More annual reports from Aurelia Metals Limited:
2023 Report DELIVERING VALUE.
GROWING RETURNS.
FY21 HIGHLIGHTS
RECORD FINANCIAL OUTCOMES
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169m$
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137m$
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Growth in underlying
NPAT to $57 million
125 %
Robust balance sheet
underpinning growth projects
OPERATIONAL PERFORMANCE
FY21 production guidance
achieved or outperformed
Record Au-equivalent
annual production
%~10
Mill throughputs increased
SAFETY AND SUSTAINABILITY PERFORMANCE
Improvement in Total Recordable
Injury Frequency Rate (TRIFR) 58%
Improvement in Reportable
Environmental Incident
Frequency Rate (REIFR)
82%
2
2
ANNUAL REPORT 2021
ANNUAL REPORT 2021
CONTENTS
FY21 HIGHLIGHTS
Chairman’s letter
Managing Director’s report
COMPANY PROFILE
The portfolio
BUSINESS REVIEW
FY22 outlook
Strategy progression
SUSTAINABILITY
MINERAL RESOURCE AND
ORE RESERVE STATEMENT
FINANCIAL STATEMENTS
Directors’ report
Operations and financial review
Letter from the Chairman of the
Remuneration and Nomination
Committee
Remuneration report (audited)
2
4
5
6
8
9
12
14
22
55
58
60
66
84
86
Auditor independence declaration
108
Statement of profit or loss and
other comprehensive income
Statement of financial position
Statement of changes in equity
Cashflow statement
Notes to financial statements
Director’s declaration
Independent Auditor’s report
to the members of Aurelia
Metals Limited
SHAREHOLDER
INFORMATION
SCHEDULE OF TENEMENT
INTERESTS
109
110
111
112
113
150
151
160
162
FAST PACED GROWTH
63 %
Increase in
mineral resources
across portfolio
Successful acquisition
and integration
of Dargues Mine
NSW
Drilling program to
expand and extend
Federation, Dargues,
Kairos and Great Cobar
DARGUES
Hera Mine, NSW
AURELIA METALS
3
CHAIRMAN’S LETTER
Dear Shareholders,
During this extraordinary time for markets and communities around the world, being a trusted, sustainable and positive presence
has never been more important. The COVID-19 pandemic, evolved over the past 12 months to present unprecedented challenges
for all business, and ours has been no exception. These challenges have spanned border closures and labour supply, service
providers and supply chains, as well as trade with China and shipping shortages.
It is against this backdrop that Aurelia
continued to build on its reputation of
being a disciplined operator, putting
safety of our people and communities
first, managing risk to create resilience
within our business, and executing
our organic and inorganic growth
strategies to deliver long term returns
to our Shareholders.
Aurelia continues to match the very
strong geological perspectivity of our
assets with a material commitment
to exploration. Drilling programs are
underway to extend untapped potential
at Peak’s Kairos orebody, as well as to
expand mine life at Dargues.
Aligned with our Vision and Values, we
are proud to be accelerating priority
Highlights for the financial year have included:
— 58% decrease in Total Recordable Injury Frequency Rate (TRIFR)
— 82% decrease in total reportable environmental incidents frequency rate (TREIFR)
— 63% increase in Mineral Resources
— growth in our asset base from two to three gold and base metal operations
— record financial performance in FY21 with revenue from operations totalling
$416 million, an increase of 26% from the previous year
— Net Profit After Tax of $43 million, representing a 46% improvement on FY20
— maintained our strong balance sheet with $75 million cash in the bank as of
30 June 2021, after repayment of $16 million in debt and cash backing
of environmental bonds
— reinvestment of $20.6 million in growth capital through exploration
and evaluation.
Our financial discipline has enabled the
Board to re-invest back into the business
and set Aurelia up for its next exciting
chapter. For this reason, the Board
decided not to pay a dividend this
year, instead electing to accelerate
towards growth.
Our investment focus has been to
deploy cash into opportunities that will
deliver superior returns to Shareholders.
In FY21 we invested in both organic
and inorganic growth, resulting in the
successful acquisition and integration
of the Dargues Mine and delivery of a
remarkable 63% increase in Minerals
Resources across the portfolio.
Aurelia enjoys an enviable organic growth
pipeline - with Federation shaping up to
be one of the most exciting polymetallic
discoveries in recent times and Great
Cobar emerging as a significant near
mine, undeveloped copper resource.
sustainability initiatives as we aim to
deliver business and stakeholder value
across all aspects of the Company. FY21
saw us focus on lead indicators resulting
in Aurelia significantly outperforming our
lag safety and environmental targets.
Whilst there is more work to do, these
achievements reflect strong leadership
and group wide discipline which is
a credit to the entire Aurelia team.
We are also pleased to introduce
Shareholders to our 3-year Sustainability
Plan, which outlines milestones the
Company is committed to delivering
against over coming years. With a
focus on ensuring sustainability being
embedded in our strategy, plans and
business decisions, Aurelia’s efforts in
FY22 will be on continuous improvement
in the areas of safety (including gender
safety), wellbeing, environmental and
community management, and responsible
stewardship of natural resources.
We also continue to work towards
implementing and reporting against a
GRI framework and managing climate
change risks. We value the trusted
partnerships we are continuing to grow
with Traditional Owners and communities
in the areas in which we operate. We are
grateful for their support.
FY21 saw our dedicated people go
above and beyond in their steadfast
commitment to our business and
communities. Many of our leaders,
employees and contractors have been
separated from families due to border
restrictions and have faced hardships
that have become hallmarks of the
COVID-19 pandemic. On behalf of
the Board, I would like to offer my
sincere appreciation.
Finally I would like to gratefully
acknowledge the strong contribution our
former Chairman, Cobb Johnstone made
to this Company ahead of his retirement
due to ill health earlier this year.
It has been an honour to serve Aurelia
Shareholders during this interim
period and I would like to thank you
for your support. I will step down as
interim Chairman following the recent
appointment of Peter Botten as
Non-Executive Director. Peter has
accepted the Board’s invitation to
assume the permanent role of Chairman.
I extend a warm welcome to Peter.
Whilst we are living through uncertain
times as COVID-19’s delta strain remains
active in our community – Aurelia’s
disciplined approach, together with
talented people, strong and diverse
asset base, robust balance sheet and
exceptional growth pipeline, will serve
us well.
Thank you for your interest and support.
Susan Corlett
Interim Independent
Non-Executive Chairman
4
ANNUAL REPORT 2021
MANAGING DIRECTOR’S REPORT
Looking back on FY21, I’m pleased to report our performance against our strategic
priorities has significantly moved the Company towards our next growth stage.
Sustainable progression
I am proud to say the continued
deployment of our Aurelia Metals –
Safe Metals’ framework has resulted
in a 58% improvement in our Total
Recordable Injury Frequency Rate.
It is a fantastic achievement given
the addition of another mine to the
portfolio. Our commitment to safety
has never been stronger in the face of
the evolving COVID-19 pandemic. This
year we continued to protect our people
and communities with strict COVID-19
protocols, while wrapping comprehensive
crisis management plans around a
number of scenarios to protect
our business.
We are an organisation that aims to
excel through our people and superior
performance, and in FY21 we continued
to invest in our most important asset.
Aurelia conducted workshops across the
business to develop leaders’ capability
to engage employees, lift performance
and motivate discretionary effort. The
workshops were also a vehicle to launch
the Company’s new Vision and Strategy,
as well as a set of Values. Together they
are a powerful means to align Aurelia
people to our plan to deliver and
create value.
Our maturing approach to sustainability
has also delivered a significant uptick
in our environmental performance
with an 82% reduction in Reportable
Environmental Incident Frequency Rate.
Additional measures were also taken this
year in the areas of workplace diversity
and climate change, and I look forward
to reporting progress in coming years.
Maximise existing infrastructure
and assets
I am pleased to report a strong set of
physical and financial results despite
the ongoing external challenges. In
FY21, Aurelia maintained its focus on
generating cash, increasing margins
and diversifying our asset base. Our
efforts saw the Company meet or
outperform guidance with records
set at multiple levels.
Full year group production increased
across all commodities, with the
exception of copper. This result drove a
record group gold-equivalent production
of 181,000 ounces, at a Group All In
Sustaining Cost of $1,337 per ounce.
Finally, drilling at the newly integrated
Dargues Mine saw a 33% growth in
Mineral Resource Estimate tonnage
primarily in gold with more drilling
planned in FY22 to expand and extend
mine life.
With prior investment into the Peak
processing facility and significant
improvements in throughput across our
mills, the Company’s ability to generate
cash from operations improved 24% to
$136.6 million compared with $110.5
million in FY20.
Other records achieved were a 69%
increase in Underlying Earnings
Before Interest, Tax, Depreciation and
Amortisation (EBITDA) at $168.9 million;
and EBITDA at $154.1 million with a
margin of 40%, again substantially
improved from $103.4 million in FY20.
Directing capital to the highest return
Supported by our strong balance sheet
and an equity raise, Aurelia acquired
the Dargues Mine in December 2020
increasing our exposure to gold.
Our ability to generate cash throughout
the year also put us in excellent shape to
fund an extensive drilling program that
achieved a tremendous 63% increase in
our Group Mineral Resource tonnage.
The program continued to prove the high-
grade polymetallic deposit at Federation
as one of the most thrilling discoveries
in recent times. With a Scoping Study
complete, Feasibility Study underway and
permitting well progressed, we anticipate
early works from the beginning of FY22
which will be funded from operating
cash flows.
Similarly, surface drilling results at Peak
Mine indicated increased gold resources
and significant copper potential at Great
Cobar. A further increase in the Mineral
Resource Estimate (MRE) tonnage was
also achieved at Kairos. Aurelia moved to
quickly initiate a Pre-Feasibility Study and
progress Great Cobar to the next stage,
together with community consultation on
an Environmental Impact Statement.
All three prospects present organic
growth at its best and have the potential
to add significant value to a portfolio that
is gold dominant, with high value base
assets and copper ready.
Deliver long term value and
returns growth
It has been a productive year with
excellent gains made towards delivering
in the short term, while investing for
long term value.
I am disappointed our share price
has not reflected our operational
and financial performance. That
said, I believe we are about
to enter an exciting time at
Aurelia where we can grow
returns to our Shareholders and
share prosperity with everyone
who has a stake in our success.
Through maximising our existing
assets, prudently deploying
investment capital and ensuring our
growth is sustainable, we have laid the
foundation for a strong future.
Dan Clifford
Managing Director
AURELIA METALS
5
COMPANY PROFILE
About Aurelia Metals Limited
About This Report
This Annual Report is a summary of Aurelia Metals
Limited and its subsidiaries’ operations, activities and
financial position at 30 June 2021.
Aurelia is committed to reducing the environmental
impact associated with the production of the Annual
Report, and printed copies are only posted to
Shareholders who have elected to receive a printed copy.
Current and previous Annual Reports are available on the
Company’s website: www.aureliametals.com.au.
Aurelia Metals Limited (‘Aurelia’ or the ‘Company’) is an
Australian gold and base metals mining and exploration
company. Aurelia owns and operates three underground
mines and processing facilities in New South Wales:
— Peak Mine – gold, lead, zinc, copper and silver
— Hera Mine – gold, lead, zinc and silver
— Dargues Mine – gold
Aurelia’s highly prospective tenement holdings enable the
Company to advance exploration and evaluation activities,
with preeminent near-term development projects including:
— Federation Project, located in the vicinity of the Hera
Mine – zinc, lead, gold, copper and silver
— Great Cobar, located in the vicinity of the Peak Mine –
copper and gold.
Aurelia is listed on the Australian Securities Exchange
(ASX: AMI) and is headquartered in Brisbane
(Queensland, Australia).
CERTAINTY
We plan and execute well
COURAGE
We step up
OUR VALUES
INTEGRITY
We do what’s right
PERFORMANCE
We own the result
6
6
ANNUAL REPORT 2021
ANNUAL REPORT 2021
"Aurelia’s highly
prospective
tenement holdings
enable the Company
to advance
exploration and
evaluation activities.”
Dargues Mine, NSW
AURELIA METALS
7
Cobar
Great Cobar
BARRIER HIGHWAY
Canbelego
Peak
Gold
Mines
Y
A
W
N
A
M
D
K
I
LEGEND
Processing Facility
Operating Mine
Development Target
Tenement Holding
Road
Locality
C
A
N
B
E
L
E
G
O
R
O
A
D
PRIORY TANK ROAD
Nymagee
Hera
B
A
L
O
W
R
A
R
O
A
D
Federation
D
A
O
D R
O
O
W
GLEN
Hera-Federation
Complex
NSW
Cobar
Nymagee
Peak Mine
Sydney
Canberra
Dargues Mine
THE PORTFOLIO
Three cashflow producing assets
concentrated in NSW with a focus on gold.
K
I
N
G
S
H
I
G
H
W
A
Y
D
A ROA
NERRIG
LEGEND
Processing Facility
Operating Mine
Development Target
Tenement Holding
Road
Locality
BOMBAY ROAD
Braidwood
L
T
L I T
E R I V E R R O A D
KINGS HIGHWAY
A
R
A
L
U
E
N
R
O
A
D
D
A
O
A R
M
O
O
C
D
A
O
R
K
E
E
R
C
S
R
O
J
A
M
Dargues Reef
Majors creek
Araluen
8
ANNUAL REPORT 2021
BUSINESS REVIEW
Strategy and Business Model
Aurelia’s strategy is underpinned by
its core Values.
Our Values guide the way our employees
work to ensure the safety and wellbeing of
our people and communities, and how we
work to the benefit of our Shareholders and
the communities in which we operate. Aurelia
is committed to minimising environmental and
carbon impacts at our operating mine sites
and in planning for the development of
new projects.
Aurelia’s objective is to maximise returns
from its producing assets while advancing
exploration and development projects
with the potential to sustain and grow
the business in the long-term. Fundamental
to these activities is the Company’s
contribution as a trusted, valued and
sustainable mine operator.
“Our essence will
be our people
and superior
performance."
AURELIA METALS
9
KEY FINANCIAL OUTCOMES
Group Financial Measure
Revenue
Net profit after tax
Underlying net profit after tax
Operating cashflow
EBITDA
Underlying EBITDA
Underlying EBITDA margin
Unit
$’m
$’m
$’m
$’m
$’m
$’m
%
FY21
416.5
42.9
57.4
FY20
331.8
29.4
25.6
136.6
110.5
154.1
168.6
40
103.4
99.6
30
% Change
+26
+46
+125
+24
+49
+69
+33
10
ANNUAL REPORT 2021
OUR VISION
A mining business recognised for creating exceptional value through our people and a portfolio of gold and base metals assets.
Our Strategy
Simple, durable and returns focused
Sustainable
progression
Maximise existing
infrastructure and assets
Direct capital to
the highest return
— An organisation that excels through
our people and superior performance
— Leverage off a strategic asset base
in the Cobar Basin and regional NSW
— A trusted, sustainable and
beneficial presence in the areas in
which we operate
— Maximise returns via life
extensions and operating
discipline driving margin
— Growth profile underpinned by
financial discipline and tension
for the $’s deployed
— Gold dominant, high value asset
base, ‘copper ready’
Deliver long term value and returns growth
— 4 – 5 mine asset portfolio continuously driving Group cost and Reserve improvement
— Cycle proofed mine lives and commodity mix
Our Values
Integrity
Certainty
Courage
Performance
We do what’s right
We plan and execute well
We step up
We own the result
AURELIA METALS
11
FY22 OUTLOOK
Central to our business plan is a philosophy of
continuous improvement that builds upon the
primary pillars of our business:
— health
— safety
— environment and community
— people and organisation
— operations
— growth, and
— and financial outcomes.
We will continue to build upon the significant
achievements of FY21 and deliver identified
initiatives in the near term. The FY22 outlook for the
key production and cost measures in comparison to
FY21 is summarised below.
Group Measure
Unit
FY22
Outlook
FY21
Actual
Gold production
koz
112 – 123
Lead production
Zinc production
Copper production
kt
kt
kt
24.5 – 27.0
31.0 – 34.5
3.5 – 4.0
104
25.9
25.1
4.7
All-In Sustaining
Costs (AISC)*
$/oz
1,500 – 1,700
1,337
Sustaining capital
Growth capital
Exploration and
evaluation
$’m
$’m
$’m
61 – 69
16 – 18
28 – 31
48
26
25
* Excerpt from page 10 of FY21 Financial Results
and Outlook presentation available on the ASX.
* Group AISC is the total of on-site mining, processing and administrative costs, inventory adjustments, royalties, sustaining capital, corporate general
and administration expense, less by-product credits, divided by gold sold. By-product credits include silver, lead, zinc and copper sales forecast over the
outlook period.
Estimated FY22 Group AISC of A$1,500 to A$1,700/oz is based on reference base and silver metal prices of: lead A$2,657/t, zinc A$3,533/t, copper
A$12,012/t and silver A$29.5/oz. Final AISC results will depend on the actual sales volumes, actual operating costs and actual prices of base metals received
over the outlook period.
Hera Mine, NSW
12
ANNUAL REPORT 2021
GOLD
(KOZ)
COPPER
(KT CONT.)
ZINC
(KT CONT.)
LEAD
(KT CONT.)
92
104
112-123
6.3
4.7
3.5-4.0
20.1
25.1
31.0-34.5
21.6
FY20
25.9
FY21
24.5-27.0
FY22e
Group gold equivalent
production (koz Au eq)1
-200
181
+10%
153
+18%
Our Outlook
112-123
104
92
54.3
55.7
65.5
Contained metal
The polymetallic ore
types extracted from
the Peak and Hera Mines
provide significant lead,
zinc, copper and silver
by-product credits that
provide a natural hedge
for our gold dominant
asset base. The above
graphic illustrates the
significant value of
the by-product credits
generated.
FY20
FY21
FY22e
Payable Gold
Payable Copper / Zinc / Lead / Silver (koz Au eq)
1. FY22e based on mid-point of stated Aurelia Group production and cost guidance and budgeted FY22 precious and base metal prices (plus assumed
realised gold price of A$2,308/oz, lead A$2,657/t, zinc A$3,533/t, copper A$12,012/t and silver A$29.5/oz); FY21e only includes Dargues contribution from
point of economic ownership (17 December 2020 onwards). Copper, zinc, lead and silver production is payable metal-in-concentrate volumes (as disclosed in
Aurelia’s quarterly activities reports) and is converted to gold equivalent payable volumes using realised prices achieved by Aurelia during the specific year
(as disclosed in Aurelia’s quarterly activities reports) and via the following formula: Payable Cu/Zn/Pb/Ag (koz Au eq) = (Payable Cu produced (kt) * Cu price
realised (A$/t) + Payable Zn produced (kt) * Zn price realised (A$/t) + Payable Pb produced (kt) * Pb price realised (A$/t) + Payable Ag produced (koz) * Ag
price realised (A$/oz)) / Au price (A$/t).
AURELIA METALS
13
STRATEGY PROGRESSION
Organic growth which will leverage
existing infrastructure.
Aurelia has established growth objectives and
strategies to generate future value and long term
returns at each of our mine sites. Our strategy
leverages the benefits of existing infrastructure
and a prospective tenement holding.
Our primary internal growth projects are located
at all of our existing sites.
14
ANNUAL REPORT 2021
Hera Mine, NSW
AURELIA METALS
15
HERA FEDERATION
Overview
The Hera Mine is a polymetallic underground mining
operation and associated 450ktpa processing plant,
located approximately 100km south-east of Cobar, NSW.
FY21 Production
Gold
Lead
Zinc
oz
t
t
31,369
10,064
14,268
Federation to leverage Hera infrastructure
The established Hera Mine is approaching
the end if its economic life with the
Ore Reserve expected to be depleted
in FY23. The Company is therefore
evaluating development options for the
nearby Federation deposit that is located
approximately 10 kilometres south of the
existing Hera Mine.
The Federation deposit was discovered
in FY19. The Company has moved swiftly
to progress exploration and evaluation
activities. An aggressive exploration program
will continue into FY22 to improve geological
confidence in the deposit and test extensions
in multiple directions. Given the high-grade
tenor of the deposit, Aurelia considers
Federation to be one of the most significant
discoveries in the region in the last 30 years
(refer to section 3.1 of the Operations and
Financial Review section of this report
for further detail).
The proposed development of the
Federation deposit benefits from
processing options, including
established infrastructure and
footprint of the Hera Mine, as
well as processing capability
within trucking distance to
the Peak Mine. A project
Feasibility Study (FS) is
underway and scheduled to
be completed in mid-FY22.
Aurelia has also initiated
baseline surveys, permitting
and enabling works to
support the Federation Project
development. These activities
will continue in FY22.
16
ANNUAL REPORT 2021
The anticipated development schedule is
summarised below.
Federation
Resource Update
North Pod Mine
Development
Federation
Discovered
Scoping
Study
Maiden
Federation
Resource
Federation
Resource
Update
Federation
Maiden Ore
Reserve
CY2018
CY2019
2020
2021
2022
2023
2024
2025
Federation Schedule
1HCY21 2HCY21 1HCY22 2HCY22 1HCY23 2HCY23 1HCY24 2HCY24 1HCY25 2HCY25
EIS Preparation and Approval
Feasibility Study (FS)
Exploration Decline
Hera Plant Construction
Development and Early Production
Full Production
— Commences once
approvals received
— Either upgrade or
a new plant
— Early production milled
at Peak and/or Hera
AURELIA METALS
17
PEAK MINE
Overview
Peak Mine is comprised of several polymetallic
underground mines plus an 800ktpa gold and base
metals processing plant, located in the northern part of
the Cobar Basin in NSW.
FY21 Production
Gold
Copper
Lead
Zinc
oz
t
t
t
57,080
4,720
15,829
10,791
Kairos ramp-up and Great Cobar development
The infrastructure and recently expanded processing facility at
Peak enables the treatment of various polymetallic ore types
to produce separate copper, lead and zinc concentrates. Ore is
processed in campaigns based on the nature of the polymetallic
mineralisation mined from the different orebodies.
The volume of ore processed will continue to ramp-up as new
mining areas are accessed and brought into production, including
the Kairos lode (gold, lead, copper and zinc) and Chesney deposit
(copper). Aurelia is also evaluating the development of the Great
Cobar deposit (copper with minor gold).
The Kairos lode is situated below the Peak Mine workings with
access to the orebody and ventilation, and egress development
completed in late FY21. Kairos stope production commenced in
June 2021 and will steadily ramp-up in FY22 and FY23 as access
to the lower and upper portions of the orebody are established.
The Kairos system remains strongly mineralised and open at
depth. Infill drilling and extensional diamond drill programs are
ongoing and will continue in FY22.
Aurelia is progressing work
on a Prefeasibility Study
(PFS) to examine potential
mining scenarios for the
Great Cobar deposit that
is located approximately
7km north of the Peak
Mine. The Company plans
to access the deposit via
development of an approved
exploration decline from
the existing New Cobar
workings. A recent infill
drill program supported
an increase to the Mineral Resource Estimate (MRE) tonnage
for Great Cobar by 43% to 5.8Mt (refer to ASX announcement
dated 23 July 2021: Group Mineral Resource and Ore Reserve
Statement). The updated MRE is being used for mine design
activities being undertaken for the PFS. The PFS is on schedule to
be finalised at the end of CY21 and, pending a positive outcome,
will allow the declaration of a maiden Ore Reserve estimate at
Great Cobar.
18
ANNUAL REPORT 2021
The anticipated development schedule for Great Cobar is summarised below.
Peak Mine
Acquired
Kairos
Discovered
Pb/Zn Mill
Upgrade
Completed
First Kairos
Stoped Ore
Great Cobar
(GC) Maiden
Ore Reserve
Mineral Resource
and Ore Reserve
(MROR) Update
CY2018
CY2019
2020
2021
2022
2023
2024
2025
Great Cobar Schedule
1HCY21 2HCY21 1HCY22 2HCY22 1HCY23 2HCY23 1HCY24 2HCY24 1HCY25 2HCY25
EIS Preparation and Approval
Pre-Feasibility Study (PFS)
Exploration Decline
Mine Development
Production
AURELIA METALS
19
DARGUES MINE
Overview
Production
Period from 17 Dec 2020 to 30 June 2021
Dargues Mine is a gold mining and milling operation
located in the southern tablelands of New South
Wales, approximately 60 km south-east of Canberra. It
comprises an underground mine, processing plant and
associated surface facilities.
Ore Processed
Gold Grade
Gold Recovery
Gold Production
kt
g/t
%
oz
170,804
2.93
93.5
15,186
Dargues integration and ramp-up
Following the acquisition of
Dargues Mine on 17 December
2020, the Company successfully
integrated the new asset into its
portfolio and continued efforts to
ramp up the asset. Given Aurelia’s
investment thesis that the asset was
underdrilled, an immediate priority
was the Phase 1 drill program.
The program comprised a surface
drilling campaign to extend the
known limits of the deposit and
an underground infill diamond
drilling program to better define
the deposit, improve confidence in
the MRE and inform the new grade
control model. These programs have
been successful and have informed
the Phase 2 drill program that will
test areas along strike to the west
of the Main Lode and to the east of
Plums Lode that have sparse
drilling results.
Findings from the drill programs
and mine planning activities
will be incorporated into
environmental assessments
that are expected to
underpin regulatory
approvals that seek to
increase the approved
mine life and annual ore
processing rates at the
Dargues Mine.
20
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ANNUAL REPORT 2021
ANNUAL REPORT 2021
Integration
achieved
New MROR
Estimates
Nameplate Mine
Throughout
Achieved
MROR
Update
Phase 2
Drilling
Phase 1
Drilling
Dargues
Mine
Acquired
CY2018
CY2019
2020
2021
2022
2023
2024
2025
Potential Expansion Schedule
1HCY21 2HCY21 1HCY22 2HCY22 1HCY23 2HCY23 1HCY24 2HCY24 1HCY25 2HCY25
Phase 1 Drilling – infill
and extensional
Phase 2 Drilling – extensional
Environmental assessments
and regulatory approval
Further detail on our operations and growth projects are detailed in the Operations and Financial Review section of this report.
AURELIA METALS
AURELIA METALS
21
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SUSTAINABILITY
Material Topics
Our Approach to Sustainability
Building and maintaining a trusted, sustainable, and
beneficial presence in the areas in which we operate is
essential to Aurelia’s success. Our approach to sustainability
is aligned with our Vision and Values and aims to deliver
business and stakeholder value across all aspects of the
business from exploration to closure. We are embedding
sustainability within our business, and we are committed to:
— the health and safety of those impacted by our
operations, including our employees, contractors, and
host communities
— environmental stewardship including conservation
of biodiversity, efficient use of resources, pollution
prevention and minimisation of environmental impact
— building resilience to climate change risks
and minimising and managing greenhouse gas emissions
and other climate change impacts
— recognising and respecting the deep connection First
Nations peoples have with the land and operating in a
way that protects their cultural heritage
— building trusting, transparent, and long-term
relationships with our communities
— contributing positively to our communities through
programs that respect their aspirations
— respecting and promoting human rights
— applying ethical and transparent business practices, and
— complying with applicable laws, regulations,
licences and commitments.
Our action in these areas demonstrates our
commitment to sustainability. To achieve our strategy,
we recognise the need to continually improve,
understand, benchmark, and address emerging issues
of importance to ourselves and our stakeholders.
Aurelia’s sustainability report aligns with the requirements
of the Global Reporting Initiative (GRI). A desktop materiality
assessment was undertaken to identify the issues of
importance to our stakeholders and business. The material
topics for FY21 are outlined below and addressed in
this report.
Sustainability Governance
Board and Sustainability and Risk Committee Oversight
Business Conduct
Risk Management
Sustainability Approach
Modern Slavery
Our People
Health and Safety
Building a Safety Culture
Fatal Hazards and Critical Control Verification
TRIFR Reduction
COVID-19 Response
Human Resources
Employee Engagement
Remuneration Framework and Performance Cycle
Training and Development
Diversity and Inclusion
Our Communities
Stakeholder Engagement
Local Procurement and Investment
Economic Contribution
First Nations Engagement and Cultural Heritage
Environmental Performance
Climate Change
Tailings and Waste Rock Management
Water Management
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ANNUAL REPORT 2021
Peak Mine, NSW
AURELIA METALS
23
SUSTAINABILITY (CONTINUED)
FY21 OBJECTIVES, TARGETS AND PERFORMANCE
Focus
Objective
Targets
Performance / Achievements
Governance
Embed governance
and oversight
processes
— Develop Department-level risk registers
— No overdue actions for the Senior
Management Taskforce for Significant
Incidents
— Develop HR Governance Practices through
establishment of ‘The Aurelia Way’ (updated
and expanded Code of Conduct) which
incorporates the Code of Conduct and
supporting policies, standards and procedures
— Supply chain assessment including modern
slavery review
— Group risk register in place
— Good progress in moving significant incidents through the taskforce,
however, there are overdue actions. Nineteen High Potential Risk
Incidents were taken to the taskforce in FY21.
— Draft of ‘The Aurelia Way’ (Code of Conduct) prepared for internal review
— Modern slavery statement including high level supply chain assessment
undertaken
Improve
sustainability
communications
— Expand depth of sustainability reporting on
external platforms, including website and
engagement with stakeholders
— Increased engagement with stakeholders. Further work required on
external platforms
Provide support
systems
— Integrated Human Resources Framework and
— Integrated HR Framework developed and implemented
Human Resources Information System
Safety
No fatalities
TRIFR reduction
— Expand on lead indicator program
— Develop Fatal Hazard Standards accompanied
— Lead indicator program in place across the business. At FY end, the
Group achieved 83% compliance to the program
by Critical Control Verification program
— Four Fatal Hazard Standards and associated critical control programs
developed and implemented
— TRIFR reduction of 21.88 to 9.1 (58% improvement)
— A number of employees trained in ICAM incident investigation
techniques
— Senior Management Taskforce for Significant Incidents to provide
oversight of investigations into High Potential Risk Incidents and Group
actions to prevent reoccurrence
— Engaged with the workforce on safety through the diversity deep dive
Human
Resources
Define corporate
identity
— Establish and embed Aurelia’s Vision
— Aurelia’s Vision and Values were established and continue to be rolled-
and Values
out to our workforce in FY22
Engage employees
— Implement sustainability actions from Business
— All sustainability actions identified in the Business Effectiveness Review
Effectiveness Review
were resolved/implemented in FY21
— Complete inaugural Employee Engagement
— Diversity and Inclusion (D&I) Deep Dive including D&I Engagement
Survey
Survey completed
— Full Employee Engagement Survey to be conducted in FY22
Attract, retain and
motivate
— Sustainability measures included in Short Term
Incentive Plan (STIP)
— All employees had sustainability measures of TRIFR, Compliance to the
Lead Indicator Program and development of Fatal Hazard Standards
included their Short Term Incentive
Develop talent
— Implementation of Leadership Development
Program and competency framework, which
includes safety leadership
— The Leadership Capability Program was rolled out to all Superintendents
and above. Supervisors will be trained in FY22
— Commenced development of the competency framework through
establishing skills matrices
Community
Engage with
community and
stakeholders
Environment
No significant
environmental
incidents
— Support the communities in which we live
— Approximately 40% of Aurelia’s procurement was within our local
and operate through opportunities for local
employment, supporting local businesses, and
participation and support of community events
and community organisations
— Conduct community and stakeholder
engagement in accordance with engagement
matrix
— Embed oversight and governance processes
for critical infrastructure on site (eg. tailings
storage facility)
— Implement Green Rules
— Development of Group Environment Standards
accompanied by Critical Control Verification
program
— Improve the Group Reportable Environmental
Incident Frequency Rate
regions
— Approximately $644k was donated to local community events and
organisations
— Community engagement conducted as part of proposed developments
(Great Cobar and Federation). Stakeholder mapping and community
investment strategy to be completed in FY22
— All Community Consultation Committees held during COVID-19 through
alternative platforms
— As part of the Dargues acquisition, Aurelia undertook targeted
consultation at all levels resulting in a significant decrease in community
complaints under our ownership
— Tailings storage governance and standards are now planned for
completion in FY22
— Green Rules implemented
— Group Hazardous Materials Standard and associated critical control
program developed and implemented
— 82% reduction in Group Total Reportable Environmental Incident
Frequency Rate
Not started
In progress
Complete
24
ANNUAL REPORT 2021
SUSTAINABILITY (CONTINUED)
FY22 OBJECTIVES
Focus
Risk
Safety
Objective
Targets
Establish operational risk register with
active management of risk profiles
— Tailings storage governance and standards are now planned for completion in FY22
— Hazardous materials Group standard and associated critical control program developed and implemented
No fatalities
TRIFR reduction (9.1 to 7.3)
No High Potential Recordable Incidents
(HPRIs) with repeat causes
— Continued development of Fatal Hazard Standards accompanied by Critical Control Verification program
— Lead indicator program compliance
— Develop a Group Contractor Management Standard
— Continue Senior Management Taskforce for Significant Incidents to assess High Potential Risk Incident
investigation findings and verify action close-out to prevent reoccurrence
Human
Resources
Define corporate identity
— Embed Aurelia’s Vision and Values
— Launch and train employees in The Aurelia Way (updated Code of Conduct)
Engage employees
— Complete inaugural Employee Engagement Survey and identify actions including initial priority actions
Attract, retain and motivate
— Develop and implement a HR strategy to target a reduction in voluntary turnover
— Extend the Remuneration Framework Grading Structure and Achievement and Development Plans to Trade and
Operator-level
Develop Talent
— Continued implementation of Leadership Development Program and 360-degree development plans for
supervisors and above
— Develop and implement a strategy to attract, promote and retain diverse talent
— Establish a succession planning process
Diversity and Inclusion (D&I)
— Report on outcomes from the D&I Deep Dive Findings to workforce
— Establish a D&I Working Group
— Establish a D&I Strategy and measurable objectives
— Develop and execute targeted strategy to prevent sexual harassment. Complete priority actions
Community
Engagement with community and
stakeholders
— Finalise stakeholder mapping
— Re-focus our social investment program
Climate
change
Reduce carbon footprint
— Evaluate low emission opportunities during Federation Feasibility Study (FS)
— Commence Taskforce on Climate-related Financial Disclosures (TCFD) Project with baseline assessment as first
stage of a planned pathway towards de-carbonisation
Environment
No significant environmental incidents
— Develop governance process and standard for tailings
Dargues Mine, NSW
AURELIA METALS
25
SUSTAINABILITY
GOVERNANCE
Board of Directors
The composition of Aurelia’s Board of Directors is detailed within the
Director’s report (page 60-62).
Aurelia has a Board Skills Matrix to capture the current mix of skills,
competencies and diversity on the Board to assess whether there are any
areas which need to be strengthened in relation to the Company’s long-
term strategy. The Board aims to ensure Shareholders are provided with
all information necessary to assess the performance of the Company and
the Board. Regular investment calls and the Annual General Meeting are key
engagement mechanisms whereby Aurelia seeks to understand the views of
Shareholders and disseminate Company information.
Sustainability and Risk Committee
The Sustainability and Risk Committee assists the Board in matters pertaining
to sustainability of the Company including safety, health, environment, climate
change, community relations (social responsibility) and risk management. In
particular, the Committee is responsible for satisfying itself that measures,
and systems and controls are in place in relation to managing sustainability
issues and incidents that may have material strategic, business and
reputational implications for the Company and its stakeholders.
The Sustainability and Risk Committee met seven times in FY21.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee assists the Board with
Human Resource matters including:
— ensuring remuneration practices are designed to support the
Company’s vision, strategy, Values, policies and short and long-term
sustainable success
— meeting commitments to diversity, equality and inclusion
— making recommendations in relation to the size and composition of
the Board, including the necessary and desirable skills, experience
and diversity.
The Remuneration and Nomination Committee met eight times
in FY21.
Business Conduct
We are close to finalising our updated Code of Conduct, The Aurelia
Way, which encompasses our Values and guides all aspects of
the business, from how we conduct ourselves to the day-to-day
decisions we make, and to the standards that we apply.
It describes how we should interact internally with our colleagues,
as well as externally with our stakeholders, as we go about
managing the business. Our Values underpin The Aurelia Way to
clearly outline expected behaviours by setting boundaries to help
guide Aurelia people as they exercise good judgment.
We encourage employees, contractors, and stakeholders to feel
safe to come forward without fear of retaliation to report conduct
they reasonably believe may be illegal, unethical or inconsistent
with our Values and standards. Aurelia’s independent external
Whistleblower service – STOPline, is a mechanism for employees
and contractors to report concerns where internal avenues are
not appropriate.
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ANNUAL REPORT 2021
ANNUAL REPORT 2021
Hera Mine, NSW
“With sustainability in our core,
Aurelia’s focus in FY22 will be on
continuous improvement in the
areas of safety (including gender
safety), wellbeing, environmental
and community management,
and responsible stewardship of
natural resources.”
AURELIA METALS
27
Further work on modern slavery in FY22 includes the rollout of
‘The Aurelia Way’, continued due diligence of our supply chain for
modern slavery risks, engagement with suppliers considered to
represent a greater risk, and modern slavery training within the
Aurelia business.
Sustainability Approach
Our approach to sustainability is guided by our Vision and Values.
Aurelia has developed a 3-year Sustainability Plan to guide our
sustainability efforts. The plan was developed as a result of the
Company’s inaugural sustainability planning workshop which
included sustainability representatives from within the business
and our key contractor.
The plan has been approved by Aurelia’s Board and identifies
fundamental projects that are essential to improve our
sustainability approach and performance. Our priority is to
focus on the standards and systems that will establish a strong
foundation for Aurelia to build on and maintain a trusted and
sustainable operating presence.
Aurelia’s 3-year Sustainability Plan addresses three key pillars:
1. Sustainability Governance – addressing Sustainability
and Risk Committee and Board oversight, development
and implementation of Group-wide sustainability
standards, and external sustainability reporting.
2. Environmental Performance – addressing key
environmental risks including legal compliance, tailings
management, greenhouse gases and climate change.
3. Social Performance – addressing key social risks
across People (diversity and inclusion, leadership
training and development), Health and Safety (Fatal
Hazards, legal compliance, and health and wellbeing)
and Communities (stakeholder engagement,
social investment and cultural heritage).
SUSTAINABILITY GOVERNANCE (CONTINUED)
Risk Management
In FY21, Aurelia established a risk management framework
(Policy, Standard and Procedures) aligned with the International
Standard for managing risk ISO31000:2018. The framework
addresses our day-to-day risks up to strategic Company risks.
Through the rollout of this framework, the Company made
significant progress in its risk management capability, including:
— refreshing our risk management tools including our Take 5s,
job hazard analysis and our risk register template for use
across our sites
— establishing a Group risk register, quarterly review and
monthly risk owner reviews at our senior leadership meetings
— developing risk registers to support our projects
— establishing a process for reporting of our Group risk profile
to the Sustainability and Risk Committee and Board
— establishing our approach for the management of fatal and
catastrophic risks including the monitoring and verification of
the effectiveness of critical controls
— the development of a risk appetite statement to an
advanced state.
Modern Slavery
Aurelia is committed to operating honestly and ethically with
respect to human rights across our operations and supply chain.
We see this as a fundamental element to our social responsibility
and the sustainability of our operations.
In FY20, a Modern Slavery Working Group comprising
representatives from head office and site with a cross section
of functional areas (legal, finance, procurement, sustainability,
human resources) was established to identify and pursue actions
to assess and address modern slavery risks. Some of the key
actions taken in relation to modern slavery include:
— Governance – the Aurelia Metals Board of Directors and
management were made aware of the Company’s obligations
and responsibilities in relation to modern slavery
— Engaging specialists – an independent, modern slavery
specialist was engaged to prepare and commence Aurelia
Metals’ modern slavery compliance strategy. The work
included undertaking a governance review and gap analysis
in relation to Aurelia Metals’ current policies and procedures,
and commencing a desktop due diligence assessment of our
suppliers to map our supply chain and identify any modern
slavery risks. This supplier assessment will be embedded into
our tender and supplier onboarding processes
— Updated contract templates – our standard template
contracts were updated to include modern slavery
obligations including compliance with laws, and training
and reporting obligations.
In FY21, Aurelia published its first Modern Slavery Statement
under the Commonwealth Government’s Modern Slavery Act
2018 (Cth) for the reporting period from 1 July 2019 to 30
June 2020. The Company will report against our actions in this
statement in FY22.
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ANNUAL REPORT 2021
ANNUAL REPORT 2021
SUSTAINABILITY GOVERNANCE (CONTINUED)
Sustainability Plan
FY22
FY23
FY24
— External sustainability presentation
— External sustainability presentation
to Board
— Launch The Aurelia Way
— Employee Engagement Baseline Survey
and action plan
to Board
— Employee Pulse Survey
— Establish Audit Program – High Risks
— Implement Employee Engagement
— Establish operational risk profiles
Action Plan
— External sustainability presentation
to Board
— Employee Engagement Survey
— Audit High Risks
— Annual Sustainability Strategy Workshop
— Contractor Management Standard
— Document Management System
— Update Crisis Management Framework
— Sustainability Reporting
— Annual Sustainability Strategy
Workshop
— Develop Sustainability Standards
— Crisis Management Training
— Sustainability Reporting
— Annual Sustainability Strategy
Workshop
— Crisis Management Training
— Mapping to Sustainability Frameworks
— Sustainability Reporting with external
assurance
— Embed Critical Control Verification Program
— Improve oversight of medicals and rehabilitation
— Legal compliance audit and action close out
— Finalise Fatal Hazard Standards
— Develop Health Standards
— 5 Safe Behaviours training
— Audit Program for Fatal Hazard Standards
— Implement Health Standards
— Diversity and Inclusion Strategy
— Establish measurable diversity and inclusion
objectives and actions
— Leadership Development Program to Supervisor
level
— Establish succession planning process
— Training and competency matrix fully established
— Implement Diversity and Inclusion actions
— Succession planning fully implemented
— Graduate and apprentices’ strategy
— Implement graduate and apprentice
actions
— Implement Mentoring Program
— Commence Leadership Development
Program cycle
— Stakeholder mapping
— Renew Social Investment Program
— Cultural heritage gap analysis
— Community Perception Survey
— Develop Social Standards
— Implement Social Standards and
commence verification
— Greenhouse gas, energy, and water
data evaluation
— Tailings Standard and governance
— TCFD Project (risk and opportunity
review)
— Environmental Legal Compliance Audit
— Develop Environmental Standards
— TCFD Project (Financial Modelling and
Climate Change Position)
— Implement Environmental Standards
and commence verification
— Implement Climate Change Position
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AURELIA METALS
29
OUR PEOPLE
Health and Safety
We are committed to protecting the health and safety of
our employees and contractors, and the communities where
we operate.
We believe every injury is preventable and no task is so important
that it cannot be done safely. Our efforts to strengthen the
foundation of our health and safety framework will support the
business to build a culture where everyone owns and actively
contributes to achieving safe outcomes.
Our Approach
Our approach to safety is governed by our Vision and Values
and the commitments we make in our Sustainability Policy.
In FY20, we developed the ‘Aurelia Metals – Safe Metals’
Strategy which guided our efforts to improve performance.
Safe Metals has been adjusted for FY22 to focus further on
risk management.
Component 1: Interventions
Component 2: Risk
Continued identification and targeting of areas
requiring intervention. This is supported by the
lead indicator program where supervisors and
above undertake interactions and inspections; and a
Senior Management Taskforce provides oversight of
investigations into High Potential Risk Incidents and
develops group actions to prevent recurrence.
Enhanced approach to risk through the
implementation of risk tools and coaching
of front line leaders to ensure effective
management and oversight of operational
and strategic risks.
Component 3: Fatal Hazards
Component 4: Supporting Systems
Continued establishment of Fatal and
Catastrophic Hazard Standards supported by
Critical Control Verification (CCV) programs.
Enhancing our systems and tools to support
our operations in the management and
oversight of risk, health and safety, and
contractor management.
Our site management systems provide the framework for our
approach to health and safety. These systems continue to evolve
and improve with a key focus being the development of Group-
wide standards and processes to support our operations.
Risk management is central to health and safety. Our risk
management framework is tiered and addresses the day-to-day
hazard identification requirements through to risk assessments
for the Group.
Aurelia has eight clear and simple ‘Rules to Live By’. All Aurelia
employees and contractors have been trained in these rules
and they must comply with them. The rules provide clear
expectations to address safety issues that could lead to serious
injuries or fatalities at our operations.
The Company requires all employees, contractors, and visitors to
undergo a safety induction prior to entering an Aurelia operation.
Aurelia also facilitates mandatory safety training and specialist
training for high-risk activities. We conduct a training needs
analysis by role.
In FY21, Aurelia implemented one event management platform
for all our sites. All incidents and events are tracked and
investigated. The investigation and management of significant
incidents continues to be overseen by the Senior Management
Taskforce for Significant Incidents.
30
ANNUAL REPORT 2021
The Taskforce is comprised of members of the Executive
Management Team responsible for ensuring appropriate
consideration and action is taken for the Group-wide implications
of significant incidents and any emerging sustainability concerns.
This ensures that findings and recommendations are shared
across the business and are not limited to the incident and
affected personnel only. Once significant incidents go through
the Taskforce, they are then presented to Aurelia’s Sustainability
and Risk Committee. An executive from another site will then
complete final verification of action close out. Nineteen High
Potential Risk Incident events were presented to the Taskforce
throughout the financial year, which resulted in a number of
significant actions being implemented across the business to
prevent reoccurrence of incidents.
Our safety performance
At the end of FY21 our Total Recordable Injury Frequency Rate
(TRIFR) was 9.1 which was a 58% improvement on our FY20 TRIFR
of 21.9. This is a significant achievement given the acquisition and
integration of Dargues Mine into our portfolio, and the ongoing
increased workload and management of our COVID-19 response
to protect our employees, communities, and operations.
OUR PEOPLE (CONTINUED)
Lead indicators currently tracked as part of the program
include proactive conversations, observations, and inspections.
When undertaken, these activities demonstrate visible safety
leadership and help us to determine how effective our safety
understanding and controls are throughout the business.
Fatal Hazards and Critical Control Verification
In line with Safe Metals, fatal hazards are being established
across the Group as part of our goal to safeguard against
fatalities. In FY21, we established four standards as part of this
program: Mobile Plant and Traffic, Tyres and Rims, Hazardous
Energy, and Hazardous Materials. Under the program, we
identified the top 15 fatal and catastrophic hazards that are
common within the industry and our business. Each hazard is
supported by fatal/catastrophic hazard standard and a Critical
Control Verification (CCV) program. In FY22, we will continue
to develop standards and CCV programs for the remaining
identified hazards.
The Group-wide fatal/catastrophic standards set the minimum
mandatory requirements for our operations and include
risk assessment, engineered environment, fit for purpose
equipment, and operating and people controls. Each standard
is supported by a CCV program that has been established
in line with the International Council on Mining and Metals’
good practice guide. The CCV programs are part of the lead
indicator program. Any serious weaknesses in critical controls
are escalated in the business to ensure close out by the site
General Manager and oversight by the Chief Operating Officer,
Managing Director and General Manager Risk
and Sustainability.
TOTAL RECORDABLE INJURY FREQUENCY RATE
(per million hours worked)
Year ended 30 June
FY20
FY21
Hera
Peak
Dargues
Group
29.1
18.8
-
21.9
11.4
8.8
11.0
9.1
Material topics related to Health and Safety in FY21 included:
— injury reduction – see TRIFR reduction case study
— building a Safety culture
— Fatal Hazards management
— COVID-19 response.
Building a Safety Culture
Aurelia’s approach to building a safety culture is twofold:
leadership training supported by a 360-degree profile and
development plan; and lead indicator expectations.
Aurelia’s leadership capability program was established in FY21
through the Leadership Development Framework underpinned
by a capability model aligned to our Values. Aurelia’s leadership
capability model includes the required behaviours and
capabilities for leadership roles at different levels within the
organisation. These behaviours are fundamental to strong
leadership across all aspects of our business including safety.
Leaders from Superintendent and Senior Professional-level
through to the Managing Director were trained in the model
in FY21 and they are now completing 360° Leadership Profiles
to identify strengths and development opportunities in their
leadership capabilities.
Aurelia’s lead indicator program was introduced in FY21.
Lead indicators are proactive – they drive awareness and
improvements in safety. The program includes a
requirement for supervisor roles and above
to complete a required number of lead
indicators on a monthly basis.
AURELIA METALS
31
OUR PEOPLE (CONTINUED)
Case Study
Our TRIFR Reduction Journey
At the end of FY21, Aurelia achieved a 58% reduction in TRIFR
for the Group. We are incredibly proud of this achievement.
Our people were the drivers for this performance, with our
‘Aurelia Metals – Safe Metals’ strategy being the framework
for change.
At the end of FY20, Aurelia’s TRIFR was 21.9 and had
been continually on the rise for the past 12 months. This
performance was unacceptable and led to the introduction of
the 'Aurelia Metals – Safe Metals' Strategy in June 2020. This
included targeted safety stops, safety interventions for areas
that were experiencing heightened incidents, introduction of
Rules to Live By, and requirement for all leaders to complete
lead indicators. This program was established targeting a 50%
reduction in TRIFR by end of FY22. To have exceed that target
in one year is outstanding.
GROUP TOTAL RECORDABLE INJURY FREQUENCY RATE
(12-month moving average)
25
20
15
10
5
0
58% reduction YTD
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ANNUAL REPORT 2021
'Safe Metals' covers four key pillars
Intervention
Intervention plans were developed and implemented in areas
of the business where a history of poor safety performance was
apparent. These interventions included stopping the business for
safety discussions for sites/areas that had heightened incidents,
engagement sessions with employees and contractors, targeted,
regular observations and inspections, improved oversight of key
contractors, and the introduction of additional controls for high-
risk activities.
Rules to Live By
The Rules to Live By continued to be deployed throughout
FY21. The rules are included in inductions and training with high
visibility across the operations on noticeboards, Take 5 booklets
and established signage.
Fatal Hazard Standards
Work commenced on the Fatal Hazard Management program
with the establishment of four standards: Mobile Plant and
Traffic, Tyres and Rims, Hazardous Energy, and Hazardous
Materials. Each standard is supported by a CCV program that is
linked to the lead indicator program, including addressing
any deficiencies.
Continuous Improvement
We continue to strengthen our systems to establish strong
foundations to support our health and safety programs and
performance. In FY21, our risk tools were updated including
a new Group-wide Take 5, Job Hazard Analysis (JHA), and risk
assessment process; and we expanded our event management
system to cover all our operations. We now have one system
for all sites. In FY21, we also worked on improving our incident
investigation process facilitating Incident Cause Analysis Method
(ICAM) training and further embedding the Senior Management
Taskforce for Significant Incidents. Throughout the year, 19 High
Potential Risk Incidents were presented to our taskforce with
group actions identified to prevent reoccurrence at
our operations.
“I am immensely proud of the dedication of our
teams to improve safety performance. A 58%
reduction in TRIFR is outstanding and well
beyond expectations – in one year, we achieved
what we set out to achieve over two. A well-
considered, multi-faceted approach with the
drive of our leaders and dedicated teams was
fundamental to our success. It took immense
commitment and drive. An incredible result."
Dan Clifford, Managing Director
AURELIA METALS
33
OUR PEOPLE (CONTINUED)
COVID-19 Response
Human Resources
With the COVID-19 threat rapidly evolving and escalating,
Aurelia maintained efforts to enact strict controls to protect
the wellbeing of our employees, contractors, and the local
community; and to maintain business continuity. At times, the
Company enforced stricter controls than government directives
to provide greater confidence in our management of the risk.
Our crisis management teams continued to meet throughout
the year and our protocols evolved and changed to address the
changing risk profile. Our protocols include as a minimum pre-
travel screening, screening at the gate, increased site cleaning
and hygiene, and staggered starts and mess times to limit
interactions between groups. We continued to focus on SMALL,
CONSISTENT and TRACEABLE workgroups, as well as strict
protocols for our FIFO/DIDO workforce to limit their interactions
with our local communities. We continue to verify compliance of
our sites to our protocols.
Aurelia is extremely proud of our employees and contractors
who quickly adapted to changes to our protocols to reflect the
continually evolving situation. Border closures meant that some
of our people remained on site for extended periods away from
their families, whilst others adapted and worked from home
for extended periods. The efforts of our people have been
instrumental in our response and as a direct result, we have not
had a COVID-19 positive at any of our sites to date.
The Company remains ever vigilant in updating and adapting
our COVID-19 prevention and emergency response protocols
in the context of a rapidly changing risk profile associated with
the Delta strain. We endeavour to work with local communities
and stakeholders to minimise risks our operations pose to our
workforce and local communities.
With consideration of the strong balance sheet and financial
position of the Company, the Board of Directors decided it was
neither necessary nor fitting for the Company to claim JobKeeper
benefits from the Federal Government notwithstanding the
Company’s eligibility to make a claim during certain periods of
the pandemic.
Aurelia recognises that the achievement of its Vision relies
on creating exceptional value though our people. Aurelia’s
Values are the foundation of our corporate identity and through
our leaders, we align our employees to our Values and Company
objectives for the delivery of our strategy. We are committed to
attracting, engaging, and retaining a diverse workforce of high-
calibre employees to meet Aurelia’s current and future business
needs. By providing a safe and inclusive work environment, we
aim to give employees a sense of achievement and ownership
based on the Values of Integrity, Certainty, Courage,
and Performance.
Management Approach
Our approach to creating exceptional value through our people
is underpinned and supported by our Vision and Values and the
establishment of clear systems, standards, and strategies.
Coinciding with a comprehensive update of our policies and
standards in FY21, the Company developed a draft of our Code
of Conduct called ‘The Aurelia Way’. The Aurelia Way embodies
our commitment to good corporate governance and responsible
business practices. It also reflects the expectations of the Aurelia
Board, Shareholders, customers, regulators, and the community.
Our employees will be trained in The Aurelia Way in FY22.
In FY21, Aurelia held a number of workshops across the business
to develop our Values. This included involving a cross section of
our workforce in development of expected “thumbs up, thumbs
down” behaviours for each Value. The Values were rolled out by
our executives at our Leadership Development Workshops and
will be further communicated to our entire workforce in FY22.
We have established and embedded a number of systems that
support and develop our people. Our clear and consistent
Remuneration Framework and Performance Management
Cycle aim to cultivate a performance-based culture. The
Framework ensures:
— competitive remuneration, benefits and rewards are aligned
with Aurelia’s Values and objectives
— capability, qualifications, skills, experience, and potential
form the basis of performance-based pay and promotion
— employees are rewarded based on outcomes from the
five Balanced Business Plan (BBP) Pillars of Sustainability
(HSEC), People and Organisation, Operations, Growth and
Financial Outcomes.
34
ANNUAL REPORT 2021
OUR PEOPLE (CONTINUED)
In FY21, our internal Leadership Capability Training Program
and detailed competency mapping exercise provided training
and career development opportunities to enable progression
for our employees within the organisation. Through these
initiatives, we aim to develop and instil a culture of lifelong
learning, promoting the ongoing training needs and skills
development of all employees.
In line with the Company’s Values, we are committed to
establishing a safe and inclusive work environment based on
mutual respect, responsible behaviour, and integrity. To ensure
we achieve this outcome, in FY22 we will implement diversity and
inclusion strategies to build the future talent pool for the Group
and retain a diverse workforce free from any discrimination,
harassment, (including sexual harassment), bullying and
unacceptable behaviour.
Our People Performance
FY19
FY20
FY21
M
F
M
F
M
F
Gender Diversity
82.42%
17.58%
83.33%
16.67%
80.62%
19.38%
Board
Executives/
GMs
Principals and
Managers
Senior
Professionals/
Superintendents
Professionals/
Supervisors
Paraprofessionals/
Operations
M
4
F
2
M
7
F
0
M
17
F
4
M
33
F
9
M
31
F
7
M
119
F
30
Gender
Diversity
by Level
FY21
Peak Gold Mine
Hera Mine
Dargues Mine
Employee Initiated
Turnover by site
28.45%
34.40%
30.80%
FY19
115
59
0
8
182
FY20
133
64
0
13
210
Total Aurelia
Employees by site
Peak Gold Mine
Hera Mine
Dargues Mine
Corporate Office
Total
Material issues related to our people in FY21 included:
— employee engagement
— training and development
— diversity and inclusion.
Total
31.80%
FY21
133
63
37
25
258
AURELIA METALS
35
OUR PEOPLE (CONTINUED)
Employee Engagement
Aurelia recognises employee engagement is a critical driver of business success. We believe that an engaged workforce is a safe
workforce. Engaged people are also motivated and more likely to align their efforts to our Vision and Values and sustainable Balanced
Business Plan (BBP) outcomes.
In Q3 FY20, we conducted a Business Effectiveness Review that involved in depth one-on-one interviews with 288 employees and
contractors. The objective of the review was to identify key issues that mattered to our workforce, understand the barriers to
performance and develop an action plan to address in FY21. Based on the feedback from the interviews, we developed a plan with most
of the initiatives achieved with further actions to be completed in FY22.
Progress
Initiative
Role Clarity and Remuneration
Performance Management Framework and System
Position Descriptions for every role
Achievement and Development Plans for all employees
Short Term Incentive Plan
Human Resources Information System (HRIS)
Management and Leadership
Leadership Capability Model and Training for all eligible leaders
Systems, Policies & Procedures
Group-wide Intranet Platform
Document Control
Enterprise Risk Management and Safety System
Mine Operating System
Review/Update all Standard/Procedures
Communications and Branding
Group-wide newsletter
Company Values
Safety
ICAM Training
In FY22, Aurelia will undertake an Employee Engagement Survey to further understand the views of our workforce to inform
Company initiatives. It will also enable us to measure year on year improvements in several categories including living our Values,
safety, leadership, engagement and diversity and inclusion.
Not started
In progress
Complete
36
ANNUAL REPORT 2021
Remuneration Framework and
Performance Management Cycle
A key initiative resulting from the Business Effectiveness Review
was to establish and implement a Remuneration Framework and
a clear Performance Management process. Aurelia recognises
that fairness and equity in remuneration is necessary to attract,
develop and retain high-calibre employees. Our remuneration
framework is based on the Stratified Systems Approach and
promotes a performance-based culture whereby competitive
remuneration and rewards are aligned to BBP and
shareholder objectives.
In FY21, the performance management process included the
introduction of key performance measures for the ‘at risk’
component of remuneration. As a result, all roles now have key
performance measures aligned to the business strategy and
objectives across the areas of risk, people management, safety,
environment and community, production, costs, resource growth
and financial outcomes.
Aurelia also undertakes annual market remuneration
benchmarking (against similar organisations within the resources
industry) for all levels within the business to ensure market
competitiveness for both attraction and retention.
In FY21, we introduced individual Achievement and Development
Plans (ADP) for all paraprofessionals/supervisors and above
to assess individual performance. Individual performance of
operator and trades employees without an ADP was assessed
on more general criteria including Values alignment, and
adherence to safety expectations amongst other things. In
FY22, the ADP will extend to all employees and incorporate
individual performance targets, identify development needs
and opportunities and assess the employee’s alignment to key
behavioural indicators aligned to The Aurelia Way. Informal and
formal training and professional development opportunities will
be tailored and planned for each individual according to
their ADP.
Aurelia will ensure ADPs are developed and agreed at the
beginning of the financial year. Informal mid-year and formal
year-end reviews will centre around progress against these
plans, and determine remuneration increases in an objective and
internally consistent way.
The Aurelia Senior Leadership Team will moderate performance
and salary reviews to ensure there is internal consistency and no
gender or other attribute biases, prior to Board review.
Gender pay analysis forms part of Aurelia’s Diversity and Inclusion
Policy and is overseen by the Aurelia Board. It is also included
in the Remuneration and Nomination Committee Charter and
annual work plan to review and address any gaps.
In FY20 and FY21, at the request of the Board, the Company
undertook a gender pay gap analysis of like for like roles. There
were two potential gaps identified and addressed in FY20 and no
identified gaps in FY21.
OUR PEOPLE (CONTINUED)
Training and Development
Aurelia is committed to fostering an environment where
our people can reach their full potential. By investing in the
capability and skills of our people, we are investing in Aurelia’s
future growth.
Leadership Capability Training
In FY21, Aurelia developed a Leadership Development Framework
underpinned by a Leadership Capability Model aligned to our
Values. The model identifies the core capabilities and skills
critical for effective leadership. Leaders from Superintendent and
Senior Professional-level through to the Managing Director were
introduced to the Values and expectations through ‘Leading The
Aurelia Way’ leadership development workshops. The ‘Leading
The Aurelia Way’ workshops were delivered by management and
cascaded throughout the business to drive strong ownership of
the program and outcomes.
Aurelia’s 360° Leadership Profile is currently being implemented
for these leaders. The profile includes a 360° survey and report
based on the Leadership Capability Model to provide leaders
with greater insight into individual strengths and development
opportunities.
We will roll out the leadership development training and 360°
feedback profiles to Supervisors in FY22.
Competency Framework
Aurelia has been developing a Competency Framework – an
enterprise-wide learning and development system for training,
which can be customised locally. It gives the Company the ability
to access a structured, standardised training and assessment
system to better align training and assessment to business needs
while ensuring external regulatory compliance requirements are
met. This alignment will ensure a safe and skilled workforce at
all times.
The first stage of this process was to develop a skills matrix and
map all employees against competencies to identify and plan
training needs and refresher training. This was not limited to
compliance training, but also included key policies with a target
of 100% of employees trained in the new Rules to Live By, Green
Rules and Whistleblower Policy and Process.
AURELIA METALS
37
OUR PEOPLE (CONTINUED)
Diversity and Inclusion
At Aurelia we value and respect differences,
people bring their whole selves to work, and
everyone feels they can contribute and their
contribution is valued. To achieve this, we
are committed to ensuring we have a safe
workplace free from:
— sexual harassment
— bullying, harassment and all forms
of discrimination, and
— barriers to the recruitment, career
development, and retention of a
diverse workforce.
At Aurelia we firmly believe that
the growth of the Company and our
employees are interlinked. We recognise a
diverse workforce enhances the Company’s
ability to be more successful. We do this by
capturing a wide range of perspectives, and
unique skills and experiences to enhance
decision making and better business outcomes.
In FY21, female representation of Board members
increased from 17% to 29%. The Aurelia Board
also adopted a target of no less than 25% female
representation on the Board.
Across the Company’s workforce, female participation
increased from 17% in FY20 to 19% in FY21.
“There is a significant body of evidence showing that diverse
organisations contribute to better decisions, improved
company performance, sustainable outcomes and business
culture. Aurelia is committed to a diverse and inclusive
workplace, with zero tolerance of disrespectful behaviours
including harassment, sexual harassment, racism and sexism.
Are we where we want to be today? No, not yet. But we are
listening very closely to the needs of minority groups at every
level across our organisation, developing targeted strategies
and implementing these as a matter of priority.”
Interim Chairman, Susie Corlett
38
ANNUAL REPORT 2021
OUR PEOPLE (CONTINUED)
Case Study
Diversity and Inclusion Deep Dive
In FY21, Aurelia completed a Diversity and Inclusion Deep Dive
to listen to our people in order to understand barriers that may
impact diversity and inclusion in the workplace. The Deep Dive
was led by the newly established Diversity and Inclusion Working
Group comprising a cross section of 12 employees and chaired by
an executive. The Working Group benchmarked the approaches
of peer organisations to diversity and inclusion, including a
literature review to better understand contemporary practices
within the context of our business.
Against this desktop review, the Working Group conducted
confidential one-on-one interviews with our workforce. While
predominantly focused on gender-related issues, the interview
questions did cover broader diversity and inclusion issues.
Through the interview process we were able to commence
actively promoting diversity and ensure visibility around the
Company’s new Diversity and Inclusion Policy. Following the
interview process we compiled and summarised key themes,
trends, and perspectives in order to understand
barriers to diversity and inclusion, and the potential initiatives
to improve current levels of diverse participation within the
workforce, across all areas and levels.
More than a third of our workforce (91 employees) across the
three mining operations, exploration and the corporate office
participated in these interviews.
Worth noting was that there was a clear difference between
responses from males and females. Females had a stronger
negative response to nearly all of the questions asked. This is not
surprising as they are more likely to be personally impacted by
any gender-based bias and will shape our approach to diversity
and inclusion going forward.
The research results will inform the development of a targeted
gender safety, diversity and inclusion strategy, as well as the
development of measurable targets in FY22.
Key Themes Identified
Statistics from the Deep Dive
Requirement for diversity and inclusion training programs
98% of interviewees wanted more training on diversity
and inclusion
Development of consistent and transparent Recruitment
Standard with a focus on attracting and recruiting diverse
candidates
60% of interviewees were unsure or did not believe Aurelia
had a robust Recruitment Standard that focused on recruiting
diverse candidates
Consistent application of the Performance Review Process
49% of interviewees were unsure if the Performance Review
Process was fair*.
*These interviews were conducted before the full cycle under
the new performance management system had been completed
Introduction of career development pathways and
opportunities for promotion for all employees
46% of employees were unsure or did not believe that Aurelia
has clear career development pathways for all employees
Employees felt Safe to Speak Up on issues regarding
discrimination, bullying or harassment.
88% of employees felt safe to speak up and 72% believed that
senior leaders would take allegations seriously
The above response was significantly less when employees
were asked if they believed other employees feel it is safe
to speak up
33% of employees do not believe others feel safe to speak up
AURELIA METALS
AURELIA METALS
39
39
OUR PEOPLE (CONTINUED)
Case Study
Dargues Mine Acquisition
Transition and Integration
One of the key activities undertaken in FY21
was the acquisition of the Dargues Mine.
Under the banner of ‘The Aurelia Way, Straight
Away’, Aurelia developed and implemented
a 100-day plan to fully integrate Dargues
Mine to achieve a steady state in the shortest
possible timeframe. During the transition to
full ownership, the Aurelia Senior Leadership
Team were accessible within the community
and operations.
As part of the plan, the Company established
sustainability (HSEC and People) and
operational systems, standards and reporting
within the shortest possible timeframe.
Critical to this plan was the engagement
and support of key stakeholders prior
to the change of ownership to ensure
familiarity with Aurelia Metals people and
confidence in Aurelia Metals credentials.
To do this, the Company engaged with all
levels of government, as well as hosting
open and transparent forums with the Senior
Leadership Team and community. Based on
the feedback from community forums, Aurelia
was able to swiftly act on concerns which
has seen a significant drop in community
complaints (see Case Study - Noise Abatement
Measures Dargues Mine) following
Aurelia’s acquisition.
As part of the transition process, Aurelia
held meetings with employees, both
collectively and individually to discuss issues
and opportunities. As a result, Aurelia was
able to successfully transition employees
from contract employment conditions to
permanent roles with the new employment
entity. This provided employees with a
greater level of certainty and job security, as
well as improved conditions of employment.
40
ANNUAL REPORT 2021
Dargues Mine, NSW
OUR COMMUNITIES
Aurelia is committed to contributing positively to our local
communities through trusted, transparent, and long-term
relationships.
polymetallic discoveries in recent Australian history and Great
Cobar emerging as a significant near mine, undeveloped
copper resource.
We view these relationships as essential to maintaining our
social licence to operate. We recognise and respect the deep
connection First Nations people have with the land and are
committed to operating in a way that protects their cultural
heritage.
Stakeholder Engagement
Aurelia uses a number of engagement mechanisms to foster
transparent, inclusive and meaningful engagement with our
stakeholders. Stakeholder engagement allows us to share
information about our activities and performance and gain an
understanding of our stakeholders’ needs and concerns to inform
our decision making.
Aurelia enjoys an enviable organic growth pipeline - with
Federation shaping up to be one of the most exciting
In FY21, significant community and First Nations consultation
occurred for both projects. This engagement included
numerous community sessions, ongoing consultation with the
project specific Community Consultative Committee (CCC)
and various field assessments and site visits. This resulted in
the development of a Social Impact Assessment, including
commitments from Aurelia to mitigate potentially adverse
impacts to stakeholder groups.
Aurelia appreciates the input and collaboration the local
community and First Nations groups have provided towards the
proposed developments. Aurelia will continue to listen to our
community stakeholders and work hard to mitigate potential
impacts in the future.
The following table provides a summary of our FY21 approach to
engaging with our key stakeholder groups.
Stakeholder Groups
How We Engage
Key Topics Of Engagement
Employees and contractors
Email, newsletter (Peak and Dargues),
noticeboards, meetings, General Manager
State of the Nations
— COVID-19 management and response
— Business performance
— Health and safety performance
— Employee recognition and rewards
Government
Meetings, site visits, emails, briefings
Communities
Community Consultative Committees
Direct engagement through Town Hall
meetings and other forums prior to and
following acquisition of Dargues Mine
Shareholders and
Proxy Advisors
Annual reports, quarterly reports,
website, investor briefings, conference
calls, market announcements, Annual
General Meetings, industry conferences
Suppliers
Meetings, contractual agreements
Customers
Meetings, engagement, site visits,
market tenders
— Regulatory and legal compliance
— Environmental performance and management
— Community investment
— Direct engagement prior to and following
acquisition of Dargues Mine
— Environmental performance and management
— COVID-19 management and response
— Investment in communities
— Project development
— Operating performance
— Balance sheet
— Reserves and resources
— Sustainability performance
— Corporate governance
— Health and safety requirements
— Modern slavery requirements
— Contract conditions
— Reserves and resources
— Regulatory compliance
— Sustainability performance
AURELIA METALS
41
First Nations Engagement
and Cultural Heritage
Aurelia ensures that prior to any significant
development works feedback is sought from
potentially affected First Nations stakeholder
organisations.
The aim of consultation is to identify cultural items and
places that hold cultural value, including how they may
be affected by any proposed development. This gives
us the opportunity to adjust the project accordingly to
ensure the absolute protection of Indigenous cultural
heritage. The consultation process involves:
— Pre-notification – advertisements are placed in local
newspapers and several government agencies are
contacted requesting the identification of any First
Nations People and/or communities that may be
interested in the proposed development
— Notification – the individuals and communities
identified in ‘Pre-notification’ are contacted
to determine their interest in the proposed
development
— Presentation of the proposed development and the
assessment methodology – the First Nations People
are briefed on the proposed development
— Compile the First Nations Peoples’ feedback and
conduct field inspection – the information collected
during consultation with First Nations Peoples is
compiled and used to assist with planning field
inspections. The First Nations People assist with the
field inspections
— Discussion of potential impacts and mitigation
strategies – a discussion with the First Nations
People is conducted to explore the potential
impacts to culturally significant materials (if any) and
mitigation strategies, and
— Report review – once the field inspections
have been completed, the First Nations People
feedback is considered and integrated into the
documentation. They are then invited to review the
final documentation to contribute to the overall
findings, significance and management of culturally
significant materials.
Hera Mine, NSW
42
ANNUAL REPORT 2021
OUR COMMUNITIES (CONTINUED)
ABOVE: Structural remains of the house of one of
the field inspection participants at Cornishtown.
New Cobar Complex cultural heritage consultation
and inspections
Cobar has a proud mining history.
The Great Cobar Copper Mine was
the largest copper mine in Australia
between 1870 and 1920. At its peak
in 1912, the Great Cobar Copper
Mine boasted 14 smelters, a 64m
chimney stack and it employed over
2,000 people.
Today, we are currently developing
plans to access the ore zones
below the Great Cobar Copper
Mine. As part of this proposed
New Cobar development, Aurelia
has undertaken extensive cultural
heritage consultation with the Cobar
Local Aboriginal Land Council (LALC)
and the Ngemba – Ngiyampaa –
Wangaaypuwan and Wayilwan Native
Title Claimants.
The First Nations People identified
the former ungazetted town
‘Cornishtown’ as a place holding
cultural significance. Cornishtown
holds contemporary social/cultural
value as the local First Nations
People were amongst the inhabitants
of the town. Today, little of the town
remains, but the cultural values
continue to be significant.
As places and objects of significance
to First Nations People were found
in close proximity to the proposed
development area, Aurelia has
committed to several mitigation
strategies including adjustment
of the proposed disturbance area
to avoid the area of the former
Cornishtown. Furthermore, a survey
of the entire area will be conducted
by the First Nations People prior to
any disturbance to relocate culturally
significant objects that may be
impacted. The First Nations People
have informed Aurelia that they
would like the materials to remain
on country, and therefore, they will
be relocated immediately outside of
disturbance areas.
Federation cultural heritage consultation
and inspections
During the fieldwork the First
Nations People also undertook
natural resource gathering in the
form of harvesting mallee for
didgeridoos. Several stems
were harvested.
As a result of the inspections,
the proposed development was
adjusted to avoid impacting
culturally significant sites, and as
a result, no sites will be impacted.
Consultation is ongoing and Aurelia
will continue to work closely with
the First Nations People as the
traditional custodians of the land.
Stakeholder organisations of
three First Nations stakeholder
groups confirmed their interest
in the proposed development
of Federation, including the
Condobolin LALC, Cobar LALC
and Ngemba – Ngiyampaa –
Wangaaypuwan and Wayilwan
Native Title Claimants.
Field inspections with First Nations
People identified several items
and areas of cultural significance,
including culturally modified trees
and an Aboriginal quartz quarry.
The Aboriginal quartz quarry was a
particularly interesting find as the
Ngiyampaa had stories relating to
the site and prior to this inspection,
the exact location had not
been identified.
AURELIA METALS
43
ABOVE: Cobar Local Aboriginal Land Council
representative assisting in recording culturally
modified scar tree, October 2020.
OUR COMMUNITIES (CONTINUED)
Local Procurement and investment
In the last three years, Aurelia is proud to report approximately 50% of our procurement has been sourced within our local
regions, injecting more than $400M into our regional communities. In addition to this amount, we have donated approximately
$830k to local community groups and events.
Our focus is to support local community groups and businesses
wherever possible with our main priority being projects
supporting health, education and cultural initiatives. We also
have ongoing relationships with local sporting groups and
community events, which we believe are the beating heart of
local communities in regional NSW.
In FY21, Dargues Mine donated funds to the local council to
upgrade the Braidwood Recreation Grounds. The monies are to
be used by Council to divert a pipeline to allow for construction
LOCAL PROCUREMENT
of a skate park, levelling of playing fields and upgrades to the
irrigation system, slight relocation of the football field, new goal
posts, relocation of a spectator fence, new cricket practice nets
and general landscaping. Aurelia is proud to support the local
council in upgrading sporting facilities for the benefit of the
whole community. Being a small community, facilities such as the
recreation group are pivotal in supporting local sport and the
communities’ physical and mental health.
Hera Mine
Peak Mine
Dargues Mine
FY19 % total spend
FY20 % total spend
FY21 % total spend
$31M
$50M
*N/A
47%
50%
*N/A
$38M
$127M
*N/A
44%
66%
*N/A
$44M
$99M
$5M
43%
61%
16%
* Prior to Dargues acquisition in January 2021.
COMMUNITY INVESTMENT (DONATIONS)
Group ($k)
FY19
118
FY20
67
FY21
644
ECONOMIC CONTRIBUTION
Aurelia acknowledges how important our economic contribution
is to our stakeholders. Aurelia is open and transparent about our
contribution and is proud to be able to give back to the local,
state and national economies.
Aurelia did not request or receive any monetary support or
Job Keeper funding for COVID-19 from the government,
notwithstanding the Company’s eligibility to make a claim
during certain periods of the pandemic.
ECONOMIC VALUE
GENERATED AND
DISTRIBUTED
SUMMARY
416.5 M
$
Sales revenue
59.4 M
$
Employee benefits
60.0 M
$
Payments to
governments
44
ANNUAL REPORT 2021
239.4 M
$
Operating costs
and other
22.3 M
$
Payments to providers
of capital (including
dividends)
0.6 M
$
Community
expenditure
34.5 M
$
Economic value
retained
OUR COMMUNITIES (CONTINUED)
Grievance Management
Case Study
Aurelia investigates all complaints and grievances
and responds fairly and promptly. We take an active
approach to understanding our stakeholder
issues and their concerns.
The success of our approach of proactively engaging
with the community has been demonstrated since
our acquisition of the Dargues Mine. Community
complaints decreased from an average of 41 per
month in the six months prior to our acquisition to
only five in June 2021.
Noise Abatement at Dargues Mine
Prior to Aurelia’s acquisition of Dargues Mine, the previous
owner was receiving an average of 41 complaints per month
with a high of 58 complaints in July 2020. Aurelia acquired
Dargues mine in December 2020 and by June 2021 Aurelia
reported five complaints. Complaints have not been this low
since July 2019 (prior to production commencing). The prior
complaints predominately related to noise, and since Aurelia’s
acquisition the Dargues Mine also implemented several
strategies to mitigate noise from our operation.
Regular, meaningful consultation has been a key component
of addressing community concerns, and our communities have
been critical to helping Aurelia identify solutions. Our approach
is underpinned by a commitment to do what we say.
Key strategies included:
— limiting the exploration drilling program conducted in FY21
to dayshift only
— inviting members of the community to visit the Dargues
site during a nightshift (the time associated with most
complaints) to assist Aurelia in understanding the main
noise sources
— seeking expert advice from industry-leading specialists to
design noise abatement measures, such as:
– installing mufflers on the exhaust vents of the
process plant
– conducting targeted monitoring and observation of the
process plant as a key source of noise, then enclosing
compressors within purpose-built enclosures
— considering noise abatement measures when purchasing
new equipment (eg. underground trucks).
There will be ongoing consultation between Dargues Mine,
industry experts and the local community to address
any ongoing community feedback.
Peak Mine, NSW
ABOVE: The Community Consultative Committee during a
regular visit of Dargues Mine.
AURELIA METALS
45
ENVIRONMENTAL PERFORMANCE
Aurelia acknowledges that the nature of our operations can have significant environmental impacts. We are
committed to environmental stewardship including conservation of biodiversity, efficient use of resources,
pollution prevention and minimisation of environmental impact. We also recognise that climate change is
a significant challenge. As a result, we are committed to building resilience to climate change risks, and
minimising and managing greenhouse gas emissions, as well as other climate change impacts.
Management Approach
The Company uses our risk management framework to
understand and manage environmental risks across our business
lifecycle. Baseline environmental impact assessments are
completed at project development stage. These assessments
guide our approach to environmental management at our
operational and closure stages.
The risk framework also shapes our approach to the management
of catastrophic environmental risks to ensure environmental
management throughout all stages of mining including
operational and mine closure.
To assist our frontline leaders, employees and contractors,
Aurelia introduced the Green Rules in FY21. The Green Rules
set expectations around high potential risk incidents and guide
individual behaviour. Similar to safety Rules to Live By, they are
clear and simple. Compliance with the rules is non-negotiable as
breaching a Green Rule could lead to material impacts to
the environment.
Environmental management across our sites is integrated into
our risk and sustainability systems and processes. This includes
Risk and Sustainability Committee governance, elevation of
High Potential Risk Incidents (HPRIs) to the Senior Management
Taskforce for Significant Incidents and integration of
environmental, community and heritage risks into group and site
level risk registers. This ensures that environmental, community
and heritage issues are treated as importantly as health and
safety matters.
The environmental management system is undergoing
significant redevelopment with the update and introduction of
various policies, standards, management plans and procedures.
Specifically, in FY21, as part of the Fatal and Catastrophic Hazards
project, Aurelia established the Hazardous Materials Standard
and associated critical controls. The Company also conducted
in-field and system Critical Control Verification at all assets with
various actions for improvement identified for implementation.
We have developed and will conduct a regular schedule for
Critical Control Verification across the Aurelia Group.
The Company also identified pipelines outside of our disturbance
footprint as a significant risk given any loss of containment
could lead to harm to the environment. To address this risk, we
established a draft pipeline specification and conducted a gap
analysis across the Group. Further work will be undertaken in
FY22 and FY23 to close out any actions that were identified from
the gap analysis and finalise the pipeline specification.
Several other standards and critical controls are planned to
be developed and implemented across Aurelia assets in FY22
and FY23. This includes a Tailings Management Standard,
Rehabilitation and Closure Standard, Biodiversity Standard and
Stakeholder Engagement Standard to name a few. While Aurelia
acknowledges there is a gap in standards at the Group level,
expectations regarding environmental management are within
robust, site-specific management plans that mandate activities
and mitigate risk.
Green Rules
In FY21 Aurelia introduced the Green Rules following a review
of the environmental risks and historical incidents across our
assets. The review focused on the identification of individual
behaviours where a non-compliance to our licence to operate
could result in harm to the environment, a legislative breach
or damage to our reputation. As a result, four rules were
established to guide individual behaviours in our efforts to
protect the environment and our communities.
Aurelia established the Green Rules to encourage employees
and contractors to think and discuss how their actions may
impact the environment around them or the communities in
which we operate. Since the implementation of the Green
Rules, minor non-compliances to our licenses and approvals
have significantly decreased and our people’s awareness of the
importance of protecting the environment has increased.
46
ANNUAL REPORT 2021
Hera Mine, NSW
AURELIA METALS
47
ENVIRONMENTAL PERFORMANCE (CONTINUED)
Our Environmental Performance
In FY21, Aurelia had no materially significant
environmental, community or heritage incidents
at any of our sites.
The Company received two regulatory fines for
environmental non-compliance (one of these fines related
to an offence committed by Big Island Mining Pty Ltd prior
to Aurelia’s acquisition). The cumulative value of these
fines was $30k.
The first non-compliance related to the haulage of treated
grey water from the local wastewater treatment plant
to Dargues Mine for use in the process plant. The state
government determined that this activity was not in
accordance with the Environmental Assessment as the
use of offsite water in the process plant had not been
contemplated by the development consent.
The non-compliance occurred prior to Aurelia’s acquisition
of the Dargues Mine, but the penalty notice was received
after the transfer of ownership.
Immediately after receiving the penalty notice at Dargues
Mine, Aurelia investigated the haulage of raw water to the
Hera Mine for use in operations. As a result, the Company
determined the activity was not in accordance with the
Environmental Assessment. Once identified, this activity
immediately ceased and was self-reported to the relevant
authorities. Aurelia received a second penalty notice for
this non-compliance.
48
ANNUAL REPORT 2021
Dargues Mine, NSW
ENVIRONMENTAL PERFORMANCE (CONTINUED)
Case Study
Environmental Intervention
at Hera Mine
Aurelia measures Reportable Environmental Incident
Frequency Rate (REIFER) across all our assets. REIFER is
similar to Total Reportable Injury Frequency Rate (TRIFR)
and standardises incidents to one-million-person hours.
Early in FY21, Hera Mine was averaging approximately 2.8
reportable incidents per month and a REIFER of 24.75. The
recent drought conditions were contributing to the reportable
incidents. However, other incidents were occurring which
highlighted that improved management and awareness of
environmental requirements was required. Furthermore,
investigations of the incidents were, at times, inadequate
with the root cause not being identified and repeat
incidents occurring.
As a result, Aurelia implemented a targeted intervention,
similar to a ‘Safety Manage’ across the site. The Company
designed the intervention to improve awareness of
environmental licence requirements and Aurelia’s expectations
in relation to protecting the environment and our communities.
This elevated the importance of environmental management
at the site to those in leadership and support roles to better
inform their decision making and stop non-compliances
and incidents. Employees found this a valuable forum to
understand how their day-to-day actions, if not done correctly,
had the potential to impact on our environment
and community.
Alongside the intervention, detailed investigations were initiated
to address any repeat incidents. The investigation findings were
presented and discussed at the Senior Management Taskforce for
Significant Incidents to ensure that learnings were addressed at
all Aurelia sites.
The Company implemented key actions across the site including
the implementation of a lead indicator program to include
environmental conversations, observations, and inspections.
Aurelia’s Green Rules were established and implemented to
all Aurelia operations and catastrophic environmental hazards
addressed as part of the Fatal and Catastrophic Hazards project.
As a result of the intervention, incidents have dropped to an
average of 0.6 per month and a REIFER of 4.53, an 82% reduction
in FY21. Following the success of this intervention, similar
initiatives (including an environmental presentation for site
leadership teams) were implemented at Aurelia’s other assets.
Aurelia’s General Manager Risk and Sustainability, Adrian
Bell, spoke to the Company’s environmental performance
improvements across the Group, “Aurelia has been entrusted
as the custodian of the local environments where we operate.
The protection and management of environmental impacts is an
essential role in mining. The turnaround in performance at Hera
Mine has been outstanding and I’m proud that environmental
management is now front of mind within our workforce."
GROUP TOTAL REPORTABLE ENVIRONMENTAL INCIDENT FREQUENCY RATE
(12-month moving average)
25
20
15
10
5
0
82% reduction YTD
0
2
-
n
u
J
0
2
-
l
u
J
0
2
-
g
u
A
0
2
-
p
e
S
0
2
-
t
c
O
0
2
-
v
o
N
0
2
-
c
e
D
1
2
-
n
a
J
1
2
-
b
e
F
1
2
-
r
a
M
1
2
-
r
p
A
1
2
-
y
a
M
1
2
-
n
u
J
AURELIA METALS
49
ENVIRONMENTAL PERFORMANCE (CONTINUED)
Climate Change
Aurelia recognises that climate change is a significant challenge,
and climate-related risks have the potential to impact on our
business, communities, and the environment. We are committed
to building resilience to climate change risks and minimising and
managing greenhouse gas (GHG) emissions and other climate
change impacts. As an energy intensive business, we look at
opportunities to improve carbon efficiency.
As Aurelia’s Vision and Strategy is based on growing the business
both organically (through exploration) and inorganically (through
acquisitions), our GHG emissions and energy use will increase.
To support this growth, Aurelia will commence a project in
FY22 to align with the Task Force on Climate-Related Financial
Disclosures (TCFD) requirements.
Aurelia assesses climate change risks throughout the lifecycle
of mining. At the project development stage of our projects,
we assess options for renewable power and low-emission
technologies. We see this as a significant opportunity to set
ourselves up for a future where we are less energy intensive.
For our operations, Scope 1 and Scope 2 GHG emissions are
calculated based on the Australian Government methodology
required by the National Greenhouse and Energy Reporting
(NGER) scheme. Our Scope 1 emissions are predominantly
associated with electricity generation at the Hera Mine and our
mining fleet across our operations. Our Scope 2 emissions relate
to purchased electricity at the Peak Mine and Dargues Mine.
The increase in Scope 1 and Scope 2 emissions from FY20 to FY21
is predominately a result of the acquisition of the Dargues Mine.
Our GHG intensity has decreased, as a result of the record Au-
equivalent annual production and associated economies of
scale benefits.
GREENHOUSE GAS EMISSIONS
Scope 1 Emissions (t CO2)
Scope 2 Emissions (t CO2)
*These are preliminary numbers and subject to change pending external review and verification.
GREENHOUSE GAS INTENSITY
Total Scope 1 & Scope 2 Emissions (t CO2-e per Aueq)
FY19
31,840
61,380
FY19
0.53
*Note – This is a preliminary number and subject to change pending external review and verification.
ENERGY USE AND PRODUCTION
Energy produced per Aueq (GJ/oz)
Energy consumed per Aueq (GJ/oz)
FY19
0.54
4.58
*Note – These are preliminary numbers and subject to change pending external review and verification.
FY20
31,690
62,230
FY20
0.60
FY20
0.60
5.30
FY21
34,460*
76,110*
FY21
0.54*
FY21
0.47*
4.47*
50
ANNUAL REPORT 2021
ENVIRONMENTAL PERFORMANCE (CONTINUED)
Tailings and Waste Rock Management
Our operations generate tailings (mineral processing residues)
that are stored in purpose-built Tailings Storage Facilities (TSFs).
Aurelia operates central-thickened TSFs at Hera Mine and Peak
Mine and a perimeter discharge TSF at Dargues Mine. The TSF
designs are informed by industry experts and fit-for-purpose for
the local meteorological (ie. low rainfall and high evaporation
rates), topographical (ie. utilising local topography to reduce site
footprints) and other site specific conditions at each site.
We aim to reduce the risks associated with our TSFs by utilising
fit-for-purpose construction techniques and by seeking advice
and guidance provided by independent industry experts.
Our TSFs are operated in accordance with site specific Operation
and Maintenance Manuals. This includes daily and monthly
inspections and an annual inspection by an independent TSF
engineer. Each of our sites have completed dam break analysis
and have a Pollution Incident Response Management Plan that
includes actions in case of emergencies including a contact list of
people who could be impacted.
In FY22, Aurelia will commence a project to review and establish
improved tailings governance. A gap analysis of our TSFs against
relevant standards and guidelines will be undertaken to develop
a Tailings Management Standard and identify and commence
verification of critical environmental controls.
Waste rock is stored in purpose-built Waste Rock Emplacements
(WRE). The WREs that contain Potentially Acid Forming (PAF)
waste rock are lined and drain to a lined leachate pond that
captures drainage water (that has potential to have a low pH)
during rainfall events. These leachate ponds are intermittently
emptied into the process water ponds where the water is reused
in our processing operations.
Where waste rock is non-acid forming, it is used on the surface
for TSF and other construction projects. A TSF embankment
raise is planned at Peak Mine that will utilise waste rock. The
embankment raise will allow Peak Mine to store more tailings
within the TSF without expanding the TSF footprint. The raise is
being designed and supervised by an expert tailings consultant
and is part of a larger design plan that will see the TSF contain
tailings until 2035 with multiple embankment raises occurring
between now and then.
Most of the waste rock material currently being generated at
Dargues Mine is being brought to surface as development of
the decline to depth is still required. As the mine matures, less
waste rock will be brought to surface as decline development
rates decrease and more areas underground become available
to temporarily store waste rock for use as backfill within empty
stope voids.
FY19
FY20
FY21
FY19
FY20
FY21
Tailings production (kt)
847
896
1,119*
Waste Rock
production (kt)
21
189
153
* Tailings generation increased in FY21 due to the acquisition of Dargues
AURELIA METALS
51
ENVIRONMENTAL PERFORMANCE (CONTINUED)
Water Management
Water is a shared resource with our communities, and Aurelia
recognises we need to use water efficiently and protect receiving
waters. Aurelia typically operates in environments with low
rainfall and high evaporation. For example, around Cobar, the
average annual rainfall is approximately 400mm per annum
and the average annual evaporation rate is approximately 2m
per annum.
Aurelia is currently reviewing water use and security across all
our assets. Dargues Mine has the capability to irrigate excess
water during periods of heavy rainfall, such as was experienced
in FY21. If heavy rainfall events lead to discharge via emergency
spillways, the water quality is monitored to ensure we are not
causing an issue for the environment or downstream water users.
Since the acquisition of Dargues Mine in December 2020, Aurelia
has identified several gaps in the current water balance. We
are currently working with independent experts to review
and update water models and provide advice where gaps are
identified. Due to the lack of water meters across the operation,
water consumption and efficiency at Dargues Mine has largely
been estimated. These gaps will be addressed, and data
collection improved before the release of the FY22
Sustainability Report.
Across the Group, water use efficiency has improved from
FY20. Further details of the Hera Mine’s water use efficiency
improvements are presented in the case study below.
WATER USE EFFICIENCY AND CONSUMPTION
FY19
FY20
FY21
Total water consumption (ML)
1,099
1,162
1,266*
Water use efficiency (kL / Aueq)
6.22
7.48
6.79*
*Note - Dargues Mine data is estimated.
Water Use Efficiency and Availability at Hera Mine
Water availability at Hera Mine is a key risk given the local
meteorological conditions. Like most of Victoria, NSW and
southern Queensland, Hera Mine endured the drought through
2018 to 2020. In response to the drought, Aurelia has been
on a campaign to improve water use efficiency. By the end of
FY21, the Hera Mine achieved a 25% improvement in water
consumption per tonne of ore processed (1.2m3/t in FY20
to 0.90 m³/t in FY21).
These improvements were largely driven by improved
recovery of water in the process plant and adjustments
(including process control and flocculation dosing) to the
tailings thickener to increase the percent solids in the tailings
stream. This resulted in an approximate saving of 10m³ of
water used per hour.
Furthermore, water availability across the Hera Mine was
improved through a number of programs including:
— bore field improvements:
– cleaning and pump testing of bores to identify optimal
operating conditions
– installation of variable speed drives on bores to operate
within optimal ranges
— installation of additional bores within the existing bore field
— extension of the Project Boundary to encompass additional
groundwater resources to the south of the Hera Mine and
installation of new bores.
These actions are ongoing, and Hera will continue to seek water
efficiencies around site.
52
ANNUAL REPORT 2021
ENVIRONMENTAL PERFORMANCE (CONTINUED)
Peak Mine, NSW
AURELIA METALS
53
Peak Mine, NSW
54
ANNUAL REPORT 2021
MINERAL RESOURCE AND
ORE RESERVE STATEMENT
The Group’s annual Mineral Resource and Ore Reserve statement relates to its 100% owned Peak, Hera and Dargues Mines,
along with MREs for its 100% owned Federation deposit and 95% owned Nymagee Project in NSW.
The Mineral Resource and Ore Reserve Estimate are reported in accordance with the guidelines of the 2012 Edition of the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code 2012”). The estimates are reported as
at 30 June 2021.
Tables 1 to 10 summarise Group Mineral Resources, Ore Reserves and Production Targets.
TABLE 1. AURELIA GROUP MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2021.
Class
Measured
Indicated
Inferred
Total Resources
Tonnes (kt)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
Ag (g/t)
5,000
12,000
11,000
27,000
2.6
1.7
0.9
1.5
0.7
1.3
1.2
1.1
1.3
1.6
2.3
1.8
1.7
2.3
3.8
2.8
15
9
10
11
Note: The MRE is inclusive of Ore Reserves. There is no certainty that Mineral Resources not included in Ore Reserves will be converted to Ore Reserves.
The Group MRE utilises a A$120/t net smelter return (NSR) cut-off for mineable shapes that include internal dilution for Peak, Nymagee and Federation,
a A$100/t NSR for Hera and a 2 g/t Au cut-off for Dargues. NSR is an estimate of the net recoverable value per tonne including offsite costs, payables,
royalties and metal recoveries. Values are reported to two significant figures which may result in rounding discrepancies in the totals.
TABLE 2. AURELIA GROUP ORE RESERVE ESTIMATE AS AT 30 JUNE 2021.
Class
Proved
Probable
Total Reserves
Tonnes (kt)
NSR (A$/t)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
Ag (g/t)
2,300
2,100
4,400
230
210
220
2.7
2.5
2.6
0.5
0.5
0.5
1.8
1.9
1.8
2.5
2.3
2.4
17
11
14
Note: Values are reported to two significant figures which may result in rounding discrepancies in the totals.
MINERAL RESOURCE ESTIMATES
TABLE 3. PEAK MINE COPPER MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2021.
Class
Measured
Indicated
Inferred
Tonnes (kt)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
Ag (g/t)
2,700
5,900
5,600
2.3
1.2
0.8
1.2
1.1
1.8
2.0
1.8
0.2
0.1
0.1
0.1
0.1
0.1
0.2
0.1
8
6
9
7
Total Resources
14,000
Note: The Peak Mine MRE is inclusive of Ore Reserves. The MRE utilises A$120/t NSR cut-off mineable shapes that include internal dilution.
Values are reported to two significant figures which may result in rounding discrepancies in the totals
TABLE 4. PEAK MINE LEAD-ZINC MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2021.
Class
Measured
Indicated
Inferred
Total Resources
Tonnes (kt)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
Ag (g/t)
730
1,200
1,000
2,900
2.9
1.8
1.0
1.8
0.4
0.3
0.3
0.3
4.1
5.3
6.3
5.3
5.0
6.6
8.8
6.9
26
26
37
29
Note: The Peak Mine MRE is inclusive of Ore Reserves. The MRE utilises A$120/t NSR cut-off mineable shapes that include internal dilution. Values are
reported to two significant figures which may result in rounding discrepancies in the totals.
AURELIA METALS
55
MINERAL RESOURCE AND ORE RESERVE STATEMENT (CONTINUED)
TABLE 5. HERA MINE MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2021.
Class
Measured
Indicated
Inferred
Tonnes (kt)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
Ag (g/t)
880
500
280
1.7
2.1
1.3
1.8
0.1
0.1
0.1
0.1
2.8
1.8
1.8
2.3
4.3
2.6
2.3
3.5
35
13
17
25
Total Resources
1,700
Note: The Hera Mine MRE is inclusive of Ore Reserves. The MRE utilises A$100/t NSR cut-off mineable shapes that include internal dilution. Values are
reported to two significant figures which may result in rounding discrepancies in the totals.
TABLE 6. DARGUES MINE MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2021.
Class
Measured
Indicated
Inferred
Total Resources
Tonnes (kt)
Au (g/t)
380
1,200
570
2,100
6.0
4.8
5.1
5.1
Note: The Dargues Mine MRE is inclusive of Ore Reserves. The MRE is reported using a 2g/t Au cut-off. Values are reported to two significant figures which
may result in rounding discrepancies in the totals.
TABLE 7. FEDERATION DEPOSIT MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2021.
Class
Indicated
Inferred
Total Resources
Tonnes (kt)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
Ag (g/t)
1,500
3,500
5,100
2.2
0.3
0.9
0.4
0.3
0.3
6.1
5.2
5.5
10.0
9.0
9.3
8
7
7
Note: The Federation MRE utilises A$120/t NSR cut-off mineable shapes that include internal dilution. Values are reported to two significant figures which
may result in rounding discrepancies in the totals.
TABLE 8. NYMAGEE PROJECT MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2021.
Class
Indicated
Inferred
Total Resources
Tonnes (kt)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
Ag (g/t)
1,400
40
1,500
0.1
0.1
0.1
2.3
1.6
2.3
0.8
0.2
0.8
1.5
0.5
1.5
18
10
18
Note: The Nymagee Project MRE utilises A$120/t NSR cut-off mineable shapes that include internal dilution. Values are reported to two significant figures
which may result in rounding discrepancies in the totals.
56
ANNUAL REPORT 2021
MINERAL RESOURCE AND ORE RESERVE STATEMENT (CONTINUED)
ORE RESERVE ESTIMATES
The Ore Reserve Estimate is derived from only the Measured and Indicated categories within the Mineral Resource Estimate.
TABLE 9. PEAK MINE COPPER ORE RESERVE ESTIMATE AS AT 30 JUNE 2021.
Class
Proved
Probable
Total Reserves
Tonnes (kt)
NSR (A$/t)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
Ag (g/t)
940
740
1,700
200
170
190
2.4
1.6
2.1
1.2
1.3
1.2
0.2
0.1
0.2
0.2
0.1
0.1
4
6
5
Note: The Peak copper Ore Reserve Estimate utilises a A$80/t NSR cut-off for development and A$140-170/t NSR for stoping depending on mine area.
Values are reported to two significant figures which may result in rounding discrepancies in the totals.
TABLE 10. PEAK MINE LEAD-ZINC ORE RESERVE ESTIMATE AS AT 30 JUNE 2021.
Class
Proved
Probable
Tonnes (kt)
NSR (A$/t)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
Ag (g/t)
Total Reserves
1,000
340
670
360
270
300
3.7
2.2
2.7
0.4
0.3
0.3
5.7
5.2
5.4
7.1
6.2
6.5
25
22
23
Note: The Peak lead-zinc Ore Reserve Estimate utilises a A$80/t NSR cut-off for development and A$155/t NSR for stoping. Values are reported to
two significant figures which may result in rounding discrepancies in the totals.
TABLE 11. HERA MINE ORE RESERVE ESTIMATE AS AT 30 JUNE 2021.
Class
Proved
Probable
Total Reserves
Tonnes (kt)
NSR (A$/t)
Au (g/t)
Cu (%)
Pb (%)
Zn (%)
750
190
940
180
150
180
1.4
1.2
1.4
2.7
2.4
2.6
4.3
3.6
4.1
34
24
32
Note: The Hera Ore Reserve Estimate utilises a A$80/t NSR cut-off for development and A$100/t NSR cut-off for stoping. Values are reported to two
significant figures which may result in rounding discrepancies in the totals.
TABLE 12. DARGUES MINE ORE RESERVE ESTIMATE AS AT 30 JUNE 2021.
Class
Proved
Probable
Total Reserves
Tonnes (kt)
NSR (A$/t)
Au (g/t)
230
540
770
280
210
230
6.1
4.5
5.0
Note: The Dargues Ore Reserve Estimate utilises a A$80/t NSR cut-off for development and A$135/t NSR cut-off for stoping. Values are reported to two
significant figures which may result in rounding discrepancies in the totals.
Refer to page [158-159] for Competent Persons Statements
AURELIA METALS
57
FINANCIAL
STATEMENTS
Dargues Mine, NSW
58
ANNUAL REPORT 2021
Directors’ report
Operations and financial review
Letter from the Chairman of the
Remuneration and Nomination
Committee
Remuneration report (audited)
60
66
84
86
Auditor independence declaration
108
Statement of profit or loss and
other comprehensive income
Statement of financial position
Statement of changes in equity
Cashflow statement
Notes to financial statements
Director’s declaration
Independent Auditor’s report
to the Members of Aurelia
Metals Limited
109
110
111
112
113
150
151
AURELIA METALS
59
DIRECTORS’ REPORT
The following report is submitted in respect of the results of Aurelia Metals Limited (‘Aurelia’ or ‘the Company’) and its
subsidiaries, together the consolidated group (‘Group’), for the financial year ended 30 June 2021, together with the
state of affairs of the Group as at that date.
The Board of Directors submit their report for the year ended 30 June 2021.
1. Directors and Officers
The names and details of the Company’s Directors in office during the financial year and until the date of this report are set out below.
Directors were in office for this entire period unless otherwise stated.
Susan Corlett
Interim Independent Non-Executive Chairman
Appointed as a Director of the Company on 3 October 2018 and
as Interim Independent Non-Executive Chairman on
2 March 2021
Ms Corlett is a geologist with over 25 years’ experience in
exploration, mining operations, mining finance and investment.
Ms Corlett serves as a non-executive director of ASX listed
Mineral Resources Ltd (ASX: MRL) and Iluka Resources Ltd
(ASX: ILU) and as a director of a not-for-profit organisation, the
Foundation of National Parks and Wildlife. Ms Corlett is also a
Trustee of the AusIMM Education Endowment Fund.
During her executive career, Ms Corlett was an Investment
Director for global mining private equity fund, Pacific Road
Capital Ltd and worked in mining credit risk management and
project finance for Standard Bank Limited, Deutsche Bank and
Macquarie Bank.
Ms Corlett has a Bachelor of Science (Hons. Geology) from the
University of Melbourne, is a graduate of the Australian Institute
of Company Directors, a Fellow of the AusIMM and a member of
Chief Executive Women.
Ms Corlett is Chair of the Board’s Sustainability and Risk
Committee and is a member of the Board’s Audit Committee.
During the past three years, Ms Corlett has served as a
Director of:
— Iluka Resources (ASX: ILU), appointed June 2020; and
— Mineral Resources (ASX: MRL), appointed January 2021.
Daniel Clifford
Managing Director & Chief Executive Officer (CEO)
Appointed Managing Director & Chief Executive Officer on
25 November 2019
Mr Clifford is a Mining Engineer with more than 25 years’
experience across the industry. He was most recently the
Managing Director & CEO of Stanmore Resources Limited (ASX:
SMR) (Stanmore), a role he held from November 2016 to October
2019. During his tenure, Stanmore saw significant growth in both
output and profitability at its flagship Isaac Plains metallurgical
coal mine in Queensland. This dynamic was reflected in
Stanmore’s strong share price performance over this period.
Prior to this, Mr Clifford was the CEO of Solid Energy New
Zealand Limited from March 2014 to November 2016. He guided
the company through a period of significant financial pressure
and challenging market conditions, including leading an asset
sales program. Mr Clifford has also held senior technical and
operational positions for Glencore plc, Anglo American plc and
BHP Group Limited.
During the past three years, Mr Clifford has served as a Director
of Stanmore Resources Limited (ASX: SMR).
Lawrence Conway
Independent Non-Executive Director
Appointed as a Director of the Company on 1 June 2017
Mr Conway has over 30 years’ experience in the resources sector
across a diverse range of commercial, financial and operational
activities. He has held a mix of corporate and operational
commerce roles within Australia, Papua New Guinea and Chile
with Evolution Mining, Newcrest and BHP Billiton. Mr Conway
is also a Board member of the NSW Minerals Council and is a
graduate of the Australian Institute of Company Directors.
Mr Conway is the Chair of the Board’s Audit Committee.
During the past three years, Mr Conway has served as a
Director of:
— Evolution Mining Limited (ASX: EVN), appointed October
2011, and has held the position of Finance Director and Chief
Financial Officer since August 2014.
60
ANNUAL REPORT 2021
Helen Gillies
Independent Non-Executive Director
Robert Vassie
Independent Non-Executive Director
Appointed as a Director of the Company on 21 January 2021
Appointed as a Director of the Company on 21 January 2021
Ms Gillies is a corporate lawyer with over 30 years of experience
in external and in-house legal counsel roles. This includes almost
20 years in various senior legal and risk management roles at
major engineering company, Sinclair Knight Merz, including the
role of General Counsel and General Manager Risk.
Ms Gillies is currently a non-executive director of Monadelphous
Group Limited (ASX: MND), BAC Holdings Pty Ltd (the holding
company for Bankstown and Camden Airports) and Yancoal
Australia Limited (ASX: YAL). She has undergraduate degrees
in Commerce and Law, and Masters degrees in Business
Administration and Law. She is a Fellow of the Australian Institute
of Company Directors.
Ms Gillies is a member of the Board’s Remuneration and
Nomination Committee and the Board’s Sustainability and
Risk Committee.
During the past three years, Ms Gillies has served as a
Director of:
— Monadelphous Group Limited (ASX: MND); and
— Yancoal Australia Limited (ASX: YAL).
Paul Harris
Independent Non-Executive Director
Appointed as a Director of the Company on
17 December 2018
Mr Harris has more than 27 years’ experience in financial markets
and investment banking, including advising mining corporates on
strategy, mergers and acquisitions, and capital markets, including
as Managing Director - Head of Metals and Mining at Citi.
Mr Harris has a Masters of Engineering (Mining) and a Bachelor of
Commerce (Finance) and is a graduate of the Australian Institute
of Company Directors.
Mr Harris is the Chair of the Board’s Remuneration and
Nomination Committee and is a member of the Board’s
Audit Committee.
During the past three years, Mr Harris has served as a
Director of:
— Aeon Metals Limited (ASX: AML), appointed December 2014.
Mr Vassie is a mining engineer with over 35 years’ experience in
management and operational roles within the global resources
industry. Most recently, he was Managing Director and CEO of
St Barbara Limited (ASX: SBM) from 2014 to 2020. Prior to that,
Mr Vassie was Managing Director and CEO of Inova Resources
Limited (ASX: IVA). He has also held various senior management
and operational roles for almost 20 years at Rio Tinto Limited
(ASX: RIO). Mr Vassie is currently the non-executive chairman
of Ramelius Resources Limited (ASX: RMS) and a non-executive
director of Federation Mining Pty Ltd.
Mr Vassie is a member of the Board’s Remuneration and
Nomination Committee and the Board’s Sustainability and
Risk Committee.
During the past three years, Mr Vassie has served as a
Director of:
— St Barbara Limited (ASX: SBM);
— Ramelius Resources Limited (ASX: RMS); and
— Alita Resources Limited (ASX: A40, now delisted).
Ian Poole
Chief Financial Officer and Company Secretary
Appointed as Company Secretary on 1 July 2020
Mr Poole was appointed as Chief Financial Officer and Company
Secretary at the beginning of the financial year. Mr Poole is a
highly experienced commercial executive with over 20 years
in senior roles within listed global resources and engineering
companies. He has held key commercial positions within several
metal mining businesses including the US business unit of
Pasminco Limited, Savage Resources Limited and Outokumpu
Mining Australia Pty Ltd.
Mr Poole’s most recent position was CFO and Company Secretary
at metallurgical coal producer, Stanmore Resources Limited (ASX:
SMR), a role he held for three years. Prior to that, he was CFO
at Sedgman Limited (previously listed) and General Manager,
Commercial, at Rio Tinto Coal Australia Limited.
AURELIA METALS
61
Gillian Nairn
Company Secretary
Appointed as Company Secretary on 2 June 2019
Ms Nairn has over 20 years legal and governance experience working both in-house and as a consultant. She is a founder and director of
Dolmatoff Nairn Corporate Governance, a company secretarial service provider.
Ms Nairn holds a Bachelor of Laws and Bachelor of Arts from UNSW and a Graduate Diploma in Applied Corporate Governance. She is a
Fellow of the Governance Institute of Australia and a member of the Law Society of NSW.
Directors and Officers who no longer hold office at the date of this report are as follows:
Colin Johnstone
Appointed as a Director and Chairman of the Company on 28 November 2016 and retired on 2 March 2021.
During the past three years, Mr Johnstone has also served as a Director of:
— Evolution Mining (ASX: EVN), retired March 2020.
Michael Menzies
Appointed as a Director of the Company on 15 December 2015 and retired on 1 October 2020.
Directors’ Interests
At 30 June 2021, the interests of the Directors in the shares and other equity securities of the Company were:
Ordinary
Shares
Performance
Rights
33,731
-
1,565,201
4,613,781
225,850
-
250,000
250,000
-
-
-
-
2,324,782
4,613,781
Director
Susan Corlett
Daniel Clifford
Lawrence Conway
Paul Harris
Helen Gillies
Robert Vassie
Total
62
ANNUAL REPORT 2021
DIRECTOR’S REPORT (CONTINUED) 2. Meetings of Directors
The number of Board of Director meetings and Board Committee meetings held during the year and each Director’s attendance at those
meetings is set out below:
Director
Susan Corlett
Daniel Clifford
Lawrence Conway
Paul Harris
Helen Gillies
Robert Vassie
Colin Johnstone
Michael Menzies
Directors’ Meetings
(i)
18
18
18
18
5
5
14
6
(ii)
18
18
18
18
5
5
14
5
Committee meetings of the Board:
Audit
(i)
6
-
6
6
-
-
-
-
Remuneration &
Nomination
Risk & Sustainability
(ii)
(i)
(ii)
6
-
6
6
-
-
-
-
-
-
-
8
2
2
6
4
-
-
-
8
2
2
6
4
(i)
7
-
-
-
3
3
4
2
(ii)
7
-
-
-
3
3
3
1
(i) Held – Indicates the number of Board meetings held during the period of a Director’s tenure or the in the case of Committee meetings, whilst the Director was a
member of Committee.
(ii) Attended – Indicates the number of meetings attended by a Director. While non-member Directors are entitled to attend Committee meetings (subject to any
conflicts), these attendances are not reflected in the above table.
The members of the Board’s Committees at 30 June 2021 are:
Audit Committee: Lawrence Conway (Chair), Susan Corlett and Paul Harris
Remuneration and Nomination Committee: Paul Harris (Chair), Helen Gillies and Robert Vassie
Sustainability and Risk Committee: Susan Corlett (Chair), Helen Gillies and Robert Vassie
4. Indemnification of Auditors
To the extent permitted by law, the Company has agreed to
indemnify its auditor 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 the auditor during or since the financial year.
3. Indemnification and Insurance of
Directors and Officers
During the financial year, the Company paid a premium in
respect to a contract insuring the Directors of the Company, the
Company Secretaries, all executive officers of the Company, and
of any related body corporate against a liability incurred to the
extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and
the amount of the premium.
The Company provides a Deed of Indemnity, Insurance and
Access with Directors and Officers. In summary, the Deed
provides for: access to corporate records for each Director for a
period after ceasing to hold office in the Company; the provision
of Directors and Officers Liability Insurance; and an indemnity
for legal costs incurred by Directors in carrying out the business
affairs of the Company.
Except for the above the Company has not otherwise, except
to the amount permitted by law, indemnified or agreed to
indemnify an officer or auditor of the Company or of any related
body corporate against a liability incurred, during or since the
financial year.
AURELIA METALS
63
DIRECTOR’S REPORT (CONTINUED) 5. Dividends
On 25 August 2020, the Board of Directors resolved to pay a fully franked dividend of $0.01 per share related to the year ended 30 June
2020. The total dividend of $8.7 million was paid in October 2020.
The Board of Directors did not declare a dividend for the year ended 30 June 2021.
6. Corporate Structure
Aurelia Metals Limited is a company limited by shares that is incorporated and domiciled in Australia. The Aurelia Group (the ‘Group’)
comprises of the following wholly owned subsidiaries:
Entity name
Defiance Resources Pty Ltd
Hera Resources Pty Ltd
Nymagee Resources Pty Ltd
Peak Gold Asia Pacific Pty Ltd
Peak Gold Mines Pty Ltd
Dargues Gold Mine Pty Ltd
Big Island Mining Pty Ltd
Incorporation date
15 May 2006
20 August 2009
7 November 2011
26 February 2003
31 October 1977
12 January 2006
3 February 2005
7. Performance Rights
As at the date of this report, there are 10,523,362 Performance Rights in issue. The Performance Rights are unlisted and have terms as
set out below:
Grant
Date
28-11-16
04-12-18
04-12-18
29-11-19
29-11-19
29-11-19
19-11-20
26-12-20
Total
Expiry or
Test Date
Exercise
Price
Balance at
start of year
Granted
during
the year
Vested
during
the year
30-06-20
30-06-20
30-06-21
30-06-22
25-11-20
25-11-21
30-06-23
30-06-23
nil
nil
nil
nil
nil
nil
nil
nil
750,000
770,893
613,421
2,812,696
1,565,201
1,565,201
-
-
-
-
-
-
-
-
1,696,714
4,608,363
-
-
-
-
(1,565,201)
-
-
-
Expired
during
the year
(750,000)
(770,893)
(305,452)
Balance at
year end
-
-
307,969
(341,976)
2,470,720
-
-
-
-
1,565,201
1,696,714
(125,605)
4,482,758
8,077,412
6,305,077
(1,565,201)
(2,293,926)
10,523,362
The performance rights have various share price and operational performance measures. Refer to the Remuneration Report for further
details. No performance right holder has any right under the performance right to participate in any other share issue of the Company or
any other entity.
8. Future Developments
Refer to the Operations and Financial Review for information on future prospects of the Company.
64
ANNUAL REPORT 2021
DIRECTOR’S REPORT (CONTINUED) 9. Environmental Regulation And Performance
The Directors are not aware of any environmental incidents during the year that would have a materially adverse impact on
the Company.
During FY21, the Group was issued with two Penalty Infringement Notices (PIN) and a Warning Letter, as described below:
— A PIN was issued to Big Island Mining Pty Ltd in February 2021 related to non-compliance to the development consent conditions for
the Dargues Mine. This non-compliance took place prior to Aurelia taking ownership of the Company from 17 December 2020 (the
acquisition date). The $15,000 PIN was settled by the previous owners;
— A PIN was issued to Hera Resources Pty Ltd following an internal review of water licensing onsite. During the internal review, it was
identified that the haulage of surface water from nearby property dams to the Hera Mine was not generally in accordance with Hera’s
Environmental Assessment. The non-compliance was self-reported to the relevant authorities who concurred with the Company’s
assessment. A $15,000 PIN was issued and paid in June 2021; and
— A Warning Letter related to a non-compliance was issued to Hera Resources Pty Ltd related to a concentrate haulage vehicle being
operated outside of curfew hours. This was a breach of the Company’s development consent conditions and was self-reported to the
relevant authorities.
There were several other minor non-compliances to development consent conditions during the year. All minor non-compliances were
reported to the relevant authorities as soon as the Company became aware of the incidents. Immediate actions were taken to return the
operation to compliance.
No regulatory action or fines have been received by the Company in response to these minor incidents and due to the minor nature of
the incidents, no such action is anticipated.
10. Currency and Rounding of Amounts
All references to dollars are a reference to Australian dollars ($A) unless otherwise stated. ($A) may be used for clarity.
Aurelia Metals Limited is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 and in accordance with that instrument, amounts in the Financial/Directors’ Reports are rounded to the nearest thousand
dollars, except when indicated otherwise. Due to rounding, numbers presented throughout this document may not add up precisely to
the totals provided.
11. Auditor Independence and Non-Audit Services
During the year the Company’s auditor, Ernst & Young Australia provided non-audit services. The directors are satisfied that the provision
of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The
nature and scope of each type of non-audit service provided means that auditor independence was not compromised.
The amounts received by Ernst & Young Australia for non-audit services are contained in Note 25 of the financial statements.
The Company has obtained an independence declaration from its auditor, Ernst and Young, which forms part of this report. A copy of that
declaration is included on the page 108.
Signed in accordance with a resolution of the Directors.
Susan Corlett
Interim Chairman
Daniel Clifford
Managing Director & CEO
Brisbane
24 August 2021
AURELIA METALS
65
DIRECTOR’S REPORT (CONTINUED) OPERATIONS AND FINANCIAL REVIEW
1. Overview
Aurelia Metals Limited (‘Aurelia’ or the ‘Company’) is an Australian gold and base metals mining and exploration company. The Company’s
gold-dominant position benefits from substantial by-product revenue credits (which include zinc, lead, copper and silver). The Company
owns and operates three underground mines (Peak, Hera and Dargues) and processing facilities. The Peak and Hera Mines are located in
the mineral rich Cobar Basin in central western New South Wales (NSW), while the Dargues Mine is located in south-eastern NSW.
Aurelia’s vision and strategic focus is founded upon several key principles:
Our Strategy
Simple, durable and returns focused
Sustainable
Progression
Maximise existing
infrastructure and assets
Direct capital to
the highest return
— An organisation that excels through
our people and superior performance
— Leverage off a strategic asset base
in the Cobar Basin and regional NSW
— A trusted, sustainable and
beneficial presence in the areas
which we operate
— Maximise returns via life
extensions and operating
discipline driving margin
— Growth profile underpinned by
financial discipline and tension
for the $’s deployed
— Gold dominant, high value asset
base, ‘copper ready’
Deliver long term value and returns growth
— 4 – 5 mine asset portfolio continuously driving Group cost and Reserve improvement
— Cycle proofed mine lives and commodity mix
Aurelia’s strategy is underpinned by its core values, which guide the way its employees work to ensure the safety and wellbeing of our
people, and to the benefit of Shareholders and communities where the Company operates. Aurelia is also committed to minimising
environmental and carbon impacts at our operating mine sites and in the development of new projects.
Our Values
Integrity
Certainty
Courage
Performance
We do what’s right
We plan and execute well
We step up
We own the result
Aurelia recognises that the achievement of its vision and overall success is reliant on the Company conducting all activities in line with its
values, and ethical standards and behaviour in accordance with the law and societal expectations.
The Company continues to advance its strategic growth objectives. During FY22, the Company will advance its priority organic growth
projects through staged evaluation studies and regulatory permitting. In addition, the Company will continue to unlock exceptional
upside from its highly prospective tenements and landholdings through its exploration and evaluation activities (refer to Section 3 of this
report).
66
ANNUAL REPORT 2021
2. OPERATING AND FINANCIAL PERFORMANCE
The Company finished FY21 in a strong financial and operating position and is well placed to continue to pursue its strategic objectives.
The key highlights from FY21 include:
Sustainability
— Major reduction in workplace injuries, with a 58% improvement on Total Recordable Injury
Frequency Rate (TRIFR)
— Substantial improvement in environmental performance, with an 82% reduction in reportable
environmental incidents
— Initiatives in the areas of workplace diversity and climate change
— Sustained focus on COVID-19 management and response plans
— Achieved FY21 Group production and cost guidance
— Group gold production of 104koz at an AISC of $1,337/oz (FY20: 92koz at $1,526/oz)
— Peak gold production of 57koz of gold at an AISC of $867/oz (FY20: 47koz at AISC of
$1,737/oz)
Production and
Cost Performance
— Hera gold production of 31koz of gold at an AISC of $1,206/oz (FY20: 45koz at AISC of
$1,150/oz)
— Dargues gold production since acquisition of 15koz at an AISC of $2,483/oz (reflecting the
operation’s ramp-up phase)
— Ore processed at Peak increased 10% to 625ktpa, from FY20
— Ore processed at Hera increased 9% to 446ktpa, from FY20
— Successful completion of the Dargues Mine acquisition and integration
— Federation Scoping Study completed, and Feasibility Study (FS) commenced, with enabling
works and permitting underway
Growth
— Highly successful ongoing drill program at the high-grade polymetallic Federation Deposit
— Substantial 63% Mineral Resource upgrades across the asset portfolio; including Federation,
Great Cobar and Kairos
— Significant Ore Reserve growth expected in FY22 with Maiden Ore Reserves targeted for
Federation and Great Cobar
— Strong Balance Sheet maintained, with $74.5M cash in bank at 30 June 2021
— Net profit before tax increased by 58% to $71.6 million (FY20: $45.2 million)
— Underlying net profit before tax increased by 108% to $86.1 million (FY20: $45.2 million). Refer
to section 2.1 for more detail
— Record EBITDA result of $154.1 million (FY20: $103.4 million), EBITDA margin of 40%
(2020: 30%)
— Record underlying EBITDA; an increase of 69% to $168.6 million (FY20: $99.6 million). Refer to
Financial outcomes
section 2.1 for more detail
— Operating cash flow improved by 24% to $136.6 million (FY20: $110.5 million)
— Refinanced debt facilities to support growth
— A new $115.0 million secured Syndicated Facilities Agreement executed to support the
acquisition and integration of the Dargues Mine
— Equity raising of $124.8 million completed through fully underwritten Institutional Placement
and Entitlement Offer and a Retail Entitlement Offer
— FY20 Final Dividend of $0.01 per share totaling $8.7 million paid in October 2020
AURELIA METALS
67
2. Operating and Financial Performance (continued)
2.1 Profit and financial performance
The Group has achieved a statutory net profit after tax of $42.9 million for the year ended 30 June 2021. Included in the statutory net
profit are some significant once-off transactions which are not in the ordinary course of ongoing business activities. These transactions
total $20.0 million and relate to costs and stamp duty paid for the acquisition of the Dargues Gold Mine.
The net profit result comparison to the prior year is summarised below:
Net Profit
Sales revenue
Cost of sales
Gross profit
Business Combinations - Dargues Mine acquisition transaction costs
and stamp duty
Other income and expenses, net
Net profit before income tax and net finance expenses
Net finance expenses
Net profit before income tax expense
Income tax expense
Net profit after income tax expense
2021
$’000
416,477
(308,753)
107,724
(20,002)
(10,580)
77,142
(5,528)
71,614
(28,697)
42,917
2020
$’000
331,819
(259,845)
71,974
-
(25,192)
46,782
(1,575)
45,207
(15,765)
29,442
The underlying net profit is presented to improve the comparability of the net profit results between periods.
Underlying net profit:
Net profit before income tax expense
Add back:
Business Combinations - Dargues Mine acquisition costs and stamp duty
Fair value adjustment/remeasurement of financial assets and liabilities
Underlying net profit before income tax expense1
Current tax on profits for the year
Underlying net profit after tax expense1
2021
$’000
71,614
20,002
(5,472)
86,144
(28,697)
57,447
2020
$’000
45,207
-
(3,887)
41,320
(15,765)
25,555
Change
%
26%
(19%)
50%
(100%)
58%
65%
(251%)
58%
(82%)
46%
Change
%
58%
100%
(41%)
108%
(82%)
125%
1
Underlying net profit reflects the statutory net profit adjusted to reflect the Directors’ assessment of the result for the ongoing business activities of the
Consolidated Entity.
The items adjusted for are determined to be not in the ordinary course of business and relate to transaction and advisory fees and stamp duty expense incurred
for the acquisition for the Dargues Mine (which occurred on 17 December 2020) and the fair value adjustment/remeasurements for financial assets and liabilities
at 30 June 2021. The presentation of non-IFRS financial information provides stakeholders the ability to compare against prior periods in a consistent manner.
These numbers are not required to be audited.
68
ANNUAL REPORT 2021
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. OPERATING AND FINANCIAL PERFORMANCE (continued)
2.1 Profit and financial performance (continued)
The year-on-year net profitability movements are graphically illustrated below:
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
GROUP UNDERLYING NET PROFIT AFTER TAX
Increase
Decrease
Total
47,605
(11,125)
(17,521)
37,053
(20,150)
8,961 1,586 71,614
20,002
86,144
(5,472)
45,207
(20,002)
57,447
(28,697)
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U
Sales revenue from gold sold during the year was $37.1 million higher than FY21. This was driven by an increase in gold sold (10% higher
with 103koz sold during FY21). The average gold price realised during the year was $2,476/oz (6% higher on average in comparison to
FY20). By-product sales revenue was $47.6 million higher driven by a combination of both higher prices and increased volumes. The
increased volumes are a result of higher base-metal ore grades and tonnes processed at both the Peak and Hera mines.
The operating costs for the year, excluding the Dargues Mine, were $11.1 million higher due to increased activities, in comparison to the
prior year. The changes were as a result of:
— an increase in site costs at the Peak Mine of $9.1 million reflecting the increase in volumes mined and processed during the year;
— site costs at the Hera Mine during FY21 remained largely in line with the year prior despite the increase in volumes; and
— increased transportation costs at Hera related to higher volumes of bulk concentrate.
AURELIA METALS
69
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. Operating and Financial Performance (continued)
2.1 Profit and financial performance (continued)
The addition of the Dargues Mine from 17 December 2020, contributed total site costs of $17.5 million. The depreciation and
amortisation expense attributable to Dargues is $20.1 million.
The other significant movements for the year include:
— the once-off transaction costs totalling $20.0 million related to the acquisition of the Dargues Mine have been added back to the
underlying net profit to improve the comparability of performance between the financial years presented;
— fair value adjustment and remeasurement relates to the revaluation of financial assets and liabilities at balance date which have been
added back to the underlying net profit to improve the comparability of performance between the financial years presented. The
adjustments include a favourable adjustment of $8.4 million for the Triple Flag (third party royalty) liability related to the Dargues
Mine, offset by $2.8 million which includes the revaluation ordinary shares held in Sky Metals Limited (ASX: SKY); and
— tax expense of $28.7 million increased by 82% in comparison with the prior year. This was due to higher profits (58%) and recognises
that the acquisition and stamp duty costs associated with the Dargues acquisition are not deductible for tax purposes.
The effective tax rate during the period was 42% is elevated in comparison to the notional tax rate. This is largely due to the acquisition
and stamp duty costs of $20.0 million (associated with the Dargues acquisition) being not deductible for tax purposes.
Group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)
Group EBITDA is a metric used to evaluate operating performance. During FY21, the Group achieved a record EBITDA. The EBITDA and
underlying EBITDA results in comparison to the prior year are summarised below:
Underlying Group EBITDA
Profit before income tax and net finance expenses
Depreciation and amortisation
EBITDA1
Business combinations - Dargues Mine acquisition costs and stamp duty
Fair value adjustment/remeasurement of financial assets and liabilities
Underlying EBITDA 2
2021
$’000
77,142
76,927
2020
$’000
46,782
56,665
154,069
103,447
20,002
(5,472)
168,599
-
(3,887)
99,560
Change
%
65%
(36%)
49%
(100%)
(41%)
69%
1
EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) is a non-IFRS measure.
2 Underlying EBITDA (non-IFRS measure) reflects statutory EBITDA as adjusted to reflect the Directors’ assessment of the result for the ongoing business
activities of the Consolidated Entity.
The items adjusted for are determined to be not in the ordinary course of business and relate to transaction and advisory fees and stamp duty expense incurred
for the acquisition for the Dargues Mine (on 17 December 2020) and fair value adjustments/remeasurements of financial assets and liabilities at 30 June 2021.
The presentation of non-IFRS financial information provides stakeholders the ability to compare against prior periods in a consistent manner. These numbers are
not required to be audited.
A strong EBITDA margin was delivered, with an underlying EBITDA margin of 40% being recorded. This was a significant improvement in
comparison to the prior year underlying EBITDA margin of 30%.
70
ANNUAL REPORT 2021
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. Operating and Financial Performance (continued)
2.2 Cash flow performance
FY21 was a growth and capital-intensive period for the Company. Throughout, the Company has been supported by reliable operating
cashflows and has maintained a strong balance sheet which places the Company on a strong footing to continue to pursue its
strategic objectives.
The Company’s cash flow for the year ended is summarised below:
Group cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net movement in cash
Net foreign exchange difference
Cash at the beginning of the year
Cash at the end of the year
2021
$’000
136,643
(285,387)
144,867
(3,877)
(694)
79,103
74,532
2020
$’000
110,531
(111,479)
(23,689)
(24,637)
(562)
104,302
79,103
Change
%
24%
(156%)
712%
(84%)
23%
(24%)
(6%)
The net cash inflows from operating activities amounted to $136.6 million (2020: $110.5 million) which enabled the Company to:
— invest into the business through organic growth projects, including Federation, Great Cobar, development of the Kairos deposit at
the Peak Mine, and extensive exploration activities;
— contribute to the funding for the acquisition of the Dargues Mine and to support the ramp-up and integration of the operation; and
— make a return to Shareholders through a fully franked dividend that was paid in October 2020.
Net cash outflow from investing activities was $285.4 million (2020: $111.5 million). The key investing activities this year comprised:
— acquisition of the Dargues Mine in NSW for cash consideration paid of $165.3 million;
— sustaining mine capital, excluding lease payments, of $40.0 million (2020: $34.1 million);
— growth capital of $26.3 million (2020: $36.4 million); and
— exploration and evaluation of $20.6 million (2020: $12.2 million);
Net cash outflow from financing activities of $144.9 million (2020: $23.7 million) includes the following key activities:
— a dividend payment of $8.7 million paid in October 2020 (2020: $17.5 million);
— capital raising activities totalling $124.8 million (net of fees) to support the acquisition and integration of the Dargues Mine; and
— term loan drawdown of $45.0 million to support the acquisition and integration of the Dargues Mine.
AURELIA METALS
71
OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 2. Operating and Financial Performance (continued)
2.3 Group operational summary
The key operating results for the Group are summarised below:
Production volume
Gold
Silver - contained metal
Copper - contained metal
Lead - contained metal
Zinc - contained metal
Sales volume
Gold doré and gold in concentrate
Silver doré and silver in concentrate
Payable copper in concentrate
Payable lead in concentrate
Payable zinc in concentrate
Average prices achieved1
Gold
Silver
Copper
Lead
Zinc
2021
$’000
103,634
692,133
4,720
25,894
25,059
102,589
461,426
4,356
22,432
18,341
2,476
34
10,927
2,676
3,613
2020
$’000
91,672
571,525
6,262
21,561
20,087
93,174
369,797
5,306
18,390
12,783
2,325
25
8,560
2,775
3,028
Change
%
13%
21%
(25%)
20%
25%
10%
25%
(18%)
22%
43%
6%
38%
28%
(4%)
19%
oz
oz
t
t
t
oz
oz
t
t
t
A$/oz
A$/oz
A$/t
A$/t
A$/t
All in sustaining cost2
$/oz
1,337
1,526
(12%)
1
2
After realised hedge gains/ losses
All-in Sustaining Costs (AISC) is a non-IFRS measure and is not required to be audited. Group AISC includes site costs (mining processing, administration, changes
in inventory), royalty, transport and smelter expenses, by-product credits (silver, copper, lead and zinc sales), sustaining capital, corporate costs, divided by gold
sold during the year.
The Group’s operational performance outcomes for FY21 were underpinned by:
— increased gold production across the Group, with the Peak Mine contributing 57koz, the Hera Mine contributing 31koz and the
Dargues Mine contributing 15koz since acquisition by Aurelia;
— significant improvements to ore processing throughput at Peak and Hera, with a 10% and 9% increase respectively;
— meaningful benefit from the polymetallic ore types at both Peak and Hera providing significant by-product credits;
— solid gold recovery rates maintained across the group (Peak 92.7%, Hera 86.3% and Dargues 93.5%);
— stable and consistent operating costs across each of the sites; and
— Group AISC meeting the FY21 guidance target.
72
ANNUAL REPORT 2021
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. Operating and Financial Performance (continued)
2.4 Dargues Mine operational summary
On 17 December 2020, Aurelia acquired 100% of the Dargues Mine and regional exploration tenements by way of the acquisition of all
shares in Dargues Mine Pty Ltd from Diversified Minerals Pty Ltd. The Dargues Mine is located in NSW, approximately 60km south-east
of Canberra.
The mine’s development and construction were completed prior to Aurelia’s acquisition. The operation produced its first gold
concentrate in June 2020, whilst the process plant reached its nameplate annualised capacity of approximately 355ktpa in
September 2020.
The purchase consideration for the acquisition included the following elements:
— $165.3 million in cash paid (before net working capital adjustments);
— $24.0 million in Aurelia ordinary shares at A$0.43/share. The Scrip Payment is subject to escrow until at least the release of Aurelia’s
FY21 Appendix 4E and Financial Reports; and
— a contingent element of up to a maximum of A$5 million, payable in the form of Aurelia’s ordinary shares or cash that is conditional
on the addition of incremental JORC compliant Mineral Resources discovered at Dargues up to 30 June 2022.
The key performance metrics for the Dargues Mine, since acquisition, are tabulated below.
Dargues Mine
Ore Processed
Gold grade
Gold Recovery
Gold production
AISC (All In Sustaining Cost)1
1
AISC is a non-IFRS measure.
Period from
17 December 2020
to 30 June 2021
170,804
2.93
93.5
15,186
2,483
kt
g/t
%
oz
$/oz
Throughout the second-half of FY21, underground mining activities continued to ramp-up to design levels. Mine development was
prioritised towards decline advance and access to new production areas. By the end of FY21, the operation had demonstrated the
monthly development, ore production, backfill placement and mill throughput volumes required to sustain steady state production. Gold
head grade in FY21 was lower than expected as a consequence of stoping sequence delays caused by poor local ground conditions and
mill feed being supplemented from lower grade sources. Mined ore grades are forecast to increase significantly above FY21 levels as
production is delivered from deferred stopes and the mine develops to access higher in-situ grade at depth.
Aurelia’s stated strategic objective is to deliver long term value and returns growth. The acquisition of Dargues Mine:
— provided a logical, attractive asset that complements the Hera and Peak mines in NSW, allowing for the diversification of Aurelia’s
asset base and an enhancement of production scale;
— firmly establishes Aurelia as a mid-cap gold dominant producer, which also benefits from significant by-product credits, bringing
group gold production in line with Aurelia’s mid-cap ASX gold peers;
— increased Group contained gold in ore reserves by 66% at the time of the acquisition (refer to page 14 of ASX announcement dated
13 November 2020: Strategic Acquisition and Capital Raising);
— improves forecast Group AISC and All In Costs (AIC) over the Life Of Mine (LOM) ranges for Dargues; and
— enhances Aurelia’s asset portfolio, whilst also providing avenues for additional financial returns from mine life extension and
operating discipline.
AURELIA METALS
73
OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 2. Operating and Financial Performance (continued)
2.4 Dargues Mine operational summary (continued)
Following signing of the Share Sale Agreement (SSA) for the acquisition, Aurelia moved quickly to undertake an extensional and infill
resource drilling program. The program targeted Mineral Resource growth along strike and at depth, as well as providing additional
confidence to the existing Mineral Resource estimates.
The results from the program informed the Mineral Resource and Ore Reserve estimates in July 2021, that demonstrated resource
growth well in excess of depletion from the commencement of mining. Further assay results remained pending at the time of the release
and, as such, the results were not included as part of Aurelia’s annual Group Mineral Resource and Ore Reserve Statement.
Aurelia will continue to optimise mine production, implement mine design and process circuit improvements and extend mine life and
annual production rate (subject to permitting approvals).
2.5 Peak Mine operational summary
The key performance metrics for the Peak Mine are tabulated below.
Peak Mine
Ore processed
Gold grade
Copper grade
Lead grade
Zinc grade
Gold recovery
Production Volume
Gold production
Copper production
Lead production
Zinc production
2021
$’000
624,565
3.07
0.95
3.17
2.82
92.7
57,080
4,720
15,829
10,791
2020
$’000
568,537
2.72
1.19
2.51
1.72
93.7
46,641
6,262
12,088
6,744
Change
%
10%
12%
(20%)
26%
64%
(1%)
22%
(25%)
31%
60%
kt
g/t
%
%
%
%
oz
t
t
t
AISC (All in sustaining cost)1
$/oz
867
1,737
(50%)
1
AISC is a non-IFRS measure.
The upgraded Peak process plant was commissioned in February 2020, allowing the operation to realise greater payability from the
various polymetallic ores. The optimisation of the plant, campaign processing of ore types and improved underground material handling
rates has allowed the site to increase mill throughput by 10% to 624,565 kt (FY20: 568,537 kt).
The total gold sold during the year was 54,822 oz at an AISC of $867/oz (FY20: 46,369 oz at an AISC of $1,737/oz). Higher lead and zinc
head grades, coupled with improved throughput resulted in improved lead and zinc production. In turn, this has yielded strong base
metal by-product credits that have contributed to the AISC cost result.
During FY21, Aurelia focussed on establishing development access to the lower portion of the Kairos deposit via a decline from the
existing Perseverance workings at Peak. Recent activity has involved the establishment of ore drives, the primary ventilation system and
secondary egress from the deposit. In June 2021, the first stope ore from Kairos was mined following the completion of the emergency
escape way.
Total sustaining capital expenditure for the year was $17.9 million (FY20: $30.2 million), largely related to mine development and support
capital. Sustaining capital expenditure was lower in comparison to the prior year due to the prioritisation of the development decline to
the new Kairos deposit, which was classified as growth capital. Total growth capital expenditure amounted to $25.2 million.
74
ANNUAL REPORT 2021
OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 2. Operating and Financial Performance (continued)
2.5 Peak Mine operational summary (continued)
The Company is committed to continued exploration and resource definition drilling at Peak. Significant additional underground
drilling was completed in and around the Kairos deposit during the period, extending the deposit down plunge and along strike. Copper
mineralisation was also intercepted immediately to the east of the Kairos deposit, with work ongoing to establish the potential of
this area (refer to ASX releases dated 29 March 2021 and 1 July 2021). A substantial infill and extensional drilling program was also
completed at Great Cobar during the period, resulting in improved confidence in the existing resources and extensions to mineralisation
both up- and down-plunge (refer to ASX release dated 29 June 2021).
2.6 Hera Mine operational summary
The key performance metrics for the Hera Mine are tabulated below:
Hera Mine
Ore processed
Gold grade
Lead grade
Zinc grade
Gold recovery
Production Volume
Gold production
Lead production
Zinc production
2021
$’000
445,828
2.48
2.44
3.46
86.3
31,369
10,064
14,268
2020
$’000
410,495
3.84
2.55
3.53
88.3
45,031
9,472
13,343
kt
g/t
%
%
%
oz
t
t
AISC (All in sustaining cost)1
$/oz
1,206
1,150
1
AISC is a non-IFRS measure.
Change
%
9%
(35%)
(4%)
(2%)
(2%)
(31%)
6%
7%
5%
The operational outcomes realised from the Hera Mine during FY21 were founded upon sustainable incremental plant improvements.
This initiative resulted in higher mill operating time and throughput rates (9% increase in ore processed in comparison to FY20) and
consistent gold recoveries despite declining feed grade.
As anticipated, the lower gold feed grade was somewhat offset by increased lead and zinc production that provided substantial by-
product credits which is expected to continue for the remaining mine life. Sustainment of mine production rates, plant optimisation and
throughput rates are being prioritised as ore with lower gold and higher base metal grades are processed in the future.
Underground infill and extensional drilling continued at the Hera Mine during the period, with up-dip areas in the North Pod and Hays
North being a particular focus. The identification of gold and base metal mineralisation above the existing stoping areas in the Hays
North lens is highly encouraging. The potential for this area to add material to Hera’s Life of Mine plan is currently being investigated.
In the near-term, the focus for the Company is to accelerate exploration and evaluation works in relation to the Federation deposit. The
Federation Project has the potential to leverage from the established mine infrastructure at the Hera Mine. Given the exceptionally high-
grade tenor, Aurelia considers Federation to be one of the most significant discoveries in the region in the last 30 years (refer to section
3.1 for further detail on Federation).
AURELIA METALS
75
OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 3. Growth and Exploration
Aurelia’s exploration and evaluation activities continue to unlock
exceptional value. Targeted exploration and resource definition
drilling throughout FY21 has delivered exceptional results within
Aurelia’s highly prospective tenement holding.
The Company is committed to pursuing its growth strategy and
will continue to focus on its priority projects throughout FY22.
The Company’s preeminent projects and targets are
summarised below:
3.1 Federation Project
The Federation deposit, which was discovered in April 2019, is
located fifteen kilometres south of the historic copper mining
town of Nymagee and 10 kilometres south of Aurelia’s operating
Hera Mine in central western NSW.
The Federation Project is a base and precious metal deposit that
hosts high-grade lead, zinc and gold mineralisation. Federation is
an attractive near-term development prospect. Drilling in FY22 is
planned to confirm the Project’s preferred development pathway
and advancing preparatory works.
Project evaluation
Aurelia completed a Scoping Study in March 2021. The study
examined possible project development scenarios and identified
a preferred configuration to be investigated in more detail at the
next study phase. The study leveraged established infrastructure
and operating knowledge at the nearby Hera Mine which
provided greater confidence in productivity, cost and commercial
parameters relative to a full greenfield project development.
Aurelia’s Board of Directors approved the commencement of
a Feasibility Study (FS) based on the favourable Scoping Study
findings and preferred mining method, flowsheet and the ability
of the Project to benefit from existing Hera infrastructure to
minimise the social and environmental impacts of the Project.
The expected timing for the completion of the FS is mid-2022.
In the meantime, Aurelia is establishing additional
accommodation capacity at the Hera village. The Company has
also lodged an application for the development of an exploration
decline to allow infill and extensional drilling from underground
platforms and extraction of a 20 kt bulk sample for metallurgical
evaluation. The Company also initiated an Environmental Impact
Study (EIS) and supporting works program to advance the Project
through the NSW regulatory approvals process.
Exploration and Mineral Resource
The Company released an updated Mineral Resource Estimate
(MRE) for Federation in February 2021. Since then, the Company
has continued an intensive campaign of diamond drilling, with
the focus moving to the central and southwestern portions of the
deposit, where several significant intercepts were reported (refer
to ASX announcement dated 30 June 2021: Federation Returns
Best Base Metal Intercepts to date). Results from this program
underpinned a further MRE update in July 2021 that reported a
45% tonnage increase relative to the MRE published in
February 2021.
The Federation deposit remains open in multiple directions.
The Company is undertaking an accelerated drilling program to
upgrade MRE confidence from Inferred to Indicated status, with
four drill rigs operating at the site in early FY22. This program
is expected to underpin the maiden Ore Reserve Estimate in
Federation following completion of the FS in mid-2022.
3.2 Great Cobar
Aurelia commenced a surface drilling campaign at the Great
Cobar deposit in late September 2020, with the aim of building
confidence in the existing Indicated and Inferred MRE and to test
high potential extensional targets.
The infill portion of the drill program furnished high grade base
metal results (refer to ASX announcement dated 29 March
2021: Great Cobar and Kairos Drilling Update), whilst the drilling
activities on areas up and down plunge of the MRE intercepted
very significant copper-gold and zinc-lead-silver mineralisation.
It also demonstrated that mineralisation extends more than
100 metres below the current MRE, highlighting the potential
for further copper mineralisation at depth (refer to ASX
announcement dated 28 June 2021: Copper Potential Unlocked
at Great Cobar).
Project Evaluation
Aurelia initiated a Prefeasibility Study (PFS) to examine potential
future mining scenarios for Great Cobar. The PFS is evaluating the
potential for Great Cobar production to be treated at the Peak
process plant. The PFS is due for completion in the December quarter
of FY22 and assuming a positive outcome, will allow the release of a
maiden Ore Reserve for the deposit.
The Company plans to access the Great Cobar deposit via
development of an approved exploration decline from the existing
New Cobar workings, which are located approximately 1.5 km to the
southeast. Aurelia has lodged an EIS to the Department of Planning,
Industry and Environment for development consent to mine the
deposit and is preparing a response to public and government
submissions received during the EIS process.
76
ANNUAL REPORT 2021
OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 3. Growth and Exploration (continued)
Exploration and Mineral Resource
Aurelia’s recent infill drill program supported an increase to the
MRE tonnage for Great Cobar by 43% to 5.8Mt (refer to ASX
announcement dated 23 July 2021: Group Mineral Resource and
Ore Reserve Statement). The updated MRE is being used for mine
design activities being undertaken for the PFS.
3.3 Kairos
The Kairos discovery was announced in early 2019 and was
bought into production in June 2021. The Kairos deposit is
situated below the Peak Mine workings, around 700 metres
to the north and slightly deeper than the Chronos lode, with a
similar steeply plunging geometry.
The Company has established an exploration drilling platform to
support an intensive ongoing drilling campaign, with a particular
focus on extensions to the deposit at depth and along strike to
the north. This has yielded further high-grade intercepts (refer
to ASX announcement dated 1 July 2021: Kairos Delivers further
high grades).
Future drilling will target both resource upgrade drilling in the
middle and upper sections of the lode and resource extensions
at depth.
3.4 Dargues
Consistent with Aurelia’s stated objective following the
announcement of the acquisition of the Dargues Mine, the
Company embarked upon a resource upgrade and extensional
drilling campaign. Recent results have confirmed multiple
zones of gold mineralisation beyond the existing resource
footprint (refer to ASX announcement dated 1 July 2021: Gold
Mineralisation extended at Dargues).
The Dargues mineralisation remains open in several directions.
The areas along strike to the west of the Main Lode and to the
east of the Plums Lode also remain very sparsely drill tested and
are set to be targeted in FY22.
3.5 Other near-mine and regional exploration
The Company’s exploration tenements remain highly prospective.
Other near-mine and regional exploration targets will continue
to be explored and evaluated based on the ranking of relative
prospectivity.
For further detail, including drill results, refer to the Aurelia
website (www.aureliametals.com.au).
4. Safety, Risk and Sustainability
During the year, the Company built upon the momentum
established in FY20 following the introduction of Aurelia’s Safe
Metals strategy. The strategy focuses on improving health and
safety outcomes and includes several targeted initiatives that
have bought about a significant improvement in the safety
outcomes across the business.
The activities during FY21 were directed towards providing
certainty of no fatalities and no major environment or community
incidents (incidents having a detrimental impact on the
environment that would impact Aurelia’s reputation and licence
to operate).
Aurelia has placed a strong emphasis on leadership standards,
measures and systems, along with rigorous reviews of incidents
with the aim of preventing repeat occurrences.
The major focus areas during FY21 included:
Fatal Hazard Standards
Several Group standards were developed, supported by Critical
Control Verification programs, to define requirements for
appropriately engineered work environments, fit for purpose
equipment, and a trained workforce.
Environment Catastrophic Hazards
A Group standard was developed to address catastrophic
environmental hazards, supported by a Critical Control
Verification program.
Rules to Live By
A defined set of rules by which all people working at Aurelia sites
are required to comply. The rules are based on industry research
where breaches of such rules may result in fatalities. Training was
completed for all personnel.
Green Rules
The Rules to Live By were extended to Green Rules which outline
a set of non-negotiable rules that prevent environmental harm.
Lead Indicator Program
A program focussing on visible leadership and the proactive
verification of safety and environmental compliance to defined
standards. The program includes a defined activity matrix which
includes Safe Act Observations (SAO), Workplace Inspections, and
Planned Task Observations (PTO).
Competency Framework
A competency matrix developed to map employee training
and development plans and to identify and address any gaps in
expected competencies.
AURELIA METALS
77
OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 4. Safety, Risk and Sustainability
(continued)
Closeout of Actions
A groupwide approach for the tracking and reporting of actions
in the Company’s event management system was developed.
High Potential Risk Incidents (HPRI’s)
The Group continued to focus on High Potential Risk Incidents
(HPRI’s) and trends overseen by the Senior Taskforce for
Significant Incidents where all HPRI’s are fully investigated, and
actions implemented with lessons learnt shared across the Group
to prevent repeat incidents.
5. Corporate
The increase in corporate costs during the year are indicative
of activities undertaken in relation to mergers and acquisitions
processes and group growth focussed activities. The corporate
costs for the year were $13.8 million (2020: $9.2 million).
In addition to this, there was expenditure directly attributable to
the acquisition of the Dargues Mine totalled $20.0 million, which
includes stamp duty of $13.3 million.
5.1 Dividends
On 25 August 2020, the Board of Directors resolved to pay a fully
franked dividend of $0.01 per share related to the year ended 30
June 2020. The total dividend of $8.7 million was paid in
October 2020.
The Board of Directors did not declare a dividend for the year
ended 30 June 2021.
5.2 Balance Sheet
The total assets increased during the year to $656.5 million (30
June 2020: $343.8 million), representing an 91% increase. This
increase is primarily due to the Company’s acquisition of Dargues
($190.5 million) and continued investment in mine development
and the pursuit of organic growth through exploration and
evaluation activities, focussing on the two preeminent projects of
Federation and Great Cobar.
The other main events and movements during the year include:
Assets
— investment in mine development, including Kairos at Peak,
totalling $67.8 million (refer to note 11 of the Financial
Statements)
— investment in Property, plant and equipment of $14.4 million
(refer to note 10 of the Financial Statements)
— investment in Exploration and Evaluation totalling $20.7
million, which includes Federation, Great Cobar, Dargues
(since acquisition) and other regional targets (refer to note
12 of the Financial Statements)
— restricted cash of $8.6 million relates to cash backing as
required under the $50 million Guarantee Facility, which
forms part of the Syndicated Facilities Agreement
Liabilities
— interest bearing loans totalling $34.4 million (net of fees
paid) relates to $45 million loan facility as part of the
Syndicated Facilities Agreement drawn down in support of
the acquisition of Dargues Mine in December 2020
— other financial liabilities totalling $43.4 million, includes $39.2
million recognised for future third party royalties payable on
gold sales from the Dargues Mine
— increase in total provisions of $20.8 million mostly
attributable to an increase in rehabilitation provisions for
Peak and Hera totalling $10.3 million and the recognition of
the rehabilitation provision for Dargues of $13.4 million
Equity
— capital raising of $124.8 million, net of fees, completed in
December 2020 to support the acquisition and integration of
Dargues Mine
78
ANNUAL REPORT 2021
OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 5. Corporate (continued)
5.3 Hedging
The Company acknowledges that a prudent hedging strategy
is an important element of financial risk management and
overarching enterprise risk management. On 30 June 2021, the
Company had the following hedges in place:
a) Mandatory gold hedging
Under the secured Syndicated Facilities Agreement effected on
16 December 2020, Aurelia implemented an initial 12-month gold
hedging program which entailed 55koz of gold being hedged at
an average price of A$2,442/oz. Since then, the rolling 12-month
program has been maintained.
At 30 June 2021, the Company had hedged 41.6koz of gold at an
average price of A$2,437/oz with monthly maturities (deliveries)
through to 30 June 2022.
b) Quotation Period hedging
Aurelia delivers concentrate to customers on the industry
standard basis where a provisional payment is received for the
provisional metal sold based on the prevailing market price at the
time of the shipment.
The final sale value for the actual metal sold is determined at
the end of the Quotation Period (QP) per the sale contract.
The typical QP under Aurelia’s arrangements with customers is
generally 1 to 3 months.
The Company has initiated a program by which it hedges between
0% to 90% of the metal price exposure based on the provisional
invoice for contained metal sold. This program is undertaken to
minimise any impact from price volatility causing potential for a
liability (repayment of sale proceeds to the customer) which may
result from a lower metal price being realised at the end of
the QP.
At 30 June 2021, the company had 483 tonnes of zinc hedged at
a price of US$2,854 per tonne and 601 tonnes of lead hedged at a
price of US$2,175 per tonne.
6. Material Business Risks
Aurelia Metals prepares its business plan using estimates
of production and financial performance based on a range
of assumptions and forecasts. There is uncertainty in these
assumptions and forecasts, and risk that variation from them
could result in actual performance being different to expected
outcomes. The uncertainties arise from a range of factors,
including the nature of the mining industry, and general
economic factors. The material business risks faced by the Group
that may have an impact on the operating and financial prospects
of the Group at period end are outlined below.
6.1 Fluctuations in the commodity price and Foreign
Exchange rates
The Group’s revenues are exposed to fluctuations in the US$ price
of gold, silver, lead, zinc and copper. Volatility in metal prices creates
revenue uncertainty and requires careful management of business
performance to ensure that operating cash margins are maintained
despite metal price volatility.
Gold doré sales are denominated in A$, whilst concentrate sales
are denominated in US$. The Company has a foreign exchange
price risk when the US$ price of a commodity is translated back
to A$.
During the financial year, gold sales were 102,589 ounces. The
effect on the income statement to an A$50/oz increase/decrease
in gold price would have been an increase or decrease in gold
revenue of $4.1 million.
During the financial year, the Company sold base metal
concentrates containing payable lead of 22,432 tonnes, payable
zinc of 18,341 tonnes, and payable copper of 4,356 tonnes. An
increase or decrease of US$50/t in the price of lead, zinc and
copper would increase or decrease revenue by $2.3 million.
Declining metal prices can also impact operations by requiring a
reassessment of the feasibility of an exploration target and/or
evaluation project. Even if a project is ultimately determined to
be economically viable, the need to conduct such a reassessment
could cause substantial delays and/or may interrupt operations,
which may have a material adverse effect on our results of
operations and financial position.
AURELIA METALS
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OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 6. Material Business Risks (continued)
6.2 Mineral Resources and Ore Reserves
Group Mineral Resources and Ore Reserves are estimates, and no
assurance can be given that the estimated reserves and resources
are accurate or that the indicated level of metal or other mineral
will be produced. Such estimates are based on interpretations
of geological data obtained from drill holes and other sampling
techniques. Actual mineralisation or geological conditions may be
different from those predicted. No assurance can be given that
any part of the Company’s mineral resources constitute or will be
converted into reserves.
Market price fluctuations of metal prices, as well as increased
production and capital costs, may render some of the Company’s
ore reserves unprofitable to develop for periods of time or may
render some low margin ore reserves uneconomic. Reserves
may have to be re-estimated based on actual production and
cost experience. Any of these factors may require the Company
to modify its ore reserves, which could have either a positive or
negative impact on the Company’s financial results.
6.3 Replacement of depleted reserves
The Company must continually replace reserves depleted by
production to maintain production levels over the long-term.
Reserves can be replaced by expanding known ore bodies,
locating new deposits, acquiring new assets or achieving higher
levels of conversion from resource to reserve with improvements
in production costs and or metal prices. Exploration is highly
speculative in nature and as such, the Company’s exploration
projects involve many risks and can often be unsuccessful. Once
a prospect with mineralisation is discovered, it may take several
years from the initial discovery phase until production is possible.
As a result, there is no assurance that current or future
exploration programs will be successful. There is a risk that
depletion of reserves will not be offset by discoveries or
acquisitions, or that divestment of assets will lead to a lower
reserve base. The mineral base of the Company may decline
if reserves are mined without adequate replacement and the
Company may not be able to sustain production beyond the
current mine life, based on current production rates.
6.4 Production and cost estimates
The Company routinely prepares internal estimates of future
production, cash costs and capital costs of production. The
Company has developed business plans which forecast metal
recoveries, ore throughput and operating costs for each business
unit. While these assumptions are considered reasonable, there
can be no guarantee that forecast rates will be achieved. Failure
to achieve production or cost estimates could have an adverse
impact on the Company’s future cash flow, profitability and
financial solvency.
The Company’s actual production and costs may vary from
estimates for a variety of reasons, including:
— actual ore mined varying from estimates of grade, tonnage,
dilution and metallurgical and other characteristics;
— short-term operating factors relating to the ore reserves,
such as the need for sequential development of ore bodies
and the processing of new or different ore grades;
— revisions to mine plans;
— risks and hazards associated with mining;
— natural phenomena, such as inclement weather conditions,
water availability, floods; and
— unexpected labour shortages or strikes.
Costs of production may also be affected by a variety of factors,
including ore grade, metallurgy, labour costs, consumable costs,
commodity costs, general inflationary pressures and currency
exchange rates.
6.5 Financial solvency
The Company has borrowings amounting to $36.9 million
at balance date and maintains a significant cash balance.
Maintaining sufficient liquidity to operate the business is
impacted by the operational and financial risk factors identified
in this section under ‘Material Business Risks’.
With three operating assets and the production of multiple
commodities (gold, lead, zinc, copper and silver), the Company
has a reduced risk exposure relative to prior years given the
spread and separation of risks. Asset diversification can help
with reducing financial risk, but it cannot guarantee events or
circumstances that may cause financial solvency risk to increase.
The Board and management monitors solvency at all times and
aims to manage the business with an acceptable level of working
capital to mitigate solvency risk.
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ANNUAL REPORT 2021
OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 6. Material Business Risks (continued)
6.6 Mining risks and insurance risks
The mining industry is subject to significant risks and hazards,
including environmental hazards, industrial accidents, unusual
or unexpected geological conditions, unavailability of materials
and equipment, rock failures, cave-ins, and weather conditions
(including flooding and bushfires) – most of which are beyond the
Company’s control.
These risks and hazards could result in significant costs or delays
that could have a material adverse effect on the Company’s
financial performance, liquidity and operations results.
The Company maintains insurance to cover some of these risks
and hazards. The insurance is maintained in amounts that are
believed to be reasonable depending on the circumstances
surrounding each identified risk. However, property, liability and
other insurance may not provide sufficient coverage for losses
related to these or other risks or hazards.
6.7 Management skills and depth
The mining industry in general may be subject to a shortage of
suitably experienced and qualified personnel in key technical
roles. Attracting and retaining key persons with specific
knowledge and skills are critical to the viability and growth of
the Company. The Company maintains a suitably structured
remuneration strategy to assist with the attraction and retention
of key employees. However, the risk of loss of key employees
is always present. This risk is managed through having active
and broad recruitment channels and the ability to rely upon
other suitable personnel and qualified external contractors and
consultants when required.
6.8 COVID-19 Measures
The safety and wellbeing of our people and contractors, and
the communities where they live and operate, remains Aurelia’s
core priority. The Company has therefore implemented, and
will continue to implement, intervention measures targeted at
minimising the risk of potential transmission of COVID-19. These
include a range of measures with respect to underground mining,
processing plants, accommodation and logistics operations,
as well as at site and in corporate offices. The Company has
developed COVID-19 Crisis Management Teams and a Pandemic
Plan with Trigger Actions for appropriate responses to protect
people, communities and assets depending on the nature and
locality of COVID-19 cases.
The persistency of the COVID-19 pandemic, although challenging,
has not had a material impact on the business, and with no
incidents at any Aurelia operations.
The Company has some employees and contractors who reside
interstate and who travel to its operating mine sites in NSW to
work. Interstate border restrictions and COVID-19 lockdown
restrictions are a risk managed by the Company.
As at the date of this report, the pandemic remained ongoing
and evolving.
6.9 Environment and Sustainability
Environmental, health and safety regulations, permits
The Company’s mining and processing operations and exploration
activities are subject to extensive laws and regulations governing
the protection of the environment. This includes regulation of
waste disposal, worker safety, mine development and protection
of endangered and other special status species.
Real or perceived events associated with the Company’s activities
(or those of other mining companies) that detrimentally impact
the environment, human health and safety, or the surrounding
communities may result in penalties, including delays in obtaining
or failure to obtain government permits and approvals. This may
adversely affect the Company’s operations, including its ability to
continue operations.
The Company has implemented health, safety and community
initiatives at its operations to ensure the health and safety of
its employees, contractors and members of the community
affected by its operations. However, there is no guarantee that
such measures will eliminate the occurrence of accidents or
other incidents which may result in personal injuries, damage to
property, and in certain instances such occurrences could give
rise to regulatory fines and/or civil liability.
Water scarcity
Water can be a scarce commodity in regional NSW. Water is a
significant input into processing activities and access to sufficient
water to support current and future activities is critical. The
impact of drought conditions serves to increase this risk. The
Company has established reliable sources of water which are an
alternative to high security water sources.
Each of the mine operations prioritise the use of recycled water
for its processing activities to preserve water reserves and to
limit the use of external water sources.
Hera utilises water from a range of water sources, including
ground water bores and water from the historic Nymagee
underground workings which is located nearby.
Peak Mine obtains high security water from the Burrendong Dam
to supplement other water sources, including water from the
historic Great Cobar underground workings.
AURELIA METALS
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OPERATIONS AND FINANCIAL REVIEW (CONTINUED) 6. Material Business Risks (continued)
6.9 Environment and Sustainability (continued)
Dargues utilises water from storage facilities located on site which
may need to be supplemented by other sources, if required, while
additional water security projects are being progressed.
Significant changes in the state of affairs
Apart from the items as noted elsewhere in this report, there
were no significant changes in the state of affairs of the Company
during the financial year.
Community relations
The Company has operations near established communities. Active
community engagement and a proactive outlook and approach
to local community stakeholder concerns and expectations is a
key priority. The mining industry in general is subject to potential
community relations related risks which may result in a disruption
to production and exploration activities and delay the approval
timelines for key development activities.
Significant events after the balance date
The following significant events occurred after 30 June 2021:
1. On 23 July 2021, the Company released its 2021 Mineral
Resource and Ore Reserve Statement and the 2021 Group
Production Target Statement.
Future developments
The Company recognises that by building respectful relationships
with the communities in where it operates, creates a shared value
that is mutually beneficial. Community relations initiatives such as
community forums, community development programs, donations,
and sponsorships are coordinated to ensure active
community engagement.
Other likely developments in the operations of the Company and
the expected results of those operations in future financial years
have not been included in this report, as the inclusion of such
information is likely to result in unreasonable prejudice to the
Company. Accordingly, this information has not been disclosed in
this report.
Environmental regulations
The Company is subject to significant environmental regulation
in respect to its exploration, mining and processing activities.
The Company aims to ensure the appropriate standard of
environmental care is achieved, and in doing so it is aware of
and complies with all environmental legislation. Other than
the matters outlined earlier in the report, the Directors of the
Company are not aware of any material breach of environmental
legislation for the year under review.
The Company’s operating philosophy is to ensure that the
Company’s activities are carried out legally, ethically, and with
integrity and respect. Being a significant employer and consumer
within the communities in where it operates, the Company
acknowledges the immeasurable responsibility bestowed on it.
The Company’s active community engagement program provides
a platform for the Company to understand stakeholder needs and
to work towards proactively addressing concerns and mitigating
any risk.
6.10 Climate Change
Aurelia acknowledges the potential for climate change to impact
our business and is committed to understanding and proactively
managing the impact of climate related risks to our business and
our environment. The highest priority climate related risks include
the following: reduced water availability, changes to legislation
and regulation, reputation risk, as well as market changes and
shareholder activism. Sustainable environmental considerations,
such as energy sources and usage, are also being built
into our planning and decision-making processes for our
future developments.
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ANNUAL REPORT 2021
OPERATIONS AND FINANCIAL REVIEW (CONTINUED) Hera Mine, NSW
AURELIA METALS
83
LETTER FROM THE CHAIRMAN OF
THE REMUNERATION AND NOMINATION COMMITTEE
Applying the successful BBP process in FY22, we will build
upon the significant improvements achieved in safety and
environment in FY21 and accelerate initiatives which have
commenced across the other key pillars.
This year we also used a research-based approach to take first
steps towards other important initiatives in Sustainability,
Inclusion and Diversity. The Company has commenced a process
to complete a baseline assessment on our carbon footprint
to inform our position on climate change and strategies to
decarbonise the business. We also conducted 91 confidential
one-on-one interviews across the sites and the corporate
office to better understand current inclusion and diversity
performance. The research results will inform our strategy
and the development of measurable targets in FY22 with the
Aurelia Board already committing to ensuring 25% of Board
members are women (as a minimum).
Through our organic and inorganic growth strategies, the
Company achieved a solid finish to FY21 with:
— a strong balance sheet including cash of $74.5 million;
— successful completion of the Dargues Mine acquisition and
integration into the business;
— substantial upgrades in Mineral Resources across the asset
portfolio, including Federation, Great Cobar (Cu-Au) and
Kairos;
— the Federation Scoping Study completed with the Feasibility
Study (FS), enabling works and permitting underway; and
— achieved FY21 Group production guidance and the AISC
result was better than guidance.
These outcomes provide the platform for our next phase
of growth.
Dear Shareholder,
On behalf of the Board of Directors of Aurelia Metals Limited, I
am pleased to present our FY21 Remuneration Report.
Over the past year, the Company has made significant progress
towards its vision of sustainable long term shareholder returns
which has been anchored by the delivery of our short-term
objectives. In FY21 the focus has been on creating a resilient
organisation with stable and reliable performance as a platform
for sustainable growth. This has resulted in a number of
significant achievements that I am proud to share with you.
Performance
In FY21, Aurelia introduced a robust organisational planning
process to connect every employee in the business to the
Company’s direction and to drive a deep commitment to
organisational success.
The Balanced Business Plan (BBP) brings together leaders
across the business to address the key risks and opportunities
as Aurelia embarks on its next growth phase. Against these
factors, the BBP plots projects and initiatives under the five
pillars of:
— Health Safety, Environment and Community;
— People and Organisation;
— Operations;
— Growth; and
— Financial Outcomes.
The BBP pillars are underpinned by continuous improvement
projects to realise a step change in business performance.
This process has given the Remuneration and Nomination
Committee the opportunity to link BBP objectives to Aurelia’s
remuneration and incentive plans.
In FY21 Aurelia’s Safe Metals strategy has seen a 58% reduction
in workplace injuries and an 82% reduction in reportable
environmental incidents. This outstanding result has been
achieved through a number of initiatives including the
introduction of:
— the Rules to Live By;
— the Green Environmental Rules;
— lead indicator programmes;
— development of fatal hazard standards and Critical Control
Verification; and
— investigation and controls for High Potential Risk Incidents to
prevent repeat incidents.
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ANNUAL REPORT 2021
Remuneration and Governance
Following extensive engagement with our stakeholders
(including proxy advisors) and to align with our revised
governance, remuneration framework and strategy, the
Board made a number of changes to remuneration policy
and practice.
I’m pleased to report the Company now has a more clearly
defined remuneration framework and has updated the
Remuneration and Nominations Committee Charter.
We have incorporated suggestions to improve corporate
governance (including environmental and social governance) in
our activities and have attempted to articulate these areas more
clearly in this Report.
The report now provides greater clarity and transparency and
includes improved illustrations through graphs and tables. A
refined Remuneration philosophy and objectives are articulated
and the link between incentives and performance is explained.
There is also greater detail on performance measures, hurdles
and assessment including how the Board assesses the more
qualitative and discretionary components of rewards.
During the year we introduced a Malus Policy and other
initiatives including providing shares to all employees (not
just the Senior Leadership Team) through an Employee Share
Scheme. This is intended to foster an ‘owners’ mindset’ by
aligning employees with the long-term Company strategy and
allowing them to share in the Company’s success.
The Report also details changes to Non-Executive Director
fees to strengthen the Board and to assist in attracting
quality Board members in accordance with the Board skills-
matrix. To this end, we welcomed new Board members
Robert Vassie and Helen Gillies in January 2021, and we
are in the process of recruiting a new Chairman.
With three producing assets and two major organic
growth projects being advanced, the Company is
about to commence an exciting new chapter. In an
increasingly competitive labour market, I’m confident
our remuneration strategy will enable us to attract
and retain the high performing team we need to take
us forward while strongly aligning employee interest
with sustained gains in shareholder wealth.
I thank you for your interest and support of
our Company.
Paul Harris
Chairman – Remuneration and Nomination Committee
LETTER FROM THE CHAIRMAN OF THE REMUNERATION AND
NOMINATION COMMITTEE (CONTINUED)
AURELIA METALS
85
REMUNERATION REPORT (AUDITED)
This Remuneration Report forms part of the Directors’ Report for the year ended 30 June 2021.
This report outlines the details of the remuneration arrangements for the Directors and Key
Management Personnel (KMP). It also outlines the overall remuneration strategy, framework
and practices adopted by Aurelia in accordance with the requirements of the Corporations Act
2001 and its Regulations.
For the purposes of this report, KMP are defined as those persons having authority and
responsibility for planning, directing and controlling the activities of the Company and
the Group, directly or indirectly, including any Director of the Company (whether executive
or otherwise).
REMUNERATION REPORT TABLE OF CONTENTS
This Remuneration Report is set out under the following main headings:
1. Organisational developments and outcomes
2. Key Management Personnel (KMP)
3. Remuneration Governance and role of the Remuneration and Nomination Committee
4. Remuneration Overview
5. Managing Director & CEO and other executive KMP remuneration
6. Service Agreement key terms
7.
How performance is linked to the variable remuneration for the Managing Director & CEO and other executive KMP
8. Malus Policy
9. Non-executive Directors’ remuneration
10. Remuneration of Key Management Personnel
11. Shareholdings of Directors and other KMP
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ANNUAL REPORT 2021
87
89
90
91
92
94
94
103
103
104
106
1. Organisational developments and outcomes
1.1. The external environment
The persistency of COVID-19, although challenging, did not
have a material impact on the business throughout FY21
(or since the beginning of the pandemic). The Company
has established COVID-19 Crisis Management and Incident
Management Teams that meet regularly at an executive and
operational level, and has a robust Pandemic Plan with trigger
action responses to manage scenarios to protect employees,
contractors, communities, and assets. This has served the
Company well with each of the organisation’s divisions
continuing to meet performance objectives with
minimal disruption.
Given the limited impact of the pandemic on the FY21
performance outcomes, there was no requirement to adjust
remuneration as a result. However, Aurelia’s Board and
Management Team remain cognisant that the pandemic
is constantly changing and remain vigilant in proactively
identifying and managing any potential business impact.
The labour market for the industry continues to be
characterised by labour shortages and businesses are
under increasing pressure from an attraction and retention
perspective due to strong competition for labour. Aurelia will
continue to monitor and adjust its remuneration strategy in
response to the current market conditions.
1.2. How have we responded
During the last twelve months, the Company has made
significant progress on a range of initiatives aimed at
strengthening the foundations for success. Key to this approach
has been a fresh focus on leadership capabilities and building a
culture founded upon shared vision and values, with an aligned
workforce striving for high performance outcomes. This has
been supported by a robust performance management system
and the remuneration framework.
The Company will continue to refine this framework to
ensure there is a clear and articulated link between executive
remuneration and Aurelia’s strategy and annual plans. This will
encompass pillars that we have defined as key to our success,
being:
— Health Safety, Environment and Community;
— People and Organisation;
— Operations;
— Growth; and
— Financial Outcomes.
The remuneration framework and the key performance
measures related to variable ‘at-risk’ remuneration is built upon
these key drivers.
1.3. Our remuneration philosophy
Aurelia’s remuneration philosophy is to provide executives
and employees with a combination of remuneration elements,
which includes performance-based measures designed to drive
a long-term sustainable strategy and short-term performance
objectives. This is supported by an overarching framework
which prescribes organisational structure and remuneration to
enable Aurelia to:
— attract, engage and retain high-calibre employees in order
to achieve the Company’s current and future business needs;
and
— cultivate a performance-based culture whereby competitive
remuneration and reward are aligned to business and
shareholder objectives.
AURELIA METALS
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REMUNERATION REPORT (AUDITED) (CONTINUED)
1. Organisational developments and outcomes (continued)
1.4. Key remuneration developments in FY21
During FY21, the Company has continued to refine the
strategies and governance processes which support the
Company’s remuneration objectives. Some of the activities
completed include:
— implementation of a Malus Policy, based on the underlying
principle that an executive of the Company should not
receive ‘at-risk’ remuneration if the Board determines that
such remuneration would be an inappropriate benefit (refer
to Section 8 for further detail);
— increased Total Fixed Remuneration (TFR) for executive KMP
following a review of remuneration at peer companies and
aligned with increases awarded across the entire workforce;
— externally benchmarked the fee structure for Non-Executive
Directors against peers to ensure the Company can attract
and retain the highest quality candidates for Board positions;
— increased the Non-Executive Director fee structure effective
1 April 2021, which now provides for fees related to Board
sub-committee responsibilities, as summarised in Section 9;
— following Shareholder approval on 19 November 2020,
increased the aggregate fee pool available for Non-Executive
Directors remuneration from $750,000 to $1,000,000 per
annum;
— met the 0.5% increase in legislated Superannuation
Guarantee (SG) effective from 1 July 2021 (this increase is
separate from the annual performance and salary review);
and
— introduced an Employee Share Scheme to all employees
(previously limited to the Senior Leadership team) to create
an ‘owner’s mindset’ by aligning employees with the long-
term company strategy and allowing them to share in the
Company’s success.
With consideration to the strong balance sheet and financial
position of the Company, the Board of Directors decided
it was neither necessary nor fitting for the Company to
claim JobKeeper benefits from the Federal Government
notwithstanding the Company’s eligibility to make a claim
during certain periods of the pandemic.
1.5. Changes to remuneration during the year
Aurelia continues to grow, and with a clear strategy to acquire
and/or develop new projects the Board recognises that the
overarching remuneration framework and related governance
controls need to be reviewed on an ongoing basis. This includes
the Company’s incentive plans for ‘at-risk’ remuneration, which
are reviewed to ensure the plans remain relevant and meet the
underlying objective of creating alignment with Aurelia’s short
and long-term business objectives.
During the year, the following actions noted in the FY20
Remuneration Report were finalised:
— governance controls and procedures were embedded to
ensure termination benefits are restricted to the parameters
set forth in the Corporations Act. In the event the Company
wishes to award a termination benefit more than the cap
defined in Part 2D.2 of the Corporations Act, the Company
will seek approval from Shareholders. The Company’s
executive employment contracts articulate that the value
of termination benefits is limited to the maximum amount
permitted by the Corporations Act without Shareholder
approval;
— upon any executive termination, and where the executive
remains eligible, the actual Short-Term Incentive (STI) award
will be calculated based on actual performance outcomes on
a pro-rata basis for tenure served during the performance
period (subject to Board discretion);
— upon any executive termination all Long-Term Incentive
(LTI) awards generally lapse. However, in instances where
an executive remains eligible, the LTI awards will be tested
against the relevant performance conditions, unless
otherwise provided for under the plan rules (such as a change
of control event) (subject to Board discretion); and
— bolstered the leadership and technical capabilities across the
group in line with the Company’s strategy to have internal
resources support the business from a governance, business
effectiveness and growth perspective.
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ANNUAL REPORT 2021
REMUNERATION REPORT (AUDITED) (CONTINUED)
2. Key Management Personnel (KMP)
The KMP of the Company, and the positions held are summarised below:
Non-Executive Directors
Position
Term
Interim Non-Executive Chairman
Period from 2 March 2021
Susan Corlett
Independent Non-Executive Director
Lawrence Conway
Independent Non-Executive Director
Full year
Full year
Full year
Paul Harris
Helen Gillies
Robert Vassie
Executive Directors
Daniel Clifford
Other KMP
Peter Trout
Ian Poole
Independent Non-Executive Director
Independent Non-Executive Director
Appointed 21 January 2021
Independent Non-Executive Director
Appointed 21 January 2021
Managing Director & CEO
Full year
Chief Operating Officer
Full year
Chief Financial Officer
Company Secretary
Appointed 6 July 2020
Appointed 1 July 2020
The composition of Board is illustrated below:
Executive
Directors
17%
Independent
Non-Executive
Directors 83%
Females
33%
Males
67%
In addition to the above, the following directors served during the year:
Non-Executive Directors
Position
Term
Colin Johnstone
Michael Menzies
Independent Non-Executive Chairman
Retired 2 March 2021
Independent Non-Executive Director
Retired 1 October 2020
AURELIA METALS
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REMUNERATION REPORT (AUDITED) (CONTINUED)
3. Remuneration Governance and the role of the Remuneration and Nomination Committee
Board
— As part of its Corporate Governance framework, the Board of Directors (‘the Board’) has an established Remuneration and
Nomination Committee (referred to hereafter as the ‘Remuneration Committee’, for the purposes of the Remuneration Report).
— The Board delegates responsibilities in relation to remuneration to the Remuneration Committee, which functions in accordance
with the Committee Charter and the requirements of the Corporations Act 2001 and its regulations.
— A copy of the Charter, that was updated in FY21, is published on Aurelia’s website (https://www.aureliametals.com.au)
Remuneration Committee
— The Remuneration Committee consists solely of independent Non-Executive Directors, to assist the Board in discharging its
responsibilities in relation to the Company’s remuneration policies and practices.
— The Remuneration Committee is chaired by a Non-Executive Director, who is not the Chairman of the Board.
— Membership is detailed on page 63, under Section 2 of the Directors’ Report.
— The Remuneration Committee is responsible for reviewing and making recommendations to the Board in relation to a number of
remuneration matters, including the:
— remuneration arrangements and contract terms for the Managing Director & CEO and other executive KMP;
— terms and conditions of short-term and long-term incentives for the Managing Director & CEO and other executive KMP,
including the targets, performance measures and vesting conditions; and
— remuneration to be paid to non-executive Directors.
Board
— The Remuneration Committee considers whether to appoint a remuneration consultant and, if so, their scope of work. Such
engagements are completed in accordance with:
— the requirements of the Corporations Act for remuneration consultants and related recommendations; and
— established governance procedures including direct reporting to the Board to ensure that any remuneration recommendation
is free from undue influence.
— During FY21, the Remuneration Committee engaged independent consulting firms PwC and Juno Partners for the purposes of
providing advice and analysis with respect to remuneration. The Remuneration Committee did not engage any remuneration
consultant during FY20.
— No remuneration recommendations, as defined in section 9B of the Corporations Act 2001, were made by remuneration
consultants during FY20 or FY21.
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4. Remuneration Overview
Aurelia’s Remuneration Philosophy
— Aurelia’s remuneration philosophy is supported by a framework for organisational structure and remuneration,
to enable Aurelia to:
— attract, engage and retain high-calibre employees in order to achieve the Company’s current and future business needs; and
— cultivate a performance-based culture whereby competitive remuneration and reward are aligned to business and
shareholder objectives.
Aurelia’s Approach To Remuneration
— The Company’s approach to remuneration considers:
— detailed remuneration benchmarking, with reference to the Company’s peers (industry and market capitalisation);
— the Company’s performance over the relevant performance period;
— internal relativities and differentiation of remuneration based on performance;
— pay equity at each level to ensure no gender or diversity bias within the organisation, and any differences are determined
based on performance and skills;
— market developments affecting remuneration practices;
— the remuneration and expectations of a high performing executive the Company wants to employ;
— future outlook; and
— the link between remuneration and the successful implementation of the Company’s strategy, and achievements of objectives
and targets.
The Link To Strategic Business Outcomes
— The Company’s remuneration framework is founded upon aligning each individual’s remuneration outcomes with the Company’s
strategic business objectives. This alignment is created through linking ‘at-risk’ remuneration with Aurelia’s strategic business
objectives:
— ‘at-risk’ STIs are linked to individual and Company annual objectives and performance outcomes including the Balanced
Business Plan (Section 7.1);
— ‘at-risk’ LTIs are linked to the achievement of long term strategic objectives (Section 7.2); and
— the typical key performance measures applied have been detailed in Sections 7.1.1 and 7.2.1 of this report.
— Aurelia’s objective is to build a performance-based culture whereby competitive remuneration and rewards are aligned with
Aurelia’s objectives and Shareholders’ expectations. A significant proportion of total remuneration is ‘at-risk’.
— Through this framework, Aurelia seeks to attract, engage and retain high-calibre employees to meet the Company’s current and
future business needs.
AURELIA METALS
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REMUNERATION REPORT (AUDITED) (CONTINUED)
5. Managing Director and CEO and other executive KMP remuneration
Total Remuneration (TR) for all executive KMP consists of the following key elements:
FIXED
REMUNERATION
(FR)
Remuneration objective is to attract, engage and
retain high-calibre personnel.
Considerations include benchmarking data,
internal relativities and executive performance.
The purpose of TFR is to provide a base
level of remuneration which is market
competitive and appropriate.
SHORT-TERM
INCENTIVE
(STI)
LONG-TERM
INCENTIVE
(LTI)
The STI is an ‘at-risk’ component of Total
Remuneration (TR) with a 1-year horizon.
The performance measures consider the
individual’s performance based on the
performance measures (as outlined in the
individual’s annual achievement and development
plan) as well as group performance in the key
pillars of: ESG (including HSEC), People and
Organisation, Operations, Growth and Financial
Outcomes.
The key focus of the performance measures is to
build and deliver superior shareholder return.
The LTI is an ‘at-risk’ component of TR with a
3-year horizon.
The performance measures are designed to
support superior shareholder return.
The objective of the LTI is to:
a) provide an incentive to the executive KMP
which focusses on the long-term performance
and growth of the Company
b)
align the reward of the executive KMP with
returns to Shareholders; and
c) promote the retention of the Company’s
executive KMP.
The key performance measures are set
at the beginning of each year with a
1-year performance period.
A number of critical tasks and measures
linked to each of the Company’s key
pillars are identified (refer to section
7.1.1).
The relative weighting is determined
based on the role being performed and
level within the Company.
The performance measures are set at
the beginning of each year, with a 3-year
performance period.
The key focus of the performance
measures is to build and deliver superior
shareholder return through Total
Shareholder Return (TSR) measures
and targeted long-term growth criteria
(refer to section 7.2).
In addition to the above, eligible employees of the Company are entitled to participate in the Company’s Employee Share Plan. This
plan was implemented in April 2021. Eligible employees are invited to participate in the plan to receive fully paid ordinary shares
in the Company (subject to a 36-month holding lock) with a nominal value of $1,000, which depending on the individual’s taxable
income in the relevant year, may be tax exempt. The Managing Director & CEO was not invited to participate in this plan because his
participation in the program would require shareholder approval under the Corporations Act.
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5. Managing Director and CEO and other executive KMP remuneration (continued)
The amount and relative proportion of FR, STI and LTI is established for each executive following consideration by the Remuneration
Committee. This includes consideration of external market references, including benchmarking of remuneration for comparable roles
and the internal relativities between executive roles. The Company also regularly participates in and subscribes to the AON Hewitt
Gold & General Mining Industry Remuneration Survey.
The principles underlying the Company’s executive remuneration strategy are below:
a)
TR is to be appropriate, market competitive and structured to attract and retain talented and experienced employees;
b)
TR is to comprise an appropriate mix of fixed and performance-based at-risk variable remuneration;
c)
FR (base salary + superannuation) is targeted at the median (P50) range compared to the industry benchmark and internal
relativities. Exceptions may exist depending on the supply and demand of particular roles or skills or for individuals who are
recognised as high performers within the Company and thereby will be highly sought after by competitor companies;
d) variable remuneration is to consist of STIs and LTIs to align executive performance with the interests of Shareholders.
Performance targets under the variable incentive plans reflect the Company’s short-term and long-term strategy and objectives;
e)
in keeping with the Company policy of paying for performance, TR (FR+ variable STI+LTI) is targeted at up to the 75th percentile
of the relevant peer group (exceptions may exist depending on the supply and demand of particular roles or skills or for
individuals who are recognised as high performers within the Company). As variable remuneration is performance based it is not
guaranteed, with any award dependent on the business and individual meeting pre-determined performance targets;
f) performance-based ‘at-risk’ remuneration is to encourage, and reward high performance aligned with business objectives that
create strategic, economic and sustainable shareholder value; and
g)
an annual review of remuneration is conducted for all supervisory roles and above (including the KMP) based on an appraisal
against their individual achievement and development plan and is designed is to deliver fair and equitable results.
The maximum achievement remuneration mix for all three elements of TR are detailed below:
FY21
Daniel Clifford,
Managing Director & CEO
Peter Trout,
Chief Operating Officer
Ian Poole,
Chief Financial Officer
FY20
Daniel Clifford,
Managing Director & CEO
Peter Trout,
Chief Operating Officer
Tim Churcher,
Chief Financial Officer
TFR
$727,750
$512,500
$419,178
TFR
$710,000
$500,000
$446,760
% of TR
FR 38%
FR 49%
FR 49%
% of TR
FR 40%
FR 40%
FR 40%
FR 51%
FR 51%
FR 51%
FR 51%
FR 51%
FR 51%
STI 24%
LTI 38%
STI 19%
LTI 32%
STI 19%
LTI 32%
STI 20%
STI 20%
STI 20%
LTI 40%
LTI 40%
LTI 40%
STI 16%
STI 16%
STI 16%
LTI 33%
LTI 33%
LTI 33%
STI 16%
STI 16%
STI 16%
LTI 33%
LTI 33%
LTI 33%
AURELIA METALS
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REMUNERATION REPORT (AUDITED) (CONTINUED)
6. Service Agreement key terms
Executives are employed under executive employment agreements with the Company.
Name and
Position
Date of
Agreement
Term of
Agreement
Notice period by
Executive
Notice Period by
Aurelia
Termination
Payments
Existing Executive Directors and KMP
Daniel Clifford,
Managing Director
& CEO
Peter Trout,
Chief Operating
Officer
Ian Poole,
Chief Financial
Officer & Company
Secretary
25 Nov-19
Open
6 months
6 months
25 Nov-19
Open
6 months
6 months
12-May-20
Open
3 months
3 months
Up to a max of
6 months Fixed
Remuneration
Up to a max of 12
months base salary*
Up to a max of
3 months Fixed
Remuneration
* The Service Agreement related to the new Chief Operating Officer was negotiated in order to secure his services and is limited to those that can be lawfully paid
under the Corporations Act. The Company has subsequently limited termination payments in future executive services agreements to a maximum of six months.
7. How performance is linked to the variable ‘at-risk’ remuneration
for the Managing Director and CEO and other executive KMP
The objective of variable remuneration is to support the delivery of superior shareholder returns through the alignment of KMP
remuneration outcomes to the short-term and long-term strategy and objectives of the Company. This alignment is achieved through
the Company’s variable ‘at-risk’ incentives, which comprise the Short-term Incentive Plan (STIP) and the Long-Term Incentive
Plan (LTIP).
An underlying objective of each of the plans is to provide meaningful and tangible incentives to drive actions, behaviours, and
outcomes to deliver Company strategy, objectives and targets. The plans are founded upon a performance-based at-risk principle,
which is aimed towards attracting and retaining employees that actively contribute to the success of the Company.
The Board measures and considers the achievement of targets together with overall business performance and Balanced
Business Plan (BBP) outcomes, and individual performance (as relevant), when deciding on the actual payment or allocation of
variable remuneration.
The Board retains absolute discretion in relation to participation and award under the STIP and LTIP.
7.1 Short Term Incentive Plan (STIP)
The award of an STI payment is assessed at the end of the financial year and, if applicable, is paid only after the Remuneration
Committee has reviewed and made recommendations to the Board for approval. This includes the assessment of achievement against
applicable performance targets, businesses performance and individual performance.
An outline of the key elements of the FY21 Company’s STI plan are as follows:
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7.1 Short Term Incentive Plan (STIP) (continued)
Purpose
Participation
STI Opportunity
Focus participants on delivery of business objectives over a 12-month period.
All employees including executive KMP.
The STI opportunity for the MD is targeted at 50% of the TFR with an award for outperformance against target of
125%, which would result in a potential maximum of award 67.5% of TFR which is the equivalent of 24% of TR.
The STI opportunity for the other KMP is targeted at 30% of the TFR with an award for outperformance against
target of 125% which would result in a potential maximum award of 37.5% of TFR which is the equivalent of 19% of
TR.
Performance Period
Performance is measured per financial year (1 July to 30 June).
The performance criteria and weighting of individual components are established at the commencement of the
new financial year and are determined at the discretion of the Board.
FY21
Criteria
Individual Performance
Performance criteria
Sustainability, Safety and Environment
Balance Business Plan
Cost & Production Performance
Growth
Total
Weighting
20.0%
20.0%
7.5%
27.5%
25.0%
100.0%
Exercise of discretion
The Board has discretion, considering recommendations from the Remuneration Committee, to adjust overall STI
awards or an individual’s final STI award.
STI payments are paid in cash and are subject to a service condition.
Payment
This condition is met if the KMP’s employment is continuous during performance period and was employed at the
STI payment date.
The KMP’s entitlement will be calculated on a pro-rata basis if they joined during the performance period, with a
minimum tenure of 4 months prior to the end of the performance period (otherwise there will be no entitlement).
Rights on termination
KMP whose employment is terminated before the date of payment (for whatever reason) are not eligible for any
STI payment but may be entitled to a pro-rata award under the good leaver provisions.
Malus Policy
The Board may, at its discretion, cancel or withhold payment of any award made under the STI for the period if it
determines that had the STI payment been made the KMP would have received an “inappropriate benefit”.
7.1.1 FY21 STIP Outcomes
At the beginning of FY21, the Board determined that the following measures would be applicable to the FY21 STIP for the Managing
Director & CEO. It should be noted that similar measures and percentages apply to the Managing Director & CEO’s direct reports
with slight variations based on the individual’s role and the degree they can control and influence outcomes. The same principles are
also cascaded down throughout the Company. This is applied to ensure that all employees are aligned to the Company’s strategy,
objectives and performance targets.
The STIP performance measurements may include (where appropriate) the application of threshold, target and stretch elements. This
complements the Company’s philosophy of performance-based remuneration, where a sliding scale for achievement may be awarded
based on the actual outcome. These elements are defined below:
Threshold
Nil award for outcome below 75% of Target
Pro-rata between Target and Threshold
Target
100%
Stretch
Award for outperformance against Target
Pro-rata up to maximum of 125%
‘Target’ is based on challenging, but achievable targets for both the Company and the individual components. The Stretch target
reflects outstanding individual and business performance. The Threshold target represents the minimal level of acceptable
performance, recognising that Target is set at a challenging level. At threshold, a partial award is made given the Company and/or the
individual has still performed well, and the Company has successfully progressed towards the next phase of business performance
and growth.
AURELIA METALS
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REMUNERATION REPORT (AUDITED) (CONTINUED)
7.1.1 FY21 STIP Outcomes (continued)
These elements were introduced in FY21, and the application within the FY21 STIP as applicable to the Managing Director & CEO is
detailed below.
Measure
Target
1. Sustainability
These measures relate to:
— Safety and environment outcomes - 20%
— Group Balanced Business Plan - 7.5%
Safety and environment outcomes measurements:
Weighting /
Award
27.5%
Performance
Measure
Threshold
(75% on
achievement)
Target
(100% on
achievement)
Stretch
(125% on
achievement)
Weighting - % of
Total STI
Outcome
Award
TRIFR*
Critical Controls
Lead
Indicators**
15% reduction from 30
June 2020 to 30 June
2021 = 18.598
Critical Control
Verification for 2 Fatal
Hazards
70% Compliance
to Lead Indicator
Program
30% reduction from 30
June 2020 to 30 June
2021 = 15.316
Critical Control
Verification for 4 Fatal
Hazards
85% Compliance
to Lead Indicator
Program
45% reduction from 30
June 2020 to 30 June
2021 = 12.034
Critical Control
Verification for 6 Fatal
Hazards
100% Compliance
to Lead Indicator
Program
10.0%
9.07
12.5%
5.0%
4
5.0%
5.0%
83%
4.8%
* Total Recordable Injury Frequency Rate (TRIFR) measured on 1 million work hours
**Performance against Group lead indicators in accordance with the Lead Indicator Matrix. Lead
indicators is about visible leadership through all leaders undertaking proactive verification of safety
and environmental compliance to standards i.e. hazard identification and risk assessments have been
completed and controls are in place.
Group Balanced Business Plan (BBP) measurement:
The BBP is a plan that aims to address the key issues and opportunities for Aurelia and its business
units. The BBP is generated in way that builds a common employee understanding and commitment. It
encompasses the five pillars: ESG (including HSEC), People and Organisation, Operations, Growth and
Financial Outcomes.
Each year, the BBP focusses the leadership team on the business’ objectives (goals), with projects
that underpin continuous improvement and to support the goals being achieved, and to realise step
change in business performance as we work towards realising our long-term strategy.
Performance Measure
Achievement to Group’s BBP Outcomes
Threshold (75% on achievement)
Target (100% on achievement)
Assessed against the BBP Scorecard
Stretch (125% on achievement)
Weighting - % of Total STI
Award
7.5%
6.8%
* Performance against Group lead indicators in accordance with the Lead Indicator Matrix
FY21 outcomes in comparison to the BBP provide for an overall result marginally below target. The
status of BPP projects and progress at year end were considered as part of award consideration.
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ANNUAL REPORT 2021
Award:
29.1%
REMUNERATION REPORT (AUDITED) (CONTINUED)
7.1.1 FY21 STIP Outcomes (continued)
Measure
Target
2. Production and Cost
Performance
Production and cost measures to be at or better than target.
Weighting /
Award
27.5%
Performance Measure
Threshold
(75% on achievement)
Target
(100% on achievement)
Stretch
(125% on achievement)
Weighting - % of Total STI
Outcome
Award
Gold Produced
(oz) *
Throughput
(Mt)*
AISC A$/oz*
80,000
90,700
101,400
10.0%
88,449
9.5%
1.07
1.13
1.19
7.5%
1.07
5.6%
1,750
1,551
1,352
10.0%
1,153
12.5%
* Excluding Dargues Mine acquired during the performance period
3. Growth
The targets and measures for the Growth category are summarised below. The Board will
determine (at its discretion) whether performance across those areas has been to Threshold,
Target or Stretch level.
Award:
27.6%
25.0%
Threshold
75%
Target
100%
Stretch
125%
Performance Measure
Federation scoping study and early works
approved FY21
FY21 budgeted exploration program executed in
accordance with Board approved priorities
300 koz Au of mineral resources added through
organic and inorganic growth
Weighting -
% of Total STI
7.5%
7.5%
Award
%
6.0%
9.0%
10.0%
12.5%
The award considerations includes the status, progress and achievement of milestones each of the
growth performance measures.
Award:
27.5%
AURELIA METALS
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REMUNERATION REPORT (AUDITED) (CONTINUED)
7.1.1 FY21 STIP Outcomes (continued)
Measure
Target
4. Individual Performance
The targets and measures for the Individual Performance category are outlined in each executive
KMP Achievement and Development Plan.
In addition to ‘at target’ there will be a Threshold and Stretch element to the awarding of any STI, this
is reflected in the table below and shall be determined at the Board’s discretion.
Threshold
75%
Target
100%
Stretch
125%
Performance Measure
Establish a values-based organisational culture with sustainability at its
core
Lead and oversee the development and execution of Aurelia’s organic and
inorganic growth strategy
Lead and oversee transformation in capability, capacity, systems and
processes required to deliver the corporate objectives set by the Board
Establish the BBP and oversee group wide performance against its
measurable objectives
Weighting -
% of Total STI
5%
5%
5%
5%
Performance assessment completed with consideration to the above performance measures and the
accomplishments during the period.
Weighting /
Award
20.0%
Award:
20%
Upon the completion of the assessment related to the above quantitative and qualitative hurdles, the Board has determined and
approved the award of a FY21 STIP to the Company’s KMP, as outlined below:
FY21
Executive Director
Daniel Clifford
Other Executive KMP
Peter Trout
Ian Poole
Total STIP awarded $
awarded % of Maximum STIP forfeited
% of Maximum (stretch) STIP
379,021
162,514
129,400
83%
85%
82%
17%
15%
18%
The above FY21 STIP awards are payable in FY22.
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7.1.2
FY20 STIP Outcomes
The following measures were applicable to the FY20 STIP:
Measure
Target
Safety
Unit Costs
Metal or Gold Equivalent Production
Group Total Recordable Injury Frequency Rate (TRIFR) to be at least 15% better than the
TRIFR at 30 June 2019 of 11.46.
Award: Group TRIFR at 30 June 2020 was 21.88 = Nil award.
Develop a program to reduce High Potential Incidents (HPIs)
Award considerations: Implementation of Aurelia Metals Safe Metals, Rollout of Rules
to Live By, Introduced the Senior Management Taskforce for Significant Incidents,
established a Lead Indicator Program and other safety initiatives to be prioritised in 2021.
All In Sustaining Costs (AISC) to be at or better than budget.
Award: AISC were above budget = Nil award.
Production to be at or better than budget.
Award: Actual FY20 gold equivalent production was less than budget = Nil award.
Growth in Ore Reserve life at Hera and Peak and achievement of a successful exploration
program.
Award considerations: Growth in reserve life was achieved, with the Group Ore Reserve
total growing by 3% to 4.53Mt after depletion of 0.97Mt. The total addition of Reserves in
FY20 was 1.09Mt, and the net growth in reserves was 0.12Mt.
A successful exploration program is supported by:
Weighting /
Award
7.5%
0%
7.5%
7.5%
15%
0%
15%
0%
15%
Enhance Reserves
— high-grade intercepts from multiple areas announced in seven ASX releases
— new high-grade discoveries at Federation, Kairos and Peak North announced
15%
Peak Pb/Zn upgrade
— delineation of material high-grade resources at Kairos
— conversion of significant tonnages of high value resources in Kairos and Chronos to
reserves
— maiden resource estimate for Federation announced
— a pipeline of new near-mine and regional targets established.
The upgrade to the Peak process plant for the lead/zinc circuit completed on time and on
budget.
Award considerations: The upgrade was completed on time and in line with guidance.
Discretionary component to be awarded by the Board.
Award considerations: Performance assessment completed with consideration to key
business objectives and accomplishments during the period. This included:
Individual Performance
— relocation of the corporate office to Brisbane QLD
— securing the future of the Company through exploration success
— the building of a new leadership team and improved internal capabilities to ensure
appropriate resourcing to support operational improvement and growth
— improved governance, standards and systems with focus on all key pillars of the
organisation.
10%
10%
30%
30%
Upon the completion of the assessment related to the above quantitative and qualitative hurdles, the Board determined and
approved the award of a FY20 STIP to the Company’s KMP, as outlined below:
FY20
Executive Director
Daniel Clifford
Other Executive KMP
Peter Trout
Tim Churcher
Total STIP awarded $
awarded % of Maximum STIP forfeited
% of Maximum (stretch) STIP
147,917
62,500
0
62.5%
62.5%
0.0%
37.5%
37.5%
100.0%
The above STIP values awarded for FY20 were paid in FY21.
AURELIA METALS
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REMUNERATION REPORT (AUDITED) (CONTINUED)
7.2 Long Term Incentive Plan (“LTIP”)
An outline of the key elements of the Company’s LTIP as it relates to executive KMP is provided below:
LTIP Opportunity
The LTIP opportunity is determined by the executive’s role and level (reward grade) within the business. The LTIP
opportunity is awarded by:
Service Conditions for
Performance Rights
Performance Criteria
— a number of Performance Rights based on a percentage of TFR;
— number of Performance Rights granted is calculated on a multiple of the individual’s TFR divided by the 30-day
VWAP in the Company’s share price at a date determined by the Remuneration Committee; and
— the LTIP opportunity for each individual KMP is outlined on page 93.
Performance Rights are subject to a service condition. This condition is met if the KMP’s employment is continuous
during the performance period. The performance period is generally three years. The service condition is aimed
at the retention of key personnel and to promote the long-term performance objectives of the Group, including
shareholder returns.
The performance criteria are established prior to the commencement of the new financial year and are determined
by at the discretion of the Board.
FY21
FY20
Weighting Criteria
Weighting
Criteria
Absolute TSR
Relative TSR
25% Absolute TSR
25% Relative TSR
Production Targets
25% Ore Reserves
Growth
25% Growth
25%
25%
25%
25%
The test date for each criterion is typically three years from the commencement of the performance period. To the
extent the performance criteria are satisfied (subject to the Service Conditions), the Performance Rights are taken
to have vested and been exercised at nil exercise price and the number of ordinary shares equal to the number of
vested Performance Rights is issued. Further detail on the above criteria is included in Section 7.2.1
Disposal Restrictions
No holding lock applies to Rights that vest under the FY21 LTI plan, as Rights vest only at the end of the
Performance Period, provided the Performance Measures have been achieved.
Dividends
Malus Policy
No dividends are received by executives on unvested Performance Rights.
The Board may, at its discretion, cancel or require the KMP to forfeit any unvested LTI any award made under the
LTIP it determines that had the LTI vesting been made the KMP would have received an “inappropriate benefit”.
7.2.1
LTIP Performance Rights Issued FY21
During FY21, a total of 3,108,620 Performance Rights (Class FY21) were granted to the Managing Director & CEO and other executive
KMP under the Company’s LTIP. The Performance Rights will be tested at the end of the three-year performance period, which ends on
30 June 2023. The performance hurdles related to Class FY21 are detailed below, including relevant threshold and target measures:
LTIP Scorecard
Vesting % guide
Absolute TSR*
Relative TSR*
Threshold
Nil
<10%
Pro-Rata
50%
10% - 20%
Target
100%
≥20%
Total Shareholder Return (TSR) is the change in the share price over the Performance Period plus any dividends
paid during the performance period.
<50 percentile
0 - 100 percentile
100 percentile
Relative TSR measures the change in the share price and dividends paid over the performance period in
comparison to a comparator group of companies. The comparator group of companies comprise ASX Listed
organisations with operations in either gold or base metals as disclosed under section 7.2.2.
Production Targets – average of
each project mine life based on
Production Target
<4 years
4 years - 5 years
≥5 years
Measurement against the requirement that all necessary access and approvals are in place to enable the
immediate commencement of full-scale mining of the deposits included in the Production Target at 30 June
2023. The Company’s Production Target is generally published annually.
Growth
Measurement will be subject to Board discretion. Growth will be considered with regards to exploration success,
growth in high value inventory or a value adding acquisition.
* The measurement of the performance will be 30-day VWAP of shares up to and including 30 June 2023.
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REMUNERATION REPORT (AUDITED) (CONTINUED)
7.2.2
Relative TSR comparator group
For the purposes of the Relative TSR element of the LTIP, the Board has chosen the following comparator group, being business of
similar size in the gold and base metals sector: Alkane Resources Limited (ASX: ALK), AngloGold Ashanti Limited (ASX: AGG), Bellevue
Gold Limited (ASX: BGL), Capricorn Metals Limited (ASX: CMM), Chalice Gold Mines Limited (ASX: CHN), Gold Road Resources Limited
(ASX: GOR), OceanaGold Corporation Limited (ASX: OGC), Pantoro Limited (ASX: PNR), Ramelius Resources Limited (ASX: RMS), Red 5
Limited (ASX: RED), Sandfire Resources Limited (ASX: SFR), Silver Lake Resources Limited (ASX: SLR), St Barbara Limited (ASX: SBM),
Western Areas Limited (ASX: WSA) and Westgold Resources Limited (ASX: WGX).
7.2.3
LTIP Outcomes during FY21
There were no LTIP grants related to the KMP that vested or had a performance period ending 30 June 2021. A total of 307,969
Performance Rights related to Class 18B had a performance period ending 30 June 2021. None of these Performance Rights were
granted to current KMP. The vesting outcome was determined after year end and will be recorded in the next reporting period.
7.2.4
Performance Rights for compensation for incentives foregone
Being applicable to the incumbent Managing Director & CEO only, in recognition of previous equity incentives foregone, a total of
1,565,201 Performance Rights vested on 25 November 2020, which was the 12-month anniversary of the start of employment with
the Company. The Performance Rights vested on the condition that the Managing Director & CEO remained an employee of a Group
entity as at the Testing Date. The shares issued upon the vesting of the Performance Rights are subject to a 12-month holding lock.
Further to the above, a total of 1,565,201 Performance Rights will vest on 25 November 2021, which is the 24-month anniversary of
the start of employment with the Company, subject to the Managing Director & CEO remaining an employee of a Group entity as at
the Testing Date.
The issue of the above noted Performance Rights were approved by Shareholders at the Annual General Meeting held
on 29 November 2019.
7.2.5
LTIP Performance Rights which remain untested
The total number of Performance Rights granted to the Managing Director & CEO and other executive KMP that are yet to vest (as at
30 June 2021) are detailed below:
Performance Rights Tranches
Class 19A
Class 19C
Class FY21
Total KMP Performance Rights
Total
1,970,678
1,565,201
3,108,620
6,644,499
Relevant Date or Testing Date
30-Jun-22
30-Nov-21
30-Jun-23
AURELIA METALS
101
REMUNERATION REPORT (AUDITED) (CONTINUED)
7.2.6
Summary of movements in Performance Rights during the year
A summary of movements of Performance Rights within the various plans are tabulated below:
Grant
Class 16C*
Class 18A*
Class 18B
Class 19A
Class 19B
Class 19C
Class FY21
Class FY21
Total
Grant
Date
Expiry or
Test Date
Exercise
Price
28-11-16
30-06-20
04-12-18
30-06-20
04-12-18
30-06-21
29-11-19
30-06-22
29-11-19
29-11-19
30-11-20
30-11-21
19-11-20
30-06-23
26-12-20
30-06-23
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Balance
at start
of year
750,000
770,893
613,421
2,812,696
1,565,201
1,565,201
Granted
during
the year
Vested
during the
year
Expired
during the
year
Balance
at
year end
-
-
-
-
-
-
-
-
-
-
(750,000)
(770,893)
-
-
(305,452)
307,969
(341,976)
2,470,720
(1,565,201)
-
-
-
-
-
-
-
1,565,201
1,696,714
(125,605)
4,482,758
-
-
1,696,714
4,608,363
8,077,412
6,305,077
(1,565,201)
(2,293,926)
10,523,362
Total KMP Performance Rights
6,359,473
3,108,620
(1,565,201)
(1,258,393)
6,644,499
Total Non-KMP Performance Rights
1,717,939
3,196,457
-
(1,035,533)
3,878,863
Total
8,077,412
6,305,077
(1,565,201)
(2,293,926)
10,523,362
* the vesting outcomes of Class 18B were determined after year end. Therefore, the movement related to a total of 307,969 Performance Rights will be recorded in
the next reporting period.
7.3 Details of Share Based Compensation to the Managing Director and CEO and other executive KMP
Details on Rights over ordinary shares in the Company that were granted as compensation to members of the Key Management
Personnel and details on Rights that vested during the reporting period are as follows:
Class*
Test
Date
Number
of Rights
Granted
Grant
date
Fair Value
at Grant
$/Right
Fair Value
at Vesting
$/Right
Number
of Rights
Vested
Number
of Rights
Lapsed
Balance
at
year end
Managing Director & CEO
Daniel Clifford
Class 19A
Class 19B
Class 19C
30-06-22
1,351,866
30-11-20
1,565,201
30-11-21
1,565,201
29-11-19
29-11-19
29-11-19
Class FY21
30-06-23
1,696,714
19-11-20
0.310
0.400
0.400
0.303
Other KMP
Peter Trout
Class 19A
Class FY21
Ian Poole
Class FY21
30-06-22
30-06-23
30-06-23
6,178,982
618,812
776,665
1,395,477
635,241
635,241
29-11-19
26-12-20
0.290
0.285
26-12-20
0.285
n/a
n/a
-
0.425
(1,565,201)
n/a
n/a
n/a
n/a
-
-
(1,565,201)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,351,866
-
1,565,201
1,696,714
4,613,781
618,812
776,665
1,395,477
635,241
635,241
* All classes of Performance Rights that vest into fully paid ordinary shares, vest at a nil exercise price.
102
ANNUAL REPORT 2021
REMUNERATION REPORT (AUDITED) (CONTINUED)
8. Malus Policy
The underlying principle of the policy, implemented during
FY21, is that an Executive of the Company should not receive
performance-based ‘at-risk’ remuneration (including any
STI reward prior to payment, unvested LTI award and any
other performance-based component of remuneration prior
to payment or vesting) if the Board determines that such
remuneration would be an “inappropriate benefit”.
The Board may, in its absolute discretion, exercised in good
faith, elect to apply the policy so that an Executive does not
receive an “inappropriate benefit” where:
a) the Executive has been terminated for cause (including for
During the year, the Non-Executive Director fee structure was
also externally benchmarked and reviewed against peers. To
ensure that the Company can attract and retain the highest
quality candidates for Board positions, the fee structure
was increased effective 1 April 2021. This has coincided with
attracting two new and experienced Board members (whilst
the recruitment for a new Chairman is nearing completion) and
recognises the increase in the number of Committees and the
increased complexity and spread of Director responsibility.
The fee structure now provides for fees related to Board
committee responsibilities.
fraud, dishonesty or gross misconduct);
Structure
b) the Executive intentionally or recklessly caused or
contributed to a material misstatement or omission in any
release made by the Company to the Australian Securities
Exchange (ASX); or
The aggregate fee pool available for Non-Executive Directors
remuneration is $1,000,000 per annum. The Board fees and
the fess related to Board committee responsibilities, are
summarised below:
Effective
1 April 2021
Fee per
annum $*
To 31 March
2021
Fee per
annum $*
200,000
100,000
15,000
10,000
160,000
100,000
Nil
Nil
Role
Chair of the Board of Directors
Non-Executive Director
Chair of a Board Committee
Member of a Board Committee
*Inclusive of superannuation
c) the Executive is engaging in, or has engaged in, behaviour or
conduct that may negatively impact on the Group’s standing,
long-term financial strength, reputation, or relationship with
its key regulators, or otherwise brings the Company or any
member of the Group into disrepute.
In such instances, the Board reserves the right to adjust or
cancel some or all the Executive’s performance-based
‘at-risk’ remuneration.
9. Non-Executive Directors’ remuneration
The Company’s remuneration strategy and objective for Non-
Executive Directors is to remunerate at a level which attracts
and retains Non-Executive Directors of the requisite expertise
and experience at a market rate which is comparable to other
similar size companies and considers the time, commitment and
responsibilities involved in being a Director of Aurelia.
The Remuneration Committee is responsible for reviewing
and advising the Board on Director remuneration. Guidance is
obtained as required from independent industry surveys and
other sources to ensure that Directors’ fees are appropriate
and in line with the market.
Following shareholder approval on 19 November 2020, the
aggregate fee pool available for Non-Executive Director
remuneration was increased from $750,000 to $1,000,000
per annum.
Aurelia has three operating assets and has had significant
exploration success with two highly prospective projects in the
pipeline – Federation and Great Cobar. The aggregate amount
approved by Shareholders will provide the flexibility for the
expansion of the Board and their skillset.
AURELIA METALS
103
REMUNERATION REPORT (AUDITED) (CONTINUED)
10. Remuneration of Key Management Personnel
The following table details the remuneration received by Directors and KMP of the Company during FY21.
Short Term
Post-
Employment
Share-based
payment
Base Salary
/ Directors
Fees
Allowances
Non-
monetary
Benefits
Termination
and accrued
leave paid
STIP
Payment
Super-
annuation
FY21
$
$
$
$
$ *
$
Amortised
Value
$
Total
‘at- risk’
$
%
Non-Executive Directors
Susan
Corlett1
Lawrence
Conway
124,282
103,750
Paul Harris
106,427
Robert
Vassie2
Helen
Gillies3
Colin
Johnstone4
Michael
Menzies5
Sub-total
45,155
45,155
106,667
25,000
556,436
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Managing Director & CEO
Daniel
Clifford
701,980
39,794
7,200
Other executive KMP
Peter Trout
Ian Poole6
486,958
397,384
-
7,200
7,200
Sub-total
1,586,322
39,794
21,600
Total
2,142,758
39,794
21,600
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,807
-
-
4,145
4,145
-
-
20,097
-
-
-
-
-
-
-
-
136,089
103,750
106,427
49,300
49,300
106,667
25,000
576,533
0%
0%
0%
0%
0%
0%
0%
0%
379,021
25,000
830,285
1,983,280
61%
162,514
129,400
670,935
25,000
24,729
74,729
118,294
799,966
41,845
600,558
990,424
3,383,804
670,935
103,827
990,424
3,960,337
35%
29%
49%
42%
1 Ms Susan Corlett was appointed as Interim Chairman on 2 March 2021.
2 Mr Robert Vassie was appointed as Independent Non-Executive Director on 21 January 2021.
3 Ms Hellen Gillies was appointed as Independent Non-Executive Director on 21 January 2021.
4 Mr Colin Johnstone retired on 2 March 2021.
5 Mr Michael Menzies retired on 1 October 2020.
6 Mr Ian Poole was appointed as Company Secretary on 1 July 2020 and Chief Financial Officer on 6 July 2020.
*Payments related to the 2021 STI Plan will be paid in FY22.
104
ANNUAL REPORT 2021
REMUNERATION REPORT (AUDITED) (CONTINUED)
10. Remuneration of Key Management Personnel (continued)
The following table details the remuneration received by Directors and KMP of the Company during FY20.
Short Term
Post-
Employment
Share-based
payment
Base Salary
/ Directors
Fees
Fees
for
executive
services
Non-
monetary
Benefits
Termination
and accrued
leave paid
STIP
Payment
Super-
annuation
FY20
$
$
$
$
$ *
Amortised
Value
$
Total
‘at- risk’
$
%
-
-
-
-
-
-
-
444,000
157,000
100,000
211,150
155,688
50,000
1,117,838
0%
0%
0%
0%
0%
0%
0%
$
-
-
4,338
8,676
-
4,338
17,352
-
-
-
-
-
-
-
Non-Executive Directors
Colin
Johnstone1
Michael
Menzies2
Lawrence
Conway
Susan
Corlett3
160,000
284,000
100,000
57,000
95,662
-
91,324
111,150
Paul Harris4
100,000
55,688
Paul Espie4
45,662
-
Sub-total
592,648
507,838
Managing Director & CEO
Daniel
Clifford6
412,363
Other executive KMP
Peter Trout7
284,327
Tim
Churcher8
410,198
Sub-total
1,106,888
-
-
-
-
Total
2,142,758
507,838
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
147,917
14,583
661,072
1,235,935
65%
62,500
14,583
40,416
401,826
9,301
9,301
9,301
531,980
-
25,000
116,915
1,093,394
531,980
210,417
531,980
210,417
54,166
71,518
818,403
2,731,155
818,403
3,848,993
26%
11%
38%
27%
1 Mr Colin Johnstone fulfilled duties as Interim Executive Chairman & CEO from 2 May 2019 to 24 November 2019.
2 Mr Michael Menzies fulfilled duties as Interim Executive Director & COO in period 2 May 2019 to 23 October 2019.
3 Ms Susan Corlett provided services in an executive capacity in the areas of geology, greenfield and brownfield exploration, resources, reserves and mine planning
during the leadership transition period from April to November 2019.
4 Mr Paul Harris provided services in an executive capacity in investor relations during the leadership transition period from April to November 2019. Mr Harris was
the Lead Independent Director from 2 May 2019 to 24 November 2019.
5 Mr Paul Espie resigned on 29 November 2019.
6 Mr Daniel Clifford appointed as Managing Director and CEO on 25 November 2019.
7 Mr Peter Trout was appointed as Chief Operating Officer on 25 November 2019.
8 Mr Tim Churcher’s termination date was 1 July 2020. The termination payment of $395,928 represents the average 12 months base salary for the 3 years prior.
The accrued leave paid totalled $136,052. The amounts were provided for in FY21 and were paid in July 2020.
*Payments related to the 2020 STI Plan were paid in FY21.
AURELIA METALS
105
REMUNERATION REPORT (AUDITED) (CONTINUED)
11. Shareholdings of Directors and other KMP
The shareholdings of Directors and other KMP for FY21 is presented below and includes shares held directly, indirectly, and
beneficially by the Directors and other KMP.
Balance
start of year
Performance
Rights vested
Other changes
during year
Balance
end of year
33,731
-
171,429
-
-
-
1,250,000
833,929
-
562,500
-
-
1,565,201
-
-
-
-
-
-
-
-
-
-
-
54,421
-
*250,000
*250,000
(1,250,000)
(833,929)
2,362
(562,500)
2,362
33,731
1,565,201
225,850
-
250,000
250,000
-
-
2,362
-
2,362
2,851,589
1,565,201
(2,087,284)
2,329,506
FY21
Directors
Susan Corlett
Daniel Clifford
Lawrence Conway
Paul Harris
Robert Vassie1
Helen Gillies2
Colin Johnstone3
Michael Menzies4
Executives
Peter Trout
Tim Churcher
Ian Poole
Total
1
2
3
4
Appointed 21 January 2021
Appointed 21 January 2021
Retired 2 March 2021
Retired 1 October 2020
*Shares acquired on market
Mr Conway and Mr Johnstone acquired shares during the period through the Retail Entitlement Offer dated 20 November 2020.
Shares acquired by Ms Gillies and Mr Vassie were acquired on market. The Company does not currently have a plan in place that would
pay all or part of Non-Executive Directors fees in shares.
The other changes in the shares of Mr Johnstone and Mr Menzies is to remove their shareholding from the shareholding of directors
and other KMP following their retirement.
All equity transactions with KMP, other than those arising from the exercise of remuneration related Performance Rights, or the
Employee Tax Exempt Share Plan have been entered into under terms and agreements no more favourable than those the Company
would have adopted if dealing at arm’s length.
The Company does not have a policy or a requirement for Non-Executive Directors to hold shares in the Company.
106
ANNUAL REPORT 2021
REMUNERATION REPORT (AUDITED) (CONTINUED)
11. Shareholdings of Directors and other KMP (continued)
The shareholdings of Directors and other KMP for FY20 is presented below and includes shares held directly, indirectly, and
beneficially by the Directors and other KMP:
FY21
Directors
Colin Johnstone
Daniel Clifford1
Lawrence Conway
Susan Corlett
Paul Espie2
Paul Harris
Michael Menzies
James Simpson3
Executives
Peter Trout 4
Tim Churcher
Total
1
2
3
4
Appointed 25 November 2019
Resigned 29 November 2019
Resigned 22 May 2019
Appointed 25 November 2019
Balance
start of year
Performance
Rights vested
Other changes
during year
Balance
end of year
1,000,001
-
171,429
33,731
150,000
-
633,929
-
-
-
1,989,090
-
-
-
-
-
-
-
5,541,964
-
562,500
6,104,464
249,999
1,250,000
-
-
-
(150,000)
-
200,000
(5,541,964)
-
-
(5,241,965)
-
171,429
33,731
-
-
833,929
-
-
562,500
2,851,589
AURELIA METALS
107
AUDITOR’S INDEPENDENCE DECLARATION
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s Independence Declaration to the Directors of Aurelia Metals
Limited
As lead auditor for the audit of the financial report of Aurelia Metals Limited for the financial year
ended 30 June 2021, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Aurelia Metals Limited and the entities it controlled during the financial
year.
Auditor’s Independence Declaration to the Directors of Aurelia Metals
Limited
As lead auditor for the audit of the financial report of Aurelia Metals Limited for the financial year
Ernst & Young
ended 30 June 2021, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
Kellie McKenzie
Partner
This declaration is in respect of Aurelia Metals Limited and the entities it controlled during the financial
24 August 2021
year.
Ernst & Young
Kellie McKenzie
Partner
24 August 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
108
ANNUAL REPORT 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2021
Note
Sales Revenue
Cost of sales
Gross Profit
Acquisition and integration costs
Corporate administration expenses
Exploration and evaluation expenditure written off
Share based expense
Commodity derivatives loss
Other expenses
Other income
Profit before income tax and net finance costs
Finance income
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense
Other Comprehensive Income
Items that may be reclassified subsequently to profit or loss:
Cash flow hedges, net of tax
Total comprehensive income for the year
Earnings per share for Profit attributable to the ordinary equity holders of the
parent
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
The above Statement should be read in conjunction with the accompanying notes.
3
4
29
4
12
22
4
4
3
3
4
5
21
21
2021
$000
2020
$000
416,477
331,819
(308,753)
(259,845)
107,724
71,974
(20,002)
(13,804)
(1,002)
(936)
-
(671)
5,833
77,142
314
(5,842)
71,614
(28,697)
42,917
-
(9,240)
(2,600)
(1,351)
(14,360)
(4,259)
6,618
46,782
795
(2,370)
45,207
(15,765)
29,442
2,492
45,409
-
29,442
3.97
3.93
3.37
3.34
AURELIA METALS
109
STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax asset
Prepayments
Derivative financial instruments
Total current assets
Non-current assets
Property, plant and equipment
Mine properties
Exploration and evaluation assets
Right of use assets
Restricted cash
Financial assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current Liabilities
Trade and other payables
Interest bearing loans and borrowings
Provisions
Other financial liabilities
Current tax liabilities
Lease liabilities
Derivative financial instruments
Total current liabilities
Non-current liabilities
Provisions
Other financial liabilities
Interest bearing loans and borrowings
Deferred tax liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Share based payments reserve
Hedge reserve
Retained earnings
Total equity
The above Statement should be read in conjunction with the accompanying notes.
110
ANNUAL REPORT 2021
Note
2021
$000
2020
$000
6
7
8
23
10
11
12
15
6
9
5
13
16
14
17
15
23
14
17
16
5
15
18
19
19
20
74,532
17,478
29,432
9,442
2,792
2,672
79,103
6,768
24,763
-
1,498
-
136,348
112,132
170,458
287,035
39,318
12,674
8,604
2,025
-
520,114
656,462
47,300
15,097
9,782
6,253
-
6,354
79
84,865
74,084
37,162
19,319
13,129
6,613
150,307
235,172
421,290
334,659
11,342
2,492
72,797
421,290
104,538
92,337
15,610
13,209
-
4,787
1,163
231,644
343,776
28,682
-
10,573
-
3,568
6,318
-
49,141
52,514
-
-
-
7,217
59,731
108,872
234,904
185,878
10,406
-
38,620
234,904
Share based
payments
reserve
$’000
Retained
earnings/
accumulated
losses
$’000
Hedge
reserve
$’000
STATEMENT OF CHANGES IN EQUITY
For the year ended
30 June 2021
Balance at 1 July 2019
Total profit for the period
Note
Issued share
capital
$’000
185,878
Transactions with owners in their capacity as owners
Share-based payments
Dividend payments
22
18
-
-
-
9,055
-
1,351
-
Balance at 30 June 2020
185,878
10,406
Balance at 1 July 2020
185,878
10,406
Total profit for the period
Other comprehensive income
19
Total Comprehensive Income
-
-
-
Transactions with owners in their capacity as owners
Shares issued, net of costs
148,781
Share-based payments
Dividend payments
22
18
-
-
-
-
-
-
936
-
-
-
-
-
-
-
-
2,492
2,492
-
-
-
Balance at 30 June 2021
334,659
11,342
2,492
The above Statement should be read in conjunction with the accompanying notes.
Total
$’000
221,579
29,442
1,351
(17,468)
234,904
26,646
29,442
-
(17,468)
38,620
38,620
234,904
42,917
-
42,917
-
-
(8,740)
72,797
42,917
2,492
45,409
148,781
936
(8,740)
421,290
AURELIA METALS
111
CASH FLOW STATEMENT
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments for hedge settlements and foreign exchange
Interest received
Interest and finance charges paid
Income tax paid
Note
2021
$000
409,562
(237,685)
(4,580)
314
(6,514)
(24,454)
2020
$000
332,726
(217,032)
-
794
(2,027)
(3,930)
Net cash flows from operating activities
24
136,643
110,531
Cash flows from investing activities
Payment for business acquisition
Payments of stamp duty and other acquisition costs
Payments for the purchase of property, plant and equipment
Payments for mine capital expenditure
Payments for exploration and evaluation
Payments for facility cash cover and security deposits
Payments for deferred acquisition and royalty costs
Payments on settlement of gold forwards
Payment for equity investment
Payments on foreign exchange
Proceeds from the sale of property, plant and equipment
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from the issue of shares, net of costs
Proceeds from borrowings
Dividend payment to Shareholders
Principal element of lease payments
Repayment of loan and borrowings
(165,252)
(20,001)
(14,903)
(51,543)
(20,631)
(8,605)
(4,452)
-
-
-
-
-
-
(40,146)
(33,321)
(12,157)
-
(2,611)
(26,402)
(200)
389
2,969
(285,387)
(111,479)
18
124,811
45,000
(8,740)
(8,104)
(8,100)
-
-
(17,468)
(6,221)
-
Net cash flows from/(used) in financing activities
144,867
(23,689)
Net decrease in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
The above Statement should be read in conjunction with the accompanying notes.
(3,877)
(694)
79,103
74,532
(24,637)
(562)
104,302
79,103
112
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS
26 February 2003
— exposure, or rights, to variable returns from its involvement
1. Corporate information
Aurelia Metals Limited is a company limited by shares,
incorporated, and domiciled in Australia, whose shares are
publicly traded on the Australian Securities Exchange (ASX).
Aurelia has the following wholly owned subsidiaries incorporated
in Australia:
Entity name
Defiance Resources Pty Ltd
Hera Resources Pty Ltd
Nymagee Resources Pty Ltd
Peak Gold Asia Pacific Ltd
Peak Gold Mines Pty Ltd
Dargues Gold Mines Pty Ltd*
Big Island Mining Pty Ltd*
Incorporation
date
15 May 2006
20 August 2009
7 November 2011
31 October 1977
12 January 2006
3 February 2005
* Acquired on 17 December 2020 through the acquisition of the
Dargues Mine
The nature of the operations and principal activities of the
consolidated group are gold, copper, lead, zinc and silver
production and mineral exploration.
The financial report of Aurelia Metals Limited and its subsidiaries
for the year ended 30 June 2021 was authorised for issue in
accordance with a resolution of the Directors on 24 August 2021.
Basis of preparation
The financial report is a general-purpose financial report, which
has been prepared in accordance with the requirements of
the Corporations Act 2001, Australian Accounting Standards,
and other authoritative pronouncements of the Australian
Accounting Standards Board.
The financial report also complies with the International
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
The financial report has been prepared on a historical cost basis,
except for investments, derivative instruments, contingent
consideration, and deferred acquisition costs which are measured
at fair value.
The financial report has been presented in Australian dollars,
which is the functional currency of the Company.
Going concern
The financial report has been prepared on the going concern
basis which contemplates the continuity of normal business
activities and the realisation of assets and the settlement of
liabilities in the ordinary course of business.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of Aurelia Metals Limited and its subsidiaries.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if and only if
the Group has:
— power over the investee (i.e., existing rights that give it
the current ability to direct the relevant activities of the
investee);
with the investee;
— the ability to use its power over the investee to affect its
returns;
— when the Group has less than a majority of the voting or
similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power
over an investee, including:
— the contractual arrangement with the other vote holders
of the investee;
— rights arising from other contractual arrangements; and
— the Group’s voting rights and potential voting rights.
The Group re-assesses whether it controls an investee if facts and
circumstances indicate that there are changes to one or more
of the three elements of control. Consolidation of a subsidiary
begins when the Group obtains control over the subsidiary and
ceases when the Group loses control of the subsidiary. Assets,
liabilities, income, and expenses of a subsidiary acquired or
disposed of during the year are included in the statement of
profit or loss from the date the Group gains control until the date
the Group ceases to control the subsidiary.
The financial statements of subsidiaries are prepared for
the same reporting period as the Company, using consistent
accounting policies. Adjustments are made to bring into line any
dissimilar accounting policies that may exist. In preparing the
consolidated financial statements, all intercompany balances and
transactions, income and expenses and profit and losses resulting
from intra-group transactions, have been eliminated in full.
AURELIA METALS
113
1. Corporate information (continued)
Foreign currency and translation
Functional and Presentation Currency
Both the functional and presentation currency of Aurelia Metals
Limited and its controlled entities is Australian Dollars ($ or A$).
The Group does not have any foreign operations.
Transactions and Balances
Transactions in foreign currency are initially recorded in the
foreign currency at the exchange rates ruling at the date of
transaction. The subsequent payment or receipt of funds related
to a transaction is translated at the rate applicable on the date of
payment or receipt. Monetary assets and liabilities denominated
in foreign currencies are re-translated at the rate of exchange
ruling at the reporting date. All exchange differences in the
consolidated financial statements are taken to the Statement of
profit or loss as gain or loss on exchange.
Other accounting policies
Significant and other accounting policies that summarise the
measurement basis used and are relevant to an understanding
of the financial statements are provided throughout the notes to
the financial statements.
2. Operating segments and performance
2.1. Identification and description of segments
The consolidated entity applies AASB 8 Operating Segments
which requires a management approach under which segment
information is presented on the same basis as that used for
internal reporting purposes.
An operating segment is a component of an entity that engages
in business activities from which it may earn income and incur
expenses (including income and expenses relating to transactions
with other components of the same entity), whose operating
results are regularly reviewed by the entity’s Chief Operating
Decision Makers (CODM), to determine how resources are
to be allocated to the segment and assess its performance.
Management will also consider other factors in determining
operating segments such as the existence of a line manager and
the level of segment information presented to the Board
of Directors.
The Consolidated Entity has identified its operating segments
based on the internal reports that are reviewed and used by the
Managing Director & CEO and the Board of Directors (the Chief
Operating Decision Makers) in assessing performance and in
determining the allocation of resources.
The Consolidated Entity operates entirely in the industry of
exploration, development, and mining of minerals in Australia.
The reportable segments are split between the operating
mine sites (Hera, Peak and Dargues mines), and corporate and
administrative activities. Financial information about each of
these segments is reported to the Managing Director and Board
of Directors monthly.
Corporate and administrative activities are not allocated to
operating segments and form part of the reconciliation to net
profit after tax and includes share-based expenses and other
administrative expenditures incurred to support the business
during the period.
Segment performance is evaluated based on earnings before
interest, tax, depreciation and amortisation (EBITDA).
2.2. Accounting policies adopted
Unless otherwise stated, all amounts reported to the CODM with
respect to operating segments, are determined in accordance
with accounting policies that are consistent with those adopted
in the annual financial statements of the consolidated entity.
2.3. Segment revenue
The revenue from external parties reported to the CODM is
measured in a manner consistent with that of the statement of
profit and loss and other comprehensive income.
Revenues from external customers are derived from the sale
of metal in concentrate and gold and silver doré. The revenue
from gold and silver doré sales is attributable to a gold refinery
customer based in Perth and other counterparties with the
largest customer accounting for 38% of the total sales revenue
(2020: 68%). The concentrate revenue arises from sales to various
customers with the largest customer accounting for 14% of total
sales revenue (2020: 22%).
2.4. Segment assets and liabilities
Where an asset is used across multiple segments the asset is
allocated to the segment that receives most of the economic
value from the asset. In most instances, segment assets are
clearly identifiable based on their nature and physical location.
Liabilities are allocated to segments where there is a direct
nexus between the liability and the operations of the segment.
Borrowings and tax liabilities are generally considered to relate
to the whole consolidated entity and are not allocated. Segment
liabilities include trade and other payables and other certain
direct borrowings.
114
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2. Operating segments and performance (continued)
Unallocated items
The following items are not allocated to operating segments, as they are not considered part of the core operations of
any segment:
— interest and other income;
— share based payment expense;
— acquisition and integration costs and stamp duty expense incurred for the acquisition of Dargues Mine on
17 December 2020;
— fair value adjustments/remeasurements at balance date related to financial assets and liabilities; and
— foreign exchange, commodity derivative transactions, investment revaluations, fair value adjustments, debt restructuring
and gain/loss on the sale of financial assets.
2.5. Segment information
The segment information for the reportable segments is as follows:
Year ended 30 June 2021
Note
Sales revenue
Site EBITDA
3
Reconciliation of profit before tax
expense:
Depreciation and amortisation expense
Corporate costs
Acquisition and integration costs and stamp
duty expense11
Interest income and expense, net
Share based expenses
22
Exploration costs expensed
Other income and expenses, net
Loss on commodity derivatives and
Foreign exchange
Income tax expense
5
Profit after income tax
Segment assets and liabilities
Total assets
Total liabilities
1
Dargues Mine was acquired on 17 December 2020
Peak
Mine
$’000
245,214
110,950
Hera
Mine
$’000
138,924
58,425
Dargues
Mine1
$’000
32,339
14,816
Corporate &
Elimination
$’000
-
-
Total
$’000
416,477
184,191
(76,467)
(13,804)
(20,002)
(5,528)
(936)
(1,002)
5,833
(671)
(28,697)
42,917
213,229
(74,551)
74,691
(35,085)
275,643
(69,037)
92,899
(56,499)
656,462
(235,172)
AURELIA METALS
115
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2. Operating segments and performance (continued)
2.5. Segment information (Continued)
Note
3
22
5
Year ended 30 June 2020
Sales revenue
Site EBITDA
Reconciliation of profit before tax expense:
Depreciation and amortisation expense
Corporate costs
Interest income and expense, net
Share based expenses
Exploration costs expensed
Other income and expenses, net
Loss on commodity derivatives and Foreign exchange
Income tax expense
Profit after income tax
Segment assets and liabilities
Total assets
Total liabilities
Peak
Mine
$’000
185,366
60,214
Hera
Mine
$’000
146,453
68,097
Corporate &
Elimination
$’000
-
-
Total
$’000
331,819
128,311
(56,665)
(8,912)
(1,575)
(1,351)
(2,600)
2,359
(14,360)
(15,765)
29,442
203,562
(71,914)
72,846
(30,560)
67,368
(6,398)
343,776
(108,872)
3. Sales revenue and other income
Profit before income tax includes the following revenues and other income whose disclosure is relevant in explaining the performance of
the Group.
Sales revenue
Gold
Copper
Lead
Zinc
Silver
Note
2021
$000
2020
$000
253,574
216,521
45,857
50,141
51,778
15,127
41,972
38,277
25,960
9,089
Total sales revenue from contracts with customers
416,477
331,819
Other income
Sundry income
Fair value adjustments/remeasurement of financial assets and liabilities
Fair value adjustment of financial assets
Remeasurement of financial liabilities
9
17
Total other income
Total finance income
116
ANNUAL REPORT 2021
361
2,731
(2,762)
8,234
5,472
5,833
3,887
-
3,887
6,618
314
795
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Sales revenue and other income (continued)
Recognition and measurement
Sales revenue
Gold and silver doré sales
Revenue from gold and silver doré sales is recognised when
control has been transferred to the refinery (which is at the point
where the doré leaves the gold room at the mine site, or when
the gold metal credits are transferred to the customer’s account)
and once the quantity of the gold and silver and the selling prices
are known or have been reasonably determined.
Gold, lead, zinc, copper and silver in concentrate sales
Recognition of revenue from metal in concentrate sales contracts
with customers is dependent upon the individual contract with
each customer, for each mine site. Depending on the contract,
the Incoterms may be Cost, Insurance and Freight (CIF), Carriage
and Insurance Paid (CIP), or Free On Board (FOB).
The Group generates concentrate sales revenue primarily from
the obligation to transfer concentrate to the customer. As the
Group sells some of the concentrate on CIF and CIP Incoterms,
the freight/shipping services provided (as principal) under these
contracts with customers to facilitate the sale of concentrate
represent a secondary performance obligation.
Revenue is allocated between the performance obligations and is
recognised as each performance obligation is met, which for the
primary obligation occurs when the concentrate is delivered to a
vessel or location, and for the secondary obligation, if applicable,
is when the concentrate is delivered to the location specified by
the customer. Revenue arising from the secondary obligation,
if assessed as immaterial to the Group, is aggregated with the
primary performance obligation for disclosure purposes.
Quotation period
As is industry practice, the terms of metal in concentrate
sales contracts with third parties contain provisional pricing
arrangements whereby the selling price for metal in concentrate
is determined based on the market price prevailing at a future
date (quotation period). Revenue for the primary performance
obligation is measured based on the fair value of the
consideration specified in a contract with the customer at the
time of settling the performance obligation and is determined
by reference to forward market prices. Provisional pricing
adjustments, which occur between the fair value at the time
of settling the primary performance obligation and the final
price, have been assessed and are recorded within revenue from
concentrate sales.
Freight services performance obligation
The freight service on export concentrate shipments represents
a separate performance obligation as defined under AASB 15
Revenue from Contracts with Customers. This means a portion
of the revenue earned under these contracts proportionate
to the cost of freight services has been deferred and will be
recognised at the time the obligation is fulfilled, that is, when the
concentrate reaches its final destination. For the year ended 30
June 2021, the amount of deferred revenue is $0.7 million
(2020: $0.5 million).
Other income
Fair value adjustment/remeasurement of financial assets and
liabilities
The financial assets and liabilities comprise:
— a financial asset measured at fair value through profit and
loss related to an investment in the ordinary capital of Sky
Metals Limited, an entity listed on the Australian Securities
Exchange (ASX). The fair value adjustment was determined
based on the quoted market price of Sky Metals Limited as at
30 June 2021; and
— a financial liability measured at amortised cost related to
a third-party royalty payable on the gross revenue from
the sale of gold concentrate from the Dargues Mine. The
remeasurement of the liability is based on changes to the
applied gold price and foreign exchange rate, estimated
future sales volumes and the discount rate.
AURELIA METALS
117
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Cost of sales and other expenses
Cost of sales
Site production costs
Transport and refining
Royalty
Inventory movement
Depreciation and amortisation
Total cost of sales
Corporate administration expenses
Corporate administration expenses
Corporate depreciation
Total corporate administration expenses
Commodity derivative loss
Loss on gold forward contracts2
Total loss on commodity derivatives
Other expenses
Loss on disposal of fixed assets
Unrealised foreign exchange loss
Realised foreign exchange loss/(gain)
Total other expenses
Finance costs
Interest expense3
Interest on lease liabilities
Unwinding of discount
Total finance costs
Note
2021
$000
2020
$000
204,385
178,964
18,343
12,089
(2,531)
15,719
9,439
(615)
232,286
203,507
76,467
308,753
56,338
259,845
13,344
460
13,804
-
-
18
192
461
671
4,434
699
709
5,842
8,913
327
9,240
14,360
14,360
4,143
177
(61)
4,259
1,108
774
488
2,370
15
14
2
3
In prior years, the Company had entered into derivative commodity contracts for the forward sale of gold that had not been hedges. All of these gold forwards were settled at
30 June 2020.
Interest expense includes establishment fees for a new secured Syndicated Facilities Agreement, interest on concentrate prepayments and other interest expenses.
118
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 5. Income tax
The Group is a tax consolidated group at balance date. The major components of income tax expense for the years ended
30 June 2021 and 2020 are:
5.1. Income tax expense
Current income tax
Current tax on profits for the year
Adjustments in respect of current income tax of previous year
Deferred tax:
Deferred tax movements for the year
Income tax expense reported in the statement of profit or loss and other comprehensive income
5.2. Numerical reconciliation of income tax expense to prima facie tax payable
Accounting profit before income tax
Prima facie income tax expense @ 30%
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income
Stamp duty and other non-assessable items
Prior year under provisions
Temporary differences not previously recognised
Income tax expense
5.3. Deferred tax balances
The net deferred tax liability of $13.2 million (2020: asset of $1.2 million), relates to the following:
Recognised deferred tax balances
Provisions
Mine properties
Inventories
Exploration and evaluation expenditure
Other
Property, plant and equipment
Net deferred tax (liability)/asset
2021
$000
10,050
3,106
15,541
28,697
2021
$000
71,614
21,484
4,832
3,106
(725)
28,697
2021
$000
22,903
(27,904)
(743)
(10,348)
2,161
802
(13,129)
2020
$000
10,005
1,800
3,960
15,765
2020
$000
45,207
13,562
403
1,800
-
15,765
2020
$000
19,331
(13,241)
(1,728)
(4,617)
(3,124)
4,542
1,163
The deferred tax balance includes a deferred tax asset of $4.0 million recognised on acquisition of the Dargues Mine.
AURELIA METALS
119
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 5. Income tax (continued)
Recognition and measurement
Current income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be paid to or recovered from
the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
— when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability;
— in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
— in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax
assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same
taxation authority.
6. Cash and cash equivalents
Cash at banks
Short term deposits
Cash and cash equivalents
Recognition and measurement
2021
$000
74,258
274
74,532
2020
$000
78,729
374
79,103
Cash and short-term deposits in the balance sheet comprise cash at bank and on hand and short-term deposits classified as financial
assets held at amortised cost.
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of
generally between one day and three months depending on the immediate cash requirements of the Group and earn interest at the
respective short-term deposit rates.
Restricted cash
Restricted cash is not available for day to day operations and is therefore excluded from cash and cash equivalents. The Group has $8.6
million (2020: Nil) held as restricted cash by the banking syndicate providing the Guarantee Facility as part of the secured Syndicated
Facilities Agreement (refer to Note 16 for further information).
120
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 7. Trade and other receivables
Trade receivables
GST receivable
Other receivables
2021
$000
8,131
6,326
3,021
17,478
2020
$000
4,073
2,579
116
6,768
Recognition and measurement
All of the above are non-interest bearing and generally receivable on 30 to 90 day terms. At balance date, no material amount of trade
receivables were past due or impaired.
Trade receivables
Trade receivables (subject to provisional pricing), comprising base metal and gold concentrates, are initially recorded at the fair value of
contracted sale proceeds expected to be received only when there has been a passing of control to the customer. Approximately 90-95%
of the provisional invoice for concentrate sales (based on the provisional price) is received in cash when the goods are loaded onto
the ship.
The collectability of debtors is reviewed in line with a forward-looking expected credit loss (ECL) approach. The Group has adopted AASB
9’s simplified approach and calculates ECL’s based on lifetime expected credit losses, and takes into consideration any historical credit
loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject to
impairment. The Group’s financial assets at amortised cost include trade receivables (not subject to provisional pricing) and
other receivables.
Trade receivables (subject to provisional pricing) are exposed to future commodity price movements over the quotational period (QP)
and are measured at fair value up until the date of settlement. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. These trade receivables are initially
measured at the amount which the Group expects to be entitled, being the estimate of the price expected to be received at the end of
the QP. The QP is typically for a between one and three months post-shipment, and final payment is due within 30 days from the end of
the QP.
Other receivables
The Share Sale Agreement for the acquisition of the Dargues Mine provides for a Net Working Capital Adjustment. The estimated net
receivable of $3.1 million, has been recognised at 30 June 2021 (refer to Note 29 for further detail).
8. Inventories
Finished concentrate
Finished gold doré
Metal in circuit
Ore stockpiles
Materials and supplies
Total current inventory
2021
$000
14,720
620
1,429
4,452
8,211
2020
$000
4,211
1,829
2,615
8,785
7,323
29,432
24,763
AURELIA METALS
121
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 8. Inventories (continued)
Recognition and measurement
Materials and supplies are valued at the lower of cost and net realisable value. Net realisable value is the estimate selling price in the
ordinary course of business, less the estimated costs of completion and selling expenses. An allowance for obsolescence is determined
with reference to the stores inventory items identified. A regular review is undertaken to determine the extent of any provision
for obsolescence.
Ore stockpiles, gold in circuit, dore and concentrate are physically measured (or estimated) and valued at the lower of cost and net
realisable value. Cost represents the weighted average cost and includes direct costs and an appropriate portion of fixed and variable
production overhead expenditure, including depreciation and amortisation, incurred in converting materials into finished goods.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
KEY JUDGEMENTS - NET REALISABLE VALUE
The computation of net realisable value for ore stockpiles, gold in circuit, doré and concentrate involves significant judgements
and estimates in relation to timing and cost of processing, commodity prices, foreign exchange rates, recoveries and the timing of
sale of the doré and concentrate produced. A change in any of these assumptions will alter the estimated net realisable value and
may therefore impact the carrying value of ore stockpiles. Separately identifiable costs of conversion of each metal are specifically
allocated.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained
gold ounces is based on assay data, and the estimated recovery percentage is based on the expected processing method. Stockpile
tonnages are verified by periodic surveys.
9. Financial assets
Movement in carrying value of listed equity investment
Opening balance
Fair value adjustment
Purchase of placement shares
Closing balance
Note
3
2021
$000
4,787
(2,762)
-
2,025
2020
$000
700
3,887
200
4,787
At 30 June 2021 the Company held 18,410,000 fully paid ordinary shares (2020: 18,410,000 shares) in Sky Metals Limited
(ASX: SKY). The fair value adjustment at 30 June 2021 was determined based on the quoted market share price of Sky Metals Limited as
at 30 June 2021.
Recognition and measurement
Investments are classified as financial assets and comprise of quoted equity instruments which the Group intends to hold for the
foreseeable future. The equity instruments are not held for trading but rather intended to be held over the long-term as a strategic
investment. The Group elects to measure investments at either fair value through the profit and loss or fair value through other
comprehensive income on an investment-by-investment basis.
122
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 10. Property, plant and equipment
Plant and equipment at cost
Property at cost
Accumulated depreciation
Movement in property, plant and equipment
Carrying value at the beginning of the year
Acquisition of Dargues Mine
Additions/expenditure during the year
Depreciation for the year
Transfer to mine properties
Assets written off
Assets disposed or sold
Closing balance
Recognition and measurement
2021
$000
254,869
5,999
(90,410)
170,458
104,538
74,390
14,443
(22,432)
(336)
(126)
(19)
2020
$000
171,943
764
(68,169)
104,538
85,351
-
44,727
(16,909)
-
(1,502)
(7,129)
170,458
104,538
Property, plant and equipment is carried at cost, less accumulated depreciation, amortisation and accumulated impairment losses.
The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into
operation, and, for qualifying assets (where relevant), borrowing costs. The purchase price or construction cost is the aggregate amount
paid and the fair value of any other consideration given to acquire the asset.
Derecognition
Items of property, plant and equipment are derecognised upon disposal or when no further future economic benefits are expected from
its use or disposal. Any gain or loss from derecognising the asset is included in the statement of profit or loss in the period the item
is derecognised.
When an asset is surplus to requirements the carrying amount of the asset is reviewed and is written down to its recoverable amount
or derecognised.
Depreciation and amortisation
Items of plant and equipment and mine development are depreciated over their estimated useful lives.
The Group uses the units of production basis when depreciating mine specific assets which results in a depreciation charge proportional
to the depletion of the anticipated remaining life of mine production. Each item’s economic life has due regard to both its physical life
limitations and to present assessments of economically recoverable reserves of the mine property at which it is located.
For the remainder of assets, the straight-line method is used. The rates for the straight-line method vary between 10% and
33% per annum.
KEY JUDGEMENTS - USEFUL LIVES, RESIDUAL VALUES AND DEPRECIATION METHODS
The process of estimating the remaining useful lives, residual values and depreciation methods involve significant judgement. These
estimates are reviewed annually for all major items of plant and equipment. Any changes are accounted for prospectively from the
date of reassessment to the end of the revised useful life.
AURELIA METALS
123
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 11. Mine properties
Mine properties at cost
Accumulated depreciation and impairment
Movement in mine properties
Carrying value at the beginning of the year
Acquisition of Dargues Mine
Development expenditure during the year
Transfer from exploration and evaluation
Depreciation for the year
Transfer from property, plant and equipment
Closing balance
Recognition and measurement
2021
$000
551,810
(264,775)
287,035
92,337
170,321
67,765
2,732
(46,456)
336
287,035
2020
$000
310,523
(218,186)
92,337
87,748
-
36,308
-
(31,719)
-
92,337
The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into
operation, the initial estimate of the rehabilitation obligation, and, for qualifying assets (where relevant), borrowing costs. The purchase
price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.
Mine properties also consist of the fair value attributable to mineral reserves and the portion of mineral resources considered to be
probable of economic extraction at the time of an acquisition.
When a mine construction project moves into the production phase, the capitalisation of certain mine construction costs
ceases, and costs are either regarded as part of the cost of inventory or expensed, except for costs which qualify for capitalisation
relating to mining asset additions, improvements or new developments, underground mine development or mineable
reserve development.
Depreciation and amortisation
Accumulated mine development costs are depreciated/amortised on a unit-of-production basis over the economically recoverable
reserves and the portion of mineral resources considered to be probable of economic extraction, except in the case of assets whose
useful life is shorter than the life of the mine, in which case the straight-line method is applied.
The unit of account for run of mines (ROM) costs is Gold Metal Equivalent units mined (measured in ounces), whereas the unit of account
for post-ROM costs is Gold Metal Equivalent units processed (measured in ounces).
Rights and concessions are depleted on the unit-of-production (UOP) basis over the economically recoverable reserves of the relevant
area. The unit-of-production rate calculation for the depreciation/amortisation of mine development costs considers expenditures
incurred to date, together with planned future mine development expenditure.
The estimated fair value attributable to the mineral reserves and the portion of mineral resources considered to be probable of
economic extraction at the time of the acquisition is amortised on a UOP basis whereby the denominator is the proven and probable
reserves and the portion of resources expected to be extracted economically.
The estimated fair value of the mineral resources that are not considered to be probable of economic extraction at the time of the
acquisition is not subject to amortisation, until the resource becomes probable of economic extraction in the future and is recognised in
exploration and evaluation assets.
124
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 11. Mine properties (continued)
Assessment of impairment
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Indicators reviewed include,
but are not limited to, the operating performance of the Cash Generating Unit (“CGU”), future business plans, assumptions around future
commodity prices, exchange rates, production rates and production costs. Where an indicator of impairment exists, the Company makes
a formal estimate of recoverable amount. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the carrying
amount is reduced to the recoverable amount and the impairment loss recognised in the Statement of Profit or Loss.
The recoverable amount is the greater of fair value less costs to sell (FVLCD) and value in use (VIU). It is determined for an individual
asset, unless the asset’s VIU cannot be estimated to be close to its FVLCD and it does not generate cash inflows that are largely
independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating
unit to which the asset belongs.
The Group considers each of its mine sites to be a separate CGU. The FVLCD for each CGU is estimated based on discounted future
estimated cash flows (expressed in real terms) expected to be generated from the continued use of the CGUs, using market-based
commodity price and exchange assumptions, estimated quantities of recoverable minerals, production levels, operating costs and capital
requirements, including expansion projects, based on the latest life of mine plans.
These cash flows are discounted using a real post-tax discount rate that reflect current market assessments of the time value of money
and the risks specific to the CGU.
The determination of FVLCD for each CGU are Level 3 fair value measurements, as they are derived from valuation techniques that
include inputs that are not based on observable market data. The Group considers the inputs and the valuation approach to be consistent
with the approach taken by market participants.
The impairment review conducted at 30 June 2021 concluded no impairment.
KEY JUDGEMENTS - DEPRECIATION AND IMPAIRMENT ASSESSMENT OF MINE PROPERTIES
Units of production method of depreciation and amortisation
The Company uses the unit-of-production basis where depreciating/amortising specific assets which results in a depreciation/
amortisation charge proportional to the depletion of the anticipated remaining life of mine production.
Each item’s economic life, which is assessed annually, has due regard to both its physical life limitations and to present assessments
of economically recoverable reserves of the mine property at which it is located. These calculations require the use of estimates and
assumptions.
Impairment
The Company assesses each Cash-Generating Unit (GGU), at each reporting period to determine whether there is any indication of
impairment or reversal. Where an indicator of impairment or reversal exists, a formal estimate of the recoverable amount is made,
which is deemed as being the higher of the fair value costs of disposal and value in use.
These assessments require the use of estimates and assumptions which could change over time and are impacted by various
economic factors such as discount rates, exchange rates, commodity prices, gold multiple values, future operating development and
sustaining capital requirements and operating performance. A change in one or more of these assumptions used to determine the
value in use or fair value less costs of disposal could result in a material adjustment in a CGU’s recoverable amount.
AURELIA METALS
125
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 12. Exploration and evaluation assets
Exploration and evaluation assets at cost
Accumulated exploration and evaluation written off
Closing balance
Movement in exploration and evaluation assets
Carrying value at the beginning of the year
Acquisition of Dargues Mine
Expenditure during the year
Transfer to mine properties
Expenditure written off during the year
Closing balance
Recognition and measurement
2021
$000
64,927
(25,609)
39,318
15,610
6,698
20,744
(2,732)
(1,002)
39,318
2020
$000
40,271
(24,661)
15,610
5,878
-
12,332
-
(2,600)
15,610
Expenditure on acquisition, exploration and evaluation relating to an area of interest is carried forward where rights to tenure of the
area of interest are current and:
— it is expected that expenditure will be recouped through successful development and exploitation of the area of interest or
alternatively by its sale; and/or
— exploration and evaluation activities are continuing in an area of interest but at balance date have not yet reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.
Such expenditure consists of an accumulation of acquisition costs, direct exploration and evaluation costs incurred, together with an
appropriate portion of directly related overhead expenditure.
A regular review is undertaken on each area of interest to determine the appropriateness of continuing to carry forward costs in relation
to an area of interest. The carrying value of capitalised exploration and evaluation assets are assessed for impairment when facts and
circumstances suggest that the carrying value may exceed its recoverable amount. During the year, an impairment expense of $1.0
million was recognised (2020: $2.6 million).
KEY JUDGEMENTS - IMPAIRMENT
The consolidated entity performs impairment testing on specific exploration assets as required in AASB 6 para 20. Significant
judgement is applied during the review and assessment of the carried forward costs and the extent to which the costs are expected
to the recouped through the successful future development of the area of interest.
126
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 13. Trade and other payables
Trade payables and accruals
Other payables
Recognition and measurement
2021
$000
42,445
4,855
47,300
2020
$000
24,563
4,119
28,682
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year that
are unpaid.
Trade payables are unsecured, non-interest bearing and generally payable on 7 to 30-day terms. The carrying amounts of trade and other
payables are considered to be the same as their fair values, due to their short-term nature. No assets of the Group have been pledged as
security for the trade and other payables.
The increase in trade payables is partly attributable to the inclusion of trade payables and accruals for Dargues Gold Mines.
14. Provisions
Current
Employee
Mine rehabilitation
Deferred acquisition costs
Other
Total current provisions
Non-Current
Mine rehabilitation
Deferred acquisition costs
Employee
Total non-current provisions
Total provisions
2021
$000
7,007
1,619
1,035
121
9,782
72,793
983
308
74,084
2020
$000
7,305
-
2,630
638
10,573
49,986
2,166
362
52,514
83,866
63,087
AURELIA METALS
127
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 14. Provisions (continued)
At 30 June 2021
Opening balance
Acquisition of Dargues Mine
Re-measurement of provision
Discount unwinding charged to Income
Statement
Amounts paid/utilised during the year
Closing balance
At 30 June 2020
Opening balance
Re-measurement of provision
Discount unwinding charged to Income
Statement
Amounts paid/utilised during the year
Closing balance
Employee benefits
Employee
$’000
Mine
Rehabilitation
$’000
Deferred
acquisition
$’000
7,667
-
3,124
-
(3,476)
7,315
49,986
13,428
10,301
697
-
74,412
4,796
-
323
12
(3,113)
2,018
Employee
$’000
Mine
Rehabilitation
$’000
Deferred
acquisition
$’000
7,777
2,895
-
(3,005)
7,667
43,701
5,834
451
-
49,986
5,534
1,836
37
(2,611)
4,796
Other
$’000
638
-
1,219
-
(1,736)
121
Other
$’000
727
1,656
-
(1,745)
638
Total
$’000
63,087
13,428
14,967
709
(8,325)
83,866
Total
$’000
57,739
12,221
488
(7,361)
63,087
The provision for employee benefits represents annual leave and long service leave entitlements for current employees. The balance
also includes the annual leave and long service leave balance related to previous employees who transferred from Aurelia to PYBAR (as a
result of the transition to contract mining from 1 February 2020). Aurelia remains liable for the benefits earned by these employees up to
the date of transfer.
Mine rehabilitation
The nature of mine rehabilitation and site restoration costs includes the dismantling and removal of mining plant, equipment and
building structures, waste removal and restoration, reclamation, and re-vegetation of affected areas of the site in accordance with the
requirements of the mining permits.
As part of the Syndicated Facilities Agreement, the Company has a $50 million Credit Facility for the purpose of providing Letters of
Credit for the Company’s environmental guarantee obligations. At 30 June 2021, Letters of Credit totalling $47.7 million have been
drawn (30 June 2020: $43.1 million), offset by a total of $8.6 million (2020: Nil) held by the banks as restricted cash to back the Letters
of Credit.
In the current year, the Company engaged environmental consultants to benchmark the rates used in estimating the mine rehabilitation
provision. The change in the mine rehabilitation provision is due to the application of the benchmarked rates
as well as other amounts related to the rehabilitation related to our operating mine sites and land holdings.
Deferred acquisition costs
This relates to deferred acquisition costs on the purchase of Hera Mine. The Group records deferred acquisition costs at
fair value using the discounted cash flow methodology based on the two year Australian government bond rate of 0.05%
(2020: three year Australian government bond rate 0.39%).
Other provisions
Other provisions relate to electricity provisions.
128
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 14. Provisions (continued)
Recognition and measurement
General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made
of the amount of the obligation.
Where the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only
when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit or loss net of
any reimbursement.
Employee benefits
Annual leave liabilities are measured at the amounts expected to be paid when the liabilities are settled. Long service leave liabilities
are measured at the present value of the estimated future cash outflows, discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is
recognised as part of finance costs in the statement of profit or loss.
Mine rehabilitation
The rehabilitation provision represents the present value of the estimated future rehabilitation costs relating to mine sites. The discount
rate used to determine the present value is a pre-tax rate reflecting the current market assessments. The unwinding of the discounting
of the provision is included in finance costs in the statement of profit or loss.
When the liability is initially recorded, the present value of the estimated cost is capitalised as part of the carrying value of mine
properties, which is amortised on a units of production basis. Additional disturbances or changes in rehabilitation costs will be recognised
as additions or changes to the corresponding asset and rehabilitation liability when incurred.
Deferred acquisition costs in relation to Hera
The Company measures the deferred acquisition costs by reference to the fair value of net present value of future cash outflows. The
following assumptions have been taken into account: risk free bond rate, gold price, timing and possibility of payment.
Other provisions
The provision for electricity represents the total estimated liability at year end. The liability is settled using electricity certificates bought
in advance and included in current assets (prepayments)
KEY JUDGEMENTS – MINE REHABILITATION
Mine rehabilitation
Significant estimates and assumptions are required in determining the provision for mine rehabilitation as there are many
transactions and other factors that will affect the ultimate liability payable to rehabilitate the mine sites. Changes in technology,
regulations, price increases, changes in timing of cash flows which are based on life of mine plan and changes in discount rates affect
recognised value of the liability. These factors will impact the mine rehabilitation provision in the period in which they change or
become known. An increase/(decrease) in CPI by 50 basis points will result in a $2.9 million (2020: $2.5 million) increase/(decrease) in
the profit or loss and equity.
AURELIA METALS
129
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 15. Leases
The Company has lease contracts for mining, property, plant, machinery, and other equipment used in its operations. The leases
generally have lease terms between 2 and 5 years.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Right of use assets
Carrying value at the beginning of the year
Additions
Depreciation expense
Carrying value at the end of the year
Recognition and measurement
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Lease liabilities
Current
Non-current
Closing balance
Movement in lease liabilities
Carrying value at the beginning of the year
Additions
Interest expense
Payments
Carrying value at the end of the year
The following are the amounts recognised in profit or loss
Depreciation expense for right-of-use assets
Interest expense on lease liabilities
Expense relating variable lease payments (included in cost of sales)
Expense relating to short term leases and low value assets (included in cost of sales)
2021
$000
13,209
7,505
(8,040)
12,674
2021
$000
6,354
6,613
12,967
13,535
7,542
699
(8,809)
12,967
8,040
699
78,479
15
87,233
2020
$000
16,945
2,800
(6,536)
13,209
2020
$000
6,318
7,217
13,535
16,945
2,799
774
(6,983)
13,535
6,536
774
109,417
51
116,778
Right of use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a
straight-line basis over the shorter of its estimated useful life and the lease term. The depreciation for the mine site is disclosed under
cost of sales whereas depreciation for the Corporate site is included in corporate administration expenses. Right-of-use assets are
subject to impairment.
130
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 15. Leases (continued)
Lease Liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be
made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.
The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or
condition that triggers the payment occurs. The lease interest expense is disclosed as finance costs in the statement of profit or loss and
is included as part of interest paid under cash flows from operating activities in the Cash Flow Statement.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the
in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases
that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease
of low-value assets recognition exemption to leases of office equipment that are considered of low value
(i.e., below $5,000).
Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight- line basis over the
lease term.
KEY JUDGEMENTS – ESTIMATING INCREMENTAL BORROWING RATE, IDENTIFICATION OF NON-LEASE
COMPONENTS AND IN SUBSTANCE FIXED RATES
The Group cannot readily determine the interest rate implicit in its leases. Therefore, it uses the relevant incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term,
and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The Group estimates the IBR using observable inputs (such as market interest rates) when available and entity-specific
judgements estimates (such as the lease term and certain contract provisions).
In addition to containing a lease, some of the Group’s arrangement involves the provision of additional services. These are non-lease
components, and the Group has elected to separate these from the lease components. Judgement is required to identify each of the
lease and non-lease components. The consideration in the contract is then allocated between the lease and non-lease components
on a relative stand-alone price basis. The Group also applies judgement to determine in-substance fixed payments included in the
lease payments such as unavoidable fixed minimum amounts.
AURELIA METALS
131
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 16. Interest bearing loans and borrowings
Current
Term loan facility
Less: Borrowing costs paid
Non-current
Term loan facility
Less: Borrowing costs paid
Total interest-bearing liabilities
Effective
interest rate
%
BBSY +4
BBSY +4
2021
$000
16,200
(1,103)
15,097
20,700
(1,381)
19,319
34,416
2020
$000
-
-
-
-
-
-
-
On 16 December 2020, Aurelia entered a new secured Syndicated Facilities Agreement totaling $115 million. The facilities comprise a
$45 million term loan (fully drawn), a $20 million working capital facility (undrawn) and a $50 million credit facility ($47.7 million utilised).
The drawn amounts from the term loan were applied for the acquisition of the Dargues Mine on
17 December 2020. The banking syndicate providing the facilities comprise ANZ, NAB and BNP Paribas.
The loan is secured by a floating charge over all assets of the Group and is repayable in full by September 2023.
Under the term loan facility, a mandatory gold hedging program was effected which initially comprised gold forwards of 55,000oz with
maturities over a twelve-month period. During the term of the facility, the Company must maintain gold hedging for a minimum of 20%
of the Group’s forecast gold production in each twelve-month period.
The purpose of the credit facility is to provide for the bank guarantee and environmental bond requirements for the Group.
The new Syndicated Facilities Agreement replace the previous funding arrangements which included a $30 million working capital facility
(undrawn) and a $50 million bond facility.
Recognition and measurement
At initial recognition, interest bearing loans and borrowings are classified as financial liabilities measured at fair value net of directly
attributable transaction costs. Subsequent measurement is at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
Establishment fees related to the facilities are capitalised as a prepayment and amortised over the term of the facility to which it
relates to.
132
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 17. Other financial liabilities
Current
Third party royalty liability
Non-Current
Third party royalty liability
Contingent consideration liability
Note
Movement in carrying value of other financial liabilities
Recognition at acquisition of Dargues Mine
Payments during the year
Remeasurement of liability/FV adjustment through profit & loss
3
Closing balance at 30 June 2021
2021
$000
6,253
6,253
32,912
4,250
37,162
2020
$000
-
-
-
-
-
Third party
royalty
liability
Contingent
liability
consideration
48,914
(1,370)
(8,379)
39,165
4,105
-
145
4,250
17.1. Third party royalty liability
On 21 December 2018, a funding agreement with Triple Flag (TFM) was executed, where TFM agreed to fund the Dargues Gold Project in
consideration for the grant of a royalty. Following the acquisition of Dargues Mine on 17th December 2020, as a going concern, Aurelia
Metals assumed the obligations related to the royalty due to the continuing obligation provisions of the royalty deed. The royalty is
calculated on the gross revenue generated from the sale of gold concentrate from the Dargues Mine and is payable in United States
Dollars (USD).
The liability is measured at amortised cost. The value is determined by discounting the future royalty payments using the 5-year
government bond rate plus risk adjustment based on the information available as at reporting date.
The royalty liability is subject to periodic remeasurement for changes in the following assumptions:
— gold price;
— life of mine extension and related change in sales volumes; and
— foreign exchange rate.
Recognition and measurement
At initial recognition the third-party royalty liabilities are classified as financial liabilities measured at fair value net of directly
attributable transaction costs. Subsequent measurement is at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in profit or loss over the period of the liability using the effective interest method.
17.2. Contingent consideration liability
In accordance with AASB 3 Business Combinations, the Group is required to recognise a contingent consideration liability assumed in a
business combination at the acquisition date.
The Company acquired Dargues Mine on 17th December 2020. The total purchase consideration of $190.5 million includes a contingent
component of up to a maximum of A$5 million, which may be settled by Aurelia ordinary shares based (or cash at Aurelia’s option) which is due on
the addition of incremental JORC compliant Mineral Resources discovered at Dargues up to 30 June 2022.
Recognition and measurement
The contingent consideration liability was recognised at fair value at acquisition and subsequently remeasured at fair value through
profit and loss at the reporting date.
AURELIA METALS
133
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
18. Contributed equity
18.1. Movements in ordinary shares on issue
30 June 2021
Opening balance
Shares issued from Placement and Institutional Entitlement Offer
Shares issued on vesting of performance rights
Shares issued from Retail Entitlement Offer
Shares issued as equity consideration
Employee Share Scheme
Share issue costs
Closing balance
30 June 2020
Opening balance
Shares issued upon exercise of options
Shares issued on vesting of performance rights
Closing balance
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Date
Number
873,983,797
25-Nov-20
217,006,547
30-Nov-20
1,565,201
10-Dec-20
85,957,026
17-Dec-20
55,813,954
6-May-21
413,350
-
1,234,739,875
Date
Number
(vii)
(viii)
30-Aug-19
11-Feb-20
867,879,333
5,541,964
562,500
$’000
185,878
93,313
-
36,962
24,000
-
(5,494)
334,659
$’000
185,878
-
-
873,983,797
185,878
(i) On 25 November 2020, the Company completed a Placement and Institutional Entitlements Offer. The proceeds raised were applied towards to the acquisition of the Dargues
Mine. The shares were issued at $0.43 per share.
(ii) Shares issued upon the vesting of 1,565,201 Performance Rights for no consideration. These shares issued will be held in escrow for a period of 12 months from grant date
(refer to note 22.3 for further detail).
(iii) On 10 December 2020, the Company completed the retail component of the Entitlement Offer (the Retail Entitlement Offer). The proceeds raised were applied towards to
the acquisition of the Dargues Mine. The shares were issued at $0.43 per share.
(iv) On 17 December 2020, a total of 55,813,954 shares were issued as part of the purchase consideration for the acquisition of the Dargues Mine. The shares were issued at $0.43
per share (Refer to note 29 for further detail).
(v) On 6 May 2021, a total of 413,350 shares were issued under the Employee Share Scheme for no consideration, where eligible employees are invited to participate in the plan to
receive fully paid ordinary shares in the Company (subject to dealing restrictions ending on the earlier of 3 years after grant or when the employee ceases employment) with a
nominal value of $1,000, which depending on the individual’s taxable income in the relevant year, may be tax exempt (refer to note 22.2 for further detail).
(vi) Share issue costs of $5.494 million relates to the Entitlement Offers made during the year.
(vii) Vesting of employee Performance Rights (Class 16B, Class 16C, Class 18A) for no consideration. A Total of 2,541,964 shares are held in escrow for a period of 12 months from
31 August 2019 (refer to note 22.3 for further detail).
(viii) Vesting of employee Performance Rights (Class 16B) for no consideration (refer to note 22.3 for further detail).
Recognition and measurement
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown directly in
equity as a deduction, net of tax, from proceeds.
Ordinary shares which have no par value have the right to receive dividends as declared and, in the event of a winding up of the Parent,
to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company.
18.2. Dividends made and proposed
Dividend Paid
Dividend paid
Total
2021
$000
8,740
8,740
2020
$000
17,468
17,468
A fully franked dividend of 1 cent per fully paid ordinary share was paid on 2 October 2020 related to the financial year ended
30 June 2020. The Directors did not recommend the payment of a dividend for the financial year ended 30 June 2021.
The franking account balance at the end of the financial year is $54 million (2020: $37 million). The Company currently does not have a
share buy-back plan or a dividend reinvestment plan.
134
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 19. Reserves
Share based payment reserve
Movements in reserves
Movement in share base payments reserve
Opening balance
Share based payment expense
Closing balance
OCI items net of tax: Cash flow hedge reserve
Opening balance
Commodity forward contracts
Closing balance
Recognition and measurement
Derivatives designated as hedging instruments
2021
$000
11,342
11,342
2021
$000
10,406
936
11,342
2021
$000
-
2,492
2,492
2020
$000
10,406
10,406
2020
$000
9,055
1,351
10,406
2020
$000
-
-
-
Derivatives are initially recognised at fair value on the date a derivative contract is entered, and they are subsequently remeasured to
their fair value at the end of each reporting period.
The group designates derivatives as either:
— hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or
— hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast
transactions (cash flow hedges).
Hedge accounting
At inception of the hedge relationship, the group documents the economic relationship between hedging instruments and hedged items
including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged
items. The group documents its risk management objective and strategy for undertaking its hedge transactions (refer to note 23.1 for
further detail).
Hedge effectiveness
The effective portion of changes in the fair value of derivatives that are designated and qualify as cashflow hedges is recognised in the
cash flow hedge reserve within equity. Amounts included in the hedge reserve are released to profit and loss when the hedge contracts
are closed and revenue has been recognised in the profit and loss. When a hedge becomes ineffective the cumulative amount recognised
in equity is released to the profit and loss.
Movement in reserves
The Company provides benefits to employees in the form of share-based payment transactions, whereby employees render services in
exchange for shares or rights over shares (“equity-settled transactions”), as issued under the Company’s employee Performance Rights
Plan. The plan forms part of the Company’s remuneration framework, as detailed and explained in the Remuneration Report to these
Financial Statements.
During the year, the Company introduced an Employee Share Scheme, where eligible employees are invited to participate in the plan to
receive fully paid ordinary shares in the Company (subject to dealing restrictions ending on the earlier of 3 years after grant or when the
employee ceases employment) with a nominal value of $1,000.
AURELIA METALS
135
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 20. Retained earnings
Movements in retained earnings were as follows:
Opening balance
Profit after tax for the year
Dividend paid
Closing balance
21. Earnings per share (EPS)
Profit attributable to owners of Aurelia Limited used to calculate basic and diluted earnings
2021
$000
38,620
42,917
(8,740)
72,797
2021
$000
42,917
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share
1,082,354
2020
$000
26,646
29,442
(17,468)
38,620
2020
$000
29,442
872,729
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in
calculating diluted earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Basic earnings per share
1,090,726
880,684
3.97
3.93
3.37
3.34
Basic earnings per share is calculated by dividing the net profit for the year attributable to equity holders of the parent company, by the
weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the amount used in determining basic earnings per
share by the after-tax effect of dividends and interest associated with dilutive potential ordinary shares. The weighted average number
of shares used is adjusted for the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
22. Share based payment arrangements
Share based payments expense
Expense from employee performance rights plan
Expense from employee share plan
Total
2021
$000
760
176
936
2020
$000
1,351
-
1,351
22.1. Employee performance rights plan
The Company has established an employee Performance Rights Plan. The objective of the plan is to assist in the recruitment, reward,
retention, and motivation of employees of Aurelia. The plan is open to eligible executives and employees.
The plan is provided by way of allocation of Performance Rights which carry an entitlement to a share subject to satisfaction of
performance criteria and/or vesting conditions (as applicable). To the extent performance criteria and/or vesting conditions are satisfied,
the Performance Rights are taken to have vested and been exercised for no consideration. The number of ordinary shares issued is equal
to the number of vested Performance Rights is issued.
Performance Rights are generally granted each year. The performance hurdles are agreed prior to the commencement of a new financial
year. The hurdles are determined at the discretion of the Board. The test date for each issue of Performance Rights is typically three
years from the Grant Date.
136
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 22. Share based payment arrangements (continued)
22.2. Employee share plan
During the year, the Company implemented the Employee Share Plan, which provides eligible employees with an opportunity to acquire
ordinary shares in the Company, with a grant value of $1,000, potentially on a tax-free basis. In FY21, the plan provided each eligible
employee with 2,362 fully paid ordinary shares.
22.3. Summary of movements of performance rights on issue
The following table illustrates the number of, and movements in Performance Rights during the year. All Performance Rights have a zero
weighted average exercise price.
Refer to the Remuneration Report (section 7.2) for the vesting conditions of the performance rights issued during the year.
Performance rights on issue
Opening balance issued
Granted during the year
Vested during the year
Lapsed during the year
Closing balance issued
Performance Rights
2016 Class 16C
2018 Class 18A
2018 Class 18B
2020 Class 19A
2020 Class 19B
2020 Class 19C
2021 Class FY21
Total
2021
Number
8,077,412
6,305,077
(1,565,201)
(2,293,926)
10,523,362
2021
WAEP
-
-
-
-
-
2021
Number
-
-
307,969
2,470,720
-
1,565,201
6,179,472
2020
Number
9,197,171
6,868,177
(6,104,464)
(1,883,472)
8,077,412
2020
Number
750,000
770,893
613,421
2,812,696
1,565,201
1,565,201
-
10,523,362
8,077,412
2020
WAEP
-
-
-
-
-
Unvested
Unvested
Unvested
Unvested
Unvested
Unvested
Unvested
Subsequent to the balance sheet date, the LTIP outcomes for Performance Rights under Class 18B were determined. The movement will
be displayed in the next reporting period.
22.4. Fair value determination
During the year, the Company issued a total of 6,305,077 performance rights (2020: 6,868,177 rights) under its employee Performance
Rights plan.
Each grant under the employee Performance Rights plan will have a fair value calculated under the accounting standards, which is
calculated as at the date of grant. An independent expert provider is engaged to calculate the estimated fair value of each grant
using the Monte Carlo simulation method, which is applied in conjunction with assumed probabilities for the achievement of specific
performance hurdles as define for each grant.
AURELIA METALS
137
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 22. Share based payment arrangements
23. Financial risk management objectives
(continued)
and policies
In common with all other businesses, the Company is exposed
to risks that arise during the course of business and its use of
financial instruments. This note describes the consolidated
entity’s objectives, policies, and processes for managing
those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented
throughout these financial statements.
The Company’s financial instruments consists of: deposits with
banks, trade and other receivables, listed equity investments,
derivatives, loans and borrowings, trade and other payables,
royalty liabilities, lease liabilities and the deferred consideration
related to the acquisition of the Hera Mine and the Dargues Mine.
The Board has overall responsibility for the determination of the
Company’s risk management objectives and policies, and whilst
retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the
Company’s managerial team.
The Company’s risk management policies and practices are
designed to minimise and reduce risk as far as possible and to
ensure cash flows are sufficient to:
— withstand significant changes in cash flow at risk scenarios
and still meet all financial commitments as and when they fall
due; and
— maintain the capacity to fund project development,
exploration, and acquisition strategies.
22.5. Recognition and measurement
The Company provides benefits to employees in the form of
share-based payment transactions, whereby employees render
services in exchange for shares or rights over shares (‘equity-
settled transactions’).
The cost of these equity-settled transactions with employees
is measured by reference to the fair value at the date at which
they are granted. The fair value is determined by an external
independent valuation using the Monte Carlo simulation.
The cost of equity-settled transactions is recognised, together
with a corresponding increase in equity, over the period in which
the performance conditions are fulfilled, ending on the date on
which the relevant employees become fully entitled to the award
(‘vesting date’).
The cumulative expense recognised for equity-settled
transactions at each reporting date until vesting date reflects:
— the extent to which the vesting period has expired; and
— the number of awards that will ultimately vest.
This opinion is formed based on the best available information
at balance date. No expense is recognised for awards that do not
ultimately vest, except for awards where vesting is conditional
upon a market condition.
In limited circumstance where the terms of an equity-settled
award are modified (such as a change of control event, or as
part of an agreed termination benefit), a minimum expense is
recognised as if the terms had not been modified. The expense
recognised reflects any increase in the value of the transaction
as a result of the modification, as measured at the date
of modification.
Where an equity-settled award is cancelled, it is treated as
if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately.
However, if a new award is substituted for the cancelled award
and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were
a modification of the original award, as described in the
previous paragraph.
The dilutive effect, if any, of the outstanding Performance Rights
is reflected as additional share dilution in the computation of
earnings per share.
138
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 23. Financial risk management objectives and policies (continued)
The Group holds the following financial instruments:
Financial assets
Cash at bank
Trade and other receivables
Restricted cash
Listed equity investments
Derivative financial instruments - hedges
Balance at year end
Financial liabilities
Interest bearing loans and borrowings
Trade and other payables
Third party royalty liability
Lease liabilities
Contingent consideration
Deferred acquisition cost
Derivative financial instruments - hedges
Balance at year end
Financial assets and liabilities
Notes
6
7
7
9
16
13
17
15
17
14
2021
$000
74,532
17,478
8,604
2,025
2,672
105,311
34,416
47,300
39,165
12,967
4,250
2,018
79
140,195
2020
$000
79,103
6,768
-
4,787
-
90,658
-
28,682
-
13,535
-
4,796
-
47,013
The Group enters derivative financial instruments (commodity contracts) with financial institutions with investment-grade credit ratings.
It measures financial instruments, such as derivatives and provisionally priced trade receivables, at fair value at each reporting date.
The Group’s principal financial assets, other than derivatives and provisionally priced trade receivables, comprise other receivables, cash
and short-term deposits that arise directly from its operations, as well as investments. The Group’s principal financial liabilities other than
derivatives, comprise interest bearing loans and borrowings, trade and other payables, lease liabilities, third party royalty and deferred
acquisition royalty.
Accounting policies in respect of these financial assets and liabilities are documented within the relevant notes to the
financial statements.
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial position if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise
the assets and settle the liabilities simultaneously.
Derivatives designated as hedging instruments
The Group is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments
are foreign currency risk and commodity price risk. In the current year, the Group implemented hedge accounting whereas in previous
years derivative commodity contracts were not designated as hedges.
23.1. Cash flow hedges – commodity price risk
The Group sells gold and base metal concentrate to overseas customers. The volatility in commodity prices led to the decision to enter
commodity forward contracts. In addition to this, the syndicated loan facility has mandatory gold hedging of a minimum of 20% of the
Group’s gold production in each 12-month period. At 30 June 2021, the Company had hedged 41,598 oz of gold with monthly maturities
through to 30 June 2022.
AURELIA METALS
139
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 23. Financial risk management objectives and policies (continued)
There is an economic relationship between the hedged items and the hedging instruments. The Group tests hedge effectiveness
periodically.
The hedge ineffectiveness can arise from:
— differences in the timing of the cash flows of the hedged items and the hedging instrument; and
— Changes to the forecasted amount of cash flows of hedged items and hedging instrument.
The Group is holding the following gold forward contracts at 30 June 2021:
Total
Less than 1
month
1 to 3 months
3 to 6 months
6 to 9 months
Average Contract price
(AUD/oz)
Ounces
41,598
2,442
4,900
2,435
14,700
2,427
11,948
2,422
6,600
9 to 12
months
2,382
3,450
23.2. Liquidity risk
Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities.
At 30 June 2021, the Company had $36.9 in debt (2020: nil) and held $74.5 million (2020: $79.1 million) of available cash.
23.3. Maturity of financial liabilities
The tables below analyses the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances which are due within 12 months equal their
carrying balances as the impact of discounting is not significant.
2021
Loans and borrowings
Lease liabilities
Deferred acquisition costs
Trade and other payables
Third party royalty liability
Contingent consideration
<1 Yr
$000
16,200
6,810
1,034
47,300
6,253
5,000
1-2 Yrs
$000
20,700
4,384
804
-
2-3 Yrs
$000
3-4 Yrs
$000
>4 Yrs
$000
-
2,254
180
-
-
264
-
-
-
-
-
-
5,835
5,995
10,125
14,018
-
-
-
-
Contracted
cash flow of
liability
$000
Carrying
value of
liability
$000
36,900
13,712
2,018
47,300
42,226
5,000
36,900
12,967
2,018
47,300
39,165
4,250
Total
82,597
31,723
8,429
10,389
14,018
147,156
142,600
There are no contracted cash flow liabilities relating to leases payable in period greater than 5 years.
2020
Lease liabilities
Deferred acquisition costs
Trade and other payables
Total
<1 Yr
$000
6,318
2,633
28,682
37,633
1-2 Yrs
$000
2-3 Yrs
$000
3-4 Yrs
$000
3,937
1,120
-
5,057
2,134
643
-
2,777
1,342
419
-
1,761
Contracted
cash flow of
liability
$000
Carrying
value of
liability
$000
13,953
4,815
28,682
47,450
13,535
4,796
28,682
47,013
>4 Yrs
$000
222
-
-
222
140
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 23. Financial risk management objectives and policies (continued)
23.5.2. Commodity price risk
The Group is affected by the price volatility of certain
commodities. Price risk relates to the risk that the fair value of
future cash flows of commodity sales will fluctuate because
of changes in market prices largely due to supply and demand
factors for commodities. The Group is exposed to commodity
price risk related to the sale of gold, lead, zinc, and copper on
physical prices determined by the market at the time of sale.
Commodity price risk may be managed, from time to time and as
required and deemed appropriate by the Board, with the use of
hedging strategies through the purchase of commodity hedge
contracts. These contracts can establish a minimum commodity
price denominated in either US$ or A$ over part of the group’s
future metal production.
The Group’s management has developed and enacted a hedging
policy focused on the management of commodity risk. At 30 June
2021 the Group had gold forward contracts for 41,598 ounces
with an average price of $2,426/oz, as well as 483 tonnes of zinc
hedged at a price of US$2,854 per tonne and 601 tonnes of lead
hedged at a price of US$2,175 per tonne.
During the financial year, gold and gold in concentrate sales were
102,589 ounces (2020: 93,174 ounces). The effect on the income
statement with an A$50/oz increase/decrease in gold price would
have resulted in an increase/decrease in profit/loss and equity of
$4.1 million (2020: $4.7 million).
During the financial year, the company sold concentrate
containing payable lead of 22,432 tonnes (2020: 18,390 tonnes),
payable zinc of 18,341 tonnes (2020: 12,783 tonnes) and payable
copper of 4,356 tonnes (2020: 5,306 tonnes). An increase/
decrease of US$50/t in the price of lead, zinc and copper would
have resulted in an increase/decrease profit/loss and equity by
$2.0 million (2020: $2.7 million).
23.4. Credit risk exposures
Credit risk is the risk of financial loss to the Group if a customer
or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s
receivables from customers and investment securities. At balance
date, there were no significant concentrations of credit risk given
the sound credit worthiness of customers and bank used having
investment grade credit ratings.
The total trade and other receivables outstanding as at 30 June
2021 was $17.5 million (2020: $6.8 million).
No receivables are considered past due or impaired. Cash and
cash equivalents at 30 June 2021 was $74.5 million
(2020: $79.1 million).
23.5. Market risk exposures
23.5.1. Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash
flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Group’s exposure to the risk of changes in
foreign exchange rates relates primarily to the Group’s operating
activities, including revenue and expenses denominated in a
foreign currency.
The group considers the effects of foreign currency risk on its
financial position and financial performance and assesses its
option to hedge based on current economic conditions and
available market data.
The Group manages its foreign currency risk by converting
foreign currency receipts to AUD upon receipt and only
maintaining a minimal USD balance for foreign currency
denominated commitments. The foreign currency
exposure to revenue not converted at time of sale in the period
to a 5% change in US$ exchange rate was an approximately $0.2
million (2020: $0.3 million) sensitivity in profit/loss and equity.
The cash balance at year end includes US$2.8 million (2020:
US$4.4 million) held in US$ bank accounts. An increase/decrease
in AUD: USD foreign exchange rates of 5% will result in $0.1
million (2020: $0.3 million) increase/decrease in US$ currency
bank account balances.
AURELIA METALS
141
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 23. Financial risk management objectives and policies (continued)
23.5.3. Interest rate risk
Exposure to interest rate risk arises on financial assets and liabilities recognised at reporting date where a future change in interest rates
will affect future cash flows or the fair value of fixed rate financial instruments.
An increase/(decrease) in interest rates by 50 basis points will result in a $0.2 million (2020: $0.3 million) increase/(decrease) in the profit
or loss and equity.
The Group continually analyses its exposure to interest rate risk. Consideration is given to alternative financing options, potential
renewal of existing positions, alternative investments, and the mix of fixed and variable interest rates.
23.5.4. Equity price risk
The Group’s listed equity investment in Sky Metals Limited is susceptible to market price risk arising from uncertainties about future
value of the investment security. An increase /(decrease) of 5% in the share price would result in a $0.1 million (2020: $0.2 million) change
in the investment.
23.5.5. Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to maintain a strong
capital base to support the Company’s growth objectives and to maximise shareholder value. The Company aims to ensure that it meets
financial covenants attached to its interest-bearing loans and borrowings that form part of its capital structure requirements. Breaches in
the financial covenants would permit the bank to immediately call interest-bearing loans and borrowings. There have been no breaches in
the financial covenants of any interest-bearing loans and borrowings in the current period.
The Group monitors capital using a gearing ratio, which is net debt divided by the aggregate of equity and net debt. The Group’s net debt
is calculated as interest-bearing loans and borrowings (excluding lease liabilities) less cash and short-term deposits.
The Company continuously monitors the capital risks of the business by assessing the financial risks and adjusting the capital structure in
response to changes in those risks. The Company is continually evaluating its sources and uses of capital.
Interest bearing loans and borrowings
Trade and other payables
Less: cash at bank
Net debt/(cash)
Equity
Capital and net debt
Gearing ratio
Notes
16
13
6
2021
$000
34,416
47,300
(74,532)
7,184
421,290
428,474
2%
2020
$000
-
28,682
(79,103)
(50,421)
234,904
184,483
(27%)
Syndicated Facilities Agreement covenants
The Company has an established Environmental Bond Facility which provides for covenants which includes a Cash Cover Ratio,
a Forward Cover Ratio, and a minimum cash balance. During the year, the Company has complied with and satisfied the
covenant obligations.
The Group continues to monitor the capital by assessing the financial risks and adjusting the capital structure in response to changes in
those risks. The Group is continually evaluating its sources and uses of capital. The Group is not subject to any externally imposed capital
requirements.
The Directors consider the carrying values of financial assets and financial liabilities recorded in the financial statements approximate
their fair values.
142
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 23. Financial risk management objectives and policies (continued)
23.5.6. Fair value hierarchy
The following table provides the fair value measurement hierarchy of the Group’s financial assets and liabilities. The following financial
instruments are carried at fair value in the statement of financial position and measured at fair value through profit or
loss or OCI.
2021
Assets
Derivative financial instruments
Listed equity investments
Liabilities
Derivative financial instruments
Deferred acquisition costs
Contingent consideration liability
2020
Assets
Listed equity investments
Liabilities
Deferred acquisition costs
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable inputs
Level 1
$000
Level 2
$000
Level 3
$000
-
2,025
-
-
-
2,672
-
79
-
-
-
-
-
1,035
4,250
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable inputs
Level 1
$000
4,787
-
Level 2
$000
-
-
Level 3
$000
-
(4,796)
The techniques and inputs used to value the financial assets and liabilities are as follows:
— Listed equity investments: Fair value based on quoted market price at 30 June 2021.
— Deferred acquisition costs: are revalued at each reporting period to fair value by using the discounted cash flow methodology. Inputs
include forecast gravity gold production applicable to the royalty of 63,174 ounces (2020: 33,026 ounces). Future royalty revenue is
estimated using an assumed future average gold price of A$2,258/oz (2020: A$2,321/oz). The discount rate used was the two-year
government bond rate of 0.05% (2020:0.39%).
— Derivative financial instruments (gold and base metal forward contracts): are marked-to-market value based on spot prices at balance
date and future delivery prices and volumes, as provided by trade counterparty.
In common with all other businesses, the Company is exposed to risks that arise during the course of business and its use of financial
instruments. This note describes the consolidated entity’s objectives, policies, and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.
AURELIA METALS
143
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 24. Reconciliation of profit after tax to net cash flows
Reconciliation of profit after tax to net cash flows used in operating activities:
Net profit after tax
Adjustments for:
Depreciation and amortisation
Acquisition and integration costs
Fair value adjustment/remeasurement of financial assets and liabilities
Income tax expense net of tax payments
Exploration and evaluation assets written off
Share based payments
Loss on revaluation of commodity derivatives and foreign exchange differences
Loss on scrapping of plant and equipment
Interest expense (unwinding of discount)
Changes in assets and liabilities
Increase/(decrease) in trade and other payables
Increase in other liabilities
Increase in prepaid borrowing costs
(Decrease)/increase in provisions
(Increase)/decrease in receivables
Increase in other receivables
Increase in inventories
Increase in prepayments
2021
$000
2020
$000
42,917
29,442
76,927
20,002
(5,472)
4,243
1,002
936
273
(18)
708
18,686
6,252
(2,483)
(869)
(11,896)
(8,604)
(4,669)
(1,292)
56,665
-
(3,887)
1,796
2,600
1,351
14,476
4,143
488
(1,194)
-
-
5,635
517
-
(1,447)
(54)
Net cash flows from operating activities
136,643
110,531
25. Auditors’ remuneration
The auditor of Aurelia Metals Limited is Ernst & Young.
Fees to Ernst & Young (Australia)
Fees for auditing the statutory financial report of the parent covering the Group
Fees for other services
Business combinations tax advisory and other tax advisory services performed for the consolidated entity
Business combinations financial advisory services performed for the consolidated entity
Tax compliance services performed for the consolidated entity
Total fees to Ernst & Young (Australia)
There were no other services provided by Ernst & Young other than as disclosed above.
2021
$000
328
482
429
31
1,270
2020
$000
556
95
-
78
729
144
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 26. Parent company information
The financial information for the parent entity, Aurelia Metals Limited has been prepared on the same basis as the consolidated financial
statements except for investment in subsidiaries.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total Shareholders' equity
Loss for the year
Total comprehensive loss for the year
26.1. Commitments
Commitments contracted for at reporting date but not recognised as liabilities are as follows:
Payable not later than 12 months
2021
$000
85,382
204,525
289,907
124,786
43,447
168,233
121,674
334,659
13,834
(226,819)
121,674
(58,013)
(60,505)
2020
$000
99,005
7,346
106,351
78,055
819
78,874
27,477
185,878
10,406
(168,807)
27,477
(1,340)
(1,340)
Parent
2021
$000
5,630
Parent
2020
$000
-
26.2. Contingent liabilities
The parent company has recognised a contingent liability of $4.25 million related to the contingent consideration component for the
purchase consideration for the acquisition of Dargues Mine (refer to Note 17 and note 29 for further detail).
27. Commitments and contingencies
27.1. Capital commitments
The commitments to be undertaken are as follows:
Payable not later than 12 months
2021
$000
31,792
2020
$000
1,299
The increase in the capital commitments is due to significant expenditure related to Federation project and mine sustaining
commitments for the Dargues Mine and the Peak Mine.
AURELIA METALS
145
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 27. Commitments and contingencies (continued)
27.2. Exploration and mining
The commitments to be undertaken are as follows:
Payable not later than 12 months
The commitments relate to exploration/mining lease minimum annual expenditures.
2021
$000
4,926
2020
$000
4,363
27.3. Guarantees
The Group has a $50 million Credit Facility as part of the Syndicated Facilities Agreement. Under the facility, Letters of Credit with
an aggregate value of $47.8 million (30 June 2020: $43.1 million) have been drawn consisting of environmental guarantees for the
Company’s three operating mine sites and its exploration tenements as well as rental bonds.
27.4. Contingent liabilities
The Group has recognised a contingent liability of $4.25 million related to the contingent consideration component for the purchase
consideration for the acquisition of the Dargues Mine (refer to Note 17 and note 29 for further detail).
28. Related party transactions
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other
parties unless otherwise stated. These have been disclosed on pages 104 and 105 in the Remuneration Report.
28.1. Transactions with other related parties
During the period, the following transactions with related parties occurred:
— Directors’ fees totalling $106,667 were paid to Lazy 7 Pty Ltd, a company of which Colin Johnstone is a Director (2020: Directors fees
$160,000, Executive fees for Acting CEO role for the period from 1 July 2019 to 25 November 2019, $284,000);
— Directors’ fees totalling $25,000 were paid to Kilorin Pty Ltd, a company of which Michael Menzies is a Director
(2020: Directors fees $100,000, Executive fees $57,000); and
— Directors’ fees totalling $106,427 were paid to Hollach Services Pty Ltd, a company of which Paul Harris is a Director
(2020: Directors fees $100,000, Executive fees $55,688).
28.2. Other related party transactions
There were no other related party transactions during the year (2020: nil).
146
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 29. Acquisition of Dargues Mine
Summary of acquisition
On 17 December 2020, the Group acquired 100% of the voting shares of Dargues Mine Pty Ltd from privately held company Diversified
Minerals Pty Ltd. The operation is located in South - Eastern NSW and consists of an underground mine and a newly constructed
processing plant which reached nameplate capacity in September 2020.
Provisional values were disclosed in the interim report as at 31 December 2020, and have been remeasured but still remain provisional at
30 June 2021. From the date of acquisition to 30 June 2021 Dargues Mine Pty Ltd contributed $32.3 million to group revenue and $14.8
million to Group profit. If the acquisition of Dargues Mine had taken place at the beginning of the year, Group revenue and profit before
tax for the 2021 year would have been $462.5 million and $84.3 million, respectively (based on the FY21 financial performance of the
acquired entities prior to acquisition).
Provisional value
31 December
2020
$000
Provisional value
30 June
2021
$000
Note
Cash at bank
Trade and other receivables
Inventories
Prepayments
Property, plant and equipment
Mine properties
Exploration assets
Right of use assets
Deferred Tax Asset
Total Assets
Trade payables and accruals
Provisions
Lease liabilities
Other financial liabilities
Total Liabilities
Net assets value
Purchased consideration transferred
Cash consideration, net of estimated net working capital
adjustment
Scrip consideration fair value
Contingent consideration at fair value
Total consideration
10
11
12
5
14
17
372
5,275
2,188
127
76,139
172,757
-
6,758
-
263,616
11,197
6,433
6,758
48,914
73,302
190,314
162,209
24,000
4,105
190,314
322
2,989
2,452
104
74,390
170,321
6,698
6,948
4,028
268,252
8,469
13,428
6,948
48,914
77,759
190,493
162,387
24,000
4,106
190,493
AURELIA METALS
147
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 29. Acquisition of Dargues Mine (continued)
The Contingent consideration requires the Group to issue up
to a maximum of $5 million in Aurelia ordinary shares based on
the addition of incremental JORC compliant Mineral Resources
discovered at Dargues up to 30 June 2022. The consideration
may be settled in shares. The fair value of the contingent
consideration at acquisition date is $4.1 million (fair value at 30
June 2021: $4.25 million) and has been recognised as a financial
liability (refer to note 17). A Net Working Capital Adjustment has
been recognised as a receivable at 30 June 2021 (refer to Note 7).
Total acquisition and integration costs of $20.0 million (consisting
of transaction related costs of $6.7 million and stamp duty
of $13.3 million) have been expensed and are included in the
corporate and administrative expenses in the Statement of Profit
or Loss and are part of operating cash flows in the Statement of
Cash flows.
Recognition and measurement
The acquisition method of accounting is used to account
for all business combinations. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a
business combination are, measured initially at their fair values at
the acquisition date. Acquisition-related costs are expensed
as incurred.
Contingent consideration is classified either as equity or a
financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value
recognised in profit or loss.
30. New Accounting policies and
interpretations
30.1. Changes in accounting policy and disclosures
30.1.1.
IFRIC agenda decision – Configuration or
Customisation Costs in a Cloud Computing
Arrangement
In April 2021, the IFRS Interpretations Committee (IFRIC)
published an agenda decision for configuration and
customisation costs incurred related to a Software as a Service
(SaaS) arrangement. The Group assessed the impact of the
decision which resulted in a change in its accounting policy in
respect of configuration and customization costs in implementing
SaaS arrangements.
SaaS arrangements are arrangements in which the Group
does not currently control the underlying software used in
the arrangement.
Accounting policy - Software-as-a-Service (SaaS)
arrangements
Where costs incurred to configure or customise SaaS
arrangements result in the creation of a resource which is
identifiable, and where the company has the power to obtain the
future economic benefits flowing from the underlying resource
and to restrict the access of others to those benefits, such costs
are recognised as a separate intangible software asset and
amortised over the useful life of the software on a straight-line
basis. The amortisation is reviewed at least at the end of each
reporting period and any changes are treated as changes in
accounting estimates.
Where costs incurred to configure or customise do not result in
the recognition of an intangible software asset, then those costs
that provide the Group with a distinct service (in addition to the
SaaS access) are now recognised as expenses when the supplier
provides the services. When such costs incurred do not provide
a distinct service, the costs are now recognised as expenses over
the duration of the SaaS contract. Previously some costs had
been capitalised and amortised over its useful life.
Impact of change in accounting policy
For the current year, costs amounting to $0.4 million that would
previously have been capitalised (under the previous policy)
were expensed resulting in the classification as cash flows from
operating activities in the Statement of Cash flows instead of
previous classification as cash flows from investing activities. The
costs capitalised in previous years were not material.
The rest of accounting policies adopted are consistent with those
followed in the preparation of the Group’s annual consolidated
financial statements for the year ended 30 June 2021, except for
the adoption of new standards applicable from 1 July 2020.
The following new accounting pronouncements became effective
in the current reporting period:
— amendments to AASB 7, AASB 9 and AASB 139 Interest Rate
Benchmark Reform;
— amendments to AASB 101 and AASB 108 Definition of
Material;
— conceptual Framework for Financial Reporting issued on 29
March 2018; and
— amendments to IFRS 16 COVID-19 Related Rent Concessions.
The adoption of these new accounting pronouncements has not
had a significant impact on the accounting policies, methods of
computation or presentation applied by
the Group.
148
ANNUAL REPORT 2021
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 30. New Accounting policies and interpretations (continued)
30.1.2. Amendments to AASB 3 Definition of a Business
The amendment to AASB 3 Business Combinations clarifies that to be considered a business, an integrated set of activities and assets
must include, at a minimum, an input and a substantive process that, together, significantly contribute to the ability to create output.
This amendment was considered in the accounting process for the business combination entered during the reporting period.
30.2. Accounting standards and interpretations issued but not yet effective
The following table sets out new Australian Accounting Standards and Interpretations that have been issued but are not yet mandatory
and which have not been early adopted by the Company for the annual reporting period ending 30 June 2021.
Title
Application
date of
standard
Application
date for
Group
Classification of Liabilities as Current or Non-current - Amendment to AASB 101
1 January 2023
1 July 2023
Reference to the Conceptual Framework – Amendments to AASB 3
1 January 2022
1 July 2022
Property, Plant and Equipment: Proceeds before Intended Use – Amendments to AASB 116
1 January 2022
1 July 2022
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to AASB 137
1 January 2022
1 July 2022
AIP AASB 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities
1 January 2022
1 July 2022
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to AASB 112
1 January 2023
1 July 2023
Definition of Accounting Estimates - Amendments to AASB 108
1 January 2023
1 July 2023
Disclosure of Accounting Policies - Amendments to AASB 101 and IFRS Practice Statement 2
1 January 2023
1 July 2023
The potential effect of the revised Standards/Interpretations on the Group’s financial statements has not yet been determined.
31. COVID-19 Outbreak
The COVID-19 outbreak was declared a pandemic by the World Health Organization in March 2020.
As a result of the outbreak, there is additional uncertainty in estimating the impact of the outbreaks near term and longer-term effects
or Government’s varying efforts to combat the outbreak and support businesses.
This being the case the value of certain assets and liabilities recorded in the Statement of Financial Position determined by reference to
fair or market values at 30 June 2021 may have changed by the date of this report.
These include the recoverable amount of quoted investments.
As at the date of this report, such implications remain ongoing and evolving.
32. Events after the reporting period
The following significant events occurred after 30 June 2021:
— On 23 July 2021, the Group released its Mineral Resource & Ore Reserves Statement as at 30 June 2021.
There have been no other matters or events that have occurred after 30 June 2021 that have significantly affected or may significantly
either the Group’s operations or results of those operations of the Group’s state of affairs.
AURELIA METALS
149
NOTES TO FINANCIAL STATEMENTS (CONTINUED) DIRECTORS’
DECLARATION
In accordance with a resolution of the Directors of Aurelia Metals Limited, I state that:
1.
In the opinion of the Directors:
a. The financial statements and notes of the consolidated entity are in accordance with the
Corporations Act 2001, including:
i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its
performance for the year ended on that date; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
b. the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
the notes; and
c.
there are reasonable grounds to believe that the Company will be able to pay its debts as when they become due
and payable.
2. This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ending 30 June 2021.
On behalf of the Board,
Susan Corlett
Interim Chairman
Daniel Clifford
Managing Director & CEO
24 August 2021
24 August 2021
150
ANNUAL REPORT 2021
AUDITOR’S REPORT
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent Auditor's Report to the Members of Aurelia Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Aurelia Metals Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2021, the consolidated statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, notes to the financial statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
(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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
AURELIA METALS
151
2
Carrying value of Mine Properties and Property, Plant and Equipment
Why significant
How our audit addressed the key audit matter
At 30 June 2021, the Group’s consolidated
statement of financial position included $347m
of Mine Properties and Property, Plant and
Equipment.
At the end of each reporting period, the Group
exercises judgement in determining whether
there is any indication of impairment of its
cash-generating units (CGUs) (refer to Note 11
of the financial statements for the Group’s
assessment of CGUs). If any such indicators
exist, the Group estimates the recoverable
amount of the non-current assets in the
relevant CGU.
The Group determined there were:
► no indicators of impairment for its Peak
CGU at 30 June 2021; and
►
indicators of impairment for the Hera and
Dargues CGUs at 30 June 2021 and as
such performed an impairment
assessment for these CGU.
Based on the impairment assessment
performed for the Hera and Dargues CGUs, no
impairment was identified at 30 June 2021.
Changes to key cashflow forecast assumptions,
such as commodity prices, forecast foreign
exchange rates and discount rate, or a failure
to identify impairment indicators could lead
the Group to incorrectly fail to test the
recoverable amount of the CGUs or incorrectly
measure the recoverable amount of a CGU at
balance date.
As a result, we considered the impairment
testing of the Group’s CGUs and the related
disclosures in the financial report to be a key
audit matter.
Our audit procedures included the following:
► Assessed whether the Group’s determination
of CGUs was in accordance with Australian
Accounting Standards.
► Considered the Group’s process for identifying
and considering external and internal
information which may be an indicator of
impairment and evaluated the completeness
of the factors identified.
► Compared the Group’s market capitalisation
relative to its net assets.
►
For those CGUs for which impairment
indicators were present:
► Assessed whether the valuation
methodology applied by the Group to
measure recoverable amount of a CGU
met the requirements of Australian
Accounting Standards.
► Tested the mathematical accuracy of the
impairment model.
►
Involving our valuation specialists,
assessed the key cashflow forecast
assumptions such as commodity price,
discount rates, inflation rates and
foreign exchange rates with reference to
external observable market data.
► Compared future production forecasts in
the impairment models to published
reserves and resources estimates and
understood the Group’s reserve
estimation processes, including
assessing the qualifications, competence
and objectivity of the Group’s internal
experts and the scope and
appropriateness of their work.
► Assessed the operating and capital
expenditure included in the impairment
models with reference to approved
budgets and forecasts and results of the
current and previous periods.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
152
ANNUAL REPORT 2021
AUDITOR’S REPORT (CONTINUED)
3
Why significant
How our audit addressed the key audit matter
► Performed sensitivity analyses and
evaluated the effect on the CGUs
recoverable amount of reasonably
possible changes in key forecast
assumptions.
► We agreed the carrying amounts subject
to impairment testing to the financial
statements and compared this amount to
the recoverable amount to confirm no
impairments should be recorded.
► Assessed the adequacy of the financial report
disclosures contained in Note 10 and Note 11
of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
AURELIA METALS
153
AUDITOR’S REPORT (CONTINUED)
4
Acquisition of Dargues Mine
Why significant
How our audit addressed the key audit matter
On 17 December 2020 the Group completed the
acquisition of Dargues Gold Mines Pty Ltd.
Our audit procedures included the following:
► Evaluated the qualifications, competence and
The accounting for the acquisition was
considered a key audit matter due to the
judgment required by the Group in measuring
the fair values of the following assets and
liabilities acquired and components of the
consideration which will be paid in the future:
► Property, plant and equipment.
► Mine properties.
► Rehabilitation provision.
► Third party royalty liability, and
► Deferred tax assets and liabilities.
Note 30 to the financial statements discloses the
acquisition accounting performed by the Group.
objectivity of the external valuation experts
used by the Group to determine the fair value of
mine properties and property plant and
equipment.
►
Involved our rehabilitation specialists in the
assessment of the fair value assigned to
rehabilitation provision as follows:
► Examined the mine closure plans to
understand the planned timing and
rehabilitation strategy.
► Assessed the cost estimates used in the
rehabilitation calculations with reference
to recent market data and historical mining
costs.
► Tested the mathematical accuracy of the
rehabilitation net present value
calculations and assessed the discount rate
applied.
►
►
Involved our valuation specialists in the
assessment of the valuation methodology
applied by the Group’s external experts to
Property, plant and equipment and Mine
Properties.
Involved our taxation specialists in the
assessment of the tax effects of the acquisition
accounting.
► Considered the classification of the financial
assets acquired and liabilities assumed and the
fair value on acquisition.
► Considered the assumptions used to calculate
future consideration payable, including
consistency with those used to calculate the fair
value of the identified assets.
► Assessed the adequacy of the disclosures in
relation to the acquisition.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
154
ANNUAL REPORT 2021
AUDITOR’S REPORT (CONTINUED)
5
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2021 Annual Report other than the financial report and our auditor’s report
thereon. We obtained the Directors’ Report that is to be included in the Annual Report, prior to the date
of this auditor’s report, and we expect to obtain the remaining sections of the Annual Report after the
date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
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 on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
AURELIA METALS
155
AUDITOR’S REPORT (CONTINUED)
6
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
► Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
►
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
156
ANNUAL REPORT 2021
AUDITOR’S REPORT (CONTINUED)
7
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 84 to 107 of the directors' report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Aurelia Metals Limited for the year ended 30 June 2021,
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.
Ernst & Young
Kellie McKenzie
Partner
Brisbane
24 August 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
AURELIA METALS
157
AUDITOR’S REPORT (CONTINUED)
UNAUDITED PERIODIC CORPORATE
REPORT VERIFICATION PROCEDURE
1. Purpose
4. Requirements
Aurelia Metal's process for verifying unaudited Periodic
Corporate Reports is as follows:
— each Periodic Corporate Report is prepared by, or under the
supervision of, subject-matter experts;
— material statements in each Periodic Corporate Report
are reviewed by the relevant functional heads so that the
functional head is satisfied that they are accurate, not
misleading, and meet Aurelia Metals' corporate policy and
regulatory requirements, and that the Periodic Corporate
Report contains no Material omissions;
— information about Aurelia Metals' mineral resources and
ore reserves are only included in a report if the information
complies with the ASX Listing Rules;
— information in a Periodic Corporate Report that relates
to financial projections, statements as to future financial
performance or changes to the policy or strategy of Aurelia
Metals (taken as a whole) must be approved by the Board;
and
— each draft Periodic Corporate Report is reviewed by the
Corporate Affairs Manager, the Chief Financial Officer &
company Secretary and the Managing Director before
its release.
5. Procedure status and review
This procedure was approved by the Aurelia Metal's Committee
on 21 June 2021.
The Audit Committee will review this Procedure as required
having regard to the changing circumstances of the Company.
We are committed to providing clear, concise, timely and effect
disclosure in our corporate reports. This Procedure sets out the
process undertaken by Aurelia Metals to verify the integrity of
any Periodic Corporate Report we release to the market that is
not audited or reviewed by an external auditor.
2. Scope
This Procedure applies to Aurelia Metals Limited and all its
subsidiaries (Aurelia Metals).
This Procedure applies to any Aurelia Metals periodic corporate
report, including:
— annual directors' report;
— annual half yearly financial statements;
— quarterly activity report;
— quarterly cash flow report;
— integrated report;
— sustainability report; and
— any similar periodic report prepared for the benefit of
investors,
provided that the respective report has not been subject to audit
or review by an external auditor (each a Periodic Corporate
Report)
This Procedure should be read in conjunction with Aurelia Metals'
Continuous Disclosure Policy and Shareholder Communications
Policy.
3. Responsibilities
Aurelia Metals' management has developed practices and
guidance material so that the Company can satisfy itself that
our Periodic Corporate Reports are accurate, balanced and
provide investors with appropriate information to make informed
investment decisions.
This Procedure is intended to ensure that all applicable laws,
regulations and company policies have been complied with,
and that appropriate approvals are obtained before a Periodic
Corporate Report is released to the Market.
Revision
Date
Change Description
1
21 June 2021
New Procedure — Endorsed by Audit Committee
158
ANNUAL REPORT 2021
COMPETENT PERSONS STATEMENTS
COMPETENT PERSONS STATEMENTS (CONTINUED)
Hera and Federation Mineral
Resource Estimates
Compilation of the drilling database, assay validation and
geological interpretations for the Hera and Federation Mineral
Resource Estimates were completed by Adam McKinnon, BSc
(Hons), PhD, MAusIMM, who is a full-time employee of Aurelia
Metals Limited. The Hera and Federation Mineral Resource
Estimates were prepared by Timothy O’Sullivan, BSc (Hons),
MAusIMM, who is a full-time employee of Aurelia Metals Limited.
Both Dr McKinnon and Mr O’Sullivan have 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 Competent Persons as defined
in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Dr
McKinnon and Mr O’Sullivan consent to the inclusion in this
report of the matters based on their information in the form and
context in which it appears.
Hera Ore Reserve Estimate
The Ore Reserve Estimate was compiled by Justin Woodward,
BEng (Mining), MAusIMM, who is a full-time employee of Aurelia
Metals Limited. Mr Woodward has sufficient experience which is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity for which he is undertaking to
qualify as Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Mr Woodward consents to the
inclusion in this report of the matters based on their information
in the form and context in which it appears.
Peak Mineral Resource Estimate
Compilation of the drilling database, assay validation and
geological interpretations for the Peak Mineral Resource
Estimate were completed by Chris Powell, BSc, MAusIMM,
who is a full-time employee of Peak Gold Mines Pty Ltd. The
Mineral Resource Estimate has been prepared by Mr Powell
who has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to
the activity which he is undertaking to qualify as Competent
Person as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Mr Powell consents to the inclusion in this report of
the matters based on their information in the form and context in
which it appears.
Peak Ore Reserve Estimate
The Ore Reserve Estimate was compiled by Justin Woodward,
BEng (Mining), MAusIMM, who is a full-time employee of Aurelia
Metals Limited. Mr Woodward has sufficient experience which is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity for which he is undertaking to
qualify as Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Mr Woodward consents to the
inclusion in this report of the matters based on their information
in the form and context in which it appears.
Dargues Mineral Resource Estimate
Compilation of the drilling database, assay validation and
geological interpretations for the Dargues Mineral Resource
Estimate was completed under the supervision of Timothy
O’Sullivan, BSc (Hons), MAusIMM, who is a full-time employee
of Aurelia Metals Limited. The Mineral Resource Estimate
for Dargues was prepared by Mr O’Sullivan. Mr O’Sullivan
has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to
the activity which he is undertaking to qualify as Competent
Persons as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Mr O’Sullivan consents to the inclusion in this report of
the matters based on their information in the form and context in
which it appears.
Dargues Ore Reserve Estimate
The Ore Reserve Estimate was compiled by Justin Woodward,
BEng (Mining), MAusIMM, who is a full-time employee of Aurelia
Metals Limited. Mr Woodward has sufficient experience which is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity for which he is undertaking to
qualify as Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Mr Woodward consents to the
inclusion in this report of the matters based on their information
in the form and context in which it appears.
Nymagee Mineral Resource Estimate
Compilation of the drilling database, assay validation and
geological interpretations for the Mineral Resource update
were completed by Adam McKinnon, BSc (Hons), PhD, MAusIMM,
who is a full time employee of Aurelia Metals Limited. The
Mineral Resource Estimate has been prepared by Arnold van
der Heyden, BSc, MAusIMM (CPGeo), MAIG, who is an employee
of H&S Consultants Pty Ltd. Both Dr McKinnon and Mr van der
Heyden have 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 Competent
Persons as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Dr McKinnon and Mr van der Heyden consent to the
inclusion in this report of the matters based on their information
in the form and context in which it appears.
AURELIA METALS
159
SHAREHOLDER INFORMATION
Additional ASX Information as at 17 September 2021
Twenty Largest Shareholders of Ordinary Shares
Holder Name
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Pty Limited
Diversified Minerals Pty Ltd
BNP Paribas Noms Pty Ltd
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