Annual
Financial Report
30 June 2018
Chalice Gold Mines Limited
Corporate Directory
Directors
Timothy (Tim) Goyder
Morgan Ball
Stephen Quin
Executive Chair
Lead Independent Non-executive Director
Non-executive Director
Company Secretary
Leanne Stevens
Principal Place of Business & Registered Office
Level 2, 1292 Hay Street
WEST PERTH WA 6005
Tel:
(+61) (8) 9322 3960
Fax:
(+61) (8) 9322 5800
Web: www.chalicegold.com
Email: info@chalicegold.com
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
PERTH WESTERN AUSTRALIA 6000
Home Exchange
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St Georges Terrace
PERTH WESTERN AUSTRALIA 6000
Toronto Stock Exchange
130 King Street West,
Toronto, Ontario M5X 1J2
Share Registry
Australia
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
PERTH WESTERN AUSTRALIA 6000
Tel: 1300 850 505
Canada
Computershare Investor Services
100 University Avenue, 8th Floor
Toronto, Ontario M5J 2Y1
Tel: +1 416 263 9200
ASX
Share Code: CHN
TSX
Share Code: CXN
Contents
Chairman’s Letter
Operating and Financial Review
Mineral Resource Statement
Tenement Schedules
Directors’ Report
Corporate Governance Statement
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Contents of the notes to the financial statements
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
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5
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38
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Chairman’s Letter
Dear Fellow Shareholder,
2018 has been an active and productive year for Chalice, during which the Company continued to expand its district-scale gold
portfolio in Canada’s world-class Abitibi belt while also securing a major new exploration opportunity one of the world’s most
exciting gold districts, the Bendigo region of Victoria, Australia.
With recent weakness in commodity markets casting a shadow over the broader recovery in the sector, the strategic positioning of
the Company’s portfolio in Tier 1 jurisdictions, and the continued strength of its balance sheet, have positioned us to prosper in
these politically and economically volatile times.
Our business model has evolved over the course of the year, with a renewed focus on building district-scale exploration projects in
world class geological terranes, located in favourable jurisdictions.
In light of this refined focus, the Company recently proposed to return excess capital to shareholders. The Company will seek
shareholder approval to make a capital return of up to 4.0 cents cash per share (~A$10.7 million) following the AGM. Given the
dearth of quality near-development assets in Tier 1 jurisdictions that are within Chalice’s financial capacity, I believe that a more
compelling risk-reward proposition for shareholders currently exists in exploration stage projects and our track record of success in
Eritrea and Canada is proof that we can deliver significant returns for shareholders by pursuing this approach.
If approved, the Company will maintain an exceptionally strong balance sheet, with a forecast ~A$24 million in cash and no debt
on completion of the distribution, leaving the Company in the fortuitous position of being able to accelerate exploration on its core
projects and be exposed to multiple opportunities for a significant discovery.
Our two flagship gold exploration assets are located in the world-class regions of Bendigo in Victoria and the Abitibi greenstone
belt in Quebec. These areas are recognised for prolific gold endowment, where the size of the potential prize is globally significant:
•
•
At the Pyramid Hill Project in Victoria, we have a district-scale 3,080km2 tenement position in the highly
prospective and reinvigorated north Bendigo Zone, which hosts Kirkland Lake Gold’s Fosterville gold mine. The
Project was staked in late 2017 and initial exploration activity has defined multiple large-scale drill targets, some
10’s of kilometres in size. We eagerly await results from the first round of drilling to commence in late October;
At the East Cadillac Project in Quebec, we have continued to expand and explore our district-scale project
covering 27km of strike along the prolific Larder Lake – Cadillac Fault. The Project was expanded by 112km2 and a
27,600m reconnaissance diamond drilling program was successfully completed during the year, resulting in three
new gold discoveries. Our work to date has confirmed that the relatively poorly explored region has the potential to
become a significant new gold province.
On the corporate front, the Company has continued to actively manage its portfolio during the year, making timely asset sales and
farm-outs to maximise value and optionality for shareholders.
Several management and Board changes were implemented over the course of the year, including the appointment of Alex Dorsch
as Chief Executive Officer as part of a management transition which saw me assume the role of Executive Chairman and Tony
Kiernan become a Non-executive Director.
Subsequent to the reporting period, Tony Kiernan resigned as Non-executive Director due to his growing work-load and other Board
commitments. Tony has been an outstanding contributor to the Board for many years and his common sense, deep corporate
experience and strong leadership will be greatly missed. I am pleased to welcome Mr Morgan Ball to the new position of Lead
Independent Director.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 3
Chairman’s Letter
With these changes have come new perspectives and methods, as well as a broadening of our technical, commercial and executive
team. The changes provide a solid outlook for growth into the future.
Under the renewed leadership team, the Company has continued to demonstrate a disciplined and focused approach to the
management of our projects and finances, while also pursuing growth opportunities. Alex and I have developed a complementary
relationship which ensures collaboration and rigorous discussion at a strategic and tactical level. I believe this has improved our
overall approach, and I am excited about what the year ahead will bring.
While current market conditions in the junior resource sector are difficult, I believe there is a compelling long-term value proposition
in exploring and developing high-quality mineral projects. There is a significant global deficit in exploration expenditures that has
led to a shortage of quality development projects, compounded by a diminishing return on every dollar spent exploring. This points
towards a tightening supply-demand equation for metals.
I believe that Chalice can play a meaningful role in this environment by aggressively exploring and driving value for our
shareholders, and continuing to assess opportunities to acquire quality exploration projects to complement the current portfolio.
In conclusion, I would like to take this opportunity to thank all our shareholders, my fellow directors, executives and employees in
both Australia and Canada for their continued and valued support over the past year.
We are all looking forward to a prosperous and exciting year ahead.
Yours faithfully,
Tim Goyder
Executive Chairman
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 4
Business Strategy and Outlook
Chalice’s vision is to become a globally recognised specialist explorer and developer in the international mining industry.
Our mission is to utilise our advantageous financial position and strong in-house expertise to grow and achieve significant
returns for our shareholders. Our strategy to achieve this mission is based on three core principles:
Figure 1. The Chalice Way
Chalice’s strategy has evolved over the year, with the
Company increasing the size and composition of its exploration
portfolio, refining our business development strategy and
broadening our expertise considerably.
Chalice’s exploration portfolio has grown to seven Projects, all
within tier-1 mining jurisdictions and located largely in globally
significant geological
diversified from purely gold into base and battery metals, in
order to gain exposure to disrupted and rapidly growing com-
modities.
terranes. The portfolio has been
Business development remains a focus for the Company, after
successfully building a strong balance sheet position through a
number of well-timed asset sales. Over the course of the year,
our acquisition criteria was broadened to target earlier stage
opportunities with a targeted approach. The way we search for
and evaluate acquisition opportunities is internally driven, with
a continued, strong emphasis on commercial feasibility.
Our efforts have focused on acquiring projects, either through
direct acquisition or joint venture, hosted in regional terranes
The
deposits.
that have the key geological features to host globally significant
mineral
lack
acquisition-opportunities
industry. However, the Company continues to seek timely and
high impact acquisitions to complement the current portfolio,
while maintaining an owner’s mindset in its evaluation process.
remains a challenge across
quality,
of
advanced
the
The Company has continued to actively manage its portfolio,
conducting accelerated and value-driven exploration and then
rapidly making a decision to progress, partner or divest. Our
approach ensures we remain focussed on achieving the best
possible return on investment for every dollar spent on our
Projects. A significant exploration budget of over A$5 million
has been approved for the upcoming financial year, which
provides an exceptional opportunity for the Company to make
a material mineral discovery.
The Company cautions key risks associated with external
factors (movements in commodity prices, foreign exchange
rates, interest rates and equity markets) may adversely impact
the achievement of these objectives.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 5
Warrego North
Flinders River
Vanadium Project
Copper-Gold Project
Yilgarn Gold Project
Julimar Nickel-
Vanadium Project
Kinebik Gold
Project
Pyramid Hill Gold Project, Victoria
East Cadillac Gold Project, Quebec
Figure 2. Location of Chalice’s current exploration portfolio in Australia and Canada
Review of Operations
Chalice has built and maintained a strong portfolio of exploration projects, conducted large scale exploration programs and
evaluated a number of high impact business development opportunities over the course of the year.
Since the end of 2016, Chalice has entered into a number of option, farm-in and joint venture agreements to acquire interests in
several projects across the tier-1 mining jurisdictions of Australia and Canada. The Company has also made several nil-cost early
stage acquisitions within our current footprint, to build a substantial global exploration portfolio (Figure 2).
Exploration expenditure for the year was ~A$13 million, comprising the following key activities:
~30,000m diamond drilling program as well as significant regional geochemistry and geophysical
programs across our two projects in Canada.
An initial geochemistry program at the Pyramid Hill Gold Project which resulted in significant areas of gold
anomalism in soils.
Two drilling programs at the Warrego North Copper-Gold Project which resulted in encouraging
indications of mineralisation warranting follow up work.
Reconnaissance air-core drilling program and geochemistry programs at several prospects within the
Yilgarn Gold Project.
6,500m RC and air-core drilling program at the West Pilbara Gold-Copper Project.
4,000m RC drilling program at the Latitude Hill Nickel Project.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 6
Pyramid Hill Gold Project
VICTORIA, AUSTRALIA
The 100%-owned Pyramid Hill Gold Project covers an area of 3,080km2 north of Bendigo in Victoria. The Project extends to the
north-west of the world-class >22Moz Bendigo Goldfield and to the north-east of one of the world’s highest-grade gold mines, the
>7Moz Fosterville Gold Mine owned by Kirkland Lake Gold (NYSE / TSX: KL | ASX: KLA). The ‘Gold Undercover’ initiative by
the Victorian Government estimated a potential ~32Moz of undiscovered gold beneath Murray Basin cover in the Bendigo Zone
where Chalice holds a district scale land position.
Exploration Activities
The Pyramid Hill Gold Project has been an exciting acquisition for
Chalice this year, with the Bendigo region enjoying a significant
renaissance in gold exploration following the continued success of
several nearby projects.
Chalice made a strong start to its maiden exploration campaign
over the year, identifying four coherent and highly prospective gold-
in-soil anomalies. The two largest anomalies are each ~12km long
and have remained the initial focus of the Company’s exploration
campaign. In addition to an expanded geochemical sampling
program, Chalice also commenced ground-based gravity surveys
over granted tenure to refine the structural geology at a local scale.
Figure 3a and b. Pyramid Hill Gold Project
location, neighbouring companies, Bendigo
Zone gold deposits and occurrences, and
gold-in-soil anomalies identified
Future Exploration
Ownership
The Project is 100% owned by the Company.
from
the regional soil geochemical sampling
Results
programs and extended ground gravity work will be used to
plan for a maiden drilling program scheduled for early Q4
2018, subject to approvals.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 7
East Cadillac Gold Project
QUEBEC, CANADA
The East Cadillac Gold Project covers an area of 245km2 and is located ~35km east of the >20Moz Val-d’Or gold camp
in Quebec, Canada. With land-holdings encompassing a strike length of 27km of the Larder Lake-Cadillac Fault, the most
prolifically endowed gold trend in the southern Abitibi, the Project is situated amongst some of the region’s most significant mines
and surrounds the historical Chimo gold mine, owned by Cartier Resources (TSX: ECR). The East Cadillac Project was acquired by
Chalice in late 2016 and further consolidated with several earn-in option agreements (Chalice earning 70-100%) and 100%-
owned claims. Since acquiring the Project, Chalice has completed systematic geochemistry and geophysics field programs as well
as a ~27,600m regional diamond drilling program targeting large scale gold systems, with three new discoveries made to date.
Figure 4. East Cadillac Gold Project location and neighbouring companies and gold mines
Exploration Activities
A NI43-101 and JORC 2012 compliant Mineral Resource estimate for Nordeau West (from historic drilling) was completed in
mid 2017, comprising an Indicated Mineral Resource of 225,000t @ 4.17g/t Au for 30,200oz Au and an Inferred Mineral
Resource of approximately 1.11Mt @ 4.09g/t Au for 146,300oz Au.
MMI soil, rock chip and bark geochemical sampling, as well as Aeromagnetic and LiDAR geophysical surveys across the western
part of the Project were completed. A detailed 200m line-spaced 3D Orevision IP geophysical survey was also completed over
the western 16km of the Larder Lake–Cadillac Fault Zone. These data sets identified several high priority drill targets.
Chalice then successfully completed a 27,600m regional diamond drilling program, targeting large scale gold systems as well as
down plunge extensions of known mineralisation. Three new gold discoveries were made, extending the known mineralisation at
Simon West to approximately 3.5km of strike length, open to the west, and two new significant wide zones of gold mineralisation
at North Contact and Lac Rapides prospects which remain open along strike and down dip.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 8
East Cadillac Gold Project
QUEBEC, CANADA
Figure 5. East Cadillac Gold Project structural interpretation and prospect overview
Future Exploration
Ownership
Following the successful Canadian winter drilling program,
Chalice commenced a large-scale summer field program to
extend coverage of surface geochemistry and geophysics
across high priority targets.
The program aims to explore 5 new large-scale target
areas, and to build on wide mineralised zones discovered
at North Contact and Lac Rapides. The next phase will aim
to define drill ready targets for the next winter drill
program in late Q4 2018.
Figure 6. East Cadillac Gold Project ownership overview
During the year, Chalice increased the Project area through
two option agreements with Pershimex Resources Corporation
(formerly Khalkos Exporation Inc.) and Renforth Resources Inc.,
adding 112km2 of claims. Figure 6, below, outlines the major
agreements that comprise the Project, whereby Chalice is
earning a 70-100% interest in relevant areas as well as
Chalice 100% owned tenure.
In September 2018, the Company issued 3,000,000 fully
paid ordinary shares in consideration for the acquisition of the
remaining 30% interest in its joint venture property within the
East Cadillac Gold Project with Monarques Gold Corporation
(TSX-V: MQR). This is a key acquisition as it consolidates an
important part of the overall East Cadillac Gold Project.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 9
Warrego North Copper-Gold Project
NORTHERN TERRITORY, AUSTRALIA
The Warrego North Copper-Gold Project is located approximately 5km north-west of the historical high-grade Warrego copper-
gold mine in the western part of the Tennant Creek Mineral Field in the Northern Territory. Warrego was the largest deposit mined
in the area with historical production of ~1.6Moz of gold and ~175,000 tonnes of copper, in a classic iron oxide copper gold
(“IOCG”) geological setting. Chalice optioned part of the Project in April 2016 from Meteoric Resources (ASX: MEI), and can
earn up to a 70% interest in two tenements within the project by sole funding A$800,000. Three additional tenements surrounding
the Meteoric JV tenure are 100% owned.
Exploration Activities
The Company identified two significant clusters of magnetic anomalies on its recently acquired tenure which have the potential
to host high-grade gold and copper in typical Tennant Creek IOCG ironstone bodies. The Emu trend was prioritised for drilling
during August 2018 and the Company completed a program of 4 RC drill holes for 1200m, testing three co-incident magnetic
and gravity anomalies over a 5km strike length. Assays showed the target was effectively tested however anomalous copper
readings were observed.
The Parakeet Target was previously identified as a coincident magnetic and gravity anomaly. One RC and three diamond drill
holes with RC pre-collars for 1,575m was drilled to follow-up previously encouraging results from drill hole WND17-001 (8m
@ 1.74% Cu and 0.42g/t Au). Follow-up drilling was successful in identifying two additional ironstone units in diamond hole
WND17-006, located approximately 150m east of WND17-001. Diamond hole WND17-004, drilled directly beneath the
previous intersection in diamond hole WND17-001 intersected a zone which was interpreted to have narrowly missed a
prospective ironstone. Diamond hole WND17-005 tested the western extent of the Parakeet anomaly and RC hole WND17-003
tested an historical chargeability target. Both failed to intersect any zones of mineralisation.
Future Exploration
The Rooster target is an exciting cluster of several
strong magnetic anomalies
located within
ELA31609. Diamond drilling is planned following
the grant of the Exploration Licence, subject to
grant.
Ownership
EL23764 is 51% owned by the Company with the
right to earn up to a 70% interest by sole funding
$400,000 in exploration expenditure within five
years. The tenements EL31608-31610 are 100%
owned by the Company.
Figure 7. Warrego North Project location map
including major prospects, tenure and planned
drilling over regional aeromagnetics companies
and gold mines
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 10
Yilgarn Gold Project
WESTERN AUSTRALIA
The Kurrajong Bore, Bunjarra Well, Jericho, Nulla South and Gibb Rock project areas are located over prospective greenstone
belt sequences in the Eastern Goldfields and Southern Cross Goldfields of Western Australia. The Kurrajong Bore Project (48km2)
lies ~50km NE of the world class Gwalia gold mine (>5Moz Au) and proximal to other smaller orogenic gold deposits along the
Mertondale shear zone. The Bunjarra Well Project (75km²) lies adjacent to the highly prospective Keith Kilkenny Shear Zone,
a major regional lineament known for its regional prospectivity and gold endowment. The Nulla South project comprises two
Exploration Licences (275km²), situated 25km SE of the actively producing Edna May gold mine (>1Moz Au) over the Westonia
greenstone belt. Gibb Rock comprises a single Exploration Licence (55km2) located over the Holleton greenstone belt.
Exploration Activities
Kurrajong Bore and Bunjarra Well
The Company completed a 5,500m air-core drilling program at the Kurrajong Bore (Mertondale east) and Bunjarra Well
prospects during the year. Drilling was mostly undertaken on selected 0.4-2km spaced east-west orientated drill sections with
holes on 100-200m centres to broadly test magnetic anomalies (interpreted mafic intrusives) and structural targets enclosing felsic
and mafic volcanic and sedimentary sequences. Assays are currently awaited.
Gibb Rock
Chalice also conducted a program of auger drilling (309 holes) and soil sampling (48 samples) at Gibb Rock prospect, which
hosts a greenstone belt succession comprised of Banded Iron Formation, mafic volcanic/schist bounded by granite-gneiss of the
Southern Cross terrane. Sampling was mostly undertaken on a 100m x 20m grid.
Nulla South
Chalice entered into a farm-in and joint venture agreement with Ramelius Resources (ASX: RMS), where Ramelius can earn a 70%
interest in the tenements by spending $2 million over three years.
Future Exploration
The Company is currently reviewing the results
from the recently completed air-core drilling and
auger programs.
Ownership
The Project (excluding Nulla South) is 95% owned
by the Company.
Figure 9: Yilgarn Gold Project
location, Western Australia
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 11
Flinders River Vanadium Project
QUEENSLAND, AUSTRALIA
The 100%-owned Flinders River Vanadium Project is located in central Queensland, ~250km east of Mt Isa and 380km west of
Townsville. The Project is strategically located within close proximity to the Flinders Highway and Great Northern Railway that
connects to the port of Townsville. The region is highly prospective for sedimentary-hosted vanadium mineralisation, with several
globally significant vanadium resources nearby held by Intermin Resources Limited (ASX: IRC) / AXF Resources and Multicom
Resources.
Exploration Activities
Ten Exploration Permit applications have been lodged over the course of the year and at the date of this report a total of four
have been granted. The Company expects the remaining six applications to be granted in Q4 2018, after which it will
commence field reconnaissance work.
Future Exploration
A shallow air-core drilling program is
planned to test the lateral continuity and
thickness of the Toolebuc formation which
hosts known vanadium mineralisation in
the district. The program aims to delineate
any potential mineralisation in a low cost
and effective manner.
Ownership
The Project is 100% owned by the
Company.
Figure 10: Flinders River Vanadium Project location over uranium channel
radiometric imagery
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 12
Julimar Nickel- Vanadium Project
WESTERN AUSTRALIA
The Julimar Nickel-Vanadium Project is located just 80km north-east of Perth, with excellent access via the Great Northern
Highway and established infrastructure nearby. The Julimar Project is prospective for both magmatic-style Nickel-Copper-Platinum
Group Elements (Ni-Cu-PGE) and intrusion related Iron-Vanadium-Titanium (Fe-V-Ti) mineralisation within an interpreted large
(26 x 7km) layered mafic-ultramafic complex.
Exploration Activities
Chalice has conducted a review of limited historic exploration, along with interpretation of existing geophysical datasets, which
was found to support the interpretation of a prospective mafic-ultramafic intrusive geological setting. Two Exploration Licence
applications were lodged during the year.
Figure 11a and b: Julimar Nickel-Vanadium Project location over regional aeromagnetics
Future Exploration
Chalice plans to carry out field reconnaissance work followed by targeted ground magnetic, gravity and electromagnetic surveys
over selected target zones (potential feeder zones) within the greater intrusive complex, following the granting of Exploration
Licences. Any targets generated from the surface geophysical surveys will be the basis for follow-up drill testing.
Ownership
The Project is 100% owned by the Company.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 13
Kinebik Gold Project
QUEBEC, CANADA
The 100%-owned Kinebik Gold Project covers an area of 187km2 and includes 30km of strike along the Casa Berardi fault
in Quebec, Canada. The fault system hosts the >6Moz Casa Beradi gold mine ~150km to the west, and numerous other gold
occurrences.
Exploration Activities
A maiden drill program of 10 holes for 2,007m was completed during the year, testing the first of three strong gold plus
pathfinder MMI soil geochemical anomalies. The South Anomaly was prioritised for drilling given its proximity to the interpreted
trend of the Casa Beradi fault. While no significant mineralisation was discovered during the initial drill program, Chalice
remains encouraged by the extent of alteration encountered in the drilling and will continue to assess the surrounding area and
remaining two geochemical anomalies.
Ownership
The Project is 100% owned by the Company.
Past Projects
West Pilbara Gold Project, Western Australia, Australia
During the year, Chalice completed reconnaissance air-core and RC drilling programs to follow-up on gold and base metal targets
identified at the Wyloo West, Wyloo East, Ken’s Bore, Derek’s Bore, G1, B2 and Red Hill prospects. In total, 335 holes for
9,259m were drilled including 276 AC holes for 5,685m and 59 RC holes for 3,574m. While anomalous results were returned
from several of the prospects, they were not considered sufficiently encouraging to warrant follow-up exploration. Accordingly,
the Company provided notification to Red Hill Iron of its withdrawal from the farm-in and joint venture agreement in January
2018.
Latitude Hill Nickel Project, Western Australia, Australia
A 4,000m RC drilling program was completed during the year to test up to eleven separate conductor plates modelled from
ground EM surveys completed over six prospects on the Project. The results of RC drilling showed that the conductors represented
zones of strongly graphitic gneiss or metasediments hosted within either basement gneiss or dominantly metasedimentary
sequences, both of which are poorly exposed in the region. Graphitic zones are commonly associated with minor disseminated
iron sulphides, although the EM conductors are likely explained by the strong abundance of graphite.
As the results of drilling downgraded the nickel prospectivity of the Project, Chalice formally notified Traka Resources of its
withdrawal from the Latitude Hill Project farm-in and joint venture agreement in March 2018.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 14
Other interests
Nyanzaga Gold Project, Tanzania
Following Chalice’s merger with Sub-Sahara Resources NL in 2009, the Company became entitled to a payment of A$5 million
upon commercial production at the Nyanzaga Project (“Nyanzaga”) in Tanzania. During the year, OreCorp Limited (ASX: ORR)
signed a binding Heads of Agreement to advance to a 100% interest in the Project, and has spent approximately US$14 million to
date in completing a Pre-Feasibility Study.
Ausgold Resources Limited (ASX: AUC)
Chalice holds 66 million shares and 10 million unlisted share options in Ausgold that are exercisable at 3.5 cents per share before
13 September 2019, with a value of A$1.8 million as of 30 June 2018. This equates to an undiluted 10.0% interest in Ausgold
(increasing to a ~11.4% interest in the event that the consideration options are exercised) on a fully diluted basis. Chalice also
retains a 2% Net Smelter Return (“NSR”) royalty over the Dumbleyung Project, which was sold to Ausgold in September 2017.
Ausgold’s Katanning Gold Project is located 275km southeast of Perth, Western Australia where Ausgold holds a dominant ground
position of approximately 4,031km2 in a relatively under-explored greenstone belt that is prospective for Archaean gold deposits.
The Company has a Mineral Resource Estimate of 20.98Mt at 1.17g/t Au for 785,000oz Au of contained gold. Ausgold
continued exploration and resource definition activities during the year.
GeoCrystal Limited
Chalice has a 20.46% interest in unlisted diamond explorer, GeoCrystal Ltd (“GeoCrystal”). GeoCrystal has several diamond
exploration projects in northern Australia. GeoCrystal is considering its options in relation to an Initial Public Offering (IPO).
Other investments
Chalice has a minor shareholding in Navarre Minerals (ASX: NML), Kesselrun Resources (TSX-V: KES.V) and Renforth Resources
(CNSX: RFR), with a combined value of A$0.8 million as of 30 June 2018.
Financial performance
The Group reported a net loss after income tax of $15.9 million for the year compared to a restated net loss of $4.7 million for the
year ended 30 June 2017. This increase in loss is largely related to an increase in exploration and evaluation expenditure of $9.3
million and a net loss on sale of available for sale financial assets of $1.1 million compared to a net gain on sale of available for
sale financial assets of $1.8 million in the previous year, which equates to a net variance of $2.9 million. The net loss on sale
represents the net loss from the sale of the remaining 6 million shares held in TSX listed First Mining Gold Corp (previously named
First Mining Finance Corp) (“First Mining”).
Statement of cash flows
Cash and cash equivalents at 30 June 2018 were $35.7 million (30 June 2017: $46.8 million). The decrease in cash of $11.1
million is predominately due to an $9.7 million increase in payments for exploration and evaluation expenditure, income taxes
paid of $1.1 million and a reduction in proceeds received from the sale of financial assets.
In comparison to the restated 2017 financial year, net cash flows used in operating activities increased by 240% from $4.3 million
in 2017 to $14.6 million.
Net cash flows from investing activities decreased significantly during the year from a net inflow of $19.6 million in 2017 to a net
inflow of $2.8 million in 2018. This was primarily due to the majority of shares held in First Mining being sold in the 2017 finan-
cial year.
Net cash used in financing activities in the prior financial year represents the on-market share buy-back that completed in July
2017.
The effect of exchange rates on cash and cash equivalents at 30 June 2018 was a gain of $0.7 million (2017: loss of $0.4 mil-
lion). The Company held approximately US$10 million in US$ denominated bank accounts at 30 June 2018 (30 June 2017:
US$10 million) and held C$8.4 million in C$ denominated bank accounts at 30 June 2018 (30 June 2017: C$14.5 million).
Financial position
At balance date the Group had net assets of $41.6 million and an excess of current assets over current liabilities of $40.5 million.
Current assets decreased by 22.1% to $41.5 million (restated 2017: $53.3 million) mainly due to a decrease in cash on hand.
Refer to the statement of cash flows discussion above for further details regarding the movements in the 2018 cash balance.
Non-current assets increased by 20% to $1.2 million (restated 2017: $1.0 million), mainly due to the increase in fair value of the
Company’s non-current financial assets.
Current liabilities decreased by 50% to $1.0 million (2017: $2.0 million) mainly due to capital gains tax payable on the sale of
First Mining shares in relation to the 30 June 2017 financial year. Non-current liabilities decreased due to the reduction in the
deferred tax liability in the current year.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 15
Mineral Resource Statement
The Company reviews and reports its mineral resources at least annually. The date of reporting is 30 June each year, to coincide
with the Company’s end of financial year balance date. If there are any material changes to its mineral resources over the course
of the year, the Company is required to report these changes.
On 7 March 2017, the Company issued an updated mineral resource statement for the Nordeau West deposit in Canada. The
report was prepared in accordance with Canadian National Instrument 43-101 and JORC Code (2012 Edition).
In completing the annual review for the year ended 30 June 2018, the historical resource factors were reviewed and found to be
relevant and current, therefore, there are no changes to the mineral resources stated. The mineral resource estimate is summarised
below:
Table 1. Nordeau West Mineral Resource estimates
JORC Category
Indicated
Inferred
Cut-Off
(g/t Au)
Tonnes
(t)
Grade
(g/t Au)
Contained Au
(oz Au)
2.75
2.75
225,000
4.17
30,200
1,112,000
4.09
146,300
Total Indicated & Inferred
2.75
1,337,000
4.10
176,500
1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. These Mineral
Resource estimates include Inferred Mineral Resources that are considered too speculative geologically to have
economic considerations applied to them that would enable them to be categorised as mineral reserves. There is
also no certainty that these Inferred Mineral Resources will be converted to the Measured and Indicated categories
through further drilling, or into mineral reserves, once economic considerations are applied.
2.
3.
All figures are rounded to reflect the relative accuracy of the estimate and therefore numbers may not appear to add
precisely.
The independent Mineral Resource estimates for the Nordeau West deposit was prepared by MRB & Associates,
(“MRB”) of Val d’Or, Quebec and is reported and classified in accordance with the guidelines of the 2012
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code 2012)
and the Canadian National Instruments 43-101.
Governance Arrangements and Internal Controls
The Company has ensured that the mineral resources quoted are subject to good governance arrangements and internal
controls. The mineral resources reported have been based on information compiled by Mr John Langton, P.Geo., Principal,
MRB & Associates. Mr John Langton is a consultant to the company and has sufficient experience in the field of
activity being reported to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting
of Exploration Results, Mineral Resource and Ore Reserves and is a Qualified Person under National Instrument 43-101 –
‘Standards of Disclosure for Mineral Projects’. The consultant has also undertaken reviews of the quality and suitability of the
underlying information used to generate the resource estimation. In addition, Chalice’s management carries out regular reviews
and audits of internal processes and external consultants that have been engaged by the Company.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 16
Competent Person and Qualifying Person Statements
The information in this report that refers to the Pyramid Hill Gold
of this document and Chalice Gold Mines Limited (the Company) does
Project is extracted from the announcement entitled “Chalice identifies
not intend, and does not assume any obligation, to update these
two 12km+ gold-in-soil anomalies at Pyramid Hill Project, Bendigo”
forward-looking statements.
dated 17 July 2018.
Forward-looking statements
relate
to
future events or
future
The information in this annual report that relates to Mineral
performance and reflect Company management’s expectations or
Resources in relation to the East Cadillac Gold project is based
on information compiled by Mr John Langton, P.Geo., Principal,
MRB & Associates, a Competent Person who is a member of
Ordre des Géologues du Québec and the Association of
Professional Engineers and Geoscientists of New Brunswick. Mr
John Langton is a consultant to the company and has sufficient
experience in the style of mineralisation and to the activity
undertaken to qualify as a Competent Person as defined in the
2012 edition of the Australasian Code for Reporting of
beliefs regarding future events and include, but are not limited to, the
Company’s strategy, the estimation of mineral reserve and mineral
resources, the realisation of mineral resource estimates, the likelihood
of exploration success at the Company’s projects, the prospectivity of
the Company’s exploration projects, the timing of future exploration
activities on
the Company’s exploration projects, planned
expenditures and budgets and the execution thereof, the timing and
availability of drill results, potential sites for additional drilling, the
timing and amount of estimated future production, costs of production,
capital expenditures, success of mining operations, environmental
Exploration Results, Mineral Resource and Ore Reserves and is a
risks, unanticipated reclamation expenses, title disputes or claims and
Qualified Person under National Instrument 43-101 – ‘Standards
limitations on insurance coverage.
of Disclosure for Mineral Projects’. Mr Langton consents to the
inclusion in the annual report of the matters based on his
information in the form and context in which it appears.
The information in this report that refers to the East Cadillac Gold
Project is extracted from the announcement entitled “Two new gold
discoveries expand the district-scale potential of the East Cadillac
Gold Project” dated 31 May 2018.
The information in this report that refers to the Warrego North Copper-
Gold Project is extracted from the announcement entitled “Large
copper-gold target to be drilled at Warrego North Project” dated 16
July 2018.
The information in this report that refers to the Julimar Nickel-
Vanadium Project is extracted from the announcement entitled
“Chalice targets new growth front in battery metals following
acquisition of two highly prospective vanadium-nickel projects” dated
23 May 2018.
The information in this report that refers to the West Pilbara Gold and
Latitude Hill Nickel Projects is extracted from the announcement
entitled “December 2017 Quarterly Activities Report” dated 19
January 2018.
The above announcements are available to view on the Company’s
website at www.chalicegold.com. The Company confirms that it is not
aware of any new information or data that materially affects the
information included in the original market announcement and that all
material assumptions in the market announcement continue to apply
and have not materially changed. The Company confirms that the form
and context in which the Competent Person’s and Qualifying Persons
findings are presented have not been materially modified from the
original market announcements.
Forward Looking Statements
This document may contain forward-looking information within the
meaning of Canadian securities legislation and forward-looking
statements within the meaning of the United States Private Securities
Litigation Reform Act of 1995
(collectively,
forward-looking
statements). These forward-looking statements are made as of the date
In certain cases, forward-looking statements can be identified by the
use of words such as “plans”, “planning”, “expects” or “does not
expect”, “is expected”, “will”, “may”, “would”, “potential”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or
“does not anticipate”, “believes”, “occur” or “be achieved” or
variations of such words and phrases or statements that certain
actions, events or results may, could, would, might or will be taken,
occur or be achieved or the negative of these terms or comparable
terminology. By their very nature forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements.
Such factors may include, among others, risks related to actual results
of current or planned exploration activities; changes in project
parameters as plans continue to be refined; future prices of mineral
resources; possible variations in mineral resources or ore reserves,
grade or recovery rates; accidents, labour disputes and other risks of
the mining industry; the ultimate outcome for shareholders of any Class
Ruling received from the Australian Tax Office (“ATO”) in relation to
any proposed capital return, whether shareholders would vote in
favour of such a return of capital if put before them at a meeting of
the shareholders, delays in obtaining governmental approvals or
financing or in the completion of development or construction
activities; as well as those factors detailed from time to time in the
Company’s interim and annual financial statements, all of which are
filed and available for review on SEDAR at sedar.com.
Although the Company has attempted to identify important factors that
could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that forward-
looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 17
Tenement Schedules
Australia
Location
Western
Australia
Project
Yilgarn
Craton
Tenement No.
E39/1914
E39/1976
E70/4869
Registered Holder
CGM (WA) Pty Ltd
CGM (WA) Pty Ltd
CGM (WA) Pty Ltd
E77/2353 to E77/2354 CGM (WA) Pty Ltd
Nature of interest
95%
95%
95%
95% - Farm-out agreement, Ramelius
Resources Ltd has the right to earn up
to 75% interest
95%
95%
100%
100%
100%
100%
100%
100%
P37/8702 to P37/8711 CGM (WA) Pty Ltd
P39/5600 to P39/5601 CGM (WA) Pty Ltd
P37/9012 to P37/9023 CGM (WA) Pty Ltd
P37/9026
CGM (WA) Pty Ltd
P37/9028 to P37/9031 CGM (WA) Pty Ltd
E70/5118
EL006661
CGM (WA) Pty Ltd
CGM (WA) Pty Ltd
EL006737 to EL006738
CGM (WA) Pty Ltd
EL23764
EL31608
EL31610
EPM26858 to
EPM26860
EPM26863
EPM26919
CGM (WA) Pty Ltd (51%) &
Meteoric Resources NL (49%)
51% - Farm-in agreement, right to
earn up to 70% interest
CGM (WA) Pty Ltd
CGM (WA) Pty Ltd
CGM Lithium Pty Ltd
CGM Lithium Pty Ltd
CGM Lithium Pty Ltd
100%
100%
100%
100%
100%
Victoria
Northern
Territory
Julimar
Pyramid
Hill
Warrego
North
Queensland
Flinders
River
Canada
Location
Project
Claim Numbers
Registered Holder
Nature of Interest
Quebec
Kinebik
2448108 to 2448207 Chalice Gold Mines (Quebec) Inc.
2448409 to 2448497 Chalice Gold Mines (Quebec) Inc.
2449277 to 2449375 Chalice Gold Mines (Quebec) Inc.
2454112 to 2454113 Chalice Gold Mines (Quebec) Inc.
2454308 to 2454320 Chalice Gold Mines (Quebec) Inc.
2454863 to 2454867 Chalice Gold Mines (Quebec) Inc.
2466152 to 2466176 Chalice Gold Mines (Quebec) Inc.
2468010 to 2468013 Chalice Gold Mines (Quebec) Inc.
2470442 to 2470460 Chalice Gold Mines (Quebec) Inc.
2499665 to 2499668 Chalice Gold Mines (Quebec) Inc.
2514476 to 2514481 Chalice Gold Mines (Quebec) Inc.
2515283 to 2515284 Chalice Gold Mines (Quebec) Inc.
East Cadillac
2385084
Chalice Gold Mines (Quebec) Inc.
2438140 to 2438211 Chalice Gold Mines (Quebec) Inc.
2434329
Chalice Gold Mines (Quebec) Inc.
2434769 to 2434771 Chalice Gold Mines (Quebec) Inc.
2438058 to 2438067 Chalice Gold Mines (Quebec) Inc.
2438103 to 2438104 Chalice Gold Mines (Quebec) Inc.
2438130 to 2438133 Chalice Gold Mines (Quebec) Inc.
2445500 to 2445501 Chalice Gold Mines (Quebec) Inc.
2456677 to 2456680 Chalice Gold Mines (Quebec) Inc.
2456713 to 2456714 Chalice Gold Mines (Quebec) Inc.
2457365 to 2457366 Chalice Gold Mines (Quebec) Inc.
2457890 to 2457892 Chalice Gold Mines (Quebec) Inc.
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 18
Tenement Schedules
Canada (Continued)
Location Project
Claim Numbers
Registered Holder
Nature of Interest
2458268 to 2458272 Chalice Gold Mines (Quebec) Inc.
2461488 to 2461495 Chalice Gold Mines (Quebec) Inc.
2466091 to 2466092 Chalice Gold Mines (Quebec) Inc.
2468029 to 2468043 Chalice Gold Mines (Quebec) Inc.
2470586
Chalice Gold Mines (Quebec) Inc.
2471188 to 2471202 Chalice Gold Mines (Quebec) Inc.
2472374 to 2472375 Chalice Gold Mines (Quebec) Inc.
2481223 to 2481300 Chalice Gold Mines (Quebec) Inc.
2491126
Chalice Gold Mines (Quebec) Inc.
2491239 to 2491250 Chalice Gold Mines (Quebec) Inc.
2491522
2514628
2515519
Chalice Gold Mines (Quebec) Inc.
Chalice Gold Mines (Quebec) Inc.
Chalice Gold Mines (Quebec) Inc.
2437791 to 2437811 Globex Mining Enterprises Inc.
2437862 to 2437873 Globex Mining Enterprises Inc.
2437912 to 2437915 Globex Mining Enterprises Inc.
2438798 to 2438811 Chalice Gold Mines (Quebec) (40%)
Globex Mining Enterprises Inc. (60%)
2438935 to 2438937 Chalice Gold Mines (Quebec) (40%)
Globex Mining Enterprises Inc. (60%)
2437916 to 2437942 Pershimex Resources Corporation
2443200 to 2443243 Renforth Resources Inc. 100%
2480250 to 2480258 Renforth Resources Inc. 100%
2481131 to 2481222
Renforth Resources Inc. 100%
2405317 to 2405327
Renforth Resources Inc. 100%
2423153 to 2423166
Renforth Resources Inc. 100%
2462745 to 2462751
Renforth Resources Inc. 100%
2477257 to 2477258
Renforth Resources Inc. 100%
2480184 to 2480187
Renforth Resources Inc. 100%
2484903
Renforth Resources Inc. 100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0% - Option agreement to earn a
100% interest
40% - Option agreement to
acquire a further 60% interest
0% - Option agreement to earn a
70% interest
0% - Option and farm-in
agreement to earn a 80% interest
0% - Option and farm-in
agreement to earn a 80% interest
0% - Option and farm-in
agreement to earn a 80% interest
0% - Option and farm-in
agreement to earn a 80% interest
0% - Option and farm-in
agreement to earn a 80% interest
0% - Option and farm-in
agreement to earn a 80% interest
0% - Option and farm-in
agreement to earn a 80% interest
0% - Option and farm-in
agreement to earn a 80% interest
0% - Option and farm-in
agreement to earn a 80% interest
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 19
Directors’ Report
The Directors present their report together with the financial report of Chalice Gold Mines Limited (“Chalice” or “the Company”) and
its subsidiaries (together “the Group”) for the financial year ended 30 June 2018 and the independent auditor’s report thereon. The
names and details of the Company’s directors in office during the financial year and until the date of this report are as follows.
Directors were in office for the entire period unless otherwise stated.
1. DIRECTORS
Timothy (Tim) R B Goyder
Executive Chairman
Tim has considerable experience in the resource industry as an executive and investor. He
has been involved in the formation and management of a number of publicly-listed and
private companies and is currently Chairman of DevEx Resources Limited (since 2002) and
Liontown Resources Limited (since 2006) and a Director of Strike Energy Limited (since 2017),
all listed on the ASX.
Tim has been a director since 2005 (13 years) and was appointed Executive Chairman on
23 March 2018. Tim previously held the position of Managing Director.
Morgan S Ball
B.Com, CA, FFin
Lead Independent Non-executive
Director
Morgan is a Chartered Accountant with more than 26 years of Australian and international
experience in the resources, logistics and finance industries. Morgan is currently Chief
Financial Officer of ASX Listed Saracen Mineral Holdings Limited. During the past three
years, Morgan was Managing Director from 2013 to 2016, and prior to that Finance
Director (2011 to 2013) of ASX listed BC Iron Limited.
Stephen P Quin
PGeo, FGAC, FSEG, MIOM3
Independent Non-executive
Director
Morgan is Chairman of the Audit and Risk Committee and Remuneration Committee and was
appointed to the Board as an Independent Non-executive Director on 24 June 2016 (2
years). Morgan was appointed Lead Independent Non-executive Director on the resignation
of Tony Kiernan.
Stephen is a geologist with over 37 years’ experience in the mining and exploration
industry. Stephen is based in Vancouver, Canada, and has been the President & CEO of
Midas Gold Corp. and its predecessor since January 2011. Stephen was previously
President and COO of TSX listed copper producer Capstone Mining Corp. and, up until its
merger with Capstone, President and CEO of TSX listed copper producer Sherwood Copper
Corp. Prior to joining Sherwood, Stephen spent 18 years as Vice President and subsequently
Executive Vice President of TSX listed Miramar Mining Corporation, a Canadian focused
gold producer and developer. Stephen has extensive experience in the resources sector,
and in the financing, development and operation of production companies.
Stephen is a member of the Audit and Risk Committee and Remuneration Committee and has
been an Independent Non-executive Director since 2010 (8 years).
Anthony (Tony) W Kiernan
LLB
Independent Non-executive
Director (resigned 13 September
2018)
Tony, previously a practising lawyer, is a corporate advisor with extensive experience in the
administration and operation of listed public companies. He is the Chairman of Pilbara
Minerals Limited (since 2017) and Venturex Resources Limited (since 2010) both listed on
ASX. During the past three years, Tony was previously a Director of ASX listed BC Iron Limited
(2006 to 2016) and Danakali Limited (2013 to 2017).
Tony was a director of the Company from February 2007 to 13 September 2018.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 20
Directors’ Report
2. EXECUTIVES AND COMPANY SECRETARY
Alexander (Alex) C Dorsch
BEng (Hons), BFin
Chief Executive Officer
Alex is an experienced consultant, engineer and corporate advisor in the energy and
resource sectors. Prior to joining Chalice, Alex was a Specialist consultant with the global
management consultancy McKinsey & Company. Prior to this he worked for over six years
as an engineer in the oil and gas industry. Alex has a thorough understanding of corporate
strategy, business development, financial markets, project development and operations.
Alex was appointed Chief Executive Officer on 23 March 2018.
Richard is a Chartered Accountant and Chartered Secretary with over 20 years of
professional and corporate experience in the energy and resources sector in Australia and
the United Kingdom. Richard has previously worked in senior finance roles with global
energy companies including Woodside Petroleum Limited and Centrica Plc. Prior to this,
Richard was in private practice with major accounting practices. Richard is a Non-executive
Director of DevEx Resources Limited, and Chief Financial Officer of Liontown Resources
Limited, both ASX listed. Richard was appointed Joint Company Secretary on 18 September
2017 and resigned from this position on 29 June 2018.
Leanne is a Chartered Accountant and Chartered Secretary who has over 16 years of
accounting and governance experience within the mining and energy industries. Leanne
was appointed Company Secretary on 29 June 2018.
Catherine is a Chartered Accountant and Chartered Secretary who has 8 years of
professional experience and was appointed Joint Company Secretary on 18 September
2017 and resigned on 29 June 2018.
Richard K Hacker
B.Com, CA, ACIS
Chief Financial Officer
Leanne Stevens
B.Com, CA, ACIS
Company Secretary
(appointed 29 June 2018)
Catherine Huynh
B.Com, CA, ACIS
Joint Company Secretary
(resigned 29 June 2018)
3. DIRECTORS’ MEETINGS
The number of meetings of directors (including meetings of committees of directors) held during the year and the number of
meetings attended by each director were as follows:
Directors’
Meetings
Audit & Risk
Committee
Remuneration
Nomination(1)
Number of meetings held:
Number of meetings attended:
A W Kiernan
T R B Goyder
S P Quin
M S Ball
8
7
7
8
8
2
2
-
2
2
1
1
-
1
1
-
-
-
-
-
The Company has an audit and risk committee and a separate remuneration committee. The nomination committee comprises the
full membership of the board of directors and any matters to be dealt with by the nomination committee are included in board
meetings. Members acting on the committees during the year were:
Audit and Risk
M S Ball (Chairman)
A W Kiernan
S P Quin
Remuneration
A W Kiernan (Chairman)(1)
Nomination
Full Board
S P Quin
M S Ball(1)
(1)Mr A Kiernan resigned from the Board on 13 September 2018 and Mr M Ball was appointed Chairman of the Remuneration
Committee.
4. PRINCIPAL ACTIVITIES
The principal activities of the Group during the year were mineral exploration and project evaluation. There has been no significant
changes in the nature of these activities during the year.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 21
Directors’ Report
5. OPERATING AND FINANCIAL REVIEW
The directors of Chalice Gold Mines Limited present the Operating and Financial Review of the Group, prepared in accordance
with section 299A of the Corporations Act 2001 for the year ended 30 June 2018. The information provided in this review forms
part of the Directors’ Report and provides information to assist users in assessing the operations, financial position and business
strategies of the Group. Please refer to page 5 for further details.
5.1 Operational and Financial Highlights
Exploration – Australia
• Chalice secured the Pyramid Hill Gold Project, a district scale 3,080km2 land holding in the highly prospective Bendigo
region of Victoria. Four large gold-in-soil anomalies were identified overlying several regionally significant structures.
Two new prospective vanadium and nickel exploration projects secured – the Flinders River Vanadium Project and the
Julimar Nickel-Vanadium Project - giving Chalice exposure to rapidly growing commodity sectors
•
Exploration – Canada
•
The district-scale East Cadillac Gold Project was expanded to cover 27km of strike along the Larder Lake-Cadillac Fault.
A 27,600m reconnaissance diamond drilling program and regional geochemistry and geophysics programs were
completed, with three prospective mineralised gold zones discovered and five new large-scale target areas defined.
Corporate
•
Strong cash and liquid investments balance of c. A$38.3 million (~14.5c per share) at 30 June 2018, allowing Chalice
to progress exploration activities across the portfolio at scale.
• Management restructure completed to position the Company for a new period of growth.
•
Significant exploration budget of >A$5 million approved for the upcoming financial year.
6.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than the progress documented above, the state of affairs of the Company was not affected by any other significant changes
during the year.
7.
REMUNERATION REPORT – AUDITED
This report for the year ended 30 June 2018 outlines remuneration arrangements in place for directors and executives of Chalice
Gold Mines Limited in accordance with the requirements of the Corporations Act 2001 (the “Act”) and its regulations. This
information has been audited as required by section 308 (3C) of the Act.
7.1
Message from the Board
The Company’s remuneration policy is structured to ensure it is aligned to the business strategy, shareholder interests and to ensure
effective executive remuneration and retention. These objectives are designed to be achieved through the Company’s short term
and long term incentive plans which link the achievement of these objectives to the variable compensation of the Key Management
Personnel (KMP) and staff. Further details are provided in this report.
7.2
Introduction
The remuneration report details the remuneration arrangements for KMP who are defined as those individuals who have the authority
and responsibility for planning, directing and controlling the activities of the Company and the Group directly or indirectly. The
following were the KMP for the Group at any time during the year:
Executive Directors
Tim Goyder
Executive Chairman (appointed 23 March 2018, previously Managing Director)
Non-executive Directors
Anthony Kiernan
Stephen Quin
Morgan Ball
Non-executive Director (resigned 13 September 2018)
Non-executive Director
Non-executive Director
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 22
Directors’ Report
Executives
Alex Dorsch
Richard Hacker
Kevin Frost
Patrick Lengyel
Chief Executive Officer (appointed 23 March 2018)
Chief Financial Officer
General Manager – Exploration
Exploration Manager - Canada
Other than disclosed above, there were no changes in KMP after the reporting date and before the financial report was authorised
for issue.
7.3
Principles of compensation
7.3.1 Remuneration governance
Remuneration committee
The Board is responsible for ensuring Chalice’s remuneration strategy is aligned with Company performance and shareholder
interests and is equitable for participants. To assist with this, the Board has established a Remuneration Committee that consisted of
the following directors during the reporting period:
• Anthony Kiernan (Chairman) (resigned 13 September 2018)
•
Stephen Quin
• Morgan Ball
On Anthony Kiernan’s resignation from the Board, Morgan Ball has been appointed Chairman of the Remuneration Committee.
The Remuneration Committee has delegated decision-making authority for some matters related to the remuneration arrangements
for KMP, and is required to make recommendations to the Board on other matters.
Specifically, the Board approves the remuneration arrangements of the Chief Executive Officer and other executives including awards
made under the Short Term Incentive Plan (“STIP”) and Employee Long Term Incentive Plan (“ELTIP”), following recommendations
from the Remuneration Committee. The Board also sets the aggregate fee pool for Non-executive Directors (“NED”) (which is subject
to shareholder approval) and NED fee levels.
The Remuneration Committee meets through the year when appropriate. The Chief Executive Officer and Executive Chairman may
attend certain Remuneration Committee meetings by invitation, where management input is required. The KMP is not present during
any discussions related to his own remuneration arrangements.
Further information on the Remuneration Committee’s role, responsibilities and membership can be seen at www.chalicegold.com.
Use of remuneration consultants
To ensure the Remuneration Committee is fully informed when making remuneration decisions, the Remuneration Committee may
seek external advice, as it requires, on remuneration policies and practices. Remuneration consultants are able to be engaged by,
and report directly to, the Committee. In selecting remuneration consultants, the Committee would consider potential conflicts of
interest and independence from the Group’s KMP and other executives. During the financial year, the Remuneration Committee did
not seek specific advice or recommendations from external consultants.
Remuneration report approval at 2017 Annual General Meeting
The Remuneration Report for the financial year ended 30 June 2017 received positive shareholder support at the 2017 Annual
General Meeting (“AGM”) with a vote of 99.4% in favour.
7.3.2 Remuneration principles and components of remuneration
The Company has adopted the following principles in its remuneration framework:
1.
2.
Seeking aggregate remuneration at a level which provides the Company with the ability to attract and retain directors and
executives of high calibre at a cost which is acceptable to shareholders; and
KMP interest being aligned with shareholder value and Company performance by:
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 23
Directors’ Report
•
•
•
•
•
providing fair, consistent and competitive compensation and rewards to attract and retain appropriate employees;
ensuring that total remuneration is competitive with its peers by market standards;
incorporating in the remuneration framework both short (if applicable) and long term incentives linked to the strategic
goals and performance of the individuals and the Company and shareholder returns;
demonstrating a clear relationship between individual performance and remuneration; and
motivating employees to pursue and achieve the long term growth and success of the Company.
The following table is an overview of the components of remuneration:
Element
Non-executive directors
Executives
Fixed remuneration
Base salary
Base fee
Committee fees
Superannuation
Consultancy fees
Other benefits
Variable remuneration
Short term incentives (STI)
Share options
Performance rights
×
(1)
(2)
(3)
×
(4)
×
×
×
×
(3)
(1) Only applies to Australian non-executives.
(2) Some directors are paid consultancy fees on an arm’s length basis. No directors received consultancy fees during the year ended
30 June 2018 (refer below).
(3) Other benefits relates to directors and officers insurance and income protection for Executives.
(4)Non-executive directors are eligible to participate in the share option plan at the discretion of the Board subject to shareholder
approval where required (refer below for further details).
7.3.3 Non-executive director remuneration
The Company’s Constitution and the ASX Listing Rules specify that the maximum aggregate fees to be paid to non-executive directors
for their roles as directors are to be approved by shareholders at a general meeting. The latest determination was at the 2011 AGM,
whereby Shareholders approved a maximum aggregate amount of $450,000 per year (including superannuation). The Board does
not propose to seek any increase for the non-executive director pool at the upcoming 2018 Annual General Meeting.
The fee structure for non-executive directors is reviewed annually and the Remuneration Committee and the Board may consider
advice from external consultants, and undertake comparative analyses of the fees paid to non-executive directors of comparable
companies in the resources sector with similar market capitalisations.
For the 2018 financial year, a non-executive director receives a fee between $60,000 and $80,000 (inclusive of superannuation,
where applicable). Members of the Audit Committee and Remuneration Committee also receive an additional $5,000 (inclusive of
superannuation) for their roles on each of those Committees. The additional payments recognise the additional time commitment by
non-executive directors who serve on committees.
The non-executive directors are not entitled to receive retirement benefits. Non-executive directors, at the discretion of the Board,
may participate in the Employee Share Option Plan (“ESOP”), subject to approvals required by shareholders. The Board is conscious
of the issue of share options to non-executive directors and will continue to balance the cost benefit of issuing share options to attract
and retain quality directors against paying higher fixed directors’ fees.
Non-executive directors are not eligible to participate in the Company’s Long Term Incentive Plan (“LTIP”).
Apart from their duties as directors, non-executive directors may undertake additional work for the Company on a consultancy basis
on market terms. The use of consultancy by non-executive directors in addition to their duties as directors enables the Company to
utilise an individual director’s technical expertise in areas where the Company may not have in-house expertise. Under the terms of
these consultancy agreements, non-executive directors typically receive a daily rate or monthly retainer for the work performed at a
rate comparable to market rates that they would otherwise receive for their consultancy services.
The remuneration of non-executive directors for the years ended 30 June 2018 and 30 June 2017 is detailed further in this
Remuneration Report. The amounts listed under ‘Salary & Fees’ include both director fees and consultancy fees received by non-
executive directors. No consultancy fees were received by non-executive directors in the year ended 30 June 2018 (2017: $46,200).
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 24
Directors’ Report
7.3.4 Executive remuneration
Executive remuneration consists of fixed remuneration and may also comprise variable remuneration in the form of performance
based cash bonuses (Short Term Incentive Plan (“STIP”)), share options and performance rights (issued under the terms of the ESOP
and Long Term Incentive Plan (“LTIP”) respectively). The LTIP was approved by the Company’s shareholders at the 2017 AGM. The
structure of the plan is detailed below.
(a) Fixed remuneration
The level of fixed remuneration is set to provide a base level of remuneration which is both appropriate for the position and
competitive in the market. The Company aims to pay within the 50th and 75th percentile band of benchmark data, but the Board has
the discretion to pay above this to attract and retain key employees in achieving the Company’s strategic goals.
Fixed remuneration is reviewed at appropriate times (and no less than on an annual basis) by the Remuneration Committee and
approved by the Board having regard to the Company and individual performance, relevant comparable remuneration for similarly
capitalised companies in the mining industry and independently compiled market data. Executives receive their fixed remuneration
in the form of cash.
The fixed remuneration for executives is detailed further in this Report.
(b) Variable remuneration - STIP
The Board has implemented a formal STIP which includes cash bonuses to executives upon achievement of predefined targets. The
maximum bonus percentage (“MBP”) ranges between 10% and 50% of an executive’s fixed annual salary depending on the position
held and responsibilities to be undertaken. The STIP is based on achieving “Expected” and “Stretch” targets for the year. Achieving
the expected target attracts 20% of the relevant MBP and achieving the stretch target or better attracts up to 100% of the relevant
MBP.
The Board has suspended the STIP and moved 100% of eligible KMP’s incentive entitlements exclusively to the LTIP. The justification
for this is that at this stage of the Company’s development, all the key business objectives of KMP have longer dated time frames
than the STIP’s 12 month time frame. Therefore, during the financial year, no formal cash bonuses were paid to executives pursuant
to the STIP. The Board reserves the right to pay discretionary cash bonuses to employees and executives to reward individual efforts
and/or outstanding performance.
(c) Variable remuneration – employee long term incentive plan (LTIP)
Under the LTIP, the Board has the discretion to make annual awards of performance rights (which is a right to convert into ordinary
shares after achievement of applicable criteria and targets) to executives and employees. The level of the award of performance
rights is dependent on an employee’s position within the Company. Subject to the performance criteria set out in the terms of the
LTIP, performance rights held by an employee may convert into ordinary fully paid shares in the Company. In the event performance
criteria are not achieved by the measurement date, the employee’s performance rights lapse with no shares being issued.
A summary of the LTIP is set out below:
Key Design Feature
Eligibility
Award quantum
Performance conditions
Design
All full-time employees and permanent part-time employees (including executive directors and
the CEO) of the Company are eligible participants. Shareholder approval is required before
any director or related party of the Company can participate in the LTIP.
The award quantum will be determined in consideration of total remuneration of the individual,
market relativities and business affordability. The LTIP does not set out a maximum number of
shares that may be issuable to any one person, other than the 5% limit of the total number of
issued shares.
The performance conditions that must be satisfied in order for the performance rights to vest
are determined by the Board. The performance conditions may include one or more of the
following:
•
• Achievement of specific objectives by the participant and/or the Company. This
may include the achievement of share price targets, total shareholder return and
other major long term milestone targets; or
Such other performance objectives as the Board may determine.
Employment of a minimum period of time;
•
Vesting
Vesting will occur at the end of a defined period, usually three years, and upon the
achievement of the performance conditions.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 25
Directors’ Report
Key Design Feature
Term and lapse
Design
The term of the performance rights is determined by the Board in its discretion, but will
ordinarily have a three year term up to a maximum of five years. Performance Rights are
subject to lapsing if performance conditions are not met by the relevant measurement date or
expiry dates (if no other measurement date is specified) or if employment is terminated for
cause or in circumstances as described below.
Price Payable by Participant
No consideration.
Cessation of Employment
If an employee leaves the Company prior to the expiration of the relevant vesting period for
a particular award of performance rights, such performance rights would, as a general rule
lapse, except in certain limited defined situations such as disability, redundancy or death.
Annual grant of performance rights – 2018/2019
The table below outlines the performance rights granted to KMP in July 2018:
Annual Award
KMP
Number of Rights
Measurement Date
Vesting Date
2018/2019
Tim Goyder*
Alex Dorsch
Richard Hacker
Kevin Frost
Patrick Lengyel
1,290,022
1,045,931
762,514
847,738
543,973
30 June 2021
30 June 2021
30 June 2021
30 June 2021
30 June 2021
30 June 2021
30 June 2021
30 June 2021
30 June 2021
30 June 2021
*Those to Mr Goyder are subject to shareholder approval at the Company’s 2018 AGM.
The performance rights shown above will not vest (and the underlying shares will not be issued) unless the performance conditions
set by the Board have been satisfied at the measurement date. For the 2018/2019 annual grant of performance rights, the
Remuneration Committee recommended to the Board that 100% of KMP’s incentive entitlements are offered via the LTIP and that
25% of the LTIP is to be based on meeting absolute Total Shareholder Return (“TSR”), 25% based on meeting relative TSR objectives
and the remaining 50% is to be based on achieving key business objectives.
The following table outlines key business objectives and the weightings of the performance condition:
Overall
Condition
Performance
Strategic objectives
Percentage of granted
performance rights that
will vest if performance
conditions are met
50%
Specific Performance Conditions
Undertake a significant acquisition or corporate transaction:
acquire one or more assets or undertake a corporate transaction
with potential to generate an IRR of at least 20% using consensus
commodity prices and board approved cost assumptions.
AND/OR
Value generation through:
• Making a significant new discovery which shows the
potential to be economic based on consensus commodity
prices and board approved cost assumptions; or
•
•
•
substantially increasing the Company’s resource base; or
conducting economic/feasibility studies which show the
potential to generate an IRR of at least 20% using
consensus commodity prices and board approved cost
assumptions; or
the sale of an asset(s) at a significant profit.
NB: The determination as to whether the above objectives have
been met will be done by the Board of the Company in a timely
manner, acting reasonably and in good faith.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 26
Directors’ Report
Overall
Condition
Performance
Absolute TSR objectives
Percentage of granted
performance rights that
will vest if performance
conditions are met
Specific Performance Conditions
The performance conditions for performance rights issued will be
measured by comparing the Company’s share price (which to the
extent reasonable takes into account value generated through
demerger and special dividends) with an absolute share price at
the end of the financial year that is 3 years after that date (vesting
date). The performance rights will vest on a pro-rata basis as
follows:
Share price below 15% p.a. increase (equates to CHN share
price <21c in 3 years)
0%
Between 15% p.a. and 20% p.a. (21c – 24c)
At or above 20% p.a. (>24c)
Pro rata between
8.25% and 25%
25%
Relative TSR objectives
The performance conditions for performance rights issued will be
measured by comparing the Company’s TSR with that of an
appropriate comparator group of companies as determined by the
Remuneration Committee over the period from the grant of the
performance rights, to the end of the financial year that is 3 years
after that date (vesting date). The performance rights will vest
depending on the Company’s percentile ranking within the
comparator group on the relevant vesting date as follows:
Below 50th Percentile
Between 50th and 75th percentile
At or above 75th percentile
0%
Pro rata between
8.25% and 25%
25%
The test date for the performance rights are set at 30 June 2021, being approximately 3 years from the date of grant.
Annual grant of performance rights – 2017/2018
The table below outlines the performance rights granted to KMP for the 2017/2018 financial year and have not yet vested:
Annual Award
KMP
Number of Rights
Measurement Date
Vesting Date
2017/2018
Tim Goyder
Alex Dorsch
Richard Hacker
Kevin Frost
Patrick Lengyel
1,217,989
339,076
764,921
815,607
415,365
30 June 2020
30 June 2020
30 June 2020
30 June 2020
30 June 2020
30 June 2020
30 June 2020
30 June 2020
30 June 2020
30 June 2020
The performance rights shown above will not vest (and the underlying shares will not be issued) unless the performance conditions
set by the Board have been satisfied at the measurement date. For the 2017/2018 annual grant of performance rights, the
Remuneration Committee recommended to the Board that 100% of KMP’s incentive entitlements are offered via the LTIP and that
50% of the LTIP is to be based on meeting Total Shareholder Return (“TSR”) and the remaining 50% is to be based on achieving key
business objectives.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 27
Directors’ Report
The following table outlines key business objectives and the weightings of the performance condition:
Percentage of granted
performance rights that will vest
if performance conditions are
met
50%
Overall Performance
Condition
Strategic objectives
TSR objectives
Specific Performance Conditions
Undertake a significant acquisition or corporate transaction:
acquire one or more assets or undertake a corporate transaction
with potential to generate an IRR of at least 20% using consensus
commodity prices and board approved cost assumptions.
AND/OR
Value generation through:
• Making a significant new discovery which shows the
to be economic based on consensus
cost
potential
commodity prices and board approved
assumptions; or
•
Substantially increasing the Company’s resource base;
or
• Conducting economic/feasibility studies which show the
potential to generate an IRR of at least 20% using
consensus commodity prices and board approved cost
assumptions; or
•
The sale of an asset(s) at a significant profit.
NB: The determination as to whether the above objectives have
been met will be done by the Board of the Company in a timely
manner, acting reasonably and in good faith.
The performance conditions for performance rights issued will be
measured by comparing the Company’s TSR with that of an
appropriate comparator group of companies as determined by
the Remuneration Committee over the period from the grant of the
performance rights, to the end of the financial year that is 3 years
after that date (vesting date). The performance rights will vest
depending on the Company’s percentile ranking within the
comparator group on the relevant vesting date as follows:
Below 50th Percentile
0%
Between 50th and 75th percentile
Pro rata between 16.5% and
50%
At or above 75th percentile
50%
The test date for the performance rights are set at 30 June 2020, being approximately 3 years from the date of grant.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 28
Directors’ Report
Annual grant of performance rights - 2016/2017
The table below outlines the performance rights granted to KMP for the 2016/2017 financial year and have not yet vested:
Annual Award
KMP
Number of Rights
Measurement Date
Vesting Date
2016/2017
Tim Goyder
1,200,738
Richard Hacker
754,087
Kevin Frost
804,058
Patrick Lengyel
389,594
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
The performance rights shown above will not vest (and the underlying shares will not be issued) unless the performance conditions
set by the Board have been satisfied. For the 2016/2017 annual grant of performance rights, the Remuneration Committee
recommended to the Board that 100% of KMP’s incentive entitlements are offered via the LTIP and that 50% of the LTIP is to be based
on meeting Total Shareholder Return (“TSR”) and the remaining 50% is to be based on achieving key business objectives.
The following table outlines key business objectives and the weightings of the performance condition:
Percentage of granted
performance rights that will vest
if performance conditions are
met
50%
Overall Performance
Condition
Strategic objectives
Specific Performance Conditions
Undertake a significant acquisition or corporate transaction:
acquire one or more assets or undertake a corporate transaction
with potential to generate an IRR of at least 20% using consensus
commodity prices and board approved cost assumptions.
AND/OR
Value generation through:
• Making a significant new discovery which shows the
to be economic based on consensus
cost
potential
commodity prices and board approved
assumptions; or
•
Substantially increasing the Company’s resource base;
or
• Conducting economic/feasibility studies which show the
potential to generate an IRR of at least 20% using
consensus commodity prices and board approved cost
assumptions; or
•
The sale of an asset(s) at a significant profit.
NB: The determination as to whether the above objectives have
been met will be done by the Board of the Company in a timely
manner, acting reasonably and in good faith.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 29
Directors’ Report
Overall Performance
Condition
TSR objectives
Specific Performance Conditions
The performance conditions for performance rights issued will be
measured by comparing the Company’s TSR with that of an
appropriate comparator group of companies as determined by
the Remuneration Committee over the period from the grant of the
performance rights, to the end of the financial year that is 3 years
after that date (vesting date). The performance rights will vest
depending on the Company’s percentile ranking within the
comparator group on the relevant vesting date as follows:
Percentage of granted
performance rights that will vest
if performance conditions are
met
Below 50th Percentile
0%
Between 50th and 75th percentile
Pro rata between 16.5% and
50%
At or above 75th percentile
50%
The test date for the performance rights are set at 30 June 2019, being 3 years from the date of grant.
(d) Variable remuneration – share option plan
Equity grants to executives have previously been delivered in the form of employee share options under the Company’s Employee
Share Option Plan which was last approved by shareholders in 2016. Options are issued at an exercise price determined by the
Board at the time of issue.
Generally, no performance hurdles were set on options issued to executives. The Company considered that as options were issued
at a price in excess of the Company’s current share price (at the date of issue of those options), there was an inherent performance
hurdle as the share price of the Company’s shares had to increase before any reward could accrue to the executive.
The vesting period for share options is at the discretion of the Board and the expiry date of share options is usually between 3 and
5 years.
Upon cessation of employment, participants have 3 months from the date of cessation to exercise the share options. This requirement
may be waived at the Board’s discretion.
Generally, it is the Board’s preference to issue performance rights under the LTIP to KMP rather than share options, however in the
current year 4,000,000 unlisted options were issued to Mr A Dorsch under the Company’s share option plan as part of a sign on
incentive for his appointment to CEO.
7.3.5 Link between performance and executive remuneration
The focus of executive remuneration over the financial year was fixed remuneration and performance rights under the LTIP (i.e.
growing the value of the Company as reflected through share price) which seeks to ensure that executive remuneration is
appropriately aligned with the business strategy and shareholder interests.
The share price performance over the last 5 years, is as follows:
Share price
$0.15
$0.11
$0.18
$0.15
$0.14
30 June 2014
30 June 2015
30 June 2016
30 June 2017
30 June 2018
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 30
7.4
Key management personnel remuneration
Key Management
Personnel
Directors
T R B Goyder (1)
A W Kiernan (2)
S P Quin
M S Ball
Executives
A C Dorsch (1)
R K Hacker
K M Frost
P Lengyel
Total Compensation
Short-term benefits
Post-employment
Salary & fees
$
Non-monetary
benefits
$
Other
$
Superannuation
benefits
$
Share-based
payments
Long Term
Incentives (3)
$
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
369,951
356,164
82,191
128,391
70,000
70,000
63,927
63,926
179,210
-
285,847
279,357
266,561
264,999
193,060
189,905
1,510,747
1,352,742
5,460
3,930
3,849
1,781
7,608
5,618
3,849
1,781
1,139
-
5,919
3,601
-
1,781
12,325
8,690
40,149
27,182
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,049
33,836
7,808
7,808
-
-
6,073
6,073
13,285
-
20,049
26,539
23,614
25,175
-
-
90,878
99,431
102,464
94,129
-
16,811
-
16,811
-
14,664
119,911
-
76,489
69,949
81,558
43,657
40,409
35,554
420,831
291,575
Termination benefits
Total
Proportion of
remuneration
performance
related
$
$
%
D
i
r
e
c
t
o
r
s
’
R
e
p
o
r
t
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
497,924
488,059
93,848
154,791
77,608
92,429
73,849
86,444
313,545
-
388,304
379,446
371,733
335,612
245,794
234,149
- 2,062,605
- 1,770,930
21
19
-
11
-
18
-
17
38
-
20
18
22
13
16
15
-
-
(1)On 23 March 2018, Mr Dorsch was appointed Chief Executive Officer and Mr Goyder was appointed Executive Chairman. Prior to this date, Mr Goyder held the role of Managing
Director. In August 2018, Mr Goyder’s salary and fees were reduced to $250,000 per annum (exclusive of superannuation) to take into account the change in his role from Managing
Director to Executive Chairman. Refer to section 7.6 for further details of Mr Goyder’s executive contract terms and conditions.
(2)Includes the consulting services of Mr Kiernan during the course of the financial year. No consulting services were charged to the Company during 2018 (2017: $46,200). Amounts
were billed based on normal market rates for such services and were due and payable under normal payment terms.
(3)The fair value of the options is calculated at the date of grant using a Black-Scholes Option-pricing model and allocated to each reporting period evenly over the period from grant date
to vesting date. The value disclosed is the portion of the fair value of the options allocated to this reporting period. The fair value of the performance rights is calculated at the date of grant
using a binomial option-pricing model. In valuing the options and performance rights, market based vesting conditions have been taken into account.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 31
C
H
A
L
I
C
E
G
O
L
D
M
N
E
S
|
A
N
N
U
A
L
I
R
E
P
O
R
T
2
0
1
8
|
P
A
G
E
3
2
Directors’ Report
7.5
Equity instruments
7.5.1 Employee share options
During the reporting period 4,000,000 options were granted to KMP as per the below table. No further options over ordinary shares
in the Group were granted or vested as compensation to KMP.
Number of
options
granted during
2018
Grant date
Fair value
of options
at grant
date (A)
$
Weighted
average
Fair value
per option
$
Exercise
Price
$
Number of
options vested
during 2018
Expiry date
Executives
A C Dorsch
2,000,000
2,000,000
23 March 2018
23 March 2018
0.20
0.22
105,118 0.053
0.048
96,714
31 March 2021
31 March 2021
666,666
666,666
(A) The value of the options granted in the year is the fair value of options calculated at grant date using a black scholes option pricing
model. The total value of the options granted is included in the table above. This amount is allocated to remuneration over the vesting
period.
During the reporting period, no shares were issued on the exercise of share options granted as compensation and no options granted
as compensation in the current and/or prior year were forfeited/lapsed.
7.5.2 Employee long term incentive plan - performance rights
During the reporting period the following performance rights were granted as compensation to KMP and details of performance rights
that vested during the reporting period are as follows:
Number of
rights granted
during 2018
Grant date
Fair value of
rights at grant
date (A)
$
Weighted
average Fair
value per right
$
Number of
rights vested
during 2018
Expiry date
Directors
T R B Goyder
Executives
A C Dorsch
R K Hacker
K M Frost
P Lengyel
1,217,989
29 November 2017
186,961
0.15
30 June 2021
339,076
764,921
815,607
415,365
9 November 2017
28 July 2017
28 July 2017
28 July 2017
59,847
107,089
114,185
58,151
0.18
0.14
0.14
0.14
30 June 2021
30 June 2021
30 June 2021
30 June 2021
-
-
-
-
-
(A) The value of performance rights granted in the year is the fair value of performance rights calculated at grant date using a binomial
option-pricing model. The total value of the performance rights granted is included in the table above. This amount is allocated to
remuneration over the vesting period.
The above performance rights were issued at no cost and expire on the earlier of their date or termination of the KMP’s employment.
During the reporting period, no shares were issued on the exercise of performance rights granted as compensation. Refer below.
Details of the vesting profile of performance rights granted as remuneration to each KMP of the Group are outlined below.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 32
Directors’ Report
Number of
rights
Grant date
% vested in
year
% forfeited in
year
Measurement Date
Directors
T R B Goyder
Executives
A C Dorsch
R K Hacker
K M Frost
P Lengyel
1,664,707
1,200,738
1,217,989
25 November 2015
22 November 2016
29 November 2017
339,076
1,306,837
754,087
764,921
804,058
815,607
648,809
389,594
415,365
9 November 2017
25 June 2015
15 July 2016
28 July 2017
15 July 2016
28 July 2017
25 June 2015
15 July 2016
28 July 2017
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June 2018
30 June 2019
30 June 2020
30 June 2020
30 June 2018
30 June 2019
30 June 2020
30 June 2019
30 June 2020
30 June 2018
30 June 2019
30 June 2020
During the reporting period, no performance rights over ordinary shares held by KMP were forfeited/lapsed.
7.5.3 Equity holdings of key management personnel
Option holdings and performance rights of key management personnel
The movement during the reporting period in the number of options and performance rights over ordinary shares in the Group held,
directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:
Equity Type
Held at
1 July 2017
Granted as
compensation
Performance Rights
Options
Options
Options
Performance Rights
Options
Performance Rights
Performance Rights
Performance Rights
2,865,445
500,000
500,000
500,000
-
-
2,060,924
804,058
1,038,403
1,217,989
-
-
-
339,076
4,000,00
764,921
815,607
415,365
Directors
T Goyder
A W Kiernan
S P Quin
M S Ball
Executives
A C Dorsch
R K Hacker
K M Frost
P Lengyel
Exercised
/
Forfeited
Held at
30 June
2018
Vested
during the
year
Vested and
exercisable
at 30 June
2018
-
-
-
-
-
-
-
-
-
4,083,434
500,000
500,000
500,000
-
-
-
-
-
500,000
500,000
500,000
-
339,076
-
4,000,000 1,333,332 1,333,332
-
2,825,845
-
1,619,665
-
1,453,768
-
-
-
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 33
Directors’ Report
Shareholdings of key management personnel
The movement during the reporting period in the number of ordinary shares in the Group held, directly, indirectly or beneficially, by
each KMP, including their related parties, is as follows:
Held at
1 July 2017
Additions
44,827,765
1,902,040
26,321
-
1,147,444
250,000
-
30,000
-
132,000
-
-
-
-
-
-
Received on
exercise of
Options/
Performance
rights
Sales
30 June 2018
Held at
-
-
-
-
-
-
-
-
-
-
-
-
-
(82,000)
-
-
45,975,209
2,152,040
26,321
30,000
-
50,000
-
-
Directors
T R B Goyder
A W Kiernan
S P Quin
M B Ball
Executives
A C Dorsch
R K Hacker
K M Frost
P Lengyel
7.5.4 Other transactions with key management personnel and their related parties
A number of KMP, or their related parties, hold positions in other entities that result in them having control or significant influence over
the financial or operating policies of those entities.
A number of these entities transacted with the Group in the reporting period. The terms and conditions of the transactions with KMP or
their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar
transactions to non-director related entities on an arm’s length basis.
The aggregate expense/(income) recognised during the year relating to KMP or their related parties was as follows:
KMP
Transaction
Note
A W Kiernan
Other related parties
Liontown Resources Limited
DevEx Resources Limited
PhosEnergy Limited
Consulting services
Corporate services
Corporate services
Corporate services
(i)
(ii)
(ii)
(ii)
2018
$
2017
$
-
46,200
(88,000)
(68,000)
(21,600)
(66,000)
(96,814)
(21,600)
(i)
(ii)
For the 2018 financial year, the Group did not incur any fees from Mr Kiernan for his consulting services. Prior year amounts
were billed based on normal market rates for such services and were due and payable under normal payment terms.
The Group supplied corporate services such as accounting and company secretarial services under a Corporate Services
Agreement to Liontown Resources Limited (“LTR”), DevEx Resources Limited (“DEV”) and PhosEnergy Limited (“PEL”) and
geological services of KMP. Mr Goyder is a director of LTR, DEV and PEL and Mr Kiernan is Chairman of PEL. Amounts were
billed on a proportionate share of the cost to the Group of providing the services and are due and payable under normal
payment terms.
Amounts outstanding (to)/from the above related parties at reporting date arising from these transactions were as follows:
Assets and liabilities arising from the above transactions
Current payables
Trade debtors
7.6
Executive contracts
2018
$
-
29,600
29,600
2017
$
-
21,048
21,048
Remuneration arrangements for KMP are formalised in employment agreements. Details of these contracts are provided below.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 34
Directors’ Report
Executive Chairman
The Executive Chairman, Mr Tim Goyder, is employed under an ongoing contract which can be terminated with notice by either the
Group or the Executive Chairman.
Under the terms of the present contract, as disclosed to the ASX on 30 August 2018:
•
•
•
The Executive Chairman receives fixed remuneration of $273,750 per annum (inclusive of superannuation).
The Executive Chairman may participate in incentive plans that are in place from time to time subject to the Board’s discretion
and any shareholder approvals required.
The Executive Chairman’s termination provisions are as follows:
Resignation
Termination for cause
Termination in cases of death, disablement, redundancy or
notice without cause
Diminution of responsibility
Chief Executive Officer
Notice Period
Payment in lieu of notice
3 months
None
3 months
12 months
3 months
None
3 months
N/A
The Chief Executive Officer (“CEO”), Mr Alex Dorsch, is employed under an ongoing contract which can be terminated with notice by
either the Group or the CEO.
Under the terms of the present contract, as disclosed to the ASX in March 2018:
•
•
•
The CEO receives fixed remuneration of $320,000 per annum (inclusive of superannuation).
The CEO is entitled to participate in both the Employee Share Option Plan and LTIP as determined by the Board.
The CEO’s termination provisions are as follows:
Resignation
Termination for cause
Termination in cases of death, disablement, redundancy or
notice without cause
Diminution of responsibility
Notice Period
Payment in lieu of notice
3 months
None
3 months
6 months
3 months
None
3 months
N/A
•
The Company has the discretion to impose a restraint (non-compete) period of up to a maximum of 12 months following
cessation of employment.
Other Executives
Other Executives are employed on individual ongoing contracts that set out the terms of their employment. The following table outlines
the termination provisions contained within those employment agreements held by other KMP:
Resignation
Termination for cause
Termination in cases of death, disablement, redundancy or
notice without cause
Diminution of responsibility
* Mr Hacker only
Notice Period
Payment in lieu of notice
3 months
None
3 months
6 months*
3 months
None
3 months
N/A
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 35
Directors’ Report
8.
DIVIDENDS
No dividends were declared or paid during the year and the directors recommend that no dividend be paid.
9.
LIKELY DEVELOPMENTS
There are no likely developments that will impact on the Company other than as disclosed elsewhere in this report.
10.
SIGNIFICANT EVENTS AFTER BALANCE DATE
On 5 July 2018, the Company issued 2,357,840 fully paid ordinary shares to KMP and employees following the partial vesting of
performance rights granted in 2015 and in accordance with the Company’s LTIP. In addition, on 26 July 2018 the Board resolved to
issue a total of 6,301,804 performance rights to directors (subject to shareholder approval), executives and employees under the terms
and conditions of the Company’s long term incentive plan. Please refer to section 7.3.4 (c) of the Remuneration Report for further details
in relation to the performance rights issued subsequent to balance date.
On 10 September 2018, the Company issued 3,000,000 fully paid ordinary shares in consideration for the acquisition of the remaining
30% interest in its joint venture property within the East Cadillac Gold Project with Monarques Gold Corporation (TSX-V: MQR).
11.
DIRECTORS’ INTERESTS
The relevant interest of each director in the shares, rights or options over such instruments issued by Chalice and other related bodies
corporate, as notified by the directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date of this report
is as follows:
T R B Goyder
S P Quin
M B Ball
12.
SHARE OPTIONS AND PERFORMANCE RIGHTS
Unissued shares under option
Ordinary shares
45,975,209
26,321
30,000
Options over
ordinary
shares
-
500,000
500,000
Performance
rights
2,418,727
-
-
At the date of this report 5,500,000 unissued ordinary shares (5,500,000 at reporting date) of the Company are under option on the
following terms and conditions:
Expiry date
30 November 2019
30 June 2019
31 March 2021
31 March 2021
Exercise price ($)
0.25
0.25
0.20
0.22
Number of options
1,000,000
500,000
2,000,000
2,000,000
Unless exercised, these options do not entitle the holder to participate in any share issue of Chalice or any other body corporate.
Performance rights
At the date of this report 13,453,138 performance rights (12,092,639 at reporting date) have been issued on the following terms and
conditions:
Exercise price ($)
Nil
Nil
Nil
Number of rights
3,472,190
4,550,895
5,430,053
Expiry date
30 June 2020
30 June 2021
30 June 2022
In addition to the above, the Board has resolved, subject to shareholder approval at the Company’s 2018 AGM to grant Mr Goyder
1,290,022 performance rights, in accordance with the terms and conditions of the Company’s LTIP, and with the same performance
conditions as those granted to KMP (refer to the above section 7.3.4).
Shares issued on exercise of options or performance rights
No shares were issued during or since the end of the year as a result of the exercise of options.
On 5 July 2018, the Company issued 2,357,840 fully paid ordinary shares to KMP and employees following the partial vesting of
performance rights granted in 2015 and in accordance with the Company’s LTIP.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 36
Directors’ Report
13.
ENVIRONMENTAL LEGISLATION
The Group is subject to environmental legislation and obligations within the jurisdictions in which it operates, which during the period
has been primarily Canada and Australia.
There have been no significant known breaches of any environmental regulations to which it is subject.
14.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the
Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.
15.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
Chalice has agreed to indemnify all the directors and officers who have held office during the year, against all liabilities to another
person (other than Chalice or a related body corporate) that may arise from their position as directors and officers of Chalice, except
where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that Chalice will meet the full amount
of any such liabilities, including costs and expenses.
During the year the Group paid insurance premiums of $28,010, in respect of directors and officers indemnity insurance contracts, for
current and former directors and officers. The insurance premiums relate to:
•
•
costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever their
outcome; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or improper
use of information or position to gain a personal advantage.
The amount of insurance paid is included in KMP remuneration in section 7.4 of the Remuneration Report.
16. NON-AUDIT SERVICES
During the year HLB Mann Judd, the Company’s auditors did not provide services in addition to their statutory duties.
17. AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is set out on page 39 and forms part of the Directors’ Report for the year ended 30 June 2018.
This Report is made in accordance with a resolution of the Directors:
Tim Goyder
Executive Chairman
Dated at Perth the 19th day of September 2018
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 37
Corporate Governance Statement
Chalice Gold Mines Limited ACN 116 648 956 (Company) has established a corporate governance framework, the key features
of which are set out in its Corporate Governance statement which can be found on the Company’s website at www.chalicegold.com,
under the section marked “Governance”.
In establishing its corporate governance framework, the Company has referred to the recommendations set out in the ASX Corporate
Governance Council's Corporate Governance Principles and Recommendations 3rd edition (Principles & Recommendations). The
Company has followed each recommendation where the Board has considered the recommendation to be an appropriate
benchmark for its corporate governance practices. Where the Company's corporate governance practices follow a
recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance
with the "if not, why not" reporting regime, where, after due consideration, the Company's corporate governance practices do not
follow a recommendation, the Board has explained it reasons for not following the recommendation and disclosed what, if any,
alternative practices the Company has adopted instead of those in the recommendation.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 38
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Chalice Gold Mines Limited for the
year ended 30 June 2018, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(a)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
Lucio Di Giallonardo
19 September 2018
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a world-wide organisation of accounting firms and business advisers
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 39
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2018
Note
2018
$
Restated 2017*
$
Continuing operations
Revenue
Net gain/(loss) on sale of available for sale financial assets
Net gain on sale of exploration and evaluation assets
Foreign exchange loss
Share of net loss of associates
Impairment of investment in associate
Impairment of financial assets
Exploration and evaluation expenditure
Corporate administrative expenses
Business development and project acquisition costs
Share based payments
Depreciation and amortisation expense
Loss from deconsolidation of subsidiaries
Loss before tax from continuing operations
Income tax benefit
Loss for the year from continuing operations
5(a)
5(b)
5(c)
14
14
6(d)
7
6(a)
6(c)
16
23
8
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss
Foreign exchange on deconsolidation of subsidiaries
Net change in fair value of available for sale investments
Exchanges differences on translation of foreign operations
Other comprehensive income for the year
762,843
(1,080,026)
489,647
(400,585)
(148,828)
-
(20,729)
(12,636,539)
(1,950,721)
(739,724)
(482,991)
(76,557)
(2,474,433)
(18,758,643)
2,809,452
(15,949,191)
2,529,571
1,150,268
1,303,882
4,983,721
429,478
1,834,027
1,270,754
(974,148)
(94,084)
(390,082)
(530,136)
(3,352,886)
(1,676,740)
(1,279,290)
(329,119)
(50,227)
-
(5,142,453)
461,131
(4,681,322)
-
96,803
(495,100)
(398,297)
Total comprehensive loss for the year
(10,965,470)
(5,079,619)
Total comprehensive loss for the year attributable to owners
of the parent
(10,965,470)
(5,079,619)
Basic and diluted loss per share from continuing operations
9
(0.06)
(0.02)
*The 30 June 2017 statement of comprehensive income has been restated pursuant to the Company’s voluntary change in
accounting policy for exploration and evaluation expenditure (refer to note 3(a)).
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 40
Consolidated Statement of Financial Position
As at 30 June 2018
Note
2018
$
Restated 2017*
$
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Income tax receivable
Total current assets
Non-current assets
Financial assets
Investment accounted for using the equity method
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Income tax payable
Employee benefits
Total current liabilities
Non-current liabilities
Other
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained earnings
Reserves
Total equity
10
11
12
8
12
14
13
17
8
15
18
8
35,739,484
619,930
2,646,670
2,497,597
41,503,681
46,819,151
315,798
5,807,628
388,378
53,330,955
Restated 1 July
2016*
$
35,733,786
209,932
25,421,978
-
61,365,696
375,111
435,339
378,372
1,188,822
224,968
484,167
308,600
1,017,735
202,908
968,333
274,733
1,445,974
42,692,503
54,348,690
62,811,670
500,684
259,951
256,657
1,017,292
503,071
1,327,050
191,021
2,021,142
557,608
127,614
59,489
744,711
42,303
-
42,303
39,170
172,868
212,038
46,591
1,367,635
1,414,226
1,059,595
41,632,908
2,233,180
52,115,510
2,158,937
60,652,733
19
20(a)
20(b)
39,836,041
956,081
840,786
41,632,908
39,836,164
16,890,681
(4,611,335)
52,115,510
43,622,887
21,572,003
(4,542,157)
60,652,733
*The 30 June 2017 statement of financial position has been restated pursuant to the Company’s voluntary change in accounting
policy for exploration and evaluation expenditure (refer to note 3(a)).
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 41
F
o
r
t
h
e
y
e
a
r
e
n
d
e
d
3
0
J
u
n
e
2
0
1
8
C
o
n
s
o
l
i
d
a
e
d
t
t
S
a
t
e
m
e
n
t
o
f
C
h
a
n
g
e
s
i
n
E
q
u
i
t
y
Restated Balance at 1 July 2017
Loss for the year
Net change in fair value of available for sale
financial assets
Exchange differences on deconsolidation of
subsidiaries
Exchange differences on translation of foreign
operations
Total comprehensive income/(loss) for the year
Share buy-back
Share based payments
Transfers between equity items
Issued capital
$
Retained earnings
$
39,836,164
-
16,890,681
(15,949,191)
Share based
payments
reserve
$
508,678
-
Investment
revaluation
reserve
$
Foreign currency
translation reserve
$
Total
$
(906,696)
-
(4,213,317)
-
52,115,510
(15,949,191)
-
-
-
-
(123)
-
-
-
-
-
-
-
-
(15,949,191)
-
-
14,591
956,081
-
-
482,991
(14,591)
977,078
1,150,268
-
1,150,268
-
-
1,150,268
-
-
-
243,572
2,529,571
2,529,571
1,303,882
3,833,453
-
-
-
1,303,882
(10,965,470)
(123)
482,991
-
(379,864)
41,632,908
Balance at 30 June 2018
39,836,041
The above statement of changes in equity should be read in conjunction with the accompanying notes.
C
H
A
L
I
C
E
G
O
L
D
M
N
E
S
|
A
N
N
U
A
L
I
R
E
P
O
R
T
2
0
1
8
|
P
A
G
E
4
2
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 42
Issued capital
$
Retained earnings
$
Balance at 1 July 2016
Retrospective adjustment for change in accounting policy
Restated balance at 1 July 2016
43,622,887
-
43,622,887
Loss for the year
Net change in fair value of available for sale investments
Exchange differences on translation of foreign
operations
Total comprehensive income/(loss) for the year
Share based payments
Share buy-back
Restated Balance at 30 June 2017*
-
-
-
-
-
(3,786,723)
39,836,164
22,388,512
(816,509)
21,572,003
(4,681,322)
-
-
Share based
payments
reserve
$
179,559
-
Investment
revaluation
reserve
$
(1,003,499)
-
179,559
(1,003,499)
Foreign currency
translation reserve
$
(3,718,039)
(178)
(3,718,217)
Total
$
61,469,420
(816,687)
60,652,733
-
-
-
-
96,803
-
96,803
-
-
-
-
(4,681,322)
96,803
(495,100)
(495,100)
-
-
(495,100)
(5,079,619)
329,119
(3,786,723)
52,115,510
(4,681,322)
-
-
329,119
-
-
16,890,681
508,678
(906,695)
(4,213,317)
F
o
r
t
h
e
y
e
a
r
e
n
d
e
d
3
0
J
u
n
e
2
0
1
8
C
o
n
s
o
l
i
d
a
e
d
t
t
S
a
t
e
m
e
n
t
o
f
C
h
a
n
g
e
s
i
n
E
q
u
i
t
y
*The 1 July 2016 statement of changes in equity has been restated pursuant to the Company’s voluntary change in accounting policy for exploration and evaluation expenditure
(refer to note 3(a)).
The above statement of changes in equity should be read in conjunction with the accompanying notes.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 43
C
H
A
L
I
C
E
G
O
L
D
M
N
E
S
|
A
N
N
U
A
L
I
R
E
P
O
R
T
2
0
1
8
|
P
A
G
E
4
3
Consolidated Statement of Cash Flows
For the year ended 30 June 2018
Cash flows from operating activities
Cash receipts from operations
Cash paid to suppliers and employees
Payments for mining exploration and evaluation
Income tax paid
Exploration tax credits
Interest received
Note
2018
$
Restated 2017*
$
190,312
(1,898,587)
(12,847,286)
(1,077,222)
453,270
563,447
148,100
(1,640,074)
(3,138,635)
(52,856)
171,523
240,457
Net cash used in operating activities
10
(14,616,066)
(4,271,485)
Cash flows from investing activities
Payments associated with the sale of the Cameron Gold Project
Payments for business development activities
Acquisition of property, plant and equipment
Proceeds from sale of exploration and evaluation assets
Proceeds from sale of fixed assets
Proceeds from sale of financial assets
Payment for acquisition of financial assets
Net cash from investing activities
Cash flows from financing activities
Security deposits
Share buy-back
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at 30 June
10
-
(635,423)
(261,225)
-
-
4,889,431
(1,168,931)
2,823,852
(8,871)
(123)
(8,994)
(11,801,208)
46,819,151
721,541
35,739,484
(175,509)
(1,367,019)
(85,151)
25,249
8,083
27,070,584
(5,835,169)
19,641,068
(20,887)
(3,786,723)
(3,807,610)
11,561,973
35,733,786
(476,608)
46,819,151
*The 30 June 2017 statement of cash flows has been restated pursuant to the Company’s voluntary change in accounting policy
for exploration and evaluation expenditure (refer to note 3(a)).
The above statement of cash flows should be read in conjunction with the accompanying notes.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 44
Contents of the Notes to the Financial Statements
BASIS OF PREPARATION
Note 1:
Note 2:
Note 3:
Corporate information
Reporting entity
Basis of preparation
PERFORMANCE FOR THE YEAR
Segment reporting
Note 4:
Revenue
Note 5:
Expenses
Note 6:
Exploration and evaluation expenses
Note 7:
Income tax
Note 8:
Loss per share
Note 9:
ASSETS
Note 10:
Note 11:
Note 12:
Note 13:
Note 14:
Cash and cash equivalents
Trade and other receivables
Financial assets
Property, plant and equipment
Investment in associate
EMPLOYEE BENEFITS
Note 15:
Note 16:
Employee benefits
Share based payments
LIABILITIES AND EQUITY
Note 17:
Note 18:
Note 19:
Note 20:
Trade and other payables
Other liabilities
Issued capital
Retained earnings and reserves
FINANCIAL INSTRUMENTS
Note 21:
Financial instruments
GROUP COMPOSITION
Parent entity
Note 22:
List of subsidiaries
Note 23:
OTHER INFORMATION
Note 24:
Note 25:
Note 26:
Note 27:
Auditors’ remuneration
Related parties
Commitments and contingencies
Events subsequent to reporting date
ACCOUNTING POLICIES
Note 28:
Note 29:
Changes in accounting policies
Adoption of new and revised accounting standards
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 45
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
BASIS OF PREPARATION
This Section of the financial report sets out the Group’s (being Chalice Gold Mines Limited and its controlled entities) accounting
policies that relate to the Financial Statements as a whole. Where the accounting policy is specific to one Note, the policy is
described in the Note to which it relates.
The Notes include information which is required to understand the Financial Statements and is material and relevant to the operations
and the financial position and performance of the Group.
Information is considered relevant and material if:
•
•
•
•
The amount is significant due to its size or nature
The amount is important in understanding the results of the Group
It helps to explain the impact of significant changes in the Group’s business
It relates to an aspect of the Group’s operations that is important to its future performance.
1. Corporate information
The consolidated financial report of Chalice Gold Mines Limited for the year ended 30 June 2018 was authorised for issue in
accordance with a resolution of Directors on 19 September 2018.
Chalice Gold Mines Limited is a dual listed Australian Securities Exchange (“ASX”) and Toronto Stock Exchange (“TSX”) listed public
company domiciled in Australia at Level 2, 1292 Hay Street, West Perth, Western Australia. The nature of the operations and
principal activities are disclosed in the Directors’ Report.
2. Reporting entity
The consolidated financial report comprises the financial statements of Chalice Gold Mines Limited (“Company” or “Parent”) and its
subsidiaries (“the Group”) for the year ended 30 June 2018. A list of the Group’s subsidiaries is provided at note 23.
3. Basis of preparation
The financial report is a general purpose financial report which has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board. The financial report also complies with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
The financial report has been prepared on a historical cost basis, except for available-for-sale investments, which have been
measured at fair value. Cost is based on the fair values of the consideration given in exchange for assets. Chalice is domiciled in
Australia and all amounts are presented in Australian dollars, unless otherwise indicated.
The consolidated financial statements provide comparative information in respect of the previous period. In addition, the Group
presents an additional statement of financial position at the beginning of the earliest period presented when there is a retrospective
application of an accounting policy, a retrospective restatement, or a reclassification of items in financial statements.
(a) Voluntary change in accounting policy – exploration and evaluation expenditure
The consolidated financial statements for the year ended 30 June 2018 has been prepared on the basis of retrospective application
of a voluntary change in accounting policy relating to exploration and evaluation expenditure. In previous financial reporting
periods, the costs incurred in connection with exploration of areas with current rights of tenure were capitalised in the Statement of
Financial Position. The criteria for carrying forward the costs were:
•
•
Such costs were expected to be recovered through successful development and exploitation of the area of interest or
alternatively by its sale; and
Exploration and/or evaluation activities were continuing in the area of interest and had not yet reached a stage which
permitted a reasonable assessment of the existence or otherwise of economically recoverable resources, and active
and significant operations in, or in relation to, the area continuing.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 46
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Costs carried forward in respect of an area of interest that was abandoned were written off in the year in which the decision to
abandon was made.
The new accounting policy was adopted as of 1 July 2017 and has been applied retrospectively. Under the new policy exploration
and evaluation expenditure including the cost of acquisition is expensed to the Statement of Comprehensive Income in the year when
it is incurred.
Directors are of the opinion that the change in accounting policy provides users with more relevant and no less reliable financial
information as the policy is more transparent and less subjective. Both the previous and new accounting policies are compliant with
AASB 6 Exploration for and Evaluation of Mineral Resources.
The impact of this change in accounting policy is reflected below:
The capitalised exploration and evaluation asset previously reported at 30 June 2017 has decreased by $3,245,539 (2016:
decreased by $296,609) and assets held for sale has decreased by $66,111 (2016: decreased by $520,078). Retained earnings
has decreased by $3,215,985 (2016: decreased by $816,509). Net loss after tax previously reported at 30 June 2017 has
increased by $2,399,476 and restated as $4,681,322.
Basic and diluted loss per share has also been restated. The amount of the impact for the new result for the year ended 30 June
2017 of the change in accounting policy is stated as follows:
Loss per share attributable to owners of the parent:
Basic loss per share
Diluted loss per share
30 June 2017
(0.02)
(0.02)
Exploration and evaluation expenditure that is expensed is included as part of cash flows from operating activities, whereas
previously capitalised exploration and evaluation expenditure was included as part of cash flows from investing activities. As a
result, for the year ended 30 June 2017, net cash used in operating activities has increased from $1,132,850 to $4,271,485 and
net cash from investing activities increased from $16,481,546 to $19,641,068.
(b) Significant accounting judgements, estimates and assumptions
The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These accounting
policies have been consistently applied by the Group.
Uncertainty about these assumptions and estimates could result in comes that require a material adjustment to the carrying amount
of assets or liabilities affected in future periods. The Group also discloses its exposure to risks and uncertainties in note 21. The key
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and
liabilities within the next annual reporting period are:
(i) Share-based payment transactions
The Group measures the cost of equity-settled share-based payments at fair value at the grant date using a Black-Scholes Option
model taking into account the terms and conditions upon which the instruments were granted. The details and assumptions used
in determining the value of these transactions are detailed in note 16.
(ii) Impairment of available-for-sale financial assets
The Group follows the guidance of AASB 139 Financial Instruments: Recognition and Measurement to determine when an
available-for-sale asset is impaired. This determination requires significant judgment. In making this judgement the Group
evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost and the
financial health of a short-term business outlook for the investee, including factors such as industry and sector performance,
changes in technology and operational and financing cash flows.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 47
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
(iii) Non-market vesting conditions
At each reporting period non-market vesting conditions in relation to performance rights are assessed in order to determine the
probability of the likelihood that the non-market vesting conditions are met.
(c) Foreign currency translation
The functional currency of the Company is Australian dollars and the functional currency of subsidiaries based in Canada is
Canadian Dollars (CAN). The Group’s consolidated financial statements are presented in Australian Dollars (AUD), which is also
the parent company’s functional currency. Transactions in foreign currencies are initially recorded in the functional currency by
applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the functional currency spot rates of exchange at the reporting date.
All exchange differences in the consolidated financial report are taken to profit or loss as incurred. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated at exchange rates as at the date of the initial transaction.
As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of Chalice Gold
Mines Limited at the rate of exchange ruling at the balance date and their statement of comprehensive income are translated at the
average exchange rate for the year.
The exchange differences arising on the translation are taken directly to a separate component of recognised foreign currency
translation reserve in equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is
recognised in profit or loss.
(d) Impairment of assets other than financial assets
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator
of impairment exists, or when annual impairment testing for an asset is required, the Group makes a formal estimate of
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its
value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less
costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate
valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators. For an asset that does not generate largely independent cash flows, the
recoverable amount is determined for the cash generating unit to which the asset belongs.
Impairment losses are recognised in the statement of profit and loss in expense categories consistent with the function of the
impaired asset unless the asset has previously been revalued, in which case the impairment loss is recognised as a reversal to
the extent of that previous revaluation with any excess recognised through the statement of profit and loss. Receivables with a
short duration are not discounted.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that
previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the
asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in
the estimates and assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised.
The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is
treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the
asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 48
For the year ended 30 June 2018
PERFORMANCE FOR THE YEAR
This section provides additional information about those line items in the Statement of Comprehensive Income that the directors consider most relevant in the context of the operations of the entity.
4. Segment reporting
The Group has identified its operating segments based on internal reports that are reviewed and used by the Board of Directors in assessing performance and in determining the allocation of
resources. The operating segments are identified by management based on the allocation of costs; whether they are exploration and evaluation costs, business development costs or corporate
related costs. Results of those segments are reported to the Board of Directors at each Board meeting. The exploration and evaluation segment includes all of the Company’s exploration
projects grouped into one combined segment.
Revenue
Net gain on sale of exploration and
evaluation assets
Exploration and evaluation
expenditure
Depreciation
Business development
Share based payments
Corporate administrative expenses
Segment loss before tax
Unallocated income/(expenses)
Net financing income
Net (loss)/gain on sale of available
for sale financial assets
Foreign exchange loss
Income tax benefit
Share of net loss of associates
Loss on deconsolidation of
subsidiaries
Impairment of investment in associate
Impairment of financial assets
Loss attributable to owners of the
parent
C
H
A
L
I
C
E
G
O
L
D
M
N
E
S
|
A
N
N
U
A
L
I
R
E
P
O
R
T
2
0
1
8
|
P
A
G
E
4
9
Exploration and Evaluation
2018
$
2017
(Restated)
$
-
-
489,647
1,270,754
Business development
2017
2018
(Restated)
$
$
-
-
-
-
Corporate
2018
$
203,412
2017
(Restated)
$
156,380
Total
2018
$
203,412
2017
(Restated)
$
156,380
-
-
489,647
1,270,754
(12,636,539)
-
-
-
-
(12,146,892)
(3,352,886)
-
-
-
-
(2,082,132)
-
-
(739,724)
-
-
(739,724)
-
-
(1,279,290)
-
-
(1,279,290)
-
(76,557)
-
(482,991)
(1,950,721)
(2,306,857)
-
(50,227)
-
(329,119)
(1,676,740)
(1,899,706)
(12,636,539)
(76,557)
(739,724)
(482,991)
(1,950,721)
(15,193,473)
(3,352,886)
(50,227)
(1,279,290)
(329,119)
(1,676,740)
(5,261,128)
559,431
273,098
(1,080,026)
(400,585)
2,809,452
(148,828)
(2,474,433)
-
(20,729)
1,834,027
(974,148)
461,131
(94,084)
-
(390,082)
(530,136)
(15,949,191)
(4,681,322)
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 49
N
o
e
s
t
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
F
i
n
a
n
c
i
a
l
t
S
a
t
e
m
e
n
t
s
For the year ended 30 June 2018
Segment assets:
Investments accounted for using
the equity method
Other
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total Liabilities
Exploration and Evaluation
30 June
2018
$
30 June 2017
(Restated)
$
Business development
30 June 2018 30 June 2017
Corporate
30 June 2018 30 June 2017
30 June 2018
$
(Restated)
$
$
(Restated)
$
$
Total
30 June 2017
(Restated)
$
435,339
4,107,586
4,542,925
484,167
1,274,592
1,758,759
-
-
-
-
-
-
-
447,117
447,117
-
365,404
365,404
435,339
4,554,703
4,990,042
484,167
1,639,996
2,124,163
(572,477)
(572,477)
(350,256)
(350,256)
(57,264)
(57,264)
(10,488)
(10,488)
(429,854)
(429,854)
(402,963)
(402,963)
(1,059,595)
(1,059,595)
(763,707)
(763,707)
37,702,461
42,692,503
52,224,527
54,348,690
-
(1,059,595)
(1,469,473)
(2,233,180)
C
H
A
L
I
C
E
G
O
L
D
M
N
E
S
|
A
N
N
U
A
L
I
R
E
P
O
R
T
2
0
1
8
|
P
A
G
E
5
0
Geographical information
Revenues from external customers
Australia
Total
30 June 2018
$
30 June 2017
$
203,418
203,418
156,380
156,380
Non-current assets
30 June 2018
Australia
Canada
Total
$
707,812
105,899
813,711
30 June 2017
(Restated)
$
681,285
111,482
792,767
Non-current assets for this purpose consist of property, plant and equipment and investment in associates. Operating segments are reported in a manner consistent with internal
reporting provided to the chief operating decision makers – being the board of directors.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 50
N
o
e
s
t
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
F
i
n
a
n
c
i
a
l
t
S
a
t
e
m
e
n
t
s
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
5.
Revenue
(a)
Revenue
Corporate and administration service fees
Net finance income
(b) Net gain/(loss) on sale of available for sale financial assets
Net gain on sale of available for sale financial assets
2018
$
203,412
559,431
762,843
2018
$
(1,080,026)
(1,080,026)
2017 (Restated)
$
156,380
273,098
429,478
2017 (Restated)
$
1,834,027
1,834,027
Net loss on sale of available for sale financial assets at 30 June 2018 (2017: net gain of $1,834,027) represents the net loss position
incurred as a result of the sale of shares held in various ASX and TSX entities.
(c) Net gain on sale of exploration and evaluation assets
Net gain on sale of exploration and evaluation assets
2018
$
2017 (Restated)
$
489,647
489,647
1,270,754
1,270,754
Net gain on sale of exploration and evaluation assets for 2018 relates to the sale of Dumbleyung tenements to ASX Listed Ausgold
Ltd (“Ausgold”) in September 2017. In consideration for the tenements, the Company received 15 million fully paid ordinary shares
in Ausgold and 10 million unlisted options exercisable at 3.5 cents. The options expire on 13 September 2019 and the shares received
have an escrow period of 12 months from date of issue.
The net gain on sale for 2017 represents the sale of the Company’s 12% interest in the Gnaweeda Project, Western Australia and
the sale of the Company’s 51% interest in the Ardeen Project, Ontario Canada.
Recognition and measurement
(d)
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade
allowances, rebates and amounts collected on behalf of third parties.
Sales of goods
Revenue is recognised when goods are delivered and titles have passed, at which time all of the following conditions are satisfied:
•
•
•
•
•
the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
the Group retains continuing managerial involvement to the degree usually associated with ownership nor effective control
over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the Group; and
the costs incurred or to be incurred in respect of the transaction can be reliably measured.
Rendering of services
Revenue from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion
of the contract is determined as follows:
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 51
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
• Contract income is recognised by reference to the total actual costs incurred at the end of the reporting period relative to the
•
•
proportion of the total costs expected to be incurred over the life of the contract;
Servicing fees are recognised by reference to the proportion of the total cost of providing the service for the product and
sold; and
Revenue from time and material contracts are recognised at the contractual rates as labour hours are delivered and direct
expenses are incurred.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the
amount of revenue can be reliably measured. Interest income is accrued on a time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that assets’ net carrying amount on initial recognition.
6.
Expenses
(a) Corporate administrative expenses
Insurance
Investor relations
Legal fees
Travel and conferences
Head office costs
Regulatory and compliance
Personnel expenses (note 6(b))
Other
(b)
Personnel expenses
Wages and salaries
Directors’ fees
Other associated personnel expenses
Superannuation contributions
(Decrease)/increase in liability for annual leave
(Decrease)/increase in liability for long service leave
(c)
Business development costs
Personnel expenses
Head office costs
Consultants
Travel and conferences
Other
(d)
Impairment of financial assets
Impairment of available for sale financial assets
2018
$
2017 (Restated)
$
39,238
51,717
6,946
140,187
84,250
357,738
1,206,239
64,406
1,950,721
2018
$
568,537
233,755
177,427
177,277
36,301
12,942
26,397
19,373
20,531
636
149,243
308,347
1,131,844
20,369
1,676,740
2017 (Restated)
$
388,014
233,827
213,124
180,562
29,050
87,267
1,206,239
1,131,844
2018
$
360,092
104,221
175,989
95,046
4,376
739,724
2018
$
20,729
20,729
2017 (Restated)
$
886,746
182,701
61,178
71,344
77,321
1,279,290
2017 (Restated)
$
530,136
530,136
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 52
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
The Company has recorded an impairment in the fair value of share held in Kesselrun Resources Limited for the year ended 30 June
2018 of $20,729 (2017: $530,136). The impairment has been included as part of continuing operations in the Statement of
Comprehensive Income due to the prolonged decline in market prices for this financial asset.
7.
Exploration and evaluation expenditure
West Pilbara, Western Australia(1)
Latitude Hill, Western Australia(1)
Warrego North, Northern Territory
East Cadillac, Quebec
Kinebik, Quebec
Yilgarn Projects, Western Australia
Other(2)
2018
$
843,192
621,682
427,276
8,382,985
824,642
322,736
1,214,026
2017(Restated)
$
137,555
395,942
241,537
1,579,324
541,524
117,398
339,606
12,636,539
3,352,886
(1)During the reporting period, the Company met both minimum commitments required under the West Pilbara and Latitude Hill Farm-
in agreements and withdrew from both agreement without earning an interest in the projects.
(2)Other includes generative opportunity evaluations within existing or in close proximity to the Group’s current exploration projects.
Recognition and measurement
(a)
Costs incurred in the exploration and evaluation stages of specific areas of interest are expensed against the profit or loss as incurred.
All exploration expenditure, including general permit activity, geological and geophysical costs, project generation and drilling costs,
is expensed as incurred. The costs of acquiring interests in new exploration licences is also expensed. Once the technical feasibility
and commercial viability of extracting a mineral resource are demonstrable in respect of an area of interest, development expenditure
is capitalised to the Statement of Financial Position.
8.
Income tax
The major components of income tax expense are as follows:
Current income tax:
Current income tax expense
Over/(under) provision for income tax
Foreign exploration incentive tax credits
Deferred tax:
Temporary differences relating to available for sale investments
Total income tax benefit reported in the statement of comprehensive
income
2018
$
2017 (Restated)
$
-
66,461
2,474,645
2,541,106
(159,439)
(8,264)
388,378
220,675
268,346
240,456
2,809,452
461,131
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 53
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
The prima facie income tax expense on pre-tax accounting result on operations reconciles to the income tax expense in the
financial statements as follows:
Accounting loss from continuing operations
Income tax calculated at the Australian corporate rate of 27.5%
Non-deductible expenses
Share based payments
Gain on sale of available for sale financial assets
Non-assessable foreign income
Deferred tax assets and liabilities not recognised
Foreign exploration incentive tax credits
Income tax benefit on financial assets
Effect of different tax rates of subsidiaries operating in other jurisdictions
Effect of change in tax rate
Under provision for income tax
Income tax benefit/(expense) reported in the statement of comprehensive
income
2018
$
(15,949,191)
(15,949,191)
2017 (Restated)
$
(4,681,322)
(4,681,322)
(4,386,028)
1,937,497
132,823
-
(216,847)
2,337,751
(2,474,645)
(92,389)
18,847
-
(66,461)
(1,287,364)
229,148
90,507
38,941
(161,564)
623,562
(388,378)
-
(7,956)
393,709
8,264
2,809,452
461,131
The tax rate used in the above reconciliation is the corporate rate of 27.5% payable by Australian corporate entities on taxable
profits under Australian tax law.
Current tax assets comprise:
Income tax receivable attributable to:
Parent Entity
Group’s subsidiaries
Current tax liabilities comprise:
Income tax payable/(receivable) attributable to:
Parent Entity
Group’s subsidiaries
Deferred tax liabilities comprise:
Temporary differences relating to available for sale investments
Unrecognised deferred tax balances:
The following deferred tax assets and liabilities have not been brought to account:
Deferred tax assets comprise:
Revenue losses available for offset against future taxable income
Other deferred tax assets
Deferred tax liabilities comprise:
Other deferred tax liabilities
2018
$
2017 (Restated)
$
-
2,497,597
2,497,597
-
388,378
388,378
2018
$
2017 (Restated)
$
259,951
-
259,951
259,951
1,067,099
1,327,050
2018
$
2017 (Restated)
$
172,868
172,868
-
-
2018
$
6,109,309
1,097,343
7,206,652
17,296
17,296
2017 (Restated)
$
4,140,787
1,059,937
5,200,724
249,692
249,692
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 54
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Income tax benefit not recognised directly in equity during the year:
Share issue costs
2018
$
2017(Restated)
$
33
1,560
Deferred tax liabilities have not been recognised in respect of these taxable temporary differences as the entity is able to
control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse
in the foreseeable future.
Recognition and measurement
(a)
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the end of the reporting
period in the country where the company’s subsidiaries operate and generate taxable income. Provisions are established where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Current tax liabilities for the current period and prior periods are measured at the amount expected to be recovered from or paid to
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the
balance date.
Deferred income tax is provided on all temporary differences at reporting date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
• when the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
•
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
arrangements, and the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, the carry forward of unused tax assets and unused
tax losses, to the extent that it is probably that taxable profit will be available against which the deductible temporary differences, and
the carry forward of unused tax credits and unused tax losses can be utilised, except:
• when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor tax able profit or loss.
• when the deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
arrangements, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences
can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred income tax assets at each reporting date and are recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be recovered.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 55
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not profit or loss.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax
liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST or other taxes, except:
• when the GST incurred on a sale or purchase of assets or services is not payable to or recovered from the taxation authority,
in which case the GST is recognised as part of the revenue or the expense item or as part of the cost of acquisition of the asset,
as applicable; and
• when receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of the receivables or payables in the
statement of financial position. Other taxes payable in foreign jurisdictions are included as a current payable in the statement of financial
position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing
and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part of operating cash flows.
Taxes paid in foreign jurisdictions are classified as investing cash flows in the statement of cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
9.
Loss per share
Basic and diluted loss per share
The calculation of basic loss per share for the year ended 30 June 2018 was based on the loss attributable to ordinary equity
holders of the parent of $15,949,191 (2017: restated loss of $4,681,322) and a weighted average number of ordinary shares
outstanding during the year ended 30 June 2018 of 261,210,294 (2017: 267,705,838).
Loss attributable to ordinary shareholders
Loss attributable to ordinary equity holders of the parent from continuing
operations
Net loss attributable to ordinary equity holders of the parent for basic
earnings
2018
$
2017 (Restated)
$
(15,949,191)
(4,681,322)
(15,949,191)
(4,681,322)
Net loss attributable to ordinary equity holders of the parent adjusted for
the effect of dilution
(15,949,191)
(4,681,322)
Diluted loss per share have not been disclosed as the impact from options and performance rights is anti-dilutive.
(a) Recognition and measurement
Basic loss per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs servicing equity
(other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for
any bonus element.
Diluted loss per share is calculated as net profit attributable to members of the parent, adjusted for:
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the affect tax effect of dividends and interest associated with dilutive potential ordinary shares that 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.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 56
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
ASSETS
This section provides additional information about those individual line items in the Statement of Financial Position that the Directors
consider most relevant in the context of the operations of the entity.
10. Cash and cash equivalents
Bank balances
Term deposits
Petty cash
Reconciliation of cash flows from operating activities
Loss after tax from continuing operations
Adjustments for:
Depreciation and amortisation
Net gain on sale of fixed assets
Fixed assets written off
Income tax benefit
Net loss/(gain) on sale of available for sale financial assets
Net gain on sale of exploration and evaluation assets
Foreign exchange gains/(loss)
Business development and project acquisition costs
Impairment of financial assets
Deconsolidation of subsidiaries
Share of associate’s loss
Impairment of investment in associate
Equity-settled share-based payment expenses
Operating loss before changes in working capital and provisions
(Increase)/decrease in trade and other receivables
(Increase)/decrease in financial assets
(decrease)/Increase in trade creditors and other liabilities
(decrease)/increase in provisions
Net cash used in operating activities
2018
$
9,808,922
25,927,206
3,356
35,739,484
2017 (Restated)
$
10,460,910
36,355,748
2,493
46,819,151
2018
$
(15,949,191)
2017 (Restated)
$
(4,681,322)
113,768
-
30,897
(2,809,452)
1,080,026
(489,647)
400,585
739,724
20,729
2,474,433
148,828
-
482,991
(13,756,309)
(142,657)
(2,663)
(739,107)
24,670
(14,616,066)
85,295
(2,780)
-
(461,131)
(1,834,027)
(1,270,754)
974,148
1,279,290
530,136
-
94,084
390,082
329,119
(4,567,860)
(49,222)
(1,173)
235,484
111,286
(4,271,485)
Non-cash financing and investing activities
During the year the Company completed the sale of the Dumbleyung Project, WA to ASX Listed Ausgold Limited (“Ausgold”). In
consideration for the Company’s interest in the Dumbleyung Project, Chalice received 15,000,000 shares in Ausgold and received
10,000,000 unlisted options (refer note 5(c)).
(a) Recognition and measurement
Cash and cash equivalents in the statement of financial position comprise cash balances and call deposits with an original maturity
of six months or less, which are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand
and form an integral part of the Group’s cash management are included as a component of cash and short-term deposits for the
purpose of the statement of cash flows.
11.
Trade and other receivables
Other trade receivables
Prepayments
2018
$
2017(Restated)
$
466,668
153,262
619,930
210,420
105,378
315,798
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 57
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
(a) Recognition and measurement
Trade and other receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using
the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for settlement within periods
ranging from 30 to 60 days.
Impairment of trade receivables are continually reviewed and those that are considered to be uncollectable are written off by reducing
the carrying amount directly. An allowance account is used when there is objective evidence that the Group will not be able to collect
all amounts due according to the original contractual terms. Factors considered by the Group in making this determination include
known significant financial difficulties of the debtor, review of financial information and significant delinquency in making contractual
payments to the Group. The impairment allowance is set equal to the original effective interest rate. Where receivables are short-term
discounting is not applied in determining an allowance.
The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When a trade
receivable for which an impairment allowance had been recognised becomes uncollectable in a subsequent period, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the
statement of comprehensive income.
12.
Financial assets
Current
Available for sale financial assets carried at fair value:
Listed shares
2018
$
2017(Restated)
$
2,646,670
2,646,670
5,807,628
5,807,628
Available for sale financial assets represents investments in various companies listed on the ASX and TSX. During the year ended 30
June 2018, Company sold its remaining 6,960,836 shares held in First Mining for net proceeds of $3.9 million (2017:$21.4 million).
Non-current
Bond in relation to office premises
Bank guarantee and security deposits
Options and warrants in listed entities
2018
$
69,912
166,590
138,609
375,111
2017(Restated)
$
69,912
155,056
-
224,968
(a) Recognition and measurement
Initial recognition and measurement
Financial assets are classified at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-
to-maturity investments, AFS financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial assets are recognised initially at fair value, plus, in the case of financial assets not recorded at fair value through profit or
loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
The Group determines the classification of its financial assets at initial recognition and, when allowed and appropriate, re-evaluates this
designation at each financial year end.
(i) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held-for-trading and financial assets designated upon initial
recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of
selling in the near term. Derivatives, including embedded derivatives are also classified as held-for-trading unless they are designated
as effective hedging instruments as defined by IAS 139. Gains or losses on investments held-for-trading are recognised in profit or loss.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 58
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method, less
impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as
through the amortisation process.
(iii) Held-to-maturity investments
If the Group has the positive intent and ability to hold debt securities to maturity, then they are classified as held-to-maturity. Held-to-
maturity investments are measured at amortised cost using the effective interest method, less any impairment losses.
(iv) Available-for-sale investments
Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified
as any of the three preceding categories. After initial recognition available-for-sale investments are measured at fair value with gains or
losses being recognised as a separate component of equity until the investment in derecognised or until the investment is determined to
be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.
The Group evaluates whether the ability and intention to sell its available-for-sale financial asset in the near term is still appropriate. The
fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices
at the close of business on the balance date. For investments with no active market, fair value is determined using valuation techniques.
Such techniques include recent arm’s length market transactions, reference to the current market value of another instrument that is
substantially the same, discounted cash flow analysis and option pricing models.
the rights to receive cash flows from the asset have expired; and/or
Derecognition of financial assets
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 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 risk 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.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it
evaluates if and to what extent it has retained the risk and rewards of ownership. When it has neither transferred nor retained
substantially all of the risk and rewards of the asset, nor transferred control of the asset, the asset is recognised to the extent of the
Group’s continuing involved in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying
amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Impairment of financial assets
The Group assesses, at each reporting date, whether there is any objective evidence that a financial asset or a group of financial assets
is impaired. A financial asset or a group of a financial assets is deemed to be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and
that loss event has an impact on estimated future cash flows of the financial asset or the group of financial assets that can be reliably
estimated. Evidence of impairment may include indications that debtors or a group of debtors is experiencing significant financial
difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial
reorganisation and when observable data indicate that there is a measurable decrease in the estimated future cash flows, such as
changes in arrears or economic conditions that correlate with defaults.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 59
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Financial assets carried at amortised cost
(i)
For financial assets carried at amortised cost, the Group first assess whether objective evidence of impairment exists individually for
financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group
determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it
includes the asset in a group of financial assets with similar credit risk characteristics and collectively assess them for impairment. Assets
that are individually assessed for impairment and for which an impairment loss is or continues to be, recognised are not included in a
collective assessment of impairment.
If there are objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not
yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest
rate.
(ii) Financial assets carried at cost
If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value
(because its fair value cannot be reliably measured), or on a derivative asset that is linked to and must be settled by delivery of such an
unquoted equity instrument, the amount of the loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset. Such impairment loss
shall not be reversed in subsequent periods.
(iii) Available-for-sale investments
If there is objective evidence that an investment or a group of investments is impaired, an amount comprising the difference between its
cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit
or loss, is transferred from equity to the statement of comprehensive income. Reversals of impairment losses for equity instruments
classified as available-for-sale are not recognise in profit. Reversals of impairment losses for debt instruments are reversed through profit
or loss if the increase in an instrument’s fair value can be objectively related to an event occurring after the impairment loss was
recognised in profit or loss.
13.
Property, plant and equipment
Cost
Accumulated depreciation and impairment
Net carrying amount
Movements in property, plant and equipment:
At 1 July net of accumulated depreciation
Additions
Disposals
Exchange differences
Depreciation charge for the year
At 30 June net of accumulated depreciation and impairment
2018
$
2017(Restated)
$
969,787
(591,415)
378,372
1,108,731
(800,131)
308,600
308,600
211,894
(30,897)
2,543
(113,768)
378,372
274,733
132,298
(10,286)
(4,084)
(84,061)
308,600
(a) Recognition and measurement
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses, if any. Such cost includes
the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. When significant parts of
plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Plant and equipment transferred from customers are initially measured at fair value at the date on which control is obtained.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 60
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Depreciation is calculated on a diminishing value basis over the estimated useful lives of each part of an item of property, plant and
equipment. Land is not depreciated. The depreciation rates used in the current and comparative periods are as follows:
plant and equipment
fixtures and fittings
•
•
• motor vehicles
7%-40%
11%-22%
18.75%-25%
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.
An item of plant and equipment and any significant part initially recognised is derecognised upon disposal or when no further future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss when
the asset is derecognised.
The carrying values of plant and equipment are reviewed for impairment at each balance date in line with the Group’s impairment
policy.
14.
Investments accounted for using the equity method
At 30 June 2018, the Company had a 20.46% interest (2017: 22.95%) in unlisted Australian based GeoCrystal Limited
(“GeoCrystal”). The principal activity of the company is exploring diamonds in Australia.
Reconciliation of movements in investments in associates
Balance at 1 July
Share placement
Impairment of investment in associate
Share of associate’s loss
Balance at 30 June
Summary of financial information of associate:
Financial Position
Total assets
Total liabilities
Net assets
Share of associate’s net assets
Financial Performance
Total revenue
Total loss for the year
Share of associate’s loss
2018
$
484,167
100,000
-
(148,828)
435,339
2017 (Restated)
$
968,333
-
(390,082)
(94,084)
484,167
2018
$
2017 (Restated)
$
2,238,888
(111,131)
2,127,757
435,339
2,165,605
(55,945)
2,109,660
484,167
343
(727,242)
(148,828)
225
(410,030)
(94,084)
The associate had no contingent liabilities or assets at 30 June 2018 (30 June 2017: nil) and exploration commitments payable
within 1 year of $348,000 (2017: $477,000) and nil commitments payable within 2 to 5 years (2017: $395,000).
(a) Recognition and measurement
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial
and operating policy decisions of the investee, but is not control or joint control over those policies. The considerations made in
determining significant influence or joint control are similar to those necessary to determine control over subsidiaries.
The Group’s investment in associates is accounted for using the equity method of accounting in the consolidated financial statements.
Under the equity method, investments in associates is initially recognised at cost plus post acquisition changes in the Group’s share of
net assets of the associates. Goodwill relating to an associate is included in the carrying amount of the investment and is not tested for
impairment separately. After application of the equity method, the Group determines whether it is necessary to recognise any impairment
loss with respect to the Group’s net investment in associates. At each reporting date, the Group determines whether there is objective
evidence that the impairment in the associate is impaired. If there is such evidence, the Group calculates the amount of the impairment
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 61
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
as the difference between the recoverable amount of the associate and its carrying value, and then recognises the loss as ‘Share of
profit of an associate’ in the statement of profit or loss.
The Group’s share of its associates’ post acquisition profits or losses is recognised in the statement of comprehensive income, and its
share of post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from the associates
are recognised in the parent entity’s statement of comprehensive income as a component of other income.
When the Group’s share of losses in an associate equals or exceeds its interests in the associate, including any unsecured long term
receivables and loans, the Group does not recognise further losses unless it has incurred obligations or made payments on behalf of the
associate.
Upon loss of significant influence over the associate, the Group measures and recognised any retained investment at its fair value. Any
difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment
and proceeds from disposal is recognised in profit or loss.
EMPLOYEE BENEFITS
This section of the Notes includes information that must be disclosed to comply with accounting standards and other pronouncements
relating to the remuneration of employees and consultants of the Group, but that is not immediately related to individual line items
in the Financial Statements.
15. Employee benefits
Annual leave accrued
Provision for long service leave
2018
$
150,563
106,094
256,657
2017 (Restated)
$
97,869
93,152
191,021
(a) Recognition and measurement
Liabilities for employee benefits for wages, salaries, annual leave and sick leave expected to be settled within 12 months of the reporting
date are recognised in employee benefits in respect of employees’ services up to the reporting date. They are measured at the amounts
expected to be paid when the liabilities are settled.
The provision for long service leave represents the vested long service leave entitlements accrued.
16.
Share based payments
Employee share option plan
The Group has an Employee Share Option Plan (“ESOP”) in place. Under the terms of the ESOP, the Board may offer options for no
consideration to full-time or part-time employees (including persons engaged under a consultancy agreement), executive and non-
executive directors. In the case of the directors, the issue of options under the ESOP requires shareholder approval.
Each option entitles the holder, on exercise, to one ordinary fully paid share in the Company. There is no issue price for the options.
The exercise price for the options is determined by the Board.
An option may only be exercised after that option has vested and any other conditions imposed by the Board on exercise satisfied. The
Board may determine the vesting period, if any.
The number and weighted average exercise prices of share options is as follows:
30 June 2018
Outstanding at the beginning of the year
Exercised during the year
Lapsed during the year
Granted during the year
Outstanding at the end of the year
Exercisable at the end of the year
Weighted average
exercise price
$
2018
0.25
-
0.25
0.21
0.22
0.23
Number
of options
2018
2,250,000
-
(750,000)
4,000,000
5,500,000
2,833,332
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 62
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
30 June 2017
Outstanding at the beginning of the year
Exercised during the year
Granted during the year
Exercisable at the end of the year
Outstanding at the end of the year
Weighted average
exercise price
$
2017
0.25
-
0.25
0.25
0.25
Number
of options
2017
500,000
-
1,750,000
2,250,000
2,250,000
The options outstanding at 30 June 2018 have a weighted average exercise price of $0.22 (2017: $0.25) and a weighted average
contractual life of 3 years (2017: 3 years).
The fair value of the options is estimated at the date of grant using a Black-Scholes option-pricing model. The following table gives the
assumptions made in determining the fair value of the options granted during the year.
Weighted average share price at grant date
Weighted exercise price
Expected volatility (expressed as weighted average volatility)
Option life (expressed as weighted average life)
Expected dividends
Risk-free interest rate
2018
0.175
0.21
57.31%
3
-
2.12%
2017
0.16
0.25
50.76%
3
-
1.85%
Share options are granted under service conditions. Non-market performance conditions are not taken into account in the grant date
fair value measurement of the services received.
Employee long term incentive plan
The Company has in place an Employee Long Term Incentive Plan (“LTIP”) and under the LTIP the Board may issue performance rights
to employees and directors. A performance right is a right to be issued an ordinary share upon the satisfaction of certain performance
conditions that are attached to the performance right, the conditions of which are determined by the Board.
Performance rights are granted for no consideration and the term of the performance rights are determined by the Board in its absolute
discretion, but will ordinarily have a three year term up to a maximum of five years. Performance rights are subject to lapsing if
performance conditions are not met by the relevant measurement date or expiry date (if no other measurement date is specified) or if
employment is terminated. There is no ability to re-test performance under the LTIP after the performance period.
The fair value of performance rights has been calculated at the grant date and allocated to each reporting period evenly over the period
from grant date to vesting date. The value disclosed is the portion of fair value of the rights allocated to this reporting period.
The weighted average fair value of the performance rights outstanding at 30 June 2018 was 12.7 cents per performance right (2017:
11.3 cents).
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 63
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
A summary of performance rights is as follows:
30 June 2018:
Grant date
25 June 2015
25 November 2015
15 July 2016
22 November 2016
19 June 2017
27 July 2017
9 November 2017
29 November 2017
Opening
balance
2,404,847
1,664,707
2,271,452
1,200,738
1,000,000
-
-
-
Granted
Vested
Lapsed/Forfeited
-
-
-
-
-
3,711,302
615,056
1,217,989
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,000,000)
(885,712)
(107,740)
-
Closing
balance
2,404,847
1,664,707
2,271,452
1,200,738
-
2,825,590
507,316
1,217,989
8,541,744
5,544,347
(1,993,452)
12,092,639
30 June 2017 (Restated):
Grant date
1 October 2014
25 June 2015
25 November 2015
15 July 2016
22 November 2016
19 June 2017
Opening
balance
1,747,682
2,404,847
1,664,707
-
-
-
5,817,236
Granted
-
-
-
2,756,434
1,200,738
1,000,000
4,957,172
Vested
-
-
-
-
-
-
-
Lapsed/Forfeited
(1,747,682)
-
-
(484,982)
-
-
(2,232,664)
Closing
balance
-
2,404,847
1,664,707
2,271,452
1,200,738
1,000,000
8,541,744
Share
price at
date of
issue ($)
0.11
0.11
0.19
0.16
0.16
0.16
0.205
0.18
Share
price at
date of
issue ($)
0.13
0.11
0.11
0.19
0.16
0.16
The fair values of performance rights granted during 2018 and 2017 were determined using a binomial option pricing model which
takes into account the impact of vesting conditions and the fact that the rights may never vest.
The following table gives the assumptions made in determining the fair values of the performance rights granted.
Weighted share price at grant date
Exercise price
Expected volatility
Weighted average performance period (years)
Weighted average vesting period (years)
Expected dividends
Risk-free interest rate
2018
$0.17
Nil
50%
2.83
2.83
-
1.92%
2017
$0.17
Nil
50%
2.45
2.45
-
1.70%
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 64
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Share based payment transactions
The expense recognised during the year is shown in the following table:
Share options granted in 2018 – equity settled
Performance rights granted in 2017
Performance rights granted in 2018
Total expenses recognised as share based payments
2018
$
105,446
-
377,545
482,991
2017(Restated)
$
55,579
273,540
-
329,119
(a) Recognition and measurement
The cost of share based payments is recognised in employee benefits expense, together with a corresponding increase in Share-based
Payments Reserve in equity, over the period in which the performance and/or service conditions are fulfilled (the vesting period). The
cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the
vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is
made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of
fair value at grant date. The Statement of Comprehensive Income charge or credit for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but
the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will
ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award,
but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the
fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions for which vesting is conditional
upon a market or non-vesting condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified.
In addition, an expense is recognised for any modification that increases the total fair value of the share based payment arrangement,
or is otherwise beneficial to the employee, as measured at the date of modification.
Where an equity-settled award is cancelled by the entity or by the counterparty, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately through profit or loss. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new
award are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.
LIABILITIES AND EQUITY
This section provides additional information about those individual line items in the Statement of Financial Position that the Directors
consider most relevant in the context of the operations of the entity.
17.
Trade and other payables
Trade payables
Other payables
Accrued expenses
2018
$
2017 (Restated)
$
23,759
81,044
395,881
500,684
1,580
71,690
429,801
503,071
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 65
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
(a) Recognition and measurement
Trade and other payables are stated at amortised cost. Trade and other payables are presented as current liabilities unless payment
is not due within 12 months.
18. Other Liabilities
Non-current
Lease make good provision
2018
$
2017(Restated)
$
42,303
42,303
39,170
39,170
19.
Issued Capital
There were 261,210,294 shares on issue at 30 June 2018 (2017: 261,210,294).
(a) Movements in ordinary shares on issue
2018
2017 (Restated)
No.
$
No.
$
Balance at beginning of financial year
Share buy-back
261,210,294
-
39,836,164
(123)
282,710,802
(21,500,508)
Balance at end of financial year
261,210,294
39,836,041
261,210,294
43,622,887
(3,786,723)
39,836,164
Issuance of Ordinary Shares
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at
shareholders’ meetings. In the event of winding up of the Company, the ordinary shareholders rank after all other shareholders and
creditors and are fully entitled to any proceeds on liquidation.
(b) Share options
On issue at 1 July
Options exercised during the year
Options lapsed during the year
Options issued during the year
On issue at 30 June
2018
No.
2,250,000
-
(750,000)
4,000,000
5,500,000
2017
No.
500,000
-
-
1,750,000
2,250,000
At 30 June 2018 the Company had 5,500,000 unlisted options on issue under the following terms and conditions:
Number
Expiry Date
1,000,000
500,000
2,000,000
2,000,000
30 November 2019
30 June 2019
31 March 2021
31 March 2021
Exercise Price
$
0.25
0.25
0.20
0.22
(c) Performance rights
On issue at 1 July
Issue of performance rights under the Employee Long Term Incentive
Plan
Issue of performance rights to consultants of the Company
Performance rights vested
Performance rights lapsed
On issue at 30 June
2018
No.
8,541,744
2017
No.
5,817,236
5,544,347
3,957,172
-
-
(1,993,452)
12,092,639
1,000,000
-
(2,232,664)
8,541,744
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 66
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
At 30 June 2018 the Company had 12,092,639 performance rights on issue under the following terms and conditions:
Number
4,069,554
3,472,190
4,550,895
Terms
Expiry Date
Exercise Price
$
The number of performance rights that will vest will be solely
dependent on the Company meeting the strategy objective
and Company’s share price as at the measurement date of
30 June 2017 as compared to the Share price hurdles
outlined in the Remuneration Report.
The number of performance rights that will vest will be solely
dependent on the Company meeting the outlined strategy
the Company’s Total
objectives and by comparing
Shareholder Return with that of a comparator group, as at
the measurement date of 30 June 2019, as outlined in the
Remuneration Report.
The number of performance rights that will vest will be solely
dependent on the Company meeting the outlined strategy
objectives and by comparing
the Company’s Total
Shareholder Return with that of a comparator group, as at
the measurement date of 30 June 2020, as outlined in the
Remuneration Report.
30 June 2019
Nil
30 June 2020
Nil
30 June 2021
Nil
20. Retained earnings and reserves
(a) Movements in retained earnings attributable to owners of the parent:
Balance at beginning of financial year
Retrospective adjustment for change in accounting policy
Loss for the year attributable to owners of the parent
Transfers between equity items
Balance at end of financial year
2018
$
16,890,681
-
(15,949,191)
14,591
956,081
2017 (Restated)
$
22,388,512
(816,509)
(4,681,322)
-
16,890,681
Share-based payments reserve
(b) Nature and purpose of reserves
Other capital reserves
(i)
The share-based payments reserve is used to recognise the value of equity-settled share-based payment transactions provided
to employees, including key management personnel, as part of their remuneration. Refer to note 16 for further details of these
plans.
Foreign currency translation reserve
All other reserves as stated in the consolidated statement of changes in equity
(ii)
The foreign currency reserve is used to record exchange differences arising from the translation of the financial statements of
foreign subsidiaries. It is also used to record the effect of exchange variances resulting from net investments in foreign
operations.
Investment revaluation reserve
(iii)
The investment revaluation reserve comprises the cumulative net change in the fair value of available-for-sale financial assets
and investments in associates until the investments are derecognised or impaired.
All movements in the above reserves are as stated in the consolidated statement of changes in equity.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 67
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
FINANCIAL INSTRUMENTS
This section of the Notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial
position and performance.
21.
Financial instruments
(a) Capital risk management
The capital structure of the Group consists of equity attributable to equity holders, comprising issued capital, reserves and
retained earnings as disclosed in notes 19 and 20.
The Board reviews the capital structure on a regular basis and considers the cost of capital and the risks associated with each
class of capital. The Group will balance its overall capital structure through new share issues as well as the issue of debt, if
the need arises.
(b) Market risk exposures
Market risk is the risk that changes in market prices such as foreign exchange rates, equity prices and interest rates will have
on the Group’s income or value of its holdings of financial instruments.
(i) Foreign exchange rate risk
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations
arise. The Group does not hedge this exposure. The cash at bank held by the Company currently comprises United States
Dollar (“USD”), Australian dollar (“AUD”) and Canadian dollar (“CAD”) funds. The Group manages its foreign exchange
risk by constantly reviewing its exposure and ensuring that there are appropriate cash balances in order to meet its likely
future commitments in each currency. At 30 June 2018, Chalice had approximately US$10 million (A$14 million) cash on
hand in US$ denominated bank accounts and C$8.4 million (A$8.6 million) cash on hand in C$ denominated bank accounts.
The following tables summarises the impact of increases/decreases in the relevant foreign exchange rates on the Group’s
post-tax result for the year and on the components of equity. The sensitivity analysis uses a variance of 10% movement in the
USD against AUD.
Impact on gain/(loss)
Impact on equity
AUD/USD +10%
AUD/USD -10%
AUD/USD +10%
AUD/USD -10%
2018
$
(1,247,023)
1,371,756
(1,247,023)
1,371,756
2017(Restated)
$
(1,183,501)
1,301,851
(1,183,501)
1,301,851
In addition to the above foreign exchange exposure on the Group’s cash balance, the Group is also exposed to movements
in CAD against AUD in relation to its holding in First Mining Shares.
The following table summarises the impact of increases/decrease in the relevant foreign exchange rates on the Group’s post-
tax result for the year and on the components of equity. The sensitive analysis uses a variance of 10% movement in the CAD
against AUD.
Impact on gain/(loss)
Impact on equity
AUD/CAD +10%
AUD/CAD -10%
AUD/CAD +10%
AUD/CAD -10%
2018
$
(1,048,087)
1,152,951
(1,048,087)
1,152,951
2017(Restated)
$
(1,443,647)
1,588,013
(1,443,647)
1,588,013
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 68
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
(ii) Equity prices
The Group has exposure to equity prices through its holdings in various listed entities. The following table outlines the impact
of increases/decreases in the value of the Company’s investment holding on the Group’s post-tax result for the year and on
the components of equity. The sensitivity analysis uses a variance of 10% movement upwards and down on the year end
closing share prices.
Impact on gain/(loss)
Impact on equity
Share price +10%
Share price -10%
Share price +10%
Share price -10%
2018
$
264,667
(240,606)
264,667
(240,606)
2017(Restated)
$
580,763
(527,966)
580,763
(527,966)
(iii) Interest rate risk
At reporting date, the Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s short term
cash deposits. The Group is not exposed to cash flow volatility from interest rate changes on borrowings, as it does not have
any short or long term borrowings.
Chalice constantly analyses its exposures to interest rates, with consideration given to potential renewal of existing positions
and the period to which deposits may be fixed.
The Group considers preservation of capital as the primary objective as opposed to maximising interest rate yields by investing
in higher risk investments.
At reporting date, the following financial assets were exposed to fluctuations in interest rates:
Cash and cash equivalents
2018
$
35,739,484
2017(Restated)
$
46,819,151
The following sensitivity analysis is based on the interest rate risk exposures in existence at reporting date. The sensitivity is
based on a change of 100 basis points in interest rates at reporting date.
In the year ended 30 June 2018, if interest rates had moved by 100 basis points, with all other variables held constant, the
post-tax result for the Group would have been affected as follows:
Impact on gain/(loss)
Impact on equity
100 bp increase
100 bp decrease
100 bp increase
100 bp decrease
2018
$
350,855
(350,855)
350,855
(350,855)
2017(Restated)
$
452,402
(452,402)
452,402
(452,402
(c) Credit risk exposure
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised
financial assets is the carrying amount, net of any allowance for doubtful debts, as disclosed in the notes to the financial
statements.
It is not the Company’s policy to securitise its trade and other receivables, however, receivable balances are monitored on
an ongoing basis. In addition, the Company currently diversifies its cash holdings across three of the main Australian financial
institutions.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 69
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
(d) Liquidity risk exposure
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board of Directors
actively monitors the Group’s ability to pay its debts as and when they fall due by regularly reviewing the current and forecast
cash position based on the expected future activities.
The Group has non-derivative financial liabilities which include trade and other payables of $500,684 (2017: $503,071)
all of which are due within 60 days.
In light of the Group’s current financial assets and low expenditures relative to those assets, the Group could continue to
operate as a going concern for a considerable period of time, subject to any changes to the Group structure or undertaking
a material transaction.
(e) Fair value of financial instruments
The Directors consider the carrying value of the financial assets and financial liabilities are recognised in the consolidated
financial statements approximate their fair values. In particular, available for sale investments are measured at fair value
using quoted market prices at the reporting date (Level 1 fair value measurement).
The directors have assessed that the fair value of cash and short-term deposits, trade receivables, trade payables and other
current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
(f) Recognition and measurement
The Group measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value is based on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
•
•
In the principal market for the asset or liability; or
In the absence of a principal market, the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximise the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as
a whole:
•
•
•
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
Level 3 - Valuation technique for which the lowest level input that is significant to the fair value measurement is
unobservable.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 70
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
GROUP COMPOSITION
This section of the Notes includes information that must be disclosed to comply with accounting standards and other pronouncements
relating to the structure of the Group, but that is not immediately related to individual line items in the Financial Statements.
22.
Parent Entity
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Financial performance
Loss for the year
Total comprehensive loss
2018
$
2017 (Restated)
$
37,152,979
40,578,859
18,059,613
16,306,556
55,212,592
56,885,415
704,764
654,463
30,600,745
29,670,960
31,305,509
30,325,423
23,907,083
26,559,992
39,836,042
39,836,165
(17,241,997)
(13,784,849)
1,313,038
508,676
23,907,083
26,559,992
2018
$
2017 (Restated)
$
(3,471,738)
(3,583,383)
(3,471,738)
(3,583,383)
Commitments and contingencies
(i) Contingencies
Other than as disclosed in note 26, the parent entity has no contingent assets or liabilities.
(ii) Operating lease commitments
Within 1 year
Within 2-5 years
Later than 5 years
2018
$
2017 (Restated)
$
240,751
298,567
-
539,318
240,751
566,284
-
807,035
(a) Recognition and measurement
The financial information for the parent entity, Chalice Gold Mines Limited, has been prepared on the same basis as the consolidated
financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent entity’s financial statements.
Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying
amount of these investments.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 71
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
23.
List of subsidiaries
Significant investments in subsidiaries
The consolidated financial statements include the financial statements of Chalice Gold Mines Limited and its subsidiaries
listed in the following table:
Name
Parent entity
Chalice Gold Mines Limited
Subsidiaries
Chalice Operations Pty Ltd (i)
Chalice Gold Mines (Eritrea) Pty Ltd(1)
Western Rift Pty Ltd (ii)
CGM Minerals Pty Ltd
CGM (Lithium) Pty Ltd
(i) Subsidiaries of Chalice Operations Pty Ltd
Keren Mining Pty Ltd(1)
Universal Gold Pty Ltd(1)
Sub-Sahara Resources (Eritrea) Pty Ltd(1)
(ii) Subsidiaries of Western Rift Pty Ltd
Chalice Gold Mines (Ontario) Inc.(iii)
Coventry Rainy Inc.
Coventry Ontario Inc.
(iii) Subsidiaries of Chalice Gold Mines (Ontario)
Inc.
Chalice Gold Mines (Quebec) Inc.
Chalice Gold Mines (Exploration) Inc.
Country of
Incorporation
% Equity Interest
2018
2017
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Canada
Canada
Canada
Canada
Canada
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(1) In May 2018, the Company commenced voluntary deregistration of Chalice Gold Mines (Eritrea) Pty Ltd, Keren Mining
Pty Ltd, Universal Gold Pty Ltd and Sub-Sahara Resources (Eritrea) Pty Ltd. Subsequent to 30 June 2018 voluntary
deregistration of those subsidiaries was completed. As a result, the Group has deconsolidated those entities from the
Group’s financial statements at 30 June 2018. The net impact of the deconsolidation was a loss of $2,474,433
representing the post acquisition profits or losses of those entities and the effect of foreign exchange.
(a) Recognition and measurement
The consolidated financial statements comprise the financial statements of Chalice Gold Mines Limited (“Company” or “Parent”) and
its subsidiaries as at 30 June each year (the “Group”). Interests in associates are equity accounted and are not part of the
consolidated Group.
Subsidiaries are all those entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Special purpose entities are those entities over which the Group has no ownership interest but in effect the substance of the
relationship is such that the Group
controls the entity so as to obtain the majority of benefits from its operation.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent
accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-group transactions have been eliminated in full.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 72
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Subsidiaries and special purpose entities are fully consolidated from the date on which control is transferred to the Company and
cease to be consolidated from the date on which control is transferred out of the Group.
Investments in subsidiaries held by Chalice Gold Mines Limited are accounted for at cost in the financial statements of the parent
entity less any impairment charges.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting
involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any
non-controlling interest in the acquired. The identifiable assets acquired and the liabilities assumed are measured at their acquisition
date fair values.
The difference between the above items and the fair value of consideration (including the fair value of any pre-existing investment in
the acquiree) is goodwill or a discount on acquisition.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing,
goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units
that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquire are assigned to
those units.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit disposal of, the goodwill associated
with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of
the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and
the portion of the cash-generating unit retained.
Non-controlling interests are allocated their share of net result after tax in the consolidated statement of comprehensive income and
are presented in equity in the consolidated statement of financial position, separately from the equity of the owners of the Parent.
Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if that results in a deficit balance.
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group
loses control over a subsidiary it:
• Derecognises the assets (including goodwill) and liabilities of the subsidiary.
• Derecognises the carrying amount of any non-controlling interest.
• Derecognises the cumulative translation differences recorded in equity.
•
•
•
•
Recognises the fair value of the consideration received.
Recognises the fair value of any investment retained.
Recognises any surplus or deficit in profit or loss.
Reclassifies the Parent’s share of components previously recognised in other comprehensive income to profit or loss
or retained earnings, as appropriate.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest
and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised
at fair value.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 73
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
OTHER INFORMATION
This section of the Notes includes other information that must be disclosed to comply with accounting standards and other
pronouncements, but that is not immediately related to individual line items in the Financial Statements.
24. Auditor’s remuneration
Audit services
HLB Mann Judd:
Audit and review of financial reports
Other services
25.
Related parties
Key management personnel
2018
2017(Restated)
$
$
48,500
5,500
54,000
45,000
-
45,000
The following were key management personnel (“KMP”) of the Group at any time during the reporting period and unless
otherwise indicated were KMP for the entire period:
Executive Directors
T R B Goyder (Executive Chairman) (Managing Director from 1 July 2017 – 23 March 2018)
Non-executive Directors
A W Kiernan (Chairman from 1 July 2017 – 23 March 2018)
S P Quin
M S Ball
Executives
Alex Dorsch (Chief Operating Officer) (appointed 23 March 2018)
R K Hacker (Chief Financial Officer)
K M Frost (General Manager – Exploration)
P Lengyel (Exploration Manager – Canada)
The KMP compensation is as follows:
Short-term employee benefits
Post-employment benefits
Termination benefits
Long term benefits
Share-based payment
2018
$
1,550,896
90,878
-
-
420,831
2,062,605
2017(Restated)
$
1,379,924
99,431
-
-
291,575
1,770,930
Individual director’s and executive’s compensation disclosures
The Group has transferred the detailed remuneration disclosures to the Directors’ Report in accordance with Corporations
Amendment Regulations 2006 (No. 4). These remuneration disclosures are provided in the Remuneration Report section of
the Directors’ Report under Key Management Personnel remuneration and are designated as audited.
Loans to key management personnel and their related parties
No loans were made to KMP or their related parties.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 74
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Other key management personnel transactions with the Group
A number of KMP, or their related parties, hold positions in other entities that result in them having control or significant
influence over the financial or operating policies of those entities.
A number of these entities transacted with the Group in the reporting period. The terms and conditions of the transactions
with management persons or their related parties were no more favourable than those available, or which might reasonably
be expected to be available, on similar transactions to non-director related entities on an arm’s length basis.
The aggregate expense/(income) recognised during the year relating to KMP or their related parties was as follows:
KMP
Transaction
Note
A W Kiernan
Liontown Resources Limited
DevEX Resources Limited
PhosEnergy Limited
Consulting services
Corporate services
Corporate services
Corporate services
(i)
(ii)
(ii)
(ii)
2018
$
-
(88,000)
(68,000)
(21,600)
2017(Restated)
$
46,200
(66,000)
(96,814)
(21,600)
(i)
(ii)
During the reporting period the Group did no incur any fees in relation to the consulting services provided by Mr Kiernan
(2017: $46,200). Fees billed in the prior financial year were billed based on normal market rates for such services and
were due and payable under normal payment terms.
The Group supplied corporate services including accounting and company secretarial services under a Corporate Services
Agreement to Liontown Resources Limited (“LTR”), DevEx Resources Limited (“DEV”) and PhosEnergy Limited (“PEL”) and
geological services of KMP. Mr Goyder is a director of LTR, UEQ and PEL. Mr Kiernan is a director of PEL. Amounts were
billed on a proportionate share of the cost to the Group of providing the services and are due and payable under normal
payment terms.
Amounts outstanding (to)/from the above related parties at reporting date arising from these transactions were as follows:
Assets and liabilities arising from the above transactions
Current payables
Trade debtors
2018
$
2017(Restated)
$
-
29,600
29,600
-
21,048
21,048
26. Commitments and contingencies
Exploration expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration
work to meet the minimum expenditure requirements as specified by various governments in order to maintain exploration
tenements in good standing. Therefore, amounts stated are based on the minimum commitments known within the next 1 to
2 years. The Group may in certain situations apply for exemptions under relevant mining legislation or enter into joint venture
arrangements which significantly reduce working capital commitments. These obligations are not provided for in the financial
report and are payable:
Within 1 year
Within 2-5 years
Later than 5 years
2018
$
232,760
-
-
232,760
2017(Restated)
$
1,152,272
-
-
1,152,272
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 75
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Office lease commitments
Within 1 year
Within 2-5 years
Later than 5 years
2018
$
274,848
359,886
-
634,734
2017(Restated)
$
259,260
566,284
-
825,544
Contingent asset
There are no contingent assets at 30 June 2018 (30 June 2017: nil).
27.
Events subsequent to reporting date
On 5 July 2018, the Company issued 2,357,840 fully paid ordinary shares to KMP and other employees following partial
vesting of performance rights granted in 2015, in accordance with the Company’s LTIP. In addition, on 26 July 2018 the
Board resolved to issue a total of 6,301,804 performance rights to directors (subject to shareholder approval), executives
and employees under the terms and conditions of the Company’s long term incentive plan. Please refer to section 7.3.4
(c) of the Remuneration Report for further details in relation to the performance rights issued subsequent to balance date.
On 10 September 2018, the Company issued 3,000,000 fully paid ordinary shares in consideration for the acquisition of
the remaining 30% interest in its joint venture property within the East Cadillac Gold Project with Monarques Gold
Corporation (TSX-V: MQR).
ACCOUNTING POLICIES
This section of the Notes includes information that must be disclosed to comply with accounting standards and other pronouncements
and information relating to new and revised accounting standards and their impact.
28. Changes in accounting policies
In the year ended 30 June 2018, the Directors have reviewed all of the new and revised Standards and Interpretations issued
by the Australian Accounting Standards Board that are relevant to the Group and effective for the current annual reporting
period.
As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards
and Interpretations on the Group and, therefore no material change is necessary to Group accounting policies.
29. Adoption of new and revised accounting standards
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective and
have not been adopted by the Group for the year ended 30 June 2018 are outlined below.
(i)
AASB 9 Financial Instruments (effective from 1 July 2018)
AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and
financial liabilities and introduces new rules for hedge accounting. All financial assets that are within the scope of
AASB 9 are required to be measured at either amortised cost or fair value, while financial liabilities measured at fair
value through profit and loss will require consideration as to the portion of change in fair value that is attributable to
changes in the credit risk of that liability. Such changes in value with a connection to change in credit risk will be
presented in other comprehensive income rather than profit and loss.
The requirements for hedge accounting under AASB 9 retain similar accounting treatments to those currently available
under AASB139. The new standard introduces greater flexibility to the types of transactions eligible for hedge
accounting while the previous requirement for hedge effectiveness testing has been replaced with the principle of an
‘economic relationship’ and the requirement for retrospective assessment of hedge effectiveness has been removed.
The new standard has however introduced enhanced disclosure requirements regarding the entity’s risk management
activities.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 76
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
(ii) AASB 15 Revenue from Contracts with Customers (effective 1 July 2018)
AASB 15 Revenue from Contracts with Customers is a new Standard introduced by AASB to replace existing revenue
recognition guidance, AASB 11 Construction Contracts, AASB 118 Revenue and AASB 1004 Contributions. The new
standard is aimed at improving financial reporting of revenue and comparability to provide better clarity on revenue
recognition. AASB 15 establishes principles for reporting useful information to users of financial statements about the
nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. It
also introduces new cost guidance which requires certain costs of obtaining and fulfilling contracts to be recognised
as separate assets when specified criteria are met.
The core principle of AASB 15 is than an entity shall recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services.
The Standard introduces a 5-step approach to revenue recognition. Revenue is recognised upon satisfaction of these
performance obligations, which occur when control of goods or services is transferred, rather than on transfer of risks
and rewards. Revenue received for a contract that includes a variable amount is subject to revised conditions for
recognition, whereby it must be highly probable that no significant reversal of the variable component may occur
when the uncertainties around its measurement are removed.
The Group has considered the impact on its consolidated Financial Statements and assessed that the effect of the new
standard will be minimal.
(iii) AASB 16 Leases (effective from 1 July 2019)
AASB16 distinguishes leases and service contracts on the basis of whether an identified asset is controlled by the
customer. Distinctions between operating leases (previously off balance sheet) and finance leases (previously on
balance sheet) are removed under the new standard and replaced by the concept of right of use. Where an entity
has control over and an ongoing right to use an asset, that asset will be recognised on the balance sheet as an asset
with a corresponding liability.
The Group has conducted a preliminary assessment of the forecast impact of AASB 16 on the Group’s profit or loss
and statement of financial position. There will be an increase in both right-of-use assets and lease liabilities and a
reclassification of lease costs to interest and depreciation on adoption of AASB 16. The impact on the Group’s net
assets and profit or loss is not expected to be material, however the impact will be dependent on the leasing
arrangements in place when the standard becomes effective. The mandatory application date for the Group is for the
financial year ending 30 June 2020. The Group does not intend to adopt the standard before its mandatory
application date.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 77
Directors’ Declaration
1.
In the opinion of the directors of Chalice Gold Mines Limited (the ‘Company’):
a.
the financial statements, notes and the additional disclosures in the directors’ report designated as audited, of the
Group are in accordance with the Corporations Act 2001 including:
i. giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance
for the year ended on that date; and
ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001.
b.
there are reasonable grounds to be that the Company will be able to pay its debts as and when they become
due and payable.
c. The statements and notes thereto are in accordance with international Financial Reporting Standards issued by
the International Accounting Standards Board.
2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with
Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is signed in accordance with a resolution of the Board of Directors.
Dated at Perth the 19th day of September 2018
Signed in accordance with a resolution of the Directors:
Tim Goyder
Executive Chairman
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 78
Independent Auditor’s Report
To the Members of Chalice Gold Mines Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Chalice Gold Mines Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June
2018, the consolidated statement of comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (“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. We have determined the matters described below to be the key
audit matters to be communicated in our report.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a world-wide organisation of accounting firms and business advisers
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 79
Key Audit Matter
How our audit addressed the key audit
matter
Voluntary change in accounting policy – exploration
and evaluation expenditure
(Note 3(a) of the financial report)
During the year, the Group changed its accounting
policy regarding its treatment of exploration and
evaluation expenditure. In previous financial years,
including
exploration and evaluation expenditure,
acquisition costs, in relation to areas of interest which
had not reached a stage which permitted reasonable
assessment of
the existence or otherwise of
economically recoverable reserves, was capitalised.
The Group then assessed whether any indicators of
impairment existed which would require the Group to
assess
capitalised exploration and evaluation
expenditure for impairment. The new accounting policy
is to expense exploration and evaluation expenditure,
including the cost of acquisition, in the year when it is
incurred.
The change in accounting policy resulted in the
restatement of affected 2017 balances and
the
disclosure of the restatement of balances reported in
the 2017 financial report.
The change in accounting policy was a key audit matter
due to the size and scope of the change and impact on
the presentation of the financial statements.
Our procedures included but were not
limited to the following:
We considered the appropriateness of
in accounting policy,
the change
ensuring
disclosure
requirements set out in AASB 108 were
complied with.
that
the
We reconciled the restated balances to
the prior year audited balances
ensuring that the change was correctly
calculated and disclosed in the financial
report.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s Annual Financial Report for the year ended 30 June 2018, 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.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 80
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 81
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
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2018.
In our opinion, the Remuneration Report of Chalice Gold Mines Limited for the year ended 30 June
2018 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
19 September 2018
L Di Giallonardo
Partner
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 82
ASX Additional Information
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this
report is set out below.
Shareholdings
Substantial shareholders
The number of shares held by substantial shareholders advised to the Company and their associated interests as at 17 September
2018 were:
Shareholder
Timothy Rupert Barr Goyder
Franklin Resources Inc
Number of ordinary
shares held
45,975,209
31,107,008
Percentage of
capital held
%
17.25
11.67
Class of shares and voting rights
At 17 September 2018 there were 1,670 holders of the ordinary shares of the Company, 4 holders of unlisted share options
and 14 holders of performance rights. The share options and performance rights have been granted under the Company’s
Employee Share Option Plan and Employee Long Term Incentive Plan.
The voting rights to the ordinary shares set out in the Company’s Constitution are:
“Subject to any rights or restrictions for the time being attached to any class or Classes of shares -
a)
b)
at meetings of members or classes of members each member entitled to vote in person or by proxy or attorney:
and
on a show of hands every person who is a member has one vote and on a poll every person in person or by
proxy or attorney has one vote for each ordinary share held.”
Holders of options or performance rights do not have voting rights.
Distribution of equity security holders as at 17 September 2018:
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of equity security holders
Ordinary
Shares
108
217
388
774
183
1,670
Unlisted Share
Options
-
-
-
-
4
4
Performance
Rights
-
-
-
1
13
14
The number of shareholders holding less than a marketable parcel at 17 September 2018 was 204.
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 83
%
17.25
13.16
9.44
7.77
5.17
4.42
2.68
2.07
1.50
1.07
0.98
0.81
0.60
0.57
0.53
0.53
0.53
0.51
0.50
0.47
ASX Additional Information
Twenty largest Ordinary Fully Paid Shareholders
as at 17 September 2018
Number of ordinary
Percentage of
shares held
capital held
Name
Timothy R B Goyder
HSBC Custody Nominees (Australia) Limited
Canadian Registry Control
J P Morgan Nominees Australia Limited
National Nominees Limited
Citicorp Nominees Pty Limited
Jetosea Pty Ltd
BNP Paribas Nominees Pty Ltd
Claw Pty Ltd
Mr Mark Stuart Savage
Buttonwood Nominees Pty Ltd
Mr Anthony Kiernan
Mr Nigel Burgess + Mrs Yukari Burgess
Mrs Marisa Mackow
Methuen Holdings Pty Ltd
ESM Limited
Teragoal Pty Ltd
45,975,209
35,073,909
25,174,268
20,707,509
13,772,086
11,791,704
7,145,251
5,527,820
4,000,000
2,859,034
2,625,438
2,152,040
1,600,000
1,530,000
1,413,616
1,400,000
1,400,000
Mr Philip Scott Button + Ms Philippa Ann Nicol
1,348,261
BNP Paribas Noms Pty Ltd
Calm Holdings Pty Ltd
1,344,705
1,250,000
Total
188,090,850
70.56
CHALICE GOLD MINES | ANNUAL REPORT 2018 | PAGE 84
Chalice Gold Mines Limited
ABN 47 116 648 956
Level 2, 1292 Hay Street
West Perth, Western Australia 6005
T : + 61 8 9322 3960
F : + 61 8 9322 5800
info@chalicegold.com
twitter.com/ChaliceGold
http://www.chalicegold.com
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