Globally significant nickel-cobalt resources
and outstanding nickel sulphide and gold
exploration in Western Australia
Corporate Directory
Directors
Mathew Longworth, (Non-Executive Chair)
Andrew Penkethman, (Managing Director
and Chief Executive Officer)
Ian Buchhorn, (Executive Director)
Auditor
Butler Settineri (Audit) Pty Ltd
Unit 16, Level 1
100 Railway Road
Subiaco WA 6008 Australia
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
Share Registry
Automic Group
GPO Box 5193
Sydney NSW 2001
Tel:
Tel:
Web: www.automicgroup.com.au
1300 288 664 (within Australia)
+61 2 9698 5414 (international)
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...................................18
Consolidated Statement of
Comprehensive Income ....................29
Consolidated Statement of
Financial Position .............................30
Consolidated Statement of
Changes in Equity ............................31
Consolidated Statement of
Cashflows ........................................32
Notes to the Financial Statements ......33
Directors’ Declaration ..........................47
Independent Auditor’s Report...............48
Shareholder Information .......................52
Tenement Schedule..............................54
Glossary ...............................................57
Photo above: Part of Ardea’s well equipped exploration base at Kalgoorlie, WA
Cover - The faceted multi-coloured jewels represent the rich heart of WA and its diverse character in terms of landscape, minerals, and where Ardea
projects are focused. Goongarrie Nickel Cobalt Project pilot plant nickel sulphate crystals - Ardea to produce nickel and cobalt for the growing
Electric Vehicle and Static Storage Battery markets.
ABN: 30 614 289 342
Chairman’s Letter to Shareholders 2020
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 continued support, particularly during the second half of the financial year with the onset of the
COVID-19 pandemic. Ardea responded quickly to this challenge and implemented policies and procedures to protect our
staff, service providers and the communities within which we operate.
Despite this challenge, the Ardea Team have continued to make strong progress in unlocking the full potential of our high-
quality Western Australian project portfolio. Ongoing priority workstreams include:
1.
2.
Nickel-cobalt flow-sheet optimisation leading to development of the Goongarrie Nickel Cobalt Project (GNCP),
which is part of our globally significant Kalgoorlie Nickel Project (KNP), located within the Eastern Goldfields world-
class gold-nickel province;
Nickel sulphide exploration within KNP tenements, with a current focus on following up high grade historic drilling
results and off hole conductors, at Emu Lake – historic drill intercepts up to 2m at 6.2% Ni, 1.8% Cu and 2.2g/t PGEs;
3. Gold exploration within KNP tenements, where the basement rocks prospective for hosting gold mineralisation are
concealed by the nickel laterite cover and/or transported alluvial and lake cover – proof of concept with intercepts in
very limited initial drilling of up to 8m at 4.9g/t Au in the Aphrodite North area and 8m at 6.6g/t Au at Lady Charlotte
in the Grafter area, both being previously undrilled green-fields targets; and
4.
As part of the gold strategy, firming up a potential 2021 Kalgoorlie-focused gold spin-out with in specie share
distribution at nil cost to Ardea Shareholders.
Ardea is in a unique position to have a large strategic land holding with potential to supply sustainable ethically sourced
Critical Minerals to help meet the needs of a modern low-carbon society. Project Enhancements are continuing on our
flagship GNCP, with a focus on completing the Goongarrie Line and Highway resource updates, targeting >1% nickel leach
feed grade and plant optimisation predicated on mineralised neutraliser. The resource updates will also include a maiden
scandium component which will further demonstrate the projects’ strategic value.
Over 100 gold targets have been defined within Ardea’s Eastern Goldfields tenure with this project pipeline ranked and
being systematically explored. Early success at gold projects such as Big Four, Aphrodite North and Grafter provide proof
of concept of an emerging gold camp buried by transported cover, only 70km north of the mining hub City of Kalgoorlie-
Boulder.
Ardea have been working with specialist nickel sulphide consultancy Newexco throughout 2020 and have defined multiple
nickel sulphide targets at Emu Lake, within the Kalpini project tenements. Ground and down hole Electro Magnetic (EM)
surveys are being planned, with compelling targets to be drill tested. Two off hole conductors have already been defined
and could represent high grade nickel sulphide pods, using a Silver Swan exploration model.
The spin out of Ardea’s Lachlan Fold Belt tenements in New South Wales was successfully completed with the Godolphin
IPO offers raising $7.5 million. After meeting all conditions, Godolphin was admitted to the ASX on 16 December and
commenced trading on 18 December 2019. The in specie distribution resulted in 30 million Godolphin shares being
distributed at nil cost to eligible Ardea Shareholders.
The 2021 financial year has commenced at pace with several emerging gold discoveries on the Bardoc Tectonic Zone (BTZ)
within Ardea’s GNCP tenure. Ongoing drilling will define the potential of these targets, with any discovery success having
the potential to be fast tracked towards production as most targets are located on granted mining leases.
I am looking forward to the year ahead and applying my extensive nickel laterite feasibility study, gold
discovery and mine development experience within the KNP tenements to build upon the excellent work
already completed by the Ardea Team. The significant progress made by Ardea in 2020 would not be
possible without the ongoing support of the communities in which we operate and Ardea’s employees,
directors and consultants. I would like to thank you all for your support and professional work culture.
Yours sincerely
Mat Longworth, Chairman
Ardea Resources Limited & controlled entities - Annual Report 2020
1
Ardea Resources Limited
Activities Report
Corporate Objectives
Ardea is an exploration and development Company with a strategic portfolio of 100%-
controlled projects located within the Eastern Goldfields world-class nickel gold province in
Western Australia. The Company believes that Western Australia is the world’s premium
operating jurisdiction with certainty of title demonstrated through 130 years of sustained
mineral production and the development of transparent and ethical safety, environmental
and operating procedures. Western Australia currently continues to operate internally with
minimal economic restrictions due to border closures and exclusion of COVID.
The Company is focused on:
1.
2.
Development of the Goongarrie Nickel Cobalt Project (GNCP), which is part of the
Kalgoorlie Nickel Project (KNP), a globally significant series of nickel-cobalt-
scandium deposits which host the largest nickel-cobalt resource in the developed
world;
Nickel sulphide exploration within KNP tenements aimed at making significant
discoveries. Both disseminated and massive nickel sulphide targets have been
defined, with any future production entirely complementary to the nickel laterite
strategy;
3. Gold exploration and resource definition work; focusing on targets proximal to the
KNP nickel deposits on the basis of potential infrastructure synergy with the nickel-
cobalt developments; and
4. Gold corporate activity, including farm-outs and new tenement applications
complementing existing nickel-gold projects leading to a potential Kalgoorlie-focused
gold spin-out.
The KNP is comprised of a series of major undeveloped nickel-cobalt laterite deposits, which
total 773Mt at 0.70% nickel and 0.05% cobalt and are located within 150km of the regional
mining hub of the City of Kalgoorlie-Boulder, Western Australia. With total contained metal
tonnages of over 5.4Mt nickel and over 400,000t of cobalt, the KNP is a globally significant
resource and the largest highest nickel grade deposit of its kind in Australia.
Ardea’s nickel-cobalt resources are located on granted mining leases, with a Native Title
agreement in place, which will help expedite future project development.
Photos top: Ardea’s KNP projects
are highly prospective for gold
Photo opposite: Exploration drilling at
Lady Charlotte prospect within
the Grafter area
Nickel demand is expected to grow strongly in the decade ahead from traditional uses such as stainless steel and more
significantly the rapidly emerging technologies such as Lithium Ion Batteries (LIB). The majority of auto manufacturers
continue to commit to nickel-manganese-cobalt (NMC) 811 batteries for their planned Electric Vehicle expansion, which
uses more nickel than earlier technology batteries. This adoption of NMC 811 battery technology is expected to place even
greater demand on nickel.
Ardea is seeking to become a significant player in the LIB supply chain by producing high purity, sustainable, ethically
sourced nickel and cobalt from the KNP. Optionality to consider production of other Critical Minerals also exists with
scandium, Rare Earth Elements (REE), High Purity Alumina, vanadium and manganese also present and extractible within
the KNP mineralisation, as confirmed by Ardea’s standard 65 element drill assay suite.
In addition to advancing Ardea’s strategic KNP nickel-cobalt resources, the Company continues to evaluate its Eastern
Goldfields tenement holding and define compelling nickel sulphide and gold exploration targets. These targets are ranked
and worked up to the drilling stage, with exploration a critical budget allocation, as any new discovery success is expected
to generate significant additional Shareholder value.
Ardea’s KNP is unique among the world’s lateritic nickel-cobalt deposits in that it has developed upon ultramafic rocks that
are within and are a part of major, crustal-scale gold-mineralised structures, notably the Bardoc Tectonic Zone (BTZ).
Within Ardea’s KNP tenements the primary focus by past explorers has been on nickel-cobalt laterite exploration, with
minimal gold or nickel sulphide exploration completed within the last 20 years. Over this period there have been significant
advances in the geological understanding of the Eastern Goldfields and exploration technologies.
Resource breakdown, last disclosed in Ardea 2019 Annual Report, ASX Release 24 October 2019.. Per Goongarrie Expansion Study ASX release, 24 July 2018. All the material assumptions
underpinning the forecast financial information derived from a production target, in the initial public report referred to in rule 5.17 continue to apply and have not materially changed.
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Ardea Resources Limited & controlled entities - Annual Report 2020
continued
Covered area (Ardea)
Buried gold camp?
30-40km
regularity
Figure 1: Gold endowment along the Bardoc Tectonic Zone and
the contiguous Boulder-Lefroy Fault, after Hodkiewicz et al.
The Ardea Team stay at the forefront of these advances,
utilising the historic KNP data base assays and new
assays from the archived KNP drill sample pulps to
synthesis exploration models which are now making
significant new discoveries.
There are multiple benefits to gold exploration within the
KNP tenements including first and foremost discovery
success, as shown by the emerging Aphrodite North and
Lady Charlotte gold discoveries. But every hole drilled
provides new knowledge, and where gold is not
intersected, these areas are effectively sterilised and can
be considered as infrastructure sites for the development
of future nickel-cobalt operations.
Nickel sulphide exploration opportunities have been
defined at multiple KNP project areas, with a current focus
on following up historic high-grade drilling results and
untested off hole Electro-Magnetic (EM) conductor plates
within Ardea’s Emu Lake Kalpini project.
A balance will continue to be achieved between advancing
Ardea’s strategic KNP nickel-cobalt resources and nickel
sulphide and gold exploration opportunities with the goal
of progressing multiple work streams to allow full value to
be captured from the Company’s quality Western
Australian tenement portfolio.
Ardea Resources Limited & controlled entities - Annual Report 2020
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Activities Report
Goongarrie Nickel Cobalt Project
Overview
The GNCP within the KNP is considered an optimum project development site given the proximity to the mining service
City of Kalgoorlie-Boulder and the benign arid environmental setting, which favour GNCP as a future sustainable and
ethical source of the nickel and cobalt that the Electric Vehicle and Static Storage Battery industries increasingly
favour. Current priority workflows include:
•
•
•
•
•
•
Strategic Partner Process – Exponential growth in the LIB supply chain continues with multiple global organisations
looking to secure future ethical supplies of nickel and cobalt and expand production capacity to meet growing demand.
Ardea remains committed to ensuring nickel and cobalt off-take from the GNCP is linked to a project funding
commitment and that completion of the Definitive Feasibility Study is linked to the specific requirements of the Strategic
Partner/s to ensure that project development scale and end product specifications meet their needs. With Ardea’s
large Western Australian based KNP resource base, the Company is one of a select few on a global scale able to
ensure ethical supply that can be ramped up to >40,000tpa of nickel metal equivalent. Recent Strategic Partner
discussions indicate that several potential partners have a preference for securing a Mixed Sulphide Precipitate (MSP).
Ardea continues to progress discussions with potential project partners, alongside advisors, KPMG.
Resource Update – A resource update is nearing completion for the full 25km of strike covered by the GNCP deposits,
Goongarrie Hill, Goongarrie South, Big Four and Scotia Dam. In addition to nickel-cobalt estimates, this resource will
include a maiden scandium estimate and detailed material type classifications for mine planning. The project has
required re-assay of some 3,000 archived drill sample pulps, a task which has added considerable complexity and
time requirements to the program, but with the models now generated, has been of excellent value.
High Grade Mine Schedule – Goongarrie and Highway will be included in the Life of Mine plan and updated mining
study once the resource updates have been completed, with the aim of maintaining High Pressure Acid Leach (HPAL)
leach feed grades of over 1% nickel for at least the first 15 years of operation. Open pit optimisations and detailed
mine scheduling is including a tailings pit back-fill schedule, waste landform locations and pit de-watering, utilising the
updated GNCP wireframes and block models.
Mineralised Neutraliser – High-nickel magnesium serpentine units with associated carbonate saprock have been
identified in Research and Development (R&D) programs that can be used as a local source of in-pit neutraliser, which
will minimise waste rock generation and reduce the need for transporting consumables such as lime to site.
Flow Sheet – Mass balance reviews continue and are expected to further enhance the GNCP economics. These
options include:
o
o
o
o
o
Replacement of leach residue filters with a conventional Counter Current Decantation circuit;
Co-disposal of spent tailings with mine waste;
Replacement of raw water thermal crystallisation with Reverse Osmosis;
Replacement of chemical water softening with nanofiltration; and
Modelling alternative in-pit neutralising agents (with nickel credits).
Environment and Approvals – The GNCP is being designed to minimise its environmental footprint in line with Ardea’s
commitment to best practice Environmental, Social and Governance principles. Key planned development attributes
to minimise the project footprint include:
o
The strip ratio is low at approximately 2:1, minimising project waste rock generation;
o Waste is either used for construction of integrated waste landforms, progressive back-fill of exhausted pits or
rehabilitating completed mine areas, always finishing with re-afforestation;
o
o
o
o
Slurry tailings are planned to be deposited in exhausted pits, eliminating the need for above-ground valley-fill
Tailings Storage Facilities;
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 including
agroforestry; and
There are no indications of Acid Mine Drainage risk.
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Ardea Resources Limited & controlled entities - Annual Report 2020
continued
The Goldfields Highway and Kalgoorlie-Leonora rail line and
optic fibre line cross GNCP tenure south of Goongarrie, providing
direct access to ports and markets
•
•
•
Water sources and treatment - Highly encouraging results have recently been received from a second round of
membrane separation test-work completed in the United States. This R&D strongly supports the technical feasibility
of producing a relatively soft permeate with good yields under a high-pressure filtration strategy. The application of
membrane separation is expected to simplify the water treatment section of the flowsheet and result in reduced Capital
and Operating Costs, as opposed to the 2018 PFS flowsheet using a thermal desalination base-case.
Tenement Consolidation – KNP and in particular GNCP tenure continues to be consolidated and adjoining
infrastructure sites secured. During the last 12 months, opportunistic tenement acquisitions that contain nickel sulphide
and gold targets on regional gold Tectonic Zones have been secured.
Stakeholder Engagement – Strong support continues to be received from the Communities and Local Government
in the jurisdictions within which Ardea operates.
Ardea Resources Limited & controlled entities - Annual Report 2020
5
Activities Report
Feasibility Programs
Ardea’s “WINNER” (Water, In-pit Neutraliser and Nickel Enhanced
Reserve study) workstreams continue with a key focus on leveraging off
Ardea’s extensive reserve and resource base additional to its flag-ship
GNCP. Other projects within short haulage distance of the planned GNCP
HPAL process plant, initially the Highway and Siberia North deposits, are
being appraised for selective high-grade (>1% nickel) plant feed.
The aim is to optimise plant feed grades for an initial 2Mtpa HPAL train
exceeding 1% nickel for at least 15 years. Options to develop a second
2Mtpa HPAL train will also be considered. Ardea is in a unique position of
having this resource optionality due to the very large size of the nickel
and cobalt resources, facilitating high grading and selective recovery of
key geo-metallurgical mineralisation types.
Work during the year was focused 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 and maintaining a sustainable site.
Processing Research and Development
The Research and Development (R&D) focus continues on the Critical
Minerals essential for the new age technologies used in limiting carbon
emissions, such as the Electric Vehicle (EV), Static Storage Battery (SSB)
and wind-turbine sectors.
Highly-sought Critical Minerals potentially occurring within the KNP
lateritic enrichment profile include:
•
•
•
•
•
•
Nickel, manganese and cobalt (NMC) being overwhelmingly the
most common constituents of LIB cathodes;
EV electric motor REE magnet metals notably neodymium and
praseodymium. The KNP has common cerium, and potential for
dysprosium, lanthanum and terbium.
Ardea’s Andrew Penkethman (Managing Director & CEO)
with Matt Painter (General Manager - Exploration)
undertaking project appraisal within the KNP
Scandium for scandium-aluminium lightweight, high-strength EV chassis;
High Purity Alumina (HPA) for sapphire glass in EVs and mobile devices such as phones and computers;
Vanadium for SSBs;
Other Critical Minerals targets identified within the KNP assay data base include:
o
o
Barium, chromium, gallium, indium, molybdenum, tellurium, titanium, tungsten, yttrium, zirconium; and
Extra Platinum Group Metals - ruthenium, rhodium, osmium (due to excessive assay cost, using platinum-
palladium as a pathfinder in pulp re-assay).
Critical Minerals
Ardea continues to engage with the Commonwealth Critical Minerals Facilitation Office. Research continued on the Ardea
drill hole data base, defining multiple Critical Minerals and REE settings. The REE enrichment mirrors nickel-cobalt
enrichment at the Magnesia Discontinuity within the regolith profile. The R&D programs have focused on REE recovery
(notably cerium, neodymium and praseodymium) in parallel circuit with scandium (using Ion Exchange).
Ardea have archived over 20 years of drill assay pulp samples at their West Kalgoorlie Operations Office. These drill assay
pulps are being systematically re-assayed throughout the KNP starting with an approximate 80x80m collar spacing at
Highway and then 160x80m spacing at Goongarrie Hill, Siberia North, Bulong and Kalpini. Results continue to be reviewed
and interpreted and incorporated in the resource update. This same approach is being systematically applied to all KNP
resource areas.
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Ardea Resources Limited & controlled entities - Annual Report 2020
Figure 2: Ardea’s strategic project portfolio within the Eastern Goldfields of Western Australia
Ardea Resources Limited & controlled entities - Annual Report 2020
7
Activities Report
WA Nickel Sulphide and Gold projects
Ardea has a significant number of additional projects outside of the flagship GNCP. Most of these projects host nickel-
cobalt laterite resources of the KNP (that could supplement future GNCP production), but also host significant “green-fields”
nickel sulphide and/or gold mineralisation (see Figure 2).
The Ardea Western Australian mineral tenure covers over 4,000km2 and represents a strategic land holding in one of
Australia’s premier nickel sulphide and gold provinces.
In light of the record high Australian dollar gold price, Ardea will continue to systematically appraise, assess, and explore its
tenements for gold mineralisation and consider strategic opportunities which complement existing projects.
The following summary updates Ardea’s priority exploration projects and recent progress.
Ardea gold strategy
The nickel laterites of Western Australia’s Eastern Goldfields province are typically localised around crustal-scale Tectonic
Zones (TZ), which control geological events from initial olivine komatiite rift volcanism, epiclastic sedimentation, Layered
Mafic Complex emplacement, late stage diorite intrusion and finally through to the late stage crustal convective cells
responsible for orogenic gold deposition.
The TZs are exceptional greenfields gold targets. The Bardoc Tectonic Zone (BTZ) is the northern strike continuation of the
Boulder Lefroy TZ, which hosts major gold camps at Kalgoorlie-Boulder (>80Moz gold), New Celebration (3.2Moz) and
St Ives (6.5Moz).
Despite the obvious gold pedigree of Ardea’s tenure, during the last 23 years it has been solely developed as a nickel-
cobalt laterite project, with ownership and control successively by Heron Resources and then Vale Inco (PFS 2009). There
has been no systematic and modern gold exploration.
With Ardea’s acquisition of the project in 2017, for the first time in two decades, systematic gold evaluation commenced,
through Ardea’s gold and multi-element pathfinder assay suite and detailed geophysical data interpretation to help “see”
through the cover blanket laterite and ancient lake sediments.
In terms of developing a gold exploration model, Ardea’s approach has highlighted the presence of intense deformation,
iron-rich dolerite and late stage diorite intrusives within the GNCP, all the key elements for significant gold mineralisation
within Kalgoorlie-Boulder’s Eastern Goldfields gold province.
Ardea will continue to advance its gold strategy and has already defined well in excess of 100 targets, which have been
ranked and are being systematically explored. The immediate priority is on the top ranked gold targets at the GNCP, where
all drilling information helps provide critical information to assist with siting future GNCP infrastructure.
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 gold mining centres, from south to north, at Paddington, Goongarrie, Comet Vale and Menzies (see Figure 1).
Ardea has granted tenure with known gold endowment from south to north at Windanya, GNCP, Highway, Moriaty and
Ghost Rocks, holding a cumulative 65km of the regionally significant BTZ (see Figure 1). The majority of the BTZ on these
project areas is obscured by shallow cover and the development of the laterite profile. For this reason, historic gold
exploration is limited. However, Ardea’s gold target generation and exploration work continues to confirm the gold
prospectivity with a maiden resource defined at Big Four Gold and emerging discoveries on the Aphrodite North trend and
at Lady Charlotte within the Grafter project area. Further work is underway to unlock the gold potential of Ardea’s under-
explored projects, including a research project with Australia’s national science agency, the Commonwealth Scientific and
Industrial Research Organisation (CSIRO). The CSIRO’s Regolith Geosciences team is studying the behaviour of gold
within and adjacent to the Critical Mineral occurrences of the Goongarrie Nickel Cobalt Project.
Big Four gold prospect
The Big Four gold prospect is located 70km north northwest of the City of Kalgoorlie Boulder, within the footprint of
the GNCP. Infill and extensional drilling completed by Ardea in January 2020 and historic data collated by the Company
has enabled estimation of an Inferred Mineral Resource being 178kt at 2.7g/t gold for 15,300oz gold (0.5g/t Au cut off).
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Ardea Resources Limited & controlled entities - Annual Report 2020
This result provides proof of concept of the gold
mineralisation potential of the BTZ within Ardea’s
GNCP, which elsewhere
is concealed by
Quaternary sediments and the overprinting nickel
laterite profile.
Metallurgical composites have been prepared from
the RC drill samples and are currently undergoing
metallurgical testwork, confirming gravity and
cyanide leach recoverable gold (no refractory gold
identified). Once completed, the total gold
recoveries will be available to advance discussions
on monetising the Big Four Gold deposit.
Grafter gold prospect
The Grafter gold prospect is an underexplored
area, covering 3.7 x 1.5km in the south-eastern
GNCP (Figure 3), located approximately 65km
north northwest of the City of Kalgoorlie Boulder.
Around 80% of the area is covered by transported
and laterite cover and has been interpreted from a
combination of field work and desk top studies as
a deformed mafic hangingwall sequence highly
prone to gold mineralisation. As the area was
previously held by prospectors, there has been no
modern systematic exploration. The Ardea
exploration team have identified similar structural
relationships to BTZ-BLF “structure kinks” as
documented at the Paddington, Kalgoorlie and
New Celebration gold camps.
A modest “toe in the water” first-pass RC
exploration program has commenced at Grafter to
test three different types of target (A / Lady
Charlotte, B and C – Figure 3), with the knowledge
gained to be used to continue to refine the
exploration targeting approach on concealed BTZ
gold targets. Two RC holes were completed at
Lady Charlotte in July 2020. The initial RC result
from ABFR0286, 8m at 6.57g/t Au from 24m, is
an excellent start to the first round of gold
exploration drilling at Grafter. This intercept is
interpreted to represent high grade supergene
mineralisation, with the primary lode position and
orientation to be defined by follow-up RC drilling.
The prospect is located immediately south of an
extensive plain of transported cover. The initial
Grafter drilling was selected at Lady Charlotte on
the expectation of shallower transported cover,
thus allowing a more cost-effective window in on
the sub-surface geology. On the regional scale, it
is very interesting that on drill-testing, the first
exposures for several kilometres are mineralised.
Follow-up exploration drilling
to
recommence in late September 2020.
is planned
continued
A
B
C
Figure 3: GNCP location plan, showing Ardea tenements in red and
highlighting the location of the Grafter (red dashed box) and Aphrodite North
(red dashed box) prospects. The location of the three initial target areas,
A (Lady Charlotte), B and C, to be explored at Grafter are shown along with
the main interpreted gold trends (dashed grey lines) and prospects (yellow
crosses). Projection GDA94 MGA94 Zone 51.
Ardea Resources Limited & controlled entities - Annual Report 2020
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Activities Report
Aphrodite North gold prospect
The Aphrodite North area is located approximately 80km north of the City of Kalgoorlie-Boulder (Figure 3). Aphrodite North
is entirely covered by 30-40m of transported material and thus exhibits no surface gold anomalism. The target structure
extends in a north-northwest orientation throughout Ardea’s Mining Lease, M29/426 and is located 3km east of the nearest
of the nickel-cobalt deposits that constitute the GNCP.
The Aphrodite North target was identified on a structural feature within the BTZ hosting significant gold deposits outside of
Ardea’s tenure. The structural line connects the 1.7Moz Aphrodite gold deposit (BDC ASX release 25 June 2020) to the
south, with the Goongarrie Lady and Jenny’s Reward open pits at the historic Goongarrie gold mining centre to the north.
It demarcates the contact zone between the Victorious Basalt and the overlying Black Flag Formation volcaniclastic
sediments, and is a common regional host to gold mineralisation. On Ardea’s ground, this trend is entirely covered by
transported sands and lake clays located on flat scrubby plains south of Lake Goongarrie.
First-pass regional aircore drilling completed in May 2020 defined anomalous gold mineralisation over a 2.4km northwest
trend. Gold anomalism and interpreted structural complexity was strongest on section 6666440mN with this section the
priority for follow-up RC drilling completed in July 2020.
The results from RC holes AANR0001 and 2 on section 6666440mN, include:
•
•
AANR0001: 6m at 3.60g/t Au from 44m from the West 2 Lode
including 2m at 9.99g/t Au from 44m
and
8m at 4.94g/t Au from 172m to 180m End of Hole (EOH) in Main Lode
including 4m at 9.42g/t Au from 172m
AANR0002: 10m at 1.52g/t Au from 76m from the East 2 Lode
and
2m at 0.63g/t Au from 226m to 228m EOH from Main Lode
RC drilling and drill chip logging at Aphrodite North July 2020. The working section used in the field showing
the target dolerite host rock, multiple zones of quartz veining, foliation intensity and potassic alteration -
sericite, biotite, quartz, carbonate and pyrite increasing with depth.
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Ardea Resources Limited & controlled entities - Annual Report 2020
continued
These results confirmed a typical Eastern Goldfields dolerite-hosted orogenic gold system with multiple lodes defined over
a 170m horizontal width at the contact of a western dolerite with eastern andesitic volcaniclastics and shale. Based on a
nominal 0.5g/t Au cut-off within a 0.1g/t Au lode envelope, visual quartz-pyrite-calcite veining and sericite-chlorite-biotite
alteration (with multi-element confirmation), six preliminary lode structures have been defined. Each of these lodes will
require follow-up drilling.
The return of such encouraging grades in an initial RC drill program, being significantly higher in bedrock than the earlier
aircore program in weathered saprolite, is highly encouraging. Unfortunately, drill conditions required AANR0001 to be
stopped at 180m within a zone of strong potassic alteration and well short of the planned depth of 250m. Accordingly, the
Main Lode remains open. Scissor hole AANR0002 was designed to test the Main Lode at approximately the same
piercement point, but also had to be stopped before the 250m target depth, at 228m.
AANR0002 had just entered the Main Lode East, returning 2m at 0.63g/t Au after drilling some 30m of strong carbonate
veining that characterises the approach of lode contacts.
Drillholes to the north and south also intersected hypogene gold mineralisation. Despite grades not being as high as those
intersected in AANR0001 and AANR0002, it is important to note that strong veining and alteration are associated with the
more moderate gold grades. Whether some of these lodes are outside the controlling mineralised plunge cannot yet be
assessed, so it is important that these lower grade zones are followed up to fully define the extent of gold mineralisation
throughout the Aphrodite North area.
Follow-up RC drilling to infill the Main Lode gap between holes AANR0001 and 2 is a high priority, along with defining gold
mineralisation extents along strike. RC drilling commenced on 8 September 2020 with results for this emerging gold
discovery keenly awaited.
RC drill chips at Aphrodite North and close up of alteration.
Ardea Resources Limited & controlled entities - Annual Report 2020
11
Activities Report
Highway - Moriaty gold and nickel sulphide prospects
The Moriaty tenements, at the eastern boundary of the Highway nickel laterite project are located immediately north of the
GNCP tenements (Figure 1, 2 and 8) within the BTZ. Detailed compilation of over 50 years of historic exploration was
completed during the year, including assessment of old reports, plans and drill logs, the open file drill hole database, nickel
sulphide petrology and legacy EM survey information. All existing data has been compiled into a GIS digital platform with
detailed geological interpretation underway. Nickel sulphide and gold exploration targets have been defined and added to
and ranked against targets already defined at other Ardea projects. Follow-up exploration programs are planned for priority
targets once the current GNCP gold programs are completed.
Windanya gold prospect
Windanya is hosted within the BTZ, 50km north of Kalgoorlie and 20km south of the GNCP Scotia Dam nickel-cobalt deposit.
It is a major historical gold mining centre that was operational in the 1900s (see Figure 2). Significant historic gold workings
are evident on the tenement and extend as a corridor to other workings to the north and south of Ardea’s tenure.
Sourcing of historic information and data interpretation has been completed, with a focus on the Half Mile Reef gold mine
located near the centre of Ardea’s Windanya ground holding. Half Mile Reef was a major underground gold mine at its peak
in the early 1900s, and was the location of the regional State gold production battery. Historic records sourced for the Half
Mile Reef indicate that between 1897 and 1906, 23,480 tonnes of ore were mined from an underground operation, producing
12,993 ounces of gold. This indicates a recovered gold grade of 17.2 g/t, with the head grade likely to be considerably
higher.
Ardea is the first Company to source all historical data, including old mine plans (Figure 4) and to create digital files so that
this information can be assessed in 3D. These files confirm that a 183m (600 foot) deep shaft was developed, with stoping
to a depth of at least 170m. Level development and discontinuous stoping was completed over a horizontal distance of at
least 213m (700 foot). This information has been modelled in 3D to help refine the controls on high grade gold mineralisation
historically mined and has been projected down plunge as a check on the effectiveness of historical drilling. The majority of
historic drilling around the old mine workings was either too shallow or missed the plunge projection of the main mineralised
structure. Ardea is the first Company to compile and assess all legacy data in such detail to provide confidence for drill-hole
siting in future exploration. A number of targets have been defined and initial exploration drilling around the Half Mile workings
is expected to commence in October 2020.
Figure 4: Half Mile Reef Historical Long
Section looking Southwest.
12
Ardea Resources Limited & controlled entities - Annual Report 2020
continued
Bulong and Taurus gold prospect
Ardea’s Bulong tenements are located approximately
30km east of the City of Kalgoorlie Boulder. The
regionally significant crustal scale gold-controlling
structure, the Goddard Fault, trends north-south and
passes through Ardea’s Bulong tenure (Figure 5). This
structure represents a northern splay of the regionally
significant Mount Monger Fault, which hosts gold
mineralisation to the south, with the best-known
operating mine in the area at Daisy Milano.
Historically, the focus on the Bulong tenements has
been on high grade laterite hosted nickel-cobalt
mineralisation (54.1Mt at 0.88% Ni and 0.05% Co, for
contained metal of 476.1kt nickel and 28.8kt cobalt) as
part of the KNP resource base, with minimal historical
gold exploration.
Ardea commenced systematic gold exploration with a
detailed mapping and sampling program around the
historic Taurus underlay shaft and multiple workings in
the area. Fifty four rock chip samples were collected
during the mapping program with 22 samples (40%)
1g/t Au or greater and the average grade for all
samples collected in this program was 4.86g/t Au. This
program has
the controls on gold
mineralisation in the project area.
refined
Mapping has identified several other possible Taurus
lode repeats as well as providing orientation and shear
sense indicators. This information will be used to
complement historic drill data, which is presently being
compiled in detail, and other historic datasets. 3D
models will be constructed from these datasets to
enable definition of drill targets.
Ardea works with Kalgoorlie-Boulder prospectors who
have been recovering alluvial, eluvial and primary gold
in the area which is assisting with Ardea target
generation and furthering the understanding of the
controls on Bulong gold mineralisation.
In addition to the significant nickel-cobalt resources
hosted at Bulong, 36 exploration targets have been
defined. These range from gold, PGEs and base
metals (nickel, copper, lead and zinc).
Limited historic nickel-cobalt laterite drill holes have
been located over some of the gold targets and a
search for the historic pulps within Ardea’s West
Kalgoorlie sample archive
facilities has been
completed and samples submitted for multi-element
assay, including gold for the first time. This is a low
impact and much cheaper form of exploration, as it
removes the need to redrill holes.
Figure 5: Bulong Project location plan showing Ardea’s tenements in
red and the regionally significant Goddard Fault.
Ardea Resources Limited & controlled entities - Annual Report 2020
13
Activities Report
Kalpini - Emu Lake nickel sulphide and gold prospect
Emu Lake is part of the Kalpini group of tenements and located 70km north-east of Kalgoorlie (Figure 2 and 8). The Kalpini
group is home to significant lateritic nickel resources of the KNP (75Mt at 0.73% Ni and 0.04% Co, for contained metal of
476.1kt nickel and 28.8kt cobalt). There are multiple historic nickel sulphide drill hole intersections exceeding 1% nickel.
Previous explorers include Jubilee Mines, Emu Nickel, Xstrata and Pioneer Nickel. The komatiite belt is known to be fertile
for nickel sulphide, with previous explorers recording significant drilling results, such as 2m @ 6.2% nickel in historic core
drilling (Heron Resources Limited ASX release 26 November 2013. ELD015, 2m at 6.2% Ni, 1.78% Cu, and 2.17g/t PGEs).
Results of this tenor confirm unequivocal nickel sulphide endowment and prospectivity. A limited RC drilling program by
Ardea in 2019 identified VMS base metal sulphides in the footwall of the nickel sulphide stratigraphy. This is most favourable
in terms of komatiite channel nickel sulphide models.
Ardea is continuing the assessment of the historic data from the region with the assistance of leading nickel sulphide and
EM consultants Newexco. A pipeline of nickel sulphide exploration targets have been defined, with follow-up work currently
under way (Figure 6). The top priority targets are two off-hole EM conductors that could represent high grade, Silver Swan
style nickel sulphide occurrences.
A large number of gazetted gold occurrences are noted to the west of Ardea’s Kalpini project, mainly associated with the
crustal-scale Emu Fault. Additionally, there are historic gold occurrences within Ardea’s tenements, with the area primarily
assessed as a nickel-cobalt laterite project and nickel sulphide exploration opportunity in the past. As a result of this, assaying
historic drill samples for gold has been extremely limited, with Ardea now the first to do so.
Base of oxidation
Emu Lake
DHEM
Plate
Emu Lake
DHEM
Plate
Poseidon Nickel
Silver Swan
nickel sulphide
deposit
superimposed
Potential at
Emu Lake for
short strike
length,
Silver Swan
style
nickel sulphide
to 1500m depth
Ardea
Emu Lake
nickel
sulphide
open to 500m
Figure 6: Ardea’s Emu Lake Binti Gossan Long section
showing historic drilling, off hole conductor EM plates INSET
superimposed Silver Swan underground workings and nickel
sulphide occurrences at the same scale for comparison of the
nickel sulphide exploration model being applied.
14
Ardea Resources Limited & controlled entities - Annual Report 2020
continued
Perrinvale nickel sulphide and
gold prospect
Perrinvale is located approximately 100km
west of Leonora. The Ardea exploration
model 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 within the Cathedrals
Belt, has an east-northeast strike and
extends into Perrinvale (Figure 7). At
Perrinvale,
is
overlain by transported cover, requiring
geophysical methods such as moving loop
Electro Magnetic (MLEM) surveys for
exploration targeting.
this prospective
trend
MLEM surveys have been completed by
Ardea over three separate zones at
Perrinvale with a consultant’s field report
received during
the December 2019
Quarter which recommended follow-up
including shallow aircore
exploration
drilling beneath
to
transported cover
determine basement geology and the
geochemical signature associated with the
EM anomalies defined. Surface EM
surveys were recommended over the
areas not covered by the initial trial survey.
A gold targeting review was completed by
Ardea and reaffirmed that the eastern part
of the tenure overlies poorly exposed
greenstones along the northern extension
of the Zuleika Shear system, which is a
known gold-bearing structure at Kundana,
south of Ardea’s tenure. The fact that there
are no gazetted gold occurrences over the
greenstone belt within Ardea’s tenure is
believed to be a function of the surface
cover hiding the prospective basement
rocks.
Figure 7: Perrinvale Project geology plan, highlighting the Cathedrals Belt (known Ni Cu PGE
bearing structure) and Zuleika Shear (known gold bearing structure eg Kundana) passing
through Ardea’s tenements. Projection GDA94 MGA94 Zone 51.
An internal review of geophysical datasets,
focused
the
predominantly
interpretation of aeromagnetic data, has
defined a number of gold exploration
targets which have been ranked and added to Ardea’s ranking system and represent regional targets that would be best
explored with wide spaced RAB or Aircore drilling through the surface cover for geological logging and geochemical
sampling. This data would then be used to help vector in on any bedrock gold anomalism defined, targeting a greenfields
discovery.
on
Ardea Resources Limited & controlled entities - Annual Report 2020
15
Activities Report
Bardoc Tectonic Zone Nickel Sulphide
nickel
Work is still at an early stage on defining
nickel sulphide potential throughout
Ardea’s ground holding within the BTZ.
Several defined occurrences and
anomalies at Big Four East, Highway
and Moriaty are being used to further
assess the ultramafic sequences of the
GNCP, where
sulphide
mineralisation if present would be
located in fresh rock beneath the
various
lateritic deposits. Using
proprietary Ardea geochemical markers
and vectors,
targets are being
developed for drill testing. Samples are
also being sourced for a planned
chromite study with the CSIRO, which
can help determine nickel sulphide
fertility.
Figure 8: Ardea’s tenure showing
nickel sulphide projects,
ultramafic sequences and
Bardoc Tectonic Zone
With field work managed from
Ardea’s West Kalgoorlie Operations
Office, we are proud to be part
of the Kalgoorlie-Boulder
Community
Photograph by Jedd Penkethman
16
Ardea Resources Limited & controlled entities - Annual Report 2020
ABN 30 614 289 342
Financial Statements
for the year ended 30 June 2020
Ardea Resources Limited & controlled entities - Annual Report 2020
17
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 2020 (“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:
Mathew Longworth – BSc (Hons) MAusIMM
Non-Executive Chair
Appointed 31 July 2020
Matthew Longworth is a geologist with 33 years experience across exploration, project evaluation/development,
operations and corporate management. He previously held roles as Exploration Manager, COO and CEO/Managing
Director with Australian listed companies, and mining analyst with a boutique investment fund. In his senior corporate
roles, Mathew led multidisciplinary project evaluation and development teams. Mr Longworth is a member of the
Australasian Institute of Mining and Metallurgy.
Mr Longworth has excellent experience of the key Ardea exploration and development projects, being the Bardoc Tectonic
Zone (BTZ) gold and Kalgoorlie Nickel Project (KNP) nickel-cobalt. In 1996 Mr Longworth assumed management
responsibility for all of Goldfields and then Aurion Gold exploration in the Eastern Goldfields including the Kundana and
Paddington mine areas and the BTZ. This included being part of the team that made the discovery and initial resource
estimation of the Aphrodite gold deposit in 1997 to 1999 and Raleigh and Paradigm gold deposits in 2000.
After the takeover of Aurion Gold by Placer Dome Mr Longworth joined Heron Resources in 2003 as Exploration Manager
rising to Managing Director in 2007 to 2011. Mr Longworth applied his intimate knowledge of the BTZ and broader Eastern
Goldfields geology to the KNP to collaborate with Vale Inco in their 2005 to 2009 KNP feasibility study.
He is currently a non-executive Chairman of ASX listed Metalicity Limited (1 July 2019 to present), and Chairman of the
unlisted Company Greenfields Exploration Limited. Mr Longworth has no other public company directorships.
Andrew Penkethman – BSc, FAusIMM, MAIG
Managing Director & Chief Executive Officer
Appointed Managing Director 5 February 2020 following his appointment as Chief Executive Officer on 1 April
2019
Andrew Penkethman is a resources sector executive and geologist with over 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 15 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.
He 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 40 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 is a Director of Godolphin Resources Limited
(19 June 2019 to present) and formerly a director of Heron Resources Limited (17 February 1995 to 2 June 2017) and
RBR Group Limited (19 August 2005 to 19 April 2018).
Former Directors
Katina Law – B.Com., CPA, MBA, GAICD - Executive Chair appointed 7 November 2016 and resigned 31 July 2020
Wayne Bramwell – BSc, GradDipBus. MSc, GAICD - Non-Executive Director appointed 29 January 2018 and resigned
15 July 2020
18
Ardea Resources Limited & controlled entities - Annual Report 2020
Directors’ Report continued
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.
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 2020 of
$2,077,527 (2019 - $1,487,734).
Ardea is a mineral exploration and development group, currently focussed on Critical Minerals within its Kalgoorlie Nickel
Project tenements and gold and nickel sulphide exploration in Western Australia.
Ardea’s strategy for ultimate growth is to combine the following elements:
(cid:120) Ongoing commitment to the identification and review of projects/corporate opportunities that have the capacity to
successfully develop into a profitable mine.
(cid:120) 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:
(cid:120) Nickel, gold and other base metals in WA within a quality mineral tenement portfolio covering over 4,000km2
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 which
produces ethically sourced minerals for the growing needs of modern society.
The KNP is comprised of a series of major undeveloped nickel-cobalt laterite deposits, which total 773Mt at 0.70 % nickel
and 0.05% cobalt and are located within 150km of the regional mining city of Kalgoorlie-Boulder, Western Australia. With
total contained nickel metal tonnages of over 5.4Mt and total contained cobalt metal tonnages of over 400kt, 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:
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.
Resource Category
Measured
Indicated
Inferred
KNP Total Resources
Quantity
(Mt)
9.6
232.9
530.5
773.0
Nickel
(%)
1.02
0.75
0.68
0.70
Cobalt
(%)
0.10
0.06
0.05
0.05
Contained
nickel (t)
98,800
1,759,700
3,600,000
5,458,400
Contained
cobalt (t)
9,700
141,200
254,400
405,400
Since listing in February 2017, Ardea immediately commenced fieldwork on our main project at the GNCP. Drilling focused
on expanding higher grade resources and defining mineralisation style and extent at Goongarrie South and Big Four to
recover samples for Pre-Feasibility Study (PFS) and Expansion Study metallurgy and bench- and pilot-scale testing.
Ardea Resources Limited & controlled entities - Annual Report 2020
19
Directors’ Report
Drilling
Ardea have completed 52,474m of drilling since listing in February 2017 targeting laterite hosted nickel-cobalt-scandium
mineralisation at the GNCP. During the 2020 financial year 21 GNCP resource definition drill holes were completed for
1,913 metres. In addition to the resource definition drilling referred to above, a further 31 air core drill holes for 884 metres
were drilled, testing the Papertalk West area for potential fresh water sources. Multi-element geochemical samples were
also taken in this under explored area.
Metallurgy
Significant metallurgical test work has been completed on samples obtained from diamond and sonic core drilling. This
work has included the successful completion of a pilot plant program which produced high specification Mixed Sulphide
Product and nickel and cobalt sulphate. These are the preferred products 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 project scale and
end product specification. Feasibility Study work completed to date supports a robust project development:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Pre-Feasibility Study, lodged 28 March 2018, based on a production rate up to 1.5Mtpa;
Case
1.0Mtpa
1.5Mtpa
Pre-tax NPV8
A$1.43 billion
A$1.93 billion
Post-tax NPV8
A$1.04 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
2.25Mtpa
Pre-tax NPV8
A$3.1 billion
Post-tax NPV8
A$2.3 billion
IRR
27 %
Payback
5.1 years
An Ore Reserve of 40.1Mt at 0.82% Ni and 0.09% Co was announced for Goongarrie in 2018, within a Goongarrie
resource of 215.6Mt at 0.71% Ni and 0.06% Co.
Pilot testing R&D has been completed on a bulk tonnage composite drill core sample. Metal extractions of 94.5%
nickel and 95.5% cobalt have been defined. High specification mixed sulphide product (MSP) and nickel and cobalt
sulphate crystal production have been confirmed.
Strategic Partner Search
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 globally significant GNCP. Particularly in-light of the strategic
scale of the KNP offers the opportunity for multiple processing hubs. Interest remains high in securing critical supplies of
ethically sourced nickel and cobalt off-take from the KNP.
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 and is a northern
extension of the Boulder Lefroy Fault which is the major gold controlling structure for the world renowned Golden Mile.
Ardea controls approximately 65km of strike of the BTZ. There is minimal BTZ exposure at surface on Ardea tenure due
to alluvial cover and laterite profile development. Target generation efforts have defined multiple targets that have been
ranked and are being systematically explored. Proof of concept demonstrating the gold exploration potential of Ardea
controlled BTZ tenure continues to be defined with three consecutive RC drill programs within the GNCP all intersecting
high-grade gold mineralisation in a wide variety of lithological and weathering settings. Recent RC gold exploration drilling
results within the GNCP project tenements have included: Big Four in the central west:18m at 3.38 g/t gold from 18m; 14m
at 2.40 g/t gold from 6m; and 20m at 2.91g/t gold from 76m. Aphrodite North in the east: 6m at 3.60g/t Au, 8m at 4.94g/t
Au from 172m to end of hole, and 10m at 1.52g/t Au. Lady Charlotte to the southeast: 8m at 6.57g/t Au from 24m.
Ardea’s assertion that a significant gold camp lies largely buried by transported cover beneath the GNCP is further
developing with each drilling program completed.
Multiple gold and nickel sulphide exploration targets have been defined over other strategic project areas such as Bulong
and Kalpini, with additional follow-up field work planned for the 2021 financial year.
20
Ardea Resources Limited & controlled entities - Annual Report 2020
Directors’ Report continued
Big Four Gold, within the Goongarrie Nickel Cobalt Project (GNCP)
The historic Big Four Gold mine is located on the Mt Vetters Pastoral Lease, approximately 70 kilometres north northwest
of Kalgoorlie in Western Australia. The Big Four Gold Prospect lies within granted Mining Lease (M24/778) 100% owned
by Ardea with a Native Title agreement in place.
Big Four Gold 2020 Mineral Resource Estimate (JORC 2012).
Category
Inferred Total
Some rounding may occur.
Cut-off (Au g/t)
Tonnes (kt)
Au (g/t)
Contained Au (oz)
(cid:149)(cid:3)(cid:19)(cid:17)(cid:24)(cid:19)
178
2.7
15,300
Drilling
During the financial year Ardea completed 3,787 metres of aircore and 2,382 metres of RC drilling focused on gold
exploration and resource definition targets, primarily at the Big Four Gold deposit, to enable the generation of a maiden
resource.
377 metres of RC drilling was completed for nickel sulphide exploration, at Kalpini.
Metallurgy
Four composite samples were selected for metallurgical testwork of the Big Four Gold deposit, with results still awaited at
year end.
CORPORATE AND FINANCIAL POSITION
As at 30 June 2020 the Consolidated Entity had cash reserves of $10 million (2019 - $11.2 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 Managing
Director (or equivalent) 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 Managing Director (or equivalent) 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
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
2020
Cents
(1.81)
(1.81)
2019
Cents
(1.41)
(1.41)
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:
(cid:120) During the year there were 11,155,011 IPO Options exercised at 25 cents and converted into fully paid ordinary
(cid:120)
shares which raised total funds of $2,788,753;
The Company completed the successful sale and return of capital relating to the NSW exploration assets into the
newly listed Godolphin Resources Limited (refer Note 9 for additional information).
OPTIONS/PERFORMANCE RIGHTS OVER UNISSUED CAPITAL
Unlisted Options
During the financial period all Options on issue were exercised (refer details above in significant changes). There are no
remaining Options on issue (2019 – 11,155,011 Options exercisable at 25 cents each).
Performance Rights
During the year the Company issued a further 2,941,000 Performance Rights to Directors and Employees under the Ardea
Performance Rights Plan that was approved at the 2017 and 2018 AGMs. 1,685,000 Performance Rights lapsed without
achieving the hurdle and a further 170,000 lapsed following Employees leaving the Company. Subsequent to the end of
the financial year a further 765,000 Performance Rights lapsed.
Ardea Resources Limited & controlled entities - Annual Report 2020
21
Directors’ Report
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
forthe following:
On 18 September 2020 the company completed an equity raising to institutional and sophisticated investors with 7,446,811
new shares issued at 47 cents per share to raise $3,500,000. It also launched a Share Purchase Plan to raise additional
funds with the maximum to be raised of $2,500,000 at 47 cents per share. The SPP will close on 6 October 2020.
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 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.
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
Mathew Longworth
Andrew Penkethman
Ian Buchhorn
Non-Executive Chair
Appointed on 21 July 2020
Managing Director
Appointed 5 February 2020
Non-Executive Director
Appointed on 17 August 2016
Directors’ Interests in
Ordinary Shares
Directors’ Interests in
Performance Rights
-
60,000
12,511,440
-
1,200,000
700,000
DIRECTORS’ MEETINGS
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
Board of Directors’ Meetings
Meetings Attended Meetings held while a director
Mathew Longworth (appointed 31/7/2020)
Andrew Penkethman (appointed 5/2/2020)
Ian Buchhorn
Katina Law (resigned 31/7/2020)
Wayne Bramwell (resigned 3 July 2020)
-
5
10
10
9
-
5
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.
22
Ardea Resources Limited & controlled entities - Annual Report 2020
Directors’ Report continued
REMUNERATION REPORT
the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendation 8.1 of
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 and Remuneration Committee meetings would be made up of the full board.
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 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 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.
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:
(cid:404)
(cid:404)
(cid:404)
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:
(cid:404)
(cid:404)
(cid:404)
Fixed remuneration;
Issuance of unlisted options/performance rights; and
Short term incentive payments.
Ardea Resources Limited & controlled entities - Annual Report 2020
23
Directors’ Report
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 Managing Director on 5 February
2020 and is employed under an executive services agreement on a salary of $290,000 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
(subsequently reduced to 80%). He was awarded 900,000 Performance Rights in 3 equal tranches that were approved
by shareholders at the 2017 AGM, and a further 400,000 Performance Rights approved at the 2019 AGM. Of these the
first tranche of 300,000 was converted into fully paid ordinary shares in 2018 after achieving the performance hurdle, and
the 2nd tranche expired without achieving the performance hurdle. The balance of 700,000 performance rights remain on
issue subject to performance hurdles. The agreement is subject to a mutual 3 month notice period.
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:
2019/2020
Directors
K Law – Executive Chair (i)
A Penkethman – Managing Director (ii)
I Buchhorn – Executive (iii)
W Bramwell – Non-Executive (iv)
Executives
S Middlemas - Company Secretary (v)
2018/2019
Directors
K Law – Executive Chair (i)
I Buchhorn – Executive (ii)
W Bramwell – Non-Executive (iii)
Executives
A Penkethman – CEO (ii)
S Middlemas - Company Secretary (v)
Primary
Post Employment
Equity
Compensation
Base
Salary/Fees
$
Bonus
$
Superannuation
Contributions
$
Performance
Rights
$
Total
$
128,333
268,000
313,500
57,000
98,250
195,000
330,000
60,000
66,769
100,550
37,500
0
0
0
0
0
25,460
29,782
3,325
0
31,350
5,700
6,650
0
59,191
49,953
59,191
40,077
187,524
380,913
402,473
100,402
18,187
116,437
68,562
68,562
34,281
0
34,281
263,562
429,912
99,981
73,419
134,31
(i)
Ms Law was appointed Non-Executive Chair on 7 November 2016, and moved into an executive role in July 2018 until February 2019. All fees are
paid to her Consulting Company Fitzroy Consulting Services. Ms Law resigned from the board on 31 July 2020.
(ii) Mr Penkethman was appointed CEO on 1 April 2019, and was appointed as Managing Director on 5 February 2020.
(iii) Mr Buchhorn was appointed as a Non-Executive Director on 17 August 2016 and moved to an Executive Director on 8 September 2017.
(iv) Mr Bramwell was appointed as a Non-Executive Director on 29 January 2018. Fees were paid to his Consulting Company Sabre Investments from
February 2020. Mr Bramwell resigned from the board on 15 July 2020.
(v) Mr Middlemas was appointed Company Secretary on 20 October 2016. All fees for providing Company Secretarial services were paid to Sparkling
Investments Pty Limited.
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 2020.
The Managing Directors cash bonus was paid on 31 March 2020 and represented 75% of the available bonus of $50,000
based on the number of KPIs achieved (the remainder of the bonus lapsed). The KPIs have been updated for 2021 in line
with operating and market conditions that have been set by the full Board.
24
Ardea Resources Limited & controlled entities - Annual Report 2020
Directors’ Report continued
Performance Rights issued during the current financial period
During the current financial year the Company issued a further 2,941,000 Performance Rights to Directors and Employees
under the Ardea Performance Rights Plan that was approved at the 2017 and 2018 AGMs. 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.
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.
Class ‘F’ Performance Rights: upon the Company’s Shares reaching a 30 day VWAP which is equal to or greater than
$0.93 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 ‘G’ Performance Rights: upon the Company’s Shares reaching a 30 day VWAP which is equal to or greater than
$1.12 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.
During the financial year 1,685,000 Performance rights lapsed without the hurdle being achieved and a further 170,000
Performance rights lapsed following employees leaving the Company.
Subsequent to year end, there have been 765,000 Performance rights that have lapsed following employees and directors
leaving the Company.
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
Class B
Class C
Class D
Class E
Class F
Class G
Underlying Security
$0.656
$0.656
$0.365
$0.365
Exercise Price
Share Price Barrier
Nil
$2.37
Nil
Nil
Nil
$0.60
Nil
$0.77
$0.69
Nil
$0.93
$0.69
Nil
$1.12
Grant Date
4 Dec 17
4 Dec 17
2 Jul 19
2 Jul 19
2 Dec 19
2 Dec 19
Expiration Date
30 Nov 19
30 Nov 20
31 Dec 21
31 Dec 22
31 Dec 21
31 Dec 22
Life of Rights (years)
2
3
Volatility
100%
100%
Risk free rate
2.033%
2.033%
2.5
100%
1.50%
3.5
100%
1.50%
2
100%
1.50%
3
100%
1.50%
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 - $791,749), the value of Class C Performance Rights of $Nil, the value of the
Class D Performance Rights of 17.15 cents (total $169,957), the value of the Class E Performance Rights of 19.72 cents
(total $78,880) the value of the Class F Performance Rights of 31.4 cents (total $157,000) and the value of the Class G
Performance Rights of 36.28 cents (total $181,400). 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 any changing conditions.
Ardea Resources Limited & controlled entities - Annual Report 2020
25
Directors’ Report
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 $75,525, (2019 - $81,856).
The Company uses Indigenous Professional Services Pty Ltd (an entity associated with Non-Executive Chair Katina Law)
to provide HR consulting work on normal arms length commercial terms. Total paid during the financial year was $4,000
(2019 - $67,375).
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:
Opening
Ordinary Shares
Purchases Disposals
Closing
2020
Ms K Law
Mr A Penkethman
Mr I Buchhorn
Mr W Bramwell
Mr S Middlemas
1,008,046
60,000
11,851,440
-
538,046
2019
Ms K Law
Mr I Buchhorn
Mr W Bramwell
Mr S Middlemas
1,008,046
11,851,440
-
538,046
-
660,000
10,000
-
-
-
-
-
-
-
-
-
-
1,008,046
60,000
12,511,440
10,000
538,046
1,008,046
11,851,440
-
538,046
Performance
Rights (1)
30 June 2020
700,000
1,200,000
700,000
425,000
210,000
600,000
600,000
450,000
300,000
(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.
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.
26
Ardea Resources Limited & controlled entities - Annual Report 2020
Directors’ Report continued
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 29th day of September 2020
Signed in accordance with a resolution of the Directors
Mathew Longworth
Non-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. 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;
2. KNP Cobalt Zone Study on 6 January 2017 in accordance with JORC 2012.
3. Pre-Feasibility Study based on a production rate of 1.5Mtpa lodged on 28 March 2018.
4. Expansion Study based on a production rate up to 2.25Mtpa lodged on 24 July 2018.
5. Drilling defines shallow, high-grade gold at Big Four Gold, Goongarrie, 26 February 2020 in accordance with JORC 2012.
6. Maiden Resource for Big Four Gold Project, WA, on 14 May 2020 in accordance with JORC 2012.
7. Significant gold in first RC drilling at Aphrodite North, on 13 August 2020 in accordance with JORC 2012.
8. Ardea BTZ gold exploration success at Lady Charlotte, on 24 August 2020 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 Big Four Gold is based on information compiled or reviewed by James Ridley, a Competent Person who is a Member of the
Australian Institute of Geoscientists. Mr Ridley 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 Ridley consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The gold exploration and industry benchmarking summaries are based on information reviewed or compiled 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 2020
27
28
Ardea Resources Limited & controlled entities - Annual Report 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2020
NOTES
2020
2019
Other income
Employee expenses
Insurance expenses
Secretarial fees
Corporate expenses
Computer support services
Depreciation
Rent
Share Based Payments
Write-off of Exploration Expenditure
Revaluation of Investments
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)
2
3
5
14
19
19
$
245,805
$
333,044
2,446,680
3,012,183
51,918
86,190
222,966
86,180
125,187
110,522
341,625
2,216,045
(1,043,613)
(2,573,237)
252,869
112,356
93,260
248,449
83,973
103,484
152,451
417,300
-
-
(3,116,518)
713,840
(2,077,527)
(1,487,734)
-
-
(2,077,527)
(1,487,734)
-
-
(2,077,527)
(1,487,734)
(1.81) cents
(1.41) cents
(1.81) cents
(1.41) cents
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 2020
29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
NOTES
2020
$
2019
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Lease Assets
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment and motor vehicles
Investments
Lease Assets
Capitalised mineral exploration expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Lease Liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease Liabilities
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Share Based Payment Reserve
Accumulated losses
TOTAL EQUITY
6
6A
7
8
9
6A
10
11
6A
12
6A
10,006,059
362,045
69,050
18,984
11,188,295
1,986,917
-
15,443
10,456,138
13,190,655
121,113
2,371,976
51,788
20,496,211
23,041,088
33,497,226
412,870
69,050
261,043
742,963
51,788
51,788
794,751
618,232
10,000
10,000
24,461,801
25,090,033
38,280,688
391,114
-
239,949
631,063
-
-
631,063
32,702,475
37,649,625
13(a)
15
14
36,685,870
3,930,401
(7,913,796)
32,702,475
39,897,118
3,588,776
(5,836,269)
37,649,625
The above Consolidated Statement of Financial Position should be read in conjunction with the Consolidated Entity’s
accompanying notes.
30
Ardea Resources Limited & controlled entities - Annual Report 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
Notes
Contributed
Equity
$
Share Based
Payment
Reserve
$
Losses
Total
$
$
BALANCE AT 30 JUNE 2018
39,608,365
3,171,476
(4,348,535)
38,431,306
Total Comprehensive Income
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
-
Shares issued during the year
13(b)
288,753
-
-
(1,487,734)
(1,487,734)
-
-
288,753
417,300
Performance Rights issued to staff
BALANCE AT 30 JUNE 2019
-
417,300
39,897,118
3,588,776
(5,836,269)
37,649,625
BALANCE AT 30 JUNE 2019
39,897,118
3,588,776
(5,836,269)
37,649,625
Total Comprehensive Income
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
Shares issued during the year
Return of Capital – Godolphin Resources
Performance Rights issued to staff
BALANCE AT 30 JUNE 2020
-
13(b)
13(b)
2,788,752
(6,000,000)
-
-
-
341,625
(2,077,527)
(2,077,527)
-
-
2,788,752
(6,000,000)
341,625
36,685,870
3,930,401
(7,913,796)
32,702,475
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 2020
31
CONSOLIDATED STATEMENT OF CASHFLOWS
For the year ended 30 June 2020
Cash flows from operating activities
Interest received
Other Income
Payments to suppliers and employees (inclusive of goods
and services tax)
NOTES
2020
$
2019
$
170,889
50,000
353,721
-
(311,896)
(1,687,963)
Net cash used in operating activities
20(a)
(91,007)
(1,334,242)
Cash flows from investing activities
Payments for exploration and evaluation
Research and development refund received
Payments for investments
Proceeds (Payments) for plant and equipment (net)
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
(5,651,379)
(9,823,166)
1,969,264
(203,063)
2,968,545
-
5,196
(69,112)
(3,879,982)
(6,923,733)
2,788,753
288,753
-
-
2,788,753
288,753
(1,182,236)
(7,969,222)
11,188,295
19,157,517
10,006,059
11,188,295
The above Consolidated Statement of Cash Flows should be read in conjunction with the Consolidated Entity’s
accompanying notes.
32
Ardea Resources Limited & controlled entities - Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
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.
Ardea Resources Limited & controlled entities - Annual Report 2020
33
Notes to the Financial Statements for the year ended 30 June 2020 continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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 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.
34
Ardea Resources Limited & controlled entities - Annual Report 2020
Notes to the Financial Statements for the year ended 30 June 2020 continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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:
(cid:120)
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.
(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.
Ardea Resources Limited & controlled entities - Annual Report 2020
35
Notes to the Financial Statements for the year ended 30 June 2020 continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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:
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
(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)
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.
36
Ardea Resources Limited & controlled entities - Annual Report 2020
Notes to the Financial Statements for the year ended 30 June 2020 continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(o)
Leases
Accounting policies from 1 July 2019
The Group as lessee
At inception of a contract, the Group assesses if the contract contains a lease or is a lease. If there is a
lease present, a right-of-use asset and a corresponding lease liability are recognised by the Group where
the Group is a lessee. However, all contracts that are classified as short-term leases (i.e. a lease with a
remaining lease term of 12 months or less) and leases of low-value assets are recognised as an
operating expenses on a straight-line basis over the term of the lease.
Initially the lease liability is measured at the present value of the lease payments still to be paid at the
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this
rate cannot be readily determined, the Group uses the incremental borrowing rate. All lease payments
included in the measurement of the lease liability.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, any lease
payments made at or before the commencement date and any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever
is the shortest.
Accounting policies applied until 30 June 2019
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.
(p)
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 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.
Ardea Resources Limited & controlled entities - Annual Report 2020
37
Notes to the Financial Statements for the year ended 30 June 2020 continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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
Financial assets at fair value through profit and loss are limited to holdings of listed securities and are
valued based on the quoted share price at the relevant reporting date with the associated changes in
fair value through profit and loss.
Other financial assets are measured at amortised cost.
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 2020 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. The
only new standard affecting the current year is the AASB 16 Lease standard which is detailed above in
Note 1(o).
38
Ardea Resources Limited & controlled entities - Annual Report 2020
Notes to the Financial Statements for the year ended 30 June 2020 continued
2.
OTHER INCOME
Interest
Other Income
Interest
3.
EXPENSES
2020
2019
$
$
162,239
333,044
83,566
-
245,805
333,044
Contributions to employees superannuation
plans
Depreciation - Plant and equipment
178,263
125,187
249,601
103,484
Provision for employee entitlements
44,663
77,673
4.
AUDITORS’ REMUNERATION
Audit – Butler Settineri (Audit) Pty Limited
Audit and review of the financial statements
26,533
28,347
5.
INCOME TAX
No income tax is payable by the Consolidated Entity as it has carry forward 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
(2,077,527)
(1,487,734)
Tax at the tax rate of 27.5%
(571,320)
(409,127)
Tax effect of amounts which are deductible in
calculating taxable income:
Non-deductible expenses/gains
1,744,319
44,798
Other allowable expenditure/income
(83,848)
-
Deferred tax asset not brought to account
Income tax expense
(1,089,151)
364,329
-
-
(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:
11,543,528
13,534,000
3,174,470
3,721,850
Provisions/Accruals/Other
245,694
201,031
Tax losses available for offset against future
taxable income
11,543,528
13,534,000
11,789,222
13,735,031
Unbooked deferred tax liabilities comprise:
Capitalised mineral exploration and evaluation
expenditure
14,779,208
9,912,025
(d)
Franking credits balance
The Consolidated Entity has no franking credits available as at 30 June 2020.
Ardea Resources Limited & controlled entities - Annual Report 2020
39
Notes to the Financial Statements for the year ended 30 June 2020 continued
6.
OTHER RECEIVABLES
Current
y
GST recoverable
Bonds and guarantees
R&D Receivable
Interest Receivable and Other
6A.
LEASE ASSETS & LIABILITIES
Current
Lease Assets
Lease Liabilities
Non-Current
Lease Assets
Lease Liabilities
2020
$
41,000
-
300,000
21,045
362,045
69,050
69,050
51,788
51,788
2019
$
40,317
90,000
1,600,000
256,600
1,986,917
-
-
-
-
With the introduction of the new Leasing standard, the Company has capitalised the lease on its West Perth
office – the lease has a fixed term of 2 years and is not subject to any rent increases. Consequently the
accounting treatment has the equal and opposite asset and liability values to put on the balance sheet.
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
18,984
15,443
268,324
248,550
(234,631)
(162,063)
33,693
86,487
209,068
(121,648)
87,420
-
-
-
121,113
243,314
(76,515)
166,799
377,680
(12,734)
364,946
618,232
40
Ardea Resources Limited & controlled entities - Annual Report 2020
Notes to the Financial Statements for the year ended 30 June 2020 continued
8.
PROPERTY, PLANT AND EQUIPMENT (continued)
Reconciliation
Reconciliation of the carrying amounts for each class of plant and equipment and Properties and
Buildings are set out below:
2020
$
2019
$
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
Disposals
Depreciation
Carrying amount at the end of the year
Property and buildings
Carrying amount at beginning of the year
Disposals
86,487
19,804
(72,598)
33,693
166,799
-
(22,831)
(56,548)
87,420
364,946
(364,946)
95,703
34,867
(44,083)
86,487
191,954
34,246
(59,401)
166,799
364,946
-
Carrying amount at the end of the year
-
364,946
9. INVESTMENTS
Non-Current
Investment in Unlisted Company
10,000
10,000
Unlisted Options in Listed Company (1)
Investment in Listed Entities (2)
1,004,390
1,357,586
2,371,976
-
-
10,000
1. The Company received 15 million Unlisted Options exercisable at 25 cents any time prior to 31
December 2022 in Godolphin Resources Limited as part of the spin-out of the NSW assets.
These have been valued using a Black Scholes model as at 30 June 2020.
2. Shares in Listed Entities are valued as the closing share price on ASX at 30 June 2020.
Particulars in relation to the controlled entities
Ardea Resources Limited is the parent entity.
Name of Controlled entity
TriAusMin Pty Ltd (1) ACN 062 002 475
Atriplex Pty Ltd ACN 113 719 207
Yerilla Nickel Pty Ltd ACN 123 249 810
Class of
Shares
Ordinary
Ordinary
Ordinary
Ardea Exploration Pty Ltd ACN 137 889 279
Ordinary
Kalgoorlie Nickel Pty Ltd ACN 137 889 199
Ordinary
Equity Holding
2020
0%
100%
100%
100%
100%
2019
100%
100%
100%
100%
100%
1. The Company’s interest in TriAusMin Pty Ltd was transferred to Godolphin Resources Limited immediately
prior to the IPO being completed. This transaction led to the following movements in Ardea’s accounts:
Exploration
Property Plant and Equipment
Exploration Writeoffs
Unlisted Options in Listed Company
Issued Capital (Capital Return)
Net Gain/(Loss) on loss of control of subsidiary
$
(6,693,655)
(377,680)
66,945
1,004,390
6,000,000
-
Ardea Resources Limited & controlled entities - Annual Report 2020
41
Notes to the Financial Statements for the year ended 30 June 2020 continued
10.
CAPITALISED MINERAL EXPLORATION
EXPENDITURE
Non-Current
In the exploration phase
Cost brought forward
2020
$
2019
$
24,461,802
16,238,635
Exploration Properties purchased
-
-
Add: Expenditure incurred during the year (at
cost)
5,634,199
9,823,167
Less Godolphin Spinout tenements
(6,693,655)
-
R&D Refund received/receivable
(690,090)
(1,600,000)
Exploration expenditure written off
(2,216,045)
-
20,496,211
24,461,802
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.
During the year the Company completed the spinout of the NSW tenements into a new IPO listing on ASX
called Godolphin Resources Limited. The capitalised mineral exploration expenditure relating to these
tenements was $6,693,655.
11.
TRADE AND OTHER PAYABLES
Current (Unsecured)
Trade creditors
Other creditors and accruals
388,870
24,000
412,870
367,114
24,000
391,114
Included within trade and other creditors and accruals is an amount of $321,301 (2019 - $100,930) relating to
exploration expenditure.
12.
PROVISIONS
Current
Employee entitlements
261,043
239,949
13.
CONTRIBUTED EQUITY
(a)
Ordinary Shares
2020
2019
$ $
117,300,435 (2019 - 106,145,424) fully paid
ordinary shares
36,685,870
39,897,118
(b)
Share Movements during the Year
2020
2019
Number of
Shares
$
Number of
Shares
$
Beginning of the financial period
106,145,424
39,897,118
104,990,413
36,608,365
New share issues during the period
IPO Options exercised at 25c/share
11,155,011
2,788,752
1,155,011
288,753
Godolphin Return of Capital
-
(6,000,000)
-
-
117,300,435
36,685,870
106,145,424
39,897,118
42
Ardea Resources Limited & controlled entities - Annual Report 2020
Notes to the Financial Statements for the year ended 30 June 2020 continued
13.
CONTRIBUTED EQUITY (Continued)
(c) Unlisted Options
During the financial year the entire balance of 11,155,011 IPO options were exercised by Investors and
unrelated parties at 25 cents each. At the end of the Financial Year there were no options on issue.
(d)
Share Based Payments
During the current financial year there were a number of Share Based payments made to Directors and
Employees with 2,941,000 Performance Rights, (2019 – 830,000) issued during the period and there were
1,685,000 Performance Rights (2019 – 430,000) that lapsed. There were no shares issued during the period
from the conversion of Performance Rights (2019 – Nil). Subsequent to year end there have been no further
Performance Rights issued and 765,000 have lapsed.
(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 2020 are as follows:
Cash and cash equivalents
Trade and other receivables
Other assets
Trade and other payables
Provisions
Working capital position
14.
ACCUMULATED LOSSES
2020
$
2019
$
10,006,059
11,188,295
362,045
1,966,917
18,984
15,443
(412,870)
(391,114)
(261,043)
(239,949)
9,713,175
12,539,592
Accumulated losses at the beginning of the period
5,836,269
4,384,535
Net loss attributable to members
2,077,527
1,487,734
Accumulated losses at the end of the year
7,913,796
5,836,269
Ardea Resources Limited & controlled entities - Annual Report 2020
43
Notes to the Financial Statements for the year ended 30 June 2020 continued
15.
RESERVES
Share Based Payment Reserve
Balance at the beginning of the period
Add: Amounts expensed in current period
Balance at the end of the period
2020
$
2019
$
3,588,776
341,625
3,930,401
3,171,476
417,300
3,588,776
Share Option reserve
The share option reserve comprises any equity settled share based payment transactions.
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 $3,440,447 (2019 - $3,600,812). These obligations are also subject to variations by farm-out
arrangements or sale of the relevant tenements.
(b) Capital Commitments
The Consolidated Entity had no capital commitments at 30 June 2020.
18.
SEGMENT INFORMATION
The Consolidated Entity operates predominantly in one segment involved in the mineral exploration and
development industry in Australia.
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:
$ $
2020
2019
Earnings/ (loss) used in calculating basic
and diluted earnings/ (loss) per share
(2,077,527)
(1,487,734)
Number of Shares
Weighted average number of ordinary shares used in
calculating basic earnings/ (loss) per share:
Effect of dilutive securities
Share options*
Adjusted weighted average number of ordinary shares
used in calculating diluted earnings/ (loss) per share
114,207,455
105,368,690
_-
-
114,07,455
105,368,690
Basic and Diluted loss per share (cents per share)
1.81 cents
1.41 cents
*Non-dilutive securities
As at balance date, 4,476,000 performance rights which represent potential ordinary shares were not dilutive as
they would decrease the loss per share.
44
Ardea Resources Limited & controlled entities - Annual Report 2020
Notes to the Financial Statements for the year ended 30 June 2020 continued
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
(2,077,527)
(1,487,734)
2020
$
2019
$
Non-cash items:
Depreciation
Exploration Writedowns
Revaluation of Investments
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
125,187
103,484
2,216,045
(1,043,613)
-
8,650
20,677
341,625
417,300
(3,540)
(181,065)
299,318
344,930
(1,815)
(629,506)
44,663
77,672
Net cash outflows used in operating activities
(91,007)
(1,334,242)
(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.
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 1.12% (2019: 2.38%).
(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.
Ardea Resources Limited & controlled entities - Annual Report 2020
45
Notes to the Financial Statements for the year ended 30 June 2020 continued
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 2020 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.
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 except for the following:
On 18 September 2020 the company completed an equity raising to institutional and sophisticated investors with
7,446,811 new shares issued at 47 cents per share to raise $3,500,000. It also launched a Share Purchase Plan
to raise additional funds with the maximum to be raised of $2,500,000 at 47 cents per share. The SPP will close
on 6 October 2020.
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
2020
$
10,502,298
23,082,099
33,584,397
881,922
881,922
32,702,475
36,685,870
3,930,401
(7,913,796)
32,702,475
2019
$
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
Total comprehensive loss for the year
2,077,527
1,487,734
Ardea Resources Limited has not entered into any deed of cross guarantee with its wholly-owned subsidiaries,
had no contingent liabilities at 30 June 2020 and no capital commitments at 30 June 2020.
46
Ardea Resources Limited & controlled entities - Annual Report 2020
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 29 to 46, 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 2020 and of its
performance, as represented by the results of its operations, for the financial year to 30 June 2020.
(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 2020.
This declaration is made in accordance with a resolution of the Directors.
Signed at Perth this 29th day of September 2020.
Mathew Longworth
Chairman
Ardea Resources Limited & controlled entities - Annual Report 2020
47
Independent Audit Report
48
Ardea Resources Limited & controlled entities - Annual Report 2020
Independent Audit Report continued
Ardea Resources Limited & controlled entities - Annual Report 2020
49
Independent Audit Report continued
50
Ardea Resources Limited & controlled entities - Annual Report 2020
Independent Audit Report continued
Ardea Resources Limited & controlled entities - Annual Report 2020
51
Shareholder Information
The following additional information was applicable at 23 September 2020
1. Distribution of Fully Paid Ordinary Shareholders is as follows:
Size of Holding Number of Holders Shares Held
%
1 - 1,000 1,884 768,844 0.66
1,001 - 5,000 1,346 3,526,205 3.01
5,001 - 10,000 513 4,029,752 3.44
10,001 - 100,000 723 22,100,007 18.84
100,001 - 125 86,875,627 74.06
4,591 117,300,435 100.00
a) There were 1,912 shareholders who held less than a marketable parcel.
b) The twenty largest shareholders hold 52.04% 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 12,511,440 10.66
B O’Shannassy and Associates 8,926,335 7.61
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 Nominees Pty Limited 11,222,678 9.57%
2 Hazurn Pty Ltd 7,085,020 6.04%
3
J P Morgan Nominees Australia Pty Limited 5,967,706 5.09%
4 BNP Paribas Nominees Pty Ltd
5,903,053 5.03%
5
Josco Pty Ltd 5,383,809 4.59%
6 Kurana Pty Ltd 3,197,564 2.73%
7 Merrill Lynch (Australia) Nominees Pty Limited 2,207,604 1.88%
8 Mr Iwan Jones & Ms Joyce Christine Jones
2,131,494 1.82%
9 B & J O'Shannassy Management Pty Ltd
1,906,936 1.63%
10 Mr Olivier Dupuy & Ms Julie Dupuy
1,850,000 1.58%
11 Hsbc Custody Nominees (Australia) Limited 1,788,162 1.52%
12 Josco Pty Ltd 1,666,664 1.42%
13 Mr Michael Andrew Harris 1,645,000 1.40%
14 Mrs Pamela Jean Buchhorn 1,608,244 1.37%
15 Bnp Paribas Noms Pty Ltd 1,481,000 1.26%
16 Latsod Pty Ltd 1,250,000 1.07%
17 Hsbc Custody Nominees (Australia) Limited 1,247,757 1.06%
18 Martin Buckley 1,245,065 1.06%
19 Neweconomy Com Au Nominees Pty Limited
<900 Account> 1,138,375 0.97%
20 Mr Martin Spadaro & Dr Katherine Spadaro
1,115,000 0.95%
TOTAL 61,041,131 52.04%
52
Ardea Resources Limited & controlled entities - Annual Report 2020
Shareholder Information continued
5. Unlisted Options
There is no unlisted options on issue.
6. Share Buy-Backs
There is no current on-market buy-back scheme.
7. Stock Exchanges
The Securities of the Company are not quoted on any other stock exchanges.
Ardea Resources Limited & controlled entities - Annual Report 2020
53
Tenement Schedule as at 30 June 2020
Tenement
Location Ardea Interest Status Note Tenement
(%)
Location Ardea Interest Status Note
(%)
Ardea Western Australia Projects
Goongarrie Nickel Cobalt Project
E24/196
Goongarrie 100 Live
M24/541
Goongarrie 100 Live
E24/209
Goongarrie 100 Live
M24/731
Goongarrie 100 Live 3
E24/211
Goongarrie 100 Pending
M24/732
Goongarrie 100 Live 3
E29/934
Goongarrie 100 Live
M24/744
Goongarrie 100 Live
E29/1028 Goongarrie 100 Live
M24/778
Goongarrie 100 Live 3
E29/1038 Goongarrie 100 Live
M29/167
Goongarrie 100 Live
E29/1039 Goongarrie 100 Pending
M29/202
Goongarrie 100 Live
E29/1045 Goongarrie 100 Live
M29/272
Goongarrie 100 Live
E29/1048 Goongarrie 100 Live
M29/278
Goongarrie 100 Live
E29/1060 Goongarrie 100 Pending
M29/423
Goongarrie 100 Live
E30/500
Goongarrie 100 Live
M29/424
Goongarrie 100 Live
E30/501
Goongarrie 100 Live
M29/426
Goongarrie 100 Live
E30/502
Goongarrie 100 Live
P24/5260 Goongarrie 100 Live
G29/25
Goongarrie 100 Pending
P24/5328 Goongarrie 100 Live
L24/239
Goongarrie 100 Live
P24/5329 Goongarrie 100 Live
L29/134
Goongarrie 100 Live
P24/5265 Goongarrie-Car Boyd 100 Live
L29/135
Goongarrie 100 Live
P24/5169 Goongarrie-Windanya 100 Live
L30/67
L30/68
Goongarrie 100 Live
M24/919
Goongarrie-Scotia 100 Ni rights Live 6
Goongarrie 100 Live
M24/959
Goongarrie-Scotia 100 Ni rights Live 6
GNCP Expansion Siberia
GNCP Expansion Black Range
E24/203
Siberia 100 non Au-Ag rights Live 4
M24/757
Black Range 100 non Au-Ag rights Live 4
E29/889
Siberia 100 non Au-Ag rights Live 4
M24/973
Black Range 100 non Au-Ag rights Pending 4
M24/634
Siberia 100 non Au-Ag rights Live 1,4
P24/4395
Black Range 100 non Au-Ag rights Live 4
M24/660
Siberia 100 non Au-Ag rights Live 4
P24/4396
Black Range 100 non Au-Ag rights Live 4
M24/663
Siberia 100 non Au-Ag rights Live 4
P24/4400
Black Range 100 non Au-Ag rights Live 4
M24/664
Siberia 100 non Au-Ag rights Live 4
P24/4401
Black Range 100 non Au-Ag rights Live 4
M24/665
Siberia 90 non Au-Ag rights Live 2,4
P24/4402
Black Range 100 non Au-Ag rights Live 4
M24/683
Siberia 100 non Au-Ag rights Live 4
P24/4403
Black Range 100 non Au-Ag rights Live 4
M24/686
Siberia 100 non Au-Ag rights Live 4
M24/772
Siberia 100 non Au-Ag rights Live 4
GNCP Expansion Highway
M24/797
Siberia 100 non Au-Ag rights Live 4
E29/1082 Highway 100 Pending
M24/915
Siberia 100 non Au-Ag rights Live 4
E29/1083 Highway 100 Pending
M24/916
Siberia 100 non Au-Ag rights Live 4
E29/1089 Highway 100 Pending
P24/5235
Siberia 100 Live
M29/214
Highway 100 Live
P24/5236
Siberia 100 Live
P29/2501 Highway 100 Live
P29/2484
Siberia 100 Live
P29/2559 Highway 100 Pending
P29/2485
Siberia 100 Live
P29/2560 Highway 100 Pending
P24/5416
Siberia 100 Pending
P29/2561 Highway 100 Pending
P24/5417
Siberia 100 Pending
P29/2562 Highway 100 Pending
P24/5418
Siberia 100 Pending
54
Ardea Resources Limited & controlled entities - Annual Report 2020
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
E29/941
Ghost Rocks 100 Live
P29/2514 Ghost Rocks 100 Live
E29/981
Ghost Rocks 100 Live
P29/2515 Ghost Rocks 100 Live
P29/2511 Ghost Rocks 100 Live
P29/2538 Ghost Rocks 100 Live
P29/2512 Ghost Rocks 100 Live
P29/2539 Ghost Rocks 100 Live
Kalpini Hub GNCP Expansion
M25/209
Kalpini-Bulong 100 Live
E27/524
Kalpini 100 non-Au rights Live 9
P25/2454
Kalpini-Bulong 100 Live
E27/606
Kalpini 100 Live
P25/2455
Kalpini-Bulong 100 Live
E27/607
Kalpini 100 Live
P25/2456
Kalpini-Bulong 100 Live
E28/1224
Kalpini 100 Live
P25/2457
Kalpini-Bulong 100 Live
E28/2978
Kalpini 100 Pending
P25/2458
Kalpini-Bulong 100 Live
M27/395
Kalpini 100 Live
P25/2459
Kalpini-Bulong 100 Live
M27/506
Kalpini 100 Live
P25/2460
Kalpini-Bulong 100 Live
M27/512
Kalpini 100 Pending
P25/2461
Kalpini-Bulong 100 Live
M28/199
Kalpini 100 Live
P25/2482
Kalpini-Bulong 100 Live
M28/201
Kalpini 100 Live
P25/2483
Kalpini-Bulong 100 Live
M28/205
Kalpini 100 Live
P25/2484
Kalpini-Bulong 100 Live
E27/278
Kalpini-Pioneer 100 Ni Lat Ore Live 5
P25/2559
Kalpini-Bulong 100 Live
E27/438
Kalpini-Pioneer 100 Ni Lat Ore Live 5
P25/2560
Kalpini-Bulong 100 Live
E27/520
Kalpini-Pioneer 100 Ni Lat Ore Live 5
P25/2561
Kalpini-Bulong 100 Live
E27/579
Kalpini-Pioneer 100 Ni Lat Ore Live 5
P25/2609
Kalpini-Bulong 100 Live
E28/1746
Kalpini-Pioneer 100 Ni Lat Ore Live 5
P25/2613
Kalpini-Bulong 100 Live
E28/2483
Kalpini-Pioneer 100 Ni Lat Ore Live 5
P25/2614
Kalpini-Bulong 100 Live
E25/578
Kalpini-Bulong 100 Pending
P25/2615
Kalpini-Bulong 100 Live
M25/59
Kalpini-Bulong 100 Live
P25/2650
Kalpini-Bulong 100 Pending
M25/134
Kalpini-Bulong 100 Live
P26/4542
Kalpini-Bulong 100 Pending
M25/145
Kalpini-Bulong 100 Live
P26/4543
Kalpini-Bulong 100 Pending
M25/151
Kalpini-Bulong 100 Live
M31/488
Kalpini-Lake Rebecca 100 Pending
M25/161
Kalpini-Bulong 100 Live
P31/2038
Kalpini-Lake Rebecca 100 Live
M25/171
Kalpini-Bulong 100 Live
P31/2039
Kalpini-Lake Rebecca 100 Live
M25/187
Kalpini-Bulong 100 Live
P31/2040
Kalpini-Lake Rebecca 100 Live
Yerilla Hub GNCP Expansion
WA Regional
E39/1954
Yerilla-Aubils 100 Live
E39/2188
Yundamindra 100 Pending
E31/1092
Yerilla-Boyce Creek 100 Live
M15/1101 WA Regional Pre-emp Ni-Co Lat Live 7
E31/1169
Yerilla-Boyce Creek 100 Live
M15/1263 WA Regional Pre-emp Ni-Co Lat Live 7
E31/1208
Yerilla-Boyce Creek 100 Pending
M15/1264 WA Regional Pre-emp Ni-Co Lat Live 7
E31/1213
Yerilla-Boyce Creek 100 Live
M15/1323 WA Regional Pre-emp Ni-Co Lat Live 7
M31/483
Yerilla-Boyce Creek 100 Live
M15/1338 WA Regional Pre-emp Ni-Co Lat Live 7
M31/475
Yerilla-Jump Up Dam 100 Live
M27/510 WA Regional 100 Ni Lat Ore Live 8
M31/477
Yerilla-Jump Up Dam 100 Live
M27/272
Kanowna East Non-Au Rights Live 10
M31/479
Yerilla-Jump Up Dam 100 Live
Ardea Resources Limited & controlled entities - Annual Report 2020
55
Tenement Schedule continued
Tenement
Location Ardea Interest Status Note Tenement
(%)
Location Ardea Interest Status Note
(%)
Kookynie Gold-Nickel
Bedonia Gold-Nickel
E40/350
Kookynie Option for 100 Live
E63/1827
BEDONIA 100% LIVE
E40/357
Kookynie Option for 100 Live
E63/1828
BEDONIA 100% LIVE
E63/1856
BEDONIA 100% LIVE
Perrinvale Nickel-Gold
E63/1857
BEDONIA 100% LIVE
E29/1006
PERRINVALE 100% LIVE
E63/1928
BEDONIA 100% LIVE
E29/1078
PERRINVALE 100% PENDING
E63/1929
Bedonia 100 Live
Mt Zephyr Gold-Nickel
E63/1976
Bedonia 100 Live
E37/1271 MT ZEPHYR 100% LIVE
E63/1995
Bedonia 100 Pending
E37/1272 DARLOT EAST 100% LIVE
E63/2008
Bedonia 100 Pending
E63/1974
Bedonia 100 Live
E37/1273 DARLOT EAST 100% LIVE
E37/1274 MT ZEPHYR 100% LIVE
Donnelly River Graphite
E39/1706 MT ZEPHYR 100% LIVE
E70/4804 DONNELLY RIVER 100% PENDING
E39/1854 MT ZEPHYR 100% LIVE
E39/1985 MT ZEPHYR 100% LIVE
Lachlan Fold Belt Ardea
EL 8557
RESTDOWN LITHIUM 100% LIVE
Britannia Gold Ltd retains precious metal rights.
Impress Ventures Ltd has a 10% equity free-carried interest to a decision to mine.
Barrick (PD) Australia Limited retains certain Au claw-back rights and royalty receivable.
Notes:
1.
2.
3.
4. Ora Banda Mining Ltd holds Au-Ag rights while Ardea retains all non Au-Ag rights.
5.
6.
7.
8.
Acra JV – Northern Star Resources Ltd earn-in with Pioneer Resources Ltd. Former holds gold rights while latter retains nickel sulphide rights. Ardea
retains rights to Ni laterite ore.
Black Mountain Gold Limited all rights with exception of Ardea retaining Ni rights.
Ramelius Resources Limited assignee (Maximus Resources Ltd) all rights, Ardea pre-emptive right to Ni-Co laterite.
Pioneer Resources Limited assignee (Paddington Gold Pty Ltd) owns all mineral rights (except nickel sulphide) while Ardea retains rights to nickel laterite
ore.
Kalnorth Gold Ltd owns Au rights while Ardea retains non-Au rights.
9.
10. Northern Star (Kanowna) Limited holds Au rights. Ardea retains non-Au rights.
56
Ardea Resources Limited & controlled entities - Annual Report 2020
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
BTZ means Bardoc Tectonic Zone
Co means Cobalt
Cu means Copper
DHEM means downhole electromagnetics
EM means electromagnetics
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
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
PGE means Platinum Group Metals - Ruthenium (Ru), Rhodium (Rh), Palladium (Pd), Osmium (Os), Iridium (Ir), and Platinum (Pt)
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), Praseodymium (Pr) and Cerium (Ce).
Sc means Scandium
V means Vanadium
Ardea Resources Limited & controlled entities - Annual Report 2020
57
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:
Top- Looking east from Lake Yindarlgooda at the Bulong lookout; Middle left - Scene from KNP exploration; Middle right - Gossan subcrop within
KNP tenure; Bottom left: Members of the Ardea Team from left Matt Painter, Andrew Penkethman, Mike Miller, Amanda Prabhavalkar, Alex Mukherji,
Frances Sinclair, Ian Buchhorn, Emine Hussein ; Bottom right: Half Mile Reef at Windanya.
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Ardea Resources Limited & controlled entities - Annual Report 2020
Ardea - Developing and Exploring
Ardea Resources Limited & controlled entities - Annual Report 2020