20974 29Metals AR23 WEB V1 - Flipbook - Page 145
2023 key
results
66
Chair letter and
CEO report
About
29Metals
Our
assets
Sustainability
& ESG Report
Mineral Resources
and Ore Reserves
Annual
Financial Report
141
29Metals Appendix 4E and Annual Financial Report for 29Metals Limited and its Controlled Entities for the year ended 31 December 2023
Consolidated Financial Statements
Note 2: Basis of preparation (continued)
Going Concern (continued)
s a result of the impact of the Capricorn Copper xtreme
including:
eather vent, the Group took steps during the Reporting eriod to manage financial risk,
▪
drawing on the Group’s US$40,000,000 working capital facility in May 2023;
▪
on 28 June 2023, the Group required and obtained covenant relief under the Group Syndicated acility greement dated 20 ctober 2021, in respect
of the Debt Service Coverage Ratio (‘^Z’) and Net Total Leverage Ratio (‘Ed>Z’) covenants under the Group debt facilities for the 30 June 2023
calculation date (refer to Note 26);
▪
in ugust 2023, the Group and its lenders agreed to amend the Syndicated acility greement dated 20 ctober 2021, which amendments:
provided further relief for DSCR under the Group debt facilities for the 31 December 2023, 30 June 2024 and 31 December 2024 calculation
dates;
provided further relief for the NTLR under the Group debt facilities for the 31 December 2023 calculation date; and
included a change to the fixed repayment profile under the facility by increasing the total repayments for the quarters ended 30 September
2023 to 30 June 2025 to US$50,000,000 from US$45,000,000, with the last repayment on 30 September 2026 reducing from US$50,000,000
to US$45,000,000; and
▪
in September and ctober 2023, the Group received proceeds from an issue of 219,130,402 shares amounting to $151,200,000 (before transaction
costs) (refer to Note 30).
In addition, on 28 June 2023 the Group negotiated an extension of the Group’s environmental bank guarantee facility by one year to 29 ctober 2024.
urther information regarding the financial impacts of the xtreme
eather vent at Capricorn Copper in March 2023 is disclosed in Note .
The Group’s current assets at 31 December 2023 amounted to $306,660,000 (2022: $344,956,000) and include cash and cash equivalents of
$161,859,000 (2022: $1 1,962,000).
The Group’s current assets at 31 December 2023 exceed current liabilities by $46,149,000 (2022: $121,201,000). Current interest bearing liabilities are
$99,836,000 at 31 December 2023 (2022: $33, 42,000).
The NTLR is the ratio of total net debt on the calculation date to ITD for the 12 months calculation period ending on that calculation date, with a
covenant of less than 2:1. The key assumptions for the compliance with the NTLR at 30 June 2024 and 31 December 2024 are:
▪
receipt of regulatory approvals required to maintain continuous tailings deposition and production at Capricorn Copper on a timely basis (relative
to remaining capacity in existing tailings storage facilities);
▪
achieving planned production and
▪
receipt of further proceeds from the ongoing insurance claim related to the loss and damage suffered as a result of the Capricorn Copper xtreme
eather vent during the first half of 2024; and
ITD ;
▪
ongoing management of working capital in line with expectations.
Should the Company be unable to comply with the NTLR covenant requirements, as a result of the key matters not being achieved, and the Company is
unable to renegotiate the covenant requirements with the Company’s lenders, there is significant uncertainty as to whether the Group would be able to
continue as a going concern, and, whether it will realise its assets and settle its liabilities in the normal course of business.
These Consolidated inancial Statements do not include any ad ustments 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 be unable to continue as a going concern.
The Directors, in considering the appropriateness of the going concern basis for the preparation of the Consolidated inancial Statements, have reviewed
the Group’s cash flow forecasts prepared by Management which indicate the Group will have sufficient cash to continue as a going concern for the 12
months from the date of this report.
The Directors, at the date of signing, consider that the going concern basis of preparation for the Consolidated inancial Statements is appropriate on the
basis of:
▪
the matters outlined above;
▪
other funding and liquidity options available to the Group; and
▪
ongoing engagement with the Group’s lenders.
66
