AuKing Mining Limited
2022 Annual Report
Corporate Directory
AuKing Mining Limited
Board of Directors
Mr Asimwe Kabunga (Executive Co-Chair)
Ms Anna Nahajski-Staples (Non-Executive Co-Chair)
Mr Peter Tighe (Non-Executive Director)
Mr Ian Hodkinson (Non-Executive Director)
Mr Shizhou Yin (Non-Executive Director)
Chief Executive Officer
Mr Paul Williams
Company Secretary
Mr Paul Marshall
Head Office and Registered Office
Suite 2208, Level 22
127 Creek Street
Brisbane QLD 4000
Telephone: 07 3535 1208
Email: admin@aukingmining.com
Website: www.aukingmining.com
Auditors
BDO Audit Pty Ltd
Level 10, 12 Creek Street
Brisbane QLD 4000
Telephone: 07 3237 5999
Website: www.bdo.com.au
Share Registry
Link Market Services Limited
Level 21
10 Eagle Street
Brisbane QLD 4000
Telephone: 1300 554 474
Facsimile: 02 9287 0303
Website: www.linkmarketservices.com.au
Stock Exchange Listing
Australian Securities Exchange
ASX Code: AKN
AKNO Listed $0.25 30 June 2023 Options
Australian Business Number
29 070 859 522
Page 2
AuKing Mining Limited
2022 Annual Report
CONTENTS
Directors’ Report
Review of Operations
Directors and Officers
Financial Results
Future Developments, Prospects, Strategies and Business Risks
Remuneration Report
Auditor's Independence Declaration
Additional Stock Exchange Information
Annual Financial Report
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
4
19
21
23
25
32
33
36
37
38
39
40
60
61
Page 3
AuKing Mining Limited
2022 Annual Report
REVIEW OF OPERATIONS
Koongie Park Project
On 8 February 2021, the Company entered into an agreement with Anglo Australian Resources NL (now called Astral
Resources NL) (“AAR”) to earn up a 75% interest in the Koongie Park copper/zinc project (“Koongie Park”) situated in
the eastern Kimberley Region of northern Western Australia (“Koongie Park Earn-In”). The earn-in retains for AAR’s
benefit the rights to explore for and develop gold/platinum group metals deposits at Koongie Park.
Koongie Park Location, Tenure and Potential
The Koongie Park copper/zinc project is situated in the highly mineralised Halls Creek Mobile Belt which also hosts the
Savannah nickel project and the Nicholsons gold mining operation of Pantoro Limited. Koongie Park is located about
25kms south west of the regional centre of Halls Creek on the Great Northern Highway.
The tenure holding comprises an area of more than 500km2 covering over 40kms of the base metals prospective Koongie
Park Formation. Koongie Park has already been the subject of significant exploration drilling and analysis since the
1970’s, often in line with movements in commodity prices. Since its discovery the predominant focus of drilling has been
at the Sandiego and Onedin deposits.
The Koongie Park Project has been held by AAR since 1989 and last drilled in 2010. AAR has previously reported Mineral
Resource estimates for both the Sandiego and Onedin deposits at Koongie Park. Drilling and mining studies for base
metal deposits ceased in 2011 when their attention turned to gold exploration.
These types of base metal massive sulphide deposits associated with chemical, clastic and volcanic sediments, formed
during the Proterozoic age in tectonic active zones where ore fluids have produced multiple, large high-grade orebodies
in other terrains. The Koongie Park Project is underexplored and has the potential for a major discovery.
Outstanding Onedin Assay Results
In late February/early March 2022, AKN announced significant high-grade assay results from the seven (7) drill holes
from the Onedin drilling program at Koongie Park that was conducted between November and December 2021. These
holes were all diamond drillholes at the Onedin deposit, drilled specifically for the purpose of obtaining suitable drill core
samples for the proposed Onedin metallurgy testwork program. A total of 1433m of drilling was completed with these
holes, with a maximum depth of 243m at hole AORD006.
[For full details refer to ASX announcements dated 21 February 2022, 24 February 2022 and 2 March 2022]
All seven drill holes contained significant copper, zinc, silver and other mineralisation. Certain highlighted results are as
follows:
Hole AORD004
105.3m @ 1.94% Cu, 0.76% Zn, 0.70% Pb, 50g/t Ag and 106ppm Mo from 46m including:
11m @ 1.19% Cu, 1.28% Zn, 2.69% Pb, 4g/t Ag and 269ppm Mo from 99.6m
18.3m @ 9.32% Cu, 0.96% Zn, 0.48% Pb, 288g/t Ag and 89ppm Mo from 128.3m
16.6m @ 10.20% Cu, 1.03% Zn, 0.46% Pb, 316g/t Ag and 76ppm Mo from 130m and
2m @ 0.25% Cu, 2.55% Zn, 0.05% Pb, 2g/t Ag & 7ppm Mo from 76m
Hole AORD003
64m @ 0.97% Cu, 1.73% Zn, 2.52% Pb, 129g/t Ag, 0.38g/t Au and 569ppm Mo from 19m including:
31.6m @ 1.60% Cu, 2.85% Zn, 3.77% Pb, 258g/t Ag, 0.64g/t Au g/t and 0.10% Mo from 50.6m
7.5m @ 2.77% Cu, 1.11% Zn, 3.12% Pb, 121g/t Ag, 0.70g/t Au and 0.11% Mo from 57.7m
7.4m @ 0.86% Cu, 6.94% Zn, 3.89% Pb, 273g/t Ag, 0.78g/t Au and 0.116% Mo from 67m and
5.2m @ 3.07% Cu, 0.65% Zn, 6.66% Pb, 908g/t Ag, 0.87g/t Au and 0.195% Mo from 74.4m
18m @ 0.48% Cu, 2.05% Zn, 0/58% Pb, 82g/t Ag, 0.19g/t Au and 58ppm Mo from 172m including:
9.5m @ 0.66% Cu, 2.53% Zn, 0.62% Pb, 99g/t Ag, 0.31g/t Au and 74ppm Mo from 177.5m
Page 4
AuKing Mining Limited
2022 Annual Report
100ppm Mo cutoff zone
o 33.2m @ 1.54% Cu, 2.75% Zn, 3.69% Pb, 245g/t Ag, 0.62g/t Au & 0.11% Mo from 49m
Hole AORD005
66m @ 1.67% Cu, 17.57% Zn, 4.03% Pb, 94.68g/t Ag, 0.38g/t Au and 1718ppm Mo from 77m including:
49m @ 1.88% Cu, 19.06% Zn, 3.21% Pb, 73g/t Ag and 2312ppm Mo from 80m
8.7m @ 3.28% Cu, 22.71% Zn, 8.01% Pb, 190g/t Ag and 3776ppm Mo from 119m and
5m @2.70% Cu, 22.79% Zn, 12.78% Pb, 332g/t Ag and 0.85g/t Au from 135.5m
100ppm Mo cutoff zones
o 22.7m @ 1.51% Cu, 19.64% Zn, 4.82% Pb, 89g/t Ag, 0.49g/t Au & 4953ppm Mo from 105m
Figure 1 - Onedin cross-section diagram showing holes AORD003, AORD005 and AORC001
The significant features of the assay results from the seven Onedin drill holes include the following:
• More wide zones of high-grade near-surface Cu, Zn, and Ag across all holes, despite some of the holes being set
back from previous holes and intersecting the high-grade zones at greater depth;
•
•
Confirmation of significant mineralisation across the known Onedin deposit extending from the south-west of drill
holes AORD004, AOWB003 and AORC004 which previously reported substantial intersections; and
Further evidence of significant Mo mineralisation throughout the Onedin deposit.
Page 5
AuKing Mining Limited
2022 Annual Report
Koongie Park (Sandiego and Onedin) Resource Estimate Upgrade
On 7 April 2022, AKN announced that it had completed an upgrade of its existing JORC (2012) Mineral Resource Estimate
(MRE) at its Koongie Park copper/zinc project in respect of the Onedin and Sandiego deposits.
The Company has significantly increased its MRE by 30% and the new total resources estimate is as follows:
8.9Mt @ 1.01% Cu, 3.67% Zn, 0.16g/t Au, 32g/t Ag and 0.77% Pb.
AKN engaged CSA Global to undertake an independent MRE for the Onedin and Sandiego deposits. Full details of the
new estimates are set out below.
The considerable increases in the Koongie Park MRE are due largely to the following factors:
a) The results from AKN’s drilling program at both Onedin and Sandiego completed in late 2021;
b) The findings from a recently completed structural geology study at Onedin and Sandiego commissioned by AKN;
and
c) An overall improved understanding of the geological controls on mineralisation in this region.
Each of the above factors have provided the confidence to allow the updated Koongie Park MRE to be almost entirely
(97%) included in the Indicated Resource classification.
No provision has been made at this stage for the cobalt and molybdenum discoveries, pending further drilling and
assessment of the potential extent of these minerals across the two deposits.
2022 Drilling Program
AKN commenced its 2022 exploration drilling program at Koongie Park in May 2022 and completed the program at the
end of September. A total of 7,438m reverse circulation (RC) and diamond drilling was carried out across 40 holes (36
RC and 4 diamond) across the tenure package. The drilling program was focussed on the following target areas:
•
•
•
•
Emull;
Cosmo prospect;
Onedin and Sandiego – downhole electromagnetic (EM) survey targets; and
Sandiego North (near water bore ASWB001).
The Company designed this drilling program with the intention to expand the overall project resources – both by identifying
new project areas, and expanding the existing known resources at Sandiego and Onedin.
Emull
On 12 August 2022, AuKing confirmed a broad, near surface copper/zinc sulphide deposit at Emull, at its Koongie Park
Project.
The Company’s eleven-hole RC program for 1,912 metres at Emull found copper mineralisation that was mostly in the
primary zone as sulphides (chalcopyrite and sphalerite) and remains open at depth and along strike. These findings are
consistent with previous exploration conducted by Northern Star Resources and underpin the potential for a large bulk
tonnage open pit mining operation. Furthermore, significant magnetic anomalies exist to the north-west and to the south-
west of the main mineralised zone, which remain to be tested for a similar style of mineralization.
A summary of significant assays from the drilling at Emull includes:
EMRC22_001 13m @ 0.22% Cu, 0.03% Zn and 2g/t Ag from 146m
EMRC22_003
16m @ 0.23% Cu, 0.16% Zn and 9g/t Ag from 66m
11m @ 0.32% Cu, 1.07% Zn and 5g/t Ag from134m including:
o 2m @ 0.71% Cu, 5.29% Zn and 13g/t Ag from 137m and
o 1m @ 0.55% Cu, 9.83% Zn and 9g/t Ag from 138m
Page 6
AuKing Mining Limited
2022 Annual Report
EMRC22_006 5m @ 0.40% Cu, 2.83% Zn and 8g/t Ag from 32m including:
2m @ 0.58% Cu, 5.95% Zn and 11g/t Ag from 33m
15m @ 0.30% Cu, 0.03% Zn and 6g/t Ag from 185m and
16m @ 0.26% Cu, 0.46% Zn and 6g/t Ag from 212m
EMRC22_007
41m @ 0.34% Cu, 0.52% Zn and 6g/t Ag from 122m including:
2m @ 1.23% Cu, 0.02% Zn and 9g/t Ag from 126m
24m @ 0.28% Cu, 0.04% Zn and 2g/t Ag from 167m
9m @ 0.33% Cu, 0.06% Zn and 3g/t Ag from 194m including:
o 2m @ 0.54% Cu, 0.05% Zn and 6g/t Ag from 200m and
o 2m @ 1.23% Cu, 0.02% Zn and 9g/t Ag from 237m
EMRC22_010
16m @ 0.17% Cu, 0.25% Zn and 6g/t Ag from 84m
EMRC22_011
21m @ 0.19% Cu, 0.18% Zn and 5g/t Ag from 34m
[Refer AKN release to ASX on 14 November 2022 for further details]
Figure 2 – Emull Deposit showing location of drill holes and potential mineralised extensions to the north-west.
Page 7
AuKing Mining Limited
2022 Annual Report
Cosmo
On 24 August 2022, AKN confirmed significant intersections of near-surface copper, zinc and silver mineralisation at its
Cosmo prospect, south-west of the Onedin deposit, at Koongie Park. The first nine holes of the Company’s 13-hole RC
program over 2,418m at Cosmo discovered mineralisation across different areas of the prospect, creating the potential
to establish a significant additional near-surface deposit area that is only 500m to the south-west of the Onedin deposit.
The Company’s drilling program was focused on certain magnetic anomalies identified in previous magnetic surveying at
Cosmo. Despite the proximity to Onedin, the Cosmo area had largely been untested by exploration and drilling activities
previously.
Subsequent drilling at Cosmo was unsuccessful and as a result, further review and assessment of this prospect is needed
before more drilling is conducted at Cosmo.
Sandiego/Onedin
During September 2022, diamond drilling was carried out on certain DHEM (downhole electro-magnetic) conductor
sources at Onedin and Sandiego that were identified by the Company’s downhole geophysics survey in the year.
Unfortunately, the drilling was unable to detect any significant zones of mineralisation in these target areas.
Sandiego North
On 30 November 2021, AKN reported the discovery of an additional zone of copper mineralization approximately 700m
to the north of the main Sandiego deposit. The reported results were as follows:
Hole ASWB001 (Shallow hole (102m) a water bore at Sandiego):
5m @ 1.37% Cu from 50m; and
2m @ 1.71% Cu from 85m
The two intervals of copper mineralisation in water bore ASWB001 displayed the now typical Sandiego geochemical
association with elevated cobalt and Ce/La/Y grades. This allowed a largely untested target zone to be delineated
between the main area of drilling at Sandiego and the new discovery. The new discovery was essentially along strike of
the main mineralised zone and had only previously been tested by a handful of shallow RC and RAB holes to very limited
depth.
An RC drillhole was completed by AKN nearby ASWB001 in late September 2022 and further significant copper
mineralization has been identified as follows:
ASNRC22_001
6m @ 1.02% Cu from 81m;
10m @ 0.49% Cu from 93m; and
2m @ 0.68% Cu from 136m
This drill hole was set 40m to the west of ASWB001 and drilled back towards that water bore hole. The hole was designed
to test mineralization and add definition to the dip of that mineralized zone. Due to a heavy rainfall event further RC drilling
was curtailed in this area.
The results from ASNRC22_001 are very encouraging in that they confirm the extension of near-surface copper
mineralization that was first identified at the water bore late last year. Further significant drilling will be required around
these drill holes and along the 700m target zone back to the main Sandiego deposit.
[See AKN release to ASX on 30 November 2022 for further details]
Significant Cobalt Mineralisation Identified at Sandiego
AKN has previously identified significant areas of cobalt mineralisation that were intersected by drilling carried out more
than ten years ago and reported to the ASX by AAR (refer ASX announcement 19 October 2021). In addition, as part of
its own drilling program at Sandiego last year, AKN reported the intersection of zones of cobalt mineralisation across the
various holes that were drilled.
A detailed review of the historic drilling database at Sandiego indicated that a significant number of drill holes had not
been assayed for cobalt mineralisation prior to 2010. AKN’s exploration team was able to identify approximately 400
Page 8
AuKing Mining Limited
2022 Annual Report
remnant drill core samples still being stored at its Halls Creek facility from ten historic drill holes that were in a condition
suitable for further assaying. These samples were despatched for assay and highlighted results are as follows:
60m @ 1.79% Cu, 5.96% Zn, 58g/t Ag & 0.1% Co from 191m (SRCD07) including 12m @ 2.95% Cu, 9.80%
Zn, 76g/t Ag & 0.24% Co from 214m
21m @ 2.55% Cu, 0.18% Zn, 17g/t Ag & 0.13% Co from 289m (SRCD07) including 7m @ 3.79% Cu, 0.15%
Zn, 20g/t Ag & 0.27% Co from 298m
18.4m @ 6.22% Cu, 1.02% Zn, 8g/t Ag & 0.07% Co from 108.6m (SRCD03) including 2m @ 1.52% Cu,
0.04% Zn, 7g/t Ag & 0.12% Co and
8.87m @ 0.18% Cu, 9.41% Zn, 38g/t Ag & 0.14% Co from 156m (SND9A)
[Refer ASX announcement dated 26 April 2022 for full results]
Eight out of the ten drill holes that were re-assayed by AKN intersected anomalous cobalt mineralisation, with the
highlighted results shown above.
A strong spatial coincidence is noted between the higher-grade copper mineralisation and the associated cobalt assays,
suggesting a genetic relationship. Drilling results indicates a broad distribution of anomalous to high-grade Co
mineralisation across the Sandiego deposit. It is important to note that AKN only sampled those remnant core materials
that were physically available and appeared viable for re-assay and with a sole focus on mineralised zones and the
periphery of those zones.
Therefore, the true distribution of cobalt across the Sandiego mineralised zone remains unclear due to the absence of
cobalt assays in much of the early drilling.
AKN believes that these recent assays provide a strong foundation for ongoing exploration initiatives focused on
identifying additional cobalt mineralisation at Sandiego. The Company’s latest Mineral Resource Estimate does not
include Co mineralisation and AKN intends to progress additional work for the inclusion of this aspect in future resource
estimates.
Onedin Metallurgical Testwork Program
The Company’s metallurgical testwork program on the near-surface Onedin ores commenced in early 2022 and continued
to make progress throughout the year.
Significant early activities of the testwork program included the conduct of sequential recovery analyses and also
completion of a mineralogy scan (“mineral liberation analysis” or “MLA”) on certain indicative samples from Onedin. AKN
has confirmed that although more detailed testwork is required (on larger samples and across a broader range of samples
at Onedin), the initial testwork has established the following:
a) The existence of secondary carbonate species in the Onedin mineralised zone; and
b) The potential to achieve recovery rates (>75%) for the Cu, Zn and other minerals that are hosted within those
carbonates using non-acid leaching.
These are significant initial findings for AKN as this was the fundamental basis for the Company to proceed with Koongie
Park acquisition from the outset.
Another feature of the Onedin material that has been observed in early testwork is that, in the heavily weathered material
(from depths of approx. 0-85m), a significant amount of the lower grade Cu, Zn and other mineralisation appears to be
dominated by the existence of Fe oxide/hydroxide material. It should be noted that traditional acid-leaching techniques
show low recovery rates on these materials. The distribution and extent of this mineralisation style across this section of
the Onedin deposit is yet to be established, but AKN’s technical group is focusing on establishing a recovery pathway for
this material because it would otherwise be discarded as overburden in an open pit mining operation. AKN believes the
solution to recovering commercial quantities of Cu, Zn and other minerals from the Fe oxide/hydroxide material will be
achieved from a combination of the following factors:
• Pre-treatment reagents and reductants, prior to the ammonia leaching process (all of which is part of the AmmLeach®
process;
• Time over which the treatment agents are applied; and
• operational conditions under which the agents are applied to the material.
With these considerations in mind, as a result of further testwork, two significant results have been achieved, namely:
Page 9
AuKing Mining Limited
2022 Annual Report
• An ammonia leach in conjunction with certain reagents has shown that some copper (and, to a lesser extent, zinc) is
releasing from the iron oxide/hydroxide material that is prevalent in the upper sections of the Onedin oxide zone; and
• Confirmation of a supergene blanket beneath the oxide zone that contains high grade copper oxide minerals (eg:
cuprite and native copper).
After the initial testwork results, AKN developed a further set of initial tests designed to achieve better recoveries from
these weathered oxide areas of the Onedin deposit. The tests were conducted on seven different samples taken from
the Onedin diamond drilling core samples and a series of different processes were applied to those samples including:
• Both acid and ammonia leaching
• Different processing reagents;
• A range of sample grain sizes; and
• 24 and 48 hour testing periods.
The overall purpose of these further tests was to narrow the scope of AKN’s proposed major testwork program to be
implemented in 2023.
As noted, a focus of the latest round of testing has been on the near-surface oxide materials at Onedin that appear to be
dominated by the existence of Fe oxide/hydroxide material due to the heavy weathering profile of this mineralized zone.
A summary of the key results that AKN has identified from the latest testwork (utilizing the ammonia leaching process)
are as follows:
• Excellent Cu recoveries (>90%) have been seen in some of the oxide samples;
• Cu and Zn recoveries have not been affected in some samples by the size fraction of the material tested – in other
words, the coarser grain sized material generally saw a similar Cu and Zn rate of recovery compared to the finer,
ground material;
•
In some of the lower grade Cu samples, there appears to be a more optimal size fraction from a recovery perspective;
• The Cu recoveries appear to increase significantly over time – comparing 24 vs 48 hour testing. This leaves open the
possibility that optimal Cu recoveries are possible over longer processing times; and
• Zn recoveries are generally not as high as the observed Cu recoveries, due mainly to the likelihood that the Zn is
mostly trapped within the weathered Fe oxide/hydroxide material. However, in terms of the observations around size
fractions and processing times, it appears possible that higher Zn recoveries can still be achieved.
The current testing program has also identified heap leaching as the most likely form of metallurgical processing at least
for the Onedin oxide material. In that context, as the testwork observed significant silica gel formation after treatment by
acid leaching agents, the prospect of utilizing acid in a final processing solution has now almost been entirely discounted.
In the course of conducting this latest testwork program, AKN identified certain other findings including the following:
• The test results were not consistent across the mineralized oxide and transition zones at Onedin. A key intended
outcome of the future detailed testwork program will be to create a metallurgical solution that has more consistent
results; and
•
In the transition ore zone at Onedin there appears to be very high carbonate content – while the occurrence of
carbonates was always predicted, some attention will be required with future testwork that addresses the optimal
recovery processes for material that is heavily dominated by carbonates.
AKN lodged an R&D Tax Incentive application with AusIndustry in respect of the Onedin metallurgical testwork program
during the year. That application achieved registration and a refund of $556,911 was received from the ATO in relation
to research works completed during AKN’s 2021 Financial Year.
Page 10
AuKing Mining Limited
2022 Annual Report
Maiden Emull Resource Estimate
On 1 December 2022 AKN announced a maiden mineral resource estimate (MRE) for the Emull deposit which
significantly increased the overall mineral resources at Koongie Park. The Emull MRE comprises:
12.2Mt @ 0.27% Cu, 0.38% Zn, 0.09% Pb, and 4.9g/t Ag.
AKN’s total MRE for Koongie Park now stands at 21.1 million tonnes (Mt) after these further 12.2Mt were added to the
Company’s existing 8.9Mt resources at the Sandiego and Onedin deposits to the east. Total metal content now comprises
121,800 tonnes of copper; 372,600 tonnes of zinc; 46,000 ounces of gold; 11 million ounces of silver and 79,300 tonnes
of lead.
Emull’s MRE has been classified as an Indicated and Inferred resource and was based upon 99 drill holes totaling
11,051m, comprising 88 historic reverse circulation (RC) drill holes by Northern Star Resources (ASX:NST) between
2003 and 2012 for 9,141m, and 11 RC holes by AKN during 2022 for 1,910m. Follow-up extensional resource drilling
both to the north-west and the south-west will be a key feature of proposed drilling in 2023 and support an upgrading of
the resource classification.
The Emull deposit extends to a depth of 280 vertical metres and is currently modelled with a strike length of approximately
600m, with mineralisation still open at depth and along strike to the north-west.
The Emull Mineral Resource is reported at a 0.15% copper cutoff grade and is summarised on page 17.
[See AKN release to ASX on 1 December 2022 for further details]
Increase in Koongie Park JV Interest
AKN announced to ASX on 4 February 2022 that it had completed the second earn-in milestone of $1.5M under the
Koongie Park Earn-in and then held a 75% interest in the Koongie Park JV.
As a consequence of additional exploration expenditure being incurred during the year, AKN expanded its interest in the
Koongie Park project to 80%. Furthermore, AAR advised AKN of its intention not to contribute to budgeted expenditure
for the 22/23 financial year. This will likely see AKN’s ownership of Koongie Park increase further.
Mining Study Commences at Sandiego/Cazaly Resources MoU
Wave International was engaged in December 2022 to assist with the preparation of a study (“Scoping Study”) which will
consider all aspects of a proposed mine development and is expected to be completed by the end of March 2023. The
Scoping Study will form a “base case” scenario that involves a combined open pit and underground mining operation at
Sandiego and will include the following:
• Preliminary mine planning
• Project design
• Preliminary processing flowsheets
• Concept layouts
• Mechanical equipment requirements
• Capex/Opex estimates
• High level economic assessment.
In addition, consideration will be given to nearby deposits with similar mineralogy that are likely to process via flotation
techniques – these include the following options:
• Additional resources (at depth) at Sandiego
• Emull deposit
• Mt Angelo North (Cazaly asset – see MoU details below)
• Bommie (Cazaly asset – see MoU below)
The intention with these additional deposits is to create an optimal economic mine development case utilising deposits
that are all situated within a radius of approximately 10kms from the Sandiego deposit.
Page 11
AuKing Mining Limited
2022 Annual Report
There is already a substantial body of available study and technical data for Sandiego, based on the prefeasibility work
undertaken several years ago by AAR. This material will be referred to for the purposes of the Scoping Study wherever
possible.
At this stage, the Onedin deposit will continue to operate under a separate metallurgical testwork program and not be
included in the Scoping Study. In the event of a successful process being established for the near-surface Onedin oxide
and transition ores, the process is likely to be different to the planned flotation circuit at Sandiego.
On 19 December 2022 the Company signed a Memorandum of Understanding (“MoU”) with Cazaly Resources Limited
(ASX:CAZ) agreeing to collaborate for the development of their respective mining deposits in the Halls Creek region
utilising a common processing facility centred on the Sandiego deposit.
Cazaly holds two significant deposits situated no more than 10kms from the Sandiego deposit –Mt Angelo North and
Bommie (See Figure below). These deposits both have published Resource Estimates as follows (See CAZ release to
ASX on 2 December 2022):
Mt Angelo North – 1.72Mt @ 1.4% Cu, 1.4% Zn and 12.3g/t Ag
Bommie – 95Mt @ 0.27% Cu
Figure 3 Locations of Cazaly Resources’ tenures, nearby Sandiego
There are strong indications that the Mt Angelo North and Bommie deposits could have metallurgical characteristics that
are consistent with the Sandiego deposit – thereby making these additional deposits extremely complementary to a
proposed flotation processing flowsheet at Sandiego.
AKN and Cazaly have agreed to make available all relevant technical data to support the Scoping Study under the MoU,
which contemplates a more formal commercial arrangement between the companies pending positive outcomes from the
Study exercise.
Tanzanian Acquisition
On 19 October 2022, in a transformational move for the Company, AKN announced the acquisition of a 100% interest in
six projects in Tanzania. Four of the projects are prospective for uranium (Manyoni, Mkuju, Itigi and Magaga) and the
other two are prospective for copper (Mpanda and Karema).
The acquisition was by way of issuance of shares and options in AKN and completion occurred on 30 January 2023.
The principal vendor is Tanzanian born Perth based entrepreneur, Mr Asimwe Kabunga, who joined the Board of AKN
as Co-Chair in October.
Page 12
AuKing Mining Limited
2022 Annual Report
The key focus of early activity for AuKing in 2023 will be a detailed review and assessment of the available Manyoni
project data that formed the basis of the 2010 resource estimate and then to use that exercise for two purposes:
• Firstly, to publish an upgraded resource estimate for Manyoni to JORC 2012 classification; and
• Define the key target areas for a detailed drilling and exploration program at Manyoni.
At Mkuju (nearby the world-class Nyota uranium project), previous work in the area included, airborne radiometrics,
ground scintillometer surveys, soil and grab sampling and auger drilling.
AuKing’s initial exploration program for Mkuju has been designed to systematically cover the anomalies that were
identified from airborne radiometrics and other anomalies identified from sampling. Therefore the first pass of exploration
will include systematic ground spectrometer surveys and systematic auger drilling.
On 31 January 2023 AuKing announced that it had completed the Tanzanian acquisition, with all conditions precedent
having been satisfied.
Figure 4 Locations of Tanzanian uranium and copper projects
Corporate Activities
Proposed Koongie Park Acquisition
On 5 April 2022, AKN announced that it had entered into an agreement with AAR to progress the acquisition of the
following existing interests:
a)
b)
25% participating interest in the Koongie Park Joint Venture (allowing AKN to achieve a 100% ownership interest
in the project); and
The gold and platinum group elements (PGEs) rights held in respect of the Koongie Park tenures.
The proposed AAR acquisition would have secured for AKN a 100% interest in all the base metals, gold, silver, PGEs
and other minerals across the entire Koongie Park tenure package.
The purchase price payable by AKN to secure these rights was a total of A$6M payable in three instalments:
• $3M cash in May 2022;
• $1.5M in AKN shares to be issued following shareholder approval on or before 30 June 2022; and
• $1.5M cash by 31 October 2022.
Page 13
AuKing Mining Limited
2022 Annual Report
Certain other features of the proposed acquisition involved the following:
• Completion of the purchase was subject to AKN securing sufficient funding to enable it to complete the first $3M
payment to AAR, such condition to be satisfied on or before 16 May 2022;
• The shares to be issued to AAR were to be issued at a price that is calculated by reference to the 20-day VWAP for
AKN’s shares on the ASX prior to the date of issue (proposed to be immediately after AKN’s AGM to be held in May
2022);
• AAR agreed to a voluntary restriction of their shares for a three month period from the date of issue; and
• AKN had the right to elect to defer payment of the final cash component to AAR until 31 March 2023, but on the basis
that the final payment is then increased to $2M.
The Company was seeking a fully subscribed rights issue entitlement offer (“Offer”) – thereby raising an estimated $3.5M
in funds, most of which would have been directed towards payment of the first $3M cash instalment to AAR. Unfortunately,
the Offer was only successful in securing approximately $376,000 in applications from existing shareholders, leaving a
substantial shortfall of nearly $3.1M under the Offer. On 25 May 2022 the Company received a notice from Vert Capital
exercising its rights to terminate its underwriting obligations in respect of the Offer shortfall. As a result of Vert’s withdrawal
as underwriter of the Offer shortfall, AKN gave notice to AAR of its intention not to proceed with the AAR Acquisition
Agreement.
Capital Raising
In May/June 2022, the Company sought to raise a total $7.1M by way of the following capital raising activities:
c)
d)
A two-tranche Placement totalling $3.6M to sophisticated and professional investors through the issue of new
shares at an issue price of $0.14 per share (Placement); and
A non-renounceable rights issue to eligible shareholders, on the basis of one (1) new fully paid ordinary share
for every three (3) shares held at an issue price of $0.14 per share (New Share), to raise approximately $3.5M
(before costs) (Offer).
In the case of both the Placement and the Offer, free-attaching options (of the same class as AKN’s existing ASX-listed
options) (“Options”) were issued on the basis of one (1) new Option for every three (3) New Shares applied for. The
Placement also proceeded in two tranches namely, first tranche issuing 18,822,412 New Shares immediately and a
second tranche of 7,000,000 New Shares.
Both tranches of the Placement were successfully completed although it should be noted that, due to the difficult prevailing
market conditions, while the second tranche of the Placement (7,000,000 New Shares) was completed, there were free-
attaching options made available on the basis of three (3) new Options for every five (5) applied for (as opposed to the
originally proposed one Option for every three shares applied for).
The Offer was only successful in securing approximately $376,000 in applications from existing shareholders, leaving a
substantial shortfall of nearly $3.1M under the Offer. On 25 May 2022 the Company received a notice from the underwriter
(being Vert Capital) exercising its rights to terminate its underwriting obligations in respect of the Offer shortfall.
As a result of Vert’s withdrawal as underwriter of the Offer shortfall, AKN gave notice to AAR of its intention not to proceed
with the AAR Acquisition Agreement (as noted above).
In October 2022, after announcement to the ASX of the proposed Tanzanian acquisition, the Company successfully
completed a proposed two-tranche Placement totaling $3.5M to sophisticated and professional investors through the
issue of new shares at an issue price of $0.10 per share (Placement). In the case of both tranches of the Placement,
free-attaching options (Options) were issued on the basis of one (1) new Option for every two (2) New Shares applied
for. The Options are exercisable at 10c on or before 31 September 2025.
Tranche 1 of the Placement was completed in October, giving rise to the issue of 13,740,000 New Shares at 10c each
and 6,870,000 Options. Tranche 2 of the Placement is scheduled to be effected after financial close of the Tanzanian
acquisition has occurred. A further 21,260,000 New Shares and 10,630,000 will be issued under Tranche 2.
Page 14
AuKing Mining Limited
2022 Annual Report
Issue of Director and Employee Incentive Options
In accordance with approvals obtained from the Company’s shareholders and pursuant to the terms of the Option
Incentive Plan that was also approved at the AGM in May 2022, the following incentive options were issued to Directors
and employees of AKN during the year:
• 3,500,000 options exercisable at 17c on or before 31 May 2025 to the Directors; and
• 2,700,000 options exercisable at 11c on or before 31 May 2025 to certain employees of the Company.
Unmarketable Parcels Sale Facility
On 29 September 2022, the Company announced a facility to enable shareholders who hold an Unmarketable Parcel to
sell their Shares without having to act through a broker or pay brokerage or handling fees. This facility was completed in
November with 979 small holdings being sold (representing a total 466,280 shares).
The sale of these Unmarketable Parcels will be beneficial to AKN, as it is expected to reduce the administrative costs
associated with maintaining a large number of small shareholdings on AKN's share register.
Competent Persons’ Statements
The information relating to Exploration Results as outlined above is extracted from previous ASX announcements made
by the Company. These reports are available to view on the Company’s website www.aukingmining.com. This report was
issued in accordance with the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. The Company confirms that it is not aware of any new information or data that materially
affects the information included in the original market announcement. The Company confirms that the form and context
in which the Competent Person’s findings are presented have not been materially modified from the original market
announcements.
Annual Mineral Resource Statement
In accordance with ASX Listing Rule 5.21, the Company reviews and reports its Mineral Resources at least annually. The
date of reporting is 31 December 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.
The Company during the financial year has reported a JORC 2012 resource estimate for the Koongie Park project
(Sandiego and Onedin) of 8.9Mt @ 1.01% Cu, 3.67% Zn, 0.16g/t Au, 32g/t Ag and 0.77% Pb, details of which are set
out below:
Page 15
AuKing Mining Limited
2022 Annual Report
Onedin Mineral Resource Estimate and Metal Tonnes
Zone
Classification
Cu
Dominant
Zn
Dominant
Indicated
Inferred
Indicated
Inferred
Resource Total and Grades
Zone
Classification
Cu
Dominant
Zn
Dominant
Indicated
Inferred
Indicated
Inferred
Tonnes
(Mt)
1.5
-
3.3
-
4.8
Tonnes
(Mt)
1.5
-
3.3
Copper
(%)
1.1
-
0.5
-
0.7
Copper
(tonnes)
16,500
-
16,500
Zinc (%)
0.6
-
4.3
-
3.2
Zinc
(tonnes)
9,000
-
141,900
-
-
-
Gold
(g/t)
0.2
-
0.1
-
0.1
Gold
(oz)
9,600
-
10,600
-
Total Metal Tonnes
33,000
150,900
20,200
Silver
(g/t)
47
-
34
-
38
Silver
(Moz)
2.27
-
3.61
-
5.88
Lead (%)
1.2
-
1.0
-
1.1
Lead (tonnes)
18,000
-
33,000
-
51,000
Note:
(1) Reported tonnes and grade are rounded
(2) Reporting cut-off grades of 0.4% Cu and 1% Zn have been applied to the Onedin deposit
Sandiego Mineral Resource Estimate and Metal Tonnes
Cu
Dominant
Zn
Dominant
Classification
Indicated
Inferred
Sub Total
Indicated
Inferred
Sub Total
Resource Total and Grades
Classification
Cu
Dominant
Zn
Dominant
Indicated
Inferred
Sub Total
Indicated
Inferred
Sub Total
Total Metal Tonnes
Tonnes
(Mt)
1.7
0.3
2.0
2.0
0.1
2.1
4.1
Tonnes
(Mt)
1.7
0.3
2.0
2.0
0.1
2.1
Copper
(%)
2.3
1.6
2.2
0.6
0.2
0.6
1.4
Copper
(tonnes)
39,100
4,800
43,900
12,000
Zinc (%)
0.8
3.0
1.1
7.3
6.1
7.3
4.3
Zinc
(tonnes)
13,600
9,000
22,600
146,000
200
6,100
12,200
56,100
152,100
174,700
Gold
(g/t)
0.3
0.2
0.3
0.1
0.1
0.1
0.2
Gold
(oz)
16,400
1,900
18,300
6,400
300
6,700
25,000
Silver
(g/t)
18
5
16
35
10
34
25
Silver
(Moz)
0.98
0.05
1.03
2.25
0.03
2.28
3.31
Lead (%)
0.2
0.0
0.1
0.7
0.1
0.7
0.4
Lead (tonnes)
3,400
0
3,400
14,000
100
14,100
17,500
Note:
(1) Reported tonnes and grade are rounded
(2) Reporting cut-off grades of 0.8% Cu and 3% Zn have been applied to the Sandiego deposit
The information in this report that relates to Mineral Resources at the Koongie Park Project (Sandiego and Onedin) is
based on information compiled by Mr David Williams who is a member of the Australian Institute of Geoscientists. Mr
Williams is a Principal Consultant Geologist (Brisbane) of CSA Global and has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the activity which they are 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 Williams consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
During the financial year the Company also reported a JORC 2012 resource estimate for the Koongie Park project (Emull)
of 12.2Mt @ 0.27% Cu, 0.38% Zn, 0.09% Pb, and 4.9g/t Ag, details of which are set out below:
Page 16
AuKing Mining Limited
2022 Annual Report
Emull Mineral Resource Estimate and Metal Tonnes
December 2022 Mineral Resource Estimate (0.15% Cu Cut-off)
Tonnage
Mt
0.26
0.34
1.8
2.4
Tonnage
Mt
0.04
0.05
9.7
9.8
Tonnage
Mt
0.29
0.39
11.5
12.2
Indicated Mineral Resource
Pb
%
0.16
0.17
0.14
0.14
Ag
g/t
5.4
7.0
6.6
6.6
Cu
t
700
1,000
5,600
7,300
Inferred Mineral Resource
Pb
%
0.05
0.04
0.08
0.08
Ag
g/t
3.1
3.4
4.6
4.5
Cu
t
100
100
25,200
25,400
Total Mineral Resource
Pb
%
0.14
0.15
0.09
0.09
Ag
g/t
5.2
6.6
4.9
4.9
Cu
t
800
1,100
30,800
32,700
Zn
t
1,800
2,300
10,400
14,500
Zn
t
100
100
32,300
32,500
Zn
t
1,900
2,400
42,700
47,000
Zn
%
0.72
0.68
0.57
0.60
Zn
%
0.23
0.18
0.33
0.33
Zn
%
0.66
0.61
0.37
0.38
Cu
%
0.28
0.29
0.31
0.30
Cu
%
0.24
0.25
0.26
0.26
Cu
%
0.28
0.28
0.27
0.27
Pb
t
400
600
2,400
3,400
Pb
t
7,400
7,400
Pb
t
400
600
9,800
10,800
Ag
koz
50
80
390
510
Ag
koz
10
1,420
1,430
Ag
koz
50
80
1,810
1,940
Type
Oxide
Transitional
Fresh
Total
Type
Oxide
Transitional
Fresh
Total
Type
Oxide
Transitional
Fresh
Total
The information in this Report that relates to the Mineral Resource Estimate for Emull is based on information compiled
by Mr Shaun Searle who is a Member of the Australasian Institute of Geoscientists. Mr Searle is an employee of Ashmore
Advisory Pty Ltd and independent consultant to AuKing Mining Limited. Mr Searle has sufficient experience, which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken
to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for the Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Mr Searle consents to the inclusion in this report of the matters based
on this information in the form and context in which it appears.
In completing the review for the period ended 31 December 2022, the historical resource factors were reviewed and found
to be relevant and current. The Koongie Park project has not been converted to an active operation yet and hence no
material resource depletion has occurred for the review period.
Material Changes and Resource Statement Comparison
The completion of the updated 2012 JORC resource at Koongie Park (Sandiego and Onedin) and the maiden Emull
resource (as shown above) are the only revisions to the Mineral Resource estimates during the review period from 1
January 2022 to 30 December 2022. The information in this Annual Report that relates to Mineral Resources was
prepared and first disclosed under the JORC Code 2012 Edition. The Company is not aware of any new information or
data that materially affects the information as previously released and all material assumptions and technical parameters
underpinning the estimates continue to apply and have not materially changed.
Governance Arrangements and Internal Controls
AKN has ensured that the Mineral Resources quoted are subject to good governance arrangements and internal controls.
The Mineral Resources reported have been generated by suitably qualified personnel who are experienced in best
practices in modelling and estimation methods, and AKN has also undertaken reviews of the quality and suitability of the
underlying information used to determine the resource estimate.
Page 17
AuKing Mining Limited
2022 Annual Report
Annual Review Competent Persons Statement
The information in this Annual Report that relates to the mineral resources and ore reserves statement as a whole has
been reviewed and approved by Mr Ian Hodkinson who is a member of the Australian Institute of Geoscientists and the
Society for Geology Applied to Mineral Deposits. Mr Hodkinson is a non-executive director of AuKing Mining Limited and
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to
the activity which they are 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 Hodkinson consents to the inclusion
in the report of the matters based on his information in the form and context in which it appears.
Page 18
AuKing Mining Limited
2022 Annual Report
DIRECTORS AND OFFICERS
The following persons were directors of AuKing Mining Limited (‘AKN’ or ‘the Company’) during the whole of the financial
period and up to the date of this report, unless stated:
Current Directors
Mr Asimwe Kabunga
Executive Co-Chair, BSc (Mathematics and Physics)
(Appointed 19 October 2022)
Asimwe Kabunga is a Tanzanian born Australian entrepreneur with multiple interests in mining and IT businesses around
the world.
Mr Kabunga has extensive experience in the mining industry, logistics, land access, tenure negotiation and acquisition,
as well as a developer of technology businesses. Mr Kabunga has been instrumental in establishing the Tanzania
Community of Western Australia Inc., and served as its first President. Mr Kabunga was also a founding member of Rafiki
Surgical Missions and Safina Foundation, both NGOs dedicated to helping children in Tanzania.
Mr Kabunga has been a director of the following ASX listed companies in the prior 3 years:
Lindian Resources Limited (appointed June 2017)
Resource Mining Corporation (appointed May 2022)
Volt Resources Limited (appointed August 2017)
Ms Anna Nahajski-Staples (Appointed 1 October 2022)
Non-Executive Co-Chair, BA Bus, F Fin, ACIS, GAICD
Ms Nahajski-Staples is an investment banker, public company director and manager, with nearly 30 years’ experience
(15 years in mining) representing over half a billion dollars in global transactions.
Currently, Perth-based Ms Nahajski-Staples is Executive Director of Paloma Investments and Founding Director of
copper-gold explorer Larvotto Resources and Nevada-focused Moneghetti Minerals. She was also a Founding Director
of New Zealand-focused gold explorer Siren Gold.
She is a Fellow of Finsia, a graduate of the Governance Institute of Australia (2009) and the Australian Institute of
Company Directors (2007) and studied accounting at Harvard University (1993) before receiving a Bachelor of Business
Administration with a scholarship from the University of Washington.
Ms Nahajski-Staples has been a director of the following ASX listed companies in the prior 3 years:
Larvotto Resources Limited (appointed November 2020)
Mr Peter Tighe (Appointed 9 June 2021)
Non-Executive Director
Mr Tighe started his working career in the family-owned JH Leavy & Co business, which is one of the longest established
fruit and vegetable wholesaling businesses in the Brisbane Markets at Rocklea and has been trading since the late 1800s.
As the owner and managing director of JH Leavy & Co, Mr Tighe expanded the company along with highly respected
farms and packhouses that have been pleased to supply the company with top quality fruit and vegetables for
wholesale/export for over 40 years. JH Leavy & Co is considered one of the most successful businesses operating within
the Brisbane Markets.
Mr Tighe has been a director of Brisbane Markets Limited (BML) since 1999. BML is the owner of the Brisbane Markets®
site and is responsible for its ongoing management and development of its $350m asset portfolio. As the proprietor of the
site, BML has over 250 leases in place including selling floors, industrial warehousing, retail stores and commercial
offices. BML acknowledges its role as an economic hub of Queensland, facilitating the trade of $1.5 billion worth of fresh
produce annually, supporting local and regional businesses of the horticulture industry. As a Board member Mr Tighe
has held roles in various sub-committees which include Chairman of Safety and Tenant Advisory Committee, BML
Strategy Investment Committee, and Legal and Compliance Committee.
In 2016 the JH Leavy & Co business was sold but Mr Tighe has continued as the CEO of Global Fresh Australia, trading
as JH Leavy & Co, to ensure a successful transition of ownership.
He has not been a Director of any other Australian listed company in the last three years.
Page 19
AuKing Mining Limited
2022 Annual Report
Mr Ian Hodkinson
Non-Executive Director
(Appointed 9 June 2021)
Mr Hodkinson is a Registered Professional Geoscientist (RPGeo) in the fields of Mining and Mineral Exploration with over
40 years of experience in exploration, metalliferous mining and project development, in both Africa and Australia. Mr
Hodkinson has a bachelor’s degree in Geology and Geography from the University of London and a Master of Science
in Mineral Exploration and Mining Geology from the University of Leicester in the UK. He is a long-standing member of
the Australian Institute of Geoscientists (AIG) and the Society for Geology Applied to Mineral Deposits (SGA).
Mr Hodkinson’s experience and ability to report as a Competent Person (CP) covers a broad spectrum of mineral
commodities including base metals (copper, lead and zinc), precious metals (gold and silver), nickel/cobalt and
tin/tungsten across both underground and open-pit operations. He has extensive experience in the project development
phase with a particular focus on resources/reserves and geometallurgical and geotechnical investigations. He has been
the senior site geologist on numerous operational mine sites including Eloise, Mt Leyshon, Hadleigh Castle and Mungana
as well as having Australia-wide metalliferous exploration experience.
He has not been a Director of any other Australian listed company in the last three years.
Mr ShiZhou Yin (Appointed 9 June 2021)
Non-Executive Director
Mr. Yin is a Chinese national without any foreign permanent residence, holds a Master of Professional Accounting degree
and is a Chinese Certified Public Accountant and a Senior Accountant. From September 1994 to September 2010, Mr.
Yin served successively as Accountant of Beijing No. 2 Water Pipe Factory, Audit Manager and Audit Partner of Yuehua
Certified Public Accountants Firm, and Senior Partner of Zhongrui Yuehua Certified Public Accountants Co., Ltd. From
October 2010 to May 2011, Mr Yin served as Chief Financial Officer of JCHX Mining Management Co., Ltd. From May
2011 to April 2017, Mr Yin served as Chief Financial Officer and Secretary of the Board of Directors of JCHX Mining
Management Co., LTD (Shanghai Stock Exchange Code: 603979).
From April 2017 Mr Yin has been Vice President, Chief Financial Officer and Secretary of the Board of JCHX Group Co.,
Ltd. Mr. Yin has been the chairman of the Board of Supervisors of JCHX Mining Management Co., Ltd (Shanghai Stock
Exchange Code: 603979) since May 2017.
Mr Yin has been an Independent Director of:
Beijing Century Real Technology Co.,Ltd. (Shenzhen Stock Exchange Code: 300150) since September 2018;
Beijing Yiqiao Shenzhou Technology Co., LTD. (which is to be listed on Growth Enterprise Market (“GEM”) of
Shenzhen Stock Exchange) since March 2020; and
previously, from October 2009 to March 2015, Dalian East New Energy Development Co., Ltd. (Shenzhen Stock
Exchange Code: 300125).
He has not been a Director of any other Australian listed company in the last three years.
Interests in the shares and options of the Company
As at the date of this report, the interests of the Directors in the shares and options of AuKing Mining Limited are shown
in the table below:
Director
Ordinary
Shares
Options
Asimwe Kabunga
36,000,000
18,000,000
Anna Nahajski-Staples
128,205
1,000,000
Peter Tighe
Ian Hodkinson
ShiZhou Yin *
2,816,889
-
9,425,092
500,000
500,000
500,000
* Shares are held by Bienitial International Industrial Co Ltd. Mr Yin has the capacity to control the voting of the shares held by Bienitial International Industrial
Co Ltd.
Page 20
AuKing Mining Limited
2022 Annual Report
Former Directors
Dr Mark Elliott (resigned 1 October 2022)
Non-Executive Chairman, Dip Appl Geology, PhD, FAICD, FAusIMM(CP Geol), FAIG
Dr Elliott is a Chartered Professional geologist with over 45 years’ experience in economic geology, exploration, mining,
project development and in corporate management roles as Chairman and Managing Director for several ASX-listed
resource companies.
COMPANY SECRETARY
Mr Paul Marshall was the Secretary of AuKing Mining Limited throughout the period and until the date of this report.
Paul Marshall
Company Secretary and Chief Financial Officer, LLB, ACA
Paul Marshall is a Chartered Accountant. He holds a Bachelor of Law degree, and a post Graduate Diploma in Accounting
and Finance. He has 30 years professional experience having worked for Ernst and Young for ten years, and
subsequently twenty years spent in commercial roles as Company Secretary and CFO for a number of listed and unlisted
companies mainly in the resources sector. He has extensive experience in all aspects of company financial reporting,
corporate regulatory and governance areas, business acquisition and disposal due diligence, capital raising and company
listings and company secretarial responsibilities.
PRINCIPAL ACTIVITIES
The principal activity of the Company and its controlled entities (‘Consolidated Entity’) during the period was mineral
exploration. There were no significant changes in the nature of the Consolidated Entity’s principal activity during the
period.
DIVIDENDS PAID OR RECOMMENDED
There were no dividends paid or recommended during the period (2021: $nil).
FINANCIAL RESULTS
Capital structure
Shares and Options on issue at 31 December 2022
At 31 December 2022 the Company had 117,843,707 ordinary shares and 55,941,380 options on issue.
Shares and Options issued after year end
On 31 January 2023 AKN issued 60,000,000 ordinary shares and 30,000,000 options exercisable at 20c on or before 30
September 2025 to the vendors of the Tanzanian projects.
AKN also issued to Vert Capital Pty Ltd and clients a total of 5,000,000 new shares and 10,000,000 options (exercisable
at 20c on or before 30 September 2025) in recognition of the introduction of these project interests to AKN and assistance
in securing the acquisition.
Treasury policy
The Consolidated Entity does not have a formally established treasury function. The Board is responsible for managing
the Consolidated Entity’s currency risks and finance facilities. The Consolidated Entity does not currently undertake
hedging of any kind.
Page 21
AuKing Mining Limited
2022 Annual Report
Liquidity, funding and going concern
As at 31 December 2022 the Consolidated Entity had cash reserves of $1,656,292 and net current assets of $1,377,530.
The Consolidated Entity requires further capital to fund future exploration activity and meet other necessary corporate
expenditure.
The ability of the Consolidated Entity to continue as a going concern is principally dependent upon one or more of the
following:
•
•
the ability of the Company to raise additional capital in the future; and
the successful exploration and subsequent exploitation of the Consolidated Entity’s tenements.
These conditions give rise to material uncertainty which may cast significant doubt over the Consolidated Entity’s ability
to continue as a going concern.
The directors believe that the going concern basis of preparation is appropriate due to the following reasons:
• To date the Consolidated Entity has funded its activities through issuance of equity securities, and it is expected that
the Consolidated Entity will be able to fund its future activities through further issuances of equity securities; and
• The directors believe there is sufficient cash available for the Consolidated Entity to continue operating based on the
Company’s cash flow forecast.
Should the Consolidated Entity be unable to continue as a going concern, it may be required to realise its assets and
extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the
financial statements. This financial report does not include any adjustments relating to the recoverability and classification
of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary
should the Consolidated Entity be unable to continue as a going concern.
Operating Results
Revenue
As an exploration company, AuKing Mining Limited does not generate any recurring income.
Expenses
The Consolidated Entity’s main expenses compared to the prior period are as follows:
Employment and consultancy expenses
Depreciation expense
Costs related to the Tanzania transaction
Costs related to the Koongie Park transaction
Other expenses
Finance costs
2022
$
1,073,750
38,939
89,208
-
1,143,326
-
2021
$
841,787
13,666
-
97,922
703,740
688,180
Total expenses during the year
2,345,223
2,345,295
Excluding finance costs and costs related to the Tanzanian and Koongie Park transactions, which are one-off in nature
and will not be incurred moving forward, expenses increased by 45% on the prior year.
This cost increase was commensurate with the scale up in activities compared to the prior year, with the Consolidated
Entity completing its relisting process and recommencing operational activities in June 2021.
The Company expects a similar operating cost structure for the 2023 year, with some additional costs attributed to the
new Tanzanian projects.
OPTIONS
As at the date of this report there were 95,941,380 options on issue.
Page 22
AuKing Mining Limited
2022 Annual Report
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the year AKN entered into an agreement to acquire of a substantial portfolio or tenures in Tanzania that are
prospective for uranium and copper development opportunities. AuKing proposed to acquire all of the issued shares in
Australian-incorporated 92 U Pty Ltd (92 U). 92 U is the legal and beneficial owner of all the shares in two Tanzanian
companies – 92 U Tanzania Limited and Monaco Copper Limited. These entities in turn, own various Prospecting
Licences (PL) and PL applications. Under the terms of the acquisition, completion cannot occur under the vendors have
secured the grant of certain PLs which have been prioritized due to prospectivity. The remaining applications will be
processed for grant in due course. Consideration for the acquisition was 60,000,000 AKN ordinary shares and 30,000,000
options exercisable at $0.20 on or before 30 September 2025.
The acquisition was completed on 31 January 2023.
AFTER BALANCE DATE EVENTS
On 31 January 2023 AKN completed the purchase of various prospective uranium and copper licences in Tanzania. The
purchase price was discharged by AKN through the issue of 60,000,000 ordinary shares and 30,000,000 options
exercisable at 20c on or before 30 September 2025.
AKN also issued to Vert Capital Pty Ltd and clients a total of 5,000,000 new shares and 10,000,000 options (exercisable
at 20c on or before 30 September 2025) in recognition of the introduction of these project interests to AKN and assistance
in securing the acquisition.
FUTURE DEVELOPMENTS, PROSPECTS, STRATEGIES AND BUSINESS RISKS
Tanzania
AKN intends to take an aggressive approach towards its exploration program in Tanzania, summarized as follows:
Mkuju – sampling and ground spectrometer surveys; follow up field sampling and auger drilling and trenching
Manyoni – prepare initial 2012 JORC resource estimate, review existing data and identify additional information
needed to carry out further drilling to expand existing resources
Itigi/Magaga – develop initial sampling programs
Mpanda/Karema – initial site access, soil sampling, review of available historic data.
Koongie Park
Various project development activities at Koongie Park will continue during 2023, highlighted by the following:
Completion of the mining scoping study in March 2023 for the proposed development of a mining operation at
Sandiego, which may include additional resources from Cazaly Resources’ nearby projects
Conduct of a detailed metallurgical testwork program on the Onedin oxide and transition ores, based upon the
successful initial tests carried out during 2022.
The results from both of these programs could lead to additional studies and testwork.
In addition, AKN intends to continue its focus on exploration opportunities across its Eastern Kimberley tenure package
during the course of 2023.
Material Business Risks
Exploration and Evaluation Risks
The future value of the Company will depend on its ability to find and develop sufficient resources that are economically
recoverable within the Koongie Park and Tanzanian tenure portfolios. Mineral exploration and development is inherently
highly speculative and involves a significant degree of risk. There is no guarantee that economic mineralisation will be
found, and if found, that it will be economic to extract these resources or that there will be commercial opportunities
available to monetise these resources.
The circumstances in which a mineral deposit becomes or remains commercially viable depends on a number of factors.
These include the particular attributes of the deposits, such as size, grade, metallurgy, strip ratios and proximity to
Page 23
AuKing Mining Limited
2022 Annual Report
infrastructure as well as external factors such as supply and demand. This, along with other factors such as maintaining
title to tenements and consents, successful design construction, commissioning and operating of projects and processing
facilities may result in projects not being developed, or operations becoming unprofitable.
Furthermore, while the Company has confidence in the future prospects of the tenements, should those tenements not
prove profitable and the Company is unable to secure new exploration areas and resources, there could be a material
adverse effect on the Company’s prospects and its future success.
Tenure Risks
The Company’s future exploration and development activities are dependent upon the grant, or as the case may be, the
maintenance of appropriate licences, concessions, leases, permits and regulatory consents which may be withdrawn or
made subject to limitations. The maintaining of tenements, obtaining renewals, or getting tenements granted, often
depends on AKN being successful in obtaining the required statutory approvals for its proposed activities and that the
licences, concessions, leases, permits or consents it holds will be renewed as and when required.
Even though the Company intends to commit significant exploration expenditure there is risk associated with the
Company’s ongoing ability to retain the portfolio in its current form. Furthermore, no assurance that tenement renewals
will be given as a matter of course and there is no assurance that new conditions will not be imposed in connection with
any renewal.
Access Risks
There are various restrictions operating to exclude, limit or impose conditions upon the Company’s ability to conduct
activities on parts of the tenements that the Company will hold an interest in. These restrictions include:
•
•
•
•
exclusions from pursuing exploration activities on certain areas of Commonwealth land;
requirements arising from Native Title legislation and claims;
requirements arising from state legislation relating to heritage, culture and objects; or
access procedures and compensation requirements in relation to privately held land.
As such, there is a risk one or more of these access issues may prevent or delay the Company from implementing its
intended activities which may thereby adversely affect the Company’s prospects.
ENVIRONMENTAL ISSUES
In the conduct of exploration activities at Koongie Park, the Company is subject to compliance with various environmental
and traditional owner cultural heritage regulations. The Company is not aware of any circumstances where a breach of
these obligations may have occurred.
On 17 November 2021, the Company announced that it had adopted the World Economic Forum’s “Environment, Social
and Governance” (“ESG”) framework and instructed management to set up an impact measurement plan for each
sustainability area. These areas include governance, anti-corruption practices, ethical behaviour, health and safety, GHG
emissions, land use, ecological sensitivity, water consumption, diversity and inclusion, pay equality and economic
contribution. To ensure that AKN can measure, monitor, and report on its ESG progress, the Company has engaged
impact monitoring technology platform Socialsuite to streamline the outcomes measurement and ongoing ESG reporting
process. These reports will appear quarterly in the Company’s future Quarterly Activities Reports to ASX.
Page 24
AuKing Mining Limited
2022 Annual Report
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for Directors and Key Management Personnel of the Company.
Remuneration Policy
The performance of the Company depends upon the quality of its Directors and Executives. To prosper, the Company
must attract, motivate and retain highly skilled Directors and Executives.
Remuneration Committee
The Board does not have a Remuneration and Nomination Committee. The full Board is responsible for determining and
reviewing compensation arrangements for the Directors and the Executive team.
The Board assesses 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.
Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe
benefits. It is intended that the manner of payments chosen will be optimal for the recipient without creating undue cost
for the Company.
Remuneration structure
It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and
Executive team by remunerating Directors and other Key Management Personnel fairly and appropriately with reference
to relevant employment market conditions for similar companies.
To assist in achieving this objective, the Board considers the nature and amount of Directors’ and Officers’ emoluments
alongside the Company’s operational performance, specifically considering their success in:
the identification of prospective tenements;
subsequent design and execution of exploration programs;
negotiating joint venture arrangements on terms favourable to the Company;
investigating other potential acquisition opportunities and negotiating the completion of those acquisitions;
expanding the level of mineral resources under the control of the company;
carrying out exploration programs in a timely and cost effective manner; and
liaising with stockbrokers, investment banks and market participants generally.
The expected outcomes of the remuneration structure are the retention and motivation of key Executives, the attraction
of quality management to the Company and performance incentives which allow Executives to share the rewards of the
success of the Company.
In accordance with best practice corporate governance, the structure of Non-Executive Director remuneration and
Executive Officers and Senior Management remuneration is separate and distinct.
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and
retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
The Constitution of AuKing Mining Limited and the ASX Listing Rules specify that the Non-Executive Directors are entitled
to remuneration as determined by the Company in the Annual General Meeting to be apportioned among them in such
manner as the Directors agree and, in default of agreement, equally. The maximum aggregate remuneration currently
approved by shareholders for non-executive Directors’ fees is for a total of $250,000 per annum.
If a Non-Executive Director performs extra services, which in the opinion of the Directors are outside the scope of the
ordinary duties of the Director, the Company may remunerate that Director by payment of a fixed sum determined by the
Directors in addition to or instead of the remuneration referred to above. Non-Executive Directors are entitled to be paid
travel and other expenses properly incurred by them in attending Director's or General Meetings of the Company or
otherwise in connection with the business of the Company.
Executive remuneration
The Company aims to reward Executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Company and so as to:
reward Executives for company and individual performance against targets set by reference to appropriate
benchmarks;
align the interests of Executives with those of shareholders;
link reward with the strategic goals and performance of the Company; and
ensure total remuneration is competitive by market standards.
Page 25
AuKing Mining Limited
2022 Annual Report
The remuneration of Executives may from time to time be fixed by the Board. As noted above, the Board’s policy is to
align Executive objectives with shareholder and business objectives by providing a fixed remuneration component and
offering long-term incentives. The level of fixed remuneration is set so as to provide a base level of remuneration which
is both appropriate to the position and is competitive in the market.
Fixed remuneration is reviewed annually by the Board, and the process consists of a review of both the Company’s
operational performance and individual performance, relevant comparative remuneration in the market and where
appropriate, external advice provided by executive remuneration consultants.
In relation to the payment of bonuses, options and other incentive payments, discretion is exercised by the Board, having
regard to the overall performance of the Company and the performance of the individual.
Employment contracts
Non-Executive Co-Chair Arrangements
The Company entered a service arrangement with Ms Anna Nahajski-Staples as Non-Executive Co-Chair of the
Company commencing from 1 October 2022. The key terms of the arrangement during the financial year were:
Ongoing contract – no fixed term;
Fee of $50,000 per annum plus statutory superannuation;
1,000,000 director incentive options exercisable at $0.17 on or before 31 May 2025;
No retirement benefits
Executive Co-Chair Arrangements
The Company entered a service arrangement with Mr Asimwe Kabunga as Non-Executive Co-Chair of the Company
commencing from 19 October 2022. The key terms of the arrangement during the financial year were:
Ongoing contract – no fixed term;
Fee of $240,000 per annum, reduced to $15,000 per month until completion of the Tanzanian transaction;
3 month notice period;
No retirement benefits
Non-Executive Director Arrangements
The Company has entered service arrangements with Mr Peter Tighe, Mr Ian Hodkinson and Mr ShiZhou Yin as Non-
Executive Directors of the Company commencing from 9 June 2021. The key terms of the arrangement are:
Ongoing contract – no fixed term;
Fee of $35,000 per annum
No retirement benefits
Non-Executive Director Consulting Arrangement
The Company has entered into a consultancy agreement dated 16 February 2021 with Cornubian Resources Pty Ltd, an
entity associated with the Ian Hodkinson. The agreement provides that Cornubian will procure the services of Mr
Hodkinson, on a as-needed basis, in the role of Senior Geological Consultant of the Company.
Under the terms of the Hodkinson Consultancy Agreement, Cornubian will receive consultancy fees calculated on a
service rate of $1,350.00 per day. The Company is also obliged to reimburse Cornubian for certain reasonable expenses
including travel and accommodation incurred in the provision of the services. The Hodkinson Consultancy Agreement
may be terminated by the Company immediately with cause (on the grounds of inappropriate conduct) and by either party
with 1 months’ notice (without cause).
Chief Executive Officer
The Company entered into an executive services agreement with Paul Williams to serve as Chief Executive Officer of the
Company. Mr Williams’ appointment in the role of Chief Executive Officer commenced on 9 June 2021. The agreement
provides that Mr Williams will be paid an annual remuneration (inclusive of statutory superannuation) of $300,000.
Page 26
AuKing Mining Limited
2022 Annual Report
The agreement may be terminated by the Company immediately with cause (e.g. serious misconduct, breach of the
agreement, criminal offence or bankruptcy) and by 6 months’ notice (without cause). Mr Williams may terminate the
agreement by 3 months’ notice in writing.
Company Secretary and CFO
The Company Secretary and CFO, Mr Paul Marshall, is engaged on an on-going consultancy style agreement for the
provision of services as company secretary and chief financial officer at a rate of $52,000 per annum. Services are
invoiced monthly based on services provided. The contract provides for a three-month notice period.
(a) Details of Directors and other Key Management Personnel
Directors
Asimwe Kabunga
Anna Nahajski-Staples
Peter Tighe
Ian Hodkinson
ShiZhou Yin
Executive Co-Chair (appointed 19 October 2022)
Non-Executive Co-Chair (appointed 1 October 2022)
Non-Executive Director (appointed 9 June 2021)
Non-Executive Director (appointed 9 June 2021)
Non-Executive Director (appointed 9 June 2021)
Former Directors
Mark Elliott
Key Management Personnel
Non-Executive Chairman (resigned 1 October 2022)
Paul Williams
Paul Marshall
CEO (from 9 June 2021) (Managing director until 9 June 2021)
Company Secretary and CFO
(b) Remuneration of Directors and other Key Management Personnel
Short Term
Post-Employment
Share-based
Payments
Salary &
Fees
Consulting
Fees
Other
Superan-
nuation
Retirement
benefits
Options
Total
Performance
Related %
% consisting
of equity
December 2022
Directors
A Kabunga
36,429
A Nahajski-Staples
12,500
P Tighe
35,000
-
-
-
I Hodkinson
35,000
42,525
S Yin
35,000
Former Directors
M Elliott
50,000
Key Management Personnel
P Williams
P Marshall
273,710
52,000
-
-
-
-
529,639
42,525
-
-
-
-
-
-
-
-
-
-
1,313
-
-
-
-
26,290
-
27,603
-
-
-
-
-
-
-
-
-
-
36,429
10,272
24,085
14,682
49,682
14,682
92,207
14,682
49,682
-
43%
30%
16%
30%
-
43%
30%
16%
30%
54,200
104,200
52%
52%
13,581
313,581
6,790
58,790
4%
12%
4%
12%
128,889
728,656
Page 27
AuKing Mining Limited
2022 Annual Report
December 2021
Directors
M Elliott
P Tighe
33,667
19,639
-
-
I Hodkinson
19,639
29,979
S Yin
19,639
Former Directors
H Peng
Q Wang
-
-
P Williams (1)
15,879
Z Yang
-
Key Management Personnel
P Williams (2)
149,782
P Marshall
28,167
-
-
-
-
-
-
-
286,412
29,979
Short Term
Post-Employment
Salary &
Fees
Consulting
Fees
Other
Superan-
nuation
Retirement
benefits
Share-based
Payments
2021 fee
equity settled
(3)
Total
Performance
Related %
%
consisting
of equity
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23,437
12,074
15,701
-
51,212
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,667
19,639
49,618
19,639
15,900
15,900
13,250
13,250
120,113
159,429
71,555
83,629
-
165,483
17,875
46,042
238,693
606,296
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Notes
1
2
3
Paul Williams was engaged as Managing Director up until 9 June 2021.
Paul Williams was engaged as CEO effective from 9 June 2021.
2021 fee equity settled represents the gross value of remuneration for services in the 2021 year that were settled in shares.
Former Director Remuneration – Fees Foregone
During the 2021 financial year (up until the date of readmission on the ASX) and prior years, all Key Management
Personnel deferred payment for their fees until the Company’s financial position had improved. As part of the ASX
readmission and capital raising process, Key Management Personnel entered into an agreement with the Company to
receive ordinary shares (at an issue price of $0.20 per share) in lieu of unpaid remuneration. The total amounts owing,
settled by shares issued, and gain on extinguishment of financial liability were as follows:
Huaisheng Peng
Qinghai Wang
Paul Williams
Zewen Yang
Paul Marshall
Remuneration
owing at 15 June
2021
$
114,900
95,750
424,532
263,702
69,875
968,759
Shares issued as
consideration
Shares issued as
consideration
#
420,000
350,000
1,114,445
635,485
262,150
2,782,080
$
84,000
70,000
222,889
127,097
52,434
556,420
Gain on
extinguishment of
financial liability
$
30,900
25,750
201,643
136,605
17,441
412,339
(c) Shares issued on exercise of remuneration options or performance shares
There were no shares issued on the exercise of compensation options or performance shares during the period.
Page 28
AuKing Mining Limited
2022 Annual Report
(d) Director and Key Management Personnel Equity Holdings
Director/Key Management Personnel shareholdings (number of shares)
December 2022
Directors
Asimwe Kabunga 1
Anna Nahajski-Staples
Peter Tighe
Ian Hodkinson
ShiZhou Yin 2
Former Directors
Mark Elliott
Key Management Personnel
Paul Williams
Paul Marshall
Opening
Balance
Recognised on
Appointment
Purchased
Sold
Options
Converted
Derecognised
on Resignation
Closing
Balance
-
-
-
128,205
1,883,500
-
9,425,092
35,750
1,667,981
287,170
-
-
-
-
-
-
-
-
933,389
-
-
11,917
-
-
13,299,493
128,205
945,306
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
128,205
2,816,889
-
9,425,092
(47,667)
-
-
-
1,667,981
287,170
(47,667)
14,325,337
Notes
1
2
36,000,000 shares were issued to Asimwe Kabunga after year end on 31 January 2023 as consideration for sale of his interest in the Tanzanian projects.
9,425,092 shares are held by Bienitial International Industrial Co Ltd. ShiZhou Yin discloses these shares in his capacity a representative of Bienitial International Industrial Co Ltd.
Page 29
AuKing Mining Limited
2022 Annual Report
Director/Key Management Personnel options (number of options)
December 2022
Directors
Asimwe Kabunga 1
Anna Nahajski-Staples
Peter Tighe
Ian Hodkinson
ShiZhou Yin
Former Directors
Mark Elliott
Key Management Personnel
Paul Williams
Paul Marshall
Tranche
Opening
Balance
Granted
Derecognised
on Resignation
Lapsed
Closing
Balance
5
3
3
3
3
4
4
-
-
-
-
-
-
1,000,000
500,000
500,000
500,000
-
-
-
-
-
-
1,000,000
(1,000,000)
-
-
-
600,000
300,000
-
-
4,400,000
(1,000,000)
-
-
-
-
-
-
-
-
-
-
1,000,000
500,000
500,000
500,000
-
600,000
300,000
21,400,000
1
18,000,000 options were issued to Asimwe Kabunga after year end on 31 January 2023 as consideration for sale of his interest in
the Tanzanian projects.
Option Terms
Grant date
Exercise price
Vesting conditions/vesting date
Share price at grant date
Expiry date
Fair value per option
Tranche 3
Tranche 4
Tranche 5
31 May 2022
30 June 2022
16 December 2022
$0.17
Ongoing employment
until 30 June 2023 1
$0.100
$0.11
Ongoing employment
until 30 June 2023
$0.17
Ongoing employment until 1
October 2023
$0.080
31 May 2025
31 May 2025
$0.0542
$0.0449
$0.093
31 May 2025
$0.0412
1 The Board exercised its discretion to vest in full 1,000,000 options granted to Mark Elliott upon his retirement.
(e) Additional Information
The factors that are considered to affect shareholder return since over the last 5 financial periods are summarised below:
Measures
Share price at end of financial period 1
Market capitalisation at end of financial period ($M)
December
2022
$
December
2021
$
December
2020
$
December
2019
$
December
2018
$
0.096
11.31
0.135
10.16
0.002
1.87
0.002
1.87
0.002
1.87
Loss for the financial period
2,345,223
1,762,610
1,427,002
1,142,555
1,248,372
Director and Key Management Personnel remuneration
728,656
606,296
561,120
561,120
574,120
1 AKN shares were suspended from the ASX official quotation from 30 September 2019 to 15 June 2021. The share price for 31 December 2020 and 31
December 2019 represents the last trade price before suspension. During 2021, AKN shares were subject to a 200:1 share consolidation.
Given that the remuneration is commercially reasonable, the link between remuneration, Company performance and
shareholder wealth generation is tenuous, particularly in the exploration and development stage of a minerals company.
Share prices are subject to the influence of international metal prices and market sentiment towards the sector and
increases or decreases may occur independently of executive performance or remuneration.
The Company may issue options to provide an incentive for directors and key management personnel which, it is believed,
is in line with industry standards and practice and is also believed to align the interests of directors and key management
personnel with those of the Company’s shareholders.
End of Remuneration Report
Page 30
AuKing Mining Limited
2022 Annual Report
INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITOR
Each Director and the Secretary of the Company has the right of access to all relevant information. The Company has
insured all of the Directors of AuKing Mining Limited. The contract of insurance prohibits the disclosure of the nature of
the liabilities covered and amount of the premium paid. The Corporations Act does not require disclosure of the
information in these circumstances.
To the extent permitted by law, the Company has agreed to indemnify its auditors, BDO, as part of the terms of its audit
engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment
has been made to indemnify BDO during or since the financial year.
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 proceedings
to which the Company is a party for the purposes 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 period.
DIRECTORS’ MEETINGS
The number of meetings of Directors (including meetings of committees of directors) held during the period and the
number of meetings attended by each Director was as follows:
Asimwe Kabunga
Anna Nahajski-Staples
Peter Tighe
Ian Hodkinson
ShiZhou Yin
Mark Elliott
Directors’ Meetings
A
2
2
8
9
9
7
B
2
2
9
9
9
7
A – Number of meetings attended
B – Number of meetings held during the time the director held office during the period
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor's expertise and experience with the Company and/or the group are important.
During the year, the following fees were paid or payable for non-audit services provided by the auditor of the parent entity,
its related practices and non-audit related firms:
Taxation Services – income tax preparation and tax compliance services $30,054
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration forms part of the Directors’ Report.
Signed in accordance with a resolution of the directors.
Director
15 February 2023
Page 31
AuKing Mining Limited
2022 Annual Report
Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek Street
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF AUKING MINING LIMITED
As lead auditor of AuKing Mining Limited for the year ended 31 December 2022, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of AuKing Mining Limited and the entities it controlled during the period.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 15 February 2023
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Page 32
AuKing Mining Limited
2022 Annual Report
ADDITIONAL STOCK EXCHANGE INFORMATION
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this report is as follows.
The information is current as at 6 February 2023.
(a)
Distribution of equity securities – AKN Ordinary Fully Paid Shares
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable Parcels
Securities
161,231,618
19,617,155
1,680,892
294,470
19,572
182,843,707
161,585
No. of holders
127
545
203
78
167
1,120
215
Distribution of equity securities – AKNO Listed $0.25 30 June 2023 Options
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Securities
36,587,086
5,592,541
276,943
402,427
12,383
42,871,380
No. of holders
74
170
35
95
52
426
%
88.18%
10.73%
0.92%
0.16%
0.01%
100.00%
0.09%
%
85.34%
13.04%
0.65%
0.94%
0.03%
100.00%
(b)
Twenty largest holders – AKN Ordinary Fully Paid Shares
Rank
Name
No. Shares
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
KABUNGA HOLDINGS PTY LTD
HASHIMU MUSEDEM MILLANGA
BIENTIAL INTERNATIONAL INDUSTRIAL CO LTD
ROPA INVESTMENTS (GIBRALTAR) LIMITED
MR PAVLE TOMASEVIC
MR WILLI RUDIN
MS LETICIA KOKUTENGENEZA KABUNGA
VEN CAPITAL PTY LTD
MR BRIAN LAURENCE EIBISCH
MR MARC DOMINIQUE SENGES
MR PETER GERARD TIGHE & MRS PATRICIA JOAN TIGHE
N&M GREENHALGH NOMINEES PTY LTD
ALLEKIAN EXCHANGE PTY LTD
MR DONATO IACOVANTUONO
MR BRIAN THOMAS CLAYTON & MRS JANET CLAYTON
SUNCITY CAPITAL PTY LTD
YUNNAN COPPER INDUSTRY (GROUP) CO LIMITED
MS PHAROTH SAN & MR KADEN SAN
SCINTILLA STRATEGIC INVESTMENTS LIMITED
LADYMAN SUPER PTY LTD
Total
Balance of register
Grand total
(c)
Voting Rights
All fully paid ordinary shares carry one vote per share without restriction.
36,000,000
13,500,000
9,245,092
7,600,000
5,500,000
5,144,000
4,500,000
3,850,000
2,415,000
2,250,000
2,233,556
2,222,224
1,927,250
1,844,997
1,785,715
1,766,281
1,499,612
1,464,917
1,400,000
1,398,809
107,547,453
75,296,254
182,843,707
19.69%
7.38%
5.06%
4.16%
3.01%
2.81%
2.46%
2.11%
1.32%
1.23%
1.22%
1.22%
1.05%
1.01%
0.98%
0.97%
0.82%
0.80%
0.77%
0.77%
58.82%
41.18%
100.00%
Page 33
AuKing Mining Limited
2022 Annual Report
(d)
Twenty largest holders – AKNO Listed $0.25 30 June 2023 Options
Rank
Name
No. Options
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
MR WILLIAM JOHN REID
FIRST INVESTMENT PARTNERS PTY LTD
HUNTERLAND HJDN PTY LTD
MR MARK RICHARD JENSEN
MR LUKE WILLIAM DAVIS
MR GARY NEALE BRYSON
MR BRIAN THOMAS CLAYTON & MRS JANET CLAYTON
SCINTILLA STRATEGIC INVESTMENTS LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
DR GARY OWEN ROOKE
MRS JUDITH SUZANNE PIGGIN & MR DAMIEN JAYE PIGGIN & MR
GLENN ADAM PIGGIN
JHB SUPER INVESTMENTS PTY LTD
SUNCITY CAPITAL PTY LTD
MR DONATO IACOVANTUONO
MR PAVLE TOMASEVIC
ROMFAL SIFAT PTY LTD
ROCKET FUEL HOLDINGS PTY LTD
MR TIMOTHY FRANCIS BENNETT
MR ALEXANDER LEWIT
RIYA INVESTMENTS PTY LTD
Total
Balance of register
Grand total
7,813,000
2,904,541
1,840,000
1,661,604
1,205,703
1,067,411
1,055,429
837,501
750,000
750,000
45.37%
16.87%
10.68%
9.65%
7.00%
6.20%
6.13%
4.86%
4.36%
4.36%
750,000
4.36%
700,000
667,429
600,000
533,225
514,286
500,000
500,000
500,000
500,000
25,650,129
17,221,251
42,871,380
4.06%
3.88%
3.48%
3.10%
2.99%
2.90%
2.90%
2.90%
2.90%
59.83%
40.17%
100.00%
(e)
Substantial Shareholders
The Company has received the following substantial shareholder notices as at 6 February 2023:
•
•
•
Kabunga Holdings Pty Ltd holds an interest in 36,000,000 shares (19.69%)
Hashimu Musedem Millanga holds an interest in 13,500,000 shares (7.38%)
Bienitial International Industrial Co., Ltd. hold an interest in 10,015,092 shares (5.48%)
(f)
Unquoted Securities
There are the following unquoted securities as at 6 February 2023. Each option is convertible into one fully paid ordinary share.
Nos
2,700,000
3,500,000
46,870,000
Option Terms
ESOP Unlisted $0.11 options expiry date 31/5/25
ESOP Unlisted $0.17 options expiry date 31/5/25
Unlisted $0.20 options expiry date 30/9/25 – Kabunga Holdings Pty Ltd holds 38.4% of the options issued.
(g)
Restricted Securities
The Company has the following securities subject to escrow as at 6 February 2023
ASX Escrow
4,429,096 Shares have been classified as restricted securities by ASX and are subject to restriction for a period of 24 months
ending on 15 June 2023.
Voluntary Escrow
6,500,000 Shares are subject to voluntary escrow for a period of 24 months from 15 June 2021 - the date of official quotation
of the Shares.
Page 34
AuKing Mining Limited
2022 Annual Report
(h)
Interests in Exploration Tenements
The Company holds the following tenement interests as at the date of this Report:
Project/Location
Tenement
Reference
Current Holder
AKN %
Interest
Comment
WESTERN AUSTRALIA
Koongie Park, Halls Creek
E80/ 4389
Koongie Park Pty Ltd
Koongie Park, Halls Creek
E80/ 4766
Koongie Park Pty Ltd
Koongie Park, Halls Creek
E80/ 4957 (Emull)
Koongie Park Pty Ltd
Koongie Park, Halls Creek
E80/ 4960
Koongie Park Pty Ltd
Koongie Park, Halls Creek
E80/ 5076
Koongie Park Pty Ltd
Koongie Park, Halls Creek
E80/ 5087
Koongie Park Pty Ltd
Koongie Park, Halls Creek
E80/ 5127
Koongie Park Pty Ltd
Koongie Park, Halls Creek
E80/ 5263
Koongie Park Pty Ltd
Koongie Park, Halls Creek
M80/ 276 (Sandiego)
Koongie Park Pty Ltd
Koongie Park, Halls Creek
M80/ 277 (Onedin)
Koongie Park Pty Ltd
Koongie Park, Halls Creek
E80/ 5707
Koongie Park Pty Ltd
Koongie Park, Halls Creek
P80/ 1878
Koongie Park Pty Ltd
Koongie Park, Halls Creek
P80/ 1879
Koongie Park Pty Ltd
Koongie Park, Halls Creek
P80/ 1880
Koongie Park Pty Ltd
Koongie Park, Halls Creek
P80/ 1881
Koongie Park Pty Ltd
Koongie Park, Halls Creek
P80/ 1882
Koongie Park Pty Ltd
80
80
80
80
80
80
80
80
80
80
80
80
80
80
80
80
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1 and 2
Refer Note 1, 2 and 3
Refer Note 1, 2 and 3
Refer Note 1, 2 and 3
Refer Note 1, 2 and 3
Refer Note 1, 2 and 3
Tanami Region
E80/ 5688 (Blondie)
Auking Mining Limited
Kununurra Region
E80/ 5794 (Bow River) Auking Mining Limited
100
100
Now granted
Refer Note 3
TANZANIA
Manyoni
Manyoni
Manyoni
Manyoni
Manyoni
Mkuju
Mkuju
Mkuju
Mkuju
Mkuju
Mkuju
Karema
Notes:
PL12188
PL12190
PL12191
PL12193
PL12194
PL12184
PL12185
PL12186
PL12187
PL12189
PL12192
PL12179
92U Tanzania Ltd
92U Tanzania Ltd
92U Tanzania Ltd
92U Tanzania Ltd
92U Tanzania Ltd
92U Tanzania Ltd
92U Tanzania Ltd
92U Tanzania Ltd
92U Tanzania Ltd
92U Tanzania Ltd
92U Tanzania Ltd
Monaco Copper Ltd
100
100
100
100
100
100
100
100
100
100
100
100
1.
2.
3.
AKN has now acquired a 80% interest in the Koongie Park Joint Venture, which was established by an agreement dated 8
February 2021
Koongie Park Pty Ltd is a wholly owned subsidiary of Astral Resources NL
This tenure has either been granted or is pending grant by the WA DMRIS, now that the heritage agreement with the Kimberley
Land Council has been finalised and signed.
Page 35
AuKing Mining Limited
2022 Annual Report
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
Gain on extinguishment of financial liability - employee
liabilities
Gain on extinguishment of financial liability - loan
Employment and consultancy expenses
Depreciation expense
Costs related to the Tanzania transaction
Costs related to the Koongie Park transaction
Other expenses
Finance costs – derivative financial instruments
Finance costs – other
Loss before income tax
Income tax expense
Loss for the period
Loss after income tax
8
10
4
7
3
10
15
Note
2022
$
-
-
(1,073,750)
(38,939)
(89,208)
-
(1,143,326)
-
-
2021
$
460,730
121,955
(841,787)
(13,666)
-
(97,922)
(703,740)
(544,417)
(143,763)
(2,345,223)
(1,762,610)
-
-
(2,345,223)
(1,762,610)
(2,345,223)
(1,762,610)
Other comprehensive income/(loss)
-
-
Total comprehensive loss
(2,345,223)
(1,762,610)
Earnings per share
Basic and diluted loss per share
14
Cents
(2.44)
Cents
(4.69)
The Consolidated Statement of Comprehensive Income should be read in conjunction with the Notes to the Consolidated Financial Statements.
Page 36
AuKing Mining Limited
2022 Annual Report
Consolidated Balance Sheet
As at 31 December 2022
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other receivables
Exploration and evaluation assets
Plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefit provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Employee benefit provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
December 2022
$
December 2021
$
2
5
6
7
8
9
11
13
1,656,292
93,042
45,503
2,500,076
225,727
-
1,794,837
2,725,803
3,185
8,318,408
165,473
8,487,066
2,470
4,865,744
131,286
4,999,500
10,281,903
7,725,303
290,593
126,714
417,307
-
-
554,813
27,527
582,340
44,137
44,137
417,307
626,477
9,864,596
7,098,826
13,592,798
379,631
(4,107,833)
9,864,596
8,721,436
140,000
(1,762,610)
7,098,826
The Consolidated Balance Sheet should be read in conjunction with the Notes to the Consolidated Financial Statements
Page 37
AuKing Mining Limited
2022 Annual Report
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Consolidated Entity
Share
Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
Balance at 1 January 2021
42,630,609
-
(46,097,623)
(3,467,014)
Transactions with owners in their capacity as owners
Section 258F Corporations Act share capital adjustment 1
Issue of share capital
Share issue costs
Total
Comprehensive income
Loss after income tax
Other comprehensive income
Total comprehensive income
(46,097,623)
13,600,297
-
-
(1,411,847)
140,000
46,097,623
-
-
-
13,600,297
(1,271,847)
(33,909,173)
140,000
46,097,623
12,328,450
-
-
-
-
-
-
(1,762,610)
(1,762,610)
-
-
(1,762,610)
(1,762,610)
Balance at 31 December 2021
8,721,436
140,000
(1,762,610)
7,098,826
Balance at 1 January 2022
8,721,436
140,000
(1,762,610)
7,098,826
Transactions with owners in their capacity as owners
Issue of share capital
Share issue costs
Share based payments
Comprehensive income
Loss after income tax
Other comprehensive income
5,415,468
(544,106)
-
4,871,362
-
-
239,631
239,631
-
-
-
-
5,415,468
(544,106)
239,631
5,110,993
-
-
-
-
-
-
(2,345,223)
(2,345,223)
-
-
(2,345,223)
(2,345,223)
Balance at 31 December 2022
13,592,798
379,631
(4,107,833)
9,864,596
1 On 31 December 2021, AuKing Mining Limited reduced its share capital by $46,097,623 in accordance with section 258F of the
Corporations Act 2001, reducing accumulated losses deemed to be of a permanent nature by the same amount.
There is no impact on shareholders from the capital reduction as no shares have been cancelled or rights varied, and there is no change
in the net asset position of the Company. There is also no impact on the availability of the Company’s tax losses from this capital
reduction.
The Consolidated Balance Sheet should be read in conjunction with the Notes to the Consolidated Financial Statements
Page 38
AuKing Mining Limited
2022 Annual Report
Consolidated Cash Flow Statement
For the year ended 31 December 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Payments for Tanzania transactions costs
Payments for other Koongie Park transactions costs
Interest and other borrowing costs paid
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Proceeds from the sale of plant and equipment
Payments for security deposits
Payments for exploration and evaluation assets
Receipts from government grants
Net cash provided by/(used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Cost associated with the issue of shares
Proceeds from borrowings
Repayment of borrowings
Net cash provided by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Note
2022
$
2021
$
7
7
6
6
11
11
(1,758,353)
(1,618,574)
(89,208)
-
-
-
(97,922)
(129,877)
(1,847,561)
(1,846,373)
(88,372)
16,000
(715)
(144,566)
-
-
(4,354,503)
(4,400,201)
556,912
-
(3,870,678)
(4,544,767)
5,365,968
(491,513)
-
-
4,874,445
(843,784)
2,500,076
9,475,000
(1,204,940)
750,000
(150,000)
8,870,060
2,478,920
21,156
Cash and cash equivalents at the end of the period
1,656,292
2,500,076
The Consolidated Cash Flow Statement should be read in conjunction with the Notes to the Consolidated Financial Statements.
Page 39
AuKing Mining Limited
2022 Annual Report
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Introduction
This financial report covers the Consolidated Entity of AuKing Mining Limited (the “Company”) and its controlled entities
(together referred to as the “Consolidated Entity”). AuKing Mining Limited is a listed public company, incorporated and
domiciled in Australia. The Consolidated Entity is a for-profit entity for the purpose of preparing the financial statements.
Operations and principal activities
The principal activity of the Consolidated Entity is mineral exploration.
Currency
The financial report is presented in Australian dollars, which is the functional currency of the Company, and is rounded to
the nearest one dollar.
Authorisation of financial report
The financial report was authorised for issue on 15 February 2023.
Comparative figures
When required by accounting standards comparative figures have been adjusted to conform to changes in presentation
for the current financial period.
Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards, and the
Corporations Act 2001.
Compliance with IFRS
The consolidated financial statements comply with International Financial Reporting Standards (IFRSs) adopted by the
International Accounting Standards Board (IASB).
Historical cost convention
The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Consolidated Entity’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements are disclosed in the notes below.
Accounting policies
(a)
Going Concern
As at 31 December 2022 the Consolidated Entity had cash reserves of $1,656,292 and net current assets of $1,377,530.
The Consolidated Entity requires further capital to fund future exploration activity and meet other necessary corporate
expenditure.
The ability of the Consolidated Entity to continue as a going concern is principally dependent upon one or more of the
following:
•
•
the ability of the Company to raise additional capital in the future; and
the successful exploration and subsequent exploitation of the Consolidated Entity’s tenements.
These conditions give rise to material uncertainty which may cast significant doubt over the Consolidated Entity’s ability to
continue as a going concern.
The directors believe that the going concern basis of preparation is appropriate due to the following reasons:
• To date the Consolidated Entity has funded its activities through issuance of equity securities, and it is expected that
the Consolidated Entity will be able to fund its future activities through further issuances of equity securities; and
• The directors believe there is sufficient cash available for the Consolidated Entity to continue operating based on the
Company’s cash flow forecast.
Page 40
AuKing Mining Limited
2022 Annual Report
Should the Consolidated Entity be unable to continue as a going concern, it may be required to realise its assets and
extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the
financial statements. This financial report does not include any adjustments relating to the recoverability and classification
of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary
should the Consolidated Entity be unable to continue as a going concern.
(b)
New Accounting Standards and Interpretations
The accounting policies adopted are consistent with those of the previous financial year.
Several other amendments and interpretations applied for the first time during the year but these changes did not have an
impact on the Consolidated Entity’s financial statements and hence, have not been disclosed.
The Consolidated Entity has not early adopted any standards, interpretations or amendments that have been issued but
are not yet effective.
(c)
New Standards and Interpretations Not Yet Adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2022
reporting periods. The Consolidated Entity has decided against early adoption of these standards. The Consolidated
Entity’s assessment of the impact of these new standards and interpretations is that they are not expected to have a
material impact on the Group's financial assets or financial position, financial performance or disclosure.
Page 41
AuKing Mining Limited
2022 Annual Report
NOTE 2 CASH AND CASH FLOW INFORMATION
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of financing and
investing activities, which are disclosed as operating cash flows.
December 2022
December 2021
$
$
Reconciliation of cash flows used in operations with loss after income tax
Loss after income tax
(2,345,223)
(1,762,610)
Non-cash items in loss after income tax
Depreciation
Accrued/non-cash interest expense
Fair value movement - derivative
Gain on extinguishment of financial liabilities
Share based payments
Gain on sale of plant and equipment
Movements in assets and liabilities
Other receivables
Other assets
Trade payables and accruals
Provisions
Cash flow from operations
Reconciliation of cash
38,939
-
-
-
169,631
(754)
132,685
(45,504)
147,614
55,051
13,666
13,886
544,417
(582,685)
-
-
(216,571)
-
143,486
38
(1,847,561)
(1,846,373)
Cash at the end of the financial period as shown in the cash flow statement is reconciled to items in the balance sheet as
follows:
Cash on hand and at bank
Cash on deposit
1,645,865
10,427
1,656,292
2,489,649
10,427
2,500,076
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments
with original maturities of three months or less, and bank overdrafts.
Reconciliation of cash and non-cash movements in borrowings for the year (refer to Note 10 for further details)
Opening balance at 1 January
Cash movements in borrowings
Drawdowns
Repayments - principal
Repayments - interest
Non-cash movements in borrowings
Accrued interest
Conversion to equity
Fair value finance movement - derivative
Gain on extinguishment of financial liability
Closing balance
-
-
-
-
-
-
-
-
-
2,424,319
750,000
(150,000)
(93,658)
107,544
(2,783,000)
(133,250)
(121,955)
-
Page 42
AuKing Mining Limited
2022 Annual Report
NOTE 2 CASH AND CASH FLOW INFORMATION (continued)
Reconciliation of cash and non-cash movements in share capital for the year (refer to Note 11 for further details)
December 2022
December 2021
$
$
Opening balance at 1 January
8,721,436
42,630,609
Cash movements in share capital
Shares issued – cash settled
Share issue expenses – cash settled
Non-cash movements in share capital
Director and employee fees – equity settled
JCHX shareholder loan – equity settled
Convertible notes – equity settled
Broker success shares – equity settled
Share issue expenses – trade creditors
Share issue expenses – equity settled
Settlement of derivative financial instruments arising from convertible notes
Section 258F Corporations Act share capital adjustment
5,365,968
(491,513)
9,475,000
(1,204,940)
-
-
-
-
66,907
(70,000)
-
-
627,130
1,500,000
1,283,000
37,500
(66,907)
(140,000)
677,677
(46,097,623)
Closing balance
13,592,798
8,721,436
Non-cash movements in investing activities
Exploration and evaluation assets amounts included in trade and other creditors at 31 December 2022 were $20,616
(2021: $365,543).
NOTE 3 OTHER EXPENSES
Corporate compliance and insurance expenses
Administration expenses
Investor relation and capital market advisory expenses
Telecom and IT expenses
NOTE 4 EMPLOYEE EXPENSES
Employee wages and director fees
Superannuation
Share based payments – employee and director options
Other employments expenses
NOTE 5 TRADE & OTHER RECEIVABLES
418,897
311,909
359,919
52,601
1,143,326
761,674
102,472
169,631
39,973
1,073,750
292,017
298,874
72,841
40,009
703,740
724,674
77,578
-
39,653
841,787
GST receivable
93,042
255,727
Page 43
AuKing Mining Limited
2022 Annual Report
NOTE 6 EXPLORATION AND EVALUATION ASSETS
Opening balance
Transfer of Koongie Park deposit from other non-current assets
Exploration expenditure during the period
Government grants relating to exploration
December 2022
December 2021
$
4,865,744
-
4,009,575
(556,911)
8,318,408
$
-
100,000
4,765,744
-
4,865,744
Exploration costs are capitalised only when the Consolidated Entity has either a granted tenement in its name or an interest
through a earn-in and joint venture arrangement. Costs are only carried forward to the extent that they are expected to be
recouped through the successful development of the area or sale of the respective area of interest or where activities in
the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable
reserves and active or significant operations in relation to the area are continuing.
The Company lodged an R&D Tax Incentive application with AusIndustry in respect of the Onedin metallurgical test work
program during the year. That application achieved registration and a refund of $556,911 was received from the ATO in
relation to research works completed during 2021 financial year.
AKN announced to ASX on 4 February 2022 that it had completed the second earn-in milestone of $1.5M under the
Koongie Park Earn-in and then held a 75% interest in the Koongie Park JV. As a consequence of additional exploration
expenditure being incurred during the year, AKN expanded its interest in the Koongie Park project to 80%.
NOTE 7 PLANT AND EQUIPMENT
Field equipment at cost
Accumulated depreciation
Motor vehicles at cost
Accumulated depreciation
Office equipment at cost
Accumulated depreciation
Total plant and equipment
Movements during the year
December 2022
Opening balance
Additions
Disposals
Depreciation
Closing balance
8,603
(878)
7,725
145,126
(28,704)
116,422
61,890
(20,564)
41,326
22,587
(1,160)
21,427
67,689
(6,361)
61,328
54,290
(5,759)
48,531
165,473
131,286
Field
Equipment
21,427
3,336
(15,246)
(1,792)
7,725
Motor
Vehicles
61,328
77,436
-
(22,342)
116,422
Office
Equipment
48,531
7,600
-
(14,805)
41,326
Total
131,286
88,372
(15,246)
(38,939)
165,473
Page 44
AuKing Mining Limited
2022 Annual Report
NOTE 7 PLANT AND EQUIPMENT (continued)
December 2021
Opening balance
Additions
Depreciation
Closing balance
Field
Equipment
-
22,587
(1,160)
21,427
Motor
Vehicles
-
67,689
(6,361)
61,328
Office
Equipment
385
54,290
(6,144)
48,531
Total
385
144,566
(13,666)
131,286
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and
impairment losses. In the event the carrying amount of plant and equipment is greater than the estimated recoverable
amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are
recognised in profit or loss. A formal assessment of recoverable amount is made when impairment indicators are present.
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 benefits associated with the item will flow to the Consolidated Entity and the cost of the item
can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income
during the financial period in which they are incurred.
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over the asset’s useful life to the
Consolidated Entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated
over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The assets’
residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
Class of Fixed Asset
Field equipment
Motor vehicles
Office equipment
Depreciation Rates
10% - 20%
20%
20% - 25%
NOTE 8 TRADE & OTHER PAYABLES
Trade payables
Other payables and accrued expenses
Accrued wages and fees payable to Directors
December 2022
December 2021
$
$
55,272
220,321
15,000
290,593
465,483
69,691
19,639
554,813
During the prior year and, the below Key Management Personnel and other employees entered into an agreement with
the Company to receive ordinary shares (at an issue price of $0.20 per share) in lieu of unpaid remuneration. The total
amounts owing, settled by shares issued, and forgiven:
Huaisheng Peng
Qinghai Wang
Paul Williams
Zewen Yang
Paul Marshall
Other employees
Remuneration
owing at 15 June
2021
$
99,000
82,500
304,420
192,147
57,200
119,101
1,087,860
Shares issued as
consideration
Shares issued as
consideration
Remuneration
forgiven
#
420,000
350,000
1,114,445
635,485
262,150
353,550
3,135,630
$
84,000
70,000
222,889
127,097
52,434
70,710
627,130
$
30,900
25,750
201,643
136,605
17,441
48,391
460,730
Page 45
AuKing Mining Limited
2022 Annual Report
NOTE 9 EMPLOYEE BENEFITS PROVISIONS
CURRENT
Employee benefits
NON-CURRENT
Employee benefits
December 2022
December 2021
$
$
126,714
27,527
-
44,137
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service are recognised in respect of employees’
services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
Other long-term employee benefit obligations
The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after the end
of the period in which the employees render the related service. They are therefore measured as the present value of
expected future payments to be made in respect of services provided by employees up to the end of the reporting period.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the end of the reporting period of corporate bonds
with terms and currencies that match, as closely as possible, the estimated future cash outflows.
NOTE 10 BORROWINGS
Shareholder loans
Opening balance
Drawdowns during the period
Interest accrued/(paid) during the period
Converted to share capital during the period
Gain on extinguishment of financial liability
Repaid during the period
Convertible notes
Opening balance
Drawdowns during the period
Interest accrued/(paid) during the period
Converted to share capital during the period
Derivative financial instruments arising from convertible notes
Opening balance
Arising from convertible notes issued
Settled through issue of share capital
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,730,283
-
41,672
(1,500,000)
(121,955)
(150,000)
-
560,786
750,000
(27,786)
(1,283,000)
-
133,250
544,417
(677,667)
-
Page 46
AuKing Mining Limited
2022 Annual Report
NOTE 10 BORROWINGS (continued)
Shareholder loans
Shareholders loans are measured at amortised cost. Amortised cost is the amount at which the financial liability is
measured at initial recognition less principal repayments and adjusted for any cumulative amortisation of the difference
between that initial amount and the maturity amount calculated using the effective interest method. The effective interest
method is used to allocate interest expense over the relevant period and is equivalent to the rate that discounts estimated
future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected
life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount
of the financial liability.
The terms of the shareholder loans are as follows:
JCHX Loan Agreement
The Company and JCHX entered into a $1 million loan agreement, details of which were announced to ASX on 31 October
2017 (JCHX Loan). The primary features of the JCHX Group loan included:
•
•
•
interest being payable on the loan, in arrears, at the rate of 8% per annum;
the loan being unsecured; and
repayment of the loan as soon as possible out of the proceeds of a capital raising.
The Company reached agreement with JCHX providing for the loan moneys and all accrued interest to be repaid and
discharged in full and final satisfaction by the issue of 7,500,000 ordinary shares in the Company at an issue price of $0.20
per share. The shares were issued in June 2021 prior to the ASX re-listing. JCHX has agreed to enter a voluntarily escrow
agreement pursuant to which trading in the ordinary shares issued to repay the JCHX Loan are restricted for a two-year
period from the date of issue.
Tighe Loan Agreement
On 7 September 2020, the Company entered into a short-term loan agreement with the Peter Tighe Super Fund making
provision for the loan of $150,000 to the Company. Interest accrued on the loan at the rate of 20%. The loan and accrued
interest was repaid in full in June 2021.
Page 47
AuKing Mining Limited
2022 Annual Report
NOTE 10 BORROWINGS (continued)
Convertible notes
Convertible notes are measured at amortised cost. Amortised cost is the amount at which the financial liability is measured at initial recognition less principal repayments and adjusted for any
cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method.
The terms of the convertible notes are as follows:
Issue date
Principal amount
Interest rate (payable quarterly in
arrears)
Tranche 1
(Paul Williams)
Tranche 2
(Private Investor)
19 July 2019
16 September 2019
Tranche 3
(Peter Tighe)
30 June 2020
Tranche 4
(Zewen Yang)
3 August 2020
Tranche 5
(Private Investors)
Between 23 February
and 5 March 2021
$75,000
$300,000
$150,000
$8,000
$750,000
10% per annum
10% per annum
10% per annum
10% per annum
10% per annum
Maturity date
30 September 2020
30 September 2020
30 September 2020
30 September 2020
31 December 2021
Conversion rights to ordinary shares
25% discount to issue
price
25% discount to issue
price
25% discount to issue
price
25% discount to issue
price
40% discount to issue
price
Number of shares issued to note
holders (post 200:1 share
consolidation)
500,000
2,000,000
1,000,000
53,333
6,250,000
On 26 April the expiry date of convertible notes were all extended to 15 June 2021.
All convertible notes were converted to ordinary shares on 8 June 2021.
All interest amounts on convertible notes were settled in cash.
Page 48
AuKing Mining Limited
2022 Annual Report
NOTE 11 SHARE CAPITAL
Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction
costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
December 2022
December 2021
$
$
Fully paid ordinary shares
13,592,798
8,721,436
Ordinary Shares
At the beginning of the period
Share consolidation (200:1)
Shares issued – Placement March 2022
Share placement 1
Shares issued – Placement May 2022
Share placement 2
Shares issued – Rights Issue May 2022
Rights issue 3
Shares issued – Placement June 2022
Share placement 4
Shares issued – Placement October 2022
Share placement 5
December
2022
$
December
2021
$
December
2022
Number
December
2021
Number
8,721,436
42,630,609
75,289,651
932,584,461
-
49,500
2,635,138
376,830
980,000
1,374,000
-
-
-
-
-
-
-
(927,921,293)
300,000
18,822,412
2,691,644
7,000,000
13,740,000
-
-
-
-
-
Shares issued – Public Offer June 2021
Director and employee shares ($0.20 per share) 6
JCHX shareholder loan ($0.20 per share) 7
Convertible notes tranches 1 – 4 ($0.20 per share) 8
Convertible notes tranche 5 ($0.20 per share) 8
Public offer shares ($0.20 per share) 9
Broker success shares ($0.20 per share) 10
Shares issued – Placement November 2021
Share placement 11
-
-
-
-
-
-
-
627,130
1,500,000
710,667
1,250,000
7,000,000
37,500
2,475,000
Share issue expenses
(544,106)
(1,411,847)
Share capital reduction – Section 285F 12
-
(46,097,623)
-
-
-
-
-
-
-
-
-
3,135,650
7,500,000
3,553,333
6,250,000
35,000,000
187,500
15,000,000
-
-
At reporting date
13,592,798
8,721,436
117,843,707
75,289,651
Page 49
AuKing Mining Limited
2022 Annual Report
NOTE 11 SHARE CAPITAL (continued)
Notes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
300,000 shares issued to Vert Capital in March 2022 in relation to the November 2021 placement.
18,822,412 shares issued through a share placement at $0.14 per share.
2,691,644 shares issued through a rights issue at $0.14 per share.
7,000,000 shares issued through a share placement at $0.14 per share.
13,740,000 shares issued through a share placement at $0.10 per share.
3,135,650 shares issued in full satisfaction of unpaid remuneration.
7,500,000 shares issued in full satisfaction of unpaid loan monies.
9,803,333 shares issued on conversion of convertible notes.
35,000,000 shares issued under the June 2021 public offer.
187,500 shares issued to Novus Capital under the agreed Lead Manager Mandate.
15,000,000 shares issued under the share placement plan.
12. On 31 December 2021, AuKing Mining Limited reduced its share capital by $46,097,623 in accordance with section 258F of the Corporations Act 2001,
reducing accumulated losses deemed to be of a permanent nature by the same amount. There is no impact on shareholders from the capital reduction
as no shares have been cancelled or rights varied, and there is no change in the net asset position of the Company. There is also no impact on the
availability of the Company’s tax losses from this capital reduction.
Options
Tranche
Expiry Date
Exercise
Price
1 January
2022
Movements
Issued
Exercised
Expired
Tranche 1
30 June 2023
Tranche 2
30 June 2023
Tranche 3
31 May 2025
Tranche 4
31 May 2025
Tranche 5
31 May 2025
Tranche 6
30 September 2025
0.25
0.25
0.17
0.11
0.17
0.20
17,500,000 11,371,380
- 14,000,000
-
-
-
-
2,500,000
2,700,000
1,000,000
6,870,000
17,500,000 38,441,380
-
-
-
-
-
-
-
-
-
-
-
-
31 Dec
2022
28,871,380
14,000,000
2,500,000
2,700,000
1,000,000
6,870,000
55,491,380
Tranche 1 options were issued to shareholders as part of previous capital raises. The options have an exercise price of
$0.25 and no vesting conditions. Tranche 1 options were issued on the following dates:
17,500,000 options issued on 9 June 2021
6,274,137 options on 2 May 2022
897,243 options issued on 23 May 2022
3,268,175 options issued on 16 June 2022
299,682 options issued on 20 June 2022
632,143 options issued on 27 June 2022
Tranche 2 options were issued to the lead manager of the November 2021 and the current periods capital raising programs,
Vert Capital Pty Ltd, 14,000,000 options exercisable at 25c on or before 30 June 2023. Tranche 2 options were issued on
the following dates:
4,000,000 options issued on 31 March 2022
10,000,000 options on 27 June 2022
Tranche 3 options were issued to the Directors under the Employee Share and Option Plan. The options have an exercise
price $0.17 and a 1 year service vesting condition. Tranche 3 options were issued on 30 June 2022.
Tranche 4 options were issued to employees under the Employee Share and Option Plan. The options have an exercise
price $0.11 and a 1 year service vesting condition. Tranche 4 options were issued on 30 June 2022.
Tranche 5 options were issued to a Director under the Employee Share and Option Plan. The options have an exercise
price $0.17 and a 1 year service vesting condition. Tranche 5 options were issued on 16 December 2022.
Tranche 6 options were issued to shareholders as part of the October share placement The options have an exercise
price of $0.20 and no vesting conditions. Tranche 5 options were issued on 22 December 2022.
Page 50
AuKing Mining Limited
2022 Annual Report
NOTE 12 DIVIDENDS & FRANKING CREDITS
There were no dividends paid or recommended during the period. There are no franking credits available to the
shareholders of the Company.
NOTE 13 RESERVES
Share based payment reserve
Movements during the year
Opening balance
Director and employee options
Consultant options
December 2022
December 2021
$
$
379,631
140,000
140,000
169,631
70,000
379,631
-
-
140,000
140,000
The share based payment reserve is used to record the value of share based payments provide to employees and
consultants for capital raising services.
NOTE 14 EARNINGS PER SHARE
The Consolidated Entity presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares.
Total losses used to calculate basic and dilutive EPS
(2,345,223)
(1,762,610)
2022
Number
2021
Number
Weighted average number of ordinary shares outstanding during the period
96,232,257
37,619,484
Weighted average number of dilutive options outstanding
Weighted average number of ordinary shares outstanding during the period
used in calculating EPS and dilutive EPS
-
-
93,232,257
37,619,484
Basic and diluted loss per share - cents
(2.44)
(4.69)
At 31 December 2022, there were 55,941,380 (2021: 17,500,000) options outstanding which could potentially dilute basic
earnings per share in the future. Because there is a loss from operations, these would have an anti-dilutive effect and
therefore diluted earnings per share is the same as the basic earnings per share.
Refer to Note 23 for issuance of ordinary shares after balance sheet date. These issuances would have changed
significantly the number of ordinary shares outstanding at the end of the reporting period if occurred before the end of the
reporting period.
NOTE 15 INCOME TAX
Income tax expense
The income tax expense for the period comprises current income tax expense and deferred tax expense. Current income
tax expense charged to profit or loss is the tax payable on taxable income.
A reconciliation of income tax expense/(benefit) applicable to accounting profit before income tax at the statutory income
tax rate to income tax expense at the Consolidated Entity’s effective income tax rate for the periods ended 31 December
2022 and 31 December 2021 is as follows:
Page 51
AuKing Mining Limited
2022 Annual Report
NOTE 15 INCOME TAX (continued)
December 2022
December 2021
$
$
Accounting loss before income tax
(2,345,223)
(1,762,610)
Tax at the Australian tax rate of 25.0% (2021: 26.0%)
Non-deductible/(assessable) items
Deferred tax assets not bought to account
Income tax expense
Current tax liabilities
(586,306)
66,830
519,476
-
(458,279)
(985)
459,264
-
Current tax liabilities are measured at the amounts expected to be paid to the relevant taxation authority. The Consolidated
Entity did not have any current tax liabilities at 31 December 2022 (2021: Nil).
Deferred tax balances
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the period
as well as unused tax losses. Deferred tax is calculated at the tax rates expected to apply to the period when the asset is
realised or liability is settled. Current and deferred tax is recognised in the statement of comprehensive income except
where it relates to items that may be recognised directly in equity, in which case the deferred tax is adjusted directly against
equity. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available
against which deductible temporary differences can be utilised. Future income tax benefits in relation to tax losses have
not been brought to account at this stage as it is not probable the benefit will be utilised. The temporary differences and
tax losses do not expire under current tax legislation. Availability of the tax losses is dependant on satisfying the continuity
of ownership test or same business test at the time of use.
Unrecognised temporary differences and tax losses
Tax losses
Recognised temporary differences and tax losses
Deferred tax assets and liabilities are attributable to the following:
Provisions
Exploration and evaluation assets
Deferred tax attributed to temporary differences not recognised
Tax losses carried forward
Net deferred tax liability/(asset)
Goods & Services Tax
December 2022
December 2021
$
$
39,866,437
34,838,449
31,679
(2,079,602)
2,047,923
-
-
18,633
(1,265,093)
1,246,460
-
-
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 Taxation Office. In these circumstances GST is recognised as part of the acquisition
of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of
GST.
Page 52
AuKing Mining Limited
2022 Annual Report
NOTE 16 RELATED PARTY AND KEY MANAGEMENT PERSONNEL
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
Key management personnel compensation
Key management personnel comprise directors and other persons having authority and responsibility for planning, directing
and controlling the activities of the Consolidated Entity.
Summary
Short-term employee benefits
Post-employment benefits
Share-based payments
December 2022
December 2021
$
$
572,164
27,603
128,889
728,656
316,391
51,212
238,693
606,296
Detailed remuneration disclosures are provided in the remuneration report on pages 25 to 31.
Amounts owed to Key Management Personnel
$15,000 is owed to Key Management Personnel for unpaid remuneration (December 2021: $19,639). These amounts
were at call and did not bear interest.
During the prior year, Key Management Personnel entered into an agreement with the Company to receive ordinary shares
(at an issue price of $0.20 per share) in lieu of unpaid remuneration. The total amounts owing, settled by shares issued,
and gain on extinguishment of financial liability were as follows:
December 2021
Huaisheng Peng
Qinghai Wang
Paul Williams
Zewen Yang
Paul Marshall
Remuneration
owing at 15 June
2021
$
114,900
95,750
424,532
263,702
69,875
968,759
Shares issued as
consideration
Shares issued as
consideration
#
420,000
350,000
1,114,445
635,485
262,150
2,782,080
$
84,000
70,000
222,889
127,097
52,434
556,420
Gain on
extinguishment of
financial liability
$
30,900
25,750
201,643
136,605
17,441
412,339
Page 53
AuKing Mining Limited
2022 Annual Report
NOTE 16 RELATED PARTY AND KEY MANAGEMENT PERSONNEL
Other related party transactions
During the prior year, the Company entered into a loan agreement with the JCHX Group, an entity associated with Mr
Qinghai Wang, and convertible note arrangements with entities associated with Paul Williams and Zewen Yang.
Transactions in relation to these agreements during the prior year were as follows:
December 2022
December 2021
$
$
JCHX loan
Opening balance
Drawdowns during the period
Interest accrued during the period
Extinguishment of financial liability
Converted to share capital during the period
Convertible notes – P Williams
Opening balance
Drawdowns during the period
Interest accrued during the period
Interest paid during the period
Converted to share capital during the period
Convertible notes – Z Yang
Opening balance
Drawdowns during the period
Interest accrued during the period
Interest paid during the period
Converted to share capital during the period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,570,995
-
50,960
(121,955)
(1,500,000)
-
79,067
-
3,267
(7,334)
(75,000)
-
8,329
-
348
(677)
(8,000)
-
NOTE 17 FINANCIAL RISK MANAGEMENT
The Consolidated Entity's financial instruments consist mainly of deposits with banks and accounts receivable and payable.
The main risk arising from the financial instruments is foreign exchange risk.
There have been no substantive changes in the Consolidated Entity's exposure to financial instrument risks, its objectives,
policies and processes for managing those risks or the methods used to measure them from previous periods unless
otherwise stated in this note.
The Board has overall responsibility for the determination of the Consolidated Entity's risk management objectives and
policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for day to day management of
these risks to the Chief Executive Officer and the Chief Financial Officer. The overall objective of the Board is to set
policies that seek to reduce risk as far as possible without unduly affecting the Consolidated Entity's competitiveness and
flexibility. Further details regarding these policies are set out below:
Page 54
AuKing Mining Limited
2022 Annual Report
NOTE 17 FINANCIAL RISK MANAGEMENT (continued)
(a) Credit Risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in the
Consolidated Entity incurring a financial loss. This usually occurs when debtors fail to settle their obligations owing to the
Consolidated Entity.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised
financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance
sheet and notes to the financial statements. There is no collateral held as security at 31 December 2022.
Credit risk is reviewed regularly by the Board. It arises from deposits with financial institutions.
The Consolidated Entity does not have any material credit risk exposure to any single debtor or group of debtors under
financial instruments entered into by the Consolidated Entity.
The credit quality of cash and cash equivalents is considered strong. The counterparty to these financial assets are
large financial institutions with strong credit ratings.
(b) Liquidity risk
Liquidity risk is the risk that the Consolidated Entity may encounter difficulties raising funds to meet financial obligations
as they fall due.
Liquidity risk is reviewed regularly by the Board.
The Consolidated Entity manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash
resources are maintained. The Consolidated Entity did not have any financing facilities available at balance date.
Refer to Note 1 “Going Concern” for details on the Consolidated Entity’s current financial position, funding arrangements
and its ability to meet its future obligations.
(c) Market Risk
Market risk arises from the use of interest bearing, tradeable and foreign currency financial instruments. It is the risk that
the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate
risk), foreign exchange rates (currency risk) or other market factors (other price risk).
The Consolidated Entity does not have any material exposure to market risk.
(d) Capital Risk Management
When managing capital, the director’s objective is to ensure the entity continues as a going concern and to maintain a
structure that ensures the lowest cost of capital available and to ensure adequate capital is available for exploration and
evaluation of tenements. In order to maintain or adjust the capital structure, the Consolidated Entity may seek to issue
new shares.
The Consolidated Entity has no minimum capital requirements.
Refer to Note 1 “Going Concern” for details on the Consolidated Entity’s current financial position, funding arrangements
and its ability to meet its future obligations.
(e) Net Fair Values
The net fair values of financial assets and liabilities approximate their carrying value. The aggregate net fair values and
carrying amounts of financial assets and liabilities are disclosed in the balance sheet and in the notes to the financial
statements.
Page 55
AuKing Mining Limited
2022 Annual Report
NOTE 18 SHARE BASED PAYMENTS
Options
Lead Manager Options
December 2022
Tranche
Grant Date
Expiry Date
Nov 2021
14 Mar 2022
30 June 2023
Jun 2022
27 Jun 2022
30 June 2023
Weighted average exercise price
Exercise
Price
Balance at
start of year
Granted Exercised
Lapsed
Balance at
end of year
Vested and
exercisable
at end of
year
$0.25
$0.25
-
-
-
4,000,000
10,000,000
14,000,000
$0.25
-
-
-
-
-
-
-
-
4,000,000
4,000,000
10,000,000
10,000,000
14,000,000
14,000,000
$0.25
$0.25
The weighted average remaining contractual life of Lead Manager share options outstanding at the end of the year was
0.5 years.
November 2021 Placement
As part of the November 2021 share placement, the Company agreed to issue to the lead manager, Vert Capital Pty Ltd,
4,000,000 options exercisable at 25c on or before 30 June 2023. The options were issued in March 2022 following
shareholder approval.
The assessed fair value at the date of grant of options issued ($0.035) was determined with reference to the fair value of
AKN quoted options (ASX: AKNO). A total of $141,000 was recognised in the share based payment reserve in the prior
year.
June 2022 Placement
As part of the June 2022 share placement, the Company issued to the lead manager, Vert Capital Pty Ltd, 10,000,000
options exercisable at 25c on or before 30 June 2023.
The assessed fair value at the date of grant of options issued ($0.007) was determined with reference to the fair value of
AKN quoted options (ASX: AKNO). A total of $70,000 was recognised in the share based payment reserve in the current
year, being the period in which the lead manager provided services.
Director and Employee Options
The Company has granted options over ordinary shares to employees (including directors) in recognition of services
provided to the Company. The options were granted for nil consideration and are not quoted on the ASX. Options granted
under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share.
December 2022
Tranche
Directors
Jun 2022
Employees
Jun 2022
Directors
Dec 2022
Grant Date
Expiry Date
30 Jun 2022
31 May 2025
30 Jun 2022
31 May 2025
16 Dec 2022
31 May 2025
Weighted average exercise price
Exercise
Price
Balance at
start of year
Granted Exercised
Lapsed
$0.17
$0.11
$0.17
-
-
-
-
2,500,000
2,700,000
1,000,000
6,200,000
$0.144
-
-
-
-
-
-
-
-
-
-
Balance at
end of year
Vested and
exercisable
at end of
year
2,500,000
1,000,000
2,700,000
1,000,000
-
-
6,200,000
14,000,000
$0.144
$0.170
The weighted average remaining contractual life of director and employee share options outstanding at the end of the year
was 2.4 years.
Fair value of options granted
The assessed fair value at the date of grant of options issued is determined using an option pricing model that takes into
account the exercise price, the underlying share price at the time of issue, the term of the option, the underlying share’s
expected volatility, expected dividends and the risk free interest rate for the expected life of the instrument. The value of
the options was calculated using the inputs shown below:
Page 56
AuKing Mining Limited
2022 Annual Report
NOTE 18 SHARE BASED PAYMENTS (continued)
Inputs into pricing model
Directors June 2022
Employees June 2022
Directors December 2022
Mutually agreed terms
Grant date
Exercise price
Vesting conditions
Share price at grant date
Life of the options
Underlying share price volatility
Expected dividends
Risk free interest rate
Pricing model
Fair value per option
31 May 2022
31 May 2022
30 June 2022
30 June 2022
1 October 2022
16 December 2022
$0.17
Ongoing employment
until 30 June 2023 1
$0.100
3.00 years
103%
Nil
2.86%
Binomial
$0.0542
$0.11
Ongoing employment
until 30 June 2023
$0.17
Ongoing employment until 1
October 2023
$0.080
2.92 years
100%
Nil
3.16%
Binomial
$0.0449
$0.093
2.67 years
99%
Nil
3.14%
Binomial
$0.0412
1 The Board exercised its discretion to vest in full 1,000,000 options granted to Mark Elliott upon his retirement.
Total expenses arising from employee share-based payment transactions recognised during the period as part of
employment benefit expenses were as follows:
Share based payments – employee and director options
NOTE 19 SEGMENT REPORTING
Reportable Segments
December 2022
December 2021
$
169,631
$
-
The Consolidated Entity has identified its operating segment based on internal reports that are reviewed and used by the
executive team in assessing performance and determining the allocation of resources. The Consolidated Entity does not
yet have any products or services from which it derives an income.
Management currently identifies the Consolidated Entity as having only one reportable segment, being exploration for
minerals in Australia. The financial results from this segment are equivalent to the financial statements of the consolidated
entity. All assets are located in Australia.
NOTE 20 COMMITMENTS
Future exploration
The Consolidated Entity has certain obligations to expend minimum amounts on exploration in tenement areas. These
obligations may be varied from time to time and are expected to be fulfilled in the normal course of operations of the
Consolidated Entity.
Exploration obligations to be undertaken:
Payable within one year
Payable between one year and five years
Payable after five years
525,420
1,438,860
273,000
2,237,280
417,100
993,400
273,000
1,683,500
To keep tenements in good standing, work programs should meet certain minimum expenditure requirements. If the
minimum expenditure requirements are not met, the Company has the option to negotiate new terms or relinquish the
tenements or to meet expenditure requirements by joint venture or farm in agreements.
The Consolidated Entity currently does not have any other obligations to expend minimum amounts on either operating
leases or exploration in tenement areas.
Page 57
AuKing Mining Limited
2022 Annual Report
NOTE 21 CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There are no contingent liabilities or contingent assets at 31 December 2022 (31 December 2021: Nil).
NOTE 22 AUDITORS’ REMUNERATION
Remuneration paid for:
- Auditing and reviewing the financial report
- Investigating accountants report
Other services
- Tax compliance
December 2022
December 2021
$
$
62,495
-
53,179
25,000
30,054
21,979
NOTE 23 EVENTS AFTER BALANCE SHEET DATE
On 31 January 2023 AKN completed the purchase of various prospective uranium and copper licences in Tanzania. The
purchase price was discharged by AKN through the issue of 60,000,000 ordinary shares and 30,000,000 options
exercisable at 20c on or before 30 September 2025. The total value of the consideration ($7,702,230) will be allocated as
exploration and evaluations assets.
AKN also issued to Vert Capital Pty Ltd a total of 5,000,000 new shares and 10,000,000 options (exercisable at 20c on or
before 30 September 2025) in recognition of the introduction of these project interests to AKN and assistance in securing
the acquisition. The total value of this consideration ($992,410) will be recognised as an expense in the 2023 year.
NOTE 24 PARENT ENTITY INFORMATION
The Parent Entity of the Consolidated Entity is AuKing Mining Limited.
Parent Entity Financial Information
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Share capital
Reserves
Accumulated losses
Total equity
Loss after income tax
Other comprehensive income
Total comprehensive loss
December 2022
December 2021
$
$
1,663,839
8,435,637
10,099,475
336,964
-
336,964
2,488,253
4,953,400
7,441,653
161,922
44,137
206,059
9,762,511
7,235,594
13,592,798
379,631
(4,209,918)
9,762,511
8,721,436
140,000
(1,625,842)
7,235,594
(2,584,076)
(1,621,939)
-
-
(2,584,076)
(1,621,939)
Page 58
AuKing Mining Limited
2022 Annual Report
NOTE 24 PARENT ENTITY INFORMATION (continued)
Controlled Entities of the Parent Entity
Subsidiaries are all entities (including structured entities) over which the Consolidated Entity has control. The Consolidated
Entity controls an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the Consolidated Entity. They are deconsolidated
from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Consolidated Entity.
Intercompany transactions, balances and unrealised gains on transactions between Consolidated Entity companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Consolidated Entity.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income
statement, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
Subsidiaries are all entities (including structured entities) over which the Consolidated Entity has control. The Consolidated
Entity controls an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the Consolidated Entity. They are deconsolidated
from the date that control ceases.
AKN (Koongie Park) Pty Ltd
Percentage Owned
2022
%
100%
2021
%
100%
Country of Incorporation
Australia
Commitments, Contingencies and Guarantees of the Parent Entity
The minimum committed expenditure for future periods of the Parent Entity is the same as those for the Consolidated
Entity. The Parent Entity has no contingent assets, contingent liabilities or guarantees at balance date.
Page 59
AuKing Mining Limited
2022 Annual Report
DIRECTORS' DECLARATION
In the Directors opinion:
(a)
the attached consolidated financial statements and notes that are set out on pages 36 to 59 and the remuneration
report set out on pages 25 to 30 in the Directors’ Report are in accordance with the Corporations Act 2001 and
other mandatory professional reporting requirements, including:
(i)
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
giving a true and fair view of the Consolidated Entity's financial position as at 31 December 2022 and of its
performance for the financial period ended on that date.
(b)
(c)
the financial statements also comply with International Financial Reporting Standards as disclosed in Note 1 to
the consolidated financial statements; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of directors.
Director
15 February 2023
Page 60
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of AuKing Mining Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of AuKing Mining Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated balance sheet as at 31 December 2022, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial report,
including a summary of significant accounting policies and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Page 61
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. 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.
Carrying value of exploration and evaluation assets
Key audit matter
How the matter was addressed in our audit
The Group carries exploration and evaluation
assets in accordance with the Group’s
accounting policy for exploration and
evaluation assets as set out in Note 6.
•
The recoverability of exploration and
evaluation asset is a key audit
matter due to the significance of the
total balance as a proportion of total
assets and the level of procedures
undertaken to evaluate
management’s application of the
requirements of AASB 6 Exploration
for and Evaluation of Mineral
Resources (‘AASB 6’) in light of any
indicators of impairment that may
be present.
Our procedures included:
• Obtaining evidence that the Group has
valid rights to explore in the areas
represented by the capitalised
exploration and evaluation expenditure
by obtaining supporting documentation
such as licence agreements and also
considering whether the Group
maintains the tenements in good
standing.
• Making enquiries of management with
respect to the status of ongoing
exploration programs in the respective
areas of interest.
•
Enquiring of management, reviewing
ASX announcements and reviewing
directors' minutes to ensure that the
Group had not decided to discontinue
activities in any applicable areas of
interest and to assess whether there
are any other facts or circumstances
that existed to indicate impairment
testing was required.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Page 62
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2022, but does not include
the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Page 63
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 25 to 30 of the directors’ report for the
year ended 31 December 2022.
In our opinion, the Remuneration Report of AuKing Mining Limited, for the year ended 31 December
2022, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
T R Mann
Director
Brisbane, 15 February 2023
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Page 64