ANNUAL Report June 2023 Notes to the Consolidated Financial Statements 47 21. STATEMENT OF CASH FLOWS 22. CONTRACT LIABILITIES 2023 $ 2022 $ Contract Liability - Sublease1 Current 1,768,851 405,851 Non-current - 1,432,259 1,768,851 1,838,110 Contract Liability - Offtake2 Balance at beginning of the year 3,266,190 2,323,423 Plus: Offtake extension (final draw down) 1,482,960 689,265 Less: Unrealised foreign exchange (gain) / loss 152,811 253,502 4,901,961 3,266,190 1 Mt Carbine Sublease Rent prepaid to Mt Carbine Quarries Pty Ltd as per the Retreatment Operations Sublease Agreement between Mt Carbine Quarries Pty Ltd, CRONIMET Australia Pty Ltd and Mt Carbine Retreatment Pty Ltd. 2 The Company’s wholly owned subsidiary and 50% unincorporated joint venture partner, Mt Carbine Retreatment Pty Ltd’s, Offtake Advance recognition. The Loan is denominated in USD and the terms and repayment of this advance are governed by the Offtake Advance Agreement between CRONIMET Asia Pte Ltd, CRONIMET Australia Pty Ltd and Mt Carbine Retreatment Pty Ltd. A further offtake prepayment facility of US $3 million was secured from the Company’s joint venture and offtake partner, CRONIMET Asia Pte Ltd with US $1 million of this additional facility being drawn as at 30 June 2022 (refer ASX Announcement “CAPEX Funding for Mt Carbine Expansion Secured” dated 2 May 2022). Note: The Company’s wholly owned subsidiary and 50% unincorporated joint venture partner, Mt Carbine Retreatment Pty Ltd’s, interest in the offtake prepayment equates to 50% of the total prepayment facility. The contract liability arrangements for the Offtake Advance are secured as follows: general security deed from Mt Carbine Retreatment Pty Ltd over its present and subsequent acquired assets; general security deed from CRONIMET Australia Pty Ltd over all its present and subsequent acquired assets; and Reconciliation of net cash outflow from operating activities to operating loss after income tax 2023 $ 2022 $ (a) Operating profit / (loss) after income tax (3,716,846) (6,063,051) Depreciation and amortisation 1,424,079 939,592 Share based payments expense 674,837 411,648 Amortised finance expense 1,072,449 540,523 Gain on disposal of assets - - Loss on disposal of assets 119,352 36,421 (Revaluation) Devaluation of investment to market value 387 (1,933) Unrealised foreign exchange (gains) losses 221,964 372,958 R&D tax offset capitalisation 39,427 - Change in assets and liabilities: Decrease (Increase) in receivables (6,349,632) (702,863) Decrease (Increase) in other assets (322,694) 98,068 Increase/(decrease) in trade and other creditors 5,444,049 1,255,867 Net cash outflow from operating activities (1,392,628) (3,112,770) (b) For the purpose of the Statement of Cash Flows, cash includes cash on hand, at bank, deposits and bank bills used as part of the Company’s cash management function. The Company does not have any unused credit facilities. The balance at 30 June 2022 comprised: Cash assets 5,335,596 1,723,426 Cash on hand and at Bank 5,335,596 1,723,426 EQ Resources Limited Annual Report 2023 89
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