FORMERLY STONE RESOURCES AUSTRALIA LIMITED
ANNUAL REPORT
2022
Brightstar Resources Limited
Contents
CORPORATE INFORMATION ......................................................................................................................... 1
CHAIRMAN’S LETTER TO SHAREHOLDERS ................................................................................................ 2
DIRECTORS’ REPORT .................................................................................................................................... 3
AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................ 23
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ......... 24
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ......................................................................... 25
CONSOLIDATED STATEMENT OF CASH FLOWS ...................................................................................... 26
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ......................................................................... 27
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................ 28
DIRECTORS’ DECLARATION ....................................................................................................................... 56
INDEPENDENT AUDIT’S REPORT ............................................................................................................... 57
CORPORATE GOVERNANCE STATEMENT ................................................................................................ 63
ASX ADDITIONAL INFORMATION ................................................................................................................ 64
- 1 -
Brightstar Resources Limited
CORPORATE INFORMATION
ABN 44 100 727 491
Directors
Mr William Hobba – Executive Director
Mr Yongji Duan – Chairman (Non-Executive)
Mr Josh Hunt – Director (Non-Executive)
Other Key Officers
Mr Luke Wang – Company Secretary
Registered and Principal Office
3/25 Belgravia Street
Belmont WA 6104
Telephone: (618) 9277 6008
Facsimile: (618) 9277 6002
Email: info@brightstarresources.com.au
www.brightstarresources.com.au/
Share register
Computershare Investor Services Pty Limited
Level11, 172 St Georges Terrace
Perth WA 6000
Telephone; (618) 9323 2000
Facsimile: (618) 9323 2033
Free call: 1300 787272
Solicitors
Lawton Macmaster Legal
Level 9, 40 The Esplanade
Perth WA 6000
Bankers
Westpac Banking Corporation
1257-1261 Hay Street,
West Perth WA 6005
Auditors
Pitcher Partners BA&A Pty Ltd
Level 11, 12-14 The Esplanade
Perth WA 6000
Securities Exchange Listings
ASX Code: BTR
- 1 -
Brightstar Resources Limited
CORPORATE INFORMATION
ABN 44 100 727 491
Directors
Mr William Hobba – Executive Director
Mr Yongji Duan – Chairman (Non-Executive)
Mr Josh Hunt – Director (Non-Executive)
Other Key Officers
Mr Luke Wang – Company Secretary
Registered and Principal Office
3/25 Belgravia Street
Belmont WA 6104
Telephone: (618) 9277 6008
Facsimile: (618) 9277 6002
Email: info@brightstarresources.com.au
www.brightstarresources.com.au/
Share register
Computershare Investor Services Pty Limited
Level11, 172 St Georges Terrace
Perth WA 6000
Telephone; (618) 9323 2000
Facsimile: (618) 9323 2033
Free call: 1300 787272
Solicitors
Lawton Macmaster Legal
Level 9, 40 The Esplanade
Perth WA 6000
Bankers
Westpac Banking Corporation
1257-1261 Hay Street,
West Perth WA 6005
Auditors
Pitcher Partners BA&A Pty Ltd
Level 11, 12-14 The Esplanade
Perth WA 6000
Securities Exchange Listings
ASX Code: BTR
Brightstar Resources Limited
CHAIRMAN’S LETTER TO SHAREHOLDERS
- 2 -
Brightstar Resources Limited (Brightstar or the Company) is pleased to report a productive year after
successful completion of planned drilling programs, acquisition of high potential tenements and fund raising
by share placements.
For the Company’s largest deposit Cork Tree Well, a reverse circulation drilling program (90 holes for ~12,000
metres) was undertaken in the fourth quarter of 2021. The subsequent updated mineral resources estimates
have shown an increase of 6% on previous JORC Resources. The discovery of a broad mineralised shoot
potentially amenable to underground mining has completely re-set the potential size of this project. In order to
grow these opportunities aggressively and effectively, a further extensional reverse circulation drilling program
(32 holes for 4,758 metres) was undertaken in May 2022 and completed in July 2022.
Brightstar has also completed a reverse circulation drilling program (12 holes for 1,278 metres) at the western
end of the Alpha project in July 2022. The assay results have shown potential for further extensions of this
western zone of the project in an area that has not previously been mined.
On 1 December 2021, Brightstar has completed the acquisition of two prospective exploration licences in
Western Australia, E38/3500 and E38/3504 (Comet Well) from Milford Resources Pty Ltd. Comet Well is a
120km2 land package located adjacent and contiguous to Brightstar’s existing exploration licence areas at
Alpha and Beta. Brightstar has appointed Dr Nigel Brand as geochemical and targeting consultant for the
Comet Well Project area. Dr Brand’s expertise in the exploration geochemistry can support the Company in
determining new effective exploration programs to bring forward successful discovery in this highly prospective
tenure.
On 7 March 2022, Brightstar has acquired a prospective exploration licence E38/3434 from Regis Resources
Ltd which is immediately adjacent to the Company’s Cork Tree Well deposit. A reverse circulation drilling
program (12 holes for 1,782 metres) was undertaken in May 2022 and completed in July 2022.
Brightstar has completed two oversubscribed share placements in October 2021 and March 2022 and has
successfully raised $2.3 million and $2.5 million respectively.
On 27 September 2021, Brightstar entered into a Royalty Call Option Deed with Stone Resources (HK) Limited
(SRHKL), under which SRHK agreed to grant Brightstar an option to purchase the 3% net smelter royalty
(NSR) which is applicable to a substantial portion of Brightstar’s tenement holdings. On 29 June 2022,
Brightstar entered into a deed of variation of the Revised Debt and Equity Compromise Agreement (DECA)
with SRHKL. It was agreed that the $5.4 million debt owed to SRHKL under the DECA will be distinguished in
exchange for the grant of a 1.5% NSR on six tenements which are not covered by the original DECA. If
shareholder approval of these two deeds is obtained, Brightstar will be able to cap the future royalty liability
and settle the existing debt without using any cash or diluting any shares.
I wish to thank Mr Hobba, Mr Hunt and our employees at the Belmont Office and Laverton Site for the
dedication of driving the growth of Brightstar.
I am confident that the strategies we put in place will seize the potential of our valuable mining assets to bring
abundant rewards to our shareholders.
To all our shareholders, I express my appreciation of your confidence, support and loyalty.
Yours truly,
Yongji Duan
Chairman
3 October 2022
- 3 -
Brightstar Resources Limited
DIRECTORS’ REPORT
The directors present their report together with the financial report of the consolidated entity consisting of Brightstar
Resources Limited (“BTR” or “Company”) and its controlled entities (the Group) for the financial year ended 30 June 2022,
and independent audit report thereon.
Review of operations
Corporate
On 27 September 2021, the Group signed a Call Option Deed with Stone Resources (HK) Limited (SRHKL), under which
SRHKL agreed to grant the Group or its nominee an option to purchase the 3% net smelter royalty (NSR) which is
applicable to a substantial portion of the Group’s tenements holdings.
This Call Option Deed is expected to be effective by 25 October 2022 once shareholder approval is obtained. The exercise
price of this Call Option is US$25 million, and the expiry is 5 calendar years following shareholder approval.
An Option Fee of $300,000 is payable to SRHKL on the settlement date and the Group has elected to pay this fee via the
issue of shares. The exercise price, if exercised, can be settled in cash and/or BTR shares at the discretion of the Board.
SRHKL has no rights to compel or demand exercise of the Call Option. Purchase of part of the NSR is allowed by the Call
Option.
On 27 September 2021, the Group executed two Settlement Deeds in relation to an outstanding liability owing to Great
Cortex International Limited (“Great Cortex”) and amounts owed to its former Company Secretary Mr Tony Lau. Under the
Settlement Deeds:
i.
The Group will repay the loan principal of $630,000 in cash to Great Cortex on or before 18 November 2023. All
related expenses and amounts owing, including accrued interest payments, will be waived once BTR meets its
obligations under the Settlement Deed.
At the end of reporting period by issue of 19,090,909 shares @ $0.033 per share, the above loan settlement
agreement was varied and both parties agreed to settle the $630,000 in BTR shares instead of cash, subject to
shareholder approval.
ii.
A settlement sum of $300,000 will be paid to Mr Tony Lau, in cash and/or shares at the Group’s discretion.
With shareholder’ approval obtained at the Group’s 2021 AGM, 5,172,414 shares have been issued to Mr Tony
Lau as part payment under the Settlement Deed, with a further $150,000 paid in cash to Mr Tony Lau during the
period.
iii.
All claims between the Parties relating to the past conduct of the Parties are settled in accordance with the terms
of the Deeds.
At the end of the reporting period, the Group entered into a deed of variation of the Revised Debt and Equity Compromise
Agreement (DECA) with SRHKL. It was agreed that the $5,400,000 debt owed to SRHKL under the DECA will be
distinguished in exchange for the grant of a 1.5% NSR royalty on six tenements which are not covered by the original
DECA (“New Royalty”). Total payable under the New Royalty is capped at $16,200,000.
During the year the Group completed two placements by issuance of approximately 187 million fully paid shares and raised
$4.8 million (before costs) in total. The funds raised have been used in supporting the Group’s exploration activities
including the 2021 RC drilling programme at Cork Tree Well, the 2022 RC drilling programme at Cork Tree Well, Delta 2
and Alpha projects, as well as further exploration programs at its Laverton Project and working capital.
With shareholders’ approval, 2,200,000 Service Options were issued to two employees during the year, in recognition of
their long-term service and commitment to the Group. Service Options vested immediately and have a 3-year term, with
an exercise price of $0.05 per Service Option.
At the end of the financial year the Group had $1,601,324 (2021: $985,036) in cash and cash equivalents. The Group’s
capitalised exploration, evaluation and development expenditure totalled $13,270,923 (2021: $9,313,231).
Exploration
Summary
At the end of FY2022 Brightstar Resources Ltd. holds ~300 km2 of highly prospective tenure both north and south of the
Laverton township (See Figure 1) in the world-class Laverton greenstone belt. This has been achieved through consistent
review and taking opportunities to acquire high potential land packages when they become available and has allowed BTR
to consolidate a significant position around its plant and exiting infrastructure.
Obviously, most of the work in the period was focussed on Cork Tree Well as it is the largest of the 3 JORC compliant
resources in the Brightstar portfolio. However, as the year progressed earlier stage projects such as Brightstar South
Aircore, Pit Sampling at Alpha and a preliminary bedrock test at Delta 2 were undertaken to advance them through the
project pipeline also.
- 3 -
Brightstar Resources Limited
- 4 -
Brightstar Resources Limited
DIRECTORS’ REPORT
The directors present their report together with the financial report of the consolidated entity consisting of Brightstar
Resources Limited (“BTR” or “Company”) and its controlled entities (the Group) for the financial year ended 30 June 2022,
and independent audit report thereon.
DIRECTORS’ REPORT (continued)
Review of operations (continued)
Review of operations
Corporate
On 27 September 2021, the Group signed a Call Option Deed with Stone Resources (HK) Limited (SRHKL), under which
SRHKL agreed to grant the Group or its nominee an option to purchase the 3% net smelter royalty (NSR) which is
applicable to a substantial portion of the Group’s tenements holdings.
This Call Option Deed is expected to be effective by 25 October 2022 once shareholder approval is obtained. The exercise
price of this Call Option is US$25 million, and the expiry is 5 calendar years following shareholder approval.
An Option Fee of $300,000 is payable to SRHKL on the settlement date and the Group has elected to pay this fee via the
issue of shares. The exercise price, if exercised, can be settled in cash and/or BTR shares at the discretion of the Board.
SRHKL has no rights to compel or demand exercise of the Call Option. Purchase of part of the NSR is allowed by the Call
On 27 September 2021, the Group executed two Settlement Deeds in relation to an outstanding liability owing to Great
Cortex International Limited (“Great Cortex”) and amounts owed to its former Company Secretary Mr Tony Lau. Under the
Option.
Settlement Deeds:
i.
The Group will repay the loan principal of $630,000 in cash to Great Cortex on or before 18 November 2023. All
related expenses and amounts owing, including accrued interest payments, will be waived once BTR meets its
obligations under the Settlement Deed.
At the end of reporting period by issue of 19,090,909 shares @ $0.033 per share, the above loan settlement
agreement was varied and both parties agreed to settle the $630,000 in BTR shares instead of cash, subject to
shareholder approval.
ii.
A settlement sum of $300,000 will be paid to Mr Tony Lau, in cash and/or shares at the Group’s discretion.
With shareholder’ approval obtained at the Group’s 2021 AGM, 5,172,414 shares have been issued to Mr Tony
Lau as part payment under the Settlement Deed, with a further $150,000 paid in cash to Mr Tony Lau during the
period.
of the Deeds.
iii.
All claims between the Parties relating to the past conduct of the Parties are settled in accordance with the terms
At the end of the reporting period, the Group entered into a deed of variation of the Revised Debt and Equity Compromise
Agreement (DECA) with SRHKL. It was agreed that the $5,400,000 debt owed to SRHKL under the DECA will be
distinguished in exchange for the grant of a 1.5% NSR royalty on six tenements which are not covered by the original
DECA (“New Royalty”). Total payable under the New Royalty is capped at $16,200,000.
During the year the Group completed two placements by issuance of approximately 187 million fully paid shares and raised
$4.8 million (before costs) in total. The funds raised have been used in supporting the Group’s exploration activities
including the 2021 RC drilling programme at Cork Tree Well, the 2022 RC drilling programme at Cork Tree Well, Delta 2
and Alpha projects, as well as further exploration programs at its Laverton Project and working capital.
With shareholders’ approval, 2,200,000 Service Options were issued to two employees during the year, in recognition of
their long-term service and commitment to the Group. Service Options vested immediately and have a 3-year term, with
an exercise price of $0.05 per Service Option.
At the end of the financial year the Group had $1,601,324 (2021: $985,036) in cash and cash equivalents. The Group’s
capitalised exploration, evaluation and development expenditure totalled $13,270,923 (2021: $9,313,231).
Exploration
Summary
At the end of FY2022 Brightstar Resources Ltd. holds ~300 km2 of highly prospective tenure both north and south of the
Laverton township (See Figure 1) in the world-class Laverton greenstone belt. This has been achieved through consistent
review and taking opportunities to acquire high potential land packages when they become available and has allowed BTR
to consolidate a significant position around its plant and exiting infrastructure.
Obviously, most of the work in the period was focussed on Cork Tree Well as it is the largest of the 3 JORC compliant
resources in the Brightstar portfolio. However, as the year progressed earlier stage projects such as Brightstar South
Aircore, Pit Sampling at Alpha and a preliminary bedrock test at Delta 2 were undertaken to advance them through the
project pipeline also.
Figure 1: Brightstar Resources Ltd. Tenement Package as at 30/06/2022.
- 5 -
Brightstar Resources Limited
DIRECTORS’ REPORT (continued)
Review of operations (continued)
Exploration Activities.
v Cork Tree Well Reporting Group
Most of BTR’s exploration activities for the FY2022 year were based around the testing and improvement of the Cork Tree
Well mineral resource. This included an 89 drillhole RC program, and site visits for lithological mapping and ground-truthing
of interpretations.
The RC drill hole program completed in November 2021 was composed of 89 RC drillholes (and an additional hole to
replace one failed hole) for over 12,800m of drilling testing the morphology and orientation of the mineralisation as well as
the reported tenor of the grade (See Figure 2). The results from this program have successfully contributed to the
confidence of the quality of the mineral resource estimate with both grade and location data broadly confirming the previous
interpretation (See Table 1).
The Mineral Resource Estimate (MRE) was subsequently updated in August 2022 and has shown a growth in tonnes and
ounces mostly because of a broader interpretation of the mineralised structure. This broader interpretation could provide
a more reasonable mining shape for upcoming mining studies and will ensure that lower grade material will not be missed
during the mining assessment stage.
A first-round bedrock test was undertaken at the end of the period on the aircore anomaly previously reported as Delta 2.
Results are yet to be received.
Figure 2: 2021 CTW RC drill collar locations.
DIRECTORS’ REPORT (continued)
Review of operations (continued)
Exploration Activities.
v Cork Tree Well Reporting Group
Most of BTR’s exploration activities for the FY2022 year were based around the testing and improvement of the Cork Tree
Well mineral resource. This included an 89 drillhole RC program, and site visits for lithological mapping and ground-truthing
of interpretations.
The RC drill hole program completed in November 2021 was composed of 89 RC drillholes (and an additional hole to
replace one failed hole) for over 12,800m of drilling testing the morphology and orientation of the mineralisation as well as
the reported tenor of the grade (See Figure 2). The results from this program have successfully contributed to the
confidence of the quality of the mineral resource estimate with both grade and location data broadly confirming the previous
interpretation (See Table 1).
The Mineral Resource Estimate (MRE) was subsequently updated in August 2022 and has shown a growth in tonnes and
ounces mostly because of a broader interpretation of the mineralised structure. This broader interpretation could provide
a more reasonable mining shape for upcoming mining studies and will ensure that lower grade material will not be missed
during the mining assessment stage.
Results are yet to be received.
A first-round bedrock test was undertaken at the end of the period on the aircore anomaly previously reported as Delta 2.
- 5 -
Brightstar Resources Limited
- 6 -
Brightstar Resources Limited
DIRECTORS’ REPORT (continued)
Review of operations (continued)
Table 1: Top 20 Assays table for the RC program.
Hole Number
From
(m)
To
(m)
Width
(m)
Grade
(g/t)
BTRRC025
BTRRC026
BTRRC022
BTRRC031
BTRRC028
BTRRC075
BTRRC072
BTRRC024
BTRRC074
BTRRC032
BTRRC081
BTRRC041
BTRRC072
BTRRC021
BTRRC029
BTRRC023
BTRRC069
BTRRC083
BTRRC081
BTRRC034
BTRRC074
111
139
112
131
157
96
29
102
70
176
58
40
23
133
130
160
42
69
68
111
61
137
156
128
143
169
98
35
113
75
183
65
48
24
145
137
176
47
76
74
118
64
26
17
16
12
12
2
6
11
5
7
7
8
1
12
7
16
5
7
6
7
3
2.97
3.09
3.26
4.25
3.47
16.84
5.56
2.86
5.01
3.5
3.03
2.65
20.32
1.69
2.84
1.22
3.69
2.28
2.6
2.21
5.15
NB. Intersections based on 1 g/t Au minimum grade and less then 3 intervals of internal waste.
Figure 2: 2021 CTW RC drill collar locations.
Figure 3: Mineralisation zone in wall of Cork Tree Well pit.
DIRECTORS’ REPORT (continued)
Review of operations (continued)
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Brightstar Resources Limited
Figure 4: Delta 2 location in comparison to Cork Tree Well.
DIRECTORS’ REPORT (continued)
Review of operations (continued)
DIRECTORS’ REPORT (continued)
Review of operations (continued)
- 7 -
Brightstar Resources Limited
- 8 -
Brightstar Resources Limited
Figure 5: Section across CTW including BTRRC031 and BTRRC032.
Figure 4: Delta 2 location in comparison to Cork Tree Well.
Figure 6: Section across CTW including BTRRC022
Brightstar Resources Limited - 9 - DIRECTORS’ REPORT (continued) Review of operations (continued) v Brightstar Reporting Group Exploration activities in the Brightstar area has been limited to nearly 2,000 metres of early stage aircore testing of anomalous areas previously exploited by prospectors and turn of the 20th century hand miners. These areas include Jubilee, Rowena, Sailor Prince and Queen of Hearts. Aircore drilling has been undertaken adjacent to these prospective areas to generate anomalies for further exploration follow-up. Anomalies were generated at the Jubilee, Rowena, and Sailor Prince project areas (See Figure 8). A number of holes were unable to be completed due to terrain or clearing difficulties, but the programs were sufficiently completed to successfully test the area. The Jubilee and Rowena anomalies are single point anomalies only. The Sailor Prince anomaly is composed of 5 holes with >100ppb with the highest-grade intersection 1m @ 4.85g/t Au. The thin cover and regolith sequence intersected in these project areas indicates that the 200m spaced drillholes may be too far apart to guarantee an effective test of the regolith sequence here. Follow up activities will therefore be planned based on tighter drill spacing for cover testing and targeted bedrock investigations. Queen of Hearts South results are awaited. Table 2: Aircore drilling FY2022. Project No of Holes Completed Total Metres Jubilee 10 185 Rowena 22 436 Sailor Prince 19 304 Queen of Hearts South 25 991 Total 76 1,916 Figure 7: Aircore Drilling at Sailor Prince. DIRECTORS’ REPORT (continued)
Review of operations (continued)
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Brightstar Resources Limited
Figure 8: Max Au in Hole for 2022 Brightstar South Aircore Programs.
Brightstar Resources Limited - 9 - DIRECTORS’ REPORT (continued) Review of operations (continued) v Brightstar Reporting Group Exploration activities in the Brightstar area has been limited to nearly 2,000 metres of early stage aircore testing of anomalous areas previously exploited by prospectors and turn of the 20th century hand miners. These areas include Jubilee, Rowena, Sailor Prince and Queen of Hearts. Aircore drilling has been undertaken adjacent to these prospective areas to generate anomalies for further exploration follow-up. Anomalies were generated at the Jubilee, Rowena, and Sailor Prince project areas (See Figure 8). A number of holes were unable to be completed due to terrain or clearing difficulties, but the programs were sufficiently completed to successfully test the area. The Jubilee and Rowena anomalies are single point anomalies only. The Sailor Prince anomaly is composed of 5 holes with >100ppb with the highest-grade intersection 1m @ 4.85g/t Au. The thin cover and regolith sequence intersected in these project areas indicates that the 200m spaced drillholes may be too far apart to guarantee an effective test of the regolith sequence here. Follow up activities will therefore be planned based on tighter drill spacing for cover testing and targeted bedrock investigations. Queen of Hearts South results are awaited. Table 2: Aircore drilling FY2022. Project No of Holes Completed Total Metres Jubilee 10 185 Rowena 22 436 Sailor Prince 19 304 Queen of Hearts South 25 991 Total 76 1,916 Figure 7: Aircore Drilling at Sailor Prince.
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Brightstar Resources Limited
DIRECTORS’ REPORT (continued)
Review of operations (continued)
Concerns about the location of the pit at Alpha and the opportunity for cutbacks on the original design instigated a pit wall
sampling program along either side of the Alpha ramp in December 2021. 384 samples were taken by chipping off rock
from the wall with a rock hammer approximately 1-1.5m up from the base of the wall and collected into a numbered calico
sample bag. Sample weights collected had an average weight of 1.4kg. A total of 384 samples were taken.
The assay results ranged from below detection (<0.01 ppm) up to 8.58 g/t Au. There is a main zone of mineralisation
running across both sample traverses. This appears to be trending northwest at approximately 290°. This is presumably
the reason the ramp slot was positioned as it was (Figure 9). The mineralisation appears to be part of a set of right lateral
stepping en-echelon veins. The main body of mineralisation was mined in the pit and it is assumed a further vein set occurs
to the west which is then possibly truncated by the NE fault seen in the top left-hand corner of Figure 6. The start of a third
vein system is possibly present at the eastern end of the northern sampling line. The tenor of mineralisation appears to
decrease to the east. This could be due to the NE fault being the primary source of mineralising fluids and the further
southeast the lower the grade. Alternatively, it could be due to the relative elevation of the preserved vein set. As the en-
echelon vein systems step east, the main zone of mineralisation may drop in elevation, therefore higher-grade
mineralisation may be present below the elevation sampled in the ramp. The eastern most system may be just the tip of
the iceberg.
Further drilling will be required to determine the controls on mineralisation at Alpha.
Figure 9: Pit Wall Sampling in Alpha Pit.
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Brightstar Resources Limited
DIRECTORS’ REPORT (continued)
Review of operations (continued)
Concerns about the location of the pit at Alpha and the opportunity for cutbacks on the original design instigated a pit wall
sampling program along either side of the Alpha ramp in December 2021. 384 samples were taken by chipping off rock
from the wall with a rock hammer approximately 1-1.5m up from the base of the wall and collected into a numbered calico
sample bag. Sample weights collected had an average weight of 1.4kg. A total of 384 samples were taken.
The assay results ranged from below detection (<0.01 ppm) up to 8.58 g/t Au. There is a main zone of mineralisation
running across both sample traverses. This appears to be trending northwest at approximately 290°. This is presumably
the reason the ramp slot was positioned as it was (Figure 9). The mineralisation appears to be part of a set of right lateral
stepping en-echelon veins. The main body of mineralisation was mined in the pit and it is assumed a further vein set occurs
to the west which is then possibly truncated by the NE fault seen in the top left-hand corner of Figure 6. The start of a third
vein system is possibly present at the eastern end of the northern sampling line. The tenor of mineralisation appears to
decrease to the east. This could be due to the NE fault being the primary source of mineralising fluids and the further
southeast the lower the grade. Alternatively, it could be due to the relative elevation of the preserved vein set. As the en-
echelon vein systems step east, the main zone of mineralisation may drop in elevation, therefore higher-grade
mineralisation may be present below the elevation sampled in the ramp. The eastern most system may be just the tip of
the iceberg.
Further drilling will be required to determine the controls on mineralisation at Alpha.
Figure 9: Pit Wall Sampling in Alpha Pit.
DIRECTORS’ REPORT (continued)
-12-
JORC Resources and Reserves
The first significant Resource Development RC drill program undertaken on BTR leases since 2014 was completed at
Cork Tree Well and informs the re-invigorated mineral resource estimate with high-quality modern exploration data. The
new MRE was announced after the end of the report period however all new drilling included in the new interpretation
and most of the technical work (interpretation and estimation) was completed in FY2022.
Brightstar Resources Limited
Measured
Indicated
Location
KTonnes
g/t
Au
Cut-
off
(g/t)
KOunces KTonnes
KOunces KTonnes
g/t
Au
Inferred
g/t
Au
KOunces KTonnes
Total
g/t
Au
KOunces
Alpha
0.5
623
1.6
33
374
2.1
25
455
3.3
48
1,452
2.3
106
Beta
0.5
345
1.7
19
576
1.6
29
961
1.7
54
1,882
1.7
102
Cork
Tree
Well
Total
0.5
0
0
0
1,759
1.7
95
3,851
1.3
158
5,610
1.4
252
968
1.6
52
2,709
1.7
175
5,267
1.6
268
7,194
1.6
460
All data is rounded and discrepancies in summation may occur
Competent Person’s Statement
The information in the Report that relates to Mineral Resources of the Alpha, Beta and Cork Tree Well deposit is based on
information compiled by Mr Richard Maddocks of Auralia Mining Consulting Pty Ltd. Mr Maddocks is a Fellow of the
Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity he has undertaken to qualify as a “Competent
Person” as that term is defined in the 2012 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore
Resources (JORC Code 2012)”. Mr Maddocks consents to the inclusion in this report of the matters based in this
information in the form and context in which it appears. Mr Maddocks was employed as a contractor of BTR.
Directors
The names of directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Names, qualifications, experience, and special responsibilities
William Hobba
Managing Director
William Hobba has been a director of BTR for the past seven years. Mr Hobba has previously served as a non-executive
director and technical advisor of BTR. Mr Hobba’s appointment to the position of Managing Director reflects the leadership
role in recapitalisation and planning to return to production. Mr Hobba is an experienced minesite technical advisor who
brings 40 years of operational experience in developing mine sites to his role, including over ten years’ experience
constructing and operating the Brightstar plant.
Mr Hobba holds no directorships in other listed companies in Australia.
Yongji Duan
Chairman (Non-Executive)
Yongji Duan is the Chairman of the board of directors of Stone Resources Limited, a previous major shareholder of
Brightstar Resources Limited. He joined Stone Group Corporation in 1985 and has served as Vice President and President
prior to his promotion to the Chairman of its board of directors in 1999. He was appointed President and Chief Executive
Officer of Stone Group Holdings Limited and its subsidiaries in 2002.
As a well-known entrepreneur and business leader in Chinafrom 1999 to 2007, he has held the position as Director of
Beijing Centergate Technologies (Holding) Co. Ltd., a company listed on Shenzhen Stock Exchange. From 2003 to 2008,
he also served as Director of SINA Corporation (NASDAQ: SINA).
DIRECTORS’ REPORT (continued)
Directors (continued)
-13-
Brightstar Resources Limited
Mr Duan graduated from Tsinghua University and was a researcher at Beijing University of Aeronautics & Astronautics.
He acted as Vice Director of 621 Laboratory at China National Space Administration from 1982 to 1984.
Mr Duan holds no other directorships in other listed companies in Australia.
Josh Hunt
Director (Non-Executive)
Josh Hunt is an experienced capital markets and M&A lawyer and has extensive experience in all aspects of mining and
energy project acquisitions and disposals and general mining legislation compliance throughout Australia. He has advised
on numerous IPOs, fundraisings, and acquisitions by both public and private companies on the ASX and internationally.
Mr Hunt assists the BTR board with corporate governance, company law and capital market management going forward.
Mr Hunt is also a director of ASX listed I Synergy Group Limited (ASX:IS3).
Directors’ relevant interests in shares or options
The relevant interests of each director, at the date of the directors’ report, in shares or options over any such
instruments are outlined in the following table:
Directors
William Hobba
Yongji Duan
Josh Hunt
Ordinary Shares
Unlisted Options
68,727,775
31,449,497
3,357,999
-
-
-
Other Key Management Personnel
Luke Wang
Company Secretary
Mr Wang is a Certified Practising Accountant. He joined the Company in 2012. In addition to the Company Secretary
work, Mr Wang is also managing the Group’s accounting and financial reporting, as well as assisting with tenement
management and various administration tasks
Tony Lau, FCPA (HK)
Joint Company Secretary (Resigned 19 July 2021)
Mr Lau has over 20 years of audit, accounting, and corporate finance experience. He worked in PricewaterhouseCoopers
in Hong Kong for 12 years and thereafter held a senior finance executive for a number of PRC Groups in Hong Kong. He
had extensive exposures in working on complex projects including overseas mergers, acquisitions, and IPOs.
Principal Activities
The principal activities of the Group during the financial year were mineral exploration.
Significant changes in state of affairs
Other than those disclosed in the director’s report, there were no significant changes in the state of affairs of the Group
during the financial year.
Results
The consolidated loss after income tax attributable to the members of the Group was $3,950,250 (2021: $60,551,860
profit).
-13-
Brightstar Resources Limited
-14-
Brightstar Resources Limited
DIRECTORS’ REPORT (continued)
Directors (continued)
Josh Hunt
Director (Non-Executive)
Mr Duan graduated from Tsinghua University and was a researcher at Beijing University of Aeronautics & Astronautics.
He acted as Vice Director of 621 Laboratory at China National Space Administration from 1982 to 1984.
Mr Duan holds no other directorships in other listed companies in Australia.
Josh Hunt is an experienced capital markets and M&A lawyer and has extensive experience in all aspects of mining and
energy project acquisitions and disposals and general mining legislation compliance throughout Australia. He has advised
on numerous IPOs, fundraisings, and acquisitions by both public and private companies on the ASX and internationally.
Mr Hunt assists the BTR board with corporate governance, company law and capital market management going forward.
Mr Hunt is also a director of ASX listed I Synergy Group Limited (ASX:IS3).
Directors’ relevant interests in shares or options
The relevant interests of each director, at the date of the directors’ report, in shares or options over any such
instruments are outlined in the following table:
Directors
William Hobba
Yongji Duan
Josh Hunt
Ordinary Shares
Unlisted Options
68,727,775
31,449,497
3,357,999
-
-
-
Other Key Management Personnel
Luke Wang
Company Secretary
Mr Wang is a Certified Practising Accountant. He joined the Company in 2012. In addition to the Company Secretary
work, Mr Wang is also managing the Group’s accounting and financial reporting, as well as assisting with tenement
management and various administration tasks
Tony Lau, FCPA (HK)
Joint Company Secretary (Resigned 19 July 2021)
Mr Lau has over 20 years of audit, accounting, and corporate finance experience. He worked in PricewaterhouseCoopers
in Hong Kong for 12 years and thereafter held a senior finance executive for a number of PRC Groups in Hong Kong. He
had extensive exposures in working on complex projects including overseas mergers, acquisitions, and IPOs.
DIRECTORS’ REPORT (continued)
Dividends
No dividends have been paid or declared since the start of the financial year and the directors do not recommend the
payment of a dividend in respect of the financial year.
Significant events after balance date
Subsequent to the financial year end, the Company has scheduled a General Meeting for 17 October 2022.
There were no other significant events occurring after balance sheet.
Likely developments
The Group will continue to progress its develop plan by moving its focus from resource expansion to converting its resource
to reserves with the ultimate target of restarting mining and milling operations.
Environmental legislation
The Group’s operations are subject to significant environmental regulation under the law of the Commonwealth and State.
The Directors of the Group monitor compliance with environmental regulations. The Directors are not aware of any
significant breaches during the period covered by this Report.
Business Risks
The Board and Management have identified the following specific risks relevant to the Company’s current/ongoing business
and operations:
Fluctuations in commodity prices and outlook
The Group’s is by its nature exposed to fluctuations in the gold price and the Australian dollar exchange rate. Volatility in
the gold price and Australian dollar effects the perceived value of the Group and its business performance. Declining gold
prices can also impact operations by requiring a reassessment of the feasibility of a particular exploration or development
project. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment
could cause delays and/or may interrupt operations, which may have a material adverse effect on our results of operations
and financial condition.
Mineral resources and estimates and exploration
The Group’s mineral resources and estimates are estimates, based on interpretations of geological data obtained from
drillholes and other sampling techniques. Actual mineralisation or geological conditions may be different from those
predicted. Market price fluctuations of gold as well as increased production and capital costs may render the Group’s
resources unprofitable to develop at a particular site or sites for periods of time or may render estimates containing relatively
lower grade mineralisation uneconomic. Estimated resources may have to be re-estimated based on actual production
experience. Any of these factors may require the Group to reduce its estimates, which could have a negative impact on
the Group’s financial results.
The Group’s exploration projects involve many risks and are frequently unsuccessful. Once a site with mineralisation is
discovered (or acquired), it may take several years from the initial phases of drilling until production is possible. There is
no assurance that current or future exploration programs will be successful. There is a risk that depletion of resources will
not be offset by discoveries or acquisitions.
Principal Activities
The principal activities of the Group during the financial year were mineral exploration.
Mining, exploration and insurance
Significant changes in state of affairs
during the financial year.
Other than those disclosed in the director’s report, there were no significant changes in the state of affairs of the Group
Results
profit).
The consolidated loss after income tax attributable to the members of the Group was $3,950,250 (2021: $60,551,860
The mining industry is subject to significant risks and hazards, including environmental hazards, industrial accidents,
unusual or unexpected geological conditions, unavailability of materials and equipment, pit wall failures, rock bursts,
seismic events, cave-ins and weather conditions (including flooding and bush fires), most of which are beyond the Group’s
control. These risks and hazards could result in significant costs or delays that could have a material adverse effect on the
Group’s financial performance, liquidity and results of operation. There is a risk that unforeseen geological and geotechnical
difficulties may be encountered when developing and mining, such as unusual or unexpected geological conditions,
underground access, ambient rock temperature, rock bursts, seismicity and cave ins.
Unforeseen geological and geotechnical difficulties could impact operations and/or require additional operating or capital
expenditure to rectify problems and thereby have an adverse effect on the Company's financial and operational
performance.
-15-
Brightstar Resources Limited
DIRECTORS’ REPORT (continued)
Business Risks (continued)
The Group maintains insurance to cover the most common of these risks and hazards. The insurance is maintained in
amounts that are considered reasonable depending on the circumstances surrounding each identified risk. However,
property, liability and other insurance may not provide sufficient coverage for losses related to these or other risks or
hazards.
Environmental, health, safety and permitting
The Group’s activities are subject to laws and regulations governing the protection and management of the environment,
water management, waste disposal, worker health and safety, mine development and rehabilitation and the protection
of endangered and other special status species. The Group’s ability to obtain permits and approvals and to successfully
operate may be adversely impacted by real or perceived detrimental events associated with the Group’s activities
or those of other mining companies affecting the environment, human health and safety of the surrounding communities.
Delays in obtaining or failure to obtain government permits and approvals may adversely affect the Group’s operations,
including its ability to continue operations.
The Group has implemented health, safety and community initiatives at its sites to manage the health and safety of its
employees, contractors and members of the community. While these control measures are in place there is no guarantee
that these will eliminate the occurrence of incidents which may result in personal injury or damage to property. In certain
instances such occurrences could give rise to regulatory fines and/or civil liability.
Climate change
The Group recognises that physical and non-physical impacts of climate change may affect assets, productivity, markets
and the community. Risks related to the physical impacts of climate change include the risks associated with increased
severity of extreme weather events and chronic risks resulting from longer-term changes in climate patterns. Non-physical
risks and opportunities arise from a variety of policy, legal, technological and market responses to the challenges posed
by climate change.
Risk management
The Group manages the risks listed above, and other day-to-day risks through an established management
framework which conforms to Australian and international standards and guidance. The Group’s risk reporting and control
mechanisms are designed to ensure strategic, operational, legal, financial, reputational and other risks are identified,
assessed and appropriately managed. The financial reporting and control mechanisms are reviewed during the period by
management and the external auditors.
The Group regularly reviews the risk portfolio of the business and the effectiveness of the Group’s management of those
risks.
Shares under option
Unissued ordinary shares of Group under option as at 30 June 2022 are as follows:
Date options issued
Number of shares under
option
9 April 2020
15,000,000
31 December 2020
31 December 2020
31 December 2020
12 February 2021
22 June 2021
1 December 2021
1 December 2021
4,000,000
4,000,000
4,000,000
1,000,000
5,000,000
2,200,000
20,000,000
Exercise price of option
Expiry date of options
$0.01
$0.06
$0.08
$0.10
$0.10
$0.045
$0.05
$0.05
8 April 2023
31 December 2023
31 December 2023
31 December 2023
12 February 2024
22 June 2024
1 December 2024
31 December 2024
No option holder has any right under the options to participate in any other share issue of the Company. No shares were
issued during or after the reporting period upon the exercise of options, as at the date of this report.
DIRECTORS’ REPORT (continued)
Business Risks (continued)
-15-
The Group maintains insurance to cover the most common of these risks and hazards. The insurance is maintained in
amounts that are considered reasonable depending on the circumstances surrounding each identified risk. However,
property, liability and other insurance may not provide sufficient coverage for losses related to these or other risks or
hazards.
Environmental, health, safety and permitting
The Group’s activities are subject to laws and regulations governing the protection and management of the environment,
water management, waste disposal, worker health and safety, mine development and rehabilitation and the protection
of endangered and other special status species. The Group’s ability to obtain permits and approvals and to successfully
operate may be adversely impacted by real or perceived detrimental events associated with the Group’s activities
or those of other mining companies affecting the environment, human health and safety of the surrounding communities.
Delays in obtaining or failure to obtain government permits and approvals may adversely affect the Group’s operations,
including its ability to continue operations.
The Group has implemented health, safety and community initiatives at its sites to manage the health and safety of its
employees, contractors and members of the community. While these control measures are in place there is no guarantee
that these will eliminate the occurrence of incidents which may result in personal injury or damage to property. In certain
instances such occurrences could give rise to regulatory fines and/or civil liability.
Climate change
by climate change.
Risk management
risks.
Shares under option
The Group manages the risks listed above, and other day-to-day risks through an established management
framework which conforms to Australian and international standards and guidance. The Group’s risk reporting and control
mechanisms are designed to ensure strategic, operational, legal, financial, reputational and other risks are identified,
assessed and appropriately managed. The financial reporting and control mechanisms are reviewed during the period by
management and the external auditors.
The Group regularly reviews the risk portfolio of the business and the effectiveness of the Group’s management of those
9 April 2020
15,000,000
option
31 December 2020
31 December 2020
31 December 2020
12 February 2021
22 June 2021
1 December 2021
1 December 2021
4,000,000
4,000,000
4,000,000
1,000,000
5,000,000
2,200,000
20,000,000
$0.01
$0.06
$0.08
$0.10
$0.10
$0.045
$0.05
$0.05
8 April 2023
31 December 2023
31 December 2023
31 December 2023
12 February 2024
22 June 2024
1 December 2024
31 December 2024
No option holder has any right under the options to participate in any other share issue of the Company. No shares were
issued during or after the reporting period upon the exercise of options, as at the date of this report.
Brightstar Resources Limited
Brightstar Resources Limited
DIRECTORS’ REPORT (continued)
Directors’ Meetings
-16-
The number of meetings of directors (including meetings of committees of directors) held during the year and the number
of meetings attended by each director was as follows:
Number of meetings held:
Number of meetings attended:
Mr William Hobba
Mr Yongji Duan
Mr Josh Hunt
Proceedings on behalf of the Group
Directors’
Meetings
6
Eligible to
attend
6
5
6
6
6
6
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility
on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237
of the Corporations Act 2001.
The Group recognises that physical and non-physical impacts of climate change may affect assets, productivity, markets
and the community. Risks related to the physical impacts of climate change include the risks associated with increased
severity of extreme weather events and chronic risks resulting from longer-term changes in climate patterns. Non-physical
risks and opportunities arise from a variety of policy, legal, technological and market responses to the challenges posed
Auditor Independence
Section 307C of the Corporations Act 2001 requires our auditors to provide the Directors of the Company with an
Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on
page 23 and forms part of this directors’ report for the year ended 30 June 2022.
Unissued ordinary shares of Group under option as at 30 June 2022 are as follows:
Date options issued
Number of shares under
Exercise price of option
Expiry date of options
Remuneration report (audited)
The Directors present the Group’s 2022 remuneration report which details the remuneration information for Brightstar
Resources Limited’s executive directors, non-executive directors and other key management personnel.
Non-Audit Services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 24 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001.
Rounding of amounts
In accordance with ASIC Corporations (Rounding in Financial/Director’s Reports) Instrument 2016/191, the amounts in
the Directors’ report and in the financial report have been rounded to the nearest $1 (where rounding is applicable).
Details of key management personnel
Directors
(i)
William Hobba
Yongji Duan
Josh Hunt
Managing Director
Non-Executive Chairman
Non-Executive Director
Other Key Officers
(ii)
Yafei (Luke) Wang
Tony Lau
Company Secretary (appointed on 19 July 2021, formerly Joint Company Secretary)
Joint Company Secretary (resigned on 19 July 2021)
Remuneration philosophy
The philosophy of the Group in determining remuneration levels is to set competitive remuneration packages to attract and
retain high calibre employees.
DIRECTORS’ REPORT (continued)
Remuneration report (audited) (continued)
-17-
Brightstar Resources Limited
Remuneration committee
There is no separate Remuneration Committee. The Board of Directors of the Company is responsible for determining
and reviewing compensation arrangements for the directors and the executive team.
The Board assesses the appropriateness of the nature and amount of remuneration of directors and executives on a
periodic basis by reference to relevant employment market conditions.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration
is separate and distinct.
Non-executive director remuneration
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time
to time by a general meeting.
The Board considers the fees paid to non-executive directors of comparable companies when undertaking the annual
review process.
The board policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The
board determines payments to the non-executive directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required. In the current year, no advice
was sought. Fees for non-executive directors are not linked to the performance of the Group. However, to align directors’
interests with shareholder interests, the directors are encouraged to hold shares in the Group and are able to participate
in the option plan.
Senior manager and executive director remuneration
Remuneration is reviewed annually by the Board. The process consists of a review of relevant comparative remuneration
in the market and internally and, where appropriate, external advice on policies and practices. The Board has access to
external, independent advice where necessary. In the current year, no advice was obtained.
Senior managers are given the opportunity to receive their remuneration in a variety of forms including cash, shares issued
in lieu of salary, and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of
payment chosen will be optimal for the recipient without creating undue cost for the Group.
Voting and comments made at the Company’s 2021 Annual General Meeting (“AGM”)
The Group received more than 99% of yes votes on its remuneration report for the 2021 financial year. The Group did not
receive any feedback at the AGM or throughout the year on its remuneration practices.
Executive Service Agreements
The key terms of Mr Hobba and Mr Wang’s service agreements are set out below:
William Hobba, Managing Director
(a) Terms of agreement dated 1 December 2020, commencing 3 December 2020 for a term of three years
(b) Remuneration:
Base salary of $120,000 plus statutory superannuation;
-
- Reimbursement of telephone, travel and other expenses reasonably incurred in connection with his
employment; and
Eligibility to participate in any executive bonus scheme as approved and implemented by the Group.
(c) Termination of the agreement by either Mr Hobba or the Group can be made upon giving one month’s written
-
notice or by the Group immediately upon giving written notice with payment in lieu.
Brightstar Resources Limited
Brightstar Resources Limited
DIRECTORS’ REPORT (continued)
Remuneration report (audited) (continued)
Yafei (Luke) Wang, Financial Controller and Company Secretary
-18-
(a) Terms of agreement dated 23 November 2020, commencing 23 November 2020 for a term of three years
(b) Remuneration:
-
Base salary of $100,000 plus statutory superannuation
(c) Termination of the agreement by either Mr Wang or the Group can be made upon giving one month’s written
notice or by the Group immediately upon giving written notice with payment in lieu.
Key Performance Indicators of the Group over the last five years
Information about the Group’s earnings and changes in shareholder wealth for the financial year and previous
4 financial years is outlined in the following table:
2022
2021
2020
2019
2018
Net profit / (loss) after tax
(3,950,250)
60,551,860
(6,617,894)
(4,140,859)
(5,156,614)
Basic (loss) / profit (cents per share)
(0.73)
10.25
(0.80)
(0.51)
(0.66)
Dividends paid (cents per share)
-
-
-
-
-
The Board considers the fees paid to non-executive directors of comparable companies when undertaking the annual
Share price at end of year
0.018
0.031
0.004
0.002
0.003
DIRECTORS’ REPORT (continued)
Remuneration report (audited) (continued)
Remuneration committee
-17-
There is no separate Remuneration Committee. The Board of Directors of the Company is responsible for determining
and reviewing compensation arrangements for the directors and the executive team.
The Board assesses the appropriateness of the nature and amount of remuneration of directors and executives on a
periodic basis by reference to relevant employment market conditions.
In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time
Remuneration structure
is separate and distinct.
Non-executive director remuneration
to time by a general meeting.
review process.
The board policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The
board determines payments to the non-executive directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required. In the current year, no advice
was sought. Fees for non-executive directors are not linked to the performance of the Group. However, to align directors’
interests with shareholder interests, the directors are encouraged to hold shares in the Group and are able to participate
in the option plan.
Senior manager and executive director remuneration
Remuneration is reviewed annually by the Board. The process consists of a review of relevant comparative remuneration
in the market and internally and, where appropriate, external advice on policies and practices. The Board has access to
external, independent advice where necessary. In the current year, no advice was obtained.
Senior managers are given the opportunity to receive their remuneration in a variety of forms including cash, shares issued
in lieu of salary, and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of
payment chosen will be optimal for the recipient without creating undue cost for the Group.
Voting and comments made at the Company’s 2021 Annual General Meeting (“AGM”)
The Group received more than 99% of yes votes on its remuneration report for the 2021 financial year. The Group did not
receive any feedback at the AGM or throughout the year on its remuneration practices.
Executive Service Agreements
The key terms of Mr Hobba and Mr Wang’s service agreements are set out below:
William Hobba, Managing Director
(a) Terms of agreement dated 1 December 2020, commencing 3 December 2020 for a term of three years
(b) Remuneration:
-
Base salary of $120,000 plus statutory superannuation;
- Reimbursement of telephone, travel and other expenses reasonably incurred in connection with his
employment; and
-
Eligibility to participate in any executive bonus scheme as approved and implemented by the Group.
(c) Termination of the agreement by either Mr Hobba or the Group can be made upon giving one month’s written
notice or by the Group immediately upon giving written notice with payment in lieu.
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DIRECTORS’ REPORT (continued)
Remuneration report (audited) – (continued)
-22-
Brightstar Resources Limited
Other transactions and balances with Key Management Personnel
Some Directors and executives hold positions within other entities that cause them to have control or exert significant
influence over the financial or operating policies of those entities. However, these entities did not transact with the Company
during the current and previous reporting periods.
Under mutual agreement, certain Directors and Executives agreed to part payment of their remuneration, which was
deferred and will be settled in either cash or equity at the Company’s discretion. The balance of outstanding amounts
owing to the Directors and Executives as at 30 June 2022 year end is as follows. These amounts are included within
Table 2 as remuneration to the respective Director and Executive:
Table 5: Key Management Personnel balances payable as at 30 June 2022 and 30 June 2021
Transaction
Directors
Yongji Duan
Deferred remuneration payment
William Hobba
Deferred remuneration payment
Other Key Officer
2022
$
2021
$
95,098
94,133
56,841
28,133
Tony Lau (i)
Deferred remuneration payment
-
13,750
(i) Mr Lau resigned on 19 July 2021
END OF AUDITED REMUNERATION REPORT
Signed in accordance with a resolution of the directors made pursuant to s.298 (2) of the Corporations Act 2001.
William Hobba
Managing Director
30 September 2022
AUDITOR’S INDEPENDENCE DECLARATION
-23-
Brightstar Resources Limited
AUDITOR’S INDEPENDENCE DECLARATION
-23-
Brightstar Resources Limited
Brightstar Resources Limited
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 June 2022
-24-
Other income
Remeasurement of Rehabilitation Provision
Mine site expenses
Exploration expenditure
Notes
2(a)
15
2(b)
Consolidated
2022
$
2021
$
150,573
62,060,466
-
3,033,794
(336,813)
(332,002)
(673,934)
(222,722)
Depreciation and amortisation expense
2(c)
(394,942)
(382,456)
Director fees
Impairment expenses
Finance costs
Administration expenses
Consulting expenses
Employee benefits expense
Other expenses
(Loss) / profit before income tax
Income tax
Net (loss) / profit for the year
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
2(d)
2(e)
2(f)
2(f)
2(g)
(255,707)
(151,367)
(47,828)
(32,084)
(957,128)
(1,622,983)
(186,516)
(208,962)
(380,338)
(648,407)
(651,924)
(702,641)
2(f)(g)
(215,693)
(238,776)
(3,950,250)
60,551,860
3
-
-
(3,950,250)
60,551,860
-
-
(3,950,250)
60,551,860
Total comprehensive (loss) / income for the year
(3,950,250)
60,551,860
Basic (loss)/earnings per share per share (cents per share)
Diluted (loss)/earnings per share (cents per share)
5
5
(0.73)
(0.73)
10.25
9.89
The accompanying notes form part of these financial
statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 June 2022
-25-
Brightstar Resources Limited
Consolidated
Notes
2022
$
2021
$
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Other current assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right-of-use asset
Deferred exploration and evaluation expenditure
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Lease liabilities
Borrowings
Provisions
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Borrowings
Provisions
Other financial liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Reserve
Total Equity
The accompanying notes form part of these financial statements
6
7
8
9
10
11
12
13
14
15
13
14
15
16
17
18
1,601,324
985,036
403
25,000
26,142
179
25,000
23,051
1,652,869
1,033,266
86,183
14,908
454,899
13,574
13,270,922
9,313,231
13,372,013
9,781,704
15,024,882
10,814,970
2,040,334
14,907
-
145,225
962,968
15,639
630,000
112,740
2,200,466
1,721,347
-
628,736
-
-
3,111,668
3,044,667
4,434,667
3,715,060
8,175,071
6,759,727
10,375,537
8,481,074
4,649,345
2,333,896
43,254,388
37,857,909
(44,870,886)
(40,920,635)
6,265,842
5,396,622
4,649,344
2,333,896
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 June 2022
-25-
-26-
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 June 2022
Brightstar Resources Limited
Brightstar Resources Limited
Consolidated
Notes
2022
$
2021
$
1,601,324
985,036
Receipts from customers
Cash flows from operating activities
Payments to suppliers and employees
Dividends received
Interest received
Interest on lease liabilities
Government grants received
Consolidated
Notes
2022
$
2021
$
-
131,289
(1,391,789)
(1,129,956)
-
105,867
523
(392)
-
633
(1,969)
50,000
Net cash used in operating activities
6(ii)
(1,391,658)
(844,136)
Cash flows from investing activities
Proceeds from sale of other financial assets
Proceeds from sale of property, plant and equipment
Proceeds from sale of exploration assets
Payments for property, plant and equipment
Payments for exploration and evaluation expenditure
Payments for acquisition of exploration assets
Net cash (used in)/provided by investing activities
Cash flows from financing activities
Repayment of lease liabilities
Payments for share buy-back
Proceeds from capital raising
Capital raising costs
-
-
4,628,618
8,000
10,000
250,000
(27,559)
(161,907)
(2,453,136)
(688,962)
(60,000)
-
(2,530,695)
4,035,749
(17,838)
(16,746)
-
(2,239,864)
4,847,318
(290,839)
-
-
Net cash (used in)/provided by financing activities
4,538,641
(2,256,610)
Net increase/(decrease) in cash held
Cash and cash equivalents at beginning of period
616,288
985,035
Cash and cash equivalents at end of period
6(i)
1,601,323
935,003
50,032
985,035
The accompanying notes form part of these financial statements
Deferred exploration and evaluation expenditure
Total Non-Current Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Other current assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right-of-use asset
Total Assets
Current Liabilities
Trade and other payables
Lease liabilities
Borrowings
Provisions
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Borrowings
Provisions
Other financial liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Reserve
Total Equity
The accompanying notes form part of these financial statements
6
7
8
9
10
11
12
13
14
15
13
14
15
16
17
18
403
25,000
26,142
179
25,000
23,051
1,652,869
1,033,266
86,183
14,908
454,899
13,574
13,270,922
9,313,231
13,372,013
9,781,704
15,024,882
10,814,970
2,040,334
14,907
-
145,225
962,968
15,639
630,000
112,740
2,200,466
1,721,347
-
628,736
-
-
3,111,668
3,044,667
4,434,667
3,715,060
8,175,071
6,759,727
10,375,537
8,481,074
4,649,345
2,333,896
43,254,388
37,857,909
(44,870,886)
(40,920,635)
6,265,842
5,396,622
4,649,344
2,333,896
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
-28-
Brightstar Resources Limited
Brightstar Resources Limited is a company limited by shares, incorporated and domiciled in Australia. The Company is a
for-profit entity. Its registered office and principal place of business is 3/25 Belgravia Street, Belmont, WA 6104.
(a) Basis of preparation of the financial report
The financial report covers Brightstar Resources Limited (“the Company”) and its controlled entities as a group
(together referred to as the “Group”).
This financial report is a general purpose financial report that has been prepared in accordance with the Corporations
Act 2001 and Australian Accounting Standards, Interpretations and other applicable authoritative pronouncements of
the Australian Accounting Standards Board (AASB).
The financial report was approved by the directors on 30 September 2022.
Compliance with IFRS
The financial report also complies with the International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB).
Historical cost convention
The financial report has been prepared under the historical cost convention, as modified by revaluations to fair value
for certain classes of assets and liabilities as described in the accounting policies.
Fair value measurement
For financial reporting purposes, ‘fair value’ is the price that would be received to sell an asset, or paid to transfer a
liability, in an orderly transaction between market participants (under current market conditions) at the measurement
date, regardless of whether that price is directly observable or estimated using another valuation technique.
When estimating the fair value of an asset or liability, the entity uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable inputs. Inputs to valuation techniques used to measure
fair value are categorised into three levels according to the extent to which the inputs are observable:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date.
• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.
• Level 3 inputs are unobservable inputs for the asset or liability.
(b) Going Concern
The financial report has been prepared on a going concern basis, which assumes that the Group will continue in
operation for the foreseeable future.
The Group has recorded a net loss of $3,950,250 (2021: $60,551,860 profit), reported net cash used in operating and
$1,391,658 (2021: outflows of 844,136) and as
that date cash and cash equivalents of $1,601,324
(2021: $985,036).
The directors have prepared a cash flow forecast for the period ending 30 September 2023. It is recognised that
additional funding is required either through the issue of further shares, or convertible notes, or the sale of assets, or
a combination of these activities for the Group to continue to actively explore and develop its mineral properties, until
recommencement of mining and milling operations. The directors may also look to delay the timing of certain budgeted
expenditures in accordance with their development plan.
At the end of the reporting period, the Company reached various agreements with SRHKL in relation to extinguishment
of its existing debts. Once settled the Company will be relieved from the obligation to pay cash to SRHKL to satisfy its
debt and be able to use its existing cash to fund its projects and further progress exploration programs.
The directors have reviewed the business outlook and the assets and liabilities of the Group and are of the opinion
that the use of the going concern basis of accounting is appropriate.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-29-
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Going Concern (continued)
Brightstar Resources Limited
However, the Group acknowledge that the status of going concern relies on the development of the Company’s
projects and subsequent capital raising to support the development. Should the Group be unable to raise further debt
or capital, there exists a material uncertainty that the Group may in the future not be able to continue as a going
concern. The financial report does not include adjustments relating to the recoverability and classification of recorded
asset amounts nor to the amounts and classification of liabilities that might be necessary should the Group not continue
as a going concern.
(c) New and revised accounting standards effective for the current reporting period
The Group has adopted all of the new and amended Standards and Interpretations issued by the Australian Accounting
Standards Board (the AASB) that are relevant to the Group and effective for the current reporting period. The Group
has considered the implications of new and amended Accounting Standards and has determined that their application
to the financial statements is either not relevant or not material.
(d) Accounting standards issued but not yet effective
The Group has considered all Standards and Interpretations issued but not yet effective for the current reporting period
and has determined that their implication to the financial statements is either not relevant or not material.
(d) Principles of consolidation
The consolidated financial statements are those of the consolidated entity (“the Group”), comprising the financial
statements of the parent entity and all of the entities the parent controls. The Group controls an entity where it has the
power, for which the parent has exposure or rights to variable returns from its involvement with the entity, and for which
the parent has the ability to use its power over the entity to affect the amount of its returns.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using
consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies which may
exist.
All inter group balances and transactions, including any unrealised profits or losses have been eliminated on
consolidation. Subsidiaries are consolidated from the date on which control is obtained by the Group and are de
recognised from the date that control ceases.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as non controlling
interests. Non controlling interests are initially recognised either at fair value or at the non controlling interests’
proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition by
acquisition basis. Non controlling interests in the results of subsidiaries are shown separately in the statement of profit
or loss and other comprehensive income and the statement of financial position respectively.
(e) Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements in accordance with AASB requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income
and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis for making the judgements
about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.
The 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 it affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
(i) Significant accounting judgements include:
Exploration and evaluation costs
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These
costs are carried forward in respect of an area that has not at reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active Group
operations in, or relating to, the area of interest are continuing.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-29-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-30-
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Going Concern (continued)
(e) Critical accounting judgements and key sources of estimation uncertainty (continued)
Brightstar Resources Limited
Brightstar Resources Limited
(ii) Significant accounting estimates and assumptions include:
Impairment of exploration and evaluation assets
The ultimate recoupment of the value of exploration and evaluation assets is dependent on the successful development
and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets.
On a regular basis, management consider whether there are indicators as to whether the asset carrying values exceed
their recoverable amounts. This consideration includes assessment of the following:
(a) expiration of the period for which the entity has the right to explore in the specific area of interest with no plans
for renewal;
(b) substantive expenditure on further exploration for and evaluation in the specific area is neither budgeted nor
planned;
(c) exploration for and evaluation activities have not led to the discovery of commercially viable quantities of mineral
resources and the entity has decided to discontinue such activities in the specific area;
(d) sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or
by sale.
Where an impairment indicator is identified, the determination of the recoverable amount requires the use of estimates
and judgement in determining the inputs and assumptions used in determining the recoverable amounts.
The consolidated financial statements are those of the consolidated entity (“the Group”), comprising the financial
The key areas of judgement and estimate include:
- Recent exploration and evaluation results and resource estimates;
-
-
Environmental issues that may impact on the underlying tenements;
Fundamental economic factors that have an impact on the operations and carrying values of assets and
liabilities.
Recoverability of Mine Property and Plant
Certain assumptions are required to be made in order to assess the recoverability of Mine Property and Plant. The
recoverable amount of Mine Property and Plant is the higher of fair value less costs of disposal and value in use. Mine
Property and Plant values are tested on a “Fair value less costs of disposal” as a basis to determine any impairment.
In estimating the fair value of Mine Property and Plant, the Group engages third party qualified valuers to perform the
valuation of Mine Property and Plant.
The key areas of judgement and estimate include:
-- Auction Value of Mine Property and Plant (last performed in July 2017); and
-- Fundamental economic factors that have an impact on the operations and carrying values of assets and liabilities.
Provision for restoration and rehabilitation obligations
The estimated costs of future site rehabilitation and restoration, including heritage preservation where required,
associated with previous mining and/or exploration activity are provided for as and when an obligation arises and are
included in the costs of the related area of interest. These costs include the dismantling and removal of any plant,
equipment and building structures and rehabilitation, where such work is deemed appropriate by the relevant
government authorities and the cost of making safe any remaining aspects of the previous mining operation. The costs
are based on estimates of future costs, current legal requirements and existing technology.
The provision is based on the best available information of costs expected to be incurred at the expiry of the respective
license agreements. Such costs have been provided for at the present value of future expected expenditure discounted
using a rate adjusted for risks specific to the liability. On an ongoing basis the closure liability is remeasured at each
reporting period in line with the changes in time value of money (recognised as a finance cost in profit or loss and an
increase in provision), and changes in estimates of future costs or methods of rehabilitation. Changes in the closure
liability are recognised prospectively.
Certain assumptions are required to be made in determining the amount expected to be incurred to settle its obligations
in relation to restoration and rehabilitation of the mine site. Key assumptions include the amount and timing of future
cash flow estimates.
However, the Group acknowledge that the status of going concern relies on the development of the Company’s
projects and subsequent capital raising to support the development. Should the Group be unable to raise further debt
or capital, there exists a material uncertainty that the Group may in the future not be able to continue as a going
concern. The financial report does not include adjustments relating to the recoverability and classification of recorded
asset amounts nor to the amounts and classification of liabilities that might be necessary should the Group not continue
as a going concern.
(c) New and revised accounting standards effective for the current reporting period
The Group has adopted all of the new and amended Standards and Interpretations issued by the Australian Accounting
Standards Board (the AASB) that are relevant to the Group and effective for the current reporting period. The Group
has considered the implications of new and amended Accounting Standards and has determined that their application
to the financial statements is either not relevant or not material.
(d) Accounting standards issued but not yet effective
The Group has considered all Standards and Interpretations issued but not yet effective for the current reporting period
and has determined that their implication to the financial statements is either not relevant or not material.
(d) Principles of consolidation
statements of the parent entity and all of the entities the parent controls. The Group controls an entity where it has the
power, for which the parent has exposure or rights to variable returns from its involvement with the entity, and for which
the parent has the ability to use its power over the entity to affect the amount of its returns.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using
consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies which may
exist.
All inter group balances and transactions, including any unrealised profits or losses have been eliminated on
consolidation. Subsidiaries are consolidated from the date on which control is obtained by the Group and are de
recognised from the date that control ceases.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as non controlling
interests. Non controlling interests are initially recognised either at fair value or at the non controlling interests’
proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition by
acquisition basis. Non controlling interests in the results of subsidiaries are shown separately in the statement of profit
or loss and other comprehensive income and the statement of financial position respectively.
(e) Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements in accordance with AASB requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income
and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis for making the judgements
about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.
The 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 it affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
(i) Significant accounting judgements include:
Exploration and evaluation costs
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These
costs are carried forward in respect of an area that has not at reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active Group
operations in, or relating to, the area of interest are continuing.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-31-
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e) Critical accounting judgements and key sources of estimation uncertainty (continued)
Brightstar Resources Limited
Share-based payments
The Group measures the cost of equity-settled transactions with suppliers and employees by reference to the fair value
of the goods or services received provided this can be estimated reliably. If a reliable estimate cannot be made the
value of the goods or services is determined indirectly by reference to the fair value of the equity instrument granted.
The fair value of the equity instruments granted is determined using an appropriate option pricing model taking into
account the terms and conditions upon which the instruments were granted. Volatility for these calculations is
determined with reference to the Group’s historical volatility for a comparable or appropriate period. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying
amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Please
refer to Note 18 for further details.
(f)
Income tax
Current income tax expense or revenue is the tax payable on the current period's taxable income based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities.
Deferred tax assets and liabilities are recognised for temporary differences at the applicable tax rates when the assets
are expected to be recovered or liabilities are settled. Deferred tax liabilities are not recognised if they arise from the
initial recognition of goodwill. Deferred income tax is also not recognised if it arises from the initial recognition of an
asset or liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in
equity.
(g) Goods and services tax (GST)
Revenues, expenses and purchased assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost
of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing
and financing activities, which are disclosed as operating cash flows..
(h) Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of three
months or less held at call with financial institutions, and bank overdrafts. Bank overdrafts are shown within borrowings
in current liabilities on the statement of financial position
(i) Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such
cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is
incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the
plant and equipment as a replacement only if it is eligible for capitalisation.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Office furniture and equipment
Plant and equipment
Motor vehicles
5 - 8 years
3 - 5 years
4 - 5 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-31-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-32-
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e) Critical accounting judgements and key sources of estimation uncertainty (continued)
(i) Property, plant and equipment (continued)
Brightstar Resources Limited
Brightstar Resources Limited
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each balance date, with recoverable
amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of plant and equipment is based on the fair value less costs of disposal.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable
amount. The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the statement of profit or loss as impairment expenses.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
Deferred tax assets and liabilities are recognised for temporary differences at the applicable tax rates when the assets
(j) Exploration and evaluation
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)
the rights to tenure of the area of interest are current; and
(ii) 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
exploration of the area of interest, or alternatively, by its sale; or
(b) exploration and evaluation activities in the area of interest have not at the balance date reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised
of assets used in exploration and evaluation activities. General and administrative costs are only included in the
measurement of exploration and evaluation costs where they are related directly to operational activities in a particular
area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the
exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the
relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss
subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount,
but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.
(k) Mine development expenditure
Mine development expenditure represents the accumulation of all exploration and evaluation expenditure incurred in
respect of areas of interest in which a decision to mine has been made. Plant construction and commissioning costs
are included as mine development expenditure until the commissioning phase is completed.
Once commission phase is completed and production commences, all assets under mine development expenditure is
transferred to mine property and plant. As at the date of the financial report, there are no mine development expenditure
recognised by the Group.
Share-based payments
The Group measures the cost of equity-settled transactions with suppliers and employees by reference to the fair value
of the goods or services received provided this can be estimated reliably. If a reliable estimate cannot be made the
value of the goods or services is determined indirectly by reference to the fair value of the equity instrument granted.
The fair value of the equity instruments granted is determined using an appropriate option pricing model taking into
account the terms and conditions upon which the instruments were granted. Volatility for these calculations is
determined with reference to the Group’s historical volatility for a comparable or appropriate period. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying
amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Please
refer to Note 18 for further details.
(f)
Income tax
Current income tax expense or revenue is the tax payable on the current period's taxable income based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities.
are expected to be recovered or liabilities are settled. Deferred tax liabilities are not recognised if they arise from the
initial recognition of goodwill. Deferred income tax is also not recognised if it arises from the initial recognition of an
asset or liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in
equity.
(g) Goods and services tax (GST)
Revenues, expenses and purchased assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost
of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing
and financing activities, which are disclosed as operating cash flows..
(h) Cash and cash equivalents
(i) Property, plant and equipment
Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of three
months or less held at call with financial institutions, and bank overdrafts. Bank overdrafts are shown within borrowings
in current liabilities on the statement of financial position
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such
cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is
incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the
plant and equipment as a replacement only if it is eligible for capitalisation.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Office furniture and equipment
5 - 8 years
Plant and equipment
3 - 5 years
Motor vehicles
4 - 5 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
Brightstar Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-33-
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l) Mine property and plant
Once mine construction is completed, assets from mine development expenditure are transferred to mine property and
plant (which is a sub category in property, plant and equipment). Mine property and plant are stated at cost, less
accumulated depreciation and accumulated losses.
When further development expenditure is incurred in respect of mine property after the commencement of production,
such expenditure is carried forward as part of mine development expenditure only when substantial future economic
benefits are thereby established, otherwise such expenditure is classified as part of the cost of production.
Where mine property and plant is in production, amortisation of mine property and plant is provided on a unit of
production basis, which results in a write off of the cost proportional to the depletion of the proven and probable mineral
reserves. In accordance with its policy, the Group reviews the estimated useful lives of its mine property and plant on
an ongoing basis.
Where the Group’s mine property and plant is in care and maintenance, the Group has impaired assets to its fair value
less cost of disposal and the Group amortises over a straight-line basis to account for the physical wear and tear while
the asset remains idle, over an estimated remaining useful life of 5 years.
The net carrying value of each area of interest is reviewed regularly and to the extent to which this value exceeds its
recoverable amount, the excess is fully provided against or written off in the financial year in which this is determined.
(m) Leases
At the commencement date of a lease (other than leases of 12-months or less and leases of low value assets), the
Group recognises a lease asset representing its right to use the underlying asset and a lease liability representing its
obligation to make lease payments.
Lease assets
Lease assets are initially recognised at cost, comprising the amount of the initial measurement of the lease liability,
any lease payments made at or before the commencement date of the lease, less any lease incentives received, any
initial direct costs incurred by the Group, and an estimate of costs to be incurred by the Group in dismantling and
removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.
Subsequent to initial recognition, lease assets are measured at cost (adjusted for any remeasurement of the associated
lease liability), less accumulated depreciation and any accumulated impairment loss.
Lease assets are depreciated over the shorter of the lease term and the estimated useful life of the underlying asset,
consistent with the estimated consumption of the economic benefits embodied in the underlying asset.
Lease liabilities
Lease liabilities are initially recognised at the present value of the future lease payments (i.e., the lease payments that
are unpaid at the commencement date of the lease). These lease payments are discounted using the interest rate
implicit in the lease, if that rate can be readily determined, or otherwise using the Group’s incremental borrowing rate.
Subsequent to initial recognition, lease liabilities are measured at the present value of the remaining lease payments
(i.e., the lease payments that are unpaid at the reporting date). Interest expense on lease liabilities is recognised in
profit or loss (presented as a component of finance costs). Lease liabilities are remeasured to reflect changes to lease
terms, changes to lease payments and any lease modifications not accounted for as separate leases.
Variable lease payments not included in the measurement of lease liabilities are recognised as an expense when
incurred.
Leases of 12-months or less and leases of low value assets
Lease payments made in relation to leases of 12-months or less and leases of low value assets (for which a lease
asset and a lease liability has not been recognised) are recognised as an expense on a straight-line basis over the
lease term.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-33-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-34-
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l) Mine property and plant
(n) Borrowing costs
Brightstar Resources Limited
Brightstar Resources Limited
Borrowing costs include interest expense calculated using the effective interest method, finance charges in respect of
lease arrangements, and exchange differences arising from foreign currency borrowings to the extent that they are
regarded as an adjustment to interest costs.
Borrowing costs are expensed as incurred, except for borrowing costs incurred as part of the cost of the construction
of a qualifying asset, in which case the costs are capitalised until the asset is ready for its intended use or sale.
(o) Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions
of the instrument. For financial assets, this is equivalent to the date that the Group commits itself to either the purchase
or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value adjusted for transaction costs, except where the instrument is
classified as fair value through profit or loss, in which case transaction costs are immediately recognised as expenses
in profit or loss.
(m) Leases
Classification of financial assets
Financial assets recognised by the Group are subsequently measured in their entirety at either amortised cost or fair
value, subject to their classification and whether the Group irrevocably designates the financial asset on initial
recognition at fair value through other comprehensive income (FVtOCI) in accordance with the relevant criteria in
AASB 9 Financial Instruments.
Classification of financial liabilities
Financial liabilities classified as held-for-trading, contingent consideration payable by the Group for the acquisition of
a business, and financial liabilities designated at FVtPL, are subsequently measured at fair value.
All other financial liabilities recognised by the Group are subsequently measured at amortised cost.
(p) Provisions – Employee benefits
(i) Wages, Salaries and Annual Leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave are recognised in respect of
employees’ services up to the reporting date. They are measured at their nominal values using the remuneration rate
expected to apply at the time of settlement. Liabilities for non-accumulating sick leave are recognised when the leave
is taken and are measured at the rates paid or payable.
(ii) Long Service Leave
The liability for long service leave is recognised and measured at the present value of expected future payments to be
made in respect of services provided by employees up to the reporting. Consideration is given to expected future wage
and salary levels, experience of employee of departures, and period of service.
(q) Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of development
activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and the
amount of the provision can be measured reliably. The estimated future obligations include the costs of abandoning
sites, removing facilities and restoring the affected areas.
The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle
the restoration obligation at the balance date. Future restoration costs are reviewed annually and any changes in the
estimate are reflected in the present value of the restoration provision at each balance date.
The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of the related asset and
amortised on the same basis as the related asset, unless the present obligation arises from the production of inventory
in the period, in which case the amount is included in the cost of production for the period. Changes in the estimate of
the provision for restoration and rehabilitation are treated in the same manner unless they are not expected to be
recovered over the course of the Groups operation where they are recognised in the Statement of Profit or Loss. The
unwinding of the effect of discounting on the provision is recognised as a finance cost rather than being capitalised into
the cost of the related asset.
Once mine construction is completed, assets from mine development expenditure are transferred to mine property and
plant (which is a sub category in property, plant and equipment). Mine property and plant are stated at cost, less
accumulated depreciation and accumulated losses.
When further development expenditure is incurred in respect of mine property after the commencement of production,
such expenditure is carried forward as part of mine development expenditure only when substantial future economic
benefits are thereby established, otherwise such expenditure is classified as part of the cost of production.
Where mine property and plant is in production, amortisation of mine property and plant is provided on a unit of
production basis, which results in a write off of the cost proportional to the depletion of the proven and probable mineral
reserves. In accordance with its policy, the Group reviews the estimated useful lives of its mine property and plant on
an ongoing basis.
Where the Group’s mine property and plant is in care and maintenance, the Group has impaired assets to its fair value
less cost of disposal and the Group amortises over a straight-line basis to account for the physical wear and tear while
the asset remains idle, over an estimated remaining useful life of 5 years.
The net carrying value of each area of interest is reviewed regularly and to the extent to which this value exceeds its
recoverable amount, the excess is fully provided against or written off in the financial year in which this is determined.
At the commencement date of a lease (other than leases of 12-months or less and leases of low value assets), the
Group recognises a lease asset representing its right to use the underlying asset and a lease liability representing its
obligation to make lease payments.
Lease assets
Lease assets are initially recognised at cost, comprising the amount of the initial measurement of the lease liability,
any lease payments made at or before the commencement date of the lease, less any lease incentives received, any
initial direct costs incurred by the Group, and an estimate of costs to be incurred by the Group in dismantling and
removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.
Subsequent to initial recognition, lease assets are measured at cost (adjusted for any remeasurement of the associated
lease liability), less accumulated depreciation and any accumulated impairment loss.
Lease assets are depreciated over the shorter of the lease term and the estimated useful life of the underlying asset,
consistent with the estimated consumption of the economic benefits embodied in the underlying asset.
Lease liabilities
Lease liabilities are initially recognised at the present value of the future lease payments (i.e., the lease payments that
are unpaid at the commencement date of the lease). These lease payments are discounted using the interest rate
implicit in the lease, if that rate can be readily determined, or otherwise using the Group’s incremental borrowing rate.
Subsequent to initial recognition, lease liabilities are measured at the present value of the remaining lease payments
(i.e., the lease payments that are unpaid at the reporting date). Interest expense on lease liabilities is recognised in
profit or loss (presented as a component of finance costs). Lease liabilities are remeasured to reflect changes to lease
terms, changes to lease payments and any lease modifications not accounted for as separate leases.
Variable lease payments not included in the measurement of lease liabilities are recognised as an expense when
Leases of 12-months or less and leases of low value assets
Lease payments made in relation to leases of 12-months or less and leases of low value assets (for which a lease
asset and a lease liability has not been recognised) are recognised as an expense on a straight-line basis over the
incurred.
lease term.
Brightstar Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-35-
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r) Share 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.
(s) Earnings per share
Basic earnings per share (‘EPS’) is calculated as net profit or loss attributable to members of the Company for the
reporting period, after excluding any costs for servicing equity (other than ordinary shares and converting preference
shares classified as ordinary shares for EPS calculation purposes), by the weighted average number of ordinary shares
of the Company, adjusted for any bonus element.
Diluted earnings is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs
associated with dilutive potential ordinary share and the effect on revenues and expenses of conversion, by the
weighted average number of ordinary shares and potential dilutive ordinary shares, adjusted for any bonus element.
(t) Other revenue and other income
Interest revenue is measured in accordance with the effective interest method.
Dividend and other distribution revenue is recognised when the right to receive a dividend or other distribution has
been established. Dividends and other distributions received from associates and joint ventures are accounted for in
accordance with the equity method.
All revenue is measured net of the amount of goods and services tax (GST).
(u) Government grants
The Group recognises stimulus package from the Australian Taxation Office (“ATO”) as a government grant when there
is reasonable assurance that the entity will comply with the conditions attached to them, and the grant will be received.
The amount is recognised as other income in profit or loss.
(v) Events after the reporting date
Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the
reporting period and the date when the financial report is authorised for issue.
The amounts recognised in the financial statements reflect events after the reporting period that provide evidence of
conditions that existed at the reporting date. Whereas, events after the reporting period that are indicative of conditions
that arose after the reporting period (i.e., which did not exist at the reporting date) are excluded from the determination
of the amounts recognised in the financial statements.
(w) Rounding of amounts
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts
in the directors’ report and in the financial report have been rounded to the nearest to the nearest dollar (where
indicated).
Brightstar Resources Limited
Brightstar Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-35-
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
(r) Share Capital
(s) Earnings per share
Basic earnings per share (‘EPS’) is calculated as net profit or loss attributable to members of the Company for the
reporting period, after excluding any costs for servicing equity (other than ordinary shares and converting preference
shares classified as ordinary shares for EPS calculation purposes), by the weighted average number of ordinary shares
of the Company, adjusted for any bonus element.
Diluted earnings is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs
associated with dilutive potential ordinary share and the effect on revenues and expenses of conversion, by the
weighted average number of ordinary shares and potential dilutive ordinary shares, adjusted for any bonus element.
(t) Other revenue and other income
Interest revenue is measured in accordance with the effective interest method.
Dividend and other distribution revenue is recognised when the right to receive a dividend or other distribution has
been established. Dividends and other distributions received from associates and joint ventures are accounted for in
accordance with the equity method.
All revenue is measured net of the amount of goods and services tax (GST).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 2: LOSS BEFORE INCOME TAX EXPENSE
-36-
(a) Other income
Bank interest
Shared service income
Gain/(Loss) from sale of other financial assets
Gain from sale of non-current assets
Gain from sale of exploration assets
Debt forgiven
Expected credit loss
Dividends
Government grant
Finance Income
Other
Consolidated
2022
$
2021
$
385
-
-
-
419
96,065
(1,361,246)
7,912
(2,099)
5,872,106
-
57,252,627
36,674
-
-
113,525
2,088
37,500
105,867
50,000
-
(784)
150,573
62,060,466
(u) Government grants
(v) Events after the reporting date
The Group recognises stimulus package from the Australian Taxation Office (“ATO”) as a government grant when there
is reasonable assurance that the entity will comply with the conditions attached to them, and the grant will be received.
The amount is recognised as other income in profit or loss.
(b) Mine site expenses
Mine site expenditure under care and maintenance
336,813
332,002
Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the
reporting period and the date when the financial report is authorised for issue.
The amounts recognised in the financial statements reflect events after the reporting period that provide evidence of
conditions that existed at the reporting date. Whereas, events after the reporting period that are indicative of conditions
that arose after the reporting period (i.e., which did not exist at the reporting date) are excluded from the determination
of the amounts recognised in the financial statements.
(w) Rounding of amounts
indicated).
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts
in the directors’ report and in the financial report have been rounded to the nearest to the nearest dollar (where
(c) Depreciation and amortisation expense
Mine property and plant (refer to Note 9)
Other property, plant and equipment (refer to Note 9)
Right-of-use assets (refer to Note 10)
(d) Impairment expense
Impairment of deferred exploration expenditure Alpha Mine
(refer to Note 11)
(e) Finance costs
Interest expenses
Unwind of discount – borrowings (refer to Note 14)
Unwind of discount – financial liability (refer to Note 16)
Unwind of discount – rehabilitation provision (refer to Note 15)
358,983
19,404
16,555
394,942
358,984
6,506
16,966
382,456
47,828
47,828
32,084
32,084
58,259
112,261
719,607
67,001
1,240,463
-
382,520
-
957,128
1,622,983
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-37-
NOTE 2: LOSS BEFORE INCOME TAX EXPENSE (continued)
(f) Share-based payments are included within:
Administration expense
Employee benefits expense (refer to Note 18)
Consulting expenses (refer to Note 17)
(g) Employee benefits expense:
Wages and salaries
Superannuation
Share-based payment expense (refer to Note 18)
Other employment related expenses
Brightstar Resources Limited
Consolidated
2022
$
2021
$
-
87,626
150,000
237,626
237,957
22,000
87,626
304,341
651,924
59,850
300,000
427,066
786,916
299,028
25,114
300,000
78,499
702,641
(f) Share-based payments are included within:
Administration expense
Employee benefits expense (refer to Note 18)
Consulting expenses (refer to Note 17)
(g) Employee benefits expense:
Wages and salaries
Superannuation
Share-based payment expense (refer to Note 18)
Other employment related expenses
Consolidated
2022
$
2021
$
-
87,626
150,000
237,626
237,957
22,000
87,626
304,341
651,924
59,850
300,000
427,066
786,916
299,028
25,114
300,000
78,499
702,641
Brightstar Resources Limited
Brightstar Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-37-
NOTE 2: LOSS BEFORE INCOME TAX EXPENSE (continued)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-38-
NOTE 3: INCOME TAX
Consolidated
2022
$
2021
$
(a) Income tax recognised in statement of income
Accounting income/(loss) before tax from continuing operations
(3,920,251)
60,551,860
Income tax expense/(benefit) calculated at an income tax rate of % (2021:30%)
(1,185,075)
18,165,558
Non-deductible expenses:
Non-assessable debt forgiveness income
Franking credits converted to losses
Utilisation of previously unrecognised losses
Unused tax losses and temporary differences not recognised
Income tax expense reported in the statement of comprehensive income
242,293
(11,002)
-
-
953,784
-
468,950
(17,202,038)
(31,760)
(1,400,710)
-
-
(b) Recognised deferred tax balances 30% (2021: 30%)
Deferred tax assets comprise:
Losses offset against future taxable income – revenue
7,390,954
5,952,417
Provision for doubtful debts
Mining assets (plant and equipment)
Provision for rehabilitation
Other business related costs
Other provisions
Accrued expenses
Deferred tax losses not brought to account
Deferred tax liabilities comprise:
Prepayments
Accrued income
Exploration expenditure capitalised
40,242
510,483
933,500
81,159
43,567
117,994
44,041
422,207
906,376
16,130
33,822
29,188
(6,611,451)
(4,714,184)
2,506,448
2,689,997
(4,766)
-
(3,803)
-
(2,501,682)
(2,686,194)
(2,506,448)
(2,689,997)
The tax rate used in the above reconciliation is the corporate tax rate of 30% (2021: 30%) payable by Australian corporate
entities on taxable profits under Australian tax law. The company does not currently qualify as a Small Business Entity and
as such has recognised future deferred tax assets at 30%. The Company has conducted a preliminary review in respect of
losses incurred prior to 4 November 2011 and has determined that they are likely able to be used by meeting the Same
Business Test (SBT) and Continuity of Ownership Test (COT). Losses incurred between 4 November 2011 and the date of
the effectuation of the DECA are able to be utilised under the COT.
(c) Unrecognised deferred tax assets
The Group has unrecognised deferred assets relating to revenue tax losses of $24,636,514 (2021: $19,841,391), capital
tax losses of $287,945 (2021: $287,945) and other deferred tax assets arising from temporary differences of $5,710,010
(2021: $4,714,184).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-39-
Brightstar Resources Limited
NOTE 4: SEGMENT REPORTING
The group has identified its operating segments based on the internal reports that are reviewed and used by the board of
directors in assessing performance and determining the allocation of resources. Reportable segments disclosed are based
on aggregating operating segments, where the segments have similar characteristics. The group’s sole activity is mineral
exploration and resource development wholly within Australia; therefore the Group considers that it has one reportable
segment being mineral exploration with the state of Western Australia.
The reportable segment is represented by the primary statements forming these financial statements.
NOTE 5: EARNINGS PER SHARE
Basic and diluted (loss) / earnings per share:
Total basic (loss) / earnings per share
Total diluted (loss) / earnings per share
Consolidated
2022
2021
Cents per
share
Cents per
share
(0.73)
(0.73)
10.25
9.89
Basic and diluted (loss) / earnings per share
The earnings and weighted average number of ordinary shares used in the calculation
of basic and diluted (loss) / earnings per share is as follows:
(Loss) / Earnings
$
$
(3,950,250)
60,551,860
Weighted average number of ordinary shares for the purposes of basic loss per share
543,711,556
590,814,907
Adjusted weighted average number of ordinary shares for the purposes of diluted loss
per share
543,711,556
612,302,578
Share options are not dilutive as their inclusion would give rise to a reduced loss per share. The above adjusted weighted
average number of shares incorporates an adjustment to the calculation to incorporate the effects of bonus elements
(if any) in relation to rights issues in the current and previous financial year.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Consolidated
2022
$
2021
$
1,601,324
985,036
1,601,324
985,036
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying
periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn
interest at the respective short-term deposit rates.
At 30 June 2022, the Group did not have any undrawn committed borrowing facilities.
Brightstar Resources Limited
Brightstar Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 4: SEGMENT REPORTING
-39-
The group has identified its operating segments based on the internal reports that are reviewed and used by the board of
directors in assessing performance and determining the allocation of resources. Reportable segments disclosed are based
on aggregating operating segments, where the segments have similar characteristics. The group’s sole activity is mineral
exploration and resource development wholly within Australia; therefore the Group considers that it has one reportable
segment being mineral exploration with the state of Western Australia.
The reportable segment is represented by the primary statements forming these financial statements.
NOTE 5: EARNINGS PER SHARE
Consolidated
2022
2021
Cents per
share
Cents per
share
(0.73)
(0.73)
10.25
9.89
Basic and diluted (loss) / earnings per share:
Total basic (loss) / earnings per share
Total diluted (loss) / earnings per share
Basic and diluted (loss) / earnings per share
The earnings and weighted average number of ordinary shares used in the calculation
of basic and diluted (loss) / earnings per share is as follows:
(Loss) / Earnings
$
$
(3,950,250)
60,551,860
Weighted average number of ordinary shares for the purposes of basic loss per share
543,711,556
590,814,907
Adjusted weighted average number of ordinary shares for the purposes of diluted loss
per share
543,711,556
612,302,578
Share options are not dilutive as their inclusion would give rise to a reduced loss per share. The above adjusted weighted
average number of shares incorporates an adjustment to the calculation to incorporate the effects of bonus elements
(if any) in relation to rights issues in the current and previous financial year.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Consolidated
2022
$
2021
$
1,601,324
985,036
1,601,324
985,036
-40-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 6: CASH AND CASH EQUIVALENTS (Continued)
(i) Reconciliation to Cash Flow Statement
Cash and cash equivalents as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of
Financial Position as follows:
Cash and cash equivalents
1,601,324
985,036
(ii) Reconciliation of loss for the year to net cash flows used in operating activities
Consolidated
2022
$
2021
$
Profit/(loss) for the year:
Depreciation and amortisation
Impairment expenses
Exploration expenditure written off
(Gain) / Loss from sale of other financial assets
(Gain) / Loss from sale of exploration assets
(Gain) / Loss from sale of non-current asset
Debt forgiven
Bad debt written-off
Creditor written-off
Finance Income
Unwind of discount – financial liability
Interest on lease liabilities
Other non-cash balance
Equity payment to suppliers and key management personnel
(Increase)/decrease in assets:
Current receivables
Other current assets
Increase/(decrease) in liabilities:
Current payables
Current provisions
Provision for rehabilitation
Net cash used in operating activities
Consolidated
2022
$
2021
$
(3,950,250)
60,551,860
394,942
47,828
673,934
-
2,099
-
-
12,378
(36,674)
(1,673)
720,016
(391)
24,688
237,626
(224)
(3,091)
382,456
32,084
-
1,361,246
(5,872,106)
(7,912)
(35,436,134)
-
(37,500)
-
382,520
1,969
35,531
786,916
35,438
(6,693)
387,648
(20,021,508)
32,485
67,001
(1,391,658)
1,491
(3,033,794)
(844,136)
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying
periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn
interest at the respective short-term deposit rates.
(iii) Non-cash investing and financing activities
At 30 June 2022, the Group did not have any undrawn committed borrowing facilities.
2022
The Group issued 15,000,000 fully paid ordinary shares at $0.046 per share and 20,000,000 unlisted options exercisable
at five cents to Milford Resources Pty Ltd as consideration for the acquisition of tenement E38/3500 and E38/3504. This
amount has been capitalised into deferred exploration and evaluation expenditure at 30 June 2022. Refer to Note 11 for
further details.
The Group also issued 5,172,414 fully paid ordinary shares to Mr Tony Lau as a part payment settlement, and 2,200,000
unlisted options exercisable at five cents to two employees of Brightstar for provision of services. Refer to Note 18 and
Note 21 for further details.
Brightstar Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 6: CASH AND CASH EQUIVALENTS (Continued)
-41-
All the securities issued have been approved by shareholders at the 2021 AGM. Refer to Note 17 and Note 18 for further
details.
2021
The Group issued 4,000,000 fully paid ordinary shares at $0.05 per share to Mining Equities Pty Ltd as consideration for
the acquisition of tenement E38/3438. This amount has been capitalised into deferred exploration and evaluation
expenditure at 30 June 2021.
The Group also issued 30,000,000 and 3,150,000 fully paid ordinary shares to Mr Hobba and Mr Hunt respectively. These
shares were issued for $NIL consideration in lieu of remuneration and reimbursements outstanding to Mr Hobba
($300,000), and in lieu of a portion of Mr Hunt’s remuneration over the next 12 months. These amounts were issued in
November 2020 upon receiving approval for their issue at the AGM.
NOTE 7: TRADE AND OTHER RECEIVABLES (CURRENT)
Trade receivables
Other receivables
NOTE 8: OTHER FINANCIAL ASSETS
Deposit for credit cards
Consolidated
2022
$
2021
$
-
403
403
-
179
179
Consolidated
2022
$
2021
$
25,000
25,000
25,000
25,000
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 6: CASH AND CASH EQUIVALENTS (Continued)
-41-
details.
2021
The Group issued 4,000,000 fully paid ordinary shares at $0.05 per share to Mining Equities Pty Ltd as consideration for
the acquisition of tenement E38/3438. This amount has been capitalised into deferred exploration and evaluation
expenditure at 30 June 2021.
The Group also issued 30,000,000 and 3,150,000 fully paid ordinary shares to Mr Hobba and Mr Hunt respectively. These
shares were issued for $NIL consideration in lieu of remuneration and reimbursements outstanding to Mr Hobba
($300,000), and in lieu of a portion of Mr Hunt’s remuneration over the next 12 months. These amounts were issued in
November 2020 upon receiving approval for their issue at the AGM.
NOTE 7: TRADE AND OTHER RECEIVABLES (CURRENT)
Trade receivables
Other receivables
NOTE 8: OTHER FINANCIAL ASSETS
Deposit for credit cards
Consolidated
2022
$
2021
$
-
403
403
-
179
179
Consolidated
2022
$
2021
$
25,000
25,000
25,000
25,000
All the securities issued have been approved by shareholders at the 2021 AGM. Refer to Note 17 and Note 18 for further
Consolidated
Brightstar Resources Limited
Brightstar Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 9: PROPERTY, PLANT AND EQUIPMENT
-42-
Office
furniture and
equipment
Plant and
equipment Motor vehicles
Mine property
and plant1
$
$
$
$
Total
$
Year ended 30 June 2021
At 1 July 2020, net of accumulated
depreciation and impairment
Additions
Disposal / write-offs
518
1,729
755
717,967
720,969
29,150
(88)
-
-
70,359
-
-
-
99,508
(88)
Depreciation charge for the year
(2,702)
(1,090)
(2,715)
(358,984)
(365,491)
At 30 June 2021, net of accumulated
depreciation and impairment
26,877
639
68,399
358,983
454,899
Year ended 30 June 2022
At 1 July 2021, net of accumulated
depreciation and impairment
Additions
Disposal / write-offs
26,877
639
68,399
358,983
454,898
9,674
-
-
-
-
-
9,674
-
-
Depreciation charge for the year
(9,622)
(639)
(9,145)
(358,983)
(378,389)
At 30 June 2022, net of accumulated
depreciation and impairment
26,928
-
59,253
-
86,183
At 1 July 2021
Cost
Accumulated depreciation and
impairment
95,560
1,161,949
224,228
39,139,173
40,620,910
(68,683)
(1,161,310)
(155,829)
(38,780,190)
(40,166,012)
Net carrying amount
26,877
639
68,399
358,983
454,899
At 30 June 2022
Cost
Accumulated depreciation and
impairment
Net carrying amount
104,543
1,161,949
224,228
39,139,173
40,629,889
(77,615)
(1,161,949)
(164,975)
(39,139,173)
(40,543,710)
26,928
-
59,253
-
86,183
(1) Mine Property and Plant: Since processing of mined ore ceased in January 2012 and toll treatment ceased in
August 2012 and pending its reinstatement, an assessment of the recoverable value of non-current assets in
compliance with AASB 136 was carried out in accordance with assumptions disclosed in Note 1(e)
“Recoverability of mine property and plant” and impairments were recognised. The total impairment value
recognised of $14,941,733 remains unchanged. The Board recognise that the previously impairment value of
$14,941,733 can be written back in future periods.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 10: RIGHT-OF-USE ASSETS
-43-
Cost
Accumulated depreciation
Net carrying amount
Reconciliation of movement in Right-of-Use Assets
Year ended 30 June 2022
Opening carrying amount
Renewed lease
Discount received
Depreciation charge for the year
Closing carrying amount
Brightstar Resources Limited
Consolidated
2022
$
2021
$
65,934
(51,026)
14,908
Office premises
$
14,908
17,890
-
(16,555)
14,908
48,044
(34,471)
13,573
Total
$
14,908
17,890
-
(16,965)
13,574
(1) The Group has one lease relating to its office premises in Perth. The right of use assets do not have an option
to purchase at the end of the term. The lease has been extended for a period of one year, with an expiry of 30
April 2023.
NOTE 11: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of:
Exploration and evaluation expenditure
Balance at beginning of year
Expenditure incurred
Expenditure written off
Impairment of Alpha and Beta mines (2)
Tenements transferred from/(to) held-for-sale (3)
Acquisition of tenements (4)
Balance at end of financial year
Consolidated
2021
2022
$
9,313,231
3,006,429
(532,504)
(47,828)
2,686,636
621,887
(32,220)
(32,084)
-
5,819,012
1,531,594
250,000
13,270,922
9,313,231
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 10: RIGHT-OF-USE ASSETS
-43-
Cost
Accumulated depreciation
Net carrying amount
Reconciliation of movement in Right-of-Use Assets
Year ended 30 June 2022
Opening carrying amount
Renewed lease
Discount received
Depreciation charge for the year
Closing carrying amount
Costs carried forward in respect of:
Exploration and evaluation expenditure
Balance at beginning of year
Expenditure incurred
Expenditure written off
Impairment of Alpha and Beta mines (2)
Tenements transferred from/(to) held-for-sale (3)
Acquisition of tenements (4)
Balance at end of financial year
Consolidated
2022
$
2021
$
Office premises
65,934
(51,026)
14,908
$
-
14,908
17,890
(16,555)
14,908
48,044
(34,471)
13,573
Total
$
14,908
17,890
-
(16,965)
13,574
Consolidated
2021
2022
$
9,313,231
3,006,429
(532,504)
(47,828)
2,686,636
621,887
(32,220)
(32,084)
-
5,819,012
1,531,594
250,000
13,270,922
9,313,231
Brightstar Resources Limited
Brightstar Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-44-
NOTE 11: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE (continued)
(1) The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is
dependent upon the successful development and commercial exploitation or sale of the respective areas.
(2) Mining in Beta and Alpha reached its designed pit depth in prior periods and evaluation is currently underway to
determine the future viability of these areas of interest. Notwithstanding, the balance of expenditure for Beta and
Alpha mines has been treated as impaired until recommencement of mining in these tenements.
(3) Capitalised expenditure relating to retained North tenements were transferred from/(to) assets from held-for-sale.
(4) As announced on 25 October 2021, the Group acquired a two prospective exploration licences within Western
Australia, collectively known as “Comet Well”, from Milford Resources Pty Ltd. The purpose of the acquisition was to
obtain tenure over ground adjacent and contiguous to Brightstar’s existing exploration licences at Alpha and Beta.
Under the terms of the acquisition, the Group paid total consideration of $1,531,594, consisting of:
-
-
$50,000 in cash;
15,000,000 fully paid ordinary shares in the Group, prices at the 10 day VWAP prior to the date of the agreement,
valued at $690,000 based on a 10 day VWAP of $0.046 per share (Note 17);
20,000,000 unlisted options exercisable at $0.05 each with an expiry date of 31 December 2024, valued at
$781,594 utilising a Black-Scholes (Note 18); and
A 1% NSR over Comet Well. No value has been placed on this NSR as the amount is unable to be reliably
estimate, given the early stage of exploration at Comet Well.
-
-
(1) The Group has one lease relating to its office premises in Perth. The right of use assets do not have an option
to purchase at the end of the term. The lease has been extended for a period of one year, with an expiry of 30
April 2023.
Trade payables (1)
Other payables and accruals (2)
NOTE 12: TRADE AND OTHER PAYABLES (CURRENT)
Consolidated
2022
$
830,584
1,209,750
2,040,334
2021
178,001
784,967
962,968
NOTE 11: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
(1) Trade payables are non-interest bearing and are normally settled on 30-day terms.
(2) Other payables include
- $608,997 interest accrued on borrowings. This amount is expected to be waived upon repayment of the principal
amount owing to Great Cortex International Ltd (2021: $550,347). Refer to Note 14 for further information.
- $189,231 outstanding and payable to Directors who mutually agreed with the Group to defer the payment of a
portion of their remuneration, which will be settled in either cash or equity at the Company’s discretion (2021:
$135,309).
- $300,000 Call Option Fee payable to Stone Resources (HK) Limited (SRHKL). On 27 September 2021, the Group
signed a Call Option Deed with SRHKL, under which SRHKL agreed to grant the Group or its nominee an option to
purchase the 3% net smelter royalty (NSR) which is applicable to a substantial portion of the Group’s tenements
holdings.
-$111,522 of other accrued expenses and payable amounts.
This Call Option Deed was expected to be settled seven days after the Group’s 2021 Annual General Meeting,
however the Group is still working through the requirements of shareholder approval. It is envisaged this process
will be resolved prior to 31 October 2022. The exercise price of this Call Option is US$25 million, and the expiry is 5
calendar years since settlement date of this Call Option Deed.
The Call Option Fee will be settled in BTR shares, subject to shareholder approval. SRHKL has no rights to compel
or demand exercise of the Call Option. Purchase of part of the NSR is allowed by the Call Option.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 13: LEASE LIABILITIES
-45-
Current
Non-current
Brightstar Resources Limited
2022
$
2021
$
14,907
15,639
-
-
14,907
15,639
The Group does not face a significant liquidity risk with regards to its lease liabilities. Lease liabilities are monitored within
the Group’s treasury function. The lease liabilities relate to the Group’s office premise lease and is unsecured.
NOTE 14: BORROWINGS
Current
Non-current
Reconciliation of movement in borrowings:
Opening balance
Repayment
Recognise new liability at fair value on date of modification
Unwind of discount
Consolidated
2022
$
2021
$
-
630,000
628,736
628,736
-
630,000
Consolidated
2022
$
630,000
(630,000)
516,475
112,261
628,736
2021
$
630,000
-
-
630,000
Great Cortex International Ltd (Cortex) provided a loan of AUD$630,000 which has been accruing interest at 9.31% per
annum since February 2012.
On 27 September 2021 the Company entered a settlement deed with Cortex (“Cortex Settlement Deed”), agreeing to pay
AUD$630,000 on or before 18 November 2023. Subject to full payment of the AUD$630,000, the original loan agreement
which was executed in September 2012 will be terminated, and all liabilities under that loan agreement including interest
accrued will be deemed to have been discharged.
The Cortex Settlement Deed was accounted for as a substantial modification under Australian Accounting Standards.
Accordingly, the Group de-recognised the existing liability as at the date of the as non-current, and revalued the liability
at its fair value on the date of the modification. This liability has then been subsequently measured at amortised cost. The
financing cost for the period was $112,261.
In June 2022, the Company and Cortex agreed to settle the $630,000 by issuance of 19,090,909 BTR shares at an issue
price of $0.033 per share. This agreement is currently pending shareholder approval.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 13: LEASE LIABILITIES
-45-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
-46-
NOTE 15: PROVISIONS
Brightstar Resources Limited
Brightstar Resources Limited
The Group does not face a significant liquidity risk with regards to its lease liabilities. Lease liabilities are monitored within
the Group’s treasury function. The lease liabilities relate to the Group’s office premise lease and is unsecured.
Current
Non-current
NOTE 14: BORROWINGS
Current
Non-current
Reconciliation of movement in borrowings:
Opening balance
Repayment
Unwind of discount
Recognise new liability at fair value on date of modification
2022
$
2021
$
14,907
15,639
-
-
14,907
15,639
Consolidated
2022
$
2021
$
-
630,000
628,736
628,736
-
630,000
Consolidated
2022
$
630,000
(630,000)
516,475
112,261
628,736
2021
$
630,000
-
-
630,000
Great Cortex International Ltd (Cortex) provided a loan of AUD$630,000 which has been accruing interest at 9.31% per
annum since February 2012.
On 27 September 2021 the Company entered a settlement deed with Cortex (“Cortex Settlement Deed”), agreeing to pay
AUD$630,000 on or before 18 November 2023. Subject to full payment of the AUD$630,000, the original loan agreement
which was executed in September 2012 will be terminated, and all liabilities under that loan agreement including interest
accrued will be deemed to have been discharged.
The Cortex Settlement Deed was accounted for as a substantial modification under Australian Accounting Standards.
Accordingly, the Group de-recognised the existing liability as at the date of the as non-current, and revalued the liability
at its fair value on the date of the modification. This liability has then been subsequently measured at amortised cost. The
financing cost for the period was $112,261.
In June 2022, the Company and Cortex agreed to settle the $630,000 by issuance of 19,090,909 BTR shares at an issue
price of $0.033 per share. This agreement is currently pending shareholder approval.
At 1 July 2021
Current
Non-current
At 30 June 2022
Current
Non-current
Rehabilitation
$
Employee benefits
$
Total
$
-
3,044,667
3,044,667
-
3,111,668
3,111,668
112,740
-
112,740
145,225
-
145,225
112,740
3,044,667
3,157,407
145,225
3,111,668
3,256,893
The provision for rehabilitation represents the present value of estimated costs of site and pit rehabilitation based upon
costs of rehabilitation expected to be incurred at the date the rehabilitation is required and the area of currently disturbed
ground subject to rehabilitation as at balance date.
Reconciliation of movement in provision for rehabilitation:
Balance at beginning of financial year
3,044,667
3,583,061
Consolidated
2022
$
2021
$
Addition
Utilised
Transferred from/(to) Liabilities held for sale
Adjustment based on reassessment
Unwind of discount
Balance at end of financial year
NOTE 16: OTHER FINANCIAL LIABILITIES
Amounts payable under share buy-back
Total other financial liabilities
-
-
-
-
-
-
2,495,400
(3,033,794)
67,001
-
3,111,668
3,044,667
Consolidated
2022
$
4,434,667
4,434,667
2021
$
3,715,060
3,715,060
Following completion of DECA on 18 November 2020, the buy-back consideration for shares bought back included a
deferred payment of $5,400,000 to be paid in cash or shares under the Company’s election by 10 August 2023. As at this
date, and 30 June 2022, the remaining buy-back consideration represents a financial instrument measured at fair value on
day one, then subsequently at amortised cost.
At initial recognition, with no influence over whether shareholders would approve the issue of shares, the Group valued
the liability portion at $3,332,530 (measured first) at net present value, with the residual $2,067,460 being attributed to the
equity component. The remaining liability is initially accounted for at fair value and subsequently measured at amortised
cost. The financing cost for the period was $719,607 (2021 - $382,530)
During the year, the Group reached agreement with the SRHKL to extinguish the $5,400,000 debt in exchange for the
grant of a 1.5% NSR royalty on six tenements which are not covered by the original DECA. The agreement is currently
pending shareholders approval (see Note 21 for further information).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 17: ISSUED CAPITAL
-47-
Ordinary shares issued and fully paid
Brightstar Resources Limited
Consolidated
2022
$
2021
$
43,254,388
37,857,909
Consolidated
2022
Consolidated
2021
No.
$
No.
$
Movement in ordinary shares on issue
Balance at beginning of financial year
439,750,764
37,857,909
836,053,708
51,541,309
Share issues (1)(2)(3)(4)
207,110,105
5,687,318
37,150,000
559,850
Shares repurchase and cancellation (5)
Costs associated with issue of shares
-
-
-
(433,452,944)
(14,243,250)
(290,839)
-
-
Balance at end of financial year
646,860,869
43,254,388
439,750,764
37,857,909
(1) On 8 October 2021, the Company completed the issue by way of placement of 86,937,691 fully paid ordinary
shares in the Company at a price of $0.027 per share to raise $2,347,317 (before costs).
(2) On 1 December 2021, the Company issued 5,172,414 fully paid ordinary shares to Mr Tony Lau as part payment of
settlement for a total value of $150,000. Refer to Note 21 for further information
(3) On 1 December 2021, the Company issued 15,000,000 shares to Milford Resources Pty Ltd, at a price of $0.046
per share, as part consideration for Comet Well. The shares issued, valued at $690,000, are subject to a 12-months
voluntary escrow period from the date of issue. Refer to Note 4 for further information.
(4) On 23 March 2022, the Company completed the issue by way of placement of 100,000,000 fully paid ordinary
shares in the Company at a price of $0.025 per share to raise $2,500,000 (before costs).
(5) On 18 November 2020, upon the completion of the DECA, the Group bought back 433,452,944 fully paid ordinary
shares from SRL and SRHKL at a gross cost of $11,400,000. The net fair value of the consideration which includes
adjustment for the deferred consideration was $9,332,540. These shares have been subsequently cancelled. The
difference between the historical capital amount relating to these shares of $14,243,250 and the fair value of the
consideration, amounting to $4,910,910 has been recognised as an equity reserve.
NOTE 18: RESERVES
Balance at beginning of financial year
Share based payments
Equity reserve (3)
Balance at end of financial year
Consolidated
2022
$
2021
$
5,396,622
8,846
869,220 (1)
477,066 (2)
-
6,265,842
4,910,710
5,396,622
(1) During the reporting period, the Company issued 20,000,000 options exercisable on or before 31 December 2024 to
Milford Resources Pty Ltd as part consideration for acquisition of two exploration licence tenements. The options are
subjected to a 12 months voluntary escrow period from 1 December 2021. Refer to Note 4 for further information.
The fair value of these options granted was calculated by using the Black Scholes Option Pricing Model by applying
the following inputs. The fair value of these options granted, $781,594, has been capitalised as deferred exploration
and evaluation expenditure as at 30 June 2022.
Brightstar Resources Limited
Brightstar Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 17: ISSUED CAPITAL
-47-
Ordinary shares issued and fully paid
Consolidated
2022
$
2021
$
43,254,388
37,857,909
Consolidated
2022
Consolidated
2021
No.
$
No.
$
Movement in ordinary shares on issue
Balance at beginning of financial year
439,750,764
37,857,909
836,053,708
51,541,309
Share issues (1)(2)(3)(4)
207,110,105
5,687,318
37,150,000
559,850
Shares repurchase and cancellation (5)
Costs associated with issue of shares
-
-
-
(433,452,944)
(14,243,250)
(290,839)
-
-
Balance at end of financial year
646,860,869
43,254,388
439,750,764
37,857,909
(1) On 8 October 2021, the Company completed the issue by way of placement of 86,937,691 fully paid ordinary
shares in the Company at a price of $0.027 per share to raise $2,347,317 (before costs).
(2) On 1 December 2021, the Company issued 5,172,414 fully paid ordinary shares to Mr Tony Lau as part payment of
settlement for a total value of $150,000. Refer to Note 21 for further information
(3) On 1 December 2021, the Company issued 15,000,000 shares to Milford Resources Pty Ltd, at a price of $0.046
per share, as part consideration for Comet Well. The shares issued, valued at $690,000, are subject to a 12-months
voluntary escrow period from the date of issue. Refer to Note 4 for further information.
(4) On 23 March 2022, the Company completed the issue by way of placement of 100,000,000 fully paid ordinary
shares in the Company at a price of $0.025 per share to raise $2,500,000 (before costs).
(5) On 18 November 2020, upon the completion of the DECA, the Group bought back 433,452,944 fully paid ordinary
shares from SRL and SRHKL at a gross cost of $11,400,000. The net fair value of the consideration which includes
adjustment for the deferred consideration was $9,332,540. These shares have been subsequently cancelled. The
difference between the historical capital amount relating to these shares of $14,243,250 and the fair value of the
consideration, amounting to $4,910,910 has been recognised as an equity reserve.
NOTE 18: RESERVES
Balance at beginning of financial year
Share based payments
Equity reserve (3)
Balance at end of financial year
Consolidated
2022
$
2021
$
5,396,622
8,846
869,220 (1)
477,066 (2)
-
6,265,842
4,910,710
5,396,622
(1) During the reporting period, the Company issued 20,000,000 options exercisable on or before 31 December 2024 to
Milford Resources Pty Ltd as part consideration for acquisition of two exploration licence tenements. The options are
subjected to a 12 months voluntary escrow period from 1 December 2021. Refer to Note 4 for further information.
The fair value of these options granted was calculated by using the Black Scholes Option Pricing Model by applying
the following inputs. The fair value of these options granted, $781,594, has been capitalised as deferred exploration
and evaluation expenditure as at 30 June 2022.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 18: RESERVES (continued)
-48-
Number of instruments
Date of grant
Share price at grant date
Volatility factor
Risk free rate
Expected life of instrument (years)
Exercise price per instrument
Valuation per instrument
Total fair value of Milford Options
Milford Options
20,000,000
25 October 2021
$0.050
137.21%
0.66%
3 years
$0.050
$0.0391
$781,594
(2) During the reporting period, the Company issued 2,200,00 Loyalty Options, exercisable at $0.05 each, to employees in
recognition of their employment periods with the Company. The options were for a 3 year term and vested immediately.
The fair value of these options granted was calculated by using the Black Scholes Option Pricing Model by applying the
following inputs. An accrued expense recognised for the period in respect of this issue was $87,626.
Number of instruments
Date of grant
Share price at grant date
Volatility factor
Risk free rate
Expected life of instrument (years)
Exercise price per instrument
Valuation per instrument
Total fair value of Loyalty Options
Service Options
2,200,000
29 November 2021
$0.051
140.13%
0.92%
3 years
$0.050
$0.0398
$87,626
(3) On 29 December 2020, the Company issued 12,000,000 Options exercisable on or before 31 December 2023 to
Canaccord Genuity (3 tranches of 4,000,000) for services rendered in relation to the provision of on-going capital
markets strategy. The Options vested immediately. The fair value of these Options granted was calculated by using the
Black Scholes Option Pricing Model by applying the following inputs. The total expense recognised for the period in
respect of this issue was $274,174.
Number of instruments
Date of grant
Expiry date
Share price at grant date
Volatility factor
Risk free rate
Expected life of instrument (years)
Exercise price per instrument
Valuation per instrument
Total expense
Tranche 1
4,000,000
Tranche 2
4,000,000
Tranche 3
4,000,000
1 Sep 2020
1 Sep 2020
1 Sep 2020
31 Dec 2023
31 Dec 2023
31 Dec 2023
$0.024
241.79%
0.27%
3 years
$0.06
$0.0230
$91,936
$0.024
241.79%
0.27%
3 years
$0.08
$0.0228
$91,363
$0.024
241.79%
0.27%
3 years
$0.10
$0.0227
$90,875
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 18: RESERVES (continued)
-49-
Brightstar Resources Limited
(4) On 8 September 2020, the Company agreed to issue 5,000,000 options exercisable on or before three years from the
issue date to PCF Capital Pty Ltd for services rendered in relation to the provision of on-going capital markets strategy.
The options were issued on 22 June 2021 and the fair value of these options was calculated by using the Black
Scholes Option Pricing Model by applying the following inputs. The total expense recognised for the period in respect
of this issue was $152,892.
Number of instruments
Date of grant
Expiry date
Share price at grant date
Volatility factor
Risk free rate
Expected life of instrument (years)
Exercise price per instrument
Valuation per instrument
Total expense
PCF Options
5,000,000
22 June 2021
22 June 2024
$0.032
239.84%
0.28%
3 years
$0.045
$0.0306
$152,892
On 12 February 2021, the Company issued 1,000,000 Options exercisable on or before 12 February 2024 as part
consideration for the acquisition of an exploration licence tenement. The total expense recognised for the period
in respect of this issue was $50,000.
Share-based payments reserve
Balance at beginning of financial year
Options issued
Balance at end of financial year
(3) Nature and Purpose of Reserves
Consolidated
2022
$
485,912
869,220
1,355,132
2021
$
8,846
477,066
485,912
Share-based payments reserve
This reserve is used to record the value of equity benefits provided to employees and unrelated parties for services or
acquisition.
Equity reserve
This reserve was created to record the difference between the fair value of the buy-back consideration and the
historical issue value of the buy-back shares upon completion of the DECA.
NOTE 19: FINANCIAL INSTRUMENTS
(a) Capital risk management
The capital structure of the Group consists of debt, cash and cash equivalents and equity attributable to equity holders of
the parent, comprising issued capital, reserves and retained earnings.
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as tax
and general administrative outgoings.
Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and the
risks associated with each class of capital.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 18: RESERVES (continued)
-49-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 19: FINANCIAL INSTRUMENTS (continued)
-50-
Brightstar Resources Limited
Brightstar Resources Limited
(4) On 8 September 2020, the Company agreed to issue 5,000,000 options exercisable on or before three years from the
issue date to PCF Capital Pty Ltd for services rendered in relation to the provision of on-going capital markets strategy.
The options were issued on 22 June 2021 and the fair value of these options was calculated by using the Black
Scholes Option Pricing Model by applying the following inputs. The total expense recognised for the period in respect
of this issue was $152,892.
Number of instruments
Date of grant
Expiry date
Volatility factor
Risk free rate
Share price at grant date
Expected life of instrument (years)
Exercise price per instrument
Valuation per instrument
Total expense
PCF Options
5,000,000
22 June 2021
22 June 2024
$0.032
239.84%
0.28%
3 years
$0.045
$0.0306
$152,892
On 12 February 2021, the Company issued 1,000,000 Options exercisable on or before 12 February 2024 as part
consideration for the acquisition of an exploration licence tenement. The total expense recognised for the period
in respect of this issue was $50,000.
Consolidated
2022
$
485,912
869,220
1,355,132
2021
$
8,846
477,066
485,912
Share-based payments reserve
Balance at beginning of financial year
Options issued
Balance at end of financial year
(3) Nature and Purpose of Reserves
Share-based payments reserve
acquisition.
Equity reserve
NOTE 19: FINANCIAL INSTRUMENTS
(a) Capital risk management
This reserve is used to record the value of equity benefits provided to employees and unrelated parties for services or
This reserve was created to record the difference between the fair value of the buy-back consideration and the
historical issue value of the buy-back shares upon completion of the DECA.
The capital structure of the Group consists of debt, cash and cash equivalents and equity attributable to equity holders of
the parent, comprising issued capital, reserves and retained earnings.
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as tax
and general administrative outgoings.
risks associated with each class of capital.
Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and the
(b) Categories of financial instruments
Financial assets
Cash and cash equivalents (Note 6)
Trade and receivables (Note 7)
Financial liabilities
Trade and other payables (Note 12)
Lease liabilities (Note 13)
Borrowings (Note 14)
Other financial liabilities (Note 16)
(c) Market risk
Consolidated
2022
$
2021
$
1,601,324
985,036
403
179
2,040,334
14,907
628,736
962,698
15,639
630,000
4,434,667
3,715,060
The Group’s mining operations were under care and maintenance throughout the current year and therefore not exposed
to market risk.
(d) Foreign currency risk management
The Group does not have any material exposure to foreign currency risk, other than its impact on the economy and
commodity price generally.
(e) Credit risk management
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the counterparty by failing to
discharge an obligation.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at the reporting date of
recognised financial assets is the carrying amount of those assets, net of any allowance for credit losses, as disclosed in
consolidated statement of financial position and notes to the consolidated financial statements.
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The credit risk on liquid
funds is limited because the counterparties are banks with a minimum credit rating of AA assigned by reputable credit
rating agencies. The Group’s maximum exposure to credit risk at the reporting date was. The Group does not have any
other material credit risk exposure to any single counterparty or group of counterparties under financial instruments entered
into by the group.
(f) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate liquidity
risk management framework for the management of the Group’s short, medium and long-term funding and liquidity
management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and
reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles
of financial assets and liabilities.
The following table details the company’s and the Group’s expected maturity for its non-derivative financial liabilities. These
have been drawn up based on undiscounted contractual maturities of the financial assets including interest that will be
earned on those assets except where the Group anticipates that the cash flow will occur in a different period.
-51-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 19: FINANCIAL INSTRUMENTS (continued)
(f) Liquidity risk management (continued)
Brightstar Resources Limited
Consolidated
Weighted
Average
Interest
rate
Less than 1
month
1 – 3 Months
3 months – 1
year
1 – 2 years
2 – 5 years
%
$
$
$
$
$
2022
Non-interest bearing
2,040,334
Interest bearing loans
9.31%
Lease liabilities
Other financial
liabilities
4.91%
19.37%
-
1,490
-
-
-
-
-
-
630,000 (1)
2,981
10,435
-
-
- 5,400,000 (2)
2,041,824
2,981
10,435
6,030,000
2021
Non-interest bearing
962,968
Interest bearing loans
8.49%
630,000 (1)
-
-
-
-
Lease liabilities
4.91%
1,348
2,696
11,595
Other financial liabilities
19.37%
-
-
-
1,594,316
2,696
11,595
-
-
-
-
-
-
-
-
-
-
-
-
-
5,400,000
5,400,000
(1) During the year, the Company signed a settlement deed with Great Cortex to extend the repayment of the principal
amount to 18 November 2023 and waive all accrued interest (repayable on demand and included in trade and other
payables classified under non-interest bearing above) owing. A Deed of Variation was subsequently signed to allow
the loan principal settled in equity, subject to shareholders approval. Refer to Note 22 for further details.
(2) During the year, the Group reached agreement with the SRHKL to extinguish the $5,400,000 debt in exchange for
the grant of a 1.5% NSR royalty on six tenements which are not covered by the original DECA. The agreement is
currently pending shareholders approval (see Note 21 for further information).
(g) Commodity price risk
The Group’s mining operations were under care and maintenance throughout the current year and therefore not exposed
to commodity risk.
Brightstar Resources Limited
Brightstar Resources Limited
-51-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 19: FINANCIAL INSTRUMENTS (continued)
(f) Liquidity risk management (continued)
Consolidated
Weighted
Average
Interest
rate
%
Less than 1
3 months – 1
month
1 – 3 Months
year
1 – 2 years
2 – 5 years
$
$
$
$
$
Non-interest bearing
2,040,334
Interest bearing loans
9.31%
630,000 (1)
-
-
1,490
2,981
10,435
- 5,400,000 (2)
Lease liabilities
Other financial
liabilities
4.91%
19.37%
2,041,824
2,981
10,435
6,030,000
2022
2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Non-interest bearing
962,968
Interest bearing loans
8.49%
630,000 (1)
Lease liabilities
4.91%
1,348
2,696
11,595
Other financial liabilities
19.37%
-
1,594,316
2,696
11,595
5,400,000
5,400,000
(1) During the year, the Company signed a settlement deed with Great Cortex to extend the repayment of the principal
amount to 18 November 2023 and waive all accrued interest (repayable on demand and included in trade and other
payables classified under non-interest bearing above) owing. A Deed of Variation was subsequently signed to allow
the loan principal settled in equity, subject to shareholders approval. Refer to Note 22 for further details.
(2) During the year, the Group reached agreement with the SRHKL to extinguish the $5,400,000 debt in exchange for
the grant of a 1.5% NSR royalty on six tenements which are not covered by the original DECA. The agreement is
currently pending shareholders approval (see Note 21 for further information).
(g) Commodity price risk
to commodity risk.
The Group’s mining operations were under care and maintenance throughout the current year and therefore not exposed
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 19: FINANCIAL INSTRUMENTS (continued)
-52-
(h) Fair values
Set out below is a comparison by category of carrying amounts and fair values of all of the Group's financial instruments
recognised in the financial statements.
Carrying Amount
Fair Value
2022
$
2021
$
2022
$
2021
$
Financial Assets
Cash and cash equivalents
1,601,324
985,036
1,601,324
985,036
Trade and other receivables - current
403
179
403
179
Financial Liabilities
Trade and other payables
Lease liabilities
Borrowings
2,040,334
14,907
628,736
962,698
15,639
630,000
2,040,334
14,907
628,736
962,698
15,639
630,000
Other financial liabilities
4,434,667
3,715,060
4,434,667
3,715,060
NOTE 20: COMMITMENTS AND CONTINGENCIES
Exploration commitments
The Group has an expenditure commitment of $731,720 for the year 2022-2 to sustain current tenements under lease from
the Department of Mines, Industry Regulation and Safety (DMIRS). The expenditure commitment includes annual
tenement rentals of $108,977 (2021: $124,702).
Capital expenditure commitments
The Directors are not aware of any other commitments from the Group’s operations as at 30 June 2022.
Contingencies
The Group will pay SRHKL 3% net smelter return (“NSR”) royalty on gold produced from most of the tenements listed in
the Tenement Schedule in the Group’s 2020 Annual Report. On 27 September 2021, the Group signed a Call Option Deed
with SRHKL, under which SRHKL agreed to grant BTR or its nominee an option to purchase the 3% NSR. The exercise
price of this Call Option is US$25 million, and the expiry is 5 calendar years since settlement date of this Call Option Deed.
An Option Fee of $300,000 is payable to SRHKL on the settlement date. Equity settlement of the Option Fee is currently
pending shareholders’ approval. The exercise price, if exercised, can be settled in cash and/or BTR shares at the discretion
of the Board. SRHKL has no rights to compel or demand exercise of the Call Option. Purchase of part of the NSR is allowed
by the Call Option.
At end of the reporting period, the Group also agreed to grant a 1.5% NSR over six tenements, which are not covered by
the original DECA, to SRHKL (“New Royalty”), in compensation for extinguishing the deferred DECA payment of
$5,4000,000 (see Note 16), subject to shareholder approval. Total payable under the New Royalty is capped $16,200,000.
As part consideration for acquisition of exploration licences E38/3438, the Group agreed to pay Mining Equities Pty Ltd 1%
NSR on minerals sold from the tenement.
Exploration licence E38/3279 is subject to 1% NSR on minerals sold from the tenement.
During the reporting period, the Group acquired two prospective exploration licences within Western Australia, E38/3500
and E38/3504 (Comet Well), from Milford Resources Pty Ltd. According to the acquisition agreement, Milford Resources
Pty Ltd is entitled to a 1% net smelter return (NSR) royalty over the Comet Well tenements.
There were no other contingencies as at 30 June 2022 other than already disclosed.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 21: RELATED PARTY DISCLOSURE
-53-
Brightstar Resources Limited
During the interim period, no options and/or shares were issued to the Directors.
(a) Individual Directors and executives compensation disclosures
Apart from the details disclosed in this Note, no Director has entered into a contract with the Group since the end of the
previous financial year.
(b) Subsidiaries
Brightstar Resources Limited is the ultimate Australian parent entity and ultimate parent of the Group.
The consolidated financial statements include the financial statements of Brightstar Resources Limited and the
subsidiaries listed in the following table.
Name
Country of
% Equity Interest
Incorporation
2022
2021
Desert Exploration Pty Ltd
Australia
100%
100%
(c) Other key management personnel and director transactions
Purchases from and sales to related parties are made on terms equivalent to those that prevail in arm’s length transactions.
During the year, the Group had entered into the following transactions with related parties.
On 27 September 2021, the Group signed a Call Option Deed with Stone Resources (HK) Limited (SRHKL), under which
SRHKL agreed to grant the Group or its nominee an option to purchase the 3% net smelter royalty (NSR) which is
applicable to a substantial portion of the Group’s tenements holdings. SRHKL is a related party of the Company by virtue
of Mr Yongji Duan being a director of both SRHKL and the Company.
This Call Option Deed is expected to be effective by 25 October 2022 once shareholder approval is obtained. The exercise
price of this Call Option is US$25 million, and the expiry is 5 calendar years following shareholder approval.
An Option Fee of $300,000 is payable to SRHKL on the settlement date and the Group has elected to pay this fee via the
issue of shares. The exercise price, if exercised, can be settled in cash and/or BTR shares at the discretion of the Board.
SRHKL has no rights to compel or demand exercise of the Call Option. Purchase of part of the NSR is allowed by the Call
Option.
On 27 September 2021, the Group executed two Settlement Deeds in relation to an outstanding liability owing to Great
Cortex International Limited (“Great Cortex”), in which Mr Duan was a director (Mr. Duan ceased to be a Director of Great
Cortex before 30 June 2021), and amounts owed to its former Company Secretary Mr Tony Lau. Under the Settlement
Deeds:
i.
The Group will repay the loan principal of $630,000 in cash to Great Cortex on or before 18 November 2023. All
related expenses and amounts owing, including accrued interest payments, will be waived once Brightstar meets
its obligations under the Settlement Deed.
At end of reporting period, the above loan settlement agreement was varied and both parties agreed to settle the
$630,000 in BTR shares instead of cash, subject to shareholder approval.
ii.
A settlement sum of $300,000 will be paid to Mr Tony Lau, in cash and/or shares at the Group’s discretion.
With shareholder’ approval obtained at the Group’s 2021 AGM, 5,172,414 shares have been issued to Mr Tony
Lau as part payment under the Settlement Deed, with a further $150,000 paid in cash to Mr Tony Lau during the
period.
iii.
All claims between the Parties relating to the past conduct of the Parties are settled in accordance with the terms
of the Deeds.
At the end of the reporting period, the Group entered into a deed of variation of the Revised Debt and Equity Compromise
Agreement (DECA) with SRHKL. It was agreed that the $5,400,000 debt owed to SRHKL under the DECA will be
distinguished in exchange for the grant of a 1.5% NSR royalty on six tenements which are not covered by the original
DECA (“New Royalty”). Total payable under the New Royalty is capped at $16,200,000.
Other than as outlined above, the Group did not enter into any further related party transactions with the Director, key
management personnel or their related entities.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 21: RELATED PARTY DISCLOSURE
-53-
During the interim period, no options and/or shares were issued to the Directors.
(a) Individual Directors and executives compensation disclosures
Apart from the details disclosed in this Note, no Director has entered into a contract with the Group since the end of the
previous financial year.
(b) Subsidiaries
Brightstar Resources Limited is the ultimate Australian parent entity and ultimate parent of the Group.
The consolidated financial statements include the financial statements of Brightstar Resources Limited and the
subsidiaries listed in the following table.
Name
Country of
% Equity Interest
Incorporation
2022
2021
Desert Exploration Pty Ltd
Australia
100%
100%
(c) Other key management personnel and director transactions
Purchases from and sales to related parties are made on terms equivalent to those that prevail in arm’s length transactions.
During the year, the Group had entered into the following transactions with related parties.
On 27 September 2021, the Group signed a Call Option Deed with Stone Resources (HK) Limited (SRHKL), under which
SRHKL agreed to grant the Group or its nominee an option to purchase the 3% net smelter royalty (NSR) which is
applicable to a substantial portion of the Group’s tenements holdings. SRHKL is a related party of the Company by virtue
of Mr Yongji Duan being a director of both SRHKL and the Company.
This Call Option Deed is expected to be effective by 25 October 2022 once shareholder approval is obtained. The exercise
price of this Call Option is US$25 million, and the expiry is 5 calendar years following shareholder approval.
An Option Fee of $300,000 is payable to SRHKL on the settlement date and the Group has elected to pay this fee via the
issue of shares. The exercise price, if exercised, can be settled in cash and/or BTR shares at the discretion of the Board.
SRHKL has no rights to compel or demand exercise of the Call Option. Purchase of part of the NSR is allowed by the Call
On 27 September 2021, the Group executed two Settlement Deeds in relation to an outstanding liability owing to Great
Cortex International Limited (“Great Cortex”), in which Mr Duan was a director (Mr. Duan ceased to be a Director of Great
Cortex before 30 June 2021), and amounts owed to its former Company Secretary Mr Tony Lau. Under the Settlement
Option.
Deeds:
i.
The Group will repay the loan principal of $630,000 in cash to Great Cortex on or before 18 November 2023. All
related expenses and amounts owing, including accrued interest payments, will be waived once Brightstar meets
its obligations under the Settlement Deed.
At end of reporting period, the above loan settlement agreement was varied and both parties agreed to settle the
$630,000 in BTR shares instead of cash, subject to shareholder approval.
ii.
A settlement sum of $300,000 will be paid to Mr Tony Lau, in cash and/or shares at the Group’s discretion.
With shareholder’ approval obtained at the Group’s 2021 AGM, 5,172,414 shares have been issued to Mr Tony
Lau as part payment under the Settlement Deed, with a further $150,000 paid in cash to Mr Tony Lau during the
period.
of the Deeds.
iii.
All claims between the Parties relating to the past conduct of the Parties are settled in accordance with the terms
At the end of the reporting period, the Group entered into a deed of variation of the Revised Debt and Equity Compromise
Agreement (DECA) with SRHKL. It was agreed that the $5,400,000 debt owed to SRHKL under the DECA will be
distinguished in exchange for the grant of a 1.5% NSR royalty on six tenements which are not covered by the original
DECA (“New Royalty”). Total payable under the New Royalty is capped at $16,200,000.
Brightstar Resources Limited
Brightstar Resources Limited
-54-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 22: PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Financial performance
30 June 2022
$
30 June 2021
$
1,652,869
1,033,266
13,372,013
9,901,812
15,024,882
10,935,078
2,200,466
8,175,071
10,375,537
1,721,347
6,759,727
8,481,074
43,254,388
37,857,909
(44,883,720)
(40,933,470)
6,265,842
4,636,510
5,396,622
2,321,061
30 June 2022
$
30 June 2021
$
Total loss and other comprehensive income for the year (after tax)
(3,950,250)
60,551,860
Commitments and Contingencies of the parent entity
Commitments and contingencies of the parent entity are the same as those of the group (refer Note 21).
NOTE 23: EVENTS AFTER THE BALANCE DATE
Subsequent to the financial year end, the Company has scheduled a General Meeting for 17 October 2022.
There were no other significant events occurring after balance sheet date requiring disclosure other than already disclosed.
NOTE 24: AUDITOR’S REMUNERATION
During the financial year the following fees were paid or payable for services provided by Pitcher Partners BA&A Pty Ltd,
the auditor of the company, and its related entity.
Audit services - Pitcher Partners BA&A Pty Ltd
-
Audit or review of the financial statements
40,600
39,500
Consolidated
2022
$
2021
$
Other than as outlined above, the Group did not enter into any further related party transactions with the Director, key
management personnel or their related entities.
Other services - Pitcher Partners Accountants & Advisors WA Pty Ltd
-
Taxation compliance services
18,400
8,000
59,000
47,500
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 25: DIRECTORS AND EXECUTIVES DISCLOSURES
-55-
Brightstar Resources Limited
Directors
(a) Details of Key Management Personnel
(i)
William Hobba
Yongji Duan
Josh Hunt
Managing Director
Non-Executive Chairman
Non-Executive Director
Other Key Officer
(ii)
Luke Wang
Tony Lau
Company Secretary
Joint Company Secretary (resigned on 19 July 2021)
(b) Other transactions and balances with Key Management Personnel
Some Directors and executives hold positions within other entities which cause them to have control or exert significant
influence over the financial or operating policies of those entities.
The following balances were payable at balance sheet date:
Transaction
Directors
Yongji Duan
Deferred remuneration payment (1)
William Hobba
Deferred remuneration payment (1)
Other Key Officer
2022
$
2021
$
95,098
94,133
56,841
28,133
Tony Lau (2)
Deferred remuneration payment (1)
-
13,750
(1) Under mutual agreement, part payment of the remuneration has been deferred and will be settled in either
cash or equity at the Company’s discretion.
(2) Mr Lau resigned on 19 July 2021
(c) Key Management Personnel Compensation
Refer to the Remuneration Report contained in the directors’ report for details of the remuneration paid or payable to
each member of the Group’s Key Management Personnel (KMP) for the year ended 30 June 2022.The totals of
remuneration paid to key management personnel of the Company and the group during the year are as follows:
(including deferred
639,130
670,385
2022
$
2021
$
Short
remuneration payment)
term employee benefits
Post-employment benefits
Share-based payments
Total key management personnel compensation
22,000
189,830
850,960
15,634
360,000
1,046,019
Brightstar Resources Limited
Brightstar Resources Limited
-56-
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Brightstar Resources Limited (the ‘Company’):
a.
the accompanying financial statements, notes and the additional disclosures of the Group are in accordance
with the Corporations Act 2001 including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
for the year then ended; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001; and
b.
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
become due and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2022.
This declaration is signed in accordance with a resolution of the Board of Directors pursuant to S.295 (5) of the Corporations
Act 2001.
William Hobba
Managing Director
Dated this 30th day of September, 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2022
NOTE 25: DIRECTORS AND EXECUTIVES DISCLOSURES
-55-
(a) Details of Key Management Personnel
(i)
Directors
William Hobba
Yongji Duan
Josh Hunt
Managing Director
Non-Executive Chairman
Non-Executive Director
(ii)
Other Key Officer
Luke Wang
Tony Lau
Company Secretary
Joint Company Secretary (resigned on 19 July 2021)
(b) Other transactions and balances with Key Management Personnel
Some Directors and executives hold positions within other entities which cause them to have control or exert significant
influence over the financial or operating policies of those entities.
The following balances were payable at balance sheet date:
Transaction
William Hobba
Deferred remuneration payment (1)
Deferred remuneration payment (1)
Directors
Yongji Duan
Other Key Officer
2022
$
2021
$
95,098
94,133
56,841
28,133
Tony Lau (2)
Deferred remuneration payment (1)
-
13,750
(1) Under mutual agreement, part payment of the remuneration has been deferred and will be settled in either
cash or equity at the Company’s discretion.
(2) Mr Lau resigned on 19 July 2021
(c) Key Management Personnel Compensation
Refer to the Remuneration Report contained in the directors’ report for details of the remuneration paid or payable to
each member of the Group’s Key Management Personnel (KMP) for the year ended 30 June 2022.The totals of
remuneration paid to key management personnel of the Company and the group during the year are as follows:
Short
term employee benefits
(including deferred
639,130
670,385
remuneration payment)
Post-employment benefits
Share-based payments
Total key management personnel compensation
2022
$
2021
$
22,000
189,830
850,960
15,634
360,000
1,046,019
INDEPENDENT AUDIT’S REPORT
-57-
Brightstar Resources Limited
INDEPENDENT AUDIT’S REPORT
-57-
INDEPENDENT AUDIT’S REPORT
-58-
Brightstar Resources Limited
Brightstar Resources Limited
INDEPENDENT AUDIT’S REPORT
-59-
Brightstar Resources Limited
INDEPENDENT AUDIT’S REPORT
INDEPENDENT AUDIT’S REPORT
-59-
-60-
Brightstar Resources Limited
Brightstar Resources Limited
INDEPENDENT AUDIT’S REPORT
-61-
Brightstar Resources Limited
INDEPENDENT AUDIT’S REPORT
-61-
INDEPENDENT AUDIT’S REPORT
-62-
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
CORPORATE GOVERNANCE STATEMENT
-63-
The Company’s charters, policies and procedures are regularly reviewed and updated to comply with law and best practice.
These charters and policies as well as the Company’s Corporate Governance Statement can be viewed on the Company’s
website located at www.brightstarresources.com.au. The Company is committed to applying the ASX Corporate
Governance Council’s Corporate Governance Principles (4th Edition) (ASX Principles and Recommendations) and the
Corporate Governance Statement discloses the extent to which the entity has followed the recommendations set by the
ASX Corporate Governance Council during the financial year ended 30 June 2022.
The Company’s charters, policies and procedures are regularly reviewed and updated to comply with law and best practice.
These charters and policies as well as the Company’s Corporate Governance Statement can be viewed on the Company’s
website located at www.brightstarresources.com.au. The Company is committed to applying the ASX Corporate
Governance Council’s Corporate Governance Principles (4th Edition) (ASX Principles and Recommendations) and the
Corporate Governance Statement discloses the extent to which the entity has followed the recommendations set by the
ASX Corporate Governance Council during the financial year ended 30 June 2022.
CORPORATE GOVERNANCE STATEMENT
-63-
ASX ADDITIONAL INFORMATION
-64-
Brightstar Resources Limited
Brightstar Resources Limited
Additional information required by the Australian Stock Exchange Limited and not disclosed elsewhere in this report is set
out below. This information is effective as at 3 October 2022.
Distribution of Shares
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 over
Rounding Total
Number of Holders
Securities Held
159
216
248
920
455
1,998
19,988
667,458
2,041,498
36,687,641
607,444,284
646,860,869
There are 1,030 shareholders holding unmarketable parcels represented by 9,801,597 shares.
Top 20 Largest Shareholders
Shareholder
Ms Sandra Wheeler
Tyson Resources Pty Ltd
Mr Yongji Duan
Chen Yingliu
Mr Lieven Bert Frans Bouckaert + Mrs Priscilla Lee Bouckaert
Chetan Enterprises Pty Ltd
Hsbc Custody Nominees (Australia) Limited
Ms Christabel Jayne Brand
Estate Late Yong Han
Scorpius Holdings Pty Ltd
Delphi Unternehmensberatung Aktiengesellschaft
Las Olas Investments Pty Ltd
Mr Tong Woon Teo
Mr Michael Ruane
Norfolk Blue Pty Ltd
Mr Bradley Keith Moir
Mrs Marika Jane Dowdeswell
Mr Dale Kenneth West
Wenhua Shan
Mr Wayne Richard Lonergan
Total Top 20 Holders
Total Remaining Holders
Total Ordinary Shares on Issue
Shares Held
% of Issued Capital
68,727,775
39,979,978
31,449,497
30,303,030
24,990,118
16,000,000
15,397,418
14,100,000
13,908,219
12,736,014
12,000,000
9,500,000
7,000,000
6,800,000
5,769,087
5,536,344
5,346,777
5,007,239
5,000,400
4,765,624
334,317,520
312,543,349
646,860,869
10.62
6.18
4.86
4.68
3.86
2.47
2.38
2.18
2.15
1.97
1.86
1.47
1.08
1.05
0.89
0.86
0.83
0.77
0.77
0.74
51.68
48.32
100.00
Substantial Shareholders
Name of Substantial Holders
Mr William Hobba
Mr Michael Ruane
Shares Held
% of Issued Capital
68,727,775
49,803,666
10.62
7.70
-65-
ASX ADDITIONAL INFORMAITON (Continued)
Brightstar Resources Limited
Voting Rights
One vote for each ordinary share held in accordance with the Company’s Memorandum and Articles of Association.
Unlisted options do not carry any voting rights.
On-Market Buy-Back
There is no current on-market buy-back.
Restricted Securities
Class of Restricted Securities
Number of Securities
Date Escrow Period Ends
Ordinary shares under escrow
15,000,000
1 December 2022
Unquoted Securities
Class
Number of
Securities
Number of
Holders
Holder Name
Unlisted options expiring
on 09/04/2023 @ $0.01
1,5000,000
1 Scorpius Holdings Pty Ltd
Holding
Balance
%
15,000,000
100%
Unlisted options expiring
on 31/12/2023 @ $0.061
Unlisted options expiring
on 31/12/2023 @ $0.08
Unlisted options expiring
on 31/12/2023 @ $0.10
Unlisted options expiring
on 12/02/2024 @ $0.10
Unlisted options expiring
on 22/06/2024 @ $0.045
4,000,000
1 CG Nominees (Australia) Pty Ltd
4,000,000
100%
4,000,000
1 CG Nominees (Australia) Pty Ltd
4,000,000
100%
4,000,000
1 CG Nominees (Australia) Pty Ltd
4,000,000
100%
1,000,000
1 Mining Equities Pty Ltd
1,000,000
100%
5,000,000
4 Mr Michael Sperinck
2,500,000
50%
Others (less than 20%) *
Unlisted options expiring
on 01/12/2024 @ $0.050
2,200,000
2 Mr Craig Wales
Mr Yafei Wang
Unlisted options expiring
on 31/12/2024 @ $0.050
20,000,000
2 Ms Christabel Jayne Brand
Others (less than 20%) *
2,500,000
1,200,000
1,000,000
18,800,000
50%
55%
45%
94%
1,200,000
6%
* For a holder who holds less than 20% of the equity securities in an unquoted class, the name of the holder and number
of equity securities held are not required to be disclosed in the annual report.
ASX ADDITIONAL INFORMAITON (Continued)
-65-
Voting Rights
Unlisted options do not carry any voting rights.
On-Market Buy-Back
There is no current on-market buy-back.
Restricted Securities
Class of Restricted Securities
Number of Securities
Date Escrow Period Ends
Ordinary shares under escrow
15,000,000
1 December 2022
Class
Number of
Securities
Number of
Holders
Holder Name
Holding
Balance
%
Unlisted options expiring
1,5000,000
1 Scorpius Holdings Pty Ltd
15,000,000
100%
4,000,000
1 CG Nominees (Australia) Pty Ltd
4,000,000
100%
4,000,000
1 CG Nominees (Australia) Pty Ltd
4,000,000
100%
4,000,000
1 CG Nominees (Australia) Pty Ltd
4,000,000
100%
1,000,000
1 Mining Equities Pty Ltd
1,000,000
100%
Unquoted Securities
on 09/04/2023 @ $0.01
Unlisted options expiring
on 31/12/2023 @ $0.061
Unlisted options expiring
on 31/12/2023 @ $0.08
Unlisted options expiring
on 31/12/2023 @ $0.10
Unlisted options expiring
on 12/02/2024 @ $0.10
Unlisted options expiring
on 22/06/2024 @ $0.045
5,000,000
4 Mr Michael Sperinck
2,500,000
50%
Others (less than 20%) *
Unlisted options expiring
on 01/12/2024 @ $0.050
2,200,000
2 Mr Craig Wales
Mr Yafei Wang
Unlisted options expiring
20,000,000
2 Ms Christabel Jayne Brand
18,800,000
on 31/12/2024 @ $0.050
Others (less than 20%) *
2,500,000
1,200,000
1,000,000
50%
55%
45%
94%
1,200,000
6%
* For a holder who holds less than 20% of the equity securities in an unquoted class, the name of the holder and number
of equity securities held are not required to be disclosed in the annual report.
Brightstar Resources Limited
Brightstar Resources Limited
-66-
ASX ADDITIONAL INFORMAITON (Continued)
Tenement Schedule as at 3 October 2022
One vote for each ordinary share held in accordance with the Company’s Memorandum and Articles of Association.
Reporting Group
Lease
Brightstar (South
Laverton)
Brightstar North
(North Laverton)
M38/968
M38/1056
M38/1057
M38/1058
M38/9
E38/2411
E38/3034
E38/3279
E38/3293
E38/3331
E38/3438
E38/3500
E38/3505
M38/241
M38/549
M38/984
P38/4377
P38/4385
P38/4431
P38/4432
P38/4433
P38/4444
P38/4445
P38/4446
P38/4447
P38/4448
P38/4449
P38/4450
P38/4508
P38/4545
P38/4546
E38/2452
E38/2894
E38/3434
M38/346
M38/917
M38/918
P38/4108
E38/3198
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Lease Manager
Total Shares
Desert Exploration Pty Ltd
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
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
100
100
100
100
100
100
100
100
Brightstar Resources Limited
-67-
ASX ADDITIONAL INFORMAITON (Continued)
Tenement Schedule as at 3 October 2022
Reporting Group
Hawks Nest (West
Laverton)
Miscellaneous
Licences
Lease
M38/94
M38/95
M38/314
M38/381
L38/100
L38/123
L38/168
L38/169
L38/171
L38/185
L38/188
L38/154
L38/205
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Lease Manager
Total Shares
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
100
100
100
100
100
100
100
100
100
100
100
100
100
Brightstar Resources Limited
ASX ADDITIONAL INFORMAITON (Continued)
-67-
Tenement Schedule as at 3 October 2022
Reporting Group
Hawks Nest (West
Laverton)
Miscellaneous
Licences
Lease
M38/94
M38/95
M38/314
M38/381
L38/100
L38/123
L38/168
L38/169
L38/171
L38/185
L38/188
L38/154
L38/205
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Lease Manager
Total Shares
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
Brightstar Resources Limited
100
100
100
100
100
100
100
100
100
100
100
100
100
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BE LM ONT WA 6 1 04
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F (61 8 ) 92 77 6 00 2
E info@bri gh tst a rr eso u rce s. co m. au
www.brightstarresources.com.au/