A B N: 94 106 641 963
Annual Report
Year ended 31 December 2020
Big River Gold Limited
Annual Report
31 December 2020
Contents to Financial Report
Contents
Corporate Information
Chairman’s letter
Directors’ Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
Auditor’s Independence Declaration
Additional ASX Information
Page
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27
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31
32
64
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70
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Big River Gold Limited
Annual Report
31 December 2020
Corporate Information
This annual report covers both Big River Gold Limited (the ‘Company’ or ‘Big River’) and its subsidiaries (the
‘Group’). The Group’s functional and presentation currency is Australian dollars ($).
A description of the Group’s operations and of its principal activities is included in the Review of Operations and
Activities in the Directors’ Report on pages 5 to 26. The Directors’ Report is not part of the financial report.
Directors
Andrew Richards (Executive Chairman) – appointed 1 January 2020
John Evans (Non-executive Director)
John Cathcart (Non-executive Director) – appointed 1 January 2020
Beau Nicholls – appointed 1 January 2020 (Non-executive Director); appointed 8 March 2021 (Technical
Director)
Stephen Copulos (Non-executive Chairman) – resigned 1 January 2020
Company Secretary
Andrew Beigel
Registered office and principal place of business
Level 29, 221 St Georges Terrace
Perth WA 6000 Australia
Telephone: +61 8 9480 3708
Brazil Office
Avenida do Contorno, 2090
Pilotis, Floresta, 30.110-012
Belo Horizonte – MG, Brazil
Telephone: +55 31 2515 0740
Auditors
Deloitte Touche Tohmatsu
Tower 2, Brookfield Place
123 St Georges Terrace Perth WA 6000
Telephone: +61 8 9365 7000
Facsimile: +61 8 9365 7001
Share Registry (Australia)
Automic Group
Level 2
267 St Georges Terrace
Perth WA 6000
Telephone (Australia): 1300 288 664
Telephone (International): +61 (0)2 9698 5414
ASX Code:
Ordinary shares – BRV
Listed Options – BRVO
2
Bankers
National Australia Bank Limited
100 St Georges Terrace
Perth WA 6000
Solicitors
HWL Ebsworth
Level 20
240 St Georges Terrace
Perth WA 6000
Telephone: +61 8 6559 6626
Big River Gold Limited
Annual Report
31 December 2020
Chairman’s Letter to Shareholders
Dear Shareholder,
It gives me great pleasure to present to you Big River Gold’s Annual Report for 2020, my first full year as
Executive Chairman of the Company.
Although the onset of the COVID-19 pandemic presented a unique set of challenges, I am satisfied that the past
12 months has seen a maturation of Big River and we are now better placed than ever to realise the full potential
of our 100%-owned 2.43Moz Borborema Gold Project in north-east Brazil.
Developments in the latter half of the year – in particular, the $20.4 million share placement cornerstoned by
Canadian firm Dundee Goodman Merchant Partners in December – meant that we moved into 2021 with
considerable momentum and I am pleased to report that this has well and truly been maintained.
There is no doubt that welcoming Dundee Goodman and several other North American and European
institutions onto the share register through the placement has added credibility to our plans to bring the fully
permitted, construction-ready Borborema open pit project into production in the near future.
It was extremely encouraging to see Dundee Goodman back up its $8 million investment in the placement by
spending another $9.9 million to lift its interest in the Company in early February 2021. Through this off-market
transaction with major shareholder, the Copulos Group, Dundee Goodman’s holding increased from 9.1% to
19.4%.
Not only was this a further vote of confidence in the direction Big River is heading with Borborema from a highly
regarded resources investor, it has brought better balance to the share register with no one group now holding
more than 20%.
As you may be aware, we also moved to tidy up the capital structure of the Company, with an 8-for-1 share
consolidation coming into effect in February. Among other benefits we expect the consolidation will make us a
more appealing option for international and domestic investors.
In moving Borborema towards development, we are mindful of ensuring the plant design is optimised from the
outset and that a decision on stage one design delivers the most efficient use of capital and ensures a smooth
transition when it comes to future expansion. The delays created by the coronavirus pandemic and the injection
of significant capital provides a unique opportunity to undertake this investigation and ensure that value is not
left on the table if and when a future expansion is undertaken.
Our approach to addressing this has involved initiating an options study that contemplates a larger capacity plant
than the 2Mtpa facility proposed in the July 2020 Definitive Feasibility Study for Stage 1. The Borborema
operation is currently permitted for a 4Mtpa throughput operation which would certainly be a better match for
the size of the deposit and an expansion in this order of magnitude is anticipated but subject to ongoing
feasibility studies and securing of additional process water. At the time of writing, those studies are nearing
completion.
While the December placement provided critical funding for the options study, we also earmarked some of the
capital for exploration. This drilling, the first to take place at Borborema since 2014, will focus on tenements to
the south-west of the project as well as identifying high-grade extensions within the project concessions and
converting inferred resources to indicated to potentially increase reserves within the current pit designs.
Despite Brazil being one of the countries hardest hit by COVID-19, we have been fortunate that our in-country
team, led by Vice President, Operations Pablo Diaz, and Country Manager, Diana Lima, has been able to keep
operating as per normal to a very large degree.
Travel to site has been impacted but is still possible provided the appropriate precautions are taken. Activities
are still being undertaken by various engineering groups involved in early stage infrastructure works including
improved water catchment, water pipelines and power lines and the project is being advanced and de-risked.
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Big River Gold Limited
Annual Report
31 December 2020
As I’m sure others going through similar processes will attest, trying to arrange bank finance for Borborema
against the backdrop of the pandemic has not been easy, particularly given the restrictions on international
travel.
Since resuming discussions at the start of the year though, we have seen more interest in what we are doing and
we remain confident of settling on a suitable funding package in the June quarter, setting us up for full-scale
construction to begin.
That prospect in itself is very exciting.
In finishing, I’d like to thank my fellow Directors, company employees and contractors and most importantly you,
the shareholders, for your support over the past year. We have made great strides but there is more to come.
Yours sincerely
Andrew Richards
Executive Chairman
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Big River Gold Limited
Annual Report
31 December 2020
Directors’ Report
REVIEW OF OPERATIONS
During the year Big River maintained as its primary focus progressing the Borborema Gold Project in north-eastern
Brazil towards development.
The findings of the December 2019 Definitive Feasibility Study (DFS) on the Project were updated in June 2020,
while an options study to ensure optimal plant design was initiated in January 2021.
Discussions to secure project financing progressed constructively and were expected to ramp up in early 2021 once
the results of the options review were published.
Despite the impact of COVID-19 within Brazil, mine based activities were still possible throughout the reporting
period provided appropriate precautions were taken and much of the required engineering work and negotiations
could be undertaken remotely. However, it did impact on the project financing timeline as potential financiers
found it difficult to assign resources and visit Brazil for their due diligence. This slowed down discussions but
regardless significant advances were made in the latter part of the year before the Christmas-New Year hiatus.
In the meantime a A$20.4 million placement secured in December 2020 and completed in February 2021 not only
strengthened the shareholder register with the addition of several well regarded and experienced North American
and European investors but provided funds to advance and further de-risk the Borborema project mainly in the
areas of detailed engineering and infrastructure.
BORBOREMA GOLD PROJECT
Rio Grande do Norte State, Brazil (BRV 100%)
The Borborema Project – Location and Licences
Borborema is located in the Seridó area of the Borborema province in north-eastern Brazil. It is 100%-owned by
Big River through its wholly owned subsidiary Cascar and consists of three mining leases covering a total area of
29km2 including freehold title over the main prospect area.
Big River owns the freehold land for the project area in which the mine, plant and infrastructure will be located.
The main Environmental and Installation Permits have also been granted by the relevant government authorities,
which will allow construction of the project to commence subject to financing.
During the year formal agreements were signed with local government authorities for the power line offtake and
construction (COSERN) and the sewage water pipeline from the local city of Currais Novos (CAERN). Approvals from
the authority responsible for the highways have been received to locate the pipeline and powerlines within the
restricted zones alongside the highway to site.
The project benefits from a favourable taxation regime, existing on-site facilities and excellent infrastructure such
as buildings, grid power and sealed roads. It is close to major cities and regional centres and the services they can
provide.
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Big River Gold Limited
Annual Report
31 December 2020
Figure 1. View to the south west over the Borborema pit showing the exposed ore zone and infrastructure
Appointment of Vice President, Operations
In March 2020, Big River was pleased to announce the appointment of Mr Luis Pablo Carlin Diaz (Pablo) Diaz to the
position of Vice President, Operations, with responsibility for mine operations at and around Borborema.
Pablo is a Brazilian mining engineer with Australian citizenship and more than 20 years’ experience in both
operational and senior management roles. He has ably guided the pre-production work and additional studies that
will progress Borborema’s financing, construction and eventual production since his appointment.
Updated Definitive Feasibility Study and Option Study
Updated Definitive Feasibility Study
During the June quarter, Big River undertook a review (Updated DFS 2020) of the Borborema Definitive Feasibility
Study (DFS) completed in December 2019 (DFS 2019) with a focus solely on improving the processing plant and
performance.
Through the review, the suitability of the proposed processing path was confirmed, but changes were
recommended to the location and layout of the process plant and in the choice of certain plant and equipment to
be used in comminution and elution circuits.
Among the key outcomes of the Updated DFS 2020 were a reduction in start-up capital costs for the 2Mtpa project
to US$90.7 million including a contingency provision of US$11.3 million and a reduction in the All-In Sustaining
Costs over the 10.2 years of production scheduled for Stage 1 to US$713 an ounce. Refer to Table 1 for details and
key parameters.
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Big River Gold Limited
Annual Report
31 December 2020
The pre-tax Project NPV (at 8% discount) increased from US$218 million to US$342 million while the after tax NPV
(at 8% discount) increased to US$287 million.
The updated Project Financial Model used a flat gold price of US$1,550 an ounce compared to the DFS 2019
assumption of US$1,400, which remains below the consensus of recent forecasts compiled by Bloomberg and is
substantially lower than the current spot price of gold. It was also updated for the latest economic factors that had
changed the Project’s favour including tax exemptions and currency exchange rates.
Figure 2. View to the north west over Borborema processing plant as per Updated DFS 2020 study.
Table 1 - Stage 1 Key Parameters
Mineral Resources (reported above 0.5g/t Au cut off, 2013)
68.6Mt @ 1.10 g/t Au (2.43Moz)
Stage 1 Ore Reserve Scheduled to be mined in DFS
20.0Mt @ 1.22 g/t (784,480 oz)
Project type and processing
Capital Costs
Processing plant Capital Costs
Non Processing infrastructure and Owners costs
Contingency
Sub Total Plant & Infrastructure Capital
Working capital – Mine establishment pre-production
Total Capital Summary
NPV (8%, Pre-Tax)
NPV (8%, Post-Tax)
IRR (Pre-Tax)
IRR (Post-Tax)
Payback from start of production
Life of Mine C1 Cash Costs
7
Open pit mining and 2Mtpa 3 stage
crush/Ball mill
US$ 54.43M
US$24.95M
US$ 11.33M
US$ 90.71M
$ 5.36M
US$ 342M
US$ 287M
64.7%
57.9%
1.4 yrs
US$534/oz
Big River Gold Limited
Annual Report
31 December 2020
Life of Mine AISC costs
Production Summary
Mine Life (from commissioning date)
Strip ratio (waste (t): Ore(t))
Mill throughput (total)
Grade
Recovery
Gold produced – over Life of Mine
Project Economics, US$M
Study Gold price
Gross Revenue LOM
Operating costs LOM
Capital:
Capital – Plant, Infrastructure, Owners costs (incl contingency)
Working capital – Mine establishment pre-production
Capital – sustaining and mine closure costs
EBITDA
NPAT
US$713/oz
LOM
10.2 years
4.2
20.0 Mt
1.22 g/t Au
92.5%
729,374 oz
LOM
$1,550/oz
$ 1,131M
$ 389M
$ 90.71M
$ 5.36M
$ 20.97M
$724.2M
$526.6M
Under the Updated DFS, Stage 1 of the Project was expected to produce 729,400 ounces of gold over 10.2 years,
which comprises only a portion of the Borborema Resource/Reserves of 2.43 million ounces and 1.61 million
ounces respectively.
The first years of the current Stage 1 operational plan will see higher grades preferentially fed to the mill so that
production approaches 100,000 oz gold in year 4. In subsequent years mill feed will be augmented by medium
grade ore which will coincide with declining mining costs to maintain the margin (Figure 3).
Figure 3. Production profile for Stage 1 DFS
The chart presents anticipated annual gold production ( koz Au) and All In Sustaining Cost (AISC,
US$/oz). Stage 1 represents ~30% resource and ignores any possible future expansion above
2Mtpa throughput.
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Big River Gold Limited
Annual Report
31 December 2020
During the last quarter of 2020 efforts were progressed to secure additional water supplies that would underpin
an expansion of the project, subject to ongoing feasibility studies. Should an expansion be viable it may commence
during the first few years of Stage 1.
Option Study
Following completion of the $20.4 million share placement by the Company in December, an option study was
initiated to consider whether the process circuit design was best optimised for a possible throughput expansion
above the initial 2Mtpa to better align plant size with anticipated reserves.
The goal of the Option Study is to optimise the existing Stage 1 design in order to minimise disruption and
downtime when transitioning to a Stage 2 expansion, should it be proven viable. It should be noted that the actual
size of any future expansion will be subject to the completion of feasibility studies and the adequate supply of
process water.
Results reported to the ASX on 30 March 2021, were very encouraging in terms of a refined plant layout, improved
equipment selection and indicative costing. The process circuit design has not changed but equipment selection
has been modified which, combined with space provisions in the design, will facilitate an expansion of up to 4Mtpa
throughput with minimal disruption to production and incremental capital cost. The 4Mtpa scale was chosen as a
starting point for comparison and because that is currently the maximum throughput that the project is permitted
to operate.
The Option Study capital and operating cost estimates are currently at a lower order of accuracy than would be
expected for a Definitive Feasibility Study and will be improved in early 2021 prior to presentation to prospective
project financiers.
Figure 4. Borborema 2Mtpa Stage 1 plant and equipment and revised layout recommended by Option Study, showing
additional plant for a possible future expansion (illustrated in grey).
The SAG mill (1) and 2250kW ball mill (2) are shown while additional plant and equipment that might be installed to take
the expansion up to 4Mtpa is shown in grey in the space left vacant. This includes another 2250kW ball mill (3), a doubling
of the CIL tank capacity (4), an increase in gold room capacity (5) and additional filtration cells (6). Space for a mica recovery
circuit is shown at (7) – a decision that is subject to further assessment.
Some modifications may occur to this layout as detailed engineering continues such as the location of the electrical sub-
station (8) and orientation of the SAG/ball mills to improve maintenance access.
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Big River Gold Limited
Annual Report
31 December 2020
Placement and funding discussions
Big River completed a $20.4 million two-tranche share placement to Australian and international institutional and
sophisticated investors in February 2021 (Tranche 1: $8.4 million, Tranche 2: $12.0 million), with the funds to be
used to advance the Borborema Gold Project.
A total of 408 million shares were issued at an issue price of $0.05 a share.
The very strong demand for the placement included a cornerstone commitment of $8.0 million from highly
regarded Canadian resources investor Dundee Goodman Merchant Partners, which also acted as joint lead
manager and joint bookrunner alongside Jett Capital Advisors LLC and Petra Capital.
Upon completion of the second tranche of the placement in January, Dundee held approximately 9.2% of the
Company’s issued ordinary shares and has since increased its interest to 19.4% through an off-market transaction
with major shareholder, the Copulos Group who reduced their holding to 18.7%.
The result of this change in the register has seen the introduction of several strong investors recognised for their
investment and production expertise within the gold sector. This provides a stronger alignment of the Company’s
shareholders with the aim and ability to develop a major gold project in the view of project financiers.
Along with the Option Study focusing on optimal plant design discussed above, funds from the placement will be
used to:
• Undertake early infrastructure works including water catchment and finalising the water pipeline and
power supply;
• Detailed engineering design and accelerating plant expansion studies;
• Appoint a project team to manage implementation as well as mine production and grade control teams;
and
• Undertake drilling programs for detailed mine planning and resource definition and exploration in and
around the planned pit.
While the placement was a significant, positive step, securing project financing in full remains the priority focus
for Big River.
Traditional financiers were slow to respond during the year, largely due to instability in financial markets and the
impact COVID-19 had on travel. But several proposals were forthcoming and more were expected as discussions
resumed following the Christmas/New Year break.
During the September Quarter, the Company appointed Auramet International LLC, a well-connected precious
metals merchant bank and advisory firm based in North America, to assist with securing debt funding for the
Borborema Gold Project.
Auramet has extensive experience in closing project finance mandates and financing mining projects in the
Americas, Africa, Europe and Australia and is particularly well versed in the Brazilian gold sector, having worked
with the majority of companies currently operating in the country.
The results of the option study will be incorporated into due diligence materials provided to potential financiers,
with the Company aiming to have settled on a project finance package by mid-year.
Mica by-product testwork
Further testwork was undertaken in Germany and Perth during the year investigating the prospect of producing
the industrial mineral mica at Borborema.
The Boroborema Project contains very significant quantities of auriferous mica that will be processed through the
2Mtpa CIP process plant.
Testwork completed by Dorfner Analysenzentrum und Anlagenplanung Gmbh (ANZAPLAN) in Germany
determined that after processing through milling, cyanide leach and elution circuits, a substantial amount of mica
could be separated by low cost magnetic separation and that product retained attractive commercial chemistry
and physical properties typical of the phlogopite group of micas.
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Big River Gold Limited
Annual Report
31 December 2020
More recently, Nagrom in Perth has been working to produce a commercially viable bulk mica concentrate to make
available to potential distributers and offtake partners. Work is ongoing but encouraging results have been
produced to date. However, securing offtake and pricing will require extended negotiations and market
acceptance from established agents and purchasers in the market.
Potential applications for a mica product from Borborema include in the large volume plastic filler market (in
particular, dark-coloured polymers) and in the paint market where it would serve as a key additive with anti-
corrosive properties.
COVID-19 Response
The COVID-19 pandemic has had an impact on management because travel has not been possible due to the
mandatory government suspension during 2020 of all international travel and the closure of the Western
Australian border. Brazil employees were required to work from home due to the closure of the Brazil office, and
employees at all levels of the business were asked to change the way they work, and how they interacted
professionally and socially. There have been no COVID-19 cases identified amongst our employees, and the
Company has managed to minimise the adverse impact of the pandemic on its operations in 2020.
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Big River Gold Limited
Annual Report
31 December 2020
DIRECTORS
The Directors of Big River Gold Limited (“the Parent Entity” or “Big River” or “the Company) and its controlled
entities (“the consolidated entity” or “the Group”) submit herewith the annual financial report of the Group for
the year ended 31 December 2020 (“the period”). In order to comply with the provisions of the Corporations Act
2001 (Cth), the Directors’ report as follows:
Information about the Directors
The names and particulars of the Board of Directors (“the Board”) of the Company during or since the end of the
financial year are:
Mr Andrew Richards (Executive Chairman) – Appointed 1 January 2020
Mr Richards is a geologist with over 35 years of experience in the international mining industry which included
company management and project finance. He has worked at a senior level in both production and exploration
over a wide variety of areas and commodities, and has also undertaken technical review, project audits and
monitored project construction. He is a member of AUSIMM and AIG. Mr Richards has worked extensively with
gold, base metals, rare earths and industrial minerals in Australasia, Asia, Africa and South America. He is and has
been on the boards of several listed companies on ASX and AIM and was previously Managing Director and CEO of
two ASX listed companies operating in China.
Mr John Evans (Non-Executive Director) B.Comm (Hons), FCA, CPA, MAICD
Mr Evans holds a Commerce (Hons) degree from the University of Queensland, is a Fellow of Chartered
Accountants Australia & New Zealand and is a member of both CPA Australia and the Australian Institute of
Company Directors.
Mr Evans is currently the Principal of a Business Broking and Advisory practice, and advises a broad range of
businesses, in both the SME sector and larger corporate clients, on matters such as strategic planning, marketing,
governance, and financial analysis. Prior to this, Mr. Evans held a series of executive positions in Finance and
General Management in Australian public company groups over a 15 year period, in industries including
telecommunications, banking and insurance, superannuation and funds management, media, hospitality and
property development.
He has held several other non-executive directorships in Australian public companies, and is also a director of
several private companies, two not-for-profit organisations, and provides board consulting services to two other
company groups.
Mr Evans is Chairman of the Audit and Risk Committee and the Remuneration Committee.
Mr John Cathcart (Non-Executive Director) – Appointed 1 January 2020
Mr Cathcart has 30 years’ experience in mining and mining investment analysis and extensive experience in the
resources sector at a technical, corporate and financial level, working in gold, copper and nickel at several major
operations. He made the successful transition to the financial sector and broking in 1994 where he established a
very strong reputation with several brokers including Baillieu’s, BT, HSBC and CommSec before running the
Resources portfolio at Thorney Investments.
Mr Cathcart remains an investment manager at Thorney as well as a director of the recently established
stockbroking firm Rawson Lewis.
Mr Cathcart is a member of both the Audit and Risk Committee and the Remuneration Committee.
Mr Beau Nicholls – Appointed 1 January 2020 (Non-Executive Director); Appointed 8 March 2021 (Technical
Director)
Mr Nicholls is a geologist and project manager with over 25 years of international experience and has worked in
over 20 countries including Australia, Eastern Europe, West Africa and South America and established a solid
technical and practical base to operate in challenging environments.
Mr Nicholls has a wide technical and corporate management experience at a senior level in gold exploration and
mining for both mining groups and international consulting groups. He spent 9 years working in Brazil and speaks
Portuguese fluently.
Mr Nicholls is a member of both the Audit and Risk Committee and the Remuneration Committee.
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Big River Gold Limited
Annual Report
31 December 2020
Mr Stephen Copulos (Non-Executive Chairman) - Resigned 1 January 2020
Mr Copulos has over 35 years of experience in a variety of businesses and investments in a wide range of industries,
including manufacturing, mining, fast food, property development and hospitality. He has been the Managing
Director of the Copulos Group of companies, a private investment group, since 1997. Mr Copulos is an active global
investor who brings significant business acumen and greater diversity to the Board of Big River Gold. He has been
a major shareholder of Big River for many years and is aligned to improving shareholder returns.
Andrew Beigel (Company Secretary) B.Comm.
Mr Beigel has more than 25 years of corporate experience across a range of industries and has held executive
positions with other ASX listed companies in the resources sector. He has previously been involved in development
and funding of projects and bankable feasibility studies.
Shares and options issued during the financial period
The Company issued 190,660,373 (all the below are on a pre-consolidation basis, except where indicated
differently) shares during the year at an average price of $0.048 per share.
Of the shares issued, 2,325,688 were as a result of the exercise of options, 15,000,000 ordinary shares were
issued on vesting of performance rights, and 5,000,000 were issued as remuneration. Since the end of the year
7,058,853 ordinary shares have been issued on vesting of performance rights.
There were no options issued by the company during the year.
Details of unissued shares under option (pre-consolidation) at the date of this report are:
No. shares under
option
Class of shares under
option
Exercise price
($)
Expiry date of options
176,756,617
24,480,000 1
ordinary
ordinary
0.02
0.06
30-Jun-22
4-Feb-24
1 The options were granted on 5 February 2021 after shareholder approval was obtained on 28 January 2021.
The issuing entity for all ordinary shares under option is Big River Gold Limited. The holders of these options do
not have the right, by virtue of the option, to participate in any share issue of the Company.
During the year, following shareholder approval, the Company issued 85,000,000 performance rights to the
Executive Chairman, Mr Andrew Richards, and 32,500,000 to the Vice President, Operations, Mr Pablo Diaz. These
performance rights are subject to performance conditions and expire between 31 December 2020 and 30 June
2026. Mr Richards was also issued 5,000,000 shares lieu of cash remuneration, and the Non-executive Directors
(Mr John Evans, Mr John Cathcart, and Mr Beau Nicholls) were each issued 2,352,951 performance rights with a
service condition that they remain directors of the Company until the date the remuneration shares were issued
after 31 December 2020.
Shares issued on exercise of performance rights during the year are detailed in the following table (pre-
consolidation):
Date performance rights granted
Fair value at grant date
Number of shares issued1
$555,000
(1) At 31 December 2020 there were 7,058,853 performance rights (pre-consolidation) with a grant date fair value of $224,877
15,000,000
24-Jul-20
that had vested during the year and were unissued at year end.
Rights outstanding at 31 December 2019
Rights issued during the year
Rights vested during the year 2
Rights vested during the year - issued January 2021
Rights forfeited during the year
Rights outstanding at the date of this report (pre-consolidation)
Number of Rights
-
124,558,853
(15,000,000)
(7,058,853)
(2,500,000)
100,000,000
(2)
These performance rights were measured at the grant date fair value and were subject to shareholder approval which was
received on 24 July 2020.
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Big River Gold Limited
Annual Report
31 December 2020
Interests in the shares and performance rights of the Company and related bodies corporate
As at the date of this report, the interests of the Directors in the shares and performance rights of Big River Gold
Limited are as follows:
Director
A. Richards
J. Evans
J. Cathcart (1)
B. Nicholls (2)
Number of ordinary shares 3
4,437,500
Number of unlisted
performance rights 3
8,750,000
569,119 -
-
419,119
-
319,119
(1) Appointed 1 January 2020
(2) Appointed 1 January 2020
(3) Holdings are post-consolidation of capital
J. Evans, J. Cathcart and B. Nicholls exercised 2,352,951 (pre-consolidation) performance rights each on 5 February 2021 in
relation to Directors’ fees for the year ended 31 December 2020. They each received 1 ordinary share for each performance
right exercised (294,119 ordinary shares each post-consolidation).
Dividends
The Directors do not recommend that a dividend be paid. No dividend has been paid by the Company (2019: Nil).
Principal activities
The principal activity of the Group during the financial period was mineral exploration and evaluation in Brazil.
Functional currency
For the purposes of the financial statements, the results and financial position of the Group are expressed in
Australian Dollars (“$”), which is the functional currency of the Group and the presentation currency of the
financial statements.
CORPORATE
During the year the Group raised $8,463,248 (before costs) through the issue of 170,660,373 ordinary shares (pre-
consolidation).
Operating results for the period
The Group’s operating loss after income tax for the period was $2,923,774 (December 2019: restated profit of
$4,729,702). The Group’s basic loss per share for the year from continuing and discontinuing operations was $1.76
post-consolidation of capital (0.22 cents basic loss per share pre-consolidation), (December 2019: basic loss per
share of $1.45 post-consolidation, 0.18 cents loss per share pre-consolidation).
Liquidity and Capital Resources
The Consolidated Statement of Cash Flows illustrates that there was an increase in cash and cash equivalents in
the year ended 31 December 2020 of $5,805,949 before foreign exchanges impacts (December 2019: increase of
$3,924,866). The cash increase was largely a result of funds received from capital raisings exceeding payments for
the Borborema DFS, exploration and general overheads.
Risk management
The Group takes a proactive approach to risk management. The Audit and Risk Committee is responsible for
ensuring that risks, and also opportunities, are identified on a timely basis and that the Group’s objectives and
activities are aligned with the risks and opportunities identified by the Board.
Significant changes in the state of affairs
The state of affairs of the Group was not affected by any significant changes during the financial period not
otherwise stated in the report.
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Big River Gold Limited
Annual Report
31 December 2020
Environmental regulation and performance
The Group’s activities are subject to environmental regulations under Brazil federal and state legislation. However,
the Board believes that the Group has adequate systems in place for the management of its environmental
requirements and is not aware of any breach of those environmental requirements as they apply to the Group.
Significant events after the balance date
On 5 February 2021 the Company issued the following securities, pursuant to shareholder approval at a general
meeting of shareholders held on 28 January 2021:
•
•
•
239,665,315 shares at $0.05 each raising $11,983,266 (before costs) as part of a placement to raise $20.4
million as announced on 7 December 2020;
24,480,000 Options exercisable at $0.06 each (expiring 4 February 2024) as part consideration for the
provision of joint lead manager services for the Placement to Joint Lead Managers (Dundee Goodman
Merchant Partners, Jett Capital Advisors LLC and Petra Capital);
2,352,951 shares each to Mr John Evans, Mr John Cathcart and Mr Beau Nicholls as consideration for
services provided to the Company as Non-Executive Directors during the year ended 31 December 2020.
On 8 February 2021 Dundee Goodman Merchant Partners (Dundee) increased its shareholding in the Company to
19.4% through an off-market transaction with the Copulos Group reducing their shareholding to 18.7%.
On 25 February 2021 the issued capital of the Company was consolidated on an 8 for 1 basis, as announced on 29
December 2020 and approved at the general meeting of shareholders held on 28 January 2021.
No other matter or circumstance has occurred subsequent to year end that has significantly affected, or may
significantly affect, the operations of the Company, the results of those operations or the state of affairs of the
entity in subsequent financial years.
Future developments
The Group will continue to focus on mineral exploration and development opportunities.
Indemnification and insurance of officers and auditors
During the financial year, the Group indemnified each of the Directors against all liabilities incurred by them as
Directors of the Company (and subsidiary companies) and all legal expenses incurred by them as Directors of the
Company (and subsidiary companies).
The indemnification is subject to various specific exclusions and limitations.
The Company provided Directors’ and Officers’ liability insurance during the year.
The Company did not provide any insurance or indemnification for the auditors of the Group.
15
Big River Gold Limited
Annual Report
31 December 2020
Remuneration Report - audited
This remuneration report outlines the Director and Executive remuneration arrangements of the Company and
the Group in accordance with the requirements of the Corporations Act 2001 (Cth) and its regulations. For the
purposes of this report, Key Management Personnel of the Group are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Company and the Group,
directly or indirectly, including any Director (whether executive or otherwise) of the Parent Company.
Directors and Key Management Personnel
The following persons acted as Directors and/or Key Management Personnel of the Group during or since the end
of the financial year:
Mr A. Richards
Mr S. Copulos
Mr J. Evans
Mr B. Nicholls
Mr J. Cathcart
Mr A. Beigel
Mr J. Nery
Ms D. Uchoa Lima
Mr P. Diaz
Chairman (Executive) – appointed 1 January 2020
Chairman (Non-Executive) – resigned 1 January 2020
Director (Non-Executive)
Director (Non-Executive) – appointed 1 January 2020;
Director (Technical) – appointed 8 March 2021
Director (Non-Executive) – appointed 1 January 2020
Chief Financial Officer and Company Secretary
Country Manager – resigned 20 January 2020
Country Manager – appointed 1 January 2020
Vice President, Operations – appointed 2 March 2020
Remuneration policy
The remuneration policy of the Group is to ensure that remuneration packages of Directors and other Key
Management Personnel properly reflect the person’s duties and responsibilities and that remuneration is
competitive in attracting, retaining and motivating Directors and other Key Management Personnel of the Group.
As part of the remuneration policy the Group issues incentive options and performance rights to Directors and
other Key Management Personnel. Apart from Non-Executive Directors, these options and performance rights may
require achieving specific performance targets as a condition of vesting.
The aggregate sum available for remuneration of Non-Executive Directors is currently $460,000 per annum as
approved at a General Meeting of shareholders on 19 May 2016.
The tables below set out summary information about the Group’s earnings and movements in shareholder wealth
for the two most recent financial periods ending 31 December 2020:
Revenue
Net profit/(loss) before tax
Net profit/(loss) after tax
Share price at start of period
Share price at end of period
Interim dividend
Final dividend
Basic profit/(loss) per share (post-consolidation)
Diluted profit(loss) per share (post-consolidation)
(1) From continuing and discontinued operations
(2) See note 2(c) for details regarding the restatement as a result of an error
31 Dec 2020
$
31 Dec 2019(1) (2)
$
-
(2,923,774)
(2,923,774)
-
4,729,702
4,729,702
31 Dec 2020
cents
31 Dec 2019(1)(2)
cents
2.0
5.0
-
-
(1.76)
(1.76)
2.0
2.0
-
-
4.25
3.26
16
Big River Gold Limited
Annual Report
31 December 2020
Remuneration Report - audited (continued)
Bonuses and share-based payments granted as compensation for the current financial year
The Company received approval for the introduction of an employee share option scheme (the Plan) in 2008. The
plan was last re-approved at a meeting of shareholders on 24 July 2020, the details of which are set out below. In
the event of any inconsistency between the terms of the Plan and the summary set out below, the terms of the
Plan will prevail.
1.
2.
3.
4.
5.
The Options can only be issued to Employees or Officers of the Company and its subsidiaries.
Each Option entitles the holder, on exercise, to one fully paid ordinary Share in the Company.
Shares issued on exercise of Options will rank equally with other fully paid ordinary Shares of the Company.
The exercise price and expiry date for the Options will be as determined by the Board (in its discretion) on
or before the date of issue.
The maximum number of Options that can be issued under the Plan is not to be in excess of 5% of the total
number of Shares on issue.
6. An Option may only be exercised after that Option has vested, after any conditions associated with the
exercise of the Option are satisfied and before its expiry date. The Board may determine the vesting period
(if any). On the grant of an Option the Board may, in its absolute discretion, impose other conditions on
the exercise of an Option.
7. An Option will lapse upon the first to occur of its expiry date, the holder acting fraudulently or dishonestly
in relation to the Company or related entities, or on certain conditions associated with a party acquiring a
90% interest in the Shares of the Company.
8. Upon an Optionholder ceasing to be a Director, employee or officer of the Company and its subsidiaries,
whether by termination or otherwise, the Optionholder has 45 days from the day of termination, or
otherwise, to exercise their Options before their Options lapse.
9.
If the Company enters into a scheme of arrangement, a takeover bid is made for the Company’s Shares, or
a party acquires a sufficient interest in the Company to enable them to replace the Board (or the Board
forms the view that one of those events is likely to occur), then the Board may declare an Option to be free
of any conditions of exercise. Options which are so declared may be exercised at any time on or before
they lapse.
10. Options may not be transferred other than in cases where the Options have vested, are within six months
of the expiry date of the Options, and the Options are transferred to an Associate of the Optionholder.
Quotation of Options on the ASX will not be sought. However, the Company will apply to the ASX for official
quotation of Shares issued on the exercise of Options.
11. There are no participating rights or entitlements inherent in the options and holders will not be entitled to
participate in new issues of capital offered to Shareholders during the currency of the options. However,
the Company will ensure that the record date for determining entitlements to any such issue will be at least
six ASX Business Days after the issue is announced.
12.
If the Company makes an issue of Shares to Shareholders by way of capitalisation of profits or reserves
(“Bonus Issue”), each Optionholder holding any Options which have not expired at the time of the Record
Date for determining entitlements to the Bonus Issue shall be entitled to have issued to him upon exercise
of any of those Options the number of Shares which would have been issued under the Bonus Issue (“Bonus
Shares”) to a person registered as holding the same number of Shares as that number of Shares to which
the Optionholder may subscribe pursuant to the exercise of those Options immediately before the Record
Date determining entitlements under the Bonus Issue (in addition to the Shares which he or she is otherwise
entitled to have issued to him or her upon such exercise).
13.
In the event of any reconstruction (including a consolidation, subdivision, reduction or return) of the issued
capital of the Company prior to the expiry of any Options, the number of Options to which each Option
holder is entitled, or the exercise price of his or her Options, or both, or any other terms will be
reconstructed in a manner determined by the Board which complies with the provisions of the ASX Listing
Rules.
17
Big River Gold Limited
Annual Report
31 December 2020
Remuneration Report - audited (continued)
As at end of the financial year, the following share-based payments were in existence and had been issued as
compensation (pre-consolidation):
KMP
Andrew Richards
John Evans
Beau Nicholls
John Cathcart
Luis Pablo Carlin Diaz
Performance
Rights
70,000,0001
2,352,9511
2,352,9511
2,352,9511
30,000,000
Options Issued
-
-
-
-
-
(1) These were approved by shareholders at the annual general meeting held on 24 July 2020
Key terms of employment contracts
Andrew Richards is engaged as an Executive Chairman (from 1 January 2020).
Remuneration is as follows:
•
•
•
•
•
gross base salary of $150,000 per annum inclusive of statutory superannuation
5,000,000 fully paid ordinary shares issued for no cash subscription
85,000,000 performance rights issued for nil consideration (which vest subject to certain operational and
market performance conditions being met) of which 15,000,000 vested during the year
20 days’ annual leave per annum
3 months’ notice period
Andrew Beigel is employed as the Chief Financial Officer and Company Secretary.
Remuneration is as follows:
•
•
•
gross base salary of $170,000 per annum plus statutory superannuation
20 days’ annual leave per annum and statutory long service leave entitlements
3 months’ notice period
Julio Nery (resigned 20 January 2020) was engaged as Country Manager.
Remuneration was as follows:
•
•
•
gross salary BRL160,508 for the period to 20 January 2020
20 days’ annual leave per annum
3 months’ notice period
Diana Uchoa Torres Lima (appointed 1 January 2020) is engaged as Country Manager.
Remuneration is as follows:
•
•
•
gross salary BRL396,000 per annum
20 days’ annum leave per annum
3 months’ notice period
Luis Pablo Carlin (Pablo) Diaz (appointed 1 March 2020) is engaged as Vice President, Operations.
Remuneration is as follows:
•
•
•
gross salary BRL750,000 per annum increasing to BRL850,000 upon securement of Project Finance
32,500,000 performance rights issued for nil consideration which vest subject to certain operational and
performance conditions being met
2 month notice period
Beau Nicholls (appointed 8 March 2021) is engaged as Technical Director (part-time).
Remuneration is as follows:
•
•
•
•
gross base salary of $100,000 per annum plus statutory superannuation
daily rate for approved technical duties exceeding 6 days per month is $1,400 per day
20 days’ annual leave per annum (pro rata)
2 months’ notice period
18
-
-
-
-
-
-
-
Big River Gold Limited
Annual Report
31 December 2020
Remuneration Report - audited (continued)
Remuneration of Directors and Key Management Personnel for the year ended 31 December 2020 and
comparatives are shown over the next two pages:
Remuneration of Directors and Key Management Personnel for the year ended 31 December 2020:
Short-term employee
benefits
Post emp.
benefits
Salary &
Fees
$
Other
benefits
$
Super-
annuation
$
Share-based payments
Ordinary
Shares
Performance
Rights
$
$
Long-term
benefits
Long
Service
Leave
Proportion of
total
performance
related
%
Total
$
Directors
A. Richards1
12 months to 31 Dec 2020
J. Evans
12 months to 31 Dec 2020
J. Cathcart2
12 months to 31 Dec 2020
B. Nicholls3
12 months to 31 Dec 2020
136,986
45,000
35,000
35,000
Total Directors
12 months to 31 Dec 2020
251,986
13,014
740,000
84,825
2,850
-
3,325
-
-
-
74,959
74,959
74,959
19,189
740,000
309,702
-
-
-
-
-
974,825
85%
122,809
61%
109,959
68%
113,284
66%
1,320,877
79%
Key Management Personnel
A. Beigel7.
12 months to 31 Dec 2020
D. Uchoa Lima4
12 months to 31 Dec 2020
P. Diaz5
1 March to 31 Dec 2020
176,919
88,324
175,565
10,919
J. Nery6
1 January to 20 January 2020
45,697
-
16,150
-
-
-
-
-
63,301
-
-
-
-
2,833
195,902
88,324
0%
0%
249,785
25%
45,697
0%
-
-
-
-
-
Total Key Management
Personnel
12 months to 31 Dec 2020
Total Directors and Key
Management Personnel
12 months to 31 Dec 2020
486,505
10,919
16,150
63,301
2,833
579,708
11%
738,491
10,919
35,339
740,000
373,003
2,833
1,900,585
59%
(1) Mr. A Richards was appointed Chairman on 1 January 2020. Share-based payment includes 5,000,000 remuneration
shares and 15,000,000 performance rights exercised during the year ended 31 December 2020. These shares and
performance rights were measured at the grant date fair value and were subject to shareholder approval which was
received on 24 July 2020.
(2) Mr J. Cathcart was appointed 1 January 2020.
(3) Mr B. Nicholls was appointed 1 January 2020.
(4) Ms D. Uchoa Lima was appointed 1 January 2020.
(5) Mr P. Diaz was appointed 1 March 2020.
(6) Mr J. Nery resigned 20 January 2020.
(7)
Salary includes movements in annual leave provision during the year.
19
Big River Gold Limited
Annual Report
31 December 2020
Remuneration Report – audited (continued)
Remuneration of Directors and Key Management Personnel for the year ended 31 December 2019:
Short-term employee benefits
Cash
Other
Salary &
bonus
benefits
Fees
$
$
$
Post emp.
benefits
Super-
annuation
$
Share-based
payments
Options
$
Total
$
Proportion of
total
performance
related
%
Directors
S. Copulos¹
28 February to 31 Dec 2019
A. Vickerman2
1 January to 28 Feb 2019
A. Richards3
28 February to 31 Dec 2019
P. Stephen4
1 January to 30 January 2019
J. Evans
12 months to 31 Dec 2019
M. Engelbrecht5
1 January to 28 Feb 2019
41,667
20,000
41,667
29,167
61,677
85,040
Total Directors
12 months to 31 Dec 2019
279,207
Key Management Personnel
A. Beigel
12 months to 31 Dec 2019
J. Nery6
12 months to 31 Dec 2019
Total Key Management
Personnel
12 months to 31 Dec 2019
Total Directors and Key
Management Personnel
12 months to 31 Dec 2019
170,000
253,153
423,153
702,361
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,711
2,850
-
-
-
41,667
20,000
50,000
91,677
-
-
-
30,878
64,517
85,040
0%
0%
0%
0%
0%
0%
4,561
50,000
333,768
0%
16,150
-
16,150
-
-
-
186,150
253,153
0%
0%
439,303
0%
20,711
50,000
773,072
0%
(1) Mr S. Copulos was appointed 28 February 2019; resigned 1 January 2020.
(2) Mr A. Vickerman resigned 28 February 2019.
(3) Mr A. Richards was appointed 28 February 2019.
(4) Mr P. Stephen resigned 30 January 2019.
(5) Mr M. Engelbrecht resigned 28 February 2019.
(6) Mr J. Nery resigned 20 January 2020.
20
Big River Gold Limited
Annual Report
31 December 2020
Remuneration Report – audited (continued)
Compensation options granted and vested during the period (consolidated)
No compensation options issued to Directors and Key Management Personnel “KMP” vested during the year ended
31 December 2020 (2019: nil).
Shares issued on Exercise of Compensation Options
During the year, no Directors or Key Management Personnel exercised options that were granted to them as part
of their compensation (2019: nil).
Value of options issued to Key Management Personnel
During the current financial period there were no options granted (2019: nil) to Directors and Key Management
Personnel related to share-based payments compensation. No options granted to Directors or Key Management
Personnel were exercised during the year. No options granted to Directors or Key Management Personnel as part
of remuneration lapsed during the year and no options were forfeited.
Options holdings of Directors and Key Management Personnel (“KMP”) – (pre-consolidation)
Balance at
1 Jan 20
Granted
as
remunera
tion
Options
lapsed
Net Other
Changes
Balance at
31 Dec 20
Not vested
and not
exercisable
at 31 Dec 20
Vested and
exercisable at
31 Dec 20
Options
vested during
the period
-
128,134,473
-
-
-
633,334
-
-
-
128,767,807
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
633,334
-
-
-
633,334
-
-
-
-
-
-
-
-
-
-
-
128,134,473
-
-
-
633,334
-
-
-
128,767,807
-
-
-
-
-
-
-
-
-
-
Directors
A.Richards1
S. Copulos.2
J. Evans
J. Cathcart
B. Nicholls
KMP
A. Beigel
D. Uchoa
P. Diaz
J. Nery
Total
Balance at
1 Jan 19
Granted as
remunerati
on
Options
lapsed
Net Other
Changes
Balance at
31 Dec 19
Not vested
and not
exercisable
at 31 Dec 19
Vested and
exercisable at
31 Dec 19
Options
vested during
the period
Directors
S. Copulos.
A.Vickerman3
P. Stephen4
J. Evans
M. Engelbrecht5
A.Richards
KMP
A. Beigel
J. Nery
Total
18,134,472
832,854
-
-
18,213,654
-
-
-
37,180,980
-
-
-
-
-
-
-
-
-
-
-
-
-
(17,622,977)
-
110,000,001
-
-
-
-
-
128,134,473
832,854
-
-
590,677
-
-
-
633,334
-
633,334
-
-
-
-
-
-
-
-
-
128,134,473
832,854
-
-
590,677
-
100,000,001
-
-
-
-
-
633,334
-
633,334
-
(17,622,977)
110,633,335
130,191,338
-
130,191,338
110,633,335
(1) Mr A. Richards was appointed 28 February 2019.
(2) Mr S. Copulos resigned 1 January 2020.
(3) Mr A. Vickerman resigned 28 February 2019.
(4) Mr P. Stephen resigned 30 January 2019.
(5) Mr M. Engelbrecht resigned 28 February 2019.
(6) Mr A. Richards was appointed 28 February 2019.
21
Big River Gold Limited
Annual Report
31 December 2020
Performance Rights Granted as Remuneration
Following shareholder approval at the general meeting held on 24 July 2020, 124,558,853 performance rights
(pre-consolidation) were issued to KMP (2019:nil).
The performance rights were granted for nil consideration and vest subject to certain operational and market
performance conditions being met. The fair value of the performance rights granted were determined using a Black
Scholes binomial valuation (for non-market based performance conditions) and a Monte Carlo simulation (for
market based performance conditions).
Name
Andrew Richards
Andrew Richards
Pablo Diaz
John Cathcart
John Evans
Beau Nicholls
Number of performance rights granted
during FY20 (pre-consolidation)
Fair value of performance rights
(per right)
65,000,000
20,000,000
32,500,000
2,352,951
2,352,951
2,352,951
$0.037
$0.0162
$0.037
$0.032
$0.032
$0.032
Performance Rights holdings of Directors and Key Management Personnel
The table below outlines the movements in performance rights (pre-consolidation) during the 2020 financial year
and the balance held by each KMP at 31 December 2020.
On vesting, each right automatically converts to one ordinary share. If the employee ceases employment before
the rights vest, the rights will be forfeited, except in limited circumstances that are approved by the Board.
Balance at
1 Jan 20
(unvested)
Granted as
remuneration
Vested and
exercised
Forfeited
Balance at
31 Dec 20
Vested and
exercisable at
31 Dec 20
Unvested at 31
Dec 20
-
85,000,000
(15,000,000)
2,352,951
2,352,951
2,352,951
-
-
-
-
-
-
-
-
-
-
-
-
70,000,000
2,352,951
2,352,951
2,352,951
-
-
-
-
70,000,000
2,352,951
2,352,951
2,352,951
32,500,000
124,558,853
-
(15,000,000)
(2,500,000)
(2,500,000)
30,000,000
107,058,853
-
-
30,000,000
107,058,853
The fair value of performance rights with non-market based vesting conditions were valued using the share price
on grant date (no dividends forecasted). For the performance rights with a market based vesting condition, a
Monte Carlo simulation model was used with the following inputs:
Effective interest rate: 0.4259%
•
• Volatility: 80%
•
•
•
Expiry date: 24 July 2025
Share price at grant date: $0.037
Exercise price: nil.
22
2020
Name & Grant
Dates
A. Richards
24 July 2020
J. Evans
24 July 2020
J. Cathcart
24 July 2020
B. Nicholls
24 July 2020
P. Diaz
24 July 2020
Total
Big River Gold Limited
Annual Report
31 December 2020
The performance rights granted to Mr Richards and Mr Diaz are subject to certain operational and market
performance conditions being met, as follows:
Recipient
A. Richards
P. Diaz
Amount
(pre-consolidation)
Performance Condition
15,000,000 Completion of the Borborema Gold Project Definitive Feasibility Study
30,000,000 Commencement of mining and production at Borborema Gold Project on or
before 30 June 2022
10,000,000 Achieving the KPI of AISC < US$839 for first year of production on or before 30
June 2023
10,000,000 Achieving the KPI of Stage 2 Expansion Assessment on or before 30 June 2025
20,000,000 Achieving an average $500m market capitalisation for a period of 12 months
(or if change of control valued at >$500m), otherwise at the discretion of the
Board upon change of control
2,500,000 Borborema Gold Project finance received on or before 31 December 20
5,000,000 Commencement of mining and production at Borborema Gold Project on or
before 30 June 2022
2,500,000 Achieving throughput in the first 6 months at or greater than budget tonnes
and grade on or before 31 December 22
2,500,000 Achieving the KPI of AISC < US$839 for first year of production on or before 30
June 2023
2,500,000 Achieving the KPI of AISC < US$800 for first year of production on or before 30
June 2023
5,000,000 Achieving throughput in the first 12 months at or greater than budget tonnes
and grade on or before 30 June 23
2,500,000 Achieving the KPI of Stage 2 Expansion Assessment on or before 30 June 2025
10,000,000 Achieving the KPI of Stage 2 Expansion in accordance with schedule
KMP and Director shareholding (pre-consolidation)
Balance at
1 Jan 20
14,500,000
508,750,553
1,200,000
-
-
2,208,458
-
-
-
526,659,011
Shares issued
on exercise of
performance
rights
15,000,000
-
-
-
-
-
-
-
-
15,000,000
Directors
A. Richards
S. Copulos 1.
J. Evans
J. Cathcart6
B. Nicholls7
KMP
A. Beigel
J. Nery
D. Uchoa8
P. Diaz9
Total
Shares
Purchased
Net Other
Changes
Shares
Sold
Balance at
31 Dec 20
-
-
-
-
-
-
-
-
-
-
5,000,000
-
-
-
-
-
-
-
-
5,000,000
-
(2,853,970)
-
-
-
-
-
-
-
(2,853,970)
34,500,000
505,896,583
1,200,000
-
-
2,208,458
-
-
-
543,805,041
23
Big River Gold Limited
Annual Report
31 December 2020
KMP and Director shareholding (pre-consolidation)
Balance at
1 Jan 19
104,771,102
1,665,709
2,721,354
3,543,780
-
-
308,458
-
113,010,403
Directors
S. Copulos1
A. Vickerman2
M. Engelbrecht3
P. Stephen4
A. Richards5
J. Evans
KMP
A. Beigel
J. Nery
Total
Shares issued
on exercise of
performance
rights
Shares
Purchased
Net Other
Changes
Shares
Sold
Balance at
31 Dec 19
-
-
-
-
-
-
-
-
-
153,879,719
-
-
-
9,500,000
-
250,099,732
-
-
-
5,000,000
1,200,000
1,900,000
-
165,279,719
-
-
256,299,732
-
-
-
-
-
-
-
-
-
508,750,553
1,665,709
2,721,354
3,543,780
14,500,000
1,200,000
2,208,458
-
534,589,854
(1) Mr S. Copulos resigned 1 January 2020.
(2) Mr A. Vickerman resigned 28 February 2019.
(3) Mr M. Engelbrecht resigned 28 February 2019.
(4) Mr P. Stephen resigned 30 January 2019.
(5) Mr A. Richards was appointed 28 February 2019.
(6) Mr J. Cathcart was appointed 1 January 2020.
(7) Mr B. Nicholls was appointed 1 January 2020.
(8) Ms D. Uchoa was appointed 1 January 2020.
(9) Mr P. Diaz was appointed 1 March 2020.
Convertible note holdings of Directors and Key Management Personnel
During the year no convertible notes were issued or converted (2019: $2,400,000 notes converted).
Loans to Directors and Key Management Personnel
There were no loans to any Directors or Key Management Personnel during the year (2019: nil).
Specific transactions with Directors and Key Management Personnel
There were no transactions with any Directors or Key Management Personnel that were more favourable than
those available, or which might reasonably be expected to be available, to non-related parties on an arm’s length
basis.
This ends the audited Remuneration Report.
24
Big River Gold Limited
Annual Report
31 December 2020
Directors’ benefits
No Director of the Company has received, or become entitled to receive, any benefit because of a contract that
the Director, or a firm of which the Director is a member, or an entity in which the Director has substantial financial
interest, made with the Company, or with an entity that the Company controlled, or with a body corporate that
was related to the Company, other than the benefits included in the aggregate amount of emoluments received,
or due and receivable, by the Directors and disclosed in Note 7 to the Financial Statements.
Corporate governance
In recognising the need for high standards of corporate behaviour and accountability, the Directors support and
have substantially adhered to the best practice recommendations set by the ASX Corporate Governance Council.
The Company’s corporate governance policies are all available on
www.bigrivergold.com.au.
the Company’s website at
Committee memberships
The Company maintains an Audit and Risk Committee and a Remuneration Committee which consist of the
following Directors:
Audit and Risk Committee
J. Evans (Chairman)
J. Cathcart
B. Nicholls
Remuneration Committee
J. Evans (Chairman)
J. Cathcart
B. Nicholls
Meetings of Directors
The number of Directors’ meetings held during the financial year and the numbers of meetings attended by each
Director were:
Directors’ meetings
Directors
Eligible
Attended
Remuneration
Committee meetings
Attended
Eligible
Audit and Risk
Committee meetings
Attended
Eligible
A. Richards
J. Evans
J. Cathcart
B. Nicholls
6
6
6
6
6
6
6
6
-
3
3
3
-
3
3
3
-
2
2
2
-
2
2
2
Auditor’s independence
The auditor’s independence declaration for the financial year ended 31 December 2020 has been received and is
to be found on page 64.
Non-audit services
No non-audit services were provided by the entity’s auditor, Deloitte Touche Tomatsu, and no fees were paid or
are payable to Deloitte Touch Tohmatsu for non-audit services for the financial year ended 31 December 2020.
This report is signed in accordance with a resolution of the directors made pursuant to Section 298(2) of the
Corporations Act 2001.
On behalf of the directors
Andrew Richards
Executive Chairman
Perth, 31 March 2021
25
Big River Gold Limited
Annual Report
31 December 2020
Competent Person Statements
Borborema mineral resource estimate
The information in this announcement that relates to the mineral resource estimate for the Borborema Project was
first reported in accordance with ASX Listing Rule 5.8 on 24 July 2017.
Big River confirms that it is not aware of any new information or data that materially affects the information
included in the announcement of 24 July 2017 and that all material assumptions and technical parameters
underpinning the Mineral Resource estimate continue to apply and have not materially changed.
Borborema ore reserve estimate
The information in this announcement that relates to the Ore Reserve estimate for the Borborema Gold Project
was first reported in accordance with ASX Listing Rule 5.9 on 6 March 2018, 29 March 2018 and 11 April 2018. All
material assumptions and technical parameters underpinning the Ore Reserve estimate continue to apply and have
not materially changed.
That portion of the Ore Reserve that was included in the Stage 1 Mining Schedule for the December 2019 Definitive
Feasibility Study (DFS) was reviewed by Porfirio Cabaleiro Rodriguez, BSc. (MEng), MAIG of GE21 as part of the DFS.
The Ore Reserve was first reported in accordance with ASX Listing Rule 5.9 on 24 July 2017 and updated on 6 March
2018 and is based on information compiled by Mr. Linton Kirk, Competent Person who is a Fellow and Chartered
Professional of The Australasian Institute of Mining and Metallurgy. Mr. Kirk is employed by Kirk Mining Consultants
Pty Ltd and is an independent consultant to the company.
Definitive Feasibility Study (DFS)
A DFS for development and construction of Stage 1 of the Borborema Project was completed in December 2019
(refer ASX Announcement of 23 December, 2019) and updated in July 2020 as detailed in the ASX Announcement
of 9 July, 2020. It confirmed the project’s strong economics and optimised a profitable open pit with a mine life of
more than 10 years producing approximately 729,000 ounces gold at a C1 cash cost of US$534/oz and AISC of
US$713/oz.
Assuming a gold price of US$1,550 per ounce, the pre-tax NPV (8%) returned US$342M with an IRR of 64.7%. The
project returns an average EBITDA of US$72M pa.
All material assumptions underpinning the production targets and forecast financial information continue to apply
and have not changed materially.
26
Big River Gold Limited
Annual Report
31 December 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020
Continuing operations
Gross Profit
Note
Consolidated
Dec
2020
$
Dec
2019
Restated*
$
-
-
Other income
Fair value gain on equity investment at FVPL
3
10
1,098,703
-
Administration
Corporate expenses
Finance costs
Depreciation and amortisation
Exploration and evaluation
Unrealised foreign exchange (loss)/gain
Other expenses from ordinary activities
Loss before income tax
Income tax (expense)/benefit
Net loss from continuing operations
3
3
3
3
4
(1,238,826)
(2,142,876)
(11,209)
(36,521)
(47,717)
(397,203)
(148,125)
(2,923,774)
-
(2,923,774)
313,959
2,250,000
(586,361)
(2,136,710)
(396,020)
(38,294)
(21,860)
(48,896)
(952,661)
(1,616,843)
-
(1,616,843)
Discontinued Operations
Net (loss)/profit from discontinued operations
Net (loss)/profit for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
22
-
(2,923,774)
6,346,545
4,729,702
Exchange differences arising on translation of foreign operations
Exchange differences on translation of discontinued operation
Net fair value (loss) on available-for-sale assets taken to equity
(4,293,142)
-
-
(127,207)
(6,767,215)
-
Other comprehensive loss for the year, net of income tax
(4,293,142)
(6,894,422)
Total comprehensive loss for the year attributable to owners of
the parent
(7,216,916)
(2,164,720)
Loss per share from continuing operations (on a post-consolidation
basis)
Basic (cents per share)
Diluted (cents per share)
(Loss)/profit per share from continuing and discontinued
operations (on a post-consolidation basis)
Basic (cents per share)
Diluted (cents per share)
17
17
17
17
(1.76)
(1.76)
(1.45)
(1.45)
(1.76)
(1.76)
4.25
3.26
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the
Notes to the Financial Statements.
*See note 2(c) for details regarding the restatement as a result of an error.
27
Big River Gold Limited
Annual Report
31 December 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current Assets
Non-Current Assets
Exploration and evaluation assets
Property, plant and equipment
Right-of-use asset
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Lease liability - current
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Lease liability – non-current
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Total equity attributable to equity holders of the Company
Issued capital
Reserves
Retained earnings
Note
Consolidated
Dec
2020
$
23(a)
9
9,884,673
57,642
126,081
Dec
2019
(Restated*)
$
4,313,096
150,207
439,698
10,068,396
4,903,001
11
12
17,812,173
109,431
13,600
20,848,286
85,742
24,936
17,935,204
20,958,964
28,003,600
25,861,965
13
13
516,066
6,933
564,476
21,974
522,999
586,450
1,041,882
-
620,355
10,133
1,041,882
630,488
1,564,881
1,216,938
26,438,719
24,645,027
14
15
16
102,313,256
(10,659,142)
(65,215,395)
94,022,742
3,863,428
(73,241,143)
Total Equity
26,438,719
24,645,027
The above Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Financial
Statements.
*See note 2(c) for details regarding the restatement as a result of an error.
28
Big River Gold Limited
Annual Report
31 December 2020
Consolidated
Attributable to equity holders of the parent
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR 31 DECEMBER 2020
Issued Capital
$
94,022,742
Retained
Earnings
$
Foreign
Currency
Translation
Reserve
$
(73,241,143)
(8,474,595)
-
-
-
-
(2,923,774)
(4,293,142)
-
(2,923,774)
(4,293,142)
-
8,416,734
63,026
740,000
(929,246)
-
10,949,522
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Reserves
Share Based
Payments
Reserve
$
12,221,008
-
-
-
(10,949,522)
-
(16,512)
(740,000)
-
363,603
1,113,003
At 1 January 2020 (restated*)
Other comprehensive loss for the year
Loss for the year
Total comprehensive loss for the year
Transfer from other reserves
Shares issued
Share issued upon exercise of options
Performance rights exercised
Share issue costs 1
Recognition of share-based payments – for
services provided by third parties
Recognition of share-based payments – Key
management personnel and directors
At 31 December 2020
102,313,256
(65,215,395)
(12,767,737)
1,991,580
The above Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements.
Share issue cost include cash consideration and share-based payments (Refer note 6).
1
*See note 2(c) for details regarding the restatement as a result of an error.
Investment
Revaluation
Reserve
$
-
-
-
-
-
-
-
-
-
-
-
-
Convertible
Note Reserve
Total Equity
$
117,015
-
-
-
-
-
-
-
-
-
$
24,645,027
(4,293,142)
(2,923,774)
(7,216,916)
-
8,416,734
46,514
-
(929,246)
363,603
1,113,003
117,015
26,438,719
29
Big River Gold Limited
Annual Report
31 December 2020
Consolidated
Attributable to equity holders of the parent
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR 31 DECEMBER 2020 (CONTINUED)
Issued
Capital
$
86,352,263
-
86,352,263
-
-
-
-
5,837,473
(729,992)
2,400,000
-
162,998
Retained
Earnings
(Restated*)
$
(77,959,064)
(11,781)
(77,970,845)
-
-
Foreign
Currency
Translation
Reserve (FCTR)
(Restated*)
$
(1,580,173)
-
(1,580,173)
(127,207)
(6,767,215)
4,729,702
-
4,729,702
(6,894,422)
-
-
-
-
-
-
-
-
-
-
At 1 January 2019
Adjustment on change in accounting policy as a
result of adopting AASB9
At 1 January 2019 (restated)*
Other comprehensive loss for the year
Exchange differences on translation of
discontinued operation
Profit for the year
Total comprehensive loss for the year
Shares issued
Share issue costs
Conversion of Convertible Notes
Issuance of Convertible Note
Share Based Payments
Reserves
Share Based
Payments
Reserve
Investment
Revaluation
Reserve
Convertible
Note Reserve
Total Equity
$
10,970,147
-
10,970,147
-
-
-
-
-
-
-
-
1,250,861
$
-
-
-
-
-
-
-
-
-
-
-
-
-
$
157,728
-
157,728
-
-
-
-
-
-
(153,375)
112,662
-
$
17,940,901
(11,781)
17,929,120
(127,207)
(6,767,215)
4,729,702
(2,164,720)
5,837,473
(729,992)
2,246,625
112,662
1,413,859
117,015
24,645,027
At 31 December 2019
94,022,742
(73,241,143)
(8,474,595)
12,221,008
The above Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements.
*See note 2(c) for details regarding the restatement as a result of an error.
30
Big River Gold Limited
Annual Report
31 December 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020
Cash flows from operating activities
Payments to suppliers and employees
Finance Costs
Receipts from Research and Development Tax Incentives
Interest paid on leases
Receipts from other entities
Note
Consolidated
Dec
2020
$
Dec
2019
$
(1,382,111)
-
122,637
(2,257)
100,842
(3,741,565)
(125,000)
-
(7,641)
-
Net cash (used in) operating activities
23(b)
(1,160,889)
(3,866,565)
Cash flows from investing activities
Interest received
Receipts for disposal of property, plant and equipment
Payment for exploration and evaluation
Payments for property, plant and equipment
Proceeds from sale of equity investments
5,095
939,641
(1,987,940)
(74,583)
-
11,384
1,144,835
(2,491,650)
-
2,750,000
Net cash (used in) investing activities
(1,117,787)
1,414,569
Cash flows from financing activities
Proceeds from issues of equity securities1
Proceeds from exercise of share options
Costs of issuing securities
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Proceeds from issue of convertible notes
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rate fluctuations on cash held in foreign
currencies
14
8,613,627
46,514
(565,643)
-
-
(9,873)
-
5,837,473
-
(431,792)
750,000
(750,000)
(21,178)
1,000,000
8,084,625
6,376,862
5,805,949
4,313,096
3,924,866
432,228
(234,372)
(43,998)
Cash and cash equivalents at the end of the financial year
23(a)
9,884,673
4,313,096
(1) Includes $196,893 restricted cash relating to equity securities issued on 5 January 2021.
The above Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial
Statements.
31
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
1.
GENERAL INFORMATION
Big River Gold Limited (“the Parent Entity” or “Big River” or “the Company”) is a listed public company incorporated in
Australia and operating in Australia and Brazil. The address of the Company’s registered office and principal place of
business is Level 29, 221 St Georges Terrace, Perth, Western Australia. The Consolidated Financial Statements of the
Company as at, and for the financial year ended 31 December 2020 comprise those of the Company and its subsidiaries
(together referred to as the “the Consolidated Entity” or “the Group”). The Group is involved primarily in the mineral
exploration industry.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Statement of compliance
For the purpose of preparing the Consolidated Financial Statements, the Company is a “for profit” entity. The Financial
Report is a General Purpose Financial Report which has been prepared in accordance with Accounting Standards
(including Interpretations) and the Corporations Act 2001 (Cth). Accounting Standards include Australian Accounting
Standards. Compliance with the Australian Accounting Standards ensures the Consolidated Financial Report of the Group
complies with International Financial Reporting Standards (“IFRSs”).
(b)
Basis of preparation
The Financial Report has also been prepared on an accruals basis and historical cost basis. Cost is based on the fair value
of the consideration given in exchange for assets. All amounts are presented in Australian dollars unless otherwise noted.
The Financial Statements were approved by the Board of Directors on 31 March 2021.
Going concern
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the normal course of business.
The Group incurred a loss of $2,923,774 (2019: restated profit of $4,729,702) and experienced net cash outflows from
operating and investing activities of $2,278,676 (2019: outflow of $2,451,996) for the year ended 31 December 2020. As
at this date, the Group had a net current asset position of $9,545,397 (31 December 2019: net current asset position of
$4,316,551). Cash and cash equivalents totalled $9,884,673 as at 31 December 2020 (31 December 2019: $4,313,096).
The Directors have prepared a cash flow forecast for the Group out to 31 March 2022 which indicates the Group
currently holds sufficient working capital to meet the expected cash outflows over this period based on budgeted
operational requirements, which includes development expenditure related to the Borborema Gold Project.
As a result of the above, the Directors have prepared these financial statements on a going concern basis.
32
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
(c)
Correction of foreign currency translation reserve
The Group identified that the cumulative amount of foreign exchange differences in relation to the disposal of Juruena-
Novo Astro Gold (Juruena) projects was not reclassified from equity to profit or loss upon the disposal of Juruena during
the year ended 31 December 2019. The error resulted in a material understatement of the profit/(loss) for the year ended
31 December 2019 and a corresponding overstatement of the foreign currency translation reserve. There are no tax
consequences from the reclassification. The error has been corrected by restating each of the affected financial
statement line items for the prior periods as follows:
Consolidated statement of financial position (extract):
Reserves#
Retained earnings
Total equity
31 December 2019
10,630,643
(80,008,358)
24,645,027
Increase/(Decrease)
(6,767,215)
6,767,215
-
31 December 2019 (Restated)
3,863,428
(73,241,143)
24,645,027
#The adjustment to reserves relates to the Foreign currency translation reserve specifically.
Consolidated statement of profit or loss and other comprehensive income (extract):
Net (loss)/profit from discontinued operations
Net (Loss)/profit for the year
Exchange differences on translation of discontinued operation
Other comprehensive loss for the year, net of income tax
Total comprehensive loss for the year attributable to owners
Profit/(loss) per share from continuing operations (on a post-
consolidation basis)
Basic
Diluted
Profit/(loss) per share from continuing and discontinued operations
(on a post-consolidation basis)
Basic
Diluted
Profit/(loss) per share from continuing operations (on a pre-
consolidation basis)
Basic
Diluted
Profit/(loss) per share from continuing and discontinued operations
(on a pre-consolidation basis)
Basic
Diluted
2019
$
(420,962)
(2,037,513)
-
(127,207)
(2,164,720)
Increase/
(Decrease)
$
6,767,215
6,767,215
(6,767,215)
(6,767,215)
-
2019
(Restated)
$
6,346,545
4,729,702
(6,767,215)
(6,894,422)
(2,164,720)
(1.45)
(1.45)
(1.83)
(1.83)
(0.18)
(0.18)
(0.23)
(0.23)
-
-
6.08
5.10
-
-
0.76
0.64
(1.45)
(1.45)
4.25
3.26
(0.18)
(0.18)
0.53
0.41
Basic and diluted Earnings Per Share information for 31 December 2019 and 2020 has been presented to reflect the
number of shares post the share-consolidation that occurred in February 2021 as required by AASB 133/Australian
Accounting Standards (refer to Note 17). For informational purposes basic and diluted EPS information has been
presented on both a pre-and post- consolidation basis.
The correction further affected some of the amounts disclosed in note 15, note 16 and note 22.
33
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
(d)
Basis of consolidation
The Consolidated Financial Statements incorporate the Financial Statements of the Company and the entities controlled
by the Company (its subsidiaries). Subsidiaries are entities controlled by the Group. Control exists when the Group has
power over the investee, is exposed to, or has right to, variable returns from its involvement with the investee, and has
the ability to use its power to affect its returns. When the Group has less than a majority of the voting rights of an
investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the
relevant activities of the investee unilaterally. The Financial Statements of subsidiaries are included in the Consolidated
Financial Statements from the date that control commences until the date that control ceases.
In preparing the Consolidated Financial Statements, all inter-company balances and transactions, income and expenses,
profit and losses resulting from intra-group transactions have been eliminated in full.
(e)
Foreign currency
The individual Financial Statements of each Group entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purpose of the Consolidated Financial
Statements, the results and financial position of each entity are expressed in Australian dollars, which is the functional
currency of Big River Gold Limited and the presentation currency for the Consolidated Financial Statements. The
functional currencies of Crusader do Brasil Mineração Ltda, Cascar Mineração Ltda and Crusader do Nordeste Mineração
Ltda are Brazilian Real (BRLs).
In preparing the Financial Statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.
At each reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the
reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at
the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms
of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise except for:
•
exchange differences on monetary items receivable from, or payable to, a foreign operation, for which
settlement is neither planned or likely to occur, which form part of the net investment in a foreign operation,
and which are recognised in the Foreign Currency Translation Reserve and recognised in profit or loss on
disposal of the net investment.
On consolidation, the assets and liabilities of the Group’s foreign operations are translated into Australian dollars at
exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates
for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the
dates of the transactions are used. Exchange differences arising, if any, are recognised in Other Comprehensive Income
and accumulated in equity.
(f)
Financial Instruments
The Group classifies its financial assets in the following measurement categories:
Classification
•
•
those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of
the cash flows.
34
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in
equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election
at the time of initial recognition to account for the equity investment at fair value through other comprehensive income
(FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transactions costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows
are solely payment of principal and interest.
Debt Instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the
cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt
instruments:
•
•
•
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other gains/(losses), together with foreign
exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or
loss.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in
the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest
revenue and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset
is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or
loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance
income using the effective interest rate method. Foreign exchange gains and losses are presented in other
gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a
debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within
other gains/(losses) in the period in which it arises.
Equity Instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to
present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains
and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to
be recognised in profit or loss as other income when the Group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or
loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are
not reported separately from other changes in fair value.
Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at
amortised cost and FVOCI. The Group applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
35
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
(g)
Cash and cash equivalents
Cash comprises cash balances and at call deposits. Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a
maturity of three months or less at the date of acquisition.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included
as a component of cash and cash equivalents for the purpose of the Statement of Cash Flows.
(h)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(i)
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the
purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present
value as at the date of acquisition.
Depreciation is calculated on a straight line basis so as to write off the net cost, or other revalued amount, of each asset
over its estimated useful life to its estimated residual value. The estimated useful lives, residual values and depreciation
method, are reviewed at the end of each annual reporting period, with the effect of any changes recognised on a
prospective basis.
The estimated useful lives for plant and equipment range from 1 to 40 years, as below:
Category
Life (years)
Depreciation Rate
Buildings
Computers
Furniture
Plant
Software
Vehicles
(j)
Discontinued operations
Min
25
2
5
5
1
2
Max
40
4
10
15
2
5
Min
2.5%
25.0%
10.0%
6.7%
50.0%
20.0%
Max
4.0%
50.0%
20.0%
20.0%
100.0%
50.0%
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The
results of discontinued operations are presented separately in the statement of profit or loss.
(k)
Impairment of other tangible and intangible assets
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there are any indications that those assets have suffered an impairment loss. If any such indications exist, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where the asset
does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of
the Cash-Generating Unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual Cash-Generating Units. Otherwise they are allocated to the
smallest group of Cash-Generating Units for which a reasonable and consistent allocation basis can be identified.
36
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Intangible assets with indefinite useful lives, and intangible assets not yet available for use, are tested for impairment
annually and whenever there is an indication that the asset may be impaired.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash
flows have not been adjusted. If the recoverable amount of an asset (or Cash-Generating Unit) is estimated to be less
than its carrying amount, the carrying amount of the asset (Cash-Generating Unit) is reduced to its recoverable amount.
An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which
case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the
carrying amount of the asset (Cash-Generating Unit) is increased to the revised estimate of its recoverable amount, but
only to the extent that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (Cash-Generating Unit) in prior years.
A reversal of an impairment loss is recognised immediately in profit and loss unless the relevant asset is carried at fair
value, in which case the reversal of the impairment is treated as a revaluation increase.
(l) Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, and long service,
leave when it is probable that settlement will be required, and they are capable of being measured reliably.
Liabilities recognised in respect of short term employee benefits are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Liabilities in respect of long term employee benefits are measured as the present value of the estimated future cash
outflows to be made by the Group in respect of services provided by employees up to the reporting date.
Contributions to defined contribution superannuation plans are expensed when employees have rendered service
entitling them to the contributions.
(m) Share-based payment transactions
Equity-settled share based payments with employees and others providing services are measured at the fair value of the
equity instrument at the grant date. Fair value is measured by use of an appropriate options pricing model. Further
details of how the fair value of equity settled share transactions has been determined can be found in Note 6.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest. At each
reporting date, the Group revises its estimate of the number of equity instruments expected to vest. The number of
shares expected to vest is estimated based on the non-market vesting conditions. The impact of the revision of the
original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding
adjustment to the share based payments reserve.
Where shares are forfeited due to a failure by the employee to satisfy the service conditions, any expenses previously
recognised in relation to such shares are reversed effective from the date of the forfeiture.
Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and
services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair
value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders
the service.
37
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
(n) Revenue recognition
The Group expect to primarily generate revenue from the sale of gold. Revenue from the sale of these goods is recognised
when control over the inventory has transferred to the customer. Control is generally considered to have passed when:
•
•
•
•
physical possession and inventory risk is transferred (including via a third-party transport provider arranged
by the refinery);
payment terms for the sale of goods can be clearly identified through the sale of metal credits received or
receivable for the transfer of control of the asset;
the Group can determine with sufficient accuracy the metal content of the goods delivered; and
the refiner has no practical ability to reject the product where it is within contractually specified limits.
Where economic inflows arise from other by-products, for example from the presence of other valuable metals, these
amounts are credited to the costs of producing the primary products to the extent the amounts generated are not
considered significant.
(o)
Income tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable
profit, or tax loss, for the period. It is calculated using tax rates and tax laws that have been enacted or substantively
enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent
that it is unpaid (or refundable).
Deferred income tax is provided on all temporary differences that exist at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• where the deferred income tax liability arises from the initial recognition of goodwill, or of 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 loss; and
•
in respect of taxable temporary differences, associated with investments in subsidiaries, associates and
interests in joint ventures and 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.
Deferred income tax assets are recognised for all deductible temporary differences that exist at each reporting date, the
carry forward amount of all unused tax credits and unused tax losses to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences and the carry forward amount of any unused tax
credits and any unused tax losses, can be utilised except:
• where the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of 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 deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, in which case deferred tax assets are only recognised to the extent that it is
probable that the temporary differences will reverse in the foreseeable future, and taxable profit will be
available against which the temporary differences can be utilised.
The carrying amount of deferred income 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 assets to be
utilised.
38
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Unrecognised deferred income tax assets are re-assessed at each reporting date and reduced to the extent that it has
become probable that future taxable profit will allow all, or part of, the deferred tax credit to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
Current and deferred tax assets and liabilities are recognised as items of income or expense in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
(p) Goods and services tax
Revenues, expenses, and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the Australian Tax Office (ATO), in which case the GST is recognised as
part of the cost of acquisition of the asset, or as part of the expense item as applicable.
Receivables and payables are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the
ATO is included as a current asset or liability in the Consolidated Statement of Financial Position. Cash flows are included
in the Consolidated Statement of Cash Flows on a gross basis. The GST components of cash flows arising from investing
and financing activities which are recoverable from, or payable to, the ATO, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the relevant
taxation authority.
(q)
Exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration
and evaluation asset in the year in which they are incurred where the following conditions are satisfied:
(i)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
a. the exploration and evaluation expenditures are expected to be recouped through successful development and
exploitation of the area of interest, or alternatively, by its sale; or
b. the exploration and evaluation activities in the area have not, at the reporting date, reached a stage which
permits a reasonable assessment of the existence, or otherwise, of economically recoverable reserves and active
and significant operations in, or relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation
of assets used in exploration and evaluation activities. General and administrative costs are only included in the
measurement of exploration and evaluation costs where they are related directly to operational activities in a particular
area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the
exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the
relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss
subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount,
but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the
relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to
development.
39
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
(r) Mine development properties
The Group will make a decision to proceed with mine development once the commercial and technical viability has been
confirmed. This will usually be supported by the completion of a full feasibility study. Costs are accumulated for each
identifiable area of interest under development or in production. The accumulated costs are amortised over the life of
the mine on the unit of production basis, once production has commenced.
(s)
Critical accounting judgements and key sources of uncertainty
The following are the critical judgements that the Group has made in the process of applying the Group’s accounting
policies and that have the most significant effects on the amounts recognised in the Financial Statements. These
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period of revision, and future
periods if the revision affects both current and future periods.
Capitalised exploration expenditure
The Group reviews the carrying value of all capitalised exploration expenditure assets for impairment at the end of each
annual reporting period, and where the Group believes an asset has been impaired, the adjustment to fair value is
recorded through profit or loss. The ultimate recoupment of these costs is dependent on the successful
commercialisation of the project, or through sale to a third party, for at least the carrying value of the project.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with Directors, Senior Executives, other staff and
consultants by reference to the fair value of the equity instruments at the date at which they are granted. The fair
value is determined using an appropriate options pricing model, which takes account of factors including the
current value and volatility of the underlying share price, the risk free interest rate, expected dividends on the
underlying share, and the vesting period. The fair value determined at the grant date of the equity-settled share-
based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of
equity instruments that will eventually vest.
40
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Consolidated
3. Revenue and Expenses
Revenue – other income
Miscellaneous income
Profit on disposal of asset
R&D income
Interest revenue
Expenses
Corporate expenses:
Office facility expenses
Staff costs
Director fees
Professional fees
Marketing and media costs
Other corporate expenses
Finance costs:
Interest expense on leases
Other financial expenses
Depreciation and amortisation
Exploration and evaluation:
Other exploration (refer note 11)
Employee expenses:
Salaries and wages
Defined contribution plan
Other employee benefits
Equity-settled share-based payments (refer Note 6)
Annual Leave
Dec
2020
$
100,246
990,367
1,845
6,245
1,098,703
46,800
343,063
1,216,863
238,765
81,714
215,671
2,142,876
2,257
8,952
11,209
36,521
47,717
47,717
551,871
51,906
105,131
1,113,003
50,559
1,872,470
Dec
2019
$
-
182,400
120,791
10,768
313,959
238,388
377,018
300,041
532,410
146,020
542,833
2,136,710
396,020
396,020
38,294
21,860
21,860
893,066
67,559
315,333
(20,625)
65,224
1,320,557
Employee expenses are included in Corporate expenses in the Statement of Profit or Loss.
41
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
4. Income tax
a)
The components of tax expense comprise
Current tax
Deferred tax
b)
The prima facie tax benefit on loss from continuing
operations before income tax is recognised to the
income tax as follows:
Prima facie tax benefit on loss from ordinary
activities at 26% (December 2019 27.5%)
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Entertainment
Fines
Foreign Losses
Cashflow Boost
Research and Development
Movement in unrecognised temporary differences
on comparable income tax rates of 26% (prior year
27.5%)
Tax effect of change in tax rate
Tax effect of current year tax losses for which no
deferred tax asset has been recognised
Income tax expense
c)
The following deferred tax balances have not been
recognised (at relevant tax rates):
Investments
Depreciable Assets
Accrued expenses
Capitalised expenses
Capitalised tenement acquisition costs
Entity establishment costs
Borrowing costs
Provision for expenses
Capital raising costs
Carry forward revenue tax losses
Carry forward capital tax losses
42
-
-
-
-
(2,923,774)
(1,616,843)
(760,181)
(444,632)
409
37
(43,427)
(26,000)
-
(829,162)
691
645
189,689
-
43,145
(210,462)
(262,621)
(227,210)
Consolidated
-
1,091,783
-
Dec
2020
$
13,000
2,461
15,860
666,116
131,415
210,438
-
17,367
427,955
12,510,630
1,416,421
-
437,671
-
Dec
2019
$
13,750
-
23,069
704,710
138,996
347,479
-
19,826
528,429
11,617,161
1,416,421
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Carry forward foreign tax losses
Deferred tax liabilities (at relevant tax rates)
Prepaid expenses
Right of Use Asset/Liability
Accrued interest income
7,904,662
23,316,325
7,657,613
22,467,454
1,802
1,733
-
3,535
4,014
-
-
4,014
Net deferred tax asset not recognised
23,312,790
22,463,440
The current taxation legislation in Brazil enables tax to be paid under one of the following ways:
1.
2.
Income tax is payable at 3% of gross revenue
Income tax is payable at 34% of net profit.
During the year ended 31 December 2020, the group elected to pay tax on 34% of net profit as this is the lowest cost
option.
The deferred tax asset and liability has not been brought to account as it is unlikely that they will be utilised unless
the company generates sufficient revenue to utilise them.
43
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
5.
Financial Risk Management
Overview
The Group has exposure to the following risks from their use of financial instruments:
•
•
•
•
•
Capital risk
Credit risk
Foreign exchange risk
Interest rate risk
Equity risk
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and
processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Senior Executives monitor and mitigate the financial risks relating to the operations of the Group
through regular reviews of the risks.
Categories of financial instruments
Consolidated
Financial assets
Cash and cash equivalents
Loans and receivables
Financial liabilities
Trade and other payables
Lease Liability
Dec
2020
$
9,884,673
57,642
9,942,315
516,066
6,933
522,999
Dec
2019
$
4,313,096
150,207
4,463,303
564,476
21,974
586,450
Capital risk management
The Group manages its capital as a going concern while maximising the return to shareholders through the
optimisation of its capital employed.
The capital structure of the Group consists of cash and cash equivalents, debt funding and equity attributable to
equity holders of the parent, comprising issued capital, reserves and accumulated loss as disclosed in Notes 14, 15
and 16 respectively. None of the Group’s entities is subject to externally imposed capital requirements.
Credit risk management
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.
Investments
The Group limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have
an acceptable credit rating.
44
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Trade and other receivables
Where appropriate, the group has established an allowance for impairment that represents incurred losses in respect
of other receivables and payments. The main components of this allowance are a specific loss component that relates
to individually significant exposures.
The below table shows the distribution of trade receivables at the end of the period before any provision for expected
credit losses. Refer to Note 9 for further information.
Customer
Siderurgica Noroeste Ltda
Siderbras Siderurgica Brasileira Ltda
CNS Empreendimentos Em Transportes e Minerios
Dec
2020
$
76,308
74,882
-
151,190
%
50.5
49.5
-
100
Dec
2019
$
108,317
106,293
35,871
250,482
%
43.2
42.4
14.4
100
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum
exposure to credit risk at the reporting date was:
Cash and cash equivalents
Loans and receivables
Carrying Amount
Dec
2020
$
9,884,673
57,642
Dec
2019
$
4,313,096
150,207
Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash by continuously monitoring forecast and actual cash
flows.
Typically, the Group ensures it has sufficient cash on demand to meet expected operational expenses for a period of
ninety days. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such
as natural disasters.
Market risk management
The Group’s activities expose it primarily to financial risks such as foreign exchange rates, interest rates and equity
prices which will affect the Group’s income and the value of its holdings of financial instruments. The objective of
market risk management is to mitigate and control market risk exposures within acceptable parameters, while
optimizing shareholder return.
45
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Foreign currency risk management
The Group is exposed to foreign currency risk from investments and borrowings held in a currency other than the
Group’s functional currency. The Group’s exposure to foreign currency risk relates to financial instruments held in
Brazilian Reals. At the reporting date the holdings were as follows:
Financial assets
Cash and cash equivalents
Financial liabilities
Trade and other payables
Provisions
Consolidated
Dec
2020
$
109,408
109,408
97,816
994,279
1,092,095
Dec
2019
$
169,132
169,132
171,677
742,412
914,089
Foreign currency sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to foreign exchange risks at the end of
the reporting period:
If the AUD/BRL exchange rate had been 10% higher/lower net profit for the year ended 31 December 2020 would
have increased/decreased by $55,959 (year ended 31 December 2019: increased/decreased by $95,350).
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial instruments:
Dec 2020
Consolidated
Weighted
Average
Interest
Rate
Variable
Interest
Rate
Non-interest
Bearing
Total
Financial Assets
Cash and cash
equivalents
Trade and other
receivables
Financial Liabilities
Trade and other
payables
Lease Liabilities
Net financial
assets/(liabilities)
%
$
$
$
0.17%
9,884,673
-
9,884,673
-
-
-
-
-
-
9,884,673
57,642
57,642
57,642
9,942,315
-
-
-
(516,066)
(6,933)
(522,999)
(516,066)
(6,933)
(522,999)
9,884,673
(465,357)
9,419,316
46
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Dec 2019
Consolidated
Weighted
Average
Interest
Rate
Variable
Interest
Rate
Non-interest
Bearing
Total
Financial Assets
Cash and cash
equivalents
Trade and other
receivables
Financial Liabilities
Trade and other
payables
Net financial
assets/(liabilities)
%
$
$
$
0.40%
4,313,096
-
4,313,096
-
-
-
-
-
4,313,096
150,207
150,207
150,207
4,463,303
-
-
(586,450)
(586,450)
(586,450)
(586,450)
4,313,096
(436,243)
3,876,853
Fair values at amortised costs
The carrying value of the Group’s financial assets and liabilities are equal to their respective net fair values.
Fair values of financial instruments – valuation techniques and assumptions
The fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid
markets are determined with reference to quoted market prices.
The fair value of other financial assets and liabilities (excluding derivative instruments) are determined in accordance
with generally accepted pricing models based on discounted cash flow analysis using prices from observable current
market transactions.
47
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
6. Share-based payments
The expense recognised in profit or loss in relation to share-based payments is disclosed in Note 3.
The following share-based payments were made during the period:
Tranche 1 – Capital raising costs 1
Directors’ remuneration
Key management personnel
Total
363,603
1,049,702
63,301
1,476,606
1 The Group granted the options in relation to the 7 December 2020 placement (tranche 1) and the 5 February 2021
placement (tranche 2) on 5 February 2021, after shareholder approval was obtained on 28 January 2021. The fair value
of unlisted options is estimated as at the date of grant using a Binomial option valuation model taking into account the
terms and conditions upon which the options were granted. The Group’s valuation of the options is based on the
following key inputs: Exercise price - $0.06, Volatility – 101%, Risk-free interest rate – 0.295%, Expected spot price -
$0.058.
The Group has assessed that it is not able to reliably measure the fair value of the goods and services received from the
counterparty of the share-based payment transaction and thus has measured the fair value of the securities issued by
reference to the fair value of the equity instruments granted.
Options over Unissued Shares
The following table illustrates the number and Weighted Average Exercise Prices (WAEPs) of, and movements in, share
options issued during the period (pre-consolidation):
Dec
2020
No.
Outstanding at the beginning of the period
Granted during the period
Lapsed during the period
Reversal of lapsed options
Exercised during the period
Outstanding at the end of the period
254,459,656
-
(75,377,144)
-
(2,325,688)
176,756,824
Dec
2020
WAEP
0.03
-
0.06
-
0.02
0.02
Dec
2019
No.
104,500,121
179,082,512
(29,122,977)
-
-
254,459,656
Exercisable at the end of the period
176,756,824
0.02
254,459,656
Dec
2019
WAEP
0.30
0.02
0.26
-
-
0.03
0.03
The following share options were in existence during or at the end of the current financial period:
Options series
Grant date
Vesting date
Expiry date
Exercise
price
$
Grant date
fair value
$
Live at end of period
Issued 4 July 2019
4-Jul-19
4-Jul-19
30-Jun-22
0.0200
0.0071
The weighted average remaining contractual life for the share options outstanding at 31 December 2020 is 1.5 years
(December 2019: 1.88 years).
The range of exercise prices for options outstanding at the end of the period was $0.02 - $0.02 (December 2019: $0.02 -
$0.06).
The weighted average fair value of options granted during the period was nil (December 2019: $0.0071).
48
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
The fair value of the equity-settled share options granted under the option plan is estimated as at the date of grant using
an appropriate options pricing model, taking into account the terms and conditions upon which the options were granted.
The following table lists the inputs to the model used in relation to the options on issue as at 31 December 2019.
Granted
2019
$0.02
Options
-
77%
0.94%
3.0
0.02
0.0216
Dividend yield
Expected volatility
Risk-free interest rate
Expected life
Exercise price
Share price at grant date
%
%
%
Years
$
$
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that will
occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which
may also not necessarily be the actual outcome. No other features of options granted were incorporated into the
measurements of fair value.
There were 2,325,688 (pre-consolidation) share options exercised during the year (2019: nil).
Employee share option plan
The Company received approval for the introduction of an employee share option scheme (the Plan) in 2008. The
plan was last re-approved at a meeting of shareholders on 24 July 2020, the details of which are set out below. In
the event of any inconsistency between the terms of the Plan and the summary set out below, the terms of the Plan
will prevail.
1.
The options can only be issued to Employees or Officers of the Company and its subsidiaries.
2.
3.
4.
5.
6.
7.
8.
9.
Each Option entitles the holder, on exercise, to one fully paid ordinary share in the Company.
Shares issued on exercise of Options will rank equally with other fully paid ordinary shares of the Company.
The exercise price and expiry date for the options will be as determined by the Board (in its discretion) on or
before the date of issue.
The maximum number of options that can be issued under the Plan is not to be in excess of 5% of the total number
of Shares on issue.
An option may only be exercised after that option has vested, after any conditions associated with the exercise of
the option are satisfied and before its expiry date. The Board may determine the vesting period (if any). On the
grant of an option the Board may, in its absolute discretion, impose other conditions on the exercise of an option.
An Option will lapse upon the first to occur of its expiry date; the holder acting fraudulently or dishonestly in
relation to the Company or on certain conditions associated with a party acquiring a 90% interest in the Shares of
the Company.
Upon an Optionholder ceasing to be a Director, employee or officer of the Company, whether by termination or
otherwise, the Optionholder has 45 days from the day of termination, or otherwise, to exercise their Options
before their Options lapse.
If the Company enters into a scheme of arrangement, a takeover bid is made for the Company’s Shares, or a party
acquires a sufficient interest in the Company to enable them to replace the Board (or the Board forms the view
that one of those events is likely to occur), then the Board may declare an option to be free of any conditions of
exercise. Options which are so declared may be exercised at any time on or before they lapse.
49
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
10.
11.
12.
Options may not be transferred other than in cases where the Options have vested, are within six (6) months of
the expiry date of the Options, and the Options are transferred to an Associate of the Optionholder. Quotation
of options on the ASX will not be sought. However, the Company will apply to the ASX for official quotation of
Shares issued on the exercise of options.
There are no participating rights or entitlements inherent in the options and holders will not be entitled to
participate in new issues of capital offered to Shareholders during the currency of the options. However, the
Company will ensure that the record date for determining entitlements to any such issue will be at least 6 ASX
Business Days after the issue is announced.
If the Company makes an issue of Shares to Shareholders by way of capitalisation of profits or reserves (“Bonus
Issue”), each Optionholder holding any Options which have not expired at the time of the record date for
determining entitlements to the Bonus Issue shall be entitled to have issued to him upon exercise of any of those
Options the number of Shares which would have been issued under the Bonus Issue (“Bonus Shares”) to a person
registered as holding the same number of Shares as that number of Shares to which the Optionholder may
subscribe pursuant to the exercise of those Options immediately before the record date determining entitlements
under the Bonus Issue (in addition to the shares which he or she is otherwise entitled to have issued to him or her
upon such exercise).
13.
In the event of any reconstruction (including a consolidation, subdivision, reduction or return) of the issued capital
of the Company prior to the expiry of any options, the number of options to which each option holder is entitled,
or the exercise price of his or her options, or both, or any other terms will be reconstructed in a manner
determined by the Board which complies with the provisions of the ASX Listing Rules.
Performance Rights
On 24 July 2020, following approval by shareholders at the annual general meeting, the Company issued 85,000,000
performance rights to Mr Andrew Richards with performance conditions, and 5,000,000 remuneration shares. A further
32,500,000 performance rights with performance conditions were issued to Mr Pablo Diaz. The performance conditions
that the Board has determined will apply to the Performance Rights are outlined in the below table:
Amount
(Pre-consolidation)
Performance Condition
A. Richards
15,000,000 Completion of the Borborema Gold Project Definitive Feasibility Study
30,000,000 Commencement of mining and production at Borborema Gold Project on or
before 30 June 2022
10,000,000 Achieving the KPI of AISC < US$839 for first year of production on or before 30
P. Diaz
June 2023
10,000,000 Achieving the KPI of Stage 2 Expansion Assessment on or before 30 June 2025
20,000,000 Achieving an average $500m market capitalisation for a period of 12 months
(or if change of control valued at >$500m), otherwise at the discretion of the
Board upon change of control
2,500,000 Borborema Gold Project finance received on or before 31 December 2020
5,000,000 Commencement of mining and production at Borborema Gold Project on or
before 30 June 2022
2,500,000 Achieving throughput in the first 6 months at or greater than budget tonnes
and grade on or before 31 December 22
2,500,000 Achieving the KPI of AISC < US$839 for first year of production on or before 30
June 2023
2,500,000 Achieving the KPI of AISC < US$800 for first year of production on or before 30
June 2023
5,000,000 Achieving throughput in the first 12 months at or greater than budget tonnes
and grade on or before 30 June 23
2,500,000 Achieving the KPI of Stage 2 Expansion Assessment on or before 30 June 2025
10,000,000 Achieving the KPI of Stage 2 Expansion in accordance with schedule
50
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
The fair value of performance rights with non-market based vesting conditions were valued using the
share price on grant date (no dividends forecasted). For the performance rights with a market based
vesting condition, a Monte Carlo simulation model was used with the following inputs:
Effective interest rate: 0.4259%
•
• Volatility: 80%
•
•
•
Expiry date: 24 July 2025
Share price at grant date: $0.037
Exercise price: nil.
7.
Key management personnel
Details of Key Management Personnel during the financial year:
Mr A. Richards
Mr S. Copulos
Mr J. Evans
Mr B. Nicholls
Mr J. Cathcart
Mr A. Beigel
Mr J. Nery
Ms D. Uchoa Lima
Mr P. Diaz
Chairman (Executive) – appointed 1 January 2020
Chairman (Non-Executive) – appointed 28 February 2019, resigned 1 January 2020
Director (Non-Executive)
Director (Non-Executive) – appointed 1 January 2020;
Director (Technical) – appointed 8 March 2021
Director (Non-Executive) – appointed 1 January 2020
Chief Financial Officer and Company Secretary
Country Manager – resigned 20 January 2020
Country Manager – appointed 1 January 2020
Vice President, Operations – appointed 2 March 2020
The aggregate compensation provided to Directors and Key Management Personnel of the company and the
group is set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Consolidated
Dec
2020
$
749,410
35,339
2,833
1,113,003
1,900,585
Dec
2019
$
702,361
20,711
-
50,000
773,072
Further details relating to the compensation of Directors and Key Management Personnel are included
within the Directors’ Report.
51
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
8.
Auditors’ Remuneration
Consolidated
Audit of the Parent Entity
Audit or review of financial report
Auditors of overseas entities
Audit or review of financial report
The auditor of the Group is Deloitte Touche Tohmatsu.
9. Trade and Other Receivables
Current
Trade receivables
Less provision for doubtful debts
Other receivables
Dec
2020
$
85,000
23,819
108,819
Dec
2020
$
151,190
(151,190)
57,642
57,642
Consolidated
Dec
2019
$
87,975
29,780
117,755
Dec
2019
$
250,482
(250,482)
150,207
150,207
Other receivables are non-interest bearing and consists of GST receivable from the Australian Taxation Office.
All receivables are collected within commercial terms. Trade receivables disclosed above include amounts that are past
due at the end of the reporting period for which the Group has recognised an allowance for doubtful debts on the basis
the amounts may not be recoverable.
An analysis of trade receivables by customer is disclosed in Note 5.
10. Financial assets at fair value through profit or loss
The Group classifies the following financial assets at fair value through profit or loss (FVPL):
• Debt investments that do not qualify for measurement at either amortised cost or FVOCI
•
•
Equity investments that are held for trading, and
Equity investments for which the entity has not elected to recognise fair value gains and losses through OCI.
Amounts recognised in profit or loss
During the year, the following gains (losses) were recognised in profit or loss:
Fair value gains on equity investments at FVPL
Consolidated
Dec 2020
$
-
-
Dec 2019
$
2,250,000
2,250,000
52
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Consolidated
11. Exploration and evaluation assets
Costs brought forward
Expenditure incurred during the period
Amounts expensed
Effect of exchange rates
Costs carried forward
Dec 2020
$
20,848,286
1,191,242
(47,717)
(4,179,638)
17,812,173
Dec 2019
$
19,325,779
2,120,095
(21,860)
(575,728)
20,848,286
The Group has exploration and evaluation assets relating to the Borborema project which includes three mining leases
covering a total area of 29km2 including freehold title over the main prospect area, held in the Seridó area of the
Borborema province in north-eastern Brazil. Recoverability of the carrying amount of exploration and evaluation assets
is dependent on the successful development and commercial exploitation, or alternatively the sale, of the respective
areas of interest.
Expenditure incurred in the acquisition of rights to explore is capitalised and recognised as an exploration and evaluation
asset.
Exploration costs are capitalised to the extent that they are expected to be recouped through the successful development
of a relevant area of interest or where activities in the area have not yet reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves.
Each area of interest was assessed for impairment triggers in accordance with the requirements of AASB 6 Exploration
for and Evaluation of Mineral Resources as at 31 December 2020, with no impairment triggers identified.
12. Property, plant and equipment
Balance at the beginning of the period
Cost
Accumulated depreciation
Carrying amount at beginning of period
Additions
Disposals
Depreciation
Effect of foreign exchange
Carrying amount at the end of the period
Consolidated
Dec
2020
$
2,053,795
(1,968,053)
85,742
74,583
(7,522)
(22,841)
(20,531)
109,431
Dec
2019
$
2,060,063
(1,946,350)
113,713
2,399
(6,510)
(21,703)
(2,157)
85,742
53
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Consolidated
13. Trade and other payables
Current
Trade payables and accruals
Annual leave and other benefits
Payroll and associated taxes
Other payables
Non-current
Other payables
Payroll taxes
Total Current and non-current Trade and other payables
Dec
2020
$
162,972
87,998
55,708
209,388
516,066
616,676
425,206
1,041,882
1,782,825
Dec
2019
$
285,078
104,275
94,297
80,826
564,476
620,355
-
620,355
1,184,831
Trade payables are non-interest bearing and are normally settled on 30 day terms.
14.
Issued capital
Ordinary shares issued and fully paid (pre-
consolidation)
No.
$
At 31 December 2019
At 31 December 2020
1,317,197,554
1,507,857,927
100,922,544
102,296,743
Fully paid ordinary shares carry one vote per share and the right to receive dividends.
The below table is pre-consolidation of share capital.
Fully paid ordinary share capital
Dec 2020
Dec 2019
No.
$
No.
$
Balance at the start of the financial
period
Shares issued for cash
Conversion of Convertible Notes
Share based payments
Shares issued on exercise of options
Capital raising costs
Balance at end of financial period
1,317,197,554
168,334,685
-
20,000,000
2,325,688
-
1,507,857,927
94,022,742
8,416,734
-
740,000
63,026
(929,246)
102,313,256
502,150,521
558,747,301
240,000,000
16,299,732
-
-
1,317,197,554
86,352,263
5,837,473
2,400,000
162,998
-
(729,992)
94,022,742
54
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
15. Reserves
Nature and purpose of reserves
The share-based payments reserve is used to recognise:
•
•
•
the grant date fair value of options issued to employees but not exercised;
the grant date fair value of shares issued to employees; and
the grant date fair value of performance rights granted to employees but not yet vested. The Foreign Currency
Translation Reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
The convertible note reserve represents the equity component (conversion rights) on the issue of unsecured convertible
notes.
Consolidated
Reserves
Share-based payment reserve
Foreign currency translation reserve
Other reserve
Foreign currency translation reserve
Balance at the beginning of the financial period
Currency translation differences arising during the period
Exchange differences on translation of discontinued operation
Balance at the end of the financial period
Share based payments reserve
Balance at the beginning of the financial period
Transfer to retained earnings
Transfer to issued capital on exercise of options
Transfer to issued capital on exercise of performance rights
Option and performance shares expense
Balance at the end of the financial period
Convertible Note Reserve
Balance at the beginning of the financial period
Conversion of convertible note
Issuance of convertible note
Balance at the end of the financial period
Dec
2020
$
1,991,580
(12,767,737)
117,015
(10,659,142)
(8,474,595)
(4,293,142)
-
(12,767,737)
12,221,008
(10,949,522)
(16,512)
(740,000)
1,476,606
1,991,580
117,015
-
-
117,015
Dec
2019
Restated
$
12,221,008
(8,474,595)
117,015
3,863,428
(1,580,173)
(127,207)
(6,767,215)
(8,474,595)
10,970,147
-
-
-
1,250,861
12,221,008
157,728
(153,375)
112,662
117,015
55
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
Consolidated
16. Retained earnings
Movements in accumulated losses were as follows:
Balance at the beginning of the financial year
Adjustment on change in accounting policy
Transfer from other reserves
Net (loss)/profit for the year
Balance at the end of the financial year
17.
Earnings per share
Basic and diluted profit/(loss) per share amounts are calculated by dividing
net loss for the period attributable to equity holders of the parent, by the
weighted average number of ordinary shares outstanding during the
period.
The following reflects the income and share data used in the basic and
diluted loss per share computations:
Net loss from continuing operations attributable to ordinary equity
holders of the parent
Net (loss)/profit from continuing and discontinued operations to ordinary
equity holders of the parent
The weighted average number of ordinary shares on issue during the
financial period used in the calculation of basic loss per share (on a post-
consolidation basis)
The weighted average number of ordinary shares on issue during the
financial period used in the calculation of diluted loss/(profit) per share
(on a post-consolidation basis)
Dec
2020
$
(73,241,143)
-
10,949,522
(2,923,774)
(65,215,395)
Dec
2019
Restated
$
(77,959,064)
(11,781)
-
4,729,702
(73,241,143)
$
$
(2,923,774)
(1,616,843)
(2,923,774)
4,729,702
No.
No.
166,562,420
111,222,721
166,562,420
144,905,178
56
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
18.
Commitments
In order to maintain current rights of tenure to the exploration tenements, the Group is required to meet the minimum
expenditure commitments as specified by the relevant Government authorities. These obligations are subject to
renegotiations when application for a mining lease is made and at other times. The obligations will be met from normal
working capital of the Group. The minimum exploration tenement commitments will be reduced should the Group enter
into a joint venture on the tenements or extinguished should the tenement be abandoned should the Group decide that
the project is not commercial.
The Group has certain minimum obligations in pursuance of the terms and conditions of mineral tenement licences in
the forthcoming year. Whilst these obligations are capable of being varied from time to time, in order to maintain current
rights of tenure to all mining tenements, and assuming all applications are granted, the Group will be required to outlay
in 2021 approximately $37,563 (2020: $89,433). These costs are expected to be fulfilled in the normal course of
operations.
19.
Related party transactions
(a) Equity interests in related parties
Details of the percentage of ordinary shares held in each of the subsidiaries are disclosed in Note 20.
(b) Transactions with Directors and Key Management Personnel
Details of Director and Key Management Personnel compensation are disclosed in Note 7.
(c) There were no transactions with other related parties.
20.
Controlled entities
Parent entity
Big River Gold Ltd
Controlled entities
Brazil Minerals Pty Ltd
Atomico Pty Ltd
Cascar Resources Pty Ltd
Crusader do Brasil Mineração Ltda
Cascar do Brasil Mineração Ltda
Crusader do Nordeste Mineração Ltda
Country of
Incorporation
Principal Activity
Ownership Interest
Dec
2020
Dec
2019
Australia
Mining Investment
Australia
Australia
Australia
Brazil
Brazil
Brazil
Mining Investment
Mining Investment
Mining Investment
Mining and Mineral exploration
Mineral exploration
Mineral exploration
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
57
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
21.
Segment reporting
For management purposes, the Group is organised into one operating segment, being Gold – exploration and
development.
Geographical Information
The Group operates in two geographical areas being Australia (country of domicile) and Brazil.
Dec-2020
Current assets
Non-current assets
Total Assets
Current liabilities
Non-current liabilities
Total Liabilities
Brazil
$
186,019
13,531,040
13,717,059
125,886
1,041,882
1,167,768
Australia
$
9,882,377
4,404,164
14,286,541
397,113
-
397,113
Total
$
10,068,396
17,935,204
28,003,600
522,999
1,041,882
1,564,881
Net Assets / (Net Liabilities)
12,549,291
13,889,428
26,438,719
Dec-2019
Current assets
Non-current assets
Total Assets
Current liabilities
Non-current liabilities
Total Liabilities
Brazil
$
34,382
20,910,681
20,945,063
110,902
-
110,902
Australia
$
4,868,619
48,283
4,916,902
475,548
630,488
1,106,036
Total
$
4,903,001
20,958,964
25,861,965
586,450
630,488
1,216,938
Net Assets / (Net Liabilities)
20,834,161
3,810,866
24,645,027
The table below shows the carrying balances of non-current assets per segment as at 31 December 2020.
Dec-2020
Exploration and expenditure
Right of use asset
Property, plant and equipment
Total non-current assets
Brazil
$
13,440,719
-
90,321
13,531,040
Australia
$
4,371,454
13,600
19,110
4,404,164
Total
$
17,812,173
13,600
109,431
17,935,204
The table below shows the carrying balances of non-current assets per segment as at 31 December 2019.
Dec-2019
Brazil
$
Australia
$
Total
$
Exploration and expenditure
Right of use asset
Property, plant and equipment
Total non-current assets
20,848,286
-
62,395
20,910,681
58
-
24,936
23,347
48,283
20,848,286
24,936
85,742
20,958,964
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
22.
Discontinued operations
On 31 May 2019 the Company completed the sale agreement to sell its Juruena-Novo Astro Gold projects to
Meteoric Resources NL (MEI). The consideration received consisted of the following:
Upfront consideration
(1) $1,000,000 cash at settlement.
(2) $500,000 of MEI shares, comprised of 50,000,000 shares at a deemed issue price of 1c each at settlement
(subject to voluntary escrow for a period of 12 months from the date of issue).
(3) The 50,000,000 MEI shares were released from escrow and sold on 18 September 2019 for $2,750,000
(5.5c per share).
Contingent consideration
(4) $750,000 of MEI shares at an issue price equal to a 5-day VWAP upon defining a mineral resource estimate
in accordance with the JORC Code, at Juruena and/or Novo Astro containing at least 400,000 oz gold.
(5) $750,000 of MEI shares at an issue price equal to a 5-day VWAP upon the Board of Meteoric approving a
decision to mine at Juruena and/or Novo Astro, pursuant to a granted mining licence.
The Juruena Gold Project was reported as a discontinued operation, due to the sale.
59
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
The restated financial information relating to the discontinued operation for the period to the date of disposal is
set out below:
Other income
Depreciation and amortisation
Other expenses from ordinary activities
Loss before income tax expense and reclassification of foreign currency
translation reserve
Reclassification of foreign currency translation reserve - Juruena*
Income tax expense
Profit (Loss) after income tax and reclassification of foreign currency
reserve
Profit on sale of Juruena, after income tax
Profit (Loss) from discontinued operations¹
Net cash used in operating activities
Net cash from (used for) investing activities
Net cash from (used for) financing activities
Net cash (outflow)/inflow from the disposal group
Details of the sale of Juruena
Consideration received or receivable:
Cash
Financial assets
Receivables
Total disposal consideration
Carrying amount of net assets sold
Profit on sale before income tax
Income tax expense
Profit on sale after income tax
The carrying amount of assets and liabilities as at the date of sale (31
May 2019) were:
Exploration and evaluation assets
Property, plant and equipment
Other current assets
Total assets
Payables
Employee provisions
Total liabilities
Net assets
31 Dec
2020
$
31 May
2019
Restated *
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,641)
(434,638)
(439,279)
6,767,215
-
6,327,936
18,609
6,346,545
(253,856)
-
-
(253,856)
964,000
500,000
36,486
1,500,486
(1,481,877)
18,609
-
18,609
1,516,315
28,242
59,950
1,604,507
(68,548)
(54,082)
(122,630)
1,481,877
(1) The profit from discontinued operations of $6,346,545 is attributable entirely to the owners of the Company.
* See note 2(c) for details regarding the restatement as a result of an error.
60
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
23.
Notes to the statement of cash flows
(a) Reconciliation of cash and cash equivalents
For the purposes of the Consolidated Statement of Cash Flows,
cash and cash equivalents comprise the following:
Cash at bank
(b) Reconciliation of net loss after tax to net cash flows from
operating activities
Net loss
Adjustments for:
Depreciation and amortisation
Interest expense on leases
Finance costs
Share-based payments
Disposal of assets
Recycle of FCTR associated with sale of Juruena
Unrealised exchange (gains)/losses
Changes in net assets and liabilities:
(Increase)/decrease in assets:
Trade and other receivables
Other current assets
Increase/(decrease) in liabilities:
Trade and other payables
Provisions
Cash generated/(used) in operating activities
Consolidated
Dec
2020
$
Dec
2019
$
9,884,673
4,313,096
(2,923,774)
4,729,702
36,521
2,257
-
1,476,606
6,083
-
(512,707)
92,565
313,617
(63,451)
411,394
(1,160,889)
38,294
-
78,795
1,003,021
(15,032)
(6,767,215)
(1,400,128)
(61,779)
(199,900)
(793,572)
(478,751)
(3,866,565)
61
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
24.
Parent Entity
The following table presents the information regarding the parent entity for the year ended 31 December 2020 and the
year ended 31 December 2019.
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Retained earnings
Reserves
Option premium reserve
Investment revaluation reserve
Other reserve
Total equity
Financial performance
Profit/(Loss) for the period
Other comprehensive income
Total comprehensive income
Dec
2020
$
9,882,357
16,953,475
26,835,832
397,113
-
397,113
Dec
2019
$
4,345,783
20,602,094
24,947,877
292,715
10,133
302,848
102,313,258
(77,983,134)
94,119,344
(81,400,448)
1,991,580
-
117,015
26,438,719
(7,216,918)
-
(7,216,918)
11,809,118
-
117,016
24,645,029
(1,849,430)
-
(1,849,430)
Contingent liabilities of the parent entity
Other than as disclosed at Note 27, the Parent entity is not aware of any other contingent liabilities at the date of this
report (2019: nil).
25.
Non-cash transactions
During the year, the Group did not enter into any non-cash financing or investing transactions other than as disclosed
elsewhere in the financial report.
62
Big River Gold Limited
Annual Report
31 December 2020
Notes to the Annual Financial Statements
26.
Subsequent events
On 5 February 2021 the Company issued the following securities, pursuant to shareholder approval at a general
meeting of shareholders held on 28 January 2021:
•
239,665,315 shares at $0.05 each raising $11,983,266 (before costs) as part of a placement to raise $20.4
million as announced on 7 December 2020;
24,480,000 Options exercisable at $0.06 each (expiring 4 February 2024) as part consideration for the
provision of joint lead manager services for the Placement to Joint Lead Managers (Dundee Goodman
Merchant Partners, Jett Capital Advisors LLC and Petra Capital);
2,352,951 shares each to Mr John Evans, Mr John Cathcart and Mr Beau Nicholls as consideration for
services provided to the Company as Non-Executive Directors during the year ended 31 December 2020.
•
•
On 8 February 2021 Dundee Goodman Merchant Partners (Dundee) increased its shareholding in the Company
to 19.4% through an off-market transaction with the Copulos Group reducing their shareholding to 18.7%.
On 25 February 2021 the issued capital of the Company was consolidated on an 8 for 1 basis, as announced on
29 December 2020 and approved at the general meeting of shareholders held on 28 January 2021.
No other matter or circumstance has occurred subsequent to year end that has significantly affected, or may
significantly affect, the operations of the Company, the results of those operations or the state of affairs of the
entity in subsequent financial years.
27.
Contingent assets and liabilities
The Group is not aware of any contingent liabilities which existed as at the end of the financial period or that have arisen
as at the date of this report.
63
Big River Gold Limited
Annual Report
31 December 2020
1.
The Directors declare that:
DIRECTORS’ DECLARATION
(a)
(b)
(c)
in the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable;
in the Directors’ opinion the attached Financial Statements and Notes thereto are in accordance with
the Corporations Act 2001 (Cth), including compliance with accounting standards and giving a true and
fair view of the financial position and performance of the Consolidated entity;
in the Directors’ opinion, the Financial Statements and Notes thereto are in accordance with
International Financial Reporting Standards issued by the International Accounting Standards Board as
stated in Note 2(a); and
(d)
the Directors have been given the declarations required by s.295A of the Corporations Act 2001 (Cth).
Signed in accordance with a resolution of the Directors made pursuant to s295(5) of the Corporations Act 2001(Cth).
On behalf of the Directors
Andrew Richards
Executive Chairman
Perth
31 March 2021
64
Independent Auditor’s Report to the members of Big
River Gold Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Big River Gold Limited (the “Company”) and its subsidiaries (the
“Group”) which the comprises consolidated statement of financial position as at 31 December 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies and other explanatory information,
and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
65
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key Audit Matter
How the scope of our audit responded to the Key Audit Matter
Indicators of impairment for Exploration
and Evaluation Assets
As at 31 December 2020 the carrying
value of exploration and evaluation assets
in Note 11 amount to
as disclosed
$17,812,173. The Group accounting
policy
in respect of exploration and
evaluation assets is disclosed in Note 1(q).
judgement
is required by
Significant
management
in determining whether
facts and circumstances indicate that the
exploration and evaluation assets should
be tested for impairment at balance date.
•
Our audit procedures included, but were not limited to:
•
of
the
Confirming whether the rights to tenure of the area of
interest remained current at balance date as well as
confirming that rights to tenure are expected to be
renewed for tenements that will expire in the near
future;
• Assessing
ongoing
status
exploration
programmes, as well as assessing if there was evidence
that a decision had been made to discontinue activities
for the area of interest, including reviewing future
budgeted expenditures and related work programmes;
and
Evaluating whether exploration activities for the area of
interest had reached a stage where a reasonable
assessment of economically
reserves
existed.
recoverable
We also assessed the appropriateness of the disclosures in Note
11 to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 31 December 2020, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
66
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional skepticism 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’s audit. We remain solely responsible for our
audit opinion.
67
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 with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 16 to 24 of the Directors’ Report for the year ended
31 December 2020.
In our opinion, the Remuneration Report of Big River Gold Limited, for the year ended 31 December 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Pieter Janse van Nieuwenhuizen
Partner
Chartered Accountants
Perth, 31 March 2021
68
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
31 March 2021
The Board of Directors
Big River Gold Limited
Level 22, 221 St Georges Terrace
Perth WA 6000
Australia
Dear Board Members
Auditor’s Independence Declaration to Big River Gold Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
of independence to the directors of Big River Gold Limited.
As lead audit partner for the audit of the financial report of Big River Gold Limited for the year ended 31 December
2020, I declare that to the best of my knowledge and belief, there have been no contraventions of:
• The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• Any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Pieter Janse van Nieuwenhuizen
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation
69
Big River Gold Limited
Annual Report
31 December 2020
ADDITIONAL ASX INFORMATION
The additional information dated 26 March 2021 is required by the ASX Limited Listing Rules and is not disclosed
elsewhere in this report.
Distribution of Shareholders
1 - 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
TOTAL
Numbers
107
405
229
502
123
1,366
Percentage
0.01%
0.56%
0.77%
6.77%
91.89%
100.00%
There were 119 holders of less than marketable parcel of ordinary shares.
Twenty Largest Shareholders
Shareholder
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
EYEON INVESTMENTS PTY LTD
COPULOS SUPERANNUATION PTY LTD
BNP PARIBAS NOMINEES PTY LTD
WESTPARK OPERATIONS PTY LTD
SUPERMAX PTY LTD
SPACETIME PTY LTD
FARJOY PTY LTD
CHRIKIM PTY LTD
KAOS INVESTMENTS PTY LIMITED
GUTHRIE CAD/GIS SOFTWARE PTY LTD
MR ANDREW LEHANE RICHARDS &
MRS KERRY SUZANNE RICHARDS
CS THIRD NOMINEES PTY LIMITED
CONSTANTINOU EQUITIES PTY LTD
SHAYDEN NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
GUTHRIE CAD/GIS SOFTWARE PTY LTD
TB HOLDINGS AUSTRALIA PTY LTD
MABRA PTY LTD
TOTAL
70
Number of Shares
49,873,687
35,501,047
15,522,071
Percentage
22.74%
16.19%
7.08%
11,381,250
5.19%
11,275,288
9,050,000
7,491,262
5,442,990
3,774,668
2,786,833
2,520,425
2,200,000
1,875,000
1,850,003
1,812,500
1,718,421
1,386,971
1,250,000
5.14%
4.13%
3.42%
2.48%
1.72%
1.27%
1.15%
1.00%
0.85%
0.84%
0.83%
0.78%
0.63%
0.57%
1,207,291
1,204,455
169,124,162
0.55%
0.55%
77.11%
Big River Gold Limited
Annual Report
31 December 2020
Substantial Shareholders
Shareholder
Dundee Corporation
Copulos Group
SG Hiscock & Company
Number of Shares
42,500,000
41,062,073
16,961,882
Quoted Options - ASX Code: BRVO (exercisable at $0.16, expiring 30 June 2022)
1 - 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
TOTAL
Holders
69
40
20
92
26
247
Percentage
0.12%
0.45%
0.68%
13.98%
84.77%
100.00%
There were 86 holders of less than marketable parcel of Options.
Twenty Largest Holders
Holder
COPULOS SUPERANNUATION PTY LTD
SUPERMAX PTY LTD
EYEON INVESTMENTS PTY LTD
SPACETIME PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
CHRIKIM PTY LTD
SHAYDEN NOMINEES PTY LTD
FIVE TALENTS LIMITED
MR DANIEL AARON HYLTON TUCKETT
MR MICHAEL DAMIAN
MR ANTHONY JOHN VETTER &
MRS JEANNETTE VETTER
MR MICHAEL YUXUN KUANG
MR CLEMENT FREDERICK DEVINE
TB HOLDINGS AUSTRALIA PTY LTD
MABRA PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
CITICORP NOMINEES PTY LIMITED
RIVERVIEW CORPORATION PTY LTD
MR GIJSBERTUS KOMMER
TOTAL
71
Number of
Options
4,979,167
3,437,500
2,906,371
1,145,834
900,121
800,533
570,828
444,445
423,125
353,752
258,391
225,000
212,500
212,500
208,334
208,334
205,216
195,089
162,959
156,250
18,006,249
Percentage
22.54%
15.56%
13.15%
5.19%
4.07%
3.62%
2.58%
2.01%
1.92%
1.60%
1.17%
1.02%
0.96%
0.96%
0.94%
0.94%
0.93%
0.88%
0.74%
0.71%
81.50%
Big River Gold Limited
Annual Report
31 December 2020
Unquoted Options
At 26 March 2020, the following unquoted options were on issue:
Grant Date
Number on Issue
Exercise Price
Expiry Date
No. of Holders
28 January 2021
3,060,000
$0.48
4 February 2024
3
Unquoted Option holdings greater than 20% in any class
Option Holder
Exercise Price
Expiry Date
Number
CIRCUMFERENCE CAPITAL CT PTY
$0.48
4 February 2024
1,020,000
GOODMAN & COMPANY INVESTMENT
COUNSEL INC
$0.48
4 February 2024
1,020,000
JETT CAPITAL ADVISORS HOLDINGS LLC
$0.48
4 February 2024
1,020,000
Voting Rights
The voting rights attaching to each class of securities are set our below:
a)
b)
Ordinary Shares: On a show of hands every member present at a meeting in person or by proxy
shall have one vote and upon a poll each shares shall have one vote.
Options: No voting rights
On-market buy back
There is currently no on-market buy back program for any of the Company’s securities.
Stock Exchange Listing
Big River Gold Limited’s ordinary shares are quoted on ASX Limited. The home exchange is Perth.
72
Big River Gold Limited
Annual Report
31 December 2020
Schedule of Mining Tenements
Location
Description
Ownership
Location
Description
Ownership
Seridó
Seridó
Seridó
Seridó
Seridó
848.208/2016
848.093/2013
848.007/2015
846.124/2018
848.029/2019
100%
100%
100%
100%
100%
Borborema
805.049/1977
Borborema
840.149/1980
Borborema
840.152/1980
Borborema
948.262/2014
Mara Rosa
860.957/2012
Mara Rosa
860.958/2012
Mara Rosa
860.959/2012
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
Seridó
846.158/2011
846.227/2011
846.502/2011
846.503/2011
846.504/2011
846.505/2011
848.011/2015
846.130/2012
846.131/2012
846.313/2012
846.316/2012
846.506/2011
846.604/2011
846.635/2011
846.637/2011
846.638/2011
846.639/2011
846.640/2011
846.643/2011
846.644/2011
846.651/2011
846.654/2011
848.281/2014
848.055/2015
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
73