River Sands Projects | Gascoyne River, Ashburton River and Fitzroy River
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2021
Cauldron Energy Limited (ABN 22 102 912 783)
AND CONTROLLED ENTITIES
CAULDRON ENERGY LIMITED
Choosing green energy
initiatives to power our
operations.
Cauldron Energy Limited (ASX: CXU) is an
exploration and development company with
focus on a green future. We offer investors
the growth potential of blue-sky exploration
and desire to be self-funded. Our portfolio of
high-quality advanced projects are capable of
producing income for a low capital cost, thus
reducing the effect of dilution on shareholders.
cauldronenergy.com.au
CAULDRON ENERGY LIMITED
CAULDRON ENERGY LIMITED
CAULDRON ENERGY LIMITED
CAULDRON ENERGY LIMITED
INDEX
CHAIRMAN’S LETTER ...................................................................................................................1
OPERATIONS REPORT ..................................................................................................................2
DIRECTORS’ REPORT ................................................................................................................. 16
REMUNERATION REPORT ............................................................................................................ 18
AUDITOR’S INDEPENDENCE DECLARATION ................................................................................... 26
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ............................................................. 27
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................... 28
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................... 29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................... 30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................... 31
DIRECTORS’ DECLARATION ........................................................................................................ 60
INDEPENDENT AUDITOR’S REPORT ............................................................................................. 61
ADDITIONAL INFORMATION ....................................................................................................... 65
EXECUTIVE CHAIRMAN
Simon Youds
NON-EXECUTIVE DIRECTORS
Jess Oram
Qiu Derong
Judy Li
Chenchong Zhou
COMPANY SECRETARY
Michael Fry
AUDITORS
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
SHARE REGISTRAR
Advanced Share Registry
110 Stirling Hwy
Nedlands WA 6009
Telephone: (08) 9389 8033
Facsimile: (08) 9262 3723
PRINCIPAL & REGISTERED OFFICE
STOCK EXCHANGE LISTING
Unit 47, Level 2
1008 Wellington Street
West Perth WA 6005
Telephone: (08) 6270 4693
Website: www.cauldronenergy.com.au
Australian Securities Exchange Code: CXU
(Home Exchange: Perth, Western Australia)
BANKERS
National Australia Bank
100 St Georges Terrace
Perth WA 6000
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
1
CAULDRON ENERGY LIMITED
CHAIRMAN’S LETTER
Dear Shareholder,
On behalf of the Board of Directors of Cauldron, I am pleased to provide our Annual Report for FY2021.
The 2021 financial year has been a challenging year on many fronts, most significantly the COVID-19 pandemic
which has frustrated travel and necessitated us to re-think and re-imagine how we work and interact.
Despite the challenges, we have closed the year in what we consider to be a strong position with our Blackwood
Gold Project in the midst of its first drill program in a generation and our sand project is poised to take
advantage of the increasing demand for, and scarcity of, construction and reclamation sand.
I personally have spent a considerable amount of time in Victoria in recent months at the Blackwood Gold
Project and we are excited about what lies ahead. The Blackwood goldfield has been largely untouched for
over fifty years, and with over 250 underground workings, mostly less than 100 metres from surface, there is
great optimism that the drilling which aims to target projections of high-grade plunge extensions of historical
workings below the 100 metre level, will lead to multiple new high-grade discoveries.
Our innovative low footprint and low carbon approach is purpose-fit to the geology
of Blackwood and its extensive historical infrastructure. This approach is a key plank
of our circular economy strategy for Blackwood where we aim to eliminate waste and
pollution, circulate products and materials, and to regenerate nature.
Our Yanrey uranium project is potentially our most valuable with uranium prices recently reaching a 9-year
high. The Project’s mineralisation is amenable to in-situ recovery and as such has the potential for low-cost
production. We are well placed to take advantage of the surging appetite for uranium world-wide if there was
to be a change of sentiment by the Labor government which has placed a ban on uranium mining in the state
of Western Australia. A change in sentiment by the Western Australian Labor government would allow Yanrey,
and potentially Western Australia, to establish itself as a dominant provider of clean, green energy as coal is
diverted to other uses than thermal power.
Nuclear power is expected to play a major part in the planet’s carbon free plans with nuclear power providing
a base load of reliable electricity that is cheap, carbon-free and clean. The recent commercialisation of small
modular reactors (SMR) has opened up the potential for Australia to reduce its power costs and carbon
footprint especially in remote centre’s such as those in Western Australia.
And with uranium safely and responsibly being mined in other parts of Australia, and with significant
improvement in techniques and practices over the past 50 years, there seems to be no logical justification for
a continuation of the ban. As such, we expect that the Labor government will come under increasing pressure
to overturn its ban and to enable the state of Western Australia to take advantage of the uranium boom
presently underway.
In summary, we consider we have a portfolio of projects in gold, sand and uranium that offers unique project
diversification in commodities that are in high demand and that boast the potential for both early cashflow and
long-term growth in value with a team that has the skills, experience and dedication to deliver results.
Your Board’s priorities for FY2021 are the health and safety of our employee and contractors, prudent financial
management, execution of our exploration strategy and regular communication with our investors, and we
look forward to updating you on our progress as the FY2022 year unfolds.
For and on behalf of the Board of Cauldron Energy Limited.
Simon Youds
Executive Chairman
1
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
Cauldron has a portfolio of projects in gold, sand and uranium that offers unique project diversification in
commodities that are in high demand and that boast the potential for both early cashflow and long-term
growth in value.
URANIUM
With uranium being at the forefront of the push for low-carbon energy production for what is becoming an
increasingly energy hungry world, Cauldron’s Yanrey Uranium Project is well positioned to take advantage of
the growing demand and improving price of uranium, should the Labor government bow to increasing pressure
and overturn its ban on uranium mining in the state of Western Australia.
At the time of writing, the price of uranium is near US$48 per pound and moving closer to a nine-year high
of US$50.8/lb hit in September 2021, as the ongoing global energy crisis and the broader transition away
from fossil fuels have forced leaders across the world to reconsider nuclear as a clean and bankable source of
energy.
France, currently achieving 70% of its electricity generation from nuclear power, announced plans to build
multiple new, small nuclear reactors that could be exported to its energy-starved neighbours. At the same
time, Japan’s new prime minister Fumio Kishida recently told Parliament that the country needs to restart its
nuclear power plants, as renewable energy sources like wind and solar will not be enough to power Japan in
the coming years. Further, in September, the International Atomic Energy Agency upgraded its projection for
nuclear energy and now expects global nuclear-generating capacity to double by 2050.
There is now growing recognition that nuclear power makes a significant contribution to the
mitigation of greenhouse gas emissions.
According to a report released by the Parliament of Australia titled “Australia’s uranium – greenhouse friendly
fuel for an energy hungry world”:
• Nuclear power plants emit no greenhouse gas emissions at point of generation and very small quantities
over the whole nuclear fuel cycle, from uranium mining through to waste disposal.
• Nuclear power represents the only current reliable and proven means of limiting increased emissions
while meeting the world’s voracious appetite for energy.
• While there is a role for renewables and certainly for greater use of efficiency measures, renewables are
limited in their application by being intermittent, diffuse and pose significant energy storage problems.
Renewables also require substantial backup generation, which needs to be provided by conventional
baseload power sources. Promised baseload contributions from geothermal, are yet to be developed
on any scale. For the generation of continuous, reliable supplies of electricity on a large scale, the only
current alternative to fossil fuels is nuclear power.
The report also observed that electricity generation is the largest contributor of CO2 emissions at 40 per cent
of the global total and is also the fastest growing. The report concluding that it is imperative that emissions
from this sector be reduced, particularly in fast-growing, developing nations such as China.
In a recent submission to the House of Representative Standing Committee on Environment and Energy,
Nuclear for Climate submitted that climate change is the most significant threat to our planet today - that
nuclear power has demonstrated, by precedent, that:
•
it can be deployed quickly,
• operate economically
• massively reduce carbon emissions, and that
•
for the benefit of the planet, nuclear must be included in the climate conversation as it is a proven and
efficient mitigation technology that is available today.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
2
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
In-Situ Recovery (ISR) Mining of Uranium Deposits
The In Situ Recovery (ISR) mining process has been proven globally, and domestically, to be the most cost
effective and environmentally acceptable method of uranium extraction. This makes deposits, such as the
100% Cauldron-owned Bennet Well Uranium Deposit, highly valued in their amenability for this low-cost form
of uranium mining. According to recent reports, ~57% of global uranium production is sourced from ISR mines.
The process of ISR mining involves leaving the ore in situ - i.e., where it is in the ground - and recovering
the minerals from the host sediment formation by drilling wells into the deposit and using pre-defined wells
to inject native groundwater fortified with a complexing agent and oxidant to dissolve the uranium inside the
target horizon. The “pregnant” solution is then pumped out of a neighbouring drillhole to a processing plant
at the surface. The uranium-rich solution is treated to recover the uranium oxide mineral, thereby ensuring
minimal ground disturbance has occurred. Furthermore, there are no tailings or waste rock dumps generated.
In order for a deposit to be amenable to the ISR style of mining, it must be:
•
•
•
•
sandstone-hosted, ideally in a palaeochannel or palaeovalley system,
laterally extensive,
sub-horizontal,
tabular in shape,
• hosted within permeable sands,
• hosted in saturated conditions,
•
•
•
capped by impermeable aquiclude (e.g., clay formation),
shallow in depth (to mineralisation) from the ground surface, and
contained by an impermeable formation beneath the orebody (e.g., hard granite basement).
In Australian ISR mines (Beverley, Four Mile, and Honeymoon) the oxidant used is hydrogen peroxide and the
complexing agent sulfuric acid.
Techniques for ISR have evolved to the point where it is a controllable, safe, and environmentally benign
method of mining that, by strict legislation, operates under specific, highly regulated and monitored operational
controls. Due to the low capital costs involved (relative to conventional mining) it can often be a more effective
method of mining low-grade uranium deposits.
3
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
YANREY PROJECT, WESTERN AUSTRALIA
The Yanrey Project comprises a collection of twelve granted exploration tenements over an area of 1,270 km2
in northwest Western Australia (Figure 1), one of which secures the Bennet Well Uranium Deposit (Bennet
Well). The project is prospective of sandstone-style uranium mineralisation capable of extraction by in-situ
recovery mining techniques.
Bennet Well, and consequently the Yanrey Uranium Project, has been the subject of a significant amount of
exploration over the last sixteen years by Cauldron Energy, refer below.
Figure 1: Map Location of Cauldron Projects
Since the announcement on 20 June 2017 of a ban of new uranium mines in Western Australia by Minister
Bill Johnston, Cauldron has only been able to undertake limited fieldwork activities within the Yanrey Uranium
Project. The policy heading for uranium exploration in Western Australia remains uncertain, and Cauldron
continues to regularly seek advice from the Minister and the Department of Mines, Industry Regulation and
Safety (DMIRS).
1
Refer to ASX Announcement dated 25 May 2017
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
4
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
Bennet Well
The Bennet Well Uranium Deposit is secured under exploration licence E08/1493. The mineralisation at Bennet
Well is a shallow accumulation of uranium hosted in unconsolidated sands (less than 100 m downhole depth)
in Cretaceous sedimentary units of the North Carnarvon Basin. The Bennet Well deposit is comprised of four
spatially separate deposits; namely Bennet Well East, Bennet Well Central, Bennet Well South and Bennet Well
Channel.
Concurrently, Cauldron completed Phase 1 of a developmental research study in 2017 with the CSIRO and
Minerals Research Institute of Western Australia (MRIWA) to prove the ISR amenability of Bennet Well1. Based
on the highly promising results of the Phase 1 work, Phase 2 involved the completion of a Field Leach Trial (FLT)
to quantify the ISR potential of the orebody. Due to the uncertainty surrounding the State government’s ban
on uranium mining, however, the FLT could not be completed. Despite regular attempts and correspondence
to establish their standing, the Government has yet to clarify their policy on uranium exploration. Cauldron
intends to submit a Program Of Works (POW) to DMIRS for a potential FLT, when the policy on uranium
exploration is clarified and if the standard regulatory system applies.
Bennet Well Mineral Resource
A Mineral Resource (JORC 2012) for the mineralisation at Bennet Well was completed by Ravensgate Mining
Industry Consultants following new drilling completed during the reporting period ending 2016. The information
on this Mineral Resource was fully reported in ASX announcement dated 17 December 2015, including
geological maps and cross sections, supporting and explanatory statements and metadata as required under
the reporting standards of JORC2012. No work on the Mineral Resource has been completed since, and
therefore remains unchanged for the current reporting period.
The mineralisation at Bennet Well is a shallow accumulation of uranium hosted in unconsolidated sands close
to surface (less than 100 m downhole depth) in Cretaceous sedimentary units of the Ashburton Embayment.
The Bennet Well deposit is comprised of four spatially separate deposits; namely Bennet Well East, Bennet Well
Central, Bennet Well South and Bennet Well Channel.
The Mineral Resource (JORC 2012) estimate is:
• Inferred Resource: 16.9 Mt at 335 ppm eU3O8 for total contained uranium-oxide of 12.5 Mlb
(5,670t) at 150 ppm cut-off;
• Indicated Resource: 21.9 Mt at 375 ppm eU3O8 for total contained uranium-oxide of 18.1 Mlb
(8,230t) at 150 ppm cut-off;
•
total combined Mineral Resource: 38.9 Mt at 360 ppm eU3O8, for total contained uranium-
oxide of 30.9 Mlb (13,990t) at 150 ppm cut-off.
Table 1: Mineral Resource at various cut-off
Deposit
Cutoff
(ppm U3O8)
Deposit Mass
(t)
Deposit Grade
(ppm eU3O8)
Mass U3O8
(kg)
Mass U3O8
(lbs)
Bennet Well Total
Bennet Well Total
Bennet Well Total
Bennet Well Total
Bennet Well Total
Bennet Well Total
Bennet Well Total
Bennet Well Total
Bennet Well Total
125
150
175
200
250
300
400
500
800
39,207,000
38,871,000
36,205,000
34,205,000
26,484,000
19,310,000
10,157,000
6,494,000
1,206,000
355
360
375
385
430
490
620
715
1175
13,920,000
30,700,000
13,990,000
30,900,000
13,580,000
29,900,000
13,170,000
29,000,000
11,390,000
25,100,000
9,460,000
6,300,000
4,640,000
1,420,000
20,900,000
13,900,000
10,200,000
3,100,000
5
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
Deposit
Cutoff
(ppm U3O8)
Deposit Mass
(t)
Deposit Grade
(ppm eU3O8)
Mass U3O8
(kg)
Mass U3O8
(lbs)
Bennet Well Indicated
125
Bennet Well Indicated 150
Bennet Well Indicated
Bennet Well Indicated
Bennet Well Indicated
Bennet Well Indicated
Bennet Well Indicated
Bennet Well Indicated
Bennet Well Indicated
175
200
250
300
400
500
800
22,028,000
21,939,000
21,732,000
20,916,000
17,404,000
13,044,000
7,421,000
4,496,000
353,000
375
375
380
385
415
465
560
635
910
8,260,000
18,200,000
8,230,000
18,100,000
8,260,000
8,050,000
7,220,000
6,070,000
4,160,000
2,850,000
320,000
18,200,000
17,800,000
15,900,000
13,400,000
9,200,000
6,300,000
700,000
Deposit
Cutoff
(ppm U3O8)
Deposit Mass
(t)
Deposit Grade
(ppm eU3O8)
Mass U3O8
(kg)
Mass U3O8
(lbs)
Bennet Well Inferred
125
Bennet Well Inferred
150
Bennet Well Inferred
Bennet Well Inferred
Bennet Well Inferred
Bennet Well Inferred
Bennet Well Inferred
Bennet Well Inferred
Bennet Well Inferred
175
200
250
300
400
500
800
17,179,000
16,932,000
14,474,000
13,288,000
9,080,000
6,266,000
2,736,000
1,998,000
853,000
335
335
365
380
455
535
780
900
1285
5,750,000
12,700,000
5,670,000
12,500,000
5,280,000
5,050,000
4,130,000
3,350,000
2,130,000
1,800,000
1,100,000
11,600,000
11,100,000
9,100,000
7,400,000
4,700,000
4,000,000
2,400,000
Note: table shows rounded numbers therefore units may not convert nor sum exactly
Work Completed – Operational Period
During the reported term, activities completed have included the following:
•
initiation of tenement-wide passive seismic program over the Flagstaff tenement, situated approx. 10km
northwest of Bennet Well. The passive seismic allowed the Company to meet the minimum statutory
expenditure commitment for Flagstaff before the end of its first year of tenure in March 2021. All
equipment and personnel for the surveys were supplied by Resource Potentials Pty Ltd. Unprecedented
rainfall during the autumn and winter months resulted in the temporary postponement of the fieldwork
however, continuous communications between Cauldron and Resource Potentials have established that
ground conditions are now sufficiently dry to allow recommencement of survey work. At the time of
writing, the survey crew are remobilising to Flagstaff to complete the program and results are expected
at the start of the next operational year (i.e., Q4 2021).
• appointment of Asha Rao as Exploration Manager for the Yanrey Uranium and Blackwood Gold Projects.
Asha is a highly skilled geologist with a broad range of experience across multiple uranium and gold
deposits in Canada, Africa and Australia.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
6
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
GOLD
Like no other commodity, gold has held the fascination of human societies since the beginning of recorded
time. Empires and kingdoms were built and destroyed over gold. As societies developed, gold was universally
accepted as a satisfactory form of payment. In short, history has given gold a power surpassing that of any
other commodity on the planet, and that power has never disappeared.
That fascination with gold has been at extreme levels in recent times, with the price of gold presently trading
at around US$1,770/oz, not far off the high of US$2,070/oz that occurred in August 2020.
And the fascination with the Golden Triangle in Victoria has never been greater.
The “Golden Triangle” is a colloquial term for a highly productive central portion of the Victorian gold province,
contains the Bendigo (>22.4 million ounces of gold production), Ballarat (>13.1 million ounces of gold
production), Castlemaine (>4.2 million ounces of gold production) and Stawell goldfields (>2.6 million ounces
of gold production).
The central portion of the Victorian gold province, one of the world’s most productive and until recently, largely
forgotten gold producing areas, accounting for more than 2% of world gold production and 30% of Australian
gold production since 1850.
The geology of Victoria is split into twelve distinct zones, each having a distinct stratigraphic, structural
and lithological style. Of these zones, the Ballarat, Melbourne and Stawell zones are historically the most
productive for gold (Figure 2):
Figure 2: Victorian geological zones with goldfield coloured by production (GeoVic3)
There have been numerous significant recent successes in the Golden Triangle, including but not limited to,
the finding of significant additional gold resources at the Fosterville Gold Mine that has led to it becoming one
of the world’s highest-grade and most profitable gold mines.
Cauldron is looking to have success at the historic Blackwood Gold Project located in the heart of the Golden
Triangle.
7
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
BLACKWOOD GOLDFIELD PROJECT, VICTORIA
Cauldron holds a 51% joint venture interest in the Blackwood Gold Project located south-east of Daylesford,
in the highly prospective Central Victorian Goldfields that surround Ballarat.
The Blackwood Gold Project, which comprises Exploration Licence 5479, covers an area of~ 24 km2 and secure
the most significant portion of the highly prospective Blackwood Goldfield.
The Exploration Licence is granted and in good standing with a licence expiry date of 23 March 2024.
Under the joint venture agreement, Cauldron has stepped earn-in rights to increase its ownership from 51%
to 65% and then up to 80% ownership, following the achievement of certain milestones, as follows:
• CXU to earn 65% of the joint venture following achievement of a Mineral Resource (JORC 2012)
containing at least 300,000 ounces of gold;
• CXU has a further right to earn-in to 80% ownership of the joint venture following the mining production
of gold at a rate of at least 10,000 ounces per annum.
From 1864 to 1960 the Blackwood Goldfield produced about 218,000 ounces of gold from orogenic gold
sources (199,000 ounces) and from placer sources (19,000 ounces).2 Gold was won down to a depth of 100
m below surface, with very little mining activity below a depth of 150 m. The Sultan mine is the deepest in the
goldfield with production levels at 230 m below ground surface and its shaft reaching 274 m, and still in pay.
The Project is centred on the Sultan Mine which historically produced a little over 73,000 ounces of gold at an
average grade of 28 g/t. In addition, the project contains in excess of 250 underground workings; with the
largest known producers shown in Table 1, which follows.
Table 1: Gold production various reef sources in Blackwood Goldfield
Mine
North Sultan
Sultan
Sultana
Mounters
Homeward Bound
Bog Hill
Annie Laurie
Grace Edgerton
British Lion
Worked Depth
[m]
Ore Mined [t]
Gold Produced
[oz]
Grade [g/t Au]
243
231
61
134
20
62
76
62
82,000
19,070
1,090
620
73,310
1,530
9,910
450
3,180
270
2,850
1,100
28
16
80
Source: Report titled “The Gold Mines of Blackwood” prepared by Erik Norum, Consultant Geologist, August
2018
Note: total reported production in this table is over 93,000 ounces for the larger producers; 218,000
ounces for field
Most mining activity on reef structures in the goldfield halted at shallow depths. Cessation of mining in many
cases was not due to depletion of mineralisation but to other factors such as inability to cope with high ground
water flows in the underground workings or inability to raise the capital for development work.
Cauldron has undertaken a detailed technical review of all available historical records and based on this review
has determined that the Blackwood has the potential to host multiple high-grade gold systems and that there
exists within the Project field a near contiguous 3.5km long trend of high-quality gold exploration targets.
In mid-March 2021, Cauldron received approval from the ERR to undertake its drilling program, but was
subsequently advised that it would require consent of Melbourne Water.
In late June 2021, Cauldron received consent from Melbourne Water being the last remaining consent/approval
required to access the existing underground infrastructure at Blackwood for the purposes of exploration and
drilling of high priority targets.
2
Source: Report titled “The Gold Mines of Blackwood” prepared by Erik Norum, Consultant Geologist,
August 2018
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
8
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
The Company’s approved drilling plan involves use of the Tyrconnel Adit and drive as a drill access point to
target the modelled deeper high-grade plunges (Figure 3) with no impact on surface.
Figure 3: SN Long Section showing historical shafts & production
The walk-in tunnel system can also be used to structurally map and sample the multiple reef structures
identified from historical activities (Figure 4).
Figure 4: the walk-in Tyrconnel Adit accesses under Pioneer and Mounters shafts allowing access for bulk
sampling and multiple short drill opportunities into the predicted high-grade reefs underfoot.
9
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
This drive also allows physical access to the key northern shaft areas of Pioneer and Mounters which were
stopped by lack of pumping technology. Accessing these areas for sampling grows the geological understanding
but may also open up the area for potential production without significant time or cost.
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
Figure 5: Parallel lode structures untested by drilling
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
10
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
Towards the end of the reported year, the Company announced the achievement of several key milestones:
• appointment of Gary Gray, Operations Manager for the Blackwood Gold Project. Gary has a long and
extensive history in the mining industry, specialising in multiple underground mining styles throughout
Australia.
• finalisation of the terms of engagement with its preferred drilling contractor, Core Prospecting Pty Limited
of Heathcote Victoria.
•
the completion of over 450m of compressed air and water lines, and
•
completion of initial community engagement programs aimed at outlining Cauldron’s work approach and
objectives.
On 16 August 2021, the Company announced that drilling had commenced. The program is expected to
continue intermittently with alternating ground control work to establish safe access into the old mine workings
to access subsequent drill positions.
As at the date of this report, drilling is presently suspended whilst the Cauldron site team undertake ground
support work. The combination of excessive rainfall and deteriorating, aging, ground support timbers resulted
in an unexpected Fall of Ground (FoG) that did not endanger personnel but did temporarily block access for the
drilling equipment. Clearance work was initiated immediately to remove the blockages and further enhance
existing ground support by pressure grouting the roof of the historical underground adits and securing with
nets and bolts. This ground support work is progressing well and remains on track to enable resumption of
drilling activities initially focused on the high-grade area adjacent to the Annie Laurie Reef. The first phase of
the drilling program is designed to include 36 holes for ~4,800 metres.
Concurrently, an application for a Prospecting Licence was submitted at the end of the reported year. According
to standard ERR regulatory policy, these applications become public information immediately after submission
by the parent company. The continual message to the local community has involved Cauldron’s current
innovative traditional mining plan that does not produce waste dumps and utilises a remote process plant
to turn the waste rock into a soil remediation product. Additional innovation involves the treatment of mine
wastewater using algae to provide re-establish a habitat for local fluvial species, including trout and yabbies.
The latter is in partnership with local farmer groups. These innovative strategies inculcate a narrow-vein
style, handheld rail mining operation to have no surface impact or expression, which is required for current
Victorian government approvals, and no impact to the local community. Treating the wastewater from the mine
to remove deleterious and toxic elements, such as arsenic, and recreating the local wetland habitats for flora
and fauna that once thrived in this area, will have a net positive impact on the surrounding environment by
offsetting the ravaging impacts of climate change as well as meeting the Company’s ultimate net-zero carbon
goals in line with company objectives and culture.
11
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
SAND
Sand is by far the largest globally mined commodity (Figure 6), outstripping the shipments of coal, iron ore
and grain.
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
Figure 6: Estimated Global Annual Bulk Commodity Production in billion tonnes (2018/2019)[Source CXU]
The international sand and aggregate market in 2017 was worth an estimated US$4.5 billion. By 2030, its
worth is estimated to grow to US$60 billion, representing a growth rate of 5.5 per cent per year.
WA SANDS PROJECT, MID-WEST REGION OF WESTERN AUSTRALIA
Cauldron has secured and is in the process of transferring a mining lease and several exploration licences
located on three of the largest river systems crossing the coast in central to northern Western Australia.
These licences cover the mouths of the Fitzroy River at Derby, the Ashburton River at Onslow and the
Gascoyne River at Carnarvon.
The Fitzroy, Ashburton and Gascoyne rivers drain a huge area of granitic rocks commencing from its respective
headwater all the way to the project area, being the mouth of the river (Figure 7). Every time there is a
flooding event somewhere in the catchment area, sand is deposited into the project area, replenishing the
supply of sand and re-establishing the river mouth in its original pristine condition. Some river mouths
are being ‘swamped’ from flooding events, with excessive sand build-up preventing the use of high value
infrastructure facilities, which adversely affect the economies of these regional areas.
Figure 7: Cauldron River Sands Project - Catchment Area draining into the project area at river mouth
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
12
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
Under the terms of the acquisition agreement for the WA Sands Project, Cauldron will acquire a 100% ownership
interest in the leases listed in Table 1 below (Tenements), together with all of the technical information
pertaining to the Tenements and the benefit of any third-party agreements.
Table 2: List of Tenements within the River Sand Project:
Tenement
Location
Legal and Beneficial
Holder
ELA09/1816
Carnarvon
Onslow Resources Ltd
MLA09/150
Carnarvon
Onslow Resources Ltd
ELA04/2548
Derby
Regent Point Pty Ltd
E08/2328
E08/2329
E08/2642
M08/487
L08/71
Onslow
Onslow
Onslow
Onslow
Onslow
Quarry Park Pty Ltd
Quarry Park Pty Ltd
Anthony Warren Slater
Quarry Park Pty Ltd
Quarry Park Pty Ltd
Interest
Grant Date
Expiry Date
100%
100%
100%
100%
100%
100%
100%
100%
Under application
Under application
Under application
3/12/2015
11/06/2013
29/09/2015
12/04/2013
29/04/2013
N/a
N/a
N/a
02-Dec-20
10-Jun-23
28-Sep-20
11-Apr-34
28-Apr-34
Cauldron notes that Mining Lease Application 09/150, is listed as “dead” on the register maintained by the
Department of Mines, Industry Regulation and Safety of Western Australia. Cauldron identified this fact it as
part of its due diligence conducted prior to entering into the acquisition agreement. The recording of MLA09/150
as “dead” follows a decision in the Western Australian Supreme Court in the case Onslow Resources Ltd v
The Minister for Mines and Petroleum [2020] WASC 310, in which the Justice determined that the application
for ML09/150 was invalid. The decision is the subject of appeal. To manage the risk of a negative decision,
the Company has applied for a duplicate Mining Lease Application 09/180 to counter the risk of loss. This
application has now passed its objection period.
In addition, Cauldron notes that Mining Lease 08/487 is the subject of an action under which a third party is
seeking to prevent the transfer to Cauldron. As at the date of this report the matter has not yet been resolved,
with the matter remaining on foot.
Limited work was possible during the financial year, with ownership of four of the Tenements only being
transferred to Cauldron in June 2021.
Despite this, significant progress has been made on the establishment of a concrete supply business in Onslow
and expected to utilise sand from the Tenements in the manufacture of the concrete.
In May 2021, Cauldron announced that an agreement reached with Kuuwa Rentals Pty Ltd to lease a T4 Sami
Mobile Concrete Batching Plant, capable of producing a range of high strength quality concrete products.
Contemporaneously, Cauldron signed an initial one-year property lease with Traditional Owner, BTAC, in
Onslow’s industrial zone to house the Mobile Concrete Batching Plant.
13
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
Figure 8: T4 Sami Mobile Concrete Batching Plant, Lot 697 Cornish Way, Onslow
Kuuwa is a hire company based in Onslow having majority ownership by the Buurabalayji Thalanyji Aboriginal
Corporation (BTAC). Cauldron plans to further its commercial relationship with Kuuwa by hiring equipment
required to operate the plant, following Shire approval. The region is expected to experience an uplift in
investment activity from resource companies supporting the two significant off-shore gas projects owned by
BHP and Chevron. Cauldron views these as potential markets for concrete sales once the plant has been re-
commissioned.
The high summer and autumn temperatures limit effective transport distance of high-quality concrete. Many
of the potential projects, currently in planning, require delivery of concrete outside the effective trucking
distance from the town of Onslow. The CBP is mobile allowing the facility to be moved to any project site
which is expected to commence construction.
RIO COLORADO PROJECT, CATAMARCA (ARGENTINA)
No work was completed at the Rio Colorado Project during the year.
At 30 June 2021, with no interest having been received with respect to joint venture, farm-in or sale, it was
decided to cease all activities on the Rio Colorado Project.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
14
CAULDRON ENERGY LIMITED
OPERATIONS REPORT
Competent Person Statements
Exploration Results
The information in this report that relates to exploration results for the Blackwood Gold Project is extracted
from reports compiled by Jess Oram who is employed by Cauldron, and a member of the Australasian Institute
of Geoscientists and a Member of the Geological Society of Australia and by Mr Stewart Govett.
Each pf Mr Oram and Mr Govett have provided Competent Person’s consents and these remain in place for
subsequent releases by the Company of the information in the same form and context, until the consent is
withdrawn or replaced by a subsequent report and accompanying consent.
The information in this report that relates to exploration results for the Western Australian Sands Project
is extracted from reports compiled by Jess Oram who is employed by Cauldron, and a member of the
Australasian Institute of Geoscientists and a Member of the Geological Society of Australia. Mr Oram has
provided a Competent Person’s consent which remains in place for subsequent releases by the Company of the
information in the same form and context, until the consent is withdrawn or replaced by a subsequent report
and accompanying consent.
Mineral Resources
The information in this report that relates to the Mineral Resource for the Bennet Well Uranium Prospect
is based on information compiled by Jess Oram who is the Executive Director, Chief Executive Officer and
Exploration Manager of Cauldron, and a member of the Australasian Institute of Geoscientists and a Member
of the Geological Society of Australia.
The information in this report that relates to sampling techniques and data, exploration results, geological
interpretation and Exploration Targets, Mineral Resources or Ore Reserves for the Yanrey Project, the Rio
Colorado Project and the Blackwood Gold Project is also based on information compiled by Jess Oram.
Mr Oram has sufficient experience of relevance to the styles of mineralisation and the types of deposits under
consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012
Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves. Mr Oram consents to the inclusion in this report of the matters based on
information in the form and context in which it appears.
Forward looking statements
Information in this report may contain forward-looking statements. Forward-looking statements include, but
are not limited to, statements concerning Cauldron Energy Limited’s business plans, intentions, opportunities,
expectations, capabilities and other statements that are not historical facts. Forward-looking statements
include those containing such words as could-plan-target-estimate-forecast-anticipate-indicate-expect-
intend-may-potential-should or similar expressions. Such forward-looking statements are not guarantees of
future performance and involve known and unknown risks, uncertainties, assumptions and other important
factors, many of which are beyond the control of the Company, and which could cause actual results to differ
from those expressed in this report. Because actual results might differ materially to the information in this
report, the Company does not make, and this announcement should not be relied upon as, any representation
or warranty as to the accuracy, or reasonableness, of the underlying assumptions and uncertainties.
15
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
DIRECTORS’ REPORT
Your directors present their report together with the financial report on the Group consisting of Cauldron
Energy Limited (“Cauldron” or “the Company”) and its controlled entities (“the Group”) for the financial
year ended 30 June 2021 and the auditors’ 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 in office at the date of this report are:
Mr Simon Youds
Executive Director and Chairman
Appointed 15 March 2019 as Non-executive Director, promoted to Executive Chairman in May 2021
B.Eng (Mining), MBA, AUSIMM Member
Mr Simon Youds was appointed as a Non-Executive Director and Chairman effective 15 March 2019. During
the current financial year, Mr Youds was promoted to the position of Executive Chairman of the Company. Mr
Youds is currently a director of ASX-listed company Vector Resources Ltd (under administration). He is former
Chief Executive Officer of African Iron, an iron ore explorer in the Republic of Congo, where he facilitated a
A$388 million deal for its purchase by Exxaro Resources. In other highlights, Mr Youds was Managing Director,
Australia, of Consolidated Minerals Limited, which owned and operated the Woodie Woodie and Coobina
manganese and chromite mining operations, located in the Pilbara region of Western Australia. Mr Youds also
spent five years working as a member of the WMC team at Olympic Dam in South Australia developing the
world’s largest uranium deposit. Further in Africa Mr Youds held various operating and development roles at
the Bibiani Gold Mine in Ghana and the Bulyanhulu and North Mara Gold Mines in Tanzania. Mr Youds has a
Bachelor of Engineering (B.Eng) in Mining and holds an MBA degree from Deakin University, Victoria, and is a
member of the Australasian Institute of Mining and Metallurgy.
Directorships of listed companies held within the last 3 years: Vector Resources Ltd (under administration)
Interest in Shares:
Interest in Options:
Interest in Performance Rights:
Mr Jess Oram
Non-Executive Director
4,172,864 Fully Paid Ordinary Shares
Nil
4,000,000
Appointed Executive Director on 1 January 2018; moved to Non-executive Director from 16 July 2021
B.Sc, AIG member
From April 2014 until 1 January 2018, Mr Oram served the Company as Exploration Manager. On 1 January
2018 Mr Oram was promoted to Chief Executive Officer and Executive Director. Subsequent to year end, on
15 July 2021, Mr Oram has resigned as Chief Executive Officer of the Company in order to take up a position
with ASX-listed company Paladin Energy Limited but remains with the Company as a non-executive director.
Mr Oram has over 25 years’ experience in mineral exploration in a wide variety of geological terrains and
resource commodities with an accomplished track record in establishing and leading the exploration function
of several companies. In uranium, Mr Oram was Chief Exploration Geologist for Heathgate Resources Pty Ltd
where he was involved in mining feasibility studies of the Four Mine Uranium deposits and ‘team leader’ of a
group of geoscientists involved in the discovery of the Pepegoona Uranium, Pannikan Uranium and Pannikan
West Uranium deposits. Mr Oram has a Bachelor of Science (B.Sc), Geology major from the University of
Queensland and is a member of the Australian Institute of Geoscientists (AIG).
Directorships of listed companies held within the last 3 years: Force Commodities Limited
(February 2019 to Feb 2021)
Interest in Shares:
Interest in Options:
Interest in Performance Rights:
Nil
Nil
2,000,000
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
16
CAULDRON ENERGY LIMITED
DIRECTORS’ REPORT
Mr Qiu Derong
Non-Executive Director
Appointed on 6 November 2009
Mr Qiu is a highly experienced industrialist with more than 30 years’ experience in the architecture, construction
and real estate industries in China as well as over 20 years of experience in the management of enterprises
and projects throughout the country.
Mr Qiu has a MBA obtained from the Oxford Commercial College, a joint program operated by Oxford University
in China.
Directorships of listed companies held within the last 3 years: Nil
Interest in Shares:
Interest in Options:
Interest in Performance Rights:
Ms Judy Li
Non-Executive Director
Appointed on 17 December 2014
47,544,710 Fully Paid Ordinary Shares
Nil
1,000,000
Ms Judy Li has over 10 years of extensive international trading experience in hazardous chemical products.
She has also been involved in international design works for global corporates and government clients while
working for Surbana that has been jointly held by two giant Singapore companies - CapitaLand and Temasek
Holdings. Throughout her career, Judy has contributed to building tighter relationship between corporates and
governments. Judy earned her masters degree in art with Honors Architecture from University of Edinburgh
in the United Kingdom.
Directorships of listed companies held within the last 3 years: Nil
Interest in Shares:
Interest in Options:
Interest in Performance Rights:
Mr Chengchong Zhou
Non-Executive Director
Appointed on 2 May 2017
Nil
Nil
1,000,000
Mr Chengchong Zhou is an experienced financial analyst in the materials and energy sector. In his career, Mr
Zhou covers an extensive list of junior to mature mining companies and has developed a good understanding
of industry financing. Mr Zhou received his Bachelor of Science in Economics degree from Wharton Business
School in 2013.
Directorships of listed companies held within the last 3 years: Nil
Interest in Shares:
Interest in Options:
Interest in Performance Rights:
Nil
Nil
1,000,000
Directors have held office since the start of the financial year to the date of this report unless otherwise stated.
COMPANY SECRETARY
Michael Fry was appointed Company Secretary of Cauldron on 11 April 2019. Michael holds a Bachelor of
Commerce degree from the University of Western Australia and has worked in the capacity of chief financial
officer and company secretary of ASX listed companies for over 20 years.
17
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
REMUNERARION REPORT (AUDITED)
DIRECTORS’ REPORT
CAULDRON ENERGY LIMITED
This remuneration report, which forms part of the directors’ report, sets out information about the remuneration
of Cauldron’s directors for the financial year ended 30 June 2021.
KEY MANAGEMENT PERSONNEL
Key Management Personnel includes:
Simon Youds (Non-executive Chairman; appointed Executive Chairman in May 2021)
Jess Oram (Chief Executive Officer and Executive Director – resigned 15 July 2021; remains with
Company in capacity of Non-executive Director)
Qiu Derong (Non-executive Director)
Judy Li (Non-executive Director)
Chenchong Zhou (Non-executive Director)
The named persons held their positions for the duration of the financial year and up to the date of this
report, unless otherwise indicated.
REMUNERATION POLICY
The remuneration policy of Cauldron has been designed to align director objectives with shareholder and
business objectives by providing a fixed remuneration component which is assessed on an annual basis in line
with market rates.
Cauldron’s board believes the remuneration policy to be appropriate and effective in its ability to attract and
retain appropriately skilled directors to run and manage the Group, as well as create goal congruence between
directors and shareholders.
During the year, the Company did not have a separately established remuneration committee. The Board is
responsible for determining and reviewing remuneration arrangements for the executive and non-executive
directors. The Board assesses the appropriateness of the nature and amount of remuneration of such officers
on a yearly basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from retention of a high quality board. Due to the size of the business, a
remuneration consultant is not engaged in making this assessment.
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The executive director determines payments to the non-executive directors
and reviews their remuneration annually, based on market practice, duties and accountability.
The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by
shareholders at the Annual General Meeting. Shareholders approved the maximum total aggregate fixed sum
per annum to paid to non-executive directors be set at $750,000 at the 2015 Annual General Meeting. 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.
REMUNERATION REPORT AT AGM
The 2020 remuneration report received positive shareholder support at the Annual General Meeting of the
Company held on 29 January 2021 whereby of the proxies received 99.93% voted in favor of the adoption of
the remuneration report.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
18
CAULDRON ENERGY LIMITED
DIRECTORS’ REPORT
REMUNERARION REPORT (AUDITED)
COMPANY PERFORMANCE AND SHAREHOLDER WEALTH
Below is a table summarizing key performance and shareholder wealth statistics for the Group over the last
five financial years.
Financial Year
30 June 2021
30 June 2020
30 June 2019
30 June 2018
30 June 2017
Profit/(loss)
after tax
$
Earnings/(loss)
per share
(cents)
Company Share
Price
(cents)
(669,504)
(0.16)
(1,634,616)
(3,197,797)
173,299
(11,954,682)
(0.47)
(0.97)
0.05
(3.83)
3.9
1.6
1.7
3.0
3.4
The remuneration policy has been tailored to increase goal congruence between shareholders and directors.
This has been achieved by the issue of performance rights to directors to encourage the alignment of personal
and shareholder interest.
KMP REMUNERATION
Key Management Personnel (KMP) remuneration for the year ended 30 June 2021 was:
30 JUNE 2021
SHORT-TERM
BENEFITS
LONG-TERM
BENEFITS
POST EMPLOYMENT
Directors
Salary,
Fees &
Leave ($)
Other
($)
Long Service
Leave ($)
Superannuation
($)
Retirement
Benefits
($)
Simon Youds (i)
135,673
Jess Oram (ii)
213,000
Qiu Derong (iii)
Judy Li (iv)
36,000
36,000
Chenchong Zhou (v)
36,000
TOTAL
456,673
-
-
-
-
-
-
-
-
3,809
20,235
-
-
-
-
-
-
3,809
20,235
-
-
-
-
-
-
SHARE
BASED
PAYMENTS
(vi)
TOTAL
Remuneration
performance
based
$
$
%
38,667
174,340
22.18%
19,333
256,377
7.54%
9,667
45,667
21.17%
9,667
45,667
21.17%
9,667
45,667
21.17%
87,001
567,718
15.32%
(i)
In his capacity as Executive Chairman, Mr Simon Youds is entitled to a fixed fee of $48,000 per annum
from the date of his appointment (15 March 2019) for provision of his services a director and a variable
fee of $100 per hour to a maximum of 160 hours per month for assistance on a day-to-day basis in
supervising and managing work at the Company’s projects. The Company has entered into a consulting
agreement with Youds Mining Consulting Pty Ltd, a company controlled by Mr Simon Youds, for the
provision of these services.
(ii) Mr Jess Oram was employed in the capacity of Chief Executive Officer and Executive Director of the
Company for the entirety of the 2021 financial year and in this capacity was entitled to $213,000 plus
superannuation.
19
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
REMUNERARION REPORT (AUDITED)
DIRECTORS’ REPORT
CAULDRON ENERGY LIMITED
(iii)
(iv)
(v)
In his capacity as Non-Executive Director, Mr Qiu Derong is entitled to a fee of $36,000 per annum. The
Company has entered into a consulting agreement for the provision of these services. Amounts included
in this table represent accrued fees.
In her capacity as Non-Executive Director, Ms Judy Li is entitled to a fee of $36,000 per annum. The
Company has entered into a consulting agreement for the provision of these services. Amounts included
in this table represent accrued fees.
In his capacity as Non-Executive Director, Mr Chenchong Zhou is entitled to a fee of $36,000 per annum.
A consulting agreement for the provision of services is yet to be executed. Amounts included in this
table represent accrued fees.
At a Board meeting held on 21 May 2020, the Directors resolved to issue, subject to shareholder
(vi)
approval, performance rights to each of its directors as listed below. Each performance right has the right to
convert into one fully paid ordinary share subject to meeting stated performance conditions and the terms
of the Company’s Performance Rights Plan. At a general meeting of the Company held on 11 August 2020,
shareholders approved the issue of the performance rights. For remuneration purposes, the entitlement is
calculated from the date of the Directors’ resolution on 21 May 2020:
Name of Director
Simon Youds
Jess Oram
Qiu Derong
Judy Li
Chenchong Zhou
Number
4,000,000
2,000,000
1,000,000
1,000,000
1,000,000
9,000,000
Key Management Personnel (KMP) remuneration for the year ended 30 June 2020 was:
30 JUNE 2020
SHORT-TERM
BENEFITS
LONG-TERM
BENEFITS
POST EMPLOYMENT
SHARE BASED
PAYMENTS
(vi)
TOTAL
Remuneration
performance
based
Directors
Simon Youds
Jess Oram
Qiu Derong
Judy Li
Chenchong Zhou
Salary,
Fees &
Leave ($)
48,000
229,388
36,000
36,000
36,000
TOTAL
385,388
Other
($)
Long Service
Leave ($)
Superannuation
($)
Retirement
Benefits ($)
-
-
-
-
-
-
-
-
3,706
20,235
-
-
-
-
-
-
3,706
20,235
-
-
-
-
-
-
$
$
%
4,327
52,337
8.11%
2,119
255,448
0.83%
1,059
37,059
2.86%
1,059
37,059
2.86%
1,059
37,059
2.86%
9,533
418,962
17.51%
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
20
CAULDRON ENERGY LIMITED
DIRECTORS’ REPORT
REMUNERARION REPORT (AUDITED)
KMP INTEREST IN SECURITIES
Shareholdings of Key Management Personnel
30 JUNE 2021
Balance
Issued
Received on op-
tion exercise
Net Change
Balance
1 July 2020
Other
30 June 2021
Directors
Qiu Derong
Simon Youds
47,544,710
4,172,864
51,717,574
-
-
-
-
-
-
-
-
-
47,544,710
4,172,864
51,717,574
Option-holdings of Key Management Personnel
There were no options held by key management personnel at 30 June 2021 (30 June 2020: nil), nor were
there any options granted, exercised or lapsed during the year ended 30 June 2021 (2020: nil).
Performance Rights of Key Management Personnel
Performance Rights are granted to incentivise KMP for increases in the Company’s value as determined by the
underlying market price of its shares, exploration results, and Company performance. Refer to note 27 for
details
As at the date of this report, performance rights on issue were as follows:
Issue date
Expiry date
Exercise price
Number
16 September 2020
10 August 2025
Nil
9,000,000
The Performance Rights were valued on the date of grant with the following factors and assumptions used to
determine their fair value:
Grant date
Period (years) Share price on
Grant Date
Recognition
date
Probability
Valuation per
right
11 August 2020
5
$0.029
21 May 2020
100%
$0.029
The performance rights held be key management personnel as at the date of this report are:
30 JUNE 2021
Directors
Simon Youds
Jess Oram
Qiu Derong
Judy Li
Chenchong Zhou
Balance
1 July 2020
Issued
Cancelled/
Converted
Balance
30 June
2021
% Vested
Maximum
Value Yet to
Vest $
-
-
-
-
-
-
4,000,000
2,000,000
1,000,000
1,000,000
1,000,000
9,000,000
-
-
-
-
-
-
4,000,000
2,000,000
1,000,000
1,000,000
1,000,000
0%
0%
0%
0%
0%
73,096
36,548
18,274
18,274
18,274
9,000,000
0%
164,466
KMP OTHER
Loans to Key Management Personnel
There were no loans to key management personnel during the year.
Other Transactions with Key Management Personnel
There were no other transactions with key management personnel that occurred during the year not
described above.
End of Audited Remuneration Report.
21
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
DIRECTORS’ REPORT
PRINCIPAL ACTIVITIES
The principal activities of the Group during the financial year was mineral exploration.
There were no significant changes in the nature of the Group’s principal activities during the financial year.
OPERATING RESULTS
The loss of the Group after providing for income tax amounted to $669,504 (30 June 2020: $1,634,616 loss).
REVIEW OF OPERATIONS
Cauldron is an Australian exploration company resulting from the merger of Scimitar Resources Limited and
Jackson Minerals Limited in 2009. Cauldron retains an experienced board of directors with proven success in
the resources sector.
Cauldron has project interests in Western Australia, Victoria and Catamarca (Argentine) prospective for
uranium, gold and copper as set out under the heading “Project Information” below.
The following significant transactions and events occurred during the financial year:
Blackwood Gold Project
On 28 November 2019, Cauldron publicly announced that it had entered into a heads of agreement to acquire
an initial 51% interest in the Blackwood Gold Project located in central Victoria, with a right to earn up to 80%
through achievement of project milestones.
The Blackwood Gold Project incorporates the largely forgotten historic Blackwood Goldfield, from which 220,000
ounces of gold was produced in the period between 1855 and 1890, largely from hard-rock underground
mining of gold-rich quartz reef structures.
In December 2019, Cauldron completed its due diligence and committed to proceeding with the Project.
In March 2020, a joint venture agreement was executed, and a joint venture company incorporated – Blackwood
Goldfield Joint Venture Pty Ltd, ACN 640 126 638.
On 16 September 2020, having received shareholder approval and satisfied the conditions precedent in
relation to the acquisition of a 51% joint venture interest in the Blackwood Gold Project, the Company issued
the securities to the vendor (and nominees) comprising 17,000,000 fully paid ordinary shares, 10,000,000
unlisted options having an exercise price of $0.03 and an expiry date of 16 September 2022 and 6,000,000
unlisted options having an exercise price of $0.05 and an expiry date of 16 September 2023.
November 2020 Placement
On 6 December 2020, Cauldron completed a private placement resulting in the issue of 51,612,903 shares at
$0.031 (3.1 cents) per share each (Shares), raising a total of $1,600,000 before costs.
Participants in the Placement also received a free attaching option on a 1 for 2 basis exercisable at $0.05 (5
cents) with an expiry of 30 November 2023 (Unlisted Options), resulting in the issue of 25,806,452 unlisted
options.
The Lead Manager received a placement fee of 6%, settled in Shares, and an incentive fee of 1 million listed
options on the same terms as participants in the placement for each $100,000 raised resulting in the Lead
Manager being issued 3,096,774 Shares and 17,548,387 Unlisted Options.
In total, 54,709,677 Shares and 43,354,839 Unlisted Options were issued.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
22
CAULDRON ENERGY LIMITED
DIRECTORS’ REPORT
WA Sands Project
In late December 2020, Cauldron announced the acquisition of a 100% ownership interest in a number of
river sand tenements located at the mouths of the Carnarvon, Onslow and Derby rivers in Western Australia,
collectively covering an area of about 286 km2.
The acquisition is partially complete, with ownership of four of the eight licences transferred to Cauldron to
date.
In June 2021, ownership of four of the sought-after river mouth sand licences (EL08/2328, EL08/2329 and
EL08/2462 and miscellaneous licence L08/71) located at the mouth of the Ashburton River in Onslow were
transferred to Cauldron.
An appeal by the project vendor in relation to its application for Mining Lease Application 09/150, located at
the mouth of the Gascoyne River at Carnarvon, being determined invalid is ongoing.
Proceedings also remain ongoing against Cauldron, the project vendor, the Mining Registrar and the WA
Minister for Mines, Industry Regulation and Safety with respect to Mining Lease 08/487, located at the mouth
of the Ashburton River in Onslow, where a third party is opposing the transfer of Mining Lease 08/487 to
Cauldron.
The project vendor and the Company have agreed that if the legal proceedings in relation to either MLA09/150
or ML08/487 are not concluded in favour of Cauldron or the project vendor, that they may consider an
adjustment to the consideration or a replacement of the tenement(s).
PROJECT INFORMATION
Refer Operations section of Annual Report.
BUSINESS STRATEGIES AND PROSPECTS FOR THE FORTHCOMING YEAR
The Company is involved in the mineral exploration industry.
The Blackwood Goldfield Project will be Cauldron’s primary focus with activity at Yanrey Project dependent
upon a change of attitude from the Western Australian state Labor government which is presently opposed to
uranium mining in the state of Western Australia. In addition, Cauldron aims to progress its WA Sands Project
and commence operation of a concrete-supply business.
SIGNFICANT CHANGES IN STATE OF AFFAIRS
There have been no changes in the state of affairs of the Group other than those disclosed in the review of
operations.
EVENTS SUBSEQUENT TO REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which 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 future financial years, except for the following.
Resignation of Mr Jess Oram as Chief Executive Officer
On 15 July 2021, Mr Jess Oram resigned his full-time position of Chief Executive Officer of the Company but
remains with the Company in the capacity of non-executive director.
23
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
DIRECTORS’ REPORT
September 2021 Placement
On 8 September 2021, Cauldron completed a placement to sophisticated and professional investor clients of
180 Markets Pty Ltd resulting in the issue of 35,294,118 shares at $0.034 (3.4 cents) per share each, raising
a total of $1,200,000 before costs (Placement).
Participants in the Placement also received a free attaching option on a 1 for 2 basis which are exercisable at
$0.05 (5 cents) and which have an expiry of 30 November 2023, resulting in the issue of 17,647,059 unlisted
options.
As Lead Manager to the Placement, 180 Markets Pty Ltd was paid a fee of $72,000, being 6% of the monies
raised pursuant to the Placement.
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 any exploration work.
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way
of a dividend to the date of this report.
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Grant date
Expiry date
Exercise price
23 December 2019
31 December 2021
24 March 2020
31 March 2022
16 September 2020
16 September 2022
16 September 2020
16 September 2023
6 November 2020
30 November 2023
8 November 2021
30 November 2023
(0.03)
(0.03)
(0.03)
(0.05)
(0.05)
(0.05)
Number
6,833,398
16,666,666
10,000,000
6,000,000
43,354,839
17,647,059
No person entitled to exercise the options had or has any right by virtue of the option to participate in any
share issue of the Company or of any other body corporate.
During the financial year and up to and including the date of this report, nil ordinary shares were issued on
the exercise of options.
CORPORATE GOVERNANCE
Throughout FY21, Cauldron’s corporate governance arrangements were consistent with the Corporate
Governance Principles and Recommendations published by the ASX Corporate Governance Council (ASX
Principles).
Cauldron’s 2021 Corporate Governance Statement is available at http://cauldronenergy.com.au/ our-company/
corporate-governance/. The Corporate Governance Statement outlines details in relation to Cauldron’s values,
its Board, Board Committees, risk management framework and financial reporting, diversity and inclusion,
key corporate governance policies and shareholder engagement. Cauldron’s website also contains copies
of Cauldron’s Board and Committee Charters and key policies and documents referred to in the Corporate
Governance Statement.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
24
CAULDRON ENERGY LIMITED
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
Due to the size of the Company, the Board of Directors performs the role of the Audit Committee and
Remuneration Committee.
The number of meetings held during the year and the number of meetings attended by each Director whilst
in office are:
Director
Simon Youds
Jess Oram
Qiu Derong
Judy Li
Chenchong Zhou
Directors’ meetings
Held while in office
Attended
3
3
3
3
3
3
3
3
3
3
Due to distance and differing time zones, and more recently the COVID-19 pandemic, Board matters have
been resolved by way of circular resolution with the Board being kept abreast by management of developments
within the business by regular written and verbal communications.
The Company does not have a formally constituted audit committee or remuneration committee as the board
considers that the Company’s size and type of operation do not warrant such committees.
INDEMNIFICATION AND INSURANCE OF OFFICERS
During the year the Company paid premiums in respect of a contract insuring all the directors and officers
of the Company against liabilities incurred by the directors and officers that may arise from their position as
directors or officers of the Company.
In accordance with normal commercial practice, the disclosure of the total amount of premiums under and
the nature of the liabilities covered by the insurance contract is prohibited by a confidentiality clause in the
contract.
Except for the above, the Company has not indemnified or made an agreement to indemnify any person who
is or has been an officer or auditor of the Company against liabilities incurred as an officer or auditor of the
Company.
The auditor’s independence declaration for the year ended 30 June 2021 has been received and is included on
page 26 of the annual report.
NON-AUDIT SERVICES
There were no non-audit services were provided by the Company’s auditor BDO (WA) Pty Ltd.
This report of the Directors, incorporation the Remuneration Report is signed in accordance with a resolution
of the Board of Directors.
Mr Simon Youds
Executive Chairman
30 September 2021
25
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
AUDITOR’S INDEPENDENCE DECLARATION
CAULDRON ENERGY LIMITED
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
26
CAULDRON ENERGY LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Continuing Operations
Revenue
Other Income
Administration expenses
Employee benefits expenses
Directors’ fees
Compliance and regulatory expenses
Consultancy expenses
Legal fees
Occupancy expenses
Travel expenses
Exploration expenditure
10
27
4
7
Net fair value gain/(loss) on financial assets
Depreciation and amortisation
Share based payments expense
Impairment losses
(Loss)/profit for the year before income tax
Income tax expense
(Loss)/profit for the year from continuing
operations attributable to members of the
Company
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit or
loss:
Exchange difference arising on translation of foreign
operations
Total comprehensive (loss)/profit for the year
attributable to members of the Company
Notes
3 (a)
3 (b)
2021
$
2020
$
1
92,550
1,419
111,424
(77,029)
(384,254)
(170,848)
(116,888)
(106,738)
(230,171)
(35,045)
-
(285,655)
1,138,932
(2,636)
(87,000)
(35,628)
(374,335)
(147,000)
(84,187)
(253,925)
(23,519)
(13,908)
(17,037)
(93,386)
(449,691)
(4,071)
(9,534)
(404,724)
(241,238)
(669,504)
(1,634,616)
-
-
(669,504)
(1,634,616)
-
2,023
(669,504)
(1,632,593)
(Loss)/profit per share
Basic (loss)/profit per share (cents per share)
Diluted (loss)/profit per share (cents per share)
20
20
(0.16)
(0.16)
(0.47)
(0.47)
The above consolidated statement of comprehensive income is to be read in conjunction with
the accompanying notes.
27
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CAULDRON ENERGY LIMITED
Notes
2021
$
2020
$
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
Total current assets
Non-current assets
Exploration and evaluation
Plant and equipment
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Employee entitlements
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Non-Controlling Interests
Accumulated losses
Total equity
8
9
10
12
13
14
15
16
17
19
375,221
77,951
1,517,787
396,311
26,562
600,146
1,970,959
1,023,019
2,243,619
2,311
2,245,930
-
4,947
4,947
4,216,889
1,027,966
956,863
101,121
1,057,984
1,057,984
3,158,905
700,512
92,755
793,267
793,267
234,699
58,269,504
56,380,921
5,129,235
4,203,556
779,448
-
(61,019,282)
(60,349,778)
3,158,905
234,699
The above consolidated statement of financial position is to be read in conjunction with the
accompanying notes.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
28
CAULDRON ENERGY LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
Notes
2021
$
2020
$
Cash flows from operating activities
Payments to suppliers and employees
(1,206,305)
(791,771)
Interest received
1
1,419
Net cash flows used in operating activities
24 (a)
(1,206,304)
(790,352)
Cash flows from investing activities
Payments for exploration and evaluation
Funding provided to Caudillo Resources SA
Proceeds from sales of equity investments
Net cash flows (used in)/ investing activities
Cash flows from financing activities
Proceeds from issue of shares
Net cash flows (used in)/from investing activities
10
16
(694,547)
(309,916)
-
279,761
(19,583)
285,072
(414,786)
(44,427)
1,600,000
1,600,000
705,002
705,002
Net decrease in cash and cash equivalents
(21,090)
(129,777)
Effects of exchange rate changes on cash
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
8
-
396,311
375,221
(593)
526,681
396,311
The above statement of consolidated cash flows is to be read in conjunction with the
accompanying notes.
29
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CAULDRON ENERGY LIMITED
Issued
Capital
Accumulated
Losses
Share Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Non-
Controlling
Interests
Total Equity
$
$
$
$
$
$
55,675,919 (58,715,161)
5,808,480 (1,616,481)
-
4,381,442
-
(1,634,616)
9,534
-
-
(1,625,082)
-
-
-
2,023
-
(1,634,616)
9,534
2,023
-
-
2,023
(1,623,059)
705,002
-
-
-
-
705,002
56,380,921 (60,349,778)
5,818,014 (1,614,458)
56,380,921 (60,349,778)
5,818,014 (1,614,458)
-
-
-
(669,504)
-
(669,504)
-
-
-
-
-
234,699
234,699
-
(669,504)
-
-
-
(669,504)
779,448
1,590,710
-
-
-
316,000
87,000
1,600,000
-
-
-
-
-
-
-
Balance at 1 July
2019
Loss attributable to
members of the parent
entity
Other comprehensive
loss
Total comprehensive
loss for the year
Transactions with
owners in their
capacity as owners
Shares issued during
the period, net of costs
Balance at 30 June
2020
Balance at 1 July
2020
Loss attributable to
members of the parent
entity
Other comprehensive
loss
Total comprehensive
Loss for the year
Transactions with
owners in their
capacity as owners
Acquisition of
Blackwood Gold Project
Acquisition of WA
Sands Project
Shares issued during
the period, net of costs
Balance at 30 June
2021
Performance rights
-
527,000
316,000
1,045,583
-
-
-
-
284,262
-
87,000
554,417
58,269,504 (61,019,282)
6,743,693 (1,614,458)
779,848
3,158,905
The above consolidated statement of changes in equity is to be read in conjunction with the
accompanying notes.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
30
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ........................................................... 32
SEGMENT INFORMATION ................................................................................................. 40
REVENUE AND OTHER INCOME ......................................................................................... 43
IMPAIRMENT LOSSES ...................................................................................................... 43
REMUNERATION OF AUDITORS ......................................................................................... 43
KEY MANAGEMENT PERSONNEL ........................................................................................ 43
INCOME TAX .................................................................................................................. 44
CASH AND CASH EQUIVALENTS ........................................................................................ 45
TRADE AND OTHER RECEIVABLES ..................................................................................... 45
FINANCIAL ASSETS ......................................................................................................... 46
LOANS RECEIVABLE ........................................................................................................ 46
EXPLORATION AND EVALUATION EXPENDITURE .................................................................. 47
PLANT AND EQUIPMENT .................................................................................................. 47
TRADE AND OTHER PAYABLES .......................................................................................... 47
PROVISIONS .................................................................................................................. 47
ISSUED CAPITAL ............................................................................................................ 48
RESERVES ..................................................................................................................... 48
OPTIONS OVER UNISSUED SHARES .................................................................................. 49
ACCUMULATED LOSSES ................................................................................................... 49
EARNINGS/(LOSS) PER SHARE ......................................................................................... 49
CONTROLLED ENTITIES ................................................................................................... 50
RELATED PARTY INFORMATION ......................................................................................... 50
COMMITMENTS .............................................................................................................. 51
CASH FLOW INFORMATION .............................................................................................. 51
FINANCIAL RISK MANAGEMENT ........................................................................................ 52
ASSET ACQUISITIONS ..................................................................................................... 56
SHARE BASED PAYMENTS ................................................................................................ 58
CONTIGENT ASSETS AND LIABILITIES .............................................................................. 58
EVENTS SUBSEQUENT TO REPORTING DATE ...................................................................... 58
PARENT ENTITY DISCLOSURES ......................................................................................... 59
31
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
1.
a.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The financial report covers Cauldron Energy Limited (“Cauldron”) and its controlled entities (“the Group”)
for the year ended 30 June 2021 and was authorised for issue in accordance with a resolution of the
directors on 30 September 2021.
Cauldron is a public listed company, incorporated and domiciled in Australia.
Cauldron is a for-profit entity for the purposes of preparing these financial statements.
The financial report is a general purpose financial report that has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial report has been prepared
on an accruals basis and is based on historical costs, modified, where applicable, by the measurement
at fair value of selected non-current assets, financial assets and financial liabilities.
The financial report is presented in Australian dollars.
b.
Compliance with IFRS
The financial report complies with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
c.
Adoption of New and Revised Accounting Standards
New or amended Accounting Standards and Interpretations adopted
The Group has considered all of the new or amended Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting
period.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the Group for the annual reporting period ended 30
June 2021.
The Company is in the process of determining the impact of the above on its financial statements. The
Company has not elected to early adopt any new Standards or Interpretations.
d.
Principles of Consolidation
(i)
Subsidiaries
Subsidiaries are all entities over which the group has control. The group controls an entity when the
group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to the group. They are deconsolidated
from the date that control ceases. A list of controlled entities is contained in note 21 to the financial
statements.
All inter-group balances and transactions between entities in the Group, including any unrealised profits
or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with those adopted by the Parent Entity.
(ii)
Joint arrangements
Under AASB 11, Joint Arrangements investments in joint arrangements are classified as either joint
operations or joint ventures. The classification depends on the contractual rights and obligations of each
investor, rather than the legal structure of the joint arrangement.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
32
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Joint operations
Cauldron Energy Limited recognises its direct right to the assets, liabilities, revenues and expenses of
joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses.
These have been incorporated in the financial statements under the appropriate headings.
Non-Controlling Interests
The Group recognised non-controlling interests in an acquired entity either at fair value or at the non-
controlling interest’s proportionate share of the acquired entity’s net assets. This decision is made on an
acquisition-by acquisition basis. For the non-controlling interests in the Blackwood Goldfield Project, the
Group elected to recognise the non-controlling interests in at its proportionate share of the net assets
acquired.
Control of Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group and they are deconsolidated
from the date that control ceases.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of profit or loss and other comprehensive income, statement of changes in equity and
statement of financial position respectively.
e.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s companies is measured using the currency of the primary
economic environment in which that company operates. The consolidated financial statements are
presented in Australian dollars which is the parent entity’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the reporting date. Non-monetary items measured at
historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary
items measured at fair value are reported at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of
profit or loss and other comprehensive income, except where deferred in equity as a qualifying cash flow
or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity
to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is
recognised in the statement of profit or loss and other comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the
Group’s presentation currency are translated as follows:
• assets and liabilities are translated at year-end exchange rates prevailing at the end of the reporting
period;
•
•
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s
foreign currency translation reserve in the statement of financial position. These differences are
recognised in the statement of profit or loss and other comprehensive income in the period in which the
operation is disposed.
33
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
f.
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST),
except:
(i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised
as part of the cost of acquisition of an asset or as part of an item of expense; or
(ii)
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows
arising from investing and financing activities which is recoverable from, or payable to, the taxation
authority is classified as operating cash flows.
g.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated
using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting
period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to
(recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of
the profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax
assets also result where amounts have been fully expensed but future tax deductions are available. No
deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted
at the end of the reporting period. Their measurement also reflects the manner in which management
expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the
extent that it is probable that future taxable profit will be available against which the benefits of the
deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and
joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal
of the temporary difference can be controlled and it is not probable that the reversal will occur in the
foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off
exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods
in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Tax consolidation
Cauldron Energy Limited and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under tax consolidation legislation. Each entity in the Group recognises its own
current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’
approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax
losses and tax credits in the subsidiaries are immediately transferred to the head entity. The Group
notified the Australian Taxation Office that it had formed an income tax consolidated group to apply
from 1 July 2009.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
34
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
h.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market
instruments. Cash equivalents are short-term, highly liquid investments that are readily convertible
to known amounts of cash, which are subject to an insignificant risk of changes in value and have an
original maturity of three months or less.
i.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial assets at fair value through profit or loss. Such
assets are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and
the contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being
avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership. When
there is no reasonable expectation of recovering part or all of a financial asset, it’s carrying value is
written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income
are classified as financial assets at fair value through profit or loss. Typically, such financial assets will
be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with
an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
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 Group’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 measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in
profit or loss.
j.
Property, Plant and Equipment
Plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all
or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable
in the future to their present value as at the date of acquisition.
Depreciation is provided on plant and equipment. Depreciation is calculated on a diminishing value basis
so as to write off the net cost or other revalued amount of each asset over its expected useful life to
its estimated residual value. The estimated useful lives, residual values and depreciation method are
reviewed at the end of each annual reporting period.
35
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
The depreciation rates used for each class of depreciable assets for the 30 June 2021 year are:
Class of Fixed Asset
Plant and equipment
Office furniture and equipment
Motor vehicle
Depreciation Rate
33.3%
33.3%
33.3%
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the statement of profit or loss and other comprehensive income.
When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are
transferred to retained earnings.
k.
Exploration and Evaluation Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are expected
to be recouped through the successful development of the area or where activities in the area have not
yet reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in
which the decision to abandon the area is made. When production commences, the accumulated costs
for the relevant area of interest are amortised over the life of the area according to the rate of depletion
of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest.
l.
Impairment of Non-Financial Assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The
value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax
discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not
have independent cash flows are grouped together to form a cash-generating unit.
m.
R&D Tax Incentive
Refundable tax incentives are accounted for as government grants under AASB 120 Accounting for
Government Grants and Disclosure of Government Assistance because the directors consider this policy
to provide more relevant information to meet the economic decision-making needs of users, and to
make the financial statements more reliable. The Group has determined that these incentives are akin
to government grants because they are not conditional upon earning taxable income.
n.
Trade and Other Payables
Trade and other payables represent the liability outstanding at the end of the reporting period for
goods and services received by the Group during the reporting period which remains unpaid. The
balance is recognised as a current liability with the amount being normally paid within 30 days of
recognition of the liability.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
36
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
o.
Leases
At the inception of a contract, the Group assesses if the contract contains or is a lease. If there is a
lease present, a right-of-use-asset and a corresponding liability are recognised by the Group where the
Group is a lessee. However, all contracts that are classified as short-term leases (ie with a remaining
lease term of 12 months or less) and leases of low-value assets are recognised as an operating expense
on a straight line over the term of the lease.
Initially the lease is measured at the present value of the lease payments still to be paid at the
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this
rate cannot be readily determined, the Group uses the incremental borrowing rate.
The right-of-use-assets comprise the initial measurement of the corresponding lease liability, any
lease payments made at or before the commencement date and any indirect costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use-assets are depreciated over the lease term or useful life of the underlying asset, whichever
is the shortest.
o.
Revenue Recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the Group: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the
time value of money; allocates the transaction price to the separate performance obligations on the
basis of the relative stand-alone selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any
other contingent events. Such estimates are determined using either the ‘expected value’ or ‘most
likely amount’ method. The measurement of variable consideration is subject to a constraining principle
whereby revenue will only be recognised to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint
continues until the uncertainty associated with the variable consideration is subsequently resolved.
Amounts received that are subject to the constraining principle are recognised as a refund liability.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
p.
Provisions and Employee Benefits
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measures at the present value of management’s best estimate of the expenditure required
to settle the present obligation at the reporting date. The discount rate used to determine the present
value reflects current assessments of the time value of money and the risks specific to the liability. The
increase in the provision resulting from the passage of time is recognised in finance costs.
37
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result
of exploration activities undertaken, it is probable that an outflow of economic benefits will be required
to settle the obligation, and the amount of the provision can be measured reliably. The estimated future
obligation includes the costs of removing facilities, abandoning sites and restoring the affected areas.
Employee leave benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be
settled wholly within 12 months of the reporting date are recognised in respect of employees’ services
up to the reporting date. They are measured at the amounts expected to be paid when the liabilities
are settled.
q.
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds.
r.
Share based payments
Equity-settled share based payments are measured at fair value at the date of grant. Fair value is
measured by use of the Black-Scholes options pricing model. The expected life used in the model has
been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise
restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on
a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually
vest.
For cash-settled share-based payments, a liability equal to the portion of the goods and services received
is recognised at the current fair value determined at each reporting date.
s.
Critical accounting judgements, estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the
next financial year are discussed below.
Exploration and evaluation costs
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of
interest. These costs are carried forward in respect of an area that has not at balance date reached a
stage which permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves, and active and significant operations in or relating to, the area of interest are continuing.
Asset Acquisition not Constituting a Business
When an asset acquisition does not constitute a business combination, the assets and liabilities
are assigned a carrying amount based on their relative fair values in an asset purchase transaction
and no deferred tax will arise in relation to the acquired assets and assumed liabilities as the
initial recognition exemption for deferred tax under AASB 112 applies. No goodwill will arise on the
acquisition and transaction costs of the acquisition will be included in the capitalised cost of the asset.
Control of Blackwood Goldfield Joint Venture Pty Ltd
The group has determined that it controls Blackwood Goldfield Joint Venture Pty Ltd (“Blackwood”)
as it is exposed to variable returns from its involvement with Blackwood and has the ability to affect
those returns through its power over Blackwood. This is based on both its shareholding of and board
representation in Blackwood.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
38
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or
enacted environmental legislation, and the directors understanding thereof. At the current stage of
the Group’s development and its current environmental impact the directors believe such treatment is
reasonable and appropriate.
Income taxes
The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations.
Significant judgement is required in determining the worldwide provision for income taxes. There are
many transactions and calculations undertaken during the ordinary course of business for which the
ultimate tax determination is uncertain. The Group estimates its tax liabilities based on the Group’s
understanding of the tax laws in the relevant jurisdictions. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such difference will impact the current and
deferred income tax assets and liabilities in the period in which such determination is made.
In addition, the Group has recognised deferred tax assets relating to carried forward tax losses to
the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the
same taxation authority and the same subsidiary against which the unused tax losses can be utilised.
However, utilisation of the tax losses also depends on the ability of the entity to satisfy certain tests at
the time the losses are recouped.
Performance Rights
Performance rights issued to Directors under the Performance Rights Plan are measured by reference
to the fair value of the equity instruments at the date on which they were granted using share price of
the Company on grant date.
Share-based payments recognised may require an estimation of reasonable expectations about
achievement of future vesting conditions. Vesting conditions must be satisfied for the director to become
entitled to receive ordinary shares.
Vesting conditions include services conditions, which require the director to complete a specified period
of service, and performance conditions, which require the specified performance targets to be met.
The Company recognises a share-based payment expense amount for the services received during the
vesting period based on the best available estimate of the number of equity instruments expected to
vest and shall revise that estimate, if necessary, if subsequent information indicates that the number of
equity instruments expected to vest differs from previous estimates. On vesting date, the Company shall
revise the estimate to equal the number of equity instruments that ultimately vested.
The achievement of future vesting conditions is reassessed at each reporting period.
Comparative Figures
Comparative figures have been adjusted to conform to changes in presentation for the current financial
year.
t.
Operating Segments
An operating segment is a component of an entity that engages in business activities from which it
may earn revenues and incur expenses (including revenues and expenses relating to transactions with
other components of the same entity), whose operating results are regularly reviewed by the entity’s
chief operating decision maker to make decisions about resources to be allocated to the segment and
assess their performance and for which discrete financial information is available. This includes start-up
operations which are yet to earn revenues.
Operating segments have been identified based on the information provided to the chief operating
decision makers – being the board of directors.
Information about other business activities and operating segments that do not meet the quantitative
criteria set out in AASB 8 “Operating Segments” are combined and disclosed in a separate category
called “other.”
39
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
u.
Going Concern
The financial report has been prepared on the going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and settlement of liabilities in the normal course
of business.
As at 30 June 2021, the Group had cash and cash equivalents of $375,221 and had net working capital
of $912,974. The Group incurred a loss for the year ended 30 June 2021 of $185,837 (30 June 2020:
$1,634,616 loss) and net cash outflows used in operating activities and investing activities totalling
$1,621,090 (30 June 2020: $834,779).
The ability of this Group to continue as a going concern is dependent on the Group securing additional
debt and/or equity funding to meet its working capital requirements in the next 12 months. These
conditions indicate the existence of a material uncertainty that may cast a significant doubt about the
Group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets
and discharge its liabilities in the normal course of business.
At the date of this report, the directors are satisfied there are reasonable grounds to believe that the
Group will be able to continue its planned operations and the Group will be able to meet its obligations
as and when they fall due, for the following reasons:
•
•
•
the Company has demonstrated its ability to raise funds through equity issues by way of share
capital raising completed in September 2021 - refer Note 29;
the Group holds a portfolio of investments valued at $1,517,787 at 30 June 2021, which may be sold
to fund ongoing cash requirements of the Company; and
the Directors are of the opinion that the use of the going concern basis of accounting is appropriate
as they are confident in the ability of the Group to be successful in securing additional funds through
further debt or equity issues as and when the need to raise working capital arises.
Should the Group not be able to continue as a going concern, it may be required to realise its assets and
discharge its liabilities other than in the ordinary course of business, and at amounts that differ from
those stated in the financial statements. The financial report does not include any adjustments relating
to the recoverability and classification of recorded asset amounts or liabilities that might be necessary
should the Group not continue as a going concern and meet its debts as and when they become due
and payable.
2.
SEGMENT INFORMATION
The Group has identified its operating segments based on the internal reports that are reviewed
and used by the board of directors (chief operating decision makers) in assessing performance and
determining the allocation of resources. During the year, the Group operated in one business segment
(for primary reporting) being mineral exploration and principally in two geographical segments (for
secondary reporting) being Australia and Argentina.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the board of directors as the chief decision maker with
respect to operating segments are determined in accordance with accounting policies that are consistent
to those adopted in the annual financial statements of the Group.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
40
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Inter-segment transactions
Inter-segment loans payable and receivable are initially recognised as the consideration received net of
transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are
not adjusted to fair value based on market interest rates. This policy represents a departure from that
applied to the statutory financial statements.
Segment assets
Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax
assets and intangible assets have not been allocated to operating segments.
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability
and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to
the Group as a whole and are not allocated to specific segments. Segment liabilities include trade and
other payables and certain direct borrowings.
Other items
The following items of revenue, expense, assets and liabilities are not allocated to the Mineral Exploration
segment as they are not considered part of the core operations of that segment:
administration and other operating expenses not directly related to uranium exploration
interest income
interest expense
subscription funds
loans to other entities
financial assets at fair value through profit or loss
Segment Information
Mineral Exploration
Other
Total
2021
2020
2021
2020
2021
2020
$
$
$
$
$
$
Revenue
Interest received
Other
Gain on disposal of financial
assets
Total segment revenue and
other income
Segment net operating profit/
(loss) after tax
Segment net operating profit/
(loss) after tax includes the
following significant items:
Net fair value gain/(loss) on
financial assets
-
-
-
-
-
-
-
-
1
1,419
1
1,419
34,080
59,410
34,080
59,410
58,470
52,014
58,470
52,014
92,551
112,843
92,551
112,843
-
-
1,138,932
(449,691)
1,138,932
(449,691)
41
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
Segment Information
Mineral Exploration
Other
Total
2021
2020
2021
2020
2021
2020
$
$
$
$
$
$
Impairment of loans and
receivables
-
-
(47,087)
(24,708)
(47,087)
(24,708)
Impairment of exploration assets
(357,637)
(216,530)
-
-
(357,637)
(216,530)
Depreciation
Employee benefits expense
Directors fees
Consultancy expenses
Legal fees
-
-
-
-
-
-
-
-
-
-
(2,636)
(4,071)
(2,636)
(4,071)
(384,254)
(374,335)
(384,254)
(374,335)
(170,848)
(147,000)
(170,848)
(147,000)
(106,738)
(253,925)
(106,738)
(253,925)
(230,171)
(23,519)
(230,171)
(23,519)
Tenement expenditure
(285,655)
(93,386)
-
-
(285,655)
(93,386)
Share based payments expense
Other expenses
Total segment net operating
profit /(loss) after tax
Segment assets
Segment assets include:
-
-
-
-
(87,000)
(9,534)
(87,000)
(9,534)
(228,961)
(37,917)
(228,961)
(37,917)
(643,292)
(309,916)
(26,212)
(1,324,670)
(669,504)
(1,634,616)
Exploration assets
2,243,619
-
-
-
2,243,619
-
Financial assets
Other assets
-
-
2,243,619
-
1,517,787
600,146
1,517,787
600,146
-
-
455,483
427,820
455,483
427,820
1,973,270
1,027,966
4,216,889
1,027,966
Segment liabilities
-
- (1,057,985)
(793,267)
(1,057,984)
(793,267)
Segment net assets
2,243,619
-
915,285
234,699
3,158,905
234,699
Segment information by
geographical region
The analysis of the location of net
assets is as follows:
Australia
Argentina
3,162,882
228,893
(3,977)
5,806
3,158,905
234,699
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
42
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.
REVENUE AND OTHER INCOME
(a) Revenue
Interest received
Total revenue
(b) Other income
Gain on disposal of financial assets at fair value through
profit or loss
Other
Total other income
4.
IMPAIRMENT LOSSES
Impairment of exploration and evaluation expenditure
Impairment of loans and receivables
Expected credit loss of loans and other receivables
Total impairment losses
5.
REMUNERATION OF AUDITORS
Paid or payable to BDO (WA) Pty Ltd for:
Audit and review of financial statements
Total auditor’s remuneration
6.
KEY MANAGEMENT PERSONNEL
2021
$
2020
$
1
1
1,419
1,419
58,470
34,080
92,550
357,637
47,087
-
404,724
52,014
59,410
111,424
216,530
-
24,708
241,238
35,923
35,923
32,924
32,924
Names and positions held of key management personnel in office at any time during the 2020/2021 financial
year were:
Name
Simon Youds
Jess Oram
Qiu Derong
Judy Li
Chenchong Zhou
Position
Executive Director and Chairman
Executive Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Refer to the Remuneration Report contained in the Directors’ Report for details of the shares, rights and
options held and remuneration paid or payable to each member of the Group’s key management personnel
for the year ended 30 June 2021.
Refer to Note 27 for share-based payments issued to Directors during the year.
43
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
7.
INCOME TAX
(a)
The components of tax expense comprise:
Current tax (expense)/benefit
Deferred tax (expense)/benefit
Total
(b)
The prima facia tax (benefit)/expense on (loss)/
profit from ordinary activities before income tax is
reconciled to the income tax as follows:
2021
$
2020
$
-
-
-
-
-
-
Accounting (loss)/profit before tax
Total accounting (loss)/profit before tax
(669,504)
(1,634,616)
(669,504)
(1,634,616)
Prima facie income tax (expense)/benefit @ 30.0%
(200,851)
(490,385)
Tax effect of:
Non-deductible expenses
Tax losses utilised
Deductible capitalised exploration costs
Realised capital (gain)/loss on investments
Unrealised capital (gain)/loss on investments
Non-assessable non-exempt foreign related expenditure
Section 40-880 deduction
Losses and other deferred tax balances not recognised during
the period
Aggregate income tax expense
(c)
Recognised deferred tax balances
Deferred tax balances have been recognised in respect of
the following:
Deferred tax assets
Employee entitlements
Other receivables
Other payables
Capital raising costs
Tax losses
Deferred tax assets not recognised
Total deferred tax assets
Deferred tax liabilities
Exploration
Deferred tax liabilities not recognised
Total deferred tax liabilities
Net recognised deferred tax assets/(liabilities)
33,035
(219,989)
(17,541)
(341,680)
1,143
(1,800)
(10,224)
757,907
-
89,821
(64,959)
(15,604)
134,907
24,156
(1,800)
(17,793)
341,656
-
30,336
26,096
126,334
-
27,736
26,096
92,734
1,800
5,295,505
4,564,179
(5,478,271)
(4,712,544)
-
219,989
(219,989)
-
-
-
-
-
-
-
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
44
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8.
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Cash and cash equivalents
Reconciliation to cash flow statement
For the purposes of the cash flow statement, cash and cash
equivalents comprise the following at 30 June:
Cash at bank and in hand
Cash held in trust
2021
$
2020
$
375,221
375,221
396,311
396,311
375,221
396,311
-
-
Cash for reconciliation of cash flow statement
375,221
396,311
9.
TRADE AND OTHER RECEIVABLES
CURRENT
Trade receivables
Prepayments
Allowance for expected credit losses (2020: Provision for impair-
ment of receivables) (a)
159,938
5,000
(86,987)
108,549
5,000
(86,987)
Total current trade and other receivables
77,951
26,562
(a) Provision for non-recovery of trade receivables
Balance at 1 July
Impairment of receivable
Balance at 30 June
Allowance for expected credit losses
(86,987)
-
(86,987)
(82,719)
(4,268)
(86,987)
The Group has recognised a loss of $nil, in profit or loss in respect of the expected credit losses for the year
ended 30 June 2021 for its Trade and Other Receivables (30 June 2020: $4,268).
Credit risk
The Group has no significant concentration of credit risk with respect to any single counterparty or group of
counterparties.
The following table details the Group’s trade and other receivables exposure to credit risk with ageing analysis.
Amounts are considered ‘past due’ when the debt has not been settled, with the terms and conditions agreed
between the Group and the counter party to the transaction. Receivables that are past due are assessed for
impairment is ascertaining solvency of the debtors and are provided for where there are specific circumstances
indicating that the debt may not be fully recoverable by the Group.
Trading terms
Gross amount
Past due and impaired
Within initial trade terms
2021
Trade receivables
159,938
86,987
72,951
2020
Trade receivables
108,549
86,987
21,562
45
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
10.
FINANCIAL ASSETS
Financial assets at fair value through profit or loss (listed invest-
ments)
Financial assets at fair value through profit or loss (unlisted
investments)
Total financial assets
Movements:
Opening balance
Disposal of equity securities
Realised fair value gain/(loss) through profit or loss
Fair value gain/(loss) through profit or loss
Closing balance
2021
$
2020
$
1,512,527
594,886
5,260
5,260
1,517,787
600,146
600,146
1,282,895
(279,761)
(285,072)
58,470
1,138,932
1,517,787
52,014
(449,691)
600,146
Financial assets comprise investments in the ordinary issued capital of various entities. There are no fixed
returns or fixed maturity dates attached to these investments. The fair value of listed investments is calculated
with reference to current market prices at balance date.
11. LOANS RECEIVABLE
Caudillo Resources SA (a)
Allowance for expected credit loss (a)
Total loan receivables
1,406,771
1,406,771
(1,406,771)
(1,406,771)
-
-
a)
The Group’s wholly owned subsidiary Jakaranda Minerals Limited (“Jakaranda”) previously provided a
draw-down facility (“First Loan”) up to $650,000 to Caudillo Resources SA (“Caudillo”), which is included
in this balance. The First Loan and interest (LIBOR + 2%) was required to be repaid in cash by 21
February 2013, or Jakaranda may elect to convert the First Loan into an 80% interest in the issued
capital of Caudillo. At 30 June 2014, this draw-down facility had been utilised. The Group intends
to elect to convert the First Loan into an 80% equity interest in Caudillo, and the execution of this is
currently in the process of being completed.
The Group agreed to provide further draw-down facilities from Jakaranda to Caudillo for $650,000 and
$150,000 respectively (“Second Loan” and “Third Loan”). The Second Loan and Third Loan and interest
(LIBOR + 2%) is repayable, at the election of Caudillo, by way of:
(i)
cash; or
(ii)
subject to Caudillo and Jakaranda obtaining all necessary shareholder and regulatory approvals,
the issue to Jakaranda of fully paid ordinary shares in the capital of Caudillo based on a deemed
issue price per Caudillo share of 100 (Argentinean pesos).
Until such time as the First Loan, Second Loan and Third Loan are repaid or converted to an equity
interest in Caudillo the Group has conservatively provided for the non-recovery of the loans in full. As a
result of this, an impairment expense of Nil (30 June 2019: $Nil) has been recognised in the Statement
of Profit or Loss and Other Comprehensive Income.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
46
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12.
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure
12,406,555
9,588,768
Exploration and evaluation expenditure - provision for impair-
ment
(10,162,935)
(9,588,768)
2021
$
2020
$
Net carrying amount exploration and evaluation
2,243,609
Reconciliation of carrying amounts
Balance at 1 July
-
Acquisition costs capitalised- Blackwood Gold Project (Note 26)
1,590,710
Exploration expenditure capitalised – Blackwood Gold Project
Acquisition costs capitalised- WA Sands Project (Note 26)
Exploration expenditure incurred- Yanrey Uranium Project
Impairment of exploration expenditure - Yanrey Uranium Project
Balance at 30 June
105,706
547,204
357,637
(357,637)
2,243,619
13. PLANT AND EQUIPMENT
At cost
Accumulated depreciation
Net carrying amount exploration and evaluation
Reconciliation of carrying amounts
Balance at 1 July
Additions
Depreciation expense
Balance at 30 June
14. TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Total trade and other payables
Trade payables are non-interest bearing and are normally settled on 30 day terms.
15. PROVISIONS
Current
Employee benefits
Total provisions
101,121
101,121
92,755
92,755
47
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
-
-
-
-
-
216,530
(216,530)
-
40,096
(35,979)
4,947
9,018
-
(4,071)
4,947
36,793
(34,483)
2,311
4,947
-
(2,636)
2,311
157,705
799,158
101,400
599,112
956,863
700,512
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
16.
ISSUED CAPITAL
Share capital
2021
2020
No. Shares
No. Shares
2021
$
2020
$
Ordinary shares fully paid
455,999,512
376,289,835
58,269,504
56,380,921
Opening balance at 1 July
376,289,835
329,289,708
56,380,921
55,675,919
Project Acquisition - Blackwood
Project Acquisition – WA Sands
17,000,000
8,000,000
-
-
527,000
316,000
-
-
Share Placement
51,612,903
47,000,127
1,600,000
705,002
Share Placement – Lead Manager
3,096,774
Share issue costs
-
-
-
96,000
(650,417)
-
-
Closing balance at 30 June
455,999,512
376,289,835
58,269,504
56,380,921
Terms and Conditions
Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to one
vote per share at shareholder meetings. In the event of winding up, ordinary shareholders rank after all other
shareholders and creditors and are fully entitled to any proceeds of liquidation.
Capital risk management
Capital managed by the Board includes shareholder equity, which was $58,269,504 at 30 June 2021 (2020:
$56,380,921). The Group’s objectives when managing capital are to safeguard its ability to continue as a
going concern, so that it may continue to provide returns to shareholders and benefits to other stakeholders.
The Company’s capital includes ordinary share capital and financial liabilities, supported by financial assets.
Due to the nature of the Group’s activities, being mineral exploration, it does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Accordingly, the objective of the Group’s
capital risk management is to balance the current working capital position against the requirements of the
Group to meet exploration programmes and corporate overheads.
17.
RESERVES
Reserves
Share based payment reserve (a)
Foreign currency translation reserve (b)
Total reserves
(a) Share based payment reserve
2021
$
2020
$
6,743,694
5,808,481
(1,614,459)
(1,614,459)
5,129,235
4,194,022
Reserve balance at beginning of year
5,808,481
5,808,481
Performance rights – allocation of value
Options issued to vendor of Blackwood Gold Project (Note 26)
Options issued as part of November 2020 Placement
87,000
284,262
554,417
-
-
-
Reserve balance at end of year
6,743,160
5,808,481
(b) Foreign currency translation reserve
Reserve balance at beginning of year
(1,614,459)
(1,616,482)
Foreign currency exchange differences arising on translation of
foreign operations
-
2,023
Reserve balance at end of year
(1,614,459)
(1,614,459)
Exchange differences relating to the translation from the functional currencies of the Group’s foreign
controlled entities into Australian dollars are recognised directly in the foreign currency translation reserve.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
48
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. OPTIONS OVER UNISSUED SHARES
Unissued ordinary shares of the Company under option at 30 June 2021 were:
Grant date
Expiry date
Exercise price
23 December 2019
31 December 2021
24 March 2020
16 September 2020
16 September 2020
6 November 2020
31 March 2022
16 September 2022
16 September 2023
30 November 2023
(0.03)
(0.03)
(0.03)
(0.05)
(0.05)
Number
6,833,398
16,666,666
10,000,000
6,000,000
43,354,839
82,854,903
No person entitled to exercise the options had or has any right by virtue of the option to participate in any
share issue of the Company or of any other body corporate.
During the financial year and up to and including the date of this report, nil ordinary shares were issued on
the exercise of options.
19.
ACCUMULATED LOSSES
Accumulated Losses
Accumulated losses at 1 July
Net (loss)/profit attributable to members
Balance at 30 June
20. EARNINGS/(LOSS) PER SHARE
2021
$
2020
$
(60,488,528)
(60,349,778)
(60,349,778)
(58,715,162)
(669,504)
(1,634,616)
(61,019,282)
(60,349,778)
(a)
(Loss)/Profit used in calculating (loss)/earnings per
share
Net loss from continuing operations attributable to ordinary
equity holders of the parent
Net loss attributable to ordinary equity holders of the parent for
basic earnings
(669,504)
(1,625,083)
(669,504)
(1,625,083)
(b)
Weighted average number of shares outstanding
during the year used in the calculation of:
No.
No.
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Basic earnings/(loss) per share
Continuing operations
Diluted earnings/(loss) per share
Continuing operations
428,515,023
345,262,377
428,515,023
345,262,377
Cents per share
Cents per share
(0.16)
(0.16)
(0.47)
(0.47)
49
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
21. CONTROLLED ENTITIES
Details of Cauldron Energy Limited’s subsidiaries are:
Name
Country of
Incorporation
Date/
Company of
Incorporation
Shares
Ownership
Interest
Investment
Carrying
Amount
Ronin Energy Ltd
Australia
24 April 2006
Cauldron Minerals Ltd
Jakaranda Minerals Ltd
Raven Minerals Ltd
Cauldron Energy (Bermuda)
Limited
Australia
Australia
Australia
24 April 2006
24 April 2006
24 April 2006
Ord
Ord
Ord
Ord
Bermuda
2 February 2012
Ord
Cauldron Energy (SL) Limited
Sierra Leone
12 March 2012
Blackwood Goldfield Joint Venture
Pty Ltd
Australia
3 April 2020
Anthill Concrete Pty Ltd
Australia
15 April 2021
Ord
Ord
Ord
2021
%
2020
%
2021
$
2020
$
100
100
100
100
100
100
51
100
100
100
100
100
100
100
51
-
5
1
1
5
1
1
2
2
5
1
1
5
1
1
2
-
Total Investment
18
16
22. RELATED PARTY INFORMATION
Balances between the company and its subsidiaries which are related parties of the company, have been
eliminated on consolidation and are not disclosed in this note. Note 21 provides information about the Group’s
structure including the details of the subsidiaries and the percentage held in each subsidiary by the holding
company.
Loans with Related Parties
There were no loans made to Cauldron Energy Limited by directors and entities related to them during the year
ended 30 June 2021 (30 June 2020: nil).
The ultimate parent
The ultimate parent of the Group is Cauldron Energy Limited which is based in and listed in Australia.
Significant shareholders
Qiu Derong holds a significant interest of 12.64% in the issued capital of Cauldron Energy at 30 June 2021 (30
June 2020: 10.43%). Mr Qiu Derong is a director of Cauldron.
Compensation of Key Management Personnel of the Group
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or
payable to each member of the Group’s key management personnel (“KMP”) for the year ended 30 June 2021.
The key management personnel compensation comprised of:
Short term employment benefits
Long term employment benefits
Post-employment benefits
Share-based payments
2021
$
2020
$
456,673
385,388
3,809
20,235
87,001
3,706
20,235
9.534
Total key management personnel remuneration
567,718
418,962
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
50
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. COMMITMENTS
Office Rental Commitments
The Company entered into a lease on 9 March 2020 for office premises located at Unit 47, 1008 Wellington
Street, West Perth, for a term of 2-year period, subject to each party having the right to terminate the lease
at any time prior to the Expiry Date by the giving of 3 months’ notice.
Within one year
Between one and five years
Longer than five years
Total commitments
Exploration Expenditure Commitments
2021
$
2020
$
20,795
-
-
20,795
30,000
20,795
-
50,795
The minimum exploration expenditure commitments inclusive of rents and rates outstanding at 30 June 2021
in relation to the Company’s licenced tenements were as follows:
Within one year
Between one and five years
Longer than five years
Total commitments
597,204
555,340
-
-
-
-
597,204
555,340
24. CASH FLOW INFORMATION
(a)
Reconciliation of cash flows from continuing
operations with profit/(loss) from ordinary
activities after income tax
(Loss)/profit from continuing operations
Non-cash items:
Depreciation
Share based payments
Net fair value loss/(gain) on financial assets
Fair value gain on disposal of shares
Impairment losses
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Increase in trade and other creditors
Increase/(decrease) in provisions
(669,504)
(1,634,616)
2,636
87,000
(1,138,932)
58,470
404,724
(51,389)
92,327
8,366
4,071
9,534
449,691
52,014
241,238
2,543
61,447
23,726
Net cash flows used in operating activities
(1,206,304)
(790,352)
51
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
(b)
Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in
banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and
cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the
related items in the statement of financial position as follows:
Cash at bank and in hand
Cash for reconciliation of cash flow statement
Non-cash investing and financing activities
376,677
376,677
396,311
396,311
Settlement of Blackwood Goldfields asset acquisition
through the issue of shares and options (Note 26)
Settlement of WA Sands asset acquisition through the is-
sue of shares (Note 26)
Share based payments
Total from non-cash investing activities
811,262
316,000
650,417
1,777,679
-
-
-
-
25. FINANCIAL RISK MANAGEMENT
Financial risk management
The Group’s financial instruments consist mainly of deposits with banks, trade and other receivable, loan
receivables, trade and other payables and shares in listed and unlisted companies.
The Group does not speculate in the trading of derivative instruments.
The totals for each category of financial instruments, measured in accordance with AASB 9 are:
Financial assets
Cash and cash equivalents (note 8)
Financial assets at fair value through profit or loss (listed invest-
ments) (note 10)
Financial assets at fair value through profit or loss (unlisted
investments) (note 10)
Trade and other receivables (note 9)
Total Financial Assets
Financial liabilities
Trade and other payables (note 14)
Total financial liabilities
2021
$
2020
$
375,221
1,512,527
5,260
77,951
396,311
594,886
5,260
26,562
1,970,959
1,023,019
956,863
956,863
700,512
700,512
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
52
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Financial risk management policies
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit
rate risk and liquidity risk.
The Group’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 Group. The Group uses 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 aging analysis for credit risk. Risk
management is carried out by the Board and they provide written principles for overall risk management.
Financial risk exposures and management
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and market risk
consisting of interest rate risk, foreign currency risk and equity price risk.
(a)
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange
rate fluctuations arise. Given the few transactions the Board does not consider there to be a need for policies
to hedge against foreign currency risk. The Group’s has no significant exposure to foreign currency risk as at
the reporting date.
(b)
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the
reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed
rate financial instruments. Cash and cash equivalents on deposit at variable rates expose the Group to cash
flow interest rate risk. The Group is exposed to movements in market interest rates on short term deposits.
The policy is to monitor the interest rate yield curve out to 120 days to ensure a balance is maintained between
the liquidity of cash assets and the interest rate return.
The effect on profit/(loss) and equity as a result of changes in the interest rate:
Change in loss:
Increase in interest rate by 200 basis points
Decrease in interest rate by 200 basis points
2021
$
2020
$
7,533
(7,533)
7,926
(7,926)
The above interest rate sensitivity analysis has been performed on the assumption that all other variables
remain unchanged.
(c)
Equity Securities Price risk
The Group is exposed to equity securities price risk. This arises from investments held by the Group and
classified on the statement of financial position as current financial assets at fair value through profit or loss.
The Group is not exposed to commodity price risk.
To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio which
is done in accordance with the limits set by the Group. The majority of the Group’s equity investments are
publicly traded on the ASX.
The table below summarises the impact of increases/decreases of the index on the Group’s post tax profit/
(loss) for the year and on equity. The analysis is based on the assumption that the equity indexes had
increased/decreased by 20% (2020 – 20%) with all other variables held constant and all the Group’s equity
instruments moved according to the historical correlation with the index.
Index
ASX listed
Impact on Post-Tax Profit or (Loss)
2021
$
2020
$
302,505
118,977
53
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
(d)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The Group obtains guarantees where appropriate
to mitigate credit risk.
The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for expected credit loss of those assets, as disclosed in the statement of financial
position and notes to the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions
are considered representative across all customers of the Group based on recent sales experience, historical
collection rates and forward-looking information that is available.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings:
Financial assets
Cash and cash equivalents (note 8)
Trade and other receivables (note 9)
Total Financial Assets
(e)
Liquidity risk
2021
$
2020
$
375,221
77,951
453,172
396,311
26,562
422,873
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and
actual cash flows and matching the maturity profiles of financial assets and liabilities.
Financial instrument composition and maturity analysis
The table below reflects the undiscounted contractual settlement terms for financial instruments of a fixed
period of maturity, as well as management’s expectations of the settlement period for all other financial
instruments.
Maturity analysis
Within 1
Year
$
1 to 5
Years
$
Over 5
Years
$
Total
$
Year ended 30 June 2021
Financial Assets
Cash and cash equivalents (note 8)
Financial assets at fair value through profit or
loss (note 10)
Receivables and loans (note 9 and 11)
Total financial assets
Financial liabilities
Trade and other payables (note 14)
Total financial liabilities
Net maturity
Year ended 30 June 2020
375,221
1,517,787
77,951
1,970,959
956,863
956,863
1,014,096
-
-
-
-
-
-
-
-
-
-
-
-
-
376,677
1,517,787
82,301
1,976,765
915,280
915,280
-
1,061,485
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
54
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Maturity analysis
Within 1
Year
$
1 to 5
Years
$
Over 5
Years
$
Total
$
Financial Assets
Cash and cash equivalents (note 8)
Financial assets at fair value through profit or
loss (note 10)
Receivables and loans (note 9 and 11)
Total financial assets
Financial liabilities
Trade and other payables (note 14)
Total financial liabilities
Net maturity
Fair value estimation
396,311
600,146
26,562
1,023,019
700,512
700,512
322,507
-
-
-
-
-
-
-
-
-
-
-
-
-
-
396,311
600,146
26,562
1,023,019
700,512
700,512
322,507
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for
disclosure purposes. The Directors consider that the carrying amount of financial assets and financial liabilities
recorded in the financial statements approximates their fair values as the carrying value less impairment
provision of trade receivables and payables are assumed to approximate their fair values due to their short-
term nature.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and
classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements.
The fair value hierarchy consists of the following levels:
quoted prices in active markets for identical assets or liabilities (Level 1);
inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(Level 3).
Level 1
Level 2
Level 3
Total
$
$
$
$
Year ended 30 June 2021
Financial Assets:
Financial assets at fair value through profit or
loss (note 10)
1,517,787
-
-
1,517,787
Year ended 30 June 2020
Financial Assets:
Financial assets at fair value through profit or
loss (note 10)
CONTROLLED ENTITIES
600,146
-
-
600,146
55
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
26. ASSET ACQUISITIONS
Blackwood Goldfields Project
During the year the Group completed the acquisition of a 51% controlling interest in the Blackwood Goldfield
Project through the issue of 17,000,000 fully paid ordinary shares, 10,000,000 Class A Unlisted Options plus
6,000,000 Class B Unlisted Options.
The exploration asset acquired is in the exploration phase and this together with the unique nature of the asset
means that the valuation of the asset cannot be reliably estimated and as such, the fair value of the assets
acquired have been measured by reference to the value of the equity instruments granted – refer below. It is
considered that the acquisition of the 51% joint venture interest in the Blackwood Goldfield Project is not a
business combination, but rather an acquisition of assets.
At the date of acquisition, the fair value of the acquisition was assessed as follows:
Net Identifiable Assets Acquired
Exploration asset
Non-controlling equity interest in acquisition
Consideration:
17,000,000 fully paid ordinary shares @ $0.031 each (a)
10,000,000 Class A Unlisted Options @ $0.01772 each (b)
6,000,000 Class B Unlisted Options @ $0.01784 each (b)
$
1,590,710
(779,448)
811,262
527,000
177,195
107,067
811,262
The 17,000,000 fully paid ordinary shares were deemed to have a value of $0.031 based on the market value
at which the Company’s shares traded on the date the conditions precedent relating to the acquisition of the
Blackwood Gold Project were satisfied, being the 31st of August 2020.
(a) The Company adopted the Black-Scholes Option Pricing Methodology to calculate the fair value of the
10,000,000 Class A Unlisted Options and the 6,000,000 Class B Unlisted Options issued to the vendors
of the Blackwood Gold Project.
The volatility was based determined based on the historical volatility. Other inputs were:
Number
Issued
Valuation
Date
Share
Price
Exercise
Price
Time to
Maturity
Annualised
volatility
Risk free
interest
rate
Fair value
per Option
Value
10,000,000
31/08/2020
$0.031
6,000,000
31/08/2020
$0.031
$0.03
$0.05
2 years
3 years
110%
110%
0.26%
1.772 cents
$177,195
0.24%
1.784 cents
$107,067
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
56
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
WA Sands Project
Also during the year the Group completed the acquisition of a 100% interest in four tenements (E08/2328,
E08/2329, E8/2642 and L08/71) that form part of the WA Sands Project through the issue of a total of
8,000,000 fully paid ordinary shares.
The exploration asset acquired is in the exploration phase and this together with the unique nature of the asset
means that the valuation of the asset cannot be reliably estimated and as such, the fair value of the assets
acquired have been measured by reference to the value of the equity instruments granted. It is considered that
the acquisition of the in four tenements that form part of the WA Sands Project is not a business combination,
but rather an acquisition of assets.
At the date of acquisition, the fair value of the acquisition was assessed as follows:
Net Identifiable Assets Acquired
Exploration asset
Consideration:
First Tranche: 4,000,000 fully paid ordinary shares @ $0.040 each (a)
Second Tranche: 4,000,000 fully paid ordinary shares @ $0.039 each (b)
Directly attributable acquisition costs (c)
$
547,204
547,204
160,000
156,000
231,204
547,204
The First Tranche of 4,000,000 fully paid ordinary shares were deemed to have a value of $0.040 based on the
market value at which the Company’s shares traded on the day they were issued – 1 February 2021.
(a) The Second Tranche of 4,000,000 fully paid ordinary shares were deemed to have a value of $0.039
based on the market value at which the Company’s shares traded on the day they were issued – 1 June
2021.
(b) As part of the acquisition, the Company incurred various other costs including legal fees and other
agreement-related costs that were directly attributable to the asset acquisition.
Under the terms of the acquisition agreement, Cauldron will be required to issue a further 12,000,000 fully
paid shares if and when the remaining four tenements (ELA09/1816, MLA09/150, ELA04/2548 and M08/487)
are transferred to the ownership of the Cauldron Energy Limited.
In addition, pursuant to the acquisition agreement, Cauldron is obligated to make production payments of
$250,000 upon the entering into of commercial production on either of ELA09/1816 or MLA09/150, plus
$250,000 upon the entering into of commercial production on ELA04/2548, plus $500,000 upon the entering
into of commercial production on either of E08/2328, E08/2329, E8/2642, M08/487 or L08/71, to be settled
in cash or shares (based on an assumed share price of $0.035) by mutual agreement, plus a royalty equal
to $1.00 per tonne or 2% of sales revenue (calculated based upon FOB prices) where Cauldron elects to
undertake a mining operation as defined in the acquisition Agreement.
Cauldron notes that Mining Lease Application 09/150, is listed as “dead” on the register maintained by the
Department of Mines, Industry Regulation and Safety of Western Australia. The recording of MLA09/150 as
“dead” continues follows a decision in the Western Australian Supreme Court in the case Onslow Resources Ltd
v The Minister for Mines and Petroleum [2020] WASC 310, in which the Justice determined that the application
for ML09/150 was invalid. The decision is the subject of appeal. To manage the risk of a negative decision,
the Company has applied for a duplicate Mining Lease Application 09/180 to counter the risk of loss. This
application has now passed its objection period.
In addition, Cauldron notes that with respect to Mining Lease 08/487, that on 22 January 2021 proceedings
were commenced against Quarry Park Pty Ltd, the Mining Registrar, the WA Minister for Mines and Petroleum
and the Company in relation to the validity of ML08/487, and further, preventing Quarry Park Pty Ltd and
Cauldron from executing or lodging a transfer of ML08/487. This matter is incomplete as at the date of this
report.
Neither MLA09/150 and ML08/487 are considered material to the overall transaction and Cauldron will proceed
with the acquisition of the remaining tenements whether or not each, or both, are ultimately included. In the
event that ML08/487 or MLA09/150 or both are prevented from being transferred to Cauldron, the parties are
agreed that they may consider an adjustment to the consideration (shares, production payments, royalties)
to be paid to the vendors by Cauldron under the acquisition agreement, or a replacement of the respective
tenements.
57
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAULDRON ENERGY LIMITED
27. SHARE BASED PAYMENTS
The fair value of options and performance rights granted to directors and employees is recognised as an
employee expense, with a corresponding increase in equity, over the period that the employee becomes
unconditionally entitled to the rights or options, from the grant date. The amount recognised as an expense is
adjusted to reflect the actual number of share options or performance rights that vest, except for those that
fail to vest due to their conditions not being met.
Options
No options have been granted as part of remuneration arrangements during the year ended 30 June 2021
(2020: Nil).
Performance Rights
The following Performance Rights were issued during the year:
Issue date
Expiry date
Exercise price
16 September 2020
10 August 2025
Nil
Number
9,000,000
The Performance Rights were valued on the date of grant with the following factors and assumptions used to
determine their fair value:
Grant date
Period (years) Share price on
Grant Date
Recognition
Date
Probability
Valuation per
right
11 August 2020
5
$0.029
21 May 2020
100%
$0.029
Vesting Conditions:
a.
b.
c.
The volume weighted average price of the Shares as quoted on ASX exceeds $0.05 each day for a period
of not less than 20 consecutive trading days on which the Shares have actually traded;
Gross Proceeds exceed $250,000 in any financial year; and
The discovery of an “Inferred Mineral resource” (as that term is defined in the Code) at the Blackwood
Gold Project having a contained gold mass of at least 300,000 ounces at a cut-off grade of 2g/t,
(each a Performance Milestone).
Pursuant to AASB 2: Share Based Payments, a share based payments expense has been recognised with
effect from the date the Board of Directors resolved to issue the performance rights (ie 21 May 2020)
notwithstanding that they were subject to shareholder approval and require each director to remain in
service in order to exercise. The effect is to recognise a share based payments expenses in the year ended
30 June 2021 of $87,000 (2020: $9,534).
28. CONTIGENT ASSETS AND LIABILITIES
The Group has no contingent liabilities or assets at 30 June 2021 (30 June 2020: nil).
29. EVENTS SUBSEQUENT TO REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which 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 future financial years, except for the following.
Resignation of Mr Jess Oram as Chief Executive Officer
On 15 July 2021, Mr Jess Oram resigned his full-time position of Chief Executive Officer of the Company but
remains with the Company in the capacity of non-executive director.
September 2021 Placement
On 8 September 2021, Cauldron completed a placement to sophisticated and professional investor clients of
180 Markets Pty Ltd resulting in the issue of 35,294,118 shares at $0.034 (3.4 cents) per share each, raising
a total of $1,200,000 before costs (Placement).
Participants in the Placement also received a free attaching option on a 1 for 2 basis which are exercisable at
$0.05 (5 cents) and which have an expiry of 30 November 2023, resulting in the issue of 17,647,059 unlisted
options.
As Lead Manager to the Placement, 180 Markets Pty Ltd was paid a fee of $72,000, being 6% of the moneys
raised pursuant to the Placement.
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
58
CAULDRON ENERGY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30.
PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Equity
Issued capital
Accumulated loss
Option premium reserve
Total equity
Financial Performance
(Loss)/profit of parent entity
Total comprehensive (loss)/profit of the parent entity
Loans to Controlled Entities
2021
$
2020
$
380,712
3,022,280
3,402,992
416,925
605,093
1,022,018
101,121
1,012,423
788,989
788,989
58,269,504
56,380,921
(62,578,159)
(61,956,372)
6,734,159
2,424,874
5,808,480
233,029
(622,417)
(622,417)
(1,634,16)
(1,634,616)
Loans are provided by the Parent Entity to its controlled entities for their respective operating activities.
Amounts receivable from controlled entities are non-interest bearing with no fixed term of repayment. The
eventual recovery of the loan will be dependent upon the successful commercial application of these projects
or the sale to third parties. Details of loans provided are listed below:
Subsidiaries
Ronin Energy Ltd
Cauldron Minerals Ltd
Jakaranda Minerals Ltd
Raven Minerals Ltd
Anthill Concrete Ltd
2021
$
2020
$
23,329
8,900,347
1,411,055
25,775
7,585
23,329
8,900,347
1,411,055
25,775
-
Total value of loans provided to subsidiaries
10,368,091
10,360,506
Commitments
The commitments of the Parent Entity are consistent with the Group (refer to note 23).
Contingent Liabilities and Assets
The contingent liabilities and assets of the Parent Entity are consistent with those of the Group, refer note
28.
59
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Cauldron Energy Limited, I state that:
1.
In the opinion of the directors:
(a)
the financial statements and notes set out on pages 27 to 59 and the Directors’ Report are in
accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b)
there are reasonable grounds to believe that the Group will be able to pay its debts as and when
they become due and payable.
2. The Directors draw attention to Note 1 to the financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
3. The Directors have been given the declarations by the chief executive officer and chief financial officer
for the year ended 30 June 2021 required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Mr Simon Youds
Chairman
30 September 2021
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
60
CAULDRON ENERGY LIMITED
INDEPENDENT AUDITOR’S REPORT
61
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
INDEPENDENT AUDITOR’S REPORT
CAULDRON ENERGY LIMITED
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
62
CAULDRON ENERGY LIMITED
INDEPENDENT AUDITOR’S REPORT
63
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
INDEPENDENT AUDITOR’S REPORT
CAULDRON ENERGY LIMITED
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
64
CAULDRON ENERGY LIMITED
ADDITIONAL INFORMATION
Additional information required by ASX Listing Rules and not shown elsewhere in the report is set out below.
The information is current as of 15 October 2021.
1.
CORPORATE GOVERNANCE
The Company’s Corporate Governance Statement is available on the corporate governance page on
the Company’s website at www.cauldronenergy.com.au/about-us/corporate-directory-governance.
2.
SHAREHOLDING AS AT 15 OCTOBER 2021
Cumulative number of fully paid ordinary shares on issue
491,293,630
3.
SUBSTANTIAL HOLDERS AS AT 15 OCTOBER 2021
The names of the substantial shareholders listed in the Company’s register as at 15 October 2021 were:
Shareholder
Mr Derong Qiu
Joseph Energy (Hong Kong) Limited
Starry World Investment Ltd
Sky Shiner Investment Ltd
Yidi Tao
Dekang Qiu
Dempsey Resources Pty Ltd
Number of shares held
47,544,710
41,205,500
33,898,318
31,400,000
31,250,000
30,000,000
25,186,036
4.
DISTRIBUTION OF EQUITY SECURITIES AS AT 15 OCTOBER 2021
The distribution of members and their holdings of securities in the Company as at 15 October 2021 were as
follows:
Range
Number of shareholders
Fully Paid Ordinary Shares
1 - 1,000
1001 - 5,000
5001 - 10,000
10,001 - 100,000
100,001 and over
TOTAL
185
395
237
675
335
1,827
81,941
1,029,442
1,903,612
26,603,927
461,674,708
491,293,630
5.
UN-MARKETABLE PARCELS AS AT 15 OCTOBER 2021
As at 15 October 2021, there were 945 holders (each holding 15,625 or less fully paid ordinary shares) or less
than a marketable parcel of ordinary shares, based upon the closing share price on 14 October 2021 of $0.032.
In cumulative, the number of shares held by holders of unmarketable parcels totalled 4,704,320.
65
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
CAULDRON ENERGY LIMITED
ADDITIONAL INFORMATION
6.
UN-QUOTED SECURITIES AS AT 15 OCTOBER 2021
Class
Exercise
Price
Issue
Date
Expiry
Date
No. of
Securities
No. of
Holders
Name (where
holder >20%)
Number held (%)
Options
$0.03
23-Dec-19
31-Dec-21
6,833,395
11
Dugal McDougall
WJ Armstrong S/F Pty
Ltd
1,889,0000 (28%)
1,666,666 (24%)
Options
$0.03
24-Mar-20
31-Mar-22
16,666,666
7
Derong Qui
15,000,000 (90%)
Options
$0.03
16-Sep-20
16-Sep-22
10,000,000
11
Stuart McDougall
2,294,720 (24%)
2,442,152 (24%)
Dugal McDOugall
Options
$0.05
16-Sep-20
16-Sep-23
6,000,000
10
Stuart McDougall
1,205,136 (20%)
Options
$0.05
6-Nov-20,
8-Sep-21
30-Nov-23
61,001,898
10
Rights
$0.00
16-Sep-20
16-Sep-23
9,000,000
5
Simon Youds
Jess Oram
4,000,000 (44%)
2,000,000 (22%)
7.
TWENTY LARGEST SHAREHOLDERS AS AT 15 OCTOBER 2021
The names of the twenty largest holders of ordinary fully paid shares at 15 October 2021 are:
Name
Mr Derong Qiu
Joseph Energy (Hong Kong) Limited
Starry World Investment Ltd
Sky Shiner Investment Ltd
Yidi Tao
Dekang Qiu
Dempsey Resources Pty Ltd
Citicorp Nominees Pty Ltd
Yarri Mining Pty Ltd
BNP Paribas Nominees Pty Ltd
Sufian Ahmad
Doone Lee McDougall
Dugal McDougall
BNP Paribas Nominees Pty Ltd ACF Clearstream
M & K Korkidas Pty Ltd
Capeline Nominees Pty Ltd
CALM Holdings Pty Ltd
Armstrong Constructions (Vic) Pty Ltd
Brian Catherine
Okewood Pty Ltd
Number of ordinary
shares held
% of issued shares
47,544,710
41,205,500
33,898,318
31,400,000
31,250,000
30,000,000
25,186,036
10,708,623
8,000,000
7,119,942
6,430,000
5,367,271
4,323,387
4,270,364
4,250,000
4,172,864
4,000,000
3,333,333
3,331,026
3,300,000
9.68%
8.39%
6.90%
6.39%
6.36%
6.11%
5.13%
2.18%
1.63%
1.45%
1.31%
1.09%
0.88%
0.87%
0.85%
1.11%
0.81%
0.69%
0.68%
0.67%
309,091,374
63.18%
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
66
CAULDRON ENERGY LIMITED
ADDITIONAL INFORMATION
8.
VOTING RIGHTS
Ordinary Shares:
In accordance with the Company’s Constitution, on a show of hands every member present in person or by
proxy or attorney or duly authorised representative has one vote. On a poll every member present in person
or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held.
Options:
Holders of options do not have a right to vote.
9.
RESTRICTED SECURITIES
The Company has no restricted securities on issue.
10.
INTERESTS IN TENEMENTS
TENEMENT REFERENCE
Project & Location
Interest
E08/1489
E08/1490
E08/1493
E08/1501
E08/2017
E08/2081
E08/2205
E08/2385
E08/2386
E08/2387
E08/2774
E08/3088
EL5479
E08/2328
E08/2329
E08/2462
L08/71
393/2010
140/2007
141/2007
142/2007
143/2007
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
BLACKWOOD – VICTORIA
ONSLOW – WESTERN AUSTRALIA
ONSLOW – WESTERN AUSTRALIA
ONSLOW – WESTERN AUSTRALIA
ONSLOW – WESTERN AUSTRALIA
CATAMARCA, ARGENTINA
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
144/2007-581/2009
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
176/1997
232/2007
270/1995
271/1995
43/2007
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
RIO COLORADO PROJECT – CATAMARCA, ARGENTINA
67
Cauldron Energy Limited Annual Report for the year ended June 30, 2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
51%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
CAULDRON ENERGY LIMITED
Environmentally sensitive exploration on our contiguous holding of ~160 km2 covering
much of the historic Blackwood Goldfield in the highly prolific Central Victorian Goldfields
that comprise Ballarat and Bendigo. Our Blackwood Gold Project is a sizeable foothold in
a largely forgotten but historically significant goldfield that has received only sporadic explo-
ration since the 1920’s and which has the potential for significant expansion of known min-
eral resource, fast-tracking of mining production and medium-term generation of cashflow.
CAULDRON ENERGY LIMITED
Cauldron Energy Ltd. (ASX Code: CXU)
Unit 47, Level 1, 1008 Wellington Street
West Perth, Western Australia, 6005
Phone: 08 6270 4693 Fax: 08 6323 3347
email: IR@cauldronenergy.com.au
www.cauldronenergy.com.au
2
Cauldron Energy Limited Annual Report for the year ended June 30, 2021