ANNUAL
REPORT
2020
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
1
2
22
23
27
28
29
30
31
32
58
59
62
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.
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, 3rd September 2019, 14 October 2019, 21 January 2020, 2 March 2020, 17 June 2020,
21 July 2020, 28 July 2020 and 13 August 2020.
Chairman’s Letter
CHAIRMAN’S LETTER
Chairman’s Letter to Shareholders
Dear Shareholders,
As your recently appointed Chairman, I am pleased to present Chesser Resources Limited’s (the “Company” or
“Chesser”) 2020 Annual Report. The past year has seen the Company rapidly advance its strategically located Diamba
Sud Project in eastern Senegal following the announcement of two high-grade gold discoveries. These discoveries mark
a significant step towards achieving the Company’s principal objective of unearthing the next major gold deposit in West
Africa.
The Diamba Sud Project lies to the immediate west of the regionally significant Senegal Mali Shear Zone (“SMSZ”) that
transects a prolific Birimian greenstone belt hosting over 45 million ounces of gold, including Barrick Gold’s ~18 million
ounce Loulo-Gounkoto mining complex.
Drilling completed during the year to June 2020 was focused on the high-grade gold zones at Area A and Area D. These
both lie within an extensive gold geochemical auger anomaly referred to as the Northern Arc Target, which trends into
Barrick Gold’s neighbouring Bambadji tenement to the east.
Through the insights provided by diamond drilling, the Company is developing a better understanding of the primary
gold mineralisation and structural controls of the Area A and Area D discoveries. The results from the mostly shallow
drilling completed throughout the year have consistently returned highly encouraging widths and grades of gold
mineralisation with distinctive alteration that is the hallmark of the many large deposits located along the SMSZ. These
characteristics point to the potential of a large hydrothermal system emerging at Diamba Sud.
During the year, the Company also made significant steps in unlocking the potential of the Area D target following
transformational high-grade intersection at less than 60m depth. Further spectacular intersections reported post year-
end confirmed this discovery, which is a priority target for follow-up drilling in the upcoming field season commencing in
October 2020.
I would like to thank my fellow Board members and management as well as our in-country team for their ongoing efforts
and positive outcomes during the past year. Chesser’s exploration success to date has largely been achieved under
the leadership of Mike Brown (Managing Director) working collaboratively with Chesser’s in-country team, headed by
Gareth O’Donovan (Exploration Manager).
Finally, I thank you for your continuing support and we look forward to updating you on our progress during the
forthcoming field season as we move forward in our quest of advancing the discoveries at Diamba Sud.
Yours sincerely,
Mark Connelly
Chairman
Chesser Resources Limited Annual Report 2020 | 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 2020 (collectively “Group”). 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 Mark Connelly, Non-Executive Chairman (appointed 10 July 2020)
• Mr Michael Brown, Managing Director
• Mr Simon O’Loughlin, Non-Executive Director
• Mr Simon Taylor, Non-Executive Director
• Mr Robert Greenslade, Non-Executive Director (appointed 8 April 2020)
• Mr Stephen Kelly, Executive Director (resigned 10 July 2020)
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 Mark Connelly (Non-Executive Chairman)
Mr Connelly has extensive experience and involvement in African gold exploration and development including
the merger of Papillon Resources with B2 Gold Corp and the merger of Adamus Resources with Endeavour
Mining. He is currently Non-Executive Chairman at Oklo Resources Limited, TAO Commodities Limited, Calidus
Resources Limited and Primero Group Limited.
Mr Connelly is a member of the Australian Institute of Company Directors, a member of the Australian Institute
of Management and a member of the Society of Mining, Metallurgy and Exploration.
Former directorships in last 3 years:
In the last 3 years, Mr Connelly has been a Director of West African Resources Limited, Ausdrill Ltd, Toro Gold Plc,
Tiger Resources Limited, Saracen Mineral Holdings Limited and Cardinal Resources Limited.
Mr Simon O’Loughlin, BA(Acc) (Non-Executive Director)
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 , Stellar Resources 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
Stellar Resources Limited.
Former directorships in last 3 years:
TW Holdings Limited, Bod Australia Limited and ARC Exploration Limited.
2 | Annual Report 2020 Chesser Resources Limited
DIRECTORS’ REPORT
Mr Robert Greenslade, BEcon, (Non-Executive Director)
Mr Greenslade has extensive experience in investment banking with over 30 years’ experience in mergers and
acquisitions, capital raisings and strategic advisory predominantly in the resources industry.
Robert is currently a director and co-founder of GP Securities a private investment vehicle focusing on various
industries including private equity, resources, manufacturing in the food and retail sectors and technology. Until
February 2016, Robert was a Managing Director at Standard Chartered Bank and Head of Australia, Mining and
Metals Division, following the Bank’s acquisition of Gryphon Partners Advisory, (a boutique corporate advisory
firm focusing on the resources sector of which Robert was a co-founder), in 2011.
Prior to Gryphon Partners Advisory, Robert held various senior roles at Normandy Mining Limited, including Head
of Corporate Development and at Newmont Mining following Newmont’s takeover of Normandy.
Former directorships in last 3 years: Nil
Mr Michael Brown, BSc (Geology), BA, MBA (Managing Director)
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 an 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 (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 has more than 30 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 Limited were:
Number of Ordinary Shares #
Number of Options over Ordinary Shares #
Mr Mark Connelly
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Michael Brown
Mr Robert Greenslade
-
3,433,334
4,300,001
1,458,000
23,562,748
-
1,350,000
1,800,000
3,000,000
1,250,000
# 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 2020, and the numbers of meetings attended by each director were as follows:
Number of meetings held
Board Meetings: 4
Number of meetings eligible to attend Number of meetings attended
Mr Mark Connelly (appointed 10 July 2020)
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Robert Greenslade (appointed 8 April 2020)
Mr Michael Brown
Mr Stephen Kelly (resigned 10 July 2020)
-
4
4
2
4
4
-
4
4
2
4
4
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 2020 | 3
Principal Activities
The principal activities undertaken by the Company during the year are summarised as follows:
Permits
The Company’s 53.3km2 Diamba Sud and 241.9km2 Diamba Nord exploration permits are valid for two years and
can be extended for an additional three-year period and a subsequent two-year period.
Exploration Activities
The Company’s exploration activities during the year were focussed on its Senegal projects, and the flagship
Diamba Sud Project in particular.
DIAMBA SUD
The Diamba Sud Project comprises two rectangular blocks joined by a corridor to create a contiguous tenement
(Figure 1). The northern segment of Diamba Sud (termed DS-1) adjoins an open pit gold mine (Karakaene)
operated by Afrigold along its western margin and has had previous programs of geochemistry, rock chip
sampling and drilling.
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 2020 Chesser Resources Limited
DIRECTORS’ REPORT
Figure 2: Diamba Sud Gold Project location with respect to significant gold mining operations, the Senegal Mali Shear Zone and
associated splay structures (LHS) and a zoomed image of the auger geochemical gold anomalies and drilling targets (Area A, D
and Western Splay) (RHS).
Exploration programs previously undertaken by the Company successfully delineated three large gold
geochemical anomalies for follow-up drill testing: Northern Arc, Western Flank and Southern Zone.
Three discrete follow-up drilling campaigns were undertaken during the year, focussed on the Northern Arc and
Western Flank targets to better understand the style, nature, potential host and controls to the underlying gold
mineralisation.
Northern Arc target:
Previous exploration within Northern Arc discovered the presence of high-grade gold mineralisation at Area A
and multiple significant intersections at Area D.
Area A
An initial follow-up program at Area A during the September quarter consisted of drilling on a westerly azimuth
along two east-west oriented traverses to test the area immediately adjoining the previously reported significant
intercepts. Best intersections included:
21m at 6.62 g/t gold from 53m
4m at 3.44 g/t gold from 76m
14m at 9.53 g/t gold from 75m
The high-grade gold mineralisation correlated with a broad chargeability anomaly coincident with an interpreted felsic
intrusive (resistivity high) and provided a target for further drilling to test for possible depth and strike extensions.
A further phase of drilling at Area A, including diamond drilling, commenced in the December quarter returning
the following significant intersections:
16m at 8.51 g/t gold from 86m, in fresh rock, including
- 10m at 13.11 g/t gold from 86m
4m at 9.36 g/t gold from 14m, in saprolite, including
- 2m at 18.20 g/t gold from 14m
4m at 13.28 g/t gold from 103m, including
- 2m at 24.43 g/t gold from 103m
Chesser Resources Limited Annual Report 2020 | 5
DIRECTORS’ REPORT
The results confirmed a high-grade gold discovery at Diamba Sud, extending Area A at depth and in
multiple directions, including confirmation of a northwest-southeast feeder structure interpreted as the
principal host of the high-grade mineralisation. The gold mineralisation is principally structurally hosted,
with a second style of minerlaisation within altered sedimentary breccias. This is interpreted to have
formed by fluids flowing upwards along the structures then moving laterally into the sedimentary breccia,
with strong hydrothermal brecciation. Both the structurally hosted and the lithological hosted pyrite
mineralisation are associated with intense albite-carbonate-hematite alteration, typical of the assemblages
found associated with other Tier 1 gold operations along the SMSZ. These characteristics provide strong
indications that Area A is part of, or proximal to, a larger hydrothermal system, with marked similarities to
other large systems and Tier 1 operations on the SMSZ.
The final phase of drilling at Area A confirmed the presence of a new potentially significant structural
trend, intersecting a wide zone of gold mineralisation along a southwest-northeast trend. Gold
mineralisation is hosted within altered sedimentary breccias underlying a felsic intrusive. Significant
intersections included:
23m at 3.50 g/t gold from 96m, including
- 6m at 5.44 g/t gold from 96m, and
- 6m at 5.60 g/t gold from 110m
8m at 1.58 g/t gold from 127m
8m at 1.37 g/t gold from 147m
The interpreted host structures and associated gold mineralisation remain open along strike and are
priority targets for follow-up drilling.
Figure 3: Area A plan view showing drilling locations and results. Conjugate NE-SW and NW-SE trending faults are shown to
control mineralisation. A north-south trending fault/dyke runs down the eastern side of Area.
6 | Annual Report 2020 Chesser Resources Limited
DIRECTORS’ REPORT
Figure 4: Area A section showing the two controlling structures (NE-SW and NW-SE) hosting the high-grade mineralisation
Area D
An initial follow-up program at Area D during the September quarter was drilled on a westerly azimuth to test
for potential north and northwest trending host structures extending from the previously reported significant
intercepts. Best intersections included:
53m at 2.61 g/t gold from 57m, including
- 17m at 4.97 g/t gold from 59m
4m at 2.23 g/t gold from 93m
4m at 2.75 g/t gold from 99m
14m at 1.74 g/t gold from 8m
2m at 1.47 g/t gold from 18m
2m at 4.99 g/t gold from 22m
Further phases of drilling completed at Area D during the December, March and June quarters confirmed the
presence of a northwest-southeast striking host structure, particularly in an area within the Northern Arc gold
geochemical anomaly which had not previously been fully assessed, with two previous holes not being able to
reach the target depth due to excess water and clay.
Chesser Resources Limited Annual Report 2020 | 7
DIRECTORS’ REPORT
The RC holes were drilled on a southwest-northeast orientated line and returned significant mineralisation
over wide zones, marked by strong limonite staining. Assay results received post year-end highlighted
high-grade intervals of up to 67.80 g/t gold within broad continuous zones of mineralisation. Significant
intersections included;
48m at 6.70 g/t gold from 24m, including
- 10m at 25.14 g/t gold from 62m
55m at 4.27 gold from 16m
38m at 4.63 g/t gold from 8m, including
- 18m at 7.04 g/t gold from 28m, including
- 4m at 18.30 g/t gold from 30m
36m at 2.93 g/t gold from 6m, including
- 10m at 6.13 g/t gold from 16m
A second RC line, drilled parallel and 50m to the southeast intersected sedimentary breccias, carbonates
and minor felsic intrusives, typical of the rocks observed in Area A. Whilst more drilling is needed in this area
to understand the controls to the mineralisation, the Company currently believes a late-stage, northeast
trending fault observed at the northern end of Area A may extend between these two lines and truncate the
host structure.
Figure 5: Results from Area D drilling. Late-stage fault appears to offset the geology between the two drill lines.
8 | Annual Report 2020 Chesser Resources Limited
DIRECTORS’ REPORT
Figure 6: Area D Section looking northwest (A – A’).
Western Flank Target:
Western Splay
A gradient array induced polarization (GAIP) geophysical survey undertaken over this area indicated the presence
of a major northwest-trending splay structure extending from the SMSZ to the west of the Company’s previous
drilling. Given the spatial association of all major gold deposits along the SMSZ either on or adjacent to splays
extending from the SMSZ (e.g. Boto, Fekola, Gounkoto, Loulo, Yatela and Sadiola), this structure represents a high
priority target for future exploration activities.
Results released after year-end from drilling at one of the targets at the Western Splay area successfully intersected
a mineralised structure approximately 5km to the southwest of the Area A discovery and immediately west of the
main Western Splay structure. The drilling confirmed a mineralised trend over ~300m, which is believed to extend
by at least a further ~200m to the artisanal workings located along strike. Best intersections included:
22m at 2.12 g/t gold from 36m, including
- 1m at 13.90 g/t gold from 54m
2m at 19.80 g/t gold from 4m
6m at 1.79 g/t gold from 28m
10m at 1.10 g/t gold from 111m
This structure and the broader Western Splay area are considered highly prospective with multiple targets
expected to be tested in future drilling.
Chesser Resources Limited Annual Report 2020 | 9
DIRECTORS’ REPORT
Figure 7: Results from Western Splay target area drilling. The structure appears to be a sub-parallel structure to the main Western Splay
structure based on geophysics. Historic drilling and artisanal activity indicate a potential strike length of 500m, open in both directions.
Future Drill Programs
The Company is compiling all information from the most recent drill program and incorporating it into the database for
review, analysis and planning of next steps at Diamba Sud.
The highly significant results from Area D, the consistent results from Area A and the multiple, lightly tested targets at
Western Splay provide an excellent platform to launch the forthcoming drilling program at Diamba Sud. The Company is
expecting to increase its expenditure commitment significantly with a large program, currently estimated at 20,000 m of
RC and DD drilling, planned to commence as soon as practical at the expected end of the current wet season in October.
Figure 8: Diamba Sud Gold Project showing location of drilling undertaken during the year, highlights of drilling results,
auger geochemical anomalies map, highly prospective NW-SE trends and late NE trending fault
10 | Annual Report 2020 Chesser Resources Limited
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
CCoorrppoorraattee aaccttiivviittiieess
During the year the Company:
• Completed a private placement to sophisticated and institutional investors on 20 September 2019 to raise
$1.89 million (before costs) through the issue of 31,507,295 fully paid ordinary shares at an issue price of
$0.06 per share.
• Appointed Mr. Rob Greenslade as a Non-Executive Director of the Company in April 2020. Mr.
Greenslade has extensive experience in investment banking with over 30 years’ experience in mergers
and acquisitions, capital raisings and strategic advisory services predominantly in the resources industry.
Mr. Greenslade was previously Managing Director at Standard Chartered Bank and Head of Australia,
Metals and Mining Division, following the Bank’s acquisition of Gryphon Partners Advisory, a boutique
corporate advisory firm focusing on the resources sector of which he was a co-founder. Prior to Gryphon
Partners Advisory, Rob held various senior positions at Normandy Mining Limited, including Head of
Corporate Development and at Newmont Mining following Newmont’s takeover of Normandy.
• Completed a private placement to sophisticated and institutional investors on 6 April 2020 to raise $1.68
million (before costs) through the issue of 42 million fully paid ordinary shares at an issue price of $0.04
per share.
OOppeerraattiinngg rreessuulltt
The Company reported a loss after tax for the year of $1,135,683 (2019: loss of $2,018,453). The significant items
affecting the loss after tax were:
• A decrease in Impairment of capitalised exploration and evaluation expenditure. There was no impairment
in the financial year. In the prior period impairment charges totaling $732,955 were recognised in relation
to the Woye, Youboubou and Garaboureya tenements which have been relinquished by the Group.
• A decrease in travel expenses to $81,709 (2019: $177,878) reflecting reduced international travel by Group
personnel in the financial year as a consequence of COVID-19 related travel restrictions.
In the year ended 30 June 2020, the Group incurred capitalised exploration and evaluation expenditure totaling
$2,616,793 (2019: $1,519,643). This expenditure was principally incurred in relation to the Phase 3 and Phase 4
exploration drilling programs undertaken on the Diamba Sud gold project.
SSiiggnniiffiiccaanntt cchhaannggeess iinn tthhee rreeppoorrttiinngg yyeeaarr
The financial position and performance of the group was particularly affected by the following events and
transactions during the year-ended 30 June 2020:
• On 20 September 2019, Chesser issued 31,507,295 fully paid ordinary shares at an issue price of $0.06 to
raise $1.89 million before transaction costs. In addition to the Placement, on 18th December 2020, the
Company issued a further 583,333 shares at the Placement price of $0.06 per share to Directors to raise
funds totaling $35,000. A further $155,701 was received from the exercise of options.
• On 18 December 2019, Chesser issued 1,890,438 fully paid ordinary shares to Taylor Collison in payment
of the lead manager fee payable in relation to the 20 September 2019 capital raising.
• On 6 April 2020, Chesser issued 42,000,000 fully paid ordinary shares at an issue price of $0.04 to raise
$1.68 million before transaction costs.
Chesser Resources Limited Annual Report 2020 | 11
15 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
DDiivviiddeennddss
No dividends were paid or declared during the year and no recommendation is made as to payment of dividends.
IImmppaacctt ooff CCOOVVIIDD--1199
The outbreak of the COVID-19 pandemic in early 2020 and the subsequent travel and trade restrictions
imposed by the governments of numerous countries including Australia have caused disruption to businesses
and economic activity. The Board and Management of the Group have considered the impact of the COVID-
19 pandemic on the Group’s operations and financial performance and have determined that the Group has
not been materially impacted by the COVID-19 pandemic at this stage.
The Group received a $12,342 cash boost grant from the Australian government during the financial year as
part of the Australian government’s economic response to the COVID-19.
EEvveennttss ooccccuurrrriinngg aafftteerr bbaallaannccee sshheeeett ddaattee
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:
• Appointed Mr. Mark Connelly as Non-Executive Chairman of the Company in July 2020. Mr. Mark Connelly is
a seasoned executive with an impressive track record in African gold exploration and development, including
the US$570 million merger of Papillon Resources with B2 Gold Corp in 2014 and the US$600 million merger
of Adamus Resources with Endeavour Mining in 2011. More recently Mark was the Chairman of ASX listed
West African Resources through the development, construction and commissioning of the Sanbrado mine in
Burkina Faso, West Africa’s newest gold producer. Mark is currently Non-Executive Chairman at Oklo
Resources. Following the appointment, Mr Simon O’Loughlin moved to a Non-Executive Director role.
• Mr Stephen Kelly resigned as Non-Executive Director on 10th July 2020 and will continue to serve as Company
Secretary and Chief Financial Officer.
• On 10 July 2020, the Company entered into contractual commitments to issue up to 75,000,000 fully paid
ordinary shares at an issue price of $0.08 to raise up to $6 million before costs. The capital raising was settled
in two tranches as follows:
-
-
Tranche 1 comprising the issue of 29,339,068 fully paid ordinary shares settled on 17 July 2020.
Tranche 2 comprising the issue of 45,660,932 fully paid ordinary shares settled on 8 September 2020
• On 12 July 2020, 23,809,524 A Class Performance Shares expired without vesting.
• On 17 July 2020, the Company issued 21,000,000 unlisted options at an issue price of $0.08 and an expiry date
of 16 July 2021.
• On 8 September the Company issued 2,000,000 unlisted options with an exercise price of $0.08 and an
expiry date of 30 November 2023 to Taylor Collison as consideration for corporate advisory and lead
manager services.
•
In the period from 1 July 2020 to the date of this report, the Company has received $372,374 cash proceeds
from the exercise of 4,591,092 options.
12 | Annual Report 2020 Chesser Resources Limited
16 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
LLiikkeellyy ddeevveellooppmmeennttss aanndd eexxppeecctteedd rreessuullttss ooff ooppeerraattiioonnss
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.
EEnnvviirroonnmmeennttaall RReegguullaattiioonn
The Company was not subject to any significant environmental regulation under a law of the Commonwealth of
a State or Territory of Australia.
AAuuddiittoorr''ss iinnddeeppeennddeennccee ddeeccllaarraattiioonn
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
attached to this report.
SShhaarreess uunnddeerr OOppttiioonn
Unissued ordinary shares of the Company under option at the date of this report are as follows:
GGrraanntt DDaattee
EExxppiirryy DDaattee
EExxeerrcciissee pprriiccee
NNuummbbeerr
ooff ooppttiioonnss
uunnddeerr ooppttiioonnss
12/07/2017
31/12/2020
11/09/2017
31/12/2020
04/01/2019
31/12/2021
15/03/2019
31/12/2021
15/03/2019
31/12/2021
15/03/2019
31/12/2022
15/03/2019
31/12/2022
18/12/2019
30/11/2021
17/7/2020
16/7/2021
8/9/2020
30/11/2023
$0.10
$0.10
$0.05
$0.05
$0.05
$0.05
$0.05
$0.12
$0.08
$0.08
3,300,000
727,658
2,000,000
500,000
5,000,000
500,000
1,000,000
2,000,000
16,681,250
2,000,000
3333,,770088,,990088
No option holder has any right under the options to participate in any other share issue of the company or any
other entity.
SShhaarreess iissssuueedd aass aa rreessuulltt ooff tthhee eexxeerrcciissee ooff ooppttiioonnss
The Company issued 2,595,024 fully paid ordinary shares at an issue price of $0.06 during the financial year as a
result of the exercise of options.
In the period from 1 July 2020 to the date of this report, the Company has received $372,374 cash proceeds from
the exercise of 4,591,092 options.
SScchheedduullee ooff mmiinniinngg tteenneemmeennttss
As at 30 June 2020, the Company had interests in the following tenements:
TTEENNEEMMEENNTT
Diamba Sud
Diamba Nord
LLOOCCAATTIIOONN
Senegal
Senegal
IINNTTEERREESSTT
100%
100%
Chesser Resources Limited Annual Report 2020 | 13
17 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
RReemmuunneerraattiioonn RReeppoorrtt ((AAuuddiitteedd))
aa)) PPoolliiccyy ffoorr ddeetteerrmmiinniinngg tthhee nnaattuurree aanndd aammoouunntt ooff kkeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell rreemmuunneerraattiioonn
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.
Non-Executive Director Remuneration
OObbjjeeccttiivvee
The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to attract and retain
directors of a high calibre, whilst incurring a cost which is acceptable to shareholders.
SSttrruuccttuurree
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 plus statutory superannuation. 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 2020 (2019: $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
OObbjjeeccttiivvee
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.
SSttrruuccttuurree
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.
14 | Annual Report 2020 Chesser Resources Limited
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DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
Variable Remuneration - Short and Long-Term Incentives
OObbjjeeccttiivvee
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.
•
•
SSttrruuccttuurree
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.
bb)) RReemmuunneerraattiioonn,, GGrroouupp ppeerrffoorrmmaannccee aanndd sshhaarreehhoollddeerr wweeaalltthh
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.
FFiinnaanncciiaall YYeeaarr
2020
2019
2018
2017
2016
TToottaall
RReemmuunneerraattiioonn
$$
515,089
533,391
417,200
215,700
202,546
EEPPSS
((CCeennttss))
(0.40)
(0.95)
(0.49)
(0.58)
(0.31)
DDiivviiddeennddss
((CCeennttss))
SShhaarree PPrriiccee
((CCeennttss))
-
-
-
-
-
9.4
4.4
6.0
4.5
3.2
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.
Chesser Resources Limited Annual Report 2020 | 15
19 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
KKeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell
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):
NNaammee
Simon O’Loughlin
Simon Taylor
Robert Greenslade
Michael Brown
Stephen Kelly
PPoossiittiioonn HHeelldd
Non-Executive Chairman
Non-Executive Director
Non-Executive Director (appointed 8 April 2020)
Managing Director
Executive Director, CFO and Company Secretary
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.
• Mr Brown was 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
•
•
•
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 Company 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 (2019: monthly cap of $10,000),
•
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.
cc)) DDeettaaiillss ooff rreemmuunneerraattiioonn
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.
16 | Annual Report 2020 Chesser Resources Limited
20 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
22002200
CCaasshh aanndd
ssaallaarryy ffeeeess
SSuuppeerr--
aannnnuuaattiioonn
SShhaarree BBaasseedd
PPaayymmeennttss^^
TToottaall
rreemmuunneerraattiioonn
Non-Executive Directors
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Robert Greensladea
TToottaall NNoonn--EExxeeccuuttiivvee DDiirreeccttoorrss
$
40,000
40,000
10,000
9900,,000000
$
3,800
3,800
-
77,,660000
Executive Directors
Mr Michael Brown
Mr Stephen Kellyb
TToottaall EExxeeccuuttiivvee DDiirreeccttoorrss
TToottaall KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell
CCoommppeennssaattiioonn
a Appointed 8 April 2020
b Resigned 10 July 2020
^ Equity-settled share-based payments as per Corporations Regulation 2M.3.03(1) Item 11.
280,000
120,000
440000,,000000
449900,,000000
77,,660000
-
-
--
$
2,510
3,346
-
55,,885566
9,123
2,510
1111,,663333
1177,,448899
$
4466,,331100
4477,,114466
1100,,000000
110033,,445566
228899,,112233
112222,,551100
441111,,663333
551155,,008899
22001199
Non-Executive Directors
Mr Simon O’Loughlin
Mr Simon Taylor
TToottaall NNoonn--EExxeeccuuttiivvee DDiirreeccttoorrss
Executive Directors
Mr Michael Browna
Mr Stephen Kelly
TToottaall EExxeeccuuttiivvee DDiirreeccttoorrss
CCaasshh aanndd
ssaallaarryy ffeeeess
SSuuppeerr--
aannnnuuaattiioonn
SShhaarree bbaasseedd
ppaayymmeennttss
TToottaall
rreemmuunneerraattiioonn
$
40,000
40,000
8800,,000000
183,556
120,000
330033,,555566
$
3,800
3,800
77,,660000
-
-
--
$
2,583
3,444
66,,002277
21,625
2,583
2244,,220088
-
-
3300,,223355
$
4466,,338833
4477,,224444
9933,,662277
220055,,118811
112222,,558833
332277,,776644
111122,,000000
111122,,000000
553333,,339911
Other Key Management Personnel
Mr Simon McDonaldb
TToottaall OOtthheerr KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell
TToottaall KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell
CCoommppeennssaattiioonn
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.
112,000
112,000
449955,,555566
77,,660000
-
-
PPrrooppoorrttiioonn ooff
rreemmuunneerraattiioonn
tthhaatt iiss
ppeerrffoorrmmaannccee
bbaasseedd
%
5%
7%
-
66%%
33%%
22%%
33%%
33%%
PPrrooppoorrttiioonn ooff
rreemmuunneerraattiioonn
tthhaatt iiss
ppeerrffoorrmmaannccee
bbaasseedd
%
6%
7%
66%%
1111%%
22%%
1111%%
--
-
66%%
Chesser Resources Limited Annual Report 2020 | 17
21 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
dd))
SShhaarree--bbaasseedd ccoommppeennssaattiioonn
During the 2020 financial year the Company did not issue any share-based compensation to key management
personnel.
During the 2019 financial year, 5,500,000 options with an exercise price of $0.05 and an expiry date of 30 November
2021 were issued to key management personnel.
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period
are as follows:
DDaattee ooff ggrraanntt
VVeessttiinngg aanndd eexxeerrcciissee ddaattee
EExxppiirryy ddaattee
VVeesstteedd
EExxeerrcciissee
pprriiccee
VVaalluuee ppeerr
ooppttiioonn aatt
ggrraanntt ddaattee
NNuummbbeerr
ggrraanntteedd
26/02/2019
26/02/2019
30/11/2021
$0.05
$0.0105
916,667
100%
26/02/2019
05/11/2019
30/11/2021
$0.05
$0.0105
916,667
100%
26/02/2019
26/02/2019
Subject to achieving 10-day
VWAP of $0.075
Subject to achieving 10-day
VWAP of $0.10
30/11/2021
$0.05
$0.0101
1,833,333
100%
30/11/2021
$0.05
$0.0085
1,833,333
100%
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
During the financial year, 2,000,000 options previously issued as remuneration were exercised. The fair value of those
options at the time of exercise was $14,000 (2019: nil options exercised)
18 | Annual Report 2020 Chesser Resources Limited
22 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
ee)) UUnnlliisstteedd ooppttiioonn hhoollddiinnggss
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:
22002200
BBaallaannccee aatt
ssttaarrtt ooff yyeeaarr
GGrraanntteedd aass
ccoommppeennssaattiioonn
EExxeerrcciisseedd
HHeelldd oonn
aappppooiinnttmmeenntt
aass kkeeyy
mmaannaaggeemmeenntt
ppeerrssoonnnneell
BBaallaannccee aatt
eenndd ooff yyeeaarr
VVeesstteedd aanndd
eexxeerrcciissaabbllee
UUnnvveesstteedd
KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell ooff CChheesssseerr RReessoouurrcceess LLiimmiitteedd
R Greenslade
S Taylor
S O’Loughlin
M Brown
S Kelly
TToottaall
-
2,600,000
1,950,000
3,000,000
1,950,000
99,,550000,,000000
-
(800,000)
(600,000)
-
(600,000)
((22,,000000,,000000))
-
-
-
-
-
--
1,250,000
-
-
-
-
11,,225500,,000000
1,250,000
1,800,000
1,350,000
3,000,000
1,350,000
88,,775500,,000000
1,250,000
1,800,000
1,350,000
3,000,000
1,350,000
88,,775500,,000000
-
-
-
-
-
--
22001199
BBaallaannccee aatt
ssttaarrtt ooff
yyeeaarr
GGrraanntteedd aass
ccoommppeennssaattiioonn
EExxeerrcciisseedd
LLaappsseedd
BBaallaannccee aatt
eenndd ooff yyeeaarr
VVeesstteedd aanndd
eexxeerrcciissaabbllee
UUnnvveesstteedd
KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell ooff CChheesssseerr RReessoouurrcceess LLiimmiitteedd
S Taylor
S O’Loughlin
M Brown
S Kelly
S McDonalda
TToottaall
a Resigned 31 January 2019
1,000,000
750,000
3,000,000
750,000
-
55,,550000,,000000
1,600,000
1,200,000
-
1,200,000
2,000,000
66,,000000,,000000
-
-
-
-
-
--
-
-
-
-
(2,000,000)
((22,,000000,,000000))
2,600,000
1,950,000
3,000,000
1,950,000
-
99,,550000,,000000
1,766,667
1,325,000
500,000
1,325,000
-
44,,991166,,666677
833,333
625,000
2,500,000
625,000
-
44,,558833,,333333
SShhaarree hhoollddiinnggss
ff))
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 (2019: nil). In the prior period the Company
provided Mr Brown a non-recourse loan of $30,000 in relation to his acquisition of 600,000 shares.
SShhaarreess hheelldd oonn
aappppooiinnttmmeenntt aass
kkeeyy mmaannaaggeemmeenntt
ppeerrssoonnnneell
23,562,748
-
-
-
-
2233,,556622,,774488
22002200
BBaallaannccee aatt ssttaarrtt
ooff yyeeaarr
AAccqquuiissiittiioonnss
dduurriinngg tthhee yyeeaarr
BBaallaannccee aatt tthhee eenndd
ooff tthhee yyeeaarr
R Greenslade
S Taylor
S O’Loughlin
M Brown
S Kelly
TToottaall
1 Represents shares acquired on the exercise of options.
2 Represents shares subscribed for by the Key Management Personnel pursuant to an issuance of shares by the
23,562,748
4,300,001
3,433,334
1,458,333
1,745,000
3344,,449999,,441166
-
800,0001
600,0001
333,3332
850,0003
22,,558833,,333333
-
3,500,001
2,833,334
1,125,000
895,000
88,,335533,,333355
Company at an issue price of $0.038 per Share.
3 Comprised 250,000 shares subscribed for by the Key Management Personnel pursuant to an issuance of shares by
the Company and 600,000 shares acquired on the exercise of options.
Chesser Resources Limited Annual Report 2020 | 19
23 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
22001199
BBaallaannccee aatt ssttaarrtt
ooff yyeeaarr
S Taylor
S O’Loughlin
M Brown
S Kelly
S McDonalda
TToottaall
2,500,001
1,833,334
-
500,000
-
44,,883333,,333355
a Resigned 31 January 2019
SShhaarreess hheelldd oonn
aappppooiinnttmmeenntt aass
kkeeyy mmaannaaggeemmeenntt
ppeerrssoonnnneell
-
-
-
-
-
--
PPuurrcchhaasseess //
((ddiissppoossaallss)) dduurriinngg
tthhee yyeeaarr
BBaallaannccee aatt tthhee eenndd
ooff tthhee yyeeaarr
1,000,0001
1,000,0001
1,125,0002
395,0001
-
33,,552200,,000000
3,500,001
2,833,334
1,125,000
895,000
-
88,,335533,,333355
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.
No shares were received by key management personnel on the exercise of options during the 2019 financial year.
gg))
LLooaannss ttoo kkeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell
Except as noted below, there were no loans to key management personnel at any time during the financial year:
•
In the prior financial year, the Company provided the Managing Director 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. As at 30 June
2020 an amount of $3,000 was owing to KCG Advisors Pty Ltd for these services (2019: $Nil).
hh)) OOtthheerr ttrraannssaaccttiioonnss wwiitthh kkeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell
Except as disclosed in this Remuneration Report and noted below, there were no transactions with key management
personnel during the financial year (2019:$Nil).
• During the year, the Company paid KCG Advisors Pty Ltd, a company related to Mr Stephen Kelly who was an
Executive Director of the Company during the reporting period, a total of $9,000 (2019: $Nil) for the provision
of services including office rental for the Company’s registered office, internet and communications services
and software subscriptions.
VVoottiinngg aanndd ccoommmmeennttss mmaaddee aatt tthhee CCoommppaannyy’’ss 22001199 AAnnnnuuaall GGeenneerraall MMeeeettiinngg
ii))
The Company received more than 98% of “yes” votes on its remuneration report for the financial year ended 30 June
2019. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration
practices.
EEnndd ooff RReemmuunneerraattiioonn RReeppoorrtt
20 | Annual Report 2020 Chesser Resources Limited
24 | P a g e
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2020
Directors’ report
IInnssuurraannccee ooff ooffffiicceerrss
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
PPrroocceeeeddiinnggss oonn bbeehhaallff ooff tthhee GGrroouupp
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.
NNoonn--aauuddiitt SSeerrvviicceess
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 (2019: 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.
AAuuddiittoorr''ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
attached to this report.
AAuuddiittoorr
Pitcher Partners continues in office in accordance with section 327 of the Corporations Act 2001.
RRoouunnddiinngg ooff aammoouunnttss iinn aaccccoorrddaannccee wwiitthh AASSIICC CCoorrppoorraattiioonnss ((RRoouunnddiinngg iinn FFiinnaanncciiaall // DDiirreeccttoorrss’’ RReeppoorrttss)) IInnssttrruummeenntt
22001166//119911
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.
Mike Brown
Managing Director
Brisbane, 30 September 2020
Chesser Resources Limited Annual Report 2020 | 21
25 | P a g e
DIRECTORS’ REPORT
The Directors
Chesser Resources Limited
Level 14
167 Eagle Street
BRISBANE QLD 4000
Auditor’s Independence Declaration
In relation to the independent audit for the year ended 30 June 2020, to the best of my knowledge and
belief there have been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001;
and
(ii) no contraventions of APES110 Code of Ethics for Professional Accountants (including Independence
Standards).
This declaration is in respect of Chesser Resources Limited and the entities it controlled during the year.
PITCHER PARTNERS
JASON EVANS
Partner
Brisbane, Queensland
30 September 2020
26 | P a g e
22 | Annual Report 2020 Chesser Resources Limited
AUDITOR’S INDEPENDENCE DECLARATION
INDEPENDENT AUDITOR’S REPORT
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 2020,
the consolidated income statement, the consolidated statement of other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting policies,
and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2020 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 (including
Independence Standards) “the Code” that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
We 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.
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.
27 | P a g e
Chesser Resources Limited Annual Report 2020 | 23
INDEPENDENT AUDITOR’S REPORT
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 $6,596,618 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 2020 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 2020, 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.
24 | Annual Report 2020 Chesser Resources Limited
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 have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with 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, actions taken to eliminate
threats or safeguards applied.
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 2020 | 25
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 in pages 14 to 20 of the directors’ report for the year
ended 30 June 2020. In our opinion, the Remuneration Report of Chesser Resources Limited, for the year
ended 30 June 2020, 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
JASON EVANS
Partner
Brisbane, Queensland
30 September 2020
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.
26 | Annual Report 2020 Chesser Resources Limited
Chesser Resources Limited
Consolidated Income Statement
For the year ended 30 June 2020
CONSOLIDATED INCOME STATEMENT
Notes
22002200
$$
22001199
$$
7
12
13
Revenue and other income
Auditors’ remuneration
Key management personnel and employee remuneration
Depreciation expense
Finance charges
General and administrative expenses
Impairment of capitalised exploration expenditure
Other expenses
Professional fees
Travel expenses
Business development costs
Share based payments expense
Share registry and exchange listing fees
Foreign exchange (losses) / gains
1133,,440022
((5522,,000000))
((550077,,004411))
((7711,,111166))
((33,,660077))
((113300,,333399))
--
((117799,,880022))
--
((8811,,770099))
--
((3322,,119922))
((6644,,882288))
((2266,,445511))
1,396
(37,500)
(467,398)
(53,379)
(3,994)
(146,706)
(732,955)
(214,757)
(20,973)
(177,878)
(32,599)
(45,710)
(86,839)
839
LLoossss bbeeffoorree iinnccoommee ttaaxx eexxppeennssee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
((11,,113355,,668833))
(2,018,453)
Income tax expense
LLoossss ffoorr tthhee yyeeaarr aafftteerr ttaaxx
10
--
-
((11,,113355,,668833))
(2,018,453)
Loss attributable to Owners of Chesser Resources Limited
((11,,113355,,668833))
(2,018,453)
Basic and diluted loss per share (cents per share)
17
((00..4400))
(0.95)
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
31 | P a g e
Chesser Resources Limited Annual Report 2020 | 27
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Chesser Resources Limited
Consolidated statement of Comprehensive Income
For the year ended 30 June 2020
LLoossss ffoorr tthhee yyeeaarr aafftteerr ttaaxx
OOtthheerr ccoommpprreehheennssiivvee iinnccoommee
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Income tax relating to these items
OOtthheerr ccoommpprreehheennssiivvee iinnccoommee ffoorr tthhee yyeeaarr,, nneett ooff ttaaxx
22002200
$$
22001199
$$
((11,,113355,,668833))
(2,018,453)
-
-
--
402
-
402
TToottaall ccoommpprreehheennssiivvee lloossss ffoorr tthhee yyeeaarr
((11,,113355,,668833))
(2,018,051)
Comprehensive loss attributable to the owners of Chesser
Resources Limited
((11,,113355,,668833))
(2,018,051)
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
28 | Annual Report 2020 Chesser Resources Limited
32 | P a g e
Chesser Resources Limited
Consolidated Statement of Financial Position
As at 30 June 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CCuurrrreenntt aasssseettss
Cash and cash equivalents
Trade and other receivables
Prepayments
TToottaall ccuurrrreenntt aasssseettss
NNoonn--ccuurrrreenntt aasssseettss
Property, plant and equipment
Exploration and evaluation expenditure
Notes
22002200
$$
22001199
$$
21(a)
11
11,,227788,,660099
8800,,881199
5511,,886699
1,243,371
58,819
28,099
11,,441111,,229977
11,,333300,,228899
12
13
119955,,007766
66,,559966,,661188
177,040
3,979,825
TToottaall nnoonn--ccuurrrreenntt aasssseettss
66,,779911,,669944
44,,115566,,886655
TToottaall aasssseettss
CCuurrrreenntt lliiaabbiilliittiieess
Trade and other payables
TToottaall ccuurrrreenntt lliiaabbiilliittiieess
TToottaall lliiaabbiilliittiieess
NNeett aasssseettss
EEqquuiittyy
Issued capital
Reserves
Accumulated losses
TToottaall eeqquuiittyy
88,,220022,,999911
55,,448877,,115544
14
551133,,999966
315,100
551133,,999966
551133,,999966
331155,,110000
331155,,110000
77,,668888,,999955
55,,117722,,005544
15
16
1144,,224444,,773377
22,,009988,,117733
((88,,665533,,991155))
77,,668888,,999955
10,636,305
2,053,981
(7,518,232)
55,,117722,,005544
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
33 | P a g e
Chesser Resources Limited Annual Report 2020 | 29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Chesser Resources Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
22002200
IIssssuueedd CCaappiittaall
$
RReesseerrvveess
$
AAccccuummuullaatteedd
LLoosssseess
$
TToottaall EEqquuiittyy
$
BBaallaannccee aass aatt 11 JJuullyy 22001199
1100,,663366,,330055
22,,005533,,998811
((77,,551188,,223322))
55,,117722,,005544
Loss for the year
Other comprehensive income
TToottaall ccoommpprreehheennssiivvee lloossss ffoorr tthhee yyeeaarr
TTrraannssaaccttiioonnss wwiitthh oowwnneerrss iinn tthheeiirr
ccaappaacciittyy aass oowwnneerrss::
-
-
-
-
-
-
(1,135,683)
-
(1,135,683)
(1,135,683)
-
(1,135,683)
Issue of equity securities
Costs of issuing equity securities
Share based payments
TToottaall ttrraannssaaccttiioonnss wwiitthh oowwnneerrss iinn tthheeiirr
ccaappaacciittyy aass oowwnneerrss
3,874,566
(266,134)
-
3,608,432
-
-
44,192
44,192
-
-
-
-
3,874,566
(266,134)
44,192
3,652,624
BBaallaannccee aass aatt 3300 JJuunnee 22002200
1144,,224444,,773377
22,,009988,,117733
((88,,665533,,991155))
77,,668888,,999955
22001199
IIssssuueedd CCaappiittaall
$
RReesseerrvveess
$
AAccccuummuullaatteedd
LLoosssseess
$
TToottaall EEqquuiittyy
$
BBaallaannccee aass aatt 11 JJuullyy 22001188
88,,884400,,551122
22,,000077,,886699
((55,,449999,,777799))
55,,334488,,660022
Loss for the year
Other comprehensive income
TToottaall ccoommpprreehheennssiivvee lloossss ffoorr tthhee yyeeaarr
TTrraannssaaccttiioonnss wwiitthh oowwnneerrss iinn tthheeiirr
ccaappaacciittyy aass oowwnneerrss::
-
-
-
-
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
TToottaall ttrraannssaaccttiioonnss wwiitthh oowwnneerrss iinn tthheeiirr
ccaappaacciittyy aass oowwnneerrss
1,929,636
(133,843)
-
1,795,793
-
-
45,710
45,710
-
-
-
-
1,929,636
(133,843)
45,710
1,841,503
BBaallaannccee aass aatt 3300 JJuunnee 22001199
1100,,663366,,330055
22,,005533,,998811
((77,,551188,,223322))
55,,117722,,005544
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
34 | P a g e
30 | Annual Report 2020 Chesser Resources Limited
Chesser Resources Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
CCaasshh ffllooww ffrroomm ooppeerraattiinngg aaccttiivviittiieess
Interest received
Other income
Interest paid
Payments to suppliers and employees
NNeett ccaasshh fflloowwss uusseedd iinn ooppeerraattiinngg aaccttiivviittiieess
CCaasshh ffllooww ffrroomm iinnvveessttiinngg aaccttiivviittiieess
Payments for property, plant and equipment
Payments for exploration and evaluation expenditure
NNeett ccaasshh uusseedd iinn iinnvveessttiinngg aaccttiivviittiieess
CCaasshh ffllooww ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
Proceeds from share issue
Costs of issuing equity securities
NNeett ccaasshh pprroovviiddeedd bbyy ffiinnaanncciinngg aaccttiivviittiieess
RReeccoonncciilliiaattiioonn ooff ccaasshh aanndd ccaasshh eeqquuiivvaalleennttss
Cash and cash equivalents at the beginning of the year
Net increase (decrease) in cash and cash equivalents
Foreign exchange difference on cash and cash equivalents
22002200
$$
22001199
$$
11,,006600
1122,,334422
((33,,660077))
((995577,,999955))
((994488,,220000))
1,396
-
(3,994)
(1,191,716)
((11,,119944,,331144))
21(b)
((8899,,115522))
((22,,554477,,884422))
((22,,663366,,999944))
(65,540)
(1,678,329)
((11,,774433,,886699))
33,,776611,,113399
((114400,,770077))
33,,662200,,443322
1,875,600
(79,807)
11,,779955,,779933
11,,224433,,337711
3355,,223388
--
2,385,360
(1,142,390)
401
Cash and cash equivalents at 30 June
21(a)
11,,227788,,660099
11,,224433,,337711
Non-cash financing and investing activities
21(c)
The accompanying accounting policies and explanatory notes form an integral part of the financial statements
35 | P a g e
Chesser Resources Limited Annual Report 2020 | 31
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
1.
GGeenneerraall iinnffoorrmmaattiioonn
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 gold exploration in Senegal, West Africa.
2.
AApppplliiccaattiioonn ooff nneeww aanndd rreevviisseedd AAccccoouunnttiinngg SSttaannddaarrddss
AAddooppttiioonn ooff NNeeww aanndd RReevviisseedd SSttaannddaarrddss
The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current year including
AASB16 Leases. The adoption of these new and revised accounting standards and interpretations did not have any
material effect on the financial results or financial position of the Group or the Company for the reporting period.
NNeeww aaccccoouunnttiinngg ssttaannddaarrddss nnoott yyeett aaddoopptteedd
The Directors do not consider that the adoption of any new standards and Interpretations in issue but not yet
effective at the date of these financial statements will have a material impact on the financial statements of the
Group.
3.
aa))
SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess
SSttaatteemmeenntt ooff ccoommpplliiaannccee
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 authorised for issue by the Directors on 30 September 2020.
bb))
GGooiinngg ccoonncceerrnn
As at 30 June 2020 the Group had cash reserves of $1,278,609 (2019: $1,243,371), net working capital of $897,301
(2019 $1,015,189) and net assets of $7,688,995 (2019: $5,172,054). The Group incurred a loss for the year ended
30 June 2020 of $1,135,683 (2019 loss: $2,018,453), net cash outflows from operating activities of $948,200 (2019:
$1,194,314 outflows) and net outflows from investing activities of $2,636,994 (2019: $1,743,869 outflows).
As detailed in note 23, subsequent to 1 July 2020 the Company raised $6,000,000 before transaction costs through
the issue of 75,000,000 shares at an issue price of $0.08 per share and to the date of these financial statements had
received $372,374 on the exercise of options.
Taking into consideration the funds received by the Company subsequent to 30 June 2020, 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.
32 | Annual Report 2020 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 2020
3. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
cc))
BBaassiiss ooff pprreeppaarraattiioonn
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.
dd))
PPrriinncciipplleess ooff ccoonnssoolliiddaattiioonn
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Chesser Resources
Limited ("Company" or "parent entity") as at 30 June 2020 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. Intercompany 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.
Chesser Resources Limited Annual Report 2020 | 33
37 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
3. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
ee))
FFoorreeiiggnn ccuurrrreennccyy ttrraannssllaattiioonn
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.
34 | Annual Report 2020 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 2020
4.
FFiinnaanncciiaall rriisskk mmaannaaggeemmeenntt
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
22002200
$$
2019
$
1,278,609
80,819
1,359,428
513,996
513,996
1,243,371
58,819
1,302,190
309,959
309,959
Chesser Resources Limited Annual Report 2020 | 35
39 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
4.
FFiinnaanncciiaall rriisskk mmaannaaggeemmeenntt ((ccoonnttiinnuueedd))
aa)) MMaarrkkeett rriisskk
((ii))
FFoorreeiiggnn eexxcchhaannggee rriisskk
3300 JJuunnee 22002200
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Total assets
Net exposure
3300 JJuunnee 22001199
Cash and cash equivalents
Trade and other receivables
Trade and other payables
105,135
Total assets
11,,111166,,005544
Net exposure
11,,001100,,991199
AUD
Denominated
Balances
USD
Denominated
Balances
CFA
Denominated
Balances
TTOOTTAALL
3300 JJuunnee 22002200
851,306
21,969
887733,,227755
175,348
669977,,992277
168,723
-
116688,,772233
27,819
114400,,990044
258,580
58,850
331177,,443300
310,829
66,,660011
1,278,609
80,819
11,,335599,,442288
513,996
884455,,443322
AUD
Denominated
Balances
USD
Denominated
Balances
CFA
Denominated
Balances
TTOOTTAALL
3300 JJuunnee 22001199
1,092,946
23,108
4,093
28,477
3322,,557700
120,079
((8877,,550099))
146,332
1,243,371
7,234
58,819
115533,,556666
11,,330022,,119900
84,745
6688,,882211
309,959
999922,,223311
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
22002200
$$
((99,,111100))
99,,111100
2019
$
(1,869)
1,869
IInntteerreesstt rraattee rriisskk
((iiii))
The Group’s exposure to interest rate risk arises predominantly from cash and cash equivalents bearing variable
interest rates, as the Group intends to hold any fixed rate financial assets to maturity. At the end of the reporting
period the Group maintained the following variable rate accounts:
3300 JJuunnee 22002200
3300 JJuunnee 22001199
Weighted average
interest rate
%
0.1%
Balance
$$
11,,227788,,660099
Weighted average
interest rate
%%
0.5%
Balance
$$
11,,224433,,337711
Cash and cash equivalents
36 | Annual Report 2020 Chesser Resources Limited
40 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
4. FFiinnaanncciiaall rriisskk mmaannaaggeemmeenntt ((ccoonnttiinnuueedd))
IInntteerreesstt rraattee rriisskk ((ccoonnttiinnuueedd))
((iiii))
At the end of the reporting period, if the interest rates had changed, as illustrated in the table below, with all other
variables remaining constant, after-tax profit and equity would have been affected as follows:
+.1% (10bp) / (2019: +1%)
-0.1% (10bp)/ (2019: -1%)
AAfftteerr--ttaaxx lloossss hhiigghheerr // ((lloowweerr))
22002200
$$
1,279
(1,279)
22001199
$$
12,434
(12,434)
EEqquuiittyy hhiigghheerr // ((lloowweerr))
22002200
$$
22001199
$$
1,279
(1,279)
12,434
(12,434)
CCrreeddiitt rriisskk
bb))
cc))
Credit risk primarily arises from cash and cash equivalents and term deposits deposited with banks and receivables. Cash
and cash equivalents and term deposits are primarily placed with National Australia Bank Limited, which has an
independently rated credit rating of A1+. The Company has no past due or impaired financial assets in the period covered
by these financial statements. The carrying value of financial assets represents the maximum exposure to credit risk.
LLiiqquuiiddiittyy rriisskk
dd))
Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents in order to meet the Group’s
forecast requirements. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities. Surplus funds are generally only invested in bank
deposits. At reporting date, the Group did not have access to any undrawn borrowing facilities.
Maturity of financial liabilities
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period
at the reporting date to the contractual maturity date.
LLeessss tthhaann 33
mmoonntthhss
$$
TToottaall ccoonnttrraaccttuuaall
ccaasshh fflloowwss
$$
44 ttoo lleessss tthhaann 77
mmoonntthhss
$$
CCaarrrryyiinngg aammoouunntt
$$
30 June 2020
Trade and other payables
449999,,999911
1144,,000055
551133,,999966
551122,,119944
30 June 2019
Trade and other payables
LLeessss tthhaann 33
mmoonntthhss
$$
309,959
44 ttoo lleessss tthhaann 77
mmoonntthhss
$$
TToottaall ccoonnttrraaccttuuaall
ccaasshh fflloowwss
$$
CCaarrrryyiinngg aammoouunntt
$$
-
309,959
309,959
FFaaiirr vvaalluuee eessttiimmaattiioonn
ee))
ff))
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.
Chesser Resources Limited Annual Report 2020 | 37
41 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
5.
5.
CCrriittiiccaall aaccccoouunnttiinngg eessttiimmaatteess aanndd jjuuddggeemmeennttss
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 2020 the Group had capitalised exploration and evaluation expenditure of $6,596,618 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.
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.
SSeeggmmeenntt iinnffoorrmmaattiioonn
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.
AAccccoouunnttiinngg ppoolliiccyy
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.
38 | Annual Report 2020 Chesser Resources Limited
42 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
6. SSeeggmmeenntt iinnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
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.
AAccttiivviittyy bbyy sseeggmmeenntt
Senegal Projects
The Senegal Projects, which during the financial consisted of two exploration projects, are located adjacent and to the
west of the Senegal Mali Shear Zone in the Kédougou Inlier with a total area of 295kms2. The projects are: Diamba Sud
and Diamba Nord.
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 2020 and 2019, respectively.
Chesser Resources Limited Annual Report 2020 | 39
43 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
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40 | Annual Report 2020 Chesser Resources Limited
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
6. SSeeggmmeenntt iinnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
((ii))
SSeeggmmeenntt aasssseettss
The following table shows assets by geographical segment.
3300 JJuunnee 22002200
Segment assets
3300 JJuunnee 22001199
Segment assets
7.
RReevveennuuee aanndd ootthheerr iinnccoommee
Interest income
Government grants
AAccccoouunnttiinngg ppoolliiccyy
SSeenneeggaall
$
AAuussttrraalliiaa
$
TToottaall
$
77,,009922,,552277
11,,111100,,446644
88,,220022,,999911
4,338,655
1,148,499
5,487,154
22002200
$$
2019
$
11,,006600
1122,,334422
1133,,440022
1,396
-
11,,339966
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.
Government grants
Government grant revenue is recognised at fair value when there is reasonable assurance that the grant will be
received.
8.
EExxppeennsseess
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.
Short-term lease payments
Operating lease rentals
Superannuation contributions
22002200
$$
2019
$
4455,,553399
--
88,,443300
-
45,957
7,600
Payments associated with short-term leases of property are recognised on a straight-line basis as an expense in
the Income Statement. Short term leases are leases with a lease term of 12 months or less. Lease payments for
short-term leases amounting to $45,539 (2019: $45,957) are recognised as expenses in the Income Statement.
All short-term leases are cancellable by the Company by providing 2 months or less notice to the lessor.
Chesser Resources Limited Annual Report 2020 | 41
45 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
9.
RReemmuunneerraattiioonn ooff aauuddiittoorrss
During the year the following fees were paid or payable for services provided by the auditor of the parent entity
and its related practices:
22002200
$$
2019
$
Pitcher Partners Brisbane
(i) Audit and assurance services
Audit and review of financial reports
Total auditors’ remuneration
10.
IInnccoommee ttaaxx
((aa)) IInnccoommee ttaaxx bbeenneeffiitt
Current and deferred tax
5522,,000000
5522,,000000
37,500
37,500
--
--
-
-
((bb)) DDeeffeerrrreedd iinnccoommee ttaaxx//((rreevveennuuee))
Deferred income tax/(revenue) included in tax expense comprises:
(Increase)/decrease in deferred tax assets
Increase/(decrease) in deferred tax liabilities
((cc)) RReeccoonncciilliiaattiioonn ooff iinnccoommee ttaaxx eexxppeennssee ttoo pprriimmaa ffaacciiee iinnccoommee ttaaxx
Loss before income tax from continuing operations
Tax at the Australian tax rate of 27.5% (2019: 27.5%)
Tax effect of amounts which are not deductible/(taxable) in
calculating taxable income:
Different tax rates in other jurisdictions
Non-deductible expenses
Deductible capital raising costs
Deferred tax assets not recognised / (recognised)
Income tax benefit
((dd)) DDeeffeerrrreedd ttaaxx aasssseettss // lliiaabbiilliittiieess ccoommpprriissee
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
66,,446666
((66,,446666))
--
((11,,113355,,668833))
((331122,,331133))
((11,,664444))
115511,,330066
((1133,,884433))
((117766,,449944))
117766,,449944
--
5522,,005544
--
((1144,,226633))
223355,,886688
33,,220088,,330099
33,,448811,,996688
((33,,448811,,996688))
--
42 | Annual Report 2020 Chesser Resources Limited
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)
-
46 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
10. IInnccoommee ttaaxx ((ccoonnttiinnuueedd))
((ee)) UUnnrreeccooggnniisseedd ddeeffeerrrreedd ttaaxx aasssseettss
Deferred tax assets have not been recognised in respect of the
following items:
Temporary differences and tax losses at 27.5% (2019: 27.5%)
22002200
$$
2019
$
33,,448811,,996688
3,167,847
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.
AAccccoouunnttiinngg ppoolliiccyy
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.
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.
Chesser Resources Limited Annual Report 2020 | 43
47 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
11.
TTrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Current
Other receivables
22002200
$$
2019
$
8800,,881199
58,819
Other receivables represent the Company’s GST receivable and deposits paid in advance of drilling.
AAccccoouunnttiinngg PPoolliiccyy
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 except for advance
payments made on drilling contracts. 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.
PPrrooppeerrttyy,, ppllaanntt aanndd eeqquuiippmmeenntt
FFiieelldd EEqquuiippmmeenntt
MMoottoorr VVeehhiicclleess
OOffffiiccee
EEqquuiippmmeenntt
TTOOTTAALL
Carrying amount at 1 July 2018
56,847
105,241
2,791
116644,,887799
Additions
Depreciation
Carrying amount at 30 June 2019
Additions
Depreciation
Carrying amount at 30 June 2020
-
(12,751)
44,096
-
(12,751)
31,345
39,467
(32,159)
112,549
55,304
(39,874)
127,979
26,073
(8,469)
20,395
33,848
(18,491)
35,752
6655,,554400
((5533,,337799))
117777,,004400
8899,,115522
((7711,,111166))
119955,,007766
AAccccoouunnttiinngg PPoolliiccyy
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:
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.
44 | Annual Report 2020 Chesser Resources Limited
48 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
12. PPrrooppeerrttyy,, ppllaanntt aanndd eeqquuiippmmeenntt ((ccoonnttiinnuueedd))
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.
EExxpplloorraattiioonn aanndd eevvaalluuaattiioonn eexxppeennddiittuurree
22002200
$$
2019
$
At cost
66,,559966,,661188
3,979,825
Movements in exploration and evaluation expenditure during the year is summarized as follows:
Carrying amount at beginning of period
Exploration expenditure during the period
Impairment of exploration and evaluation expenditure (i)
Carrying amount at end of period
33,,997799,,882255
22,,661166,,779933
--
66,,559966,,661188
3,193,146
1,519,634
(732,955)
3,979,825
i.
Impairment of exploration expenditure
During the year ended 30 June 2019 the Group impaired 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.
AAccccoouunnttiinngg PPoolliiccyy
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
Chesser Resources Limited Annual Report 2020 | 45
49 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
13.
EExxpplloorraattiioonn aanndd eevvaalluuaattiioonn eexxppeennddiittuurree ((ccoonnttiinnuueedd))
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.
14.
TTrraaddee aanndd ootthheerr ppaayyaabblleess
Trade payables
Accruals
Total trade and other payables
22002200
$$
2019
$
331111,,332266
220022,,667700
551133,,999966
249,728
65,372
315,100
AAccccoouunnttiinngg PPoolliiccyy
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.
IIssssuueedd ccaappiittaall
22002200
$$
2019
$
Ordinary shares – fully paid
1144,,224444,,773377
10,636,305
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary
shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to
one vote.
((aa)) MMoovveemmeennttss iinn oorrddiinnaarryy sshhaarreess
Opening Balance 30 June 2019
Share issue on 20 September 2019 (a)
Share issue on 18 November 2019 (b)
Shares issued on 18 December 2019(c)
Shares issued on 8 January 2020(d)
Shares issued on 6 April 2020(e)
Share issue costs
Closing Balance 30 June 2020
46 | Annual Report 2020 Chesser Resources Limited
3300 JJuunnee 22002200
NNoo..
$$
248,780,181
31,507,295
211,095
4,557,700
300,000
42,000,000
-
332277,,335566,,227711
10,636,305
1,890,438
12,666
273,462
18,000
1,680,000
(266,134)
1144,,224444,,773377
50 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
15.
IIssssuueedd ccaappiittaall ((ccoonnttiinnuueedd))
The following movements have occurred against Share Capital during the year:
a) On 20 September 2019, Chesser issued 31,507,295 fully paid ordinary shares at $0.06 per share via a
private placement;
b) On 18 November 2019, Chesser issued 211,095 fully paid ordinary shares at $0.06 per share pursuant to
exercise of options;
c) On 18 December 2019, Chesser issued 2,083,929 fully paid ordinary shares at $0.06 per share pursuant
to exercise of options, 1,890,438 fully paid ordinary shares at $0.06 per share to Taylor Collison as
payment of a capital raising fee and 583,333 fully paid shares at $0.06 per share pursuant to Director
Subscription;
d) On 8 January 2020 Chesser issued 300,000 fully paid ordinary shares at $0.06 per share pursuant to
exercise of options;
e) On 6 April 2020, Chesser issued 42,000,000 fully paid ordinary shares at $0.04 per share via a private
placement.
MMoovveemmeennttss iinn oorrddiinnaarryy sshhaarreess
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
3300 JJuunnee 22001199
NNoo..
198,683,181
20,780,000
1,246,800
3,695,200
24,375,000
-
224488,,778800,,118811
$$
8,840,512
789,640
47,378
117,618
975,000
(133,843)
1100,,663366,,330055
The following movements have occurred against Share Capital during the year:
a)
b)
c)
d)
On 4 January 2019, Chesser issued 20,780,000 fully paid ordinary shares at $0.038 per share via a private
placement;
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;
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;
On 23 May 2019, Chesser issued 24,375,000 fully paid ordinary shares at $0.04 per share via a private
placement.
((bb)) CCaappiittaall mmaannaaggeemmeenntt
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.
Chesser Resources Limited Annual Report 2020 | 47
51 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
15.
IIssssuueedd ccaappiittaall ((ccoonnttiinnuueedd))
((cc)) SShhaarree ooppttiioonnss
At 30 June 2020, the following options for ordinary shares in the Company were on issue:
Options with
a $0.06
exercise price
expiring 31
Dec 2019
Options with
a $0.10
exercise price
expiring 31
Dec 2020
Options with
a $0.05
exercise price
expiring 31
Dec 2021
Options
with a $0.05
exercise
price
expiring 31
Dec 2022
Options with
a $0.12
exercise price
expiring 30
Nov 2021
Total
options on
issue
4,300,000
(2,595,024)
(1,704,976)
4,300,000
-
-
7,500,000
-
-
1,500,000
-
-
-
-
-
17,600,000
(2,595,024)
(1,704,976)
-
--
-
44,,330000,,000000
-
77,,550000,,000000
-
11,,550000,,000000
2,000,000
22,,000000,,000000
2,000,000
1155,,330000,,000000
On issue at 1 July 2019
Options exercised
Options lapsed
Options issued as
consideration for capital
raising fees
On issue at 30 June 2020
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.
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
Dec 2019
Options with
a $0.10
exercise price
expiring 31
Dec 2020
Options
with a $0.05
exercise
price
expiring 31
Dec 2021
Options
with a $0.05
exercise
price
expiring 31
Dec 2022
Total
options on
issue
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
4,300,000
-
4,300,000
-
-
5,500,000
-
1,500,000
8,600,000
7,000,000
-
-
2,000,000
-
2,000,000
44,,330000,,000000
44,,330000,,000000
77,,550000,,000000
11,,550000,,000000
1177,,660000,,000000
Refer note 16 for further details regarding the accounting treatment of the options issued during the 2019
financial year.
48 | Annual Report 2020 Chesser Resources Limited
52 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
16.
RReesseerrvveess
Share based payments reserve
Foreign currency translation reserve
MMoovveemmeennttss::
Foreign currency translation reserve
Balance at 1 July 2019
Currency translation difference for the year
Balance at 30 June 2020
Share based payments reserve
Balance at 1 July 2019
Options issued
Balance at 30 June 2020
NNaattuurree aanndd ppuurrppoossee ooff rreesseerrvveess
22002200
$$
2019
$
22,,009988,,117733
2,053,981
--
-
22,,009988,,117733
22,,005533,,998811
--
--
--
22,,005533,,998811
4444,,119922
22,,009988,,117733
(402)
402
--
2,008,271
45,710
22,,005533,,998811
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.
AAccccoouunnttiinngg PPoolliiccyy
Share-based compensation benefits are provided to directors and key management personnel and to external
service provides as consideration services provided.
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 as remuneration is recognised as share-based payments 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:
Chesser Resources Limited Annual Report 2020 | 49
53 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
16.
RReesseerrvveess ((ccoonnttiinnuueedd))
Options issued to directors (ii)
Options issued to third-party vendors (i) and (iii)
Options issued to employees (iv)
Loan funded shares issue to directors (v)
SShhaarree--bbaasseedd ppaayymmeennttss eexxppeennssee ffoorr tthhee ffiinnaanncciiaall yyeeaarr
3300 JJuunnee
22002200
$$
3300 JJuunnee
22001199
$$
17,489
19,015
7,688
-
4444,,119922
22,194
8,695
6,781
8,040
4455,,771100
(i) On 9 November 2019 the Company issued 2,000,000 options to the brokers in consideration for services
provided to the Company in relation to the September share placement. The options were issued with an
exercise price of $0.12 and an expiry date of 30 November 2021. The options vested immediately.
The fair value of the options at grant date has been estimated using the Black Scholes 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
$0.12
52%
0.80%
713
$0.06
$0.006
(ii) 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. The vesting condition was satisfied 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 vesting condition was satisfied prior to 30 June 2020.
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:
50 | Annual Report 2020 Chesser Resources Limited
54 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
16.
RReesseerrvveess ((ccoonnttiinnuueedd))
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
(iii) 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.
• 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
(iv) 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 vested 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.
Chesser Resources Limited Annual Report 2020 | 51
55 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
16.
RReesseerrvveess ((ccoonnttiinnuueedd))
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
(v) 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.
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
Loan funded
shares
$0.04
50%
2.07%
2.78 years
2.50
$0.04
$0.01
52 | Annual Report 2020 Chesser Resources Limited
56 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
17.
LLoossss ppeerr sshhaarree
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)
22002200
$$
((00..4400))
((00..4400))
2019
$
(0.95)
(0.95)
Loss attributable to Owners of Chesser Resources Limited
((11,,113355,,668833))
(2,018,453)
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
SShhaarreess
Shares
228855,,668899,,779988
212,934,354
228855,,668899,,779988
212,934,354
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.
AAccccoouunnttiinngg ppoolliiccyy
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.
18.
PPaarreenntt eennttiittyy ddiisscclloossuurreess
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.
Chesser Resources Limited Annual Report 2020 | 53
57 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
18.
PPaarreenntt eennttiittyy ddiisscclloossuurreess ((ccoonnttiinnuueedd))
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.
SSuummmmaarryy ffiinnaanncciiaall iinnffoorrmmaattiioonn
aa))
The individual financial statements for the parent entity show the following aggregations.
RReessuullttss
Profit/(loss) for the year
Total comprehensive income for the year
FFiinnaanncciiaall PPoossiittiioonn
Current assets
Non-current assets
Current liabilities
Net Assets
Contributed equity
Share-based payments reserve
Accumulated losses
22001199
22002200
$$
$$
CChheesssseerr RReessoouurrcceess LLiimmiitteedd
((11,,006688,,221177))
((11,,006688,,221177))
(2,406,802)
(2,406,802)
11,,007799,,226611
66,,664400,,880099
77,,772200,,007700
220033,,116655
220033,,116655
1,148,498
3,880,894
5,029,392
96,894
96,894
77,,551166,,990055
4,932,498
1144,,224444,,773377
22,,009988,,117733
((88,,882266,,000055))
77,,551166,,990055
10,636,305
2,053,981
(7,757,788)
4,932,498
GGuuaarraanntteeeess eenntteerreedd iinnttoo bbyy tthhee ppaarreenntt eennttiittyy
bb))
Chesser Resources Limited has not entered into any guarantees in the current or previous financial year, in relation
to the debt of its subsidiaries
CCoonnttiinnggeenntt lliiaabbiilliittiieess ooff tthhee ppaarreenntt eennttiittyy
cc))
The parent entity did not have any contingent liabilities as at 30 June 2020 or 30 June 2019.
CCoonnttrraaccttuuaall ccoommmmiittmmeennttss ffoorr ccaappiittaall eexxppeennddiittuurree
dd))
The parent entity did not have any contractual commitments for capital expenditure as at 30 June 2020 (2019: $nil).
54 | Annual Report 2020 Chesser Resources Limited
58 | P a g e
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
NOTES TO THE FINANCIAL STATEMENTS
SSuubbssiiddiiaarriieess
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
CCoouunnttrryy ooff
iinnccoorrppoorraattiioonn
CCllaassss ooff sshhaarreess
EEqquuiittyy hhoollddiinngg
22002200
%
110000
110000
110000
110000
110000
110000
110000
110000
22001199
%
110000
110000
110000
110000
110000
110000
110000
110000
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 2019 financial year with Chesser Resources Limited as the founding and
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
sole shareholder.
RReellaatteedd ppaarrttiieess
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, the Company paid KCG Advisors Pty Ltd, a company related to Mr Stephen Kelly who was an Executive
Director of the Company during the reporting period, a total of $9,000 (2019: $Nil) for the provision of services
including office rental for the Company’s registered office, internet and communications services and software
subscriptions.
There were no other transactions between the Group and other related parties in the current or prior financial year.
21.
CCaasshh ffllooww iinnffoorrmmaattiioonn
aa)) CCaasshh aanndd ccaasshh eeqquuiivvaalleennttss
Cash at bank and on hand
bb)) RReeccoonncciilliiaattiioonn ooff ccaasshhfflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess
Loss before tax
Depreciation and amortisation
Impairment of capitalised exploration expenditure
Foreign exchange (losses) / gains
Share based payments expense
22002200
$$
22001199
$$
11,,227788,,660099
1,243,371
((11,,113355,,668833))
(2,018,453)
7711,,111166
--
2266,,445511
3322,,119922
53,379
732,955
(839)
45,710
Chesser Resources Limited Annual Report 2020 | 55
59 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
21. CCaasshh ffllooww iinnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
c) RReeccoonncciilliiaattiioonn ooff ccaasshhfflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess ((ccoonnttiinnuueedd))
Change in operating assets and liabilities (net of disposals):
(Increase)/decrease in trade or other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
Net cash outflow from operating activities
dd)) NNoonn--ccaasshh iinnvveessttiinngg aanndd ffiinnaanncciinngg aaccttiivviittiieess
Issue of shares in settlement of capital raising costs
Issue of options in settlement of capital raising costs
Issue of loan funded shares
22002200
$$
22001199
$$
3344,,440033
((2233,,777700))
4477,,009911
((994488,,220000))
113,426
12,000
-
(41,254)
17,096
17,092
(1,194,314)
54,036
-
30,000
AAccccoouunnttiinngg ppoolliiccyy
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid
investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of
changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.
22.
CCoommmmiittmmeennttss aanndd ccoonnttiinnggeenntt lliiaabbiilliittiieess
((aa))
CCoommmmiittmmeennttss
OOppeerraattiinngg lleeaasseess
Commitments for minimum lease payments in relation to operating leases are payable as follows:
Within one year
Later than one year but not later than five years
22002200
$$
22001199
$$
--
--
--
4,201
-
4,201
Payments associated with short-term leases of property are recognised on a straight-line basis as an expense in the
Income Statement. Short term leases are leases with a lease term of 12 months or less.
TTeenneemmeenntt eexxppeennddiittuurree ccoommmmiittmmeennttss
Commitments for minimum exploration expenditure required to retain tenue on the Group’s exploration tenements
are:
Within one year
Later than one year but less than five years
Later than five years
56 | Annual Report 2020 Chesser Resources Limited
22002200
$$
--
1,160,597
--
11,,116600,,559977
22001199
$$
--
3,581,586
--
33,,558811,,558866
60 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2020
22.
CCoommmmiittmmeennttss aanndd ccoonnttiinnggeenntt lliiaabbiilliittiieess ((ccoonnttiinnuueedd))
((bb)) CCoonnttiinnggeenntt lliiaabbiilliittiieess
Pursuant to the terms of the agreement for the acquisition of the Senegal exploration tenements, the Group issued
the following performance shares on 12 July 2017:
• 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.
EEvveennttss ooccccuurrrriinngg aafftteerr tthhee rreeppoorrttiinngg ppeerriioodd
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:
• Appointed Mr Mark Connelly Non-Executive Chairman on 10th July 2020. Mr Simon O’Loughlin moved to a Non-
Executive Director role.
• Mr Stephen Kelly resigned as Non-Executive Director on 10th July 2020 and will continue to serve as Company
Secretary and Chief Financial Officer.
• On 10 July 2020, the Company entered into contractual commitments to issued up to 75,000,000 fully paid
ordinary shares at an issue price of $0.08 to raise up to $6 million before costs. The capital raising was settled in
two tranches as follows:
-
-
Tranche 1 comprising the issue of 29,339,068 fully paid ordinary shares settled on 17 July 2020.
Tranche 2 comprising the issue of 45,660,932 fully paid ordinary shares settled on 8 September 2020
• On 12 July 2020, 23,809,524 A Class Performance Shares expired without vesting.
• On 17 July 2020, the Company issued 21,000,000 unlisted options at an issue price of $0.08 and an expiry date
of 16 July 2021.
• On 8 September 2020 the Company issued 2,000,000 unlisted options with an exercise price of $0.08 and
an expiry date of 30 November 2023 to Taylor Collison as consideration for corporate advisory and lead
manager services.
•
In the period from 1 July 2020 to the date of this report, the Company has received $372,374 cash proceeds from
the exercise of 4,591,092 options.
Chesser Resources Limited Annual Report 2020 | 57
61 | P a g e
DIRECTORS’ DECLARATION
CCHHEESSSSEERR RREESSOOUURRCCEESS LLTTDD
DDIIRREECCTTOORRSS’’ DDEECCLLAARRAATTIIOONN
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 2020 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.
(d) The Directors’ have been given the declarations by the Chief Executive Officer and Chief Financial Officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of directors.
MMiikkee BBrroowwnn
MMaannaaggiinngg DDiirreeccttoorr
BBrriissbbaannee,, 3300 SSeepptteemmbbeerr 22002200
58 | Annual Report 2020 Chesser Resources Limited
62 | P a g e
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
In accordance with ASX Listing Rule 4.10, the Company provides the following information to
shareholders not elsewhere disclosed in the Annual Report.
The shareholder information set out below was applicable as at 11 September 2020.
A. CORPORATE GOVERNANCE STATEMENT
The Company has prepared a Corporate Governance Statement which sets out the corporate
governance practices that were in operation in the year ended 30 June 2020.
In accordance with ASX Listing Rule 4.10.3, the Corporate Governance Statement will be available for
review on the Company’s website www.chesserresources.com.au and will be lodged with the ASX at
the same time that this Annual Report is lodged with the ASX.
B. DISTRIBUTION AND NUMBER OF HOLDERS OF EQUITY SECURITIES
The distribution and number of holders of equity securities on issue in the Company as at 11
September 2020, and the number of holders holding less than a marketable parcel of the company’s
ordinary shares based on the closing market price as at 11 September 2020 is as follows:
Listed fully
paid
ordinary
shares
(ASX:CHZ)
98
0.01%
293
0.23%
204
0.42%
680
7.22%
436
92.12%
1,711
100%
Unlisted
Performance
Shares
(ASX: CHZAA)
-
0.00%
-
0.00%
-
0.00%
1
0.32%
24
99.68%
25
100%
Unlisted
Options
various
exercise
dates and
prices
(ASX:CHZAO)
-
0.00%
1
0.02%
10
0.69%
9
1.23%
13
98.05%
33
100%
Unlisted
$0.08
options
expiring 16
July 2021
(ASX:CHZAP)
-
0.00%
-
0.00%
-0
0.00%
7
3.44%
34
96.56%
41
100%
Unlisted
$0.08
options
expiring 30
November
2023
(ASX:CHZAQ)
-
0.00%
-
0.00%
-
0.00%
-
0.00%
1
100%
1
100%
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
There were 225 holders of less than a marketable parcel of shares as at 11 September 2020.
As at 11 September 2020, there were NIL equity securities which were subject to restrictions.
Chesser Resources Limited Annual Report 2020 | 59
63 | P a g e
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
C. TWENTY LARGEST QUOTED EQUITY SECURITY HOLDERS
The Company has only one class of quoted equity securities, being fully paid ordinary shares
(ASX:CHZ). The names of the twenty largest holders of fully paid ordinary shares, the number of fully
paid ordinary shares and the percentage of fully paid ordinary shares on issue as at 11 September
2020 was as follows:
Name
HSBC Custody Nominees (Australia) Limited
Elliot Services Pty Ltd
GP Securities Pty Ltd
Citicorp Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
CPO Superannuation Fund
Jarhamche Pty Ltd
J P Morgan Nominees Australia Pty Limited
Calama Holdings Pty Ltd
AWJ Family Pty Ltd
Torres Investments Pty Ltd
Mr Michael Andrew Whiting + Mrs Tracey Anne Whiting
Souttar Superannuation Pty Ltd
Mase Global Investments Limited
BPM Capital Limited
Kale Capital Corporation Ltd
Jimzbal Pty Ltd
National Nominees Limited
Mr Angus William Johnson + Mrs Lindy Johnson
Taycol Nominees Pty Ltd
Total
Balance of register
Units
19,992,119
18,141,218
13,865,523
13,726,243
10,496,667
8,634,452
7,615,441
7,565,462
7,366,667
5,796,940
5,150,000
5,027,114
4,981,177
4,510,819
4,410,800
4,400,000
4,300,001
4,000,000
3,636,667
3,582,808
157,200,118
249,227,840
406,427,958
% of Units
4.92
4.46
3.41
3.38
2.58
2.12
1.87
1.86
1.81
1.43
1.27
1.24
1.23
1.11
1.09
1.08
1.06
0.98
0.89
0.88
38.68
61.32
100.00
D. HOLDERS OF MORE THAN TWENTY PERCENT OF EACH CLASS OF UNQUOTED SECURITIES
Each unlisted option and performance shares entitles to the holder to acquire one fully paid
ordinary shares subject to any vesting conditions being satisfied and in the case of options
subject to the holder paying the exercise price
The names of the holders of more than 20% of each class of options or performance shares,
other than under an Employee Incentive Scheme, is set out below:
MGC Pharmaceuticals Ltd
Holder
60 | Annual Report 2020 Chesser Resources Limited
Unlisted
Performance Shares
(ASX: CHZAA)
Units
5,714,286
% of units
24.00
64 | P a g e
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
D. HOLDERS OF MORE THAN TWENTY PERCENT OF EACH CLASS OF UNQUOTED SECURITIES
(continued)
Taycol Nominees Pty Ltd
Holder
E. VOTING RIGHTS
Unlisted $0.08 options
expiring 30 November 2023
(ASX:CHZAQ)
Units
2,000,000
% of units
100.00
At a general meeting of the Company, every holder of ordinary shares present in person or by proxy,
attorney or representative has one vote on a show of hands, and on a poll, one vote for each
ordinary share held.
Options and performance shares do not carry any voting rights.
F. SUBSTANTIAL SHAREHOLDERS
As at 16 September 2020, the names of the substantial shareholders of the Company and the number
of equity securities in which those substantial shareholders and their associates have a relevant
interest, as disclosed in substantial shareholding notices given to the Company were as follows:
Name
Number held
%
Robert Greenslade
23,562,748
issued
of
capital
5.80%
G. ON-MARKET BUY-BACK
The Company is not currently conduction an on-market buy-back.
H. ON-MARKET BUY-BACK
The Company did not purchase securities on market during the reporting period.
Chesser Resources Limited Annual Report 2020 | 61
65 | P a g e
CORPORATE DIRECTORY
Board of Directors
Mr Mark Connelly
Mr Robert Greenslade
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Michael Brown
Company Secretary
Mr Stephen Kelly
CORPORATE DIRECTORY
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Managing Director
Registered Office and Principal Place of Business
Level 14
167 Eagle Street
Brisbane QLD 4000
Phone number: + 61 7 3854 2387
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
62 | Annual Report 2020 Chesser Resources Limited
66 | P a g e
CORPORATE DIRECTORY
Level 14,
167 Eagle Street
Brisbane QLD 4000
chesserresources.com.au