`
Annual Report
Cazaly Resources Limited
ABN 23 101 049 334
and
Controlled Entities
For the Year Ended
30 June 2022
CONTENTS
Cazaly Resources Limited Annual Report 2022
Corporate Directory
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Shareholder Information
1
2
23
24
25
26
27
28
52
53
58
CORPORATE DIRECTORY
Cazaly Resources Limited Annual Report 2022
CHAIRMAN
Clive Jones
MANAGING DIRECTOR
Tara French
NON-EXECUTIVE DIRECTORS
Terry Gardiner
Jonathan Downes
COMPANY SECRETARY
Mike Robbins
PRINCIPAL & REGISTERED OFFICE
Level 3, 30 Richardson Street
WEST PERTH WA 6005
AUDITORS
Hall Chadwick WA Audit Pty Ltd
283 Rokeby Road
Subiaco WA 6008
SHARE REGISTRAR
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
STOCK EXCHANGE LISTING
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: CAZ
BANKERS
National Australia Bank
100 St Georges Terrace
PERTH WA 6000
1
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Your directors present their report, together with the financial statements of Cazaly Resources Limited (the
Company or Cazaly) and its controlled entities (the Group) for the financial year ended 30 June 2022.
1.
DIRECTORS AND COMPANY SECRETARY
Directors
The following directors have been in office since the start of the financial year to the date of this report
unless otherwise stated:
Tara French – Managing Director (appointed 12 October 2021)
Clive Jones - Chairman
Terry Gardiner – Independent Non-Executive Director
Jonathan Downes – Independent Non-Executive Director (appointed 19 November 2021)
Nathan McMahon – Non-Executive Director (vacated 7 March 2022)
The Board wishes to acknowledge Mr Nathan McMahon, the former joint Managing Director of Cazaly,
who sadly passed away in March 2022. Nathan was a driving force behind Cazaly since its inception and
was highly regarded in the mining and exploration community and his leadership, business acumen and
camaraderie will be sorely missed.
Company Secretary
Mike Robbins
Directors’ Meetings
The number of Directors’ meetings held and conducted during the financial year and the number of
meetings attended by each Director are:
Mr Jones
Ms French
Mr Gardiner
Mr Downes
Mr McMahon
Meetings
No.
Eligible
No.
Attended
6
4
6
3
4
6
4
5
3
0
The Company does not have a formally constituted audit and risk committee or remuneration and
nomination committee as the Board considers that the Company’s size and type of operation do not
warrant the formation of such committees. The Board performs the role of these committees and items
that are usually required to be discussed by these committees are marked as separate Board meeting
agenda items, as and when required.
2.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the financial year was mineral exploration and evaluation
activities as well as seeking out further exploration, acquisition and joint venture opportunities. There were
no significant changes in the nature of the Group’s principal activities during the financial period.
3.
OPERATING RESULTS & FINANCIAL POSITION
The Group’s loss after tax for the year was $1,740,579 (2021: Profit $716,577). The Group’s net assets at the
end of the year are $15,931,190(2021: $17,310,152).
Cash and cash equivalents as at year end were $6,901,309 (2021: $9,593,690).
Exploration expenditure, including tenement acquisitions, totalled $1,754,999 for the year (2021:
1,514,824). The main expenditure was on the Ashburton, Halls Creek, Chibougamau and new project
generation. Exploration expenditure written off for the year was $186,809 (2021: $544,414). The main write
offs related to new project generation costs and expenditures relating to various tenements and/or
applications that were relinquished during the financial year.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Net administration expenses and employee benefits for the year totalled $827,045 (2021: $871,516).
During this next financial year the Group intends to continue to further develop its current core projects
whilst also exploring new key commodity opportunities both in Australia and overseas.
4.
RISKS
The Group actively manages a range of financial and non-financial business risks and uncertainties which
can potentially have a material impact on the Group and its ability to achieve its goals and objectives.
While every effort is made to identify and manage material risks and emerging risks, additional risks not
currently known or detailed below may also adversely affect future performance.
•
Economic
General economic conditions, introduction of tax reform, new legislation, the general level of activity
within the resources industry, investor sentiment, movements in interest and inflation rates, currency
exchange rates and changes in commodity prices may have an adverse effect on the Group’s
exploration, development and possible production activities, as well as on its ability to fund those
activities.
•
Climate Change
The Group recognises that physical and non-physical impacts of climate change may affect assets,
productivity, markets and the community. Risks related to the physical impacts of climate change include
the risks associated with increased severity of extreme weather events and chronic risks resulting from
longer-term changes in climate patterns. Non-physical risks and opportunities arise from a variety of
policy, legal, technological and market responses to the challenges posed by climate change and the
transition to a lower carbon world.
•
Exploration Risk
Mineral exploration and development are high risk undertakings due to the various levels of inherent
uncertainty. There can be no assurance that exploration of the Group’s tenements, or of any other
tenements that may be acquired by the Group in the future, will result in the discovery of economic
mineralisation. Even if economic mineralisation is discovered there is no guarantee that it can be
commercially exploited.
•
Resource Estimates
The Group’s projects may contain JORC Code compliant resources. There is no guarantee that a JORC
Code compliant resource will be discovered on any of the Group’s other tenements. Resource estimates
are expressions of judgement based on knowledge, experience and industry practice. Estimates which
were valid when originally calculated and assessed may alter significantly when new information or
techniques become available. In addition, by their very nature, resource estimates are imprecise and
depend to some extent on interpretations which may prove to be inaccurate. As further information
becomes available through additional fieldwork and analysis the estimates are likely to change.
•
Cultural Heritage and Native Title
The Group must comply with various country specific cultural heritage and native title legislation including
access agreements which require various commitments, such as base studies and compliant survey work,
to be undertaken ahead of the commencement of exploration activities and mining operations.
•
Environmental Risks
The operations and proposed activities of the Group are subject to each project’s jurisdiction, laws and
regulations concerning the environment. As with most exploration projects and mining operations, the
Group’s activities are expected to have an impact on the environment, particularly if advanced
exploration or mine development proceeds. Future legislation and regulations governing exploration,
development and possible production may impose significant environmental and financial obligations
on the Group.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
There can be no assurances that new environmental laws, regulations or stricter enforcement policies,
once implemented, will not oblige the Group to incur significant expenses and undertake significant
investments in such respect which could have a material adverse effect on the Group’s business, financial
condition and results of operations.
•
Sovereign, Political & Title Risk
The Group has overseas interests which are subject to the risks associated with operating in a foreign
country. These risks may include economic, social or political instability or change, hyperinflation,
currency non-convertibility or instability and changes of law affecting foreign ownership, exchange
control, exploration licensing, export duties, investment into a foreign country and repatriation of income
or return of capital, environmental protection, land access and environmental regulation, mine safety,
labour relations as well as government control over petroleum properties or government regulations that
require the employment of local staff or contractors or require other benefits be provided to local
residents.
The Group may also be hindered or prevented from enforcing its rights with respect to government
instrumentalities because of the doctrine of sovereign immunity. Any project interest may be affected by
changing political conditions and changes to laws and/or resource policies.
The commitment by local businesses, government officials and agencies and the judicial system to abide
by legal requirements and negotiated agreements may be more uncertain, creating particular concerns
with respect to licences and agreements for business. These may be susceptible to revision or
cancellation and legal redress may be uncertain or delayed. There can be no assurance that joint
ventures, licences, licence applications or other legal arrangements will not be adversely affected by the
actions of government authorities or others and the effectiveness and enforcement of such arrangements
cannot be assured. Further, there is no guarantee that any applications for tenements will be granted or
granted on conditions satisfactory to the Group.
The Group cannot guarantee that the licences and/or tenements in which it may acquire an interest, if it
completes the acquisition, or any other licences and/or tenements in which it has or may acquire in the
future, will be renewed beyond their current expiry date and there is a material risk that, in the event the
holder of those licences and/or tenements is unable to renew any of them beyond their current expiry
date, all or part of the Group’s interests in the corresponding projects may be relinquished. Further, there
is no guarantee that any applications for mining licences and/or tenements will be granted or granted
on conditions satisfactory to the Group.
5.
REVIEW OF OPERATIONS
PROJECTS
Safety
The Company continued its successful safety track record with no recorded lost time injuries (LTI’s) or
incidents since the 2021 annual report.
Halls Creek (CAZ 100%)
The project is situated 25km southwest of Halls Creek and covers part of the Halls Creek Mobile Zone which
is highly prospective for a range of commodities including copper, gold, and nickel (Figure 1). The project
includes the Mount Angelo North Copper-Zinc deposit, an extensive zone of near surface oxidised Cu-Zn
mineralisation overlying massive Cu-Zn sulphide mineralisation. Previous results from drilling conducted by
Cazaly at Mount Angelo North included 64m @ 2.7% Cu (1.1% Zn), 62m @ 2.4% Cu (2.8% Zn), 37m @ 2.6%
Cu (6.1% Zn), 16m @ 5.9% Cu, 18m @ 2.5% Cu. The Mount Angelo North mineral resource estimate is
reported in accordance with the JORC Code 2012 as 1.72Mt @ 1.4% Cu, 12.3ppm Ag, 1.4% Zn (using 0.4%
Cu lower cut) for 23kt Cu, 680koz Ag and 25kt Zn.
The project area also hosts a large lower grade copper deposit associated with a high level porphyritic
felsic intrusive at the Bommie prospect located 2.5km to the southwest of the Mount Angelo North
Copper-Zinc deposit (Figure 1).
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Figure 1. Location of Halls Creek Copper Project.
The Bommie prospect has a large geochemical footprint with coincident Cu-Mo-Bi that extends for 1.2km
along strike and over 800m across strike (Figure 2). The porphyry system is host to significant copper
mineralisation with previously reported drill intercepts including 170m @ 0.4% Cu, 178m @ 0.3% Cu and
136m @ 0.3% Cu. Higher-grade intercepts within the mineralised intervals include 23m @ 1.0% Cu and 7m
@ 1.3% Cu.
RC Drilling
As announced on 16 August 2022, RC drilling was completed at the Halls Creek Project (Figure 1). A total
of 19 holes were drilled for 4,049m to test the Moses Rock EM conductor and the Bommie Porphyry Copper
System.
Bommie Prospect - porphyry copper target
16 holes were drilled for 3,395m to test the continuity of broad copper intercepts across the Bommie
Prospect on an approximate 100m x 100m grid (Figure 2). The Bommie Prospect is located 2.5km
southwest of Mount Angelo North and is interpreted as a large low grade copper system with significant
drill intercepts as shown in Figure 2. The prospect has an extensive surface geochemical signature which
provides further encouragement for a large mineralised system. All priority drill holes were completed. A
decision to complete the second priority (“P2” – Figure 2) drill holes will be made following the receipt of
all assay results and the estimation of a maiden inferred mineral resource. Sampling techniques and data
collection are detailed in the Cazaly announcement dated 16 August 2022.
Visually estimated sulphide percentages varied in all drill holes from trace levels up to 10%. Geologists
have also identified pyrrhotite, pyrite, chalcopyrite, chalcocite and molybdenite in the RC drill chips
(Figure 3).
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Three RC Drill holes were drilled for 654m to test an EM conductor at the Moses Rock prospect at the
beginning of the drilling campaign with further details reported in Cazaly’s June ’22 Quarterly Activities
Report.
Figure 2. The Bommie porphyry copper prospect showing RC drill collar locations and anomalous copper in soil
results.
Mount Angelo North Resource Update
In June 2021 the Company completed eight (8) RC holes with one (1) diamond tail drillhole (per 31 August
2021 ASX announcement) at the Mount Angelo North Cu-Zn deposit to confirm the continuity of shallow
copper mineralisation and test potential extensions to known sulphide mineralisation along strike and
down dip.
The RC drill results were received during the financial year and confirmed good, consistent high-grade
Cu-Zn mineralisation and marginally extended the known limits of the deposit. The drilling, and recent re-
modelling also highlighted a potential new down plunge position for Zn mineralisation. Maximum single
metre values returned from the drilling included: 37.9% Cu, 4.10% Zn, 1.20% Pb, 63g/t Ag & 1.57g/t Au.
A significant amount of work has been completed to advance our understanding of the Mount Angelo
North deposit. The mineralised envelope was re-modelled based on geological observations and
weathering profiles and confirms the robust nature of the shallow oxide copper mineralisation near
surface, with growth potential down dip and down plunge.
The resource was updated using the newly interpreted mineralisation model and re-estimated to comply
with JORC Code 2012. The Mount Angelo North mineral resource estimate detailed in the table below, is
reported as 1.72Mt @ 1.4% Cu, 12.3ppm Ag, 1.4% Zn (using 0.4% Cu lower cut) for 23kt Cu, 680koz Ag and
25kt Zn.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Table 1: Mineral resource estimate, Mount Angelo North
Figure 3. Bommie Prospect: Drill chips showing albite, chlorite, biotite,
disseminated sulphides and quartz-carbonate veins.
Ashburton Basin Project (CAZ 100%)
Cazaly holds the rights to a major land position covering more than 2,450km2 in the Ashburton Basin, in
the Pilbara region of Western Australia (Figure 4). The project covers major regional structures considered
to be highly prospective for major gold mineralisation and occurs in the region hosting Black Cat
Syndicate’s (ASX:BC8) Paulsen’s gold deposit and Kalamazoo’s (ASX:KZR) Mount Olympus gold deposit.
The Ashburton Basin forms the northern part of the Capricorn Orogen, a ~1000km long, 500km wide region
of variably deformed metamorphosed igneous and sedimentary rocks located between the Yilgarn and
Pilbara cratons.
The Company applied for tenure within the region following the recognition of the presence of major
deeply seated, crustal scale structures with the potential to host significant mineralisation eg. the Baring
Downs Fault (Figure 5). The Baring Down Fault lies centrally within the Ashburton Basin which has previously
had very little modern exploration.
Heritage agreements for the final tenement application in the Ashburton package were finalised and
E08/3262 was granted on the 7 December 2021. The Ashburton tenement package now includes five (5)
leases – E08/3260, 3261, 3262, 3265 and 3272.
7
Mount Angelo North Base Metal DepositINDICATEDTonnesCuAgZnt%ppm%Oxide149,0001.4210.9Transitional158,0001.7161.5Fresh699,0001.7131.8Total1,007,0001.6151.6INFERREDOxide67,5000.990.9Transitional157,0001.270.6Fresh487,0001.0101.4Total712,0001.091.2TOTAL RESOURCEOxide216,0001.2170.9Transitional316,0001.4121.1Fresh1,187,0001.4121.6Total1,718,0001.4121.4 Mineral Resource Estimate (JORC 2012)
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Figure 4. Location of Ashburton Project relative to major gold deposits in the district
On 14 March 2022, the Company provided an exploration update whereby analytical results were
received for 1,211 surface sediment samples collected across the Ashburton Project during November
and December 2021. The regional stream sediment sampling program will provide the first comprehensive
geochemical dataset across the entire Ashburton project area, and has already successfully identified
major regional scale (Figure 6) mineralised structures:
•
•
Two anomalous gold-copper mineralised trends extend over 50km in the northern project
area, and
Strong base metal signatures highlight the prospectivity of regional scale structures in the
southern project area.
Figure 5. Regional geological setting interpreted from a Deep Seismic Traverse (2010), Ashburton Project
(ref: Johnson, SP, Thorne, AM and Tyler, IM (eds) 2011, Capricorn Orogen seismic and magnetotelluric (MT) workshop 2011: extended
abstracts: Geological Survey of Western Australia, Record 2011/25, 120p.)
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
In addition, targeted soil sampling has highlighted the following anomalies:
•
•
•
10km long Au-Cu trend at New Finish prospect;
7km long base metal (Cu-Ag-Pb-Zn) trend at Warden Pool prospect; and
3km long base metal (Cu-Ag-Pb-Zn) trend at Ram Hole Creek prospect.
An Airborne Electromagnetic (AEM) Survey was designed and conducted over three separate target
areas (Figure 6)- the Nanjilgardy fault zone with anomalous historical surface geochemistry on E08/3272,
a broad historical TEMPEST AEM anomaly and coincident gold trend at the New Finish prospect and a
broad historical TEMPEST AEM anomaly on the eastern tenement E08/3262.
Figure 6. The Ashburton Project, spanning 2,450km2 with multiple Mineralised trends >50km long and locations of
VTEM surveys.
The remaining surface stream samples (approximately 500) were collected during July-August 2022. Assay
results are expected to be reported by the end of September.
Vanrock Polymetallic Project (Option to earn in)
The Vanrock project is located in central north Queensland 350km west of Cairns (Figure 7) within the
northern portion of the Townsville-Mornington Island Igneous Belt (TMIB), which extends over 700km from
Townsville to the Gulf of Carpentaria. The project area is located where the TMIB dips undercover, and is
relatively poorly explored, especially when compared to the extensive exploration activities to the
southeast where the TMIB is exposed at surface, this is evidenced by the abundant mineralisation
occurrences within the TMIB to the southeast. The Project is considered to have potential for Andean-type
silver-tin-zinc-copper-lead mineralisation.
Polymetallic discoveries have been made undercover by Gold Aura Ltd, now Crater Gold Mining Ltd
(ASX:CGN), at the A1 & A2 prospects located to the southwest of the project (Figure 8), near Croydon
where massive sulphides were intersected, “widths varying from 2 to 13m downhole containing potentially
economic concentrations of Zn (1.35 to 10.13%), Ag (32.7 to 642g/t), Sn (0.12 to 0.63%) ± Pb (0.25 to 2.1%)
and/or Cu (0.13 to 0.57%)” (*).
(*) ReferCrater Gold Mining Ltd, n.d. Projects Croydon Polymetallic Project, accessed 19 July 2022,
http://www.cratergold.com.au/irm/content/polymetallic-project.aspx?RID=310
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Cazaly has entered into an agreement with Lynd Resources Pty Ltd to acquire a majority stake in the
Vanrock project based upon the terms outlined in the ASX announcement dated 20 July 2022. Cazaly will
fund the drilling of a single diamond drill hole as an Option before electing to progress any further with
the joint venture.
Figure 7. Location of the Vanrock Polymetallic Project within the TMIB NW Queensland.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Figure 8. Location of the Vanrock target on the margin of a
large caldera.
target
is characterised by a
The Vanrock
magnetic high on the margin of a large caldera
≈30km
in diameter (Figure 8). The targeted
Andean-style silver - tin - base metal deposit
model is typically defined by the association of
intrusives and mineralisation that
late stage
displays as discrete magnetic highs located close
to the margins of large caldera complexes. A
single diamond drill hole (Figure 9) is designed to
test this model by drilling the coincident magnetic
and airborne EM anomaly (flown by Geoscience
Australia) located on the edge of a palaeo-
caldera.
Previous drilling by Lynd Resources in the TMIB has
confirmed alteration and mineralisation in the
district akin to the Tier 1 Cerro Rico de Potosi
deposit in Bolivia, one of the world’s largest silver-
tin deposits, which contains 5 billion ounces of
Silver (Ag) and 1.5 million tonnes of Tin (Sn).
The project provides an exciting opportunity for
Cazaly to be a first mover in an underexplored
newly recognised mineral district concealed
beneath surficial cover.
Figure 9. Magnetic susceptibility model showing two discrete moderately dipping units to be tested initially with a
single diamond drill hole to 500m depth.
A heritage survey was conducted on the 24 to 26 August to ensure no heritage places or sites would be
disturbed during future earthworks and drilling activities.
As announced on 7 September 2022, preliminary results were received for an airborne Electromagnetic
(EM) survey completed in early August 2022 across the Vanrock Project using XciteTM, a high-resolution
helicopter borne time domain electromagnetic and magnetic survey system. Eight lines were completed
in total for 40km on a 500m line spacing. 4 lines were completed across the Vanrock target, and 4 lines
were completed across a lookalike target on EPM27085 located 10km to the southeast of the Vanrock
Target (Figure 8).
Diamond drilling commenced early in September and the single diamond drill hole was completed to
521.5m depth (as announced 21 September 2022). Two separate semi-massive sulphidic zones were
intersected from 211.95m to 215.96m and 264.3m to 272.54m down hole. Potassic alteration associated
with the sulphidic zones also occurred sporadically throughout the drill hole. All assays are pending.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Yabby (CAZ 100%)
The Yabby tenements are located 10km to the west of Laverton in the north-eastern goldfields of Western
Australia. The project area covers 16km2 of the highly prospective Laverton Greenstone Belt and has
potential for new gold discoveries. Tenements are positioned directly west of the Chatterbox shear zone
host to several gold mines currently owned by Focus Minerals. In addition, the Lady Julie gold deposit,
located along strike to the south, shows encouraging signs for a newly emerging mining centre with gold
mineralisation extending from surface with recent drill results including 22m @ 4.1 g/t Au from surface, and
16m @ 5.59 g/t Au from 20m (ASX: MAU, Magnetic Resources NL announcement dated 10 January 2022).
In July 2022, Cazaly received analytical results for 246 samples collected during the June ’22 quarter.
Surface samples were collected on a 200m x 50m grid across anomalous gold in lag trends, identified by
the initial 400m x 200m sampling programme completed in the December ’21 quarter.
Several N-S and NNE gold mineralised trends were identified in the first pass reconnaissance surface
samples, and this follow up phase of infill surface sampling has refined these anomalies (Figure 14) to
generate discrete gold anomalies. The orientation of the refined gold mineralised trends is analogous to
the adjacent Chatterbox shear zone host to Apollo, Whisper & Eclipse gold deposits mined by Focus in
the 2010’s. This provides further encouragement that these surface anomalies reflect gold in the bedrock
beneath.
Refer to ASX Announcements dated 28 March 2022 and 25 July 2022 for anomalous assays, sampling
techniques and reporting of results.
Figure 10. Gold mineralised trends interpreted from surface lag samples.
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Cazaly Resources Limited Annual Report 2022
Kaoko Kobalt Project (CAZ 95%)
Cazaly holds a 95% interest in the Kaoko base metal project located in northern Namibia approximately
800km by road from the capital of Windhoek and approximately 750km from the port of Walvis Bay. The
project is situated immediately north of, and abuts, Celsius Resources Limited’s (ASX: CLA) Opuwo Cobalt
project with a current resource of 225Mt @ 0.12% Co & 0.43% Cu (CLA ASX: 16 April & 5 November 2018).
A Lithium in soil anomaly measuring 12km x 10km located in the north-eastern portion of the tenement
requires further investigation. High priority Co-Cu targets will be re-assessed in conjunction with a full
commodity evaluation using all available datasets with a view to advancing the project.
Mount Venn Joint Venture Project (CAZ 20% WML 80%)
The Mt Venn Gold Project is located 125km northeast of Laverton in the North-eastern Goldfields Region
of Western Australia and covers approximately 400km2 of prospective greenstone sequence. The project
area lies within the Mount Venn-Yamarna-Dorothy Hills greenstone belt which is the most easterly major
N-S striking greenstone belt of the Yilgarn Craton (Figure 11).
The belt is considered highly prospective for gold and nickel and is positioned along the western limb of
the Yamarna Greenstone Belt that hosts Gold Road’s and Gold Fields’ 6Moz Gruyere Gold Mine. Together
the Yilgarn greenstone belts account for 30% of the world’s gold reserves, most of Australia’s nickel
production and other base metal and rare earth deposits.
The project is subject to an unincorporated Joint Venture between the operators Woomera Mining
Limited (Woomera, ASX:WML) (80%) and Cazaly (20%). Cazaly is free carried to PFS stage.
Figure 11. Location of Mount Venn Project, showing Mt Cumming and Mt Cornell Ni-Cu-PGE
prospects, the focus of exploration activities during the June ’22 quarter.
The Mt Cornell prospect is interpreted to be hosted by a +5km long, Ni-Cu-PGE prospective,
mafic/ultramafic intrusion. Woomera previously defined two high priority EM targets immediately east of
the Mt Cornell prospect and these will be tested once the underlying tenement application has been
granted.
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Cazaly Resources Limited Annual Report 2022
Mt Cumming is located at the northern end of the Mount Venn Greenstone Belt and is prospective for Ni-
Cu-PGE. Three mafic-ultramafic sills are identified within the Mt Cumming Mafic Complex, namely the Mt
Warren Sill, Mt Cornell Sill and the Mt Cumming Sill. Previous surveys identified eight EM conductors at Mt
Cumming that have a number of coincident rock chip and/or soil anomalies.
During the December ’21 quarter semi-massive to massive sulphides were intersected at Mt Cornell in RC
drill holes MVRC063, 064 and 065 confirming conductors at EM#6 and EM#7 represent a sulphidic source.
Assay results confirmed Ni-Cu mineralization with anomalous intercepts including: MVRC063 2m at 0.24%
Ni from 46m. MVRC064 22m at 0.19% Ni & 0.28% Cu from 28m, including 3m at 0.79% Ni plus 2m at 1.31%
Cu. MVRC065 5m at 0.31% Ni & 0.65% Cu from 94m, including 1m at 0.71% Ni plus 1m at 1.68% Cu (Figure
13). These results are highly encouraging indicating the ultramafic complex is fertile and could potentially
host economic Ni-Cu-PGE mineralization.
Ten RC drill holes (MVRC066-MVRC075) were completed for 1,708m in May to test for thicker, high-grade
extensions to the mineralisation intersected during the December ’21 quarter including a potentially
500m-long mineralised strike between RC holes testing #EM6 and #EM7 (Figure 12).
Figure 12. Drilling completed at Mount Cornell, testing the potential of EM conductors.
Results have been received for drill holes MVRC070 and MVRC071. Hole MVRC071 intersected 25m of
disseminated sulphide mineralization located 100m south of MVRC065, with assays confirming a wide zone
of anomalous copper and nickel mineralization with 25m @ 0.13% Ni, 0.25% Cu from 52m downhole.
Analytical results are pending for the remaining drill holes. For further details refer to WML: ASX
announcements:
•
•
•
1 April 2022
21 April 2002
18 July 2022
Exploration programs set to commence
Drilling update – Mt Venn
Exploration programs update
McKenzie Springs Joint Venture (CAZ 30% FIN 70%)
Sammy Resources Pty Ltd (a wholly owned subsidiary of Cazaly) is in joint venture with Fin Resources Ltd
(ASX:FIN) over exploration licence E80/4808, the McKenzie Springs Project, located in the Kimberley region
of Western Australia. The project lies south along strike from the Savannah nickel mine owned by
Panoramic Resources Ltd and is prospective for intrusive - hosted nickel copper mineralisation.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Other Projects and Royalties
Mineral Resources Limited (ASX:MIN) continued production at the Parker Range mine and has reduced
the hauling distance from the mine by 60km. Cazaly retains a royalty of $0.50/tonne of iron ore produced
from Parker Range after the first 10 million tonnes of production.
The Hamersley Iron Ore Project was an unincorporated Joint Venture between Lockett Fe Pty Ltd
(“Lockett”) (100% owned subsidiary of the Company) and Pathfinder Resources Ltd (ASX:PF1). During
August 2021 the project was sold to Equinox Resources Limited (ASX:EQN) who successfully completed a
$9 million initial public offering under its Prospectus dated 31 August 2021 and subsequently listed on ASX
on 13 October 2021. Lockett received 15,000,000 EQN shares and 2,850,000 performance shares, plus the
Company also retains a royalty interest on the project.
Equinox Resources Limited continues to advance feasibility studies to progress the development planning
at the Hamersley Iron Ore Project where the Company retains a 15.7% equity interest in EQN and a royalty
interest of US$0.30/tonne produced from the project. The project is located in the heart of the world-
renowned Pilbara iron ore district and currently has a total Mineral Resource estimate of 343.2 Mt at 54.5%
Fe (per Pathfinder (formerly Winmar) Resources Ltd ASX announcement dated 24 January 2020).
CORPORATE
As announced on 19 November 2021, the Company appointed Mr Jonathan Downes as a new
independent Non-Executive Director, whilst Mr Nathan McMahon vacated his role as Non-Executive
Director on 7 March 2022.
After a long and successful history with Cazaly, the Board welcomed the appointment of Mr Clive Jones
into the role of Chairman.
Cazaly continues to monitor the COVID-19 situation closely and provides updates to staff as appropriate
and is managing the situation in a balanced, calm and measured way.
Options and Performance Rights
On 2 December 2021, the Company’s Managing Director, Ms Tara French, was issued a total of 5 million
performance rights and 5 million unquoted options as approved by shareholders on 19 November 2021.
Details are as follows:
Performance Rights
(i) 2,000,000 Performance Rights - vested upon issue;
(ii) 1,500,000 Performance Rights – vesting on 12 October 2022; and
(iii) 1,500,000 Performance Rights – vesting on 12 October 2023.
The expiry date of all the performance rights is 11 October 2025.
Unquoted Options
(i) 2,000,000 Options exercisable at $0.067 on or before 19 November 2023;
(ii) 1,500,000 Options exercisable at 150% of the 5-day VWAP prior to vesting date (12 October 2022)
exercisable on or before 12 October 2024; and
(iii) 1,500,000 Options exercisable at 150% of the 5-day VWAP prior to vesting date (12 October 2023)
exercisable on or before 12 October 2025.
6.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The Group will continue its mineral exploration activity on and around its exploration projects with the aim
of identifying commercial mineral resources. The Group also continues to assess other potential project
opportunities that will add value to its portfolio.
15
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
7.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the financial year.
8.
AFTER BALANCE DATE EVENTS
On 20 July 2022, the Company announced that it had entered into an agreement with Lynd Resources
Pty Ltd, to secure an option, to earn into the North Queensland polymetallic Vanrock project (refer to
announcement for relevant terms and conditions of the earn-in).
Apart from the above, the Directors are not aware of any matters or circumstances at the date of the
report, other than those referred to in this report or the financial statements or notes thereto, that has
significantly affected or may significantly affect the operations, the results of operations or the state of
affairs of the Group in subsequent financial years.
9.
INFORMATION ON DIRECTORS
Clive Jones
Chairman
Experience
Mr Jones has been involved in mineral exploration for over 30 years and has
sound experience in a range of commodities including gold, base metals,
mineral sands, iron ore, uranium and industrial minerals both in Australia and
overseas. Mr Jones is a founding Director of Cazaly Resources Ltd and has
proven corporate and exploration success. He is also a Director of Bannerman
Energy Limited which is listed on the ASX and on the Namibian Stock Exchange.
Equity Holdings
22,829,904 fully paid ordinary shares
4,000,000 options exercisable at $0.0495 expiring 19 November 2022
Listed Directorships
Current
Bannerman Energy Ltd
Last three years
Corazon Mining Ltd (resigned 29 November 2019)
Tara French
Managing Director
Experience
Equity Holdings
Ms French is a geologist with 25 years mining and exploration experience,
predominantly in Western Australia and before joining Cazaly, led a large team
as General Manager of Exploration for Regis Resources Limited where she was
employed for 14 years and played a key role in the transition and growth of
Regis over that time. Ms French has experience in project evaluation, resource
estimation, open cut, and underground mining across multiple commodities
including, gold, nickel, and copper. She also holds an honours degree in
Economic Metalliferous Geology and is a Member of the Australian Institute of
Geoscientists.
1,000,000 fully paid ordinary shares
5,000,000 performance rights (2m performance rights vested on issue, 1.5m
performance rights will vest on 12 October 2022 and 1.5m performance rights
will vest on 12 October 2023)
2,000,000 options exercisable at $0.067 expiring 19 November 2023
1,500,000 options exercisable at 150% VWAP expiring 12 October 2024 (vest 12
October 2022)
1,500,000 options exercisable at 150% VWAP expiring 12 October 2025 (vest 12
October 2023)
Listed Directorships
Current
Lefroy Exploration Ltd (from July 2022)
16
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Terry Gardiner
Independent Non-Executive Director
Experience
Mr Gardiner has been involved in capital markets, corporate advising,
stockbroking & derivatives trading for over 20 years. For the past twelve years
Mr Gardiner has been an Executive Director of boutique broker Barclay Wells
Ltd. He is also Chairman of Charger Metals NL and holds other directorships
with various ASX listed and unlisted public companies.
Equity Holdings
9,467,893 fully paid ordinary shares
2,000,000 options exercisable at $0.0495 expiring 19 November 2022
Listed Directorships
Current
Galan Lithium Limited (from December 2013)
Roto-Gro International Limited (from July 2019)
Charger Metals NL (from July 2021)(Chairman)
Jonathan Downes
Independent Non-Executive Director
Experience
Mr Downes, BSc (GeoPhys) MAIG, has over 30 years’ experience in the mineral
and energy sectors and specialises in project identification and development
and has worked in various geological and corporate capacities. Jonathan has
experience with nickel, gold and base metals and electrical energy solutions.
He has been involved with numerous private and public capital raisings and
was a founding director of Moly Mines Ltd, Ironbark Zinc Limited and Siberia
Mining Corporation Ltd. Mr Downes is currently the Managing Director of Kaiser
Reef Limited and on the boards of Kingswest Resources Limited, Nickel X Limited
and Corazon Mining Limited.
Equity Holdings
200,100 fully paid ordinary shares
Listed Directorships
Current
Kaiser Reef Limited
Kingswest Resources Limited
Nickel X Limited
Corazon Mining Limited
Last three years
Galena Mining Limited (resigned October 2021)
Ironbark Zinc Limited (resigned December 2019)
Mike Robbins - Company Secretary
Mr Robbins has over 25 years resource industry experience gathered at both operational and corporate
levels, both within Australia and overseas. During that time, he has held numerous project and head office
roles and is also the Company Secretary for Galan Lithium Limited.
10.
ENVIRONMENTAL
The Group has a policy of complying with or exceeding its environmental performance obligations. The
Board believes that the Group has adequate systems in place for the management of its environmental
requirements. The Group aims to ensure the appropriate standard of environmental care is achieved,
and in doing so, that it is aware of and is in compliance with all environmental legislation. The Directors
are not aware of any breach of environmental legislation for the financial year under review.
11.
REMUNERATION REPORT - AUDITED
This report details the nature and amount of remuneration for each director of the Company.
Remuneration Policy
The remuneration policy of Cazaly has been designed to align Director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component which is assessed on
an annual basis in line with market rates and Group performance. The further tailoring of goals between
shareholders and the Directors and executives is achieved through the issue of equity to the directors and
executives to encourage the alignment of personal and shareholder interest.
17
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
The Cazaly Board believes the current remuneration policy is appropriate and effective in its ability to
attract and retain high quality personnel in order to achieve its strategic objectives and create value for
shareholders.
The Group is exploration and development focussed, and therefore speculative in terms of performance.
Consistent with attracting and retaining talented people, the Directors and executives are paid market
rates associated with individuals in similar positions, within the same industry. Where necessary,
independent advice is obtained to confirm that executive remuneration is in line with market practice
and is reasonable in the context of Australian executive reward practices.
All remuneration paid to Directors and executives is valued at the cost to the Company and expensed
or carried forward on the balance sheet for any time that is attributable to exploration and evaluation.
Any awarded options are valued using the Black-Scholes methodology.
Fees and payments to non-executive directors reflect the demands which are made on, and the
responsibilities of, the directors. Non-executive directors receive a fixed fee for time, commitment and
responsibilities and may be paid remuneration as the directors determine where the director performs
services outside the scope of the ordinary duties of the director. Non-executive directors may also be
paid expenses properly incurred in attending meetings or otherwise in connection with the Company’s
business.
The Company’s constitution provides that the non-executive directors, as a whole, may be paid or
provided fees or other remuneration for their services as a director of the Company. 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. Fees for non-executive Directors are not linked to the
performance of the Company. However, to align Directors’ interests with shareholder interests, all
Directors are encouraged to hold shares in the company.
Employment Details
All Directors have engagement contracts in place.
Mr Clive Jones is currently the Chairman of the Company and is engaged as an executive on a part-time
basis. His annual remuneration is split between a monthly consulting fee of $7,500 per month and an
annual salary component of $60,000 plus statutory superannuation.
Ms Tara French is the Company’s Managing Director and is on an annual salary of $280,000 (plus statutory
superannuation). Should Ms French or the Company wish to terminate her contract, either Ms French or
the Company are required to give written notice of at least three (3) months before the effective date
of termination.
Mr Terry Gardiner and Mr Jonathan Downes, are Non-Executive Directors who are employed by the
Company on an annual salary of $50,000 (plus statutory superannuation).
Under his engagement offer, Mr Downes is entitled to be issued 2m Cazaly options. The options will be
exercisable at a price that is 150% of the volume weighted average price for Shares traded on the ASX
over the five (5) Trading Days immediately preceding the date of issue and will be exercisable on the
date that is three (3) years from date of issue. Any issue of options to Mr Downes will require prior
shareholder approval.
The employment contracts stipulate a range of resignation notice periods. Termination payments are not
payable under the circumstances of unsatisfactory performance.
Voting and comments made at the Company’s 2021 Annual General Meeting
The adoption of the Remuneration Report for the financial year ended 30 June 2021 was put to the
shareholders of the Company at the Annual General Meeting held 19 November 2021. The Company
received 99.9% of the vote, of those shareholders who exercised their right to vote, in favour of the
remuneration report for the 2021 financial year. The resolution was passed without amendment by a poll
and on proxy vote. The Company did not receive any specific feedback at the AGM or throughout the
year on its remuneration practices.
18
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Details of Remuneration for Years Ended 30 June 2022 & 30 June 2021
The remuneration for key management personnel of the company during the year was as follows:
Short-term Benefits
Post
Employment
Benefits
Other
Long-term
Benefits
Share based
Payment
Total
Performance
Related
Cash, salary
Cash
Non-cash
Other
Super
Other
Equity Options &
& bonuses
profit
Benefit
Rights (ii)
share
$
$
Tara French – Managing Director (i)
2022
2021
271,720
-
-
-
$
-
-
$
-
-
$
27,172
-
Clive Jones – Chairman and Executive Director (iii)
2022
2021
194,238
222,512
-
-
-
-
-
-
6,000
5,412
$
-
-
-
-
Nathan McMahon – Non-Executive Director (iv) (vacated 7 March 2022)
2022
2021
-
193,240
-
-
-
-
Terry Gardiner – Non-Executive Director
2022
2021
50,000
50,000
-
-
-
-
-
-
-
-
-
-
5,000
4,750
-
-
-
-
Jonathan Downes – Non-Executive Director (appointed 19 November 2021)
2022
2021
30,833
-
Total Remuneration
2022
2021
546,791
465,752
-
-
-
-
-
-
-
-
-
-
-
-
3,083
-
41,255
10,162
-
-
-
-
$
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
307,617 606,509
50.7%
-
-
-
-
-
-
-
-
-
-
200,238
227,924
-
193,240
55,000
54,750
33,916
-
-
-
-
-
-
-
-
-
-
307,617 895,663
34.3%
-
475,914
-
i) Ms Tara French commenced as CEO of Cazaly on 12 July 2021 and was appointed to the Board on 12 October
2021. Aggregate short-term benefits of $271,720 have been paid since Ms French’s commencement date.
ii) Share-based payments for the issue of 5m performance rights ($230,000) and 5m options ($77,617), included in Ms
French’s employment conditions, have been fully expensed in FY 2022. The issue of the performance rights and
options was approved by shareholders on 19 November 2021.
iii) Aggregate short-term benefits of $194,238 (2020: $222,512) were paid or were due and payable to Clive Jones or
Widerange Corporation Pty Ltd, a company controlled by Mr Clive Jones, for the provision of corporate and
technical management services to the Company. This amount includes a salary of $60,000.
iv) Aggregate short-term benefits of $Nil (2021: $193,240) were paid to Kingsreef Pty Ltd, a company controlled by Mr
Nathan McMahon, for the provision of corporate management services to the Company. Mr McMahon reverted
to a Non-Executive Director from 1 June 2021 and vacated his position on 7 March 2022.
Related Party Information
The Company received a total of $113,950 (2020: $96,500) under an Office Services Agreement with
Galan Lithium Ltd. Galan Lithium Ltd is considered by the Company to be a related Party, as a Galan
Non-Executive Director, Mr Terry Gardiner, is also a director of Cazaly Resources Ltd.
The Company paid $57,480 (2020: $79,620) for the provision of Company Secretarial services to Galan
Lithium Ltd. Galan Lithium Ltd is considered by the Company to be a related Party, as a Galan Non-
Executive Director, Mr Terry Gardiner, is also a director of Cazaly Resources Ltd.
19
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Key Management Personnel (KMP) Equity Holdings
Shares
30 June 2022
C. Jones
T. French (i)
T. Gardiner
J. Downes (ii)
N. McMahon (iii)
30 June 2021
C. Jones
T. French (i)
T. Gardiner
J. Downes (ii)
N. McMahon
Options
30 June 2022
C. Jones
T. French (i)
T. Gardiner
J. Downes (ii)
N. McMahon (iii)
Balance
01-07-21
Granted as
Remuneration
Options
Exercised
Net Change
Other
20,829,904
-
7,750,000
-
40,238,258
68,818,162
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
1,000,000
1,717,147
200,100
(40,238,258)
(35,321,011)
Balance
01-07-20
Granted as
Remuneration
Options
Exercised
Net Change
Other
18,329,904
-
5,421,500
-
35,363,256
59,114,660
-
-
-
-
-
-
2,500,000
-
2,000,000
-
2,500,000
7,000,000
-
-
328,500
-
2,375,002
2,703,482
Balance
30-06-22
22,829,904
1,000,000
9,467,147
200,100
-
33,497,151
Balance
30-06-21
20,829,904
-
7,750,000
-
40,238,258
68,818,162
Balance
01-07-21
Issued
Acquired
(iv)
Exercised
Lapsed/
Other
Balance
30-06-22
Vested
during
the year
Vested
and
exercisable
4,000,000
-
-
5,000,000
2,000,000
-
4,000,000
-
-
-
10,000,000
5,000,000
-
-
-
-
-
-
-
-
-
-
(4,000,000)
4,000,000
-
4,000,000
5,000,000
2,000,000
2,000,000
2,000,000
-
-
-
-
-
2,000,000
-
-
(4,000,000)
11,000,000
2,000,000
8,000,000
30 June 2021
Balance
01-07-20
Issued
Acquired
Exercised
Lapsed/
Other
Balance
30-06-21
Vested
during the
year
Vested
and
exercisable
C. Jones
T. French (i)
6,500,000
-
T. Gardiner (v)
4,000,000
J. Downes (ii)
-
N. McMahon
6,500,000
17,000,000
-
-
-
-
-
-
2,500,000
-
2,000,000
-
2,500,000
7,000,000
-
-
-
-
-
-
4,000,000
-
2,000,000
-
4,000,000
10,000,000
-
-
-
-
-
-
4,000,000
-
2,000,000
-
4,000,000
10,000,000
(i)
Ms French appointed Managing Director on 12 October 2021.
(ii)
Mr Downes appointed a Non-Executive Director on 19 November 2021.
Mr McMahon held 40,238,258 shares and 4,000,000 options on his vacation date (7 March 2022).
(iii)
(iv) Ms French issued with a total of 5m options as approved by shareholders on 19 November 2021.
2,000,000 options are exercisable at $0.067 on or before 19 November 2023 (Fair value per option
$0.0122), 1,500,000 options are exercisable at 150% of the 5-day VWAP prior to vesting date (12 October
2022) exercisable on or before 12 October 2024 (Fair value per option $0.01706) and 1,500,000 options
are exercisable at 150% of the 5-day VWAP prior to vesting date (12 October 2023) exercisable on or
before 12 October 2025 (Fair value per option $0.01855).
Exercised options include 1,500,000 Director options exercisable at $0.039 on or before 26 November
2020 and 500,000 options exercisable at $0.029 on or before 31 March 2021 that were issued under a
placement.
(v)
20
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
Performance Rights
i)
ii)
iii)
2,000,000 Performance Rights - vested upon issue;
1,500,000 Performance Rights – vest on 12 October 2022; and
1,500,000 Performance Rights - vest on 12 October 2023
The performance rights expire on 11 October 2025 and were issued to Ms Tara French as approved by
shareholders on 19 November 2021 (also refer note 14).
End of Remuneration Report (Audited).
12.
INDEMNIFYING OFFICERS OR DIRECTORS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every
Director and Officer, or agent of the Company shall be indemnified out of the property of the Company
against any liability incurred by them in their capacity as an Officer or agent of the Company or any
related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending
any proceedings, whether civil or criminal. No indemnification has been paid with respect to the
Company’s auditor.
The Company has insurance policies in place for all Directors and Officers.
13. OPTIONS
Options forfeited or cancelled
During, or since the end of the financial year, no options were forfeited or cancelled.
Options Expired or Lapsed
During, or since the end of the financial year, no options have expired or lapsed.
Options on Issue
At the date of this report the Company had the following options on issue:
Expiry Date
19/11/2022
8/3/2024
11/6/24
19/11/23
12/10/24
12/10/25
Exercise Price
Options on Issue
$0.0495
$0.0500
$0.0660
$0.0670
(i)
(ii)
10,000,000
2,000,000
500,000
2,000,000
1,500,000
1,500,000
(i)
Vest 12 October 2022. Exercisable at 150% of the VWAP for CAZ shares traded on the ASX over the 5 trading
days immediately preceding the vesting date.
(ii) Vest 12 October 2023. Exercisable at 150% of the VWAP for CAZ shares traded on the ASX over the 5 trading
days immediately preceding the vesting date.
Option holders do not have any rights to participate in any issue of shares or other interests in the
Company or any other entity.
14.
PROCEEDINGS ON BEHALF OF GROUP
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group
for all or any part of those proceedings. The Group was not a party to any such proceedings during the
year.
21
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2022
15. AUDITORS INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2022 has been received and
can be found on page 23.
16. NON-AUDIT SERVICES
The Board of Directors is satisfied that the provision of non-audit services performed during the year by the
Group’s auditors is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. No other fees were paid or payable to the auditors for non-audit services
performed during the year ended 30 June 2022.
This report of the Directors, incorporating the Remuneration Report, is signed in accordance with a
resolution of the Board of Directors.
Tara French
Managing Director
21 September 2022
Competent Persons Statement
This information that relates to exploration targets, exploration results, resource reporting and drilling data of Cazaly
operated projects is based on information compiled by Ms Tara French and Mr Don Horn who are Members of The
Australasian Institute of Mining and Metallurgy and/or The Australian Institute of Geoscientists and are employees of
the Company. Ms French and Mr Horn have sufficient experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Persons
as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Ms French and Mr Horn consent to the inclusion in their names in the matters based on their information in
the form and context in which it appears.
22
To the Board of Directors
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001
As lead audit Director for the audit of the financial statements of Cazaly Resources Limited for the financial
year ended 30 June 2022, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• any applicable code of professional conduct in relation to the audit.
Yours Faithfully
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated this 21st day of September 2022
Perth, Western Australia
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For Year Ended 30 June 2022
Note
2
2
3
3
6
Revenue from continuing operations
Gain/(Loss) on sale of financials assets
Gain on sale of tenement
Revaluation of financial assets
Other Income
Employee benefits
Finance Costs
Depreciation
Administrative expenses
Compliance and regulatory expenses
Occupancy expenses
Written-off exploration expenditure
Equity based payments
Impairment of financial assets
Profit/(loss) before income tax
Income tax (expense)/ benefit
Profit/(loss) for the year from continuing operations
Other comprehensive income
Total comprehensive income/(loss) for the year
Earnings/(loss) for the year attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive income/(loss) attributable to:
Members of the parent entity
Non-controlling interest
Earnings/(loss) per share from continuing and
discontinuing operations
Basic weighted average earnings/(loss) per share
Diluted weighted average earnings/(loss) per share
18
18
2022
$
220,820
325,618
1,472,892
-
61,580
(529,844)
(7,746)
(82,703)
(297,200)
(259,544)
(81,630)
(186,809)
(307,617)
(2,068,396)
(1,740,579)
-
(1,740,579)
-
(1,740,579)
(1,740,524)
(55)
(1,740,579)
(1,740,524)
(55)
(1,740,579)
Cents
(0.48)
(0.48)
The accompanying notes form part of these financial statements.
2021
$
205,305
996,942
60,000
1,296,883
60,401
(545,131)
(11,890)
(77,898)
(326,385)
(258,074)
(76,537)
(543,522)
(63,517)
-
716,577
-
716,577
-
716,577
716,761
(184)
716,577
716,761
(184)
716,577
Cents
0.19
0.19
24
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
As at 30 June 2022
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Financial assets
Property, plant and equipment
Exploration and evaluation assets
Rights of use assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Lease liability
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Note
2022
$
2021
$
7
8
8
9
10
11
27
12
13
27
6,901,309
63,979
9,593,690
133,893
6,965,288
9,727,583
49,679
3,882,311
30,750
5,335,775
81,502
49,679
2,491,151
23,505
5,294,691
151,367
9,380,017
8,010,393
16,345,305
17,737,976
201,651
123,750
81,662
144,562
120,831
109,855
407,063
375,248
Lease liability
27
7,052
52,576
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Controlling entity interest
Non-controlling interest
TOTAL EQUITY
7,052
414,115
52,576
427,824
15,931,190
17,310,152
14
15
16
26,674,021
729,858
(11,457,063)
15,946,816
(15,626)
26,620,021
422,241
(9,716,539)
17,325,723
(15,571)
15,931,190
17,310,152
The accompanying notes form part of these financial statements.
25
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the year ended 30 June 2021
Issued Capital (Accumulated
Losses)
Option
Reserve
$
$
$
Non-
Controlling
Interest
$
Total
$
Balance at 30 June 2020
25,852,471
(10,433,300)
358,724
(15,387)
15,762,508
Earnings/(loss) for the year
Other comprehensive
income for the year
Total comprehensive
income/(loss) for the year
Transactions with owners, in
their capacity as owners, and
other transfers:
Shares issued
Issue costs
Options issued
Options expired
Option reserve
Balance at 30 June 2021
Earnings/(loss) for the year
Other comprehensive
income for the year
Total comprehensive
income/(loss) for the year
Transactions with owners, in
their capacity as owners, and
other transfers:
Shares issued
Issue costs
Options issued
Options expired
Option reserve
Balance at 30 June 2022
-
-
-
716,761
-
716,761
-
-
-
(184)
716,577
-
(184)
-
716,577
767,550
-
-
-
-
26,620,021
-
-
-
-
-
(9,716,539)
-
-
-
(1,740,524)
-
(1,740,524)
54,000
-
-
-
-
26,674,021
-
-
-
-
-
(11,457,063)
-
-
-
-
63,517
422,241
-
-
-
-
-
-
-
307,617
729,858
-
-
-
-
-
(15,571)
767,550
-
-
-
63,517
17,310,152
(55)
(1,740,579)
-
(55)
-
(1,740,579)
-
-
-
-
-
(15,626)
54,000
-
-
-
307,617
15,931,190
The accompanying notes form part of these financial statements.
26
CONSOLIDATED CASH FLOW
STATEMENT
For the year ended 30 June 2022
Cash Flows from Operating Activities
Receipts from services agreements
Cash received from government grant
Payments to suppliers and employees
Interest received and bill discounts received
Note
2022
$
2021
$
263,611
-
(1,111,038)
27,124
152,300
50,000
(1,223,565)
53,444
Net cash used in operating activities
19
(820,305)
(967,821)
Cash Flows From Investing Activities
Purchase of property, plant & equipment
Purchase of equity investments
Payments for exploration and evaluation
Payments for purchase of exploration assets
Proceeds from sale of equity investments
Proceeds from sale of exploration assets (net of
transaction costs)
Proceeds from term deposit bond
(23,508)
(960,156)
(1,392,878)
(321,754)
826,218
-
-
(34,869)
(892,132)
(1,318,832)
(335,000)
2,209,232
60,000
20,000
Net cash used in investing activities
(1,872,078)
(291,601)
Cash Flows from Financing Activities
Proceeds from issue of share
Proceeds from conversion of options
Net cash provided by financing activities
-
-
-
-
767,550
767,550
Net increase/(decrease) in cash held
(2,692,381)
(491,872)
Cash and cash equivalents at beginning of the
financial year
9,593,690
10,085,562
Cash and cash equivalents at end of the financial
year
7
6,901,309
9,593,690
The accompanying notes form part of these financial statements.
27
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements and notes represent those of Cazaly Resources Limited (the
Company or Cazaly) and its controlled entities (the Group). Cazaly Resources Limited is a listed public
company, incorporated and domiciled in Australia.
The financial statements were authorised for issue on 30 September 2022 by the Directors of the Company.
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The Group
is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
Standards, Australian Accounting
Australian Accounting Standards set out in accounting policies that the AASB has concluded would result in
financial statements containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also
comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies
adopted in the preparation of these financial statements are presented below and have been consistently
applied unless otherwise stated.
These financial statements have been prepared on an accruals basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets
and financial liabilities.
Going Concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of
business.
(a)
Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
the Company at the end of the reporting period. A controlled entity is any entity over which the Company
has the power to govern the financial and operating policies so as to obtain benefits from the entity’s
activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more
than half of the voting power of an entity. In assessing the power to govern, the existence and effect of
holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial performance of those
entities are included only for the period of the year that they were controlled. A list of controlled entities, as
at 30 June 2022 is contained in Note xx to the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between
entities in the Group have been eliminated on consolidation. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with those adopted by the Company.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent,
are shown separately within the Equity section of the consolidated Statement of Financial Position and
Statement of Profit or Loss and other Comprehensive Income. The non-controlling interest in the net assets
comprises their interests at the date of the original business combination and their share of changes in equity
since that date.
(b)
Plant and Equipment
Plant and equipment are stated at cost less accumulated depreciation and impairment. The carrying
amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected
net cash flows that will be received from the asset’s employment and subsequent disposal. The expected
net cash flows have been discounted to their present values in determining recoverable amounts.
28
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(c)
Depreciation
Depreciation is provided on plant and equipment. Depreciation is calculated on a straight-line basis so as to
write off the net cost or other revalued amount of each asset over its expected useful life to its estimated
residual value.
The depreciation rates used for each class of depreciable assets are plant and equipment (40%), office
furniture and equipment (18%) and motor vehicles (22.5%).
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period. The value for office furniture and equipment was written down to nil at 30 June 2022.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
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 reserve relating to that asset are transferred to retained
earnings.
(d)
Exploration, Evaluation and Development Expenditure
Costs incurred during exploration and evaluations relating to an area of interest are accumulated. Costs are
carried forward to the extent they are expected to be recouped through successful development, or by
sale, or where exploration and evaluation activities have not yet reached a stage to allow a reasonable
assessment regarding the existence of economically recoverable reserves. In these instances the entity must
have rights of tenure to the area of interest and must be continuing to undertake exploration operations in
the area.
Accumulated costs carried forward in respect of an area of interest that is abandoned 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 will be 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
capitalise costs in relation to that area of interest.
Costs of site restoration are provided over the life of the project from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses
of the mining permits. Such costs have been estimated of future costs, current legal requirements and
technology on an undiscounted basis.
(e)
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset,
but not the legal ownership, are transferred to entities in the consolidated group are classified as finance
leases. Finance leases are capitalised by recording an asset and a liability equal to the present value of the
minimum lease payments, including any guaranteed residual values. Leased assets are depreciated on a
straight-line basis over the shorter of their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are incurred.
29
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(f)
Financial Instruments
Financial Assets
Initial Recognition and Measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash
flow characteristics and the Group’s business model for managing them. With the exception of trade
receivables that do not contain a significant financing component or for which the Group has applied the
practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it
needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal
amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order
to generate cash flows. The business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the
date that the Group commits to purchase or sell the asset.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required
to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the
purpose of selling or repurchasing in the near term.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair
value with net changes in fair value recognised in the statement of profit or loss.
This category includes listed equity investments which the Group had not irrevocably elected to classify at
fair value through OCI. Dividends on listed equity investments are also recognised as other income in the
statement of profit or loss when the right of payment has been established.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
• The rights to receive cash flows from the asset have expired; or
• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a ‘pass-through’
arrangement; and
either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has
neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control
of the asset.
The Group considers a financial asset in default when contractual payments are 90 days past due. However,
in certain cases, the Group may also consider a financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive outstanding contractual amounts in full before
taking into account any credit enhancements held by the Group. A financial asset is written off when there
is no reasonable expectation of recovering the contractual cash flows
30
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
Financial Liabilities
Initial Recognition and Measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables as appropriate.
All financial liabilities are recognised at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables.
(g)
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks and other short-term
highly liquid investments with maturity dates of three to six months or less.
(h)
Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice
amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when
there is objective evidence that the entity will not be able to collect the debts. Bad debts are written off
when identified.
(i)
Revenue and Other Income
Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is
recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.
All revenue is stated net of the amount of goods and services tax (GST).
(j)
Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may
be impaired. The assessment will include the consideration of external and internal sources of information
including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of
pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing
the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in
use, to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is
recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with
another standard (eg in accordance with the revaluation model in AASB 116). Any impairment loss of a
revalued asset is treated as a revaluation decrease in accordance with that other standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Impairment testing is performed
annually for goodwill and intangible assets with indefinite lives.
(k)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office (“ATO”). In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables
and payables in the statement of financial position are shown inclusive of GST. The net amount of GST
recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial
position.
Cash flows are included in the cash flow statement on a gross basis. The GST components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, the ATO are
classified as operating cash flows.
31
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(l)
Taxation
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 reporting date. 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
reporting date. 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.
Cazaly and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under
tax consolidation legislation.
(m)
Trade and Other Payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and
services provided to the company prior to the end of the financial year that are unpaid and arise when the
company becomes obliged to make future payments in respect of the purchase of these goods and
services.
(n)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
32
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.
Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows.
(o)
Share Based Payments
The Group operates equity-settled share-based payment employee share and option schemes. The fair
value of the equity to which employees become entitled is measured at grant date and recognised as an
expense over the vesting period, with a corresponding increase to an equity account. Share-based
payments to non-employees are measured at the fair value of goods or services received or the fair value
of the equity instruments issued, if it is determined the fair value of the good or services cannot be reliably
measured and are recorded at the date the goods or services are received. The corresponding amount is
shown in the option reserve.
The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using
a Black–Scholes pricing model which incorporates all market vesting conditions. The number of shares and
options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount
recognised for services received as consideration for the equity instruments granted shall be based on the
number of equity instruments that eventually vest.
(p)
Issued Capital
Issued and paid-up capital is recognised at the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction
of the share proceeds received.
(q)
Earnings Per Share
Basic earnings per share is calculated as net earnings attributable to members, adjusted to exclude costs of
servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for a bonus element.
Diluted earnings per share is calculated as net earnings attributable to members, adjusted for costs of
servicing equity (other than dividends) and preference share dividends; the after tax effect of dividends and
interest associated with dilutive potential ordinary shares that would have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution
of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive
potential ordinary shares, adjusted for any bonus element.
(r)
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees
to the end of the reporting period. Employee benefits that are expected to be settled within one year have
been measured at the amounts expected to be paid when the liability is settled.
(s)
Interest in Joint Operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require unanimous consent of the parties sharing control.
When a Group entity undertakes its activities under joint operations, the Group as a joint operator recognises
in relation to its interest in a joint operation:
•
•
•
•
•
its assets, including its share of any assets held jointly;
its liabilities, including its share of any liabilities incurred jointly;
its revenue from the sale of its share of the output arising from the joint operation;
its share of the revenue from the sale of the output by the joint operation; and
its expenses, including its share of any expenses incurred jointly.
33
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation
in accordance with the AASBs applicable to the particular assets, liabilities, revenues and expenses.
When a Group entity transacts with a joint operation in which a Group entity is a joint operator (such as a
sale or contribution of assets), the Group is considered to be conducting the transaction with the other parties
to the joint operation, and gains and losses resulting from the transactions are recognised in the Group's
consolidated financial statements only to the extent of other parties' interests in the joint operation.
When a Group entity transacts with a joint operation in which a Group entity is a joint operator (such as a
purchase of assets), the Group does not recognise its share of the gains and losses until it resells those assets
to a third party.
(t)
Critical Accounting Estimates and Judgements
The preparation of financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised and in any future periods affected.
The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the group.
Key Judgements –Exploration and evaluation expenditure
Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current.
These costs are carried forward in respect of an area that has not at balance sheet date reached a stage
that permits reasonable assessment of the existence of economically recoverable reserves, refer to the
accounting policy stated in note 1(d).
Key Judgements - Share based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined by an internal
valuation using a Black-Scholes option pricing model.
Key Judgments – 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
company’s development and its current environmental impact the directors believe such treatment is
reasonable and appropriate.
Key Estimate – Taxation
Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on the
best estimates of directors. These estimates take into account both the financial performance and position
of the company as they pertain to current income taxation legislation, and the directors understanding
thereof. No adjustment has been made for pending or future taxation legislation. The current income tax
position represents that directors’ best estimate, pending an assessment by the Australian Taxation Office.
(u)
Fair value measurements
The Group measures and recognises the asset, ‘Financial assets held for trading’ at fair value on a recurring
basis after initial recognition.
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
34
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(i) Fair Value Hierarchy
AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair value
hierarchy, which categorises fair value measurements into one of three possible levels based on the
lowest level that an input that is significant to the measurement can be categorised into as follows:
Level 1
Measurements based on
quoted prices (unadjusted) in
active markets for identical
assets or liabilities that the entity
can access at the
measurement date.
Level 2
Measurements based on inputs
other than quoted prices
included in Level 1 that are
observable for the asset or
liability, either directly or indirectly.
Level 3
Measurements based on
unobservable inputs for the asset
or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or
more valuation techniques. These valuation techniques maximise, to the extent possible, the use of
observable market data. If all significant inputs required to measure fair value are observable, the asset or
liability is included in Level 2. If one or more significant inputs are not based on observable market data, the
asset or liability is included in Level 3.
(ii) Valuation techniques
The Company selects a valuation technique that is appropriate in the circumstances and for which sufficient
data is available to measure fair value. The availability of sufficient and relevant data primarily depends on
the specific characteristics of the asset or liability being measured. The valuation technique selected by the
Company is the Market approach whereby valuation techniques use prices and other relevant information
generated by market transactions for identical or similar assets or liabilities.
When selecting a valuation technique, the Company gives priority to those techniques that maximise the
use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using
market data (such as publicly available information on actual transactions) and reflect the assumptions that
buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas
inputs for which market data is not available and therefore are developed using the best information
available about such assumptions are considered unobservable.
The following table provides the fair values of the Company’s assets and liabilities measured and recognised
on a recurring basis after initial recognition and their categorisation within the fair value hierarchy:
Recurring fair value measurements
Note
Level 1
$
Financial assets at fair value through
profit or loss:
30 June 2022
Level 2
$
Level 3
$
Total
$
-
-
Australian listed shares at fair value
3,882,311
unlisted Australian shares
-
3,882,311
-
-
-
Recurring fair value measurements
Note
Financial assets at fair value through
profit or loss:
30 June 2021
Level 1
$
Level 2
$
Level 3
$
-
-
Australian listed shares at fair value
2,491,151
unlisted Australian shares
-
2,491,151
-
-
-
-
-
-
-
-
-
3,882,311
-
3,882,311
Total
$
2,491,151
-
2,491,151
35
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(v) Revenue Recognition
Grant revenue
Government grants are recognised where there is reasonable assurance that the grant will be received and
all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as
income on a systematic basis over the periods that the related costs, for which it is intended to compensate,
are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the
expected useful life of the related asset.
When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal
amounts and released to profit or loss over the expected useful life of the asset, based on the pattern of
consumption of the benefits of the underlying asset by equal annual instalments.
Operating revenue
Revenue from the rendering of services is recognised upon the delivery of the service to the customer.
Interest revenue
Interest revenue is recognised using the effective interest rate method.
(w) Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets.
i)
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-
of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right-of-use
assets (office premises) are depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets. This is 3 years.
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the
exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment.
ii)
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
(including in substance fixed payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be exercised by the
Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising
the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised
as expenses (unless they are incurred to produce inventories) in the period in which the event or condition
that triggers the payment occurs.
36
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After
the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate used to determine such lease payments) or a change
in the assessment of an option to purchase the underlying asset.
The Group’s lease liabilities are included in Interest-bearing loans and borrowings, refer note 27.
iii)
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and
do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to
leases of office equipment that are considered to be low value. Lease payments on short-term leases and
leases of low value assets are recognised as expense on a straight-line basis over the lease term.
Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of
an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over
the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of
the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents
are recognised as revenue in the period in which they are earned.
(x) New, revised or amending accounting standards and interpretations adopted
Adoption of new and revised Accounting Standards
The Group has adopted all new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board that are relevant to its operations and effective for an accounting period that
begins on or after 1 January 2021.
Standards and Interpretations in issue not yet adopted
The Group has reviewed the new and revised Standards and Interpretations on issue not yet adopted for the
year ended 30 June 2022. As a result of this review the Group has determined that there is no material impact
of the Standards and Interpretations in issue not yet adopted on the Company and, therefore, no change is
necessary to Group accounting policies.
37
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
2.
2.
REVENUE & OTHER INCOME
Revenue from Continuing Operations
-
-
interest received
recoupment of office costs on-charged
Other Income
-
-
government grant received
other
3.
PROFIT/(LOSS) FOR THE YEAR
2022
$
2021
$
27,123
193,697
220,820
-
61,580
61,580
53,005
152,300
205,305
50,000
10,401
60,401
Profit/(loss) before income tax from continuing operations includes the following specific expenses:
Expenses
Administrative expenses
Consulting
Advertising, printing and stationery
Travel and accommodation
Memberships
Insurance
Other
Compliance and regulatory expenses
ASX, ASIC, registry and secretarial
Legal
Employee Benefits
Superannuation
4.
KEY MANAGEMENT PERSONNEL
Interests of Key Management Personnel
55,618
19,219
17,066
14,595
32,596
158,107
297,201
146,689
112,755
259,444
153,313
14,459
3,522
-
28,970
126,121
326,385
202,920
55,155
258,075
90,640
43,145
Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or
payable to each member of the Company’s key management personnel for the year ended 30 June 2022.
The totals of remuneration paid to key management personnel of the Company during the year are as
follows:
Short-term employee benefits
Post-employment benefits
Termination benefits
Other long-term benefits
Share based payments
A total of $355,302 (2020: $216,364) was capitalised to exploration expenditure.
546,791
41,255
-
-
307,617
895,663
465,752
10,162
-
-
-
475,914
38
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
4.
KEY MANAGEMENT PERSONNEL (Cont’d)
Related Party Information
The Company received a total of $113,950 (2020: $96,500) under an Office Services Agreement with Galan
Lithium Ltd. Galan Lithium Ltd is considered by the Company to be a related Party, as a Galan Non-Executive
Director, Mr Terry Gardiner, is also a director of Cazaly Resources Ltd.
The Company paid $57,480 (2020: $79,620) for the provision of Company Secretarial services to Galan Lithium
Ltd. Galan Lithium Ltd is considered by the Company to be a related Party, as a Galan Non-Executive
Director, Mr Terry Gardiner, is also a director of Cazaly Resources Ltd.
5.
AUDITORS REMUNERATION
Remuneration of the auditor for:
- Auditing or reviewing the financial report
6.
INCOME TAX EXPENSE
The components of the tax expense/(income) comprise:
Current tax
Deferred tax
2022
$
2021
$
25,290
25,290
17,540
17,540
-
-
-
-
-
-
(a)
The prima facie tax on profits/(losses) from ordinary activities
before income tax is reconciled to the income tax as follows:
Profit/(loss) from continuing operations
(1,740,579)
716,577
Prima facie tax benefit on loss from ordinary activities before
income tax at 25.0% (2021 26.0%)
(435,145)
186,310
Add/(subtract):
Tax effect of:
Non-assessable income
Other non-allowable items
Effect of tax losses derecognised
Derecognition of previously recognised tax losses
Recognition of previously unrecognised prior year tax losses
Utilisation of previously unrecognised capital losses
Tax benefit of deductible equity raising costs
Movement in unrecognised temporary differences
Income tax expense (benefit) attributable to entity
(b)
Recognised deferred tax assets at 25.0% (2021: 25.0%)
comprise the following:
Carry forward revenue losses
Capital raising and future black hole deductions
Provisions and accruals
Other
Less: Set off of deferred tax liabilities
-
81,424
69
367,550
(231,738)
-
(2,250)
220,090
-
661,937
26,296
187,942
55,366
931,541
(931,541)
-
(13,000)
17,682
73,838
-
-
(107,441)
(3,826)
(153,544)
-
1,058,126
40,093
126,489
60,688
1,285,396
(1,285,396)
-
39
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
Recognised deferred tax assets at 25.0% (2021: 25.0%)
comprise the following:
Exploration expenditure
Other
Less: Set off of deferred tax asset
(c)
Deferred tax recognised directly in equity:
Relating to equity raising costs
Unrecognised deferred tax assets at 25.0% (2021: 25.0%)
(d)
comprise the following:
Deferred tax assets have not been recognized in respect to
the following as they are not considered to have met the
recognition criteria:
2022
$
2021
$
(931,541)
-
(931,541)
931,541
-
(960,489)
(325,547)
(1,285,396)
1,285,396
-
-
-
-
-
Deductible temporary differences
Tax revenue losses
Tax capital losses
222,340
1,838,887
-
2,061,227
4,500
1,681,119
-
1,685,619
The corporate tax rates on both recognised and unrecognised deferred tax assets and deferred tax liabilities
have been calculated with respect to the tax rate that is expected to apply in the year the deferred tax
asset is realised or the liability is settled.
7.
CASH AND CASH EQUIVALENTS
Cash at bank
Petty cash
8.
TRADE AND OTHER RECEIVABLES
Current
Other receivables
6,901,109
200
6,901,309
9,593,490
200
9,593,690
63,978
63,978
133,893
133,893
Other receivables normally have 30-60 day terms. At 30 June 2022, $36,916 (2021: $36,916) is receivable from
companies related to the Directors.
Non-Current
Bonds
Bonds are term deposits, held by way of bank guarantee.
9.
FINANCIAL ASSETS
Current
Financial assets, at fair value through profit or loss:
Australian listed shares at fair value
Unlisted Australian public company shares
49,679
49,679
49,679
49,679
3,882,311
-
3,882,311
2,491,151
-
2,491,151
40
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
10.
PROPERTY, PLANT AND EQUIPMENT
Plant and Equipment
At cost
Accumulated depreciation
Office Furniture and Equipment
At cost
Accumulated depreciation
Motor Vehicle
At cost
Accumulated depreciation
2022
$
2021
$
366,356
(339,095)
27,261
346,273
(327,266)
19,007
43,638
(43,638)
-
65,878
(62,389)
3,489
30,750
43,638
(43,638)
-
65,878
(61,380)
4,498
23,505
Movement in the carrying amounts for each class of property, plant and equipment between the beginning
and end of the current financial year.
Balance at the beginning of the year
Additions
Disposals/write offs
Depreciation expense
Carrying amount at the end of the year
Balance at the beginning of the year
Additions
Disposals/write offs
Depreciation expense
Carrying amount at the end of the year
Plant and
Equipment
$
19,007
20,083
-
(11,829)
27,261
Plant and
Equipment
$
9,478
16,263
-
(6,734)
19,007
2022
Office
Furniture
$
-
-
-
-
-
2021
Office
Furniture
$
-
-
-
-
-
Motor
Vehicles
$
4,498
-
-
(1,009)
3,489
Motor
Vehicles
$
5,798
-
-
(1,300)
4,498
Total
$
23,505
20,083
-
(12,838)
30,750
Total
$
15,276
16,263
-
(8,034)
23,505
41
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
11.
EXPLORATION AND EVALUATION ASSETS
Non-Current
Costs carried forward in respect of areas of interest in:
2022
$
2021
$
Exploration and evaluation phases at cost
5,335,775
5,294,691
Movement – exploration and evaluation
Brought forward
Exploration expenditure capitalised during the year
Acquisitions
Exploration expenditure capitalised on tenements sold during the
year
Capitalised expenditure on tenements sold
Exploration expenditure written off
5,294,691
1,372,400
375,750
6,861
(1,527,108)
(186,809)
4,324,283
1,179,824
335,000
-
-
(544,416)
5,335,775
5,294,691
Exploration expenditure, including tenement acquisitions, totalled $1,755,011 for the year (2021: 1,514,824).
The main expenditure was on the Ashburton, Halls Creek, Chibougamau and new project generation.
Exploration expenditure written off for the year was $186,809 (2021: $544,414). The main write offs related to
new project generation costs and expenditures relating to various tenements and/or applications that were
relinquished during the financial year.
The value of the Group’s interest in exploration expenditure is dependent upon:
-
-
-
the continuance of the Group’s rights to tenure of the areas of interest;
the results of future exploration; and
the recoupment of costs through successful development and exploitation of the areas of interest, or
alternatively, by their sale.
12.
TRADE AND OTHER PAYABLES
Current
Trade creditors
Other creditors and accrued expenses
Creditors are non-interest bearing and settled on 30-45 day terms.
13.
PROVISIONS
Current
Provision for annual leave
Provision for long service leave
27,116
174,535
201,651
119,476
25,086
144,562
62,229
61,521
123,750
62,631
58,200
120,831
42
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
14.
ISSUED CAPITAL
370,821,793 fully paid ordinary shares (2021: 369,563,267)
with no par value
26,674,021
26,620,021
2022
$
2021
$
Share Movements
30 June
2022
Number
30 June
2022
$
30 June
2021
Number
30 June
2021
$
Balance at the beginning of the year
Issue of shares at $0.029 each
Issue of shares at $0.039 each
Issue of shares at $0.039 each
Issue of shares at $0.043 each
Balance at the end of the year
(i)
(ii)
(iii)
(iv)
369,563,267
-
-
-
1,258,526
370,821,793
26,620,021
-
-
-
54,000
26,674,021
346,113,267
14,700,000
6,500,000
2,250,000
-
369,563,267
25,852,471
426,300
253,500
87,750
-
26,620,021
(i)
(ii)
(iii)
(iv)
Shares issued on 22 July 2020 (200,000), 19 August 2020 (5,630,000), 5 March 2021 (500,000), 15 March 2021
(1,100,000), 19 March 2021 (1,520,000), 26 March 2021 (2,300,000) and 1 April 2021 (3,450,000) for the conversion of
$0.029 options. Approved by shareholders on 6 June 2019.
Shares issued 19 November 2020 on the conversion of $0.039 options by Directors. Approved by shareholders on 26
November 2018.
Shares issued on 25 November 2020 on the conversion of $0.039 options by employees.
Shares issued to Exiro Minerals Corp as part of the terms and conditions of an agreement (value CDN$50,000).
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to
the number of shares held and in proportion to the amount paid up on the shares held. At shareholders
meetings each ordinary share is entitled to one vote in proportion to the paid-up amount of the share when
a poll is called, otherwise each shareholder has one vote on a show of hands.
Option Movements
Exercise Period
On or before 19/11/22 (i)
On or before 8/3/24 (ii)
On or before 11/6/24 (ii)
On or before 19/11/23 (iii)
On or before 12/10/24
On or before 12/10/25
Exercise
Price
Number on
issue at 30
June 2021
Issued
during the
year
Exercised/
Expired/
Cancelled
Number on
issue at 30
June 2022
$0.0495
$0.05
$0.066
$0.067
(iv)
(v)
10,000,000
2,000,000
500,000
-
-
-
12,500,000
-
-
-
2,000,000
1,500,000
1,500,000
5,000,000
-
-
-
-
-
-
-
10,000,000
2,000,000
500,000
2,000,000
1,500,000
1,500,000
17,500,000
(i)
(ii)
(iii)
(iv)
(v)
Issued to directors on 20 November 2019 (approved at Company’s AGM held on 20 November 2019).
Issued to employees under the Cazaly employee incentive plan.
Issued to the Managing Director on 2 December 2021 (approved at Company’s AGM on 19 November 2021).
Vest 12 months after Managing Director commencement date. Exercisable at 150% of the VWAP for CAZ shares
traded on the ASX over the 5 trading days immediately preceding the vesting date (12 October 2022)
Vest 12 months after Managing Director commencement date. Exercisable at 150% of the VWAP for CAZ shares
traded on the ASX over the 5 trading days immediately preceding the vesting date (12 October 2023).
Options are issued to directors, employees and consultants. The options may be subject to performance
criteria, and are issued to directors, employees and consultants to increase goal congruence between
executives, directors and shareholders. Options carry no dividend or voting rights. The fair value of share
options issued during the year was $77,617. All options were issued to the Managing Director on 2 December
2021 (approved by shareholders at the AGM on 19 November 2021).
43
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
14.
ISSUED CAPITAL (Cont’d)
Equity Based Payments
Options and performance rights may be issued to directors, employees and consultants. The options and
performance rights may be subject to performance criteria, and are issued to directors, employees and
consultants to increase goal congruence between directors, employees and consultants and the Cazaly
shareholders. Options and performance rights do not carry any dividend or voting rights.
Options
The fair value of share options issued during the year was $77,617. All options were issued to the Managing
Director on 2 December 2021 (approved by shareholders at the AGM on 19 November 2021).
Allottee
Director
Director (i)
Director (ii)
Number of
Options
Fair Value at
Grant Date
per Option
2,000,000
$0.01210
1,500,000
$0.01706
1,500,000
$0.01855
(i) Options vest on 12 October 2022.
(ii) Options vest on 12 October 2023.
Performance Rights
Estimated
Volatility
Life of Option
(years)
Exercise
Price
Share Price at
Grant Date
Risk Free
Interest Rate
67%
67%
67%
2.0
2.0
2.0
$0.067
$0.093
$0.108
$0.041
$0.055
$0.055
0.75%
0.75%
0.75%
On 2 December 2021, the Company’s Managing Director, Ms Tara French, was also issued a total of 5 million
performance rights (expiring on 11 October 2025) as follows:
(iii) 2,000,000 Performance Rights - vested upon issue;
(iv) 1,500,000 Performance Rights – vesting on 12 October 2022; and
(v) 1,500,000 Performance Rights - vesting on 12 October 2023.
The Performance rights were approved by shareholders at the AGM on 19 November 2021 and were
assigned a total value of $230,000 (2m vested - $92,000, 1.5m vesting 12 October 2022 - $69,000 and 1.5m
vesting 12 October 2023 - $69,000). The full amount has been expensed in the financial year ended 30 June
2022.
Capital risk management
The Board controls the capital of the Group in order to provide the shareholders with adequate returns and
ensure that the Group can fund its operations and continue as a going concern. The Group’s capital includes
ordinary share capital. There are no externally imposed capital requirements.
The working capital position of the Group at 30 June 2022 and 30 June 2021 are as follows:
Par
Cash and cash equivalents
Trade and other receivables
Financial assets
Current liabilities
Working capital position
15. OPTION RESERVE
Opening balance
Equity based payments (refer note 14)
Closing balance
2022
$
2021
$
6,901,309
63,979
3,882,311
(407,063)
10,440,536
9,593,690
133,893
2,491,151
(375,248)
11,843,486
422,241
307,617
729,858
358,724
63,517
422,241
This reserve is used to record the value of equity benefits provided to employees and directors as part of
their remuneration and for the value of equity benefits provided to vendors in respect of asset purchases.
44
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
16. ACCUMULATED LOSSES
Opening balance
Net earnings/(loss) attributable to members
Closing balance
17.
FINANCIAL RISK MANAGEMENT
(9,716,539)
(1,740,524)
(11,457,063)
(10,433,300)
716,761
(9,716,539)
The Group’s principal financial instruments comprise receivables, payables, held-for-trading investments,
cash and short-term deposits.
The Board of Directors has overall responsibility for the oversight and management of the Group’s exposure
to a variety of financial risks (including fair value interest rate risk, credit risk, liquidity risk and cash flow interest
rate 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.
Interest rate risks
The Group’s exposure to market interest rates relates to cash deposits held at variable rates. The Board
constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals
of existing positions.
Credit risk
The maximum exposure to credit risk at balance date is the carrying amount (net of provision of doubtful
debts) of those assets as disclosed in the Statement of Financial Position and notes to the financial
statements. The Consolidated group has adopted a policy of only dealing with creditworthy counterparties
and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from
defaults. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and
the aggregate value of transactions concluded is spread amongst approved counterparties.
Credit risk related to balances with banks and other financial institutions is managed by the board. The
board’s policy requires that surplus funds are only invested with counterparties with a Standard & Poor’s
rating of at least A+. All of the Group’s surplus funds are invested with AA and A+ Rated financial institutions,
the amount is $6,901,309 (2021: $9,593,690).
Liquidity risk
The responsibility for liquidity risk management rests with the Board of Directors. The Consolidated group
manages liquidity risk by maintaining sufficient cash or credit facilities to meet the operating requirements
of the business and investing excess funds in highly liquid short term investments.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters,
while optimising the return.
Maturity profile of financial instruments
The following tables detail the Group’s exposure to interest rate risk as at 30 June 2022 and 30 June 2021:
45
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
30 June 2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets – held for trading
Floating
Interest
Rate
$
1,901,109
-
-
1,901,109
Fixed
Interest
maturing
in 1 year
or less
$
5,000,000
49,679
-
5,049,679
Non-
interest
bearing
2022
Total
$
$
200
63,979
3,882,311
3,946,490
6,901,309
113,658
3,882,311
10,897,278
Weighted average effective interest rate
0.22%
Financial Liabilities
Trade and other payables
30 June 2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets – held for trading
-
-
-
-
201,651
201,651
201,651
201,651
Floating
Interest
Rate
$
2,593,490
-
-
2,593,490
Fixed
Interest
maturing
in 1 year
or less
$
7,000,000
49,679
-
7,049,679
Non-
interest
bearing
2021
Total
$
$
200
133,893
2,491,151
2,625,244
9,593,690
183,572
2,491,151
12,268,413
Weighted average effective interest rate
0.29%
Financial Liabilities
Trade and other payables
Net Fair Values
-
-
-
-
144,562
144,562
144,562
144,562
The carrying value and net fair values of financial assets and liabilities at balance date are:
Financial assets
Cash and deposits
Receivables
Investment held for trading
Financial liabilities
Payables
2022
2021
Carrying
Amount
$
Net fair
Value
$
Carrying
Amount
$
Net fair
Value
$
6,901,309
113,658
3,882,311
10,897,278
6,901,309
113,658
3,882,311
10,897,278
9,593,690
183,572
2,491,151
12,268,413
9,593,690
183,572
2,491,151
12,268,413
201,651
201,651
201,651
201,651
144,558
144,558
144,558
144,558
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. All financial instruments measured at fair value are level one, meaning fair value is
determined from quoted prices in active markets for identical assets.
Sensitivity Analysis -Interest Rate Risk
The Company has performed sensitivity analysis relating to its exposure to interest rate risk at balance
date. This sensitivity analysis demonstrates the effect on the current year results and equity which could
result from a change in these risks.
46
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
Change in loss
Increase in interest rate by 100 basis points
•
• Decrease in interest rate by 100 basis points
Change in equity
Increase in interest rate by 100 basis points
•
• Decrease in interest rate by 100 basis points
18.
EARNINGS PER SHARE
a)
Reconciliation of earnings to profit or loss:
2022
$
68,626
(68,626)
68,626
(68,626)
2021
$
95,805
(95,805)
95,805
(95,805)
Earnings/(loss) for the year
Earnings/(loss) used to calculate basic and diluted EPS
(1,740,579)
(1,740,579)
716,577
716,577
b) Basic and diluted weighted average number of ordinary shares
outstanding during the year used in calculating dilutive EPS
19. CASH FLOW INFORMATION
Reconciliation of cash flows from operating activities with
profit/(loss) after income tax
Profit/(Loss) after income tax
Non-operating cash flows in loss for the year:
Depreciation
Net (Gain)/ Loss on sale of shares
Finance costs on lease
Assets written off
Net profit on the sale of exploration assets
Employee & Consultant equity settled transactions
Fair value adjustment to investments
Exploration write-off
Changes in assets and liabilities:
Decrease/(increase) in trade receivables and prepayments
Increase/(decrease) in trade payables, accruals and
employee entitlements
Cash outflow from operations
20. COMMITMENTS
2022
No. of Shares
2021
No. of Shares
370,821,793
369,563,267
(1,740,579)
716,577
82,703
(325,618)
7,746
3,425
(1,472,892)
307,617
2,068,396
186,809
77,898
(996,942)
11,890
-
-
63,517
(1,296,883)
543,522
62,088
(64,459)
-
(22,941)
(820,305)
(967,821)
In order to maintain rights of tenure to mining tenements, the Group would have the following discretionary
exploration expenditure requirements up until expiry of leases. These obligations, which are subject to
renegotiation upon expiry of the leases, are not provided for in the financial statements and are payable:
No longer than one year
Longer than one year, but not longer than five years
Longer than five years
605,969
4,185,568
32,772
4,824,309
63,941
201,994
-
265,935
If the Group decides to relinquish certain leases and/or does not meet these obligations, assets recognised
in the statement of financial position may require review to determine the appropriateness of carrying values.
The sale, transfer or farm-out of exploration rights to third parties will reduce or extinguish these obligations.
47
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
21. CONTROLLED ENTITIES
Parent Entity
Cazaly Resources Limited
Controlled Entities
Cazaly Iron Pty Ltd
Sammy Resources Pty Ltd
Cazroy Pty Ltd
Baker Fe Pty Ltd
Baldock Fe Pty Ltd
Lockett Fe Pty Ltd
Hase Fe Pty Ltd
Vanrock Resources Pty Ltd
Discovery Minerals Pty Ltd
Kunene North Pty Ltd
Philco One Hundred & Seventy Three (Pty) Ltd
22. OPERATING SEGMENTS
Incorporation Country
Percentage Owned
2022
2021
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Namibia
100%
100%
100%
100%
100%
100%
100%
100%
80%
100%
95%
100%
100%
100%
100%
100%
100%
100%
100%
80%
100%
95%
The Group has identified its operating segments based on the internal reports that are reviewed and used
by the Board of Directors in assessing performance and determining the allocation of resources. The Group
is managed primarily on the basis of its exploration and corporate activities. Operating segments are
therefore determined on the same basis.
Exploration
Segment assets, including acquisition cost of exploration licenses, all expenses related to the tenements and
profit on sale of tenements are reported on in this segment.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the
majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable
on the basis of their nature and physical location. Unless indicated otherwise in the segment assets note,
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. Segment liabilities include trade and other payables.
Unallocated items
Non-recurring items of revenue or expenses are not allocated to operating segments as they are not
considered part of the core operations of any segment.
2022
Revenue
Interest received
Gain on sale of tenement
Other
Total segment revenue
Segment net operating profit (loss)
before tax
Depreciation
Impairment of exploration assets
Share based payments
Segment assets
Exploration expenditure
Property, plant & equipment
Segment liabilities
Exploration
$
Unallocated
$
Total
$
-
1,472,892
61,580
1,534,472
(125,228)
-
186,809
-
5,335,775
5,335,775
120,170
27,123
-
519,315
546,438
(1,615,351)
82,703
-
307,617
11,009,530
-
30,750
293,945
27,123
1,472,892
580,895
2,080,910
(1,740,579)
82,703
186,809
307,617
16,345,305
5,335,775
30,750
414,115
48
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
2021
Revenue
Interest received
Gain on sale of tenement
Other
Total segment revenue
Segment net operating profit (loss)
before tax
Depreciation
Impairment of exploration assets
Share based payments
Segment assets
Exploration expenditure
Property, plant and equipment
Segment liabilities
Exploration
$
Unallocated
$
Total
$
-
60,000
10,401
70,401
(473,121)
-
543,522
-
5,294,691
5,294,691
-
63,390
53,006
-
2,496,124
2,549,130
1,189,6978
77,898
-
63,517
12,443,285
-
23,505
364,434
53,006
60,000
2,506,525
2,619,531
716,577
77,898
543,542
63,517
17,737,976
5,294,693
23,505
427,824
23.
PARENT ENTITY DISCLOSURES
(a) Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserves:
Equity settled employee benefits
Retained profits
Total Equity
(b) Statement of Profit or Loss and Other Comprehensive
Income
Total profit/ (loss)
Total comprehensive income
Loans to Controlled Entities
2022
$
2021
$
6,961,519
6,722,039
13,683,559
9,649,342
8,251,720
17,901,062
17,901,062
407,037
7,052
319,909
52,576
414,089
372,485
26,674,025
26,620,029
729,858
(11,480,478)
422,241
(9,513,693)
15,923,406
17,528,577
(1,961,955)
473,995
(1,961,955)
473,995
Loans are provided by Cazaly (‘the Parent’) 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.
49
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
24.
EVENTS SUBSEQUENT TO REPORTING DATE
On 20 July 2022, the Company announced that it had entered into an agreement with Lynd Resources Pty
Ltd, to secure an option, to earn into the North Queensland polymetallic Vanrock project (refer to
announcement for relevant terms and conditions of the earn-in).
Apart from the above, the Directors are not aware of any matters or circumstances at the date of the report,
other than those referred to in this report or the financial statements or notes thereto, that has significantly
affected or may significantly affect the operations, the results of operations or the state of affairs of the Group
in subsequent financial years.
25. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities
Kaoko Project
As announced on 26 March 2018, the Company acquired an option to earn the rights to a 95% interest in
the Kaoko Kobalt Project (‘Kaoko Project’) in Namibia. The following contingent liabilities remain for Cazaly’s
registered 95% interest at 30 June 2022:
Under the KDN JV:
KDN JV’s partner’s remaining 5% free carried to a definitive feasibility study and to be NEEEF compliant
(governmental draft “New Equitable Economic Empowerment Framework”).
Under the Kunene Purchase Agreement:
The Company acquired 100% of the issued capital of Kunene North Pty Ltd and therefore its rights under the
KDN JV, and has the following commitments outstanding:
i)
Issue 10.5 million fully paid Cazaly shares upon the delineation of a JORC compliant mineral resource
containing at least 10,000t of contained cobalt (or other metal equivalent)
ii) Pay A$1 million (or issue fully paid Cazaly shares to that amount) upon a formal Decision to Mine
Halls Creek
As announced on 12 November 2020, the Company acquired an 80% interest in the Halls Creek project from
3D Resources Limited bringing Cazaly to a 100% interest in the project. There is a contingent liability of
$250,000 due to 3D Resources Limited upon production of minerals in a commercial and saleable quantity
and there is a royalty obligation to Squadron Resources Pty Ltd on the tenement (M80/247). The royalty
payable is a 1.5% net smelter return of production attributable to the tenement.
Contingent Assets
Hamersley
The Hamersley Iron Ore Project was an unincorporated Joint Venture between Lockett Fe Pty Ltd (“Lockett”)
(100% owned subsidiary of the Company) and Pathfinder Resources Ltd (ASX:PF1). In August 2021 the project
was sold to Equinox Resources Limited (ASX:EQN) who successfully completed a $9 million initial public
offering under its Prospectus dated 31 August 2021 and subsequently listed on ASX on 13 October 2021.
Lockett received 15 million EQN shares and 2,850,000 performance share, plus retained a royalty interest on
the project. The royalty is fixed and payable to Lockett Fe Pty Ltd of USD$0.30 per metric tonne of iron ore
which is extracted and sold or otherwise disposed of from the area within the boundaries of the Hamersley
Iron Ore Project. The Company also holds 2,850,000 Performance Shares in Equinox. Each Performance Share
will, at the election of the holder, convert into one Equinox Share, subject to Equinox announcing to the ASX
a positive preliminary Feasibility Study in relation to the Hamersley Iron Ore Project, confirming the Hamersley
Iron Ore Project is commercially viable. The Performance Shares have a two-year term.
Parker Range
On 19 August 2019, the sale of Parker Range to Mineral Resources was completed and Cazaly received the
$20 million consideration. A royalty is also due at the rate of A$0.50 for every dry metric tonne of iron ore
extracted and removed from the Parker Range area after the first 10 million dry metric tonnes of production.
50
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2022
26.
SHARE BASED PAYMENTS
The following table illustrates the number and weighted average exercise prices of and movements in all
options on issue during the year (please also refer to Note 14 for further details on equity-based payments
issued during the year):
2022
2021
Number of
Options
Weighted
Ave Exercise
Price $
Number of
Options
Weighted
Ave Exercise
Price $
Balance at beginning of reporting
period
Expired during the year
Exercised during the year
Issued during the year (*)
Balance at end of reporting period
Exercisable at end of reporting period
12,500,000
-
-
2,000,000
14,500,000
14,500,000
0.093
-
-
0.067
0.090
36,250,000
(2,800,000)
(23,450,000)
2,500,000
12,500,000
12,500,000
0.063
0.177
0.033
0.053
0.093
* Excludes options not yet vested at 30 June 2022.
The options outstanding at 30 June 2022 had a weighted average remaining life of 0.57 years (2021 – 1.66 years). The
weighted average fair value of the options outstanding at 30 June 2022 was $0.023 (2021 - $0.025).
27.
RIGHT OF USE ASSETS AND LEASE LIABILITY
Right-of-use assets
Office lease
At carrying amount
Additions
Less: Accumulated amortisation
Leases
2022
$
151,367
-
(69,865)
81,502
2021
$
215,417
-
(64,050)
151,367
As of 30 June 2022, the net carrying amount of the office held under a lease arrangement is $88,714.
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and
borrowings) and the movements during the period:
As at 1 July 2021
Additions
Accretions of interest
Payments
As at 30 June 2022
Current
Non-current
The following are the amounts recognised in profit or loss:
Depreciation
Interest expense on lease liabilities
Total amount recognised in profit or loss
162,431
-
7,746
(81,463)
88,714
81,662
7,052
69,865
7,746
77,611
The Group had total cash outflows for leases of $81,463 in 2022 (2021: $71,803).
222,344
-
11,890
(71,803)
162,431
109,855
52,576
58,228
11,890
70,118
51
DIRECTORS’ DECLARATION
Cazaly Resources Limited Annual Report 2022
In accordance with a resolution of the directors of Cazaly Resources Limited, the directors of the Company
declare that:
1.
the financial statements and notes, as set out, are in accordance with the Corporations Act 2001
and:
a.
b.
comply with Australian Accounting Standards, which, as stated in accounting policy Note 1
to the financial statements, constitutes compliance with International Financial Reporting
Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2022 and of the performance
for the year ended on that date of the consolidated group;
in the directors’ opinion there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable; and
the directors have been given the declarations required by s 295A of the Corporations Act 2001 from
the Chief Executive Officer and Chief Financial Officer.
2.
3.
On behalf of the Directors
Tara French
Managing Director
21 September 2022
52
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CAZALY RESOURCES LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Cazaly Resources Limited (“the Company”) and its subsidiaries (“the
Consolidated Entity”), which comprises the consolidated statement of financial position as at 30 June 2022,
the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion:
a.
the accompanying financial report of the Consolidated Entity is in accordance with the Corporations
Act 2001, including:
(i)
giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2022 and
of its financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards as disclosed in Note
1.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Financial Report section of our report. We are independent of the Consolidated Entity in accordance with
the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key Audit Matter
How our audit addressed the Key Audit Matter
Evaluation and Evaluation Assets
Our procedures included, amongst others:
(Refer to Note 11)
• Exploration and evaluation is a key audit
matter due to:
• The significance of the balance to the
Consolidated Entity’s financial position.
• The
level of
judgement required
in
evaluating management’s application of
the requirements of AASB 6 Exploration
for and Evaluation of Mineral Resources.
AASB 6 is an industry specific accounting
standard requiring the application of
significant judgements, estimates and
includes
knowledge. This
industry
specific requirements for expenditure to
be capitalised as an asset and
subsequent requirements which must be
complied with for capitalised expenditure
to continue to be carried as an asset.
• Assessed management’s determination of its
areas of interest for consistency with the
definition in AASB 6. This involved analysing
the tenements in which the consolidated entity
holds an interest and the exploration programs
planned for those tenements.
• For each area of interest, we assessed the
tenure by
Consolidated Entity’s rights
corroborating to government registries and
to
evaluating agreements in place with other
parties as applicable;
• We
tested
to capitalised
expenditure for the year by evaluating a sample
the additions
of recorded expenditure for consistency to
capitalisation
underlying
records,
the
requirements of
the Consolidated Entity’s
accounting policy and the requirements of
AASB 6;
• We considered the activities in each area of
interest to date and assessed the planned
future activities for each area of interest by
evaluating budgets for each area of interest.
• We assessed each area of interest for one or
more of the following circumstances that may
capitalised
indicate
impairment of
the
expenditure:
o
the licenses for the right to explore
expiring in the near future or are not
expected to be renewed;
o substantive expenditure
for
further
exploration in the specific area is
neither budgeted or planned;
Page | 2
o decision or intent by the Consolidated
Entity to discontinue activities in the
specific area of interest due to lack of
commercially viable quantities of
resources; and
o data
indicating
that, although a
development in the specific area is
likely to proceed, the carrying amount
of the exploration asset is unlikely to be
recovered
development or sale.
full
in
from successful
• We assessed the appropriateness of the related
financial
in note 11
disclosures
the
to
statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Consolidated Entity’s annual report for the year ended 30 June 2022, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the
directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Consolidated Entity or to cease
operations, or has no realistic alternative but to do so.
Page | 3
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to
obtain reasonable assurance about whether the financial report as a whole is free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Consolidated Entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Consolidated Entity’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Consolidated Entity to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Consolidated Entity to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Consolidated Entity audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
Page | 4
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2022.
The directors of the Company are responsible for the preparation and presentation of the remuneration report
in accordance with s 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s Opinion
In our opinion, the Remuneration Report of the Company, for the year ended 30 June 2022, complies with
section 300A of the Corporations Act 2001.
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated this 21st day of September 2022
Perth, Western Australia
Page | 5
ADDITIONAL SHAREHOLDER INFORMATION
Cazaly Resources Limited Annual Report 2022
Additional information required by Australian Securities Exchange Limited and not shown elsewhere in this
Annual Report is as follows. The information is provided as at 15 September 2022.
DETAILS OF HOLDERS OF EQUITY SECURITIES
ORDINARY SHAREHOLDERS
There are 370,821,793 fully paid ordinary shares on issue, held by 2,318 shareholders. Each member entitled
to vote may vote in person or by proxy or by attorney and on a show of hands every person who is a member
or a representative or a proxy of a member shall have one vote and on a poll every member present in
person or by proxy or attorney or other authorised representative shall have one vote for each share held.
TWENTY LARGEST SHAREHOLDERS (AS AT 15 SEPTEMBER 2022)
Fully Paid Ordinary
Ordinary Shareholders
Kingsreef Pty Ltd (NB & DL Family A/c)
Mr Clive Bruce Jones (Alyse Investment A/C)
ACN 139 886 025 Pty Ltd
Jetosea Pty Ltd
Citicorp Nominees Pty Ltd
Mr Terry James Gardiner
Mrs Alison Ovenden
Mr C W Chalwell & Mr I W Wilson (Chalwell pension Fund A/c)
Raymond Gardener & Hineaka Black (Tumeke S/Fund)
Jaz Future Fund Pty Ltd (ARR Superannuation Fund)
Kingsreef Pty Ltd
BNP Paribas Noms Pty Ltd (DRP A/c)
Mr Anthony Robert Ramage
Mr Derek Patrick Knox
Estate Mr Nathan Bruce McMahon
Mr Thomas Francis Corr
Maincoast Pty Ltd
Brevmar Pty Ltd (Glen Invest S/Fund)
Garrett Smythe Ltd
Tilpa Pty Ltd (Tilpa Pty Ltd Staff S/F A/C)
Number
31,529,841
20,829,904
16,917,640
16,627,545
9,609,799
6,517,893
6,000,000
6,000,000
5,900,000
5,450,001
5,343,550
5,060,919
5,020,500
5,000,000
4,793,755
4,000,000
3,473,849
3,432,309
3,375,000
3,149,319
%
8.50
5.62
4.56
4.48
2.59
1.76
1.62
1.62
1.59
1.47
1.44
1.36
1.35
1.35
1.29
1.08
0.94
0.93
0.91
0.85
168,031,824
45.31%
VOTING RIGHTS
Subject to any rights or restrictions for the time being attached to any class or classes (at present there are
none) at general meetings of shareholders or classes of shareholders:
(a) each shareholder entitled to vote, may vote in person or by proxy, attorney or representative;
(b) on a show of hands, every person present who is a shareholder or a proxy, attorney or representative
of a shareholder has one vote; and
(c) on a poll, every person present who is a shareholder or a proxy, attorney or representative of a
shareholder shall, in respect of each fully paid share held, or in respect of which he/she has appointed
a proxy, attorney or representative, have one vote for the share, but in respect of partly paid shares
shall have a fraction of a vote equivalent to the proportion which the amount paid up bears to the
total issue price for the share.
HOLDERS OF NON-MARKETABLE PARCELS
There are 1,235 shareholders who hold less than a marketable parcel of shares.
58
ADDITIONAL SHAREHOLDER INFORMATION
Cazaly Resources Limited Annual Report 2022
DISTRIBUTION OF SHARE HOLDERS (AS AT 15 SEPTEMBER 2022)
1 to
1,001 to
5,001 to
10,001 to
1,000
5,000
10,000
100,000
100,001 and over
SUBSTANTIAL SHAREHOLDERS
Ordinary
Shares
130,282
1,569,581
2,374,412
31,168,027
335,579,491
370,821,793
As at report date, the following shareholders are recorded as Substantial Shareholders pursuant to their
last notices lodged in accordance with section 671B of the Corporations Act:
Substantial Shareholder
Ordinary Shares held
% Held
Nathan McMahon & associated entities
Clive Jones & associated entities
Jetosea Pty Ltd
37,363,256
18,329,904
18,839,815
10.61%
5.30%
5.08%
The shares and percentages held, as set out above, are based on the total issued share capital at the
date of notification to the Company of the relevant substantial shareholder interest.
SHARE BUY-BACKS
There is no current on-market buy-back scheme.
OTHER INFORMATION
Cazaly Resources Limited, incorporated and domiciled in Australia, is listed on the Australian Securities
Exchange (ASX code: CAZ).
INTEREST IN MINING TENEMENTS AS AT 15 SEPTEMBER 2022
TID
PROJECT
ENTITY
% INT
TID
PROJECT
ENTITY
% INT
Managed
Not
Managed
E80/4808 MCKENZIE SPRINGS
E38/3111 MOUNT VENN
E38/3150 MOUNT VENN
E38/3581 MOUNT VENN
E31/1019 CAROSUE
E31/1020 CAROSUE
M31/0427 CAROSUE
E09/2346
ERRABIDDY
Sammy
CAZ
CAZ
CAZ
CAZ
CAZ
CAZ
Sammy
30
20
20
20
10
10
10
20
MT ANGELO
HALLS CREEK
ASHBURTON 1
ASHBURTON 2
ASHBURTON 3
ASHBURTON 4
ASHBURTON 5
HARDEY RIVER
YABBY
YABBY
DINGO WELL
PRARIRIE DOWNS
M80/0247
E80/5307
E08/3259
E08/3260
E08/3261
E08/3262
E08/3265
E08/3272
E38/3425
E38/3426
E52/4105 *
E52/4106 *
E52/4107 * WARRAWANDA CREEK
E52/4108 * WARRAWANDA CREEK
E52/4109 * WARRAWANDA CREEK
NEWMAN
E52/4110 *
Namibia
EPL 6667
CAZ
CAZ
CAZ
CAZ
CAZ
CAZ
CAZ
CAZ
Sammy
Sammy
Sammy
Sammy
Sammy
Sammy
Sammy
Sammy
Kunene
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
95
Sammy = Sammy Resources Pty Ltd (CAZ subsidiary)
Kunene = Kunene North Pty Ltd (CAZ subsidiary)
* = application
59