20974 29Metals AR23 WEB V1 - Flipbook - Page 111
2023 key
results
32
Chair letter and
CEO report
About
29Metals
Our
assets
Sustainability
& ESG Report
Mineral Resources
and Ore Reserves
Annual
Financial Report
107
29Metals Appendix 4E and Annual Financial Report for 29Metals Limited and its Controlled Entities for the year ended 31 December 2023
Directors’ Report
Operating and Financial Review
Material business risk
Discussion
to processes and approvals in the urisdictions that 29Metals conducts its business that require significant engagement and preferably
agreement with the First eoples groups may be required in the future, which may increase the timeframe and cost of pro ect development,
and potentially impact ongoing pro ect activities where there is further surface disturbance.
29Metals does not have formal heritage agreements with traditional owners, which means there is no agreed heritage management process
for identifying and addressing potential impacts on Aboriginal heritage and managing the impacts of activities on Aboriginal heritage values.
However, 29Metals manages this ris through heritage management plans prepared in consultation with traditional owner groups, and
heritage clearances have been obtained for all areas of disturbance at 29Metals’ operating sites. However, if 29Metals’ were to breach or
otherwise fail to comply with cultural heritage regulations or these plans, the cost of curing a breach or resolving associated enforcement
actions initiated by government authorities may be significant and may adversely impact 29Metals’ reputation and financial position.
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Assets on 29Metals’ balance sheet, including plant and equipment, mine properties, mineral rights, exploration and evaluation, and inventory,
and other assets such as deferred tax assets, may be sub ect to impairment ris .
mpairment assessments require the use of estimates and assumptions such as long term commodity prices considering current and historical
prices, price trends and related factors , discount rates, operating costs, future capital requirements, closure and rehabilitation costs,
exploration potential, reserves, operating performance which includes production and sales volumes , and future recoverability. hese
estimates and assumptions are sub ect to ris and uncertainty. herefore, there is a possibility that changes in circumstances will impact these
pro ections, which may impact the recoverable amount of assets and or cash generating units. n such circumstances, some or all of the
carrying amount of the assets cash generating units may be impaired, with the impact recognised in the Consolidated tatement of
Comprehensive ncome.
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29Metals is required to include provisions in its financial statements for future rehabilitation and remediation costs. stimating the li ely
quantum of such costs involves ma ing assumptions as to mine life which, in turn, is influenced by estimates regarding future commodity
prices , the extent of disturbance and contamination, and the forecast cost of future rehabilitation and closure activities. As such, no assurance
can be given as to the accuracy of 29Metals’ current provisions for future rehabilitation and closure costs, and actual costs may be substantially
greater. ncreases in future rehabilitation and closure costs may impact 29Metals via
▪
adversely impacting the overall financial position of 29Metals
▪
adversely impacting the economic assumptions underpinning 29Metals’ Mineral esources and re eserves estimates, in turn resulting
in an adverse revision to estimates which underpin mine life and
▪
review of the carrying value of 29Metals’ assets, which may result in impairment charges.
n certain urisdictions where 29Metals conducts mining operations now or in the future, such as ueensland where Capricorn Copper is
located, 29Metals may be required to provide a surety against future rehabilitation and closure liability, in the form of performance bonds or
ban guarantees. he quantum of the surety is determined by the relevant regulatory authority having regard to an assessment of disturbance
and contamination, and other criteria determined by the regulatory authority from time to time .
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29Metals’ business may be impacted directly or indirectly by geopolitical factors outside of 29Metals’ control. For example, under 29Metals’
mineral concentrate sales arrangements, 29Metals may be required to deliver concentrate to ports in China which presents ris s given ongoing
geopolitical tension between Australia and China and instances where it has been reported that certain Chinese state owned utilities and steel
mills had been verbally instructed by China’s General Administration of Customs to stop importing thermal and metallurgical coal from
Australia with immediate effect. While the customer under 29Metals’ mineral concentrate contracts may elect for one or more shipments of
29Metals’ mineral concentrates to be delivered to ports outside of China such as outh orea , under the relevant offta e agreements
29Metals assumes the ris and the costs for changes in shipment locations. he costs associated with such an election by the customer may
be material, and as a result may adversely affect 29Metals’ profitability, operational performance and overall financial position.
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