Notes to the Consolidated Financial Statements for the year ended 30 June 2024 8. Investment in joint venture (continued) (f) Joint venture - borrowings This Note 8 (f) (Joint venture – borrowings) should be read in conjunction with Note 8 (g) (Joint venture – prepayments and other financial liabilities). Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and redemption amount is recognised in the profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of the loan facilities are recognised as transaction costs of the loan to the extent that it is probably that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probably that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates. KMS’ carrying amount of borrowings is as follows: Joint venture (100%) 2024 $’000 (Audited) Joint venture (100%) 2023 $’000 (Audited) Current liabilities Production linked loan facility - Orion Mineral Royalty Fund 9,775 – 9,775 – Non-current liabilities Production linked loan facility - Orion Mineral Royalty Fund 81,728 136,468 Government debt facilities - Northern Australia Infrastructure Facility 157,025 93,350 238,753 229,818 248,528 229,818 KMS’ breakdowns of the respective borrowings are as follows: Joint venture (100%) 2024 $’000 (Audited) Joint venture (100%) 2023 $’000 (Audited) Government debt facilities – Northern Australia Infrastructure Facility Opening balance 93,350 – Additions 63,275 96,725 Capitalised borrowing costs – (3,492) Amortisation 400 117 157,025 93,350 Production linked loan facility - Orion Mineral Royalty Fund Opening balance 136,468 – Additions 34,068 132,364 Capitalised borrowing costs – (6,874) Financing costs on royalty obligations1 (113,687) – Amortisation 32,560 12,747 Foreign exchange movement 2,094 (1,769) 91,503 136,468 248,528 229,818 Note 1: The loan was fully drawn during the year. The financing costs on the royalty obligations were transferred from prepayments to the production linked loan facility as cost of the loan. 56 Annual Report 2024 Sheffield Resources Limited
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