b'CENTAURUS METALS ANNUAL REPORT 2023Valuation of exploration and evaluation asset ($13,670,876)Refer to Note 17 to the Financial ReportThe key audit matter How the matter was addressed in our auditThe Groups policy is to capitalise acquisitionOur procedures included:costs in relation to an area of interest, less anyEvaluating the Groups accounting policy to impairment charges recognised. recognise exploration and evaluation assets The valuation of exploration and evaluationagainst criteria of the accounting standard;assets is a key audit matter due to: Assessing the Groups determination of its The significance of the activity to theareas of interest for consistency with the Groups business and the significance ofdefinition in the accounting standards;the balance which is 22.7% of the totalFor the significant areas of interest, we assets balance; andassessed the Groups current rights to tenure. The greater level of audit effort to evaluateThis included checking the ownership of the the Groups application of the requirementsrelevant license for mineral resources or of the accounting standard AASB 6reserves to government registries;Exploration for and Evaluation of MineralEvaluating the Groups documents for Resources, in particular the presence ofconsistency with their stated intentions for impairment indicators. The presence ofcontinuing exploration and evaluation activities impairment indicators would necessitate ain certain areas. This included:detailed analysis by the Group of the value of exploration and evaluation assets.- The Groups internal plans and budgets.Given the criticality of this to the scope and- Minutes of board and internal meetings.depth of our work, we involved senior team- We challenged this through interviews members to challenge Groups determinationwith key operational and finance that no such indicators existed. personnel.In assessing the presence of impairment- Announcements made by the Group to indicators, we focused on those which maythe Australian Securities Exchange draw into question the commercial continuationincluding results from latest activities and of exploration and evaluation activities wherestudies performed.significant carrying value of capitalised exploration and evaluation expenditure exists.Evaluating the capacity of the Group to fund In assessing the presence of impairmentthe continuation of activities by assessing indicators, we focussed on those that mayunderlying documentation including corporate draw into question the commercial continuationbudgets. We obtained project and corporate of the E&E activities. In addition to thebudgets identifying areas with existing funding assessments above, and given the volatileand those requiring alternate funding sources. nickel prices and financial position of the Group,We compared this for consistency with areas we paid particular attention to: with exploration and evaluation, for evidence of the ability to fund continued activities.Documentation available regarding rights toWe analysed the Groups determination of tenure, via licensing with the government,recoupment through successful development and compliance with relevant conditions, toand exploitation of the area, or through maintain current rights to an area ofcontinued exploration and evaluation activitiesinterest; by evaluating the Groups documentation of The Groups intention and capacity toplanned future/continuing activities including continue and fund the relevant explorationwork programs and project and corporate and evaluation activities;budgets for a sample of areas; The results from latest activities regardingEvaluating the Groups disclosures by the existence or otherwise of economicallycomparing to our understanding and the recoverable mineral resources or reserves;requirements of the accounting standards; andand We assessed the impact of the volatile nickel 78 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 79'