ALCHEMY RESOURCES LIMITED
ABN 17 124 444 122
ANNUAL REPORT
For the year ended 30 June 2020
CONTENTS
CORPORATE DIRECTORY ................................................................................................................................................... 2
CHAIRMAN’S LETTER .......................................................................................................................................................... 3
KEY INVESTMENT HIGHLIGHTS....................................................................................................................................... 4
REVIEW OF ACTIVITIES ....................................................................................................................................................... 5
DIRECTORS’ REPORT ......................................................................................................................................................... 27
AUDITOR’S INDEPENDENCE DECLARATION ........................................................................................................... 37
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020 ......................................................................................................................... 38
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 ......................................... 39
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020 ......... 40
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020 ......................... 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED
30 JUNE 2020 ....................................................................................................................................................................... 42
DIRECTORS’ DECLARATION............................................................................................................................................ 66
INDEPENDENT AUDITOR’S REVIEW REPORT ........................................................................................................... 67
ADDITIONAL SHAREHOLDER INFORMATION AS AT 14 SEPTEMBER 2020 ................................................. 70
TENEMENT SCHEDULE ..................................................................................................................................................... 72
ANNUAL REPORT 30 JUNE 2020
Page 1 of 73
CORPORATE DIRECTORY
DIRECTORS
Lindsay Dudfield Non-Executive Chairman
Leigh Ryan
Liza Carpene
Anthony Ho
Managing Director
Non-Executive
Non-Executive
COMPANY SECRETARY
Bernard Crawford
REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS
Suite 8, 8 Clive Street
West Perth WA 6005
Telephone:
Facsimile:
Email:
Web:
AUDITORS
+61 (8) 9481 4400
+61 (8) 9481 4404
admin@alchemyresources.com.au
www.alchemyresources.com.au
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
BANKERS
National Australia Bank
226 Main Street
Osborne Park WA 6017
SHARE REGISTRY
Automic Group
Level 2, 267 St Georges Terrace
Perth WA 6000
Telephone:
+61 (2) 9698 5414
STOCK EXCHANGE LISTING
The Company is listed on the Australian Securities Exchange Ltd (“ASX”)
Home Exchange: Perth, Western Australia
ALY
ASX Code:
ANNUAL REPORT 30 JUNE 2020
Page 2 of 73
CHAIRMAN’S LETTER
Dear Fellow Shareholders,
On behalf of the Board of Directors, I am pleased to present the Annual Report of Alchemy Resources
Limited for the year ended 30 June 2020.
Alchemy holds five main projects covering a range of commodities including gold, base metals, nickel
and cobalt, all located in mining friendly parts of Australia and each with the potential to host “company
making” deposits.
During the period Alchemy undertook two drilling programs at its 100% owned Karonie Project in
Western Australia, recording broad gold intercepts from the Parmelia and KZ5 prospects, located
immediately along strike of Silver Lake’s Aldiss Mining Centre, with follow up drilling to commence soon.
Our Bryah Basin Base Metals and Gold Joint Ventures, also in Western Australia, continued to be
advanced at no cost to Alchemy by partners Sandfire Resources and Superior Gold respectively.
Sandfire’s aggressive drilling campaign on our ground along strike of their DeGrussa copper-gold mine
was paused due to COVID-19 related issues but is expected to resume in the December 2020 quarter
with 1,400 holes proposed. Furthermore, Superior Gold is evaluating the potential to include the
114,000oz Hermes South deposit as a source of open pit feed for their Plutonic Mine, 65km to the
northeast, with production currently slated to commence mid-2021.
Despite COVID-19 related travel restrictions, Alchemy successfully developed exciting new targets at its
New South Wales projects, including a strong IP anomaly interpreted down-plunge of shallow gold and
base metal intercepts at Yellow Mountain Mine. Alchemy also recognised that a large magnetic feature
at the nearby Melrose prospect represents a significant hydrothermal alteration zone similar to zones
associated with major porphyry copper-gold deposits like Cadia-Ridgeway, with work to better define
drill targets planned. Furthermore, drill testing of the interpreted extensions of high-grade gold and
base metal mineralisation at Overflow is expected to commence late 2020.
On 11 August 2020 Alchemy completed a placement of shares at $0.015 to professional investors to
raise $1M, with a 1 for 10 entitlement offer to Shareholders at the same price completed in early
September raising a further $0.8M. The proceeds from these raisings will fund the drilling proposed at
Karonie, Overflow and Yellow Mountain Mine, and define drill targets at Melrose. Alchemy recognises
the support of Veritas Securities in facilitating the placement and warmly welcomes the new
Shareholders introduced by Veritas.
Finally, on behalf of the Board, I would like to thank Leigh Ryan, our Managing Director, and the rest of
the Alchemy team for their efforts during the period and thank you, our Shareholders, for your ongoing
support as we look forward to an exciting year ahead.
Lindsay Dudfield
Chairman
ANNUAL REPORT 30 JUNE 2020
Page 3 of 73
KEY INVESTMENT HIGHLIGHTS
Growth strategy focussed on building a portfolio of quality mineral resources through innovative
exploration and strategic acquisition, with the aim of realising value to Shareholders through the mining
or sale of mineral discoveries.
Karonie and Lake Rebecca Projects - quality gold targets close to existing resources and processing
infrastructure.
Lachlan/Cobar Basin Projects - high grade gold and base metal drill targets within the Overflow and
Yellow Mountain Projects.
Bryah Basin Project - joint-venture funded exploration for high-grade gold and base metals in a highly
prospective metallogenic province.
West Lynn Project - significant Ni-Co-Al resource close to infrastructure.
Experienced Board and management team.
Enterprise Value of ~$10M; highly leveraged to success.
Strong major Shareholder support.
ANNUAL REPORT 30 JUNE 2020
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REVIEW OF ACTIVITIES
Alchemy Resources Limited (ASX: ALY; “Alchemy” or “the Company”) is an Australian exploration
company focused on growth through the discovery and development of gold, base metal and nickel-
cobalt-alumina resources within Australia. The Company has built a significant land package in the
Karonie-Carosue Dam greenstone belt in the Eastern Goldfields region in Western Australia, and has
entered into a Farm-In and Joint Venture Agreement with Heron Resources Ltd (ASX: HRR; “Heron”) to
earn an 80% interest in the Lachlan/Cobar Basin Projects in New South Wales, both well-endowed metal
provinces with significant upside for gold, silver, copper, lead, zinc, nickel and cobalt mineralisation.
The Company also maintains its interest in the Bryah Basin Project in the gold and base metal-rich
Gascoyne region of Western Australia, where farm-in and joint venture partners, Sandfire Resources NL
(ASX: SFR; “Sandfire”), and Billabong Gold Pty Ltd (“Billabong”), a subsidiary of TSX-V listed Superior
Gold Inc. (TSX-V: SGI) (“Superior”), are continuing to advance base metal and gold exploration,
respectively (Figure 1).
Figure 1: Alchemy Resources’ Project Location Map
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REVIEW OF ACTIVITIES
Exploration over the past 12 months focussed on the Karonie Gold Project in Western Australia. This
work included regional surface geochemistry, and aircore (AC) and reverse circulation (RC) drilling at
the Taupo, KZ5 and Parmelia prospects along strike of Silver Lake’s Aldiss Mining Centre.
A significant area of highly prospective greenstones was pegged forming a new project called the Lake
Rebecca Project, centred 80km north of Karonie and strategically located near established resources
and mining infrastructure.
Exploration within the Bryah Basin Joint Venture continued with Sandfire Resources completing phase 1
of an aggressive AC and RC drilling campaign along strike of their DeGrussa copper-gold mine, and
Superior Gold commencing design and scheduling work for the Hermes South resource where mining
is expected to commence in the first half of 2021.
In NSW, two highly prospective exploration targets were identified at the Yellow Mountain Mine and
Melrose prospects, and surveying and field preparations for diamond drilling targeting high-grade
gold-silver-zinc-lead mineralisation down plunge to the south of the Overflow historic workings were
completed.
Alchemy’s strategy for the next 12 months is to:
• Undertake targeted drill programs at the highly prospective Karonie Gold Project with the aim of
delineating significant gold resources;
• Unlock the gold and base metal potential of the Lachlan/Cobar Projects through systematic
exploration and targeted drilling campaigns with a focus on the Overflow and Yellow Mountain Mine
prospects;
• Closely monitor exploration and Hermes South mining activities undertaken by Billabong within the
Bryah Basin Joint Venture;
• Undertake reviews and detailed reporting of Sandfire Resources funded exploration for gold and
base metal deposits within the Bryah Basin Joint Venture;
• Advance the West Lynn Project by conducting kinetic leach test work for nickel-cobalt and alumina
on selected ore samples, and pursue and assess value creation options; and
• Continue to enhance the Company’s position through strategic investment decisions and evaluation
of quality advanced gold and base metal project opportunities throughout Australia.
ANNUAL REPORT 30 JUNE 2020
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REVIEW OF ACTIVITIES
KARONIE PROJECT (WA) (Alchemy 100%)
The Karonie Project includes eleven granted licences and three licence applications covering 1,209km2
of Archean greenstones in the Eastern Goldfields of Western Australia. The Project is located 100km east
of Kalgoorlie in a highly prospective geological setting, covering numerous mineralised structures
associated with the regional-scale Keith-Kilkenny Fault and Claypan Shear Zone (Figure 2). It is
strategically located within 50km of the Randalls gold processing plant, and is along strike to the north
and south of Silver Lake Resources’ (ASX: SLR) Karonie/Harry’s Hill/Tank and French Kiss deposits which
host resources and reserves of 0.6Moz @ 1.9g/t Au1, where mining is continuing. Alchemy’s two large
eastern licences are located just 12km along strike to the south of Breaker Resources’ (ASX: BRB)
Bombora deposit which contains an Indicated and Inferred Resource of 23.2Mt @ 1.3g/t Au for 1Moz2.
The Bombora mineralisation is associated with the Claypan Shear Zone which extends for over 38km of
strike through Alchemy’s eastern licences.
Figure 2: Karonie Project tenements, major deposits, prospects and
interpreted major structures over published geology
1 Refer to Silver Lake Resources Limited ASX announcement dated 19 August 2020
2 Refer to Breaker Resources Limited ASX Announcement dated 2 September 2019
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REVIEW OF ACTIVITIES
During the year drill programs were completed at several key gold prospects including Parmelia, KZ5,
and Taupo (Figure 2). The drilling targeted Karonie style gold mineralisation immediately along strike
to the north and south of the Silver Lake Resources’ Aldiss Mining Centre.
Seven RC holes for 746m were drilled at the Parmelia Prospect located ~2km south of Silver Lake’s Tank
South Prospect in order to test along strike to the north and south of a previous Gold Fields Australasia
AC intercept of 20m @ 1.0g/t Au from 32m3. The RC drilling returned best intercepts of 26m @ 1.6g/t
Au from 83m (incl. 13m @ 2.1g/t Au from 87m), 9m @ 1.2g/t Au from 112m (incl. 2m @ 2.2g/t Au from
112m), and 19m @ 0.81g/t Au from 70m (incl. 4m @ 1.1g/t Au from 85m) (Figures 3 & 4).
The drilling has confirmed that gold mineralisation is confined to a single, consistently mineralised silica-
biotite-albite-pyrite altered dolerite unit close to vertical in nature, and has identified a gold depletion
zone up-dip of primary gold mineralisation. Historic drilling along strike to the north and south of the
intercepts is limited to ineffective, shallow, wide spaced vertical AC drill holes that have not tested the
primary mineralisation, and subsequently gold mineralisation at Parmelia remains open down dip and
along strike to the north and south.
Figure 3: Parmelia Prospect cross section
Figure 4: Parmelia Prospect: Significant intercepts over
interpreted geology
3 Refer to Gold Fields Australasia Pty Ltd open file annual report (C63/2000) dated 5 December 2002
ANNUAL REPORT 30 JUNE 2020
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REVIEW OF ACTIVITIES
Further RC drilling along strike to the north and south is planned at Parmelia in order to confirm the
dip of mineralisation and identify high-grade plunging gold shoots similar in style to Silver Lake’s Tank
South Prospect. A Program of Work has been approved by the Department of Mines, Industry
Regulation and Safety (DMIRS) and drilling is due to commence Q4 2020.
Drilling at the KZ5 Prospect during the year included two RC holes for 333m. One RC hole (K5RC002)
targeted the up and down plunge position of two historic drill intercepts (20m @ 1.6g/t Au from 190m
and 28m @1.1g/t Au from 26m respectively). The hole returned an intercept of 26m @ 1.3g/t Au, 0.85%
Zn from 125m (incl. 5m @ 2.6g/t Au, 0.95% Zn from 125m) confirming the widths and grades intercepted
in previous drilling (Figures 5 & 6). The host rocks, alteration and sulphide mineralisation encountered
in K5RC002 suggest a potential volcanogenic massive sulphide (VMS) origin. A second hole (K5RC003),
designed to test a strong soil anomaly ~500m to the south-east of K5RC002, returned no significant
intercepts.
Figure 5: KZ5 Prospect cross section (6569275N)
(Alchemy intercept in yellow box)
Figure 6: KZ5 Prospect drill hole locations and significant
intercepts over interpreted geology
Historic surface Induced Polarisation (IP) and surface electromagnetic (EM) surveys identified various
chargeability and conductivity anomalies which correlate well with an interpreted VMS ‘exhalative’
sulphide horizon at the KZ5 prospect, and an interpreted ‘feeder’ zone ~300m to the east (Figure 7)4.
4 Refer to Integra Mining Limited ASX announcement “KZ5 Exploration Update” dated 16 January 2007. CP: C. Cairns
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REVIEW OF ACTIVITIES
Figure 7: KZ5 IP chargeability anomaly draped on exaggerated topography
Additional drilling has been planned to test several down-hole EM conductors located within the VMS
horizon at KZ5, that potentially indicate additional massive sulphide mineralisation along strike and
down dip of previous drill intercepts.
Assay results from infill soil sampling completed at KZ5 during the year confirmed and further defined
previous gold anomalism including the identification of a strong gold in soil anomaly (up to 454ppb
Au) located near old workings ~600m east of the main area of drilling at KZ5. Further evaluation of
this anomaly is required.
Twenty-four angled AC holes for 1,198m, and seven angled RC holes for 750m were drilled at the Taupo
Prospect, located 2km along strike to the north of the Karonie Main open cut mine. AC drilling returned
best intercepts of 6m @ 1.7g/t Au from 36m (incl. 2m @ 3.8g/t Au from 40m), and 6m @ 1.0g/t Au
from 32m (incl. 2m @ 1.5g/t Au from 36m) (Figures 8 & 9) with both of these holes ending in gold
mineralisation (blade refusal). Follow-up RC drilling returned best intercepts of 10m @ 1.8g/t Au from
68m (incl. 7m @ 2.5g/t Au from 68m), 3m @ 5.1g/t Au from 67m, 10m @ 1.0g/t Au from 81m (incl. 1m
@ 3.9g/t Au from 81m), and 3m @ 1.5g/t Au from 55m (Figures 8 & 9)5. Gold mineralisation is
associated with quartz veined, strongly silica-biotite-pyrite altered basalt within a broader zone of
strong carbonate alteration. The drilling confirmed two sub-parallel zones of gold mineralisation still
open down dip and along strike to the north and south. Previous drilling along strike is limited to
shallow, wide spaced, vertical AC holes that are not adequate to identify the plunging high-grade gold
shoots that are common in the Aldiss area. Further drilling targeting potential high-grade shoots at
depth is being planned.
5 Refer to Alchemy Resources Limited’s ASX announcement Drilling Results, Karonie Gold Project, Eastern Goldfields, WA” dated 15 July
2020. CP: L. Ryan
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REVIEW OF ACTIVITIES
Figure 8: Taupo Prospect: Significant intercepts over interpreted geology (Alchemy intercepts in yellow text boxes)
Figure 9: Taupo Prospect cross section (Alchemy intercepts in yellow text boxes)
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REVIEW OF ACTIVITIES
The commencement of RAB drilling along the Claypan Shear Zone at Manhattan, Dragon, and Churchill
prospects was delayed due to the restrictions and market uncertainty imposed by the COVID-19
pandemic. The RAB drilling is designed to test folded and/or converging dolerite units interpreted from
detailed aeromagnetic imagery. Drilling is now expected to commence early in 2021.
During the year 250 soil samples and 12 rock chip samples were collected over areas of outcrop and
subcrop within the Roe Hills tenements and at the Calista Prospect to the northwest and northeast of
Karonie respectively. No significant results were received.
LAKE REBECCA PROJECT (WA) (Alchemy 100%)
The Lake Rebecca Project includes 11 new exploration licence applications covering 494km2 of Archean
greenstones in the Eastern Goldfields of Western Australia. The Project is located 100km east of
Kalgoorlie in a highly prospective geological setting, covering greenstones, numerous internal granites
and known gold bearing structures (Figure 10). It is located just 10km southeast of Saracen Mineral
Holdings’ (ASX: SAR) Carosue Dam deposit which hosts resources of 5.4Moz @ 2.0g/t Au 6, and 6km
west of Apollo Consolidated Limited’s (ASX: AOP) Rebecca, Duchess and Duke deposits which contain
a combined resource of 1Moz @ 1.2g/t Au 7.
Figure 10: Lake Rebecca Project tenements, major deposits, prospects and interpreted major structures over published
geology
Native Title Heritage Agreement negotiations and exploration data compilations are underway. The
licences are expected to be granted mid-2021.
6 Refer to Saracen Mineral Holdings Limited ASX announcement dated 1 August 2019
7 Refer to Apollo Consolidated Limited ASX announcement dated 10 February 2020
ANNUAL REPORT 30 JUNE 2020
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REVIEW OF ACTIVITIES
LACHLAN/COBAR BASIN PROJECTS (NSW) (ALCHEMY 51% - EARNING UP TO 80%)
The Lachlan/Cobar Basin Projects consist of the Overflow and Yellow Mountain Gold-Base Metal
Projects, the Eurow Copper-Gold Project, the Girilambone Copper Project, and the West Lynn and
Woodsreef Nickel-Cobalt Projects, each containing multiple gold and/or base metal and/or nickel-
cobalt-alumina targets, including drill-ready targets at Overflow, Yellow Mountain, and West Lynn.
Alchemy has earned a 51% interest in the NSW licences, and subject to the Farm-In and Joint Venture
Agreement with Heron Resources can earn an additional 29% interest by spending a further $0.35M
before 30 May 2021.
The Projects represent a strategic exploration project acquisition for Alchemy, with a large (1,055km2)
land package in the underexplored central Lachlan province and Cobar Superbasin. The Projects are
proximal to high profile mining centres including Cobar, Hera/Nymagee, Mineral Hill, Tritton and Parkes
(Figure 11).
During the year exploration licence EL8267 (Overflow North) was renewed for a further three years.
Figure 11: Alchemy prospects and other mineral deposits over regional TMI aeromagnetic image
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REVIEW OF ACTIVITIES
Overflow Gold-Base Metal Project
The Overflow Project consists of three exploration licences covering 285km2 located over a 34km long
section of the Gilmore Suture ~20km east of the high-grade Hera/Nymagee deposits (Figure 11). The
licences are located on Ordovician-Devonian metasediments and volcanics which are highly prospective
for epithermal gold and Cobar-style gold and base-metal mineralisation.
The Project is centred on the historic Overflow mining centre, a past producer of gold, silver and lead,
which has been the focus of exploration in the area since mining ceased in 1942. Previous drilling at the
Overflow Mine has returned numerous high-grade gold-silver and base metal intercepts including 18m
@ 2.1g/t Au, 111g/t Ag, 1.1% Zn from 245m, and 3m @ 7.3g/t Au, 43g/t Ag, 4.6% Zn, 4.2% Pb, 0.3% Cu
from 286m from Alchemy’s first diamond drill hole (OFDD001) 8 (Figure 12). Mineralisation at Overflow
is shear hosted, shows a vertical polymetallic zonation, and displays chlorite-silica alteration typical of
Hera / Cobar-style mineralisation.
During the year Alchemy designed and completed field preparations for two diamond holes targeting
high-grade gold-silver-zinc-lead mineralisation down plunge to the south of the Overflow historic
workings (Figure 12). Freehold and Crown Land lot boundaries immediately west of the Overflow
workings were surveyed and the proposed diamond hole locations pegged by a licenced surveyor. The
drilling was delayed due to the restrictions imposed by the COVID-19 pandemic and is now expected
to commence Q3 2020.
Figure 12: Long section looking east showing historic workings, >15 GxM drill intercepts, pierce points coloured by GxM, 1g/t
Au grade shell outline and proposed diamond holes (left), and plan showing all drill traces, 1g/t Au grade shell and proposed
diamond holes over satellite image (right).
Field reconnaissance of four historic copper and gold workings was also conducted to the northeast of
the Hera mine. The workings had a limited strike extent, however additional soil and rock chip sampling
at all four areas is warranted.
8 Refer to Alchemy Resources ASX Announcement dated 29 March 2017
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REVIEW OF ACTIVITIES
Several other targets warranting further drilling within the Overflow Project include the BO2, Deeves
Shaft and Parkvale prospects which have returned elevated Cu-Pb-Zn values in both soil geochemistry
and historic drilling. Historic RC hole OFTRC005 designed to test a very strong IP chargeability anomaly
located 2km along strike to the south of the Overflow mine ended in weak mineralisation (12m @
0.42g/t Au to end of the hole) with visible chalcopyrite identified. This represents a priority target which
will also be drill tested in the next 12 months.
Yellow Mountain Gold-Base Metal Project
The Yellow Mountain Project consists of one 93km2 exploration licence located ~10km west of the
historic Mineral Hill deposits. The licence covers a 20km long section of the Gilmore Suture, a crustal
scale structure associated with several gold deposits in the district, including the Cowal gold mine
(current resources 8.6Moz9) owned by Evolution Mining Limited (ASX: EVN) (Figure 11). The Project is
located on Ordovician-Silurian granites, Ordovician metasediments, and Devonian volcanics which are
prospective for VMS, porphyry copper-gold and Cobar-style gold and base-metal mineralisation.
A recent review of the Yellow Mountain open file data identified two highly prospective exploration
targets (Yellow Mountain Mine and Melrose prospects), both structurally connected to the Gilmour
Suture.
Melrose Porphyry Cu-Au Target
Previous specialised analysis completed on magnetite and molybdenite samples from the 12km long
Melrose Magnetite Anomaly (MMA) (Figure 13), confirmed chemical signatures similar to porphyry
Cu-Au mineralisation. Al/Ti and V/Ti ratios within the Melrose magnetite samples are typical of lower
temperature hydrothermal magnetite, similar to those from porphyry Cu-Au systems elsewhere in
Australia and overseas including the Cadia-Ridgeway system, and are indicative of an oxidised
mineralising fluid with the potential to develop significant copper-gold mineralisation10.
The rhenium (Re) content of a molybdenite sample from within the MMA was very high (939 ppm
Re)11, which is also a characteristic of molybdenites analysed from numerous other porphyry Cu-Au
systems.
Rhenium–osmium (Re-Os) age dating completed on the Melrose magnetic anomaly molybdenite
sample returned a model age of 424.7 ± 1.5 Ma12 which is similar to igneous rocks associated with the
Mineral Hill mineralisation just 10km to the east, and similar to Pb model age on sulfides from the
Mineral Hill mine. This implies that the Melrose hydrothermal alteration was formed at a similar time
9 Refer to Evolution Mining Limited’s ASX announcement “Annual Mineral Resources and Ore Reserves Statement” dated 12 February 2020
10 Refer to Alchemy Resources Limited’s ASX announcement “Significant Copper-Gold Targets Identified at Yellow Mountain, NSW” dated 9
June 2020. CP: L. Ryan
11 Refer to Alchemy Resources Limited’s ASX announcement “Significant Copper-Gold Targets Identified at Yellow Mountain, NSW” dated 9
June 2020. CP: L. Ryan
12 Refer to Alchemy Resources Limited’s ASX announcement “Significant Copper-Gold Targets Identified at Yellow Mountain, NSW” dated 9
June 2020. CP: L. Ryan
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REVIEW OF ACTIVITIES
to the mineralisation at Mineral Hill where past production and current resources and reserves total
460,000oz Au, 36,000t Cu, 1.1Moz Ag, 16,000t Pb and 15,000t Zn13.
Previous drilling within the Melrose alteration zone has focussed on the Fountaindale prospect, a
prominent northeast plunging, 800m wide granodiorite intrusion (plug) modelled as a magnetic low
within the larger Melrose magnetic anomaly (Figures 13 & 14). Six diamond holes and five RC holes all
<190m deep, except for a 458m diamond hole completed in 1968, have been drilled into the
Fountaindale intrusive returning gold intercepts associated with quartz veined sericite altered
granodiorite including14:
o 2m @ 3.1g/t Au from 56m
o 2.5m @ 3.1g/t Au, 1.54% As from 70m
o
1m @ 5.5g/t Au from 150m
o
1m @ 4.5g/t Au from 44m
o 3.3m @ 3.1g/t Au from 73m
o
1m @ 5.0g/t Au from 135m
Figure 13: Melrose (left) and Cadia-Ridgeway (right) magnetic anomalies (same scale).
13 Refer to Alchemy Resources Limited’s ASX announcement “Significant Copper-Gold Targets Identified at Yellow Mountain, NSW” dated 9
June 2020. CP: L. Ryan
14 Refer to Golden Cross Resources Limited June Quarterly Report 2004 dated 30 July 2004, CP - D. Timms
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Figure 14: 3D model of the Melrose magnetite alteration anomaly (looking down to the NE) showing the Fountaindale
intrusive as a distinct hole in the alteration zone.
Alchemy considers the Fountaindale intrusive to be an apophysis off a related potentially mineralised
intrusive at depth, with this deeper intrusive the likely cause of the 12km long magnetite alteration
zone. The Fountaindale intrusive is surrounded by chlorite-epidote-albite-magnetite altered and
brecciated sediments and volcaniclastic rocks that form the Melrose magnetic high and probably
represent hydrothermal recrystallisation associated with buried oxidised I-type intrusions.
Historic data shows that the majority of the Melrose magnetic anomaly has not been covered by IP
surveys, and Alchemy intends to complete IP surveys over these areas to better define targets for drill
testing. Porphyry copper-gold and geochemistry experts are also being consulted to help define drill
targets within this large highly prospective alteration zone.
Yellow Mountain Mine
The open file data research also identified a poorly tested, strong chargeability high centred over the
depth extensions of the Yellow Mountain Mine gold-copper-silver-lead-zinc mineralisation (Figures 15
& 16).
The Yellow Mountain Mine prospect contains strong silica-sericite-pyrite alteration associated with
gold-copper-silver-lead-zinc mineralisation within fine grained clastic sediments and siltstones,
located stratigraphically beneath a highly resistive dacitic volcanic unit.
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Historic drilling at the Yellow Mountain Mine Prospect (Figure 15) returned broad zones of gold and
base metal mineralisation including15:
o 52m @ 0.54g/t Au, 0.31% Cu, 35g/t Ag, 1.15% Pb, 1.28% Zn from 14m (PYM011)
o 40m @ 0.49g/t Au, 0.34% Cu, 29g/t Ag, 1.18% Pb, 1.81% Zn from 64m (PYM012)
o 41m @ 0.35g/t Au, 0.23% Cu, 17g/t Ag, 0.85% Pb, 0.94% Zn from 10m (PYM013)
o 78m @ 0.32g/t Au, 25g/t Ag from 57.4m (YD02)
o 66m @ 0.31% Cu, 0.79% Pb, 1.69% Zn from 97.5m (YD02)
o 37m @ 0.28g/t Au, 21g/t Ag from 43.2m (YD05)
o 45m @ 0.24% Cu, 0.58% Pb, 1.07% Zn from 39.6m (YD05)
o
16.5m @ 1.08g/t Au, 0.48% Cu, 52g/t Ag, 2.04% Pb, 3.48% Zn from 198m (YD13)
o 24.4m @ 1.12% Cu, 1.19% Pb, 1.02% Zn from surface (YP05A) (no Au or Ag assays)
Drilling includes massive sulphide intercepts up to 2m thick (YD13), and gold and base metal
mineralisation is interpreted as an exhalative, stratabound VMS system with a structurally controlled
gold mineralisation overprint associated with quartz veins in high strain zones. 3D analysis of the historic
drilling results and the IP data suggest the chargeability high could represent a concentration of
sulphides related to a VMS feeder zone located down plunge of the shallow gold and base metal drill
intercepts (Figure 15).
One deep diamond hole has been designed to test the chargeability high, and one RC hole is planned
to test the down plunge component of the interpreted northeast-plunging gold and base metal
mineralisation (Figure 15 & 16). Drilling is due to commence as soon as possible, subject to Native Title
and statutory approvals.
15 Refer to Alchemy Resources Limited’s ASX announcement “Significant Copper-Gold Targets Identified at Yellow Mountain (NSW)” dated 9
June 2020. CP: L. Ryan
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REVIEW OF ACTIVITIES
Figure 15: Yellow Mountain Mine prospect IP chargeability plan (300m RL)
Figure 16: Yellow Mountain Mine IP chargeability cross section (6408200N) – same scale as Figure 15.
West Lynn Nickel-Cobalt-Alumina Project
EL8631 (West Lynn) is centred 17km northwest of Nyngan, NSW. The Project, which covers an area of
100km2, is contiguous with EL8318 (Girilambone) and forms part of the Alchemy/Heron NSW Farm-In
and Joint Venture Agreement. The licence is located within a belt of ultramafic/mafic rocks that cut
through central NSW, extending from the ACT to the Queensland border and host numerous Ni-Co
(+Sc+Al) deposits such as Sunrise/Syerston (Clean TeQ Holdings Limited – ASX: CLQ), Homeville (Alpha
HPA Limited – ASX: A4N), and the Nyngan Scandium deposit (Scandium International Mining Corp. –
TSX: SCY), just 11km southwest of West Lynn (Figure 17).
ANNUAL REPORT 30 JUNE 2020
Page 19 of 73
REVIEW OF ACTIVITIES
Figure 17: West Lynn Ni-Co Project, Ni-Co+Sc occurrences, and NSW Serpentinite Belts over state-wide
greyscale TMI aeromagnetic image
During the previous reporting period Alchemy announced maiden inferred resources of 21.3Mt @
0.84% Ni, 0.05% Co, 2.4% Al & 20.0% Fe 16 (0.6% Ni lower cut-off), and 6.6Mt @ 20.8% Al2O3 (18% Al2O3
lower cut-off) 17 (reported in accordance with the JORC Code - 2012 Edition) at the West Lynn and
Summervale prospects.
Subsequent to very encouraging initial nickel and cobalt metallurgical recoveries using the patented
DNi Process™ nitric acid leach, additional metallurgical testwork (DNi bench scale kinetic leaching) is
planned for the Summervale and West Lynn blended ore samples. Alchemy also intends to conduct
further metallurgical testwork, on the alumina ore including ore beneficiation and process optimisation,
in order to improve aluminium recoveries and confirm the potential for 99.99% alumina (4N HPA)
production.
Alchemy continues to see potential for significant expansion of the nickel-cobalt and alumina resources
by drilling untested sections of the 22km long West Lynn Serpentinite magnetic high. Additional
resource expansion and resource infill drilling has been planned.
16 Refer to Alchemy Resources Limited’s ASX Announcement dated 19 February 2019
17 Refer to Alchemy Resources Limited’s ASX Announcement dated 19 June 2019
ANNUAL REPORT 30 JUNE 2020
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REVIEW OF ACTIVITIES
Eurow Copper-Gold Project
The Eurow Copper-Gold Project (“Eurow”), located 30km southeast of Parkes (Figure 11), covers 167km2
of Ordovician and Devonian-aged meta-sediments intruded by Silurian and Devonian granites, and
proximal to the intersection of the Narromine-Coolac Fault Zone and the Lachlan Transverse Zone. The
Project area contains the historic Eurow-Vychan copper-gold workings where historic drilling returned
high-grade intercepts of 8m @ 2.94% Cu and 0.85g/t Au from 47m, 3m @ 4.0% Cu and 1.25g/t Au from
73m, and 4.4m @ 1.57% Cu and 0.63g/t Au from 212m below the old workings.
Copper-gold mineralisation at Eurow appears to be planar and stratiform with a distinct steep south
plunge, and is associated with semi-massive and breccia zones of pyrite-pyrrhotite-chalcopyrite.
Previous shallow aircore drilling across targets north and south of the historic copper workings was
hampered by thick clay zones and did not reach target depths; this area and the down plunge position
of mineralisation warrant further drill testing.
No ground work was completed by Alchemy during the year.
Girilambone Copper Project
Girilambone comprises one granted tenement covering 129km2, located about 20km east of Aeris
Resources Ltd’s (ASX: AIS) Tritton copper operation on the eastern edge of the Girilambone Basin
(Figure 11). Girilambone is prospective for ‘Besshi-type’ VMS copper-gold mineralisation within mafic
units of the Ordovician Girilambone Group, located along an interpreted VMS trend extending south
from the Girilambone Copper Mine. The Project area is adjacent to copper anomalism along structural
and magnetic trends from the historic Kurrajong copper workings where mineralisation dips east
beneath the Girilambone tenement. Recent drilling beneath the Kurrajong workings has returned high
grade copper and gold intercepts including 17m @ 2.6% Cu, 0.3g/t Au from 753m, 19m @ 2.2% Cu,
0.3g/t Au from 677m and 4.6m @ 5.1% Cu, 0.8g/t Au from 403m 18.
No ground work was completed by Alchemy during the year.
Woodsreef Ni-Co Project
Exploration Licence 8711 is located 35km north of Tamworth, NSW, and covers an area of 281km2 within
the New England Fold Belt. The licence encompasses a 34km long section of the Peel Fault, which is
recognised as a regional thrust system that hosts intrusive serpentinites and separates the Woolomin
Beds and Permian granites to the east from the Tamworth Belt to the west. The principal targets in the
region are vein hosted orogenic copper-gold deposits within silica-carbonate altered serpentinites
located on or adjacent to the Peel Fault, and cobalt, chromite, platinoid and nickel sulphide targets
associated with composite/layered ultramafic intrusives within the licence.
No ground work was completed by Alchemy during the year.
18 Refer to Aeris Resources Ltd ASX Announcements dated 12 June 2018 and 21 August 2018
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REVIEW OF ACTIVITIES
BRYAH BASIN PROJECT (WA) (10-20% ALCHEMY)
Alchemy’s base metal and gold prospective Bryah Basin Project comprises a 488km2 tenement package,
located 130km northeast of Meekatharra, Western Australia. The Project is located along strike and
south-west of Sandfire Resources NL’s (ASX: SFR) high-grade DeGrussa and Monty copper-gold
deposits, and adjacent to Peak Hill where about 1Moz of gold has been mined from several deposits
(Figure 18). Alchemy retains its interests in the Bryah Basin Project through farm-in and joint venture
agreements over the base metal prospective part of the project with Sandfire Resources and over the
gold prospective part of the project with Plutonic gold mine operator Billabong Gold, a wholly-owned
subsidiary of Superior Gold Inc. (TSX-V: SGI). Should an economic base metal or gold discovery be made
by Sandfire or Billabong, Alchemy retains the right to participate as a 20% partner with all costs repaid
from 50% of production profits, an equity position that could deliver significant value to Shareholders.
Alchemy also retains a 1% net smelter royalty over future production from 70,000oz to 90,000oz gold
from the Hermes gold deposit (Figure 18). Hermes has produced ~53,500oz since mining commenced
in 2017 19 and Superior Gold currently reports a Measured and Indicated Resource (inclusive of Reserves)
of 90,000oz gold (2.0Mt @ 1.4g/t Au), and an Inferred Resource of 160,000oz gold (3.9Mt @ 1.3g/t Au)
at Hermes 20.
Figure 18: Bryah Basin Project – Sandfire Resources JV and Billabong Gold JV areas and gold and base metal prospects
19 Refer to Superior Gold Inc. Interactive Analyst Centre (company website) accessed 26 August 2020
20 Refer to Superior Gold Inc. TSX-V Announcement dated 7 August 2020
ANNUAL REPORT 30 JUNE 2020
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REVIEW OF ACTIVITIES
Base Metals Exploration (Sandfire 70-80%)
Sandfire acquired Independence Group NL’s (ASX: IGO) Bryah Basin Project Farm-In Rights in August
2018, including whole and part tenements that cover the base metal prospective areas of Alchemy’s
Bryah Basin Project (red outlines in Figure 18)21. Subsequent to completing almost 130,000m of drilling
and spending over $6M on the Bryah Basin base metal tenements in 2019, Sandfire has earned an 80%
interest in Alchemy’s 100% owned tenements and a 70% interest in the tenements jointly owned by
Alchemy and Jackson Minerals Pty Ltd (a wholly owned subsidiary of Fe Ltd (ASX: FEL)). Alchemy remains
free-carried on further exploration to completion of a Pre-Feasibility Study, and then carried on an
interest-free deferred basis for a further $5M of Definitive Feasibility Study expenditure, with the
deferred amount to be repaid from 50% of Alchemy’s share of profits earned through production.
Alchemy intends to formally transfer the relevant interest in the Bryah Basin tenements to Sandfire in
due course and the parties are currently negotiating a comprehensive industry standard Joint Venture
Agreement based on the terms of the Farm-in Letter Agreement, with Sandfire to manage the Joint
Venture.
During the year Sandfire completed 542 first-pass AC holes (35,238m) drilled along strike to the
southwest of the DeGrussa copper-gold deposit, thereby completing 800m spaced drill line coverage
across a 40km strike of the Narracoota and Karalundi formations that host the DeGrussa VMS copper-
gold mineralisation (Figure 19).
Best results received from these AC holes and from 279 AC holes drilled in the previous reporting
period included 5m @ 2.0g/t Au from 65m* and 20m @ 0.11% Cu from 85m (Neptune East), 5m @
1.2g/t Au from 45m and 10m @ 0.27% Zn from 75m* (Moby), 5m @ 1.0g/t Au from 25m* (Churchill),
and 5m @ 1.1g/t Au from 45m* (Seaborg SE) (Figure 19)22. It is important to note that four of these
intercepts (*) have yet to be followed up with infill drilling. This includes coincident gold and copper
mineralisation on drill lines 800m apart within the Karalundi Formation at Moby and to the southeast
and southwest of Seaborg. Anomalous gold intercepts at Moby South, and to the east and west of
Neptune also require infill AC drilling. Anomalous gold in Sandfire AC identified along strike to the
southeast of Neptune has highlighted no gold analysis in previous IGO AC drilling. Pulps from this
program are available and have been recommended for re-submission for gold analysis.
Four deep RC holes (1,294m) were also drilled during the year as follow-up to earlier anomalous AC
drilling results, returning best results of 5m @ 0.7g/t Au from 125m, and 5m @ 0.7g/t Au from 175m
(Moby)23.
21 Refer to Alchemy Resources ASX Announcement dated 6 August 2018
22 Refer to Alchemy Resources Limited’s ASX announcement “Significant Intercepts returned from Bryah Basin Joint Venture” dated 30
January 2020. CP: L. Ryan
23 Refer to Alchemy Resources Limited’s ASX announcement “Significant Intercepts returned from Bryah Basin Joint Venture” dated 30
January 2020. CP: L. Ryan
ANNUAL REPORT 30 JUNE 2020
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REVIEW OF ACTIVITIES
Figure 19: Sandfire AC/RC and previous drilling (coloured by maximum downhole copper), recent Sandfire drilling
results (labelled in red), and JV tenement outlines over regional gravity image.
Downhole electromagnetic (DHEM) surveys were completed on seven of the 11 RC holes drilled to
date. A preliminary examination of the DHEM data has identified a variably conductive geological unit
to the south. Additional RC drilling is planned targeting coincident geochemical anomalism and DHEM
conductivity identified in the Central Range area east of Moby.
A detailed moving loop electromagnetic (MLEM) survey designed to further improve targeting of the
host VMS horizon was also completed during the year. Strongly conductive stratigraphic units are
present along both the southwest and northeast margins of the survey area. A very strong conductor
identified within the eastern part of the survey area is related to graphitic sediments, and further
interpretation is needed to determine if any weaker bedrock conductors are being masked by the
graphite. The EM data is being incorporated with gravity data previously collected and modelled in a
3D environment prior to planning additional infill AC drilling.
First pass AC drilling has been planned for the Fiddler, Bullgullan and Reefer tenements. The drilling
will be conducted at an 800m x 100m hole spacing, with ~1,400 AC drill holes designed to test for
copper-gold mineralisation within the Narracoota volcanics and the Ravelstone Formation sediments
to the east of the Horseshoe Lights copper mine (Figure 18). Drill rig access clearing for the proposed
aircore drilling within the Fiddler tenements has been completed with drilling to commence Q4 2020
or early 2021. Heritage clearances for the Bullgullan and Reefer aircore drilling programs were put on
hold due to Government COVID-19 restrictions, however the surveys are due to recommence in Q4
2020.
ANNUAL REPORT 30 JUNE 2020
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REVIEW OF ACTIVITIES
Gold Exploration (Billabong Gold 70-80%)
Exploration of Alchemy’s tenements that cover the gold prospective part of the Bryah Basin Project
(blue outline in Figure 18) continued under the farm-in and joint venture agreement with Superior Gold’s
subsidiary Billabong Gold. Billabong has now earned 70–80% of Alchemy’s interests in the gold
prospective tenements. Alchemy’s remaining interest is carried on an interest-free deferred basis to
production, with Alchemy to repay the deferred amount at the rate of 50% of its share of free cash flow
from production following commencement of mining.
The Billabong Gold JV contains a mineral resource of 2.2Mt @ 1.6g/t for 114,000oz Au reported in
accordance with the JORC guidelines (2012 Edition) at the Hermes South deposit24. Hermes South is
located approximately 20km south-southwest of the Hermes mining operation, and 65km southwest
of the Plutonic gold mine (Figure 18). The mineralisation remains open at depth and there is excellent
potential for further drilling to expand the area of gold mineralisation and add to the known resource.
A mineral reserve estimate for Hermes South was completed during the year in accordance with
Canadian NI 43-101 Standards of Disclosure for Mineral Projects25. Design and scheduling work for
Hermes South is continuing with mining expected to commence in the first half of 2021.
A Miscellaneous Licence application to accommodate the development of a haul road between the
existing Hermes Haul road and the Hermes South resource area was granted, and a Deed of Variation
with regard to the existing NWN Heritage Deed was signed enabling Heritage Surveys to be
conducted across the JV tenements, and providing for the negotiation of a Mining Agreement
covering the relevant JV tenements within the NWN determination area. A Heritage Protection Survey
of the Hermes South to Hermes proposed haul road commenced, and a preliminary assessment was
received, however due to COVID-19 restrictions the completion of the heritage survey was postponed
but will recommence as soon as Government restrictions are eased.
The drafting and negotiation of a Joint Venture Agreement based on the existing Farm-in Agreement
terms with the addition of Australian Mining Petroleum Law Association (AMPLA) model mining
Agreement terms is nearing completion.
Billabong completed drill site rehabilitation and received encouraging metallurgical sample results
from four HQ diamond holes drilled at the Hermes South resource area in the previous reporting
period. A metallurgical report is pending.
Billabong also collected 366 soil samples from the Papus, Flamel and Jones prospects, however no
significant results were received.
24 Refer to Alchemy Resources Limited’s ASX Announcement dated 8 May 2019 “Hermes South Resource Upgrade Bryah Basin, WA” CP: L.
Ryan, P. Blampain
25 Refer to https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00040606 accessed 26 August 2020
ANNUAL REPORT 30 JUNE 2020
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REVIEW OF ACTIVITIES
CORPORATE
Entitlement Issue
A pro-rata non-renounceable 1 for 4 Rights Issue of 110,104,870 ordinary fully paid shares at a price of
$0.012 per share was successfully completed in September 2019, raising $1,321,258 (before costs).
Junior Minerals Exploration Incentive
On 2 July 2019, the Company received a notification from the Australian Tax Office (“ATO”) that its
application to be a participant in the Federal Government's Junior Mineral Exploration Incentive (“JMEI”)
scheme for the tax year ending 30 June 2020 had been accepted and that it had been allocated up to
$330,000 of JMEI credits.
The JMEI scheme allows entities who are required to lodge a tax return in Australia and who apply for
and are issued Shares as part of the Company's capital raising activities between 1 July 2019 and 30 June
2020 (“JMEI Eligible Shareholders”) to receive JMEI credits from the ATO. JMEI credits entitle JMEI
Eligible Shareholders to refundable tax offsets (for individual shareholders or superannuation funds) or
franking credits (for companies). Eligible Shareholders who participated in the Company’s September
2019 pro-rata non-renounceable Rights Issue may be entitled to a JMEI credit.
Competent Person’s Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr Leigh Ryan, who is the
Managing Director of Alchemy Resources Limited and holds shares and options in the Company. Mr Ryan is a Member of the
Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and the types of deposits
under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint
Ore Reserves Committee ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (‘JORC Code
2012’). Mr Ryan consents to the inclusion in this report of the matters based on his information in the form and context in which it
appears.
The information in this report that relates to Mineral Resources at the West Lynn/Summervale Nickel-Cobalt and Summervale-
Alumina Deposit is based on information compiled by Stephen Godfrey, who is an employee of Resource Evaluation Services Pty Ltd,
a consultant to Alchemy Resources Limited. Mr Godfrey is a Fellow of the Australasian Institute of Mining and Metallurgy and a
member of the Australian Institute of Geoscientists, and has sufficient experience of relevance to the styles of mineralisation and the
types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012
Edition of the Joint Ore Reserves Committee ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’ (‘JORC Code 2012’). Mr Godfrey consents to the inclusion in this report of the matters based on his information in the form
and context in which it appears.
The information in this report that relates to Mineral Resources at the Hermes South Gold Deposit is based on information compiled
by Mr Stephen Hyland, a geological consultant working for Superior Gold Inc. Mr Hyland is a Fellow of The Australasian Institute of
Mining and Metallurgy, and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under
consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore
Reserves Committee ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (‘JORC Code 2012’).
Mr Hyland consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
The Company confirms that it is not aware of any new information or data that materially affects the information included in the
original market announcements and, in the case of estimates of Mineral Resources and Ore Reserves, that all material assumptions
and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not
materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have
not been materially modified from the original market announcements.
Forward Looking Statements
This report may include forward looking statements. Forward looking statements are only predictions and are subject to risks,
uncertainties and assumptions which are outside the control of Alchemy. Actual values, results or events may be materially different
to those expressed or implied in this report. Given these uncertainties, recipients are cautioned not to place reliance on forward looking
statements. Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any
continuing obligations under any applicable law and the ASX Listing Rules, Alchemy does not undertake any obligation to update or
revise any information or any of the forward looking statements in this presentation of any changes in events, conditions or
circumstances on which any such forward looking statement is based.
ANNUAL REPORT 30 JUNE 2020
Page 26 of 73
DIRECTORS’ REPORT
Your directors present their report on the consolidated entity consisting of Alchemy Resources Limited
(“the Company”) and its subsidiaries (“the Group” or “the Consolidated Entity”) at the end of the year
ended 30 June 2020.
DIRECTORS
The following persons were directors of Alchemy Resources Limited during the whole of the financial
year and up to the date of this report unless noted otherwise:
Lindsay Dudfield, Non-Executive Chairman
Leigh Ryan, Managing Director
Liza Carpene, Non-Executive Director
Anthony Ho, Non-Executive Director
PRINCIPAL ACTIVITIES
During the year, the principal activity of the Group was exploration for gold, base metals and cobalt.
During the year, there was no change in the nature of this activity.
FINANCIAL RESULTS
The consolidated loss of the Group after providing for income tax for the year ended 30 June 2020 was
$390,897 (2019: $10,282,167).
DIVIDENDS
No dividends have been paid or declared since the start of the financial year. No recommendation for
the payment of a dividend has been made by the Directors.
OPERATIONS AND FINANCIAL REVIEW
Information on the operations of the Group and its prospects is set out in the “Review of Activities”
section of this Annual Report.
FINANCIAL
Exploration and evaluation costs totalling $12,333 (2019: $9,899,844) were written off during the year in
accordance with the Group’s accounting policy.
As at 30 June 2020, the Group had net assets of $6,399,808 (2019: $5,466,803) including cash and cash
equivalents of $873,397 (2019: $533,886).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Group during the financial year were as follows:
A pro-rata non-renounceable 1 for 4 Rights Issue of 110,104,870 ordinary fully paid shares at a price of
$0.012 per share was successfully completed in September 2019, raising $1,321,258 (before costs).
ANNUAL REPORT 30 JUNE 2020
Page 27 of 73
DIRECTOR’S REPORT
During the year Sandfire Resources’ expenditure on the Bryah Basin Project exceeded $6M and a Joint
Venture between Alchemy and Sandfire was formed. Alchemy intends to formally transfer the relevant
interest in the Bryah Basin tenements to Sandfire in due course and the parties are currently negotiating
a comprehensive industry standard Joint Venture Agreement based on the terms of the Farm-in Letter
Agreement, with Sandfire to manage the Joint Venture.
There were no other significant changes in the state of affairs of the Group during the financial year.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
The Company completed a placement of 66,666,667 ordinary fully paid shares (“Placement Shares”) and
16,666,667 free attaching unlisted options (“Placement Options”) (“Placement”) in August 2020 raising
$1,000,000 (before costs). The Placement Shares were issued at $0.015 per Share along with a 1 for 4
free attaching Placement Option exercisable at $0.03 and expiring on 30 September 2022.
A pro-rata non-renounceable 1 for 10 Rights Issue of 55,052,435 ordinary fully paid shares at a price of
$0.015 per share with a 1 for 4 free attaching option exercisable at $0.03 and expiring on 30 September
2022 was successfully completed in September 2020, raising $825,787 (before costs).
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly
impacted the entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive
or negative, after the reporting date. The situation is rapidly developing and is dependent on measures
imposed by the Australian Government and other countries, such as maintaining social distancing
requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
There has not arisen in the interval between the end of the financial year and the date of this report any
other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors,
to affect significantly the operations, the results of those operations, or the state of affairs of the Group
in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Directors are not aware of any developments that might have a significant effect on the operations
of the Group in subsequent financial years not already disclosed in this report.
ENVIRONMENTAL REGULATION
The Group is subject to significant environmental regulation in respect of its exploration activities.
Tenements in Western Australia and New South Wales are granted subject to adherence to
environmental conditions with strict controls on clearing, including a prohibition on the use of
mechanised equipment or development without the approval of the relevant Government agencies,
and with rehabilitation required on completion of exploration activities. These regulations are controlled
by the Department of Mines, Industry Regulation and Safety (Western Australia) and the Department
of Planning, Industry and Environment (New South Wales).
Alchemy Resources Limited conducts its exploration activities in an environmentally sensitive manner
and the Group is not aware of any breach of statutory conditions or obligations.
ANNUAL REPORT 30 JUNE 2020
Page 28 of 73
DIRECTOR’S REPORT
Greenhouse gas and energy data reporting requirements
The Directors have considered compliance with the National Greenhouse and Energy Reporting Act
2007 which requires entities to report annual greenhouse gas emissions and energy use. The Directors
have assessed that there are no current reporting requirements for the year ended 30 June 2020,
however reporting requirements may change in the future.
INFORMATION ON DIRECTORS
The following information is current as at the date of this report.
L Dudfield, Non-Executive Chairman (appointed Director 25 November 2011, Chairman since 1 June 2017)
Experience and expertise
Mr Dudfield is a qualified geologist with over 40 years’ experience exploring for
gold and base metals in Australia and abroad, including close involvement with
a number of greenfields discoveries. He was a founding director of Jindalee
Resources, Alchemy’s third largest shareholder, and is currently an Executive
Director of Jindalee. Mr Dudfield is a member of the Australasian Institute of
Mining and Metallurgy, the Australian Institute of Geoscientists, the Geological
Society of Australia and the Society of Economic Geologists.
Other current directorships
Executive Director of Jindalee Resources Limited (director since 1996)
Non-Executive Director of Energy Metals Limited (director since 2004)
Former directorships in last 3 years None
Special responsibilities
Member of the Audit Committee
Interests in shares and options
Ordinary Shares – Alchemy Resources Limited
Unlisted Options – Alchemy Resources Limited
69,653,142
1,185,983
L Ryan, Managing Director (appointed 9 January 2017)
Experience and expertise
Mr Ryan is a qualified geologist with over 30 years of experience in the
exploration and resource industry, specifically focused on project evaluation,
exploration management and executive management roles throughout
Australia and Africa. He has been involved in the discovery and resource
definition of numerous gold and base metal deposits and has successfully
negotiated numerous exploration related corporate transactions.
Mr Ryan was previously the Managing Director of Chrysalis Resources Limited
and Boss Resources Limited, and prior to that was Resolute Mining Limited’s
Group Exploration Manager for Africa and Australia. He has worked extensively
in WA, Queensland, NSW, Zambia, Tanzania, Burkina Faso, Mali, and Cote
d’Ivoire. He is also a member of the Australian Institute of Geoscientists and has
recently completed a graduate certificate in Mineral Economics at the Curtin
School of Business, Western Australia.
Other current directorships
None
Former directorships in last 3 years Non-Executive Director of Peppermint Innovation Limited (formerly Chrysalis
Resources Limited) (September 2014 to July 2020)
Special responsibilities
Managing Director
Interests in shares and options
Ordinary Shares – Alchemy Resources Limited
Unlisted Options – Alchemy Resources Limited
1,375,000
16,031,250
ANNUAL REPORT 30 JUNE 2020
Page 29 of 73
DIRECTOR’S REPORT
L Carpene, Non-Executive Director (appointed 18 March 2015)
Experience and expertise
Ms Carpene has worked in the resources industry for more than 20 years and
has significant experience in acquisitions, corporate administration, HR, legal, IT
and stakeholder relations. Ms Carpene spent five years on the Executive Team
of Northern Star Resources Limited as Company Secretary and Head of
Environment and Social Responsibility ceasing in February 2018.
Prior to Northern Star, Ms Carpene was Company Secretary/CFO for listed
explorers Venturex Resources and Newland Resources, and previously held
various site and Perth based management roles with Great Central Mines,
Normandy Mining, Newmont Australia, Agincourt Resources and Oxiana.
Other current directorships
Non-Executive Director of Mincor Resources NL (appointed 16 April 2018)
Former directorships in last 3 years None
Special responsibilities
Member of the Audit Committee
Interests in shares and options
Ordinary Shares – Alchemy Resources Limited
Unlisted Options – Alchemy Resources Limited
1,100,000
25,000
A Ho, Non-Executive Director (appointed 25 November 2011)
Experience and expertise
Other current directorships
Mr Ho is a Chartered Accountant and a partner in a consulting firm focused
principally on corporate and financial services to listed companies. He has
significant experience in the resource industry, having served as director and
company secretary of companies listed on ASX.
Executive Director of Newfield Resources Limited (director since 2011)
Non-Executive Director of Australian Agricultural Projects Australia Limited
(director since 2003)
Non-Executive Director of Mustera Property Group Limited (director since 2014)
Former directorships in last 3 years None
Special responsibilities
Chair of the Audit Committee
Interests in shares and options
Ordinary Shares – Alchemy Resources Limited
Nil
COMPANY SECRETARY
Mr Bernard Crawford was appointed Company Secretary on 1 December 2010. Mr Crawford is a
Chartered Accountant with over 25 years’ experience in the resources industry in Australia and overseas.
He has held various positions in finance and management with NYSE, TSX and ASX listed companies.
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and of each Board committee held during
the year ended 30 June 2020, and the numbers of meetings attended by each Director were:
Director
L Dudfield
L Ryan
L Carpene
A Ho
Board of Directors
A
7
7
7
6
B
7
7
7
7
Audit Committee
A
B
2
*
2
1
2
*
2
2
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of the committee during the year
* = Not a member of the relevant committee
ANNUAL REPORT 30 JUNE 2020
Page 30 of 73
DIRECTOR’S REPORT
RETIREMENT, ELECTION AND CONTINUATION IN OFFICE OF DIRECTORS
Ms Carpene, being a Director retiring by rotation who, being eligible, will offer herself for re-election at
the Annual General Meeting.
REMUNERATION REPORT (AUDITED)
The Directors present the Alchemy Resources Limited 2020 remuneration report, outlining key aspects
of the Company’s remuneration policy and framework, and remuneration awarded this year.
The report contains the following sections:
a) Key management personnel covered in this report
b) Remuneration governance and the use of remuneration consultants
c) Executive remuneration policy and framework
d) Relationship between remuneration and the Group’s performance
e) Non-executive director remuneration policy
f) Voting and comments made at the Company’s 2019 Annual General Meeting
g) Details of remuneration
h) Service agreements
i) Details of share-based compensation and bonuses
j)
k) Loans to key management personnel
l) Other transactions with key management personnel
Equity instruments held by key management personnel
a) Key management personnel covered in this report
Non-executive and executive directors (see pages 29 to 30 for details about each director):
Name
L Dudfield
L Ryan
L Carpene
A Ho
Position
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
b) Remuneration governance and the use of remuneration consultants
The Company does not have a Remuneration Committee. Remuneration matters are handled by
the full Board of the Company. In this respect the Board is responsible for:
•
•
•
•
the over-arching executive remuneration framework;
the operation of the incentive plans which apply to executive directors and senior executives
(the executive team), including key performance indicators and performance hurdles;
remuneration levels of executives; and
non-executive director fees.
The objective of the Board is to ensure that remuneration policies and structures are fair and
competitive and aligned with the long-term interests of the Company.
ANNUAL REPORT 30 JUNE 2020
Page 31 of 73
DIRECTOR’S REPORT
In addition, all matters of remuneration are handled in accordance with the Corporations Act 2001
requirements, especially with regard to related party transactions. That is, none of the Directors
participate in any deliberations regarding their own remuneration or related issues.
Independent external advice is sought from remuneration consultants when required, however no
advice was sought during the year ended 30 June 2020.
c) Executive remuneration policy and framework
In determining executive remuneration, the Board aims to ensure that remuneration practices are:
•
•
•
•
competitive and reasonable, enabling the Company to attract and retain key talent;
aligned to the Company’s strategic and business objectives and the creation of shareholder
value;
transparent and easily understood; and
acceptable to shareholders.
All executives receive consulting fees or a salary, part of which may be taken as superannuation,
and from time to time, options. The Board reviews executive packages annually by reference to the
executive’s performance and comparable information from industry sectors and other listed
companies in similar industries.
All remuneration paid to specified executives is valued at the cost to the Group and expensed.
Options are valued using a Black-Scholes option pricing model.
d) Relationship between remuneration and the Group’s performance
Emoluments of Directors are set by reference to payments made by other companies of similar size
and industry, and by reference to the skills and experience of Directors. Fees paid to Non-Executive
Directors are not linked to the performance of the Group. This policy may change once the
exploration phase is complete and the Group is generating revenue. At present the existing
remuneration policy is not impacted by the Group’s performance including earnings and changes
in shareholder wealth (e.g. changes in share price).
The Board has not set short term performance indicators, such as movements in the Company’s
share price, for the determination of Non-Executive Director emoluments as the Board believes this
may encourage performance which is not in the long-term interests of the Company and its
shareholders. The Board has structured its remuneration arrangements in such a way it believes is
in the best interests of building shareholder wealth in the longer term. The Board believes
participation in the Company’s Incentive Option Scheme motivates key management and
executives with the long-term interests of shareholders.
e) Non-Executive Director remuneration policy
On appointment to the Board, all Non-Executive Directors enter into a service agreement with the
Company in the form of a letter of appointment. The letter summarises the Board policies and
terms, including remuneration relevant to the office of director.
The Board policy is to remunerate Non-Executive Directors at commercial market rates for
comparable companies for their time, commitment and responsibilities. Non-Executive Directors
receive a Board fee but do not receive fees for chairing or participating on Board committees.
Board members are allocated superannuation guarantee contributions as required by law, and do
ANNUAL REPORT 30 JUNE 2020
Page 32 of 73
DIRECTOR’S REPORT
not receive any other retirement benefits. From time to time, some individuals may choose to
sacrifice their salary or consulting fees to increase payments towards superannuation.
The maximum annual aggregate Non-Executive Directors’ fee pool limit is $250,000 and was
approved by shareholders at the Annual General Meeting held on 22 July 2008.
Fees for Non-Executive Directors are not linked to the performance of the Group. Non-Executive
Directors’ remuneration may also include an incentive portion consisting of options, subject to
approval by shareholders.
f) Voting and comments made at the Company’s 2019 Annual General Meeting
Alchemy Resources Limited received more than 97% of “yes” votes on its remuneration report for
the 2019 financial year. The Company did not receive any specific feedback at the Annual General
Meeting or throughout the year on its remuneration practices.
g) Details of remuneration
The following table shows details of the remuneration received by the Group’s key management
personnel for the current and previous financial year.
Short-term benefits
Post-
employment
benefits
Share-
based
payment
Salary and
fees
Cash
bonus
Non-
monetary
benefit
Super-
annuation
Options
Total
Performance
related
$
$
$
$
$
$
%
15,000
156,000
10,000
14,999
195,999
20,000
150,000
-
19,998
189,998
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,000
14,820
30,148
200,968
-
-
-
-
10,000
14,999
14,820
30,148
240,967
-
-
20,000
15,200
11,295
176,495
-
-
-
-
-
19,998
15,200
11,295
216,493
-
15.0
-
-
-
6.4
-
-
Name
2020
Directors *
L Dudfield
L Ryan
L Carpene
A Ho
Totals
2019
Directors
L Dudfield
L Ryan
L Carpene
A Ho
Totals
* As announced to the ASX in April 2020, and in response to the uncertainty surrounding the impact of COVID-19, the Company
implemented various health and safety measures and cost saving initiatives. One cost saving initiative being a 20% cut in salaries
and the suspension of non-executive Directors fees from 1 April 2020. Salaries and non-executive Directors fees were restored
with effective 1 July 2020
ANNUAL REPORT 30 JUNE 2020
Page 33 of 73
DIRECTOR’S REPORT
h) Service agreements
On appointment to the Board, all Non-Executive Directors enter into a service agreement with the
Company in the form of a letter of appointment. The letter summarises the Board policies and
terms of appointment, including remuneration relevant to the office of Director. Remuneration and
other terms of employment for other members of key management personnel are formalised in
service agreements as summarised below.
L Ryan, Managing Director
Mr Ryan is remunerated pursuant to an ongoing Executive Service Agreement under which he is
paid a base salary of $180,000 plus superannuation. The Executive Service Agreement has no fixed
term and either party can terminate the Agreement (without cause) with three months’ notice.
i) Details of share-based compensation and bonuses
Options
Options over ordinary shares in Alchemy Resources Limited are granted under the Incentive Option
Scheme (“Scheme”). Participation in the Scheme and any vesting criteria are at the Board’s
discretion and no individual has a contractual right to participate in the Scheme or to receive any
guaranteed benefits. Any options issued to Directors of the Company are subject to shareholder
approval.
The terms and conditions of each grant of options affecting remuneration in the current or future
reporting periods are set out below.
Option
series
14
16
17
Grant date
9 Jan 2017
11 Dec 2019
7 Feb 2020
Vesting and
exercise date
Expiry date
Exercise
price
Value per option
at grant date
% Vested
8 Jan 2020
11 Dec 2019
7 Feb 2020
8 Jan 2021
31 Dec 2023
31 Dec 2023
$0.12
$0.025
$0.025
$0.0042
$0.0070
$0.0070
100%
100%
100%
The fair value of options at grant date are independently determined using a Black-Scholes option
pricing model that takes into account the exercise price, the term of the option, the share price at
grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk-free interest rate for the term of the option.
Further information on the fair value of share options and assumptions is set out in note 22 to the
financial statements.
j) Equity instruments held by key management personnel
The following tables detail the number of fully paid ordinary shares and options over ordinary
shares in the Company that were held during the financial year by key management personnel of
the Group, including their close family members and entities related to them.
ANNUAL REPORT 30 JUNE 2020
Page 34 of 73
DIRECTOR’S REPORT
Options
2020
Director
L Ryan
Opening
balance
(1 July)
Granted as
remuneration
Options
exercised
Net
change
other
Balance at
30 June
Vested but
not
exercisable
Vested and
exercisable
Unvested
12,000,000
4,000,000
12,000,000
4,000,000
-
-
-
-
16,000,000
16,000,000
-
-
16,000,000
16,000,000
-
-
During the year, no ordinary shares in the Company were provided as a result of the exercise of
remuneration options.
Shareholdings
2020
Directors
L Dudfield
L Carpene
L Ryan
Opening balance
(1 July)
Granted as
remuneration
Options
exercised
Net change
other
Balance at
30 June
55,422,510
-
1,000,000
56,422,510
-
-
-
-
-
-
-
-
9,486,690
1,000,000
250,000
10,736,690
64,909,200
1,000,000
1,250,000
67,159,200
k) Loans to key management personnel
There were no loans to individuals or members of key management personnel during the financial
year or the previous financial year.
l) Other transactions with key management personnel
The wife of Mr Ryan, the Managing Director, provided geological drafting and database services
to the Company to the value of $7,485 (2019: $4,350). The services were provided on normal
commercial terms and conditions.
There were no other transactions with key management personnel during the financial year or the
previous financial year.
END OF REMUNERATION REPORT (AUDITED)
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options granted
9 January 2017
9 January 2017
9 January 2017
16 April 2018
11 December 2019
7 February 2020
Expiry date
8 January 2021
8 January 2021
8 January 2021
15 April 2021
31 December 2023
31 December 2023
Exercise price
$0.04
$0.08
$0.12
$0.05
$0.025
$0.025
Number under option
4,000,000
4,000,000
4,000,000
10,000,000
1,000,000
4,000,000
27,000,000
No option holder has any right under the options to participate in any other share issue of the Company
or any other entity.
ANNUAL REPORT 30 JUNE 2020
Page 35 of 73
DIRECTOR’S REPORT
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were no shares issued on the exercise of options during the year and up to the date of this report.
CORPORATE GOVERNANCE STATEMENT
The Company’s 2020 Corporate Governance Statement has been released as a separate document and
is located on the Company’s website at http://alchemyresources.com.au/corporate-governance.
PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a
party, for the purpose of taking responsibility on behalf of the Company for all or part of those
proceedings.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company paid a premium to insure the Directors and Officers of the
consolidated entity against any liability incurred as a Director or Officer to the extent permitted by the
Corporations Act 2001. The contract of insurance prohibits the disclosure of the nature of the liabilities
covered or the amount of the premium paid.
The Group has not entered into any agreement with its current auditors indemnifying them against
claims by a third party arising from their position as auditor.
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 the Group are important.
Details of the amounts paid or payable to the auditor (BDO Audit (WA) Pty Ltd) for audit and non-audit
services provided during the year are set out in note 17. During the year ended 30 June 2020 no fees
were paid or were payable for non-audit services provided by the auditor of the consolidated entity
(2019: $Nil).
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations
Act 2001 is set out on the following page.
Signed in accordance with a resolution of the Directors
Lindsay Dudfield
Chairman
Perth, 23 September 2020
ANNUAL REPORT 30 JUNE 2020
Page 36 of 73
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF ALCHEMY RESOURCES LIMITED
As lead auditor of Alchemy Resources Limited for the year ended 30 June 2020, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Alchemy Resources Limited and the entities it controlled during the
period.
Glyn O'Brien
Director
BDO Audit (WA) Pty Ltd
Perth, 23 September 2020
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent a firms. Liability limited by a scheme approved under Professional Standards Legislation.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED
2020
$
2019
$
Notes
3
3
3
9
5
Continuing operations
Other income
Corporate expense
Employee expense
Administration expense
Exploration expenditure written off
Loss from continuing operations before income tax
Income tax benefit
Loss after income tax for the year attributable to the
owners of Alchemy Resources Limited
Other comprehensive income
Other comprehensive income for the year (net of tax)
Total comprehensive loss for the year attributable to the
owners of Alchemy Resources Limited
67,885
14,204
(166,681)
(176,202)
(103,666)
(12,233)
(148,479)
(151,922)
(96,126)
(9,899,844)
(390,897)
(10,282,167)
-
-
(390,897)
(10,282,167)
-
-
-
-
(390,897)
(10,282,167)
Cents
per share
Cents
per share
Loss per share attributable to the owners of Alchemy
Resources Limited
Basic loss per share
Diluted loss per share
16
16
0.07
N/A
2.36
N/A
This Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
ANNUAL REPORT 30 JUNE 2020
Page 38 of 73
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current Assets
Non-Current Assets
Exploration and evaluation
Property, plant and equipment
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Notes
CONSOLIDATED
2020
$
2019
$
6
7
8
9
11
12
13
14
15
873,397
54,637
12,088
940,122
5,687,452
3,521
5,690,973
533,886
13,524
6,241
553,651
5,105,234
2,592
5,107,826
6,631,095
5,661,477
205,082
26,205
231,287
231,287
158,675
35,999
194,674
194,674
6,399,808
5,466,803
33,690,859
171,600
32,404,105
134,452
(27,462,651)
(27,071,754)
6,399,808
5,466,803
This Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
ANNUAL REPORT 30 JUNE 2020
Page 39 of 73
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
ATTRIBUTABLE TO EQUITY HOLDERS OF THE ENTITY
Issued
capital
$
Option
reserves
Accumulated
losses
$
$
Total
equity
$
31,104,072
182,417
(16,848,847) 14,437,642
-
-
-
-
-
-
(10,282,167)
(10,282,167)
-
-
(10,282,167)
(10,282,167)
1,321,258
(21,225)
-
-
11,295
(59,260)
-
59,260
1,321,258
(21,225)
11,295
-
32,404,105
134,452
(27,071,754)
5,466,803
32,404,105
134,452
(27,071,754)
5,466,803
-
-
-
-
-
-
(390,897)
(390,897)
-
-
(390,897)
(390,897)
At 1 July 2018
Loss for the year
Other comprehensive income
Total comprehensive loss for the year, net of
tax
Transactions with owners in their capacity as
owners
Issue of shares
Share issue costs
Fair value of options issued
Expiry of options
At 30 June 2019
At 1 July 2019
Loss for the year
Other comprehensive income
Total comprehensive loss for the year, net of
tax
Transactions with owners in their capacity as
owners
Issue of shares
Share issue costs
1,321,258
(34,504)
Fair value of options issued
-
37,148
-
1,321,258
(34,504)
37,148
At 30 June 2020
33,690,859
171,600
(27,462,651)
6,399,808
This Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
ANNUAL REPORT 30 JUNE 2020
Page 40 of 73
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Government grant received
Notes
CONSOLIDATED
2020
$
(432,856)
9,907
23,855
2019
$
(391,564)
14,204
-
NET CASH FLOWS USED IN OPERATING ACTIVITIES
23
(399,094)
(377,360)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Payments for exploration assets
(2,307)
(545,842)
-
(1,131,641)
NET CASH FLOWS USED IN INVESTING ACTIVITIES
(548,149)
(1,131,641)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Share issue costs
1,321,258
(34,504)
1,321,258
(21,225)
NET CASH FLOWS FROM FINANCING ACTIVITIES
1,286,754
1,300,033
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
6
339,511
533,886
873,397
(208,968)
742,854
533,886
This Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
ANNUAL REPORT 30 JUNE 2020
Page 41 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: CORPORATE INFORMATION
The consolidated financial report of Alchemy Resources Limited for the year ended 30 June 2020 was
authorised for issue in accordance with a resolution of the directors on 23 September 2020.
Alchemy Resources Limited is a for-profit company incorporated in Australia and limited by shares
which are publicly quoted on the Australian Securities Exchange. The nature of the operation and
principal activities of the consolidated entity are described in the attached Directors’ Report.
The principal accounting policies adopted in the preparation of these consolidated financial statements
are set out below and have been applied consistently to all periods presented in the consolidated
financial statements and by all entities in the consolidated entity.
NOTE 2: STATEMENT OF COMPLIANCE
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards
Board, Urgent Issues Group Interpretations and the Corporations Act 2001.
Compliance with IFRS
The consolidated financial statements of Alchemy Resources Limited also comply with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
New and amended accounting standards and interpretations adopted by the Group
The following standard and interpretation relevant to the operations of the Group and effective from
1 July 2019 have been adopted. The adoption of this standard and interpretation did not have any
impact on the current period or any prior period but may impact future periods.
• AASB 16 Leases; and
• AASB Interpretation 23 Uncertainty over Income Tax Treatments.
Impact of adoption of AASB 16: Leases (“AASB 16”)
AASB 16 Leases requires lessees to account for all leases under a single on-balance sheet model. The
standard includes two recognition exemptions for lessees namely leases of ’low-value’ assets and short-
term leases (i.e. leases with a lease term of 12 months or less). At the commencement date of a lease, a
lessee will recognise a liability to make lease payments (i.e. the lease liability) and an asset representing
the right to use the underlying asset during the lease term (i.e. the right-of-use asset).
Lessees will separately recognise the interest expense on the lease liability and the depreciation expense
on the right-of-use asset.
The Group has adopted AASB 16 Leases however its current leases fall within either the ’low-value’ or
‘short-term’ recognition exemptions. The adoption of this standard has had no impact on the current
or previous reporting period and as such there have been no adjustments to the opening balance of
retained earnings.
ANNUAL REPORT 30 JUNE 2020
Page 42 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AASB Interpretation 23 Uncertainty over Income Tax Treatments
This Interpretation clarifies the application of the recognition and measurement criteria in AASB 112
Income Taxes when there is uncertainty over income tax treatments. The Interpretation addresses (a)
whether an entity considers uncertain tax treatments separately; (b) the assumptions an entity makes
about the examination of tax treatments by taxation authorities; (c) how an entity determines taxable
profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and (d) how an entity
considers changes in facts and circumstances.
The adoption of this Interpretation has had no impact on the current or previous reporting period and
as such there have been no adjustments to the opening balance of retained earnings.
New accounting standards and interpretations
The following new and amended accounting standards and interpretations relevant to the operations
of the Group have been published but are not mandatory for the current financial year. The Group has
decided against early adoption of these standards, and has not yet determined the potential impact on
the financial statements from the adoption of these standards and interpretations.
New or revised requirement
AASB 2018-6: Amendments to Australian Accounting Standards – Definition of a
Business
The Standard amends the definition of a business in AASB 3 Business Combinations. The
amendments clarify the minimum requirements for a business, remove the assessment
of whether market participants are capable of replacing missing elements, add guidance
to help entities assess whether an acquired process is substantive, narrow the definitions
of a business and of outputs, and introduce an optional fair value concentration test.
Application
date of
standard
Application
date for
Group
1 Jan 2020
1 Jul 2020
AASB 1018-7: Amendments to Australian Accounting Standards – Definition of
Material
1 Jan 2020
1 Jul 2020
This Standard amends AASB 101 Presentation of Financial Statements and AAS 108
Accounting Policies, Changes in Accounting Estimates and Errors to align the definition
of ‘material’ across the standards and to clarify certain aspects of the definition. The
amendments clarify that materiality will depend on the nature or magnitude of
information. An entity will need to assess whether the information, either individually or
in combination with other information, is material in the context of the financial
statements. A misstatement of information is material if it could reasonably be expected
to influence decisions made by the primary users.
a) Basis of measurement
Historical Cost Convention
These consolidated financial statements have been prepared under the historical cost convention,
except where stated.
ANNUAL REPORT 30 JUNE 2020
Page 43 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Critical Accounting Estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Group’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial statements, are disclosed where
appropriate.
b) Going Concern
These consolidated financial statements have been prepared on the going concern basis, which
contemplates continuity of normal business activities and the realisation of assets and the
settlement of liabilities in the ordinary course of business.
The Company completed a placement of 66,666,667 ordinary fully paid shares (“Placement Shares”)
and 16,666,667 free attaching unlisted options (“Placement Options”) (“Placement”) in August 2020
raising $1,000,000 (before costs). The Placement Shares were issued at $0.015 per Share along with
a 1 for 4 free attaching Placement Option exercisable at $0.03 and expiring on 30 September 2022.
A pro-rata non-renounceable 1 for 10 Rights Issue of 55,052,435 ordinary fully paid shares at a price
of $0.015 per share with a 1 for 4 free attaching option exercisable at $0.03 and expiring on 30
September 2022 was successfully completed in September 2020, raising $825,787 (before costs).
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly
impacted the entity up to 30 June 2020, it is not practicable to estimate the potential impact,
positive or negative, after the reporting date. The situation is rapidly developing and is dependent
on measures imposed by the Australian Government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may
be provided.
c) Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the
Company as at 30 June 2020 and the results of all subsidiaries for the year then ended. The
Company and its subsidiaries together are referred to in this financial report as the Group or the
consolidated entity.
Subsidiaries are all entities (including structured entities) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from its
investment with the entity and has the ability to affect those returns through its power to direct the
activities of the entity.
The acquisition method of accounting is used to account for business combinations by the Group.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides
ANNUAL REPORT 30 JUNE 2020
Page 44 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
consolidated Statement of Profit or Loss and Other Comprehensive Income, consolidated
statement of financial position and the consolidated statement of changes in equity respectively.
d) Critical accounting judgements and key sources of estimation uncertainty
The application of accounting policies requires the use of judgments, estimates and assumptions
about carrying values of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are
recognised in the period in which the estimate is revised if it affects only that period, or in the
period of the revision and future periods if the revision affects both current and future periods.
e) Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is the Group’s
functional and presentation currency.
f) Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to
the Group as lessee are classified as operating leases. Payments made under operating leases (net
of any incentives received from the lessor) are charged to profit or loss as incurred over the period
of the lease.
Leases in which a significant portion of the risks and rewards of ownership are transferred to the
Group as lessee are classified as finance leases. At the commencement date of a lease, the Group
recognises a liability to make lease payments (i.e. the lease liability) and an asset representing the
right to use the underlying asset during the lease term (i.e. the right-of-use asset). The Group
separately recognises the interest expense on the lease liability and the depreciation expense on
the right-of-use asset.
ANNUAL REPORT 30 JUNE 2020
Page 45 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3: REVENUE AND EXPENSES
Other income
Interest
Government grant
Other
Total other income
Expenses
Employee expense
Employee benefit and director compensation expense
Expense of share-based payments (note 22)
Other employee expenses
Total employee expense
Administration expense
Depreciation
Occupancy
Other administration expenses
Total administration expense
CONSOLIDATED
2020
$
2019
$
10,089
55,848
1,948
67,885
135,917
37,148
3,137
176,202
1,378
21,818
80,470
103,666
14,204
-
-
14,204
134,611
11,295
6,016
151,922
904
21,819
73,403
96,126
Revenue is recognised at an amount that reflects the consideration to which the Group expects to be
entitled to in exchange for transferring services to a customer. Revenue and expenses are recognised
on an accruals basis.
Interest income is recognised on a time proportion basis using the effective interest method.
ANNUAL REPORT 30 JUNE 2020
Page 46 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4: SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Board of
Directors of Alchemy Resources Limited.
The Group operates in one geographical segment, being Australia and in one operating category, being
mineral exploration. Therefore, information reported to the chief operating decision maker (the Board
of Alchemy Resources Limited) for the purposes of resource allocation and performance assessment is
focused on mineral exploration within Australia.
NOTE 5: INCOME TAX
Major components of income tax expense are as follows:
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Current income tax
At the rate of 30% (2019: 30%)
Current income tax charge
Deferred income tax
Relating to origination and reversal of temporary differences
Utilisation of prior year tax losses
Income tax expense/(benefit) reported in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income
CONSOLIDATED
2020
$
2019
$
-
-
-
-
-
-
-
-
-
-
A reconciliation of income tax expense/(benefit) applicable to accounting profit/(loss) before income
tax at the statutory income tax rate to income tax expense/(benefit) at the Company’s effective income
tax is as follows:
ANNUAL REPORT 30 JUNE 2020
Page 47 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5: INCOME TAX (Continued)
CONSOLIDATED
2020
$
2019
$
Accounting loss from continuing operations before income tax
(390,897)
(10,282,167)
At the statutory income tax rate of 30% (2019: 30%)
(117,269)
(3,084,650)
Add:
- Non-assessable income
- Non-deductible expenses
- Capital raising costs
- Other deductible expenses
- Share-based payment
- Tax loss not brought to account as a deferred tax asset
Income tax expense/(benefit) reported in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income
(16,754)
1,478
(5,431)
(2,013)
11,144
128,845
-
63
(3,764)
(6,302)
3,389
3,019,264
-
-
The income tax expense or benefit for the period is the tax payable on the current period’s taxable
income based on the applicable income tax rate, adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulations are subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
ANNUAL REPORT 30 JUNE 2020
Page 48 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5: INCOME TAX (Continued)
Deferred income tax
Recognised on the Statement of Financial Position
Deferred income tax at the end of the reporting period relates to the
following:
Deferred income tax liabilities
- Capitalised expenditure deductible for tax purposes
- Trade and other receivables
Deferred income tax assets
- Trade and other payables
- Employee benefits
- Capitalised expenditure non-deductible for tax purposes
- Tax losses available to offset DTL
Net deferred tax asset/(liability)
Tax consolidation
CONSOLIDATED
2020
$
2019
$
1,614,210
3,681
1,439,544
1,872
1,617,891
1,441,416
(7,569)
(7,809)
(13,830)
(1,588,683)
-
(6,601)
(10,800)
(12,344)
(1,411,671)
-
The Company and its 100% owned controlled entities have formed a tax consolidated group. The head
entity of the tax consolidated group is Alchemy Resources Limited.
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.
At 30 June 2020, Alchemy Resources Limited had $31,746,581 (2019: $30,714,317) of tax losses that are
available indefinitely for offset against future taxable profits subject to satisfaction of the loss tests. No
deferred tax asset has been recognised in the Consolidated Statement of Financial Position in respect
of the amount of either these losses or other deferred tax expenses. Should the Company not satisfy
the Continuity of Ownership Test, the Company will be able to utilise the losses to the extent that it
satisfies the Same Business Test.
ANNUAL REPORT 30 JUNE 2020
Page 49 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Deposits at call
CONSOLIDATED
2020
$
2019
$
256,897
616,500
873,397
517,386
16,500
533,886
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 six months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
The weighted average interest rate for the year was 0.85% (2019: 0.92%).
The Group’s exposure to interest rate risk is set out in note 21. The maximum exposure to credit risk at
the end of the reporting period is the carrying amount of each class of cash and cash equivalents
mentioned above.
NOTE 7: TRADE AND OTHER RECEIVABLES
Current
GST receivable
Other
CONSOLIDATED
2020
$
2019
$
16,327
38,310
54,637
13,524
-
13,524
Trade receivables are normally due for settlement within 30 days. They are presented as current assets
unless collection is not expected for more than 12 months after the reporting date.
Trade and other receivables are recognised at amortised cost using the effective interest rate method,
less any allowance for expected credit losses.
The Group assesses at each balance date whether there is objective evidence that a financial asset or
group of financial assets is impaired. For trade and other receivables, the Group applies the simplified
approach permitted by AASB 9 to determine any allowances for expected credit losses, which requires
expected lifetime losses to be recognised from initial recognition of the receivables. The expected credit
losses on these financial assets are estimated using a provision matrix based on the Group’s historical
credit loss experience. The amounts held in trade and other receivables do not contain impaired assets
and are not past due. Based on the credit history of these trade and other receivables, it is expected
that the amounts will be received when due.
The Group’s financial risk management objectives and policies are set out in Note 21.
Due to the short-term nature of these receivables their carrying value is assumed to approximate their
fair value.
ANNUAL REPORT 30 JUNE 2020
Page 50 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8: OTHER CURRENT ASSETS
Prepayments
NOTE 9: EXPLORATION AND EVALUATION
Opening balance
Exploration expenditure incurred during the year
Exploration expenditure written off
Closing balance
CONSOLIDATED
2020
$
12,088
12,088
2019
$
6,241
6,241
CONSOLIDATED
2020
$
2019
$
5,105,234
594,451
(12,233)
5,687,452
13,824,978
1,180,100
(9,899,844)
5,105,234
During the 2019 year, the Directors reviewed the carrying value of the Group’s Bryah Basin Project and
wrote down the carrying value of this Project by $9.9 million.
Exploration and evaluation expenditure, including the costs of acquiring licences and permits, are
capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the
Group has obtained the legal rights to explore an area are recognised in the Statement of Profit or Loss
and Other Comprehensive Income.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current
and either:
i) the expenditures are expected to be recouped through successful development and exploitation or
from sale of the area of interest; or
ii) 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 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 minerals 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 mineral 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.
ANNUAL REPORT 30 JUNE 2020
Page 51 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9: EXPLORATION AND EVALUATION (Continued)
Significant estimate and judgement
There is some subjectivity involved in the carry forward of capitalised exploration and evaluation
expenditure or, where appropriate, the write off to the Statement of Profit or Loss and Other
Comprehensive Income, however management give due consideration to areas of interest on a regular
basis and are confident that decisions to either write off or carry forward such expenditure fairly reflect
the prevailing situation.
NOTE 10: SUBSIDIARIES
Details of the Company’s subsidiaries are as follows:
Subsidiary
Principal
activity
Country of
incorporation
Alchemy Resources (Murchison) Pty Ltd
Alchemy Resources (Three Rivers) Pty Ltd
Goldtribe Corporation Pty Ltd
Alchemy Resources (NSW) Pty Ltd
Exploration
Exploration
Exploration
Exploration
Australia
Australia
Australia
Australia
Proportion of ownership
2020
100%
100%
100%
100%
2019
100%
100%
100%
100%
NOTE 11: TRADE AND OTHER PAYABLES
Trade creditors and accruals
NOTE 12: PROVISIONS
Current
Employee benefits
Short–term obligations
CONSOLIDATED
2020
$
2019
$
205,082
158,675
CONSOLIDATED
2020
$
2019
$
26,205
35,999
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be
settled within 12 months, are recognised in respect of employees’ services up to the end of the reporting
period and are measured at the amounts expected to be paid when the liabilities are settled. The liability
for annual leave is recognised in the provision for employee benefits. All other short-term employee
benefit obligations are presented as payables.
The obligations are presented as current liabilities in the Statement of Financial Position of the Group.
ANNUAL REPORT 30 JUNE 2020
Page 52 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13: CONTRIBUTED EQUITY
a) Share capital
CONSOLIDATED
2020
$
2019
$
Ordinary shares fully paid
33,690,859
32,404,105
b) Movements in ordinary shares on issue
Balance at 1 July 2018
CONSOLIDATED
Number
$
352,335,585
31,104,072
Non-renounceable issue to shareholders
88,083,896
1,321,258
Share issue costs
Balance at 30 June 2019
Non-renounceable issue to shareholders (1)
Share issue costs
Balance at 30 June 2020
-
(21,225)
440,419,481
32,404,105
110,104,870
-
1,321,258
(34,504)
550,524,351
33,690,859
(1) On 16 September 2019 the Company completed the issue of 110,104,870 new Shares pursuant to a pro-rata non-
renounceable entitlement and shortfall offer (“Issue”) to eligible shareholders of 1 new Share for every 4 existing Shares held
at an issue price of $0.012 per share.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds. 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 on shares held. Ordinary shares entitle their holder to one vote, either in person
or by proxy, at a meeting of the Company.
c) Movements in options on issue
Balance at beginning of the financial year
Options granted
Options expired
Balance at end of the financial year
CONSOLIDATED
2020
Number
2019
Number
22,000,000
5,000,000
-
29,500,000
-
(7,500,000)
27,000,000
22,000,000
ANNUAL REPORT 30 JUNE 2020
Page 53 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14: RESERVES
Options reserve
Opening balance
Option expense
Expiry of options
Balance at the end of the financial year
CONSOLIDATED
2020
$
2019
$
134,452
37,148
-
171,600
182,417
11,295
(59,260)
134,452
The options reserve is used to recognise the fair value of options issued to directors, employees and
contractors.
NOTE 15: ACCUMULATED LOSSES
Balance at the beginning of the financial year
Net loss attributable to members
Transfer from option reserve to accumulated losses
Balance at the end of the financial year
NOTE 16: LOSS PER SHARE
Basic loss per share
Diluted loss per share
CONSOLIDATED
2020
$
2019
$
(27,071,754)
(390,897)
-
(16,848,847)
(10,282,167)
59,260
(27,462,651)
(27,071,754)
CONSOLIDATED
2020
Cents
0.07
N/A
2019
Cents
2.36
N/A
The following reflects the income and share data used in the calculations of basic and diluted loss per
share:
CONSOLIDATED
2020
$
2019
$
Profits/(losses) used in calculating basic and diluted loss per share
(390,897)
(10,282,167)
Weighted average number of ordinary shares used in
calculating basic and diluted loss per share
CONSOLIDATED
2020
Number
2019
Number
527,059,379
434,868,989
ANNUAL REPORT 30 JUNE 2020
Page 54 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16: LOSS PER SHARE (Continued)
Basic loss per share
Basic loss per share is calculated by dividing the profit attributable to owners of the Group, excluding
any costs of servicing equity other than ordinary shares by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued
during the year.
Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares, and the weighted average number of additional ordinary shares that would
have been outstanding assuming the conversion of all dilutive potential ordinary shares.
NOTE 17: AUDITOR’S REMUNERATION
Audit services
BDO Audit (WA) Pty Ltd
- Audit and review of the financial reports
Total remuneration
NOTE 18: CONTINGENT ASSETS AND LIABILITIES
The Group had contingent assets at 30 June 2020 in respect of:
Future royalty payments
CONSOLIDATED
2020
$
2019
$
28,000
28,000
28,000
28,000
In March 2015, Alchemy completed a Sale and Purchase Agreement with Northern Star Resources
Limited (“Northern Star”) whereby the tenement containing the Hermes gold resource and adjacent
tenements were acquired by Northern Star (“Hermes Tenements”).
In October 2016, Northern Star completed the sale of its Plutonic gold operations, which included the
Hermes Tenements to Billabong Gold Pty Ltd.
Alchemy retains a 1% of Net Smelter Return Royalty payable on refined gold recovered from the Hermes
Tenements in excess of 70,000oz and up to 90,000oz.
There are no other material contingent assets or liabilities as at 30 June 2020.
ANNUAL REPORT 30 JUNE 2020
Page 55 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19: EVENTS OCCURRING AFTER THE REPORTING PERIOD
The Company completed a placement of 66,666,667 ordinary fully paid shares (“Placement Shares”) and
16,666,667 free attaching unlisted options (“Placement Options”) (“Placement”) in August 2020 raising
$1,000,000 (before costs). The Placement Shares were issued at $0.015 per Share along with a 1 for 4
free attaching Placement Option exercisable at $0.03 and expiring on 30 September 2022.
A pro-rata non-renounceable 1 for 10 Rights Issue of 55,052,435 ordinary fully paid shares at a price of
$0.015 per share with a 1 for 4 free attaching option exercisable at $0.03 and expiring on 30 September
2022 was successfully completed in September 2020, raising $825,787 (before costs).
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly
impacted the entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive
or negative, after the reporting date. The situation is rapidly developing and is dependent on measures
imposed by the Australian Government and other countries, such as maintaining social distancing
requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
There have been no other events subsequent to reporting date which are sufficiently material to warrant
disclosure.
NOTE 20: COMMITMENTS
In order to maintain an interest in the exploration tenements in which the Group is involved, the Group
is committed to meet the conditions under which the tenements were granted. The timing and amount
of exploration expenditure commitments and obligations of the Group are subject to the minimum
expenditure commitments required as per the Mining Act 1978, as amended, and may vary significantly
from the forecast based upon the results of the work performed which will determine the prospectivity
of the relevant area of interest. Currently, the minimum expenditure commitments for the granted
tenements are $957,000 (2019: $790,500) per annum.
Commitments in relation to the lease of office premises are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
CONSOLIDATED
2020
$
6,957
-
-
6,957
2019
$
6,957
-
-
6,957
ANNUAL REPORT 30 JUNE 2020
Page 56 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Financial Risk Management
Overview
The Group has exposure to the following risks from their use of financial instruments:
Interest rate risk
Credit risk
Liquidity risk
This note presents information about the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital. The Board of
Directors has overall responsibility for the establishment and oversight of the risk management
framework.
Risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s
activities.
The Audit Committee oversees how management monitors compliance with the Group’s risk
management policies and procedures and reviews the adequacy of the risk management framework in
relation to the risks faced by the Group. The Group’s principal financial instruments are tabled below.
Financial assets
Current
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Current
Trade and other payables
Interest rate risk
CONSOLIDATED
2020
$
2019
$
873,397
54,637
928,034
533,886
13,524
547,410
208,282
208,282
158,675
158,675
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the
instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from
fluctuations in interest bearing financial assets and liabilities that the Group uses.
Interest bearing assets comprise cash and cash equivalents which are considered to be short-term liquid
assets. It is the Group’s policy to settle trade payables within the credit terms allowed and therefore not
incur interest on overdue balances.
ANNUAL REPORT 30 JUNE 2020
Page 57 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
The following tables set out the carrying amount, by maturity, of the financial instruments that are
exposed to interest rate risk:
Floating
interest
rate
$
Fixed interest rate maturing in
Over 1 to 5
years
$
More than
5 years
$
1 year or
less
$
Consolidated 2020
Financial assets
Cash and cash equivalents
Trade and other receivables
Weighted average interest rate
Financial liabilities
Trade and other payables
Weighted average interest rate
Consolidated 2019
Financial assets
Cash and cash equivalents
Trade and other receivables
Weighted average interest rate
Financial liabilities
Trade and other payables
Weighted average interest rate
234,207
-
234,207
616,500
-
616,500
0.09%
1.34%
-
-
-
-
-
-
516,967
-
516,967
0.42%
16,500
-
16,500
2.55%
-
-
-
-
-
-
Sensitivity analysis for interest rate exposure
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Non-
interest
bearing
$
22,690
54,637
77,327
-
208,282
208,282
-
419
13,524
13,943
-
158,675
158,675
-
Total
$
873,397
54,637
928,034
-
208,282
208,282
-
533,886
13,524
547,410
-
158,675
158,675
-
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased)
equity and profit or loss by the amounts shown below:
Impact on profit/(loss) and equity
Increase of 100 basis points
Decrease of 100 basis points
2020
$
11,890
(11,890)
2019
$
15,418
(15,418)
ANNUAL REPORT 30 JUNE 2020
Page 58 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
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 the Group’s receivables from
customers and investment securities. The Group trades only with recognised, creditworthy third parties.
It is the Group policy that all customers who wish to trade on credit terms are subject to credit
verification procedures. In addition, receivable balances are monitored on an ongoing basis with the
result that the Group’s exposure to bad debts is not significant. The maximum exposure to credit risk is
the carrying value of the receivable, net of any provision for doubtful debts.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash and
cash equivalents, the Group’s exposure to credit risk arises from default of the counter party, with a
maximum exposure equal to the carrying amount of these instruments. This risk is minimised by
reviewing term deposit accounts from time to time with approved banks of a sufficient credit rating
which is -AA and above.
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 is tabled below:
Cash and cash equivalents
Liquidity risk
CONSOLIDATED
2020
$
2019
$
873,397
873,397
533,886
533,886
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.
ANNUAL REPORT 30 JUNE 2020
Page 59 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
The Group’s objective is to maintain a balance between continuity of funding and flexibility. The
following are the contractual maturities of financial liabilities:
Consolidated - 2020
Trade and other payables
Consolidated – 2019
Trade and other payables
Capital risk management
Less than 6
months
$
Contractual
cash flows
$
Carrying amount
$
208,282
208,282
208,282
208,282
208,282
208,282
158,675
158,675
158,675
158,675
158,675
158,675
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital. The management of the Group’s
capital is performed by the Board.
The capital structure of the Group consists of net debt (trade and other payables and provisions detailed
in notes 11 and 12 offset by cash and bank balances) and equity of the Group (comprising issued capital,
reserves, offset by accumulated losses detailed in notes 13, 14 and 15).
The Group is not subject to any externally imposed capital requirements. None of the Group’s entities
are subject to externally imposed capital requirements.
ANNUAL REPORT 30 JUNE 2020
Page 60 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 22: SHARE-BASED PAYMENTS
a) Share option plan
The Group has an Incentive Option Scheme (“Scheme”) for executives and employees of the Group.
In accordance with the provisions of the Scheme, as approved by shareholders at a previous annual
general meeting, executives and employees may be granted options at the discretion of the
directors.
Each share option converts into one ordinary share of Alchemy Resources Limited on exercise. No
amounts are paid or are payable by the recipient on receipt of the option. The options carry neither
rights of dividends nor voting rights. Options may be exercised at any time from the date of vesting
to the date of their expiry.
Options issued to directors are not issued under the Scheme but are subject to approval by
shareholders.
The following share-based payment arrangements were in existence during the reporting period:
Option
series
12
13
14
15
16
17
Number
Grant date
Expiry date
Vesting date
4,000,000
4,000,000
4,000,000
10,000,000
1,000,000
4,000,000
9 Jan 2017
9 Jan 2017
9 Jan 2017
16 Apr 2018
11 Dec 2019
7 Feb 2020
8 Jan 2021
8 Jan 2021
8 Jan 2021
15 Apr 2021
31 Dec 2023
31 Dec 2023
8 Jan 2018
8 Jan 2019
8 Jan 2020
Immediate
Immediate
Immediate
Exercise
price
$0.04
$0.08
$0.12
$0.05
$0.025
$0.025
Fair value at
grant date
$0.0075
$0.0054
$0.0042
$0.0069
$0.0070
$0.0070
Fair value of share options granted during the year
The fair value of share options at grant date are determined using a Black-Scholes option pricing
model that takes into account the exercise price, the term of the option, the share price at grant
date, the expected price volatility of the underlying share and the risk free rate for the term of the
option. The fair value of share options expensed during the year was $37,148 (2019: $11,295).
The fair value of options granted is recognised as an employee benefits expense with a
corresponding increase in equity. The fair value is measured at grant date and spread over the
period during which the employees become unconditionally entitled to the options.
The model inputs for options granted during the year ended 30 June 2020 are as follows:
Inputs
Series 16
Series 17
Exercise Price
Grant date
Vesting date
Expiry date
Share price at grant date
Expected price volatility
Risk-free interest rate
Expected dividend yield
$0.25
11 Dec 2019
11 Dec 2019
31 Dec 2023
$0.12
102%
0.81%
0%
$0.25
7 Feb 2020
7 Feb 2020
31 Dec 2023
$0.12
102%
0.80%
0%
ANNUAL REPORT 30 JUNE 2020
Page 61 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 22: SHARE-BASED PAYMENTS (Continued)
b) Movements in share options during the year
Movement in the number of share options held by directors, employees and advisors:
2020
2019
No. of
options
Weighted
average exercise
price ($)
No. of
options
Weighted
average exercise
price ($)
Outstanding at the beginning of the year
Granted during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
22,000,000
5,000,000
-
27,000,000
27,000,000
0.07
0.025
-
0.06
0.06
29,500,000
-
(7,500,000)
22,000,000
18,000,000
0.07
-
0.15
0.07
0.05
The weighted average remaining contractual life of share options outstanding at the end of the
year was 1.18 years (2019: 1.65 years).
c) Share options outstanding at the end of the year
Share options issued and outstanding at the end of the year have the following exercise prices:
Expiry date
8 January 2021
8 January 2021
8 January 2021
15 April 2021
31 December 2023
Exercise price ($)
0.04
0.08
0.12
0.05
0.025
2020 (number)
2019 (number)
4,000,000
4,000,000
4,000,000
10,000,000
5,000,000
4,000,000
4,000,000
4,000,000
10,000,000
-
27,000,000
22,000,000
ANNUAL REPORT 30 JUNE 2020
Page 62 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 23: RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Cash flows from operating activities
Loss for the period
Non-cash flows in profit/(loss):
- Depreciation
- Share-based remuneration
- Exploration expenditure write-off
Change in assets and liabilities:
- Decrease/(increase) in trade receivables
- Decrease/(increase) in prepayments
- Increase/(decrease) in trade creditors and accruals
- Increase/(decrease) in provisions
CONSOLIDATED
2020
$
2019
$
(390,897)
(10,282,167)
1,378
37,148
12,233
(33,787)
(5,847)
(9,528)
(9,794)
904
11,295
9,899,844
1,801
(1,496)
(20,330)
12,789
Net cash used in operating activities
(399,094)
(377,360)
Non-cash investing and financing activities
There were no non-cash investing and financing activities during the year.
ANNUAL REPORT 30 JUNE 2020
Page 63 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 24: RELATED PARTY DISCLOSURE
a) Parent entity
Alchemy Resources Limited
Ordinary
Australia
-
-
Class
Country of
incorporation
Investment at cost
2020 ($)
2019 ($)
b) Subsidiaries
Alchemy Resources (Murchison) Pty Ltd
Alchemy Resources (Three Rivers) Pty Ltd
Goldtribe Corporation Pty Ltd
Alchemy Resources (NSW) Pty Ltd
Class
Ordinary
Ordinary
Ordinary
Ordinary
Country of
incorporation
Investment at cost
2020 ($)
2019 ($)
Australia
Australia
Australia
Australia
100
100
1
1
100
100
1
1
c) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
CONSOLIDATED
2020
$
2019
$
195,999
14,820
30,148
240,967
189,998
15,200
11,295
216,493
The wife of Mr Ryan, the Managing Director, provided geological drafting and database services
to the Company to the value of $7,485 (2019: $4,350). The services were provided on normal
commercial terms and conditions.
Detailed remuneration disclosures are provided in the remuneration report on pages 31 to 35.
ANNUAL REPORT 30 JUNE 2020
Page 64 of 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 25: PARENT ENTITY DISCLOSURE
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss
Financial Position
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued equity
Reserves
Accumulated losses
TOTAL EQUITY
CONSOLIDATED
2020
$
2019
$
938,878
-
1,517,730
-
938,878
1,517,730
913,865
5,809
546,851
4,880
919,674
551,731
99,220
116,301
99,220
116,301
820,454
435,430
33,690,859
171,600
(33,042,005)
32,404,105
134,452
(32,103,127)
820,454
435,430
No guarantees have been entered into by Alchemy Resources Limited in relation to the debts of its
subsidiaries. Alchemy Resources Limited had no expenditure commitments as at 30 June 2020 other
than the commitment in relation to the lease of office premises as disclosed in note 20.
ANNUAL REPORT 30 JUNE 2020
Page 65 of 73
DIRECTORS’ DECLARATION
The directors of Alchemy Resources Limited declare that:
a)
in the directors’ opinion, the financial statements and notes set out on pages 38 to 65 and the
Remuneration Report in the Directors’ Report are in accordance with the Corporations Act 2001,
including:
i)
ii)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and
its performance, for the financial year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations), Corporations Regulations 2001 and mandatory professional reporting
requirements.
b)
c)
the financial statements also comply with International Financial Reporting Standards as disclosed
in note 2; and
there are reasonable grounds to believe that the consolidated entity will be able to pay its debts
as and when they become due and payable.
The directors have been given the declarations required by Section 295A of the Corporations Act 2001
by the Managing Director and Chief Financial Officer for the financial year ended 30 June 2020.
Signed in accordance with a resolution of the directors
Lindsay Dudfield
Chairman
Perth, Western Australia
23 September 2020
ANNUAL REPORT 30 JUNE 2020
Page 66 of 73
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Alchemy Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Alchemy Resources Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit or loss and other 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 report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
(ii)
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 Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent a firms. Liability limited by a scheme approved under Professional Standards Legislation.
Recoverability of exploration and evaluation expenditure
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 9 to the Financial Report, the
carrying value of capitalised exploration and
evaluation expenditure represents a significant asset
of the Group.
Refer to Note 9 of the Financial Report for a
description of the accounting policy and significant
judgements applied to capitalised exploration and
evaluation expenditure.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources (AASB 6), the
recoverability of exploration and evaluation
expenditure requires significant judgment by
management in determining whether there are any
facts or circumstances that exist to suggest that the
carrying amount of this asset may exceed its
recoverable amount. As a result, this is considered a
key audit matter.
Our procedures included, but were not
limited to:
· Obtaining a schedule of the areas of
interest held by the Group and assessing
whether the rights to tenure of those
areas of interest remained current at
balance date;
·
·
·
·
Considering the status of the ongoing
exploration programmes in the respective
areas of interest by holding discussions
with management, and reviewing the
Group’s exploration budgets, ASX
announcements and directors’ minutes;
Considering whether any such areas of
interest had reached a stage where a
reasonable assessment of economically
recoverable reserves existed;
Considering whether any facts or
circumstances existed to suggest
impairment testing was required; and
Assessing the adequacy of the related
disclosures in Note 9 to the Financial
Report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 31 to 35 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Alchemy Resources Limited, for the year ended 30 June
2020, 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.
BDO Audit (WA) Pty Ltd
Glyn O'Brien
Director
Perth, 23 September 2020
ADDITIONAL SHAREHOLDER INFORMATION AS AT 14 SEPTEMBER 2020
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere
in this report is as follows.
Distribution of Holders of Equity Securities
Shares held
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Shareholders
136
161
134
529
383
1,343
The number of holders of less than a marketable parcel of ordinary fully paid shares is 612.
Substantial Shareholders
Substantial shareholders (i.e. shareholders who hold 5% or more of the issued capital):
Number of shares
Percentage held
Northern Star Resources Limited
LG Dudfield Pension Fund
Dr Stephen Garth Nordstrom
Rossdale Superannuation Pty Ltd
78,125,000
41,319,698
43,500,000
38,250,001
11.62
7.34
6.47
5.69
Voting Rights
a) Ordinary shares
Each shareholder is entitled to receive notice of and attend and vote at general meetings of the
Company. At a general meeting, every shareholder present in person or by proxy, representative
of attorney will have one vote on a show of hands and on a poll, one vote for each share held.
b) Options
No voting rights.
Quoted Securities on Issue
The Company has 672,243,453 quoted shares on issue. No options on issue by the Company are
quoted.
On-Market Buy Back
There is no current on-market buy back.
ANNUAL REPORT 30 JUNE 2020
Page 70 of 73
ADDITIONAL SHAREHOLDERS INFORMATION
Unquoted Equity Securities
Options exercisable at $0.04 on or before 8 January 2021
Options exercisable at $0.08 on or before 8 January 2021
Options exercisable at $0.12 on or before 8 January 2021
Options exercisable at $0.05 on or before 15 April 2021
Options exercisable at $0.025 on or before 31 December 2023
Options exercisable at $0.03 on or before 30 September 2022
Twenty Largest Holders of Quoted Ordinary Shares
Number on issue
4,000,000
4,000,000
4,000,000
10,000,000
5,000,000
33,429,776
Number of holders
1
1
1
1
3
275
Shareholder
Northern Star Resources Limited
LG Dudfield Pension Fund
Dr Stephen Garth Nordstrom
Rossdale Superannuation Pty Ltd
Jetosea Pty Ltd
TBB NSW Pty Ltd
Jindalee Resources Limited
Mr Alexander Angelopoulos
Grandor Pty Ltd
Heron Resources Limited
Mr Christopher Paul Lewis
Netwealth Investments Limited
Rossdale Super Pty Ltd
New Greenwich Pty Ltd
Kale Capital Corporation Ltd
Eric Anthony Frederick Bennik
National Nominees Limited
Bluestar Management Pty Ltd
Bora Bora Resources Limited
Radrob Pty Ltd
Number of shares
78,125,000
49,319,698
43,500,000
38,250,001
27,542,458
27,058,333
17,469,759
15,259,000
12,323,689
12,000,000
11,737,415
11,066,332
11,000,000
10,333,332
9,587,750
9,173,764
8,856,612
7,000,000
7,000,000
6,000,000
Percentage held
11.62
7.34
6.47
5.69
4.10
4.03
2.60
2.27
1.83
1.79
1.75
1.65
1.64
1.54
1.43
1.36
1.32
1.04
1.04
0.89
412,603,143
61.38
ANNUAL REPORT 30 JUNE 2020
Page 71 of 73
TENEMENT SCHEDULE
Project/Tenement
Bryah Basin Project
E52/1668
E52/1678
E52/1722
E52/1723-I
E52/1730
E52/1731
E52/1810
E52/1852
E52/2360
E52/2362
E52/3292-I
E52/3358
E52/3359
E52/3405
E52/3406
E52/3407
E52/3408
E52/3409
E52/3472
E52/3475
M52/722
M52/723
M52/737
M52/795
M52/844-I
M52/1049
P52/1425
P52/1427
P52/1428
P52/1429
P52/1467
P52/1468
P52/1469
P52/1470
P52/1531
P52/1532
P52/1533
P52/1534
P52/1535
P52/1538
P52/1539
P52/1540
P52/1541
P52/1565
P52/1566
P52/1567
P52/1568
P52/1572
P52/1577
Karonie Project
Location/Status
Western Australia
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Transfer
Transfer
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Western Australia
Interest
Co-Holder
10%
10%
10%
20%
10%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
10%
10%
20%
20%
20%
20%
20%
20%
20%
20%
Jackson / Billabong / Sandfire
Jackson / Billabong / Sandfire
Jackson / Sandfire
Billabong / Sandfire
Jackson / Billabong / Sandfire
Billabong / Sandfire
Sandfire
Billabong
Sandfire
Billabong / Sandfire
Sandfire
Sandfire
Sandfire
Billabong / Sandfire
Billabong / Sandfire
Sandfire
Billabong / Sandfire
Sandfire
Sandfire
Sandfire
Billabong / Sandfire
Billabong / Sandfire
Billabong
Billabong / Sandfire
Sandfire
Billabong
Sandfire
Sandfire
Sandfire
Billabong
Sandfire
Sandfire
Sandfire
Sandfire
Sandfire
Sandfire
Sandfire
Sandfire
Sandfire
Jackson / Billabong
Jackson / Billabong
Sandfire
Sandfire
Sandfire
Sandfire
Sandfire
Sandfire
Sandfire
Billabong
Notes
1, 2, 3
1, 2, 3
1, 2
2, 4, 5
1, 2, 3
2, 4
2
4
2, 6
2, 4, 6
2
2
2
2, 4
2, 4
2
2, 4
2
2
2
2, 4, 6
2, 4, 6
4, 6
2, 4, 6
2, 6
4, 6
2
2
2
4
2
2
2
2
2
2
2
2
2
1, 4
1, 4
2
2
2
2
2
2
2, 6
4, 6
ANNUAL REPORT 30 JUNE 2020
Page 72 of 73
TENEMENT SCHEDULE
Project/Tenement
E28/2575
E28/2576
E28/2601
E28/2619
E28/2643
E28/2657
E28/2667
E28/2668
E28/2681
E28/2752
E28/2880
E28/2940
E28/2976
Lake Rebecca Project
E28/2960
E28/3004
E28/3006
E28/3007
E28/3008
E28/3009
E28/3010
E28/3011
E28/3012
E28/3026
E28/3035
E28/3039
E28/3048
E28/3059
Lachlan Projects
EL5878 - Overflow
EL7941 - Overflow
EL8267 - Overflow Nth
EL8356 - Yellow Mtn
EL8192 - Eurow
EL8318 - Girilambone
EL8631 - West Lynn
EL8711 - Woodsreef
Notes:
Location/Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Appl. pending
Appl. pending
Western Australia
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
Appl. pending
New South Wales
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
51%
51%
51%
51%
51%
51%
51%
51%
Co-Holder
Heron Resources
Heron Resources
Heron Resources
Heron Resources
Heron Resources
Heron Resources
Heron Resources
Heron Resources
Notes
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
8
8
8
8
8
8
8
8
1.
Jackson Minerals Pty Ltd, a subsidiary of Fe Ltd (ASX: FEL), retains a 20% interest free-carried to a decision to mine.
2. Sandfire Resources NL (ASX: SFR) holds a 70-80% interest (excludes iron ore) in whole or part tenements, with Alchemy
free-carried up to completion of a pre-feasibility study.
3. Billabong Gold Pty Ltd (a wholly owned subsidiary of Superior Gold Inc.) holds a 70% interest in whole or part of tenement.
4. Billabong Gold Pty Ltd (a wholly owned subsidiary of Superior Gold Inc.) holds an 80% interest in whole or part of tenement.
5. PepinNini Robinson Range Pty Ltd retains a 1% NSR on iron ore.
6. Carey Mining Iron Ore JV: Alchemy has 100% mineral rights for all minerals, excluding iron ore where ownership is Alchemy
50% / Carey Mining 50%.
7. Goldtribe Corporation Pty Ltd, a subsidiary of Alchemy Resources Ltd, holds a 100% interest in the tenement.
8. Alchemy Resources (NSW) Pty Ltd, a subsidiary of Alchemy Resources Ltd, holds a 51% interest in the tenement, and has a
right to earn an 80% interest in tenements from Heron Resources Ltd by sole funding a total of $2,000,000 on exploration
expenditure prior to 27 May 2021.
ANNUAL REPORT 30 JUNE 2020
Page 73 of 73