More annual reports from Carnavale Resources:
2023 ReportABN 49 119 450 243
AND CONTROLLED ENTITIES
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2023
CARNAVALE RESOURCES LIMITED
CONTENTS
Corporate Directory
Review of Operations
Directors' Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor’s Report
Shareholder Information
Annual Mineral Resources and Ore Reserves Statement
Schedule of Mineral Concession Interests
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CARNAVALE RESOURCES LIMITED
CORPORATE DIRECTORY
DIRECTORS
Ron Gajewski
Andrew Beckwith
Rhett Brans
CHIEF EXECUTIVE OFFICER
Humphrey Hale
COMPANY SECRETARY
Paul Jurman
PRINCIPAL AND REGISTERED
OFFICE
Level 2, Suite 9
389 Oxford Street
Mount Hawthorn WA 6016
AUDITORS
SHARE REGISTRY
SECURITIES EXCHANGE
Telephone:
Facsimile:
Email:
Website:
(08) 9380 9098
(08) 9380 6761
admin@carnavaleresources.com
www.carnavaleresources.com
HLB Mann Judd (WA Partnership)
Level 4, 130 Stirling Street
Perth WA 6000
Automic Group
Level 2, 267 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
Australian Securities Exchange
Level 40, Central Park
152-158 St Georges Terrace
Perth WA 6000
ASX CODE
CAV
1
CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
Introduction
Carnavale Resources Limited (“Carnavale” or “Company”) is currently focused on its gold projects in Western
Australia. Having completed a $3.1 million capital raising after year end, Carnavale’s primary goal is to explore
and discover high-grade, truckable resources, of a similar size to the historic Cosmopolitan Mine that can be
processed at an existing third-party nearby processing plant. The McTavish East Prospect is located 15km
from Genesis Minerals Ltd’s Ulysses Project and 63 km from Genesis’ newly acquired processing plant at
Leonora. The Company continues to evaluate new opportunities associated with the rapidly increasing demand
within the electric battery sector and other new-age disruptive technologies, together with the gold, nickel and
copper resource sector.
Figure 1: Carnavale tenement holding with historic deposits.
At the Kookynie Gold Project results were received in July 2022 from the second program of RC drilling
(5,210m) that discovered a new high-grade gold zone at McTavish North in fresh rock. This RC program
was following up on bonanza grade gold results received in January 2022 that defined a new high-grade lode
in fresh rock at McTavish East. In addition, results were received in September 2022 from the fourth aircore
drilling program completed along the 1.1km long prospective structure between McTavish East and
Champion South that expanded the high-grade McTavish East discovery by 200m. Also, results were
received in October 2022 from a program of 3 diamond tails for 490m of diamond drilling that was completed
at McTavish East testing down dip extensions to the mineralised structure and providing detailed geological
information for future resource work. A third program of RC drilling was completed in May 2023 at McTavish
East for 10 holes and 1,550m with results received in July 2023 containing the best results at the Kookynie
project to date.
At the Ora Banda South Gold Project results were received from a substantial, 8,885m, third aircore drilling
program. The drilling was following up on strong results received from two earlier aircore drilling programs. In
addition, CAV completed the first program of wide spaced RC drilling at the Carnage Prospect following up on
excellent high-grade gold results from CAV aircore drilling in the regolith. In October 2022, CAV elected to
exercise its Option pursuant to the agreement to acquire 80% of the Ora Banda South Gold Project from
Western Resources Pty Ltd. (refer CAV ASX release dated 5 October 2020 and 4 October 2022)
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CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
Kookynie Gold Project
Carnavale identified the Kookynie-Leonora region as highly prospective with known past and current high-
grade gold mines, yet significant areas, mostly undercover, remained under-explored by modern methods.
Extensive historic gold mining occurred between 1895 and 1922 throughout the Kookynie area, including the
Cosmopolitan mine, the largest gold producer where historic high-grade gold production amounted to more
than 331,000 ounces of gold1 at 15g/t.
Ref. 1 The Mining Handbook Geol. Surv. Memoir No 1. Chapter2, Economic Geology, Part3, Section1, 1919,
Englishman/Cosmopolitan Mine production records listed on Minedex (https://minedex.dmirs.wa.gov.au/).
Figure 2: Plan showing McTavish North, McTavish East and Champion South with prospective
corridor
Since 2021, the prospective McTavish East Prospect trend has been defined over approximately 2km by
aircore and RC drilling. The McTavish North Prospect has been expanded by aircore drilling and confirmed
by one round of RC drilling.
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CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
McTavish East
During the period the Company received results for two RC drilling programs, a diamond drilling program and
a fourth aircore program, targeting new mineralisation along the main mineralising structure between McTavish
East and Champion South.
The first RC and Diamond drilling program expanded the high-grade gold mineralisation within the large-scale
mineralising structure that trends across the Kookynie tenement package to Champion South.
The high-grade gold mineralisation is hosted within southernly plunging shoots along this large-scale NE-SA
striking structure. This is shown on the contoured long section (figure 3). As a result of detailed RC drilling CAV
increased the scale of the mineralized zone at McTavish East by defining an area striking 700m by 200m
down dip on the large-scale structure that remains open at depth.
High grade results from the second RC program at McTavish East included:
4m @ 18.59g/t from 122m in MERC024
7m @ 6.98g/t from 225m in MERC030 (Including 1m @ 28.8g/t from 225m*)
2m @ 18.77g/t from 168m in MERC036
4m @ 10.67g/t from 55m in MERC031(Including 1m @ 21.3g/t from 55m*)
5m @ 3.85.g/t from 64m MERC0031
3m @ 5.11/t from 234m in MERC030
Aircore program along prospective corridor
CAV completed a fourth program of 104 aircore holes for 5,109m of drilling, with results reported in September
2022, targeting the continuity of the gold anomalism identified by the earlier drilling along the untested section
of the mineralised corridor that hosts the high-grade McTavish East prospect to the southwest and the
Champion South project to the Northeast. A limited amount of previous aircore drilling had outlined a 0.1g/t
gold anomaly hosted within the transported cover along this main structure. This program extended the high-
grade mineralised zone in the regolith at McTavish East by 150m to 700m of strike. A new, high grade gold
zone was identified under cover in the regolith along the McTavish East trend with 150m of strike.
In addition, this aircore drilling identified additional shallow, high-grade gold mineralisation under cover further
to the NE along the extensive mineralised corridor. Significant intercepts included:
10m @ 5.78g/t from 32m (inc. 6m @ 9.08g/t and 2m @ 1.4g/t) in KOAC398
4m @ 13.28g/t from 24m and 2m @ 1.14g/t from 32m in KOAC487
8m @ 4.98g/t from 44m (inc. 6m @ 6.37g/t) in KOAC488
9m @ 2.88g/t from 54m in KOAC396 (ends in mineralisation)
The third RC program targeted new high-grade mineralisation in the fresh rock beneath the strong
mineralisation discovered in the aircore program detailed above. 9 out of 10 RC holes recorded bonanza high
grade gold mineralisation that included:
6m @ 79.21g/t Au from 97m in MERC044 (inc.3m @ 152g/t *)
4m @ 75.74g/t Au from 114m in MERC047 (inc.3m @ 100.25g/t*)
8m @ 13.65g/t Au from 116m in MERC045 (inc.1m @ 25.9g/t and 3m @ 24.5g/t*)
5m @ 24.56g/t Au from 79m in MERC046 (inc.3m @39.43g/t*)
7m @ 16.15g/t Au from 67m in MERC043 (inc.1m @ 83.2g/t and 1m @ 15.15g/t*)
*Intercepts are calculated with a lower Au cut-off of 0.5g/t with no included waste, inclusions are calculated with lower Au cut-off of 10g/t
with no included waste.
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CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
Figure 3: Long section through McTavish East latest RC drilling in blue callouts
The tenor of the mineralisation intersected from the third round of RC drilling is the strongest encountered to
date at McTavish East. CAV is very encouraged by these results, as there are further aircore anomalies
concealed undercover along the main 2km long mineralising structure that trends to the Champion South
prospect (Figure 2). Additional modest gold anomalies occur elsewhere within the tenement package that also
require follow-up.
Diamond Drilling at McTavish East
During the period, CAV completed 3 diamond tails for 490m to test depth extensions of the mineralisation and
provide detailed geological information, which is generally not available from RC drilling. The information
gathered from the diamond drilling has provided important information on the orientation of the mineralizing
structures and their interaction with the host geology in the local area at McTavish East as well as detail on
the rock strength and density.
5
CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
McTavish North
Aircore at McTavish North
The gold anomalies to the north of Nex Metals Explorations Ltd (NME) and Metalicity Ltd (MCT)’s McTavish
tenement (McTavish North) are characterised by a number of shallow old workings and pits. This was the
focus of CAV’s initial exploration at McTavish North.
The third aircore drilling program at the Kookynie Gold Project consisted of two lines of Aircore that were drilled
to test the extents of mineralisation. The drilling intercepted high-grade shallow gold mineralisation in
weathered rock. The strike length of identified mineralisation at McTavish North is 350m and remains open
to the North (Figure 2).
RC at McTavish North
CAV drilled an initial 9 RC holes into the McTavish North prospect during the second RC drilling program at
the Kookynie Gold Project. This represents the first RC drilling into the McTavish North prospect by any
Company which has resulted in a new, shallow, high-grade, fresh rock, gold discovery with intersections
including:
11m @ 14.30g/t from 51m in MNRC005 (Including 1m @ 43.3g/t from 52m and 2m @ 44.17g/t from
55m)
1m @ 9.03g/t from 80m in MNRC004
1m @ 8.60g/t from 107m in MNRC004
The high-grade intercept in MNRC005 is within a steeply dipping quartz vein 25m directly beneath the high-
grade intercept in aircore hole KOAC356 of 2m @ 4.64g/t in the regolith. The mineralisation in the regolith
profile provided a vector to the newly discovered, shallow, high-grade gold mineralisation intersected in fresh
rock by MNRC005 at depth.
Exploration Strategy
CAV’s planned work program at the Kookynie Gold Project includes:
RC drilling testing the high-grade plunging shoots defined by the latest RC program on a 20m x
20m pattern at McTavish East.
Drill test the down plunge extensions of the high grade shoots below 200m vertically chasing high-
grade tonnes at McTavish East.
The Company plans to define high-grade, truckable resources that can be delivered to nearby processing
plants providing an asset base to CAV at McTavish East and North; and
Identify additional targets within the Kookynie tenement package.
6
CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
Ora Banda South Gold Project (OBSP)
In February 2023 CAV announced results of the first program of reconnaissance RC drilling at the Carnage
Prospect following up on excellent high-grade gold results from aircore drilling in the regolith.
The Company completed 9 holes of wide-spaced RC drilling for 1,841m program targeting the extensive
2.1km strike extent of the Carnage Prospect. Significant results included:
1m @ 9.49g/t from 137m in OBRC007
3m @ 0.45g/t from 72m in OBRC004
2m @ 0.65g/t from 49m in OBRC007
5m @ 0.26g/t from 69m in OBRC002
8m @ 0.15g/t from 63m in OBRC007
Previous significant results from CAV aircore drilling at the Carnage Prospect include:
4m @ 30.20g/t from 44m in OBAC413
7m @ 5.95g/t from 80m in OBAC379 (ends in mineralisation)
8m @ 2.74g/t from 48m in OBAC089
4m @ 2.69g/t from 36m in OBAC306
The drilling confirmed extensive gold anomalism in the saprock profile at the Carnage Prospect with high-grade
intersection in fresh rock and has determined that the Carnage prospect has favourable geology with the
potential to host a significant gold deposit, with major shear structures crosscutting a sedimentary basin with a
substantial regolith gold anomaly identified by CAV in aircore over many kilometres.
The geochemistry at the Carnage prospect was prospective in arsenic, tin, tungsten and bismuth that correlates
with the best gold anomalism suggesting an intrusion related source for the gold system.
CAV is confident that RC drilling at the Carnage prospect has confirmed gold anomalies and structural targets
under alluvial cover first identified by CAV aircore drilling. The tenement package is prospective along the 15km
(Figure 6).
The RC drilling program at the Carnage prospect consisted of a wide spaced 100m x 200m program targeting
the central 1.4km section of the Carnage Prospect gold anomaly. The program confirmed the scale of the broad
gold anomaly in the regolith and intersected high-grade gold in the fresh rock with 1m @ 9.49g/t (Figure 4) from
137m in hole OBRC007. This intercept provides evidence of high-grade gold in fresh rock and the potential for
a larger gold system in the fresh rock that could account for the large scale 1.4km gold anomaly. Further drilling
is required to determine the fresh rock source of the substantial regolith anomalies.
The geology at Carnage is dominated by the Carnage Shear passing through a sedimentary host package. The
sediments are disrupted by intrusive rocks that provide the potential to influence the location of dilatory zones,
favourable for gold deposition in the fresh rock. The high-grade gold intersected in OBRC 007 is associated
with quartz veining and an alteration assemblage typical of the goldfields including quartz, carbonate, and
sericite alteration with minor pyrite adjacent to a mafic intrusive. CAV is reviewing the geochemistry with the
structural information and geology to plan further exploration at Carnage to discover the source of the
substantial gold anomalism.
7
CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
Figure 4: Plan of The Carnage Prospect at the Ora Banda South Gold Project with CAV drilling and
selected significant CAV RC drilling in yellow callouts.
The exploration aim at Ora Banda is to discover a large-scale gold deposit within the sedimentary package on
the Carnage shear analogous to the St Ives Discovery. The first round of reconnaissance RC drilling has
intersected high grade gold in fresh rock. This suggests that there may be a larger fresh rock gold system that
is responsible for the extensive, kilometre scale, regolith gold anomaly at the Carnage prospect.
8
CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
Figure 5: Section A’ B’ across the Carnage Prospect showing the relationship of the high grade gold
in fresh rock to the broad regolith gold anomaly.
Figure 6, Location map with geochemical contours over regional aero magnetics.
Next steps
CAV’s proposed work program at the Ora Banda South Gold Project includes:
Identify additional RC drill targets within the Ora Banda South Gold Project tenement package.
Continue to evaluate new tenement opportunities adjacent to the project area.
9
CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
Grey Dam Nickel Sulphide Project.
Carnavale completed a ground based MLEM survey aiming to delineate direct drilling targets associated with
5 nickel / copper soil anomalies identified by the earlier UFF soil sampling program and one historic drillhole
with anomalous nickel results.
The mafic / ultramafic sequence at Grey Dam is located immediately along strike and is the same geological
sequence that hosts the new Kambalda style, nickel sulphide Emu Lake discovery recently reported by ARL.
The new Emu Lake discovery demonstrates the nickel sulphide fertility of the mafic ultramafic sequence.
Figure 7: MLEM survey lines, preliminary model plates in red, and tenement boundaries all over a
magnetic image (2vdagc)
These EM conductors line up with the interpreted mafic/ultramafic package and the contact with the
sedimentary units. A number of the conductors identified in the MLEM survey are coincident with the soil
anomalies identified by the UFF soil survey.
The tenor of the EM conductors is low and does not immediately suggest the presence of economic nickel
sulphides, however, the depth of cover and the nature of the soil anomalies identified by the UFF soil
sampling program need to be considered when evaluating the prospectivity of the new EM conductors.
CAV spent 3 years exploring the Grey Dam Project for nickel sulphides on ground held by CAV and
tenements held under option. CAV has downgraded the potential for the discovery of economic nickel
sulphides at the Grey Dam Project and resolved not to exercise the option to acquire an 80% interest in the
tenements held by Mithril Resources Ltd. (E28/2567, E28/2682, E28/2760, and E28/2506) and E28/2587
from Simon Buswell-Smith.
10
CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
Further work at the Grey Dam Project has focused on the Nickel Cobalt laterite resource. 2 aircore holes
were drilled into the resource to collect sample material for a program of metallurgical testwork to investigate
new methods of leaching the laterite material to leach the nickel cobalt metal into solution more economically.
Carnavale has commissioned Amity Mining Ltd as metallurgical consultant to work with Nagrom on this
project.
Barracuda PGE-Ni-Cu Project
On 23 August, 2022 Carnavale announced that it entered into an option agreement for the sale of its
Barracuda Project with Midas Resources Ltd (ASX: MM1) (Midas) as part of its strategy of crystallizing value
from its portfolio of non-core exploration assets. The Company, through its wholly owned subsidiary Tojo
Minerals Pty Limited (Tojo), entered into a binding Heads of agreement with Midas under which Midas has
an exclusive option to acquire Tojo’s interests in E58/551.
Material Terms and Conditions of the Option Agreement are as follows:
Midas has paid $20,000 for the initial 12-month option period and in August 2023 paid a further
$20,000 on the first anniversary to extend the option term.
Midas will pay a further $20,000 on the second anniversary, if it elects to extend the option term.
Exercise of the option is conditional on completion of due diligence on E58/551 to the satisfaction
of Midas and obtaining all other necessary third-party consents and approvals (including in relation
to the existing royalty related to E58/551).
Midas can exercise the option with payment of $300,000, which Midas can elect to satisfy in Midas
shares at a deemed issue price of the 5-trading day volume weighted average price of Midas
shares immediately prior to the exercise of the option.
Midas will pay a further $500,000 on completing a JORC compliant mineral resource within the
tenement area; and
CAV will receive a 0.5% NSR and Midas will assume responsibility for an existing 0.5% NSR to
third parties.
New Opportunities
The Company continues to assess new opportunities for high demand metals, such as gold, nickel, tin,
copper, nickel and cobalt, to supply the increasing demand for technology metals consumed in the rapidly
growing batteries, electric motors and electronics industry.
Corporate
Capital Raisings and Share issues
During the period, the Company elected to exercise its Option pursuant to the agreement to acquire 80% of
the Ora Banda Gold Project from Western Resources Pty Ltd (refer ASX release dated 5 October 2020). Upon
exercise of the Option, Carnavale paid $150,000 cash and issued 15 million ordinary shares to Western
Resources Pty Ltd. Western Resources Pty Ltd is free carried until completion of a Bankable Feasibility Study.
Subsequent to the end of the period, CAV issued 600 million shares at an issue price of $0.0045 each to raise
$2.7 million to high net worth overseas, sophisticated and professional investors, comprising existing and new
shareholders (“Placement”) (before costs of raising). In September 2023 following receipt of shareholder
approval, Carnavale Chairman, Mr Ron Gajewski and non-executive director, Mr Andrew Beckwith each
subscribed for 45 million new ordinary shares at $0.0045 raising a further $405,000.
Argonaut Securities Pty Ltd (‘Argonaut’) was appointed as Lead Manager for the Placement. For managing
the Placement (including obtaining the firm commitments), Argonaut (and its nominees) subscribed for 67.5
million options exercisable at $0.007, expiring on or before 31 July 2025 at an issue price of $0.00001
(‘Options’).
11
CARNAVALE RESOURCES LIMITED
REVIEW OF OPERATIONS
Competent Person’s Statement
The information in this report that relates to Exploration Results is based on, and fairly represents, information
compiled by Mr Humphrey Hale, who is a Member of the Australasian Institute of Geoscientists. Mr Hale is the
Chief Executive Officer of Carnavale and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a
competent person as defined in the 2012 Edition of the “Australasian Code for reporting of Exploration Results,
Exploration Targets, Mineral Resources and Ore Reserves” (JORC Code). Mr Hale consents to the inclusion
in this report of the matters based upon his information in the form and context in which it appears.
Information relating to Previous Disclosure
The technical and financial information in this report that relates to the Grey Dam Project has been previously
reported by the Company in compliance with JORC 2012 in various releases between 19 March 2018 and 10
August 2022. The technical and financial information in this report that relates to the Kookynie Gold Project
has been previously reported by the Company in compliance with JORC 2012 in various releases between 4
August 2020 and 5 July 2023. The technical and financial information in this report that relates to the Ora
Banda South Gold Project has been previously reported by the Company in compliance with JORC 2012 in
various releases between 5 October 2020 and 21 February 2023. The technical and financial information in
this report that relates to the Barracuda PGE-Ni-Cu Project has been previously reported by the Company in
compliance with JORC 2012 in various releases between 11 March 2021 and 25 January 2022.
The Company confirms that it is not aware of any new information or data that materially affects the information
included in these earlier market announcements.
Statements regarding Carnavale Resources’ plans with respect to its mineral properties are forward-looking
statements. There can be no assurance that Carnavale Resources’ plans for development of its mineral
properties will proceed as currently expected. There can also be no assurance that Carnavale Resources’ will
be able to confirm the presence of additional mineral deposits, that any mineralisation will prove to be economic
or that a mine will successfully be developed on any of Carnavale Resources’ mineral properties.
12
CARNAVALE RESOURCES LIMITED
DIRECTORS’ REPORT
The Directors of Carnavale Resources Limited submit herewith the annual financial report of Carnavale
Resources Limited (“Company”) and its controlled entities (“Group”) for the year ended 30 June 2023 and the
independent auditor’s report thereon. In order to comply with the provisions of the Corporations Act 2001, the
Directors report as follows:
DIRECTORS
The names and particulars of the directors of the Company during or since the end of the financial year are as
follows.
Directors were in office for the entire period unless otherwise stated.
Ron Gajewski, BBus, CPA
Non-Executive Chairman
Appointed 18 October 2006
Mr Gajewski is an accountant by profession, with many years of experience as a director of public listed
companies and as a corporate advisor to public companies.
Mr Gajewski has previously held directorships with mining companies listed in both Canada and Australia.
Mr Gajewski holds no other listed company directorships and has held no other listed company directorships in
the last 3 years.
Andrew Beckwith, BSc Geology, AusIMM
Non-Executive Director
Appointed 29 July 2014
Mr Beckwith is a geologist, with a career spanning 30 years across the Australian mining industry. Roles include
senior technical and management roles within a range of companies from large gold producers to small explorers
through to corporate positions in ASX listed companies including Managing Director at Westgold and is currently
a Director at De Grey Mining. He has been involved in many successful exploration teams including the early
stages of the multi-million ounce Tropicana gold discovery (AngloGold Ashanti) and oversaw the growth in
resources at Westgold, through a combination of organic exploration and corporate acquisition to established
~5.0M ounces in gold resources, which has gone on to become a leading Australian gold producer. More
recently at De Grey, he has been intimately involved with the rapid growth of gold resources from 0.3Moz to the
current 10.6Moz, and the recent discovery of the large Hemi gold deposit.
During the past three years he has also served as a director of the following listed companies:
Company
De Grey Mining Limited
Date appointed
26 October 2017
Date ceased
-
Rhett Brans, MIEAust CPEng
Independent Non-Executive Director
Appointed 17 September 2013
Mr Brans is a civil engineer with more than 45 years of experience in project development of treatment plants
and mine developments and an experienced director having fulfilled directorship responsibilities in a number of
ASX listed mining companies since 2004.
Throughout his career, Mr Brans has been involved in the co-ordination and management of scoping and
feasibility studies and the design and construction of mineral treatment plants across a range of commodities
and geographies including gold in Ghana, copper and lithium in the DRC, graphite in Mozambique, gold, copper,
coal and mineral sands in Australia. He has extensive experience as an owner’s representative for several
successful mine feasibility studies and project developments.
During the past three years he has also served as a director of the following ASX listed companies:
Company
Australian Potash Limited
AVZ Minerals Limited
Date appointed
9 May 2017
5 February 2018
Date ceased
-
-
13
CARNAVALE RESOURCES LIMITED
DIRECTORS’ REPORT
COMPANY SECRETARY
Paul Jurman, BCom, CPA
Appointed 22 November 2006
Mr Jurman is a Certified Practising Accountant with over 15 years’ experience and has been involved with a
diverse range of Australian public listed companies in company secretarial and financial roles. He is also
company secretary of Tempest Minerals Limited, Lord Resources Limited and Platina Resources Limited.
Directors’ interests
The relevant interests in the shares and options of the Company at the date of this report are as follows:
Name
Ordinary shares
R Gajewski
A Beckwith
R Brans
198,910,227
99,543,188
5,000,000
Unlisted Options
Ex $0.012, expiring 30/11/23
25,000,000
25,000,000
10,000,000
Unlisted Options
Ex $0.008, expiring 31/03/25
20,000,000
20,000,000
5,000,000
No director has an interest, whether directly or indirectly, in a contract or proposed contract with the Group.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the course of the year was acquiring and exploring mineral interests,
prospective for precious metals and energy.
RESULTS AND DIVIDENDS
The consolidated loss after tax for the year ended 30 June 2023 was $452,609 (2022: $1,412,618). No dividends
were paid during the year and the Directors do not recommend payment of a dividend.
LOSS PER SHARE
Basic loss per share for the year was 0.017 cents (30 June 2022: 0.06 cents).
REVIEW OF OPERATIONS / OPERATING AND FINANCIAL REVIEW
The Group is currently engaged in mineral exploration for metals in Australia. A review of the Group’s
operations, including information on exploration activity and results thereof, financial position, strategies and
projects of the Group during the year ended 30 June 2023 is provided in this Annual Report and, in particular,
in the "Review of Operations" section immediately preceding this Directors’ Report. The Group’s financial
position, financial performance and use of funds information for the financial year is provided in the financial
statements that follow this Directors’ Report.
The head of the UN World Health Organization declared an end to COVID-19 as a public health emergency in
May 2023, whilst noting it remains a global health threat. COVID-19 did not have a significant direct financial
impact on the Company during the year. Staff have remained in good health and the Company’s planned
exploration programs have not been impacted by COVID-19 in any significant way. It is not practical to quantify
the exact financial impact of COVID-19 during the year, but the financial impact was not significant to the current
year's result.
As an exploration entity, the Group has no operating revenue or earnings and consequently the Group’s
performance cannot be gauged by reference to those measures. Instead, the Directors consider the Group’s
performance based on the success of exploration activity, acquisition of additional prospective mineral interests
and, in general, the value added to the Group’s mineral portfolio during the course of the financial year.
Whilst performance can be gauged by reference to market capitalisation, that measure is also subject to
numerous external factors. These external factors can be specific to the Group, generic to the mining industry
and generic to the stock market as a whole and the Board and management would only be able to control a
small number of these factors.
14
CARNAVALE RESOURCES LIMITED
DIRECTORS’ REPORT
REVIEW OF OPERATIONS / OPERATING AND FINANCIAL REVIEW (continued)
The Group’s business strategy for the financial year ahead and, in the foreseeable future, is to continue
exploration activity on the Group’s existing mineral projects, identify and assess new mineral project
opportunities throughout the world and review development strategies where individual projects have reached
a stage that allows for such an assessment. Due to the inherently risky nature of the Group’s activities, the
Directors are unable to comment on the likely results or success of these strategies. The Group’s activities are
also subject to numerous risks, mostly outside the Board’s and management’s control. These risks can be
specific to the Group, generic to the mining industry and generic to the stock market as a whole. The key risks,
expressed in summary form, affecting the Group and its future performance include but are not limited to:
Geological and technical risk posed to exploration and commercial exploitation success;
Sovereign risk, change in government policy, change in mining and fiscal legislation;
Prevention of access by reason of political or civil unrest, outbreak of hostilities, inability to obtain
regulatory or landowner consents or approvals, or native title issues;
Force majeure events;
Change in metal market conditions;
Mineral title tenure and renewal risks; and
Capital requirement and lack of future funding.
This is not an exhaustive list of risks faced by the Group or an investment in it. There are other risks generic to
the stock market and the world economy as a whole and other risks generic to the mining industry, all of which
can impact on the Group.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Company’s objective is to maximise shareholder value through the discovery and delineation of significant
gold, cobalt, nickel, tin, copper, silver and other mineral deposits throughout the world.
The Directors are unable to comment on the likely results from the Company’s planned exploration activities due
to the speculative nature of such activities.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There has not been any significant changes in the state of affairs of the company and its controlled entities
during the financial year, other than as noted in this Annual Report.
SUBSEQUENT EVENTS
No matter or circumstance has arisen which 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 in subsequent financial years
other than the matters referred to below.
In July 2023, CAV issued 600 million shares at an issue price of $0.0045 each to raise $2.7 million to
high net worth overseas, sophisticated and professional investors, comprising existing and new
shareholders (“Placement”).
Argonaut Securities Pty Ltd (‘Argonaut’) was appointed as Lead Manager for the Placement. For
managing the Placement (including obtaining the firm commitments), Argonaut (and its nominees)
subscribed for 67.5 million options exercisable at $0.007, expiring on or before 31 July 2025 at an issue
price of $0.00001 (‘Options’).
In September 2023 following receipt of shareholder approval, Carnavale Chairman, Mr Ron Gajewski
and non-executive director, Mr Andrew Beckwith each subscribed for 45 million new ordinary shares at
$0.0045 raising a further $405,000.
In August 2023, the Company issued 15 million options exercisable at $0.008, expiring on or before 31
March 2025 to technical consultants.
In September 2023, following shareholder approval received at the general meeting of shareholders
held on 15 September 2023, a total of 45 million options were issued to Mr Gajewski (20 million options),
Mr Beckwith (20 million options) and Mr Brans (5 million options). The Company also issued a further
27.5 million options to Mr Hale (20 million options), Mr Jurman (5 million options) and a consultant (2.5
million options). The options expire on 31 March 2025 and are exercisable at $0.008 each.
ENVIRONMENTAL ISSUES
The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it
complies with all regulations when carrying out exploration work.
15
CARNAVALE RESOURCES LIMITED
DIRECTORS’ REPORT
DIRECTORS’ MEETINGS
The number of meetings of the Directors and the number of meetings attended by each Director during the year
ended 30 June 2023 were:
Name
R Gajewski
A Beckwith
R Brans
Eligible to attend
3
3
3
Attended
1
3
3
There were 3 directors’ meetings held during the year. However, matters of Board business have also been
resolved by circular resolutions of Directors, which are a record of decisions made at a number of informal
meetings of the Directors held to control, implement and monitor the Group’s activities throughout the period.
At present, the Company does not have any formally constituted committees of the Board. The Directors
consider that the Group is not of a size nor are its affairs of such complexity as to justify the formation of special
committees.
REMUNERATION REPORT – AUDITED
This report outlays the remuneration arrangements in place for the Key Management Personnel (as defined
under section 300A of the Corporations Act 2001) of Carnavale Resources Limited.
The following were Key Management Personnel of the Company during or since the end of the financial period.
Directors
R Gajewski
A Beckwith
R Brans
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Appointed 18 October 2006
Appointed 29 July 2014
Appointed 17 September 2013
Other Senior Management
The term ‘senior management’ is used in this remuneration report to refer to the following persons. Except as
noted, the named persons held their current position for the whole of the financial year and since the end of the
financial year:
Senior Management
H Hale
Chief Executive Officer
Appointed 1 June 2021
There have been no other changes of Key Management Personnel after the reporting date and up to the date
the financial report was authorised for issue.
Remuneration policy
The remuneration policy of Carnavale Resources Limited has been designed to align directors’ objectives with
shareholder and business objectives by providing a fixed remuneration component which is assessed on an
annual basis in line with market rates. The Board of Carnavale Resources Limited believes the remuneration
policy to be appropriate and effective in its ability to attract and retain the best directors to run and manage the
Company.
The Board’s policy for determining the nature and amount of remuneration for Board members is as follows:
The remuneration policy and setting the terms and conditions for the Executive Directors and other senior
staff members is developed and approved by the Board based on local and international trends among
comparative companies and industry generally. It examines terms and conditions for employee incentive
schemes, benefit plans and share plans. Independent advice is obtained when considered necessary to
confirm that executive remuneration is in line with market practice and is reasonable within Australian
executive reward practices.
All executives receive a base salary (which is based on factors such as length of service and experience)
and superannuation.
The Group is an exploration entity and is, therefore, speculative in terms of performance. Consistent with
attracting and retaining talented executives, directors and senior executives are paid market rates
associated with individuals in similar positions within the same industry. Options and performance
incentives may be issued particularly as the Group moves from an exploration to a producing entity and
key performance indicators such as profit and production and reserves growth can be used as
measurements for assessing executive performance.
16
CARNAVALE RESOURCES LIMITED
DIRECTORS’ REPORT
The Board policy is to remunerate non-executive directors at market rates for comparable companies for
time, commitment and responsibilities. The Constitution and the ASX Listing Rules specify that the
aggregate remuneration of Non-Executive Directors shall be determined from time to time by a general
meeting. An amount not exceeding the amount determined is then divided between the directors as
agreed. The latest determination was at a shareholders’ meeting on 5 January 2007 when the
shareholders approved an aggregate remuneration of $200,000 per year. Fees for non-executive directors
are not linked to the performance of the Group. However, to align Directors’ interests with shareholder
interests, the directors are encouraged to hold shares in the Company.
Executive Directors’ remuneration and other terms of employment are reviewed annually by the non-
executive directors having regard to performance against goals set at the start of the year, relative
comparative information and independent expert advice.
Except as detailed in the Remuneration Report, no director has received or become entitled to receive, during
or since the financial period, a benefit because of a contract made by the Group or a related body corporate with
a director, a firm of which a director is a member or an entity in which a director has a substantial financial
interest. This statement excludes a benefit included in the aggregate amount of emoluments received or due
and receivable by directors and shown in the Remuneration Report, prepared in accordance with the
Corporations regulations, or the fixed salary of a full time employee of the Group.
Remuneration Structure
In accordance with best practice corporate governance, the structure of remuneration for Non-Executive
Directors and Executive Directors is separate and distinct.
Details of Remuneration
Details of the remuneration of the Directors and other Key Management Personnel of the Company are set out
in the following table. The Key Management Personnel of the Company are the Directors of Carnavale
Resources Limited and the Chief Executive Officer. Detail of the employment contract with the Chief Executive
Officer is as follow:
Name
Term of Agreement
Base Salary
including
Superannuation
Termination Benefit
Humphrey Hale
Chief Executive Officer
Ongoing commencing 1
June 2021
$255,300
May be terminated by either Mr Hale
or the Company by providing three
months’ notice.
Voting and comments made at the Company’s 2022 Annual General Meeting (AGM) – At the 2022 AGM,
98.4% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2022.
The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Remuneration of KMP:
Remuneration for the year ended 30 June 2023
Short-term benefits
Directors’
fees
$
Consulting
fees
$
Post-
employ-
ment
Super-
annuation
$
Equity-
based
compens-
ation
Total
Proportion
related to
performance
$
$
%
Directors
R Gajewski
A Beckwith
R Brans
Total, Directors
Other KMP
Chief Executive
Officer
H Hale
Total KMP
48,000
36,000
36,000
120,000
-
-
-
-
5,040
3,780
3,780
12,600
-
120,000
230,000
230,000
24,150
36,750
17
-
-
-
-
-
-
53,040
39,780
39,780
132,600
254,150
386,750
-
-
-
-
CARNAVALE RESOURCES LIMITED
DIRECTORS’ REPORT
Remuneration for the year ended 30 June 2022
Short-term benefits
Directors’
fees
$
Consulting
fees
$
Post-
employ-
ment
Super-
annuation
$
Equity-
based
compens-
ation
Total
Proportion
related to
performance
$
$
%
Directors
R Gajewski
A Beckwith
R Brans
Total, Directors
Other KMP
Chief Executive
Officer
H Hale
Total KMP
48,000
36,000
36,000
120,000
-
-
-
-
4,800
3,600
3,600
12,000
-
-
-
-
52,800
39,600
39,600
132,000
-
-
-
-
120,000
196,667
196,667
19,667
31,667
45,765
45,765
262,099
394,099
17.26
Accounting, secretarial and corporate service fees of $52,227 (2022: $65,623) and rental fees of $30,000 (2022:
$30,000) were paid or payable during the year ended 30 June 2023 on normal terms and conditions to Corporate
Consultants Pty Ltd, a company in which Mr Gajewski is a director and has a beneficial interest.
Remuneration Options granted as part of remuneration for the year ended 30 June 2023
No remuneration options were granted to directors or key management personnel during the year ended 30
June 2023. Remuneration options issued during the year ended 30 June 2022 to the CEO, Mr Humphrey Hale
were as follows:
Key Management
Personnel
Grant date
Number granted
Number vested at
year end
Average fair value
per option at grant
date
Maximum
total value
of grant yet
to vest ($)
H Hale
12 February 2022 7,500,000
7,500,000
0.61 cents
-
Assumptions used in valuing the options issued are as follows:
Grant Date
Expiry Date
12 Feb 2022
31 July 2023
Exercise
price
Fair value
per
option
0.61 cents 1.6 cents 1.2 cents
Price of
shares on
grant date
Expected
Volatility
131%
Risk free
interest
rate
0.10%
Dividend
yield
-
Each option entitles the holder to purchase one ordinary share in the Company. The estimated value disclosed
above is calculated at the date of grant using the Black-Scholes option pricing model.
No options over unissued ordinary shares in Carnavale Resources Limited were granted to, were forfeited by,
or were exercised by key management personnel of the Company (as part of their remuneration).
In September 2023, following shareholder approval received at the general meeting of shareholders held on 15
September 2023, a total of 45 million options were issued to Mr Gajewski (20 million options), Mr Beckwith (20
million options) and Mr Brans (5 million options). The Company also issued a further 27.5 million options to Mr
Hale (20 million options), Mr Jurman (5 million options) and a consultant (2.5 million options). The options expire
on 31 March 2025 and are exercisable at $0.008 each.
Performance Rights granted as part of remuneration for the year ended 30 June 2023
The Company has not granted any performance rights during the financial year to any Directors or officers as
part of their remuneration during the years ended 30 June 2023 or 30 June 2022.
The Company has not granted any performance rights since the end of the financial year to any Directors or
officers as part of their remuneration.
18
CARNAVALE RESOURCES LIMITED
DIRECTORS’ REPORT
Shareholdings of key management personnel
Year ended 30 June 2023
Directors
R Gajewski
A Beckwith
R Brans
Total
Other KMP
H Hale
Total
Balance at
1 July 2022
Granted as
remuneration
Net other
change
Balance at 30
June 2023
153,910,227
54,543,188
5,000,000
213,453,415
-
213,453,415
-
-
-
-
-
-
-
-
-
-
-
-
153,910,227
54,543,188
5,000,000
213,453,415
-
213,453,415
Option holdings of key management personnel
Year ended 30 June 2023
Directors
R Gajewski
A Beckwith
R Brans
Total
Other KMP
H Hale
Total
Balance at 1 July
2022
Granted as
remuneration
Net other
change (i)
Balance at 30
June 2023
41,590,909
35,590,909
10,000,000
87,181,818
22,500,000
109,681,818
-
-
-
-
-
-
(7,500,000)
(1,500,000)
-
(9,000,000)
34,090,909
34,090,909
10,000,000
78,181,818
(15,000,000)
(24,000,000)
7,500,000
85,681,818
(i)
The options expired unexercised.
End of Remuneration report
SHARE OPTIONS
As at the date of this report, there are 225,000,000 Unlisted Options on issue.
Unlisted Options
Unlisted Options
Unlisted Options
Number
70,000,000
67,500,000
87,500,000
Exercise Price (cents)
1.2
0.7
0.8
Expiry Date
30 November 2023
31 July 2025
31 March 2025
These options do not entitle the holder to participate in any share issue of the Company or any other body
corporate.
During the financial year, the Company did not issue any options.
180,678,571 options expired unexercised on 31 July 2022, 7,000,000 options expired unexercised on 30
November 2022 and subsequent to year end, 188,999,998 options expired unexercised on 31 July 2023.
Subsequent to year end, Argonaut Securities Pty Ltd (‘Argonaut’) was appointed Lead Manager for a capital
raising undertaken by the Company in July 2023 and as part of its compensation, Argonaut (or its nominees)
subscribed for 67.5 million options exercisable at $0.007, expiring on or before 31 July 2025 at an issue price of
$0.00001.
In August 2023, the Company issued 15 million options exercisable at $0.008, expiring on or before 31 March
2025 to technical consultants.
In September 2023, following shareholder approval received at the general meeting of shareholders held on 15
September 2023, a total of 45 million options were issued to Mr Gajewski (20 million options), Mr Beckwith (20
million options) and Mr Brans (5 million options). The Company also issued a further 27.5 million options to Mr
Hale (20 million options), Mr Jurman (5 million options) and a consultant (2.5 million options). The options expire
on 31 March 2025 and are exercisable at $0.008 each.
19
CARNAVALE RESOURCES LIMITED
DIRECTORS’ REPORT
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every officer or
agent of the Group shall be indemnified out of the property of the Group against any liability incurred by him in
his capacity as Officer or agent of the Group or any related corporation in respect of any act or omission
whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.
During the period, the Company agreed to pay an annual insurance premium of $10,212 in respect of directors’
and officers’ liability and legal expenses’ insurance contracts, for directors, officers and employees of the
Company. The insurance premium relates to:
costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal
and whatever the outcome.
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach
of duty.
NON - AUDIT SERVICES
There have been no non-audit services provided by the Group’s auditor during the year (2022: Nil).
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2023 has been received and forms part
of the directors’ report and can be found on the following page of the annual report.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of the Company is responsible for the corporate governance of the Company and guides
and monitors the business and affairs on behalf of the shareholders by whom they are elected and to whom
they are accountable. The Company’s governance approach aims to achieve exploration, development and
financial success while meeting stakeholders’ expectations of sound corporate governance practices by
proactively determining and adopting the most appropriate corporate governance arrangements.
ASX Listing Rule 4.10.3 requires listed companies to disclose the extent to which they have followed the
recommendations set by the ASX Corporate Governance Council during the reporting period. The Company
has disclosed this information on its website at www.carnavaleresources.com/corporate-governance. The
Corporate Governance Statement is current as at 30 June 2023, and has been approved by the Board of
Directors.
The Company’s website at www.carnavaleresources.com contains a corporate governance section that includes
copies of the Company’s corporate governance policies.
Signed in accordance with a resolution of the directors made pursuant to s 298(2) of the Corporations Act 2001.
On behalf of the Directors.
__________________
RON GAJEWSKI
Chairman
Dated this 28th day of September 2023.
Perth, Western Australia
20
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Carnavale Resources Limited for
the year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
28 September 2023
M R Ohm
Partner
CARNAVALE RESOURCES LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Revenue
Expenditure
Administrative expenses
Exploration expenditure impaired
Foreign exchange gain / (loss)
Share-based payments expense
Depreciation expenses
Loss before related income tax benefit
Income tax benefit
Note
Consolidated
3
11
15
2023
$
55,220
55,220
(575,906)
(30,508)
666
-
(618)
(551,146)
98,537
2022
$
3,348
3,348
(596,214)
(707,157)
919
(189,162)
(466)
(1,488,732)
76,114
Net loss attributable to members of the parent entity
(452,609)
(1,412,618)
Other comprehensive income for the period, net of tax
-
-
Total comprehensive loss for the year
(452,609)
(1,412,618)
Loss per share
Basic – cents
Diluted – cents
17
17
(0.017)
(0.017)
(0.06)
(0.06)
The accompanying notes form part of these financial statements
22
CARNAVALE RESOURCES LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Current assets
Cash and cash equivalents
Receivables
Other assets
Total current assets
Non-current assets
Other assets
Exploration and evaluation expenditure
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
Consolidated
2023
$
2022
$
18(a)
8
9
10
11
12
13
14
15
16
919,185
135,172
21,418
1,075,775
20,000
7,883,671
461
7,904,132
3,246,725
190,259
21,686
3,458,670
20,000
6,012,377
1,079
6,033,456
8,979,907
9,492,126
379,076
379,076
527,022
527,022
379,076
527,022
8,600,831
8,965,104
39,660,291
3,019,733
(34,079,193)
8,600,831
39,571,955
3,019,733
(33,626,584)
8,965,104
The accompanying notes form part of these financial statements
23
CARNAVALE RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
$
Balance at 1 July 2021
36,484,552
2,583,326
(32,213,966)
6,853,912
Loss attributable to members of the
parent entity
Total comprehensive loss for the year
Shares and options issued during the
year (net of issue costs)
Fair value of options issued
Balance at 30 June 2022
-
-
-
-
(1,412,618)
(1,412,618)
(1,412,618)
(1,412,618)
3,087,403
-
39,571,955
400
436,007
3,019,733
-
-
(33,626,584)
3,087,803
436,007
8,965,104
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
$
Balance at 1 July 2022
39,571,955
3,019,733
(33,626,584)
8,965,104
Loss attributable to members of the
parent entity
Total comprehensive loss for the year
Shares issued during the year (net of
issue costs)
Balance at 30 June 2023
-
-
-
-
(452,609)
(452,609)
(452,609)
(452,609)
88,336
39,660,291
-
3,019,733
-
(34,079,193)
88,336
8,600,831
The accompanying notes form part of these financial statements
24
CARNAVALE RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
Payments to suppliers
Interest received
Other income
Other income – R & D tax offset received
Net cash outflows from operating activities
Cash flows from investing activities
Payments for exploration and evaluation expenditure
Payments for acquisition of exploration tenements
Payments for property, plant and equipment
Net cash outflows from investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Issue costs - shares and options
Net cash (outflows) /inflows from financing activities
Note
Consolidated
2023
$
2022
$
(547,588)
35,220
20,000
76,114
(416,254)
(541,551)
3,722
-
35,847
(501,982)
18(b)
(1,760,243)
(150,000)
-
(1,910,243)
(2,467,886)
(278,930)
(1,545)
(2,748,361)
-
(1,664)
(1,664)
3,123,614
(157,048)
2,966,566
Net (decrease) / increase in cash and cash equivalents held
(2,328,161)
(283,777)
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate fluctuations on the balances of cash held
in foreign currencies
3,246,725
3,529,684
621
818
Cash and cash equivalents at the end of the financial year
18(a)
919,185
3,246,725
The accompanying notes form part of these financial statements
25
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
1.
CORPORATE INFORMATION
Carnavale Resources Limited is a company limited by shares, incorporated in Australia. The Company’s
shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activity of the Group is mineral exploration.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The financial statements are general purpose financial statements, which have been prepared in
accordance with the requirements of the Corporations Act 2001, Accounting Standards and
Interpretations and complies with other requirements of the law. The financial statements have also
been prepared on a historical cost basis. Cost is based on the fair values of the consideration given in
exchange for assets. For the purpose of preparing the consolidated financial statements, the Company
is a for-profit entity.
The financial report is presented in whole Australian dollars.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates the
continuity of normal business activity and the commercial realisation of the Group’s assets and the
settlement of liabilities in the normal course of business.
The Group has incurred a loss for the year after tax of $452,609 (2022: $1,412,618) and experienced
net operating and investing cash outflows of $2,326,497 (2022: $3,250,343). As at 30 June 2023, the
Group has net current assets of $696,699.
Subsequent to the end of the reporting period, the Company advised it had completed a placement of
690 million shares at an issue price of $0.0045 each raising $3.105 million before costs.
Management has prepared a detailed cash flow forecast for the next 12 months from the date of this
report, and the directors are satisfied that the going concern basis of preparation is appropriate.
The accounting policies detailed below have been consistently applied to all of the years presented
unless otherwise stated. The financial statements are for the Group consisting of Carnavale Resources
Limited and its subsidiaries.
(b) New, revised or amending Accounting Standards and Interpretations adopted
Standards and Interpretations applicable to 30 June 2023
In the year ended 30 June 2023, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group and effective for the current annual
reporting period. As a result of this review the Directors have determined that there is no material impact
of the new and revised Standards and Interpretations on the Group.
Standards and Interpretations on issue not yet effective
The Directors have also reviewed all Standards and Interpretations that have been issued but are not
yet effective for the year ended 30 June 2023.
As a result of this review the Directors have determined that there is no material impact of the Standards
and Interpretations on issue not yet effective on the Group and, therefore, no change is necessary to
Group accounting policies.
(c)
Statement of compliance
The financial statement of Carnavale Resources Limited (the Company) for the year ended 30 June
2023 was authorised for issue in accordance with a resolution of the Directors on 28 September 2023.
The financial report complies with Australian Accounting Standards, which include Australian
equivalents to International Financial Reporting Standards (‘AIFRS’). Compliance with AIFRS ensures
that the financial report, comprising the financial statements and notes thereto, complies with
International Financial Reporting Standards (‘IFRS’).
26
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Carnavale Resources Limited (‘Company’ or ‘parent entity’) as at 30 June 2023 and the results of all
subsidiaries for the year then ended. Carnavale Resources Limited and its subsidiaries are referred to
in this financial report as the Group.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income
and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease
to be consolidated from the date on which control is transferred out of the Group. Control exists where
the company has the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing when the Group controls another entity.
The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The
purchase method of accounting involves allocating the cost of the business combination to the fair value
of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition.
Accordingly, the consolidated financial statements include the results of subsidiaries for the period from
their acquisition.
(e)
Income tax
Deferred income tax is provided on all temporary differences at the balance date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
except where the deferred income tax liability arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither that accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, except where the timing of the reversal of the temporary
differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry-forward of unused tax assets
and unused tax losses can be utilised:
except where the deferred income tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
and
in respect of deductible temporary differences with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable profit will be
available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the
statement of comprehensive income.
27
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(f) Exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as
an exploration and evaluation asset in the year in which they are incurred where the following conditions
are satisfied:
(i)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
(a)
(b)
the exploration and evaluation expenditures are expected to be recouped through
successful development and exploration of the area of interest, or alternatively, by its sale;
or
exploration and evaluation activities in the area of interest have not at the reporting date
reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, and active and significant operations in, or in relation
to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to
explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation
of depreciation and amortised of assets used in exploration and evaluation activities. General and
administrative costs are only included in the measurement of exploration and evaluation costs where
they are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest
that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount.
The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which
it has been allocated being no larger than the relevant area of interest) is estimated to determine the
extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent
that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in previous years.
(g) Revenue
Revenue is recognised to the extent that control of the goods or services has passed, and it is probable
that the economic benefits will flow to the Group and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognised:
Interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial
instrument) to the net carrying amount of the financial asset.
(h) Cash and cash equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand
and short-term deposits with an original maturity of three months or less.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
28
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.
(i)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Employee benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by
employees to balance date (where applicable). Employee benefits expected to be settled within one
year together with entitlements arising from wages and salaries, annual leave and sick leave which will
be settled after one year, have been measured at the amounts expected to be paid when the liability is
settled, plus related on-costs. Other employee benefits payable later than one year have been
measured at the present value of the estimated future cash outflows to be made for those benefits.
Contributions are made by the Group to employee superannuation funds and are charged as expenses
when incurred (where applicable).
(j)
Impairment of assets
The Group assesses at the end of each reporting period whether there is objective evidence that a
financial asset or group of financial assets is impaired and makes an estimate of the asset’s recoverable
amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in
use and is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets and the asset's value in use cannot
be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the
cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written
down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. Impairment losses relating to continuing operations are recognised in those
expense categories consistent with the function of the impaired asset unless the asset is carried at
revalued amount (in which case the impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether any previously recognised impairment
losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount.
That increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is
treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future
periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis
over its remaining useful life.
(k)
Earnings / (loss) per share
Basic earnings / (loss) per share is calculated as net profit / (loss) attributable to members of the parent,
adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends,
divided by the weighted average number of ordinary shares, adjusted for any bonus element.
(l)
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 Tax Office (“ATO”). In these circumstances the
GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or
liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash
flows arising from investing and financing activities which are recoverable from, or payable to, the ATO
are classified as operating cash flows.
29
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m) Financial Instruments
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 measured at amortised cost if they are held within a business model whose
objective is to hold assets in order to collect contractual cash flows which arise on specified dates and
are solely principal and interest. All other financial instrument assets are classified and measured at fair
value through profit or loss unless the entity makes an irrevocable election on initial recognition to
present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive
income. For financial liabilities, the portion of the change in fair value that relates to the Group’s credit
risk is presented in other comprehensive income.
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, its
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 be: (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
Group intends to hold for the foreseeable future and has irrevocably elected to classify them as such
upon initial recognition.
Impairment of financial assets
The Group 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.
30
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n)
Foreign currency translation
Both the functional and presentation currency of Carnavale Resources Limited is Australian dollars.
Each entity in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying the
exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of exchange ruling at the balance date.
All exchange differences in the consolidated financial report are taken to profit or loss with the exception
of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign
entity. These are taken directly to equity until the disposal of the net investment, at which time they are
recognised in profit or loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised
in equity. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate as at the date of the initial transaction. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at the date when
the fair value was determined.
As at the reporting date the assets and liabilities of this subsidiary are translated into the presentation
currency of Carnavale Resources Limited at the rate of exchange ruling at the balance date and its
statement of financial performance is translated at the weighted average exchange rate for the year.
The exchange differences arising on the translation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that
particular foreign operation is recognised in profit or loss.
(o) Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses.
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end. Depreciation is calculated on a diminishing value basis over the
estimated useful life of the assets as follows:
Plant and equipment – 4 years
(p)
Trade and other payables
Trade payables and other payables are carried at cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services.
(q)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares are shown in equity as a deduction, net of tax, from the proceeds.
31
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r)
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Board of
Directors of Carnavale Resources Limited.
(s)
Share based payments
For equity-settled share-based payment transactions, the Group shall measure the goods or services
received, and the corresponding increase in equity, directly, at the fair value of the goods or services
received, unless that fair value cannot be estimated reliably. If the Group cannot estimate reliably the
fair value of the goods or services received, the Group shall measure their value, and the corresponding
increase in equity, indirectly, by reference to1 the fair value of the equity instruments granted.
The Group, from time to time, provides compensation benefits to employees (including directors) and
consultants of the Group in the form of share-based payment transactions, whereby employees and
consultants render services in exchange for shares or rights over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions is measured by reference to the fair value at the date at
which they are granted. The fair value is determined by a Black-Scholes-Merton model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance conditions are fulfilled, ending on the date on which the
recipient become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting
date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in
the opinion of the directors of the Group, will ultimately vest. This opinion is formed based on the best
available information at balance date. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at
grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
conditional upon a market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if
the terms had not been modified. In addition, an expense is recognised for any increase in the value of
the transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new award
is substituted for the cancelled award and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were a modification of the original award,
as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of earnings per share.
32
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.
(t)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Critical accounting estimates and judgements
The application of accounting policies requires the use of judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily apparent from other sources. The estimates
and associated assumptions are based on historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised
in the period in which the estimate is revised if it affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
The key estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of certain assets and liabilities within the next annual reporting period are:
Exploration and evaluation expenditure
The Group’s accounting policy for exploration and evaluation expenditure is set out in Note 2 (f). The
application of this policy necessarily requires the Board to make certain estimates and assumptions as
to future events and circumstances. Any such estimates and assumptions may change as new
information becomes available. If, after having capitalised expenditure under this policy, it is concluded
that the expenditures are unlikely to be recoverable by future exploitation or sale, then the relevant
capitalised amount will be written off to the statement of comprehensive income.
The Board determines when an area of interest should be abandoned. When a decision is made that
an area of interest is not commercially viable, all costs that have been capitalised in respect of that area
of interest are written off. The Directors’ decision is made after considering the likelihood of finding
commercially viable reserves.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees and consultants by
reference to the fair value of the equity instruments at the date at which they are granted. The fair value
of options is determined using a Black-Scholes-Merton model, using various assumptions.
(u) Parent Entity Financial Information
The financial information for the parent entity, Carnavale Resources Limited, disclosed in Note 25 has
been prepared on the same basis as the consolidated financial statements.
33
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
3.
REVENUE
Other revenue
Interest earned
Other income – option fee received
4.
EXPENSES
Consolidated
2023
$
35,220
20,000
55,220
2022
$
3,348
-
3,348
Consolidated
2023
$
2022
$
Loss before income tax includes the following
specific expenses:
Exploration expenditure impaired
30,508
707,157
5.
(a)
INCOME TAX
Prima facie tax benefit at 30% (2022: 30%) on loss from ordinary activities is reconciled to the
income tax provided in the financial statements
Loss before income tax
Consolidated
2023
$
(452,609)
2022
$
(1,412,618)
Prima facie income tax benefit at 30% (2022: 30%)
135,783
423,785
Tax effect of amounts which are not tax (deductible) / taxable in
calculating taxable income:
Due diligence / capital related costs
Exploration expenses incurred
Exploration expenses impaired
Tax effect of capitalised share issue costs
Share-based payment expense
Other non-assessable items
Other non-deductible items
Refundable R & D tax offset
Income tax benefit adjusted for non (deductible) / taxable items
Deferred tax asset not brought to account
Income tax benefit
(b) Deferred tax assets
-
498,541
(9,152)
64,602
-
29,561
-
98,537
817,872
(719,335)
98,537
(2,446)
782,678
(212,147)
53,325
(56,749)
22,834
(160)
76,114
1,087,234
(1,011,120)
76,114
The potential deferred tax asset arising from tax losses and temporary differences has not been
recognised as an asset because recovery of tax losses is not yet considered probable.
Carry forward revenue losses
Carry forward capital losses
Capital raising costs
The benefits will only be obtained if:
Consolidated
2023
$
10,836,654
2,804,459
156,530
13,797,643
2022
$
10,133,743
2,804,459
144,467
13,082,669
(i)
the companies in the Group derive future assessable income of a nature and of an amount
sufficient to enable the benefit from the deduction for the losses to be realised;
34
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
5.
INCOME TAX (continued)
(b) Deferred tax assets (continued)
(ii)
(iii)
the companies in the Group continue to comply with the conditions for deductibility imposed by
the Law; and
no changes in tax legislation adversely affect the companies in realising the benefits from the
deductions for the losses.
(c) Deferred tax liabilities
The potential deferred tax liability arising from capitalised exploration expenditure has not been
recognised as a liability. This would reduce the potential deferred tax asset noted at (b) above.
Deferred exploration and evaluation expenditure
6.
AUDITOR’S REMUNERATION
The auditor of Carnavale Resources Limited is HLB Mann
Judd.
Amounts received or due and receivable by the
Company’s auditors for:
Auditing or reviewing the Company’s financial
statements
7.
KEY MANAGEMENT PERSONNEL
(a) Details of key management personnel
Directors
R Gajewski
A Beckwith
R Brans
Senior Management
H Hale
(b) Compensation of key management personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2023
$
1,821,746
2022
$
1,332,358
Consolidated
2023
$
2022
$
34,687
34,687
29,642
29,642
Consolidated
2023
$
350,000
36,750
-
386,750
2022
$
316,667
31,667
45,765
394,099
Information regarding individual directors’ and senior management compensation is provided in the
Remuneration report on pages 16 to 19.
(c) Other key management personnel transactions
Accounting, secretarial and corporate service fees of $52,227 (2022: $65,623) and rental fees of
$30,000 (2022: $30,000) were paid or payable during the year ended 30 June 2023 on normal terms
and conditions to Corporate Consultants Pty Ltd, a company in which Mr Gajewski is a director and has
a beneficial interest.
35
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
8.
CURRENT RECEIVABLES
Other receivables
Consolidated
2023
$
135,172
135,172
2022
$
190,259
190,259
Other receivables represent amounts outstanding for goods and services tax (GST) and an R & D tax
refund of $98,537, which are non-interest bearing, with repayment terms applicable under the relevant
government authorities.
9.
OTHER CURRENT ASSETS
Prepayments
10. OTHER ASSETS
Credit card bond
11. EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation costs carried forward in respect
of exploration areas of interest (i)
Opening balance
Acquisition costs – exploration licences – refer note 20
Exploration expenditure incurred
Exploration expenditure impaired (i)
Consolidated
2023
$
2022
$
21,418
21,686
Consolidated
2023
$
20,000
2022
$
20,000
Consolidated
2023
$
2022
$
7,883,671
6,012,377
6,012,377
240,000
1,661,802
(30,508)
7,883,671
3,463,595
647,012
2,608,927
(707,157)
6,012,377
(i) The impairment of exploration expenditure in both periods relates to carried forward expenditure in
respect of relinquished tenements or where the Directors have formed the view that successful
development of the projects is not likely based on results achieved to date. The recoupment of
costs carried forward in relation to areas of interest in the exploration and evaluation phases is
dependent on the successful development and commercial exploitation or sale of the respective
areas.
12. PLANT AND EQUIPMENT
Plant and equipment, at cost
Less: accumulated depreciation
Balance at beginning of year
Additions
Depreciation expense
36
Consolidated
2023
$
1,545
(1,084)
461
1,079
-
(618)
461
2022
$
1,545
(466)
1,079
-
1,545
(466)
1,079
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
13. TRADE AND OTHER PAYABLES
Current
Trade and other payables
Consolidated
2023
$
2022
$
379,076
527,022
Trade and other payables represent liabilities for goods and services provided to the Group prior to the
end of the financial period which are unpaid. The amounts are unsecured and are usually paid within
30 days of recognition.
14.
ISSUED CAPITAL
(a)
Issued capital
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
(b) Movements in share capital
Balance at beginning of year
2023
Number
2,718,551,728
2022
Number
2023
$
2022
$
2,380,230,303 39,571,955 36,484,552
for
issued
in July 2021
Shares issued during the period on exercise
of options
Shares
the
acquisition of 80% of the Kookynie Gold
Project
Share placement at an issue price of 0.011
cents each in February and April 2022
Shares
the
for
acquisition of 80% of the Ora Banda Gold
Project
Transaction costs arising from issue of
securities
Balance at end of year
in Oct 2022
issued
-
-
-
48,321,429
50,000,000
239,999,996
-
-
-
483,214
368,082
2,640,000
15,000,000
-
90,000
-
-
2,733,551,728
(403,893)
2,718,551,728 39,660,291 39,571,955
(1,664)
-
(c)
Share options
Options to subscribe for ordinary shares in the capital of the Company have been granted as follows:
2023
Exercise
Period
Exercise
Price
Opening
Balance
1 July 2022
Options
Issued
2022/2023
Number
Number
On or before 31 July
2022 (i)
On or before 31 July
2022 (i)
On or before 31 July
2022 (i)
On or before 30
November 2022 (i)
On or before 30
November 2023
On or before 31 July
2023
Total
$0.01
15,000,000
$0.015
15,000,000
$0.01
150,678,571
$0.012
7,000,000
$0.012
70,000,000
$0.016
188,999,998
446,678,569
(i)
All options noted in (i) above expired unexercised.
37
-
-
-
-
-
-
-
Options
Exercised /
Expired
2022/2023
Number
(15,000,000)
(15,000,000)
(150,678,571)
(7,000,000)
Closing
Balance
30 June 2023
Number
-
-
-
-
-
-
70,000,000
188,999,998
(187,678,571)
258,999,998
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
14.
ISSUED CAPITAL (continued)
(c)
Share options
2022
Exercise
Period
Exercise
Price
Opening
Balance
1 July 2021
Options
Issued
2021/2022
Number
Number
On or before 31 July
2022
On or before 31 July
2022
On or before 31 July
2022 (ii)
On or before 30
November 2022
On or before 30
November 2023
On or before 31 July
2023 (i)
$0.01
15,000,000
$0.015
15,000,000
$0.01
199,000,000
$0.012
7,000,000
$0.012
70,000,000
-
-
-
-
-
$0.016
-
188,999,998
Options
Exercised /
Expired
2021/2022
Number
-
-
Closing
Balance
30 June 2022
Number
15,000,000
15,000,000
(48,321,429)
150,678,571
-
-
-
7,000,000
70,000,000
188,999,998
Total
(i)
(ii)
306,000,000
188,999,998
(48,321,429)
446,678,569
In February and April 2022, the Company allotted 119,999,998 free attaching options to
sophisticated and professional investors who participated in a placement of 239,999,996 fully paid
shares at an issue price of $0.011 each to raise $2,640,000. A further 40 million options were
subscribed for by Golden Triangle Capital Pty Ltd at an issue price of $0.00001 each. In February
2022, the company issued 21.5 million options to technical and administrative staff and consultants
and Chief Executive Officer, Mr Humphrey Hale, was issued 7.5 million options.
During the period, the Company allotted 48,321,429 ordinary fully paid shares following the exercise
of 48,321,429 options exercisable at $0.01 raising $483,214.
15. RESERVES
Option premium and share-based payments reserve (a)
Total
(a) Option premium and share-based payments reserve
Consolidated
2023
$
2022
$
3,019,733
3,019,733
3,019,733
3,019,733
The option premium and share-based payments reserve represents amounts received in consideration
for the issue of options to subscribe for ordinary shares in the Company and the value of options and
performance rights issued to parties for services rendered. Refer to Note 19 for further details.
Opening balance
Fair value of options issued
Fair value of options subscribed for by Lead Manager
Balance at end of year
16. ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Loss for the year
Accumulated losses at the end of the year
38
Consolidated
2023
$
3,019,733
-
-
3,019,733
2022
$
2,583,326
189,162
247,245
3,019,733
Consolidated
2023
$
(33,626,584)
(452,609)
(34,079,193)
2022
$
(32,213,966)
(1,412,618)
(33,626,584)
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
17. LOSS PER SHARE
Net loss after income tax attributable to members of the
Company
Weighted average number of shares on issue during the
financial year used in the calculation of basic earnings
per share
Effect of dilution
Weighted average number of ordinary shares for diluted
earnings per share
Effect of Dilutive Securities - Share Options
Consolidated
2023
$
2022
$
(452,609)
(1,412,618)
Number
Number
2,729,307,223
-
2,527,821,382
-
2,729,307,223
2,527,821,382
The Company has 258,999,998 share options at 30 June 2023 (30 June 2022: 446,678,569). Options
are considered to be potential ordinary shares. However, in periods of a net loss, share options are
anti-dilutive, as their exercise will not result in lower earnings per share. The options have therefore not
been included in the determination of diluted earnings per share.
18. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents consists of cash at bank
and in hand and short-term deposits with an original maturity of three months or less, net of outstanding
bank overdrafts.
Cash at bank
Consolidated
2023
$
919,185
919,185
2022
$
3,246,725
3,246,725
(b) Reconciliation of loss after tax to net cash outflows from operations
Loss after income tax
Depreciation
Exploration expenditure impaired / expensed
Exploration bond refunded
Net exchange differences
Share-based payments expense
(Increase) / decrease in assets
Trade and other receivables
Increase / (decrease) in liabilities
Trade and other payables
Consolidated
2023
$
2022
$
(452,609)
(1,412,618)
618
30,508
-
(621)
-
466
707,157
-
(815)
189,162
(19,708)
(42,039)
25,558
(416,254)
56,705
(501,982)
(c) Non-cash investing activities
During the period, the Company elected to exercise its Option to acquire 80% of the Ora Banda Gold
Project from Western Resources Pty Ltd (refer ASX release dated 5 October 2020). Upon exercise of
the Option, Carnavale paid $150,000 cash and issued 15 million ordinary shares to Western Resources
Pty Ltd. Western Resources Pty Ltd is free carried until completion of a Bankable Feasibility Study.
The acquisition was accounted for as an asset acquisition.
39
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
19. SHARE-BASED PAYMENTS
The Company makes share-based payments to Directors, consultants and/or service providers from
time to time, not under any specific plan.
The expense recognised in the Statement of Comprehensive Income in relation to share-based
payments is $Nil (2022: 189,162), relating to options.
The following tables illustrates the number and weighted average exercise prices of and movements in
share options issued during the year:
Options
2023
Number
2023
Weighted
average
exercise price
2022
Number
2022
Weighted
average
exercise price
Outstanding at the beginning of
the year
Issued during the year
Exercised during the year
Forfeited / lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
446,678,569
$0.0131 306,000,000
-
-
(187,678,571)
258,999,998
258,999,998
-
-
188,999,998
(48,321,429)
$0.0105
-
$0.0149 446,678,569
$0.0149 446,678,569
$0.0107
$0.016
$0.01
-
$0.0131
$0.0131
Refer to Note 14 c) for details of the movement in options during the year ended 30 June 2023 and 30
June 2022.
Assumptions used in valuing the options issued in the prior period are as follows:
2022
Number of
Options
Grant Date
Expiry
Date
Exercise
price
Fair
value
per
option
69,000,000 12 Feb 2022
31 Jul
2023
$0.0061 $0.016
20. COMMITMENTS AND CONTINGENCIES
(a) Commitments
Price
of
shares
on
grant
date
$0.012
Expected
Volatility
Risk
free
interest
rate
Dividend
yield
131%
0.10%
-
In order to maintain current contractual rights concerning its mineral projects, the Group has certain
commitments to meet minimum expenditure requirements on the mineral exploration assets in which it
has an interest.
The current annual minimum lease expenditure commitments on tenements wholly owned by the Group
comprising E28/1477 and M28/378, which covers the Grey Dam Project is $82,300 (2022: $82,300).
The Company owns 80% of the Kookynie Gold Project, comprising tenements E40/355, P40/1380 and
P40/1381. In order to maintain current contractual rights, the Group has certain commitments to meet
minimum expenditure requirements. The current annual minimum lease expenditure commitments on
this tenement package is $80,920 (2022: 61,120).
In September and October 2020, the Company agreed to purchase 100% of tenements P40/1480 and
E40/394 at the Kookynie Gold Project and in order to maintain current contractual rights, the Group must
spend $26,560 (2022: $26,560) to meet minimum lease expenditure commitments.
During the period, the Company elected to exercise its Option pursuant to the agreement to acquire
acquire 80% of the Ora Banda South Gold Project from Western Resources Pty Ltd (refer ASX release
dated 12 October 2022). Upon exercise of the Option, Carnavale paid $150,000 cash and issued 15
million ordinary shares to Western Resources Pty Ltd. Western Resources Pty Ltd is free carried until
completion of a Bankable Feasibility Study. In order to maintain current contractual rights, the Group
has certain commitments to meet minimum expenditure requirements. The current annual minimum
lease expenditure commitments on this tenement package is $100,720.
40
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
20. COMMITMENTS AND CONTINGENCIES (continued
The Company owns 100% of P24/5518, P24/5519, P24/5520, P24/5521, P24/5522 and P24/5523 at
the the Ora Banda South Gold Project and in order to maintain current contractual rights, the Group
must spend $42,480 to meet minimum lease expenditure commitments.
In April 2021, the Company agreed to purchase 100% of the Barracuda Platinum-Palladium-Nickel-
Copper (PGE-Ni-Cu) Project (granted license E58/551) and in order to maintain current contractual
rights, the Group must spend $30,000 to meet minimum lease expenditure commitments. During the
period, the Company entered into an option agreement for the sale of its Barracuda PGE-Ni-Cu Project
with Midas Resources Ltd (ASX MM1) (Midas). During the Option Term and in the event of exercise of
the Option, then until Completion, Midas shall be solely responsible for maintaining the Tenements in
good standing in accordance with all applicable laws including meeting the minimum lease expenditure
commitments. Midas must contribute the minimum lease expenditure commitments regardless of
whether or not it exercises the Option and all rehabilitation of the Tenements including all costs relating
to rehabilitation of the tenement.
If the Group decides to relinquish certain leases and/or does not meet these obligations, assets
recognised in the balance sheet may require review to determine the appropriateness of carrying values.
The sale, transfer, or farm-out of exploration rights to third parties will reduce or extinguish these
obligations.
(b) Contingent liabilities
The Group does not have any contingent liabilities at balance date other than as below:
In accordance with the tenement acquisition agreements and option agreements entered into by the
Group the following deferred consideration may become payable in future periods:
Grey Dam Project
M28/378
A 2% gross royalty is payable comprising a 1% gross revenue payable on all nickel, copper,
cobalt value if any profit from them is derived and a 1% total gold production royalty.
Barracuda Platinum-Palladium-Nickel-Copper (PGE-Ni-Cu) Project
A 0.5% Net Smelter Return (‘NSR’) royalty is payable on all minerals produced from the
tenement.
21. EVENTS SUBSEQUENT TO BALANCE DATE
No matter or circumstance has arisen which 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 in subsequent
financial years other than the matters referred to below.
In July 2023, the Company issued 600 million shares at an issue price of $0.0045 each to raise $2.7
million to high net worth overseas, sophisticated and professional investors, comprising existing and
new shareholders (“Placement”).
Argonaut Securities Pty Ltd (‘Argonaut’) was appointed as Lead Manager for the Placement. For
managing the Placement (including obtaining the firm commitments), Argonaut (and its nominees)
subscribed for 67.5 million options exercisable at $0.007, expiring on or before 31 July 2025 at an
issue price of $0.00001 (‘Options’).
In September 2023 following receipt of shareholder approval, Carnavale Chairman, Mr Ron Gajewski
and non-executive director, Mr Andrew Beckwith each subscribed for 45 million new ordinary shares
at $0.0045 raising a further $405,000.
In August 2023, the Company issued 15 million options exercisable at $0.008, expiring on or before
31 March 2025 to technical consultants.
In September 2023, following shareholder approval received at the general meeting of shareholders
held on 15 September 2023, a total of 45 million options were issued to Mr Gajewski (20 million
options), Mr Beckwith (20 million options) and Mr Brans (5 million options). The Company also issued
a further 27.5 million options to Mr Hale (20 million options), Mr Jurman (5 million options) and a
consultant (2.5 million options). The options expire on 31 March 2025 and are exercisable at $0.008
each.
41
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
22. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
Overview
The activities of the Company expose it to a variety of financial risks, including:
market risk;
credit risk; and
liquidity and capital risks.
The Company’s overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the business. Carnavale
will use different methods to measure different types of risk to which it is exposed. These methods
include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ageing
analysis for credit risk.
This note presents information about the Company’s exposure to each of the above risks, their
objectives, policies and processes for measuring and managing risk, and the management of capital
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework. Management monitors and manages the financial risks relating to the
operations of the Company through regular reviews of the risks.
(a)
Market risk
(i) Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
that are denominated in a currency that is not the entity’s functional currency. The Australian dollar is
the reporting currency for the Group and the functional currency for the parent company; however,
during the financial year, the Group currently held foreign currency, namely US dollars. At period end,
the Group did not have any foreign exchange risk that was material to the Group.
(ii)
Exposure to currency risk
The Group’s exposure to foreign currency risk at balance date was nil.
(iii) Interest rate risk
The Group is exposed to movements in market interest rates on short term deposits.
The Group’s exposure to interest rate risk and the effective weighted average interest rate for each class
of financial assets and financial liabilities is set out in the following table:
Note
Floating
interest
rate
Fixed
interest
rate
Non-
interest
bearing
Total
$
$
$
$
Weighted
average
interest
rate
%
2023
Financial assets
Cash and cash equivalents 18(a)
Trade and other
receivables
8
846,050
-
846,050
Financial liabilities
Trade and other payables
13
-
-
-
-
-
73,135
919,185
2.32
135,172
208,307
135,172
1,054,357
379,076
379,076
42
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
22. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)
Note
Floating
interest
rate
Fixed
interest
rate
Non-
interest
bearing
Total
$
$
$
$
Weighted
average
interest
rate
%
2022
Financial assets
Cash and cash equivalents 18(a)
Trade and other
receivables
8
3,145,718
-
3,145,718
Financial liabilities
Trade and other payables
13
-
-
-
-
-
101,007
3,246,725
0.11
190,259
291,266
190,259
3,436,984
527,022
527,022
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased)
equity and profit or loss by the amounts shown below, where interest is applicable. This analysis
assumes that all other variables remain constant. The analysis is performed on the same basis for 2022.
Consolidated
30 June 2023
Variable rate instruments
Cash flow sensitivity (net)
30 June 2022
Variable rate instruments
Cash flow sensitivity (net)
Profit or (Loss)
100bp
increase
$
100bp
decrease
$
15,184
15,184
29,706
29,706
(15,184)
(15,184)
(29,706)
(29,706)
100bp
increase
$
15,184
15,184
29,706
29,706
Equity
100bp
decrease
$
(15,184)
(15,184)
(29,706)
(29,706)
Financial assets
Trade receivables from other entities are carried at nominal amounts less any allowance for doubtful
debts. Other receivables are carried at nominal amounts due. Interest is recorded as income on an
accruals basis.
Financial liabilities
Liabilities are recognised for amounts to be paid in the future for goods and services received, whether
or not billed to the group.
Net fair value of financial assets and liabilities
The carrying amount of financial assets and liabilities approximates fair value because of their short-
term maturity.
(iv) Commodity price risk
As Carnavale explores for a variety of minerals including gold, tin, nickel, copper and cobalt, it will be
exposed to the risks of fluctuation in prices for those minerals. The market for all of these minerals has
a history of volatility, moving not only with the standard forces of supply and demand, but also in the
case of gold, to investment and disinvestment. Prices fluctuate widely in response to changing levels of
supply and demand but, in the long run, prices are related to the marginal cost of supply.
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s receivables from
customers and cash and investment deposits. The Group has adopted the policy of only dealing with
credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a
means of mitigating the risk of financial loss from defaults.
43
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
22. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)
The main risks the Group is exposed to through its financial instruments are the depository banking
institution itself, holding the funds, and interest rates. The Group does not have significant exposure to
any single counterparty or any group of counterparties having similar characteristics.
The carrying amount of financial assets recorded in the financial statements, net of any provisions for
losses, represents the Group’s maximum exposure to credit risk.
The Company and Group have established an allowance for impairment that represents their estimate
of incurred losses in respect of other receivables and investments. The main components of this
allowance are a specific loss component that relates to individually significant exposures. The
management does not expect any counterparty to fail to meet its obligations.
(c)
Liquidity and capital risk
The Group’s total capital is defined as the shareholders’ net equity plus any net debt. The objectives
when managing the Company’s capital is to safeguard the business as a going concern, to maximise
returns to shareholders and to maintain an optimal capital structure in order to reduce the cost of capital.
The Group does not have a target debt / equity ratio but has a policy of maintaining a flexible financing
structure so as to be able to take advantage of investment opportunities when they arise. There are no
externally imposed capital requirements.
There have been no changes in the strategy adopted by management to control the capital of the Group
since the prior year.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast
and actual cash flows.
If the Company anticipates a need to raise additional capital in the next 12 months to meet forecasted
operational activities, then the decision on how the Company will raise future capital will depend on
market conditions existing at that time.
Typically, the Group ensures that it has sufficient cash on demand to meet expected operational
expenses for a period of 60 days, including the servicing of financial obligations. This excludes the
potential impact of extreme circumstances that cannot reasonably be predicted, such as natural
disasters.
The table below analyses the Group’s financial liabilities into maturity groupings based on the remaining
period from the balance date to the contractual maturity date.
2023
Financial liabilities
Trade and other payables
Total Financial Liabilities
2022
Financial liabilities
Trade and other payables
Total Financial Liabilities
Between 1
and 5
years
$
-
-
Between 1
and 5
years
$
-
-
After 5
years
$
-
-
After 5
years
$
-
-
Within 1
year
$
379,076
379,076
Within 1
year
$
527,022
527,022
44
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
INVESTMENT IN CONTROLLED ENTITIES
(a) Particulars in relation to subsidiaries
Entity
Country of
incorporation
Equity
holding
Equity
holding
Class of
Shares
Parent Entity
Carnavale Resources Limited
Subsidiaries
Carnavale Petroleum Pty Ltd
Tojo Minerals Pty Ltd
(b) Risk exposure
2023
%
2022
%
Australia
Australia
100
100
100
100
Ord
Ord
Refer to Note 22 for information on the Group’s and parent entity’s exposure to credit, foreign exchange
and interest rate risk.
24. SEGMENT REPORTING
The directors have considered the requirements of AASB 8 – Operating Segments and the internal
reports that are reviewed by the chief operating decision maker (the Board) in allocating resources and
have concluded that, during the year, Carnavale operated in the mineral exploration industry in Australia
and investing activities in Australia.
2023
Business segments
Revenue
Other external revenue
Total segment revenue
Results
Operating loss before income tax
Income tax benefit
Net loss
Assets
Segment assets
Non-current assets acquired
Liabilities
Segment liabilities
Other segment information
Depreciation
Impairment of exploration and
evaluation expenditure
Investing
Australia
$
Mineral
Exploration
Australia
$
Eliminations Consolidated
$
$
35,220
35,220
20,000
20,000
-
-
(496,085)
(55,682)
621
1,089,986
-
7,889,921
1,901,802
141,326
237,750
618
-
-
30,508
-
-
-
-
55,220
55,220
(551,146)
98,537
(452,609)
8,979,907
1,901,802
379,076
618
30,508
45
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
24. SEGMENT REPORTING (continued)
2022
Business segments
Revenue
Other external revenue
Total segment revenue
Results
Operating loss before income tax
Income tax benefit
Net loss
Assets
Segment assets
Non-current assets acquired
Liabilities
Segment liabilities
Other segment information
Depreciation
Impairment of exploration and
evaluation expenditure
25. PARENT ENTITY DISCLOSURES
(a)
Summary financial information
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payment reserve
Accumulated losses
Total equity
Financial performance
Investing
Australia
$
Mineral
Exploration
Australia
$
Eliminations Consolidated
$
$
3,348
3,348
-
-
-
-
3,348
3,348
(764,828)
(724,717)
813
3,474,124
1,545
6,018,002
3,255,939
115,768
411,254
466
-
-
707,157
-
-
-
-
(1,488,732)
76,114
(1,412,618)
9,492,126
3,257,484
527,022
466
707,157
2023
$
682,631
7,998,111
8,680,742
123,598
123,598
2022
$
2,902,167
6,178,702
9,080,869
115,765
115,765
8,557,144
8,965,104
39,660,291
3,019,733
(34,122,880)
8,557,144
39,571,955
3,019,733
(33,626,584)
8,965,104
2023
$
2022
$
Loss for the year after income tax
Total comprehensive loss
(496,296)
(496,296)
(1,412,618)
(1,412,618)
46
CARNAVALE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
25. PARENT ENTITY DISCLOSURES (continued)
(b) Guarantees entered into by the parent entity in relation to the debts of its subsidiary
Carnavale Resources Limited has not entered into any guarantees in relation to the debts of its
subsidiary.
(c) Contingent liabilities of the parent
The parent entity did not have any contingent liabilities as at 30 June 2023 or 30 June 2022 other than
as disclosed in Note 20.
(d) Contractual commitments for the acquisition of property, plant or equipment
As at 30 June 2023 (30 June 2022 – $Nil), the parent entity did not have any contractual commitments
for the acquisition of property, plant or equipment.
47
CARNAVALE RESOURCES LIMITED
DIRECTORS’ DECLARATION
In the opinion of the Directors of Carnavale Resources Limited:
(a)
The accompanying financial statements and notes are 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 2023 and of its performance
for the year then ended; and
(ii) complying with Accounting Standards, the Corporations Regulations 2001, professional reporting
requirements and other mandatory requirements.
(b)
(c)
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 financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2023.
Signed in accordance with a resolution of the Directors made pursuant to s 295(5) of the Corporations Act
2001.
On behalf of the Board.
RON GAJEWSKI
Chairman
Dated this 28th day of September 2023
Perth, Western Australia
48
INDEPENDENT AUDITOR’S REPORT
To the Members of Carnavale Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Carnavale Resources Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2023,
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:
(a) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional 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 the key audit
matter
Carrying value of exploration and evaluation
expenditure
Refer to Note 11
The Company has capitalised exploration and
evaluation expenditure of $7,883,671 as at 30 June
2023.
Our procedures included but were not limited
to the following:
- We obtained an understanding of the key
processes and relevant controls
Key Audit Matter
How our audit addressed the key audit
matter
Carrying value of exploration and evaluation
expenditure
Refer to Note 11
Our audit procedures determined that the carrying
value of exploration and evaluation expenditure was
a key audit matter as it was an area which required
the most communication with those charged with
governance and was determined to be of key
importance to the users of the financial statements.
associated with management’s review of
the carrying value of exploration and
evaluation expenditure;
- We obtained evidence that the Company
has current rights to tenure of its areas of
interest;
- We considered the existence of any
indicators of impairment;
- We substantiated a sample of additions
to exploration expenditure during the
year;
- We ensured that the Company had not
decided to discontinue exploration and
evaluation at any areas of interest; and
- We ensured
the
disclosures made within the financial
statements.
the adequacy of
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2023, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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 Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
−
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
− Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
−
− Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
−
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the Directors’ Report for the year ended 30 June
2023.
In our opinion, the Remuneration Report of Carnavale Resources Limited for the year ended 30 June 2023
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.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
28 September 2023
M R Ohm
Partner
CARNAVALE RESOURCES LIMITED
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 22 September 2023.
1.
Distribution of holders of listed equity securities
Size of holding
Ordinary Shares % of Securities
1
1,001
5,001
10,001
-
-
-
-
1,000
5,000
10,000
100,000
100,001 and over
2.
Voting rights
issued
0.00
0.00
0.01
0.93
99.06
100.00
70
48
56
503
1,320
1,997
The voting rights attaching to ordinary shares are governed by the Constitution. On a show of hands
every person present, who is a member or representative of a member shall have one vote and, on a
poll, every member present in person or by proxy or by attorney or duly authorised representative shall
have one vote for each share held. None of the options or performance rights have any voting rights.
3.
Substantial Shareholders
An extract of the Company’s register of substantial shareholders is set out below.
Shareholder
Philip John Coulson
Vienna Holdings Pty Ltd and Redtown Enterprises Pty Ltd
Number of Shares
419,669,123
198,910,227
4.
Unmarketable parcels
As at 21 September 2023 there were 460 shareholders with unmarketable parcels of shares.
5.
Top 20 shareholders (CAV)
The names of the twenty largest shareholders as at 22 September 2023, who hold 46.67% of the fully
paid ordinary shares of the Company were as follows:
Name of holder
Number of
Shares
Percentage
held
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Troca Enterprises Pty Ltd
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