Annual Report
2020
TABLE OF
CONTENTS
CHAIRMAN’S LETTER
OPERATING AND FINANCIAL REVIEW
ADVANCED MATERIALS
Quantum Technology
Human Health
Reliable Energy
MINERAL EXPLORATION
TENEMENT INTERESTS
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
AUDITOR’S INDEPENDENCE DECLARATION
FINANCE INFORMATION
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR
ENDED 30 JUNE 2020
DIRECTORS DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL INFORMATION
03
06
10
12
18
22
23
27
28
32
42
45
50
77
78
82
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Annual Report 2020 / Archer Exploration Limited
Annual Report 2020 / Archer Materials Limited
Chairman’s Letter
CHAIRMAN’S
LETTER
Financial Year 2020 was
busy and successful
as we accelerated our
transition of the Company
away from mineral
exploration and toward
materials technology.
Throughout the year, the
focus on the materials
technology transition
increased significantly.
In less than two years since announcing the commencement of our 12CQ Project,
we have made substantial progress on creating a new culture and identity, while
maintaining our habit of doing high-quality work cost-effectively.
During the year we delivered all that we announced at the start of the year and
more. We further sharpened Archer’s strategic focus on Quantum Technology,
Human Health and Reliable Energy. We continued to divest non-core exploration
tenements and assets as a means of funding the Advanced Materials Business,
and on 2 July 2020 completed the divestment of the Leigh Creek Magnesia
Project for $2.8 million.
Our exploration tenements are no longer core to our materials technology
business strategy. We will continue the divestment of our remaining exploration
projects in a disciplined way to maximise the value of these assets as we
continue to shift our portfolio toward our Advanced Materials Business.
Annual Report 2020 / Archer Materials Limited
Annual Report 2020 / Archer Materials Limited
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Chairman’s Letter
CHAIRMAN’S
LETTER
Our positive results and progress to date are the product of bold moves made more than two years ago to
transform Archer from a junior mineral explorer to a developer of world-changing technologies and positioning
the Company for strong growth. We embarked on this transition at a time when few other people recognised the
potential of quantum computers. Archer was able to see the technological transformation path of the Company,
our Company, and we decided to follow it.
It has not been easy to drive the transformation of Archer while also meeting the needs of shareholders and
potential investors. We have had to carry out this transformation in an environment that was not favourable to this
change. Today Archer is considerably more robust than it was two years ago. Although we have already seen an
increase in our share price, we are convinced that the share price still has further growth potential to better reflect
the true value of the Company. The transformation of a company with 13 years of history requires both time and
effort, and we are starting to see the positive results of these efforts.
At times over the past few years, Archer has been perceived to be a complicated and diverse company. Dr
Choucair and his team have worked hard to simplify the way we explain our business to potential investors,
brokers and analysts. More and more, people now “get” our story and understand what drives our strategy and
vision. In building an materials technology company, we have not limited our vision to the next quarter or even to
the following two, but are re-shaping the Company for the next 20 or 30 years.
Share markets can be fickle, but our share-price performance over the last 12 months would suggest that our
shares are slowly being re-rated, even given recent share market volatility. Consistent results in the future will
hopefully support a further re-rating, closer to the multiples being achieved by our domestic and overseas peers.
We are now the only ASX listed Company that offers shareholders exposure to the ever-growing world of
quantum computing. By developing our Advanced Materials Business, we have laid the foundation for a new
era of technology and business. We have made considerable progress in a short amount of time, and it’s easy to
forget that we are still in the early stages of a long cycle of a technological revolution.
With our Advanced Materials Business, we have deliberately selected technologies that we believe can make
a real contribution to society and help to find solutions to global challenges. We believe that this strategy will
enable us to maximise value for our shareholders and have a long-term positive impact on the Company.
Our primary focus during the past 12 months has been on the development of the room temperature quantum
computer chip. We believe that over the next few years that quantum computing will move from the high-tech
lab to mainstream commercial use, representing the next major breakthrough in modern IT. Quantum computing
represents a sweeping technological breakthrough that is set to change so much of the way we work and
interact. Its disruptive potential exceeds that of the internet, smartphones and cloud computing combined, and
the way governments and economies operate will be radically and fundamentally altered.
Our most significant transaction during the year was the collaboration agreement with IBM. As part of the
agreement between Archer and IBM, Archer is the first Australian Company building a quantum computing qubit
processor to join the global IBM Q Network as an ecosystem partner. We have already begun accessing IBM’s
quantum computing expertise and resources, and open-source Qiskit software and developer tools.
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Annual Report 2020 / Archer Materials Limited
Chairman’s Letter
IBM has also provided Archer access to the IBM Quantum Computation Center, which includes the most
advanced quantum computers commercially available to explore practical applications. We will continue to work
with IBM to seek mutually beneficial collaborative opportunities for the advancement of quantum computing.
Such options may include demonstration and development of actual and conceptual quantum processors and
hardware, algorithms, applications, and business use cases.
During the year, we continued to develop IP associated with a potential solution to graphene-based biosensors
capable of complex detection of disease. A set of new graphene materials has been designed by Archer that
could be directly applied for enhanced biosensing and their processing into biocompatible inks in water-
based solvents, eliminating the use of hazardous and non-biocompatible chemicals, increasing the scope of
biomolecules that can be detected. We have made considerable progress with the biosensing interface, data
processing, and design and fabrication of materials electrodes critical to the biosensor technology function and
will continue this work in 2021.
Quantum computers, our graphene ink biosensor and other advanced technologies are changing the very
nature of our work. To keep up with the rate and pace of these changes, Archer has been growing our team
and recruiting skilled technicians. At the heart of our workforce transformation is the constant recruitment of
employees with relevant skills and access to world-class equipment, laboratories and experts. Over the last two
years, we’ve increased our hiring of technology focussed roles, and this work will continue into 2021.
We achieved a significant milestone in our collaboration agreement with IBM and technologies being developed
by our team will position us for the future. We have a unique offering, a strong balance sheet, and a dedicated
and talented team. We are a Materials Technology company, and we know what we need to do in order to
succeed in 2021 and the years ahead.
Archer is now set for a future that is different from its past, but some things won’t change. We will continue to
sell our mineral exploration projects to fund our Advanced Materials Business and conduct all of our activities
professionally and cost-effectively.
We take this opportunity to thank all our employees for their dedication and energy in making 2020 a success.
We also express our gratitude to our partners who provide us with the laboratories, tools and equipment to
allow us to do our work. Finally, we thank our shareholders for your continued support, trust and confidence.
Greg English
Executive Chairman
Adelaide
Dated this 25th day of September 2020
Annual Report 2020 / Archer Materials Limited
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Operating and Financial Review
STRATEGY
Archer is a materials technology company with a focus on developing innovative
deep tech. The licencing, acquisition and ownership of intellectual property
assets is part of Archer’s strategy to commercially develop materials technology
in the key areas of quantum technology, human health, and reliable energy.
The Company’s strategic execution priorities are:
• Building and commercialising the 12CQ quantum computing chip.
• Patenting and developing graphene-based biosensors.
• Discovering and integrating advanced materials in energy storage technologies.
In addition, the Company will look for opportunities to divest non-core exploration
assets to fund the Company’s activities. The sale of the Company’s Leigh Creek
Magnesia Project is consistent with this strategy.
In 2019/2020 the Company:
• Gained commercial access to world class infrastructure, facilities, and technical
experts in Australia, Switzerland, and the US to develop Archer’s deep tech.
• Successfully built and tested qubit components of the 12CQ quantum computing
chip in an Australian semiconductor foundry, while progressing international
patent applications in the EU and Japan.
• Signed a quantum computing agreement with IBM which supports Archer’s
plans to use Qiskit as the software stack for the 12CQ chip technology and
joined the invite-only global IBM Q Network as an ecosystem partner – the
first Australian company building a qubit processor chip to do so.
• Commenced prototyping the Company’s graphene biosensor technology and
filed an international patent application to protect the underlying intellectual
property.
• Prepared and tested high-value lithium-ion battery anode materials with
commercially relevant cathode formulations for the of Archer’s Eyre Peninsula
Graphite Project.
In 2020/21, Archer’s growth involves:
• Development of the 12CQ quantum computing chip and the Company’s
graphene-based biosensor technology.
• Active collaboration with IBM and participation in the global IBM Q Network.
• Acquiring new materials technology for inclusion in the key area of reliable
energy.
• Hiring new staff to expedite the development of Archer’s deep tech.
• Divesting the Company’s non-core exploration assets.
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Operating and Financial Review
SUMMARY OF
FINANCIAL
PERFORMANCE
The net loss of the Group for the 2019/20 financial year was $2,816,890 (2019:
$1,738,332) after accounting for R&D tax concession benefits of $238,859
(2019: $102,421) and includes mineral exploration impaired and written off
$350,609 (2019: $82,159) and a non-cash share based payments expense of
$997,000 representing the fair value of the 17,500,000 unlisted options issued
to employees in November 2019.
During the year ended 30 June 2020 the Group’s net cash position increased
by $7,418,933 from $695,749 (1 July 2019) to $8,114,682 (30 June 2020) and
no corporate debt. This net increase in cash was predominantly influenced
by cash inflows associated with two share purchase plans ($8,355,600), the
exercise of share options ($256,557) and research and development tax
incentive ($102,421). These inflows were offset by outflows associated with
direct expenditure on advance materials & technology activities ($493,589),
exploration expenditure ($987,776) and wages, corporate & administration
expenditure ($1,193,706).
Annual Report 2020 / Archer Materials Limited
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Operating and Financial Review
CHANGES IN
SHARE CAPITAL
SHARES
UNLISTED OPTIONS
The number of shares on issue increased from
196,304,283 (1 July 2019) to 224,354,823 (30 June 2020)
during the year as a result of the following events:
The number of share options on issue increased from Nil (1
July 2019) to 18,170,000 (30 June 2020) during the year as
a result of the following events:
• Shares issued under two share purchase plans
• 17,500,000 share options were issued to Directors
(25,933,040 shares).
• Shares issued following the exercise of share options
(1,330,000 shares)
• A total of 787,500 shares were issued to Archer Directors
and employees following the vesting and exercise of
performance rights previously issued to them.
PERFORMANCE RIGHTS
The number of performance rights on issue decreased
from 1,050,000 (1 July 2019) to Nil (30 June 2020)
during the year as 787,500 performance rights vested
into an equivalent number of shares following the
satisfaction of the performance conditions for the year
ended 30 June 2019.
and employees following shareholder approval at the
Company’s Annual General Meeting held on 30 October
2019. The share options are exercisable at $0.1929 each
and expire on 31 March 2023.
• 1,330,000 share options (exercise price of $0.1929 and
expiry date of 31 March 2023) were exercised into shares.
• 2,000,000 share options were issued to a consultant
who was assisting in the development of the Company’s
halloysite-kaolin projects. The share options were
exercisable at $0.245 each end expiry date of 31 March
2023, and subject to particular vesting conditions. The
share options did not vest and were forfeited subsequent
to year end in accordance with the terms on which they
were issued.
The remaining 262,500 performance rights were forfeited.
DIVIDENDS
No dividends were declared or paid during the financial
year. No recommendation for payment of dividends has
been made to the date of this report.
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Annual Report 2020 / Archer Materials Limited
Operating and Financial Review
FACTORS AND RISKS
AFFECTING FUTURE
PERFORMANCE
The following describes some of the external factors and business risks that could have a material impact on
the Company’s ability to deliver its strategy:
ACCESS TO FUNDING
COVID-19
The Company does not receive any income from its
operating business and the Company is reliant on capital
raisings and the sale of non-core assets to fund its future
operations. Therefore, the Company’s ability to continue
to develop its Advanced Materials and Mineral Exploration
businesses is contingent upon the Company’s ability to
source timely access to additional funding as it is required.
KEY AGREEMENTS
Development and commercialisation of the 12CQ qubit
processor chip intellectual property and associated
international patent applications are dependent on
the Licence Agreement with the University of Sydney
remaining in-place. Termination of the Licence Agreement
would mean that Archer would be unable to access
the intellectual property required to commercialise the
associated quantum technology. As at the date of this
document, the Company is not aware of any grounds
that the University of Sydney may have to terminate the
Licence Agreement.
The development of the Company’s technologies
requires access to institutional scale infrastructure and
facilities which if shutdown due to COVID-19 would
restrict Company access during the periods of closure.
The Company currently has access to facilities and
collaborators in numerous locations in Australia, Germany,
Switzerland, and the USA to help limit the impact of any
closures. Australian border closures and restrictions on
international and domestic travel may limit the Company’s
ability to hire personnel and perform development work in
facilities interstate and abroad.
KEY PERSONNEL
The Company’s technology is unique, with very few people
available globally with the required knowledge, skills,
relationships and experience to develop the technologies
towards commercialisation. The Company’s projects may
be delayed if key personnel are not available to work on
the projects.
PATENT APPLICATIONS
Commercially exploiting and legally protecting the
intellectual property underlying the Company’s graphene-
based biosensor development technology is dependent
on the Company progressing its associated patent
applications. As at the date of this document, the Company
is not aware of any grounds that the patent application
would lapse.
GOVERNMENT APPROVALS
The Company is only permitted to commence mining
of the Campoona Graphite resource (Campoona) once
it obtains a Program for Environmental Protection and
Rehabilitation (PEPR). A PEPR for small scale graphite
recovery from Campoona has been lodged with the South
Australian Government and has not yet been granted,
however the Company has no reason to believe that the
PEPR will not be granted.
Annual Report 2020 / Archer Materials Limited
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Advanced Materials
Advanced Materials
ADVANCED
MATERIALS
Advanced materials are the tangible, physical basis of Archer’s technology. The successful development and
commercialisation Archer’s deep tech could disrupt and revolutionise global multibillion-dollar industries.
The most crucial resources Archer is utilising in its early-stage commercialisation phase to deliver shareholder value
includes employing pioneers with strong technical expertise, securing intellectual property with a long-term competitive
advantage, establishing commercial access to world-class technology development infrastructure, and collaborating with
highly-resourced organisations in industry - and market-leading positions.
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Advanced Materials
Archer staff in a semiconductor foundry using 12CQ chip fabrication instruments.
Annual Report 2020 / Archer Materials Limited
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Quantum Technology
QUANTUM
TECHNOLOGY
Quantum computing
represents the next
generation of powerful
computing. A qubit
processor is the most
crucial hardware component
in quantum computers.
12CQ is a world-first qubit processor chip technology that Archer aims to build
for quantum computing operation at room-temperature and integration onboard
modern electronic devices.
Qubit processors are being developed to implement ‘quantum algorithms’
that may address applications that classical computers find extremely difficult
or impossible. The applications that could greatly benefit from onboard qubit
processors include complex image processing, and securing communications and
financial transactions.
Archer is well-positioned to successfully build and commercialise an operational
qubit processor as a potential solution to the widespread use of quantum
computing, as:
• Archer is using the only reported conducting qubit material capable of stable
Archer’s
and robust quantum information processing at room-temperature: a key barrier
to use for any future quantum computing powered consumer devices.
nanofabricated
three qubit array
on a silicon testbed
• A quantum computing agreement signed with IBM, which supports Archer’s
chip.
plans to use Qiskit as the software for 12CQ processors, and participation in the
global IBM Q Network as an ecosystem partner – the first Australian company
building a qubit processor to do so.
• Archer has commercial access to the infrastructure, chip foundries, and
collaborative partnerships (85+ personnel), and exclusive international rights to
the IP needed to build the 12CQ qubit processor chip prototypes which is being
led by the Company’s in-house nanotech and quantum tech experts.
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Annual Report 2020 / Archer Materials Limited
Quantum Technology
QUANTUM
COMPUTING IS
REVOLUTIONARY
DEEP TECH
The Company started building the 12CQ chip in April 2019, and since then has
been on-track in its world-first technology development. During 2019/2020,
the Company achieved significant technology milestones and met industry
key success factors related to the 12CQ chip build for future device scalability,
integration and operation.
Increases in value in the multibillion-dollar quantum computing economy is
in maturing the commercial viability of quantum hardware i.e. technology
development. This is because the broader semiconductor industry critically
depends on hardware (e.g. qubit processors), of which there are few players,
and no ‘off-the-shelf’ quantum processor chip designs.
Archer has established a track record of overcoming difficult technological
challenges in the end-to-end nanofabrication, assembly, and prototyping of
the 12CQ chip components. The first components of the 12CQ were assembled
in June 2019. Within months, the Company had positioned a single qubit
component with nanometer precision (Aug 2019), and applied that acquired
knowledge to create few qubit arrays (Nov 2019).
Annual Report 2020 / Archer Materials Limited
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Quantum Technology
BUILDING A
WORLD-FIRST
QUBIT PROCESSOR
The quantum measurements that are required and form
the basis of the chip basic function – which is necessary
for quantum information processing – began in early
2020. This required Archer to strategically expand the
Company’s direct access to infrastructure, specialised
measurement instruments, and internationally recognised
researchers, with a focus on several complementary
approaches to achieve quantum electronic and magnetic
characterisation.
The Company has been successful in securing access
to state-of-art quantum measurement infrastructure,
technical expertise, and development facilities, both locally
and internationally, including world-renowned institutes;
University of Sydney, École Polytechnique Fédérale de
Lausanne (Switzerland), and UNSW Sydney. Archer also
has commercial access to a local semiconductor foundry
where the Company is building its 12CQ chip prototype.
Qubit materials are the critical components of a quantum
computing processor. A high level of accuracy is required
in physically positioning 12CQ qubits, which are only a few
nanometers in size, to successfully build a working device.
It is incredibly difficult to apply such a high of degree
precision in controlling qubit location; however, Archer
unambiguously achieved this, making it possible to scale
12CQ chip qubits.
Archer assembled and patterned a nanometre-size array of
several individual qubits. To assemble the few-qubit array
of Archer’s chip, three individual qubits were isolated on
a silicon wafer with nanoscale precision and was carried
out at room temperature. The arrangement of the qubits
was repeatable and reproducible, and provided credibility
to the [patent application claims] of 12CQ chips being
potentially scalable and therefore useful.
A useful qubit processor chip will need to have a number
of qubits arranged in various patterns to run algorithms
e.g. to perform transactions, or in error-correcting quantum
information processing. Today’s quantum computers
have at best a few dozen qubits, so it is important Archer
definitively showed the possibility of scaling qubits early in
development, allowing for the next stages of development,
which involve quantum information measurement.
Archer staff operating instrumentation
for qubit conductivity measurements.
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Annual Report 2020 / Archer Materials Limited
Quantum Technology
THE QUANTUM
IN QUANTUM
COMPUTING
Archer successfully performed its first quantum
measurement on a single 12CQ qubit component in June
2020. The conductivity measurements represent the limits
of what can be achieved technologically in the world today.
Room-temperature conductivity of the 12CQ chip qubit
component was directly proven. This reinforced Archer’s
commercial advantage over competing qubit proposals that
are difficult to integrate onboard portable devices.
The technological significance of the conductivity
measurements is inherently tied to the commercial
viability of the 12CQ technology. The room-temperature
conductivity potentially enables direct access to the
quantum information stored in the qubits by means of
electrical current signals on-board portable devices,
a requirement for a working 12CQ chip; another being
‘quantum information control’ which is a major focus for
Archer in 2020-2021.
Quantum measurement set
up for qubit characterisation.
Annual Report 2020 / Archer Materials Limited
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Quantum Technology
COLLABORATION
WITH A QUANTUM
COMPUTING
GIANT
In May 2020, only a year after commencing 12CQ, Archer
achieved its first major commercial milestone in its 12CQ
technology development by entering into an agreement
with International Business Machines Corporation (“IBM”)
to work together on the advancement of quantum
computing. Archer is the first Australian company building
a quantum computing qubit processor to join the global
IBM Q Network as an ecosystem partner.
The agreement with IBM supports Archer’s plans to use
IBM’s open-source framework, Qiskit, as the software
stack for the future 12CQ qubit processor chip technology.
Archer has begun accessing IBM’s quantum computing
expertise and resources, and open-source Qiskit software
and developer tools. IBM has also provided Archer access
to the most advanced quantum computers commercially
available to explore practical applications.
Archer and IBM will seek mutually beneficial collaborative
opportunities in the advancement of quantum computing.
Such opportunities may include demonstration and
development of actual and conceptual quantum
processors and hardware, algorithms, applications, and
business use cases. All of Archer’s intellectual property
rights and title to pre-existing materials are unaffected by
the agreement.
Archer maintains an exclusive licence to all the intellectual
property rights (“IP”) related to the 12CQ chip technology,
including patent applications filed under the Patent
Cooperation Treaty (“PCT”) to protect and commercialise
intellectual property internationally. PCT application
includes Australia, China, Japan, Republic of Korea, United
States of America, European Union, and Hong Kong.
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Annual Report 2020 / Archer Materials Limited
Quantum Technology
PROTECTING
A GLOBAL
COMPETITIVE
ADVANTAGE
The successful development of the 12CQ technology can have a big impact
globally. The technology is based on novel quantum technology, and even at
the early stage of development has demonstrated significant advances over
quantum computing qubit processor technologies currently in use or proposed.
Therefore, protecting the underlying IP in strategic jurisdictions around the world
is critical to maintain Archer’s valuable long-term competitive advantage.
The international PCT application continues to significantly progress in a number
of jurisdictions at various stages of the patent granting procedure. In May and
June 2020, the European and Japanese patent applications respectively,
proceeded to substantive examination stages. The EU and Japan are major
global economies rank amongst the top economies in the world for global
competitiveness and GDP.
As the Company progresses on all development fronts: technology, commercial,
and IP, Archer is being acknowledged on the world stage due to our success
and potential to make a positive impact in the quantum economy; a deep tech
economy that according to the CSIRO’s roadmap titled Growing Australia’s
Quantum Technology Industry (that Archer contributed to), could create an $86
billion global deep tech industry by 2040.
Annual Report 2020 / Archer Materials Limited
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Human Health
HUMAN
HEALTH
Disease
detection
is limited
because there
are only a
handful of
materials in
existence that
can perform
complex
biosensing.
Graphene-based biosensor devices 2D printed on a circuit board that has been incorporated
into the custom designed and 3D printed cartridge made from ABS. The cartridge is opened
and the interior shown.
Graphene is a material that is electronically active, ultra-sensitive and
biocompatible, which is ideal for biosensing. Archer is developing
graphene-based biosensor technology by exploiting advanced materials
at the atom-scale for potential high-value end uses, including in the
multibillion-dollar biosensor industry.
Archer is building complex biosensors from the bottom-up, at the single
molecule level, to create significant commercial and technological
barriers in current biosensor development. R&D resources, knowledge,
data, skills, expertise (both technical and go-to-market), and industry
contacts, are available to Archer in-house, and through engagements with
the ARC Graphene Hub and a leading German Biotechnology company.
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Human Health
UNLOCKING VALUE
IN THE BIOTECH
ECOSYSTEM
There is no doubt that diseases have a devastating effect on
economies and there is value in advancing disease diagnosis using
simpler, more accurate biosensors. However, as there are only a
limited number of materials that can perform biosensing, innovative
development is still required, and remains highly-valued by the
biotech industry.
Graphene is a material that offers potential solutions to complex
disease detection. However, a very high level of technical
understanding is required to realise the value of graphene-based
materials technology, including biosensors. Value from graphene
is derived at the atom level – which has been the focus of Archer’s
biosensor technology development in 2019-2020.
Archer is well-positioned to successfully commercialise its graphene-
based biosensor technology as a potential solution to complex disease
detection. Archer CEO, Dr Mohammad Choucair, was the first in the
world to directly synthesise graphene in bulk-scale quantities using
chemical feedstocks that are readily available to Archer.
The Company has rapidly advanced from raw material feedstock
to prototypes of a portable battery powered sensing device that
can incorporate biological material. This early stage work has the
potential to allow much simpler and more effective sensing where
early diagnosis of life-threatening diseases can lead to much improved
outcomes.
A number of achievements have been made during the year that relate
to the biosensing interface, data processing, and design and fabrication
of materials electrodes critical to Archer’s biosensor technology
function. This led to the testing of early-stage portable battery
powered prototypes, which circumvent the need for cumbersome
instrumentation and allows for point of use application.
A set of new graphene materials was developed by Archer that could
be directly applied for enhanced biosensing and their processing into
biocompatible inks in water-based solvents, eliminating the use of
hazardous and non-biocompatible chemicals, and increasing the scope
of biomolecules that can be detected. Laboratory synthesis was also
complemented with computational models to efficiently explore for
materials candidates in biomolecular sensing.
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Human Health
WELL PROTECTED IP
IS CHARACTERISTIC
OF SUCCESSFUL
DEEP TECHS
Archer’s key execution priority in the Human Health
stream involves the prosecution of patents related to the
development of graphene-based biosensor technology.
This year, the Company successfully filed a patent
application under the Patent Cooperation Treaty (“PCT”)
with the World International Patent Organization (“WIPO”)
via IP Australia, maintaining the priority date established
from the Company’s provisional patent application.
Filing an international patent application represents the
first step in the commercialisation of the Company’s
graphene biosensor technology. Importantly, Archer
maintains 100% ownership of this new Company asset
having independently generated the IP through inventor
Archer CEO, Dr Mohammad Choucair.
The International Search Report and Opinion of the
International Searching Authority were received and are
currently under review. The PCT continues to progress and
is currently in the International Phase in the patent granting
procedure, which is the first of two main phases, the
second being the National Phase . Filing a PCT application
will allow Archer to decide which countries to have patent
protection in and will allow for international protection,
which can last for up to 20 years.
Protecting Archer’s IP is central to the Company’s
commercial strategy, which involves applying the triple-
helix business model for biotechnology innovation to
develop the graphene-based biosensor technology and
sublicense the associated intellectual property rights to
generate revenue. The commercialisation requires a three-
prong approach involving:
• Developing commercial prototypes of in-vitro diagnostic
biosensing devices by assembling and testing proprietary
graphene-based componentry capable of enabling rapid
multi-disease detection and device integration.
• Prosecuting strong patent applications in Australia, the US
and EU and to protect the intellectual property rights to
the biosensor technology.
• Establishing commercial partnerships with highly
resourced organisations in the biotechnology industry
with existing global distribution channels.
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Human Health
VALUE-
CREATION
AND THE
TRIPLE-HELIX
BUSINESS
MODEL
Archer’s graphene-based biotechnology is at an early stage of
commercialisation. During the year, Archer engaged with independent
technical and commercial advisors (“Advisors”) within the Australian
biotechnology industry to produce a comprehensive strategic
commercialisation roadmap (“Roadmap”) for Archer’s graphene-based
biosensor technology. The Roadmap remains commercial-in-confidence.
The independent research conducted by the Advisors indicates
that within the multibillion-dollar biosensing industry, commercial
transactions in the 5-year period between Jan 2014 to Dec 2019 related
to diagnostics in development (i.e. not marketed):
• the average acquisition value of disclosed terms exceeded US$100
million; and
• of the 100+ partnerships and asset purchases, disclosures that were
made indicated average transactions of US$20 million+.
Due to the long-term time frames associated with diagnostic deep tech
development, later stage (and derisked) diagnostic technology (i.e. in-
market) attracted larger size commercial transactions, with the average
disclosed value from 50+ transactions, exceeding US$600 million.
There were 450+ publicly announced partnerships and asset purchases,
where average transactions exceeded US$230 million.
Annual Report 2020 / Archer Materials Limited
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Reliable Energy
RELIABLE
ENERGY
Materials discovery
is a hallmark of
human progress.
Traditional, laborious methods, to realise new materials
are giving way to sophisticated combinatorial approaches
that rely on high powered computing. Archer is exploring
next-generation materials discovery schemes to develop
materials portfolios that meet the minimum performance
requirements and market accepted benchmarks in energy
storage technologies, including lithium-ion (“li-ion”)
batteries.
Archer is leveraging its partnerships with highly resourced
organisations to identify performance trade-offs in energy
storage technologies using new materials with the aim of
licencing the intellectual property rights associated with
their efficient early-stage discovery. In 2019/2020, this has
involved optimising, has involved optimising, creating and
testing high value-added anode materials products and
processes atom-by-atom, in real-world full-scale lithium-ion
batteries.
MATERIALS TO ADDRESS THE COMMODITISATION
OF ENERGY
The 2019 Nobel Prize in Chemistry was awarded for
the development of lithium-ion batteries, reflecting the
significant impact of portable energy storage and use,
and the multibillion-dollar industry that it created. It is a
fundamental global challenge to efficiently determine
early-stage materials candidates for use in batteries from
the vast combinations of formulations possible.
22
Annual Report 2020 / Archer Materials Limited
Highly powerful computing is accelerating the discovery
and design process of new battery materials that would
otherwise have consumed a tremendous amount of time and
resources. This year, Archer began formulating, building, and
testing full-cell lithium-ion batteries using graphite derived
anodes with different end-use cathode chemistries.
Li-ion batteries consist of a group of batteries which operate
with graphite in the anode. Improvements in the anode offer
significant commercial development potential and are based
on using graphite with high structural quality and purity, and
an appropriate particle size and optimal morphology for
effective lithium-ion intercalation chemistry.
Graphite is listed as a critical mineral by Australia, the US,
EU, and Japan. Australia’s demonstrated economic resource
is approximately 7140 kilo tonnes, however graphite is not
currently produced in Australia. Global production of graphite
is estimated at 1200 kilo tonnes with a global market value of
over US$1 billion.
The Archer team produced high-value coated spherical
graphite (“CSG”) materials using natural flake graphite from
Archer’s 100% owned Eyre Peninsula Graphite Project,
which is relevant to the growing global markets serviced by
lithium-ion batteries, including electric vehicles and portable
electronics.
CSG materials were successfully tested in lithium-ion
battery prototypes with enhanced performance in-line with
industry benchmarks for CSG anodes. This now allows
Archer to pursue downstream partnership and development
opportunities with lithium-ion battery manufacturers, graphite
processing options, and high-value graphene and graphitic
materials.
The achievements made will allow Archer to grow the
Reliable Energy vertical to include strong IP, access to
infrastructure for the development of materials in energy
technologies and attracting pioneering technologists to join
the Company to establish a core function of computational
materials discovery relevant to global challenges in energy
management.
Mineral Exploration
MINERAL
EXPLORATION
All materials on earth trace back to naturally occurring
resources, with mineral exploration providing the
foundation of value creation in the mining industry. As a
result, the discovery of high-value deposits is crucial to
future technology development. Archer owns a broad-scope
of mineral tenements in Australia hosting various industrial
minerals and metals, at different stages of development,
including potentially valuable mineral resources.
Archer’s strategy to build an industry-leading materials
technology company involves efficiently monetising the
Company’s mineral exploration assets. This year, Archer
successfully sold its Leigh Creek Magnesia Project, and
readied a number of projects for commercialisation, namely
related to the industrial mineral Kaolin. This involved low-
cost fieldwork, including basic drilling programs, metallurgy,
advisory and technical reviews.
GLOBALLY IN-DEMAND CRITICAL MINERALS
Australia is rich in minerals and has some of the world’s
largest economic demonstrated resources, amounting to
a global market value of $60bn+ in critical minerals alone.
Mineral exploration involves collecting and analysing
geological information to identify mineral deposits, as well
as determining their economic feasibility.
Archer maintains 100% ownership of 20+ mining and
exploration licences for a diverse range of minerals in
Australia (see Additional Information section). During the
year the Company generated, collated, and reviewed
geological information to monetise key projects, including
completing limited drill programs in South Australia.
A key strategic execution priority this year was the sale
of Archer’s Leigh Creek Magnesia Project (“Magnesia
Project”), which was announced in 2018, whereby Archer
received $250,000 in 2018 and a further $2.0 million and
a conditional bonus payment were due at the completion
of the sale process scheduled for June 2020.
Archer sold the Magnesia Project to two companies, and
this year one of the companies was purchased by Volatus
Capital Corporation (CSE:VC). Archer received approx.
$2.64 million worth of Volatus shares and may be entitled
to receive a further bonus payment should there be a
future transaction with the other company involved in the
Magnesia Project sale.
During the year the Company identified prospects for
tin, tungsten, and nickel mineralisation across various
tenement areas, and reviewed a number of prospects for
gold across large regions in Australia based on historical
information. However, Archer’s exploration focus was in
developing the Company’s two Kaolin-Halloysite Projects
in South Australia.
Archer’s Kaolin-Halloysite Projects are in early-stages
of development (named Franklyn and Eyre Peninsula).
Kaolin and halloysite are alumina-based clays, that can
naturally occur intermixed, and are potential feedstocks
in processing high-value materials used in deep-tech
and industrial applications like LEDs and petrochemical
catalysis.
Drilling was completed at both Kaolin-Halloysite Projects
and was successful in recovering kaolin. Microscopy
directly identified halloysite (a high-value form of kaolin),
at various prospects. These excellent early-stage
exploration results support the Company’s continued
activities to commercialise its Kaolin-Halloysite Projects
through sale or joint venture.
The Company’s Altimeter and Eyre Peninsula projects
are prospective for copper and gold. The large scale
structural settings and abundance of reported copper and
gold mineralisation make these areas ideal exploration
targets. Archer will look to sell these large projects during
the next 6 - 12 months.
Annual Report 2020 / Archer Materials Limited
Annual Report 2020 / Archer Materials Limited
23
23
Mineral Exploration
as at 30 June 2020
EYRE PENINSULA GRAPHITE PROJECT
JORC 2012 Compliant
Project
Category
Cut-off grade
(% Cg)
Tonnes
(Mt)
Campoona Shaft
Central
Campoona
Wilclo South
Total Resource
Measured
Indicated
Inferred
Indicated
Inferred
Inferred
>5.0
>5.0
>5.0
>5.0
>5.0
>5.0
LEIGH CREEK MAGNESIA PROJECT
JORC 2012 Compliant
Project
Category
Mount Hutton Central
Measured
Indicated
Total Resource
JORC 2004 Compliant
Project
Category
Mount Hutton South
Mount Playfair
Pug Hill
Termination Hill
Witchelina
Total Resource
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
Inferred
24
Annual Report 2020 / Archer Materials Limited
0.32
0.78
0.55
0.22
0.30
6.38
8.55
Tonnes
(kt)
12,059
5,460
17,523
Tonnes
(Mt)
72
53
21
23
10
10
4
5
20
23.7
94
99
434.7
Graphitic
Carbon
%
12.7
8.2
8.5
12.3
10.3
8.8
9.0
Contained
Graphite
(t)
40,600
64,000
46,800
27,100
30,900
561,400
770,800
MgO
(%)
40.1
40.3
40.2
MgO
(%)
42.9
42.9
42.5
42.5
42.7
42.7
42.8
42.8
42.8
40.0
40.0
40.0
41.4
COMPETENT PERSON STATEMENT
The Mineral Resources Statement as a whole has been
approved by Wade Bollenhagen who consents to its
inclusion in the Annual Report in the form and context in
which it appears.
The exploration results and exploration targets reported
herein, insofar as they relate to mineralisation, are based on
information compiled by Mr Wade Bollenhagen, Exploration
Manager of Archer Materials Limited. Mr Bollenhagen
is a Member of the Australasian Institute of Mining and
Metallurgy who has more than twenty years’ experience
in the field of activity being reported. Mr Bollenhagen
has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration
and to the activity that he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the
“Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves” relating to the
reporting of Exploration Results.
Mr Bollenhagen consents to the inclusion in the report of
matters based on his information in the form and context in
which it appears.
CAMPOONA SHAFT AND CENTRAL CAMPOONA
The information pertaining to the Campoona Shaft and
Central Campoona Mineral Resource estimates were:
• detailed in an announcement entitled “Archer Exploration
announces Australia’s largest JORC 2012 Graphite
Resources”, lodged with ASX on 6 August 2014.
• prepared by Mr B Knell who is a Member of the AusIMM
and peer reviewed by Dr C Gee who is also a Member of
the AusIMM (CP). At the time of the report Mr Knell and
Dr Gee were both full time employees of Mining Plus Pty
Ltd and both qualify as Competent Persons as defined in
the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’.
WILCLO SOUTH
The information pertaining to the Wilclo South Mineral
Resource estimate was:
• extracted from an announcement entitled “Maiden Wilclo
South Graphite Resource”, lodged by Monax Mining
Limited with ASX on 26 August 2013.
• prepared by Ms Sharon Sylvester who at the time of the
report Ms Sylvester was a full-time employee of AMC
Consultants Pty Ltd and qualifies as a Competent Person
Mineral Exploration
as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’.
CONFIRMATION BY ARCHER
The Company confirms it is not aware of any new
information or data that materially affects the information
included in the original market announcements referred to
above and, in the case of estimates of Mineral Resources,
that all material assumptions and technical parameters
underpinning the estimates in the relevant market
announcements continue to apply and have not materially
changed. The Company confirms that the form and context
in which the Competent Person’s findings are presented
have not been materially modified from the original market
announcement.
EYRE PENINSULA GRAPHITE PROJECT
There has been no change in the Campoona Shaft, Central
Campoona or Wilclo South Mineral Resource estimate
stated as at 30 June 2020. Accordingly, no comparison is
provided.
The information pertaining to the Campoona Shaft and
Central Campoona Mineral Resource estimates were:
• Detailed in an announcement entitled “Archer Exploration
announces Australia’s largest JORC 2012 Graphite
Resources”, lodged with ASX on 6 August 2014.
• Prepared by Mr B Knell who is a Member of the AusIMM
and peer reviewed by Dr C Gee who is also a Member of
the AusIMM (CP). At the time of the report Mr Knell and
Dr Gee were both full time employees of Mining Plus Pty
Ltd and both qualify as Competent Persons as defined in
the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’.
WILCLO SOUTH MINERAL RESOURCE
The information pertaining to the Wilclo South Mineral
Resource estimate was:
• Extracted from an announcement entitled “Maiden Wilclo
South Graphite Resource”, lodged by Monax Mining
Limited with ASX on 26 August 2013.
• Prepared by Ms Sharon Sylvester who at the time of the
report was a full-time employee of AMC Consultants Pty
Ltd and qualifies as a Competent Person as defined in the
2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’.
Annual Report 2020 / Archer Materials Limited
25
As such, no work was done during the year on updating
and reporting the remaining Leigh Creek Magnesia Project
Mineral Resource historic estimate in accordance with JORC
Code 2012.
Archer does not intend to upgrade the historic estimate to
JORC 2012 standard prior to completion of the sale of the
Leigh Creek Magnesia Project.
LEIGH CREEK MAGNESIA PROJECT STUDY
The Leigh Creek Magnesia Project Study was first released
as an ASX announcement entitled “Leigh Creek Magnesite
- Project Study”, lodged with ASX on 21 March 2016.
Archer confirms that all material assumptions underpinning
the production target and financial information set out
in that announcement continue to apply and have not
materially changed.
GOVERNANCE
Archer maintains strong governance and internal controls
in respect of its estimates of Mineral Resources and the
estimation process. Archer ensures its sampling techniques,
data collection, data veracity and the application of the
collected data is at a high level of industry standard.
Contract RC and diamond drilling with QA/QC controls
approved by Archer are used routinely. All drill holes are
logged by Archer geologists.
Archer employs QC procedures, including addition of
standards, blanks and duplicates ahead of assaying which
is undertaken using industry standards and fully accredited
laboratories. Assay data is continually validated and stored.
Geological models and wireframes are built using careful
geological documentation and interpretations. Resource
estimation is undertaken using industry standard estimation
techniques and include block modelling. Application of
other parameters including cut off grades, top cuts and
classification are all dependent on the style and nature of
mineralisation being assessed.
Mineral Exploration
SCOPING STUDY
The Eyre Peninsula Graphite Project Scoping Study was first
released as an ASX announcement entitled “Positive results
from SA Graphite Project scoping study”, lodged with ASX
on 19 September 2016. Archer confirms that all material
assumptions underpinning the production target and
financial information set out in that announcement continue
to apply and have not materially changed.
LEIGH CREEK MAGNESIA PROJECT
There has been no change in the Leigh Creek Magnesia
Project Mineral Resource estimate as at 30 June 2020.
Accordingly, no comparison is provided.
MT HUTTON CENTRAL MINERAL RESOURCE
The information pertaining to the Mt Hutton Central Mineral
Resource estimate was:
• extracted from an announcement entitled “Mount Hutton
Central JORC 2012 Resource”, lodged with ASX on 12
April 2016.
• prepared by Mr Wade Bollenhagen who is a full-time
employee of Archer Materials Limited and qualifies as
Competent Persons as defined in the 2012 Edition of the
“Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”.
The information relating to the Leigh Creek Magnesite
Resource (excluding Mount Hutton Central) was first
reported by Pima Mining NL on 3 September 1999 and was
prepared in accordance with the JORC Code 1999.
LEIGH CREEK MAGNESIA MINERAL RESOURCES
(EXCLUDING MT HUTTON CENTRAL)
The information relating to the Leigh Creek Magnesia
Resource (excluding Mount Hutton Central) was first
reported by Pima Mining NL on 3 September 1999 and was
prepared in accordance with the JORC Code 1999.
Archer has since updated the Mount Hutton Central
Resources to JORC 12 standard however, the remaining
Leigh Creek Magnesia Project Mineral Resource (comprising
Witchelina, Termination Hill, Pug Hill, Mt Playfair and Mount
Hutton South) is a historic estimate prepared by Pima Mining
NL. There has been no material change or re-estimation of
those mineral resources since they were first reported or as
a result of the introduction of the 2012 JORC Code.
26
Annual Report 2020 / Archer Materials Limited
Mineral Exploration
TENEMENT INTERESTS
AS AT 30 JUNE 2020
All tenements are held 100% by Archer and its related body corporates except for EL 5804 where S Uranium Pty Ltd has the
rights to explore and develop uranium projects.
EXPLORATION LICENSES
Location
South Australia
North Cowell
Cockabidnie
Wildhorse Plains
Waddikee
Carpie Puntha
Caralue Bluff
Carappee Hill
Witchelina
Termination Hill
Burra North
Napoleons Hat
Blue Hills
Whyte Yarcowie
Pine Creek
Altimeter
Franklyn
Peterborough
Bendigo
Location
New South Wales
Crowie Creek
Stanthorpe
Western Australia
Mt Keith
OTHER LICENSES
Location
South Australia
Campoona Shaft
Sugarloaf
Pindari
Tenement
Commodity
EL 6363
EL 5791
EL 5804
EL 5815
EL 5870
EL 6478
EL 5920
EL 6019
EL 5730
EL 6351
EL 5769
EL 5794
EL 5935
EL 6000
EL 6029
EL 6160
EL 6287
EL 6354
Tenement
EL 8871
EL 8894
E53/1926
Tenement
ML 6470
MPL 150
MPL 151
Graphite
Graphite
Graphite
Graphite / Kaolin
Graphite
Kaolin
Graphite
Magnesite
Magnesite
Base Metals
Copper / Gold
Copper / Gold
Cobalt / Copper
Copper / Gold
Copper / Gold
Copper / Gold / Kaolin
Copper / Gold
Copper/Gold
Commodity
Copper/Gold
Tungsten/Tin
Nickel
Commodity
Graphite mining
Graphite and graphene processing
Process water for Sugarloaf
Annual Report 2020 / Archer Materials Limited
27
DIRECTORS’ REPORT
Information
on continuing
Directors
Your Directors present this report on Archer Materials
Limited and its consolidated entities (‘Group’ or ‘Archer’),
for the year ended 30 June 2020.
The Operating and Financial Review (which includes the
Chairman’s Review) of this Annual Report is incorporated
by reference into, and can be found on pages 6 to 27 of
this Annual Report.
Directors
The following Directors were in office at any time during or
since the end of the financial year.
• Gregory David English
• Alice McCleary
• Paul Rix
28
28
Annual Report 2020 / Archer Exploration Limited
Annual Report 2020 / Archer Materials Limited
Directors’ Report GREG ENGLISH
ALICE MCCLEARY
PAUL RIX
LLB, BE (Mining)
Executive Chairman
DUniv, BEc FCA FTIA FAICD
Director (Non-Executive)
B.Com FAICD
Director (Non-Executive)
Greg English is the co-founder and
Executive Chairman of Archer. He has
been Chairman of the board since
2008 and has overseen Archer’s
transition from a South Australian
focussed minerals exploration
company to a diverse technology
materials company. He has more
than 25 years of engineering and
legal experience and has held senior
roles for Australian and multinational
companies.
Greg has received recognition for
his work as a lawyer having been
recognised in The Best Lawyers® in
Australia, 2020 Edition in the area of
Commercial Law.
Greg is an experienced company
director and also serves on
the boards of other ASX listed
companies. He holds a bachelor’s
degree in mining engineering and
a law degree.
Directorships of other ASX Listed
entities in the last 3 years: Core
Lithium Limited (ASX:CXO), Leigh
Creek Energy Limited (ASX:LCK).
Interest in Shares:
8,997,618 ordinary shares.
Special Responsibilities:
Executive Chairman.Member, Audit &
Risk Management Committee
Alice McCleary is a Chartered
Accountant. She is a director of .au
Domain Administration Limited, and
Deputy Chair of the Uniting Church
of South Australia’s Resources Board.
She is a former Chairman of ASX
Listed Company Twenty Seven Co.
Limited (ASX:TSC) and former Director
of Adelaide Community Healthcare
Alliance Inc. (ACHA), Benefund Ltd
and Forestry Corporation of South
Australia. Previous leadership
roles include Vice-President of the
South Australian Chamber of Mines
and Energy (SACOME), Deputy
Chancellor of the University of South
Australia and National President of
the Taxation Institute of Australia.
Alice’s professional interests include
financial management and corporate
governance.
Directorships of other ASX Listed
entities in the last 3 years: Twenty
Seven Co. Limited (ASX: TSC)
Interest in Shares:
2,700,761 ordinary shares.
Special Responsibilities:
Chair, Audit & Risk Management
Committee.
Paul Rix was appointed as a Director
of the Company on 8 February
2016. Paul Rix is an experienced
mining professional with more
than 30 years’ experience in the
marketing of industrial minerals
and products. From 2003 – 2013,
Paul worked for Queensland
Magnesia Pty Ltd (QMAG) as General
Manager Marketing where he was
responsible for the development
and implementation of QMAG’s long
term marketing strategy, focusing on
diversification of magnesia products
and markets whilst maintaining
high plant utilisation. His magnesia
marketing responsibilities stretched
across six continents and more than
30 countries.
Directorships of other ASX Listed
entities in the last 3 years: None.
Interest in Shares:
316,667 ordinary shares.
Special Responsibilities:
Member, Audit & Risk Management
Committee.
Annual Report 2020 / Archer Exploration Limited
Annual Report 2020 / Archer Materials Limited
29
29
Directors’ Report
MANAGEMENT
DR MOHAMMAD CHOUCAIR
DAMIEN CONNOR
FRSN FRACI GAICD BSc Nanotechnology (Hon. 1),
PhD (Chemistry)
CA GAICD AGIA B.Com
CFO / Company Secretary
Chief Executive Officer
Dr Mohammad Choucair was appointed Chief Executive
Officer on 1 December 2017. Dr Choucair is alumni of the
AGSM UNSW Business School and has a strong technical
background in nanotechnology. He has spent the last
decade implementing governance, control and key
compliance requirements for the creation and commercial
development of innovative technologies with global
impact. Dr Choucair served a 2-year mandate on the World
Economic Forum Global Council for Advanced Materials
and is a Fellow of both The Royal Society of New South
Wales and The Royal Australian Chemical Institute. He
has a strong record of delivering innovation and has been
recognised internationally as a forward thinker.
Damien Connor was appointed Company Secretary on 1
August 2014. Damien performs the financial/accounting
role in the Company as well as the secretarial duties.
Damien has been a member of the Institute of Chartered
Accountants since 2002 and is a Graduate of the
Australian Institute of Company Directors and a Member
of the Governance Institute of Australia. Damien has been
employed in the resources sector since 2005. He also
provides Company Secretary and Chief Financial Officer
services to other ASX-listed and unlisted entities.
30
30
Annual Report 2020 / Archer Exploration Limited
Annual Report 2020 / Archer Materials Limited
Directors’ Report SIGNIFICANT CHANGES IN STATE OF AFFAIRS
The Directors are not aware of any significant changes in the state of affairs of the Group occurring during the
financial year, other than as disclosed in this Annual Report.
EVENTS ARISING SINCE THE END OF THE REPORTING PERIOD.
On 14 August 2020, the Company announced the Completion of the sale of the Leigh Creek Magnesia Project
(“Project”). At Completion the Company received 6,535,775 shares (“Consideration Shares”) in Canadian Stock
Exchange listed Volatus Capital Corp. (“Volatus”). The Consideration Shares have a value of $2.64 million†
and can be traded for the first time only after four months have elapsed from the date of distribution.
Archer has received $2.89† million for the Project, comprising:
• $250,000 cash already received; plus
• $2.0 million of Volatus shares at Completion; plus
• Bonus payment of $639,133 of Volatus shares at Completion.
Archer may be entitled to receive a further bonus payment should there be a future transaction with the other
company that purchased the remainder of the Project.
†Assumes Volatus share price of A$0.40, AUD:CDN exchange rate of $0.9584 and 6,535,775 Consideration Shares issued to Archer.
On 18 September 2020, 300,000 share options (exercise price $0.1929 and expiry date of 31 March 2023)
were exercised into shares.
ENVIRONMENTAL ISSUES
The Group’s operations are subject to significant environmental regulations under the laws of the
Commonwealth and/or State. No notice of any breach has been received and to the best of the Directors’
knowledge no breach of any environmental regulations has occurred during the financial year or up to the
date of this Annual Report.
CORPORATE GOVERNANCE
The Board has adopted the ASX Corporate Governance Council’s “Corporate Governance Principles and
Recommendations – 3rd Edition” (ASX Recommendations). The Board continually monitors and reviews
its existing and required policies, charters and procedures with a view to ensuring its compliance with the
ASX Recommendations to the extent deemed appropriate for the size of the Company and the status of its
projects and activities. Good corporate governance practices are also supported by the ongoing activities of
the Audit & Risk Management Committee
The Company’s Corporate Governance Statement for the financial year ending 30 June 2020 is dated as at
30 June 2020 and was approved by the Board on 25th September 2020.
The Corporate Governance Statement provides a summary of the Company’s ongoing corporate governance
practices in accordance with the ASX Recommendations. The Corporate Governance Statement is supported
by a number of policies, procedures, code of conduct and formal charters, all of which are located in the
Corporate Governance section of the Company’s website: www.archerx.com.au
Annual Report 2020 / Archer Materials Limited
31
Directors’ Report
The Directors of Archer Materials Limited (the Group)
present the Remuneration Report for Non-Executive
Directors, Executive Directors and other Key Management
Personnel, prepared in accordance with the Corporations
Act 2001 and the Corporations Regulations 2001.
The names and roles of the Company’s key management
personnel during the year are:
• Mr Gregory English
Chairman - Executive
• Ms Alice McCleary
Director - Non executive
• Mr Paul Rix
Director - Non executive
• Dr Mohammad Choucair Chief Executive Officer
• Mr Damien Connor
Chief Financial Officer &
Company Secretary
The Remuneration Report is set out under the following
main headings:
A. Principles used to determine the nature and amount of
remuneration
B. Details of remuneration
C. Service agreements
D. Share-based remuneration
E. Bonuses included in Remuneration
F. Other information
32
Annual Report 2020 / Archer Materials Limited
Remuneration Report (Audited)
A. PRINCIPLES USED TO DETERMINE THE NATURE
AND AMOUNT OF REMUNERATION
The Board acts as the remuneration committee as a
consequence of the size of the Board and the Group.
The Board believes that individual salary negotiation
is more appropriate than formal remuneration policies
and external advice and market comparisons are sought
where necessary. The Group discloses the fees and
remuneration paid to all Directors as required by the
Corporations Act 2001. The Board recognises that
the attraction of high calibre executives is critical to
generating shareholder value.
The directors and executives receive a superannuation
guarantee contribution required by the government
of 9.50% per annum and do not receive any other
retirement benefits. Some individuals, however, may
choose to sacrifice part of their salary to increase
payments towards superannuation and/or elected to
increase superannuation contributions a part of their
salary package.
All remuneration paid to Directors and executives
is valued at the cost to the Group. The Group has
established a Performance Rights Plan and a Share
Option Plan for the benefit of Directors, officers, senior
executives and consultants. Shares issued under the
Share Option Plan to Directors and executives are valued
at the difference between the market price of those
shares and the amount paid by the director or executive.
Options are valued using the Black-Scholes valuation
methodology. Performance Rights are valued
using a Monte Carlo based model and recognised
as remuneration in accordance with the attached
vesting conditions. The Board policy is to remunerate
non-executive directors at the market rates for
time, commitment and responsibilities. The Board
determines payments to non-directors and reviews their
remuneration annually, based on market price, duties and
accountability. Independent external advice is sought
when required.
The maximum aggregate amount of fees that can be paid
to non-executive directors is $500,000 per annum which
has not changed since Archer listed on the ASX in August
2007. These amounts are not linked to the financial
performance of the consolidated Group. However, to
align director’s interests with shareholder interests, the
directors are encouraged to hold shares in Archer.
Each member of the executive team has signed a formal
contract at the time of their appointment covering a range
of matters including their duties, rights, responsibilities
and any entitlements on terminations. The standard
contract sets out the specific formal job description.
USE OF REMUNERATION CONSULTANTS
The Company has not engaged the services of a
remuneration consultant during the year.
VOTING AND COMMENTS MADE AT THE
COMPANY’S LAST ANNUAL GENERAL MEETING
The Company only received 16.27% ‘no’ votes on its
Remuneration Report for the financial year ending
30 June 2019. The Company received no specific
feedback on its Remuneration Report at the Annual
General Meeting.
CONSEQUENCES OF PERFORMANCE ON
SHAREHOLDER WEALTH
In considering the Group’s performance and benefits
for shareholder wealth, the Board has regard to the
company’s share price as at 30 June on each of the
previous 5 years:
Item
2020
2019
2018
2017
2016
Share
price
$0.60
$0.110
$0.110
$0.036 $0.072
Annual Report 2020 / Archer Materials Limited
33
Remuneration Report (Audited)
B. DETAILS OF REMUNERATION
Details of the nature and amount of each element of the remuneration of each key management personnel (KMP) of the
Company are shown in the table below:
Director and other
Key Management
Personnel
Short-term Employee
Benefits
Post
employment
Benefits
Termination
Benefits
Share
Based
Payments
Employee
Year
Cash
Salary &
Fees $
Cash
Bonus $
Super-
annuation $
Termination
Benefits $
Total $
Unlisted
Options &
Performance
Rights 4 $
Performance
based
remuneration
%
Executive Directors
Greg English 1
2020
301,370
45,205 2
Executive Chairman
2019
301,370
22,603 2
Non-Executive Directors
Alice McCleary
2020
59,361
Independent
2019
59,361
Paul Rix
2020
59,361
Independent
2019
59,361
Other Key Management Personnel
-
-
-
-
32,925
30,777
5,639
5,639
5,639
5,639
Dr Mohammad
Choucair
2020
175,000
43,750 4
20,781
Chief Executive Officer
2019
175,000
31,050 4
19,575
Damien Connor
2020
126,375
Company Secretary
& CFO
2019
130,950
-
-
-
-
Total
Total
2020 721,467
2019 726,042
88,955
53,653
64,984
61,630
-
-
-
-
-
-
-
-
-
-
-
-
296,000
675,500
570
355,320
88,800
153,800
570
65,570
88,800
153,800
570
65,570
7.3%
7.1%
-%
0.9%
-%
0.9%
207,200
446,731
10.7%
83,108
79,050
308,733
205,425
570
131,520
37.9%
-%
0.4%
759,850
1,635,257
85,388
926,713
1 In addition, Piper Alderman Lawyers were paid $29,950 (2019: $26,453) during the year for services rendered to the Company. Mr English is a partner of
Piper Alderman lawyers. The fees were at normal commercial rates.
2 Short-term incentive bonus related to KPI achievement, pursuant to Mr English’s employment contract.
3 In accordance with Accounting Standards, remuneration includes a portion of the notional value of the options and performance rights (Rights) granted
during the year. The notional value of options and Rights are determined as at the issue date and is progressively allocated over the vesting period. The
amount included as remuneration is not indicative of the benefit (if any) that the employee may ultimately realise should the option or Right vest. The notional
value of the options and Rights as at the issue date has been determined in accordance with the accounting policy detailed at Note 22.
4 Short-term incentive bonus related to KPI achievement, pursuant to Dr Choucair’s employment contract.
34
Annual Report 2020 / Archer Materials Limited
Remuneration Report (Audited) C. SERVICE AGREEMENTS
Remuneration and other terms of employment for the Executive Directors and other key management personnel are
formalised in a Service Agreement. The major provisions of the agreements relating to remuneration are set out below:
Notice Period
Calculated based
on reasons for
termination from
4 weeks plus
leave entitlements
up to 12 months’
salary plus leave
entitlements.
Either party may
terminate by
providing 6 months’
notice.
Employee
Base Salary
Terms of agreement
Greg English
Executive Chairman
To 30 June 2020
$330,000 per annum
(inclusive of 9.50%
Superannuation)
Effective 1 July 20201
$370,000 per annum
(inclusive of 9.50%
Superannuation)
Dr Mohammad
Choucair
Chief Executive
Officer
To 30 June 2020
$191,625 per annum
(inclusive of 9.50%
Superannuation)
Effective 1 July 20202
$251,850 per annum
(inclusive of 9.50%
Superannuation)
Contract term:
Permanent employee, no fixed term.
Short-term incentive bonus:
Discretionary up to 15% of salary each year, is
determined with reference to KPIs as set by the
Board annually.
Long-term incentive bonus:
Entitled to receive Options or Performance Rights
equal to the maximum number of Options or
Performance Rights granted to a director of the
Company in the same financial year, subject to
shareholder approval and KPIs including the
Company’s share Price compared with the ASX
Small Ordinaries Resources Index.
Contract term:
Permanent employee, no fixed term.
Short-term incentive bonus:
Short-term inventive bonus as determined by the
Board from time to time.
For the year ended 30 June 2020, a discretionary
bonus of up to 25% of salary was offered by the
Board, subject to satisfaction of agreed KPIs for the
year ended 30 June 2020.
For the year ended 30 June 2021, a discretionary
bonus of up to 25% of salary has been offered, and
is determined with reference to KPI’s set by the
Board.
Long-term incentive bonus:
Eligible to participate in any incentive or bonus
plans, as may be introduced by the Company from
time to time.
Hourly rate
None.
Damien Connor
Company Secretary
& Chief Financial
Officer
Either party may
terminate by
providing 3 months’
notice.
1 The Non-Executive Directors agreed to award Mr English an increase in his annual salary, effective 1 July 2020, following a review of his remuneration with
reference to his performance, responsibilities and strategic direction of the Company. Mr English’s last salary increase was in July 2016.
2 The Board agreed to award Dr Choucair an increase in his annual salary, effective 1 July 2020, following a review of his remuneration with reference to his
performance, responsibilities and strategic direction of the Company. Dr Choucair had not previously had a salary increase since he began his employment
with the Company in 2017.
Annual Report 2020 / Archer Materials Limited
35
Remuneration Report (Audited)
D. SHARE-BASED REMUNERATION
PERFORMANCE RIGHTS (RIGHTS)
The Company’s Performance Rights and Share Option
Plan provides for the issue of Rights to Directors,
employees and contractors of the Company and its
associated body corporates.
All Rights issued under the Plan refer to Rights over
ordinary shares of the Company, which are exercisable
on a one-for-one basis under the terms of the
agreements. Vesting of Rights is generally subject to
the achievement particular performance conditions as
determined by the Board.
Rights granted to KMP during the reporting period
No Rights were granted as remuneration to KMP during
the reporting period.
Rights previously issued to KMP that have vested during
the reporting period
On 8 July 2019, 562,500 new shares were issued as a
result of the vesting of 75% of Rights previously issued
to KMP that met the performance conditions for the
performance period 1 July 2018 to 30 June 2019. The
remaining 187,500 Rights (representing 25%) were
forfeited.
Rights to KMP forfeited during the reporting period
187,500 Rights previously issued to KMP were forfeited
during the reporting period (as referred to above).
UNLISTED OPTIONS (OPTIONS)
All Options refer to options over ordinary shares of the
Company, which are exercisable on a one-for-one basis
under the terms of the agreements.
The Group has established a Performance Rights and
Share Option Plan for the benefit of Directors, officers,
senior executives and consultants. Under the Performance
Rights and Share Option Plan, the Company, through
the Board, may offer Options to eligible persons on such
terms that the Board considers appropriate, including any
performance or other vesting hurdles that may apply.
Options granted to KMP during the reporting period
During the reporting period 17,500,000 Options were
granted to staff and directors following shareholder at the
Company’s Annual General Meeting held on 30 October
2019. Only 13,000,000 of these Options were issued to
KMP with the remaining 4,500,000 issued to staff. Options
were issued for nil consideration and are exercisable at
$0.1929 each on or before 31 March 2023. Options vest
immediately on the date of issue and are are governed by
the terms and conditions of the Company’s Performance
Rights and Share Option Plan. An amount of $759,850
has been expensed to the Statement of Profit or Loss and
Other Comprehensive Income under employee benefits
expense for the year ended 30 June 2020.
Options to KMP exercised during the reporting period
During the reporting period 530,000 Options were
exercised by KMP.
Options to KMP forfeited, cancelled or lapsed during the
reporting period
No Options granted to KMP were forfeited, cancelled or
lapsed during the reporting period
36
Annual Report 2020 / Archer Materials Limited
Remuneration Report (Audited) E. BONUSES INCLUDED IN REMUNERATION
Short-Term Incentives (STI)
The Company’s performance measures involve the use of annual performance objectives, metrics, performance reviews.
The performance measures are set annually by the Board after consultation with directors and executives and are specifically
tailored to the areas where each executive has a level of control.
The Key Performance Indicators (KPIs) for the Executive Chairman and Chief Executive Officer are summarised as follows:
Performance areas
• Financial: funding and share price performance
• Non-financial: strategic goals based on company objectives and job descriptions
The STI program involves cash based incentives for the executive team and other staff, as determined by the Board. The Board
may, at its discretion, award bonuses for exceptional performance in relation to each person’s agreed KPIs.
Details of the short-term incentive cash bonuses awarded as remuneration to each key management personnel, the percentage
of the available bonus that was paid in the financial year, and the percentage that was forfeited because the person did not meet
the performance criteria is set out below.
Employee
Included in remuneration ($)
Percentage vested
during the year
Percentage forfeited
during the year
Greg English 1
Executive Chairman
$49,500
(inclusive of 9.5% Superannuation)
Dr Mohammad Choucair 2
Chief Executive Officer
$47,906
(inclusive of 9.5% Superannuation)
100%
100%
0%
0%
1 Mr English’s contract of employment provides for a discretionary cash bonus of up to 15% of his salary each year, determined with reference to KPIs set by
the Board annually.
2 For the year ended 30 June 2020, a discretionary cash bonus of up to 25% of salary was offered by the Board, to Mr Choucair, subject to satisfaction of
agreed KPIs for the year ended 30 June 2020.
No other key management personnel were awarded short-term incentive cash bonuses as remuneration during the year
ended 30 June 2020. The board has agreed to award Dr Mohammad Choucair (CEO) a short-term incentive cash bonus
for the year ended 30 June 2021, subject to meeting agreed KPIs.
Annual Report 2020 / Archer Materials Limited
37
Remuneration Report (Audited)
F. OTHER INFORMATION
NUMBER OF UNLISTED OPTIONS HELD BY KMP
The number of options to acquire shares in the Company held during the 2020 reporting period by each of the KMP of the
Group, including their related parties are set out below.
2020 Key Management
Personnel
Balance
1/7/19
Granted as
Remuneration 1
Exercised
Expired/
Forfeited
Balance
30/6/20
Vested and
exercisable
Vested and
un-exercisable
Greg English
Alice McCleary
Paul Rix
Dr Mohammad Choucair
Damien Connor
Total
-
-
-
-
-
-
5,000,000
-
1,500,000 (330,000)
1,500,000
3,500,000
-
-
1,500,000 (200,000)
13,000,000 (530,000)
-
-
-
-
-
-
5,000,000 5,000,000
1,170,000
1,170,000
1,500,000
1,500,000
3,500,000 3,500,000
1,300,000
1,300,000
12,470,000 12,470,000
-
-
-
-
-
-
1 13,000,000 Options were granted to KMP following shareholder approval at the Company’s Annual General Meeting held on 30 October 2019. Options
were issued for nil consideration on 12 November 2020 and are exercisable at $0.1929 each on or before 31 March 2023. Options vest immediately on the
date of issue and are governed by the terms and conditions of the Company’s Performance Rights and Share Option Plan. An amount of $759,850 has been
expensed to the Statement of Profit or Loss and Other Comprehensive Income under employee benefits expense for the year ended 30 June 2020.
NUMBER OF UNLISTED PERFORMANCE RIGHTS HELD BY KMP
The number of rights to acquire shares in the Company held during the 2020 reporting period by each of the KMP of the
Group, including their related parties are set out below.
2020 Key Management
Personnel
Greg English
Alice McCleary
Paul Rix
Dr Mohammad Choucair
Damien Connor
Total
Balance
1/7/19
Granted as
Compensation
Vested 1 Forfeited 1
Balance
30/6/20
Total Vested
150,000
150,000
150,000
150,000
150,000
750,000
-
-
-
-
-
-
(112,500)
(112,500)
(112,500)
(112,500)
(37,500)
(37,500)
(37,500)
(37,500)
(112,500)
(562,500)
(37,500)
(187,500)
-
-
-
-
-
-
-
-
-
-
-
-
1 On 8 July 2019, 562,500 new shares were issued as a result of the vesting of 75% of Rights previously issued to KMP that met the performance conditions
for the performance period 1 July 2018 to 30 June 2019. The remaining 187,500 Rights (representing 25%) were forfeited.
38
Annual Report 2020 / Archer Materials Limited
Remuneration Report (Audited) NUMBER OF SHARES HELD BY KMP
The number of shares in the Company held during the 2020 reporting period by each of the KMP of the Group, including
their related parties are set out below.
2020 Key
Management
Personnel
Greg English
Alice McCleary
Paul Rix
Dr Mohammad
Choucair
Damien
Connor
Total
Balance 1/7/19
Granted as
Compensation
Unlisted Options
Exercised
Performance
Rights Vested
Other changes Balance 30/6/20
9,369,733
2,588,261
200,000
3,000,000
150,000
15,307,994
-
-
-
-
-
-
-
330,000
-
-
112,500
112,500
112,500
112,500
(484,615)
(330,000)
8,997,618
2,700,761
4,167
316,667
(512,500)
2,600,000
200,000
112,500
(295,000)
167,500
530,000
562,500
(1,617,948)
14,782,546
END OF AUDITED REMUNERATION REPORT
Annual Report 2020 / Archer Materials Limited
39
Remuneration Report (Audited)
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and each Board Committee held during the year ended 30
June 2020 and the numbers of meetings attended by each Director were as follows:
Director
Board
Audit & Risk Management Committee
A
12
12
12
B
12
12
12
A
2
2
2
B
2
2
1
Greg English
Alice McCleary
Paul Rix
Where:
Column A is the number of meetings the Director was entitled to attend
Column B is the number of meetings the Director attended
PERFORMANCE RIGHTS
The Company has not formed a Remuneration Committee or
a Corporate Governance Committee. The Board as a whole
considers these matters. The Board considers this appropriate
given the size and nature of the Company at this time.
During the reporting period 787,500 shares have
been issued as a result of vesting and exercise of an
equivalent number of Rights and 262,500 Rights lapsed
unexercised.
UNISSUED SHARES UNDER OPTION
During the reporting period, a total of 19,500,000 unlisted
Options were issued. 1,330,000 shares have been issued
as a result of exercise of Options. Subsequent to year
end, a further 300,000 shares were issued as a result of
exercise of Options and 2,000,000 Options were forfeited
in accordance with the terms in which they were issued.
No Options over ordinary shares have been issued since
the end of the financial year.
There are 15,870,000 unissued ordinary shares in the
Company under Option at the date of this report.
See Note 14 for further details regarding movement in
Options during the reporting period.
There were no Rights on issue at the date of this report.
See Note 14 for further details regarding movements in
Rights during the reporting period.
PROCEEDINGS ON BEHALF OF COMPANY
As far as the Directors’ are aware, no person has applied
to the Court for leave to bring proceedings on behalf
of the Company or to intervene in any proceedings to
which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or any part
of those proceedings. The Company was not a party to
any such proceedings during the year.
40
Annual Report 2020 / Archer Materials Limited
Remuneration Report (Audited) INDEMNIFICATION AND INSURANCE OF
DIRECTORS AND OFFICERS
NON-AUDIT SERVICES
The Company’s Constitution provides that the
Company indemnifies, on a full indemnity basis and to
the full extent permitted by law, officers of the Company
for all losses or liabilities incurred by the person as an
officer of the Company or a related body corporate. In
conformity with the Constitution, the Company is party
to Deeds of Indemnity in favour of each of the Directors
referred to in this report who held office during the year.
The Company has paid premiums to insure each of the
Directors, Officers and Consultants against liabilities
for costs and expenses incurred by them in defending
any legal proceedings arising out of their conduct
while acting in the capacity of Director or Executive
of the company, other than conduct involving wilful
breach of duty or a lack of good faith in relation to the
company. The policy does not specify the individual
premium for each officer covered and the amount paid
is confidential. Since the end of the year the Company
has paid, or agreed to pay, premiums in respect of such
contracts for the year ending 30 June 2020.
The Board of Directors is satisfied that the provision of the
non-audit services during the year is compatible with the
general standard of independence for auditors imposed
by the Corporations Act 2001. The Directors are satisfied
that the services disclosed below did not compromise the
external auditor’s independence for the following reasons:
• all non-audit services are reviewed and approved by
the board prior to commencement to ensure they do
not adversely affect the integrity and objectivity of the
auditor; and
• the nature of the services provided do not compromise
the general principles relating to auditor independence
in accordance with APES 110: Code of Ethics for
Professional Accountants set by the Accounting
Professional and Ethical Standards Board.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence for the year ended 30 June 2020 has been received and can be found on page 43 of the
Financial Report.
Signed in accordance with a resolution of the Board of Directors.
Greg English
Chairman
Adelaide
Dated this 25th day of September 2020
Annual Report 2020 / Archer Materials Limited
41
Directors’ Report
AUDITOR’S
INDEPENDENCE
DECLARATION
42
Annual Report 2020 / Archer Materials Limited
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Members of Archer Materials Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Archer
Materials Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B K Wundersitz
Partner – Audit & Assurance
Adelaide, 25 September 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
44
Annual Report 2020 / Archer Materials Limited
FINANCIAL
INFORMATION
Annual Report 2020 / Archer Materials Limited
45
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020
Notes
CONSOLIDATED GROUP
INCOME
Income
EXPENSES
Depreciation expense
Impairment of exploration assets
Exploration expenditure expensed
Advanced Materials research & development expense
Employee benefits expense
Amortisation of intangibles
Write-down of inventory
Corporate consultants/public relations
Occupancy expense
ASX listing and share registry expense
Other expenses
LOSS BEFORE INCOME TAX EXPENSE
Income tax benefit – R&D tax concession
LOSS FOR THE PERIOD FROM CONTINUING OPERATIONS
DISCONTINUED OPERATIONS
Loss after income tax for the period from discontinued operations
2
10
3
18
2020
$
2019
$
242,201
97,604
(15,257)
(350,609)
(3,173)
(465,920)
(1,837,573)
(6,304)
-
(95,189)
(83,304)
(164,236)
(262,647)
(17,730)
(82,159)
(33,287)
(129,711)
(956,831)
(52,403)
(76,800)
(161,021)
(77,942)
(97,526)
(252,102)
(3,042,011)
(1,839,908)
238,859
102,421
(2,803,152)
(1,737,487)
(13,738)
(845)
LOSS ATTRIBUTED TO MEMBERS OF THE PARENT ENTITY
(2,816,890)
(1,738,332)
Other comprehensive income
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO
-
-
MEMBERS OF THE PARENT ENTITY
(2,816,890)
(1,738,332)
LOSS PER SHARE
Basic and diluted loss per share
LOSS PER SHARE FOR CONTINUING OPERATIONS
Basic and diluted loss per share
15
15
The accompanying notes form part of the financial statements.
Cents
(1.37)
(1.37)
Cents
(0.91)
(0.91)
46
Annual Report 2020 / Archer Materials Limited
Financial Information STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Prepayments
Trade and other receivables
Non-current assets classified as held for sale
Assets of disposal groups classified as held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Exploration and evaluation expenditure
Intangible asset
TOTAL NON- CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Deposit received in advance for the sale of the Leigh Creek
Magnesia Project
Employee entitlements
Liabilities of disposal groups classified as held for sale
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Employee entitlements
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
CONSOLIDATED GROUP
2020
$
2019
$
6
7
11
18
9
10
12
18
13
18
13
14
16
8,114,682
20,283
324,731
8,459,695
-
1,580,235
10,039,931
695,749
136,684
146,037
978,470
1,217,170
1,556,659
3,752,299
59,563
59,179
15,069,074
14,500,289
89,987
68,623
15,218,624
14,628,091
25,258,555
18,380,390
207,991
250,000
217,629
675,620
267
675,887
41,970
41,970
233,385
250,000
125,836
609,221
263
609,484
22,475
22,475
717,857
631,959
24,540,698
17,748,431
32,485,250
1,237,000
(9,181,552)
24,540,698
23,873,093
264,698
(6,389,360)
17,748,431
The accompanying notes form part of the financial statements.
Annual Report 2020 / Archer Materials Limited
47
Financial Information
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020
Issued Capital
$
Retained
Earnings
$
Share Based
Payments
Reserve
$
Acquisition
Reserve
$
Total
$
BALANCE AT 1 JULY 2018
23,249,187
(4,739,028)
263,632
240,000
19,013,791
Fair value of performance rights
issued in prior period(s)
Shares issued during the year (net of
costs)
-
623,906
-
-
Transactions with owners
23,873,093
(4,739,028)
Transfer of share based payments
reserve to retained earnings 1
Total loss for the year
Other comprehensive income
-
-
-
88,000
(1,738,332)
-
89,066
(240,000)2
112,698
(88,000)
-
-
-
-
89,066
383,906
240,000
19,486,763
-
-
-
-
(1,738,332)
-
BALANCE AT 30 JUNE 2019
23,873,093
(6,389,360)
24,698
240,000
17,748,431
1 Relates to the prior year(s) share-based payments expense associated with expired unlisted options.
2 Adjustment to the share based payments reserve following the vesting and exercise of 3,000,000 performance rights into fully paid ordinary shares. The
3,000,000 performance rights were previously issued to Mohammad Choucair as consideration for the Company’s acquisition of Carbon Allotropes Pty
Limited in October 2017.
Issued Capital
$
Retained
Earnings
$
BALANCE AT 1 JULY 2019
23,873,093
(6,389,360)
Fair value of unlisted options
issued during the period
Shares issued during the year (net
of costs)
-
8,612,157
-
-
Share Based
Payments
Reserve
$
24,698
997,000
-
Acquisition
Reserve
$
Total
$
240,000
17,748,431
-
-
89,066
8,612,157
Transactions with owners
32,485,250
(6,389,360)
1,021,698
240,000
23,357,588
Transfer of share- based payments
reserve to retained earnings 1
Total loss for the year
Other comprehensive income
-
-
-
24,698
(24,698)
(2,816,890)
-
-
-
-
-
-
-
(2,816,890)
-
BALANCE AT 30 JUNE 2020
32,485,250
(9,181,552)
997,000
240,000
24,540,698
1. Relates to the prior year(s) share-based payments expense associated with forfeited performance rights.
48
Annual Report 2020 / Archer Materials Limited
Financial Information STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020
CASH FLOW FROM OPERATING ACTIVITIES
Receipts from rental activities
Payments to suppliers and employees
Payments for Advanced Materials research & development
Interest received
Research and development tax concession
Commonwealth Government COVID Stimulus
Notes
CONSOLIDATED GROUP
2020
$
-
2019
$
32,533
(1,193,706)
(1,578,684)
(465,920)
(129,711)
5,630
102,421
50,000
28,545
58,642
-
NET CASH USED IN OPERATING ACTIVITIES
21
(1,501,575)
(1,588,675)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration expenditure
Payments for property, plant and equipment
Proceeds from sale of land and buildings
Payments for intellectual property
Deposit received for sale of the Leigh Creek Magnesia Project
(987,776)
(1,014,979)
(26,204)
(15,466)
1,350,000
-
(27,669)
(68,623)
-
250,000
NET CASH PROVIDED BY / (USED) IN INVESTING ACTIVITIES
308,351
(849,068)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Share issue transaction costs
NET CASH PROVIDED BY FINANCING ACTIVITIES
Net increase / (decrease) in cash held
Cash at the beginning of the year
14
8,612,157
400,706
-
(16,800)
8,612,157
383,906
7,418,933
(2,053,837)
695,749
2,749,586
CASH AT THE END OF THE FINANCIAL YEAR
6
8,114,682
695,749
The accompanying notes form part of the financial statements.
Annual Report 2020 / Archer Materials Limited
49
Financial Information
NOTE 1 – STATEMENT OF SIGNIFICANT
ACCOUNTING POLICIES
The financial report is a general purpose financial
report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board (AASB) and the
Corporations Act 2001.
Archer Materials Limited is a for profit entity for the
purposes of preparing the financial statements. The
financial report has been presented in Australian dollars.
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
to which they apply. Compliance with Australian
Accounting Standards ensures that the financial
statements and notes also comply with International
Financial Reporting Standards. Material accounting
policies adopted in the preparation of this financial
report are presented below. They 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.
All inter-group balances and transactions between entities
in the consolidated group, including any recognised
profits or losses, have been eliminated on consolidation.
Accounting policies of subsidiaries have been changed,
where necessary, to ensure consistency with those
adopted by the parent entity.
Business Combination
The Group applies the acquisition method in accounting
for business combinations.
The acquisition method requires an acquirer of the
business to be identified and for the cost of the
acquisition and fair values of identifiable assets, liabilities
and contingent liabilities to be determined at acquisition
date, being the date that control is obtained. Cost is
determined as the aggregate of fair values of assets
given, equity issued and liabilities assumed in exchange
for control together with costs directly attributable to
the business combination. Any deferred consideration
payable is discounted to present value using the entity’s
incremental borrowing rate.
Goodwill is recognised initially at the excess of cost
over the acquirer’s interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities
recognised. If the fair value of the acquirer’s interest is
greater than cost, the surplus is immediately recognised
in profit or loss.
a. Principles of Consolidation
b. Income Tax
The parent entity controls a subsidiary if it is exposed, or
has rights, to variable returns from its involvement with
the subsidiary and has the ability to affect those returns
through its power over the subsidiary.
A list of controlled entities is contained in Note 8 to the
financial statements.
As at reporting date, the assets and liabilities of all
controlled entities have been incorporated into the
consolidated financial statements as well as their results
for the year then ended. Where controlled entities have
entered (left) the consolidated group during the year, their
operating results have been included/(excluded) from the
date control was obtained/(ceased).
50
Annual Report 2020 / Archer Materials Limited
The income tax expense/(revenue) for the year
comprises current income tax expense/(income) and
deferred tax expense/(income).
Current income tax expense charged to the profit or
loss is the tax payable on taxable income calculated
using applicable income tax rates enacted, or
substantially enacted, as at reporting date. Current
tax liabilities/(assets) are therefore measured at the
amounts expected to be paid to/(recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in
deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses. Current
and deferred income tax expense/(income) is
charged or credited directly to equity instead of the
profit or loss when the tax relates to items that are
credited or charged directly to equity.
Notes to the Financial Statements for the Year Ended 30 June 2020 Deferred tax assets and liabilities are ascertained
based on temporary differences arising between the
tax bases of assets and liabilities and their carrying
amounts in the financial statements. Deferred tax
assets also result where amounts have been fully
expensed but future tax deductions are available.
No deferred income tax will be recognised from the
initial recognition of an asset or liability, excluding
a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at
the tax rates that are expected to apply to the period
when the asset recognised or the liability is settled,
based on tax rates enacted or substantively enacted
at reporting date. Their measurement also reflects
the manner in which management expects to recover
or settle the carrying amount of the related asset or
liability.
Deferred tax assets relating to temporary differences
and unused tax losses are recognised only to the
extent that it is probable that future taxable profit
will be available against which the benefits of the
deferred tax asset can be utilised.
Where temporary differences exist in relation to
investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities
are not recognised where the timing of the reversal
of the temporary difference can be controlled and
it is not probable that the reversal will occur in the
foreseeable future.
Current tax assets and liabilities are offset where
a legally enforceable right of set-off exists and it
is intended that net settlement or simultaneous
realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities
are offset where a legally enforceable right of set-off
exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority
on either the same taxable entity or different taxable
entities where it is intended that net settlement
or simultaneous realisation and settlement of the
respective asset and liability will occur in future
periods in which significant amounts of deferred tax
assets or liabilities are expected to be recovered
or settled.
Tax Consolidation
Archer Materials Limited and its wholly-owned Australian
subsidiaries have formed an income tax consolidated group
under tax consolidation legislation. The Group notified
the Australian Tax Office that it had formed an income tax
consolidated group to apply from 1 July 2007.
Research and Development Tax Concession
To the extent that research and development costs are
eligible activities under the “Research and development
tax incentive” programme, a refundable tax offset is
available for companies with annual turnover of less
than $20 million. The Group recognises refundable tax
offsets received in the financial year as an income tax
benefit, in profit or loss, resulting from the monetisation
of available tax losses that otherwise would have
been carried forward. These amounts are recognised
at their fair value only to the extent that where there
is reasonable assurance that the incentive will be
received.
c. Property, Plant and Equipment
Property, plant and equipment is carried at cost less
where applicable, any accumulated depreciation and
impairment losses.
The carrying amount of property, plant and equipment is
reviewed annually by Directors to ensure it is not in excess of
the recoverable amount from these assets. The recoverable
amount is assessed on the basis of the expected net cash
flows that will be received from the assets employment and
subsequent disposal. The expected net cash flows have
been discounted to their present values in determining
recoverable amounts.
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. All other repairs and
maintenance are charged to the Statement of Profit or Loss
during the financial period in which are they are incurred.
Annual Report 2020 / Archer Materials Limited
51
Notes to the Financial Statements for the Year Ended 30 June 2020
Depreciation
The depreciable amount of all fixed assets is depreciated
on a straight-line basis over their useful lives to the
consolidated entity commencing from the time the asset
is held ready for use. Leasehold improvements are
depreciated over the shorter of either the unexpired
period of the lease or the estimated useful lives of the
improvements.
The depreciation rates used for each class of depreciable
assets are:
Class of Non-
Current Asset
Depreciation
Rate
10 – 33%
Basis of
Depreciation
Straight Line
Plant and
Equipment
Buildings
2%
Straight Line
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at each reporting date. 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 the carrying amount. These
gains and losses are included in the Statement of Profit
or Loss.
d. Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is
accumulated in respect of each identifiable area of interest.
These costs are only carried forward to the extent that
they are expected to be recouped through the successful
development of the area or where activities in the area have
not yet reached a stage that permits reasonable assessment
of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are
written off in full against profit in the year in which the decision
to abandon the area is made.
Where a decision is made to proceed with development the
accumulated costs for the relevant area of interest will be
amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves. A regular
review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation
to that area of interest.
Costs of site restoration are provided over the life of the
facility from when exploration commences and are included
in the costs of that stage. Site restoration costs include the
dismantling and removal of mining plant, equipment and
52
Annual Report 2020 / Archer Materials Limited
building structures, waste removal, and rehabilitation of
the site in accordance with clauses of the mining permits.
Such costs have been determined using estimates of future
costs, current legal requirements and technology on an
undiscounted basis.
Any changes in the estimates for the costs are accounted on a
prospective basis. In determining the costs of site restoration,
there is uncertainty regarding the nature and extent of
the restoration due to community expectations and future
legislation. Accordingly, the costs have been determined on
the basis that the restoration will be completed within one
year of abandoning the site.
e. Leases
Accounting policy applicable for period ended
30 June 2020
The Group has elected to account for short-term leases
and leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use asset
and lease liability, the payments in relation to these are
recognised as an expense in profit or loss on a straight-
line basis over the lease term.
Accounting policy applicable for period ended
30 June 2019
Leases of fixed assets where substantially all the risks
and benefits incidental to the ownership of the asset, but
not the legal ownership that are transferred to entities in
the consolidated Group, are classified as finance leases.
Finance leases are capitalised by recording an asset
and a liability at the lower of the amounts equal to the
fair value of the leased property or the present value of
the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between
the reduction of the lease liability and the lease interest
expense for the period.
Leased assets are depreciated on a straight-line basis
over the shorter of their estimated useful lives the lease
term. Lease payments for operating leases, where
substantially all the risks and benefits remain with the
lessor, are charged as expenses in the periods in which
they are incurred.
f. Financial Instruments
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
Notes to the Financial Statements for the Year Ended 30 June 2020 i) Financial assets
Derecognition
Initial recognition and measurement
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), and fair value through
profit or loss.
The classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for
managing them. In order for a financial asset to be classified
and measured at amortised cost or fair value through OCI,
it needs to give rise to cash flows that are ‘solely payments
of principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI test
and is performed at an instrument level.
The Group’s business model for managing financial assets
refers to how it manages its financial assets in order to
generate cash flows. The business model determines
whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery
of assets within a time frame established by regulation or
convention in the market place (regular way trades) are
recognised on the trade date, i.e., the date that the Group
commits to purchase or sell the asset.
Subsequent measurement of financial assets
at amortised cost
The Group measures financial assets at amortised cost if
both of the following conditions are met:
• The financial asset is held within a business model with
the objective to hold financial assets in order to collect
contractual cash flows;
and
• The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments
of principal and interest on the principal amount
outstanding
Financial assets at amortised cost are subsequently
measured using the effective interest (EIR) method
and are subject to impairment. Gains and losses
are recognised in profit or loss when the asset is
derecognised, modified or impaired.
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group’s
consolidated statement of financial position) when:
• The rights to receive cash flows from the asset have
expired
or
• The Group has transferred its rights to receive cash
flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay
to a third party under a ‘pass-through’ arrangement;
and either (a) the Group has transferred substantially all
the risks and rewards of the asset, or (b) the Group has
neither transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control of
the asset
When the Group has transferred its rights to receive cash flows
from an asset or has entered into a pass-through arrangement,
it evaluates if, and to what extent, it has retained the risks and
rewards of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of the asset,
nor transferred control of the asset, the Group continues to
recognise the transferred asset to the extent of its continuing
involvement. In that case, the Group also recognises an
associated liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights and
obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over
the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of
consideration that the Group could be required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit
losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference
between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects
to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include
cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
Annual Report 2020 / Archer Materials Limited
53
Notes to the Financial Statements for the Year Ended 30 June 2020
ECLs are recognised in two stages. For credit exposures for
which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the
next 12-months (a 12-month ECL). For those credit exposures
for which there has been a significant increase in credit risk
since initial recognition, a loss allowance is required for credit
losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).
The Group considers a financial asset in default when
contractual payments are 90 days past due. However,
in certain cases, the Group may also consider a financial
asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any
credit enhancements held by the Group. A financial asset
is written off when there is no reasonable expectation of
recovering the contractual cash flows.
ii) Financial liabilities
The Group’s financial liabilities include trade and other
payables. Financial liabilities are initially measured at fair
value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value
through profit or loss. Subsequently, financial liabilities are
measured at amortised cost using the effective interest
method except for derivatives and financial liabilities
designated at FVTPL, which are carried subsequently at fair
value with gains or losses recognised in profit or loss (other
than derivative financial instruments that are designated and
effective as hedging instruments).
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such
an exchange or modification is treated as the derecognition
of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
g. Impairment of Non-Financial Assets
At each reporting date, the Group reviews the carrying
values of its tangible and intangible assets to determine
whether there is any indication that those assets
have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of
the asset’s fair value less costs to sell and value in use,
54
Annual Report 2020 / Archer Materials Limited
is compared to the asset’s carrying value. Any excess of
the asset’s carrying value over its recoverable amount is
expensed to the Statement of Profit or Loss.
Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which
the asset belongs.
h. Interests in Joint Arrangements
The Consolidated Group’s share of assets, liabilities,
revenue and expenses of the joint operations are
included in the appropriate items of the Consolidated
Financial Statements. Details of the Consolidated
Group’s interest is shown in Note 17.
i. Employee Benefits
Provision is made for the Company’s liability for
employee benefits arising from services rendered
by employees to reporting date. Employee benefits
that are expected to be settled wholly within one
year have been measured at the amounts expected
to be paid when the liability is settled, plus related
on-costs. Employee benefits payable later than one
year have been measured at the present value of
the estimated future cash outflows to be made for
these benefits. Those cashflows are discounted
using market yields on high quality corporate bonds
with terms to maturity that match the expected timing
of cashflows.
Equity Settled Compensation
The Company provides benefits to employees
(including directors) in the form of share-based payment
transactions, whereby employees render services in
exchange for shares or rights over shares (‘equity-settled
transactions’).
The Company currently provides benefits under an
Employee Share Option Plan and a Performance Rights
Plan.
The cost of these equity-settled transactions with
employees and directors is measured by reference to the
fair value at the date at which they are granted.
In valuing equity-settled transactions, no account is taken
of any performance conditions, other than conditions
linked to the price of the shares of the Company (‘market
Notes to the Financial Statements for the Year Ended 30 June 2020 conditions’). The cost of equity-settled transactions is
recognised, together with a corresponding increase
in equity, over the period in which the performance
conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award
(‘vesting date’).
The cumulative expense recognised for equity-settled
transactions at each reporting date until vesting date
reflects:
i) the extent to which the vesting period has expired;
and
ii) the number of awards that, in the opinion of the
directors, will ultimately vest. This opinion is formed
based on the best available information at reporting
date. No adjustment is made for the likelihood of
market performance conditions being met as the effect
of these conditions is included in the determination of
fair value at grant date.
No expense is recognised for awards that do not
ultimately vest, except for awards where vesting is
conditional upon a market condition.
Where the terms of an equity-settled award are modified,
as a minimum an expense is recognised as if the
terms had not been modified. In addition, an expense
is recognised for any increase in the value of the
transaction as a result of the modification, as measured at
the date of modification. Where an equity-settled award
is cancelled, it is treated as if it had vested on the date
of cancellation, and any expense not yet recognised
for the award is recognised immediately. However, if a
new award is substituted for the cancelled award, and
designated as a replacement award on the date that
it is granted, the cancelled and new award are treated
as if they were a modification of the original award, as
described in the previous paragraph.
The dilutive effect, if any, of outstanding options and
rights is reflected as additional share dilution in the
computation of earnings per share.
j. Provisions
Provisions are recognised when the Group has a legal
or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits
will result and that outflow can be reliably measured.
k. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand,
deposits held at call with banks, other short-term
highly liquid investments with original maturities
of three months or less, and bank overdrafts. Bank
overdrafts are shown within short-term borrowings
in current liabilities on the Statement of Financial
Position.
l. Revenue
Interest revenue is recognised on a proportional basis
taking into account the interest rates applicable to the
financial assets.
Revenue from the rendering of a service is recognised upon
the delivery of the service to the customers. All revenue is
stated net of the amount of goods and services tax (GST).
m. Borrowing Costs
Borrowing costs directly attributable to the acquisition,
construction or production of assets that necessarily take
a substantial period of time to prepare for their intended
use or sale, are added to the cost of those assets, until
such time as the assets are substantially ready for their
intended use or sale. All other borrowing costs are
recognised in profit or loss in the period in which they
are incurred.
n. 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 Statement of Cash
Flows on a gross basis, except for the GST component
of investing and financing activities, which are
disclosed as operating cash flows.
Annual Report 2020 / Archer Materials Limited
55
Notes to the Financial Statements for the Year Ended 30 June 2020
o. Comparative Figures
Research and development (R&D) tax concession
When required by accounting standards, comparative
figures have been adjusted to conform to changes in
presentation of the current financial year.
p. Critical Accounting Estimates and Judgments
The Directors evaluate estimates and judgments
incorporated into the financial report based on
historical knowledge and best available current
information. Estimates assume a reasonable
expectation of future events and are based on current
trends and economic data obtained both externally and
within the Group.
Key estimates
Impairment
The Group assesses impairment at each reporting date
by evaluating conditions specific to the Group that may
lead to impairment of assets. Where an impairment
trigger exists, the recoverable amount of the asset is
determined. Value–in-use calculations performed in
assessing recoverable amounts incorporate a number of
key estimates.
Impairment expense of $350,609 was recognised
in respect of non-current exploration and evaluation
assets for the year ended 30 June 2020 (2019: $82,159).
Impairment recognised for the year ended 30 June
2020 and 30 June 2019 related to relinquishment of the
tenement(s) to which expenditure had been previously
capitalised.
Exploration and evaluation
The consolidated entity’s policy for exploration and
evaluation is discussed at Note 1(d). The application
of this policy requires the Directors to make certain
estimates and assumptions as to future events and
circumstances. Any such estimates and assumptions
may change as new information becomes available.
If, after having capitalised exploration and evaluation
expenditure, the Directors conclude that the
capitalised expenditure is unlikely to be recovered
by future sale or exploitation, then the relevant
capitalised amount will be written off though the
Statement of Profit or Loss.
56
Annual Report 2020 / Archer Materials Limited
The Group is entitled to claim R&D tax incentives in
Australia. The R&D tax incentive is calculated using
the estimated expenditures multiplied by a 43.5%
non-refundable tax offset. It has been established
that the conditions of the R&D incentive have been
met and that the expected amount of the incentive
can be reliably measured.
q. Non-current assets held for sale and discontinued
operations
The Group classifies non-current assets and disposal
groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather
than through continuing use. Non-current assets and
disposal groups classified as held for are measured
at the lower of their carrying amount and fair value
less costs to sell. Costs to sell are the incremental
costs directly attributable to the disposal of an asset
(disposal group), excluding finance costs and income
tax expense.
The criteria for held for sale classification is regarded
as met only when the sale is highly probable and the
asset or disposal group is available for immediate sale
in its present condition. Actions required to complete
the sale should indicate that it is unlikely that significant
changes to the sale will be made or that the decision to
sell will be withdrawn. Management must be committed
to the plan to sell the asset and the sale expected to
be completed within one year from the date of the
classification.
Property, plant and equipment and intangible assets
are not depreciated or amortised once classified as
held for sale.
Assets and liabilities classified as held for sale are
presented separately as current items in the statement
of financial position.
A disposal group qualifies as discontinued operation
if it is a component of an entity that either has been
disposed of, or is classified as held for sale, and:
• Represents a separate major line of business or
geographical area of operations
• Is part of a single co-ordinated plan to dispose of a
Notes to the Financial Statements for the Year Ended 30 June 2020 separate major line of business or geographical area of
operations or
• Is a subsidiary acquired exclusively with a view to resale
Discontinued operations are excluded from the results
of continuing operations and are presented as a single
amount as profit or loss after tax from discontinued
operations in the statement of profit or loss.
Additional disclosures are provided in Note 11 and Note
18. All other notes to the financial statements include
amounts for continuing operations, unless indicated
otherwise.
r. Intangible assets
Intangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment
losses. Internally generated intangibles, excluding
capitalised development costs, are not capitalised and
the related expenditure is reflected in profit or loss in
the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as
either finite or indefinite.
Intangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with
a finite useful life are reviewed at least at the end
of each reporting period. Changes in the expected
useful life or the expected pattern of consumption
of future economic benefits embodied in the asset
are considered to modify the amortisation period or
method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the
statement of profit or loss in the expense category that
is consistent with the function of the intangible assets.
Intangible assets with finite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to
be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.
An intangible asset is derecognised upon disposal (i.e.,
at the date the recipient obtains control) or when no
future economic benefits are expected from its use or
disposal. Any gain or loss arising upon derecognition
of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the
asset) is included in the statement of profit or loss.
Research and development costs
Research costs are expensed as incurred and included
in the statement of profit or loss as research and
development costs. Development expenditures on an
individual project are recognised as an intangible asset
when the Group can demonstrate:
• The technical feasibility of completing the intangible
asset so that the asset will be available for use or sale
• Its intention to complete and its ability and intention to
use or sell the asset
• How the asset will generate future economic benefits
• The availability of resources to complete the asset
• The ability to measure reliably the expenditure during
development
Following initial recognition of the development
expenditure as an asset, the asset is carried at cost
less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins
when development is complete and the asset is
available for use. It is amortised over the period of
expected future benefit. Amortisation is recorded in
cost of sales. During the period of development, the
asset is tested for impairment annually.
Annual Report 2020 / Archer Materials Limited
57
Notes to the Financial Statements for the Year Ended 30 June 2020
Patents and licences
The Group made upfront payments to purchase patents
and licences. The Licences have been granted for
patents which are undergoing prosecution by the
relevant government agencies and the Company also
owns a patent undergoing prosecution.
Patents have a life of up to 20 years and are assessed
on a case by case basis. Licences for the use of
intellectual property are granted for periods ranging
between three and five years depending on the specific
licences. The licences require an annual fee to be paid
to continue to access the licenses. As a result, those
licences are assessed as having an indefinite useful life.
A summary of the policies applied to the Group’s
intangible assets is, as follows:
Licences
Patents
Useful lives
Finite (5 years)
Finite (17 years)
Amortisation
method used
Internally
generated or
acquired
Amortised on
a straight-line
basis over the
period of the
licence
Amortised on
a straight-line
basis over the
period of the
patent
Acquired
Acquired
s. New and Revised Accounting standards and
Interpretations
(i) New standards and interpretation adopted as at 1
July 2019
AASB 16 Leases
AASB 16 supersedes AASB 117 Leases and Interpretation
4 Determining whether an Arrangement contains a Lease
and became effective for reporting periods beginning
on or after 1 January 2019. The standard sets out the
principles for the recognition, measurement, presentation
and disclosure of leases and requires lessees to account
for all leases under a single on-balance sheet model.
Accordingly, the Group applied AASB 16 for the first
time for the year ended 30 June 2020. The Group did
not have any operating lease commitment at 30 June
2019 as the Group currently leases its office space on a
month by month contractual basis. The leases held by the
Group satisfied the relevant criteria of a short-term lease
under AASB 16, therefore this standard had no impact on
the Group.
Interpretation 23 Uncertainty over Income Tax
The Group has adopted Interpretation 23 from 1 July 2019.
The interpretation clarifies how to apply the recognition
and measurement requirements of AASB 112 ‘Income
Taxes’ in circumstances where uncertain tax treatments
exists. The interpretation requires:
• the Group to determine whether each uncertain tax
treatment should be treated separately or together,
based on which approach better predicts the resolution
of the uncertainty;
• the Group to consider whether it is probable that a
taxation authority will accept an uncertain tax treatment;
and
• if the Group concludes that it is not probable that the
taxation authority will accept an uncertain tax treatment,
it shall reflect the effect of uncertainty in determining the
related taxable profit (tax loss), tax bases, unused tax
losses, unused tax credits or tax rates, measuring the tax
uncertainty based on either the most likely amount or the
expected value.
58
Annual Report 2020 / Archer Materials Limited
Notes to the Financial Statements for the Year Ended 30 June 2020 In making the assessment it is assumed that a taxation
authority will examine amounts it has a right to examine and
have full knowledge of all related information when making
those examinations. The Group has concluded that the initial
application of this interpretation does not have an impact on
the Group’s financial results.
Management anticipates that all relevant pronouncements
will be adopted for the first period beginning on or after
the effective date of the pronouncement. New Standards,
amendments and Interpretations not adopted in the current
year have not been disclosed as they are not expected to
have a material impact on the Group’s financial statements.
(ii) Standards, amendments and Interpretations to existing
Standards that are not yet effective and have not been
adopted early by the Group
At the date of authorisation of these financial statements,
several new, but not yet effective, Standards and
amendments to existing Standards, and Interpretations have
been published by the AASB. None of these Standards or
amendments to existing Standards have been adopted early
by the Group.
NOTE 2 - INCOME
- Rental income
- Interest received
- Gain on sale of plant and equipment
- Commonwealth COVID Cashflow Stimulus
Total Income
NOTE 3 – INCOME TAX BENEFIT
a) The components of income tax benefit comprise:
Current tax
b) ) The prima facie tax on loss before income tax is reconciled to the income tax
as follows 30% (2019: 30%):
Net loss from continuing operations
Prima facie tax benefit before income tax at 30%
Research and development tax concession
Tax effect of temporary differences not brought to account as they do not meet the
recognition criteria
CONSOLIDATED GROUP
2020
$
-
11,617
130,584
100,000
242,201
2019
$
75,473
22,131
-
-
97,604
238,859
238,859
102,421
102,421
(3,042,011)
(1,840,753)
(912,603)
(912,603)
238,859
912,603
(552,226)
(552,226)
102,421
552,226
Income Tax attributable to operating loss
238,859
102,421
c) Unused tax losses for which no deferred tax asset has been recognised at 30%
6,023,165
5,110,562
Annual Report 2020 / Archer Materials Limited
59
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 4 – KEY MANAGEMENT PERSONNEL REMUNERATION
a) Names and positions held of consolidated entity key management personnel in office at any time during the financial
year are:
Mr Greg English
Chairman – Executive
Ms Alice McCleary
Director – Non-executive
Mr Paul Rix
Director – Non-executive
Dr Mohammad Choucair Chief Executive Officer
Mr Damien Connor
Chief Financial Officer & Company Secretary
Other than those employees of the company listed above there are no additional key management personnel.
b) Key Management Personnel Compensation
Refer to the Remuneration Report for details of the remuneration paid or payable to each member of the Group’s key
management personnel (KMP).
The aggregate remuneration of KMP of the Group during the year is as follows:
Short term benefits
Post-employment benefit
Share - based payments
NOTE 5 – AUDITORS’ REMUNERATION
Remuneration of the auditor for:
- auditing or review of the financial report
NOTE 6 – CASH AND CASH EQUIVALENTS
Short term deposits
Cash at bank and on hand
The effective interest rate on short term bank deposits at 30 June 2020 is 1.51% (30 June
2019: 1.98%). These deposits have an average maturity term of 180 days (30 June 2019:
143 days). The Group’s exposure to interest rate risk is summarised at Note 25.
CONSOLIDATED GROUP
2020
$
810,422
64,984
759,850
1,635,257
2019
$
779,695
61,630
85,388
926,713
33,500
33,500
31,500
31,500
1,120,556
6,994,126
8,114,682
140,208
555,541
695,749
60
Annual Report 2020 / Archer Materials Limited
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 7 – TRADE AND OTHER RECEIVABLES
Research and development tax receivable
Other receivables
NOTE 8 – INVESTMENT IN CONTROLLED ENTITIES
Parent Entity
- Archer Materials Limited
Subsidiaries of Archer Materials Limited:
- Pirie Resources Pty Ltd
- Archer Pastoral Company Pty Ltd
- Archer Energy and Resources Pty Ltd
- SA Exploration Pty Ltd
- Carbon Allotropes Pty Limited
- Leigh Creek Magnesite Pty Ltd 1
- CH Magnesite Pty Ltd 1
Country of Incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
CONSOLIDATED GROUP
2020
$
238,859
85,872
324,731
2019
$
102,421
43,616
146,037
Percentage Owned
2020
2019
%
-
100
100
100
100
100
100
100
%
-
100
100
100
100
100
100
100
1 During the year ended 30 June 2019 the Company executed a legally binding agreement for sale of subsidiaries that hold the Leigh Creek Magnesia
Project tenements. Shareholders approved the sale of the Company’s wholly owned subsidiaries that hold the Leigh Creek Magnesia Project, being Leigh
Creek Magnesite Pty Ltd and CH Magnesite Pty Ltd, at the General Meeting of Shareholders held on 3 September 2018. The sale transaction completed
subsequent to the end of the Reporting Period (Refer to Note 18).
Annual Report 2020 / Archer Materials Limited
61
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 9 – PROPERTY, PLANT AND EQUIPMENT
a) Plant and Equipment at cost
Accumulated depreciation
Movements in carrying amounts:
Balance at the beginning of the year
Additions
Disposals
Depreciation
Reclassification of assets previously held for sale
Balance at 30 June
b) Land at cost
Movements in carrying amounts:
Balance at the beginning of the year
Additions
Transferred to assets held for sale 1
Write-off of Campoona Land asset
Balance at 30 June
c) Buildings at cost
Accumulated depreciation
Movements in carrying amounts:
Balance at the beginning of the year
Depreciation
Transferred to assets held for sale 1
Balance at 30 June
CONSOLIDATED GROUP
2020
$
2019
$
263,174
236,970
(203,611)
(177,791)
59,563
59,179
59,179
26,204
-
40,020
2,083
-
(25,820)
(24,294)
-
59,563
41,370
59,179
-
-
-
-
-
-
-
-
-
-
-
-
-
1,028,453
1,028,453
13,384
(1,041,837)
-
-
-
-
-
179,333
(4,000)
(175,333)
-
Total property, plant and equipment
59,563
59,179
1 Refer to Note 11 for further information regarding the non-current assets held for sale in the prior year.
62
Annual Report 2020 / Archer Materials Limited
Notes to the Financial Statements for the Year Ended 30 June 2020
CONSOLIDATED GROUP
2020
$
2019
$
15,069,074
14,500,289
15,069,074
14,500,289
14,500,289
11,638,439
943,106
(350,609)
(23,712)
909,294
(82,159)
(34,471)
-
2,069,186
15,069,074
14,500,289
NOTE 10 – EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of areas of interest in:
Exploration and evaluation at cost
Movements in carrying amounts:
Balance at the beginning of the year
Amounts capitalised during the year
Impairment expense during the year
Transferred to assets held for sale
Reclassification of assets previously held for sale
Balance at 30 June
During the year $10,563 (2019: $10,562) of equipment depreciation was included in
the amount capitalised as exploration and evaluation.
Impairment recognised for the year ended 30 June 2020 and 30 June 2019 related
to relinquishment of the tenement(s) to which expenditure had been previously
capitalised.
A summary by tenement is included at Note 17.
2020
$
-
2019
$
1,217,170
Land and
buildings
NOTE 11 – NON-CURRENT ASSETS HELD FOR SALE
On 1 July 2019, the Company announced the completion of the
sale of its Sugarloaf farmland located on the Eyre Peninsula. At
completion Archer received $1.35 million.
The Sugarloaf farm land is contained within Archer tenement EL
5920 and hosts the Sugarloaf carbon deposit and the proposed
site of the Sugarloaf Graphite Processing Facility, which will be used
to process the graphite from the nearby Campoona mining lease.
Under the terms of the Sale Agreement, Archer has sold the
entirety of the Sugarloaf farmland but maintains an option to buy
back approximately 30% of the Land, which will be required for the
construction of the processing facility, to process graphite from the
nearby Campoona mining lease. The option to buy back part of the
land can be exercised by Archer any time during the next 20 years.
The Directors have estimated the fair value of this option to be $nil
at 30 June 2020 as the Directors cannot reliably determine if this
option will be exercised.
Annual Report 2020 / Archer Materials Limited
63
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 12 – TRADE AND OTHER PAYABLES
Trade payables
Other creditors and accruals
NOTE 13 – EMPLOYEE ENTITLEMENTS
Current 1
Non-current
Total
CONSOLIDATED GROUP
2020
$
2019
$
124,484
170,253
83,507
63,132
207,991
233,385
217,629
125,836
41,970
22,475
259,599
148,311
1
Includes an amount of $134,906 (including 9.5% SGC), in aggregate, related to outstanding bonus amounts payable to staff of the Company for the
performance year ended 30 June 2020 (30 June 2019: $42,325).
64
Annual Report 2020 / Archer Materials Limited
Notes to the Financial Statements for the Year Ended 30 June 2020 NOTE 14 – ISSUED CAPITAL
224,354,823 (2019: 196,304,283) fully paid ordinary shares
32,485,250
23,873,093
CONSOLIDATED GROUP
2020
$
2019
$
a) Shares on issue:
30 June 2020
Issued and paid up capital
Fully paid ordinary shares
Movements in fully paid shares
Balance as at 1 July 2019
Shares issued - vested performance Rights (8 July 2019)
Shares issued - Share Purchase Plan (13 December 2019)
Shares issued - exercise of options (12 May 2020)
Shares issued exercise of options (18 May 2020)
Shares issued - exercise of options (26 June 2020)
Shares issued - Share Purchase Plan (30 June 2020)
Balance as at 30 June 2020
30 June 2019
Issued and paid up capital
Fully paid ordinary shares
Movements in fully paid shares
Balance as at 1 July 2018
Shares issued - vested performance Rights (6 Jul 2018)
Shares issued - Exercise of SPP Options (25 Jul 2018)
Shares issued - Exercise of SPP Options (18 Aug 2018)
Shares issued - Exercise of SPP Options (31 Oct 2018)
Shares issued - vested performance rights (31 Oct 2018)
Shares issued - Exercise of SPP Options (4 Jan 2019)
Shares issued - Exercise of SPP Options (21 Feb 2019)
Shares issued - Exercise of SPP Options (6 Mar 2019)
Shares issued - Placement (22 May 2019)
Balance as at 30 June 2019
Number
$
224,354,823
32,485,250
196,304,283
23,873,093
787,500
15,327,790
100,000
830,000
400,000
-
1,992,600
19,290
160,107
77,160
10,605,250
6,363,000
224,354,823
32,485,250
Number
$
196,304,283
23,873,093
137,194,306
750,000
570,431
55,854
13,964
3,000,000
107,054
169,364
426,073
4,285,714
196,304,283
19,519,325
-
42,782
4,189
1,047
240,000
8,029
12,702
31,955
283,200
23,873,093
Annual Report 2020 / Archer Materials Limited
65
Notes to the Financial Statements for the Year Ended 30 June 2020
b) Options on issue
All options on issue are unlisted options (Options). Details of the Options outstanding as at the end of the year are set out
below:
Grant Date
Issue Date
Options
Expiry Date
Exercise Price
30 June 2020
30 Oct 20191
12 Nov 2019
Directors & CEO
31 Mar 2023
12 Nov 2019
12 Nov 2019
Other Employees
31 Mar 2023
5 Feb 2019
7 Feb 2020
Consultant
31 Mar 2023
$0.1929
$0.1929
$0.245
11,170,000
5,000,000
2,000,000
18,170,000
1
In accordance with Australian Accounting Standard AASB 2, the deemed grant date for the Options issued to Directors and CEO was the date the Company
received shareholder approval, being 30 October 2019. All Options issued to other employees have a grant date equal to the issue date, being 12 November
2019.
On 12 November 2019, 17,500,000 Options were issued to Directors and employees of Archer following shareholder
approval at the Company’s Annual General Meeting held on 30 October 2019 (2019 AGM). Options were granted at no cost
to the recipients and vest immediately upon issue. During the reporting period 1,330,000 Options were exercised into fully
paid ordinary shares.
On 7 February 2020, 2,000,000 Options were issued to a consultant who was assisting in the development of the
Company’s halloysite-kaolin projects, pursuant to the terms and conditions of a Services Agreement with the Company.
The Options were issued for nil consideration and were subject to particular vesting conditions detailed in the Service
Agreement. The Services Agreement expired on 30 June 2020, and the 2,000,000 Options were forfeited subsequent to
year end in accordance with the terms that they were issued..
No further Options were issued, exercised or forfeited during the reporting period.
c) Performance Rights on issue
Details of the Rights outstanding as at the end of the year are set out below:
Grant Date
Total Granted
Expiry Date
Exercise Price
Total Vested Total Forfeited
28 Oct 2016
6 Jul 2018
2,700,000
450,000
31 Jul 2019
31 Jul 2019
Nil
Nil
1,312,500
225,000
1,387,500
225,000
Balance at
30 June 2020
-
-
-
During the reporting period 787,500 new shares were issued as a result of vesting and exercise of an equivalent number of
Rights and 262,500 Rights lapsed unexercised.
There were no Rights issued during the reporting period and no Rights are on issue at the date of this report. See Note 14
for further details regarding movements in Rights during the reporting period.
d) Capital Management
The Group has no externally imposed capital requirements
66
Annual Report 2020 / Archer Materials Limited
Notes to the Financial Statements for the Year Ended 30 June 2020 NOTE 15 – EARNINGS PER SHARE
Reconciliation of earnings to Statement of Profit or Loss and other
Comprehensive Income
Loss for year used to calculate basic EPS
CONSOLIDATED GROUP
2020
$
2019
$
(2,816,890)
(1,738,332)
Number
Number
a) Weighted average number of shares outstanding during the year
205,591,058
190,946,622
used in calculation of basic EPS
NOTE 16 – RESERVES
Share based payment reserve
Acquisition reserve
CONSOLIDATED GROUP
2020
$
997,000
240,000
1,237,000
2019
$
24,698
240,000
264,698
The share based payments reserve records items recognised as an expense on valuation of options or performance
rights. The increase in this reserve from the prior year is associated with the issue of unlisted options during the reporting
period. Refer Note 22 for further details regarding options issued during the reporting period.
The acquisition reserve represents the fair value 3,000,000 performance rights previously issued as consideration for the
Company’s acquisition of Carbon Allotropes Pty Limited, treated in accordance with AASB 3 Business Combinations.
Annual Report 2020 / Archer Materials Limited
67
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 17 – TENEMENT INTERESTS
Exploration Licences
The Company’s tenement interests as at 30 June 2020 are as follows:
Location
Tenement
Commodity
South Australia
Carappee Hill
Wildhorse Plains
Waddikee
Cockabidnie
North Cowell
Carpie Puntha
Blue Hills
Pine Creek
Altimeter
Napoleons Hat
North Burra
Whyte Yarcowie
Franklyn
Peterborough
Bendigo 1
Caralue Bluff 1
New South Wales
North Broken Hill 2
North Broken Hill 2
North Broken Hill 2
North Broken Hill 2
North Broken Hill 2
Crowie Creek 1
Stanthorpe 1
Western Australia
Mt Keith
EL 5920
EL 5804
EL 5815
EL 5791
EL 6363
EL 5870
EL 5794
EL 6000
EL 6029
EL 5769
EL 6351
EL 5935
EL 6160
EL 6287
EL6354
EL 6478
EL 8592
EL 8593
EL 8594
EL 8595
EL 8779
EL 8871
EL 8894
Graphite
Graphite
Graphite/Kaolin
Graphite
Graphite
Graphite
Copper/Gold
Copper/Gold
Copper/Gold
Copper/Gold
Base Metals
Cobalt/Copper
Copper/Gold/Kaolin
Copper/Gold
Copper/Gold
Kaolin
Cobalt/Copper
Cobalt/Copper
Cobalt/Copper
Cobalt/Copper
Cobalt/Copper
Copper/Gold
Tungsten/Tin
E53/1926
Nickel
Total non-current exploration and evaluation expenditure
Tenements classified as assets of disposal group held for sale:
South Australia
Witchelina 3
Termination Hill 3
Exploration assets classified as assets of disposal group held for sale
EL 6019
EL 5730
Magnesite
Magnesite
2020
Carrying value $
2019
Carrying value $
1,501,496
9,048,515
1,279,071
38,358
396,864
31,256
613,254
452,946
103,362
136,888
994,280
23,788
305,324
18,483
17,551
10,166
1,473,446
8,945,620
1,013,881
36,752
391,703
25,899
604,023
458,351
68,061
134,876
977,996
22,371
18,937
10,348
7,985
-
14,971,601
14,190,249
-
-
-
-
-
24,837
7,693
32,530
79,855
118,447
73,519
13,951
9,197
-
294,969
64,944
64,944
15,069,074
15,072
15,072
14,500,289
157,278
1,422,957
1,580,235
153,985
1,402,538
1,556,523
TOTAL TENEMENT INTEREST CARRYING VALUE
16,649,309
16,056,812
68
Annual Report 2020 / Archer Materials Limited
Notes to the Financial Statements for the Year Ended 30 June 2020 OTHER LICENSES
Location
Campoona Shaft
Sugarloaf
Pindari
Tenement
ML 6470
MPL 150
MPL 151
Description
Campoona Shaft
Graphite and graphene processing
facility
Pindari pipeline
1 Granted during the year. 2 Relinquished during the year.
3 The magnesite tenements consist the Leigh Creek Magnesia Project and were sold during the year ended 30 June 2019. The sale transaction completed
subsequent to the end of the Reporting Period (Refer Note 18).
All tenements and tenement applications are held 100% by Archer and its related body corporates except for EL 5804
where S Uranium Pty Ltd has the rights to explore and develop uranium projects
NOTE 18 – DISPOSAL GROUPS CLASSIFIED AS HELD
FOR SALE AND DISCONTINUTED OPERATIONS
On 9 October 2018, the Company announced the
termination of the Share Sale Agreements with Ballista
Resources Limited and subsequent cessation of non-
graphite assets spin-out via IPO. The Share Sale Agreement
involved the sale of Archer’s wholly owned subsidiaries SA
Exploration Pty Ltd and Archer Energy & Resources Pty Ltd
to Ballista Resources Limited. Given the Share Agreement
has been terminated all of the assets and liabilities
previously classified as ‘assets and disposal groups
classified as held for sale and discontinued operations’, for
both SA Exploration Pty Ltd and Archer Energy & Resources
Pty Ltd have been re-classified in the Statement of Financial
Position to no longer be classified as held for sale.
SALE OF THE LEIGH CREEK MAGNESIA PROJECT
During the year ended 30 June 2018, the Company decided
to sell its wholly owned subsidiaries, Leigh Creek Magnesite
Pty Ltd (LCM) and CH Magnesite Pty Ltd (CHM), which
together comprise the Company’s Leigh Creek Magnesia
Project (Project).
The Project is located approximately 20 kilometres northwest
of Leigh Creek Township, South Australia and consists of two
granted exploration licences – EL 5730 (held by LCM) and EL
6019 (held by CHM).
This decision was taken in line with the group’s strategy to
intensify its focus on its advanced materials activities, which
is consistent with the goal of the Review, to focus Archer’s
future investment and management attention towards areas
that will deliver the best risk weighted returns for its investors.
Consequently, certain assets and liabilities allocable to
Leigh Creek Magnesite Pty Ltd and CH Magnesite Pty Ltd
are classified as a disposal group.
Revenue and expenses, gains and losses relating to the
discontinuation of this subgroup have been eliminated from
profit or loss from the groups continuing operations and are
shown as a single line item on the face of the statement of
profit or loss.
On 2 July 2018, the Company announced the sale of the
Leigh Creek Magnesia Project.
On 14 August 2020, the Company announced the
Completion of the sale of the Project. At Completion the
Company received 6,535,775 shares (“Consideration
Shares”) in Canadian Stock Exchange listed Volatus Capital
Corp. (“Volatus”). The Consideration Shares have a value of
$2.64 million † and can be traded for the first time only after
four months have elapsed from the date of distribution.
Archer has received $2.89† million for the Project,
comprising:
• $250,000 cash already received; plus
• $2.0 million of Volatus shares at Completion; plus
• Bonus payment of $639,133 of Volatus shares at
Completion.
Archer may be entitled to receive a further bonus payment
should there be a future transaction with the other company
that purchased the remainder of the Project.
+ Assumes Volatus share price of A$0.40, AUD:CDN exchange rate of
$0.9584 and 6,535,775 Consideration Shares issued to Archer.
Annual Report 2020 / Archer Materials Limited
69
Notes to the Financial Statements for the Year Ended 30 June 2020
Operating profit of Leigh Creek Magnesite Pty Ltd and CH Magnesite Pty Ltd are shown below:
Impairment of exploration assets
Other expenses
Loss for year from discontinued operations before tax
Assets and Liabilities of Leigh Creek Magnesite Pty Ltd and CH Magnesite Pty Ltd
are shown below:
Statement of financial position
Other current assets
Non-current exploration assets
Assets of the disposal group held for sale
Current trade payables
Liabilities included in disposal group held for sale
Cash flows generated by Leigh Creek Magnesite Pty Ltd and CH Magnesite Pty Ltd
are shown below:
Operating activities
Net cash used in discontinued operations
2020
$
-
(13,738)
(13,738)
2019
$
-
(845)
(845)
1
1,580,235
1,580,236
267
267
136
1,556,523
1,556,659
263
263
(13,471)
(13,471)
(845)
(845)
CONSOLIDATED GROUP
2019
2020
$
$
NOTE 19 – CAPITAL AND OTHER EXPENDITURE COMMITMENTS
(a) Expenditure Commitments
Capital commitments relating to tenements
The consolidated group is required to meet minimum expenditure requirements of various Australian Government bodies.
These obligations are subject to renegotiation, may be farmed out or may be relinquished and have not been provided for
in the financial statements.
Exploration expenditure commitments
Expenditure commitment 1
3,608,000
2,309,500
1
Includes exploration expenditure commitments relating to tenements that have been classified as assets of disposal groups held for sale in the statement of
financial position as at 30 June 2020.
Property commitments
The Company has no property commitments as at 30 June 2020 (30 June 2019: Nil)
70
Annual Report 2020 / Archer Materials Limited
Notes to the Financial Statements for the Year Ended 30 June 2020
(b) Contingent Assets/Liabilities
In November 2018 Archer announced the sale of its Sugarloaf farmland for $1.35 million. The transaction settled on 1 July 2019 with
Archer receiving the $1.35 million sale proceeds in July 2019. The purchaser of the farm land has granted Archer an option to buy back
approximately 30% of the Sugarloaf farm land, which may be required for the construction of the Sugarloaf Graphite Processing Facility
(“Land Option”). The Land Option may be exercised by Archer any time during the next 20 years
The Group did not have any further contingent assets as at 30 June 2020.
The Group did not have any contingent liabilities as at 30 June 2020.
The Group has minimum expenditure commitments on exploration licences as per the terms of the exploration licences. Unexpended
commitment for a particular year can be deferred or rolled over to subsequent years of the licence term.
NOTE 20 – OPERATING SEGMENTS
Segment Information
The Directors have considered the requirements of AASB 8 - Operating segments and the internal reports that are
reviewed by the chief operating decision maker (the Board) in allocating resources have concluded at this time there
are no separately identifiable segments. The Group operates in one segment being materials technology research and
development and mineral exploration which are highly integrated.
NOTE 21 – CASH FLOW INFORMATION
a) Reconciliation of cash flows from operations with Loss after Income Tax
CONSOLIDATED GROUP
2020
$
2019
$
Loss after income tax
(2,816,890)
(1,738,332)
Depreciation (net of capitalised depreciation)
Amortisation of intangibles
Write-down of inventory
Share based payment
Gain on sale of assets
Exploration expenditure expensed
Impairment of exploration assets
Changes in assets and liabilities:
- Increase in trade and other receivables
- Increase / (Decrease) in trade and other payables
- Increase / (Decrease) in employee entitlements
15,257
6,304
-
997,000
(130,584)
3,173
350,609
(62,156)
24,424
111,288
17,730
52,403
76,800
89,066
-
33,287
82,159
(117,124)
(77,693)
(6,971)
Net cash used in operating activities
(1,501,575)
(1,588,675)
Annual Report 2020 / Archer Materials Limited
71
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 22 – SHARE BASED PAYMENTS
a) Performance Rights
Balance at the beginning of the year
Granted during the year
Vested during the year
Forfeited during the year
Balance at the end of the year
CONSOLIDATED GROUP
2020
2019
Number of
Performance Rights
Number of
Performance Rights
1,050,000
-
(787,500)
(262,500)
-
4,500,000
450,000
(3,750,000)
(150,000)
1,050,000
No Performance Rights (Rights) were granted during the period.
On 8 July 2019, 787,500 new shares were issued as a result of the vesting of 75% of previously issued Rights that met
the performance conditions for the performance period 1 July 2018 to 30 June 2019. The remaining 262,500 Rights
(representing 25%) were forfeited.
No expense has been included in the Statement of Profit or Loss and Other Comprehensive Income under employee
benefits expense for the year ended 30 June 2020 (30 June 2019: $9,066).
Additionally, an amount of $24,698, relating to previously recognised share based payments was transferred to retained
losses. The transfer related to the fair value of prior period share based payments in respect of performance rights that have
now either been exercised or forfeited.
b) Unlisted Options
Balance at the beginning of the period
Granted during the period
Exercised during the period
Forfeited during the period
Balance at the end of the period
CONSOLIDATED GROUP
Number of Unlisted Options Number of Unlisted Options
2020
2019
-
19,500,000
(1,330,000)
-
18,170,000 1
5,000,000
-
-
(5,000,000)
-
1 On 7 February 2020, 2,000,000 Options were issued to a consultant who was assisting in the development of the Company’s halloysite-kaolin projects. The
Options were issued for nil consideration and were subject to particular vesting conditions detailed in the services agreement between the company and the
consultant (Service Agreement). The Services Agreement expired on 30 June 2020, and the 2,000,000 Options were forfeited subsequent to year end. No
amount was recorded in the Statement of Profit or Loss and Other Comprehensive Income given the Options were o longer able to vest, according to the
terms on which they were issued.
72
Annual Report 2020 / Archer Materials Limited
Notes to the Financial Statements for the Year Ended 30 June 2020
On 12 November 2019, 17,500,000 unlisted options to acquire fully paid ordinary shares in the Company (Options) were
issued to Directors and employees of Archer following shareholder approval at the Company’s Annual General Meeting held
on 30 October 2019 (2019 AGM). Options were granted at no cost to the recipients and vest immediately upon issue.
Options were granted pursuant to the Company’s Performance Rights and Share Option Plan, which was approved by
shareholders at the 2019 AGM.
The details of the Options granted are as follows:
Recipient
Grant Date
Issue Date
No. of Options
Exercise Price
Expiry Date
KMP
30 Oct 20191
12 Nov 2019
11,500,000
Other Employees
12 Nov 2019
12 Nov 2019
6,000,000
$0.1929
$0.1929
31 Mar 2023
31 Mar 2023
1 In accordance with Australian Accounting Standard AASB 2, the deemed grant date for the Options issued to Directors and CEO was the date the Company
received shareholder approval, being 30 October 2019. All Options issued to other employees have a grant date equal to the issue date, being 12 November
2019.
The fair value of the Options issued was calculated by using a Black-Scholes option pricing model and was estimated on
the date of the grant using the following assumptions:
Directors and CEO Options
Other Employees Options
Share price at date of grant ($)
Historic volatility (%)
Risk free interest rate (%)
Expected life of Options (days)
0.135
77.2
0.78
1235
0.125
75.7
0.84
1235
Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of
future tender, which may not eventuate.
The life of the Options is based on the historical exercise patterns, which may not eventuate in the future.
As the options do not require the satisfaction of vesting conditions, these options vest immediately and an amount of
$997,000 has been included in the Statement of Profit or Loss and Other Comprehensive Income under employee benefits
expense for the year ended 30 June 2020 (30 June 2019: Nil)
Options outstanding at 30 June 2020 have a weighted average exercisable price of $0.1929 each and a weighted average
remaining contractual life of 2.75 years.
Options exercised during the reporting period had a weighted average exercise price of $0.1929 each.
Annual Report 2020 / Archer Materials Limited
73
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 23 – EVENTS AFTER REPORTING DATE
c) Other transactions with related parties
On 14 August 2020, the Company announced
the Completion of the sale of the Leigh Creek
Magnesia Project (“Project”). At Completion
the Company received 6,535,775 shares
(“Consideration Shares”) in Canadian Stock
Exchange listed Volatus Capital Corp.
(“Volatus”). The Consideration Shares have
a value of $2.64 million(1) and can be traded
for the first time only after four months have
elapsed from the date of distribution.
Archer has received $2.89† million for the Project,
comprising:
• $250,000 cash already received; plus
• $2.0 million of Volatus shares at Completion; plus
• Bonus payment of $639,133 of Volatus shares at
Completion.
Archer may be entitled to receive a further bonus
payment should there be a future transaction with the
other company that purchased the remainder of the
Project.
† Assumes Volatus share price of A$0.40, AUD:CDN exchange rate of
$0.9584 and 6,535,775 Consideration Shares issued to Archer.
On 18 September 2020, 300,000 share options (exercise
price $0.1929 and expiry date of 31 March 2023) were
exercised into shares.
NOTE 24 – RELATED PARTY TRANSACTIONS
a) Subsidiaries
Interests in subsidiaries are disclosed in Note 8.
Piper Alderman lawyers were paid a total of $29,950
(2019: $26,453) for legal services rendered to the Group.
Mr English is a partner of Piper Alderman lawyers. The
fees were at normal commercial rates.
NOTE 25 – FINANCIAL INSTRUMENTS
a) Financial Risk Management Policies
The Group’s financial instruments consist mainly
of deposits with banks, short-term investments,
accounts receivable and payables and loans to
and from subsidiaries.
b) Non-Cash Financing and Investing Activities
There were no non-cash financing and investing
activities undertaken during the current or prior
reporting periods.
i) Treasury Risk Management
The Board meets on a regular basis to analyse
financial risk exposure and to evaluate
treasury management strategies in the context
of the most recent economic conditions and
forecasts.
The Board’s overall risk management strategy
seeks to assist the consolidated group in
meeting its financial targets, whilst minimising
potential adverse effects on financial
performance.
ii) Financial Risk Exposure and Management
the main risk the group is exposed to through its
financial instruments is interest rate risk.
b) Key Management Personnel
Interest Rate Risk
Disclosures relating to Key Management personnel are
set out in Note 4 and the Remuneration Report contained
within the Directors’ Report.
Interest rate risk is managed with a mixture of
fixed and floating rate cash deposits. It is the
policy of the group to keep surplus cash in high
yielding deposits.
74
Annual Report 2020 / Archer Materials Limited
Notes to the Financial Statements for the Year Ended 30 June 2020 Weighted Average
Effective Interest Rate
Interest Bearing
Non Interest Bearing
Total
2019
%
2020
$
$
2019
2020
2019
2020
2019
$
$
$
-
-
$
-
-
0.40% 6,994,126
555,541
1.98% 1,120,556
140,208
6,994,126
555,541
1,120,556
140,208
-
-
324,731
146,037
324,731
146,037
8,114,682
695,749
324,731
146,037 8,439,413
841,786
-
-
-
-
(207,991)
(233,385)
(207,991)
(233,385)
(207,991)
(233,385)
(207,991)
(233,385)
8,114,682
695,749
116,740
(87,348) 8,231,421
608,401
2020
%
0.25%
1.51%
Financial Assets
Cash at bank
Deposits
Receivables
Total Financial
Assets
Financial
liabilities
Payables
Total Financial
Liabilities
Total Net Financial
Assets/ (Liabilities)
b) Sensitivity Analysis
Interest Rate and Price Risk
The group has performed a sensitivity analysis relating to its exposure to interest rate risk and price risk at reporting date. This
sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.
Interest Rate Sensitivity Analysis
At 30 June 2020, the effect on loss and equity as a result of changes in the interest rate, with all other variables remaining
constant would be as follows:
Change in loss
- Increase in interest rates by 2%
- Decrease in interest rates by 2%
Change in equity
- Increase in interest rates by 2%
- Decrease in interest rates by 2%
CONSOLIDATED GROUP
2020
$
22,411
(22,411)
22,411
(22,411)
2019
$
2,804
(2,804)
2,804
(2,804)
Annual Report 2020 / Archer Materials Limited
75
Notes to the Financial Statements for the Year Ended 30 June 2020
c) Net Fair Value of Financial Assets and Liabilities
d) Credit Risk
The net fair value of cash and cash equivalent and non-
interest bearing monetary financial assets and financial
liabilities of the consolidated entity approximate their
carrying value.
The net fair value of other monetary financial assets and
financial liabilities is based on discounting future cash
flows by the current interest rates for assets and liabilities
with similar risk profiles. The balances are not materially
different from those disclosed in the balance sheet of the
consolidated entity.
The maximum exposure to credit risk, excluding the value
of any collateral or other security, at reporting date to
recognised financial assets, is the carrying amount, net
of any provisions for doubtful debts of those assets, as
disclosed in the balance sheet and notes to the financial
statements.
The consolidated entity does not have any material
credit risk exposure to any single debtor or group of
debtors under financial instruments entered into by the
consolidated entity.
NOTE 26 – ARCHER EXPLORATION LIMITED PARENT COMPANY INFORMATION
PARENT ENTITY
ASSETS
Current Assets
Non-current assets
Loans to subsidiaries
Investments in subsidiaries
Other non-current assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Non-current Liabilities
Loans from subsidiaries
TOTAL LIABILITIES
EQUITY
Issued capital
Share based payment reserve
Acquisition reserve
Accumulated losses
TOTAL EQUITY
FINANCIAL PERFORMANCE
Loss for the year
Other comprehensive income
TOTAL LOSS
PARENT ENTITY
2020
$
2019
$
8,362,472
706,318
-
266,624
127,561
8,756,657
640,590
41,970
25,269
707,829
-
266,624
94,005
1,066,947
518,072
22,475
25,269
565,816
32,485,250
997,000
240,000
(25,673,421)
8,048,829
23,873,093
24,698
240,000
(23,636,660)
501,131
(2,036,761)
-
(2,036,761)
(2,485,357)
-
(2,485,357)
Guarantees in relation to relation to the debts of
subsidiaries
Archer Materials Limited has not entered into a deed
of cross guarantee with its wholly-owned subsidiaries
Pirie Resources Pty Ltd, Archer Pastoral Company Pty
Ltd, Leigh Creek Magnesite Pty Ltd, Archer Energy &
Resources Pty Ltd, SA Exploration Limited, CH Magnesite
Pty Ltd and Carbon Allotropes Pty Limited.
76
Annual Report 2020 / Archer Materials Limited
Contingent assets, liabilities and commitments
The Company has no contingent assets, liabilities or
commitments as at 30 June 2020 (30 June 2019: Nil).
The Group has minimum expenditure commitments on
exploration licences as per the terms of the exploration
licences. Unexpended commitment for a particular year
can be deferred or rolled over to subsequent years of the
licence term.
Notes to the Financial Statements for the Year Ended 30 June 2020 The Directors of the Company declare that:
1. the Financial Statements and Notes as set out on pages 45 to 76 are in accordance with the Corporations Act 2001 and:
a) comply with Australian Accounting Standards and International Financial Reporting Standards as disclosed in Note 1;
and
b) give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended on
that date of the Consolidated Group;
2. the Executive Chairman and the Chief Financial Officer have each declared that:
a) the financial records of the Company for the year ended have been properly maintained in accordance with section
286 of the Corporations Act 2001;
b) the financial statements and notes for the financial year comply with the Accounting Standards; and
c) the financial statements and notes give a true and fair view;
3. in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
GREG ENGLISH
CHAIRMAN
Adelaide
Dated this 25th September 2020
Annual Report 2020 / Archer Materials Limited
77
Directors Declaration
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of Archer Materials Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Archer Materials Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets - Notes 10
At 30 June 2020 the carrying value of exploration and
evaluation assets was $15,069,074.
In accordance with AASB 6 Exploration for and Evaluation of
Mineral Resources, the Group is required to assess at each
reporting date if there are any triggers for impairment which
may suggest the carrying value is in excess of the recoverable
value.
The process undertaken by management to assess whether
there are any impairment triggers in each area of interest
involves an element of management judgement.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
Our procedures included, amongst others:
obtaining the management reconciliation of capitalised
exploration and evaluation expenditure and agreeing to the
general ledger;
reviewing management’s area of interest considerations
against AASB 6;
conducting a detailed review of management’s
assessment of trigger events prepared in accordance with
AASB 6 including;
tracing projects to statutory registers, exploration
licenses and third party confirmations to determine
whether a right of tenure existed;
enquiry of management regarding their intentions to
carry out exploration and evaluation activity in the
relevant exploration area, including review of
management’s budgeted expenditure;
understanding whether any data exists to suggest that
the carrying value of these exploration and evaluation
assets are unlikely to be recovered through
development or sale;
assessing the accuracy of impairment recorded for the
year as it pertained to exploration interests;
evaluating the competence, capabilities and objectivity of
management’s experts in the evaluation of potential
impairment triggers; and
assessing the appropriateness of the related financial
statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 at: http://www.auasb.gov.au/auditors_responsibilities/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 the Directors’ report for the year ended 30 June 2020. In our
opinion, the Remuneration Report of Archer Materials Limited, for the year ended 30 June 2020 complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B K Wundersitz
Partner – Audit & Assurance
Adelaide, 25 September 2020
ADDITIONAL INFORMATION
Compiled as at 14 September 2020
Additional information required by the ASX Listing Rules and not disclosed elsewhere in this report is set out below.
SHAREHOLDER INFORMATION
Substantial Shareholders
There are no substantial shareholders in the Company with 5% or greater relevant interest in securities of the company..
Distribution of equity securities
Number of security holders by size of holding:
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Shares
473
1,961
1,141
2,030
365
5,970
Unlisted Options
Unlisted Performance Rights
-
-
-
-
8
8
-
-
-
-
-
-
Unmarketable Parcels
Minimum parcel size
Minimum $500.00 parcel at
$0.65 per share
770 shares
Holders
232
Units
44,543
VOTING RIGHTS
At meeting of members or classes of members.
Ordinary shares
On a show of hands, every person present who is a member or proxy, attorney or representative of a member has one vote.
Unlisted options and Unlisted Performance Rights
No voting rights.
82
Annual Report 2020 / Archer Materials Limited
Additional Information TWENTY LARGEST HOLDERS OF EACH CLASS OF QUOTED EQUITY SECURITY
Ordinary Shares
Rank
Name
Shares % Issued capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
20
20
20
20
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
9,865,089
GDE EXPLORATION (SA) PTY LTD
7,534,798
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR ROGER EDWARD KOCH
INVERTON PTY LTD
DR MOHAMMAD CHOUCAIR
MR FORBES VALE SPRAWSON + MRS MARGARET MARY SPRAWSON
MR BASIL CATSIPORDAS
MRS DEBORAH ANNETTE ROSSITER
KOOYAP PTY LTD
MR ALISTAIR CHARLES JACKSON
GDE EXPLORATION (SA) PTY LTD
MR STEPHEN MAHNKEN + MS DIOR MAHNKEN
BNP PARIBAS NOMINEES PTY LTD
MR JARROD DRISCOLL
MR STUART JAMES MACKAY
GERARD ANDERSON SUPER PTY LTD
CLOCKWELL PTY LTD
5,095,210
4,890,063
3,030,000
2,700,761
2,600,000
2,533,270
2,000,000
1,883,679
1,880,770
1,547,347
1,462,820
1,428,571
1,247,909
1,132,957
1,120,000
1,078,041
1,060,000
BENNELONG RESOURCES PTY LIMITED
1,000,000
MR GEOFFREY DONALD ARCHER + MRS MARY ANNE ARCHER
MR DUNCAN GERARD GOWANS + MRS JODIE LOUISE GOWANS
INVIA CUSTODIAN PTY LIMITED
RJ & KE SUPER FUND PTY LTD
1,000,000
1,000,000
1,000,000
1,000,000
4.40
3.36
2.27
2.18
1.35
1.20
1.16
1.13
0.89
0.84
0.84
0.69
0.65
0.64
0.56
0.50
0.50
0.48
0.47
0.45
0.45
0.45
0.45
0.45
Total
59,091,285
26.34
Corporate Governance Statement
For the Year Ended 30 June 2020
The Corporate Governance Statement for the Group is located in the Corporate Governance section of the Company’s
website at: www.archerx.com.au
Annual Report 2020 / Archer Materials Limited
83
Additional Information
DIRECTORS
Greg English – Executive Chairman
Alice McCleary – Non-Executive Director
Paul Rix – Non-Executive Director
AUDITORS
Grant Thornton Audit Pty Ltd
Level 3, 170 Frome Street
ADELAIDE SA 5000
CHIEF EXECUTIVE OFFICER
SOLICITOR
Piper Alderman
Level 16, 70 Franklin Street
ADELAIDE SA 5000
BANKERS
National Australia Bank
Level 11, 22 King William Street
ADELAIDE SA 5000
AUSTRALIAN SECURITIES EXCHANGE
The Company is listed on the Australian Securities
Exchange
ASX CODE: AXE
Mohammad Choucair
COMPANY SECRETARY
Damien Connor
REGISTERED OFFICE
Ground Floor
28 Greenhill Road
WAYVILLE SA 5034
Telephone:
Fax:
Email:
+61 8 8272 3288
+61 8 8272 3888
info@archerx.com.au
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell Street
ADELAIDE SA 5000
84
Annual Report 2020 / Archer Materials Limited
Corporate Directory
Annual Report
2020