ARTEMIS RESOURCES LIMITED
ACN 107 051 749
ANNUAL REPORT
For Year Ended 30 June 2019
Corporate Directory
Directors
Sheikh Maktoum Hasher al Maktoum
(Non-Executive Chairman)
Edward Mead (Executive Director)
Daniel Smith (Non-Executive Director)
Share Registry
Automic Registry Service
Level 2, 267 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
Web: www.automicgroup.com.au
Company Secretary
Bankers
Guy Robertson
Westpac Limited
Royal Exchange
Corner Pitt & Bridge Streets
Sydney NSW 2000
Principal Registered Office
Auditors
Suite 1, 11 Ventnor Avenue
West Perth WA 6005
Telephone: +61 8 6139 0000
Facsimile: +61 2 9078 7661
Email: info@artemisresources.com.au
Web: www.artemisresources.com.au
HLB Man Judd
Level 4, 130 Stirling Street
Perth WA 6000
Telephone: +61 8 9227 7500
Facsimile: +61 8 9227 7533
Securities Exchange Listing
Australia Securities Exchange Limited
(ASX: ARV)
OTC Markets Group (OTCQB: ARTFF)
Frankfurt Stock Exchange (Frankfurt: ATY)
Table of Contents
CHAIRMAN’S LETTER
REVIEW OF OPERATIONS
ANNUAL MINERAL RESOURCES STATEMENT
TENEMENT SCHEDULE
CORPORATE GOVERNANCE
DIRECTORS’ REPORT
REMUNERATION REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS DECLARATION
INDEPENDENT AUDITOR’S REPORT
ASX ADDITIONAL INFORMATION
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Chairman’s Letter
Dear fellow shareholders,
The 2019 financial year saw a significant amount of exploration and development work within the
Group, at a cost of approximately $24 million.
The exploration work resulted in resource upgrades at five of the Group’s projects. This work which
included approximately 33,000 metres of drilling was necessary to prioritise the Artemis projects feed
to the Fox Radio Hill processing plant.
Our strategic review of all of the Group’s projects and resource results, clearly identified Artemis as a
gold company, and the Carlow Castle (CC) project as having the capacity to move Artemis into
production in the medium term. More recent work is focused on upgrading the CC resource to
indicated status, which will allow the project to move forward to a scoping study, feasibility study and
then decision to mine.
The Group spent $13.2 million during the year in bringing the Fox Radio Hill processing plant to within
~80% of completion. Works included the installation of additional crushing equipment, Gekko gold
circuit, tailings dewatering facilities and a gold room. Once minimum tonnages of potential ore sources
are secured and the metallurgical requirements are defined, the plant refurbishment will be
completed.
The granting of the ≈600km2 Armada Project in the highly prospective Paterson Province of Western
Australia, has opened up an exciting new gold frontier for Artemis. The Artemis tenement E45/5276
surrounds AIM listed Greatland Gold Plc’s (GGP) Havieron Project, which is being drilled by Newcrest
Mining Limited through a Joint Venture, to the north, south and east. This project was enhanced early
in the new financial year when Artemis agreed to acquire Rincon Resources Limited. The acquisition,
to be completed later this year, will take Artemis to 1,140km² and make us one of the areas’ largest
land holders, giving the Company scale in close proximity to some of the region’s largest miners.
Given an exceptional asset base, including near complete processing facilities, and a strong gold price,
the Company is focussed on developing its core assets to add shareholder value. A further capital
raise in 2H calendar 2019 to supplement the $2.7 million raised through the recent share purchase
plan will enable the Company to further its objectives.
To enable the Group to take advantage of the opportunities presented during the year the Company
arranged a convertible note facility of approximately US$3.9 million. To avoid diluting shareholders’
interests our preference is also to repay rather than equity convert a portion of this debt.
Following my appointment as Chairman in February of this year and realignment of the Group’s
strategy shortly thereafter I am confident that we are well placed to make good progress in the year
ahead. On behalf of the Board I thank our shareholders for their ongoing support.
Sheikh Maktoum Hasher al Maktoum
Chairman
Artemis Resources Limited Annual Financial Report – June 2019
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Review of Operations
Artemis Resources Limited (“Artemis” or the “Company”) is pleased to outline the Company’s progress
for the financial year end 30 June 2019. Artemis is a gold exploration company with a large and
prospective suite of assets in the Pilbara region of Western Australia. The Company now has 72
tenements over an area of ≈2,400 km² (Figure 1) and owns 100% of the strategically located Radio Hill
processing plant and infrastructure, located approximately 30km south of Karratha. The Company has
signed a binding term sheet for the acquisition of Rincon Resources, to further expand the Artemis
holding in the Paterson Province (ASX released on 16 July 2019).
During the financial year, the Company updated key 2012 JORC Code compliant resources of gold,
nickel-copper, gold-copper-cobalt and copper-zinc, all situated within a 40 km radius of the Radio Hill
plant.
The following is a summary of the key work programs completed or resources updates during this
reporting period.
Figure 1: Artemis’s Projects in the Karratha Area and Proximity to Radio Hill Process Plant
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RESOURCE DEVELOPMENT
During the year, Artemis completed over 33,000m of drilling across eight of its prospects. The
objective was to prioritise and determine which targets could support long term mining and then
processing at the Radio Hill plant.
During the year, resource updates on Carlow Castle (Au-Cu-Co), Whundo (Cu-Zn), Weeriana (Au),
Radio Hill (Ni-Cu) and Ruth Well (Ni-Cu) were released to the market (summarised below – refer to
ASX releases for full details):
• Carlow Castle (Au-Cu-Co) – Inferred Resources of 7.7Mt @ 1.06 g/t Au, 0.51% Cu and 0.08%
Co for 260,000oz Au, 38,000t Cu and 5,900t of Co (ASX release 6 March 2019)
• Whundo (Cu-Zn) - Indicated JORC Resource of 2.6Mt @ 1.14% Cu and 1.12% Zn for 30,4191t
Copper and 29,992t Zinc (ASX release 26 October 2018)
• Weeriana (Au) - Inferred JORC Resource of 975Kt @ 2.0 g/t Au for 62,739oz Au (ASX release
19 December 2018)
• Radio Hill (Ni-Cu) - Indicated JORC Resource of 1.15 Mt @ 0.52% Ni, 0.73% Cu and 277ppm
Co for 5,980t Nickel, 8,395t Copper and 318t Cobalt (ASX release 21 December 2018)
• Ruth Well (Ni-Cu) – Indicated JORC Resource of 152kt @ 0.63% Ni and 0.47% Cu for 965t
Nickel and 713t Copper (ASX release 7 May 2019)
CARLOW CASTLE (Au-Cu-Co)
Carlow Castle (Au-Cu-Co) is in the West Pilbara region of Western Australia, ~45 km by road east of
Karratha. Access is via the Northwest Coastal Highway and then by the unsealed Cherratta Road which
passes through the project area. Carlow Castle is on the granted exploration license E47/1797 held by
KML No 2 Pty Ltd (which is a 100% owned subsidiary of Artemis). Carlow Castle is ~35 km from Artemis’
100% owned Radio Hill Processing Plant.
In January 2018, the Company announced a JORC Code (2012) compliant resource estimate with a
total Indicated and Inferred resource estimated at 4.5Mt at 0.9 g/t Au, 0.4% Cu and 0.07% Co.
In the second half of calendar 2018 the Group drilled 189 RC holes and 12 diamond drill for 24,754m.
An updated JORC 2012 Resource was released in the first quarter of 2019 with 7.7Mt @ 1.06 g/t Au,
0.51% Cu and 0.08% Co for 260,000oz Au, 38,000t Cu and 5,900t of Co (ASX release 6 March 2019).
Geology and Mineralisation
The Carlow Castle South Au-Cu-Co deposit is hosted by east-west shears in basalt and ultramafics.
Oxidation of the primary mineralisation occurs to depths of 25-65 m below the surface. The Quod Est
Au-Cu-Co deposit is hosted by north-south shears immediately north of Carlow Castle South in basalt
with oxidation of the primary mineralisation down to an estimated 25-40 m below the surface.
The gold-copper-cobalt mineralisation at Quod Est and Carlow Castle South is hosted in chloritic shear
zones within the predominantly Archean mafic sequence. The ore zones appear partially oxidised
above 20m with sulphides extending to depth, the primary sulphides are chalcopyrite, cobaltite and
pyrite; the presence of chalcocite in some samples indicates supergene enrichment in the upper
portions of the sulphide zone.
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The structural environment of the area is complex; Quod Est strikes north-south and dips steeply to
the east whereas Carlow South strikes east-west and dips steeply to the north.
Figure 2: Geology and Drill Hole Location Plan of Artemis Carlow Castle Drilling
The 189 RC and 12 diamond drill holes in the Carlow Castle database includes 22,676 samples assayed
for each of modelled assays, i.e. gold, cobalt and copper, along with a suite of other elements. Table
1 presents the range of drill holes used in the resource estimate.
Hole Type
Hole IDs
Num. holes
Diamond
RC
TOTAL
18CCAD001 - 18CCAD012
ARC001 - ARC189
12
188
200
Total Depth
(m)
1,504.6
23,217.0
24,721.6
Num. Samples Assayed
1,554
21,122
22,676
Table 1: Drill holes used for resource modelling Carlow Castle
Metallurgical Testwork
Artemis has completed preliminary metallurgical testwork on the Carlow Castle Au-Co-Cu Project at
ALS Metallurgy in Western Australia focussing on the metallurgical amenability of selected samples
from the Carlow Castle deposit employing conventional gravity gold, cyanide leach and flotation
processes.
The metallurgical test work scope was focused on recovery of:
• Gold – from both gravity recovery and cyanide leaching processes to produce a gold product
suitable for on-site smelting and production of gold dore; and
• Copper and cobalt – via conventional flotation to produce separate copper and cobalt
concentrates
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The metallurgical test flowsheet utilises typical processing pathways for precious and base metal ores.
Each composite was crushed and ground with coarse gold removed using conventional gravity devices.
The ground-gravity tailing is then subjected to a series of sulphide flotation stages. The flotation stages
employ mineral specific reagents to selectively recover copper and cobalt minerals. Copper flotation
is performed first with the tailings sent for selective cobalt flotation. Copper and Cobalt mineral
rougher concentrates may require a light regrind to release any locked minerals and improve the final
grades of the respective cleaned concentrates. Tailings from the flotation process containing fine or
non-floating gold is subjected to conventional cyanide leach and carbon adsorption processes.
Analysis of the metallurgical results from these samples indicate:
Gold
• A significant gold component ranging up to 48% is recoverable using gravity separation; and
• Most of the balance of the non-gravity gold is recoverable in sulphide concentrates as a by-
product using standard flotation. This gold could be sold in concentrates as a credit or
recovered on site using a cyanide leach process.
Copper
• Quick floating copper minerals produced a high-grade, premium copper concentrate of
approximately 30% Cu;
• Deleterious elements including arsenic are easily managed with a light concentrate polishing
using regrind or blend control; and
• Recoveries depended on mineralogy with 77–85% copper recoveries achieved. Unrecovered
copper minerals are predominantly represented by non-floating silicates or secondary oxide
copper minerals.
Cobalt
• Cobalt recoveries ranged 73-79%;
• Saleable Cobalt concentrate grades ranging 2.3–5.3% Co were produced;
• Cobaltite (CoAsS) is the dominant cobalt bearing mineral - and is therefore intrinsically linked
to arsenic affecting it sale price; and
• Testwork continues to improve cobalt concentrate grades and ultimately aims to maintain
optimal recovery and reduce shipping/smelter treatment charges.
Targeting lower specification concentrates, but at a lower sale price, will minimise processing capital
costs while producing high specification concentrates, commanding higher sale prices, will require a
higher capital input. A trade-off study of capital and operating expense versus revenue from differing
grade product streams will be evaluated prior to final flowsheet selection to optimise financial returns.
The results of the metallurgical testwork program released on 11 February 2019 provides Artemis with
a basis to plan and advance project development activities. The planned development work bringing
Carlow Castle through a Pre-Feasibility Study and into production includes:
• Resource delineation drilling including improved definition of existing resources and
conceptual mining studies;
• Structural and geotechnical drilling; and
• Further metallurgical testing of alternative low-cost process flowsheets to improving cobalt
flotation chemistry and optimise gold cyanide leach recoveries to produce doré on site.
A detailed development timeline for Carlow Castle is being developed.
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Prospectivity and proposed exploration and project development
The number of old workings and surface geochemical anomalies along strike and within the tenement
indicate that the prospectivity of the Carlow Castle lease can be considered moderately high.
Artemis exploration objectives are to further develop knowledge of the geological controls on
mineralisation and improve confidence in the resource at Carlow Castle. Further plans are to convert
the Inferred Mineral Resources to Indicated, and the complete initial mine optimisation evaluation
and financial modelling.
A program of approximately 5,000m of drilling is planned, to drill three critical sections at Carlow East
and Carlow West.
The majority of Carlow Castle activity will be resource drilling and definition, however the recently
completed aircore drilling shows continuation of mineralization to the west. Testing of this area will
require a new heritage survey and POW approvals.
Whilst clearly structurally controlled the system at Carlow is yet to be defined, with currently two
styles being considered:
• A continuation west south west within the broad geological sequence as a dominantly shear
system, or,
• Arcing to the south around the Andover Complex intrusion as a ring and radial fracture system.
Both systems will require more detailed soil sampling on 100m x 100m spacing to identify the broad
location of mineralization in conjunction with geophysics, preferably HeliSAM to develop close
definition of the structural setting to better define the broad location of mineralisation.
Any high priority targets identified by the geochemical and geophysical surveys are planned to be
tested by aircore drilling in 2020.
Subsequent to year end a Sub-Audio Magnetics (SAM) survey was completed identifying a total of 21
targets indicating geological structures for additional gold-copper-cobalt may extend to the west of
the resource area.
WHUNDO (Cu-Zn)
In October 2018, Artemis announced a significant upgrade to its Whundo (Cu-Zn) project. The
company reported a JORC 2012 Indicated tonnage of 2.6Mt @ 1.14% Cu and 1.12% Zn for 30,4191t
contained Copper and 29,992 t contained Zinc.
Whundo is in the West Pilbara region of Western Australia, ≈50 km by road south of Karratha. Access
is via the Karratha - Tom Price Hwy and then mine access tracks. Whundo is on a mining lease (M47/7)
and is located only 7 km from Artemis’ 100% owned Radio Hill Processing Plant. Whundo was the last
ore to be processed through Radio Hill prior to the sulphide plant being placed into care and
maintenance in 2008 due to low copper prices and the GFC.
The copper/zinc deposit at Whundo and West Whundo is confined to a single stratigraphic horizon as
a series of NW to NNW plunging shoots that outcropped as a sinuous line of discontinuous goethite-
hematite gossans that could be traced for some 500m along strike. Individual ore shoots have a
restricted strike length and are commonly 1-5 m thick but reach a maximum thickness of 20 m in the
hinge zone of two small upright synclines in the axis of the major synclinal structure where they form
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the Whundo and West Whundo deposits. The ore shoots plunge about 35-40° to the NW and extend
down plunge as much as 150 m. Primary sulphides, mostly pyrrhotite, pyrite, sphalerite and
chalcopyrite are only preserved below the weathering profile (often below a depth of 30 m). No galena
or any other lead minerals have been reported from these deposits.
Modern exploration at Whundo commenced in the 1960s with Fox Resources eventually mining part
of the oxide resource in 2005-2006. During 2H calendar 2018 Artemis completed RC drilling of the
Whundo deposit, to verify older drilling and to increase the drill data available in the upper levels of
the mineralisation. Previous drilling comprised 870 drill holes including open hole percussion, RAB, RC
and diamond drilling for a total of 52,586 metres.
Artemis drilled another 64 Reverse Circulation (“RC”) drill holes and 7 diamond drill holes for an
additional 5,490 metres in 2H Calendar 2018. In addition, Artemis drilled a further 56 RC drill holes
for 3,528 m following QAQC procedures meeting JORC Code (2012) requirements, in-filling some of
the previously drilled resources, and to confirm by drilling several twin holes to verify the reliability
and accuracy of the historic drilling. The recent Artemis drilling confirmed that the historic drilling was
sufficiently reliable for an Indicated Mineral Resource estimate reported in accordance with the JORC
Code. The Whundo deposit occurs in two zones, Whundo and Whundo West, hosted within a single
stratigraphic horizon as a series of NW-NNW plunging shoots, which may be traced on surface over
500m as discontinuous goethite-hematite gossans. The mineralised shoots typically vary from 1m to
5m thick but may thicken to 20m in fold hinge zones. The shoots plunge to the NW at 35-40o with a
down plunge extent of up to 150m.
Figure 3: Whundo Mine Deposits – 7km from Radio Hill Processing Plant
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Figure 4: Whundo Cross section (492500E - looking west)
A resource table for Whundo is as outlined hereunder.
Material Type
Tonnage
(tonnes x1000)
Copper Grade
(Cu %)
Zinc Grade
(Zn %)
Copper Metal
(tonnes Cu)
Zinc Metal
(tonnes Zn)
Oxide
Fresh
Total
383
2,286
2,669
1.78
1.03
1.14
0.43
1.24
1.12
6,845
23,574
30,419
1,666
28,326
29,992
Table 2: Resource Estimate for the Whundo Cu-Zn Project - (October 2018 - INDICATED RESOURCES
0.2% Cu cut-off grade)
WEERIANNA (Au)
In December 2018 Artemis completed a new resource update for the Weeriana gold project,
announcing an Inferred, shallow resource of 975,000t @ 2.0g/t Au for 62,739 ounces of gold.
Drilling and Resource Update
Artemis undertook a reverse circulation (RC) drilling program in 2018 comprising 19 drillholes for a
total of 1,644m. Including drilling undertaken by previous companies, there are a total of 163 RC holes,
3 open-hole percussion holes and 5 diamond drill holes for 11,827m drilled at Weerianna. Drill hole
depths vary from 30 -180 m, averaging 69m. Drilling tested for extensions to previously interpreted
locations for mineralisation and to provide confirmation of previous results. In December 2018, the
Company announced an updated resource estimate incorporating both the Company’s
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recent drilling data and drilling data collected during exploration previously undertaken by other
companies.
Weerianna is located in the West Pilbara region of Western Australia, approximately 25km east of
Karratha and 5km west of Roebourne) and is adjacent to the Northwest Coastal Highway. Weerianna
is situated on mining lease M47/223 (granted until 27 December 2031). M47/223 is 100% held by
Western Metals Pty Ltd, an entity in which Artemis has an ~80% interest (via its wholly owned
subsidiary, Karratha Metals Pty Ltd). The deposit is 35km by road to the Radio Hill plant where a new
gravity gold circuit has recently been installed.
The 2018 Weerianna resource estimate was performed by Fleur Muller, Director of Geostat Services
Pty Ltd (“Geostat”), using Surpac software, utilising historic data and data from the recent RC drilling
program completed by Artemis.
A classified mineral resource for the Weerianna deposit was calculated by Geostat (27 October 2018)
to be 975,700 tonnes at 2 g/t Au for 62,700 ounces (above a cut-off of 1 g/t Au). The classified Mineral
Resource is tabulated in Table 3 as at 27 October 2018 and is reported beneath the topography surface
using a 1g/t Au cut-off. Tonnage has dropped by approximately 3% from the previous reported
estimate (refer ASX 26 June 2014) as the transitional density of 2.39 for the 2018 resource is lower
than that of 2.6 used for the 2009 resource, and this material carries the bulk of the resource tonnage.
Another contributing factor is that the recent WERC holes have generally reported lower grades.
Material Type
Volume
(cubic metres)
Tonnage1
(tonnes)
Gold Grade
(g/t Au)
Au Metal
(oz)
Oxide
Transition
Fresh
Total
52,891
265,125
69,594
387,609
126,409
649,556
199,734
975,699
2.15
2.03
1.82
2.00
8,738
42,394
11,687
62,739
Table 3: Inferred Mineral Resource Estimate – Weerianna Gold Project - (October 2018 -
above a 1.0 g/t Au cut off)
1 Note: tonnage is calculated on a wet tonnage basis.
Geology and mineralisation
Weerianna is mainly comprised of Roebourne Group of greenstones consisting of the Nickol River
Formation composed of grey- and white-banded chert, ferruginous chert, Banded Iron Formation
(BIF), fine-grained clastic sedimentary rocks, quartzite, felsic volcanic rocks, carbonate-rich sediments
and conglomerates; and the basal Ruth Well Formation consisting of ultramafic and mafic volcanic
rocks.
The poorly outcropping ultramafic chlorite-serpentinite schists at Weerianna show variable amounts
of silicification and carbonate alteration. Moderately thick to narrow cherty intercalations
representing interflow sedimentary rocks are frequently found within the ultramafic schist sequence.
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Other lithologies present include BIF and a substantial amount of mainly white quartz veins varying in
thickness between 1 cm and several metres.
Ultramafic intercalations are also present within this main chert sequence but these are very poorly
outcropping as they are often covered by thick chert scree shedding off the ridges.
The 500m wide zone of ultramafic schists and cherts lies between two relatively competent basaltic
terrains. The northern basalt is poorly outcropping but the southern forms substantial hills comprising
dark coloured basaltic rock types. These basalts are intruded by gabbroic rocks belonging to the
Andover Intrusive Complex which is the largest differentiated Intrusive Complex in the West Pilbara.
Relatively late fresh undeformed micro dolerite intrusions have been intersected in several holes.
The chert-ultramafic sequence at Weerianna represents portions of both the Ruth Well and Nickol
River Formation of the Roebourne Group of greenstones. The southern basalt forms part of the Ruth
Well Formation. The identity of the northern basalts is not certain, but these are likely to belong to
the Regal Formation.
At Weerianna, the dominant structural and lithological trend is north-east with a generally moderate
to steep south-east dip. The schistosity is parallel to the bedding and controls the quartz veining. At
places the schistosity and quartz veins are folded.
The depth of weathering indicated by the drilling varies but is generally around 50 to 60 m in
mineralised areas.
Figure 5: Weerianna local geology
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Mineralisation
Epigenetic gold (with or without copper) within the West Pilbara is almost invariably associated with
shearing and faulting in a variety of geological settings. Favourable settings include sheared units
associated with the Regal Thrust (including Weerianna), splay faulting associated with the Sholl Shear
Zone and also around the edges of several mafic/ultramafic intrusions.
At Weerianna, the gold mineralisation is associated with quartz veining within chlorite-serpentine
schists of the Roebourne Group immediately beneath the Regal Thrust that have undergone variable
degrees of silicification and carbonate alteration. Sulphides including pyrite, arsenopyrite and
chalcopyrite are sometimes present in substantial amounts. The quartz veins generally strike between
N and ENE and the main ore zone dips 70° to the south east.
Other nearby gold prospects within a similar geological setting are found at Carlow Castle, Sing Well,
Camper Day and No. Six Well. They are all close to the brecciated chert horizon along the Regal Thrust
and are either hosted by schists or are found as small discontinuous quartz veins in basalts. This “gold
belt” can be traced for more than 20 km.
RADIO HILL SHALLOWS (Ni-Cu)
In December 2018 the Company reported a new, shallow Indicated JORC resource of 1.15 Mt @ 0.52%
Ni, 0.73% Cu and 277ppm Co for 5,980 t contained Nickel, 8,395t contained Copper and 318t contained
Cobalt for the Radio Hill Project.
The Radio Hill nickel-copper underground mine is in the West Pilbara region of Western Australia, ~35
km by road south of Karratha (Figure 1). Access is via the Karratha - Tom Price Hwy sealed road and
then via the Rio Tinto dirt access road. Radio Hill is on a mining lease (M47/161, M47/337) and
contains Artemis’ 100% owned Radio Hill processing plant and the historic Radio Hill underground
mine. The underground mine ore was processed through Radio Hill prior to the plant being placed into
care and maintenance by Fox Resources (Fox) in September 2008 due to low commodity prices.
The Radio Hill Ni-Cu-Co deposit was discovered in the early 1970s. The Radio Hill deposit forms part
of a small Archaean, synorogenic-synvolcanic Ni-Cu bearing mafic intrusion containing a minor
ultramafic component near its basal contact. The massive and disseminated Ni-Cu-Co sulphides are
hosted by thin gabbroic units underlying layered ultramafic-mafic sequence. Sulphides are confined
to the feeder conduit or depressions of the basal contact. The deposit has been extensively drilled by
earlier companies, most notable being Fox Resources between 2003 and 2009 when they intensely
drilled and partly mined the deposit using both open cut and underground mining methods.
Artemis drilled the shallow mineralisation up-dip from the Fox underground workings on a regular grid
in 2H Calendar 2018, using reverse circulation (RC) drilling. Drilling by previous operators of Radio
Hill comprised 1,052 drill holes including open hole percussion, RAB, RC, underground sludge and
diamond drilling for a total of approximately 89,885 metres. Artemis drilling included a further 80
Reverse Circulation (“RC”) drill holes and 7 diamond drill holes for an additional 6,779 metres, aiming
to verify older drilling and to increase the drill data available in the upper levels of the mineralisation.
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Geology and Mineralisation
Radio Hill is a small Archaean, 2892 ± 34 Ma, synorogenic-synvolcanic Ni-Cu bearing mafic intrusion
containing a minor ultramafic component near its basal contact and is probably comagmatic with
nearby Mount Sholl and Munni Munni intrusions. It is considered to be a Voisey's Bay, Canada
analogue. The massive and disseminated Ni-Cu-Co sulphides are hosted by thin gabbroic units
underlying layered ultramafic-mafic sequence. Sulphides are confined to feeder conduit or
depressions of basal contact.
Mineralisation is patchy blebs of medium grained disseminated to matrix sulphides in the basal
peridotite to olivine pyroxenite. Pyrrhotite, with sub-ordinate pentlandite, and chalcopyrite, forms
lobate aggregates up to 12% volume of the Ultramafic host. Pyrrhotite forms layers up to 20 m thick,
8 m above the basal contact of an intrusion.
Post-intrusion deformation has tilted the deposit 25-40° to the southeast. The geometry has been
modified by northerly trending sinistral faults.
Dolerite dykes have intruded the orebody with relaxation, following deformation, into pre-existing
weakness created by faulting. Two mine-site wide dolerite dykes have truncated the orebody and act
as pillars for the underground mining.
Three types of mineralisation have been observed at the Radio Hill mine, which are summarised as
follows:
• Massive medium to very coarse grained pyrrhotite-chalcopyrite-pentlandite ore that is often
strongly brecciated and displays quartz-carbonate-chlorite veining,
• Stringer/gash
vein, disseminated
and blebby pyrrhotite-chalcopyrite-pentlandite
mineralisation associated with tremolite-actinolite-chlorite alteration and minor carbonate
veining,
• Disseminated fine grained pyrrhotite-chalcopyrite-pentlandite sulphides hosted by the
gabbro, and pyrrhotite dominant sulphides within the ultramafic immediately overlying the
gabbro.
The gabbroic portion of the layered cumulate complex hosts the mineralisation. A generalised
stratigraphic profile within the mining domain, in order of decreasing stratigraphic height, consists of
ultramafic, orebody gabbro and volcanic basement.
Mineral Resources
AM&A estimated a Mineral Resource for Radio Hill nickel-cobalt-copper deposit using the Artemis
drilling only, ignoring earlier drilling as it could not be verified as conforming to the standards required
by the JORC Code (2012) for reporting mineral resources. The Indicated Mineral Resources were
estimated within wireframes using a lower cut-off grade based on a metal factor where Cu%*0.5 +
Ni% >0.5% at Radio Hill as 1.2 Mt at 0.5% Ni, 0.7% Cu and 277 ppm Co. (Artemis Announcement 21
Dec 2018) Cobalt is a probable by-product that may be included in the Ni concentrate and so is
included in the resource estimate, see Table 4.
Historically there are substantial previously reported resources that are not reported in accordance
with the JORC Code (2012) and therefore cannot be disclosed. For example, estimates exist at depth
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and at F Zone to the north-west of this reported resource that need to be verified using suitable drilling
that complies with the current industry standards.
Drilling, sampling and assaying has been verified by Al Maynard & Associates (AM&A) as complying
with the JORC Code (2012) for reporting exploration results and Mineral Resources. AM&A used the
Artemis drilling only to model the shallow resources, ignoring the earlier drilling as it could not be
verified as conforming to the JORC Code (2012). These Indicated resources, as estimated by AM&A
are 1.15 million tonnes at 0.52% Ni, 277ppm Co and 0.73% Cu.
Cobalt is a potential by-product that may report to the nickel concentrate and so is included in the
resource estimate. Considering the spacing of the drill intersections, quality of the drilling and
sampling and the degree of understanding of the geological controls on the mineralisation, AM&A
have classified all the reported resources at Radio Hill as Indicated according to the JORC Code (2012).
Ore Type
Tonnage
(Million)
Nickel Grade
(Ni %)
Copper Grade
(Cu %)
Cobalt Grade
(Co%)
Nickel Metal
(tonnes Ni)
Copper Metal
(tonnes Cu)
Cobalt Metal
(tonnes Co)
Fresh
1.15
Total
1.15
0.52
0.52
0.73
0.0277
5980
8395
0.73
0.028
5980
8395
318
318
Table 4: AM&A Resource Estimate for the Radio Hill Ni-Cu Project - (December 2018 - Indicated
Resources @ 0.0% Cu cut-off grade)
Figure 6: Radio Hill Mine area, processing plant and resource drilling location
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RUTH WELL (Ni-Cu)
The Ruth Well nickel–copper deposits were discovered by Whim Creek Consolidated in 1971. Artemis
completed RC drilling of the Ruth Well Ni-Cu deposit on E47/3487 to verify that older drilling met the
JORC Code (2012) standards required for reporting a Mineral Resource estimate and to improve the
definition of the Mineral Resource.
Mineralisation comprises sulphides and magnetite within serpentinised extrusive peridotite of the
Ruth Well Formation. This association suggests that the deposits are of a similar type to the extrusive
Kambalda nickel deposits of the eastern Yilgarn Craton. AM&A estimated the Indicated Sulphide
Mineral Resource at Ruth Well in December 2018.
Geology and Mineralisation
Mineralisation comprises violaritised pentlandite, pyrrhotite, gersdorffite, niccolite, chalcopyrite, and
magnetite within serpentinised extrusive peridotite of the Ruth Well Formation. This association
suggests that the deposits are of a similar type to the extrusive Kambalda nickel deposits of the eastern
Yilgarn Craton. The mineralisation however probably lies within a tectonic slice of the Andover
Intrusion that has been faulted into the Ruth Well Formation of the Roebourne Group on the northern
side of the major, approximately 300 km long Sholl Shear Zone.
The Ruth Well deposit, considered to be an intrusion related Ni-Cu-Co sulphide deposit, lies within the
Ruth Well Formation of the Roebourne Group on the northern side of the Sholl Shear Zone, a major
(ca. 300 km long) shear. The Ruth Well Formation is dated 3,270-3250 Ma and consists of basalt and
spinifex textured ultramafic flows, similar to the extrusive Kambalda nickel deposits of the eastern
Yilgarn Craton.
Drilling
Artemis drilling of the Ruth Well Ni-Cu deposit was aimed to verify older drilling and to improve the
definition of the resource. Previous historic drilling in and around Ruth Well comprised 426 drill holes
including open hole percussion, RAB, RC and diamond drilling for a total of approximately 18,827
metres. Artemis has drilled another 37 RC drill holes and one diamond drill hole for an additional 2,923
metres in 2H calendar 2018.
A considerable amount of drilling was completed prior to the Artemis drilling and prior to the adoption
of the JORC 2012 code and guideline for the reporting of mineral resource estimates. It was not
possible to discover reports detailing sampling and assay QAQC procedures pertaining to the pre-
Artemis drilling. Therefore, assays from the older drilling have not been used to estimate grades.
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Mineral Resources
AM&A estimated the Indicated Sulphide Mineral Resource at Ruth Well to be 152,000t at 0.5% Cu and
0.6% Ni, in December 2018, and the estimate is reported above a 0.3% nickel cut-off in Table 5.
(Artemis Announcement 4 May 2018). Figure 7 illustrates a typical cross-section.
This resource estimate is based on 37 Reverse Circulation (RC) drill holes for 2,839m and one diamond
drill hole of 84.3m.
Tonnage (kt)
Ni %
Cu %
Ni Metal (t)
Cu Metal (t)
152
0.63
0.47
965
713
Table 5: AM&A Resource Estimate for the Ruth Well Ni-Cu Project - (December 2018 - INDICATED
RESOURCES 0.3% Ni cut-off grade)
Figure 7: Ruth Well interpretative Cross Section 486020mE
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ARMADA PROSPECT (100% ARV) – Paterson Range, WA
In July 2018, Artemis announced that it had submitted an exploration licence application for 600km2
of exploration tenure within the prospective Paterson Range region of the Pilbara. This tenement was
granted on 14 February 2019. The Armada Prospect (Figure 8) is well located to several known mineral
discoveries in the region including the large Telfer Au-Cu Mine, O’Callaghan’s Deposit (W-Cu) owned
by Newcrest Mining Limited, and the Nifty Cu Mine owned by Metals X Limited.
Figure 8: Regional Location Map – Paterson Ranges, Pilbara Region, Western Australia
Recent exploration by Greatland Gold at their Haverion Prospect (Figure 8 and Figure 9) has
highlighted the potential for a new iron oxide copper gold (IOCG) district, with recent exploration
success at Haverion representing a potentially very large mineralised system, which has gathered
interest from Rio Tinto, FMG and Newcrest.
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Figure 9: Armada Location Map with Major Deposits Located
Geology and mineralisation
The nearby Telfer deposit is located within the north-western exposure of the Palaeoproterozoic to
Neoproterozoic Paterson Orogen (formerly Paterson Province). The Paterson Orogen includes the
Palaeoproterozoic Rudall Complex, Neoproterozoic Yeneena Supergroup (Throssell Range and Lamil
Groups), and the Neoproterozoic Tarcunyah Group of the northwest Officer Basin. The Yeneena
Supergroup hosts the Telfer Mining District and consists of a 9km thick sequence of marine
sedimentary rocks that unconformably overlie the Palaeoproterozoic Rudall Complex.
The Yeneena Basin covers an area of approximately 24,000 km2 and consists of a middle to upper
Proterozoic succession of calcareous and argillaceous siltstones, sandstones and carbonate sediments
of the Yeneena Supergroup. The Yeneena Basin unconformably overlies the Pilbara Craton and the
Manganese Subgroup of the Bangemall Basin on its western boundary and the Rudall Complex Inlier
on a south-eastern boundary. The Yeneena Basin is unconformably overlain by the Karara Basin to the
southeast, by the Savory Basin to the southwest, by unconformable Phanerozoic sediments of the
Canning Basin along the northern and eastern boundaries and the Officer Basin along the south-
eastern boundary.
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The Telfer region is highlighted by the presence of north to northwest/south to southeast and
northwest to southeast trending moderate to tight fold patterns in the Lamil Group sedimentary rocks,
oriented slightly asymmetric to the southwest. These fold patterns are aligned with the Pilbara Craton
and Rudall Complex boundaries respectively. In the Telfer region, the two fold patterns overprint each
other and are intruded by discordant granites.
The interference of these fold patterns in the Lamil Group rocks formed doubly plunging domal
structures characteristic of the Telfer district. Domes vary from tight (eg. Tims Dome) to open and
rounded (eg. Telfer and 17 Mile Hill Domes).
The Paterson Province contains two suites of Neoproterozoic granitic intrusions that have a close
spatial and possibly genetic relationship to mineralisation in the Telfer district. Intrusions are
subdivided into two granite trends, the Mount Crofton to Minyari Granite trend, and the Wilki to
O'Callaghans Granite trend, based upon petrographic and major element geochemical studies. These
intrusions were emplaced episodically over a prolonged period ranging from approximately 600 to
650 million years.
Gold and copper mineralisation at Telfer consist of stratiform reefs and stockworks hosted by
sedimentary rocks of the Malu Formation of the Lamil Group. The Lamil Group comprises relatively
weakly deformed and metamorphosed Proterozoic sediment units northeast of the Camel-Tabletop
Fault. The important attributes of the Lamil Group are the presence of abundant carbonate units, and
weakly developed penetrative deformation.
Almost all the Proterozoic basement rocks within our Armada tenement have been unconformably
overlain by the Early Permian Paterson Formation and in part, again, unconformably by the Jurassic
to Cretaceous Callawa and Ankatell Formations.
In December 2018 Artemis commenced a magnetic survey on its Armada Prospect in the Paterson
Range region in the Pilbara, within a 22km radius of Haverion. The airborne survey covered the
western 47% of the Armada exploration licence application (E45/5276) and consisted of 3,311 line-
kilometres with a line spacing of 100m at a nominal flight height of 35m.
This survey provided high quality data for our geophysical consultants, Southern Geoscience to
process. The survey initially identified eight targets within a 22 km radius of the Havieron Prospect
with these targets arbitrarily ranked on magnetic signature/structural character (Figure 10).
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Figure 10: Artemis Aeromagnetic data, reduced to pole - 1st vertical derivative merged with
Greatland Gold Plc magnetic data
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Exploration
An airborne magnetic survey covering the western 47% of the Armada tenement was flown in late
November 2018. This survey consisted of 3,311 line-km with a line spacing of 100 m at a nominal flight
height of 35 m and provided high quality data for geophysical consultants, Southern Geoscience, to
process. The survey has identified eight targets within a 22 km radius of Havieron with these targets
arbitrarily ranked on magnetic signature/structural character:
• KAZON (Priority 1) - This magnetic unit is ~1km long, striking ~ENE-WSW, terminating against
the extensive ~NNW-SSE striking magnetic unit on eastern end (directly along strike from
Havieron), structural complexity striking ~ENE-WSW and ~NW-SE.
• FERENGI (Priority 1) - A magnetic unit is ~2km long, striking ~NE-SW - curvilinear in nature,
possibly along strike of KAZON structural complexity striking ~NW-SE and ~N-S (terminating
eastern end of this magnetic unit).
• BOLIAN (Priority 1) - This magnetic unit is ~1-1.5km long. Distortion/flexure in the extensive
overall ~NS striking magnetic unit (directly along strike from Havieron) from ~N-S to ~NNW-
SSE, some apparent thickening or circular zonation in the magnetic unit, structural complexity
striking ~NW-SE.
• KZINTI (Priority 1) - Based on the recent detailed magnetic survey data this magnetic unit is
~1km long. Distortion/strike change in the extensive overall ~N-S striking magnetic unit
(directly along strike from Havieron) from ~NE-SW to ~N-S, structural complexity striking
~NW-SE.
• ARCADIAN (Priority 2) - Low amplitude, broader magnetic unit perhaps at deeper bedrock
level, >2km length, striking ~NNE-SSW, structural complexity striking ~NE-SW and ~N-S.
• EDOSIAN (Priority 2) - Adjacent to the tenement boundary, based on our recent detailed
magnetic survey data this magnetic unit is >1km long although may extend W/NW off
tenement, terminating against the extensive ~NNW-SSE striking magnetic unit on eastern side
(directly along strike from Havieron), structural complexity striking ~NW-SE.
• OCAMPA (Priority 2) - Low amplitude, linear magnetic unit perhaps at deeper bedrock level,
>2km length, striking ~ENE-WSW, structural complexity striking clearly ~NE-SW and ~N-S.
• VIDIIAN (Priority 2) - Based on the recent detailed magnetic survey data and surrounding
regional magnetic data, this magnetic unit is ~3-4kms long, striking ~NW-SE, structural
complexity on the western and eastern ends. Likely a SE extension of the Greatland Gold –
Scally Wag linear/extended magnetic trend.
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Gravity Surveys
The results of the gravity survey identified three new gravity targets: Bandi, Orion and Romulan, ~4km
northeast of Haverion, shown in Figure 11. This is in additional to the previously identified eight
magnetic targets. The recent gravity and airborne magnetic surveying have identified eleven (11) new
targets within a 22 km radius of the Havieron Project. Artemis has now ranked these targets on
magnetic signature, density contrasts and structural character/complexity.
Initial detailed aeromagnetic survey results and high-level interpretation defined 8 primary targets (as
announced on the 17th January 2019), with four of these were rated a Priority 1 ranking (Kazon,
Ferengi, Bolian, Kzinti).
• Priority 1 Targets – Kazon, Ferengi, Bolian and KzintiI given more coherent/stronger magnetic
anomalism and or structural complexity/controls, proximity to the known Havieron
mineralised system.
• Priority 2 Targets – Arcadian, Edosian, Ocampo and Vidiian - given subtler magnetic signature
/ lower confidence or lack of full survey coverage
The semi-regional gravity survey and 3D inversion outcomes have defined limited density contrast
targets in several locations, however very few were directly coincident with the eight (8) aeromagnetic
primary targets. The 3D gravity inversion-isosurface results (Figure 11) with the earlier defined
aeromagnetic targets has re-ranked targets. Bandi, Orion and Romulan have been now added along a
~NW-SE trending gravity ridge situated ~4km NE of Havieron. The previous eight targets have been
refined and three new targets have been claimed.
Looking at these surveys together:
• Ocampa, Orion and Romulan are coincident/near coincident gravity and magnetic bedrock
targets, all of these also exhibit alignment along structural breaks/trends in either a ~NW-SE
or ~NE-SW sense and are believed worthy of follow-up/potential deep drill testing.
• Kazon, Ferengi, Bolian and Bandi represent higher priority/ranked aeromagnetic targets
believed worthy of follow-up/potential deep drill testing given their clearer magnetic
signatures, alignment along structural breaks/trends and proximity to the Havieron
mineralisation.
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Figure 11: Armada Project, Paterson Ranges - Aeromagnetic/Gravity Targets with 3D Inversion
isosurfaces for Gravity (0.02 to 0.06 - light blue to purple/magenta) and defined/updated target
positions for potential deep drill testing (yellow circles) - 7 total.
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Figure 12: Armada Project, Paterson Ranges - 3D Inversion Results for Aeromagnetic/Gravity –
Primary Target/Potential Deep Drill Holes Highlighted. Warm colours gravity inversion shells and
green/cooler colours magnetic inversion shells (with exception of Havieron which is an intense
magnetic high).
Future Plans
At Armada with the primary ranked geophysical targets generated and given a suitable partner, there
is an exploration pathway that may include:
• Orientation high powered EM/MT ground surveying/soundings - limited transects over
primary target zones to characterise the conductivity properties of the thick cover sequence
and also the thickness/depth to basement.
• Drilling an initial deep drill hole on deemed primary target and completing downhole
geophysical logging to define the conductivity/physical properties of the thick cover sequence
and also the thickness/depth to basement.
Artemis has also undertaken reprocessing of open file seismic data collected from the Moodoo seismic
survey line NC87-13. This data was acquired in 1987, processed and initially interpreted to determine
the hydrocarbon prospectivity of the Mesozoic sediments overlying the Proterozoic Patterson
Province geology. Since then there have been significant advances and improvements made in
processing techniques which appreciably enhance and improve resolution of stratigraphy and more
importantly structures. The information obtained is not expected to have direct exploration
application but will provide valuable additional information on structures and thickness of cover which
can be integrated with the gravity data to improve modelling of targets. This line passes directly over
the Armada tenement and approximately 2.5km southeast of Greatland Gold’s Havieron Prospect.
Artemis will be continuing with their data compilation from historic exploration records sourced from
the DMIRS WAMEX data repository and from other public documents from neighbouring projects.
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47 PATCH Au
Bulk sampling and testing were continued throughout the year at 47K Patch. Based upon handheld
GPS surveying of disturbed areas, a total of 14,500m2 has been examined and detected, virtually all of
which is within the drainage system. Interpretation of satellite imagery (Figure 13) shows this drainage
to be strongly controlled by minor faults/joints within the host stratigraphy.
The sampling has indicated gold is sourcing from multiple zones within the profile with the only zone
positively identified being on the basal contact of the sequence. It is believed that the gold has then
been concentrated into the drainage by erosional processes.
Structural
holes
Figure 13: 47K Patch Drainage, Structure and Sampling Map
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A total of 8,188g of >5mm gold nuggets have been recovered from near surface. Generally, the
nuggets recovered display a more rounded character than those derived from Purdy’s Reward,
suggesting a higher energy, more aggressive deposition environment. This general coarseness of the
nuggets recovered encourages the company to believe the source is within close proximity.
Two short diamond structural drill holes were completed during the December quarter in accessible
areas to determine the stratigraphy of the area, both holes were found to have collared directly in
Pilbara Supergroup basement. Both holes intersected anomalous gold values derived from thin <5mm
thick quartz carbonate pyrite veins within brecciated andesite.
Subsequently a Sub-Audio-Magnetic (SAM) survey was completed over the 47 Patch area defining
multiple large features within the basement which are interpreted to be significant structural
corridors. It should be noted that the Company has completed all necessary heritage and biodiversity
surveys, therefore once the mining area is defined, a Mining Proposal can be submitted to the
Department of Mines, Industry Regulation and Safety (DMIRS) to support a mining lease application.
NOVO JOINT VENTURE – WITH PALEOPLACER AND CONGLOMERATE GOLD
There has been strong progress at Purdy’s Reward by our JV partners Novo Resources during 2018/19.
Environmental surveys were extensive and included baseline surveys on flora/vegetation, vertebrate
fauna, stygofauna, hydrogeology, soil assessments, mine waste characterisation, groundwater
monitoring, studies of the geochemical characterisation of the lithological units and Aboriginal
heritage surveys with the Ngarluma Aboriginal Corporation. These background studies will allow for
further exploration, including drilling, trenching and bulk sampling – followed by applications for
mining. Novo has generated a Mineralisation Report covering exploration results on the Purdy’s
Reward (and their adjacent Comet Well) exploration lease. The Mineralisation Report forms the basis
for conversion of an exploration license (E47/1745 at Purdy’s Reward) to a future mining lease.
During the December quarter, Novo used detailed geological mapping to assess geological scrapes to
determine effective bulk sampling sites. Six bulk samples, each ≈5 tonnes were taken and four sent to
the SGS laboratories for assay. Some results are pending.
In addition, seven diamond drillholes (Figure 14) for a total of 360.98m were drilled between August-
October 2018. The core is being logged for use in a ‘mine sequence’ for Purdy’s Reward. Holes
18PDD001, 18PDD002 and 18PDD005 intersected approximately 12m of conglomerate and sands,
while 18PDD003 intersected the conglomerate unit much deeper, believed to be due to a steep
dipping fault. Unfortunately, 18PDD004, 18PDD006, and 18PDD007 did not intersect conglomerate.
Novo are also re-logging historical diamond drillholes which will be incorporated into a MicroMine 3D
Model that is being developed. Furthermore, Novo are using CoreScan© technology to provide
geochemical and geophysical results.
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Figure 14: Bulk sampling and drill hole location at Purdy’s Reward
BALMORAL
The Blacktop diamond project is approximately 85 km SSW of Karratha and 60 km south of the Radio
Hill plant. The diamond potential at Balmoral was previously assessed by a DeBeers/Tawana
Resources NL JV during 2006/07. As well as being prospective for diamonds the tenements are also
prospective for cobalt, base metals and gold.
Deep Drilling Program
Artemis completed its deep hole drilling program in the West Pilbara in August 2018. Hole ASD-1 was
terminated at a depth of 1,348.5 metres while ASD-2 was terminated at a depth of 790.5 metres. The
CSIRO completed Minalyser and Hylogger scans of both Balmoral deep drillholes.
ASD-01 was co-funded via $120,000 of funding from the State Government’s Exploration Incentive
Scheme (EIS). Artemis thanks GSWA and DMIRS for their support. All drill core has been donated to
the GSWA Core Library. The CSIRO has completed with characterisation sampling of the lithological
units within the stratigraphy.
Although the drilling disappointingly did not penetrate the full thickness of the Fortescue Group to
test the prospective Mt Roe Basalt basal contact, drilling did show the level of complexity of the
geology and topography of the base of the Hamersley Basin sediments and top of the Pilbara
Supergroup basement.
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With coarse nuggety gold being recovered from this Mt Roe Basalt basal contact zone at Purdy’s
Reward/Comet Well in the West Pilbara, the Bellary Dome near Paraburdoo and Loudens Patch south
of Whim Creek indicates an area approximately 450km wide by >250km east-west where this style of
gold occurrence may have been recognised rather recently, despite >100 years of prospecting and
exploration.
The significance of this and distribution of basin margins and basal topography show that much more
research of this geological position is imperative.
Geology and Mineralisation
The project area is dominated by the Fortescue Group, a thick sequence of Archaean mafic and felsic
volcanic piles and associated sedimentary rocks that unconformably overly the Archaean Pilbara
Craton granite-greenstones. The geology within the tenements is dominated by the Tumbiana overlain
by the Maddina Formations.
The Tumbiana Formation conformably overlies the Kylena Formation and contains mainly coastal and
near-shore facies sedimentary rocks ranging from stromatolitic and clastic carbonates, argillite,
sandstone, primary and reworked tuff and minor conglomerate; with a minor mafic lava component.
The Maddina Formation comprises mainly basalt flows, pillow lavas, fine- to coarse-grained and mafic
volcanic rocks. Non-volcanic sedimentary rocks include stromatolitic carbonate, quartz sandstone,
conglomerate and argillite.
Diamond bearing Kimberlites have intruded the basement series. To date no Kimberlite outcrops have
been identified within the Artemis tenements. All the diamonds found at Blacktop have been in
alluvial sediments along creeks.
Deposit Exploration
Regional sampling at Blacktop in 2006 by De Beers consisted of stream geochemistry and BLEG (Bulk
Leach Extractable Gold) with Fox Resources conducting validation BLEG and stream sampling along
with numerous rock chip samples. All samples were analysed for numerous elements including cobalt,
copper, silver nickel and gold.
Many of these rock chip samples were in and around the numerous VTEM anomalies identified by a
regional scale survey completed in September 2007. Most of the anomalies were ascribed to pyritic
sediments. Artemis believes the inferred presence of Kimberlites indicate deep crustal structures that
could be conduits for other styles of mineralisation.
A 6,000 t bulk sample from Blacktop consisting of a composite of 10 separate samples of kimberlite of
variable country rock dilution was tested by De Beers for diamond grade and quality. The samples
produced 2,320 stones totalling 163.89 carats with an average stone size of 0.0706 carats. The
reported grades varied between 0.08-8.63 carats per hundred tons (cpht) and possibly reflected to
some extent the country rock dilution and also the variable grade along strike. The parcel of stones
was valued at US$52.56/ct as a reflection of the small stone size rather than the quality of the
diamonds, which were generally clear and exhibited variable resorption from very low to dominant.
Commenting on the diamonds, Tawana reported that the valuers considered that the parcel was
unusual as it contained no boart (low quality industrial) diamonds.
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MUNNI MUNNI
Munni Munni is approximately 35 km by road SSW of Karratha and less than 10 km by road south of
the Radio Hill plant. (Artemis Announcement 20 Aug 2018). Munni Munni is prospective for platinum,
palladium, gold and rhodium across four mining leases.
The Platinum Group Elements (“PGE”) potential was first recognised by Dr. John Ferguson in the
1980's, and accordingly the mineralised horizon is referred to as the "Ferguson Reef". Exploration
activities since the initial discovery have identified a significant PGE and gold resource. The entire
known resource is contained within four granted mining leases and all possible extensions of the
Ferguson Reef are within Artemis exploration tenements.
Geology and Mineralisation
The Munni Munni deposit is located within the Archaean Pilbara Craton, hosted by the Munni Munni
Igneous Complex (MMIC). The MMIC is a layered mafic-ultramafic package of predominantly gabbroic
rock. The PGE mineralisation is located within the Ferguson Reef at the contact between the lower
ultramafic rocks and the upper gabbroic rocks. The main section of the Ferguson Reef averages 2.6 m
thick with a strike length of approximately 2 km extending from surface dipping approximately 45° to
more than 1 km deep.
The mineralisation has two ore domains comprising 'high sulphide' (Cu >1,000 ppm) and 'Iow sulphide'
(Cu <1,000 ppm). The dominant sulphides are chalcopyrite and pyrrhotite with trace pentlandite,
typically comprising 1% to 2% of the rock. Chromite does not occur as an accessory mineral in the reef
making any concentrates produced more valuable than traditional higher chromium concentrates.
There is potential for extensions of the Ferguson Reef along the eastern side of the Munni Munni
intrusion where it is untested by drilling. The southern portion of the MMIC is unconformably overlain
by flat-lying sediments and volcanics of the Mount Bruce Supergroup and more particularly the
Fortescue Group.
Figure 15: Cross section through Munni Munni Intrusion showing Ferguson Reef
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MT CLEMENT
The Mt Clement tenements are 30 km southwest of the Northern Star Resources Ltd (ASX: NST)
Paulsens gold mine and plant. Northern Star has entered into a JV on this project with Artemis
maintaining an 80% interest as project operators, (Artemis Announcement 18 May 2017).
Geology and mineralisation
The main prospect at Mount Clement lies within a lens of oxidized and silicified siliciclastic and
chemical rocks which are generally conformably confined within the Ashburton Formation, see Figure
16 and Figure 17. The lower part of the lens (LMZ) contains anomalous levels of silver, arsenic and
gold. The upper part of the lens (UBZ) is extensively silicified and ferruginised and characterised by
anomalous manganese.
The main prospect is interpreted by Davy et al (1991) as a sediment-hosted, deep-marine, hot-spring
deposit. The Eastern prospect at Mount Clement is a sulphide bearing fracture filling formed as a result
of dextral wrenching after the deposition of the Ashburton Formation. It is characterised by
anomalous levels of silver, arsenic and gold which may have been derived, in part by leaching of wall
rocks.
Metal-bearing fluids were probably released during burial metamorphism of the supracrustal
sequence, and subsequently transported along major fractures. These fractures were either formed,
or reactivated, during continental crustal collision between the Pilbara and Yilgarn Cratons.
Mineral Resources
Artemis commissioned Apex Geoscience (Apex) in July 2011 to complete a mineral resource estimate
for Mt Clement. This resource estimate, was reported in accordance with the 2004 JORC Code and
utilised all existing data including a total of 90 RC and diamond drill holes.
Apex estimated an Inferred Resource at a lower cut-off grade of 0.5 g/t Au of approximately 1.1 Mt @
1.77 g/t Au and 17.0 g/t Ag for a contained 64,400 oz Au and 618,500 oz Ag. The mineralisation remains
open at depth and along strike, indicating strong potential to substantially increase these resources
with further drilling. Artemis plan further work at Mt Clement including upgrading of the resource
estimate so that it can be reported in accordance with the 2012 JORC Code.
Nagrom’s LeachWELL bottle roll tests in February 2017 with gold recoveries at over 97% confirms that
the Mt Clement project mineralisation is amenable to conventional cyanide leaching. A scoping study,
managed and co-funded by Blackrock Metals Pty Ltd, will determine the feasibility of open pit mining
and heap leaching of the gold
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Figure 16: Mt Clement local geology
Figure 17: Significant drilling results from Artemis drilling 2010/11 at Mt Clement
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NICKOL RIVER
The historical gold production at Nickol River comes from four main areas: Tozer’s, Boiler, Nickol South
and Lydia. These prospects are located 14 km east of Karratha and just north of the Northwest Coastal
Highway, Figure 18. Artemis has entered into a partnership with D & K Corps Investments Pty Ltd for
access to some of their mining leases.
Mining
The Company has identified significant areas at Nickol River that are highly weathered and free-dig
from surface to depths of between 2 - 6 m that would potentially be amenable to bulk scale mining
and processing using a modern gravity plant for gold recoveries.
Also, as previously reported on 25 January 2017, previous trial mining operations at Nickol River
reported by Sir Samuel Mines NL listing Prospectus, noted that in 1984 a 10 tonne per hour plant
tested 600 t of surface material yielding a recovered grade of 0.33 g/t Au and in 1985 a bigger 40 t/hr
pilot plant processed 42,500 t of surface material yielding a recovered grade of 0.15 g/t Au.
There are currently no Mineral Resources reported in accordance with the JORC Code at Nickol River
as the previous work outlined in the 1980’s in the Sir Samuel Mines NL Prospectus was published prior
to the existence of the JORC Code.
Figure 18: Nickol River tenements
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Exploration
Prior to Artemis historic work on the Nickol River tenements included 58 RC Drill holes, mapping and
soil sampling. In 2012 Artemis carried out auger soil sampling in the western portion of P47/1518
(now M47/1527) as well as a limited rock chip sampling program to confirm the earlier results. The
auger sampling identified broad gold anomalies, with a maximum assay result of 6.9 g/ t Au. The rock
chip sampling also returned anomalous Au with results of up to 14.8 g/t Au from the Samantha Lode.
The work completed by Artemis confirmed the tenor of gold mineralisation as identified in the historic
exploration activities.
The gold geochemistry from the 2018 regional sampling program discussed earlier in this section is
strong over the Nickol River alluvial area, Figure 18. This is in part due to the extensive disturbance by
mining over the area, however the geochemistry generally suggests the known shear zones hosting
primary mineralisation as at the Samantha, Tozers and Boiler zones may be replicated elsewhere.
Artemis has taken bulk samples from a series of trenches to better define gold mineralisation and
guide further drill hole planning.
MOUNT OSCAR
Significant gold bearing sedimentary sequences have recently been identified by Artemis geologists
on the Mt Oscar tenement that are considered to be part of the Archean Fortescue Group and hence
can be correlated with the Purdy’s Reward sequence of mafic sediments and polymictic
conglomerates located 21 km to the south-west. This is contrary to the governmental mapping by
DMIRS on the Roebourne 1:100,000 map sheet which interprets the sequence to be at the base of the
older Whim Creek Group and accordingly part of the regional Pilbara Supergroup, see Figure 19
(Artemis Announcement 14 Nov 2017).
Geology and Mineralisation
The Mt Oscar sedimentary sequences extend over an east-west strike length of 14 km (Figure 19) with
true widths up to 75m thick in outcrops at the Churnside Prospect. Artemis geologists have collected
gold bearing samples at both the eastern and western ends of these conglomerates. The
conglomerates at Mt OscarWits are more quartz rich and appear ‘cleaner’ than the Purdy’s Reward
more mafic rich conglomerates with the matrix at Mt OscarWits primarily quartz sand and the
conglomerate clasts composed of quartz and chert pebbles and boulders.
The sedimentary sequences at Mt OscarWits appear to have been folded and faulted creating
duplication with four units mapped in several places over the significant strike length.
Significant gold bearing sedimentary sequences have recently been identified by Artemis geologists
that are considered to be part of the Archean Fortescue Group and hence can be correlated with the
Purdy’s Reward sequence of mafic sediments and polymictic conglomerates located 21 km to the
south-west.
The Mt OscarWits sedimentary sequences extend over an east-west strike length of 14 km with true
widths up to 75m thick in outcrops at the Churnside Prospect. The sedimentary sequences at Mt Oscar
appear to have been folded and faulted creating duplication with four units mapped in several places
over the significant strike length.
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Recent geological mapping, rock chip and stream sediment sampling at Mt Oscar identified extensive
sequences of principally quartz and chert clast conglomerates with anomalous gold mineralisation.
The discovery of these watermelon seed nuggets using metal detectors adds to the further
prospectivity of Mt Oscar conglomerate gold potential.
Exploration
A total of 8.3 gm of “watermelon seed” nuggets were found by Artemis by using a metal detector at
the “Fairmont Prospect” along the Mt Oscar conglomerate trend.
Recent geological mapping, rock chip and stream sediment sampling at Mt Oscar identified extensive
sequences of principally quartz and chert clast conglomerates with anomalous gold mineralisation
confirmed over a 14 km strike length. The discovery of these watermelon seed nuggets adds to the
further prospectivity of Mt Oscar conglomerate gold potential.
Figure 19: Artemis reconnaissance sampling and mapped conglomerates at Mt OscarWits.
The Fairmont prospect has returned the highest gold assay in rock chips of 21.5 g/t Au from a
ferruginous pebble conglomerate. A conglomerate unit at White Quartz Hill, 12 km east of Fairmont,
returned a peak gold assay in rock chips of 6.38 g/t Au. Another rock chip sample at the Churnside
Prospect, 4 km east of Fairmont, returned a peak assay from a rock chip of 10.93 g/t Au. The Churnside
sample was recovered from a coarse-grained clast supported cobble conglomerate and likely
represents a primary placer style form of mineralisation in a high-energy environment with a high
coarse gold component.
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OTHER GOLD PROJECTS
Regional Exploration
Besides exploring for conglomerate hosted gold at Purdy’s Reward under the Novo JV, Artemis is
exploring for other styles of gold in its other West Pilbara tenements. The West Pilbara has a long
history of small-scale gold production predominantly from quartz vein related systems.
Artemis noted the presence of shear zone hosted gold at Nickol River feeding the alluvial/eluvial
systems in the area and the axial plane quartz-gold-arsenopyrite mineralisation at Weerianna along
with the multiple other known gold sources within the greenstones. After consideration of this
information, geochemical exploration was initiated in the Carlow Castle area where Artemis has
confirmed with drilling a Au-Cu-Co JORC Code (2012) Resource.
Based on the Carlow Castle success, sampling was subsequently expanded to cover virtually all
Artemis’ tenure, Figure 20 (Artemis Announcement 5 Nov 2018).
Artemis took soil samples 100 m apart along 400 m spaced lines aligned north-south. A total of 12,247
samples have been collected and analysed for a suite of elements.
All data presented in Figure 21 below has been domained based on the GSWA 1:100,000 geological
mapping, then ratioed using the 25th percentiles of the data. Data was contoured using Surfer
software using Inverse distance squared (ID2) and the search ellipse long axis orientated to 80° east of
north, contouring/plotting colours are then based on the 99th, 97.5th, 95th, 90th and 75th percentiles
of the ratioed values.
The specific purpose of this processing was to highlight the anomalous samples and to minimise the
lithological effects/contents of the differing underlying geological sequences.
All the main areas identified in the geochemistry show multi-element responses as summarized
below:
•
•
•
•
•
•
Carlow Castle - Au, Ag, Co, Cu, Ni, Hg, Mo, Se, Te, Pd, Zn
Monarch - Au, Ag, As, Mo, Ni, Sb, Se, Te, W
Conqueror - Au, Ag, Hg, Mo, Sb, W
Pipeline - Au, Ag, As, Co, Mo, Se, Tl
Silica Hills - Au, Ag, Bi, Mo, Sb
Nickol River - Au, Ag, Hg, Mo, Se, Tl
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Figure 20: Soil sampling location and areas with Au related targets identified
Figure 21: Targets identified or highlighted by regional gold geochemistry
The main non-conglomerate gold exploration targets in Artemis’ West Pilbara tenements are at
Monarch and Conqueror, identified as significant soil geochemical gold anomalies during a regional
geochemical survey carried out by Artemis in 2018. Figure 20 illustrates the location of the Monarch
and Conqueror prospects.
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Figure 22: Location of Monarch and Conqueror prospects, relative to the Radio Hill plant
MONARCH
Monarch is an entirely new area of gold in soil anomalism (to 68 ppb Au) and mineralisation. The soil
geochemistry shows a continuous anomaly >95th percentile over 4.5 km with an additional 1.7 km to
the west after a discontinuity, Figure 22.
Geological mapping shows the area to be within a wide zone of sheared talcose and cherty schists
with multiple strike parallel quartz veins, Figure 22. Rock chip sampling returned values up to 11.4 g/t
Au. A discontinuous traverse of 20 rock chip samples over a width of 250m showed 9 samples with
responses >1g/t Au to a maximum of 9.89 g/t Au.
Most samples were from quartz veins, but three samples were within gossanous chert, cherty gossan
or chert with gossanous lenses which contained 1.41 g/t, 1.32 g/t and 2.41 g/t Au respectively. Of note
is that many samples show a silver to gold ratio >10:1 possibly indicative of sulphide mineralisation.
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Figure 23: Monarch Central Target with gold in soil and rock chip values over 4.5km strike
The Monarch target is just less than 7km long with rock chip sample grades up to 11 g/t Au. The soil
geochemistry suggests the system could be significantly longer. Unfortunately, some 2.5 km of the
strike length of the defined shear zone is within tenements pending approval by the DMIRS and are
not yet accessible for drilling.
Initial aircore drilling will be used to precisely locate mineralization at depth to be followed by RC
drilling to delimit any resources.
Statutory Program of Works (POW) approval for the proposed aircore drilling has been granted but a
heritage survey is required before proceeding. Figure 24 illustrates the Monarch exploration targets.
Figure 24: Monarch exploration targets
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CONQUEROR
Conqueror is located to the north of the Ruth Well Ni-Cu mineralisation. A discontinuous gold in soil
anomaly to a maximum 146ppb Au is traceable for 14 km, apparently relating to a prominent chert
ridge and outcrop. To date geological mapping and sampling has had limited success with only one
significant sample of silicified laminated sediment containing 5.04g/t Au.
Historic Rotary Air blast (RAB) drilling 5.5km to the east of the main anomalous area along the siliceous
laminated chert horizon returned one sample of 0.5 g/t Au over 1 m.
Figure 25: Conqueror Central target with gold in soil values and significant rock chips
Soil sampling and rock chip sampling have defined a shear zone system containing anomalous gold up
to 5 g/t Au at Conqueror. Artemis geologists interpret that this system could be over 40 km long.
An extensive aircore drilling program is planned in the central area of Ruth Well where geochemical
anomalism appears strongest with coincident anomalous Ag and Cu soil responses. This drilling will
be followed by RC drilling to test any mineralisation located by the aircore drilling.
POW approval for the proposed aircore drilling has been granted but a heritage survey is required
before proceeding. Figure 26 illustrates the Conqueror exploration targets.
Figure 26: Conqueror exploration targets
PIPELINE
The Pipeline prospect is located to the south east of Radio Hill. Soil geochemistry and metal detected
nuggets with a Minelab GPZ 7000 identified two parallel trends approximately 1km apart coincident
with aeromagnetic trends. The aeromagnetic trends are interpreted to represent shear zones along
the southern contact of the small Yannery Granite intrusion.
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Outcrop in the area is subdued with metal detected nuggets being small angular fragments near quartz
vein outcrops or scree, and are interpreted to represent the shear zones.
RADIO HILL OPERATIONS, CONSTRUCTION AND REFURBISHMENT
Figure 27: Radio Hill Operations
The Radio Hill processing plant is 35 km from Karratha in the Pilbara region of Western Australia. This
base metal flotation concentrator and associated infrastructure was built in 1988. Previous operators
have invested more than $60m between 1988 and 2002 (Fox Resources 2004 Annual Report). In
September 2002, Fox Resources (Fox) acquired the process plant and underground mine and
associated mining leases.
The 425,000t flotation concentrator produced copper and nickel concentrates from the Whundo
Copper Mine and the Radio Hill underground mine for export via Dampier Port. In mid-2008 Fox
placed Radio Hill on care and maintenance due to weakening copper price which saw US$ copper
prices fall to circa US$3,000 by the end of 2008. In March 2017, Artemis acquired the Radio Hill plant,
associated infrastructure and tenements from Fox for approximately $4M in cash and Artemis shares
(announced 2 March 2017).
In November 2017, Artemis appointed Process 26 Engineers and Constructors (“Process 26”) to
refurbish and upgrade the existing Radio Hill crushing and grinding circuits (announced 27 Nov 2017).
Construction activities commenced on 20 August 2018 to upgrade the facility with the installation of
additional crushing equipment, tailings dewatering facilities and a gold room. Gekko Systems
(“Gekko”) were mobilised to install and commission the gravity gold extraction circuit.
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Process 26 and Gekko completed the following:
▪
▪
▪
▪
▪
▪
▪
Crushing circuit refurbishment program complete - including ROM wall replacement,
installation of refurbished primary and secondary crushers, conveyor belts, and vibrating
screen;
Milling and classification area – steelwork, cyclone cluster and DSM screen installation near
completion;
Gekko gold circuit complete – including installation of Inline Pressure Jig, Falcon, Inline Spinner
and associated gold room equipment;
Gold room building – structure, cladding and fit out complete with Gemini Table and Barring
Furnace placed into position;
All slurry pumps have been overhauled;
Thickener and flocculant plant - foundations and ground slabs complete with thickener lifted
into place; and
High voltage – HV cables installed and terminated.
The new flowsheet for Radio Hill is below (28).
Figure 28: Updated Stage 1 Flowsheet for Radio Hill including Gold Circuit
The final approvals needed to operate Radio Hill with TSF3 were received in June 2019. The mechanical
refurbishment and installation of key processing equipment at Radio Hill (29) remains at ≈ 80%
complete with outstanding electrical and instrumentation, minor structural repairs and plant piping
to be completed once Artemis has defined:
• 2-3 years of plant feed from its extensive gold and base metal asset base; or
• equivalent tonnages of gold ore from third parties or joint venture partners.
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Either of these options could support the final investment decision to complete plant refurbishment,
but we are pleased to now have all regulatory approvals in place from the DWER and DMIRS.
CORPORATE
Figure 29: Radio Hill plant
▪ Munni Munni JV
During the period, Artemis completed its 70% earn-in on the Munni Munni Project with Platina
Resources Ltd (Platina). The Munni Munni Project, Australia’s largest PGE deposit, is contiguous to
Artemis tenements on all sides and is located approximately 20km from the company’s 100% owned
Radio Hill Operations.
▪ Toll Treating / Campaign Processing at Radio Hill
The Radio Hill processing plant now has gravity gold processing capability and as such, bulk sampling
or campaign processing could be considered from both Artemis-held and third-party tenure. The
alliance with Pacton Gold Inc. (TSX.V:PAC, refer ASX announcement 18 October 2018) provides
Artemis with a strategic relationship with another regional explorer who could provide ore to be
processed at Radio Hill from their portfolio of conglomerate and shear hosted gold targets.
▪ Artemis begins trading on U.S. OTCQB Venture Exchange
In parallel to the Frankfurt listing, Artemis commenced trading on the US OTCQB Venture Market
under the ARTTF ticker. This exchange offers early stage and developing international companies the
benefits of being publicly traded in the USA with lower cost and complexity than other North American
exchanges.
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▪ Board and management changes
On 5 February 2019, His Highness Sheikh Maktoum Hasher al Maktoum was appointed Non-Executive
Chairman. On the same day Mr David Lenigas and Mr Alex Duncan-Kemp resigned as directors and Mr
Daniel Smith was appointed Non-Executive Director. CEO Wayne Bramwell resigned in mid-2019 and
Executive Director Ed Mead has taken over as interim-CEO.
▪ Share Purchase Plan
On 31 July 2019, a total of 87,338,535 shares were issued under a Share Purchase Plan at a price of
$0.031 per share, raising $2,707,500 before costs.
▪ Mine Development
Artemis’ long-term strategy is to advance their mineral resources to support the transformation of
their 100% owned Radio Hill plant into a long-term producer of gold and base metal concentrates.
Artemis’ first step in achieving this goal is to advance the Carlow Castle project through final resource
definition into a pre-feasibility study with mine planning, then develop the project into a fully
producing mine as soon as possible.
At Carlow Castle:
• Approximately 5,000 m of drilling is required to increase and re-classify the resources (≈36
holes ranging in depth from 100m-280m)
o Carlow East – drilling three sections of Carlow East to confirm interpretation.
Currently drilling is interpreted as sub-parallel to dip in in the wide, high grade zones
in Carlow East. Phase 1 will yield three well drilled sections and provide each with 4
to 6 holes spaced at 20-25m metre intervals downdip – improving confidence in the
interpreted grade and structure in these important zones.
o Carlow West – drilling three infill sections on higher grade zones in Carlow West. This
will provide confidence in the continuity of grade and structure in this important zone.
o East of Quod Est – drilling to test high priority structural positions inferred from new
data to the east of Quod Est. These holes aim to improve structural understanding
and provide information to improve targeting models for the Stage 2 DDH
programme.
• Detailed metallurgical program to optimise preliminary flowsheet and process design;
• Target completion of a pre-feasibility study in Q1 2020.
Secondary Focus;
• Work with partners and other regional explorers to aggregate potential toll-treating gold ore
for Radio Hill;
• Advance Artemis exploration on high value vein and shear hosted gold targets within trucking
distance to Radio Hill such as Monarch and Conqueror; and
• Maintain the Radio Hill plant until at least three years of plant feed is defined and available to
support plant start up.
Artemis will be reviewing all non-core assets for divestment or JV. Artemis plan to seek a well-
funded JV partner to advance the Armada Prospect in the Paterson Ranges.
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Annual Mineral Resources Statement 30 June 2019
In accordance with Listing Rule 5.23.2, Artemis confirms that it is not aware of any new information or data that materially affects the
information included in the Annual Mineral Resources Statement above, and that in the case of mineral resources that all material assumptions
and technical parameters underpinning the estimates in the Annual Mineral Resources Statement continue to apply and have not materially
changed.
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Annual Mineral Resources Statement 30 June 2019
Material Changes and Resource Statement Comparison
The Company during this year has continued to review and report its mineral resources at least annually and provide an
Annual Mineral Resources Statement. The date of reporting is 30 June each year, to coincide with the Company’s end of
financial year balance date. If there are any material changes to its mineral resources over the course of the year, the
Company is required to promptly report these changes. In completing the annual review for the year ended 30 June 2019,
the historical resource factors for Projects were reviewed and found to be relevant and current.
Governance Arrangements and Internal Controls
Artemis has ensured that the mineral resources quoted are subject to good governance arrangements and internal controls.
The mineral resources reported have been generated by independent external consultants who are experienced in best
practices in modelling and estimation methods. The consultants have also undertaken reviews of the quality and suitability
of the underlying information used to generate the resource estimation. In addition, Artemis’ management carries out regular
reviews of internal processes and external contractors that have been engaged by the Company.
The Weerianna, Carlow Castle, Radio Hill, Ruth Well and Whundo mineral resources were compiled in accordance with the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code) 2012 Edition. The
Mt Clement, Ayshia-Whundo and Mt Oscar mineral resources were compiled in accordance with the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code) 2004 Edition.
Competent Person Statements
The information in this statement that relates to Exploration Results and Exploration Targets is based on information
compiled or reviewed by Allan Younger, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Younger
is a consultant to the Company. Mr Younger has sufficient experience that is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the
2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Younger consents to the inclusion in this statement of the matters based on his information in the form and context in which
it appears.
ASX Announcement, Artemis Resources – 19 December 2018
2018 estimate (Geostat Services). Cut-off grade 1.0% Au. Estimated according to JORC Code (2012).
ASX Announcement, Artemis Resources – 26 July 2011
2011 estimate (Apex Geoscience). Cut-off grade 0.5% Au. Estimated according to JORC Code (2004).
ASX Announcement, Artemis Resources – 6 March 2019
2019 estimate (AM&A). Cut-off grade 0.3% Cu. Estimated according to JORC Code (2012).
ASX Announcement, Artemis Resources – 21 December 2018
2018 estimate (AM&A). Cut-off grade 0.0% Cu. Estimated according to JORC Code (2012).
ASX Announcement, Artemis Resources – 7 May 2019
2019 estimate (AM&A). Cut-off grade 0.3% Ni. Estimated according to JORC Code (2012).
ASX Announcement, Artemis Resources – 26 October 2018
2018 estimate (AM&A). Cut-off grade 0.2% Cu. Estimated according to JORC Code (2012).
ASX Announcement, Fox Resources – 3 October 2007
2006 estimate (RSG Global) Cut-off grade 0.4% Zn. Estimated according to JORC Code (2004).
Weerianna:
•
•
Mt Clement:
•
•
Carlow Castle:
•
•
Radio Hill:
•
•
Ruth Well:
•
•
Whundo:
•
•
Ayshia-Whundo:
•
•
Mt Oscar:
•
•
ASX Announcement, Fox Resources – 5 September 2013
2009 estimate (Golder Associates) Inferred Mineral Resource at Fe cut-off grade of 20%. Estimated according to
JORC Code (2004).
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Annual Mineral Resources Statement 30 June 2019
1 – 50% Artemis – Joint Venture with Novo Resources
2 – 70% Artemis – Karratha Gold Joint Venture
3 – 80% Artemis
4 – 70% Artemis
5 – 34% Artemis
6 – 70% Artemis – Joint Venture with Platina Resources
7 – 80% Artemis – Joint Venture with Northern Star Resources
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Corporate Governance Statement
Artemis, through its Board and executives, recognises the need to establish and maintain corporate
governance policies and practices that reflect the requirements of the market regulators and
participants, and the expectations of members and others who deal with Artemis. These policies and
practices remain under constant review as the corporate governance environment and good practices
evolve,
ASX Corporate Governance Principles and Recommendations
The third edition of ASX Corporate Governance Council Principles and Recommendations (the
“Principles”) sets out recommended corporate governance practices for entities listed on the ASX.
The Company has issued a Corporate Governance Statement which discloses the Company’s corporate
governance practices and the extent to which the Company has followed the recommendations set
out in the Principles. The Corporate Governance Statement was approved by the Board on 27
September 2019 and is available on the Company’s website:
https://artemisresources.com.au/company/corporate-governance
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Directors’ Report
The Directors of Artemis Resources Limited submit herewith the financial report of Artemis Resources
Limited (“Artemis” or “Company”) and its subsidiaries (referred to hereafter as the “Group”) for the
year ended 30 June 2019. In order to comply with the provisions of the Corporations Act 2001, the
directors report as follows:
The names of the Directors who held office during or since the end of the year and until the date of
this report are as follow:
H.H. Sheikh Maktoum Hasher
al Maktoum
Edward Mead
Daniel Smith
David Lenigas
Alex Duncan-Kemp
Current Directors
Non-Executive Chairman (appointed 5 February 2019)
Previously Non-Executive Director
Executive Director
Non-Executive Director (appointed 5 February 2019)
Executive Chairman (resigned 5 February 2019)
Executive Director (resigned 5 February 2019)
H.H. SHEIKH
MAKTOUM HASHER AL
MAKTOUM
Non-Executive Chairman
H.H. Sheikh Maktoum Hasher al Maktoum is a member of Dubai’s ruling
family. He is the President of Al Fajer Group and Chairman of Dubai
International Holdings, Chairman of Manannan Hydro Limited and is a
Non-Executive board member of the Commercial Bank of Dubai.
MR EDWARD MEAD
Executive Director
H.H. Sheikh Maktoum Hasher al Maktoum has a BSc. Business
Administration and Finance from Suffolk University in Boston, USA and
was awarded CEO of the Year by CEO Middle East in 2009 and was
awarded Young Global Leader by the World Economic Forum in 2007.
H.H. Sheikh Maktoum Hasher al Maktoum was appointed as a director
on 26 October 2017 and Non-Executive Chairman on 5 February 2019.
There were no other directorships held by H.H. Sheikh Maktoum Hasher
al Maktoum in the last 3 years.
Interest in Securities as at 27 September 2019:
Fully paid ordinary shares: 10,150,000
Mr Edward Mead is a geologist with over 25 years’ experience in gold
and base metals exploration, mine development and mine production.
Mr Mead has also worked in the oil and gas industry on offshore drilling
platforms. Other commodities that he has significant experience with
are iron ore, magnetite, coal, manganese, lithium, potash and uranium.
Mr Mead has a Bachelor of Science (Geology) from Canterbury
University in New Zealand and is a member of the Australian Institute
of Mining and Metallurgy.
Mr Mead is a director of White Cliff Minerals Limited. Mr Mead was
appointed as a Director on 31 December 2014.
Interest in Securities as at 27 September 2019:
Fully paid ordinary shares: 2,483,870
Performance rights: 2,000,000
Unlisted options: 9,000,000
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Directors’ Report
MR DANIEL SMITH
Non-Executive Director
Company Secretary
MR GUY ROBERTSON
Mr Daniel Smith holds a Bachelor of Arts, is a member of the Australian
Institute of Company Directors and the Governance Institute of
Australia and has a strong background in finance having previously
worked in the broking industry. Mr Daniel Smith has 10 years’ primary
and secondary capital markets expertise and has advised on and been
involved in a number of IPOs, RTOs and capital raisings on the ASX and
NSX.
Mr Smith is a non-executive chairman of White Cliff Minerals Limited
and Alien Metals Limited, non-executive director and company
secretary of Europa Limited, Hipo Resources Limited and Lachlan Star
Limited, and is company secretary of Taruga Minerals Limited and
Vonex Limited.
Mr Smith was appointed as a non-executive director on 5 February
2019.
Interest in Securities as at 27 September 2019:
Unlisted options: 9,000,000
Mr Guy Robertson was appointed Company Secretary on 12 November
2009.
Mr Robertson has over 30 years’ experience as a Director, CFO and
Company Secretary of both public (ASX- listed) and private companies
in both Australia and Hong Kong. He has had significant experience in
due diligence, acquisitions, IPOs and corporate management. Mr
Robertson has a Bachelor of Commerce (Hons) and is a Chartered
Accountant. He is a director of Hastings Technology Metals Ltd and
Metal Bank Limited and was previously a director of Bellevue Gold
Limited.
Interest in Securities as at 27 September 2019:
Fully paid ordinary shares: 452,999
Performance rights: 2,000,000
Significant Changes in State of Affairs
There were no significant changes in the state of affairs of the Company during the year.
Principle Activities
The principal activity of the Company during the financial year was mineral exploration and the re-
commissioning of the Fox Radio Hill Plant. There have been no significant changes in the nature of the
Company’s principal activities during the financial year.
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Directors’ Report
Significant Events after Balance Sheet Date
On 31 July 2019, a total of 87,338,535 shares were issued under a Share Purchase Plan at a price of
$0.031 per share, raising $2,707,500 before costs. The Company also issued 16,500,000 options to
Directors (Exercise price: $0.08; Expiry date: 15 May 2022), 18,652,175 options to financiers (Exercise
price: $0.08; Expiry date: 31 July 2022), 10,000,000 options to underwriters (Exercise price: $0.08;
Expiry date: 31 July 2022) and 10,000,000 options to an advisor (Exercise price: $0.08; Expiry date: 31
July 2022).
On 16 July 2019, the Company signed a binding agreement to acquire 100% of Rincon Resources Ltd,
which holds rights to three highly prospective Au-Cu projects in Western Australia. The Company has
paid a non-refundable exclusivity fee of $75,000. The Company will also issue fully paid ordinary shares
with a total value of $2.7m which is conditional upon the completion of due diligence by the Company.
Upon completion of this transaction, Mr Zeffron Reeves will be appointed as a Non-Executive director
of the Company.
Other than as outlined above there are currently no matters or circumstances that have arisen since
the end of the financial year that have significantly affected or may significantly affect the operations
the Group, the results of those operations, or the state of affairs of the Group in the future financial
years.
Likely Future Developments and Expected Results
The primary objective of Artemis is to explore its current tenements in Australia with a view to
determining an economically viable gold resource for processing at the Fox Radio Hill processing plant.
Performance in relation to Environmental Regulation
The Group will comply with its obligations in relation to environmental regulation on its projects when
it undertakes exploration. The Directors are not aware of any breaches of any environmental
regulations during the period covered by this Report.
Operating Results and Financial Review
The loss of the Group after providing for income tax amounted to $9,347,739 (2018: profit of
$12,073,913). The loss position for the year includes non-cash items comprising a write off of
exploration costs of $701,261, a loss on the sale of investments $533,183 and share based payments
in the amount of $3,518,684.
The Group’s operating income decreased to $12,127 (2018: $18,928,727) with $18,546,823
attributable to the sale of Novo shares in prior year, net of an amount of $1,559,575 applied as a
recovery of exploration costs, and sales of gold and copper ore in prior year. The Group’s expenses
increased to $9,359,866 (2018: $6,854,814). The increase was attributable to higher share-based
payments expense, as a result of the convertible loan note restructuring, in the amount of $1,991,793
(2018: $77,212), and other non-cash items outlined above.
Artemis Resources Limited Annual Financial Report – June 2019
49 | P a g e
Directors’ Report
Operating Results and Financial Review (continued)
The carrying value of exploration and development costs increased to $37,027,656 (2018:
$28,761,825) reflecting a significant increase in exploration on the Company’s gold and cobalt
prospects. The development expenditure has increased to $23,353,620 (2019: $11,713,066) reflecting
refurbishment and repair works on the Radio Hill Plant.
Net assets declined to $53,420,072 (2018: $58,610,558) reflecting the loss incurred during the year.
Dividends Paid or Recommended
The Directors do not recommend the payment of a dividend and no dividend has been paid or declared
to the date of this Report.
Directors’ Meetings
The number of Directors' meetings (including committees) held during the year and the number of
meetings attended by each director were as follow:
Name of Director
H.H. Sheikh Maktoum
D. Lenigas
A. Duncan-Kemp
E. Mead
D. Smith
Board Meetings
Audit Committee
Meetings
Remuneration
Committee Meetings
Attended
Held
Attended
Held
Attended
Held
8
1
1
9
8
9
1
1
9
8
-
1
-
2
1
-
1
-
2
1
-
1
-
1
-
-
1
-
1
-
Held represents the number of meetings held during the time the director held office or was a member
of the relevant committee.
Indemnifying Officers
In accordance with the Constitution, except as may be prohibited by the Corporations Act 2001, every
officer or agent of the Company shall be indemnified out of the property of the Company against any
liability incurred by him or her in his or her capacity as officer or agent of the Company or any related
corporation in respect of any act or omission whatsoever and howsoever occurring or in defending
any proceedings, whether civil or criminal.
During the financial year the Company paid insurance premiums of $28,750 in respect of a contract
insuring the directors and officers of the Group against any liability incurred in the course of their
duties to the extent permitted by the Corporations Act 2001. The insurance premiums relate to:
Artemis Resources Limited Annual Financial Report – June 2019
50 | P a g e
Directors’ Report
Indemnifying Officers (continued)
•
•
Costs and expenses incurred by the relevant officers in defending legal proceedings, whether
civil or criminal and whatever their outcome; and
Other liabilities that may arise from their position, with the exception of conduct involving wilful
breach of duty or improper use of information to gain a personal advantage.
Proceedings on behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene
in any proceeding 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.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2019 has been received and
can be found on page 61 of the financial report.
This Report is made in accordance with a resolution of the Directors.
Edward Mead
Director
27 September 2019
Artemis Resources Limited Annual Financial Report – June 2019
51 | P a g e
Remuneration Report
Remuneration Report – Audited
The remuneration report, which has been audited, outlines the key management personnel
remuneration arrangements for the Company, in accordance with the requirements of the
Corporations Act 2001 and its regulations.
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 remunerations
C. Service agreements
D. Share-based compensation
E. Additional disclosures relating to key management personnel
A. Principles used to determine the nature and amount of remuneration
The Board’s policy for determining the nature and amount of remuneration for Board members and
officers is as follows:
•
•
•
•
•
The remuneration policy, which sets the terms and conditions (where appropriate) for the
executive directors and other senior staff members, was developed by the Remuneration
Committee and ultimately approved by the Board;
In determining competitive remuneration rates, the Remuneration Committee may seek
independent advice on local and international trends among comparative companies and
industries generally. The Remuneration Committee examines terms and conditions for
employee incentive schemes, benefit plans and share plans. Independent advice may be
obtained to confirm that executive remuneration is in line with market practice and is
reasonable in the context of Australian executive reward practices. No remuneration
consultants were retained by the Group during the year;
The Company is a mineral exploration company, and therefore speculative in terms of
performance. Consistent with attracting and retaining talented executives, directors and senior
executives, such personnel are paid market rates associated with individuals in similar positions
within the same industry. Options and performance incentives may be issued particularly as the
Company moves from commercialisation to a producing entity and key performance indicators
such as profit and production can be used as measurements for assessing executive
performance;
Given the early stage of the Company’s projects it is not meaningful to track executive
compensation to financial results and shareholder wealth. It is also not possible to set
meaningful specific objective performance criteria for directors as this stage;
All remuneration paid to directors and officers is valued at the cost to the Company and
expensed. Where appropriate, shares given to directors, executives and officers are valued as
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 methodology; and
Artemis Resources Limited Annual Financial Report – June 2019
52 | P a g e
Remuneration Report
A. Principles used to determine the nature and amount of remuneration (continued)
•
The policy is to remunerate non-executive directors and officers at market rates for comparable
companies for time, commitment and responsibilities. Given the evolving nature of the Group’s
business, the Board, in consultation with independent advisors, determines payments to the
non-executive directors and reviews their remuneration annually, based on market practice,
duties and accountability.
Shareholders at the General Meeting held on 22 July 2019 approved an increase in the
maximum aggregate amount of fees that can be paid to non-executive directors from $150,000
to $300,000 per annum. Fees for non-executive directors and officers are not linked to the
performance of the Company. However, from time to time and subject to obtaining all requisite
shareholder approvals, the directors and officers will be issued with securities as part of their
remuneration where it is considered appropriate to do so and as a means of aligning their
interests with shareholders.
B. Details of remuneration
(i) Details of Directors and Key Management Personnel
Current Directors
H.H. Sheikh Maktoum Hasher Al Maktoum – Non-Executive Chairman (appointed 26 October 2017)
Edward Mead – Executive Director (appointed 31 December 2014)
Daniel Smith – Non-Executive Director (appointed 5 February 2019)
Former Directors
David Lenigas – Executive Chairman (appointed 3 November 2016, resigned 5 February 2019)
Alex Duncan-Kemp – Executive Director (appointed 3 January 2017, resigned 5 February 2019)
Company Secretary
Guy Robertson
Key Management Personnel
Wayne Bramwell – Chief Executive Officer (appointed 19 June 2019, resigned 6 May 2019)
Edward Mead – General Manager Exploration
Alex Duncan-Kemp – General Manager Operations (appointed 3 January 2017, resigned 5 February
2019)
Except as detailed in Notes (i) – (iii) to the Remuneration Report, no Director has received or become
entitled to receive, during or since the financial period, a benefit because of a contract made by the
Company or a related body corporate with a Director, a firm of which a Director is a member or an
entity in which a Director has a substantial financial interest. This statement excludes a benefit
included in the aggregate amount of emoluments received or due and receivable by Directors and
shown in Notes (i) – (iii) to the Remuneration Report, prepared in accordance with the Corporations
Regulations 2001, or the fixed salary of a full time employee of the Company.
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53 | P a g e
Remuneration Report
B. Details of remuneration (continued)
(ii) Remuneration of Directors and Key Management Personnel
The Remuneration Committee and the Board will assess the appropriateness of the nature and
amount of emoluments of such officers on a periodic basis by reference to relevant employment
market conditions with the overall objective of ensuring maximum stakeholder benefit from the
retention of a high quality Board and executive team. Remuneration of the Key Management
Personnel of the Group is set out below.
FY18/19
Name
H.H. Sheikh
Maktoum
D. Lenigas1
A. Duncan-Kemp1
E. Mead
D. Smith2
W. Bramwell1
G. Robertson
1 Resigned during the financial year.
2 Commenced 5 February 2019.
FY17/18
Name
H.H. Sheikh
Maktoum
D. Lenigas
A. Duncan-Kemp
E. Mead
W. Bramwell1
G. Robertson
1 Commenced 19 June 2018.
Base Salary
and Fees
Share
Based
Payments
$
$
Post
Employment
Super-
Contribution
$
$
Total
Performance
based
120,000
675,000
-
795,000
179,464
109,379
300,000
48,335
365,873
84,000
1,207,051
485,433
148,898
148,898
-
(6,393)
75,055
1,526,891
-
-
-
-
34,758
-
34,758
664,897
258,277
448,898
48,335
394,238
159,055
2,768,700
Base Salary
and Fees
Share
Based
Payments
$
$
Post
Employment
Super-
Contribution
$
$
Total
Performance
based
80,000
1,525,000
-
1,605,000
210,000
220,700
250,727
7,308
75,000
843,735
242,717
74,449
74,449
6,393
75,055
1,998,063
-
-
-
694
-
694
452,717
295,149
325,176
14,395
150,055
2,842,492
%
-
51
29
17
-
-
47
%
-
37
13
12
-
25
(iii) Use of remuneration consultants
There was no engagement of remuneration consultants in the current financial year. The Company
engaged BDO Remuneration and Reward Pty Ltd (“BDO”) in FY19/20 for $9,250. There is no existing
relationship with BDO and the Company and as a result, the board is satisfied that the
recommendations were made free from undue influence and independent from any members of the
key management personnel.
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55 | P a g e
Remuneration Report
C. Service agreements
Component
Fixed remuneration
Contract duration
Notice by the
individual/company
Termination of
employment (without
cause)
Termination of
employment (with cause)
or by individual
Non-executive
Chairman
$120,000
Ongoing
Executive Director
Non-executive director
$300,000
Ongoing
3 months
$50,000
Ongoing
On termination of employment without cause unexercised options are at the
discretion of the Board.
Vesting of performance rights is at the discretion of the board, who may also
shorten the performance period.
On termination for cause unexercised options will lapse. On termination by
employee unexercised options are at the discretion of the Board.
On termination for cause performance rights not vested will lapse.
The Chairman has a letter of appointment providing for fees of $120,000 per annum. The Chairman
was awarded a sign on fee of 5,000,000 shares on appointment on 25 October 2017, 5 million shares
as approved by shareholders, on 30 November 2018 and will be entitled to 5 million shares in
November 2019, if approved by shareholders.
D. Share-based compensation
(a) Options
The terms of each grant of options affecting remuneration in the previous, current or future reporting
periods are as are as follows:
Date option granted
Expiry date
Issue price of Shares
Number under option
30 November 2017
19 June 20181
19 June 20181
30 June 2020
19 June 2021
19 June 2021
44 cents
27.39 cents
40 cents
6,000,000
10,000,000
5,000,000
1Following the resignation of Mr Wayne Bramwell in May 2019, all share option incentives were forfeited.
Subsequent to year end shareholders approved the following share-based payments to Directors:
(a) 7,500,000 unlisted options (1,500,000 in each class A to E) were issued to Doraleda Pty Ltd, an
entity controlled by Mr Edward Mead. Each option will have an exercise price of $0.08 and will expire
at 5.00 pm (WST) on 15 May 2022.
(b) 9,000,000 unlisted options (3,000,000 in class A and E, and 1,000,000 in class B, C & D) were issued
to Orwellian Pty Ltd, an entity controlled by Mr Daniel Smith.
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55 | P a g e
Remuneration Report
D. Share-based compensation (continued)
Each option will have an exercise price of $0.08 and will expire at 5.00 pm (WST) on 15 May 2022.
The performance hurdles for the options are as follows:
Performance Hurdles
Class A: commissioning of the Radio Hill Gekko Gravity Gold Plant for commercial processing of
ore by Artemis or to toll treatment ore for third parties
Class B: the Company completing a pre-feasibility study in compliance with the JORC Code (2012)
in relation to its Carlow Castle Project on E47/1797 (or mining licence over part of this tenement),
which supports a mine life reserve of not less than 5 years;
Class C: the Company announces a JORC Code (2012) compliant mineral resource of at least 15mt
(million tonnes) at 1 g/t Au (Au grams per tonne) in relation to its Carlow Castle Project
Class D: the Company announces a JORC Code (2012) compliant mineral resource of at least
1moz (million ounces) of 1.5 g/t gold equivalent (Au and Cu) in relation to its Carlow Castle
Project
Class E: the Company being admitted to AIM and raising a minimum of $5,000,000 from the issue
of equity securities in the AIM market
Options granted as remuneration to Key Management Personnel in the previous, current and future
reporting periods:
Name
D. Lenigas
E. Mead
Date of grant
Expiry date
30 November 2017
30 June 2020
30 November 2017
30 June 2020
A. Duncan-Kemp
30 November 2017
30 June 2020
W. Bramwell1
W. Bramwell1
19 June 2018
19 June 2021
19 June 2018
19 June 2021
Number under
options
Grant date value
3,000,000
1,500,000
1,500,000
10,000,000
5,000,000
$381,526
$190,763
$190,763
$453,681
$189,152
1Following the resignation of Mr Wayne Bramwell in May 2019, all share option incentives were forfeited.
No options over ordinary shares were granted or exercised for directors and other key management
personnel as part of compensation during the year ended 30 June 2019.
The assessed fair value at grant date of options granted to the individuals is allocated equally over the
period from grant date to vesting date, and the amount is included in the remuneration tables above.
Fair values at the grant date are independently determined using a Black-Scholes option pricing model
that takes into account the exercise price, the term of the option, the impact of dilution the share
price at grant date and expected price volatility of the underlying shares, the expected dividend yield
and the risk-free interest rate for the term of the option.
An expense of $288,982 (2018: $178,696) was recognised for the year end 30 June 2019 in relation to
performance rights issued to Key Management Personnel.
No options were exercised by Directors or other key management personnel during the year.
15,000,000 options were forfeited following the resignation of the CEO during the year.
5rtemis Resources Limited Annual Financial Report – June 2019
56 | P a g e
Remuneration Report
D. Share-based compensation (continued)
(b) Performance Rights
The terms of each grant of performance rights affecting remuneration in the previous, current or
future reporting periods are as follows:
Date of grant
Value per Share
Name
D. Lenigas
E. Mead
13 September 2017
13 September 2017
A. Duncan-Kemp
13 September 2017
G. Robertson
13 September 2017
8.6 cents
8.6 cents
8.6 cents
8.6 cents
Number of
performance rights
9,000,000
2,000,000
2,000,000
2,000,000
Grant date value
$774,000
$172,000
$172,000
$172,000
Vesting occurs at the end of the performance period ended 30 June 2019, if the following performance
conditions are met:
Market-based performance conditions:
•
•
•
33.3% of the performance rights will vest when share price exceeds 15 cents; and
33.3% of the performance rights will vest when share price exceeds 20 cents; and
33.3% of the performance rights will vest when share price exceeds 25 cents.
Market based conditions have been met.
Non-market based performance conditions:
The vesting of the performance rights is also subject to non-market conditions including capital raising,
occupational health and safety outcomes and corporate governance hurdles.
The Board will determine if the performance conditions have been met before 30 September 2019.
An expense of $562,909 (2018: $469,091) was recognised for the year ended 30 June 2019 in relation
to these performance rights issued to Key Management Personnel.
All equity dealings with Directors have been entered into with terms and conditions no more
favourable than those that the entity would have adopted if dealing at arm’s length.
5rtemis Resources Limited Annual Financial Report – June 2019
57 | P a g e
Remuneration Report
E. Additional disclosures relating to key management personnel
Shares held by Directors and Key Management Personnel
FY18/19
Name
H.H. Sheikh Maktoum
D. Lenigas1
A. Duncan-Kemp1
E. Mead
D. Smith2
W. Bramwell1
G. Robertson
Balance at the
beginning of the
year
5,000,000
25,000,000
-
2,000,000
-
-
452,999
32,452,999
¹Resigned during financial year.
2Commenced 5 February 2019.
3Balance on resignation 5 February 2019.
FY17/18
Name
H.H. Sheikh Maktoum
D. Lenigas
A. Duncan-Kemp
E. Mead
W. Bramwell1
G. Robertson
¹Commenced 19 June 2018.
Balance at the
beginning of the
year
-
25,000,000
-
2,000,000
-
-
27,000,000
Received as
remuneration
Net Change
Other
Balance at the
end of year
5,000,000
-
-
150,000
(25,000,000)3
-
-
-
-
-
-
-
-
-
5,000,000
(24,850,000)
10,150,000
-
-
2,000,000
-
-
452,999
12,602,999
Received as
remuneration
Net Change
Other
Balance at the
end of year
5,000,000
-
-
-
-
-
5,000,000
-
-
-
-
-
452,999
452,999
5,000,000
25,000,000
-
2,000,000
-
452,999
32,452,999
5rtemis Resources Limited Annual Financial Report – June 2019
58 | P a g e
Remuneration Report
E. Additional disclosures relating to key management personnel (continued)
Options and performance rights held by Directors and Key Management Personnel
FY18/19
Name
Options
H.H. Sheikh Maktoum
D. Lenigas1
A. Duncan-Kemp1
E. Mead
D. Smith2
W. Bramwell3
G. Robertson
Performance Rights
H.H. Sheikh Maktoum
D. Lenigas1
A. Duncan-Kemp1
E. Mead
D. Smith2
W. Bramwell
G. Robertson
Balance at the
beginning of the
year
Received as
remuneration
Net Change
Other
Balance at the
end of year
-
3,000,000
1,500,000
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
15,000,000
-
(15,000,000)
-
-
3,000,000
1,500,000
1,500,000
-
-
-
6,000,000
15,000,000
(15,000,000)
6,000,000
-
9,000,000
2,000,000
2,000,000
-
-
2,000,000
15,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,000,000
2,000,000
2,000,000
-
-
2,000,000
15,000,000
¹Resigned during financial year.
2Commenced 5 February 2019.
3Resigned on 6 May 2019. All share option incentives were forfeited.
5rtemis Resources Limited Annual Financial Report – June 2019
59 | P a g e
Remuneration Report
E. Additional disclosures relating to key management personnel (continued)
FY17/18
Name
Options
H.H. Sheikh Maktoum
D. Lenigas
A. Duncan-Kemp
E. Mead
W. Bramwell1
G. Robertson
Performance Rights
H.H. Sheikh Maktoum
D. Lenigas
A. Duncan-Kemp
E. Mead
W. Bramwell1
G. Robertson
¹Commenced 19 June 2018.
Balance at the
beginning of the
year
Received as
remuneration
Net Change
Other
Balance at the
end of year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
1,500,000
1,500,000
-
-
6,000,000
-
9,000,000
2,000,000
2,000,000
-
2,000,000
15,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
1,500,000
1,500,000
-
-
6,000,000
-
9,000,000
2,000,000
2,000,000
-
2,000,000
15,000,000
Other transactions with key management personnel
Consolidated
30 June 2019
$
30 June 2018
$
ADK Mining Services1
Doraleda Pty Ltd2
Integrated CFO Solutions3
Minerva Corporate Pty Ltd4
109,379
300,000
120,000
48,335
577,714
220,700
250,727
129,000
-
600,427
1 Director fees and consulting fees paid to ADK Mining Services Pty Ltd, a company in which Mr Alex Duncan-Kemp has an interest.
2 Director fees and consulting fees paid to Doraleda Pty Ltd, a company in which Mr Edward Mead has an interest.
3 Company secretary fees and consulting fees paid to Integrated CFO Solutions, a company in which Mr Guy Robertson has an interest.
In 2019, these included fees of $36,000 (2018: $54,000) for accounting services.
4 Director fees and consulting fees paid to Minerva Corporate Pty Ltd, a company in which Mr Daniel Smith has an interest.
END OF AUDITED REMUNERATION REPORT
5rtemis Resources Limited Annual Financial Report – June 2019
60 | P a g e
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Artemis Resources for the year
ended 30 June 2019, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(a)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
27 September 2019
B G McVeigh
Partner
61 | P a g e
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2019
Revenue
Cost of sales
Consolidated
30 June 2019
$
12,127
30 June 2018
$
18,928,727
Notes
3
11
(8,003)
(174,484)
Personnel costs
Occupancy costs
Legal fees
Consultancy costs
Compliance and regulatory expenses
Directors’ fees
Travel
Marketing expenses
Borrowing costs
Other expenses
Project and exploration expenditure write off
Net fair value loss on financial instruments designated as
fair value through profit or loss
Share-based payments
Unrealised foreign exchange gain
(LOSS)/PROFIT BEFORE INCOME TAX
Income tax expense/benefit
(LOSS)/PROFIT FOR THE YEAR
Other comprehensive income, net of tax
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR
11
23
4
(792,335)
(120,032)
(296,294)
(687,039)
(227,916)
(656,728)
(282,762)
(358,215)
(814,819)
(585,477)
(701,261)
(310,701)
(165,143)
(388,056)
(303,040)
(310,049)
(423,132)
(565,772)
(92,436)
(642,880)
(792,796)
(202,445)
(533,183)
(316,087)
(3,518,684)
222,882
(9,347,739)
-
(9,347,739)
-
(9,347,739)
(2,339,999)
172,206
12,073,913
-
12,073,913
-
12,073,913
(LOSS)/PROFIT FOR THE YEAR ATTRIBUTABLE TO:
Owners of the parent entity
(9,347,739)
12,073,913
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR
ATTRIBUTABLE TO:
Owners of the parent entity
(9,347,739)
12,073,913
Basic (loss)/profit per share - cents
Diluted (loss)/profit per share - cents
21
21
(1.44)
(1.44)
2.22
2.02
The consolidated statement of profit or loss and other comprehensive income is to be read in
conjunction with the accompanying notes
Artemis Resources Limited Annual Financial Report – June 2019
62| P a g e
Consolidated Statement of Financial Position
As at 30 June 2019
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Inventories
Other financial assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Intangible assets
Exploration and evaluation expenditure
Development expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefits obligation
Financial liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Accumulated losses
Parent interests
TOTAL EQUITY
Consolidated
30 June 2019
$
Notes
Restated
30 June 2018
$
5
6
7
8
9
10
11
12
13
14
15
12
16
17
821,481
254,255
460,202
-
1,535,938
27,048,303
1,846,132
-
430,730
29,325,165
159,784
109,414
37,027,656
23,353,620
60,650,474
62,186,412
96,999
83,251
28,761,826
11,713,066
40,655,142
69,980,307
1,516,278
44,861
5,792,078
7,353,217
7,446,797
8,928
3,914,024
11,369,749
1,413,123
1,413,123
8,766,340
53,420,072
-
-
11,369,749
58,610,558
81,438,336
2,571,003
(30,589,267)
53,420,072
53,420,072
79,127,087
724,999
(21,241,528)
58,610,558
58,610,558
The consolidated statement of financial position should be read in conjunction with the
accompanying notes.
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Consolidated Statement of Changes in Equity
As at 30 June 2019
Consolidated
Balance at 1 July 2017
Profit for the year
Total comprehensive income for
the year
Issue of shares
Costs of share issue
Exercise of options
Transfer to share-based payments
Transfer from share-based
payments
Balance at 30 June 2018
Issued
Capital
Reserves
$
39,067,554
-
$
172,000
-
Accumulated
(Losses)/
Profit
$
(33,315,441)
12,073,913
Total
Equity
$
5,924,113
12,073,913
-
12,073,913
12,073,913
41,053,281
(1,255,748)
172,000
-
-
-
(172,000)
814,999
90,000
(90,000)
-
-
-
-
-
41,053,281
(1,255,748)
-
814,999
-
79,127,087
724,999
(21,241,528)
58,610,558
Consolidated
Balance at 1 July 2018
Loss for the year
Total comprehensive loss for the
year
Issue of shares
Share-based payments
Balance at 30 June 2019
Issued
Capital
$
79,127,087
-
Reserves
$
724,999
-
Accumulated
Losses
$
(21,241,528)
(9,347,739)
Total
Equity
$
58,610,558
(9,347,739)
-
-
(9,347,739)
(9,347,739)
2,311,249
-
81,438,336
-
1,846,004
2,571,003
-
-
(30,589,267)
2,311,249
1,846,004
53,420,072
The consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
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Consolidated Statement of Cash Flows
For the Year Ended 30 June 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Financing cost
NET CASH USED IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments
Payments for exploration and evaluation
Payment for development expenditure
Payment for projects/prospect
Purchase of plant and equipment & office equipment
Proceeds from sale of plant and equipment
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Cost of share issue
Exercise of options
Repayment of short-term loan
Proceeds from convertible note, net of costs
Repayment of convertible note
NET CASH PROVIDED BY FINANCING ACTIVITIES
Consolidated
30 June
2019
$
30 June
2018
$
74,656
(4,196,221)
5,127
(478,367)
(4,594,805)
415,535
(3,171,454)
160,863
(841,976)
(3,437,032)
24
208,880
(10,700,937)
(13,241,243)
-
(133,315)
6,747
(23,859,868)
-
-
202,485
-
5,236,354
(3,433,870)
2,004,969
25
25
25
19,516,977
(18,987,830)
-
(1,500,000)
(182,656)
-
(1,153,509)
28,372,983
(1,225,748)
-
(60,000)
5,945,003
(1,918,894)
31,083,344
Net (decrease)/increase in cash held
Cash at the beginning of the period
Effects of exchange rate changes on the balance of cash
held in foreign currencies
CASH AT THE END OF THE YEAR
(26,449,704)
27,048,303
26,492,803
329,196
222,882
226,304
5
821,481
27,048,303
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
Standards, Australian Accounting
The financial report is a general purpose financial report prepared in accordance with Australian
Accounting
authoritative
pronouncements of the Australian Standards Board, International Financial Reporting Standards
as issued by the International Accounting Standards Board and the requirements of the
Corporations Act 2001. The Group is a for profit entity for financial reporting purposes under
Australian Accounting Standards.
Interpretations,
other
Australian Accounting Standards set out accounting policies that the AASB has concluded would
result in a financial report containing relevant and reliable information about transactions, events
and conditions. Compliance with Australian Accounting Standards ensures that the financial
statements and notes also comply with International Financial Reporting Standards. Material
accounting policies adopted in the preparation of this financial report are presented below and
have been consistently applied unless otherwise stated.
The consolidated financial statements have been prepared on the basis of historical costs, except
for the revaluation of certain non-current assets and financial instruments. Cost is based on the
fair values of the consideration given in exchange for assets. All amounts are presented in
Australian dollars, unless otherwise stated.
The financial statements are presented in Australian dollars which is Artemis Resources Limited’s
functional and presentation currency.
These financial statements were authorised for issue on 27 September 2019.
Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
•
• has the ability to its power to affect its returns.
is exposed, or has rights, to variable returns from its involvement in with the investee; and
The Company reassess whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements listed above.
When the Company has less than a majority of the voting rights if an investee, it has the power
over the investee when the voting rights are sufficient to give it the practical ability to direct the
relevant activities of the investee unilaterally. The Company considers all relevant facts and
circumstances in assessing whether or not the Company’s voting rights are sufficient to give it
power, including:
•
the size of the Company’s holding of voting rights relative to the size and dispersion of
holdings of the other vote holders;
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
• potential voting rights held by the Company, other vote holders or other parties; rights
arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not
have, the current ability to direct the relevant activities at the time that decisions need to
be made, including voting patterns at previous shareholder meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and
ceases when the Company loses control of the subsidiary. Specifically income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statement of
profit or loss and comprehensive income from the date the Company gains control until the date
when the Company ceases to control the subsidiary.
Changes in the Group’s ownership interest in subsidiaries that do not result in the Group losing
control over the subsidiaries are accounted for as equity transactions. The carrying amounts of
the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their
relative interests in subsidiaries. Any difference between the amount paid by which the non-
controlling interests are adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to the owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is
calculated as the difference between:
• The aggregate of the fair value of the consideration received and the fair value of any
retained interest; and
• The previous carrying amount of the assets (including goodwill), and liabilities of the
subsidiary and any non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary
are accounted for as if the Group had directly disposed of the related assets or liabilities of the
subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as
specified/permitted by the applicable AASBs). The fair value of any investment retained in the
former subsidiary at the date when control is lost is regarded as the fair value on initial recognition
for subsequent accounting under AASB 139, when applicable, the cost on initial recognition of an
investment in an associate or a joint venture.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a
combination involving entities or businesses under common control. The business combination
will be accounted for from the date that control is attained, whereby the fair value of the
identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised
(subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability
resulting from a contingent consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not remeasured and its subsequent
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
settlement is accounted for within equity. Contingent consideration classified as an asset or
liability is remeasured each reporting period to fair value, recognising any change to fair value in
profit or loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the
consolidated statement of comprehensive income.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain
purchase.
New and revised Standards and amendments thereof and Interpretations effective for the
current year that are relevant to the Group
The Group has adopted all of the new and revised Standards and Interpretations issued by the
Australian Accounting Standards Board (the AASB) that are mandatory for the current reporting
period including adopting AASB 9 Financial Instruments and AASB 15 Revenue from Contracts with
Customers from 1 July 2018.
AASB 9 Financial Instruments
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and makes
changes to a number of areas including classification of financial instruments, measurement,
impairment of financial assets and hedge accounting model.
As the application of AASB 9 has no significant impact on the financial performance or position of
the Group the information presented for 30 June 2018 has not been restated.
On initial application date, borrowings have been designated as financial liabilities designated as
at fair value through profit and loss. As from the initial application date further gains or losses will
be recognised as net fair value movement through profit or loss.
AASB 15 Revenue from contracts with customers
AASB 15 replaces AASB 118 Revenue, AASB 111 Construction Contracts and several revenues
related interpretations. AASB 15 establishes a five-step model to account for revenue arising from
contracts with customers and requires that revenue to be recognised at an amount that reflects
the consideration to which an entity expects to be entitled in exchange for transferring goods or
services to a customer.
The adoption of AASB 15 does not have a significant impact on the Group as the Group does not
currently have any revenue from customers, except for interest income earned through financial
institutions.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Future Accounting Standards or Interpretations
Any new, revised or amending Accounting Standards or Interpretations that are yet to be
mandatory have not been early adopted.
The Directors have also reviewed all the new and revised Standards and Interpretations in issue
not yet adopted for the year ended 30 June 2019. As a result of this review the Directors have
determined that AASB 16 Leases has no material effect on the application in future periods.
Going Concern
For the year ended 30 June 2019, the Group recorded a loss of $9,347,739 (2018: Profit of
$12,073,913) and had net cash outflows from operating activities of $4,126,600 (2018:
$3,437,032) and has a net working capital deficit of $5,817,279 as at 30 June 2019 (2018: a net
surplus of $17,955,416).
The Directors believe that it is reasonably foreseeable that the Company and Group will continue
as a going concern and that it is appropriate to adopt the going concern basis in the preparation
of the financial report after consideration of the following factors:
• The Group has cash at bank of $821,481 and net assets of $53,420,072 as at 30 June 2019;
• The ability of the Group to scale back certain parts of their activities that are non-essential so
as to conserve cash;
• The Group retains the ability, if required, to wholly or in part dispose of interests in mineral
exploration and development assets; and
• The Company has raised approximately $2.7 million in new equity subsequent to balance date
and Directors are of the view that the Company will require an additional capital raise and has
the ability to raise further capital to enable the Group to meet scheduled exploration
expenditure requirements and future plans on the development assets.
These factors indicate a material uncertainty which may cast significant doubt as to whether the
Company and Group will continue as a going concern and therefore whether they will realise their
assets and extinguish their liabilities in the normal course of business and at the amounts stated
in the financial report.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income taxes
The income tax expense (benefit) 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 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. 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 is realised 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.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Exploration and evaluation costs
Exploration and evaluation expenditures in relation to each separate area of interest are
recognised as an exploration and evaluation asset in the year in which they are incurred where
the following conditions are satisfied:
the rights to tenure of the area of interest are current; and
•
• at least one of the following conditions is also met:
➢ the exploration and evaluation expenditures are expected to be recouped through
successful development and exploitation of the area of interest, or alternatively, by
its sale; or
➢ exploration and evaluation activities in the area of interest have not at the balance
date reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant operations
in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights
to explore, studies, exploratory drilling, trenching and sampling and associated activities and an
allocation of depreciation and amortised of assets used in exploration and evaluation activities.
General and administrative costs are only included in the measurement of exploration and
evaluation costs where they are related directly to operational activities in a particular area of
interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances
suggest that the carrying amount of an exploration and evaluation asset may exceed its
recoverable amount. The recoverable amount of the exploration and evaluation asset (for the
cash generating unit(s) to which it has been allocated being no larger than the relevant area of
interest) is estimated to determine the extent of the impairment loss (if any). Where an
impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of
interest, the relevant exploration and evaluation asset is tested for impairment and the balance is
then reclassified to development.
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.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial
asset expire, or when the financial asset and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement
All financial assets are initially measured at fair value adjusted for transaction costs (where
applicable). For the purpose of subsequent measurement, all the financial assets, are classified as
amortised cost.
All income and expenses relating to financial assets that are recognised in profit or loss are
presented within finance costs, finance income or other financial items, except for impairment of
other receivables which is presented within other expenses.
(i) Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and
are not designated as FVTPL):
•
•
they are held within a business model whose objective is to hold the financial assets
to collect its contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash
equivalents, and most other receivables fall into this category of financial instruments.
Other receivables
The Group makes use of a simplified approach in accounting for other receivables as well as
contract assets and records the loss allowance as lifetime expected credit losses. These are the
expected shortfalls in contractual cash flows, considering the potential for default at any point
during the life of the financial instrument. In calculating, the Group uses its historical experience,
external indicators and forward-looking information to calculate the expected credit losses using
a provision matrix.
The Group assess impairment of other receivables on a collective basis as they possess shared
credit risk characteristics they have been grouped based on the days past due.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative
financial instruments.
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).
All interest-related charges and, if applicable, changes in an instrument’s fair value that are
reported in profit or loss are included within finance costs or finance income.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Gold bullion, base metal concentrate, metal in circuit and ore stockpiles are physically measured
or estimated and valued at the lower of cost or net realisable value. Net realisable value is the
estimated selling price (in the ordinary course of business), less estimated costs of completion and
costs of selling final product.
Cost is determined using the weighted average method and comprises direct purchase costs and
an appropriate portion of fixed and variable overhead costs, including depreciation and
amortisation (if applicable).
Materials and supplies are valued at the lower of cost or net realisable value. Any provision for
obsolescence is determined by reference to specific items of stock. A regular review is undertaken
to determine the extent of any provision for obsolescence.
Plant and equipment
Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable,
any accumulated depreciation and impairment losses. Plant and equipment are measured on the
cost basis.
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 company and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the income statement during the financial period in which they are
incurred.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derecognition and disposal
An item of plant and equipment is derecognised upon disposal or when no further future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in profit or loss in the year the asset is derecognised.
Depreciation
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as
follows:
Plant and Equipment – ranging from 2 to 20 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
Impairment
The carrying values of plant and equipment are reviewed for impairment at each balance date,
with recoverable amount being estimated when events or changes in circumstances indicate that
the carrying value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is
determined for the cash-generating unit to which the asset belongs, unless the asset's value in use
can be estimated to approximate fair value.
An impairment exists when the carrying value of an asset or cash-generating unit exceeds its
estimated recoverable amount. The asset or cash-generating unit is then written down to its
recoverable amount.
For plant and equipment, impairment losses are recognised in the statement of profit or loss and
other comprehensive income in the cost of sales line item.
Intangible assets
Intangible assets acquired separately are recorded at cost less accumulated amortisation and
impairment. Amortisation is charged on a straight-line basis over their estimated useful lives. The
estimated useful life and amortisation method is reviewed at the end of each annual reporting
period, with any changes in these accounting estimates being accounted for on a prospective
basis.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment of intangible assets other than goodwill
The Group assesses at each balance date whether there is an indication that an asset may be
impaired. If any such indication exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount
is the higher of its fair value less costs to sell and its value in use and is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets and the asset's value in use cannot be estimated to be close to its
fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to
which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its
recoverable amount, the asset or cash-generating unit is considered impaired and is written down
to its recoverable amount.
Development expenditure
Development expenditure represent the accumulation of all exploration, evaluation and other
expenditure incurred in respect of areas of interest in which mining is in the process of
commencing. When further development expenditure is incurred after the commencement of
production, such expenditure is carried forward as part of the mine property only when
substantial future economic benefits are thereby established, otherwise such expenditure is
classified as part of the cost of production.
Restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as
a result of development activities undertaken, it is probable that an outflow of economic benefits
will be required to settle the obligation, and the amount of the provision can be measured reliably.
The estimated future obligations include the costs of abandoning sites, removing facilities and
restoring the affected areas.
The provision for future restoration costs is the best estimate of the present value of the
expenditure required to settle the restoration obligation at the balance date. Future restoration
costs are reviewed annually and any changes in the estimate are reflected in the present value of
the restoration provision at each balance date.
The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of
the related asset and amortised on the same basis as the related asset, unless the present
obligation arises from the production of inventory in the period, in which case the amount is
included in the cost of production for the period. Changes in the estimate of the provision for
restoration and rehabilitation are treated in the same manner, except that the unwinding of the
effect of discounting on the provision is recognised as a finance cost rather than being capitalised
into the cost of the related asset.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 3 months or less, and bank overdrafts. Bank
overdrafts are shown within short-term borrowings in current liabilities on the consolidated
statement of financial position.
Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods
and services provided to the Group prior to the end of the financial year that are unpaid and arise
when the Group becomes obliged to make future payments in respect of the purchase of these
goods and services. Trade and other payables are presented as current liabilities unless payment
is not due within 12 months.
Employee leave benefits
Wages, salaries, annual leave and sick leave
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave
and sick leave expected to be settled within 12 months of the balance date are recognised in other
payables in respect of employees’ services up to the balance date. They are measured at the
amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick
leave are recognised when the leave is taken and are measured at the rates paid or payable.
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave
and sick leave not expected to be settled within 12 months of the balance date are recognised in
non-current other payables in respect of employees’ services up to the balance date. They are
measured as the present value of the estimated future outflows to be made by the Group.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are not recognised for future operating losses.
Provisions are measured at the present value or management’s best estimate of the expenditure
required to settle the present obligation at the end of the reporting period. If the effect of the
time value of money is material, provisions are discounted using a current pre-tax rate that reflects
the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as an interest expense.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue recognition
Interest revenue is recognised using the effective interest method. It includes the amortisation of
any discount or premium.
Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred except
borrowing costs that are directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period to get ready for its intended use or sale. In this
case the borrowing costs are capitalised as part of the cost of such a qualifying asset.
The amount of borrowing costs relating to funds borrowed generally and used for the acquisition
of qualifying assets has been determined by applying a capitalisation rate to the expenditures on
those assets. The capitalisation rate comprises the weighted average of borrowing costs incurred
during the period.
Equity settled compensation
Share-based payments to employees are measured at the fair value of the instruments issued and
amortised over the vesting periods. Share-based payments to non-employees are measured at
the fair value of goods or services received or the fair value of the equity instruments issued, if it
is determined the fair value of the goods or services cannot be reliably measured, and are
recorded at the date the goods or services are received. The corresponding amount is recorded
to the option reserve. The fair value of options is determined using the Black-Scholes pricing
model. The number of shares and options expected to vest is reviewed and adjusted at the end
of each reporting period such that the amount recognised for services received as consideration
for the equity instruments granted is based on the number of equity instruments that eventually
vest.
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 consolidated statement of financial position are shown
inclusive of GST. Cash flows are presented in the consolidated statement of cash flows on a gross
basis, except for the GST component of investing and financing activities, which are disclosed as
operating cash flows.
Parent entity disclosures
The financial information for the parent entity, Artemis Resources Limited, has been prepared on the same
basis as the consolidated financial statements.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use of estimates and judgements
The preparation of financial statements requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised and in any future periods affected.
Exploration and evaluation, and development expenditure carried forward
The Group capitalises expenditure relating to exploration and evaluation, and development,
where it is considered likely to be recoverable or where the activities have not reached a stage
which permits a reasonable assessment of the existence of reserves. While there are certain areas
of interest from which no reserves have been extracted, the directors are of the continued belief
that such expenditure should not be written off since feasibility studies in such areas have not yet
concluded.
The recoverability of the carrying amount of mine development expenditure carried forward has
been reviewed by the Directors. In conducting the review, the recoverable amount has been
assessed by reference to the higher of “fair value less costs to sell” and “value in use”. In
determining value in use, future cash flows are based on:
• Estimates of ore reserves and mineral resources for which there is a high degree of confidence
of economic extraction;
• Estimated production and sales levels;
• Estimate future commodity prices;
• Future costs of production;
• Future capital expenditure; and/or
• Future exchange rates.
Variations to expected future cash flows, and timing thereof, could result in significant changes to
the impairment test results, which in turn could impact future financial results.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is
determined by an external valuer using a Black-Scholes model, using the assumptions detailed in
Note 23.
Fair value of financial instruments
Management uses valuation techniques to determine the fair value of financial instruments
(where active market quotes are not available) and non-financial assets. This involves developing
estimates and assumptions consistent with how market participants would price the instrument.
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Notes to the Financial Statements
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Provision for restoration and rehabilitation
The provision for restoration and rehabilitation has been estimated based on quotes provided by
third parties. The provision represents the best estimate of the present value of the expenditure
required to settle the restoration obligation at the reporting date.
2. SEGMENT INFORMATION
AASB 8 Operating Segments requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the Chief Operating
Decision Maker in order to allocate resources to the segment and to assess its performance.
The Group’s operating segments have been determined with reference to the monthly
management accounts used by the Chief Operating Decision Maker to make decisions regarding
the Group’s operations and allocation of working capital. Due to the size and nature of the Group,
the Board as a whole has been determined as the Chief Operating Decision Maker.
a. Description of segments
The Board has determined that the Group has two reportable segments, being mineral exploration
activities and development expenditure. The Board monitors the Group based on actual versus
budgeted expenditure incurred by area of interest.
The internal reporting framework is the most relevant to assist the Board with making decisions
regard the Group and its ongoing exploration activities.
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Notes to the Financial Statements
2. SEGMENT INFORMATION (CONTINUED)
b. Segment information provided to the Board:
Exploration Activities
Development
Activities
Unallocated
Total
Mt Clement West Pilbara
East Pilbara
Radio Hill
Corporate
$
$
$
$
$
$
30 June 2019
Segment revenue
Segment expenses
Reportable segment loss
-
-
-
-
-
-
-
-
-
-
-
-
12,127
(9,359,866)
(9,347,739)
12,127
(9,359,866)
(9,347,739)
Reportable segment assets
Reportable segment liabilities
233,159
-
36,565,459
-
229,038
-
23,353,620
1,413,123
1,805,136
7,353,217
62,186,412
8,766,340
Exploration Activities
Development
Activities
Unallocated
Total
Mt Clement West Pilbara
Others
Radio Hill
Corporate
$
$
$
$
$
$
30 June 2018
Segment revenue
Segment expenses
Reportable segment profit
-
-
-
-
-
-
Reportable segment assets
Reportable segment liabilities
147,442
28,614,384
-
-
-
-
-
-
-
-
-
-
11,713,066
-
18,928,727
(6,854,814)
12,073,913
29,505,415
11,369,749
18,928,727
(6,854,814)
12,073,913
69,980,307
11,369,749
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Notes to the Financial Statements
3. REVENUE
Revenue
Other income¹
Less: Applied as recovery of exploration costs
Profit on sale of Novo shares, net of cost
Sales of gold, silver and copper ore
Other revenue
Interest received
Consolidated
30 June 2019
$
30 June 2018
$
-
-
-
-
-
7,000
7,000
16,606,896
(1,559,575)
15,047,321
3,499,502
18,546,823
221,041
18,767,864
5,127
12,127
160,863
18,928,727
1On 15 August 2017, the Company entered into a farm in agreement with Novo Resources Corp
(Novo) whereby Novo will earn a 50% interest in gold (and other minerals necessarily mined with
gold) in conglomerate and/or paleoplacer style mineralisation on tenements located within
100km of the City of Karratha, on spending $2 million within two years. As part of the
consideration for this agreement Artemis has received 4,000,000 Novo shares (CVE: NVO). Novo
has now spent $2 million and the joint venture is live. The Novo shares were sold to Kirkland Lake
Gold (TSX: KL, NYSE: KL, ASX: KLA) at a price of CAD$5.00 per share for a total purchase price of
CAD$20m on 31 May 2018.
4.
INCOME TAXES
(a) Income tax expense
Current tax
Deferred tax
Income tax expense
Consolidated
30 June 2019
$
30 June 2018
$
-
-
-
-
-
-
(b) Income tax recognised in the statement of profit or loss and other comprehensive income
(Loss)/profit before tax
Tax at 27.5% (2018: 27.5%)
Tax effect of non-deductible expenses
Exploration expenditure
Timing differences not brought to account
Previously unrecognised tax losses and timing
differences now recouped to reduce tax expense
Income tax expense
Consolidated
30 June 2019
$
(9,347,739)
(2,570,628)
1,116,221
129,597
1,324,810
-
-
30 June 2018
$
12,073,913
3,320,326
735,462
(3,045,162)
-
(1,010,626)
-
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81 | P a g e
Notes to the Financial Statements
4.
INCOME TAXES (CONTINUED)
(c) Deferred tax balances
Deferred tax assets comprise:
Tax losses carried forward
Employee benefits obligation
Provisions
Deferred tax liabilities comprise:
Capitalised exploration costs
Net deferred tax asset unrecognised
(d) Analysis of deferred tax assets
Consolidated
30 June 2019
$
30 June 2018
$
5,961,631
12,337
388,609
6,362,577
4,435,552
4,435,552
1,927,025
4,636,821
2,455
-
4,639,276
4,192,726
4,192,726
446,550
No deferred tax assets have been recognised as yet, other than to offset deferred tax liabilities, as
it is currently not probable that future taxable profits will be available to realise the asset.
5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and account balances with banks and
investments in money market instruments, net of outstanding bank overdrafts. Cash and cash
equivalents included in the consolidated statement of cash flows comprise the following amounts:
Cash and cash equivalents
821,481
27,048,303
Consolidated
30 June 2019
$
30 June 2018
$
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82 | P a g e
Notes to the Financial Statements
6. OTHER RECEIVABLES
Other receivables
GST receivables
Prepayments
Consolidated
30 June 2019
$
30 June 2018
$
5,200
49,301
199,754
254,255
133,838
1,337,115
375,179
1,846,132
The value of trade and other receivables considered by the Directors to be past due or impaired
is nil (2018: Nil).
7.
INVENTORIES
Current
Gold bullion at cost
8. OTHER FINANCIAL ASSETS
Current
Fair Value Through Profit or Loss
Shares in listed equity securities (Level 1)
Consolidated
30 June 2019
$
30 June 2018
$
460,202
-
Consolidated
30 June 2019
$
30 June 2018
$
-
430,730
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83 | P a g e
Notes to the Financial Statements
9. PLANT AND EQUIPMENT
Consolidated
30 June 2019
$
30 June 2018
$
Computer equipment - at cost
Less: Accumulated depreciation
Total computer equipment at net book value
Furniture and fittings - at cost
Less: Accumulated depreciation
Total furniture and equipment at net book value
Motor vehicles – at cost
Less: Accumulated depreciation
Total motor vehicles at net book value
Total plant and equipment
62,635
(8,999)
53,636
132,065
(28,867)
103,198
7,500
(4,550)
2,950
159,784
12,546
(731)
11,815
82,294
(3,110)
79,184
10,000
(4,000)
6,000
96,999
Reconciliation of movement during the year
Reconciliations of the carrying amounts for each class of plant and equipment are set out below:
Computer equipment:
Carrying amount at the beginning of the year
- Addition
- Depreciation
Carrying amount at the end of the year
Furniture and fittings
Carrying amount at the beginning of the year
- Addition
- Disposals
- Depreciation
Carrying amount at the end of the year
Motor vehicles
Carrying amount at the beginning of the year
- Addition
- Disposals
- Amortisation
Carrying amount at the end of the year
Consolidated
30 June 2019
$
30 June 2018
$
11,815
50,089
(8,268)
53,636
79,184
59,055
(7,333)
(27,708)
103,198
6,000
-
(1,340)
(1,710)
2,950
-
12,546
(731)
11,815
-
82,294
-
(3,110)
79,184
-
10,000
-
(4,000)
6,000
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84 | P a g e
Notes to the Financial Statements
10. INTANGIBLE ASSETS
Consolidated
30 June 2019
$
30 June 2018
$
Computer Software - at cost
Less: Accumulated amortisation
Total computer software at net book value
151,365
(41,951)
109,414
90,883
(7,632)
83,251
Reconciliation of movement during the year:
Computer Software:
Carrying amount at the beginning of the year
- Addition
- Amortisation
Carrying amount at the end of the year
11. EXPLORATION AND EVALUATION EXPENDITURE
Consolidated
30 June 2019
$
30 June 2018
$
83,251
60,481
(34,318)
109,414
-
90,883
(7,632)
83,251
Consolidated
30 June 2019
$
Restated
30 June 2018
$
Exploration and evaluation expenditure
37,027,656
28,761,826
Exploration and Evaluation Phase Costs
Costs capitalised on areas of interest have been reviewed for impairment factors, such as resource
prices, ability to meet expenditure going forward and potential resource downgrades. It is the
Directors’ opinion that the Group has ownership or title to the areas of interest in respect of which
it has capitalised expenditure and has reasonable expectations that its activities are ongoing.
Reconciliation of movement during the year:
Opening balance
Acquisition of tenements and project interests
Expenditure capitalised in current period
Exploration expenditure written off
Cost of product sold written off
Closing balance
Consolidated
30 June 2019
$
28,761,826
-
8,975,094
(701,261)
(8,003)
37,027,656
Restated
30 June 2018
$
6,299,352
10,220,000
12,619,133
(202,445)
(174,214)
28,761,826
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85 | P a g e
Notes to the Financial Statements
12. DEVELOPMENT EXPENDITURE
Consolidated
30 June 2019
$
Restated
30 June 2018
$
Development expenditure
23,353,620
11,713,066
Reconciliation of movement during the year:
Opening balance
Additions1
Closing balance
Consolidated
30 June 2019
$
11,713,066
11,640,554
23,353,620
Restated
30 June 2018
$
2,693,353
9,019,713
11,713,066
1 Additions include a provision for restoration and rehabilitation of $1,413,123 which was
recognised during the year. It relates to the estimated cost of rehabilitation work to be carried out
in relation to the removal of facilities, closure of sites and restoring the affected areas. The
provision represents the best estimate of the present value of the expenditure required to settle
the restoration obligation at the reporting date. Future restoration costs are reviewed annually
and any changes in the estimate are reflected in the present value of the restoration provision at
each reporting date.
Impairment assessment
The recoverable amount of the cost to date for the work in progress on the Radio Hill Processing
Plant was reviewed for impairment. Following the review, the Directors have determined that the
recoverable amount exceeds the carrying value and that no impairment exists. The recoverable
amount estimation was based on the estimated value in use with discount rate of 8% applied to
the cash flow projections and was determined at the cash-generating unit level. The cash-
generating unit consists of the operating assets, which is comprised of the process plant and other
property, plant and equipment associated with the project. No material items required
impairment or write offs.
13. TRADE AND OTHER PAYABLES
Trade and other payables
1,516,278
7,446,797
Consolidated
30 June 2019
$
30 June 2018
$
Artemis Resources Limited Annual Financial Report – June 2019
86 | P a g e
Notes to the Financial Statements
14. EMPLOYEE BENEFITS OBLIGATION
Opening balance
Provision for the year
Benefits used or paid
Closing balance
15. FINANCIAL LIABILITIES
Convertible note at fair value (Level 2)
Short term loan at amortised cost
Reconciliation of movement during the year:
Convertible note
Opening balance
Add: Additional convertible note
Less: Conversion to equity
Less: Cash repayment on convertible note
Fair value movement
Closing balance
Short term loan
Opening balance
Add: Short term loan¹
Less: Cash repayment
Closing balance
Total
Consolidated
30 June 2019
$
8,928
123,639
(87,706)
44,861
30 June 2018
$
-
8,928
-
8,928
Consolidated
30 June 2019
$
5,595,206
196,872
5,792,078
30 June 2018
$
3,914,024
-
3,914,024
Consolidated
30 June 2019
$
30 June 2018
$
3,914,024
5,519,267
9,433,291
(783,770)
(3,433,870)
379,555
5,595,206
2,265,965
5,945,303
8,211,268
(2,232,791)
(1,918,894)
(145,559)
3,914,024
-
196,872
-
196,872
-
60,000
(60,000)
-
5,792,078
3,914,024
¹ The short term loan is premium funding of annual insurance costs.
The convertible notes issued by the Company is treated as financial liabilities designated as at fair
value through profit or loss.
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87 | P a g e
Notes to the Financial Statements
15. FINANCIAL LIABILITIES (CONTINUED)
On 8 December 2017, the Company entered into a US$4,500,000 funding agreement by way of
issuance of convertible notes (“first note”) at an issue price of US$1 per note. On 27 November
2018 the company took out a new convertible note in the amount of US$3,931,681, and
restructured the first note in the amount of US$1,285,710. On 24 May 2019, the Company signed
a variation to the funding facility (“Variation Deed”). An additional 100,000 convertible notes were
issued in satisfaction of restructure fees.
An amount of US$3,000,621 (2018: US$1,607,142) was repaid against the convertible notes during
the year, with US$2,457,143 (2018: US$1,285,714) being repaid in cash and US$543,478 (2018:
US$321,429) being converted with issuance of a total of 13,197,295 (2018: 2,710,355) shares. As
at 30 June 2019, the outstanding convertible note is US$3,923,917 (30 June 2018: US$2,892,857).
An amount of US$460,290 was repaid against the convertible note outstanding as at 30 June 2019
on 22 August 2019.
The convertible note was valued using Monte Carlo simulation. The key inputs to the valuation
are as follows:
Volatility (%)
Risk free rate (%)
Share price at this date ($)
Funding facilities pre Deed of Variation
100
1.89
0.12
• Convertible Securities: Convertible Securities of US$3,931,681 (New Convertible Securities),
plus an extension of US$1,285,710, being the balance of Convertible Securities announced on
11 December 2017 (Existing Convertible Securities) (together the Convertible Securities).
• Face Value and Purchase Price: US$1.00 per Convertible Security.
•
Implementation Fee: 5,000,000 fully paid ordinary shares in the capital of Artemis (Shares).
• Commitment Fee: 5%
•
Interest: No interest payable on the Convertible Securities.
• Maturity Date: 10 January 2020.
• Conversion: Subject to the Maximum Issue (defined below), the Investor may elect to convert
the Convertible Securities (other than those for which Artemis has given notice of early
redemption) at either:
➢ a Fixed Conversion Price of A$0.21; or
➢ a Variable Conversion Price of the lesser of the Fixed Conversion Price and 94% of the
average of the 3 lowest daily VWAP’s during the 10 trading days immediately prior to the
date that notice of conversion is given by the Investor, subject to the conditions that the
election to convert at the Variable Conversion Price cannot be made:
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88 | P a g e
Notes to the Financial Statements
15. FINANCIAL LIABILITIES (CONTINUED)
New Convertible Notes
➢ prior to 1 April 2019; or
➢ after 1 April 2019, with respect to more than $279,507 in April 2019, $521,739 in each
of May 2019 to October 2019 and $521,740 in November 2019 or such higher amount
where a prior month’s conversion capacity has not previously been used subject to an
aggregate conversion up to 10 December 2019 of more than an aggregate of 70% of
the total price paid for the Convertible Securities.
Existing Convertible Notes
➢ prior to 1 February 2019; or
➢
in a calendar month where Artemis has given a notice of early redemption and
Artemis paying the redeemed amount within the required time period.
• Redemption: Artemis may at any time elect to redeem some or all of the Convertible
Securities (other than those for which the Investor has given a conversion notice), provided
that:
➢ notice of such redemption is given on the first trading day of a calendar month for which
the 5-day VWAP for the 5 trading days immediately prior to that first trading day is less
than the Fixed Conversion Price; and
➢ the number of New Convertible Securities being redeemed is at least the minimum
redemption amount for that calendar month being nil in all months other than 279,507
in April 2019, 521,739 in each of May 2019 to October 2019 and 521,740 in November
2019 and the number of Existing Convertible Securities is at least the minimum
redemption amount for that calendar month being nil in all months other than 521,739
in each of February 2019 and March 2019 and 242,232 in April 2019.
Where Artemis elects to redeem the Convertible Securities, it must pay the Investor 112% of the
face value of the redeemed Convertible Securities within 7 days of giving the redemption notice.
• Maturity: On the Maturity Date, Artemis must redeem the remaining Convertible Securities
by paying the Investor the total face value (US$1 per Convertible Security) outstanding.
• Maximum Issue of Shares: The maximum number of Shares to be issued without shareholder
approval for the New Convertible Securities is capped at 36,171,466 (Maximum Issue). Where
Artemis is requested to issue Shares in excess of the Maximum Issue, the issue of such Shares
is subject to shareholder approval.
• Options: Artemis will issue the Investor and the arranger of the facility an aggregate of
8,571,429 options with an exercise price of A$0.21, exercisable on or before 30 November
2021.
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Notes to the Financial Statements
15. FINANCIAL LIABILITIES (CONTINUED)
• Security: The funding will be secured over the assets of Fox Radio Hill Pty Ltd whilst the face
value of the Convertible Securities exceeds US$1,500,000.
• Collateral: Artemis will issue 5,000,000 shares to the Riverfort Group.
New salient terms of Variation Deed:
• Maturity Date: 31 January 2020.
• Conversion: Subject to the Maximum Issue (defined below), the Investor may elect to convert
the Convertible Securities (other than those for which Artemis has given notice of early
redemption) at either:
➢ a Fixed Conversion Price of A$0.08; or
➢ a Variable Conversion Price of the lesser of the Fixed Conversion Price and 94% of the
average of the 3 lowest daily VWAP’s during the 10 trading days immediately prior to the
date that notice of conversion is given by the Investor, subject to the conditions that the
election to convert at the Variable Conversion Price cannot be made
• New Convertible Notes
➢ prior to 1 October 2019 in the event that Artemis has redeemed 2,100,000 convertible
notes before 30 September 2019
➢ For an amount greater than 350,000 notes per month.
• Restructure fees: As part of the restructure Artemis issued the Convertible Note investor
18,652,175 options with an exercise price of $0.08 and expiry date 31 July 2022.
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90 | P a g e
Notes to the Financial Statements
16. SHARE CAPITAL
Consolidated
Consolidated
30 June 2019
30 June 2018
No. of Shares No. of Shares
30 June 2019
$
30 June 2018
$
Issued and Paid-up Capital
Ordinary shares, fully paid
661,991,065
633,293,770
81,438,336
79,127,087
Reconciliation of movement during the year:
Shares
$
Opening balance
Shares issued to financiers as implementation fees
Shares issued to financiers as collateral
Shares issued to director
Shares issued to advisor
Shares issued on settlement of convertible note
Closing balance
633,293,770
5,000,000
5,000,000
5,000,000
500,000
13,197,295
661,991,065
79,127,087
775,000
-
675,000
77,479
783,770
81,438,336
Term of Issue:
Ordinary Shares
Ordinary shares participate in dividends and are entitled to one vote per share at shareholders
meetings. In the event of winding up the Company, ordinary shareholders rank after creditors
and are entitled to any proceeds of liquidation in proportion to the number of shares held.
17. RESERVES
Share based payments
Options
Performance rights
Series 1:
Consolidated
Consolidated
30 June 2019
No. of
options/rights
30 June 2018
No. of
options/rights
38,663,462
15,000,000
37,689,858
15,000,000
30 June 2019
30 June 2018
$
$
1,539,004
1,031,999
2,571,003
255,909
469,090
724,999
On 30 November 2018, the Group issued 8,571,429 unlisted share options to the noteholder as
consideration for the new convertible loan notes. The exercise price of the options is $0.21 per
share with an expiry date of 15 January 2021, which have fully vested.
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91 | P a g e
Notes to the Financial Statements
17. RESERVES (CONTINUED)
Series 2:
On 24 May 2019, the Group issued 18,652,175 unlisted share options to the noteholder as
consideration for restructuring the funding facility. The exercise price of the options is $0.08 per
share with an expiry date of 31 July 2022, which have fully vested.
The unlisted options issued during the year were valued using the Black-Scholes model. The fair
value of the options granted during the year ended 30 June 2019 was determined on the date of
grant using the following assumptions:
Grant date
Exercise price ($)
Expected volatility (%)
Risk-free interest rate (%)
Expected life (years)
Share price at this date ($)
Fair value per option ($)
Series 1
30 November 2018
0.21
95
2
3
0.145
0.080
Series 2
31 July 2019
0.08
100
1.13
3
0.036
0.0165
There were no additional performance rights issued during the year.
For the year ended 30 June 2019, the Group has recognised $1,846,004 (2018: $724,999) of share-
based payment expense in the income statement in relation to share options and performance
rights issued.
18. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES
The Board of Directors takes responsibility for managing financial risk exposures of the Group.
The Board monitors the Group’s financial risk management policies and exposures and approves
financial transactions. It also reviews the effectiveness of internal controls relating to commodity
price risk, counterparty credit risk, currency risk, liquidity risk and interest rate risk. The Board
meets monthly at which these matters are reviewed.
The Board’s overall risk management strategy seeks to assist the Group in meeting its financial
targets, while minimising potential adverse effects on financial performance. Its review includes
the use of hedging derivative instruments, credit risk policies and future cash flow requirements.
The Company’s principal financial instruments comprise cash, short term deposits and securities
in Australian listed companies. The main purpose of the financial instruments is to earn the
maximum amount of interest at a low risk to the company. The Company also has other financial
instruments such as trade debtors and creditors which arise directly from its operations.
Artemis Resources Limited Annual Financial Report – June 2019
92 | P a g e
Notes to the Financial Statements
18. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
The main risks arising from the Company’s financial instruments are interest rate risk, credit risk,
foreign exchange risk, commodity risk and liquidity risk. The Board reviews and agrees policies for
managing each of these risks and they are summarised below:
(i) Interest Rate Risk
The Company’s exposure to interest rate risk is the risk that a financial instrument’s value will
fluctuate as a result of changes in market interest rates and the effective weighted average
interest rate for each class of financial assets and financial liabilities.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates
on the following financial assets and liabilities:
FY2019
Carrying
Amount
Effect on profit before tax
Effect on pre-tax equity
+1%
-1%
+1%
-1%
Financial Assets
Cash and cash
equivalents1
Trade and other
receivables2
821,481
18,861
4,848
18,861
4,848
54,501
-
-
-
-
875,982
18,861
4,848
18,861
4,848
Financial liabilities
Trade and other
payables4
Financial Liabilities5
1,516,278
5,792,078
7,308,356
Total increase/(decrease)
-
-
-
-
(10,828)
(10,828)
8,033
(6,891)
(6,891)
(2,043)
(10,828)
(10,828)
8,033
(6,891)
(6,891)
(2,043)
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Financial Assets
Cash and cash
equivalents1
Trade and other
receivables2
Other financial
assets3
Financial
liabilities
Trade and other
payables4
Financial
Liabilities5
Notes to the Financial Statements
18. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
(i) Interest Rate Risk (continued)
FY2018
Carrying
Amount
Effect on profit before tax
Effect on pre-tax equity
+1%
-1%
+1%
-1%
27,048,303
270,483
(270,483)
270,483
(270,483)
1,470,953
430,730
-
-
-
-
-
-
-
-
28,949,986
270,483
(270,483)
270,483
(270,483)
7,446,797
3,914,024
11,360,821
-
-
-
-
-
-
-
-
-
270,483
-
(270,483)
-
270,483
-
(270,483)
Total increase/(decrease)
1 Cash and cash equivalents are denominated in both AUD and USD. At 30 June 2019, A$624,356 was
denominated in USD (30 June 2018: A$2,892,855).
2 Trade and other receivables are denominated in AUD and are not interest bearing.
3 Other financial assets are equity securities listed on ASX and are denominated in AUD and GBP. All financial
assets were liquidated in FY2019.
4 Trade and other payables at balance date are denominated mainly in AUD and are not interest bearing.
5 The convertible note has no interest coupon. Loan of $196,872 in FY2019 (2018: Nil) bears an interest rate
of 4.5% per annum.
(ii) Credit Risk
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting
in financial loss to the Company. The Company has adopted the policy of only dealing with credit
worthy counterparties and obtaining sufficient collateral or other security where appropriate, as
a means of mitigating the risk of financial loss from defaults.
The Company does not have any significant credit risk exposure to any single counterparty or any
group of counterparties having similar characteristics. The carrying amount of financial assets
recorded in the financial statements, net of any provisions for losses, represents the Company’s
maximum exposure to credit risk.
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94 | P a g e
Notes to the Financial Statements
18. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
(iii) Foreign Exchange Risk
The Company had the following United States dollar denominated assets and liabilities at year
end.
Consolidated
30 June 2019
US$
30 June 2018
US$
Cash
Cash and cash equivalents
Borrowings
Convertible Loan Note Facility1
1 The convertible note holder holds 5,000,000 (2018: 4,000,000) shares as collateral against this
liability
3,923,917
437,861
1,866,360
2,892,855
The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange
rate, with other variables held constant.
Net impact of strengthening/(weakening)
of AUD on USD assets/liabilities outlined
above
Change in
USD rate
Effect on profit
before tax
Effect on pre-
tax equity
FY2019
FY2018
(iv) Commodity Risk
+5%
-5%
+5%
-5%
248,542
(248,542)
77,158
(77,158)
248,542
(248,542)
77,158
(77,158)
The Company is affected by the price volatility of certain commodities especially changes in the
price of gold in the market. The following table shows the effect of price changes in gold, with
other variables held constant.
FY2019
FY2018
Change in year-
end price
Effect on profit
before tax
Effect on pre-
tax equity
+3%
-3%
+3%
-3%
13,806
(13,806)
-
-
13,806
(13,806)
-
-
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95 | P a g e
Notes to the Financial Statements
18. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
(v) Liquidity Risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility
through the use of bank loans, convertible notes and finance leases. Cash flows from financial
assets reflect management’s expectation as to the timing of realisation. Actual timing may
therefore differ from that disclosed. The timing of cash flows presented in the table to settle
financial liabilities reflects the earliest contractual settlement dates and does not reflect
management’s expectations that banking facilities will roll forward.
The following tables below reflect an undiscounted contractual maturity analysis for financial
liabilities.
FY2019
Within 1 year
1 to 5
years
Over 5
years
Total
Financial liabilities due for payment
Trade and other payables
Financial Liabilities
Total contractual outflows
Cash and cash equivalents
Trade and other receivables
Total anticipated inflows
Net outflow on financial instruments
1,516,278
5,792,078
7,308,356
821,481
54,501
875,982
(6,432,374)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,516,278
5,792,078
7,308,356
821,481
54,501
875,982
(6,432,374)
FY2018
Within 1 year
1 to 5
years
Over 5
years
Total
Financial liabilities due for payment
Trade and other payables
Financial Liabilities
Total contractual outflows
Cash and cash equivalents
Trade and other receivables
Financial assets
Total anticipated inflows
Net inflow on financial instruments
7,446,797
3,914,024
11,360,821
27,048,303
1,470,953
430,730
28,949,986
17,589,165
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,446,797
3,914,024
11,360,821
27,048,303
1,470,953
430,730
28,949,986
17,589,165
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96 | P a g e
Notes to the Financial Statements
18. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Management and the Board monitor the Group’s liquidity reserve on the basis of expected cash
flow. The information that is prepared by senior management and reviewed by the Board
includes:
(i) Annual cash flow budgets;
(ii) Monthly rolling cash flow forecasts.
(vi) Net Fair Value
The carrying amount of financial assets and financial liabilities recorded in the financial statements
represents their respective net fair values, determined in accordance with the accounting policies
disclosed in Note 1.
19. COMMITMENT FOR EXPENDITURE
The Group currently has commitments for expenditure at 30 June 2019 on its Australian
exploration tenements as follows:
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
Consolidated
30 June 2019
$
30 June 2018
$
2,326,211
5,726,334
4,202,758
12,255,303
2,644,580
6,212,995
4,622,701
13,540,276
The Company evaluates its tenements and exploration programme on an annual basis and may
elect not to renew tenement licences if it deems appropriate.
Artemis Resources Limited Annual Financial Report – June 2019
97 | P a g e
Notes to the Financial Statements
20. RELATED PARTY DISCLOSURES
(a) Refer to the Remuneration Report contained in the Directors’ Report for details of the
remuneration paid or payable to each member of the Group’s Key Management Personnel for the
year ended 30 June 2019. Key Management Personnel for the year ended 30 June 2019 comprised
the Directors, the Chief Executive Officer, General Manager Exploration and the General Manager
Operations.
(b) The total remuneration paid to Key Management Personnel of the Company and the Group
during the year are as follows:
Short term employee benefits
Share based payment
Superannuation
Consolidated
30 June 2019
$
30 June 2018
$
1,207,051
1,526,891
34,758
2,768,700
843,735
1,998,063
694
2,842,492
(c) Remuneration options and performance rights: As at 30 June 2019, the outstanding options
and performance rights that were granted in previous and current reporting periods comprised of
15,000,000 options and 6,000,000 performance rights. The 15,000,000 options for the Chief
Executive Officer were forfeited following his resignation on 6 May 2019. Further details are
contained in Note 23 to the financial statements.
(d) Share and option holdings: All equity dealings with directors have been entered into with terms
and conditions no more favourable than those that the entity would have adopted if dealing at
arm’s length.
(e) Related party transactions
ADK Mining Services1
Doraleda Pty Ltd2
Integrated CFO Solutions3
Minerva Corporate Pty Ltd4
Consolidated
30 June 2019
$
30 June 2018
$
109,379
300,000
120,000
48,335
577,714
220,700
250,727
129,000
-
600,427
1 Director fees and consulting fees paid to ADK Mining Services Pty Ltd, a company in which Mr Alex Duncan-Kemp has an interest.
2 Director fees and consulting fees paid to Doraleda Pty Ltd, a company in which Mr Edward Mead has an interest.
3 Company secretary fees and consulting fees paid to Integrated CFO Solutions, a company in which Mr Guy Robertson has an interest.
In 2019, these included fees of $36,000 (2018: $54,000) for accounting services.
4 Director fees and consulting fees paid to Minerva Corporate Pty Ltd, a company in which Mr Daniel Smith has an interest.
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98 | P a g e
Notes to the Financial Statements
21. EARNINGS PER SHARE
The calculation of basic earnings and diluted earnings per share at 30 June 2019 was based on the
loss attributable to shareholders of the parent company of $9,347,739 (2018: Profit $12,073,913):
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
Weighted average number of ordinary shares:
Used in calculating basic earnings per ordinary share
Dilutive potential ordinary shares
Used in calculating diluted earnings per share
22. AUDITOR’S REMUNERATION
Auditor of parent entity
Audit fees – HLB Mann Judd
Audit fees – Hall Chadwick
23. SHARE-BASED PAYMENT
Consolidated
30 June 2019
$
(1.44)
(1.44)
30 June 2018
$
2.22
2.02
No of Shares
No of Shares
649,035,055
-
649,035,055
544,638,771
52,688,858
597,327,629
Consolidated
30 June 2019
$
30 June 2018
$
40,000
269
40,269
-
36,528
36,528
Goods or services received or acquired in a share-based payment transaction are recognised as an
increase in equity if the goods or services were received in an equity-settled share-based payment
transaction or as a liability if the goods and services were acquired in a cash settled share-based
payment transaction.
For equity-settled share-based transactions, goods or services received are measured directly at
the fair value of the goods or services received provided this can be estimated reliably. If a reliable
estimate cannot be made the value of the goods or services is determined indirectly by reference
to the fair value of the equity instrument granted.
Transactions with employees and others providing similar services are measured by reference to
the fair value at grant date of the equity instrument granted.
Options issued to Key Management Personnel during the year are outlined in the remuneration
report.
Artemis Resources Limited Annual Financial Report – June 2019
99 | P a g e
Notes to the Financial Statements
23. SHARE-BASED PAYMENT (CONTINUED)
The following share-based payment arrangements were in place during the prior and current
financial year:
Instruments
Date granted
Expiry date
Options
Options
Options
Options
Performance
Rights
30 November
2017
31 January
2018
30 November
2018
24 May
2019
8 November
2017
30 June
2020
31 January
2021
15 January
2021
31 July
2022
30 September
2019
Movement in share-based arrangements on issue
(a) Options
Balance at beginning of year
Options granted during the year
Options forfeited/lapsed during the year
Options exercised during the year
Balance at end of year
Exercise
price
No. of
instruments
Fair value
at grant
date
0.44
6,000,000
0.45
5,439,858
0.21
8,571,429
0.03
0.01
0.08
0.08
18,652,175
0.02
NIL
15,000,000
0.09
Number of instruments
30 June 2019
30 June 2018
37,689,858
27,223,604
(26,250,000)
-
38,663,462
101,002,903
41,689,858
(309,913)
(104,692,990)
37,689,858
Options exercisable at end of year
38,663,462
37,689,858
(b) Performance rights
Number of instruments
30 June 2019
30 June 2018
Balance at beginning of year
Performance rights granted during the year
Balance at end of year
15,000,000
-
15,000,000
-
15,000,000
15,000,000
Artemis Resources Limited Annual Financial Report – June 2019
100 | P a g e
Notes to the Financial Statements
23. SHARE BASED PAYMENT (CONTINUED)
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the year:
Sign on fee for director, issued as shares
Options – directors
Options - chief executive officer
Performance rights – directors
Performance rights – employees
Options – convertible note holder
Options – other consultants
Consolidated
30 June 2019
$
675,000
295,375
(6,393)
487,854
75,055
1,991,793
-
3,518,684
30 June 2018
$
1,525,000
172,302
6,393
406,546
62,545
77,212
90,001
2,339,999
24. RECONCILIATION OF NET CASH USED IN OPERATING ACTIVITIES TO LOSS AFTER INCOME TAX
(Loss)/Profit after income tax
Depreciation
Exploration and project expenditure written off
Share based payments
Finance costs, non cash
Provision for diminution on value of investments
Net fair value loss on financial instruments designated
as fair value through profit or loss
Unrealised foreign exchange gain
Non-cash fee received on entering Novo Resources
Corp. joint venture
Loss/(profit) on sale of investments
Changes in current assets and liabilities during the
financial period:
Decrease/(increase) in receivables
Increase in inventories
Increase in trade and other payables
Net cash outflow from operating activities
Consolidated
30 June 2019
$
(9,347,739)
40,892
701,261
3,518,684
336,452
-
541,720
(222,882)
30 June 2018
$
12,073,913
10,406
202,445
2,339,999
-
316,087
-
(172,206)
-
(15,037,990)
70,150
(3,552,995)
168,995
(460,202)
57,864
(4,594,805)
(288,406)
-
671,715
(3,437,032)
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101 | P a g e
Notes to the Financial Statements
25. CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
FY2019
Consolidated
Opening balance
Net cash from financing activities
Non-cash restructuring fees issued to convertible loan
notes holders
Equity conversion
Changes in fair value
Other changes
Closing balance
Convertible
loan note
$
3,914,024
1,605,608
145,180
(783,770)
379,555
334,609
5,595,206
Short term
loan
$
-
196,876
-
-
-
-
196,876
FY2018
Consolidated
Opening balance
Net cash from/(used in) financing activities
Equity conversion
Changes in fair value
Closing balance
26. RESTATEMENT OF COMPARATIVE FIGURES
Convertible
loan note
$
2,265,965
4,026,409
(2,232,791)
(145,559)
3,914,024
Short term
loan
$
60,000
(60,000)
-
-
-
The Group recognised an error in its classification of development expenditure during the year.
Previously, the development expenditure was classified as exploration expenditure. The impact
on the comparative balances are as follows:
Previously reported:
Exploration, evaluation and development expenditure
Plant and equipment
After reclassification:
Exploration and evaluation expenditure
Development expenditure
Plant and equipment
Consolidated
30 June 2018
$
30 June 2017
$
40,474,892
-
40,474,892
7,839,090
1,161,615
9,000,705
28,761,826
11,713,066
-
40,474,892
6,299,352
2,693,353
8,000
9,000,705
Artemis Resources Limited Annual Financial Report – June 2019
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Notes to the Financial Statements
27. PARENT ENTITY DISCLOSURE
(a) Financial position
Total current assets
Total Non-Current Assets
Total Assets
Total current liabilities
Total Liabilities
Net Assets
Equity
Share capital
Reserves
Accumulated Losses
(b) Commitments
Exploration commitments
Not later than 12 months
Between 12 months and 5 years
30 June 2019
$
30 June 2018
$
1,524,772
15,823,288
17,348,060
7,166,151
7,166,151
28,471,293
36,635,439
65,106,732
6,496,174
6,496,174
10,181,909
58,610,558
81,438,336
2,571,003
(73,827,430)
10,181,909
79,127,087
724,999
(21,241,528)
58,610,558
255,055
47,870
302,925
81,900
68,250
150,150
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Notes to the Financial Statements
28. SUBSIDIARIES
Country of
Incorporation
Ownership
%
30 June 2019
30 June 2018
Parent Entity:
Artemis Resources Limited
Subsidiaries:
Fox Radio Hill Pty Limited
Karratha Metals Limited
KML No 2 Pty Limited
Armada Mining Pty Limited
Shearzone Mining Pty Limited
Western Metals Pty Limited1
Elysian Resources Pty Limited
Hard Rock Resources Pty Limited
Artemis Graphite Pty Ltd
Artemis Management Services Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
-
100
100
100
100
100
80
100
100
100
100
1 The assets, liabilities and the profit or loss of the non-controlling interest is immaterial
Consolidated
-
100
100
100
100
100
80
100
100
100
100
The parent entity with the Group is Artemis Resources Limited which is the ultimate parent entity
in Australia.
Transactions with subsidiaries
Balances and transactions between the Company and its subsidiaries, which are related parties of
the Company, have been eliminated on consolidation.
29. FINANCIAL INSTRUMENTS
The Directors consider that the carrying amounts of current receivables and current payables
(except for Note 15. Financial liabilities) are a reasonable approximation of their fair values.
30. COMMITMENTS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There are no contingent liabilities or contingent assets since the last annual reporting period.
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104 | P a g e
Notes to the Financial Statements
31. EVENTS SUBSEQUENT TO 30 JUNE 2019
On 31 July 2019, a total of 87,338,535 shares were issued under a Share Purchase Plan at a price
of $0.031 per share, raising $2,707,500 before costs. The Company also issued 16,500,000 options
to Directors (Exercise price: $0.08; Expiry date: 15 May 2022), 18,652,175 options to financiers
(Exercise price: $0.08; Expiry date: 31 July 2022), 10,000,000 options to underwriters (Exercise
price: $0.08; Expiry date: 31 July 2022) and 10,000,000 options to advisor (Exercise price: $0.08;
Expiry date: 31 July 2022).
On 16 July 2019, the Company signed binding agreement to acquire 100% of Rincon Resources
Ltd, which holds rights to three highly prospective Au-Cu projects in Western Australia. The
Company has paid a non-refundable exclusivity fee of $75,000. The Company will also issue a fully
paid ordinary shares with a total value of $2.7m which is conditional upon the completion of due
diligence by the Company. Upon completion of this transaction, Mr Zeffron Reeves will be
appointed as a Non-Executive director of the Company.
Other than as outlined above there are no currently no matters or circumstances that have arisen
since the end of the financial year that have significantly affected or may significantly affect the
operations the Group, the results of those operations, or the state of affairs of the Group in the
future financial years.
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105 | P a g e
Directors’ Declaration
1. In the opinion of the Directors of Artemis Resources Limited:
a. the accompanying financial statements and notes are in accordance with the Corporations Act
2001 including:
i. giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
performance for the year then ended; and
ii. complying with Australian Accounting Standards, the Corporations Regulations 2001,
professional reporting requirements and other mandatory requirements.
b. there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
c. the financial statements and notes thereto are in accordance with International Financial
Reporting Standards issued by the International Accounting Standards Board.
2. This declaration has been made after receiving the declarations required to be made to the
Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended
30 June 2019.
This declaration is signed in accordance with a resolution of the Board of Directors.
Edward Mead
Executive Director
27 September 2019
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106 | P a g e
INDEPENDENT AUDITOR’S REPORT
To the members of Artemis Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Artemis Resources Limited (“the Company”) and its
controlled entities (“the Group”), which comprises the consolidated statement of financial position
as at 30 June 2019, the consolidated statement of profit or loss and other comprehensive income,
the consolidated statement of changes in equity and the consolidated statement of cash flows for
the year then ended, and notes to the financial 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 2019 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report, which indicates that a material uncertainty exists
that may cast significant doubt on the entity’s ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter described in the Material
Uncertainty Related to Going Concern section, we have determined the matters described below
to be the key audit matters to be communicated in our report.
107 | P a g e
Key Audit Matter
How our audit addressed the key audit
matter
Capitalised Exploration and Evaluation Expenditure
Refer to Note 11.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources,
the Group
capitalises exploration and evaluation expenditure
and as at 30 June 2019 had a deferred exploration
and evaluation expenditure balance of $37,027,656.
the users’ understanding of
Exploration and evaluation expenditure was
determined to be a key audit matter as it is important
to
financial
statements as a whole and was an area which
involved the most audit effort and communication
with those charged with governance.
the
Our procedures included but were not
limited to:
- Obtained an understanding of the key
processes
with
management’s review of the carrying
value of exploration and evaluation
expenditure;
associated
- Considered the Directors’ assessment
of potential indicators of impairment in
addition
own
assessment;
to making
our
- Obtained evidence that the Group has
current rights to tenure of its areas of
interest;
- Considered the nature and extent of
planned ongoing activities;
- Substantiated a sample of expenditure
supporting
agreeing
to
by
documentation; and
Carrying Value of Development Expenditure
Refer to Note 12.
The Group has development expenditure of
$23,523,620 in relation to construction of the Radio
Hill Gold Recovery Circuit Processing Facility for the
Carlow Castle Project.
The company concluded there were impairment
indicators and an impairment assessment was
conducted under AASB 136 Impairment of Assets at
balance date. This involved a comparison of the
recoverable amount of the Carlow Castle Project
assets with their carrying amounts in the financial
statements.
The evaluation of the recoverable amount of these
assets is considered a key audit matter as it was
based upon a model which required significant
judgement in verifying the key assumptions supporting
the expected discounted future cash flows of the
Carlow Castle Project.
In addition, our audit focussed on the Group’s
assessment of the carrying amount of the
development expenditure as this is one of the most
significant assets of the Group.
- Examined the disclosures made in the
annual report.
Our procedures included but were not
limited to:
- Obtained an understanding of the
process associated with the
preparation of the model to assess the
recoverable amount of the Carlow
Castle Project;
- Critically evaluated management’s
methodology in the model and the
basis for key assumptions;
- Performed sensitivity analysis around
the key inputs in the model that either
individually or collectively would be
required for assets to be impaired and
considered the likelihood of such
movement in those key assumptions;
- Considered whether the assets
comprising the Radio Hill cash-
generating unit had been correctly
allocated;
- Considered the appropriateness of the
discount rate used in the model;
- Substantiated a sample of expenditure
incurred during the year by agreeing to
supporting documentation; and
- Examined the disclosures made in the
financial report.
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Valuation of Convertible Notes
Refer to Note 15.
The Group restructured its existing funding agreement
and entered into a second funding agreement with the
Riverfort Group during the year. The fair value of the
convertible notes at 30 June 2019 was $5,595,206.
The valuation of the convertible notes is considered a
key audit matter due to the complexity of accounting
for the variations on the convertible notes and
subsequent fair value measurement. The convertible
notes are also the Group’s largest current liability.
Provision for Mine Rehabilitation
Refer to Note 12.
The carrying value of the Group’s provision for
restoration and rehabilitation at balance date is
$1,413,123.
The provision for restoration and rehabilitation is a key
audit matter due to the significant judgement involved
in estimating costs which are planned to be incurred in
future years and the related timing of incurring those
costs.
Our procedures included but were not
limited to:
- Reviewed
financing
variations
arrangements.
the
the
arrangement
both
the new
the
and
financing
independent expert
- Obtained
terms of
on
valuation of the convertible notes.
- Considered whether the transaction
costs incurred for restructuring the
convertible notes have been accounted
for correctly under AASB 9 Financial
Instruments.
- Considered whether the change in the
fair value of the convertible notes had
been accounted for correctly under
AASB 9 Financial Instruments.
the
competence
Our procedures included but were not
limited to:
- Assessed
and
objectivity of management personnel
who prepared the costing estimates.
- Critically challenged the key estimates
and assumptions made in the costing
report and performed
sensitivity
analyses.
- Assessed the expected timing of the
restoration and rehabilitation costs in
the respective life of mine model.
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 2019, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
109 | P a g e
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
-
-
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
-
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
110 | P a g e
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2019.
In our opinion, the Remuneration Report of Artemis Resources Limited for the year ended 30 June
2019 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
27 September 2019
B G McVeigh
Partner
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ASX Additional Information
Additional information required by the Australian Stock Exchange Limited Listing Rules and not
disclosed elsewhere in this report. The information was prepared based on share registry processed
up to 25 September 2019.
Distribution of shareholders
The distribution of shareholdings as at 25 September 2019 was:
Spread of Holdings
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 + over
Totals
Holders
Securities
% of Issued Capital
183
871
658
1,845
703
4,260
57,967
2,732,579
5,341,962
72,804,631
668,442,461
749,379,600
0.01%
0.36%
0.71%
9.72%
89.20%
100.00%
The number of shareholders who hold less than a marketable parcel is 1736.
Substantial shareholders
The names of the substantial shareholders in the Company, the number of equity securities to which
each substantial holder’s associates have a relevant interest, as disclosed in substantial holding notices
given to the Company are:
Holders Name
No of shares
% of Issued Capital
Exchange Minerals Limited
47,614,711
6.35%
Artemis Resources Limited Interim Financial Report – June 2019
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ASX Additional Information
Top twenty (20) largest holders ordinary share
Top holders grouped report
Artemis Resources Limited
Security class: ARV - ORDINARY FULLY PAID SHARES
As at date:
Display top:
25-Sep-2019
20
Position
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
16
16
17
18
19
20
Holder Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
EXCHANGE MINERALS LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BATTLE MOUNTAIN PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
CYGNUS 1 NOMINEES PTY LTD
SORRENTO RESOURCES PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
DEUTSCHE BALATON AKTIENGESELLSCHAFT
BNP PARIBAS NOMS PTY LTD
MR JAY EVAN DALE HUGHES
INKESE PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
D & K CORPS INVESTMENTS PTY LTD
MR STEPHEN SEGAL &
MRS CAROL SEGAL
MR JAY HUGHES &
MRS LINDA HUGHES
RIUOHAURAKI LIMITED
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
LUCO PROPERTY GROUP PTY LTD
CURIOUS CAPITAL GROUP PTY LTD
Total
Total issued capital - selected security class(es)
Holding
70,102,587
68,206,131
47,614,711
38,801,538
24,500,000
23,523,647
21,061,347
17,039,557
15,750,000
14,010,529
12,500,000
9,199,873
8,000,000
7,250,000
5,692,528
5,000,000
5,000,000
% IC
9.35%
9.10%
6.35%
5.18%
3.27%
3.14%
2.81%
2.27%
2.10%
1.87%
1.67%
1.23%
1.07%
0.97%
0.76%
0.67%
0.67%
5,000,000
0.67%
3,665,870
2,750,000
2,720,248
2,500,000
0.49%
0.37%
0.36%
0.33%
409,888,566
749,379,600
54.70%
100.00%
Artemis Resources Limited Annual Financial Report – June 2019
113 | P a g e
ASX Additional Information
Unquoted securities
Number
13,000,000
Holders
3
+Class
Director employee rights expiry 30 September 2019.
2,000,000
6,000,000
5,439,858
8,571,429
3,923,913
1
3
1
1
2
Employee performance rights expiry 30 September 2019.
Unlisted options exercisable at 44 cents on or before 30 June 2020.
Unlisted options exercisable at 45.38 cents on or before 31 January 2021.
Unlisted options exercisable at 21 cents on or before 30 November 2021.
Convertible notes with a maturity date of 31 January 2020 which are
convertible into a maximum of 36,171,466 fully paid ordinary shares on the
terms announced on 15 January 2019, as amended by announcement dated
24 May 2019. Includes additional 100,000 convertible notes issued as a
restructure fee.
16,500,000
2
Unlisted Director Options exercisable at 8 cents and expiry date 15 May
2022
18,652,175
2
Convertible noteholder options exercisable to 8 cents a share and expiry 31
July 2022
20,000,000
2
Advisor options exercisable at 8 cents a share and expiry date 31 July 2022
Artemis Resources Limited Annual Financial Report – June 2019
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