Speciality Metals International Limited Annual Report 2019

Page | 29 DIRECTORS’ REPORT D.W. Clark – Resigned 31 January 2019 There is an agreement dated 8 January 2014 between Speciality Metals International Limited and D.W. Clark whereby Mr Clark agrees to provide Company Secretarial and management services to Speciality Metals International Limited on an agreed upon fee structure, a position he held until 31 January 2019. (i) Speciality Metals’ Financial Performance Speciality Metals’ financial performance for the five years to 30 June 2019 is noted below and the relationship between results and performance is discussed. Year ended Measure 2019 2018 2017 2016 2015 Net profit / (loss) after tax $ 3,808,863 (1,478,746) (9,888,710) (2,101,010) (2,415,229) Net Assets $ 10,905,040 2,672,436 2,371,501 10,744,570 11,189,606 Cash and cash equivalents $ 217,962 602,675 1,048,000 761,413 1,817,147 Cash flows from operating activities $ (1,627,127) (1,368,767) (916,448) (1,023,157) (633,185) EBITDAX $ 3,847,034 (1,022,747) (865,010) (943,493) (1,232,524) Share price at 30 June $ $0.031 $0.019 $0.010 $0.030 $0.125 Basic Earnings / (loss) per share Cents 0.67 (0.29) (2.27) (0.56) (0.79) Financial Performance The profit for the consolidated Group for the financial year after tax amounted to $3,808,863 (2018 loss of $1,478,746). This result was primarily brought about by the reversal of the 2017 capitalised exploration costs impairment for the Mt Carbine Project. The Group is creating value for shareholders via its recent acquisition of Mt Carbine Quarries Pty Ltd, an entity that owns and operate the Mt Carbine Quarry and holds Mining Leases ML 4867 and ML 4919. This Acquisition also resulted in the Company entering into an unincorporated Joint Venture with Cronimet Asia Pte Ltd for the development of the Mt Carbine Tungsten Tailings and Stockpile Projects. The Company plans to finalise commissioning and commence production from the Tailings Retreatment Project during the 4 th quarter of 2019. The Company will continue to undertake exploration activities in its NSW Exploration Licences and Chilean Exploration Concessions in conjunction with the development and commercialisation of its tungsten assets in Far North Queensland. Financial Position The Group’s main activity during the year has related to the acquisition of Mt Carbine Quarries to bring the Mt Carbine Tungsten Project back into production. This transaction was completed on 28 June 2019. In accordance with the Company’s accounting policy, the recoverability of the carrying amount of Deferred Exploration and Evaluation Expenditure was reassessed during the 2019 financial year without impairment. Separately to this, exploration and evaluation costs of $347,919 were capitalised for the 2019 financial year along with the reversal of the 2017 capitalised exploration costs impairment for the Mt Carbine Project of $5,635,331. An amount of $255,100 was also recognised as capitalised exploration costs upon the 100% acquisition of Mt Carbine Quarries Pty Ltd. The carrying value of the exploration assets at 30 June 2019 is $6,834,416 (2018: $596,066). At 30 June 2019, the Group had a net working capital deficit of $531,722 (2018: $1,294,671 surplus). The decrease in the net working capital was due largely to the movement in funds associated with the acquisition of Mt Carbine Quarries Pty Ltd. As the Group is an exploration and development entity, ongoing exploration and development activities are reliant on future capital raisings. During the year, the Company raised $4,097,512 (after share issue costs) from two placements to Professional and Sophisticated Investors. End of audited remuneration report.