31 Aug 2021

Preliminary Final Report

ABN 25 110 150 005 APPENDIX 4E UNAUDITED PRELIMINARY FINAL REPORT YEAR ENDING 30 JUNE 202 1 Unaudited Preliminary Fin anci al Report – For the year ended 30 June 2021 Page 2 RESULTS FOR ANNOUNCEMENT TO MARKET Consolidated 30 June 20 21 30 June 20 20 Movement Movement $’000 $’000 $’000 % Revenue from continuing activities 93,834 73,243 20,591 28 .11 % Contingent consideration income (a) 10, 250 - 10,250 100 .00 % Profit/(loss) from continuing operations (b) 23,979 (12,422) 36,401 n/a Profit/(loss) from discontinued operations ( c ) 64,274 (67,918) 132,192 n/a Net profit/( loss) attributable to members 88,253 ( 80,340 ) 168,593 n/a (a) Contingent consideration income represents the $ 10 .00 million Mt Gordon copper payment receivable , plus the agreed fee of $0.25 million. (b) Profit from continuing operations includes redundancy and restructuring costs of $0.50 million incurred at the Company’s 50% owned Renison Tin Operation ( Renison ) , a nd $0.60 milli on of corporate r edundanc ies following the sale of its copper asset portfolio ( Copper Assets ) to Cyprium Metals Limited ( Cyprium ). (c) Profit from discontinued operations includes $60.00 million consideration ( Consideration Amount ) received from the sale of t he Company’s Copper Assets to Cyprium. The Consideration Amount includes $24.00 million cash, four (4) convertible notes with a face value of $9.00 million each, for an aggregate of $36.00 million (refer to ( i )) and 40.6 0 million options to acquire C yprium shares (refer to ( h )). NET TANGIBLE ASSETS PER SHARE Consolidated 30 June 202 1 30 June 20 20 Net tangible assets per share: $0. 15 $0. 06 D IVIDEND INFORMATION No dividends are proposed, and no dividends were declared or paid during the current or prior period . RESULTS OF OPERATION Renison Tin Operation (50% MLX) 30 June 20 21 30 June 20 20 Movement Movement $’000 $’000 $’000 % Revenue from continuing activities ( c ) 93,834 73,243 20,591 28 .11 % Cost of sales ( d ) (75,145) ( 70,330 ) (4,815) 6.85 % Gross profit 18,689 2,913 15,776 54 1 .47 % (d) Revenue is derived from the Company’s 50% interest in Renison . Increased tin sales and tin prices delivered a 28 .11 % increase in revenue for the year . (e) Cost of sales increased by $4.8 2 million for the year due to the following: • Royalty expense increased by $2.5 6 million to $3.9 6 million (2020: $1.40 million) ; • Plant and equipment d epreciation increased by $0.55 million to $3.78 million (2020: $3.23 million); and • E mployee costs increase d by $1. 19 million to $14.22 million (2020: $13.0 3 million) . The cost increase includes redundancy and restructuring costs of $0.50 million and the increase in onsite personnel. Unaudited Preliminary Fin anci al Report – For the year ended 30 June 2021 Page 3 P roduction performance summary for the Renison Tin Operation (50% MLX ) Physicals Unit 30 Jun 2021 30 Jun 2020 Movement Movement % UG o re mined t 405,379 424,453 (19,074) (4 .49 %) UG grade mined % Sn 1.30% 1.18% 0.12% 10 .17 % Ore processed * t 326,750 344,591 (17,841) (5 .18 %) Head grade * % Sn 1.59% 1.42% 0.17% 11.97 % Recovery % 76.48% 73.56% 2.92% 3.97 % Tin produced t 3,974 3,591 383 10.67 % Tin sold t 3,658 3,412 246 7 .21 % CONSOLIDATED FINANCIAL POSITION Consolidated 30 June 2021 30 June 2020 Movement Movement $’000 $’000 $’000 % Cash and cash equivalents : 13,472 14,095 (623) (4 .42 %) Trade and other receivables ( e ) 23,788 6,153 17,635 286.61 % Assets and liabilities classified as held for sale ( f ) 4,605 - 4,605 n/a Financial assets at fair value through profit or loss ( g ) 5,393 - 5,393 n/a Loan receivable ( h ) 38,301 - 38,301 n/a Provisions ( i ) 15,987 55,077 (39,090) (7 0.97 %) Interest bearing liabilities ( j ) 20,048 35,576 (15,528) (4 3.65 %) Net assets 139,700 51,791 87,909 169.74 % (f) Trade and other receivables include t in receivables of $9 .1 5 million and $11.0 0 million for the Mt Gordon copper payment. (g) On 25 May 2021, the Company announced the sale and spin out of its Nickel asset portfolio ( Nickel Assets ) , including the Wingellina and the Claude Hills Projects, to NICO Resources Limited. A t 30 June 2021, the Company re classified the assets and liabilities comprising its Nickel Assets as held for sale on the basis that: • T he Nickel Assets are available for immediate sale in their present condition; and • it is highly probable that their carrying value will be recovered pri marily through sale rather than through continuing use. (h) Financial assets at fair value through profit or loss represents the fair value attributed to 4 0.6 0 million options to acquire shares in Cyprium , received as part consideration for the sale of the Copper Assets. The Company uses the Black Scholes valuation model to determine the fair value of the options , with fair value movements recognised through profit or loss. (i) The loan receivable represents the fair value attributed to four (4) convertible note s with a face value of $9.00 million each, for an aggregate of $36.00 million . The convertible notes are subject to a 4% annual coupon to be capitalised and paid annually, payable in cash unless the Company elects to receive the interest in fully paid ordi nary C yprium shares. The Company estimates the fair value of the right to receive the $36.00 million cash using discounted cash flow techniques and market interest rates. The Company also adds the fair value of the conversion option, which is estimated using the Black Scholes valuation model . Fair value movements in the conversion option are recognised through profit or loss. (j) The Groups rehabilitation liabilities have decreased following t he disposal of the Copper Asset s. (k) On 14 April 2021, the Company repaid $15.50 million , representing 50% of the outstanding principal amount of its unsecured $31.00 million finance facility with Asia Cheer Trading Limited ( ACT ) . As at 30 June 2021, the ACT Loan of $15.50 million remains outstanding plus the interest accrued. Unaudited Preliminary Fin anci al Report – For the year ended 30 June 2021 Page 4 CHANGE IN CONTROL Sale of Copper Assets On 31 March 2021, the Company announced the sale of its C opper A sset portfolio to Cyprium had completed resulting in a loss of control in Paterson Copper Pty Ltd , which holds the Copper Assets through its two 100% - owned subsidiaries Nifty Copper Pty Ltd and Maroochydore Copper Pty Ltd ( Disposal Group ) . All a ssets, liabilities, income, and expenses of the Disposal Group are included in the S tatement of C omprehensive I ncome until 31 March 2021, being the date control ceased. At 31 March 2021, the Company recognised a gain on sale of its Copper Assets of $64.30 million. SIGNIFICANT EVENTS AFTER THE BALANCE DATE Receipt of Mt Gordon Copper Payment On 8 July 2021, the Company received $11 .00 million as settlement of the c onditional c opper p rice p ayment pursuant to the Mt Gordon Sale Agreement, and subsequent binding variation agreement, with Capricorn Copper Holdings Pty Ltd ( CCH ) and its parent entity, EMR Capital Investment (No. 6B) Pte Ltd. The payment from CCH includes the first and second instalments of $5 .00 million each, the agreed extension fee of $ 0. 250, and interest due of $0.75 million , being a total payment of $11 .00 million. ACT Finance Facility On 13 July 2021, the Company repaid a further $7.75 million, comprising 50% of the outstanding principal amount of $15.50 million on its finance facility with ACT . On 27 July 2021, the Company announced it had agreed to extend the facility t ermination d ate from 31 July 2021 to 31 January 202 2 , all ot her terms and conditions remaining unchanged. There have been no further changes to the facility since that date. AUDIT This preliminary financial report is based on accounts which are in the process of being audited. No disputes or qualifications are like ly to occur. Unaudited Preliminary Fin anci al Report – For the year ended 30 June 2021 Page 5 Consolidated Statement of Comprehensive Income for the year ended 30 June 202 1 Continuing operations 2021 $'000 2020 $'000 Revenue 93,834 73,243 Cost of sales (75, 145 ) ( 70,330 ) Gross p rofit 18,6 89 2,913 Contingent consideration income 10, 250 - Interest income 1 , 886 448 Other income 59 - General and administrative expenses (5,775) (6,383) Commodity and foreign exchange (loss)/gain (1,866) 673 Finance costs ( 2 , 999 ) ( 1,494 ) Fair value change in financial assets 3,991 ( 83 ) Share - based reversal/( payments ) 344 (1 37 ) Change in r ehabilitation provision estimate - (8,360) Profit before tax 23,979 (12,422) Income tax expense - - Profit/(loss) for the period from continuing operations 23,979 ( 12,422 ) Discontinued operations Profit/(loss) for the period from discontinued operations 64,274 ( 67 , 918 ) Profit/(loss) attributable to: Members of the parent 88,253 ( 80 , 340 ) Total comprehensive income/(loss) attributable to: Members of the parent 88,253 ( 80,340 ) Earnings and diluted earnings /(loss) per share attributable to the ordinary equity holders of the parent (cents per share) from continuing operations 2.64 ( 1.46 ) from discontinued operations 7.08 (7.99) Total 9.73 (9.45) Unaudited Preliminary Fin anci al Report – For the year ended 30 June 2021 Page 6 Consolidated Statement of Financial Position as at 30 June 202 1 202 1 2020 $'000 $'000 Current assets Cash and cash equivalents 13,472 14,095 Trade and other receivables 23,788 6,153 Inventories 20,526 20,328 Prepayments 5 68 885 Assets classified as held for sale 4,648 - Financial assets at fair value through profit or loss 2,332 - Derivative financial instruments - 1,532 Total current assets 65, 334 42,993 Non - current assets Other receivables 3,457 9,978 Convertible note r eceivable 38,301 - Financial assets at fair value through profit or loss 3,091 50 Property, plant , and equipment 36,847 43,315 Mine properties and development costs 37,071 39,633 Exploration and evaluation 352 13,993 Total non - current assets 119,119 106,969 Total assets 184,454 149,962 Current liabilities Trade and other payables 8, 675 7,518 Liabilities directly associated with assets classified as held for sale 43 - Provisions 3,531 3,680 Interest bearing liabilities 17,364 33,108 Total current liabilities 29, 613 44,306 Non - current liabilities Provisions 12,456 51,397 Interest bearing liabilities 2,684 2,468 Total non - current liabilities 15,140 53,865 Total liabilities 44, 753 98,171 Net assets 139,700 51,791 Equity Issued capital 332,406 332,406 Accumulated losses (220,54 3 ) (308,796) Share based payments reserve 27,837 28,181 Total equity 139,700 51,791 Unaudited Preliminary Fin anci al Report – For the year ended 30 June 2021 Page 7 Consolidated Statement of Cash Flows for the Year Ended 30 June 202 1 202 1 $'000 20 20 $'000 Cash flows from operating activities Receipts from customers 86,165 147 , 468 Payments to suppliers and employees (73,875) (1 67 , 549 ) Interest received 82 441 Other receipts 133 2 30 Interest paid (3,023) ( 1,633 ) Net cash flows from /(used in) operating activities 9,482 (21,043) Cash flows from investing activities Payments for property, plant , and equipment (12,618) ( 10 , 405 ) Payments for mine properties and development (8,500) (1 8 , 230 ) Payments for exploration and evaluation (1,549) ( 3 , 919 ) Payments for other financial assets (30) Proceeds from sale of financial assets 78 155 Proceeds from disposal of subsidiary 24,000 - Proceeds from sale of property plant and equipment 2,01 8 319 Proceeds from performance bond facility 6,520 795 Net cash flows from/( used in ) investing activities 9,919 ( 31,285 ) Cash flows from financing activities Repayment of borrowings ( 47,985 ) ( 4,814 ) Payment of lease and hire purchase liabilities (3,039) (5,369) Payments for share issue costs - (2,330) Payments for dividends - (58) Proceeds from borrowings 31,000 34,899 Proceeds from share issue - 32,731 Net cash flows (used in)/from financing activities ( 20,024 ) 55, 059 Net (decrease)/increase in cash and cash equivalents ( 623 ) 2,731 Cash at the beginning of the year 14,095 11,364 Cash and cash equivalents at the end of the year 13,472 1 4, 095 Unaudited Preliminary Fin anci al Report – For the year ended 30 June 2021 Page 8 Consolidated Statement of Changes in Equity for the Year Ended 30 June 2021 Issued capital Accumulated losses Share based payments reserve Total Equity $'000 $'000 $'000 $'000 At 1 July 2019 302,005 (228,456) 28,044 101,593 Loss for the period - ( 80 , 340 ) - ( 80 , 340 ) Other comprehensive income, net of tax - - - - Total comprehensive loss for the period - ( 80 , 340 ) - ( 80 , 340 ) Transactions with owners in their capacity as owners Issue of share capital 32,731 - - 32,731 Share issue costs (2,330) - - (2,330) Share - based payments - - 137 1 37 At 3 0 June 20 20 332,406 ( 308 , 796 ) 28, 181 51,791 At 1 July 2020 332,406 (308,796) 28,181 51,791 Profit for the period - 88,253 - 88,253 Other comprehensive income, net of tax - - - - Total comprehensive profit for the period - 88,253 - 88,253 Transactions with owners in their capacity as owners Share - based payments - - (344) (344) At 3 0 June 202 1 332,406 ( 220,543 ) 27,837 139,700 Unaudited Preliminary Fin anci al Report – For the year ended 30 June 20 21 9 NOTE 1. BASIS OF PREPARATION The financial information included in this document for the year ended 30 June 202 1 is unaudited. The financial information does not constitute the Consolidated Entity’s full financial statements for the year ended 30 June 202 1 , which will be approved by the Board, reported on by the Auditors and lodged with the ASX. The Consolidated Ent ity’s full financial statements will be prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standards, and other author i t ativ e pronouncements of the Australian Accounting Standards Board (the AASB ) . The financia l information in this document for the year ended 30 June 202 1 has been prepared on the basis of accounting policies and methods of computation consistent with those applied in the 30 June 20 20 financial statements contained within the 20 20 Annual Report o f the Consolidated Entity. As required and unless stated otherwise, comparative financial information for the Consolidated Entity has been presented for the 20 20 financial year. Comparative figures have been prepared on the same basis as the current year figures. The amounts contained in the financial statements have been rounded to the nearest thousand dollars unless otherwise stated (where rounding is applicable) under the option available to the Consolidated Entity under ASIC Corporations (Rounding in Financial Report) Instrument 2016/191. The Consolidated Entity has adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current year . NOTE 2. SEGMENT NOTE The Cons olidated Entity has only one material segment, which is the Renison Tin Operation (50% MLX). This segment mines, treats, and markets tin concentrate. NOTE 3 . EARNINGS PER SHARE 2021 2020 For basic and diluted earnings/(loss) per share: Profit/(loss) attributable to continuing operations ($’000) 23,979 (12,422) Weighted average number of ordinary shares outstanding during the period used in the calculation of basic and diluted earnings/(loss) per share 907,266 ,067 849,81 7,790 Basic and diluted earnings/(loss) per share (cents) f rom continuing operations 2.64 (1.46) f rom discontinued operations 7.08 (7.99) Total 9.73 ( 9.45) NOTE 4 . INTEREST IN JOINT OPERATIONS Renison Tin Project Subsidiary Bluestone Mines Tasmania Pty Ltd has a 50% interest and participating share in the Renison Tin Project, which is operated and managed by Bluestone Mines Tasmania Joint Venture Pty Ltd. The Consolidated Entity is entitled to 50% of the production. The Renison Tin Project is located in Tasmania.
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