the reserves associated with the area of interest once mining operations have commenced.

       Development expenditure

Development expenditure is recognised at cost less any impairment losses.  Where commercial production in an area of interest has commenced, the associated costs are amortised over the life of the reserves associated with the area of interest.  Changes in factors such as estimates of proved and probable reserves that effect unit-of-production calculations are dealt with on a prospective basis.

(j)    Payables

Trade payables and other accounts payable are recognised when the Consolidated Entity becomes obliged to make future payments resulting from the purchase of goods and services.

(k)   Principles of consolidation

The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the Consolidated Entity, being the Company (the parent entity) and its subsidiaries as defined in Accounting Standard AASB 10 'Consolidated Financial Statements'.  A list of subsidiaries appears in note 24 to the financial statements.  Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition.  Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill.  If, after reassessment, the fair value of the identifiable net assets acquired exceeds the cost of acquisition, the excess is credited to profit and loss in the period of acquisition. The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. In preparing the consolidated financial statements, all inter-company balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full.    

(l)    Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and impairment.  Cost includes expenditure that is directly attributable to the acquisition of the item.  In the event that settlement of all or part of the purchase consideration is deferred, costs are determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is calculated on a diminishing value basis so as to write off the net cost or other re-valued amount of each asset over its expected useful life to its estimated residual value.  The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period with the effect of any changes recognised on a prospective basis.

The following estimated useful lives are used in the calculation of depreciation:

Furniture & Fittings                                                                         5-20 years

Plant and Equipment                                                                      2-10 years

Buildings                                                                                       10-20 years

An item of property, plant and equipment is derecognised upon disposal when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit and loss.

(m)  Intangibles

Patents, trademarks, licences and customer contracts

Separately acquired patents, trademarks and licences are shown at historical cost. Patents, trademarks, licenses and customer contracts acquired in a business combination are recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated amortisation and impairment losses. 

Research and development

Research expenditure is recognised as an expense as incurred. Development expenditure is recognised as an asset as incurred if the following have been demonstrated:

-    The technical feasibility of completing the intangible asset so that it will be available for use or sale;

-    The intention to complete the intangible asset and use or sell it;

-    The ability to use or sell the intangible asset;

-    How the intangible asset will generate probable future economic benefits; and

-    The ability to measure reliably the expenditure attributable to the intangible asset during its development.

Research and development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

(n)   Provisions

Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.  Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

Provision for onerous contract

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract.

(o)  Revenue recognition

The Company recognises revenue through its equity accounted share of loss in joint venture entity Primobius GmbH from the following sources:

-     LiB disposal fees (for LiBs supplied by multiple waste aggregators delivering predominantly whole modules);

-     Sale of products from the Hilchenbach Spoke (metallic scrap, chemical intermediates and chemicals purchased by various recyclers and smelting customers); and

-     Mechanical plant and equipment package supply (Stelco and Mercedes) and associated technology licensing royalties.

For the supply of services, revenue is recognised progressively as contractually agreed services have been performed.

For the sale of products, revenue is recognised when control of the goods has been transferred to the customer, being the point at which the customer has received the goods.

(p)   Income recognition

Other income is measured at the fair value of the consideration received or receivable.

Dividend and interest revenue

Dividend revenue from investments is recognised when the shareholder's right to receive the payment has been established.  Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

(q)   Share-based payments

Equity-settled share-based payments to employees and others providing services to the Group are measured at fair value at the date of grant.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Consolidated Entity's estimate of shares that will eventually vest, with a corresponding increase in equity.

Equity-settled share-based payments transactions with parties other than employees are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counter party renders the service. The fair value of performance rights are measured using a Monte Carlo Simulation.

(r)    Leased assets

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise fixed lease payments (including in-substance fixed payments), less any lease incentives receivable.

The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the consolidated statement of financial position.

(s)     Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with AASB 5. Under the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.

An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture, any excess of the cost of the investment over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired. Any increase in percentage shareholding is accounted for in the cost of the investment.

If there is objective evidence that the Group's net investment in an associate or joint venture is impaired, the requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's investment. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with AASB 136 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint venture, or when the investment is classified as held for sale. When the Group retains an interest in the former associate or joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with AASB 9. The difference between the carrying amount of the associate or joint venture at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate or joint venture is included in the determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate or joint venture on the same basis as would be required if that associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.

The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate. There is no re-measurement to fair value upon such changes in ownership interests.

When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

When a group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the Group's consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Group.

3.   Critical accounting judgments and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 2, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources.  The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments.  Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

3.1   Critical judgments in applying the entity's accounting policies

The following are the critical judgments that management has made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

(a)    Recovery of capitalised exploration and evaluation expenditure

The Group capitalises exploration and evaluation expenditure incurred on ongoing projects. The recoverability of this capitalised exploration expenditure is entirely dependent upon returns from the successful development of mining operations or from surpluses from the sale of the projects or the subsidiary companies that control the projects.  At the point that it is determined that any capitalised exploration expenditure is definitely not recoverable, it is written off.

(b)   Share-based payments

Equity-settled share-based payments granted are measured at fair value at the date of grant. The fair value of share options is measured by use of the Monte Carlo model and requires substantial judgement. Management has made its best estimate for the effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached to the option), and behavioural considerations.

The fair value of performance rights issued during the period was made with reference to the Company's closing share price on the date of grant. Management has been required to estimate the probability that the Company will meet the performance criteria determined by the board.

(c)    Unlisted Investment

The investments in non-listed shares, being financial assets, are required to be fair valued at each reporting date in accordance with the Accounting Standards. The valuation of shares held in non-listed companies includes a number of estimates and judgements as, generally, limited information exists on such non-listed companies and their underlying assets or projects. Accordingly, management has engaged an external valuation specialist in assessing the fair value of all investments in non-listed shares.

4.         Parent entity disclosure
Financial Position	2023 $	2022 $
Assets
Current assets	26,199,905	55,115,437
Non-current assets	30,012,521	35,308,379
Total assets	56,212,426	90,423,816
Liabilities
Current liabilities	3,198,663	3,224,412
Non-current liabilities	519,747	782,904
Total liabilities	3,718,410	4,007,316
Net Assets	52,494,016	86,416,500
Equity
Issued capital	146,234,171	145,564,286
Retained earnings	(103,555,639)	(67,904,092)
Reserves
Share based payments	9,815,484	8,756,306
Total equity	52,494,016	86,416,500
Financial Performance
Profit for the year	(27,642,526)	6,392,622
Other comprehensive income	-	-
Total comprehensive (loss) / income	(27,642,526)	6,392,622

 

 

 

 

 

5.         (Loss)/profit for the year continuing operations
	Note			2023		2022
				$		$
(a)     Income
Income from operations consisted of the following items:
Other income:
Net fair value realised gain on financial assets				-		576,661
Net fair value unrealised gain on financial assets				-		233,418
Other income				5,000		102,778
Interest revenue				1,056,585		254,047
Total				1,061,585		1,166,904
(b)     Profit / (loss) before income tax
Profit / (loss) before income tax has been arrived at after charging the following expenses:
Employee benefits expense:
Equity settled share-based payments		10		(1,747,438)		(1,474,081)
Superannuation expense				(743,997)		(509,427)
Employee salaries				(7,578,550)		(5,769,680)
Other employee benefits				(1,085,524)		(1,025,754)
Total				(11,155,509)		(8,778,942)
Impairments:
Impairment (expense)/reversal of associate		23		(1,273,045)		7,079,641
Impairment (expense)/reversal of joint venture		22(i)		(2,716,703)
Total				(3,989,748)		7,079,641
Other expenses
Consultant fees				(2,564,209)		(4,740,532)
Legal fees				(1,944,369)		(1,048,363)
Travel				(1,237,470)		(418,850)
Insurances				(642,782)		-
Depreciation of non-current assets				(523,023)		-
Net fair value unrealised loss on financial assets				(512,769)		(411,720)
ASX/AIM fees				(433,444)		(457,126)
Accounting fees				(392,250)		(299,392)
Research and development expense				(303,719)		(305,577)
Net fair value realised loss on financial assets				(150,247)		(1,450,138)
Other expenses				(1,859,313)		(1,566,092)
Total				(10,563,595)		(10,697,790)

6.         Gain on demerger

 

			2023 $	2022 $
Shares issued on demerger - in specie distribution1			-	26,000,000
Less: net assets disposed2			-	(11,938,961)
Less: demerger costs			-	(1,248,630)
Attributable tax benefit			-	2,716,230
Gain on demerger3			-	15,528,639

 

 

1.   On 18 August 2021, Neometals Ltd shareholders approved the demerger of Widgie Nickel Limited ("Widgie Nickel"), a dedicated nickel exploration and development company holding Neometals' Mt Edwards nickel assets, via a $26 million capital reduction and in-specie distribution of 100% of Widgie Nickel's shares.  Neometals distributed the Widgie Nickel shares to eligible Neometals shareholders, pro rata to their shareholding in Neometals on the record date of 24 August 2021. The $26 million was the fair value of the shares distributed to shareholders and has been accounted for in accordance with interpretation 17. $9.8 million of the in specie distribution relates to a return of capital, with the remaining $16.2 million being classed as a deemed dividend.

 

2.   Expenditure incurred by the demerged entities for the period up to the time of the demerger amounted to $197,750. This amount is included within the consolidated statement of profit or loss.

 

3.   Per Class Ruling 2021/72, demerger rollover relief applied such that any capital gain from Capital Gains Tax (CGT) event A1 on the disposal of shares in Widgie Nickel Limited is disregarded for the Neometals Tax Consolidated Group. Furthermore, an exit allocable cost amount ("ACA") calculation was prepared, with the exit ACA being a positive balance such that CGT event L5 did not arise. Accordingly, there were no CGT implications for Neometals Ltd.

 

 

7.         Discontinued operations

(i) On 1 July 2021, Neometals announced intention to demerge Mt Edwards Nickel Project into a new company "Widgie Nickel Limited". Therefore, at 30 June 2021, Mt Edwards Lithium Pty Ltd was classified as a non-current asset held for sale. The results of the discontinued operation which have been included in the financial statements for the year were as follows:
	2023		2022
Results of discontinued operations	$		$
Gain/(loss) from discontinued operations	-		15,528,639
Cash flows from discontinued operations
Cashflows from investing activities	-		(505,680)
Cashflows from operating activities	-		(197,750)
Effect on the financial position of the group
Assets classified as held for sale	-		-
Liabilities associated with the assets classified as held for sale	-		-

 

 

 

 

8.         Income taxes

			2023 $	2022 $
(a)  Income tax (expense) / benefit recognised in profit or loss
Current income tax:
Current income tax charge			(591,751)	(1,797,096)
Deferred tax			(782,904)	(3,269,199)
Total tax (benefit) / expense			(1,374,655)	(5,066,295)
The prima facie income tax expense on pre-tax accounting profit
from continuing operations reconciles to the income tax benefit in the
financial statements as follows:
(Loss) / profit before income tax			(36,179,024)	(16,234,234)
Income tax calculated at 30%			(10,853,707)	(4,870,270)
Effect of income and expenses that are not deductible in determining taxable profit			3,384,630	1,601,071
Effect of income and expenses that are not recognised as deferred tax assets			6,493,707	-
Adjustments for current tax of prior periods			192,466	981,831
Refund of prior year R&D claim			(591,751)	(1,797,096)
Income tax balances in profit or loss			(1,374,655)	(5,066,295)

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable income under Australian tax law.  There has been no change in the corporate tax rate during the reporting period.

 

(b) Deferred tax balances

The net deferred tax balance as presented in the statement of financial position is detailed below:

	2023 $	2022 $
Deferred tax liabilities	(16,529,051)	(16,724,165)
Deferred tax assets	16,529,051	15,941,262
Net deferred tax balance	-	(782,904)
(c) Deferred tax assets not brought to account

At 30 June 2023 the amount of tax losses not recognised was $6,493,707 (June 2022: $1,861,059). The utilisation of tax losses depends upon the generation of future taxable profits and can be carried indefinitely while also being subject to relevant tax legislation associated with recoupment.

 

	Exploration and evaluation expenditure $	Investment in associate $	Other $	Tax losses $	Total $
Balance at 30/06/21	(13,790,940)	(1,393,059)	1,382,914	7,032,751	(6,768,334)
Charge to profit or loss - discontinued operations	2,716,231	-			2,716,231
Charge to profit or loss	(1,350,042)	(2,123,893)	(209,705)	6,952,839	3,269,199
Balance at 30/06/22	(12,424,751)	(3,516,952)	1,173,209	13,985,590	(782,904)
Charge to profit or loss	(1,784,661)	1,197,313	(281,547)	1,651,799	782,904
Balance at 30/06/23	(14,209,412)	(2,319,639)	891,662	15,637,389	-

Tax Consolidation

Relevance of tax consolidation to the consolidated entity

The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group and are therefore taxed as a single entity. The head entity within the tax-consolidated group is Neometals Ltd.  The members of the tax-consolidated group are identified at note 24.

Nature of tax funding arrangements and tax sharing agreements

Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing agreement with the head entity.  Under the terms of the tax funding arrangement, Neometals Ltd and each of the entities in the tax consolidation group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax assets of the entity.  Such amounts are reflected in amounts receivable from or payable to each entity in the tax consolidated group, and are eliminated on consolidation. The tax sharing agreement entered into between the members of the tax-consolidated group provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its payment obligations or if an entity should leave the tax-consolidated group.  The effect of the tax sharing agreement is that each member's tax liability for tax payable by the tax-consolidated group is limited to the amount payable to the head entity under the tax funding arrangement.   

 

9.    Key management personnel compensation

Details of key management personnel compensation are provided on pages 30-43 of the Directors' Report.

The aggregate compensation made to key management personnel of the Group is set out below:

	2023 $	2022 $
Short-term employee benefits	3,405,081	2,759,503
Post-employment benefits	176,750	132,137
Share-based payments	1,064,871	849,126
Total	4,646,702	3,740,766

 

 

10.   Share based payments

Neometals Ltd has an ownership based remuneration scheme for executives and employees.

Performance Rights Plan ("PRP")

In accordance with the provisions of the PRP, as approved by shareholders at the Company's AGM on 25 November 2020, employees, Non-Executive Directors and consultants may be offered performance rights at such times and on such terms as the board considers appropriate.

All performance rights issued under the PRP are measured over a three year period with an opportunity for the performance conditions to be re-measured six months later should they not vest at the first vesting date.  The vesting of the performance rights is dependent on 3 criteria:

(a)              Tranche 1 - The performance conditions of 40% of Performance Rights will be measured as at each vesting date by comparing the Company's total shareholder return (TSR) with that of a comparator group of resource companies over the relevant period.

The Performance Rights will vest depending on the Company's percentile ranking within the comparator group on the relevant Vesting Date as follows:

·              If the Company ranks below the 50^th percentile, none of the Performance Rights will vest. 

·              If the Company ranks at the 50^th percentile, 50% of the Performance Rights will vest.

·              For each 1% ranking at or above the 51st percentile, an additional 2% of the Performance Rights will vest, with 100% vesting where the Company ranks at or above the 75th percentile.

 

(b)              Tranche 2 - The performance conditions of 40% of Performance Rights will be measured as at each vesting date by calculating the Company's TSR calculated over the period commencing on the Comparator Start Date and ending on the relevant Vesting Date (Absolute TSR).

The Performance Rights will vest depending on the Company's Absolute TSR on the relevant Vesting Date as follows:

·              If the Company's Absolute TSR is less than 15%, none of the Performance Rights will vest.

·              If the Company's Absolute TSR is 15%, 50% of the Performance Rights will vest.

·              For each additional 1% TSR above 15% Absolute TSR, an additional 10% of the Performance Rights will vest, with 100% vesting where the Company's Absolute TSR is at or above 20%.

 

(c)              Tranche 3 (except for CEO) - The performance conditions of 20% of Performance Rights will be measured as at each Vesting Date as follows:

10% will vest if the combined market capitalisation of Neometals and any entity demerged from the Neometals Group and separately listed on the ASX would meet the threshold for entry into the ASX/S&P 200 Index.

10% will vest if any two of the following are at least under construction via direct investment or joint venture involvement (as assessed by the Board):

   •         a LiOH plant;

   •         a Li-Battery recycling;

   •         a Titanium / Vanadium mining or process.

(d)              Tranche 3 (CEO only) - The performance conditions of 20% of Performance Rights will be measured as at each Vesting Date as follows:

10% will vest if the combined market capitalisation of Neometals and any entity demerged from the Neometals Group and separately listed on the ASX would meet the threshold for entry into the ASX/S&P 200 Index.

10% to vest at the discretion of the Board based on the overall achievement by NMT of its strategic objectives (both financial and non-financial) under the leadership of the CEO and in delivering value to NMT's shareholders and broader stakeholders.

General terms of performance rights granted under the PRP:

·    The performance rights will not be quoted on the ASX.

·    Performance rights can only be granted to employees, Non-Executive Directors and consultants of the Company.

·    Performance rights are transferable to eligible nominees.

·    Performance rights not exercised on or before the vesting date will lapse.

·    All shares allotted upon the vesting of performance rights rank equally in all respects to all previously issued shares.

·    Performance rights confer no right to vote, attend meetings, participate in a distribution of profit or a return of capital or another participating rights or entitlements on the grantee unless and until the performance rights vest.

 

 

 

 

The following share-based payment arrangements in relation to performance rights were in existence at the end of the period:

2023	Grant date	Number	Vesting date	Expiry date	Grant date share price	Expected volatility	Risk-free rate	Fair value at grant date
Chris Reed1	7-Dec-20	1,656,754	30/06/2023	31/12/2023	0.230	50%	0.10%	0.18
Jason Carone2	7-Dec-20	666,055	30/06/2023	31/12/2023	0.230	50%	0.10%	0.18
Mike Tamlin2	7-Dec-20	755,670	30/06/2023	31/12/2023	0.230	50%	0.10%	0.18
Darren Townsend2	7-Dec-20	726,605	30/06/2023	31/12/2023	0.230	50%	0.10%	0.18
Staff and consultants2	7-Dec-20	3,457,189	30/06/2023	31/12/2023	0.230	50%	0.10%	0.18
Chris Reed	11-Oct-21	574,049	30/06/2024	31/12/2024	0.855	55%	0.34%	0.77
Jason Carone	11-Oct-21	235,885	30/06/2024	31/12/2024	0.855	55%	0.34%	0.77
Mike Tamlin	11-Oct-21	262,094	30/06/2024	31/12/2024	0.855	55%	0.34%	0.77
Darren Townsend	11-Oct-21	262,094	30/06/2024	31/12/2024	0.855	55%	0.34%	0.77
Staff and consultants	11-Oct-21	1,178,431	30/06/2024	31/12/2024	0.855	55%	0.34%	0.77
Chris Reed	5-Sep-22	239,904	30/06/2025	31/12/2025	1.310	61%	3.26%	1.15
Merrill Gray	5-Sep-22	120,554	30/06/2025	31/12/2025	1.310	61%	3.26%	1.15
Jason Carone	5-Sep-22	144,919	30/06/2025	31/12/2025	1.310	61%	3.26%	1.15
Mike Tamlin	5-Sep-22	126,804	30/06/2025	31/12/2025	1.310	61%	3.26%	1.15
Darren Townsend	5-Sep-22	126,804	30/06/2025	31/12/2025	1.310	61%	3.26%	1.15
Staff and consultants	5-Sep-22	693,110	30/06/2025	31/12/2025	1.310	61%	3.26%	1.15
Steven Cole3	4-Aug-22	54,499	30/06/2023	30/06/2023	1.205	n/a	n/a	1.10
Doug Ritchie3	4-Aug-22	40,875	30/06/2023	30/06/2023	1.205	n/a	n/a	1.10
Natalia Streltsova3	4-Aug-22	40,875	30/06/2023	30/06/2023	1.205	n/a	n/a	1.10
Jenny Purdie3	4-Aug-22	40,875	30/06/2023	30/06/2023	1.205	n/a	n/a	1.10
Les Guthrie3	4-Aug-22	8,175	30/06/2023	30/06/2023	1.205	n/a	n/a	1.10
Total		11,412,220

The valuation of the Non-executive Directors performance rights has been based on the amount of their fees that have been forgone calculated using a 5-day VWAP. The fair value of other KMP performance rights issued have been independently valued by a third party using a Monte Carlo simulation to determine fair value. A dividend yield of 0% has been applied to all share-based payments. The total expense recognised for the period arising from share-based payment transactions and accounted for as equity-settled share-based payment transactions is $1,747,438 (2022: $1,474,081).

1)   90% (1,491,079) of these performance rights have vested at 30 June 2023 and remain unexercised as at the date of this report. 10% remain unvested and will be retested at 31 December 2023.

2)   80% (4,084,415) of these performance rights have vested at 30 June 2023 of which 566,761 have been converted into ordinary shares and the remaining amount are unexercised as at the date of this report. 20% remain unvested and will be retested at 31 December 2023.

3)   100% (185,299) of these performance rights have vested at 30 June 2023 and remain unexercised.

 

The following reconciles the outstanding performance rights granted at the beginning and end of the financial year:

	2023	2022
	Performance Rights No.	Performance Rights No.
Balance at beginning of the financial year	15,293,385	16,016,135
Granted during the financial year as compensation	1,705,325	2,900,521
Exercised during the financial year (i)	(4,364,780)	(3,025,130)
Lapsed during the financial year (ii)	(956,433)	(598,141)
Forfeited during the financial year (iii)	(265,277)	-
Balance at the end of the financial year (iv)	11,412,220	15,293,385

(i)    4,364,780 shares in the Company were issued on vesting of performance rights at a fair value of $688,259 at grant (2022: 3,025,130 for a fair value of $739,538 at grant ). Refer to note 17.

(ii)    956,432 performance rights lapsed during the financial year (2022: 589,141).

(iii)      265,277 performance rights were forfeited on cessation of employment (2022: nil)

(iv)   5,760,793 of this balance is exercisable at the end of the period.

 

 

11.   Trade and other receivables

			2023 $	2022 $
Current
Sundry debtors(i)			1,008,422	208,499
Other receivables			720,376	129,186
Prepayments			302,806	180,322
Total			2,031,604	518,007

(i)    Sundry debtors is inclusive of $859,083 owed from Primobius GmbH for reimbursement of expenditure paid for by Neometals.

 

 

12.   Other financial assets
			2023 $	2022 $
Current
Financial assets measured at FVTPL(i)			763,650	2,229,500
Total Current			763,650	2,229,500
Non-current
Financial assets measured at FVTPL(ii)			4,429,896	4,429,896
Convertible note(iii)			669,075	669,075
Rental bond term deposit			200,000	200,000
Total Non-current			5,298,971	5,298,971
Total			6,062,621	7,528,471

 

(i)         The Group has invested in a portfolio of listed shares which are held for trading. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss. The valuation technique and key inputs used to determine the fair value are quoted bid prices in an active market.

(ii)         The Group has invested in a portfolio of non-listed shares which are not actively traded. The fair values of these investments have been determined by external valuation specialists using various valuation techniques, including but not limited to the market approach, the cost or net assets value approach and the income approach. Within this balance, Neometals has an equity interest in Critical Metals Limited which was valued using the income approach using a discounted cash flow model. The feasibility study results of the Vanadium Recovery Project have been used to apply the methodologies under the income approach of valuation using the discounted cashflow methodology. As (unadjusted) quoted prices in active markets are unavailable, consideration was also given to precedent transactions involving the sale of the company's shares, as a basis to assess the value of the equity investment.

(iii)        The Group has invested US$500,000 in a financing round for private US start up, Tyfast Energy Corp. The investment is by way of convertible note providing the Group with the ability to obtain a minority equity stake in Tyfast.

 

13.       Exploration and evaluation expenditure
		Consolidated
		Capitalised exploration and evaluation expenditure $
Gross carrying amount
Balance at 30 June 2021		42,079,554
Additions		5,096,915
Balance at 30 June 2022		47,176,469
Additions		5,948,962
Balance at 30 June 2023		53,125,431
Accumulated impairment
Balance at 30 June 2021		5,760,720
Balance at 30 June 2022		5,760,720
Balance at 30 June 2023		5,760,720
Net book value
As at 30 June 2022		41,415,749
As at 30 June 2023		47,364,711

The recovery of exploration expenditure carried forward is dependent upon the discovery of commercially viable mineral and other natural resource deposits, their development and exploration, or alternatively their sale.

14.   Property, plant and equipment

	Consolidated
	Plant and equipment at cost $
Gross carrying amount
Balance at 30 June 2021	1,022,197
Additions	210,818
Balance at 30 June 2022	1,233,015
Additions	454,133
Written off	(147,524)
Balance at 30 June 2023	1,539,624
Accumulated depreciation
Balance at 30 June 2021	431,482
Depreciation expense	151,401
Balance at 30 June 2022	582,883
Depreciation expense	190,205
Written off	(110,733)
Balance at 30 June 2023	662,355
Net book value
As at 30 June 2022	650,132
As at 30 June 2023	877,269

 

 

15.   Trade and other payables

			2023 $	2022 $
Trade payables			322,691	916,809
Accrued expenses			1,868,175	1,319,523
			2,190,866	2,236,332

The average credit period on purchases is 30 days.  No interest is charged on the trade payables. The Group has financial risk management policies in place to help ensure that all payables are paid within the settlement terms.

 

 

 

16.  Provisions
			2023 $	2022 $
Current
Annual leave			847,923	682,334
Long service leave			173,690	371,184
Total current			1,021,613	1,053,518
Non-current
Long service leave			72,685	-
Total non-current			72,685	-
Total			1,094,298	1,053,518

 

 

 

17.   Issued capital

			2023 $	2022 $
552,741,176 fully paid ordinary shares (2022: 548,376,396)			146,234,171	145,564,286

 

	2023		2022
	No.	$	No.	$
Fully paid ordinary shares
Balance at beginning of financial year	548,376,396	145,564,286	545,351,266	154,634,997
Share issue costs	-	(18,374)	-	(7,021)
Return of capital	-	-		(9,803,228)
Other share based payments (see note 10)	4,364,780	688,259	3,025,130	739,538
Balance at the end of the financial year	552,741,176	146,234,171	548,376,396	145,564,286

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Share options

At balance date there were no share options in existence over ordinary shares (2022: nil).

Performance rights

At balance date there were 11,412,220 performance rights in existence over ordinary shares (2022: 15,293,385).

 

 

18.   Reserves

The share-benefits reserve arises on the grant of share options and performance rights for the provision of services by consultants and to executives and employees under the employee share option plan, performance rights plan, employment contracts or as approved by shareholders. Amounts are transferred out of the reserve and into issued capital when the options are exercised or when shares are issued pursuant to the terms of the performance rights. Further information about share-based payments to employees is provided in note 10 to the financial statements.

			2023 $	2022 $
Share based payments reserve:
Balance at the beginning of the financial year			8,455,957	7,721,414
Increase in share based payments			1,747,438	1,474,081
Amounts transferred to share capital on exercise			(688,259)	(739,538)
Balance at the end of the financial year			9,515,136	8,455,957
Convertible note reserve:
Balance at the beginning of the financial year			300,349	300,349
Balance at the end of the financial year			300,349	300,349
Investment revaluation reserve:
Balance at the beginning of the financial year			1,019,637	1,019,637
Balance at the end of the financial year			1,019,637	1,019,637
Total Reserves			10,835,122	9,775,943

 

 

 

19.   Earnings per share

			2023 Cents per share	2022 Cents per share
Basic earnings per share:
Continuing operations			(6.30)	(2.04)
Continuing and discontinued operations			(6.30)	0.80
Diluted earnings per share:
Continuing operations			(6.30)	(2.04)
Continuing and discontinued operations			(6.30)	0.79

Basic and diluted profit / (loss) per share

The profit / (loss) and weighted average number of ordinary shares used in the calculation of basic and diluted profit / (loss) per share are as follows:

			2023 $	2022 $
Profit / (loss) (a)
Continuing operations			(34,804,369)	(11,167,939)
Continuing and discontinued operations			(34,804,369)	4,360,700
			2023 No.	2022 No.
Weighted average number of ordinary shares for the purpose of basic profit / (loss) per share			552,167,746	548,285,227
Weighted average number of ordinary shares for the purpose of diluted profit / (loss) per share			552,167,746	550,375,191

(a) Profit / (loss) used in the calculation of profit / (loss) per share reconciles to net profit / (loss) in the consolidated statement of comprehensive income.

 

20.   Commitments for expenditure

(a)   Exploration and evaluation expenditure commitments     

The Consolidated Entity holds mineral exploration licences in order for it to undertake its exploration and evaluation activities. To continue to hold tenure over these areas the Group is required to undertake a minimum level of expenditure on or in relation to the leases. Minimum expenditure commitments for the exploration and mining leases for the 2023 financial year are outlined in the table below.

			2023 $	2022 $
Exploration expenditure commitments
Not longer than 1 year(i)			707,509	676,885

(i)    Due to the nature of this expenditure, in that the expenditure commitments may be reduced by the relinquishment of tenements, estimates for the commitment have not been forecast beyond June 2024.

(b)   Joint venture commitments          

Pursuant to the shareholders agreement providing shareholders funding, in July 2023, Neometals subsidiary Ecometals Pty Ltd entered into a shareholder loan agreement to provide Recycling Industries Scandinavia AB $725,000. which is to be repaid in full, together with accrued interest, on 31 October 2023. The loan attracts a fixed interest rate of 8% per annum. The Borrower shall use the Loan for the purposes of continuing evaluation activities.

In addition, $1,143,956 has been committed to the Reed Advanced Materials joint venture as part of ongoing funding requirements.

 

 

21.  Leases

	Leasing arrangements
	Leases relate to the lease of commercial premises in West Perth, Welshpool, and a photocopier. The lease agreement for the Company's West Perth premises was entered into on 1 July 2019 for a 48 month period expiring on 30 June 2023, this has been renewed until 30 June 2026. The lease of a photocopier is for a period of 12 months expiring in June 2023. The Welshpool lease expired in February 2023 and was renewed until February 2026. A lease was entered into in June 2023 for another floor in the West Perth office until 30 June 2026. The commitments are based on the fixed monthly lease payment.
				30 June 2023
	Right-of-use assets			Buildings	Equipment	Total
				$	$	$
	Cost			1,813,441	9,044	1,822,485
	Accumulated Depreciation			(917,751)	(9,044)	(926,795)
	Carrying Amount			895,690	-	895,690
				30 June 2023
	Lease liability			Buildings	Equipment	Total
				$	$	$
	Current			285,625	-	285,625
	Non-current			652,049	-	652,049
	Total			937,674	-	937,674
				30 June 2022
	Right-of-use assets			Buildings	Equipment	Total
				$	$	$
	Cost			878,200	9,044	887,244
	Accumulated Depreciation			(593,978)	-	(593,978)
	Carrying Amount			284,222	9,044	293,266
				30 June 2022
	Lease liability			Buildings	Equipment	Total
				$	$	$
	Current			362,712	9,044	371,756
	Non-current			-	-	-
	Total			362,712	9,044	371,756
					2023 $	2022 $
	Amounts recognised in profit and loss
	Depreciation expense on right-of-use asset				332,817	305,725
	Interest expense on lease liabilities				26,999	19,783
Total					359,816	325,508

 

 

22.   Joint arrangements 

 

Name of operation	Principal activity	Interest
		2023 %	2022 %
Reed Advanced Materials Pty Ltd(i)	Evaluation of lithium hydroxide process	70	70

The Consolidated Entity's interest in assets employed in the above joint ventures is detailed below.

(i)    Reed Advanced Materials Pty Ltd ("RAM")

On 6 October 2015 Neometals and Process Minerals International Pty Ltd entered into a shareholders agreement for the purposes of establishing and operating a joint venture arrangement through RAM to operate a business of researching, designing and developing the capabilities and technology relating to the processing of lithium hydroxide.  Following the execution of the shareholders agreement RAM was held 70:30 between Neometals and Process Minerals International.

Summarised financial information for the joint venture:	2023 $	2022 $
Carrying value of investment in the joint venture	1	1
Opening loan to joint venture	350,000	70,000
Loan to joint venture during the period	2,366,703	280,000
Impairment of loan to joint venture	(2,716,703)	-
Closing loan to joint venture	-	350,000
Share of loss of joint venture not recognised in profit or loss	(1,532,266)	(176,242)
Reed Advanced Materials Pty Ltd Summary Balance Sheet	2023 $	2022 $
Current assets	1,332,031	199,505
Non-current assets	678,909	612,399
Current liabilities	(46,052)	(38,954)
Non-current liabilities	(6,062,571)	(2,681,568)

 

 

 

Name of operation	Principal activity	Interest
		2023 %	2022 %
Primobius GmbH(ii)	Lithium battery recycling	50	50

The Consolidated Entity's interest in assets employed in the above joint ventures is detailed below.

(ii)        Primobius GmbH

On 31 July 2020, Neometals and SMS group GmbH entered into a formal agreement to establish a 50:50 JV ('Primobius GmbH') to commercialise Neometals proprietary lithium battery recycling process.

Summarised financial information for the joint venture:	2023 $	2022 $
Opening balance of investment in joint venture	5,458,508	2,811,338
Cash contributions	3,091,947	3,519,837
Share of loss of joint venture recognised in profit or loss	(3,851,175)	(872,667)
Carrying value of investment in the joint venture	4,699,280	5,458,508
Primobius GmbH Summary Balance Sheet	2023 $	2022 $
Current assets(a)	6,200,733	3,489,421
Non-current assets	8,667,753	9,280,979
Current liabilities	(5,307,806)	(2,438,582)
Non-current liabilities	-	(20,826)

 

Revenue	1,567,123	-
Expenses(b)	(9,269,473)	(1,745,334)
Loss from continuing operations	(7,702,350)	(1,745,334)
Share of loss of joint venture recognised in profit or loss	(3,851,175)	(872,667)

 

^(a)  The current asset balance is inclusive of cash and cash equivalents of $5,566,896 (2022: 3,488,429)

^(b)  The expenses balance is inclusive of depreciation of $2,472,877 (2022: 908,331)

 

 

Name of operation	Principal activity	Interest
		2023 %	2022 %
Recycling Industries Scandinavia AB(iii)	Vanadium recovery	72.5	-

The Consolidated Entity's interest in assets employed in the above joint ventures is detailed below.

(iii)       Recycling Industries Scandinavia AB ("RISAB")

In March 2023, Neometals and Critical Metals Ltd executed an agreement to formalise a 50:50 Vanadium Recovery Project JV (RISAB). In April 2023, Neometals' interest in RISAB increased to 72.5% following additional equity contributions of $3.0 million. Despite holding 72.5%, joint control continued to exist and accordingly the investment in RISAB was accounted for using the equity method prescribed under AASB 128. An additional equity contribution was made in June 2023 for $1,090,590 and Critical Metals Ltd contributed their pro rata share which saw Neometals' interest in RISAB remaining unchanged.

 

Summarised financial information for the joint venture:	2023 $	2022 $
Opening balance of investment in joint venture	-	-
Cash contributions	4,090,590	-
Share of (profit)/loss of joint venture recognised in profit or loss	(3,447,626)	-
Carrying value of investment in the joint venture	642,964	-
Recycling Industries Scandinavia AB Summary Balance Sheet	2023 $	2022 $
Current assets	2,200,633	-
Non-current assets	3,216,090	-
Current liabilities	(2,023,294)	-
Non-current liabilities	(4,375,058)	-

 

Name of operation	Principal activity	Interest
		2023 %	2022 %
ACN 630 589 507 Pty Ltd(iv)	Lithium-ion battery recycling IP	50	100

The Consolidated Entity's interest in assets employed in the above joint ventures is detailed below.

(iv)       ACN 630 589 507 Pty Ltd

On 8 December 2022, Neometals issued 50% equity interest in battery recycling IP holding company, ACN 630 589 507 Pty Ltd ("ACN 630"), to SMS group GmbH on an unconditional basis. As a result of this, ACN 630 left the Neometals consolidated group, which resulted in a $212,473 loss on disposal of subsidiary.

Summarised financial information for the joint venture:	2023 $	2022 $
Opening balance of investment in joint venture	-	-
Cash contributions	106,801	-
Share of (profit)/loss of joint venture recognised in profit or loss	-	-
Carrying value of investment in the joint venture	106,801	-

 

 

ACN 630 589 507 Pty Ltd Summary Balance Sheet	2023 $	2022 $
Current assets	119,077	-
Non-current assets	275,722	-
Current liabilities	(10,000)	-
Non-current liabilities	(213,598)	-

 

23.  Investment in associate

Hannans Limited

Name of operation	Principal activity	Interest
		2023 %	2022 %
Hannans Limited	Lithium-ion battery recycling	26.09	32.43

The above associate is accounted for using the equity method in this consolidated financial report.

Summarised information for the associate:

				2023 $	2022 $
Opening carrying value of investment in associate				13,668,977	4,869,567
Shares purchased / (disposed of) at fair value				694,515	2,038,056
Share of loss of associate recognised in profit or loss(i)				(3,412,514)	(318,287)
Impairment (expense)/reversal(ii)				(1,273,045)	7,079,641
Closing carrying value of investment in associate(III)				9,677,933	13,668,977

(i)         The equity accounted share of the associate's loss as adjusted as if applying the same accounting policies as Neometals is credited against the carrying value of the investment in the associate.

(ii)         In the current financial year, the carrying value of the investment in associate has been impaired down to its carrying value on per share basis. In 2023 resulting in a $1,273,045 expense (2022: reversal of $7,079,641)

(iii)        The fair value of the Groups investment in Hannans as at 30 June 2023 on a per share basis is $9,677,932 (2022: $17,746,812)

 

				2023 No.	2022 No.
Shares held in Hannans Limited				879,812,014	845,086,264

 

Hannans Ltd Summary Balance Sheet	2023 $	2022 $
Current assets	3,681,473	4,315,415
Non-current assets	13,095,013	2,400,089
Current liabilities	(142,230)	(418,853)
Non-current liabilities	-	-

 

24.   Subsidiaries

 

Name of entity	Country of incorporation	Ownership interest
		2023 %	2022 %
Parent entity
Neometals Ltd	Australia
Subsidiaries
Australian Titanium Pty Ltd (formerly Australian Vanadium Corporation (Holdings) Pty Ltd)	Australia	100	100
Alphamet Management Pty Ltd (formerly Australian Vanadium Corporation (Investments) Pty Ltd)	Australia	100	100
Inneovation Pty Ltd (formerly Australian Vanadium Exploration Pty Ltd)	Australia	100	100
Neometals Energy Pty Ltd (formerly Barrambie Gas Pty Ltd)	Australia	100	100
Neomaterials Pty Ltd (formerly GMK Administration Pty Ltd)	Australia	100	100
Neometals Investments Pty Ltd (formerly Gold Mines of Kalgoorlie Pty Ltd)	Australia	100	100
Urban Mining Pty Ltd (formerly Mount Finnerty Pty Ltd)	Australia	100	100
Adamant Technologies Pty Ltd	Australia	100	100
Avanti Materials Ltd	Australia	100	100
ACN 630 589 507 Pty Ltd(i)	Australia	50	100
Ecometals Pty Ltd	Australia	100	100

All of these companies are members of a tax consolidated group. Neometals Ltd is the head entity of the tax consolidated group.

(i)         Refer to note 22 for further information on change in ownership percentage.

 

25.   Segment information

Basis for segmentation

AASB 8 Operating Segments requires the presentation of information based on the components of the entity that management regularly reviews for its operational decision making. This review process is carried out by the Chief Operating Decision Maker ("CODM") for the purpose of allocating resources and assessing the performance of each segment. The amounts reported for each operating segment is the same measure reviewed by the CODM in allocating resources and assessing performance of that segment.

For management purposes, the Group operates under three operating segments comprised of the Group's lithium, titanium/vanadium and 'other segments' which comprises other minor exploration projects and mineral process technology businesses. The titanium/vanadium operating segment is separately identified given it possess different competitive and operating risks and meets the quantitative criteria as set out in the AASB 8.  The 'other segments' category is the aggregation of all remaining operating segments given sufficient reportable operating segments have been identified.

The segment information reported on the next page does not include any amounts for this discontinued operation for the current and prior periods, which is described in more detail in note 7.

 

 

For the year ended 30 June 2023

	Reportable operating segments	Lithium $	Vanadium & Titanium $	Other $	Corporate $	Total $
Revenue from external customers		-	-	-	-	-
Cost of sales		-	-	-	-	-
Gross profit/(loss)		-	-	-	-	-
Other income		-	-	-	1,061,585	1,061,585
Share of loss of JV and associate		(3,851,175)	(3,447,626)	(3,412,514)	-	(10,711,315)
Impairment on investment in associate & JV		-	-	(3,989,748)	-	(3,989,748)
Depreciation and Amortisation		-	(110,471)	-	(412,551)	(523,022)
Total expenses		(213,765)	(3,275,223)	(670,161)	(17,857,375)	(22,016,524)
Profit/(loss) before tax		(4,064,940)	(6,833,320)	(8,072,423)	(17,208,341)	(36,179,024)
Loss for the year from discontinued operations		-	-	-	-	-
Income tax benefit		-	-	-	1,374,655	1,374,655
Consolidated profit/(loss) after tax		(4,064,940)	(6,833,320)	(8,072,423)	(15,833,686)	(34,804,369)

As at 30 June 2023

Reportable operating segments	Lithium $	Vanadium & Titanium $	Other $	Corporate $	Total $
Increase/(decrease) in segment assets	(309,905)	6,414,392	(6,544,926)	(32,856,539)	(33,296,978)
Total segment assets	6,000,490	48,796,923	15,291,630	27,654,518	97,743,561
Total assets	6,000,490	48,796,923	15,291,630	27,654,518	97,743,561

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended 30 June 2022

Reportable operating segments	Lithium $	Vanadium /Titanium $	Other $	Corporate $	Total $
Revenue from external customers	-	-	-	-	-
Cost of sales	-	-	-	-	-
Gross profit/(loss)	-	-	-	-	-
Other income	-	75,000	820,079	2,068,921	2,964,000
Share of loss of JV and associate	(872,667)	-	(318,287)	-	(1,190,954)
Impairment reversal on investment in associate	-	-	7,079,641	-	7,079,641
Depreciation and Amortisation	-	(68,758)	-	(388,307)	(457,065)
Total expenses	(2,410,535)	(5,766,136)	(45,050)	(16,408,135)	(24,629,856)
Profit/(loss) before tax	(3,283,202)	(5,759,894)	7,536,383	(14,727,521)	(16,234,234)
Loss for the year from discontinued operations	-	-	-	15,528,639	15,528,639
Income tax benefit	-	-	-	5,066,295	5,066,295
Consolidated profit/(loss) after tax	(3,283,202)	(5,759,894)	7,536,383	5,867,413	4,360,700

As at 30 June 2022

Reportable operating segments	Lithium $	Vanadium /Titanium $	Other $	Corporate $	Total $
Increase/(decrease) in segment assets	5,785,912	5,550,676	(531,070)	(41,427,327)	(30,621,809)
Total segment assets	6,310,395	42,382,531	21,836,556	60,511,057	131,040,539
Total assets	6,310,395	42,382,531	21,836,556	60,511,057	131,040,539

 

 

Geographical information

The Group operates in four geographical areas being Germany, Finland, Portugal and Australia (country of domicile).

 

 

 

 

 

 

26.        Related party disclosures

 

(a)   Equity interests in related parties

       Equity interests in subsidiaries

Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 24 to the financial statements.

Equity interests in joint arrangements

Details of the percentage of ordinary shares held in joint arrangements are disclosed in note 22 to the financial statements.

(b)   Key management personnel remuneration

       Details of Key Management Personnel remuneration are disclosed on pages 36-44 of the Remuneration Report.

(c)   Key management personnel equity holdings

Fully paid ordinary shares of Neometals Ltd

2023	Balance at		Balance on		Received on		Net other		Balance at		Balance
	01/07/2022		appointment		exercise of		change		30/06/2023		held
					perf rights						nominally
	No.		No.		No.		No.		No.		No.
Non-executive directors
S. Cole	1,890,160		-		61,611		-		1,951,771		-
D. Ritchie	209,819		-		55,450		70,000		335,269		-
N. Streltsova	224,819		-		55,450		-		280,269		-
J. Purdie	330,072		-		55,450		86,210		471,732		-
L. Guthrie	220,267		-		11,090		-		231,357		-
Executive director
C. Reed	6,882,172		-		986,417		-		7,868,589		-
Other executives
M. Tamlin	535,853		-		447,769		-		983,622		-
J. Carone	515,000		-		394,668		(143,206)		766,462		-
D. Townsend	251,057				430,547		(271,199)		410,405
M. Gray	-		-		-		7,770		7,770		-
Total	11,059,219		-		2,498,452		(250,425)		13,307,246		-
2022		Balance at		Balance on	Received on	Net other		Balance at		Balance
		01/07/2021		appointment	exercise of	change		30/06/2022		held
					perf rights					nominally
		No.		No.	No.	No.		No.		No.
Non-executive directors
S. Cole		1,682,198		-	207,962	-		1,890,160		-
D. Ritchie		134,908			49,911	25,000		209,819		-
N. Streltsova		134,908			49,911	40,000		224,819		-
D. Reed (i)		39,588,900		-	-	(2,000,000)		37,588,900		-
J. Purdie		215,187		-	83,185	31,700		330,072		-
L. Guthrie		163,675		-	41,592	15,000		220,267		-
Executive director
C. Reed		6,707,189		-	668,271	(493,288)		6,882,172		-
Other executives
M. Tamlin		229,189		-	306,664	-		535,853		-
J. Carone		400,000		-	245,725	(130,725)		515,000		-
D. Townsend		272,405		-	294,870	(316,218)		251,057		-
Total		49,528,559		-	1,948,091	(2,828,531)		48,648,119		-

(1) David Reed resigned from his position as Non-Executive Director on 30 November 2021.

Share options of Neometals Ltd

No options were issued to related parties during the current period (2022: nil).

Performance rights of Neometals Ltd

In the current reporting period the Company granted 944,284 (2022: 1,573,173) performance rights to executives and KMP pursuant to the Company's Performance Rights Plan.

Further details of performance rights granted are contained in note 10 to the financial statements.

Performance rights granted to related parties

The following tables summarises information relevant to the current financial year in relation to the grant of performance rights to KMP as part of their remuneration. Performance rights are issued by Neometals Ltd.

Name	During the Financial Year
	Grant date	No.	No.	Fair value at grant date	Earliest exercise date	Consideration payable on exercise
		granted	vested
KMP:
N. Streltsova	4/08/2022	40,875	40,875	45,000	30/06/2023	-
D. Ritchie(1)	4/08/2022	40,875	40,875	45,000	30/06/2023	-
S. Cole(1)	4/08/2022	54,499	54,499	60,000	30/06/2023	-
J. Purdie	4/08/2022	40,875	40,875	45,000	30/06/2023	-
L. Guthrie	4/08/2022	8,175	8,175	9,000	30/06/2023	-
C. Reed(2)	5/09/2022	239,904	-	276,034	30/06/2025	-
J. Carone(2)	5/09/2022	144,919	-	166,744	30/06/2025	-
M. Tamlin(2)	5/09/2022	126,804	-	145,901	30/06/2025	-
D. Townsend(2)	5/09/2022	126,804	-	145,901	30/06/2025	-
M. Gray(2)	5/09/2022	120,554	-	138,709	30/06/2025	-
Total		944,284	185,299	1,077,289		-

 

(1)   At 30 June 2023 Non-Executive Directors became entitled to securities whose vesting conditions were the subject to the rules of the Performance Rights Plan.

(2)   The number of performance rights that will actually vest, if any, is determined by the Company's performance based on Neometals relative and absolute TSR compared to the comparative group of companies over a 3 year period and Business Plan strategic objectives.

 

 

Details of performance rights held by KMP and of shares issued during the financial year as a result of the vesting of performance rights:

	Grant date	Fair value of rights at grant date	Granted	Vested during the financial year	Forfeited/ lapsed during the financial year	Ordinary shares issued on exercise of rights
		$		No.	No.	No.
KMP:
C. Reed(1)	2/09/2019	141,797	1,233,021	-	246,604	986,417
J. Carone(1)	2/09/2019	56,734	493,335	-	98,667	394,668
M. Tamlin(1)	2/09/2019	64,367	559,711	-	111,942	447,769
D. Townsend(1)	2/09/2019	61,891	538,184	-	107,637	430,547
C. Reed(1)	7/12/2020	299,872	1,656,754	1,491,079	-	-
J. Carone(1)	7/12/2020	120,556	666,055	532,844	-	-
M. Tamlin(1)	7/12/2020	136,776	755,670	604,536	-	-
D. Townsend(1)	7/12/2020	131,516	726,605	581,284	-	-
C. Reed(1)	11/10/2021	442,592	574,049	-	-	-
J. Carone(1)	11/10/2021	181,867	235,885	-	-	-
M. Tamlin(1)	11/10/2021	202,074	262,094	-	-	-
D. Townsend(1)	11/10/2021	202,074	262,094	-	-	-
N. Streltsova(2)	11/10/2021	45,000	55,450	-	-	55,450
D. Ritchie(2)	11/10/2021	45,000	55,450	-	-	55,450
S. Cole(2)	11/10/2021	50,000	61,611	-	-	61,611
J. Purdie(2)	11/10/2021	45,000	55,450	-	-	55,450
L. Guthrie(2)	11/10/2021	9,000	11,090	-	-	11,090
C. Reed(1)	5/09/2022	276,034	239,904	-	-	-
J. Carone(1)	5/09/2022	166,744	144,919	-	-	-
M. Tamlin(1)	5/09/2022	145,901	126,804	-	-	-
D. Townsend(1)	5/09/2022	145,901	126,804	-	-	-
M. Gray(1)	5/09/2022	138,709	120,554
N. Streltsova(3)	4/08/2022	45,000	40,875	40,875	-	-
D. Ritchie(3)	4/08/2022	45,000	40,875	40,875	-	-
S. Cole(3)	4/08/2022	60,000	54,499	54,499	-	-
J. Purdie(3)	4/08/2022	45,000	40,875	40,875	-	-
L. Guthrie(3)	4/08/2022	9,000	8,175	8,175	-	-
Total		3,313,405	9,146,792	3,395,042	564,850	2,498,452

(1)   The number of performance rights that will actually vest, if any, is determined by the Company's performance based on Neometals TSR compared to the comparative group of companies over the 3-year period as set out in the employee's employment contract. As a result of the testing of the Company's performance over this period 3,209,743 rights vested (2022: 2,259,401).

(2)   Under the Performance Rights Plan, Non-Executive Directors were invited to forgo part of their fees for their services in exchange for performance rights. At 30 June 2023 all performance rights have vested. As a result of the testing of the Company's performance over this period 239,051 rights vested and shares were issued (2022: 432,561).

(3)   Under the Performance Rights Plan, Non-Executive Directors were invited to sacrifice part of their fees for their services in exchange for performance rights. At 30 June 2023 all performance rights have vested.

 

 

The performance rights granted entitle the grantee to one fully paid ordinary share in Neometals Ltd for nil cash consideration on satisfaction of the vesting criteria.

(d)   Transactions with other related parties

       Other related parties include:

·       The parent entity;

·       Associates;

·       Joint ventures in which the entity is a venturer;

·       Subsidiaries;

·       Key Management Personnel of the Group; and

·       Other related parties.

The Group has provided loans to its joint venture, Reed Advanced Materials Pty Ltd, and equity contributions to its joint ventures, Primobius GmbH and Recycling Industries Scandinavia AB (see note 22)

Transactions involving the parent entity

The directors elected for wholly-owned Australian entities within the Group to be taxed as a single entity from 1 July 2003.

No other transactions occurred during the financial year between entities in the wholly owned Group.

(e)   Controlling entities

The ultimate parent entity of the Group is Neometals Ltd, a company incorporated and domiciled in Australia.

 

27.   Auditors remuneration

Details of the amounts paid or payable to the auditor for the audit and other assurance services during the year are as follows:

			2023   $	2022   $
Audit services - Deloitte Touche Tohmatsu
Fees to the group auditor for the audit or review of the statutory financial reports of the Company, subsidiaries and joint operations			289,006	113,250
Fees for other assurance and agreed-upon procedures under other legislation or contractual arrangements - Australia			14,621	65,491
Fees for other assurance and agreed-upon procedures under other legislation or contractual arrangements - United Kingdom			-	760,515
Total remuneration of Deloitte Touche Tohmatsu			303,627	939,256

 

Audit services - Other firms
Fees for auditing the financial reports of any controlled entities	24,684	-
Total remuneration of other firms	24,684	-

 

28.   Notes to the statement of cash flows

(a)   Reconciliation of cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts.  Cash and cash equivalents at the end of the financial year as shown in the Cash Flow Statement is reconciled to the related items in the statement of financial position as follows:

	2023 $	2022 $
Cash and cash equivalents from continuing operations	24,438,695	60,158,159
	24,438,695	60,158,159

(b)   Reconciliation of profit / (loss) for the period to net cash flows from operating activities

			2023 $	2022 $
(Loss) / Profit for the year			(34,804,369)	4,360,700
Impairment (reversal)/expense			3,989,748	(7,079,641)
Profit on disposal of financial assets			150,247	(576,661)
Loss on disposal of subsidiary			212,473	-
Share of loss in associate			3,412,514	318,287
Share of loss in Joint Venture			7,298,801	872,667
Net (profit) / loss on financial assets measured at FVTPL			512,769	(233,418)
Interest received on investments			(1,056,585)	(254,047)
Finance costs recognised in profit or loss			29,859	76,163
Depreciation and amortisation of non-current assets			523,023	872,790
Equity settled share-based payment			1,747,437	1,474,081
Gain on disposal of discontinued operation			-	(15,528,639)
Net foreign exchange (gain)/loss			(4,204)	(34,441)
(Increase) / decrease in assets:			-
Current receivables			(1,513,597)	(266,938)
Other			49,748	29,404
Increase / (decrease) in liabilities:			-
Current payables			(131,597)	(3,000,612)
Deferred tax liability			(782,904)	(5,432,830)
Provisions			(31,905)	(674,642)
Net Cash used in operating activities			(20,398,542)	(25,077,777)

 

 

29.  Financial instruments

(a)   Financial risk management objectives

The Consolidated Entity does not enter into derivative financial instruments for speculative or hedging purposes.

 

(b)   Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.

 

(c)      Interest rate risk

The following tables detail the Group's exposure to interest rate risk:

 

2023	Weighted average effective interest rate %	Variable interest rate     %	Maturity dates			Non interest bearing     $	Total          $
			Less than 1 year     $	1-5 years     $	More than 5 years   $
Financial assets:
Cash and cash equivalents AUD	3.77%	-	24,013,096	-	-	-	24,013,096
Cash and cash equivalents EUR	0.00%	-	208,846	-	-	-	208,846
Cash and cash equivalents USD	0.00%	-	127,552	-	-	-	127,552
Cash and cash equivalents GBP	0.00%	-	89,199	-	-	-	89,199
Bond term deposits (i)	4.17%	-	200,000	-	-	-	200,000
Cash deposits trust	0.00%	-	-	-	-	-	-
Trade and other receivables	0.00%	-	-	-	-	2,031,604	2,031,604
Financial liabilities:
Trade payables(ii)	-	-	-	-	-	1,289,285	1,289,285
Lease liability	7.77%	-	285,625	652,049	-	-	937,674
(i)    The balances represent two term deposits that are restricted in their use and are classified in the current reporting period as other financial assets. Additional information on all other term deposits is provided at notes 12 and 28(b). The financial assets have contractual maturities of less than one year, however they are classified as non-current in the statement of financial position as they are not accessible to the Group due to restrictions placed on accessing the funds. (ii)    Non interest bearing liabilities are due within 30 days.
2022	Weighted average effective interest rate %	Variable interest rate     %	Maturity dates			Non interest bearing     $	Total          $
			Less than 1 year     $	1-5 years     $	More than 5 years   $
Financial assets:
Cash and cash equivalents AUD	0.40%	-	59,009,480	-	-	-	59,009,480
Cash and cash equivalents EUR	0.00%	-	531,719	-	-	-	531,719
Cash and cash equivalents USD	0.00%	-	704,839	-	-	-	704,839
Cash and cash equivalents GBP	0.00%	-	112,121	-	-	-	112,121
Bond term deposits (i)	0.40%	-	200,000	-	-	-	200,000
Cash deposits trust	0.00%	-	2,078,476	-	-	-	2,078,476
Trade and other receivables	0.00%	-	-	-	-	518,007	518,007
		-
Financial liabilities:
Trade payables	-	-	-	-	-	2,236,332	2,236,332
Lease liabilities	3.50%	-	371,756	-	-	-	371,756

(i)  The balances represent two term deposits that are restricted in their use and are classified in the current reporting period as other financial assets. Additional information on all other term deposits is provided at notes 12 and 28(b). The financial assets have contractual maturities of less than one year, however they are classified as non-current in the statement of financial position as they are not accessible to the Group due to restrictions placed on accessing the funds.

(d)   Credit risk management

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has adopted a policy of only dealing with credit-worthy counterparties and obtaining sufficient collateral where appropriate as a means of mitigating the risk of financial loss from defaults. The consolidated entity exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

The consolidated entity does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics other than the Joint Venture. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

(e)   Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and banking facilities, and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The undiscounted lease liabilities balance is $937,674, split between $285,625 with a maturity date of less than 1 year and $652,049 with a maturity date of 1-5 years.

In addition to financial liabilities in note 15, the Company is required to meet minimum spend commitments to maintain the tenure over the Company's mineral exploration areas as described in note 20.

(f)    Fair value

The carrying amount of financial assets measured at amortised cost recorded in the financial statements approximates their respective fair values.

Financial assets carried at fair value through profit or loss comprise investments predominantly in Australian listed equities. Their fair value is determined using key inputs of quoted bid prices in an active market multiplied by the number of shares held, which is Level 1 in the fair value hierarchy. Where quoted prices in an active market are unable to be used to determine fair value, alternative valuation methods are used to most accurately represent the equities fair value which for the investments held by the entity include other observable inputs and is therefore categorised as level 3 on the fair value hierarchy. 

29.  Financial instruments (continued)

Other than the investments held at fair value, the group does not hold any instruments that are measured at fair value.  There have been no transfers between fair value classes during the year. The sensitivity analysis below has been calculated based on the exposure to equity price risk at the end of the reporting period for financial assets carried at fair value through profit or loss.  A 25 percent increase and decrease has been used to assess the sensitivity of the equity price risk and represents management's assessment of a reasonably possible change in equity pricing.

If equity prices had been 25 percentage higher/lower and all other variables were held constant, the Group's profit for the year ended 30 June 2023 would decrease/increase by $190,912 (2022: 557,375).

(g)   Capital management

The board's policy is to endeavour to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Group sources any additional funding requirements from either debt or equity markets depending on the market conditions at the time the funds are sourced and the purpose for which the funds are to be used. The Group is not subject to externally imposed capital requirements.

(h) Interest rate risk management

The Group is exposed to interest rate risk as the Group has funds on deposit as security for the head office lease.

The sensitivity analysis below has been calculated based on the exposure to interest rates at the end of the reporting period.  A 50 basis point increase and decrease has been used when reporting the interest rate risk and represents management's assessment of the potential change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group's profit for the year ended 30 June 2023 would decrease/increase by $123,193 (2022: decrease/increase $301,791).  This is mainly attributable to the Group's exposure to interest rates on the maturity of its term deposits.

30.   Contingent liabilities 

The Group has no contingent liabilities as at 30 June 2023 (2022: nil)

31.   Events after the reporting period 

On 12 July 2023, Neometals announced the execution of a binding offtake agreement between Novana Oy and Glencore for the Vanadium Recovery Project.

 

On 1 August 2023, Neometals announced the successful completion by Primobius GmbH of the Battery Recycling 'Hub' Engineering cost study results for a 21,000 tonne per annum fully integrated LiB recycling plant.

 

On 22 August 2023, Neometals announced that Primobius received a purchase order for supply of a 10 tonne per day spoke with Mercedes for installation at Kuppenheim in southern Germany.

 

Other than stated above, no matters or circumstances have arisen since the end of the financial year that have significantly affected, or may significantly affect the operations, results of operations or state of affairs of the Group in subsequent financial years.