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BURGUNDY DIAMOND MINES LIMITED
A B N 3 3 1 60 0 17 3 9 0
2021 ANNUAL REPORT
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Annual Report
For the year ended 30 June 2021
Contents
Corporate Directory ...................................................................................................................................................... 2
Managing Directors’ Report ......................................................................................................................................... 3
Directors’ Report .......................................................................................................................................................... 5
Financial Statements .................................................................................................................................................. 24
Consolidated Statement of Profit or Loss and Other Comprehensive Income ...................................................... 25
Consolidated Statement of Financial Position ........................................................................................................ 26
Consolidated Statement of Changes in Equity ....................................................................................................... 27
Consolidated Statement of Cash Flows .................................................................................................................. 28
Notes to the Consolidated Financial Statements ................................................................................................... 29
Directors’ Declaration ................................................................................................................................................. 48
Independent Auditor’s Report .................................................................................................................................... 49
Corporate Governance Statement ............................................................................................................................. 52
ASX Additional Information ........................................................................................................................................ 53
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Corporate Directory
Non-Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 5 July 2020)
Non-Executive Director (appointed 22 September 2020)
Board of Directors
Stephen Dennis
Peter Ravenscroft
Jeremy King
Michael O’Keeffe
Marc Dorion
Kim Truter
Secretary
Ms Sarah Smith
Registered Office
Level 25
South 32 Tower
108 St Georges Terrace
Perth WA 6000
Telephone:
Website:
08 6313 3945
www.burgundy-diamonds.com
Stock Exchange Listing
Listed on the Australian Securities Exchange (ASX Code: BDM)
Auditors
RSM Australia Partners
Level 32, 2 The Esplanade
Perth WA 6000
Solicitors
K & L Gates LLP
32/44 St Georges Terrace
Perth WA 6000
Bankers
Westpac Banking Corporation
Level 4, Brookfield Place, Tower Two
123 St Georges Terrace
Perth WA 6000
Share Registry
Automic Share Registry
Level 2, 267 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
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Managing Directors’ Report
Dear Fellow Shareholder
On behalf of the Board of Directors, I am pleased to present the Company’s Annual Report for the financial year
ended 30 June 2021.
Amid another year which has been very challenging globally, I am pleased to report continued progress on the
initial phase of our strategy of establishing a balanced portfolio of high potential development projects, securing
the necessary funding to progress these projects and continue to enhance our management team.
As I have previously reported, the diamond sector has been severely underfunded for more than a decade and
requires significant investment to respond to an increasing diamond supply shortfall forecast in the next 10 years.
Our strategy centres around working closely with the world’s best diamond explorers and investing in a select
portfolio of projects, from early stage to more advanced exploration. Importantly, we seek to add value to our
investments through the provision of capital and expertise to progress them to development.
We are patient counter-cyclical investors with a long-term view, taking advantage of high-quality opportunities
presented by an undervalued sector.
There has been a significant improvement in the diamond industry in 2021 with positive demand for rough
diamonds, notably in the US and China, and price increases in virtually all sizes and quality of diamonds. This
follows a challenging time during the height of the COVID-19 pandemic that created difficult economic conditions
for explorers, miners and retailers alike.
Despite these global challenges, your Company has made strong progress over the past year:
• In Botswana, we continue to progress our exploration alliance with leading private company Diamond
Exploration Strategies Ltd. This alliance is focused on earlier stage exploration in one of the world’s best
diamond jurisdictions. The Exploration Alliance is focused on the evaluation of some 15 prospective targets
over the 12-month period to mid-2022, with geophysical and drilling programs progressing well.
• In Nunavut, Canada, our Naujaat Project represents the largest undeveloped diamond property in Canada that
is not under the control of a major mining company. In August 2021, we announced the successful completion
of a 2,000 tonne bulk sample that will be shipped south to Saskatchewan via Montreal in September with
processing and diamond recovery expected to start in Q4 2021.
• In March 2021, we expanded our project portfolio with an Option Deed with Gibb River Diamonds Ltd to
acquire 100% ownership of the Ellendale and Blina projects (together the “Ellendale Diamond Project”) in the
West Kimberley region of Western Australia. The acquisition includes all tenements pegged by Gibb River in
2019 over the historic Ellendale diamond mine, famed for its production of iconic yellow diamonds, as well as
the highly prospective Blina alluvial diamond deposit to the north-west of the Ellendale properties.
• I was excited to announce strong progress with our strategy for downstream operations that includes cutting,
polishing, marketing and sales of potential production from the Company’s project portfolio as well as from
third party supply. The Company has leased purpose built high security premises in Perth WA, specifically
designed for downstream diamond operations. Additionally, equipment has been secured for valuing, cutting,
polishing and grading diamonds and we have been fortunate to be able to recruit a team of specialists to
support our move into downstream operations. This includes specialised cutting, polishing and grading
professionals who will shortly commence work on the recently acquired third party rough diamonds.
• In July 2021, we secured the necessary funding to support our future activities, announcing a capital raising of
$50.2 million in July 2021, comprising equity and convertible notes. This was a significant achievement and a
stamp of approval of our progress to date and our strategy moving forward.
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Our progress over the past 12 months positions the Company to continue to deliver on its strategy in the year
ahead, where our key objectives are:
•
•
Analysing the results of ongoing exploration in Botswana and the diamond recovery from the bulk sample
collected from Naujaat. These results will provide us with a roadmap for our next steps with each project.
At Ellendale, we are preparing the site to commence a bulk sampling program expected to be in the first
quarter of 2022 with first results from the program expected later in the year.
• We expect our downstream operation will deliver the first polished Fancy Diamonds that will be marketed
under an emerging ultra-luxury Fancy Colour diamond brand and we will look forward to expanding on these
initial purchases and source additional stones.
Looking forward, it is unfortunate that COVID-19 and its impact will likely be with us for a while yet. However, we
are fortunate that we operate in countries and regions, where to date, effective management of the widespread
impact of the pandemic has allowed the Company to progress its projects and I look forward to providing further
updates on progress.
Thank you for your continuing support of Burgundy Diamond Mines Limited
Peter Ravenscroft
Managing Director and Chief Executive Officer
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DIRECTORS’ REPORT
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Directors’ Report
The Directors of Burgundy Diamond Mines Limited (“BDM” or “the Company”) present their report, together with
the financial statements on the consolidated entity consisting of Burgundy Diamond Mines Limited and its
controlled entities (the “Group”) for the financial year ended 30 June 2021 (“FY2021”).
Directors
The names and particulars of the Company’s directors in office during the financial year and at the date of this
report are as follows. Directors held office for this entire period unless otherwise stated.
Stephen Dennis (Non-Executive Chairman, appointed 22 August 2012)
Mr Dennis has been actively involved in the mining industry for over 35 years, having held senior management
positions in a number of Australian resources companies. Mr Dennis was previously the Managing Director and
Chief Executive Officer of CBH Resources Limited which is the Australian subsidiary of Toho Zinc Co., Ltd of Japan.
Mr Dennis is currently a director of several ASX listed mineral resource companies.
Current and former directorships of listed entities in the last three years:
Non-Executive Chairman of Heron Resources Limited (current)
Non-Executive Chairman of Rox Resources Limited (current)
Non-Executive Chairman of Marvel Gold Limited (current)
Non-Executive Chairman of Kalium Lakes Limited (current)
Non-Executive Chairman of Lead FX Inc.
Special responsibilities:
Chair of the Remuneration and Nomination Committee and member of the Audit and Risk Committee.
Interest in securities:
7,689,957 ordinary shares
Peter Ravenscroft (Managing Director and Chief Executive Officer, appointed 11 March 2020)
Mr Ravenscroft brings 40 years of experience in the international mining industry, with specific knowledge of
diamonds, and a background in exploration, geostatistics, resource evaluation and mine planning. He progressed
from technical roles in De Beers and Anglo American in southern Africa to leadership positions in Rio Tinto in the
UK, Australia and Canada. He has been involved in operations, projects and M&A in base metals, gold and iron ore
across the Rio Tinto group, and was also for many years Rio Tinto’s leading expert on diamond resource
evaluation. In an executive role with Cleveland Cliffs Inc., Mr Ravenscroft built a global exploration function
focused on diversification through earn-in deals with junior partners and brought several successful projects to an
advanced evaluation stage. More recently he has been an independent consultant providing strategic advisory
services to a number of global clients, with a particular focus on the diamond sector in Canada. He has served as a
non-executive director on a number of boards in Australia and Canada. Mr Ravenscroft has a Masters equivalent
from the Paris School of Mines and is a Fellow of the AusIMM.
Current and former directorships of listed entities in the last three years:
None.
Special responsibilities:
None
Interest in securities:
4,375,000 ordinary shares
5,500,000 unlisted options
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Jeremy King (Non-Executive Director, appointed 16 February 2016)
Mr King is a corporate advisor and lawyer with over 15 years’ experience in domestic and international legal,
financial and corporate matters. Mr King spent several years in London where he worked with Allen & Overy LLP
and Debevoise & Plimpton LLP and has extensive corporate experience, particularly in relation to cross-border
private equity, leveraged buy-out acquisitions and acting for financial institutions and corporate issuers in respect
of various equity capital raising.
Current and former directorships of listed entities in the last three years:
Executive Director of Red Mountain Mining Limited (current)
Non-Executive Director ECS Botanics Holdings Ltd (formerly Axxis Technology Limited) (current)
Non-Executive Director of Smart Parking Limited (current)
Non-Executive Director of Transcendence Technologies Limited (current)
Non-Executive Director of Sultan Resources Limited (current)
Non-Executive Chairman of Aldoro Resources Limited (resigned November 2019)
Non-Executive Director of Vanadium Resources Limited (resigned July 2019)
Non-Executive Director of DTI Group Limited (resigned January 2019)
Non-Executive Chairman of Pure Minerals Limited (resigned November 2018)
Special responsibilities:
Chair of the Audit and Risk Committee.
Interest in securities:
5,413,122 ordinary shares.
Michael O’Keeffe (Non-Executive Director, appointed 15 June 2017)
Mr O’Keeffe was the Managing Director of Glencore Australia Limited from 1995-2004 and was Executive
Chairman of Riversdale Mining Limited prior to that company being acquired by Rio Tinto PLC in 2011. Mr
O’Keeffe is currently the Executive Chairman and former Chief Executive Officer of Champion Iron Limited which
operates an iron ore project in Canada. Mr O’Keeffe is a significant shareholder holding 8.29% of the ordinary
share capital of the Group.
Current and former directorships of listed entities in the last three years:
Executive Chairman of Champion Iron Limited (current)
Non-Executive Director of Mont Royal Resources Limited (current)
Special responsibilities:
Member of the Remuneration and Nomination Committee.
Interest in securities:
27,903,535 ordinary shares
5,000,000 convertible notes
Marc Dorion (Non-Executive Director, appointed 5 July 2020)
Mr Dorion is a partner in the Business Law Group of prominent Canadian law firm McCarthy Tétrault, based in
Montreal, where he supervises the natural resources group in Québec. He received his LLL from the Université de
Sherbrooke, Quebec, Canada then did post graduate studies in corporate taxation at Osgoode Hall Law School,
York University. His practice focuses on development, financing, construction and operation of major projects in
the natural resources, energy, infrastructure and industrial sectors. He received the titles of Advocate Emeritus
from the Quebec Bar and also of Queen’s Counsel.
Current and former directorships of listed entities in the last three years:
None.
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Special responsibilities:
None
Interest in securities:
12,541,667 ordinary shares
Kim Truter (Non-Executive Director, appointed 22 September 2020)
Mr Truter was most recently the Chief Executive Officer of De Beers Canada from 2015 to 2019. During his tenure
he led the successful completion and ramp-up to full production of the $1bn Gahcho Kué diamond project in
Canada, as well as the value-adding acquisition of the former Peregrine Diamonds assets. He was also a member
of the De Beers Group executive team, driving global business performance across operations, sales, and
marketing.
Previously, Mr Truter served as Chief Operating Officer of Rio Tinto Diamonds, managing their global portfolio in
Australia, Canada and Zimbabwe. He also served as Managing Director of Argyle Diamond Mines Pty Limited in
Australia and as the President and Chief Operating Officer of Diavik Diamond Mines Inc in Canada.
Mr Truter brings over 30 years of mining experience in both surface and underground operations and large-scale
project development across multiple geographies. He has substantial diamond experience, providing executive
global leadership in Canada, Australia and Africa; often in complex, remote and challenging operating
environments. He has worked extensively with communities and governments to ensure that local benefits are
sustainably established. His proven leadership capabilities include a very strong dedication to safety, productivity
and financial performance improvement.
Current and former directorships of listed entities in the last three years:
None.
Special responsibilities:
Member of the Audit and Risk Committee and Remuneration and Nomination Committee.
Interest in securities:
2,500,000 unlisted options
David Bradley (Non-Executive Director, Resigned 5 July 2020)
Mr Bradley is an energy industry commercial specialist with over 30 years of business development experience
including senior management roles with El Paso Corporation, Epic Energy, and senior managing consulting roles
with Wood McKenzie as well as privately advising a broad range of upstream, midstream and downstream energy
players in developing and executing commercialisation strategies and business development initiatives.
Experience includes significant merger and acquisition coordination roles realising over $2 billion in completed
transactions. Mr. Bradley recently organized the successful acquisition of Exmouth Power Pty Ltd along with
Fengate Capital Management Group – a Toronto based Super fund. Mr. Bradley is current Managing Director of
the Exmouth Power business, and as well remains involved in general energy consulting as Managing Director of
Gas Transport Solutions, and as Non-Executive Director on a number of unlisted companies.
Current and former directorships of listed entities in the last three years:
None.
Special responsibilities:
Not applicable.
Interest in securities:
Not applicable.
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Company Secretary
Sarah Smith (appointed 20 November 2015)
Sarah Smith is an employee of Mirador Corporate, where she specialises in corporate advisory, company
secretarial and financial management services. Sarah has over 8 years’ experience in the provision of company
secretarial and financial management services for ASX listed companies, capital raisings and IPOs, due diligence
reviews and ASX and ASIC compliance. Sarah is a Chartered Accountant and has acted as the Company Secretary
of a number of ASX listed companies.
Principal Activities
The Company’s principal activity is exploration and development projects in the diamond sector.
Review of Operations
Naujaat Diamond Project
The world class Naujaat project represents the largest undeveloped diamond property in Canada that is not under
the control of a major mining company. First discovered by BHP in the early 2000’s, it was divested as part of
BHP’s corporate refocus on iron ore, coal and petroleum operations later that decade. North Arrow acquired the
project in 2013, and subsequent evaluation has focused on the potential value contribution from an exceptional
population of uniquely coloured Fancy Vivid Orangey-Yellow stones. This is a specific and rare colour which has
been certified by the Gemological Institute of America (“GIA”), and these diamonds today are expected to sell at
high premiums to white diamond prices, upon which the historic project economics were mostly based.
On 2 June 2020, the Company announced that it had entered into a Phase One Option Agreement with North
Arrow Minerals Inc. (TSXV: NAR; North Arrow) over the Naujaat diamond project in the Nunavut territory of
Canada (Figure 1). The agreement provides BDM with the option to earn a 40% interest in the project in return for
funding of C$5.6 million for a preliminary bulk sample of 1,500 – 2,000 tonnes. BDM has also made a preliminary
proposal to earn an additional 20% interest by funding a larger 10,000 tonne Phase 2 bulk sample, pending
positive results from the first phase.
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Figure 1 – Location of Naujaat Project
Field crews arrived on site in June in preparation to commence the bulk sampling program on schedule in July
2021. The collection of approximately 2,000 tonnes from the Q1-4 kimberlite was completed in August 2021
representing the high end of the anticipated tonnage from the bulk sampling program. The bulk sample is being
shipped south to Saskatchewan via Montreal in September with processing and diamond recovery expected to
start in Q4 2021.
Diamonds recovered from the sample are intended to confirm the size distribution and character of the important
population of potentially high-value, fancy yellow to orange yellow diamonds found in the Q1-4 deposit. Burgundy
believes the population of Fancy Vivid Orangey-Yellow diamonds present in the Q1-4 kimberlite has been under-
represented in previous sampling, and the aim of the current program is to provide a large enough bulk sample
to confirm their potential contribution to a higher average diamond price at Naujaat than previously indicated.
Success from this program will lead to decisions on definitive work required to progress this project through
feasibility study.
Botswana Exploration Alliance
The Company has an Exploration Alliance Agreement in Botswana with Diamond Exploration Strategies Ltd
(“DES”), a privately-owned company with an excellent management team. Burgundy is providing funding of
US$1.5 million over three years to finance exploration activities, earning 50% ownership of any discoveries made,
with options to earn-in up to 70% by completing a Scoping Study or 90% on completion of a Feasibility Study. The
Alliance was initially over five areas that had existing prospecting licenses (Figure 2) but has now extended to
cover other very prospective areas of Botswana.
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Figure 2 - Location of Project Areas in Botswana
The Exploration Alliance is focused on the evaluation of some 15 prospective targets over the 12-month period to
mid-2022. During the June quarter, early geophysical work was completed over two alluvial diamond targets with
results currently being processed before any further work is planned in these areas. Initial drilling programs on
two promising kimberlite targets were started soon after the end of the June quarter, and planning is underway
for activities on a number of other prioritised targets in this broad 12-month work program.
The project generator model being used by Burgundy in this alliance program provides a cost-effective way of
performing rapid evaluation of a comprehensive tenement package assembled by DES, including through earn-in
partnerships with other diamond exploration companies. Burgundy is confident that this program will yield a
number of projects in which Burgundy will immediately have a 50% interest, with the ability to earn-in to higher
levels of ownership through funding of further work programs and studies.
Ellendale Diamond Project
On 22 March 2021 Burgundy announced the signing of an Option Deed with Gibb River Diamonds Ltd (ASX: GIB;
“Gibb River”) to acquire 100% ownership of the Ellendale and Blina projects (together the “Ellendale Diamond
Project”) in the West Kimberley region of Western Australia.
The acquisition of the Ellendale Diamond Project includes all tenements pegged by Gibb River in 2019 over the
historic Ellendale diamond mine, famed for its production of iconic yellow diamonds, as well as the highly
prospective Blina alluvial diamond deposit to the north-west of the Ellendale properties.
Access to the Blina deposits, as well as the Ellendale remnant stockpiles, unworked alluvial deposits, unexplored
pit-rim deposits and potentially remnant material from the E9 and E4 open pits, gives Burgundy the opportunity to
reach accelerated production of high-value diamonds within the two-year option period, at the same time as
establishing longer-term mineral resources for potential ongoing production at the Ellendale Diamond Project.
Burgundy intends to extract maximum value from the natural beauty of the Ellendale stones via its own marketing
initiatives and re-establish Western Australia as a supplier of unique high-value diamonds to luxury goods markets
worldwide.
The transaction is in the form of an Option Deed over two years, with a series of staged payments from Burgundy
to Gibb River at Burgundy’s election:
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(i)
On execution of the formal agreement, Burgundy paid Gibb River A$1.7 million in cash and issued to Gibb
River 4 million shares;
(ii) On the first-year anniversary of the grant of the option, Burgundy to pay Gibb River A$1 million in cash and
issue to Gibb River 5 million shares; and
(iii) On the exercise of the option to purchase the Ellendale Diamond Project, Burgundy to pay Gibb River A$4
million in cash and issue to Gibb River 7 million Shares in Burgundy. Burgundy will also pay Gibb River a 1.5%
gross revenue royalty on the diamonds and other minerals obtained from the tenements while it remains
the registered holder of the tenements.
In March 2021, Burgundy made the A$1.7 million cash payment and issued 4 million Shares.
The total tenement package being acquired under the current option agreement is shown in Figure 3, comprising a
number of mining leases, applications for the grant of certain tenements, exploration licences and miscellaneous
licenses that cover all of the prospective ground in the Ellendale and Blina project areas. Together, these are now
being referred to as the “Ellendale Diamond Project”.
Figure 3 - Location of Ellendale Diamond Project Tenements
The Company has made significant progress towards developing an operating plan to re-start production before
the end of calendar year 2022 starting with the engagement of a dedicated team of highly experienced geological,
engineering and project management consultants and contractors with direct knowledge of the Ellendale
Diamond Project and other alluvial and hard- rock diamond projects and operations worldwide. Activity on the
project to date has encompassed:
•
•
•
•
Collation and assessment of the extensive historical data and information provided by Gibb River.
Commencement of work on developing revised mineral resource and exploration target estimates on
selected parts of the suite of potential opportunities across the project area.
Initial clearing of tracks, camp site and plant site at the Blina alluvial deposit, and design of a trenching
and bulk sampling program planned for the September quarter.
Start of fabrication of a fit-for-purpose bulk sampling plant by IMP International Solutions Ltd (Imilingo
Mineral Processing) in South Africa. This plant includes the use of a Tomra XRT COM 300 /FR sorter
supplied by TOMRA Sorting GmbH in Germany. The total cost of this plant is some US$3.5 million, and
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fabrication was around 50% complete at the end of the June quarter. Delivery of the fully containerised
plant to Western Australia is scheduled for the December 2021 quarter.
•
Preliminary planning and design of a larger operational processing plant for start of fabrication in the
September quarter, with planned start of operation before the end of 2022.
La Victoria Gold and Silver Project
Burgundy holds an 18% interest in the La Victoria Gold/Silver Project, located in the prolific North-Central Mineral
Belt of Peru (Figure 4), which it acquired through earn-in arrangements starting in 2017 and is able, pursuant to a
2018 option agreement, to increase this interest to 25% by expending a further C$1.4 million, subject to the
receipt of all permitting.
Figure 4 - Location of La Victoria Project in Peru
Proposed drilling at this project has been impacted by permitting delays, however, Burgundy’s project partner,
Eloro Resources Ltd (TSX-V: ELO, Eloro), announced in September that it had entered into a surface rights
agreement with the local community that allows exploration activities including drilling to proceed. With the
surface rights agreement in place, Eloro can now proceed with the drill permitting process with the Peruvian
Ministry of Energy and Mines and the Water Authority.
Burgundy will participate in any drilling program as an 18% partner and has advised Eloro that, at this time, it has
no intention of exercising its option to increase its interest.
Nanuk Diamond Project
Nanuk Diamonds Inc is a 100% subsidiary of Burgundy and is the owner of 625 mineral claims located East of the
Ungava Bay in Northern Quebec, a prospective diamond district that has received little attention over the last 15
years. There is no on-site activity currently planned for the Nanuk Project.
Corporate
Board and Executive Appointments
On 5 July 2020 and 22 September 2020 respectively, Mr Marc Dorion and Mr Kim Truter were appointed as Non-
Executive Directors of the Company. On 8 September 2020, Mr Sean Whiteford and Mr George Read were
appointed as Vice President Business Development and Vice President Exploration respectively. Mr Whiteford will
play a key role in implementing the Company’s strategy of forming commercial relationships with partner
companies focused on diamond project development and Mr Read will be responsible for all technical aspects of
existing Company projects and the assessment of future investment opportunities.
Capital Raising
On 22 June 2020, the Company announced that it had received commitments to raise $10 million (before costs)
via a new share placement to institutional and sophisticated investors (“Placement”). The issue price of the new
shares was 9.6 cents per share, and the Placement was to be conducted in two tranches. On 29 June 2020, the
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Company completed the first tranche and issued 36,666,997 new shares at 9.6 cents per share to raise
approximately $3.52 million. On 4 August 2020, the issue of tranche 2 shares was approved by shareholders at
the Company’s Extraordinary General Meeting. On the same day, 67,499,670 shares were issues at 9.6 cents per
share to raise approximately $6.48 million.
On 26 July 2021, the Company announced that it had received binding commitments from institutional and
sophisticated investors to raise $50.2m in new capital via the issue of 35 million unsecured convertible notes with
a face value of $1 to raise $35.0 million (before issue costs and subject to shareholder approval) and a share
placement of 63,313,647 ordinary shares at 24 cents per share to raise approximately $15.2 million (before costs
of the offer). The Share Placement shares were issued on 2 August 2021 and shareholders approved the issue of
the convertible notes 14 September 2021.
Share Purchase Plan
In August 2020, the Company completed a Share Purchase Plan for $592,314 (before issue costs) and issued
6,169,936 new shares at 9.6 cents per share.
Change of Name
On 18 November 2020, a resolution was passed by shareholders to change the name of the Company from EHR
Resources Limited to Burgundy Diamond Mines Limited. The name change reflected both the focus of the
Company in the diamond sector and the clear intent to become an operating diamond mining company.
Impact of COVID-19
The onset of the COVID-19 pandemic unfortunately coincided with the launch of the Company’s diamond strategy.
The immediate impact on market sentiment necessitated a period of watchful consolidation of our planned
activities. The Company has continued to operate prudently and has implemented required measures to minimise
spread of the virus, ensure the safety and wellbeing of employees, and maintain business continuity.
Results of Operations
The net loss of the Group for the year ended 30 June 2021 was $12,118,039 (2020: $3,201,605). The loss reflects
the development stage of the Group and arises primarily from exploration expenditure.
Financial performance for the previous 5 years is as follows:
2021
$
(12,118,039)
(4.82)
0.29
2020
$
(3,201,605)
(2.42)
0.096
2019
$
(1,327,120)
(1.05)
0.035
2018
$
(4,723,092)
(4.35)
0.08
2017
$
(1,459,042)
(1.90)
0.07
Net Loss after tax
EPS (cents per share)
Share Price ($)
Financial Position
The statement of cash flows shows a decrease in cash and cash equivalents for the year ended 30 June 2021 of
$2,642,345 (2020: $1,810,067 increase). During the year, the Group raised $7,842,280 (2020 $3,520,032) before
costs from the issue of share capital. At year end the Group had funds of $1,694,046 (2020: $4,342,785) available
for future operational use.
Dividends
No dividends have been paid or declared by the Group since the end of the previous financial year. No dividend is
recommended in respect of the current financial year.
Significant Changes in the State of Affairs
There were no other significant changes in the state of affairs of the Company other than those described within
the operating and corporate activities review.
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Matters Subsequent to The Reporting Period
As the impact of the COVID-19 pandemic is ongoing, it is not practicable to estimate the potential impact, positive
or negative, after the reporting date. The situation is still evolving and is dependent on measures imposed by the
Australian Government and other countries, such as maintaining social distancing requirements, quarantine,
travel restrictions and any further economic stimulus that may be provided.
On 26 July 2021, the Company announced that it had received binding commitments from institutional and
sophisticated investors to raise $50.2m in new capital via the issue of 35 million unsecured Convertible Notes
(“Notes”) with a face value of $1 to raise $35.0 million (before issue costs) and a Share Placement of 63,313,647
ordinary shares at $0.24 cents per share to raise approximately $15.2 million (before costs of the offer). The Share
Placement shares were issued on 2 August 2021 and shareholders approved the issue of the Notes on 14
September 2021. Each Note has a face value of $1, with a 3-year term to maturity and a 6% coupon rate. The
Notes are unsecured and will convert at a 10% premium to the price of the Share Placement ($0.24) at the
election of the Note holders. The Notes are redeemable if they are not converted to equity by the maturity date.
On 25 August 2021 the Company paid a cash backed financial guarantee of $182,974 with an expiry date of 31
January 2027 for a property lease contract for the Company’s head office.
On 14 September 2021, shareholders approved the issue of 3 million zero options with a 3-year expiry to Mr Peter
Ravenscroft, Managing Director and CEO, in recognition of Mr Ravenscroft’s achievement of his short term
incentive milestones.
There were no other significant events after the balance sheet date
Likely Developments and Expected Results
The strategic objectives of the Company are to create shareholder value through the discovery, development, and
acquisition of technically and economically viable diamond projects. The Company will continue to develop its
existing projects in Australia, Botswana, Canada and Peru will also pursue other global diamond project
opportunities that meet the Company’s investment criteria.
Directors’ Meetings
The number of Directors’ meetings held during the financial year and to the date of this report and the number of
meetings attended by each Director during the time the Director held office are:
Board
Remuneration and
Nomination
Audit and Risk
Committee
Held1
10
10
10
10
9
7
1
Attended2
10
10
8
9
5
7
1
Stephen Dennis
Peter Ravenscroft
Jeremy King
Michael O’Keeffe
Marc Dorion3
Kim Truter4
David Bradley5
1. Number of meetings held during the time the director held office or was a member of the committee during the year.
2. Number of meetings attended.
3. Appointed 5 July 2020.
4. Appointed 22 September 2020.
5. Resigned 5 July 2020.
N/A: Not a member of this committee.
Attended2
2
N/A
N/A
2
N/A
2
N/A
Attended2
1
N/A
1
N/A
N/A
1
N/A
Held1
2
N/A
N/A
2
N/A
2
N/A
Held1
1
N/A
1
N/A
N/A
1
N/A
On 16 March 2021, the Company established an Audit and Risk Committee (Jeremy King as chairperson and
Stephen Dennis and Kim Truter as members) and a Remuneration and Nomination Committee (Stephen Dennis as
chairperson and Michael O’Keeffe and Kim Truter as members).
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In addition to the scheduled Board meetings, Directors regularly communicate by telephone, email or other
electronic means, and where necessary, circular resolutions are executed to effect decisions.
Remuneration Report (Audited)
This remuneration report for the year ended 30 June 2021 outlines the remuneration arrangements of the Group
in accordance with the requirements of the Corporations Act 2001 (“the Act”) and its regulations. This
information has been audited as required by section 308(3C) of the Act.
The Remuneration Report details the remuneration arrangements for Key Management Personnel (“KMP”) who
are defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the
Parent company.
The KMP of the Group for the year ended 30 June 2021 are as follows:
Director
Role
Appointment
Resigned
Stephen Dennis
Non-Executive Chairman
Peter Ravenscroft Managing Director
Jeremy King
Non-Executive Director
Michael O’Keeffe Non-Executive Director
Marc Dorion
Non-Executive Director
22 August 20212
11 March 2020
16 February 2016
15 June 2017
5 July 2020
Kim Truter
Non-Executive Director
22 September 2020
N/a
N/a
N/a
N/a
N/a
N/a
David Bradley
Non-Executive Director
22 August 2012
5 July 2020
Voting and comments made at the company's 2020 Annual General Meeting (“AGM”)
At the 2020 AGM, 99.65% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2020. The Company did not receive any specific feedback at the AGM regarding its remuneration
practices.
Remuneration Philosophy
KMP have authority and responsibility for planning, directing and controlling the activities of the Group. During
the financial year, KMP of the Group comprise the Board of Directors and the Managing Director/Chief Executive
Officer.
The Group’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s
duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of
the highest quality.
No remuneration consultants were employed during the financial year.
Remuneration Governance, Structure and Approvals
Remuneration of Directors is currently set by the Board. The nature and amount of remuneration is collectively
considered by the Board with reference to relevant employment conditions and fees commensurate to a
company of similar size and level of activity, with the overall objective of ensuring maximum stakeholder benefit
from the retention of high performing Directors.
The Remuneration and Nomination Committee is primarily responsible for:
• The over-arching executive remuneration framework;
• Operation of the incentive plans which apply to executive directors and senior executives, including key
performance indicators and performance hurdles;
• Remuneration levels of executives; and
• Non-Executive Director fees.
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Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with
the long-term interests of the Company.
Non-Executive Remuneration Structure
The remuneration of Non-Executive Directors consists of Directors’ fees (plus statutory superannuation), payable
in arrears. The current maximum total aggregate fixed sum per annum that may be paid to Non-Executive
Directors in accordance with the Company’s Constitution is $350,000 which may be varied by ordinary resolution
of the Shareholders in a General Meeting.
Remuneration of Non-Executive Directors is based on fees approved by the Board of Directors and is set at levels
to reflect market conditions and encourage the continued services of the Directors. In accordance with the
Company’s Constitution, the Directors may at any time, subject to the Listing Rules, adopt any scheme or plan
which they consider to be in the interests of the Company and which is designed to provide superannuation
benefits for both present and future Non-Executive Directors, and they may from time to time vary this scheme or
plan.
Remuneration may also include an invitation to participate in share-based incentive programmes in accordance
with Company policy.
Executive Remuneration Structure
The nature and amount of remuneration of executives are assessed on a periodic basis with the overall objective
of ensuring maximum stakeholder benefit from the retention of high-performance individuals.
The main objectives sought when reviewing executive remuneration is that the Company has:
• Coherent remuneration policies and practices to attract and retain Executives;
• Executives who will create value for shareholders;
• Competitive remuneration offered benchmarked against the external market; and
• Fair and responsible rewards to Executives having regard to the performance of the Group, the
performance of the Executives and the general pay environment.
Relationship between Remuneration and Company Performance
Given the current phase of the Company’s development, the Board does not consider corporate earnings to be an
appropriate measure when determining the nature and amount of KMP remuneration.
The remuneration framework for KMP comprises fixed remuneration, and at risk components comprising short-
term and long-term variable incentives that are determined by individual and Company performance.
Fixed Remuneration
Fixed remuneration consists of fixed contractual salary or fees, legislated employer contributions to
superannuation funds and other employee benefits.
The fixed remuneration for each senior executive is influenced by the nature and responsibilities of each role and
knowledge, skills and experience required for each position. Fixed remuneration provides a base level of
remuneration which is market competitive and comprises a base salary and statutory superannuation. It is
structured as a total employment cost package.
KMP are offered a competitive base salary that comprises the fixed component of pay and rewards. External
remuneration consultants may provide analysis and advice to ensure base pay is set to reflect the market for a
comparable role. No external advice was taken this year. Base salary is reviewed annually to ensure the
executives’ pay is competitive with the market. The remuneration of KMP is also reviewed on promotion. There is
no guaranteed pay increase included in any KMP’s contract.
Short -Term Incentives (“STI”)
Short term incentives such as cash incentives may be awarded and are determined based on performance targets
established by the Remuneration and Nomination Committee and take into consideration performance metrics
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such as the Company’s performance, an individual employee’s performance, and the individual employee’s
contribution to the Company’s performance.
Long-Term Incentives (“LTI”)
Options may be issued at the Board’s discretion. The Board is of the opinion that the expiry date and exercise
price of the options currently on issue to the Directors and Executives is a sufficient, long-term incentive to
reward Directors and Executives in a manner which aligns the element of remuneration with the creation of
shareholder wealth.
Details of Remuneration
Details of the nature and amount of each major element of the remuneration of each KMP of the Group for the
year ended 30 June 2021 and 30 June 2020 are as follows
2021
30 June 2021
Directors
Mr Stephen Dennis
Peter Ravenscroft (i)
Jeremy King
Michael O’Keeffe
Marc Dorion (ii)
Kim Truter (iii)
David Bradley (iv)
Total
Short Term Benefits
Base Salary/
fees
Other
$
$
Long Term
Benefits
Post-
Employment
Benefits
$
Total
At Risk
Component
Share Based
Payments
$
$
74,637
318,387
57,782
56,855
59,416
46,335
-
613,412
-
-
-
-
-
-
-
-
7,091
30,247
5,489
5,401
-
4,402
-
52,630
-
125,000
-
-
-
113,000
-
238,000
81,728
473,634
63,271
62,256
59,416
163,737
-
904,042
(i)
Shareholders approved the issue of ordinary shares to Peter Ravenscroft on 2 July 2020 as part of his executive
employment agreement.
(ii) Appointed 5 July 2020.
(iii) Appointed 22 September 2020. Following shareholder approval at the Annual General Meeting on 18 November 2020,
the Company issued 2,500,000 unlisted options to Mr Truter.
(iv) Resigned 5 July 2020
2020
30 June 2020
Directors
Stephen Dennis (i)
Peter Ravenscroft (ii)
Jeremy King (iii)
Michael O’Keeffe
David Bradley (iv)
Total
Short Term Benefits
Base Salary/
fees
Other
$
$
59,698
131,452
44,677
44,677
44,677
325,181
60,000
-
40,000
-
-
100,000
Long Term
Benefits
Post-
Employment
Benefits
$
Total
At Risk
Component
Share Based
Payments
$
$
5,671
9,500
4,244
4,244
4,244
27,903
-
115,274
-
-
-
115,274
125,369
256,226
88,921
48,921
48,921
568,358
(i) An amount of $60,000 was paid to Mr Dennis relating to additional consulting services provided during the year.
(ii) Following shareholder approval at the 9 March 2020 General Meeting of shareholders, the Company issued 2,500,000
Unlisted Options (exercisable at $0.07 on or before 19 March 2022) to Mr Ravenscroft as part of his incentive package
following his appointment to the Board. Refer to Note 15 for the option valuation.
(iii) An amount of $40,000 was paid to Mirador Corporate Pty Ltd, an entity of which Mr Jeremy King is a director, relating
to additional consulting services provided to the Company for the Nanuk Diamonds Inc. Acquisition.
(iv) Resigned 5 July 2020.
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The following table shows the relative proportions of remuneration that are linked to performance and those that
are fixed, based on the amounts disclosed as statutory remuneration expense in the tables above:
Name
Directors
Stephen Dennis
Peter Ravenscroft
Jeremy King
Michael O’Keeffe
Marc Dorion
Kim Truter
David Bradley
Fixed Remuneration
2020
2021
At Risk – STI (%)
At Risk – LTI (%)
2021
2020
2021
2020
100%
100%
100%
100%
100%
31%
-
52%
55%
55%
100%
-
-
-
-
-
-
-
-
-
-
48%
-
45%
-
-
-
-
-
-
-
-
-
69%
-
-
45%
-
-
-
-
-
Shareholdings of KMP (direct and indirect holdings)
Balance at
1 July 2020
Granted as
Remuneration
Purchased
Issued upon
exercise of
Options
Other
Balance at
30 June 2021
4,669,123
‐
2,913,122
24,033,927
11,883,948
-
1,713,278
45,213,398
-
1,250,000
-
-
-
-
-
1,250,000
520,834
3,125,000
-
1,369,608
657,719
-
-
5,673,161
2,500,000
-
2,500,000
2,500,000
-
-
-
7,500,000
-
-
-
-
-
-
(1,713,278)
(1,713,278
7,689,957
4,375,000
5,413,122
27,903,535
12,541,667
-
-
57,923,281
Directors
Stephen Dennis
Peter Ravenscroft (i)
Jeremy King
Michael O’Keeffe
Marc Dorion (ii)
Kim Truter
David Bradley (iii)
Total
(i)
Shareholders approved the issue of ordinary shares to Peter Ravenscroft on 2 July 2020 as part of his executive
employment agreement.
(ii) Mr Dorion owned 11,883,948 shares in the Company prior to his appointment on 5 July 2020.
(iii) Resigned 5 July 2020.
Unlisted Option holdings of KMP (direct and indirect holdings)
30 June 2021
Directors
Stephen Dennis
Peter Ravenscroft
Jeremy King
Michael O’Keeffe
Marc Dorion
Kim Truter (i)
David Bradley (ii)
Total
Balance at
1 July 2020
Issued as
Remuneration
Exercised
Other
Balance at
30 June 2021
2,500,000
2,500,000
2,500,000
2,500,000
-
-
2,500,000
12,500,000
-
-
-
-
-
2,500,000
-
2,500,000
(2,500,000)
-
(2,500,000)
(2,500,000)
-
-
-
(7,500,000)
-
-
-
-
-
-
(2,500,000)
(2,500,000)
-
2,500,000
-
-
-
2,500,000
-
5,000,000
(i) Following shareholder approval at the Annual General Meeting of Shareholders on 18 November 2020, the Company
issued 2,500,000 Unlisted Options subject to 24 months voluntary escrow (exercisable at $0.12 on or before 30
September 2023) to Mr Truter following his appointment to the Board.
(ii) Resigned 5 July 2020.
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KMP Contractual Arrangements
Peter Ravenscroft Managing Director and Chief Executive Officer
Mr Ravenscroft is employed under an open term contract that may be terminated with 3 months’ notice by either
the Group or Mr Ravenscroft. The key terms of the contract are:
• Fixed remuneration of $300,000 plus statutory superannuation, increased to $360,000 plus statutory
superannuation effective from 11 March 2021 in accordance with the terms of Mr Ravenscroft’s Executive
Employment Agreement dated 11 March 2020.
• Maximum short-term incentive in year 1 of 3 million zero priced options with a 3-year expiry subject to key
performance indicators. On 14 September 2021, shareholders approved the issue of 3 million zero options
with a 3-year expiry to Mr Ravenscroft, , in recognition of his achievement of his short-term incentive
milestones.
• After year 1 the maximum short-term incentive will be equivalent to 50% of Mr Ravenscroft’s base salary
(payable in cash or equity) and subject to shareholder approval.
• Long term incentive in year 1 is a maximum of 3 million zero priced options with a 5-year expiry subject to Mr
Ravenscroft meeting key performance indicators. After year 1, the maximum long-term incentives are to be
agreed (payable in equity only) subject to Mr Ravenscroft meeting key performance indicators.
Non-Executive Director Arrangements
Non-executive directors receive a board fee and fees for chairing or participating on board committees. The term
of each Non-Executive Director is open to the extent that they hold office subject to retirement by rotation, as per
the Company’s Constitution, at each AGM and are eligible for re-election as a director at the meeting.
Appointment shall cease automatically if the Director gives written notice to the Board, or the Director is not re-
elected as a Director by the shareholders of the Company. There are no entitlements following retirement or
termination of an appointment.
The Non-executive Chairman is paid a fee of $70,000 (plus statutory superannuation) and Non-Executive Directors
are paid fees of $55,000 per annum (plus statutory superannuation). The fee for chairing board committees is
$7,500 (plus statutory superannuation) per annum and the fee for participating on board committees is $5,000
per annum (plus statutory superannuation).
Share-based Compensation
The Company may reward Directors for their performance and aligns their remuneration with the creation of
shareholder wealth by issuing share options. Share-based compensation is at the discretion of the Board and no
individual has a contractual right to receive any guaranteed benefits. Details of shares and options issued to
directors and other key management personnel as part of compensation during the year ended 30 June 2021 are
noted below.
Options
Following shareholder approval at the Annual General Meeting of Shareholders on 18 November 2020, the
Company issued 2,500,000 Unlisted Options (exercisable at $0.12 on or before 30 September 2023) to Mr Truter
following his appointment to the Board.
Shares
On 2 July 2020, Shareholders approved the issue of 1,250,000 ordinary shares to Peter Ravenscroft as part of his
executive employment agreement.
Equity Instruments Issued on Exercise of Options
On 20 April 2021, Mr Stephen Dennis, Mr Michael O’ Keeffe and Mr Jeremy King each exercised 2,500,000 options
and were each issued 2,500,000 ordinary shares.
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Loans with KMP
There were no loans made to any KMP during the year ended 30 June 2021 (2020: nil). There were no loans from
any KMP during the year ended 30 June 2021 (2020: nil).
Other Transactions with KMP
During the financial year, the Company incurred fees of $121,880 for company secretarial and accounting services
to Mirador Corporate Pty Ltd (“Mirador”) (a company of which Mr Jeremy King is a Director).
At 30 June 2021, the Group had an outstanding payable to key management personnel and their related parties
as follows:
Mirador Corporate Pty Ltd (i)
Peter Ravenscroft
Marc Dorion
Stephen Dennis
(i)
Entity related to Jeremy King
2021
$
20,328
$
3,819
15,056
22,583
All transactions were made on normal commercial terms and conditions and at market rates.
There were no other transactions with KMP during the year ended 30 June 2021.
This concludes the remuneration report, which has been audited.
Indemnification and Insurance of Officers and Auditors
The Company has indemnified the Directors and Executives of the Company for costs incurred, in their capacity as
a Director or Executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and
Executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract
of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the
auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of
the Company or any related entity.
Environmental Regulations
The Company is not currently subject to any specific environmental regulation. There have not been any known
significant breaches of any environmental regulations during the year under review and up until the date of this
report.
Proceedings on Behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purposes
of taking responsibility on behalf of the Company for all or part of these proceedings.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
Officers of the Company Who Are Former Partners of RSM Australia Partners
There are no officers of the company who are former partners RSM Australia Partners.
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Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2021 has been received and included
within these financial statements.
Shares Under Option
At the date of this report there were the following unissued ordinary shares for which options are outstanding:
2,500,000 options expiring 19 March 2023, exercisable $0.07
2,500,000 options expiring 31 July 2023, exercisable $0.12
2,500,000 options expiring 31 August 2023, exercisable $0.12
2,500,000 options expiring 30 September 2023, exercisable $0.12
10,000,000 options expiring 23 September 2024, exercisable $0.36
3,000,000 options expiring 21 September 2024, issued to Peter Ravenscroft in recognition of achieving board
approved milestones. There is no consideration payable for the options.
Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Company and/or the group are important.
Details of the amounts paid or payable to the auditor for non-audit services provided during the year by the
auditor are outlined in Note 18 to the financial statements.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The
Directors are satisfied that the provision of non-audit services by the auditors, as set out below, did not
compromise the auditor independent requirements of the Corporations Act 2001 for the following reasons:
•
All non-audit services have been reviewed by the Board of Directors to ensure they do not impact the
impartiality and objectivity of the auditor; and
• None of the services undermine the general principles relating to the auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
This report is signed in accordance with a resolution of Board of Directors.
Stephen Dennis
Non-Executive Chairman
30 September 2021
D I R E C T O R ’ S R E P O R T | 2 2
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Burgundy Diamond Mines Limited for the year ended 30
June 2021, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 30 September 2021
ALASDAIR WHYTE
Partner
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FINANCIAL STATEMENTS
F I N A N C I A L S T A T E M E N T S | 2 4
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Consolidated Statement of Profit or Loss and Other Comprehensive Income
Revenue from continuing operations
Other income
Expenses
Administrative expenses
Compliance and regulatory expenses
Consultancy and legal expenses
Employee benefit expenses
Exploration expenditure expense
Investor relations expense
Share-based payment expense
Other expenses
Foreign currency losses
Loss from continuing operations before income tax
Income tax expense
Loss from continuing operations after income tax
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive income for the year, net of tax
Total comprehensive loss attributable to the members of
Burgundy Diamond Mines Limited
Loss per share for the year attributable to the members
Burgundy Diamond Mines Limited:
Basic loss per share (cents)
Diluted loss per share (cents)
Note
2021
$
2020
$
4
63,148
80,121
15
6
(263,083)
(91,551)
(163,641)
(841,501)
(9,944,536)
(125,448)
(448,690)
(72,519)
(230,218)
(308,691)
(49,455)
(305,736)
(248,085)
(2,176,543)
(18,909)
(115,274)
(43,124)
(15,909)
(12,118,039)
-
(12,118,039)
(3,201,605)
-
(3,201,605)
(6,395)
(6,395)
(40,033)
(40,033)
(12,124,434)
(3,241,638)
7
7
(4.82)
(4.82)
(2.42)
(2.42)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the notes to the financial statements.
F I N A N C I A L S T A T E M E N T S | 2 5
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Consolidated Statement of Financial Position
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current Assets
Plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Note
8
9
10
11
12
2021
$
2020
$
1,694,046
75,495
1,769,541
4,342,785
69,205
4,411,990
6,797
6,797
-
-
1,776,338
4,411,990
350,989
350,989
216,344
216,344
350,989
216,344
1,425,349
4,195,646
26,101,068
1,720,298
(26,396,017)
1,425,349
17,070,620
1,403,003
(14,277,977)
4,195,646
The Consolidated Statement of Financial Position should be read in conjunction with the notes to the financial
statements.
F I N A N C I A L S T A T E M E N T S | 2 6
A n n u a l R e p o r t | Y e a r E n d e d 3 0 J u n e 2 0 2 1
Consolidated Statement of Changes in Equity
Issued
Capital
Share-
based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
$
$
$
$
$
At 1 July 2019
12,210,989
1,357,213
(29,451)
(11,076,372)
2,462,379
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year after tax
-
-
-
Transactions with owners in their
capacity as owners:
Issue of share capital
Share issue costs
Share-based payments
5,040,032
(180,401)
-
115,274
-
(3,201,605)
(3,201,605)
(40,033)
-
(40,033)
(40,033)
(3,201,605)
(3,241,638)
-
-
-
-
-
-
5,040,032
(180,401)
115,274
At 30 June 2020
17,070,620
1,472,487
(69,484)
(14,277,977)
4,195,646
At 1 July 2020
17,070,620
1,472,487
(69,484)
(14,277,977)
4,195,646
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year after tax
-
-
-
Transactions with owners in their
capacity as owners:
Issue of share capital
Share issue costs
Share-based payments
9,387,282
(356,834)
-
323,689
-
(12,118,040)
(12,118,040)
(6,394)
-
(6,394)
(6,394)
(12,118,040)
(12,124,434)
-
-
-
-
-
-
9,387,282
(356,834)
323,689
-
-
-
-
-
-
-
-
-
-
At 30 June 2021
26,101,068
1,796,176
(75,878)
(26,396,017)
1,425,349
The Consolidated Statement of Changes in Equity should be read in conjunction with the notes to the financial
statements.
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Consolidated Statement of Cash Flows
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration and evaluation
expenditure
Interest received
Net cash used in operating activities
Cash flows from investing activities
Cash acquired from acquisition of subsidiary
Payments for property, plant and equipment
Net cash inflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares
Share issue costs
Net cash from financing activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at the beginning of the
financial year
Effect of exchange rate fluctuations
Cash and cash equivalents at the end of the
financial year
Note
2021
$
2020
$
(1,577,865)
(8,555,513)
(902,672)
(679,013)
8(a)
13,148
(10,120,230)
30,121
(1,551,564)
-
(7,563)
(7,563)
22,000
-
22,000
7,842,282
(356,834)
7,485,448
3,520,032
(180,401)
3,339,631
(2,642,345)
1,810,067
4,342,785
2,532,718
(6,394)
-
8
1,694,046
4,342,785
The Consolidated Statement of Cash Flows should be read in conjunction with the notes to the financial
statements.
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Notes to the Consolidated Financial Statements
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a)
Reporting Entity
Burgundy Diamond Mines Limited (“BDM” or the “Company”) is a company limited by shares and domiciled in
Australia. The consolidated financial statements of the Company as at and for the year ended 30 June 2021
comprise the Company and its subsidiaries (together referred to as the “Consolidated Entity” or the “Group”).
b)
Basis of Preparation
Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board (“AASB”) and the Corporations Act 2001. The consolidated financial statements comply with
International Financial Reporting Standards (“IFRS”) adopted by the International Accounting Standards Board
(“IASB”). Burgundy Diamond Mines Limited is a for-profit entity for the purpose of preparing the financial
statements.
The annual report was authorised for issue by the Board of Directors on 30 September 2021.
Basis of measurement
The consolidated financial statements have been prepared on a going concern basis in accordance with the
historical cost convention, unless otherwise stated.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in Note 19.
New, revised or amended standards and interpretations adopted by the Group
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
The following Accounting Standard is most relevant for the Group.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020
and early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as
well as new guidance on measurement that affects several Accounting Standards. Where the consolidated entity
has relied on the existing framework in determining its accounting policies for transactions, events or conditions
that are not otherwise dealt with under the Australian Accounting Standards, the consolidated entity may need to
review such policies under the revised framework. At this time, the application of the Conceptual Framework is
not expected to have a material impact on the consolidated entity's financial statements.
Significant Judgements and Estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity’s accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements are disclosed in Note 2.
Comparatives
(a)
Where required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
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(b)
Principles of Consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Burgundy
Diamond Mines Limited as at 30 June 2021 and the results of all subsidiaries for the year then ended. Burgundy
Diamond Mines Limited and its subsidiaries together are referred to in this financial report as the consolidated
entity.
Subsidiaries are all entities (including special purpose entities) over which the consolidated entity has the power
to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of
the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the consolidated entity controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They
are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between consolidated entity
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
The acquisition method of accounting is used to account for business combinations by the consolidated entity. A
change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the
difference between the consideration transferred and the book value of the share of the non-controlling interest
acquired is recognised directly in equity attributable to the parent.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of profit or loss and other comprehensive income, statement of changes in equity and statement of
financial position respectively.
e)
Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of the consolidated entity’s entities are measured using the
currency of the primary economic environment in which the entity operates (“functional currency”). The
consolidated financial statements are presented in Australian dollars, which is Burgundy Diamond Mines Limited’s
functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in profit or loss.
Consolidated entity companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
•
•
•
Assets and liabilities for each statement of financial position account presented are translated at the closing
rate at the date of that statement of financial position;
Income and expenses for each statement of profit or loss and other comprehensive income account are
translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case income and expenses are translated at the
dates of the transactions); and
All resulting exchange differences are recognised in other comprehensive income and included in the foreign
currency translation reserve in the statement of financial position.
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On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and
of borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment
are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
Exploration and evaluation expenditure
f)
Exploration and evaluation expenditure incurred is expensed at the end of the reporting period unless it relates to
a project that the Group has determined economically viable in which case it is carried forward to the extent that
it is expected to be recouped through the successful development of the area, or by its sale.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made.
g)
Current and Non-Current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be
realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are
classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
h)
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
NOTE 2
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various
factors, including expectations of future events management believes to be reasonable under the circumstances.
The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements,
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are discussed below.
Share based payments
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by using an
appropriate valuation model taking into account the terms and conditions upon which the instruments were
granted. 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.
NOTE 3
SEGMENT INFORMATION
The Group require operating segments to be identified on the basis of internal reports above components of the
Group that are regularly reviewed by the Board of Directors in order to allocate resources to the segments and to
assess their performance. On this basis, the Group’s reportable segments under AASB Operating Segments are
the Group’s exploration in Australia, Canada, Peru and Botswana.
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The accounting policies of the reportable segments are the same as the Group's accounting policies as described
in Note 1. Information regarding the Group's reportable segments is presented below.
2021
Peru
$
Canada Botswana
$
$
Australia
$
Other
$
Total
$
Other income
Exploration expenditure
Share based payments expense
Administration and other
expense
-
(35,045)
-
(1,128)
-
(2,851,624)
-
-
(517,087)
-
-
-
-
(6,540,780)
-
-
63,148
-
(448,690)
63,148
(9,944,536)
(448,690)
(1,786,833)
(1,787,962)
Loss before income tax
Income tax expense
Loss after income tax for the
year
(36,173)
-
(2,851,624)
-
(517,087)
-
(6,540,780)
-
(2,172,375)
-
(12,118,039)
-
(36,173)
(2,851,624)
(517,087)
(6,540,780)
(2,172,375)
(12,118,039)
Total assets
Total liabilities
2020
9,016
-
Peru
$
61,652
-
-
-
-
-
1,705,670
350,989
1,776,338
350,989
Canada Botswana
$
$
Australia
$
Other
$
Total
$
Other income
Exploration expenditure
Share based payments expense
Administration and other
expense
Loss before income tax
Income tax expense
Loss after income tax for the
year
Total assets
Total liabilities
NOTE 4
OTHER INCOME
-
-
(1,789,974)
-
-
-
-
40,548)
(14,617)
(55,165)
(1,789,974)
-
(55,165)
-
(1,789,974)
4,690
35,743
-
-
-
-
(346,021)
-
-
(346,021)
-
(346,021)
-
-
-
-
-
-
-
-
-
80,121
80,121
- (2,176,543)
(115,274)
(115,274)
(975,292)
(989,909)
(1,010,445)
(3,201,605)
-
-
(1,010,445)
(3,201,605)
4,371,557
216,344
4,411,990
216,344
Interest income
Australian Taxation Office ("ATO") Cash Flow Boost
2021
$
13,148
50,000
63,148
2020
$
30,121
50,000
80,121
Accounting Policy
Revenue
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it
is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
Interest Income
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Interest income is recognised when the Company gains controls of the right to receive the interest payment.
All revenue is stated net of the amount of goods and services tax.
NOTE 5
INVESTMENT IN CONTROLLED ENTITIES
Name
Country of Incorporation
Cottesloe Oil and Gas Pty Ltd (i)
BDM Del Peru S.A.C.
Nanuk Diamonds Inc.
1261620 B.C. Ltd. (ii)
Australia
Peru
Canada
Canada
i)
ii)
Deregistered on 11 February 2021
Incorporated on 17 August 2020
NOTE 6
INCOME TAX
Percentage Owned (%)
2020
100
100
100
-
2021
-
100
100
100
(a) The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense reported in the statement of profit or loss and other
comprehensive income
(b) The prima facie tax on loss from ordinary activities before income tax is
reconciled to the income tax as follows:
(Loss) / profit before income tax expense
Prima facie tax benefit on loss before income tax at 30% (2020: 30%)
Increase income tax expense due to:
Non-deductible expenses
Timing differences not recognised
Tax losses not brought to account
Tax effect of derivation of non-assessable income
Income tax expense/(benefit)
(c) Deferred tax assets not brought to account are:
Accruals/provisions
Business related costs
Tax losses
Capitalised expenditure
Capital raising
Set-off against deferred tax liabilities
2021
2020
$
-
-
-
$
-
-
-
(12,118,040)
(3,635,413)
(3,201,605)
(960,482)
129,272
2,841,072
665,069
-
-
22,305
20,561
2,527,217
3,289,148
137,648
(2,039)
238,686
385,431
336,365
-
-
8,762
16,202
1,862,148
415,608
82,369
(3,440)
Total deferred tax assets not brought to account
5,994,840
2,381,649
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(d) Deferred tax liabilities not recognised
Prepayments
Set-off against deferred tax assets
Total unrecognised deferred tax liabilities
The benefit for tax losses will only be obtained if:
2,039
(2,039)
-
3,440
(3,440)
-
(i)
(ii)
(iii)
The Group derives future assessable income in Australia of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised;
The Group continues to comply with the conditions for deductibility imposed by tax legislation in
Australia; and
There are no changes in tax legislation in Australia which will adversely affect the Group in realising
the benefit from the deductions for the losses.
At 30 June 2021, there is no recognised or unrecognised deferred income tax liability for taxes that would be
payable on the unremitted earnings of certain of the Group’s subsidiary as the Group has no liability for additional
taxation should such amounts be remitted.
Accounting Policy
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current Tax
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority.
Deferred Tax
Deferred tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit
or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the
reporting period. Their measurement also reflects the manner in which management expects to recover or settle
the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be
utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred
tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or
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different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of
the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or
liabilities are expected to be recovered or settled.
NOTE 7
LOSS PER SHARE
Basic loss per share amounts are calculated by dividing net loss for the year attributable to ordinary equity
holders of the Company by the weighted average number of ordinary shares outstanding during the year.
Diluted loss per share amounts are calculated by dividing the net loss attributable to ordinary equity holders of
the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted
average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary
shares into ordinary shares.
2021
$
2020
$
Net loss for the year attributable to ordinary equity holders
(12,118,039)
(3,201,605)
Weighted average number of ordinary shares outstanding during the year
used to calculate basic and diluted loss per share.
251,483,286
132,505,874
2021
Cents
2020
Cents
Loss per share attributable to ordinary equity holders of the Group
(4.82)
(2.42)
Options on issue are not considered dilutive to the earnings per share because the Company is in a loss making
position.
Accounting Policy
Basic earnings per share
Basic earnings per share are calculated by dividing:
• The profit attributable to owners of the Company, excluding any costs of servicing equity other than
ordinary shares; and
• By the weighted average number of ordinary shares outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into
account:
• The after-income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares; and
• The weighted average number of additional ordinary shares that would have been outstanding assuming
the conversion of all dilutive potential ordinary shares.
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NOTE 8
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
Total cash and cash equivalents
2021
$
2020
$
1,694,046
3,842,785
-
500,000
1,694,046
4,342,785
Cash at bank earns interest at floating rates based on daily deposit rates. Short-term deposits are made in varying
periods 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.
The Group’s exposure to interest rate and credit risks is disclosed in Note 13.
(a) Reconciliation of net loss after tax to net cash flows from operations
2021
$
2020
$
Loss for the financial year
(12,118,040)
(3,201,605)
Adjustments to add/(deduct) non-cash items:
Consideration shares issued for asset acquisition
1,420,000
1,520,000
Depreciation
Foreign currency
Share-based payments
Impairment of other assets
Changes in assets and liabilities
Trade and other receivables
Trade and other payables
Net cash used in operating activities
766
(6,394)
448,690
-
-
-
(40,034)
115,274
8,637
(46,134)
134,748
92,298
(10,120,230)
(1,551,564)
(b) Non-cash investing and financing activities
Adjustments for:
Consideration shares issued for asset acquisition
1,420,000
1,520,000
Accounting Policy
Cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short term high liquid
investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown
within short term borrowings in current liabilities in the statement of financial position.
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NOTE 9
TRADE AND OTHER RECEIVABLES
GST receivable
Other deposits and receivables
Total trade and other receivables
2021
$
50,684
24,811
75,495
2020
$
46,346
22,859
69,205
The consolidated entity has recognised a loss of $nil in profit or loss in respect of the expected credit losses for
the year ended 30 June 2021.
Accounting Policy
Trade and Other Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on
days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Goods and Services Tax (‘GST’)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as
part of the cost of acquisition of the asset of the assets or part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included as a current asset or liability in the
Consolidated Statement of Financial Position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST on investing and
financial activities, which are disclosed as operating cash flows.
Impairment of Assets
Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs
to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which they are separately identifiable cash inflows which are largely independent of the cash inflows from other
assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
NOTE 10
TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Other payables
Total trade and other payables
2021
$
2020
$
225,105
133,852
80,008
45,876
50,370
32,122
350,989
216,344
Due to the short-term nature of these payables, their carrying value is assumed to be the same as their fair
value.
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Accounting Policy
Trade payables and other payables represent liabilities for goods and services provided to the Group prior to the
end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
NOTE 11
CONTRIBUTED EQUITY
(a) Ordinary Shares
Ordinary shares
273,254,589
26,101,068
183,334,983
17,070,620
2021
2020
No.
$
No.
$
Ordinary shares entitle the holder to participate in dividends and the proposed winding up of the company in
proportion to the number and amount paid on the share hold.
(b) Movements in Ordinary Shares Issued
2021
At 1 July 2020
3 Jul 2020
6 Aug 2020
6 Aug 2020
Issue of shares to Managing Director (i)
Placement (ii)
Share purchase plan (ii)
10 Dec 2020
Exercise of options
20 Aug 2020
Exercise of options
24 Mar 2021
Issue of shares to Gibb River Limited
20 Apr 2021
Exercise of options
23 Apr 2021
Exercise of options
Transaction costs
Balance at 30 June 2021
Number
$
183,334,983
17,070,620
1,250,000
67,499,670
6,169,936
500,000
500,000
4,000,000
7,500,000
2,500,000
125,000
6,479,968
592,314
35,000
35,000
1,420,000
525,000
175,000
-
(356,834)
273,254,589
26,101,068
i)
Shareholders approved the issue of ordinary shares to Peter Ravenscroft on 2 July 2020 as part of his
executive employment agreement.
ii) Shares were issued to provide working capital to the Company.
2020
At 1 July 2019
17 Mar 2020
Issue of shares to acquire of the issued
capital of Nanuk Diamonds Inc
29 Jun 2020
Placement (i)
Transaction costs
Balance at 30 June 2020
Number
$
126,667,986
12,210,989
20,000,000
1,520,000
36,666,997
-
3,520,032
(180,401)
183,334,983
17,070,620
i)
Shares were issued to provide working capital to the Company.
Accounting Policy
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. Incremental costs directly attributable to the issue of new shares or options for the
acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
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If the Company reacquires its own equity instruments, for example as a result of a share buy-back, those
instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the
profit or loss and the consideration paid including any directly attributable incremental costs (net of income
taxes) is recognised directly in equity.
NOTE 12
RESERVES
Share based payments reserve
Foreign currency translation reserve
Total reserves
Movement reconciliation
Share-based payments reserve
2021
$
1,796,177
(75,879)
1,720,298
2020
$
1,472,487
(69,484)
1,403,003
Balance at the beginning of the year
1,472,487
1,357,213
Equity settled share-based payment transactions (Note 15)
323,690
115,274
Balance at the end of the year
1,796,177
1,472,487
Foreign currency translation reserve
Balance at the beginning of the year
Effect of translation of foreign currency operations to group
presentation
(69,484)
(6,395)
(29,451)
(40,033)
Balance at the end of the year
(75,879)
(69,484)
Share-based payment reserve
The share-based payment reserve is used to record the value of share-based payments provided to outside
parties, and share-based remuneration provided to employees and directors.
Foreign currency translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the presentation currency of the
reporting entity.
NOTE 13
FINANCIAL RISK MANAGEMENT
a. Accounting classifications and fair values
Cash and cash equivalents, trade and other receivables, and trade and other payables are short-term in nature
and their carrying values equate to their fair values. Financial assets at fair value through other comprehensive
income that comprise equity securities in listed entities are classified as level 1 in the fair value hierarchy and are
carried at the quoted price of the equity securities at the period end date.
b. Financial Risk Management Policies
Risk management has focused on limiting liabilities to a level which could be extinguished by sale of assets if
necessary.
The Group's activities expose it to a variety of financial risks; market risk (including interest rate risk, equity price
risk, commodity price risk and foreign currency risk), credit risk and liquidity risk. The Group's overall risk
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management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Group. The Group is engaged in mineral exploration and
evaluation and does not currently sell products and derives only limited revenue from interest earned.
Risk management is carried out by the Board and the Company has adopted a formal risk management policy.
c. Market risk
Interest rate risk
Exposure to interest rate risk arises on floating interest rates on term deposits of cash and cash equivalents only.
The Group has no debt arrangements and interest rate risk is not material.
Equity Price risk
The Group is not exposed to equity risk.
Commodity Price risk
The Group is not exposed to commodity price risk.
Foreign currency risk
Exposure to foreign currency risk may result in the fair value of future cash flows of a financial instrument to
fluctuate due to the movement in the foreign exchange rates of currencies in which the Group holds financial
instruments which are other than Australian dollar.
With instruments being held by overseas operations, fluctuations in currencies may impact on the Group’s
financial results. Since the Group has not yet commenced mining operations, the exposure is limited to short-
term liabilities for expenses which are payable in foreign currencies. The Group limits its foreign currency risk by
limiting funds held in overseas bank accounts and paying its creditors promptly. The Board regularly reviews this
exposure.
d. Credit risk
Credit exposure represents the extent of credit related losses that the Group may be subject to on amounts to be
received from financial assets. Credit risk arises principally from bank balances and trade and other receivables.
The objective of the Group is to minimise the risk of loss from credit risk. The Group’s exposure to bad debt risk is
insignificant.
e.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring
sufficient cash and marketable securities are available to meet the current and future commitments of the Group.
Due to the nature of the Group’s activities, being mineral exploration and development, the Group does not have
ready access to credit facilities, with the primary source of funding being equity. The Board of Directors constantly
monitor the state of equity markets in conjunction with the Group’s current and future funding requirements,
with a view to initiating appropriate capital raisings as required. Any surplus funds are invested with major
financial institutions.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the statement of
financial position. All trade and other payables are non-interest bearing and due within 30 days of the reporting
date.
f.
Capital risk management
The Group’s objectives when managing capital are to:
•
•
Safeguard their ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and
Maintain an optimal capital structure to reduce the cost of capital.
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In order to maintain or adjust the capital structure, the Group may adjust the number of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Given the stage of the Company’s development there are no formal targets set for return on capital. There were
no changes to the Company’s approach to capital management during the year. The Company is not subject to
externally imposed capital requirements. The net equity of the Company is equivalent to capital. Net capital is
obtained through capital raisings on the Australian Securities Exchange (“ASX”).
Accounting Policy
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part
of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair value depending on their classification. Classification is
determined based on both the business model within which such assets are held and the contractual cash flow
characteristics of the financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no
reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i)
held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making
a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements
are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such
upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss
allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether
the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses
that is attributable to a default event that is possible within the next 12 months. Where a financial asset has
become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is
based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured
on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument
discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance
is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other
cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss.
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NOTE 14
RELATED PARTY DISCLOSURE
a) Key Management Personnel Compensation
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term benefits
Post-employment benefits
Share-based payments
Total KMP Compensation
b) Transactions with related parties
2021
$
2020
$
613,412
425,181
52,630
27,903
238,000
115,274
904,042
568,358
During the financial year, the Company incurred fees of $121,880 for company secretarial and accounting services
paid/is payable to Mirador Corporate Pty Ltd (“Mirador”) (a company of which Mr Jeremy King is a director). At 30
June 2021, the Group had an outstanding payable to key management personnel and their related parties as
follows:
2021
$
$
20,328
3,819
15,056
22,583
-
-
-
2020
$
14,240
-
-
17,500
13,750
13,750
13,750
Mirador Corporate Pty Ltd (i)
Peter Ravenscroft
Marc Dorion
Mr Stephen Dennis
Michael O’Keeffe
Bushwood Nominees Pty Ltd(i)
Gas Transport Solutions Pty Ltd(ii)
Entity related to Jeremy King
(i)
(ii) Entity related to David Bradley
All transactions were made on normal commercial terms and conditions and at market rates. There were no other
transactions with KMP during the year ended 30 June 2021.
NOTE 15
SHARE-BASED PAYMENTS
a) Recognised share-based payment transactions
Shares issued to Directors (i)
Options issued to Directors (ii)
Options issued to consultants
Total share-based payments
2021
$
125,000
113,000
210,690
448,690
2020
$
-
115,274
-
115,274
(i)
Shareholders approved the issue of ordinary shares to Peter Ravenscroft on 2 July 2020 as part of his executive
employment agreement.
(ii) Following shareholder approval at the Annual General Meeting of shareholders on 18 November 2020, the Company
issued 2,500,000 Unlisted Options to Mr Truter following his appointment to the Board.
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b) Summary of options
30 June 2021
Options
Grant
Date
Date of
Expiry
Exercise
Price
Balance at
the start of
the year
Granted
during
the year
Exercised
during the
year
Balance at
the end of
the year
Directors
15-06-17
30-06-21
$0.07
10,000,000
Consultant
01-08-17
22-08-20
$0.07
Consultant
15-06-18
30-06-21
$0.07
500,000
500,000
Director
09-03-20
19-03-23
$0.07
2,500,000
-
-
-
-
Consultant
14-08-20
31-07-23
$0.12
Consultant
08-09-20
31-08-23
$0.12
Director
18-11-20
30-09-23
$0.12
- 2,500,000
- 2,500,000
- 2,500,000
(10,000,000)
(500,000)
(500,000)
-
-
-
-
-
-
-
2,500,000
2,500,000
2,500,000
2,500,000
13,500,000 7,500,000
(11,000,000) 10,000,000
Weighted average exercise price is $0.11
The fair value of the options granted is estimated as at the date of grant using a Black-Scholes model taking into
account the terms and conditions upon which the options were granted.
The following tables list the inputs to the model used for the year ended 30 June 2021.
Consultant
Options1
Consultant
Options2
Director
Options3
Number of listed options – Tranche 1
1,250,000
1,250,000
2,500,000
Number of listed options – Tranche 2
1,250,000
1,250,000
N/A
Grant date
Expiry date
Exercise price
Share price at grant date
Fair value of listed option – Tranche 1
Fair value of listed option – Tranche 2
Expected volatility
Risk-free interest rate
Valuation
14 Aug 2020
8 Sep 2020
18 Nov 2020
31 Jul 2023
31 Aug 2023
30 Sep 2023
$0.12
$0.097
$0.045
$0.050
100%
0.27%
$0.12
$0.089
$0.042
$0.047
100%
0.28%
$0.12
$0.095
$0.040
N/A
100%
0.11%
$118,000
$111,125
$113,000
1. 1,250,000 options vested on grant and the remaining 1,250,000 options vested on 1 August 2021.
2. 1,250,000 options vested on grant and the remaining 1,250,000 options vested on 1 September 2021.
3. Following shareholder approval at the Annual General Meeting of Shareholders on 18 November 2020, the
Company issued 2,500,000 Unlisted Options to Mr Truter following his appointment to the Board. The options are
subject to voluntary escrow for 24 months from date of issue.
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30 June 2020
Options
Grant
Date
Date of
Expiry
Exercise
Price
Directors
Consultant
Consultant
Director
15-06-17
01-08-17
15-06-18
09-03-20
30-06-21
22-08-20
30-06-21
19-03-23
$0.07
$0.07
$0.07
$0.07
Weighted average exercise price
$0.07
Balance at
the start of
the year
10,000,000
500,000
500,000
-
11,000,000
Granted
during the
year
-
-
-
2,500,000
2,500,000
Exercised
during
the year
-
-
-
-
Expired
during
the year
-
-
-
-
Balance at
the end of
the year
10,000,000
500,000
500,000
2,500,000
13,500,000
The options issued to the Mr Peter Ravenscroft, Director, of the Company, have been valued using the Black-
Scholes model. The model and assumptions are shown in the table below:
Black-Scholes Option Pricing Model
Grant Date
Expiry Date
Strike (Exercise) Price
Underlying Share Price (at date of
issue)
Risk-free Rate (at date of issue)
Volatility
Number of Options Issued
Dividend Yield
Probability
Black-Scholes Valuation
Total Fair Value of Options
Directors
09-03-20
19-03-23
$0.07
$0.083
0.38%
80%
2,500,000
0%
100%
$0.046
$115,274
Accounting Policy
Equity-settled and cash-settled share-based compensation benefits are provided to Key Management Personnel
and employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services,
where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using an appropriate valuation model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share,
the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the consolidated entity receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over
the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the
award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting
period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each
reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying
an appropriate valuation model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
• During the vesting period, the liability at each reporting date is the fair value of the award at that date
multiplied by the expired portion of the vesting period.
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• From the end of the vesting period until settlement of the award, the liability is the full fair value of the
liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash
paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases
the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over
the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award,
the cancelled and new award is treated as if they were a modification.
NOTE 16
COMMITMENTS
In June 2020, the Company entered into an Exploration Alliance Agreement (“Alliance”) with Diamond Exploration
Strategies Ltd (“DES”), a privately owned company focused on diamond exploration in Botswana. Under the terms
of the Alliance, BDM will provide funding of US$1,5 million over three years to finance exploration activities,
earning 50% ownership of any discoveries made. At 30 June 2021, the remaining commitment is approximately
US$1.2 million.
On 2 June 2020, the Company announced that it had entered into an Option Agreement with North Arrow
Minerals Inc (TSXV: NAR) over the Naujaat Diamond Project (Project) in the Nunavut territory of Canada. The
agreement provides Burgundy with the option to earn a 40% interest in the Project in return for funding of
CAD$5.6 million for a preliminary bulk sample of 1,500 – 2,000 tonnes. At 30 June 2021, the Company’s remaining
commitment under the Option Agreement was CAD$2,800,000.
NOTE 17
CONTINGENCIES
All purchases in Peru are subject to the payment of the Impuesto General a las Ventas (“IGV”) which is a General
Sales Tax. Eloro Resources Ltd is entitled to claim back the IGV tax it has paid on all Peruvian purchases which, if
successfully claimed, can then be recovered by BDM. As at 30 June 2021, the potential IGV tax receivable is
approximately US$354,155 (2020: US$352,080). A receivable has not been recognised at 30 June 2021 as receipt
of the amount is dependent upon Eloro and the Company meeting the IGV required refund and the assessment of
the relevant taxation authorities in Peru.
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NOTE 18
AUDITOR’S REMUNERATION
Amounts received or due and receivable by RSM Australia:
Audit and review of the annual and half-year financial report
36,000
33,500
2021
$
2020
$
Other services - RSM Australia:
-
-
Taxation services
Independent Expert’s Report
Other service- RSM Canada
-
Tax compliance services
NOTE 19
PARENT ENTITY
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the year
Total comprehensive loss
5,400
-
41,400
4,000
20,000
57,500
7,825
7,825
7,284
7,284
2021
$
2020
$
1,698,873
4,371,556
77,465
38,949
1,776,338
4,410,505
350,989
350,989
214,859
214,859
26,101,068
17,070,620
1,796,175
1,472,485
(26,471,894)
(14,347,459)
1,425,349
4,195,646
(12,124,435)
(3,241,638)
(12,124,435)
(3,241,638)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June
2020.
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Exploration commitments
The parent entity had exploration commitments as disclosed in Note 16.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed
through the report, except for the following:
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in joint ventures are accounted for at cost, less any impairment, in the parent entity.
•
•
• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt
may be an indicator of an impairment of the investment.
NOTE 20
EVENTS AFTER THE REPORTING DATE
As the impact of the COVID-19 pandemic is ongoing, it is not practicable to estimate the potential impact, positive
or negative, after the reporting date. The situation is still evolving and is dependent on measures imposed by the
Australian Government and other countries, such as maintaining social distancing requirements, quarantine,
travel restrictions and any further economic stimulus that may be provided.
On 26 July 2021, the Company announced that it had received binding commitments from institutional and
sophisticated investors to raise $50.2m in new capital via the issue of 35 million unsecured convertible notes with
a face value of $1 to raise $35.0 million (before issue costs and subject to shareholder approval) and a Share
Placement of 63,313,647 ordinary shares at $0.24 cents per share to raise approximately $15.2 million (before
costs of the offer). The Share Placement shares were issued on 2 August 2021 and shareholders approved the
issue of the convertible notes 14 September 2021.
On 25 August 2021 the Company paid a cash backed financial guarantee with an expiry date of 31 January 2027 of
$182,974 for a property lease contract for the Company’s head office.
On 14 September 2021, shareholders approved the issue of 3 million zero options with a 3-year expiry to Mr Peter
Ravenscroft, Managing Director and CEO, in recognition of Mr Ravenscroft’s achievement of his short term
incentive milestones.
Other than the above, there has been no other matter or circumstance that has arisen since the end of the
financial year that has significantly affected, or may significantly affect, the operations of the Group, the results of
those operations, or the state of affairs of the Group.
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Directors’ Declaration
In the Directors’ opinion:
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in Note 1 to the financial
statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial
position as at 30 June 2021 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the directors
Stephen Dennis
Non-Executive Chairman
30 September 2021
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
BURGUNDY DIAMOND MINES LIMITED
Opinion
We have audited the financial report of Burgundy Diamond Mines Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Exploration Expenditure
Refer to Statement of Profit or Loss and Other Comprehensive Income and Note 1(f).
Our audit procedures included:
The Group has incurred exploration expenditure of
$9,944,536 for the year ended 30 June 2021, which
• Reviewing the key terms and conditions of the joint
has been recognised as an expense
the
statement of profit or loss and other comprehensive
income in accordance with the Group’s accounting
policy. This is primarily comprised of expenditure to
earn an interest in diamond projects in Canada,
Botswana and Australia.
joint venture
partners that cash calls transferred/paid have been
that would qualify as
expended on activities
exploration activities in accordance with the joint
venture agreements and the Group’s earned interest
in its projects at the reporting date;
venture agreements;
• Obtaining confirmation
from
the
to
Exploration expenditure is a key audit matter as it is
the most significant expense in the statement of
profit or loss and other comprehensive income.
• Performing substantive
testing on exploration
expenditure expense on a sample basis;
• Assessing whether the Group’s accounting policy for
in accordance with
exploration expenditure
Australian Accounting Standards; and
is
• Assessing the adequacy of the disclosures in the
financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2021, but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of Burgundy Diamond Mines Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 30 September 2021
ALASDAIR WHYTE
Partner
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Corporate Governance Statement
The Board of Directors of Burgundy Diamond Mines Limited is responsible for the corporate governance of the
Company. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders
by whom they are elected and accountable. The Board continuously reviews its governance practices to ensure
they remain consistent with the needs of the Company.
The Company complies with each of the recommendations set out in the Australian Securities Exchange
Corporate Governance Council’s Corporate Governance Principles and Recommendations 3rd Edition (“the ASX
Principles”). This statement incorporates the disclosures required by the ASX Principles under the headings of the
eight core principles. All of these practices, unless otherwise stated, are in place.
The Company’s Corporate Governance Statement and policies can be found on its website at www.BDM-
resources.com.
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ADDITIONAL ASX INFORMATION
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ASX Additional Information
Additional information required by the Australian Securities Exchange and not shown elsewhere in this Annual
Report is as follows. The information is current as of 28 September 2021.
1. Fully paid ordinary shares
•
•
• Holders of fully paid ordinary shares are entitled to participate in dividends and the proceeds on winding up
There is a total of 336,568,236 fully paid ordinary shares on issue which are listed on the ASX.
The number of holders of fully paid ordinary shares is 1,358.
of the Company.
There are no preference shares on issue.
•
2. Distribution of fully paid ordinary shareholders is as follows:
Holding Ranges
above 0 up to and including 1,000
above 1,000 up to and including 5,000
above 5,000 up to and including 10,000
above 10,000 up to and including 100,000
above 100,000
Totals
Holders
53
234
219
578
274
1,358
Total Units
4,923
723,293
1,816,828
22,386,396
311,636,796
336,568,236
% Issued
Share Capital
0.00%
0.21%
0.54%
6.65%
92.59%
100.00%
3. Holders of non-marketable parcels
Holders of non-marketable parcels are deemed to be those whose shareholding is valued at less than $500.
There are 120 shareholders who hold less than a marketable parcel of shares, amount to 0.03% of issued capital.
4. Substantial shareholders of ordinary fully paid shares
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
Holding Balance % of Issued Capital
MICHAEL O’KEEFFE
27,903,535
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
23,080,000
HSBC & FRAYNE
5. Restricted Securities
None
6. Share buy-backs
18,451,656
8.29%
6.86%
5.48%
There is currently no on-market buyback program for any of BDM Resources’ listed securities.
7. Voting rights of Shareholders
All fully paid ordinary shareholders are entitled to vote at any meeting of the members of the Company and
their voting rights are on:
Show of hands – one vote per shareholder; and
Poll – one vote per fully paid ordinary share.
•
•
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8. Major Shareholders
The Top 20 largest fully paid ordinary shareholders together held 53.99% of the securities in this class and
are listed below:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Holder Name
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
WYNNCHURCH STRATEGIC OPPORTUNITY LP (A DELAWARE LP)
PROSPECT AG TRADING PTY LTD
EASTBOURNE DP PTY LTD
9064-6316 QUEBEC INC
SANDY DOG PTY LTD
CITICORP NOMINEES PTY LIMITED
ANDJEN PTY LTD
SANDY DOG PTY LTD
DR SALIM CASSIM
CS THIRD NOMINEES PTY LIMITED
MR STEPHEN BRUCE DENNIS & MRS ALISON JILL DENNIS
ZERO NOMINEES PTY LTD
BUSHWOOD NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
SABRINA PAULINE MARSHALL
BASS FAMILY FOUNDATION PTY LTD
METECH SUPER PTY LTD
BLUE CRYSTAL PTY LTD
Totals
Number
Held
23,080,000
18,451,656
14,583,334
14,353,535
11,050,000
11,041,667
9,375,000
7,358,912
6,033,138
5,995,191
5,300,000
5,231,992
5,189,957
5,125,000
4,831,822
4,660,000
4,375,000
4,350,000
4,200,000
4,166,667
168,752,871
Percentage
6.86%
5.48%
4.33%
4.26%
3.28%
3.28%
2.79%
2.19%
1.79%
1.78%
1.57%
1.55%
1.54%
1.52%
1.44%
1.38%
1.30%
1.29%
1.25%
1.24%
50.14%
9. Unlisted Options
•
•
•
•
•
•
2,500,000 options expiring 19 March 2023, exercisable $0.07
2,500,000 options expiring 31 July 2023, exercisable $0.12
2,500,000 options expiring 31 August 2023, exercisable $0.12
2,500,000 options expiring 30 September 2023, exercisable $0.12
10,000,000 options expiring 23 September 2024, exercisable $0.36
3,000,000 options expiring 21 September 2024, There is no consideration payable for the options.
10. Tax Status
The Company is treated as a public company for taxation purposes.
11. Franking Credits
The Company has no franking credits.
Business Objectives
Burgundy Diamond Mines Limited has used cash and cash equivalents held at the time of re-compliance in a
way consistent with its stated business objectives.
12. Securities Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the
Australian Securities Exchange Limited under Security Code EHX.
13. Registered Office
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Suite 2, Level 1, 1 Altona Street
West Perth WA 6005
Telephone: 08 6559 1792
Website: www.burgundy-diamonds.com
14. Company Secretary
Ms Sarah Smith
15. Share Registry
Automic Share Registry
Level 2, 267 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
16. Group Assets
Project
Location Area
La Victoria Project Peru
~80km2
Nature of
Interest
Farm-in
Agreement
Holder
Interest at
beginning
of year
Interest at
end of
year
Eloro Resources Limited
18%
18%
Nanuk Diamonds Quebec,
Canada
274km2 100%
Nanuk Diamonds Inc.
100%
100%
Acquisition
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