More annual reports from Aurelia Metals Limited:
2023 ReportANNUAL
REPORT
2022
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1
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FY22
HIGHLIGHTS
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ABOUT THIS REPORT
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This Annual Report is a summary of Aurelia and
our subsidiaries’ operations, activities, and financial
position as at 30 June 2022 – financial year (FY) 2022.
Where relevant, footnotes throughout this Report explain
reasoning behind any reinstatement of information/data.
We are committed to reducing the environmental impact associated with
the production of this Annual Report. Physical Annual Reports are only
posted to shareholders who have elected to receive a printed copy.
This and previous Annual Reports are available on the Company’s website,
see the back cover for Company contact details.
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ANNUAL REPORT 2022
The conveyor at our Peak Mine
ANNUAL REPORT 2022www 8%
INCREASE TO
EBITDA
$166.5M
(FY21: $154.1M)
FEDERATION
CIVIL AND BOX
CUT ACTIVITIES
90%
COMPLETE
SUCCESFUL
EXPLORATION RESULTS
PROVIDE UPSIDE FOR
ASSET EXTENSIONS
45%
INCREASE IN
GREAT COBAR CU
RESOURCE TO
7.7Mt
DEVELOPMENT
CONSENT RECEIVED
FOR GREAT COBAR FROM
NSW GOVERNMENT
The conveyor at our Peak Mine
Chairman’s Letter
Managing Director and Chief Executive Officer's Report
We Are Aurelia
Our Profile
Our Portfolio
Our Vision
Our Values
Our Strategy
Our FY22 Performance and Outlook
Our Mines
Peak Mine
Hera-Federation Complex
Dargues Mine
Our Exploration Prospects
Sustainability
Our Approach to Sustainability
Governance
Economic Contribution
People Performance
Health and Safety Performance
Community Performance
Environmental Performance
GRI Content Index
Competent Persons Statement and Mineral Resource
and Ore Reserve Statement
Financial Statements
Remuneration Report (Audited)
Auditors Independence Declaration
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidate Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to Financial Statements
Director’s Declaration
Auditor's Report
Unaudited Periodic Corporate Report Verification Procedure
Shareholder Information
Schedule of Tenement Interests
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120
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AURELIA METALS
1
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www CHAIRMAN'S LETTER
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Dear Shareholders
2022 was an exceptionally challenging year for our
Company.
As I reflect on my first year as your Chairman, while it was not
the year I had hoped for, there were still facets to celebrate:
Global markets, our workforce and communities were
again impacted by COVID-19, while Australian households
and businesses battled with levels of inflation not seen
for decades. This was compounded by a rapidly escalating
cost environment, supply chain challenges and an
exceptionally tight labour market.
The Board and Management of Aurelia recognise that our
performance this year was not acceptable. Our operating
performance was well below expectations, with metals
production and lower than expected gold grades at our Peak
and Dargues mines delivering disappointing cashflows
and revenues. This resulted in a significant A$95 million
(post tax) impairment at Dargues, in recognition of
reduced average gold grades and overall reduction in
mining inventory.
The Board is presently undertaking a range of programs
to address improvements in operational excellence, as well
as enhance plant efficiencies, operating costs, and capital
management. This work is being carried out by internal and
recently introduced external expertise. The Board is actively
analysing cost effective options to fund and optimise the
development of the outstanding Federation mine with our
financiers and strategic partners.
The recently completed Feasibility Study for Federation
has highlighted the attractiveness of this quality asset, with
potential for high rates of return and rapid project payback.
Our work is concentrating on appropriate cost effective
financing of the development, whilst minimising our exposure
to the challenges of inflation and supply chain delivery.
The Company is in a unique position in having developed
infrastructure and mill capacity within the Cobar region
which coincides with our exciting exploration acreage.
We will continue to update our shareholders in the coming
months and at our forthcoming AGM on these strategic
initiatives, in order to restore confidence in the Company’s
delivery of shareholder value.
We are extremely excited by the potential of our Federation
and Great Cobar Projects. These developments will
progressively move the Company to a base metals focus over
the next few years, growing Aurelia into one of the few
diversified mid-cap base metals producers.
EBITDA continued its five-year upward trend with an 8%
increase to A$166.5M (FY21: $154.1M).
In May we received Development Consent for the New
Cobar Complex, including the Great Cobar Project, which
will secure a further five-year life extension at our
Peak Mine.
At year end, civil works and boxcut activities for the high-
grade Federation Project were 90% complete.
The Company’s successful exploration program continued
to deliver with some of the best results seen to date at our
Federation, Great Cobar and Kairos deposits.
These results saw the Company’s Mineral Resources grow
5% to 29Mt with a 45% increase in Great Cobar copper to
7.7Mt underpinning Peak Mine’s future as a material
copper producer.
We maintained our strong balance sheet with A$76.7M
cash in the bank, as at 30 June 2022, after repayment of A
$38.3M in debt and cash backing of environmental bonds.
Amidst the hard work to deliver in a challenging environment,
I am most proud of our efforts to remain true to our
sustainable foundation.
Our Total Recordable Injury Frequency Rate (TRIFR) of
8.75 continued a year-on-year reduction, and our safety
lead indicator program compliance exceeded 85%. We also
introduced our Fatal Hazard Standard, supported by Critical
Control Verifications, to test its effective implementation
across our sites.
Aurelia recognises superior performance can only be
achieved through our people, and high-calibre employees are
seeking workplaces that engage, energise and include them.
In FY22, our efforts turned to ensuring we are providing
a safe and inclusive environment where employees from
all backgrounds can thrive. To this end, we established a
permanent Diversity and Inclusion (D&I) Working Group
and a three-year D&I Roadmap. Year One chartered our
efforts to set targets for female workforce participation
rates, as well as develop supportive frameworks, standards,
training and actions related to an inclusive culture and
employee wellbeing. With acknowledgement the sector
can do more to address bullying and harassment, including
sexual harassment, our work in this space will include a risk
assessment of psycho-social workplace hazards in FY23.
ANNUAL REPORT 2022
2
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The fully consented Great Cobar Project is equally
impressive, and at 2.8% CuEq, is perhaps one of the highest
grade copper deposits in the Country. Great Cobar ore will be
timed to ramp up when it can compete with the other very-
high grade ore sources at the Peak Mill.
With returns from our organic growth portfolio now clearly in
sight and the need to ensure we have the financial capacity
to support this growth the Board has chosen not to pay
a dividend this year and continue towards achieving first
cashflows from Federation followed by Great Cobar.
On behalf of my fellow Directors, I would also like to take this
time to thank Lawrie Conway who retired as Non-Executive
Director at the end of the year. Mr Conway was appointed
to the Board in June 2017 and contributed enormously to
Aurelia as steward of the Audit Committee. We wish him
all the best in his future endeavours. We would also like to
warmly welcome Bruce Cox to the Board. As a seasoned
industry executive and Non-Executive Director, Bruce is
a fantastic appointment and will complement our Board’s
existing skillset.
I would also like to thank the rest of the Board, the
management team and all our employees for their personal
contribution during what has been another difficult year,
and for continuing to step up and support the Company’s
long-term prosperity.
Finally, I would like to acknowledge you, our valued
shareholders, for your support. While there are many
stakeholders, ultimately Aurelia belongs to you. I would
like to reiterate the Board and Management’s laser focus
on improving company performance and value in the
coming year.
Peter Botten, AC, CBE
Non-Executive Chairman
Community consultation and engagement programs
were maintained through the year, despite the challenges
of COVID-19. Our continuing efforts to foster trusted
partnerships with our Traditional Owners and First Nations
stakeholders led to discussions about the name of the
Federation Project. As a result, we are proud to advise Aurelia
will commence a consultation process with these groups to
rename the mine with an Indigenous identifier.
In March, a significant rain event at our Dargues Mine
forced production to stop to preserve the integrity of the
tailings storage facility. In line with our Values, expectations
of shareholders and interests of our communities,
Board members travelled to Dargues to inspect the dam.
While there, we ensured the appropriate measures to mitigate
any risk, and met with the community. I am pleased to say
early action by our site operational teams were successful
and production commenced a few days later.
Aurelia recognises the ongoing impacts of human activities
on climate change and mining Company’s like ours need to
act quickly and decisively to reduce our carbon footprint. As a
result, this year we established a baseline for climate-related
disclosures and evaluated opportunities to reduce our carbon
emissions. I look forward to seeing this program of work pick
up pace in FY23 and beyond.
During the year we continued to pursue our enviable growth
prospects with two compelling projects at very high-grade,
Federation and Great Cobar. Both will anchor our future as
a material base metals producer with coveted copper and
zinc – metals that are the foundation of society’s progression
and transition to a low carbon economy. The change in our
commodity mix is occurring at the perfect time, with our
shareholders set to benefit from exposure to metals with a
strong long term demand forecast.
At year end, the Federation Project was in excellent shape,
with the exploration decline awaiting first blast. Regulatory
approvals were also well progressed, with public exhibition of
the Environmental Impact Statement receiving no negative
feedback – a symbol of Hera Mine’s exemplary efforts to
establish trusted partnerships with the community.
Exploration at Federation during the year uncovered some
spectacular results growing geological confidence in the
orebody as one of the highest grade deposits in Australia
at 16.7% ZnEq. With the orebody remaining open in every
direction, we expect material upside with further drilling from
underground. We now turn our efforts to finding the right
funding solution to take Federation forward into development
of what will become Aurelia’s most valuable mine.
AURELIA METALS
3
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MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER'S REPORT
—
Dear Shareholders
A turbulent economic setting, severe weather events and the
ongoing pandemic created a complex operating environment
in FY22. Amongst this uncertain environment and with the
challenges at our operations, the outcomes for the year were
not what we either expect or accept in the business.
In this Company, we own our results. Action during Q4 FY22
to optimise operating strategies, maximise returns from our
assets, and protect shareholder value has begun to improve
outcomes. I am confident the hard work occurring across
our business will create a strong platform for the delivery of
two transformational projects, Federation followed by Great
Cobar, in the near term.
Adapting our sustainability framework to respond to
global challenges
In FY22, we continued to operate sustainably. The year-on-
year reduction in our Total Recordable Injury Frequency rate
(9.1 in FY21 to 8.8 in FY22) was modest and our commitment
and action to keep our people and communities safe through
comprehensive COVID-19 site management plans was
outstanding. Our safety performance together with continued
strong environmental metrics are hallmarks of our sustained
achievement in these critical areas.
Our approach to sustainability continues to mature. In FY22
our efforts pivoted to culture, employee engagement,
diversity, climate change, as well as the psychological
safety of our workforce. We engaged Willis Towers Watson
to conduct our first employee engagement survey and were
pleased with the 75% response rate. The data will provide
a benchmark to measure the initiatives we will put in place
to address the survey outcomes to keep improving our
workplace to attract and retain talent in a tight labour market.
A year of two halves
Operationally, FY22 was a year of two halves.
The first half saw strong physical and financial performance
with the second challenged by site related performance
shortfalls and macro-economic conditions.
While our total processed tonnes rose 6% year-on-year, full-
year production at both Peak and Hera was 60-70kt below
original projections. Softer than planned production volumes
drove a 10% reduction in our operating cash flow to A$167
million in FY22, and a higher development load saw
sustaining capital increase to A$70.9 million.
In particular, lower-than-expected grades at the Dargues
Gold Mine were experienced and confirmed by an
underground drilling program. The financial impacts were
assessed and as a result, the Company declared a A$95M
post-tax impairment charge with our full year results. I clearly
recognise that this outcome has cut deeply for our valued
shareholders and for every one of the Aurelia team. We are
working hard to reset the operation, and while grades are
lower than our original investment thesis, all other physical
measures were met or exceeded.
At year end, the Group had achieved gross gold-equivalent
metal production of 198,000oz, a 7% increase over FY21,
driven by strong base metal grades and prices (with
by-product revenues from Peak and Hera up 29% to
A$210 million). This highlights the value of our commodity
mix and our ability to remain buoyant in turbulent markets.
Our underlying EBITDA of A$166.5 million was up 15%
(FY21: A$154.1 million) predominantly driven by higher
key commodity price realisations.
At year end, there was A$76.7 million of available cash.
Work underway to optimise the assets and build resilience
The Aurelia team has been working hard to structure our
assets to improve resilience in a volatile market and allow
for a lower capital and lower risk integration of our Cobar
development projects.
A program of initiatives has been implemented this year
to reduce costs, create value in the margin and return
operational performance to what is expected.
At Peak, we have scaled back targeted throughput to
550ktpa and are focusing on higher value ore extraction,
while deferring lower value tonnes to more positive market
conditions. This approach will reduce our operating costs.
The transition underway at Peak to owner-mining will also
better align operations with business priorities and allow
Aurelia greater control over production outcomes.
At Hera, we are returning to a higher production rate from the
mine with the concurrent availability of three active stoping
areas to improve ore delivery to the process plant. The
increased tonnage and improvement in underground loader
availability and reduced rehabilitation for ground support are
also forecast to result in a reduction in operating costs from
their FY22 level.
4
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ANNUAL REPORT 2022
Both deposits also remain open and have significant
potential for further growth in Mineral Resources and Ore
Reserves. Further drilling programs are planned for both from
underground positions when development has commenced.
Looking ahead to FY23, we remain highly focused on:
ensuring our operating performance and optimised mine
and milling solutions underpin our financial results
pursuing the near-term growth and funding of our Cobar
development portfolio
continuing to deliver extended asset lives via our
successful ongoing exploration efforts.
With the whole Aurelia team driving towards these
outcomes, I want to thank every employee and contract
partner for their contribution to our Company throughout
the year. Their drive, courage and dedication to our business
in a difficult year was unwavering and greatly appreciated.
Dan Clifford
Managing Director and Chief Executive Officer
At Dargues, we are increasing capacity with a modification
to our Development Consent to allow a 17% increase in
throughput with minimal capital requirements. The granting
of the modification will be a hallmark of the team’s efforts to
foster a strong relationship with the local community with a
marked improvement in relations since Aurelia’s acquisition
of the mine. Continued infill drilling and geological modelling
is also intended to drive greater predictability in production.
Pursuing value through two compelling,
high-grade projects
This year, our determination to realise the organic growth
in our portfolio was evidenced by the significant progress
achieved at Federation and Great Cobar.
It was an exciting milestone for our Company in March,
when we broke ground at our Federation Project. By year
end, 90% of the civil and boxcut activities were complete
with the Company ready to take the first blast at the portal
for development of the exploration decline.
Equally as impressive were this year’s outstanding results
from extensional drilling at Federation, which continue
to strengthen the initial platform of a 4.0Mt Production
Target over an 8-year mine life. Significant work went into
the Federation Feasibility Study during the year resulting
in very strong return metrics being recently released to
the market and funding being a key priority for FY23. With
some of the highest grades achieved for a polymetallic
deposit in Australia, Federation is set to become the most
valuable asset in Aurelia’s portfolio and a significant driver
of shareholder value.
In May, we received development consent for the 7.7Mt Great
Cobar project, which is located only 7kms from our existing
Peak plant. Great Cobar is set to secure Peak’s future as a
material, high grade copper producer. The five year extension
delivered by planned development of this deposit is also set
to secure a strong future for our workforce at Peak and allow
us to continue to strongly support the local Cobar community.
With both projects proximate to existing infrastructure
and containing high grade, Federation and Great Cobar
represent compelling value to our shareholders and reweight
the portfolio to foundational base metals with a precious
metals hedge.
5
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AURELIA METALS WE ARE
AURELIA
—
The underground mine portal at our Dargues Mine
OUR PROFILE
—
Proudly Australian, Aurelia Metals
Limited (‘Aurelia’, ‘the Company’)
is a growing base metals and gold
mining and exploration company.
We are proud to be part of an industry
that continues to enrich Australia
165 years after the first gold rush,
as well as mining the future-facing
metals that are the foundation of a
low carbon society.
We exist to create value for our
shareholders, communities, and
everyone who depend on us to
deliver a better tomorrow.
We own and operate three
underground mines and processing
facilities in New South Wales (NSW)
and have an enviable portfolio of
organic growth prospects in the region.
Our Peak Mine comprises several
underground polymetallic (copper,
gold, zinc, lead, silver) deposits and
an 800 thousand tonnes per annum
(ktpa) processing plant. Peak is located
in the northern Cobar Basin in western
NSW, a short distance south of the
town of Cobar.
The Hera Mine encompasses a
polymetallic (gold, zinc, lead and
silver) underground mining operation
and 455ktpa processing plant and is
located approximately 100 kilometres
(km) south-east of Cobar.
Our Dargues Mine is a gold mining and
milling operation located in the NSW
Southern Tablelands, approximately
60 km south-east of Canberra.
The facility includes an underground
mine, processing plant and associated
surface facilities.
Our highly prospective tenement
holdings have enabled us to advance
exploration and evaluation activities,
into two pre-eminent near-term
development projects. The Federation
Project (zinc, lead, gold, copper,
and silver), located 10km south of
the Hera Mine is one of the most
exciting discoveries in the Cobar
Basin in decades. The Great Cobar
(copper and gold) Project located at
our Peak Mine recently received NSW
Government regulatory approval
and represents one of the highest
grade copper development projects
in Australia.
From exploration through to operations
and into closure, we are committed to
minimising the environmental impacts
of our operations.
Aurelia is listed on the Australian
Securities Exchange (ASX: AMI)
and is headquartered in Brisbane
(Queensland, Australia).
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OUR PORTFOLIO
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Cobar
Great Cobar
BARRIER HIGHWAY
Peak
Mine
Canbelego
C
A
N
B
E
L
E
G
O
R
O
A
D
Y
A
W
N
A
M
D
K
I
LEGEND
Processing Facility
Operating Mine
Development Target
Tenement Holding
Road
Locality
PRIORY TANK ROAD
Nymagee
D
A
O
D R
O
O
W
GLEN
Hera
B
A
L
O
W
R
A
R
O
A
D
Federation
Hera-Federation
Complex
NSW
Cobar
Nymagee
Peak Mine
K
I
N
G
S
H
I
G
H
W
A
Y
D
A ROA
RIG
NER
BOMBAY ROAD
Braidwood
L
T
L I T
E R I V E R R O A D
A
R
A
L
U
E
N
R
O
A
D
KINGS HIGHWAY
D
A
O
A R
M
O
O
C
D
A
O
R
K
E
E
R
C
S
R
O
J
A
M
LEGEND
Processing Facility
Operating Mine
Development Target
Tenement Holding
Road
Locality
Dargues Mine
Majors Creek
Araluen
Sydney
Canberra
Dargues Mine
AURELIA METALS
7
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OUR VISION
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Our vision is to create exceptional value through our people
and a portfolio of base metal and gold assets.
We exist to maximise returns from our producing assets while
advancing exploration and development projects that have the
potential to sustain and grow the business in the long-term.
Fundamental to this is our commitment to being a trusted,
valued, and sustainable mine operator.
An employee looking out at our Dargues Mining processing plant and site offices
OUR VALUES
—
At the heart of our business are
our Values: Integrity, Certainty,
Courage, and Performance.
Our Values are our greatest
opportunity to exemplify the respect
we have for the work we do and the
stakeholders we serve.
INTEGRITY
We do what’s right
CERTAINTY
We plan and
execute well
VALUES
PERFORMANCE
We own the result
COURAGE
We step up
8
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ANNUAL REPORT 2022
OUR STRATEGY
—
PURSUE
OPTIMISE
ADAPT
Excellence through our
people and performance
Diversification through
3-5 projects
A trusted, sustainable
and beneficial presence
in our regions
Long term value
and returns growth
Margin with operating
Projects drive an organic,
discipline
Leverage asset base as
a platform for growth
Returns by extending mine
lives beyond typical cycles
Direct $ to the
highest return
upcoming shift to foundational
base metals, retaining a
precious metals hedge
Dominant ground position with
>120 exploration prospects in a
highly prospective region
Actively participate in
responses to global
business challenges
Growing into a mid-tier miner
Our Company is determined to deliver long-term value
and returns to our shareholders as we build a diverse asset
portfolio, focused on the critical minerals the world needs for
the future.
We are driving margins in our existing businesses via
operating discipline and delivering mine life extensions
through our successful exploration programs. Our aim is
to operate robust assets that generate strong cash flow
throughout the commodity cycle.
Our focus on enhancing margins and extending mine lives
across our existing portfolio further augments the value of
our incumbent infrastructure.
Shareholders are provided with a commodity mix dominated
by base metals, across zinc, copper and lead, and a natural
hedge of gold and silver – the safe haven metals in tough
economic times. Our commodity mix will evolve over time.
Development of the Federation deposit will materially
increase our production of zinc and, with the approval to mine
the Great Cobar deposit, copper will become a significant
contributor to our commodity mix.
Financial discipline underpins our plans to grow. In our
business, we apply rigour and tension between directing
capital to organic or inorganic growth. We make these
decisions based on what will deliver the highest returns to
our shareholders with an eye to the future and the existing
macro-economic environment.
Our ambition to grow is matched by an unwavering
commitment to do so sustainably. We recognise success will
only be achieved if we are a trusted and beneficial presence
in the areas where we operate. Equally important is ensuring
the people who call our workplace theirs are engaged,
energised and included in way that allows them to deliver
superior performance.
AURELIA METALS
9
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OUR FY22 PERFORMANCE AND OUTLOOK
—
GROUP FINANCIAL MEASURE*
UNIT
FY21
Revenue
EBITDA - statutory
EBITDA - underlying
EBITDA margin
Net Profit/(Loss) After Tax - statutory
Net Profit/(Loss) After Tax - underlying
Basic earnings per share
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities and FX
Group Cash Flow
A$M
A$M
A$M
%
A$M
A$M
Acps
A$M
A$M
A$M
A$M
416.5
154.1
168.6
37
42.9
57.4
3.97
136.6
(285.4)
144.9
(3.9)
FY22
438.8
166.5
142.9
38
(81.7)
(1.3)
(6.61)
154.1
(131.5)
(20.2)
2.5
% CHANGE
5
8
(15)
3
(290)
(102)
(266)
13
(54)
(114)
164
10
10
—
—
ANNUAL REPORT 2022
Drilling and exploration activities at our Federation deposit
ANNUAL REPORT 2022 OUR FY22 PERFORMANCE AND OUTLOOK
—
KEY METRIC*
PRODUCTION VOLUME
Gold
Silver - contained metal
Copper - contained metal
Lead - contained metal
Zinc - contained metal
AVERAGE PRICES ACHIEVED
Gold
Silver
Copper
Lead
Zinc
UNIT
FY21
FY22
% CHANGE
oz
oz
t
t
t
A$/oz
A$/oz
A$/t
A$/t
A$/t
103,634
98,461
692,133
788,840
4,720
25,894
25,059
2,476
34
10,927
2,676
3,613
1,337
3,726
24,266
30,067
2,500
32
13,124
3,032
4,692
1,707
(5)
14
(21)
(6)
20
1
(6)
20
13
30
28
ALL IN SUSTAINING COST
A$/ozW
* Excerpt from pages 4 and 5 of the ‘2022 Full Year Results Presentation’ available on Aurelia Metal’s (AMI) ‘Market announcements’ page on the ASX.
Copper, zinc, lead and silver production is payable metal-in-concentrate volumes (as disclosed in Aurelia's
quarterly activities reports) and is converted to gold equivalent volumes using realised prices achieved by
Aurelia during the specific year (as disclosed in Aurelia's quarterly activities reports) and via the following
formula: Payable Cu/Zn/Pb/Ag (koz Au eq) = (Payable Cu produced (kt)* Cu price realised (A$/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$/oz) / Au price (A$/oz)
Group AISC is the total of on-site mining, processing and administrative costs,
inventory adjustments, royalties, sustaining capital, corporate general and
administration expense, transport, less by-product credits, divided by gold sold.
By-product credits include silver, lead, zinc and copper sales forecast over the
outlook period.
Final AISC results will depend on the actual sales volumes, actual operating costs
and actual prices of base metals received over the outlook period.
It should be noted that this outlook is indicative only and subject to change in
response to prevailing and/or expected operating and market conditions.
Employees look out over the process plant at our Peak Mine
11
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OUR FY22 PERFORMANCE AND OUTLOOK
—
85
98
104
55.7
59.7
53.5
GOLD
(koz)
COPPER
(kt cont.)
ZINC
(kt cont.)
LEAD
(kt cont.)
104
98
85
4.7
3.7
2.5
25.1
30.1
29
25.9
FY21
24.3
FY22
22
FY23e
12
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ANNUAL REPORT 2022
OUR FY22 PERFORMANCE AND OUTLOOK
—
Central to our business plan is a philosophy of continuous improvement that builds upon the primary pillars of:
Health
Safety
Environment
Community
People and organisation
Operations
Growth
Financial outcomes
GROUP GOLD EQUIVALENT PRODUCTION*
—
200
175
150
125
100
75
50
25
0
FY16
FY17
FY18
FY19
FY20
FY21
FY22
Gold
Payable Cu / Zn / Pb / Ag (koz Au eq)
(6,351)
* Excerpt from page 4 of the ‘2022 Full Year Results Presentation’ available on
Aurelia Metal’s (AMI) ‘Market announcements’ page on the ASX.
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 volumes using realised prices achieved by Aurelia during the specific
year (as discl osed 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$/oz)
13
—
AURELIA METALS
OUR MINES
—
An aerial view of the process plant, shaft headframe
and site buildings at our Peak Mine
14
—
ANNUAL REPORT 2022
Peak Mine
Hera Federation Complex
Dargues Mine
16
18
20
AURELIA METALS
15
15
—
—
AURELIA METALS PEAK MINE
—
An aerial view of the Peak Mine process plant at dusk
The Peak Mine is located
in the northern Cobar Basin
in central-west NSW.
with high grade ore from several active
underground mining areas that use
open stope mining with backfill.
We completed the purchase of Peak
from Toronto- listed miner, New Gold
in April 2018. Through accelerated
mining of the high-grade Chronos
gold deposit, investment payback on
the A$59 million purchase price was
achieved within four months.
The operation comprises two separate
polymetallic underground mines and
an 800ktpa base metals and gold
processing plant. The plant is supplied
The Peak Mine has benefited from
a number of Aurelia’s growth and
efficiency projects. These include
an upgrade of the process plant to
increase lead/zinc metal production
and maximise base metal revenue,
progressive lifting of underground
development rates and mine
throughput, accelerated access
to the high-grade Kairos deposit
and direct control of underground
mining activities.
Drilling at Peak Mines is currently
focused on further extensions of the
exiting orebodies, further delineating
the Great Cobar, Kairos and Peak North
deposits, and testing of the potential
high-value Peak line-of-lode targets.
The expanded processing facility
enables the treatment of different
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.
16
—
ANNUAL REPORT 2022
In April 2022, we received
development consent for the New
Cobar complex, which includes Great
Cobar, from the NSW Department
of Planning and Environment.
GREAT COBAR
—
We commenced a surface drilling
campaign at the Great Cobar
copper deposit in late September
2020, with the aim of building
confidence in the Indicated and
Inferred portions of the Mineral
Resource Estimate (MRE) and
to test extensional targets.
The infill portion of the drill
program delivered encouraging
high grade base metal results,
while the drilling activities in areas
up and down plunge of the MRE
intercepted significant copper-gold
and zinc-lead-silver mineralisation.
This program also confirmed that
mineralisation extends more than
100 metres (m) below the current MRE,
highlighting the potential for growth in
the copper MRE at depth.
We initiated a Prefeasibility Study
(PFS) to examine future mining
scenarios at Great Cobar. The PFS
findings justify an economically viable
and relatively low risk brownfield mine
development that will provide baseload
feed to the Peak process plant for
at least five years. It will also enable
establishment of underground drill
platforms to further unlock the upside
potential of our copper-rich Great
Cobar deposit.
Following completion of the PFS, the
Peak Mine’s Ore Reserve Estimate
increased by 19% after allowing for the
mining depletion to 31 December 2021
and including the Great Cobar deposit.
This outcome continued a consistent
trend of Ore Reserve growth from our
Cobar Basin assets.
PEAK MINE FY22 PRODUCTION PERFORMANCE
—
METAL
• Gold
• Silver
• Copper
• Lead
• Zinc in
UNIT
FY21 PRODUCTION
FY22 PRODUCTION
oz
oz
t
t
tt
57,080
333,551
4,720
15,829
10,791
40,322
263,546
3,726
13,441
12,273
AURELIA METALS
17
17
—
—
AURELIA METALS HERA
FEDERATION
COMPLEX
—
An aerial view of the Hera Mine process plant at night
Our Hera Mine is a polymetallic
underground mining operation,
located approximately 100km
south-east of Cobar, NSW.
We purchased Hera from CBH
Resources in September 2009 as
an undeveloped gold-lead-zinc-
silver deposit. Following extensive
geological drilling and evaluation
activities, the Hera Definitive
Feasibility Study was completed
in 2011. Development approval was
received from the NSW Government
in July 2012. Project construction
commenced in January 2013 with first
gold delivered in September 2014
and commercial production achieved
in April 2015.
The Hera mineral deposits are
extracted using bench stoping with the
stopes backfilled with waste rock fill.
Ore is trucked to surface where it is
processed through a 455ktpa plant
using gravity gold, flotation, and leach
circuits to produce gold-silver doré
and a bulk lead-zinc concentrate.
Underground infill and extensional
drilling has identified mineralisation
in the up-dip areas above the
existing stoping areas at the Hays
North lens. Ore from this area will
sustain production from the Hera Mine
into 2024.
Hera’s tenement area is underexplored
with a pipeline of exploration targets
within 15km of the mine complex.
We have recently focused on
accelerated infill drilling, evaluation
and enabling works to develop the
Federation deposit that is located
approximately 10 km south of our
Hera Mine.
The Federation Project has the
potential to leverage the established
infrastructure at our Hera Mine.
Given its exceptional grade tenor,
we consider Federation to be one
of the most significant regional
discoveries in decades.
18
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ANNUAL REPORT 2022
THE FEDERATION PROJECT
—
Concurrently, we completed a Scoping
Study in March 2021 which examined
possible project development
pathways. An Environmental Impact
Statement (EIS) for full-scale
production from the Federation Project
was submitted in early 2022 and a
Feasibility Study (FS) based on the
preferred development pathway was
completed mid-2022. Aurelia also
expanded the Hera accommodation
camp in late 2021 to accommodate the
additional workforce required for initial
project activities and commenced
surface civil works in March 2022 for
an underground exploration decline.
The Federation deposit is located
approximately 10km south of our
existing Hera Mine and is a base
and precious metal deposit that
boasts high-grade zinc, lead,
and gold mineralisation.
Discovered in April 2019, we have
moved swiftly to progress exploration
and evaluation of the deposit.
We released a MRE for the Federation
Project in February 2021 and
continued an extensive diamond
drilling campaign, results of which
underpinned a further MRE update
in July 2021.
In FY22 we completed an accelerated
drilling program to upgrade the MRE
confidence from Inferred to Indicated;
this program underpinned Federation’s
maiden Ore Reserve estimate.
HERA MINE FY22 PRODUCTION PERFORMANCE
—
METAL
• Gold
• Silver
• Lead
• Zinc
UNIT
FY21 PRODUCTION
FY22 PRODUCTION
oz
oz
t
t
31,369
358,581
10,064
14,268
16,478
525,294
10,824
17,794
AURELIA METALS
19
19
—
—
AURELIA METALS
DARGUES MINE
—
An aerial view of our Dargues Mine
Our Dargues Mine is a gold
mining and milling operation
located in the NSW Southern
Tablelands region, approximately
60 km south-east of Canberra
and a short distance from the
heritage-listed town of Braidwood.
We took ownership of the Dargues
Mine and regional exploration
tenements on 17 December 2020
through the acquisition of all shares in
Dargues Mine Pty Ltd from Diversified
Minerals Pty Ltd.
The Dargues Mine was successfully
integrated into our production portfolio
and work is ongoing to extend the
known deposit and test multiple near
mine exploration targets.
The development and construction
of our Dargues Mine was completed
prior to our acquisition, producing
its first gold concentrate in
June 2020. The processing plant
reached its nameplate annualised
capacity of approximately 355kt in
September 2020.
Ore is mined using conventional
bottom-up longhole stoping and
trucked from the underground mine
to a surface stockpile adjacent to
the process plant. Stope voids are
backfilled with cemented hydraulic
fill or waste rock. Mine access is via a
boxcut and decline from the surface.
Along with ongoing Mineral Resource
extension and exploration activities,
we continue to optimise mine
production with the aim of extending
mine life and enabling higher annual
production rates.
20
—
ANNUAL REPORT 2022
DARGUES MINE FY22 PRODUCTION PERFORMANCE
—
PRODUCTION
UNIT
7 DECEMBER 2020 TO 30 JUNE 2021
FY22 PRODUCTION
Ore processed
Gold grade
Gold recovery
Gold production
t
g/t
%
oz
170,804
2.93
93.5
15,186
365,243
3.7
95.4
41,661
AURELIA METALS
AURELIA METALS
21
21
21
—
—
—
AURELIA METALS OUR
EXPLORATION
PROSPECTS
—
(Left to right) Environment and Social Responsibility
Officer, Laura Barnes with Senior Legal Counsel,
Rochelle Carey at our Peak Mine
to our extensive regional datasets and
allow efficient prioritisation of future
regional exploration activities.
Also in the June quarter, we conducted
induced polarisation (IP) surveys at
the Piney, Vaucluse, Lyell and Ironbark
prospects in the Nymagee district.
Encouraging chargeability anomalies
were defined at each project area and
future drill testing will be considered.
At Aurelia, our growth objective is
to generate future value and long-
term returns for our stakeholders
and shareholders. We believe we
hold one of the most geologically
prospective ground positions in
Australia and have the expertise
and capability to discover and
convert this endowment to unlock
exceptional value.
Targeted exploration and resource
definition drilling throughout FY21
and FY22 has delivered exceptional
results within our highly prospective
tenement holding.
In March 2022, we contracted Xcalibur
Multiphysics to perform an airborne
geophysical survey over our Cobar
Basin tenement holding. Using gravity
sensing equipment attached to a
Cessna aircraft, the survey collected
data which will be used by our
dedicated team of geologists to build
3D models that will help identify
potential mineral deposits in the area.
Combining traditional exploration
methods with innovative technology
reduces the time to discovery and
minimises ground disturbance. Initial
outputs from the survey were received
in the June quarter. The results will add
22
—
ANNUAL REPORT 2022
KAIROS
—
Our discovery of the Kairos orebody was announced
in early 2019 and was brought into production in
June 2021. The Kairos deposit is below the Peak Mine
workings, around 700m north and slightly deeper
than the Chronos lode.
Exploration drilling platforms were established to support
an intensive 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.
Future drilling will target both resource upgrade
drilling in the middle and upper sections of
the lode and extensions at depth.
DARGUES
—
The Company embarked on a resource infill and
extensional drilling campaign immediately after
acquiring the Dargues Mine. Recent results have
confirmed multiple zones of gold mineralisation
beyond the existing resource footprint.
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 a priority target for the FY23 program.
23
—
AURELIA METALS SUSTAINABILITY
—
Environmental monitoring at our Dargues Mine
24
—
ANNUAL REPORT 2022
25
25
—
—
AURELIA METALS OUR APPROACH TO
SUSTAINABILITY
—
Building and maintaining
a trusted, sustainable, and
beneficial presence in the areas
where 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 our operations or functions from
exploration to closure.
Sustainability is embedded within our
business through our commitment to:
protecting the health and safety of
our employees, contractors, and
host communities
minimising our environmental
impact, conserving and enhancing
biodiversity, using resources such
as water and energy efficiently and
progressively rehabilitating land in
preparation for eventual closure
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 and actively managing
modern slavery risks
applying ethical and transparent
business practices
complying with applicable
laws, regulations, licences
and commitments.
To achieve our sustainability
objectives, we recognise the need
to continually improve, understand,
benchmark, and address emerging
issues that are important for ourselves
and our stakeholders.
Our approach to managing
performance in these areas includes
risk assessment, development and
implementation of plans, objectives,
targets, policies, standards and
procedures that are supported by
management systems, leadership
development, training and guidance.
This Sustainability section of our 2022
Annual Report has been prepared with
reference to internationally recognised
reporting frameworks.
GRI is an independent international
organisation that has established the
leading framework and standards for
sustainability reporting.
26
—
ANNUAL REPORT 2022
MATERIAL TOPICS
—
We regularly engage with our key internal and external stakeholders
to identify the issues most important to them. An overview of our
approach to stakeholder engagement can be found on pages 37-38.
In developing the Sustainability section of our 2022 Annual Report,
we focused our disclosures on the potential risks and opportunities
that could most impact the business and influence the assessments
and decisions of our stakeholders.
We did this by:
undertaking a desktop materiality assessment
reviewing our material company risks
reviewing stakeholder expectations and emerging risks
engaging with proxy advisors, ESG analysts, industry bodies
and other experts
benchmarking peer reports
reviewing internationally recognised reporting frameworks.
This Sustainability section of our 2022 Annual Report describes
our management approach, programs and performance for our
material topics.
The Aurelia Board, via our Sustainability and Risk Committee,
have reviewed the outcomes of our materiality assessment and
approved the sustainability content of this 2022 Annual Report.
E
C
N
A
M
R
O
F
R
E
P
Y
T
I
N
U
M
M
O
C
M
N
O
V I R
N
E
E
C
N
A
M
R
O
F
R
E
L P
A
T
N
E
Climate Change
Land and Biodiversity
Water
Tailings and Waste Rock
Rehabilitation
and Closure
G
O
V
E
R
N
A
N
C
E
Governance
Structure
Operating with Integrity
Risk Management
Management Systems
Stakeholder Engagement
Planning and
Strategy
Community
Investment
and Development
First Nations Engagement
Project Approval
Engagement
Grievance
Management
MATERIAL
ISSUES
Operational Performance
Financial Performance
Growth Opportunities
H
E
A
LT
H A
N
D S
A
Safety Culture
Fatal Hazard and Critical
Controls
Contractor Management
Health and Wellbeing
Sexual
Harassment
FET
Y P
E
R
F
O
R
M
A
N
C
E
Attraction
and Retention
Diversity and Inclusion
Excellence in Leadership
Training and Development
Remuneration
Performance
Management
F
R
E
E P
L
P
O
E
P
E
C
N
A
M
R
O
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N
O
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T
U
B
R
T
N
O
C
C
M
O
N
O
C
E
I
AURELIA METALS
27
—
An aerial view of our Hera process plant and site offices
with the Tailings Storage Facility in the background
A GRI Content Index begins on page
70 of this Annual Report.
The United Nations Sustainable
Development Goals (SDGs) were
endorsed in 2015 and are aimed
at eliminating poverty, protecting
the environment and providing
a shared blueprint for peace and
prosperity for people and the
planet by 2030.
We have mapped our sustainability
programs and performance to the
SDGs within the GRI Content Index.
The Financial Stability Board
created the Taskforce on Climate-
Related Financial Disclosures
(TCFD) in 2015. The TCFD includes
recommendations on voluntary
climate-related financial risk
disclosures that provide investors,
lenders, insurers, regulators, policy
makers and other stakeholders
in the financial markets climate-
related information useful to
decision making.
We have begun the process
of aligning our climate
strategy and disclosures to the
recommendations of the TCFD.
GOVERNANCE
—
Dargues Processing manager, Rami Ghattas
We remain committed to
achieving our environmental,
social and governance
objectives and targets in
a progressive, sustainable,
and respectful manner.
Our strong focus on governance
and commitment to our stakeholders
comes from a clear appreciation
that our actions are on behalf of
our shareholders.
Our aim is to instil an ‘act as an owner’
mindset, where everyone is working
towards a common goal in the best
interest of the business, shareholders
and stakeholders.
GOVERNANCE
STRUCTURE
—
The Board of Directors (the ‘Board’)
are the highest governance body
within Aurelia’s governance structure.
Our Board operates under the roles
and responsibilities outlined in the
Board Charter, which is regularly
reviewed and available on our website.
The role of the Board is to represent
and serve the interests of shareholders,
with commitment to deliver strong
value to all stakeholders, including
the communities where we operate.
Fundamental to these activities is our
contribution as a trusted, valued and
sustainable mine operator.
At 30 June 2022, the Board consisted
of seven members (71% male and
29% female), with six Independent
Non-Executive Directors and one
Executive Director (the Managing
Director and Chief Executive Officer).
A Board Skills Matrix captures 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 long-term strategy.
The Board aims to ensure shareholders
are provided with all information
necessary to assess performance
of the Company and the Board.
Regular investment calls, annual
discussions with proxy advisors and
the Annual General Meeting are key
engagement mechanisms where
we seek to understand the views
of shareholders and disseminate
Company information.
28
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ANNUAL REPORT 2022
DELEGATION OF
RESPONSIBILITY
The Board is supported by
the following committees:
Audit
Sustainability and Risk
Remuneration and Nomination
The responsibility and authority
of each committee is outlined in
the Committee Charters which
are available on our website.
The functions of the Committees do
not relieve the Board from any of
its responsibilities.
The Board has delegated certain
defined authorities to the Managing
Director and Chief Executive
Officer to provide for the efficient
operation of the business within an
appropriate framework of control
and risk management.
The Managing Director and Chief
Executive Officer has the authority to
delegate certain authorities, as set out
in the Delegated Authorities Manual
which has been approved by the Board.
The Managing Director and Chief
Executive Officer prepares and
recommends the Company strategy
to be approved by the Board.
The Managing Director and Chief
Executive Officer is then responsible
for execution of the strategy within
agreed risk tolerances, policy and
governance framework.
AUDIT COMMITTEE
The principal role of the Audit
Committee is to:
ensure the reliability and integrity
of financial reporting, including
statutory financial statements
and the application of significant
accounting policies
ensure the effective and efficient
execution of the external audit
review and oversee financial
risk management matters,
including the processes applied to
identify, manage and report upon
significant financial risks
ensure an effective compliance
regime is in place, including all
significant tax and regulatory
compliance matters
review the adequacy and
effectiveness of internal controls
and related governance.
The Audit Committee met five times
in FY22.
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 enterprise
risk management.
In particular, the Committee is
responsible for satisfying itself that
measures, systems and controls are
in place to manage sustainability
issues and incidents that may have
material strategic, business and
reputational implications for Aurelia
and our stakeholders.
Relevant General Managers and
Executives are invited to attend
meetings of the Committee and
Risk Owners are required to present
their sustainability risk issues and
mitigation plans.
As part of its work program, the
Sustainability and Risk Committee
invites representatives from external
stakeholder groups to present to them
in relation to current environmental,
social and governance (ESG) issues
and/or trends.
In FY22 the Committee had
presentations from Regnan, a
responsible investment leader with
analysts that provide research, analysis
advice and insights on important
ESG issues on behalf of institutional
investors Deloitte on climate change
trends and peer benchmarking,
and Partners in Performance on the
financial implications and practicalities
of implementing a renewable project at
the Peak Mine.
We will use these views to inform our
position on climate change.
The Sustainability and Risk
Committee met four times in FY22.
AURELIA METALS
29
—
Dargues Processing manager, Rami Ghattas
CHAIRMAN OF THE BOARD
The Chairman of the Board is
responsible for:
leadership of the Board
facilitating the effective
contribution of all Directors
promoting constructive and
respectful relations between
Directors and between the Board
and management
communicating the Board’s
position to shareholders and
the public.
The Chairman is also responsible
for arranging Board performance
evaluations. This is undertaken
at least every two years.
CASE STUDY
BOARD OVERSIGHT
IN ACTION
—
Employees from our Dargues Mine view construction
progress at the mine's tailings storage facility
inspected the scene of two High Potential Risk Incidents
to verify the close-out of agreed actions as part of our
Lead Indicator program
completed a Critical Control Verification for one of our
newly introduced Fatal Hazard Standards, as part of our
Lead Indicator program
met with Majors Creek community members at an informal
town-hall meeting to understand first hand their concerns
and aspirations.
Our Sustainability and Risk Committee takes an
active approach to monitoring the measures,
systems and controls we have in place to
manage sustainability matters. This highlights
their commitment to ensuring the values of our
shareholders are upheld and the interests of our
communities are safeguarded.
In March 2022, our Sustainability and Risk Committee met
at the Dargues Mine. While on site, the Committee, along
with the Chairman of the Board and the Managing Director
and Chief Executive Officer:
undertook an inspection of the tailings dam and actions
taken in response to significant rainfall
30
—
ANNUAL REPORT 2022
REMUNERATION AND
NOMINATION COMMITTEE
The Remuneration and Nomination Committee assists the
Board with nominations and selection of Directors along with
Human Resource matters including:
ensuring remuneration practices are designed to support
our Vision and Values, Strategy, 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 Committee uses an independent external remuneration
specialist to undertake Executive and Board benchmarking.
The specialist provides regular feedback on research,
analysis and trends to inform decisions on changes to
Executive remuneration, including Short- and Long-Term
Incentives, and to ensure any material changes are aligned
to stakeholder expectations.
The Remuneration and Nomination Committee met seven
times in FY22.
Aurelia’s remuneration framework and policies, an overview
of the process applied in the determination of remuneration,
and Board and executive Key Management Personnel (KMP)
remuneration are detailed within the Remuneration Report
which begins on page 120.
THE AURELIA WAY
The Aurelia Way is our Code of Conduct, which encompasses
our Vision and Values and guides all aspects of the business,
from the policies and standards we apply to how we
conduct ourselves and approach day-to-day decisions.
It sets boundaries to help guide employees and contractors
to exercise good judgment and describes how we should
interact internally with our colleagues, as well as externally
with our stakeholders.
The Aurelia Way is structured around the following themes:
Purpose of The Aurelia Way discussing how The Aurelia Way
applies to you and how Aurelia will respond to breaches.
Workplace Behaviours articulating expectations which
include health and safety, respect for people, employee
performance and unacceptable behaviour.
Sustainability covering environment, community and
human rights matters.
Operating with Integrity addressing conflicts of interest,
bribery and corruption, and working in accordance with
the law.
Communicating Externally encompassing disclosures
to the market, shareholders, media, and working with
government agencies.
In FY22, our workforce, including contractors, received
extensive face-to-face training on The Aurelia Way and were
provided with guidance on how to operate in alignment
with the framework. The Aurelia Way is incorporated into
inductions for all new employees and contractors and within
the terms for any new and existing suppliers.
We expect employees to carry out due diligence on potential
and existing business partners and suppliers to confirm they
conduct their business lawfully, that they are aware of their
obligations under The Aurelia Way and that they operate in
a consistent manner.
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.
There are a number of options for reporting unacceptable
conduct, including:
raising it with a Direct Manager or Supervisor
elevating it to the next level of management
contacting the Human Resources team, Legal team
or Whistleblower Protection Officers
reporting it through our confidential independent external
Whistleblower service – Stopline.
The Aurelia Way was approved by the Board in September
2021 and is publicly available on our website.
OPERATING WITH INTEGRITY
—
We work with business partners and suppliers who share
our commitment to safety, human rights, and working
ethically and lawfully, and who behave in accordance with
The Aurelia Way.
We also prioritise responsible local procurement of goods and
services that contribute to economic and social development
of communities where we operate.
Our business partners and suppliers play an important role in
our success. We therefore choose who we work with carefully.
WHISTLEBLOWERS
We encourage employees and stakeholders to speak up
at the earliest opportunity where a person has reasonable
grounds to suspect misconduct. We have a Whistleblowers
Standard that outlines the protections available to
whistleblowers and the process that will be followed when
a disclosure is made, to encourage people to come forward
with their concerns. All disclosures made under this Standard
are treated seriously and are carefully considered.
We have appointed an external confidential Whistleblower
provider that can be contacted 24/7 and also appointed and
trained Whistleblower contact officers within our business.
AURELIA METALS
31
—
ANTI-BRIBERY AND CORRUPTION
HUMAN RIGHTS AND MODERN SLAVERY
Aurelia is committed to conducting its business ethically and
in accordance with our Vision and Values and The Aurelia Way.
We take a zero-tolerance approach to bribery and corruption,
as set out in the Anti-Bribery and Corruption Policy, which
is available on our website. The Policy is communicated
to all employees and contractors as part of The Aurelia
Way training.
Information on limits for gifts, hospitality and entertainment,
and detailed guidance on deciding if and when this may be
appropriate, are outlined in the Company’s Anti-Bribery and
Corruption Policy and within The Aurelia Way.
In FY22, there were:
no confirmed incidents of corruption
no employees dismissed for corruption
no incidents where contracts were terminated
or not renewed due to corruption
no cases regarding corruption being brought against
the Company or its employees.
CONFLICTS OF INTEREST
Aurelia requires that all actual, perceived or potential
conflicts of interest be disclosed in writing. Other expected
actions include withdrawing from decision making that
creates, or could be perceived to create, a conflict of interest.
ANTI-COMPETITIVE BEHAVIOUR
No matter what country we operate in or customers and
suppliers we transact with, we will support competition
and not engage in anti-competitive behaviour.
In FY22, there were no legal actions pending or completed
against Aurelia in relation to anti-competitive behaviour,
or violations of anti-trust or monopoly legislation.
Aurelia supports and respects human rights and works to
ensure we operate honestly and ethically to identify, assess
and reduce the risk of modern slavery in our operations
and supply chains, as outlined in The Aurelia Way.
In doing this, we recognise that human rights apply to
every person across the globe regardless of their background.
We see this as a fundamental element to our social
responsibility and the sustainability of our operations.
We have identified the following aspects of our supply chain
may expose us to higher modern slavery risks. These include:
uniforms and personal protective equipment
electronics (computers and mobile phones)
cleaning
facilities management (accommodation camp
management, cleaning and food services)
transport and logistics (including shipping).
Some of the key actions Aurelia has taken to assess and
address modern slavery risks in our operations and supply
chains include:
Developing and rolling out The Aurelia Way and associated
training, which includes expectations to uphold human
rights and identify and report modern slavery exposure.
Encouraging employees, contractors, suppliers and
stakeholders to report any human rights or modern slavery
incidents pursuant to our Whistleblower Standard.
Undertaking a Group level modern slavery risk assessment.
Establishing a Modern Slavery Working Group, which
meets quarterly to identify, monitor and address
modern slavery risks in our business. The Working Group
includes head office and site legal, finance, procurement,
sustainability and human resources representatives.
Undertaking supply chain due diligence based on
expenditure, product/service type, sector/industry and
geographical location.
Strengthening modern slavery compliance and reporting
obligations in all tenders, contracts and new supplier
onboarding processes.
We aim for continuous improvement in our actions to assess
and address modern slavery risks in our operations and
supply chains.
Aurelia’s published Modern Slavery Statements
are available on our website.
32
32
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ANNUAL REPORT 2022
Left to right: Environment and Safety Officer, Russell Wawatai; WHS Superintendent, Shae Martin;
and Senior Legal Counsel, Rochelle Carey at the process plant at our Peak Mine
ANNUAL REPORT 2022 Dargues Crusher/Loader Operator, Laura King
SECURITY MANAGEMENT
Aurelia requires contractors engaged to provide security
services to appropriately address the human rights aspects
of security services. Our contracted secure transport provider
is a founding member of the UN Global Compact in support
of the UN Sustainable Development Goals.
PROCESS TO REMEDIATE
NEGATIVE IMPACTS
Any reported breaches of The Aurelia Way are taken
seriously and dealt with on a case-by-case basis and
in a timely manner.
The course of action will depend on the nature and severity
of the breach and may include disciplinary action, including
dismissal in some cases and for matters of a breach of law
(criminal or civil), referral to relevant authorities.
COMPLIANCE WITH LAWS
AND REGULATIONS
Aurelia’s Directors, employees and business partners are
required to comply with the laws in the state and country
in which they are working and acknowledge that a breach
can result in serious consequences for the Company
and our employees. This could include fines, criminal
and civil penalties, sanctions, imprisonment and/or
reputational damage.
This year, Peak Gold Mines Pty Ltd was convicted of an
offence under the Work Health and Safety Act 2011. This was
in relation to a tragic workplace fatality that occurred at the
Peak Mine in April 2018, prior to Aurelia’s acquisition from
Newgold Inc. In a small community like Cobar this had a
significant impact, not just on the families, work colleagues
and friends directly affected, but on the broader community.
Peak Gold Mines was found to have failed to comply with
the health and safety duty, which thereby exposed a worker
to a risk of death or serious injury and was sentenced
to pay a fine of $480,000. This sum was recovered from
Newgold lnc., being the owner of Peak Gold Mines at the
time of the incident.
Aurelia experienced no material environmental, community
or heritage incidents and received no fines or penalty
infringement notices in FY22. However, some lower
severity warning letters were received from Regulators,
see pages 90-91.
WORKING WITH GOVERNMENT AGENCIES
Aurelia works closely with government officials in the
jurisdictions where we operate, and regularly engages with
them on the issues that affect our business. We maintain
sound professional relationships with governments, their
agencies and employees, and always act in a respectful,
honest, transparent and ethical manner. We always co-
operate with government enquiries and investigations.
In accordance with Company guidelines, under our Delegation
of Authority Manual, no political donations in cash or in-kind
are to be made. Employees may participate as individuals in
political processes provided it is made clear that in doing so,
they are not representing the Company.
No financial assistance has been received or requested from
federal or state governments.
TAX GOVERNANCE AND COMPLIANCE
Aurelia operates within Australian jurisdictions and engages
with the relevant state and federal tax authorities for all tax
compliance matters.
Aurelia’s Board Tax Policy ensures our approach to taxation
is principled, transparent and sustainable in the long term.
33
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AURELIA METALS The Board endorses the following principles governing
its approach:
Commitment to ensure full compliance with all statutory
obligations, and full disclosure to revenue authorities.
Management of tax affairs in a pro-active manner that
seeks to maximise shareholder value, while operating
in accordance with the law.
Maintenance of documented policies and procedures
in relation to tax risk management.
Sustaining engagement with revenue authorities, and
actively considering the implications of tax planning for
Aurelia’s wider reputation.
Aurelia tolerates a low level of tax risk (which is inherent
in taxation matters). Tax will be managed with the objective
that all tax liabilities properly due under the law are
correctly recorded, accounted for and paid.
INTERACTION WITH
TAXATION AUTHORITIES
We maintain thorough and transparent engagement with tax
authorities. In FY22 Aurelia completed a Combined Assurance
Review with the Australian Taxation Office (ATO).
The purpose of this Review was to obtain:
greater confidence that Aurelia paid the right amount
of income tax or identify areas of income tax risk for the
years ended 30 June 2017 to 30 June 2020
a better understanding the GST profile of Aurelia and
identify any GST risks that may require further action for
the review period 1 July 2019 to 30 June 2020.
The ATO observed that we had maintained lodgement and
payment compliance during the review period. The findings
and improvement actions identified by the ATO have been
integrated in our tax governance processes to ensure
ongoing alignment with the ATO’s expectations.
TRADING IN AURELIA’S SHARES
Aurelia has a Securities Trading Policy (available on our
website) which applies to all employees, contractors
and consultants of Aurelia. The Policy exists to minimise
the risk of actual insider trading and avoid the risk of
perception of insider trading.
Anyone with knowledge of price sensitive information
that is not generally available is prohibited from dealing
in Aurelia shares.
Directors, senior executives and certain employees who
are in a position which provides them with ready access to
confidential and price sensitive information about Aurelia
are termed ‘designated employees’. These employees have
additional protocols governing their dealing in Aurelia shares,
including needing prior approval to trade and only being able
to trade in designated trading windows as defined in Aurelia’s
Security Trading Policy.
RISK MANAGEMENT
—
Risk Management at Aurelia refers to the management
of potentially adverse effects, as well as the realisation
of potential opportunities.
Risk management is embedded throughout the business
from assessing growth opportunities through exploration,
mergers and acquisitions, to development, operation, and
mine closure.
Our approach to hazard identification, risk assessment
and incident investigation is governed by our Board and its
Sustainability and Risk, and Audit Committees. This provides
confidence to our internal and external stakeholders that
Aurelia’s material and significant risks are identified and
effectively managed.
Aurelia’s Group Risk Register categorises risks and
opportunities into the following broad topics:
Financial
Strategic
Health and Safety
Human Resources
Environment
Community
Governance
Operational
Market
For each risk, control strategies and improvement
opportunities are identified and accountability for their
management is assigned to a risk owner.
Implementation of improvement actions are tracked in
Aurelia’s enterprise risk system, INX InControl (INX), with
progress reviewed as part of the Senior Leadership Team’s
quarterly risk review process.
Material risks are those that threaten the success of Aurelia’s
business and/or could substantially impact the Company’s
ability to create or preserve value over the short, medium or
long term. The following factors are taken into consideration
when identifying material risks:
Has the risk been evaluated with a consequence level of 5
(catastrophic) in the Aurelia Risk Management Framework?
Would the risk require public disclosure?
Could the risk substantially influence the assessment
and decisions of stakeholders?
Could the risk materially change the underlying value
of the business?
Would the risk impact on the Company meeting
its business strategy and objectives?
Material risks in the Group Risk Register are also
allocated to the Board or one of the Board Committees
for annual oversight. This includes the review of the risk
management framework and monitoring of Group material
risks to confirm appropriate processes have been applied
to identify, evaluate, and control risks as far as reasonably
practical, and consideration is given for further mitigation
from the Board’s experience.
34
—
ANNUAL REPORT 2022 Material Risks are further discussed in the ‘Operations and
Financial Review’ across pages 111-115.
Level 4: Quantitative and Other Detailed
Risk Assessments
During FY22, we updated our Enterprise Risk Management
Framework, which is aligned to ISO 31000 and includes
our Risk Management Policy, Standard and Procedure.
The Risk Management Standard outlines Aurelia’s minimum
requirements for the systematic identification, assessment
and management of risks and opportunities.
The Risk Management Standard is supplemented by Aurelia’s
Risk Management Procedure which provides guidance on the
four levels of risk assessments undertaken at Aurelia:
Level 1: Take 5s
A pre-task assessment to be undertaken by individuals
in the field to consider hazards associated with the task
at hand. A Take 5 is required at shift commencement,
before each task, and when the work environment or other
conditions change.
Level 2: Job Hazard Analysis
A pre-task assessment identifying job steps, relevant hazards,
and controls. Job Hazard Analysis’ (JHA) are undertaken
when a Take 5 cannot address the risk adequately, for team
activities and/or where a standard operating procedure
is not available. A JHA is reviewed by everyone involved,
or likely to be involved, in a task.
Level 3: Formal Risk Assessments
A formal, team based, qualitative risk assessment completed
for: the Aurelia Group, operations, departments, major
projects, life of mine planning and budgeting, major
modifications of plant and equipment (including capital
projects), mine closure, entry into new materials and/or
different jurisdictions and mergers and acquisitions. Level
3 is where we move beyond focusing on task related health,
safety, environmental and community risk, to consider
financial, human resources, business continuity and other
strategic business risks.
Quantitative risk assessments may be required for scenarios
that have significant consequences where a more detailed
understanding of the controls and effectiveness are required.
MANAGEMENT SYSTEMS
—
Our Health, Safety and Environment Management Systems
are informed by our Risk Management Framework. It builds
upon our Vision and Values, Strategy and policies and
is supported by The Aurelia Way, our Rules to Live By,
and Green Rules which set clear and unambiguous minimum
expectations around high potential risk incidents and
guide individual behaviours.
We have established Standards, Management Plans and
Procedures, supported by work instructions and task-specific
risk assessments, to guide how work should be undertaken
in a safe and environmentally responsible manner.
Prior to visiting or commencing work at one of our sites,
employees and contractors undergo an induction program
targeted to the level of risk associated with their activities.
General site inductions inform workers about the risks
and controls associated with activities on the site, and the
behaviours we expect of them. Additional inductions and
training are provided to workers who will access higher
risk areas, including our processing mills and underground
environment, or will be undertaking higher risk work.
We enhanced our Health, Safety and Environment
Management Systems this year, with the continued
development of Fatal and Catastrophic Hazard
Standards and Critical Control Verification programs.
Emergency Response Team at our Dargues Mine
AURELIA METALS
35
—
36
36
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—
ANNUAL REPORT 2022
INCIDENT INVESTIGATIONS
—
All incidents are fully investigated in line with our Incident
Classification, Notification, Investigation and Reporting
Procedure. Under this Procedure, incidents are broadly
classified into the following categories:
safety (eg. injuries,
production loss
occupational illness,
near misses, policy/
procedure breach)
equipment/damage
environmental
non-compliance
community/reputation
inappropriate behaviour
(eg. sexual harassment
and assault)
security.
The depth of incident investigation is dependent on the
severity of the incident, with increasing depth correlating
to increased actual or potential consequence.
Incidents or near misses with an actual consequence of
level 3 (moderate) and above, or a potential consequence of
level 4 (major) and above – also known as ‘High Potential Risk
Incidents (HPRIs) – are investigated using the Incident Cause
Analysis Method (ICAM).
Employees trained in the ICAM methodology are called on to
lead or assist in incident investigations as required. In FY22,
several ICAM workshops were held across the business to
ensure we have resources necessary to undertake such
investigations to the quality expected.
For highly sensitive and/or serious investigations the
Company has used external (independent) investigators.
Outcomes of HPRI investigations are overseen by
Aurelia’s Senior Management Taskforce for Significant
Incidents, including verification that HPRI actions have
been appropriately closed out. Events that go to the
Senior Management Taskforce are also presented to
our Sustainability and Risk Committee then the Board.
In FY22, 11 HPRIs required investigation (FY21: 11).
STAKEHOLDER ENGAGEMENT
—
Fundamental to our Vision and Values is being accepted
as a transparent and trusted partner, and successfully
establishing long-term relationships with all our stakeholders.
We do this by respectfully and openly engaging with our
stakeholders through various forums and the media.
We actively attempt to understand the needs and concerns
of our stakeholders to better inform our decision making.
We share information about our operations and performance
to ensure our stakeholders are kept up to date.
An employee completing a Take 5 pre-task hazard assessment
AURELIA METALS
37
—
STAKEHOLDER GROUPS
HOW WE ENGAGE
KEY TOPICS OF ENGAGEMENT
Employees and contractors
E-mail, site and Group newsletters,
COVID-19 management and response
noticeboards, meetings, GM State of the
Nations, MD Communication, social media
Business performance
Balanced Business Plan development and performance
Sustainability management and performance
Employee Engagement Survey
Employee recognition and rewards
Key milestones
Inductions – Vision and Values, expectations,
The Aurelia Way, Rules to Live By, Green Rules,
core policies and standards
Government
Meetings, site visits, emails,
Regulatory and legal compliance
briefings, industry associations (NSW
Minerals Council)
Project approvals and modifications
Sustainability management and performance
Voluntary Planning Agreements
Community investment
New projects – Great Cobar and Federation
Communities
Community meetings, complaints
Sustainability management and performance
and grievance mechanisms, website,
employee visits, community noticeboards,
social media
COVID-19 management and response
Investment in communities
Community Consultation Committees
Cultural heritage consultation and surveys
Direct engagement through Town Hall meetings on
new projects – Great Cobar and Federation
Board members met members of the Majors Creek
Community adjacent to the Dargues Mine for the
purposes of listening to the community’s perspective
Shareholders
Annual reports, quarterly reports, website,
investor briefings, conference call, market
announcements, Annual General Meetings,
social media
Operating performance
Balance sheet
Reserves and resources
Sustainability management and performance
Corporate governance
Community sponsorships and donations
Suppliers
Meetings, contractual agreements
Sustainability requirements
Customers
Meetings, engagement, site visits,
market tenders
Modern Slavery requirements
Contract conditions
Reserves and resources
Regulatory compliance
Sustainability management and performance
Ore being delivered from the Peak hoisting
system to the crushed ore stockfile
38
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ANNUAL REPORT 2022 ANNUAL BUSINESS
PLANNING CYCLE
—
Aurelia has a defined annual business planning cycle
with activities in each quarter that culminate in the
development of objectives and targets at the beginning
of each financial year. These are aligned to the annual
plan and long-term strategy.
The annual business planning cycle includes:
Q1 Material Risk and Opportunity Review
Q2 Strategy (developed by management and
approved by the Board)
Q3 Life of Mine planning
Q4 Budget, review of performance, and Balanced
Business Plan (BBP) development.
The annual planning cycle ensures the Group strategy and
critical tasks for the annual plan and budget are cascaded
down throughout the business. In this way, everyone from the
Managing Director and Chief Executive Officer down to each
employee in the organisation, knows what is expected and
how they contribute to the plan.
BALANCED BUSINESS PLAN
—
Aurelia takes a whole of business approach to developing
strategy and plans supported by measurable Group and
individual performance targets with outcomes linked to
remuneration (including variable remuneration).
BBPs are developed each year to ensure sustainability
topics, including people, safety, environment and community,
are treated equally with traditional financial measures such
as production, costs and business growth.
BBPs are generated in collaborative, cross functional
workshops to develop ideas that underpin continuous
improvement and support business goals contained in
our long-term strategy.
This approach builds a common understanding and
commitment amongst employees to objectives that
align with society and key stakeholder expectations
across five pillars:
Health, Safety, Environment and Community (HSEC)
People and Organisation
Operations
Growth
Financial Outcomes.
(Left to right) General Manager Technical Services, Stean
Barrie and Commercial Superintendent, Kerstie Renno at
the BBP workshop at our Hera Mine.
AURELIA METALS
39
—
SUSTAINABILITY PLAN
—
Aurelia has developed a rolling three-year plan to guide our
efforts to improve our approach and performance across
three pillars of Sustainability. The plan has been approved by
our Board and informs the annual BBP process, particularly
for HSEC and People and Organisation projects that require
a coordinated effort across the business.
1. SUSTAINABILITY GOVERNANCE
Incorporating Board oversight via the Sustainability and
Risk Committee, establishment of Aurelia’s risk management
framework, development and implementation of standards
and systems to ensure we have a culture that recognises
the importance of sustainability to business success.
2. ENVIRONMENTAL PERFORMANCE
Addressing key environmental risks, including legal
compliance, climate change, land and biodiversity, water,
tailings and waste rock, and rehabilitation and closure.
3. SOCIAL PERFORMANCE
Managing key social risks across the people (diversity and
inclusion, leadership training and development), health
and safety (fatal hazards, legal compliance, and health
and wellbeing) and community (stakeholder engagement,
social investment and cultural heritage) disciplines.
FY22 OBJECTIVES, TARGETS AND PERFORMANCE
Not Started
In Progress
Complete
OBJECTIVES
TARGETS
PERFORMANCE / ACHIEVEMENTS
RISK
Embed risk
management
throughout the
business
SAFETY
Establish operational risk register with
active management of risk profiles*
Operational risk registers have been established
for each site and are reviewed every six months
No fatalities
Continued development of Fatal
No fatalities
Hazard Standards accompanied by
Critical Control Verification program
Critical Control Verification tools for the Fatal Hazard
Standards are available and in use
Total Recordable Injury
Frequency Rate (TRIFR) ≤ 7.3
Lead indicator program
compliance ≥85%
TRIFR reduced from 9.1 to 8.7
Lead indicator program compliance was 87%
No High Potential Risk Incidents
No HPRIs have been experienced with repeat causes
(HPRIs) with repeat causes
Develop a Group Contractor
Management Standard
Contractor HSE Management Procedure has been
developed and is scheduled for implementation in FY23
Continue Senior Management
Senior Management Taskforce for Significant Incidents
Taskforce for Significant Incidents to
assess High Potential Risk Incident
investigation findings and verify action
close-out to prevent reoccurrence
has continued to meet regularly to assess the adequacy of
investigation findings and implications for other Aurelia sites
and to verify close-out of actions to prevent reoccurrence
PEOPLE
Define corporate
identity
Embed Aurelia’s Vision and Values
Launch and train employees in
The Aurelia Way
Vision and Values were implemented as part of The Aurelia Way
training and form part of the induction for new employees and
contractors
93.7% of all employees were trained in The Aurelia Way as of 30
June 2022
Engage employees
Complete inaugural Employee
75% participation in the Engagement Survey
Engagement Survey and identify
actions including initial priority actions
Priority actions identified and addressed
A detailed action plan is being developed
40
—
OBJECTIVES
TARGETS
PERFORMANCE / ACHIEVEMENTS
Attract, retain and
motivate
Develop and implement a HR strategy
to reduce voluntary turnover ≤20%
A HR strategy to target, attract, promote and retain
diverse talent developed and executed
Extend the Remuneration Framework
Grading Structure and Achievement
and Development Plans to Trade and
Operator level
Develop Talent
Continue implementation of
Leadership Development Program
and 360° development plans for
supervisors and above
Develop and implement a strategy
to attract, promote and retain
diverse talent
Voluntary turnover reduced from 31.8% to 26.5%
All employees, including Trade and Operator level,
had an Achievement and Development Plan for FY22
Leadership Development Program and 360° development
profiles were extended to supervisors and professionals
A HR strategy to target, attract, promote and retain diverse
talent developed and executed
Establish a succession
planning process
Developing and implementing a Succession Planning
Framework is a priority action for FY23
Diversity and
Inclusion (D&I)
Report on outcomes from the D&I
Deep Dive findings to workforce
The D&I Deep Dive findings were communicated
to the workforce
Establish the D&I Working Group
A D&I Working Group was established with 10 members
representing a cross section of the workforce. The D&I
Working Group met four times in FY22.
Establish a D&I Strategy and
A three-year D&I Strategy with measurable objectives
measurable objectives
was developed
Develop and execute strategy to
prevent sexual harassment and
complete priority actions
84% of priority actions were completed under this strategy
Strategy to prevent sexual harassment is included in the D&I
Strategy, informed by FY21 D&I Deep Dive interviews and FY22
Employee Engagement Survey
Sexual harassment matters are referred to the Senior Incident
Taskforce and the Board as HPRIs
Finalise stakeholder mapping
External consultant engaged to assist development of our
Re-focus our social
investment program
Social Investment Strategy. First stage has been completed,
including establishing baseline data, benchmarking and
stakeholder mapping.
Approximately 49% of our $174m procurement expenditure
was spent within local communities in FY22
Approximately $318k was paid in FY22 Voluntary Planning
Agreement contributions
Approximately $137k of discretionary donations was
directed to local community events and organisations
COMMUNITY
Engagement with
community and
stakeholders
CLIMATE CHANGE
Reduce carbon
footprint
Evaluate low emission opportunities
during Federation Feasibility Study
Federation Environmental Impact Statement committed
to us to evaluate and pursue low emission opportunities
Commence Taskforce on Climate-
related Disclosures (TCFD) Project
with baseline assessment as
first stage of a planned pathway
towards decarbonisation
Formulation of a science based Climate Change Position has
commenced, this has been supported by two consulting firms
engaged to assist with assessment of Aurelia’s baseline and
development of a risk and opportunity assessment, including
an initial review of pathways to decarbonise the business
ENVIRONMENT
No significant
environmental
incidents
Develop governance process and
Tailings Critical Hazard Standard approved and to be
standard for tailings
implemented, with a Critical Control Verification process,
in FY23
* The FY21 Annual Report included a target to develop a Hazardous Materials Standard and associated Critical Control Verification program during FY22 in
error, this work was completed during FY21.
41
—
AURELIA METALS FY23 OBJECTIVES AND TARGETS
FOCUS AREAS
RISK
TARGETS
Three Fatal or Catastrophic Hazard Standards audited
Maintaining an effective risk management framework is essential for
the protection and creation of business value.
SAFETY
Safety underpins everything we do. We are committed to the health
and wellbeing of our workforce.
Zero fatalities
≤ 6.6 TRIFR
>90% of actions to address serious weaknesses identified during
Critical Control Verifications completed by due date
PEOPLE
We value our people. A diverse, high performing, engaged and
empowered workforce is key to our success.
7% improvement in the Sustainable Engagement Score
≤20% voluntary turnover
20% improvement in female representation in the workforce
COMMUNITY
70% of approved social investment actions completed
As a part of our local communities, we actively engage to foster
trusted, transparent and respectful long-term relationships to create
enduring value and protect cultural heritage.
CLIMATE CHANGE
Finalise Climate Change Position including science-based targets
We are committed to a future where average temperatures do not
rise by more than two degrees through building resilience to climate
change and minimising greenhouse gas emissions.
ENVIRONMENT
Our commitment to environmental stewardship focuses on
biodiversity conservation, efficient use of water and resources, and
minimising unintended pollution to land, water and air.
≤3 Recordable Environmental Incident Frequency Rate (REIFR)
100% of available land rehabilitated in accordance with site
rehabilitation plans
ECONOMIC CONTRIBUTION
—
$64M
$374.8M
Aurelia acknowledges how important it is to share the value
of the resources we extract with our stakeholders. We’re
open and transparent about our economic contribution and
proud to be able to give back to the local, state and national
economies in which we operate.
Tender and vendor selection processes for material supply
and service contracts include consideration of environmental,
social and governance exposures and mitigation measures
implemented by the supplier.
In FY22, there were no instances of negative environmental,
social or governance impacts being identified in the
supply chain which resulted in the termination of
business relationships.
In FY22, we generated over $438 million in royalties, taxes,
employee wages and dividends.
42
—
$244M
$82M
$44M
$4.5M
$0.3M
Direct economic value generated
$438.8M
(cid:31) Economic value retained
Economic value distributed
(cid:31) Operational costs and other
(cid:31) Community investments
and expenditure
(cid:31) Employee benefits
(cid:31) Payments to governments (net)
(cid:31) Payments to providers of capital
(including dividend)
$64M
$374.8M
$244M
$0.3M
$82M
$44M
$4.5M
PEOPLE
PERFORMANCE
—
Senior Exploration Geologist, Owen Thomas inspecting drill core at our Hera Mine
Aurelia recognises superior organisational
performance can only be achieved through the people
who call our workplace theirs.
In a tight labour market, the challenge to attract,
recruit and retain high-calibre employees to meet
our current and future business needs is significant.
This means our efforts to engage, energise and
include our people at every stage of the employment
lifecycle have never been more important.
Our materiality process identified the following people
performance focus areas for FY22:
Attraction and retention
Diversity and inclusion
Employee engagement
Leadership
Training and development
Remuneration
Performance review
AURELIA METALS
43
—
43
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AURELIA METALS ATTRACTING TALENT
—
We have a shared services model for recruitment to capitalise
on the opportunity for synergies across our sites and to
ensure we can offer a wide range of potential employment
conditions to attract high quality and diverse candidates.
In FY22 we introduced a more rigorous approach to
recruitment, including reviewing our methods to identify
and attract quality candidates including advertising,
psychometric testing, reference checking and behavioural
interviewing to ensure that there were no barriers to diversity
or unconscious bias.
INTRODUCING NEW RECRUITS
We know the first few months of employment offer up
one of the highest engagement opportunities in the
employee experience. For this reason, we are determined to
ensure our people know who we are, what we stand for and
how we work.
To achieve this, we expect our leaders to play an active role
in communicating our Vision, Values and Strategy in a way
that aligns employees to organisational direction and embeds
a strong corporate identity in the workplace.
Our online induction platform includes a welcome message
from our Managing Director and Chief Executive Officer
outlining the Company’s priorities, Values and expectations
to contribute to an inclusive culture.
This induction consists of four Core Units, The Aurelia Way,
Aurelia’s Rules to Live By, Green Rules and First Nations
cultural awareness training to introduce new employees and
contractors to our processes and systems, and ensure they
work in a safe and inclusive manner.
Each Aurelia site complements these Core Units with
site specific inductions that are refreshed at a frequency
determined by the site risk profile.
Everyone is required to undertake a refresher on the Core
Units every second year they are with the Company.
44
—
Our Managing Director and Chief
Executive Officer Dan Clifford welcomes
all new starters through a video message
AN INCLUSIVE WORKPLACE
THAT THRIVES ON DIVERSITY
—
Aurelia recognises that a diverse and inclusive workforce
brings a wide range of perspectives and experiences and
enables employees to fully contribute their talent to business
improvement and success.
TONE FROM THE TOP
To be successful in this arena, it’s critical to demonstrate
the commitment to diversity and inclusion at the most senior
levels of the business.
In FY22, the Managing Director and Chief Executive Officer
addressed the topic in several employee webinars, as well as
three organisation-wide announcements including ‘Diversity
& Inclusion Deep Dive – Results & Next Steps’, ‘A Safe and
Respectful Workplace – The Aurelia Way’ and ‘Breaking the
Bias for International Women’s Day’.
Our Managing Director and Chief Executive Officer also
takes the opportunity at key organisational forums, such the
Leading The Aurelia Way workshops, the BBP process and
other employee engagement forums, to signal the benefits
and opportunities of diversity and inclusion, as well as the
expectation that inappropriate and disrespectful behaviours
will not be tolerated.
In FY23 we will be increasing the visibility of our commitment
to diversity and inclusion. This will be informed by the
outcomes of recent high-profile reviews within our industry,
including ‘Everyday Respect’, an independent review
of workplace culture at Rio Tinto, ‘Enough is Enough’,
the Western Australian parliamentary inquiry on sexual
harassment against women in the FIFO mining industry,
and SafeWork NSW’s Code of Practice for managing
psychological hazards at work.
Within Aurelia, incidents of sexual harassment and
inappropriate workplace behaviour are referred to the Senior
Taskforce for Significant Incidents as High Potential Risk
Incidents and require full investigation. The Board are also
fully briefed on any incidents of this nature, including actions
taken by management to prevent such incidents.
ANNUAL REPORT 2022 STRATEGY DRIVING ACTION
LISTENING TO OUR EMPLOYEES
We are striving to create an inclusive work environment
where people feel comfortable to be themselves and safe
to voice their views.
In FY22, we undertook an inaugural employee engagement
survey, ‘Spill the Beans’, to gauge employee perceptions
across a number of categories. A communications campaign
called ‘You’ve Bean Heard’ was initiated to generate
awareness of the action planning process, and progress
towards improvement initiatives.
By establishing this baseline and responding to employees’
concerns, we will be able to continually improve our level
of employee engagement.
At the beginning of FY22, Aurelia trialled a cross functional
Employee Working Group (EWG) at the Hera Mine to enable
employees to raise concerns with management before they
become issues. Given the success of the Hera working group,
EWGs have also been introduced at Peak, Dargues and
Corporate sites.
In FY22, we had no strikes or lock-outs at any of our sites.
We are taking a proactive, ‘ground-up’ approach to
understanding employee experiences across our business.
This has included one-on-one interviews with more than
30% of our employees during the FY21 D&I deep dive and
completion of our inaugural Employee Engagement Survey
by 75% of our employees in FY22.
In FY22, a permanent D&I Working Group was established
and met on several occasions to develop a three-year
Diversity and Inclusion Strategy with measurable objectives
and actions.
The D&I Strategy includes developing supportive frameworks
and standards. These include:
The Aurelia Way
Workplace Behaviour Standard
Workplace Flexibility Standard
Fair Treatment Standard
Counselling & Discipline Standard
Recruitment & Selection Standard
Each outlines the expected behaviours of our people in
relation to diversity and inclusion and provides robust
supportive mechanisms available for employees to raise
a concern, lodge a complaint or request consideration
of case-by-case work arrangements, including provision
of special leave or other support measures.
Our D&I Strategy also incorporates actions related to
wellbeing that will include a workplace risk assessment on
psychosocial workplace hazards in FY23. This will provide
data to develop critical controls to prevent inappropriate
behaviours, particularly in relation to sexual harassment and
mental wellbeing. In this way, we will be treating these issues
in a consistent manner to our Fatal Hazard Critical Control
Verification program.
45
—
AURELIA METALS CASE STUDY
CASE STUDY
‘SPILL THE BEANS’
EMPLOYEE
ENGAGEMENT
SURVEY
—
We undertook our inaugural employee engagement survey
in FY22. The ‘Spill the Beans’ survey highlighted issues
that were important to our people and helped establish
a benchmark we will use to measure improvements in
employee engagement moving forward.
To create momentum, priority actions addressing
themes of attraction and retention, burn out/inadequate
resourcing, communication, non-monetary recognition,
and safety training were fast tracked and rolled out in FY22.
The actions included:
Willis Towers Watson was engaged to conduct the survey
which meant our results were benchmarked against more
than 220 companies (148,783 employees) across the
resources industry and all Australian industries norms.
Conducted in Q3, our people were encouraged to ‘Spill the
Beans’ over a cup of coffee and morning tea provided by
local suppliers at each of our mines. Questions addressed
categories including sustainable engagement, change,
communication, retention, values, safety, diversity and
inclusion, leadership, and strategy. Diversity and inclusion
questions were generated from the WGEA Employee
of Choice Certification.
Senior HR Advisor, Sarah Webb spoke about the survey’s
participation rate and actions we are taking to address the
issues identified.
We had 210 employees, or 75% of our workforce, complete
this survey. For an inaugural survey, this high participation
rate provides meaningful data and a benchmark to measure
the effectiveness of the plans we are putting in place to
address the issues identified,” Sarah explained.
“Following the survey, Employee Working Groups (EWG)
and focus groups comprised of representatives from every
department and function were established at each of our
work locations to discuss actions to address survey outcomes.
“We’re developing an overarching action plan to address
the issues identified in the survey with insights from the
EWGs and focus groups, and other targeted discussions
with employees across our business. This demonstrates
we’re really listening to what our people have to say and are
committed to addressing issues that are important to them,”
Sarah concluded.
Site facility upgrades, including the camp at our Hera Mine.
Establishing a housing scheme at our Peak Mine to
encourage employees to live residentially.
Improved communication through a quarterly
Group-wide newsletter.
Ensuring the delivery of training and development
opportunities outlined in employee’s individual
development plans was addressed during development
of the BBP.
Implementation of a Human Resources Information
System, Kronos, which provides employees access to
information as it relates to them and systemises workflows
for processing and approving human resource information.
Implementation of our Vision and Values and The Aurelia
Way through extensive face-to-face training sessions and
the continued roll out of Leading The Aurelia Way.
Wellbeing programs, including:
– The Diversity and Inclusion Working Group and Strategy.
– Mental health training and awareness and mental health
first responder training.
– Establishment of a Flexible Working Standard.
We intend to undertake a pulse survey in FY23 to understand
whether the changes implemented following the survey have
been successful.
46
—
ANNUAL REPORT 2022 EXCELLENCE IN LEADERSHIP
—
We acknowledge superior talent requires excellent
leadership, and the highest trust interface usually occurs
between leaders and their direct reports. As a result, we strive
to embed leadership capability early in employees’ careers.
LEADING THE AURELIA WAY
Leading The Aurelia Way is an internally designed and
facilitated leadership development program. It is
underpinned by a Leadership Capability Model aligned to our
Values. The model identifies the core capabilities and skills
critical for effective leadership and behavioural expectations.
Leading The Aurelia Way workshops are delivered in-house
by management (with the support of an external consultant)
using a cascading approach so management have strong
ownership of the program and outcomes. This provides the
requisite platform towards achieving our Vision and Strategy
and ensuring our employees live our Values every day.
In FY21, the day long face-to-face program was rolled out to
the Managing Director and Chief Executive Officer, Senior
Leadership Team and Managers. 360° Leadership Profiles
were then developed, and feedback sessions held with leaders
to provide them with a greater insight into their individual
strengths and development opportunities. These insights
were then incorporated in Annual Development Plans.
In FY22, the program was rolled-out to Superintendents,
Supervisors and Professionals.
All Supervisors and Professionals have now completed
the Leading The Aurelia Way workshops, commenced their
360° Leadership Profiles and feedback and will commence
development of their ADPs in FY23.
GROWING OUR PEOPLE TO
GROW WITH US
—
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.
COMPETENCY FRAMEWORK
In FY22, we continued to develop an enterprise-wide learning
and development competency framework and system of
training, customisable for each site. It provides a structured
approach that will enable the business to better align training
and assessment with business needs while ensuring external
regulatory compliance requirements are met. This alignment
will ensure statutory compliance and a safe, skilled workforce.
The first stage of this process was to develop a skills matrix
and commence mapping all roles to the matrix to enable
required competency and refresher training to be undertaken
within required timeframes. Compliance to the Competency
Framework is how we are delivering the target for all
employees and contractors to be trained in The Aurelia Way,
Aurelia’s Rules to Live By and Green Rules.
In addition, 893 employees and contractors have completed
First Nations cultural awareness training. This training
underpins employee and contractor understanding of cultural
heritage and their role in supporting Aurelia’s commitment
to our First Nations Peoples. To ensure individuals who have
the most exposure to cultural heritage are able to support
Aurelia’s commitment, all exploration employees and Hera
employees and contractors who provide support to the
Federation Project, have undertaken the training.
Dargues Processing Superintendent, Tim Cooke,
47
—
AURELIA METALS Professionals and Supervisor-level employees attend a Leading
the Aurelia Way workshop facilited by Brad Strahan
OUR SUCCESS IS YOURS
—
Fairness and equity are our key drivers to remunerate
talent, as well as a focus on rewarding and recognising
high performance.
REMUNERATION FRAMEWORK
Aurelia recognises that fairness and equality in
remuneration is necessary to attract, develop and retain
high-calibre employees.
Our remuneration framework promotes a performance-based
culture whereby competitive remuneration and rewards
are aligned to the BBP and shareholder objectives.
The framework is based on the Stratified Systems Approach
that ensures we have minimum levels to get work done
and there is meaningful difference between one level and
the next. With only six layers of leadership from the Managing
Director and Chief Executive Officer through to front line
supervisors, and four layers of leadership within an operating
site, there is clear line of sight between operators and the
Senior Leadership Team.
All employees’ employment conditions are underpinned
by common law contracts. We don’t have any enterprise
agreements at our sites. As a result, Aurelia undertakes
annual market remuneration benchmarking (against similar
industries and market capitalisation) for all levels within the
business to maintain market competitiveness for attraction
and retention.
In FY22 the Australian Workers Union did seek a Majority
Support Determination (on behalf of employees including
union members at site) for an Enterprise Agreement
(EA) at the Hera Operation. Aurelia helped facilitate a
vote to determine if there was majority support for an
EA and requested the Fair Work Commission to oversee
a Secret Ballot. 93% of eligible employees responded
to the vote with 68% not in favour of an EA and preferring
to continue with existing employment arrangements.
In FY22, we increased the annual variable component of
employee remuneration (Short-Term Incentives) and also
introduced an Employee Share Scheme whereby eligible
permanent full-time and part-time employees received
A$1,000 worth of Aurelia shares. These shares will be issued
again in FY23. For further information, see the Remuneration
Report which begins on page 120.
Gender pay analysis forms part of the Aurelia’s Diversity and
Inclusion Policy. This is overseen by our Board and forms
part of the Remuneration and Nominations Committee
Charter and annual work plan to review and address any gaps.
Performance and salary reviews are moderated by the
Senior Leadership Team to ensure internal consistency and
there are no gender or other attribute biases prior to the
Board’s review.
Where gaps were previously identified, we undertook out
of budget adjustments to close the gap in a meaningful and
considered way.
In FY22, we again undertook a gender pay gap analysis of like
for like roles. No gaps were identified.
48
—
ANNUAL REPORT 2022 Workforce Size
FY20
FY21
FY22
EMPLOYEES
CONTRACTORS*
EMPLOYEES
CONTRACTORS
EMPLOYEES
CONTRACTORS
Peak Mine
Hera Mine
Dargues Mine
Corporate
Total
133
64
0
13
210
* Data is not available prior to FY21.
-
-
-
-
-
133
63
37
25
258
279
109
83
1
472
153
54
51
49
307
315
120
81
6
522
PERFORMANCE MANAGEMENT CYCLE
Employee Gender Diversity (%)
In FY22, Achievement Development Plans (ADPs) were
extended to all employees including Trades and Operator
levels and incorporated individual performance targets,
identified development needs and opportunities and
assessed the employee’s alignment to key behavioural
indicators aligned to The Aurelia Way.
ADPs are developed and agreed at the beginning of the
financial year and every employee participates in an informal
mid-year and a formal year-end review. Progress towards
the ADPs are discussed at the reviews and determine
remuneration increases in an objective and internally
consistent way. Performance against the ADPs also
determines the outcome of the individual component of the
employee’s Short-Term Incentive. All full-time, part-time and
eligible fixed term employees participate in this process.
In FY23, there will be a renewed focus on informal and formal
training and professional development opportunities that are
tailored and planned for everyone according to their ADPs.
Male
Female
FY20
FY21
FY22
83
17
81
19
78
22
Employee Initiated Turnover (%)
Peak Mine
Hera Mine
Dargues Mine
Total
FY21
FY22
28
34
31
32
19
28
44
26
Local Employment FY22 (%)
Peak Mine
Hera Mine
Dargues Mine
RESIDENTIAL
OTHER
81
39
86
19
61
14
Employee Gender Diversity by Employment Level (%)
EMPLOYMENT LEVEL
Board (Non-Executive Directors)
Executive / General Manager
Principal / Manager
Senior Professional / Superintendent
Professional / Supervisor
Paraprofessional / Operators
FY21
FY22
MALE
FEMALE
MALE
FEMALE
67
100
81
79
82
80
33
0
19
21
18
20
67
100
78
76
85
75
33
0
22
24
15
25
49
—
AURELIA METALS HEALTH AND SAFETY
PERFORMANCE
—
A member of our contractor workforce underground at our Peak Mine
Leading the Aurelia Way supports our safety culture by
requiring people in supervisor and above roles to participate
in our Lead Indicator program.
Under the Lead Indicator program, leaders demonstrate
visible safety leadership by partaking in proactive
conversations, observations and inspections (including Safe
Act Observations, Planned Task Observations, Workplace
Inspections, Critical Control and HPRI Verifications), in line
with a lead indicator matrix and schedule. This helps us to
determine the effectiveness of our safety understanding
and controls throughout the business.
In FY22, we achieved >85% compliance with our Lead
Indicator Program targets.
Aurelia’s safety performance continued to improve this
year with a reduction in Total Recordable Injury Frequency
Rate (TRIFR) from 9.1 to 8.7 per million hours worked.
Significantly, only one of these injuries was a lost time
injury indicating that the severity of reportable injuries has
reduced significantly from previous years. No work-related
illnesses were reported in FY22. We are targeting to reduce
TRIFR to ≤ 6.6 in FY23.
Aurelia is committed to the health and safety of our
employees, contractors and communities. We achieve
this through our Safe Metals program and zero harm
philosophy where all workplace incidents and injuries
are considered preventable. We strive to continually
improve our health and safety performance through
our annual planning cycle process.
Our materiality process identified the following health and
safety performance focus areas for FY22:
Safety Culture
Fatal Hazard and Critical Controls
Contractor Management
Health and Wellbeing
Sexual Harassment
SAFETY CULTURE
—
Aurelia’s safety culture is incorporated within The Aurelia Way
and is supports our Rules To Live By. Our Rules to Live By
were developed in response to high potential risk incidents
which have previously caused harm and/or fatalities in
the mining industry. The Rules set expectations and guide
individual behaviour.
50
—
dANNUAL REPORT 2022 Total Recordable Injury Frequency Rate
e
t
a
R
y
c
n
e
u
q
e
r
F
y
r
u
j
n
I
e
l
b
a
d
r
o
c
e
R
l
a
t
o
T
)
d
e
k
r
o
w
s
r
u
o
h
n
o
i
l
l
i
m
r
e
p
(
25
20
15
10
5
0
Recordable Injuries
FY20
FY21
FY22
EMPLOYEES
CONTRACTORS
MEDICAL
TREATMENT
RESTRICTED
WORK
LOST TIME
MEDICAL
TREATMENT
RESTRICTED
WORK
LOST TIME
Peak Mine
Hera Mine
Dargues Mine
Exploration
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6
2
2
1
11
1
1
1
-
3
1
-
-
-
1
Participation and Consultation
Feedback received as part of the ‘Spill the Beans’ Employee
Engagement Survey conducted in FY22 highlighted safety
training and consistency of workers observing safety rules
as areas for improvement.
In response to this feedback, and the Employee Engagement
Survey in general, we implemented an Employee Working
Group (EWG) at each site. The EWG’s function in addition to
the Workplace Health and Safety Committees we have at
each of our sites. In some cases, we may also initiate focus
groups to gain a deeper understanding of a complex issue
and improve safety performance.
We have also developed Critical Control Verifications
(CCVs), based on bowtie analysis, for the following Fatal or
Catastrophic Hazards:
Airborne Contaminants
Explosives and Blasting
Ground Failure
Emergency Response
Inundation and Inrush
Open Holes and Voids
Working at Heights
Tailings Storage Facilities
FATAL HAZARDS AND CRITICAL
CONTROLS
—
Cranes and Lifting
Confined Space
Fire/Explosion
In FY22, we continued to focus on preventing fatalities and
serious incidents by continuing to develop Fatal Hazard
Standards and Critical Control Verifications (CCVs) setting
minimum requirements for our most significant safety risks.
To date, we have implemented Fatal Hazard Standards and
CCVs for:
Internal, and where required external, subject matter experts
have drafted Fatal Hazard Standards for these topics which
will be fully implemented during FY23.
CCVs are used to verify that the critical controls identified for
our Fatal Hazards are in place and effective. Progress against
the CCV program is tracked at a site level and reported
to senior management on a monthly basis.
Hazardous Energy Isolation
Hazardous Materials
Mobile Plant and Traffic
Tyres and Rims
51
—
AURELIA METALS
CASE STUDY
ROLL OUT OF THE
CRITICAL CONTROL
VERIFICATION
PROGRAM
—
Employees securing their identification tags with a
personal danger lock before entering underground
work areas at the Peak Mine
In FY22, we implemented a CCV Program across our mine
sites. The program allows us to regularly monitor controls
in place to manage fatal and catastrophic hazards, ensure
they’re fit-for-purpose and demonstrates our commitment
to continual health and safety performance improvement.
Group Risk and Sustainability Principal, Heath Carney spoke
about the work associated with the program rollout.
“Early in FY22, we conducted a ‘bow-tie’ analysis of our
fatal hazards which helped us identify what controls we had
in place to mitigate these risks. Once identified, we then
determined which controls were ‘critical’.
“A critical control can be an engineered control, such as
a physical barrier, or a systemic control like procedures.
They’re crucial in preventing an event or mitigating its
consequences. Taking fatal hazards as the example, the
absence or failure of a critical control significantly increases
the risk of a fatal hazard occurring, even if other controls
are in place,” Heath explained.
“Identifying critical controls is one thing, what’s important is
the ongoing verification of these controls to ensure they’re in
place and effective. This is the essence of our CCV program.
“During the year, we developed CCV checklists for our 15
fatal and catastrophic standards. The CCV program requires
subject matter experts and senior leaders at each site to
participate in monthly on-the-job audits of critical controls
using purpose-built verification checklists. The checklists
focus on the practical implementation and effectiveness
of each critical control,” Heath continued.
52
—
The program is managed at each site, with individual
verifiers assigned CCVs outside of their usual area of work.
For example, a senior mine geologist may undertake a Mobile
Plant Operator Competency CCV. Having the verification
conducted by someone who does not regularly work in
the area of the mine, or on the piece of equipment that is
being inspected, brings a ‘fresh set of eyes’ to the work area
and helps to pick up any weaknesses that may otherwise
be overlooked.
“Any deficiencies identified during the monthly audits
are entered into INX to allow us to assign responsibilities
and track implementation of corrective actions.
Serious weaknesses identified during the audits are
escalated to Aurelia’s Senior Leadership Team, ensuring
that the Company’s leadership has visibility of how we’re
improving and managing these risks,” Heath concluded.
ANNUAL REPORT 2022 CONTRACTOR MANAGEMENT
—
All recordable injuries experienced at Aurelia sites in FY22
were sustained by contractor workers. In response, Aurelia
engaged with our contractors to highlight this issue and
required contractors undertake training with their workforce
with a particular focus on manual handling and hand or upper
limb hazards.
In FY22, we drafted an updated Contractor HSE Management
Procedure which will be rolled out in FY23. The Procedure
defines the process to award work, assign a contract owner,
contract coordinator and contractor’s representative and
manage the HSE risks posed by Contractors performing work
for Aurelia Metals. This includes a lead indicator matrix and
risk-based approach to interactions, supervision and review
of contractor’s work on the ground.
HEALTH AND WELLBEING
—
During FY22, our promotion of employee health
was both focused on, and hindered by, the ongoing
COVID-19 pandemic. We have continued to provide staff
and contractors with updated information on COVID-19
hygiene, testing, and isolation requirements in accordance
with state and federal government guidelines.
However, we see these guidelines as the minimum. Under our
Pandemic Plan we have gone above and beyond the minimum
requirements to ensure the health, safety and wellbeing
of our employees and local communities. This includes
an ongoing requirement for all new staff and contractors
working on our sites to be fully vaccinated against COVID-19.
To facilitate this requirement, and promote vaccination
amongst staff, we provided a small cash incentive, along
with time off during working hours, for employees to obtain
their vaccinations. Similarly, Aurelia offers free annual
flu vaccinations to employees by arranging and covering
the cost of influenza vaccination programs with local
healthcare providers.
All employees and contractors undertaking work at our
sites are required to complete a pre-employment medical,
including assessment of medical and functional fitness
for work, and are required to present to work fit for duty.
This includes being free of alcohol and other drugs and being
suitably rested prior to commencing their shift. We undertake
routine drug and alcohol testing at our sites and a fatigue
management program.
Ongoing health and hygiene monitoring is undertaken at our
sites, dependent on the level of risk exposure, and includes:
surveillance for noise and airborne contaminant exposure
including silica, dust, and diesel particulates
testing of blood lead levels
periodic medicals for operational personnel.
During the year we implemented health promotion initiatives
at our Hera camp, which included providing workers with
information on:
healthy eating
mental health, including maintaining connection
quitting smoking
managing risks associated with airborne contaminants.
Two of our operations are smoke-free workplaces, with the
third working towards implementing this change during FY23.
Inside the COVID-19 vaccination clinic at our Hera Mine
53
—
AURELIA METALS During FY22, Aurelia trialled a mental health awareness
program at our Dargues Mine. This included mental health
workplace baseline assessment, which identified that training
focused on mental health resilience would deliver the
greatest benefit for the Dargues workforce.
Given the successful trial at Dargues, we will be implementing
the mental health awareness program throughout the
Group in FY23. In the regional communities that host
our workforces, these types of awareness and resilience
programs deliver benefits beyond our site boundaries.
Key Human Resources and Safety support staff also
completed Mental Health First Aid Training in FY22.
Historically, each of our sites had engaged different providers
for their Employee Assistance Programs (EAP). This year,
we rationalised our approach and moved to one provider for
confidential counselling services across the Group which is
available to our employees and their families free of charge.
Zero-tolerance approach to sexual harassment
Aurelia acknowledges the issues facing the resources
industry in relation to misogyny and sexual harassment,
and recognises we are not immune to these issues. For this
reason, we reinforce a zero-tolerance approach to sexual
harassment and other inappropriate behaviour.
In FY22, one incident of alleged sexual harassment at the
accommodation camp for one of our sites was lodged.
Two contractors were immediately stood down and removed
from the camp, the alleged victim was provided support and
all involved were offered counselling. This allegation was
fully investigated by Aurelia (led by an external, independent
investigation specialist) using the same methodology we
use to investigate HPRIs. The contractors’ employer also
conducted their own investigation in relation to the incident.
The Senior Management Taskforce for Significant Incidents,
the Sustainability and Risk Committee, and the Board were
provided regular updates on the investigation.
Following the incident, immediate actions were taken
to improve awareness of our zero tolerance of sexual
harassment. Further corrective actions have been identified
for the site and the broader Aurelia Group for implementation
in FY23.
54
—
The Dargues Mine Emergency Response Team
ANNUAL REPORT 2022 The kids at the Ngalii Preschool in Cobar show the laptop and iPads they were given as part of our
$2,000 donation to the preschool in February 2022. The laptop and tablets are being used to extend the
student’s learning opportunities and stay connected with their families.
COMMUNITY PERFORMANCE
—
Aurelia is committed to ensuring our presence has a
positive impact in the communities where we operate
and our long-term relationships create shared value.
Our materiality process identified the following community
performance focus areas for FY22:
Community Investment and Development
First Nations Engagement
Project Approval Engagement
Grievance Management
COMMUNITY INVESTMENT AND
DEVELOPMENT
—
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 and remote NSW.
Over the last three years, approximately 52% of our
procurement has been sourced from local communities,
which has injected approximately A$486 million into
regional NSW.
In addition to the approximately $1.3 million we paid in
Voluntary Planning Agreement (VPA) contributions (which
includes maintenance of local roads, community programs
and administration), we have also made discretionary
donations of approximately $338k to local community groups
and events over the last three years.
55
—
AURELIA METALS
These VPA contributions and donations have supported
projects such as:
Upgrade of the Braidwood Recreational Grounds
Supporting the local community radio station in Braidwood
Supporting Cobar High School to implement the Batyr@
School preventative mental health program
Supporting Cobar High School band to
purchase equipment
Assisting Cobar Public School to purchase and install
outdoor play equipment
Ongoing support for the Cobar community health
service through housing assistance for travelling
medical professionals.
Community Investments (A$)
FY20
FY21
FY22
In FY22, Aurelia commenced work on the development
of a Community Strategy that includes a social
investment framework. The Strategy aims to redefine our
approach to social investment in a way that increases the
positive impact we can have on our local communities.
A social science specialist consultancy firm was engaged
to source critical demographic information, undertake peer
benchmarking and complete detailed interviews with our
site teams. This work enabled us to identify a number of
critical stakeholder groups and opportunities for investment
in our local communities.
The key outcome of this work is a proposed model for a three-
year social investment program containing key investment
focus areas and signature partnerships that promote vibrant
regional communities.
The Strategy is scheduled to be finalised in FY23, and we
will seek to engage with external stakeholders and our local
communities to identify further investment opportunities.
Local Procurement
165m
184m
174m
Voluntary Planning Agreement
Contributions
223k
778k
318k
Discretionary Donations
102k
99k
137k
Representatives from our Dargues Mine speaking with the
children from the Braidwood Preschool about the mine and
mine safety
56
—
ANNUAL REPORT 2022 The aboriginal flag flies proudly at our Hera Mine during
Reconciliation Week 2022
FIRST NATIONS ENGAGEMENT
—
Aurelia values our relationship with First Nations Peoples on
whose land we operate, and we acknowledge their rights and
interests to protect and manage their cultural heritage.
We value their engagement through exploration and
discovery, mine development, operation and closure and
respect the responsibilities and obligations First Nations
Peoples have for Country.
We strive to meet our legal and statutory obligations and
undertake fair and respectful consultation with our host
First Nations Peoples. Across our exploration and mining
tenure, we operate on the traditional lands of the Wongaibon,
Ngiyampaa, Wiradjuri and Ngarigo.
Given the importance of First Nations Peoples to our
business, in FY22, our Managing Director and Chief
Executive Officer, and Corporate Affairs Manager met with
several of the Indigenous groups associated with our Hera
and Peak Mines. This included the Local Aboriginal Land
Council in Cobar, the Native Title Applicant the Ngemba,
Ngiyampaa, Wangaaypuwan and Wayilan, and a proud
Wiradjuri Man. The purpose of the meetings was to reinforce
our commitment to First Nations Peoples and to better
understand their priorities and opportunities for shared
value between all parties.
In FY22, Aurelia had no incidents involving First Nations
Peoples. We do not operate in any areas with Native Title
Agreements in place. However, we acknowledge there is an
active claim over areas containing our Peak and Hera Mines
which is yet to be determined. This relates to an application
made by the Ngemba, Ngiyampaa, Wangaaypuwan
and Wayilan. Aurelia continues to monitor this application
and while the application is determined by the NSW
Government, we will continue to foster fair and respectful
relationships with First Nations Peoples.
In FY22, representatives from the Condobolin Local Aboriginal Land
Council and Traditional Owners the Ngemba, Ngiyampaa, Wangaaypuwan
and Wayilwan people at our Hera Mine. Together with our Environmental
Team, the group conducted a cultural heritage survey to identify any
objects or places of cultural significance. We also took the opportunity to
complete ecological assessments while the archaeologists and ecologists
were on site. The above photo shows a First Nations representative
harvesting timber to create didgeridoos.
57
—
AURELIA METALS
GRIEVANCE MANAGEMENT
—
Aurelia investigates all complaints and grievances and
responds fairly and promptly. We take an active approach
to understanding our stakeholder issues and their concerns
through face-to-face forums.
The success of our approach to proactively engage with the
community has been demonstrated since our acquisition of
the Dargues Mine with community complaints decreasing
from 397 in FY21 to 115 complaints in FY22 (most relating
to noise).
This has been achieved through genuine, respectful
engagement with the local community. In response to
community feedback, we have implemented a number of
initiatives including on-site inspections with members of
nearby communities to determine the cause of the issue
and exploring and implementing a number of suggested
abatement opportunities.
In FY22, Aurelia did not displace or resettle any
community members or First Nations Peoples as a result
of our operations. Artisanal and small-scale mining does
not take place on or adjacent to our operations.
Complaints
Peak Mine
Hera Mine
Dargues Mine
Corporate
Total
FY20
FY21
FY22
31
11
18
1
285
397
-
-
327
416
17
2
115
-
134
PROJECT APPROVAL
ENGAGEMENT
—
During FY22, Aurelia progressed approvals for the Great
Cobar (or the New Cobar Complex) and Federation Projects.
Both projects are undeveloped ore bodies adjacent to
existing operations.
Significant stakeholder consultation was undertaken
throughout the exploration and approvals processes for
these Projects.
This consultation has included numerous site visits, heritage
clearance surveys, community information sessions and
ongoing consultation with the project specific Community
Consultative Committees (CCC). Registered Aboriginal
Parties also participated in Cultural Heritage and First
Nations training for our employees and contractors.
As a result of this active stakeholder engagement process,
Aurelia has achieved some significant milestones for
these Projects.
The Great Cobar Mine (or New Cobar Complex) received
community support and was approved by the NSW State
Government in early 2022. The proposed development
demonstrated significant benefit to the local community
and State of NSW more broadly through providing:
critical minerals (copper and zinc) which will be required
to decarbonise the economy
employment opportunities
taxes and royalties
certainty that mining will continue within the region
to ensure the Cobar township continues to thrive.
The Federation Environmental Impact Statement (EIS), which
included a Social Impact Assessment was placed on Public
Exhibition by the NSW Government in early 2022. The EIS
was on public exhibition for approximately 30 days and
received no opposition from the community.
We will continue to progress the Federation EIS with the
expectation of having the Project approved for development
in FY23.
58
—
ANNUAL REPORT 2022 CASE STUDY
ORAL HISTORY
RECORDING OF
‘CORNISHTOWN’
—
Tyrone Griffiths, Violet Betcke, and Peter Griffith standing in what used to be the main street of
Cornishtown during the oral history recording of their account of growing up in the area
In FY22, we facilitated an oral history recording of what life
was like in ‘Cornishtown’. A historic mining settlement near
our Peak Mine, Cornishtown was identified as having cultural
significance to the local community following ongoing
extensive consultation with Registered Aboriginal Parties,
the Cobar Local Aboriginal Land Council and the Ngemba
– Ngiyampaa - Wangaaypuwan and Wayilwan Native Title
Claimants in FY21.
Our commitment to protecting and preserving our First
Nations’ history demonstrates how we are helping to ensure
the absolute protection of Indigenous cultural heritage.
The town of Cobar, close to our Peak Mine, 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,
Great Cobar boasted 14 smelters, a 64m chimney stack and
employed over 2,000 people.
As part of our proposed New Cobar development, we’re
looking to access ore zones below the historical Great
Cobar Copper Mine. Extensive cultural heritage consultation
has taken place as a part of this proposed development;
the ungazetted area of Cornishtown was identified as a place
of cultural significance during this process.
We facilitated a cultural recording of the town given its
significance to our First Nations people. Environment and
Social Responsibility Officer, Laura Barnes spoke about
the recording.
“In June, Company representatives were joined at the historic
remains of Cornishtown by Tyrone Griffiths, Violet Betcke and
Peter Griffith – First Nations people who grew up in the town.
“As we wandered down the remains of the main street,
they shared stories of their childhood and what it was like
growing up in Cornishtown. The village had no power or
sewage, and the water supply was from a local farm dam
to the east of town. They recalled the dam being a source
of entertainment for local kids, riding bikes down the walls,
wetting the slope and making a mud slide, using sheets of
iron to make canoes to paddle around.
“Walking with them, you could feel their sense of community
as they spoke about the mix of Aboriginal and non-Aboriginal
people who used to live in the town, many of whom are still
friends to this day,” Laura recalled.
“As Cornishtown was ungazetted, it was eventually
demolished by the local council, an event they recounted with
great sadness. The history and culture of Cornishtown lives
on today through their memories, and the memories of other
First Nations people.
“Preserving historical accounts such as these is a way Aurelia
helps to share the histories of our First Nations people
broadly, and how we actively participate in the preservation
of the oldest, continuous living cultures on earth,”
Laura concluded.
59
—
AURELIA METALS ENVIRONMENTAL
PERFORMANCE
—
Aurelia acknowledges that the nature of our
operations can have significant environmental
impacts. From exploration and development,
through operations and into closure, Aurelia
endeavours to limit its footprint and impact
on the natural environment.
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, and we are committed to
building resilience to climate change risks and minimising
and managing greenhouse gas emissions and other climate
change impacts.
Our materiality process identified the following
environmental performance focus areas for FY22:
Climate Change
Land and Biodiversity
Water
Tailings and Waste Rock
Rehabilitation and Closure
Aurelia’s environmental compliance performance –
as measured by the Recordable Environmental Incident
Frequency Rate (REIFR) per million hours worked –
declined slightly in FY22.
The environment surrounding our Hera Mine
We experienced no material environmental, community
or heritage incidents and received no fines or penalty
infringement notices in FY22. However lower severity
warning letters were received from Regulators. These matters
have been addressed and corrective actions put in place
where appropriate (see pages 90-91).
We are targeting to reduce REIFR to ≤ 3 in FY23.
CLIMATE CHANGE
—
ALIGNING WITH THE TASK FORCE
ON CLIMATE-RELATED FINANCIAL
DISCLOSURES
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 over time.
60
—
ANNUAL REPORT 2022 Recordable Environmental Incident Frequency Rate
e
t
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n
e
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7
6
5
4
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FY21
FY22
To support this growth, we have accelerated our journey
to align with the Task Force on Climate-Related Financial
Disclosures (TCFD) and we acknowledge the importance
of achieving the objectives of the Paris Agreement and
limiting global warming to well below 2, preferably to 1.5,
degrees Celsius. We have made significant progress towards
aligning to these objectives and have undertaken the
following activities in FY22:
Completion of a Climate Change Risk and
Opportunity Assessment.
Engagement of a third-party, industry expert to assist
us to establish a base-line emissions year and to develop
a process for establishing baseline inputs to inform
decarbonisation modelling.
Through engagement with industry experts, we have
identified low carbon technologies that could be utilised
to decarbonise our business, including battery electric
vehicles (BEVs) for concentrate and ore haulage and
underground mining. The application of these technologies
to our business requires further investigation before
capital investments are made.
Our understanding and application of Australian carbon
credit units (ACCUs), Large-scale generation certificates
(LGCs) and carbon offsets has advanced through
engagement with industry experts. Further work is
required to determine how these additional costs could
impact our business in the future.
Conducting a benchmarking exercise to guide our future
decisions around setting science-based goals and targets
to achieve net zero.
Completion of a third-party expert assessment
of renewable energy projects, with a focus on the
Peak Mine. This has identified potential abatement
opportunities across the group including BEVs and
standalone renewables.
With the Australian Federal Government Climate Target
Bill recently passing the lower house, it is imperative
that we continue to determine how climate change and
decarbonisation will affect our business. Therefore, in FY23
we will set science-based goals and targets to achieve our
net zero aspirations aligned to the TCFD. Our climate change
position will be informed by scenario analysis and financial
modelling, integrating our greatest risks and opportunities,
and we will define our Scope 3 emissions profile (those
emissions produced within our supply chains) to ensure
our climate change position considers all emission sources
(Scope 1, Scope 2 and Scope 3).
RISK AND OPPORTUNITY ASSESSMENT
Climate change risks are integrated into Aurelia’s Group-wide
risk processes as detailed in our Risk Management Policy
available on our website.
The Aurelia Board, Sustainability and Risk Committee and
our Senior Leadership Team regularly consider climate
change risks and opportunities.
We recognise the importance of integrating climate
change risks and mitigation strategies into decision making
processes, for example the inclusion of a solar farm in
the Federation Project which has been described in the
Environmental Impact Statement.
Aurelia uses a standard methodology for risk management.
Appropriate controls are identified, approved and
implemented according to the level of risk (consequence
and likelihood).
Outcomes of our climate change risk and opportunity
assessment are summarised in the following table.
61
—
AURELIA METALS
Climate change-related risks and opportunities
DESCRIPTION OF RISK/
OPPORTUNITY
AURELIA ACTIONS AND PLAN
Risk: Aurelia’s operations are located in NSW,
Australia which is susceptible to bushfires,
prolonged drought and flooding rain.
Our products are predominately via train
to the Newcastle Port before being loaded
onto ships.
Drought and flooding rain have impacted
production continuity at our operations over
the last few years.
Risk: Unabated climate change is predicted
to lead to rising mean temperatures, more
frequent weather extremes and rising
sea levels. These factors have the potential
to impact Aurelia’s supply routes and access
to sites and/or sea ports.
Opportunity: A large portion of Aurelia’s
GHG emissions are a result of purchasing
electricity from the National Electricity
Market (NEM). With the Federal Government
accelerating decarbonisation targets, it is
anticipated that more renewable energy will
be available on the NEM.
Furthermore, Aurelia currently has a large
portfolio of operating assets and growth
projects that will be essential for the supply
of critical metals (copper and zinc) for the
decarbonisation of the global economy.
Aurelia sites have Emergency Preparedness
Plans in place and well trained and equipped
Emergency Response Teams who can
respond to bushfire.
Aurelia sites have detailed Water
Management Plans including a site
water balance.
The Hera Mine is continuously seeking
opportunities to secure additional ground
water including purchasing land (to access
groundwater) adjacent to operations.
The Peak Mines have identified a significant
groundwater resource within historical
mine workings. The Peak Mine has approvals
and infrastructure in place to access this
water if required.
All Aurelia sites are designed to deal with
flooding rains. However, with the recent
increase in significant rainfall events,
Dargues Mine is in the process of
implementing additional controls including a
‘turkeys nest dam’ to store excess water and
seeking approval to irrigate excess water on
mine owned land.
This risk has the potential to impact Aurelia
over a longer time period and therefore,
if the risk is increasing over time, specific
mitigating actions will be implemented.
This could include diversification of transport
routes, sea port facilities or product
holdings/stockpiles along the supply chain
route to buffer disruptions.
Given the close proximity of our assets
and exploration tenements to state owned
services, Aurelia has an excellent opportunity
to take advantage of the decarbonisation
of the national electricity grid. Aurelia has
two growth opportunities (Great Cobar
and Federation) that will produce critical
metals essential to the decarbonisation
of the global economy. This is likely to
accelerate demand and create new markets
and opportunities.
Risk: Locking ourselves into long-term,
carbon intensive contracts or acquisitions,
may increase the cost of doing business
or stop Aurelia from achieving our
decarbonisation targets.
Aurelia considers carbon emissions in
relevant capital purchases. If an acquisition
is made in the future, Aurelia will consider
how this is likely to impact our aspirations to
decarbonise the business.
Opportunity: Climate-related legislation
is expected to drive resource-efficiency
and uptake of low-emissions technologies.
This is expected to increase demand for
electrification of vehicle fleets, renewable
energy and battery storage technology.
This will present Aurelia will a strong
opportunity to increase sale volumes and
the commercial value of our critical minerals
(copper, lead and zinc).
Aurelia’s polymetallic growth projects
(Federation and Great Cobar) will supply the
minerals required as the economy transitions
to lower emissions. Copper and zinc have
been recognised by the NSW Government
as critical metals as the global economies
rapidly shift to reduced emissions.
TYPE
Physical (Acute)
Physical (Chronic)
Market
Policy and Legal
62
—
ANNUAL REPORT 2022 TYPE
Policy and Legal
Reputation
Technology
DESCRIPTION OF RISK/
OPPORTUNITY
Risk: Aurelia currently reports energy and
emissions under the Australian Governments
National Greenhouse and Energy Reporting
(NGER) scheme. State and federal climate
legislation is rapidly changing with the
Australian Federal Government recently
committing to a 43% reduction in emissions
by 2030 and Net Zero by 2050 (2005
baseline year).
Future developments or acquisitions may
be subject to climate-related legislation
such as carbon pricing and development
consent conditions.
Opportunity: Aurelia has an opportunity
to be a preferred company for the supply
of critical metals if performance exceeds
stakeholder expectations.
AURELIA ACTIONS AND PLAN
Aurelia’s Legal and Sustainability teams
monitor policy development on an ongoing
basis for potential climate-related impacts
to the business. Aurelia is committed to
offsetting our emissions through renewable
energy projects and is planning to include
a solar farm as part of the Federation
Project which is described in the Federation
Environmental Impact Statement. This will
reduce our reliance on gas generated
electricity from the Hera Mine.
The Peak and Dargues Mines are connected
to the NEM and in an enviable position able
to take advantage of renewable electricity
generated by the grid.
Aurelia is proud that we can help provide
minerals that will be critical to the global
economy as we transition to Net Zero.
Risk: Aurelia’s reputation could be impacted
through development or acquisition if we are
unable to meet our climate-related targets.
Aurelia considers climate-related
reputational risk through development and
potential acquisitions and mergers.
Opportunity: With the world moving to
decarbonise our activities, it is likely to
create opportunities or accelerate the
development of energy efficient and low
emission technology. This will create
opportunities to decarbonise base load
power and electrify vehicle fleets.
Energy efficient and renewable technology,
battery electric vehicles (BEVs).
Risk: Rapidly evolving technology is
liking to have teething issues as they are
upscaled or adapted to the mining industry.
Early adopters of new technology will likely
have unforeseen costs and issues as this
technology adapts and evolves.
Energy efficient and low emission
technology will create opportunities for
Aurelia by reducing our operating costs
and our exposure to future fossil fuel price
fluctuations or a price on carbon emissions.
Aurelia is optimistic about the development
of new technology however, to ensure
business continuity we must ensure the
technology is fit-for-purpose and able to
meet the needs of our business in terms
of efficiency and responsible allocation
of capital. While we have no immediate plans
to trial new technology, as we decarbonise
the business, energy efficient and low/
no emission technology will be critical to
our needs.
63
—
AURELIA METALS Emissions and Energy Use
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
gas fired electricity generation at the Hera Mine, and our
operational vehicle fleet. Our Scope 2 emissions relate to
purchased electricity at the Peak and Dargues Mines. In FY22,
overall emission levels have remained steady, with variations
attributed to changing ore grades and processing rates at
each site.
During FY23, we will engage with our contractors and
suppliers to begin understanding our Scope 3 emissions
profile. Scope 3 emissions are those associated with activities
that are not under our operational control (such as emissions
resulting from product transportation). This will assist us with
identifying opportunities to reduce emissions throughout our
supply chains in the future.
Greenhouse Gas Emissions (kt CO2-e)
FY20
FY21
FY22*
Scope 1 Emissions
31.7
34.5
Scope 2 Emissions
62.2
76.1
32.9
81.0
Greenhouse Gas Intensity (t CO2-e per oz Au eq)
disturbance, hazardous material, water management
and wildlife. The Green Rules are included in all inductions
with clear signage around the sites and exploration areas.
Dargues Mine
Dargues Mine is located within the Southern Tablelands of
NSW on land that has previously been heavily disturbed for
agricultural purposes. Field studies conducted during the
Environmental Assessment (EA) for the project identified ten
vegetation communities.
Two threatened fauna species, the Gang Gang Cockatoo and
the Flame Robin and two migratory species, the Black-Faced
Monarch and the White-throated Needletail, were identified
during these surveys. Dargues has an externally consulted
and approved Biodiversity Management Plan that includes
measures to ensure the protection of these species.
We also have special management measures in place to
protect wombats within the Project Area. These measures
act to ensure that wombat activity, such as burrowing, does
not increase the risks associated with infrastructure such
as dam walls. We regularly engage with the local charter of
the NSW Wildlife Information, Rescue and Education Service
(WIRES) to discuss wombats and other native species.
Dargues Mine is committed to protecting biodiversity
values and offsetting impacts to biodiversity via the NSW
Government Biodiversity Offset Scheme (BOS).
FY20
FY21
FY22*
A sign detailing our Rules to Live By and Green Rules
at the Peak Mine
Scope 1 & 2 Emissions Intensity
0.60
0.54
0.58
Energy Use and Production (GJ per oz Au eq)
Energy produced
Energy consumed
FY20
FY21
FY22*
0.60
5.30
0.47
4.47
0.44
4.68
*This is preliminary data and is subject to change pending external review
and verification.
LAND AND BIODIVERSITY
—
Aurelia is mindful that it explores and operates in regions
with unique and important biological, ecological and cultural
heritage values. Actively managing the land we work on is
critical for reducing risks to these values. We are committed
to protecting and conserving the biodiversity and are always
seeking to improve our understanding of the flora and fauna
is the areas where we live and work.
To protect land, waterways, biodiversity and the Community
we have Aurelia’s Green Rules in place across the business.
The Green Rules are similar to our safety Rules to Live By
and guide individual behaviours. The four rules manage
64
—
ANNUAL REPORT 2022 We’re utilising renewable energy of solar panels (pictured here) and wind turbines
to build a communications network at Dominion Hill near our Federation Project.
Utilising renewable energy in this build is one way we’re looking to reduce our
emissions across our operational portfolio.
Hera Mine
The Hera Mine is located within the Cobar Peneplain
Bioregion in central-western NSW. The Hera Mine has a long
history of surface and sub-surface disturbance predominately
relating to agriculture and mineral exploration activities.
Field studies conducted during the EA for the project
identified five main vegetation communities. Ground cover
within the woodland communities is predominately
dominated by native species. Whereas diversity of ground
cover is poorer in areas that are historically heavy grazed.
No threatened flora species were identified as part of the
survey effort.
The fauna survey conducted as part of the EA identified a
high diversity of native species. A total of 145 fauna species
were identified and 139 of these were native, including the
following threatened species within the project area:
Major Mitchell’s Cockatoo
Grey-crowned Babbler
Hooded Robin
Chestnut Quail-thrush
Speckled Warbler
Pied Honeyeater
Diamond Firetail
Superb Parrot
Black-chinned Honeyeater
Little Pied Bat.
The Hera Mine is managed in accordance with a Biodiversity
Management Plan and has committed to offsetting impacts
to biodiversity in accordance with the NSW Governments
Biodiversity Offset Scheme (BOS).
During FY22, we gained approval for the ‘Chelsea’
biodiversity offset property via a Biodiversity Stewardship
Agreement (BSA). This property is approximately
2,500 hectares and we have committed to protecting
its biodiversity values and improving them over time.
This property has been assessed under the NSW
Governments Biodiversity Assessment Methodology (BAM).
The BSA is the largest biodiversity offset property ever
secured in NSW and the only BSA to be secured on a Western
Land Lease (WLL).
Peak Mine
The Peak Mine is located within the Cobar Peneplain
Bioregion in central-western NSW.
Threatened species that occur within the project area include
the Cobar Greenhood Orchid which was first detected in 2013
and it has been detected regularly since this time. No other
threatened species have been identified in the project area.
However, the Kultarr (an endangered mouse-sized marsupial)
is known to occur adjacent to the project area. As such, we
have specific management actions in place to handle any
potential sightings or wildlife injuries.
65
—
AURELIA METALS CASE STUDY
‘CHELSEA’
BIODIVERSITY
OFFSET AREA
—
Vegetation at our Chelsea biodiversity offset property
In FY22, a Biodiversity Stewardship Agreement (BSA) was
signed by Aurelia and the NSW government for the ‘Chelsea’
biodiversity offset property; the largest offset property in
NSW and the only biodiversity offset property established on
a Western Land Lease (WLL).
“Regular field monitoring in accordance with the NSW
government’s BAM standardised methodology of the
vegetation communities, flora, and fauna on the property kick
started our work towards establishing a BSA for the property,”
Jonathon continued.
The signing was the cumulation of close to a decade of
expertise, consultation, and persistent effort. The property
has significantly contributed to biodiversity in NSW and
demonstrates our commitment to minimising the impact
of our operations on the natural environments in which
we operate.
Group Environment Manager, Jonathon Thompson explained
what a biodiversity offset property is, and work that was
completed to establish a BSA for the Chelsea property.
“The NSW government’s Biodiversity Offsets Scheme
is the framework for offsetting unavoidable impacts on
biodiversity from development (like mining) with biodiversity
gains through landholder stewardship agreements.
The system ensures development is offset by like-for-like
vegetation communities. We purchased the Chelsea property
as a biodiversity offset property for our Hera Mine in 2013
and started working closely with the government of NSW
to establish a BSA under the Biodiversity Conservation
Act 2016,” Jonathon explained.
“We chose the Chelsea property because the vegetation
communities on the property were similar to those in
our mining area and were relatively intact, despite being
surrounded by modern agricultural activities, and it is
adjacent to a state conservation area, significantly increasing
the ecological value of this property.
“Given the Chelsea property is a WLL held in an ‘in
perpetuity’ agreement with the NSW government, we
worked closely with them to negotiate terms to apply the
BSA to the title. For example, as the land is a WLL, the NSW
Forestry Corporation (NSWFC) owned the timber assets on
the property. To protect biodiversity values in perpetuity,
we compensated NSWFC for the timber to ensure the trees
remained standing and continued to provide ecological value.
“Our BSA has now generated multiple ‘biodiversity credits’,
and a Biodiversity Management Plan was developed in
consultation with the NSW government and independent
ecologists to ensure the biodiversity values on the property
are protected and improved over-time.
“We have used some of our biodiversity credits to offset
legacy disturbance at our Hera Mine and the Federation
Project exploration decline. When a credit is retired, we
make a payment into the Total Fund Deposit (TFD). Once
all the credits are retired, the TFD will be used to fund
management projects to improve biodiversity at the Chelsea
property in perpetuity. This ensures the property is protected
through time and money is allocated to protect biodiversity,”
Jonathon concluded.
66
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ANNUAL REPORT 2022 WATER
—
Water is a resource we share with the environment and
our communities, and we recognise that we need to use
water efficiently and protect the surrounding environment.
Aurelia’s sites are in locations with typically low rainfall and
high evaporation. For example, around Cobar, the average
annual rainfall is approximately 400mm and evaporation
rate is approximately 2m per annum.
Aurelia does not discharge to the surrounding environment.
All water is reused onsite wherever possible. In times of
heavy rainfall, or when our underground mines produce
excess water, we manage the excess via evaporation ponds
or irrigate mine owned pasture for grazing.
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 users. No emergency discharges occurred
this year.
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 that operation, water consumption and
efficiency at Dargues Mine has largely been estimated.
Across the Group, water use efficiency has improved
since FY20.
Water Use
FY20
FY21
FY22
Water withdrawal (ML)
-
581
709
Water consumption (ML)
1,162
1,266
1,170
Water use efficiency (kL / oz
Au eq)
7.48
6.79
5.94
* Data is not available prior to FY21.
TAILINGS MANAGEMENT
—
Our operations generate tailings (mineral processing
residues) that are stored in engineered facilities designed and
built in accordance with the Australian National Committee
on Large Dams (ANCOLD) and NSW Dam Safety Guidelines.
Aurelia operates central-thickened tailings storage facilities
(TSFs) at Hera Mine and Peak Mine and a perimeter discharge
TSF at Dargues Mine.
TSF designs are informed by industry experts and risk
assessed to determine appropriate designs while considering
local meteorological (ie. low rainfall and high evaporation
rates), topographical (ie. utilising local topography to reduce
site footprints) and other site-specific conditions.
Our TSFs are operated in accordance with site specific
operation and maintenance manuals. This includes regular
inspections and an annual inspection by an independent
TSF engineer. Each of our sites have completed a dam
break analysis, and have a Pollution Incident Response
Management Plans in place.
In FY22, ATC Williams (ATCW) were engaged to complete
an independent gap analysis of our TSFs against the
International Council on Mining and Metals (ICMM) Global
Industry Standard on Tailings Management (GISTM).
ATCW are globally recognised tailings consultants who
specialise in life-of-mine tailings management.
ATCW inspected each of our TSFs and conducted a thorough
documentation review. They commended Aurelia for our
commitment to the safe and effective management of our
TSFs and identified some opportunities to improve our risk
assessments, performance monitoring, and decommissioning
and closure planning to better align with the requirements
of GISTM.
In FY22, Aurelia developed a Tailings Storage Facility
Catastrophic Hazard Standard and associated Critical Control
Verification process.
Tailings Production (kt)
FY20
FY21*
FY22
Tailings production
896
1,119
1,165
* Tailings generation increased in FY21 due to the acquisition of Dargues
Environment and Social
Responsibility Officer,
Laura Barnes conducting
water monitoring at
our Peak Mine
67
—
AURELIA METALS CASE STUDY
RESPONSE TO SIGNIFICANT
RAINFALL AT
THE DARGUES MINE
—
The Dargues Mine TSF
In March 2022, record rainfall and associated run-off
filled the TSF at our Dargues Mine to its operational
storage capacity. The possibility water would be released into
downstream waterways was a real threat if the rain continued.
To ensure this didn’t happen, our Trigger Action Response
Plan decided to halt production for four days.
The production halt prevented an offsite release from the TSF.
Production resumed based on a favourable weather outlook,
expert advice from our Tailings Engineer, and amendments
to the TSF’s operating controls and monitoring regime.
The decision to halt production and the actions following
the event highlight our Value of courage and our unwavering
commitment to environmental responsibility.
The Dargues TSF is designed and built-in accordance with
the ANCOLD and NSW Dam Safety Guidelines. It has an
emergency spillway that allows for the release of excess
water to downstream waterways without impacting the
integrity or stability of the dam walls. However, as a
conduction of our development approval, Dargues is a
zero-discharge site.
At the time of the event, our Managing Director and Chief
Executive Officer, Dan Clifford spoke to the media about what
we were doing to address the situation.
“At Aurelia Metals, we take our environmental responsibility
very seriously. We have notified the appropriate regulators
about the impact of the rainfall and continue to work closely
with them to manage the situation.
“Independent accredited laboratory testing of the
accumulated water shows it satisfies the requirements for
use as stock water. Additionally, we are conducting extensive
water quality sampling of the immediate downstream
environment in the event of an offsite release,” Dan said.
While production was halted, representatives from the NSW
Environment Protection Authority (EPA) inspected the TSF
and assessed the relevant risks. An out-of-cycle Community
Consultative Committee meeting was also held to brief
the community.
Members from our Board also inspected the facility to
ensure appropriate measures were being taken to mitigate
the situation.
As a result of the actions taken at our Dargues Mine,
we successfully contained excess water within the
TSF and have so far avoided the need to discharge to
downstream waterways. We will continue to work closely
with the relevant government authorities and the community
to reduce the likelihood of this occurring.
Since the incident, a number of controls have been
implemented to reduce the likelihood of a release.
These include:
Accelerating the TSF embankment raise to increase the
TSF’s excess water holding capacity.
Progressing the approvals required for the construction of
a ‘turkeys nest dam’ that will be used to store excess runoff
water that would otherwise report to the TSF.
Extensive consultation with the relevant government
authorities about using the excess runoff water for dust
suppression onsite and irrigation of pastures used for
stock grazing.
68
—
ANNUAL REPORT 2022 WASTE ROCK MANAGEMENT
—
Waste rock is stored in purpose-built waste
rock emplacements. Where waste rock is non-acid forming,
it is used in civil construction activities including TSF
embankment raises and road base.
A TSF embankment raise is currently being constructed at
the Peak Mine that utilises waste rock. The embankment raise
will allow the Peak Mines to store more tailings within the TSF
without expanding the TSF footprint and therefore reducing
our impact on biodiversity and the environment. The raise
is being designed and supervised by an expert tailings
consultant and is part of a larger facility plan.
Most of the waste rock material currently being generated at
the 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 use the waste rock as backfill (ie. empty
stope voids).
Waste Rock Brought to the Surface (kt)
Waste rock production
189
153
204
FY20
FY21
FY22
REHABILITATION AND CLOSURE
—
Closure planning is an essential process that occurs at all
stages of a mine’s lifecycle. Aurelia acknowledges that the
end of mine’s operational life does not mean the end of its
social and environmental impact. We recognise that we have
a responsibility to close mines in a way that leaves a safe,
stable and self-supporting environment.
Planning for closure must consider economic and social
parameters and determine what the likely land use will be
post-closure. With longer mine lives, where the planning
horizon for closure extends beyond a five-year period,
closure planning becomes more challenging given the rapidly
changing world we live in. Therefore, it is critical that we
take the lead on closure planning and ensure we regularly
review our identified closure risks and implementation of
mitigating actions.
All of Aurelia’s operations have an approved mine
closure plan developed in accordance with NSW
Government regulation. New legislation comes into force in
FY23 which requires each project to have a long-term closure
plan as well as a three-year rolling plan that must be updated
on an annual basis.
Our closure plans are supported by a Rehabilitation Cost
Estimate (RCE), which informs our closure provision that is
backed by Aurelia and secured via a government guarantee.
To ensure our closure provisions remain current, Aurelia
engages independent third-party consultants to undertake an
annual review. This is also reviewed by the Audit Committee
to ensure its veracity.
Recently, Aurelia engaged SLR Consulting (SLR) to review
of our RCEs. SLR have previously undertaken work for the
NSW government to benchmark rehabilitation costs including
civil works, material availability, project management and
monitoring rates.
The review involved site visits to all our projects to verify
disturbance footprints, built infrastructure and legacy sites.
SLR collected local rates for civil works and material
movement (if available), or they leant on the benchmarking
work they had completed across NSW. As a result of the
review, Aurelia increased our closure provision for all sites.
In FY23, we’ll formalise our expectations around closure in
a Group Standard. The information is currently captured
in site management plans, but the Group Standard will
ensure a consistent approach across jurisdictions and
geographical boundaries.
We continue to refine and investigate ways to better close our
mines through various studies, consultation and progressive
rehabilitation of areas no longer required for operations.
69
—
AURELIA METALS GRI CONTENT INDEX
—
Aurelia Metals has reported the information cited in this GRI content index for the period 1 July 2021 to 30 June 2022 with reference to the GRI Standards
as listed in the table below, the 2010 G4 Sector Disclosures for Mining and Metals and the United Nations Sustainable Development Goals.
GRI DISCLOSURE
GRI 2: General Disclosures 2021
2-1 Organizational details
2-2 Entities included in the organization’s sustainability reporting
2-3 Reporting period, frequency and contact point
2-4 Restatements of information
2-5 External assurance
2-6 Activities, value chain and other business relationships
2-7 Employees
2-8 Workers who are not employees
2-9 Governance structure and composition
2-10 Nomination and selection of the highest governance body
2-11 Chair of the highest governance body
2-12 Role of the highest governance body in overseeing the management
of impacts
2-13 Delegation of responsibility for managing impacts
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
Our Profile
About This Report
Audit Report
Our Mines / Our Exploration
Prospects
People Performance
Governance Structure /
Director’s Report
2-14 Role of the highest governance body in sustainability reporting
Material Topics
2-15 Conflicts of interest
Operating with Integrity
2-16 Communication of critical concerns
2-17 Collective knowledge of the highest governance body
Governance Structure /
Stakeholder Engagement
Governance Structure /
Director’s Report
2-18 Evaluation of the performance of the highest governance body
Governance Structure
2-19 Remuneration policies
2-20 Process to determine remuneration
2-22 Statement on sustainable development strategy
2-23 Policy commitments
2-24 Embedding policy commitments
2-25 Processes to remediate negative impacts
2-26 Mechanisms for seeking advice and raising concerns
2-27 Compliance with laws and regulations
2-28 Membership associations
2-29 Approach to stakeholder engagement
Remuneration Report
Our Approach to
Sustainability
Governance Structure
Operating with Integrity /
Grievance Management
Governance Structure /
Stakeholder Engagement
Operating with Integrity
Stakeholder Engagement
70
—
ANNUAL REPORT 2022
GRI DISCLOSURE
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
2-30 Collective bargaining agreements
Our Success is Your Success
GRI 3: Material Topics 2021
3-1 Process to determine material topics
3-2 List of material topics
3-3 Management of material topics
GRI 201: Economic Performance 2016
Material Topics
201-1 Direct economic value generated and distributed
Economic Contribution
201-2 Financial implications and other risks and opportunities due to
climate change
Climate Change
201-4 Financial assistance received from government
Operating with Integrity
GRI 203: Indirect Economic Impacts 2016
203-1 Infrastructure investments and services supported
Community Investment and
Development
GRI 204: Procurement Practices 2016
204-1 Proportion of spending on local suppliers
GRI 205: Anti-corruption 2016
Community Investment and
Development
205-2 Communication and training about anti-corruption policies and
procedures
Operating with Integrity
205-3 Confirmed incidents of corruption and actions taken
GRI 206: Anti-competitive Behaviour 2016
206-1 Legal actions for anti-competitive behaviour, anti-trust, and
monopoly practices
Operating with Integrity
GRI 207: Tax 2019
207-1 Approach to tax
207-2 Tax governance, control, and risk management
207-3 Stakeholder engagement and management of concerns related to tax
Operating with Integrity
207-4 Country-by-country reporting
GRI 302: Energy 2016
302-1 Energy consumption within the organization
302-3 Energy intensity
GRI 303: Water and Effluents 2018
303-1 Interactions with water as a shared resource
303-2 Management of water discharge-related impacts
303-3 Water withdrawal
303-4 Water discharge
303-5 Water consumption
GRI 304: Biodiversity 2016
Climate Change
Water
71
—
AURELIA METALS
GRI DISCLOSURE
304-1 Operational sites owned, leased, managed in, or adjacent to, protected
areas and areas of high biodiversity value outside protected areas
304-2 Significant impacts of activities, products and services on biodiversity
304-3 Habitats protected or restored
304-4 IUCN Red List species and national conservation list species with
habitats in areas affected by operations
MM2 Number and percentage of total sites identified as requiring biodiversity
management plans according to stated criteria, and the number (percentage)
of those sites with plans in place
GRI 305: Emissions 2016
305-1 Direct (Scope 1) GHG emissions
305-2 Energy indirect (Scope 2) GHG emissions
305-4 GHG emissions intensity
305-5 Reduction of GHG emissions
GRI 306: Waste 2020
306-1 Waste generation and significant waste-related impacts
306-2 Management of significant waste-related impacts
306-3 Waste generated
306-4 Waste diverted from disposal
306-5 Waste directed to disposal
MM3 Total amounts of overburden, rock, tailings and sludges and their
associated risks
GRI 308: Supplier Environmental Assessment 2016
308-1 New suppliers that were screened using environmental criteria
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
Land and Biodiversity
Climate Change
Tailings Management /
Waste Rock Management
308-2 Negative environmental impacts in the supply chain and actions taken
Economic Contribution
GRI 401: Employment 2016
401-1 New employee hires and employee turnover
People Performance
GRI 402: Labour/Management Relations 2016
MM4 Number of strikes and lock-outs exceeding one week’s duration, by
country
An inclusive workplace that
thrives on diversity
72
—
ANNUAL REPORT 2022
GRI DISCLOSURE
GRI 403: Occupational Health and Safety 2018
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
403-1 Occupational health and safety management system
Management Systems
403-2 Hazard identification, risk assessment, and incident investigation
Risk Management / Incident
Investigation
403-4 Worker participation, consultation, and communication on occupational
health and safety
Safety Culture
403-5 Worker training on occupational health and safety
403-6 Promotion of worker health
Growing our People to Grow
with Us
Health and Wellbeing
403-7 Prevention and mitigation of occupational health and safety impacts
directly linked by business relationships
Contractor Management
403-8 Workers covered by an occupational health and safety
management system
403-9 Work-related injuries
403-10 Work-related ill health
GRI 404: Training and Education 2016
Management Systems
Safety Culture
404-2 Programs for upgrading employee skills and transition
assistance programs
Growing Our People to Grow
with Us
404-3 Percentage of employees receiving regular performance and career
development reviews
Our Success is Yours
GRI 405: Diversity and Equal Opportunity 2016
405-1 Diversity of governance bodies and employees
People Performance
405-2 Ratio of basic salary and remuneration of women to men
Our Success is Yours
GRI 406: Non-Discrimination 2016
406-1 Incidents of discrimination and corrective actions taken
GRI 408: Child Labour 2016
An Inclusive Workplace that
Thrives on Diversity / Health
and Wellbeing
408-1 Operations and suppliers at significant risk for incidents of child labour
Operating with Integrity
GRI 409: Forced or Compulsory Labour 2016
409-1 Operations and suppliers at significant risk for incidents of forced or
compulsory labour
Operating with Integrity
GRI 410: Security Practices 2016
410-1 Security personnel trained in human rights policies or procedures
Operating with Integrity
GRI 411: Rights of Indigenous Peoples 2016
411-1 Incidents of violations involving rights of indigenous peoples
MM5 Total number of operations taking place in or adjacent to Indigenous
peoples’ territories, and number and percentage of operations or sites where
there are formal agreements with Indigenous peoples’ communities
First Nations Engagement
73
—
AURELIA METALS
GRI DISCLOSURE
GRI 413: Local Communities 2016
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
413-1 Operations with local community engagement, impact assessments, and
development programs
MM6 Number and description of significant disputes relating to land use,
customary rights of local communities and Indigenous peoples
MM7 The extent to which grievance mechanisms were used to resolve disputes
relating to land use, customary rights of local communities and Indigenous
peoples’, and the outcomes
MM8 Number (and percentage) of company operating sites where artisanal
and small-scale mining takes place on, or adjacent to, the site; the associated
risks and the actions taken to manage and mitigate these risks
MM9 Sites where resettlements took place, the number of households
resettled in each, and how their livelihoods were affected in the process
GRI 414: Supplier Social Assessment 2016
414-1 New suppliers that were screened using social criteria
414-2 Negative social impacts in the supply chain and actions taken
GRI 415: Public Policy 2016
Stakeholder Engagement /
Community Investment and
Development
First Nations Engagement /
Grievance Management
Grievance Management
Economic Contribution
415-1 Political contributions
Operating with Integrity
Closure Planning
MM10 Number and percentage of operations with closure plans
Rehabilitation and Closure
74
—
ANNUAL REPORT 2022
75
—
AURELIA METALS MINERAL RESOURCE
AND ORE RESERVE
STATEMENT
—
76
—
ANNUAL REPORT 2022 C0MPETENT PERSONS STATEMENTS
—
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 Resource and Ore Reserve’.
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 Resource
and Ore Reserve’. 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.
HERA AND FEDERATION
MINERAL RESOURCE ESTIMATES
—
Compilation of the drilling database, assay validation and
geological interpretations for the Hera and Federation Mineral
Resource Estimates as well as 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. 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 they
are undertaking to qualify as Competent Persons as defined
in the 2012 Edition of the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resource and Ore Reserve’.
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 Resource and
Ore Reserve’. 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 Resource and
Ore Reserve’. 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.
AURELIA METALS
77
77
—
—
AURELIA METALS C0MPETENT PERSONS STATEMENTS
—
DARGUES ORE RESERVE
ESTIMATE
—
FEDERATION 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 Resource and Ore Reserve’.
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.
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 Resource and Ore Reserve’.
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 Nymagee 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 Nymagee 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 Resource
and Ore Reserve’. 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.
78
—
ANNUAL REPORT 2022 MINERAL RESOURCE AND ORE RESERVE
—
The Group’s annual Mineral Resource and Ore Reserve statement is reported for its 100% owned Peak, Hera, Dargues and
Federation Mines, along with Mineral Resource Estimates (MREs) for its 95% owned Nymagee Project in New South Wales (NSW).
The Mineral Resource and Ore Reserve estimates are reported in accordance with the guidelines of the 2012 Edition of the
Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserve (“JORC Code 2012”). Estimates are
reported as at 30 June 2022.
Group Mineral Resource and Ore Reserve estimates are presented in Table 1 and Table 2. Estimates for each mine and deposit are
summarised in Table 3 to Table 12.
TABLE 1. GROUP MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2022
Class
Measured
Indicated
Inferred
Total
Tonnes
(kt)
Au
(g/t)
5,200
14,000
9,400
29,000
2.7
1.2
0.7
1.3
Cu
(%)
0.6
1.4
1.5
1.3
Pb
(%)
1.8
1.7
1.4
1.6
Zn
(%)
2.4
2.8
2.3
2.5
Ag
(g/t)
15
9
9
10
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, Dargues and
Federation, and a A$100/t NSR for Hera. NSR is an estimate of the net recoverable value per tonne including offsite costs, payables, royalties and metal
recoveries. Values are reported to two significant figures which may result in rounding discrepancies in the totals.
TABLE 2. GROUP ORE RESERVE ESTIMATE AS AT 30 JUNE 2022
Class
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
Au
(g/t)
1,700
4,000
5,700
240
290
270
2.7
1.6
1.9
Cu
(%)
0.5
0.8
0.7
Pb
(%)
2.3
3.4
3.1
Zn
(%)
2.8
5.5
4.7
Ag
(g/t)
14
8
10
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 2022
Class
Measured
Indicated
Inferred
Total
Tonnes
(kt)
Au
(g/t)
2,000
7,400
6,000
15,000
2.2
1.1
0.6
1.1
Cu
(%)
1.2
1.7
2.2
2.0
Pb
(%)
0.2
0.1
0.1
0.1
Zn
(%)
0.2
0.1
0.1
0.1
Ag
(g/t)
9
6
9
8
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.
79
—
AURELIA METALS TABLE 4. PEAK MINE LEAD-ZINC MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2022
Class
Measured
Indicated
Inferred
Total
Tonnes
(kt)
Au
(g/t)
1,800
1,200
600
3,600
3.0
2.4
1.3
2.5
Cu
(%)
0.4
0.3
0.4
0.4
Pb
(%)
3.9
3.8
3.4
3.8
Zn
(%)
5.3
4.7
6.0
5.2
Ag
(g/t)
25
16
27
22
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 5. HERA MINE MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2022
Class
Measured
Indicated
Inferred
Total
Tonnes
(kt)
Au
(g/t)
800
500
400
1,700
1.7
1.8
0.9
1.6
Cu
(%)
0.1
0.1
0.1
0.1
Pb
(%)
2.1
1.9
1.5
1.9
Zn
(%)
3.1
2.9
2.0
2.8
Ag
(g/t)
19
16
7
16
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 2022
Class
Measured
Indicated
Inferred
Total
Tonnes
(kt)
Au
(g/t)
600
400
400
1,400
5.3
4.2
2.8
4.3
Au
(koz)
100
54
37
190
Note: The Dargues 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 7. FEDERATION DEPOSIT MINERAL RESOURCE ESTIMATE AS AT 30 JUNE 2022
Class
Indicated
Inferred
Total
Tonnes
(kt)
3,100
1,900
5,000
Au
(g/t)
1.2
0.5
0.9
Cu
(%)
0.3
0.3
0.3
Pb
(%)
5.6
5.2
5.4
Zn
(%)
9.4
8.9
9.2
Ag
(g/t)
7
6
6
Note: The Federation MRE utilises A$120/t NSR cut-off mineable shapes that include internal dilution. Values are reported to two significant figures which
may result in rounding discrepancies in the totals.
80
—
ANNUAL REPORT 2022 ORE RESERVE ESTIMATES
—
TABLE 8. PEAK MINE COPPER ORE RESERVE ESTIMATE AS AT 30 JUNE 2022
Class
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
440
1,200
1,600
240
230
230
Au
(g/t)
2.5
1.7
2.0
Cu
(%)
1.4
2.0
1.8
Pb
(%)
0.2
0.1
0.1
Zn
(%)
0.2
0.1
0.1
Ag
(g/t)
9
6
7
Note: The Peak copper Ore Reserve Estimate utilises a A$80/t NSR cut-off for development and A$175-215/t NSR for stoping depending on mine area.
Values are reported to two significant figures which may result in rounding discrepancies in the totals.
TABLE 9. PEAK MINE LEAD-ZINC ORE RESERVE ESTIMATE AS AT 30 JUNE 2022
Class
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
560
370
920
310
250
290
Au
(g/t)
2.8
1.9
2.4
Cu
(%)
0.3
0.3
0.3
Pb
(%)
5.3
4.9
5.1
Zn
(%)
6.2
5.7
6.0
Ag
(g/t)
21
21
21
Note: The Peak lead-zinc Ore Reserve Estimate utilises a A$80/t NSR cut-off for development and A$185/t NSR for stoping. Values are reported to two
significant figures which may result in rounding discrepancies in the totals.
TABLE 10. HERA MINE ORE RESERVE ESTIMATE AS AT 30 JUNE 2022
Class
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
Au
(g/t)
450
140
590
160
170
160
1.4
2.0
1.6
Pb
(%)
2.1
1.8
2.0
Zn
(%)
3.1
2.4
2.9
Ag
(g/t)
20
18
19
Note: The Hera Ore Reserve Estimate utilises a A$80/t NSR cut-off for development and A$100/t NSR cut-off for stoping. Values are reported to two
significant figures which may result in rounding discrepancies in the totals.
TABLE 11. DARGUES MINE ORE RESERVE ESTIMATE AS AT 30 JUNE 2022
Class
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
290
130
420
240
120
200
Au
(g/t)
4.7
2.4
4.0
Note: The Dargues Ore Reserve Estimate utilises a A$80/t NSR cut-off for development and A$120/t NSR cut-off for stoping. Values are reported to two
significant figures which may result in rounding discrepancies in the totals.
TABLE 12. FEDERATION MINE ORE RESERVE ESTIMATE AS AT 30 JUNE 2022
Class
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
Au
(g/t)
0
2,200
2,200
0
340
340
0
1.4
1.4
Cu
(%)
0
0.3
0.3
Pb
(%)
0
5.3
5.3
Zn
(%)
0
8.9
8.9
Ag
(g/t)
0
6
6
Note: The Federation Ore Reserve Estimate utilises an A$80/t NSR cut-off for development and A$160/t NSR cut-off for stoping. Values are reported to two
significant figures which may result in rounding discrepancies in the totals.
81
—
AURELIA METALS FINANCIAL
STATEMENTS
—
The open-pit at the Peak Mine
82
—
ANNUAL REPORT 2022 Company Information
Directors’ Report
Operations and Financial Review
Letter from the Chairman
of the Remuneration and
Nomination Committee
Remuneration Report (Audited)
Auditor's Independence Declaration
Consolidated Statement
of Profit or Loss and Other
Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to Financial Statements
Director's Declaration
Auditor's Report
84
85
92
116
120
147
148
149
151
152
153
198
199
AURELIA METALS
83
83
—
—
AURELIA METALS COMPANY
INFORMATION
—
AURELIA METALS LIMITED ABN 37 108 476 384
DIRECTORS
—
The Company’s Directors in office during the year ended and until the date of this report are set out below.
The Directors were in office for the entire period unless otherwise stated and excluding the Managing Director and CEO,
all directors are deemed to be independent.
NAME
POSITION
DATE(S) OF CHANGE DURING YEAR
Peter Botten
Daniel Clifford
Non-Executive Chairman
Non-Executive Director
appointed 5 November 2021
appointed 13 September 2021
Managing Director and CEO
Lawrence Conway
Non-Executive Director
Susan Corlett
Helen Gillies
Paul Harris
Robert Vassie
Non-Executive Director
Interim Non-Executive Chairman
period 2 March 2021 to 4 November 2021
Non-Executive Director
Non-Executive Director
Non-Executive Director
Company Secretaries
Stock exchange listing
Auditors
Ian Poole
Gillian Nairn (resigned 30 June 2022)
Aurelia Metals Limited shares are listed
on the Australian Securities Exchange
(ASX Code: AMI)
Ernst & Young
111 Eagle Street
Brisbane QLD 4000
Registered office and principal
place of business
Aurelia Metals Limited
Level 17, 144 Edward Street,
Brisbane QLD 4000
GPO Box 7, Brisbane QLD 4001
Telephone: (07) 3180 5000
Email: office@aureliametals.com.au
Share register
Website
www.aureliametals.com.au
Automic Group
Level 5, 126 Phillip Street,
Sydney NSW 2000
Investor services: 1300 288 664
General enquiries: (02) 8072 1400
Email: hello@automic.com.au
www.automicgroup.com.au
84
—
DIRECTOR’S
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 2022, 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 2022.
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.
DANIEL CLIFFORD
Managing Director and CEO
Appointed Managing Director CEO 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 and 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), resigned
November 2019.
PETER BOTTEN AC CBE
LAWRENCE CONWAY
Independent Non-Executive Chairman
Appointed as a Director of the Company on 13
September 2021 and as Independent Non-Executive
Chairman on 5 November 2021
Mr Botten is an experienced executive. He was the Managing
Director of Oil Search Limited from 28 October 1994 until
25 February 2020, overseeing its development into a
major Australian Securities Exchange-listed company.
Peter has extensive worldwide experience in the oil and
gas industry, holding various senior technical, managerial
and board positions in a number of listed and government-
owned bodies. He has a Bachelor of Science in Geology from
the Royal School of Mines at Imperial College London.
During the past three years, Mr Botten has served as
a Director of:
AGL Energy Limited (ASX: AGL), appointed October 2016;
Karoon Energy Limited (ASX: KAR), appointed October
2020; and
Oil Search Limited (ASX: OSH), retired February 2020.
Mr Botten is a Director of the Oil Search Foundation, and
Board Member of the Hela Provincial Health Authority in
Papua New Guinea.
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.
85
—
AURELIA METALS DIRECTORS’ REPORT (CONTINUED)
1. DIRECTORS AND OFFICERS (CONTINUED)
—
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), appointed
September 2016; and
Yancoal Australia Limited (ASX: YAL), appointed
January 2018.
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
Highfield Resources Limited (ASX: HFR) , appointed
March 2022.
SUSAN CORLETT
Independent Non-Executive Director
Appointed as a Director of the Company on 3 October
2018 and was Interim Independent Non-Executive
Chairman from 2 March 2021 to 4 November 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 the 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.
HELEN GILLIES
Independent Non-Executive Director
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 HoldCo
Pty Ltd (the holding company for Bankstown and Camden
Airports), Lexon Insurance Pty Ltd and Yancoal Australia
Limited (ASX: YAL). She has undergraduate degrees in
86
—
DIRECTORS’ REPORT (CONTINUED)
1. DIRECTORS AND OFFICERS (CONTINUED)
—
ROBERT VASSIE
IAN POOLE
Independent Non-Executive Director
Chief Financial Officer and Company Secretary
Appointed as Company Secretary on 1 July 2020
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.
Appointed as a Director of the Company
on 21 January 2021
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, with
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), resigned February 2020;
Ramelius Resources Limited (ASX: RMS), appointed
January 2021; and
Alita Resources Limited (ASX: A40, delisted
October 2020).
DIRECTORS AND OFFICERS WHO NO LONGER HOLD OFFICE
AT THE DATE OF THIS REPORT ARE AS FOLLOWS:
GILLIAN NAIRN
Company Secretary during the period from 2 June 2019 to 30 June 2022
87
—
AURELIA METALS DIRECTORS’ REPORT (CONTINUED)
2. DIRECTORS’ INTERESTS
—
At 30 June 2022, the interests of the Directors in the shares and other equity securities of the Company were:
DIRECTOR
Peter Botten
Daniel Clifford
Lawrence Conway
Susan Corlett
Paul Harris
Helen Gillies
Robert Vassie
Total
ORDINARY SHARES
PERFORMANCE RIGHTS
-
3,130,402
225,850
3 33,731
-
250,000
250,000
3,889,983
-
4,914,811
-
-
-
-
4,914,811
3. 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:
DIRECTORS’
MEETINGS
COMMITTEE MEETINGS OF THE BOARD:
Audit
Remuneration & Nomination
Risk & Sustainability
(I)
(II)
(I)
(I)
(I)
(I)
(I)
(I)
9
11
11
11
11
11
11
9
11
10
11
11
11
11
-
-
5
5
5
-
-
-
-
5
5
5
-
-
-
-
-
-
7
7
7
-
-
-
-
7
7
7
-
-
-
4
-
4
4
-
-
-
4
-
4
4
DIRECTOR
Peter Botten
Daniel Clifford
Lawrence Conway
Susan Corlett
Paul Harris
Helen Gillies
Robert Vassie
(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 2022 are:
Audit Committee: Lawrence Conway (Chairman), Susan Corlett and Paul Harris
Remuneration and Nomination Committee: Paul Harris (Chairman), Helen Gillies and Robert Vassie
Sustainability and Risk Committee: Susan Corlett (Chairman), Helen Gillies and Robert Vassie
88
—
DIRECTORS’ REPORT (CONTINUED)
4. 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 Secretary(s), 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.
5. 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.
6. DIVIDENDS
—
The Board of Directors did not declare a dividend for the year ended 30 June 2022 (30 June 2021: Nil) in favour of prioritising
growth funding (refer to Section 3 of the Operations and Financial Review for detail on Aurelia’s strategy progression and
growth projects).
7. 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
INCORPORATION DATE
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
15 May 2006
20 August 2009
7 November 2011
26 February 2003
31 October 1977
12 January 2006
3 February 2005
89
—
AURELIA METALS DIRECTORS’ REPORT (CONTINUED)
8. PERFORMANCE RIGHTS
—
As at the date of this report, there are 13,018,241 Performance Rights on issue. The Performance Rights are unlisted and have
terms as set out below:
GRANT
DATE
EXPIRY OR
TEST DATE
EXERCISE
PRICE
BALANCE
AT START
OF YEAR
GRANTED
DURING
THE YEAR
VESTED
DURING
THE
PERIOD
EXPIRED
DURING
THE
PERIOD
BALANCE
AT DATE
OFF
REPORT
04-12-18
29-11-19
29-11-19
19-11-20
26-12-20
04-11-21
09-11-21
Total
(76,992)
(230,977)
(380,759)
(2,089,961)
30-06-21
30-06-22
25-11-21
30-06-23
30-06-23
30-06-24
30-06-24
nil
nil
nil
nil
nil
nil
nil
307,969
2,470,720
1,565,201
1,696,714
4,482,758
-
-
-
-
-
-
-
1,866,231
6,741,473
(1,565,201)
-
-
-
-
-
-
-
1,696,714
-
-
(968,586)
3,514,172
-
1,866,231
(800,349)
5,941,124
10,523,362
8,607,704
(2,022,952)
(4,089,873)
13,018,241
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.
9. FUTURE DEVELOPMENTS
—
Refer to the Operations and Financial Review for information on future prospects of the Company.
10. 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 FY22, the Group was issued with the following notices from relevant authorities:
Peak Gold Mines Pty Ltd was issued with two directions under section 240 of the Mining Act 1992 (NSW) in October 2021
following a Targeted Assessment Program review of landform management and the long-term stability of the tailings storage
facilities and geochemical characterisation of waste materials stored in the waste rock emplacements.
A Warning Letter was issued to Big Island Mining Pty Ltd related to a non-compliance to the development consent conditions
for the Dargues Gold Mine. During February and March 2022, waste rock was temporarily stockpiled at a height greater
than the indicative height stated in the environmental assessment. This non-compliance was self-reported to the relevant
authorities and the waste rock height is now within the height identified in the development consent.
A Clean Up Notice was issued to Big Island Mining Pty Ltd by the Environmental Protection Agency in March 2022 regarding
excess water in the Tailings Storage Facility. This excess water has been caused by significantly elevated rainfall that fell at
Dargues Gold Mine over the last 18 months.
A Warning Letter was issued to Big Island Mining Pty Ltd in June 2022 regarding non-compliances to the development
consent conditions for the Dargues Gold Mine, related to dust deposition gauges not being replaced (monthly), and water
monitoring stations being damaged at the time of inspection.
90
—
DIRECTORS’ REPORT (CONTINUED)
10. ENVIRONMENTAL REGULATION AND PERFORMANCE
(CONTINUED)
—
An Independent Environmental Audit for 2019 – 2021 was undertaken for the Dargues Gold Mine in February 2022,
as required by the development consent. The Independent Environmental Audit identified several non-compliances
to development consent conditions and a Warning Letter was issued to Big Island Mining Pty Ltd regarding the
non-compliances identified. An Action Plan has been developed to address the non-compliances.
There were several other minor non-compliances to development consent conditions during the year, all of which 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.
11. 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.
12. 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 24 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 147.
Signed in accordance with a resolution of the Directors.
Peter Botten
Non-Executive Chairman AC, CBE
Daniel Clifford
Managing Director and Chief Executive Officer
Brisbane
30 August 2022
91
—
AURELIA METALS
OPERATIONS AND FINANCIAL REVIEW
—
1. ABOUT AURELIA METALS LIMITED
—
Aurelia Metals Limited 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 targeted exploration and evaluation activities
within proximity of Aurelia owned infrastructure. Our preeminent near-term development projects, include:
Federation Project, located near the Hera Mine – zinc, lead, gold, copper and silver
Great Cobar, located in the vicinity of the Peak Mine – copper and gold
Aurelia’s objective is to maximise returns from its producing assets while advancing its’ exploration and development projects
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.
Aurelia’s core 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.
OUR VISION
A mining business recognised for creating exceptional value through our people
and a portfolio of mining and exploration assets
OUR VALUES
INTEGRITY
We do what’s right
CERTAINTY
We plan and execute well
COURAGE
We step up
PERFORMANCE
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.
During FY22, we have continued to focus on our set objectives across health, safety, environment and community, people
and organisation, operations, growth and financial outcomes in pursuit of our corporate strategy.
92
—
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. OPERATING AND FINANCIAL PERFORMANCE
—
While a lot was achieved and there is a lot to be proud of
from our FY22 activities, a combination of complex external
factors has challenged our operational and financial
performance outcomes. The contributing factors are
addressed throughout this report. The key achievements and
FY22 results across our key pillars include:
Sustainability
Continued drive for improved safety culture. Group Total
Recordable Injury Frequency Rate (TRIFR) of 8.75 at
30 June 2022 (30 June 2021: 9.07), with our safety
Lead Indicator program compliance exceeding 85%.
Introduction of four Fatal Hazard Standards
supported by Critical Control Verifications to test their
effective implementation.
Group Total Reportable Environmental Incidents
Frequency Rate (TREIFR) at 30 June 2022 of 3.81, which
followed the FY21 result of 2.59 after the development of
Aurelia’s Green Rules.
The Aurelia Way, our refreshed code of conduct, was
launched with 93.7% of employees and contractors
receiving training by 30 June 2022.
Employee Engagement Survey conducted and our
Diversity and Inclusion strategy and working group
was established.
Community consultation engagement programs
maintained despite the challenges presented by COVID-19.
Baseline measures established for climate related
disclosures and evaluation of opportunities undertaken to
reduce our carbon footprint.
Production and Cost Performance
Annual mill throughput of 1,309kt, after first full year
of operation at Dargues under Aurelia ownership
Record gross metal gold equivalent produced due to strong
contribution from base metals at 198koz (FY21: 181koz).
Strong base-metals production and associated by-product
credits generated from Peak and Hera Mines up 29% to
$210.4 million which equates to 121koz equivalent gold
ounces based on average realised metal prices.
Operational productivity was impacted by labour
availability, COVID-19 related absenteeism and significant
and sustained rainfall events in NSW during the second
half of FY22.
Group gold production of 98.5koz at an AISC of $1,707/oz
(FY21: 104koz at $1,337/oz).
– Peak gold production of 40koz of gold at an AISC
of $1,520/oz (FY21: 57koz at AISC of $867/oz).
– Hera gold production of 16koz of gold at an AISC
of $625/oz (FY21: 31koz at AISC of $1,206/oz).
– Dargues gold production of 42koz of gold at an AISC
of $2,039/oz as operational performance continued to
improve during the mine’s first year of full operations
(FY21: 15koz at ASIC of $2,483/oz).
Introduced a new mining contractor at Hera and initiated
the transition to owner mining at Peak.
Growth
Hera-Federation Complex
Extended Hera’s mine life to early-mid 2024 and
established development access to the Upper
Hays orebody.
Advanced the Feasibility Study (FS) for underground
mining of the Federation deposit which will sustain
production after depletion of the Hera deposit.
Progressed Federation Project permitting and approvals,
with the Environmental Impact Statement (EIS) placed
on public exhibition and responses to submissions
being prepared.
Earth works at Federation commenced in March 2022
and boxcut excavation in April 2022; three years
after discovery.
Mineral Resource conversion and extensional drilling at
Federation has delivered outstanding high-grade gold
and base metals results, with high-grade base metal and
improved geological confidence.
Peak Mine and Great Cobar
Development consent for the New Cobar Complex was
received from the NSW Government.
Pre-Feasibility Study completed, and maiden Great Cobar
Ore Reserve released (refer to ASX releases dated 27
January 2022).
Financial outcomes
Solid Balance Sheet maintained, with $76.7 million cash
in bank at 30 June 2022 (FY21: $74.5 million).
Term loan facility balance of $20.7 million at 30 June 2022
after $16.2 million debt repayments during the year (FY21:
$36.9 million after $8.1 million in repayments).
A significant once-off non-cash impairment expense
of $135.7 million for the Dargues Mine in recognition
of reduced average gold grade and overall reduction
in mining inventory,
Strong EBITDA result of $166.5 million
(FY21: $154.1 million).
93
—
AURELIA METALS OPERATIONS AND FINANCIAL REVIEW
2. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
2.1 PROFIT AND FINANCIAL PERFORMANCE
The Group reports a statutory net loss after tax of $81.7 million for the year ended 30 June 2022, after a significant once-off
non-cash impairment for the Dargues Mine in recognition of the reduced average gold grade and overall reduction in mining
inventory at 30 June 2022. Included in the statutory net loss are some significant transactions which are not in the ordinary
course of ongoing business activities. Such items are disclosed in the underlying net profit. The underlying net profit or loss is
presented to improve the comparability of the financial results between periods.
The result for the year ended 30 June 2022 in comparison to the prior year is summarised below:
NET PROFIT
Sales revenue
Cost of sales
Gross profit
Impairment Expense – Dargues Mine
Business Combinations - Dargues Mine acquisition transaction
costs and stamp duty
Other income and expenses, net
Net (loss)/profit before income tax and net finance
expenses
Net finance expenses
Net (loss)/profit before income tax expense
Income tax benefit/(expense)
Net (loss)/profit after income tax
UNDERLYING NET PROFIT:
Net (loss)/profit before income tax expense
Add back:
Impairment Expense – Dargues Mine
Rehabilitation expense – Nymagee historic mine
Remeasurement of financial liabilities
Business Combinations - Dargues Mine acquisition costs
and stamp duty
Underlying net (loss)/profit before income tax expense (i)
Current tax on (loss)/profits for the year
Underlying net (loss)/profit after tax expense (i)
2022
$’000
438,815
(416,366)
22,449
(135,687)
-
6,207
(107,031)
(7,007)
(114,038)
32,350
(81,688)
2022
$’000
(114,038)
135,687
3,531
(27,131)
-
(1,951)
585
(1,366)
2021
$’000
416,477
(308,753)
107,724
-
(20,002)
(10,580)
77,142
(5,528)
71,614
(28,697)
42,917
2021
$’000
71,614
-
-
(5,472)
20,002
86,144
(28,697)
57,447
CHANGE
%
5%
(35)%
(79)%
(100)%
100%
159%
(239)%
(27)%
(259)%
(213)%
(290)%
CHANGE
%
(259)%
100%
100%
(396)%
(100)%
(102)%
(102)%
(102)%
(i) Underlying net (loss)/profit reflects the statutory net (loss)/profit adjusted to present the Directors’ assessment of the result for the ongoing business
activities of the Consolidated Entity. The presentation of non-IFRS financial information provides stakeholders the ability to compare against prior
periods in a consistent manner.
The items adjusted for are determined not to be in the ordinary course of business. These numbers are not required to be audited.
94
—
OPERATIONS AND FINANCIAL REVIEW
2. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
2.1 PROFIT AND FINANCIAL PERFORMANCE (CONTINUED)
The net profitability movements for the year ended in comparison to the prior year, along with the movements to the underlying
net loss before tax, are graphically illustrated below:
GROUP UNDERLYING NET (LOSS)/PROFIT AFTER TAX
Increase
Decrease
Total
150,000
100,000
50,000
-
(50,000)
(100,000)
(150,000)
47,535
59,910
71,614
(85,106)
(46,860)
20,002
(60,754)
135,687
3,531
(27,131)
(1,951)
(5,162)
21,659
(114,038)
(135,687)
(6,351)
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Total sales revenue for the year ended was $22.3 million higher due to increased base-metal revenue generated from Peak and
Hera concentrate sales. By-product revenue increased by 29% to $210.4 million during the year ended.
Despite Dargues contribution to the Group’s gold sales revenue during the year, total gold sales revenue decreased by 10%
to $228.4 million, largely due to reduced average gold ore grades processed at Peak and Hera during the year ended in comparison
to FY21.
Gold production during the year was 98.5koz in comparison to 103.6koz produced during FY21. The average gold price realised was
A$2,500/oz of gold, which was marginally better than the prior year (FY21: A$2,476/oz of gold).
Total costs of sales were $107.6 million higher at $416.4 million (FY21: $308.8 million). This is a result of:
Total ore mined increased by 7% to 1,293,080 tonnes (with 366,696 tonnes mined at Dargues) leading to an increase in
mining costs of 18%. Operational constraints experienced at Peak and Hera in late FY22 meant that some efficiencies were
lost due to necessary shaft repair and maintenance activities (Peak) and contractor loader availabilities (Hera).
Total volumes of concentrates transported increased by 17%, which has led to an increase in transport and refining costs of
$8.9 million, of which $4.9 million relates to Hera bulk concentrate, and $2.0 million is attributable to Dargues gold concentrate.
Depreciation and amortisation expense increased by $60.9 million to $137.8 million (FY21: $76.9 million). This includes
$76.8 million attributable to the Dargues Mine. The Life-of-Mine of plan for Dargues currently supports elevated rates of
depreciated and amortisation.
First full year of operations at the Dargues Mine.
Tax benefit of $32.4 million equates to an effective tax rate of 28%. The tax on the underlying net loss for the year equates to
a tax benefit of $1.3 million. The Dargues CGU was partially impaired with the remaining value of $47.9 million. The impairment
expense for Dargues of $135.7 million equates to a post-tax expense of $95.0 million.
95
—
AURELIA METALS
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
2.2 GROUP EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (EBITDA)
The Group’s earnings before interest, tax, depreciation and amortisation (EBITDA), in comparison to the prior year, is
summarised below:
UNDERLYING GROUP EBITDA
Net (loss)/profit before income tax and net finance
expenses
Depreciation and amortisation
Impairment expense – Dargues Mine
EBITDA (i)
Remeasurement of financial liabilities
Rehabilitation expense – Nymagee historic mine
Business combinations - Dargues Mine acquisition costs and
stamp duty
Underlying EBITDA (i)
2022
$’000
(107,031)
137,816
135,687
166,472
(27,131)
3,531
-
142,872
2021
$’000
77,142
76,927
-
154,069
(5,472)
20,002
168,599
CHANGE
%
(239)%
79%
100%
8%
(396)%
100%
(100)%
(15)%
(i)
EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) is a non-IFRS measure.
(ii) Underlying EBITDA (non-IFRS measure) reflects statutory EBITDA as adjusted to present the Directors’ assessment of the result for the ongoing
business activities of the Consolidated Entity. The presentation of non-IFRS financial information provides stakeholders the ability to compare against
prior periods in a consistent manner.
The items adjusted for are determined to be not in the ordinary course of business. These numbers are not required to be audited.
96
—
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
2.3 CASH FLOW PERFORMANCE
A summary of the Company’s cash flow for the year ended 30 June 2022, in comparison to the prior year, 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
2022
$’000
154,093
(131,463)
(20,167)
2,463
(301)
74,532
76,694
2021
$’000
136,643
(285,387)
144,867
(3,877)
(694)
79,103
74,532
CHANGE
%
13%
(54)%
(114)%
(164)%
57%
(6)%
3%
The net cash inflows from operating activities for FY22 amounted to $154.1 million (FY21: $136.6 million), which represented a
13% increase in comparison to the prior year. This favourable increase was underpinned by the cash contribution generated from
the Dargues Mine.
Aurelia is a growth focused mining company. The operating cashflows generated enable the Company to maintain a solid footing
while investing in and funding the Company’s strategic growth projects and exploration activities.
The net cash outflow from investing activities for the year ended was $131.5 million (FY21: $285.4 million). The key investing
activities include:
Sustaining property, plant and equipment and mine capital expenditure, excluding lease payments, of $56.5 million
(FY21: $40.0 million).
Growth capital of $19.1 million (FY21: $26.3 million).
Exploration and evaluation of $30.1 million (FY21: $20.6 million).
Guarantee Facility cash cover deposits paid of $22.1 million (FY21: $8.6 million).
The net cash outflow from financing activities for the year ended of $20.2 million (FY21: inflows of $144.9 million) includes the
following key activities:
Term loan repayments totaling $16.2 million (FY21: $8.1 million).
Financing arrangements for new mobile plant and equipment of $7.3 million (FY21: nil), with repayments of $0.6 million
(FY21: nil)
Lease principal repayments of $10.7 million (FY21: $8.1 million).
The cash inflows pertinent to FY21 included proceeds from the issue of shares totalling $124.8 million and net term loan
drawdown of $36.9 million related to the acquisition of the Dargues Mine.
97
—
AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
2.4 GROUP OPERATIONAL SUMMARY
The key operating results for the Group are summarised below:
Production volume
Gold
Silver
Copper - contained metal
Lead - contained metal
Zinc - contained metal
Sales volume
Gold doré and gold in concentrate
Silver doré and silver in concentrate
Payable copper in concentrate
Payable lead in concentrate
Payable zinc in concentrate
Average prices achieved (i)
Gold
Silver
Copper
Lead
Zinc
All in sustaining cost (ii)
(i) After realised hedge gains/losses
oz
oz
t
t
t
oz
oz
t
t
t
A$/oz
A$/oz
A$/t
A$/t
A$/t
A$/oz
2022
2021
CHANGE
98,461
788,840
3,726
24,266
30,067
92,448
593,271
2,632
23,549
25,305
2,500
32
13,124
3,032
4,692
1,707
103,634
692,133
4,720
25,894
25,059
102,589
461,429
4,356
22,432
18,341
2,476
34
10,927
2,676
3,613
1,337
(5)%
14%
(21)%
(6)%
20%
(10)%
29%
(40)%
5%
38%
1%
(6)%
20%
13%
30%
28%
(ii) All-in Sustaining Costs (AISC) is a non-IFRS measure and is not audited. Group AISC includes Site Costs (mining processing, administration, changes in
inventory), royalty, transport and smelter expenses, by-product credits (silver, copper, lead & zinc sales), sustaining capital, corporate costs, divided by
gold sold during the year.
2.5 DARGUES MINE OPERATIONAL SUMMARY
On 17 December 2020, Aurelia acquired 100% of the Dargues Mine and regional exploration tenements. Immediately following
the acquisition, Aurelia commenced a phased extensional and infill resource drilling program. The program targeted Mineral
Resource growth along strike and at depth, and greater confidence in the Mineral Resource Estimates.
During the year, an updated life-of-mine (LOM) plan was prepared using results from the drill campaigns, production
reconciliation performance and an improved understanding of the geological interpretation. The updated LOM plan resulted
in a lower average mined gold grade over the remaining LOM in comparison to the preceding 2021 LOM plan.
The updated LOM plan is based on a revised interpretation of the mineralised zones across the six mine levels developed
since the acquisition of Dargues. The definition provided by this information has identified zones of localised geometrical
complexity and discontinuity that, when modelled, have impacted the volume of mineralised material and reduced the estimated
insitu grade. As a result, a $135.7 million non-cash impairment ($95.0 million post-tax non-cash impairment) has been
recognised at 30 June 2022.
98
—
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
2.5 DARGUES MINE OPERATIONAL SUMMARY (CONTINUED)
Following extreme weather in March 2022, Aurelia suspended processing operations for 48 hours as a precautionary measure
when rainfall and associated runoff water filled the mine’s Tailings Storage Facility (TSF) to its operational storage capacity.
Suspending processing operations avoided an emergency water release. Processing activities resumed under an amended
operating and monitoring regime which led to a period of constrained milling rates to match underground cemented hydraulic
fill placement.
The severe rain events led to the Company accelerating construction of the next approved TSF embankment raise. By the end
of FY22, the construction of the Stage 3 embankment lift was nearing completion. Further to this, Aurelia has sought regulatory
approval to construct a separate water storage facility and permission to irrigate surplus TSF water. These actions will reduce the
future risk of the TSF reaching operational capacity during periods of intense and sustained rainfall.
Sustaining capital for during the year totalled $18.9 million (FY21: $5.1 million) excluding sustaining leases, which was largely
related to mine development, the purchase of underground haul trucks and the Stage 3 TSF wall lift which was brought forward
into FY22 (from FY23) in response to the significant rainfall events.
Throughout FY22, the operation delivered strong performance in the mining and processing disciplines which was unable to
offset the lower average gold head grades in the material mined and processed.
The key performance metrics for the Dargues Mine for the year in comparison to the prior period (from acquisition date) are
tabulated below.
DARGUES MINE
Ore processed
Gold grade
Gold recovery
Production Volume
Gold production
t
g/t
%
oz
AISC (All in sustaining cost) *
A$/oz
* AISC is a non-IFRS measure.
12 MONTHS TO
30 JUNE 2022
PERIOD FROM 17
DECEMBER 2021 TO
30 JUNE 2021
365,243
3.7
95.4
41,661
2,039
170,804
2.93
93.5
15,186
2,483
The total gold produced during the year was impacted by the average gold head grades of ore processed. A total of 37,098oz of
gold was sold at an AISC of $2,039/oz.
Grade estimation and resource definition continues to be refined for the Dargues Mine as new data from underground infill and
surface and underground extensional drilling is received and processed. The timely receipt of data on the drill results has been
adversely impacted by long assay return times and a core processing backlog.
99
—
AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
2.6 PEAK MINE OPERATIONAL SUMMARY
The key performance metrics for the Peak Mine are tabulated below.
PEAK MINE
Ore processed
Gold grade
Silver grade
Copper grade
Lead grade
Zinc grade
Gold recovery
Production Volume
Gold production
Silver production
Copper production
Lead production
Zinc production
t
g/t
g/t
%
%
%
%
oz
oz
t
t
t
AISC (All in sustaining cost) *
A$/oz
*AISC is a non-IFRS measure.
2022
608,647
2.27
16.9
0.88
2.86
3.18
90.6
40,322
263,546
3,726
13,441
12,273
1,520
2021
CHANGE
624,565
3.07
20.3
0.95
3.17
2.82
92.7
57,080
333,551
4,720
15,829
10,791
867
(3)%
(26)%
(17)%
(7)%
(10)%
13%
(2)%
(29)%
(21)%
(21)%
(15)%
14%
75%
The Peak Mine’s total gold sold during the year was 39,201 oz at an AISC of $1,520/oz (FY21: 54,822 oz at an AISC of $867/oz).
The reduction in the quantity of gold sold during the year is reflective of the lower mined grades, the processed ore volume and
deferral of some higher grade material into FY23. The by-product credits attributable to copper, lead, zinc and silver account for
an increasing portion of total revenue generated at the Peak Mine (FY22: 53%, FY21: 41%).
Process throughput during FY22 decreased by 3% to 608,647 tonnes as manning levels and mining conditions impacted
underground mining efficiencies, further compounded by underground production interruptions in the fourth quarter.
To augment the underground mining activities completed by contracted services, the Company has recently taken delivery
of the first units of the Aurelia owned underground mining fleet. A development jumbo and two underground loaders are
being commissioned. The new equipment will join two hired haul trucks that are operating to deliver improved productivity.
These hired trucks will be replaced by Aurelia owned haul track which are currently on order.
Sustaining capital for the year was $42.6 million (FY21: $17.9 million). The increase from FY21 is largely attributable to Kairos
development switching from growth capital to sustaining capital after the lode was bought into production in June 2021.
Total growth capital expenditure for the year ended was $11.5 million (FY21: $25.2 million) which included construction work to
raise the TSF embankment.
The Peak Mine and its established infrastructure are well placed to support future growth. The Company has received regulatory
approval to extend the life of the operations at Peak up until 2035. This follows the NSW Government’s issue of development
consent for the New Cobar Complex.
The New Cobar Complex is a State Significant Development (SSD) that amalgamates the existing approved underground
mining of the Chesney and Jubilee deposits, and development of the new underground workings at the Great Cobar and
Gladstone deposits. The approval allows the establishment of a new underground mine at the Great Cobar copper-gold deposit
which requires the development of an exploration decline from the established New Cobar workings and excavation of a surface
ventilation shaft.
100
—
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
2.6 PEAK MINE OPERATIONAL SUMMARY (CONTINUED)
The Great Cobar Pre-Feasibility Study (PFS) released in January (refer to ASX Announcement: Great Cobar PFS outcomes and
Peak Ore Reserve increase dated 27 January 2022) supports the development of a new satellite mine based on initial mining
at Great Cobar with a maiden 840,000 tonne Ore Reserve to offset mining depletion at Peak. The PFS also showed mining
Great Cobar could deliver 2.3 million tonnes to the Peak Mine’s processing plant over a nominal five-year production period
to produce high-quality copper-gold concentrate and gold-silver doré.
The regulatory approval received is a significant milestone for the Company and it justifies the recent investment in internal
capability and new mobile fleet which will operate the South Mine (Peak) where Aurelia will directly perform key mining activities
supported by specialist contractors. At the North Mine (The New Cobar Complex), contractors will expand development
and production volumes including excavation of the Great Cobar exploration decline and associated mine infrastructure.
Amongst other locations, exploration drilling during FY22 was conducted at the Kairos deposit, testing the extents of the
orebody and intersecting some of the best gold grades reported from the Peak Mine (refer to ASX Announcement: Further drill
success across the Aurelia portfolio dated 28 April 2022). The drilling identified a new area in the upper northern portion
of Kairos and the crossover to Peak North that will be the subject of follow-up drilling. Encouraging copper results at the
Burrabungie prospect, (located approximately 140m south from existing workings at the Chesney ore body, within the North
Mine at Peak), will be followed up in FY23.
101
—
AURELIA METALS
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
2. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
2.7 HERA MINE OPERATIONAL SUMMARY
The key performance metrics for the Hera Mine are tabulated below:
HERA MINE
Ore processed
Gold grade
Silver grade
Lead grade
Zinc grade
Gold recovery
Production Volume
Gold production
Silver production
Lead production
Zinc production
t
g/t
g/t
%
%
%
oz
oz
t
t
AISC (All in sustaining cost) *
A$/oz
* AISC is a non-IFRS measure.
2022
335,102
1.79
54.7
3.45
5.59
85.5
16,478
525,294
10,824
17,794
625
2021
CHANGE
445,828
2.48
27.42
2.44
3.46
86.3
31,369
358,581
10,064
14,268
1,206
(25)%
(28)%
99%
41%
62%
(1)%
(47)%
46%
8%
25%
48%
In line with the mine plan, the ore being processed through the Hera mill is predominately base-metal dominant. High-grade base
metal ore feed has at times resulted in processing rates being constrained by the filtration capacity of the plant. Bulk concentrate
production increased by 13.7% to 49,328 dmt (FY21: 43,394 dmt). Production was also limited by mined ore delivery in HY2
due to poor ground conditions in older stoping areas, underground loader availability and labour shortages exacerbated by
COVID-19 absenteeism.
Hera’s improved output in bulk lead-zinc concentrate was offset by lower gold produced and sold in gold doré. Ore with a lower
average gold feed grade and higher base metal grades are expected to be processed over Hera’s remaining mine life.
Hera’s mine plan currently provides for an extension of mining and processing operations into late FY24. The mine life extension
is underpinned by production from the Upper Hays deposit, extended stope retreat sequences and remnant mining. This mine
plan provides a smooth transition towards production from the Federation deposit (refer to Section 3.1 for further detail).
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OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. STRATEGY PROGESSION
—
Aurelia has established growth objectives and strategies to generate value and long term returns at each of our mine sites.
Our strategies leverage the benefits of existing infrastructure and a prospective tenement holding.
1 SUSTAINABLE PROGRESSION
An organisation that excels through our people and superior performance.
A trusted, sustainable and beneficial presence in the areas in which we operate.
2 SWEAT OUR INFRASTRUCTURE AND ASSETS
Leverage off a strategic asset base in the Cobar Basin.
Maximise returns via mine life extensions and operating discipline driving margin.
3 DIRECT THE INVESTMENT TO THE HIGHEST RETURN
Growth profile underpinned by financial discipline and tension for the dollar deployed.
Gold with high value base metals, ‘copper ready’.
4 DELIVER LONG TERM VALUE AND RETURNS GROWTH
4 – 5 mine asset portfolio continuously driving group costs and Reserve improvement.
Cycle proofed mine lives and commodity mix.
Aurelia is in the favourable position of being able to maintain our growth trajectory by accelerating two of our advanced organic
growth projects, the Federation Project (located within the Hera-Federation Complex) and Great Cobar (located within the
vicinity of the Peak Mine).
3.1 FEDERATION PROJECT
The Federation deposit, which was discovered in April 2019, is located ten kilometres south of the Hera Mine in central western
New South Wales.
The Federation Project centres on the development of a base and precious metal deposit that hosts high-grade lead, zinc and
gold mineralisation. Given the proximity of the deposit to other Aurelia owned assets, the Project will leverage and benefit from
existing internal capability and infrastructure.
During FY22, Aurelia has achieved several critical milestones in the progression of the Federation Project, including:
Established road access, installed sediment controls and stockpiled 20 hectares of topsoil for post-closure land rehabilitation
following the clearing and preparation of 32 hectares of land by the engaged local civil contractor in March 2022.
Commenced the excavation of the 22m deep box cut for the exploration decline in April 2022.
Placed the Environmental Impact Statement (EIS) for the Federation Project on public exhibition to allow submissions from
NSW regulators and other stakeholders. The feedback received is being carefully considered ahead of anticipated consent and
associated regulatory approvals.
Evaluation of the Federation underground mine development was nearing completion after cost estimates and the project
execution schedule were compiled in late June, allowing consideration of both a stand-alone processing plant and/or optimising
the use of existing Aurelia owned infrastructure and processing capacity.
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AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. STRATEGY PROGESSION (CONTINUED)
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3.1 FEDERATION PROJECT (CONTINUED)
Project Development
Site civil works commenced in March 2022 to enable the establishment of an exploration decline that will allow infill and
extensional drilling from underground platforms, as well as the extraction of a 20kt bulk sample for metallurgical evaluation.
At 30 June 2022 site civil works and boxcut activities were well advanced in preparedness for the exploration
decline development.
During FY23, the Company aims to advance project development activities which includes boxcut wall support, exploration
decline development, water supply and dam construction, installation of surface facilities, excavation of surface ventilation and
secondary egress shafts, road upgrades, underground lateral and vertical development and underground infill drilling.
The Company continues to progress the Environmental Impact Statement (EIS) with one community submission received
in support of the project during the public exhibition period. The Company is in the process of preparing the Response to
Submission including providing additional information requested by government authorities.
The Federation Project will be in a position to proceed to commercial production after receipt of regulatory approvals (which are
currently anticipated by mid-2023) and internal approval.
Exploration and Mineral Resource
In late FY22, Aurelia completed an intensive infill drill program at Federation to support the Feasibility Study and Mineral
Resource estimate update. During the peak of this drill campaign, the Company had a fleet of five drill rigs actively working
at the site. By the end of FY22, all rigs had been progressively demobilised as the program reached its planned conclusion.
A substantial program of core processing and assaying will continue during the first half of FY23. The Company will conduct
further infill drilling and extensional drilling from underground platforms targeting depth extensions of known mineralisation
once the Federation exploration decline is sufficiently advanced. Surface exploration is planned to continue into FY23 targeting
along strike positions on the Federation.
The Mineral Resource conversion drilling undertaken during the year intercepted exceptional base metal and gold
mineralisation (refer to ASX Announcements: Gold and Base Metal intercepts extend Federation deposit dated 27 January 2022,
and Spectacular Intercepts at Federation dated 15 August 2022). The Federation deposit remains open and/or very sparsely
drilled along strike, which will be the focus of future exploration drilling. The focus of drilling undertaken during FY22 was on the
conversion of Inferred Resources to high confidence categories.
The infill drilling program was extremely successful. An updated Mineral Resource Estimate at 30 June 2022 will incorporate the
available results from the FY22 infill drilling program with conversion of Inferred to Indicated Mineral Resource expected due to
improved estimation confidence. The Maiden Ore Reserve Estimate is expected to be finalised during the first quarter of FY23.
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OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. STRATEGY PROGESSION (CONTINUED)
—
3.2 GREAT COBAR
The Great Cobar deposit is located in proximity of the Peak Mine complex, approximately seven kilometres north of the Peak
Mine’s processing facility and is approximately one and a half kilometres north of the New Cobar Mine.
The Great Cobar Pre-Feasibility Study (PFS) and maiden Ore Reserve was compiled in December 2021 (refer to ASX
Announcement: Great Cobar PFS Outcomes and Peak Ore Reserve Increase dated 27 January 2022). The development concept
for Great Cobar is based on underground decline access from the existing New Cobar Mine workings.
The mine layout incorporates responses from community consultation and information from assessments prepared
for the Environmental Impact Statement (EIS) for the New Cobar Complex, as documented in Aurelia’s Response
to Submissions to the relevant NSW authorities.
The PFS provided for the following:
The design of a new satellite underground mine which would deliver ore to the Peak Mine process plant.
Initial mining and processing expected to take place over an approximate five-year life (400-500ktpa) to deliver a total
of 47kt copper and 61koz gold.
A Production Target of 2.3Mt of Indicated and Inferred Mineral Resource to be mined over 61 months based on the June 2021
Mineral Resource Estimate.
A Maiden Probable Ore Reserve estimate of 840kt at 2% copper, 1g/t gold and 4g/t silver as part of the Peak Mine
Ore Reserve.
A suitable return on investment and economic benefits to the Central-West NSW region during the construction
and operations phase of the project.
The Great Cobar deposit remains open both up-plunge and down-plunge as demonstrated by significant copper mineralisation
intersected approximately 300m below the known Mineral Resource envelope at 30 June 2021 (refer to ASX Announcement:
Further drilling success across the Aurelia portfolio dated 28 April 2022). This successful drilling is expected to support a
material increase in the Mineral Resource for Great Cobar. It is anticipated that the material increase will be included in the
Group Mineral Resource and Ore Reserve Statements at 1 July 2022 which are expected to be finalised during the first quarter
of FY23.
Further testing of the mineralised extents of the deposit will be facilitated by underground drill platforms that will be accessed
from the planned Great Cobar exploration decline.
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AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
4. EXPLORATION AND EVALUATION
—
Aurelia’s exploration and evaluation activities continue to unlock exceptional value.
Targeted exploration and resource definition drilling has continued to deliver strong results within Aurelia’s highly prospective
tenement holding. The Company is committed to pursuing its growth strategy and will continue to focus on near-mine and
regional exploration targets.
The Company’s particularly interesting activities and targets are summarised below:
4.1 COBAR DISTRICT (PEAK MINE)
Kairos
The Kairos discovery was announced in early 2019 and was brought 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.
During FY22 further drilling has been undertaken at Kairos to test the northern strike extent of the deposit. Some of the highest
gold grades seen at the Peak Mine were encountered in this drill campaign (refer to ASX Announcement: Further drilling success
across the Aurelia portfolio dated 28 April 2022). The drilling indicated a new area in upper north Kairos where an overlap occurs
between the Kairos lens and the Peak North orebody which extends further down-dip than previously modelled.
Very strong copper mineralisation along with gold mineralisation was encountered immediately to the north of the Kairos
orebody (refer to ASX Announcement: Kairos and Dargues drilling delivers high grade results dated 12 October 2021). The Kairos
system remains strongly mineralised and open along strike and at depth.
Planned drilling in FY23 will target both Resource upgrades and extensions to both the north and south of the orebody.
Great Cobar
Extensional and infill drilling undertaken at Great Cobar during the year has increased the size and improved our confidence
of the copper and gold mineralisation and understanding of the Great Cobar ore body. It also provided additional drill core for
confirmatory metallurgical and geotechnical test work. The most recent surface drilling results (received after the cut-off date for
inclusion in the PFS) highlight the strong potential to extend the proposed underground mining area and deliver a significantly
longer mine life, including:
Resource extension both up and down dip.
Potential economic copper mineralisation down dip of historical workings.
Potential economic gold, lead and zinc mineralisation.
Potential repeat systems down plunge and along strike.
Further extensional drilling is expected to be completed from underground, once the exploration decline has been established.
4.2 NYMAGEE DISTRICT (HERA – FEDERATION)
The region encompassing the Hera-Federation Complex is the vicinity of the historic mining town of Nymagee.
The Federation deposit and its prospectivity is described in Section 3.1. During FY23, Aurelia plans to deploy a surface drill rig
to test step-out targets along the Federation line of lode to the east and west to test repeat positions of the NNE plunging lenses
at Federation.
As part of the Company’s FY22 regional exploration program, Aurelia conducted induced polarisation (IP) surveys at the Piney, Vaucluse,
Lyell and Ironbark prospects in the Nymagee district. Encouraging chargeability anomalies were defined at each project area. In addition
to these prospects, which will be considered for further testing with drilling, the Sir Lancelot prospect was identified as a priority for
IP surveying. This was completed in early FY23 returning interesting results that warrant further follow-up.
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4. EXPLORATION AND EVALUATION (CONTINUED)
—
4.3 BRAIDWOOD DISTRICT (DARGUES)
Immediately following the acquisition of Dargues Mine in December 2020, the Company commenced an infill and extensional
drill campaign which comprised of two targeted phases. The data gathered from the two drill campaigns completed, have
informed the revised LOM Plan for the current mining operation.
The Dargues region and Braidwood District remains highly prospective. Further extensional drilling and infill drilling will be
completed on the Dargues ore body along strike to the east and west of the main Bonanza lode, and Ruby Lode, along with down
dip extensional drilling under Zone 15, Zone 8b and Plums Lode. In addition to this, targets with coincident soil geochemical
anomalies in gold, chargeability anomalies and recorded intercepts in historical drilling will be assessed further in the Copper
Ridge and Thompsons Lode areas (located to the northwest and south of Dargues respectively).
Exploration work during FY23 will be focused on near mine extensional drilling to contribute to mine life but will also incorporate
geological system analysis to understand the deposit in greater detail. Regional exploration activities will be initiated in FY23 to
assess satellite mineralisation, including Snobs Mine and Doubloon (all located within 1km of the Dargues Mine).
4.4 OTHER NEAR-MINE AND REGIONAL EXPLORATION
The Company’s exploration tenements remain highly prospective and are held over multiple jurisdictions.
There are a significant number of historical prospects in the Cobar, Nymagee and Braidwood districts awaiting the application
of modern exploration techniques. Aurelia is in the process of applying an exhaustive review of these prospects to prioritise
prospect areas based on technical and commercial merit.
Aurelia has recently conducted a Falcon airborne gravity gradiometry survey over a significant portion of the Company’s Cobar
tenement package as part of this review process. The results of these geophysical investigations will add to the Company’s
extensive regional datasets and allow efficient prioritisation of future regional exploration activities.
For further detail, including drill results, refer to the Aurelia website (www.aureliametals.com.au).
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AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
5. CORPORATE
—
5.1 BALANCE SHEET
The depreciation and amortisation charges coupled with the impairment recognised for the Dargues Mine has meant that
total assets for the Group at 30 June 2021 have decreased by $94.2 million to $562.3 million (30 June 2021: $656.5 million).
The Group net assets of $336.9 million at 30 June 2022 represents a net decrease of $84.4 million in comparison to the net
assets at 30 June 2021 of $421.3 million.
THE MAIN EVENTS AND MOVEMENTS DURING THE YEAR INCLUDE:
Assets
Solid cash position, with $76.6 million cash at bank.
Restricted cash balance of $30.7 million at 30 June 2022 (FY21: $8.6 million) relates to deposits held
as required under the $65 million Guarantee Facility, which forms part of the secured Syndicated
Facilities Agreement.
Continued investment in Exploration and Evaluation totalling $32.6 million (FY21: $20.7 million),
which includes Federation, Great Cobar, Dargues and other regional targets (refer to note 11 of the
Financial Statements).
Mine properties assets totalling $123.5 million at 30 June 2022 (FY21: $287.0 million) is after the
$135.7 million impairment recognised for the Dargues Mine.
Investment in Property, plant and equipment of $31.1 million (FY21: $14.4 million, excluding Dargues
acquired balances) (refer to note 9 of the Financial Statements).
Liabilities
Interest bearing loans totalling $27.4 million includes $19.3 million relating to the outstanding balance
on the Term Loan (FY21: $34.4 million) (part of the secured Syndicated Facilities Agreement as
detailed in Section 6.2), as well as $6.7 million related to chattel mortgages initiated during the year
for new mobile plant (FY21: $Nil).
Other financial liabilities totalling $11.1 million pertains to future third party royalties payable on gold
sales from the Dargues Gold Mine (FY21: $43.4 million) (refer to note 16 of the Financial Statements).
Increase in total rehabilitation provisions of $14.6 million is mostly attributable to an increase in
rehabilitation provisions and the associated fair value calculation at 30 June 2022.
Equity
No dividends were paid or declared and no capital raising activities were undertaken.
5.2 FINANCING
The secured Syndicated Facilities Agreement in place at 30 June 2022 provides the bank financing requirements for Aurelia.
It includes three facilities:
Term Loan Facility – a loan of $45 million was utilised to support the acquisition of Dargues Mine in December 2020.
Principal repayments of $16.2 million were completed during the year ended. The remaining principal balance of $20.7 million
is due to be paid in equal quarterly instalments of $4.05 million to September 2023.
Guarantee Facility – the facility was increased by $15 million to $65 million during the year to provide for increased guarantees
related to rehabilitation, $57.0 million has been utilised. This facility includes a cash backing requirement, accordingly
$30.7 million was held as restricted cash at 30 June 2022.
Working Capital Facility – the $20 million facility remains undrawn and was extended for a further 12 months
to 31 December 2022.
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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. At 30 June 2022, 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 mandated
rolling 12-month program has been maintained.
At 30 June 2022, the Company had hedged 21koz of gold at an average price of A$2,505/oz with monthly maturities (deliveries)
through to 30 June 2023.
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 maintains 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. In accordance with the hedge policy, the Company had hedged some of the metal price exposure at 30 June 2022.
The QP hedging in place at the end of the reporting period is detailed below:
COMMODITY
UNIT
30 JUNE 2022
30 JUNE 2021
QUANTITY
CONTRACT PRICE
QUANTITY
CONTRACT PRICE
Gold
Copper
Lead
Zinc
oz
t
t
t
3,274
570
1,585
400
US$1,841
US$9,860
US$2,225
US$4,018
-
-
601
483
-
-
US$2,175
US$2,854
c) Foreign currency options
During October 2021, the Company purchased foreign currency call options which were initiated to provide some level of
protection against potential adverse foreign currency movements related to USD denominated concentrate sales. The call
options included monthly maturities with a face value of USD$10 million per month from January 2022 to June 2022 with a
strike rate of 0.81. The options lapsed upon maturity. The premiums paid totalled $0.26 million.
5.4 CORPORATE COSTS
The corporate costs for the year were $14.6 million (FY21: $13.8 million). Corporate costs include head office employee related
costs, Group professional services costs and other operating costs.
5.5 DIVIDENDS
The Board of Directors did not declare a final dividend for the year ended 30 June 2022 (30 June 2021: nil), as the Board elected
to support accelerating Aurelia’s organic growth projects which includes the near-term projects of Federation and Great Cobar.
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AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
6. SAFETY, RISK AND SUSTAINABILITY
—
Building and maintaining a trusted, sustainable, and beneficial presence in the areas in which we operate is essential.
Our approach to sustainability is aligned with our vision and our values of integrity, certainty, courage and performance.
We are embedding sustainability within our business and building resilience founded upon ethical and transparent business and
governance practices. We recognise the need to continuously improve, understand, benchmark and address emerging issues
which are of importance to ourselves and our stakeholders.
Our core activities continue to be directed towards providing certainty of no fatalities and no major environmental or community
incidents (incidents having a detrimental impact on the environment that would impact Aurelia’s reputation and license
to operate).
The foundational governance structures and programs which support Aurelia’s safety, risk and sustainability approach
and strategy include:
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. Mandatory training on the Rules to Live By
is completed for all personnel.
Green Rules – A defined set of rules that apply to work and activities that have a greater risk of causing environmental
harm or impacting Aurelia’s reputation.
Fatal Hazard and Catastrophic Standards – A set of Group standards that have been developed which define the
requirements for appropriately engineered work environments, fit for purpose equipment, and a trained workforce.
These standards also address catastrophic environmental hazards.
Critical Control Verification – A periodic and planned program of critical control verifications, including improvement
action identification, tracking and closeout.
Group Risk Register – A register of group risks which are assessed for likelihood and consequence in line with Aurelia’s
Enterprise Risk Management Framework which is aligned with the International Standard for managing risk ISO31000:2018.
High Potential Risk Incidents (HPRI’s) – A Senior Management Taskforce for Significant Incidents assesses HPRI
investigations and verifies action close-out to prevent recurrence.
Lead Indictor Programs – A multifaceted preemptive program focusing 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.
Close out of Actions – A Group-wide approach for the tracking and reporting of actions, and the close out of actions to an
apropriate standard.
The above control frameworks are also supported by external audits and verification processes to ensure that Aurelia are
attuned to evolving risks and opportunities.
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OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
6. SAFETY, RISK AND SUSTAINABILITY (CONTINUED)
—
Our safety and environmental incident reduction journey over the last two years is evidence that good governance, systems
and a sustained focus on safety and environment outcomes combine to support reduced incident frequency rates.
Total Recordable Injury Frequency Rate (TRIFR):
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(
25
20
15
10
5
0
FY20
FY21
FY22
Since the implementation of the Green Rules, the frequency of reportable environmental incidents has improved. Aurelia’s
environmental compliance performance is measured by the Recordable Environmental Incident Frequency Rate (REIFR) per
million hours worked. The Green Rules were implemented in mid-FY21, when the frequency rate was 10.9 (at 1 January 2021),
and through reinforced governance, the frequency rate has progressively improved to 3.81 at 30 June 2022.
7. 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.
7.1 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 and gold in concentrate unhedged sales were 9,249 ounces (2021: 102,589). 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 $0.5 million (2021: $4.7 million).
During the financial year, the company made unhedged sales of concentrate containing payable lead of 4,831 tonnes (2021:
22,432), payable zinc of 12,394 tonnes(2021: 18,341 tonnes) and payable copper of 1,176 tonnes (2021: 4,356 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 $1.3 million (2021: $2.0 million).
A movement in the US/AUD foreign exchange rate by 1% would result in an increase/decrease in revenue of $0.8 million.
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OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
7. MATERIAL BUSINESS RISKS (CONTINUED)
—
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.
7.2 MINERAL RESOURCE AND ORE RESERVE
Group Mineral Resource and Ore Reserve 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, 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.
7.3 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.
7.4 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
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.
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OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
7. MATERIAL BUSINESS RISKS (CONTINUED)
—
7.5 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 insurable risk. However, property, liability
and other insurance may not provide sufficient coverage for losses related to these or other risks or hazards.
7.6 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.
7.7 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 the regulation and management of water, waste disposal, worker
health and safety, mine development, mine rehabilitation and closure and the 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 a range of health, safety, environment and community related initiatives at its operations
to manage and support the health and safety of its employees, contractors and members of the community affected by
its operations. Despite this, 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, Australia. 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 Aurelia’s mining operations prioritise the use of recycled water for its processing activities to preserve water reserves
and to limit the use of external water sources. The Hera Mine utilises water from a range of water sources, including ground water
bores and if required, water from historic underground workings.
The Peak Mine obtains high security water from the Burrendong Dam to supplement other water sources, including water
from the historic Great Cobar underground workings.
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AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
7. MATERIAL BUSINESS RISKS (CONTINUED)
—
7.7 ENVIRONMENT AND SUSTAINABILITY (CONTINUED)
The Dargues Mine utilises water from storage facilities located on site which may need to be supplemented by other sources,
if required, while additional water security projects (including the construction of an additional water storage dam, subject
to regulatory approval) are being progressed.
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. The Company
recognises that by building respectful relationships with the communities in where it operates, it 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.
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 which we operate, 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.
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, severe weather events, changes to legislation and regulation, cost impacts,
reputation risk, as well as market changes and shareholder activism.
Sustainable environmental considerations, such as energy sources and usage, are being evaluated and assessed, and where
possible, are being built into our planning and decision-making processes for project evaluation and development.
The Company is committed to understanding and proactively managing environmental and climate related risks. The Company
publishes an annual Sustainability Report as part of the Annual Report that details activities related to the management of key
risks including environmental and climate risks.
7.8 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 implemented, and will continue to implement, intervention measures targeted at minimising the
risk and impact resulting from the 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.
As the COVID-19 pandemic has evolved, there have been new and emerging risks and uncertainties with the potential to
adversely impact our business. These risks include, but are not limited to, supply chains disruptions, travel restrictions and
border closures, and adverse impacts to our people’s health and wellbeing.
Aurelia’s proactive approach and an agile responsiveness from the beginning of the pandemic meant that Aurelia’s operations
had not been materially impacted. However, in late FY22, the persistence of the pandemic had begun to have a more material
impact on our business through the loss of productivity and operational effectiveness. Despite over 92% of all employees
at Aurelia being at least double vaccinated, COVID-19 related absenteeism became pronounced in late FY22 as the virus spread
continued within the communities.
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OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
7. MATERIAL BUSINESS RISKS (CONTINUED)
—
7.8 COVID-19 MEASURES (CONTINUED)
Throughout the pandemic, the Company has been able to maintain critical consumables and spares, while preserving our supply
chains, sales routes, and customer contracts.
As at the date of this report, the pandemic remained ongoing. Aurelia will remain attuned to the evolving presence of COVID-19
and the potential impacts to our people, communities, and activities.
7.9 FINANCIAL SOLVENCY
The Company maintains an adequate cash balance ($76.7 million at 30 June 2022), with limited borrowings ($27.4 million at
30 June 2022). 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.
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.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
There have been no matters or events that have occured after 30 June 2022 that have significantly affected or may significantly
affect either the Group’s operations or results of those operations of the Group’s state of affairs.
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AURELIA METALS LETTER FROM THE CHAIRMAN
OF THE REMUNERATION
AND NOMINATION COMMITTEE
—
Dear Shareholder,
On behalf of the Board of Directors of Aurelia Metals Limited, I am pleased to present our FY22 Remuneration Report.
Following a strong year for metals and mining in FY21, FY22 was a year of rebalance. Despite strong commodity prices,
a combination of complex external factors has provided a challenging landscape for companies like ours.
The re-opening of borders and easing of restrictions following multi-year COVID-19 lockdowns saw a rapid escalation of
infections in our communities, which eventually made its way to Aurelia’s mines. Diminished workforce availability coupled with
a rapidly tightening labour market impeded our operational effectiveness and performance during the second-half of FY22.
Despite the difficulties, our employees keep rising to the challenge, and I would like to personally thank them on behalf of the
Board for their dedication and resilience.
More recently, geopolitical uncertainty and an economic environment characterised by high levels of inflation, supply chain
constraints and cost pressures has introduced a level of volatility the market has not experienced for decades.
Against this backdrop, Aurelia has remained nimble. We have adapted our plans to ensure that we continue to accelerate and
advance two organic growth projects – Federation and Great Cobar – which we believe, represent the greatest potential to
sustain and grow the business in the long-term.
With our growth always under the lens of reducing environmental and carbon impacts, I am pleased to say we’ve laid a
sustainable platform for the next chapter of Aurelia Metals and I am proud to share with you some of our achievements during
FY22 and the related remuneration outcomes and initiatives.
Performance
Aurelia takes a whole of business approach to developing strategy and plans, reviewing performance and linking outcomes
to variable remuneration. The Balanced Business Plan brings together leaders to develop opportunities to improve the Company
by prioritising projects to achieve step change across five pillars:
Health, Safety, Environment and Community
People and Organisation
Operations
Growth
Financial Outcomes
The targets and measures developed for each pillar provide the essential link to executive and employee variable remuneration
(through short-term and long-term incentives). This ensures the variable remuneration framework encapsulates the key
Company performance drivers aligned to societal and key stakeholder expectations.
Workplace development
As we continue to execute an ambitious growth story through the development of two new mines, we continue to invest in our
people as the key element to secure our Company’s future.
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LETTER FROM THE CHAIRMAN OF THE REMUNERATION AND NOMINATION COMMITTEE (CONTINUED)
In FY22, we implemented the following frameworks and initiatives to ensure continued employee engagement and a quality
experience aimed at attracting, retaining and motivating a high performing team:
The Aurelia Way – new code of conduct
Leading the Aurelia Way – leadership development program
Enterprise Risk Management framework – a refreshed risk framework embedded throughout the business
Employee engagement survey – established improvement actions and initiatives
Employee working groups - formed for each business unit to further improve employee engagement outcomes
Diversity and Inclusion
Aurelia operates in an industry that continues to experience instances of unacceptable behaviours. We have amplified our efforts
to create a workplace that is safe, inclusive and respectful, and where differences in background and perspectives are embraced.
We are developing actions informed by recent reports (including Elizabeth Broderick’s ‘Everyday Respect’ report into workplace
culture at Rio Tinto and the Western Australian parliamentary enquiry on sexual harassment against women in the FIFO mining
industry, entitled ‘Enough is Enough’) to learn from and adjust our Diversity and Inclusion programs.
We have reinforced a zero-tolerance approach to sexual harassment and other inappropriate behaviour through our corporate
messaging and programs. We are also taking a proactive, ‘ground-up’ approach to understand the experiences and feedback
from our employees, with a view to eliminate the risk of incidents occurring in our business.
Any incident of sexual harassment and inappropriate workplace behaviour is treated as a safety incident through the Senior
Taskforce for Significant Incidents and require a full investigation through procedures aligned to High Potential Risk Incidents for
safety and environment. The Board are also fully briefed on any incident of this nature including actions taken by management
to prevent such incidents.
Following 91 confidential one-one-one interviews to gain employee views on diversity and inclusion (D&I) in FY21, the Company
developed its first D&I strategy and measurable objectives. Our newly established D&I Working Group are responsible for
ensuring the initiatives contained in the Strategy are implemented. The Working Group members also act as champions within
the business to promote diversity and inclusion more broadly.
The Aurelia Board is already committed to ensuring 25% of Board members are women (as a minimum). Across the Aurelia
employee base, we have set a FY23 target for a 20% year-on-year improvement for female representation in our workforce.
Overall female representation currently sits at 21.5% (FY21: 19%).
Remuneration and Governance
Over the last few years, we have developed a robust remuneration framework that links remuneration outcomes with business
performance which is built upon strong governance and transparent reporting. To ensure we are continually improving our
approach in line with current trends, market expectations and peer insights, each year we engage with our stakeholders
(including proxy advisors) to hear their views.
The improvements implemented from this feedback process have enhanced alignment with shareholder expectations and
delivered a 99% vote in favour of the FY21 Remuneration Report. We continue to be encouraged by the feedback we receive on
ensuring sustainability outcomes form part of the performance matrix.
The Remuneration Report details the updated Non-Executive Director fee structure (effective from 1 April 2021) following an
extensive benchmarking exercise. The revised structure has retained and assisted with the attraction of quality Board members
in accordance with the Board skills-matrix. To this end, we welcomed our new Chairman, Peter Botten to Aurelia Metals on
4 November 2021. Peter is a highly respected former CEO and experienced non-executive director and we look forward to his
leadership as we execute the Company’s growth plans.
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AURELIA METALS
LETTER FROM THE CHAIRMAN OF THE REMUNERATION AND NOMINATION COMMITTEE (CONTINUED)
FY22 Performance
Aurelia has an enviable pipeline of organic growth opportunities, including two near-term projects that represent significant
value for shareholders. In FY22, Aurelia achieved the following key milestones:
Great Cobar Pre-Feasibility Study (PFS) completed confirming a robust technical and economic case for development of the
copper-rich Great Cobar mine with a production target of 2.3 Mt over five years.
Regulatory approval to extend the life of Peak Mines to 2035 following the NSW Government’s issue of development consent
for the New Cobar Complex, including the Great Cobar copper-gold mine.
Feasibility Study (FS) for the emerging tier one asset – the Federation Project – completed and enabling works underway,
including the excavation of the box cut for the exploration decline. The Federation Project is a leading example of accelerated
mine development from its discovery in 2019 through to the current phase of development.
Exemplary exploration success in our geographically prospective landholding in the Cobar Basin (which includes Federation
and Great Cobar). This success, underpinned by our in-house capabilities, provide a means for increased exposure to critical
future-facing commodities, which are experiencing significant demand and associated prices.
Revised life-of-mine plan for Dargues (due to reduced average gold head grades) has resulted in a substantial impairment
expense; an outcome which has been accounted for and reflected in the FY22 variable remuneration outcomes.
Remuneration changes in FY23
While the Board will continue to monitor and review remuneration for the executive team and all staff in FY23, at this stage we do
not expect any substantial change to the structure of short term or long term rewards in the coming year.
As shareholders would be well aware, substantial pressure on wages is being experienced across all sectors of the economy
flowing from relatively high levels of inflation and record low unemployment. Aurelia is taking steps to address the retention
of key staff and this may include lifting wages at a higher rate than what we have seen in the recent past.
Your Board is acutely aware of the need to balance cost control against the disruption to operations that can be caused by the
loss of staff and will continue to work with management to address this important issue.
Looking forward
Aurelia Metals has established a solid foundation for success and the next two years are set to be transformational for
our Company. 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 Nominations Committee
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An aerial view of the Peak Mine processing plant and Adminstration buildings
119
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AURELIA METALS REMUNERATION REPORT
(AUDITED)
—
This Remuneration Report forms part of the Directors’ Report for the year ended 30 June 2022. 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).
120
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—
ANNUAL REPORT 2022
Organisational Developments
and Outcomes
Key Management Personnel (KMP)
Remuneration Governance
Remuneration Overview
Managing Director and
CEO and other Executive
KMP Remuneration
Service Agreement Key Terms
How Performance is Linked to the
Variable 'At Risk' Remuneration
for the Managing Director and CEO
and Other Executive KMP
Malus Policy
Non-Executive Directors’
Remuneration
Remuneration of KMP
Shareholdings of Directors and
other KMP Remuneration
Auditor's Independence
Declaration
124
126
127
128
129
131
131
144
144
145
147
149
AURELIA METALS
121
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AURELIA METALS REMUNERATION REPORT (AUDITED)
—
1. ORGANISATIONAL DEVELOPMENTS AND OUTCOMES
—
1.1. THE EXTERNAL ENVIRONMENT
The labour market for the mining 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.
The strong competition for mining professionals means that Aurelia will need to continue to monitor and adjust its remuneration
strategy in response to the prevailing market conditions. The persistency of COVID-19, and the related restrictions and
absenteeism has exacerbated the current conditions.
Since the onset of the pandemic, Aurelia has maintained stringent COVID-19 controls under a robust Pandemic Plan with trigger
action responses to manage scenarios to protect employees, contractors, communities, and assets. The Crisis Management and
Incident Management Teams have met regularly at an executive and operational level to manage the changing circumstances
and the ever evolving and emerging issues.
The pandemic plan and rigorous protocols which leveraged government health advice had meant that over the course of the
COVID-19 outbreak the business had not been materially impacted. However, following the lifting of Government restrictions
during FY22, which led to the rapid spread of the virus within the communities, the business began to be impacted through
increased COVID-19 related absenteeism which escalated during the second-half of FY22.
Given the Company’s thorough management and response during the pandemic, the Board has seen no requirement to
adjust remuneration. Any impact resulting in a shortfall in productivity (production and cost measures) due to the COVID-19
is reflected in the FY22 STIP outcomes.
Aurelia will continue to monitor and adjust its remuneration strategy in response to evolving market conditions.
1.2. AURELIA’S FOUNDATIONS
During the last year, Aurelia has continued to develop and embed a range of initiatives aimed at strengthening the foundations
for success. Central to this is our 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 the key
drivers within these pillars.
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REMUNERATION REPORT (AUDITED) (CONTINUED)
1. ORGANISATIONAL DEVELOPMENTS AND OUTCOMES (CONTINUED)
—
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
encourage a performance-based culture whereby competitive remuneration and reward are aligned to business and
shareholder objectives.
1.4. KEY REMUNERATION DEVELOPMENTS IN FY22
As Aurelia continues to grow, 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, which are reviewed to ensure they remain relevant and meet the underlying objective of creating
alignment with Aurelia’s short and long-term business objectives.
Over the last two years, the Company has implemented a revised Remuneration Framework founded upon governance aligned
with stakeholder expectations. While there have been no material changes to remuneration in FY22, the Company has continued
to refine and embed governance processes and strategies which support the Company’s remuneration objectives. Some of the
activities completed include:
increased Total Fixed Remuneration (TFR) for executive KMP following a review of remuneration at peer companies,
with the increases awarded being aligned with the increases awarded across the entire Aurelia workforce
increased the variable ‘at-risk’ remuneration opportunity for eligible employees to align with industry benchmarks;
while maintaining fixed remuneration at median P50 range
committed to meeting the 0.5% increase in legislated Superannuation Guarantee (SG) effective from 1 July 2022 on top
of the annual salary review increases which will also be effective from 1 July 2022
the Committee reviewed the LTIP performance measures following consultation with remuneration consultants and any
feedback from Proxy Advisers. The FY22 LTIP performance measures were rationalised following industry benchmarking,
as outlined in Section 7.2
extended LTIP participation to further employees within the Group which will continue to foster an ‘owner’s mindset’ with
our people.
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AURELIA METALS 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
Peter Botten
Non-Executive Chairman
Appointed 5 November 2021
Lawrence Conway
Susan Corlett
Paul Harris
Helen Gillies
Robert Vassie
Non-Executive Director
Appointed 13 September 2021
Non-Executive Director
Full year
Non-Executive Director
Interim Non-Executive Chairman
From 2 March 2021 to 4 November 2021
Non-Executive Director
Non-Executive Director
Non-Executive Director
EXECUTIVE DIRECTORS
POSITION
Daniel Clifford
Managing Director and CEO
EXECUTIVE DIRECTORS
POSITION
Peter Trout
Ian Poole
Chief Operating Officer
Chief Financial Officer & Company Secretary
Full year
Full year
Full year
Full year
TERM
Full year
TERM
Full year
Excluding the Managing Director and CEO, all directors are deemed to be independent.
The composition of Board is illustrated below:
Executive
Directors
14%
Female
29%
Independent
Non-Executive
Directors
86%
Male
71%
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REMUNERATION REPORT (AUDITED) (CONTINUED)
3. REMUNERATION GOVERNANCE
—
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’ or ‘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.
The Charter 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 88, under Section 3 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.
REMUNERATION CONSULTANTS
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 FY22, the Remuneration Committee engaged independent consulting firm Juno Partners for the purposes of
providing advice and analysis with respect to remuneration (FY21: Juno Partners).
No remuneration recommendations, as defined in section 9B of the Corporations Act 2001, were made by remuneration
consultants during FY22 (FY21: Nil).
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AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
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
– encourage 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’ Short Term Incentives are linked to individual and Company annual objectives and performance outcomes
including the Balanced Business Plan (Section 7.1)
– ‘at-risk’ Long Term Incentives are linked to the achievement of long term strategic objectives (Section 7.2)
– 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.
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REMUNERATION REPORT (AUDITED) (CONTINUED)
5. MANAGING DIRECTOR & CEO AND OTHER EXECUTIVE
KMP REMUNERATION
—
Total Remuneration (TR) for all executive KMP consists of the following key elements:
TOTAL 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 FR is to provide a base level of remuneration which is market competitive and appropriate.
SHORT-TERM INCENTIVE (STI)
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 and Balanced Business Plan
key pillars of: HSEC (including ESG), People and Organisation, Operations, Growth and Financial Outcomes.
The key focus of the performance measures is to build and deliver superior shareholder return.
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 and is applied as a
percentage of the employee’s FR.
LONG-TERM INCENTIVE (LTI)
The LTI is an ‘at-risk’ component of Total Remuneration (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 focuses 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 and eligible employees.
The performance measures are set at the beginning of each year, with a 3-year performance period and is applied as a
percentage of the employee’s FR.
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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AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
5. MANAGING DIRECTOR & CEO AND OTHER EXECUTIVE
KMP REMUNERATION (CONTINUED)
—
The amount and relative proportion of FR, STI and LTI is established for each executive KMP 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) Total Remuneration (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 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 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, maximum TR (FR + maximum STI + maximum LTI) is moving
towards a target of up to the 75th percentile of maximum TR offered for the relevant role within the 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.
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 Total Remuneration are detailed below:
FY22
TFR
% OF TOTAL REMUNERATION AT MAXIMUM
Daniel Clifford, Managing Director & CEO
$753,005
Peter Trout, Chief Operating Officer
$530,500
Ian Poole, Chief Financial Officer
$440,000
TFR - 38%
TFR - 47%
TFR - 47%
STI - 24%
LTI - 38%
STI - 23%
LTI - 30%
STI - 23%
LTI - 30%
FY21
TFR
% OF TOTAL REMUNERATION AT MAXIMUM
Daniel Clifford, Managing Director & CEO
$727,750
Peter Trout, Chief Operating Officer
$512.500
Ian Poole, Chief Financial Officer
$419,178
TFR - 38%
TFR - 49%
TFR - 49%
STI - 24%
LTI - 38%
STI - 19%
LTI - 32%
STI - 19%
LTI - 32%
128
—
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 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
& CEO AND THE 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.
129
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
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 FY22 Company’s STI plan are as follows:
FY22 STI PLAN
Purpose
Focus participants on delivery of business objectives over a 12-month period.
Participation
All employees including executive KMP.
STI Opportunity
The STI opportunity for the MD is targeted at 50% of the TFR with a potential maximum of award of
62.5% of TFR.
The STI opportunity for the other KMP is targeted at 40% of the TFR with a potential maximum award of
50% of TFR. This equates to targeted increase of 5% from FY21.
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. The average weightings for
KMP for the FY22 performance period were:
Performance
Period
Performance
Measures &
Weighting
FY22
Criteria
Weighting
Sustainability, Safety and Environment
20.0%
Balance Business Plan Outcomes
10.0%
Production and Cost Performance
Growth
Individual Performance
Total
30.0%
20.0%
20.0%
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.
130
—
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.1 SHORT TERM INCENTIVE PLAN (STIP) (CONTINUED)
FY22 STI PLAN (CONTINUED)
Payment
STI payments are paid in cash and are subject to a service condition.
This condition is met if the KMP’s employment is continuous during the performance period and they
were 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).
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 as a good leaver.
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”. Further details of the Company’s Malus Policy is included at Section 8.0.
Rights on
Termination
Malus Policy
7.1.1 FY22 STIP Outcomes
At the beginning of FY22, the Board determined that the following measures would be applicable to the FY22 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
TARGET
STRETCH
Nil award for outcome below 75% of Target
100%
Award for outperformance against Target
Pro-rata between Target and Threshold
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.
131
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.1 SHORT TERM INCENTIVE PLAN (STIP) (CONTINUED)
The FY22 STIP measures and performance outcomes as applicable to the Managing Director & CEO are detailed below, noting
that similar measures and percentages apply to the Managing Director & CEO’s direct reports with slight variations based on the
individual’s role.
7.1.1 FY22 STIP Outcomes (Continued)
MEASURE
TARGET
1. Sustainability
These measures relate to:
and Environment
Safety outcomes – 10.0%
WEIGHTING /
AWARD
20.0%
Lead indicator programs, including Critical Control Verifications – 10.0%
Safety and environment outcomes measurements:
PERFORMANCE MEASURE
TRIFR*
LEAD
INDICATORS**
Threshold (75% on achievement)
Target (100% on achievement)
Stretch (125% on achievement)
Weighting - % of Total STI
Outcome
Award
Reduction from 9.07
at 30 June 2021 to 30
June 2022 = 8.83
70% Compliance
to Lead Indicator
Program
Reduction from 9.07
at 30 June 2021 to 30
June 2022 = 7.30
85% Compliance
to Lead Indicator
Program
Reduction from 9.07
at 30 June 2021 to 30
June 2022 = 5.33
100% Compliance
to Lead Indicator
Program
10.0%
8.75
76.31%
10.0%
87.3%
103.83%
* 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 ie. hazard
identification and risk assessments have been completed and controls are in place.
Award
18.0%
132
—
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.1 SHORT TERM INCENTIVE PLAN (STIP) (CONTINUED)
7.1.1 FY22 STIP Outcomes (Continued)
MEASURE
TARGET
2. Balanced
Business Plan
Group Balanced Business Plan (BBP) outcomes:
WEIGHTING /
AWARD
10.0%
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 of the priority objectives across the business.
The BBP encompasses the five pillars: HSEC (including ESG), People and
Organisation, Operations, Growth and Financial Outcomes.
Each year, the BBP focuses 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)
60% of measures achieved
Target (100% on achievement)
80% of measures achieved
Stretch (125% on achievement)
100% of measures achieved
Weighting - % of Total STI
Award
10.0%
7.8%
FY22 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.
Award
7.8%
133
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.1 SHORT TERM INCENTIVE PLAN (STIP) (CONTINUED)
7.1.1 FY22 STIP Outcomes (Continued)
MEASURE
TARGET
3. Production
and Cost
Performance
Production and cost measures to be at or better than target.
PERFORMANCE MEASURE
Threshold (75% on achievement)
Target (100% on achievement)
Stretch (125% on achievement)
Weighting - % of Total STI
Outcome
Award
GOLD (EQ)
PRODUCED (OZ) *
OPERATING
UNIT COST $/T
PROCESSED **
194,997
218,722
242,447
15.0%
183,888
0%
$197.73
$175.91
$154.10
15.0%
$193.04
12.1%
WEIGHTING /
AWARD
30.0%
* Normalised for FY22 Budget metal prices
** Operating Unit Cost = (Mining + Processing + Administration operating expenditure)
÷ dry tonnes processed
Award
4. Growth
The targets and measures for the Growth category are summarised below.
12.1%
20.0%
PERFORMANCE
MEASURE
Threshold (75% on
achievement)
Target (100% on
achievement)
Stretch (125% on
achievement)
FEDERATION PROJECT
BUSINESS
DEVELOPMENT
Feasibility Study completed
Growing pipeline – not able
to be executed
Financial Investment
Decision ready June 2022
Financial Investment
Decision ready June 2022
and no delay for project
execution
Quality options advanced
Engaged on / have executed
a transaction
Weighting - % of Total STI
10.0%
Award
0%
10.0%
7.5%
The award considerations include the status, progress and achievement of each of the
growth performance measures. The Board will determine (at its discretion) whether
performance across those areas has been to Threshold, Target or Stretch level.
Award
7.5%
134
—
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.1 SHORT TERM INCENTIVE PLAN (STIP) (CONTINUED)
7.1.1 FY22 STIP Outcomes (Continued)
MEASURE
TARGET
5. 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 as applicable to the Managing Director
and CEO.
WEIGHTING /
AWARD
20.0%
PERFORMANCE
MEASURE
SAFETY SYSTEMS
IMPROVEMENT
INVESTMENT CASE AT
DARGUES
PEAK
TRANSITION PLAN
Threshold (75% on
achievement)
80% of FY22 initiatives closed
out
90% of Dargues investment
case achieved
80% of FY22 plan
achieved
Target (100% on
achievement)
90% of FY22 initiatives closed
out
100% of Dargues investment
case achieved
100% of FY22 plan
achieved
Stretch (125% on
achievement)
100% of FY22 initiatives closed
out
110% of Dargues investment
case achieved
110% of FY22 plan
achieved
Weighting - % of
Total STI
Award
6.66%
0%
6.66%
0%
The performance assessment is completed with consideration to the above
performance measures and the overall accomplishments during the period.
Award
6.66%
0%
0%
135
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.1 SHORT TERM INCENTIVE PLAN (‘STIP’) (CONTINUED)
7.1.1 FY22 STIP Outcomes (Continued)
Upon the completion of the assessment related to the above quantitative and qualitative hurdles, the Board has determined
and approved the award of a FY22 STIP to the Company’s KMP, as outlined below:
FY22
TOTAL STIP AWARDED $
% OF MAXIMUM (STRETCH)
STIP AWARDED
% OF MAXIMUM STIP
FORFEITED
Executive Director
Daniel Clifford
171,596
Othe Executive KMP
Peter Trout
Ian Poole
96,713
80,214
The above FY22 STIP awards are payable in FY23.
7.1.2 FY21 STIP Outcomes
The FY21 STIP awards for the Company’s KMP were:
36%
36%
36%
64%
64%
64%
FY21
TOTAL STIP AWARDED $
% OF MAXIMUM (STRETCH)
STIP AWARDED
% OF MAXIMUM STIP
FORFEITED
Executive Director
Daniel Clifford
379,021
Othe Executive KMP
Peter Trout
Ian Poole
162,514
129,400
83%
85%
82%
17%
15%
18%
The FY21 STIP performance measures and the award outcomes are detailed in the FY21 Annual Report (pages 96 to 98).
The FY21 STIP awards were paid in FY22.
7.2 LONG TERM INCENTIVE PLAN (‘LTIP’)
An outline of the key elements of the Company’s LTIP as it relates to executive KMP for the FY22 grants is below.
LONG TERM INCENTIVE PLAN
LTIP Opportunity
The LTIP opportunity is determined by the individual’s role and level within the business.
The LTIP opportunity for the CEO is 100% of TFR, for other KMP it is 65% of TFR.
The actual number of performance rights issued to KMP was determined by dividing their
respective LTIP opportunity by the 30-day VWAP of the Company’s share price as at 30 June
2021, being a VWAP of an Aurelia ordinary share of $0.4035 per share.
Period
The performance period is three years.
136
—
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
LONG TERM INCENTIVE PLAN
Service Condition
Vesting of Performance Rights is subject to a service condition. This condition is met if the
KMP’s employment is continuous during the Performance Period.
Performance Measures
and Weighting
The performance measures and their respective weighting in the LTIP are established prior to
the commencement of the new financial year and are determined at the discretion of the Board.
Following an industry benchmarking exercise conducted during FY21, the LTIP performance
measures for the FY22 grants were consolidated, as detailed below:
FY22
FY21
Criteria
Weighting
Criteria
Weighting
Relative TSR
60%
Growth
40%
Relative TSR
Absolute TSR
Ore Reserves
Growth
25%
25%
25%
25%
Targets and vesting
schedule
Further detail on the LTIP targets and vesting at various levels of performance is included in
Section 7.2.1.
Exercise of Discretion
The Board has discretion, considering recommendations from the Remuneration Committee,
to adjust LTI vesting awards or an individual’s final LTI vesting.
Entitlement on Vesting
To the extent the performance criteria are satisfied (subject to the Service Conditions),
the Performance Rights will vest and be exercised at nil exercise price and the number
of ordinary shares equal to the number of vested Performance Rights will be issued.
Disposal Restrictions
Shares granted to participants under the LTIP as a result of the vesting of Performance Rights
are not subject to disposal restrictions outside of the Company’s share trading policy.
Dividends
No dividends are paid on unvested Performance Rights.
Rights on Termination
Except for the discretion of the Board, if a participant:
•
•
is determined by the Board to be a Good Leaver, a pro-rata number of unvested
Performance Rights will remain on foot and vest subject to the satisfaction of the
applicable performance conditions
ceases employment for any other reason, any unvested Performance Rights will lapse on
cessation of employment.
A Good Leaver is defined as termination in the event of death, permanent disability, redundancy,
retirement or as the Board otherwise determines.
If the Board considers that the transaction has occurred or is likely to occur which involves
a change in control (or other circumstances such as they recommend acceptance of a
takeover bid), the Board may in its absolute discretion determine that any or all unvested
Performance Rights vest.
Change of control
Participation in new
issues
Any Performance Rights issued under the Company’s LTIP are not entitled to participate in any
new equity raising activity.
Malus Policy
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’ (refer to Section 8.0 for further detail).
137
—
AURELIA METALS
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.2 LONG TERM INCENTIVE PLAN (‘LTIP’) (CONTINUED)
7.2.1 LTIP Performance Rights Issued FY22
During FY22, a total of 3,429,653 Performance Rights (Class FY22) 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 2024.
Following an extensive consultation and benchmarking process, the FY22 LTIP performance measures were rationalised,
which meant that the measures could be consolidated and reduced to two key performance measures.
The performance hurdles related to Class FY22 are detailed below, including relevant threshold and target measures:
LTIP SCORECARD
THRESHOLD
Vesting % guide
Nil
PRO-RATA
50% to 100%
TARGET
100%
Relative TSR*
<50th percentile
50th - 75th percentile
75th percentile and above
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 is
comprised of ASX Listed organisations which the Board considers by the nature of their business
are influenced by commodity prices and other external factors similar to those that impact the
Company, as disclosed under section [7.2.3].
Growth -
Ore Reserve per Share
<100% of Baseline
≥ 100% to 115% of Baseline
≥ 115% of Baseline
Measurement will be against the Company’s growth in Ore Reserve per Share over the
Performance Period. This will be done by comparing the baseline measure of the Ore Reserves
as at 1 July 2021 on a per share basis to the Ore Reserves as at 30 June 2024 on a per share basis,
based on the number of shares on issue at each respective date.
The baseline Ore Reserves per Share as at 1 July 2021 was 3.56kg/share. An outcome less than the
Baseline provides an outcome of Nil vesting at the end of the Performance Period.
* The measurement of the performance will be 30-day VWAP of shares up to and including 30 June 2024.
7.2.2 Relative TSR comparator group
The comparator group of companies for the Relative TSR element of the LTIP is determined by the Board with consideration
of the following characteristics:
ASX listed with a market capitalisation of between A$250 million and A$2 billion
operations in predominantly gold, copper, lead or zinc
operations in the production stage of development (with greater than A$100 million in revenue)
majority of revenue generated from Australian operations.
The comparator group at the start of the Performance Period include: 29Metals (ASX: 29M), Aeris Resources (ASX: AIS);
Alkane Resources Limited (ASX: ALK), Dacian Gold Limited (ASX: DCN), Gold Road Resources Limited (ASX: GOR),
Pantoro Limited (ASX: PNR), Ramelius Resources Limited (ASX: RMS), Red 5 Limited (ASX: RED), Regis Resources (ASX: RRL),
Sandfire Resources Limited (ASX: SFR), Silver Lake Resources Limited (ASX: SLR), St Barbara Limited (ASX: SBM) and Westgold
Resources Limited (ASX: WGX).
138
—
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.2 LONG TERM INCENTIVE PLAN (‘LTIP’) (CONTINUED)
7.2.3 LTIP Performance Rights Issued FY21
As noted in Section 7.2.2, the LTIP performance measures applied for the FY22 grants were rationalised following an extensive
industry benchmarking exercise, and consultation process with the remuneration consultants and feedback from Proxy Advisors.
For comparison purposes, the measured applied for the FY21 grants are (Class FY21) are detailed below.
LTIP SCORECARD
THRESHOLD
Vesting % guide
Absolute TSR*
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.
Relative TSR*
<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.
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 from his
prior employer, a total of 1,565,201 Performance Rights vested on 25 November 2021, which was the 24-month anniversary of
the start of employment with the Company.
The issue of the above Performance Rights were approved by shareholders at the Annual General Meeting held on
29 November 2019.
7.2.5 LTIP Outcomes during FY22
No LTIP grants related to KMP vested during FY22.
Subsequent to year end the vesting outcomes for a total of 2,284,641 Performance Rights related to Class 19A which had a
performance period ending 30 June 2022 was determined. Out of these, 380,759 Performance Rights vested and 1,903,882
were forfeited.
139
—
AURELIA METALS
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.2 LONG TERM INCENTIVE PLAN (‘LTIP’) (CONTINUED)
7.2.6 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 2022) are detailed below:
PERFORMANCE RIGHTS TRANCHES
TOTAL NUMBER ISSUED
RELEVANT DATE OR TESTING DATE
Class FY21
Class FY22
Total KMP Performance Rights
3,108,620
3,429,653
6,538,272
30-Jun-23
30-Jun-24
7.2.7 Summary of movements in Performance Rights during the year
A summary of movements of Performance Rights within the various plans are tabulated below:
GRANT
GRANT
DATE
EXPIRY
OR TEST
DATE
EXERCISE
PRICE
BALANCE
AT START
OF YEAR
GRANTED
DURING
THE YEAR
VESTED
DURING
THE YEAR
EXPIRED
DURING
THE YEAR
BALANCE
AT YEAR
END
Class 18B
04-12-18
30-06-21
Class 19A *
29-11-19
30-06-22
Class 19C
29-11-19
30-11-21
Class FY21
19-11-20
30-06-23
Class FY21
26-12-20
30-06-23
Class FY22
04-11-21
30-06-24
Class FY22
09-11-21
30-06-24
Nil
Nil
Nil
Nil
Nil
Nil
Nil
307,969
2,470,720
1,565,201
1,696,714
4,482,758
-
-
-
-
-
-
-
1,866,231
6,741,473
(76,992)
(230,977)
-
-
(186,079)
2,284,641
(1,565,201)
-
-
-
-
-
-
-
1,696,714
(726,998)
3,755,760
-
1,866,231
(340,444)
6,401,029
Total
10,523,362
8,607,704
(1,642,193)
(1,484,498)
16,004,375
Total KMP Performance Rights
6,644,499
3,429,653
(1,565,201)
-
8,508,951
Total Non-KMP Performance Rights
3,878,863
5,178,051
(76,992)
(1,484,498)
7,495,424
Total
10,523,362
8,607,704
(1,642,193)
(1,484,498)
16,004,375
Refer to section 7.2.5 for the vesting outcomes of Class 19A which were determined after 30 June 2022.
140
—
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
& CEO AND THE OTHER EXECUTIVE KMP (CONTINUED)
—
7.3 DETAILS OF SHARE BASED COMPENSATION TO THE MANAGING DIRECTOR & 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
Managing Director & CEO
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
Daniel Clifford
Class 19A
Class 19C
30-06-22
1,351,866
29-11-19
30-11-21
1,565,201
29-11-19
Class FY21
30-06-23
1,696,714
19-11-20
Class FY22
30-06-24
1,866,231
04-11-21
0.310
0.400
0.303
0.286
6,480,012
Other KMP
Peter Trout
Class 19A
30-06-22
618,812
29-11-19
0.290
Class FY21
30-06-23
776,665
26-12-20
Class FY22
30-06-24
854,606
09-11-21
Ian Poole
2,250,083
Class FY21
30-06-23
635,241
26-12-20
Class FY22
30-06-24
708,816
09-11-21
0.285
0.300
0.285
0.300
1,344,057
n/a
-
0.394
(1,565,201)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-
-
(1,565,201)
-
-
-
-
-
* All classes of Performance Rights that vest into fully paid ordinary shares, vest at a nil exercise price.
-
-
-
-
-
-
-
-
-
-
1,351,866
-
1,696,714
1,866,231
4,914,811
618,812
776,665
854,606
2,250,083
635,241
708,816
1,344,057
141
—
AURELIA METALS
REMUNERATION REPORT (AUDITED) (CONTINUED)
8. MALUS POLICY
—
The underlying principle of the policy 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 fraud, dishonesty or gross misconduct);
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
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. There were no changes to Non-Executive Director remuneration
during FY22. The next review and benchmarking exercise is expected to be conducted in FY23.
Structure
The aggregate fee pool available for Non-Executive Directors remuneration is $1,000,000 per annum. The Board fees and the
fees related to Board committee responsibilities are summarised below:
ROLE
Chair of the Board of Directors
Non-Executive Director
Chair of a Board Committee
Member of a Board Committee
*Inclusive of superannuation
EFFECTIVE 1 APRIL 2021
FEE PER ANNUM $*
TO 31 MARCH 2021
FEE PER ANNUM $*
200,000
100,000
15,000
10,000
160,000
100,000
Nil
Nil
142
—
REMUNERATION REPORT (AUDITED) (CONTINUED)
10. REMUNERATION OF DIRECTORS AND OTHER KMP
—
The following table details the remuneration received by Directors and KMP of the Company during FY22 ($).
SHORT TERM
Y
R
A
T
E
N
O
M
-
N
O
N
S
T
I
F
E
N
E
B
S
T
N
E
M
E
L
T
I
T
N
E
E
V
A
E
L
*
*
S
N
T
E
M
E
V
O
M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*
T
N
E
M
Y
A
P
P
T
S
I
-
-
-
-
-
-
-
FY22
/
Y
R
A
L
A
S
E
S
A
B
S
E
E
F
S
R
O
T
C
E
R
D
I
Non-Executive Directors
Peter
Botten (i)
Lawrence
Conway
Susan
Corlett (ii)
132,230
115,000
145,317
Paul Harris
125,000
Robert
Vassie
109,091
Helen Gillies
111,818
Sub-total
738,456
Managing Director & CEO
S
E
C
N
A
W
O
L
L
A
-
-
-
-
-
-
-
POST-
EMPLOYMENT
SHARE-
BASED
PAYMENT
I
N
O
T
A
U
N
N
A
R
E
P
U
S
13,223
-
14,713
-
10,909
8,182
47,027
E
U
L
A
V
D
E
S
T
R
O
M
A
I
-
-
-
-
-
-
-
TOTAL
‘AT-
RISK’
145,453
0%
115,000
0%
160,030
125,000
120,000
120,000
785,483
0%
0%
0%
0%
0%
Daniel
Clifford
725,505
25,000
7,200
37,944
171,596
27,500
423,598
1,418,343
42%
Other executive KMP
Peter Trout
503,000
Ian Poole
412.500
-
-
7,200
7,200
11,852
96,713
27,500
135,747
782,012
30%
8,011
80,214
27,500
123,181
658,606
31%
Sub-total
1,641,005
25,000
21,600
57,807
348,523
82,500
682,526
2,858,961
38%
Total
2,379,461
25,000
21,600
57,807
348,523
129,527
682,526
3,644,444
30%
(i) Mr Peter Botten was appointed as Independent Non-Executive Director on 13 September 2021 and was appointed as Chairman on 4 November 2021.
(ii) Ms Susan Corlett was served as the Interim Chairman during the period 2 March 2021 to 4 November 2021.
*Payments related to the 2022 STI Plan will be paid in FY23.
**The leave entitlements movement includes long service leave and annual leave movements during FY22.
143
—
AURELIA METALS
REMUNERATION REPORT (AUDITED) (CONTINUED)
10. REMUNERATION OF DIRECTORS AND OTHER KMP (CONTINUED)
—
The following table details the remuneration received by Directors and KMP of the Company during FY21 ($).
SHORT TERM
Y
R
A
T
E
N
O
M
-
N
O
N
S
T
I
F
E
N
E
B
S
T
N
E
M
E
L
T
I
T
N
E
E
V
A
E
L
*
*
T
N
E
M
E
V
O
M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*
T
N
E
M
Y
A
P
P
T
S
I
-
-
-
-
-
-
-
FY21
/
Y
R
A
L
A
S
E
S
A
B
S
E
E
F
S
R
O
T
C
E
R
D
I
Non-Executive Directors
Lawrence
Conway
Susan
Corlett (i)
Paul
Harris
Robert
Vassie (ii)
Helen
Gillies (iii)
Colin
Johnstone
(iv)
Michael
Menzies (v)
103,750
124,282
106,427
45,155
45,155
106,667
25,000
Sub-total
556,436
Managing Director & CEO
S
E
C
N
A
W
O
L
L
A
-
-
-
-
-
-
-
-
POST-
EMPLOYMENT
SHARE-
BASED
PAYMENT
I
N
O
T
A
U
N
N
A
R
E
P
U
S
-
11,807
-
4,145
4,145
-
-
20,097
E
U
L
A
V
D
E
S
T
R
O
M
A
I
-
-
-
-
-
-
-
-
TOTAL
‘AT-
RISK’
103,750
0%
136,089
0%
106,427
0%
49,300
0%
49,300
0%
106,667
0%
25,000
0%
576,533
0%
Daniel
Clifford
701,980
39,794
7,200
18,882
379,021
25,000
830,285
2,002,112
61%
Other executive KMP
Peter
Trout
Ian
Poole (vi)
486,958
-
7,200
13,218
162,514
25,000
118,294
813,184
35%
397,384
7,200
5,633
129,400
24,729
41,845
606,191
29%
Sub-total
1,586,322
39,794
21,600
37,683
670,935
74,729
990,424
3,421,487
49%
Total
2,142,758
39,794
21,600
37,683
670,935
94,826
990,424
3,998,020
42%
(i) Ms Susan Corlett was appointed as Interim Chairman on 2 March 2021.
(ii) Mr Robert Vassie was appointed as Independent Non-Executive Director on 21 January 2021.
(iii) Ms Helen Gillies was appointed as Independent Non-Executive Director on 21 January 2021.
(iv) Mr Colin Johnstone retired on 2 March 2021.
(v) Mr Michael Menzies retired on 1 October 2020.
(vi) 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 were paid in FY22.
** The leave entitlements movement includes long service leave and annual leave movements during FY21.
144
—
REMUNERATION REPORT (AUDITED) (CONTINUED)
11. SHAREHOLDINGS OF DIRECTORS AND OTHER KMP
—
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.
The shareholdings of Directors and other KMP for FY22 is presented below and includes shares held directly, indirectly,
and beneficially by the Directors and other KMP.
FY22
Directors
Peter Botten (i)
Daniel Clifford
Lawrence Conway
Susan Corlett
Paul Harris
Robert Vassie
Helen Gillies
Executives
Peter Trout
Ian Poole
Total
BALANCE START
OF YEAR
PERFORMANCE
RIGHTS VESTED
OTHER CHANGES
DURING YEAR
BALANCE END
OF YEAR
-
1,565,201
225,850
33,731
-
250,000
250,000
2,362
2,362
-
1,565,201
-
-
-
-
-
-
-
2,329,506
1,565,201
-
-
-
-
-
-
-
2,574
2,574
5,148
-
3,130,402
225,850
33,731
-
250,000
250,000
4,936
4,936
3,899,855
(i) Mr Peter Botten was appointed as Independent Non-Executive Director on 13 September 2021 and was appointed as Chairperson on 4 November
2021.
145
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
11. SHAREHOLDINGS OF DIRECTORS AND OTHER KMP (CONTINUED)
—
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.
FY21
Directors
Daniel Clifford
Lawrence Conway
Susan Corlett
Paul Harris
Robert Vassie (i)
Helen Gillies (i)
Colin Johnstone (ii)
Michael Menzies (iii)
Executives
Peter Trout
Tim Churcher
Ian Poole
Total
BALANCE START
OF YEAR
PERFORMANCE
RIGHTS VESTED
OTHER CHANGES
DURING YEAR
BALANCE END
OF YEAR
-
171,429
33,731
-
-
-
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
1,565,201
225,850
33,731
-
250,000
250,000
-
-
2,362
-
2,362
2,851,859
1,565,201
2,087,284
2,329,506
Appointed 21 January 2021. On-market share purchases
(i)
(ii) Retired 2 March 2021
(iii) Retired 1 October 2020
Mr Conway 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.
146
—
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 2022, 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;
b) no contraventions of any applicable code of professional conduct in relation to the audit; and
c) no non-audit services provided that contravene 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.
Ernst & Young
Kellie McKenzie
Partner
30 August 2022
147
—
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
AURELIA METALS
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
—
FOR THE YEAR ENDED 30 JUNE 2022
NOTE
Sales Revenue
Cost of sales
Gross Profit
Corporate administration expenses
Rehabilitation expense
Share based expense
Impairment loss
Acquisition and integration costs
Other expenses
Other income
(Loss)/Profit before income tax expense and net finance costs
Finance income
Finance costs
(Loss)/Profit before income tax expense
Income tax benefit/ (expense)
(Loss)/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
4
13
21
4
28
4
3
3
4
5
20
20
2022
$’000
438,815
(416,366)
22,449
(14,561)
(3,531)
(1,780)
(135,687)
-
(182)
26,261
(107,031)
227
(7,234)
(114,038)
32,350
(81,688)
2021
$’000
416,477
(308,753)
107,724
(13,804)
-
(936)
-
(20,002)
(1,673)
5,833
77,142
314
(5,842)
71,614
(28,697)
42,917
(4,456)
(86,144)
2,492
45,409
(6.61)
(6.61)
3.97
3.93
148
—
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
—
AS AT 30 JUNE 2022
NOTE
2022
$’000
2021
$’000
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Derivative financial instruments
Current tax asset
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
Lease liabilities
Other financial liabilities
Derivative financial instruments
Total current liabilities
6
7
8
22
9
10
11
14
6
5
12
15
13
14
16
22
76,694
18,100
43,908
3,103
-
9,648
151,453
156,027
123,533
71,728
19,414
30,746
1,105
8,244
410,797
562,250
65,770
17,410
11,930
11,065
6,947
3,103
116,225
74,532
17,478
29,432
2,792
2,672
9,442
136,348
170,458
287,035
39,318
12,674
8,604
2,025
-
520,114
656,462
47,300
15,097
9,782
6,354
6,253
79
84,865
149
—
AURELIA METALS CONSOLIDATED STATEMENT OF
FINANCIAL POSITION (CONTINUED)
—
AS AT 30 JUNE 2022
NOTE
2022
$’000
2021
$’000
Non-current liabilities
Provisions
Interest bearing loans and borrowings
Lease liabilities
Other financial liabilities
Deferred tax 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
13
15
14
16
5
17
18
18
19
87,956
8,591
8,424
4,128
-
109,099
225,324
74,084
19,319
6,613
37,162
13,129
150,307
235,172
336,926
421,290
334,659
334,659
13,122
(1,964)
(8,891)
11,342
2,492
72,797
336,926
421,290
150
—
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
—
FOR THE YEAR ENDED 30 JUNE 2022
NOTE
Balance at 1 July 2020
Total profit for the period
Other comprehensive income
Total Comprehensive Income
Transactions with owners in their capacity
as owners
Shares issued, net of costs
Share-based payments
Dividend payments
Balance at 30 June 2021
Balance at 1 July 2021
Total profit for the period
Other comprehensive income
Total Comprehensive Income
Transactions with owners in their capacity
as owners
Share-based payments
Dividend payments
18
21
17
18
21
17
ISSUED
SHARE
CAPITAL
$’000
SHARE
BASED
PAYMENTS
RESERVE
$’000
185,878
10,406
-
-
-
148,781
-
-
-
-
-
-
936
-
HEDGE
RESERVE
$’000
RETAINED
EARNINGS/
ACCUMULATED
LOSSES
$’000
TOTAL
$’000
-
-
2,492
2,492
-
-
-
38,620
234,904
42,917
42,917
-
2,492
42,917
45,409
-
-
148,781
936
(8,740)
(8,740)
334,659
11,342
2,492
72,797
421,290
334,659
11,342
2,492
72,797
421,290
-
-
-
-
-
-
-
-
-
(81,688)
(81,688)
(4,456)
(4,456)
-
(4,456)
(81,688)
(86,144)
1,780
-
-
-
-
-
1,780
-
Balance at 30 June 2022
334,659
13,122
(1,964)
(8,891)
336,926
The above Statement should be read in conjunction with the accompanying notes
151
—
AURELIA METALS
CONSOLIDATED STATEMENT OF
CASH FLOWS
—
FOR THE YEAR ENDED 30 JUNE 2022
NOTE
2022
$’000
2021
$’000
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 refund/(paid)
Net cash flows from operating activities
23
Cash flows from investing activities
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 consideration and royalty costs
Payment for business acquisition
Payments of stamp duty and other acquisition costs
Net cash flows used in investing activities
Cash flows from financing activities
Principal element of lease payments
Repayment of loan and borrowings
Proceeds from the issue of shares, net of costs
Proceeds from borrowings
Dividend payment to shareholders
Net cash flows (used in) /from financing activities
Net increase / (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
17
6
453,469
(300,379)
(7,423)
226
(4,480)
12,680
154,093
(17,359)
(57,786)
(30,107)
(22,142)
(4,069)
-
-
(131,463)
(10,732)
(16,762)
-
7,327
-
409,562
(237,685)
(4,580)
314
(6,514)
(24,454)
136,643
(14,903)
(51,543)
(20,631)
(8,605)
(4,452)
(165,252)
(20,001)
(285,387)
(8,104)
(8,100)
124,811
45,000
(8,740)
(20,167)
144,867
2,463
(301)
74,532
76,694
(3,877)
(694)
79,103
74,532
152
—
NOTES TO FINANCIAL STATEMENTS
—
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
INCORPORATION DATE
Big Island Mining Pty Ltd
Dargues Gold Mines Pty Ltd
Defiance Resources Pty Ltd
Hera Resources Pty Ltd
Nymagee Resources Pty Ltd
Peak Gold Asia Pacific Ltd
Peak Gold Mines Pty Ltd
3 February 2005
12 January 2006
15 May 2006
20 August 2009
7 November 2011
26 February 2003
31 October 1977
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 2022 was authorised for issue
in accordance with a resolution of the Directors on 30 August 2022.
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 consideration costs which are measured at fair value.
The financial report has been presented in Australian dollars, which is the functional currency of the Company. All values are
rounded to the nearest thousand ($000), except when otherwise indicated under the option available to the Company under
ASIC Corporations (Rounding in Financial/Director’s Reports) Instrument 2016/191. The Company is an entity to which this
legislation instrument applies.
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. To ensure the Group
can meet its working capital and sustaining expansionary capital expenditure requirements in the ordinary course of business,
the Group routinely monitors its available cash and liquidity, including compliance (current and forecast) with its debt covenants
(refer note 15). To the extent necessary, the Group considers financing and other capital management strategies, to ensure
appropriate funding for its current operations and growth ambitions. These strategies may include refinancing existing loans or
negotiating covenant waivers/covenant holidays, new loans or future equity raising.
153
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. CORPORATE INFORMATION (CONTINUED)
—
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 (ie. existing rights that give it the current ability to direct the relevant activities of the investee);
exposure, or rights, to variable returns from its involvement 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.
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.
154
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 various counterparties with the largest customer accounting for 37% of the total sales
revenue (2021: 38%). The concentrate revenue arises from sales to various customers with the largest customer accounting for
52% of total sales revenue (2021: 14%).
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
155
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. OPERATING SEGMENTS AND PERFORMANCE (CONTINUED)
—
2.5. SEGMENT INFORMATION
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;
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.
The segment information for the reportable segments is as follows:
YEAR ENDED 30 JUNE 2022
NOTE
PEAK
MINE
$’000
HERA
MINE
$’000
DARGUES
MINE
$’000
CORPORATE &
ELIMINATION
$’000
TOTAL
$’000
Sales revenue
Site EBITDA
3
219,908
126,658
92,249
74,683
40,772
44,215
-
-
438,815
159,670
Reconciliation of profit before tax expense:
Impairment loss
Depreciation and amortisation expense
Corporate costs
Interest income and expense, net
Rehabilitation expenses
Share based expenses
Other operating income
Other expenses
Income tax expense
Loss after income tax
4
21
5
(135,687)
(137,221)
(14,561)
(7,007)
(3,531)
(1,780)
26,262
(183)
32,350
(81,688)
Segment assets and liabilities
Total assets
Total liabilities
PEAK
MINE
$’000
HERA
MINE
$’000
DARGUES
MINE
$’000
CORPORATE &
ELIMINATION
$’000
TOTAL
$’000
232,039
115,900
88,417
125,894
562,250
(97,063)
(54,192)
(40,470)
(33,599)
(225,324)
156
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. OPERATING SEGMENTS AND PERFORMANCE (CONTINUED)
—
2.5. SEGMENT INFORMATION (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
NOTE
PEAK
MINE
$’000
HERA
MINE
$’000
DARGUES
MINE
$’000
CORPORATE &
ELIMINATION
$’000
TOTAL
$’000
Sales revenue
Site EBITDA
3
245,214
138,924
32,339
110,950
58,425
14,816
-
-
416,477
184,191
Reconciliation of profit before tax expense:
Depreciation and amortisation expense
Corporate costs
Acquisition and integration costs and stamp
duty expense
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
21
5
(76,467)
(13,804)
(20,002)
(5,528)
(936)
(1,002)
5,833
(671)
(28,697)
42,917
FOR THE YEAR ENDED 30 JUNE 2022
Segment assets and liabilities
Total assets
Total liabilities
PEAK
MINE
$’000
HERA
MINE
$’000
DARGUES
MINE
$’000
CORPORATE &
ELIMINATION
$’000
TOTAL
$’000
213,229
74,691
275,643
92,899
656,462
(74,551)
(35,085)
(69,037)
(56,499)
(235,172)
157
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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
2022
$’000
2021
$’000
228,378
32,547
63,140
97,308
17,442
253,574
45,857
50,141
51,778
15,127
Total sales revenue from contracts with customers
438,815
416,477
Other income
Sundry income
Fair value adjustments/remeasurement of financial assets and liabilities
Fair value adjustment of financial assets
Remeasurement of financial liabilities
16
Total other income
Total finance income
Recognition and measurement
Sales revenue
Gold and silver doré sales
234
361
(1,104)
27,131
26,027
(2,762)
8,234
5,472
26,261
5,833
227
314
Revenue from gold and silver doré sales is recognised when control has been transferred to the counterparty (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.
158
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. SALES REVENUE AND OTHER INCOME (CONTINUED)
—
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 2022, the amount of deferred revenue is $3.6 million
(2021: $0.7 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 2022.
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 Gold 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.
The contingent consideration related to the aquisition of Dargues Gold Mine. The conditions for the contingent liability were
not met resulting in the release of the liability through profit or loss.
159
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. COST OF SALES AND OTHER EXPENSES
—
NOTE
2022
$’000
2021
$’000
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
Other expenses
(Gain)/Loss on disposal of fixed assets
Unrealised foreign exchange loss
Realised foreign exchange (gain)/loss
Exploration and evaluation expenditure written off
Total other expenses
Finance costs
Interest expense
Interest on lease liabilities
Unwinding of discount
Total finance costs
Impairment loss
Impairment loss regnonised in property, plant and equipment
Impairment loss recognised in mine properties
Total impairment loss
160
—
251,961
27,207
12,056
(12,079)
279,145
137,221
416,366
13,966
595
14,561
(43)
915
(723)
33
182
3,803
677
2,754
7,234
10,104
125,583
135,687
204,385
18,343
12,089
(2,531)
232,286
76,467
308,753
13,344
460
13,804
18
192
461
1,002
1,673
4,434
699
709
5,842
-
-
-
11
14
13
9
10
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 June
2022 and 2021 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
2022
$’000
(8,960)
1,305
(24,695)
(32,350)
2021
$’000
10,050
3,106
15,541
28,697
5.2. NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLE
Accounting (loss)/profit before income tax
Prima facie income tax expense @ 30%
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable income
Non-assessable items
Prior year under provisions
Previously unrecognised temporary differences
Income tax expense
2022
$’000
(114,038)
(34,211)
556
1,305
-
2021
$’000
71,614
21,484
4,832
3,106
(725)
(32,350)
28,697
161
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. INCOME TAX (CONTINUED)
—
5.3. DEFERRED TAX BALANCES
The net deferred asset of $8.2 million (2021: liability $13.2 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 asset/(liability)
Recognition and measurement
Current income tax
2022
$’000
2021
$’000
20,244
1,437
(1,852)
(20,478)
8,142
751
8,244
22,903
(27,904)
(743)
(10,348)
2,161
802
(13,129)
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.
162
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. CASH AND CASH EQUIVALENTS
—
Cash at banks
Short term deposits
Cash and cash equivalents
Recognition and measurement
2022
$’000
76,323
371
76,694
2021
$’000
74,258
274
74,532
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 shown as a non-current asset as is not available for day to day operations and is therefore excluded from cash
and cash equivalents. The Group has $30.7 million (2021: $8.6 million) held as restricted cash by the banking syndicate providing
the Guarantee Facility as part of the secured Syndicated Facilities Agreement (refer to Note 15 for further information).
7. TRADE AND OTHER RECEIVABLES
—
Trade receivables
GST receivable
Other receivables
2022
$’000
10,220
3,143
4,737
18,100
2021
$’000
8,131
6,326
3,021
17,478
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.
163
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. TRADE AND OTHER RECEIVABLES (CONTINUED)
—
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
This is mainly security deposits and employee receivables. In prior year the balance also included the estimated Net Working
Capital Adjustment receivable of $3 million arising from the acquisition of the Dargues Mine which was subsequently received
in August 2021.
8. INVENTORIES
—
Finished concentrate
Finished gold doré
Metal in circuit
Ore stockpiles
Materials and supplies
Total current inventory
Recognition and measurement
2022
$’000
26,266
658
1,741
4,686
10,557
43,908
2021
$’000
14,720
620
1,429
4,452
8,211
29,432
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, doré 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.
The increase in the finished concentrate held as a result of the of the shipment delays and rail capacity.
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.
164
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. PROPERTY, PLANT AND EQUIPMENT
—
Plant and equipment at cost
Property at cost
Accumulated depreciation
Impairment provision
Movement in property, plant and equipment
Carrying value at the beginning of the year
Acquisition of Dargues Gold Mine
Additions/expenditure during the year
Depreciation for the year
Impairment loss recognised during the year
Transfer to mine properties
Assets written off
Assets disposed or recognised
Closing balance
Recognition and measurement
NOTE
4
10
2022
$’000
281,681
5,417
2021
$’000
254,869
5,999
(120,967)
(90,410)
(10,104)
156,027
170,458
(4,593)
31,149
-
170,458
104,538
74,390
14,443
(30,564)
(22,432)
(10,104)
(262)
(55)
(2)
-
(336)
(126)
(19)
156,027
170,458
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. Property, plant and equipment with a value of $4.6 million related to the acquisition of Dargues Mine
was derecognised following the finalisation of the aquisition accounting.
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. An impairment loss of $10.1 million was recognised relating to the Dargues Gold Mine. Further details on the
impairment are included in note 10.
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.
165
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
—
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.
10. 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 Gold Mine
Impairment loss recognised during the year
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
NOTE
4
11
9
2022
$’000
610,640
(487,107)
123,533
287,035
4,680
(125,583)
53,752
139
(96,752)
262
123,533
2021
$’000
551,810
(264,775)
287,035
92,337
170,321
-
67,765
2,732
(46,456)
336
287,035
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.
166
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. MINE PROPERTIES (CONTINUED)
—
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 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.
Assessment of impairment
At each balance date, the Group conducts an assessment for any indicators of impairment on each asset or Cash Generating
Unit (CGU). The Group considers each of its mines to be a separate CGU.
Assuming indicators of impairment are identified, the carrying value of the asset or CGU was compared with its
recoverable amount. The recoverable amount is the higher of the CGU’s Fair Value Less Cost of Disposal (FVLCD) and
Value In Use (VIU). The FVLCD for each CGU was determined based on the net present value of the future estimated cash
flows (expressed in real terms) expected to be generated from the continued use of the CGUs (based on the most recent life
of mine plans), including any expansion projects, and its eventual disposal, using assumptions a market participant may take
into account. These cash flows were discounted using a real post-tax discount rate that reflected current market assessments
of the time value of money and the risks specific to the CGU.
If the carrying amount of an asset or CGU exceeds its recoverable amounts, the carrying amount is reduced to the recoverable
amount and an impairment loss is recognised in the Statement of Profit or Loss.
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.
At 30 June 2022, a comprehensive impairment assessment was conducted and it was noted that indicators of impairment
existed for the Dargues Mine CGU. This led to the recognition of an impairment loss of $135.7 million in profit or loss with
$125.6 million allocated to mine properties and the remaining balance to property, plant and equipment. There was no
impairment for the CGUs of the Hera and Peak Mines.
Dargues CGU
The recoverable amount determined for the Dargues Mine CGU at 30 June 2022 was $57.6 million, based on the current
LOM which takes into account the reduced average gold head grade and production profile over the remaining mine life.
The recoverable amount was determined by applying a discounted cash flow FVLCD model derived from the LOM model.
The calculation of the recoverable amount is most sensitive to the inputs assumed for the discount rate, the USD Gold price
and the USD/AUD exchange rate.
Inputs into the FVLCD calculation for Dargues included: forecast payable production of approximately 72koz gold; near term
average gold price of A$2,400 and cash flows discounted using an after-tax real discount rate of 7.5%.
167
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. MINE PROPERTIES (CONTINUED)
—
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.
11. 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 Gold Mine
Expenditure during the year
Transfer to mine properties
Expenditure written off during the year
Closing balance
Recognition and measurement
NOTE
10
2022
$’000
97,339
(25,611)
71,728
39,318
-
32,582
(139)
(33)
71,728
2021
$’000
64,927
(25,609)
39,318
15,610
6,698
20,744
(2,732)
(1,002)
39,318
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.
In the current year $23.8 million of the total expenditure related to the Federation project (FY21: $13.3 million}.
168
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
11. EXPLORATION AND EVALUATION ASSETS (CONTINUED)
—
Impairment
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, no impairment expense was recognised (2021: $1.0 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.
12. TRADE AND OTHER PAYABLES
—
Trade payables and accruals
Other payables
Recognition and measurement
2022
$’000
59,423
6,347
65,770
2021
$’000
42,445
4,855
47,300
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.
The trade payables and accruals includes $12 million relating to mark-to-market adjustments for concentrate sales invoices not
yet finalised.
No assets of the Group have been pledged as security for the trade and other payables.
169
—
AURELIA METALS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
13. PROVISIONS
—
Current
Employee
Mine rehabilitation
Deferred consideration
Other
Total current provisions
Non-Current
Mine rehabilitation
Deferred consideration
Employee
Total non-current provisions
2022
$’000
2021
$’000
7,566
1,813
1,532
1,019
11,930
7,007
1,619
1,035
121
9,782
87,163
72,793
386
407
983
308
87,956
74,084
Total provisions
99,886
83,866
AT 30 JUNE 2022
Opening balance
Re-measurement of provision
Rehabilitation expense charged to
Income statement
Discount unwinding charged to
Income Statement
Amounts paid/utilised during the year
Closing balance
AT 30 JUNE 2021
Opening balance
Acquisition of Dargues Gold Mine
Re-measurement of provision
Discount unwinding charged to Income
Statement
Amounts paid/utilised during the year
Closing balance
EMPLOYEE
$’000
MINE
REHABILITATION
$’000
DEFERRED
CONSIDERATION
$’000
OTHER
$’000
TOTAL
$’000
7,315
3,620
-
-
(2,962)
7,973
74,412
2,018
121
83,866
8,452
3,531
2,731
(150)
88,976
715
-
23
(838)
1,918
2,536
15,323
-
-
3,531
2,754
(1,638)
(5,588)
1,019
99,886
EMPLOYEE
$’000
MINE
REHABILITATION
$’000
DEFERRED
CONSIDERATION
$’000
OTHER
$’000
TOTAL
$’000
7,667
-
3,124
-
(3,476)
7,315
49,986
13,428
10,301
697
-
74,412
4,796
638
63,087
-
323
12
(3,113)
2,018
-
13,428
1,219
14,967
-
709
(1,736)
(8,325)
121
83,866
170
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
13. PROVISIONS (CONTINUED)
—
Employee benefits
The provision for employee benefits represents annual leave and long service leave entitlements for current employees.
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 secured Syndicated Facilities Agreement, the Company has a $65 million Credit Facility for the purpose of
providing Letters of Credit for the Company’s environmental guarantee obligations. At 30 June 2022, Letters of Credit totalling
$56.8 million have been drawn (30 June 2021: $47.7 million), offset by a total of $30.7 million (2021: $8.6 million) held by the
banks as restricted cash to back the Letters of Credit.
The Company periodically engages 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 updated estimates, amounts
recognised for future rehabilitation to our operating mine sites and land holdings, as well as amounts paid or utilised for
rehabilitation activities undertaken during the reporting period.
Deferred consideration
This relates to deferred consideration on the purchase of Hera Mine. The Group records deferred consideration at fair value using
the discounted cash flow methodology based on the two-year Australian government bond rate of 2.4% (2021: 0.05%).
Other provisions
Other provisions relate to electricity provisions.
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.
171
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
13. PROVISIONS (CONTINUED)
—
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. In instances where
there is no asset the changes are expensed in the profit or loss.
Deferred consideration in relation to Hera
The Company measures the deferred consideration 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.
172
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
14. 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
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 additions for the year include lease renewals amounting $7.2 million made in June 2022.
The following are the amounts recognised in profit or loss
Depreciation expense for right-of-use assets
Interest expense on lease liabilities
Expense relating to short term leases and low value assets (included in cost
of sales)
2022
$’000
12,674
17,244
(10,504)
19,414
2022
$’000
11,065
8,424
19,489
12,967
17,248
677
(11,403)
19,489
2022
$’000
10,504
677
-
11,181
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
2021
$’000
8,040
699
15
8,754
173
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
14. LEASES (CONTINUED)
—
Recognition and measurement
Right of use assets
The Group recognises right-of-use assets at the commencement date of the lease (ie. 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.
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 (ie. 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
(ie. 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.
174
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
15. INTEREST BEARING LOANS AND BORROWINGS
—
Current
Term loan facility
Less: Borrowing costs paid
EFFECTIVE
INTEREST RATE %
MATURITY
BBSY +4
30-Sept-2023
Other loans
3-6%
31-May-2025
2022
$’000
16,200
(1,142)
15,058
2,352
2021
$’000
16,200
(1,103)
15,097
-
Total current loans and borrowings
17,410
15,097
Non-current
Term loan facility
Less: Borrowing costs paid
BBSY +4
30-Sept-2023
Other loans
3-6%
31-May-2025
Total non-current loans and borrowings
Total interest-bearing liabilities
Undrawn facilities
Syndicated Working Capital Facility
Syndicated Guarantee Facility
Syndicated Facilities
4,500
(288)
4,212
4,379
8,591
26,001
20,000
8,167
20,700
(1,381)
19,319
-
19,319
34,416
20,000
2,200
The Group has a secured Syndicated Facilities Agreement totaling $105.7 million with a syndicate comprising ANZ, NAB and
BNP Paribas.
The facilities comprise a $20.7 million term loan, a $20 million working capital facility (undrawn) and a guarantee facility which
was increased by $15 million to $65 million during the year ($57 million utilised).
The Guarantee Facility includes an element of restricted cash. The restricted cash is shown as a non-current asset as is not available for
day-to-day operations. The Group has $30.7 million (2021: $8.6 million) held as restricted cash by the banking syndicate. The purpose of
the credit facility is to provide for the bank guarantee and environmental bond requirements for the Group.
The term loan is secured by a floating charge over all assets of the Group and is repayable in full by September 2023.
Throughout the term of the facility, the Company must maintain mandatory gold hedging for a minimum of 20% of the Group’s
forecast gold production in each twelve-month period.
Other loans
The Group has entered into loan agreements to fund the acquisition of mobile plant and equipment. The loans are repayable
by May 2025 with applicable interest rates ranging from 3% to 6%. The financed equipment is security for the loans.
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.
175
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
16. OTHER FINANCIAL LIABILITIES
—
Current
Third party royalty liability
Non-Current
Third party royalty liability
Contingent consideration liability
Total other financial liability
Movement in carrying value of other financial liabilities
Third Party Royalty Liability
Carrying value at the beginning of the year
Recognition at acquisition of Dargues Gold Mine
Payments during the year
Remeasurement of liability through profit & loss
Closing balance
Contingent consideration liability
Carrying value at the beginning of the year
Recognition at acquisition of Dargues Gold Mine
FV adjustment through profit & loss
Closing balance
NOTE
2022
$’000
2021
$’000
6,947
6,947
4,128
-
4,128
11,075
39,165
-
(5,209)
(22,881)
11,075
4,250
-
(4,250)
-
6,253
6,253
32,912
4,250
37,162
43,415
-
48,914
(1,370)
(8,379)
39,165
-
4,105
145
4,250
3
3
16.1. 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 Gold 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 Gold
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 a discount
rate of 2.15% and the impact of the periodic remeasurement of the following assumptions:
gold price;
life of mine extension and related change in sales volumes; and
foreign exchange rate.
The estimated sales volume for the remaining life of the mine was significantly reduced due to the impairment of the Dargues
Mine resulting in a lower royalty liability as at 30 June 2022.
Further details on the impairment are included in note 10.
176
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
16. OTHER FINANCIAL LIABILITIES (CONTINUED)
—
16.1. THIRD PARTY ROYALTY LIABILITY (CONTINUED)
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.
16.2. CONTINGENT CONSIDERATION LIABILITY
The Company acquired Dargues Gold Mine on 17th December 2020. The total purchase consideration of $190.5 million included
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 Resource discovered at Dargues up
to 30 June 2022.
As at 30 June 2022 there was no addition of incremental JORC compliant Mineral Resource discovered which met the
payment criteria. As such the conditions for contingent liability were not met resulting in the release of the liability through
profit or loss.
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.
177
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
17. CONTRIBUTED EQUITY
—
17.1 MOVEMENTS IN ORDINARY SHARES ON ISSUE
30 JUNE 2022
Opening balance
Shares issued on vesting of performance rights
Employee Share Scheme
Shares issued on vesting of performance rights
(i)
(ii)
(iii)
Closing balance
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
NOTES
DATE
NUMBER
$’000
1,234,739,875
334,659
7-Sept-21
4-Nov-21
76,993
674,388
30-Nov-21
1,565,201
-
-
-
1,237,056,457
334,659
NOTES
DATE
NUMBER
$’000
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
873,983,797
185,878
25-Nov-20
217,006,547
93,313
30-Nov-20
1,565,201
10-Dec-20
85,957,026
17-Dec-20
55,813,954
6-May-21
413,350
-
36,962
24,000
-
-
(5,494)
1,234,739,875
334,659
(i) On 7 September 2021, the Company issued 76,993 shares on the vesting of Performance Rights.
(ii) On 4 November 2021, a total of 674,388 shares were issued under the Employee Share Scheme for no consideration, (refer to note 21.2 for
further detail).
(iii) Shares issued upon the vesting of 1,565,201 Performance Rights for no consideration.
(iv) 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 Gold Mine. The shares were issued at $0.43 per share.
(v) Shares issued upon the vesting of 1,565,201 Performance Rights for no consideration. These shares issued were held in escrow for a period of
12 months from grant date.
(vi) 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 Gold Mine. The shares were issued at $0.43 per share.
(vii) 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 Gold Mine.
The shares were issued at $0.43 per share (Refer to note 28 for further detail).
(viii) On 6 May 2021, a total of 413,350 shares were issued under the Employee Share Scheme for no consideration (refer to note 21.2 for further detail).
(ix) Share issue costs of $5.494 million relates to the Entitlement Offers made during the year ended 30 June 2021.
178
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
17. CONTRIBUTED EQUITY (CONTINUED)
—
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.
17.2. DIVIDENDS MADE AND PROPOSED
Dividend paid
Total
2022
$’000
-
-
2021
$’000
8,740
8,740
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 and
30 June 2022.
The franking account balance at the end of the financial year is $41.9 million (2021: $54 million).
The Company currently does not have a share buy-back plan or a dividend reinvestment plan.
18. RESERVES
—
Share based payment reserve
Movements in reserves
Movement in share base payments reserve
Opening balance
Share based payment expense
Closing balance
2022
$’000
13,122
13,122
2022
$’000
11,342
1,780
13,122
2021
$’000
11,342
11,342
2021
$’000
10,406
936
11,342
179
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
18. RESERVES (CONTINUED)
—
OCI items net of tax:
Cash flow hedge reserve
Opening balance
Commodity forward contracts net of tax
Closing balance
Recognition and measurement
Derivatives designated as hedging instruments
2022
$’000
2,492
(4,456)
(1,964)
2021
$’000
-
2,492
2,492
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 22.1 and 22.5.2 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.
The Company also has 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.
180
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
19. RETAINED EARNINGS
—
Movements in retained earnings were as follows:
Opening balance
Profit after tax for the year
Dividend paid
Closing balance
20. EARNINGS PER SHARE (EPS)
—
(Loss)/Profit attributable to owners of Aurelia Limited used to calculate
basic and diluted earnings
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
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
2022
$’000
72,797
(81,688)
-
(8,891)
2021
$’000
38,620
42,917
(8,740)
72,797
2022
$’000
(81,688)
2021
$’000
42,917
No. of shares
No. of shares
1,236,163
1,082,354
1,250,600
1,090,726
(6.61)
(6.61)
3.97
3.93
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.
The effect of dilution has not been incorporated in calculating the diluted earnings per share as the effect is anti-dilutive.
181
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
21. SHARE BASED PAYMENT ARRANGEMENTS
—
Share based payments expense
Expense from employee performance rights plan
Expense from employee share plan
2022
$’000
2021
$’000
1,518
262
1,780
760
176
936
21.1. EMPLOYEE PERFORMANCE RIGHTS PLAN
The Company has 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.
21.2. EMPLOYEE SHARE PLAN
The Company has an 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 FY22, the plan provided each eligible employee with
2,574 fully paid ordinary shares. (2021: 2,362 shares)
21.3. 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
2022
NUMBER
2022
WAEP
2021
NUMBER
2021
WAEP
10,523,362
8,607,704
(1,642,193)
(1,484,498)
16,004,375
-
-
-
-
-
8,077,412
6,305,077
(1,565,201)
(2,293,926)
10,523,362
-
-
-
-
-
182
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
21. SHARE BASED PAYMENT ARRANGEMENTS (CONTINUED)
—
21.3. SUMMARY OF MOVEMENTS OF PERFORMANCE RIGHTS ON ISSUE (CONTINUED)
Performance Rights
Class 18B
Class 19A
Class 19C
Class FY21
Class FY22
Total
2022
NUMBER
2021
NUMBER
-
307,969
Unvested
2,284,641
2,470,720
Unvested
-
1,565,201
Unvested
5,452,474
6,179,472
Unvested
8,267,260
-
Unvested
16,004,375
10,523,362
Subsequent to the balance sheet date, the LTIP outcomes for Performance Rights under Class 19A were determined. There There
were also changes to Class FY21 and FY22 Performance Rights following staff movement. These movements will be displayed in
the next reporting period.
21.4. FAIR VALUE DETERMINATION
During the year, the Company issued a total of 8,607,704 performance rights (2021: 6,305,077 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.
21.5. 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 unless when the effect is anti-dilutive.
183
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES 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 Gold 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.
The Group holds the following financial instruments:
NOTE
6
7
6
22
15
12
16
14
16.2
13
22
2022
$’000
76,694
18,100
30,746
1,105
-
126,645
26,001
65,770
11,075
19,489
-
1,918
3,103
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
127,356
140,195
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 consideration
Derivative financial instruments - hedges
Balance at year end
184
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
Financial assets and liabilities
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 consideration royalty.
Accounting policies in respect of these financial assets and liabilities are documented within the relevant notes to the consolidated
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. The Group applies hedge accounting where derivative
commodity contracts are designated as hedges.
22.1. 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 2022, the Company had hedged 21,023 oz of gold with
monthly maturities through to 30 June 2022 (2021: 41,598 oz of gold).
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 2022:
30 JUNE 2022
Average Contract price (AUD/oz)
Ounces
21,023
TOTAL
LESS THAN
1 MONTH
1 TO 3
MONTHS
3 TO 6
MONTHS
6 TO 9
MONTHS
9 TO 12
MONTHS
2,371
1,600
2,359
2,435
2,596
2,685
3,850
6,148
5,366
4,059
30 JUNE 2021
Average Contract price (AUD/oz)
Ounces
41,598
TOTAL
LESS THAN
1 MONTH
1 TO 3
MONTHS
3 TO 6
MONTHS
6 TO 9
MONTHS
9 TO 12
MONTHS
2,442
4,900
2,435
14,700
2,427
11,948
2,422
6,600
2,382
3,450
185
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.2. 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 2022, the Company had $27.4 million in debt (2021: $34.4 million) and held $76.7 million (2021: $74.5 million) of
available cash.
22.3. 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.
2022
<1 YR
$000
1-2 YRS
$000
2-3 YRS
$000
3-4 YRS
$000
>4 YRS
$000
CONTRACTED CASH
FLOW OF LIABILITY $000
CARRYING VALUE
OF LIABILITY $000
Loans and borrowings
16,200
4,500
-
Equipment loans
2,352
2,465
1,951
Lease liabilities
11,070
7,995
Deferred consideration
1,225
Trade and other payables
65,770
614
-
427
108
-
Third party royalty liability
1,492
5,573
4,307
Total
98,109
21,146
6,793
-
-
4
-
-
-
4
-
-
-
-
-
-
-
20,700
6,768
19,496
1,947
65,770
11,372
19,270
6,731
19,489
1,918
65,770
11,075
126,053
124,253
There are no contracted cash flow liabilities relating to leases payable in period greater 5 years.
2021
<1 YR
$000
1-2 YRS
$000
2-3 YRS
$000
3-4 YRS
$000
>4 YRS
$000
CONTRACTED CASH
FLOW OF LIABILITY $000
CARRYING VALUE
OF LIABILITY $000
Loans and borrowings
16,200
20,700
-
-
Lease liabilities
6,810
4,384
2,254
264
Deferred consideration
1,034
804
Trade and other payables
47,300
-
180
-
-
-
-
-
-
-
Third party royalty
liability
6,253
5,835
5,995
10,125
14,018
Contingent consideration
5,000
-
-
-
-
Total
82,597
31,723
8,429
10,389
14,018
36,900
13,712
2,018
47,300
42,226
5,000
147,156
36,900
12,967
2,018
47,300
39,165
4,250
142,600
22.4. 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.
Although the Group has a concentrated customer base, they have continuously met their contractual obligations. On this basis,
at balance date, there were no significant concentrations of credit risk. The Group also limits its counterparty credit risk on
investments by using banks with investment grade credit ratings.
The total trade and other receivables outstanding as at 30 June 2022 was $18.1 million (2021: $17.5 million). No receivables are
considered past due or impaired. Cash and cash equivalents at 30 June 2022 was $76.7 million (2021: $74.5 million).
186
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.5. MARKET RISK EXPOSURES
22.5.1. Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating
activities, including revenue and expenses denominated in a foreign currency.
The group considers the effects of foreign currency risk on its financial position and financial performance and assesses its
option to hedge based on current economic conditions and available market data.
The Group manages its foreign currency risk by converting foreign currency receipts to AUD upon receipt and only maintaining
a minimal USD balance for foreign currency denominated commitments.
The table below demonstrates the sensitivity of revenue not converted at the time of sale to a change in the US$ exchange rate
with all other variables held constant:
EFFECT ON PROFIT BEFORE TAX
Increase/(decrease) in foreign exchange rate
+5%
-5%
2022
$’000
(3,756)
3,717
2021
$’000
(2,080)
2,001
The cash balance at year end includes US$3.9 million (2021: US$4.4 million) held in US$ bank accounts.
The table below demonstrates the sensitivity of the US$ denominated bank account balances to a change in the US$ exchange
rate with all other variables held constant:
EFFECT ON THE BANK BALANCES
Increase/(decrease) in AUD: USD foreign exchange rate
+5%
-5%
22.5.2. Commodity price risk
2022
$’000
(269)
297
2021
$’000
(177)
196
The Group is affected by the price volatility of certain commodities. Price risk relates to the risk that the fair value of future
cash flows of commodity sales will fluctuate because of changes in market prices largely due to supply and demand factors
for commodities. The Group is exposed to commodity price risk related to the sale of gold, lead, zinc, and copper on physical
prices determined by the market at the time of sale.
Commodity price risk may be managed, from time to time and as required and deemed appropriate by the Board, with the use of
hedging strategies through the purchase of commodity hedge contracts. These contracts can establish a minimum commodity
price denominated in either US$ 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.
The management of this risk includes an element of mandatory hedging as required under the secured Syndicated Facilities
Agreement, as well as Quotation Period hedging for metal in concentrates sold.
The mandatory hedging in place at 30 June 2022 comprised gold forward contracts for 21,023 ounces with an average price
of $2,505/oz (30 June 2021: 41,598 ounces with an average price of $2,426/oz).
187
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.5. MARKET RISK EXPOSURES (CONTINUED)
25.5.2. Commodity price risk (continued)
The Quotation Period hedging in place for concentrates sold at the end of the reporting period is summarised below:
COMMODITY
UNIT
30 JUNE 2022
30 JUNE 2021
QUANTITY
CONTRACT PRICE
QUANTITY
CONTRACT PRICE
Gold
Copper
Lead
Zinc
oz
t
t
t
3,274
570
1,585
400
US$1,841
US$9,860
US$2,225
US$4,018
-
-
601
483
-
-
US$2,175
US$2,854
During the financial year, gold and gold in concentrate unhedged sales were 9,249 ounces (2021: 102,589 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 $0.5 million (2021: $4.7 million).
During the financial year, the company made unhedged sales of concentrate containing payable lead of 4,831 tonnes (2021:
22,432 tonnes), payable zinc 12,394 tonnes (2021: 18,341 tonnes) and payable copper of 1,176 tonnes (2021: 4,356 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 $1.3 million (2021: $2.0 million).
22.5.3. 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. The Group’s exposure to the risk of
changes in market interest rates primarily relates to the Group’s cash and the Term Loan that have floating interest rates.
An increase/(decrease) in interest rates by 50 basis points will result in a $0.1 million (2021: $0.2 million) (decrease)/increase
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.
22.5.4. 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 (2021: $0.1
million) change in the investment.
22.5.5. 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 trade and other payables, 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.
188
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.5. MARKET RISK EXPOSURES (CONTINUED)
22.5.5. Capital risk management (continued)
Interest bearing loans and borrowings
Trade and other payables
Less: cash at bank
Net debt
Equity
Capital and net debt
Gearing ratio
NOTE
15
12
6
2022
$’000
26,001
65,770
(76,694)
15,077
336,926
352,003
4%
2021
$’000
34,416
47,300
(74,532)
7,184
421,290
428,474
2%
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 consolidated financial
statements approximate their fair values.
22.5.6. 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.
189
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.5. MARKET RISK EXPOSURES (CONTINUED)
25.5.6. Fair value hierarchy (continued)
2022
Assets
QUOTED PRICES IN
ACTIVE MARKETS
LEVEL 1 $000
SIGNIFICANT
OBSERVABLE INPUTS
LEVEL 2 $000
SIGNIFICANT
UNOBSERVABLE
INPUTS LEVEL 3 $000
Listed equity investments
1,105
-
Liabilities
Derivative financial instruments
Deferred consideration
2021
Assets
Derivative financial instruments
Listed equity investments
Liabilities
Derivative financial instruments
Deferred consideration
Contingent consideration liability
-
-
-
1,918
-
-
3,103
-
QUOTED PRICES IN
ACTIVE MARKETS
LEVEL 1 $000
SIGNIFICANT
OBSERVABLE INPUTS
LEVEL 2 $000
SIGNIFICANT
UNOBSERVABLE
INPUTS LEVEL 3 $000
-
2,025
-
-
-
2,672
-
79
-
-
-
-
-
-
1,035
4,250
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 2022.
Deferred consideration: 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 13,970 ounces (2021: 63,174 ounces). Future royalty
revenue is estimated using an assumed future average gold price of A$2,534/oz (2021: A$2,258/oz). The discount rate used
was the two-year government bond rate of 2.4% (2021:0.05%).
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.
190
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
23. 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
(81,688)
42,917
2022
$’000
2021
$’000
Adjustments for:
Impairment loss on mine properties
Depreciation and amortisation
Rehabilitation expense
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 in trade and other payables
(Decrease)/increase in other liabilities
Decrease/(Increase) in prepaid borrowing costs
Decrease in provisions
Decrease/(increase) in trade and other receivables
Increase in inventories
Increase in prepayments
135,687
137,816
3,531
-
(26,028)
(19,670)
33
1,780
178
43
2,754
18,465
(1,182)
1,053
(4,752)
861
(14,476)
312
-
76,927
-
20,002
(5,472)
4,243
1,002
936
273
(18)
708
18,686
6,252
(2,483)
(869)
(20,500)
(4,669)
(1,292)
Net cash flows from operating activities
154,093
136,643
191
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
24. 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
681
328
2022
$’000
2021
$’000
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.
226
143
79
1,129
482
429
31
1,270
25. 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
Profit/(loss) for the year
Total comprehensive income/(loss) for the year
192
—
2022
$’000
81,836
224,717
306,553
169,296
13,992
183,288
123,265
2021
$’000
85,382
204,525
289,907
124,786
43,447
168,233
121,674
334,659
334,659
11,159
(210,355)
135,463
16,465
12,009
13,834
(226,819)
121,674
(58,013)
(60,505)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
25. PARENT COMPANY INFORMATION (CONTINUED)
—
25.1. COMMITMENTS
Commitments contracted for at reporting date but not recognised as liabilities are as follows:
Payable not later than 12 months
2022
$’000
4,425
2021
$’000
5,630
26. COMMITMENTS AND CONTINGENCIES
—
26.1. CAPITAL COMMITMENTS
The commitments to be undertaken are as follows:
Payable not later than 12 months
26.2. 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.
26.3. GUARANTEES
2022
$’000
26,131
2021
$’000
31,792
2022
$’000
6,310
2021
$’000
4,926
The Group has a $65 million Guarantee Facility as part of the Syndicated Facilities Agreement. Under the facility, Letters of
Credit with an aggregate value of $56.8 million (30 June 2021: $47.8 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. Under the
Guarantee Facility a total of $30.7 million (2021: $8.6 million) is held as restricted cash by the banking syndicate providing the
Guarantee Facility, which is part of the secured Syndicated Facilities Agreement.
193
—
AURELIA METALS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
26. COMMITMENTS AND CONTINGENCIES (CONTINUED)
—
26.4. CONTINGENT LIABILITIES
At 30 June 2022, a contingent liability amounting to $4.25 million related to the acquisition of Dargues Gold Mine was released
because the conditions for settlement were not met. The change in the fair value was recognised in the profit or loss. There is no
contingent liability as at 30 June 2022.
27. 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.
27.1. TRANSACTIONS WITH OTHER RELATED PARTIES
During the period, the following transactions with related parties occurred:
Hollach Services Pty Ltd1
Lazy 7 Pty Ltd2
Kilorin Pty Ltd3
Total payments to related parties
1. Directors’ fees were paid to Hollach Services Pty Ltd; a company of which Paul Harris is a Director.
2. Directors’ fees were paid to Lazy 7 Pty Ltd; a company of which Colin Johnstone is a Director.
3. Directors’ fees paid to Kilorin Pty Ltd, a company of which Michael Menzies is a Director.
27.2. TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Compensation of key management personnel
Short – term employee benefits
Post – employment benefits
Share based payments transactions
Total compensation paid to key management personnel
2022
$’000
2021
$’000
125
-
-
125
106
107
25
238
2022
$’000
2,093
82
788
2,963
2021
$’000
2,356
75
990
3,421
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related
to key management personnel. Detailed information about the remuneration received by each KMP is disclosed
in the Remuneration Report
194
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
27. RELATED PARTY TRANSACTIONS (CONTINUED)
—
27.2. TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL (CONTINUED)
Key management personnel interests in the Employee Performance Rights Plan
Performance Rights held by Key Management Personnel under the Employee Performance Rights Plan have the following
expiry dates:
PERFORMANCE RIGHTS TRANCHES
EXPIRY DATE
2022 NUMBER
OUTSTANDING
2021 NUMBER
OUTSTANDING
Class 19A
Class 19C
Class FY21
Class FY22
Total KMP Performance Rights
30-Jun-22
30-Nov-21
30-Jun-23
30-Jun-24
1,970,678
-
3,108,620
3,429,653
8,508,951
1,970,678
1,565,201
3,108,620
-
6,644,499
27.3. OTHER RELATED PARTY TRANSACTIONS
There were no other related party transactions during the year (2021: nil).
195
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
28. ACQUISITION OF DARGUES GOLD MINE
—
Summary of acquisition
On 17 December 2020, the Group acquired 100% of the voting shares of Dargues Gold Mine Pty Ltd from privately held company
Diversified Minerals Pty Ltd.
The assets and liabilities which were initially recognised at provisional values were finalised at during the year and the details are
as follows:
NOTE
FINAL FAIR VALUE
$000
PROVISIONAL FAIR VALUE
30-JUN-21 $000
9
10
11
5
13
16
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 working capital adjustment
Scrip consideration fair value
Contingent consideration at fair value
Total consideration
Acquisition and integration costs (including stamp duty)
322
2,989
2,452
104
68,447
176,351
6,698
6,948
4,028
322
2,989
2,452
104
74,390
170,321
6,698
6,948
4,028
268,339
268,252
8,469
13,428
6,948
48,914
77,759
8,469
13,428
6,948
48,914
77,759
190,580
190,493
162,474
24,000
4,106
190,580
20,002
162,387
24,000
4,106
190,493
-
196
—
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
28. ACQUISITION OF DARGUES GOLD MINE (CONTINUED)
—
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.
29. NEW ACCOUNTING POLICIES AND INTERPRETATIONS
—
Accounting standards and interpretations issued but not yet effective
Certain new Australian Accounting Standards and Interpretations have been published that are not mandatory for reporting
periods commencing 1 July 2021 and have not been early adopted by the Company for the reporting period ending
30 June 2022.
The potential effect of the revised Standards/Interpretations on the Group’s consolidated financial statements has not yet
been determined.
30. DEED OF CROSS GUARANTEE
—
Pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785, Aurelia Metals and its wholly owned
subsidiaries entered into a deed of cross guarantee in 2018 and are relieved from the requirement to prepare and lodge an
audited financial report.
Dargues Gold Mine Pty Limited and Big Island Mining Pty Limited became parties to the deed during the financial year.
The effect of the Guarantee is that Aurelia Metals Limited has guaranteed to pay any deficiency in the event of winding up of any
controlled entity which is a party to the Guarantee or if they do not meet their obligations under the terms of any debt subject to
the Guarantee. The controlled entities which are parties to the Guarantee have given a similar guarantee in the event that Aurelia
Metals Limited is wound up or if it does not meet its obligations under the terms of any debt subject to the Guarantee.
The Consolidated Statement of Financial Position and Consolidated Statement of Profit or Loss & Other Comprehensive
Income for the closed group is not different to the Group’s Statement of Financial Position and Statement Profit or Loss & Other
Comprehensive Income.
31. EVENTS AFTER THE REPORTING PERIOD
—
There have been no matters or events that have occurred after 30 June 2022 that have significantly affected or may
significantly either the Group’s operations or results of those operations of the Group’s state of affairs.
197
—
AURELIA METALS 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 2022 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 2022.
On behalf of the Board,
Peter Botten
Chairman AC CBE
Daniel Clifford
Managing Director & CEO
30 August 2022
198
—
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
2022, the consolidated statement of profit and loss and other 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 2022
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
199
—
AURELIA METALS
AUDITOR’S REPORT
Carrying value of Mine Properties and Property, Plant and Equipment
Why significant
How our audit addressed the key audit matter
At 30 June 2022, the Group’s consolidated
statement of financial position included
$279.6m 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) as disclosed in
Note 10 to the financial statements. If any
such indicators exist, the Group estimates the
recoverable amount of the non-current assets
in the relevant CGU.
During the 2022 financial year and as at
30 June 2022, the Group assessed there were:
► No indicators of impairment for its Peak
and Hera CGUs; and
►
Indicators of impairment for the Dargues
CGU and as such performed an impairment
assessment for this CGU.
Based on the impairment assessment
performed for the Dargues CGU, an
impairment of $135.7m was identified at 30
June 2022.
Changes to key cashflow forecast assumptions,
such as commodity prices, forecast foreign
exchange rates and discount rate, or not
accurately identifying impairment indicators
could lead the Group to incorrectly 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 the Dargues CGU:
► Assessed whether the valuation
methodology applied by the Group to
measure the recoverable amount of the CGU
met the requirements of Australian
Accounting Standards.
► Tested the mathematical accuracy of the
impairment model.
► Involved our valuation specialists to assess
the key cashflow forecast assumptions such
as commodity price, discount 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
model 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
200
—
AUDITOR’S REPORT
Why significant
How our audit addressed the key audit matter
► Performed sensitivity analysis to evaluate
the effect on the CGU’s recoverable amount
of reasonably possible changes in key
forecast assumptions.
► Recalculated the carrying amount of the
Dargues CGU and compared the carrying
amount to the recoverable amount to
determine the estimated impairment charge.
► Assessed the adequacy of the disclosures in
Notes 9 and 10 of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
201
—
AURELIA METALS
AUDITOR’S REPORT
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 2022 Annual Report other than the financial report and our auditor’s report
thereon. We obtained the Directors’ Report, Operations and Financial Review, Letter from the Chairman
of the Remuneration and Nomination Committee and Remuneration Report, that are 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
202
—
AUDITOR’S REPORT
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
203
—
AURELIA METALS
AUDITOR’S REPORT
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 120 to 144 of the directors' report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of Aurelia Metals Limited for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Ernst & Young
Kellie McKenzie
Partner
Brisbane
30 August 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
204
—
UNAUDITED PERIODIC CORPORATE REPORT
VERIFICATION PROCEDURE
—
1. PURPOSE
—
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.
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 Resource and
Ore Reserve 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.
REVISION
DATE
CHANGE DESCRIPTION
1
21 June 2021
New procedure - endorsed by the Audit Committee
205
—
AURELIA METALS
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
—
—
Additional ASX Information as at 13 October 2022
Twenty largest Shareholders of Ordinary Shares
HOLDER NAME
SHAREHOLDING
ISSUED CAPITAL (%)
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LID
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