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TURNSTONE RESOURCES LTD — Interim / Quarterly Report 2025
Mar 13, 2025
65958_rns_2025-03-13_887a82cd-c269-4aa1-bbd9-3aafc616e1da.pdf
Interim / Quarterly Report
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South Harz Potash Limited
ABN 64 153 414 852
Half Year Financial Report – 31 December 2024
South Harz Potash Limited
Corporate directory
Directors Leonard Jubber Executive Chairman Dr Reinout Koopmans Non-Executive Director Rory Luff Non-Executive Director Company secretary Graeme Smith Registered office Unit 13, 6-10 Douro Place West Perth WA 6005 Australia. +61 408 447 493 Principal place of business Unit 13, 6-10 Douro Place West Perth WA 6005 Australia. +61 408 447 493 Auditors BDO Audit Pty Ltd Level 7, 420 King William Street, Adelaide SA 5000 Australia. Solicitors Steinepreis Paganin 16 Milligan Street, Perth WA 6000, Australia. Main Bankers National Australia Bank Securities exchange Australian Securities Exchange (ASX code: SHP) Share registry Automic Registry Services Pty Ltd Level 2, 267 St Georges Terrace Perth WA 6000 +61 8 9324 2099 Website address www.southharzpotash.com - Corporate Governance Statement https://southharzpotash.com/about/corporate governance/
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South Harz Potash Limited
Table of Contents
Directors’ report ........................................................................................................................................................... 4 Auditor’s independence declaration ..........................................................................................................................10 Financial report ...........................................................................................................................................................11 Statement of profit or loss and other comprehensive income for the half-year ended 31 December 2024 ............12 Statement of financial position as at 31 December 2024 ..........................................................................................13 Statement of changes in equity for the half-year ended 31 December 2024 ............................................................14 Statement of cash flows for the half-year ended 31 December 2024 .......................................................................15 Notes to the financial statements 31 December 2024 ...............................................................................................16 Directors' declaration .................................................................................................................................................24 Independent auditor’s review report .........................................................................................................................25
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South Harz Potash Limited
Directors’ Report
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the “consolidated entity”) consisting of South Harz Potash Limited (referred to hereafter as the “Company” or “parent entity”) and the entities it controlled for the half year ended 31 December 2024.
DIRECTORS
The names of directors who held office during the financial period and up to the date of this report are shown in the following table:
| Name | Title |
|---|---|
| Leonard Jubber | Executive Chairman |
| Rory Luff | Non-Independent Non-Executive Director |
| Dr. Reinout Koopmans | Independent Non-Executive Director |
COMPANY SECRETARY
Graeme Smith
PRINCIPAL ACTIVITIES
The development of mineral exploration assets.
REVIEW OF ACTIVITIES
The total comprehensive loss for the six months ended 31 December 2024 was A$1,645,387 (half-year ended 31 December 2023: A$5,967,598).
Total expenditure for the half year was A$1,672,513 (half-year ended 31 December 2023: A$5,789,393). The reduction in the level of expenditure for the half year reflects the consolidated entity entering a low-cost optimisation phase following the release of its Pre-Feasibility Study in May 2024, including the closure of its UK corporate office.
Cash as at 31 December 2024 was A$566,808.
Highlights during the six-month period to 31 December 2024 included:
Capital Raising Activities
In August 2024, the Company announced the completion of an equity placement through the issue of 102,999,990 new shares to new and existing institutional and sophisticated investors at an issue price of $0.01 per share (“August Placement”). The August Placement included subscriptions by the directors of $401,167 for 40,116,690 shares (“Director Placement Shares”), which was approved by shareholders at its 2024 Annual General Meeting held on 28 November 2024 (“AGM”). The Director Placement Shares were issued on 16 December 2024, as part of which the Company offset $193,807 of creditor balances owing to the directors, comprising loans from directorrelated entities of Len Jubber and Rory Luff of $100,000 and accrued and unpaid non-executive directors fees totalling $93,807.
In addition to the August Placement, the Company also offered eligible shareholders the right to participate in a 1- for-3 pro-rata non-renounceable entitlement issue (“Entitlement Offer”) to raise approximately $3.0 million (before costs). On 23 September 2024, the Company announced the results of this Entitlement Offer where, of the
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DIRECTORS’ REPORT
South Harz Potash Limited
296,689,424 shares offered under the Entitlement Offer, 54,109,646 shares (representing new equity of $541,096) were applied for by eligible shareholders, including those subscribing for shares in excess of their entitlements. The Entitlement Offer also included participation by the directors of approximately $107,061.
The completion of the August Placement and the Entitlement Offer, left a shortfall of 242,579,778 Shares (“Shortfall Shares”), following which the Company undertook to place these Shortfall Shares (“Shortfall Offer ” ). On 19 November 2024, South Harz announced the completion of an initial placement of Shortfall Shares raising $425,500 through the issue of 42,550,000 Shortfall Shares. The Company completed a second, subsequent placement of 14,000,000 Shortfall Shares raising $140,000 on 13 December 2024 after which the Shortfall Offer closed.
In addition to the above, a director-related entity of Len Jubber was issued with 5,000,000 shares on 16 December 2024, representing $50,000 of new equity following shareholder approval at the AGM.
Other placements of shares during the half year included the issue of shares in as consideration for services performed by services providers to the Company, being 4,145,500 shares issued on 20 November 2024 and 2,736,600 shares issued on 31 December 2024.
In aggregate across the capital raising activities in the half year, new equity issued totalled approximately $2.25 million (before costs), during the half year.
Director Loan Facilities
During the half year, two unsecured loan facilities were provided by related party entities of directors Len Jubber and Rory Luff. The notional amount for each facility was $100,000, for a total of $200,000. The facilities attracted an interest rate of 10% per annum on the drawn funds. During July 2024, $50,000 was drawn down on each facility for a total of $100,000. Following shareholder approval at the Company’s AGM, the balance of these loans was offset against the cost for shares subscribed for by director-related entities of Len Jubber and Rory Luff as part of the August Placement capital raise described above.
Annual General Meeting and New Constitution
The Company’s AGM was held on 28 November 2024 in the Perth offices of its auditors, BDO. All resolutions put to shareholders were passed on a poll, by the requisite majorities. This included a special resolution to adopt a new Constitution. A copy of this new Constitution was released to the ASX on 2 December 2024. Full details pertaining to the AGM results were released in the ASX announcement dated 28 November 2024, Results of Meeting.
Issue of Performance Rights
On 17 December 2024, the Company issued 39,500,000 performance rights to directors as approved by shareholders at the AGM. Also, pursuant to the new Employee Incentive Securities Plan approved by shareholders at the AGM, 9,000,000 performance rights were issued to key management personnel as part of the company’s long term incentive plan.
Targeted Developments
Following the completion and release of its Pre-Feasibility Study on 22 May 2024, and its receipt of a positive spatial planning assessment under Stage 1 of the regulatory approvals process in Thuringia, Germany on 14 June 2024, the Company’s attention has now turned to undertaking comprehensive due diligence and progressing the negotiation and execution of the binding documents for the acquisition of the Sollstedt mine (refer to Figure 1 below), progressing permitting and undertaking internal optimisation works focusing on the future development of Ohmgebirge and evaluating synergy opportunities afforded via the Sollstedt purchase.
In addition, the Company intends to seek a strategic financial investor / project development partner with a view to progressing to a Feasibility Study and completion of the permitting process.
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DIRECTORS’ REPORT
South Harz Potash Limited
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Figure 1: Plan view of the Ohmgebirge and Muhlhausen-Nohra Perpetual Mining Licences plus the contiguous Sollstedt property inclusive of substantial existing shaft infrastructure and existing backfill areas.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD
Project Development Funding
Following the end of the half-year, the Company engaged specialist mining finance advisor Cutfield Freeman & Co to assist with assessing potential project development funding pathways including identifying potential strategic partners to progress the Ohmgebirge project to the Feasibility Study stage and beyond.
Creditor Balances
Following the end of the half-year, the Company agreed with two creditors of its wholly-owned German subsidiary, Sud Harz Kali GmbH (“SHK”) to defer invoice payments totalling €784,772 ($1,313,141) as at 31 December 2024. The outstanding invoices relate to engineering services provided to SHK for the Ohmgebirge Pre-Feasibility Study by K-Utec and Ercosplan which was announced on the ASX on 22 May 2024 (refer ASX announcement dated 22 May 2024, S ollstedt Mine Purchase, Ohmgebirge PFS & Maiden Ore Reserve ). The balances payable are reflected as current liabilities in the Company’s Statement of Financial Position as at 31 December 2024.
Subsequent to the half year end, the Company has:
-
i. Agreed binding terms with K-Utec to defer the payment of invoices owing, totalling EUR €309,861 ($518,483), until 31 December 2026. The Company is paying interest monthly at a rate of 5% per annum on this amount owed and will continue to do so until the debt has been repaid.
-
ii. Agreed non-binding terms with Ercosplan to defer the payment of invoices owing, totalling EUR €474,911 ($794,658), until 31 December 2026. As part of the terms, the Company has agreed to grant a first ranking mortgage over its interest in the Ebeleben mining lease in Thuringia, Germany, as security for the amount owed. Binding documentation in this regard is being prepared and the parties have agreed a “standstill” in
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DIRECTORS’ REPORT
South Harz Potash Limited
relation to these invoices as the security documentation is being progressed. The Company is paying interest monthly at a rate of 5% per annum on this amount owed and will continue to do so until the debt has been repaid.
Capital Raising
On 28 February 2025, the Company announced that it had completed an initial placement of 29,850,000 new shares at $0.01 per share for gross proceeds received of A$298,500. These shares were issued under the Company’s existing ASX Listing Rule 7.1A placement capacity.
The Company also announced that it had received binding subscriptions for the issue of a further 20,150,000 new shares as follows:
-
5,000,000 new shares to a sophisticated and professional investor, expected to be allotted by 23 April 2025 (also to be issued under ASX Listing Rule 7.1A placement capacity); and
-
15,150,000 new shares to the directors (or their related parties), subject to receipt of shareholder approval at the Company’s next general meeting (which is expected to be held on 23 April 2025). This comprised 6,600,000 shares to Len Jubber (or his related entity), 7,550,000 shares to Rory Luff (or his related entities) and 1,000,000 shares to Reinout Koopmans.
Acquisition of Sollstedt
Activities for the purchase of the neighbouring Sollstedt mine property from Deusa International GmbH (“Deusa”) continued to advance. Due diligence is progressing and the parties are negotiating detailed terms (including arrangements for the asset between document execution and completion of the purchase) to be included in binding definitive transaction documentation, which is set to follow. Subsequent to the half-year end, the exclusivity date agreed with Deusa for the conduct of these negotiations was extended to 31 July 2025.
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Figure 2: Potash ore seams at the Sollstedt mine
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DIRECTORS’ REPORT
South Harz Potash Limited
GOING CONCERN
The financial report has been prepared on a going-concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the ordinary course of business.
The ability of the Company to continue as a going concern is principally dependent upon the ability of the Company to secure funds by raising capital from equity markets and managing cash flow in line with available funds.
The directors are satisfied that the going concern basis of preparation is appropriate based on the cash-flow forecasts, and subject to the completion of the current and potential future capital raises, as mentioned above.
E SG AND RISK
In 2022, South Harz adopted the roadmap developed with the assistance of WSP/Golder consultants. Based on this report and roadmap, South Harz updated its ESG policy in 2023.
An action plan for the implementation of an appropriate Standards and Measurement System (ESMS) was developed based on the legal reporting requirements for companies and milestones based on the applicable guidelines in the European Economic Area. An important milestone is the establishment of an ESG reporting system according to European guidelines, primarily the EU CSRD Directive including the European Sustainability Reporting Standards (ESRS), published on 31 July 2023. These regulations are expected to apply to the Company’s projects during their operational phases. Independent assessments against international standards GRI and CDPA will be undertaken following the eventual commencement of the Feasibility Study for the Ohmgebirge project. and will also address health and safety issues, labour standards and environmental legislation compliance considerations, including carbon footprint and climate change impacts. The Board’s emphasis is on good governance, the safety of the Company’s staff, local communities and the protection of the environment.
Key risks
There are a range of potential economic, funding, engineering, development, operational, environmental, regulatory, social and other risks to the Company and its projects and opportunities. The future performance of the Company and the value of its securities may be influenced by a range of factors, many of which are largely beyond the control of the Company and the directors.
The key risks associated with the Company’s business, the industry in which it operates and general risks applicable to all investments in listed securities and financial markets generally are set out in the Company’s recent ASX announcement dated 9 August 2024, Rights Issue Prospectus (“Prospectus”).
The risks factors set out in the Prospectus, or other risk factors not specifically referred to, may have a materially adverse impact on the performance of the Company and the value of its securities, and is not intended to provide an exhaustive list of the risk factors to which the Company is exposed.
Corporate Governance
The Company has in place Corporate Governance procedures and policies in line with the latest ASX Corporate Governance Principles and Recommendations – 4th Edition. All members of the Board believe strongly in the importance of good corporate governance to assist in achieving objectives and in accountability to stakeholders. The Board meets every two months and has the following sub committees which meet as necessary: Nomination & Remuneration, Audit & Risk and Technical. The Company has developed a board skills matrix, which is reviewed by the Board at an appropriate frequency, to help assess its key competencies and any skills gaps that may exist. The Chair also undertakes annual assessments of individual Board members to evaluate overall Board performance. The Company also maintains a Risk Register which is reviewed regularly by the Audit Committee and is an
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DIRECTORS’ REPORT
South Harz Potash Limited
interactive tool to recognise, mitigate and manage key risks.
AUDIT INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration in relation to the review for the half-year ended 31 December 2024 is provided with this report.
This report is made in accordance with a resolution of the directors, pursuant to section 307(c) of the Corporations Act 2001.
On behalf of the directors:
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Len Jubber – Executive Chairman 14 March 2025
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Tel: +61 8 7324 6000 BDO Centre Fax: +61 8 7324 6111 Level 7, 420 King William Street www.bdo.com.au Adelaide SA 5000 GPO Box 2018 Adelaide SA 5001 Australia
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DECLARATION OF INDEPENDENCE BY PAUL GOSNOLD TO THE DIRECTORS OF SOUTH HARZ POTASH LIMITED
As lead auditor for the review of South Harz Potash Limited for the half-year ended 31 December 2024, I declare that, to the best of my knowledge and belief, there have been:
-
No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
-
No contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of South Harz Potash Limited and the entities it controlled during the period.
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Paul Gosnold Director
BDO Audit Pty Ltd
Adelaide, 14 March 2025
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050 110 275 Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
South Harz Potash Limited
Financial report
General information
The financial report covers South Harz Potash Limited as a consolidated entity consisting of South Harz Potash Limited and the entities it controlled. The financial report is presented in Australian dollars, which is South Harz Potash Limited's functional and presentation currency.
The financial report consists of financial statements, notes to the financial statements and the irectors' Declaration.
South Harz Potash Limited is a listed public company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is:
Unit 13 6-10 Douro Place West Perth WA 6005 Australia
A description of the nature of the consolidated entity's operations and its principal activities are included in the Directors' Report, which is not part of the financial report.
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South Harz Potash Limited
Statement of profit or loss and other comprehensive income for the half-year ended 31 December 2024
| Note Revenue from continuing operations Interest income 4 Expenses Exploration and development costs Administration expenses Corporate expenses Director fees and key management costs Depreciation and amortisation expense Interest expense Foreign exchange (loss)/gain Consulting expenses Share-based payments Loss before income tax expense Income tax expense Loss after income tax expense Other comprehensive loss Items that may be reclassified subsequently to profit or loss: Foreign exchange translation reserve Other comprehensive gain /(loss) for the year net of tax Total comprehensive loss for the year Earnings per share for loss attributable to the owners of South Harz Potash Limited Basic loss per share Diluted loss per share |
Consolidated Dec 2024 Dec 2023 A$ A$ 1,224 1,124 (265,379) (3,427,993) (305,706) (542,533) (507,767) (600,655) (137,083) (754,880) (12,810) (19,809) (53,892) - (7,562) (273,842) (107,133) (116,034) (328,828) |
|---|---|
| (1,671,289) (5,788,269) |
|
| - - |
|
| (1,671,289) (5,788,269) |
|
| 25,902 (179,329) |
|
| 25,902 (179,329) |
|
| (1,645,387) (5,967,598) |
|
| Consolidated Dec 2024 Dec 2023 A$ A$ (0.18) (1.66) (0.18) (1.66) |
The financial statements should be read in conjunction with the accompanying notes.
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South Harz Potash Limited
Statement of financial position as at 31 December 2024
| Note Assets Current assets Cash and cash equivalents 5 VAT other receivables 6 Total current assets Non-current assets Property, plant and equipment Exploration and evaluation 7 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 8 Total current liabilities Total liabilities Net assets Equity Issued capital 9 Reserves 10 Accumulated losses Total equity |
Consolidated Dec 2024 Jun 2024 A$ A$ 566,808 253,632 220,777 255,187 |
|---|---|
| 787,585 508,819 |
|
| 65,403 75,445 2,076,936 1,996,525 |
|
| 2,142,339 2,071,970 |
|
| 2,929,924 2,580,789 |
|
| 1,879,440 2,094,973 |
|
| 1,879,440 2,094,973 |
|
| 1,879,440 2,094,973 |
|
| 1,050,484 485,816 |
|
| 41,479,958 39,385,937 2,600,508 2,458,572 (43,029,982) (41,358,693) |
|
| 1,050,484 485,816 |
The financial statements should be read in conjunction with the accompanying notes.
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South Harz Potash Limited
Statement of changes in equity for the half-year ended 31 December 2024
| Balance as 1 July 2024 Loss after income tax expenses for the year Other comprehensive income for the year, net of tax Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Share-based payments Balance at 31 December 2024 Balance as 1 July 2023 Loss after income tax expenses for the year Other comprehensive income for the year, net of tax Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Share-based payments Balance at 31 December 2023 |
Contributed Equity Performance Rights Reserve Option Based Payment Reserve Foreign Currency Translation Reserve Accumulated Losses Total Equity A$ A$ A$ A$ A$ A$ 39,385,937 - 2,262,245 196,327 (41,358,693) 485,816 |
|---|---|
| - - - - (1,671,289) (1,671,289) - - - 25,902 - 25,902 |
|
| - - - 25,902 (1,671,289) (1,645,387) |
|
| 2,094,021 - - - - 2,094,021 - 14,819 101,215 - - 116,034 |
|
| 41,479,958 14,819 2,363,460 222,229 (43,029,982) 1,050,484 |
|
| Contributed Equity Performance Rights Reserve Option Based Payment Reserve Foreign Currency Translation Reserve Accumulated Losses Total Equity A$ A$ A$ A$ A$ A$ 33,729,999 - 1,543,448 323,539 (32,207,674) 3,389,312 |
|
| - - - - (5,788,269) (5,788,269) - - - (179,329) - (179,329) |
|
| - - - (179,329) (5,788,269) (5,967,598) |
|
| 4,509,655 - 90,424 - - 4,600,079 124,551 - 204,277 - - 328,828 |
|
| 38,364,205 - 1,838,149 144,210 (37,995,943) 2,350,621 |
The financial statements should be read in conjunction with the accompanying notes.
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South Harz Potash Limited
Statement of cash flows for the half-year ended 31 December 2024
| Note Cash flows from operating activities Interest received Interest expense Exploration & Development costs Payments to suppliers and employees Net cash used in operating activities Cash flows from investing activities Payments for property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings Capital raising costs Net cash from financing activities (Decrease)/ increase in cash and cash equivalents Cash and cash equivalents at beginning of year Effects of foreign exchange cash movements Cash and cash equivalents at end of the year 5 |
Dec 2024 Dec 2023 A$ A$ 1,224 1,124 (53,892) - (265,379) (3,427,993) (1,256,606) (1,426,116) |
|---|---|
| (1,574,653) (4,852,985) - (319) |
|
| - (319) 1,936,656 4,873,885 100,000 (149,886) (273,806) |
|
| 1,886,770 4,600,079 312,117 (253,225) 253,632 2,267,185 1,059 142,581 |
|
| 566,808 2,156,541 |
The financial statements should be read in conjunction with the accompanying notes.
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South Harz Potash Limited
Notes to the financial statements 31 December 2024
Note 1. Material accounting policy information
Basis of preparation and accounting policies
These general-purpose financial statements for the interim half-year reporting period ended 31 December 2024 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.
These general-purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2024 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.
Exploration and evaluation assets
It is the Company’s policy to capitalise the cost of acquiring rights to explore areas of interest. All other exploration and development expenditure is charged against earnings as incurred and included as part of cash flows from operating activities.
The costs of acquisition are carried forward as an asset provided one of the following conditions is met:
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a. Such costs are expected to be recouped through the successful development and exploitation of the area of interest, or alternatively, by its sale; or
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b. Exploration activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing. When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment.
Exploration for and evaluation of mineral resources is the search for mineral resources after the entity has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resource.
Accounting for exploration and evaluation expenditures is assessed separately for each ‘area of interest’ to determine whether expenditure is expensed as incurred or capitalised as an asset. An ‘area of interest’ is an individual geological area which is considered to constitute a favourable environment for the presence of a mineral deposit or has been proved to contain such a deposit.
Pre-production costs are deferred as development costs until such time as the asset is capable of being operated in a manner intended by management. Capitalised expenses then become an active asset and are depreciated. Post-production costs are recognised as a cost of production.
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NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
South Harz Potash Limited
Any development expenditure incurred once a mine property is in production is immediately expensed to the Statement of Profit and Other Comprehensive Income except where it is probable that future economic benefits will flow to the entity, in which case it is capitalized as property, plant and equipment.
Information used in the review process is rigorously tested to externally available information as appropriate
New or amended accounting standards and interpretations adopted
The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
For the half-year ended 31 December 2024, the Company incurred a total comprehensive loss of $1,645,387 (halfyear ended 31 December 2023: loss of $5,967,598) and incurred cash outflows from operations of $1,574,653 (halfyear ended 31 December 2023: outflow of $4,852,985)
Directors are aware that additional capital would be required to meet operational costs and to advance its Ohmgebirge project. Having carefully assessed the uncertainties relating to the likelihood of securing additional funding and the consolidated entity’s ability to effectively manage its operations and working capital requirements, the directors believe that the consolidated entity will continue to operate as a going concern and that it is appropriate to prepare the financial statements on a going concern basis which assumes the extinguishment of liabilities in the normal course of business.
The ability of the Company to continue as a going concern is principally dependent upon its ability to secure funds by raising capital from equity markets and managing cash flow in line with available funds.
These conditions indicate a material uncertainty that may cast significant doubt about the ability of the Company to continue as a going concern.
Based on the cash-flow forecasts and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate, given the following:
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The Company has the ability to defer discretionary costs as and when required.
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In particular, given the Company’s history of raising capital to date, the directors are confident of the Company’s ability to raise additional funds as and when they are required.
Should the Company be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and classification of liabilities that might result should the Company be unable to continue as a going concern and meet its debts as and when they fall due.
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NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
South Harz Potash Limited
Note 2. Controlled Entities
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1:
| Equity Holding | |||
|---|---|---|---|
| Name of entity | Country of incorporation | Dec-2024 | Jun-2024 |
| South Harz Potash (Australia) Pty Ltd | Australia | 100% | 100% |
| Südharz Kali GmbH | Germany | 100% | 100% |
Note 3. Segment reporting
Identification of reportable operating segments.
The consolidated entity is organised into one operating segment, being mining and exploration operations. This operating segment is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers (“CODM”) ) in assessing performance and in determining the allocation of resources.
Geographical information
| Australia Germany |
Sales to external customers Non-current assets Dec-2024 Dec-2023 Dec-2024 Jun-2024 $ $ $ $ - - - - - - 2,142,339 2,071,970 |
|---|---|
| - - 2,142,339 2,071,970 |
The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets, post-employment benefits assets and rights under insurance contracts.
| Note 4. Income Interest income Note 5. Current assets - cash and cash equivalents Cash at bank Note 6. VAT and other receivables Deposits & other receivables VAT & GST refunds |
Consolidated Dec-2024 Dec-2023 $ $ 1,224 1,124 |
|---|---|
| Consolidated Dec-2024 Jun-2024 $ $ 566,808 253,632 |
|
| 566,808 253,632 |
|
| Consolidated Dec-2024 Jun-2024 $ $ 82,255 63,019 138,522 192,168 |
|
| 220,777 255,187 |
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NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
South Harz Potash Limited
| Note 7. Non-current assets - exploration and evaluation Exploration and evaluation - at cost Reconciliations at the beginning and end of the current and previous financial year are set out below: Consolidated Balance at 1 July 2024 Additions Exchange difference on opening balance Balance at 31 December 2024 Balance at 1 July 2023 Additions Exchange difference on opening balance Balance at 31 December 2023 Note 8. Current trade and other payables Trade payables1 Other payables |
Consolidated Dec-2024 Jun-2024 $ $ 2,076,936 1,996,525 |
Consolidated Dec-2024 Jun-2024 $ $ 2,076,936 1,996,525 |
|---|---|---|
| 2,076,936 | 1,996,525 | |
| Exploration $ 1,996,525 - 80,411 2,076,936 2,042,924 - (34,771) 2,008,153 Consolidated Dec-2024 Jun-2024 $ $ 1,705,705 1,785,742 173,735 309,231 |
Exploration $ 1,996,525 - 80,411 |
|
| 2,076,936 | ||
| 2,042,924 - (34,771) |
||
| 1,879,440 2,094,973 |
1 Trade payables balances owing to two creditors of the Company’s wholly-owned German subsidiary, Sud Harz Kali GmbH (“SHK”) totalling €784,772 ($1,313,141) as at 31 December 2024. The outstanding invoices relate to engineering services provided to SHK for the Ohmgebirge Pre-Feasibility Study by K-Utec and Ercosplan which was announced on the ASX on 22 May 2024 (refer ASX announcement dated 22 May 2024, Sollstedt Mine Purchase, Ohmgebirge PFS & Maiden Ore Reserve ). SHK is paying interest to these creditors at 5% per annum on the amount owed a monthly basis until the debts have been repaid. Subsequent to the half year end, the Company has:
-
i. Agreed binding terms with K-Utec to defer the payment of invoices owing, totalling EUR €309,861 ($518,483), until 31 December 2026.
-
ii. Agreed non-binding terms with Ercosplan to defer the payment of invoices owing, totalling EUR €474,911 ($794,658), until 31 December 2026. As part of the terms, the Company has agreed to grant a first ranking mortgage over its interest in the Ebeleben mining lease in Thuringia, Germany, as security for the amount owed. Binding documentation in this regard is being prepared and the parties have agreed a “standstill” in relation to these invoices as the security documentation is being progressed.
2 During July 2024, the Company borrowed funds totalling $100,000 under two unsecured director loans which had been provided by related party entities of directors, Len Jubber and Rory Luff. These loans were fully repaid by way of an offset against subscription monies owing for the placement of shares to these director-related entities on 16 December 2024 which was approved at the Company’s 2024 annual general meeting. Interest expense totalling $3,896, calculated at 10% per annum on the drawn funds, was paid to these director-related entities in the halfyear.
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NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
South Harz Potash Limited
| Note 9. Equity – Issued Capital | Consolidated | Consolidated | Consolidated | |
|---|---|---|---|---|
| Dec-2024 | Jun-2024 | Dec-2024 | Jun-2024 | |
| No. | No. | $ | $ | |
| Ordinary shares - fully paid | 1,052,728,708 | 827,184,972 | 41,479,958 | 39,385,937 |
| Ordinary share capital | ||||
| Details | Date | No of shares | Issue Price | $ |
| Opening Balance | 01-Jul-24 | 827,184,972 | 39,385,937 | |
| Placement Shares | 09-Aug-24 | 58,733,300 | $0.010 | 587,333 |
| Placement Shares (in lieu of | 09-Aug-24 | 4,150,000 | $0.010 | 41,500 |
| services)1 | ||||
| Entitlement Issue Shares | 23-Sep-24 | 52,646,481 | $0.010 | 526,465 |
| Entitlement Issue Shares (in lieu of | 23-Sep-24 | 1,463,165 | $0.010 | 14,632 |
| services)1 | ||||
| Placement of Shortfall Shares | 19-Nov-24 | 42,550,000 | $0.010 | 425,500 |
| Placement Shares (in lieu of | 20-Nov-24 | 4,147,500 | $0.010 | 41,475 |
| services)1 | ||||
| Placement of Shortfall Shares | 11-Dec-24 | 14,000,000 | $0.010 | 140,000 |
| Director Placement Shares | 16-Dec-24 | 25,735,900 | $0.010 | 257,359 |
| Director Placement Shares2 | 16-Dec-24 | 19,380,790 | $0.010 | 193,808 |
| Placement Shares (in lieu of | 31-Dec-24 | 2,736,600 | $0.010 | 27,366 |
| services)1 | ||||
| Capital raising costs | (161,416) | |||
| Closing Balance | 31-Dec-24 | 1,052,728,708 | 41,479,958 |
1 Placement Shares and Entitlement Shares (in lieu of services) were issued to a number of service providers of the Company who agreed to be issued shares as consideration for the payment of certain services provided to the Company.
2 Director Placement Shares were issued to directors for which consideration included the offset of $193,807 of creditor balances owing to the directors, comprising loans from director-related entities of Len Jubber and Rory Luff of $100,000 and accrued and unpaid non-executive directors fees totalling $93,807.
| Note 10. Equity - reserves Foreign currency translation reserve Performance rights reserve Option right reserves |
Consolidated Dec-2024 Jun-2024 $ $ 222,229 196,327 14,819 - 2,363,460 2,262,245 |
|---|---|
| 2,600,508 2,458,572 |
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars.
Performance rights reserve
The reserve is used to recognise the fair value of performance rights issued to directors, employees and brokers.
Option right reserve
The reserve is used to recognise the fair value of options issued to directors, employees and brokers.
20 | P a g e
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
South Harz Potash Limited
Note 11. Equity - Options
| Grant date | Expiry date | Exercise price |
Fair Value | Balance at the start of theyear |
Issued in year |
Exercised in the year |
Expired in the year |
Balance at the end of year |
Exercisable at year end |
Note |
|---|---|---|---|---|---|---|---|---|---|---|
| 02-Dec-20 | 02-Dec-24 | $0.0800 | $0.03000 | 3,500,000 | - | - | (3,500,000) | - | 3,500,000 | [3] |
| 02-Dec-20 | 02-Dec-24 | $0.1200 | $0.02600 | 3,500,000 | - | - | (3,500,000) | - | 3,500,000 | [3] |
| 27-May-21 | 27-May-26 | $0.2030 | $0.04690 | 4,606,605 | - | - | - | 4,606,605 | 4,606,605 | [3] |
| 05-Aug-21 | 05-Aug-26 | $0.1511 | $0.02129 | 192,069 | - | - | - | 192,069 | 192,069 | [4] |
| 20-Dec-21 | 17-Dec-24 | $0.1800 | $0.06346 | 2,192,084 | - | - | (2,192,084) | - | 2,192,084 | [2] |
| 20-Dec-21 | 17-Dec-24 | $0.2400 | $0.05503 | 2,192,084 | - | - | (2,192,084) | - | 2,192,084 | [2] |
| 30-Mar-22 | 30-Mar-27 | $0.1606 | $0.17044 | 2,382,000 | - | - | - | 2,382,000 | 1,449,000 | [3][4] [S] |
| 30-Sep-22 | 30-Sep-27 | $0.1200 | $0.03288 | 2,618,000 | - | - | - | 2,618,000 | - | [4] [M][S] |
| 17-Oct-22 | 17-Oct-26 | $0.1230 | $0.02897 | 1,000,000 | - | - | - | 1,000,000 | - | [3] [M] |
| 02-Nov-22 | 31-Oct-27 | $0.0550 | $0.03790 | 2,000,000 | - | - | - | 2,000,000 | 2,000,000 | [3] |
| 02-Nov-22 | 31-Oct-27 | $0.0820 | $0.03490 | 2,000,000 | - | - | - | 2,000,000 | 2,000,000 | [3] |
| 02-Nov-22 | 31-Oct-27 | $0.1090 | $0.03260 | 2,000,000 | - | - | - | 2,000,000 | 2,000,000 | [3] |
| 02-Nov-22 | 31-Oct-27 | $0.1360 | $0.03070 | 2,000,000 | - | - | - | 2,000,000 | 2,000,000 | [3] |
| 10-Nov-22 | 10-Nov-27 | $0.1500 | $0.02856 | 4,623,000 | - | - | - | 4,623,000 | - | [3] [M][S] |
| 24-Nov-22 | 23-Nov-25 | $0.0900 | $0.02480 | 3,366,667 | - | - | - | 3,366,667 | 3,366,667 | [2] |
| 10-Feb-23 | 30-Sep-27 | $0.1200 | $0.02446 | 200,000 | - | - | - | 200,000 | - | [4] [M][S] |
| 23-Feb-23 | 01-Jan-28 | $0.0660 | $0.02348 | 3,000,000 | - | - | - | 3,000,000 | 3,000,000 | [4] |
| 23-Feb-23 | 01-Jan-28 | $0.0880 | $0.02110 | 3,000,000 | - | - | - | 3,000,000 | 3,000,000 | [4] |
| 23-Feb-23 | 27-May-25 | $0.2030 | $0.00375 | 1,000,000 | - | - | - | 1,000,000 | - | [3] [M] |
| 10-Aug-23 | 10-Aug-26 | $0.0800 | Nil | 20,123,480 | - | - | - | 20,123,480 | 20,123,480 | [1] |
| 10-Aug-23 | 10-Aug-26 | $0.0800 | $0.01194 | 5,478,790 | - | - | - | 5,478,790 | 5,478,790 | [2] |
| 21-Aug-23 | 21-Aug-27 | $0.0640 | $0.01767 | 1,000,000 | - | - | - | 1,000,000 | 1,000,000 | [3] |
| 26-Sep-23 | 31-Oct-28 | $0.0560 | $0.02122 | 9,134,000 | - | - | - | 9,134,000 | - | [4] [M][S] |
| 26-Oct-23 | 31-Oct-28 | $0.0560 | $0.01785 | 19,181,000 | - | - | - | 19,181,000 | - | [3] [M][S] |
| 24-Nov-23 | 24-Nov-26 | $0.0800 | Nil | 1,375,000 | - | - | - | 1,375,000 | 1,375,000 | [3] |
| 19-Dec-23 | 19-Dec-26 | $0.0800 | Nil | 8,249,937 | - | - | - | 8,249,937 | 8,249,937 | [1] |
| 21-Dec-23 | 21-Dec-26 | $0.0800 | $0.00715 | 3,500,000 | - | - | - | 3,500,000 | 3,500,000 | [2] |
| 113,414,716 | - | - | (11,384,168) | 102,030,548 | 63,341,548 |
[1] Free attaching options since they were issued with issue of shares. No value was attached on initial recognition.
[2] Options issued to broker as consideration for broking services
[3] Director options
[4] Options issued to employees and KMPs
[M] Market based vesting conditions (share price levels) apply to these options
[S] Service-based vesting conditions apply to some or all of the director/employee holders of these options
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NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
South Harz Potash Limited
Note 12. Equity – Performance Rights
| Grant date | Expiry date | Exercise price |
Fair Value | Balance at the start of theyear |
Issued in year |
Exercised in the year |
Expired in the year |
Balance at the end of year |
Exercisable at year end |
Note |
|---|---|---|---|---|---|---|---|---|---|---|
| 28-Nov-24 | 30-Nov-29 | Nil | $0.00993 | - | 8,000,000 | - | - | 8,000,000 | - | [5][S] |
| 28-Nov-24 | 01-Jul-27 | Nil | $0.0099 | - | 5,250,000 | - | - | 5,250,000 | - | [5][M][ S] |
| 28-Nov-24 | 01-Jan-30 | Nil | $0.0099 | - | 8,750,000 | - | - | 8,750,000 | - | [5][M][ S] |
| 28-Nov-24 | 01-Jan-29 | Nil | $0.0099 | - | 5,250,000 | - | - | 5,250,000 | - | [5][M][ S] |
| 28-Nov-24 | 01-Jul-29 | Nil | $0.0099 | - | 12,250,000 | - | - | 12,250,000 | - | [5][M][ S] |
| 28-Nov-24 | 01-Jul-29 | Nil | $0.0099 | - | 9,000,000 | - | - | 9,000,000 | - | [M][S] |
| - | 48,500,000 | - | - | 48,500,000 | - |
[5] Director performance rights
[M] Market based vesting conditions (share price levels) apply to these performance rights
[S] Service-based vesting conditions apply to some or all of the director/employee holders of these performance rights
Note 13. Subsequent events
Project Development Funding
Following the end of the half-year, the Company engaged specialist mining finance advisor Cutfield Freeman & Co to assist with assessing potential project development funding pathways including identifying potential strategic partners to progress the Ohmgebirge project to the Feasibility Study stage and beyond.
Creditor Balances
Following the end of the half-year, the Company agreed with two creditors of its wholly-owned German subsidiary, Sud Harz Kali GmbH (“SHK”) to defer invoice payments totalling approximately €784,772 ($1,313,141) as at 31 December 2024. The outstanding invoices relate to engineering services provided to SHK for the Ohmgebirge PreFeasibility Study by K-Utec and Ercosplan which was announced on the ASX on 22 May 2024 (refer ASX announcement dated 22 May 2024, S ollstedt Mine Purchase, Ohmgebirge PFS & Maiden Ore Reserve ). The balances payable are reflected as current liabilities in the Company’s Statement of Financial Position as at 31 December 2024.
Subsequent to the half year end, the Company has:
-
i. Agreed binding terms with K-Utec to defer the payment of invoices owing, totalling EUR €309,861 ($518,483), until 31 December 2026. The Company is paying interest monthly at a rate of 5% per annum on this amount owed and will continue to do so until the debt has been repaid.
-
ii. Agreed non-binding terms with Ercosplan to defer the payment of invoices owing, totalling EUR €474,911 ($794,658), until 31 December 2026. As part of the terms, the Company has agreed to grant a first ranking mortgage over its interest in the Ebeleben mining lease in Thuringia, Germany, as security for the amount owed. Binding documentation in this regard is being prepared and the parties have agreed a “standstill” in relation to these invoices as the security documentation is being progressed. The Company is paying interest monthly at a rate of 5% per annum on this amount owed and will continue to do so until the debt has been repaid.
Capital Raising
On 28 February 2025, the Company announced that it had completed an initial placement of 29,850,000 new shares at $0.01 per share for gross proceeds received of A$298,500. These shares were issued under the Company’s existing ASX Listing Rule 7.1A placement capacity.
22 | P a g e
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
South Harz Potash Limited
The Company also announced that it had received binding subscriptions for the issue of a further 20,150,000 new shares as follows:
-
5,000,000 new shares to a sophisticated and professional investor, expected to be allotted by 23 April 2025 (also to be issued under ASX Listing Rule 7.1A placement capacity); and
-
15,150,000 new shares to the directors (or their related parties), subject to receipt of shareholder approval at the Company’s next general meeting (which is expected to be held on 23 April 2025). This comprised 6,600,000 shares to Len Jubber (or his related entity), 7,550,000 shares to Rory Luff (or his related entities) and 1,000,000 shares to Reinout Koopmans.
Acquisition of Sollstedt
Activities for the purchase of the neighbouring Sollstedt mine property from Deusa International GmbH (“Deusa”) continued to advance. Due diligence is progressing and the parties are negotiating detailed terms (including arrangements for the asset between document execution and completion of the purchase) to be included in binding definitive transaction documentation, which is set to follow. Subsequent to the half-year end, the exclusivity date agreed with Deusa for the conduct of these negotiations was extended to 31 July 2025.
Note 14. Contingent liabilities
There were no contingent liabilities as at the reporting date.
23 | P a g e
South Harz Potash Limited
Directors' Declaration
-
In the directors' opinion:
-
the attached financial statements and notes thereto comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements.
-
the attached financial statements and notes thereto give a true and fair view of the consolidated entity's financial position as at 31 December 2024 and of its performance for the financial half year ended on that date; and
-
Subject to the completion of the current and potential future capital raises, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of directors made pursuant to section 303(5) of the Corporations Act 2001.
On behalf of the directors
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Len Jubber – Executive Chairman 14 March 2025 Perth
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BDO Centre Level 7, 420 King William Street Adelaide SA 5000 GPO Box 2018 Adelaide SA 5001 Australia
Tel: +61 8 7324 6000 Fax: +61 8 7324 6111 www.bdo.com.au
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INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF SOUTH HARZ POTASH LIMITED
Report on the Half-Year Financial Report
Conclusion
We have reviewed the half-year financial report of South Harz Potash Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2024, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the halfyear ended on that date, material accounting policy information and other explanatory information, and the directors’ declaration.
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the accompanying half-year financial report of the Group does not comply with the Corporations Act 2001 including:
-
i. Giving a true and fair view of the Group’s financial position as at 31 December 2024 and of its financial performance for the half-year ended on that date; and
-
ii. Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .
Basis for conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to the audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001 which has been given to the directors of the Company, would be the same terms if given to the directors as at the time of this auditor’s review report.
Material uncertainty relating to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. Our conclusion is not modified in respect of this matter.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050 110 275 Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
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Responsibility of the directors for the financial report
The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is true and fair and is free from material misstatement, whether due to fraud or error.
Auditor’s responsibility for the review of the financial report
Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 December 2024 and its performance for the half-year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
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BDO Audit Pty Ltd
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Paul Gosnold Director Adelaide, 14 March 2025