Notes to the Consolidated Financial Statements for the year ended 30 June 2024 1. Coporate information The consolidated financial report for the year ended 30 June 2024 covers Sheffield Resources Limited (Sheffield, parent entity or the Company) and its controlled entities (collectively known as the Group or consolidated entity). The principal activities during the year were mineral sands evaluation and development in Australia and mineral sands evaluation in Brazil and Sri Lanka. Sheffield is a for-profit company limited by shares whose shares are publicly traded on the Australian Securities Exchange. The Company and its controlled entities were incorporated and domiciled in Australia. The registered office and principal place of business of the Company is Level 2, 41-47 Colin Street, West Perth, WA 6005. The consolidated financial report of Sheffield for the year ended 30 June 2024 was authorised for issue in accordance with a resolution of the Directors on 16 September 2024. 2. Basis of preparation These general-purpose financial statements have been prepared in accordance with Australia Accounting Standards and Interpretations issued by the Australia Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The financial statements have been prepared on a going concern basis. (a) Functional and presentation currency Both the functional and presentation currency of Sheffield is Australian Dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that currency. (b) Rounding of amounts The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated) pursuant to the option available to the Company under ASIC Class Order 2016/191. The Company is an entity to which this class order applies. (c) Going concern The financial statements have been prepared on a going concern basis. The Group recorded a net loss after tax for the year ended 30 June 2024 of $32.2m (2023: net loss after tax of $8.6m). At 30 June 2024, the Group had $9.9m in cash and cash equivalents (2023: $24.4m). The Group’s net assets were $138.1m (2023: $169.6m) and the net cash outflows from operating activities were $2.3m (2023: $2.2m). Kimberley Mineral Sands Pty Ltd (KMS) became jointly owned by Sheffield and YGH Australia Investment Pty Ltd (Yansteel) as at 12 March 2021. The Thunderbird mineral sands project (Thunderbird) was previously held by Sheffield through its 100% owned subsidiary KMS prior to the formation of the joint venture. The project is located in north-west Western Australia. KMS made a Final Investment Decision (FID) to construct and develop the Thunderbird project on 7 October 2022. KMS reached financial close on a combined $315m senior loan facilities provided by Northern Australia Infrastructure Facility (NAIF) and OMRF (Th) LLC, a related entity of Orion Mineral Royalty Fund (Orion). The Thunderbird project was fully funded through to first production. Construction activities at Thunderbird were completed during the financial year in line with schedule and budget. First ore production occurred ahead of schedule in October 2023. The maiden shipment of Thunderbird products to customers was completed in January 2024, with the first bulk shipment departing Broome in March 2024 completing the transition of the Company into a mineral sands producer. On 26 June 2024, the Sheffield and Yansteel, as 50/50 owners of KMS, each contributed $7.5 million into KMS to fund working capital requirements. KMS reported strong production growth throughout the June 2024 quarter following ongoing equipment modifications and remedial actions taken to address mechanical equipment failures that occurred during Q1 2024. The Directors prepared a cash flow forecast for the next 12 month period reflecting the consideration for additional equity funding in KMS as working capital to further support operation ramp up. Whilst the Directors are confident that funding requirements will be successfully covered, the timing and costs of any additional funding remains uncertain. Should the Company be unsuccessful in obtaining such funding, there is a material uncertainty which may cast significant doubt whether the Group will be able to continue as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The Directors have discretion regarding the level and timing of expenditure to be incurred against forecast expenditure. Steps can be taken to contain operating and investment activities, ensuring the Group’s ability to manage the timing of cash flows to meet committed obligations of the business as and when they fall due. 44 Annual Report 2024 Sheffield Resources Limited
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