ANGLO AUSTRALIAN RESOURCES NL
AND ITS CONTROLLED ENTITIES
ABN 24 651 541 976
Annual Report
For the year ended 30 June 2020
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Contents
Contents
Corporate Directory ...................................................................................................................................................... 2
Review of Operations.................................................................................................................................................... 3
Directors’ Report......................................................................................................................................................... 21
Auditor’s Independence Declaration ............................................................................................................................ 37
Independent Auditor’s Report ...................................................................................................................................... 38
Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................................................ 42
Consolidated Balance Sheet ....................................................................................................................................... 43
Consolidated Statement of Cash Flows ....................................................................................................................... 44
Consolidated Statement of Changes in Equity ............................................................................................................. 45
Notes to the Consolidated Financial Statements .......................................................................................................... 46
Director’s Declaration.................................................................................................................................................. 73
ASX Additional Information ......................................................................................................................................... 74
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
1
Corporate Directory
Corporate Directory
This financial report includes the consolidated financial statements and notes of Anglo Australian Resources NL (Anglo
Australian or the Company) and its controlled entities (the Group). The Group’s functional and presentation currency is
AUD ($).
A description of the Group’s operations and of its principal activities is included in the review of operations and activities in
the Directors’ report. The Directors’ report is not part of the financial report.
Directors
Leigh Warnick - Non-Executive Chairman
Marc Ducler - Managing Director
John Jones - Non-Executive Director
Peter Stern - Non-Executive Director
David Varcoe - Non-Executive Director
Company Secretary
Brendon Morton
Registered Office & Principal Place of Business
Suite 2, 6 Lyall Street
South Perth WA 6151
Telephone: +61 8 9382 8822
E-mail: info@anglo.com.au
Website: www.anglo.com.au
Share Registry
Automic Registry Services
Level 2, 267 St Georges Terrace
Perth WA 6000
Telephone: +1300 288 664
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Bankers
National Australia Bank
197 St George’s Terrace
Perth WA 6000
Solicitors
Thomson Geer
Level 27, Exchange Tower
2 The Esplanade
Perth WA 6000
Stock Exchange
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St George’s Terrace
Perth WA 6000
ASX Code: AAR
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ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Review of Operations
Review of Operations
Anglo Australian’s principal activity during the financial year was progressing the Company’s 100% owned Mandilla Gold
Project.
The Mandilla Gold Project was the subject of significant exploration effort during the financial year, with a combination of
reverse circulation (RC) and diamond drilling totalling over 21km of drilling completed. The successful delineation of a large
gold mineralised footprint in the Mandilla Syenite is more fully detailed below.
Anglo Australian made the decision to farm-out the Koongie Park Base Metals Project during the financial year, consistent
with the Company’s focus on its flagship Mandilla Gold Project.
The Group’s operations over the last 6 months have been affected by COVID-19; however, the combined collaborative
support of Government, representative industry bodies, employees, contractors, suppliers and our host communities has
allowed the Company to adapt and mitigate, as far as practicable, the risks this infectious disease presents. The Company
will continue to pursue its exploration activities, subject to the evolving and unforeseen impacts of COVID-19.
Mandilla Gold Project
Anglo Australian – 100%
The Mandilla Gold Project is situated in the northern Widgiemooltha greenstone belt in the western part of the Kalgoorlie
geological domain, some 70 kilometres south of Kalgoorlie, Western Australia, a significant gold mining centre. The location
of the project in relation to Kalgoorlie and other nearby gold projects is set out in Figure 1.
The Project lies on the western margin of a porphyritic granitic intrusion, the Mandilla Syenite. The granite intrudes
volcanoclastic sedimentary rocks in the project area which form part of the Spargoville Group. The Mandilla Gold Project
comprises the Mandilla East prospect, the Mandilla South prospect and the previously mined paleochannel pit.
Significant NW to WNW-trending structures along the western flank of the project are interpreted from aeromagnetic data
to cut through the Mandilla Syenite and may be important in localising mineralisation at Mandilla East. A second sub-
parallel structure appears to host Mandilla South. Both prospects are covered by Mining Leases.
Figure 1 – Mandilla location map.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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Review of Operations
A map of the Mandilla Gold Project, illustrating key locations and geological features, is shown in Figure 2.
Figure 2: Mandilla local area geology.
The recent focus of exploration activity at the Mandilla Gold Project has been targeting fresh rock within the Emu Rocks
Granite (Mandilla Syenite), where a combination of reverse circulation and diamond drilling continues to delineate a large
gold system. The Company progressed substantial exploration activity at Mandilla during the financial year.
Several campaigns of drilling were undertaken representing 20,208m of reverse circulation (RC) drilling and 1,042m of
diamond drilling. This represents a significant investment in exploration drilling and demonstrates the Company’s belief in
the geological potential of the Mandilla Gold Project.
Campaign 1 – Released 31 July 2019
During July 2019, the Company released results of a drilling campaign undertaken with the objective of gaining a better
understanding of the geological setting of gold mineralisation at both the Mandilla East and Mandilla South Prospects. The
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ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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campaign was co-funded through a grant provided by the Department of Mines and Petroleum, Western Australia under
its Exploration Incentive Scheme.
Three diamond holes were drilled for a total of 580 metres with 153 metres of RC pre-collars. This targeted the main
Mandilla East zone, extensions to the north of Mandilla East and targeted Mandilla South (Figure 2)
Best results at Mandilla East included:
▪
▪
60.2 m @ 3.79 g/t Au from 65.8 m
64.7 m @ 0.71 g/t Au from 183 m
Best results at Mandilla South included:
▪
▪
▪
37 m @ 1.05 g/t Au from 69 m
4 m @ 0.89 g/t Au from 152 m
1 m @ 15.42 g/t Au from 179 m
The result at Mandilla South represented the first bedrock drilling undertaken at this target. This result was important in
that it demonstrated the potential for continued mineralisation along the western margin of the Emu Rocks Granite and it
extended significant gold anomalism in the granitic intrusion a further 1.2 kilometres from the main Mandilla East zone.
Campaign 2 – Released 16 October 2019
Figure 2 - Location plan of Campaign 1 drilling
During October 2019, the Company completed an RC program for a total of 36 holes for an aggregate 5,964 metres. A
map of Mandilla identifying the location of the drill holes included in this campaign is set out in Figure 3.
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The program was designed to increase the mineralisation footprint at Mandilla East on a 40 x 40 metre spacing. Four of
the 36 holes were also designed to test for mineralisation at Mandilla South following on from the success of diamond drill-
hole MDD005.
Key results from this program included:
▪
▪
▪
▪
▪
▪
45 m @ 4.25 g/t Au from 103 m
93 m @ 3.11 g/t Au from 49 m
94 m @ 1.17 g/t Au from 101 m
112 m @ 1.5 g/t Au from 41 m
99 m @ 1.47 Au from 36 m
163 m @ 1.75 g/t Au from 37 m
The results at Mandilla East demonstrated a broad steep south westerly dipping gold mineralised envelope. The
mineralisation extended for over 500m along strike and remains open to the north and south and at depth.
Figure 3 - Location plan of Campaign 2 drilling
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Campaign 3 – Released 12 December 2019
In October 2019, the Company completed a campaign involving the drilling of 55 shallow (“slimline”) RC holes for 2,235
metres. The programme was designed to penetrate a short distance into fresh rock to test various extensional targets at
Mandilla, with the objective to expand the footprint of significant mineralisation. A map of Mandilla identifying the location
of the drill holes included in this campaign is set out in Figure 4.
The average depth of these holes was 41m. Assay results from all holes were reported in the ASX release dated 12
December 2019. Best results from the program included:
▪
▪
▪
25 m @ 2.2 g/t Au from 24 m
4 m @ 2.31 g/t Au from 45 m
4 m @ 4.43 g/t Au from 38 m to EOH
The slimline RC program demonstrated the potential for a second zone of mineralisation up to 800 along strike closer to
the western margin of the Mandilla Syenite intrusion (West Zone Extension Target). Additionally, this program
demonstrated a potential 400 metre northern extension of the mineralisation at Mandilla East (East Zone in Figure 4).
Three RC pre-collars for a 3-hole diamond drill program were also completed and reported as part of this campaign
MDRC165 reported an intersection of 37m @ 1.64g/t Au from 104m.
Figure 4 - Location plan of Campaign 3 drilling
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Campaign 4 – Released 12 February 2020
A 16-hole RC drill campaign for an aggregate 2,750m was commenced in late December and was designed to in-fill the
core of the main Mandilla East zone. The RC drilling met with considerable success, further demonstrating the thick high-
grade nature of the mineralisation. This campaign was able to extend the main Mandilla East zone to the south. The
locations of the drill holes are presented on Figure 5 below. Best results included:
▪
▪
▪
▪
▪
▪
▪
45m @ 2.33g/t Au from 82m
21m @ 4.53g/t Au from 89m
42m @ 1.85g/t Au from 45m
41m @ 1.36g/t Au from 59m
21m @ 2.39g/t Au from 85m
15m @ 3.47g/t Au from 54m
14m @ 3.18g/t Au from 31m
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ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Figure 5 - Location plan of Campaign 4 drilling
Review of Operations
Campaign 5 – Released 19 June 2020
In June 2020 Anglo Australian released the results from 9,106 m of RC drilling and 445m of diamond tails. This RC and
diamond drilling campaign tested the main Mandilla East mineralised zone, tested for extensions to the north and south of
Mandilla East and followed up previous bedrock mineralisation drill results at Mandilla South.
This was the most significant single campaign completed to date at the Mandilla Gold Project and it continued to deliver
successful results, demonstrating further extensions along strike to the north and south of Mandilla East and also identified
a 500m long bedrock mineralised zone at Mandilla South.
At Mandilla East, diamond drilling demonstrated the extension of mineralisation to a vertical depth of 230m below surface
with best intersections including:
▪
▪
7.95m @ 8.31g/t Au from 163.1m plus 24.1m @ 2.11g/t Au from 216.35m
26.6m @ 1.49g/t Au from 182.5m
Extensions along strike to the north and south of Mandilla East were demonstrated with the bedrock mineralisation
extending from 500m to over 1,000m of strike. A map of Mandilla identifying the location of the drill holes included in this
campaign is set out in Figure 6 below. Best intersections included:
▪
▪
▪
▪
▪
▪
26m @ 8.29g/t Au from 76m
21m @ 3.7g/t Au from 35m
17m @ 3.71g/t Au from 59m
9m @ 5.89g/t Au from 76m
38m @ 1.34g/t Au from 38m
14m @ 2.19g/t Au from 34m
Figure 6 - Location plan of Campaign 5 drilling at Mandilla East
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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Review of Operations
A total of 12 holes were drilled at Mandilla South. This program successfully delineated a 500m long mineralised footprint
and combined with detailed magnetic imagery collected by the Company provides an opportunity for Anglo Australian to
delineate a mineralised zone of similar scale to Mandilla East. Best intersections included:
▪
▪
27m @ 1.79g/t Au from 168m plus 10m @ 1.76g/t Au from 123m
16m @ 1.65g/t Au from 188m plus 31m @ 0.53g/t Au from 131m
Drone Magnetic Survey
Figure 7 - Location plan of Campaign 5 drilling at Mandilla South
A high-resolution drone magnetic survey (DroneMag) was completed in March 2020. Areas of low magnetic susceptibility
have been demonstrated previously to closely correspond with reported mineralised intervals, such as at Mandilla East.
Accordingly, magnetic low domains in detailed magnetic data appear to outline gold related alteration and assist in both
validating current geological interpretations and generating new exploration targets.
Figure 8 below shows the extensional targets to the north and south of Mandilla East. These extensional targets correspond
with areas of low magnetic response that are also associated with identified structures. Initial RC drilling confirmed the
Mandilla East extensions directly to the north and south. A second zone in the south-east was also located oriented along
a NW striking structure. A NNW trending target to the north of Mandilla East is still to be fully tested as previous drilling
targeted a zone further west on a north-westerly orientation.
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ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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Follow-up drilling is planned to test targets highlighted in the DroneMag (as depicted in Figure 8) and to in-fill the new north
and south extensions to further extend the mineralisation at the Mandilla Gold Project. Additionally, the Mandilla South
target appears to be of similar scale to that of Mandilla East with only limited RC drilling to date. Follow-up diamond and
step-out RC drilling is planned at Mandilla South. This drilling will also investigate the potential for a mineralised corridor
between Mandilla East and Mandilla South.
Figure 8 - Detailed magnetic image of Mandilla Gold Project
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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Mandilla Gold Project Summary
Following the most extensive exploration drilling effort ever undertaken at Mandilla during the 2020 financial year the
Company has delineated a potential large bulk scale gold mineralised system. The bedrock mineralisation now represents
over 1,000m of strike extent at Mandilla East and remains open along strike in both directions. More recently and post year
end, the mineralisation has been defined to over 350m of vertical depth.
At Mandilla South, the bedrock mineralisation has been defined to over 500m of strike. Mandilla South remains very lightly
drilled and presents a potential scale of mineralisation similar to Mandilla East.
Forward Plan
A successful capital raising was completed subsequent to year end. An active exploration drilling program comprising RC
and diamond drilling will continue through the 2021 financial year.
Planned diamond and RC drilling will:
▪
▪
▪
▪
▪
continue to define the current Mandilla East mineralisation, with drill spacing tightening to a 40m x 20m pattern;
define the current Mandilla South mineralisation to a 40m x 40m spacing;
test the south east extension of Mandilla East;
test the potential mineralised corridor between Mandilla East and Mandilla South; and
test the potential of the magnetic low to the east of Mandilla South.
Dependent on ongoing drill success the potential scale of the drilling programs is estimated to total a further 70,000m of
RC and diamond drilling during the 2021 calendar year.
Additionally, Anglo Australian will target the completion of a Mineral Resource Estimation for Mandilla East in the fourth
quarter of calendar year 2020, as well as commencing initial technical, economic and environmental studies (including
metallurgical testwork) to underpin future feasibility studies and government approvals.
Koongie Park Gold and Base Metals Project - WA
Anglo Australian - 100% interest
Summary
The Koongie Park Project (the Project) is located 25km south-west of Halls Creek in the North East Kimberley region of
Western Australia, straddling the Great Northern Highway (refer to Figure 9). The port of Wyndham is located 400km to
the north of the Project. The Company obtained an interest in the Project in 1990 and moved to 100% ownership in 2002.
The Company’s substantial tenement position is illustrated in Figure 10.
Between 2006 and 2010, the Company completed extensive diamond drilling programs for resource delineation and
metallurgical testing.
The Company completed a Pre-Feasibility Study (PFS) to assess the viability of a mining operation at the Sandiego deposit
during October 2008. The completion of this study coincided with a sharp drop in copper and zinc commodity prices. During
2010, the economics of the Sandiego Project were potentially improved with the discovery and definition by drilling of a cap
of high-value, high-grade supergene copper mineralisation at relatively shallow depth above the deeper mineralisation that
formed the basis of the PFS. As a result of the shallow position of the new mineralisation, the Company undertook a Scoping
Study, incorporating an open pit optimisation study.
Neither the 2008 PFS nor the 2010 Scoping Study included provision for an open cut mining operation in the oxide and
transition ores at the Onedin Zinc Copper deposit. A key hurdle was the development or identification of a suitable metallurgical
process to unlock the value of the oxide resources at Onedin, however a suitable metallurgical process has never been
identified.
In 2019, the Company completed an exploration program of 15 RC holes on targets at Bulldog and Nicolsons East (refer to
ASX Announcement dated 24 July 2019) for an aggregate 822m (average depth of approximately 55 metres per hole).
This demonstrated the presence of gold mineralisation beneath the mapped positions of quartz vein outcrops, with gold assays
of up to 11.27g/t Au over 1 metre.
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ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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Figure 9 – Koongie Park, Location Map.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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Review of Operations
Figure 10 – Koongie Park, Tenement Map (illustrating key features)
Historical Mineral Resource Estimates (JORC 2004 compliant)*
The Company has previously reported historical Mineral Resource estimates for the Sandiego deposit (refer to Table 1) and
the Onedin deposit (refer to Table 2) at Koongie Park.
Sandiego Deposit Indicated & Inferred Resources
Classification
Tonnes
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
370,000
10,000
1,140,000
440,000
1,220,000
350,000
Cu
%
4.0
1.0
Zn
%
Au
g/t
Ag
g/t
Cu
Tonnes
(Kt)
Zn
Tonnes
(Kt)
Au
(K Oz)
Ag
(K Oz)
Supergene Copper (0.8% Cu lower cutoff)
2.7
0.1
0.29
0.05
48
3
15
0
Cu dominant Transitional/Primary Lodes (0.8% Cu lower cutoff)
2.8
1.8
1.5
2.0
0.43
0.25
12
5
32
8
Zn dominant Transitional/Primary (3.0% Zn lower cutoff)
0.2
0.1
7.0
6.2
0.16
0.14
26
9
3
1
10
0
17
9
85
21
4
0
16
4
6
1
577
1
427
75
1042
95
Table 1 - Mineral Resource Estimate – Sandiego Deposit (refer to ASX Announcement dated 1 November 2010, based on Sandiego
Resource Estimate prepared by Coffey Mining Pty Ltd).
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ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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Lode
Zinc Lode
Copper Lode
Mixed Zone
Total
Tonnes
1,326,000
2,481,000
650,000
4,458,000
Onedin Indicated Resource
Zn %
5.40
0.85
7.98
3.24
Cu %
0.15
1.08
1.11
0.81
Pb %
0.62
0.94
1.43
0.92
Ag g/t
24.87
21.01
47.13
25.97
Au g/t
0.25
0.33
0.37
0.31
Table 2 - Mineral Resource Estimate – Onedin Deposit (refer to March 2009 Quarterly Report dated 30 April 2009, based on Onedin
Resource Estimate prepared by CSA Global Pty Ltd).
*Cautionary Statement: The references to the previously reported historical Mineral Resource estimates for the
Sandiego deposit and Onedin deposit are reported in accordance with the 2004 JORC Code and are not reported in
accordance with the 2012 JORC Code. A competent person has not done sufficient work to classify these historical
estimates as Mineral Resource estimates in accordance with the 2012 JORC Code and it is uncertain that following
evaluation and/or further exploration work that these historical estimates will be able to be reported as Mineral
Resources in accordance with the 2012 JORC Code.
KOONGIE PARK FARM-OUT AGREEMENT
General
On 25 June 2020, the Company announced that it had entered into a binding term sheet with AuKing Mining Limited (AuKing)
with respect to the Koongie Park Project (Agreement). Under the Agreement, AuKing and Anglo Australian propose to form
a joint venture (Joint Venture) on terms which include, but are not limited to, the following:
▪ Anglo Australian retains the right to explore for and develop precious metals deposits within the project area; and
▪ AuKing is granted the right to:
o Explore for and develop base metals deposits within the project area;
o Conduct exploration and development activities for base metals deposits on the project area during the
earn-in period; and
o Earn up to a 75% interest in the project area through the joint venture by funding exploration and project
development studies (as stipulated below).
Conditions Precedent
The Agreement does not bind the parties and has no force or effect unless and until the following conditions are satisfied or
waived:
▪ AuKing completing due diligence in respect of the Koongie Park Project within 30 days of the date of the Agreement;
▪ AuKing obtaining all necessary AuKing shareholder and regulatory approvals, including for the purposes of
Chapters 1, 2 and 11 of the ASX Listing Rules, as required to give effect to the transaction contemplated by the
Agreement; and
▪ AuKing successfully raising a minimum of A$6,000,000 pursuant to a capital raising.
(together, the Conditions Precedent).
AuKing and Anglo Australian must use reasonable endeavours to satisfy the Conditions Precedent as soon as possible and,
in any event, within 120 days of the date of the Agreement. The parties may terminate the Agreement if the Conditions
Precedent are not satisfied within this period.
AuKing Earn-in Rights
The Agreement provides for a two-staged earn-in process whereby AuKing can ultimately secure a 75% interest in the
Koongie Park Project. A summary of the two-stage earn-in is provided below.
First Earn-in Period
AuKing shall be deemed to have earned a nominal 25% interest in the Joint Venture (to be formed upon satisfaction of the
first earn-in milestone) upon AuKing making a total initial payment of $1,000,000 to Anglo Australian, in the following tranches:
▪
▪
$100,000 non-refundable deposit (paid on 1 July 2020); and
$900,000 immediately after satisfaction of the Conditions Precedent.
During the First Earn-In Period of twenty four (24) months after the satisfaction of the Conditions Precedent, AuKing may earn
a further 25% interest in the Joint Venture by incurring expenditure of $1.5 million including expenditure on exploration,
testwork and related analysis to establish a commercially viable processing solution for the Koongie Park oxide ores (First
Earn-In Milestone).
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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Upon satisfying the First Earn-in Milestone, AuKing shall be deemed to have earned an additional 25% interest in the Joint
Venture for a total 50% interest. The Joint Venture is to be formed upon satisfaction of the First Earn-in Milestone. AuKing
then has a 10-business day period to elect to proceed with the Second Earn-In Period.
If AuKing fails to satisfy the First Earn-in Milestone during the First Earn-in Period, AuKing will be deemed to have withdrawn
from the Joint Venture, will cease to have any interest in the Joint Venture and the Agreement automatically terminates.
Second Earn-in Period
During the Second Earn-in Period, which is the 12 month period commencing from AuKing’s election to proceed with the
Second Earn-in after completion of the First Earn-In Period, AuKing may earn a further 25% interest in the Joint Venture by
incurring additional expenditure of $1,500,000, including expenditure on exploration activities and feasibility studies with a
view to establishing mining operations on the Onedin and Sandiego deposits on the Tenements (Second Earn-In Milestone).
Upon satisfying the Second Earn-in Milestone, AuKing shall be deemed to have earned an additional 25% interest in the Joint
Venture for a total 75% interest in the Joint Venture. If AuKing fails to satisfy the Second Earn-In Milestone during the Second
Earn-in Period, then AuKing will retain its earned interest in the Joint Venture of 50%.
For the duration of the Second Earn-in Period, AuKing agrees to sole fund all expenditure on exploration activities in relation
to the Joint Venture and free carry Anglo Australian’s interest in the Joint Venture.
Any exploration expenditure incurred by Anglo Australian pursuant to the exercise of its precious metal rights does not
constitute expenditure for the purposes of AuKing satisfying the First or Second Earn-In Milestones.
AuKing paid the non-refundable deposit on 1 July 2020 and completed due diligence during July 2020. AuKing and Anglo
Australian are continuing to progress the remaining Conditions Precedent.
Feysville Gold Project – WA
Anglo Australian - 100% interest (with tenements under purchase option held by Anglo Australian)
The Feysville Gold Project is located in Australia’s premier gold belt, approximately 14 kilometres south of the giant Golden
Mile deposit (70 MOz) at Kalgoorlie. The belt extends for some 100 kilometres along a north, north-west strike, and takes
in major gold deposits at New Celebration (3 MOz), some 10 kilometres south of Feysville, and the large St Ives field (+15
MOz) 30 to 60 kilometres to the south. The Feysville Gold Project tenements are depicted on the location map in Figure 1
above. The Feysville Gold Project comprises a number of prospects, including Think Big, Hyperno and Saintly.
On 16 July 2019, the Company provided an update on the Feysville Gold Project. A RC drill program of 46 holes for an
aggregate 3,540m was completed. A map of the Feysville Gold Project identifying the key geological features and the
various prospects that were tested in this drilling campaign in Figure 11 below.
At Think Big an infill RC campaign of 26 holes for 2,380m was completed. The key intersections returned included:
▪
▪
▪
▪
10m @ 3.6 g/t Au from 46m
10m @ 10.0 g/t Au from 23m
2m @ 11.1 g/t Au from 32m
2m @ 10.5 g/t Au from 29m
At Hyperno and Saintly, 20 holes for an aggregate 1,260m were drilled with best results of:
▪
▪
▪
10m @ 2.93 g/t Au from 56m
11m @ 1.04 g/t Au from 12m
22m @0.84g/t Au from 18m
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Figure 11 - Location plan of drilling completed at the Feysville Gold Project
A maiden JORC Mineral Resource Estimate was announced on 8 April 2019. The Mineral Resource Estimate, separately
identifying Indicated and Inferred Resources for cut-off grades of 0.5, 0.8 and 1.0 g/t Au, is set out in Table 3.
Category
Cut-off Grade
Tonnage
Grade
Ounces Au
Indicated
0.5 g/t Au cut-off
2,285,000
0.8 g/t Au cut-off
1,541,000
1.0g/t Au cut-off
1,214,000
Inferred
0.5 g/t Au cut-off
0.8 g/t Au cut-off
1.0g/t Au cut-off
572,000
416,000
299,000
TOTAL
0.5 g/t Au cut-off
2,857,000
0.8 g/t Au cut-off
1,957,000
1.0g/t Au cut-off
1,513,000
Table 3: Think Big Global Mineral Resource Estimate.
1.3
1.6
1.8
1.1
1.3
1.4
1.3
1.6
1.7
95,900
80,700
71,400
20,200
17,000
13,600
116,100
97,700
85,000
The Mineral Resource Estimate for the supergene enriched gold mineralisation (which is included within the Global
estimate in Table 3) is set out in Table 4.
Category
Cut-off Grade
Tonnage
Grade
Ounces Au
Indicated
0.5 g/t Au cut-off
279,000
0.8 g/t Au cut-off
250,000
1.0 g/t Au cut-off
209,000
3.0 g/t Au cut-off
54,600
2.2
2.4
2.7
5.5
20,100
19,500
13,300
9,800
Table 4: Think Big Supergene Enriched Gold Mineral Resource Estimate (included in Global estimate in Table 3).
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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Carnilya Hill Gold Project – WA
Anglo Australian – 100% of gold rights
Carnilya Hill is located approximately 20 kilometres east-south-east of the Company’s Feysville Project and approximately
40 kilometres south-east of Kalgoorlie, Western Australia.
The Project encompasses four tenements – M26/047-049 and M26/453, representing an aggregate area of approximately
2.65 square kilometres – with rights to nickel and other minerals held by Mincor Resources NL (ASX: MCR).
A prospect named Hang Glider Hill has been outlined by Lefroy Exploration Limited (ASX: LEX) immediately north of the
Carnilya Hill tenements. The prospect comprises a surface gold geochemical anomaly where a number of gold nuggets
have been recovered.
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Schedule of Mining Tenements
The Company reports the following interests in mining tenements in Western Australia in accordance with ASX Listing Rule
5.20.
Project
Tenement
Company Interest
Title Registered to
Koongie Park
(Western Australia)
Feysville
(Western Australia)
M80/276, 277
E80/4389,4766, 4957,
4960
E80/5076, 5087,
E80/5127
E80/5263
P80/1802-10
P80/1831-1837
P26/3943-3944
P26/3947-3951
P26/4051-4052
P26/4074-4077
P26/4293,4294
100%
Anglo Australian Resources NL
100%
Feysville Gold Pty Ltd
Mandilla
(Western Australia)
M15/96
M15/633
E15/1404
100% gold rights only
100% gold rights only
100%
Apollo Phoenix Resources Pty Ltd
Anglo Australian Resources NL
Anglo Australian Resources NL
Carnilya Hill
(Western Australia)
M26/47 - 49
M26/453
100% gold rights only Mincor Resources NL
Leonora
(Western Australia)
E37/1287
E7/1355
100%
Anglo Australian Resources NL
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
19
Review of Operations
Compliance Statement
The information in this Report that relates to exploration targets and exploration results is based on information compiled
by Ms Julie Reid, who is a full-time employee of Anglo Australian Resources NL.
Ms Reid is a Competent Person and a Member of The Australasian Institute of Mining and Metallurgy.
Ms Reid has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and
to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Ms Reid consents to the inclusion in this report
of the material based on this information, in the form and context in which it appears.
The information in this Report that relates to the Indicated and Inferred Mineral Resource for the Sandiego Deposit was
first reported in accordance with JORC 2004 on 1 Nov 2010. The Company confirms that it is not in possession of any new
information or data relating to these historical Mineral Resource estimates that materially impacts on the accuracy or
reliability of these historical estimates. The Company also confirms that all material assumptions and technical parameters
underpinning these historical Mineral Resource estimates continue to apply and have not materially changed.
The information in this Report that relates to the Indicated and Inferred Mineral Resource for the Onedin Deposit was first
reported in accordance with JORC 2004 on 30 April 2009. The Company confirms that it is not in possession of any new
information or data relating to these historical Mineral Resource estimates that materially impacts on the accuracy or
reliability of these historical estimates. The Company also confirms that all material assumptions and technical parameters
underpinning these historical Mineral Resource estimates continue to apply and have not materially changed.
The information in this report that relates to Mineral Resources for the Feysville Gold Project was first reported in
accordance with JORC 2012 on 8 Apr 2019. The Company confirms that it is not in possession of any new information or
data relating to these historical Mineral Resource estimates that materially impacts on the accuracy or reliability of these
historical estimates. The Company also confirms that all material assumptions and technical parameters underpinning the
Resource estimate continue to apply and have not materially changed.
20
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Directors’ Report
Directors’ Report
Your Directors present the following report on Anglo Australian Resources NL and its controlled entities (referred to
hereafter as “the Group”) for the year ended 30 June 2020.
Directors
The names of the Directors in office during the financial year and until the date of this report are as follows.
Name
Leigh Warnick
Marc Ducler
John Jones
Peter Stern
David Varcoe
Graeme Smith
Andrew Barclay
Matthew Hardisty
David Sanders
Role
Non-Executive Chair
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Date of Appointment / Resignation
Appointed 23 December 2019
Appointed 23 December 2019
Appointed 9 February 1990
Appointed 28 November 2011
Appointed 28 November 2019
Appointed 18 March 2014 / Resigned 23 December 2019
Appointed 13 December 2019 / Resigned 23 December 2019
Appointed 13 December 2019 / Resigned 23 December 2019
Appointed 27 November 2019 / Resigned 28 November 2019
Principal Activities
During the financial year, the principal activities of the Group consisted of progressing the Company’s 100% owned
Mandilla Gold Project and evaluating its portfolio of tenements and projects in order to identify opportunities to maximise
value for shareholders.
There were no significant changes in the nature of the activities of the Group during the year.
Dividends
There were no dividends paid or proposed during the year.
The Consolidated Statement of Profit or Loss and other Comprehensive Income shows a net loss from continuing
operations attributable to owners of $2,710,042 for the financial year ended 30 June 2020 (2019: loss of $656,006).
Significant changes in the state of affairs
During the year, the Company announced and completed the following capital raisings:
▪ On 5 August 2019, the Company announced that it had raised $1.4 million via the issue of 21 million shares at
$0.065 per share.
▪ On 13 January 2020, the Company announced that it had raised $558,151 via the issue of 5.3 million shares at
$0.105 per share.
▪ On 2 March 2020, the Company issued 4,367,500 fully paid ordinary shares pursuant to a Settlement Agreement
at a deemed issued price of $0.10 per share.
▪ On 11 March 2020, the Company announced that it had raised $5.5 million via the issue of 55 million shares at
$0.10 per share.
During the year, the following unlisted options were exercised, resulting in the issue of fully paid ordinary shares:
▪ On 27 September 2019, the Company issued 400,000 fully paid ordinary shares upon the exercise of 400,000
unquoted options with an exercise price of $0.025, expiring 30 November 2020.
▪ On 17 October 2019, the Company issued 2,500,000 fully paid ordinary shares upon the exercise of 2,500,000
unquoted options with an exercise price of $0.02, expiring 30 November 2019.
▪ On 25 November 2019, the Company issued 19,800,000 fully paid ordinary shares upon the exercise of
19,800,000 unquoted options with an exercise price of $0.02, expiring 30 November 2019.
▪ On 25 November 2019, the Company issued 7,200,000 fully paid ordinary shares upon the exercise of 7,200,000
unquoted options with an exercise price of $0.02, expiring 30 November 2020.
Other than stated above, there were no significant changes in the state of affairs of the Group during the year.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
21
Directors’ Report
Matters subsequent to the end of the period
Date
Details
2 July 2020
22 July 2020
6 August 2020
31 August 2020
The Company advised that it had appointed BDO Audit (WA) Pty Ltd as auditor of the Company.
A resolution will be proposed at the Company’s 2020 Annual General Meeting to ratify the
appointment.
The Company issued 2,382,216 LTI performance rights to a nominee of Mr. Marc Ducler,
Managing Director. The LTI Performance Rights were issued under the Company’s Employee
Incentive Plan and were approved by resolution of shareholders on 16 June 2020.
The Company issued 2,500,000 unquoted options to a third party with respect to services rendered
(refer to Note 20), with the following exercise prices and expiry dates:
▪
▪
1,250,000 unquoted options exercisable at $0.133, expiring 31 December 2021; and
1,250,000 unquoted options exercisable at $0.15, expiring 31 December 2022.
The Company announced that it had reached agreement with the respective owners to extinguish
two third-party royalties held over tenement M15/633 of the Mandilla Gold Project. The third-party
royalties provided for the following payments:
▪ Royalty # 1: $1 per tonne of gold ore mined and treated; and
▪ Royalty # 2: comprising:
o 4% NSR (net smelter royalty) on gold production in excess of 100,000oz; and
o A price participation royalty of 10% on every dollar the gold price exceeds A$600 for
every ounce produced.
The consideration provided to extinguish these royalties was as follows:
▪ Royalty # 1: issue of 1,142,588 ordinary shares at a deemed issue price of $0.175 per share
(nominal value of AUD$200,000) (issued on 6 August 2020); and
▪ Royalty # 2: Payment of cash consideration of US$400,000 (paid 31 August 2020).
18 September 2020
The Company announced that it had completed a capital raising to raise a total of $11.0 million
via the issue of 64.7 million fully paid ordinary shares at $0.17 per share.
18 September 2020
The Company also announced that it would undertake a non-underwritten Share Purchase Plan
(SPP) to raise up to $3 million at an issue price of $0.17. The SPP offer opens for acceptance on
25 September 2020.
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 are no other matters or circumstances that have arisen since the end of the financial year which significantly affected
or may significantly affect the operations of the Group, or the state of affairs of the Group in future financial years.
Likely developments and expected results of operations
The Group will continue its mineral exploration and development activities at the Mandilla Gold Project and will continue to
evaluate opportunities to extract value from its other projects.
Environmental regulation
The Group operates within the resources sector and conducts its business activities with respect for the environment while
continuing to meet the expectations of the shareholders, employees and suppliers. The Company’s exploration activities
are currently subject to significant environmental regulation under laws of the Commonwealth and Western Australia. The
Group aims to ensure that the highest standard of environmental care is achieved, and that it complies with all relevant
environmental legislation.
As at the date of this report, the Group is not aware of any significant breaches of those environmental requirements.
22
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Directors’ Report
Information on directors
Leigh Warnick
Non-Executive Chairman, Independent
Qualifications
B.A, LL.B, LL.M.
Appointed
23 December 2019
Experience
Mr Warnick is an experienced corporate and mining lawyer and a recognised expert in
corporate governance. Mr Warnick was formerly a partner of the law firms now known as
King & Wood Mallesons and Ashurst. Mr Warnick now practises as a barrister in Perth. Mr
Warnick has 19 years’ experience as a director or chairman of ASX listed companies.
Interest in Shares and Options Nil.
Current directorships
Former directorships held in
past three years
Nil.
Nil.
Marc Ducler
Managing Director
Qualifications
BSC (Metallurgy) WASM
Appointed
Experience
23 December 2019
Mr Ducler has over 20 years’ experience in the mining industry. For the past 17 years, Mr
Ducler has been in senior operational management roles with GoldFields, BHP, Fortescue
Metals, Mineral Resources and Roy Hill. Mr Ducler’s most recent role was as Managing
Director of Egan Street Resources Limited (a gold exploration and near-term developer),
until its successful takeover by Silver Lake Resources Limited (ASX: SLR).
Interest in Shares and Options Shares – 2,500,000
Performance Rights (Incentive) – 3,661,560
Performance Rights (Long Term Incentive) – 2,382,216
Current directorships
Nil.
Former directorships held in
past three years
Egan Street Resources Limited (ASX: EGA) – Managing Director
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
23
Directors’ Report
Information on directors (continued)
John Jones AM
Non-Executive Director
Appointed
Experience
9 February 1990
Mr Jones is a well-known and respected mining identity, who has been associated with a
number of successful mining corporations in his 45 years of business. Mr Jones has
previously been Chairman of North Kalgurli Mines, Jones Mining and Troy Resources
Limited. He is currently a director of Altan Rio Minerals Limited (TSXV: AMO.H) and Altan
Nevada Minerals Limited (TSXV: ANE). Mr Jones has a strong prospecting instinct, clear
strategic vision and a desire for exploration, mining and corporate success. He has been
a director of the Company since 1990.
Interest in Shares and Options Shares – 37,102,177
Options - $0.02 expiring 30-Nov-20 – 23,000,000
Options - $0.025 expiring 30-Nov-20 – 4,980,000
Options - $0.08 expiring 30-Nov-20 – 3,550,000
Current directorships
Troy Resources Limited – Non-Executive Director
Altan Rio Minerals Limited (TSXV:AMO) – Chairman
Altan Nevada Minerals Limited (TSXV:ANE) - Chairman
Former directorships held in
past three years
Tanga Resources Limited
Peter Stern
Non-Executive Director, Independent
Qualifications
Appointed
Experience
BSc (Hons), FAICD
28 November 2011
Mr Stern is a graduate of Monash University with a Bachelor of Science (geology
major). Mr Stern’s career has been in corporate advisory, spending six years with
Macquarie Bank and three years with both UBS and Deutsche Bank. In 2000, Mr Stern
established Metropolis Pty Ltd, a corporate advisory firm specialising in mergers and
acquisitions, capital raisings and proxy contests. Mr Stern is a Fellow of the Australian
Institute of Company Directors. Mr Stern is Non-Executive Chairman of Troy Resources
Limited.
Interest in Shares and Options Shares – 15,506,252
Options - $0.02 expiring 30-Nov-20 – 3,000,000
Options - $0.025 expiring 30-Nov-20 – 2,000,000
Options - $0.08 expiring 30-Nov-20 – 1,700,000
Current directorships
Troy Resources Limited - Chairman (Non-Executive)
Former directorships held in
past three years
Entek Energy Limited (ASX: ETE) – Non-executive director
Altan Nevada Minerals Limited (TSXV:ANE) – Non-executive director
24
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Directors’ Report
Information on directors (continued)
David Varcoe
Non-Executive Director, Independent
Qualifications
B.Eng (Mining)
Appointed
Experience
28 November 2019
Mr Varcoe is a mining engineer with more than 30 years’ experience in the industry. Mr
Varcoe has extensive operational and managerial experience across a number of
commodities including gold, iron ore, copper, diamonds, coal, uranium and rare earths. Mr
Varcoe is experienced in board positions, operations management as well as project
management and consulting. Mr Varcoe is a principal consultant with leading Australian
firm AMC Consulting.
Interest in Shares and Options Options - $0.135 expiring 27-Nov-22 – 3,000,000
Current directorships
Former directorships held in
past three years
Nil.
Nil.
Directors’ meetings
The number of Directors’ meetings and number of meetings attended by each of the Directors of the Company during the
period are:
Number of
meetings director
eligible to attend
Number of
meetings director
attended
3
3
11
11
8
8
3
3
0
3
3
11
10
8
8
3
3
0
Director
Mr Leigh Warnick
Mr Marc Ducler
Mr John Jones
Mr Peter Stern
Mr David Varcoe
Mr Graeme Smith
Mr Andrew Barclay
Mr Matthew Hardisty
Mr David Sanders
Company secretary
Brendon Morton was appointed as Company Secretary and Chief Financial Officer on 13 January 2020, following the
resignation of Graeme Smith. Mr Morton holds a Bachelor of Business Degree and is a member of both the Institute of
Chartered Accountants Australia (ICAA) and the Governance Institute of Australia. Mr Morton has previously held Company
Secretarial and Chief Financial Officer roles with both ASX listed and unlisted public and private companies.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
25
Directors’ Report
Financial position
The net assets of the consolidated Group have increased to $11,508,614 (2019: $5,743,454). The Group’s working capital,
being current assets less current liabilities was $3,201,711 at 30 June 2020 (2019: deficit of $44,121).
Unissued shares under option
Unissued ordinary shares of Anglo Australian Resources NL under option at the date of this report are as follows:
Tranche
Grant date
Expiry date
A
B
C
D
E
F
G
H
I
30-Nov-15
25-Aug-16
8-Dec-16
29-Aug-17
2-Dec-19
2-Dec-19
2-Dec-19
6-Aug-20
6-Aug-20
30-Nov-20
30-Nov-20
30-Nov-20
30-Nov-20
27-Nov-22
27-Nov-22
27-Nov-22
31-Dec-21
31-Dec-22
Total unlisted options on issue at the date of this report
Securities granted during the year
Exercise
price
$0.02
$0.025
$0.04
$0.08
$0.135
$0.135
$0.135
$0.133
$0.15
Number
29,800,000
10,100,000
2,500,000
8,950,000
1,000,000
1,000,000
1,000,000
1,250,000
1,250,000
56,850,000
Options over ordinary shares granted during the year as share based payments are as follows:
Tranche
Class of
securities
Grant date
Number of
securities
Exercise price
Expiry
date
Vesting date
E
F
G
Director Options
2 Dec 2019
1,000,000
Director Options
2 Dec 2019
1,000,000
Director Options
2 Dec 2019
1,000,000
$0.135
$0.135
$0.135
27 Nov 2022
2 Dec 2019
27 Nov 2022
27 Nov 2020
27 Nov 2022
27 Nov 2021
Performance rights granted during the year as share based payments are as follows:
Tranche
Class of
Securities
Grant
Date
Number of
Securities
Exercise Price
Expiry
Date
Disposal
Restriction
A
B
C
D
Director
performance rights
23-Jun-20 1,830,780
Director
performance rights
23-Jun-20 1,830,780
23-Jun-20 5,340,075
Employee /
consultant
performance rights
Employee /
consultant
performance rights
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
23-Jun-24 Non-transferable
23-Jun-24 Non-transferable
23-Jun-24 Non-transferable
23-Jun-20 5,340,074 Nil – performance rights vest and are
23-Jun-24 Non-transferable
converted to ordinary shares on
achievement of performance
conditions
Refer to Note 22 for details of these performance rights.
26
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Directors’ Report
Insurance of Officers
During the year, Anglo Australian Resources NL paid a premium to insure the directors and officers of the Group. The
contract of insurance prohibits disclosure of the nature of the liability insured and the amount of the premium.
Proceedings on behalf of the group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility
on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of
the Corporations Act 2001.
Non-audit services
The Group appointed BDO Audit WA Pty Ltd as auditor on 2 July 2020, replacing Elderton Audit Pty Ltd.
The Group may decide to employ its auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Group is important.
During the year there were no fees paid or payable for non-audit services provided by either auditor of the Group (2019:
nil).
Auditor’s Independence Declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out
on the page following this Directors’ Report.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
27
Directors’ Report
Remuneration Report - Audited
The remuneration report outlines the remuneration arrangements which were in place during the year and remain in
place as at the date of this report, for the Directors and key management personnel of Anglo Australian Resources NL.
The information provided in this remuneration has been audited as required by section 308(3C) of the Corporations Act
2001.
The remuneration report is set out under the following main headings:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Key management personnel (KMP) covered in this report
Remuneration policy and link to performance
Elements of remuneration
Link between remuneration and performance
Remuneration expenses for executive KMP
Contractual arrangements for executive KMP
Non-executive director arrangements
Other statutory information
(a) Key management personnel (KMP) covered in this report
Figure 12: Directors (executive and non-executive)
Name
Mr Leigh Warnick
Mr Marc Ducler
Mr John Jones
Mr Peter Stern
Mr David Varcoe
Mr Graeme Smith
Mr Andrew Barclay
Mr Matthew Hardisty
Mr David Sanders
Position
Chairman (from 23 December 2019)
Managing Director (from 23 December 2019)
Executive Chairman (1 July 2019 to 22 December 2019)
Non-Executive Director (from 23 December 2019)
Non-Executive Director
Non-Executive Director (from 28 November 2019)
Non-Executive Director (to 23 December 2019)
Non-Executive Director (13 December 2019 to 23 December 2019)
Non-Executive Director (13 December 2019 to 23 December 2019)
Non-Executive Director (27 November 2019 to 28 November 2019)
Figure 13: Other key management personnel
Name
Jed Whitford
Brendon Morton
Julie Reid
Position
General Manager Projects & Business Development (from 13 January 2020)
Chief Financial Officer & Company Secretary (from 24 December 2019)
Geology Manager (from 2 January 2020)
(b) Remuneration policy and link to performance
The objective of the Company’s remuneration structure is to reward and incentivise key management personnel and
employees to ensure alignment with the interests of shareholders. The remuneration structure also seeks to reward key
management personnel and employees for their contribution to the Company in a manner that is appropriate for a company
at this stage of its development.
The full Board performs the function of the remuneration committee. The Board reviews and determines remuneration
policy and structure annually to ensure it remains aligned to the Company’s needs and meets the Company’s remuneration
principles. The Board, from time to time, may engage external remuneration consultants to assist with his review.
(c) Elements of remuneration
Fixed annual remuneration
Key management personnel receive their base pay and statutory benefits structured as a total fixed remuneration (TFR)
package. Base pay for key management is reviewed annually to ensure the remuneration is competitive with the market
and remains appropriate for the Company and its operations.
There are no guaranteed base pay increases included in any employment contracts.
28
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Directors’ Report
Remuneration Report - Audited
Short term incentives
Any payment of short-term incentives is at the Board’s absolute discretion. Due to the nature of the Company’s operations
and the stage of development, the Company has not paid any short-term incentives, nor has any formal short-term incentive
scheme been adopted.
Long term incentives
Options
Options are issued at the Board’s discretion. Other than the options disclosed in section (h) of this Remuneration Report,
there were been no other options issued to employees during the year. The options issued are recognised as an expense
over the vesting period.
Performance Rights
During the year, the Company issued incentive Performance Rights to key management personnel and employees. The
performance rights have nil exercise prices and have an expiry date of 30 June 2024. The Performance Rights will convert
to ordinary shares on satisfaction of performance criteria/vesting conditions as detailed in Note 22 to the Consolidated
Financial Statements.
(d) Link between remuneration and performance
Remuneration of executives consists of an un-risked element (base pay) and long-term incentives (performance rights)
which vest upon the satisfaction of performance criteria, based on key strategic, non-financial measures linked to drivers
of performance in future reporting periods. The Company did not pay any short-term incentives (e.g. cash bonuses) during
the year (2019: nil).
The Group’s summary key performance information, including earnings and movement in shareholder wealth for the five
(5) years to 30 June 2020 is included at Figure 14 below:
Figure 14: Key performance indicators
Revenue
Net profit/(loss) before tax
Net profit/(loss) after tax
Share price at start of year
Share price at end of year
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
30 June 2020
30 June 2019
30 June 2018
30 June 2017
30 June 2016
66,178
(2,710,042)
(2,710,042)
0.064
0.140
(0.67)
(0.67)
6,309
(656,006)
(656,006)
0.092
0.064
(0.20)
(0.20)
5,491
(920,462)
(920,462)
0.040
0.092
(0.32)
(0.32)
15,431
(517,148)
(517,148)
0.012
0.040
(0.22)
(0.22)
11
(393,790)
(393,790)
0.010
0.012
(0.23)
(0.23)
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
29
Directors’ Report
Remuneration Report - Audited
(e) Remuneration expenses for executive KMP
Details of the remuneration expense recognised for the Group’s key management personnel during the current and
previous financial year in accordance with the requirements of the accounting standards is included below at Figure 15.
Figure 15: Executive remuneration
Fixed remuneration
Variable remuneration
Name
Year
Salary
Post-
employment
benefits
Other1
Cash bonus
Rights /
Options
Options
Total
117,577
10,501
Executive directors
M. Ducler
(from 23/12/19)
J. Jones
(to 23/12/19)
2020
2019
2020
2019
Other key management personnel
J. Whitford
(from 13/01/20)
B. Morton
(from 24/12/19)
J. Reid
(from 02/01/20)
Total executive
director and other
KMP
Total NED
remuneration (see
Figure 16 below)
Total KMP
remuneration
expensed
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
-
52,635
110,000
92,067
-
67,825
-
80,853
-
410,957
110,000
165,887
100,000
576,844
210,000
-
-
-
8,746
-
6,443
-
7,681
-
-
-
40,000
-
-
-
-
-
-
-
33,371
40,000
-
-
-
33,371
-
-
30,000
50,000
70,000
50,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,184
-
-
-
2,118
-
1,947
-
1,525
-
7,774
-
67,046
-
74,820
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
130,262
-
92,635
110,000
102,931
-
76,215
-
90,059
-
492,102
110,000
262,933
150,000
755,035
260,000
1 – Includes fees invoiced in addition to directors’ fees. Fees were settled against the exercise price of options exercised
during November 2019.
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Executive Directors
M. Ducler
J. Jones
Other key management personnel
J. Whitford
B. Morton
J. Reid
Fixed
remuneration
2020
Performance based
remuneration
2020
98%
100%
98%
97%
98%
2%
0%
2%
3%
2%
30
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Directors’ Report
Remuneration Report - Audited
(f) Contractual arrangements for executive KMP
The executive remuneration framework is summarised in the table below:
Component
Managing Director
Other Key Management Personnel
Fixed remuneration
$271,003
Range between $197,000 and $271,002
Short term incentive (STI)
Company may invite the employee to participate at its sole discretion
Long term incentive (LTI)
Company may invite the employee to participate at its sole discretion
Contract duration
Ongoing contract
Ongoing contract
Notice by the individual/company
6 months
3 months
Remuneration Report - Audited
(g) Non-executive director arrangements
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of, the
directors. Non-executive directors’ fees and payments are reviewed annually by the board taking into account comparable
roles and market data. The Chair’s fees are determined independently to the fees of non-executive directors based on
comparative roles in the external market.
Non-executive Directors do not receive performance-based pay.
Non-executive Directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically
recommended for approval by shareholders. The maximum currently stands at $300,000 per annum and was approved by
shareholders at the Annual General Meeting held 27 November 2017.
Additional fees
A director may also be paid fees or other amounts as the Directors determine if a Director performs special duties or
otherwise performs services outside the scope of the ordinary duties of a Director.
A director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.
Post-employment benefits
Superannuation contributions required under the Australian Superannuation Guarantee Legislation continue to be made
and are deducted from the directors’ overall fee entitlements, where applicable.
The following non-executive director fees applied during the period:
Base Fees
Non-executive chair
Non-executive directors
23 Dec 2019 to
30 June 2020
$
1 July 2019 to
22 Dec 2019
$
1 July 2018 to 30
June 2019
$
70,000
50,000
-
50,000
-
50,000
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
31
Directors’ Report
Remuneration Report - Audited
Figure 16: Non-executive director remuneration
Name
Year
Base fees
Post-
employment
benefits
Options
Additional fees1
Total
L. Warnick
(from 23/12/19)
P. Stern
D. Varcoe
(from 27/11/19)
J. Jones
(from 23/12/19)
G. Smith
(to 23/12/19)
Total non-executive
director remuneration
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
36,720
-
50,000
50,000
29,167
-
26,075
-
23,925
50,000
165,887
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
67,046
-
-
-
-
-
-
-
30,000
50,000
-
-
-
-
-
-
67,046
30,000
36,720
-
80,000
100,000
96,213
-
26,075
-
23,925
50,000
262,933
2019
150,000
1 – Includes fees invoiced in addition to directors’ fees. Fees were settled against the exercise price of options exercised
during November 2019.
Other non-executive directors, David Sanders, Matthew Hardisty and Andrew Barclay did not receive any remuneration for
the year (2019: nil).
100,000
50,000
-
-
(h) Other statutory information
(i) Terms and conditions of the share-based payment arrangements
Options
The terms and conditions of each grant of unquoted options granted during the year are as follows:
Tranche
Class of Securities
Grant Date
Number of
Securities
Exercise Price
Expiry
Date
Vesting Date
A
B
C
Director Options
02-Dec-19
1,000,000
$0.135
27 Nov 2022
Immediate
Director Options
02-Dec-19
1,000,000
$0.135
27 Nov 2022
27 Nov 2020
Director Options
02-Dec-19
1,000,000
$0.135
27 Nov 2022
27 Nov 2021
In order for the Director Options to vest, the Director must remain a director as at the Vesting Date.
The Options were valued using a Black Scholes Model with the following inputs:
Tranche
Valuation Date
Expected
Volatility
Risk-Free
Interest Rate
Expiry
Underlying
Share Price
A
B
C
02-Dec-19
02-Dec-19
02-Dec-19
80%
80%
80%
0.70%
0.70%
0.70%
27 Nov 2022
27 Nov 2022
27 Nov 2022
$0.088
$0.088
$0.088
Value per
Options
($)
0.0359
0.0359
0.0359
Total
Value
($)
35,909
35,909
35,909
Subject to the Board’s discretion, options shall be cancelled for nil consideration where the recipient ceases to hold
employment or office with the Company.
32
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Directors’ Report
Remuneration Report - Audited
Performance Rights
The terms and conditions of performance rights granted during the year as share based payments are as follows:
Tranche Class of Securities
Grant Date
Number of
Securities
Exercise Price
Expiry
Date
Disposal
Restriction
A
B
C
D
Director performance
rights
16-Jun-20
1,830,780
Nil – performance rights vest and are
converted to ordinary shares on achievement
of performance conditions
23-Jun-24
Non-transferable
Director performance
rights
16-Jun-20
1,830,780
Nil – performance rights vest and are
converted to ordinary shares on achievement
of performance conditions
23-Jun-24
Non-transferable
Employee / consultant
performance rights
23-Jun-20
3,904,987
Nil – performance rights vest and are
converted to ordinary shares on achievement
of performance conditions
23-Jun-24
Non-transferable
Employee / consultant
performance rights
23-Jun-20
3,904,986
Nil – performance rights vest and are
converted to ordinary shares on achievement
of performance conditions
23-Jun-24
Non-transferable
The performance rights shall vest on the later date to occur of:
a) on which the milestones shown in the table below are met; and
Tranches
Performance / Vesting Condition and Performance Period
Extent to which
Performance Rights vest
A,C
B,D
Automatically vest upon the Company announcing a JORC
compliant Mineral Resource of at least 500,000 ounces.
Automatically vest upon the Company announcing a JORC
compliant Mineral Resource of at least 1,000,000 ounces.
100%
100%
b)
the date that the holder gives a notice to the Company confirming that the holder would like the Performance Rights
to vest.
The performance rights issued are subject to non-market vesting conditions. The performance rights were valued based
upon the share price at the deemed grant date.
Tranche
A
B
C
D
Grant
Date
16-Jun-20
16-Jun-20
23-Jun-20
23-Jun-20
Number of Instruments
Valuation at grant date
1,830,780
1,830,780
3,904,987
3,904,986
$0.125
$0.125
$0.15
$0.15
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
33
Directors’ Report
Remuneration Report - Audited
(ii) Reconciliation of options, deferred shares and ordinary shares held by KMP
The number of options over ordinary shares in the Group held during the period by each Director of Anglo Australian
Resources NL and other key management personnel of the Group, including their personally related parties, are set out
below.
Figure 17: Option holdings
Granted as
compensat
ion
Vested
Number
%
Exercised
Exercise
price per
option
Other
changes
Balance at
the start of
the year
Vested
45,230,000
11,800,000
10,700,000
Name
J. Jones
P. Stern
G. Smith
D. Varcoe
-
-
-
-
-
-
-
-
-
(13,700,000)
(5,100,000)
(3,200,000)
-
3,000,000
1,000,000
33%
-
Total
67,730,000
3,000,000
1,000,000
(22,000,000)
Balance at the end of the
year
Vested and
exercisable
31,530,000
6,700,000
-
-
Unvested
-
-
-
(7,500,000)
-
-
1,000,000
2,000,000
(7,500,000)
39,230,000
2,000,000
$0.02
$0.02
$0.02
-
$0.02
The numbers of shares in the Group held during the period by each Director of Anglo Australian Resources NL and other
key management personnel of the Group, including their personally related parties are set out below. There were no
shares granted during the reporting period as compensation.
Figure 18: Shareholdings
Name
Balance at the
start of the year
Balance at
appointment/
(resignation
date)
Capital Raising
shares
subscribed for
Shares issued
upon exercise of
options
Other changes
Balance at the
end of the year
Directors
Mr Leigh Warnick
Mr Marc Ducler
Mr John Jones
Mr Peter Stern
Mr David Varcoe
Mr Graeme Smith
Other key management
personnel
Mr Jed Whitford
Mr Brendon Morton
Ms Julie Reid
Total
-
-
24,752,177
9,706,252
-
-
-
-
-
-
5,082,999
(8,282,999)
-
2,500,000
-
-
-
-
-
2,500,000
-
-
-
-
13,700,000
(1,350,000)
37,102,177
5,100,000
700,000
15,506,252
-
3,200,000
-
-
-
-
-
-
10,000
-
-
-
100,000
310,000
100,000
-
-
-
-
-
-
100,000
300,000
100,000
39,541,428
(8,282,999)
3,000,000
22,000,000
(640,000)
55,618,429
There were no shares subject to escrow at 30 June 2020.
The number of performance rights over ordinary shares in the Group held during the period by each Director of Anglo
Australian Resources NL and other key management personnel of the Group, including their personally related parties,
are set out below.
Figure 19: Performance Rights
Name
Balance at
the start of
the year
Granted as
compensatio
n
Exercised/
Expired
Balance at
appointment/
(resignation
date)
Balance at
end of the
year
Vested and
exercisable
Un-vested
Directors
Mr Marc Ducler
Other key
management
personnel
Mr Jed Whitford
Mr Brendon Morton
Ms Julie Reid
Total
-
-
-
-
-
3,661,560
2,958,988
2,720,589
2,130,440
11,471,577
-
-
-
-
-
-
-
-
-
-
3,661,560
2,958,988
2,720,589
2,130,440
11,471,577
-
-
-
-
-
3,661,560
2,958,988
2,720,589
2,130,440
11,471,577
34
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Directors’ Report
Remuneration Report - Audited
(iii) Key Management Personnel Loans
During the year, the Company incurred expenditure on behalf of director, Mr John Jones totalling $30,347. By agreement
between the Company and Mr Jones, the amount was fully extinguished by being offset against directors’ fees owing to
Mr. Jones at 30 June 2020.
There were no loans to or from key management personnel outstanding as at 30 June 2020 (2019: nil).
(iv) Other transactions with key management personnel
Westbury Management Services Pty Ltd, a company of which John Jones is a Director, received $940.92 excluding GST
(2019: $612.12) during the year for storage services. These services were provided on normal commercial terms and at
arm’s length. As at 30 June 2020, $0 (2019: $0) remained outstanding.
Metropolis Pty Ltd, a company of which Peter Stern is a Director, received $105,000 excluding GST (2019: $0) during the
year of which $50,000 related to non-executive director fees (2019: $50,000), $30,000 related to invoices raised for
additional services (2019: $50,000) and $25,000 related to accrued directors’ fees owing at 30 June 2019. The additional
services were provided on normal commercial terms and at arm’s length. As at 30 June 2020, $0 (2019: $25,000) remained
outstanding. Consideration of $80,000 was deployed to exercise 4,000,000 $0.02 options expiring 30 November 2019.
Wembley Corporate Pty Ltd, a company of which Graeme Smith is a Director, received $85,143 excluding GST (2019:
$45,700) during the year for directors’ fees, company secretarial and accounting services. These services were provided
on normal commercial terms and at arm’s length. As at 30 June 2020, $0 (2019: $0) remained outstanding. Consideration
of $23,638 was deployed to exercise 1,181,940 $0.02 options expiring 30 November 2019, with the balance of the
consideration paid in cash.
Andrew Barclay & Associates, an entity associated with Andrew Barclay, received $60,270 excluding GST during the year
for legal services provided to the Company. These services were provided on normal commercial terms and at arm’s
length. As at 30 June 2020, $0 remained outstanding.
Bennett + Co, an entity associated with David Sanders, received $244,807 excluding GST during the year for legal services
provided to the Company. These services were provided on normal commercial terms and at arm’s length. As at 30 June
2020, $0 remained outstanding.
Tanga Resources Limited, a company of which Graeme Smith is an officer, paid $28,605 excluding GST (2019: $50,334)
to the Company during the year for rent, carpark and outgoings at 63 Hay Street, Subiaco. These services were provided
to Tanga Resources Limited on normal commercial terms and at arm’s length. As at 30 June 2020, $0 (2019: $0) remained
outstanding.
Settlement Agreement
By notice dated 29 October 2019, Braham Investments Pty Ltd (ACN 092 139 403) requisitioned a meeting of the
Company’s shareholders, which was to be held on 20 December 2019 (or an adjourned date) (the Requisitioned
Meeting). On 28 November 2019, Anglo Australian commenced proceeding number COR 232 of 2019 in the Supreme
Court of Western Australia (Proceeding) against a number of the Company’s shareholders.
On 23 December 2019, the Company announced that it had entered into a Settlement Agreement with the parties involved
in the Requisitioned Meeting and Proceeding (together, the Settlement Agreement Parties). Under the terms of the
Settlement Agreement, the Settlement Agreement Parties agreed to fully and finally settle the Proceeding and all possible
disputes arising out of or in connection with the Proceeding or the Requisitioned Meeting, subject to a number of terms,
one of which involved the Company settling defendants’ costs of $453,250, via a combination of cash ($16,500) and equity
($436,750). In accordance with the terms of the Settlement Agreement, on 2 March 2020, 4,367,500 fully paid ordinary
shares were issued to the Settlement Agreement Parties at a deemed issued price of $0.10 per share.
Amounts paid to the Settlement Agreement Parties included the following related party transactions:
▪
▪
$10,000 was paid to Peter Stern on 22 January 2020; and
700,000 fully paid ordinary shares were issued to Peter Stern on 2 March 2020, at a deemed issue price of $0.10
per share.
(v) Remuneration consultants
The Remuneration Committee may, from time to time, engage independent remuneration consultants to assist with the
review of the Company’s remuneration policy and structure to ensure it remains aligned to the Company’s needs and
meets the Company’s remuneration principles.
The Company engaged an external human resource consultant during the year, which included advice with respect to
remuneration.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
35
Directors’ Report
Remuneration Report - Audited
(vi) Voting of shareholders at the Company’s 2019 Annual General Meeting
The Company received more than 98% 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.
This is the end of the Remuneration Report.
This report of Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of Directors.
Marc Ducler
Managing Director
Perth, Western Australia
25 September 2020
36
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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 DEAN JUST TO THE DIRECTORS OF ANGLO AUSTRALIAN
RESOURCES NL
As lead auditor of Anglo Australian Resources NL 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 Anglo Australian Resources and the entities it controlled during the
period.
Dean Just
Partner
BDO Audit (WA) Pty Ltd
Perth, 25 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.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
37
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 Anglo Australian Resources NL
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Anglo Australian Resources NL (the Company) and its
subsidiaries (the Group), which comprises the consolidated balance sheet 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.
38
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Accounting for Share Based Payments
Key audit matter
How the matter was addressed in our audit
During the financial year ended 30 June 2020,
the Group issued options, shares and
performance rights to key management
personnel and other stakeholders.
Refer to Note 1(u) of the financial report for a
description of the accounting policy and
significant estimates and judgements applied to
these arrangements and Note 22 of the financial
report for disclosure of the arrangements.
Share-based payments are a complex
accounting area and due to the complex and
judgemental estimates used in determining the
fair value of the share-based payments in
accordance with AASB 2 Share Based Payment,
we consider the Group’s calculation of the
share-based payments expense to be a key
audit matter.
Our procedures included, but were not limited to:
·
·
·
·
·
·
·
Reviewing market announcements and
board minutes to identify new share-based
payments granted during the year have
been accounted for;
Reviewing the relevant supporting
documentation to obtain an understanding
of the contractual nature and terms and
conditions of the share-based payments
arrangements;
Evaluating management’s methodology for
calculating the fair value of the share-
based payments, including assessing the
valuation inputs using internal specialists
where required;
Recalculating estimated fair value of the
share based payments using relevant
valuation methodologies;
Assessing the allocation of the share-
based payment expense over
management’s expected vesting period;
Assessing management’s determination of
achieving milestones; and
Assessing the adequacy of the related
disclosures in Notes 1(u) and 22 of the
financial report.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
39
Recoverability of Exploration and Evaluation Expenditure
Key audit matter
How the matter was addressed in our audit
At 30 June 2020 the Group held a significant
carrying value of capitalised exploration and
evaluation expenditure as disclosed in Note
12.
As the carrying value of these exploration and
evaluation assets represent a significant asset
of the Group, we considered it necessary to
assess whether any facts or circumstances
exist to suggest that the carrying amount of
this asset may exceed its recoverable amount.
Judgement is applied in determining the
treatment of exploration expenditure in
accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources. In particular:
· Whether the conditions for
capitalisation are satisfied;
· Which elements of exploration and
evaluation expenditures qualify for
recognition; and
· Whether facts and circumstances
indicate that the exploration and
evaluation assets should be tested for
impairment.
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 respective areas
of interest by holding discussions with
management, and reviewed the Group’s
exploration budgets, ASX announcements
and director’s 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 1(m) and 12.
·
·
·
·
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.
Other matter
The financial report of Anglo Australian Resources NL, for the year ended 30 June 2019 was audited by
another auditor who expressed an unmodified opinion on that report on 30 September 2019.
40
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
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 28 to 36 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Anglo Australian Resources NL, 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
Dean Just
Director
Perth, 25 September 2020
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
41
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2020
Revenue from continuing operations
Other income
Share based payment expense
Consultants and advisors
Corporate costs
Depreciation and amortisation expense
Employee benefit expense
Exploration expenditure not capitalised
General and administrative expenses
Impairment expense
Interest expense
Loss on financial liabilities settled via equity
Occupancy costs
Loss before income tax
Income tax expense
Net loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive loss for the year, net of tax
Note
2020
$
2019
$
4
5
5
5
12
6
66,178
6,309
(76,874)
(1,013,816)
(416,023)
(72,951)
(319,562)
(61,842)
(234,097)
(457,480)
(4,946)
(108,881)
(9,748)
(2,710,042)
-
(2,710,042)
-
-
-
(32,000)
(76,202)
(323,428)
(4,765)
(14,400)
-
(94,208)
21,802
(37)
-
(95,474)
(656,006)
-
(656,006)
-
-
-
Total comprehensive loss for the year
(2,710,042)
(656,006)
Total comprehensive loss attributable to equity holders of
the Company
(2,710,042)
(656,006)
Loss per share attributable to ordinary equity holders
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
7
7
(0.67)
(0.67)
(0.20)
(0.20)
The above consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
accompanying notes.
42
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Consolidated Balance Sheet
Consolidated Balance Sheet
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation expenditure
Right of use assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Employee benefits
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2020
$
2019
$
9
10
11
12
13
14
15
16
16
17
18
19
3,401,903
307,919
3,709,822
60,002
8,281,952
101,494
8,443,448
12,153,270
407,119
62,627
57,365
527,111
46,705
89,840
136,545
663,656
11,489,614
448,919
159,183
608,102
-
5,873,285
-
5,873,285
6,481,387
646,654
5,569
-
652,223
-
85,710
85,710
737,933
5,743,454
43,575,908
1,089,936
(33,176,230)
11,489,614
35,292,993
916,649
(30,466,188)
5,743,454
The above consolidated statement of financial position is to be read in conjunction with the accompanying notes.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
43
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Note
20
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Net cash flows used in operating activities
Cash flows from investing activities
Exploration and evaluation expenditure
Payments for property, plant and equipment
Interest received
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Interest paid
Repayment of principal portion of lease liabilities
Capital raising costs
Net cash flows from financing activities
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
9
2020
$
2019
$
(22,178)
(1,251,798)
(1,273,976)
(2,913,091)
(62,259)
3,678
(2,971,672)
7,528,906
(311)
(72,754)
(257,209)
7,198,632
2,952,984
448,919
3,401,903
(496,905)
-
(496,905)
(1,789,065)
(4,765)
6,309
(1,787,521)
1,220,801
-
-
(111,241)
1,109,560
(1,174,866)
1,623,785
448,919
The above consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
44
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
Issued capital
$
Share-based
payment reserve
$
Accumulated
losses
$
Total
$
Balance at 1 July 2018
Loss for the year
Total comprehensive loss for the
year
33,951,434
-
-
916,649
-
(29,810,182)
(656,006)
5,057,901
(656,006)
(656,006)
(656,006)
Transactions with owners,
directly recorded in equity:
Issue of ordinary shares (net of
costs)
Issue/vesting of options
Balance at 30 June 2019
1,341,559
-
-
-
-
-
1,341,559
-
35,292,993
916,649
(30,466,188)
5,743,454
Issued capital
$
Share-based
payment reserve
$
Accumulated
losses
$
Total
$
Balance at 1 July 2019
Loss for the year
Total comprehensive loss for the
year
35,292,993
-
-
Transactions with owners,
directly recorded in equity:
Issue of ordinary shares (net of
costs)
Issue/vesting of performance
rights
Issue/vesting of options
Balance at 30 June 2020
8,282,915
-
-
43,575,908
916,649
-
(30,466,188)
(2,710,042)
5,743,454
(2,710,042)
-
-
9,828
163,459
1,089,936
(2,710,042)
(2,710,042)
-
-
-
(33,176,230)
8,282,915
9,828
163,459
11,489,614
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
45
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below.
These policies have been consistently applied to the period presented, unless otherwise stated. These financial statements
are for the consolidated Group consisting of Anglo Australian Resources NL and its subsidiaries, together referred to as
Anglo or the Group.
(a) New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees
eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of low-
value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial
position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use
assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in finance
costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation in profit
or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating activities
and the principal portion of the lease payments are separately disclosed in financing activities. For lessor accounting,
the standard does not substantially change how a lessor accounts for leases.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been
restated. The impact of adoption of AASB16 was not material to the financial statements.
When adopting AASB 16 from 1 July 2019, the Group has applied the following practical expedients:
▪ Applying a single discount rate to the portfolio of leases with reasonably similar characteristics;
▪ Accounting for leases with a remaining lease term of 12 months as at 1 July 2019 as short-term leases;
▪ Excluding any initial direct costs from the measurement of right-of-use assets;
▪ Using hindsight in determining the lease term when the contract contains options to extend or terminate the
lease; and
▪ Not apply AASB 16 to contracts that were not previously identified as containing a lease.
(b) Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Interpretations and other authoritative pronouncements issued by the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001 (Cth).
Anglo Australian Resources NL is a listed public company, incorporated and domiciled in Australia. Anglo Australian
Resources NL is a for-profit entity for the purpose of preparing the financial statements.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial
report containing relevant and reliable information about transactions, events and conditions. Compliance with
Australian Accounting Standards ensures that the financial statements and notes also comply with International
Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of this
financial report are presented below and have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
An individual entity is no longer presented as the consequence of a change to the Corporations Act 2001. Financial
information for Anglo Australian Resources NL as an individual entity is included in Note 29.
(c) Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Anglo Australian
Resources NL (‘’the Company’’ or ‘’the Parent Entity’’) as at 30 June 2020 and the results of all subsidiaries for the
period then ended. Anglo Australian Resources NL and its subsidiaries together are referred to in this financial report
as “the Group” or “the consolidated entity”.
46
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
Subsidiaries are all 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 involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group.
Intercompany transactions, intercompany balances and unrealised gains on transactions between Group companies
are eliminated. Unrealised losses are also eliminated unless the transaction proves evidence of the impairment of the
asset transferred. 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 Changes in Equity, and Consolidated
Balance Sheet respectively.
(d) Going concern
This financial report has been prepared on the going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and settlement of liabilities in the normal course of business.
As at 30 June 2020, the Group had cash and cash equivalents of $3,401,903 and had net working capital of
$3,182,711. The Group incurred a loss for the year ended 30 June 2020 of $2,710,042 (30 June 2019: $656,006)
and net cash outflows used in operating activities and investing activities totalling $4,245,648 (30 June 2019:
$2,284,426).
On 18 September 2020, the Company announced that it had raised $11 million via the issue of approximately 64.7
million fully paid ordinary shares at $0.17 per share (the Placement). Proceeds from the placement (net of costs)
have been received and fully paid ordinary shares have been issued as at the date of this report.
On 18 September 2020, the Company also announced that it would undertake a non-underwritten Share Purchase
Plan (SPP) to raise up to $3 million at an issue price of $0.17. The SPP offer opens for acceptance on 25 September
2020. No proceeds from the SPP have been collected as at the date of this report.
The Company has a total of 51,350,000 unlisted options on issue expiring on 30 November 2020 with various exercise
prices ranging from $0.02 to $0.08. Assuming that all options expiring on 30 November 2020 are exercised, the
Company will receive proceeds of $1,664,500.
On the basis of the above, the directors believe that, as at the date of this report, there will be sufficient funds available
to meet the Group’s working capital requirements.
(e) Operating segments
Operating segments are presented using the ‘management approach’, where the information presented is on the
same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM are
responsible for the allocation of resources to operating segments and assessing their performance.
(f) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade
discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is
discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference
between the amount initially recognised and the amount ultimately received is interest revenue.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the
rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been
established.
All revenue is stated net of the amount of goods and services tax (GST).
(g) Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match
them with the costs that they are intended to compensate.
(h)
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
47
Notes to the Consolidated Financial Statements
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:
▪ When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
▪ When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
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.
The carrying amounts of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will
be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to
the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Anglo Australian Resources NL (the 'head entity') and its wholly-owned Australian subsidiaries have formed an
income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax
consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group
has applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate
to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each
subsidiary in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that
the intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting
in neither a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
(i) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is
held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is
no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
(j) Cash and cash equivalents
For cashflow statement presentation, cash and cash equivalents include cash on hand, deposits held at call with
financial institutions, other short-term highly liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of change in rate and bank
overdrafts.
(k) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected
loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
48
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
(l) Property, plant and equipment
All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or
losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting
period in which they are incurred.
Depreciation on assets is calculated using the straight-line method to allocate their cost or re-valued amounts, net of
their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased
plant and equipment, the shorter lease term as follows:
▪ Vehicles: 5 - 8 years
▪
▪
Furniture, fittings and equipment: 3 - 8 years
Field equipment: 3 - 8 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are included in profit or loss.
(m) Exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current
is carried forward as an asset in the statement of financial position where it is expected that the expenditure will be
recovered through the successful development and exploitation of an area of interest, or by its sale; or exploration
activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of
the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been
abandoned, the expenditure incurred thereon is written off in the year in which the decision is made.
(n) Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except
where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing
the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to
impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases
with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
(o)
Impairment of assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use
is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to
the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are
grouped together to form a cash-generating unit.
(p) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid within 30 days of recognition.
(q) Contributed equity
Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities.
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. Where any Group company purchases the Company’s equity instruments, for example as
the result of a share buy-back or a share-based payment plan, the consideration paid, including any directly
attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of Anglo
Australian Resources NL as treasury shares until the shares are cancelled or reissued. Where such ordinary shares
are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs
and the related income tax effects, is included in equity attributable to the owners of Anglo Australian Resources NL.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
49
Notes to the Consolidated Financial Statements
(r) Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments
comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index
or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when
the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability
is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying
amount of the right-of-use asset is fully written down.
(s) Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed
in the period in which they are incurred.
(t) Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event,
it is probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount
of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability.
The increase in the provision resulting from the passage of time is recognised as a finance cost.
(u) Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to
be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The liabilities for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided by
employees up to the reporting date using the projected unit credit method. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to eligible employees. Equity-settled transactions are
awards of performance rights or options over shares, that are provided to employees in exchange for the rendering
of services. The cost of equity-settled transactions are measured at fair value on grant date.
(i) Options
The fair values of options are independently determined using either the Binomial or Black-Scholes option pricing
models. The calculation of fair value for options takes into account the exercise price, the term of the option, the
impact of dilution, 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, together with non-vesting conditions that do not
determine whether the Group receives the services that entitle the employees to receive payment. No account is
taken of any other vesting conditions.
(ii) Performance rights
The fair value of performance rights with market-based performance and vesting criteria are independently
determined using the Hoadleys Hybrid ESO Model (a Monte Carlo simulation model). The calculation of fair value for
rights takes into account the term of the right, the share price at grant date, the expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the right, together with
non-vesting conditions that do not determine whether the Group receives the services that entitle the employees to
receive payment. An exercise multiple is applied based on a Hull-White Model which is considered the de facto
50
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
standard for IFRS 2 and FASB 123R compliant employee share option valuations. No account is taken of any other
vesting conditions.
The fair value of performance rights granted to employees for nil consideration under the Employee Incentive Plan is
recognised as an expense over the relevant service period, being the vesting period of the performance rights. The
fair value is measured at the grant date of the performance rights and is recognised in equity in the share-based
payment reserve.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award,
the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The
amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less
amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification had not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases
the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated
as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the
vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If an equity-settled award is cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the new award
is treated as a modification of the cancelled award.
(v) Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; and assumes that the transaction will take place
either in the principal market, or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on
its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date
and transfers between levels are determined based on a reassessment of the lowest level of input that is significant
to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is
either not available or when the valuation is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and
a comparison, where applicable, with external sources of data.
(w)
Issued capital
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.
(x) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Anglo Australian Resources
NL, 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
financial year.
Diluted earnings per share
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
51
Notes to the Consolidated Financial Statements
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
(y) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost
of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the Consolidated Statement of Cash Flows on a gross basis, except for the GST
components of investing and financing activities, which are disclosed as operating cash flows.
(z) Parent entity information
The financial information for the parent entity, Anglo Australian Resources NL, disclosed in Note 29 has been
prepared on the same basis as the consolidated financial statements.
(aa) Standards and Interpretations in use not yet adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2020. The
Group's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant
to the Group, are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020
and early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well
as new guidance on measurement that affects several Accounting Standards. Where the Group has relied on the
existing framework in determining its accounting policies for transactions, events or conditions that are not otherwise
dealt with under the Australian Accounting Standards, the Group may need to review such policies under the revised
framework. At this time, the application of the Conceptual Framework is not expected to have a material impact on
the Group's financial statements.
AASB 2018-6 Amendments to Australian Accounting Standards - Definition of a Business
The amendment is applicable to annual reporting periods beginning on or after 1 January 2020 and clarifies the
definition of a ‘business’ in AASB 3 to assist in determining whether a transaction should be accounted for as a
business combination or as an asset acquisition. The amendment will apply prospectively to acquisitions occurring
on or after the beginning of the first applicable annual reporting period.
AASB 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-current
There are four main changes to the classification requirements:
1) The requirement for an ‘unconditional’ right has been deleted from paragraph 69(d) because covenants in
banking agreements would rarely result in unconditional rights;
2) The right to defer settlement must exist at the end of the reporting period. If the right to defer settlement is
dependent upon the entity complying with specified conditions (covenants), the right to defer only exists at
reporting date if the entity complies with those conditions at reporting date;
3) Classification is based on the right to defer settlement, and not intention (paragraph 73); and
4)
If a liability could be settled by an entity transferring its own equity instruments prior to maturity (e.g. a
convertible bond), classification is determined without considering the possibility of earlier settlement by
conversion to equity, but only if the conversion feature is classified as equity under IAS 32.
As these amendments only apply for the first time to the 30 June 2023 balance sheet (and 30 June 2022 comparative
balance sheet), the entity is not yet able to make an assessment of the impacts regarding the right to defer settlement,
compliance with bank covenants, and intention to settle.
Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions
Introduces a practical expedient that permits lessees not to assess whether a rent concession that occurs as a direct
consequence of the COVID-19 pandemic is a lease modification, provided all of the following criteria are met:
▪ Change in lease payments results in revised consideration for the lease that is substantially the same as, or
less than, the consideration for the lease immediately prior to the change;
▪ Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (for
example, a concession would meet this condition if it resulted in reduced lease payments on or before 30
June 2021 and increased lease payments that extend beyond 30 June 2021); and
There is no substantive change to other terms and conditions of the lease.
▪
52
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
In such cases, the concessions are accounted for as if they were not a lease modification.
On first time adoption for the year ended 30 June 2021, the cumulative effect of initially applying the amendment will be
recognised as an adjustment to opening balances of retained earnings on 1 July 2020.
2. Critical accounting estimates and judgments
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations
of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to
the respective notes) within the next financial year are discussed below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or
may have, on the Company based on known information. This consideration extends to the nature of the products and
services offered, customers, supply chain, staffing and geographic regions in which the company operates. Other than
as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial
statements or any significant uncertainties with respect to events or conditions which may impact the Company
unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Hoadleys Hybrid
ESO Model (a Monte-Carlo simulation model) or Black-Scholes models (as the case may be), taking into account the
terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating
to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within
the next annual reporting period but may impact profit or loss and equity. Where performance rights are subject to
vesting conditions, Management has formed judgments around the likelihood of vesting conditions being met.
Expenses recognised during the year have been calculated accordingly. Refer to Note 22 for further information.
Exploration and evaluation costs
Exploration and evaluation expenditures are those expenditures incurred in connection with the exploration for and
evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource
are demonstrable. Expenditure incurred on activities that precede exploration and evaluation of mineral resources,
including all expenditure incurred prior to securing legal rights to explore an area, is expensed as incurred.
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. An
‘area of interest’ is an individual geological area which is considered to constitute a favourable environment for the
presence of a mineral deposit or has been proved to contain such a deposit. These costs are carried forward only if
they relate to an area of interest for which rights of tenure are current and in respect of which:
▪ Such costs are expected to be recouped through successful development and exploitation or from sale of the
area; and
▪ Exploration and evaluation activities in the area have not, at balance date, reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable resources, and active and
significant operations in, or relating to, this area are continuing.
A regular review is undertaken in each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to each area of interest. If costs do not meet the criteria noted above, they are written off in full against
the profit or loss statement.
Impairment of exploration and evaluation assets
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility
and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable
amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exists:
▪
The term of the exploration licence in the specific area of interest has expired during the reporting period or will
expire in the near future, and is not expected to be renewed;
▪ Substantive expenditure on further exploration and evaluation of mineral resources in the specific area of
interest is not budgeted or planned;
▪ Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resource and the decision has been made to discontinue such
activities in the specific area; or
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
53
Notes to the Consolidated Financial Statements
▪ Sufficient data exists to indicate that, although development in the specific area of interest is likely to proceed,
the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful
development or by sale.
When a potential impairment is indicated, an assessment is performed for each cash generating unit which is no larger
than the area of interest.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Employee benefits provision
As discussed in Note 1, the liability for employee benefits expected to be settled more than 12 months from the
reporting date is recognised and measured at the present value of the estimated future cash flows to be made in
respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition
rates and pay increases through promotion and inflation have been taken into account.
Rehabilitation provision
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined.
The Group's mining and exploration activities are subject to various laws and regulations governing the protection of
the environment. The Group recognises management's best estimate for assets retirement obligations and site
rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ materially
from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and
discount rates could affect the carrying amount of this provision.
3. Operating segments
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. The Group has determined that it has one operating
segment, being mineral exploration and development.
4. Other income
Bank interest
Government grant income
2020
$
3,678
62,500
66,178
2019
$
6,309
-
6,309
Government grant income relates to the ATO cash boost stimulus measure introduced during the COVID-19 pandemic.
5. Expenses
Profit/(Loss) before income tax for the year includes the following specific items:
Employee benefit expense
Employee expenses (including employment related expenses)
Superannuation
Capitalised as exploration and evaluation expenditure
Total employee benefits expense
Consultants and advisors
Accounting and secretarial
Legal
Other
Total consultant and advisor costs
Corporate costs
Compliance costs
Directors’ fees
Share registry costs
Total corporate costs
54
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
2020
$
462,926
42,527
505,453
(185,891)
319,562
97,310
795,812
120,694
1,013,816
65,134
285,822
65,067
416,023
2019
$
13,151
1,249
14,400
-
14,400
51,229
24,973
-
76,202
53,690
260,000
9,738
323,428
Notes to the Consolidated Financial Statements
6.
Income tax
a) Components of income tax expense
Current tax expense
Deferred tax expense
b) Prima facie tax payable
Loss before income tax
Prima facie income tax at 30.0% (2019: 30.0%)
Tax effect of amounts not deductible in calculating taxable income
- Entertainment
- Other non-deductible expenses
- Share-based payments
- Non-assessable income
- Tax losses not recognised
Income tax expense/(benefit) attributable to loss
c) Current tax liability
Current tax relates to the following:
Current tax liabilities / (assets)
Opening balance
Income tax
Instalments paid
d) Deferred Tax
Deferred tax relates to the following:
Deferred Tax Assets balance comprises:
Plant and equipment under lease
Accruals
Provisions – annual and long service leave
Capital raising costs
Business related costs
Tax losses
Offset against Deferred Tax Liabilities / Non-recognition
Deferred Tax Liabilities balance comprises:
Prepayments
Exploration assets
Offset against Deferred Tax Assets
2020
$
-
-
-
2019
$
-
-
-
(2,710,042)
(813,013)
(656,006)
(196,802)
576
135,975
55,727
(18,750)
639,485
-
-
-
-
-
31,221
25,497
9,877
61,730
219,452
9,471,933
(9,819,710)
-
-
(2,451,934)
2,451,934
-
1,060
3,392
9,600
-
182,750
-
-
-
-
-
-
15,671
-
-
61,333
8,283,242
8,360,246
-
(3,292)
(1,736,273)
1,739,565
-
Net Deferred Tax
-
-
e) Deferred income tax (revenue)/expense included in income tax expenses comprises:
Decrease / (increase) in deferred tax assets
(Decrease) / increase in deferred tax liabilities
Non-recognition of deferred tax assets
f) Deferred income tax related to items charged or credited directly to equity
Decrease / (increase) in deferred tax assets
(Decrease) / increase in deferred tax liabilities
Non-recognition of deferred tax assets
g) Deferred tax assets not brought to account
Temporary differences
Operating tax losses
(1,459,465)
742,817
716,648
-
77,163
-
(77,163)
-
(824,198)
601,025
223,173
-
-
-
-
-
(2,134,605)
9,471,933
7,337,329
(1,662,561)
8,283,242
6,620,681
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
55
Notes to the Consolidated Financial Statements
7. Earnings per share
Basic earnings per share amounts are calculated by dividing net profit/(loss) for the year attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the year.
The following reflects the income and share data used in the total operations basic and diluted earnings per share
computations:
Basic and diluted profit/(loss) per share
Basic profit/(loss) per share (cents per share)
Diluted profit/(loss) per share (cents per share)
Profit/(Loss)
Profit/(loss) used in the calculation of basic and diluted earnings per share is as
follows:
Profit/(loss)
Loss from continuing operations
Weighted average number of ordinary shares
2020
Cents
(67)
(67)
2020
$
2019
Cents
(20)
(20)
2019
$
(2,710,042)
(2,710,042)
(656,006)
(656,006)
2020
No.
2019
No.
Weighted average number of ordinary shares outstanding during the period
used in calculating basic EPS
Weighted average number of ordinary shares outstanding during the period used
in calculating diluted EPS
406,063,700
328,594,446
406,063,700
328,594,446
8. Dividends paid or proposed
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend
to the date of this report.
9. Cash and cash equivalents
Current
Cash at bank and in hand
2020
$
2019
$
3,401,903
448,919
Cash at bank and in hand earns interest at both floating rates based on daily bank rates and fixed rate term deposits. The
Company notes that $51,365 (included in the Cash at bank and in hand amount) is held as guarantees with Westpac Bank
subject to the following lease agreements:
▪
▪
$38,000 held as a bank guarantee for the Company’s previous lease agreement at its former premises at 63 Hay
Street, Subiaco (returned 21 September 2020); and
$13,365 held as a bank guarantee for the Company’s sub-lease agreement at its premises at Suite 2, 6 Lyall
Street, South Perth.
Refer to Note 21 on financial instruments for details on the Company’s exposure to risk in respect of its cash balance.
56
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
10. Trade and other receivables
Current
Trade debtors
Rental deposits
GST receivable
Prepayments
2020
$
2019
$
162,500
11,223
125,931
8,265
307,919
67,192
-
81,017
10,974
159,183
The Group did not have any receivables that were past due as at 30 June 2020 (30 June 2019: Nil). The Group therefore
did not consider a credit risk on the aggregate balances as at 30 June 2020. For more information, please refer to Note
21.
11. Property, plant and equipment
Motor vehicles – at cost
Less: Accumulated depreciation
Plant and equipment – at cost
Less: Accumulated depreciation
Office furniture and fittings – at cost
Accumulated depreciation
2020
$
52,596
(2,074)
50,522
9,662
(182)
9,480
-
-
-
2019
$
-
-
-
1,380
(1,380)
-
14,776
(14,776)
-
Total
60,002
-
As at 1 July 2018
Additions
Depreciation
Write off
As at 30 June 2019
As at 1 July 2019
Additions
Depreciation
Write off
As at 30 June 2020
Motor
Vehicles
$
Plant and
equipment
$
Office furniture
and fittings
$
-
-
-
-
-
-
52,597
(2,075)
-
50,522
-
-
-
-
-
-
9,662
(182)
-
9,480
-
4,765
(4,765)
-
-
-
-
-
-
-
Total
$
-
4,765
(4,765)
-
-
-
62,259
(2,257)
-
60,002
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
57
Notes to the Consolidated Financial Statements
12. Exploration and evaluation expenditure
Non-Current
Exploration and evaluation - at cost
2020
$
2019
$
8,281,952
5,873,285
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Movement
Opening balance
Exploration expenditure capitalised during the year
Impairment expense
Revaluation of rehabilitation provision
Deposit – Koongie Park Farm-Out Transaction
Closing balance
Comprised of:
Feysville Project
Koongie Park Project
Leonora Project
Mandilla Project
Impairment
Feysville Project
Koongie Park Project
Leonora Project
Mandilla Project
2020
$
5,873,285
2,962,017
(457,480)
4,130
(100,000)
8,281,952
3,357,957
1,646,689
-
3,277,306
8,281,952
(230,966)
(1,791)
(224,723)
-
(457,480)
2019
$
3,871,182
2,003,415
(21,802)
20,490
-
5,873,285
3,405,893
1,571,794
217,205
678,393
5,873,285
(16,742)
(4,979)
(81)
-
(21,802)
During the year, the Company assessed the carrying amount versus the recoverable amount of the areas of interest above.
On the basis that a number of tenements had been relinquished and/or there is no substantive expenditure budgeted or
planned, the Company recorded an impairment charge of $457,480 (2019: $21,802).
The Group’s exploration properties may be subjected to claim(s) under native title, or contain sacred sites, or sites of
significance to Aboriginal people. As a result, exploration properties or areas within the tenements may be subject to
exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not possible to quantify
whether such claims exist, or the quantum of such claims.
13. Non-current assets – right-of-use assets
The Group leases land and buildings for its offices and regional operating bases, with lease agreements between one to
five years with, in some cases, options to extend.
Land and buildings
Opening balance – 1 July 2019
Additions to right-of-use assets
Depreciation charge for the year
Closing balance – 30 June 2020
2020
$
2019
$
-
172,188
(70,694)
101,494
-
-
-
-
58
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
14. Trade and other payables
Current
Trade payables
Accrued directors’ fees
Other payables and accruals
All amounts are expected to be settled within 12 months.
15. Employee benefits
Current
Provision for annual leave
PAYG Withholding
Superannuation payable
16. Lease liabilities
Current
Lease liability
Non-current
Lease liability
2020
$
2019
$
316,411
12,500
78,208
407,119
595,666
50,988
-
646,654
2020
$
32,922
26,701
3,004
62,627
2019
$
-
4,320
1,249
5,569
2020
$
2019
$
57,365
46,705
104,070
-
-
-
17. Provision for rehabilitation
A provision has been made to cover the costs of rehabilitating the Company’s areas of interest. It is not expected that
this will be required in the next 12 months.
Non-current
Feysville
Koongie Park
Mandilla
18. Issued capital
2020
$
28,400
33,240
28,200
89,840
2019
$
23,890
32,640
29,180
85,710
Ordinary shares – fully paid
466,786,162
348,744,053
43,575,908
35,292,993
2020
Shares
2019
Shares
2020
$
2019
$
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
59
Notes to the Consolidated Financial Statements
(i) Movements in ordinary share capital
Date
Details
No. of Shares
Issue Price
$
30-Jun-18 Balance
30-Jun-19 Balance
Issue*
Issue*
26-Jul-19
12-Aug-19
30-Aug-19 Placement*
Issue*
27-Sep-19
27-Sep-19 Exercise of options
17-Oct-19 Exercise of options
25-Nov-19 Exercise of options
Issue*
13-Dec-19
31-Jan-20 Placement
2-Mar-20
18-Mar-20 Placement
30-Jun-20 Placement
-
Share issue costs
Issue*
317,864,054
348,744,053
802,950
8,230,692
12,814,418
2,211,921
400,000
2,500,000
27,000,000
1,098,901
5,315,727
4,367,500
50,800,000
2,500,000
-
-
-
33,951,434
35,292,993
$0.059
$0.064
$0.065
$0.069
$0.025
$0.02
$0.02
$0.087
$0.105
$0.125
$0.10
$0.10
-
47,374
530,349
832,937
153,313
10,000
50,000
540,000
95,604
558,151
545,938
5,080,000
250,000
(410,751)
30-Jun-20 Closing Balance
466,786,162
-
43,575,908
* Includes share-based payment consideration, in which the value of share-based payment consideration is subject to the provisions of
AASB Interpretation 19 – Extinguishing Financial Liabilities with Equity Instruments.
(ii) Terms and conditions of issued capital
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to
participate in proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on
shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(iii) Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that
they can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk
management is the current working capital position against the requirements of the Group to meet exploration
programs and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet
anticipated operating requirements, with a view to initiating appropriate capital raisings as required.
(iv) Unissued ordinary shares
Unissued ordinary shares of Anglo Australian Resources NL under option at the date of this report are as follows:
Tranche
Grant date
Expiry date
A
B
C
D
E
F
G
H
I
30-Nov-15
25-Aug-16
8-Dec-16
29-Aug-17
2-Dec-19
2-Dec-19
2-Dec-19
6-Aug-20
6-Aug-20
30-Nov-20
30-Nov-20
30-Nov-20
30-Nov-20
27-Nov-22
27-Nov-22
27-Nov-22
31-Dec-21
31-Dec-22
Total unlisted options on issue at the date of this report
Exercise
price
$0.02
$0.025
$0.04
$0.08
$0.135
$0.135
$0.135
$0.133
$0.15
number
29,800,000
10,100,000
2,500,000
8,950,000
1,000,000
1,000,000
1,000,000
1,250,000
1,250,000
56,850,000
60
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
(v) Equity settled transactions
Settlement of Trade Payables
The Group issued the following fully paid ordinary shares during the year as consideration for the settlement of invoices:
▪
▪
▪
▪
▪
▪
26 July 2019: 802,950 fully paid ordinary shares were issued at a deemed issue price of $0.06 per share to
settle outstanding invoices;
12 August 2019: 1,548,815 fully paid ordinary shares were issued at a deemed issue price of $0.062 per share
to settle outstanding invoices;
27 September 2019: 2,183,076 fully paid ordinary shares were issued at a deemed issue price of $0.065 per
share to settle outstanding invoices;
13 December 2019: 1,098,901 fully paid shares were issued at a deemed issue price of $0.091 to settle
outstanding invoices;
31 January 2020: 329,120 fully paid shares were issued at a deemed issue price of $0.105 per share to settle
outstanding invoices; and
2 March 2020: 4,367,500 fully paid ordinary shares were issued at a deemed issue price of $0.10 per share, in
accordance with the terms of the Settlement Agreement, as outlined below.
▪ Pursuant to the provisions of AASB Interpretation 19 – Extinguishing Financial Liabilities with Equity
Instruments, the outstanding debts were extinguished based on the fair value of equity instruments issued. As a
result, $108,881 was recorded as an expense in the Consolidated Statement of Profit or Loss.
Settlement Agreement
By notice dated 29 October 2019, Braham Investments Pty Ltd (ACN 092 139 403) requisitioned a meeting of the
Company’s shareholders, which was to be held on 20 December 2019 (or an adjourned date) (the Requisitioned
Meeting). On 28 November 2019, Anglo Australian commenced proceeding number COR 232 of 2019 in the Supreme
Court of Western Australia (Proceeding) against a number of the Company’s shareholders.
On 23 December 2019, the Company announced that it had entered into a Settlement Agreement with the parties
involved in the Requisitioned Meeting and Proceeding (together, the Settlement Agreement Parties). Under the
terms of the Settlement Agreement, the Settlement Agreement Parties agreed to fully and finally settle the Proceeding
and all possible disputes arising out of or in connection with the Proceeding or the Requisitioned Meeting, subject to
a number of terms, one of which involved the Company settling defendants’ costs of $453,250, via a combination of
cash ($16,500) and equity ($436,750). In accordance with the terms of the Settlement Agreement, on 2 March 2020,
4,367,500 fully paid ordinary shares were issued to the Settlement Agreement Parties at a deemed issued price of
$0.10 per share.
19. Share based payment reserves
Share based payment reserves
Options reserve (i)
Performance rights reserve (ii)
(i) Options reserve
2020
$
2019
$
1,080,108
9,828
1,089,936
916,649
-
916,649
The share-based payment reserve recognises options and performance rights issued as share based payments. The
following options were issued during the prior year:
Options
Number
Reserve
Opening balance as at 1 July 2018
Exercise of options
30 June 2019
Opening balance as at 1 July 2019
Exercise of options
Options issued to director
91,450,000
(10,200,000)
81,250,000
916,649
916,649
Number
Reserve
81,250,000
(29,900,000)
3,000,000
916,649
-
67,046
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
61
Notes to the Consolidated Financial Statements
Options issued to advisors *
30 June 2020
2,500,000
56,850,000
96,413
1,080,108
* The Company issued 2,500,000 unquoted options to a third party on 6 August 2020 with respect to services rendered
under an agreement (refer to Note 20). The agreement was dated 6 March 2020. Consequently, the fair value of the
options issued has been recognised as an expense prior to year end.
(ii)
Performance rights reserve
The share-based payment reserve recognises performance rights issued as share based payments. The following
performance rights were issued during the prior year:
Performance rights
Number
Reserve
Opening balance as at 1 July 2019
Performance Rights issued to directors and
employees
30 June 2020
20. Operating cash flow reconciliation
Reconciliation of operating cash flows to net profit/(loss)
Profit/(loss) for the year
Interest income reported under investment activities
Interest expense reported under financing activities
Share based payments
Legal settlement/costs – settled via equity
Depreciation expense
Impairment expense
Exploration expenditure written off
Directors fees taken in equity
Consultancy fees taken in equity
Loss on financial liabilities settled via equity
Change in operating assets and liabilities
Change in trade and other receivables
Change in trade and other payables
Cash flow from operations
-
14,341,709
14,341,709
2020
$
(2,710,042)
(3,677)
4,946
76,874
444,875
72,951
457,480
61,842
170,362
134,664
108,882
(103,824)
10,691
1,273,976
-
9,828
9,828
2019
$
(656,006)
(6,309)
-
32,000
4,765
-
(33,098)
199,999
-
-
1,528
(39,784)
(496,905)
Non-cash financing and investing activities
During the year, the Group agreed to settle the following financing and investing costs via the issue of the following equity
securities:
▪ On 3 September 2019, the Company issued 385,000 fully paid ordinary shares at a deemed issue price of
$0.065 to settle invoices relating to capital raising costs of $22,750;
▪ On 31 January 2020, the Company issued 329,120 fully paid ordinary shares at a deemed issue price of $0.105
to settle invoices relating to capital raising costs of $34,558;
▪
▪
2,500,000 options with a fair value of $96,413 were issued to advisors as part of capital raising fees on 6 August
2020, subsequent to the end of the year; and
Total unpaid Directors fees of $194,000 were extinguished through exercise of 9,700,002 options with an
exercise price of $0.02 per share.
There are no other non-cash financing and investing activities other than the above.
21. Financial risk management
Overview
This note presents information about the Group’s exposure to credit, liquidity and market risks, the objectives, policies and
processes for measuring and managing risk, and the management of capital.
62
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
The Board has overall responsibility for the establishment and oversight of the risk management framework. Management
monitors and manages the financial risks relating to the operations of the Group through regular reviews of the risks.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual
obligations resulting in financial loss to the Group. Presently, the Group undertakes mineral exploration and evaluation
activities in Australia. At the balance sheet date, there were no significant concentrations of credit risk.
Cash and cash equivalents
(i)
The Group limits its exposure to credit risk by only investing with major Australian financial institutions. All cash and
cash equivalents are held with A+ rated financial institutions (2019: AA-).
Trade and other receivables
(ii)
The Group’s trade and other receivables relates to government grant income, GST refunds and rental income.
At 30 June 2020, a receivable of $100,000 was included, which relates to the non-refundable deposit paid by AuKing
with respect to the proposed Koongie Park farm-out arrangement. This amount was received on 1 July 2020.
The Group has determined that its credit risk exposure on trade and other receivables is low, as all counterparties
are considered reliable. Management does not expect any of these counterparties to fail to meet their obligations.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s
maximum exposure to credit risk at the reporting date was:
Trade and other receivables
Cash and cash equivalents
Total
Carrying Amount
2020
$
307,919
3,401,903
3,709,822
2019
$
159,183
448,919
608,102
(b) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due. The Group manages liquidity risk by maintaining adequate cash reserves from capital raisings and
by continually monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and
liabilities. As at reporting date the Group had sufficient cash reserves to meet its requirements. The Group therefore had
no credit standby facilities or arrangements for further funding in place.
The financial liabilities of the Group at reporting date were trade payables incurred in the normal course of the business
and lease liabilities. Trade payables are non-interest bearing and were due within the normal 30-60 days terms of creditor
payments. The Group does not consider this to be material to the Group and have therefore not undertaken any further
analysis of risk exposure.
The following are the contractual maturities of financial liabilities, including estimated interest payments. The carrying
amount of the Group’s financial liabilities approximate their carrying amount at reporting date.
30 June 2020
Carrying
Amount
Contractual
Cash Flows
12 Months
or Less
1-2 years
2-5 years
>5 years
Trade and other payables
Lease liabilities
Total
407,119
104,394
511,513
407,119
115,500
522,619
407,119
64,200
471,319
-
30,300
30,300
-
18,000
18,000
-
3,000
3,000
30 June 2019
Carrying
Amount
Contractual
Cash Flows
12 Months
or Less
1-2 years
2-5 years
>5 years
Trade and other payables
Lease liabilities
Total
646,654
-
646,653
646,654
-
646,653
646,654
-
646,653
-
-
-
-
-
-
-
-
-
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
63
Notes to the Consolidated Financial Statements
(c) Market risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters.
(i)
The Group is at a stage of development where it has little or no exposure to commodity price risk.
Commodity risk
Interest rate risk
(ii)
The Group is exposed to interest rate risk (primarily on its cash and cash equivalents and any interest-bearing
liabilities), which is the risk that a financial instrument’s value will fluctuate as a result of changes in the market interest
rates on interest-bearing financial instruments. The Group does not use derivatives to mitigate these exposures.
Profile
At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:
Variable rate instruments
Cash and cash equivalents
Carrying Amount
2020
$
2019
$
3,401,903
448,919
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss.
Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would not materially affect equity and profit or loss
after tax.
(d) Fair values
The carrying value of cash and cash equivalents, trade and other receivables, trade and other payables and interest-
bearing liabilities is considered to be a fair approximation of their fair values.
22. Share based payments
(a) Employee Incentive Plan
The establishment of the Company’s Employee Incentive Plan (the Plan) was approved by shareholders at a general
meeting held on 16 June 2020.
The Plan is intended to assist the Company to attract and retain key staff, including employees or contractors. The Board
believes that grants made to eligible participants under the Plan will provide a powerful tool to underpin the Company's
employment and engagement strategy, and that the Plan will:
▪
▪
▪
▪
▪
enable the Company to incentivise and retain existing key management personnel and other eligible employees and
contractors needed to achieve the Company's business objectives;
enable the Company to recruit, incentivise and retain additional Key Management Personnel, and other eligible
employees and contractors, needed to achieve the Company's business objectives;
link the reward of key staff with the achievement of strategic goals and the long-term performance of the Company;
align the financial interest of participants of the Plan with those of Shareholders; and
provide incentives to participants under the Plan to focus on superior performance that creates Shareholder value.
Under the Plan, eligible Directors, employees and contractors may be invited to subscribe for Options and Performance
Rights, in order to increase the range of potential incentives available for eligible Directors, employees and contractors.
Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate in the plan or to
receive any guaranteed benefits.
Incentive securities (performance rights and options) issued under the Plan are subject to vesting and performance
conditions imposed by the Board. Incentive securities granted under the plan carry no dividend or voting rights. Only upon
satisfaction of vesting and performance conditions and conversion to ordinary shares, will these incentive securities rank
equally with all other shares.
64
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
(b) Unlisted options
Options over ordinary shares have been issued for nil cash consideration. The options cannot be transferred and will not
be quoted on the ASX. Therefore, no voting rights are attached to the options unless converted into ordinary shares. All
options are granted at the discretion of the Board. The terms and conditions of options on issue at 30 June 2020 are as
follows:
Tranche
Number
Grant Date
Expiry Date
Exercise
Price
(cents)
Fair Value at
Grant Date
(cents)
Vesting Date
A
B
C
D
E
F
G
29,800,000
30-Nov-15
30-Nov-20
10,100,000
2,500,000
8,950,000
1,000,000
1,000,000
1,000,000
25-Aug-16
8-Dec-16
29-Aug-17
2-Dec-19
2-Dec-19
2-Dec-19
30-Nov-20
30-Nov-20
30-Nov-20
27-Nov-22
27-Nov-22
27-Nov-22
2.00
2.50
4.00
8.00
13.50
13.50
13.50
Total
54,350,000
0.37
1.00
1.43
2.22
3.59
3.59
3.59
-
-
-
-
2-Dec-19
27-Nov-20
27-Nov-21
All options detailed in the table above were issued prior to the introduction of the Company’s Employee Incentive Plan.
There have been no alterations of the terms and conditions of the above share-based payment arrangement since grant date.
The following table illustrates the number and weighted average exercise prices of and movements in share options issued
during the year:
2020
2019
Number
81,250,000
3,000,000
-
(29,900,000)
-
54,350,000
52,350,000
Weighted
Average
Exercise Price
$
$0.028
$0.135
-
$0.02
-
$0.038
$0.034
Number
91,450,000
-
-
(10,200,000)
-
81,250,000
81,250,000
Weighted Average
Exercise Price
$
$0.027
-
-
$0.02
-
$0.028
$0.028
Outstanding at the beginning of
the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of year
Exercisable at the end of year
The fair values of the equity settled share options granted are estimated as at the date of the grant using the Black-Scholes
model taking into account the terms and conditions upon which the options were granted.
The terms and conditions of each grant of unquoted options granted during the year are as follows:
Tranche
Class of Securities
Grant Date
Number of
Securities
Exercise Price
Expiry
Date
Vesting Date
A
B
C
Director Options
02-Dec-19
1,000,000
$0.135
27 Nov 2022
Immediate
Director Options
02-Dec-19
1,000,000
$0.135
27 Nov 2022
27 Nov 2020
Director Options
02-Dec-19
1,000,000
$0.135
27 Nov 2022
27 Nov 2021
In order for the Director Options to vest, the Director must remain a director as at the Vesting Date.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
65
Notes to the Consolidated Financial Statements
The Options were valued using a Black Scholes Model with the following inputs:
Tranche
Valuation Date
Expected
Volatility
Risk-Free
Interest Rate
Expiry
Underlying
Share Price
A
B
C
02-Dec-19
02-Dec-19
02-Dec-19
80%
80%
80%
0.70%
0.70%
0.70%
27 Nov 2022
27 Nov 2022
27 Nov 2022
$0.088
$0.088
$0.088
Value per
Options
($)
0.0359
0.0359
0.0359
Total
Value
($)
35,909
35,909
35,909
Subject to the Board’s discretion, options shall be cancelled for nil consideration where the recipient ceases to hold
employment or office with the Company.
Subsequent to 30 June 2020, the Company issued 2,500,000 unquoted options to a third party on 6 August 2020 with
respect to services rendered under an agreement (refer to Note 20). The agreement was dated 6 March 2020.
Consequently, the fair value of the options issued has been recognised as an expense prior to year end.
The terms and conditions of each grant of unquoted options granted during the year are as follows:
Tranche
Class of Securities
Grant Date
Number of
Securities
Exercise Price
Expiry
Date
Vesting Date
H
I
Advisor Options
06-Aug-20
1,250,000
$0.133
31-Dec-21
Immediate
Advisor Options
06-Aug-20
1,250,000
$0.15
31-Dec-22
Immediate
The Options were valued using a Black Scholes Model with the following inputs:
Tranche
Valuation Date
Expected
Volatility
Risk-Free
Interest Rate
Expiry
Underlying
Share Price
H
I
18-Mar-20
18-Mar-20
89%
89%
0.35%
0.35%
31-Dec-21
31-Dec-22
$0.095
$0.095
Value per
Options
($)
0.0346
0.0425
Total
Value
($)
43,267
53,145
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may
occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may
also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement
of fair value.
(c) Performance Rights
Performance rights granted during the year as share based payments are as follows:
Tranche
Class of
Securities
Grant
Date
Number of
Securities
Exercise Price
Expiry
Date
Disposal
Restriction
A
B
C
D
Director
performance rights
23-Jun-20 1,830,780
Director
performance rights
23-Jun-20 1,830,780
Employee /
consultant
performance rights
Employee /
consultant
performance rights
23-Jun-20 5,340,075
23-Jun-20 5,340,074
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
23-Jun-24 Non-transferable
23-Jun-24 Non-transferable
23-Jun-24 Non-transferable
23-Jun-24 Non-transferable
66
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
The performance rights shall vest on the later date to occur of:
h) on the date which the milestones shown in the table below are met; and
Tranches Performance / Vesting Condition and Performance Period
Extent to which
Performance Rights vest1
A,C
B,D
Automatically vest upon the Company announcing a JORC compliant Mineral
Resource of at least 500,000 ounces, to be achieved on or before the expiry date.
Automatically vest upon the Company announcing a JORC compliant Mineral
Resource of at least 1,000,000 ounces to be achieved on or before the expiry date.
100%
100%
1 – Expected vesting date is the same date as the expiry date.
i)
the date that the holder gives a notice to the Company confirming that the holder would like the Performance Rights
to vest.
The performance rights issued are subject to non-market vesting conditions, to be achieved on or before the expiry
dates. The performance rights were valued based on the share price at the deemed grant date.
Tranche
A
B
C
D
Grant
date
16-Jun-20
16-Jun-20
23-Jun-20
23-Jun-20
Number of Instruments
Valuation at grant
date
1,830,780
1,830,780
5,340,075
5,340,074
$0.125
$0.125
$0.15
$0.15
(d) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the year as part of share-based expense
were as follows:
Performance rights issued to directors and employees
Options issued to director
Options issued to advisors
Shares issued as consideration for services provided
2020
$
9,828
67,046
96,412
-
173,286
2019
$
-
-
-
32,000
32,000
23. Contingent liabilities
The Company announced on 31 August 2020 that it had reached agreement with the respective owners to extinguish two
third-party royalties held over tenement M15/633 of the Mandilla Gold Project. The third-party royalties provided for the
following payments to be made:
▪ Royalty # 1: $1 per tonne of gold ore mined and treated; and
▪ Royalty # 2:
o 4% NSR (net smelter royalty) on gold production in excess of 100,000oz; and
o A price participation royalty of 10% on every dollar the gold price exceeds A$600 for every ounce produced.
The consideration provided to extinguish these royalties was as follows:
▪ Royalty # 1: issue of 1,142,588 ordinary shares at a deemed issue price of $0.175 per share (nominal value of
AUD$200,000) (issued on 6 August 2020); and
▪ Royalty # 2: Payment of cash consideration of US$400,000 (paid 31 August 2020).
The Group has given bank guarantees as at 30 June 2020 of $51,365 (2019: $38,000) to various landlords (refer to Note
9).
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
67
Notes to the Consolidated Financial Statements
24. Commitments
(a) Exploration expenditure
In order to maintain mining tenements, the economic entity is committed to meet the prescribed conditions under which
tenements were granted. These commitments may be met in the normal course of operations by future capital raisings
and/or farm-out and under certain circumstances are subject to the possibility of adjustment to the amount and timing of
such obligations or by tenement relinquishment.
30 June 2020
Mandilla
$
Feysville
$
Koongie Park1
$
Other
$
Total
$
Exploration expenditure
commitments
Payable:
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
148,100
524,236
526,214
74,313
50,236
-
368,454
693,187
315,034
50,000
75,096
640,867
1,342,754
-
841,248
Total
2,824,870
1 – Expenditure commitments relating to Koongie Park may be reduced if the proposed farm-out transaction with AuKing
proceeds.
1,376,675
1,198,550
124,549
125,096
30 June 2019
Mandilla
$
Feysville
$
Koongie Park
$
Other
$
Total
$
Exploration expenditure
commitments
Payable:
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
Sub-total
(b) Operating leases
68,518
235,186
574,588
878,292
117,365
90,674
-
412,530
800,989
443,001
43,658
642,070
117,334
1,244,182
-
1,017,589
208,039
1,656,520
160,992
2,903,843
The Company held non-cancellable operating lease rentals as at 30 June 2019 with total financial commitments of $65,845.
These leases all expired during the year.
25. Key management personnel disclosures
Compensation
The aggregate compensation paid to directors and other members of key management personnel of the Group is set out
below:
Short-term employee benefits
Post-employment long term benefits
Long term benefits (annual leave)
Share based payments
Total
2020
$
646,844
33,371
-
74,820
755,035
2019
$
260,000
-
-
-
260,000
As required by Corporations Regulation 2M.3.03, information regarding individual Directors’ and Executives’ compensation
and equity instrument disclosures is provided in the Remuneration Report section of the Directors’ Report.
During the current period, 3,000,000 unlisted options and 11,471,577 performance rights were awarded to key
management personnel. See Note 22 and the Remuneration Report for further details of these related party transactions.
68
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
26. Related party disclosure
(a) Parent entities
Anglo Australian Resources NL is the ultimate Australian parent entity.
(b) Subsidiaries
The consolidated financial statements include the financial statements of Anglo Australian Resources NL and the
subsidiaries listed in the following table.
2020
2019
Country of
Incorporation
% Equity
Interest
Country of
Incorporation
% Equity
Interest
Principal Activity
Mandilla Gold Pty Ltd
Feysville Gold Pty Ltd
Australia
Australia
100
100
Australia
Australia
100
100
Operating subsidiary
Operating subsidiary
(c) Key management personnel
Disclosures relating to compensation of key management personnel are set out in Note 25 and in the Remuneration Report
included in the Directors’ Report. Key management personnel covered in this report are listed below in Figure 20 and
Figure 21.
Figure 20: Directors (executive and non-executive)
Name
Mr Leigh Warnick
Mr Marc Ducler
Mr John Jones
Mr Peter Stern
Mr David Varcoe
Mr Graeme Smith
Mr Andrew Barclay
Mr Matthew Hardisty
Mr David Sanders
Position
Chairman (from 23 December 2019)
Managing Director (from 23 December 2019)
Executive Chairman (1 July 2019 to 22 December 2019)
Non-Executive Director (from 23 December 2019)
Non-Executive Director
Non-Executive Director (from 28 November 2019)
Non-Executive Director (to 23 December 2019)
Non-Executive Director (13 December 2019 to 23 December 2019)
Non-Executive Director (13 December 2019 to 23 December 2019)
Non-Executive Director (27 November 2019 to 28 November 2019)
Figure 21: Other key management personnel
Name
Jed Whitford
Brendon Morton
Julie Reid
Position
General Manager Projects & Business Development (from 13 January 2020)
Chief Financial Officer & Company Secretary (from 24 December 2019)
Geology Manager (from 2 January 2020)
(d)
Transactions with related parties
The following transactions occurred with related parties are summarised below:
Payment for goods and services
Payment for legal settlement
Equity settlement of legal settlement
Receipts for goods and services
2020
$
496,161
10,000
70,000
28,605
2019
$
46,312
-
-
50,334
The summary above is inclusive of the following transactions with related parties.
Westbury Management Services Pty Ltd, a company of which John Jones is a Director, received $940.92 excluding GST
(2019: $612.12) during the year for storage services. These services were provided on normal commercial terms and at
arm’s length. As at 30 June 2020, $0 (2019: $0) remained outstanding.
Metropolis Pty Ltd, a company of which Peter Stern is a director, received $105,000 excluding GST (2019: $0) during the
year of which $50,000 related to non-executive director fees (2019: $50,000), $30,000 related to invoices raised for
additional services (2019: $50,000) and $25,000 related to accrued director’s fees owing at 30 June 2019. These services
were provided on normal commercial terms and at arm’s length. As at 30 June 2020, $0 (2019: $25,000) remained
outstanding. Consideration of $80,000 was deployed to exercise 4,000,000 $0.02 options expiring 30 November 2019.
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
69
Notes to the Consolidated Financial Statements
Wembley Corporate Pty Ltd, a company of which Graeme Smith is a Director, received $85,143 excluding GST (2019:
$45,700) during the year for director’s fees, company secretarial and accounting services. These services were provided
on normal commercial terms and at arm’s length. As at 30 June 2020, $0 (2019: $0) remained outstanding. Consideration
of $23,638 was deployed to exercise 1,181,940 $0.02 options expiring 30 November 2019, with the balance of the
consideration paid in cash.
Andrew Barclay & Associates, an entity associated with Andrew Barclay, received $60,270 excluding GST during the year
for legal services provided to the Company. These services were provided on normal commercial terms and at arm’s
length. As at 30 June 2020, $0 remained outstanding.
Bennett + Co, an entity associated with David Sanders, received $244,807 excluding GST during the year for legal services
provided to the Company. These services were provided on normal commercial terms and at arm’s length. As at 30 June
2020, $0 remained outstanding.
Tanga Resources Limited, a company of which Graeme Smith is an Officer, paid $28,605 excluding GST (2019: $50,334)
to the Company during the year for rent, carpark and outgoings at 63 Hay Street, Subiaco. These services were provided
to Tanga Resources Limited on normal commercial terms and at arm’s length. As at 30 June 2020, $0 (2019: $0) remained
outstanding.
Settlement Agreement
By notice dated 29 October 2019, Braham Investments Pty Ltd (ACN 092 139 403) requisitioned a meeting of the
Company’s shareholders, which was to be held on 20 December 2019 (or an adjourned date) (the Requisitioned
Meeting). On 28 November 2019, Anglo Australian commenced proceeding number COR 232 of 2019 in the Supreme
Court of Western Australia (Proceeding) against a number of the Company’s shareholders.
On 23 December 2019, the Company announced that it had entered into a Settlement Agreement with the parties involved
in the Requisitioned Meeting and Proceeding (together, the Settlement Agreement Parties). Under the terms of the
Settlement Agreement, the Settlement Agreement Parties agreed to fully and finally settle the Proceeding and all possible
disputes arising out of or in connection with the Proceeding or the Requisitioned Meeting, subject to a number of terms,
one of which involved the Company settling defendants costs of $453,250, via a combination of cash ($16,500) and equity
($436,750). In accordance with the terms of the Settlement Agreement, on 2 March 2020, 4,367,500 fully paid ordinary
shares were issued to the Settlement Agreement Parties at a deemed issued price of $0.10 per share.
Amounts paid to the Settlement Agreement Parties included the following related party transactions:
▪
▪
$10,000 was paid to Peter Stern on 22 January 2020; and
700,000 fully paid ordinary shares were issued to Peter Stern on 2 March 2020, at a deemed issue price of $0.10
per share.
These amounts above are disclosed fully in the Remuneration Report included in the Directors’ Report.
(e) Loans to/from related parties
During the year, the Company incurred expenditure on behalf of director, Mr John Jones totalling $30,347. By agreement
between the Company and Mr Jones, the amount was fully extinguished by being offset against directors’ fees owing to
Mr. Jones at 30 June 2020.
There were no loans to or from key management personnel outstanding as at 30 June 2020 (2019: nil).
(f) Terms and conditions
All transactions with related parties were made at arms length on normal commercial terms and conditions.
70
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
27. Events after the reporting date
Date
Details
2 July 2020
22-July-2020
6 August 2020
31-August-2020
The Company advised that it had appointed BDO Audit (WA) Pty Ltd as auditor of the Company.
A resolution will be proposed at the Company’s 2020 Annual General Meeting to ratify the
appointment.
The Company issued 2,382,216 LTI performance rights to a nominee of Mr. Marc Ducler,
Managing Director. The LTI Performance Rights were issued under the Company’s Employee
Incentive Plan. The issue was approved by resolution of shareholders on 16 June 2020.
The Company issued 2,500,000 unquoted options to a third party with respect to services rendered
(see Note 20), with the following exercise prices and expiry dates:
▪
▪
1,250,000 unquoted options exercisable at $0.133, expiring 31 December 2021; and
1,250,000 unquoted options exercisable at $0.15, expiring 31 December 2022.
The Company announced that it had reached agreement with the respective owners to extinguish
two third-party royalties held over tenement M15/633 of the Mandilla Gold Project. The third-party
royalties provided for the following payments:
▪ Royalty # 1: $1 per tonne of gold ore mined and treated; and
▪ Royalty # 2: comprising:
o 4% NSR (net smelter royalty) on gold production in excess of 100,000oz; and
o A price participation royalty of 10% on every dollar the gold price exceeds A$600 for
every ounce produced.
The consideration provided to extinguish these royalties was as follows:
▪ Royalty # 1: issue of 1,142,588 ordinary shares at a deemed issue price of $0.175 per share
(nominal value of AUD$200,000) (issued on 6 August 2020); and
▪ Royalty # 2: Payment of cash consideration of US$400,000.
18 September 2020
The Company announced that it had completed a capital raising to raise a total of $11 million via
the issue of approximately 64.7 million fully paid ordinary shares at $0.17 per share.
18 September 2020
The Company also announced that it would undertake a non-underwritten Share Purchase Plan
(SPP) to raise up to $3 million at an issue price of $0.17. The SPP offer opens for acceptance on
25 September 2020.
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.
No other matters or circumstances have arisen since the end of the year which significantly affected or may significantly
affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future
financial years.
28. Auditor’s remuneration
Audit Services
Amounts received or due and receivable by Elderton Audit Pty Ltd
- An audit and review of the financial reports of the Group
(including subsidiaries)
Amounts received or due and receivable by BDO Audit (WA) Pty Ltd
- An audit and review of the financial reports of the Group
(including subsidiaries)
Non-Audit Services
Total
2020
$
2019
$
23,700
29,618
20,284
-
43,984
-
-
29,618
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
71
Notes to the Consolidated Financial Statements
29. Parent entity information
The following details information related to the parent entity, Anglo Australian Resources NL, as at 30 June 2020. The
information presented here has been prepared using consistent accounting policies as presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Accumulated losses
Total equity
Loss after income tax *
Other comprehensive income/ (loss) for the period
Total comprehensive loss for the period
* Includes an impairment charge of $256,014.
2020
$
3,709,822
8,415,049
12,124,871
527,111
108,145
635,256
2019
$
608,102
5,874,443
6,482,546
652,223
61,820
714,043
11,489,614
5,768,503
43,575,908
1,089,936
(33,176,229)
11,489,614
(2,735,090)
(2,735,090)
(2,735,090)
35,292,993
916,649
(30,441,139)
5,768,503
(630,959)
(630,959)
(630,959)
Commitments
The parent entity has $2,700,322 (2019: $2,695,803) of commitments relating to minimum exploration expenditure on its
various tenements at financial year end.
Guarantees
The parent entity has given bank guarantees as at 30 June 2020 of $51,365 (2019: $38,000) to various landlords (refer
to Note 9).
72
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
Director’s Declaration
Director’s Declaration
In the Directors’ opinion:
(a) The financial statements and notes are in accordance with the Corporations Act 2001, and:
(i)
(ii)
(iii)
comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements;
give a true and fair view of the financial position as at 30 June 2020 and of the performance for the period
ended on that date of the Group; and
are in accordance with International Financial Reporting Standards issued by the International Accounting
Standards Board, as stated in note 1 to the financial statements.
(b) There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due
and payable.
The Directors have been given the declarations by the Managing Director as required by section 295A of the Corporations
Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
Directors by;
Marc Ducler
Managing Director
Perth, Western Australia
25 September 2020
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
73
ASX Additional Information
ASX Additional Information
Additional information required by the ASX Listing Rules not disclosed elsewhere in this Annual Report is set out below.
1. Shareholdings
The issued capital of the Company as at 17 September 2020 is 467,929,020 ordinary fully paid shares and 56,850,000
unlisted options (details below). All issued ordinary fully paid shares carry one vote per share.
Ordinary Shares
Shares Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and above
Total
Holders
Units
486
645
404
848
408
2,791
242,729
1,858,438
3,274,938
32,645,726
429,907,189
467,929,020
%
0.05%
0.40%
0.70%
6.98%
91.87%
100.00%
Unmarketable parcels
There were 817 holders of less than a marketable parcel of ordinary shares.
2. Top 20 Shareholders as at 17 September 2020
Name
Number of shares
1
2
3
4
5
6
PORTER STREET INVESTMENTS PTY LTD
BRAHAM INVESTMENTS PTY LTD
BRAHAM CONSOLIDATED PTY LTD
ACN 106 966 401 PTY LTD
S LOADER PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
7 MR PETER ANDREW STERN
8
9
C THWAITES PTY LTD
CITICORP NOMINEES PTY LIMITED
10
MR MATTHEW LLOYD HADDON
11 D & P BUCKLEY PTY LTD
12
13
MR GRAEME IAN SMITH
MRS ANGELA ORSARIS & MR JOSEPH CHRISTOPHER MARSILI
14 M & R HADDON PTY LTD
15 MRS SABINA FONTANA
16 M & A ISAACS PTY LTD
17 K & F FALCONER PTY LTD
18
19
DIXTRU PTY LIMITED
TERINGA GEORGE PTY LTD
20 VALBONNE II
Total Top 20
Total remaining holders balance
Total
32,419,616
25,958,502
25,700,579
23,250,000
17,011,105
14,918,637
12,166,667
10,160,400
6,400,802
6,242,081
5,893,829
5,700,000
5,254,837
4,332,917
4,200,000
3,948,263
3,875,000
3,750,000
3,746,723
3,500,000
218,429,958
249,499,062
467,929,020
%
6.93%
5.55%
5.49%
4.97%
3.64%
3.19%
2.60%
2.17%
1.37%
1.33%
1.26%
1.22%
1.12%
0.93%
0.90%
0.84%
0.83%
0.80%
0.80%
0.75%
46.68%
53.32%
100.00%
74
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
ASX Additional Information
3. Unquoted securities
There are 56,850,000 unlisted options over shares in the Company as at 17 September 2020 as follows:
Tranche
Grant date
Expiry date
A
B
C
D
E
F
G
H
I
30-Nov-15
25-Aug-16
8-Dec-16
29-Aug-17
2-Dec-19
2-Dec-19
2-Dec-19
6-Aug-20
6-Aug-20
30-Nov-20
30-Nov-20
30-Nov-20
30-Nov-20
27-Nov-22
27-Nov-22
27-Nov-22
31-Dec-21
31-Dec-22
Exercise
price
$0.02
$0.025
$0.04
$0.08
$0.135
$0.135
$0.135
$0.133
$0.15
Total unquoted options on issue at the date of this report
There are 14,341,709 performance rights on issue as at 17 September 2020 as follows:
number
29,800,000
10,100,000
2,500,000
8,950,000
1,000,000
1,000,000
1,000,000
1,250,000
1,250,000
56,850,000
Tranche
Class of
Securities
Grant Date
Exercise Price
Expiry
Date
Number of
Securities
A
B
C
D
Director
performance rights
23-Jun-20
Director
performance rights
23-Jun-20
Employee /
consultant
performance rights
Employee /
consultant
performance rights
23-Jun-20
23-Jun-20
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
Nil – performance rights vest and are
converted to ordinary shares on
achievement of performance
conditions
23-Jun-24
1,830,780
23-Jun-24
1,830,780
23-Jun-24
5,340,075
23-Jun-24
5,340,074
TOTAL
14,341,709
The names of the security holders holding more than 20% of an unlisted class of security are listed below:
Security
Options expiring 30
November 2020
Options expiring 30
November 2020
Options expiring 30
November 2020
Options expiring 30
November 2020
Options expiring 27
November 2022
Options expiring 31
December 2021
Options expiring 31
December 2022
Exercise
Price
Number of
options
Number
of holders
Holders with > 20%
$0.02
29,800,000
3 PORTER STREET INVESTMENTS PTY LTD – 77%
$0.025
10,100,000
4 PORTER STREET INVESTMENTS PTY LTD – 49%
$0.04
2,500,000
2
MR EDWARD JOHN BALTIS – 60%
TERRA RESOURCES PTY LTD – 40%
$0.08
8,950,000
6 PORTER STREET INVESTMENTS PTY LTD – 40%
$0.135
3,000,000
1 DAVID JOHN VARCOE
$0.133
1,250,000
1 CG NOMINEES (AUSTRALIA) PTY LTD
$0.15
1,250,000
1 CG NOMINEES (AUSTRALIA) PTY LTD
Total
56,850,000
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020
75
ASX Additional Information
4. Voting rights
See Note 18 of the financial statements.
5. Substantial shareholders as at 17 September 2020
Holder
John Load Cecil Jones / Porter Street Investments Pty Ltd
Braham Investments Pty Ltd / Braham Consolidated Pty Ltd
and Simon Anthony Richard Braham
6. Restricted securities subject to escrow period
There are currently no securities on issue subject to escrow.
7. On-market buyback
Number of
shares held
37,102,177
% of issued
capital held
Date of last
notice
7.99%
6-Aug-20
50,869,688
10.92%
20-Mar-20
There is currently no on‐market buyback program for any of Anglo Australian Resources NL’s listed securities.
76
ANGLO AUSTRALIAN RESOURCES NL / ANNUAL REPORT 2020