ANNUAL REPORT
2019
ABN 14 118 619 042
Contents
Chairman’s Letter
Directors’ Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Shareholder Information
Corporate Directory
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Competent Person Statement
The information in this presentation that relates to Exploration Results is based on information compiled by geologists employed by
Boya SAU (a wholly owned subsidiary of Chesser Resources) and reviewed by Mr Michael Brown, who is a member of the Australian
Institute of Geoscientists (MAIG). Mr Brown is the Managing Director of Chesser Resources Limited. Mr Brown is considered to have
sufficient experience deemed relevant to the style of mineralisation and type of deposit under consideration, and to the activity
that he is undertaking to qualify as a Competent person as defined in the 2012 edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves” (the 2012 JORC Code). Mr Brown consents to the inclusion in this report
of the matters based on this information in the form and context in which it appears. Mr Brown directly holds 1,125,000 fully paid
ordinary shares in the Company and has a direct ownership in 3,000,000 unlisted options to acquire ordinary shares in the Company.
References to prior ASX Announcements
This report contains information extracted from previous ASX market announcements reported in accordance with the JORC
Code (2012) and available for viewing at www.chesserresources.com.au. Chesser Resources confirms that in respect of these
announcements it is not aware of any new information or data that materially affects the information included in any original ASX
market announcement. The announcements are as follows:
Diamba Sud Project:
Announcements dated: 3rd April 2017, 22nd February 2018, 28th May 2018, 27th August 2018, 25th March 2019, 10th April 2019,
6th May 2019, 14th May 2019, 26th August 2019 and 3rd September 2019.
Chairman’s Letter
CHAIRMAN’S LETTER
Chairman’s Letter to Shareholders
Dear Fellow Shareholders,
It gives me great pleasure to present Chesser Resources Limited’s (the “Company” or “Chesser”) 2019 Annual Report.
Drilling completed in the year to June 2019 led to your Company announcing a high grade gold discovery at Area A
within the Northern Arc Target at our Diamba Sud Project. This project lies to the immediate west of the important
Senegal-Mali-Shear- Zone that is associated with the prolific Birimian greenstone belt hosting over 45 million ounces of
gold. Whilst it is early days, we are in a very exciting stage as we focus on defining and expanding the discovery.
Your Company conducted a highly successful exploration program during the year.
This commenced with positive results from deeper auger drilling that confirmed and delineated a large gold
geochemical anomaly on the Diamba Sud project. In January we commenced a Phase 1 drilling program on very wide
spaced lines on the Northern Arc Target and three other anomalous zones. Results from this Phase 1 program were
extremely encouraging, with widespread high-grade gold mineralization in fresh rock encountered. A second phase of
exploration drilling followed, starting in early June and finishing in early July. Post year end your Company received the
assays from this Phase 2 program, with spectacular intersections encountered, confirming the discovery, as well as a
potentially significant mineralised fault at Area D.
While neighbouring properties hint at the potential, there is still a lot of work to define and understand the geology of
the mineralization your Company has discovered to date and explore the rest of the property. Further exploration is
required to properly appreciate the scale, structure, grade and potential economics of gold mineralization at Diamba
Sud. Clearly, a Phase 3 program is required. In that regard, your Company has an in-country team with deep geological
expertise within the Kedougou-Kenieba inlier that is our focus. We are indeed fortunate to have such expertise helping
with the planning and supervision of exploration, as well as the analysis of both existing and future exploration results.
Your Board was confident in the Senegal tenement package acquired in July 2017. This confidence was underpinned by
the view that the Kedougou-Kenieba inlier is a uniquely prospective region for gold exploration, hosting more than 45
million ounces in operating mines, and the discovery made at Diamba Sud has now vindicated this view.
The exploration success achieved this year has been substantial and did not happen by accident. I would like to take
this opportunity to thank my fellow Directors, your Company’s Managing Director, Mike Brown, and his technical and
in-country personnel for their tireless and professional contributions during the past year. I look forward to continued
success as we further prove up the potential of Diamba Sud.
Yours sincerely,
Simon O’Loughlin
Chairman
Chesser Resources Limited Annual Report 2019 | 1
Director’s Report
DIRECTORS’ REPORT
Directors’ Report
The directors of Chesser Resources Limited (the “Company” or “Chesser”) submit herewith the year financial
report of the Company and the entities it controlled for the year ended 30 June 2018 (collectively “Group”). In
order to comply with the provisions of the Corporations Act 2001, the directors report as follows.
Directors
The following persons were directors of Chesser Resources Limited during the whole of the year under review
and up to the date of this report, unless otherwise stated:
• Mr Simon O’Loughlin, Non-Executive Chairman
• Mr Simon Taylor, Non-Executive Director
• Mr Michael Brown, Managing Director (appointed 5 November 2018)
• Mr Stephen Kelly, Executive Director
Company Secretary
Mr Stephen Kelly was the Company Secretary during the whole of the year under review and up to the date of
this report.
Mr Simon O’Loughlin, BA(Acc) (Non-Executive Chairman)
Mr O’Loughlin is the founding member of O’Loughlins Lawyers, an Adelaide based medium sized specialist
commercial law firm. For many years he has practiced both in Sydney and Adelaide, in the corporate and
commercial fields with, in more recent times, a particular focus on the resources sector. He also holds accounting
qualifications. He is a Non-Executive Director of Bod Australia Limited and Petratherm Limited.
Mr O’Loughlin has extensive experience and involvement with companies in the small industrial and resources
sectors. He has also been involved in the listing and back-door listing of numerous companies
on the ASX and National Stock Exchanges. He is a former Chairman of the Taxation Institute of Australia (SA
Division) and Save the Children Fund (SA Division).
Former directorships in last 3 years
In the last 3 years , he has been a director of Kibaran Resources Ltd, Odin Mining Ltd, ARC Exploration Limited,
Piedmont Lithium Limited and Oklo Resources Limited.
Mr Simon Taylor, BSc(Geology), MAIG, GCertAppFin (Finsia) (Non-Executive Director)
Mr Taylor is a geologist with 20 years’ experience throughout Australia and overseas having held senior geologist
and exploration manager positions for numerous ASX listed resource companies. He has gained considerable
experience in exploration, project assessment and joint venture negotiations. His experience includes providing
consulting services to resource companies and financial corporations as a resource analyst. Mr Taylor’s corporate
experience includes project appraisal, advice on placements and fundraising. He is a member of the Australian
Institute of Geoscientists and is the Managing Director of Oklo Resources Limited and Non-Executive Director of
ARC Exploration Limited and Bod Australia Limited.
Former directorships in last 3 years
TW Holdings Limited, King Solomon Mines Limited and Aguia Resources Limited
2 | Annual Report 2019 Chesser Resources Limited
DIRECTORS’ REPORT
Mr Michael Brown, BSc (Geology), BA, MBA
Mr Brown has over 25 years’ experience in exploration, mining, energy, finance and capital markets. He has
held senior executive roles with Kinross Gold and Pacific Hydro and has local and international experience as
an exploration and mine geologist. Mr Brown was most recently a member of the executive team at ASX listed
Austral Gold (ASX: AGD), a junior producer with mines in Chile and Argentina. Prior to that, he was CEO of
Argentex Mining, a TSX Listed precious metals explorer acquired by AGD.
Mr Brown has a MBA from Melbourne Business School, and a double BSc (Honours-Geology), BA from The
University of Melbourne. He is a member of Australian Institute of GeoScientists and is fluent in Spanish. He has
considerable experience in negotiating with local authorities, government agencies and communities and worked
in West Africa in his time with Kinross Gold.
Former directorships in last 3 years
Nil
Mr Stephen Kelly, B.Bus, ACA (Executive Director, Company Secretary and Chief Financial Officer)
Mr Kelly was appointed as the Company Secretary and Chief Financial Officer of the Company on 15 November
2012. A qualified Australian Chartered Accountant, Mr Kelly was previously Chief Financial Officer at Allied Gold
Mining PLC. He has more than 25 years’ international experience in the areas of external and internal audit,
risk management and compliance, treasury and corporate finance across a range of industry sectors including
mining, infrastructure, property development and banking and finance.
Former directorships in last 3 years
Nil
Interests in the shares and options of the Company
As at the date of this report, the interests of the directors in the shares and options of Chesser Resources Ltd were:
Number of Ordinary Shares #
Number of Options over Ordinary Shares #
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Michael Brown
Mr Stephen Kelly
2,833,334
3,500,001
1,125,00
895,000
1,950,000
2,600,000
3,000,000
1,950,000
# Includes shares in which the Director has an indirect interest through associated entities.
Meetings of Directors
The number of meetings of the Company’s board of directors and each board committee held during the year
ended 30 June 2018, and the numbers of meetings attended by each director were as follows:
Number of meetings held
Board Meetings (7)
Number of meetings eligible to attend
Number of meetings attended
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Michael Brown
Mr Stephen Kelly
7
7
5
7
7
7
5
7
The full Board fulfilled the roles of the Audit, Risk and Compliance Committee and the Remuneration and
Nominations Committee during the financial year.
Chesser Resources Limited Annual Report 2019 | 3
Principal Activities
The principal activities undertaken by the Company during the year are summarised as follows:
Permit Renewals
The Company received official notification of the granting of extension of the Diamba Sud and Diamba Nord
exploration permits during the year. These permits, 53.3km2 and 241.9km2 respectively, are valid for three
years and can be extended for an additional three-year period. A 25% reduction of the original permit areas
was required. This provides certainty over the Company’s flagship project, Diamba Sud. During the year the
Youboubou tenement was dropped based on low exploration potential, and the Woye and Garaboureya joint
venture agreements were not renewed based on the lack of encouraging results from auger drilling on these,
and the expiry of the underlying tenements.
Exploration Activities
The Company’s exploration activities during the year were focussed on the Senegal projects, and the Company’s
flagship project Diamba Sud in particular.
DIAMBA SUD
Diamba Sud comprises two rectangular blocks joined by a corridor to create a contiguous tenement (Figure 1).
The northern segment of Diamba Sud (termed DS-1) has an open pit gold mine (Kharakane) operated by Afrigold
along its western margin and has had previous programs of soil geochemistry, rock chip sampling and drilling.
200000
M
T
Z
Sabodala 5.4Moz
DIALE-DALÉM A
SERIES
Barrick
Massawa 3.0Moz
DIAMBA SUD
250000
S
E
N
E
G
A
L
M
A
L
I
S
H
E
A
R
Z
O
N
E
50 Kilometres
Barrick
Loulo 12.5Moz
Algom Resources
Tabakoto 3.8Moz
Barrick
Gounkoto 5.5Moz
0
0
0
0
0
5
1
0
0
0
0
0
4
1
IAMGOLD
Boto Project 2.6Moz
Faleme Group
B2 Gold
Fekola Project 7.6Moz
SENEGAL PROJECT LOCATIONS
Koft Series
Gold Mine
Cover Sequences
Advanced Project
Chesser Tenements
SMSZ
Country Border
Neoproterozoic Taudeni Basin
Calc-alkaline lavas volcanic rocks
Mauritanides
(Hercynian mobile belt)
Volcaniclastic sediments
& Carbonate rocks
Birimian Lithologies
Kofi Series Metasedimentary rocks
Peraluminous Granite
Metaluminous calc-alkaline rocks
Theleiitic basalts
Kakadian Batholith
Figure 1: Schematic regional geology of eastern Senegal, showing the Diamba Sud Project and its
proximity to both the SMSZ, and the major gold operations and projects on or adjacent to splays
off the SMSZ.
4 | Annual Report 2019 Chesser Resources Limited
DIRECTORS’ REPORT
Early in the year, excellent assay results were received from a 72-hole saprolite auger drilling program. 59
samples returned assays greater than 1g/t gold, with the highest result being 1m at 21.1 g/t gold. Significant
intercepts included:
16m at 2.57 g/t gold (from 3m in hole DSA2861T) including 8m at 4.83 g/t gold
9m at 2.87 g/t gold (from 8m in hole DSA2798W) including 2m at 4.93 g/t gold
10m at 2.75 g/t gold (from 11m in hole DSA2798T) including 3m at 4.03 g/t gold
9m at 2.31g/t gold (from 9m in hole DSA2796S) including 5m at 3.95 g/t gold
6m at 2.11 g/t gold (from 12m in hole DSA2798N) including 3m at 3.74 g/t gold
These results confirmed the continuity and extended the depth of the previously identified significant anomalous
auger gold trend with many of the intersections ending in mineralisation. The deepest hole was 28m with an
average hole depth of 14m. The auger exploration program was highly successful, identifying a significant gold
anomalous trend extending over 5km in length and up to 2km in width at the Diamba Sud prospect.
Figure 2: Diamba Sud Project, showing Area A discovery within the large gold geochemical
anomaly that comprises the Northern Arc area, the Area D high priority exploration target,
location of all drilling to date and the numerous auger anomalies that remain untested.
Chesser Resources Limited Annual Report 2019 | 5
DIRECTORS’ REPORT
The success of the auger exploration program led to an initial RC drilling campaign (Phase 1). The Phase
1 reverse circulation (RC) drilling program was focussed on locating the source of the high grade saprolite-
hosted gold anomalies in the northern part of a broad ring structure (Figure 2), and understanding the
style, nature and potential host of the mineralisation. The northern block of Diamba Sud (DS1) hosts a
broad 4.5km by 4km ring-like geochemical anomaly comprised of a number of apparently distinct trends
and responses. This anomaly is thought to be related to the contact of an intrusive body, visible in a
Government sponsored aeromagnetic survey.
A total of 70 RC holes were drilled for 4,671m (avg depth ~67m). Phase 1 drilling started in late
January 2019 with drilling completed in late March 2019. The program encountered widespread gold
mineralisation in both oxide and bedrock, with encouraging fresh rock intercepts, and was therefore
followed by a Phase 2 drilling program.
The Phase 1 program successfully delineated three large gold targets for follow-up drill testing: Northern
Arc, Western Flank and Southern Zone. Two of these targets were further tested during Phase 2 drilling
(26 RC holes for 863m), started during the reporting year and finished subsequent to year end, with a
discovery confirmed at the Northern Arc target post year end.
Northern Arc Target
A discovery was announced at Northern Arc at Area A following high-grade intersections in drilling in Phase
1 and discovery of continuous high-grade mineralised zones in Phase 2. A second significant target area is
Area D, where drilling has indicated the presence of a potentially significant mineralised fault.
Area A
Area A (Line A) was initially tested with 8 45-75m RC holes in Phase 1 drilling, drilling to the northwest and
southeast. Best intersections included:
12m at 3.65g/t gold from 42m, including 8m at 4.47 g/t gold from 46m with
the hole ending in mineralisation,
3m at 6.19g/t gold from 80m, including 1m at 16.1g/t gold from 81m,
11m at 3.54g/t gold from 38m and 2m at 2.58g/t gold from 58m with the
hole ending in mineralisation,
5m at 3.18g/t gold from 70m,
2m at 5.52g/t gold from 51m,
The follow-up Phase 2 drill program testing tested the high priority Northern Arc and Western Flank
targets commenced in early June and was completed post year end (mid-July), with 26 RC holes drilled (for
2,873m). Assay results received post year end confirmed a discovery at Diamba Sud.
Based on the alignment of intersections Phase 2 drilling was undertaken on a western azimuth for
potential northerly trending structures. A total of 6 RC holes were drilled, ranging from 81 to 129m depth.
6 | Annual Report 2019 Chesser Resources Limited
DIRECTORS’ REPORT
Drilling results received in August confirmed a high-grade gold discovery at Area A within the Northern Arc
Target. Multiple zones of significant gold mineralisation were intersected, including:
21m at 6.62g/t gold from 53m, including 1m at 30.60g/t gold from 69m and
4m at 3.44g/t gold from 76m in hole DSR093
14m at 9.53g/t gold from 75m, including 2m at 21.85g/t gold from 78m and
2m at 13.15g/t gold from 83m in hole DSR092
6m at 7.27g/t gold from 60m; and
- 11m at 2.15g/t gold from 70m; and
- 6m at 3.17g/t gold from 107m in hole DSR088
This discovery appears to be consistent with pressure-shadow style of mineralisation associated with the
northern contact of an intrusive granodioritic body. This body is indicated in the regional geological map and
identifiable in the regional aeromagnetic survey. The large ring-like gold geochemical anomaly at Diamba Sud has
been interpreted to be associated with this contact area and drilling at Area A appears to support this theory.
Barrick’s Massawa project, 50km to the west of Diamba Sud is an example of this type of deposit. A technical
report released in July 2019 indicates a measured and indicated resource of 3 million ounces at 4g/t gold1.
Granny Smith mine, West Australia, is another Paleoproterozoic analogue to this type of deposit. Its current
reported resource (MII) is approximately 7.8 million ounces at 5.27g/t gold2.
Figure 3: Area A discovery drilling and selected significant intercepts.
1 Technical Report on the Feasibility Study of the Massawa Gold Project, Senegal, Report for 43-101, July 23, 2019
2 Mineral Resources and Mineral Reserves Supplement, 2018. Gold Fields Ltd, p 71
Chesser Resources Limited Annual Report 2019 | 7
DIRECTORS’ REPORT232233,400233,50233,300mE1,429,500 mN233,233,21,429,700 mN33,200mEDIAMBA SUD PROJECTArea A Plan View>1.0>0.5<0.1>0.1>5.0Au Intersection (g/t)RC Drill HoleXPreviously released g/t AuDSR091DSR090DSR088DSR089DSR030DSR031DSR032DSR092DSR093DSR033DSR035DSR037DSR036DSR0346m @ 3.17g/t gold2m @ 7.09g/t gold12m @ 3.65g/t gold14m @ 2.83g/t gold6m @ 2.91g/t gold6m @ 3.08g/t gold11m @ 3.54g/t gold14m @ 9.53g/t gold21m @ 6.62g/t gold5m @ 3.18g/t gold6m @ 7.27g/t gold3m @ 2.48g/t goldN50metres0 The mineralised zones appear to dip 35-40 degrees to the east, with a northerly strike. The mineralised zones
(>0.5g/t gold) typically lie within broader low-grade mineralised zones of >0.1g/t gold. To date mineralisation
has all been encountered in fresh rock, with pyrite and potassic alteration.
Further drilling, and in particular diamond drilling, is required to confirm the nature and orientation of this
potentially significant new gold discovery at Area A.
Figure 4: Northern Arc Target: Section 1429610N looking north, showing significant drill intersections.
Area D (Line D)
Phase 1 drilling at Area D commenced in late January, with a total of 11 holes completed, drilling on a
northwest and southeast azimuth. Best intersections included 18m at 5.61g/t gold in hole DSR022 and
8m at 3.48g/t gold in hole DSR018, (Figure 3). A number of holes failed to reach target depth, with excess
water and clay in the saprolite material causing them to be terminated. This was interpreted to indicate the
presence of deeper weathering along a structure.
Significant Intersections included:
18m at 5.61g/t gold from 6m, including 8m at 11.84 g/t gold from 14m,
10m at 2.72 g/t gold from 19m, including 1m at 16.30g/t gold from 23m,
8m at 3.48 g/t gold from 34m,
11m at 1.16g/t gold from 19m.
8 | Annual Report 2019 Chesser Resources Limited
DIRECTORS’ REPORTBASE OF SAPROLITEFRESH ROCKDSR091DSR090123m129m75m105m81mDSR092DSR093DSR035233,300mE233,350mE233,400mE180mRL160mRL233,200mE233,250mE60mRL80mRL100mRL40mRL20mRL-20mRL0mRL140mRL180mRL160mRL60mRL80mRL100mRL120mRL40mRL20mRL-20mRL0mRL140mRL233,150mEWE50m0mDIAMBA SUD PROJECTArea A - Northern Arc TargetSection 1429610NRC Drill Hole>0.1g/t Au Mineralised HaloAu Intersection (g/t)XPreviously released g/t Au>1.0>0.5<0.1>0.1 >5.0?6m @ 1.62g/t gold6m @ 2.91g/t gold21m @ 6.62g/t gold14m @ 9.53g/t gold2m @ 1.79g/t gold6m @ 3.08g/t gold4m @ 3.44g/t gold14m @ 2.83g/t gold2m @ 1.93g/t goldFAULT
Phase 2 drilling was undertaken on a westerly azimuth to test for potential north and northwest trending host
structures extending from the previously reported significant intercepts from the Phase 1 program. A total of
6 holes were drilled on 50m step-outs to the north and south of hole DSR018. Preliminary results from a GAIP
survey completed were used in planning these holes, following a conductivity high interpreted as a weathered
structure (Figure 6). Hole DSR103 intersected 53m at 2.61g/t gold from 57m, with a higher-grade zone, of 17m
at 4.97g/t gold from 59m (Figure 5, Table 1). This higher-grade zone is associated with an oxidised fault zone
between 55m and 66m, and continues as a mineralised zone, in fresh rock, from 70m down to 110m.
Figure 5: Northern Arc Target Area D, Section 1429500N looking north, showing significant drill intersections reported in this
release (dashed line shows estimated saprolite-fresh-rock interface)
Hole DSR097, drilled 50m to the south of DSR103, intersected 4m at 2.23g/t gold from 93m and 4m at 2.75/t
gold from 99m along the interpreted host structure (Figure 6). These lie within a low-grade halo (>0.1g/t gold)
28m at 0.97g/t gold from 75m. Hole DRS098, drilled 50m south of DRS097 and adjacent to DSR018, failed to
reach the target depth due to excessive water and clay and was abandoned at 22m. The southernmost hole
(DSR099) was also abandoned short of its target depth at 77m, however it did intersect 2m at 1.73g/t gold.
Two holes drilled to the north of DSR103, targeting the IP anomaly and inferred host structure failed to intersect
any mineralisation. Follow-up drilling testing for potential northerly extensions to the significant mineralisation
encountered in hole DSR103 is planned.
1 Technical Report on the Feasibility Study of the Massawa Gold Project, Senegal, Report for 43-101, July 23, 2019
2 Mineral Resources and Mineral Reserves Supplement, 2018. Gold Fields Ltd, p 71
Chesser Resources Limited Annual Report 2019 | 9
DIRECTORS’ REPORT??OXIDISED MINERALISED FAULT/SHEAR 17m @ 4.97g/t53m @ 2.61g/t 14m @ 1.74g/tBASE OF SAPROLITEFRESH ROCK111m99m123mDSR103DSR012DSR011DSR096DSR013140mRL120mRL60mRL40mRL-20mRL0mRL20mRL232,550mE232,600mE232,650mE80mRL100mRL232,700mE60mRL232,450mE232,500mE140mRL120mRL100mRL0mRL-20mRL232,400mE232,350mE80mRL20mRL40mRL50m0mDIAMBA SUD PROJECTNorthern Arc Target - Area D Section 1429500RC Drill HoleAu Intersection (g/t)>1.0>0.5<0.1>0.1 >5.0WEXPreviously released g/t Au The second area tested was to the immediate north and south of the high-grade oxide intersection
previously reported from hole DSR022 (18m at 5.61g/t gold from 6m). A total of 6 holes were drilled in
50m step-outs along the interpreted north-northwest strike of the host structure. Drilling intersected
oxide mineralisation, including 14m at 1.74g/t gold from 8m in hole DRC096, 2m at 1.47g/t gold in oxide
from 18m in hole DRS095 and 2m at 4.99g/t gold from 22m in hole DSR100. It would appear that the very
limited drilling did not intersect a fresh rock source and closer spaced drilling on fences with wider east-
west coverage will need to be drilled to properly test this zone. The oxide intersects do suggest a possible
horizontal zone of elevated oxide mineralisation near surface, although not of the size or grade of that
encountered in DSR022. More drilling will be needed to better define both the extents and grade of this
supergene zone.
Significant Intersections included:
53m at 2.61g/t gold from 57m, including 17m at 4.97g/t gold from 59m
4m at 2.23g/t gold from 93m, and
4m at 2.75g/t gold from 99m
14m at 1.74g/t gold from 8m
2m at 4.99g/t gold from 22m
Figure 6: GAIP Chargeability and Conductivity induced polarization surveys undertaken in June, with linear weathered
structure in the Conductivity visible and selected significant intersect
10 | Annual Report 2019 Chesser Resources Limited
DIRECTORS’ REPORT1 - 5Gold (g/t)< 0.10.1 - 0.50.5 - 1DSR020DSR097DSR098DSR019DSR104DSR105DSR103DSR099DSR101DSR102DSR016DSR018DSR015DSR017DSR014DSR013DSR012DSR100DSR095DSR094DSR011DSR022DSR021DSR096>1.0>0.5<0.1>0.1>5.0Au Intersection (g/t)RC Drill HoleXPreviously released g/t AuN100metres0DIAMBA SUD PROJECTPhase 1&2 RC drilling programGold (g/t) plan view(Background: IP Resistivity)18m @ 5.61g/t gold8m @ 3.48g/t gold2m @ 1.73g/t gold14m at 1.74g/t gold2m @ 4.99g/t gold4m @ 2.23g/t gold53m @2.61g/t goldinc 17m @ 4.97g/t gold4m @2.75g/t goldDSR020DSR097DSR098DSR019DSR104DSR105DSR103DSR099DSR101DSR102DSR016DSR018DSR015DSR017DSR014DSR013DSR012DSR100DSR095DSR094DSR011DSR022DSR021DSR096>1.0>0.5<0.1>0.1>5.0Au Intersection (g/t)RC Drill HoleXPreviously released g/t AuN100metres0DIAMBA SUD PROJECTPhase 1&2 RC drilling programGold (g/t) plan view(Background: IP Conductivity)18m @ 5.61g/t gold8m @ 3.48g/t gold2m @ 1.73g/t gold14m at 1.74g/t gold2m @ 4.99g/t gold4m @ 2.23g/t gold53m @2.61g/t goldinc 17m @ 4.97g/t gold4m @2.75g/t gold Area F
Area F was drilled during Phase 1, covering the south western area within the Northern Arc anomaly.
Holes were drilled on a southeast azimuth. Drilling returned two holes with notable gold mineralisation
(Figure 3). Hole DSR051 intersected 6m at 4.70g/t gold in saprolite followed by 19m at 1.49g/t gold in fresh
rock. Hole DSR073 returned a comparable saprolite intersection of 4m at 6.51g/t gold, with lower grade
mineralisation in fresh rock.
Five follow-up holes were drilled in Phase 2, on a westerly azimuth to test for possible northerly trending
structures. Whilst results were encouraging further drilling is needed to properly understand the nature and
orientation of mineralisation intersected to date.
Significant Intersections:
6m at 4.70g/t gold from 26m and 19m at 1.49g/t gold from 39m,
4m at 6.51g/t gold from 26m including 2m at 12.00g/t gold,
2m at 4.91g/t gold from 26m; and 2m at 5.35g/t gold from 34m,
12m at 1.14g/t gold from 30m.
Figure 7: Section of Area F RC holes on Northern Arc Target looking northeast showing significant gold intercepts.
Solid/dashed line shows saprolite-fresh rock boundary.
Chesser Resources Limited Annual Report 2019 | 11
DIRECTORS’ REPORTNWSE63mDSR073DSR07463mDSR07260m60mDSR051232,400mE232,425mE232,450mE1,428,975mN1,428,950mN1,429,000mN1,429,025mN160mRL140mRL120mRL100mRL80mRL160mRL140mRL120mRL100mRL80mRL232,375mE232,350mERC Drill HoleIntersection of >1.0g/t AuIntersection of >0.5g/t AuIntersection of <0.1g/t AuIntersection of >0.1g/t AuIntersection of >5g/t AuGold (g/t)20m0mDIAMBA SUD PROJECTArea FXPreviously released g/t Au6m @ 4.70g/t gold4m @ 6.51g/t goldinc 2m @12.00 g/t gold19m @ 1.49g/t BASE OF SAPROLITEFRESH ROCK
Western Flank target: a potential trend of up to 10km in length, as defined by artisanal workings, an
aeromagnetic feature (potential splay off the SMSZ). Phase 1 drilling consisted of 4 RC holes, drilled on
an east and west azimuth. The mineralised zone was interpreted to represent a structure trending SSE
extending to the 2016 RC drilling conducted by the previous owner. The best intercept was 6m at 7.79g/t
gold from 39m.
Phase 2 drilling consisted of 3 holes to test under and 50m to the north and south of the significant
intersection. Although the drilling intersected the targeted structure, with brecciation and pyrite, no
significant mineralisation was detected. Review of the preliminary GAIP data shows that the main structure
(“the Western Splay”) is actually 2km to the west of where the Western Flank drilling was, suggesting the
original drilling intersected a sub parallel structure. The potential of the Western Splay is significant, based
on splays off the SMSZ hosting all the main deposits on the Mali side of the SMSZ. This structure will be
tested in future exploration drilling and has an apparent length of nearly 6km.
Significant Intersections:
6m at 7.79g/t gold from 39m,
16m at 1.05/t gold from 4m, including 4m at 2.98/t gold from 4m
W
160mRL
,
2
3
0
9
8
0
m
E
,
2
3
1
0
0
0
m
E
,
2
3
1
0
2
0
m
E
,
2
3
1
0
4
0
m
E
,
2
3
1
0
6
0
m
E
,
2
3
1
0
8
0
m
E
,
2
3
1
1
0
0
m
E
,
2
3
1
1
2
0
m
E
,
2
3
1
1
4
0
m
E
E
160mRL
16m @ 1.05g/t gold
inc 4m at 2.98 g/t gold
D S R 056
D S R 057
D S R 052
D S R 053
D S R 054
R055
S
D
8
5
0
R
S
D
140mRL
120mRL
100mRL
6m @ 7.79g/t gold
60m
60m
60m
60m
60m
60m
60m
80mRL
60mRL
0m
20m
DIAMBA SUD PROJECT
LINE 2780
RC Drill Hole
X
Previously released g/t Au
Gold (g/t)
Intersection of >5g/t Au
Intersection of >1.0g/t Au
Intersection of >0.5g/t Au
Intersection of >0.1g/t Au
Intersection of <0.1g/t Au
Figure 8: Section of Traverse 2780 RC holes on Western Flank looking north showing significant gold intercepts.
Solid/dashed line shows saprolite-fresh rock boundary.
Southern Zone target: numerous widespread drill intersections located 200m to the northwest of
significant previous drill results (including 14m at 2.85 g/t gold, including 4m at 4.43g/t gold, Figure 3).
The Southern Zone was tested in Phase 1, with encouraging results. The area is marked as a cluster of
12 | Annual Report 2019 Chesser Resources Limited
140mRL
120mRL
100mRL
80mRL
60mRL
DIRECTORS’ REPORTBASE OF SAPROLITEFRESH ROCK medium to high gold in auger geochemical anomalies at the southern arc of the large circular geochemical
anomaly at DS1. This cluster covers an area of 1km by 1km. The area is planned to be tested with future follow-
up drilling.
Significant Intersections:
4m at 6.85g/t gold from 20m,
4m at 1.12g/t gold from 2m.
The Southern Zone target has not yet had follow-up drilling post the Phase 1 RC drilling program.
2
3
2
,
3
5
0
m
E
2
3
2
,
4
0
0
m
E
D S R 060
D S R 059
17m @ 1.33g/t gold
2
3
2
,
4
5
0
m
E
D S R 061
160mRL
W
140mRL
120mRL
100mRL
2
3
2
,
5
0
0
m
E
160mRL
E
140mRL
120mRL
D S R 062
6m @ 1.19g/t gold
100mRL
3m @ 3.30g/t gold
80mRL
60mRL
40mRL
7m @ 1.14g/t gold
80mRL
63m
60m
63m
2m @ 3.40g/t gold
2m @ 5.84g/t gold
75m
4m @ 3.37g/t gold
60mRL
40mRL
30m
0m
DIAMBA SUD PROJECT
LINE 2640
RC Drill Hole
X
Previously released g/t Au
Gold (g/t)
Intersection of >5g/t Au
Intersection of >1.0g/t Au
Intersection of >0.5g/t Au
Intersection of >0.1g/t Au
Intersection of <0.1g/t Au
Figure 9: Section of Traverse 2640 RC holes on Southern Zone, looking north showing significant gold intercepts.
Solid/dashed line shows saprolite-fresh rock boundary.
The Area A discovery and Area D intersections within the Northern Arc exhibit the key characteristics of other
large gold systems in the region, including the nearby world-class Gounkoto/Loulo (5.5/12Moz) and Fekola
(7.6Moz) deposits:
• Spatially related to splays off the Senegal Mali Shear Zone (SMSZ)
• Northerly trend of mineralisation
• Association of potassic alteration with mineralisation and pyrite with high gold grades
Proposed Future Activity
A full review of all exploration results is underway with drilling activities (diamond drilling) expected to
commence in late October, following the wet season in Senegal and subject to access.
Chesser Resources Limited Annual Report 2019 | 13
DIRECTORS’ REPORTBASE OF SAPROLITEFRESH ROCK
Table 1: Significant fold intersections from Diamba Sud Phase 1 RC drilling
Hole ID
From
DSR018
DSR022
including
including
DSR027
including
including
DSR030
including
DSR033
DSR036
DSR037
DSR048
DSR051
DSR052
DSR056
including
DSR059
DSR060
DSR061
DSR073
including
12
34
6
14
16
61
71
75
80
81
42
46
38
51
54
58
51
70
20
26
33
39
39
4
4
44
49
15
31
20
53
56
26
26
55
To
14
42
24
22
18
63
78
78
83
82
54
54
49
52
55
60
53
75
24
32
34
58
45
20
8
45
51
18
32
37
54
60
30
28
57
Interval
(m)
2
8
18
8
2
2
7
3
3
1
12
8
11
1
1
2
2
5
4
6
1
19
6
16
4
1
2
3
1
17
1
4
4
2
2
Gold
(g/t)
1.8
3.48*
5.61
11.84
22.1
1.76
2.42
3.87
6.19
16.1
3.65*
4.47*
3.54
1.24
1.19
2.58*
5.52
3.18*
6.85
4.70
1.09
1.49
7.79
1.05
2.98
1.11
5.84
3.30
1.20
1.33
1.48
3.37
6.51
12.00
1.05
Intervals are reporting using a threshold of 1 g/t or greater average over
the interval and selects all material greater than 0.5 g/t. No interpretation
can be made regarding true widths of the interval.
*hole ended in mineralisation.
**Hole DSR103 is reported using a threshold of 1g/t Au or greater average
over the interval and selects all material greater than 0.3g/t Au with a
maximum of 2m of internal dilution.
14 | Annual Report 2019 Chesser Resources Limited
Hole ID
From
To
Interval
(m)
Gold
(g/t)
DSR088
DSR089
including
DSR090
DSR091
DSR092
including
Including
DSR093
including
DSR084
DSR085
DSR086
DSR087
DSR095
DSR096
DSR097
DSR099
DSR100
DSR101
DSR103**
including
Line A
66
81
87
96
100
113
117
84
83
95
101
107
94
110
116
119
126
24
101
121
89
80
85
102
14
74
70
80
Line F
28
36
42
22
24
34
20
22
40
88
97
103
50
65
24
113
110
76
60
70
86
92
97
107
116
82
82
93
100
104
93
104
113
118
120
20
87
119
75
78
83
100
8
53
69
76
26
34
30
18
20
30
18
8
38
87
93
99
48
63
22
112
57
59
6
11
1
4
3
6
1
2
1
2
1
3
1
6
3
1
6
4
14
2
14
2
2
2
6
21
1
4
2
2
12
4
4
4
2
14
2
1
4
4
2
2
2
1
53
17
7.27
2.15
1.7
2.37
1.41
3.17
3.23
7.09
13.4
3.19
1.18
2.48
2.21
2.91
1.23
2.13
3.08
2.46
2.83
1.93
9.53
21.85
13.15
1.79
1.62
6.62
30.6
3.44
4.91
5.35
1.14
2.25
1.66
2.05
1.47
1.74
1.50
1.34
2.23
2.75
1.73
1.03
4.99
1.03
2.61
4.97
DIRECTORS’ REPORT Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
Corporate activities
During the year the Company:
• Appointed Mr Michael Brown Managing Director on 5th November 2018. In December 2018, the Company
appointed highly experienced geologist Gareth O’Donovan (ex-SRK Exploration) as Exploration Manager.
• Completed a placement to sophisticated and institutional investors in January 2019, pursuant to which 20.8
million shares were issued at an issue price of A$0.038 per share to raise $789,640 before costs. In addition,
the Company entered into agreements to issue 2.92 million shares to Directors at the Placement price of $0.038
per share to raise funds totaling $110,960. The Director subscription agreements completed in March 2019
after the requisite shareholder approvals were obtained.
• Completed a private placement to sophisticated and institutional investors on 23 May 2019 to raise $975,000
(before costs) through the issue of 24,375,000 fully paid ordinary shares at an issue price of $0.04 per share.
Operating result
The Company reported a loss after tax for the year of $2,018,453 (2018: loss of $957,352). The significant items
affecting the loss after tax were:
•
Impairment of capitalised exploration and evaluation expenditure totaling $732,955 (2018: $7,591) in relation
to the Woye, Youboubou and Garaboureya tenements which the Company determined to relinquish or
surrender as the results of exploration activities undertaken on those tenements did not justify further
exploration activity being undertaken.
• A general increase in operating expenditure in year ended 30 June 2019 reflecting the first full year of
operations following the acquisition of the Senegal subsidiaries (2018: approximately 9 months of operations).
• An increase in key management personnel and employee remuneration expense to $467,368 (2018: $
380,180) as a consequence of the appointment of Mr Michael Brown as the Company’s Managing Director
including a transition period during which the services of both Mr Brown and Dr Simon McDonald, the previous
Chief Executive Officer of the Company, were retained.
Significant changes in the reporting year
The financial position and performance of the group was particularly affected by the following events and transactions
during the year-ended 30 June 2019:
•
On 4 January 2019, Chesser issued 20,780,000 fully paid ordinary shares at an issue price of $0.038 to raise
$789,640 before transaction costs.
•
•
On 4 January 2019 and 19 January 2019, the Company issued 2,000,000 unlisted options with an exercise price
of $0.05 and an expiry date of 30 November 2021 and 1,246,8000 fully paid ordinary shares to Taylor Collison
as consideration for corporate advisory and lead manager services provided in relation to the 4 January 2019
capital raising.
On 15 March 2019 the Company issued the following equity securities:
i.
2,920,000 fully paid ordinary shares to Directors at an issue price of $0.038 to raise $110,960 before
transaction costs.
ii. 600,000 loan funded shares to Mr Michael Brown at an issue price of $0.05 per share. The non-recourse
loan is repayable by Mr Brown from proceeds received by Mr Brown on any sale of the shares.
iii. 5,500,000 unlisted options with an exercise price of $0.05 and an expiry date of 30 November 2021 issued
to Directors.
Chesser Resources Limited Annual Report 2019 | 15
21 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
iv. 1,500,000 unlisted options with an exercise price of $0.05 and an expiry date of 1 December 2022 issued
to Mr Gareth O’Donovan, the Company’s Exploration Manager.
v. 175,200 fully paid ordinary shares were issued to Taylor Collison in payment of the lead manager fee
payable on the 2,920,000 fully paid ordinary shares issued to Directors.
• On 23 May 2019 the Company issued 24,375,000 fully paid ordinary shares at an issue price of $0.04 to raise
$975,000 before costs.
Dividends
No dividends were paid or declared during the year and no recommendation is made as to payment of dividends.
Events occurring after balance sheet date
Except as noted below, no matter or circumstance has arisen since the end of the year that has significantly affected,
or may significantly affect the Group’s operations, the result of those operations or the Group’s state of affairs:
• On 19 September 2019, the Company issued 31,507,295 fully paid ordinary shares at an issue price of $0.06 to
raise $1,890,437 before costs.
Likely developments and expected results of operations
Following the highly encouraging exploration results to date which have confirmed a new high-grade gold discovery at
the Diamba Sud Project it is anticipated that the short-term focus of the Group will continue to be the exploration of
the Diamba Sud Project with additional exploration activity being undertaken at the Diamba Nord Project.
Environmental Regulation
The Company was not subject to any significant environmental regulation under a law of the Commonwealth of a
State or Territory of Australia.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
attached to this report.
Shares under Option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Grant Date
Expiry Date
Exercise price
of options
Number under
options
12/07/2017
12/07/2017
11/09/2017
11/09/2017
04/01/2019
15/03/2019
15/03/2019
15/03/2019
15/03/2019
31/12/2019
31/12/2020
31/12/2019
31/12/2020
31/12/2021
31/12/2021
31/12/2021
31/12/2022
31/12/2022
$0.06
$0.10
$0.06
$0.10
$0.05
$0.05
$0.05
$0.05
$0.05
3,300,000
3,300,000
1,000,000
1,000,000
2,000,000
500,000
5,000,000
500,000
1,000,000
17,600,000
16 | Annual Report 2019 Chesser Resources Limited
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DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
No option holder has any right under the options to participate in any other share issue of the company or any other entity.
Shares issued as a result of the exercise of options
No shares were issued during the financial year, and up to the date of this report, as a result of the exercise of options.
Remuneration Report (Audited)
a) Policy for determining the nature and amount of key management personnel remuneration
The Board of Chesser Resources Limited is responsible for determining and reviewing compensation arrangements for
the Non- Executive Directors and the Executive Director. The Board's remuneration policy is to ensure that the
remuneration package properly reflects the person's duties and responsibilities, with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high -quality board and executive team. Such officers are given
the opportunity to receive their base emolument in a variety of forms. It is intended that the manner of payment chosen
will be optimal for the recipient without creating undue cost to the Group. In accordance with best practice corporate
governance, the structure of non-executive director and executive remuneration is separate and distinct.
I.
Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
Remuneration of non-executive directors is determined by the Board, within the maximum amount approved by the
shareholders from time to time (currently set at an aggregate of $400,000 per annum).
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst directors is reviewed annually. The Board considers the fees paid to non-executive directors of comparable companies
when undertaking the annual review process.
Each non-executive director receives a fee for being a director of the Group. Non-Executive Directors receive an annual fee of
$40,000. Non-Executive Directors who are called upon to perform extra services beyond the director’s ordinary duties may be
paid additional fees for those services. No fees were paid to Non- Executive Directors for additional services during the year
ended 30 June 2019(2018: $Nil).
Non-executive directors may also be granted options from time to time. The options granted are considered by the Board to be
an effective means of appropriately compensating Directors whilst preserving the Company’s cash reserves and providing an
alignment between Director and shareholder interests.
Executive Director and Key Management Personnel Remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Group so as to:
•
•
•
•
Reward executives for Group and individual performance against agreed targets;
Align the interest of executives with those of shareholders;
Link reward with the strategic goals and performance of the Group; and
Ensure total remuneration is competitive by market standards.
Chesser Resources Limited Annual Report 2019 | 17
23 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
Structure
In determining the level and make-up of executive remuneration, the Board has had regard to market levels of
remuneration for comparable executive roles. It is the Board's policy that employment contracts are entered into with
all senior executives.
Variable Remuneration - Short and Long-Term Incentives
Objective
The objectives of the incentives plan are to:
•
Recognise the ability and efforts of the employees of the Group who have contributed to the success of the
Group and to provide them with rewards where deemed appropriate;
Provide an incentive to the employees to achieve the long-term objectives of the Group and improve the
performance of the Group; and
Attract persons of experience and ability to employment with the Group and foster and promote loyalty between
the Group and its employees.
•
•
Structure
Long term incentives granted to senior executives are delivered in the form of options in accordance with an Employee
Share Option Plan. As part of the Group's annual strategic planning process, the Board and management agree upon a
set of financial and non-financial objectives for the Group. The objectives form the basis of the assessment of
management performance and vary but are targeted directly to the Group's business and financial performance and
thus to shareholder value.
b)
Remuneration, Group performance and shareholder wealth
The development of remuneration policies and structures is considered in relation to the effect on Group performance
and shareholder wealth. They are designed by the Board to align Director and Executive behaviour with improving
Group performance and ultimately shareholder wealth. The Board considers at this stage in the Group’s development,
that share price growth itself is an adequate measure of total shareholder return.
Executives are currently remunerated by a combination of cash base remuneration and options. The options granted
are considered by the Board to provide an alignment between the employees and shareholders interests.
The table below shows for the current financial year and previous four financial years the total remuneration cost of
the key management personnel, earnings per ordinary share (EPS), dividends paid or declared, and the closing price of
ordinary shares on ASX at year end.
Financial Year
2019
2018
2017
2016
2015
Total
Remuneration
$
533,391
417,200
215,700
202,546
1,282,075
EPS
(Cents)
(0.95)
(0.49)
(0.58)
(0.31)
8.59
Dividends
(Cents)
Share Price
(Cents)
-
-
-
-
-
4.4
6.0
4.5
3.2
3.4
18 | Annual Report 2019 Chesser Resources Limited
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DIRECTORS’ REPORT Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
Given the stage of the Company’s development and the fact that it does not currently have any revenue producing
operations, the Board does not consider EPS or dividends paid or declared to be meaningful measures for assessing
executive performance.
Key management personnel
The following persons were key management personnel of the Group during the financial year (unless noted
otherwise the persons listed were key management personnel for the whole of the financial year):
Name
Simon O’Loughlin
Simon Taylor
Michael Brown
Stephen Kelly
Simon McDonald
Position Held
Non-Executive Director
Non-Executive Director
Managing Director (appointed 5 November 2018)
Executive Director, CFO and Company Secretary
Chief Executive Officer (resigned 31 January 2019)
The Company has entered into a Consultancy Agreement with MEMM Capital Pty Ltd pursuant to which Mr Michael
Brown was engaged to provide Managing Director services to the Company effective from 5 November 2018. The key
terms of the Agreement are:
• Mr Brown will be paid $280,000 per annum, inclusive of superannuation.
•
Subject to shareholder approval Mr Brown (or his nominee) will be granted the following incentive options:
-
500,000 incentive options exercisable at A$0.05 each on or before 30 November 2021, vesting
immediately
500,000 incentive options exercisable at A$0.05 each on or before 30 November 2021, vesting on 5
November 2019
1,000,000 incentive options exercisable at A$0.05 each on or before 30 November 2021, vesting on the
Company’s share price achieving a 10-day VWAP of $0.075 prior to 31 May 2020
1,000,000 incentive options exercisable at A$0.05 each on or before 30 November 2021, vesting on the
Company’s share price achieving a 10-day VWAP of $0.10 prior to 31 May 2021
-
-
-
•
•
•
Subject to shareholder approval, the Company shall provide an interest free, non-recourse loan in the amount
of $30,000 to be used for the sole purpose of acquiring loan funded shares.
The Company has agreed to reimburse up to $25,000 in moving expenses incurred in relocating to Australia.
The Agreement may be terminated by either Mr Brown or the Company by providing three months’ notice.
The Company has entered into a Consultancy Agreement with KCG Advisors Pty Ltd pursuant to which Mr Kelly was
engaged to provide Chief Financial Officer and Company Secretarial services to the Company effective from 11 May
2015. The key terms of the Agreement are:
• KCG Advisors Pty Ltd to receive $225 per hour, exclusive of GST, for services provided by Mr Kelly.
• Unless otherwise agreed between the parties, a monthly cap of $10,000 (2018: monthly cap of $6,500),
•
exclusive of GST, will apply to payments to KCG Advisors Pty Ltd; and
The Agreement may be terminated by either party at any time on the giving of not less than one month’s
notice in writing.
c) Details of remuneration
Compensation paid, payable or provided by the Group or on behalf of the Group, to key management personnel is set
out below. Key management personnel include all Directors of the Group and certain executives who, in the opinion of
the Board and Managing Director, have authority and responsibility for planning, directing and controlling the activities
of the Group directly or indirectly.
Chesser Resources Limited Annual Report 2019 | 19
25 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
2019
Cash and
salary fees
Super-
annuation
Share Based
Payments^
Total
remuneration
$
$
$
$
Proportion of
remuneration
that is
performance
based
%
40,000
40,000
80,000
3,800
3,800
7,600
2,583
3,444
6,027
46,383
47,244
93,627
6%
7%
6%
183,556
120,000
303,556
-
-
-
21,625
2,583
24,208
205,181
122,583
327,764
112,000
-
Other Key Management Personnel
Mr Simon McDonaldb
Total Key Management
Personnel
Total Director and KMP
Compensation
a Appointed 5 November 2018
b Resigned 31 January 2019
^ Equity-settled share-based payments as per Corporations Regulation 2M.3.03(1) Item 11.
495,556
112,000
7,600
-
-
112,000
-
112,000
30,235
533,391
6%
Cash and
salary fees
Super-
annuation
Share based
payments
Total
remuneration
$
$
$
$
Proportion of
remuneration
that is
performance
based
%
40,000
3,800
10,800
54,600
20%
40,000
80,000
1,900
14,400
25,200
5,700
56,300
110,900
26%
-
Non-Executive Directors
Mr Simon O’Loughlin
Mr Simon Taylor
Total Non-Executive Directors
Executive Directors
Mr Michael Browna
Mr Stephen Kelly
Total Executive Directors
2018
Non-Executive Directors
Mr Simon O’Loughlin
Mr Simon Taylor
Total Non-Executive Directors
Executive Directors
Mr Stephen Kelly*
Total Executive Directors
139,500
139,500
10,800
-
- 10,800
150,300
150,300
192,000
Other Key Management Personnel
Mr Simon McDonald
Total Key Management
Personnel
Total Director and KMP
Compensation
* During the 2018 financial year KCG Advisors Pty Ltd, the Company through which Mr Kelly’s services are engaged by the Company
received additional fees totalling $19,500 for services provided in relation to the management of the Company’s acquisition of the Senegal
exploration projects and related equity raising activities.
-
227,000
35,000
411,500
227,000
192,000
488,200
35,000
71,000
5,700
-
20 | Annual Report 2019 Chesser Resources Limited
26 | P a g e
11%
2%
11%
-
-
7%
-
15%
-
15%
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
d)
Share-based compensation
The following unlisted options were granted to Directors on 26 February 2019:
• 5,500,000 options with an exercise price of $0.05 and an expiry date of 30 November 2021
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period
are as follows:
Date of
grant
26/02/2019
26/02/2019
26/02/2019
Expiry date
30/11/2021
30/11/2021
$0.0105
$0.0105
916,667
916,667
Number
granted
Exercise
price
$0.05
$0.05
100%
0%
Vested
Value per
option at
grant date
Vesting and exercise date
26/02/2019
05/11/2019
Subject to achieving 10-day
VWAP of $0.075
Subject to achieving 10-day
VWAP of $0.10
26/02/2019
30/11/2021
$0.05
$0.0101
1,833,333
30/11/2021
$0.05
$0.0085
1,833,333
0%
0%
The number of options over ordinary shares in the company provided as remuneration to directors and key
management personnel is shown in section (e) below. When exercisable, each option is convertible into one ordinary
share of Chesser Resources Limited.
Options are granted to attract, retain and incentivise key management personnel.
The board has rules that contain restrictions on removing the ‘at risk’ aspect of the options granted to executives.
Executives may not enter into any transactions designed to remove the ‘at risk’ aspect of an instrument before it vests.
Except as noted above, there are no performance hurdles attaching to the options granted other than service vesting
conditions. In the event of termination (specified circumstances) only vested options are entitled to be exercised.
Unvested options are forfeited.
The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant
date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant date are
independently determined using a trinomial option pricing model that takes into account the exercise price, the term
of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk-free interest rate for the term of the option.
Shares provided on exercise of remuneration options
No shares were issued as a result of the exercise of options during the year.
e) Unlisted option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each director and each
key management person of the Group, including their personally related parties, are set out below:
Chesser Resources Limited Annual Report 2019 | 21
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DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
2019
Name
Balance at
start of
year
Granted as
compensati
on
Exercised
Key Management Personnel of Chesser Resources Limited
-
S Taylor
-
S O’Loughlin
-
M Brown
-
S Kelly
-
S McDonald
-
Total
1,000,000
750,000
3,000,000
750,000
-
5,500,000
1,600,000
1,200,000
-
1,200,000
2,000,000
6,000,000
Held at
time of
ceasing to
be KMP
-
-
-
-
(2,000,000)
(2,000,000)
Balance at
end of year
Vested and
exercisable
Unvested
2,600,000
1,950,000
3,000,000
1,950,000
-
9,500,000
1,766,667
1,325,000
500,000
1,325,000
-
4,916,667
833,333
625,000
2,500,000
625,000
-
4,583,333
2018
Name
Balance at
start of
year
Granted as
compensati
on
Exercised
Lapsed
Balance at
end of year
Vested and
exercisable
Unvested
Key Management Personnel of Chesser Resources Limited
-
-
S Taylor
-
-
S O’Loughlin
-
-
S Kelly
-
-
S McDonald
-
-
Total
1,600,000
1,200,000
1,200,000
2,000,000
6,000,000
f)
Share holdings
-
-
-
-
-
1,600,000
1,200,000
1,200,000
2,000,000
6,000,000
1,600,000
1,200,000
1,200,000
400,000
4,400,000
-
-
-
1,600,000
1,600,000
The number of shares in the Company held during the financial year by each director of Chesser Resources Ltd and
other key management personnel of the Group, including their personally related parties, are set out below. There
were no shares granted during the reporting period as compensation (2018: nil), however the Company provided Mr
Brown a non-recourse loan of $30,000 in relation to his acquisition of 600,000 shares during the financial year.
Shares held on
appointment as
key management
personnel
2019
Balance at start
of year
Key Management Personnel of Chesser Resources Limited
Ordinary shares
S Taylor
S O’Loughlin
M Brown
S Kelly
S McDonald
2,500,001
1,833,334
-
500,000
-
4,833,335
-
-
-
-
-
-
Acquisitions
during the year
Shares held on
ceasing to be key
management
personnel
Balance at the
end of the year
1,000,0001
1,000,0001
1,125,0002
395,0001
-
3,520,000
-
-
-
-
-
-
3,500,001
2,833,334
1,125,000
895,000
-
8,353,335
1 Represents shares subscribed for by the Key Management Personnel pursuant to an issuance of shares by the
Company at an issue price of $0.038 per Share.
2 Comprised 525,000 shares subscribed for by the Key Management Personnel pursuant to an issuance of shares by
the Company at an issue price of $0.038 per Share and 600,000 shares issued to Mr Brown as Loan Funded Shares.
22 | Annual Report 2019 Chesser Resources Limited
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DIRECTORS’ REPORT Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
2018
Balance at start
of year
Shares held on
appointment as
key management
personnel
Purchases /
(disposals)
during the year
Shares held on
ceasing to be key
management
personnel
Balance at the
end of the year
Directors of Chesser Resources Limited
Ordinary shares
S Taylor
S O’Loughlin
S Kelly
S McDonald
1,500,000
812,500
-
-
2,312,500
-
-
-
-
-
1,000,001
1,020,834
500,000
-
2,520,835
-
-
-
-
-
2,500,001
1,833,334
500,000
-
4,833,335
No shares were received by key management personnel on the exercise of options during the year.
Loans to key management personnel
g)
Except as noted below, there were no loans to key management personnel at any time during the financial year:
•
The Company provided an interest free, non-recourse loan in the amount of $30,000 to be used for the sole
purpose of acquiring loan funded shares. The loan and the issue of the loan funded shares were approved by the
Company’s shareholders on 26 February 2019.
h) Other transactions with key management personnel
During the year ended 30 June 2018, O’Loughlins Lawyers, a legal firm in which the Company’s Chairman Mr Simon
O’Loughlin is a partner, provided legal services to the Company. As at 30 June 2019 the total amount payable to
O’Loughlins Lawyers was $nil (2018: $Nil). The total fees paid to O’Loughlins Lawyers during the year was $Nil (2018:
$34,668).
Voting and comments made at the Company’s 2018 Annual General Meeting
i)
The Company received more than 98% of “yes” votes on its remuneration report for the financial year ended 30 June
2018. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration
practices.
End of Remuneration Report
Insurance of officers
To the extent permitted by law, the Company has indemnified (fully insured) each director and the secretary of the
Company. The liabilities insured include costs and expenses that may be incurred in defending civil or criminal
proceedings (that may be brought) against the officers in their capacity as officers of the Company or a related body,
and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than
where such liabilities arise out of conduct involving a willful breach of duty by the officers or the improper use by the
officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to
the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs
and those relating to other liabilities
Proceedings on behalf of the Group
The Group is not aware that any person has applied to the court under section 237 of the Corporations Act 2001 for
leave to bring proceedings on behalf of the Group, or to intervene in any proceedings in which the Group is a party, for
the purpose of taking responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the court under section 237
of the Corporations Act 2001.
Chesser Resources Limited Annual Report 2019 | 23
29 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2019
Directors’ report
Non-audit Services
The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Group and/or the Group are important. No non-audit assignments were
engaged with the auditor during the year (2018: none)
Details of the amounts paid or payable to the auditor, Pitcher Partners for audit services provided during the year are
set out in note 17 to the financial report.
Auditor's Independence Declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
attached to this report.
Auditor
Pitcher Partners continues in office in accordance with section 327 of the Corporations Act 2001.
Rounding of amounts in accordance with ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument
2016/191
The amounts in the Directors’ report and in the financial report have been rounded to the nearest dollar. This report is
made in accordance with a resolution of directors.
Stephen Kelly
Executive Director
Brisbane, 30 September 2019
24 | Annual Report 2019 Chesser Resources Limited
30 | P a g e
DIRECTORS’ REPORT The Directors
Chesser Resources Limited
Level 14
167 Edward Street
Brisbane QLD 4000
Auditor’s Independence Declaration
In relation to the independent audit for the year ended 30 June 2019, to the best of my knowledge and
belief there have been:
(i)
(ii)
No contraventions of the auditor independence requirements of the Corporations Act 2001; and
No contraventions of APES 110 Code of Ethics for Professional Accountants.
This declaration is in respect of Chesser Resources Limited and the entities it controlled during the year.
PITCHER PARTNERS
NIGEL BATTERS
Partner
Brisbane, Queensland
30 September 2019
31 | P a g e
Chesser Resources Limited Annual Report 2019 | 25
AUDITOR’S INDEPENDENCE DECLARATION
Independent Auditor’s Report to the Members of Chesser Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Chesser Resources Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June
2019, 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, 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)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants “the Code” that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 3(b) in the financial report which states that the Group’s ability to continue
as a going concern is dependent on the Group’s ability to raise further funding and the successful
exploration and subsequent exploitation of the Group’s tenements. The matters set forth in Note 3(b)
indicate the existence of a material uncertainty that may cast doubt about the Group’s ability to
continue as a going concern and, therefore, the Group may be unable to realise its assets and
discharge its liabilities in the normal course of business and at the amounts stated in the financial
report.
26 | Annual Report 2019 Chesser Resources Limited
INDEPENDENT AUDITOR’S REPORT Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Key audit matter
How our audit addressed the matter
Exploration and evaluation expenditure - Impairment
Refer to Note 5: Critical accounting estimates and judgements and Note 13: Exploration and
Evaluation Expenditure
The Group is involved in exploration and
evaluation activities with a focus on gold
deposits in Senegal.
Exploration and evaluation expenditure
totalling $3,979,825 as disclosed in Note 13
represents a significant balance recorded in
the consolidated Statement of Financial
Position.
AASB6 Exploration for and Evaluation of
Mineral Resources requires the exploration
and evaluation assets to be assessed for
impairment when facts and circumstances
suggest that the carrying amount may exceed
its recoverable amount.
As described in Note 5 to the financial
statements, management performed an
impairment assessment at 30 June 2019 in
accordance with the accounting policy
described in Note 13 which required
management to make certain estimates and
assumptions as to future events and
circumstances surrounding the development
and commercial exploitation of their Senegal
Projects.
Our procedures included:
• Understanding the control environment
through which exploration and evaluation
expenditure is incurred, recorded and
assessed for impairment;
• Obtaining an understanding of the status of
ongoing exploration programs and future
intentions for the areas of interest, including
future budget spend and related work
programs;
• Enquiring of management and reviewed ASX
announcements and minutes of directors
meetings to ensure the group had not
decided to discontinue exploration and
evaluation at its areas of interest;
• Reviewing the director’s estimates and
assumptions included in their assessment of
potential indicators of impairment;
• Assessing whether the relevant expenditure
meets the asset recognition requirements of
AASB6 Exploration for and Evaluation of
Mineral Resources;
• Verifying that each exploration licence
remains valid; and
• Assessing the adequacy of the related
disclosures made in Note 5 and Note 13 of
the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2019, 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.
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Chesser Resources Limited Annual Report 2019 | 27
INDEPENDENT AUDITOR’S REPORT
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 has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
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.
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
28 | Annual Report 2019 Chesser Resources Limited
INDEPENDENT AUDITOR’S REPORT 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 on pages 17 to 23 of the directors’ report for the
year ended 30 June 2019. In our opinion, the Remuneration Report of Chesser Resources Limited for
the year ended 30 June 2019 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.
PITCHER PARTNERS
NIGEL BATTERS
Partner
Brisbane, Queensland
30 September 2019
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Chesser Resources Limited Annual Report 2019 | 29
INDEPENDENT AUDITOR’S REPORT Chesser Resources Limited
Consolidated Income Statement
For the year ended 30 June 2019
Notes
2019
$
2018
$
Revenue and other income
Auditors’ remuneration
Key management personnel and employee remuneration
Depreciation expense
Finance charges
General and administrative expenses
Impairment of capitalised exploration expenditure
Other expenses
7
12
13
Professional fees
Travel expenses
Business development costs
Share based payments expense
Share registry and exchange listing fees
Foreign exchange (losses) / gains
1,396
(37,500)
(467,398)
(53,379)
(3,994)
(146,706)
(732,955)
(214,757)
(20,973)
(177,878)
(32,599)
(45,710)
(86,839)
839
3,803
(40,000)
(380,180)
(22,151)
(6,088)
(115,339)
(7,591)
(51,038)
(72,497)
(94,297)
(32,302)
(76,000)
(50,976)
(12,696)
Loss before income tax expense from continuing operations
(2,018,453)
(957,352)
Taxation
Loss for the year after tax
10
-
-
(2,018,453)
(957,352)
Loss attributable to Owners of Chesser Resources Limited
(2,018,453)
(957,352)
Basic and diluted loss per share (cents per share)
17
(0.95)
(0.49)
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
30 | Annual Report 2019 Chesser Resources Limited
36 | P a g e
CONSOLIDATED INCOME STATEMENT
Chesser Resources Limited
Consolidated statement of Comprehensive Income
For the year ended 30 June 2019
Loss for the year after tax
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Income tax relating to these items
Other comprehensive income for the year, net of tax
2019
$
2018
$
(2,018,453)
(957,352)
402
-
402
93
-
93
Total comprehensive loss for the year
(2,018,051)
(957,259)
Comprehensive loss attributable to the owners of Chesser
Resources Limited
(2,018,051)
(957,259)
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
17 | P a g e
Chesser Resources Limited Annual Report 2019 | 31
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Chesser Resources Limited
Consolidated Statement of Financial Position
As at 30 June 2019
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation expenditure
Notes
2019
$
2018
$
21(a)
11
1,243,371
58,819
28,099
2,385,360
17,565
45,194
1,330,289
2,448,119
12
13
177,040
3,979,825
164,879
3,193,146
Total non-current assets
4,156,865
3,358,025
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
5,487,154
5,806,144
14
315,100
457,542
315,100
315,100
457,542
457,542
5,172,054
5,348,602
15
16
10,636,305
2,053,981
(7,518,232)
5,172,054
8,840,512
2,007,869
(5,499,779)
5,348,602
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
32 | Annual Report 2019 Chesser Resources Limited
18 | P a g e
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Chesser Resources Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2019
2019
Issued Capital
$
Reserves
$
Accumulated
Losses
$
Total Equity
$
Balance as at 1 July 2018
8,840,512
2,007,869
(5,499,779)
5,348,602
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners:
-
-
-
-
402
402
(2,018,453)
-
(2,018,453)
(2,018,453)
402
(2,018,051)
Issue of equity securities
Costs of issuing equity securities
Share based payments
Total transactions with owners in their
capacity as owners
1,929,636
(133,843)
-
1,795,793
-
-
45,710
45,710
-
-
-
-
1,929,636
(133,843)
45,710
1,841,503
Balance as at 30 June 2019
10,636,305
2,053,981
(7,518,232)
5,172,054
2018
Issued Capital
$
Reserves
$
Accumulated
Losses
$
Total Equity
$
Balance as at 1 July 2017
5,838,418
1,913,776
(4,542,427)
3,209,767
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners:
-
-
-
-
93
93
(957,352)
-
(957,352)
(957,352)
93
(957,259)
Issue of equity securities
Costs of issuing equity securities
Share based payments
Total transactions with owners in their
capacity as owners
3,173,983
(171,889)
-
3,002,094
-
-
94,000
94,000
-
-
-
-
3,173,983
(171,889)
94,000
3,096,094
Balance as at 30 June 2018
8,840,512
2,007,869
(5,499,779)
5,348,602
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
19 | P a g e
Chesser Resources Limited Annual Report 2019 | 33
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Chesser Resources Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2019
Cash flow from operating activities
Interest received
Interest paid
Payments to suppliers and employees
Net cash flows used in operating activities
Cash flow from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation expenditure
Net cash used in investing activities
Cash flow from financing activities
Proceeds from share issue
Costs of issuing equity securities
Net cash provided by financing activities
Reconciliation of cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Net decrease in cash and cash equivalents
Foreign exchange difference on cash and cash equivalents
2019
$
2018
$
1,396
(3,994)
(1,191,716)
21(b)
(1,194,314)
3,803
(6,088)
(929,583)
(931,868)
(65,540)
(1,678,329)
(1,743,869)
(187,030)
(1,728,452)
(1,915,482)
1,875,600
(79,807)
1,795,793
2,385,360
(1,142,390)
401
2,091,126
(171,888)
1,919,238
3,312,011
(928,112)
1,461
Cash and cash equivalents at 30 June
21(a)
1,243,371
2,385,360
Non-cash financing and investing activities
21(c)
The accompanying accounting policies and explanatory notes form an integral part of the financial statements
34 | Annual Report 2019 Chesser Resources Limited
20 | P a g e
CONSOLIDATED STATEMENT OF CASH FLOWS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
1.
General information
Chesser Resources Limited (the Company) is a listed public company incorporated in Australia. The address of its
registered office and principal place of business is Level 14, 167 Eagle Street, Brisbane City QLD 4000.
The entity's principal activity during the financial year was the acquisition of a number of greenfield gold exploration
projects in Senegal and undertaking exploration an auger geochemical drilling campaign across those projects.
2.
Application of new and revised Accounting Standards
Adoption of New and Revised Standards
The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are effective for accounting periods commencing on or after 1 July
2018.
• AASB 15 Revenue from Contracts with Customers and related amending Standards
The adoption of these amendments did not have any impact on the current period or any prior period and is not
likely to affect future periods.
New accounting standards not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2019
reporting periods and have not been early adopted by the Group.
Standards/amendment
AASB 16 Leases
AASB 2018-1 Amendments to Australian
Accounting Standards – Annual Improvements
2015-2017 Cycle
AASB 2018-6 Amendments to Australian
Accounting Standards - Definition of a Business
AASB 2018-7 Amendments to Australian
Accounting Standards – Definition of Material
(i) AASB 16 Leases (effective from 1 January 2019)
Effective for annual
reporting periods
beginning on or after
1 January 2019
Expected to be initially
applied in the financial
year ending
30 June 2020
1 January 2019
30 June 2020
1 January 2020
30 June 2020
1 January 2020
30 June 2021
AASB 16 Leases will replace AASB 117 Leases and removes the distinction between operating and financing
leases and introduces a single framework which results in the lessee being required to recognise all leases
with a term longer than 12 months on the balance sheet. This is presented in the balance sheet as a right to
use asset being the leased item, and financial liability being the lease payments over the term of the lease.
For operating leases, the cost of these leases will then be presented as amortisation of the leased asset and
interest expense as the discount rate on the liabilities unwind, rather than operating cash costs as the
current approach under AASB 117.
As at 30 June 2019 the Group has the entered into lease arrangements for office premises in Australia and
Senegal that meet the definition of a lease under the new standard. Currently the Group accounts for these
lease arrangements as operating leases and records rental payments under the lease as an expense when
incurred; no lease asset or lease liability is recognised by the Group.
Chesser Resources Limited Annual Report 2019 | 35
21 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
Under the new standard the leases will be accounted for as finance leases. In the Statement of Financial
Position, the Company will recognise a right-of-use asset and a lease liability (calculated as the present value
of the future rentals, discounted using an applicable rate). As at 30 June 2019, the Group estimates that a
lease asset of approximately $94,569 and a lease liability of approximately $80,745 would have been
recognised had the new standard been early adopted by the Group.
Subsequent to initial measurement, the Company will depreciate the right-of-use asset in accordance with
the depreciation requirements in AASB 116 whilst the lease liability will be increased to reflect the interest
on the liability and reduced by the fixed lease payments.
AASB 16’s scope states that leases to explore for or use minerals, oil, natural gas and similar non-
regenerative resources are excluded from the standard. The Group’s mineral exploration licences are
therefore outside of the scope of the standard and will continue to be accounted for under AASB 6
Exploration for and Evaluation of Mineral Resources.
There are no other standards that are not yet effective and that would be expected to have a material impact on the
entity in the current or future reporting periods and on foreseeable future transactions.
3.
a)
Significant accounting policies
Statement of compliance
The financial statements comprise the consolidated financial statements of the Group consisting of Chesser
Resources Limited and its subsidiaries. The Company is a for-profit entity for the purpose of preparing the financial
statements.
These financial statements are general purpose financial statements that have been prepared in accordance with
the Corporations Act 2001, Accounting Standards and Interpretations, and comply with the other requirements of
the law. Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting
Standards ensures that the financial statements and notes of the Company and the Group comply with International
Financial Reporting Standards ('IFRS').
The financial standards were authorized for issue by the Directors on 30 September 2019.
b)
Going concern
As at 30 June 2019 the Group had cash reserves of $1,243,371, net working capital of $1,015,189 and net assets of
$5,172,054. The Group incurred a loss for the year ended 30 June 2019 of $2,018,453 (2018 loss: $957,352), net
cash outflows from operating activities of $1,194,314 (2018: $931,868 outflows) and net outflows from investing
activities of $1,743,869 (2018: $1,915,482 outflows).
The ability of the Group to continue as a going concern is principally dependent upon the ability of the Company to
raise additional funding in the future and the successful exploration and subsequent exploitation of the Group’s
tenements.
These conditions give rise to material uncertainty which may cast significant doubt over the Group’s ability to
continue as a going concern.
Based on the success of previous capital raisings, including the capital raising completed on 19 September 2019 to
raise $1,890,437, combined with the potential to attract farm-in partners for projects and the potential sale of the
current portfolio of exploration assets held, the Directors have prepared the financial statements on a going concern
basis, which contemplates the continuity of normal business activities and the realisation of assets and discharge of
liabilities in the ordinary course of business.
36 | Annual Report 2019 Chesser Resources Limited
22 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
The Directors are confident of securing funds as and when necessary to meet the Group’s obligations as and when
they fall due.
Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish
its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the
financial statements. This financial report does not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures
that may be necessary should the Group be unable to continue as a going concern.
c)
Basis of preparation
The consolidated general purpose financial statements have been prepared on the basis of historical cost, except for
certain financial instruments that are measured at revalued amounts or fair values at the end of each reporting
period, as explained in the accounting policies below. Historical cost is generally based on the fair values of the
consideration given in exchange for goods and services. All amounts are presented in Australian dollars, unless
otherwise noted. 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, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability,
the Group takes into account the characteristics of the asset or liability if market participants would take those
characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement
and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for
share-based payment transactions that are within the scope of AASB2 and measurements that have some similarities
to fair value but are not fair value such as value in use in AASB 136.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on
the degree to which the inputs to the fair value measurement are observable and the significance of the inputs to
the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that that the entity
can access at the measurement date.
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or
liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below.
d)
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Chesser Resources
Limited ("Company" or "parent entity") as at 30 June 2019 and the results of all subsidiaries for the year then ended.
Chesser Resources Limited and its subsidiaries together are referred to in this financial report as the Group or the
consolidated entity.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an
entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases. The acquisition method of accounting is used to account for the
acquisition of subsidiaries by the Group.
Chesser Resources Limited Annual Report 2019 | 37
23 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
lntercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income
statement, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
e)
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the
primary economic environment in which the entity operated ("the functional currency"). The consolidated financial
statements are presented in Australian dollars, which is Chesser Resources Limited's functional and presentation
currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges and qualifying
net investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the income statement, within finance
costs. All other foreign exchange gains and losses are presented in the income statement on a net basis within other
income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at
the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss. For example, translation differences on non- monetary assets and
liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair
value gain or loss and translation differences on non-monetary assets such as equities classified as available-for-sale
financial assets are recognised in other comprehensive income.
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
•
balance sheet
Income and expenses for each statement of comprehensive income are translated at average exchange rates
(unless this is not a recognizable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the date of the transactions), and
• All resulting exchange differences are recognized in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognized in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are
repaid, a proportionate share of such exchange difference is reclassed to profit or loss, as part of the gain or loss on
sale where applicable.
38 | Annual Report 2019 Chesser Resources Limited
24 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
Financial risk management
4.
The Group’s principal financial instruments comprise cash and cash equivalents, trade and other receivables and
trade and other payables. The Group does not currently have any projects in production and as such the main
purpose of these financial instruments is to provide liquidity to finance the Group’s development and exploration
activities. It is, and has been throughout the financial year, the Group’s policy that no trading in speculative financial
instruments shall be undertaken. The main risks arising from the Group’s use of financial instruments are liquidity
risk, counterparty or credit risk, interest rate risk and foreign currency risk. During the year the Group has had some
transactional currency exposures, principally to the US dollar, the Western African Franc and the Euro. The Group
has not entered into forward currency contracts to hedge these exposures due to the short time frame associated
with the currency exposure and the relatively modest overall exposure at any one point in time. Primary
responsibility for identification and control of financial risk rests with the board of directors. However, the day-to-
day management of these risks is under the control of the Chief Financial Officer. The Board agrees the strategy for
managing future cash flow requirements and projections.
The Group holds the following financial instruments all of which are carried at amortised cost.
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
a) Market risk
30 June 2019
Cash and cash equivalents
Trade and other receivables
2019
$
2018
$
1,243,371
58,819
1,302,190
309,959
309,959
2,385,360
17,565
2,402,925
400,752
400,752
AUD
Denominated
Balances
USD Denominated
Balances
CFA
Denominated
Balances
TOTAL
30 June 2019
1,092,946
23,108
4,093
28,477
32,570
120,079
(87,509)
146,332
1,243,371
7,234
58,819
153,566
1,302,190
84,745
68,821
309,959
992,231
Trade and other payables
105,135
Total assets
1,116,054
Net exposure
1,010,919
30 June 2018
Cash and cash equivalents
Trade and other receivables
AUD
Denominated
Balances
USD Denominated
Balances
CFA
Denominated
Balances
TOTAL
30 June 2018
2,230,729
17,565
3,882
150,749
2,385,360
-
-
17,565
Total assets
2,248,294
3,882
150,749
2,402,925
Trade and other payables
81,581
Net exposure
2,166,714
229,369
(225,487)
89,802
60,947
400,752
2,002,173
Chesser Resources Limited Annual Report 2019 | 39
25 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian dollar against
the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to
key management personnel and represents management’s assessment of the reasonably possible change in foreign
exchange rates. A negative number in the table represents a decrease in the operating profit before tax and
reduction in equity where the Australian dollar strengthens against the relevant currency. For a 10% strengthening
of the Australian dollar against the relevant currency, there would be a comparable impact on the loss or equity,
and the balances below would be positive.
Profit / (loss) before tax and equity – 10% increase
Profit / (loss) before tax and equity – 10% decrease
2019
$
(1,869)
1,869
2018
$
16,454
(16,454)
Interest rate risk
(i)
The Group’s exposure to interest rate risk arises predominantly from cash and cash equivalents bearing variable
interest rates, as the Group intends to hold any fixed rate financial assets to maturity. At the end of the reporting
period the Group maintained the following variable rate accounts:
30 June 2019
30 June 2018
Weighted average
interest rate
%
0.5%
Balance
$
1,243,371
Weighted average
interest rate
%
0.5%
Balance
$
2,385,360
Cash and cash equivalents
At the end of the reporting period, if the interest rates had changed, as illustrated in the table below, with all other
variables remaining constant, after-tax profit and equity would have been affected as follows:
+1% (100bp)
-1% (100bp)
After-tax loss higher / (lower)
2019
$
12,434
(12,434)
2018
$
23,854
(23,854)
Equity higher / (lower)
2019
$
2018
$
12,434
(12,434)
23,854
(23,854)
Credit risk
b)
Credit risk primarily arises from cash and cash equivalents and term deposits deposited with banks and receivables.
Cash and cash equivalents and term deposits are primarily placed with National Australia Bank Limited and AMP
Bank Limited, which has an independently rated credit rating of A1+. The Company has no past due or impaired
financial assets in the period covered by these financial statements. The carrying value of financial assets represents
the maximum exposure to credit risk.
Liquidity risk
c)
Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents in order to meet the
Group’s forecast requirements. The Group manages liquidity risk by continuously monitoring forecast and actual
cash flows and matching the maturity profiles of financial assets and liabilities. Surplus funds are generally only
invested in bank deposits. At reporting date, the Group did not have access to any undrawn borrowing facilities.
40 | Annual Report 2019 Chesser Resources Limited
26 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
Maturity of financial liabilities
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date.
30 June 2019
Less than 3 months
$
Total contractual
cash flows
$
Carrying amount
$
Trade and other payables
309,959
309,959
309,959
30 June 2018
Less than 3 months
$
Total contractual
cash flows
$
Carrying amount
$
Trade and other payables
400,752
400,752
400,752
Fair value estimation
d)
Financial assets at fair value through profit or loss are carried at their fair value as determined by reference to
quoted bid prices in an active, liquid market (Level 1). The carrying amount of other financial assets (net of any
provision for impairment) and financial liabilities as disclosed above is assumed to approximate their fair values
primarily due to their short maturities.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances.
5.
Critical accounting estimates and judgements
When preparing the financial statements, management undertakes a number of judgements, estimates and
assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may
differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated
results. Information about significant judgements, estimates and assumptions that have the most significant effect
on recognition and measurement of assets, liabilities, income and expense is provided below.
Exploration and evaluation expenditure
As at 30 June 2019 the Group had capitalised exploration and evaluation expenditure of $3,979,825 in relation to
the Senegal Projects. The ultimate recoupment of capitalised exploration and development expenditure is
dependent on the successful development and commercial exploitation, or alternatively sale, of the respective
areas of interest. The Company’s continued development of its mineral property interests is dependent upon the
determination of economically recoverable reserves, the ability of the Company to obtain the financing necessary
to maintain operations, successfully complete its exploration and development programs and the attainment of
future profitable production. The recognition of this expenditure as an asset requires management to make certain
estimates and assumptions as to future events and circumstances. These estimates and assumptions may change
as new information becomes available. If after having capitalised expenditure under the accounting policy a
judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be expensed in
the statement of comprehensive income.
Share based payments
The Group measures the cost of equity settled transactions by reference to the fair value of the equity instruments
at the date at which they are granted. Fair value is calculated using a trinomial valuation model, taking into account
the terms and conditions upon which the options were granted. The assumptions used in these valuation models is
set out in note 16.
Chesser Resources Limited Annual Report 2019 | 41
27 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
Deferred tax assets
No members of the Group have generated taxable income in the financial year and as such the Group continues to
carry forward tax losses that give rise to deferred tax assets. Given that the Group’s projects remain in early
exploration stages, it is unlikely that the Group will generate taxable income in the foreseeable future in the absence
of asset sales.
Taking account of the above, the deferred tax assets have not been recognised in the financial statements as
management does not believe that the members of the Group satisfy the criteria set out in AASB 112.
6.
Segment information
The Group has identified its operating segments based on the internal reports that were reviewed and used by
the Managing Director or the Chief Executive Officer (Chief Operating Decision Maker) in assessing performance
and determining the allocation of resources during the year.
The Group is managed primarily on a geographic basis, that is, the location of the respective areas of interest.
Operating segments are therefore determined on the same basis.
Accounting policy
The Chief Operating Decision Maker assesses the performance of the operating segments based on a measure of
gross expenditure that includes both expenditure that is capitalised in these financial statements and expenditure
that is expensed in the income statement in these financial statements. The measurement of gross expenditure
does not include the impairment of exploration expenditure or non-cash items such as depreciation expense and
share based payments expense. Interest revenue is allocated to the Corporate segment. Other items of revenue
are not allocated to segments.
All operating segments are in the exploration and development phase and did not generate any revenue in the
current or prior year.
Assets, liabilities and cash flows are not allocated to segments in the internal reports that are prepared for the
Chief Operating Decision Maker.
Activity by segment
Kurnalpi Project
The Kurnalpi Project is situated at Kurnalpi approximately 60 kilometres north east of Kalgoorlie. Effective 11 July
2018, formal notification was given to Mithril to withdraw from the Farm-In-Agreement. Expenditure incurred
during the year related to tenement rentals. All associated costs were impaired at year-end.
Senegal Projects
The Senegal Projects, which consist of five exploration projects, are located adjacent and to the west of the
Senegal Mali Shear Zone in the Kédougou Inlier with a total area of 624kms2. The projects are: Diamba Sud,
Diamba Nord, Woye, Youboubou and Garaboureya. During the 2019 financial year, the Company relinquished its
interests in the Woye, Youboubou and Garaboureya projects and impaired all capitalised exploration and
evaluation expenditure relating to those projects.
Corporate
Expenditure incurred that is not directly allocated to other segments is reported as corporate costs in the internal
reports prepared for the chief operating decision maker.
The following tables present revenue and profit information for the Group’s operating segments for the year
ended 30 June 2019 and 2018, respectively.
42 | Annual Report 2019 Chesser Resources Limited
28 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
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Chesser Resources Limited Annual Report 2019 | 43
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
(ii)
Segment assets
The following table shows assets by geographical segment.
30 June 2019
Segment assets
30 June 2018
Segment assets
7.
Revenue and other income
Interest income
Accounting policy
Senegal
$
Australia
$
Total
$
4,338,655
1,148,499
5,487,154
3,508,773
2,297,371
5,806,144
2019
$
2018
$
1,396
1,396
3,803
3,803
Interest
Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of
the financial asset to the net carrying amount of the financial asset.
8.
Expenses
The group has identified a number of items which are material due to the significance of their nature and/or
amount. These are listed separately here to provide a better understanding of the financial performance of the
group.
Operating lease rentals
Superannuation contributions
Business development costs
Share based payment expense
2019
$
2018
$
45,957
7,600
5,566
45,710
36,152
3,850
32,302
76,000
44 | Annual Report 2019 Chesser Resources Limited
30 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
9.
Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity
and its related practices:
2019
$
2018
$
Pitcher Partners Brisbane
(i) Audit and assurance services
Audit and review of financial reports
Total auditors’ remuneration
10.
Income tax
(a) Income tax benefit
Current and deferred tax
(b) Deferred income tax/(revenue)
Deferred income tax/(revenue) included in tax expense comprises:
(Increase)/decrease in deferred tax assets
Increase/(decrease) in deferred tax liabilities
(c) Reconciliation of income tax expense to prima facie income tax
Loss before income tax from continuing operations
Tax at the Australian tax rate of 27.5% (2018: 27.5%)
Tax effect of amounts which are not deductible/(taxable) in
calculating taxable income:
Effect of change in tax rates
Different tax rates in other jurisdictions
Non deductible expenses
Deductible capital raising costs
Deferred tax assets not recognised / (recognised)
Income tax benefit
(d) Deferred tax assets / liabilities comprise
Accruals
Provisions
Prepayments
Impairment of investments in and loans to subsidiaries
Tax losses available for offset against future taxable income
Net deferred tax assets
Deferred tax assets not recognised
37,500
37,500
40,000
40,000
-
-
161,713
(161,713)
-
(2,018,453)
(555,075)
-
(2,791)
404,303
(13,843)
(167,406)
167,406
-
7,563
16,811
(7,797)
89,468
3,060,802
3,166,847
(3,166,847)
-
-
-
113,995
(113,995)
-
(957,352)
(263,271)
258,806
2,490
130,616
(43,319)
(85,322)
85,322
-
7,288
13,746
(12,428)
-
2,983,075
2,991,681
(2,991,681)
-
31 | P a g e
Chesser Resources Limited Annual Report 2019 | 45
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
(e) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the
following items:
2019
$
2018
$
Temporary differences and tax losses at 27.5% (2018: 27.5%)
3,167,847
2,991,681
Tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of
these items because it is not probable that future taxable profit will be available against which the Group can utilise
the benefits from the deferred tax assets. The benefit of the tax losses will only be available if the Company, or a
tax consolidated group of which it is a member, derives future assessable income of a nature and of an amount
sufficient to enable the benefit from the tax losses to be realised, has complied and continues to comply with
conditions for deductibility imposed by current tax legislation and there are no adverse changes to such legislation.
The conditions for deductibility of the carried forward tax losses (continuity of ownership test and continuity of
business test) will need to be considered in light of any changes that may occur in both the ownership of the
Company and the nature of the Company’s business activities.
Accounting policy
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based
on the national income tax rate 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 substantively enacted at the end
of the reporting period in the countries where the Company’s subsidiaries and associates operate and generate
taxable income, Management periodically evaluates positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis
of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognised if they arise from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable profit
or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amounts and
tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal
of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
46 | Annual Report 2019 Chesser Resources Limited
32 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
11.
Trade and other receivables
Current
Other receivables
Other receivables represent the Company’s GST receivable.
2019
$
2018
$
58,819
17,565
Accounting Policy
Trade and other receivables are recognised initially at fair value and subsequently at the amount considered
recoverable. Trade and other receivables are generally due for settlement within 30 days. They are presented as
current assets unless collection is not expected for more than 12 months after the reporting date.
Collectability of trade receivables is assessed for expected credit losses on an ongoing basis. Debts which are known
to be uncollectable are written off by reducing the carrying amount directly.
12.
Property, plant and equipment
Field Equipment
Motor Vehicles
Office
Equipment
TOTAL
Carrying amount at 1 July 2017
Additions
Disposals
Depreciation
62,638
-
(5,791)
121,330
-
(16,089)
Carrying amount at 30 June 2018
56,847
105,241
Additions
Disposals
Depreciation
Carrying amount at 30 June 2019
-
-
(12,751)
44,096
39,467
-
(32,159)
112,549
3,062
-
(271)
2,791
26,073
-
(8,469)
20,395
187,030
-
(22,151)
164,879
65,540
-
(53,379)
177,040
Accounting Policy
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance are charged to the income statement
during the financial period in which they are incurred.
Depreciation of assets is calculated on the straight-line method to allocate their cost, net of their residual values,
over their estimated useful lives. The depreciation rates used for each class of depreciable asset are:
Chesser Resources Limited Annual Report 2019 | 47
33 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
Classification
Field equipment
Motor vehicles
Office equipment
Useful lives
3 – 5 years
5 years
3 years
Depreciation Basis
Straight Line
Straight Line
Straight Line
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
profit or loss.
13.
Exploration and evaluation expenditure
2019
$
2018
$
At cost
3,979,825
3,193,146
Movements in exploration and evaluation expenditure during the year is summarized as follows:
Carrying amount at beginning of period
Acquisition cost (i)
Exploration expenditure during the period
Impairment of exploration and evaluation expenditure (ii)
Carrying amount at end of period
i.
Acquisition of Senegal Projects
3,193,146
-
1,519,634
(732,955)
3,979,825
-
1,113,565
2,087,172
(7,591)
3,193,146
In the financial year ended 30 June 2018, the Company acquired 100% of the issued capital of each of Boya Gold
(“Boya”) and Erin Mineral Resources (“Erin”), to acquire interests in five gold exploration projects in Senegal.
As consideration for the acquisition, Chesser issued the following equity securities to the vendors and third-
party facilitators or their nominees:
(i) 27,071,419 fully paid ordinary shares in Chesser. 26,767,848 shares were issued on 12 July 2017 and 303,571
shares were issued on 11 September 2017;
(ii) The following unlisted options:
(a)
(b)
1,000,000 unlisted options with an exercise price of $0.06 and an expiry date of 31 December 2019
1,000,000 unlisted options with an exercise price of $0.10 and an expiry date of 31 December 2020.
(iii) The following performance shares:
(a)
(b)
23,809,524 Class A performance shares which will convert into fully paid ordinary shares upon certification
by an independent Competent Person of a JORC Mineral Resource of 0.5Moz Au with an average grade
of at least 2.0g/t gold in relation to the Projects; and
23,809,524 Class B performance shares which will convert into fully paid ordinary shares upon certification
by an independent Competent Person of a total JORC Mineral Resource of 1.0Moz Au with an average
grade of at least 2.0g/t gold in relation to the Projects.
48 | Annual Report 2019 Chesser Resources Limited
34 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
The total acquisition cost has been measured at the fair value of the equity instruments granted as compensation
for the acquisition, in accordance with AASB 2 Share-based payments.
i.
Impairment of exploration expenditure
During the year ended 30 June 2019 the Group impaired $732,955 (2018: $7,591) of exploration and evaluation
expenditure related to the Woye, Youboubou and Garaboureya projects as the exploration activity undertaken by
Chesser subsequent to acquiring the projects has not indicated sufficient exploration potential to justify Chesser
undertaking further exploration activity and as such Chesser has relinquished or surrendered its interest in those
tenements.
The ultimate recoupment of capitalised exploration and development expenditure is dependent on the successful
development and commercial exploitation, or alternatively sale, of the respective areas of interest. The Company’s
continued development of its mineral property interests is dependent upon the determination of economically
recoverable reserves, the ability of the Company to obtain the financing necessary to maintain operations,
successfully complete its exploration and development programs and the attainment of future profitable
production.
Accounting Policy
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and
evaluation assets on an area of interest basis. Costs incurred before the consolidated entity has obtained the legal
rights to explore an area are recognised in profit or loss.
Exploration and evaluation assets are only recognised if the rights to the area of interest are current and either:
•
•
the expenditures are expected to be recouped through successful development and exploitation of the area
of interest or by its sale; or
activities in the area of interest have not at the reporting date reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical
feasibility and commercial viability and facts and circumstances suggest that the carrying amount exceeds the
recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to
cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than
the area of interest. Once the technical feasibility and commercial viability of an area of interest are demonstrable,
exploration and evaluation assets attributable to that area of interest are first tested for impairment and then
reclassified from exploration and evaluation expenditure to property and development assets within property,
plant and equipment.
Restoration costs that are expected to be incurred are provided for as part of the cost of the exploration and
evaluation phases that give rise to the need for restoration. Accordingly, these costs will be recognised gradually
over the life of the project as the phases occur.
Chesser Resources Limited Annual Report 2019 | 49
35 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
14.
Trade and other payables
Trade payables
Accruals
Total trade and other payables
2019
$
2018
$
249,728
65,372
315,100
143,574
313,968
457,542
Accounting Policy
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the
financial year which are unpaid. The amounts are unsecured, non-interest bearing and are usually paid within 30
days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within
12 months from the reporting date. They are recognised initially at their fair value and subsequently measure at
amortised cost using the effective interest method.
15.
Issued capital
2019
$
2018
$
Ordinary shares – fully paid
10,636,305
8,840,512
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary
shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to
one vote.
(a) Movements in ordinary shares
Opening Balance 30 June 2018
Share issue on 4 January 2019 (a)
Share issue on 19 January 2019 (b)
Shares issued on 15 March 2019(c)
Shares issued on 23 May 2019(d)
Share issue costs
Closing Balance 30 June 2019
30 June 2019
No.
$
198,683,181
20,780,000
1,246,800
3,695,200
24,375,000
-
248,780,181
8,840,512
789,640
47,378
117,618
975,000
(133,843)
10,636,305
The following movements have occurred against Share Capital during the year:
a) On 4 January 2019, Chesser issued 20,780,000 fully paid ordinary shares at $0.038 per share via a private
placement;
b) On 19 January 2019 Chesser issued 1,246,800 fully paid ordinary shares at $0.038 per share to Taylor
Collison as payment of a capital raising fee;
c) On 15 March 2019 Chesser issued 2,920,000 fully paid ordinary shares at $0.038 per share to Directors
pursuant to a subscription, issued 600,000 ordinary shares funded via a loan to Michael Brown and issued
175,200 fully paid ordinary shares at $0.038 per share to Taylor Collison as payment of a capital raising
fee;
50 | Annual Report 2019 Chesser Resources Limited
36 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
d) On 23 May 2019, Chesser issued 24,375,000 fully paid ordinary shares at $0.04 per share via a private
placement.
(b) Capital management
When managing capital, management’s objective is to ensure the entity continues as a going concern and to
maintain a structure that ensures the lowest cost of capital available and to ensure adequate capital is available
to meet the Group’s forecast expenditure commitments. In order to maintain or adjust the capital structure, the
Group may seek to issue new shares. Total capital is calculated as ‘equity’ as shown in the statement of financial
position.
(c) Share options
At 30 June 2019, the following options for ordinary shares in the Company were on issue:
Options with a
$0.06 exercise
price expiring
31 December
2019
Options with a
$0.10 exercise
price expiring
31 December
2020
Options with
a $0.05
exercise price
expiring 31
December
2021
Options with a
$0.05 exercise
price expiring
31 December
2022
Total options on
issue
4,300,000
4,300,000
-
-
8,600,000
-
-
5,500,000
1,500,000
7,000,000
-
4,300,000
-
4,300,000
2,000,000
7,500,000
-
1,500,000
2,000,000
17,600,000
On issue at 1 July 2018
Options issued to Key
Management Personnel
and other employees
Options issued as
consideration for capital
raising fees
On issue at 30 June 2019
The options do not provide the holder with any voting rights, any entitlement to dividends or any entitlement to
the proceeds on liquidation in the event of a winding up.
Refer note 16 for further details regarding the accounting treatment of the options issued during the year.
16.
Reserves
Share based payments reserve
Foreign currency translation reserve
2019
$
2018
$
2,053,981
-
2,053,981
2,008,271
(402)
2,007,869
Chesser Resources Limited Annual Report 2019 | 51
37 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
Movements:
Foreign currency translation reserve
Balance at 1 July 2018
Currency translation difference for the year
Balance at 30 June 2019
Share based payments reserve
Balance at 1 July 2018
Options issued
Balance at 30 June 2019
Nature and purpose of reserves
2019
$
2018
$
(402)
402
-
2,008,271
45,710
2,053,981
(495)
93
(402)
1,914,271
94,000
2,008,271
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign controlled subsidiaries.
Share based payments reserve
The Share based payment reserve is used to record the fair value of share-based payments made by the Company.
Accounting Policy
Share-based compensation benefits are provided to directors and key management personnel.
The fair value at grant date is determined using an option pricing model that takes into account the exercise price,
the term of the option, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk-free interest rate for the term of the option.
The fair value of options granted is recognised as an employee benefits expense with a corresponding increase in
equity. The total amount to be expensed is determined by reference to the fair value of the options granted, which
includes any market performance conditions but excludes the impact of any service and non-market performance
vesting conditions and the impact of any non-vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options
that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to
original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
The following share-based payment transactions were recognised during the year:
52 | Annual Report 2019 Chesser Resources Limited
38 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
Options issued to directors (i)
Options issued to third-party vendors (ii)
Options issued to employees (iii)
Loan funded shares issue to directors (iv)
Share-based payments expense for the financial year
30 June
2019
$
22,194
8,695
6,781
8,040
45,710
(i) On 26 February 2019 the shareholders approved the grant to Directors of 5,500,000 unlisted options over
ordinary shares with an exercise price of $0.05 and an expiry date of 30 November 2021 subject to the following
vesting conditions:
• 916,667 of the incentive options to be issued shall be exercisable at A$0.05 each on or before 30
November 2021, vesting immediately
• 916,667 of the incentive options to be issued shall be exercisable at A$0.05 each on or before 30
November 2021, vesting on 5 November 2019.
• 1,833,333 of the incentive options to be issued shall be exercisable at A$0.05 each on or before 30
November 2021, vesting on the Company’s share price achieving a 10-day VWAP of $0.075 prior to 31
May 2020
• 1,833,333 of the incentive options to be issued shall be exercisable at A$0.05 each on or before 30
November 2021, vesting on the Company’s share price achieving a 10-day VWAP of $0.10 prior to 31
May 2021
The fair value of the options at grant date has been estimated using a trinomial option valuation model, taking
into account the terms and conditions upon which the options were granted. The following assumptions were
used:
Immediately
vesting
Exercise price
Expected volatility
Risk-free interest rate
Expected life of share options (days)
Grant date share price
Fair value per option
$0.05
50%
2.07%
1,008
$0.05
$0.0105
Vesting 5
November
2019
$0.05
50%
2.07%
1,008
$0.05
$0.0105
10 day VWAP
of $0.075
prior to 31
May 2020
$0.05
50%
2.07%
1,008
$0.05
$0.0101
10 day VWAP
of $0.10
prior to 31
May 2021
$0.05
50%
2.07%
1,008
$0.05
$0.0085
(ii) On 4 January 2019 the Group issued 2,000,000 unlisted options over ordinary shares with an exercise price of
$0.05 and an expiry date of 30 November 2021 as partial consideration for corporate advisory and broking
services provided to the Company and subject to the following vesting conditions:
• 333,333 of the incentive options to be issued shall be exercisable at A$0.05 each on or before 30
November 2021, vesting immediately
• 333,333 of the incentive options to be issued shall be exercisable at A$0.05 each on or before 30
November 2021, vesting on 5 November 2019.
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NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
• 666,667 of the incentive options to be issued shall be exercisable at A$0.05 each on or before 30
November 2021, vesting on the Company’s share price achieving a 10-day VWAP of $0.075 prior to 31
May 2020
• 666,667 of the incentive options to be issued shall be exercisable at A$0.05 each on or before 30
November 2021, vesting on the Company’s share price achieving a 10-day VWAP of $0.10 prior to 31
May 2021
The fair value of the options at grant date has been estimated using a trinomial option valuation model, taking
into account the terms and conditions upon which the options were granted. The following assumptions were
used:
Immediately
vesting
Exercise price
Expected volatility
Risk-free interest rate
Expected life of share options (days)
Grant date share price
Fair value per option
$0.05
52%
1.72%
1,062
$0.04
$0.0115
Vesting 5
November
2019
$0.05
52%
1.72%
1,062
$0.04
$0.0115
10 day VWAP
of $0.075
prior to 31
May 2020
$0.05
52%
1.72%
1,062
$0.04
$0.011
10 day VWAP
of $0.10
prior to 31
May 2021
$0.05
52%
1.72%
1,062
$0.04
$0.0095
(iii) On 1 December 2018 the Group granted to employees 1,500,000 unlisted options over ordinary shares on the
following conditions:
i. 500,000 Options will have an exercise price of A$0.05, an expiry of 1 December 2022 and will vest on 1
December 2019.
ii. 500,000 Options will have an exercise price of A$0.05, an expiry of 1 December 2022 and will vest on 1
December 2020.
iii. 500,000 Options will have an exercise price of A$0.075, an expiry of 1 December 2022 and will vest on 1
December 2021.
The fair value of the options at grant date has been estimated using a trinomial option valuation model, taking
into account the terms and conditions upon which the options were granted. The following assumptions were
used:
Exercise price
Expected volatility
Risk-free interest rate
Expected life of share options (days)
Grant date share price
Fair value per option
Vesting 1
December
2019
$0.05
50%
1.92%
1,461
$0.04
$0.0135
Vesting 1
December
2020
$0.05
50%
1.92%
1,461
$0.04
$0.0135
Vesting 1
December
2021
$0.075
50%
1.92%
1,461
$0.04
$0.009
(iv) On 15 March 2019 the Group issued 600,000 Loan Funded Shares to a Director. The Director was granted an
interest free limited recourse loan to assist in the purchase of Shares, with the Shares acquired at their market
value. The loan will be limited recourse so that at any time the Director may divest their Shares in full
satisfaction of the loan balance.
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NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
In accordance with the requirements of applicable AASB2, the loan funded shares are to be accounted for as
an option granted to the employee with an exercise price equal to the market price of the Company’s shares
at the grant date. Consequently, the loan funded shares have been valued using an option pricing model using
the following inputs:
Exercise price
Expected volatility
Risk-free interest rate
Term
Suboptimal exercise factor
Grant date share price
Fair value per option
17.
Loss per share
Loan funded
shares
$0.04
50%
2.07%
2.78 years
2.50
$0.04
$0.01
The following reflects the operating loss after tax and number of shares used in the calculation of the basic and
diluted earnings/(loss) per share.
Loss per share (cents per share)
Diluted loss per share (cents per share)
Loss attributable to Owners of Chesser Resources Limited
Weighted average number of ordinary shares used in the
calculation of basic loss per share
Weighted average number of ordinary shares used in the
calculation of diluted loss per share
2019
$
(0.95)
(0.95)
2018
$
(0.49)
(0.49)
(2,018,453)
(957,352)
Shares
Shares
212,934,354
193,900,406
212,934,354
193,900,406
Options and other potential equity securities on issue at the end of the period have not been included in the
determination of diluted earnings per share as the Group has incurred a loss for the period and they are therefore
not dilutive in nature.
Accounting policy
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any
costs of servicing equity (other than dividends), dividend by the weighted average number of ordinary shares,
adjusted for any bonus element. The diluted earnings per share is calculated as net profit or loss attributable to
members of the parent dividend by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element. The weighted average number of shares was based on the
consolidated weighted average number of shares in the reporting period. The net profit or loss attributable to
members of the parent is adjusted for:
• Costs of servicing equity (other than dividends) and preference share dividends;
•
The after-tax effect if dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
• Other non-discretionary changes in revenue or expenses during the period that would result from the
dilution of potential ordinary shares.
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NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
18.
Parent entity disclosures
The financial information for the parent entity Chesser Resources 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
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements
of the Company. Dividends received from associates are recognized in the parent entity's profit or loss when its right
to receive the dividend is established.
Financial guarantees
Where the Company has provided financial guarantees in relation to loans and payables of subsidiaries for no
compensation, the fair values of these guarantees are accounted for as contributions and recognised as part of the
cost of the investment.
As at and throughout the financial year ending 30 June 2019 and 30 June 2018 the parent entity of the Group was
Chesser Resources Limited.
Summary financial information
a)
The individual financial statements for the parent entity show the following aggregations.
Results
Profit/(loss) for the year
Total comprehensive income for the year
Financial Position
Current assets
Non-current assets
Current liabilities
Net Assets
Contributed equity
Share-based payments reserve
Accumulated losses
2018
2019
$
$
Chesser Resources Limited
(2,406,802)
(2,406,802)
1,148,498
3,880,894
5,029,392
96,894
96,894
(874,009)
(874,009)
2,297,472
3,281,904
5,579,377
81,581
81,581
4,932,498
5,497,797
10,636,305
2,053,981
(7,757,788)
4,932,498
8,840,512
2,008,271
(5,350,986)
5,497,797
Guarantees entered into by the parent entity
b)
Chesser Resources Limited has not entered into any guarantees in the current or previous financial year, in relation
to the debt of its subsidiaries
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NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
Contingent liabilities of the parent entity
c)
The parent entity did not have any contingent liabilities as at 30 June 2019 or 30 June 2018.
Contractual commitments for capital expenditure
d)
The parent entity did not have any contractual commitments for capital expenditure as at 30 June 2019 (2018: $nil).
Subsidiaries
19.
The consolidated financial statements incorporate the assets, liabilities, and results of the following subsidiaries in
accordance with the accounting policy described in note 3(c).
Name of entity
Country of
incorporation
Class of shares
Equity holding
2019
%
-
-
2018
%
100
100
100
100
100
100
100
100
100
-
Chesser Resources Holding Cooperatief U.A^^
Netherlands Membership
Dharana B.V.^^
Netherlands
Boya Gold Pty Ltd
Australia
Boya Minerals Pty Ltd
Australia
Boya Senegal SAU
Senegal
Erin Mineral Resources Pty Ltd
Australia
Erin Minerals Pty Ltd
Australia
Erin Senegal SAU
Senegal
Chesser Senegal SAU
Senegal
Bondou SAU@
Senegal
@ Bondou SAU was incorporated during the financial year with Chesser Resources Limited as the founding and sole
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
100
shareholder.
^^The Company’s Netherlands subsidiaries were wound up during the financial period.
Related parties
20.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have
been eliminated on consolidation and are not disclosed in this note.
During the year ended 30 June 2018, O'Loughlins Lawyers, a legal firm in which the Company's Chairman Mr Simon
O'Loughlin is a partner, provided legal services to the Company on arm’s length commercial terms. As at 30 June 2019
the total amount owing to O'Loughlins Lawyers was $nil (2018: $nil). The total fees paid to O'Loughlins Lawyers during
the year was $Nil (2018: $34,668).
There were no other transactions between the Group and other related parties in the current or prior financial year.
21.
Cash flow information
a) Cash and cash equivalents
Cash at bank and on hand
2019
$
2018
$
1,243,371
2,385,360
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NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
b) Reconciliation of cashflows from operating activities
Loss before tax
Depreciation and amortisation
Impairment of capitalised exploration expenditure
Foreign exchange (losses) / gains
Share based payments expense
Change in operating assets and liabilities (net of disposals):
(Increase)/decrease in trade or other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
Net cash outflow from operating activities
c) Non-cash investing and financing activities
Acquisition of Senegal projects by means of share options
Acquisition of Senegal projects by means of share issue
Issue of shares in settlement of capital raising costs
Issue of loan funded shares
2019
$
2018
$
(2,018,453)
(957,352)
53,379
732,955
(839)
45,710
(41,254)
17,096
17,092
(1,194,314)
-
-
54,036
30,000
22,151
7,591
12,696
76,000
(27,518)
-
(65,435)
(931,867)
18,000
1,082,856
-
-
Accounting policy
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly
liquid investments that are readily convertible to known amount of cash and which are subject to an
insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the
Group’s cash management.
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NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2019
22.
Commitments and contingent liabilities
(a)
Commitments
Operating leases
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within one year
Later than one year but not later than five years
2019
$
25,211
66,635
91,846
2018
$
23,962
71,222
95,184
Tenement expenditure commitments
Commitments for minimum exploration expenditure required to retain tenue on the Group’s exploration tenements
are:
Within one year
Later than one year but less than five years
Later than five years
(b) Contingent liabilities
2019
$
-
3,581,586
-
3,581,586
2018
$
552,594
-
4,090,188
4,642,782
Pursuant to the terms of the agreement for the acquisition of the Senegal exploration tenements, the Group issued
the following performance shares:
• 23,809,524 Class A performance shares, expiring 12 July 2020
• 23,809,524 Class B performance shares, expiring 12 July 2021
The performance shares will convert into fully paid ordinary shares on the following conditions:
• Class A - Upon certification by an independent Competent Person of a JORC Mineral Resource of 0.5Moz Au
with an average grade of at least 2.0g/t gold in relation to the Projects; and
• Class B - Upon certification by an independent Competent Person of a total JORC Mineral Resource of 1.0Moz
Au with an average grade of at least 2.0g/t gold in relation to the Projects
23.
Events occurring after the reporting period
Except as noted below, no matter or circumstance has arisen since the end of the year that has significantly
affected, or may significantly affect the Group’s operations, the result of those operations or the Group’s state of
affairs:
• On 19 September 2019, the Company issued 31,507,295 fully paid ordinary shares at an issue price of $0.06 to
raise $1,890,437 before costs.
Chesser Resources Limited Annual Report 2019 | 59
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NOTES TO THE FINANCIAL STATEMENTS
CHESSER RESOURCES LTD
DIRECTORS’ DECLARATION
In the directors’ opinion:
(a) the attached financial statements and notes are in accordance with the Corporations Act 2001, including:
(i)
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
performance, as represented by the results of its operations and its cash flows, for the year ended
on that date.
(b) The financial report also complies with International Reporting Standards as disclosed in note 3(a); and
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
This declaration is made in accordance with a resolution of directors.
Stephen Kelly
Director
Brisbane, 30 September 2019
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DIRECTORS’ DECLARATION
The shareholder information set out below was applicable as at 20 September 2019.
SHAREHOLDER INFORMATION
A. Distribution of securities
Analysis of the number of equity securities by size of holding:
Unlisted
$0.06
options
expiring 31
December
2019
-
1
10
11
9
31
4,300,000
Number of holders
Unlisted $0.10
options
expiring 31
December
2020
-
1
10
11
9
31
4,300,000
Unlisted
$0.05 options
expiring 30
November
2021
-
-
-
-
5
5
7,500,000
Unlisted
$0.05 options
expiring 30
November
2022
-
-
-
-
1
1
1,500,000
Listed Shares
88
132
96
260
260
836
280,287,476
Holding
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total holders
Total securities
There were 234 holders of less than a marketable parcel of listed shares.
Holding
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total holders
Total securities
Tranche 1
Performance
Shares expiring
12 July 2020
-
-
-
1
24
25
23,809,524
Tranche 1
Performance
Shares expiring
12 July 2021
-
-
-
1
24
25
23,809,524
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SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
B. Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of equity securities are listed below:
Name
Elliott Services Pty Ltd
GP Securities Pty Ltd
CPO Superannuation Fund Pty Ltd
Calama Holdings Pty Ltd
Darroch Family Pty Ltd
Jarhamche Pty Ltd
Mr Michael Andrew Whiting + Mrs Tracey Anne Whiting
Souttar Superannuation Pty Ltd
Octifil Pty Ltd
AWJ Family Pty Ltd
Mase Global Investments Limited
Torres Investments Pty Ltd
Corporate Property Services Pty Ltd
Mr Nicholas Dermott Mc Donald
Mr Angus William Johnson + Mrs Lindy Johnson
Greenslade Holdings Pty Ltd
Jimzbal Pty Ltd
Fountain Oaks Pty Ltd
Hoeksteen Investments Limited
Mr Craig Peter Ball + Mrs Suzanne Katherine Ball
Units
13,141,218
11,365,523
8,634,452
7,366,667
6,920,000
5,700,000
5,027,114
4,981,177
4,954,451
4,796,940
4,510,819
4,000,000
3,967,954
3,877,452
3,636,667
3,561,692
3,500,001
3,333,333
3,279,803
3,276,917
109,832,180
% of Units
4.69
4.05
3.08
2.63
2.47
2.03
1.79
1.78
1.77
1.71
1.61
1.43
1.42
1.38
1.30
1.27
1.25
1.19
1.17
1.17
39.19
Unquoted equity securities
Unlisted options represent options to acquire ordinary shares. Each option entitles the holder to acquire one
ordinary share. The names of the holders of more than 20% the unlisted options are:
Unlisted $0.06 options expiring 31
December 2019
Unlisted $0.10 options expiring
31 December 2020
Option holder
Options
% of total
options on issue
Ismacate Pty Ltd
1,000,000
1,000,000
23.28%
23.28%
Options
1,000,000
1,000,000
% of total
options on issue
23.28%
23.28%
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SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
Unlisted performance shares convert to the equivalent number of ordinary shares on the achievement specified
milestones. The names of the holders of more than 20% the unlisted performance shares are:
Holder
MGC Pharmaceuticals Ltd
Class A Performance Shares
Class B Performance Shares
Number held
5,714,286
5,714,286
% of total Class
A Performance
Shares on issue
24.00%
24.00%
Number held
5,714,286
5,714,286
% of total Class
A Performance
Shares on issue
24.00%
24.00%
Unlisted $0.05 options expiring 30
November 2021
Unlisted $0.05 options expiring
30 November 2022
Option holder
Options
% of total
options on issue
Gareth O’Donovan
Taycol Nominees Pty Ltd
Michael Brown
-
2,000,000
3,000,000
5,000,000
-
26.67%
40.00%
66.67%%
Options
1,500,000
-
-
1,000,000
% of total
options on issue
100%
-
-
100%
C. Substantial shareholders
The Company has not received any current notices from Substantial shareholders in the Company.
D. Listed shares subject to voluntary escrow
There are no restricted securities as at 20 September 2019.
E. Voting rights
The voting rights attaching to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
(b) Options and Performance Shares
No voting rights.
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SHAREHOLDER INFORMATION
CORPORATE DIRECTORY
Non-Executive Chairman
Non-Executive Director
Managing Director
Executive Director
Board of Directors
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Michael Brown
Mr Stephen Kelly
Company Secretary
Mr Stephen Kelly
Registered Office and Principal Place of Business
Level 14
167 Eagle Street
Brisbane QLD 4000
Postal address
PO Box 5807
Brisbane QLD 4000
Website:
www.chesserresources.com.au
Share Registry
Computershare Investor Services Pty Ltd
Level 1
200 Mary Street
Brisbane QLD 4000
Phone number: 1 300 552 270
Stock Exchange
Australian Securities Exchange
20 Bridge Street
Sydney, NSW 2000
ASX Code
CHZ
Auditors
Pitcher Partners
64 | Annual Report 2019 Chesser Resources Limited
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CORPORATE DIRECTORY
Chesser Resources Limited Annual Report 2019 | 65
Level 14
167 Eagle Street
Brisbane QLD 4000
chesserresources.com.au