ANNUAL FINANCIAL REPORT
30 JUNE 2019
ABN 49 112 609 846
Directors
Dr Frazer Tabeart
Steven Michael
Tommy McKeith
Morgan Ball
Non-Executive Chairman
Executive Director
Non-Executive Director
Non-Executive Director
Joint Company Secretaries
Matthew Foy
Catherine Grant-Edwards
Registered Office
Unit 18, 40 St Quentin Avenue
Claremont WA 6010
Telephone
Facsimile
Email
(08) 9383 3330
(08) 9486 4799
info@arrowminerals.com.au
Auditors
Pitcher Partners BA&A Pty Ltd
Level 11, 12-14 The Esplanade
Perth WA 6000
Bankers
National Australia Bank Limited
Level 14, 100 St Georges Terrace
Perth WA 6000
Share Registry
Advanced Share Registry Service
110 Stirling Highway
Nedlands WA 6009
Stock Exchange Listing
The Company is listed on the Australian Securities Exchange Limited (ASX)
ASX: Code:
AMD
AMDOA
Table of Contents
Chairman’s Letter
Directors’ Report
Corporate Governance Statement
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to and forming part of the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Information
Page No.
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Chairman’s Letter
Dear Shareholder,
On behalf of your Directors, it gives me great pleasure to present Arrow Minerals Limited’s (Arrow or the Company)
2019 Annual Report and Financial Statements.
In a major shift from its Australian focussed exploration strategy, Arrow has acquired privately-owned Burkina Faso
exploration company, Boromo Gold Limited (Boromo), via an all-scrip transaction. Burkina Faso, in West Africa, has
known gold endowment of +60Moz, with the majority of gold discoveries made in the past 15 years, and is a well
recognised emerging but under-explored global gold province.
As a result of this transaction, Arrow now owns a 100% interest in six high quality gold exploration projects, totalling
2,013km2, in Burkina Faso, with drill-ready targets at Divole East and Divole West. Following the end of the reporting
year, Boromo completed a 2,400m reverse circulation drilling programme at Divole East, where previous drilling by
Boromo intersected 9.9m @ 4.3g/t Au. Further encouragement from the recent drilling at Divole East, and the
underexplored nature of the other Burkina Faso projects means that Arrow believes shareholder interests are best
served by focussing its efforts on this region in the coming year.
Arrow has accordingly restructured its Board and Management to add significant West African gold exploration
experience, including the appointment of Mr Howard Golden as Chief Executive Officer and Mr Tommy McKeith and
Mr Morgan Ball as Non-Executive Directors. Arrow’s Managing Director, Mr Steven Michael, will continue as an
Executive Director of the Company. Non-Executive Director, Mr Nicholas Ong, has retired from the Board after eight
years of exemplary service.
The Company’s other major asset is the 100% owned Strickland Gold Project, which covers 1,200km2 of exploration
licences and is approximately 100km west of Menzies and 180km north-east of Southern Cross, in the Eastern
Goldfields of Western Australia. Very limited gold exploration has been undertaken in this region for the past 15-20
years due to focus on the region’s iron ore potential.
A major gold exploration programme was executed at Strickland in the first half of the year with a total of 412 aircore
holes drilled for 17,000m covering the T2, T6 and T11 prospects. A number of encouraging zones of near surface
mineralisation were identified through these programmes, and require follow-up, including 16m @ 1.9g/t Au and
9m @ 2.6g/t Au at the T6 prospect. All work to date at Strickland will be reviewed by the Company’s geological and
geochemical consultants, and a follow-up work programme devised for execution in 2020.
At the Malinda Lithium Project, Arrow completed further soil sampling and rock-chip sampling aimed at refining
prospects for further evaluation. The Company also completed a hyper-spectral survey which promises to provide
project scale context for this work. The Company will evaluate whether this project represents an opportunity for
continued exploration under Arrow management, or whether divestment of the project better reflects the Company’s
gold focussed strategy.
Arrow’s joint venture with Independence Group NL over the Plumridge Nickel Project in the Fraser Range continued
during the year, with Independence reaching 90% ownership through completion of $5m in exploration expenditures
over the project. This included completion of ground-based electro-magnetic surveys and limited drilling. Arrow is
now a 10% contributing JV partner to this project which continues to receive majority funding from Independence.
Arrow has ended the year in a strong financial position, with cash, receivables and listed investments worth over
$3 million immediately after the Boromo acquisition. As a result, the Company is able to develop its gold-focussed
exploration strategy in both Burkina Faso and Western Australia without the need for additional funding.
On behalf of the entire Board of Directors, I would like to thank Arrow’s shareholders for their continued support and
look forward to advancing our new and existing exploration projects during the next 12 months.
Dr Frazer Tabeart
Non-Executive Chairman
Arrow Minerals Limited
2019 Annual Report
Page 1
Directors’ Report
Your directors submit their report for Arrow Minerals Limited (Arrow or the Company) for the year ended 30 June
2019.
DIRECTORS AND MANAGEMENT
The names of Arrow’s directors that held office during the year and until the date of this report are as below. Directors
were in office for this entire period unless stated otherwise.
Dr Frazer Tabeart
Mr Steven Michael
Mr Tommy McKeith
Mr Morgan Ball
Mr Nicholas Ong
Non-Executive Chairman
Executive Director
Non-Executive Director (appointed 26 August 2019)
Non-Executive Director (appointed 26 August 2019)
Non-Executive Director (resigned 26 August 2019)
Dr Charles (Frazer) Tabeart – Non-Executive Chairman
Dr Tabeart is a graduate of the Royal School of Mines with a PhD and Honours in Mining Geology.
He has over 30 years’ experience in international exploration and mining projects, including 16 years
with WMC Resources and 14 years with the Mitchell River Group of Companies.
Dr Tabeart is a member of the Australian Institute of Geoscientists and a member of the Society of
Economic Geologists.
Other current directorships
Dr Tabeart is currently Executive Director of African Energy Resources Limited and Managing Director of PolarX Ltd.
Former directorships in last 3 years
Nil.
Mr Steven Michael – Executive Director
Mr Michael has extensive experience in the global resources sector specialising in corporate finance
and equity capital markets. He has over 20 years’ experience in natural resources with RBC Capital
Markets, Macquarie Bank and NM Rothschild & Sons.
Mr Michael is a Member of the Institute of Chartered Accountants in Australia and is a member of the
Australian Institute of Company Directors.
Other current directorships
Nil.
Former directorships in last 3 years
Nil.
Mr Tommy McKeith – Non-Executive Director (appointed 26 August 2019)
Mr McKeith is a geologist with over 30 years’ experience in exploration, development and mining,
including executive roles in Gold Fields Ltd and previous Managing Director and director roles with
ASX resource companies.
Mr McKeith is a Fellow of the Australian Institute of Mining and Metallurgy.
Other current directorships
Mr McKeith is Chairman of Prodigy Gold NL and Genesis Minerals Limited and Non-Executive Director of Evolution
Mining Limited.
Former directorships in last 3 years
Nil.
Page 2
2019 Annual Report
Arrow Minerals Limited
Mr Morgan Ball – Non-Executive Director (appointed 26 August 2019)
Mr Ball is a Chartered Accountant with over 25 years of Australian and international resources industry
experience. Mr Ball was previously Managing Director of BC Iron Limited and is currently Chief Financial
Officer of Saracen Minerals Holding Limited.
Mr Ball is a Member of the Institute of Chartered Accountants in Australia.
Other current directorships
Mr Ball is currently Non-Executive Director of Chalice Gold Mines Limited.
Former directorships in last 3 years
Nil.
Mr Nicholas Ong – Non-Executive Director (resigned 26 August 2019)
Mr Ong was a Principal Adviser at the Australian Securities Exchange and brings 14 years’ experience
in IPO, listing rules compliance and corporate governance. Mr Ong has developed a wide network of
clients in Asia-Pacific region and provides corporate and transactional advisory services through
boutique firm Minerva Corporate Pty Ltd.
He is a member of the Governance Institute of Australia and holds a Bachelor of Commerce and a
Master of Business Administration from the University of Western Australia.
Other current directorships
Helios Energy Limited, CoAssets Limited, Arrow Energy Limited and Black Star Petroleum Limited.
Former directorships in last 3 years
Excelsior Gold Limited, Auroch Minerals Limited, Fraser Range Metals Group Limited, Tianmei Beverage Group
Corporation Limited, Bojun Agriculture Holdings Limited and Jiajiafu Modern Agriculture Limited.
Mr Howard Golden – Chief Executive Officer (appointed 26 August 2019)
Mr Golden is Geophysicist with over 30 years’ experience in exploration across six continents, including
significant operating experience throughout West Africa. Mr Golden has held senior roles with
Nordgold, Rio Tinto, BHP and WMC, including discovery teams at Syama, Oyu Tolgoi, Agbaou and
West Musgrave deposits.
Mr Golden is a member of numerous Australian and international professional organisations and is a
Registered Professional Geoscientist. He holds qualifications from the University of Utah (BA) and the
University of Leeds (MSc).
Ms Jenine Owen – Chief Financial Officer
Ms Owen is a Chartered Accountant with over 20 years’ experience in the disciplines of financial and
management accounting, corporate governance and assurance. Ms Owen has held senior finance
roles with Shell in Australia and London.
Ms Owen is an associate member of the Australian Institute of Company Directors, holds a Bachelor
of Accounting Science degree (UNISA) majoring in Accounting and Audit, has a post Graduate Diploma
(Applied Accounting and Finance) from the University of Zimbabwe and is a qualified Chartered
Accountant (CAANZ).
Arrow Minerals Limited
2019 Annual Report
Page 3
Mr Matthew Foy – Joint Company Secretary
Mr Foy was previously a Senior Adviser at the ASX, has over ten years’ experience in facilitating the
compliance of listed companies. Mr. Foy possesses core competencies in publicly listed and unlisted
company secretarial, administration and governance disciplines. His expertise is in corporate,
commercial and securities law with an emphasis on capital raisings and mergers and acquisitions.
Mr Foy is a member of Governance Institute Australia, has a Graduate Diploma (Applied Finance) from
FINSIA and a B.Com from the University of Western Australia.
Ms Catherine Grant-Edwards – Joint Company Secretary (appointed 26 August 2019)
Ms Grant-Edwards is the co-founder and Executive Director of Bellatrix Corporate Pty Ltd, an
outsourced accounting, CFO and company secretarial services company. Ms Grant-Edwards has over
15 years’ experience in the profession and with ASX/LSE-listed companies, private entities, and has a
background in big-four public practice (Ernst & Young).
Ms Grant-Edwards holds a Bachelor of Commerce degree (UWA) majoring in Accounting and Finance
and is a qualified Chartered Accountant (CAANZ).
AUDITOR
Pitcher Partners BA&A Pty Ltd was appointed on 6 June 2018 in accordance with Section 327 of the Corporations Act
2001. The appointment follows the resignation of Pitcher Partners Corporate & Audit (WA) Pty Ltd. The change of
auditor has occurred as part of an internal restructure within Pitcher Partners.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the year was mineral exploration in Western Australia. There were no
significant changes in the nature of the Company’s principal activities during the year.
RESULTS OF OPERATIONS
The net operating loss after tax for the year ended 30 June 2019 was $3,909,752 (30 June 2018: Loss of $550,628).
Page 4
2019 Annual Report
Arrow Minerals Limited
REVIEW OF OPERATIONS
Exploration during the year focussed on the Strickland Gold Project, with 17,000m of aircore drilling completed over
the T2, T6 and T11 (Helsinki) Prospects. High resolution aeromagnetic and ground gravity surveys were acquired over
the entire project area and will be used, in conjunction with geological and drilling information, to determine future
drill programmes over gold-in-bedrock anomalies.
At the Plumridge Nickel Project, Arrow’s joint venture partner, Independence Group NL (ASX: IGO) (IGO), increased its
interest in the project to 90% through the expenditure of $5 million. IGO completed detailed airborne EM surveys,
ground EM surveys and project-wide aircore drilling programmes. Reverse circulation and diamond drilling of EM
conductor plates has commenced and will continue throughout 2019/20.
Arrow sold its 49% interest in the Pilbara Gold Project to Pacton Gold Inc. (TSX-V: PAC) (Pacton) for $2 million in cash
and shares. During the year, Arrow divested approximately one-third of its shares in Pacton and, subsequent to year
end, the remaining shares have been sold.
In late June, Arrow announced that it had entered into an agreement to acquire privately-owned Burkina Faso
exploration company, Boromo Gold Limited (Boromo), via an all-scrip transaction (Acquisition). Boromo owns a 100%
interest in six high quality gold exploration projects, totalling 2,013km2, in Burkina Faso, with drill-ready targets at
Divole East and Divole West. The Acquisition was completed subsequent to year end, on 26 August 2019.
STRICKLAND GOLD PROJECT
Eastern Goldfields, Western Australia
The Strickland Gold Project (Strickland) covers 1,370km2 of highly
prospective greenstone belts, 100km west of Menzies and 180km
north of Southern Cross in the Eastern Goldfields of Western
Australia. Strickland covers over 150 strike kilometres of the
Evanston, South Elvire and Yerilgee Greenstone Belts which
straddle the Evanston and Yerilgee Shear Zones (Figure 1).
Since acquiring Strickland in late 2016, Arrow has completed a
project-wide geochemical survey (BLEG sampling) which has been
integrated with geophysical and geological datasets to identify
19 camp-scale gold prospects. Gold camps have the potential to
host multiple gold deposits within a major lithostructural zone or
single significant deposits.
During the year, Arrow completed several aircore drilling
programmes at the T2, T6 and T11 (Helsinki) Prospects and a
stratigraphic drill programme, to identify bedrock geology
underlying geochemical and geophysical anomalies.
Prospect
Type
Holes Metres Ave. Depth
T2
T6
T11 (Helsinki)
Stratigraphic
Total
Aircore
Aircore
Aircore
Aircore
80
174
58
100
412
3,560m
8,540m
1,860m
2,990m
45m
49m
32m
30m
16,950m
40m
In addition to the aircore drilling programmes, Arrow undertook:
Figure 1: Strickland Gold Project location map
First-pass soil sampling over prospects identified from BLEG surveys along the Yerilgee Greenstone Belt;
Detailed geological mapping and structural interpretation at the T1, T2, T6, T8 and Helsinki Prospects;
Project-wide ground gravity survey (400m x 800m); and
Integration and analysis of geological, geochemical and geophysical datasets to rank and prioritise gold and
base metal targets for future exploration.
Arrow Minerals Limited
2019 Annual Report
Page 5
T2 Prospect
The T2 prospect is located in the Mt Elvire greenstone belt adjacent to the regionally significant Evanston Shear and
has been defined by a 5km x 1.5km gold-in-soil anomaly. The T2 prospect was first drilled in July 2017, with BARRC007
intersecting 48m @ 0.7g/t from 27m including 21m @ 1.1g/t and 3m @ 2.3g/t.
Exploration this year focussed on the T2d Prospect, which is defined by a 3km long gold-in-soil anomaly directly
overlying a sheared granite adjacent to the edge of the South Elvire Greenstone belt (Figure 2). The sheared granite
has been mapped and contains rafts of mafic amphibolite and locally intense epidote alteration and quartz veining.
Drilling at the T2d Prospect was undertaken on 200m spaced lines, with angled holes drilled to an average depth of
45m across the sheared granite. Gold mineralisation was intersected in the majority of drill holes, with several holes
returning +0.5g/t Au within 15m of surface. The best intersection was in STKAC0338, which returned 3m @ 0.7g/t
from 10m.
The drill programme has confirmed gold mineralisation occurs along a regional-scale bend in the shear identified in
ground gravity and high-resolution airborne magnetic data. Along this section, higher grade mineralisation appears
to be controlled by a series of NW-trending faults intersecting the main shear at regular intervals. The T2d Prospect
remains open to the west, north and south.
Figure 2: T2d Prospect – plan view showing drill collar locations and gold mineralisation
T6 Prospect
The T6 prospect is located in the Yerilgee greenstone belt and was defined by a 4.2km x 1.3km gold-in-soil anomaly,
adjacent to a late stage granitic intrusion and a project scale NNE trending structure. A total of 174 holes for 8,500m
were drilled at the T6 Prospect to test a number of gold targets defined by detailed soil sampling, previous wide
spaced aircore drilling and lithostructural mapping. Drilling commenced over the T6c mineralised corridor, followed
by fence lines over T6a, T6b and T6d (Figure 3). The majority of drilling targeted a 3.2km interpreted mineralised
corridor at T6c, with the central and southern portion of the corridor returning significant gold intersections including
16m @ 1.9g/t from 0m, 9m @ 2.6g/t from 23m and 3m @ 1.6g/t from 38m.
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2019 Annual Report
Arrow Minerals Limited
Drilling at T6c has confirmed the mineralised corridor as a series of splay faults off a regionally significant shear,
intruded by a number of mineralised porphyries. The structures and porphyries show locally intense alteration typical
of orogenic gold mineralisation. In addition, drilling intersected a number of porphyry intrusions and lamprophyres
hosted by mafic and ultramafic volcanic rocks. Mineralisation occurs in late brittle-ductile structures in both the
porphyry intrusions and the ultramafic rocks.
Figure 3: T6 Camp with mineralised corridor and drill collar locations
Insets: Detailed drill results from southern and central portions of mineralised corridor
Helsinki Prospect
The Helsinki Prospect (previously T11 Prospect) is a large, high-priority target along a major fault within the Yerilgee
Greenstone Belt, that extends over five kilometres of strike and is up to two kilometres wide. Drilling at Helsinki has
confirmed that a large felsic porphyry is located internal to Banded Iron Formations (BIF) and mafic volcanic lithologies
(Figure 4). The NNW-trending sheared contact between the porphyry and mafic lithologies forms a major domain
boundary associated with gold anomalism which was intersected in multiple drill lines over four kilometres. This
boundary is interpreted to be a major mineralised fluid pathway, with significant drill results including:
6m @ 1.1g/t Au from 11m, including 2m @ 1.8g/t Au (STKAC0100);
1m @ 1.3g/t Au from 53m (BARAC0230);
2m @ 0.5g/t Au from 33m (BARAC0230); and
1m @ 0.4g/t Au from 59m (BARAC0233).
Arrow Minerals Limited
2019 Annual Report
Page 7
Figure 4: Simplified geology of the Helsinki Prospect over gravity image (1VD)
During the drilling campaign, five rock samples were collected from areas of interest, with a sheared felsic rock
returning a gold result of 15.4g/t Au. This result confirms the prospectivity of the felsic lithologies to be a source of
hydrothermal fluids which have created significant structural pathways for gold-bearing fluid migration.
Further drilling at Helsinki will be targeted in areas where the margins of NNW-trending structures (major mineralised
fluid pathways) and geological contacts intersect NE-NW trending cross cutting faults. A major fault jog (or flexure)
at the northern end of the Helsinki porphyry is coincident with NE-NW cross cutting faults and NNW-trending
mineralised structures. Fault jogs and cross cutting structures are commonly known to create favourable sites for gold
mineralisation in Archean greenstone terrains elsewhere in the Eastern Goldfields and Southern Cross Domain.
MALINDA LITHIUM PROJECT
Gascoyne Region, Western Australia
The Malinda Lithium Project (Malinda) is located 120km north-east of Gascoyne Junction in the Gascoyne Region of
Western Australia (Figure 5). Previous exploration conducted by Arrow identified several lithium and tantalum-bearing
pegmatites associated with fertile granite intrusions.
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2019 Annual Report
Arrow Minerals Limited
Figure 5: Malinda Project location map
Arrow completed a maiden 17 hole RC drilling programme over four outcropping pegmatites in 2017. The drilling
resulted in the identification of thick moderately dipping pegmatites at three of the main prospects with assays
confirming the mineralisation potential at the Tomahawk, Blade and T-Bone Prospects. Further analysis has verified
spodumene as the main lithium-bearing mineral in samples over 2.0% Li2O.
During the year, Arrow undertook detailed geological interpretation and mapping of the pegmatites at Malinda, leading
to a systematic rock chip sampling programme to determine fractionation trends and confirm mineralisation in
previously unidentified pegmatites.
A total of 217 rock chips (ave. 5.8kg) were collected, predominantly to the north and east of previous exploration work.
The rock chips returned significant tantalum grades, with 79 samples grading over 150ppm Ta2O5, including the highest
value recorded at the Project to date of 1,673ppm Ta2O5. (Figure 6).
Figure 6: Additional rock chip samples at Malinda
A geochemical review of the rock chip data shows a strongly developed niobium/tantalum (Nb/Ta) fractionation trend
from the south-west extending to the north and north-east, indicating the granite intrusion may continue at depth.
In addition, mineralised pegmatites were identified under shallow cover to the north and north-east of the previously
identified pegmatites.
Arrow Minerals Limited
2019 Annual Report
Page 9
The majority of drilling completed the to date at Malinda was located within the less fractionated zone closer to the
granite, with the exception of the Tomahawk prospect which returned the most intense and consistent mineralisation
in the first pass drilling programme. There remains potential for a significant extension of highly fractionated
pegmatites under cover to the north and north-east of previous exploration work.
In June 2019, Arrow acquired a detailed airborne HyMap hyperspectral survey over the entire Malinda Project area
(Figure 7). This survey will be used to identify areas prospective for LCT mineralisation, similar to the main Malinda
Prospect.
Figure 7: HyMap mineralogy over topography (Arrow tenements in yellow)
PLUMRIDGE NICKEL PROJECT
Fraser Range Province, Western Australia
The Plumridge Nickel Project (Plumridge) is a joint venture between Independence Group NL (IGO) (90%) and
Arrow (10%), covering 2,100km2 of exploration licences in the Fraser Range Province of Western Australia. Plumridge
is highly prospective for massive nickel-copper sulphides and is located 200km north of the Nova Operation (Nova)
which is 100%-owned by IGO and produced 30.7kt Ni and 13.7kt Cu in FY2019.
Since entering into the Plumridge joint venture in January 2018, IGO has completed project-wide:
aircore drilling programmes (3km x 800m spacing);
SPECTREM airborne electromagnetic (AEM) surveys; and
ground moving loop EM (MLEM) surveys over target areas to define bedrock conductors.
IGO has completed drilling of the four bedrock targets that were identified using the aircore drilling, AEM and MLEM
datasets. The targets are considered prospective for Nova-style magmatic sulphide mineralisation (Ni-Cu) and
Andromeda-style volcanogenic massive sulphide mineralisation (Cu-Zn). IGO plans on introducing a diamond drill rig
to further test the Perle and Mafic conductors, in addition to new MLEM targets, Regal and Meera (Figure 8).
During the year, IGO met the expenditure commitment to earn 90% interest in Plumridge.
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2019 Annual Report
Arrow Minerals Limited
Figure 8: Drilling completed in FY2019 and planned drill holes
PILBARA GOLD PROJECT
Pilbara Region, Western Australia
In August 2018, Arrow disposed of its 49% interest in the Pilbara Gold Project (Pilbara) to Pacton Gold Inc. (TSXV: PAC)
(Pacton) for consideration of C$1,000,000 (A$1,060,106) in cash and 2,000,000 Pacton Shares (Consideration).
In addition to receiving the Consideration, Arrow retains the following rights and obligations:
Pacton will pay Arrow C$200,000 upon granting of the exploration licence applications, with C$100,000 paid on
the grant of each application (during the year C$100,000 (A$108,849) was received);
Arrow will receive a Discovery Bonus of C$500,000 in cash upon Pacton publishing a gold resource at the Project
of over 100,000oz in accordance with National Instrument 43-101 (TSXV equivalent of the JORC Code); and
Arrow retains all rights to explore, mine and extract lithium, caesium and tantalum.
BOROMO GOLD
Burkina Faso
In June 2019, Arrow announced that it had entered into an agreement to acquire Boromo via an all-scrip transaction,
valuing the company at $2.9 million. Boromo’s largest shareholder, GenGold Resource Capital Pty Ltd (GenGold)
converted 75% of its shareholding in Boromo to Performance Rights (PR), demonstrating significant support for the
transaction and alignment of value for all shareholders. The acquisition was completed on 26 August 2019, following
approval by Arrow shareholders and 100% acceptance from Boromo shareholders.
Arrow Minerals Limited
2019 Annual Report
Page 11
Arrow now holds a 100% interest in 12 exploration licences and two exploration licence applications, totalling 2,013km2,
across six gold projects in Burkina Faso (Figure 9). The most advanced projects are Divole East and Divole West,
where target generation and first pass drilling has been completed. Previous drilling by Boromo at Divole East
intersected 9.9m @ 4.3g/t Au from 48m and 8.0m @ 1.7g/t Au.
Figure 9: Boromo gold exploration projects – location map
Divole East Project
The Divole East Project consists of 28km2 of tenements located on the Boromo-Poura Shear Zone. The Boromo Belt
hosts several major gold deposits, including the historic Poura gold mine which produced 0.75Moz of gold at an
average grade of ~15g/t Au. The Divole East Project was acquired due to its favourable geological setting on the
Boromo-Poura Shear Zone and significant gold mineralisation identified in artisanal workings.
Detailed regolith mapping of the Divole East lease areas was used to guide initial geochemical exploration. Soil
samples were collected initially on 400m x 40m spacing over amenable areas, with infill to 200m x 40m spacing
undertaken in the gold anomalous zones. The most significant gold anomalies were located along the western edge
of the project, coincident with artisanal workings, and the eastern half of the Divole East fold structure.
In March 2017, 10 diamond holes were drilled (total of 1,962m) on 160m spaced sections to test the significance of
gold mineralisation associated with the Divole Main artisanal workings. Gold mineralisation (+1g/t Au) was intersected
in eight of the drill holes, with mineralisation associated with a shear zone which may intersect the main north-south
structure mined in the artisanal site at the southern end of the workings.
Better drill intersections include:
DDH002 – 9.9m at 4.3g/t Au from 48m in highly altered silicified rocks, including 1.0m @ 29.2g/t Au from 52m
and 1.0m @ 8.3g/t Au from 56.9m;
DDH003 – 7.5m @ 1.6g/t Au from 65m, including 0.8m @ 7.8g/t Au from 70.0m; and
DDH010 – 10m @ 0.7g/t Au from 71m and 8m @ 1.7g/t Au from 125m.
On the southern limb of the Divole East fold structure, a distinctly laminated quartz vein at least 180m long and
extending under concealment to the north and south has been mapped and examined from artisanal workings. This
laminated vein style is commonly associated with very high-grade mineralisation, as evidenced at Roxgold Inc.’s (TSE:
ROXG) Yaramoko deposit, 90km south-west of Divole, that hosts a laminated vein grading >16g/t Au.
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Arrow Minerals Limited
An RC drill campaign has been completed to follow up high grade results on the eastern edge of the licence as well
as to test N-S structures and laminated veins in the Divole East fold structure (Figure 10). The 24 hole programme
was recently completed and the results were announced to the market on 17 September 2019.
Figure 10: Divole East fold structure detailed geology, structure and artisanal workings
with 2017 diamond drilling and completed RC drill collars
Divole West Project
Initial field work at the Divole West Project was completed in early 2017, with a surface and auger geochemical
approach used to confirm the geological interpretation and identify geochemically “live” structures in the project area.
Soil sampling on 800m x 80m east-west lines was undertaken in December 2017 (Figure 11), with a coherent 3km
long NNE-striking gold anomaly identified parallel to and just east of the interpreted position of the Poura Shear Zone.
Subsequent infill sampling on 200m x 40m lines confirmed a strong coherent gold-in-soil anomaly with values up to
400ppb Au (0.4g/t Au).
An auger drilling programme at 200m x 40m spacing was completed in March 2018 with a total of 164 holes drilled
for 1,064m (average depth 6.5m). Assay results have confirmed the discovery of a previously unknown gold mineralised
system with over 2km of strike (Figure 12).
Auger sample assays up to 6,140ppb Au (6.1g/t Au) in hole DIVWAUG0038 were received over the southern lobe of
the soil anomaly. Assays from holes over the northern lobe of the soil anomaly returned values up to 4,398ppb Au
(4.4g/t Au) associated with quartz veined saprolite in hole DIVWAUG005 and 3,579ppb Au (3.6g/t Au) in hole
DIVWAUG142. The auger drilling results suggest an array of northerly trending mineralised structures off the main
NE-NNE trending Poura Shear Zone.
A 2,500m RC drilling programme is planned for 4Q 2019 at Divole West to test the high-grade auger results along
the 2km anomalous zone on structures east of the Boromo-Poura Shear Zone.
Arrow Minerals Limited
2019 Annual Report
Page 13
Figure 11: Divole West Regional geology and structure
with soil sampling result
Figure 12: Divole West geology and significant auger
drilling results
Boulsa Project
The Boulsa Project covers 491km2 of licences located in the highly gold-endowed Markoye Fault corridor (Figure 13)
which hosts several gold mines and pre-development resource projects, including the Essakane mine 200km to the
north, which is the largest gold producer in Burkina Faso, and the Taparko mine 90km to the north of Boulsa. To the
south of Boulsa, also on the prospective Markoye Fault, sits the Sanbrado project of West African Resources (ASX:
WAF) and B2Gold’s Kiaka project.
Figure 13: Boulsa geology with structure, permits, deposits and prospects
Page 14
2019 Annual Report
Arrow Minerals Limited
Arrow will complete detailed regolith and landform mapping prior to planning surface geochemical sampling
programmes in areas of gold anomalous stream catchments. Geological mapping will be completed to provide context
for ranking gold and polymetallic anomalies (specifically copper-molybdenum associated with porphyry-style
mineralisation) defined by the geochemical work.
Hounde South and Nako Projects
The Hounde South and Nako Projects (Figure 14) were acquired in 2017. There is little historical mineral exploration
over the project areas, with only broadly spaced regional stream sediment sampling completed in the area by BUMIGEB
(Burkina government geological survey).
Gold anomalism was detected in the BUMIGEB survey in the south-eastern segment of the Hounde South project.
Follow up BLEG stream sediment sampling has been completed by Boromo, however the samples have not yet been
submitted for gold analysis.
The Nako project is located in the southern Boromo belt to the north of major gold and copper-gold systems at Batie
West (Centamin) and Gaoua (B2Gold). The project encompasses the major Boromo Shear Zone corridor where it
coincides with the eastern flank of a major granitoid batholith. A large intermediate intrusion complex hosts porphyry-
style (Cu-Au) mineralisation in the tenement block. The Kunche deposit in Ghana is located on a parallel structural
corridor some 30km SE of Nako.
Regional stream sediment sampling by BUMIGEB indicates the presence of significant gold anomalism up to 75ppb in
the northern part of the project. Follow-up BLEG stream sediment sampling has been completed by Boromo, however
the samples have not yet been submitted for gold analysis.
Figure 14: Hounde South and Nako geology with structure, permits and deposits
Following assaying of the existing BLEG stream sediment samples, Arrow plans on completing soil geochemistry and
drilling as appropriate at Hounde South and Nako in late 2019/early 2020.
Arrow Minerals Limited
2019 Annual Report
Page 15
Gourma Project
The Gourma Project area covers the western flank of the Diapaga greenstone belt and is interpreted to include
significant areas of unexplored greenstone belt (Figure 15). The Gourma Project was acquired in 2017 as a conceptual
target in an emerging gold belt where little exploration work has been completed to date. However, artisanal gold
workings are known in an area from 5km east of the Gourma project boundary through to the Boungou gold camp
which is 10km south-east of the Gourma project boundary.
Figure 15: Gourma geology with structure, permits and deposits
Boromo has completed reconnaissance field traversing to field check regolith conditions and outcrop across the south
eastern sector of the project and confirmed the presence of prospective high metamorphic grade greenstone rocks
and various felsic to intermediate granitoids and orthogneiss.
Competent Persons Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr Howard
Golden who is a Member of the Australian Institute of Geoscientists. Mr Golden is a full-time employee of Arrow, as
at the date of this report, and has more than five years’ 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, Minerals Resources and
Ore Reserves”. Mr Golden consents to the inclusion in the report of the matters based on his information in the form
and context in which it appears. Additionally, Mr Golden confirms that the entity is not aware of any new information
or data that materially affects the information contained in the ASX releases referred to in this report.
CORPORATE AND FINANCIAL
Acquisition of Boromo and Share Placement
On 26 June 2019, the Company announced it had entered into a binding agreement to acquire Boromo, via an all-
scrip transaction. The acquisition was completed on 26 August 2019, following Arrow shareholder approval and 100%
acceptance from Boromo shareholders.
In conjunction with the acquisition of Boromo, Arrow completed a two-tranche placement to raise $2.1 million at an
issue price of 1¢ per share plus a 1 for 2 attaching option (ex. price 2¢, expiry 22 August 2022) (Placement). As part
of the Placement, Arrow entered into a strategic alliance with Capital Drilling Limited (LON: CAPD) (Capital Drilling)
who subscribed for $0.8 million of shares in the Placement (approx. 10% of Arrow’s issued capital). Capital Drilling
will provide drilling services to Arrow in Burkina Faso over an initial two-year period.
Page 16
2019 Annual Report
Arrow Minerals Limited
Lapse of Options
On 3 August 2018, 714,285 unquoted options exercisable at 12.6¢ lapsed.
On 30 June 2019, 8,571,408 unquoted options exercisable at 17.5¢ lapsed.
Capital Structure
The capital structure of Arrow, as at date of directors’ report, is set out below:
Quoted Securities
Ordinary shares on issue (ASX:AMD)
Options exercisable at 10.0¢ on or before 31/12/2019 (ASX:AMDOA)
Unquoted Securities
Options exercisable at 7.0¢ on or before 31/12/2019
Options exercisable at 2.0¢ on or before 22/08/2022
Options exercisable at 1.45¢ on or before 22/08/2023
844,138,519
120,872,133
13,146,469
120,150,000
37,500,000
Class A Performance Rights subject to performance conditions expiring on 26/08/2022
69,682,290
Class B Performance Rights subject to performance conditions expiring on 26/08/2022
69,682,290
Class C Performance Rights subject to performance conditions expiring on 26/08/2023
69,682,300
EVENTS AFTER THE BALANCE SHEET DATE
Completion of Boromo Acquisition and Two-Tranche Share Placement
On 15 August 2019, Arrow advised that its shareholders had approved the acquisition of Boromo through an all-scrip
transaction. On 26 August 2019, Arrow acquired 100% of the issued capital of Boromo through the issue 289,297,910
ordinary shares and 209,046,880 Performance Rights to Boromo shareholders and Performance Rights holders.
As a result of the acquisition of Boromo, the role of Managing Director was made redundant and Mr Steven Michael’s
employment as Managing Director was terminated. Mr Michael will continue as an Executive Director. Mr Matthew
Foy was also made redundant as Company Secretary. Messrs Michael and Foy both qualified for genuine redundancy
under TR 2009/2 and received a statutory redundancy payment and a termination payment as stipulated within their
respective service agreements disclosed within the Remuneration Report.
On 5 July 2019 and 22 August 2019, Arrow completed a two-tranche placement to raise a total of $2.1 million through
the issue of 220,300,000 ordinary shares and 120,150,000 options exercisable at 2¢ on or before 22 August 2022.
Other than the above, there have been no events subsequent to balance date of a nature that would require disclosure.
SIGNIFICANT CHANGE IN THE STATE OF AFFAIRS
There were no events of a material nature that have affected significantly the results or state of affairs of the Company,
other than those mentioned in this report.
REVIEW AND RESULTS OF OPERATIONS
The principal activity of the Company and its subsidiaries (the Group) during the year was mineral exploration. The
net loss after tax for the year ended 30 June 2019 was $3,909,752 (2018: Loss of $550,628). During the year, the Group
wrote off $2,625,876 in exploration and evaluation assets (2018: $1,767,288).
Summary of Financial Position
At 30 June 2019, the Group’s cash reserves were $753,368 (2018: $3,758,484). The decrease in cash was due to
exploration expenditure of $3,135,060 (2018: $2,966,965) and no capital raisings during the year (2018: $5,142,784).
Net assets of the Group as at 30 June 2019 were $9,996,662 (2018: $13,769,008).
Environmental Regulation
The Company is subject to and compliant with all aspects of environmental regulation of its exploration activities. The
Directors are not aware of any environmental law that is not being complied with.
Arrow Minerals Limited
2019 Annual Report
Page 17
Future Developments
The Group will continue to explore its Strickland Gold, Malinda Lithium and Plumridge Nickel Projects in
Western Australia and commence exploration at its newly acquired projects in Burkina Faso; and
The Group continues to review new project venture opportunities which are consistent with its strategy to
become a diversified minerals explorer.
Dividends
No dividend has been paid since the end of the financial period or recommended for the current year.
Proceedings on Behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking
responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237
of the Corporations Act 2001.
REMUNERATION REPORT (AUDITED)
Remuneration of directors and executives is referred to as compensation throughout this report. The term ‘key
management personnel’ refers to those persons having authority and responsibility for planning, directing and
controlling the activities of the Group including directors of the Company and other executives.
The following were key management personnel of the Company at any time during the previous and current financial
year and have been in office for the entire period unless indicated otherwise:
Dr Frazer Tabeart
Mr Nicholas Ong
Non-Executive Chairman (appointed 31 January 2019)
Non-Executive Director (resigned 26 August 2019)
Mr Steven Michael
Managing Director
Mr Matthew Foy
Company Secretary
Mr Dean Tuck
Ms Jenine Owen
Exploration Manager (resigned 28 February 2019)
Chief Financial Officer (commenced 30 July 2018)
Compensation levels for directors and key management personnel of the Company are competitively set to attract
and retain appropriately qualified and experienced directors and executives.
The Board is responsible for compensation policies and practices. The Board, where appropriate, seeks independent
advice on remuneration policies and practices, including compensation packages and terms of employment.
The compensation structures explained below are designed to attract suitably qualified candidates, reward the
achievement of strategic objectives, and achieve the broader outcome of creation of value for shareholders. The
compensation structures take into account a number of factors, including length of service, particular experience of
the individual concerned, and overall performance of the Company.
A remuneration consultant has not been employed by the Company to provide recommendations in respect of
remuneration, given the size of the Group and its current structure.
Cash bonuses equal to a maximum of 50% of salary may be paid, at the discretion of the Board, as part of the Short
Term Incentive Plan.
Non-Executive Directors
Total remuneration for all Non-Executive Directors, is not to exceed $250,000 per annum as approved by shareholders.
This does not include consulting fees.
Non-Executive Directors received a fixed fee for their services of $36,000 per annum (excl. GST, excl. share-based
payments) for services performed.
There is no direct link between remuneration paid to any Non-Executive Directors and corporate performance. There
are no termination or retirement benefits for Non-Executive Directors (other than statutory superannuation).
Page 18
2019 Annual Report
Arrow Minerals Limited
Remuneration
Details of the remuneration of the Key Management Personnel of Arrow are set out in the following table. Currently,
directors are responsible for the management of the Group.
Position
30 June 2019
Short-term
Salary
& fees
Post
employment
benefits
Long
service
leave
Equity settled
share based
payments
Performance-related
remuneration
rec’d in shares
Total
S Michael1
MD & CEO
$320,458
$25,000
$5,000
F Tabeart2
Non-Exec. Chairman
Non-Exec. Director
Company Secretary
Chief Financial Officer
Exploration Manager
$133,462
$691,344
-
-
$6,650
$9,065
$11,086
$51,801
-
-
$9,297
-
-
$46,000
$13,836
$13,836
$13,178
$895
$25,488
$396,458
$49,836
$49,836
$99,125
$105,384
$170,036
$14,297
$113,233
$870,675
Restated 30 June 2018 6
S Michael
MD & CEO
$311,077
$61,923
$7,484
$133,956
$514,440
F Tabeart2
Non-Exec. Director
Non-Exec. Director
Company Secretary
Exploration Manager
$159,060
$590,270
-
-
$8,104
$15,110
$85,137
-
-
-
-
$57,967
$57,967
$45,435
$80,557
$85,967
$85,967
$117,672
$254,727
$7,484
$375,882
$1,058,773
N Ong3
M Foy
J Owen4
D Tuck5
Total
N Ong3
M Foy
D Tuck
Total
$36,000
$36,000
$70,000
$95,424
$28,000
$28,000
$64,133
11%
28%
28%
13%
1%
15%
13%
26%
67%
67%
39%
32%
36%
1. Mr Michael’s short-term salary & fees exceeds $25,000 per month as $20,458 of annual leave was cashed out during the year (2018:
$21,077).
2. Director fees for Dr Frazer Tabeart were paid to Geogen Consulting Pty Ltd, a related entity of Dr Frazer Tabeart. Short-term salary &
fees does not include an additional $10,120 (2018: $1,200) paid to Geogen Consulting Pty Ltd for consulting services.
3. Director fees for Mr Nicholas Ong were paid to Minerva Corporate Pty Ltd, a related entity of Mr Nicholas Ong.
4. Ms Owen commenced on 30 July 2018.
5. Mr Tuck resigned on 28 February 2019. Salary includes an ex-gratia payment of $8,000.
6. Certain amounts shown here do not correspond to the 30 June 2018 remuneration report and reflect adjustments disclosed in Note 2
to the financial statements. Key Management Personnel equity settled share based payment remuneration for the year ended 30 June
2018 increased by $154,574 (Mr Michael: $57,468, Dr Tabeart: $15,533, Mr Ong: $21,588, Mr Foy: $19,612 and Mr Tuck: $40,373).
Share Based Remuneration
Options
No options were granted to directors for remuneration during the financial year and there were no outstanding options
over ordinary shares held by directors at 30 June 2019.
Shares
On 17 April 2014, shareholder approval was received for the adoption of an employee incentive scheme, known as
the Employee Share Plan (ESP or Plan).
The objective of the ESP is to attract directors with suitable qualifications, skills and experience to plan, carry out and
evaluate the Company’ Strategy and to motivate and retain those directors.
A material feature of the Plan is the issue of Shares pursuant to the Plan may be undertaken by way of provision of a
limited-recourse, interest free loan to be used for the purposes of subscribing for the Shares. The term of each loan
will be 3 years from the date of issue of the Shares, subject to earlier repayment in accordance with the terms of the
Plan (e.g. ceasing to be an employee of the Company or an event of insolvency).
The Shares issued to the Eligible Participants will be fully paid ordinary shares in the capital of the Company issued
on the same terms and conditions as the Company’s existing Shares, other than being subject to a holding lock until
such time as the respective restriction conditions have been satisfied, including the completion of any restriction
period, and any Loan has been extinguished or repaid under the terms of the Plan.
Although these are shares for legal and taxation purposes, Accounting Standards require they be treated as options
for accounting purposes. See Note 21 Share Based Payments for further details.
Arrow Minerals Limited
2019 Annual Report
Page 19
ESP Terms and Conditions
Participants in the ESP may be directors of the Company or any of its subsidiaries or any other related body corporate
of the Company.
Issue price: The issue price of each Share will be a 1% discount to the volume weighted average of the Company’s
Shares over the 5 days of trading on the ASX immediately prior to the issue of the Plan Shares, or such other price as
the Board determines.
Restriction Conditions: Shares may be subject to restriction conditions relating to milestones (such as a period of
employment) or escrow restrictions that must be satisfied before the Shares can be sold, transferred, or encumbered.
Shares cannot be sold, transferred or encumbered until any loan in relation to the Shares has been repaid or otherwise
discharged under the Plan.
Extension of Escrow Condition: If an Eligible Participant ceases to be an Eligible Participant as a result of an occurrence
other than certain bad leaver occurrences prior to the satisfaction of all Restriction Conditions, the escrow restriction
applied under the Escrow Condition in relation to the Plan Shares held by the Participant will be extended by 6 months.
Where a Milestone Condition in relation to Shares is not satisfied by the due date, or becomes incapable of satisfaction
in the opinion of the Board, the Company may, unless the Milestone Condition is waived by the Board, either:
(i) buy back and cancel the relevant Shares within 12 months of the date the restriction condition was not satisfied
or was waived (or became incapable of satisfaction) under Part 2J.1 of the Corporations Act in consideration for
the cancellation of any Loan granted;
(ii) cancel the relevant Shares within 12 months of the date the restriction condition was not satisfied or was waived
(or became incapable of satisfaction) under Part 2J.1 of the Corporations Act in consideration for the cancellation
of any Loan granted; or
(iii) in the event that such a buy-back or cancellation of Shares cannot occur, require the Participant to sell the Shares
as soon as reasonably practicable either on the ASX and give the Company the sale proceeds (Sale Proceeds),
which the Company will apply in the following priority:
(A) first, to pay the Company any outstanding Loan Amount (if any) in relation to the Shares and the Company’s
reasonable costs in selling the Shares;
(B) second, to the extent the Sale Proceeds are sufficient, to repay the Participant any cash consideration paid
by the Participant or Loan Amount repayments (including any cash dividends applied to the Loan Amount)
made by or on behalf of the Participant; and
(C) lastly, any remainder to the Company to cover its costs of managing the Plan.
Restriction on transfer: Other than as specified in the Plan, Participants may not sell or otherwise deal with a Share
until the Loan Amount in respect of that Share has been repaid and any restriction conditions in relation to the Shares
have been satisfied or waived. The Company is authorised to impose a holding lock on the Shares to implement this
restriction.
For details of ESP shares issued in the previous financial year refer to the remuneration report of the 2018 Annual
Report.
A full summary of the ESP was set out in the Notice of General Meeting dated 22 October 2018.
At the general meeting of the Company, held on 22 October 2018, shareholders approved the provision of a limited-
recourse, interest free loan to each of Messrs Michael, Tabeart and Ong, for the purpose of subscribing for shares in
the Company (Plan Shares). On 22 November 2018, shareholder approval was received for Dr Frazer Tabeart and
Messrs Steven Michael and Nicholas Ong to subscribe for additional shares under the Plan.
Page 20
2019 Annual Report
Arrow Minerals Limited
The Plan Shares are subject to a holding lock until the relevant milestones set out below have been met:
Milestones
1. Discovery of a mineralised prospect with multiple drill intersections of at least 15 gram metres gold (e.g. two
separate drill intersections of 5 metres @ 3g/t Au), or gold equivalent.
2. Discovery of multiple mineralised prospects as defined in Milestone 1.
3. Announce a JORC-compliant resource of 100,000oz of gold at a minimum grade of 1.0g/t Au (or equivalent for
other metals).
4. Combined capital raising of $2 million through a combination of either equity issues at an average issue price at
least 75% of the 15-day VWAP prior to each issue and/or proceeds from asset sales (or farm-out joint ventures).
5.
Total shareholder return over any 12-month period exceeding +25%.
6. Continue to be an employee or Director of AMD until 31 December 2019.
Of the above 6 milestones, the achievement of 4 will vest 100% of the shares, with 25% of the shares vesting on the
achievement of each milestone.
On 22 November 2018, an additional issue was made of 9,000,000 Plan Shares to Messrs Michael, Tabeart and Ong.
These shares have been valued using the Black-Scholes option pricing model, with the following inputs for the relevant
milestones.
Number of shares
Underlying share price
Exercise price
Expected volatility
Expiry date (years)
Expected dividends
Risk-free rate
Value per option
Milestones 1-5
6,750,000
Milestone 6
2,250,000
$0.015
$0.015
86%
3
-
2.12%
$0.0083
$0.015
$0.015
86%
1
-
2.12%
$0.0053
Share holdings (incl. Plan Shares)
The number of ordinary shares in the Company held during the financial year by each Director of Arrow and any other
key management personnel of the Company, including their personally related parties, are set out below:
Opening
Balance
No.
Granted as
remuneration1
No.
Net other
change
No.
Closing
balance
No.
30 June 2019
S Michael
F Tabeart
N Ong
M Foy
J Owen
D Tuck
Total
30 June 2018
S Michael
F Tabeart
N Ong
M Foy
D Tuck
Total
MD & CEO
Non-Exec. Chairman
Non-Exec. Director
Company Secretary
4,644,284
1,591,964
1,420,536
1,771,252
Chief Financial Officer
-
Exploration Manager
3,047,115
MD & CEO
Non-Exec. Director
Non-Exec. Director
Company Secretary
Exploration Manager
12,475,151
2,515,713
1,500,000
1,192,857
1,117,701
1,410,107
7,736,378
4,000,000
400,000
400,000
800,000
300,000
1,250,000
7,150,000
2,000,000
375,000
375,000
500,000
1,500,000
4,750,000
292,8582
(464,285)3
(214,286)3
(200,000)3
-
(4,297,115)4
8,937,142
1,527,679
1,606,250
2,371,252
300,000
-
(4,882,828)
14,742,323
(128,571)5
(280,036)3
(147,321)3
153,5516
137,0087
4,644,284
1,591,964
1,420,536
1,771,252
3,047,115
(268,369)
12,475,151
Arrow Minerals Limited
2019 Annual Report
Page 21
1. Subject to meeting vesting conditions, which remained unvested.
2. Comprising:
a. Cancellation of 557,142 Employee Share Plan Shares following expiration of term; and
b. Purchase of 850,000 shares on market.
3. Comprising the cancellation of Employee Share Plan Shares following expiration of term.
4. Comprising:
a. Sale of 979,259 shares on market; and
b. 3,317,856 included as net other change as Dean Tuck resigned from his position of Exploration Manager on 28 February 2019.
5. Comprising:
a. Cancellation of 371,429 Employee Share Plan Shares following expiration of term; and
b. Purchase of 500,000 shares @3.0¢ pursuant to Share Purchase Plan on 31 July 2019.
6. Comprising:
a. Purchase of 35,000 shares pursuant to placement @3.0¢;
b. Purchase of 107,150 shares on market;
c. Purchase of 344,829 shares pursuant to placement @2.9¢;
d. Sale of 237,000 shares on market; and
e. Cancellation of 96,428 Employee Share Plan Shares following expiration of term.
7. Comprising:
a. Purchase of 283,333 shares pursuant to placement @3.0¢;
b. Sale of 93,000 shares on market;
c. Purchase of 93,104 shares pursuant to placement @2.9¢; and
d. Cancellation of 146,429 Employee Share Plan Shares following expiration of term.
Option holdings
The number of options in the Company held during the financial period by each Director of Arrow Minerals Limited
and any other key management personnel of the Company, including their personally related parties, are set out
below:
Opening
Balance
No.
Granted as
Options
remuneration exercised
No.
No.
Net other
change1
No.
Closing
balance
No.
Vested and
exercisable
No.
30 June 2019
S Michael MD & CEO
653,572
F Tabeart Non-Exec. Chairman
375,000
N Ong
M Foy
J Owen
D Tuck
Total
Non-Exec. Director
298,215
Company Secretary
693,407
Chief Financial Officer
-
Exploration Manager
803,201
2,823,395
30 June 2018
S Michael MD & CEO
F Tabeart Non-Exec. Director
N Ong
M Foy
D Tuck
Total
Non-Exec. Director
Company Secretary
Exploration Manager
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(803,201)2
653,572
375,000
298,215
693,407
-
-
653,572
375,000
298,215
693,407
-
-
(803,201)
2,020,194
2,020,194
653,572
375,000
298,215
693,407
803,201
653,572
653,572
375,000
298,215
693,407
803,201
375,000
298,215
693,407
803,201
- 2,823,395
2,823,395
2,823,395
1. Purchased pursuant to a pro-rata non-renounceable options entitlement issue, exercisable at 10¢ on or before 31 December 2019.
2. 803,201 included as net other change as Dean Tuck resigned from his position of Exploration Manager on 28 February 2019.
Page 22
2019 Annual Report
Arrow Minerals Limited
Service Agreements
As at the date of this report, the Company had service agreements with the following key management personnel:
Frazer Tabeart – Non-executive Chairman
Non-executive Directors' fees and payments are reviewed annually by the Board. For the year ended 30 June 2019,
remuneration for Dr Tabeart was $36,000 per annum exclusive of superannuation and GST. There are no termination
or retirement benefits paid to non-executive Directors (other than statutory superannuation). A Director may also be
paid fees or other amounts as the Directors determine, if a Director performs special duties or otherwise performs
duties outside the scope of the normal duties of a Director. A Director may also be reimbursed for out of pocket
expenses incurred as a result of their directorship or any special duties.
Non-executive Directors are able to participate in the employee share loan plan. In addition, in order to align their
interests with those of shareholders, the non-executive Directors are encouraged to hold shares in the Company.
Nicholas Ong – Non-executive Director
Non-executive Directors' fees and payments are reviewed annually by the Board. For the year ended 30 June 2019,
remuneration Mr Ong was $36,000 per annum exclusive of superannuation and GST. There are no termination or
retirement benefits paid to non-executive Directors (other than statutory superannuation). A Director may also be
paid fees or other amounts as the Directors determine, if a Director performs special duties or otherwise performs
duties outside the scope of the normal duties of a Director. A Director may also be reimbursed for out of pocket
expenses incurred as a result of their directorship or any special duties.
Non-executive Directors are able to participate in the employee share loan plan. In addition, in order to align their
interests with those of shareholders, the non-executive Directors are encouraged to hold shares in the Company.
Howard Golden – Chief Executive Officer
Commenced on 26 August 2019 with no set term. If the Company wishes to terminate the contract, other than if
Mr Golden commits any act of serious misconduct, the Company is obliged to give three months’ written notice or
pay out three months’ of annual salary and pay a termination payment equivalent to three months’ annual salary. If
Mr Golden wishes to terminate the contract he must provide three months’ notice. Mr Golden will be paid a fee of
$250,000 per annum (excluding compulsory superannuation) for his services as Chief Executive Officer.
Steven Michael – Executive Director (previously Managing Director)
Commenced on 6 July 2011 with no set term. If the Company wishes to terminate the contract, other than if Mr
Michael commits any act of serious misconduct, the Company is obliged to give three months’ written notice or pay
out three months annual salary and pay a termination payment equivalent of three months’ annual salary. If Mr
Michael wishes to terminate the contract, he must provide three months’ notice. Mr Michael was paid a fee of $25,000
per month (excluding compulsory superannuation) for his services as Managing Director and CEO.
Subsequent to year end, Mr Michael’s employment as Managing Director was terminated. Mr Michael will continue
as an Executive Director. Mr Michael qualified for genuine redundancy under TR 2009/2 and received a statutory
redundancy payment and a termination payment as stipulated within the service agreements disclosed above.
Mr Michael entered into a service agreement for his position as an Executive Director such that; if the Company wishes
to terminate the contract, other than if Mr Michael commits any act of serious misconduct, the Company is obliged
to give one month’s written notice or pay out one months’ of Annual Salary. If Mr Michael wishes to terminate the
contract he must provide one month’s notice. Mr Michael will be paid a fee of $250,000 per annum (excluding
compulsory superannuation) for his services as Executive Director.
Matthew Foy
Commenced on 12 July 2011 with no set term. If the Company wishes to terminate the contract, other than if Mr Foy
commits any act of serious misconduct, the Company is obliged to give three months’ written notice or pay out three
months of annual salary and pay a termination payment equivalent of three months’ annual salary. If Mr Foy wishes
to terminate the contract, he must provide three months’ notice. Subsequent to the period on 30 August 2019, the
Company provided notice to Mr Foy that it will terminate his employment by giving Mr Foy three months’ notice.
Subsequent to year end, Mr Foy’s employment as Company Secretary was terminated. Mr Foy qualified for genuine
redundancy under TR 2009/2 and received a statutory redundancy payment and a termination payment as stipulated
within the service agreements disclosed above.
Arrow Minerals Limited
2019 Annual Report
Page 23
Jenine Owen – Chief Financial Officer
Commenced on 30 July 2018 with no set term. If the Company wishes to terminate the contract, other than if Ms
Owen commits any act of serious misconduct, the Company is obliged to give six months’ written notice or pay out
six months annual salary. Ms Owen may elect within three months of the written notice being provided to have the
final three months’ notice period to be paid as a termination payment equivalent to three months annual salary by
giving written notice to this effect. If Ms Owen wishes to terminate the contract, she must provide three months’
notice. Ms Owen will be paid a fee of $9,333 per month (excluding compulsory superannuation) for her services as
Chief Financial Officer.
Transactions with key management personnel
The Company entered into a service agreement with Minerva Corporate Pty Ltd effective 2 April 2014 for the provision
of Directorial and Company Secretarial services. Messrs Ong & Foy are related parties of Minerva Corporate Pty Ltd
and Arrow.
This service agreement was amended in August 2014 to exclude Company Secretarial services.
During the year, an amount of $43,722 (2018: $33,387) inclusive of GST was paid or payable in relation to these
services.
All of the Director fees for Mr Ong were remitted to Minerva Corporate Pty Ltd during the current and prior year.
Mr Foy will continue to provide Company Secretarial services as an employee of Arrow until the expiry of his notice
period, being 30th November 2019.
Dr Tabeart’s remuneration for the year was paid directly to his related party, Geogen Consulting Pty Ltd. During the
year, an additional $10,120 (2018: $1,200) was paid to Geogen Consulting Pty Ltd for consulting services.
The Company entered into a service agreement with Mitchell River Group Pty Ltd effective 6 July 2016 for the provision
of exploration database management services. Dr Tabeart is a related party of Mitchell River Group Pty Ltd and Arrow.
During the year, an amount of $44,649 (2018: $25,990) inclusive of GST was paid or payable in relation to these
services.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties.
Other Financial Information
The following table shows gross income, losses and dividends for the last five years for the listed entity, as well as the
share prices at the end of the respective financial years.
Revenue
Net loss before tax
Net loss after tax
Share price at start of year (cents)
Share price at end of year (cents)
30 June
2019
$
35,503
3,909,752
3,909,752
2.5
1.1
30 June
20181
$
7,462
685,532
550,628
2.6
2.5
30 June
2017
$
10,999
887,642
887,642
0.3
2.62
30 June
2016
$
10,250
794,509
794,509
0.2
0.3
30 June
2015
$
9,040
2,438,493
2,438,493
1.0
0.2
Basic and diluted (loss) per share (cents)
(1.256)
(0.270)
(0.867)
(0.03)
(0.12)
1. Refer Note 2 of the Financial Statements for restatement of prior period balances.
2. Note that on 13 April 2017 there was a 1 for 35 share consolidation.
Adoption of Remuneration Report by Shareholders
The adoption of the Remuneration Report for the financial year ended 30 June 2018 was put to the shareholders of
the Company at the Annual General Meeting held 22 November 2018 (AGM). The resolution was passed without
amendment on a show of hands (86.1% of proxies voted in favour). The Company did not receive any specific feedback
at the AGM or throughout the year on its remuneration practices.
End of Remuneration Report
Page 24
2019 Annual Report
Arrow Minerals Limited
Directors’ Interests in the Shares and Options of the Company
As at the date of this report, the relevant direct and indirect interest of each director in the shares and options of
Arrow Minerals Limited were:
Dr Frazer Tabeart
Mr Steven Michael
Mr Tommy McKeith1
Mr Morgan Ball
Ordinary shares
Options
Performance Rights
No.
3,027,679
9,687,142
69,151,050
1,916,667
No.
375,000
653,572
No.
-
-
1,000,000
209,046,880
-
-
1. Mr McKeith is a Director of GenGold Resource Capital Pty Ltd which owns 61,484,380 ordinary shares and 209,046,880 Performance
Rights.
Shares under Options
No options were exercised during the 2019 financial year and no shares have been issued from the exercise of options
since year-end to the date of this report. No person entitled to exercise any option has or had, by virtue of the option,
a right to participate in any share issue of any other body corporate. The names of all holders of options are entered
into the Company’s register, inspection of which may be made free of charge.
The following options over ordinary shares of the Company existed at reporting date:
Expiry date
31 December 2019
31 December 2019
22 August 2022
22 August 2023
1. These options are unlisted.
2. These options are listed.
Meetings of Directors
No.
Exercise price
13,146,469
120,872,133
120,150,000
37,500,000
291,668,602
7.0¢1
10.0¢2
2.0¢1
1.45¢1
The following directors’ meetings (including meetings of committees of directors) were held during the year and the
number of meetings attended by each of the directors during the year were:
Director’s meetings
Remuneration Committee
Audit Committee
eligible
to attend
meetings
attended
eligible
to attend
meetings
attended
eligible
to attend
meetings
attended
Steven Michael
Nicholas Ong
Frazer Tabeart
4
4
4
4
4
4
-
1
1
-
1
1
-
1
1
-
1
1
Officers’ and Auditor Indemnities and Insurance
During the year, the Company paid an insurance premium to insure certain officers of the Company. The officers of
the Company 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 Company or a related body corporate.
The insurance policy does not contain details of the premium paid in respect of individual officers of the Company.
Disclosure of the nature of the liability cover and the premium paid is subject to a confidentiality clause under the
insurance policy.
The Company has entered into an agreement with the Directors and certain officers to indemnify these individuals
against any claims and related expenses which arise as a result of work completed in their respective capabilities.
Arrow Minerals Limited
2019 Annual Report
Page 25
The Company nor any of its related bodies corporate have provided any insurance for any auditor of the Company or
a related body corporate.
Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or Group are important.
Details of the amount paid or payable to the auditor (Pitchers Partners BA&A Pty Ltd) or its associates for the audit
and non-audit services provided during the year are set out in Note 3 to this report.
The Directors are satisfied that the provision of the non-audit services during the year by the auditor is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are
satisfied that the services disclosed below did not compromise the external auditor’s independence for the following
reasons:
All non-audit services are reviewed and approved by the audit committee prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the auditor; and
The nature of the services provided does not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants.
Rounding of amounts
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in
the Directors’ report and in the financial report have been rounded to the nearest dollar.
Auditor’s Independence Declaration
We have obtained an independence declaration from our auditors which is included on page 28.
Signed in accordance with a resolution of the directors
Steven Michael
Executive Director
Perth, 24 September 2019
Page 26
2019 Annual Report
Arrow Minerals Limited
Corporate Governance Statement
The Board of Directors of Arrow is responsible for the corporate governance of the consolidated entity. The Board
guides and monitors the business and affairs of Arrow on behalf of the shareholders by whom they are elected and
to whom they are accountable.
Arrow’s corporate governance practices were in place throughout the year ended 30 June 2019 and were compliant
with the ASX Governing Council’s best practice recommendations, unless otherwise stated.
Information on Corporate Governance is available on the Company’s website at:
https://arrowminerals.com.au/corporate-governance/
Arrow Minerals Limited
2019 Annual Report
Page 27
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF ARROW MINERALS LIMITED
In relation to the independent audit for the year ended 30 June 2019, to the best of my
knowledge and belief there have been:
(i)
No contraventions of the auditor independence requirements of the Corporations Act
2001; and
(ii)
No contraventions of APES 110 Code of Ethics for Professional Accountants.
This declaration is in respect of Arrow Minerals Limited and the entities it controlled during the
year.
PITCHER PARTNERS BA&A PTY LTD
JOANNE PALMER
Executive Director
Perth, 24 September 2019
Pitcher Partners BA&A Pty Ltd
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2019
Notes
6b
6c
3
10
3
4
Continuing Operations
Interest income
Gain on disposal of associate
Gain on disposal of controlling interest
Profit/(loss) on sale of financial assets
Net gain/(loss) on financial assets measured at fair value
through profit or loss
Profit on sale of tenements
Employee benefits expenses
Occupancy costs
Write off of exploration and evaluation assets
Finance costs
Depreciation
Share based payment expenses
Administration and other expenses
Loss before tax from operations
Income tax benefit
Loss after tax from operations
Other comprehensive income/(loss)
Items that may be classified subsequently to profit or loss
Movement in foreign currently translation reserve
Other comprehensive income/(loss) for the year
2019
$
35,503
1,284,068
Restated^
2018
$
7,462
-
-
1,284,971
(535,798)
-
(1,035,736)
233,956
(690,251)
(70,062)
844,590
387,300
(551,892)
(28,953)
(2,625,876)
(1,767,288)
(10,585)
(92,812)
(137,406)
(264,753)
(3,909,752)
-
(3,909,752)
(9,297)
(37,826)
(400,286)
(414,313)
(685,532)
134,904
(550,628)
-
-
-
-
Total comprehensive loss for the year attributable to members of the company
(3,909,752)
(550,628)
Basic and diluted loss per share
16
Cents
(1.256)
Cents
(0.270)
The above statement should be read in conjunction with the accompanying notes.
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments disclosed
in Note 2.
Arrow Minerals Limited
2019 Annual Report
Page 29
Consolidated Statement of Financial Position
As at 30 June 2019
Notes
2019
$
ASSETS
Current assets
Cash and cash equivalents
Investments in associates
Other financial assets
Trade and other receivables
Prepayments
Total current assets
Non-current assets
Exploration and evaluation assets
Property, plant and equipment
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Leave provisions
Interest bearing liabilities
Total current liabilities
Non-current liabilities
Leave provisions
Interest bearing liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
5
6
7
8
9
10
11
12
13
13
14
15
Restated^
2018
$
3,758,484
738,201
1,325,200
195,266
9,911
753,368
-
566,283
70,614
186,405
1,576,670
6,027,062
8,550,831
211,174
8,762,005
8,041,647
301,077
8,342,724
10,338,675
14,369,786
119,228
101,030
30,705
250,963
-
91,050
91,050
342,106
73,575
28,423
444,104
34,920
121,754
156,674
342,013
600,778
9,996,662
13,769,008
35,136,180
2,003,514
35,136,180
1,865,958
(27,143,032)
(23,233,130)
9,996,662
13,769,008
The above statement should be read in conjunction with the accompanying notes.
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments disclosed
in Note 2.
Page 30
2019 Annual Report
Arrow Minerals Limited
Consolidated Statement of Changes in Equity
As at 30 June 2019
Issued
capital
$
Share
based
payment
reserve
$
Option
reserve
Available
for sale
reserve
$
$
losses
Foreign Accumulated
currency
translation
reserve
$
$
Total
equity
$
Restated at 1 July 2017^ 30,404,876
1,419,365
91,257
(150)
(476,281) (22,682,502)
8,756,565
Loss after tax for the year
Other comprehensive loss
Total comprehensive loss
-
-
-
Issue of Shares
(net of costs)
Issue of Options
(net of costs)
Share based payments
Total transactions with
equity holders
4,731,304
-
-
-
-
-
-
-
-
-
-
-
431,481
400,286
-
4,731,304
400,286
431,481
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(550,628)
(550,628)
-
-
(550,628)
(550,628)
-
4,731,304
-
-
431,481
400,286
-
5,563,071
Restated at 30 June 2018 31,136,180
1,819,651
522,738
(150)
(476,281) (23,233,130) 13,769,008
At 1 July 2018
31,136,180
1,568,625
522,738
(150)
(476,281) (23,773,852) 12,977,260
Net effect of restatement
-
251,026
-
-
-
540,722
791,748
Restated at 1 July 2018
35,136,180
1,819,651
522,738
(150)
(476,281) (23,233,130) 13,769,008
Loss after tax for the year
Other comprehensive loss
Total comprehensive loss
Issue of Shares
(net of costs)
Issue of Options
(net of costs)
Share based payments
Total transactions with
equity holders
Transfer in reserves
-
-
-
-
-
-
-
-
-
-
-
-
-
137,406
137,406
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150
-
-
-
-
-
-
-
-
(3,909,752)
(3,909,752)
-
-
(3,909,752)
(3,909,752)
-
-
-
-
-
-
137,406
137,406
(150)
-
As at 30 June 2019
35,136,180
1,957,057
522,738
-
(476,281) (27,143,032) 9,996,662
The above statement should be read in conjunction with the accompanying notes.
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments disclosed
in Note 2.
Arrow Minerals Limited
2019 Annual Report
Page 31
Consolidated Statement of Cash Flows
For the year ended 30 June 2019
Notes
2019
$
2018
$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
(1,243,146)
(1,033,289)
Interest income received
Income tax refund
35,503
-
7,462
134,904
Net cash used in operating activities
5a
(1,207,643)
(890,923)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of associate, net of costs
Proceeds from the sale of controlling interest
Proceeds from the sale of tenements
Proceeds from sale of shares
6b
6c
1,046,971
-
333,956
162,680
-
309,000
1,625,000
-
Payment for exploration and evaluation activities
(3,135,060)
(2,966,965)
Payment for pre-acquisition costs
Payment for property, plant and equipment
(164,103)
(2,910)
-
(155,303)
Net cash used in investing activities
(1,758,466)
(1,188,268)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options, net of issue costs
-
5,142,784
Repayment of lease liabilities
Interest paid
Net cash (used)/from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(28,423)
(10,585)
(39,007)
(3,005,116)
3,758,484
(27,528)
(9,297)
5,105,959
3,026,768
731,716
Cash and cash equivalents at the end of the year
5
753,368
3,758,484
The above statement should be read in conjunction with the accompanying notes.
Page 32
2019 Annual Report
Arrow Minerals Limited
Notes to and forming part of the Consolidated Financial Statements
1. CORPORATE INFORMATION
Arrow Minerals Limited (the Company) is a limited company incorporated in Australia. The consolidated financial
report of the Company for the year ended 30 June 2019 comprises the Company and its subsidiaries (together referred
to as the Group).
The financial report was authorised for issue by the directors on 24 September 2019.
The nature of the operation and principal activities of the Group are described in the attached Directors’ Report.
The accounting policies set out below have been applied consistently to all periods presented in the consolidated
financial report and by all entities in the consolidated entity.
A. Statement of Accounting Policies
These for-profit general purpose financial statements have been prepared in accordance with Australian Accounting
Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting
Interpretations and the Corporations Act 2001.
Compliance with IFRS
The consolidated financial statements of the Group also comply with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB).
Basis of Preparation
Historical cost convention
These financial statements have been prepared on an accruals basis and are based on historical costs except where
stated otherwise in the notes. Cost is based on the fair values of the consideration given in exchange for assets.
Going Concern
The financial report has been prepared on a going concern basis.
The Consolidated Statement of Cash Flows shows that the Group had net cash used in operating activities of $1,207,643
(2018: $890,923) and net cash used in investing activities of $1,758,466 (2018: $1,188,268). The Consolidated Statement
of Financial Position shows that the Group had cash and cash equivalents of $753,368 (2018: $3,758,484).
The Directors are confident that the Group will be able to continue as a going concern and meet its current liabilities
as and when they fall due.
In making this assessment, the Directors had regard to the ability of the Group to successfully raise capital, as well as
the following matters should the need arise:
Deferring or reducing the Group’s exploration and evaluation expenditure, while still meeting minimum
exploration commitments (incl. the Group’s subsequently acquired projects in Burkina Faso three-year
minimum expenditure commitments of $1,327,544) until the Group completes a capital raising;
Reducing the Group’s tenement footprint to focus on the most prospective tenures;
Disposal of the Group’s remaining option holding in Pacton or sale of other non-core assets; and/or
Converting the Group’s 10% interest in the Plumridge joint venture to a net royalty interest.
The Directors note that subsequent to year end, as disclosed within Note 18, the Group successfully raised $2,102,959in
equity capital through the issue of ordinary shares and options.
On this basis no adjustments have been made to the financial report relating to the recoverability and classification
of the carrying amount of assets or the amount and classification of liabilities that might be necessary should the
Group not continue as a going concern. Accordingly, the financial report has been prepared on a going concern basis.
Should the Group be unable to raise further debt or capital with the initiatives detailed above then, the Group may in
the future not be able to continue as a going concern and may therefore be required to realise assets and extinguish
liabilities other than in the ordinary course of business with the amount realised being difference from those shown
in the financial statements.
Arrow Minerals Limited
2019 Annual Report
Page 33
B. Functional and Presentation of Currency
These consolidated financial statements are presented in Australian dollars, which is the Group’s functional currency
and the presentation currency of the Group.
Translation of foreign operations:
As at the reporting date the assets and liabilities of foreign operations are translated into the presentation currency
at the rate of exchange ruling at the reporting date and the statement of comprehensive income, statement cash flows
and statement of changes in equity are translated at the weighted average exchange rates for the year. The exchange
differences arising on the retranslation are recognised in other comprehensive income and accumulated balances are
carried forward as a separate component of equity. On disposal of a foreign operation, the deferred cumulative
amount recognised in equity relating to that particular foreign operation is recognised in the income statement.
C. Use of Estimates and Judgements
The preparation of financial statements require management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, 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 if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both current and future periods.
Significant accounting judgments
In the process of applying the Group’s accounting policies, management has made the following judgments, apart
from those involving estimations, which have the most significant effect on the amounts recognised in the financial
statements.
Exploration and evaluation assets
The Group’s accounting policy for exploration and evaluation expenditure is set out at Note 1(M). The application of
this policy necessarily requires management to make certain estimates and assumptions as to future events and
circumstances. Any such estimates and assumptions may change as new information becomes available. If, after
having capitalised expenditure under the policy, it is concluded that the expenditures are unlikely to be recovered by
future exploitation or sale, then the relevant capitalised amount will be written off to the profit or loss.
Share based payments (refer Note 21)
The Group measures the cost of equity settled share based payments at fair value at the grant date using the Black-
Scholes option pricing model taking into account the exercise price, the term of the option, the impact of dilution, the
share price at grant date, the expected volatility of the underlying share, the expected dividend yield and risk free
interest rate for the term of the option.
Existence of significant influence
Through the shareholder agreement, Arrow Minerals Limited was guaranteed one seat on the board of Arrow (Pilbara)
Pty Ltd and participated in all significant financial and operating decisions. At 30 June 2018, and to date of sale of
associate, the Group therefore determined that it had significant influence over this entity, through holding 49% of
the voting rights.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of certain assets and liabilities within the next annual reporting period are:
(i)
Impairment of assets
In determining the recoverable amount of assets, in the absence of quoted market prices, estimations are made
regarding the present value of future cash flows using asset-specific discount rates and the recoverable amount of the
asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of
key estimates.
(ii) Commitments - Exploration
The Group has certain minimum exploration commitments to maintain its right of tenure to exploration permits. These
commitments require estimates of the cost to perform exploration work required under these permits.
Page 34
2019 Annual Report
Arrow Minerals Limited
(iii) Benefit from carried forward tax losses
The future recoverability of the carried forward tax losses are dependent upon Group’s ability to generate taxable
profits in the future in the same tax jurisdiction in which the losses arise. This is also subject to determinations and
assessments made by the taxation authorities. The recognition of a deferred tax asset on carried forward tax losses
(in excess of taxable temporary differences) is dependent on management’s assessment of these two factors. The
ultimate recoupment and the benefit of these tax losses could differ materially from management’s assessment.
D. Basis of Consolidation
The consolidated financial statements are those of the Group, comprising the financial statements of Arrow “the parent
entity” and of all entities which the parent entity controls. The Group controls an entity when it is exposed, or has
rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using
consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies, which may
exist.
Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions
are eliminated in preparing the consolidated financial statements. Subsidiaries are eliminated from the date on which
control is established and are de-recognised from the date that control ceases.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence
of impairment.
E. Revenue Recognition
The following specific recognition criteria must be met before revenue is recognised:
Interest income is recognised as it accrues using the effective interest method.
Income Tax
F.
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on
the notional income tax rate for each jurisdiction 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 or substantively enacted
for each jurisdiction. 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 tax asset or liability is recognised in relation
to these 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.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in
equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
Arrow Minerals Limited
2019 Annual Report
Page 35
G. Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities on the consolidated statement of financial position.
H. Trade and Other Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for
expected credit losses. Trade receivables are due for settlement no more than 120 days from the date of recognition.
The Group applies the AASB 9 simplified approach to measure expected credit losses which uses a lifetime expected
loss allowance for all trade receivables.
To measure the expected credit trade receivables have been grouped based on shared credit risk characteristics and
the days past due. The expected loss rates are based on the Group’s past history, existing market conditions and
forward-looking estimates at the end of each reporting period.
Investments and Other Financial Assets
I.
The Group determines the classification of its financial instruments at initial recognition and carries its financial
instruments at fair value. Financial assets and financial liabilities are recognised when the entity becomes a party to
the contractual provisions to the instrument. For financial assets, this is the equivalent to the date that the entity
commits itself to either the purchase or sale of the asset.
Fair value is the measurement basis, with the exception of loans and receivables which are measured at amortised cost
using the effective rate method. Changes in fair value are taken to the profit or loss.
Fair value is determined based on current bid prices for all quoted investments. If there is not an active market for a
financial asset fair value is measured using established valuation techniques.
The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial
assets are impaired. In the case of equity securities, a significant or prolonged decline in the fair value of a security
below its cost is considered in determining whether the security is impaired. If any such evidence exists, the loss
recognised in the profit or loss.
Investments in Associates
J.
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate
in the financial and operating policy decisions of the entity but is not control or joint control of those policies.
Investments in associates are accounted for in the consolidated financial statements by applying the equity method
of accounting, whereby the investment is initially recognised at cost (including transaction costs) and adjusted
thereafter for the post-acquisition change in the Group’s share of net assets of the associate. In addition, the Group’s
share of the profit or loss of the associate is included in the Group’s profit or loss.
The carrying amount of the investment includes, when applicable, goodwill relating to the associate. Any discount on
acquisition, whereby the Group’s share of the net fair value of the associate exceeds the cost of investment, is
recognised in profit or loss in the period in which the investment is acquired.
Profits and losses resulting from transactions between the Group and the associate are eliminated to the extent of the
Group’s interest in the associate.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues
recognising its share of further losses unless it has incurred legal or constructive obligations or made payment on
behalf of the associate. When the associate subsequently makes profits, the Group will resume recognising its share
of those profits once its share of the profits equals the share of the losses not recognised.
Changes in Ownership Interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts
of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid or received is
recognised in a separate reserve within equity attributable to owners of Arrow Minerals Limited.
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2019 Annual Report
Arrow Minerals Limited
When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control
or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying
amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the
group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in
other comprehensive income are reclassified to profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is
retained, only a proportionate share of the amounts previously recognised in other comprehensive income are
reclassified to profit or loss where appropriate.
Interest in Joint Arrangements
K.
Joint arrangements represent the contractual sharing of control between parties in a business venture where
unanimous decisions about relevant activities are required.
Separate joint venture entities providing joint ventures with an interest to net assets are classified as a joint venture
and accounted for using the equity method.
Joint operations represent arrangements whereby joint operators maintain direct interests in each asset and exposure
to each liability of the arrangement. The Group’s interests in assets, liabilities, revenue and expenses of joint operations
are included in the respective line items of the consolidated financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties’ interests.
When the Group makes purchases from a joint operation, it does not recognise its share of the gains and losses from
the joint arrangement until it resells those goods/assets to a third party. The Plumridge joint venture agreement with
IGO is accounted for on this basis.
L. Property, Plant and Equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. The cost of
self-constructed assets includes the cost of materials, direct labour, the initial estimate, where relevant, of the costs of
dismantling and removing the items and restoring the site on which they are located, and an appropriate proportion
of production overheads. Where parts of an item of property, plant and equipment have different useful lives, they
are accounted for as separate items of property, plant and equipment.
Subsequent Costs
The Group recognises in the carrying amount of an item of Property, plant and equipment the cost of replacing part
of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the
item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the
statement of comprehensive income as an expense as incurred.
Depreciation
Depreciation is charged to the profit or loss on a straight-line or diminishing value basis over the estimated useful
lives of each part of an item of property, plant and equipment. The estimated useful lives in the current and
comparative periods are as follows:
Plant and equipment
Motor vehicles
straight-line
straight-line
over 3 to 10 years
over 4 years
The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually.
De-recognition
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the item) is included in the profit or loss in the period the item is derecognised.
M. Exploration and Evaluation Expenditure
Exploration and evaluation expenditure, including the costs of acquiring the licences, are capitalised as exploration and
evaluation assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights to explore
an area are recognised in the profit or loss.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
Arrow Minerals Limited
2019 Annual Report
Page 37
1.
2.
the expenditures are expected to be recouped through successful development and exploitation or from sale of
the area of interest; or
activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical
feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the
recoverable amount. For the purposes 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 reclassified to mining property and development assets within property, plant and equipment.
When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in
respect of that area are written off in the financial period the decision is made.
Impairment of Non-financial Assets
N.
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows
(cash generating units).
O. Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
P. Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at the lease's inception at the fair value of
the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental
obligations, net of finance charges, are included in other short-term and long-term payables.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for
each period. The property, plant and equipment acquired under finance leases is depreciated over the asset's useful
life or over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the group
will obtain ownership at the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee
are classified as operating leases. Payments made under operating leases (net of any incentives received from the
lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
Q. Contributed Equity
Ordinary shares are classified as equity.
Plan Shares issued under the ESP are treated as equity and not separately classified in reserves.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
R. Goods and Service Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
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2019 Annual Report
Arrow Minerals Limited
Where the GST incurred on the purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
Receivable and payable are stated with the amount of GST included.
The amount of GST recoverable from the taxation authority is included as part of the receivables in the Statement of
financial position. The amount of GST payable to the taxation authority is included as part of the payables in the
Statement of financial position.
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis and the GST component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation
authority, are classified as operating cash flows.
S. Share Based Payments
Equity-settled share-based payments, included Employee Share Plan, with employees and others providing similar
services are measured at the fair value of the equity instrument at the grant date. Fair value of shares is measured by
reference to the quoted market price. Fair value of options is measured by use of valuation techniques. The expected
life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,
exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate of shares that will eventually vest, with a corresponding
increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or
loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity
settled employee benefits reserve.
T. Earnings per Share
Basic Earnings per Share – is calculated by dividing the profit attributable to equity holders of the company, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during the period.
Diluted Earnings per Share – adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
U. Rounding
The Company has applied the relief available to it in ASIC Legislative Instrument 2016/191 and accordingly, certain
amounts included in the Directors’ report and in the financial report have been rounded off to the nearest $1 (where
rounding is applicable), under the option available to the Company under ASIC Corporations.
V. New standards and Interpretations
The Group has adopted all the new and revised Standards and Interpretations issued by the Australian Accounting
Standard Board (“AASB”) that are relevant to their operations and effective for the current reporting period. The
adoption of all the new and revised Standards and Interpretations has not resulted in any material impacts on the
amounts reported for the current or prior periods. The accounting policies have been consistently applied by the
Group and are consistent with those applied in the previous financial year and those of the corresponding interim
reporting period, except for the accounting policies described below.
AASB 9 ‘Financial Instruments’
AASB 9 supersedes pronouncement AASB 139 ‘Financial Instruments: Recognition and Measurement’ and was adopted
by the Group effective 1 July 2018. The standard brings together all three aspects of the accounting for financial
instruments: classification and measurement, impairment; and hedge accounting.
With the exception of hedge accounting which has no application to the Group so it will apply prospectively should
it enter into any such arrangements, the Group has applied AASB 9 retrospectively, with the initial application date of
1 July 2018.
Arrow Minerals Limited
2019 Annual Report
Page 39
At the date of initial application, the Group concluded to:
Classify eligible equity instruments as financial assets at fair value through profit and loss; and
Apply the simplified approach for trade receivables in the calculation of the expected credit loss (ECL) rather than
the general approach.
As a result of the adoption of the above, as at the date of initial application, there is no material impact on the
transactions and balances recognised in the financial statements.
The Group’s accounting policy for financial instruments from 1 July 2018 are as follows:
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), or fair value through profit and loss.
The classification of financial instruments at initial recognition depends on the financial asset’s contractual cashflow
characteristics and the Group’s business model for managing them. Except for the Groups trade receivables that do
not contain a significant financing component, the Group initially measures the financial asset at its fair value plus, in
the case of a financial asset not at fair value through profit and loss, less transaction costs.
Trade receivables that do not contain a significant financing component are measured at the transaction price
determined in accordance with the company’s accounting policy for revenue recognition.
For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track
changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. In
determining the provision required, the Group utilises its historical credit loss experience, adjusted only where
appropriate for forward-looking factors specific to the debtors and economic environment.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain
cases, the Group may also consider a financial asset to be in default when internal or external information indicates
that the Group is unlikely to receive the outstanding contractual amounts in full before considering any credit
enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to
engage in a repayment plan with the Group, and a failure to make contractual payments for a period of greater than
120 days past due.
Financial liabilities are classified, at initial recognition, as financial liabilities through fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables.
AASB 15 ‘Revenue from Contracts with Customers’
AASB 15 supersedes AASB 111 Construction Contracts, AASB 118 Revenue and related interpretations and it applies
with limited exceptions, to all revenue arising from contracts with its customers. AASB 15 establishes a five-step model
to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount
that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services
to a customer.
AASB 15 requires the Group to exercise judgement, considering all the relevant facts and circumstances when applying
each step of the model to contracts with customers.
The Group adopted AASB 15 using the full retrospective method of adoption. The effect of the transition on the
current period has not been disclosed as the standard provides an optional practical expedient, however the impact
on the current period is immaterial. The Group did not apply any of the other available optional practical expedients.
At the initial date of application, the effect of adopting AASB 15 did not have a material impact on the transactions
and balances recognised in the financial statements.
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2019 Annual Report
Arrow Minerals Limited
Other amendments and interpretations apply for the first time at 1 July 2018, but do not have an impact on the
consolidated financial statements of the Group. The Group has not early adopted any standards, interpretations or
amendments that have been issued but are not yet effective.W. New Standards and Interpretations Not Yet Adopted
Pronouncement
AASB 16 Leases
AASB 2014-10:
Amendments to
Australian Accounting
Standards – Sale or
Contribution of Assets
between an Investor
and its Associate or
Joint Venture, AASB
2015-10: Amendments
to Australian
Accounting Standards
– Effective Date of
Amendments to AASB
10 and AASB 128 and
AASB 2017-5:
Amendments to
Australian Accounting
Standards – Effective
Date of Amendments
to AASB 10 and AASB
128 and Editorial
Corrections
AASB 2017-4:
Amendments to
Australian Accounting
Effective Date
1 January 2019
1 January 2022
Nature of Change
AASB 16 requires lessees to account for all leases under a single
on balance sheet model in a similar way to finance leases under
AASB 117 Leases. The standard includes two recognition
exemptions for lessees – leases of ’low-value’ assets (e.g., personal
computers) and short-term leases (i.e., leases with a lease term of
12 months or less). At the commencement date of a lease, a lessee
will recognise a liability to make lease payments (i.e., the lease
liability) and an asset representing the right to use the underlying
asset during the lease term (i.e., the right-of-use asset).
Lessees will be required to separately recognise the interest
expense on the lease liability and the depreciation expense on the
right-of-use asset.
Lessees will be required to remeasure the lease liability upon the
occurrence of certain events (e.g., a change in the lease term, a
change in future lease payments resulting from a change in an
index or rate used to determine those payments). The lessee will
generally recognise the amount of the re-measurement of the
lease liability as an adjustment to the right-of-use asset.
Lessor accounting is substantially unchanged from today’s
accounting under AASB117. Lessors will continue to classify all
leases using the same classification principle as in AASB 117 and
distinguish between two types of leases: operating and finance
leases.
AASB 2014-10 amends AASB 10: Consolidated Financial
Statements and AASB 128: Investments in Associates and Joint
Ventures to clarify the accounting for the sale or contribution of
assets between an investor and its associate or joint venture by
requiring:
(a) a full gain or loss to be recognised when a transaction involves
a business, whether it is housed in a subsidiary or not; and
(b) a partial gain or loss to be recognised when a transaction
involves assets that do not constitute a business, even if these
assets are housed in a subsidiary.
AASB 2017-4 amends AASB 1: First-time Adoption of Australian
Accounting Standards to amend the requirements applicable to
1 January 2019
Arrow Minerals Limited
2019 Annual Report
Page 41
Pronouncement
Standards –
Uncertainty over
Income Tax Treatments
Nature of Change
Effective Date
first-time adopters of Australian Accounting Standards as a
consequence of the issuance of AASB Interpretation 23.
AASB 2017-6:
Amendments to
Australian Accounting
Standards –
Prepayment Features
of Negative
Compensation
AASB 2017-6 amends AASB 9: Financial Instruments to permit an
entity, subject to meeting a number of criteria, to measure at
amortised cost or fair value through other comprehensive income
particular financial assets that would otherwise have contractual
cash flows that are solely payments of principal and interest but
do not meet that condition only as a result of a prepayment
feature.
AASB 2017-7:
Amendments to
Australian Accounting
Standards – Long-term
Interests in Associates
and Joint Ventures
AASB 2017-7 amends AASB 128 to clarify that an entity is required
to account for long-term interests in an associate or a joint venture,
which in substance form part of the net investment in the associate
or joint venture but to which the equity method is not applied,
using AASB 9: Financial Instruments before applying the loss
allocation and impairment requirements in AASB 128.
1 January 2019
1 January 2019
AASB 2018-1:
Amendments to
Australian Accounting
Standards – Annual
Improvements 2015-
2017 Cycle
AASB 2018-1 amends:
1 January 2019
(a) AASB 3: Business Combinations to clarify that an entity
remeasures its previously held interest in a joint operation when it
obtains control of the business;
(b) AASB 11: Joint Arrangements to clarify that an entity does not
remeasure its previously held interest in a joint operation when it
obtains joint control of the business;
(c) AASB 112: Income Taxes to clarify that an entity accounts for
all income tax consequences of dividend payments according to
where the entity originally recognised the past transactions or
events that generated the distributable profits; and
(d) AASB 123: Borrowing Costs to clarify that an entity treats any
borrowing originally made to develop a qualifying asset as part of
general borrowings when the asset is ready for its intended use or
sale.
AASB 2018-6:
Amendments to
Australian Accounting
Standards – Definition
of a Business
AASB 2018-6 amends AASB 3: Business Combinationsto clarify the
definition of a business, assisting entities to determine whether a
transaction should be accounted for as a business combination or
as an asset acquisition. The amendments:
1 January 2020
(a) clarify that to be considered a business, an acquired set of
activities and assets must include, at a minimum, an input and a
substantive process that together significantly contribute to the
ability to create outputs;
(b) remove the assessment of whether market participants are
capable of replacing any missing inputs or processes and
continuing to produce outputs;
(c) add guidance and illustrative examples to help entities assess
whether a substantive process has been acquired;
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2019 Annual Report
Arrow Minerals Limited
Pronouncement
Nature of Change
Effective Date
AASB 2018-7:
Amendments to
Australian Accounting
Standards – Definition
of Material
(d) narrow the definitions of a business and of outputs by focusing
on goods and services provided to customers and by removing
the reference to an ability to reduce costs; and
(e) add an optional concentration test that permits a simplified
assessment of whether an acquired set of activities and assets is
not a business.
AASB 2018-7 principally amends AASB 101: Presentation of
Financial Statements and AASB 108: Accounting Policies, Changes
in Accounting Estimates and Errors. The amendments refine the
definition of material in AASB 101. The amendments clarify the
definition of material and its application by improving the wording
and aligning the definition across AASB Standards and other
publications. The amendment also includes some supporting
requirements in AASB 101 in the definition to give it more
prominence and clarifies the explanation accompanying the
definition of material.
1 January 2020
AASB Interpretation 23:
Uncertainty over
Income Tax Treatments
Interpretation 23 clarifies how an entity should apply the
recognition and measurement requirements in AASB 112: Income
Taxes when there is uncertainty over income tax treatments. To
this end, Interpretation 23 requires:
1 January 2019
(a) an entity to consider whether each uncertain tax treatment
should be considered separately or together with one or more
other uncertain tax treatments based on which approach better
predicts the resolution of the uncertainty;
(b) in assessing whether and how an uncertain tax treatment affects
the determination of taxable profit (tax loss), tax bases, unused tax
losses, unused tax credits and tax rates, assume that the taxation
authority will examine amounts it has a right to examine and have
full knowledge of all related information when making those
examinations;
(c) if the entity concludes that it is probable that the taxation
authority will accept the uncertain tax treatment, the entity will
determine current tax and deferred tax consistently with the
treatment used or planned to be used in its income tax filings;
(d) if the entity concludes that it is not probable that the taxation
authority will accept an uncertain tax treatment, the entity reflects
the effect of uncertainty in the determination of current tax and
deferred tax, based on either the ‘most likely’ amount or the
‘probability-weighted’ amount of tax (depending on which method
the entity expects to better predict the resolution of the
uncertainty); and
(e) an entity to reassess a judgement or estimate required under
Interpretation 23 if the facts and circumstances on which the
judgement or estimate was based change or as a result of new
information that affects the judgement or estimate.
When AASB 16 is applied by the Group at 1 July 2019, the present value the Group’s operating lease commitment
(adjusted for the impact, if any, of the revised definitions of ‘lease term’ and ‘lease payments’), for all leases with a
term of more than 12 months, but excluding leases of low value assets, will be recognised as a lease liability, using an
appropriate discount rate as prescribed by the accounting standard. The Group will also recognise a corresponding
Arrow Minerals Limited
2019 Annual Report
Page 43
right-of-use asset, which the Group can choose to initially measure at either its carrying amount as if the accounting
standard had applied from the commencement date of the lease or at an amount equal to the initial lease liability.
The preliminary assessment of the Group is that it will most likely elect to initially measure the right-of-use asset at
an amount equal to the initial lease liability. As such the Group anticipates that the initial application of AASB 16 will
not impact the net assets of the Group.
As disclosed in note 19 to the financial statements, the Group’s aggregate operating lease expenditure commitment
at 30 June 2019 (measured on an undiscounted basis) is $140,642.
Based on the Group’s preliminary assessment, which includes the likely election to initially measure the right-of-use
asset at an amount equal to the initial lease liability, and using a provisionally determined discount rate, it is anticipated
that:
the application of AASB 16 will result in the recognition of a lease liability and a corresponding right-of-use
asset of approximately $134,894 relating to the leasing commitments disclosed in note 19; and
the application of AASB 16 will not result in a material impact on the profit or loss of the Group, as the aggregate
of the estimated interest expense on the lease liability and the estimated depreciation expense of the right-of-
use asset in the first year of application is not expected to differ materially from the aggregate operating lease
expense recognised by the Group for the financial year ended 30 June 2019 under the predecessor accounting
standard.
The likely impact of all other new standards and interpretations on the financial statements of the Group has not been
determined.
2. RESTATEMENT OF PRIOR PERIOD BALANCES
While preparing the financial statements of the Group for the half-year ended 31 December 2018, Arrow identified
that no value had been attributed to the warrants held in Pacton Gold Inc., arising from the sale of Arrow (Pilbara) Pty
Ltd, in the year ended 30 June 2018. This resulted in restatement of the following line items for the year ended 30
June 2018:
Investment in associate was increased by $193,917;
Loss was reduced by $798,416; and
Other financial assets were increased by $604,499.
As the warrants were obtained as part of the Group’s sale of 51% of its interest in Arrow (Pilbara) Pty Ltd on 11 May
2018 there is no impact on the opening balance at 1 July 2017.
Arrow also identified an issue relating to the timing of share based payment expenses being recognised across
reporting periods. This resulted in the restatement of the following line items for the year ended 30 June 2018:
30 June 2018:
Loss before tax from continuing operations increased by $170,788; and
Reserves increased by $251,025.
Opening accumulated losses and opening share based payment reserve at 1 July 2017 were restated by $80,237 as a
result of the adjustment to share based payment expenses.
This resulted in the restatement of increasing Key Management Personnel equity settled share based payment
remuneration for the year ended 30 June 2018 by $154,574 (Mr Michael: $57,468, Dr Tabeart: $15,533, Mr Ong: $21,588,
Mr Foy: $19,612 and Mr Tuck: $40,373).
In addition, an inconsistency was identified within the consolidation process relating to the classification of a payables
account at 30 June 2018. This resulted in a restatement of the following line items for the year ended 30 June 2018:
Loss before tax from continuing operations increased by $6,669; and
Trade and other payables were increased by $6,669.
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2019 Annual Report
Arrow Minerals Limited
Together, the above adjustments had the following impact on the 30 June 2018 financial statements:
FINANCIAL REPORT LINE ITEM / BALANCE AFFECTED
Consolidated Statement of Comprehensive Income extract
Reported
30 Jun 2018
Adjustment
Restated
30 Jun 2018
$
$
$
Gain on disposal of controlling interest
Fair value movement on financial assets
Employee benefits expenses
Share based payment expenses
887,313
443,832
(545,223)
(229,498)
Loss before tax from continuing operations
(1,306,491)
Basic and diluted loss per share
(0.574)
Consolidated Statement of Financial Position extract
397,658
400,758
(6,669)
(170,788)
620,959
0.304
193,917
604,499
798,416
6,669
6,669
6,669
1,284,971
844,590
(551,892)
(400,286)
(685,532)
(0.270)
738,201
1,325,200
6,027,062
342,106
444,104
600,778
544,284
720,701
5,228,646
335,437
437,435
594,109
12,977,261
791,747
13,769,008
1,614,933
(23,773,852)
12,977,261
251,025
540,722
791,747
2019
$
1,865,958
(23,233,130)
13,769,008
Restated
2018^
$
92,812
37,826
584,355
105,896
690,251
464,618
87,274
551,892
Current assets
Investment in associates
Other financial assets
Total current assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Reserves
Accumulated losses
Total equity
3. REVENUE AND EXPENSES
Loss from continuing operations includes:
Depreciation expense
Employee benefits expense includes:
Employee benefits, including directors’ fees
Superannuation expenses
Auditors' remuneration - for audit or review of financial report
Pitcher Partners BA&A Pty Ltd
29,000
28,000
Arrow Minerals Limited
2019 Annual Report
Page 45
Auditors' remuneration - for other services
Pitcher Partners BA&A Pty Ltd – Other Assurance Services
Pitcher Partners (WA) Pty Ltd - Taxation
29,000
5,000
13,335
18,335
28,000
2,000
8,750
10,750
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments
disclosed in Note 2.
4.
INCOME TAX
(a) The major components of income tax expense / (benefit) comprise of:
Current tax benefit
Deferred tax benefit
Under / (over) provision in prior years
2019
$
-
-
-
-
Restated
2018^
$
-
-
(134,904)
(134,904)
(b) Reconciliation of prima facie tax on continuing operations to income tax benefit:
Profit / (loss) before tax for the year
(3,909,752)
(685,532)
Tax benefit @ 27.5% tax rate (Australia) (2018: 27.5%)
(1,075,182)
(188,521)
Adjustments for:
Entertainment
Consolidation exit adjustment
Share based payments
Under / (over) provision in prior years
Unrecognised DTA on tax losses
Income tax expense / (benefit) attributable to profit
(c) Components of deferred taxes
Deferred tax asset:
Tax losses
Provisions & accruals
Capital & borrowing costs
Investments
1,220
-
37,787
-
1,036,175
-
9,092,465
35,326
83,059
276,984
610
98,904
110,079
(134,904)
21,072
(134,904)
8,381,249
35,336
100,181
-
Offset against deferred tax liability / not recognised
(9,487,834)
(8,516,766)
Deferred tax liability:
Prepayments
Investments
Exploration expenditure
Foreign exchange – unrealised
Offset against deferred tax assets / not recognised
Net deferred tax asset / (liability)
(d) Deferred tax assets / liabilities not brought to account
Temporary differences
Operating tax losses
-
-
(2,351,479)
(6,034)
2,357,513
-
(1,962,144)
9,092,465
7,130,321
(585)
(271,869)
(2,098,221)
-
2,370,675
-
(2,235,155)
8,381,246
6,146,523
Page 46
2019 Annual Report
Arrow Minerals Limited
4. INCOME TAX (continued)
The tax benefits of the above deferred tax assets will only be obtained if:
- the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits to be
utilised;
- the Group continues to comply with the conditions for deductibility imposed by law; and
- no changes in income tax legislation adversely affect the Group in utilising the benefits.
The Group has gross tax losses as at 30 June 2019 of $33,063,508 (2018: $30,477,269).
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments
disclosed in Note 2.
(e) Tax consolidation
For the purposes of income tax legislation, the Company and its 100% controlled Australian entities have elected to
form a tax consolidated group.
5. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Deposits at call
2019
$
753,368
-
753,368
2018
$
1,758,484
2,000,000
3,758,484
(a) Reconciliation of loss for the year to operating cash flows
Loss for the year
(3,909,752)
(550,628)
Cashflows excluded from profit attributable to operating activities
Finance costs on interest bearing liabilities
Adjustments for non-cash items:
Write off of exploration & evaluation Assets
Share based payment expense
Depreciation expense
Gain on disposal of associate/controlling interest
Gain on disposal of tenements
Loss on sale of financial assets
Revaluation of financial assets
Movement in working capital items:
(Increase) / decrease in trade and other receivables
(Increase) / decrease in prepayments
Increase / (decrease) in trade and other payables
Net cash used in operating activities
6.
INVESTMENT IN ASSOCIATE
6(a) Associates
10,585
9,297
2,625,876
137,406
92,812
(1,284,068)
(233,956)
535,798
1,035,736
124,652
(176,194)
(166,538)
(1,207,643)
1,767,288
400,286
37,826
(1,284,971)
(387,300)
-
(844,590)
(140,660)
(3,998)
106,527
(890,923)
Set out below are the material associates of the Group. The entity listed below have share capital consisting solely of
ordinary share. The proportion of ordinary shares held by the Group equals the voting rights held by the Group.
Arrow Minerals Limited
2019 Annual Report
Page 47
Name
Classification
Place of
Business/
Incorporation
Proportion of
Ordinary Share Measurement
Interest
Method
2019
2018
Carrying Amount
2018^
2019
Arrow (Pilbara) Pty Ltd
Associate
Perth, Australia
0%
49%
Equity Method
-
$738,201
Arrow (Pilbara) Pty Ltd is a private entity undertaking exploration activities in the Pilbara region of Western Australia.
6(b) Disposal of Associate
During the year, the Group disposed of its remaining 49% interest to the major shareholder Pacton Gold Inc., a Canadian
listed company, for consideration of C$1,000,000 (A$1,060,106) in cash and 2,000,000 Pacton shares. For the period
until date of sale, the interest in associate did not make a contribution to the Group profit or loss (2018: nil).
Aggregated details of this transaction are as follows:
Cash consideration
Non-cash consideration
Costs associated with the sale
Total proceeds
Cost of asset held at disposal date
Equity accounted profit/(loss) to date of sale
Net gain on disposal of Associate
6(c) Disposal of Controlling Interest
2019
$
1,060,106
975,298
(13,135)
2,022,269
(738,201)
-
1,284,068
During the year ended 30 June 2018, the Group disposed of a 51% controlling interest in Arrow (Pilbara) Pty Ltd to
Pacton Gold Inc. for consideration of C$300,000 (A$309,000) in cash, 2,000,000 Pacton shares and 1,086,957 Pacton
warrants.
As part of the agreement, the following contingent assets (note 17) arose:
Pacton will pay Arrow C$200,000 upon granting of the exploration licence applications, with C$100,000 paid
on the grant of each application; and
Arrow will receive a Discovery Bonus of C$500,000 in cash upon Pacton publishing a gold resource at the
Project of over 100,000oz in accordance with National Instrument 43-101 (TSXV equivalent of the JORC Code).
At the date Arrow (Pilbara) Pty Ltd became an associate, and at 30 June 2018, the $223,471 net assets of the entity
related only to exploration and evaluation assets.
Aggregate details of this transaction are:
Cash consideration
Non-cash consideration
Total consideration
Cost of assets and liabilities held at disposal date
Non-controlling equity interests
Net gain on disposal of controlling interest
Restated
2018^
$
309,000
461,241
770,241
(223,471)
738,201
1,284,971
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments
disclosed in Note 2.
Page 48
2019 Annual Report
Arrow Minerals Limited
7. OTHER FINANCIAL ASSETS
Shares in Caeneus Minerals Limited
Ordinary Shares in Pacton Gold Inc.
Warrants in Pacton Gold Inc.
Contingent receivable – Pacton Gold Inc.
Financial assets at fair value through profit or loss
2019
$
-
380,520
131,263
54,500
566,283
Restated
2018^
$
19,369
701,332
604,499
-
1,325,200
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments
disclosed in Note 2.
.8.
TRADE AND OTHER RECEIVABLES
2019
2018
Bond
GST receivable
Other debtors
9
PREPAYMENTS
Prepaid insurance
Prepaid rent
Acquisition costs for Boromo Gold Limited
10. EXPLORATION AND EVALUATION ASSETS
Balance at the beginning of the year
Expenditure incurred during the year
Fair value of tenements on disposal
Write offs recognised during the year
Balance at the end of the year
The asset balance comprises of the following areas of interest:
Strickland Gold Project
Malinda Lithium Project
Plumridge Nickel and Gold Projects
$
26,006
44,608
-
70,614
2019
$
13,916
8,386
164,103
186,405
2019
$
8,041,647
3,135,060
-
(2,625,876)
8,550,831
6,112,043
1,488,598
950,190
8,550,831
$
2,825
92,441
100,000
195,266
2018
$
9,911
-
-
9,911
2018
$
8,283,225
3,266,235
(1,840,525)
(1,767,288)
8,041,647
3,323,978
1,160,057
3,557,612
8,041,647
The ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful
development and commercial exploitation of each area of interest.
Arrow Minerals Limited
2019 Annual Report
Page 49
11. PROPERTY, PLANT AND EQUIPMENT
Motor vehicle
- At cost
- Accumulated depreciation
Total motor vehicle
Caravan
- At cost
- Accumulated depreciation
Total office equipment
Office Improvements
- At cost
- Accumulated depreciation
Total office improvements
2019
$
208,768
(84,352)
124,416
45,764
(18,188)
27,576
92,191
(33,009)
59,182
2018
$
205,858
(36,615)
169,243
45,764
(2,933)
42,831
92,191
(3,188)
89,003
Total property, plant and equipment
211,174
301,077
Movements in carrying amounts:
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the
end of the current financial year:
Motor
Vehicle
$
121,599
78,919
(31,275)
$
-
45,764
(2,933)
169,243
42,831
2,909
-
Balance at 1 July 2017
Additions
Depreciation Expense
Balance at 30 June
2018
Additions
Depreciation Expense
(47,736)
(15,255)
Balance at 30 June
2019
124,416
27,576
Caravan
Office
Equipment
Office
Improvements
$
$
Total
$
430
-
(430)
-
-
-
-
-
122,029
92,191
216,874
(3,188)
(37,826)
89,003
301,077
-
2,909
(29,821)
(92,812)
59,182
211,174
Chattel mortgages:
The carrying value of plant and machinery held under chattel mortgages at 30 June 2019 was $112,958 (2018: $169,243).
12. TRADE AND OTHER PAYABLES
Trade creditors and other payables
Accruals
Trade creditors are generally settled on 30 to 90 day terms.
2019
$
96,228
23,000
119,228
2018
$
322,106
20,000
342,106
Page 50
2019 Annual Report
Arrow Minerals Limited
13. INTEREST BEARING LIABILITIES
Current
Obligations under chattel mortgage (Note 19)
8%
2021
Interest rate Maturity
Non-Current
Obligations under chattel mortgage (Note 19)
8%
2021
14. ISSUED CAPITAL
2019
$
30,705
30,705
91,050
91,050
2019
No.
2018
$
28,423
28,423
121,754
121,754
2018
No.
Ordinary shares full paid
314,540,609
306,976,322
(a) Movement in ordinary share capital
Balance at 1 July 2017
31 July 2017 – Placement
8 September 2017 – Placement
14 November 2017 – Option exercise at $0.07 per share
1 December 2017 – ESP Issue
13 February 2019 – Placement
22 March 2018 – Land access payment
16 April 2018 – Placement
27 April 2018 – ESP Issue
27 April 2018 – Share Buy back (cancellation of ESP shares)
Costs of issue
Balance at 30 June 2018
17 September 2018 – cancellation of ESP shares
22 November 2018 – ESP Issue
Balance at 30 June 2019
Terms and conditions of ordinary shares
No.
$
133,464,700
30,404,876
4,616,696
34,510,552
2,666,667
5,600,000
44,549,653
592,768
81,312,429
750,000
(1,087,143)
306,976,322
(1,435,713)
9,000,000
138,451
1,035,317
186,667
-
1,291,940
20,000
2,358,060
-
-
(299,131)
35,136,180
-
-
314,540,609
35,136,180
Ordinary shares have the right to receive dividends as declared, and in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid upon
shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(b) Unexpired share options
The following options over ordinary shares of the Company existed at reporting date:
Expiry date
Nos.
31/12/2019
13,146,469
31/12/2019
120,872,133
134,018,602
1. These options are unlisted.
2. These options are listed.
Exercise
Price ($)
0.0701
0.1002
Arrow Minerals Limited
2019 Annual Report
Page 51
Movements
No.
Options outstanding at 30 June 2017
16,516,132
Granted
Exercised
Expired
136,685,269
(2,666,667)
(7,230,439)
Options outstanding at 30 June 2018
143,304,295
Expired
(9,285,693)
Options outstanding at 30 June 2019
134,018,602
15. RESERVES
Option/share based payment reserve (i)
Foreign currency reserve (ii)
Available for sale reserve (iii)
2019
$
2,479,795
(476,281)
-
2,003,514
Restated
2018^
$
2,342,389
(476,281)
(150)
1,865,958
(i)
The option/share based payment reserve relates to shares & options granted by the Company to its employees and
suppliers. The 2019 movement relates to the ESP share based payments expensed during the year.
(ii) Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from
their functional currencies to the Group’s presentation currency (i.e. Australian dollars) are recognised directly in other
comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously
accumulated in the foreign currency translation reserve (in respect of translating the net assets of foreign operations)
are reclassified to profit or loss on the disposal of the foreign operation.
(iii) The available for sale reserve represents fair value gains / (losses) on available for sale investments recognised in equity.
Immaterial balance transferred to accumulated losses during the year.
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments
disclosed in Note 2.
16. LOSS PER SHARE
The following data reflect the income and share numbers used in calculation of the basic and diluted loss per share:
Unit
2019
Restated
2018^
Weighted average number of shares
(post 1 for 35 consolidation)
Nos.
311,276,010
204,139,144
Loss used in calculation of basic and diluted loss per share
$
(3,909,752)
(550,628)
Basic and diluted loss per share:
cents
(1.256)
(0.270)
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments
disclosed in Note 2.
17. CONTINGENT ASSETS AND LIABILITIES
As part of the sale of Arrow (Pilbara) Pty Ltd, the following contingent assets arose:
Pacton will pay Arrow C$200,000 upon granting of the exploration licence applications, with C$100,000 paid
on the grant of each application; and
Arrow will receive a Discovery Bonus of C$500,000 in cash upon Pacton publishing a gold resource at the
Project of over 100,000oz in accordance with National Instrument 43-101 (TSXV equivalent of the JORC Code).
Page 52
2019 Annual Report
Arrow Minerals Limited
During the year, C$100,000 (A$108,849) was received upon the granting of an exploration licence, the Group recognised
$54,500 deferred contingent consideration on the sale of a disposed of 51% of Arrow (Pilbara) Pty Ltd to Pacton Gold
(Inc) in the previous year ended 30 June 2018, see note 6. At 30 June 2018, the likelihood of receiving the consideration
was assessed as close to nil, and as such, no financial asset was recognised as a receivable at 30 June 2018, instead the
total amount of C$200,000 was disclosed as a contingent asset.
With respect to the C$500,000 Discovery Bonus, the likelihood of receiving the consideration is assessed as close to nil
(2018: nil), and as such, no financial asset was recognised as a receivable at 30 June 2019 (30 June 2018: nil), instead
the total amount of C$500,000 is disclosed as a contingent asset (2018: C$500,000).
The Group had no other contingent assets or liabilities at reporting date or in subsequent periods.
18. SUBSEQUENT EVENTS
On 15 August 2019, Arrow advised that its shareholders had approved the acquisition of Boromo through an all-scrip
transaction. On 26 August, Arrow acquired 100% of the issued capital of Boromo through the issue 289,297,910 ordinary
shares and 209,046,880 Performance Rights to Boromo shareholders and Performance Rights holders.
As a result of the acquisition of Boromo, the role of Managing Director was made redundant. Mr Steven Michael’s
employment as Managing Director was terminated. Mr Michael will continue as an Executive Director. Mr Matthew Foy
is also being made redundant as Company Secretary. Messrs Michael and Foy both qualified for genuine redundancy
under TR 2009/2 and received a statutory redundancy payment and a termination payment as stipulated within their
respective service agreements disclosed within the Remuneration Report.
On 5 July 2019 and 22 August 2019, Arrow completed a two-tranche placement to raise a total of $2.1 million through
the issue of 220,300,000 ordinary shares and 120,150,000 options exercisable at 2¢ on or before 22 August 2022.
On 1 July 2019, Arrow advised that 8,571,408 options exercisable at $0.175 on or before 30 June 2019 had expired
unexercised.
Other than the above, there have been no events subsequent to balance date of a nature that would require disclosure.
19. COMMITMENTS
Exploration & evaluation commitments
The Group has certain minimum obligations in pursuance of the terms and conditions of tenement licences in the
forthcoming year. Whilst these obligations are capable of being varied from time to time, in order to maintain current
rights of tenure to mining tenements, the Group will be required to outlay $549,605 in 2019/20 ($593,000 in 2018/19).
Exploration commitments include requirements under joint ventures for tenements held by other entities.
Leasing commitments
On 31 May 2018, the Company entered into a 3 year lease for office accommodation at an annual cost of $51,200,
increasing by 3% per annum over the term of the lease.
On 1 April 2019, the Company entered into a 2 year lease for warehousing at an annual cost of $18,795 including
outgoings, increasing by 3% per annum over the term of the lease. The expenditure commitment for the Group for
later than 2 years but not later than 5 years is uncertain as the tenements require re-application prior to this date of
which the outcome is not certain.
Up to 1 year
Between 1 and 5 years
Later than 5 years
Chattel Mortgages
2019
$
625,936
64,311
-
690,247
2018
$
644,200
98,133
-
742,333
The Group has finance leases and hire purchase contracts for various items of plant and machinery. The Group’s
obligations under finance leases are secured by the lessor’s title to the leased assets. Future minimum lease payments
under finance leases and hire purchase contracts, together with the present value of the net minimum lease payments
are, as follows:
Arrow Minerals Limited
2019 Annual Report
Page 53
Up to 1 year
Between 1 and 5 years
2019
2018
Minimum
payments
$
Present
value of Minimum
payments
payments
$
$
Present
value of
payments
$
39,007
96,312
30,704
91,050
39,007
28,243
135,320
121,754
Total minimum lease payments
135,319
121,754
174,327
150,177
Less amounts representing finance charges
(13,565)
-
(24,150)
-
Present value of minimum lease payments
121,754
121,754
150,177
150,177
20.
RELATED PARTY & KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Parent and subsidiaries
The parent entity and the ultimate parent entity of the Group is Arrow, a company listed on the Australian Securities
Exchange.
The components of the Group are:
Parent
Arrow Minerals Limited
Controlled entities
Arrow (Pardoo) Limited
Edurus Resources SA
Arrow (Strickland) Pty Ltd
Arrow (Malinda) Pty Ltd
Arrow (Deralinya) Pty Ltd
Arrow (Plumridge) Pty Ltd
Arrow (Pilbara) Pty Ltd
Incorporated
2019
2018
Ownership Percentage
Australia
-
-
Australia
South Africa
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
0%
100%
100%
100%
100%
100%
100%
49%
(b) Key management personnel disclosures
The key management personnel compensation included employee benefit and director compensation expenses are as
follows:
Short-term employee benefits
Post-employment benefits
Long service leave
Equity compensation benefits
2019
$
691,344
51,801
14,297
113,233
870,675
Restated
2018^
$
590,270
85,137
7,484
375,882
1,058,773
Further information regarding key management personnel has been provided in the Remuneration Report.
Page 54
2019 Annual Report
Arrow Minerals Limited
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments
disclosed in Note 2. Key Management Personnel equity compensation benefits for the year ended 30 June 2018
increased by $154,574 (Mr Michael: $57,468, Dr Tabeart: $15,533, Mr Ong: $21,588, Mr Foy: $19,612 and Mr Tuck:
$40,373).
(c) Transactions with key management personnel
The Company entered into a service agreement with Minerva Corporate Pty Ltd, effective 2 April 2014, for the provision
of Directorial and Company Secretarial services. Messrs Ong & Foy are related parties of Minerva Corporate Pty Ltd
and Arrow.
This service agreement was amended in August 2014 to exclude Company Secretarial services.
During the year an amount of $43,722 (2018: $33,387) inclusive of GST was paid or payable in relation to these services.
There is an amount of $3,300 included in trade creditors on account of these services (2018: $3,300).
All of the Director fees for Mr Ong were remitted to Minerva Corporate Pty Ltd during the current and prior year.
Mr Foy continues to provide Company Secretarial services as an employee of Arrow.
Dr Tabeart’s remuneration for the year was paid directly to his related party, Geogen Consulting Pty Ltd. During the
year, an additional $10,120 (inc GST) was paid to Geogen Consulting Pty Ltd for consulting services.
The Company entered into a service agreement with Mitchell River Group Pty Ltd, effective 6 July 2016, for the provision
of exploration database management services. Dr Tabeart is a related party of Mitchell River Group Pty Ltd and Arrow.
During the year, an amount of $44,649 (2018: $25,990) inclusive of GST was paid or payable in relation to these services.
There is an amount of $nil included in trade creditors on account of these services (2018: $2,645)
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties.
21.
SHARE BASED PAYMENTS
Share based payments are provided to directors, consultants and other advisors.
The issue to each individual director, consultant or advisor is controlled by the Board and the ASX Listing Rules. Terms
and conditions of the payments, including the grant date, vesting date, exercise price and expiry date are determined
by the Board, subject to shareholder approval where required.
Valuation
Shareholder approval was received on 22 November 2018 for the issue of 9,000,000 shares to directors. The shares
were issued on 22 November 2018.
Shareholder approval was received on 22 November 2017 for the issue of 5,600,000 shares to directors. The shares
were issued on 1 December 2017
The issue of Shares pursuant to the Plan may be undertaken by way of provision of a limited-recourse, interest free
loan to be used for the purposes of subscribing for the Shares.
The Shares issued to the Eligible Participants will be fully paid ordinary shares in the capital of the Company issued on
the same terms and conditions as the Company’s existing Shares, other than being subject to a holding lock until such
time as the respective restriction conditions have been satisfied, including the completion of any restriction period, and
any Loan has been extinguished or repaid under the terms of the Plan.
Although these are shares for legal and taxation purposes, Accounting Standards require they be treated as options for
accounting purposes.
The shares have been valued applying a Black-Scholes option pricing model, with the following inputs for the relevant
milestones.
Arrow Minerals Limited
2019 Annual Report
Page 55
November 2018
November 2017
Number of Plan Shares
6,750,000
2,250,000
4,200,000
1,400,000
Grant date
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Vesting date
Expected life (years)
Share price ($)
Share price at grant date ($)
Valuation of shares
22 Nov 2018
22 Nov 2018
22 Nov 2017
22 Nov 2017
0.00%
86%
2.12%
Various
3 Years
0.015
0.015
0.0083
0.00%
86%
2.12%
1 Year
1 Year
0.015
0.015
0.0053
0.00%
315%
1.92%
Various
2.25
0.052
0.052
0.0517
0.00%
315%
1.69%
1 Year
1 Year
0.052
0.052
0.0470
The milestones attaching to the Employee Share Loan Plan are as follows:
November 2018 Milestones
1. Discovery of a mineralised prospect with multiple drill intersections of at least 15 gram metres gold (e.g. two
separate drill intersections of 5 metres @ 3g/t Au), or gold equivalent.
2. Discovery of multiple mineralised prospects as defined in Milestone 1.
3. Announce a JORC-compliant resource of 100,000oz of gold at a minimum grade of 1.0g/t Au (or equivalent for
other metals).
4. Combined capital raising of $2 million through a combination of either equity issues at an average issue price at
least 75% of the 15-day VWAP prior to each issue and/or proceeds from asset sales (or farm-out joint ventures).
5. Total shareholder return over any 12-month period exceeding +25%.
6. Continue to be an employee or Director of AMD until 31 December 2019.
Of the above 6 milestones, the achievement of 4 will vest 100% of the shares, with 25% of the shares vesting on the
achievement of each milestone.
November 2017 Milestones
1. Discover a mineralised prospect of at least 10 gram-metres gold, or 10% metres lithium or 10% metres nickel.
2. Announce a JORC-compliance resource of:
100,000oz of gold at a minimum grade of 1.0g/t Au (or equivalent for other metals); or
10,000 tonnes of lithium at a minimum grade of 1.0% Li2O; or
20,000 tonnes of nickel at a minimum grade of 2.0% Ni (+Cu, PGE).
3. Complete a pre-feasibility study on a resource estimate as defined in Milestone 2.
4. Combined capital raising of $3 million at an average issue price at least 75% of the 15-day VWAP prior to each
issue.
5. Total shareholder return exceeding +25% over a 12 month period.
6. Continue to be an employee or Director of Arrow until 31 December 2018.
Of the above 6 milestones, the achievement of 4 will vest 100% of the shares, with 25% of the shares vesting on the
achievement of each milestone.
Refer to the Remuneration Report for full details of vesting periods and restrictive conditions to be achieved.
Historical share price volatility has been the basis for determining expected share price volatility as it is assumed that
this is indicative of future volatility.
22. OPERATING SEGMENTS
The Company operates in one operating and geographic segment being mineral exploration, and evaluation in Western
Australia for the year ended 30 June 2019.
23. FINANCIAL RISK MANAGEMENT
Overview
The Group has exposure to the following risks from their use of financial instruments:
- credit risk
Page 56
2019 Annual Report
Arrow Minerals Limited
- liquidity risk
- market risk
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. The Board of Directors has overall
responsibility for the establishment and oversight of the risk management framework. Management monitors and
manages the financial risks relating to the operations of the Group through regular reviews of the risks.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from receivables from customers and cash and cash equivalents.
All cash balances are held with recognised institutions limiting the exposure to credit risk. There are no formal credit
approval processes in place.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum
exposure to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables – rental bond
Financial assets are neither past due nor impaired.Exposure to interest rate risk
The Group’s maximum exposure to interest rates at the reporting date was:
2019
$
753,368
70,614
823,982
2018
$
3,758,484
195,266
3,953,750
2019
Financial Assets – Current
Cash and cash equivalents
Financial Liabilities – Current
Interest bearing liabilities
Financial Liabilities – Non-Current
Interest bearing liabilities
2018
Financial Assets – Current
Cash and cash equivalents
Financial Liabilities – Current
Interest bearing liabilities
Financial Liabilities – Non-Current
Interest bearing liabilities
Range of
effective interest
rate
%
Carrying
amount
$
Fixed interest
rate
$
Total
$
0 - 2.2
753,368
753,368
753,368
7.95
7.95
30,705
91,050
30,705
91,050
30,705
91,050
0 - 2.2
3,758,484
3,758,484
3,758,484
7.95
7.95
28,423
28,423
28,423
121,754
121,754
121,754
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual
cash flows.
Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period
of 60 days, including the servicing of financial obligations.
The Group has no access to credit standby facilities or arrangements for further funding or borrowings in place.
Arrow Minerals Limited
2019 Annual Report
Page 57
The maturity profile of Group's financial assets and liabilities are:
2019
Cash and cash equivalents
Trade and other receivables
Other financial assets
Trade and other payables
2018
Cash and cash equivalents
Trade and other receivables
Other financial assets
Trade and other payables
Carrying
amount
$
753,368
70,614
566,283
(96,228)
Up to 6
months
$
753,368
70,614
435,020
(96,228)
1,294,037
1,162,774
3,758,484
195,266
1,325,200
(331,038)
4,947,912
3,758,484
195,266
720,701
(331,038)
4,343,413
The maturity profile disclosed are the contractual undiscounted cash flows.
(c) Market risk
Market risk is the risk that changes in market prices will affect the Group’s income or the value of its holdings of financial
instruments.
Foreign currency risk:
The Group is exposed to foreign exchange risk through its Canadian Dollar denominated investment as a result of its
holding in Pacton Gold Inc. The exposure of this investment is demonstrated within the following table showing the
impact of reasonably possible changes in foreign exchange rates, with all other variables constant, on the Group’s
consolidated statement of profit or loss and other comprehensive income.
Judgements of reasonably possible movements
between the Canadian dollar and Australian dollar
Effect on Post Tax Loss ($)
Increase/(decrease)
Effect on Equity ($)
Increase/(decrease)
Increase 10%
Decrease 10%
2019
2018
2019
2018
46,526
(56,865)
118,712
(145,092)
(46,526)
56,865
(118,712)
145,092
A sensitivity of 10% movement has been used as this is considered reasonable and is derived from a review of historical
movements and management’s judgement of future trends.
Interest rate risk:
The Group holds the majority of its cash and cash equivalents within a current account attracting a weighted interest
rate of 0.2% pa (2018: 1.72% pa).
The Group’s sensitivity to movement in interest rates is shown in the summarised sensitivity analysis table below.
Interest rate risk
+100 bps
-100 bps
Carrying amount
Profit
Equity
Profit
Equity
$
$
$
$
$
2019
Cash and cash equivalents
753,368
7,534
(7,534)
(7,534)
7,534
2018
Cash and cash equivalents
3,758,484
37,585
(37,58)
(37,585)
37,585
Page 58
2019 Annual Report
Arrow Minerals Limited
(d) Fair value of financial instruments
The fair value of Group's financial instruments at reporting date are:
Cash and cash equivalents
Trade and other receivables
Other financial assets
Trade and other payables
2019
2018
Carrying
amount
$
Fair
value
$
Carrying
amount
$
Fair
value
$
753,368
753,368 3,758,484
3,758,484
70,614
70,614
195,266
195,266
566,283
566,283 1,325,200
1,325,200
(96,228)
(96,228)
(331,038)
(331,038)
1,294,037
1,294,037 4,947,912
4,947,912
The directors consider the carrying amount of the financial instruments to be a reasonable approximation of their fair
value on account of the short maturity cycle.
The fair value of the Group’s financial assets in quoted equity shares held traded on an active market is based on
quoted (unadjusted) market prices at the end of the reporting period. The quoted market price used for financial assets
held by the Group is the current bid price. These instruments are included in level 1.
The fair value of the Group’s financial investments in unquoted equity warrants are not traded on an active market and
are based on significant observable inputs (level 2) at the end of the reporting period. These instruments are included
in level 2.
The fair value of the Group's contingent receivable is measured using management's weighted probability of each
scenario. These instruments are included in level 3.
2019
Assets measured at fair value:
Date of
valuation
Total
$
Quoted prices
in active
markets
(Level 1)
$
Significant
observable
inputs
(Level 2)
$
Significant
unobservable
inputs
(Level 3)
$
Shares in Listed Companies
30 June 2019
380,520
380,520
Unquoted Warrants in Listed Companies 30 June 2019
131,263
Contingent receivable
30 June 2019
54,500
-
-
-
131,263
-
-
-
54,500
2018
Assets measured at fair value:
Date of
valuation
Total
$
Quoted prices
in active
markets
(Level 1)
$
Significant
observable
inputs
(Level 2)
$
Significant
unobservable
inputs
(Level 3)
$
Shares in Listed Companies
30 June 2018
720,701
720,701
Unquoted Warrants in Listed Companies 30 June 2018
604,499
-
-
604,499
-
-
(e) Capital management policy
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and
to sustain future development of the business.
There were no changes in the Group’s approach to capital management during the year. Neither the Company nor any
of its subsidiaries are subject to externally imposed capital requirements. The Group defines capital as cash and cash
equivalents plus equity. The Board of Directors monitors capital on an ad-hoc basis. No formal targets are in place for
return on capital or gearing ratios as the Group has not derived any income from their mineral exploration.
Arrow Minerals Limited
2019 Annual Report
Page 59
24.
PARENT ENTITY INFORMATION
(a) Financial position
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
(b) Financial performance
Loss for the year
2019
$
1,576,670
8,762,006
10,338,676
342,014
342,014
9,996,662
35,136,180
2,479,794
(27,619,312)
9,996,662
2019
$
4,107,709
4,107,709
Restated
2018^
$
6,026,998
8,540,680
14,567,678
600,714
600,714
13,966,964
35,136,180
2,342,238
(23,511,454)
13,966,964
2018
$
550,627
550,627
(c) Commitments
Parent entity commitments are as disclosed within Note 19.
(d) Contingent assets and liabilities
Parent entity contingent assets and liabilities are as disclosed in note 17.
^Certain amounts shown here do not correspond to the 30 June 2018 financial statements and reflect adjustments
disclosed in Note 2.
Page 60
2019 Annual Report
Arrow Minerals Limited
Directors’ Declaration
In accordance with a resolution of the Board of Directors, I state that:
In the opinion of the Directors:
1.
The consolidated financial statements and accompanying notes set out on pages 29 to 60 are in accordance
with the Corporations Act 2001, including:
a.
giving a true and fair view of the Group’s financial position at 30 June 2019 and of its performance for
the year ended on that date: and
b.
complying with Accounting Standards and Corporations Regulations 2001; and
2.
3.
4.
There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become
due and payable; and
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2019.
The consolidated financial statements and notes are also in compliance with International Financial Reporting
Standards as disclosed in Note 1(a).
On behalf of the Board
Steven Michael
Executive Director
Perth, 24 September 2019
Arrow Minerals Limited
2019 Annual Report
Page 61
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ARROW MINERALS LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Arrow Minerals Limited “the Company” and its
controlled entities “the Group”, which comprises the consolidated statement of financial
position as at 30 June 2019, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of
its financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Financial Report section of our report. We are independent of the Group in
accordance with the auditor independence requirements of the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110
Code of Ethics for Professional Accountants “the Code” that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1(a) to the financial report which indicates that the Group reported
net cash used in operating activities of $1,207,643 (2018: $890,923), net cash used in
investing activities of $1,758,466 (2018: $1,188,268) and had cash and cash equivalents of
$753,368 (2018: $3,758,484). These conditions, along with other matters as set forth in Note
1(a), indicate the existence of a material uncertainty that may cast significant doubt about the
Group’s ability to continue as a going concern. Our opinion is not modified in respect of this
matter.
Pitcher Partners BA&A Pty Ltd
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ARROW MINERALS LIMITED
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed the key audit matter
Carrying value of exploration and evaluation
assets
Refer to Note 1(c), (m), (n) & 10
As disclosed in Note 10 of the financial report, as
at 30 June 2019, the Group held capitalised
exploration and evaluation assets of $8,550,831.
The carrying value of exploration and evaluation
expenditure is assessed for impairment by the
Group when facts and circumstances indicate
that the exploration and evaluation expenditure
may exceed its recoverable amount.
The determination as to whether there are any
indicators to require an exploration and
evaluation asset to be assessed for impairment,
involves a number of management judgments
including but not limited to:
• whether the Group has tenure of the
tenement;
• whether the Group has sufficient funds to
meet the tenement minimum expenditure
requirements; and
• whether there is sufficient information for a
decision to be made that the area of interest
is not commercially viable.
Disposal of Associate
Refer to Note 1(j) & 6
During the year, the Group disposed of a 49%
interest in the shares of Arrow (Pilbara) Pty Ltd.
The Group was required to calculate the gain on
disposal, which was complex due to the detailed
terms in the agreement and inherent complexity
of the transaction.
There were key terms assessed and judgements
made by management including but not limited
to:
• Assessment of loss of significant interest for
date of derecognition;
• Measurement of 49% interest in associate
under the equity method to date of sale; and
• Assessment of fair value of consideration
received.
Our procedures included, amongst others:
Obtaining an understating of and evaluating the
processes and controls associated with the
capitalisation of exploration and evaluation
expenditure, and those associated with the
assessment of impairment indicators.
Examining the Group’s right to explore in the
relevant area of interest, which included obtaining
and assessing supporting documentation. We
also considered the status of the exploration
licences as it related to tenure.
Considering the Group’s intention to carry out
significant exploration and evaluation activity in
the relevant exploration area, including an
assessment of the Group’s cash-flow forecast
models, discussions with senior management
and directors as to the intentions and strategy of
the Group.
Reviewing management’s evaluation and
judgement as to whether the exploration activities
within each area of interest have reached a stage
where the commercial viability of extracting the
resource could be determined.
Assessing the adequacy of the disclosures
included within the financial report.
Our procedures included, amongst others:
Obtaining an understanding of and evaluating the
processes and controls associated with the
accounting required for disposals.
Obtaining an understanding of the key terms
within the sale agreement between the Group
and Pacton Gold Inc., ensuring that the
transaction has been recorded and disclosed in
accordance with the terms of this agreement.
Re-performing the calculations of the gain on
disposal by comparing the consideration received
to the carrying value of the identified assets and
liabilities.
Agreeing the consideration received from the
sale to the bank statements and share
certificates.
Assessing the adequacy of the disclosures
included within the financial report.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ARROW MINERALS LIMITED
Share Based Payments
Refer to Note 1(s) & 21
Share based payments represent $137,406 of
the Group’s expenditure.
Share based payments must be recorded at fair
value of the service provided, or in the absence
of such, at the fair value of the underlying equity
instrument granted.
In calculating the fair value there are a number of
judgements management must make, including
but not limited to:
• Estimating the likelihood that the equity
instruments will vest;
estimating expected future share price
volatility;
expected dividend yield; and
risk-free rate of interest.
•
•
•
Our procedures included, amongst others:
Obtaining an understanding of the relevant
controls associated with the preparation of the
valuation model used to assess the fair value of
share based payments, including those relating
to volatility of the underlying security and the
appropriateness of the model used for valuation.
Critically evaluating and challenging the
methodology and assumptions of management in
their preparation of valuation model, including
management’s assessment of likelihood of
vesting, agreeing inputs to internal and external
sources of information as appropriate.
Assessing the Group’s accounting policy as set
out within Note 1(s) for compliance with the
requirements of AASB 2 Share-based Payment.
Assessing the adequacy of the disclosures
included within the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2019, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ARROW MINERALS LIMITED
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the financial report, including
the disclosures, and whether the financial report represents the underlying transactions
and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial
report. We are responsible for the direction, supervision and performance of the Group
audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ARROW MINERALS LIMITED
From the matters communicated with the directors, we determine those matters that were of
most significance in the audit of the financial report of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended
30 June 2019. In our opinion, the Remuneration Report of Arrow Minerals Limited, for the
year ended 30 June 2019, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
PITCHER PARTNERS BA&A PTY LTD
JOANNE PALMER
Executive Director
Perth, 24 September 2019
Additional Information
Shareholders Information
The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public
companies only.
Information as at 5 September 2019.
1. Shares on Issue
Total number of issued fully paid ordinary shares is 844,138,519. In addition, the Company has 120,872,133 quoted
options exercisable at 10¢ on or before 31 December 2019.
2. Distribution of Holders
Shareholders
Quoted Optionholders
No. of Holders
No. of Shares
No. of Holders No. of Options
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
> 100,000
Total
81
95
96
967
528
1,767
3. Unmarketable Parcels
9,630
268,350
734,264
39,721,482
803,404,793
844,138,519
39
89
123
205
122
602
17,366
294,116
882,716
6,806,662
112,871,273
120,872,133
The number of holders of less than a marketable parcel of fully paid shares is 914.
4. Substantial Shareholders
Shareholders who hold 5% or more of the issued capital of the Company as per substantial shareholder notices lodged
with ASX are listed below.
Name
Capital Di Limited
Thomas McKeith
Baltis Family Super Pty Ltd
GenGold Resource Capital Pty Ltd
5. Restricted Securities
Number of Shares Held
Percentage Held
80,000,000
69,151,050
68,046,880
61,484,380
9.48%
8.19%
8.06%
7.28%
There are no restricted securities currently on issue.
6. Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary Shares
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by
proxy has one vote on a show of hands.
Options
There are no voting rights attached to any class of options that is on issue.
7. On-market Buy-Back
Currently there is no on-market buy-back of the Company’s securities.
Arrow Minerals Limited
2019 Annual Report
Page 67
8
Top 20 Holders – Ordinary Shares
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Capital DI Limited
GenGold Resource Capital Pty Ltd
Zero Nominees Pty Ltd
Croesus Mining Pty Ltd
Perth Select Seafoods Pty Ltd
Mr Cuntong Cheng
Tarney Holdings Pty Ltd
Roxi Pty Ltd
R & K Watson Pty Ltd
Havelock Mining Investment Ltd
Mr Paul Hare
Fairbrother Holdings Pty Ltd
Imela Resources Exploration SARL
Mr Steven Michael
Southern Cross Capital Pty Ltd
Philip & Janet Turner Pty Ltd
BT Portfolio Services Limited
Mr Robert Arthur Behets + Mrs Kristina Jane Behets
Ocean Reef Holdings Pty Ltd
Mr Graham Allan Fraser
Units
80,000,000
61,484,380
34,482,759
22,748,931
22,000,000
17,556,867
14,375,000
13,250,000
13,125,000
11,103,002
10,000,000
9,175,000
9,088,930
8,837,142
8,750,000
8,594,160
8,437,500
8,250,000
7,500,000
7,468,750
% of Units
on issue
9.49
7.30
4.09
2.70
2.61
2.08
1.71
1.57
1.56
1.32
1.19
1.09
1.08
1.05
1.04
1.02
1.00
0.98
0.89
0.89
Totals: Top 20 holders of AMD ORDINARY FULLY PAID
Total Remaining Holders Balance
Total Holders Balance
376,227,421
467,911,098
844,138,519
44.57
65.43
100.00
9. Top 20 Holders – Quoted Options Exercisable at 10¢ on or before 31 December 2019
Rank Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Independence Group NL
Zenix Nominees Pty Ltd
Ian Michael Paterson Parker
Camrina Pty Ltd
Croesus Mining Pty Ltd
Croesus Mining Pty Ltd
M&K Korkidas Pty Ltd
LLB Bio Pty Ltd
Havelock Mining Investment Ltd
Tubechangers Pty Ltd
Ms Furong Zhang
Mr John Pakalniskis
Mr Luke Kukulj
Khe Sanh Pty Ltd
HSBC Custody Nominees (Australia) Limited
Eric Peter Murphy + Mrs Kim Lea Murphy
Citicorp Nominees Pty Ltd
Richmond Resources Pty Ltd
Mr Graeme Neale Black & Mrs Wendy Maree Black
Grasmere Nominees Pty Ltd
Units
17,241,380
13,793,105
6,125,000
5,750,000
5,122,024
4,328,038
3,800,000
2,970,000
2,775,751
2,477,550
1,992,446
1,862,007
1,600,000
1,125,000
1,090,713
1,050,000
1,033,216
1,000,000
1,000,000
1,000,000
% of Units
on Issue
14.26
11.41
5.07
4.76
4.24
3.58
3.14
2.46
2.30
2.05
1.65
1.54
1.32
0.93
0.90
0.87
0.85
0.83
0.83
0.83
Totals: Top 20 holders of AMDOA EX10¢ EXP31/12/2019
Total Remaining Holders Balance
Total Holders Balance
77,136,230
43,735,903
120,872,133
63.82
36.18
100.00
Page 68
2019 Annual Report
Arrow Minerals Limited
10. Unquoted Securities
As at 5 September 2019 the following securities over un-issued shares were on issue:
13,146,469 options exercisable at $0.07 on or before 31 December 2019.
120,150,000 options exercisable at $0.02 on or before 22 August 2022.
37,500,000 options exercisable at $0.0145 on or before 22 August 2023.
64,682,290 Class A Performance Rights expiring 26 August 2022.
64,682,290 Class A Performance Rights expiring 26 August 2022.
64,682,300 Class A Performance Rights expiring 26 August 2023.
11. Unquoted Equity Security Holders with Greater than 20% of an Individual Class
As at 5 September the following classes of unquoted securities had holders with greater than 20% of that class on
issue as set out below.
Options exercisable at 2.0¢ on or before 22 August 2022
Capital Di Limited
Options exercisable at 1.45¢ on or before 22 August 2023
Zenix Nominees Pty Ltd
Class A Performance Rights expiring 26 August 2022
GenGold Resource Capital Pty Ltd
Class B Performance Rights expiring 26 August 2022
GenGold Resource Capital Pty Ltd
Class C Performance Rights expiring 26 August 2023
GenGold Resource Capital Pty Ltd
12. Company Secretary
The name of the Company Secretary is Matthew Foy.
13. Registered Address
% Interest
33.29%
96.00%
100%
100%
100%
The address of the principal registered office is Unit 18, 40 St Quentin Avenue, Claremont WA 6010.
Telephone (08) 9383 3330.
14. Registers
The registers of securities are held at the following address:
Advance Share Registry
110 Stirling Highway
Nedlands WA 6009
Arrow Minerals Limited
2019 Annual Report
Page 69
Tenement Schedule as at 5 September 2019
Tenement ID
Holder
Interest
Granted
Expiry
E09/1618
E09/2169
E09/2170
E09/2197
E09/2198
E09/2283
E16/495
E16/498
E30/488
E30/493
E30/494
E77/2416
E77/2403
E77/2432
E28/2317
E28/1475
E28/2266
E28/2267
E39/1084
E39/1709
E39/1710
E39/1731
E39/2088
Arrow Minerals Limited & Zeus Resources Ltd
Arrow (Malinda) Pty Ltd
Arrow (Malinda) Pty Ltd
Arrow (Malinda) Pty Ltd
Arrow (Malinda) Pty Ltd
Arrow (Malinda) Pty Ltd
Arrow (Strickland) Pty Ltd
Arrow (Strickland) Pty Ltd
Arrow (Strickland) Pty Ltd
Arrow (Strickland) Pty Ltd
Arrow (Strickland) Pty Ltd
Arrow (Strickland) Pty Ltd
Arrow (Strickland) Pty Ltd
Arrow (Strickland) Pty Ltd
Arrow (Plumridge) Pty Ltd & Independence Group NL
Arrow (Plumridge) Pty Ltd & Independence Group NL
Arrow (Plumridge) Pty Ltd & Independence Group NL
Arrow (Plumridge) Pty Ltd & Independence Group NL
Arrow (Plumridge) Pty Ltd & Independence Group NL
Arrow (Plumridge) Pty Ltd & Independence Group NL
Arrow (Plumridge) Pty Ltd & Independence Group NL
Arrow (Plumridge) Pty Ltd & Independence Group NL
Arrow (Plumridge) Pty Ltd
16/227/MEMC/SG/DGCMIM
Gold Square Resources Sasu
16/226/MEMC/SG/DGCMIM
Gold Square Resources Sasu
16/228/MEMC/SG/DGCMIM
Gold Square Resources Sasu
17/046/MEMC/SG/DGCM
Gold Square Resources Sasu
17/047/MMC/SG/DGCM
Gold Square Resources Sasu
17/208/MMC/SG/DGCM
Black Star Ressources Africa Sasu
17/219/MMC/SG/DGCM
Black Star Ressources Africa Sasu
17/220/MMC/SG/DGCM
Black Star Ressources Africa Sasu
17/221/MMC/SG/DGCM
Black Star Ressources Africa Sasu
18/153/MMC/SG/DGCM
Farafina Resources Sasu
18/152/MMC/SG/DGCM
Farafina Resources Sasu
Divole E expansion
Gold Square Resources Sasu
Konkoira Expansion
Gold Square Resources Sasu
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
10%
10%
10%
10%
10%
10%
10%
10%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
16/05/2011
15/05/2021
16/05/2017
15/05/2022
16/05/2017
15/05/2022
28/04/2017
27/04/2022
28/04/2017
27/04/2022
Application
03/07/2017
02/07/2022
14/02/2019
13/02/2024
05/04/2017
04/04/2022
04/07/2017
03/07/2022
11/07/2017
10/07/2022
03/07/2017
02/07/2022
21/04/2017
20/04/2022
16/10/2017
15/10/2022
22/01/2014
21/01/2019
17/11/2004
16/11/2018
25/07/2013
24/07/2023
23/04/2013
22/04/2023
11/01/2006
10/01/2019
30/05/2014
29/05/2019
09/04/2013
08/04/2023
17/11/2004
16/11/2018
Application
20/12/2016
19/12/2025
20/12/2016
19/12/2025
20/12/2016
19/12/2025
18/05/2017
17/05/2026
18/05/2017
17/05/2026
09/11/2017
08/11/2026
20/11/2017
19/11/2026
20/11/2017
19/11/2026
20/11/2017
19/11/2026
24/04/2018
24/08/2027
24/04/2018
24/08/2027
Application
Application
Page 70
2019 Annual Report
Arrow Minerals Limited
www.arrowminerals.com.au