(ABN 49 112 609 846)
AND CONTROLLED ENTITIES
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2022
Annual Report 30 June 2022
CONTENTS
CORPORATE DIRECTORY _________________________________________________________________________________________________ 2
DIRECTORS’ REPORT ______________________________________________________________________________________________________ 5
AUDITOR’S INDEPENDENCE DECLARATION ___________________________________________________________________________ 35
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME _________________________________________________________ 36
CONSOLIDATED STATEMENT OF FINANCIAL POSITION _______________________________________________________________ 37
CONSOLIDATED STATEMENT OF CASH FLOWS _______________________________________________________________________ 38
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY _______________________________________________________________ 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ___________________________________________________________ 40
DIRECTORS’ DECLARATION_____________________________________________________________________________________________ 78
INDEPENDENT AUDITOR’S REPORT ____________________________________________________________________________________ 79
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Annual Report 30 June 2022
CORPORATE DIRECTORY
DIRECTORS
Dr Frazer Tabeart
Non-Executive Chairman
Mr Hugh Bresser
Managing Director
Mr Tommy McKeith
Non-Executive Director
COMPANY SECRETARY
Ms Catherine Grant-Edwards
Ms Melissa Chapman
PRINCIPAL & REGISTERED OFFICE
Suite 5, 63 Hay Street
Subiaco WA 6008
Telephone
(08) 9383 3330
Email
info@arrowminerals.com.au
AUDITORS
HLB Mann Judd (WA Partnership)
Level 4, 130 Stirling Street
Perth WA 6000
BANKERS
National Australia Bank Limited
Level 14, 100 St Georges Terrace
Perth WA 6000
SHARE REGISTRY
Advanced Share Registry Service
150 Stirling Highway
Nedlands WA 6009
STOCK EXCHANGE LISTING
Arrow Minerals Limited shares (AMD) are listed on the Australian Securities Exchange (ASX)
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Annual Report 30 June 2022
Chairman’s Letter
Dear Shareholder,
On behalf of your Directors, I am pleased to present Arrow Minerals Limited’s (Arrow or the Company) (ASX:AMD)
Annual Report and Financial Statements for the year ended 2022.
As reported in 2021, the world continued to grapple with the challenges presented by the COVID-19 pandemic and
the ensuing logistics supply chain delays and work force shortages. The measures we took to protect our people
delivered excellent results and maintained a stable, healthy workforce along with genuine progress on our project
portfolio.
Last year I wrote to you about 2021 being a transformative year for the Company, with Arrow entering into several
commercial agreements to acquire access to high-quality exploration permits, divesting non-core assets whilst
retaining value options, and growing the technical capability of the team.
I’m pleased to report that we have further consolidated and expanded on these theme’s, placing the Company in its
strongest position for many years with a clear, focussed strategy on high growth projects in West Africa. This has
been achieved under the stewardship of Mr Hugh Bresser, our Managing Director, who was formally appointed to
the position after the retirement of Howard Golden during the year. We wish Howard well and congratulate Hugh on
his appointment.
Arrow has made a conscious decision to focus its entire exploration effort in West Africa and has expanded its
portfolio to provide additional geographic and commodity diversity. In addition to the 1,200km2 of contiguous
exploration ground referred to as the Vranso Project in the highly prospective gold-rich Paleoproterozoic Boromo
belt in Burkina Faso, we have secured an option over the northern extension of the world class Simandou iron ore
province in Guinea. Subject to satisfactory completion of due diligence, Arrow can acquire a 60.5% interest in this
project which lies in the province hosting the largest high grade undeveloped iron ore deposits in the world, and one
which is about to benefit from significant investment in enabling infrastructure allowing the province to be developed.
Key progress made in West Africa during the year and subsequent to year end can be summarised as follows:
•
Consolidation of nine contiguous exploration permits covering the Bromo shear zone in central-west Burkina
Faso, providing Arrow access to in excess of 1,300km2 of fertile gold exploration ground.
• Drilling of nearly 3,500 metres of reverse circulation drilling across three high quality prospects that extended
the known mineralisation at Dassa by 1,000 metres, confirmed the results from the historical mineral resource
at Guido and highlighted previously unknown mineralisation at the Semapoun Prospect.
•
The identification of a highly anomalous Greenfields geochemical anomaly at the Kordie Prospect identified
through systematic exploration work to an almost drill ready stage.
•
Execution of an option agreement over the Simandou North Iron Project in Guinea where Arrow can earn a
60.5% over two years. With due diligence underway and anticipated to be completed by the middle of
October.
To reflect this strong focus on West Africa, all non-core Australian assets have now been divested, including the
recently announced sale of our Strickland Cu-Au Project and our residual 10% interest in the Malinda Lithium Project,
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Annual Report 30 June 2022
both of which raised significant funds for use in furthering our West African exploration portfolio. We retain exposure
to upside from the Strickland Copper Gold Project, notably:
•
•
A cash payment of $1,000,000 upon the identification of an inferred mineral resource containing >500,000oz
gold equivalent reported in accordance with JORC.
A retained 1% NSR royalty in relation to minerals mined on the Strickland Copper Gold Project).
I believe the company is now very well placed to deliver strong news flow and more importantly, significant progress
on resource delineation across several commodities in Burkina Faso and Guinea, with both countries being strongly
supportive of mining initiatives.
On behalf of the entire Board, I would like to thank you, the Company’s shareholders, for your continued support
during these trying times, and I look forward to reporting significant progress on our outstanding
West African projects during the next 12 months.
Dr Frazer Tabeart
Non-Executive Chairman
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Annual Report 30 June 2022
DIRECTORS’ REPORT
The Directors of Arrow Minerals Limited (Arrow or the Company) submit their report, together with the consolidated financial
statements comprising Arrow and its controlled entities (together the Group) for the year ended 30 June 2022.
INFORMATION ON DIRECTORS
The names and particulars of the Directors of the Company during or since the end of the year are as follows. Directors have been
in office since the start of the year to the date of this report unless otherwise stated.
Frazer Tabeart
Non-Executive Chairman
Experience
Dr Frazer 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 17 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.
Directorships of listed
Alma Metals Limited
November 2007 to present
companies held within the last
PolarX Ltd
July 2017 to present
three years
Hugh Bresser
Managing Director (Appointed Executive Director on 5 July 2021, transitioned to role of
Managing Director 1 March 2022)
Experience
Mr Bresser was appointed as Executive Director on 5 July 2021 in the role of Technical Director,
transitioning to the role of Managing Director effective 1 March 2022. He has a career in
exploration spanning more than 25 years. He has served in executive roles with Billiton, BHP
Billiton and Birimian Ltd and has previously held board positions in several listed companies.
Mr Bresser has significant experience in mineral exploration, executive management, mergers
and acquisitions, governance, government and community relations in the global resources
industry. He holds a BSc (Hons – First Class) in geology from James Cook University and an
MBA from Melbourne Business School, Mt Eliza. Mr Bresser is a Member of the AusIMM and
AIG.
None
Directorships of listed
companies held within the last
three years
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Annual Report 30 June 2022
Thomas McKeith
Non-Executive Director
Experience
Mr McKeith is a geologist with over 30 years’ experience in exploration, development and
mining. He was formerly Head of Growth for Gold Fields Ltd and CEO of Troy Resources.
Thomas led teams that discovered and developed several significant discoveries (near mine
and greenfields) in Australia, Mali, Ghana, Peru and Chile. He has been instrumental in several
major operating mine and resource project acquisitions in Australia, Canada, Brazil, Venezuela
and Burkina Faso. He is also a Fellow of the Australian Institute of Mining and Metallurgy.
Directorships of listed
Evolution Mining Limited
February 2014 to present
companies held within the last
Genesis Minerals Limited
November 2018 to present
three years
Prodigy Gold NL
June 2016 to September 2021
Howard Golden
Managing Director (Resigned 28 February 2022)
Experience
Mr Golden is geophysicist with over 35 years’ experience in exploration across six continents,
including significant operating experience throughout West Africa. He 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).
Directorships of listed
NV Gold Corporation (TSX.V:NVX)
June 2021 to present
companies held within the last
three years
JOINT COMPANY SECRETARY
Ms Catherine Grant‐Edwards (Chartered Accountant (CA)) and Ms Melissa Chapman (Certified Practicing Accountant (CPA),
AGIA/ACIS, GAICD) are directors of Bellatrix Corporate Pty Ltd (Bellatrix), a company that provides company secretarial and
accounting services to a number of ASX listed companies. Between them, Ms Chapman and Ms Grant‐Edwards have over 30 years
experience in the provision of accounting, finance and company secretarial services to public listed resource and private companies
in Australia and the UK, and in the field of public practice external audit.
REVIEW OF OPERATIONS
Summary
Arrow Minerals Limited executed a strategic repositioning throughout the year designed to deliver long-term value to shareholders
through the discovery and development of economic mineral deposits in West Africa. This strategy resulted in the consolidation of
the Vranso Gold Project in Burkina Faso and divestment of the Malinda Lithium Project in Australia. Additionally, subsequent to year
end (Subsequent Events) the Company secured an option to acquire a 60.5% interest in the Simandou North Iron Project in Guinea
and divested the Strickland Copper Gold Project in Australia.
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Annual Report 30 June 2022
BURKINA FASO
Vranso Gold Project
Arrow Minerals consolidated the Vranso Gold Project land position through a formal Exploration Joint Venture Agreement with
Trevali Mining Corporation (TSX:TV) incorporating eight exploration permits – Kikio, Kordie, Pilimpikou, Semapoun, and Viveo
(100% Trevali); and Divole East, Divole West and Dyapya (100% Arrow) in August 2021 and a purchase agreement for the Tombi
Ouest exploration permit in September 2021. The Vranso Gold Project, located 100km west of the capital of Burkina Faso,
Ouagadougou, now includes nine semi-contiguous exploration permits extending uninterrupted for over 80 kilometres along the
main NE-SW trending Boromo shear zone for the total area in excess of 1,300km2 of fertile gold exploration ground (Figure 1).
Figure 1. Vranso Gold Project exploration permits in Burkina Faso.
A major exploration programme on the Vranso Gold Project was conducted from November 2021 through to April 2022. The
program included Reverse Circulation Drilling (RC), Auger, Soil and Stream sediment geochemical sampling, and detailed
geological mapping.
Reverse Circulation drilling was conducted on the Guido, Semapoun and Dassa Prospects. A total of 35 holes were drilled for
3,472m. The drilling was designed to replicate the historical drill results obtained at the Guido Prospect, Semapoun Prospect and
extend the mineralisation previously identified at the Dassa Prospect.
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Annual Report 30 June 2022
Reverse Circulation Drilling (RC)
Guido Prospect
A total of 19 RC holes (2,288m) drilled at the Guido Prospect confirmed historical results and intersected near-surface gold
mineralisation hosted by two NNE-SSW trending structures extending over 3 km of strike.
•
Significant gold mineralisation interceptions included:
o
o
o
1.06 g/t Au over 17m from 21 metres (GUD_RC_21_001)
2.17 g/t Au over 8m from 83 metres (GUD_RC_21_010)
0.92 g/t Au over 11m from 145 metres (GUD_RC_21_011)
Figure 2. RC drilling significant intercepts from the Guido, Semapoun and Dassa Prospects on the Vranso Gold Project.
The Guido Prospect, shown in Figure 2, lies 7km north-east of the Perkoa Zinc Mine processing facility and is accessible by an all-
weather sealed road. Blackthorn Resources Ltd initially identified and drilled the Guido gold deposit in 2010, reporting a maiden
inferred Mineral Resource of 4.1 Mt at 1.06g/t Au at a 0.4g/t Au cut off (139,000 oz Au).
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Annual Report 30 June 2022
Semapoun Prospect
The Semapoun Prospect (Figure 2) lies 3km along strike from the Guido deposit within the structural corridor defined by the main
Boromo Shear Zone. Historical RAB and RC drilling targeting locally interpreted structural corridors at Semapoun intersected several
thick high-grade gold zones including significant gold intersections in three RC drillholes spaced over 500m apart. As part of the
2022 exploration program Arrow conducted surface geochemical sampling and geological structural mapping based on artisanal
workings in the area. A total of 10 RC holes (760m) were completed by Arrow to test the gold mineralisation along the geological
contact between the granodiorite and the surrounding sediments. The best result reported 1.06 g/t Au over 6m from 31 metres.
Divole West Permit - Dassa Deposit
Arrow discovered the Dassa Deposit in 2020, (Figure 2). It features two higher grade zones of gold mineralisation, both of which
are shallow, consistent, and mostly in the shallow oxide zone. The Dassa North and Dassa South mineralised zones extend over
1,000m and 600m respectively, and are both open along strike and at depth.
Figure 3. Interpreted mineralised envelope at the Dassa Prospect that remains open to the South and East.
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Annual Report 30 June 2022
Drilling during 2022 successfully targeted the previously untested southern extension of the main mineralised structure with six RC
holes (424m). The results of this drilling extended the interpreted strike of the known shallow oxide mineralised system to more
than 4km (Figure 3). Three holes, DW_RC_21_109, 110 and 111, successfully extended the known mineralised system by 1km
confirming the continuation of the Dassa gold system. Hole DW_RC_21_110 intersected 1.41g/t Au over 5m from 59 metres.
Stream Geochemistry Survey
Arrow applied modern gold exploration techniques over the northern exploration permits of the Vranso Project for the first time in
the search for an extensive gold mineralised system in this greenfield area. A total of 220 stream sediment samples, covering a
580km2 area, were collected from the drainage systems throughout the region. Analytical results from this survey identified a
50km2 area containing drainage systems shedding anomalous gold coincident with known regional gold mineralised structures
(Figure 4).
Figure 4. Stream sediment geochemical assay results highlighting anomalous drainages and NE-SW trending structure
Soil Geochemistry Programme
Arrow continued its systematic science driven exploration programme in 2022, applying grid soil geochemical sampling to the
50km2 stream sediment anomaly and along the 10km Sanguie-Semapoun structural corridor surrounding the Guido Prospect to
better define targets for future drilling. In total, 3,299 soil geochemical samples were collected.
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Annual Report 30 June 2022
Sanguie Semapoun Structural Corridor
Geological mapping conducted by Arrow on the Sanguie-Semapoun structural corridor identified a number of sub parallel
mineralised vein sets in addition to the already identified gold deposit at Guido. To advance the potential drill targets in the area
Arrow undertook a detailed soil sampling program over the Sanguie-Semapoun structural corridor on 400m spaced lines and 50m
centres. A total of 2,032 sites were sampled and analysed for gold by fire assay. The results highlighted and confirmed that the
Sanguie-Semapoun structural corridor contains multiple sub-parallel gold mineralised structures (Figure 5).
Figure 5. Soil geochemical gold assay results highlighting anomalous gold bearing structures.
Drilling has only been undertaken on two of these sub-parallel systems, Guido and Semapoun, successfully identifying the occurrence
of gold mineralisation at both prospects. Arrow confirmed five new sub-parallel systems, all extending for more than 2km of strike-
length, all of which remain to be drill tested.
Kordie Prospect
Stream sediment geochemical sampling by Arrow identified a 50km2 area of elevated gold in numerous drainage systems along a
regional NW-SE trending structure in the northern portion of the Vranso Project. Arrow conducted systematic broad spaced grid
geochemical sampling follow-up on 800m spaced lines and 50m centres across a large portion of the area (Figure 6). This first
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Annual Report 30 June 2022
pass was designed to evaluate an area where no previous exploration work has been conducted, and comprised 1,267 samples
which were analysed for gold by fire assay.
Figure 6. Kordie Prospect soil sampling area (white) over portion of gold anomalous stream sediment geochemical survey.
The results of this reconnaissance soil geochemistry program have confirmed the presence of in situ gold anomalism; the main
southern zone extending 2km with a northeast orientation and assay results consistently above 80ppb Au, and a second
anomaly extending for approximately 5km in a north-south direction, defined by results greater than 20ppb Au (Figure 7).
Arrow considers these results reinforce the potential for the Kordie Prospect to host an extensive gold mineralised system in a
greenfields area that provides the Company with a high-quality first mover opportunity.
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Annual Report 30 June 2022
Figure 7. Soil geochemical gold assay results highlighting two anomalous gold bearing structures.
Hounde South Joint Venture (AMD 100%, Fortuna earning in to 70%)
At Arrow’s joint venture with Fortuna Silver Mines in southern Burkina Faso, Fortuna is continuing its extensive programme of
auger drilling with in-fill over the most prospective areas.
GUINEA
Simandou North Iron Project
On 13 July 2022 Arrow announced the Company had executed a non-binding term sheet to acquire up to a 60.5% controlling
interest in Amalgamated Minerals Pte. Ltd. (Amalgamated), a private Singaporean registered company which holds a 100% interest
in the Simandou North Iron Project in Guinea, West Africa (refer ‘Subsequent Events’ for further details of the Proposed
Transaction).
The Simandou North Iron Project (Figure 8) consists of exploration permit 22967 which lies at the northern end of the Simandou
Range and forms an extension of the stratigraphy that hosts one of the largest undeveloped high-grade iron deposits in the
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Annual Report 30 June 2022
world, including Rio Tinto’s Simandou Project with a total measured, indicated and inferred mineral resource estimate of 2 billion
tonnes grading 65.5% iron (Rio Tinto Annual Report 2021). This is an exceptional early-stage opportunity that provides Arrow with
access to the premium iron belt in West Africa at a time where significant infrastructural improvements are underway.
Figure 8. Location map of Guinean Iron Ore Projects including the Simandou North Project
Historical exploration undertaken in the wider area by BSGR and Vale through the early to mid 2000’s, including airborne
magnetic geophysical surveys, geological mapping and completion of 4 diamond drill holes (157m) confirmed the continuation of
the iron hosting Simandou Group stratigraphy into the Simandou North permit (Figure 9).
Figure 9. Simandou North Permit map showing airborne magnetic geophysical image and historical drillhole locations within
interpreted Simandou Group stratigraphy and proposed rail line route (Datum WGS84-29N).
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Annual Report 30 June 2022
The signing of a framework agreement on 25 March 2022 by the government of Guinea with Rio Tinto and Winning Consortium
Simandou for a $US12bn investment, which included the construction of shared purpose railway from Beyla to Forécariah and a
deep-water port at Moribayah, Forécariah and the subsequent creation of the joint venture company La Compagnie du
TransGuineen, opens the way for Arrow to potentially establish itself as a major West African iron ore mining company.
AUSTRALIA
Strickland Copper Gold Project, Western Australia
Aligned with Arrow’s new strategic decision to deliver long-term value
to shareholders through the discovery and development of economic
mineral deposits in West Africa, Arrow announced the divestment of
the Strickland Copper Gold Project (Figure 10) on 13 July 2022
(Subsequent Events).
In July 2021 Arrow received the results from combined exploration
programs of
reverse circulation
(RC) drilling and downhole
electromagnetic (DHEM) geophysical surveys to identify the presence
of sulphides related to a mineralised VHMS system, both within and
proximal to the drillholes.
The best assay result was from drill hole, STKV009, which highlighted
a zone of elevated copper, 20m at 0.22% Cu, from 120m downhole.
The anomalous copper zone is close to the modelled DHEM conductor.
Malinda Lithium Project, Western Australia
On 17 March 2022 Arrow announced the renegotiation of commercial
terms with Electrostate Pty Ltd (Electrostate), under which Electrostate
purchased 90% of Arrow (Malinda) Pty Ltd, the holding company of
the Malinda Lithium Project in Western Australia (Figure 11).
The Malinda tenements sit within a south-east trending belt in the
Gascoyne Province of the Capricorn Orogen. This area is well endowed
with pegmatite-associated minerals, with historical workings recording
the presence of highly anomalous lithium and tantalum.
Arrow further announced the divestment of its residual 10% interest
on 8 August 2022 (Subsequent Events), and no longer has an interest
in this Project.
Figure 10: Location map of Strickland project,
Western Australia.
Figure 11. Location map of the Malinda Project
(E09/2169, E09/2283, E09/2170).
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Annual Report 30 June 2022
Competent Persons Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr Hugh Bresser, a Competent
Person who is a Member of the Australian Institute of Geoscientists and Australasian Institute of Mining and Metallurgy. Mr Bresser
is an employee of Milagro Ventures which provides executive and technical consultancy services to Arrow Minerals, Mr Bresser is in
the role of Managing Director of Arrow Minerals, he has sufficient experience that 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 Bresser consents
to the inclusion in the report of the matters based on his information in the form and context in which it appears.
CORPORATE
The following significant transactions and events occurred during the year:
Malinda Lithium Project
Arrow announced on 23 August 2021 that it had entered an earn-in agreement with Electrostate Pty Ltd (Electrostate) wherein
Electrostate may earn up to 85% of Arrow’s Malinda lithium project in Western Australia consiting of three exploration tenements,
E09/2169, E09/2170 and E09/2283 in the Gascoyne region of north-western WA. The agreement provided for Electrostate to perform
exploration activities on the tenements over an eighteen-month period in addition to cash payments to Arrow. In respect of this
earn-in arrangement, the Company received a total of $112,967 (consisting of $60,000 cash consideration and $52,967 for
reimbursement of exploration expenditure).
On 17 March 2022 Arrow announced that it had renegotiated commercial terms with Electrostate. Under the new terms Arrow and
Electrostate entered into a Share Sale Agreement (SSA) and associated Shareholders’ Agreement, pursuant to which Electrostate
would purchase a 90% equity interest in Arrow (Malinda) Pty Ltd and Arrow would retain a 10% non-diluting free-carried interest
through to a decision to mine. Total cash consideration for the transaction, which completed on 6 April 2022, was $500,000.
As referred to in Subsequent Events, Arrow further announced the divestment of its residual 10% interest on 8 August 2022.
Board Changes
Mr Hugh Bresser was appointed as an Executive Director on 5 July 2021 and initially served in the role of Technical Director.
During the year the Company completed a corporate restructure. Effective 28 February 2022, Mr Howard Golden stepped down
from the Board and Mr Hugh Bresser transitioned to the role of Managing Director effective from 1 March 2022.
Employee Securities Incentive Plan
On 25 October 2021, the Company issued 4,300,000 unlisted options exercisable at $0.009 expiring 11 October 2024 to employees
pursuant to the Employee Securities Incentive Plan (ESIP). The ESIP was approved by shareholders on 11 November 2019.
Annual General Meeting
The Company held its annual general meeting of shareholders on 25 November 2021 (AGM) where all resolutions put to shareholders
were decided by way of a poll.
CHANGES IN CAPITAL STRUCTURE
Movements in the securities of the Company during the year ended 30 June 2022 is summarised as follows:
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Annual Report 30 June 2022
Shares
There were no new shares issued during year.
During the year, the Company bought back, for no consideration, the following shares which were previously issued under the
Company’s existing Employee Share Plan (ESP):
▪
▪
▪
6,250,000 shares (cancelled 30 July 2021);
1,800,000 shares (cancelled 1 November 2021); and
400,000 shares (cancelled 22 December 2021).
Convertible Notes
There were no movements in Convertible Notes during the year.
Unlisted Options
During the year the Company issued the following unlisted options:
▪
▪
▪
4,300,000 unlisted options exercisable at $0.009 expiring 11 October 2024 to employees pursuant to the ESIP;
8,000,000 unlisted options with an exercise price of $0.009 expiring 25 November 2024 were issued to Directors (or their
nominees); and
5,000,000 unlisted options with an exercise price of $0.011 expiring 25 November 2025 were issued to Directors (or their
nominees).
There were no unlisted options exercised or lapsed during the year.
Performance Rights
There were no movements in performance rights during the year.
Securities on Issue at 30 June 2022
Quoted Securities
Ordinary shares on issue (ASX:AMD)
Unquoted Securities
Options exercisable at $0.020 on or before 22/08/2022
Options exercisable at $0.0145 on or before 22/08/2023
Options exercisable at $0.0125 on or before 15/10/2022
Options exercisable at $0.001 on or before 11/12/20232
Options exercisable at $0.009 on or before 11/10/20242
Options exercisable at $0.009 on or before 25/11/2024
Options exercisable at $0.011 on or before 25/11/2025
Class B Performance Rights subject to performance conditions expiring on 26/08/20223
Class C Performance Rights subject to performance conditions expiring on 26/08/20234
Convertible Notes
1 Includes 11,000,000 shares under restriction pursuant to the ESP
2 Pursuant to ESIP
1,823,931,7601
120,150,000
37,500,000
10,000,000
2,850,000
4,300,000
8,000,000
5,000,000
69,682,290
69,682,300
1,000,000
3 Class B Performance Rights Milestone: Announcement by Arrow of a JORC 2012 compliant Inferred, Indicated and Measured
Resource collectively of at least 500,000oz of gold located on the Tenements
4 Class C Performance Rights Milestone: Announcement by Arrow of a JORC 2012 compliant Inferred, Indicated and Measured
Resource collectively of at least 1,000,000oz of gold located on the Tenements
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Annual Report 30 June 2022
PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was mineral exploration in Burkina Faso and Western Australia. There were no
significant changes in the nature of the Group’s principal activities during the year.
SIGNFICANT CHANGES IN STATE OF AFFAIRS
There have been no changes in the state of affairs of the Group other than those disclosed in the review of operations.
RESULTS OF OPERATIONS
The net loss after tax for the year ended 30 June 2022 was $3,457,696 (2021: Loss of $2,678,461).
SUMMARY OF FINANCIAL POSITION
At 30 June 2022, the Group’s cash reserves were $271,819 (2021: $3,283,858). The overall decrease in cash is mainly attributable to
outflows from operating activities of $1,300,840 (2021: $1,382,996), exploration expenditure of $2,085,236 (2021: $1,997,126), and
inflows from other investing activities of $612,967 (2021: 759,155). There were no cash inflows from financing activities during the
year (2021: $4,823,821 gross inflows from fund raising activities). Net assets of the Group at 30 June 2022 were $8,194,038 (2021:
$11,551,110).
ENVIRONMENTAL ISSUES
The Group 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.
FUTURE DEVELOPMENTS
Arrow’s strategic focus is to deliver long-term value to shareholders through the discovery and development of economic mineral
deposits in West Africa. Arrow will continue to advance the Vranso Project in Burkina Faso toward resource definition whilst seeking
additional growth opportunities in the region. The Group continues to review new project venture opportunities which are consistent
with its strategy of discovering economic mineral deposits. The Company continues to implement its strategy to divest its non-core
Australian assets.
Refer ‘Subsequent Events’ which highlights the successful implementation of the Company’s strategic plan.
SUBSEQUENT EVENTS
Non-Brokered Private Placement of $350,000
On 13 July 2022, the Company announced it had received commitments as part of a non-brokered private placement to qualified
sophisticated and professional investors to raise $350,000 via the issue of 58,333,334 shares in the Company at an issue price of
$0.006 per share (Placement).
Divestment of Strickland Copper Gold Project, WA
On 13 July 2022, the Company announced that it has executed a tenement sale and purchase agreement (via its subsidiary) with
Dreadnought Resources Ltd (ASX:DRE) (Dreadnought) by which Dreadnought will acquire a 100% interest in the Strickland Copper
Gold Project (comprising E16/495, E30/493, E30/494, E77/2403, E77/2416, E77/2432, E77/2634) in Western Australia. Settlement of
this transaction occurred on 1 August 2022.
Pursuant to the terms of the agreement:
▪
Arrow received $20,000 cash payment upon signing of the agreement;
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Annual Report 30 June 2022
▪
Arrow received $280,000 cash payment at settlement;
▪ Dreadnought issued Arrow 2,350,000 fully paid ordinary shares in Dreadnought at settlement (escrowed until 31 January
2023);
▪
Arrow will receive a further cash payment of $300,000 by 30 November 2022;
▪ On the identification and reporting of JORC compliant inferred mineral resource of >500,000oz gold equivalent
Dreadnought will pay Arrow $1,000,000 cash; and
▪
Arrow will retain a total 1% Net Smelter Return royalty in relation to minerals mined by or on behalf of Dreadnought on
the Strickland Copper Gold Project.
Non-Binding Term Sheet to Acquire 60.5% in the Simandou North Iron Project
On 13 July 2022, the Company announced that it has executed a non-binding term sheet to acquire up to a 60.5% controlling
interest in Amalgamated Minerals Pte. Ltd. (Amalgamated), a private Singaporean registered company, which holds a 100% interest
in the Simandou North Iron Project in Guinea, West Africa (Proposed Transaction).
It should be noted that the current agreement is in the form of a non-binding term sheet. Whilst the parties have entered into this
non-binding term sheet willingly and in good faith, there are no guarantees final definitive agreements will be executed or that the
Proposed Transaction will proceed.
The key commercial terms upon which Arrow will look to acquire up to a 60.5% interest in Amalgamated under the Proposed
Transaction are outlined as follows:
▪
Arrow to issue 81,250,000 fully paid ordinary Arrow shares for three-month exclusivity option to acquire up to a 60.5%
interest in the Simandou North Project through Amalgamated (Exclusivity Consideration Shares);
▪
Subject to satisfactory due diligence and certain conditions precedent, including Arrow obtaining all necessary shareholder
approvals, Arrow may purchase a 33.3% interest in Amalgamated from Ropa Investments (Gibraltar) Limited for 500,000,000
fully paid ordinary Arrow shares (Stage 1);
▪
Arrow will look to provide, by way of an unsecured, interest-free shareholder loan, $2.5 million of exploration expenditure
funding for the Simandou North Iron Project within 24 months from Stage 1 completion (Expenditure Commitment),
which will be repayable in cash by Amalgamated on or before the date that is 15 years after the date on which any part
of the loan is first advanced to Amalgamated or such other date as agreed between Arrow and Amalgamated (Loan). The
Loan will not be convertible into additional shares in Amalgamated;
▪
If the Expenditure Commitment is satisfied by Arrow and subject to certain conditions precedent, including Arrow obtaining
all necessary shareholder approvals, Arrow may purchase a further 27.2% interest in Amalgamated for $1,000,000, either
through the issue of Arrow shares based on a 10-day VWAP or cash, at the sole discretion of Arrow, to receive a controlling
60.5% interest in Amalgamated (Stage 2); and
▪
Arrow and the other Amalgamated shareholders will enter into a shareholders deed to govern, amongst other things, the
terms on which future exploration on the Simandou North Iron Project may be progressed and funded.
If Arrow decides to proceed with the Proposed Transaction following its successful and satisfactory completion of the due diligence
investigations of Amalgamated and the Simandou North Iron Project, and having entered into definitive binding agreements, Arrow
may need to raise additional capital to provide the $2.5 million Expenditure Commitment and associated Loan. Arrow anticipates
that such capital raise will be undertaken in late October 2022 either via an equity placement to professional or sophisticated
investors (to which shareholder approval under Listing Rule 7.1 will be sought) or via a shareholder supported rights issue, in both
cases and subject to market conditions, at an anticipated issue price of at least $0.006 per share, being the same issue price as the
Placement (Capital Raise). Subject to all applicable laws (including any necessary shareholder approvals), existing Amalgamated
shareholder Ropa Investments (Gibraltar) Limited, may potentially look to underwrite the Capital Raise.
19
Annual Report 30 June 2022
Arrow engaged the services of CH-Qorum GmbH (an unrelated party) (Facilitator) to introduce and engage Amalgamated in relation
to the Simandou North Project and act as an exclusive facilitator to Arrow in connection with the proposed transaction. For purposes
of facilitating an introduction to Amalgamated and assisting in securing a successful transaction and investment by Arrow in the
Simandou North Project, the Facilitator was entitled to be issued 81,250,000 fully paid ordinary shares in Arrow (Facilitator Fee
Shares).
Sale of remaining 10% interest in Malinda Lithium Project, WA
On 8 August 2022 the Company announced that it had entered into a Share Sale Agreement with Electrostate for the sale of Arrow’s
remaining 10% equity interest in Arrow (Malinda) Pty Ltd, the holding company of the Malinda Lithium Project in Western Australia.
The total cash consideration for the sale was A$700,000, which was received upon completion of the transaction on 8 August 2022.
Shares
A total of 220,833,334 shares were issued subsequent to 30 June 2022, including:
▪
▪
▪
58,333,334 shares issued on 14 July 2022 (being the Placement Shares);
81,250,000 shares issued on 14 July 2022 (being the Exclusivity Shares); and
81,250,000 shares issued on 19 July 2022 (being the Facilitator Fee Shares).
On 19 August 2022, a total of 11,000,000 shares previously issued under the ESP were bought back for no consideration and
cancelled.
Options
On 22 August 2022, a total of 120,150,000 unlisted options exercisable at $0.02 expired.
Performance Rights
On 26 August 2022, a total of 69,682,290 performance rights (Class B) expired.
DIVIDENDS PAID OR RECOMMENDED
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the
date of this report.
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 Group at any time during the current financial year and have been in office
for the entire period unless indicated otherwise:
Dr Frazer Tabeart
Mr Hugh Bresser
Mr Thomas McKeith
Mr Howard Golden
Non-Executive Chairman
Managing Director (appointed as an Executive Director on 5 July 2021 and transitioned
to the role of Managing Director on 1 March 2022)
Non-Executive Director
Managing Director (resigned 28 February 2022)
Compensation levels for Directors and key management personnel of the Group are competitively set to attract and retain
appropriately qualified and experienced directors and executives.
20
Annual Report 30 June 2022
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. No independent advice was
obtained during the year ended 30 June 2022 to provide recommendations in respect of remuneration.
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 Group.
Remuneration
Details of the remuneration of the key management personnel (KMP) of the Group are set out in the following table. Currently,
Directors are responsible for the management of the Group.
30 June 2022
Short-term
Post
Annual Leave
Equity settled
Total
Performance-
Benefits
Employment
($)^
share-based
($)
related rem. (%)
Salary & Fees ($)
Benefits ($)
payments ($)
H Bresser1
H Golden2
F Tabeart3
T McKeith
Total
261,980
183,333
48,000
36,000
529,313
-
18,333
-
3,600
21,933
-
297
-
-
12,331
9,792
4,639
4,639
274,311
211,755
52,639
44,239
297
31,401
582,944
4%
5%
9%
10%
5%
1 Mr Hugh Bresser was appointed as an Executive Director on 5 July 2021 and transition to the role of Managing Director on 1
March 2022.
2 Mr Howard Golden resigned as Managing Director on 28 February 2022 and ceased to be a KMP. On this date, Mr Golden’s annual
leave entitlement was $26,537.
3 Director fees for Dr Frazer Tabeart were paid to Geogen Consulting Pty Ltd, a related entity of Dr Frazer Tabeart.
^ Movement in provision for annual leave.
30 June 2021
Short-term
Post
Annual Leave
Equity settled
Total
Performance-
Benefits
Employment
($)^
share-based
($)
related rem. (%)
Salary & Fees ($)
Benefits ($)
payments ($)
H Golden
F Tabeart1
T McKeith
J Owen2
Total
250,000
23,750
19,231
48,000
36,000
57,500
-
3,420
5,463
391,500
32,633
-
-
6,893
26,124
4,374
692
1,093
1,093
7,252
297,355
48,692
40,513
70,949
457,509
1 Director fees for Dr Frazer Tabeart were paid to Geogen Consulting Pty Ltd, a related entity of Dr Frazer Tabeart.
2 Ms Owen resigned as Chief Financial Offer on 31 March 2021.
^ Movement in provision for annual leave.
1%
1%
3%
2%
2%
21
Annual Report 30 June 2022
Share Based Remuneration
Shares
On 17 April 2014, shareholder approval was received for the adoption of an Employee Share Plan (ESP or Plan). The Plan was
renewed following receipt of shareholder approval at the 22 November 2017 annual general meeting. The renewal period of the
Plan was for three (3) years.
The objective of the ESP is to attract directors with suitable qualifications, skills and experience to plan, carry out and evaluate the
Group’s 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 Group 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. On the basis that the shares can be returned by the employee at any time with no consequence, Accounting Standards
require that the issue of the shares is treated as an ‘option’ for accounting purposes.
See note 21 for further details.
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 2001 in consideration for the cancellation of any
Loan granted;
22
Annual Report 30 June 2022
(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 2001 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.
A summary of the ESP was set out in the Notice of General Meeting held 15 August 2019.
There were no new shares granted pursuant to the ESP during the year ended 30 June 2022 (30 June 2021: nil).
23
Annual Report 30 June 2022
ESP Share Holdings
The number of shares held under the Company’s ESP during the financial year by each director of Arrow and any other key management personnel of the Group, including their personally
related parties, are set out below:
30 June 2022
Opening Balance
Awarded3
Vested
Lapsed4
Net change other
Closing balance
No.
No.
No.
No.
No.
H Bresser1
Managing Director
Vested Unvested
-
-
H Golden
Managing Director
4,500,000
1,500,000
F Tabeart
Non-Exec. Chairman
1,525,000
375,000
T McKeith
Non-Exec. Director
1,125,000
375,000
Total
7,150,000
2,250,000
-
-
-
-
-
-
-
-
-
-
-
-
(400,000)
-
No.
-
(6,000,000)2
-
-
No.
No.
Vested
Unvested
-
-
1,125,000
1,125,000
2,250,000
-
-
375,000
375,000
750,000
(400,000)
(6,000,000)
1 Mr Hugh Bresser was appointed as an Executive Director on 5 July 2021 and assumed the position of Managing Director on 1 March 2022.
2 Upon resignation on 28 February 2022, Mr Golden held 6,000,000 ESP shares.
3 Awarded subject to meeting vesting conditions.
4 Cancellation of ESP Shares following expiration of term.
Share holdings (excluding ESP share holdings)
The number of ordinary shares in the Company held during the financial year (excluding ESP share holdings) by each director of Arrow and any other key management personnel of the
Group, including their personally related parties, are set out below:
30 June 2022
Opening Balance Granted as remuneration
Net change other
Closing balance
H Bresser
Managing Director1
H Golden
Managing Director
F Tabeart
Non-Exec. Chairman
T McKeith
Non-Exec. Director
Total
No.
-
5,333,333
2,166,667
153,334,673
160,834,673
No.
-
-
-
-
-
No.
6,000,0002
(5,333,333)3
-
-
666,667
No.
6,000,000
-
2,166,667
153,334,6734
161,501,340
24
Annual Report 30 June 2022
1 Mr Hugh Bresser was appointed as an Executive Director on 5 July 2021 and assumed the position of Managing Director on 1 March 2022.
2 Upon appointment as a Director, Mr Bresser held 3,000,000 shares. On 10 September 2021, Mr Bresser purchased an additional 3,000,000 on-market for $18,000. Shares are held in
Milagro Ventures Pty Ltd of which Mr Bresser is a director.
3 Upon resignation as a Director on 28 February 2022, Mr Golden held 5,333,333 shares.
4 Mr Thomas McKeith’s interest in shares at 30 June 2022 comprises:
-
-
22,168,003 shares held directly; and
131,166,670 shares held indirectly by GenGold Resource Capital Pty Ltd (GenGold), a company which Mr McKeith holds a significant shareholder interest, and is a director of.
Option holdings
The number of options in the Company held during the financial period by each director of Arrow and any other key management personnel of the Group, including their personally
related parties, are set out below:
30 June 2022
Opening
Granted as
Options
Net change
Closing
Option Details
Balance
remuneration
exercised
No.
No.
No.
other
No.
balance
No.
Grant Date
Expiry
Exercise
Value per
Vested /
Date
Price
Option3
Unvested
H Bresser Managing Director1
-
-
H Golden Managing Director2
500,000
F Tabeart Non-Exec. Chairman
-
-
-
2,500,000
2,500,000
-
2,500,000
2,500,000
1,500,000
T McKeith Non-Exec. Director
1,000,000
-
Total
-
1,500,000
1,500,000
13,000,000
-
-
-
-
-
-
-
-
-
-
-
2,500,000
25/11/2021
25/11/2024
2,500,000
25/11/2021
25/11/2025
(500,000)2
(2,500,000)2
(2,500,000)2
-
-
-
15/08/2019
22/08/2022
25/11/2021
25/11/2024
25/11/2021
25/11/2025
-
-
-
1,500,000
25/11/2021
25/11/2024
1,000,000
15/08/2019
22/08/2022
1,500,000
25/11/2021
25/11/2024
(5,500,000)
9,000,000
$0.009
$0.011
$0.020
$0.009
$0.011
$0.009
$0.020
$0.009
$0.0040
Unvested
$0.0043
Unvested
N/A
Vested
$0.0040
Unvested
$0.0043
Unvested
$0.0040
Unvested
N/A
Vested
$0.0040
Unvested
1 Mr Hugh Bresser was appointed as an Executive Director on 5 July 2021 and assumed the position of Managing Director on 1 March 2022. Options are held in Milagro Ventures Pty Ltd
of which Mr Bresser is a director.
25
Annual Report 30 June 2022
2 Upon resignation on 28 February 2022, Mr Golden held a total of 5,500,000 options.
3 In respect of options granted to a KMP as part of their remuneration package, this table discloses the fair value at the grant date of the options using the Black Scholes 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.
26
Annual Report 30 June 2022
Performance Rights holdings
The number of Performance Rights in the Company held during the financial period by any relevant director of Arrow
and any other key management personnel of the Group, including their personally related parties, are set out below:
30 June 2022
Opening
Granted as
Conversion to
Net change
Balance
remuneration
No.
No.
shares
No.
T McKeith1 Non-Exec.
139,364,590
Director
Total
139,364,590
-
-
-
-
other
No.
-
-
Closing
balance
No.
139,364,590
139,364,590
1 Performance shares shown in this table are held indirectly by GenGold.
Non-Executive Director Fees
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 receive a fixed base fee for their services of $36,000 per annum (excl. GST, excl. share-based
payments) for services performed. Non-executive Directors’ fees and payments are reviewed annually by the Board.
There are no termination or retirement benefits for Non-Executive Directors (other than statutory superannuation
where applicable).
Service Agreements
The Company had service agreements with the following key management personnel during the year:
Current key management personnel:
Hugh Bresser – Managing Director (appointed as Executive Director on 5 July 2021 and assumed position of
Managing Director on 1 March 2022)
Mr Bresser’s executive services are provided pursuant to a consultancy agreement between Milagro Ventures Pty Ltd
and the Company. Consulting fees pursuant to this agreement are $264,000 per annum. The term of the contract is
to 30 June 2025, unless terminated earlier or extended by mutual agreement. Either party may terminate the
agreement with three month’s written notice. The Company may also summarily terminate the agreement without
cause in certain circumstances including gross misconduct by the Executive or actions by the Executive which bring
the Company into disrepute.
Mr Bresser is entitled to an annual cash bonus of up to 25% of his annual consultancy fee subject to any applicable
laws and the satisfaction of relevant key short term performance indicators to be set by the Board in its sole discretion.
The Board has determined short term performance indicators based on FY23 metrics linked to shareholder value
(including capital raising, share price performance, resource identification at existing projects, and new projects)
(Short-term Incentive).
Frazer Tabeart – Non-executive Chairman
Dr Tabeart’s remuneration for services as Non-Executive Chairman is $48,000 per annum, via a consulting agreement
with Geogen Consulting Pty Ltd. No additional fees were paid to director-related entity Geogen Consulting Pty Ltd
for consulting services.
27
Annual Report 30 June 2022
Thomas McKeith – Non-Executive Director
Mr McKeith is entitled to $36,000 per annum plus statutory superannuation contributions in remuneration for his
services as a Non-Executive Director. This remuneration is subject to annual review by the Board.
Former key management personnel:
Howard Golden – Managing Director (resigned on 28 February 2022)
Mr Golden was engaged under an employment contract for an indefinite term subject to specified termination
provisions. His remuneration package comprised an annual salary of $275,000 per annum plus statutory
superannuation contributions. Mr Golden stepped down as a Director of Arrow on 28 February 2022 and ceased as
an employee of the Company on 31 May 2022 at the end of his three month notice period.
Remuneration linked to performance
There is an element of performance linked to options issued to Executive Directors and Non-Executive Directors as
part of their remuneration packages, which is inherent in the exercise price of the options and the share price
performance of the Company, providing a link between shareholder wealth and remuneration of Directors.
Aside from options issued to Directors and the Short-term Incentive arrangement in respect of Mr Bresser (detailed
above), Directors are remunerated in line with their service agreements.
Other Transactions with key management personnel
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. Mitchell River Group Pty Ltd is a related party of Director Dr Tabeart.
During the year, an amount of $53,210 (2021: $22,665) was paid or payable in relation to these services. An amount
of $550 (2021: $682) was payable at year end.
The Company has entered into a service agreement with GenGold Resources Capital Pty Ltd (GenGold) for the hire
of minor exploration equipment. Mr McKeith is a related party of GenGold. During the year, an amount of $13,891
(2021: $9,000) was paid or payable in relation to this equipment. An amount of nil (2021: $750) was payable at year
end.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties.
Other Financial Information
The following table shows the Group’s financial results for the last five financial years, as well as the share prices at
the end of the respective financial years.
2022
2021
2020
2019
2018
Net loss before tax ($)
3,457,696
2,678,461
6,993,446
3,909,752
685,532
Net loss after tax ($)
3,457,696
2,678,461
6,993,446
3,909,752
550,628
Share price at start of year (cents)
Share price at end of year (cents)
0.6
0.2
0.7
0.6
1.1
0.7
2.5
1.1
2.6
2.5
Basic and diluted loss per share (cents)
0.189
0.197
0.857
1.256
0.270
28
Annual Report 30 June 2022
Adoption of Remuneration Report by Shareholders
The adoption of the Remuneration Report for the financial year ended 30 June 2021 was put to the shareholders of
the Company at the Annual General Meeting held 25 November 2021. The resolutions were passed and decided by
way of poll (99.55% 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
29
Annual Report 30 June 2022
Directors’ Interests in the Shares, Options and Performance Rights of the Company
As at the date of this report, the relevant direct and indirect interest of each director in the shares, options and
performance rights of Arrow were:
Ordinary shares
Ordinary shares
Unlisted
Performance
(non-ESP shares)
(ESP shares)
Options
Rights
No.
No.
No.
2,166,667
12,000,000
159,834,673
-
-
-
1,500,000
5,000,000
1,500,000
No.
-
69,682,300
F Tabeart1
H Bresser2
T McKeith3
1 Mr Tabeart is a director of Revenge Holdings Pty Ltd which holds 2,166,667 ordinary shares (indirectly held).
2 Mr Bresser is a director of Milagro Ventures Pty Ltd which holds 6,000,000 ordinary shares and 5,000,000 options (indirectly
held).
3 Mr McKeith is a director of GenGold which holds 131,166,670 ordinary shares and 69,682,300 Performance Rights (indirectly
held).
Shares under Options
No options were exercised during the 2022 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 unlisted options over ordinary shares of the Company existed at 30 June 2022:
Expiry Date
22 August 2022
15 October 2022
22 August 2023
11 December 2023
11 October 2024
25 November 2024
25 November 2025
No.
Exercise Price
120,150,000
10,000,000
37,500,000
2,850,000
4,300,000
8,000,000
5,000,000
187,800,000
$0.020
$0.0125
$0.0145
$0.010
$0.009
$0.009
$0.011
The following unlisted options over ordinary shares of the Company existed at the date of this report:
Expiry Date
15 October 2022
22 August 2023
11 December 2023
11 October 2024
25 November 2024
5 August 2025
25 November 2025
No.
Exercise Price
10,000,000
37,500,000
2,850,000
4,300,000
8,000,000
9,900,000
5,000,000
77,550,000
$0.0125
$0.0145
$0.010
$0.009
$0.009
$0.006
$0.011
30
Annual Report 30 June 2022
Performance rights
The following performance rights existed at 30 June 2022:
Class B Performance Rights subject to performance conditions expiring on 26/08/2022
Class C Performance Rights subject to performance conditions expiring on 26/08/2023
The following performance rights existed at the date of this report:
No.
69,682,290
69,682,300
No.
Class C Performance Rights subject to performance conditions expiring on 26/08/2023
69,682,300
Securities on Issue at Date of this Report
The capital structure of Arrow, as at date of this report is set out below:
Quoted Securities
Ordinary shares on issue (ASX:AMD)
Unquoted Securities
Options exercisable at $0.0145 on or before 22/08/2023
Options exercisable at $0.0125 on or before 15/10/2022
Options exercisable at $0.010 on or before 11/12/20231
Options exercisable at $0.009 on or before 11/10/20241
Options exercisable at $0.009 on or before 25/11/2024
Options exercisable at $0.006 on or before 05/08/2025
Options exercisable at $0.011 on or before 25/11/2025
Class C Performance Rights subject to performance conditions expiring on 26/08/20232
Convertible Notes
1 Pursuant to ESIP
2,033,765,094
37,500,000
10,000,000
2,850,000
4,300,000
8,000,000
9,900,000
5,000,000
69,682,300
1,000,000
2 Class C Performance Rights Milestone: Announcement by Arrow of a JORC 2012 compliant Inferred, Indicated and
Measured Resource collectively of at least 1,000,000oz of gold located on the Tenements
MEETINGS OF DIRECTORS
The following table sets out the number of Directors’ meetings held during the year and the number of meetings
attended by each Director.
Board
Audit Committee
Risk Committee
Eligible
Attended
Eligible
Attended
Eligible
Attended
F Tabeart
H Bresser1
H Golden2
T McKeith
7
7
3
7
7
6
3
7
2
-
-
2
2
-
-
2
1
1
-
1
1
1
-
1
1 Mr Hugh Bresser was appointed as an Executive Director on 5 July 2021 and assumed the position of Managing
Director on 1 March 2022.
2 Resigned as Managing Director on 28 February 2022.
31
Annual Report 30 June 2022
INDEMNIFICATION OF AUDITORS AND OFFICERS
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.
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 HLB Mann Judd (WA Partnership) or its associates for the audit
and non-audit services provided during the year are set out in note 27 to the financial 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 (including Independence Standards).
AUDITOR INDEPENDENCE
The auditor’s independence declaration for the year ended 30 June 2022 has been received and is included in this
annual report.
32
Annual Report 30 June 2022
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.
Signed in accordance with a resolution of the Directors
Hugh Bresser
Managing Director
Perth, 2 September 2022
33
Annual Report 30 June 2022
CORPORATE GOVERNANCE STATEMENT
The Board 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 2022 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/company-information/corporate-
governance/
34
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Arrow Minerals Limited for the
year ended 30 June 2022, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
2 September 2022
B G McVeigh
Partner
35
Annual Report 30 June 2022
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Continuing Operations
Income
Net gain/(loss) on financial assets/liabilities measured at fair
value through profit or loss
Employee benefits expenses
Occupancy costs
Amortisation of right of use assets
Impairment of exploration and evaluation assets
Finance costs
Depreciation
Share-based payment expense
Administration and other expenses
Note
30 June 2022
30 June 2021
$
$
2(a)
365,352
539,928
2(b)
10(a)
2(c)
21(a)
2(d)
198,411
(429,631)
(46,615)
(14,803)
(112,288)
(454,386)
(28,147)
(69,784)
(2,460,205)
(1,573,498)
(89,181)
(23,366)
(59,945)
(145,488)
(68,648)
(10,377)
(897,713)
(755,773)
Loss before tax
(3,457,696)
(2,678,461)
Income tax expense
3(a)
-
-
Loss after tax
(3,457,696)
(2,678,461)
Other comprehensive income
Items that may be classified subsequently to profit or loss
Movement in foreign currency translation reserve
Other comprehensive income for the year
40,679
40,679
927
927
Total comprehensive loss for the year attributable to
members of the Company
(3,417,017)
(2,677,534)
Loss per share for the period attributable to the members
of Arrow Minerals Limited
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
17
17
(0.189)
(0.189)
(0.197)
(0.197)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying
notes.
36
Annual Report 30 June 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
Held for sale assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Note
30 June 2022
30 June 2021
$
$
4
6
7
8
271,819
3,283,858
31,207
48,313
705,750
71,786
40,594
-
1,057,089
3,396,238
Exploration and evaluation assets
10
8,179,606
9,799,067
Right of use assets
9
Property, plant and equipment
Other financial assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Right of use lease liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Right of use lease liabilities
Other financial liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
11
5
12
13
13
14
15
16
28,430
61,673
55,556
43,233
61,272
-
8,325,265
9,903,572
9,382,354
13,299,810
157,638
15,123
172,761
506,460
13,666
520,126
14,552
29,675
1,001,003
1,198,899
1,015,555
1,228,574
1,188,316
1,748,700
8,194,038
11,551,110
45,957,349
45,957,349
2,985,605
2,884,981
(40,748,916)
(37,291,220)
8,194,038
11,551,110
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.
37
Annual Report 30 June 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest income received
Exclusivity option fee
Government stimulus
Note
30 June 2022
30 June 2021
$
$
(1,350,972)
(1,434,749)
132
50,000
-
1,753
-
50,000
Net cash (used in) operating activities
4(a)
(1,300,840)
(1,382,996)
Cash Flows from Investing Activities
Proceeds from the sale of tenements
Proceeds from sale of financial assets
Proceeds from sale of subsidiary
Payment for exploration and evaluation activities
Purchase of property plant and equipment
Net cash (used in) investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Capital raising transaction costs
Proceeds from convertible notes
Convertible notes transaction costs
112,967
-
500,000
40,000
719,155
-
(2,085,236)
(1,997,126)
(23,767)
(63,422)
(1,496,036)
(1,301,393)
-
3,823,821
(118,404)
-
-
(95,731)
1,000,000
(60,000)
(70,975)
(33,329)
(80,000)
(1,714)
Principal payments on lease liabilities
4(b)
(13,666)
Principal payments on chattel mortgages
Interest paid on convertible notes
Interest paid on chattel mortgages
-
(80,000)
-
Net cash (used in)/from financing activities
(212,070)
4,482,072
Net (decrease)/increase in cash and cash equivalents
Effect of exchange rate movements
Cash and cash equivalents at the beginning of the year
(3,008,946)
1,797,683
(3,093)
242
3,283,858
1,485,933
Cash and cash equivalents at the end of the year
4
271,819
3,283,858
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
38
Annual Report 30 June 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Issued
Capital
$
Share-Based
Payment
Reserve
(Shares)
$
Share-Based
Payment
Reserve
(Options)
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2021
45,957,349
2,071,531
818,914
(5,464)
(37,291,220)
11,551,110
Loss after tax for the year
Other comprehensive income
Total comprehensive loss for the
period
Issue of Options (net of costs)
Share-based payments
Total transactions with equity holders
-
-
-
-
-
-
-
-
-
-
11,137
11,137
-
-
-
48,808
-
48,808
-
40,679
(3,457,696)
-
(3,457,696)
40,679
40,679
(3,457,696)
(3,417,017)
-
-
-
-
-
-
48,808
11,137
59,945
Balance at 30 June 2022
45,957,349
2,082,668
867,722
35,215
(40,748,916)
8,194,038
Issued
Capital
$
Share-Based
Payment
Reserve
(Shares)
$
Share-Based
Payment
Reserve
(Options)
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2020
42,347,662
2,066,964
813,104
(6,391)
(34,612,759)
10,608,580
Loss after tax for the year
Other comprehensive income
Total comprehensive loss for the
period
-
-
-
Issue of Shares (net of costs)
3,609,687
Issue of Options (net of costs)
Share-based payments
-
-
Total transactions with equity holders
3,609,687
-
-
-
-
-
4,567
4,567
-
-
-
-
5,810
-
5,810
-
927
(2,678,461)
-
(2,678,461)
927
927
(2,678,461)
(2,677,534)
-
-
-
-
-
-
-
-
3,609,687
5,810
4,567
3,620,064
Balance at 30 June 2021
45,957,349
2,071,531
818,914
(5,464)
(37,291,220)
11,551,110
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying
notes.
39
Annual Report 30 June 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
1.
a)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
Arrow Minerals Limited (the Company or Arrow) is a limited company incorporated in Australia. The consolidated
financial report of the Company for the year ended 30 June 2022 comprises the Company and its subsidiaries (together
referred to as the Group).
The financial report was authorised for issue by the Directors on 2 September 2022.
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 Group.
These are for-profit general purpose financial statements and 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.
b)
Going concern
The financial report has been prepared on a going concern basis which contemplates the continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the normal course of business.
The Group has incurred a net loss after tax for the year ended 30 June 2022 of $3,457,696 (30 June 2021: $2,678,461)
and a net cash outflow from operating and investing activities of $2,796,876 (30 June 2021: $2,684,389). Net assets
of the Group as at 30 June 2022 were $8,194,038 (30 June 2021: $11,551,110). Cash and cash equivalents as at 30
June 2022 were $271,819 (30 June 2021: $3,283,858).
The ability of the Group to continue as a going concern is dependent on it being able to successfully raise further
debt or capital funding in the next 12 months, to pursue its current exploration strategy. Management will continue
to explore the tenements and 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 the next 12 months. Specifically, the Directors’ conclusion
is supported by the following:
▪
▪
Completion of a capital raising subsequent to 30 June 2022 totalling $350,000;
Completion of the sale of the Strickland Copper Gold Project subsequent to 30 June 2022, with
consideration including $600,000 in cash payments ($300,000 in July 2022 and $300,000 in November
2022);
▪
Completion of sale of the remaining 10% interest in the Malinda Lithium Project subsequent to 30 June
2022 for $700,000 cash;
40
Annual Report 30 June 2022
▪
The ability to reduce exploration and evaluation expenditures accordingly should the need arise through
the ongoing close monitoring of cash reserves; and
▪ No anticipated events of default from the Convertible note (on which there are no financial covenants)
which has a maturity date of 26 August 2024, giving the Group time to pursue its strategy of achieving
exploration success from its tenement portfolio.
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 within the next 12 months with the initiatives detailed
above, then there exists a material uncertainty that may cast significant doubt on whether the Group will be able to
continue as a going concern and whether it will be required to realise assets and extinguish liabilities other than in
the ordinary course of business with the amounts realised being different from those shown in the financial statements.
c)
New standards, interpretations and amendments adopted by the Group
In the year ended 30 June 2022, the Directors have reviewed all the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Group and effective for the year end reporting period beginning on or
after 1 July 2021. No changes were required.
As a result of this review, the Directors have applied all new and amended Standards and Interpretations that were
effective as at 1 July 2021 with no material impact on the amounts or disclosures included in the financial report.
d)
New accounting standards and interpretations not yet effective
There are no other standards that are not yet effective and that would be expected to have a material impact on the
Group in the current or future reporting periods and on foreseeable future transactions.
e)
Basis of Consolidation
The consolidated financial statements are those of the Group, comprising the financial statements of Arrow, the parent
entity, and of all subsidiary 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.
Acquisition of an asset or a group of assets that does not constitute a business
The Group has to identify and recognise the individual identifiable assets acquired (including intangible assets) and
liabilities assumed. The cost of the group being acquired is allocated to the individual identifiable assets and liabilities
on the basis of their relative fair values at the date of purchase. These transactions and events do not give rise to
goodwill.
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.
41
Annual Report 30 June 2022
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence
of impairment.
f)
Foreign Currency Transactions and Balances
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency
and the presentation currency of the Group. The functional currency of the subsidiaries based in Burkina Faso is West
African CFA Franc.
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 of 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.
Translation of foreign loans:
Loans from the parent entity to foreign operations are denominated in Central African Francs (XOF). They are initially
recognised in the parent entity Statement of Financial Position at the spot rate on the date of transaction. Loan
balances are translated into the presentation currency at the exchange rate ruling at each reporting date, and
exchange differences arising on the translation of intercompany loans is recognised in the Statement of
Comprehensive Income.
g)
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST except:
-
-
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.
h)
Income Tax
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 for 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
42
Annual Report 30 June 2022
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.
For the purposes of income tax legislation, the Company and its 100% controlled Australian entities have elected to
form a tax consolidated group. As a consequence, these entities are taxed as a single entity and the deferred tax
assets and liability of these entities are set off in the consolidated financial statements.
i)
Cash and Cash Equivalents
Cash and cash equivalents include 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.
j)
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 Financial Instruments 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.
k)
Investments and Other Financial Assets
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.
Financial assets at FVTPL
With the except of loans and receivables, financial assets are measured at fair value. 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.
43
Annual Report 30 June 2022
Loans and receivables
Loans and receivables are measured at amortised cost using the effective rate method. Changes in fair value are
taken to profit or loss.
l)
Non-Current assets or disposal groups classified as held for sale
Non-current assets are classified as held for sale and measured at the lower of their carrying amount and fair value
less costs to sell if their carrying amount will be recovered principally through a sale transaction instead of use. They
are not depreciated or amortised. For an asset to be classified as held for sale, it must be available for immediate
sale in its present condition and its sale must be highly probable. Management must be committed to the plan to
sell the asset and the sale expected to be completed within one year from the date of the classification.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell.
A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any
cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale
of the non-current asset is recognised at the date of derecognition.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial
position.
m)
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial Liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair value adjusted for transaction costs, except where the instrument
is classified as fair value through profit or loss (FVTPL), in which case transaction costs are immediately recognised as
expenses in profit or loss.
Classification of financial liabilities
Financial liabilities classified as held-for-trading, contingent consideration payable by the group for the acquisition of
a business, and financial liabilities designated at FVTPL, are subsequently measured at fair value. All other financial
liabilities recognised by the group are subsequently measured at amortised cost.
The Group’s financial liabilities include trade and other payables, and convertible note payables (refer note 14).
Convertible notes have embedded derivatives within them. Embedded derivatives are separated from the host contract
and accounted for separately if the economic characteristics and risks of the host contract and the embedded
derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet
the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.
The convertible note is valued as a financial liability (Host Debt) with an embedded derivative feature (Embedded
derivative).
Subsequent Measurement
Subsequent measurement for Host Debt is at amortised costs. Subsequent measurement for Embedded derivative is
at fair value through profit and loss.
44
Annual Report 30 June 2022
n)
Interest in Joint Arrangements
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.
As at the reporting date 30 June 2022, the Group does not have any Joint Arrangements as defined in this policy.
While there are agreements in place with Furtuna Silver Mines (for the Hounde South Project) and Trevali Mining (for
the Arrow and Trevali permits that form part of the Vranso Project), there is no joint control over decisions about
relevant activities required to progress these projects.
o)
Property, Plant and Equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. 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 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:
Office equipment/improvements
straight-line
over 3 to 10 years
Motor vehicles
straight-line
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 profit or loss in the period the item is derecognised.
p)
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 profit or loss.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
45
Annual Report 30 June 2022
1.
the expenditures are expected to be recouped through successful development and exploitation or from sale of
the area of interest; or
2.
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:
1.
2.
sufficient data exists to determine technical feasibility and commercial viability, and
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.
q)
Impairment of Non-Financial Assets
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).
r)
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.
s)
Leases
At the commencement date of a lease (other than leases of 12-months or less and leases of low value assets), the
Group recognises a lease asset representing its right to use the underlying asset and a lease liability representing its
obligation to make lease payments.
Lease assets
Lease assets are initially recognised at cost, comprising the amount of the initial measurement of the lease liability,
any lease payments made at or before the commencement date of the lease, less any lease incentives received, any
initial direct costs incurred by the Group, and an estimate of costs to be incurred by the Group in dismantling and
removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the
condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.
Subsequent to initial recognition, lease assets are measured at cost (adjusted for any remeasurement of the associated
lease liability), less accumulated depreciation and any accumulated impairment loss.
46
Annual Report 30 June 2022
Lease assets are depreciated over the shorter of the lease term and the estimated useful life of the underlying asset,
consistent with the estimated consumption of the economic benefits embodied in the underlying asset.
Lease liabilities
Lease liabilities are initially recognised at the present value of the future lease payments (i.e., the lease payments that
are unpaid at the commencement date of the lease). These lease payments are discounted using the interest rate
implicit in the lease, if that rate can be readily determined, or otherwise using the Group’s incremental borrowing
rate.
Subsequent to initial recognition, lease liabilities are measured at the present value of the remaining lease payments
(i.e. the lease payments that are unpaid at the reporting date). Interest expense on lease liabilities is recognised in
profit or loss (presented as a component of finance costs). Lease liabilities are remeasured to reflect changes to lease
terms, changes to lease payments and any lease modifications not accounted for as separate leases.
Variable lease payments not included in the measurement of lease liabilities are recognised as an expense when
incurred.
Leases of 12-months or less and leases of low value assets
Lease payments made in relation to leases of 12-months or less and leases of low value assets (for which a lease
asset and a lease liability has not been recognised) are recognised as an expense on a straight-line basis over the
lease term.
t)
Current / Non-Current Distinction
The Group presents current and non-current assets, and current and non-current liabilities, as separate classifications
in its statement of financial position.
Assets
The Group classifies an asset as current when:
▪
▪
▪
▪
it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;
it holds the asset primarily for the purpose of trading;
it expects to realise the asset within twelve months after the reporting period; or
the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle
a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
Liabilities
The Group classifies a liability as current when:
▪
▪
▪
▪
it expects to settle the liability in its normal operating cycle;
it holds the liability primarily for the purpose of trading;
the liability is due to be settled within twelve months after the reporting period; or
it does not have an unconditional right to defer settlement of the liability for at least twelve months after
the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement
by the issue of equity instruments do not affect its classification.
All other liabilities are classified as non-current.
47
Annual Report 30 June 2022
u)
Share-based Payments
Equity-settled share-based payments 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.
v)
Measurement of Contingent Consideration
When the fair values of financial assets and financial liabilities recorded in the Consolidated Statement of Financial
Position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation
techniques including the Black-Scholes option pricing model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values.
Contingent consideration, resulting from asset acquisitions, is valued at fair value at the acquisition date as part of
the asset acquisition. When the contingent consideration meets the definition of a financial liability, it is subsequently
remeasured to fair value at each reporting date. The determination of the fair value is based on a probability weighted
pay-out approach. The key assumptions take into consideration the probability of meeting each performance target
(refer to note 14).
As part of the accounting for the acquisition of Boromo Gold Ltd (completed in August 2019), contingent consideration
with an estimated fair value of $730,955 was recognised as a current liability at the acquisition date. During the year
ended 30 June 2020, the first performance milestone was met, with $557,458 transferred to Issued Capital. The
remaining contingent consideration was remeasured to $13,937 at the current reporting date.
w)
Earnings/Loss Per Share
Basic Earnings/Loss per Share – is calculated by dividing the profit or loss 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/Loss per Share – adjusts the figures used in the determination of basic earnings/loss 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.
x)
Critical accounting judgements, estimates and assumptions
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.
48
Annual Report 30 June 2022
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(p). 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 profit or loss.
Share-based payments
The Group measures the cost of equity settled share-based payments at fair value at the grant date using the Black
Scholes 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.
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)
Benefit from carried forward tax losses
The future recoverability of the carried forward tax losses are dependent upon the 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.
(iv) Valuation of share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instrument at the date at which they are granted. The fair value is determined by using the Black-Scholes model
considering the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity settled share-based payments would have no impact on the carrying amount of assets
and liabilities within the next annual reporting period but may impact profit or loss and equity (refer to note 21).
(v) Contingent Consideration
The contingent consideration (referred to at note 14(b)) which arose as part of accounting for the acquisition of
Boromo Gold Ltd (completed in August 2021) was remeasured at 30 June 2022. In determining the fair value of the
49
Annual Report 30 June 2022
contingent consideration, estimations are made based on a probability weighted pay-out approach. The key
assumptions take into consideration the probability of meeting each performance target and management’s
expectation regarding timing as to when the milestone will be achieved (refer note 14(b)).
2.
REVENUE AND EXPENSES
a)
Income
Interest income
Exclusivity option fee
Profit on sale of investments
Profit on sale of tenement interests (refer note 25)
Profit on sale of tenements
Gain on disposal of subsidiary (refer note 25)
Cash flow boost – Government Stimulus
Other income
b)
Employee benefits expense
Employee benefits, including ETP and Directors’ fees
Superannuation expenses
c)
Finance costs
Bank fees
Brokerage fees
Lease interest expense
Convertible note – amortised interest cost on host debt
d) Administration and other expenses
Consultants, advisers, and auditors
Insurance
Legal costs
Public company costs
Overheads
Travel costs
Foreign exchange loss
30 Jun 2022
30 Jun 2021
$
$
132
50,000
1,753
-
-
446,675
112,967
-
202,253
-
-
-
40,000
-
50,000
1,500
365,352
539,928
401,210
28,421
429,631
5,949
511
2,206
80,515
89,181
197,472
50,801
36,097
59,131
251,141
12,427
290,644
897,713
416,552
37,834
454,386
5,793
1,391
2,207
136,097
145,488
133,138
54,349
60,632
105,402
274,423
1,838
125,991
755,773
50
Annual Report 30 June 2022
3.
INCOME TAX EXPENSE
a)
The components of tax expense / (benefit) comprise:
Current tax benefit / (expense)
Deferred tax benefit / (expense)
Offset against DTA not recognised
Under / (over) provision in prior years
b)
Reconciliation of prima facie tax on continuing operations to
income tax benefit:
Loss before tax for the year
Tax benefit @ 30% tax rate (2021: 30%)
Adjustments for:
30 Jun 2022
30 Jun 2021
$
-
-
-
-
-
$
-
-
(127,501)
127,501
-
(3,457,696)
(2,678,461)
(1,037,309)
(803,538)
Non-assessable income
(58,533)
(15,000)
Capital (gain)/loss
Cash Flow Boost
Effect of differences in foreign tax rates
Legal fees
-
135,380
4,892
Other non-deductible expenses 964,336
Share-based payments
Unrecognised DTA on tax losses
Under provision in prior period
Income tax expense / (benefit) attributable to profit/(loss)
17,984
(11,750)
-
-
-
11,126
(8,498)
28,373
-
546,730
3,113
95,193
127,501
-
30 Jun 2022
30 Jun 2021
$
$
11,098,250
11,613,515
13,261
38,653
13,002
80,543
22,350
c)
Components of deferred tax assets
Deferred tax assets
Tax losses
Provisions & accruals
Plant and equipment under lease 8,903
Capital & borrowing costs
Business related costs
84,822
10,543
Offset against deferred tax liability / not recognised
(11,215,779)
(11,768,063)
Deferred tax liabilities
Prepayments
Investments
Exploration expenditure
Offset against deferred tax assets / not recognised
(7,335)
(23,078)
(4,562)
(9,189)
(3,059,301)
(2,932,755)
3,089,714
2,946,506
Net deferred tax assets / (liability)
-
-
51
Annual Report 30 June 2022
30 Jun 2022
30 Jun 2021
$
$
d) Deferred tax assets / liabilities not brought to account
Temporary differences
(2,980,716)
(2,804,928)
Capital losses 38,225
177,415
Operating tax losses
11,098,250
11,613,515
8,155,759
8,986,002
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.
e) Deferred income tax (revenue)/expense included in Income Tax
expense comprises:
(Increase) / decrease in deferred tax assets
(Decrease) / increase in deferred tax liabilities
Deferred tax assets not recognised
Under provision in prior period
f)
Deferred income tax related to items charged or credited directly
to equity
Decrease / (increase) in deferred tax assets
Deferred tax assets not recognised
g)
Tax Consolidation
857,159
(734,484)
(122,675)
-
-
6,528
(132,881)
(1,147)
127,500
-
35,533
(35,533)
-
35,533
(35,533)
-
For the purposes of income tax legislation, the Company and its 100% controlled Australian entities have
elected to form a tax consolidated group.
52
Annual Report 30 June 2022
4.
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
30 Jun 2022
30 Jun 2021
$
$
271,819
271,819
3,283,858
3,283,858
(a)
Reconciliation of loss for the year to operating cash flows
Loss for the year
(3,457,696)
(2,678,461)
Cashflows excluded from profit attributable to operating activities
Finance costs on interest bearing liabilities
1,714
1,714
Adjustments for non-cash items:
Impairment of exploration & evaluation assets
2,460,205
1,573,498
Share-based payment expense
Depreciation expense
Amortisation expense
Gain on disposal of investments
Gain on disposal of subsidiary
Revaluation of financial assets
Revaluation of embedded derivative
Interest on convertible note (unwind)
Revaluation of contingent consideration (performance shares)
Movement in working capital items:
Decrease / (increase) in trade and other receivables
(Increase) / decrease in prepayments
(Decrease) in trade and other payables
(Decrease) / increase in payroll liabilities
59,945
23,366
14,803
10,377
68,648
69,784
-
(446,675)
(202,253)
-
(3,301)
515
(195,110)
40,579
(6,645)
(24,112)
(12,850)
-
52,234
(2,660)
52,512
62,714
(34,642)
15,145
(155,242)
28,060
Net cash used in operating activities
(1,300,840)
(1,382,996)
(b)
Changes in liabilities arising from financing activities
Balance at 1 July 2020
Convertible
Right of Use
Finance
Total
notes
Lease
Lease
$
$
-
$
$
82,428
33,329
115,757
Net cash from/(used in) financing activities
940,000
(70,975)
(33,329)
835,696
Acquisition of leases
Other changes
Balance at 30 June 2021
Net cash from/(used in) financing activities
Acquisition of leases
Other changes
Balance at 30 June 2022
-
44,449
49,852
(12,561)
989,852
43,341
-
-
(2,786)
(13,666)
-
-
987,066
29,675
-
-
-
-
-
-
-
44,449
37,291
1,033,193
(13,666)
-
(2,786)
1,016,741
53
Annual Report 30 June 2022
5.
OTHER FINANCIAL ASSETS
Financial assets at fair value through profit or loss:
Shares in Arrow (Malinda) Pty Ltd (refer note 25)
6.
TRADE AND OTHER RECEIVABLES
Bonds
Deposits
GST receivable
Other debtors
7.
PREPAYMENTS
Prepaid expenses
Prepaid drilling costs
8.
HELD FOR SALE ASSETS
30 Jun 2022
30 Jun 2021
$
55,556
55,556
$
-
-
30 Jun 2022
30 Jun 2021
$
$
6,135
7,677
17,395
-
31,207
9,316
8,011
49,189
5,270
71,786
30 Jun 2022
30 Jun 2021
$
$
48,313
-
48,313
31,064
9,530
40,594
30 Jun 2022
30 Jun 2021
Exploration assets – Strickland Copper Gold Project
Movements:
Balance at beginning of year
Exploration assets reclassified as held for sale (refer note 10)
Balance at end of year
$
705,750
-
705,750
705,750
$
-
-
-
-
54
Annual Report 30 June 2022
9.
RIGHT OF USE ASSETS
Right of use assets
Cost
Accumulated amortisation
Movements:
Balance at beginning of year
Additions (a)
Amortisation for the year
Balance at end of year
30 Jun 2022
30 Jun 2021
$
$
44,449
(16,019)
28,430
43,233
-
(14,803)
28,430
44,449
(1,216)
43,233
68,568
44,449
(69,784)
43,233
(a) On 1 June 2021, the Group entered into a lease arrangement for its office in Subiaco, Australia, which expires
on 31 May 2024, with an option to extend for a further three-year period, no option to purchase at the expiry
of the lease period.
At the commencement date of a lease (other than leases of 12 months or less and leases of low value assets),
the Group recognises a lease asset representing its right to use the underlying asset and a lease liability
representing its obligation to make lease payments.
10.
EXPLORATION AND EVALUATION ASSETS
30 Jun 2022
30 Jun 2021
$
$
Exploration and evaluation assets
8,179,606
9,799,067
Movements:
Balance at the beginning of the year
Expenditure incurred during the year
Sale of subsidiary (refer note 25)
Impairment recognised during the year (a)
Transferred to assets classified as held for sale (a)
Balance at the end of the year
The asset balance comprises the following areas of interest:
- Burkina Faso Gold Projects
- Strickland Copper Gold Project
- Malinda Lithium Project
Impairment expense recognised in respect of the following:
- Burkina Faso Projects
- Strickland Copper Gold Project
- Plumridge (tenement relinquished / divested)
- Plumridge (withdrawal from JV)
- Malinda Lithium Project
9,799,067
1,899,796
(353,302)
8,865,472
2,507,093
-
(2,460,205)
(1,573,498)
(705,750)
-
8,179,606
9,799,067
8,179,606
-
-
6,595,013
2,850,722
353,332
8,179,606
9,799,067
(92,119)
(252,627)
(2,368,086)
-
-
-
-
(17,549)
(969,556)
(333,766)
(2,460,205)
(1,573,498)
55
Annual Report 30 June 2022
(a) The ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on
successful development and commercial exploitation of each area of interest.
The impairment expense totalling $2,460,205 recognised in the year ended 30 June 2022 includes:
▪
▪
$92,119 in respect of four licenses (part of the Burkina Faso Projects) which were identified as low
priority and where a decision was made to discontinue exploration activities on these licenses; and
$2,368,086 in respect of the Strickland Copper Gold Project. The carrying value of this project was
written down to $705,750, representing the fair value less costs to sell (FVLCTS). The FVLCTS has
been determined in reference to the agreement struck with Dreadnought Resources Limited
(Dreadnought) for the sale of a 100% interest in the project, as announced 13 July 2022).
Consideration for the divestment includes $600,000 in cash, 2,350,000 shares in Dreadnought
(valued at $105,750 based on share price at 30 June 2022), as well as contingent consideration of
$1,000,000 in cash on identification of mineral resource of >500,000oz gold equivalent, and a 1%
1% Net Smelter Return royalty. The Strickland Copper Gold Project at the FVLCTS of $705,750 has
been classified as held for sale at 30 June 2022 (refer to note 8).
The impairment expense totalling $1,573,498 recognised in the year ended 30 June 2021 includes:
▪
$252,627 in respect of the Gourma Project (part of the Burkina Faso Projects) following the decision
to relinquish all Gourma licenses.
▪
$987,105 in respect of the Plumridge Nickel and Gold Projects. In March 2021, the Company
notified IGO Ltd (IGO) of its conversion of its 10% contributing interest in the joint venture project
to a 1% NSR royalty;
▪
$333,766 in respect of the Malinda Lithium Project. The carrying value of the Malinda Lithium
Project has been written down to $353,333, representing the FVLCTS. The FVLCTS has been
determined from the implied market value of Arrow’s retained interest (25%) under the earn-in
agreement entered into with Electrostate Pty Ltd (Electrostate), as announced 23 August 2021
(refer note 25 for further details).
11.
PLANT AND EQUIPMENT
Motor vehicle
- At cost
- Accumulated depreciation
Total motor vehicle
Caravan
- At cost
- Accumulated depreciation
Total Caravan
Office Improvements
- At cost
- Accumulated depreciation
Total Office Improvements
Total property, plant and equipment
30 Jun 2022
30 Jun 2021
$
$
122,794
(83,992)
38,802
45,764
(45,764)
-
123,090
(73,040)
50,050
45,764
(45,764)
-
154,396
(131,525)
22,871
131,921
(120,699)
11,222
61,673
61,272
56
Annual Report 30 June 2022
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
Caravan
Office
$
$
Equipment/
Improvements
Balance at 1 July 2020
Additions
Disposals
Depreciation expense
Balance at 30 June 2021
Additions
Disposals
Depreciation expense
FX revaluation
Balance at 30 June 2022
11,831
58,882
-
(20,663)
50,050
2,162
-
(10,952)
(2,458)
38,802
12.
TRADE AND OTHER PAYABLES
Trade creditors and accruals
GST and withholding tax payable
Funds received ahead of capital raising
Payroll liabilities
Trade creditors are generally settled on 30 to 90 day terms.
13.
RIGHT OF USE LIABILTIES
Current
Lease liability
Non-Current
Lease liability
Total
$
66,498
63,422
-
12,321
-
-
$
42,346
4,540
-
(12,321)
(35,664)
(68,648)
-
-
-
-
-
-
11,222
23,598
-
61,272
25,760
-
(12,414)
(23,366)
465
22,871
(1,993)
61,673
30 Jun 2022
30 Jun 2021
$
$
81,370
8,456
-
67,812
157,638
411,481
14,316
-
80,663
506,460
30 Jun 2022
30 Jun 2021
$
$
15,123
13,666
14,552
29,675
Total Current and Non-Current
29,675
43,341
57
Annual Report 30 June 2022
14.
OTHER FINANCIAL LIABILITIES
Convertible note liability (a)
Contingent consideration (b)
(a) Convertible Note
30 Jun 2022
30 Jun 2021
$
$
987,066
13,937
989,852
209,047
1,001,003
1,198,899
As previously disclosed, on 26 August 2020 the Company issued 1,000,000 unsecured convertible notes at A$1.00
each, raising $1,000,000 (before costs of $60,000). The notes have a 48 month Maturity Date, unless converted prior.
Conversion can occur at any time up to the Maturity Date, unless redeemed prior through a Change in Control of
the Company or by an Event of Default. The Company also holds the right to redeem the convertible notes after 36
months and prior to the Maturity Date. There are no specific financial covenants within the Event of Default, although
failure to pay any material amounts under the agreement (e.g. interest) and insolvency are Events of Default. The
convertible notes have an interest rate of 8% and allow the holder to convert the $ amount held (Outstanding
Amount) into the equivalent amount of shares based on the lower of 0.75 cents per share (being 1.25 times the price
of shares issued to the market pursuant to the equity raising on 24 June 2020 (First Equity Raising)) and (if lower
than 0.6 cents) 1.25 times the price of a subsequent capital raising. The debt instrument contains an embedded
forward, being the conversion feature based on the lower of 0.75 cents and 1.25 times the prevailing price of shares
(Subsequent Equity Raising), resulting in a variable number of shares.
Key Terms:
Amount Issued
1,000,000 unlisted and unsecured convertible notes of A$1.00 face value
Maturity Date
48 months after deed date
Interest
8% per annum simple interest until conversion or redemption
Minimum Amount 100,000 notes (or $100,000)
Conversion
The notes convert into Conversion Shares on the following formula:
Number of Conversion Shares =
Amount Converted ($)*
Conversion Price
* has to be greater than the Minimum Amount
Conversion Price Means either:
(i) 1.25 multiplied by the price a Company Share is issued under the First Equity Raising; or
(ii) 1.25 multiplied by a price a Company Share is issued under a Subsequent Lower Priced
Equity Raising (if any).
The financial liability has been accounted for as a derivative financial liability with an embedded derivative feature
(the Embedded Derivative).
58
Annual Report 30 June 2022
Measurement
The instrument was initially valued as the total fair value of the embedded derivative and host debt contract at issue
date, resulting in the following impact to the Financial Statements during the year ended 30 June 2022.
Initial Valuation
30 June 2022
$
$
Embedded derivative – financial liability at fair value through profit/loss
Host debt contract – financial liability at amortised cost^
Total value of Convertible Note in Statement of Financial Position
(6,988)
(933,012)
(940,000)
(1,026)
(986,040)
(987,066)
^ The host debt contract implicit interest rate is 9.75%.
(b) Contingent Consideration
As part of the accounting for the acquisition of Boromo Gold Ltd (completed in August 2019), contingent consideration
with an estimated fair value of $730,955 was recognised as a current liability at the acquisition date. During the year
ended 30 June 2020, the first performance milestone was met, with $557,458 transferred to Issued Capital. The
remaining contingent consideration is subject to remeasurement at reporting. Movement in the financial liability is
as follows:
Opening Balance
(Gain) / loss on revaluation
Closing Balance
15.
ISSUED CAPITAL
30 Jun 2022
30 Jun 2021
$
$
209,047
(195,110)
13,937
146,333
62,714
209,047
30 Jun 2022
30 Jun 2021
$
$
Ordinary shares issued and fully paid
45,957,349
45,957,349
(a) Movements in issued capital
30 June 2022
30 June 2021
Note
No.
$
No.
$
Balance at beginning of year
1,832,381,760
45,957,349 1,200,415,742
42,347,662
Placement A
Placement B
ESP share buy-back and cancellation
ESP share buy-back and cancellation
(i)
(ii)
(iii)
(iv)
-
-
-
-
ESP share buy-back and cancellation
(v)
ESP share buy-back and cancellation
(vi)
(6,250,000)
(1,800,000)
ESP share buy-back and cancellation
(vii)
(400,000)
Costs of capital raising
-
-
-
-
-
-
-
-
-
137,303,518
823,820
500,000,000
3,000,000
(3,081,250)
(2,256,250)
-
-
-
-
-
-
-
-
-
(214,133)
Balance at end of year
(viii)
1,823,931,760
45,957,349 1,832,381,760
45,957,349
59
Annual Report 30 June 2022
(i) As announced 16 June 2020, Arrow received commitments from sophisticated investors to raise $2,200,000 pursuant
to a placement of up to 366,666,666 fully paid ordinary shares in the Company at an issue price of 0.6 cents per
Share (Placement A). Placement A was completed in two tranches as follows:
▪
▪
Tranche 1 – 229,363,148 Placement A shares which were issued on 24 June 2020; and
Tranche 2 – 137,303,518 Placement A shares which were issued on 27 August 2020, following receipt of
shareholder approval.
(ii) As announced 4 May 2021, Arrow received commitments from sophisticated investors to raise $3,000,000 pursuant
to a placement of 500,000,000 Shares at an issue price of 0.6 cents per Share (Placement B). Placement B was
completed in two tranches as follows:
▪
▪
Tranche 1 – 333,095,440 Shares which were issued 11 May 2021; and
Tranche 2 – 166,904,560 Shares which were issued 25 June 2021 following receipt of Shareholder approval
at the Company’s General Meeting held on 22 June 2021.
(iii) On 17 September 2020, the Company bought back, for no consideration, 3,081,250 shares previously issued under
the ESP in accordance with the terms of the ESP plan.
(iv) On 13 January 2021, the Company bought back, for no consideration, 2,256,250 shares previously issued under
the ESP in accordance with the terms of the ESP plan.
(v) On 30 July 2021, the Company bought back, for no consideration, 6,250,000 shares previously issued under the
ESP in accordance with the terms of the ESP plan.
(vi) On 1 November 2021, the Company bought back, for no consideration, 1,800,000 shares previously issued under
the ESP in accordance with the terms of the ESP plan.
(vii) On 22 December 2021, the Company bought back, for no consideration, 400,000 shares previously issued under
the ESP in accordance with the terms of the ESP plan.
(viii) Included in the total 1,823,931,760 shares on issue at 30 June 2022 are 11,000,000 ESP shares, of which 8,250,000
ESP shares have vested and 2,750,000 remain unvested. The ESP shares remain subject to restriction pursuant to
the terms under which they have been issued.
Terms and conditions of ordinary shares
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.
60
Annual Report 30 June 2022
(b) Unexpired share options
The following unlisted options over ordinary shares of the Company existed at reporting date:
Expiry Date
22 August 2022
15 October 2022
22 August 2023
11 December 2023
11 October 2024
25 November 2024
25 November 2025
Exercise Price ($)
0.0200
0.0125
0.0145
0.010
0.009
0.009
0.011
Movements:
Options outstanding at 1 July 2020
Granted (under ESIP)
Lapsed
Options outstanding at 30 June 2021
Granted (under ESIP)
Granted (directors)
Lapsed
Options outstanding at 30 June 2022
(c) Performance rights
Number
120,150,000
10,000,000
37,500,000
2,850,000
4,300,000
8,000,000
5,000,000
187,800,000
No.
167,650,000
3,550,000
(700,000)
170,500,000
4,300,000
13,000,000
-
187,800,000
The following performance rights over ordinary shares of the Company existed at reporting date:
Class
Class B1
Class C2
Expiry Date
26/08/2022
26/08/2023
No.
69,682,290
69,682,300
139,364,590
1 Class B Performance Rights Milestone: Announcement by Arrow of a JORC 2012 compliant Inferred, Indicated and
Measured Resource collectively of at least 500,000oz of gold located on the Tenements on or before 26 August 2022.
2 Class C Performance Rights Milestone: Announcement by Arrow of a JORC 2012 compliant Inferred, Indicated and
Measured Resource collectively of at least 1,000,000oz of gold located on the Tenements on or before 26 August 2023.
Movements:
Performance rights outstanding as at 1 July 2020
-
Performance rights outstanding at 30 June 2021
-
Performance rights outstanding at 30 June 2022
No.
139,364,590
-
139,364,590
-
139,364,590
61
Annual Report 30 June 2022
16.
RESERVES
Share-based payment reserve (Shares) (a)
Share-based payment reserve (Options) (b)
Foreign currency reserve (c)
30 June 2022
30 June 2021
$
$
2,082,668
2,071,531
867,722
35,215
818,914
(5,464)
2,985,605
2,884,981
(a) The share-based payment reserve (shares) relates to shares granted by the Company to its employees. The 2022
movement relates to the share-based payments expense recognised during the year in respect of the ESP.
(b) The share-based payment reserve (options) relates to options granted by the Company to its employees and
Directors. The 2022 movement relates to the share-based payments expense recognised during the year in
respect of the ESIP and Director options.
(c) 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.
17.
LOSS PER SHARE
The following data reflects the income and share numbers used in calculation of the basic and diluted loss per
share:
Unit
30 June 2022
30 June 2021
Weighted average number of shares
No.
1,825,203,385
1,362,539,790
(Loss) used in calculation of basic and diluted loss per share
$
(3,457,696)
(2,678,461)
Basic and diluted (loss) per share:
cents
(0.189)
(0.197)
18.
CONTINGENT ASSETS AND LIABILITIES
Contingent Assets
There were no contingent assets at 30 June 2022.
Contingent Liabilities
The Group, through its wholly owned subsidiary GenGold Resources Burkina (GRB), has granted a royalty deed to pay
US $4 per ounce for every ounce of gold produced from the Divole East, Divole West, Nako, Konkoira and Fofora
tenements held by Gold Square Resources SASU (GSR) up to a maximum of US$1,000,000.
In September 2021 Arrow announced that it had secured the Tombi-Ouest Minerals Exploration Permit (Tombi-Ouest)
in Burkina Faso for a total consideration of CFA 70,000,000 (equivalent to approximately AUD $170,000)
(Consideration) and a 1% NSR. The Consideration is to be paid via three instalments; the first payment of CFA
62
Annual Report 30 June 2022
20,000,000 of which has been paid in current period; second payment of CFA 20,000,000 due on before the 1 year
anniversary of earn-in commencement date (September 2022); and third payment of CFA 30,000,000 due on before
the 2 year anniversary of earn-in commencement date (September 2023); whereby the second and third payments
are contingent on AMD electing to remain a party to the earn-in arrangement at those future dates.
The Group had no other contingent assets or liabilities at reporting date.
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 $450,182 in 2022/23 (2021/22: $741,552).
Exploration commitments does not include requirements under earn-in arrangements for tenements held by other
entities, as the Company is not currently obligated to spend under these arrangements, and further commitment to
spend is subject to exploration results, the outcome of which is not certain.
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
2022
$
450,182
373,470
-
823,652
2021
$
741,552
340,632
-
1,082,184
63
Annual Report 30 June 2022
20.
RELATED PARTY & KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Parent and subsidiaries
The parent entity and the ultimate parent entity of the Group is Arrow Minerals Limited, a company listed on the
Australian Securities Exchange. The components of the Group are:
Parent
Arrow Minerals Limited
Controlled entities
Boromo Gold Pty Ltd
Gengold Resources Burkina
Gold Square Resources SASU
Black Star Resources Africa SASU
Farafina Resources SASU
Fofora Resources SASU
Arrow (Strickland) Pty Ltd
Arrow (Leasing) Pty Ltd
Arrow (Deralinya) Pty Ltd
Arrow (Plumridge) Pty Ltd
Arrow (Pardoo) Limited
Edurus Resources SA
Incorporated
2022
2021
Extent of control
Australia
-
-
Australia
Cayman Islands
Burkina Faso
Burkina Faso
Burkina Faso
Burkina Faso
Australia
Australia
Australia
Australia
Australia
South Africa
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Interests in entities no longer controlled
Arrow (Malinda) Pty Ltd (refer note 25)
Australia
10%
100%
(b) Key management personnel disclosures
The key management personnel compensation includes employee benefits and director compensation expenses as
follows:
Short-term employee benefits
Termination benefits
Post-employment benefits
Annual leave
Long service leave
Equity compensation benefits
2022
$
529,313
-
21,933
297
-
31,401
582,944
2021
$
391,500
-
32,633
26,124
-
7,252
457,509
Further information regarding key management personnel has been provided in the Remuneration Report.
(c) Transactions with key management personnel
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. Mitchell River Group Pty Ltd is a related party of Director Dr Tabeart.
64
Annual Report 30 June 2022
During the year, an amount of $53,210 (2021: $22,665) was paid or payable in relation to these services. An amount
of $550 (2021: $682) was payable at year end.
The Company has entered into a service agreement with GenGold Resources Capital Pty Ltd (GenGold) for the hire
of minor exploration equipment. Mr McKeith is a related party of GenGold. During the year, an amount of $13,891
(2021: $9,000) was paid or payable in relation to this equipment. An amount of nil (2021: $750) was payable at year
end.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties.
Unlisted Options issued to Directors
Securities were issued to Directors (or their nominees) as part of remuneration packages during the period, as follows:
Director
Mr Frazer Tabeart
Mr Howard Golden1
Mr Hugh Bresser
Mr Thomas McKeith
Unlisted Options
Unlisted Options
at $0.009 Expiring
at $0.011 Expiring
25-Nov-2024
25-Nov-2025
1,500,0002
2,500,000-
2,500,0002
1,500,0002
8,000,000
-
2,500,000-
2,500,0002
-
5,000,000
1 Upon resignation on 28 February 2022, Mr Golden held 5,000,000 options.
2 Options shall vest 25 November 2022 subject to director remaining appointed at this date.
21.
SHARE-BASED PAYMENTS EXPENSE
(a) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Options – Directors (b)
Options – Employee Securities Incentive Plan (ESIP) (c)
Shares – Employee Share Plan (ESP) (d)
2022
$
31,785
17,023
11,137
59,945
2021
$
-
5,810
4,567
10,377
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.
65
Annual Report 30 June 2022
(b) Options – Directors
During the year, the Company issued the following securities:
▪
▪
8,000,000 unlisted options with an exercise price of $0.009 expiring 25 November 2024 were issued to
Directors (or their nominees) (Director A Options); and
5,000,000 unlisted options with an exercise price of $0.011 expiring 25 November 2025 were issued to
Directors (or their nominees) (Director B Options).
These securities were valued by applying a Black-Scholes option pricing model taking into account the terms and
conditions upon which the options were granted. The following table details the inputs to the valuations for each
option class:
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Exercise price ($)
Marketability discount (%)
Expected life of options (years)
Share price at grant date ($)
Value per option ($)
Director A Options
Director B Options
Nil
100%
0.95%
$0.009
Nil
3
$0.007
$0.0040
Nil
100%
0.95%
$0.011
Nil
4
$0.007
$0.0043
(c) Employee Securities Incentive Plan (ESIP)
Relates to securities issued to employees pursuant to the Company’s Employee Securities Incentive Plan (ESIP). The
ESIP was approved by shareholders on 11 November 2019.
During the year, the Company issued the following securities:
▪
4,300,000 unlisted options exercisable at $0.009 expiring 11 October 2024 to employees pursuant to the
shareholder-approved Employee Securities Incentive Plan (ESIP) (ESIP Options).
These securities were valued by applying a Black-Scholes option pricing model taking into account the terms and
conditions upon which the options were granted. The following table details the inputs to the valuations for each
option class:
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Exercise price ($)
Marketability discount (%)
Expected life of options (years)
Share price at grant date ($)
Value per option ($)
ESIP Options
Nil
100%
0.58%
$0.009
Nil
3
$0.007
$0.0040
66
Annual Report 30 June 2022
(d) Shares
Relates to securities issued to directors and employees pursuant to the Company’s existing shareholder-approved
Employee Share Plan (ESP). There have been no new shares issued pursuant to the ESP during the period. A total of
8,450,000 shares were bought back during the year for no consideration, in accordance with the ESP.
(e) Options
Overview of options:
The Group provides benefits to employees, contractors, consultants and Directors of the Group in the form of share-
based payment transactions, whereby employees, contractors, consultants and Directors render services in exchange
for options to acquire ordinary shares.
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary
share of the Company with full dividend and voting rights. Set out below is a summary of the options granted.
2022
2022
2021
No. Options
WAEP
No. Options
170,500,000
17,300,000
0.0182
0.0096
167,650,000
3,550,000
-
-
-
-
0.0174
0.0182
-
(700,000)
170,500,000
170,500,000
2021
WAEP
0.0183
0.0100
-
0.0100
0.0182
0.0182
Outstanding at the beginning of the
year
Granted
Exercised
Lapsed / expired
Outstanding at end of the year
Exercisable at end of the year
187,800,000
170,500,000
Additional information:
There were no unlisted options exercised during the year (2021: nil).
Unlisted options outstanding at 30 June 2022 had a weighted average exercise price of $0.0174 (2021: $0.0182) and
a weighted average remaining contractual life of 221 days (2021: 509 days).
The weighted average fair value of options granted during the year was $0.0041 (2021: $0.0037) per option.
(f)
Employee Share Plan (ESP)
(i) Overview of ESP:
The issue of shares pursuant to the ESP 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 ESP.
Movements in ESP shares during the year ended 30 June 2022 is summarised as follows:
67
Annual Report 30 June 2022
Opening
Issued
Vested
Cancelled
Closing balance
Category
Issue Date
Issue
Price
$ / Share
balance 1 July
2021
No.
ESP – 2018
22/11/2018
$0.01485
4,700,000
ESP – 2019
19/08/2019
$0.01379
14,750,000
Total
19,450,000
No.
-
No.
-
-
-
30 June 2022
No.
Total
No.
(4,700,000)
-
Vested
No.
-
(3,750,000)
11,000,000
8,250,000
(8,450,000)
11,000,000
8,250,000
Movements in ESP shares during the year ended 30 June 2021 is summarised as follows:
Category
Issue Date
Issue
Price
$ / Share
balance 1 July
2020
No.
No.
No.
No.
Opening
Issued
Vested
Cancelled
Closing balance
30 June 2021
Total
Vested
No.
-
No.
-
ESP – 2017
1/12/2017
$0.03000
3,087,500
ESP – 2018
22/11/2018
$0.01485
6,200,000
ESP – 2019
19/08/2019
$0.01379
15,500,000
Total
24,787,500
-
-
-
-
(ii) Valuation of ESP shares:
(3,087,500)
-
-
(1,500,000)
4,700,000
4,700,000
7,375,000
(750,000)
14,750,000
11,062,500
7,375,000
(5,337,500)
19,450,000
15,762,500
Although these are shares for legal and taxation purposes, Accounting Standards require they be treated as
options for accounting purposes. ESP shares are valued applying a Black Scholes model, using inputs for the
relevant milestones. 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. There were no ESP shares issued during the
year ended 30 June 2022. Milestones attached to the ESP shares on issue at 30 June 2022 are as follows:
ESP – 2019 Milestones
Status
1
Discovery of a mineralised prospect with multiple drill intersections of at
Achieved on 19 December
least 25 gram metres gold (e.g. two separate drill intersections of 10 metres
2019
@ 2.5g/t Au), or gold equivalent.
2
3
Discovery of multiple mineralised prospects as defined in Milestone 1.
Not achieved
Announce a JORC-compliant resource of 500,000oz of gold at a minimum
Not achieved
grade of 1.0g/t Au (or equivalent for other metals).
4
Combined capital raising of $2 million through a combination of either
Achieved on 19 August
equity issues at an average issue price at least 75% of the 15-day VWAP
2020
prior to each issue and/or proceeds from asset sales (or farm-out joint
ventures).
5
6
Total shareholder return over any 12-month period exceeding +50%.
Not achieved
Continue to be an employee or Director of AMD until 31 December 2020. Achieved on 31 December
2020
The achievement of up to four (maximum) of the six milestones listed above will result in 100% of the shares
vesting, with 25% of the shares vesting upon the achievement of a milestone. As at 30 June 2022, three of the
milestones have been achieved. During the year ended 30 June 2022, the Company bought back, for no
68
Annual Report 30 June 2022
consideration, a total of 3,750,000 shares, including vested and unvested 2019 ESP shares in accordance with the
terms of the ESP plan.
Refer to the Remuneration Report for full details of vesting periods and restrictive conditions to be achieved.
22.
OPERATING SEGMENTS
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
Board in assessing performance and determining the allocation of resources. The Group operates in two segments
in the current year, being mineral exploration, and evaluation in Western Australia and Burkina Faso. The Company
is domiciled in Australia. Segment revenues are allocated based on the country in which revenue was earned. Segment
assets are allocated to the country where the assets are located.
Year Ended 30 June 2022
Other income
Total segment revenue
Australia
Burkina Faso
Consolidated
$
365,352
365,352
$
-
-
$
365,352
365,352
Total comprehensive (loss) from continuing
operations before tax
(2,802,998)
(654,698)
(3,457,696)
As at 30 June 2022
Segment assets
Total assets of the Group
Segment liabilities
Total liabilities of the Group
Year Ended 30 June 2021
Other income
Total segment revenue
1,744,938
7,637,416
1,121,731
66,585
9,382,354
9,382,354
1,188,316
1,188,316
539,928
539,928
-
-
539,928
539,928
Total comprehensive (loss) from continuing
operations before tax
(2,214,155)
(464,306)
(2,678,461)
As at 30 June 2021
Segment assets
Total assets of the Group
Segment liabilities
Total liabilities of the Group
6,531,608
6,768,202
1,681,806
66,894
13,299,810
13,299,810
1,748,700
1,748,700
69
Annual Report 30 June 2022
23.
FINANCIAL RISK MANAGEMENT
Overview
The Group has exposure to the following risks from their use of financial instruments:
- credit risk
- 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 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.
Substantial cash balances are held with recognised institutions with credit rating A-3 or above as a way of 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.
(b) Liquidity risk
2022
$
271,819
31,207
303,026
2021
$
3,283,858
71,786
3,355,644
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.
The maturity profile of the Group’s financial assets and liabilities are:
70
Annual Report 30 June 2022
2022
Cash and cash equivalents
Trade and other receivables
Lease liabilities
Trade and other payables
Convertible note liability
2021
Carrying
Amount
$
271,819
31,207
(29,675)
(157,638)
(987,066)
(871,353)
Carrying
Amount
$
Trade and other receivables
Lease liabilities
Trade and other payables
Convertible note liability
71,786
(43,341)
(321,968)
(989,852)
Up to 6
6-12 months
1-2 years
2-3 years
months
$
271,819
31,207
(8,213)
$
-
-
$
-
-
$
-
-
(8,268)
(16,481)
(14,990)
(157,638)
-
-
(40,110)
(39,890)
(80,000)
-
-
97,065
(48,158)
(96,481)
(14,990)
Up to 6
6-12 months
1-2 years
2-3 years
months
$
71,786
(7,950)
(321,968)
$
-
-
$
-
-
$
-
-
(7,922)
(16,481)
(14,990)
-
-
-
(80,000)
(94,990)
(40,110)
(39,890)
(80,000)
2,000,483
2,985,616
(47,812)
(96,481)
Cash and cash equivalents
3,283,858
3,283,858
The maturity profile disclosed are the contractual undiscounted cashflows.
(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 funding of exploration activities in Africa in Central African
Francs (pegged to the EUR) and USD denominated prepayments. The exposure is not considered material.
Interest rate risk:
Exposure to interest rate risk
The Group’s maximum exposure to interest rates at the reporting date was:
Range of
effective
interest rate
Carrying
Variable
Fixed interest
amount
interest rate
rate
%
$
$
2022
Financial Assets – Current
Cash and cash equivalents
0 – 0.01
271,819
271,819
Financial Liabilities – Current
$
-
Total
$
271,819
Lease liabilities
6.47
15,123
15,123
15,123
Financial Liabilities – Non-Current
Lease liabilities
Convertible note liability
6.47
8.00
14,552
987,066
14,552
987,066
14,552
987,066
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Annual Report 30 June 2022
Range of
effective
interest rate
Carrying
Variable
Fixed interest
amount
interest rate
rate
Total
2021
Financial Assets – Current
Cash and cash equivalents
0 - 2.2
3,283,858
3,283,858
-
3,283,858
Financial Liabilities – Current
Lease liabilities
6.47
13,666
Financial Liabilities – Non-Current
Lease liabilities
6.47
29,675
-
-
13,666
13,666
29,675
29,675
The Group holds the majority of its cash and cash equivalents within a current account attracting a weighted interest
rate of 0.0095% pa (2021: 0.08% 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
$
$
$
$
$
2022
Cash and cash equivalents
271,819
2,718
(2,718)
(2,718)
2,718
2021
Cash and cash equivalents
3,283,858
32.839
(32,839)
(32,839)
32,839
Fair value of financial instruments
The fair value of Group's financial instruments at reporting date are:
2022
2021
Carrying amount
Fair value
Carrying amount
Fair value
Cash and cash equivalents
Trade and other receivables
Other financial assets
$
271,819
31,207
55,556
$
271,819
31,207
55,556
Lease liabilities
(29,675)
(29,675)
Trade and other payables
Convertible note liability
(157,638)
(987,066)
(815,797)
(157,638)
(987,066)
(815,797)
$
3,283,858
71,786
-
(43,341)
(321,968)
(989,852)
2,000,483
$
3,283,858
71,786
-
(43,341)
(321,968)
(989,852)
2,000,483
The Directors consider the carrying amount of the financial instruments (including cash and cash equivalents, trade and
other receivables, and other financial assets) to be a reasonable approximation of their fair value on account of the
short maturity cycle. The Directors consider the carrying amount of the financial instruments (including lease liabilities,
trade and other payables, and convertible note liability) to be a reasonable approximation of their fair value at 30 June
2022.
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Annual Report 30 June 2022
Fair value hierarchy
AASB 13: Fair Value Measurement requires disclosure of fair value measurements by level of the fair value hierarchy, as
follows:
▪
▪
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices)
▪
Level 3: inputs for the asset or liability that is not based on observable market data (unobservable inputs)
The Group’s convertible notes embedded derivative component is not traded on an active market. The fair value is
based on significant observable inputs (level 3) at the end of the reporting period. These instruments are included in
level 3. The significant observable inputs used includes the historical volatility rate and interest rate.
The fair value of the Group's contingent consideration is measured using management’s weighted probability of
performance milestones being achieved (refer note 15(c) for performance milestones attaching the Performance Rights).
These instruments are included in level 3.
2022
Date of
valuation
Total
$
Assets measured at fair value:
Financial assets (Unlisted Investment)
30-Jun-22
55,556
Liabilities measured at fair value:
Convertible notes embedded derivative
30-Jun-22
Contingent consideration
30-Jun-22
1,026
13,937
2021
Date of
valuation
Total
$
Liabilities measured at fair value:
Convertible notes embedded derivative
30-Jun-21
4,328
Contingent consideration
30-Jun-21
209,047
Quoted prices
Significant
Significant
in active
observable
unobservable
markets
inputs
inputs
(Level 1)
(Level 2)
(Level 3)
$
-
-
-
$
-
-
-
$
55,556
1,026
13,9371
Quoted prices
Significant
Significant
in active
observable
unobservable
markets
inputs
inputs
(Level 1)
(Level 2)
(Level 3)
$
-
-
$
-
-
$
4,328
209,0471
1 Refer note 14(b) for details of movement in Level 3 instrument (contingent consideration).
(d) 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
73
Annual Report 30 June 2022
cash equivalents plus equity. The Board 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.
24.
PARENT ENTITY INFORMATION
(a)
Financial Position
2022
$
2021
$
249,452
9,066,317
3,283,480
9,949,435
9,315,769
13,232,915
106,176
1,015,555
1,121,731
453,231
1,228,574
1,681,805
8,194,038
11,551,110
45,957,349
45,957,349
2,950,389
2,890,445
(40,713,702)
(37,296,684)
8,194,038
11,551,110
2022
$
2021
$
(3,417,018)
(2,443,847)
-
-
(3,417,018)
(2,443,847)
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
(b)
Statement of Comprehensive Income
(Loss) for the year
Other comprehensive income
Total comprehensive (loss)
(c)
Commitments
Parent entity commitments are as disclosed within note 19.
(d)
Contingent assets / liabilities
The parent entity does not have any contingent assets or contingent liabilities.
25. MALINDA LITHIUM PROJECT TRANSACTIONS
Arrow announced on 23 August 2021 that it had entered an earn-in agreement with Electrostate Pty Ltd (Electrostate)
wherein Electrostate may earn up to 85% of Arrow’s Malinda lithium project in Western Australia consiting of three exploration
tenements, E09/2169, E09/2170 and E09/2283 in the Gascoyne region of north-western WA. The agreement provided for
Electrostate to perform exploration activities on the tenements over an eighteen-month period in addition to cash payments
74
Annual Report 30 June 2022
to Arrow. In respect of this earn-in arrangement, the Company received a total of $112,967 (included in income at note 2(a))
(consisting of $60,000 cash consideration and $52,967 for reimbursement of exploration expenditure).
On 17 March 2022 Arrow announced that it had renegotiated commercial terms with Electrostate. Under the new terms
Arrow and Electrostate entered into a Share Sale Agreement (SSA) and associated Shareholders’ Agreement, pursuant to
which Electrostate would purchase a 90% equity interest in Arrow (Malinda) Pty Ltd and Arrow would retain a 10% non-
diluting free-carried interest through to a decision to mine. Total cash consideration for the transaction, which completed
on 6 April 2022, was $500,000. This resulted in a gain on disposal of subsidiary of $202,253 being recognised (included in
income at note 2(a)). The retained 10% interest in Arrow (Malinda) Pty Ltd has been classified as an financial asset at 30
June 2022 and is carried at a fair value of $55,556 (refer note 5).
26.
SUBSEQUENT EVENTS
Non-Brokered Private Placement of $350,000
On 13 July 2022, the Company announced it had received commitments as part of a non-brokered private placement to
qualified sophisticated and professional investors to raise $350,000 via the issue of 58,333,334 shares in the Company at an
issue price of $0.006 per share (Placement).
Divestment of Strickland Copper Gold Project, WA
On 13 July 2022, the Company announced that it has executed a tenement sale and purchase agreement (via its subsidiary)
with Dreadnought Resources Ltd (ASX:DRE) (Dreadnought) by which Dreadnought will acquire a 100% interest in the
Strickland Copper Gold Project (comprising E16/495, E30/493, E30/494, E77/2403, E77/2416, E77/2432, E77/2634) in Western
Australia. Settlement of this transaction occurred on 1 August 2022.
Pursuant to the terms of the agreement:
▪
▪
Arrow received $20,000 cash payment upon signing of the agreement;
Arrow received $280,000 cash payment at settlement;
▪ Dreadnought issued Arrow 2,350,000 fully paid ordinary shares in Dreadnought at settlement (escrowed until 31
January 2023);
▪
Arrow will receive a further cash payment of $300,000 by 30 November 2022;
▪ On the identification and reporting of JORC compliant inferred mineral resource of >500,000oz gold equivalent
Dreadnought will pay Arrow $1,000,000 cash; and
▪
Arrow will retain a total 1% Net Smelter Return royalty in relation to minerals mined by or on behalf of Dreadnought
on the Strickland Copper Gold Project.
Non-Binding Term Sheet to Acquire 60.5% in the Simandou North Iron Project
On 13 July 2022, the Company announced that it has executed a non-binding term sheet to acquire up to a 60.5% controlling
interest in Amalgamated Minerals Pte. Ltd. (Amalgamated), a private Singaporean registered company, which holds a 100%
interest in the Simandou North Iron Project in Guinea, West Africa (Proposed Transaction).
It should be noted that the current agreement is in the form of a non-binding term sheet. Whilst the parties have entered
into this non-binding term sheet willingly and in good faith, there are no guarantees final definitive agreements will be
executed or that the Proposed Transaction will proceed.
75
Annual Report 30 June 2022
The key commercial terms upon which Arrow will look to acquire up to a 60.5% interest in Amalgamated under the Proposed
Transaction are outlined as follows:
▪
Arrow to issue 81,250,000 fully paid ordinary Arrow shares for three-month exclusivity option to acquire up to a
60.5% interest in the Simandou North Project through Amalgamated (Exclusivity Consideration Shares);
▪
Subject to satisfactory due diligence and certain conditions precedent, including Arrow obtaining all necessary
shareholder approvals, Arrow may purchase a 33.3% interest in Amalgamated from Ropa Investments (Gibraltar)
Limited for 500,000,000 fully paid ordinary Arrow shares (Stage 1);
▪
Arrow will look to provide, by way of an unsecured, interest-free shareholder loan, $2.5 million of exploration
expenditure funding for the Simandou North Iron Project within 24 months from Stage 1 completion (Expenditure
Commitment), which will be repayable in cash by Amalgamated on or before the date that is 15 years after the
date on which any part of the loan is first advanced to Amalgamated or such other date as agreed between Arrow
and Amalgamated (Loan). The Loan will not be convertible into additional shares in Amalgamated;
▪
If the Expenditure Commitment is satisfied by Arrow and subject to certain conditions precedent, including Arrow
obtaining all necessary shareholder approvals, Arrow may purchase a further 27.2% interest in Amalgamated for
$1,000,000, either through the issue of Arrow shares based on a 10-day VWAP or cash, at the sole discretion of
Arrow, to receive a controlling 60.5% interest in Amalgamated (Stage 2); and
▪
Arrow and the other Amalgamated shareholders will enter into a shareholders deed to govern, amongst other
things, the terms on which future exploration on the Simandou North Iron Project may be progressed and funded.
If Arrow decides to proceed with the Proposed Transaction following its successful and satisfactory completion of the due
diligence investigations of Amalgamated and the Simandou North Iron Project, and having entered into definitive binding
agreements, Arrow may need to raise additional capital to provide the $2.5 million Expenditure Commitment and associated
Loan. Arrow anticipates that such capital raise will be undertaken in late October 2022 either via an equity placement to
professional or sophisticated investors (to which shareholder approval under Listing Rule 7.1 will be sought) or via a
shareholder supported rights issue, in both cases and subject to market conditions, at an anticipated issue price of at least
$0.006 per share, being the same issue price as the Placement (Capital Raise). Subject to all applicable laws (including any
necessary shareholder approvals), existing Amalgamated shareholder Ropa Investments (Gibraltar) Limited, may potentially
look to underwrite the Capital Raise.
Arrow engaged the services of CH-Qorum GmbH (an unrelated party) (Facilitator) to introduce and engage Amalgamated
in relation to the Simandou North Project and act as an exclusive facilitator to Arrow in connection with the proposed
transaction. For purposes of facilitating an introduction to Amalgamated and assisting in securing a successful transaction
and investment by Arrow in the Simandou North Project, the Facilitator was entitled to be issued 81,250,000 fully paid
ordinary shares in Arrow (Facilitator Fee Shares).
Sale of remaining 10% interest in Malinda Lithium Project, WA
On 8 August 2022 the Company announced that it had entered into a Share Sale Agreement with Electrostate for the sale
of Arrow’s remaining 10% equity interest in Arrow (Malinda) Pty Ltd, the holding company of the Malinda Lithium Project in
Western Australia. The total cash consideration for the sale was A$700,000, which was received upon completion of the
transaction on 8 August 2022.
76
Annual Report 30 June 2022
Shares
A total of 220,833,334 shares were issued subsequent to 30 June 2022, including:
▪
▪
▪
58,333,334 shares issued on 14 July 2022 (being the Placement Shares);
81,250,000 shares issued on 14 July 2022 (being the Exclusivity Shares); and
81,250,000 shares issued on 19 July 2022 (being the Facilitator Fee Shares).
On 19 August 2022, a total of 11,000,000 shares previously issued under the ESP were bought back for no consideration and
cancelled.
Options
On 22 August 2022, a total of 120,150,000 unlisted options exercisable at $0.02 expired.
Performance Rights
On 26 August 2022, a total of 69,682,290 performance rights (Class B) expired.
27.
AUDITOR REMUNERATION
Auditors' remuneration - for audit or review of financial report
HLB Mann Judd Services (WA) Pty Ltd
Pitcher Partners BA&A Pty Ltd2
Auditors' remuneration - for other services
Pitcher Partners (WA) Pty Ltd – Taxation
1 Includes $13,000 for tax advice related to Burkina Faso obligations and liabilities.
2 Pitcher Partners BA&A Pty Ltd were the auditors of the Company until 30 June 2021.
2022
$
2021
$
40,000
5,239
45,239
-
38,389
38,389
6,150
24,1711
77
Annual Report 30 June 2022
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 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 2022 and of its performance for
the year ended on that date: and
b) complying with Accounting Standards and Corporations Regulations 2001; and
2.
Subject to the matters described in note 1(b), there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and payable; and
3.
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 2022.
4.
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
Hugh Bresser
Managing Director
Perth, 2 September 2022
78
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
2022, 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) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial
performance for the year then ended; and
(b) 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 Regarding Going Concern
We draw attention to Note 1 b) in the financial report, which indicates that a material uncertainty exists
that may cast significant doubt on the entity’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
79
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.
In addition to the matter described in the Material Uncertainty Regarding Going Concern section, we
have determined the matters described below to be the key audit matters to be communicated in our
report.
Key Audit Matter
How our audit addressed the key audit
matter
Carrying Value of Exploration and Evaluation Assets
Refer to Note 10
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group
capitalises
evaluation
expenditure and as at 30 June 2022 had an
exploration and evaluation assets balance of
$8,179,606.
exploration
and
Exploration and evaluation expenditure was
determined to be a key audit matter as it is
important to the users’ understanding of the
financial statements as a whole and was an area
the most audit effort and
which
involved
those charged with
communication with
governance.
Our procedures included but were not limited
to:
- Obtaining an understanding of the key
processes associated with management’s
review of the carrying value of exploration
and evaluation expenditure;
indicators of
- Considering the Directors’ assessment of
in
potential
addition to making our own assessment;
- Obtaining evidence that the Group has
current rights to tenure of its areas of
interest;
impairment
- Considering the nature and extent of
planned ongoing activities;
- Substantiating a sample of expenditure by
agreeing to supporting documentation;
and
- Examining the disclosures made in the
financial report.
Information Other than the Financial Report and Auditor’s Report Thereon
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 2022, 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.
80
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 Group 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 have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with 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.
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.
81
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
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 the directors’ report for the year ended 30 June
2022.
In our opinion, the Remuneration Report of Arrow Minerals Limited for the year ended 30 June 2022
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.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
2 September 2022
B G McVeigh
Partner
82
Annual Report 30 June 2022
Shareholder Information
ADDITIONAL INFORMATION
The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public
companies.
Information as at 22 August 2022:
1.
Shares on Issue
Total number of issued fully paid ordinary shares is 2,033,765,094.
2.
Distribution of Holders
Spread
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
>10,000
Total
3.
Unmarketable Parcels
No. of Holders
No. of Shares
% Issued Capital
91
80
76
831
1,067
2,145
10,657
218,915
575,569
39,891,213
1,993,068,740
2,033,765,094
0.00%
0.01%
0.03%
1.96%
98.00%
100%
The number of holders of less than a marketable parcel of fully paid shares is 1,146.
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
Number of Shares Held
Percentage Held
GenGold Resource Capital Pty Ltd
131,166,670
6.45%
5.
Restricted Securities
There are no shares currently on issue subject to voluntary escrow.
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.
83
Annual Report 30 June 2022
8.
Top 20 Holders – Ordinary Shares
Rank Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
GENGOLD RESOURCE CAPITAL PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR MARC DOMINIQUE SENGES
NASDAQ SECURITIES AUSTRALIA PTY LTD
CITICORP NOMINEES PTY LIMITED
TORRES INVESTMENTS PTY LTD
PERTH SELECT SEAFOODS PTY LTD
BNP PARIBAS NOMS PTY LTD
EQUITY TRUSTEES LIMITED
ZERO NOMINEES PTY LTD
TRANSAUSTRALIA GROUP PTY LTD
LHC MINE FINANCE LTD
R & K WATSON PTY LTD
BALTIS FAMILY SUPER PTY LTD
PHILIP & JANET TURNER PTY LTD
QURAT-UL-AIN KHATRI
17 MR ANDREW CHARLES DUNCAN + MRS MARIA DUNCAN
Units
% of Units
on issue
131,166,670
73,950,467
47,750,000
41,666,667
41,397,379
40,525,843
40,000,000
39,758,682
37,500,000
34,482,759
30,000,000
27,500,000
26,924,761
26,055,727
20,950,000
20,000,000
18,766,000
6.45
3.64
2.35
2.05
2.04
1.99
1.97
1.95
1.84
1.7
1.48
1.35
1.32
1.28
1.03
0.98
0.92
18 MR ANDREW CHARLES DUNCAN + MRS MARIA DUNCAN
19 MISS NICOLA JANE FRASER + MRS PATRICIA KAY FRASER + MISS STACEY
18,000,000
0.89
MAREE FRASER
20 MR WALEED KH S A ESBAITAH
Totals: Top 20 holders of Arrow ORDINARY FULLY PAID
Total Remaining Holders Balance
Total Holders Balance
9.
Unquoted Securities
As at 22 August 2022 the following securities over un-issued shares were on issue:
•
•
•
•
•
•
•
•
•
•
10,000,000 unlisted options exercisable at $0.0125 on or before 15 October 2022
37,500,000 unlisted options exercisable at $0.0145 on or before 22 August 2023
2,850,000 unlisted options exercisable at $0.0100 on or before 11 December 2023
4,300,000 unlisted options exercisable at $0.0090 on or before 11 October 2024
8,000,000 unlisted options exercisable at $0.0090 on or before 25 November 2024
9,900,000 unlisted options exercisable at $0.0060 on or before 5 August 2025
5,000,000 unlisted options exercisable at $0.0110 on or before 25 November 2025
64,682,290 Class B Performance Rights expiring 26 August 2022
64,682,300 Class C Performance Rights expiring 26 August 2023
1,000,000 Convertible Notes
17,000,000
752,160,955
1,281,604,139
2,033,765,094
0.84
36.98
63.02
100
84
Annual Report 30 June 2022
10. Unquoted Equity Security Holders with Greater than 20% of an Individual Class
As at 22 August 2022 the following classes of unquoted securities had holders with greater than 20% of that class
on issue as set out below.
% Interest
Options exercisable at $0.0125 on or before 10 October 2022
Simon Bolster & Roslyn O’Sullivan
Mr Edward John Baltis
Options exercisable at $0.0145 on or before 22 August 2023
Zenix Nominees Pty Ltd
Options exercisable at $0.010 on or before 11 December 2023
Ulrike Annette Johnstone
Ballo Boureima
Soro Arouna
Options exercisable at $0.009 on or before 11 October 2024
Ulrike Annette Johnstone
Ballo Boureima
Soro Arouna
Options exercisable at $0.009 on or before 25 November 2024
Howard Golden + Ellen Louise Grote
Milagro Ventures Pty ltd
Options exercisable at $0.006 on or before 8 August 2025
Ulrike Annette Johnstone
Ballo Boureima
Bellatrix Corporate Pty Ltd
Options exercisable at $0.011 on or before 25 November 2025
Howard Golden + Ellen Louise Grote
Milagro Ventures 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
Convertible Notes
Budworth Capital Pty Ltd ATF Budworth Capital Trust
Seascape Capital Pty Ltd ATF Williams Trading Trust
11. Company Secretary
50.0%
50.0%
96. 0%
31.6%
35.1%
21.1%
31.4%
34.9%
20.9%
31.3%
31.3%
25.3%
25.3%
25.3%
50.0%
50.0%
100%
100%
42.5%
37.5%
The names of the Joint Company Secretary are Catherine Grant-Edwards and Melissa Chapman.
12. Registered Address
The address of the principal registered office is: Suite 5, 63 Hay Street, Subiaco WA 6008.
85
Annual Report 30 June 2022
13. Registers
The registers of securities are held at the following address:
Advanced Share Registry Service
150 Stirling Highway
Nedlands WA 6009
86
Annual Report 30 June 2022
Tenement Schedule as at 22 August 2022
Tenement ID
Project
Holder
Interest
2020-084/MMC/SG/DGCM
Hounde South & Nako
Gold Square Resources Sasu
2020-161/MMC/SG/DGCM
Hounde South & Nako
Gold Square Resources Sasu
2020-162/MMC/SG/DGCM
Hounde South & Nako
Gold Square Resources Sasu
2020-190/MMC/SG/DGCM
Divole East & West
Gold Square Resources Sasu
2020-192/MMC/SG/DGCM
Divole East & West
Gold Square Resources Sasu
2020-193/MMC/SG/DGCM
Divole East & West
Gold Square Resources Sasu
19/047/MMC/SG/DGCM
Divole East & West
Farafina Resources Sasu
2020-147/MMC/SG/DGCM
Boulsa
Farafina Resources Sasu
100%
100%
100%
100%
100%
100%
100%
100%
87