Corporate Directory
Directors
Katina Law, (Executive Chair)
Ian Buchhorn, (Executive Director)
Wayne Bramwell, (Non-Executive Director)
Chief Executive Officer (CEO)
Andrew Penkethman
Company Secretary and CFO
Sam Middlemas
Registered and Business Office
Suite 2, 45 Ord Street, West Perth
Western Australia 6005
PO Box 1433, West Perth
Western Australia 6872
Tel:
Email:
(08) 6244 5136
info@ardearesources.com.au
Website
www.ardearesources.com.au
Auditor
Butler Settineri (Audit) Pty Ltd
Unit 16, Level 1
100 Railway Road
Subiaco WA 6008 Australia
Share Registry
Security Transfer Australia Pty Ltd
Alexandrea House, Suite 1
770 Canning Highway
Applecross WA 6153 Australia
Tel:
Fax:
Email:
+61 8 9315 2333
+61 8 9315 2233
registrar@securitytransfer.com.au
Stock Exchange Listing
The Consolidated Entity’s shares are
quoted on the Australian Securities Exchange.
The Home Exchange is Perth.
ASX Code: ARL - ordinary shares
Table of Contents
Chairman’s Letter ...................................1
Activities Report......................................2
Directors’ Report...................................21
Consolidated Statement of
Comprehensive Income ....................35
Consolidated Statement of
Financial Position .............................36
Consolidated Statement of
Changes in Equity ............................37
Consolidated Statement of
Cashflows ........................................38
Notes to the Financial Statements ......39
Directors’ Declaration ..........................53
Independent Auditor’s Report...............54
Shareholder Information .......................58
Tenement Schedule..............................60
Glossary ...............................................64
Cover - Ardea has exposure to the renewable energy sector through the Goongarrie Nickel Cobalt Project; the WA gold and nickel sulphide
exploration expansion; and most notably, the gold discovery renaissance in the Lachlan Fold Belt, NSW
Inside cover - Ardea CEO, and Board on site visit to Goongarrie
ABN: 30 614 289 342
Chairman’s Letter to Shareholders 2019
Dear Shareholders,
On behalf of the Board and Executive Management team of Ardea Resources Limited (“Ardea”
or the “Company”) I would like to thank you for your support during the many advances of 2019.
Over the past year Ardea have continued to work tirelessly on our high-quality portfolio of
Australian resource projects. Work efforts have been focussed on our three core priorities:
1.
2.
3.
Development of the Goongarrie Nickel Cobalt Project (GNCP), which is part of our globally
significant Kalgoorlie Nickel Project (KNP).
Exploration on WA gold and nickel sulphide targets within the Eastern Goldfields world-class gold-nickel province; and
Demerger of our NSW gold and base metal assets into Godolphin Resources Limited (Godolphin).
The work has resulted in significant progress on all three strategies with Ardea being in the enviable situation of effectively
having three high-quality resource companies in one, highlighting the need for the Godolphin spin-out.
On the GNCP, Ardea has now completed 50,561m of drilling since listing in February 2017, with this data being incorporated
into an upgraded flowsheet, resource update and mining schedule. Work continues on several project work streams including
permitting activities, on-site neutraliser and water sources.
In a weakening cobalt market but strengthening nickel market, the Strategic Partner search with KPMG has been steady
and methodical, with strong interest for securing nickel and cobalt off-take. Timing is key here as Ardea retains 100% off-
take rights and seeks a significant funding commitment from a Strategic Partner who will determine the optimum project
scale and end product specifications that best fits their strategic needs.
Multiple gold targets have been defined within our extensive WA tenure with targets such as the regionally significant Bardoc
Tectonic Zone being ranked and prioritised for follow up exploration. Given the record high Australian dollar gold price,
Ardea will continue to advance WA gold opportunities in parallel with our existing nickel laterite and sulphide assets. Multiple
gold targets are currently having drill approvals submitted.
Several nickel sulphide targets have been identified within our WA tenure such as the Cathedrals Belt on the western margin
of the highly prolific Eastern Goldfields Province. At our Perrinvale Project, Ardea commenced a moving loop electromagnetic
(MLEM) survey over selected portions of the Cathedrals Belt East Extension and utilises a similar methodology that
successfully identified other targets to the west of Ardea’s tenure in this prospective belt.
Other nickel sulphide targets such as Emu Lake have defined nickel sulphide fertility and historic electromagnetic (EM)
targets. Additional targets continue to be defined throughout the Ardea tenure.
The planned listing of Godolphin, Ardea’s NSW gold and base metal spin-out, continues. A dedicated management team
has been assembled and exploration and resource definition targets defined for immediate drill testing post listing. The
listing will include an in-specie share distribution to existing Ardea Shareholders, enabling them to continue to share in the
future success of Godolphin.
The progress made by the Company would not be possible without the ongoing support of the communities in which Ardea
operates and our employees, directors and consultants. I would like to thank you all for your support.
The year ahead is shaping up as another exciting opportunity for Ardea to continue to realise the
potential of its significant and strategic land holding in the heart of the Goldfields, Western Australia
and in the Lachlan Fold Belt of New South Wales, Australia’s two premier discovery and mining
jurisdictions.
Yours sincerely
Katina Law, Chair
Ardea Resources Limited & controlled entities - Annual Report 2019
1
Activities Report
Corporate Objectives
Ardea is an exploration and development Company with a high-quality portfolio of 100%-controlled Australian-based projects.
The Company is focussed on its three-pronged value creation strategy:
1.
2.
3.
Development of the Goongarrie Nickel Cobalt Project, which is part of the Kalgoorlie Nickel Project, a globally
significant series of nickel-cobalt-scandium deposits which host the largest nickel-cobalt resource in the developed
world, coincidentally located as a cover sequence overlying fertile orogenic gold targets;
Advanced-stage exploration at WA gold and nickel sulphide targets within the Eastern Goldfields world-class nickel-
gold province; and
The Godolphin Resources Limited demerger of the NSW gold and base metal assets with planned in-specie share
distribution at nil cost to Ardea Shareholders.
Ardea’s most advanced and flag ship project is the GNCP. The current mineral resource at Goongarrie is 215.6Mt at 0.71%
nickel and 0.06% cobalt, equivalent to 1,522,700 tonnes contained nickel metal and 130,700 tonnes of contained
cobalt metal. The Goongarrie resource is a subset of Ardea’s larger Kalgoorlie Nickel Project resource, being 773.0Mt at
0.70% nickel and 0.05% cobalt, equivalent to 5,458,400 tonnes contained nickel metal and 405,400 tonnes of contained
cobalt metal. This is the largest nickel and cobalt deposit in Australia and one of the top ten largest resources in the world.
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
)
t
M
(
*
t
n
e
l
a
v
i
u
q
e
l
e
k
c
i
n
d
e
n
a
t
n
o
C
i
AUSTRALIAN PEERS
KNP
Ravensthorpe
Mount Margaret
Murrin Murrin
West Musgrave
GNCP
GNCP
GNCP
Central Musgrave
Thackaringa
Clean TeQ Sunrise
Young
0
Contained nickel equivalent* grade (%)
0.2
0.4
0.6
0.8
1.0
1.2
GLOBAL PEERS
KNP - Largest and only Australian Nickel Project of any type
amongst the top 10 globally by contained metal
Contained nickel equivalent* (Mt) - Top 10 nickel projects - all project types
7.5
0
10.0
12.5
5.0
2.5
Critically, these projects represent a world
class multi-commodity deposit in a stable and
well-established mining jurisdiction that is
well-placed to deliver “ethical” materials of
accepted provenance into a rapidly expanding
battery and electrified vehicle sector.
Nickel, cobalt and manganese batteries are
the most common cathode mix used in
(EV) batteries. Recent
Electric Vehicle
developments in battery technology are
seeing more manufacturers commit to nickel
dominant 811 batteries (8 parts nickel, 1 part
manganese, 1 part cobalt). This is contributing
to increasing world nickel demand. Of all the
critical battery minerals, nickel reserves are
the least abundant which positions the
commodity price to appreciate in line with
growing EV and stainless demand.
Ardea is seeking to become a significant
producer of nickel and cobalt battery materials
from the GNCP.
Polar Division
Clarion-Clipperton
Pomalaa
Weda Bay
Jinchuan
Tapunopaka
Ardea’s KNP
Dumont
Gag Island
Punta Gorda
Russia
29.8Mt
international waters
17Mt
Indonesia
Indonesia
China
Indonesia
GNCP
Canada
Indonesia
Cuba
KNP Laterite project
Other laterite projects
Sulphide projects
Seafloor nodule project
Source: SNL database & Ardea Company data (KNP only).
* Nickel equivalents defined using the following values (9 July 2019, US$ price):
Ni ($12,646.50/t), Co ($26,647/t), Cu ($5,808.50/t). Ni equivalent grade (Ni eq. %)
= Ni(%) + 2.107xCo(%) + 0.459xCu(%). Recoveries were not considered for high-
level comparison purposes. These values used for nickel equivalent calculations
throughout this document. Nickel equivalents are used because nickel is the major
proportion of the deposit by value, and these values allow for direct comparison to
major deposits globally.
2
Ardea Resources Limited & controlled entities - Annual Report 2019
continued
The Company continues to review its project portfolio and is ranking and prioritising WA gold targets for exploration and
resource definition. This provides additional optionality and positions Ardea to be able to consider a range of commodities
in well-established mining jurisdictions where any development can leverage off existing infrastructure.
Recent gold exploration work programs include BTZ drilling, where possible, incorporated into sterilisation drilling around
the GNCP. Mapping, soil auger geochemistry and rock chip sampling around Ghost Rocks, Mulga Plum, Windanya, Taurus
and Bedonia continues to define targets for follow-up exploration.
Nickel sulphide exploration continues and includes EM surveys at Perrinvale, drilling at Emu Lake, Mt Zephyr and Big Four,
and some geometallurgical interpretations for Highway, Kalpini and Yerilla.
A measured exploration approach will continue to define quality targets on Ardea’s extensive tenement portfolio with the
goal of making discoveries which can add further value to the Company. The gold targets in particular are becoming a
focus as the Australian dollar gold price continues to appreciate.
Goongarrie Nickel Cobalt Project
Overview
Ardea continues to advance the Goongarrie Nickel Cobalt Project with a focus on delivering the best outcome for
Shareholders. Progress over the last 12 months and ongoing work streams include:
•
•
•
•
•
•
•
•
Strategic Partner Update – Interest in securing nickel and cobalt off-take from the GNCP remains high, with a key
Ardea criteria being that offtake rights are linked to a project funding commitment.
The Ardea executive management team continue to progress discussions with potential international project partners,
alongside our advisors, KPMG. A final commitment to completing the Definitive Feasibility Study on the GNCP is linked
to the partnership process, so that the preferred partner can have input as to the project scale and end-product
specifications.
Resource Update – Wireframe modelling has focussed on Material Characterisation and metallurgical properties for
the Goongarrie South, Big Four and Scotia Dam deposits which collectively extend over 17km of strike. A resource
and reserve update will be completed once the project scale is settled.
High Grade Mine Schedule – Open pit optimisations and detailed mine scheduling, including tailings pit back-fill
schedule, waste landform locations and pit de-watering are in progress utilising the updated GNCP wireframes and
block models. The objective is to focus upon higher grade mining areas during the GNCP capital payback period,
combined with sourcing carbonate during open pit mining that can be used as a local source of process plant
neutraliser. This work is expected to be completed in H2 2019.
Mineralised Neutraliser – First and second phase neutraliser bench-scale research test-work has demonstrated
viable on-site neutraliser results. These results are being incorporated into the mine scheduling work which is expected
to allow their value to be captured in updated financial models.
Metallurgical Variability Work – Final laboratory reports are being reviewed for input into the current mine schedule
study and flowsheet design.
Approvals –Reports for all flora, fauna and water surveys commissioned in 2018 have been reviewed and
consolidated, as inputs to the mine site layout design and mine schedule. Ardea will not lodge any development
applications with the various State authorities until the scale and footprint of the GNCP is finalised, which is linked to
the ongoing Strategic Partner process.
Tenement Consolidation – GNCP tenure is being consolidated and adjoining infrastructure sites secured. Some of
the new acquisitions include opportunistic gold and nickel sulphide targets, which are being evaluated and ranked for
future exploration.
Stakeholder Engagement – Strong support continues to be received from the Local Government and Community as
part of the ongoing Stakeholder engagement process.
Ardea Resources Limited & controlled entities - Annual Report 2019
3
Activities Report
Feasibility Programs
Work during the year was focussed on resource modelling, pit optimisations, mine planning, metallurgy, environmental
studies, permitting and availability of infrastructure sites. These programs shape and define the planned site layout, which
is the critical parameter for the approvals process.
Kalpini: re-visiting the nickel laterite deposits with an eye for the gold which
invariably accompanies the nickel structures.
Resource Modelling
Updated resource modelling incorporating the results from the Ardea RC drilling completed in late 2018 focused on the
Goongarrie South, Big Four and Scotia Dam deposits. These models need to be consolidated and optimised, prior to
reporting.
The mineralisation at the Goongarrie deposits is remarkably consistent, occurring as a uniform goethite sheet beneath a
barren lateritised alluvial cover and above a carbonated saprock basement. In the resource modelling, the “Base of Alluvium”
and “Top of Saprock” are the key contacts. The goethite material between these two contacts uniformly exceeds 0.5% Ni,
which fortuitously is also the mineral resource cut-off grade for the GNCP.
The alluvium is comprised of clay, quartz sand, re-worked haematite clast gravel, and most importantly, a gravel cemented
with nodular dolomite or magnesite which carbonate can be used for neutralising the autoclave acidic discharge. All alluvium
variants have distinct geochemical signatures, which are the basis for interpreting the Base of Alluvium in resource modelling.
The nickel-cobalt laterite mineralisation is invariably associated with the hydrated iron oxide mineral, goethite, which is the
preferred plant feed for this style of deposit, as it has rapid leach kinetics and does not require drying or screening prior to
processing. The geometallurgy of the GNCP has been well defined using Ardea’s combination of visual logging, detailed
geochemical analysis and X-ray Diffraction (XRD) mineral identification.
The base of laterite mineralisation is defined by the “Top of Saprock”. Saprock is an indurated weathered bedrock consisting
variously of dolomite-magnesite-silica-serpentine. The hard competent saprock contrasts sharply with the overlying soft
goethite mineralisation, so will allow excellent visual grade control in mining. The saprock dolomite and magnesite are a
potential GNCP neutraliser source as are the near surface calcrete and palaeo channel horizons.
Updated wireframe model extents of the nickel and cobalt mineralisation at Goongarrie have been modelled based on
notional 0.25% nickel and 0.05% cobalt cutoff grades and are displayed in plan view in Figures 1 and 2. Additional features
interpreted and modelled to constrain the updated resource estimates include the base of near surface calcrete and dolomite,
envelopes capturing paleochannel carbonate mineralisation, the “Base of Alluvium” and the “Top of Saprock”.
4
Ardea Resources Limited & controlled entities - Annual Report 2019
continued
Resource grade estimation used local uniform conditioning for nickel (Ni) and cobalt (Co), and ordinary kriging for MgO,
FeO, Al2O3, SiO2, CaO, Mn, Cr and LOI. The block model geochemistry allows specific Material Characterisation attributes
to be assigned to each block within the 3D model. The blocks in the current model are 10x10x2m, compared to 40x40x4m
in historic GNCP block models. The smaller block size facilitates more accurate mine scheduling.
Representative cross sections of the drilling and updated resource model through Goongarrie South are displayed in Figures
3 to 6. Figure 3 shows the drilling and geology interpretation. Figure 4 shows the resource model colour coded by the
material type classification scheme for the GNCP while Figures 5 and 6 display the same cross sections colour coded by
the updated nickel and cobalt grade estimates. A description of the GNCP material types (as used at Goongarrie) is
presented in Table 1.
Big Four &
Scotia Dam
Nickel and Cobalt
resource envelopes
2km
Goongarrie South
Nickel and Cobalt
resource envelopes
2km
.
6674000N
6672000N
6670000N
6668000N
E
0
0
0
2
2
3
E
0
0
0
4
2
3
Figure 1: Goongarrie South drill hole location plan showing the nickel
and cobalt resource envelopes. Projection MGA94 Zone 51.
6664000N
6662000N
6660000N
6658000N
Figure 2: Big Four and Scotia Dam drill hole location
plan showing the nickel and cobalt resource
envelopes. Projection MGA94 Zone 51.
6656000N
E
0
0
0
2
2
3
E
0
0
0
4
2
3
Ardea Resources Limited & controlled entities - Annual Report 2019
5
Activities Report
Figure 3: Pamela Jean Deeps (part of the Goongarrie South mineral system) Section 6669600 (looking north).
Figure 4: Goongarrie South Material type classification - Section 6669600mN
6
Ardea Resources Limited & controlled entities - Annual Report 2019
continued
AGSD0010 - Goethite dominated ore zone
(approx 1m core shown
over pages 6 & 7
Figure 5: Pamela Jean Deeps - Nickel % Block Model - Section 6669600 (looking north).
Figure 6: Pamela Jean Deeps - Cobalt % Block Model - Section 6669600 (looking north).
Ardea Resources Limited & controlled entities - Annual Report 2019
7
Activities Report
Table 1: Description of GNCP material types for reference with Figure 3 & 4
Code
Description
Profile
PSQH
PSQB
PCFB
ALB
ACK
ALQK
LAFKH
CUGU
CUGK
CUGF
CUGZ
CUGS
CUSG
CLGEC
CLSG
SRE
SRES
SREB
SRSB
SRB
Pedolith
Pedogenic sand, quartz & haematite
Pedogenic sand, quartz & carbonate - calcite and / or dolomite
Pedogenic clay, Fe oxide & carbonate rich - calcite and / or dolomite
Alluvial (Transported)
Alluvial channel with carbonate cemented sediments
Alluvial clay, kaolinite rich
Alluvial sand, quartz and kaolinite rich
Laterite ferruginous, goethite + kaolinite + haematite
Clay Upper
Clay Lower
Saprock
goethite + gibbsite
goethite + kaolinite
goethite + undifferentiated Fe oxide
goethite + asbolite
goethite + silica
silica + goethite
goethite + serpentine + chlorite
silica + goethite
serpentine dominant
serpentine + silica
serpentine + dolomite and / or magnesite
serpentine + silica + dolomite and / or magnesite
dolomite and / or magnesite dominant
A strong correlation exists between high nickel-cobalt grades and the material type CUGZ, being a goethite-asbolite variant
of mineralisation (grey colour unit in Figure 4).
An important feature of the GNCP is that the “Saprock Neutralisers” SREB, SRSB, SRB, tend to occur at the base of the
nickel-cobalt mineralisation. As such, these neutraliser source zones are expected to be captured within the walls and
possibly floor of optimised open pit shells, once mine design work has been completed. This feature, along with the ancillary
nickel and cobalt credits generated in such neutraliser, is an important and valuable attribute of the GNCP that enhances
project economics. Additionally, PSQB surface calcrete, which is a free-digging, nil cost neutraliser, is currently considered
a prime neutraliser (but lacks the pay-metal credits of saprock neutraliser).
BTZ: Gold sampling
8
Ardea Resources Limited & controlled entities - Annual Report 2019
continued
High Grade Mine Schedule
Open Pit Optimisation work utilising the updated block model from Goongarrie is being undertaken to define an optimum
mine schedule which considers High Grade (HG) and Life of Mine (LOM) planning. The HG strategy is aimed at maintaining
consistent plant feed in the early years of operation, once plant commissioning has been completed, to ensure maximum
revenue for expediting the project payback period.
The Pit Optimisation results are also looking at different on-site neutraliser material that would support mill feed requirements
for the entire LOM plan. Sourcing of all GNCP neutraliser onsite and elsewhere in the KNP is expected to result in improved
outcomes for the project by eliminating the need to import either externally sourced neutraliser material and/or commercial
grade carbonate product. Sequencing and prioritising of the neutraliser sources identified will be confirmed during the final
mine scheduling work.
Metallurgical Variability Work
On-site Neutraliser Testwork
Following the encouraging results from the preliminary neutralisation test-work performed on Goongarrie South drill core
samples, which indicated that calcrete, palaeo-channel and saprock carbonates are all effective neutralisers, size-by-size
chemical analysis of nine prospective neutralisers was conducted at SGS laboratories. Preliminary assay results have been
presented ahead of a full report. An initial review of the results indicates that moderate upgrading of the nickel, calcium and
magnesium occurs in the finer fractions (-106 micron). Final results and a summary report are awaited to close out this
important, potentially value adding work stream.
Environment and Approvals
The Goongarrie Nickel Cobalt Project is part of the larger Kalgoorlie Nickel Project (see Figure 7) and is being designed to
minimise its environmental foot-print. Key attributes include:
•
•
•
•
•
•
The strip ratio is low at approximately 2:1,
minimising project waste generation.
Waste is either used for construction of
infrastructure, progressive back-fill of
exhausted pits, rehabilitating completed mine
areas or where no alternative, placed within
integrated waste landforms.
Tailings are deposited in exhausted pits or if
no voids available, discharged to integrated
waste landforms.
Early-mined nodular surface laterite waste is
particularly well suited as road base for site
access roads or rehabilitation materials.
The ultramafic mine waste from anecdotal
observation favours local flora assemblages
for revegetation.
There are no indications of Acid Mine
Drainage risk.
Updated baseline studies have been reviewed and
are in the process of being finalised for future
statutory approval lodgement.
Figure 7: KNP location and infrastructure plan
Ardea Resources Limited & controlled entities - Annual Report 2019
9
Activities Report
Taurus: Soil sampling is the first step in evaluating gold and nickel sulphide potential
Water supply options continue to be investigated with sources identified including aquifers associated with palaeo-channels
(within granted Ardea mining tenure) and where possible linked to pit de-watering, and outlying areas also covered by Ardea
tenure. Work has been advancing on defining optimum process water sources including detailed water sampling and
monitoring of around 80 GNCP open drill holes. Bench-scale testwork was completed using membrane separation as a
cost-effective alternative to chemical-based water softening.
Studies on Materials Characterisation of the overburden excavated during the normal course of mining continue.
Opportunities identified to date include that specific waste material is better suited to varying civil uses, such as mottled
nodular laterite for haul roads, nontronite clay for settling dam liner and indurated laterite for pit ramp sheeting. Each of
these uses helps contribute to minimising the surface footprint of waste landforms.
GNCP is favoured by a benign arid environmental setting, which is much easier managed than wet tropical settings requiring
submarine tailings disposal or valley-fill tailings dams. These environmental attributes favour GNCP as a future stable long-
term source of the nickel and cobalt that the Electric Vehicle and Static Storage Battery industries increasingly favour.
10
Ardea Resources Limited & controlled entities - Annual Report 2019
continued
Processing and Product Research and Development
The GNCP has had several unique attributes identified in Ardea Research and Development (R&D) programs, including:
•
•
•
•
•
•
Carbonate is necessary for neutralising autoclave discharge – Recent focus has been upon neutraliser material
in surface calcrete (termed “Pedogenic Sand Quartz Calcite”), and at the base of ore zones (termed “Saprock Dolomite
and / or Magnesite”).
Surface Carbonate with Ore Grade Pay-Metals – R&D studies covering the full KNP historic data base has identified
significant surface carbonate resources at Aubils in the KNP East with shipping grade Ni and Co. Financial modelling
is required in order to quantify the displacement potential of the Aubils carbonate.
Comminution media available from mine sub-grade – A very specific geo-metallurgical ore type that is a biscuity
goethite ore that has been re-cemented by massive haematite or “jasper” at the top of the orebody to generate a highly
indurated rock which is potentially available as SAG mill grinding media.
Comminution media as mine floor sheeting – Trafficability on wet ore for mine vehicles was identified as a potential
mining issue, solved by the use of Articulated Dump Trucks. Additionally, research identified that the “Comminution
Jasper” would be ideal as a road sheeting in wet ore, since the material when mined from the road on the following
bench down would then act as comminution media for the SAG mill.
Tailings research has demonstrated exceptional filtration ability – Facilitating both high density slurry and dry-
stack tailings disposal.
Detailed core logging combined with multi-element geochemistry and XRD mineralogy has identified potential
co-products – Including scandium oxide (scandia) and manganese sulphate from the HPAL/MS circuit, and in the laterite
overlying the Ni-Co-Sc ore zones recoverable High Purity Alumina (HPA, kaolin as precursor), scandium, vanadium and
Rare Earth Elements (REE). The study has also generated Material Characterisation algorithms that allow mine waste
to be variously characterised for environmental use around waste landforms and tailings management.
Geo-metallurgical/Geological Research and Development
A geological model has been developed for the KNP (including GNCP) which consolidates the current 1,093 holes for
50,561m of Ardea drilling since listing in February 2017. The Ardea model focuses on the mineralised regolith (the weathered
mantle), and its relationship to the underlying protolith (the unweathered ultramafic bedrock which is the ultimate source of
the pay metals).
High Purity Alumina
The research focus is the early-mined pits at Patricia Anne and Pamela Jean. Research in respect of the north Pamela
Jean area has identified a kaolin playa lake. The kaolin is pure white with “camembert cheese texture“ and a distinctive
“blue” tinge in drill core. The material is clearly a coating grade kaolin and thus a potential feedstock for HPA.
For HPA production, research indicates two acid solvent possibilities:
•
•
Mottled Laterite with Sc-V-Nd-Pd credits (1g/t PGM at Black Range), use hydrochloric acid as the solvent, to recover
AlCl3 which is then calcined to HPA.
Goethite-kaolinite-gibbsite laterite with Ni-Co-Sc in the upper nickel ore zone, HPAL H2SO4 as the solvent, and then
treating the tailings to remove saleable Al.
Rare Earth Elements
With increased world-demand for Rare Earths reflecting their use in wind-turbine electricity generation and Electric Vehicle
motors, desk-top research was completed on the full Ardea drill hole data base, defining multiple REE laterite settings.
Initial R&D desk-top research has focussed on REE recovery in the GNCP flow-sheet using a parallel circuit with scandium,
utilising Ion Exchange from the autoclave discharge.
Historic REE drill intercepts were identified throughout the GNCP, notably:
•
•
0.15% Ce
0.08% Nd-0.02% Pr
ABFR0164, 12-14m, east pit crest at Mavis Irene (Big Four).
AGSR0392, 28-30m, east pit crest at Patricia Anne.
The REE enrichment mirrors Ni-Co enrichment being at the Magnesia Discontinuity within the regolith profile. This means
the REEs are present in the autoclave feed in any event, constituting a potential additional credit.
The R&D desk-top program has identified that the east pit crests are the most favourable REE enrichment site, reflecting
the contact of Walter Williams Formation olivine-rich rock (source of Ni-Co) and Siberia Komatiite alkaline volcanic (source
of REEs).
Ardea Resources Limited & controlled entities - Annual Report 2019
11
Activities Report
50km
PERRINVALE
LEGEND
Goongarrie Nickel
Cobalt Project (GNCP)
GNCP Expansion Hub
KNP East
Gold (Au) & Nickel Sulphide (NiS)
Nickel Laterite (Ni-Co-Sc)
Nickel Laterite which incl NiS & Au targets
Gold (Au) & Nickel Sulphide (NiS) targets
Gold - significant
occurrences
Greenstone belts
Granites
MULGA PLUM
AUBILS COBALT
HIGHWAY
GOONGARRIE
BLACK RANGE
WINDANYA
BULONG
BEDONIA
Figure 7: Ardea’s Western Australian projects
12
Ardea Resources Limited & controlled entities - Annual Report 2019
continued
WA Gold and Nickel Sulphide projects
Ardea has a significant number of additional projects outside of the GNCP. Most of these projects host nickel-cobalt laterite
resources (that could supplement future GNCP production), but also host significant “greenfields” gold and/or nickel sulphide
mineralisation (see Figure 7).
The Ardea WA tenure covers approximately 3,500km2 and represents a strategic land holding in one of Australia’s premier
gold and nickel sulphide provinces. The KNP, Perrinvale, Mt Zephyr and Bedonia projects are all highly prospective for both
gold and nickel sulphides.
In light of the record high Australian dollar gold price, Ardea has increased its exploration for gold mineralisation and is
considering strategic opportunities which complement existing projects.
At Big Four, review of archived government records has identified historic 1980s drilling with intercepts of up to an ounce
per tonne gold. A JORC compliant resource may be feasible once Ardea can complete confirmatory RC drilling.
Additional work has been approved to follow up on encouraging first phase Ardea reconnaissance gold results from Ghost
Rocks, Mulga Plum, Taurus and Windanya. There is clear potential to define areas of old battery sands and mullock that
are amenable to low volume, shallow-level mining and toll-mill opportunities.
The following summary provides an update on Ardea’s main WA projects.
Bardoc Tectonic Zone
Ardea’s GNCP is unique among the world’s lateritic nickel-cobalt deposits in that it has
developed on ultramafic rocks that are within and a part of a major, crustal-scale gold-
mineralised structure being the Bardoc Tectonic Zone (BTZ). The BTZ hosts, from south to
north, the Paddington, Goongarrie, Comet Vale and Menzies gold mining centres (see Figure
8).
Ardea controlled tenements covering from south to north, Windanya, GNCP, Comet Vale,
Highway and Ghost Rocks, extend over 64km of the regionally significant BTZ (see Figure
7). The majority of the BTZ on these project areas is obscured by shallow cover and or the
development of the nickel laterite profile. For this reason, historic gold mining and exploration
is limited, but Ardea’s work has confirmed consistent gold prospectivity and further work is
planned to unlock the gold potential
of these under-explored projects.
Ardea within
the GNCP has
demonstrated that strong, laterally
extensive gold anomalism is present
beneath the full 17 km strike length
of the nickel-cobalt deposits. The
exceptional thickness and grade of
the GNCP laterite is interpreted to
be directly attributable to deep and
intense weathering along BTZ
bedrock
structures,
shear
particularly at the eastern contact of
the Walter Williams Formation
(WWF) laterite host rock with the
stratigraphically overlying Siberia
Komatiite. These same “laterite”
structures in the current studies
have had extensive gold anomalism
confirmed (see Figure 8).
Figure 8: Gold endowment along the
Bardoc Tectonic Zone and the
contiguous Boulder-Lefroy Fault, after
Hodkiewicz et al. 2005.
Ardea Resources Limited & controlled entities - Annual Report 2019
13
Activities Report
Big Four: Aircore reconnaissance drilling
Since their discovery, the lateritic deposits of the Goongarrie area have been extensively drilled and assayed for a range of
elements, but only sporadically including gold. Where gold assay information is available, the results were generally
overlooked by previous explorers.
Work is ongoing to define the likely controls on gold mineralisation at each known occurrence, which is utilising geochemical
data in conjunction with interpretation of Ardea’s proprietary high-resolution magnetic datasets and digitisation of historic
data where available. Collation and integration of these datasets has enabled the design of follow up drill programs to test
gold anomalies at depth.
As well as the main focus gold targets, 2019 sterilisation aircore drilling has identified geological settings prospective for
nickel sulphide (Scotia nickel sulphide mine immediately east of Ardea GNCP tenure), Volcanogenic Massive Sulphide
(VMS) of the Jaguar-Bentley style, nickel laterite in olivine cumulate facies of the Siberia Komatiite, magnesite neutraliser
in WWF and Siberia Komatiite, scandium-vanadium laterite and Rare Earth Elements in alkaline volcanics.
Ghost Rocks gold
The Ghost Rocks project area is located northwest of historic gold mining town Menzies (see Figure 7). Several prospect
areas have been identified. Lady Isobel is associated with the BTZ at the northeast contact of the Ghost Rocks WWF nickel
laterite. The Lady Isobel line of lode includes a major, historic underlay shaft, with Ardea mullock assays of up to 5.3g/t Au
(Ardea Prospectus).
The Twelve Mile Base Metal Prospect has returned up to 0.6% Ni with 14.3% Cu in historic 1969 and 1974 rock-chip
samples. A soil auger drilling and rock chip sampling program has been completed by Ardea, with low-order gold targets
defined. Further work is being planned.
Additional tenure has been secured through purchases and application for open ground as it became available.
Mulga Plum gold and VMS base metal-sulphur
The Mulga Plum Prospect is a gold-base metal-sulphur VMS target located 40km NE of Menzies between Ardea’s Menzies
and Aubils projects (see Figure 7). The properties are subject of a three year option with a prospector.
A surface mapping program commenced to assist with delineating controls on gold mineralisation and to delimit drill hole
orientation for a shallow RC drilling program to confirm near-surface gold mineralisation and the potential for a resource to
be defined. Ardea sampling of old workings returned up to 3g/t Au.
14
Ardea Resources Limited & controlled entities - Annual Report 2019
continued
Windanya gold
Windanya is a historical gold mining centre south of the Scotia Dam laterite that was operational in the 1900s. Today relic
shafts, dumps, battery sands and a large tailings dam remain. Field work at Windanya has included mapping and auger
drill sampling of workings, dumps and tailings dams. The gold mineralisation appears to be hosted on the contacts between
a large quartz blow on a mafic/ultramafic contact. Several high-grade rock chip results, up to 20.50 g/t Au were returned
highlighting project prospectivity.
Additional work has received statutory approval for follow-up on the gold potential of this project area.
Taurus gold
A series of historical gold workings adjoining the Bulong laterite are being assessed. Initial sampling around old gold workings
and tailings from battery sands has returned encouraging results up to 3g/t Au, with up to 150g/t Au recorded in historic
drilling.
Perrinvale nickel sulphide
The Ardea exploration target is based on recent nickel sulphide discoveries immediately west of Perrinvale made by St
George Mining. Regional magnetic data highlights that the feature which hosts the St George Mining nickel sulphide
discoveries, has an east to northeast strike and extends into Perrinvale. The nickel sulphide prospects are overlain by
transported cover, so geophysical methods such as moving loop Electro Magnetic (EM) surveys were utilised for geological
interpretation and to facilitate drill hole targeting.
Any nickel sulphide occurrence located at Perrinvale could be potential GNCP autoclave feed, to provide additional sulphur
and nickel units to the reaction vessel.
Mt Zephyr
The Mt Zephyr-Darlot East metallogenic model for Ardea’s 910km2 tenement holding is:
•
•
The gold structural target is the shallow east-dipping Celia Lineament and 10km to the east (from north to south
localises the Jupiter, Wallaby, Sunrise Dam gold mining centres).
Syenite-host, Ardea assaying confirms an alkaline igneous association with distinctive Ba-Sr-Ce-La-Nd association,
alteration is dominantly pyrite with subordinate sericite, and alteration chemistry dominantly anomalous As-Mo-W.
The Mt Zephyr project continues to be assessed to plan optimum follow-up work. With multiple targets defined at the Gale
Gold, Jones A Nickel Sulphide and Dunn’s Line Prospects. Ardea needs to consider the best strategy for this quality tenement
portfolio. Current preference is to introduce a joint venture partner with excess gold plant production capacity, a strong
balance sheet and track record of exploration success, which will generate cash whilst protecting Ardea’s tight capital
structure.
Bedonia gold and nickel sulphide
The metallogenic model at Bedonia is nickel sulphide and Platinum Group Metals (PGM) associated with the Proterozoic-
aged Jimberlana Dyke, with mineralisation at a historic prospect, Mordicus, as the proof of concept. Field programs by
Ardea have identified targets at the Cleanthes and Lila gold prospects (historic drilling up to 2.7g/t Au) located on the
Cunderlee Fault at the Albany Fraser Province western boundary.
Soil auger drilling programs have been designed and heritage clearance programs have been sought.
Ardea Resources Limited & controlled entities - Annual Report 2019
15
Activities Report
Lewis Ponds: Sulphide units exposed
NSW Gold and Base Metals projects (100% Ardea)
Ardea has incorporated a wholly owned subsidiary, Godolphin Resources Limited (Godolphin) for the spin out of its central
NSW projects, through an Initial Public Offering. The Godolphin tenure has multiple drill targets variously adjoining or along
structure of Australia’s truly elite gold-base metal operations and development projects including Cadia-Ridgeway gold-
copper, Northparkes copper-gold, McPhillamys gold and of particular significance, the recent Boda-Kaiser gold-copper
discovery (502m at 0.5g/t Au and 0.2% Cu).
Godolphin will go to the market with a large contiguous land holding covering regionally significant gold and base metal
mineralised structures in a region that hosts some of the largest and lowest cost bulk mining gold and base metal operations
in Australia (being Cadia-Ridgeway, Northparkes, Cowal).
Godolphin’s development focus will be the Mount Aubrey epithermal gold and Lewis Ponds gold-silver-zinc projects
associated with the Lachlan Transverse Zone (LTZ) of the Lachlan Fold Belt (LFB).
The proposed transaction is subject to various conditions, including approval by Ardea Shareholders at an Extraordinary
General Meeting (EGM) proposed for Q4 2019 ahead of Prospectus issue and listing. The Ardea Board is committed to
unlocking the significant value held in the LFB assets and believes that this is best achieved through the ASX listing of a
focused, standalone gold and base metal exploration and development company, with dedicated funding and management
team. An experienced, well-regarded Board has been appointed and exploration group established at Orange, central NSW.
The derivation of the Godolphin name is from the Godolphin-Narragal Fault, a crustal-scale structure that hosts significant
mineral deposits along its entire strike length, including the 60km of strike held by Godolphin.
Since its listing in 2017, Ardea has become the second largest mineral tenement holder in NSW with Godolphin now holding
some 3,216km2, with tenure being associated with the key LFB metallogenic provinces being the LTZ and Gilmore Suture.
This dominant land position has been acquired through detailed project scale and regional data compilation and analysis.
The work has highlighted the prospectivity of the Godolphin tenements and remarkably, the fact that this area is under-
explored by modern standards.
Work completed thus far by Ardea has advanced its NSW projects by defining JORC-compliant resources for the Mount
Aubrey, Yeoval and Lewis Ponds projects.
Table 2: 2019 Mineral Resource Estimate (JORC 2012). A full breakdown of the resources is presented in the Directors’ Report Section of the
Annual Report. Some rounding may occur.
Table 2
Project
Tonnes
(Mt)
Au
(g/t)
Ag
(g/t)
Mount Aubrey
Yeoval
Lewis Ponds
TOTAL
1.21
12.80
20.24
34.25
1.61
0.14
0.50
0.40
-
2.20
33.30
20.48
Zn
(%)
-
-
1.5
0.9
Pb
(%)
-
-
0.7
0.4
Cu
(%)
AuEq
(g/t)
-
0.38
0.10
0.20
1.61
0.56
1.80
1.32
Cont.
Au
(Moz)
0.06
0.06
0.31
0.43
Cont.
AuEq
(Moz)
0.06
0.23
1.16
1.45
16
Ardea Resources Limited & controlled entities - Annual Report 2019
continued
Great Australian
Basin
DUBBO
ALK - REE
Tomingley
Peak Hill
Tomingley
Silica Hill
/Commonwealth
MUDGEE
Gunnedah
Basin
New
England
Fold
Belt
Northparkes
Lachlan Transverse
Zone (LTZ)
PARKES
Copper Hill
ORANGE
Cadia Ridgeway
BATHURST
McPhillamys
Cowal
Lachlan
Fold Belt
WEST WYALONG
YOUNG
Temora
100km
WAGGAWAGGA
Woodlawn
500,000mE
Adelong
700,000mE
Gundagai
LAKE
CARGELLIGO
N
m
0
0
0
,
0
0
3
,
6
N
m
0
0
0
,
0
0
2
,
6
NARRANDERA
Murray
Basin
N
m
0
0
0
,
0
0
1
,
6
Sydney
Basin
Wiseman’s
Creek
SYDNEY
WOLLONGONG
Godolphin Tenements
Granted
Application
Significant mineral occurrences
Ordovician Volcanics
Silurian-Devonian Volcanics
Figure 9: Ardea’s projects in the highly prospective Lachlan Fold Belt of NSW. Projection: GDA94 Zone 55.
Work programs completed include land-holder access agreements, digitally capturing historic exploration data, geological
mapping and soil auger geochemistry, leading to the definition of an exceptional portfolio of drill-ready targets across granted
Godolphin tenure.
Comparison to other deposits of the Lachlan Fold Belt
The Ardea concept to incorporate lower-grade, disseminated mineralisation into a potential bulk mining operation with Dense
Media Separation upgrade of feed grades, is consistent with major operations in the central Lachlan Fold Belt, which are
all low grade, bulk excavation-based mines. Gold equivalent (AuEq) values are compared for published endowments of
major mining centres as a proxy for contained metal value to enable direct comparison between deposits and show the
inherent value of the mineral assemblage within the Lewis Ponds resource and the comparatively high gold grade of the
Mount Aubrey resource.
Table 3
Grade comparison to other deposits of the Lachlan Fold Belt
Lewis Ponds
indicated & inferred
20.24Mt
1.80 Au eq*
20.24 Mt at 0.5g/t Au, 33.3g/t Ag, 1.5% Zn, 0.7% Pb, & 0.1% Cu 4
Mount Aubrey
inferred
1.21Mt
1.61 Au eq*
1.21 Mt @ 1.61 g/t Au, 62.4 Koz Au
McPhillamys
indicated & inferred
69.8Mt
1.02 Au eq*
69.8 Mt @ 1.02 g/t Au, 2.293 Moz Au
Cowal
Northparkes
Cadia Valley
global
global
global
240.6Mt
0.96 Au eq*
240.6 Mt @ 0.96 g/t Au, 7.415 Moz Au
487.5Mt
0.79 Au eq*
487.5 Mt @ 0.56 % Cu, 0.18 g/t Au, and 1.75 g/t Ag
3170.0Mt
0.65 Au eq*
3170 Mt @ 0.37 g/t Au, 0.68 g/t Ag and 0.26 % Cu
Copper Hill
inferred
215.0Mt
0.57 Au eq*
215 Mt @ 0.24 g/t Au and 0.31 % Cu
3
2
2
2
2
1
Source references –1: NSW Dept of Industry, Resources & Environment, “Copper opportunities in NSW”, Dec 2015. 2: NSW Dept of Industry, Resources & Environment, “Gold opportunities in NSW”,
Jul 2016. 3. Mount Aubrey Resource Update 28 August 2019. 4. Lewis Ponds Resource Update, 3 Sep 2019. Gold equivalents (AuEq) were defined using the following values (21 June 2019 US$
price, recovery): Zn ($2585/t, 80%), Au ($1393/oz, 100%), Ag ($15.50, 80%), Pb ($1915/t, 80%), Cu ($5960/t, 80%). Au equiv. = Au(g/t) + 0.011Ag(g/t) + 0.577Zn(%) + 0.428Pb(%) + 1.331Cu(%).
Gold equivalence is subjective thus indicative only and is used to allow comparisons between major deposits of the region. Figures rounded off, so slight figure rounding discrepancies are possible.
Ardea Resources Limited & controlled entities - Annual Report 2019
17
Activities Report
Mount Aubrey: volcanic breccia. This is called “mill-rock” in Canada, because when you are
standing on it, you can hear the ore processing mill working away.
Lewis Ponds gold-base metal project – Lewis Ponds, Ophir, Copper Hill
East, Mt Bulga and Caledonian gold-base metal project
These projects cover a 50km strike length of the highly prospective Godolphin-Narragal Fault, which hosts significant
orogenic shear-hosted gold deposits including the McPhillamys 2.3Moz gold deposit some 20km south of Lewis Ponds and
Volcanogenic Massive Sulphide (VMS) base metal deposits notably at Lewis Ponds and Mt Bulga.
Table 4: Lewis Ponds September 2019 Mineral Resource Estimate (JORC 2012). A full breakdown of the resources is presented in the Directors’
Report Section of the Annual Report. Some rounding may occur.
The Lewis Ponds data base compilation has been completed and integrated with historic and recent mapping data to update
the geological model to form the basis for a resource update of:
Table 4
Category
Indicated
Inferred
Total
Tonnes
(Mt)
Au
(g/t)
7.95
12.29
20.24
0.3
0.6
0.5
Ag
(g/t)
26.2
37.8
33.3
Cu
(%)
0.1
0.1
0.1
Zn
(%)
1.1
1.7
1.5
Pb
(%)
0.4
0.8
0.7
At Copper Hill East, the geological setting is favourable, being Macquarie Arc andesite (Fairbridge Volcanics). The aim is
to locate gold-copper porphyry style intrusives comparable to Boda (50km north along structure) and Cadia Ridgeway (50km
south along structure). A coincident magnetic high and copper geochemical anomaly has been defined by Ardea with drill
hole targeting planned post the listing of Godolphin.
Mount Aubrey epithermal gold-silver project
Mount Aubrey is located at the east contact of the highly mineralised Macquarie Arc Ordovician andesites some 30km
northeast of Parkes and 30km southeast of the historic Peak Hill epithermal gold mine.
Mount Aubrey was acquired by Ardea as an epithermal gold system. Gold mineralisation is typically hosted by 0.5–3m thick
chalcedonic epithermal quartz veins and stockworks. Three small pits mined the deposit in the late 1980s and were then
back-filled in 1991 when the gold price was ~US$350 per ounce. Mining only extended to a maximum depth of 40 metres
and was limited to free dig material (the then landowner wouldn’t allow blasting).
Ardea has defined a maiden inferred mineral resource of 1.21Mt at 1.61g/t gold for 62,200 ounces. A full breakdown of the
resources is presented in the Directors’ Report Section of the Annual Report.
18
Ardea Resources Limited & controlled entities - Annual Report 2019
continued
Gundagai: gold in quartz vein
Only one kilometre of a seven-kilometre mineral system has been tested by drilling and where this limited drilling was
undertaken, the average hole depth was only 42m. Drilling of this compelling target has received statutory approval and is
set to commence immediately after Godolphin lists on ASX, with the expectation that additional ounces will be defined
quickly and cost effectively.
Yeoval Porphyry copper-gold-molybdenum-rhenium
Yeoval is located within the Macquarie Arc, 60km northeast of the Northparkes copper-gold mine. With four new tenement
applications making Yeoval contiguous with Mount Aubrey and Copper Hill East, the Yeoval project now covers an area of
1,314km2. Yeoval is intensely mineralised with more than 60 historic copper workings trending in a north-easterly direction
along a 20km strike. The Godolphin exploration model is a large tonnage porphyry copper-gold-molybdenum-rhenium
system. Ardea has defined a maiden inferred resource of 12.8Mt at 0.38% copper, 0.14g/t gold, 2.20g/t silver and 120g/t
molybdenum. A full breakdown of the resource is presented in the Directors’ Report Section of the Annual Report.
Wiseman’s Creek gold-copper project
Wiseman’s Creek is located 35km southeast of Bathurst, NSW, around the logging town of Oberon. Epithermal gold
mineralisation within the tenure is hosted largely within Late Silurian to Early Devonian-aged sediments, with geology through
the centre of the tenure comprising the andesitic Ordovician-aged Rockley Volcanics (equivalent units host the Cadia and
Northparkes gold-copper operations).
Gundagai gold-copper project
The Gundagai tenements are located 315km southwest of Sydney. Several old gold workings hosted by mineralised
porphyry units exist in the Ardea tenure, with historic RC drilling at the Big Ben prospect returning up to 20 metres at 1.58g/t
gold within a quartz-limonite-pyrolusite stockwork system. The Big Ben mineralised system is open to the south, under
alluvial cover. Previous historic soil sampling located a >100ppb Au anomaly associated with and to the east of the Big Ben
mineralisation.
Promising visual indications of gold mineralisation were noted around some of the historic Emu workings.
Ardea Resources Limited & controlled entities - Annual Report 2019
19
Compliance Statement (JORC 2012)
A competent person’s statement for the purposes of Listing Rule 5.22 has previously been announced by the Company for:
1.
2.
3.
4.
5.
6.
Kalgoorlie Nickel Project on 21 October 2013 and 31 July 2014, October 2016, 2016 Heron Resources Annual Report and 6 January 2017;
KNP Cobalt Zone Study on 7 August 2017, PFS 28 March 2018 and Expansion Study 24 July 2018;
Goongarrie Nickel Cobalt Project, Supplementary Prospectuses 10 February 2017, Ardea Annual Report November 2017, ASX announcements 28 June
2017, 4 July 2017, 28 August 2017, 14 March 2018, 24 July 2018, 8 October 2018;
Yeoval Resource Update, 15 August 2019.
Mount Aubrey Resource Update, 28 August 2019.
Lewis Ponds Resource Update, 3 September 2019.
The Company confirms that it is not aware of any new information or data that materially affects information included in previous announcements, and all material
assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. All projects are subject to new work programs,
notably drilling, metallurgy and JORC Code 2012 resource estimation as applicable.
The information in this report that relates to Exploration Results and Resource Estimates for the Goongarrie Nickel Cobalt Project is based on information originally
compiled by previous and current full-time employees of Heron Resources Limited and current full-time employees of Ardea Resources Limited. The Exploration Results,
Resource Estimates and data collection processes have been reviewed, verified and re-interpreted by Mr Ian Buchhorn who is a Member of the Australasian Institute
of Mining and Metallurgy and currently a director of Ardea Resources Limited. Mr Buchhorn has sufficient experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the exploration activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Buchhorn consents to the inclusion in this report of the matters based on his
information in the form and context that it appears.
The exploration and industry benchmarking summaries are based on information reviewed by Dr Matthew Painter, who is a Member of the Australian Institute of
Geoscientists. Dr Painter is a full-time employee of Ardea Resources Limited and has sufficient experience, which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Painter has reviewed this press release and consents to the inclusion in this report of the
information in the form and context in which it appears.
The information in this report that relates to Mineral Resources for Mount Aubrey, Yeoval and Lewis Ponds is based on information compiled or reviewed by Johan
Lambrechts, a Competent Person who is a Member of the Australian Institute of Geoscientists. Mr Lambrechts is a full-time employee of Ardea Resources Limited and
has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Lambrechts
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
ASX CHAPTER 5 COMPLIANCE AND PFS CAUTIONARY STATEMENT
The Company has concluded that it has a reasonable basis for providing the forward-looking statements and forecast financial information included in this announcement.
The detailed reasons for that conclusion are outlined throughout this announcement and all material assumptions, including the JORC modifying factors, upon which
the forecast financial information is based are disclosed in this announcement. This announcement has been prepared in accordance with the JORC Code (2012) and
the ASX Listing Rules.
The actual results could differ materially from a conclusion, forecast or projection in the forward-looking information. Certain material factors were applied in drawing a
conclusion or making a forecast or projection as reflected in the forward-looking information.
The Goongarrie Nickel Cobalt Project is at the PFS phase and although reasonable care has been taken to ensure that the facts are accurate and/or that the opinions
expressed are fair and reasonable, no reliance can be placed for any purpose whatsoever on the information contained in this document or on its completeness. Actual
results and developments of projects and the scandium market development may differ materially from those expressed or implied by these forward-looking statements
depending on a variety of factors.
A key conclusion of the PFS and Expansion Study, which are based on forward looking statements, is that the Goongarrie Nickel Cobalt Project is considered to have
positive economic potential.
The Mineral Resource used for the PFS was classified under JORC 2012 Guidelines and announced by the Company on 14 March 2018. The cut-off grades adapted
for the PFS and reported in Table 3.1 of the PFS are the basis of the production target assumed for the PFS.
The Company believes it has a reasonable basis to expect to be able to fund and further develop the Goongarrie Nickel Cobalt Project. However, there is no certainty
that the Company can raise funding when required.
20
Ardea Resources Limited & controlled entities - Annual Report 2019
Directors’ Report
The Directors present their report on Ardea Resources Limited and the entities it controlled at the end of and during the
year ended 30 June 2019 (“financial period”).
DIRECTORS & SENIOR MANAGEMENT
The names and details of the Directors and Senior Management of Ardea Resources Limited during the financial period
and until the date of this report are:
Katina Law – B.Com., CPA, MBA, GAICD
Executive Chair
Appointed 7 November 2016
Katina Law has over 25 years experience in the mining industry covering corporate and site based roles across several
continents. Over the past ten years she has worked with a number of ASX-listed resources companies in strategic, financial
advisory and general management roles. She has worked on a number of development and evaluation projects which were
later subject to corporate transactions including the Deflector gold and copper project and the King Vol polymetallic zinc
project. Ms Law was Executive Director and CEO of East Africa Resources Limited from 2012 to 2015. Ms Law has also
held senior positions at Newmont Mining Corporation’s head office in Denver, USA and at LionOre International based in
Perth. Ms Law has a Bachelor of Commerce degree from UWA, is a Certified Practicing Accountant and has an MBA from
London Business School.
She is currently a non-executive Director of headspace and is Chair of ASX listed Yandal Resources Limited (1 July 2018
to present) . Ms Law has no other public company directorships.
Ian Buchhorn – BSc (Hons), Dipl. Geosci (Min. Econ), MAusIMM
Executive Director
Appointed 17 August 2016
Ian Buchhorn is a Mineral Economist and Geologist with over 30 years experience. He was the founding Managing Director
of Heron Resources Limited for a period of 11 years until early 2007 and returned to that role in October 2012 after a period
as Executive Director. Mr Buchhorn previously worked with a number of international mining companies and has worked
on nickel, bauxite and industrial mineral mining and exploration, gold and base metal project generation and corporate
evaluations. For the last 25 years Mr Buchhorn has acquired and developed mining projects throughout the Eastern
Goldfields of Western Australian and has operated as a Registered Mine Manager.
During the three years prior to the end of this financial period, Mr Buchhorn has been a Director of Heron Resources Limited
(17 February 1995 to 2 June 2017), RBR Group Limited (19 August 2005 to 19 April 2018) and Golden Cross Resources
Limited (3 March 2014 to 13 July 2016).
Wayne Bramwell – BSc, GradDipBus. MSc, GAICD
Non-Executive Director
Appointed 29 January 2018
Wayne Bramwell is an experienced mining executive with over 25 years of international and Australian project evaluation
and development expertise across the base metals, precious metals and bulk commodity sectors.
Mr Bramwell holds a Bachelor of Science (Mineral Science - Extractive Metallurgy), Graduate Diploma of Business, Master
of Science (Mineral Economics) and is a Graduate of the Australian Institute of Company Directors (GAICD). He is a former
Chairman of the Bentley Branch of the WA School of Mines Alumni (WASMA) and Director of resources sector consultancy
firm, Sabre Ventures Pty Ltd.
During the three years prior to the end of this financial period, Mr Bramwell has been a Director of Kasbah Resources
Limited (31 October 2005 to 8 February 2017) and the Chief Executive Officer of Artemis Resources Limited (June 2018 to
June 2019).
Ardea Resources Limited & controlled entities - Annual Report 2019
21
Directors’ Report continued
Andrew Penkethman – BSc, FAusIMM, MAIG
Chief Executive Officer
Appointed 1 April 2019
Andrew Penkethman is a resources sector executive and geologist with 25 years experience in the resources industry. His
technical skills include project evaluation, early stage and near mine exploration, resource development, feasibility study
management, permitting, stake holder engagement and mine development across open pit and underground operations
within Australia and overseas. Commodities experience includes gold, base metals, battery minerals and energy
commodities over a range of geological settings.
Mr Penkethman’s technical expertise is complimented by over 13 years in executive roles with a strong corporate focus
including strategic partner processes, joint venture management, financial modelling, and project acquisition and divestment.
Mr Penkethman has ASX, AIM and TSX equity markets experience. He holds a Bachelor of Science degree from the
University of Wollongong, is a Fellow of the Australasian Institute of Mining and Metallurgy and a Member of the Australian
Institute of Geoscientists.
COMPANY SECRETARY
Robert (Sam) Middlemas – B.Com., PGradDipBus. CA
Mr Middlemas was appointed Company Secretary and Chief Financial Officer on 20 October 2016. He is a chartered
accountant with more than 20 years experience in various financial, board and company secretarial roles with a number of
listed public companies operating in the resources sector. He is the principal of a corporate advisory company which
provides financial and secretarial services specialising in capital raisings and initial public offerings. Previously Mr Middlemas
worked for an international accountancy firm. His fields of expertise include corporate secretarial practice, financial and
management reporting in the mining industry, treasury and cash flow management and corporate governance.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the financial period consisted of mineral exploration and
development in Western Australia and New South Wales.
There have been no significant changes in these activities during the financial period.
DIVIDENDS
No dividend has been paid and no dividend is recommended for the current financial period.
REVIEW OF OPERATIONS AND ACTIVITIES
The Consolidated Entity recorded an operating loss after income tax for the Financial Period ended 30 June 2019 of
$1,487,734 (2018 - $3,814,139).
Ardea is a mineral exploration and development group, currently focussed on its nickel, cobalt and scandium Goongarrie
project and gold and nickel sulphide exploration in Western Australia and gold, silver, zinc, copper and lead mineralisation
in NSW.
Ardea’s strategy for ultimate growth is to combine the following elements:
•
•
Ongoing commitment to the identification and review of projects/corporate opportunities that have the capacity to
successfully develop into a profitable mine.
Maximise the commercial value of the existing tenement portfolio through the ongoing establishment and maintenance
of suitable joint ventures and other alternate funding arrangements where appropriate.
Ardea's major projects are as follows:
•
•
Nickel, gold and other base metals in WA within a quality tenement portfolio covering approximately 3,500km2
Gold and base metals in NSW, within a quality tenement portfolio covering 3,216km2
22
Ardea Resources Limited & controlled entities - Annual Report 2019
Directors’ Report continued
Western Australia
Kalgoorlie Nickel Project (KNP) and Goongarrie Nickel Cobalt Project (GNCP)
The key objective for Ardea is commissioning a nickel-cobalt mining operation at Goongarrie within the KNP.
The KNP is comprised of a series of major undeveloped nickel-cobalt laterite deposits, totalling 773.0 Mt at 0.70% nickel
and 0.05% cobalt which is located within 150 km of the regional mining city of Kalgoorlie-Boulder, WA. With total contained
nickel metal tonnages of over 5.4Mt and total contained cobalt metal tonnages of over 400,000t, the KNP is a globally
significant battery metal resource and the largest deposit of its kind in Australia. The resource category breakdown is as
follows:
Table 5 – Resource Estimate for the KNP based on a 0.5 % nickel cut-off. Note that all values have been rounded appropriate to their deemed
accuracy, so totalling values may not appear accurate. A full breakdown of the resources is presented in Table 6 next page.
Resource
Category
Measured
Indicated
Inferred
KNP Total Resources
Quantity
(Mt)
Nickel
(%)
Cobalt
(%)
Contained
nickel (t)
Contained
cobalt (t)
9.6
232.9
530.5
773.0
1.02
0.75
0.68
0.70
0.10
0.06
0.05
0.05
98,800
1,759,700
3,600,000
5,458,400
9,700
141,200
254,400
405,400
Since listing in February 2017, Ardea drilling focused on geometallurgical research and expanding higher grade resources
to recover samples for Pre-Feasibility Study (PFS) and Expansion Study metallurgy and bench and pilot-scale testing.
Drilling
On the GNCP, Ardea have now completed 50,561m of drilling since listing in February 2017. During the 2019 financial year
Ardea completed 273 drill holes for 14,433 metres for GNCP resource definition and 265 air core drill holes for 4,876 metres
for gold targetting and sterilisation drilling around infrastructure sites.
Metallurgy
Significant metallurgical test work has been completed on samples obtained from drilling. This work has included the
successful completion of a pilot plant program which produced high specification nickel and cobalt sulphate, which is the
preferred product for use in cathodes for Electric Vehicle and Static Storage batteries.
Approvals
Referral to EPA is linked to the Strategic Partner Process and finalising project scale and scope.
Definitive Feasibility Study, Goongarrie
The completion of the Definitive Feasibility Study is linked to the Strategic Partner process, to agree on projects scale and
end product specification. Feasibility Study work completed to date supports a robust project development:
•
Pre-Feasibility Study, lodged 28 March 2018, based on a production rate up to 1.5Mtpa;
Case
Pre-tax NPV8
Post-tax NPV8
1.0Mtpa PFS A$1.43 billion
A$1.04 billion
1.5Mtpa PFS A$1.93 billion
A$1.40 billion
IRR
25 %
25 %
Payback
5.3 years
5.6 years
Expansion Study, lodged 24 July 2018, based on a production rate up to 2.25Mtpa;
Case
Pre-tax NPV8
Post-tax NPV8
2.25Mtpa ES
A$3.1 billion
A$2.3 billion
IRR
27 %
Payback
5.1 years
Initial Ore Reserve of 40.1Mt at 0.82% Ni and 0.09% Co, within a Goongarrie resource of 215.6Mt at 0.71% Ni and
0.06% Co.
Pilot testing R&D was completed on a 7.5 tonne bulk drill core sample, returning metal extractions of up to 94% as
predicted from 2017 batch tests. High specification nickel and cobalt sulphate crystal production was confirmed.
•
•
•
Ardea Resources Limited & controlled entities - Annual Report 2019
23
Table 6 – Resource breakdown of the overall KNP resource, based on a nickel cut-off of 0.5 %. Note that all values have been rounded appropriate
to their deemed accuracy, so totalling values may not appear accurate.
Directors’ Report continued
Contained
Contained
Estimation
Estimate
Region
Camp
Prospect
KNP WEST
Goongarrie
Goongarrie South
Highway
Ghost Rocks
Goongarrie Hill
Big Four
Scotia
Resource
Category
Measured
Indicated
Inferred
Indicated
Inferred
Inferred
Inferred
Indicated
Inferred
Inferred
Goongarrie subtotal
Measured
Siberia
Siberia South
Siberia North
Siberia North
Black Range
Siberia subtotal
KNP WEST
TOTAL
KNP EAST
Bulong
Taurus
Bulong East
Bulong subtotal
Indicated
Inferred
Inferred
Indicated
Inferred
Inferred
Indicated
Inferred
Measured
Indicated
Inferred
Inferred
Indicated
Inferred
Indicated
Inferred
Hampton
Kalpini
Hampton subtotal
Inferred
Inferred
KNP EAST
TOTAL
KNP YERILLA Yerilla
Jump Up Dam
Boyce Creek
Aubils
KNP YERILLA TOTAL
KNP OVERALL
GRAND TOTAL
Strategic Partner Search
Indicated
Inferred
Measured
Indicated
Inferred
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Global
Size
(Mt)
5.8
51.4
25.8
52.9
34.1
47.3
53.6
34.2
7.6
11.2
5.8
138.5
179.6
96.5
10.0
53.3
20.1
10.0
170.0
5.8
148.5
349.5
14.2
15.9
24.0
15.9
38.2
75.0
75.0
15.9
113.2
3.8
41.6
18.4
26.8
49.4
3.8
68.4
67.8
9.6
232.9
530.5
773.0
Nickel
(%)
1.08
Cobalt
(%)
0.14
0.78
0.63
0.66
0.64
0.66
0.60
0.71
0.61
0.77
1.08
0.72
0.64
0.65
0.64
0.65
0.75
0.64
0.67
1.08
0.71
0.65
0.84
1.06
0.79
1.06
0.81
0.73
0.73
1.06
0.76
0.94
0.78
0.63
0.77
0.70
0.94
0.78
0.68
1.03
0.76
0.68
0.71
0.08
0.07
0.04
0.04
0.04
0.04
0.08
0.09
0.08
0.14
0.07
0.05
0.03
0.05
0.04
0.10
0.05
0.05
0.14
0.07
0.05
0.05
0.06
0.05
0.06
0.05
0.04
0.04
0.06
0.05
0.05
0.04
0.03
0.06
0.07
0.05
0.05
0.06
0.10
0.06
0.05
0.05
nickel (t)
62,900
403,800
161,500
349,100
218,100
312,900
323,700
241,700
46,700
86,200
62,900
994,600
1,149,200
631,100
64,000
349,000
149,000
64,000
1,130,800
62,900
1,058,600
2,280,000
119,000
168,000
189,100
168,000
308,100
549,700
549,700
168,000
857,800
35,900
326,700
116,400
206,400
345,800
35,900
533,000
462,200
cobalt (t)
7,900
42,800
17,500
22,200
12,900
19,900
19,800
28,700
6,800
9,000
7,900
93,700
85,900
33,200
5,100
23,100
20,000
5,100
77,000
7,900
98,800
162,900
7,300
8,800
12,700
8,800
20,000
32,600
32,600
8,800
52,700
1,800
18,000
6,300
15,500
32,600
1,800
33,500
38,900
98,800
1,759,700
3,600,000
5,458,400
9,700
141,200
254,400
405,400
method
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
source
HGMC
HGMC
HGMC
Heron
Heron
Heron
Heron
HGMC
HGMC
Study
period
2071 PFS
2071 PFS
2071 PFS
Post 2010 PFS
Post 2010 PFS
Post 2010 PFS
Post 2010 PFS
2071 PFS
2071 PFS
Snowden
Pre 2010 PFS
Snowden
Snowden
Snowden
Snowden
Pre 2010 PFS
Post 2010 PFS
Post 2010 PFS
Pre 2010 PFS
Krige
Krige
Krige
Snowden
Snowden
Snowden
Pre 2010 PFS
Pre 2010 PFS
Pre 2010 PFS
Krige
Snowden
Pre 2010 PFS
Krige
Krige
Krige
Krige
Krige
Snowden
Snowden
Snowden
Heron
Heron
2009 PFS
2009 PFS
2009 PFS
2009 PFS
2009 PFS
KPMG Australia Corporate Finance’s Metals and Mining team is running a competitive process to identify and attract one
or more strategic partners to support the development of the GNCP. Interest remains high in securing nickel and cobalt off-
take, but any commitment must be linked to a project financing commitment. Discussions are continuing with interested
parties.
24
Ardea Resources Limited & controlled entities - Annual Report 2019
Directors’ Report continued
WA Gold-Nickel Exploration
Ardea’s GNCP is unique among the world’s lateritic nickel-cobalt deposits in that it has developed on ultramafic rocks that
are within and a part of a major, crustal-scale gold-mineralised structure being the Bardoc Tectonic Zone (BTZ). The BTZ
hosts, from south to north, the Paddington, Goongarrie, Comet Vale and Menzies gold mining centres.
Drilling at the BTZ within the GNCP has defined significant results, such as, ABFA0245: 6m at 2.0g/t Au from surface and
ABFA0188: 24m at 0.8g/t Au from 12m. Strong, laterally extensive gold anomalism is present beneath the full 15km strike
length of the nickel-cobalt orebodies of the GNCP. Historical data compilation and detailed structural interpretation over the
BTZ is a current focus for the Company so that follow up exploration can be planned which accounts for the considerable
gold potential of this under explored area.
Exploration drilling at Mt Zephyr identified a number of gold and base metal targets. The standout drill result was, AMZR0006:
96.00m @ 0.3 g/t Au from 2m within granitoid host-rock. This result shows parallels to the Jupiter and Wallaby gold deposits
to the south which are also bulk tonnage systems located within granites, up-dip on the Celia Lineament.
Gold and base metal target generation and ranking is being undertaken at BTZ, Mulga Plum, Taurus, Kalpini and Bedonia.
Several nickel sulphides targets have been identified such as the Cathedrals Belt on the western margin of the highly prolific
Eastern Goldfields Province, which is Australia’s newest recognised nickel belt. Ardea completed a moving loop
electromagnetic (MLEM) survey over selected portions of the Cathedrals Belt East Extension in late September 2019. The
methodology of the geophysical survey is similar to the technique utilised successfully throughout the Cathedrals Belt to
the west to define mineralised EM conductors. Definition of any such conductors will require drill testing.
Other nickel sulphide targets such as Emu Lake east of Silver Swan have well defined EM targets with drill testing
commenced in September 2019 with disseminated sulphides intersected in what is more likely a Volcanogenic Massive
Sulphide (VMS) setting. Additional targets continue to be defined and ranked for future exploration.
New South Wales
Ardea has significantly progressed the spin-out of its Lachlan Fold Belt (LFB) gold and base metal tenements into a new
Initial Public Offering (IPO) named Godolphin Resources Limited (Godolphin).
Godolphin will offer existing Ardea shareholders, and new subscribers to the IPO, exposure to a publicly-listed company
with a portfolio of mineral assets in the highly prospective LFB region of NSW. The Ardea Board is committed to unlocking
the significant value held in these assets, and believe that this is best achieved through the ASX listing of a focused,
standalone gold and base metal exploration and development company, with dedicated funding and a specialist board and
management team.
Godolphin Resources Limited has been registered as a wholly-owned subsidiary of Ardea with title to the NSW assets being
transferred to Godolphin.
Since its listing in 2017, Ardea has become the second largest mineral tenement holder in NSW with 3,216km2, with tenure
being associated with the key LFB metallogenic provinces being the Lachlan Traverse Zone (LTZ) and Gilmore Suture. The
dominant land position has been acquired based on detailed project scale and regional data compilation and analysis. This
work has been carried out by the dedicated exploration team based in Orange with support from Ardea management. The
work has highlighted the prospectivity of the Godolphin tenements and remarkably the fact that this area is under explored
by modern standards.
Work completed thus far by Ardea has advanced its NSW projects by defining new and updated Mineral Resource Estimates
(JORC 2012) in August 2019 for Mount Aubrey (Inferred) and Yeoval (Inferred) and for Lewis Ponds (Inferred and Indicated)
in September 2019. A summary of these Mineral Resource estimates is shown in Table 7, below.
Table 7: Summary of Mineral Resources (JORC (2012) contained within Godolphin tenements. A full breakdown of the resources is presented in
Table 8, 9 and 10 below. Some rounding may occur.
Project
Mount Aubrey
Yeoval
Lewis Ponds
TOTAL
Tonnes
(Mt)
Au
(g/t)
Ag
(g/t)
1.21
12.80
20.24
34.25
1.61
0.14
0.50
0.40
-
2.20
33.30
20.48
Zn
(%)
-
-
1.5
0.9
Pb
(%)
-
-
0.7
0.4
Cu
(%)
-
0.38
0.10
0.20
AuEq
(g/t)
1.61
0.56
1.80
1.32
Cont.
Au
(Moz)
0.06
0.06
0.31
0.43
Cont.
AuEq
(Moz)
0.06
0.23
1.16
1.45
Ardea Resources Limited & controlled entities - Annual Report 2019
25
Directors’ Report continued
Table 8: Mount Aubrey August 2019 Mineral Resource Estimate (JORC 2012). Some rounding may occur.
Mount Aubrey Category
Inferred
Total
Cut-off
(Au g/t)
≥ 0.50
Tonnes
(Mt)
1.21
1.21
Au
(g/t)
1.61
1.61
Cont Au
(oz)
62,400
62,400
Table 9: Yeoval August 2019 Mineral Resource Estimate (JORC 2012). *Based on a 0.2% Cu cut-off. Some rounding may occur.
Yeoval Category
Inferred
Total
Tonnes
(Mt)
12.8
12.8
Cu
(%)
0.38
0.38
Au
(g/t)
0.14
0.14
Ag
(g/t)
Mo
(g/t)
2.20
120
2.20
120
Table 10: Lewis Ponds September 2019 Mineral Resource Estimate (JORC 2012). Some rounding may occur.
Lewis Ponds Category
Indicated
Inferred
Total
Tonnes
(Mt)
7.95
12.29
20.24
Au
(g/t)
0.3
0.6
0.5
Ag
(g/t)
26.2
37.8
33.3
Cu
(%)
0.1
0.1
0.1
Zn
(%)
1.1
1.7
1.5
Pb
(%)
0.4
0.8
0.7
Work programs completed on the NSW projects include digitally capturing and verifying historic exploration data, geological
mapping and soil auger geochemistry leading to the definition of walk-up drill targets on all granted tenure.
These targets include multiple Boda gold-copper porphyry style targets (Alkane Resources ASX release 9 September 2019,
KSDD003, 502m @ 0.48g/t gold and 0.2% copper from 211 metres). The nearest Godolphin tenement is about 25km SW
across structure from Alkane’s Boda prospect. The favourable host rock volcanics for this type of gold-copper porphyry
target extend from Cadia Ridgeway, about 110km to the south of Boda, northwards through Godolphin’s Copper Hill East
project, located approximately mid-way between the two, 50km to the south of Boda. Ardea have defined a coincident
magnetic high and surface geochemical copper target defined from auger sampling, ready for follow up exploration post
listing of Godolphin.
CORPORATE AND FINANCIAL POSITION
As at 30 June 2019 the Consolidated Entity had cash reserves of $11.2 million (2018 - $19.2 million).
RISK MANAGEMENT
The Board is responsible for the oversight of the Consolidated Entity’s risk management and control framework.
Responsibility for control and risk management is delegated to the appropriate level of management with the CEO having
ultimate responsibility to the Board for the risk management and control framework.
Areas of significant business risk to the Consolidated Entity are highlighted in the Business Plan presented to the Board by
the CEO each year.
Arrangements put in place by the Board to monitor risk management include monthly reporting to the Board in respect of
operations and the financial position of the Consolidated Entity.
EARNINGS/LOSS PER SHARE
Basic loss per share
Diluted loss per share
2019
Cents
(1.41)
(1.41)
2018
Cents
(4.49)
(4.49)
26
Ardea Resources Limited & controlled entities - Annual Report 2019
Directors’ Report continued
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the opinion of the Directors the following significant changes in the state of affairs of the Consolidated Entity that occurred
during the financial period under review:
•
During the year there were 1,155,011 IPO Options exercised at 25 cents and converted into fully paid ordinary shares
which raised total funds of $288,753.
OPTIONS/PERFORMANCE RIGHTS OVER UNISSUED CAPITAL
Unlisted Options
During the financial period and to the date of this report the following options were on issue as follows:
Number of Options on Issue
Exercise Price
5,008,582
25 cents each
Expiry Date
9 February 2020
The above options represent unissued ordinary shares of the Company under option as at the date of this report. These
unlisted options do not entitle the holder to participate in any share issue of the Company.
The holders of unlisted options are not entitled to any voting rights until the options are exercised into ordinary shares.
The names of all persons who currently hold options granted are entered in a register kept by the Company pursuant to
Section 168(1) of the Corporations Act 2001 and the register may be inspected free of charge. No person entitled to exercise
any option has or had, by virtue of the option, a right to participate in any share issue of any other body corporate.
During the year there were 1,155,011 of these IPO Options exercisable at 25 cents any time prior to 9 February 2020
converted into fully paid ordinary shares which raised total funds of $288,753, and subsequent to the financial year end a
further 6,146,429 IPO Options have been exercised raising a further $1,536,608.
Performance Rights
During the year the Company issued a further 830,000 Performance Rights to Directors and Employees under the Ardea
Performance Rights Plan that was approved at the 2017 AGM and 430,000 Performance Rights lapsed following Employees
leaving the Company. Subsequent to the end of the financial year a further 1,941,000 new Performance Rights were issued
and a further 170,000 Performance Rights lapsed.
CORPORATE STRUCTURE
Ardea Resources Limited (ACN 614 289 342) is a Company limited by shares that was incorporated on 17 August 2016
and is domiciled in Australia.
EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen since the end of the financial period any item, transaction or event of a material and unusual nature
likely, in the opinion of the Directors of the Consolidated Entity to affect substantially the operations of the Consolidated
Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent financial years except
for the exercise of 6,146,429 IPO 25 cent options which has raised $1,536,608.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the Consolidated Entity are included elsewhere in this Annual Report. Disclosure
of any further information has not been included in this report because, in the reasonable opinion of the Directors, to do so
would be likely to prejudice the business activities of the Consolidated Entity.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Consolidated Entity holds various exploration licences and similar tenure to regulate its exploration activities in Australia.
These licences include conditions and regulations with respect to the rehabilitation of areas disturbed during the course of
its exploration activities. So far as the Directors are aware there has been no known breach of the Consolidated Entity’s
licence conditions and all exploration activities comply with relevant environmental regulations.
Ardea Resources Limited & controlled entities - Annual Report 2019
27
Directors’ Report continued
INFORMATION ON DIRECTORS
As at the date of this report the Directors’ interests in shares and unlisted performance rights of the Consolidated Entity are
as follows:
Director
Title
Directors’ Interests
in Ordinary Shares
Directors’ Interests
in Performance Rights
Katina Law
Ian Buchhorn
Wayne Bramwell
Executive Chair
Appointed on 7 November 2016
Non-Executive Director
Appointed on 17 August 2016
Non-Executive Director
Appointed on 29 January 2018
DIRECTORS’ MEETINGS
1,008,046
12,511,440
-
600,000
600,000
450,000
The number of meetings of the Consolidated Entity’s Directors held in the period each Director held office during the financial
period and the numbers of meetings attended by each Director were:
Director
Katina Law
Ian Buchhorn
Wayne Bramwell
Board of Directors’ Meetings
Meetings Attended
Meetings held while a director
10
10
10
10
10
10
In addition to the above there were 2 Audit Committee Meetings and 1 Remuneration Committee Meeting held with the full
board in attendance at each Meeting.
REMUNERATION REPORT
Recommendation 8.1 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations
(2nd edition) states that the Board should establish a Remuneration Committee. The Board has formed the view that given
the number of Directors on the Board, this function could be performed just as effectively with full Board participation.
Accordingly it was resolved that there would be no separate Board sub-committee for remuneration purposes.
This report details the amount and nature of remuneration of each Director of the Consolidated Entity and executive officers
of the Consolidated Entity during the period.
Overview of Remuneration Policy
The Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors and the
executive team. The broad remuneration policy is to ensure that remuneration properly reflects the relevant person’s duties
and responsibilities, and that the remuneration is competitive in attracting, retaining and motivating people of the highest
quality. The Board believes that the best way to achieve this objective is to provide the Managing Director (or CEO) and
the executive team with a remuneration package consisting of a fixed and variable component that together reflects the
person’s responsibilities, duties and personal performance. An equity based remuneration arrangement for the Board and
the executive team was put in place following the 2017 AGM approval. The remuneration policy is to provide a fixed
remuneration component and short term incentive payments with a specific equity related component, with performance
conditions. The Board believes that this remuneration policy is appropriate given the stage of development of the
Consolidated Entity and the activities which it undertakes and is appropriate in aligning Director and executive objectives
with shareholder and business objectives.
The remuneration policy in regard to setting the terms and conditions for the Managing Director (or CEO) has been
developed by the Board taking into account market conditions and comparable salary levels for companies of a similar size
and operating in similar sectors.
28
Ardea Resources Limited & controlled entities - Annual Report 2019
Directors’ Report continued
Directors receive a superannuation guarantee contribution required by the government, which is currently 9.5% per annum
and do not receive any other retirement benefit. Some individuals, however, have chosen to sacrifice part or all of their
salary to increase payments towards superannuation.
All remuneration paid to Directors is valued at cost to the Consolidated Entity and expensed. Options and Performance
Rights are valued using either the Black-Scholes methodology or the Binomial model. In accordance with current accounting
policy the value of these options is expensed over the relevant vesting period.
Non-Executive Directors
The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment
and responsibilities. The Board determines payments to the Non-Executive Directors and reviews their remuneration
annually, based on market practice, duties and accountability. Independent external advice is sought when required. The
maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at
a General Meeting and was approved at a maximum of $500,000 at the 2017 AGM. Actual remuneration paid to the
Consolidated Entity’s Non-Executive Directors is disclosed below. Remuneration fees for Non-Executive Directors are not
linked to the performance of the Consolidated Entity. However, to align Directors’ interests with shareholder interests, the
Directors are encouraged to hold shares in the Consolidated Entity and it is intended all will receive options or performance
rights.
Senior Executives and Management
The Consolidated Entity aims to reward executives with a level of remuneration commensurate with their position and
responsibilities within the Consolidated Entity so as to:
●
●
●
Reward executives for Consolidated Entity and individual performance against targets set by reference to appropriate
benchmarks;
Reward executives in line with the strategic goals and performance of the Consolidated Entity; and
Ensure that total remuneration is competitive by market standards.
Structure
Remuneration consists of the following key elements:
●
●
●
Fixed remuneration;
Issuance of unlisted options/performance rights; and
Short term incentive payments.
Fixed Remuneration
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis including any employee benefits
eg. motor vehicles) as well as employer contributions to superannuation funds.
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position
and is competitive in the market.
Remuneration packages for the staff who report directly to the Managing Director (or equivalent) are based on the
recommendation of the Managing Director (or equivalent), subject to the approval of the Board in the annual budget setting
process.
Service Agreements
Mr Andrew Penkethman was appointed as Chief Executive Officer on 1 April 2019 and is employed under an executive
services agreement on a salary of $280,000 plus statutory superannuation and short and long term incentives. He was
awarded 1,200,000 Performance Rights in 3 equal tranches by the board on 7 July 2019 under the Employee Share Option
Scheme that was approved at the 2017 AGM. The agreement is subject to a mutual 3 month notice period.
Mr Ian Buchhorn was appointed as an Executive Director - Technical on 8 September 2017 and is employed under an
executive services agreement on a salary of $330,000 plus statutory superannuation and short and long term incentives.
He was awarded 900,000 Performance Rights in 3 equal tranches that were approved by shareholders at the 2017 AGM.
The first tranche of these converted into fully paid ordinary shares in 2018 following achievement of the first performance
hurdle. The agreement is subject to a mutual 3 month notice period.
Ardea Resources Limited & controlled entities - Annual Report 2019
29
Directors’ Report continued
Details of the nature and amount of each element of the remuneration of each Director and Executive Officer of Ardea
Resources Limited paid/accrued during the financial period are as follows:
Primary
Post
Employment
Equity
Compensation
2018/2019
Directors
K Law – Executive Chair (i)
I Buchhorn – Executive (ii)
W Bramwell – Non-Executive (iii)
Executives
A Penkethman – CEO (iv)
S Middlemas - Company Secretary (v)
2017/2018
Directors
K Law – Executive Chair (i)
I Buchhorn – Executive (ii)
W Bramwell – Non-Executive (iii)
B Clark – former Managing Director (vi)
195,000
330,000
60,000
66,769
100,550
76,955
212,500
20,000
79,441
M Painter – former Managing Director (vii)
250,080
Executives
S Mitchell – Technical GM (viii)
S Middlemas - Company Secretary (v)
213,333
133,710
Base
Salary
/Fees
$
Super-
Motor
Vehicle
annuation
/Bonus Contributions
$
$
Performance
Rights
Total
$
$
68,562
68,562
34,281
0
34,281
263,562
429,912
99,981
73,419
134,31
501,446
501,446
0
0
578,401
734,133
21,900
86,987
668,595
942,432
250,723
250,723
484,322
384,433
0
0
0
0
0
0
0
0
0
0
0
0
0
31,350
5,700
6,650
0
0
20,187
1,900
7,546
23,757
20,266
0
(i)
(ii)
(iii)
(iv)
(v)
Ms Law was appointed Non-Executive Chair on 7 November 2016, and moved into an executive role in July 2018. All fees are paid to her Consulting Company
Fitzroy Consulting Services. Ms Law was awarded 900,000 Performance Rights in 3 equal tranches, with the first tranche converting into fully paid ordinary
shares in 2018 following the achievement of the first hurdle.
Mr Buchhorn was appointed as a Non-Executive Director on 17 August 2016 and moved to an Executive Director on 8 September 2017.
Mr Bramwell was appointed as a Non-Executive Director on 29 January 2018. He was awarded 450,000 Performance Rights in 2 equal tranches on the same
terms and conditions as the other Class B and C Performance Rights on 4 December 2018.
Mr Penkethman was appointed CEO on 1 April 2019.
Mr Middlemas was appointed Company Secretary on 20 October 2016. All fees for providing Company Secretarial services were paid to Sparkling Investments
Pty Limited. He was awarded 450,000 Performance Rights in 3 equal tranches, with the first tranche converting into fully paid ordinary shares in 2018 following
the achievement of the first hurdle.
(vi)
Mr Clarke was appointed Managing Director on 3 April 2018 and resigned on 30 June 2018.
(vii) Mr Painter was appointed Managing Director on 7 November 2016, and resigned from that position on 3 April 2018 – he continues with the Company as General
Manager – Exploration, but ceased to be a KMP.
(viii) Ms Mitchell was appointed General Manager Technical on 1 November 2017 and ceased her employment with the Company on 26 January 2019.
Other than the Directors and executive officers disclosed above there were no other executive officers who received
emoluments during the financial period ended 30 June 2019.
30
Ardea Resources Limited & controlled entities - Annual Report 2019
Directors’ Report continued
Performance Rights issued during the current financial period
During the current financial year the Company issued a further 830,000 Performance Rights to Directors and Employees
under the Ardea Performance Rights Plan that was approved at the 2017 AGM. The Performance Rights convert into fully
paid ordinary shares for $Nil consideration upon the attainment of the following performance hurdles:
Class ‘B’ Performance Rights: upon the Company’s Shares reaching a 30 day VWAP which is equal to or greater
than $2.37 per Share; and continuous service of the Performance Rights holder in their capacity as a Director or
Executive of the Company, or in a role as otherwise agreed by the Board of the Company, from the date of issue of
the Performance Rights to 1 February 2019, prior to 30 November 2019.
Class ‘C’ Performance Rights: upon: completion of the Definitive Feasibility Study in relation to the KNP Cobalt
Zone; and continuous service of the Performance Rights holder in their capacity as a Director or Executive of the
Company, or in a role as otherwise agreed by the Board of the Company, from the date of issue of the Performance
Rights to 1 February 2020, prior to 30 November 2020.
During the financial year 430,000 Performance rights lapsed following employees leaving the Company.
Subsequent to year end, there have been two new Class’s of Performance Rights created with the following performance
hurdles:
Class ‘D’ Performance Rights: upon the Company’s Shares reaching a 30 day VWAP which is equal to or greater
than $0.60 per Share; and continuous service of the Performance Rights holder in their capacity as a Director or
Executive of the Company, or in a role as otherwise agreed by the Board of the Company, from the date of issue of
the Performance Rights to 30 November 2021, prior to 31 December 2021.
Class ‘E’ Performance Rights: upon the Company’s Shares reaching a 30 day VWAP which is equal to or greater
than $0.77 per Share; and continuous service of the Performance Rights holder in their capacity as a Director or
Executive of the Company, or in a role as otherwise agreed by the Board of the Company, from the date of issue of
the Performance Rights to 30 November 2022, prior to 31 December 2022.
On 7 July 2019 the Company issued a further 1,941,000 new Performance rights and 170,000 Performance Rights lapsed
leaving at total of 5,161,000 Performance Rights on issue as at the date of this report.
The Performance Rights issued during the financial year were valued using a hybrid employee share option pricing model
that simulates the Company’s share price at the expiry date.
The variables used to value the Performance Rights are as follows:
Item
Underlying Security Spot Price
Exercise Price
Share Price Barrier
Grant Date
Expiration Date
Life of Rights (years)
Volatility
Risk free rate
Class B
$0.656
Nil
$2.37
Class C
$.0656
Nil
Nil
4 Dec 2019 2017
4 Dec 2019
30 Nov 2019
30 Nov 2020
1
100%
2.033%
2
100%
2.033%
The likelihood of achieving each of the Performance hurdles was then considered leading to a value for the Class B
Performance Rights of 25.75 cents (total - $106,863) and value of Class C Performance Rights of $Nil. These values will
be expensed over the life of the Performance rights, and will be reassessed at each audit period to ensure the underlying
assumptions remain, with adjustments to be made with the changing conditions.
Other Transactions with Directors
The Company rents office and storage facilities in Kalgoorlie from an entity associated with Executive Director Ian Buchhorn
on normal arms length commercial terms. Total rent paid for the financial year was $81,856, (2018 - $74,997).
The Company uses Indigenous Professional Services Pty Ltd (an entity associated with Executive Chair Katina Law) to
provide HR consulting work on normal arms length commercial terms. Total paid during the financial year was $67,375
(2018 - $121,550).
Ardea Resources Limited & controlled entities - Annual Report 2019
31
Directors’ Report continued
Director and KMP Movement in Shares
The aggregate numbers of shares and options of the Company held directly, indirectly or beneficially by Directors and
Executive Officers of the Consolidated Entity or their personally-related entities are as follows:
-----------------------------Ordinary Shares-----------------------------
2019
Opening
Purchases/
(in specie
distribution)
-
1,008,046
11,851,440
-
538,046
500,000
508,046
8,379,098
3,472,342
-
-
130,000
-
260,000
-
-
464,023
186,711
278,046
Disposals
Closing
Performance
Rights (1)
30 June 2019
-
-
-
-
-
-
-
-
-
-
1,008,046
11,851,440
-
538,046
1,008,046
11,851,440
-
-
594,023
186,711
538,046
600,000
600,000
450,000
300,000
600,000
600,000
-
-
800,000
300,000
300,000
Ms K Law
Mr I Buchhorn
Mr W Bramwell
Mr S Middlemas
2018
Ms K Law
Mr I Buchhorn
Mr W Bramwell
Mr B Clark
Mr M Painter
Ms S Mitchell
Mr S Middlemas
(1)
Directors and Staff were issued Performance Rights during the two years in three equal tranches subject to a number of performance hurdles, the first
performance hurdle was met on 28 March 2018 and the first tranche of fully paid ordinary shares were issued – the balance of the Performance Rights are
subject to additional performance hurdles.
INDEMNIFYING OFFICERS AND AUDITOR
During the year the Company paid an insurance premium to insure certain officers of the Consolidated Entity. The officers
of the Consolidated Entity covered by the insurance policy include the Directors named in this report.
The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in
defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers
in their capacity as officers of the Consolidated Entity. The insurance policy does not contain details of the premium paid
in respect of individual officers of the Consolidated Entity. Disclosure of the nature of the liability cover and the amount of
the premium is subject to a confidentiality clause under the insurance policy.
The Consolidated Entity has not provided any insurance for an auditor of the Consolidated Entity.
AUDITORS’ INDEPENDENCE DECLARATION
Section 370C of the Corporations Act 2001 requires the Consolidated Entity’s auditors Butler Settineri (Audit) Pty Limited,
to provide the Directors of the Consolidated Entity with an Independence Declaration in relation to the audit of the financial
report. This Independence Declaration is attached and forms part of this Directors’ Report.
NON-AUDIT SERVICES
The external auditors have not undertaken any non-audit work during the financial year.
32
Ardea Resources Limited & controlled entities - Annual Report 2019
Directors’ Report continued
PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY
No person has applied for leave of Court to bring proceedings on behalf of the Consolidated Entity or intervene in any
proceedings to which the Consolidated Entity is a party for the purpose of taking responsibility on behalf of the Consolidated
Entity for all or any part of those proceedings. The Consolidated Entity was not party to any such proceedings during the
year.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the Consolidated
Entity support and have adhered to the principles of corporate governance. The Consolidated Entity’s corporate governance
practices have been disclosed in Appendix 4G in accordance with ASX listing rule 4.7.3 at the same time as the annual
report is lodged with the ASX. Further information about the Company’s corporate governance practices is set out on the
Company’s web site at www.ardearesources.com.au/corporate-governance. In accordance with the recommendations of
the ASX, information published on the web site includes codes of conduct and other policies and procedures relating to the
Board and its responsibilities.
DATED at Perth this 26th day of September 2019
Signed in accordance with a resolution of the Directors
Katina Law
Executive Chair
Compliance Statement (JORC 2012)
A competent person’s statement for the purposes of Listing Rule 5.22 has previously been announced by the Company for:
1.
2.
3.
4.
5.
6.
7.
Kalgoorlie Nickel Project on 21 October 2013 and 31 June 2014, October 2016, 2016 Heron Resources Annual Report and 6 January 2017 in accordance with
JORC 2012;
KNP Cobalt Zone Study on 6 January 2017 in accordance with JORC 2012
Pre-Feasibility Study based on a production rate of 1.5Mtpa lodged on 28 March 2018.
Expansion Study based on a production rate up to 2.25Mtpa lodged on 24 July 2018.
Yeoval Resource Update, on 15 August 2019 in accordance with JORC 2012.
Mount Aubrey Resource Update, on 28 August 2019 in accordance with JORC 2012.
Lewis Ponds Resource Update, on 3 September 2019 in accordance with JORC 2012.
The Company confirms that it is not aware of any new information or data that materially affects information included in previous announcements, and all material
assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. All projects will be subject to new work programs,
notably drilling, metallurgy and JORC Code 2012 resource estimation as applicable.
The information in this report that relates to Exploration Results and Resource Estimates for the Kalgoorlie Nickel Project and Goongarrie Nickel Cobalt Project is based
on information originally compiled by previous and current full-time employees of Heron Resources Limited and current full-time employees of Ardea Resources Limited.
The Exploration Results, Resource Estimates and data collection processes have been reviewed, verified and re-interpreted by Mr Ian Buchhorn who is a Member of
the Australasian Institute of Mining and Metallurgy and currently a director of Ardea Resources Limited. Mr Buchhorn has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and to the exploration activities undertaken to qualify as a Competent Person as defined in the 2012
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Buchhorn consents to the inclusion in this report of
the matters based on his information in the form and context that it appears.
The information in this report that relates to Mineral Resources for Yeoval, Mount Aubrey and Lewis Ponds is based on information compiled or reviewed by Johan
Lambrechts, a Competent Person who is a Member of the Australian Institute of Geoscientists. Mr Lambrechts is a full-time employee of Ardea Resources Limited and
has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Lambrechts
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The exploration and industry benchmarking summaries are based on information reviewed by Dr Matthew Painter, who is a Member of the Australian Institute of
Geoscientists. Dr Painter is a full-time employee and a director of Ardea Resources Limited and has sufficient experience, which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Painter has reviewed this release and consents to the inclusion in this report of
the information in the form and context in which it appears.
Ardea Resources Limited & controlled entities - Annual Report 2019
33
Directors’ Report continued
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of Ardea Resources Limited for the year ended 30 June
2019, I declare that, to the best of my knowledge and belief, there have been:
a) No contraventions of the auditor
independence requirements of
the
Corporations Act 2001 in relation to the audit; and
b) No contraventions of any applicable code of professional conduct in relation
to the audit.
This declaration is in respect of Ardea Resources Limited and the entities it
controlled during the year.
BUTLER SETTINERI (AUDIT) PTY LTD
LUCY P GARDNER
Director
Perth
Date: 26 September 2019
34
Ardea Resources Limited & controlled entities - Annual Report 2019
Financial Statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2019
Other income
Employee expenses
Insurance expenses
Secretarial fees
Corporate expenses
Computer support services
Depreciation
Rent
Share Based Payments
Employee costs recharged to capitalised exploration
Other expenses
Loss before income tax
Income tax
Net loss attributable to members of the Consolidated Entity’s
Other Comprehensive Loss net of tax
Total Comprehensive Loss
Basic earnings/(loss) per share
(cents per share)
Diluted earnings/(loss) per share
(cents per share)
NOTES
2019
$
2018
$
2
333,044
208,696
3,012,183
2,343,097
112,356
93,260
248,449
83,973
103,484
152,451
417,300
(3,116,518)
713,840
(1,487,734)
-
50,228
133,710
215,644
89,563
41,375
153,006
2,495,476
(2,244,057)
744,793
(3,814,139)
-
(1,487,734)
(3,814,139)
-
-
(1,487,734)
(3,814,139)
(1.41) cents
(4.49) cents
(1.41) cents
(4.49) cents
3
5
14
19
19
The above Consolidated Statement of Comprehensive Income should be read in conjunction
with the Consolidated Entity’s accompanying notes.
Ardea Resources Limited & controlled entities - Annual Report 2019
35
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Financial Statements continued
As at 30 June 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment and motor vehicles
Investments
Capitalised mineral exploration expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Share Option Reserve
Accumulated losses
TOTAL EQUITY
NOTES
2019
$
2018
$
6
7
8
9
10
11
12
13(a)
15
14
11,188,295
1,986,917
15,443
13,190,655
618,232
10,000
24,461,801
25,090,033
38,280,688
391,114
239,949
631,063
631,063
37,649,625
39,897,118
3,588,776
(5,836,269)
37,649,625
19,157,517
3,544,892
10,555
22,712,964
652,603
10,000
16,238,635
16,901,238
39,614,202
964,511
218,385
1,182,896
1,182,896
38,431,306
39,608,365
3,171,476
(4,348,535)
38,431,306
The above Consolidated Statement of Financial Position should be read in conjunction
with the Consolidated Entity’s accompanying notes.
36
Ardea Resources Limited & controlled entities - Annual Report 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from year ended 30 June 2019
Financial Statements continued
Shares issued during the period
13(b)
27,482,636
Less share issue costs
(356,819)
Performance Rights issued to staff
-
2,495,476
BALANCE AT 30 JUNE 2018
39,608,365
3,171,476
(4,348,535)
38,431,306
BALANCE AT 30 JUNE 2017
Total Comprehensive Income
TRANSACTIONS WITH OWNERS
IN THEIR CAPACITY AS OWNERS
BALANCE AT 30 JUNE 2018
Total Comprehensive Income
TRANSACTIONS WITH OWNERS
IN THEIR CAPACITY AS OWNERS
Notes Contributed
Equity
$
Share Option
Reserve
$
Losses
$
Total
$
12,482,548
676,000
(534,396)
12,624,152
-
-
-
-
-
-
-
(3,814,139)
(3,814,139)
-
-
-
27,482,636
(356,819)
2,495,476
(1,487,734)
(1,487,734)
-
-
288,753
417,300
39,608,365
3,171,476
(4,348,535)
38,431,306
Shares issued during the year
13(b)
288,753
Performance Rights issued to staff
-
417,300
BALANCE AT 30 JUNE 2019
39,897,118
3,588,776
(5,836,269)
37,649,625
The above Consolidated statement of changes in equity should be read in conjunction
with the Consolidated Entity’s accompanying notes.
Ardea Resources Limited & controlled entities - Annual Report 2019
37
Financial Statements continued
CONSOLIDATED STATEMENT OF CASHFLOWS
For the year ended 30 June 2019
NOTES
2019
$
2018
$
Cash flows from operating activities
Interest received
Payments to suppliers and employees
(inclusive of goods and services tax)
Net cash used in operating activities
20(a)
353,721
158,323
(1,687,963)
(1,334,242)
(1,501,531)
(1,343,208)
Cash flows from investing activities
Payments for exploration and evaluation
Research and development refund received
Proceeds (Payments) for plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from the issue of shares
Costs of shares issued
Net cash provided by financing activities
Net increase (decrease) in cash held
Cash at the beginning of the financial period
Cash at the end of the financial period
(9,823,166)
2,968,545
(69,112)
(6,923,733)
288,753
-
288,753
(7,969,222)
19,157,517
11,188,295
(9,351,278)
-
(336,533)
(9,687,811)
27,478,391
(352,574)
27,125,817
16,094,798
3,062,719
19,157,517
The above Consolidated Statement of Cash Flows should be read in conjunction
with the Consolidated Entity’s accompanying notes.
38
Ardea Resources Limited & controlled entities - Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in preparing the financial report of the Company, Ardea Resources Limited and
its controlled entities (“Ardea” or “Consolidated Entity”), are stated to assist in a general understanding of the financial report.
These policies have been consistently applied as presented, unless otherwise indicated.
Ardea Resources Limited is a Company limited by shares incorporated and domiciled in Australia whose shares are publicly
traded on the official list of the Australian Securities Exchange. The financial statements are presented in Australian dollars
which is the Consolidated Entity’s functional currency.
(a) Basis of Preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards (including
Australian Interpretations) adopted by the Australian Accounting Standards Board and the Corporations Act 2001.
Ardea Resources Limited is a for-profit entity for the purpose of preparing the financial statements.
The financial report has been prepared on the basis of historical costs and does not take into account changing money
values or, except where stated, current valuations of non-current assets.
The financial report was authorised for issue by the Directors.
(b) Use of Estimates and Judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any
future periods affected. None of the balances reported have been derived from estimates.
(c) Basis of Consolidation
Controlled Entities
The consolidated financial statements comprise the financial statements of Ardea Resources Limited and its
subsidiaries as at 30 June.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses
and profit and losses resulting from intra-group transactions have been eliminated in full. The subsidiaries are fully
consolidated from the date on which control is transferred to the consolidated entity and ceases to be consolidated
from the date on which control is transferred out of the consolidated entity.
The acquisition of the subsidiaries have been accounted for using the purchase method of accounting. The purchase
method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired
and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the consolidated financial
statements include the results of the subsidiaries for the period from their acquisition.
(d)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on
the income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused
tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on those tax rates which are enacted. The relevant tax rates
are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax
asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset
or a liability. No deferred asset or liability is recognised in relation to those temporary differences if they arose in a
transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit
or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
Ardea Resources Limited & controlled entities - Annual Report 2019
39
Notes to the Financial Statements - For the year ended 30 June 2019 continued
that future taxable amounts will be available to utilise those temporary differences and losses.
Current and future tax balances attributable to amounts recognised directly in equity are also recognised directly in
equity.
(e) Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Consolidated Entity
and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue
is recognised:
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
asset.
(f) Cash and Cash Equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short term deposits with
an original maturity of three months or less.
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, which are readily convertible to cash on hand and which are used in the cash
management function on a day-to-day basis.
(g) Employee Entitlements
Liabilities for wages and salaries, annual leave and other current employee entitlements expected to be settled within
12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting
date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-
accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
Contributions to employee superannuation plans are charged as an expense as the contributions are paid or become
payable.
(h) Property, Plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Property, plant and equipment and Motor Vehicles
Property, Plant and equipment, and Motor Vehicles are stated at cost less accumulated depreciation and any
impairment in value.
The carrying values of property, plant and equipment and Motor Vehicles are reviewed for impairment when events or
changes in circumstances indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
If any such indication exists where the carrying values exceed the estimated recoverable amount, the assets or cash
generating units are written down to their recoverable amount.
Depreciation
Depreciable non-current assets are depreciated over their expected economic life using either the straight line or the
diminishing value method. Profits and losses on disposal of non-current assets are taken into account in determining
the operating loss for the year. The depreciation rate used for each class of assets is as follows:
•
Plant & equipment and Motor Vehicles
20 - 33%
(i) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where
the amount of GST incurred is not recoverable from the Australian Taxation Office (“ATO”). In these circumstances
the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables are stated with the amount of GST included. GST incurred is claimed from the ATO when
a valid tax invoice is provided. The net amount of GST recoverable from, or payable to, the ATO is included as a
current asset or liability in the balance sheet.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating
cash flows.
40
Ardea Resources Limited & controlled entities - Annual Report 2019
Notes to the Financial Statements - For the year ended 30 June 2019 continued
(j)
Payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the
financial period and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
(k) Contributed Equity
Issued capital is recognised as the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the
share proceeds received.
(l)
Exploration and Evaluation Expenditure
Mineral exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest
and is subject to impairment testing. These costs are carried forward only if they relate to an area of interest for which
rights of tenure are current and in respect of which:
•
•
such costs are expected to be recouped through the successful development and exploitation of the area of
interest, or alternatively by its sale; or
exploration and/or evaluation activities in the area have not reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active or significant
operations in, or in relation to, the area of interest are continuing.
In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of reduced value,
accumulated costs carried forward are written off in the year in which that assessment is made. A regular review is
undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation
to that area of interest.
Where a mineral resource has been identified and where it is expected that future expenditures will be recovered by
future exploitation or sale, the impairment of the exploration and evaluation is written back and transferred to
development costs. Once production commences, the accumulated costs for the relevant area of interest are amortised
over the life of the area according to the rate of depletion of the economically recoverable reserves.
Costs of site restoration and rehabilitation are recognised when the Consolidated Entity has a present obligation, the
future sacrifice of economic benefits is probable and the amount of the provision can be reliably estimated.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is
measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of
those cash flows.
Exploration and evaluation assets are assessed for impairment if:
(i) sufficient data exists to determine technical feasibility and commercial viability, and
(ii)
facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
For the purpose of impairment testing, exploration and evaluation assets are allocated to cash-generating units to
which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and
then re-classified from intangible assets to mining property and development assets within property, plant and
equipment.
(m) Earnings per Share
Basic earnings per share (“EPS”) are calculated based upon the net loss divided by the weighted average number of
shares. Diluted EPS are calculated as the net loss divided by the weighted average number of shares and dilutive
potential shares.
(n) Leases
Leases are classified at their inception as either operating or finance leases based on the economic substance of the
agreement so as to reflect the risks and benefits incidental to ownership.
The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and
benefits of ownership of the leased item, are recognised as an expense on a straight- line basis over the term of the
lease.
Ardea Resources Limited & controlled entities - Annual Report 2019
41
Notes to the Financial Statements - For the year ended 30 June 2019 continued
(o) Share-based payment transactions
The Company provides benefits to employees (including Directors and consultants) of the Consolidated Entity in the
form of share-based payment transactions, whereby employees render services in exchange for shares or rights over
shares (“Equity–settled transactions”).
There is currently a plan in place to provide these benefits being an Employee Share Option Plan (“ESOP”) which
provides benefits to Directors, consultants and senior executives.
The cost of these equity-settled transactions is measured by reference to fair value at the date at which they are
granted. The fair value is determined by an external valuer using the either the Black -Scholes or Binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of the shares of Ardea Resources Limited (“market conditions”).
The cost of equity settled securities is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (“vesting date”).
Where the Consolidated Entity acquires some form of interest in an exploration tenement or an exploration area of
interest and the consideration comprises share-based payment transactions, the fair value of the equity instruments
granted is measured at grant date. The cost of equity securities is recognised within capitalised mineral exploration
and evaluation expenditure, together with a corresponding increase in equity.
(p) Financial risk management
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework, to identify and analyse the risks faced by the Consolidated Entity. These risks include credit risk, liquidity
risk and market risk from the use of financial instruments. The Consolidated Entity has only limited use of financial
instruments through its cash holdings being invested in short term interest bearing securities. The primary goal of this
strategy is to maximise returns while minimising risk through the use of accredited Banks with a minimum credit rating
of A1 from Standard & Poors. The Consolidated Entity has no debt, and working capital is maintained at its highest
level possible and regularly reviewed by the full board.
(q) Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the financial instrument, and are measured initially at fair value adjusted by transactions costs, except
for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent measurement
of financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or
when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when
it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the
transaction price, all financial assets are initially measured at fair value adjusted for transaction costs (where
applicable).
Classification and measurement of financial liabilities
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the
Company designated a financial liability at fair value through profit or loss.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss
are included within finance costs or finance income.
(r) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2019
reporting periods, and have not been adopted by the Consolidated Entity. The Consolidated Entity’s assessment of
the impact of these new standards and interpretations is that they will have no material impact and will only effect
disclosure provisions in future full year accounts.
42
Ardea Resources Limited & controlled entities - Annual Report 2019
Notes to the Financial Statements - For the year ended 30 June 2019 continued
2019
$
2018
$
333,044
208,696
2. OTHER INCOME
Other Income
Interest
3. EXPENSES
Contributions to employees superannuation plans
Depreciation - Plant and equipment
Provision for employee entitlements
249,601
103,484
77,673
178,544
41,375
92,107
4. AUDITORS’ REMUNERATION
Audit – Butler Settineri (Audit) Pty Limited
Audit and review of the financial statements
5.
INCOME TAX
29,705
28,347
No income tax is payable by the Consolidated Entity as it has incurred losses for income tax purposes
for the year, so current tax, deferred tax and tax expense is $Nil.
(a) Numerical reconciliation of income tax expense
to prima facie tax payable
Loss from continuing operations
Tax at the tax rate of 27.5%
Tax effect of amounts which are deductible in calculating taxable income:
Non-deductible expenses
Other allowable expenditure
Deferred tax asset not brought to account
Income tax expense
(b) Tax losses
Unused tax losses for which no deferred tax asset
has been recognised
Potential tax benefit at 27.5%
(c) Unbooked Deferred Tax Assets and Liabilities
Unbooked deferred tax assets comprise:
Provisions/Accruals/Other
Tax losses available for offset against future taxable income
(1,487,734)
(409,127)
(3,814,139)
(1,048,888)
44,798
-
364,329
-
654,258
-
394,630
-
13,534,000
5,630,308
3,721,850
1,548,335
201,031
13,534,000
13,735,031
148,278
5,630,308
5,778,586
Unbooked deferred tax liabilities comprise:
Capitalised mineral exploration and evaluation expenditure
9,912,025
3,783,147
(d) Franking credits balance
The Consolidated Entity has no franking credits available as at 30 June 2019.
Ardea Resources Limited & controlled entities - Annual Report 2019
43
Notes to the Financial Statements - For the year ended 30 June 2019 continued
6. OTHER RECEIVABLES
Current
GST recoverable
Bonds and guarantees
R&D Receivable
Interest Receivable and Other
7. OTHER ASSETS
Current
Prepayments
8. PROPERTY, PLANT AND EQUIPMENT
Plant and office equipment
At cost
Accumulated depreciation
Motor Vehicles
At cost
Accumulated depreciation
Property and buildings
At cost
Accumulated depreciation
2019
$
2018
$
40,317
90,000
1,600,000
256,600
1,986,917
331,509
90,000
3,035,642
87,741
3,544,892
15,443
10,555
248,550
(162,063)
86,487
243,314
(76,515)
166,799
377,680
(12,734)
364,946
618,232
213,683
(117,980)
95,703
209,068
(17,114)
191,954
377,680
(12,734)
364,946
652,603
Included in the Property and buildings above is an amount of $366,735 relating to the company’s assets in New South
Wales which are being considered for disposal by the consolidated entity to a new company, Godolphin Resources
Limited, by means of an IPO process. These assets have not been reclassified as held-for-sale as the potential disposal
is subject to shareholder approval and a successful capital raising under the IPO Process.
44
Ardea Resources Limited & controlled entities - Annual Report 2019
Notes to the Financial Statements - For the year ended 30 June 2019 continued
8. PROPERTY, PLANT AND EQUIPMENT cont
Reconciliation
Reconciliation of the carrying amounts for each
class of plant and equipment and Properties and
Buildings are set out below:
Plant and office equipment
Carrying amount at beginning of the period
Additions
Depreciation
Carrying amount at the end of the year
Motor Vehicles
Carrying amount at beginning of the year
Additions
Depreciation
Carrying amount at the end of the year
Property and buildings
Carrying amount at beginning of the year
Additions
Depreciation
Carrying amount at the end of the year
9.
INVESTMENTS
Non-Current
Investment in Newamu
2019
$
2018
$
95,703
34,867
(44,083)
86,487
191,954
34,246
(59,401)
166,799
364,946
-
-
364,946
3,445
116,519
(24,261)
95,703
-
209,068
(17,114)
191,954
354,001
10,945
-
364,946
10,000
10,000
Particulars in relation to the controlled entities
Ardea Resources Limited is the parent entity.
Name of Controlled entity
Class of Shares
Equity Holding
TriAusMin Pty Ltd ACN 062 002 475
Atriplex Pty Ltd ACN 113 719 207
Yerilla Nickel Pty Ltd ACN 123 249 810
Ardea Exploration Pty Ltd ACN 137 889 279
Kalgoorlie Nickel Pty Ltd ACN 137 889 199
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2019
100%
100%
100%
100%
100%
2018
100%
100%
100%
100%
100%
Ardea Resources Limited & controlled entities - Annual Report 2019
45
Notes to the Financial Statements - For the year ended 30 June 2019 continued
10. CAPITALISED MINERAL
EXPLORATION EXPENDITURE
Non-Current
In the exploration phase
Cost brought forward
Exploration Properties purchased
Add: Expenditure incurred during the year (at cost)
R&D Refund receivable
Exploration expenditure written off
2019
$
2018
$
16,238,635
9,331,853
-
9,823,167
(1,600,000)
-
-
9,942,424
(3,035,642)
-
24,461,802
16,238,635
The recoupment of costs carried forward is dependent on the successful development and/or commercial
exploitation or alternatively sale of the respective areas of interest.
Included in the capitalised mineral exploration expenditure above is an amount of $6,692,419 relating to the
company’s assets in New South Wales which are being considered for disposal by the consolidated entity to a new
company, Godolphin Resources Limited, by means of an IPO process. These assets have not been reclassified as
held-for-sale as the potential disposal is subject to shareholder approval and a successful capital raising under the
IPO Process.
11. TRADE AND OTHER PAYABLES
Current (Unsecured)
Trade creditors
Other creditors and accruals
Included within trade and other creditors and accruals is an amount
of $100,930 (2018 - $778,86) relating to exploration expenditure.
12. PROVISIONS
Current
Employee entitlements
2019
$
2018
$
367,114
24,000
391,114
943,511
21,000
964,511
239,949
218,385
46
Ardea Resources Limited & controlled entities - Annual Report 2019
Notes to the Financial Statements - For the year ended 30 June 2019 continued
13. CONTRIBUTED EQUITY
(a) Ordinary Shares
106,145,424 (2018 - 104,990,413)
fully paid ordinary shares
(b)
Share Movements during the Year
2019
$
2018
$
39,897,118
39,608,365
2019
Number
of Shares
$
2018
Number
of Shares
$
Beginning of the financial period
104,990,413
36,608,365
67,000,747
12,482,548
New share issues during the period
IPO Options exercised at 25c/share
1,155,011
288,753
-
Share Purchase Plan at 72.5 cents/share
Placement at 72.5 cents/share
Loyalty Options exercised at 77c/share
Performance rights issued to staff
Less costs of issues
-
-
-
-
-
-
-
-
-
-
6,091,188
7,647,850
22,755,628
1,495,000
-
4,416,111
5,544,691
17,521,834
-
-
(356,819)
106,145,424
39,897,118
104,990,413
39,608,365
(c) Unlisted Options
At the end of the financial year the following options have been issued to Investors and unrelated parties – there were
no options issued during the current financial year:
Number of Options on Issue
Exercise Price
11,155,011
25 cents each
Expiry Date
9 February 2020
The above options represent unissued ordinary shares of the Company under option as at the end of the financial
year. These unlisted options do not entitle the holder to participate in any share issue of the Company. During the
year 1,155,011 IPO Options were exercised at 25 cents each. Since the end of the financial year a further 6,146,429
IPO Options were exercised at 25 cents each, with 5,008,582 Options remaining on issue at the date of this report.
(d) Share Based Payments
During the current financial year there were a number of Share Based payments made to Directors and Employees
with 830,000 Performance Rights, (2018 – 4,485,000) issued during the period and there were 430,000 Performance
Rights (2018 – Nil) that lapsed. There were no shares issued during the period from the conversion of Performance
Rights (2018 – 1,495,000). Subsequent to year end there have been a further 1,941,000 Performance Rights issued
and 170,000 have lapsed.
Ardea Resources Limited & controlled entities - Annual Report 2019
47
Notes to the Financial Statements - For the year ended 30 June 2019 continued
13. CONTRIBUTED EQUITY cont
(e) Terms and Conditions of Contributed Equity
Ordinary Shares
The Company is a public Company limited by shares. The Company was incorporated in Perth, Western Australia.
The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on the
shares respectively held by them.
Ordinary shares have the right to receive dividends as declared and, in the event of the winding up of the Company,
to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held.
Ordinary shares which have no par value, entitle their holder to one vote, either in person or by proxy, at a meeting of
the Company.
The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so
that they may continue to provide returns for shareholders and benefits for other stakeholders.
(f) Capital Risk Management
Due to the nature of the Consolidated Entity’s activities, being mineral development and exploration, the Consolidated
Entity does not have ready access to credit facilities, with the primary source of funding being equity raisings.
Therefore, the focus of the Consolidated Entity’s capital risk management is the current working capital position against
the requirements to meet exploration programmes and corporate overheads. The Consolidated Entity’s strategy is to
ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating
appropriate capital raisings as required. The working capital position of the Consolidated Entity at 30 June 2019 are
as follows:
Cash and cash equivalents
Trade and other receivables
Other assets
Trade and other payables
Provisions
Working capital position
14. ACCUMULATED LOSSES
Accumulated losses at the beginning of the period
Net loss attributable to members
Accumulated losses at the end of the year
15. RESERVES
Share Option/Performance Rights Reserve
Balance at the beginning of the period
Add: Amounts expensed in current period
Balance at the end of the period
2019
$
11,188,295
1,966,917
15,443
(391,114)
(239,949)
2018
$
19,157,517
3,544,892
10,555
(964,511)
(218,385)
12,539,592
21,530,068
4,384,535
1,487,734
5,836,269
534,396
3,814,139
4,348,535
3,171,476
417,300
3,588,776
676,000
2,495,476
3,171,476
Share Option reserve
The share option reserve comprises any equity settled share based payment transactions.
48
Ardea Resources Limited & controlled entities - Annual Report 2019
Notes to the Financial Statements - For the year ended 30 June 2019 continued
16. RELATED PARTIES
Full remuneration and other transaction details for Directors and Executives are included in the Directors Report where
the information has been audited as indicated.
17. EXPENDITURE COMMITMENTS
(a)
Exploration
The Consolidated Entity has certain obligations to perform minimum exploration work on mineral leases held. These
obligations may vary over time, depending on the Consolidated Entity’s exploration programmes and priorities. As at
balance date, total exploration expenditure commitments on tenements held by the Consolidated Entity have not been
provided for in the financial statements and those which cover the following twelve month period amount to $3,600,812
(2018 - $2,202,480). These obligations are also subject to variations by farm-out arrangements or sale of the relevant
tenements.
2019
$
2018
$
(b) Operating Lease Commitments
Total operating lease expenditure contracted for at balance date but not provided for in the financial statements,
payable:
Not later than one year
Between one and five years
89,577
35,999
125,576
89,577
125,576
215,153
The operating lease relates to the Consolidated Entity’s registered office premises in West Perth, which was entered
into on 20 April 2017 for a period of 3 years.
(c) Capital Commitments
The Consolidated Entity had no capital commitments at 30 June 2019.
18. SEGMENT INFORMATION
The Consolidated Entity operates predominantly in one segment involved in the mineral exploration and
development industry in Australia.
Ardea Resources Limited & controlled entities - Annual Report 2019
49
Notes to the Financial Statements - For the year ended 30 June 2019 continued
2019
$
2018
$
19. EARNINGS/ (LOSS) PER SHARE
The following reflects the loss and share Data used in
the calculations of basic and diluted earnings/ (loss) per share:
Earnings/ (loss) used in calculating basic
and diluted earnings/ (loss) per share
(1,487,734)
(3,814,139)
2019
Number of Shares
2018
Number of Shares
Weighted average number of ordinary shares used in
calculating basic earnings/ (loss) per share:
105,368,690
84,985,876
Effect of dilutive securities
Share options*
Adjusted weighted average number of ordinary shares
-
-
used in calculating diluted earnings/ (loss) per share
105,368,690
84,985,876
Basic and Diluted loss per share (cents per share)
1.41 cents
4.49 cents
*Non-dilutive securities
As at balance date, 11,155,011 unlisted options which represent potential ordinary shares were not dilutive as they
would decrease the loss per share.
2019
$
2018
$
20. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of the loss from ordinary activities
after income tax to the net cash flows
used in operating activities
Loss from ordinary activities after income tax
(1,487,734)
(3,814,139)
Non-cash items:
Depreciation
Accrued Interest
Performance Rights
Change in operating assets and liabilities:
Decrease (Increase) in prepayments
Decrease (Increase) in receivables
Increase in trade creditors and accruals
Increase in employee entitlements
103,484
20,677
417,300
(181,065)
344,930
(629,506)
77,672
41,375
(50,373)
2,495,476
(7,842)
(234,359)
139,288
87,366
Net cash outflows used in operating activities
(1,334,242)
(1,343,208)
(b) Non Cash Financing and Investing Activities
Full details of the Non Cash impact of the Performance Rights has been disclosed in the Remuneration Report.
50
Ardea Resources Limited & controlled entities - Annual Report 2019
Notes to the Financial Statements - For the year ended 30 June 2019 continued
21. FINANCIAL INSTRUMENTS
The Consolidated Entity’s activities expose it to a variety of financial risks and market risks. The Consolidated Entity’s
overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Consolidated Entity.
(a)
Interest Rate Risk
The Consolidated Entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate
as a result of changes in market, interest rates and the effective weighted average interest rates on those financial
assets, is not significant. Cash and cash equivalents are the only assets effected and the average interest rate received
is 2.38% (2018: 2.50%).
(b) Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date, is the
carrying amount, net of any provisions for doubtful debts, as disclosed in the balance sheet and in the notes to the
financial statements.
The Consolidated Entity does not have any material credit risk exposure to any single debtor or group of debtors,
under financial instruments entered into by it, and hence no credit loss allowance is required.
(c) Commodity Price Risk and Liquidity Risk
At the present state of the Consolidated Entity’s operations it has minimal commodity price risk and limited liquidity
risk due to the level of payables and cash reserves held. The Consolidated Entity’s objective is to maintain a balance
between continuity of exploration funding and flexibility through the use of available cash reserves.
(d) Net Fair Values
For assets and other liabilities, the net fair value approximates their carrying value. No financial assets and financial
liabilities are readily traded on organised markets in standardised form. The Consolidated Entity has no financial
assets where the carrying amount exceeds net fair values at balance date.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the
statement of financial position and in the notes to the financial statements.
22. EMPLOYEE ENTITLEMENTS AND SUPERANNUATION COMMITMENTS
Employee Entitlements
The aggregate employee entitlement liability is disclosed in Note 12.
Superannuation Commitments
The Consolidated Entity contributes to individual employee accumulation superannuation plans at the statutory rate
of the employees’ wages and salaries, in accordance with statutory requirements, to provide benefits to employees
on retirement, death or disability.
Accordingly no actuarial assessments of the plans are required.
23. CONTINGENT LIABILITIES
There were no material contingent liabilities not provided for in the financial statements of the Consolidated Entity as at
30 June 2019 other than:
Native Title and Aboriginal Heritage
Native title claims have been made with respect to areas which include tenements in which the Consolidated Entity
has an interest. The Consolidated Entity is unable to determine the prospects for success or otherwise of the claims
and, in any event, whether or not and to what extent the claims may significantly affect the Consolidated Entity or its
projects. Agreement is being negotiated with various native title claimants in relation to Aboriginal Heritage issues
regarding certain areas in which the Consolidated Entity has an interest.
Ardea Resources Limited & controlled entities - Annual Report 2019
51
Notes to the Financial Statements - For the year ended 30 June 2019 continued
24. EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen since the end of the financial year any item, transaction or event of a material and unusual nature
likely, in the opinion of the Directors of the Consolidated Entity to affect substantially the operations of the Consolidated
Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent financial years.
25. PARENT COMPANY
(a) Financial Position
Assets
Total current assets
Total non-current assets
Total Assets
Liabilities
Total current liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Total comprehensive loss for the year
2019
$
2018
$
13,190,655
25,090,033
38,280,688
631,063
631,063
37,649,625
39,897,118
3,588,776
(5,836,269)
37,649,625
1,487,734
22,712,964
16,901,238
39,614,202
1,182,896
1,182,896
38,431,306
39,608,365
3,171,476
(4,348,535)
38,431,306
3,814,139
Ardea Resources Limited has not entered into any deed of cross guarantee with its wholly-owned subsidiaries, had
no contingent liabilities at 30 June 2019 and no capital commitments at 30 June 2019.
52
Ardea Resources Limited & controlled entities - Annual Report 2019
DIRECTORS’ DECLARATION
In the opinion of the Directors of Ardea Resources Limited (“the Consolidated Entity”):
(a)
the financial statements and notes, set out on pages 35 to 52, are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Accounting Standards in Australia and the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
giving a true and fair view of the financial position of the Consolidated Entity as at 30 June 2019 and of its
performance, as represented by the results of its operations, for the financial year to 30 June 2019.
(b)
there are reasonable grounds to believe that Ardea Resources Limited will be able to pay its debts as and when they
become due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the
Managing Director and the Company Secretary for the year to 30 June 2019.
This declaration is made in accordance with a resolution of the Directors.
Signed at Perth this 26th day of September 2019.
Katina Law
Executive Chair
Ardea Resources Limited & controlled entities - Annual Report 2019
53
INDEPENDENT AUDIT REPORT
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ARDEA RESOURCES LIMITED
Report on the financial report
Opinion
We have audited the financial report of Ardea Resources Limited (“the Company”) and its controlled entities (“the
Group”), which comprises the consolidated statement of financial position as at 30 June 2019 the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
i) giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its financial
performance for the year then ended; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We have conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those Standards are further described in the Auditor’s responsibilities for the audit of the financial report section
of our report.
We are independent of the Group 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 (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our ethical requirements in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period.
These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed the key audit matter
Capitalised mineral exploration expenditure
(refer note 10)
Our audit procedures included:
The Group operates as an exploration entity and as
such its primary activities entail expenditure focussed
on the exploration for and evaluation of economically
viable mineral deposits. These activities currently
include the Kalgoorlie Nickel Project in WA and the
Lewis Ponds Project in NSW.
(cid:121) ensuring the Group’s continued right to explore for
minerals in the relevant exploration areas including
assessing documentation such as exploration and
mining licences;
(cid:121) enquiring of management and the directors as to the
Group’s
future
intentions and strategies
exploration activity and reviewing budgets and cash
flow forecasts;
for
54
Ardea Resources Limited & controlled entities - Annual Report 2019
Independent Audit Report continued
All exploration and evaluation expenditure incurred
has been capitalised and recognised as an asset in
the Statement of Financial Position. The closing
value of this asset is $24,461,802 as at 30 June
2019.
The carrying value of capitalised mineral exploration
assets is subjective and is based on the Group’s
intention and ability, to continue to explore the asset.
The carrying value may also be affected by the
results of ongoing exploration activity indicating that
the mineral reserves and resources may not be
commercially viable for extraction. This creates a risk
that the asset value included within the financial
statements may not be recoverable.
(cid:121) assessing the results of recent exploration activity to
determine whether
indicators
suggesting a potential impairment of the carrying
value of the asset;
there are any
(cid:121) assessing the Group’s ability to finance the planned
exploration and evaluation activity; and
(cid:121) assessing the adequacy of the disclosures made
by the Group in the financial report.
Research and Development Tax Incentive
(refer notes 6 and 10)
Our audit procedures included:
Management has applied judgements, assumptions
and estimates in determining the R&D Tax Incentive
refund recognised for the 2019 year.
(cid:121) evaluating the assumptions, methodologies and
conclusions used by the Group in preparing the
R&D Tax Incentive estimate; and
(cid:121) assessing the adequacy of the disclosures made by
the Group in the financial report
Share based payments – performance rights
(refer note 13 and 15)
Our audit procedures included;
During the 2018 and 2019 years the Group has
awarded performance rights to key management
personnel and employees.
These rights vest subject to the achievement of
specific performance milestones.
The Group used both
the Black-Scholes and
Binomial models in valuing the rights based on the
tranche of rights
milestones attaching
awarded.
to each
The share based payment expense for the year
arising as a result of awarding these rights is
$417,300.
Deferred Taxation
(refer note 5)
The Company relies on the use of an expert to
prepare the taxation disclosures which are included in
the financial statements.
(cid:121) assessing the assumptions used in the valuation of
the performance rights;
(cid:121) assessing the recognition of the value of the
performance rights;
(cid:121) assessing
the accuracy of
the share based
payment expense for the year; and
(cid:121) assessing the adequacy of the disclosures made
by the Group in the financial report.
In accordance with Australian Auditing Standards, we
relied on the work of management's expert with respect
to the assumptions used in the calculation of deferred
taxes. Our audit procedures included:
(cid:121) examining
the qualifications, objectivity and
experience of management's expert;
(cid:121) evaluating the assumptions, methodologies and
conclusions used by the Group in preparing their
estimate of deferred taxes; and
(cid:121) assessing the adequacy of the disclosures made
by the Group in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the information in the
Group’s annual report for the period ended 30 June 2019, but does not include the financial report and the
auditor’s report thereon.
Ardea Resources Limited & controlled entities - Annual Report 2019
55
Independent Auditor’s Report continued
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibilities for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with the 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 financial report that gives
a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of the financial
report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
(cid:121)
Identify and assess risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
(cid:121) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Group’s internal control.
(cid:121) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
(cid:121) Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
(cid:121) Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
(cid:121) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
56
Ardea Resources Limited & controlled entities - Annual Report 2019
Independent Audit Report continued
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significant in
the audit of the financial report of the current period and are therefore key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh public interest benefits of
such communication.
Report on the remuneration report
Opinion
We have audited the remuneration report included on pages 9 to 12 of the directors’ report for the year ended 30
June 2019.
28-32
In our opinion, the remuneration report of Ardea Resources Limited, for the year ended 30 June 2019, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration report in
accordance with section 300A of the Corporations Act 2001.
Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in
accordance with Australian Auditing Standards.
BUTLER SETTINERI (AUDIT) PTY LTD
LUCY P GARDNER
Director
Perth
Date: 26 September 2019
Ardea Resources Limited & controlled entities - Annual Report 2019
57
Shareholder Information
The following additional information was applicable at 24 September 2019
1. Distribution of Fully Paid Ordinary Shareholders is as follows:
Size of Holding Number of Holders Shares Held
%
1 - 1,000 1,958 804,707 0.72
1,001 - 5,000 1,362 3,523,332 3.14
5,001 - 10,000 460 3,581,650 3.19
10,001 - 100,000 670 21,010,204 18.71
100,001 - 122 83,371,960 74.25
4,572 112,291,853 100.00
a) There were 1,669 shareholders who held less than a marketable parcel.
b) The twenty largest shareholders hold 49.6% of the issued fully paid capital of the Company.
2. Substantial Shareholders of Fully Paid Ordinary Shareholders are as follows:
Holder Number of Shares %
Ian Buchhorn and Associates 11,851,440 11.29
B O’Shannassy and Associates 8,926,335 8.50
3. Voting Rights
In accordance with the Company's constitution, voting rights are on the basis of a show of hands, one vote for every
registered holder and on a poll, one vote for each share held by registered holders.
4. Top 20 Shareholders of Fully Paid Ordinary Shares
Number of Shares %
1 Citicorp Nom PL 8,317,145 7.41%
2 J P Morgan Nom Aust Ltd 5,606,727 4.99%
3 BNP Paribas Nom PL 5,415,145 4.82%
4 Hazurn PL 5,393,938 4.80%
5 Josco PL 5,383,809 4.79%
6 HSBC Custody Nom Aust Ltd 3,083,990 2.75%
7 Dupuy Olivier + Julie 2,301,622 2.05%
8
Jones Iwan + Joyce C 2,300,000 2.05%
9 Kurana PL 2,178,346 1.94%
10 BNP Paribas Noms PL 2,031,334 1.81%
11 Merrill Lynch Aust Nom PL 2,005,663 1.79%
12 B & J O'Shannassy Mgnt PL 1,906,936 1.70%
13 Josco PL 1,666,664 1.48%
14 Neweconomy Com Au Nom PL <900 A/C> 1,392,188 1.24%
15 Spadaro Martin + K 1,325,000 1.18%
16 Buchhorn Pamela Jean 1,156,553 1.03%
17 Latsod PL 1,150,000 1.02%
18 Buckley Martin 1,141,456 1.02%
16 Heron Resources Ltd 1,000,000 0.89%
20 Johnston David Anthony 990,002 0.88%
TOTAL 55,746,518 49.64%
58
Ardea Resources Limited & controlled entities - Annual Report 2019
Shareholder Information continued
5. Unlisted Options
Number of Options on Issue Exercise Price Expiry Date No. of Holders
5,008,582 a) 25 cents each 9 February 2020 1
a) The holder is Heron Resources Limited.
6. Share Buy-Backs
There is no current on-market buy-back scheme.
7. Business Objectives
Ardea Resources Limited has used cash and cash equivalents held at the time of listing in a way consistent with its
stated business objectives.
8. Stock Exchanges
The Securities of the Company are not quoted on any other stock exchanges.
Ardea Resources Limited & controlled entities - Annual Report 2019
59
Tenement Schedule as at 30 Sept 2019
Tenement
Location Ardea Interest Status Note Tenement
(%)
Location Ardea Interest Status Note
(%)
Ardea Western Australia Projects
Goongarrie Nickel Cobalt Project
E24/0196 GOONGARRIE 100% LIVE
M24/0541 GOONGARRIE 100% LIVE
E24/0209 GOONGARRIE 100% LIVE
M24/0731 GOONGARRIE 100% LIVE 3, 7
E24/0211 GOONGARRIE 100% PENDING
M24/0732 GOONGARRIE 100% LIVE 3, 7
E29/0934 GOONGARRIE 100% LIVE
M24/0744 GOONGARRIE 100% LIVE 7
E29/1028 GOONGARRIE 100% LIVE
M24/0778 GOONGARRIE 100% LIVE 3
E29/1038 GOONGARRIE 100% LIVE
M29/0167 GOONGARRIE 100% LIVE
E29/1039 GOONGARRIE 100% PENDING
M29/0202 GOONGARRIE 100% LIVE
E29/1045 GOONGARRIE 100% LIVE
M29/0272 GOONGARRIE 100% LIVE
E29/1048 GOONGARRIE 100% LIVE
M29/0278 GOONGARRIE 100% LIVE
E29/1060 GOONGARRIE 100% PENDING
M29/0423 GOONGARRIE 100% LIVE
E29/1061 GOONGARRIE 100% PENDING
M29/0424 GOONGARRIE 100% PENDING
E30/0500 GOONGARRIE 100% LIVE
M29/0426 GOONGARRIE 100% PENDING
E30/0501 GOONGARRIE 100% PENDING
P24/5260 GOONGARRIE 100% PENDING
E30/0502 GOONGARRIE 100% PENDING
P24/5328 GOONGARRIE 100% PENDING
G29/0025 GOONGARRIE 100% PENDING
P24/5329 GOONGARRIE 100% PENDING
L24/0239 GOONGARRIE 100% LIVE
P29/2265 GOONGARRIE 100% LIVE
L29/0134 GOONGARRIE 100% LIVE
P24/5265 GOONGARRIE-CARR BOYD 100% LIVE
L29/0135 GOONGARRIE 100% LIVE
P24/5169 GOONGARRIE-WINDANYA 100% LIVE
L30/0067 GOONGARRIE 100% LIVE
M24/0919 GOONGARRIE-SCOTIA 100% Ni Lat LIVE 9
L30/0068 GOONGARRIE 100% LIVE
M24/0959 GOONGARRIE-SCOTIA 100% Ni Lat LIVE 9
GNCP Expansion Siberia
GNCP Expansion Black Range
E24/0203
SIBERIA 100% Ni Lat LIVE 5
M24/0757 BLACK RANGE 100% Ni Lat LIVE 5
E29/0889
SIBERIA 100% Ni Lat LIVE 5
M24/0973 BLACK RANGE 100% Ni Lat PENDING 5
M24/0634 SIBERIA 100% Ni Lat LIVE 1, 5
P24/4395
BLACK RANGE 100% Ni Lat LIVE 5
M24/0660 SIBERIA 100% Ni Lat LIVE 5
P24/4396
BLACK RANGE 100% Ni Lat LIVE 5
M24/0663 SIBERIA 100% Ni Lat LIVE 5
P24/4400
BLACK RANGE 100% Ni Lat LIVE 5
M24/0664 SIBERIA 100% Ni Lat LIVE 5
P24/4401
BLACK RANGE 100% Ni Lat LIVE 5
M24/0665 SIBERIA 90% Ni Lat LIVE 2, 5
P24/4402
BLACK RANGE 100% Ni Lat LIVE 5
M24/0683 SIBERIA 100% Ni Lat LIVE 5
P24/4403
BLACK RANGE 100% Ni Lat LIVE 5
M24/0686 SIBERIA 100% Ni Lat LIVE 5
M24/0772 SIBERIA 100% Ni Lat LIVE 5
GNCP Expansion Highway
M24/0797 SIBERIA 100% Ni Lat LIVE 5
E29/1082 HIGHWAY 100% PENDING
M24/0915 SIBERIA 100% Ni Lat LIVE 5
E29/1083 HIGHWAY 100% PENDING
M24/0916 SIBERIA 100% Ni Lat LIVE 5
M29/0214 HIGHWAY 100% LIVE
P24/5235
SIBERIA 100% LIVE
P29/2501 HIGHWAY 100% LIVE
P24/5236
SIBERIA 100% LIVE
P29/2559 HIGHWAY 100% PENDING
P29/2484
SIBERIA 100% LIVE
P29/2560 HIGHWAY 100% PENDING
P29/2485
SIBERIA 100% LIVE
P29/2561 HIGHWAY 100% PENDING
P29/2562 HIGHWAY 100% PENDING
60
Ardea Resources Limited & controlled entities - Annual Report 2019
Tenement Schedule continued
Tenement
Location Ardea Interest Status Note Tenement
(%)
Location Ardea Interest Status Note
(%)
GNCP Expansion Ghost Rocks
P29/2513 GHOST ROCKS 100% LIVE
E29/0941 GHOST ROCKS 100% LIVE
P29/2514 GHOST ROCKS 100% LIVE
E29/0981 GHOST ROCKS 100% LIVE
P29/2515 GHOST ROCKS 100% LIVE
P29/2511 GHOST ROCKS 100% LIVE
P29/2538 GHOST ROCKS 100% PENDING
P29/2512 GHOST ROCKS 100% LIVE
P29/2539 GHOST ROCKS 100% PENDING
Kalpini Hub GNCP Expansion
P25/2454
KALPINI-BULONG 100% LIVE
E27/0524
KALPINI 100% LIVE
P25/2455
KALPINI-BULONG 100% LIVE
E27/0606
KALPINI 100% LIVE
P25/2456
KALPINI-BULONG 100% LIVE
E27/0607
KALPINI 100% LIVE
P25/2457
KALPINI-BULONG 100% LIVE
E28/1224
KALPINI 100% LIVE
P25/2458
KALPINI-BULONG 100% LIVE
M27/0395 KALPINI 100% LIVE
P25/2459
KALPINI-BULONG 100% LIVE
M27/0506 KALPINI 100% PENDING
P25/2460
KALPINI-BULONG 100% LIVE
M28/0199 KALPINI 100% LIVE
P25/2461
KALPINI-BULONG 100% LIVE
M28/0201 KALPINI 100% LIVE
P25/2482
KALPINI-BULONG 100% LIVE
M28/0205 KALPINI 100% LIVE
P25/2483
KALPINI-BULONG 100% LIVE
P25/2484
KALPINI-BULONG 100% LIVE
E27/0278
KALPINI-PIONEER 100% Ni Lat LIVE 8
P25/2559
KALPINI-BULONG 100% LIVE
E28/1746
KALPINI-PIONEER 100% Ni Lat LIVE 8
P25/2560
KALPINI-BULONG 100% LIVE
E28/2483
KALPINI-PIONEER 100% Ni Lat LIVE 8
P25/2561
KALPINI-BULONG 100% LIVE
P25/2609
KALPINI-BULONG 100% LIVE
E25/0578
KALPINI-BULONG 100% PENDING
P25/2613
KALPINI-BULONG 100% PENDING
M25/0059 KALPINI-BULONG 100% LIVE
P25/2614
KALPINI-BULONG 100% PENDING
M25/0134 KALPINI-BULONG 100% LIVE
P25/2615
KALPINI-BULONG 100% PENDING
M25/0145 KALPINI-BULONG 100% LIVE
M25/0151 KALPINI-BULONG 100% LIVE
M31/0488 KALPINI-LAKE REBECCA 100% PENDING
M25/0161 KALPINI-BULONG 100% LIVE
P31/2038
KALPINI-LAKE REBECCA 100% LIVE
M25/0171 KALPINI-BULONG 100% LIVE
P31/2039
KALPINI-LAKE REBECCA 100% LIVE
M25/0187 KALPINI-BULONG 100% LIVE
P31/2040
KALPINI-LAKE REBECCA 100% LIVE
M25/0209 KALPINI-BULONG 100% LIVE
Yerilla Hub GNCP Expansion
E39/1954
YERILLA-AUBILS 100% LIVE 7
M15/1101 WA REGIONAL pre-empt Ni Lat LIVE 10
M15/1263 WA REGIONAL pre-empt Ni Lat LIVE 10
E31/1092
YERILLA-BOYCE CREEK 100% LIVE 6
M15/1264 WA REGIONAL pre-empt Ni Lat LIVE 10
E31/1169
YERILLA-BOYCE CREEK 100% LIVE
M15/1323 WA REGIONAL pre-empt Ni Lat LIVE 10
E31/1208
YERILLA-BOYCE CREEK 100% PENDING
M15/1338 WA REGIONAL pre-empt Ni Lat LIVE 10
E31/1213
YERILLA-BOYCE CREEK 100% PENDING
E27/0300 WA REGIONAL 100% Ni Lat LIVE 11
M31/0483 YERILLA-BOYCE CREEK 100% LIVE 6
M31/0475 YERILLA-JUMP UP DAM 100% LIVE 6
M31/0477 YERILLA-JUMP UP DAM 100% LIVE 6
M31/0479 YERILLA-JUMP UP DAM 100% LIVE 6
Ardea Resources Limited & controlled entities - Annual Report 2019
61
Tenement Schedule continued
Tenement
Location Ardea Interest Status Note Tenement
(%)
Location Ardea Interest Status Note
(%)
Kookynie Gold-Nickel
Bedonia Gold-Nickel
E40/0350
KOOKYNIE option for 100% LIVE
E63/1827
BEDONIA 100% LIVE
E40/0357
KOOKYNIE option for 100% LIVE
E63/1828
BEDONIA 100% LIVE
Mt Zephyr Gold-Nickel
E63/1857
BEDONIA 100% LIVE
E37/1271 MT ZEPHYR 100% LIVE
E63/1928
BEDONIA 100% LIVE
E37/1272 DARLOT EAST 100% LIVE
E63/1929
BEDONIA 100% LIVE
E37/1273 DARLOT EAST 100% LIVE
E63/1974
BEDONIA 100% PENDING
E37/1274 MT ZEPHYR 100% LIVE
E63/1976
BEDONIA 100% PENDING
E63/1856
BEDONIA 100% LIVE
E39/1706 MT ZEPHYR 100% LIVE
E39/1854 MT ZEPHYR 100% LIVE
Donnelly River Graphite
E39/1985 MT ZEPHYR 100% LIVE
E70/4804 DONNELLY RIVER 100% PENDING
Perrinvale Nickel-Gold
E29/1006
PERRINVALE 100% LIVE
E29/1078
PERRINVALE 100% PENDING
Lachlan Fold Belt Ardea
EL 8557
RESTDOWN LITHIUM 100% LIVE
Lachlan Fold Belt Godolphin Resources Spin-Out
Godolphin Fault Gold-Base Metals
Lachlan Transverse Copper-Gold
EL 5583
LEWIS PONDS 100% LIVE 4
EL 8554
WISEMAN’S CREEK 100% LIVE
EL 8323
OPHIR 100% LIVE
EL 8556
COPPER HILL EAST 100% LIVE
Calarie Gold
EL 8890
CUMNOCK 100% LIVE
EL 8555
CALARIE 100% LIVE
ELA 5794 MOUNT BULGA 100% PENDING
EL 8580
CALARIE CENTRAL 100% LIVE
ELA 5812 CALEDONIAN 100% PENDING
ML 0739
LACHLAN MINE 100% LIVE
Mount Aubrey Gold
Gundagai Gold
EL 8532
MOUNT AUBREY 100% LIVE
EL 8061
GUNDAGAI SOUTH 100% LIVE
Yeoval Copper-Gold
EL 8889
GUNDAGAI CENTRAL 100% LIVE
EL 8586
GUNDAGAI NORTH 100% LIVE
EL 8538
YEOVAL 100% LIVE
ELA 5780 YALLUNDRY/OBLEY 100% PENDING
Notes:
1.
2.
3.
4.
5.
6.
Britannia Gold Ltd retained precious metal rights.
Impress Ventures Ltd has a 10% equity free-carried interest to a decision
to mine.
Placer Dome Australia Limited assignee (Norton Goldfields) and
Kundana Gold Pty Ltd retain certain gold claw-back rights and royalty
payable.
Finder’s fee with TriAusMin to David Timms on EL5583 sale transaction
or production commencement ($2M cap).
Eastern Goldfields (now re-named Ora Banda Mining Ltd) owns gold-
silver rights, Ardea owns all non-Au-Ag, in particular Ni-Co-PGM.
Ausjade right to tenement ownership and semi-precious minerals
(currently in default), Ardea owns all non- semi-precious mineral rights,
in particular Ni-Co-PGM-Au.
8.
7.
Ausjade right to semi-precious minerals (currently in default), Ardea owns
all non- semi-precious mineral rights, in particular Ni-Co-PGM-Au, Ardea
registered holder.
Pioneer-Northern Star owns gold-nickel sulphide rights and responsible
for tenement management, Ardea owns 100% Ni-Co laterite rights.
Intermin subsidiary Metaliko owns gold rights and responsible for
tenement management, Ardea owns 100% Ni-Co laterite rights.
10. Ramelius assignee owns all mineral rights, Ardea pre-emptive right to
9.
Ni-Co laterite.
11. Pioneer and assignee owns all non Ni-Co laterite mineral rights, Ardea
owns Ni-Co laterite.
62
Ardea Resources Limited & controlled entities - Annual Report 2019
Glossary
ASIC means Australian Securities and Investments Commission
ASX means ASX Limited (ABN 98 008 624 691) or the Australian Securities Exchange, as appropriate
Australian Registry means Security Transfer Registrars Pty Ltd of 770 Canning Highway, Applecross WA
Ardea or ARL means Ardea Resources Limited (ABN: 30 614 289 342) ARL : ASX is the Ardea code on ASX
Ag means Silver
Au means Gold
Anomaly means a value higher or lower than expected, which outlines a zone of potential exploration interest but not necessarily of commercial
significance
Archaean means a period of geological time spanning 3.8 to 2.5 billion years before present
Co means Cobalt
Cu means Copper
Feasibility Study means a study with three progressively more detailed stages:
Scoping Study means a first pass estimate of engineering requirements and costs of a mining operation, processing plant and plant infrastructure.
Included in the cost estimates will be infrastructure, tailings disposal, power supply, and owner's costs. The plant design may change as a result
of test-work analysis, optimisation studies and engineering improvements performed during execution of the follow-up Pre-feasibility Study.
Operating and capital cost estimates are to an order of magnitude accuracy of ± 30%.
Pre-feasibility Study (PFS) means an engineering and cost study of a mining operation, processing plant and plant infrastructure. Included in the
cost estimates will be infrastructure, tailings disposal, power supply, and owner's costs. The plant design may change as a result of test-work
analysis, optimisation studies and engineering improvements performed during execution of the Pre-feasibility Study. Operating and capital cost
estimates are to an accuracy of ± 25%.
Definitive Feasibility Study (DFS) means a feasibility study undertaken to a high degree of accuracy which may be used as a basis for raising
finance for the construction of a project. Typically operating and capital cost estimates are to an accuracy of +/- 15-20%. A DFS is the standard
of report required by primary debt funders to demonstrate the technical and commercial viability of a project.
GNCP means Goongarrie Nickel Cobalt Project, part of the KNP
Godolphin or GRL means Godolphin Resources Limited (ACN: 633 779 950) a wholly-owned subsidiary of Ardea
KNP means Kalgoorlie Nickel Project, a nickel laterite project located through an arc 30 to 150km north-north west to east of Kalgoorlie
m means metre and km means kilometres
Mt means Million tonnes
Mineralisation means in economic geology, the introduction of valuable elements into a rock body
Ni means Nickel
Nickel Laterite means Nickel occurring as an oxidised hydrated iron oxide, ferruginous clay, smectite clay, chlorite and serpentine assemblage overlying
weathered ultramafic rock
Nickel Sulphide means nickel and copper occurring as an un-oxidised sulphide assemblage associated with fresh ultramafic rock
Project means a grouping of prospects within a specific geographic location, often with a common geological setting
Prospect means a target upon which exploration programs are planned or have commenced
Province means a grouping of projects within a geological district defined by a major mineralised crustal structure
RAB means Rotary Air Blast drilling technique in which a sample is returned to surface outside the rod string by compressed air. Sample quality is
poor.
RC means Reverse Circulation drilling method employing a rotating or hammering action on a drill bit which returns a sample to the surface inside the
rod string by compressed air. Sample quality is very good, particularly if the drill hole is dry.
REE means Rare Earth Elements, notably Neodymium (Nd), Praeseodymium (Pr) and Cerium (Ce).
Sc means Scandium
V means Vanadium
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Glossary continued
Reserves or Ore Reserves or Mineral Reserves as defined by JORC Code.
Proven or Proved Ore Reserve means the economically mineable part of a Measured Mineral Resource. It includes diluting materials and
allowances for losses which may occur when the material is mined. Appropriate assessments, which may include Feasibility Studies, have been
carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental,
social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. The term
"economic" implies that extraction of the Ore Reserve has been established or analytically demonstrated to be viable and justifiable under
reasonable investment assumptions.
Probable Ore Reserve is the economically mineable part of an Indicated Mineral Resource.
Resource or Mineral Resource means a Mineral Resource as defined by JORC Code and is a concentration or occurrence of material of intrinsic
economic interest in or on the earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction.
Mineral Resources are further sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
Measured Resource means a ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities,
shape and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine
planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling
and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to
confirm geological and grade (or quality) continuity between points of observation where data and samples are gathered. A Measured Mineral
Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be
converted to a Proved Ore Reserve or under certain circumstances to a Probable Ore Reserve.
Indicated Resource means an ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities,
shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to
support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and
reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and
drill holes, and is sufficient to assume geological and grade (or quality) continuity between points of observation where data and samples are
gathered. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be
converted to a Probable Ore Reserve.
Inferred Resource means an ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are estimated
on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality)
continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral
Resource and must not be converted to an Ore Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be
upgraded to Indicated Mineral Resources with continue exploration.
JORC (2012 edition) means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and is a professional
code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and Ore Reserves. The
JORC Code provides a mandatory system for the classification of minerals Exploration Results, Mineral Resources and Ore Reserves according
to the levels of confidence in geological knowledge and technical and economic considerations in Public Reports.
Photographs opposite, clockwise from top -
- Facing east from Goongarrie Hill to Lake Goongarrie, Ardea has evaluated using the hill for an opencut nickel mine and a wind turbine location,
and using pumped hydro from the lake surface as a GNCP renewable energy option - Ardea’s “Snowy 2.0” equivalent.
- Gossan at Copper Hill East, exactly what you want when you are exploring for the next Boda in the Lachlan Fold Belt.
- Ardea aircore reconnaissance drilling doing sterilisation drilling for the GNCP infrastructure.
- Will Stewart, Wayne Bramwell, Katina Law and Ian Buchhorn at the Ethel Lupton mining lease. Ethel was Katina’s grandmother.
Ethel’s honeymoon was spent on a camel expedition in the desert out east on the wrong side of Warburton.
- A photo shoot of two debonnaire male models wearing the latest fashionable country style shirts? Not correct, its Orange exploration manager,
Johan Lambrechts and Ardea’s CEO, Andrew Penkethman at Ardea’s Copper Hill East prospect, hopefully standing on the next Boda discovery.
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Ardea Resources Limited & controlled entities - Annual Report 2019
Ardea - Developing, Exploring, Divesting
Ardea Resources Limited & controlled entities - Annual Report 2019
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